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15 May 2015
Arizona man convicted of cocaine traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Kwane Baker, 38, of Buckeye, Arizona, was convicted of cocaine trafficking in federal court, United States Attorney William J. Ihlenfeld, II, announced today.An investigation by the Mon Valley Drug and Violent Crime Task Force revealed that Baker sold crack cocaine in Monongalia County, West Virginia in July 2014.
Baker pled guilty to one count of “Distribution of Cocaine Base.” He faces up to 20 years in prison and a fine of up to $1,000,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government.
U.S. Magistrate Judge John S. Kaull presided.
Area Investment Advisor Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – BRYAN BINKHOLDER was sentenced to 108 months in prison on multiple fraud charges involving his financial planning and investment strategy businesses. In addition to the prison sentence, he was also ordered to pay $3,655,980 in restitution to the victims.
According to court documents, Binkholder labeled himself “The Financial Coach” and provided investment and financial planning advice to the general public through his affiliated websites, YouTube channel, published books and articles and an investment related talk-radio show that aired on local radio stations. In 2008, he developed a real estate investment he termed “hard money lending.” Using his platform as an investment advisor and financial talk show host, Binkholder solicited his clients and others to invest in the hard money lending program. As part of his sales pitch, he represented that he had relationships with developers in the real estate community who wanted to purchase, renovate and sell residential real estate in the St. Louis area, but were not able to secure financing from traditional banks. As part of the hard money lending program, Binkholder told investors that they would invest money with him, and he would act as a bank and provide short-term loans to these developers at a high rate of interest, which would be shared with the investor. Instead of exclusively making hard money loans as promised, Binkholder took in millions of dollars of investor money, made only a small number of hard money loans and caused investors to lose more than $3,000,000.
Binkholder, Wentzville, MO, pled guilty in January to four felony counts of wire fraud and one felony count of bank fraud. He appeared today for sentencing before United States District Judge Ronald L. White.
This case was investigated by the Federal Bureau of Investigation, the Postal Inspection Service and Missouri Secretary of State Securities Division. Assistant United States Attorney Stephen Casey handled the case for the U.S. Attorney’s Office.
Albuquerque Man Pleads Guilty to Federal Narcotics Trafficking and Firearms ChargesRead the Press Release
ALBUQUERQUE – Jovan Martinez, 29, of Albuquerque, N.M., entered a guilty plea today in federal court to methamphetamine trafficking and firearms charges. Under the terms of his plea agreement with the U.S. Attorney’s Office, Martinez will be sentenced to 12 years in prison followed by a term of supervised release to be determined by the court.
Martinez was charged in a criminal complaint on June 17, 2014, with being a felon in possession of a firearm and ammunition. According to the complaint, Martinez was arrested by the Albuquerque Police Department (APD) for stealing a bait vehicle, and found to be in possession of a revolver and ammunition.
Martinez was indicted on July 10, 2014, and charged with being a felon in possession of a firearm and ammunition on June 16, 2014, in Bernalillo County, N.M. Martinez was prohibited from possessing firearms or ammunition because he previously had been convicted of residential burglary twice in 2007 and twice in 2008.
During today’s proceedings, Martinez pled guilty to a felony information charging him with distribution of methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. In entering the guilty plea, Martinez admitted that on June 16, 2014, he was in possession of a firearm and ammunition which he had obtained by trading $80.00 cash and some methamphetamine for the firearm. Martinez further admitted that he distributed the methamphetamine which was found in his possession.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the APD. Assistant U.S. Attorneys Lynn Wei-Yu Wang and Presiliano Torrez are prosecuting the case.
14 Charged with Violating Federal Drug and Gun LawsRead the Press Release
PITTSBURGH – Following a multi-agency investigation into drug trafficking in Clairton, Pa., 14 people – 13 residents of Pennsylvania and one resident of New Jersey – have been indicted by a federal grand jury in Pittsburgh on charges of violating federal narcotics and firearms laws. The charges are contained in six separate, but related, indictments returned on May 12, 2015, and unsealed today.
“Through this investigation, which utilized Title III intercepts of cellular telephones, surveillance, controlled drug purchases, and other investigate techniques, we identified a number overlapping and interrelated violent drug distribution networks operating in Clairton, McKeesport, Washington County, Westmoreland County and New Jersey,” stated U.S. Attorney Hickton. “Our work to ensure that law abiding citizens have safe streets and peaceful neighborhoods continues.”
“The arrests today demonstrate, once again, the continued successful partnership of federal, state and local law enforcement in Western Pennsylvania,” said Special Agent in Charge Scott S. Smith of the FBI’s Pittsburgh Field Office. “The Pittsburgh Division of the FBI remains committed to stopping the flow of illegal drugs and improving the quality of life in the communities we serve.”
“One of our primary obligations is keeping our communities safe, and I applaud the work of our OAG agents and the FBI for their great work in this endeavor,” Pennsylvania Attorney General Kathleen G. Kane added.
THE INDICTMENTS
The first indictment, containing four counts, names: Jarran Bell, 34, aka Screw, formerly of McKeesport, PA, currently incarcerated; Krystle Barretto, 29, aka Krystal Barretto, of McKeesport, PA; Amanda Santiago, 23, aka Mandy Santiago, of Jersey City, NJ; and
Donald Mitchell, 34, aka Don Mitchell, aka Curly Top, of New Eagle, PA.According to the indictment, from in and around January 2015, and continuing thereafter to in and around April 2015, the defendants conspired with one another to distribute and possess with intent to distribute one kilogram or more of heroin; Jarran Bell, Krystle Barretto and Amanda Santiago are each charged with one count of possession with intent to distribute 100 grams or more of heroin; and Jarran Bell and Krystle Barretto are each charged with one count of possession with intent to distribute less than 100 grams of heroin and possess of a firearm in furtherance of a drug trafficking crime.
The law provides for maximum total sentences ranging from up to 20 years in prison up to life in prison, as well as mandatory minimum sentences starting at five years in prison. Fines ranging from $250,000 to up to $20,000,000 may also apply.
The second indictment, containing one count, names: Drake Cheadle, 22, aka Tootie, of Clairton, PA; Oscar Woods, Jr., 51, of Clairton, PA; Franklin Spence, III, 20, of McKeesport, PA; Isaac Love, 23, of Clairton, PA; Heidi Welsh, 27, of Connellsville, PA; and
Vance Gibson, 38, aka G-Hype. of Clairton, PA.According to the indictment, from in and around October 2014, and continuing thereafter to in and around May 2015, the defendants conspired with one another to possess with intent to distribute and distribute one kilogram or more of heroin (except for Welsh).
The law provides for a minimum sentence of 10 years in prison, up to life in prison, a fine of up to $20,000,000, or both.
The third indictment, containing one count, names: Bradley Dawkins, aka B-Dawk, 26, of Clairton, PA.
According to the indictment, on or about April 1, 2015, Dawkins, being a convicted felon, illegally possessed an Intratec, Model TECDC9, 9mm caliber pistol. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm.
The law provides for a maximum total sentence of up to ten years in prison or up to life in prison, as well as the possibility of a mandatory minimum sentence of 15 years in prison, depending on the defendant’s prior criminal history. A fine of up to $250,000 may also apply.
The fourth indictment, containing one count, named: Skylar Simmons, aka Bo, aka Bo Bo, of Clairton, PA.
According to the indictment, in and around March 2015, Simmons, being a convicted felon, illegally possessed a Ruger, Model P97, .45 caliber pistol. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm.
The law provides for a maximum total sentence of up to ten years in prison or up to life in prison, as well as the possibility of a mandatory minimum sentence of 15 years in prison, depending on the defendant’s prior criminal history. A fine of up to $250,000 may also apply.
The fifth indictment, containing one count, names: Kelli Johnson, 36, of Clairton, PA.
According to the indictment, from in and around December 2014, and continuing thereafter to in and around March 2015, Johnson conspired with others to distribute and possess with intent to distribute 28 grams or more of cocaine base, in the form commonly known as crack.
The law provides for a mandatory minimum of five years and up to a maximum total sentence of 40 years in prison, a fine of up to $8,000,000, or both.
The sixth indictment, containing two counts, names: Tyler Hurt, 22, aka Boski, of Clairton, PA.
According to the indictment, from in and around February 2014, and continuing thereafter to in and around April 2015, Hurt conspired with others to distribute and possess with intent to distribute a quantity of heroin. Additionally, on or about April 1, 2015, Hurt, being a convicted felon, illegally possessed an Intratec, Model TECDC9, 9mm caliber pistol
The law provides for a maximum total sentence of up to 20 years in prison or up to life in prison, as well as the possibility of a mandatory minimum sentence of 15 years in prison, depending on the defendant’s prior criminal history. A fine ranging from $250,000 up to $2,000,000 may also apply.
Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Amy L. Johnston and Ross E. Lenhardt are prosecuting this case on behalf of the government.
A federally administered Organized Crime and Drug Enforcement Task Force (OCDETF) conducted the investigation leading to the indictment in this case. The task force is headed by the Federal Bureau of Investigation and is comprised of members drawn from the FBI Greater Pittsburgh Safe Street Task Force including the Pennsylvania Office of the Attorney General, Clairton Police Department, Wilkinsburg Police Department, West Mifflin Police Department, Allegheny County Police Department, Duquesne Police Department, Munhall Police Department, Allegheny County Sheriff’s Office, Pittsburgh Bureau of Police, and the Pennsylvania State Police. The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
14 May 2015
“Buju Banton” Case ResolvedRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announced today that the case involving Mark Myrie, aka “Buju Banton,” has been resolved. Myrie was previously granted a new trial for a firearms charge after a finding by the District Court that a juror had committed misconduct in regard to that charge during Myrie’s trial. The United States Court of Appeals for the Eleventh Circuit recently dismissed Myrie’s appeal, sending the matter back to the District Court for the firearms trial. An agreement between the United States and Myrie, who is currently serving a 10-year prison sentence for his cocaine conspiracy conviction, calls for the United States to dismiss the remaining firearms charge in exchange for Myrie’s waiver of all future appeals. The agreement has been accepted by the District Court, and the firearms charge has been dismissed. Myrie is presently scheduled to be released from federal prison in January 2019, at which time he will be deported to his native Jamaica.
This case was investigated by the United States Drug Enforcement Administration and prosecuted by Assistant United States Attorney James C. Preston.
Yuba City Woman Pleads Guilty to Defrauding Staffing Agency of More than $500,000Read the Press Release
SACRAMENTO, Calif. — Denise Wasicki, 40, of Yuba City, pleaded guilty today to two counts of mail fraud in a scheme to defraud a staffing agency out of more than $500,000 in an employee recruitment scheme for a fake business, United States Attorney Benjamin B. Wagner announced.
According to court documents, Wasicki operated a scheme to defraud a staffing agency. In June 2009, Wasicki was employed by a staffing and payroll services agency based in Hanover, Maryland to fill a temporary position at a hospital in Yuba City. When she was terminated by the hospital, Wasicki created a fictional company called Healthcare Quality Management Group (HQMG) that had a fictional client that was purportedly a medical office in Yuba City. Posing as “Jackie Stemmons,” Wasicki engaged the staffing agency to provide staff for the medical office and gave them her own name as the person who should be hired. Because Wasicki had been employed by the agency previously, they were able to expedite her hiring and ultimately placed her in an office manager position.
Between July 28, 2009, and May 12, 2010, Wasicki sent time cards and requests for expense reimbursements to the agency for herself and for an assistant office manager at the fictional medical office. As part of the scheme, Wasicki sent the agency fraudulent checks to reimburse it for payroll services it provided, all of which were drawn on fictitious accounts and all of which bounced. As a result of her actions, the agency sustained a loss of more than $500,000.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney André M. Espinosa is prosecuting the case.
Wasicki is scheduled to be sentenced by Chief U.S. District Judge Morrison C. England Jr. on August 6, 2015. The maximum statutory penalty for each violation of wire fraud is 20 years in prison and a $250,000 fine. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Vidor Man Sentenced for Child Pornography ViolationsRead the Press Release
BEAUMONT, Texas – A 66-year-old Hamond, Indiana, resident, who had lived in Vidor, Texas, has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Raymond Gajewski pleaded guilty on Dec. 4, 2014, to possession of child pornography and was sentenced to 87 months in federal prison today by U.S. District Judge Ron Clark.
According to information presented in court, in April 2012, law enforcement officers were notified by a citizen of a computer which belonged to Gajewski which contained images of child pornography. Gajewski had left the computer in Vidor after relocating to Indiana. Gajewski admitted to possessing the images on the computer and to abandoning it in Vidor. A forensic analysis of the computer revealed approximately 300 images, including two videos, of child pornography. Gajewski was indicted by a federal grand jury on Aug. 6, 2014.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by 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 better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Homeland Security Investigations (HSI) and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Randall L. Fluke.
Vermont Man Charged with Mailing Violent ThreatsRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that William Stanley, 53, of Vermont, was arraigned today on a two count indictment alleging that in August of 2013, he mailed a letter containing threats to kill a deputy state’s attorney and to destroy the Bennington County Courthouse by fire or explosives.
According to court records and proceedings, Stanley is currently serving a 25 year to life sentence on a Vermont state conviction. He entered a not guilty plea to the pending federal charges before the Hon. John M. Conroy, United States Magistrate Judge, and was ordered detained in federal custody until the conclusion of proceedings in this case.
If convicted, Stanley faces up to five years in prison for the threat to the deputy state’s attorney and up to ten years in prison for the threat to destroy the courthouse. An indictment is merely an allegation and Stanley remains innocent until proven guilty.
Acting United States Attorney Eugenia A.P. Cowles commended the efforts of the Federal Bureau of Investigation and the Vermont State Police in investigating this matter. “The federal government takes any threat against state prosecutors and the state judiciary extremely seriously,” Cowles stated.
Stanley is represented by Assistant Federal Public Defender Elizabeth Quinn.
Union County, New Jersey, Man Admits Recruiting A Girl to Work as A ProstituteRead the Press Release
NEWARK, N.J. – A Plainfield, New Jersey, man today admitted arranging sexual encounters involving a 15-year-old girl in return for payment, U.S. Attorney Paul J. Fishman announced.
