Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
7 May 2015
Chicago Investment Adviser Sentenced to 36 Months in $1 Million Fraud SchemeRead the Press Release
CHICAGO – A Chicago investment adviser was sentenced today to 36 months imprisonment for fraudulently using new investor funds, including funds from elderly investors, to pay off old investors, leading to a loss of almost $1 million. The defendant, JOSEPH HENNESSY, 54, of Western Springs, was also ordered to pay restitution in the amount of $645,900 to the victims of the fraud and was sentenced to three years of supervision after his release by U.S. District Court Judge Harry D. Leinenweber. Hennessy was ordered to report to the Federal Bureau of Prisons on June 23, 2015. Hennessy pled guilty on December 16, 2014 to one count of wire fraud.
Hennessy operated Resource Planning Group, Inc., a registered investment adviser with the U.S. Securities and Exchange Commission, in Chicago. Hennessy also formed and operated the Midwest Opportunity Fund, a private equity fund that targeted for purchase and investment small to medium-sized companies based in the Midwest.
“What you did involved a massive abuse of trust that needs to be punished,” stated Judge Leinenweber when imposing the sentence, “People relied on you.”
According to court records, between May 2009 and February 2010, Hennessy solicited investors to invest in the Midwest Opportunity Fund, and offered a high interest rate between 10% to 15% per year with a short maturity date of between two and six months. Hennessy falsely represented to the investors that their funds would be used to invest in small to medium-sized companies. However, Hennessy used the new investor funds to pay off old investors in the Midwest Opportunity Fund. Hennessy also misappropriated funds from the accounts of two elderly investors and forged their names on wire transfer forms without their authorizations. Hennessy used the elderly investors’ funds to repay existing investors in the Midwest Opportunity Fund.
“Defendant Joseph Hennessy owed a fiduciary duty to his clients. He was an investment adviser tasked with managing his clients’ money. However, when defendant went into debt with the Midwest Opportunity Fund, he used client money like a personal piggybank, selling promissory notes and transferring funds out of new client accounts to pay off old debtors,” argued Assistant United States Attorney Sunil Harjani in the government’s sentencing memorandum.
The case was prosecuted by Assistant U.S. Attorney Sunil Harjani.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The Chicago office of the U.S. Securities and Exchange Commission provided assistance with the investigation.
Career Convicted Felon Pleads Guilty for Possession of A FirearmRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia announced that Christian M. MacKean, 37, of Eatonton, Georgia entered a plea of guilty on May 7, 2015, for the possession of a firearm by a convicted felon before the Honorable Marc T. Treadwell, U.S. District Court Judge, in Macon, Georgia.
On August 13, 2013, Monroe County Sheriff’s Office (MCSO) Patrolman Jeff Wilson stopped a Chevrolet Silverado pick-up truck on I-75 for speeding. Mr. MacKean, the driver and owner of the vehicle, refused to show his driver’s license or an insurance card. As he reached for a briefcase, Patrolman Wilson noticed a bulge under Mr. MacKean’s shirt and suspected there was a weapon. Patrolman Wilson called for backup. When Deputy Kimberly Barnett from the Forsyth Police Department arrived and approached the vehicle she saw the handle of a black pistol on Mr. MacKean’s right side. It was learned that MacKean had an outstanding warrant for his arrest for parole violations. During a search incident to this arrest it was found that Mr. MacKean had a loaded pistol in a holster on his right hip and a fully loaded AR-15 rifle in the toolbox of the Silverado. In addition, two plastic bags containing methamphetamine with a combined weight of three grams were found in the truck.
A criminal background check of Mr. MacKean revealed previous felony convictions for possession and trafficking of methamphetamine, as well as possession of cocaine. Mr. MacKean is facing a maximum term of 120 months imprisonment, a maximum fine of $250,000, or both, for this offense. He is currently serving a prison sentence in Putnam County. His prison term for this offense will begin once the other sentence has been served.
United States Attorney Michael J. Moore stated that “Due to his prior criminal conduct, Mr. MacKean lost his right to possess a firearm. In addition, he not only illegally possessed a handgun and assault weapon in this case but did so along with one of our most dangerous illicit drugs. At least for the term of the sentence he faces he will not be a further threat to the safety of the public in this way.”
This case was investigated by the Bureau of Alcohol, Tobacco, & Firearms. Assistant United States Attorney Sonja B. Profit prosecuted the case for the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Cape May County, New Jersey, Man Admits Possessing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. - A West Wildwood, New Jersey man today admitted possessing images and videos of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Jeffrey Spicer, 44, pleaded guilty today before U.S. District Judge Joseph E. Irenas in Camden federal court to an information charging him with one count of knowingly possessing child pornography.
According to documents filed in this case and statements made in court:
Spicer admitted that he possessed images and videos of child sexual abuse on electronic and digital media that were seized from his residence pursuant to a search warrant executed on March 19, 2014. According to a forensic examination of these items, numerous images and videos of child sexual exploitation were discovered, including images on his cellular telephone, which he saved by taking screenshot photos with the telephone. The forensic examination further revealed that Spicer was using a password-protected “app” on his cell phone to store the child pornography.
As a previously convicted sex offender in New Jersey and Delaware, Spicer faces a mandatory minimum penalty of 10 years in prison, a maximum penalty of 20 years in prison, up to a lifetime of supervised release, and a $250,000 fine. Sentencing is scheduled for Aug. 11, 2015.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Lower Township Police Department, under the direction of Chief William Mastriana; and the West Wildwood Police Department, under the direction of Chief Jackie Ferentz, with the investigation leading to the guilty plea.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423 or by completing its online tip form. Both are staffed around the clock by investigators. For additional information about wanted suspected child predators, download HSI’s Operation Predator smartphone app or visit the online suspect alerts page.
The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Camden.
Defense counsel: Lisa Evans Lewis Esq., Camden
Canadian Company and Drop Shipper Plead Guilty to Conspiracy to Smuggle and Sell Misbranded Prescription PharmaceuticalsRead the Press Release
ALEXANDRIA, Va. – SB Medical Inc., and TC Medical Group, companies based in Toronto, Canada, and St. Michael, Barbados, along with Hanoch David Stein, 37, of Baltimore, Maryland, pleaded guilty today to a multi-year conspiracy to smuggle and sell misbranded prescription pharmaceuticals in the United States and unlicensed wholesaling of prescription drugs. During the conspiracy SB Medical Inc. and TC Medical Group received over $33 million in proceeds from the illegal smuggling and sale of misbranded prescription pharmaceuticals in the United States.
“The smuggling and distribution of misbranded drugs and medical devices of uncertain foreign origin has the potential for serious harm to patients,” said Dana Boente, U.S. Attorney for the Eastern District of Virginia. “They could be improperly stored and transported, ineffective, adulterated, or unsafe. With our law enforcement partners, we will aggressively investigate and prosecute those who illegally distribute such products.”
SB Medical Inc., TC Medical Group, and Stein were indicted by a federal grand jury on December 2, 2014.
“Individuals who circumvent the FDA-regulated supply chain by distributing unapproved prescription drugs and medical devices put the health and safety of the American public at risk,” said George M. Karavetsos, Director, FDA Office of Criminal Investigations. “The FDA has zero tolerance for those who participate in these illegal trafficking networks and, as we did in this case, we will continue to protect consumers by bringing such criminals to justice.”
