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16 June 2015
Mescalero Apache Man Pleads Guilty to Federal Voluntary Manslaughter ChargeRead the Press Release
ALBUQUERQUE – Jerrick Blake, 22, a member of the Mescalero Apache Nation who resides in Mescalero, N.M., pleaded guilty this morning in Las Cruces, N.M., to a voluntary manslaughter charge.
According to court filings, Blake killed the victim on the afternoon of Nov. 3, 2014, by stabbing him in the chest with a knife. The crime occurred during an argument between Blake and the victim on the Mescalero Apache Reservation in Otero County, N.M.
During today’s proceedings, Blake pled guilty to a felony information charging him with voluntary manslaughter. In entering his guilty plea, Blake admitted killing the victim by stabbing him in the chest during a sudden quarrel.
At sentencing, Blake faces a statutory maximum penalty of 15 years in prison followed by at least three years of supervised release. Blake has been in federal custody since his arrest and remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Mescalero Agency of the BIA’s Office of Justice Services and the Mescalero Apache Tribal Police Department. Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
Mertztown Woman Charged in Conspiracy Involving Construction CompaniesRead the Press Release
PHILADELPHIA - Judy Noll, 52, of Mertztown, PA, was charged today by Information with one count of conspiracy to commit wire fraud, announced United States Attorney Zane David Memeger. Noll, President of Karen Construction Company, Inc. (Karen Construction) engaged in a scheme to defraud the United States Department of Transportation through the Disadvantaged Business Enterprise program (DBE) by posing as a DBE, when in fact it was not, in order to secure contracts on federally funded highway projects under the DBE program. From approximately January 2002 through October 2011, Noll, as President of Karen Construction, wrongfully obtained DBE subcontracts totaling an estimated $11.9 million involving approximately 133 federally funded projects.
If convicted, the defendant faces a maximum sentence of five years in prison, two years of supervised release, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by the United States Department of Transportation Office of Inspector General, the Federal Bureau of Investigation, and the Department of Labor Office of Inspector General/Office of Labor Racketeering and Fraud Investigations. It is being prosecuted by Assistant United States Attorney Mary Kay Costello.
Media Advisory: Safe Streets Task Force Makes ArrestsRead the Press Release
Cedar Rapids, Iowa – The United States Attorney’s Office for the Northern District of Iowa will join members of the FBI coordinated Cedar Rapids Safe Streets Task Force in holding a joint press conference on June 18, 2015, where they will announce federal gun-related criminal charges against ten individuals. The purpose of the joint law enforcement action is to reduce incidences of gun violence.
Event Details
When: Thursday, June 18, 2015
Where: Cedar Rapids Police Department (Community Room), 505 1st Street SW, Cedar Rapids, IA.
Time: 11:30 am.
Program
A press release and interview opportunities will be available at the end of the press conference.
Man Pleads Guilty to Charge of Illegally Landing Airplane in Federal WildernessRead the Press Release
Spokane - Michael C. Ormsby, the United States Attorney for the Eastern District of Washington, announced that Brent Dawson of Walla Walla, Washington recently plead guilty to illegally landing his airplane on Smooth Ridge during the fall of 2013 and 2014. Smooth Ridge is located in the Wenaha-Tucannon Wilderness area.
According to information disclosed during court proceedings, in the fall of 2014 a group of hunters, deep in the Wilderness, observed an airplane flying low and landing in a meadow on Smooth Ridge. These hunters were upset. As reported to Forest Service Law Enforcement Officer Austin Hess, this was the second year an individual had accessed the Wilderness using the same airplane, with the plane’s tail numbers being removed in 2014. The hunters reported that they had spent time and energy accessing this remote, secluded area of the Wilderness to hunt, only then to discover that a pilot (that is, Dawson) simply flew his plane into the area. One of the hunters came forward, reported the incidences, and ultimately received a cash reward for his cooperation in the investigation.
Photos and detailed description of events provided by the hunters led to the identification of Dawson as being the owner of the plane. Forest Service Officer Hess confirmed that Dawson was the registered owner of the plane and that the area where he landed was in fact within the bounds of the Wilderness and thus not a designated landing area.
Michael C. Ormsby said, "Federal Wilderness lands are a treasure – especially here in the Northwest. This guilty plea shows our office’s commitment to preserving that treasure for future generations to enjoy."
The 1964 Wilderness Act defines "Wilderness" as areas where the earth and its communities of life are left unchanged by people, where the primary forces of nature are in control, and where people themselves are visitors who do not remain. Wilderness act regulations prohibit the use or operation of motorized or mechanized equipment within a designated Wilderness Area. The crime of operating a motor vehicle in the wilderness is a Class B misdemeanor that has a maximum fine of $5000 and 6 months in jail.
The investigation was conducted by the United States Forest Service. The case was prosecuted by Legal Intern Corey Sewell and Assistant United States Attorney Tyler H.L. Tornabene.
Lead Defendant in Curry County Drug Trafficking Ring Sentenced 78 Months in Federal PrisonRead the Press Release
ALBUQUERQUE – Christopher Jason Kidd, 38, of Clovis, N.M., was sentenced today in Albuquerque, N.M., to 78 months in prison for his methamphetamine trafficking conviction. Kidd will be supervised release for five years after completing his prison sentence.
Kidd and his three co-defendants, Tina Tafoya, 33, and John Jesse Perez, Jr., 46, both of Clovis, N.M., and Jeannette Driever, 37, of Grady, N.M., were indicted in Feb. 2014, on federal methamphetamine trafficking charges. Count 1 of the three-count indictment charged the four defendants with conspiring to distribute methamphetamine in Curry County, N.M., between Sept. 2013 and Nov. 2013. Count 2 charged Kidd and Tafoya with possession of methamphetamine with intent to distribute on Nov. 6, 2013. Count 3 charged Driever and Perez with possession of methamphetamine with intent to distribute also on Nov. 6, 2013.
Kidd entered a guilty plea on Nov. 17, 2014, and admitted that he conspired with his co-defendants to distribute methamphetamine in Curry County. More specifically Kidd admitted that he and Tafoya supplied quantities of methamphetamine to others, including Driever and Perez, who resold the methamphetamine in smaller quantities to users. According to Kidd’s plea agreement, on Nov. 9, 2013, Kidd and Tafoya supplied a pound of methamphetamine to Driever and Perez. On that day, Kidd and Tafoya possessed another half-pound of methamphetamine at their residence. The methamphetamine was seized later that day pursuant to search warrants.
Driever and Perez entered guilty pleas to federal drug trafficking charges on Nov. 20, 2014. Each pled guilty to participating in a conspiracy to distribute methamphetamine in Curry County. Driever admitted that she and Perez obtained quantities of methamphetamine from Kidd and Tafoya and then distributed the methamphetamine to others. Perez acknowledged participating in a methamphetamine trafficking conspiracy that involved Driever, Kidd, Tafoya and others. Tafoya entered a guilty plea on Dec. 17, 2014, and admitted conspiring with Kidd, Driever and Perez to distribute methamphetamine in Curry County in fall of 2013.
Kidd’s co-defendants remain in federal custody pending their sentencing hearings, which have not been scheduled. Under the terms of their plea agreements, they will be sentenced to serve the following prison sentences: Tafoya will be sentenced to 78 months; Driever will be sentenced to 60 months; and Perez will be sentenced to 36 months. Each will serve a five year term of supervised release after completing his or her prison sentence.
This case was investigated by the Las Cruces Agency Office of the FBI’s Albuquerque Division, the Region V Drug Task Force and the New Mexico State Police, with assistance from the Ninth Judicial District Attorney’s Office. The Region V Drug Task Force is comprised of the Clovis Police Department, the Portales Police Department, Curry County Sheriff’s Office and the Roosevelt County Sheriff’s Office. Assistant U.SAttorney Nicholas Jon Ganjei is prosecuting the case.
Kutztown Steel Company and Owners Charged with ConspiracyRead the Press Release
PHILADELPHIA - Dennis Weber, 66, Dale Weber, 51, and Carl M. Weber Steel Service, Inc. (Weber Steel), all of Kutztown, PA, were charged today by Information with one count of conspiracy to commit wire fraud, announced United States Attorney Zane David Memeger. Dennis Weber, President of Weber Steel, and Dale Weber, Vice President, engaged in a scheme to defraud the United States Department of Transportation through the Disadvantaged Business Enterprise program (DBE). Weber Steel, a bridge and highway construction contractor located in Kutztown, PA was not a certified DBE, but set up and utilized a sham DBE called Karen Construction Co., Inc. (Karen Construction) to obtain DBE subcontracts for bridge and highway construction. From approximately April 1995 through November 2011, Karen Construction, posing as a DBE, obtained an estimated $18.7 million from approximately 224 federally funded projects, when, in reality, it was controlled by Weber Steel, a non-DBE.
If convicted, defendants Dennis and Dale Weber each face a maximum sentence of five years in prison, two years of supervised release, a fine of up to $250,000, and a $100 special assessment. Defendant Weber Steel faces a maximum sentence of five years of probation, a fine of up to $500,000, and a $100 special assessment.
The case was investigated by the United States Department of Transportation Office of Inspector General, the Federal Bureau of Investigation, and the Department of Labor Office of Inspector General/Office of Labor Racketeering and Fraud Investigations. It is being prosecuted by Assistant United States Attorney Mary Kay Costello.
Justice Department Wins Lawsuit Against Texas Employer That Discriminated Against U.S. CitizenRead the Press Release
The Justice Department announced today that it won a lawsuit against Estopy Farms regarding allegations that the company discriminated against a U.S. citizen by preferring to hire foreign workers. The case was decided by the Office of the Chief Administrative Hearing Officer, the administrative court authorized to hear discrimination cases under the Immigration and Nationality Act (INA).
The court found that Estopy Farms, a farm that harvests crops in Texas, violated the INA when it refused to hire a qualified U.S. worker to operate agricultural equipment because the company preferred to hire foreign workers under the H-2 visa program. The case now moves to the remedial phase for the court to determine what Estopy Farms must do to remedy the violation, which includes the possibility of paying civil penalties.
“Companies cannot manipulate visa programs to discriminate against U.S. workers because of their citizenship,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “This ruling sends a strong message to all employers that discrimination against U.S. workers will not be tolerated.”
The case was litigated by the Justice Department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), which is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits employers from discriminating because of citizenship or national origin in hiring, firing, or recruitment or referral for a fee. The statute also prohibits employers from placing additional documentary burdens on work-authorized applicants or employees during the employment eligibility verification process because of their citizenship status or national origin.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to discrimination based on their citizenship, immigration status or national origin in hiring, firing, or recruitment or referral for a fee, or different documentary requirements based on their citizenship, immigration status or national origin, should contact OSC’s worker hotline for assistance.
Jury Convicts Waltham Man of Insider Trading of Stock in American Superconductor CorporationRead the Press Release
BOSTON – A Waltham man was convicted today of conspiracy and insider trading in connection with tipping friends and fellow golfers with inside information about the business activities of American Superconductor Corporation (AMSC).
Eric McPhail, 41, was convicted following a seven-day jury trial and one and one half hours of jury deliberations of conspiring to commit securities fraud and securities fraud. McPhail had been indicted in July 2014. U.S. District Court Judge Denise J. Casper scheduled sentencing for Sept. 17, 2015.
According the evidence presented at trial, starting around July 2009, McPhail, who is a competitive amateur golfer, began giving his friends inside information about AMSC’s business activities and upcoming earnings announcements. McPhail obtained this information during golf games at the Oakley Country Club in Watertown and other social outings with a close friend who was a senior executive at AMSC. The executive, however, trusted McPhail to keep the information to himself and was unaware that McPhail was using it to tip his friends.
Over a two-year period spanning July 2009 to April 2011, several of McPhail’s friends repeatedly traded on the inside information. According to evidence presented at trial, McPhail ’s tippees successfully traded on material, nonpublic information about AMSC on at least five occasions, making a total of over $500,000 in illicit gains. One of McPhail’s tippees, Douglas Parigian, who is also a competitive amateur golfer, previously pleaded guilty to securities fraud charges on May 12, 2015.
The securities fraud charge provides a maximum sentence of 20 years in prison, three years of supervised release and a $5 million fine. The conspiracy charge provides for a maximum sentence of five years in prison, three years of supervised release and a $250,000 fine. 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; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Paul Levenson, Regional Director of the Securities and Exchange Commission (SEC), Boston Regional Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Andrew E. Lelling and Seth B. Kosto of Ortiz’s Economic Crimes Unit.
Jefferson County, Kentucky, Man Sentenced to 51 Months in Prison for Transporting Adult Females with the Intent That They Engage in ProstitutionRead the Press Release
Most were psychologically abused and physically assaulted
LOUISVILLE, Ky. - A Jefferson County, Kentucky, man was sentenced today in U.S. District Court by Senior Judge Thomas B. Russell to 51 months in prison for transporting adult females, with the intent that they engage in prostitution, announced Acting U.S. Attorney John E. Kuhn, Jr.
Dwayne Watkins, age 37, transported at least six females from Kentucky to other states to engage in prostitution between 2007 to August 2014. Five of the six females were often psychologically abused and physically assaulted as a means to coerce them. Watkins used various internet websites such Craigslist, Eros, and Backpage to advertise prostitutes working for his prostitution business and facilitate communication with potential clients.