Ronald Garris Jr., 30, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of sex trafficking of a minor.
According to documents filed in this case and statements made in court:
Garris admitted that on June 14, 2013, he met a 15-year-old girl at a Best Western Hotel in South Plainfield, New Jersey, and recruited her to work as a prostitute. On June 18, 2013, Garris posted an advertisement on backpage.com that contained explicit photographs of the girl, including her telephone number and the town in which she was located. Garris admitted arranging “dates” in which the girl was expected to perform sexual acts in exchange for payment. Garris also admitted that on June 21, 2013, the girl went to the Howard Johnson Express Inn in New Brunswick, New Jersey, for sexual encounters that he arranged.
The count of sex trafficking of a minor is punishable by a maximum potential penalty of life in prison and a mandatory minimum of 10 years in prison. It also carries a maximum fine of $250,000. Garris must register as a sex offender. Sentencing is scheduled for Aug. 18, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the New Brunswick Police Department and the Middlesex County Prosecutor’s Office with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Meredith Williams and Danielle Corcione of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Assistant Federal Public Defender Linda Foster Esq., Newark
garris_ronald_information.pdf (72.37 KB)
U.S. Border Patrol Supervisor Admits Placing Hidden Camera in Women’s Restroom to Videotape Female Private PartsRead the Press Release
SAN DIEGO – U.S. Supervisory Border Patrol Agent Armando Gonzalez pleaded guilty in federal court today to one count of making a false statement to a federal officer and seven counts of video voyeurism, admitting that he placed a hidden camera in a floor drain of the women’s restroom at the Chula Vista Border Patrol station to capture images of female private parts.
Gonzalez, a supervisor, also admitted that when Border Patrol superiors confronted him about the camera, he lied to cover up his crimes, saying that he’d placed the camera in the bathroom to conduct a drug investigation of one of his female employees. Gonzalez made the admissions in a hearing before U.S. Magistrate Judge Jill L. Burkhardt. Sentencing is scheduled for August 17, 2015 at 9 a.m. before U.S. District Judge Roger T. Benitez.
According to the plea agreement, Gonzalez acknowledged that he captured video images of the unclothed private parts of seven women – all federal employees - who used the bathroom between July 24, 2013 and April 11, 2014. The videos were as short as 24 seconds and as long as nine minutes, 17 seconds.
The defendant saved the video images from those instances, and dozens of others, on an SD card he kept hidden at his workplace, the plea agreement said. Gonzalez admitted that after the hidden camera was discovered, he destroyed or discarded the hard drive from the Apple MacBook used to edit the videos before law enforcement had a chance to execute a search warrant at his home.
“These crimes are an assault on the dignity of victims who are left to feel violated, powerless, anxious and unsafe,” said U.S. Attorney Laura Duffy. “It will always be a priority to protect our federal employees and the public from such despicable invasions of privacy.”
“The conduct in this case involves a violation of trust and common decency committed against the victims in this case,” said FBI Special Agent in Charge, Eric S. Birnbaum. “We believe that today's plea is the first step in bringing justice and a sense of closure to the victims in this case.”
DEFENDANT Case Number: 15cr0806-BEN Armando Gonzalez Age: 46 El Cajon, California CHARGESOne Count, False Statements to a Federal Officer, in violation of 18 U.S.C. 1001
Maximum Penalty: Five years in prison, $250,000 fineSeven Counts, Video Voyeurism, in violation of 18 U.S.C. 1801
INVESTIGATING AGENCIES
Maximum Penalty: One year in prison, per count, and $100,000 fine per countFederal Bureau of Investigation
Department of Homeland Security
San Diego Police DepartmentU.S. Attorney’s Office Announces Award RecipientsRead the Press Release
Baltimore, Maryland - Fifteen employees of the United States Attorney’s Office and three law enforcement officers were honored today with the Office’s most prestigious awards. At a ceremony held to announce the awards this morning at the U.S. Courthouse in Baltimore, the United States Attorney also welcomed 14 new Assistant U.S. Attorney and other employees who have joined the Office since last year.
Maryland U.S. District Judge George L. Russell, III served as the keynote speaker for the event. Judge Russell was a Maryland Assistant U.S. Attorney from 1994 to 1999 and from 2002 to 2007.
“These award recipients accomplished superb results while respecting our high ethical and professional standards,” commented U.S. Attorney Rod J. Rosenstein. “As the U.S. Attorney’s Office works with our partners to promote the rule of law, punish criminals, deter crime and protect government property, it is essential to maintain our commitment to excellence, integrity and achievement.”
During the annual ceremony, the U.S. Attorney encourages prosecutors to heed the advice of Robert H. Jackson, while serving as Attorney General in 1940: “’A sensitiveness to fair play and sportsmanship is perhaps the best protection against the abuse of power, and the citizen’s safety lies in the prosecutor who tempers zeal with human kindness, who seeks truth and not victims, who serves the law and not factional purposes, and who approaches his task with humility.’”
Annual Awards
The following awards were announced for accomplishments over the past year:
Gary Jordan Award
Recipient: Andrea L. Smith
Gary P. Jordan served with distinction for many years as an Assistant U.S. Attorney, as First Assistant from March 29, 1987 until his death on October 25, 1996, and as interim U.S. Attorney in 1993. This is an honorary award presented annually to an Assistant U.S. Attorney for exemplary performance that demonstrates the highest traditions of the office: integrity, ingenuity, dedication to public service and fairness.
Barnet D. Skolnik Award
Recipients: Ayn B. Ducao
Robert H. HardingBarnet D. (Barney) Skolnik was an Assistant U.S. Attorney who led teams that prosecuted numerous white collar criminals and corrupt public officials in the 1970s, including Vice President Spiro T. Agnew. This is an honorary award presented annually to one or more Assistant U.S. Attorneys who demonstrate outstanding professionalism, determination and creativity in a case of unusual public significance.
Employee of the Year Award
Recipient: Christopher W. Seybolt
The Employee of the Year Award recognizes sustained superior performance and outstanding achievements by a non-attorney employee. The award also recognizes the recipient's professionalism, dedication and comprehensive knowledge in their area of expertise.
Pete Twardowicz Award
Recipients: Carrie I. Dayton
Eric S. Nye
Julie A. PitocchelliThe Pete Twardowicz Award was established in honor of Eugene P. (Pete) Twardowicz, who rendered many years of outstanding service to the U.S. Attorney’s Office as an IRS criminal investigator and a Special Investigator for this Office. This award recognizes law enforcement agents or officers for outstanding cooperation and achievement while working with the U.S. Attorney’s Office on a significant case.
Excellence in Civil Advocacy
Recipient: Tarra Deshields-Minnis
The U.S. Attorney’s Award for Excellence in Civil Advocacy, established in 2007, is presented annually to an Assistant U.S. Attorney for outstanding advocacy in civil litigation.
Excellence in Prosecution of Fraud
Recipients: Kathleen O. Gavin
Judson T. Mihok
David I. Sharfstein
Leo J. WiseThe U.S. Attorney’s Award for Excellence in Prosecution of Fraud, established in 2007, is presented annually to an Assistant U.S. Attorney for outstanding work in prosecuting fraud.
Excellence in Prosecution of Violent Crime
Recipient: Daniel C. Gardner
William D. MoomauThe U.S. Attorney’s Award for Excellence in Prosecution of Violent Crime, established in 2007, is presented annually an Assistant U.S. Attorney for outstanding work in prosecuting violent crime.
Excellence in Prosecution of Organized Crime
Recipient: David I. Sharfstein
James G. WarwickThe U.S. Attorney’s Award for Excellence in Prosecution of Organized Crime, established in 2007, is presented annually to an Assistant U.S. Attorney for outstanding work in prosecuting organized criminal activity.
Excellence in Legal Support
Recipient: Christine M. Minor
The U.S. Attorney’s Award for Excellence in Legal Support, established in 2007, is presented annually to one or more non-attorney employees for outstanding work in support of the mission of the U.S. Attorney’s Office.
Outstanding Contributions to a Law Enforcement Initiative
Recipient: Harvey E. Eisenberg
The U.S. Attorney’s Award for Outstanding Contributions to a Law Enforcement Initiative, established in 2007, is presented annually to one or more employees for outstanding work in support of an initiative of the U.S. Attorney’s Office.
Carl S. Lackl Award
Recipient: Alison Palencia
The Carl S. Lackl Award for Exemplary Perseverance and Fortitude in Pursuit of Justice was established in 2008 in honor of Carl Stanley Lackl, Jr. Mr. Lackl witnessed a murder in Baltimore in 2006 and agreed to testify against the suspect he identified. After the suspect was arrested by police and charged in state court with the murder, he used a contraband cellular telephone to contact co-conspirators and arranged to murder Mr. Lackl, who was shot to death outside his house in front of his daughter. All of the conspirators were convicted on federal charges.
New Employees
In addition, the U.S. Attorney welcomed new employees who joined the office last year. Assistant U.S. Attorneys: Jane Andersen, Sean Delaney, Molissa Farber, Joshua Ferrentino, Daniel Gardner, Lindsay Kaplan, Rebecca Koch, Sarah Marquardt, Ray McKenzie, Patricia McLane, Michael Packard, Matthew Phelps, Matthew Sullivan, and Aaron Zelinsky. Special Assistant U.S. Attorneys: Gustav Eyler, Shelly Glenn, David Kehoe, Conor Mulroe, Matthew Paeffgen, Lauren Perry and Jennifer Wine. Non-Attorney Staff: Jasmine Burnett, Allison Crandle, Adaliah Davis, Vincent DeVivo, Tiffany Dorsey, Imani Gaddy, Carrie Hannon, Joanna Huber, Rebecca Johnson, Luis Martinez, Berclyn Mitchell, Morgan Murphy, John Russo, Joshua Schnitzlein, Elizabeth Singer, Joyce Thaden, and Matthew Wells.
Two Men Plead Guilty in Manhattan Federal Court in Connection with Violent Daytime Robberies of Jewelry and Watch Stores Across Four StatesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that SEAN ROBINSON and KENDAL THOMPSON pled guilty in connection with a robbery conspiracy operating across New York, New Jersey, Virginia, and Connecticut in which members committed daytime robberies of high-end jewelry and watch stores, including Cartier in Manhattan, using violence, including firearms, and resulting in serious injury to victims and the theft of more than one million dollars in watches and other goods. THOMPSON pled guilty today before United States District Judge Loretta A. Preska, and ROBINSON pled guilty on May 7, 2015, before Judge Preska. To date, eight members of the crew have been apprehended and pled guilty. Two defendants, JAMAL DEHOYOS and COURTNEY HARDIN, remain wanted by the Federal Bureau of Investigation (“FBI”) and are considered armed and dangerous.
According to the allegations contained in court documents previously filed in federal court, and statements made in Court during the pleas of THOMPSON and ROBINSON:
Between approximately July 1, 2013, and January 30, 2014, a highly organized crew engaged in a series of violent robberies of high-end jewelry and watch stores located in four states. During those robberies, crew members smashed display cases with hammers while customers and employees were in the stores, and stole more than one million dollars in luxury watches.
The crew used violence as necessary to carry out the scheme. For example, in one robbery in August 2013 in Richmond, Virginia, the robbers used a handheld stun gun to subdue a female store employee before fleeing with more than a $100,000 in watches. Additionally, THOMPSON and ROBINSON both participated in a September 23, 2013, armed daytime robbery of a jewelry store in Brooklyn, New York, in which two of the robbers displayed handguns, and one of the robbers shot the store owner when he attempted to prevent members of the crew from fleeing with stolen jewelry. ROBINSON, the leader of the crew, planned the September 23, 2013, robbery, as well as a series of other robberies committed by this crew.
Among the stores robbed by the crew are: Cartier, in Manhattan; Travers Jewelers, in Manhattan; Golden Nugget Jewelry, in Manhattan; New York; the Borgata Hotel and Casino in Atlantic City, New Jersey; Schwarzschild’s Jewelers in Richmond, Virginia; Martin Jewelers in Cranford, New Jersey; Henry Reid and Sons Jewelers in New Canaan, Connecticut, and Litan Jewelers in Brooklyn, New York.
* * *
ROBINSON, 43, and THOMPSON, 31, both of Brooklyn, New York, each pled guilty to one count of Hobbs Act robbery conspiracy, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
To date, two members of this conspiracy have been sentenced. On March 18, 2015, Judge Preska sentenced ALLEN WILLIAMS to 108 months in prison. On October 23, 2014, United States District Judge Robert P. Patterson sentenced TERRELL RATLIFF to 33 months in prison.
Mr. Bharara praised the investigative work of the FBI and the New York City Police Department. He also thanked the police departments of Cranford, New Jersey; Atlantic City, New Jersey; Richmond, Virginia; and New Canaan, Connecticut, and the Manhattan and Brooklyn District Attorneys’ Offices, and the Union County, New Jersey, Prosecutor’s Office, for their assistance in the investigation, which he noted is ongoing.
The case is being prosecuted by the Office’s General Crimes Unit. Assistant United States Attorneys Andrea M. Griswold and Richard Cooper are in charge of the prosecution.
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Two Men Found Guilty on Charges of Conspiracy, Access Device Fraud, and Aggravated Identity TheftRead the Press Release
RICHMOND, Va. – Ofori Awauh, 22, of Burke, Virginia; and Dane Ellis, 35, of Brooklyn, New York, were convicted yesterday by a federal jury on charges of Access Device Fraud, Conspiracy to Commit Access Device Fraud, and Aggravated Identity Theft.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Virginia Attorney General; and Douglas F. Mease, Special Agent in Charge of the United States Secret Service, Richmond Field Office, made the announcement after the verdict was accepted by U.S. District Judge John A. Gibney, Jr.
Awuah faces maximum penalties of 10 years’ incarceration on two access device fraud counts, 15 years’ incarceration on a third access device fraud count, 7 years’ incarceration on the conspiracy count, and a mandatory consecutive 2 years on the aggravated identity theft count. Ellis faces maximum penalties of 7 years’ incarceration on a conspiracy count and 15 years’ incarceration on an access device fraud count. They are both scheduled for sentencing on August 20, 2015. The maximum statutory sentences are prescribed by Congress and are provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Awuah, Ellis, and two other co-conspirators, Keyana Barnes and Michael Bonsu, were indicted on September 2, 2014.
