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8 May 2015
Dallas Physician and His Employee Arrested for Alleged $5.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A physician who ran a medical house call service business in Dallas, and an employee of that business were arrested this morning on charges related to their alleged participation in a $5.2 million health care fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney John R. Parker of the Northern District of Texas, Special Agent in Charge Mike Fields of the Department of Health and Human Services’ Office of Inspector General’s (HHS-OIG) Dallas Regional Office, the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU), Special Agent in Charge Thomas M. Class, Sr. of the FBI’s Dallas Division and Special Agent in Charge Max Eamiguel of the U.S. Postal Service’s Office of the Inspector General’s (USPS-OIG) Southern Area Field Office made the announcement.
Hector Molina, M.D., 51, of Irving, Texas, and Blanca Mata, 46, of Forney, Texas, were charged with one count of conspiracy to commit health care fraud. In addition, Molina was charged with eight counts of health care fraud, and Mata was charged with four counts of health care fraud. Both defendants made their initial appearances before U.S. Magistrate Judge Renée Harris Toliver of the Northern District of Texas earlier today and were released on bond.
According to allegations in the indictment, Molina owned and operated Molina Medical Housecall Services in Dallas, and Mata was an employee of that business. The indictment alleges that from approximately June 2012 through January 2015, Molina and Mata conspired to defraud Medicare by billing for home visits performed by Mata, who was not a physician, as if Molina had performed the home visits. Additionally, the indictment alleges that Molina billed for home visits performed in the Dallas area while he was out of the country.
An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by HHS-OIG, the Texas Attorney General’s MFCU, the FBI and USPS-OIG, 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 for the Northern District of Texas. The case is being prosecuted by Trial Attorney Jason Knutson 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.
Dallas Home Builder Sentenced to 24 Months in Federal Prison and Ordered to Pay More Than $250,000 in Restitution for Defrauding Insurance CompaniesRead the Press Release
DALLAS — A residential homebuilder, who operated under the name of Park Cities Development, Inc., was sentenced yesterday by U.S. District Judge Barbara M. G. Lynn, announced Acting U.S. Attorney John Parker of the Northern District of Texas.
Edward Adrian Abraham, 56, most recently of Dallas, was sentenced to 24 months in federal prison and ordered to pay $252,078 in restitution. He pleaded guilty in April 2014 to one count of wire fraud, and he has been in custody since his arrest on related charges outlined in a federal indictment returned by a grand jury in Dallas in January 2014.
According to documents filed in the case, from February 2009 through at least July 2009, Abraham devised and executed a scheme to defraud insurance companies in connection with fraudulent insurance claims based on false claims of building materials allegedly stolen from two residential job sites in Dallas - one on Amherst Avenue and one on Drane Drive.
As part of his scheme, Abraham filed false police reports to support the fraudulent insurance claims, and he caused false and fraudulent invoices to be fabricated and faxed to insurance companies to support the claims. Abraham admitted that no building materials were stolen from either location. Because of the false and fraudulent invoices, he received $247,078 in proceeds from the insurance companies.
The FBI investigated the case. Assistant U.S. Attorney J. Nicholas Bunch prosecuted.
Certified Environmental Services, Inc. Pleads Guilty to Negligent EndangermentRead the Press Release
UTICA, NEW YORK – Certified Environmental Services, Inc. ("CES") pled guilty on May 5th to a one count misdemeanor Information charging CES with negligently releasing asbestos into the ambient air, thereby placing other persons in imminent danger of death or serious bodily injury, announced United States Attorney Richard S. Hartunian. Sentencing is scheduled for 1:00 p.m. on September 10, 2015, before U.S. District Judge David N. Hurd in Utica. CES faces maximum penalties that include probation for 5 years, restitution, and a $200,000 fine, as well as a special assessment of $125.
The admissions by CES in connection with pleading guilty included the following:
During the period of 1999 – 2007, CES was engaged in the business of, among other things, conducting air monitoring and sampling and performing laboratory analysis before, during, and at the conclusion of asbestos abatement (removal) projects. CES provided air sampling and laboratory analysis for asbestos abatements by AAPEX Environmental Services, Inc., and Paragon Environmental Services, Inc., which had performed illegal "rip and run" removals in which asbestos was stripped and removed dry, scattered and left behind in various locations throughout the work area, and was permitted to, and did, migrate outside of the facility and into the ambient air.
Asbestos is a hazardous air pollutant, and severely toxic. Medical science has not established any minimum level of exposure to asbestos fibers which is considered to be safe. Before asbestos abatement, containment structures known as isolation barriers must be constructed around the abatement area by the contractor and negative air pressure maintained to ensure that contaminated air in the abatement area does not filter back to an uncontaminated area. The containment and negative air pressure must be maintained continuously from the start of the abatement work through the cleanup operations and clearance air monitoring.
The negligence by CES that was a cause of the release of the hazardous air pollutant asbestos and the resulting imminent danger to persons involved: 1) CES employees failing in certain cases to: perform visual inspections for asbestos debris and pools of water; observe required waiting periods before sampling; record accurate sampling starting and stopping times; calibrate pumps before and after sampling; conduct aggressive air sampling (by agitating the air inside the work area to ensure that present asbestos fibers are rendered airborne for collection and measurement); and decontaminate air samplers and their equipment before leaving the asbestos work area, or sign in and out of containment; and 2) CES employees, in certain cases, conducting air sampling without entering work areas; letting contractors collect air samples themselves; and overstating sampling times.
CES thereby negligently released asbestos into the ambient air and negligently placed persons in imminent danger of death or serious bodily injury from exposure to asbestos fibers.
In 2010, a fifteen count superseding indictment charged CES and others with environmental offenses and mail fraud and a jury trial concluded with the conviction of CES (and three co-defendants) as charged. However, in 2014, the Court of Appeals reversed the convictions and remanded for a new trial. The guilty plea May 5th resolves the pending charges against CES and two co-defendants. Two other co-defendants face re-sentencing.
The case was investigated by the U.S. Environmental Protection Agency Criminal Investigation Division, New York Regional Office and Syracuse Resident Office, whose diligence and dedication U.S. Attorney Hartunian commended. It is being prosecuted by First Assistant U.S. Attorney Grant C. Jaquith.
Cattaraugus Man Convicted of Drug and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that a federal jury has found Joseph Tigano, III, 51, guilty of manufacturing in excess of 1000 marijuana plants; possession with intent to distribute marijuana; maintaining a premises for the manufacturing of marijuana; conspiracy to manufacture and possess marijuana and maintain a premises for the manufacturing of marijuana; and being a felon in possession of a firearms. The charges carry a mandatory minimum of 20 years in prison, a maximum of life and a $10,000,000 fine.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the prosecution of the case, stated that on July 8, 2008, law enforcement officers executed a search warrant at the defendant’s Mill St. factory. During the search, officers discovered an active hydroponic marijuana grow operation which included 1414 plants. In addition, officers seized 100 pounds of harvested and processed marijuana packaged for sale. The estimated value of the processed marijuana is between $300,000 and $500,000.
Officers also seized three firearms, United States currency, money orders, and savings bonds. Also seized were a 2007 Cadillac Escalade, a 2005 Jeep Cherokee Limited, and a 2007 Haulmark Trailer.
Tigano was arrested on July 8, 2008 along with his father, Joseph Tigano, Sr., who has also been convicted and is awaiting sentencing.
The verdict is the culmination of an investigation by the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division, with the assistance of the Cattaraugus County Sherriff’s Department, under the direction of Sheriff Timothy Whitcomb, and the Southern Tier Regional Task Force, under the direction of Cattaraugus County Sheriff’s Sergeant Ronald Lott, the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office, and the Erie County Sheriff’s Department Aviation Unit, under the direction of Timothy Howard.Sentencing is scheduled for August 13, 2015 at 3:00 p.m. before U.S District Judge Elizabeth A. Wolford, who presided over the trial of the case.
Broward County Tax Preparer Convicted of Preparing False Tax ReturnsRead the Press Release
After a four-day trial, yesterday a federal jury convicted Hugo Jean Joseph, 60, of Coral Springs, of eleven counts of preparing false tax returns for his clients.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
As shown at trial and in court documents, Jean Joseph and co-defendant Guencia Piard a/k/a Guencia Toussaint operated Lakay Multi Services (LMS), a tax return service with locations in Pompano Beach, Naples and Fort Myers, Florida. Jean Joseph and Piard prepared and filed fraudulent tax returns on behalf of their customers during the 2006 to 2008 tax years by using false Schedule A deductions (such as those for medical and unreimbursed employee business expenses), false Schedule C expenses, false education expenses, and false credits for federal fuel tax without their clients’ knowledge or consent. By inflating their clients' deductions, expenses, education credits, and fuel tax credits, Jean Joseph and Piard attained higher tax refunds for their clients which attracted a greater volume of clients. Jean Joseph and Piard kept a portion of the fraudulently inflated tax refunds as payment for their services.
Jean Joseph and Piard prepared at least 76 false tax returns for twenty-one sets of clients for tax years 2006, 2007, and 2008. Sometimes, Jean Joseph and Piard provided clients with copies of their respective tax returns which were different from the tax returns filed with the IRS. At least 21 of the 76 tax returns filed with the IRS reported a higher tax refund than the copy of the tax return provided to the client.
The total tax loss to the IRS was $283,834.
At sentencing, which is currently set for July 22, 2015 at 1:30 pm, before U.S. District Judge Jose E. Martinez, Jean Joseph faces a maximum term of 33 years in prison.
Co-defendant Piard was sentenced on August 7, 2014 to 24 months in prison, followed by three years of supervised release, and was ordered to pay restitution of $283,834. Piard pled guilty to one count of conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Laurence M. Bardfeld.
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.
British Man Sentenced to 20 Years for O'Fallon High School Student’s Overdose DeathRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Richard J. Klemis, 41, a British citizen, has been sentenced to 20 years in federal prison for selling the heroin which killed 19-year-old Tyler McKinney on February 23, 2011.
Klemis was sentenced on Friday, May 8, 2015 in U.S. District Court in East St. Louis, Illinois by Judge David R. Herndon. Klemis had earlier been found guilty of nine federal charges on February 4, 2015, following an 8-day jury trial.
At Klemis’ sentence hearing, Judge Herndon described Klemis as "evil and diabolical" and called him "a one-man drug store for high school kids at a party."
Judge Herndon also noted that Klemis was "a drug predator who preyed on children who were not yet capable of making reasoned choices."
In addition to providing the heroin which killed Tyler McKinney, Klemis was also sentenced for nearly killing a second man; selling heroin to four other O’Fallon High School students; and employing a 16-year-old to assist him in distributing heroin.
"Given all the facts in this case, we were extremely pleased by this result. Klemis got far more consideration from the British Courts than he ever gave his victims. Judge Herndon’s sentence was both wise and appropriate in this case." noted United States Attorney Wigginton.
"For five years now, my office has made the prosecution of heroin dealers who ‘accidentally’ kill someone a top priority. We are in the midst of a heroin abuse epidemic, and the victims are disproportionately teenagers. I’m proud to have played a part in removing a predator like Richard Klemis from our community."
At Klemis’ sentence hearing on Friday, Tyler McKinney’s mother and stepfather each addressed Judge Herndon before he imposed sentence on Klemis. McKinney’s mother noted that at trial, many witnesses testified that Klemis often referred to Tyler McKinney as "my boy Tyler." Addressing the Court, Mrs. McKinney said, "He was my boy, your Honor. Not Richard Klemis’ ‘boy.’ I will never get to see him married. I will never see the grandchildren he might have had. Instead I had to bury him."
The investigation which resulted in Klemis’ arrest and conviction was conducted by the O’Fallon, Illinois, Police Department, the Millstadt, Illinois, Police Department, and by the Drug Enforcement Administration.
The case was tried by Assistant United States Attorney Robert L. Garrison and Special Assistant United States Attorney Jonathan S. Drucker.
Bribery Charge Brought Against Miami Building Owner/Manager in Connection with Fire Code ViolationsRead the Press Release
The owner and manager of the Miami Office Center, which leases office space and manages property at a location known as the Flagler Building Downtown, was charged today with one count of bribery.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, and Rodolfo Llanes, Chief, City of Miami Police Department (MPD), made the announcement.
Dvir Derhy, 46, of Miami, was charged by information with bribery, in violation of Title 18, United States Code, Section 666(a)(2). Derhy faces a maximum possible sentence of ten years in prison for this offense.
According to the information, the Flagler Building Downtown, located at 223 East Flagler Street, was cited for violations of the City of Miami fire code for blocking egress from the building. Derhy owned and managed the Flagler Building Downtown. Between July 18, 2014 and July 21, 2014, Derhy corruptly gave, offered, and agreed to give cash payments to another person, with the intent to influence and reward an agent or employee of the City of Miami Fire Department, in connection with the removal of these citations.
Mr. Ferrer commended the investigative efforts of the FBI Miami Area Corruption Task Force and the City of Miami Police Department Internal Affairs Section. The case is being prosecuted by Assistant U.S. Attorney Harry C. Wallace, Jr.
An information is only an accusation and the defendant is presumed innocent unless and until proven guilty in a court of law.
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.
Baltimore Man Indicted on Child Exploitation Charges in East TexasRead the Press Release
BEAUMONT, Texas — A 35-year-old Baltimore, MD man has been indicted on child exploitation charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Ian Christian Anderson was indicted by a federal grand jury on May 7, 2015 and charged with two counts of enticement of a minor and two counts of traveling with intent to engage in illicit sexual conduct.
According to the indictment, on Feb. 15, 2015 and Mar. 16, 2015, Anderson is alleged to have traveled from Maryland to Lumberton, Texas to engage in sexual conduct with a person he knew to be under the age of 18.
Nelson faces a minimum of 10 years in federal prison if convicted of any of the charges.
This case is being prosecuted as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case is being investigated by the Federal Bureau of Investigation the Lumberton Police Department, and the Hardin County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorneys Joseph R. Batte and Christopher T. Tortorice.
It is important to note that an indictment should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.
12 Lrgp Gang Members and Associates Indicted; Charged with Narcotics TraffickingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has indicted 12 members and associates of the LRGP Gang and charged them with possession with intent to distribute, and to distribute, 280 grams or more of crack cocaine. The charge carries a mandatory minimum of 10 years in prison, a mandatory of life, and a $10,000,000 fine.
The LRGP gang, which operates primarily in the area of Lathrop, Rother, Playter and Gibson Streets in the City of Buffalo, is alleged to be an organization engaged in violent criminal activity, including the distribution of cocaine and crack cocaine and the use of firearms.
Named in the indictment are:
• Nathaniel Myers
• Anthony Newbern
• Augustus Kidd
• Brandon Miller
• Damien Carmichael
• Erika Gray
• Judy Berry
• Ka’ron McDuffie
• Marcus Edwards
• Matthew Johnson
• Vaughn Owens
• Willielee JerniganDefendants Nathaniel Myers, Damien Carmichael and Matthew Johnson are also charged with maintaining a premises at 41 Houghton Avenue, Buffalo, NY, for the purpose of manufacturing, distributing and using crack cocaine. The charge carries a maximum penalty of 20 years in prison and a $500,000 fine.
