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14 May 2015
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.
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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.”
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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.
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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.
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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.
Joplin, Springfield Men Indicted for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Joplin, Mo., man and a Springfield, Mo., man have been indicted by a federal grand jury, in separate and unrelated cases, for receiving and distributing child pornography over the Internet.
USA v. Childers
Jason L. Childers, 38, of Joplin, was charged in a five-count indictment returned by a federal grand jury in Springfield, Mo., on Wednesday, May 13, 2015.
The federal indictment alleges that Childers received and distributed child pornography over the Internet on four separate occasions in October and December 2014. Childers is also charged with possessing child pornography on April 7, 2015.
The indictment also contains a forfeiture allegation, which would require Childers to forfeit to the government any property used to commit the alleged offenses, including a computer tower, two laptop computers, two cell phones and various digital storage media.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull II. It was investigated by the Southwest Missouri Cyber Crime Task Force, the FBI and the Joplin, Mo., Police Department.
USA v. Greinke
Michael Greinke, 27, of Springfield, was charged in an indictment returned by a federal grand jury in Springfield on Wednesday, May 13, 2015.
The federal indictment alleges that Greinke received and distributed child pornography over the Internet between Jan. 1, 2014, and April 6, 2015.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Southwest Missouri Cyber Crime Task Force and the York Regional Police Service in Ontario, Canada.
Dickinson cautioned that the charges contained in these indictments are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Iraqi-born U.S. Citizen Arrested for Making False Statement to the FBIRead the Press Release
DALLAS – A Mesquite, Texas, man was arrested earlier today by the FBI on a criminal complaint charging him with making a false statement to the FBI, announced Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney John Parker of the Northern District of Texas and Special Agent in Charge Thomas M. Class Sr. of the FBI’s Dallas Field Office.
Bilal Abood, 37, an Iraqi-born naturalized U.S. citizen who migrated to the United States in 2009, made his initial appearance in federal court in Dallas this afternoon. Abood will remain in custody pending a probable cause and detention hearing set for May 15, 2015.
According to the complaint, on March 29, 2013, Abood attempted to depart the United States from Dallas Fort Worth International Airport, but was not allowed to board the flight. While at the airport, FBI agents asked Abood about his planned travel, and he initially advised agents that he was merely planning to travel to Iraq to visit family. During a subsequent interview, agents asked Abood again about his attempted travel — specifically asking if he intended to go to Syria to fight, and Abood stated that was not his intent. Later in that interview, however, Abood admitted that his intent on March 29, 2013, was to go to Syria to fight against the Assad regime, claiming he wanted to fight with the Free Syrian Army (FSA).
On approximately April 29, 2013, Abood left the United States through Mexico and traveled through various countries in order to get to Turkey. Upon Abood’s return to the United States on Sept. 16, 2013, the FBI interviewed him again. In that interview, Abood admitted traveling to Syria through Turkey, and claimed that he went there to fight with the FSA and that he had stayed in an FSA camp. Abood stated that he became frustrated with a lack of action and wanted to return to the United States. He denied ever providing financial support to al-Nusrah Front (ANF), the Islamic State of Iraq and the Levant (ISIL) or any other terrorist organization.
A review of Abood’s computer on July 9, 2014, pursuant to a federal search warrant, revealed Abood pledged an oath to Abu Bakr al-Baghdadi, the leader of ISIL, on June 19, 2014. The search warrant also revealed that Abood had been on the internet viewing ISIL atrocities such as beheadings, and had used his twitter account to tweet and retweet information on al-Baghdadi.
On April 14, 2015, FBI agents went to Abood’s residence to return his computer that was seized in the 2014 search warrant. Abood admitted that he knew it was a crime to lie to an FBI agent, and Abood denied to the agents that he had ever pledged allegiance to al-Baghdadi.
The maximum statutory penalty for the offense charged in the complaint is eight years in federal prison and a $250,000 fine.
A complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The matter is being investigated by FBI’s Dallas Division. The prosecution is being handled by the U.S. Attorney’s Office for the Northern District of Texas, with assistance from the National Security Division’s Counterterrorism Section.
Iraqi-Born U.S. Citizen Arrested for Making False Statement to the FBIRead the Press Release
Defendant Allegedly Lied About Pledging Allegiance to Self-Proclaimed Leader of ISIL
A Mesquite, Texas, man was arrested earlier today by the FBI on a criminal complaint charging him with making a false statement to the FBI, announced Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney John Parker of the Northern District of Texas and Special Agent in Charge Thomas M. Class Sr. of the FBI’s Dallas Field Office.
Bilal Abood, 37, an Iraqi-born naturalized U.S. citizen who migrated to the United States in 2009, made his initial appearance in federal court the Northern District of Texas this afternoon. Abood will remain in custody pending a probable cause and detention hearing set for May 15, 2015.
According to the complaint, on March 29, 2013, Abood attempted to depart the United States from Dallas Fort Worth International Airport, but was not allowed to board the flight. While at the airport, FBI agents asked Abood about his planned travel, and he initially advised agents that he was merely planning to travel to Iraq to visit family. During a subsequent interview, agents asked Abood again about his attempted travel – specifically asking if he intended to go to Syria to fight, and Abood stated that was not his intent. Later in that interview, however, Abood admitted that his intent on March 29, 2013, was to go to Syria to fight against the Assad regime, claiming he wanted to fight with the Free Syrian Army (FSA).