According to evidence presented at trial, the group would make on-line purchases from various stores using stolen credit card numbers and the identities of real individuals who were not part of the scheme. Because they often would have to present a credit card bearing the name of the person in whose name the items were purchased, the group would rub down the embossed numbers on “My Vanilla” commercial gift cards, and then use an embosser to place the stolen credit card numbers on those cards, along with the name of the person whose credit card number the group had stolen.
As part of the operation, Awuah stole a Virginia identification card belonging to an acquaintance and used it in an attempt to pick up consumer electronics purchased with a fraudulently obtained credit card number at a Fairfax County WalMart on October 25, 2013.
On January 14, 2014, Awuah, Ellis, Barnes, and Bonsu were arrested after they picked up consumer electronics at Best Buy stores in Stafford County and Fredericksburg that had been purchased on-line with fraudulently obtained credit card numbers. At the time of their arrest, they had with them an embosser, My Vanilla gift cards and the names of identity theft victims.
On May 4, 2015, Barnes entered pleas of guilty to access device fraud and aggravated identity theft charges. Her sentencing is scheduled for August 7, 2015.
On May 7, 2014, Bonsu entered a plea of guilty to an access device fraud charge. His sentencing is scheduled for July 29, 2015.
This case was investigated by the Fredericksburg Police Department, Stafford County Sheriff’s Office, Fairfax County Police Department, and the United States Secret Service as part of the Metro-Richmond Identity Theft Task Force. Other member agencies of the Task Force include: the Internal Revenue Service’s Criminal Investigation Division, the United States Postal Inspection Service, the Bureau of Diplomatic Security, the U.S. Department of State, Henrico County Police Department, Richmond Police Department, and Chesterfield County Police Department. Prosecutions for the Task Force are handled by the United States Attorney’s Office and the Office of the Attorney General for the Commonwealth of Virginia. Special Assistant U.S. Attorney Ann M. Reardon and Assistant U.S. Attorney Michael C. Moore are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case Nos. 3:14cr121.
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Two Fresno County Men Indicted for Firearms ChargesRead the Press Release
FRESNO, Calif. — A federal grand jury has returned two separate indictments against two Fresno County men for being felons in possession of a firearm. United States Attorney Benjamin B. Wagner announced.
In the first case, Adrian Delgado 31, of Mendota, was charged with being a felon in possession of a firearm and possession of a firearm in a school zone. According to court documents, on March 17, 2015, officers from Mendota Police Department encountered Adrian Delgado near Mendota Elementary School. Officers found a loaded Taurus, .327-caliber handgun in Delgado’s waistband. Delgado said he had just come from his child’s school. Delgado has prior felony convictions.
In the second case, Steven Estrada, 29, of Fresno, was charged with being a felon in possession of a firearm. According to court documents, on April 23, 2015, Fresno Police Department officers responded to a report of an individual who had a gun behind an abandoned house. Officers arrived and encountered Estrada coming out of the garage behind an abandoned house. They located the gun that Estrada is charged with possessing in the garage. Estrada has prior felony convictions.
If convicted, Delgado faces up to 15 years in prison and a $500,000 fine, and Estrada faces up to 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
These cases are the product of investigations by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Fresno Police Department and the Mendota Police Department. The cases are part of Project Safe Neighborhoods, which is a joint initiative to combat gang and gun violence. The cases are being prosecuted by Assistant U.S. Attorney Kimberly Sanchez.
Two Defendants Sentenced for Unrelated Violent Crimes Against Women on the Red Lake Indian ReservationRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of CHRISTOPHER MICHAEL STRONG, SR., 34, to 360 months in federal prison for a violent sexual assault committed on the Red Lake Indian Reservation. On December 19, 2014, following a three-day trial, a federal jury found STRONG guilty of aggravated sexual abuse. The defendant was sentenced on May 7, 2015 before Senior Judge Richard H. Kyle, Sr. in U.S. District Court in Duluth, Minn.
As proven at trial, in June of 2014, STRONG kidnapped and physically and sexually assaulted a female victim. Over a period of three days, STRONG brutally and repeatedly abused the victim. During the trial, photographs were entered into evidence that showed in graphic detail the permanent and life-threatening injuries the victim suffered.
In a second, unrelated case, QUENTIN LEE STRONG, 29, was sentenced to 120 months in federal prison for a shooting committed on the Red Lake Indian Reservation. STRONG, who was indicted on September 24, 2014, pleaded guilty on January 26, 2015 to assault resulting in serious bodily injury. The defendant was sentenced on May 11, 2015 before Chief Judge Michael J. Davis in U.S. District Court in Duluth, Minn.
According to his guilty plea and documents filed in court, on the morning of August 19, 2014, STRONG was illegally in possession of a .22 caliber rifle, which he used outside of his house to fire multiple rounds in the direction of a female victim. One of the bullets hit the victim in her left knee.
“These are two examples of the extreme domestic violence that is present on the Red Lake Indian Reservation,” said Assistant U.S. Attorney Clifford B. Wardlaw. “These lengthy sentences send a clear message that violent acts such as these will not be tolerated.”
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.
Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered during their lives than Caucasian women.
The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.
To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.
These cases resulted from an investigation conducted by the Federal Bureau of Investigation and the Red Lake Police Department.
These cases were prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.
Defendant Information: CHRISTOPHER MICHAEL STRONG, SR., 34
Red Lake, Minn.
Convicted: • Aggravated Sexual Abuse, 1 count
Sentenced: • 360 months in prison
• Five years supervised release
QUENTIN LEE STRONG, 29
Redby, Minn.
Convicted: • Assault Resulting in Serious Bodily Injury, 1 count
Sentenced: • 120 months in prison
• Three years supervised release
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Toombs and Williams Sentenced to 240 Months for Conspiracy to Distribute Cocaine and Crack CocaineRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia announced that Donterius Toombs, age 33 and Stephon Williams, also known as “Corndog,” “Lieutenant,” and “L.T.”, age 50, from Camilla, Georgia were sentenced May 13, 2015 by the Honorable W. Louis Sands, United States District Judge in Albany. Each defendant was sentenced to 240 months for conspiracy to distribute cocaine and crack cocaine.
In August 2012, the court authorized a wiretap of a phone used by Curtis Bernard Donaldson, also known as “Thug.” Mr. Donaldson was then a drug dealer operating out of the Camilla, Georgia area. His “self-proclaimed” lieutenant was Mr. Williams, a former police officer, and his lower level drug dealers included Mr. Toombs. Mr. Donaldson’s operation produced two types of crack cocaine – “straight drop” or “glass” and “whip” which produce a greater weight of crack than others from the same amount of powder. Mr. Williams and Mr. Toombs each have prior convictions for drug distribution. The two were convicted at trial in November 2014.
“As long as drug dealers put their poison on our streets and in our communities, we are going to use all of our resources to make sure that they end up in jail,” United States Attorney Michael Moore said. “Whether we take them down as a complete organization or one at a time, the Middle District of Georgia is a safer place with fewer dealers on the street and more in the jail.”
The case was investigated by the Drug Enforcement Administration in Columbus, Pelham Police Department, Cairo Police Department and the Thomas County Vice-Narcotics Squad. Assistant United States Attorney Leah McEwen prosecuted the case on behalf of the Government.
Inquiries regarding the case should be directed to Pam Lightsey at the United States Attorney’s Office at 478-752-3511.
Three Sentenced for Armored Car RobberiesRead the Press Release
HOUSTON – William Williams, 29, Stephen Carter 29, and Bobby Gray, 28, all of Houston, have been ordered to federal prison for their involvement in the Oct. 7, 2013, attempted robbery of a Garda Cash Logistics armored truck, announced U.S. Attorney Kenneth Magidson. During the attempted robbery, a guard was shot eight times, but has since recovered.
Williams had pleaded guilty to one count of discharging of a firearm during the commission of a crime of violence, conspiracy to interfere with commerce by robbery and two counts of interference with commerce by robbery. Today, U.S. District Judge Gray H. Miller ordered he serve a total of 30 years in federal prison to be followed by five years of supervised release. The other two men were both convicted of conspiracy to interfere with commerce by robbery and two counts of interference with commerce by robbery. Gray and Carter will serve respective sentences of 100 and 108 months in prison and were further ordered to serve three years of supervised release following completion of their prison terms.
At the hearing, the injured guard testified, explaining that he and his family “almost lost everything.” He testified that it has been a trying time for himself and his family and that he has had to learn to walk again. He continues with physical therapy, is working again and said he is grateful to be alive.
The attempted robbery occurred at the Chase Bank located at 19747 N. US 59 in Humble. At the location, Williams approached the guard who was in the process of filling an ATM machine. He asked the guard for money and shot the guard eight times in the back. Carter was the driver and it was Gray’s job to retrieve the money. No money was obtained.
Williams was also involved in a prior armored car robbery on Aug. 13, 3013, during which he pointed a gun at a Loomis guard at the Movie Tavern located at 15719 North Freeway in Houston.
Loomis Armored US Inc. and Garda Cash Logistics., who operated the trucks during the robbery and robbery attempts, maintain offices throughout the United States and was engaged in the business of secured armored transport of United States currency in interstate commerce and in picking up and delivering United States currency to financial institutions and check cashing businesses, both of which are industries which affect interstate commerce.
Previously released on bond, Carter was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future. Williams and Gray have been and will remain in custody.
The case was investigated by the FBI’s Bank Robbery Task Force, police departments in Humble and Houston and Harris County Sherriff’s Office. Assistant U.S. Attorney Jennie Basile is prosecuting both cases.
Three Fresno Residents Indicted for Methamphetamine TraffickingRead the Press Release
FRESNO, Calif. — A federal grand jury returned a three-count indictment today against Fresno residents Eduardo Fernandez, aka, Lalo, aka, Flavio Rios, 35; Miguel Medina, 62; and Alexis Antonio Alvarez Guzman, 19, charging them with conspiracy to distribute and possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, in April 2015, Fernandez received a shipment of methamphetamine from Mexico with Medina’s assistance. Fernandez took it to a residence in Visalia where Guzman was located. When agents served a search warrant at the residence, they found 16 pounds of methamphetamine.
This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation involving the Drug Enforcement Administration, Fresno Police Department, Madera Narcotic Enforcement Task Force, Visalia Police Department, Tulare County Sheriff’s Office, and California Highway Patrol. OCDETF is a program that facilitates joint investigative work by federal, state, and local law enforcement agencies. Assistant United States Attorney Kimberly A. Sanchez is prosecuting the case.
If convicted, Fernandez faces a maximum statutory penalty of life in prison and a $30 million fine. Medina and Guzman are facing a maximum penalty of 20 years in prison on each of two counts, and a $1 million fine on each of two counts. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Texas Antiques Appraiser Sentenced to 25 Months in Prison for Rhino and Ivory Smuggling ConspiracyRead the Press Release
Ning Qiu, 43, of Frisco, Texas, an appraiser of Asian art, was sentenced today by U.S. District Judge Thad Heartfield, in Beaumont, Texas, to 25 months in prison to be followed by three years of supervised release for conspiring to smuggle rhinoceros horns and objects made from rhino horn and elephant ivory, worth nearly $1 million, from the United States to China. Qiu was also directed to pay a $150,000 fine, which was directed to the Lacey Act Reward Fund.
The sentence was announced by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney John M. Bales for the Eastern District of Texas and Director Dan Ashe for the U.S. Fish and Wildlife Service (USFWS).
Qiu had worked for seven years as an Asian antique appraiser for an auction house in Dallas, Texas. Qiu previously pleaded guilty before U.S. Magistrate Judge Don D. Bush to an information charging him with conspiracy to smuggle and violate the Lacey Act. Qiu was identified as part of “Operation Crash” – a nationwide effort led by the USFWS and the Department of Justice to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.
In papers filed in federal court, Qiu admitted to acting as one of three antique dealers in the United States who Zhifei Li, the admitted “boss” of the conspiracy, paid to help obtain wildlife items and smuggle them to Li via Hong Kong. Li was sentenced to serve 70 months in prison on May 27, 2014, in federal district court in Newark, New Jersey, for playing a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating the price, directing how to smuggle the items out of the United States and obtaining the assistance of additional collaborators in Hong Kong to receive the smuggled goods and then smuggle them to mainland China.
“Qiu was a key player in a web of wildlife traffickers who used his role as an antique dealer to illicitly smuggle wildlife items, including rhino horn and elephant ivory, from the United States to China,” said Assistant Attorney General Cruden. “We will continue to investigate and prosecute those who are involved in this dark trade, which fuels poaching and is driving some of the world’s most iconic species to the brink of extinction.”
“Ning Qiu’s unseemly business of trafficking in the horns of endangered rhinos is over and now he will serve a just sentence of imprisonment,” said U.S. Attorney Bales. “I only hope that others still involved in what is a nasty, brutally cruel exercise will observe the outcome of “Operation Crash” and immediately cease and desist their detestable practices. I commend the excellent work by the agents and prosecutors.”
“The sentencing today of Ning Qiu is yet another successful prosecution resulting from Operation Crash and a further step in the global fight against wildlife trafficking and its dire consequences for rhinos, elephants and other wildlife,” said Director Ashe for USFWS. “This case is a stark reminder of the role businesses and criminals based in the United States play in driving the current illegal slaughter of wildlife. It also illustrates the consequences these criminals will inevitably face for their greed and indifference to its horrific result.”
Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.
Qiu admitted to meeting Li in 2009 through his work at the auction house in Dallas, Texas, and entering into a conspiracy with Li whereby Qiu traveled throughout the United States to purchase raw and carved rhinoceros horns and elephant ivory for Li, often receiving specific instructions from Li on which items to buy and how much to pay. Upon purchasing the items, Li transferred funds directly into Qiu’s bank accounts in the United States and China. After acquiring the items for Li, Qiu arranged for them to be smuggled to a location in Hong Kong, which was provided by Li. In December 2013, another one of Li’s suppliers, Qiang Wang aka Jeffrey Wang was sentenced in the Southern District of New York to 37 months in prison.