The indictment is the culmination of an investigation by Federal Bureau of Investigation’s Safe Streets Task Force which included the Amherst Police Department; Buffalo Police Department; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Cheektowaga Police Department; Erie County Sheriff’s Office; Hamburg Police Department; Lancaster Police Department; Niagara Frontier Transportation Authority; New York State Department of Correctional Services; New York State Police; U.S. Border Patrol; and U.S. Immigration and Customs Enforcement–Homeland Security Investigations.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
10th St Gang Member Sentenced on Racketeering ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Jimmy Sessions, 28, of Buffalo, NY, who was convicted of Racketeering Influenced Corrupt Organizations (RICO) Conspiracy, was sentenced to 70 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorneys Joseph M. Tripi and John M. Alsup, who handled the case, stated that from 2000 to 2010, the defendant was a member of the 10th Street Gang, a criminal enterprise engaged in racketeering activity. As a part of his involvement in the 10th Street Gang, Sessions, along with other members and associates of the gang, sold cocaine, crack cocaine, and other controlled substances on the West Side of Buffalo. The defendant possessed firearms with other 10th Street Gang members and conspired to distribute over five kilograms of cocaine and over 280 grams of crack cocaine as a part of the affairs of the 10th Street Gang.
All 44 defendants in this case have been convicted.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation Safe Streets Task Force, the New York State Police, under the direction of Major Michael Cerretto, the Buffalo Police Department under the direction of Commissioner Daniel Derenda and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division.
7 May 2015
Waterbury Man Sentenced to More Than 5 Years in Federal Prison for Distributing MethRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration for New England, announced that KEVIN WALLIN, 63, last residing in Waterbury, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to 65 months of imprisonment, followed by five years of supervised release, for trafficking methamphetamine (“meth”).
“Meth is a highly-addictive drug that consumes its user and has ravaged other parts of the country,” stated U.S. Attorney Daly. “Federal, state and local law enforcement continue to work hard to thwart meth distribution and abuse here in Connecticut. The DEA and Connecticut State Police should be commended for disrupting this coast to coast meth trafficking operation.”
“DEA and our law enforcement partners are committed to investigating individuals and organizations that distribute methamphetamine in our communities,” said DEA Special Agent in Charge Ferguson. “Methamphetamine is an insidious drug that wreaks havoc in our communities and destroys lives.”
According to court documents and statements made in court, this matter stems from a joint investigation by the Drug Enforcement Administration and the Connecticut State Police’s Statewide Narcotics Task Force. The investigation, which included the use of court-authorized wiretaps, controlled purchases of meth, physical surveillance and the use of an undercover officer, revealed that Chad McCluskey and his girlfriend, Kristen Laschober, of California, sent shipments of meth to WALLIN over the course of approximately four years. After receiving the shipments, WALLIN distributed the drug to other dealers and also sold it to his own customers. Some of the shipments were sent on consignment with the understanding that WALLIN would pay McCluskey and Laschober with proceeds generated from his distribution of the drug.
For a time during the conspiracy, WALLIN received between one and three pounds of meth from McCluskey and Laschober on a monthly basis. On six occasions between September 2012 and January 2013, WALLIN sold meth to the undercover officer.
WALLIN has been detained since his arrest on January 3, 2013. A court-authorized search of WALLIN’s residence on that date revealed meth, drug paraphernalia and drug packaging materials.
On April 2, 2013, WALLIN pleaded guilty to one count of conspiracy to distribute 500 grams or more of a mixture and substance containing methamphetamine (“meth”).
McCluskey and Laschober pleaded guilty to the same charge and were sentenced to prison terms of 65 months and 60 months, respectively.
This matter was prosecuted by Assistant U.S. Attorneys Patrick Caruso and H. Gordon Hall.
Wakefield Woman Sentenced for Misprision of a FelonyRead the Press Release
U.S. Attorney Kenneth A. Polite announced today that LINDSEY DOOLEY, age 25, a resident of Wakefield, Louisiana, was sentenced after having previously pled guilty to misprision of a felony.
U.S. District Judge Jane Triche Milazzo sentenced DOOLEY to 3.5 years probation.
According to court documents, on May 8, 2013, while conducting a related heroin investigation, Jefferson Parish Sheriff’s Office detectives searched co-defendant STEPHEN FARRELL and DOOLEY’S residence in Metairie. During the search, detectives found a loaded Taurus International .380 caliber firearm and drug paraphernalia. FARRELL was convicted in federal court for possession of a firearm by a convicted felon, and was sentenced by Judge Milazzo to 68 months in federal prison. Court records reveal that DOOLEY concealed FARRELL’S heroin distribution activities by providing a place for FARRELL to store and package heroin.
U.S. Attorney Polite praised the work of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Nolan D. Paige was in charge of the prosecution.
Virginia-Based Defense Contractor to Pay $400,000 to Resolve False Claims Act Allegations Under Civil Settlement with United StatesRead the Press Release
The Informatics Applications Group, Inc. (TIAG) a Defense contractor based in Reston, VA, will pay $400,000 under a civil settlement with the United States Department of Justice, announced Acting United States Attorney Richard L. Durbin, Jr. The settlement resolves allegations that TIAG submitted false claims to the government in violation of the False Claims Act, 31 U.S.C. §§ 3729-3733, as well as certain other claims.
The claims submitted by TIAG were for services rendered under an Army contract for information technology services at the United States Army Medical Information Technology Center, Joint Base San Antonio – Fort Sam Houston. Pursuant to the contract, TIAG employees were provided access to USAMITC, its network, computers and other resources solely for purposes of performing work on USAMITC Information Technology systems.
The United States contends that, beginning in June 2012 and continuing through September 2012, during its performance of the USAMITC contract, certain TIAG employees utilized the USAMITC network for prohibited purposes, including to access information that they deemed to be useful to TIAG’s efforts to obtain other government contracts. The TIAG employees searched for and obtained multiple documents from the USAMITC network, including documents restricted to those with Privileged Access. The United States contends that these documents were sought for, and were used in, preparing TIAG proposals for three government Requests for Proposals, however, TIAG did not win any of those contracts. The United States contends that TIAG’s conduct placed it in default under the contract, yet it knowingly submitted false claims for payment under the contract.
The settlement agreement is not an admission of liability by TIAG.
Acting United States Attorney Durbin commended the efforts of the United States Army Criminal Investigation Division -- Major Procurement Fraud Unit which investigated the case. Assistant United States Attorney Susan Strawn handled the investigation for the Government.
U.S. Attorney’s Office Files Civil Complaint Against Heathcare Commons Inc. for Failure Re-Employ Returning ServicememberRead the Press Release
Alleges Violation of Employment Rights of Sergeant in Army National Guard
CAMDEN, N.J. – The U.S. Attorney’s Office announced today it has filed a civil complaint against a South Jersey company for failing to re-employ a former employee when she returned from a National Guard deployment, U.S. Attorney for New Jersey Paul J. Fishman announced.
The civil lawsuit, filed in Camden federal court, alleges that Healthcare Commons Inc., of Carneys Point, New Jersey, willfully violated the Uniformed Services Employment and Re-employment Rights Act of 1994 (USERRA). USERRA protects the rights of uniformed servicemembers to retain their civilian employment following absences due to military service obligations and provides that they shall not be discriminated against because of their military obligations.
“The men and women who serve in our armed forces here and abroad do so at great personal sacrifice,” U.S. Attorney Fishman said. “Because of that sacrifice, federal law guarantees that they have the opportunity to resume their careers when they’ve completed their service. When companies seek to skirt their obligations to re-employ our returning veterans, we will hold them accountable.”
“No person should lose their job for serving our country, but according to our complaint that’s exactly what happened to a National Guard member here,” Acting Associate General Stuart F. Delery said. “Today’s filing is one more example of the Department of Justice’s commitment to protecting the men and women who serve in our Armed Forces from discrimination and unlawful actions.”
“The filing of this case reinforces the commitment of the Department of Justice to the vigorously enforce the prohibition of employment discrimination based on military service,” Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, said. “I want to thank the Department of Labor for referring this case to the Department of Justice. I’m hopeful that through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and continue using every tool at our disposal to protect the rights of the men and women who serve in our Armed Forces.”
According to the complaint:
Megan Toliver, 32, of New Castle, Delaware, is a former employee of Healthcare Commons. She joined the U.S. Army National Guard in September 2004 and, most recently, had served as a sergeant, with honorable service as a mental health specialist. When Toliver returned from her military deployment in May 2014, Healthcare Commons willfully violated USERRA by not re-employing her as a mental health screener or in another comparable position.
The case was referred by U.S. Department of Labor following an investigation by the department’s Veterans’ Employment and Training Service.
The plaintiff is represented by Assistant U.S. Attorney Michael E. Campion, U.S. Attorney’s Office, District of New Jersey, and Special Litigation Counsel Andrew Braniff, U.S. Department of Justice, Civil Rights Division, Employment Law Section.
In March 2015, the Attorney General created of the Service Members and Veterans Initiative, which is led by three dedicated career Justice Department attorneys with strong ties to the military community. They will further the Department’s existing efforts by coordinating and expanding enforcement, outreach, and training efforts on behalf of service members, veterans, and their families. The initiative will address the unique challenges that service members face while on active duty, that veterans face upon returning home, and that families face when a loved one is deployed.
Additional information about USERRA can be found on the U.S. Attorney’s Office website at www.justice.gov/usao-nj and the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
U.S. Attorney Hartunian, New York Attorney General Schneiderman & Comptroller DiNapoli Announce Guilty Pleas on State and Federal Charges by Former AssemblymemberRead the Press Release
Former New York State Assemblymember William Scarborough, 69, of Queens, New York, has agreed to plead guilty on federal and state charges stemming from public corruption investigations, announced U.S. Attorney Richard S. Hartunian of the Northern District of New York, Attorney General Eric T. Schneiderman of the State of New York, State Comptroller Thomas P. DiNapoli of New York and Special Agent in Charge Andrew W. Vale of the FBI’s Albany Division.
Scarborough pleaded guilty this morning to federal charges and is scheduled to plead guilty to state charges at 12:30 p.m. in Albany, New York, County Court.
Appearing in federal court before Senior U.S. District Judge Thomas J. McAvoy of the Northern District of New York, Scarborough pleaded guilty to wire fraud and theft concerning a program receiving federal funds. Scarborough is scheduled to be sentenced on Monday, Sept. 14, 2015, at 11:30 a.m., in Albany. He faces up to 20 years in prison on the wire fraud count, 10 years in prison on the count charging theft concerning a program receiving federal funds and fines of up to $250,000 on each count. As part of the plea agreement, Scarborough also agreed to resign his position as a member of the New York State Assembly, pay $54,355 in restitution to the State of New York and forfeit that amount to the United States.
This afternoon, Scarborough will appear before Judge Stephen W. Herrick of the Albany County Court to plead guilty to a public corruption charge related to the misuse of over $40,000 from his Friends of Bill Scarborough campaign account. As part of the plea agreement, Scarborough will plead guilty to grand larceny in the fourth degree and is expected to be sentenced to one year of jail time, will resign his position in the State Assembly and will donate all funds remaining in his campaign account to charity.
The federal charges and guilty plea arose from an investigation into travel voucher fraud. As a New York State Assemblymember, Scarborough was entitled to receive the following types of payments when he traveled to Albany for legislative business: an allowance for overnight stays in Albany (full per diem), which varied from $160 to $171 per day, an allowance for travel not requiring an overnight stay in Albany (partial per diem), which varied from $49 to $61 per day and reimbursement for mileage actually incurred for travel between his home and Albany. To receive those payments, Scarborough was required to submit travel vouchers to the New York State Assembly Finance Department certifying his dates of travel to and from Albany, the number of miles he traveled to and from Albany, the purpose of his travel, the days he was in Albany and his eligibility for payment for either full per diem or partial per diem on each of those days. He also had to certify that the claimed amount was “just, true and correct.”
As part of his federal plea, Scarborough admitted that from January 2009 through December 2012 he submitted 174 fraudulent New York State Assembly travel vouchers to the assembly’s Finance Department causing the State of New York to pay him $54,355 that he was not entitled to receive. In the fraudulent vouchers, Scarborough falsely certified that he had been in Albany for legislative business on specific days when he had not been in Albany at all, had been in Albany, for less time than he claimed on a voucher, or had not stayed overnight.
The state charges arose from an ongoing effort between Schneiderman and DiNapoli known as “Operation Integrity” and conducted with the FBI’s Public Corruption Task Force. In his state plea agreement, Scarborough will admit that between January 2007 and March 2014, he stole from the Friends of Bill Scarborough campaign committee by making over $38,000 in unauthorized cash withdrawals and transfers from his campaign account for his own personal use and taking checks totaling $3,450 which were intended as donations to the Friends of Bill Scarborough campaign and instead depositing them directly into his personal bank. In furtherance of this scheme, Scarborough will admit that, over the seven year period, he caused his campaign committee to file 21 false reports to the New York State Board of Elections that failed to reflect these larcenies.
“My office is committed to rooting out corruption in the state legislature, without regard to party, position, power or popularity,” said U.S. Attorney Hartunian. “There is no delight in the downfall of a duly elected representative, but Mr. Scarborough chose personal gain over the public trust. Complaints of financial distress – something many people experience – provide a poor excuse for Mr. Scarborough’s misconduct, which involved a four year scheme to defraud by abusing the New York State Assembly’s travel voucher system. He falsely obtained $54,355, and now must face the consequences of his actions. I commend the Federal Bureau of Investigation, the Office of New York State Attorney General Eric Schneiderman and the Office of New York State Comptroller Thomas DiNapoli for their outstanding work and collaborative efforts here. This case is the result of interagency cooperation at its best.”
“Today Assemblymember Scarborough pleaded guilty to crimes that betrayed his constituents and the taxpayers of the State of New York – crimes that will send him to jail under this plea agreement,” said Attorney General Schneiderman. “While he will pay the price for his individual crimes, we need to channel public outrage at the ongoing corruption scandals into a movement for comprehensive reform. We have done this before in New York, and we can do it again.”
The Attorney General’s Office thanked the FBI and the U.S. Attorney’s Office of the Northern District of New York for their collaboration on this case.
“Public service means just that: serving the public,” said Comptroller DiNapoli. “Mr. Scarborough abused his public office for personal gain and now faces the consequences of his actions. I commend Attorney General Schneiderman, U.S. Attorney Hartunian and the Federal Bureau of Investigation for their commitment and for our continued partnership in rooting out corruption and protecting public funds.”
“American taxpayers deserve honesty from public officials,” said Special Agent in Charge Vale. “Those involved in acts of corruption and blatant greed will be held accountable for their actions and we will continue to pursue those like Mr. Scarborough who sell their integrity at the public’s expense.”
The federal case was investigated by the FBI’s Albany Division and is being prosecuted by Assistant U.S. Attorney Jeffrey C. Coffman of the Northern District of New York.
Prosecuting the state case is Assistant Attorney General Christopher Baynes of the Attorney General’s Public Integrity Bureau. The state’s investigation was handled by Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam of the Investigation Bureau. Forensic Auditor Jason Blair and Legal Analyst Sara Pogorzelski provided additional assistance.
The New York State Comptroller’s Division of Investigations conducted the investigation for Comptroller DiNapoli's Office.
U.S. Attorney Hartunian, New York A.G. Schneiderman & Comptroller Dinapoli Announce Guilty Pleas on State and Federal Charges by Former Assembly Member William ScarboroughRead the Press Release
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian, New York State Attorney General Eric T. Schneiderman, State Comptroller Thomas P. DiNapoli, and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation, today announced that former New York State Assemblymember WILLIAM SCARBOROUGH, age 69, of Queens, New York, has agreed to enter guilty pleas on federal and state public charges stemming from public corruption investigations.
SCARBOROUGH pled guilty this morning to federal charges and is scheduled to plead guilty to state charges at 12:30 p.m. in Albany County Court.