According to the statements of facts filed along with the plea agreements, the SB Medical Inc. organization from at least 2011 through 2014, smuggled orthopedic injections, rheumatology infusions, cosmetic devices, optomology products, and oncology drugs into the United States. The non-FDA approved prescription pharmaceuticals were sourced from other foreign countries including India, Turkey, France, Italy, and other countries and included Lucentis, Mabthera, Botox, Dysport, Euflexxa, Remicade, Restylane, Synvisc, Prolia, Orencia, Orthovisc, and other products.
“The illegal smuggling and sale of misbranded prescription pharmaceuticals can pose life threatening consequences for consumers,” said Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C. “Our agents work tirelessly to protect the American public from criminals who disregard health and safety warnings solely to make a buck.”
Members of the conspiracy working for SB Medical Inc. and TC Medical Group used false names to sell the pharmaceutical products to doctors and clinics in the United States. To smuggle pharmaceuticals across the United States border, large shipments were broken down into multiple small shipments. Those shipments were sent to addresses in Maryland, New Jersey, Florida, and other locations under different false names over several days. Customs forms falsely stated the contents and value of the shipments. Drop shippers in the United States, including Stein, received these packages, removed indicia that they were from abroad, and re-shipped them to doctors and clinics in the United States so that packages would have a United States-based return address.
“This case serves as a perfect example of what can be accomplished when different law enforcement agencies partner together to protect the American public from the many perils of illegal prescription drugs,” said Acting Postal Inspector in Charge David M. McGinnis, U.S. Postal Inspection Service-Washington Division. “It is our duty as Postal Inspectors to investigate and stop those who attempt to ship illicit drugs through the U.S. Mail.”
Instead of storing pharmaceuticals at cool temperatures as required for many of the pharmaceuticals, members of the conspiracy used unregistered commercial mailboxes, residential backyards and porches, basement rooms, garages, kitchen fridges and freezers, which did not have adequate lighting, ventilation, temperature, humidity, and security as required for the safe storage and handling of the prescription drugs and devices.
To further deceive customers about the actual location of SB Medical Inc. and the foreign origin of the pharmaceuticals, members of the conspiracy further asked that customers send checks to locations in the United States; drop shippers bundled the checks and forwarded them to Canada where they would be cashed.
This investigation has resulted in the guilty pleas of other conspirators of SB Medical Inc. and TC Medical Group, including:
- David Eli Burke, 34, of Thornhill, Ontario, Canada, director of sales
- Shlomo David Rabi, 25, of Toronto, Ontario, Canada, director of sales and marketing
- Asaf Akiva Ibrahimian, 24, of West Orange, New Jersey, sales representative
- Reuven Daniel Mirlis, 23, of Passaic, New Jersey, sales representative
- Rivka Rabi, 26, of Lakewood, New Jersey, drop shipper
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; George M. Karavetsos, Director, FDA Office of Criminal Investigations, Clarke E. Settles, Special Agent in Charge of Homeland Security Investigations , Washington, D.C.; and David M. McGinnis, Inspector in Charge of the U.S. Postal Service-Washington Division, made the announcement after the pleas were accepted by U.S. District Judge Anthony J. Trenga.
This case was investigated by the FDA’s Office of Criminal Investigations, Homeland Security Investigations Washington, D.C., and the United States Postal Inspection Service. Assistant U.S. Attorneys Alexander T.H. Nguyen, Kellen S. Dwyer, and Jay V. Prabhu are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-397.
Buffalo Woman Pleads Guilty to Tax Fraud ChargeRead 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 Malisha Mobley, 30, of Buffalo, NY, pleaded guilty to conspiracy to defraud the government in the filing of false tax returns before U.S. District Judge Richard J Arcara. The charge carries a maximum penalty of 10 years in prison, and a $250,000 fine.
Assistant U.S. Attorney Trini E. Ross, who is handling the case, stated that the defendant obtained fraudulent W-2 forms from James Chatmon and used the forms to file false tax returns for tax years 2011, 2012 and 2014. As a result the defendant obtained tax refunds which she was not entitled to receive.
In addition, Mobely recruited two other individuals to file false tax returns by providing them with the fraudulent W-2 forms obtained from James Chatmon. Those individuals used the forms to file false tax returns for tax year 2012. As a result of the defendant’s actions, losses to the Internal Revenue Service and New York State Department of Taxation and Finance totaled $37,193.00
The plea is the result of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation Division under the direction of Special Agent-In-Charge Shantelle P. Kitchen.
Sentencing is scheduled for August 20, 2015 at 1:00 p.m. before Judge Arcara.
Buffalo Man Pleads Guilty to Setting A Buffalo Business on FireRead 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 Ryan Smolinski, 26, of Buffalo, NY, pleaded guilty to arson of a commercial building before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison and a fine of $250,000.
Assistant U.S. Attorney Edward H. White, who is handling the case, stated that on June 13, 2014, Smolinski, along with co-defendant Lowell Carey and another co-conspirator, went to 349 Ontario St., occupied by WNY Property Contractors, and threw a Molotov cocktail onto the roof of the building and placed anpther Molotov cocktail underneath a garage door on the side of the building.
On the night of June 12, 2014, Smolinski had been drinking with Carey and the co-conspirator at Carey’s house. Smolinski was upset about his father losing his business, Western New York Property Contractors, which his father co-owned with another individual. Smolinski asked Carey and the co-conspirator if they would help him burn the building. They agreed and made the two Molotov cocktails from beer bottles they had been drinking from and using gasoline and a t-shirt as a wick.
Smolinski, Carey, and the co-conspirator proceeded to Western New York Property Contractors in the early morning hours of June 13, 2014 and set off the Lolotov cocktails. The outside of the building was burned in the areas where the Molotov cocktails were located resulting in approximately $2,207.89 in damages.
Charges are pending against Lowell Carey. 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.
The plea is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, and the Buffalo Fire Department, under the direction of Commissioner Garnell Whitfield.Sentencing is scheduled for August 27, 2015 at 1:00 p.m. before Judge Arcara.
Brooklyn Man Sentenced to Life for Conspiracy to Commit Honor Killings in PakistanRead the Press Release
Earlier today, in federal court in Brooklyn, Mohammad Ajmal Choudhry was sentenced to life in prison. Following a nine-day trial in June and July 2014, Choudhry was convicted of conspiring to commit murder in a foreign country, transmitting threats via interstate communications, and immigration fraud.
“Choudhry’s murderous plan was orchestrated in Brooklyn, and the deadly consequences were felt in Pakistan – but not beyond the reach of the American justice system,” stated Acting United States Attorney Kelly T. Currie. “Today, Choudhry was ordered to spend the rest of his life in prison, a fitting punishment for a man who – in the mistaken name of honor – caused two innocent people to be killed, and their bereaved family members to flee leaving behind their home and the place where their beloved family members are buried.” Mr. Currie expressed his grateful appreciation to U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI) and the U.S. State Department’s Diplomatic Security Service, who worked closely together to investigate the case.
“There is absolutely no honor in killing innocent victims whose only fault was helping a young woman find freedom in the United States,” said Raymond R. Parmer Jr., Special Agent in Charge, HSI New York. “This case serves as a stern reminder to those who plot crimes to be committed overseas, that our law enforcement and justice systems have global reach and will always be used to make sure justice is served.”