As part of his plea, Li admitted that he sold raw rhinoceros horns worth approximately $3 million, approximately $17,500 per pound, to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu, which means “to make it as old” in Mandarin. In China, there is a centuries-old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn. Owning or drinking from such a cup is believed by some to bring good health and true antiques are highly prized by collectors. The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques. The leftover pieces from the carving process were sold for alleged “medicinal” purposes even though rhino horn is made of compressed keratin, the same material in human hair and nails and has no proven medical efficacy.
Between 2009 and 2013, Qiu purchased and smuggled to Hong Kong at least five raw rhinoceros horns weighing at least 20 pounds. Qiu smuggled the raw rhino horns by first wrapping them in duct tape, hiding them in porcelain vases and falsely describing them on customs and shipping documents, including by labeling them as porcelain vases or handicrafts. Qiu purchased several of the horns he smuggled to China from Elite Decorative Arts, an auction house located in Boynton Beach, Florida. Elite Decorative Arts has entered a guilty plea in District Court in West Palm Beach, Florida, for its role in illegally trafficking and smuggling wildlife, including rhinoceros horns, elephant ivory and items made from coral. Elite is scheduled to be sentenced on May 20, 2015.
The investigation is continuing and is being handled by the USFWS’s Office of Law Enforcement, the U.S. Attorney’s Office for the Eastern District of Texas and the Department of Justice’s Environmental Crimes Section. The government is represented by Assistant U.S. Attorney James Noble and Trial Attorney Gary N. Donner of the Environmental Crimes Section of the Environment and Natural Resources Division.
Stockton Man Sentenced to 15 Years in Prison for Drug Trafficking and Firearm ChargesRead the Press Release
SACRAMENTO, Calif. — Robert Vargas, 29, of Stockton, was sentenced today by United States District Judge Morrison C. England Jr. to 15 years in prison for conspiring to distribute and to possess with intent to distribute methamphetamine, possession with intent to distribute MDMA, and possession of a firearm in furtherance of a drug trafficking crime, United States Attorney Benjamin B. Wagner announced.
According to court documents, between August and September 2013, Vargas and co-defendant Robert Guerena, 21, of Stockton, met with an undercover agent on four separate occasions to conduct methamphetamine transactions. Each of these meetings occurred in a Walmart parking lot in Stockton, and with each subsequent meeting, the amount of methamphetamine provided by the defendants to the undercover officer agent increased. On September 19, 2013, the defendants arrived at the Walmart parking lot intending to provide the undercover agent with two pounds of methamphetamine. Before the transaction was completed, both defendants were arrested. In all, the defendants provided the undercover agent with approximately 1.2 kilograms of pure methamphetamine.
A search warrant executed at Vargas’ residence recovered a Glock pistol, 25 grams Ecstasy (MDMA) pills (including packaging), multiple digital scales, multiple gun magazines (including a high capacity magazine), and two bullet proof vests.
On April 23, 2015, Guerena was sentenced to 11 years and three months in prison.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Stockton Police Department, and the San Joaquin Sheriff’s Office. Assistant United States Attorney Olusere Olowoyeye prosecuted the case.
State Department Contracting Official and Former Government Contractor Indicted for Conspiracy to Commit Wire Fraud and Wire FraudRead the Press Release
ALEXANDRIA, Va. – Tony Chandler, 68, of Severn, Maryland, and Marvin Hulsey, 52, of Stafford, Virginia, were indicted by a federal grand jury today on charges of conspiracy to commit wire fraud and wire fraud. Chandler also faces charges for conflicts of interest in the same indictment.
According to the indictment, Chandler was employed by the U.S. Department of State with duties as a contracting officer’s representative in the Bureau of Overseas Buildings Operations. In that capacity, Chandler was responsible for oversight of the contractor that employed Hulsey as a program manager. Apart from his government employment, Chandler was an authorized distributor of nutritional supplements for a multi-level marketing company. From 2008 and continuing into 2010, Chandler earned a commission of sales for nutritional supplements that were sold to employees under Hulsey’s supervision. The employees were reimbursed by Hulsey’s employer for the cost of the nutritional supplements, after which Hulsey, through agreement with Chandler, caused fake invoices to be created and submitted to the U.S. Department of State. Knowing that the cost of nutritional supplements was not an allowable cost, Chandler approved many of the fake invoices in his official capacity, causing the U.S. Department of State to make fraudulent payments back to Hulsey’s employer. Chandler earned a commission from the multi-level marketing company for each sale of nutritional supplements.
In a related case, on April 23, 2015, Gene Goodsell, the former U.S. Department of State supervisor of Chandler, pleaded guilty to a conflict of interest. According to documents filed in that case, Goodsell, who sponsored Chandler as an authorized distributor of nutritional supplements and earned commissions on each sale made by Chandler, became aware that Chandler sold nutritional supplements that were billed to the U.S. Department of State, and despite then knowing of his own personal financial interest in the contract, Goodsell continued to make official decisions concerning the contract.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Steve A. Linick, Inspector General for the U.S. Department of State and Broadcasting Board of Governors; and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the grand jury returned the indictment.
This case was investigated by the U.S. Department of State, Office of Inspector General (DOS-OIG) and the FBI’s Washington Field Office. Substantial assistance was provided by the Criminal Analysis Branch of the DOS-OIG. Special Assistant U.S. Attorney Brian D. Harrison is prosecuting the case.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
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. 1:15-cr-137. Related court documents and information concerning Goodsell may be found on PACER by searching for Case No. 1:15-mj-210.
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St. Croix Man Pleads Guilty to Manufacture of MarijuanaRead the Press Release
St. Croix, USVI – Michael Velez, 36, of St. Croix, pleaded guilty today in District Court on St. Croix to one count of Manufacture of Marijuana, United States Attorney Ronald W. Sharpe announced.
As part of his plea, Williams admitted that on January 29, 2015 he was the sole resident of 4-0 Catherine’s Rest, St. Croix, where the U.S. Drug Enforcement Administration (DEA) and Virgin Islands Police Department (VIPD) found 204 marijuana plants during the execution of a search warrant. According to court records, law enforcement officers also found cultivation equipment, including lighting, watering mechanisms, and cloning solution, as well as ammunition on the property.
Williams is facing a maximum sentence of five years in prison and a $250,000 fine. Sentencing is scheduled for September 16, 2015.
The case was investigated by the DEA and VIPD, and is being prosecuted by Assistant U.S. Attorney Christian Stringer.
South Bend Police Officer Charged for Assaulting and Injuring an ArresteeRead the Press Release
The Justice Department announced that South Bend, Indiana, Police Department Officer Theodore Robert, 40, has been charged with a criminal civil rights violation for allegedly assaulting and injuring an arrestee at the St. Joseph County Jail. The incident at the jail occurred on May 30, 2010.
According to the indictment, South Bend Police Officer Theodore Robert, while acting under the color of law, willfully deprived G.H., an arrestee, of the right to be free from unreasonable searches and seizures. This includes the right to be free from the use of unreasonable force by a person acting under color of law. Specifically, Officer Robert assaulted G.H., resulting in bodily injury to G.H.
An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty.
The Department of Justice Civil Rights Division enforces a federal provision regarding deprivation of rights under color of law. This provision makes it a crime for a person acting as a law enforcement officer to willfully deprive a person of a right or privilege protected by the Constitution or laws of the United States.
The investigation by the South Bend Resident Agency of the FBI is ongoing. The case is being prosecuted by Trial Attorneys Stephen Curran and Sanjay Patel of the Civil Rights Division, with the assistance of the U.S. Attorney’s Office for the Northern District of Indiana.
Sentencing for May 8, 2015Read the Press Release
Noemi Alvarez Avila, 24, of Seattle, Washington, was sentenced by Federal District Court Judge Scott W. Skavdahl on May 8, 2015, for conspiracy to possess with intent to distribute and for possession of methamphetamine. Avila was arrested in Yellowstone National Park. She received five years of supervised probation with special conditions and was ordered to pay a $200.00 special assessment. This case was investigated by the National Park Service.
San Antonio Man Pleads Guilty to Producing Child PornographyRead the Press Release
In San Antonio this morning, 27-year-old Ryan Bradley Pitts pleaded guilty to six counts of production of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
As a result of his plea, Pitts faces up to 60 years in federal prison. Sentencing is scheduled for 8:30am on August 14, 2015, before Chief United States District Judge Fred Biery in San Antonio.
According to court records, on numerous occasions between June 2008 and February 2012, Pitts sexually assaulted six different children, ages 3 to 10, for the purpose of producing visual depictions of the activity. Pitts also used peer-to-peer software to trade child pornography with others.
Pitts has remained in federal custody since his arrest in November 2013. During this investigation, FBI agents seized Pitts’ laptop computer, cell phone and other digital media devices. A forensics examination of the seized equipment revealed the presence of more than 21,500 images and 1,200 videos depicting child pornography.
This Project Safe Childhood case was investigated by Federal Bureau of Investigation. Assistant U.S. Attorney Tracy Thompson is prosecuting this case on behalf of the Government.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
South Bend’s Group Violence Initiative Means BusinessRead the Press Release
SOUTH BEND – United States Attorney for the Northern District of Indiana, David Capp, announced that James Dean Garcia, Jr, 33, of South Bend, Indiana, was sentenced today, for being a felon in possession of a firearm. Garcia was sentenced to 63 months imprisonment and two years of supervised release.
According to documents in the case, on September 6, 2014, Garcia was driving an SUV near the intersection of Calvert and Prospect Streets in South Bend when he fired several rounds from his vehicle. Officers responded to the call of shots fired and were on the scene when the suspected vehicle was traveling towards them at a high rate of speed. Officers initiated a traffic stop on the vehicle and identified the driver, James Dean Garcia, Jr. Officers learned Garcia had a suspended license. During the process of asking Garcia to step out of the vehicle, officers saw a spent shell casing on the driver’s seat. All occupants were removed from the vehicle and a firearm was discovered in the center console of the vehicle. Garcia admitted possessing and shooting the firearm saying that he wasn’t trying to hurt anyone but had done “something stupid.” Mr. Garcia has a lengthy criminal history which includes a prior felony conviction for a firearm offense.
In May of 2014, local police, prosecutors, the Clergy, members of the community, and social services began to work together to decrease gun violence in our streets by implementing the South Bend Group Violence Intervention (SBGVI) strategy. http://www.ci.south-bend.in.us/government/content/south-bend-group-violence-intervention . On August 28, 2014, several members of the community believed to be members of groups most likely to be victims or perpetrators of violence were invited to attend the SBGVI Call-In. The SBGVI Call-In is a component of the SBGVI Strategy at which attendees are asked to spread the message that shooting will not be tolerated. The Call-In included a presentation describing a vast array of social services and community organizations available for anyone needing assistance to leave a violent lifestyle. Attendees were given two warnings: (1) that the next member of a represented group to shoot someone would cause the entire group to face strict scrutiny from law enforcement and; (2) that law enforcement would continue its normal efforts to prosecution crimes against individual group members even when those groups were not the focus of heightened law enforcement attention. Mr. Garcia attended the SBGVI Call-In on August 28, 2014.
This case was the result of an investigation by the Bureau of Alcohol Tobacco and Firearms along with the South Bend Police Department. This case was prosecuted by Assistant United States Attorney Kenneth M. Hays.
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South Bend Police Officer Charged for Assaulting and Injuring an ArresteeRead the Press Release
WASHINGTON – The Justice Department announced that South Bend, Indiana, Police Department Officer Theodore Robert, 40, has been charged with a criminal civil rights violation for allegedly assaulting and injuring an arrestee at the St. Joseph County Jail. The incident at the jail occurred on May 30, 2010.
According to the indictment, South Bend Police Officer Theodore Robert, while acting under the color of law, willfully deprived G.H., an arrestee, of the right to be free from unreasonable searches and seizures. This includes the right to be free from the use of unreasonable force by a person acting under color of law. Specifically, Officer Robert assaulted G.H., resulting in bodily injury to G.H.
An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty.
The Department of Justice Civil Rights Division enforces a federal provision regarding deprivation of rights under color of law.This provision makes it a crime for a person acting as a law enforcement officer to willfully deprive a person of a right or privilege protected by the Constitution or laws of the United States.
The investigation by the South Bend Resident Agency of the FBI is ongoing. The case is being prosecuted by Trial Attorneys Stephen Curran and Sanjay Patel of the Civil Rights Division, with the assistance of the U.S. Attorney’s Office for the Northern District of Indiana.
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IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE OFFICE OF PUBLIC AFFAIRS AT 202-514-2007.
Pennsylvania Physician Sentenced to Prison for False Tax Returns, Healthcare FraudRead the Press Release
JOHNSTOWN, Pa. - A resident of the Dominican Republic, has been sentenced in federal court to one year and one day in prison and ordered to pay restitution of $121,000 to Highmark Blue Cross/Blue Shield on his conviction of filing false individual and corporate tax returns and health care fraud, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Dr. William R. Acosta.
According to information presented to the court, Acosta, a physician licensed to practice in Pennsylvania, filed three false individual income tax returns and three false corporate income tax returns for calendar years 2001, 2002, and 2003, whereby he failed to report $561,129 in taxable income, resulting in an underpayment of $181,460 in income tax owed to the United States.
In addition, from Aug. 28, 2002, to Jan. 24, 2003, Acosta submitted false and fraudulent claims to Highmark Blue Cross/Blue Shield for levels of services higher than what he actually provided, and he unjustly received payment at the higher level from Highmark.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service/Criminal Investigation and the Department of Health and Human Services/Office of Inspector General for the investigation leading to the successful prosecution of Acosta.
Palm Coast Man Pleads Guilty to Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Timothy Edward McDermott (61, Palm Coast) has pleaded guilty to receiving child pornography over the Internet. He faces a mandatory minimum sentence of 5, up to 20 years, in federal prison, and a potential life term of supervision. A sentencing hearing has not yet been scheduled.
According to court documents, an FBI agent began an undercover investigation to identify individuals that were trading child pornography over the Internet. The agent determined that McDermott was hosting and trading images of child pornography using a peer-to-peer file sharing program. A subsequent search warrant was executed at McDermott’s residence and his computer was seized. During an interview, McDermott admitted that he had downloaded child pornography from a file sharing website. Forensic analysis of McDermott’s computer revealed that it contained 310 images and 68 videos depicting child pornography, including babies being sexually exploited by adults.