Watkins transported the females, (at least one of the victims was homeless), from Kentucky to Indiana, North Carolina, Illinois, Georgia, Florida, Virginia and Ohio, to engage in prostitution.
Further, Watkins told one of the victims that he would be her modeling “Agent”. However, at the direction of Watkins, the female victim became a working prostitute and was forced to give Watkins every dollar made from prostitution.
This case was prosecuted by Assistant United States Attorney Joshua Judd and was investigated by the Federal Bureau of Investigation, Louisville Metro Police Department, and Jefferson County Sherriff’s Office.
Inland Empire Siblings Plead Guilty to Stealing of Hundreds of Identities from Escrow Company and Fraudulently Obtaining CreditRead the Press Release
RIVERSIDE, California – A brother and sister from the Inland Empire have pleaded guilty to federal charges of conspiring to steal identities of hundreds of would-be homeowners from North American Title Company and using those stolen identities to obtain credit cards from major national retailers.
Charlie Rickie Jackson III, 43, of Corona, and Bridgette Lenet Jackson, 45, of Riverside, both pleaded guilty yesterday to conspiracy to commit access device fraud. Charlie Jackson also pled guilty to possession of 15 or more unauthorized access devices (credit cards).
In late 2013, Bridgette Jackson was a temporary employee at North American Title Company’s office in Temecula, where she was responsible for processing escrow documents and copying loan documents. Simply put, Bridgette Jackson allowed Charlie Jackson to come and take documents from the office when no other employees were around. According to court documents, the Jacksons stole personal identifying information belonging to well over 250 would-be homebuyers that was found in the North American Title Company documents.
Using the would-be homeowners’ personal identification information – including social security numbers, dates of birth, and bank account numbers – Charlie Jackson opened credit card accounts from major national retailers, and he used the unauthorized access devices to purchase goods online. Jackson then pawned the purchased items in exchange for cash, netting him tens of thousands of dollars.
During the course of the investigation, Charlie Jackson twice was caught in possession of hundreds of stolen identities, according to his plea agreement. The first time, in February 2014, he had hundreds of title documents from North American Title Company, sensitive medical documents containing personal identifying information, and credit cards he opened in the names of victims. In July 2014 he was caught with scanned copies of the stolen North American Title Company documents as well as a spiral notebook with personal identification information of other victims.
North American Title Company provides real estate settlement services and is a subsidiary of Lennar Homes, a national home builder. Lennar Homes has sustained thousands of dollars in losses due to the payout claims for victim homebuyers who experienced identity theft due to the breach of the secure documents.
The Jacksons pleaded guilty yesterday before United States District Judge Jesus G. Bernal, who is scheduled to sentence both defendants on August 31.
As a result of their guilty pleas, Charlie Jackson faces a statutory maximum sentence of 15 years in federal prison and Bridgette Jackson faces a statutory maximum sentence of 5 years in federal prison
“Mr. Jackson’s activity paints a disturbing picture in which confidential information was compromised for personal greed at the expense of the public,” said Robert Wemyss, Postal Inspector in Charge of the Los Angeles Division.
This investigation in this case was conducted by the United States Postal Inspection Service.
Release No. 15-061
IAP Worldwide Services Inc. Resolves Foreign Corrupt Practices Act InvestigationRead the Press Release
Former Company Vice President Pleads Guilty to Participating in Bribery Scheme
A Florida defense and government contracting company, IAP Worldwide Services Inc. (IAP), entered into a non-prosecution agreement and agreed to pay a $7.1 million penalty to resolve the government’s investigation into whether the company conspired to bribe Kuwaiti officials in order to secure a government contract. A former vice president of IAP also pleaded guilty today to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) for his involvement in the bribery scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington, D.C., Field Office and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office made the announcement.
James Michael Rama, 69, of Lynchburg, Virginia, pleaded guilty before U.S. District Court Judge James C. Cacheris of the Eastern District of Virginia to one count of conspiracy to violate the anti-bribery provisions of the FCPA. Sentencing is scheduled for Sept. 11, 2015.
In 2004, Kuwait’s Ministry of the Interior (MOI) initiated the Kuwait Security Program (KSP), a project that was intended to provide nationwide surveillance capabilities for several Kuwaiti government agencies primarily through the use of closed-circuit television. The project was divided into two phases: a planning and feasibility period called “Phase I” and an installation period called “Phase II.” The MOI was responsible for overseeing the KSP, including selecting contractors to facilitate its implementation. Revenues from the Phase II contract were expected to be substantially greater than from Phase I.
According to admissions made in connection with both the non-prosecution agreement and Rama’s plea agreement, IAP and Rama schemed to ensure that IAP worked as the consultant for Phase I so that it could tailor the requirements for the Phase II contracts to IAP’s strengths, which would give the company an advantage in the Phase II bidding. To that end, both IAP and Rama admitted that in February 2006, executives and senior employees of IAP, including Rama, set up a shell company called “Ramaco” to bid on Phase I, in part to conceal IAP’s role in crafting the Phase II requirements and its conflict of interest in connection with securing the Phase II contract.
Ultimately, Ramaco secured the Phase I contract for approximately $4 million. According to admissions made in connection with both agreements, the Rama and IAP agreed that half of that amount would be diverted to a consultant who would pay bribes to Kuwaiti government officials to assist IAP in obtaining and retaining the Phase I contract and to obtain the Phase II contract. IAP and Rama admitted that they disguised the payments by transferring funds Ramaco received to an IAP bank account and then to the consultant through a series of accounts and intermediaries. According to the factual statements incorporated into both the non-prosecution agreement and Rama’s plea agreement, between September 2006 and March 2008, IAP and its co-conspirators paid the consultant approximately $1,783,688 understanding that some or all of the funds would be used to bribe Kuwaiti government officials.
Based on a variety of factors, including but not limited to IAP’s cooperation, the Criminal Division entered into a non-prosecution agreement with the company. The non-prosecution agreement requires IAP’s continued cooperation. In addition, the non-prosecution agreement requires IAP to conduct a review of its existing internal controls, policies and procedures, and make any necessary modifications to ensure that the company maintains accurate record keeping and a rigorous anti-corruption compliance program. The non-prosecution agreement further requires IAP to report periodically to the Criminal Division and to the U.S. Attorney’s Office of the Eastern District of Virginia regarding remediation and implementation of the aforementioned compliance program and internal controls, policies and procedures.
The investigation is being conducted by the FBI’s Washington, D.C., Field Office and the DCIS Mid-Atlantic Field Office. The case is being prosecuted by Assistant Chief Tarek Helou and Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Paul J. Nathanson of the Eastern District of Virginia. The United Kingdom’s Serious Fraud Office and the Criminal Division’s Office of International Affairs also provided assistance during the investigation.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
IAP NPA
Rama Plea Agreement
Huntington man sentenced for federal heroin crimeRead the Press Release
Huntington, W.Va. – United States Attorney Booth Goodwin announced today that Steven Dale McCallister, age 41, of Huntington, West Virginia was sentenced yesterday in federal court in Huntington to 44 months in federal prison. McCallister previously pled guilty in March of 2015, admitting that in November of 2014 he possessed heroin that he had intended to sell from his Barboursville residence. The heroin was discovered when agents of the Huntington Violent Crime Drug Task Force executed a search warrant at McCallister’s home.
At the time McCallister was found with the heroin, he was on supervised release for a federal gun charge. McCallister, who admitted to the court that his possession of heroin violated the terms of his supervised release, was sentenced to an additional period of incarceration of 24 months to be served after the 44 months sentence on the heroin charge.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of heroin and prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal heroin and pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Hudson woman sentenced to two years in prison for firearms convictionRead the Press Release
A Hudson woman was sentenced to two years in prison for making false statements related to the purchase of three firearms, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Marcia M. Masters, 47, was convicted earlier this year following a trial before U.S. District Judge Benita Pearson.
Masters acted as a straw purchaser of a firearm from Semi-Arms Inc. in Broadview Heights, Ohio. She did this by lying on the Bureau of Alcohol, Tobacco, Firearms, and Explosives Form, falsely stating that she was the actual buyer and recipient of a Smith and Wesson Model 317 .22mm revolver, a Colt Model AR15 .223mm rifle and another Colt Model AR15 .223mm rifle.
She was employed as a police officer at the time of the purchases.
Assistant United States Attorneys Marisa Darden and Matthew Kall are prosecuting the case following an investigation by the ATF.
Heroin Dealer Gets 10 Years in Federal PrisonRead the Press Release
PITTSBURGH - A Pittsburgh resident was sentenced in federal court to 10 years of incarceration on his conviction of federal heroin trafficking charges, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Omar Rashad Smith, 26.
According to information presented to the court, on June 21, 2012, Smith was apprehended by federal agents and Pittsburgh narcotics detectives fleeing a house where heroin was being actively packaged into individual dosage units commonly called “stamp bags.” The items located in the residence included various tools commonly used in heroin packaging, such as a scale, masks, a food processor and enough heroin to make well over 3,000 stamp bags-- worth nearly $30,000 on the street. Police also located a stolen firearm within an arm’s length of the table where the heroin was being processed.
Prior to imposing sentence, Judge Hornak considered the sentences imposed as a result of the defendant’s three previous convictions for felony drug offenses in Allegheny County and stated that the 10-year sentence was sufficient but not greater than necessary to deter others from heroin dealing. Judge Hornak also imposed 7 years of supervision by the United States Probation Office after Smith’s release, in order to help protect the public from further crimes of the defendant.
Assistant United States Attorney Ross E. Lenhardt prosecuted this case on behalf of the government and ensured that the drug money seized by police was forfeited. By forfeiting drug money, drug dealers ease the burden on taxpayers and actually help to investigate and prosecute future drug dealers.
U.S. Attorney Hickton commended the Drug Enforcement Administration (DEA), the Pittsburgh Bureau of Police, and the Allegheny County Probation Office for the investigation leading to the successful prosecution of Smith.
Hayden Man Pleads Guilty to Distributing Grenade FusesRead the Press Release
BIRMINGHAM -- A Hayden man pleaded guilty today in Federal Court to charges of Distribution of Grenade Fuses to an Unlicensed Person, announced U.S. Attorney Joyce White Vance and Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge David Hyche.
U.S. District Judge Madeline M. Haikala took the guilty plea from Matthew Joseph Smith, 56, on charges stemming from an October 22, 2014, incident where approximately 1,340 M228 grenade fuses were distributed by Smith to another individual who did not have a license to possess the fuses. The sentencing in the case is set for September 15, 2015.
“This conviction sends a message to those who deal in explosive materials without proper authority in the Northern District of Alabama. Individuals who hold a license to possess explosive materials owe a duty to act within the boundaries of the law at all times. When those boundaries are exceeded, we will actively pursue prosecution to ensure the safety of the public,” said U.S. Attorney Joyce White Vance.
“ATF remains committed to utilizing its dual criminal/regulatory role to identify, disrupt and prosecute those who criminally use explosives that put our communities at risk,” said Steven L. Gerido, ATF Special Agent in Charge.
ATF investigated the case. Assistant United States Attorney Brad Felton is prosecuting the case.
Hancock County man convicted of heroin traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Raymond James Ripley, Sr., 28, of Newell, West Virginia, was convicted today of heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Ripley conspired with others to possess and sell heroin in Hancock County, West Virginia throughout 2013 and 2014. He pled guilty today to one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Heroin,” following an investigation by the Hancock, Brooke, Weirton Drug and Violent Crime Task Force, a HIDTA-funded initiative. He faces up to 20 years in prison and a fine of up to $1,000,000.
In another matter, Cornelius Johnson, Jr., 38, of Wheeling, West Virginia, was convicted today of cocaine trafficking. An investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that Johnson engaged in cocaine trafficking in Ohio County, West Virginia throughout 2014.
Johnson pled guilty today to:
• Four counts of “Use of a Telephone to Facilitate the Distribution of Cocaine Base.” He faces up to four years in prison and a fine of up to $250,000 on each count, • Four counts of “Distribution of Cocaine Base within 1,000 Feet of a Protected Location.” He faces between one and forty years in prison and a fine of up to $2,000,000 on each count, • One count of “Maintaining a Drug Involved Premises,” for which he faces up to 20 years in prison and a fine of up to $1,000,000, and
• One count of “Felon in Possession of a Firearm,” for which he faces up to 10 years in prison and a fine of up to $250,000.Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen Vogrin prosecuted the cases on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp presided.
Franklin County Man Indicted on Heroin and Heroin Death Related ChargesRead the Press Release
Erik Scott Brown, 26, of West Frankfort, IL, was indicted on June 2, 2015, on heroin related charges in a two count Indictment returned by a Federal Grand Jury sitting in Benton, Illinois, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Count 1 charges that on or about December 2, 2014, in Franklin County, Brown knowingly and intentionally distributed heroin, a Schedule I Controlled Substance, to Steven Keith Scott, and that Scott died as a result of the use of the heroin which Brown had distributed. Count 2 charges that on December 3, 2014, in Franklin County, Illinois, Brown knowingly and intentionally possessed with intent to distribute heroin.
With respect to Count 1, Brown faces a minimum of 20 years, to life in federal prison, up to $1,000,000 fine, and supervised release of not less than 3 years.