“The worldwide presence and investigative capabilities of the Diplomatic Security Service enable us to work with our law enforcement partners domestically and around the world to bring criminals to justice,” said David Schnorbus, Special Agent in Charge of the Diplomatic Security New York Field Office. “With this case, Diplomatic Security sends a strong message to criminals: there is no safe harbor outside the United States.”
Choudhry’s daughter, Amina Ajmal, was held against her will in Pakistan for more than three years by relatives at her father’s direction. During that time, Ajmal, a U.S. citizen, was forced into an arranged marriage with a Pakistani national. Ajmal eventually escaped Pakistan and returned to the United States with the assistance of a Pakistani man, Shujat Abbas, and U.S. State Department officials.
Following Ajmal’s flight from Pakistan in early January 2013, Choudhry and members of his family in Pakistan began a several months-long campaign of threats and intimidation against Abbas’s family members, who hailed from the same village as Choudhry, to avenge the perceived blight on the Choudhry’s honor resulting from Ajmal’s and Abbas’s actions. On January 26, 2013, Choudhry’s brother and other members of his family lured Abbas’s mother and father to a location just outside the village where they fired gunshots repeatedly at their car; Abbas’s mother and father managed to escape the attack unharmed, but spent the weeks that followed living in fear that they and their children would be murdered.
These fears were compounded by a threat that Choudhry communicated directly to Abbas’s father during a telephone call shortly after the shooting took place – “If our daughter will not come back to the home, we will kill all five of you. Otherwise, we will find your son and we’ll kill him. This time we shoot on your car. It was threatening, but next time we will shoot in the chest of all five of you.”
On February 25, 2013, Abbas’s father and twenty-one year old sister were shot and killed in the streets of their village. According to eyewitnesses, Choudhry’s brother and other relatives were observed standing over the victims, holding guns and desecrating the bodies. Choudhry foreshadowed the murders just days before they occurred when he warned his daughter during a recorded telephone call – “Now let me make it clear to you. If you don’t come back, I will kill each and every one of them.”
After Abbas’s father and sister were killed, he and the remaining members of his family living in Pakistan moved to an undisclosed location in the United States to assist the United States government in the prosecution of this case and to escape the ongoing threats of violence against them in Pakistan.
The sentencing proceeding was held before the Hon. William F. Kuntz, II.
The government’s case is being prosecuted by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Amanda Hector, Richard M. Tucker, and Margaret E. Gandy are in charge of the prosecution.
The Defendant:
MOHAMMAD AJMAL CHOUDHRY
Age: 62
E.D.N.Y. Docket No. 13 CR 150 (WFK)
Baltimore Cocaine Dealer Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake, sentenced Lamont George Thomas, age 34, of Baltimore, Maryland, today to 10 years in prison, followed by four years of supervised release, for conspiracy to distribute and possess with intent to distribute cocaine. Judge Blake enhanced Thomas’ sentence after finding he was a career offender based on three previous felony drug convictions.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Commissioner Anthony W. Batts of the Baltimore Police Department; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to his plea agreement, from December 2013 through April 2014, Thomas was a member of a conspiracy to distribute cocaine. As part of the conspiracy, Thomas obtained kilograms of cocaine from a New York supplier. Law enforcement overheard co-defendant Tyrone Bailey discussing drug activity over court-ordered wiretaps on a co-conspirator’s phones.
For example, on March 10, 2014, Bailey was overheard telling a co-conspirator that he was traveling to New York that day to obtain cocaine. As Bailey returned from New York, Maryland State Police conducted a traffic stop of Bailey’s pick-up truck for speeding. Thomas was driving the vehicle and Bailey was the front seat passenger. After a K-9 alerted to the presence of narcotics, law enforcement located an electronically controlled false compartment in the seat back of the rear bench seat. The compartment contained approximately 4.2 kilograms of cocaine. Law enforcement recovered $1,600 in cash and multiple cell phones from Bailey. One of the cell phones recovered was the phone Bailey used to talk to his co-conspirator.
Tyrone Robert Bailey, age 28, of Baltimore, Maryland, pleaded guilty to his role in the conspiracy and was sentenced to 10 years in prison. Thomas and Bailey have been detained since their arrest on March 10, 2014.
United States Attorney Rod J. Rosenstein commended the DEA, Baltimore Police Department, Maryland State Police, and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Christopher J. Romano and Special Assistant U.S. Attorney Christopher Flagg, a cross-designated Baltimore City Assistant State’s Attorney assigned as part of the Baltimore initiative to combat violent crime, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Arizona Shopping Center Developer Arrested for Fraud and Bankruptcy Crimes in Alleged Scheme to Conceal $17 Million in AssetsRead the Press Release
An Arizona shopping center developer was arrested today on fraud and bankruptcy charges in connection with a scheme to allegedly conceal his control of approximately $17 million in assets.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John S. Leonardo of the District of Arizona and Inspector in Charge Gary Barksdale of the Criminal Investigations Group of the U.S. Postal Inspection Service made the announcement.
Alex Papakyriakou, aka, Alex Papas, 57, of Phoenix, Arizona, was charged in an indictment in the District of Arizona with eight counts of bank fraud, one count of conspiracy to commit bankruptcy-related offenses, four counts of concealing assets in bankruptcy, one count of making a false oath in bankruptcy and three counts of falsification of records in bankruptcy.
According to allegations in the indictment, Papas and a now deceased business partner organized over 200 limited liability companies from 1997 to 2008 to develop shopping centers and other real estate projects in Arizona and elsewhere, funded by approximately $150 million from investors and $250 million in bank loans. When the companies encountered financial difficulties in 2007 and 2008, Papas allegedly created Cobea Associates, LLC (Cobea), a company nominally owned by his sister in South Africa, but actually operated and controlled by him to shield his valuable family assets from investors and other creditors. Papas then allegedly transferred title of his assets to Cobea, including a luxurious home in Paradise Valley, Arizona, a vacation beach house and a condominium in Laguna Beach, California, and a business entity in Scottsdale, Arizona, which bought and sold expensive vintage collector automobiles.
From June 2008 through approximately June 2013, Papas allegedly deceived various banks regarding the transfer of the assets and his financial condition to both obtain new loans and extend existing loans secured by his assets. Additionally, in 2011, Papas filed for bankruptcy, claiming that he had less than $1 million in assets and over $144 million in liabilities, while allegedly concealing and denying his control of the millions of dollars in assets he transferred to Cobea.
The charges contained in an indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case is being investigated by the Criminal Investigations Group of the U.S. Postal Inspection Service. The case is being prosecuted by Senior Litigation Counsel Jack Patrick and Trial Attorney Sarah Hall of the Criminal Division’s Fraud Section, with the assistance of Assistant U.S. Attorney Raymond Woo of the District of Arizona.
Ansonia Man Who Made False Report of Police Brutality to the FBI is SentencedRead the Press Release
EDWARD MINERLY, 52, of Ansonia, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to eight months of imprisonment, followed by three years of supervised release, for making a false report of police brutality to the Federal Bureau of Investigation.
According to court documents and statements made in court, on May 18, 2013, officers with the Derby Police Department arrested MINERLY on an outstanding probation violation warrant. On May 31, 2013, MINERLY called the New Haven FBI and spoke with an FBI special agent. In the call, MINERLY alleged that Derby Police officers had recently arrested him for a probation violation and, upon placing him in a holding cell, commenced taunting him, subjecting him to flashing lights and tipping him backwards out of his wheelchair. MINERLY also alleged that Derby Police officers kicked him in the head, arms and upper body.