This case was investigated by the Federal Bureau of Investigation in Dallas (Texas), Daytona Beach, and Jacksonville, the Flagler County Sheriff’s Office, and the Wheaton (Illinois) Police Department. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
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, 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.
Omaha Man Sentenced to 16 Years Imprisonment for Arson and Insurance FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that on May 14, 2015, Thomas Schropp, 53, of Omaha, Nebraska, was sentenced for arson and insurance fraud. Senior United States District Judge Joseph F. Bataillon sentenced Schropp to a 16-year term of imprisonment. After his release from prison, Schropp will begin a term of supervised release of 3 years. Additionally, he was ordered to make restitution in the amount of $7.6 million to various victims of his crimes, including Sentry Insurance, various banks and the U.S. Small Business Administration.
In November of 2008, Schropp, the owner of PK Manufacturing in Nashville, Nebraska, hired an individual to burn down his business and then after the burning of the building submitted a false insurance claim for approximately $4.3 million.
This case was the result of an investigation by the Washington County Sheriff’s Office and the United States Postal Inspection Service.
New York Woman Admits Child Exploitation and Enters Guilty Pleas to All Ten Counts of Federal IndictmentRead the Press Release
Nicole F. Vaisey, 26, of Hermon, New York, pleaded guilty today to all ten counts of a federal indictment charging her with child exploitation offenses, announced U.S. Attorney Richard S. Hartunian for the Northern District of New York and Special Agent in Charge Andrew T. Vale of the Albany Division for the Federal Bureau of Investigation (FBI). Vaisey will be sentenced by U.S. District Judge Glenn T. Suddaby on Sept. 25, 2015. She has been in custody since she was arrested on Aug. 15, 2014, and her detention was ordered to continue pending sentencing.
Vaisey pleaded guilty to conspiracy to produce child pornography (Count 1) and producing child pornography (Counts 2-10). On May 8, 2015, co-defendant Stephen M. Howells II pleaded guilty to all 21 of the counts of the indictment charging him with conspiracy, production of child pornography and possession of child pornography. Howells will be sentenced by Judge Suddaby on Sept. 18, 2015.
“Nicole Vaisey and Stephen Howells victimized the most vulnerable and innocent among us – young children – and the substantial penalties they face reflect the extreme seriousness of their predatory criminal conduct,” said U.S. Hartunian. “The guilty pleas by Vaisey today, following those by Howells last week, will help to hasten the process of healing and closure for the victims, their families and a community that was shocked by the commission of these horrific crimes. I am grateful for the hard work by all those who toiled to bring them to justice and I especially commend the joint efforts of the FBI, the St. Lawrence County Sheriff’s Department and the New York State Police in conducting an investigation that resulted in both defendants pleading guilty to every charge they faced in federal court.”
“Today’s guilty plea is an important step in ensuring that Nicole Vaisey is never able to abuse a child again,” said Special Agent in Charge Vale. “The crimes she committed with Stephen Howells are horrifying and the FBI and its law enforcement partners will continue to pursue those who engage and attempt to engage in the sexual exploitation of children.”
“With the plea today to the indictment by Nicole F. Vaisey we can start to see an end to this investigation,” said Sheriff Kevin Wells of St. Lawrence County. “Nicole Vaisey is a full co-conspirator with Howells and her plea and sentencing should all be reflective of that. I applaud Sheriff’s Office staff, the FBI and the U.S. Attorney’s Office for all of their hard work on this case. This brings some closure to the legal aspects of the case, but we still need to keep the victims in our thoughts and prayers. The positive part of this is that Howells and Vaisey will not have the ability to victimize a child again.”
Vaisey’s admissions as part of her guilty plea included the following: Beginning in 2013, Vaisey and Howells conspired with one another to engage minors in sexually explicit conduct for the purpose of producing child pornography. Howells obtained drugs through his work as a registered nurse and used the drugs to sedate the child victims, girls ranging in age from five to 11 years old. Vaisey arranged for a girl born in 2006 to spend the night with them and the child was used by Vaisey and Howells to engage in sexually explicit conduct and they produced child pornography depicting that conduct, on six separate dates from Sept. 7, 2013, through May 31, 2014. On several of the dates, Vaisey filmed Howells sexually abusing the child. On two of the dates, Vaisey also sexually abused the child.
Howells arranged for a girl born in 2003 to spend the night with them, and the child was used by Vaisey and Howells to engage in sexually explicit conduct and they produced child pornography depicting that conduct on Nov. 17, 2013, and Dec. 15, 2013. On both dates, Vaisey both filmed Howells sexually abusing the child and sexually abused the child herself.
In 2014, Vaisey and Howells together developed and planned a scheme to kidnap minor children for use in sexually explicit conduct and for the purpose of producing child pornography. Each of them made trips to observe and locate possible children to abduct, including Amish girls. On Aug. 13, 2014, Vaisey and Howells went to an Amish farm stand to abduct two girls, ages 11 and six, by pretending to be customers and using a dog to get the children to the car. Howell forced the children into the car and drugged one of them, and Vaisey drove off. Howells sexually assaulted the children as Vaisey watched and then filmed.
Vaisey faces imprisonment for at least 15 years and up to 30 years on the conspiracy charge, as well as on each of the substantive exploitation counts. The court has the discretion to run all of these sentences concurrently or consecutively to one another. Vaisey will also be required to serve a term of supervised release of a minimum of five years and up to life to follow any term of incarceration and will be required to register as a sex offender.
This case was investigated by the St. Lawrence County Sheriff’s Office and the FBI, with substantial assistance from the New York State Police. It is being prosecuted by Assistant U.S. Attorneys Lisa Fletcher and Tamara Thomson.
The case is brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
New Orleans Jury Convicts Two Doctors, a Nurse and an Office Manager for Roles in $50 Million Fraud SchemeRead the Press Release
A jury in New Orleans convicted four employees of medical service clinics yesterday for their roles in a $50 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Field Office, Special Agent in Charge Mike Fields of the Department of Health and Human Services’ Office of the Inspector General (HHS-OIG) Dallas Regional Office and Louisiana Attorney General James D. “Buddy” Caldwell made the announcement.
Barbara Smith, M.D., 66, of Metairie, Louisiana; Roy Berkowitz, M.D., 69, of Slidell, Louisiana; Beverly Breaux, 67, of New Orleans; and Joe Ann Murthil, 57, of New Orleans, were convicted on all counts after a five-day jury trial before Chief U.S. District Court Judge Sarah S. Vance of the Eastern District of Louisiana.
Evidence introduced at trial showed that the defendants and others carried out a home health care fraud scheme in and around New Orleans through multiple companies over the course of more than 10 years. Smith and Berkowitz falsely claimed that thousands of Medicare recipients were homebound and required nursing or therapy services to be provided in their homes. Breaux was a registered nurse who falsely certified that these patients were homebound, and falsely claimed to have treated patients that she had not seen. Murthil was an office manager and biller at one home health company who assisted with the payment of illegal kickbacks to patient recruiters. Murthil also submitted false claims to Medicare stating that patients were homebound when some of these patients had jobs, had not received services or did not want services. From 2007 through 2014, the companies in this scheme submitted more than $56 million in claims to Medicare, the vast majority of which were fraudulent. Medicare paid approximately $50.7 million on these claims.
Sentencing for the defendants is scheduled for Aug. 26, 2015. In total, 13 defendants have been charged for their roles in this scheme. Nine other defendants previously pleaded guilty.
This case was investigated by the FBI, HHS-OIG and the Louisiana Attorney General’s Medicaid Fraud Control Unit, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Louisiana. This case was prosecuted by Trial Attorneys William Kanellis and Antonio Pozos and Assistant Chief Ben Curtis of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
New Orleans Jury Convicts Two Doctors, a Nurse and an Office Manager for Roles in $50 Million Fraud SchemeRead the Press Release
WASHINGTON – A jury in New Orleans convicted four employees of medical service clinics yesterday for their roles in a $50 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Field Office, Special Agent in Charge Mike Fields of the Department of Health and Human Services’ Office of the Inspector General (HHS-OIG) Dallas Regional Office and Louisiana Attorney General James D. “Buddy” Caldwell made the announcement.
Barbara Smith, M.D., 66, of Metairie, Louisiana; Roy Berkowitz, M.D., 69, of Slidell, Louisiana; Beverly Breaux, 67, of New Orleans; and Joe Ann Murthil, 57, of New Orleans, were convicted on all counts after a five-day jury trial before Chief U.S. District Court Judge Sarah S. Vance of the Eastern District of Louisiana.
Evidence introduced at trial showed that the defendants and others carried out a home health care fraud scheme in and around New Orleans through multiple companies over the course of more than 10 years. Smith and Berkowitz falsely claimed that thousands of Medicare recipients were homebound and required nursing or therapy services to be provided in their homes. Breaux was a registered nurse who falsely certified that these patients were homebound, and falsely claimed to have treated patients that she had not seen. Murthil was an office manager and biller at one home health company who assisted with the payment of illegal kickbacks to patient recruiters. Murthil also submitted false claims to Medicare stating that patients were homebound when some of these patients had jobs, had not received services or did not want services. From 2007 through 2014, the companies in this scheme submitted more than $56 million in claims to Medicare, the vast majority of which were fraudulent. Medicare paid approximately $50.7 million on these claims.
Sentencing for the defendants is scheduled for Aug. 26, 2015. In total, 13 defendants have been charged for their roles in this scheme. Nine other defendants previously pleaded guilty.
This case was investigated by the FBI, HHS-OIG and the Louisiana Attorney General’s Medicaid Fraud Control Unit, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Louisiana. This case was prosecuted by Trial Attorneys William Kanellis and Antonio Pozos and Assistant Chief Ben Curtis of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.justice.gov/criminal-fraud/health-care-fraud-unit.
Midland Woman Sentenced to Federal Prison for Stealing More Than $1 Million from Her EmployerRead the Press Release
In Midland this morning, 54-year-old Margo McKinney was sentenced to five years in federal prison for defrauding her employer of over $1,000,000 announced Acting United States Attorney Richard L. Durbin, Jr.
In addition to the prison term, Senior United States District Judge Robert Junell ordered that McKinney pay $1,078,799.96 restitution to her victim and be placed on supervised release for a period of three years after completing her prison term. Judge Junell also ordered McKinney to surrender to federal authorities by June 10, 2015, to begin serving her prison term.
On February 27, 2015, McKinney pleaded guilty to one count of wire fraud. By pleading guilty, McKinney admitted that from September 2007 until April 2014, she stole money from an Odessa businessman while working as a bookkeeper who had signature authority over one business account. McKinney admittedly wrote company checks to herself and to “cash” to pay the mortgage on her residence, purchase jewelry and for expenses related to her hobby--boarding and training horses for competitions.
This case was investigated by the United States Secret Service. Assistant United States Attorney Austin Berry prosecuted this case on behalf of the Government.
Microprocessor Company that Received National Science Foundation Grants Settles False Claims Act AllegationsRead the Press Release
ALEXANDRIA, VA – Sand 9, Inc., of Cambridge, Massachusetts, has agreed to pay $625,000 to resolve allegations under the False Claims Act that it misrepresented its accounting and timekeeping systems to the National Science Foundation (NSF), based in Arlington, Virginia, in the award and performance of two Small Business Innovation Research (SBIR) grants.
Sand 9 obtained from the NSF the SBIR Phase II grants in February 2009 and March 2011 to support research into micro-electromechanical system timing products for use in wireless and wired communications systems.
The United States alleged that Sand 9 misrepresented its accounting and timekeeping systems to obtain the grants, and failed to maintain complete timekeeping records for its employees while receiving grant funding for labor.
The United States further contended that Sand 9’s progress reports certified compliance with the grant terms, and that certain reports also certified that all of the funds committed to the grant had been expended as designated in the grant budget, even though Sand 9 failed to maintain its accounting system in a manner that tracked expenditures separately by grant or according to categories of the approved grant budget. These progress reports caused the NSF to release incremental payments to Sand 9.
The civil claims settled by Sand 9 and the United States are allegations only; there has been no determination of civil liability.
The case was investigated by Assistant U.S. Attorney Gerard Mene and Special Assistant U.S. Attorney Josh Cavinato of the U.S. Attorney’s Office for the Eastern District of Virginia, along with Investigative Attorney Ginna Ingram and Special Agent Michael Pritchard of the NSF’s Office of Inspector General. Assistant U.S. Attorney Monika Moore and Forensic Auditor Ron Fiorillo of the U.S. Attorney’s Office for the Eastern District of Virginia assisted in the investigation.
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.
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Miami-Dade Police Officer Indicted on Fraud ChargesRead the Press Release
A second Miami-Dade Police Department officer was arrested for participating in a fraud scheme arising out of the operation of a series of credit repair businesses.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and J.D. Patterson, Director, Miami-Dade Police Department (MDPD), made the announcement.
Miami-Dade Police Officer George Price, 42, and Fatima Ruiz, a/k/a “Fatima Cabana,” 45, both of Miami-Dade, made their initial appearances on a superseding indictment yesterday before Magistrate Judge Andrea M. Simonton. Price and Ruiz are both charged by indictment with conspiracy to commit wire fraud, wire fraud, conspiracy to commit mail fraud, and mail fraud, in violation of Title 18, United States Code, Sections 1341, 1343, and 1349, offenses punishable by up to twenty years in prison. A third defendant named in the indictment, Miami-Dade Police Officer Rafael Duran, was previously arrested on April 2, 2015.
According to allegations contained in the superseding indictment, Price, Ruiz, and Duran participated in a scheme to provide false police reports to individuals operating credit repair businesses. A co-conspirator would provide Price with identifying information of credit business customers. Price would then create false police reports, using the customers’ identifying information. The police reports would falsely represent that the customers had reported to the Miami-Dade Police Department facts consistent with having been victims of identity theft. Price would cause the false police reports to become official records of the Miami-Dade Police Department. A member of the conspiracy would cause the false police reports created by Price to be transmitted to credit reporting agencies in order to induce the removal of negative items from the credit histories of the alleged victims identified in the false police reports. Price created the false police reports in order to promote the success of the credit businesses and in return would receive payment from his co-conspirators.