On approximately April 29, 2013, Abood left the United States through Mexico and traveled through various countries in order to get to Turkey. Upon Abood’s return to the United States on Sept. 16, 2013, the FBI interviewed him again. In that interview, Abood admitted traveling to Syria through Turkey, and claimed that he went there to fight with the FSA and that he had stayed in an FSA camp. Abood stated that he became frustrated with a lack of action and wanted to return to the United States. He denied ever providing financial support to al-Nusrah Front (ANF), the Islamic State of Iraq and the Levant (ISIL) or any other terrorist organization.
A review of Abood’s computer on July 9, 2014, pursuant to a federal search warrant, revealed Abood pledged an oath to Abu Bakr al-Baghdadi, the leader of ISIL, on June 19, 2014. The search warrant also revealed that Abood had been on the internet viewing ISIL atrocities such as beheadings, and had used his twitter account to tweet and retweet information on al-Baghdadi.
On April 14, 2015, FBI agents went to Abood’s residence to return his computer that was seized in the 2014 search warrant. Abood admitted that he knew it was a crime to lie to an FBI agent, and Abood denied to the agents that he had ever pledged allegiance to al-Baghdadi.
The maximum statutory penalty for the offense charged in the complaint is eight years in federal prison and a $250,000 fine.
A complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The matter is being investigated by FBI’s Dallas Division. The prosecution is being handled by the U.S. Attorney’s Office of the Northern District of Texas, with assistance from the National Security Division’s Counterterrorism Section.
Bilal Abood Complaint
Indictment: Lawrence Man’s Simple Fraud Scheme Racked up $143,000 in Credit Card RewardsRead the Press Release
TOPEKA, KAN. – A Lawrence man has been charged with devising a simple – and illegal – scheme that allowed him to collect more than $143,000 in credit card rewards, U.S. Attorney Barry Grissom said today.
Jawad Obaid, 31, Lawrence, Kan., was indicted Wednesday on ten counts of wire fraud. The indictment alleges he obtained credit cards with Capital One, Chase and U.S. Bank and accessed their rewards program Web sites for the purpose of making Internet purchases from businesses selling goods and services on the sites. In that manner, he generated tens of thousands of reward points from the credit card companies. He cancelled the purchases within 24 hours and used the reward points from the cancelled purchases to redeem cash awards in the form of checks and direct deposits to his accounts.
If convicted, he faces a maximum penalty 30 years in federal prison and a fine up to $250,000 on each count. Homeland Security Investigations investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
OTHER FEDERAL GRAND JURY INDICTMENTS
John Michael Devosha, 25, who is in federal custody, was charged in a superseding indictment with two counts of carjacking, one count of unlawful possession of a firearm and two counts of using a firearm during a carjacking. The crimes are alleged to have occurred Oct. 22 in Kansas City, Kan., and Oct. 25, 2013, on the Prairie Band Potawatomi Reservation.
If convicted, he faces a maximum penalty of 15 years in federal prison and a fine up to $250,000 on each carjacking count, a maximum penalty of 10 years and a fine up to $250,000 on the possession charge, and a penalty of not less than five years on each of the other two counts. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
Tegan C. Gulley, 35, Wichita, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred May 7, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of ten years in federal prison and a fine up to $250,000. The Wichita Police Department investigated. Assistant U.S. Attorney Matt Treaster is prosecuting.
Domingo Uriarte, Jr., 38, Kansas City, Kan., is charged with one count of possession with intent to distribute methamphetamine. The crime is alleged to have occurred April 28, 2015, in Kansas City, Kan.
If convicted, he faces a penalty of not less than 10 years and a fine up to $10 million. The Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Trent Krug is prosecuting.
Ivan Joseph Soto, 27, Topeka, Kan., and Mauricio Aguilera, 24, San Bernadino, Calif, are charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. The crimes are alleged to have occurred April 20, 2015, in Topeka, Kan.
If convicted, they face a penalty of not less than 10 years and a fine up to $10 million on each count. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Greg Hough is prosecuting.
Jerome Birdsong, 33, Kansas City, Kan., is charged with one count of conspiracy to possess with intent to distribute methamphetamine, one count of maintaining a residence at 2942 N. 47th Terrance in Kansas City, Kan., in furtherance of drug trafficking, and one count of unlawful possession of ammunition following a felony conviction. The crimes are alleged to have occurred in 2013 in Kansas City, Kan.
If convicted, he faces a penalty of not less than 10 years in federal prison and a fine up to $10 million on the conspiracy charge, a maximum penalty of 20 years and a fine up to $500,000 on the charge of maintaining a residence for drug trafficking and a maximum penalty of 10 years and a fine up to $250,000 on the ammunition charge. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Indictment Charges Fake Cops, Real Robbers in Robbery ConspiracyRead the Press Release
PHILADELPHIA – An indictment was unsealed today, charging a Philadelphia-based group with conspiracy to commit violent robberies, including an attempted robbery of a Center City jewelry store in which the defendants impersonated police officers. Additionally, the indictment alleges that the robbers tracked their target victims with GPS devices to rob them in their homes. The indictment charges 16 defendants with conspiring to commit Hobbs Act Robbery and various other charges. Various defendants are charged in violent home invasion robberies or attempted robberies that included shooting one victim, water boarding and pouring boiling water on another, and, in one incident, assisting the scheme by playing the role of a robbery victim.