With respect to Count 2, Brown faces up to 20 years in prison, up to $1,000,000 fine, and supervised release of not less than 3 years.
An Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation in this case was conducted by the Illinois State Police, the West City Police Department, the Benton Police Department, the West Frankfort Police Department, and the Franklin County Sheriff’s Office. The Franklin County State’s Attorney’s Office assisted in the investigation of this case.
The case is being handled by Assistant United States Attorney George Norwood.
Fort Hall Man Sentenced for Tribal TheftRead the Press Release
POCATELLO - Demetrius Anthony Gomez, 28, of Fort Hall, Idaho, was sentenced today to time served—eight months in prison, including 90 days tribal jail time—for theft from a tribal organization, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Gomez to pay $1,984.00 in restitution, and to serve three years of supervised release. Gomez pleaded guilty on February 25, 2015.
On April 2, 2014, Gomez, an off-duty employee of the Sage Hill Travel Center, a gas station, convenience store and casino on the Fort Hall Indian Reservation, near Exit 89 from Interstate 15, entered the travel center at about 3:50 am. The defendant told his fellow employee at the front desk that he was checking the schedule. The defendant went to the rear office and a few minutes later walked out and exited the store. The fellow employee became suspicious of the defendant and checked the back room. He reviewed the surveillance recording of the room and saw that the defendant had removed money from the safe in the room. A review of the surveillance recording in the front part of the store later showed that the defendant re-entered the store while the fellow employee was checking the back office. The defendant then removed additional money from a box under the cash register. An audit showed $1,984.00 missing from the Sage Hill Travel Center.
The case was investigated by the Fort Hall Police Department.
Former and Current Postal Employees Indicted on Conspiracy ChargesRead the Press Release
St Louis, MO – Four former and current Postal employees of the Network Distribution Center in Hazelwood, and an associate, were indicted on charges of diverting mail believed to contain marijuana and other items to addresses that they controlled, for their personal gain.
EDWARD LEWIS, Hazelwood, MO; SEAN WEST, Florissant, MO; QUENTIN COOK, Florissant, MO; CHE'YRON ROBINSON, St. Charles, MO; and KOREY HOWARD, Florissant, MO; were indicted by a federal grand jury on June 10 on multiple charges including conspiracy, obstruction of correspondence and theft or receipt of stolen mail. They are expected to appear in federal court this week.
According to the indictment, Lewis, West and Howard are former employees; Cook is a current employee; and Robinson is West’s girlfriend. West and Howard searched for and identified mail, and over-labeled it to redirect it from its original sender’s intended recipient to themselves, Cook, Lewis, Robinson and others. The diverted mail included clothing, marijuana, electronics, computer equipment, pottery and personal effects.
If convicted, each charge carries a maximum penalty of five years in prison, a $250,000 fine or both. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the U.S. Postal Service-Office of Inspector General and the Postal Inspection Service. Assistant United States Attorney Anthony Franks is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Former Utica Resident Sentenced to 12 Years in Prison for IRS Tax Refund ScamRead the Press Release
SYRACUSE, NEW YORK – On June 15, 2015, ANAS K. WILSON, 33, a former resident of Utica, New York, was sentenced to 12 years in prison by the Honorable Frederick J. Scullin, Jr., announces United States Attorney Richard S. Hartunian, Shantelle P. Kitchen, Special Agent in Charge of the New York Field Office of IRS-Criminal Investigation, Craig W. Rupert, Special Agent in Charge, Defense Criminal Investigative Service ("DCIS") Northeast Field Office, and Robert E. O’Malley, Special Agent in Charge of the New York Field Office of the Treasury Inspector General for Tax Administration ("TIGTA"). Judge Scullin also imposed a forfeiture money judgment on Mr. Wilson of $414,000. As part of his sentence, Wilson will serve a three-year term of supervised release after completing his prison term.
Wilson pled guilty in November 2014 to theft of government property and aggravated identity theft for his role in a fraudulent tax return scheme. Wilson’s crimes involved electronically filing hundreds of fraudulent U.S. Individual Income Tax Returns on behalf of victims who were not entitled to tax refunds and then directing the tax refunds received to bank accounts he had established in the names of third parties. The investigation revealed that Wilson posed as an IRS employee at times in order to obtain the personal identifying information (including Social Security numbers and names) of the victims. After refunds were issued for the fraudulent tax returns, Wilson paid others to withdraw the funds from various banks and provide him the money. Wilson was ultimately responsible for submitting fraudulent tax returns to the IRS that resulted in the release of at least $414,000 in false tax refunds by the IRS.
United States Attorney Richard S. Hartunian stated, "The significant sentence imposed by the court today should serve as a clear warning that those who engage in illegal schemes to enrich themselves unjustly will pay a heavy price when they are caught. I commend all those agencies responsible for bringing this defendant to justice." Special Agent in Charge Craig W. Rupert, on behalf of DCIS, stated, "Today’s sentencing illustrates the seriousness of identity theft schemes. In this case, the defendant’s acts served to undermine well-intentioned government programs and defrauded the American taxpayer. Thwarting these efforts is a major concern for DCIS, and I applaud the agents and prosecutors who worked tirelessly to bring about this result." Special Agent in Charge Shantelle P. Kitchen stated the following on behalf of IRS-Criminal Investigation: "This sentence sends a strong message about the government’s resolve to investigate and prosecute tax refund fraud involving stolen identities. These cases remain a top priority for IRS-Criminal Investigation, and we will continue to work with the United States Attorney’s Office and our partner law enforcement agencies to stop such abuses of our nation’s tax system." Special Agent in Charge Robert O’Malley, on behalf of TIGTA, stated, "Identity theft is an extremely serious crime, particularly when it involves the impersonation of an employee of the Internal Revenue Service. We will aggressively investigate all crimes that involve efforts to impersonate IRS employees."
This case was investigated by the IRS Criminal Investigation Division, DCIS, and TIGTA, and it was prosecuted by Assistant United States Attorney Michael F. Perry.
For additional information, contact Executive Assistant U.S. Attorney John G. Duncan at 315-448-0672.
Former Postal Employee Sentenced for Theft of Money OrdersRead the Press Release
SYRACUSE, NEW YORK – On June 15, 2015, PENNY I. AUERBACH (47), former Postmaster Relief at the Westford Post Office in Otsego County, New York, was sentenced in United States District Court after pleading guilty to one count of stealing money orders and cash from the United States Postal Service and one count of misappropriating postal funds, announced United States Attorney Richard S. Hartunian and Eileen Neff, Special Agent in Charge, Office of Inspector General of the U.S. Postal Service, Northeast Area Field Office.
United States Magistrate Judge David E. Peebles sentenced AUERBACH to four years of probation and 50 hours of community service. Additionally, the judge ordered AUERBACH to pay $4,677.83 in restitution to the Postal Service and imposed a forfeiture money judgment in that amount as well.
At sentencing, AUERBACH admitted to "kiting" money orders from the Westford Post Office by taking money from her cash drawer that had been provided by customers to purchase money orders and using that cash during the period of time between the sale of the money orders and the dates on which the Postal Service was expensed for these money orders after their negotiation. In other words, rather than depositing in her drawer the cash provided by customers to purchase money orders, AUERBACH would take the cash to cover her own financial obligations (including, but not necessarily limited to, paying for previous money orders she had taken). The Postal Service was thus expensed, but never reimbursed, a total of $4,677.83 for money orders checked out exclusively to AUERBACH.
These charges stemmed from an investigation by the Office of Inspector General of the U.S. Postal Service. This case was prosecuted by Assistant United States Attorney Michael F. Perry.
For additional information, contact Executive Assistant U.S. Attorney John G. Duncan at 315- 448-0672.
Former Hanover Post Office Employee Convicted of Mail TheftRead the Press Release
BOSTON – A former Hanover postal employee pleaded guilty to mail theft charges today in U.S. District Court in Boston.
Amber Lopresti, 28, who resides inTaunton, pleaded guilty to embezzling the U.S. mail and stealing the contents of the U.S. mail while she was an employee of the United States Postal Service in Hanover. U.S. District Court Judge George A. O’Toole, Jr., scheduled sentencing for Sept. 24, 2015.
On Oct. 8, 2014, while working as a Post Office employee, Lopresti was observed on camera rifling through the mail, removing unopened letters and greeting cards, and placing them in her waistband. When her shift was over, she left the post office and removed the letters from her waistband once she was in her vehicle. She was stopped by police a short time later and the unopened letters and money were observed on her lap. Lopresti admitted to law enforcement officers that she took money from one of the stolen letters. She further admitted that in June 2014 she began stealing letters and contents from the letters from the Hanover Post Office, and had taken approximately $2,000 in cash, cards and scratch tickets.
The charging statutes provide 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 on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Eileen Neef, Special Agent In Charge of the U.S. Postal Service, Office of Inspector General, Northeast Area Field Office; and Hanover Police Chief Walter Sweeney, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Former D.C. Government Official Sentenced for Fraud Involving $110,000 Grant That Funded a 2009 Inaugural BallRead the Press Release
WASHINGTON – Neil S. Rodgers, a former District of Columbia government official, was sentenced today to a period of incarceration and ordered to pay full restitution on a charge stemming from his role in channeling $110,000 in youth and drug prevention grant funds that were used to pay for an inaugural ball.
The sentencing was announced by Acting U.S. Attorney Vincent H. Cohen, Jr., Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, and Thomas Jankowski, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation.
Rodgers was found guilty in March 2015, by a jury in the U.S. District Court for the District of Columbia, of first-degree fraud. The Honorable Senior Judge John D. Bates sentenced Rodgers to 36 days of incarceration, to be served over 12 weekends. He also ordered him to pay $110,000 in restitution. Rodgers also will be placed on two years of probation.
Rodgers, 62, of Washington, D.C., served as the Committee Director of the Council of the District of Columbia’s Committee on Libraries, Parks, Recreation and Planning. Before becoming Committee Director, Rodgers worked for many years at the District of Columbia Department of Parks and Recreation, serving as Chief of Staff and Acting Director.
Six others have pled guilty to charges in the overall investigation, which focused on activities involving former Council Member Harry L. Thomas, Jr. Thomas pled guilty in January 2012 to charges stemming from a scheme in which he used more than $350,000 in taxpayers’ money that was earmarked for the arts, youth recreation, and summer programs for his own personal benefit, including paying for vehicles, clothing, and trips. He resigned in January 2012 as a condition of his plea agreement and later served a 38-month prison sentence.
According to the government’s evidence, Rodgers aided Thomas in illegally securing funds for the 51st State Inaugural Ball, held on Jan. 20, 2009, at the Wilson Building.
“Neil Rodgers worked with former D.C. Council member Harry Thomas to perpetrate a fraud that diverted money from at-risk children to throw a black-tie ball for adults,” said Acting U.S. Attorney Cohen. “His conviction at trial brings to seven the number of people convicted as part of Harry Thomas’s chronic abuse of the public trust. Neil Rodgers refused to acknowledge that there was anything wrong in the cavalier way that he and Harry Thomas stole from a program for children. He now will be required to pay back every penny he stole from the children of the District. Those children, who were most harmed by this, deserve better from our public officials.”
“Today, Mr. Rodgers accepted his penalty for illegally steering money meant to fund District of Columbia government programs to pay for a Presidential inauguration party,” said Assistant Director in Charge McCabe. “The FBI and our partners at the IRS have worked countless hours to investigate the trail of money that was intended to help youth in the District and how the corrupt actions of a public servant resulted in a loss to the community he served.”
Thomas directed one of his staffers to plan the ball to celebrate the inauguration of President Obama. The 51st State Inaugural Ball was sponsored by Thomas, other council members and a local chapter of a political organization which was run by Thomas’s staffer who planned the ball. Ticket sales and other contributions failed to raise enough money to pay the expenses associated with the ball. Following the ball, the vendors who provided services for the ball were owed approximately $100,000.
Thomas asked Rodgers to help find funding for the money owed to the vendors. Thomas and Rodgers participated in a scheme to take money that was originally donated by D.C. taxpayers to the Children at Risk and Drug Prevention Fund to pay for the inaugural ball.
After the ball was over, Thomas and Rodgers contacted the president of a public-private partnership that provided grants to children and youth of the district. Thomas and Rodgers falsely stated that the ball had been a youth event. The private-public partnership organization agreed to provide funding for the ball based on these representations. It also agreed to use the Children at Risk and Drug Prevention Fund money to pay for the ball.
The Children at Risk and Drug Prevention Fund consisted of money that had accumulated at the D.C. Department of Parks and Recreation after years of tax donations by D.C. taxpayers. In 2008, the D.C. Council passed legislation that gave responsibility for distributing the money to the community to the public-private partnership organization. At the time of the ball, the money had not yet transferred to the public-private partnership. Rodgers used his influence to finalize the transfer of the money so that it could be used to pay for the inaugural ball.
Rodgers then submitted false paperwork to the public-private partnership that described the inaugural ball as a youth event. Rodgers provided multiple copies of budgets and supporting narratives that misled the public-private partnership and resulted in the issuance of the Children at Risk and Drug Prevention Fund money to pay for the inaugural ball.