The superseding indictment further alleges that while working at the credit businesses, Ruiz would provide funds to a co-conspirator who acted as an intermediary between Price and the companies. The intermediary in turn would pay Price for his participation in the scheme. According to the superseding indictment, Ruiz would also allegedly transmit to the credit reporting agencies letters claiming that customers of the credit businesses had been victims of identity theft. Ruiz would include false police reports to support the claims made in these letters.
The superseding indictment also alleges that Ruiz conducted a similar scheme while operating her own separate credit repair business. According the superseding indictment, Ruiz would try to repair customer credit by sending letters to the credit reporting agencies claiming that her customers had been victims of identity theft. Ruiz would include false police reports created by Price along with the letters.
U.S. Attorney Wifredo A. Ferrer stated, “This indictment demonstrates that individuals who facilitate the sale of false police reports will be prosecuted accordingly because their fraudulent conduct undermines the public’s trust in the integrity of our law enforcement community.”
“Law enforcement officers are entrusted with a great deal of responsibility and authority and therefore must be held to a high standard,” said George L. Piro, Special Agent in Charge, FBI Miami. “Unfortunately, the actions of a very few corrupt officers undercuts the public’s trust and they must be rooted out. The FBI’s Miami Area Corruption Task Force was assembled and designed to do just that.”
“The Miami-Dade Police Department is committed to upholding the community's trust. Integrity is the hallmark of the Department, and we will continue to work in collaboration with our law enforcement partners to ensure that those who violate that trust are held accountable,” said MDPD Director J.D. Patterson.
Mr. Ferrer thanked the FBI Miami Area Corruption Task Force and MDPD Professional Compliance Bureau. This case is being prosecuted by Assistant U.S. Attorney Michael Davis.
An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.
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.
Metairie Men Sentenced on Federal Firearm ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JOSEPH F. GAGLIANO, age 55, and DOMINICK GULLO, age 72, both from Metairie, were each sentenced today for violating federal firearm laws.
U.S. District Judge Eldon E. Fallon sentenced GAGLIANO to 28 months imprisonment, to be followed by 3 years supervised release. GULLO was sentenced to serve 5 months imprisonment, to be followed by 3 years of supervised release.
GAGLIANO pled guilty to being a convicted felon in possession of a loaded, Ruger model, .22 caliber scope-mounted rifle. GAGLIANO and GULLO both pled guilty to being in possession of an unregistered silencer that fit the .22 caliber rifle. The rifle and silencer, along with other evidence, was recovered from an older model Ford van occupied by both GAGLIANO and GULLO. A Jefferson Parish Sheriff’s Deputy stopped the van on May 7, 2014, after learning the van had a stolen license plate affixed to it. Subsequent investigation by agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives, along with Jefferson Parish Sheriff’s detectives, revealed modifications to the van were made at GAGLIANO’s instruction.
U.S. Attorney Polite praised the work of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Jefferson Parish Sheriff’s Office for their work investigating this matter. Assistant United States Attorneys William J. Quinlan, Jr. and Elizabeth Privitera were in charge of the prosecution.
Mattapan Man Charged with Drug Distribution and Firearms ViolationsRead the Press Release
BOSTON – A Mattapan man was indicted today on drug distribution and firearms charges in U.S. District Court in Boston.
Manuel Pereyra, 27, was indicted on distribution of heroin, possession of a firearm in furtherance of a drug crime, and receipt of a firearm by a person under indictment. Pereyra has been detained since he was arrested on a criminal complaint in April 2015.
According to the charging documents, in March 2015, a cooperating witness told officers that Pereyra was a heroin dealer, and that Pereyra had previously traded heroin to obtain a firearm. As a result, on April 2, 2015, at the direction of law enforcement officers, the cooperating witness purchased heroin from Pereyra at a location in the Old Colony Public Housing Development in South Boston. During that meeting, Pereyra sought to obtain a firearm from the cooperating witness. On April 14, 2015, the cooperating witness and an undercover federal agent met with Pereyra in a hotel room in Dorchester. There, Pereyra gave the undercover federal agent 11 grams of heroin in exchange for a .380 caliber semi-automatic pistol. Pereyra was arrested at the scene moments after the exchange took place and before he was permitted to leave the room.
The charge of distribution of heroin provides for a sentence of no greater than 20 years in prison, a lifetime of supervised release, and a fine of $1 million. The charge of possession of a firearm in furtherance of a drug trafficking crime provides for a minimum mandatory sentence of five years (consecutive to any other sentence) and up to a lifetime in prison, five years of supervised release, and a fine of $250,000. The charge of receipt of a firearm by a person under indictment provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Maryland Woman Pleads Guilty to Federal Heroin Trafficking Charge in New MexicoRead the Press Release
ALBUQUERQUE – Rosalie Theresa Ollivierre, 31, of Baltimore, Md., pleaded guilty this morning in federal court in Albuquerque, N.M., to a heroin trafficking charge under a plea agreement with the U.S. Attorney’s Office.
Ollivierre was arrested on Jan. 12, 2015, at the Amtrak Train Station in Albuquerque after a consensual search of her baggage by DEA agents revealed that she was carrying approximately five kilograms of heroin. Ollivierre subsequently was indicted on Feb. 10, 2015, and charged with possession of heroin with intent to distribute.
During today’s proceedings, Ollivierre pled guilty to a felony information charging her with possession of heroin with intent to distribute. In entering the guilty plea, Ollivierre admitted that on Jan. 12, 2015, while traveling to Baltimore on an Amtrak train and during a stop in Albuquerque, DEA agents recovered bundles containing approximately five kilograms of heroin from her baggage.
At sentencing, Ollivierre faces a statutory maximum penalty of 20 years in federal prison. Ollivierre remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Interdiction Unit of the DEA’s Albuquerque office which focuses on disrupting the flow of narcotics, weapons, and the proceeds of illegal activities as they are smuggled into or through New Mexico in passenger buses, passenger trains, commercial vehicles and automobiles. Assistant U.S. Attorney Shana B. Long is prosecuting the case.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Manhattan U.S. Attorney Settles Civil Fraud Claims Against Westchester Medical Center Arising from Its Violations of the Anti-Kickback Statute and the Stark LawRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today that the United States has settled civil fraud claims under the False Claims Act against WESTCHESTER COUNTY HEALTH CARE CORPORATION d/b/a WESTCHESTER MEDICAL CENTER (“WMC”) related to WMC’s alleged violations of the Anti-Kickback Statute and the Stark Law and submission of costs reports to Medicare seeking reimbursement for charges WMC did not incur. In connection with the settlement, which was approved by U.S. District Judge Lewis A. Kaplan on May 14, 2015, the defendant agreed to pay a total of $18,800,000 to resolve its liabilities, and made admissions as to its conduct.
Manhattan U.S. Attorney Preet Bharara said: “The conduct of Westchester Medical Center is the reason the Anti-Kickback Statute and the Stark Law are so important – they are laws that help to rid the healthcare industry of conflicts that can improperly influence medical judgment, potentially jeopardizing patient care and causing federal healthcare programs to pay for excessive or unnecessary treatments. Hospitals and medical practices have an obligation to patients, and taxpayers, to ensure their arrangements conform to the requirements of these laws.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Westchester Medical Center’s aggressive, intricate kickbacks and other fraud schemes in this case threatened the impartiality of medical referrals, the financial integrity of Medicare, and the public’s trust in the health care system. Our agency will continue to investigate those who seek to cheat federal health care programs.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Westchester Medical Center participated in a coordinated shakedown of Medicare and, by extension, taxpayers. Today, they agreed to pay more than $18 million to resolve their liabilities and enable this government program to serve the seniors it was designed to help.”
According to the complaint-in-intervention filed in Manhattan federal court:
WMC operates a tertiary and quaternary care hospital in Valhalla, New York, and serves as the primary clinical affiliate of New York Medical College. From approximately 2000 through 2007, WMC maintained a financial relationship with Cardiology Consultants of Westchester, P.C. (“CCW”), a cardiology practice formerly operating on WMC’s Valhalla campus, which violated the Anti-Kickback Statute and the Stark Law. In particular, the complaint-in-intervention alleges that WMC advanced monies to CCW to open a practice for the express purpose of generating referrals to the hospital. When CCW began making payments to WMC purportedly repaying the advances, WMC entered into retroactive, no-work consulting agreements under which it paid CCW tens of thousands of dollars. Further, the complaint-in-intervention alleges that around this same time, WMC also began permitting CCW to use WMC’s fellows in CCW’s private office free of charge, contrary to WMC’s historic practice. As a result, WMC’s submission of claims to the Medicare Program for services rendered to patients referred to WMC by CCW’s shareholder physicians violated the False Claims Act. Additionally, during the same time period, through cost reports filed with the Centers for Medicare and Medicaid Services (“CMS”), WMC wrongly sought and obtained reimbursement for certain costs that WMC did not incur and that were not reimbursable under the relevant cost-reporting rules.
Under the Medicare Program, CMS makes payments to hospitals for inpatient and outpatient services after the services are rendered. Hospitals, like all healthcare providers, are required to comply with the Anti-Kickback Statute and the Stark Law, and in both cases, are prohibited from submitting claims tainted by such violations to the Medicare Program.
The Anti-Kickback Statute makes it illegal for a hospital to knowingly and willfully offer or pay remuneration to any person to induce that person to purchase, order, or recommend purchasing or ordering any good or item for which payment may be made under a federal health care program. The Anti-Kickback Statute arose out of congressional concern that remuneration given to those who can influence health care decisions would result in goods and services being provided that are medically unnecessary, of poor quality, or harmful to a vulnerable patient population.
The Stark Law provides that the government will not pay for certain designated health services prescribed by physicians who have improper financial relationships with entities to whom they refer patients because such financial relationships can compromise the physicians’ professional judgment as to whether a service is medically necessary, safe, effective, and of good quality.
As part of today’s settlement, WMC admitted the following conduct:
- Kingston Practice Arrangement. In July 2001, WMC, through its practice management affiliate, Matrix Resources, L.L.C. (“Matrix”), entered into a management agreement with CCW through which WMC agreed to assist CCW in establishing and developing a medical office located in Kingston, New York, with the objective of expanding WMC’s referral base and service area to the upper reaches of the Hudson Valley.
- Pursuant to the terms of the management agreement, which had an initial term of three years, Matrix agreed to provide certain management services for CCW’s Kingston office and to advance working capital to establish and operate the office. Between 2001 and 2002, WMC, through Matrix, advanced to CCW approximately $450,000 to pay for certain costs of the practice, including payment of the monthly management fee due under the management agreement.
- The management agreement provided that CCW would repay the advances at a rate of 8.5 percent interest by the end of the three-year term, with the proviso that the management agreement could be extended for one year if full repayment had not been made.
- In July 2002, CCW and WMC began discussions regarding the termination of the management agreement. At the outset of these discussions, WMC received a memorandum from CCW requesting that WMC, among other things, postpone or eliminate certain interest payments, reduce the applicable interest rate to the then-market rate of 6.5 percent, and extend the repayment period in recognition of CCW’s efforts in developing clinical volume at the Kingston practice and the resulting referral benefit to WMC.
- As of April 25, 2003, CCW and WMC executed a promissory note and associated letter agreement providing for immediate termination of the management agreement and repayment of the then-outstanding advances over five years at an initial interest rate of 4.75 percent (subject to periodic adjustment based upon changes in the prime rate), beginning with an initial repayment of $116,936.15 on April 28, 2003.
- In addition, on April 25, 2003, three days prior to CCW’s initial repayment of the advance, WMC and CCW entered into a two-year consulting agreement, retroactive to July 2, 2002. Pursuant to this agreement, CCW was to provide various consulting services to WMC for an annual amount of $50,000. In April 2004, the contract was amended and extended.
- Between April 2003 and July 2005, WMC paid CCW approximately $190,000 under the original and amended consulting services agreement.
- WMC was not able to locate evidence that CCW performed the contracted services under this agreement.
- During the period of approximately April 2003 through July 2005, CCW referred patients for hundreds of medical procedures at WMC.
- Fellows. For certain years during the relevant period, WMC charged various physician practices for a portion of the salaries and expenses relating to residents and fellows who trained at WMC. During the relevant period, fellows in WMC’s cardiology fellowship program performed certain services within CCW’s private offices as part of their regular clinical rotation.
- Prior to 2003, CCW paid hundreds of thousands of dollars to WMC for the salaries and expenses relating to cardiology fellows.
- Beginning in 2003, CCW ceased paying the fellowship charges for which it was invoiced by WMC; after continuing to bill CCW, but failing to compel payment, WMC wrote off these amounts as uncollectible in April 2007.
- Cost Report Reimbursement. From 2000 through 2007 (“relevant cost report timeframe”), WMC submitted annual Medicare cost reports to the Health Care Financing Administration (“HCFA”), and later CMS, reflecting certain costs, referred to as Direct Graduate Medical Education (“DGME”) and Indirect Medical Education (“IME”), associated with its residency and fellowship programs.
- Pursuant to certain HCFA/CMS regulations applicable to the DGME and IME lines of Medicare cost reports in effect during the relevant cost report timeframe, hospitals were permitted to claim reimbursement for time spent by the residents or fellows at other hospitals and non-hospital settings only if the hospital incurred all or substantially all of the salary and fringe benefit expense of the residents and fellows being rotated through other hospitals or non-hospital settings and complied with other applicable regulatory requirements.
- For the relevant cost report timeframe, WMC included certain costs in its filed cost reports that corresponded to time spent by certain residents and fellows at other hospitals or at non-hospital settings, but did not incur all or substantially all of the costs associated with these fellows and residents, or otherwise did not meet applicable HCFA/CMS regulatory requirements.
WMC also agreed to pay $18,800,000 to resolve its liabilities for this conduct.
* * *
Mr. Bharara praised the investigative work of the agents at HHS-OIG and expressed appreciation for their dedication to the case. Mr. Bharara also praised the investigative work of the FBI.
The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Rebecca C. Martin and Christine Schessler Poscablo are in charge of the case.