Appearing in federal court before Senior United States District Judge Thomas J. McAvoy, SCARBOROUGH pled guilty to wire fraud and theft concerning a program receiving federal funds. SCARBOROUGH is scheduled to be sentenced on Monday, September 14, 2015, at 11:30 a.m., in Albany, New York. He faces up to 20 years in prison on the wire fraud count, 10 years in prison on the count charging theft concerning a program receiving federal funds, and fines of up to $250,000 on each count. As part of the plea agreement, SCARBOROUGH also agreed to resign his position as a Member of the New York State Assembly, pay $54,355 restitution to New York State, and forfeit that amount to the United States.
This afternoon, SCARBOROUGH will appear before Albany County Court Judge Stephen W. Herrick to plead guilty to a public corruption charge related to the misuse of over $40,000 from his Friends of Bill Scarborough campaign account. As part of a plea agreement, SCARBOROUGH will plead guilty to Grand Larceny in the 4th Degree and is expected to be sentenced to one year of jail time, will resign his position in the State Assembly, and will donate all funds remaining in his campaign account to charity.
The federal charges and guilty plea arose from an investigation into travel voucher fraud. As a New York State Assembly Member, SCARBOROUGH was entitled to receive the following types of payments when he traveled to Albany for legislative business: (a) an allowance for overnight stays in Albany ("full per diem"), which varied from $160 to $171 per day; (b) an allowance for travel not requiring an overnight stay in Albany ("partial per diem"), which varied from $49 to $61 per day; and (c) reimbursement for mileage actually incurred for travel between his home and Albany. To receive those payments, SCARBOROUGH was required to submit travel vouchers to the New York State Assembly Finance Department certifying his dates of travel to and from Albany; the number of miles he traveled to and from Albany; the purpose of his travel; the days he was in Albany; and his eligibility for payment for either full per diem or partial per diem on each of those days. He also had to certify that the claimed amount was "just, true, and correct."
As part of his federal plea, SCARBOROUGH admitted that from January 2009 through December 2012 he submitted 174 fraudulent New York State Assembly Travel Vouchers to the Assembly Finance Department causing New York State to pay him $54,355 that he was not entitled to receive. In the fraudulent vouchers, SCARBOROUGH falsely certified that he had been in Albany for legislative business on specific days when he had not been in Albany at all, had been in Albany for less time than he claimed on a voucher, or had not stayed overnight.
The state charges arose from an ongoing effort between Schneiderman and DiNapoli known as "Operation Integrity" and conducted with the FBI Public Corruption Task Force. In his state plea agreement, SCARBOROUGH will admit that between January of 2007 and March of 2014, he stole from the "Friends of Bill Scarborough" campaign committee by making over $38,000 in unauthorized cash withdrawals and transfers from his campaign account for his own personal use, and taking checks totaling $3,450 which were intended as donations to "Friends of Bill Scarborough" and instead depositing them directly into his personal bank. In furtherance of this scheme, SCARBOROUGH will admit that, over the seven year period, he caused his campaign committee to file twenty-one false reports to the New York State Board of Elections that failed to reflect these larcenies.
U.S. Attorney Richard S. Hartunian said, "My office is committed to rooting out corruption in the state legislature, without regard to party, position, power, or popularity. There is no delight in the downfall of a duly elected representative, but Mr. Scarborough chose personal gain over the public trust. Complaints of financial distress -- something many people experience -- provide a poor excuse for Mr. Scarborough’s misconduct, which involved a four year scheme to defraud by abusing the New York State Assembly’s travel voucher system. He falsely obtained $54,355, and now must face the consequences of his actions. I commend the Federal Bureau of Investigation, the Office of New York State Attorney General Eric Schneiderman, and the Office of New York State Comptroller Thomas DiNapoli for their outstanding work and collaborative efforts here. This case is the result of interagency cooperation at its best."
"Today Assemblymember Scarborough pleaded guilty to crimes that betrayed his constituents and the taxpayers of the State of New York--crimes that will send him to jail under this plea agreement," said Attorney General Eric T. Schneiderman. "While he will pay the price for his individual crimes, we need to channel public outrage at the ongoing corruption scandals into a movement for comprehensive reform. We have done this before in New York, and we can do it again." The Attorney General’s Office thanked the Federal Bureau of Investigation and the United States Attorney’s Office for the Northern District of New York for their collaboration on this case.
"Public service means just that: serving the public. Mr. Scarborough abused his public office for personal gain and now faces the consequences of his actions," said Comptroller Thomas P. DiNapoli. "I commend Attorney General Schneiderman, U.S. Attorney Hartunian, and the Federal Bureau of Investigation for their commitment and for our continued partnership in rooting out corruption and protecting public funds."
"American taxpayers deserve honesty from public officials," said Special Agent in Charge Andrew W. Vale. "Those involved in acts of corruption and blatant greed will be held accountable for their actions, and we will continue to pursue those like Mr. Scarborough who sell their integrity at the public’s expense."
The federal case was investigated by the Federal Bureau of Investigation, Albany Division, and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Prosecuting the state case is Assistant Attorney General Christopher Baynes of the Attorney General’s Public Integrity Bureau, which is led by Deputy Bureau Chief Stacy Aronowitz and Bureau Chief Daniel Cort. Kelly Donovan is the Executive Deputy Attorney General for Criminal Justice. The state’s investigation was handled by Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam of the Investigation Bureau, which is led by Chief Dominick Zarrella. Forensic auditor Jason Blair and legal analyst Sara Pogorzelski provided additional assistance.
The State Comptroller’s Division of Investigations conducted the investigation for Comptroller DiNapoli's Office.
Two Plead Guilty to Sex Trafficking of a MinorRead the Press Release
FRESNO, Calif. — Fresno residents Michael Anthony Andrade, 34, and Javier Solis, 29, pleaded guilty today to sex trafficking of a minor, United States Attorney Benjamin B. Wagner announced.
According to court documents, Andrade and Solis forced two girls, ages 15 and 17, to prostitute themselves first in Fresno and then in San Luis Obispo. In addition, the 15‑year-old girl was taken to a tattoo parlor in Fresno where the defendants’ nicknames were tattooed on her, one name on each shoulder.
Court documents further reflect the 17-year-old, a runaway, spoke with Fresno Police officers on October 24, 2013, after her mother brought her home from San Luis Obispo. While being interviewed, she told officers about the 15-year-old who was still in San Luis Obispo under the control of the defendants as well as the motel where she was staying. In response, the San Luis Obispo Police Department was contacted, and officers were able to successfully remove her from that location.
Solis is scheduled to be sentenced on August 10, 2015, and Andrade is scheduled to be sentenced on August 17, 2015. Each faces a sentence of 10 years to life in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the Federal Bureau of Investigation, the Fresno Police Department, the San Luis Obispo Police Department and the San Luis Obispo District Attorney’s Office. Assistant United States Attorneys Michael Frye and Mia Giacomazzi are prosecuting the case.
Two Men Sentenced to Prison for Fraudulent Loan SchemeRead the Press Release
CHARLOTTE, N.C. – On Wednesday, May 6, 2015, U.S. District Judge Robert J. Conrad, Jr. sentenced to prison two men for their role in a scheme involving more than $1 million in fraudulent automobile and personal loans, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.
Shawn Davis, 44, of Huntersville, N.C. and Darren Eugene Littles, 47, of Charlotte, were sentenced to 30 months and 27 months in prison, respectively, followed by a three years of supervised release. Judge Conrad also ordered Littles to pay $394,784.50 and Davis $45,284.04 as restitution. Davis and Littles each pleaded guilty to one count of bank fraud conspiracy and one count of financial institution fraud.
Acting U.S. Attorney Rose is joined in making today’s announcement by Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division.
Two additional defendants charged in connection with the scheme were sentenced on March 30, 2015.Kimberly Arnell Cureton, 45, of Rock Hill, S.C. was sentenced to 24 months in prison and one year of supervised release.She pleaded guilty to aggravated identity theft.Kevin Lamone Desmore, 43, of Durham, N.C., was sentenced to 15 months in prison and three years of supervised release.Desmore pleaded guilty to bank fraud conspiracy and making a false statement on a loan application.
According to filed court documents and yesterday’s court proceedings, the defendants conspired with each other and obtained automobile and personal loans from financial institutions by lying on the loan applications and submitting false or forged information and documentation to support the fraudulent loan packages.Court records indicate that, at times, the loan packages contained inflated prices for the automobiles to be purchased and, in many instances, the loan applicants failed to make the required loan payments but attempted to keep the funds obtained as a result of the fraudulent loan applications.
According to court records, Littles was the primary facilitator of the conspiracy.Littles recruited individuals to submit fraudulent loan applications, contacted financial institutions and submitted the fraudulent loan packages and, at times, used stolen identities of individuals or impersonated other people to facilitate the fraud.Littles received a commission based on the fraudulent auto loans deals.Court records indicate that Davis’ role in the conspiracy was to create fraudulent tax documents to support the loan applications, including fake W2s, tax returns and tax earning statements, among other things.Court records show that Davis has a previous federal conviction in connection with a 2000 investigation into bank fraud.
According to court records, Cureton served as a “credit scrubber,” who helped improve applicants’ negative credit scores, and Desmore worked as a recruiter of individuals whose information was used to fill out the fraudulent applications.On some occasions, Desmore even created fake residential leases to support the loan applications.According to court records, between 2008 and 2011 the conspirators obtained and attempted to obtain more than $1 million dollars in automobile and personal loans as a result of the conspiracy.
In handing down the two sentences, Judge Conrad noted that Davis had continued to engage in fraudulent conduct, and that Littles was “a leader in the conspiracy who facilitated the obtaining of fraudulent loans.”
The defendants were released on bond following the sentencing hearing.They will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility, to begin serving their sentences.All federal sentences are served without the possibility of parole.
The U.S. Secret Service investigated the case.Assistant U.S. Attorney Kenneth Smith was in charge of the prosecution.
Two Boston Women Sentenced for Roles in Sex Trafficking OrganizationRead the Press Release
BOSTON – Two Boston women were sentenced in U.S. District Court in Boston for transporting other women across state lines to engage in prostitution.
Vanessa Grandoit, 26, of Roxbury, was sentenced today to one year and one day in prison and five years of supervised release. Kairis Sanchez, a/k/a “Lola,” of Dorchester and Portland, Maine, was sentenced on April 29, 2015, to 18 months in prison and five years of supervised release. Both women pleaded guilty to one count each of transportation to engage in criminal sexual activity.
Grandoit and Sanchez were both charged in indictments that named other individuals in a larger sex trafficking organization. Specifically, co-defendants Raymond Jeffreys, a/k/a “Skame Dollarz,” “Skame,” “Skamen,” “Define Dollarz,” and “Frenchy,” 27, of Dorchester, Jamaica Plain, and Portland, Maine; and Corey Norris, a/k/a “Case,” and “Jacorey Johnson,” 25, of Dorchester, were charged with the trafficking and transportation of nine victims, six of whom were under the age of 18, for the purposes of prostitution in Massachusetts, Maine, New Hampshire, Vermont, Rhode Island, Connecticut, Pennsylvania, New Jersey, New York, Maryland, Nevada, Georgia, Florida, and California. Grandoit and Sanchez provided logistical support to Jeffreys and Norris at various times, including by driving particular prostitutes across state lines.
In addition to the sex trafficking charges, Jeffreys and another defendant, Jaquan Casanova a/k/a “Cass,” “Joffe,” “Joffy,” and “Joffy Joe,” 24, of Dorchester, were charged in a third superseding indictment with tampering with a federal witness by attempting to kill him and with conspiring with each other to do so. The victim of the shooting is Darian Thomson, a/k/a “Bo,” “Dee Bo,” himself a former co-defendant in the sex-trafficking operation. According to the allegations in the third superseding indictment, in April 2013, Thomson was released from state custody on unrelated state charges in New Jersey and returned to Boston where he was shot in the head by Casanova at the direction of Jeffreys. The third superseding indictment alleges that Jeffreys believed that Thomson had cooperated with law enforcement in New Jersey and directed the shooting of Thomson with the intent to kill him in order to prevent Thomson from providing information to federal law enforcement regarding his and Norris’ sex trafficking activities.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and Boston Police Commissioner William Evans, made the announcement today. The witness tampering charges were investigated jointly by HSI and the Boston Police Department’s Human Trafficking Unit and Homicide Unit. The sex trafficking charges were investigated jointly by HSI, BPD, and the FBI.
The U.S. Attorney’s Office also wishes to recognize and thank Shawn Meehan, Resident Agent in Charge of the HSI Portland Office; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Aaron Steps, Supervisory Senior Resident Agent in Charge of the FBI Maine Office; the Suffolk County District Attorney’s Office; Cumberland County (Maine) District Attorney’s Office; the United States Attorney’s Office for the District of Maine; the Massachusetts State Police; the Portland (Maine), Old Town (Maine), Braintree, and South Portland (Maine) Police Departments; the Maine Drug Enforcement Agency; and the Cumberland County Sheriff’s Office. This case is being prosecuted by Assistant United States Attorneys Amy Harman Burkart and Christopher Pohl of Ortiz’s Civil Rights Enforcement Team and Special Assistant United States Attorney and Suffolk County Assistant District Attorney David S. Bradley.
Three Charged in Aggravated Identity Theft and Wire Fraud SchemeRead the Press Release
HOUSTON - A nine-count federal indictment has been returned against Chloe McClendon, 26, Domonique Thomas, 25, and Alicia Myles, 31, all of Houston, alleging they engaged in an aggravated identity theft scheme involving the theft of personally identifiable information from the Department of State’s Houston and Atlanta Passport Agencies, announced U.S. Attorney Kenneth Magidson along with Wayne May, special agent in charge of the U.S. Department of State’s Diplomatic Security Service (DSS) - Houston Field Office.
Thomas was taken into custody, while McClendon surrendered to federal authorities. They are expected to make their initial appearances before U.S. Magistrate Judge Frances Stacy as early as 10:00 a.m. this morning. A warrant remains outstanding for Myles.
The indictment, returned May 6, 2015, charges all three defendants with one count of conspiracy to commit wire fraud, four counts of wire fraud and four counts of aggravated identify theft.
“DSS is firmly committed to working with the U.S. Attorney’s Office and our law enforcement partners to investigate allegations of crime related to passport fraud and identity theft and to bring those who commit these crimes to justice,” said May. “When a public servant in a position of trust is alleged to have committed a federal felony such as passport fraud or identity theft, we vigorously investigate claims of corruption.”
McClendon, Thomas and Myles allegedly engaged in the wire fraud/aggravated identity theft scheme by stealing personally identifiable information of individuals from the Department of State Passport Agency. McClendon was a contract employee who worked there. The indictment alleges the defendants used the stolen and unlawfully obtained personally identifiable information of true persons to create counterfeit identification documents. They then recruited other individuals to assume the stolen identities and use the counterfeit documents to obtain commercial lines of credit and to purchase iPhones, iPads and other electronic merchandise.
The conspiracy charge and each substantive count of wire fraud carries a possible 20-year federal prison sentence as well as a possible $250,000 fine. If convicted of aggravated identify theft, the defendants also face an additional mandatory two-year prison term on each count which must be served consecutively to any other prison term imposed.
The investigation leading up to the arrest was conducted by DSS and the Houston Police Department. Assistant U.S. Attorneys Ted Imperato and Alamdar Hamdani are prosecuting this case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Three California Men and Minnesota Corporation Indicted in Nationwide Prescription Drug Diversion SchemeRead the Press Release
Three California men and a Minnesota company were charged in an indictment today in the Southern District of Ohio for their roles in a massive prescription drug diversion scheme.