On June 6, 2013, an FBI special agent interviewed MINERLY in person at a Bridgeport hospital where MINERLY had been admitted. MINERLY again made allegations similar to those made on May 31, 2013, namely, that Derby Police officers had arrested him and, after placing him in a holding cell, picked him out of his wheelchair, threw him into a wall, flashed the lights on and off, and kicked him in the head and beat him.
MINERLY pleaded guilty on November 18, 2014, admitting that the statements he made to the FBI alleging physical abuse by members of the Derby Police Department after his probation violation arrest were false.
“In making a false report of police brutality, this defendant sought to exploit the Justice Department’s steadfast commitment to investigate and prosecute civil rights abuses by members of law enforcement,” stated U.S. Attorney Deirdre M. Daly. “In addition to taxing federal law enforcement resources, these false reports can irreparably damage the reputation of the wrongly accused police department and its officers. The prison term imposed today is an appropriate penalty for this conduct.”
“Any and all allegations of civil rights violations are taken very seriously by the FBI, stated FBI Acting Special Agent in Charge Kevin James Kline. “We will seek prosecution of anyone who deliberately provides false information that diverts agents and resources from other important matters.”
This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Henry K. Kopel and First Assistant U.S. Attorney Michael J. Gustafson.
Albion Man Pleads Guilty to Stealing Government PropertyRead 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 Justin D. Weese, of Albion, NY, pleaded guilty before U.S. District Judge Charles J. Siragusa to converting to his own use machinery belonging to the United States Federal Aviation Administration. The charge carries a maximum penalty of 10 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Bradley E. Tyler, who is handling the case, stated that Weese was an employee of the Federal Aviation Administration. In June 2014, the defendant was tasked with taking a welder, a mower, and a trailer to a scrap yard. Instead, Weese kept the items for his own personal use. In addition, the defendant was supposed to take an all-terrain vehicle to be traded in for a newer model and again, Weese kept the vehicle for his own use.The plea was the culmination of an investigation on the part of Special Agents of the Department of Transportation, Office of Inspector General.
Sentencing is scheduled for August 6, 2015 at 9:00 a.m. Judge Siragusa.
Albanian National Indicted for Alien SmugglingRead the Press Release
SYRACUSE, NEW YORK – On April 30, 2015, Ergys Metashi (34), of Albania, was indicted on one count of bringing an alien into the United States without authorization, announces United States Attorney Richard S. Hartunian and Homeland Security Investigations, Resident Agent in Charge Brian Devine.
The indictment charges Mr. Metashi, a commercial truck driver from Albania who lives and works in Canada, with bringing an alien into the United States from Canada at the port of entry at Alexandria Bay, New York, on March 31, 2015. Mr. Metashi allegedly agreed to smuggle the alien into the United States by hiding the alien in the sleeping compartment of a tractor trailer in exchange for payment. Law enforcement officials at the border found the alien hiding under a blanket and arrested Mr. Metashi. If convicted, Mr. Metashi faces up to ten years in prison. Following a detention hearing, Magistrate Judge Andrew T. Baxter ordered Mr. Metashi to be detained pending trial.
The case is being investigated by Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Michael F. Perry.
For additional information, contact Executive Assistant U.S. Attorney John G. Duncan at 315- 448-0672.
The charges and allegations announced today are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
10th Street Gang Member Sentenced for RacketeeringRead 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 Derrick Yancey, 27, of Buffalo, NY, who was convicted of Racketeering Influenced Corrupt Organizations Conspiracy (RICO Conspiracy), was sentenced to 168 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Joseph M. Tripi, who handled the case, stated that from 2005 through 2010, the defendant was a member of the 10th Street Gang. As a part of his involvement in the gang, Yancey admitted driving fellow 10th Street Gang members to shoot rival 7th Street Gang members. Specifically, on September 15, 2008, the defendant drove armed 10th Street Gang members to shoot rival 7th Street Gang members, who were standing outside on Busti Avenue in Buffalo. While Yancey drove the car, his 10th Street Gang accomplices shot and killed Omar Fraticello-Lugo, and injured two others. The defendant then drove the shooters from the scene. Brandon Bobbitt was also convicted for his role in the murder of Omar Fraticello-Lugo.
Yancey is one of 44 10th Street Gang members and associates charged and convicted in this case.
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.
6 May 2015
“Operation Check-Mate” Defendant Sentenced to Seven Years in Federal Prison in $800,000 Counterfeit Check SchemeRead the Press Release
PROVIDENCE, R.I. – Ernest Kar, 34, of Providence, was sentenced on Tuesday to 84 months in federal prison for participating in a counterfeit check scheme that defrauded local banks of at least $800,000. Kar was convicted at trial on February 12, 2015, of conspiracy to commit bank fraud and three counts of bank fraud.
At sentencing, U.S. District Court Judge Mary M. Lisi also ordered Kar to serve a consecutive sentence of 9 months imprisonment for violating the terms of supervised release on a prior federal conviction in South Dakota for passing counterfeit checks. Additionally, Kar was ordered to serve a term of 5 years of supervised upon completion of his prison terms and to pay restitution in the amount of $532,152.
Kar’s sentences are announced by United States Attorney Peter F. Neronha; Ted A. Arruda, Resident Agent in Charge of the Providence Office of the U.S. Secret Service; Warwick Police Chief Colonel Stephen M. McCartney; Providence Police Chief Colonel Hugh T. Clements, Jr.; and Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police.
According to the government’s evidence presented at trial, between October 2010 and January 2014, Kar and his co-conspirators created counterfeit checks via computer, recruited account holders who agreed to have the fake checks deposited into their accounts in exchange for cash, and then made cash withdrawals from the accounts. Many of the counterfeit checks were drawn on the accounts of several legitimate businesses.
On December 16, 2013, during a joint federal and state law enforcement investigation into the fraudulent check scheme, Warwick Police discovered items used to create counterfeit checks, including check stock, a laptop computer, a printer and counterfeit checks, inside a room Kar was staying in at the Motel 6 in Warwick and inside his vehicle. As a result of the investigation, including forensic examinations of the items seized by Warwick Police, a federal arrest warrant was issued for Kar. He was arrested in the Western District of Kentucky on April 28, 2014, and ordered detained and returned to Rhode Island.
Kar is one of nine individuals charged for their participation in the fraudulent check-cashing scheme dubbed “Operation Check-Mate.”Three co-defendants, Jerry Zeah, 25, Garty Togbasi, 28, and John Sumo, 28, all of Providence, previously pleaded guilty to conspiracy to commit bank fraud and are serving sentences of 30 months in federal prison. A fourth co-defendant, Allarick Hill, 37, of Pawtucket, previously pleaded guilty to conspiracy to commit bank fraud is currently serving a sentence of 37 months in federal prison.
Four other co-defendants in this matter are being prosecuted on state charges in Rhode Island Superior Court.
The federal court cases were prosecuted by Assistant U.S. Attorneys Lee H. Vilker and Sandra R. Hebert.
“Operation Check-Mate” was jointly investigated by the United States Secret Service, Warwick Police Department, Providence Police Department, and Rhode Island State Police.
These charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage and aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s Offices, and state and local law enforcement partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.
For more information on the task force, please visit www.StopFraud.gov.
###
Contact: 401-709-5357
[email protected]West Seneca Man Pleads Guilty to Extortion ChargeRead 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 Thi Nguyen, 40, of West Seneca, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to conspiracy to collect extension of credit by extortion. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Anthony M. Bruce, who is handling the case, stated that a confidential witness placed bets on NFL football games with Nguyen and other individuals during the 2012 season. On May 7, 2013, the defendant and co-defendant Eric Battistoni told the witness his outstanding debt of $24,000 On May 15. 2013, at a pre-arranged meeting, it was determined the witness would would make $300 payments every Friday until the debt was settled. Battistoni also threatened violence if the witness did not make a payment.
Nguyen and Battistoni were arrested on May 31, 2013. During the execution of a search warrant at Nguyen’s residence, officers seized numerous ledgers used in the defendant’s bookmaking activities.
Charges are pending against Battistoni. 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.
The plea is the culmination of an investigation by the Federal Bureau of Investigation.Sentencing is scheduled for August 26, 2015 at 1:00 p.m. before Judge Arcara.
Warwick Chemical Company Pleads Guilty to Violating Clean Air Act for Failing to Develop and Implement Risk Storage PlanRead the Press Release
protect worker and community safety, develop “worst case” response plan
PROVIDENCE, R.I. – Mann Distribution, LLC, of Warwick, also known as Mann Chemical, LLC, pleaded guilty in U.S. District Court in Providence on Tuesday to violating the Clean Air Act by failing to develop and implement a Risk Management Plan to minimize the chance of release of hydrofluoric acid from its Warwick facility, and to protect workers, the community, and emergency and first responders in the event of a chemical release or fire.
U.S. District Court Judge Mary M. Lisi imposed a fine of $200,000 and ordered the company to serve a term of 3 years probation for failing to adhere to Environmental Protection Agency (EPA) regulations which require a Risk Management Plan be developed, including a “worst case” response plan. Mann Chemical is also required to issue a public apology.
The guilty plea and sentence is announced by United States Attorney Peter F. Neronha and Tyler Amon, Special Agent in Charge of EPA's Criminal Investigation Division.
"EPA's Risk Management Program has a clear purpose -- to prevent and prepare for releases of toxic and flammable substances that have the potential for catastrophic consequences. The sentence imposed by the court underscores the importance placed on protecting workers, emergency responders and communities," stated Tyler Amon, Special Agent in Charge of EPA's Criminal Program in Rhode Island.
EPA regulations require facilities storing more than 1,000 lbs. of hydrofluoric acid to develop and implement a Risk Management Plan. An EPA inspection in June 2009 determined that Mann Chemical failed to develop and implement a Risk Management Plan while storing 92 drums of hydrofluoric acid in a concentration of 70%. The inventory indicated that each drum weighed 500 pounds, for a total of 46,000 pounds of hydrofluoric acid.
According to a Center for Disease Control and Prevention website, hydrogen fluoride is a chemical compound that contains fluorine. It can exist as a colorless gas or as a fuming liquid, or it can be dissolved in water. When hydrogen fluoride is dissolved in water, it may be called hydrofluoric acid. Hydrofluoric acid is used mainly for industrial purposes, and may cause skin burns, tissue damage and/or respiratory concerns.
The matter was investigated by the U.S. EPA Criminal Investigation Division with the assistance of the REFP Unit of the Office of Environmental Stewardship with EPA's Region 1 office.
The case was prosecuted by Assistant U.S. Attorney Terrence P. Donnelly and Special Assistant United States Attorney Peter Kenyon of the Environmental Protection Agency.
###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]U.S. Attorney's Office Hosts Annual Meeting of White Collar & Securities Fraud Working GroupRead the Press Release
CHARLOTTE, N.C. – Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina, today announced the annual meeting of the district’s White Collar and Securities Fraud Working Group. The working group was formed in 2011 to combat financial fraud by bringing together key federal, state and local law enforcement and regulatory partners. The working group targets a wide-range of financial schemes, including accounting fraud, Ponzi schemes and other finance-related matters. The annual meeting, which was hosted by U.S. Attorney’s Office in Charlotte, focused on strengthening existing relationships identifying recent trends, discussing ongoing investigations and setting enforcement priorities.
Members of the working group include officials from the U.S. Attorney’s Office (USAO), U.S. Securities & Exchange Commission (SEC), U.S. Commodity Futures Trading Commission (CFTC), Federal Bureau of Investigation (FBI), U.S. Secret Service, Internal Revenue Service-Criminal Investigation (IRS-CI), U.S. Postal Inspection Service, Homeland Security Investigations, Federal Deposit Insurance Corporation, Office of the Inspector General (FDIC-OIG), the North Carolina Attorney General’s Office, the North Carolina Department of Secretary of State, Securities Division, the North Carolina State Bureau of Investigation (SBI), and the Mecklenburg County District Attorney’s Office.
“Since its formation in 2011, the working group has worked collaboratively on a range of investigations leading to the successful prosecution of cases involving a variety of financial fraud schemes,” said Acting U.S. Attorney Rose. “Financial crimes can have devastating effects on the victims of fraud, who are not always able to fully recover their losses. The working group’s accomplishments are a clear message to the public that we are committed to protecting investors from financial scams, safeguarding our financial systems from fraud and going after those who engage in unlawful financial activities,” Rose added.
Examples of prosecutions include:
• United States v. Beaver: Chuckie Beaver pleaded guilty in November 2014 to one count of securities fraud for defrauding more than 30 investors of over $2 million dollars. From June 2012 to April 2014, Beaver induced over 30 victims falsely claiming their money would be invested in “Best Services, Inc.,” a company owned by Beaver and specializing in the repair of industrial electronic equipment. Beaver solicited friends, neighbors, and fellow church members to invest with his company, claiming that his company needed more capital to purchase materials to complete a large number of outstanding repair orders from major corporations. To further the scheme, created and showed his investors bogus documents, including false repair orders indicating significant work activity, fake customer checks, and fake customer emails, giving a false impression he had strong relationships with major corporations. Beaver awaits sentencing.
• United States v. Burks: Paul Burks, president of ZeekRewards, was indicted in October 2014 on federal charges for operating an Internet Ponzi scheme and is awaiting trial. The indictment alleges that from January 2010 to August 2012, Burks was the owner of Rex Venture Group, LLC (RVG), through which he owned and operated Zeekler, a sham Internet-based penny auction company, and its purported advertising division, ZeekRewards (collectively “Zeek”). The indictment alleges that Burks and his conspirators induced victims – including over 1,500 victims in the Charlotte area – to invest more than $850 million in their fraudulent scheme. Dawn Wright Olivares, Zeek’s Chief Operating Officer and Zeek’s Senior Technology Officer, Daniel C. Olivares, pleaded guilty in December 2013 to investment fraud conspiracy. Dawn Wright Olivares also pleaded guilty to tax fraud conspiracy. Both defendants await sentencing.