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Manhattan U.S. Attorney and FBI Announce Insider Trading Charges Against Managing Director of Investment Bank and His FatherRead 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 Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal Complaint in Manhattan federal court charging SEAN STEWART, a Managing Director at an investment advisory firm headquartered in Manhattan, and his father, ROBERT STEWART, with using inside information to trade and cause another to trade in the securities of five different health care companies, the acquisitions of which were announced between 2011 and 2014. ROBERT STEWART was arrested on conspiracy and insider trading charges this morning at his home in North Merrick, Long Island. SEAN STEWART surrendered to the FBI on the same charges in Middleton, Wisconsin, and is expected to appear in Manhattan federal court on Monday.
Manhattan U.S. Attorney Preet Bharara said: “The Stewarts – father and son alike – allegedly engaged in insider trading together to the tune of more than $1 million. And, as alleged in one instance, the son’s tip to his father became a gift to himself when his father kicked back some of the proceeds of the insider trading to pay for his son’s wedding. I would like to thank our partners at the FBI for their excellent investigative work on this and so many other financial fraud cases.”
Assistant Director-in-Charge Diego Rodriguez said: “The defendants today stand charged with violations of our securities laws. The cash payments and cryptic communication, as alleged in the complaint, show the seriousness of the allegations. We will continue to police our markets to ensure they are legal, fair, and equitable.”
According to the Complaint* unsealed today in Manhattan federal court:
In early 2011, SEAN STEWART, who at the time held the position of Vice President in the Healthcare Investment Banking Group of a global bank headquartered in Manhattan (“Investment Bank A”), began tipping his father, ROBERT STEWART, with nonpublic information about upcoming mergers and acquisitions. The first of these deals involved the acquisition of Kendle International Inc. by INC Research, LLC, which was announced publicly on May 4, 2011. SEAN STEWART worked on the deal, representing Kendle. ROBERT STEWART made about $7,900 in profits on purchases of Kendle stock executed in February and March of 2011. When questioned by the Securities and Exchange Commission about his Kendle trades in May 2013, ROBERT STEWART reported that he used the proceeds of those trades to pay expenses related to SEAN STEWART’s June 2011 wedding.
The second deal about which SEAN STEWART tipped ROBERT STEWART was the acquisition of Kinetic Concepts, Inc. (“KCI”) by Apax Partners, announced on July 13, 2011. Although ROBERT STEWART purchased some stock in KCI based on SEAN STEWART’s tip, he sold that stock before the acquisition was announced, around the same time that SEAN STEWART learned the Financial Industry Regulatory Authority was conducting an inquiry into ROBERT STEWART’s Kendle trading.
Also around this time, in the spring of 2011, ROBERT STEWART expressed a concern to a co-conspirator and cooperating witness not named in the criminal Complaint (“CW-1”) that ROBERT STEWART was “too close to the source” to be trading in KCI stock his own account, and asked CW-1 to make purchases of KCI call options for ROBERT STEWART in CW-1’s brokerage account. CW-1 agreed to do so, and also mirrored for his own benefit the KCI trades that ROBERT STEWART was directing.
When the KCI/Apax Partners deal was announced, ROBERT STEWART and CW-1 reaped profits totaling approximately $107,790. At around this time, ROBERT STEWART told CW-1 that the source of the KCI tip and the earlier Kendle tip had been ROBERT’s son. Later, around the spring of 2012, ROBERT STEWART clarified for CW-1 that the son in question was SEAN STEWART, who worked on the “sell side” on Wall Street.
In October 2011, SEAN STEWART left Investment Bank A. A few months later, he joined an investment banking advisory firm headquartered in Manhattan (“Investment Bank B”) as a Managing Director.
During SEAN STEWART’s tenure with Investment Bank B, based on tips concerning nonpublic acquisition-related information supplied by SEAN STEWART, ROBERT STEWART had CW-1 conduct options trading in advance of the public announcements of three more deals: (1) the acquisition of Gen-Probe Inc. by Hologic, Inc., announced on April 30, 2012; (2) the acquisition, by tender offer, of Lincare Holdings Inc. by Linde AG, announced on July 1, 2012; and (3) the acquisition of CareFusion Corp. by Becton, Dickinson & Co. (“Becton”), announced on October 5, 2014. Investment Bank B represented Hologic in connection with its acquisition of Gen-Probe; Linde in connection with its acquisition of Lincare; and CareFusion in connection with its acquisition by Becton. The profits that ROBERT STEWART and CW-1 reaped from illegal insider trading in advance of the announcements of these three deals totaled over $1 million. In the midst of the scheme, in December 2012, ROBERT STEWART transferred at least $15,000 to SEAN STEWART.
To try to avoid detection for their crimes, ROBERT STEWART and CW-1 refrained from speaking explicitly about their trading over the phone or e-mail, sometimes using “golf”-related code. For example, shortly after the announcement of Lincare’s proposed acquisition by Linde, a German company, ROBERT STEWART wrote to CW-1 that he had seen a news story about the “high cost of golf reservations since a foreign company purchased all- even more expensive than imagined.” Other steps ROBERT STEWART and CW-1 took to avoid detection included trying to discuss their trading at face-to-face meetings and adopting a profit-splitting mechanism that had CW-1 paying ROBERT STEWART his portion of the illegal proceeds in small increments, over time, typically in cash.
In March and April of 2015, CW-1 recorded meetings he had with ROBERT STEWART. During one such meeting, ROBERT STEWART accepted a payment of $2,500 cash from CW-1, which was the balance of the proceeds owed to ROBERT STEWART for profitable trading executed in CW-1’s account in advance of the CareFusion acquisition announcement. Also during this meeting, ROBERT STEWART admitted that SEAN STEWART once chastised him for failing to make use of a tip, saying, “I can’t believe I handed you this on a silver platter and you didn’t invest in it.”
* * *
SEAN STEWART, 34, of New York, New York, and ROBERT STEWART, 60, of North Merrick, New York, have each been charged in the Complaint with one count of conspiracy to commit securities fraud and fraud in connection with a tender offer (Count One), one count of conspiracy to commit wire fraud (Count Two), six counts of securities fraud (Counts Three through Eight), and one count of fraud in connection with a tender offer (Count Nine). The securities fraud, tender offer fraud, and wire fraud conspiracy charges each carries a maximum prison term of 20 years. The charge of conspiracy to commit securities fraud and tender offer fraud carries a maximum prison term of five years. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Bharara praised the investigative work of the FBI and also thanked the Securities and Exchange Commission, which has brought civil actions against the defendant.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Sarah E. McCallum and Brooke E. Cucinella are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
*As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations and every fact described should be treated as an allegation.
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Long-term Care Pharmacy to Pay $31.5 Million to Settle Lawsuit Alleging Violations of Controlled Substances Act and False Claims ActRead the Press Release
WASHINGTON – PharMerica Corporation has agreed to pay the United States $31.5 million to resolve a lawsuit alleging that they violated the Controlled Substances Act by dispensing Schedule II controlled drugs without a valid prescription and violated the False Claims Act by submitting false claims to Medicare for these improperly dispensed drugs, the Justice Department announced today.
“Pharmacies put patients at risk when they dispense Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Department of Justice’s Civil Division. “Today’s settlement demonstrates our commitment to the fight against the misuse of controlled substances.”
PharMerica is a long-term care pharmacy that dispenses medications to residents of long-term care facilities, including nursing homes and skilled nursing facilities. Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act. Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.
The government’s suit alleged that PharMerica pharmacies operating across the country routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician. According to the complaint, PharMerica’s actions violated the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense them, without confirming that a physician had made a medical judgment as to whether the narcotics were necessary and should be administered to the resident. Under the settlement, PharMerica has agreed to pay $8 million to resolve these allegations.
The government’s complaint also alleged that PharMerica violated the False Claims Act by knowingly causing the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs. The False Claims Act imposes treble damages and penalties for the knowing submission of false claims for federal funds. PharMerica has agreed to pay $23.5 million to resolve its alleged False Claims Act violations.
“Today’s significant settlement represents a single but critical significant step toward promoting integrity in the administration of public health programs,” said U.S. Attorney James L. Santelle of the Eastern District of Wisconsin. “This civil litigation and its meaningful resolution demonstrates that our fight against health care fraud is helping to protect all Americans, including the elderly, people with disabilities and other who may be vulnerable to mistreatment and abuse.”The False Claims Act claims resolved by today’s settlement were originally brought by Jennifer Denk, a pharmacist formerly employed by PharMerica, under the whistleblower provisions of the act, which authorize private parties to sue on behalf of the United States and to receive a portion of any recovery. The act permits the United States to intervene and take over the lawsuit, as it did in this case with respect to some of Ms. Denk’s allegations. Ms. Denk will receive $4.3 million as her share of the settlement.
“DEA registrants are responsible to handle controlled substances in compliance with the Controlled Substances Act,” said Special Agent in Charge Dennis Wichern of the Drug Enforcement Administration (DEA) Chicago Field Division. “Failure to do so increases the potential for diversion and jeopardizes the public health and safety”.
“The DEA is committed to investigating organizations that are not in compliance with the Controlled Substances Act,” said Special Agent in Charge Michael J. Ferguson of the DEA New England Field Division. “Our obligation is to ensure public safety and public health and we are committed to working with our law enforcement and regulatory partners nationwide to ensure that these rules and regulations are followed.”
“The legal requirement that narcotics like oxycodone be prescribed by a physician is a crucial patient protection, which is especially important to safeguard the health of the vulnerable elderly and disabled patients in long term care facilities,” said Special Agent in Charge Lamont Pugh of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG). “Our agency is dedicated to protecting the taxpayer-funded Medicare and Medicaid programs as well as the millions of beneficiaries who rely on those programs for their health and well-being.”
As part of the settlement announced today, the settling defendant has also agreed to enter into a corporate integrity agreement with the HHS-OIG, which obligates PharMerica to undertake substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with PharMerica was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the Eastern District of Wisconsin, the U.S. Attorney’s Office of the District of Rhode Island, HHS-OIG and the DEA.
The lawsuit is captioned U.S. ex rel. Denk v. PharMerica Corp., No. 09-cv-720 (E.D. Wis.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
###
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]Long-Term Care Pharmacy to Pay $31.5 Million to Settle Lawsuit Alleging Violations of Controlled Substances Act and False Claims ActRead the Press Release
PharMerica Corporation has agreed to pay the United States $31.5 million to resolve a lawsuit alleging that they violated the Controlled Substances Act by dispensing Schedule II controlled drugs without a valid prescription and violated the False Claims Act by submitting false claims to Medicare for these improperly dispensed drugs, the Justice Department announced today.
“Pharmacies put patients at risk when they dispense Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Department of Justice’s Civil Division. “Today’s settlement demonstrates our commitment to the fight against the misuse of controlled substances.”
PharMerica is a long-term care pharmacy that dispenses medications to residents of long-term care facilities, including nursing homes and skilled nursing facilities. Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act. Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.
The government’s suit alleged that PharMerica pharmacies operating across the country routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician. According to the complaint, PharMerica’s actions violated the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense them, without confirming that a physician had made a medical judgment as to whether the narcotics were necessary and should be administered to the resident. Under the settlement, PharMerica has agreed to pay $8 million to resolve these allegations.
The government’s complaint also alleged that PharMerica violated the False Claims Act by knowingly causing the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs. The False Claims Act imposes treble damages and penalties for the knowing submission of false claims for federal funds. PharMerica has agreed to pay $23.5 million to resolve its alleged False Claims Act violations.
“Today’s significant settlement represents a single but critical significant step toward promoting integrity in the administration of public health programs,” said U.S. Attorney James L. Santelle of the Eastern District of Wisconsin. “This civil litigation and its meaningful resolution demonstrates that our fight against health care fraud is helping to protect all Americans, including the elderly, people with disabilities and other who may be vulnerable to mistreatment and abuse.”
The False Claims Act claims resolved by today’s settlement were originally brought by Jennifer Denk, a pharmacist formerly employed by PharMerica, under the whistleblower provisions of the act, which authorize private parties to sue on behalf of the United States and to receive a portion of any recovery. The act permits the United States to intervene and take over the lawsuit, as it did in this case with respect to some of Ms. Denk’s allegations. Ms. Denk will receive $4.3 million as her share of the settlement.
“DEA registrants are responsible to handle controlled substances in compliance with the Controlled Substances Act,” said Special Agent in Charge Dennis Wichern of the Drug Enforcement Administration (DEA) Chicago Field Division. “Failure to do so increases the potential for diversion and jeopardizes the public health and safety”.
“The DEA is committed to investigating organizations that are not in compliance with the Controlled Substances Act,” said Special Agent in Charge Michael J. Ferguson of the DEA New England Field Division. “Our obligation is to ensure public safety and public health and we are committed to working with our law enforcement and regulatory partners nationwide to ensure that these rules and regulations are followed.”
“The legal requirement that narcotics like oxycodone be prescribed by a physician is a crucial patient protection, which is especially important to safeguard the health of the vulnerable elderly and disabled patients in long term care facilities,” said Special Agent in Charge Lamont Pugh of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG). “Our agency is dedicated to protecting the taxpayer-funded Medicare and Medicaid programs as well as the millions of beneficiaries who rely on those programs for their health and well-being.”
As part of the settlement announced today, the settling defendant has also agreed to enter into a corporate integrity agreement with the HHS-OIG, which obligates PharMerica to undertake substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with PharMerica was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the Eastern District of Wisconsin, the U.S. Attorney’s Office of the District of Rhode Island, HHS-OIG and the DEA.
The lawsuit is captioned U.S. ex rel. Denk v. PharMerica Corp., No. 09-cv-720 (E.D. Wis.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Long-Term Care Pharmacy to Pay $31.5 Million to Settle Lawsuit Alleging Violations of Controlled Substances Act and False Claims ActRead the Press Release
James L. Santelle, United States Attorney for the Eastern District of Wisconsin announced today that PharMerica Corporation has agreed to pay the United States $31.5 million to resolve a lawsuit alleging that they violated the Controlled Substances Act by dispensing Schedule II controlled drugs without a valid prescription and violated the False Claims Act by submitting false claims to Medicare for these improperly dispensed drugs, the Justice Department announced today.
“Pharmacies put patients at risk when they dispense Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Department of Justice’s Civil Division. “Today’s settlement demonstrates our commitment to the fight against the misuse of controlled substances.”