The charges were announced today by First Assistant United States Attorney Louis Lappen and Acting Special Agent-in-Charge Kelly D. Brady with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Charged are: Khalil Smith, Mark Woods, Marcus Bowens, Michael Queen, Terrace Munden, Robert Hartley, Hasan Chaney, Levern Jackson, Braheim Ballard, William Jefferson, Daniel Hayes, Jeffrey Bellamy, Romel Anthony, Eric Scott, Brandon Segers, all of Philadelphia, PA, and Jamal Doggett, of Willingboro, NJ.
According to the indictment, between September 2012 and April 29, 2014, in Philadelphia, Ambler, Hatfield, and elsewhere, the defendants conspired to commit robbery to obtain drugs, the proceeds from drug sales, jewelry and money from their victims by means of actual and threatened force, violence, and fear of injury. On July 15, 2013, the indictment alleges that Daniel Hayes and Brandon Segers entered the Platinum Jewelers, at 1136 Market Street, Philadelphia, wearing disguises and posing as customers. Smith and Marcus Bowens, it is alleged, entered the store posing as police officers. Smith allegedly pointed a gun at the store clerk and yelled “police,” while defendants Mark Woods, Michael Queen and Jeffrey Bellamy kept watch outside and/or monitored a police scanner. The defendants fled the scene after police were notified by a store clerk who pushed an alarm button.
In a previous alleged incident, on September 3, 2012, Eric Scott was among the guests in the victim’s Ambler home when he notified Smith and William Jefferson that they could rob the home. The indictment alleges that Smith and Jefferson entered the home wearing masks and armed with guns, which they pointed at the homeowner and guests, including Scott who pretended to be a victim. They tied up the victims, stole jewelry, cash, and a small amount of cocaine.
The indictment charges that between November 2013 and April 2014, Smith, Bowens, and a combination of other defendants committed four other home invasion robberies or robbery attempts. In November of 2013, Smith and Queen allegedly placed a GPS tracking device on vehicles driven by their target victim to find his home in Hatfield, PA. When the victim arrived home, he was met by the defendants who forced him inside at gunpoint where he was restrained, threatened, and assaulted. It is further alleged that Smith, Bowens, Queen, Doggett, and Ballard stole guns, electronics, and the victim’s BMW.
In January 2014, Smith, Bowens, Woods, Jackson, and Bellamy robbed a residence in Philadelphia of half a kilogram of cocaine, $10,000, and other items, while restraining, threatening, and assaulting the occupant.
In April 2014, defendants Smith, Bowens, Woods, Jackson, Bellamy, Munden, Hartley, and Chaney allegedly forced two victims to strip naked while robbing their Philadelphia home, and threatened to sodomize and kill them. They water boarded one victim and poured boiling water on him before stealing jewelry, an iPad and a 2009 Toyota Camry.
Later that month, defendants Smith, Bowens, Woods, Munden, Bellamy and Hartley tracked a Philadelphia resident they believed to be a drug dealer. They burglarized the home, stealing jewelry and electronics. Believing they missed the drugs and drug money, they returned a few days later and held two victims at gunpoint, shooting one of them before fleeing empty handed.
“These defendants are charged with engaging in a brazen crime spree of robbery and violence,” said Lappen. “They terrorized their victims, stole their money and property, and had the audacity to impersonate police officers in an effort to perpetrate their crimes. If convicted, the defendants face mandatory prison terms and lengthy guideline sentences which will ensure that they are off the street for a very long time.”
“These 16 defendants allegedly committed serious acts of violence that included armed home invasions, a shooting, and brutal physical torture,” said Brady. “They were well-organized, well-planned and well-armed. Now, this violent pattern of robberies has ended and these defendants face serious prison terms if convicted. ATF is committed to working with our law enforcement partners to reduce violent crime and increase public safety.”
The investigation was led by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, with assistance from the Philadelphia Police Department, the Hatfield Township Police Department and the Whitpain Township Police Department. It is being prosecuted by Assistant United States Attorneys Salvatore Astolfi and Jeanine Linehan.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Illinois Man Sentenced to Prison for Shooting at a HomeRead the Press Release
A man who fired several rounds from a handgun at a house after a dispute with its occupants was sentenced yesterday to two and a half years in federal prison.
Marcus Wilson, age 24, from Carbondale, Illinois, received the prison term after a January 15, 2015, guilty plea to possession of a firearm as an unlawful drug user.
In a plea agreement, Wilson admitted that on May 8, 2014, he purchased a .40 caliber handgun and ammunition from a Cedar Rapids gun shop. In purchasing the firearm, Wilson lied on the background check paperwork, falsely claiming that he was not an unlawful user of controlled substances. In fact, Wilson had been unlawfully using cocaine, marijuana, and PCP for at least three years prior to the purchase. The day after Wilson purchased the handgun, he visited a girlfriend at her friend’s home in Cedar Rapids, where Wilson got into a verbal altercation with the occupants of the home. When forced to leave the home, Wilson pulled out his handgun and wildly fired several rounds at the home, hitting it and a neighboring house. Both homes were occupied, including by children, and at least one round penetrated the exterior wall of a home. When police arrived moments later in response to the gunfire and found Wilson outside the home, he falsely claimed he had been shot at by occupants of the home. This compelled the police to remove the occupants at gunpoint only to discover that Wilson had lied to them.