In announcing the sentence, Acting U.S. Attorney Cohen, Assistant Director in Charge McCabe, and Special Agent in Charge Jankowski commended the work of those who investigated the case from the FBI’s Washington Field Office and IRS-CI. They also acknowledged the work of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Tasha Harris, Heather Sales, Jessica Mundi, and Ida Anbarian; Litigation Technology Specialists Joshua Ellen and Ron Royal; and former Assistant U.S. Attorneys Jonathan Haray, Bridget Fitzpatrick, James Smith, and David Johnson. Finally, they expressed appreciation for the work of Assistant U.S. Attorneys Matthew Graves and Michelle Zamarin, who prosecuted the case.
Former Corrections Officer Sentenced to Prison for Conspiring to Distribute Narcotics in Doña Ana County Detention CenterRead the Press Release
ALBUQUERQUE – A former corrections officer was sentenced this morning in federal court in Las Cruces, N.M., for conspiring to distribute heroin, methamphetamine and cocaine within the Doña Ana County Detention Center (DACDC). Francisco Balderrama, 27, of El Paso, Texas, was sentenced to a year and a day in federal prison followed by three years of supervised release.
Balderrama was arrested on Oct. 6, 2014, on a criminal complaint charging him with conspiracy to distribute narcotics and providing contraband in a prison facility. The criminal complaint alleged that Balderrama conspired with co-defendants Virginia Aguirre, 54, and Delilah Morales, 23, both of Deming, N.M., and Brittany Huerta, 25, of Las Cruces to smuggle drugs and other contraband into the DACDC in June 2013. An investigation by DACDC officers revealed that Balderrama was conspiring with Aguirre, Morales and Huerta to smuggle drugs and drug paraphernalia into the DACDC for two federal inmates who were being held at the Detention Center. Balderrama, Aguirre, Huerta and Morales subsequently were indicted on Jan. 14, 2015, and charged with conspiracy to distribute heroin, methamphetamine and cocaine.
Balderrama pled guilty to the indictment on March 31, 2015, and admitted that from June 3, 2013 through June 16, 2013, two inmates arranged for him to meet with Aguirre and Morales for the purpose of receiving a package containing drugs and other contraband together with a smuggling fee of $300.00 that was provided by Huerta. Balderrama also admitted that on June 16, 2013, Morales delivered the package of drugs and drug paraphernalia to him, and that he delivered the drugs and contraband to two inmates who were being held at the DACDC.
Aguirre, Huerta and Morales also entered guilty pleas in March 2015. Each admitted that from June 3, 2013 through June 16, 2013, they conspired with each other to provide a package containing heroin, cocaine, methamphetamine and other contraband to Balderrama on the evening of June 16, 2013, with the understanding that he would smuggle the package into the DACDC in exchange for a $300.00 fee.
Huerta was sentenced on June 9, 2015 to time served and a year of supervised release. Morales is scheduled for sentencing on June 23, 2015; Aguirre’s sentencing hearing has yet to be scheduled. At sentencing, Morales and Aguirre each face a statutory maximum penalty of 20 years in prison followed by not less than three years of supervised release.
This case was investigated by the Las Cruces office of the U.S. Marshals Service, the Doña Ana County Detention Center and the New Mexico State Police. Assistant U.S. Attorney Edwin Garreth Winstead, III, is prosecuting the case.
Former City Employee Indicted for Submitting False Wastewater ReportsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former wastewater treatment plant operator for the city of Granby, Mo., was indicted by a federal grand jury today for submitting false reports in violation of the Clean Water Act.
Charles Loren Ranslow, 48, of Neosho, Mo., was charged in a three-count indictment returned by a federal grand jury in Springfield, Mo. Ranslow was the wastewater treatment plant operator for the city of Granby.
Today’s indictment alleges that Ranslow submitted false information in state reports that are required under the Clean Water Act.
According to the indictment, Ranslow conducted wastewater sampling at the facility and submitted Wastewater Discharge Monitoring Reports to the Missouri Department of Natural Resources from June 2013 through March 2014. The indictment charges Ranslow with two counts of making false and fraudulent statements in those reports. Ranslow allegedly submitted monitoring reports that contained false data, for example, with regard to the levels of ammonia.
The indictment also charges Ranslow with one count of making false and fraudulent statements in a Domestic Sludge Report that was submitted to the Missouri Department of Natural Resources. Ranslow allegedly represented sludge monitoring results to be indicative of the Granby Wastewater Treatment Facility sludge, which data he knew to be false.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the Environmental Protection Agency, Criminal Investigation Division and the Missouri Department of Natural Resources.
Former Carson Helicopter Vice President Sentenced to Federal PrisonRead the Press Release
MEDFORD, Ore. - Steven Metheny, 45, Medford, Oregon was sentenced Tuesday to 12.5 years in federal prison by U.S. Chief District Court Judge Ann Aiken after his convictions for conspiracy to commit mail and wire fraud and the making of false statements in defrauding the United States Forest Service in procuring helicopter firefighting contracts in 2008.
Levi Phillips, 48, Grants Pass, Oregon, was also sentenced today for his role in the conspiracy. Phillips pled guilty on September 23, 2013, to the crime of conspiracy to commit mail and wire fraud. Judge Aiken sentenced him to serve 25 months in federal prison. Both defendants were ordered to surrender to Bureau of Prisons on August 17, 2015, and upon release from prison, both will serve a three year term of supervised release.
In 2008, Metheny, as Vice President of Carson Helicopters in Grants Pass, Oregon, and aided by co-conspirator Phillips, the Director of Maintenance for Carson, submitted contract bid proposals on behalf of Carson to the Forest Service with falsified helicopter weight and balance charts and falsely altered Federal Aviation Administration (FAA) helicopter performance charts. These charts were then used by the Forest Service in determining whether Carson’s helicopters met minimum contract payload specifications and, as a result, awarded contracts to Carson that it would not have received otherwise. The contract awards amounted to over $51 million dollars. Carson received nearly $19 million dollars before the Forest Service discovered the fraud and cancelled Carson’s contracts following the crash of Carson helicopter N612AZ in California.
According to documents filed with the court, Assistant U.S. Attorney Byron Chatfield said Metheny schemed with Phillips to create a formula that allowed them to enter a desired weight and center of gravity to generate the necessary scale readings needed to deceive the Forest Service into believing that two of Carson’s helicopters had actually been weighed as required by the contract. Metheny then used the formula to create false weights for other helicopters including the crash helicopter. Metheny also created a falsified FAA helicopter performance chart used in conjunction with the false helicopter weights in order to meet the minimum contract payload specifications for much more lucrative contracts. The Forest Service had previously warned Metheny about not using the actual performance chart it was created from, prohibiting its use for bidding purposes or field operations because it was intended for emergency operations only and its use compromised safety and gave Carson an unfair competitive advantage over other helicopter operators.
Metheny distributed the falsified helicopter weight and balance charts, as well as other falsified FAA helicopter performance charts to pilots and helicopter flight manuals for use in the field. Unaware of the false nature of the charts, they were then used by pilots and the Forest Service personnel in conducting wildfire flight operations. Their use included calculating the helicopter’s maximum payload capacity during firefighting operations thereby risking the life and safety of the pilots operating the helicopters and those aboard, including firefighters.
On August 5, 2008, N612AZ crashed during takeoff while conducting firefighting operations. The crash resulted in nine fatalities and four were severely injured. The pilots utilized these same falsified charts in the flight manual in determining the payload calculations for the fatal flight. The surviving and permanently injured co-pilot of N612AZ said that pilots trust the integrity of the charts with their life; if the weight of the helicopter is wrong, the final payload will be wrong. If he had known, he would never have used those charts. Other pilots also stressed the importance of using accurate charts as an integral part to the safe operation of a helicopter, especially when carrying passengers. If the Forest Service manager at the crash site had known the truth about the falsified weight documents, the operation would have been immediately shut down and the firefighters would not have been allowed on board the helicopter. National Transportation Safety Board (NTSB) investigators would later discover the accurate weight documents for the crash helicopter and learn that it weighed over 1400 lbs. more than the falsified weight documents used by the pilots. Within days of the crash, Metheny replaced the crash helicopter with another helicopter for the contract by using falsified FAA power performance charts and weight documents for that aircraft.
Court documents further disclose that following the crash of N612AZ, Metheny and Phillips then attempted to conceal the fraud by devising schemes to prevent the Forest Service from discovering the actual weight of each aircraft under contract. Their schemes included having Carson pilots and crew improperly remove equipment and helicopter components without recording their removal. However, some refused and one crew chief explained that he was done lying about the helicopter’s weight. The Forest Service eventually discovered that all of the aircraft were over their bid weight, the weight documents submitted in the contract proposals were fraudulent with underreported weights and the helicopters were using falsified performance charts. All of the contracts were terminated.
Government documents show that Metheny also concealed the fraudulent conduct involving N612AZ from the NTSB during its crash investigation. He and Phillips were Carson representatives on the NTSB investigation. Yet, Metheny knew NTSB investigators were relying on the falsified weight documents used by the crash helicopter and he attempted to convince them of their accuracy. Later, when NTSB discovered that the performance chart used by N612AZ was falsified, the product of a “cut and paste” created at Carson’s Grants Pass office, Metheny attempted to throw suspicion onto a former employee, someone he held animosity toward.
Court documents further reveal that Metheny was continuously stealing from Carson. He used Carson funds to buy jewelry and other personal items for himself and his wife, to renovate their residence and he sold Carson helicopter parts and equipment and diverted the proceeds to his own private aviation company for his personal use. He also stole tail rotor blades from a shipment at Carson’s Grants Pass facility then attempted again to place suspicion on the same person he had animosity toward. Metheny repaid Carson over $73,900 as restitution for the theft of helicopter parts from the company.
In recommending a sentence of 15.5 years, Assistant U.S. Attorney Chatfield argued Metheny was the architect behind the scheme to defraud the Forest Service and gain a significant advantage over his competitors. His fraudulent conduct was the result of pure greed that eventually placed the lives of numerous pilots and firefighters in extreme danger. Metheny demonstrated such an indifference to the danger in which he placed others just to perpetuate the fraud. As a licensed helicopter pilot, he knew the falsified charts put firefighters and pilots at risk of serious injury, even death.
Chatfield said that helicopter firefighting operations certainly have a high level of risk where failure can have catastrophic consequences, such as with the crash of N612AZ. Yet, what is totally unacceptable is the substantial risk Metheny created by his fraudulent conduct, unnecessarily putting the lives of so many pilots and firefighters in harm’s way. Metheny’s conduct has had such an adverse and lasting impact on so many people, both financially and emotionally. To know that those firefighters who lost their lives would not have been even allowed on the crash helicopter if the Forest Service manager or the pilots had known about the falsified weight is absolutely devastating to their families. “This is an incredibly disturbing case that has exposed the senseless greed behind this despicable criminal conduct. There is a price to pay for submitting false information about helicopter payload capabilities in the bid process. The intentional deceit defrauded the Forest Service and created a reckless risk of harm to those who used the information in firefighting operations, including those who were relying on the false information when a Carson helicopter crashed near Weaverville, California on August 5, 2008,” says Acting U.S. Attorney, Billy J. Williams. “The lives of heroic individuals serving in these operations were placed in harm’s way when greedy people enriched their pockets without consideration for their conduct.”
“This investigation demonstrates that ensuring the integrity of the acquisition process and that taxpayer dollars are protected from fraud and abuse, as well as the inherent associated safety risks, is a top priority for the Office of Inspector General (OIG),” said William Swallow, Department of Transportation OIG Special Agent-in-Charge. “Working with our law enforcement and prosecutorial colleagues, we will continue our efforts to promote the prevention, detection, and prosecution of contract fraud and ensuring the public’s safety.”
The U. S. Attorney’s Office has worked with the Offices of Inspector General for both the Department of Agriculture and the Department of Transportation in Portland, Oregon and Seattle, Washington, and the FBI and the IRS in Medford, Oregon in the investigation and prosecution of this case. The case was prosecuted by Assistant U. S. Attorney Byron Chatfield.
Former Bowling Green Physician Charged with Conspiracy to Dispense Controlled Substances, Health Care Fraud and Money LaunderingRead the Press Release
BOWLING GREEN, Ky. – Acting U.S. Attorney John E. Kuhn, Jr. today announced the indictment of former Warren County, Kentucky, physician Charles Fred Gott on charges of conspiracy to distribute and dispense controlled substances during the course of his professional practice that were not for a legitimate medical purpose, health care fraud, and money laundering.
Gott, age 63, a formerly licensed physician in the Commonwealth of Kentucky, was indicted by grand jury in Bowling Green on June 10, 2015. The indictment was unsealed following his arrest this morning in Nashville, Tennessee, and initial appearance on the charges before Magistrate Judge H. Brent Brennenstuhl in Bowling Green.
According to the 14 count indictment, the alleged criminal activity occurred between 2006 and September 19, 2013, in Warren County, Kentucky.
Gott is charged with a single count of conspiring with others to knowingly and intentionally distribute and dispense, not for a legitimate medical purpose in the usual course of professional practice, Schedule II, Schedule III and Schedule IV controlled substances. Included are nine counts of unlawfully dispensing Methadone and Fentanyl – Schedule II controlled substances and one count of unlawfully dispensing Hydrocodone – a Schedule III controlled substance.