The indictment alleges that David Jess Miller, 50, of Santa Ana, California; Artur Stepanyan, 38, and Mihran Stepanyan, 29, both of Encino, California, and Minnesota Independent Cooperative Inc. (MIC) engaged in a conspiracy to sell prescription drugs from illegal, unlicensed sources to wholesalers and pharmacies throughout the United States. The 12-count indictment charges the defendants with conspiracy to commit mail and wire fraud, multiple counts of mail fraud, and conspiracy to distribute prescription drugs without a license and to make false statements.
Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Director George M. Karavetsos of the U.S. Food and Drug Administration (FDA)’s Office of Criminal Investigations and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS) announced the charges.
According to the indictment, from 2007 through April 2014, David Miller and his company, MIC, of Eagan, Minnesota, purchased prescription drugs from a network of illegal and unlicensed sources in New York, Florida and California. Artur Stepanyan and Mihran Stepanyan, worked together to sell drugs from illegal sources to Miller and MIC. Artur and Mihran Stepanyan, using a variety of company names, including Panda Capital Group, Red Rock Capital Group, Trans Atlantic Capital Group and GC National Wholesale, were Miller’s largest source of illegal drugs. During the course of the conspiracy, Miller and MIC paid the Stepanyans approximately $160 million for these prescription drugs.
“American consumers should be able to rely on the prescription drug supply chain,” said Principal Deputy Assistant Attorney General Mizer. “Prescription drug diversion schemes like the one charged in this indictment undermine that supply chain and increase the risk that counterfeit, adulterated, misbranded, sub-potent or expired drugs will be sold to patients and consumers.”
To hide the true, illegal sources of their prescription drugs, David Miller and MIC falsified so-called drug pedigree documents. Pedigrees are documents required by law that show the source of drugs. For most of the conspiracy, the fraudulent pedigrees falsely listed B&Y Wholesale, a company located in Puerto Rico and co-owned by co-conspirator Yusef Yassin Gomez (Yassin) as the source of the drugs. The pedigree documents also falsely stated that Yassin’s company was an authorized distributor of the drugs. On Feb. 19, 2014, Yassin pleaded guilty in U.S. District Court for the Southern District of Ohio to conspiracy to engage in the wholesale distribution of prescription drugs without a wholesale license. In connection with his guilty plea, Yassin admitted the he agreed to allow Miller and MIC to use his company’s name on pedigree documents to hide the true drug sources. In exchange, Miller and MIC paid Yassin a commission on all of the drug sales.
“Once a prescription drug is diverted outside of the regulated distribution channels, it becomes difficult, if not impossible, for regulators, law enforcement and end-users to know whether the prescription drug package actually contains the correct drug or the correct dose,” said U.S. Attorney Stewart. “We will aggressively prosecute individuals and companies that ignore the law and sell illegally diverted prescription drugs to pharmacies, and ultimately, to American consumers.
“We are committed to protecting the integrity of the pharmaceutical supply chain, especially as criminals go to more extreme measures to subvert it,” said FDA’s Office of Criminal Investigations Director Karavetsos. “We will continue to pursue these criminals and work to bring them to justice.”
“The Postal Inspection Service is proud to partner with the FDA Office of Criminal Investigations to bring to bear our mail fraud expertise to help the fight against drug diversion,” said USPIS Assistant Inspector in Charge White.
Throughout the course of the conspiracy charged in the indictment, using these fraudulent pedigree documents, Miller and MIC sold approximately $393 million worth of prescription drugs to wholesalers and retail pharmacies throughout the United States, including to multiple customers in the Southern District of Ohio.
In addition to Yassin, two of Miller’s other illegal drug suppliers, Peter Kats and Joseph Dallal, previously pleaded guilty to conspiracy to commit mail and wire fraud for their sales of illegally-diverted prescription drugs to Miller and MIC.
This matter is being investigated by the FDA and USPIS. Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of the Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are prosecuting this case.
David Miller, Artur Stepanyan, and Mihran Stepanyan were charged amongst 30 other individuals in the Northern District of California in a separate indictment on charges including federal Racketeer Influenced and Corrupt Organizations (RICO) Act; conspiracy to commit identity theft; conspiracy to commit access device fraud; conspiracy to commit mail, wire, and bank fraud; money laundering conspiracy; and conspiracy to distribute prescription drugs without a wholesale license.
The charges in the indictment are merely allegations, and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Three California Men and Minnesota Corporation Indicted in Nationwide Prescription Drug Diversion SchemeRead the Press Release
WASHINGTON – Three California men and a Minnesota company were charged in an indictment today in the Southern District of Ohio for their roles in a massive prescription drug diversion scheme.
The indictment alleges that David Jess Miller, 50, of Santa Ana, California; Artur Stepanyan, 38, and Mihran Stepanyan, 29, both of Encino, California, and Minnesota Independent Cooperative Inc. (MIC) engaged in a conspiracy to sell prescription drugs from illegal, unlicensed sources to wholesalers and pharmacies throughout the United States. The 12-count indictment charges the defendants with conspiracy to commit mail and wire fraud, multiple counts of mail fraud, and conspiracy to distribute prescription drugs without a license and to make false statements.
Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Director George M. Karavetsos of the U.S. Food and Drug Administration (FDA)’s Office of Criminal Investigations and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS) announced the charges.
According to the indictment, from 2007 through April 2014, David Miller and his company, MIC, of Eagan, Minnesota, purchased prescription drugs from a network of illegal and unlicensed sources in New York, Florida and California. Artur Stepanyan and Mihran Stepanyan, worked together to sell drugs from illegal sources to Miller and MIC. Artur and Mihran Stepanyan, using a variety of company names, including Panda Capital Group, Red Rock Capital Group, Trans Atlantic Capital Group and GC National Wholesale, were Miller’s largest source of illegal drugs. During the course of the conspiracy, Miller and MIC paid the Stepanyans approximately $160 million for these prescription drugs.
“American consumers should be able to rely on the prescription drug supply chain,” said Principal Deputy Assistant Attorney General Mizer. “Prescription drug diversion schemes like the one charged in this indictment undermine that supply chain and increase the risk that counterfeit, adulterated, misbranded, sub-potent or expired drugs will be sold to patients and consumers.”
To hide the true, illegal sources of their prescription drugs, David Miller and MIC falsified so-called drug pedigree documents. Pedigrees are documents required by law that show the source of drugs. For most of the conspiracy, the fraudulent pedigrees falsely listed B&Y Wholesale, a company located in Puerto Rico and co-owned by co-conspirator Yusef Yassin Gomez (Yassin) as the source of the drugs. The pedigree documents also falsely stated that Yassin’s company was an authorized distributor of the drugs. On Feb. 19, 2014, Yassin pleaded guilty in U.S. District Court for the Southern District of Ohio to conspiracy to engage in the wholesale distribution of prescription drugs without a wholesale license. In connection with his guilty plea, Yassin admitted the he agreed to allow Miller and MIC to use his company’s name on pedigree documents to hide the true drug sources. In exchange, Miller and MIC paid Yassin a commission on all of the drug sales.
“Once a prescription drug is diverted outside of the regulated distribution channels, it becomes difficult, if not impossible, for regulators, law enforcement and end-users to know whether the prescription drug package actually contains the correct drug or the correct dose,” said U.S. Attorney Stewart. “We will aggressively prosecute individuals and companies that ignore the law and sell illegally diverted prescription drugs to pharmacies, and ultimately, to American consumers.
“We are committed to protecting the integrity of the pharmaceutical supply chain, especially as criminals go to more extreme measures to subvert it,” said FDA’s Office of Criminal Investigations Director Karavetsos. “We will continue to pursue these criminals and work to bring them to justice.”
“The Postal Inspection Service is proud to partner with the FDA Office of Criminal Investigations to bring to bear our mail fraud expertise to help the fight against drug diversion,” said USPIS Assistant Inspector in Charge White.
Throughout the course of the conspiracy charged in the indictment, using these fraudulent pedigree documents, Miller and MIC sold approximately $393 million worth of prescription drugs to wholesalers and retail pharmacies throughout the United States, including to multiple customers in the Southern District of Ohio.
In addition to Yassin, two of Miller’s other illegal drug suppliers, Peter Kats and Joseph Dallal, previously pleaded guilty to conspiracy to commit mail and wire fraud for their sales of illegally-diverted prescription drugs to Miller and MIC.
This matter is being investigated by the FDA and USPIS. Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of the Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are prosecuting this case.
David Miller, Artur Stepanyan, and Mihran Stepanyan were charged amongst 30 other individuals in the Northern District of California in a separate indictment on charges including federal Racketeer Influenced and Corrupt Organizations (RICO) Act; conspiracy to commit identity theft; conspiracy to commit access device fraud; conspiracy to commit mail, wire, and bank fraud; money laundering conspiracy; and conspiracy to distribute prescription drugs without a wholesale license.
The charges in the indictment are merely allegations, and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Thirty-Three Defendants Charged in Massive Criminal Conspiracies Including Allegations of Fraud, Prescription Drug Diversion, and Money LaunderingRead the Press Release
Thirty-two people were arrested yesterday after being charged variously with racketeering conspiracy, conspiracy to commit identity theft, conspiracy to commit access device fraud, conspiracy to commit mail, wire and bank fraud, conspiracy to commit money laundering, conspiracy to use a facility of interstate commerce to commit murder-for-hire and conspiracy to engage in the unlicensed wholesale distribution of drugs, announced U.S. Attorney Melinda Haag of the Northern District of California, Special Agent in Charge David J. Johnson of the Federal Bureau of Investigation, and Special Agent in Charge José M. Martinez of Internal Revenue Service (IRS) Criminal Investigation. A thirty-third defendant remains at large and is subject to an active arrest warrant.
According to an indictment that was unsealed yesterday, Ara Karapedyan, 45, Mihran Stepanyan, 29, and Artur Stepanyan, 38, were at the center of a nationwide conspiracy—with at least 18 other person—to conduct the affairs of a wide-ranging criminal enterprise through a pattern of racketeering. This enterprise was fueled by a broad range of criminal activity including unlicensed wholesale drug distribution, money laundering and fraud. The indictment names 33 defendants in all and describes an enterprise that spanned throughout California as well as in Minnesota, Ohio and Puerto Rico.
One key aspect of the alleged criminal activity described in the indictment was a multi-million dollar prescription drug diversion scheme. Members and associates of the enterprise are alleged to have procured prescription drugs from unlicensed sources and to have resold the drugs to unknowing customers. A central figure to these allegations is David Miller, 50. Miller is alleged to be the owner and operator of a drug wholesaler called Minnesota Independent Cooperative (MIC) that, between 2010 and 2014, bought approximately $157 million of drugs from Mihran Stepanyan and Artur Stepanyan. Miller and his employees allegedly knew the Stepanyans were not licensed to sell drugs and knew the Stepanyans procured their drugs through unlicensed sources. Miller and his employees nevertheless purchased the drugs from the Stepanyans’ various companies, including Panda Capital Group, Red Rock Capital, Trans Atlantic Capital, GC National Wholesale, Sky Atlantic Capital and Nationwide Payment Solutions and resold the drugs as legitimate products.
A separate investigation has resulted in another indictment in the Southern District of Ohio charging David Miller, Mihran Stepanyan, Artur Stepanyan and MIC with various crimes arising from their sale of millions of dollars of illicitly-procured drugs.
The indictment also charges Karapedyan and his associates with engaging in the fraudulent unlicensed distribution of drugs. For instance, from 2013 through 2015, Karapedyan, either personally or through an associate, sold several hundred thousand dollars’ worth of drugs such as Abilify, Liboderm, Cymbalta and Namenda, as well as HIV drugs such as Atripla, Truvada and Isentress and the cancer drug Gleevec. Likewise, from roughly the latter part of 2014 through early 2015, Karapdyan and his racketeer co-conspirator Maxwell Starsky, 36, sold to another complicit wholesaler more than $1 million in illicitly procured drugs. Karapedyan also supplied the Stepanyans with drugs.
Hugo Marquez, 41, Eric Figueroa, 29, Arman Zagaryan, 32, and their associates are likewise charged with procuring drugs from unlicensed sources and distributing the drugs to buyers. According to the indictment, Alexander Soliman, 46, was one of their principal customers. Between roughly 2012 and 2014, Soliman, through his companies Apex Pharmaceuticals and Maroon Pharma, knowingly purchased illicitly-procured drugs from Marquez, Figueroa and Zagaryan and then re-sold them as legitimate drugs. During this time period, Marquez, Figueroa, Zargaryan and Soliman engaged in the distribution of more than $20 million worth of drugs.
Another aspect of the alleged criminal activity is a massive check and bank fraud operation. As part of the enterprise, Karapedyan and his associates, including Asatour Magzanyan, 53, Tigran Sarkisyan, 38, and Hripsime Khachtryan, 41, allegedly used fraudulent identification information to prepare fraudulent tax returns, which were then filed with the government in order to induce the U.S. Treasury to issue tax refund checks. Karapedyan associate Khachig Geuydjian, 74, allegedly used his unlicensed mail-box business to provide addresses for these fraudulent tax filings. They and other members and associates of the enterprise then negotiated the tax refund checks using fraudulent identities or through a complicit check cashing business operated by Jean Dukmajian, 61, Karine Dukmajian, 33, and Angela Dukmajian, 26. In addition to the tax refund scheme, members and associates of the enterprise also engaged in negotiating counterfeit and stolen checks. In all, from roughly late 2012 to late 2014, Karapedyan and his associates negotiated more than 500 fraudulent checks worth more than $5 million.
In addition to the fraudulent unlicensed distribution of drugs and negotiating fraudulent checks, Karapedyan, the Stepanyans, Miller and others are charged with conspiring to launder money in an effort to promote their criminal activities and to conceal proceeds collected from their criminal activities. For example, a description of Miller’s activity between 2012 through 2014, wherein he attempted to hide the fact he was paying the Stepanyans for drugs is alleged in the indictment. The indictment further alleges Miller made the payments to the Stepanyans’ company GC National Wholesale through companies in Puerto Rico he controlled, such as B&Y Wholesalers and FMC Distributors. The payments were for sales of drugs that the Stepanyans actually delivered to Miller’s company MIC. Similarly, the indictment includes allegations Karapedyan and Starsky also arranged payments for more than $1 million of illicitly-procured drugs through a shell company. In addition, Karapedyan also allegedly laundered money for the Stepanyans. According to the indictment, in 2013, the Stepanyans transferred more than $1 million in proceeds derived from MIC to Karapedyan, who caused the money to be withdrawn as cash.
Furthermore, in addition to the foregoing, defendants Karapedyan and Gevork Ter-Mkrtchyan are charged with conspiring to use a facility of interstate commerce to commit murder-for-hire. According to the indictment, these defendants made several attempts to find a person who would be willing to kill someone who had angered Ter-Mkrtchyan. Although the defendants paid $1,500 for the hit, it was never carried out.
According to the indictment, a significant portion of the criminal activity took place in the Northern District of California. For example, one delivery of drugs took place in the Northern District of California and many of the checks were negotiated in the Northern District as well. In addition, much of the proceeds from the check and the drug schemes were laundered through the Northern District of California, where Karapedyan and his associates regularly picked up large amounts of cash. In addition, Miller’s company, MIC, posted fraudulent information relating to the origins of the drugs he sold via a website. The website was maintained by an Internet service provider in the Northern District of California. Furthermore, Karapedyan made numerous calls to the Northern District of California in order to find individuals willing to perform the hit he sought.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. All the defendants except Miller were arrested yesterday. Miller remains at large and is the subject of an active arrest warrant.