Wilson was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Wilson was sentenced to thirty months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. Wilson is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney C.J. Williams and investigated by the Federal Bureau of Investigation and the Cedar Rapids Police Department as part of the FBI Safe Streets Taskforce, a unit focused on ending gun violence in the Northern District of Iowa.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-0083.
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IRS Employee Charged with Theft of Government FundsRead the Press Release
PHILADELPHIA - Robin Wood, 45 of Philadelphia, Pennsylvania was charged today by Indictment with wire fraud and theft of approximately $45,312 in government funds, announced United States Attorney Zane David Memeger.
According to the indictment, for approximately 100 weeks between November 10, 2007, and July 3, 2010, the defendant received unemployment compensation, for which she fraudulently claimed each week she was eligible when, in fact, she was employed by the Internal Revenue Service and receiving a salary.
If convicted the defendant faces a maximum possible statutory sentence of 20 years in prison, restitution, up to three years of supervised release, and a $300 special assessment.
The case was investigated by the Treasury Inspector General for Tax Administration and is being prosecuted by Assistant United States Attorney Andrea G. Foulkes.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Imperial Gangster Jason Medina Sentenced to 325 Months ImprisonmentRead the Press Release
HAMMOND – United States Attorney for the Northern District of Indiana, David Capp, announced that Jason Medina, 31, of East Chicago, Indiana, was sentenced today to 325 months imprisonment and 3 years supervised release for conspiracy to participate in racketeering and attempted murder in furtherance of racketeering.
Jason Medina aka “Burns” a member of the Imperial Gangsters Street Gang was part of a 24-defendant indictment alleging that members of the gang committed 13 homicides in East Chicago, Hammond and Gary, Indiana. The indictment charged a decade-long racketeering conspiracy that involved 19 additional attempted murders and large scale distribution of cocaine and marijuana.
On January 14, 2015, Medina plead guilty to a conspiracy to participate in racketeering activity. Medina’s involvement in this RICO conspiracy included committing the first degree murder of Guadalupe Trevino. This murder occurred on July 24, 2005 in Gary, Indiana. In addition to pleading guilty to the Trevino murder, Medina also pled guilty to an attempted murder in furtherance of racketeering activity that occurred on June 6, 2011.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI and the East Chicago Police Department, with assistance from the Gary Police Department, the Hammond Police Department and the Lake County High Intensity Drug Trafficking Area Program. This case is being prosecuted by Assistant U.S. Attorney David J. Nozick of the Northern District of Indiana and Trial Attorney Bruce R. Hegyi of the Criminal Division’s Capital Case Section.
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Honduran National Sentenced for Illegally ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ANGEL CORNEJO-MORENO, age 44, a Honduran citizen, was sentenced today after having previously pled guilty to a one-count Indictment for illegal reentry of a removed alien.
U.S. District Judge Mary Ann Vial Lemmon sentenced CORNEJO-MORENO to five months imprisonment followed by one year of supervised release, and a $100 special assessment. Following his incarceration, CORNEJO-MORENO will be surrendered to the custody of the U.S. Immigration & Customs Enforcement for removal proceedings.
According to court documents, on or about December 8, 2014, Jefferson Parish Sheriff deputies arrested CORNEJO-MORENO for driving while intoxicated and driving without a license. The deputies then contacted agents of United States Immigration & Customs Enforcement (ICE), who discovered that CORNEJO-MORENO was a Honduran national who had been previously deported from the United States in 2003 and 2009. ICE agents confirmed that CORNEJO-MORENO had again illegally reentered the United States without inspection by a United States Immigration official. Agents placed an ICE detainer on CORNEJO-MORENO in order to hold him for criminal prosecution.
U.S. Attorney Polite praised the work of the Immigration and Customs Enforcement Agency in investigating this matter. Assistant United States Attorney Rick Veters is in charge of the prosecution.
Honduran Man Guilty of Illegally Reentering the United StatesRead the Press Release
Concord, NH – Florentino Vasquez-Rodriguez of Honduras, pleaded guilty today in United States District Court for the District of New Hampshire to illegally reentering the United States after having been previously deported, announced Acting United States Attorney Donald Feith.
Vasquez-Rodriguez was arrested in Texas in 2004 by border patrol authorities and deported to Honduras. In March 2015, agents of the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement received information that Vasquez-Rodriguez was residing in Nashua, New Hampshire. After a brief investigation, Vasquez-Rodriguez was traced to a residence on Bridge Street in Nashua. When approached by immigration officials, Vasquez-Rodriguez initially claimed to be from Puerto Rico. Shortly thereafter he admitted he was from Honduras and did not possess documents that would have permitted him to legally reside in the United States. Fingerprint analysis confirmed that Vasquez-Rodriguez was the same individual who had been previously deported in 2004.
A sentencing hearing is scheduled on August 20, 2015. Vasquez-Rodriguez will be deported after serving his sentence.