Further, during the same time period, Gott is charged with executing a scheme to falsely and fraudulently bill various health care benefit programs, including Medicare and Medicaid, by submitting claims for office visits at a higher code than the service actually provided to patients under his care. Also, Gott is charged with directing staff members to provide medically unnecessary spirometry tests to patients, and to falsely and fraudulently bill various health care benefit programs, including Medicare, Medicaid, and Anthem, among others, by submitting claims for medically unnecessary spirometry tests, for patients. A spirometry test assess lung function in the diagnosis of asthma, chronic obstructive pulmonary disease (COPD) and other conditions that affect breathing.
Gott also is charged with one count of money laundering for transferring $14,000 to a Merrill Lynch investment account, on March 22, 2012, which was allegedly derived from unlawful activity, that is the unlawful drug distribution and health care fraud alleged in Counts 1 and 13.
Gott is further subject to forfeiture to the United States government, any and all proceeds derived from unlawful activity as a result of the offenses alleged in the indictment and the forfeiture of Gott’s license to practice medicine.
If convicted at trial, Gott faces no more than 20 years in prison, per count, for counts 1-10, no more than 10 years in prison, per count, for counts 11-14, no less than 3 years of supervised release, and a $12,000,000 fine. Gott is scheduled for arraignment on June 24, 2015, at 10am in Bowling Green.
This case is being prosecuted by Assistant United States Attorneys Mac Shannon, Lettricea Jefferson-Webb and Joseph Ansari. This case is being investigated by the Drug Enforcement Administration (DEA) Drug Diversion Section, The U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), Warren County Drug Task Force, Kentucky State Police, Office of the Attorney General, Medicaid Fraud and Abuse Division and Federal Bureau of Investigation (FBI).
Former Bartow/Plant City Insurance Agent Charged with FraudRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Heidi Y. Calonge (34) with four counts of bank fraud, three counts of wire fraud, and one count of mail fraud. If convicted, she faces a maximum penalty of 30 years in federal prison on the bank fraud charges, and up to 20 years’ imprisonment on each wire and mail fraud charge. The indictment also notifies her that the United States is seeking a money judgment in the amount of the proceeds of the fraud. Calonge was arrested and had her initial appearance before United States Magistrate Judge Mark A. Pizzo yesterday. She was released on bond.
According to the indictment, Calonge was employed as the lead agent and manager of a small insurance company located in Plant City – “Express Insurance of Plant City.” In that capacity, she devised a scheme to defraud the owners out of bonus and commission checks from various insurance companies with whom the company did business. Calonge allegedly posed as the company’s owner by opening a post office box in a similar corporate name, filing corporate paperwork, registering a similar fictitious name, and opening a personal bank account in that fictitious name in order to deposit checks rightfully due and owed to the true owners of the company. The indictment further alleges that Calonge spent the fraud proceeds on personal items that benefitted herself and her family, and to open another competing insurance agency.
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation, and the Florida Department of Law Enforcement. It will be prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.
Florida Skilled Nursing Facility Agrees to Pay Record Settlement of $17 Million to Resolve False Claims Act AllegationsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced that Hebrew Homes Health Network, Inc., its operating subsidiaries and affiliates, and William Zubkoff, the former president and executive director of Hebrew Homes Health Network, Inc. (collectively Hebrew Homes), have agreed to pay $17 million to resolve allegations that Hebrew Homes violated the False Claims Act by improperly paying doctors for referrals of Medicare patients requiring skilled nursing care. Hebrew Homes provided skilled nursing services at seven rehabilitation and skilled nursing facilities in Miami-Dade County, Florida. This is the largest settlement of alleged violations of the Anti-Kickback Statute paid by skilled nursing facilities in the United States.
“The record settlement announced today demonstrates this Office’s commitment to rooting out all forms of illegal kickback schemes,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “And that is certainly true in the context of nursing homes, where the Department of Justice will not allow healthcare decisions for elderly Medicare patients to be influenced by kickback payments to physicians. The integrity of our public health care program requires that such decisions be based on quality of care.”
From 2006 through 2013, Hebrew Homes allegedly operated a sophisticated kickback scheme, in which they hired numerous physicians ostensibly as medical directors pursuant to contracts that specified numerous job duties and hourly requirements. The various facilities had several such medical directors under contract at any given time, paying each several thousand dollars monthly. The United States alleged that in reality these were ghost positions, and that most of the medical directors were required to perform few, if any, of their contracted job duties. Instead, they were allegedly paid for their patient referrals to the Hebrew Homes facilities, which increased exponentially once the medical directors were put on the payroll.
“Illegal inducements paid to physicians in exchange for patient referrals will not be tolerated,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Medicare funds should be used to provide care for our senior citizens, not as an inducement to physicians to refer business.”
“Hebrew Homes’ intricate kickback scheme in this record-setting case threatened the impartiality of physician referrals, the financial integrity of Medicare, and the public’s trust in the health care system,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our agency will continue to investigate nursing homes and other health care providers that seek to illegally boost profits at the expense of federal health care programs.”
The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare.
“Illegal kickbacks undermine the integrity of the Medicare system by putting profits in front of patient welfare,” said Special Agent in Charge George L. Piro of the FBI Miami Field Office. “The investigators who helped unravel this intricate scam are to be commended for their diligence and commitment to root out fraud within our health care system.”
As part of the settlement, Mr. Zubkoff has agreed to resign as Hebrew Homes’ Executive Director and to no longer be an employee of the company. Also, as part of the settlement announced today, Hebrew Homes has entered into a five-year Corporate Integrity Agreement with HHS-OIG, and has agreed to change its policies on hiring and maintaining medical directors.
The settlement announced today resolves allegations made in a lawsuit filed by Stephen Beaujon, a former CFO of Hebrew Homes, 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. Mr. Beaujon will receive $4,250,000.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24.3 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the Southern District of Florida and the Civil Division’s Commercial Litigation Branch. Mr. Ferrer commended the joint investigation team, which included special agents with the FBI and HHS-OIG, for their diligent work on this matter. The case was investigated and the settlement negotiated by Assistant U.S. Attorney Franklin Monsour and Department of Justice Trial Attorneys Elizabeth Young and Adam Schwartz.
The case is captioned United States ex rel. Beaujon v. Hebrew Homes Health Network, Inc., et al., Case No. 12-20951 CIV (S.D. Fla.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Florida Skilled Nursing Facility Agrees to Pay $17 Million to Resolve False Claims Act AllegationsRead the Press Release
Hebrew Homes Health Network Inc., its operating subsidiaries and affiliates, and William Zubkoff, the former president and executive director of Hebrew Homes Health Network Inc. (collectively Hebrew Homes), have agreed to pay $17 million to resolve allegations that Hebrew Homes violated the False Claims Act by improperly paying doctors for referrals of Medicare patients requiring skilled nursing care, the Department of Justice announced today. Hebrew Homes provided skilled nursing services at seven rehabilitation and skilled nursing facilities in Miami-Dade County, Florida. This is the largest settlement involving alleged violations of the Anti-Kickback Statute by skilled nursing facilities in the United States.
“Illegal inducements paid to physicians in exchange for patient referrals will not be tolerated,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Medicare funds should be used to provide care for our senior citizens, not as an inducement to physicians to refer business.”
From 2006 through 2013, Hebrew Homes allegedly operated a sophisticated kickback scheme in which they hired numerous physicians ostensibly as medical directors pursuant to contracts that specified numerous job duties and hourly requirements. The various facilities had several such medical directors under contract at any given time, paying each several thousand dollars monthly. The United States alleged that in reality these were ghost positions, and that most of the medical directors were required to perform few, if any, of their contracted job duties. Instead, they were allegedly paid for their patient referrals to the Hebrew Homes facilities, which increased exponentially once the medical directors were put on the payroll.
“The record settlement announced today demonstrates this office’s commitment to rooting out all forms of illegal kickback schemes,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “And that is certainly true in the context of nursing homes, where the Department of Justice will not allow healthcare decisions for elderly Medicare patients to be influenced by kickback payments to physicians. The integrity of our public health care program requires that such decisions be based on quality of care.”
“Hebrew Homes’ intricate kickback scheme in this record-setting case threatened the impartiality of physician referrals, the financial integrity of Medicare and the public’s trust in the health care system,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “Our agency will continue to investigate nursing homes and other health care providers that seek to illegally boost profits at the expense of federal health care programs.”
The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare.
“Illegal kickbacks undermine the integrity of the Medicare system by putting profits in front of patient welfare,” said Special Agent in Charge George L. Piro of the FBI’s Miami Field Office. “The investigators who helped unravel this intricate scam are to be commended for their diligence and commitment to root out fraud within our health care system.”
As part of the settlement, Mr. Zubkoff has agreed to resign as Hebrew Homes’ Executive Director and to no longer be an employee of the company. Also, as part of the settlement announced today, Hebrew Homes has entered into a five-year corporate integrity agreement with HHS-OIG, and has agreed to change its policies on hiring and maintaining medical directors.
The settlement announced today resolves allegations made in a lawsuit filed by Stephen Beaujon, a former CFO of Hebrew Homes, 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. Mr. Beaujon will receive $4.25 million.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24.3 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Southern District of Florida, the FBI and HHS-OIG.
The case is captioned United States ex rel. Beaujon v. Hebrew Homes Health Network, Inc., et al., Case No. 12-20951 CIV (S.D. Fla.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Everett Man Convicted of Federal Drug and Firearms ChargesRead the Press Release
A convicted drug dealer, arrested with a stolen firearm, meth and heroin while on state probation, was found guilty by a federal jury following a week-long trial, announced U.S. Attorney Annette L. Hayes. SETH ISSAC MORGAN, 33, was convicted June 15, 2015 of possession of methamphetamine with intent to distribute, possession of heroin with intent to distribute, possession of a firearm during and in relation to drug trafficking, and felon in possession of a firearm. When sentenced by Chief U.S. District Judge Marsha J. Pechman on September 18, 2015, MORGAN faces a mandatory minimum of 15 years in prison.
“Drugs and guns are a dangerous combination, especially when it involves stolen firearms as it does in this case,” said U.S. Attorney Annette L. Hayes. “I commend the federal, state and local law enforcement agencies who worked together to develop the evidence that led to Mr. Morgan’s conviction.”
According to records filed in the case and testimony at trial, in November 2013, law enforcement in the Everett area received multiple reports regarding MORGAN’s alleged drug dealing and possible connection to stolen firearms. MORGAN was the subject of a Washington State Department of Corrections warrant for violating the terms of his probation. Law enforcement located MORGAN at a north Everett apartment. Surveillance revealed significant traffic to the apartment, an indication of possible drug dealing. On November 26, 2013, when MORGAN emerged from the apartment with a backpack, officers arrested him as he attempted to back out of a parking space. In the backpack MORGAN had methamphetamine, heroin and oxycodone packaged for distribution, cash and a Kahr, 9mm pistol which had been reported stolen. A search of MORGAN’s apartment turned up additional drug residue and drug ledgers.
MORGAN has seven prior felony convictions including: robbery (Snohomish County 2003); rape (Snohomish County 2003); attempted burglary (Washoe County, Nevada 2006); failure to register as a sex offender (Snohomish County 2008); criminal impersonation (Snohomish County 2009); possession of a controlled substance with intent to manufacture or deliver (Snohomish County 2010); unlawful possession of a firearm (Snohomish County 2010).
The firearm MORGAN possessed was one of 29 stolen in a burglary of the Marysville Fred Meyer store. Law enforcement received information that MORGAN purchased a number of stolen firearms that had been taken in the burglary. The man who stole the firearms was sentenced in April to ten years in prison. Others involved in selling the stolen firearms received prison sentences of 3-5 years in prison.
The lead investigative agency on the MORGAN prosecution was the Everett Police Department and Washington State Department of Corrections, with assistance from the Snohomish County Sheriff’s Office, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the Snohomish County Prosecuting Attorney’s Office.
The case was prosecuted by Assistant United States Attorneys Kate Crisham and Special Assistant United States Attorney Benjamin Diggs.
Drug Dealer Goes Back to Federal PrisonRead the Press Release
PITTSBURGH - A resident of Clairton, Pennsylvania, has been sentenced in federal court in Pittsburgh to an additional one year and one day in prison for violating his supervision on his previous crack cocaine dealing conviction, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Jeffrey Carter.
According to information presented to the court, Carter violated his supervision by a United States Probation Officer in several ways: 1) he tested positive on numerous dates for the use of cocaine, marijuana and opiates; 2) he failed to notify his Probation Officer of his contacts with law enforcement; 3) he left Western Pennsylvania without permission; and 4) he changed jobs several times without notifying the Probation Officer.
Prior to imposing sentence, Judge Fischer stated that the sentence was sufficient but not greater than necessary to deter others from violating their supervision. Judge Fischer also imposed an additional one year of supervision once Carter is released from jail, in order to help protect the public from future criminal acts of the defendant.
Assistant United States Attorney Ross E. Lenhardt prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Probation Office for the investigation leading to the successful prosecution of Carter.
Douglas Man Charged with Possession of Child PornographyRead the Press Release
A Level 2 sex offender from Douglas was charged in U.S. District Court in Worcester yesterday with possession of child pornography.