• United States v. Davey et. al.: Jonathan Davey was sentenced in January 2015 to 21 years in prison for his role in Ponzi scheme that defrauded victims of more than $40 million. Davey, a certified public accountant and registered investment advisor, served as the “Administrator” for numerous hedge funds for the Black Diamond Ponzi Scheme, an investment fraud scheme that deprived 400 victims of more than $40 million. Davey collected over $11 million from victims with his own hedge fund, by falsely stating that he had done proper due diligence on Black Diamond and that he was operating a legitimate hedge fund with significant safeguards. As the Black Diamond scheme began to collapse, Davey and others started a derivative Ponzi scheme and collected over $5 million from new victim investors, and used the new victim money to make payments to old investors and to themselves. Davey was one of 11 conspirators sentenced in the Black Diamond Ponzi scheme. The conspirators’ prison terms ranged from six months to 40 years.
• United States v. Femenia, et. al.: John W. Femenia, a former Wells Fargo investment banker, and three of his conspirators were sentenced in February 2015 to prison terms ranging from 6 to 60 months, arising from their participation on an insider trading conspiracy. From March 2010 to December 2012, Femenia, Roger A. Williams, Kenneth M. Raby, Aaron M. Wens, Frank M. Burgess, Jr., and James A. Hayes conducted illegal insider trading activities based on stolen material non-public information, including information on Wells Fargo and its clients’ upcoming corporate mergers and acquisitions.
• United States v. Gandy et. al.: Terry Gandy was sentenced in December 2014 to 57 months in prison for stealing over $2 million from more than 30 investors. Gandy mainly targeted his former co-workers at Philipp Morris and solicited funds from them, promising rates of 20% to 30% annual rates of return. Gandy used the victims’ money to fund his own personal lifestyle, including luxury hotels, multiple trips to Las Vegas, cash withdrawals at Las Vegas casinos, luxury cars, and to pay purported “profits” to other investors who asked for their money. To support his fraudulent scheme, Gandy provided his victims false account statements depicting bogus and over-inflated account balances. His conspirator, John Reid Perkins, was sentenced to 64 months in jail for his role in the scheme.
• United States v. Hunter: Toby Hunter is scheduled to be sentenced on May 6, 2015, for his role in securities fraud scheme that was part of the racketeering conspiracy related to the Operation Wax House investigation. Hunter and his conspirators targeted professional athletes and doctors as well as their personal and professional acquaintances and convinced them to invest in a series of sham corporations controlled by the Enterprise. They collectively stole over $27 million from more than 50 investor victims, including monies that the investor victims were induced to obtain as loans from financial institutions. The Enterprise used the victims’ money to finance its mortgage fraud operations and to support its members’ lifestyles.
• United States v. Mason: James Mason pleaded guilty in June 2014 to conspiracy to commit securities fraud and tax evasion for running a $5 million foreign currency investment fraud. Mason used most of investor victims’ money for his personal and familial living expenses, including purchasing a $435,000 home for his daughter and a $52,000 Lincoln vehicle for himself. Mason, who did not inform his investors about his 2000 federal wire fraud conviction, unsuccessfully invested a small amount of investor money. He currently awaits sentencing.
• United States v. McDougal: Claude Darrell McDougal pleaded guilty in July 2014 to securities fraud for orchestrating a Ponzi scheme and defrauding his victims of over $2.5 million. From 2006 to 2010, McDougal induced over 25 investors from Charlotte and elsewhere by promising their money would be invested in securities, in the form of promissory notes offered by US Financial Alliance Consultants, LLC (Financial Alliance). McDougal created the Charlotte-based company in 2005, but it was never registered as a dealer of securities in North Carolina or elsewhere. McDougal was also not registered to sell securities in North Carolina or another state. McDougal is awaiting sentencing.
• United States v. Rand: Michael Rand was sentenced in April 2015 to 120 months in prison on conspiracy and obstruction of justice charges in connection with federal investigation into a seven-year accounting fraud conspiracy at Beazer Homes USA, Inc. (“Beazer”). Rand was Beazer’s Chief Account Officer and directed an accounting fraud conspiracy to falsify reported profits at Beazer by lying to Beazer’s auditors, fraudulently achieving earnings targets, falsifying Beazer’s books and records, and deceiving the public by boosting and lowering company earnings. Rand was convicted of wire fraud conspiracy, conspiracy to commit securities fraud, to make false and misleading statements to auditors and accountants, to circumvent Beazer’s internal accounting controls, and to falsify the books, records, and accounts of Beazer.
• United States v. Shepherd: James Alexander Shepherd was sentenced in February 2015 to 84 months in prison for defrauding more than 100 investors of over $6 million. From 2006 to 2013, Shepherd defrauded investors, primarily in Union County, of approximately $6 million. Shepherd carried out the fraud by promising his victims returns on their investments in funds he owned and controlled, among other things. In about 2006, Shepherd began misappropriating some of the investors’ money and used it to pay other investors, to trade in his personal accounts, and to fund the operations of a newsletter he distributed nationwide. Shepherd also used the money to fund his personal lifestyle, including to pay for a $2 million home.
• United States v. Wright: C. David Wright was sentenced to 48 months in October 2014 for running a $1 million Ponzi scheme that he referred to as a “Commodity Investment Group.” Wright told investors that he invested in hedge funds, commodities, and Quick Trip service stores. In reality, Wright diverted victim money to a side-business he owned, used it to make Ponzi payments, and to fund his own lifestyle.
• Bank of America Residential Mortgage-Backed Securities (RMBS): In addition to collaborating on criminal enforcement matters, the U.S. Attorney’s Office and the SEC brought a historic civil fraud suit against Bank of America in August 2013 concerning an $850 million mortgage securitization. As part of the historic $16.65 billion settlement reached in August 2014, Bank of America acknowledged that it marketed this securitization as being backed by bank-originated “prime” mortgages that were underwritten in accordance with its underwriting guidelines, when, in fact, Bank of America knew that a significant number of loans in the security were “wholesale” mortgages originated through mortgage brokers. The bank sold these RMBS to federally backed financial institutions without conducting any third party due diligence on the securitized loans and without disclosing key facts to investors in the offering documents filed with the SEC.
“Our annual meeting provides an opportunity to renew and strengthen ties with our regulatory and law enforcement partners. As a member of the group, I am proud of the work we’ve accomplished,” said Assistant U.S. Attorney (AUSA) Mark T. Odulio, who represents the U.S. Attorney’s Office in the working group.
For tips on how to identify investor scams and for additional information on investor fraud please visit: www.stopfraud.gov.
U.S. Attorney Ortiz Announces Your Future, Your Decision Essay WinnersRead the Press Release
On April 15, 2015, Woodland Academy in Worcester hosted U.S. Attorney Carmen M. Ortiz for the Your Future, Your Decision Program. More than 100 fifth and sixth-grade students attended the event which focused on the importance of good decision making. A resource fair and student essay contest was held in concert with the event. U.S. Attorney Ortiz congratulates the following top three essay contest winners, who were selected by the teaching staff at Woodland Academy:
- Daniel
- Luis
- Rut
Three Toledo men indicted for making and passing counterfeit billsRead the Press Release
A three-count indictment was filed charging three Toledo men with crimes related to counterfeiting, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Lafoe D. White, 23; Myron A.L. Haskins, 26; and Raymond C. Armstrong, 56, were indicted on charges of conspiracy, counterfeiting obligations or securities of the United States, and uttering counterfeit obligations or securities of the United States.