In sum, the indictment includes seven counts as follows: count One, RICO conspiracy, in violation of 18 U.S.C. § 1962(d) (maximum term of imprisonment, life or 20 years); Count Two, conspiracy to commit identity theft, in violation of 18 U.S.C. § 1028(f) (maximum term of imprisonment, 15 years); Count Three, conspiracy to commit access device fraud, 18 U.S.C. § 1029(b)(2) (maximum term of imprisonment, 5 years); Count Four, conspiracy to commit mail, wire, and bank fraud, in violation of 18 U.S.C. § 1349; Count Five, conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h) (maximum term of imprisonment, 20 years); Count Six, conspiracy to use interstate facility to commit murder-for-hire, in violation of 18 U.S.C. § 1958); Count Seven, conspiracy to engage in unlicensed wholesale distribution of drugs, in violation of 18 U.S.C. § 371 (maximum term of imprisonment, 5 years).
The following charges apply as against the following defendants are: Ara Karapedyan on Counts one through seven, Mihran Stepanyan on counts one through five and seven, Artur Stepanyan on counts one through five and seven, Gevork Ter-Mkrtchyan on counts 1-7, Khachig Geuydjian on counts one through five, Arman Petrosyan on counts one through five, Lanna Karapedyan on counts one through five, Maxwell Starsky on counts one through five and seven, Sevak Gharghani on counts one through five and seven, Jean Dukmajian, on counts one through five, Karine Dukmajian on counts one through five, Angela Dukmajian on counts one through five, Arman Danielian count one, four, five and seven, Asatour Magzanyan conts one through five, Tigran Sarkisyan counts one through five, Hripsime Khachtryan counts one through five, Loui Artin on counts one through five, Hugo Marquez on counts one through five and seven, Arman Zargaryan on counts one through five and seven, Dmitriy Kustov on counts two through four, Michael Inman on counts two through four, Araxia Nazaryian on counts two five and seven, Alexander Soliman on counts four, five and seven, Cheryl Barndt on counts four, five and seven, Eric Figueroa on counts four, five and seven, Marc Asheghian on counts four, five and seven, Michael Asheghian on counts four, five and seven, David Milleron counts one through five and seven, James Russoon on counts four, five and seven, Jeannette Couch counts four, five and seven, Marie Polichetti counts four, five and seven, Bernardo Guillen counts four, five and seven, Javier Ramirez on counts four and seven.
Additional periods of supervised release, fines and special assessments also could be imposed. Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thirty-one defendants appeared before the Honorable Victor B. Kenton and Michael R. Wilner in the Central District of California on Wednesday, May 6, 2015, to be advised of the charges against them and to determine conditions of release. Some of those hearings have been continued at the request of the defendants. Specifically, the bail hearing for Eric Figueroa has been continued to Friday, May 8, 2015, and the hearings for Hugo Marquez and Michael Inman have been continued to Monday, May 11, 2015, before the Honorable Michael R. Wilner. In addition, Karapedyan will appear on Friday, May 8, 2015, before the Honorable Victor B. Kenton.
Further, Ter-Mkrtchyan has requested a hearing in which the government will be required to prove his identity, i.e., that he is the individual named in the indictment. That hearing will occur on Friday, May 8, 2015, before the Honorable Victor B. Kenton.
The remaining 26 defendants have been ordered to appear before the Honorable Jacqueline Scott Corley in the Northern District of California. Alexander Soliman, Araxia Nazaryian and Asatour Magzanyan will appear on May 12, 2015. Cheryl Barndt, Marc Asheghian, Michael Asheghian, Hripsime Khachtryan, Bernardo Guillen, Javier Ramirez, Jean Dukmajian, Karine Dukmajian, Angela Dukmajian, Khachig Geuydjian and Arman Zargaryan will appear on May 20, 2015. Jeannette Couch, Loui Artin, Dmitriy Kustov, Marie Polichetti, Arman Danielian, Lanna Karapedyan, Sevak Gharghani, Arman Petrosyan and Maxwell Starsky will appear on May 22, 2015.
Mihran Stepanyan, Artur Stepanyan and Tigran Sarkisyan are being transported to the Northern District of California by the U.S. Marshal Service and will make court appearances after their arrival.
Assistant U.S. Attorneys Damali A. Taylor, David Countryman and W.S. Wilson Leung are prosecuting the case with the assistance of Lance Libatique, Ponly Tu, Daniel Charlier-Smith. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.
Thirty-Three Defendants Charged in Massive Criminal Conspiracies Including Allegations of Fraud, Prescription Drug Diversion, and Money LaunderingRead the Press Release
SAN FRANCISCO – Thirty-two people were arrested yesterday after being charged variously with racketeering conspiracy; conspiracy to commit identity theft; conspiracy to commit access device fraud; conspiracy to commit mail, wire, and bank fraud; conspiracy to commit money laundering; conspiracy to use a facility of interstate commerce to commit murder-for-hire; and conspiracy to engage in the unlicensed wholesale distribution of drugs, announced United States Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez. A thirty-third defendant remains at large and is subject to an active arrest warrant.
According to an indictment that was unsealed yesterday, Ara Karapedyan, 45, Mihran Stepanyan, 29, and Artur Stepanyan, 38, were at the center of a nationwide conspiracy, with at least eighteen other persons, to conduct the affairs of a wide-ranging criminal enterprise through a pattern of racketeering. This enterprise – referred to in the indictment as the “Karapedyan-Stepanyan Enterprise” – was fueled by a broad range of criminal activity including: (1) unlicensed wholesale drug distribution; (2) money laundering and (3) fraud. The indictment names thirty-three defendants in all and describes an enterprise that spanned throughout California as well as in Minnesota, Ohio, and Puerto Rico.
One key aspect of the alleged criminal activity described in the indictment was a multi-million dollar prescription drug diversion scheme. Members and associates of the enterprise are alleged to have procured prescription drugs from unlicensed sources and to have resold the drugs to unknowing customers. A central figure to these allegations is David Miller, 50. Miller is alleged to be the owner and operator of a drug wholesaler called Minnesota Independent Cooperative (“MIC”) that, between 2010 and 2014, bought approximately $157 million of drugs from Mihran Stepanyan and Artur Stepanayan. Miller and his employees allegedly knew the Stepanyans were not licensed to sell drugs and knew the Stepanyans procured their drugs through unlicensed sources. Miller and his employees nevertheless purchased the drugs from the Stepanyans’ various companies, including Panda Capital Group, Red Rock Capital, Trans Atlantic Capital, GC National Wholesale, Sky Atlantic Capital, and Nationwide Payment Solutions, and resold the drugs as legitimate products.
A separate investigation has resulted in another indictment in the Southern District of Ohio charging David Miller, Mihran Stepanyan, Artur Stepanyan, and MIC with various crimes arising from their sale of millions of dollars of illicitly-procured drugs. (United States v. Miller, et al., 15 CR 00052 (MRB) (S.D. Ohio).) http://www.justice.gov/opa/pr/three-california-men-and-minnesota-corporation-indicted-nationwide-prescription-drug
The Indictment also charges Karapedyan and his associates with engaging in the fraudulent unlicensed distribution of drugs. For instance, from 2013 through 2015, Karapedyan, either personally or through an associate, sold several hundred thousand dollars’ worth of drugs such as Abilify, Liboderm, Cymbalta, and Namenda, as well as HIV drugs such as Atripla, Truvada, and Isentress, and the cancer drug Gleevec. Likewise, from roughly the latter part of 2014 through early 2015, Karapdyan and his racketeer co-conspirator Maxwell Starsky, 36, sold to another complicit wholesaler more than $1 million in illicitly procured drugs. Karapedyan also supplied the Stepanyans with drugs.
Hugo Marquez, 41, Eric Figueroa, 29, Arman Zagaryan, 32, and their associates are likewise charged with procuring drugs from unlicensed sources and distributing the drugs to buyers. According to the indictment, Alexander Soliman, 46, was one of their principal customers. Between roughly 2012 and 2014, Soliman, through his companies Apex Pharmaceuticals and Maroon Pharma, knowingly purchased illicitly-procured drugs from Marquez, Figueroa, and Zagaryan and then re-sold them as legitimate drugs. During this time period, Marquez, Figueroa, Zargaryan, and Soliman engaged in the distribution of more than $20 million worth of drugs.
Another aspect of the alleged criminal activity is a massive check and bank fraud operation. As part of the enterprise, Karapedyan and his associates, including Asatour Magzanyan, 53, Tigran Sarkisyan, 38, and Hripsime Khachtryan, 41, allegedly used fraudulent identification information to prepare fraudulent tax returns, which were then filed with the government in order to induce the U.S. Treasury to issue tax refund checks. Karapedyan associate Khachig Geuydjian, 74, allegedly used his unlicensed mail-box business to provide addresses for these fraudulent tax filings. They and other members and associates of the enterprise then negotiated the tax refund checks using fraudulent identities or through a complicit check cashing business operated by Jean Dukmajian, 61, Karine Dukmajian, 33, and Angela Dukmajian, 26. In addition to the tax refund scheme, members and associates of the enterprise also engaged in negotiating counterfeit and stolen checks. In all, from roughly late 2012 to late 2014, Karapedyan and his associates negotiated more than 500 fraudulent checks worth more than $5 million.
In addition to the fraudulent unlicensed distribution of drugs and negotiating fraudulent checks, Karapedyan, the Stepanyans, Miller, and others are charged with conspiring to launder money in an effort to promote their criminal activities and to conceal proceeds collected from their criminal activities. For example, a description of Miller’s activity between 2012 through 2014, wherein he attempted to hide the fact he was paying the Stepanyans for drugs is alleged in the indictment. The indictment further alleges Miller made the payments to the Stepanyans’ company GC National Wholesale through companies in Puerto Rico he controlled, such as B&Y Wholesalers and FMC Distributors. The payments were for sales of drugs that the Stepanyans actually delivered to Miller’s company MIC. Similarly, the indictment includes allegations Karapedyan and Starsky also arranged payments for more than $1 million of illicitly-procured drugs through a shell company. In addition, Karapedyan also allegedly laundered money for the Stepanyans. According to the indictment, in 2013, the Stepanyans transferred more than $1 million in proceeds derived from MIC to Karapedyan, who caused the money to be withdrawn as cash.
Furthermore, in addition to the foregoing, defendants Ara Karapedyan and Gevork Ter-Mkrtchyan are charged with conspiring to use a facility of interstate commerce to commit murder-for-hire. According to the indictment, these defendants made several attempts to find a person who would be willing to kill someone who had angered Ter-Mkrtchyan. Although the defendants paid $1,500 for the hit, it was never carried out.
According to the indictment, a significant portion of the criminal activity took place in the Northern District of California. For example, one delivery of drugs took place in the Northern District of California and many of the checks were negotiated in the Northern District as well. In addition, much of the proceeds from the check and the drug schemes were laundered through the Northern District of California, where Karapedyan and his associates regularly picked up large amounts of cash. In addition, Miller’s company, MIC, posted fraudulent information relating to the origins of the drugs he sold via a website. The website was maintained by an Internet Service Provider in the Northern District of California. Furthermore, Karapedyan made numerous calls to the Northern District of California in order to find individuals willing to perform the hit he sought.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. All the defendants except David Miller were arrested yesterday; Miller remains at large and is the subject of an active arrest warrant.
In sum, the indictment includes seven counts as follows: Count One, RICO conspiracy, in violation of 18 U.S.C. § 1962(d) (maximum term of imprisonment, life or 20 years); Count Two, conspiracy to commit identity theft, in violation of 18 U.S.C. § 1028(f) (maximum term of imprisonment, 15 years); Count Three, conspiracy to commit access device fraud, 18 U.S.C. § 1029(b)(2) (maximum term of imprisonment, 5 years); Count Four, conspiracy to commit mail, wire, and bank fraud, in violation of 18 U.S.C. § 1349; Count five, conspiracy to commit money laundering , in violation of 18 U.S.C. § 1956(h); (maximum term of imprisonment, 20 years) Count Six, conspiracy to use interstate facility to commit murder-for-hire, in violation of 18 U.S.C. § 1958); Count Seven, conspiracy to engage in unlicensed wholesale distribution of drugs, in violation of 18 U.S.C. § 371 (maximum term of imprisonment, 5 years).
The following charges apply as against the following defendants:
DEFENDANT ALLEGED VIOLATIONS MAXIMUM PENALTY(1) ARA KARAPEDYAN
Counts 1-7
Life plus 85 years
(2) MIHRAN STEPANYAN
Counts 1-5 and 7
95 years
(3) ARTUR STEPANYAN
Counts 1-5 and 7
95 years
(4) GEVORK TER-MKRTCHYAN
Counts 1-7
Life plus 85 years
(5) KHACHIG GEUYDJIAN
Counts 1-5
90 years
(6) ARMAN PETROSYAN
Counts 1-5
90 years
(7) LANNA KARAPEDYAN
Counts 1-5
90 years
(8) MAXWELL STARSKY
Counts 1-5, and 7
95 years
(9) SEVAK GHARGHANI
Counts 1-5, and 7
95 years
(10) JEAN DUKMAJIAN
Counts 1-5
90 years
(11) KARINE DUKMAJIAN
Counts 1-5
90 years
(12) ANGELA DUKMAJIAN
Counts 1-5
90 years
(13) ARMAN DANIELIAN
Counts 1, 4, 5, and 7
75 years
(14) ASATOUR MAGZANYAN
Counts 1-5
90 years
(15) TIGRAN SARKISYAN
Counts 1-5
90 years
(16) HRIPSIME KHACHTRYAN
Counts 1-5
90 years
(17) LOUI ARTIN
Counts 1-5
90 years
(18) HUGO MARQUEZ
Counts 1-5 and 7
95 years
(19) ARMAN ZARGARYAN
Counts 1-5 and 7
95 years
(20) DMITRIY KUSTOV
Counts 2-4
50 years
(21) MICHAEL INMAN
Counts 2-4
50 years
(22) ARAXIA NAZARYIAN
Counts 2-5 and 7
75 years
(23) ALEXANDER SOLIMAN
Counts 4, 5 and 7
55 years
(24) CHERYL BARNDT
Counts 4, 5 and 7
55 years
(25) ERIC FIGUEROA
Counts 4, 5 and 7
55 years
(26) MARC ASHEGHIAN
Counts 4, 5 and 7
55 years
(27) MICHAEL ASHEGHIAN
Counts 4, 5 and 7
55 years
(28) DAVID MILLER
Counts 1-5 and 7
95 years
(29) JAMES RUSSO
Counts 4, 5 and 7
55 years
(30) JEANNETTE COUCH
Counts 4, 5 and 7
55 years
(31) MARIE POLICHETTI
Counts 4, 5 and 7
55 years
(32) BERNARDO GUILLEN
Counts 4, 5 and 7
55 years
(33) JAVIER RAMIREZ
Counts 4 and 7
35 years
Additional periods of supervised release, fines, and special assessments also could be imposed. Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thirty-one defendants appeared before the Honorable Victor B. Kenton and Michael R. Wilner in the Central District of California on Wednesday, May 6, 2015, to be advised of the charges against them and to determine conditions of release. Some of those hearings have been continued at the request of the defendants. Specifically, the bail hearing for Eric Figueroa has been continued to Friday, May 8, 2015, and the hearings for Hugo Marquez and Michael Inman have been continued to Monday, May 11, 2015, before the Honorable Michael R. Wilner. In addition, Ara Karapedyan will appear on Friday, May 8, 2015, before the Honorable Victor B. Kenton.