Bryan Larson, 43, was charged in a criminal complaint after a June 12, 2015, federal search warrant of Larson’s residence revealed multiple video files and images depicting child pornography. Larson is a Level 2 sex offender, having been previously convicted of multiple counts of rape of a child. According to the affidavit, federal agents learned that an individual residing in Larson’s residence attempted to receive child pornography in late May and early June 2015. That information triggered a search of Larson’s home on June 12, 2015.
During the search, Larson fled from law enforcement. Larson turned himself in on June 14th and is currently in federal custody. His detention and probable cause hearing is scheduled for June 22nd at 11:00 a.m. in U.S. District Court in Worcester.
The charging statute provides for a minimum mandatory sentence of 10 years in prison and a maximum sentence of 20 years, followed by a minimum of five years of supervised release and a maximum of life, and a $250,000 fine. 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; Michael Shea, Deputy Special Agent in Charge of the U.S. Department of Homeland Security, Homeland Security Investigations in Boston; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Chief Patrick T. Foley of the Douglas Police Department, made the announcement today. Members of the Massachusetts State Police Violent Fugitive Apprehension Section assisted with the apprehension of Larson. The case is being prosecuted by Karin M Bell, Chief of Ortiz’s Worcester Branch Office.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Day Trader Sentenced for Investment Fraud SchemeRead the Press Release
POCATELLO - Michael Justin Hoopes, 41, of Rexburg, Idaho, was sentenced today to 24 months in prison followed by three years of supervised release, including 200 hours of community service, for wire fraud and monetary transactions in property derived from specified unlawful activity, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Hoopes to pay $620,000 in restitution. Hoopes pleaded guilty on February 24, 2015.
According to the plea agreement, Hoopes admitted that from 2007, through February of 2011, he engaged in a scheme to defraud investors in various investment opportunities he offered. Specifically, Hoopes solicited investors to provide him with capital he represented he would use in his commodities futures day trading activities and to invest in Connected Lyfe, a publicly traded company.
Hoopes misrepresented to investors that he earned returns day trading in excess of 20 to 25 percent, that he would invest all of the capital they provided in day trading and pay them from the profits generated by their investments, and he would receive personal compensation only from profits he made above the 20 to 25 percent return. Hoopes provided false monthly account statements to investors documenting the purported positive returns. Further, regarding Connected Lyfe, Hoopes misrepresented that an investor would double their investment within one year and would bear little risk of loss.
In reality, Hoopes did not invest all of the capital he received. He used much of it for personal expenses, including paying credit card bills, and paying “positive” returns to existing investors primarily from the capital raised from new investors. Between 2007, and February of 2011, Hoopes received in excess of $9 million from investors. Of this amount, the defendant did not invest and misappropriated approximately $620,000 for his own personal use. Contrary to monthly account statements showing positive returns, he lost most of the remainder day trading and in other failed investments. Judge Lodge also ordered forfeiture of shares of Connected Lyfe in Hoopes’ possession.
“Those who convince others to entrust them with investing their hard-earned money but instead use that money for personal gain will be vigorously prosecuted,” said Olson. “This sentence ensures that Mr. Hoopes is punished and sends the strong message that investment schemes don’t pay.”
“Investment fraud schemes often involve individuals who appear extremely credible and trust worthy. When investigated by our special agents who specialize in following the money, these individuals are exposed as greedy and uncompassionate and have devastated the financial well-being of investors whose trust they betrayed,” said Gilbert R. Garza, Special Agent in Charge of IRS Criminal Investigation for the state of Idaho.
The case was investigated by the Internal Revenue Service, Criminal Investigation Division, and the Federal Bureau of Investigation, with the assistance of the Commodities Futures Trading Commission.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
DEA Seizes Approximately 325 Grams of OpiatesRead the Press Release
CONCORD, N.H. – Tiffany Ramos, 26, of Manchester, was arrested on a complaint charging her with possession with intent to distribute a controlled substance. The complaint affidavit alleges that Ms. Ramos met with a confidential source on three separate occasions and sold the confidential source a total of 50 grams of a substance which field tested positive for heroin. On the day Ms. Ramos was arrested, she had concealed in her bra approximately 125 grams of a controlled substance which field tested positive for opiates. Ms. Ramos faces a maximum sentence of 20 years imprisonment. Ms. Ramos was detained pending a show cause hearing scheduled for July 13, 2015.
Hector Bienvenido Mateo-Beltre was also arrested on a complaint charging him with possession with intent to distribute a controlled substance. At the time of his arrest, Mr. Beltre was in possession of approximately 200 grams of a controlled substance which field tested positive for opiates. Mr. Beltre faces a maximum sentence of 40 years imprisonment. He was detained pending a preliminary hearing.
Acting United States Attorney Feith reminds the public that a complaint merely alleges that a crime has been committed and that all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The case was investigated by the Drug Enforcement Administration and is being prosecuted by Assistant U.S. Attorney Debra M. Walsh.
Convicted Sex Offender Sentenced to 25 Years for Receipt of Child PornographyRead the Press Release
Orlando, Florida – U.S. District Judge Roy B. Dalton, Jr. has sentenced Ismael Rivera (29, Orlando) to 25 years in federal prison for receiving child pornography. He was also found guilty of violating the conditions of his supervised release, for which he was sentenced to serve an additional two consecutive years in prison. The Court ordered Rivera to serve a life time of supervision following his release from prison, and to forfeit the electronic device that he had used to commit the crime. Rivera pleaded guilty on March 26, 2015.
According to court documents, Rivera was convicted of receipt of child pornography on July 16, 2008, and was sentenced to seven years in federal prison. He was released on May 14, 2014, and began serving his term of supervised release. Three months later, Rivera obtained a smartphone and began downloading child pornography from the Internet. Federal agents executed a search warrant at Rivera’s home and found 22 videos depicting the sexual abuse of girls under the age of six on his smartphone.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Karen L. Gable.
It is another case 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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Conspirators Charged with Defrauding Medicare of Millions Using El Centro ClinicRead the Press Release
SAN DIEGO – United States Attorney Laura E. Duffy announced the unsealing of a 24-count indictment today against four defendants for a conspiracy to unlawfully enrich themselves with millions of dollars by submitting fraudulent claims to Medicare for tests allegedly performed at the El Centro Medical Clinic in El Centro, California (“El Centro Clinic” or “Clinic”). The announcement was made in conjunction with a nationwide Medicare Fraud Takedown executed around the country.
The indictment alleges that defendants Paul Robinson, Levon Tovmassian, Hasmik Senekerimyan, and Nazar Muradyan, conspired with Gevorg Kupelian and others to commit health care fraud and pay kickbacks for Medicare patient referrals. Kupelian – who already pleaded guilty and was sentenced in a related case (Case Number 14CR3419-BAS) -- opened the El Centro Clinic and acted as its organizer and leader. He has admitted he recruited a doctor to serve as a “front” for the Clinic in order to use his Medicare billing number to submit fraudulent Medicare claims. Kupelian also admitted he recruited and paid “cappers” to find senior citizens in El Centro and convince them to go to the Clinic for a gauntlet of tests without justification or proper supervision by a physician.
The indictment alleges that Robinson, a licensed physician, acted as the nominal owner of the El Centro Clinic and that the conspirators submitted claims for the treatment of more than 1,100 Medicare beneficiaries under Robinson’s Medicare billing number between September 2012 and February 2014. The El Centro Clinic generated over $2.7 million in claims to Medicare, which resulted in payments of approximately $1.3 million to Robinson. Robinson is accused of paying 75% of the Medicare reimbursements to Kupelian. Kupelian, in turn, paid Tovmassian, Senekerimyan, Muradyan, and others for various activities and claims designed to make the Clinic appear to be a legitimate medical service provider. Robinson is also charged with obstructing a federal audit by submitting falsified and misleading medical records.
Tovmassian, the indictment alleges, was hired to pose as a Physician’s Assistant (“PA”) who saw and treated patients at the Clinic despite not having the requisite license from the State of California. Tovmassian also allegedly ordered unnecessary medical tests that were billed to Medicare under Robinson’s billing number. Additionally, Tovmassian is charged with making a false statement to one of the investigating agents.
Senekerimyan is accused of completing fraudulent allergy test order forms and falsely claiming to administer allergy tests at the El Centro Clinic. Her husband, Muradyan, is charged with falsely claiming to drive Senekerimyan from their home in North Hollywood, California to the El Centro Clinic several times a week for her to administer allergy tests when, in fact, no tests were ever performed. Senekerimyan and Muradyan are also charged with obstructing a health care crime investigation.
“Health care fraud remains a pervasive and destructive trend nationwide, cheating our nation’s taxpayers outs of millions that could be put to better use,” said U.S. Attorney Laura Duffy. “In conjunction with our colleagues nationwide, we will continue to diligently investigate and prosecute these crimes on the nation’s behalf.”
“Aggressively combating health care fraud continues to remain a top priority of the FBI,” said San Diego FBI Special Agent in Charge Eric Birnbaum. “These indictments demonstrate that utilizing senior citizens as pawns in schemes to defraud Medicare will not be tolerated. The FBI remains committed to working with our partners in order to ensure that Medicare, which provides health care to our nation’s elderly, will be there when they need it the most.”
On April 6, 2015, U.S. District Court Judge Cynthia Bashant sentenced Kupelian to 30 months’ of custody and ordered he pay restitution in the amount of $964,011. Kupelian is currently scheduled to self-surrender on July 8, 2015. The defendants will be summoned to appear before U.S. District Court Judge Cathy Ann Bencivengo for an arraignment on the indictment.
DEFENDANTS Case Number: 15CR1572-CAB Paul Robinson Age: 52(Counts 1-20)
Levon Tovmassian Age: 51 (Counts 1, 3-4, 8-13, 21)Hazmik Senekerimyan
Age: 46 (Counts 1, 4, 8-9, 11-12, 15-18, 22-23) Nazar Muradyan Age: 50 (Counts 1, 24) SUMMARY OF CHARGESCount 1: Title 18, United States Code, Sections 371 (Conspiracy to Commit Health Care Fraud and Pay Remuneration for Health Care Referrals)
Maximum penalty: 5 years of custody; $250,000 FineCounts 2-19: Title 18, United States Code, Sections 1347 (Health Care Fraud)
Maximum penalty: 20 years of custody; $250,000 FineCount 20: Title 18, United States Code, Sections 1516 (Obstruction of Federal Audit)
Maximum penalty: 5 years of custody; $250,000 FineCount 21: Title 18, United States Code, Sections 1001 (False Statement)
Maximum penalty: 5 years of custody; $250,000 FineCounts 22-24: Title 18, United States Code, Sections 1518 (Obstructing a Health Care Crime Investigation)
Maximum penalty: 5 years of custody; $250,000 Fine*The charges and allegations contained in the Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Company Executive and Consultant Charged in Manhattan Federal Court for Scheme to Embezzle Millions from International Insurance CompanyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), unsealed today charges against JAMES J. SHEA and EUGENE FALLON on wire fraud charges stemming from a scheme to embezzle approximately $2.6 million from a large international insurance company where both worked. In perpetrating the scheme, SHEA, an executive at the company, forged the signature of his supervisor to authorize numerous payments to bogus consulting companies that FALLON controlled. FALLON then returned more than two-thirds of the proceeds of the fraud to SHEA, who used the money to purchase a multi-million dollar house and luxury automobiles. SHEA was arrested this morning and is expected to be presented today before United States Magistrate Judge Gabriel Gorenstein. FALLON remains at large.
U.S. Attorney Preet Bharara said: “Together, James Shea and Eugene Fallon allegedly developed a scheme to defraud the company for which Shea worked, and Fallon consulted. Both allegedly exploited their positions and their relationship for pecuniary gain, netting some $2.6 million in the process. Such alleged illegal siphoning of a company’s money has no place in any industry, and our office is committed to holding these individuals accountable for their alleged actions.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Shea and Fallon conspired to created fake contracts for payouts from a legitimate company and split the proceeds. Today, they face charges for their alleged fraudulent activities. The FBI will continue to work with our law enforcement partners to investigate and bring to justice those who seek to profit from deceptive actions.”
According to the Complaint unsealed today in Manhattan federal court[1]:
From January 2012 through December 2013, SHEA and FALLON engaged in a scheme to embezzle approximately $2.6 million from SHEA’s employer, the North American subsidiary of an international insurance company (“Company-1”). SHEA, who rose to the title of Executive Vice President at Company-1, was responsible for the integration of the information technology systems of subsidiaries of Company-1. In that capacity, SHEA oversaw the use of third-party consultants, one of whom was FALLON beginning in or about 2010. According to Company-1’s policies and practices, the CFO of Company-1 could personally authorize and approve any third-party vendor contracts up to $1.5 million.
In 2012, SHEA forged the signature of Company-1’s CFO on contracts between Company-1 and two purported consulting companies controlled by FALLON (the “Consulting Companies”). According to the contracts that outlined the sham engagement between Company-1 and the Consulting Companies, the Consulting Companies were primarily tasked with providing Company-1 with assistance in integrating the technology systems of Company-1. For a total of 17 months of work, the agreements required Company-1 to pay the Consulting Companies more than $2.6 million. In fact, the Consulting Companies did no work for Company-1.