The U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement investigated this case. Assistant U.S. Attorney Alfred Rubega is prosecuting this case.
Hollister, Republic Men Indicted for Producing Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Hollister, Mo., man and a Republic, Mo., man have been indicted by a federal grand jury, in separate and unrelated cases, for producing child pornography.
USA v. Tyson
Michael Shane Tyson, 30, of Hollister, was charged in an indictment returned by a federal grand jury in Springfield, Mo., on Wednesday, May 13, 2015. The indictment replaces a federal criminal complaint that was filed against Tyson on April 24, 2015.
The federal indictment alleges that Tyson used a minor, identified as Jane Doe, to produce child pornography from Jan. 30 to April 7, 2015.
The indictment also contains a forfeiture allegation, which would require Tyson to forfeit to the government any property used to commit the alleged offense, including an Acer laptop computer and a Droid Razr Maxx cell phone.
This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI.
USA v. Hopper
Benjamin Michael Hopper, 22, of Republic, was charged in an indictment returned by a federal grand jury in Springfield, Mo., on Wednesday, May 13, 2015.
The federal indictment alleges that Hopper used a minor, identified as “Jane Doe #1,” to produce child pornography between Jan. 21 and 25, 2015.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the FBI and the Republic, Mo., Police Department.
Dickinson cautioned that the charge contained in these indictments are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Hollister, Republic Men Indicted for Producing Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Hollister, Mo., man and a Republic, Mo., man have been indicted by a federal grand jury, in separate and unrelated cases, for producing child pornography.
USA v. Tyson
Michael Shane Tyson, 30, of Hollister, was charged in an indictment returned by a federal grand jury in Springfield, Mo., on Wednesday, May 13, 2015. The indictment replaces a federal criminal complaint that was filed against Tyson on April 24, 2015.
The federal indictment alleges that Tyson used a minor, identified as Jane Doe, to produce child pornography from Jan. 30 to April 7, 2015.
The indictment also contains a forfeiture allegation, which would require Tyson to forfeit to the government any property used to commit the alleged offense, including an Acer laptop computer and a Droid Razr Maxx cell phone.
This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI.
USA v. Hopper
Benjamin Michael Hopper, 22, of Republic, was charged in an indictment returned by a federal grand jury in Springfield, Mo., on Wednesday, May 13, 2015.
The federal indictment alleges that Hopper used a minor, identified as “Jane Doe #1,” to produce child pornography between Jan. 21 and 25, 2015.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the FBI and the Republic, Mo., Police Department.
Dickinson cautioned that the charge contained in these indictments are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Grand Forks Man Convicted After Trial in Meth ConspiracyRead the Press Release
FARGO - Acting United States Attorney Christopher C. Myers announced that on May 13, 2015, José Luis Delacruz, 37, aka Joe Delacruz, from Grand Forks, North Dakota, was found guilty following a 2 ½ day trial for Conspiracy to Possess with Intent to Distribute and Distribution of Methamphetamine, as well as Brandishing a Firearm During the Commission of Drug Trafficking.
During the course of the conspiracy, co-conspirators received methamphetamine from Delacruz, which was sold primarily in the Grand Forks area; the conspiracy moved in excess of 500 grams of a mixture containing methamphetamine.
Delacruz was also convicted for his role of pistol-whipping a co-conspirator in Grand Forks whom he believed was cooperating. Delacruz faces up to life imprisonment for the drug charge and a mandatory seven-year consecutive sentence for brandishing the firearm in connection with the conspiracy.
This case was investigated by the Grand Forks Police Department, the Grand Forks Narcotics Task Force, and the Department of Homeland Security - Homeland Security Investigations.
The case was prosecuted by Acting U.S. Attorney Chris Myers, AUSA Megan Healy, and SAUSA Jeremy Ensrud.
Sentencing for Delacruz is set for August 3, 2015, in Fargo.
Golden Valley Man Indicted for Leading Multi-Million Dollar Cell Phone Trafficking ConspiracyRead the Press Release
United States Attorney Andrew M. Luger and Special Agent in Charge of the United States Secret Service Minneapolis Division Louis Stephens today announced the indictment of ZIBO LI, 30, and eight co-conspirators for conspiring to traffic in stolen and fraudulently obtained cellular telephones and related charges. LI led the conspiracy, during which he trafficked at least $3.8 million in stolen cellular devices throughout the United States and between the United States and Hong Kong. LI made an initial appearance today before United States Magistrate Judge Mayeron in U.S. District Court in Minneapolis, Minn.
“According to this indictment, the criminal conspiracy dismantled today was adept at victimizing Minnesota businesses and citizens,” said Special Agent in Charge of the United States Secret Service Minneapolis Division Louis Stephens. “Today’s success is the result of close and collaborative working relationships between local, state and federal law enforcement agencies, as well as federal prosecutors and several organizations in the retail sector. The Minnesota Financial Crimes Task Force is a force multiplier that facilitates numerous law enforcement agencies in combining our resources, leveraging our various areas of expertise, and working as one. Working together, we are able to stop significant crime in its tracks.”
“As charged, these defendants stole the identifying information of nearly 60 known individuals and 20 known businesses,” said Assistant United States Attorney Manda M. Sertich. “They exploited vulnerable members of our society, including people residing in homeless shelters, to steal cell phones and turn a profit. I am proud to work with my law enforcement colleagues to put an end to this alleged conspiracy.”