Further, Gevork Ter-Mkrtchyan has requested a hearing in which the government will be required to prove his identity, i.e., that he is the individual named in the indictment. That hearing will occur on Friday, May 8, 2015, before the Honorable Victor B. Kenton.
The remaining 26 defendants have been ordered to appear before the Honorable Jacqueline Scott Corley in the Northern District of California on the following dates:
May 12, 2015
- Alexander Soliman
- Araxia Nazaryian
- Asatour Magzanyan
May 20, 2015- Cheryl Barndt
- Marc Asheghian
- Michael Asheghian
- Hripsime Khachtryan
- Bernardo Guillen
- Javier Ramirez
- Jean Dukmajian
- Karine Dukmajian
- Angela Dukmajian
- Khachig Geuydjian
- Arman Zargaryan
May 22, 2015- Jeannette Couch
- Loui Artin
- Dmitriy Kustov
- Marie Polichetti
- Arman Danielian
- Lanna Karapedyan
- Sevak Gharghani
- Arman Petrosyan
- Maxwell Starsky
Mihran Stepanyan, Artur Stepanyan, and Tigran Sarkisyan are being transported to the Northern District of California by the United States Marshal Service and will make court appearances after their arrival.Assistant United States Attorneys Damali A. Taylor, David Countryman, and W.S. Wilson Leung are prosecuting the case with the assistance of Lance Libatique, Ponly Tu, Daniel Charlier-Smith. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.
Texas Company Pleads Guilty to Violations of the Federal Lacey ActRead the Press Release
U.S. Attorney Kenneth A. Polite announced that GARCIA SHRIMP CO., LLC, a Texas Limited Liability Company headquartered in Brownsville, Texas, pled guilty today to a one-count Bill of Information for violating the Federal Lacey Act.
According to court documents, in early October 2012, GARCIA SHRIMP purchased 35,000 pounds of Mexican shrimp from Mexican businessmen. The shrimp was packaged in plastic crates typically used by Mexican supermarket wholesalers. After taking receipt of the shrimp, company personnel removed product of Mexico labels from the packages containing the shrimp and attached new tags indicating that the shrimp was caught in U.S. waters. Company personnel also conducted an offloading ruse, whereby the shrimp was trucked down to GARCIA SHRIMP’s dock facility and then re-weighed and wrapped to make it appear as if the shrimp was caught by a local U.S. flagged fishing vessel. Then company personnel created false documents and bills of lading that falsely read, “Product of U.S.A., Wild Caught Gulf Shrimp.” On or about October 12, 2012, GARCIA SHRIMP sold the shrimp to a New Orleans based seafood distributor.
GARCIA SHRIMP faces a maximum fine of $500,000 and an organizational probationary term of five years. U.S. District Judge Nannette Jolivette Brown set sentencing for September 24, 2015.
U.S. Attorney Polite praised the work of the U.S Department of Commerce NOAA Office of Law Enforcement, in investigating this matter. Eastern District of Louisiana Assistant U. S. Attorney Spiro G. Latsis and Department of Justice Trial Attorney Christopher L. Hale with the Environmental Crimes Section in Washington D.C. are in charge of the prosecution.
Garcia Shrimp.pdf (2.37 MB)
Tennessee Hospital Pays $1.32 Million to Settle Allegations of Improper Medicare and Medicaid BillingRead the Press Release
Jackson, TN - Jackson-Madison County General Hospital has paid the United States $1,328,465 to resolve allegations that it billed Medicare and Medicaid in connection with the placement of unnecessary cardiac stents and other unnecessary cardiac procedures.
Cardiac stents are mesh tubes placed in coronary arteries to keep the arteries open in the treatment of coronary heart disease. The other related procedures include angioplasty, catheterization, and ultrasound imaging.
Under federal law, Medicare and Medicaid reimburse hospitals only for procedures that are medically necessary. The settlement with Jackson-Madison County General Hospital resolved claims that it billed Medicare and Medicaid for these unnecessary procedures performed from January 2004 through December 2011.
"Billing Medicare for cardiac procedures that are not necessary or appropriate contributes to the soaring costs of health care and harms patients," said Edward L. Stanton III, United States Attorney for the Western District of Tennessee. "Settlements like this protect public funds and safeguard the beneficiaries of federal health care programs."
The allegations resolved by the settlement were raised in a lawsuit filed against the hospital under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. As part of the settlement, the whistleblower, Dr. Wood D. Deming, received a share of the settlement amount.
The case is captioned United States ex rel. Wood D. Deming v. Jackson-Madison County General Hosp., et al., Case No. 07-1116-SHL (W.D. Tenn.) The claims settled by this agreement are allegations only, and there has been no determination of liability.
Telluride Man Pleads Guilty to Filing $161,000 in False Claims with the IrsRead the Press Release
DENVER – Ugur Ulupinar, age 37, of Telluride, Colorado, pled guilty this week in Durango before U.S. Magistrate Judge David L. West to filing false claims with the IRS, United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Gilbert R. Garza announced. Ulupinar is scheduled to be sentenced on October 13, 2015 at 9:00 am.
Ulupinar waived his right to be indicted and thus was charged by Information on April 27, 2015. The defendant pled guilty on May 5, 2015.
According to information contained in the plea agreement as well as the charging documents, from February to May of 2012, Ulupinar knowingly filed 162 false Forms 1040, U.S. Individual Income Tax Return, with the Internal Revenue Service (IRS). Ulupinar used his business, Westax, to establish a business relationship with the Turkey based visa services company “Campus” where Ulupinar would file Forms 1040 for Campus’ clients. Clients were citizens of Turkey, and neighboring nations, and university students in their nation of origin participating in the 2010 and 2011 U.S. Summer Work Travel Program otherwise known as a J1 Visa. Campus assisted their clients in obtaining employment in the United States through the Summer Work Travel Program, and also offered tax preparation services for these clients.
Ulupinar used the information he received from Campus to prepare and file 162 Forms 1040 with the IRS for tax year 2011. These returns legally declared each client’s wages and taxes withheld; however, Ulupinar falsely claimed the American Opportunity Tax Credit (AOTC) for each client on each of the 162 Forms 1040. The AOTC is a refundable tax credit available to those U.S. Resident Aliens or Citizens who incur college tuition expenses while attending an eligible educational institution. None of the clients were Resident Aliens or Citizens of the U.S. during the applicable tax years. As a result of fraudulently claiming the AOTC, each Form 1040 claimed the refund of an additional $1,000.00 per Form 1040 which was in addition to the amount legally due each client. A total of $161,000.00 was fraudulently claimed using the AOTC.
Ulupinar knew the clients were not entitled to the AOTC because they were not U.S. Resident Aliens or Citizens who incurred tuition expenses from a qualified educational institution. Furthermore, no client provided him with any information regarding tuition payments. U.S. Treasury tax refund checks were issued in the clients names and mailed to Ulupinar’s Post Office Box in Telluride, Colorado. He would endorse the tax refund check by signing the clients name and then he counter endorsed the check with his own name before he deposited the checks into a bank account he controlled. The clients were not aware of the additional $1,000 refund attributable to the AOTC tax credit which Ulupinar would keep for himself.
As part of Ulupinar’s plea agreement, he agrees to pay $161,000 in restitution to the Internal Revenue Service.
Ulupinar pled guilty to one count of filing a false claim with the IRS, which carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000.
This case was investigated by Internal Revenue Service – Criminal Investigation and the U.S. Postal Inspection Service.
The defendant is being prosecuted by Assistant U.S. Attorney Todd Norvell in the Colorado U.S. Attorney’s Durango Branch Office.
Tahlequah Woman Sentenced to 60 Months for RacketeeringRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that AMANDA DAWN COOKSON, age 27, of Tahlequah, Oklahoma was sentenced to 60 months imprisonment, followed by 3 years of supervised release for Interstate Travel or Transportation in Aid of Racketeering Enterprises, in violation of Title 18, United States Code, Section 1952(a)(3).
The charge is a result of an investigation by the Oklahoma Bureau of Narcotics and was coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led, and coordinated by, the Office of the United States Attorney. The defendant was indicted in July, 2014 and pled guilty to an Information in November, 2014.
The Information alleged that beginning on or about August, 2012, the defendant, traveled in interstate commerce from the State of Oklahoma to Ft. Smith, Arkansas, and purchased Oxycodone from Walgreens Pharmacy with a false prescription with the intent to promote, manage, establish, carry on and facilitate the promotion, management, establishment and carrying on of an unlawful activity, that is, a business enterprise involving narcotics or controlled substances in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(C), and thereafter performed or attempted to perform an act to promote, manage, establish and carry on, and to facilitate the promotion, management, establishment and carrying on, of such unlawful activity.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal facility at which she will serve her nonparolable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
Tahlequah Man Sentenced to 60 Months for Possession of Stolen FirearmRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma, announced that RAYMOND WAYNE HOOD, age 22, of Tahlequah, Oklahoma was sentenced to 60 months imprisonment, followed by 3 years of supervised release for Possession of a Stolen Firearm, in violation of Title 18, United States Code, Section 922(j).
The charge is a result of an investigation by the Cherokee County Sheriff’s Department and the Bureau of Alcohol, Tobacco Firearms and Explosives. The defendant was indicted in September, 2014 and pled guilty to an Information in December, 2014.
The Information alleged that on or about November 26, 2012, within the Eastern District of Oklahoma, the defendant did knowingly possess and sell a stolen firearm, which had been shipped and transported in interstate commerce, knowing and having reasonable cause to believe the firearm was stolen.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal facility at which he will serve his nonparolable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
Tahlequah Man Sentenced to 60 Months for Firearm Possession in Furtherance of Drug TraffickingRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma, announced that NICHOLAS SCOTT AVERY, a/k/a Nicholas Scott, age 24, of Tahlequah, Oklahoma was sentenced to 60 months imprisonment, followed by 5 years of supervised release for Possession of a Firearm in Furtherance of Drug Trafficking Offense, in violation of Title 18, United States Code, Section 924(c)(1)(A) and 2.
The charge is a result of an investigation by the Cherokee County Sheriff’s Department and the Bureau of Alcohol, Tobacco Firearms and Explosives. The defendant was indicted in September, 2014 and pled guilty in November, 2014.
The Indictment alleged that on or about March 19, 2013, within the Eastern District of Oklahoma, the defendant, NICHOLAS SCOTT A VERY, a/k/a Nicholas Scott, did knowingly possess a firearm in furtherance of a drug trafficking crime for which he may be prosecuted in a court of the United States, that is, Distribution of Oxycodone.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal facility at which he will serve his nonparolable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
St. Louis County Woman Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – SUSAN HAMPE of St Louis County, Missouri, was indicted for mail fraud as part of a scheme to defraud her sister and co-trustee in connection with the sale of family real estate.
According to the indictment, Hampe falsely represented herself to be the sole trustee and beneficiary of a trust containing the home of her deceased mother in St. Louis County. Upon sale of the property, Hampe is alleged to have taken all the proceeds for herself and used them to pay $60,000 in criminal restitution she owed in a 2011 case involving her embezzlement from an ex-employer.
Hampe was indicted by a federal grand jury late Wednesday on one felony count of mail fraud.
If convicted, mail fraud carries a maximum sentence of 20 years in prison and/or fines up to $250,000. In determining the actual sentence, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the U.S. Postal Inspection Service. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
South Carolina Woman Pleads Guilty to Prostituting MinorRead the Press Release
Prostituted Minor in Suffolk and Virginia Beach
NORFOLK, Va. – Doriean Barberi, 37, of Greenville, South Carolina, pleaded guilty today to charges of transporting a minor across state lines for prostitution purposes.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John S. Adams, Special Agent in Charge of the Federal Bureau of Investigations’ Norfolk Field Office; and James A. (Jim) Cervera, Chief of Police, Virginia Beach Police Department, made the announcement after the plea was accepted by Senior U.S. District Judge Henry Coke Morgan, Jr.
Barberi was indicted by a federal grand jury on December 3, 2014. Barberi faces a maximum penalty of life in prison when she is sentenced on October 22, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
According to a statement of facts filed with the plea agreement, Barberi was first identified by the Virginia Beach Police Department in September 2014. Barberi had posted advertisements on www.backpage.com for herself and a 17 year old minor offering their sexual services at a local hotel. Upon being interviewed, Barberi and the minor confirmed that they drove into Virginia several days earlier and first worked in Suffolk. Then, they moved to Virginia Beach. Barberi set up the appointments for the minor and the minor gave Barberi all of the money she was paid for having sex with customers.
This case was investigated by FBI and Virginia Beach Police Department. Assistant U.S. Attorney Elizabeth M. Yusi is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-162.
Sixteen Hospitals to Pay $15.69 Million to Resolve False Claims Act Allegations Involving Medically Unnecessary Psychotherapy ServicesRead the Press Release
The Justice Department announced today that 16 separate hospitals and their respective corporate parents have agreed to collectively pay $15.69 million to resolve False Claims Act allegations that the providers sought and received reimbursement from Medicare for services that were not medically reasonable or necessary, the U.S. Department of Justice announced today.
“Hospitals that participate in the Medicare program must ensure that the services they provide and bill for are based on the medical needs of patients rather than the desire to maximize profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that those who seek to abuse the Medicare program will be held accountable for their actions.”
This case concerns claims to Medicare for Intensive Outpatient Psychotherapy (IOP) services. IOP services represent a continuation of ambulatory psychiatric services and provide active treatment to individuals with mental disorders using a variety of treatment methods. Medicare will pay for an appropriate course of IOP treatment provided a number of specific requirements are met including, most notably, that the services in question are reasonable and necessary for the diagnosis and treatment of the patient’s condition.
These settlements resolve allegations that, beginning as early as 2005 and in some cases continuing into 2013, the hospitals knowingly submitted claims for IOP services that did not qualify for Medicare reimbursement because: the patient’s condition did not qualify for IOP; the patient’s treatments were not provided pursuant to an individualized treatment plan designed to help the patient address specific mental health needs and reach achievable goals; the patient’s progress was not being adequately tracked or documented; the patient received an inappropriate level of treatment; and/or the therapy provided was primarily recreational or diversional in nature, and not therapeutic. The IOP services in question were typically performed on the providers’ behalf by Allegiance Health Management (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, but billed to Medicare by the providers.
The providers who have reached agreements to resolve these allegations with the United States include:
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Health Management Associates Inc. (HMA), and the following 14 hospitals formerly owned and operated by HMA: Central Mississippi Medical Center in Mississippi, Crossgate River Oaks in Mississippi, Dallas Regional Medical Center in Texas, Davis Regional Medical Center in North Carolina, East Georgia Regional Medical Center in Georgia, Gilmore Regional Medical Center in Mississippi, Lake Norman Regional Medical Center in North Carolina, Lehigh Regional Medical Center in Florida, Medical Center of Southeastern Oklahoma in Oklahoma, Natchez Community Hospital in Mississippi, Northwest Mississippi Regional Medical Center in Mississippi, Santa Rosa Medical Center in Florida, Southwest Regional Medical Center in Arkansas, and Summit Medical Center in Arkansas, which agreed to collectively pay $15 million;
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Community Health Systems and its subsidiary Wesley Medical Center in Mississippi, which agreed to pay $210,000; and
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North Texas Medical Center in Texas, which agreed to pay $480,000.
In October 2013, the United States resolved similar allegations with LifePoint Hospitals Inc. and two of its subsidiaries, PHC-Minden L.P., doing business as Minden Medical Center, and PHC-Cleveland Inc., doing business as Bolivar Medical Center, which collectively paid $4,672,469.80.