Beginning in August 2012, and continuing through February 2013, FALLON submitted fraudulent invoices on behalf of the Consulting Companies to Company-1 for consulting work that was not performed. On behalf of Company-1, SHEA then authorized payment for the invoices in the amount of approximately $2.6 million to bank accounts that were controlled by FALLON. Of the approximately $2.6 million that SHEA and FALLON embezzled, more than $1.8 million was routed back to SHEA, while FALLON kept the remainder. SHEA used the majority of his fraudulent proceeds to purchase a multi-million dollar house and two luxury cars.
* * *
SHEA, 49, of Paramus, New Jersey, and FALLON, 51, of Nanuet, New York, are both charged with one count of conspiracy to commit wire fraud and one count of wire fraud. Both counts carry a maximum sentence of 20 years in prison, and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the Federal Bureau of Investigation.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Daniel S. Goldman and Michael Ferrara are in charge of the prosecution, and Edward Diskant is in charge of the forfeiture aspects of the case.
The allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Columbia Man Sentenced to 15 Years for Illegal FirearmRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Columbia, Mo., man has been sentenced in federal court for illegally possessing a firearm.
Victor Lee McNeary, Jr., 39, of Columbia, was sentenced by U.S. District Judge Gary A. Fenner on Friday, June 12, 2015, to 15 years in federal prison without parole. McNeary was sentenced as an armed career offender due to his prior felony convictions.
On Oct. 23, 2013, McNeary was convicted at trial of being a felon in possession of a firearm.
Evidence introduced during the trial indicated that McNeary was in possession of a Smith & Wesson .380-caliber handgun on Dec. 11, 2011. According to court documents, Columbia police officers responded to a disturbance at Swan Lake Restaurant, 10 Southampton Drive, at approximately 1 a.m. on that day. An officer was informed that McNeary had been in possession of a handgun but had left the scene. Officers found McNeary at a McDonald’s restaurant and questioned him about the disturbance. When an officer searched McNeary and found the handgun in his coat pocket, McNeary was arrested.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. McNeary has six prior felony convictions for robbery, two prior felony convictions for armed criminal action, two prior felony convictions for tampering and a prior felony conviction for attempted burglary.
According to a witness, McNeary started a fight inside the club and was escorted out. He started another fight in the parking lot that was broken up, and McNeary was told to leave. Instead, McNeary tried to run back into the club and tried to pick a fight with one of the security members. McNeary started walking towards his Cadillac that was parked across the street and continued to yell and scream. As McNeary got closer to his car he started yelling that he was going to get a gun. McNeary entered the vehicle through the passenger side and pulled a small black semi-automatic handgun from the vehicle. McNeary left shortly after by himself and the police were called.
This case was prosecuted by Assistant U.S. Attorney Lawrence E. Miller. It was investigated by the Columbia, Mo., Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Boone County, Mo., Sheriff’s Department and the Missouri State Highway Patrol.
Cincinnati Man Sentenced to 96 Months for Dealing HeroinRead the Press Release
CINCINNATI – Joshua Walker, 24, of Cincinnati, was sentenced in U.S. District Court to 96 months in prison for possessing with intent to distribute a measurable amount of heroin and possession of a firearm in furtherance of a drug trafficking offense.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Donald J. Soranno, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Columbus Field Division, and Cincinnati Police Chief Jeffrey Blackwell announced the sentence handed down today by U.S. District Judge Susan J. Dlott.
According to court documents, on or about March 23, 2014, undercover officers observed Walker engage in several traffic violations. Officers continued to follow the defendant, and after he parked his car, they approached his vehicle. When Walker saw the officers walking toward him, he turned around, got back into his car, locked his vehicle and refused to open his door.
Officers eventually removed Walker from the vehicle and observed a pistol on the driver’s seat, along with a bag containing approximately 5.88 grams of heroin. The defendant had nearly $2,000 on his person and a digital scale was discovered in his glove compartment.
Walker pleaded guilty on March 24, 2015 to one count of possession with intent to distribute a measurable amount of heroin and one count of possession of a firearm in furtherance of drug trafficking.
U.S. Attorney Stewart commended the cooperative investigation by ATF and the Cincinnati Police Department, as well as Cincinnati Branch Chief Anthony Springer, represented the United States in this case.Carlsbad Man Sentenced for Submitting Fraudulent Claims to Veterans Affairs Medical CenterRead the Press Release
ALBUQUERQUE—William Arviso, 57, of Carlsbad, N.M., was sentenced this morning in federal court in Santa Fe, N.M., to a two-year term of probation for submitting false and fraudulent claims to the Veteran’s Affairs Medical Center (VAMC) in Albuquerque. Arviso was also ordered to pay $13,613.66 in restitution to VAMC which represents the money he fraudulently obtained from the VAMC.
Arviso pled guilty on Nov. 7, 2014, to a felony information charging him with ten counts of theft of government property. In entering the guilty plea, Arviso admitted that from Sept. 27, 2011 through Jan. 25, 2012, he submitted false travel claims to the VAMC and received monetary reimbursement for travel that he was not entitled to.
This case was investigated by the Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Divisions and was prosecuted by Assistant U.S. Attorney Rumaldo R. Armijo.
California Man Sentenced for Defrauding Portland Area Investors Out of Almost $1 MillionRead the Press Release
PORTLAND, Ore. – U.S. District Court Judge Michael W. Mosman sentenced Bryan Scott Gunn, 40, of Victorville, California, yesterday to 20 months in prison for coning investors out of almost $1 million. Judge Mosman also sentenced Gunn to serve three years of supervised release and ordered him to pay $939,308 in restitution.
According to court documents, Gunn was a fairly sophisticated conman. In fact, in this case, Gunn executed a con within a con. For the first scam, Gunn convinced his victims to invest more than $500,000 in an alleged heavy equipment leasing company, Republic Funding LLC, gaining the investors’ trust with charm and lies of a high rate-of-return. During the scheme, Gunn showed the investors documentation that falsely showed the alleged company was profitable. Gunn diverted the investors’ money for his personal use; among other things, he spent the money on a home, a condo, the construction of a luxury pool, travel, a Mercedes Benz, and his girlfriend. When the investors began to seek a return on their investment and began to challenge Gunn’s claims about the alleged business, Gunn started his second swindle – a clever and rather elaborate attempt to cover up his diversion of the investors’ money.
Gunn created two fictitious companies, a few fictitious employees, and a fictitious attorney, including corresponding email accounts, to conceal his fraud. Gunn told the investors that he had sold the equipment leasing business’ portfolio to one of his fictitious companies, CMC Funding. When the investors sought payment from the sale of the portfolio, Gunn explained that CMC Funding had filed for bankruptcy and that its assets, including the portfolio, were being purchased by Fidelity LLC, Gunn’s other fictitious entity. Gunn, using letters and emails, posed as employees of Fidelity and as an attorney, and falsely claimed that costs associated with the bankruptcy needed to be paid before the investors could receive any payment for the alleged purchase of the portfolio. The investors fell for Gunn’s second scheme and paid more than $411,000 in an attempt to recover some of their investment. Gunn continued to use their money to live lavishly.
At one point, in an attempt to appease the investors, Gunn created and gave two bogus checks to the investors as a payout. The checks, one for $314,113 and the other for $1,169,887, appeared to be issued from CMC Funding and to be drawn on an account at SEIU Federal Credit Union. After depositing the checks, the investors quickly learned that the checks were fraudulent and that the account at SEIU Federal Credit Union did not exist.
This case was investigated by Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Scott E. Bradford.
Business Owner Sentenced for Fraudulently Obtaining More Than $2.8 Million in Government ContractsRead the Press Release
Greenbelt, Maryland - U.S. District Judge Deborah K. Chasanow sentenced Wesley Burnett, age 54, of Hermosa Beach, California, today to 42 months in prison followed by three years of supervised release for wire fraud conspiracy in connection with a scheme to fraudulently obtain more than $2.8 million in federal government contracts through a Small Business Administration (SBA) program designed to assist disadvantaged businesses. Judge Chasanow also entered an order that Burnet forfeit $694,893.99.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; Brigadier General Keith M. Givens, Commander Air Force Office of Special Investigations; and Mary L. Kendall, Deputy Inspector General, Department of the Interior.
According to his plea agreement, Burnett owned and operated Confederate Group LLC and Total Barrier Works (TBW), which maintained and installed anti-terrorist systems and vehicle control equipment such as security barriers, bollards, gates, uninterrupted power systems and other perimeter security anti-terrorist equipment.
Burnett admitted that from 2007 until 2014, he falsely represented to the U.S. government that Confederate Group was a “Hispanic-American owned business,” a “minority owned business,” a “service disabled veteran owned business,” and a “small disadvantaged business,” in order to win federal contracts at military bases and federal buildings that were reserved for firms in those categories. In fact, Burnett was not a member of any racial or ethnic minority, was not a disabled veteran and was not a member of a socially disadvantaged group. As a result of these fraudulent representations, from 2008 through 2014 Confederate Group was awarded approximately $534,315 in contracts reserved for minorities and disabled veterans.
In order to bid on the contracts, Burnett recruited members of racial or ethnic minorities, service disabled veterans, or members of socially disadvantaged groups, and offered them a percentage of any contract he won using their companies’ name. Burnett and TBW performed all of the work covered by the contract, then paid the owner of the company in whose name the contract had been awarded a fixed percentage of the gross value of the contract, usually between four and five percent. To further this “pass thru” arrangement, Burnett falsely represented that TBW was a trade name for the minority owned company in whose name the contract had been awarded, when in fact TBW was a separate company.
For example, Yogesh K. Patel was the owner of United Native Technologies, Inc. (UNTI), which purported to perform information technology services to the government and commercial clients. In 2005, Patel applied for and was granted certification as a minority or socially disadvantaged owned business under SBA’s program. In addition to a broad scope of assistance from SBA, participants in the program can receive sole source government contracts that are reserved for minority or socially disadvantaged owned companies.
Burnett met Patel at a business conference and the two agreed to use UNTI to bid on SBA set aside contracts at federal government installations, including military bases and federal buildings, with Burnett, TBW and individuals at Burnett’s direction actually performing the work. Burnett also agreed to pay Patel approximately 4.5% of any contract awarded to UNTI. From January 2010 and November 2013, UNTI was fraudulently awarded more than $1.8 million in set-aside U.S. government contracts, while the work on the contracts was actually performed by Burnett’s company and employees.
Burnett admitted that he had similar arrangements with the owner of a minority firm that did electrical and other work for government and commercial clients, and with the owner of a service-disabled veteran-owned small business. Burnett also fraudulently obtained the personal identifying information of a service-disabled veteran, which he then used when bidding on federal government contracts.
Yogesh K. Patel, age 47, of Gaithersburg, Maryland, previously pleaded guilty to his role in the scheme and awaits sentencing.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Rod J. Rosenstein praised the SBA OIG, U.S. Air Force Office of Special Investigations, and the Department of the Interior, OIG for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Leo J. Wise and Sean R. Delaney, who prosecuted the case.
Acuerdan Las Procuradoras De México Y Estados Unidos De América Dar Un Nuevo Impulso a LA Colaboración Bilateral En JusticiaRead the Press Release
Se reúnen por primera ocasión, Arely Gómez González y Loretta E. Lynch.
En su primera reunión de trabajo desde que asumieron su encargo, la Procuradora General de la República, Arely Gómez González y la Procuradora General de los Estados Unidos de América, Loretta E. Lynch, hicieron una revisión y balance del estado que guardan los temas de la agenda en materia de procuración justicia entre ambos países y se comprometieron a trabajar juntas para luchar contra el crimen organizado transnacional, incluyendo a las organizaciones de narcotráfico, fraude y delitos financieros, así como tráfico de personas y de bienes.
Durante el encuentro, que se llevó a cabo en las oficinas del Departamento de Justicia, en Washington, D. C., ambas funcionarias acordaron dar un nuevo impulso a la colaboración entre ambas naciones, en un contexto de reciprocidad y respeto.
La Titular de la PGR, abordó con su contraparte estadounidense el proceso de transformación de la institución, a partir de la entrada en vigor del Nuevo Sistema de Justicia Penal, así como de las reformas para transitar hacia una Fiscalía General.
“Estamos cambiando a la institución, queremos una procuración de justicia moderna, transparente, de pleno respeto a los derechos humanos, basada en investigaciones científicas y técnicas, que ofrezcan resultados. De esta forma, se fortalecerá la confianza ciudadana”, afirmó la Procuradora Gómez González.
Por su parte, la Procuradora General de los Estados Unidos de América, Loretta E. Lynch, indicó:
“Me complace haber tenido la oportunidad de auspiciar este encuentro histórico y de reafirmar nuestra sociedad con la Procuraduría General de la República de México,” dijo la Procuradora Lynch. “La Procuradora Gómez González y yo estamos comprometidas a trabajar muy de cerca para luchar contra el crimen transnacional, en cualquiera de sus formas, ya sea el narcotráfico o el tráfico de personas; contra grupos violentos o defraudadores financieros. Juntas, construiremos sobre la base sólida de cooperación entre nuestros dos países para avanzar en la misión común que nuestras naciones comparten”.
Por la Procuraduría General de la República participaron en la reunión, José Alberto Rodríguez Calderón, Subprocurador Jurídico y de Asuntos Internacionales; Felipe de Jesús Muñoz Vázquez, Subprocurador Especializado en Investigación de Delincuencia Organizada; Eber Omar Betanzos Torres, Subprocurador de Derechos Humanos, Prevención del Delito y Servicios a la Comunidad y Tomás Zerón de Lucio, Director en Jefe de la Agencia de Investigación Criminal.