According to the indictment and documents filed in court, between 2011 and 2014, ZIBO LI and eight co-defendants engaged in a conspiracy to fraudulently obtain mobile cellular devices for reduced rates by fraudulently entering into service contacts, often using identity theft. ZIBO LI ultimately sold the stolen merchandise to contacts in Hong Kong, where a new Apple iPhone could, at the time of the conspiracy, retail for as much as $2,000.
According to the indictment and documents filed in court, OMID NGANGE AKALE, DEREK KREZ MCCORMACK, and JOSEPH FRANCIS WERB, each served as middlemen in LI’s organization. They purchased stolen or fraudulently obtained phones from buyers, and subsequently sold them to ZIBO LI. LI paid the middlemen by depositing cash directly into their bank accounts.
According to the indictment and documents filed in court, buyers for the organization were responsible for obtaining low-cost phones from retailers. Among the methods employed to obtain phones was “credit muling,” a scheme through which buyers, or those acting at their direction, signed up for cellular telephone service contracts to obtain reduced cost phones in other people’s names, but never intended to or did honor those contracts. Some of the buyers also recruited people residing in homeless shelters to sign up for cell phone contracts and obtain reduced cost phones, for which those recruited received nominal payments or goods.
According to the indictment and documents filed in court, buyers often used stolen identities to enter into contracts to obtain low-cost phones. They obtained stolen identities of real victims from co-conspirators TEMETRIUS LATONYA NICKERSON and REGINALD DEMARIUS WASHINGTON. The buyers provided stolen identities to ELIJAH WAYNE JACKSON to use in the opening of cell phone service contracts from his employer, a major Twin Cities-area retailer. JACKSON ran credit checks on the stolen identities to confirm that the stolen identities could be used to enter into cell phone service contracts and obtain cellular devices using the names of the identity theft victims.
According to the indictment and documents filed in court, IFRAH ISAAK NOR and RANDOLPH KENDRICK WILLIAMS also used stolen information to fraudulently obtain cellular telephones. Rather than using stolen identity information of individuals, NOR and WILLIAMS stole the identifying information of a Twin Cities-area business, which they exploited to open business accounts with cellular telephone contract providers. Applying for business contracts allowed WILLIAMS and NOR to obtain far more low-cost phones than an individual account.
This case is the result of an investigation conducted by the United States Secret Service, Saint Paul Police Department, Minnesota Bureau of Criminal Apprehension, Minnesota Financial Crimes Task Force, University of Minnesota Police Department, and Plymouth Police Department.
This case is being prosecuted by Assistant United States Attorneys Manda M. Sertich, Steven L. Schleicher, and John R. Marti.
Defendant Information: ZIBO LI, 30
Golden Valley, Minn.
Charges: • Conspiracy to traffic unauthorized access devices, 1 count
• Fraud and related activity in connection with access devices, 1 count
DEREK KREZ MCCORMACK, 33
St. Louis Park, Minn.
Charges: • Conspiracy to traffic unauthorized access devices, 1 count
• Fraud and related activity in connection with access devices, 1 count
ELIJAH WAYNE JACKSON, 21
St. Paul, Minn.
Charges: • Conspiracy to traffic unauthorized access devices, 1 count
• Aggravated identity theft, 2 counts
TEMETRIUS LATONYA NICKERSON, 42
St. Paul, Minn.
Charges: • Conspiracy to traffic unauthorized access devices, 1 count
• Aggravated identity theft, 1 count
REGINALD DEMARIUS WASHINGTON, 23
Brooklyn Park, Minn.
Charges: • Conspiracy to traffic unauthorized access devices, 1 count
• Aggravated identity theft, 1 count
OMID NGANGE AKALE, 35
Minneapolis, Minn.
Charges: • Conspiracy to traffic unauthorized access devices, 1 count
JOSEPH FRANCIS WERB, 37
Minneapolis, Minn.
Charges: • Conspiracy to traffic unauthorized access devices, 1 count
RANDOLPH KENDRICK WILLIAMS, 27
Bloomington, MN
Charges: • Conspiracy to traffic unauthorized access devices, 1 count
IFRAH ISAAK NOR, 23
St. Louis Park, Minn.
Charges: • Conspiracy to traffic unauthorized access devices, 1 count
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The charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty.Fresno Men Indicted on Methamphetamine Trafficking ChargesRead the Press Release
FRESNO, Calif. — A federal grand jury returned a four-count indictment today against Fresno residents Armando Perez, 50, and Christian Sandoval, 22, 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, on April 9, 2015, Perez provided an undercover officer with approximately one ounce of methamphetamine. On April 21, 2015, Perez provided the undercover officer with approximately one pound of methamphetamine. On May 7, 2015, Sandoval drove Perez to a meeting with an undercover officer, and Perez provided the officer with approximately 10 pounds of methamphetamine.