“This case demonstrates that the U.S. Attorney’s Office for the Eastern District of Arkansas will aggressively pursue civil health care fraud cases, where the integrity of the Medicare system has been undermined,” said U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas. “Medical care providers who abuse Medicare hurt all taxpayers, and today’s announcement highlights our commitment to protecting our national health care system, as well as the Arkansans who depend on it.”
“Our agency is dedicated to investigating health care fraud schemes such as this, which divert scarce taxpayer funds meant to provide for legitimate patient care, including services for the often underserved mentally ill population,” said Special Agent in Charge Mike Fields of U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG).
The allegations resolved by today’s settlements arose from a lawsuit filed under the False Claims Act. The act allows private individuals known as “relators” to sue on behalf of the United States and to share in the proceeds of any settlement or judgment that may result. The relator in this case will receive $2,667,300.
These settlements were the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Eastern District of Arkansas and HHS’ Office of Audit Statistics and OIG.
These settlements illustrate 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 claims settled by these agreements are allegations only, and there has been no determination of liability.
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Sixteen Hospitals to Pay $15.69 Million to Resolve False Claims Act Allegations Involving Medically Unnecessary Psychotherapy ServicesRead the Press Release
Washington – The Justice Department announced today that 16 separate hospitals and their respective corporate parents have agreed to collectively pay $15.69 million to resolve False Claims Act allegations that the providers sought and received reimbursement from Medicare for services that were not medically reasonable or necessary, the U.S. Department of Justice announced today.
“Hospitals that participate in the Medicare program must ensure that the services they provide and bill for are based on the medical needs of patients rather than the desire to maximize profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that those who seek to abuse the Medicare program will be held accountable for their actions.”
This case concerns claims to Medicare for Intensive Outpatient Psychotherapy (IOP) services. IOP services represent a continuation of ambulatory psychiatric services and provide active treatment to individuals with mental disorders using a variety of treatment methods. Medicare will pay for an appropriate course of IOP treatment provided a number of specific requirements are met including, most notably, that the services in question are reasonable and necessary for the diagnosis and treatment of the patient’s condition.
These settlements resolve allegations that, beginning as early as 2005 and in some cases continuing into 2013, the hospitals knowingly submitted claims for IOP services that did not qualify for Medicare reimbursement because: the patient’s condition did not qualify for IOP; the patient’s treatments were not provided pursuant to an individualized treatment plan designed to help the patient address specific mental health needs and reach achievable goals; the patient’s progress was not being adequately tracked or documented; the patient received an inappropriate level of treatment; and/or the therapy provided was primarily recreational or diversional in nature, and not therapeutic. The IOP services in question were typically performed on the providers’ behalf by Allegiance Health Management (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, but billed to Medicare by the providers.
The providers who have reached agreements to resolve these allegations with the United States include:
- Health Management Associates Inc. (HMA), and the following 14 hospitals formerly owned and operated by HMA: Central Mississippi Medical Center in Mississippi, Crossgate River Oaks in Mississippi, Dallas Regional Medical Center in Texas, Davis Regional Medical Center in North Carolina, East Georgia Regional Medical Center in Georgia, Gilmore Regional Medical Center in Mississippi, Lake Norman Regional Medical Center in North Carolina, Lehigh Regional Medical Center in Florida, Medical Center of Southeastern Oklahoma in Oklahoma, Natchez Community Hospital in Mississippi, Northwest Mississippi Regional Medical Center in Mississippi, Santa Rosa Medical Center in Florida, Southwest Regional Medical Center in Arkansas, and Summit Medical Center in Arkansas, which agreed to collectively pay $15 million;
- Health Management Associates Inc. (HMA), and the following 14 hospitals formerly owned and operated by HMA: Central Mississippi Medical Center in Mississippi, Crossgate River Oaks in Mississippi, Dallas Regional Medical Center in Texas, Davis Regional Medical Center in North Carolina, East Georgia Regional Medical Center in Georgia, Gilmore Regional Medical Center in Mississippi, Lake Norman Regional Medical Center in North Carolina, Lehigh Regional Medical Center in Florida, Medical Center of Southeastern Oklahoma in Oklahoma, Natchez Community Hospital in Mississippi, Northwest Mississippi Regional Medical Center in Mississippi, Santa Rosa Medical Center in Florida, Southwest Regional Medical Center in Arkansas, and Summit Medical Center in Arkansas, which agreed to collectively pay $15 million;
- North Texas Medical Center in Texas, which agreed to pay $480,000.
In October 2013, the United States resolved similar allegations with LifePoint Hospitals Inc. and two of its subsidiaries, PHC-Minden L.P., doing business as Minden Medical Center, and PHC-Cleveland Inc., doing business as Bolivar Medical Center, which collectively paid $4,672,469.80.
“This case demonstrates that the U.S. Attorney’s Office for the Eastern District of Arkansas will aggressively pursue civil health care fraud cases, where the integrity of the Medicare system has been undermined,” said U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas. “Medical care providers who abuse Medicare hurt all taxpayers, and today’s announcement highlights our commitment to protecting our national health care system, as well as the Arkansans who depend on it.”
“Our agency is dedicated to investigating health care fraud schemes such as this, which divert scarce taxpayer funds meant to provide for legitimate patient care, including services for the often underserved mentally ill population,” said Special Agent in Charge Mike Fields of U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG).
The allegations resolved by today’s settlements arose from a lawsuit filed under the False Claims Act. The act allows private individuals known as “relators” to sue on behalf of the United States and to share in the proceeds of any settlement or judgment that may result. The relator in this case will receive $2,667,300.
These settlements were the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Eastern District of Arkansas and HHS’ Office of Audit Statistics and OIG.
These settlements illustrate 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 claims settled by these agreements are allegations only, and there has been no determination of liability.
Silver Spring Man Sentenced for Involuntary Manslaughter in Fatal Crash on Baltimore-Washington ParkwayRead the Press Release
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Bernardo Lloyd, age 48, of Silver Spring, Maryland late yesterday to 63 months in prison, followed by three years of supervised release, for involuntary manslaughter connected to a fatal crash on the Baltimore-Washington Parkway.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Chief of Police Robert D. MacLean of the U.S. Park Police.
According to testimony at his four day trial, on January 31, 2012, about 2 p.m., Bernardo Lloyd was driving a black Lexus on the Baltimore-Washington Parkway in Cheverly, Maryland, at a high rate of speed, keeping pace with a black Nissan. Both vehicles were passing other southbound vehicles, changing lanes abruptly to get around the other vehicles. Other vehicles had to take evasive action as Lloyd passed them. Lloyd and the driver of the Nissan appeared to be racing each other. Lloyd was traveling at about 100 miles per hour. The posted speed limit in that area is 45 mph.
The victim was driving a Ford F150 pickup truck in the center lane of the highway, when Lloyd struck the pickup truck from the rear. As a result of the crash, the truck rolled over several times and came to a stop on its roof in the center lane. The victim died at the scene from head and neck trauma as a result of the crash. Lloyd’s Lexus bounced to a stop off the highway on the right side. Lloyd and his passenger were transported to the hospital, where both were treated for minor injuries and released.
United States Attorney Rod J. Rosenstein praised the U.S. Park Police for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Hollis Raphael Weisman and Special Assistant U.S. Attorney Nicholas J. Patterson, who prosecuted the case.
Sentencings for May 1 - May 5, 2015Read the Press Release
Christopher Beets, 24, of Santa Rosa, California, was sentenced by Federal District Court Judge Alan B. Johnson on May 5, 2015, for attempted production of child pornography. Beets was arrested in San Francisco, California. He received 300 months imprisonment, to be followed by a life term of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children Task Force and the U.S. Department of Homeland Security.
Roger Adcock, 42, of Canon City, Colorado, was sentenced by Federal District Court Judge Alan B. Johnson on May 1, 2015, for conspiracy to distribute 500 grams or more of methamphetamine, heroin and marijuana. Adcock was arrested in Gillette, Wyoming. He received 140 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $900.00 fine and a $100.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Second Monroe County Man Enters Guilty Plea to Federal Methamphetamine Trafficking ChargeRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a second Monroe County man pleaded guilty today in United States District Court in Scranton, before Senior United States District Judge Edwin M. Kosik, to the charge of conspiracy to distribute methamphetamine.
According to United States Attorney Peter Smith, Emmanuel Tucker, age 39, of Stroudsburg, Monroe County, admitted to participating in a conspiracy to distribute methamphetamine in the Monroe County area in 2013 and 2014.
Tucker was one of seven individuals indicted by a federal grand jury in April 2014, after a several month investigation conducted jointly by the Drug Enforcement Administration, the Pennsylvania State Police, the Pocono Mountain Regional Police Department and the Stroud Regional Police Department regarding methamphetamine trafficking in Monroe County.
Previously, Scott Borushak, age 51, of Stroudsburg, pleaded guilty and admitted to participating in the same methamphetamine trafficking conspiracy. In addition, Jeannine Altemose, age 53, of Stroudsburg, previously entered a guilty plea and admitted to allowing methamphetamine to be stored and distributed from her residence. The charges against the remaining defendants are currently pending.
The cases are being prosecuted by Assistant United States Attorney Robert J. O’Hara.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a $1,000,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Santa Clara Pueblo Man Pleads Guilty to Federal Assault ChargesRead the Press Release
ALBUQUERQUE – Leon J. Tafoya, 19, a member and resident of Santa Clara Pueblo, N.M., pleaded guilty in federal court in Albuquerque, N.M., this morning to assault charges. Under the terms of his plea agreement, Tafoya will be sentenced within the range of five to seven years in federal prison.
Tafoya was arrested on Sept. 16, 2014, on a criminal complaint charging him with assault with a dangerous weapon, assault resulting in serious bodily injury, and aggravated assault while in Santa Clara Pueblo in Rio Arriba County, N.M. According to the criminal complaint on Sept. 7, 2014, officers of the Santa Clara Pueblo Tribal Police Department responded to a call reporting an assault. Tafoya was arrested after stabbing another member of the Santa Clara Pueblo Tribe three times and assaulting a tribal police officer who was responding to the stabbing. The complaint asserted that Tafoya attempted to gain control of the officer’s service weapon while the officer was placing Tafoya under arrest.
During today’s change of plea hearing, Tafoya entered a guilty plea to a felony information charging him with possession of a firearm during a crime of violence, aggravated assault with a deadly weapon and assault resulting in serious bodily injury. Tafoya admitted that on Sept. 7, 2014, in Rio Arriba County he possessed a firearm and assaulted a victim by displaying that firearm in a threatening manner. Tafoya also admitted to assaulting another victim resulting in serious bodily injury to that victim.
Tafoya has been in federal custody since his arrest. He remains in custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by the Santa Fe office of the FBI, the Northern Pueblos Agency of the BIA’s Office of Justice Services, and the Santa Clara Pueblo Tribal Police Department. The case is being prosecuted by Assistant U.S. Attorney Novaline D. Wilson.
San Francisco Man Pleads Guilty to Distribution of Child PornographyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that GEOFFREY WALKER, age 65, of San Francisco, California, pled guilty today for crimes involving the sexual exploitation of children.
According to court documents, as a result of an undercover operation by federal law enforcement agents with the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”) into the sexual exploitation of children and the distribution of child pornography in the Eastern District of Louisiana, it was determined that WALKER was utilizing his email account to distribute child pornography from California to Louisiana. On September 5, 2014, a federal search warrant was executed at WALKER’s residence in California and HSI agents seized his computer pursuant to the search warrant. WALKER was taken into federal custody at the time of the execution of the search warrant. HSI agents established that on eleven different occasions, WALKER emailed sexually explicit images of minors to an undercover HSI agent located in New Orleans. A subsequent computer forensic search of WALKER’s computer by HSI yielded over 9,000 images and over 1,000 videos depicting minors engaging in sexually explicit activity.
WALKER faces a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of twenty years, followed by up to a lifetime term of supervised release, and a $250,000 fine. In addition, WALKER will be required to register as a sex offender. U.S. Judge Susie Morgan set sentencing for August 12, 2015.
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."
U.S. Attorney Kenneth Polite praised the work of the U. S. Department of Homeland Security, HSI in investigating this matter. Project Safe Childhood Coordinator and Fraud Section Chief, Assistant U. S. Attorney Brian M. Klebba is in charge of the prosecution.
Geoffrey Walker Factual Basis.pdf (48.26 KB)
Salvadorian National Indicted for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that RAMON ANTONIO SORIANO-CANIZALEZ, age 28, a citizen of El Salvador, was charged today in a one-count Indictment with illegal reentry into the United States after having been previously deported.
According to the Indictment, SORIANO-CANIZALEZ was encountered by Immigration & Customs Enforcement agents in the Eastern District of Louisiana on April 29, 2015, after records showed he had been previously deported from the United States to El Salvador on July 26, 2010.
If convicted, SORIANO-CANIZALEZ faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment.
U.S. Attorney Polite reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Immigration & Customs Enforcement. Assistant U.S. Attorney Emily K. Greenfield is in charge of the prosecution.
Ramon Antonio Soriano-Canizalez Indictment.pdf (124.17 KB)
Roswell Man Pleads Guilty to Federal Child Exploitation ChargeRead the Press Release
ALBUQUERQUE – Jim Walter Qualls Jr., 28, of Roswell, N.M., pled guilty today in federal court in Las Cruces, N.M., to child exploitation charges. The plea was entered without the benefit of a plea agreement. The guilty plea was announced by U.S. Attorney Damon P. Martinez and Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, Texas.
Qualls was arrested on child pornography charges on July 31, 2014, based on a criminal complaint charging him with receipt and distribution of child pornography, possession of child pornography and enticement of a minor to engage in any sexually explicit conduct for the purpose of producing visual depiction of such conduct. The criminal conduct occurred between Oct. 2013 and Feb. 2014, in Chaves County, N.M. According to the criminal complaint, HSI agents from Las Cruces, N.M., executed a search warrant on Qualls’ residence after the location was identified by law enforcement as having an internet protocol (IP) associated with uploaded images of child pornography to the internet. HSI agents confiscated Qualls’ cell phone which allegedly contained visual depictions of minors engaged in sexual activity.
Qualls subsequently was indicted on Oct. 16, 2014, and charged with four counts of persuading and enticing a minor child to engage in sexually explicit conduct for the purpose of producing a visual depiction of that conduct and transporting those images through the internet.
During today’s proceedings, Qualls pled guilty to the indictment. At sentencing, Qualls faces a statutory mandatory minimum of 15 years and a maximum of 30 years in federal prison on each of the four counts in the indictment. If the court determines that Qualls’ criminal history includes a prior conviction for a sexual offense, Qualls faces a statutory mandatory minimum of 25 years and maximum of 50 years of imprisonment on each count of the indictment. Qualls remains in custody pending a sentencing hearing which has yet to be scheduled. Qualls will be required to register as a sex offender after completing his term of imprisonment.
“The United States Attorney’s Office, together with our federal, state, local and tribal partners, will continue to prioritize cases involving the exploitation of children,” U.S. Attorney Damon P. Martinez said today. “Those dedicated to investigating and prosecuting crimes against children will continue to search out those individuals who traffic in this obscene material and bring them to justice.”
“Investigations such as these underscore HSI's resolve to engaging our law enforcement partners to search out predators who sexually exploit young children,” said Waldemar Rodriguez, Special Agent in Charge of HSI El Paso.