Por el Departamento de Justicia, acompañaron a la Procuradora Loretta Lynch, Sally Yates, Subprocuradora General; Leslie Caldwell, Subprocuradora de la División Criminal y Bruce Swartz, Subprocurador Adjunto de la División Criminal y Consejero para Asuntos Internacionales.
15 June 2015
Zephyrhills Man Sentenced to 7 Years in Federal Prison for Receiving Child PornographyRead the Press Release
Tampa, FL – U.S. District Judge Virginia M. Hernandez Covington has sentenced Aaron Bicknell (28, Zephyrhills) to seven years in federal prison for receiving child pornography. The Court also ordered him to serve a life term of supervision and to register as a sex offender following his release from prison. Bicknell pleaded guilty on March 18, 2015.
According to court documents, Bicknell used an Internet file sharing program to download child pornography. After a search warrant was executed at his residence, he was found to be in possession of more than 3,500 images depicting child pornography, including more than 150 images depicting sadomasochistic conduct.
“It is disturbing that this predator had thousands of images depicting horrible crimes against children,” said Susan L. McCormick, special agent in charge of Homeland Security Investigations (HSI) Tampa. “HSI will continue to work with our state and local partners, like the Florida Department of Law Enforcement and the Pasco County Sheriff’s Office, making our communities safer.”
“Each one of Bicknell’s movies and photographs represents a child who has been sexually abused,” said FDLE Tampa Bay Special Agent in Charge Rick Ramirez. “We will continue to work with our law enforcement partners to aggressively investigate these types of cases.”
"It is critical that we continue to proactively go after these individuals because their criminal acts perpetuate the exploitation of kids and can be linked to the issue of human trafficking of children," said Pasco County Sheriff Chris Nocco.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Florida Department of Law Enforcement, and the Pasco County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Jennifer L. Peresie.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Woonsocket Man Sentenced to 13 ½ Years in Prison in Armed Drug-Rip and AssaultRead the Press Release
PROVIDENCE, R.I. – Tyronne Seams, 29, of Woonsocket, was sentenced on Friday to 161 months in federal prison for his role in a September 2013 armed robbery and drug-rip at a Woonsocket residence, during which time he and an accomplice opened fire at the occupants of the residence, announced United States Attorney Peter F. Neronha and Woonsocket Police Chief Thomas S. Carey.
The pair made off with a bag of cocaine and a firearm they stole from one of the occupants.
At sentencing, U.S. District Court Judge William E. Smith also ordered Seams to serve 3 years supervised release upon completion of his prison term. Seams pleaded guilty on March 24, 2015, as charged in a three-count indictment, to one count each of conspiracy, Hobbs Act robbery and discharging a firearm in furtherance of a crime of violence.
At the time of his guilty plea, Seams admitted to the court that on September 12, 2013, he and David Bunnell, 22, of Franklin, Mass., conspired to rob and steal drugs from a Woonsocket residence. The next day, armed with a handgun and a double-barrel shotgun, he and Bunnell broke into the intended apartment.
Once inside the apartment, Seams admitted that he and Bunnell fired their weapons at or near the occupants of the apartment. Seams admitted that after subduing the occupants, he grabbed a gun from one of the occupants, assaulted one person and demanded to know where drugs could be found. Seams admitted that he located and took a bag containing cocaine and then fled with the drugs and the gun taken away from one of the residents.
Bunnell, who has been detained along with Seams since their arrest by Woonsocket Police on October 19, 2013, pleaded guilty on October 20, 2014, to one count each of conspiracy, Hobbs Act robbery and discharging a firearm in furtherance of a crime of violence. He is awaiting sentencing.
The cases are being prosecuted by Assistant U.S. Attorney Milind M. Shah.
Woonsocket Police Department officers and detectives were assisted in the investigation of this matter by agents and officers from ATF, the DEA Drug Task Force, Rhode Island State Police, North Smithfield Police and the Franklin and Blackstone, Mass., Police Departments.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Virginia Man, Cary McEntee, Pleads Guilty in Lansing Mortgage Fraud ProbeRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles announced today that Cary McEntee, 58, of Virginia Beach, Virginia, pled guilty today to a federal conspiracy charge stemming from fraudulent real estate transactions he engaged in during 2006 and 2007. The criminal conduct occurred in Lansing, Michigan and was related to real estate transactions in Newport News, Virginia.
On April 10, 2015, a felony information was filed against McEntee charging him with a conspiracy to commit bank fraud. The charge describes a scheme in which McEntee and his unnamed coconspirators in Lansing defrauded banks in connection with 35 mortgage transactions involving more than $4,000,000 in loans. The scheme involved the use of "straw buyers" who, for a fee, would pose as the borrower and apply for a mortgage loan, but who had no intention of paying the mortgage. Once the loan was made, the proceeds were turned over to the conspirators, who used them to enrich themselves. McEntee and his coconspirators falsified income and asset information for these straw buyers in order to induce the targeted banks to make the loans. The mortgage loans went unpaid and the lending banks lost over $2,600,000 when the properties went into foreclosure. The conspiracy charge carries a maximum possible penalty of five years in prison, three years of supervision after release, a fine, and restitution.
McEntee appeared before Magistrate Judge Hugh W. Brenneman today and admitted that he was guilty of the charge. The defendant acknowledged that he had reached a plea agreement with the government in which he would plead guilty to the charge in exchange for a chance at a more lenient sentence from Judge Robert Holmes Bell. McEntee described in detail how he participated in the scheme to defraud the banks induced to provide mortgage loans, and that led Magistrate Judge Brenneman to recommend that he be found guilty. The defendant was released on bond pending sentencing. No sentencing date has yet been set by Judge Bell’s chambers.
McEntee’s prosecution is the result of a continuing investigation by the Mortgage Fraud Task Force, comprised of federal investigators including the FBI, U.S. Secret Service, the U. S. Postal Inspection Service and the HUD Office of Inspector General. The task force also includes the Lansing Police Department, investigators employed by the Michigan Attorney General’s Office and other state agencies. To date, 16 individuals have been successfully prosecuted as a result of the grand jury probe into Lansing-area mortgage fraud.
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Virginia Beach Man Sentenced in Child Pornography CaseRead the Press Release
Distributed child pornography via KIK messenger
NORFOLK, Va. – Dwight McEachin, 20, of Virginia Beach, Virginia, was sentenced today to 120 months in prison, followed by lifetime supervised release for distributing child pornography.
McEachin pleaded guilty on March 3, 2015. According to court documents, McEachin was arrested on Dec. 15, 2014, after admitting to investigators that he used KIK messenger to trade images containing child pornography. Investigators learned of McEachin during the course of an investigation into another man in Florida who was producing child pornography with two children. During the investigation, an undercover investigator exchanged messages with McEachin via KIK messenger, some of which included images of child pornography being sent by McEachin to the undercover investigator.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Michael K. Lamonea, Assistant Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Norfolk, made the announcement after sentencing by U.S. District Judge Mark S. Davis.
This case was investigated by Homeland Security Investigations. Assistant U.S. Attorney Elizabeth M. Yusi is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-003.
Vanguard Health Systems, Inc. Agrees to Pay $2.9 Million to Settle False Claims Act AllegationsRead the Press Release
Vanguard Health Systems, Inc. and certain affiliated companies have agreed to pay civil damages of $2.9 million to settle allegations that they violated the False Claims Act, announced David Rivera, United States Attorney for the Middle District of Tennessee. The alleged false claims involve violations of the Stark Law and the Anti-Kickback Statute, upcoding of Evaluation and Management (“E&M”) codes, and improper physician supervision of cardiac rehabilitation therapy at the Vanguard-owned Arizona Heart Institute (“AHI”).
Vanguard was headquartered in Nashville, Tennessee before it was purchased by Texas-based Tenet Healthcare Corporation in September 2013, after the alleged conduct took place.
“Enforcement of the False Claims Act remains a priority of the United States Attorney’s Office for the Middle District of Tennessee,” said United States Attorney David Rivera. “The U.S. Attorney’s Office and our law enforcement partners are committed to protecting the public fisc and vigorously pursuing any allegations of false billings to federal healthcare programs.”
Specifically, the settlement resolves allegations that AHI submitted false claims to the Medicare program by knowingly paying certain physicians salaries and bonuses that were above fair market value and in violation of the Stark Law and the Anti-Kickback Statute. Vanguard also settled allegations that AHI physicians had upcoded Medicare billings for E&M patient visits in order to obtain larger payments than allowable for the services actually provided.
Finally, the settlement resolves allegations that AHI billed for cardiac rehabilitation therapy provided by a physician who was not properly supervising the therapists providing the services.
Under the FCA, private citizens, known as relators, can bring suit on behalf of the United States and share in any recovery. The relator in this case will receive over $500,000 as her share of the recovery.
This matter was investigated by the U.S. Postal Service – Office of Inspector General and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis. The case is docketed as United States ex rel. Lee v. Vanguard Health Services, Inc., et al., No. 3:13-cv-0171 (M.D. Tenn.).
This settlement agreement is neither an admission of liability by Vanguard nor a concession by the United States that the allegations are not well founded.
U.S. Attorney Booth Goodwin announces charge against Bank of MingoRead the Press Release
Charleston, W.Va. – United States Attorney Booth Goodwin announced today the filing of an information against the Bank of Mingo. The bank is charged with violating the Bank Secrecy Act from January 2009 through April 2012 by failing to develop, implement, and maintain an effective anti-money laundering program. The Bank Secrecy Act requires financial institutions like Bank of Mingo to develop and maintain programs for the detection and reporting of suspicious activity that might be a warning sign of money laundering. In this case, Bank of Mingo was charged with failing to implement internal controls that would have resulted in the bank obtaining “know-your-customer” information, failing to prevent customers from structuring cash transactions to avoid currency transaction reporting requirements, and failing to file “suspicious activity reports” about certain dubious conduct, such as the structuring of cash transactions.
The United States Attorney also filed a motion with the District Court requesting that all proceedings in the case, including trial, be deferred for a period of twelve months from the filing of the information. As stated in the motion, the United States Attorney and Bank of Mingo have signed an agreement, which includes a “Stipulation of Facts” wherein the bank admits the conduct with which it is charged. The deferment will allow the bank to demonstrate its acceptance of responsibility and to take remedial measures to correct its past, wrongful conduct. The bank agrees to cooperate with the United States and to forfeit $2.2 million, representing an amount that was involved in illegally-structured currency transactions.
In the Stipulation of Facts, the bank acknowledged that it failed to detect and report unusual and large cash transactions by employees and agents of Aracoma Contracting, LLC., which was in the business of providing contract labor to coal mining and coal-mining related operations in southern West Virginia. In a related criminal case against Aracoma Contracting, the company admitted, as part of a plea agreement, that it routinely paid wages to certain employees in cash, and withheld no money from those wages, all for the purpose of evading employment taxes. To generate sufficient cash to make the cash payroll in a manner that would not cause the bank to generate currency transaction reports, Aracoma Contracting’s principals, Jerome Russell and Frelin Workman, arranged for cash to be withdrawn from Bank of Mingo’s Williamson branch in amounts of less than $10,000. In this way, Aracoma Contracting structured at least $2.2 million out of Bank of Mingo from January 2009 through April 2012. As a result, Aracoma Contracting pled guilty to conspiring to structure currency transactions.
Bank of Mingo has admitted that its Williamson branch manager instructed Russell and Workman to get the cash for Aracoma Contracting’s cash payroll by requesting advances from a line of credit and by identifying a specific employee who would be picking up the cash. The branch manager or his assistant approved these requests, and Bank of Mingo would subsequently prepare a cashier’s check in the name of the identified employee, who would simply endorse the check in return for cash. The amounts typically were less than $10,000. In this fashion, Aracoma Contracting made multiple cash withdrawals on the same day. Furthermore, because the cash withdrawals were entered in records in the names of the employees and not Aracoma Contracting, there was nothing to indicate that more than $10,000 had been drawn from the line of credit on the same banking day. Consequently, Bank of Mingo did not file currency transaction reports and suspicious activity reports when it otherwise should have done so.
United States Attorney R. Booth Goodwin II emphasized the importance of compliance with the Bank Secrecy Act and why financial institutions must have effective anti-money laundering programs. “These are not just simply technical violations. Illegal structuring enables and helps to conceal larger criminal schemes. Had Bank of Mingo maintained an effective anti-money laundering program, other criminal activity might have been nipped in the bud,” United States Attorney Goodwin said.
The investigation of the case against Bank of Mingo was conducted by special agents and law enforcement officers of the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation Division, the Federal Deposit Insurance Corporation-Office of Inspector General, and the West Virginia State Police-Bureau of Criminal Investigation. Assistant United States Attorney Philip H. Wright and former AUSA Thomas C. Ryan handled the prosecution of Bank of Mingo.
The Federal Deposit Insurance Corporation (FDIC) and the Financial Crimes Enforcement Network (FinCEN), a bureau of the Department of Treasury, conducted parallel civil investigations of Bank of Mingo. FDIC and FinCEN have assessed civil money penalties against the bank.