This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation involving the Drug Enforcement Administration and Fresno County Sheriff’s Office. 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, Perez faces a maximum statutory penalty of life in prison and a $35 million fine. Sandoval is facing a maximum penalty of 20 years in prison and a $1 million 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, which take into account a number of variables. The charges are only allegations; each defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Four Plead Guilty in San Antonio to Unlawfully Selling Migratory BirdsRead the Press Release
In San Antonio, four individuals await sentencing after pleading guilty to federal charges related to illegally selling migratory birds announced Acting United States Attorney Richard L. Durbin, Jr. and Special Agent in Charge Nicholas Chavez, U.S. Fish and Wildlife Southwest Region.
Appearing before Chief United States District Court Judge Fred Biery this morning, 50-year-old Jorge Rocha of Natalia, TX, pleaded guilty to one count of unlawfully offering to sell and selling migratory birds.
Previously, three other defendants—67-year-old Juan Luis Guerra of San Antonio; 56-year-old Francisco Guerrero of Cuero, TX; and, 60–year-old Tomas G. Perez of Devine, TX—pleaded guilty to the same federal charge. By pleading guilty, the defendants admitted to knowingly and unlawfully selling a migratory bird(s) to an undercover agent on various occasions in 2011 and 2012. Those birds included a Red-tailed Hawk and Great Horned Owls which are protected species under the Migratory Bird Treaty Act.
“One of the U.S. Fish and Wildlife Service's highest priorities is to investigate individuals that are involved in the unlawful commercial trafficking of our Nation's fish and wildlife,” said U.S. Fish and Wildlife Special Agent in Charge Nicholas Chavez. “The successful outcome of this investigation is also the result of working jointly with the Texas Parks and Wildlife Department to ensure the protection of our migratory birds. With our law enforcement partnership, information sharing, and investigative technology, we can disrupt wildlife trafficking on the web, smuggling through our airports, or our land borders.”
All four defendants remain on bond pending sentencing scheduled later this year. Each defendant faces up to two years imprisonment and a maximum fine of $2,000.
This indictment resulted from an investigation conducted by agents with the Southwest Region of the U.S. Fish and Wildlife Service and the Texas Parks and Wildlife Department. Assistant United States Attorney Bud Paulissen is prosecuting this case on behalf of the Government.
Four Defendants Plead Guilty to Operating a “Pill Mill” in Lilburn, GeorgiaRead the Press Release
ATLANTA - George Borbas, Randy Webman, Larry Webman, and Dara Webman have all pleaded guilty to illegally selling and distributing prescriptions for opiate-based narcotics and other controlled substances to addicts and drug dealers under the guise of a pain clinic in Lilburn, Georgia.
“These defendants came to Georgia for the sole purpose of profiting personally from the sale of prescription narcotics to addicts and drug dealers, without regard to the safety and well-being of our community,” said Acting U.S. Attorney John Horn. “Trafficking in prescription pain killers and other pharmaceuticals continues to be a top public safety issue in Georgia, leading to record levels of overdoses and addiction as well as a disturbing resurgence in heroin use by addicts who transition from abusing prescription pain killers.”
“The arrest of these defendants led to the dismantlement of an organization responsible for the illegal distribution opiate-based analgesics and other controlled substances,” said Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division. “This case is a perfect example of the success that can be achieved when federal, state and local resources are combined to present a united front.”
“The integrity of the medical profession must be protected from criminal enterprises and those who seek to illegally profit by pretending to provide legitimate medical services,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, Internal Revenue Service Criminal Investigation. “Our communities need assurance that medical professionals who lack integrity and engage in illegal activities will be held accountable for their actions. The guilty pleas today are just one example of how IRS Criminal Investigation and the law enforcement community work together to reassure the public.
“I would like to thank all of our law enforcement partners who helped dismantle and prosecute those responsible for operating this illegal enterprise. While the pill mill was operating in our town, it unlawfully dispensed thousands of powerful pain killers into the streets, poisoning our community. After the removal of this pill mill, our business corridor returned to a legal boulevard of opportunity, devoid of the proliferation of illegal dispensing of prescription drugs,” said Bruce Hedley, Chief of Police, City of Lilburn, Georgia.
“We always stand ready to partner with our federal agencies to combat the growing problem of prescription drug diversion. These close working relationships are imperative in this type of multi-jurisdictional and complex drug investigations,” said Director B.W. Collier, North Carolina State Bureau of Investigation.
According to Acting U.S. Attorney Horn, the charges and other information presented in court: From approximately February 2012 through January 2013, Larry Webman and Randy Webman operated an illegal enterprise, variously known as Premier Medical Management, Inc.; Premier Pain Management, Inc.; Premier Pain Management; and Premier Pain Management and Physical Therapy, located in Lilburn, Georgia. Dara Webman worked at the clinic as an office manager handing out prescriptions for narcotic opiates to customers in exchange for cash payments ostensibly collected for office visits.
Larry Webman and Randy Webman managed and controlled the clinic. Though neither had any medical training, they often directed the decisions of the clinic’s physician with respect to prescribing controlled substances. The clinic saw as many as 60 customers a day, each paying between $250 and $350 a visit. These customers almost always left with a prescription for controlled substances, which often included Oxycodone, a highly addictive painkiller. The clinic’s customers regularly traveled long distances to obtain prescriptions for controlled substances. Most hailed from outside the state, including North Carolina, Kentucky, Tennessee, Ohio, South Carolina, and Florida. The clinic’s physician allegedly saw a customer only at the initial visit, at which time he conducted a brief examination.