This case was investigated by the Las Cruces office of HSI and the Roswell Police Department. Assistant U.S. Attorney Alexander B. Shapiro of the U.S. Attorney’s Las Cruces Branch Office is prosecuting this case.The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 80 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Rodeo Association President Given Six Months for Role in Rocky Boy's Corruption SchemeRead the Press Release
GREAT FALLS – The former president of an Indian rodeo association at Rocky Boy’s was sentenced to six months in federal custody today for his role in a scheme to embezzle monies from Chippewa Cree Rodeo Association accounts. U.S. District Judge Brian Morris ordered Wade Christopher Colliflower, 33, of Box Elder, in connection with his earlier guilty plea of theft from an Indian tribal organization, to serve six months in custody and six months of home confinement, pay $44,750 in restitution, and serve two years of supervised release.
The prosecution told the Court that Colliflower was the President of the Bear Paw Indian Rodeo Association (BPIRA) in 2010. At the same time, John Chance Houle, Vice-Chairman of the Chippewa Cree Business Committee, served as the President of the Chippewa Cree Rodeo Association (CCRA). From 2010 through 2012, Houle and Colliflower used the BPIRA account to extract money from the CCRA account and use the money for their own personal use and benefit. Colliflower was interviewed during the course of the investigation and admitted his role in assisting Houle’s embezzlement of monies from the CCRA by making kick-backs to Houle from payments processed through his separate rodeo association bank account.
On May 25, 2010, for example, Houle wrote a $50,000 check to the BPIRA account, denoted “5 IIFR Rodeos”. That same day Colliflower deposited $43,000 into the BPIRA account and, according to Colliflower, took $7000 in cash which he gave to Houle. The following day Colliflower withdrew $15,007 from the BPIRF account and purchased a $15,000 cashier’s check payable to Havre Ford which was used to purchase a vehicle for Houle’s daughter.
A year later, on May 27, 2011, Colliflower withdrew $22,000 from the CCRA account, converted the funds into a Well’s Fargo cashier’s check, and deposited the whole amount into BPIRA’s checking account. According to Colliflower, by prior agreement, Houle received $7,000, as a result of this transaction.
Between July 7, 2011, and September 9, 2011, Houle wrote two checks off of the CCRA account to the BPIRA account for a total of $37,100. After deposit, Colliflower gave Houle $10,500 and gave Houle’s daughter a check for $7000.
On May 18, 2012, and again on June 5, 2012, Houle wrote three checks directly to Colliflower, two in the amount of $37,500 and one for $25,000. According to Colliflower, of the $100,000 he received from the CCRA account with these payments, he kicked back $30,000 to Houle.
At sentencing, Colliflower claimed that some of the monies paid to Houle were for legitimate purposes, such as the use of Houle’s livestock for rodeo events. Colliflower also claimed that some of the money converted to cash was used to pay expenses, prizes, and other rodeo related costs. The Court ordered Colliflower to pay $44,750 in restitution jointly and severally with any other defendant ordered to pay restitution in the rodeo association embezzlement case. Houle is scheduled to be sentenced on May 28. When restitution is ordered as a “joint and several” obligation, each defendant is responsible for the entire amount but only until the victim has received the entire amount, at which time all defendants have satisfied the restitution portion of the judgment even if one defendant paid more—even substantially more—than the others.
The case was investigated by agents of the Guardians Project, including agents from the Offices of Inspector General for Interior, Health & Human Services and EPA, and the Internal Revenue Service.
Previously Removed Alien Sentenced to 15 Months for Illegal Re-EntryRead the Press Release
ALBANY, NEW YORK – Epifanio Andrade-Perez, 33, of Amsterdam, New York, was sentenced yesterday to 15 months of imprisonment for illegal re-entry by Chief United States District Court Judge Gary L. Sharpe in Albany, New York, announced United States Attorney Richard S. Hartunian and Field Office Director for ICE Enforcement & Removal Operations (ERO), Michael T. Phillips, Buffalo, NY.
On October 21, 2014, Andrade-Perez gave a false name to a Deputy Montgomery County Sherriff. ICE officers responded and determined that Andrade-Perez was an alien, a citizen of Mexico and that he had been removed from the United States to Mexico in 2008.
The case was investigated by the Department of Homeland Security, Immigration and Customs Enforcement, Albany, New York and prosecuted by Assistant United States Attorney Edward P. Grogan.
Postal Service Employee Sentenced to 2 1/2 Years in Federal Prison for Faking Disabilities and Defrauding Government ProgramsRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Kevin R. Feldis announced today that Amancio Zamora Agcaoili, Jr. was sentenced by U.S. District Court Judge Sharon L. Gleason to federal prison after pleading guilty to ten counts of wire fraud, theft of government funds, Federal Employees’ Compensation Act fraud, and social security fraud.
Agcaoili, 57, was sentenced to serve 30 months in prison to be followed by three years of supervised release, to pay restitution of $365,831.50 to the United States Department of Labor Office of Workers’ Compensation and the Social Security Administration, and to forfeit $14,141 cash which had been seized from his residence.
According to court filings, for at least five years, between 2009 and 2014, Agcaoili, a United States Postal Service employee working in Anchorage, Alaska, devised a scheme to fake disabilities and defraud the Department of Labor Office of Workers’ Compensation Program (OWCP) and the Social Security Administration Disability Insurance Benefits (DIB) program. Agcaoili received both federal workers’ compensation and federal social security disability payments by misrepresenting the nature and extent of his injury, and concealing the fact that he was working and earning income while receiving disability payments from government programs. Despite Agcaoili’s disability claims, Agcaoili engaged in numerous physical activities throughout the last five years showing that he was faking the extent of his injuries in order to obtain worker’s compensation and social security payments. For example, Agcaoili went dipnetting and fishing every year on the Copper River and the Kenai River, went dancing and sledding, and took vacations to Hawaii, Canada, and the Philippines. Despite his active lifestyle and clear physical capabilities, Agcaoili continued to maintain that he was incapable of working, going so far as to walk with a cane when he visited a doctor. Every year, Agcaoili submitted false certifications and lied to the federal government stating that he did not perform any work, when in reality he was working and receiving income for performing services such as preparing immigration paperwork and tax returns for hundreds of other individuals out of his office located behind his house.
Agcaoili also did not report to the Department of Labor that he received social security disability payments. In addition, Agcaoili concealed and failed to disclose to the Social Security Administration that he was receiving Department of Labor workers’ compensation payments so that he would continue receiving social security disability payments to which he was not entitled. As a result of his scheme, he received at least approximately $365,831.50 in illegally obtained federal disability payments through the Department of Labor OWCP and the Social Security Administration DIB program.
In sentencing Agcaoili, Judge Gleason noted the need for the sentence to deter not only the defendant but also other people from abusing federal programs. Judge Gleason also noted that the consequence of a term of imprisonment is a necessary form of deterrence for white collar crimes.
“Thirty months in prison will serve as a deterrent to others who are tempted to try similar scams. Agcaoili cheated every one of us when he lied about his injuries and his inability to work in order to receive hundreds of thousands of dollars in worker’s compensation and disability payments,” said Kevin Feldis, First Assistant U.S. Attorney and Criminal Division Chief for the District of Alaska. “Nobody should tolerate such fraud, and each time someone intentionally defrauds the United States in order to receive federal benefits, he or she undermines the integrity of these federal programs, making it less likely that they will be available for those who truly need them. Our office places a priority on prosecuting those who choose to criminally misuse and abuse federal programs and funds for their own personal gain, and we commend those who investigate and report these offenses.”
Mr. Feldis commends the United States Postal Service Office of the Inspector General and Social Security Administration Office of the Inspector General for conducting the investigation leading to the successful prosecution of Agcaoili.
Panama City Man Pleads Guilty in Terrorist Hoax CaseRead the Press Release
PANAMA CITY, FLORIDA – Johnathon Mathew Garrett, 36, of Panama City, Florida, pled guilty late yesterday to giving false information to the Social Security Administration (SSA) by claiming that he was planning to blow up the Social Security Office located at 97 Oak Avenue, Panama City, Florida. The plea was announced today by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
During his plea, Garrett admitted that, on August 27, 2014, he called an SSA employee and threatened to “blow the whole thing up and destroy something.” The SSA employee understood this comment to be a bomb threat against the SSA office. Garrett was attempting to intimidate the SSA employee into restoring his social security disability benefits. As a result of his threat, the SSA office in Panama City and the surrounding block were evacuated until the area could be cleared by a bomb-detection team.
This case was investigated by the Federal Bureau of Investigation with the assistance of the Panama City Police Department and Bay County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Gayle E. Littleton.
Sentencing is scheduled for July 15, 2015, at 9:45 a.m., before United States District Judge Richard Smoak at the United States Courthouse, 30 West Government Street, Panama City, Florida. Garrett faces a maximum of five years’ imprisonment, a $250,000 fine, a term of supervised release of three years, and a court-ordered reimbursement for the cost associated with investigative response.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Odessa Company Pleads Guilty to Attempting to Harbor Illegal AliensRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Glenview Dairy, LLC, d/b/a Bergen Farms, of Odessa, NY, pleaded guilty to attempting to harbor illegal aliens before U.S. District Judge Frank P. Geraci. The defendant was also sentenced to pay a $60,000 fine.
Assistant U.S. Attorney Bradley E. Tyler, who is handling the case, between 2102 and 2014, Bergen Farms employed 10 aliens knowing that the individuals were in the United Stated illegally.
The plea and sentence are the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy.
New York Resident Charged with Illegal Reentry After DeportationRead the Press Release
Ronald Pacheco Vasquez, a/k/a “Ricardo Hernandez,” a/k/a “Samuel Batista,” 29, of Queens, NY, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about April 7, 2015, Pacheco Vasquez, an alien, and native and citizen of Colombia, was found in the United States after having been deported from the United States on or about September 30, 2013.
If convicted the defendant faces a maximum possible sentence of 20 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney James A. Petkun.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
New Orleans Man Indicted for Violations of the Federal Gun Control Act, the Federal Controlled Substances Act, and for AssaultRead the Press Release
U.S. Attorney Kenneth A. Polite announced that STEPHEN ELLIS, age 52, a resident of New Orleans, was charged today in a four-count Indictment for violations of the Federal Gun Control Act, the Federal Controlled Substances Act, and for Assault.
According to the Indictment, ELLIS possessed firearms subsequent to being convicted of a felony offense, possessed firearms in furtherance of a drug-trafficking crime, possessed with the intent to distribute a quantity of cocaine hydrochloride, a Schedule II drug controlled substance, and committed an assault on law enforcement officers during the execution of a search warrant.
The charges arose out of the execution of a search warrant at ELLIS’s home in New Orleans, in which gun fire was exchanged as the agents tried to enter the home, resulting in ELLIS being wounded in the leg.
In convicted, ELLIS faces:
- Count 1, being a felon-in-possession of a firearm: up to ten years imprisonment, a fine of up to $250,000, and up to three years of supervised release following imprisonment;
- Count 2, possession of a firearm in furtherance of a drug trafficking crime: a minimum of five years up to life imprisonment, to run consecutive to any other sentence, and up to five years of supervised release following imprisonment;
- Count 3, assault with a deadly weapon: up to ten years imprisonment, a fine of up to $250,000, and up to three years of supervised release following imprisonment; and,
- Count 4, possession with intent to distribute a quantity of cocaine hydrochloride: up to twenty years imprisonment and/or a $1,000,000 fine, followed by at least three years of supervised release.
U.S. Attorney Polite reiterated that the indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Homeland Security Investigation, the Jefferson Parish Sheriff’s Office, the New Orleans Police Department, and the Gretna Police Department in investigating this matter. Assistant United States Attorney Michael E. McMahon is in charge of the prosecution.
New Haven Man Sentenced to 30 Months in Prison for Role in Check Fraud RingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BENJII CARR, 49, of New Haven, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 30 months of imprisonment, followed by three years of supervised release, for his role in a check fraud ring. CARR was also ordered to pay $104,070.94 in restitution.
According to court documents and statements made in court, between July 2010 and May 2011, CARR, Langston Xavier Neal and Brandon Key Bentley obtained stolen checks, recruited “runners” who cashed the checks, and altered the checks to list the runners as the lawful payees. The three individuals drove the runners to several Connecticut bank branches and directed them to enter the banks and cash the checks. The runners were paid a small part of the cash proceeds. Through this scheme, 39 checks totaling $114,102.34 were altered and presented to banks, and 37 of those checks totaling $104,070.94 were cashed by the banks.
On December 2, 2014, CARR pleaded guilty to one count of conspiracy to commit bank fraud.
Neal, of Charlotte, N.C., and Bentley, of New Haven, previously pleaded guilty to the same charge. On April 1, 2015, Neal was sentenced to 18 months of imprisonment. Bentley awaits sentencing.
This matter was investigated by the U.S. Postal Inspection Service, along with the Connecticut Financial Fraud Task Force and the Branford, Madison, Middlebury, Milford, New Britain, New Haven, New Milford, North Branford, Waterbury, Woodbridge and Southbury Police Departments. U.S. Attorney Daly also acknowledged the cooperation and assistance of the State’s Attorney’s Offices for the Judicial Districts of New Haven, Waterbury, Fairfield and Tolland. The case is being prosecuted by Assistant U.S. Attorney Henry K. Kopel.
New Haven Man Admits Role in Drug Robbery SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that HAROLD HARRINGTON, also known as “Chopper” and “Chapo,” 27, of New Haven, pleaded guilty yesterday in Hartford federal court to a federal robbery offense.
This matter stems from “Operation Samson,” a multi-layered initiative headed by the ATF and the Bridgeport and New Haven Police Departments that targeted violent criminals, illegal firearm possession and firearm trafficking. In the spring of 2014, approximately 40 ATF special agents and personnel from Connecticut and across the country were deployed with New Haven and Bridgeport Police to conduct numerous covert operations.
According to court documents and statements made in court, during the operation, an undercover agent and a confidential informant made several controlled purchases of suspected crack cocaine from Donald Gaines, also known as “Stretch” and “Shorty,” 35, of New Haven. During their contact, the informant asked Gaines if he and anyone he knew would be interested in committing a drug robbery. Gaines stated that he did not want to participate in the robbery itself, but introduced the informant and the undercover agent to Harrington, who claimed to be a member of the Bloods street gang. The undercover agent told Harrington that he wanted to hire someone to commit a home invasion robbery of a drug organization’s “stash house” in order to steal six to eight kilograms of cocaine. Harrington agreed to participate and helped plan the robbery, which would include the use of firearms. Harrington also stated that he would bring members of his crew to help commit the robbery.
The undercover agent and Harrington agreed to split the cocaine taken during the robbery, and they agreed to give Gaines one kilogram of the drug for putting the two individuals together.
On March 21, 2014, the day of the proposed robbery, Harrington arrived at the meeting location with Louis Toler, also known as “A.B.,” 45, of New Haven. After Harrington, Toler and the undercover agent had a detailed discussion about how the robbery was going to be carried out, Harrington and Toler were arrested. A subsequent search of Toler’s car revealed a loaded firearm.
The informant then called Gaines, told him the robbery had gone smoothly and arranged to meet him to deliver the cocaine. When Gaines arrived at the designated location, he identified the law enforcement surveillance and drove off at a high rate of speed. After a short chase, Gaines crashed his car on an off ramp in West Haven, attempted to flee on foot and was apprehended.
Harrington pleaded guilty to one count of conspiracy to interfere with commerce by robbery. At sentencing, Harrington faces a maximum term of imprisonment of 20 years.
On March 5, 2015, Gaines pleaded guilty to the same charge and, on May 1, 2015, Toler pleaded guilty to one count of possession of a firearm by a convicted felon. They also await sentencing.
This case is being prosecuted by Assistant U.S. Attorneys Robert Spector and Tracy Dayton.