Count 1 of the indictment alleges that in January 2015, White, Haskins and Armstrong conspired to manufacture and possess counterfeit Federal Reserve Notes and then attempt to pass the counterfeit notes at retail establishments.
On or about January 22, 2015, Myron A.L. Haskins possessed an inkjet printer, linen paper and counterfeit $5, $10, and $20 Federal Reserve Notes. On or about January 22, 2015, Lafoe D. White gave counterfeit $10 Federal Reserve Notes to Raymond C. Armstrong. On or about January 22, 2015, Raymond C. Armstrong attempted to pass counterfeit $10 Federal Reserve Notes at a retail store in Boardman, Ohio, according to the indictment.
Count 2 of the indictment alleges that on or about January 22, 2015, White and Haskins did counterfeit, falsely make and forge counterfeited $5, $10, and $20 Federal Reserve Notes.
Count 3 of the indictment alleges that on or about January 22, 2015 White, Haskins and Armstrong attempted to pass counterfeited obligations at a Wal-Mart in Boardman, Ohio.
If convicted, a defendant’s sentence will be determined by the Court after review of factors unique to this case, including a defendant’s prior criminal record, if any, a defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the United States Secret Service and the Boardman Police Department. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Men Sentenced in Federal Court to Combined Total of over Twenty-One (21) Years in Prison for Child Pornography OffensesRead the Press Release
Fayetteville/Fort Smith, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that James Gerald Cain, Edward McMahon, and Matthew McMullen were sentenced this week to a combined total of 254 months in federal prison without the possibility of parole for unrelated child pornography offenses, specifically, Receipt of Images of Child Pornography. Cain, 53 of Springdale, was sentenced to 97 months in prison; McMahon, age 61 of Lincoln, was sentenced to 97 months in prison; McMullen, age 32 of Fayetteville, was sentenced to 60 months in prison. The Honorable Timothy L. Brooks and the Honorable P.K. Holmes, III, presided over the sentencing hearings in the United States District Court in Fayetteville and Fort Smith, respectively.
U. S. Attorney Eldridge commented, “There is no higher priority in our office than protecting our children. The sentences announced today send a strong message that we will continue to aggressively prosecute those involved in child pornography offenses. Those that possess and view images of child pornography perpetuate this despicable trade and empower those that directly abuse kids. We will continue to fight these horrendous crimes.”
“Child pornography steals the innocence of children and destroys lives. By downloading and possessing images showing the sexual abuse of minors these defendants re-victimized multiple innocent children, and supported the producers who committed child rape,” said HSI New Orleans Acting Special Agent in Charge Cindy M. Johnson. “Sexual abuse scars children for life, and HSI will continue to use all the tools in its arsenal to identify the perpetrators of these horrendous acts and seek justice on behalf of their victims.” Johnson oversees a five-state area of operations to include Arkansas, Alabama, Louisiana, Mississippi and Tennessee.
With respect to Cain, in August, 2014, the Northwest Arkansas Internet Crimes Against Children Taskforce identified a computer that was engaging in the distribution of child pornography via an internet file sharing program. A subsequent investigation revealed that the subscriber information related to the suspect internet user account returned to the Springdale residence of the defendant, James Cain. In October of 2014, a federal search warrant was executed on Cain’s home where law enforcement seized numerous computers and digital storage devices. Cain admitted at that time to owning the seized equipment and using it to search for and download images of minors engaged in sexually explicit conduct. Further, he stated he had being downloading child pornography for approximately 15 years. A subsequent forensic examination of his computer revealed one thousand images and/or videos of minors engaging in such sexually explicit conduct. Cain was arrested on December 3, 2014 and pleaded guilty to the charge on February 4, 2015. Cain was also sentenced to 15 years supervised release following his prison term and a $1,750.00 fine.
With respect to McMahon, in September, 2014, the Northwest Arkansas Internet Crimes Against Children Taskforce received information from the National Center for Missing and Exploited Children concerning an individual residing in Northwest Arkansas being involved in the posting of child pornography pictures online. As a result, members of the ICAC Taskforce executed a federal search warrant at the home of the defendant, Edward McMahon, in Lincoln, Arkansas. At McMahon’s residence, law enforcement confiscated multiple items of digital evidence that contained child pornography. Additionally, McMahon admitted to law enforcement to owning the seized equipment and to using it to trade child pornography. A subsequent forensic examination of his computer revealed hundreds of images and videos of child pornography. McMahon was arrested on November 21, 2014 and pleaded guilty to the charge on February 4, 2015. McMahon was also sentenced to 10 years supervised release following his prison term and a $1,750.00 fine.
With respect to McMullen, in April, 2014, the Northwest Arkansas/River Valley Internet Crimes Against Children Taskforce executed a federal search warrant at the Fort Smith residence of McMullen related to the possession and distribution of child pornography. While at the scene, the defendant admitted to downloading child pornography from the internet. A subsequent forensic examination of his computer revealed over 400 videos of minors engaging in sex acts. McMullen was arrested on December 2, 2014 and pleaded guilty to the charge on January 20, 2015. At sentencing, the Government presented the Court with evidence that many of the minors depicted were under 10 years of age. McMullen was also sentenced to five years supervised released following his prison term.
These cases were investigated by Homeland Security Investigations, the Northwest Arkansas and River Valley Internet Crimes Against Children Taskforce, and the Washington County Sheriff’s Office. Assistant United States Attorney Dustin Roberts prosecuted the cases for the United States.
These cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (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.
* * * E N D * * *
Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Three Cleveland women indicted for $165,000 check-kiting schemeRead the Press Release
A 32-count federal indictment was filed charging three Cleveland women for their roles in a $165,000 conspiracy to pass fraudulent checks and then withdrew the money, sometimes at a Cleveland casino, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Devinne P. Hollie, 29, Sade Philpott, 29, and Shanita Hollie, 28, are each charged with one count of conspiracy to commit bank fraud and multiple counts of bank fraud.
The Hollies and Philpott, acting with co-conspirators not yet charged, engaged in a check-kiting scheme in which they fraudulently obtained funds from financial institutions by depositing multiple counterfeit and forged checks into co-conspirators’ bank accounts, according to the indictment.
They then withdrew the proceeds from those accounts at ATMs, through debit card purchases, and by making withdrawals at a local casino, according to the indictment.
“This group passed bad checks and stole from banks,” Dettelbach said. “They may be trading their time at a glitzy casino for the comforts of a federal prison.”
“These women believed they had found a shortcut to put money in their pockets and now they will have to pay for their criminal behavior,” Anthony said. “The FBI will continue this investigation in order to bring all individuals involved in this group to justice.”
In most instances, the Hollies and Philpott found a co-conspirator who was willing and able to open a checking account at a bank. Once these co-conspirators obtained debit cards and PINs for the accounts, they passed these items on to the defendants, who then deposited forged and counterfeit checks into the bank accounts. These deposits typically occurred late at night or in the early morning hours, when the banks were closed and could not detect that the checks were counterfeit and forged, according to the indictment.
The defendants and co-conspirators would then often meet at the Horseshoe Casino in downtown Cleveland, where the co-conspirators would use Total Rewards Cards from the casino linked to their bank accounts to make large scale cash withdrawals from the casino’s cage, according to the indictment.
The Hollies, Philpott and their co-conspirators made deposits of counterfeit and forged checks on approximately 31 different occasions. The false and fraudulent deposits totaled approximately $165,000, and the banks lost approximately of $120,000.