On return visits, a customer rarely saw the clinic’s physicians, but instead was able to obtain additional prescriptions for controlled substances allegedly based solely upon an exam by another clinic employee. On at least one occasion, Dara Webman mailed opiate prescriptions to undercover officers posing as customers. George Borbas sponsored the visits of numerous customers to the clinic in exchange for receiving a portion of the prescription pills the customers were ultimately prescribed. Almost all customers paid cash, and Larry Webman and Randy Webman personally used that money to promote the clinic’s ongoing illegal activity by, for example, purchasing an MRI machine.
The defendants in this case are as follows:
- George Borbas, 46, of Raleigh, North Carolina, pleaded guilty to drug trafficking conspiracy.
- Randy Webman, 62, of Hollywood, Florida, pleaded guilty to drug trafficking conspiracy and engaging in a money laundering conspiracy.
- Larry Webman, 66, of Hollywood, Florida, pleaded guilty to drug trafficking conspiracy and engaging in a money laundering conspiracy.
- Dara Webman, 31, of Hollywood, Florida, pleaded guilty to using the mail to illegally distribute drugs.
George Borbas will be sentenced on September 23, 2015, at 11:00 a.m. Randy, Larry, and Dara Webman will also be sentenced on the same day at 2:00 p.m. All defendants will be sentenced by United States District Judge Steve C. Jones. Dr. George Williams and Liz Troncoso are presently awaiting trial.
Criminal charges remain pending against the clinic physician, Dr. George Williams, for prescribing controlled substances outside the course of professional medical practice, and without a legitimate medical purpose. Charges are also pending against another clinic employee, Liz Troncoso, who is alleged to have conducted exams of patients seeking pills instead of Dr. Williams. Dr. George Williams and Liz Troncoso are presently awaiting trial.
This case is being investigated by the Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, the Lilburn Police Department, and the North Carolina State Bureau of Investigation.
Assistant United States Attorney Laurel Boatright prosecuted the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Fort Worth Woman and Daughter-in-Law Tax Return Preparers Sentenced on Conspiracy and Tax ConvictionsRead the Press Release
FORT WORTH, Texas — Two Fort Worth, Texas, tax preparers who were convicted at trial in November 2014 on 34 counts of a superseding indictment charging conspiracy and other tax offenses, were sentenced yesterday, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Ramona C. Johnson was sentenced to 170 months in federal prison by U.S. District Judge John McBryde and Nekia N. Everson was sentenced to 95 months in federal prison. Both must surrender to the Bureau of Prisons by June 5, 2015.
According to evidence presented at trial, Ramona C. Johnson managed/operated a tax preparation business in Fort Worth that was known, among other names, as Tax Office One. Johnson’s daughter-in-law, Nekia N. Everson, was a return preparer for the business, according to evidence presented at trial.
Johnson and Everson were each convicted on one count of conspiracy to aid and assist in the preparation and presentation of a false tax return. Johnson was also convicted on 26 counts of aiding and assisting in the preparation of a false tax return and two counts of filing false tax returns. Everson was also convicted on five counts of aiding and assisting in the preparation and presentation of a false tax return.
The government presented evidence at trial that Johnson and Everson, and those working with them, prepared and filed false and fraudulent tax returns that included various false and fraudulent schedules, deductions, exemptions, and credits with the goal of reducing the amount of taxes owed by the taxpayers and obtaining larger refunds for the taxpayers than they were entitled to receive. As a result of the larger refunds, Johnson and Everson were able to charge higher fees for preparing returns, build client loyalty, and increase business through client referrals.
In some instances, Johnson and Everson, and those working with them, created false and fraudulent Schedule C (reporting business losses/profits) and Schedule A (reporting itemized deductions) forms to accompany the taxpayer’s Form 1040. The taxpayers would often be asked about their personal expenses, such as those incurred commuting to and from work, cell phone, automobile, clothes, etc., and then the information would be fraudulently listed on the Schedule C as business expenses or unreimbursed employee expenses on Schedule A. On some returns, Johnson and Everson would completely fabricate a Schedule C business, including income and expense items. For some taxpayers, Johnson would create a false and fraudulent Schedule C reflecting the taxpayers had a profit from a nonexistent business. This false profit, together with claimed dependents (both fraudulent and actual), would be used to claim the taxpayer was entitled to an earned income tax credit.
In other instances, according to evidence presented at trial, Johnson and Everson would include false dependent exemptions on tax returns for some clients. Johnson, or someone working with her, would acquire various personal identities, the names and social security numbers of individuals with no connection to the taxpayer to use as false dependents on tax returns prepared for clients. When included on the tax return, the false dependents would increase the number of exemptions, increase the deduction for exemptions, and often, entitle the taxpayer to an earned income tax credit.
In addition, the government presented evidence that for calendar years 2009 and 2010, Johnson filed tax returns in which she reported total income of $2,850 and $16,906, respectively, when she well knew that the income amount was understated in that it did not include income she received for her work preparing tax returns.
Between January 2008 and October 2011, according to evidence presented at trial, Johnson’s tax preparation business collected more than $1.9 million in tax preparation fees from clients.
IRS Criminal Investigation investigated. Assistant U.S. Attorneys Mark Nichols and Chris Wolfe prosecuted.