PharMerica is a long-term care pharmacy that dispenses medications to residents of long-term care facilities, including nursing homes and skilled nursing facilities. Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act. Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.
The government’s suit alleged that PharMerica pharmacies operating across the country routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician. According to the complaint, PharMerica’s actions violated the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense them, without confirming that a physician had made a medical judgment as to whether the narcotics were necessary and should be administered to the resident. Under the settlement, PharMerica has agreed to pay $8 million to resolve these allegations.
The government’s complaint also alleged that PharMerica violated the False Claims Act by knowingly causing the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs. The False Claims Act imposes treble damages and penalties for the knowing submission of false claims for federal funds. PharMerica has agreed to pay $23.5 million to resolve its alleged False Claims Act violations.
“Today’s significant settlement represents a single but critical significant step toward promoting integrity in the administration of public health programs,” said U.S. Attorney James L. Santelle of the Eastern District of Wisconsin. “This civil litigation and its meaningful resolution demonstrates that our fight against health care fraud is helping to protect all Americans, including the elderly, people with disabilities and other who may be vulnerable to mistreatment and abuse.”
The False Claims Act claims resolved by today’s settlement were originally brought by Jennifer Denk, a pharmacist formerly employed by PharMerica, under the whistleblower provisions of the act, which authorize private parties to sue on behalf of the United States and to receive a portion of any recovery. The act permits the United States to intervene and take over the lawsuit, as it did in this case with respect to some of Ms. Denk’s allegations. Ms. Denk will receive $4.3 million as her share of the settlement.
“DEA registrants are responsible to handle controlled substances in compliance with the Controlled Substances Act,” said Special Agent in Charge Dennis Wichern of the Drug Enforcement Administration (DEA) Chicago Field Division. “Failure to do so increases the potential for diversion and jeopardizes the public health and safety”.
“The DEA is committed to investigating organizations that are not in compliance with the Controlled Substances Act,” said Special Agent in Charge Michael J. Ferguson of the DEA New England Field Division. “Our obligation is to ensure public safety and public health and we are committed to working with our law enforcement and regulatory partners nationwide to ensure that these rules and regulations are followed.”
“The legal requirement that narcotics like oxycodone be prescribed by a physician is a crucial patient protection, which is especially important to safeguard the health of the vulnerable elderly and disabled patients in long term care facilities,” said Special Agent in Charge Lamont Pugh of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG). “Our agency is dedicated to protecting the taxpayer-funded Medicare and Medicaid programs as well as the millions of beneficiaries who rely on those programs for their health and well-being.”
As part of the settlement announced today, the settling defendant has also agreed to enter into a corporate integrity agreement with the HHS-OIG, which obligates PharMerica to undertake substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with PharMerica was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the Eastern District of Wisconsin, the U.S. Attorney’s Office of the District of Rhode Island, HHS-OIG and the DEA.
The lawsuit is captioned U.S. ex rel. Denk v. PharMerica Corp., No. 09-cv-720 (E.D. Wis.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
# # # #
Las Cruces Resident Pleads Guilty to Federal Narcotics Trafficking and Firearms ChargesRead the Press Release
ALBUQUERQUE – Eric G. Acosta, 28, a resident of Las Cruces, N.M., pled guilty today in federal court to methamphetamine trafficking and firearms charges.
Acosta and co-defendant Christopher J. Cleveland, 35, also of Las Cruces, were arrested in July 2014, on a criminal complaint charging them with possession of methamphetamine with intent to distribute, using a firearm in furtherance of a drug trafficking crime and possession of a firearm by a convicted felon. The complaint alleged that during a routine traffic stop on June 23, 2014, officers of the Las Cruces Police Department discovered approximately 889.2 grams of methamphetamine, a firearm and drug paraphernalia inside a vehicle driven by Acosta and in which Cleveland was a passenger. It further alleged that Cleveland and Acosta had traveled from Arizona, where they obtained the methamphetamine, to Las Cruces in Doña Ana County, N.M., where they intended to distribute the drugs.
An indictment subsequently was filed on Oct. 16, 2014, charging Acosta and Cleveland with a methamphetamine trafficking conspiracy and possession of methamphetamine with intent to distribute. The indictment also charged each of the two men with being a felon in possession of a firearm. The two men were charged with committing these crimes on June 23, 2014, in Doña Ana County. At the time, Acosta and Cleveland each was prohibited from possessing firearms or ammunition because each had previously been convicted a felony offense.
During today’s proceedings, Acosta pled guilty to the conspiracy charge, the substantive methamphetamine trafficking charge, and to being a felon in possession of a firearm. At sentencing, he faces a statutory mandatory minimum of ten years in federal prison. Acosta remains in custody pending his sentencing hearing, which has yet to be scheduled.
Cleveland has entered a not guilty plea to the indictment and remains in custody pending trial. Allegations in complaints and indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Las Cruces office of the FBI and the HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force and is being prosecuted by Assistant U.S. Attorneys Maria Y. Armijo and Selesia Lee Winston of the U.S. Attorney’s Las Cruces Branch Office.
The HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force is comprised of officers from the Las Cruces Police Department, the Doña Ana County Sheriff’s Office, the FBI, HSI and the New Mexico State Police. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Luis Percina Sentenced to 120 Months for Possession with Intent to Distribute 50 Grams or More of MethamphetamineRead the Press Release
HAMMOND – United States Attorney for the Northern District of Indiana, David Capp, announced that Luis Pecina, 34, of Phoenix, AZ, was sentenced today for possession with intent to distribute 50 grams or more of methamphetamine.
Percina was sentenced to 10 years (120 months) imprisonment and 8 years of supervised release.
According to documents filed in this case, police stopped Pecina’s vehicle in the 3800 block of 179th Street, Hammond, Indiana on November 14, 2013. Officers searched the vehicle and found more than three hundred grams of methamphetamine. After waiving his rights, Percina admitted to officers that the methamphetamine was his and that his intent was to sell the methamphetamine to another individual.
This case was investigated by the Drug Enforcement Administration and prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
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Keshena Man Sentenced to 44 Months in Prison for Robbery on the Menominee ReservationRead the Press Release
United States Attorney James L. Santelle announced that Richard A. James Jr., (age: 23), was sentenced on May 8, 2015, to 44 months of imprisonment, followed by a three year term of supervised release. The sentence was the result of a guilty plea by James on January 26, 2015, to Count One of a federal indictment charging him with one count of robbery of a convenience store and three counts of assault with a dangerous weapon with intent to do bodily harm.
The investigation revealed that on July 29, 2014, James entered Martin’s Hillstop convenience store on the Menominee Reservation, held a store clerk and others at knife point, and demanded liquor and cigarettes. After getting the demanded items, James ran from the store and was confronted by officers. James threatened the officers with the knife and led the officers on a chase down the roadway, halting traffic. Menominee Tribal police officers and Menominee County deputies eventually took James into custody.
This case was investigated by the Menominee Tribal Police and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Benjamin L. Whittemore.
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Jury Finds Hillsboro Man Guilty on Federal Firearm ChargesRead the Press Release
WICHITA, KAN. – A federal jury Thursday convicted a Hillsboro man on federal firearms charges, U.S. Attorney Barry Grissom said.
David G. Nicholas, Jr., 44, Hillsboro, Kan., was convicted on three counts of unlawful possession of a firearm following a felony conviction.
During trial, prosecutors presented evidence that Nicholas was a parole absconder in October 2013 when the U.S. Marshals Service arrested him in Marion County, Kan. At the time, he possessed a .22-caliber handgun and a .30-06 caliber rifle and ammunition.
Sentencing is set for Aug. 6. He faces a maximum penalty of not less than 15 years in federal prison a fine up to $250,000 on each count. Grissom commended the U.S. Marshals Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Jason Hart for their work on the case.
Judge Orders Injunction to Stop Sale of Dangerous MagnetsRead the Press Release
A federal judge today ordered a Colorado company to stop selling hazardous high-powered magnets that had been the subject of a product recall by their manufacturer as part of an agreement with the Consumer Product Safety Commission (CPSC), the Justice Department announced. U.S. District Court Judge Christine M. Arguello of the District of Colorado found that Zen Magnets LLC and its owner, Shihan Qu, were violating the Consumer Product Safety Act by selling magnets that were purchased from a New Jersey company shortly before the magnets were recalled.
Last week, the department filed a complaint seeking injunctive relief and civil penalties against Zen Magnets and Qu.
The complaint alleged that Zen Magnets purchased 917,000 tiny, high-powered magnets from a New Jersey firm one week before that firm signed an agreement with the CPSC to recall the magnets. Once the magnets were recalled, their sale by any party was prohibited. Nonetheless, despite repeated warnings by the CPSC, Qu’s Denver-based company continued to sell the magnets.
The magnets are sold in sets and generally marketed as desk toys. When swallowed by children or teens, the magnets clamp together and can cause serious internal injuries.
“The Department of Justice will continue to work with the Consumer Product Safety Commission to enforce our consumer protection laws and protect consumers from dangerous products,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Efforts to evade the law and sell products that have already been recalled will not be tolerated.”
In issuing the preliminary injunction, Judge Arguello found a substantial likelihood that the defendants had violated the Consumer Product Safety Act and a cognizable danger of recurring violations in the future. The ruling said that Zen Magnets “has essentially turned its pledge to continue to defy the CPSC into a marketing campaign” and has “openly vowed” not to stop selling the recalled magnets absent an injunction. Thursday’s ruling followed a three-hour evidentiary hearing on Monday in Denver.
“Zen Magnets insisted on selling a dangerous product to the public, even after repeatedly being warned to stop by the Consumer Product Safety Commission,” said U.S. Attorney John Walsh of the District of Colorado. “The magnets in this case can cause serious harm to people – particularly to children – if swallowed, by causing rips in the digestive system leading to grave infection. Given the company’s refusal to stop selling the product, this office, working with the Consumer Product Safety Commission, did not hesitate to seek a court order to protect the public. Today’s order is a victory for public safety, and for the safety of young children.”
Zen Magnets is separately challenging a rule issued by the CPSC that went into effect April 1, but was temporarily stayed until April 20. The rule requires magnets or magnet sets to be large enough so that they cannot be swallowed or weak enough so they are unlikely to clamp together if ingested.
In issuing that rule, the CPSC noted the risk of injury that the rule addresses. When a person ingests more than one magnet from a magnet set, there is potential for damage to intestinal tissue. The magnets are attracted to each other in the digestive system, damaging the tissue that becomes trapped between the magnets. In several incidents, surgery was required to remove magnets that children had swallowed.
The rule, which Zen Magnets is challenging before the 10th Circuit Court of Appeals, applies only prospectively. The preliminary injunction issued by Judge Arguello applies to the 917,000 tiny magnets that Zen Magnets acquired in July 2014, shortly before the manufacturer agreed to recall the magnets, and all other magnets that were commingled with the recalled magnets.
The case is being handled by Trial Attorney Patrick Jasperse of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Jamie Mendelson of the District of Colorado.
Judge Orders Injunction to Stop Sale of Dangerous MagnetsRead the Press Release
DENVER – A federal judge today ordered a Colorado company to stop selling hazardous high-powered magnets that had been the subject of a product recall by their manufacturer as part of an agreement with the Consumer Product Safety Commission (CPSC), the Justice Department announced. U.S. District Court Judge Christine M. Arguello of the District of Colorado found that Zen Magnets LLC and its owner, Shihan Qu, were likely violating the Consumer Product Safety Act by selling magnets that were purchased from a New Jersey company shortly before the magnets were recalled.
Last week, the department filed a complaint seeking injunctive relief and civil penalties against Zen Magnets and Qu.
The complaint alleged that Zen Magnets purchased 917,000 tiny, high-powered magnets from a New Jersey firm one week before that firm signed an agreement with the CPSC to recall the magnets. Once the magnets were recalled, their sale by any party was prohibited. Nonetheless, despite repeated warnings by the CPSC, Qu’s Denver-based company continued to sell the magnets.
The magnets are sold in sets and generally marketed as desk toys. When swallowed by children or teens, the magnets clamp together and can cause serious internal injuries.
“Zen Magnets insisted on selling a dangerous product to the public, even after repeatedly being warned to stop by the Consumer Product Safety Commission,” said U.S. Attorney John Walsh of the District of Colorado. “The magnets in this case can cause serious harm to people – particularly to children – if swallowed, by causing rips in the digestive system leading to grave infection. Given the company’s refusal to stop selling the product, this office, working with the Consumer Product Safety Commission, did not hesitate to seek a court order to protect the public. Today’s order is a victory for public safety, and for the safety of young children.”
In issuing the preliminary injunction, Judge Arguello found a substantial likelihood that the defendants had violated the Consumer Product Safety Act and a cognizable danger of recurring violations in the future. The ruling said that Zen Magnets “has essentially turned its pledge to continue to defy the CPSC into a marketing campaign” and has “openly vowed” not to stop selling the recalled magnets absent an injunction. Thursday’s ruling followed a three-hour evidentiary hearing on Monday in Denver.
“The Department of Justice will continue to work with the Consumer Product Safety Commission to enforce our consumer protection laws and protect consumers from dangerous products,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Efforts to evade the law and sell products that have already been recalled will not be tolerated.”
Zen Magnets is separately challenging a rule issued by the CPSC that went into effect April 1, but was temporarily stayed until April 20. The rule requires magnets or magnet sets to be large enough so that they cannot be swallowed or weak enough so they are unlikely to clamp together if ingested.
In issuing that rule, the CPSC noted the risk of injury that the rule addresses. When a person ingests more than one magnet from a magnet set, there is potential for damage to intestinal tissue. The magnets are attracted to each other in the digestive system, damaging the tissue that becomes trapped between the magnets. In several incidents, surgery was required to remove magnets that children had swallowed.
The rule, which Zen Magnets is challenging before the 10th Circuit Court of Appeals, applies only prospectively. The preliminary injunction issued by Judge Arguello applies to the 917,000 tiny magnets that Zen Magnets acquired in July 2014, shortly before the manufacturer agreed to recall the magnets, and all other magnets that were commingled with the recalled magnets.
The case is being handled by Assistant U.S. Attorney Jamie Mendelson of the District of Colorado and Trial Attorney Patrick Jasperse of the Civil Division’s Consumer Protection Branch.