If convicted, the defendants’ sentences will be determined by the court after review of the factors unique to this case, including the defendants’ prior criminal records, the defendants’ roles in the offense and the characteristics of the criminal conduct. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant U.S. Attorneys Om Kakani and Carmen Brown, following an investigation by the Federal Bureau of Investigation, with assistance from the Ohio Casino Control Commission.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove the defendant guilty beyond a reasonable doubt.
Three Albuquerque Businessmen Plead Guilty to Federal Tax ChargesRead the Press Release
ALBUQUERQUE – Three brothers, all naturalized U.S. citizens from Armenia, entered guilty pleas in Albuquerque, N.M., to conspiring with each other to defraud the United States of corporate income tax due and owing from their jointly owned business, announced U.S. Attorney Damon P. Martinez and Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
Hrant Kostanian, 51, Hrair Kostanian, 55, and Gayk Kostanian, 59, were indicted on Sept. 23, 2014, and charged with one count of conspiracy and four counts of tax evasion. Count 1 of the indictment charged the three brothers with conspiracy to defraud the United States of corporate taxes owed on income generated by Pro Billiards, Inc., a New Mexico corporation jointly owned by the brothers that does business as “Billiards Palace” in northeast Albuquerque. The conspiracy count also alleges that the Kostanians also evaded personal income tax due and owing on their personal incomes. The brothers are charged with evading approximately $263,600.00 in corporate taxes during tax years 2007, 2008, 2009 and 2010. More specifically, the Kostanians evaded federal taxes owed by their business by underreporting their income as follows:
Count 2 charges the Kostanians with evading $58,834.00 in federal taxes by falsely claiming that their business had $694,293.00 in taxable income in 2007 when in fact it had $906,003.00 in taxable income that year. Count 3 charges the brothers with evading $25,521.00 in federal taxes by falsely claiming that their business had $624,034.00 in taxable income in 2008 when in fact it had $773,289.00 in taxable income that year. Count 4 charges them with evading $33,810.00 in federal taxes by falsely claiming that their business had $543,224.00 in taxable income in 2009 when in fact it had $684,694.00 in taxable income that year. Count 5 charges the Kostanians with evading $10,485.00 in federal taxes by falsely claiming that their business had $476,439.00 in taxable income in 2010 when in fact it had $773,289.00 in taxable income that year.
According to the indictment, the Kostanians perpetuated their fraud against the United States by maintaining false books and records for their business in order to conceal their actual corporate income. The brothers presented the false books and records to their corporate accountant, which caused their accountant to file false corporate income taxes with the IRS. The indictment also stated that the Kostanians diverted the unreported income to their own personal use and maintained a separate accounting ledger that showed their business’s actual income.
Today, the Kostanians each entered a guilty plea to Count 1 of the indictment. In their plea agreements, the brothers admitted conspiring with each other to defraud the United States by obstructing the IRS’s ability to collect corporate income taxes owed by their business. Each admitted that they maintained false books and records that they presented to their corporate accountant for use in preparing the business’s income taxes for 2007, 2008, 2009 and 2010. They also admitted maintaining a separate accounting ledger that showed their business’s actual income. The conspiracy was discovered in Jan. 2011 and Feb. 2011, when Hrair Kostanian and Gayk Kostanian discussed the prospect of selling the business with undercover IRS agents and revealed that the business generated more income than reflected on the business’s corporate tax returns. On Feb. 23, 2011, Hrair and Gayk Kostanian showed the undercover IRS agents documents that detailed the business’s additional, unreported income.
In their plea agreements, all three brothers admitted that they evaded an aggregate of $263,600.00 in federal corporate taxes for tax years 2007 through 2010, by intentionally understating their business’s income. In addition, each of the Kostanians admitted evading his own taxes during that same period by understating his personal income. To that end, Hrant Kostanian admitted evading $33,312.00 in individual taxes; Hrair Kostanian admitted evading $20,386.00 in individual taxes; and Gayk Kostanian admitted evading $16,059.00 in individual taxes.
At sentencing, each of the Kostanian brothers faces a statutory maximum sentence of five years in prison and a fine of $250,000.00. Under their plea agreements the Kostanians will be required jointly to pay $263,600.00 in restitution to the IRS. In addition, the brothers will be required to pay restitution to the IRS as follows: Hrant Kostanian, $33,312.00; Hrair Kostanian, $20,386.00; and Gayk Kostanian, $16,059.00. Sentencing hearings have yet to be scheduled.
This case was investigated by the Albuquerque office of IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Reeve L. Swainston.
Sweepstakes Software Providers Sign Agreements Stopping Their Ability to Provide Alleged Illegal Sweepstakes Software to Internet Cafes Throughout the State of North CarolinaRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that the U.S. Attorney’s Office reached agreements with White Sands Technology, LLC, Sierra Software, LLC, TNT Software, LLC, Digital Reveal, LLC, and the principal of Figure 8 Technologies, Inc. These agreements provide that the United States Attorney’s Office for the Eastern District of North Carolina will not prosecute the software companies or their principals, for the use of alleged illegal internet sweepstakes software in internet cafes across the state of North Carolina. These agreements are conditioned upon their agreement that by July 1, 2015, they will no longer have any involvement with sweepstakes in North Carolina involving an entertaining display. The companies supplied hundreds of Internet Cafes in North Carolina:
- White Sands Technology, LLC – Approximately 180 locations
- Sierra Software, LLC – Approximately 175 locations
- TNT Software, LLC, Digital Reveal, LLC – Approximately 40 locations
- Digital Reveal, LLC – Approximately 25 locations
- Figure 8 Technologies, Inc. –Over 200 locations before selling its software in January 2014
Sierra Software, LLC and the principal of Figure 8 Technologies, Inc. agreed that they will not take part in North Carolina in any activities relating to electronic sweepstakes at all. White Sands Technology, LLC, TNT Software, LLC, and Digital Reveal, LLC agreed that they will take no part in any actions relating to sweepstakes relating in any way to the use of an entertaining display in North Carolina. They also agree that to provide notice to the U.S. Attorney’s Office for the Eastern District of North Carolina before taking part in any activities relating to sweepstakes or gambling in North Carolina not covered under the ban. Sweepstakes is defined to include all games where chance predominates.
United States Attorney Thomas G. Walker stated: “We hope this action will be a big step forward in ensuring compliance with North Carolina’s gambling laws. Our office is prepared to assist the state in enforcing large scale violations of the law.”
Mark J. Senter, Branch Head of North Carolina Alcohol Law Enforcement, stated: “Alcohol Law Enforcement is proud to have worked with the U.S. Attorney’s Office for the Eastern District of North Carolina in this case. Sweepstakes machines have been a source of problems for local law enforcement and the community for years. It is our hope this action eliminates this illegal activity.”
Thomas J. Holloman III, Special Agent in Charge, IRS-Criminal Investigation, Charlotte Field Office, stated: “CI stands in support of the USAO’s decision to enter into this non-prosecution agreement. Today’s agreement is consistent with our two-faceted, proactive approach to industry compliance that focuses on investigations and liaison activities essential to the enforcement of tax, money laundering, and related financial crimes to combat illegal activity within the gaming industry, as well as to uncover and shutdown illegal gaming operations. This agreement is a positive step forward in reducing the number of software companies that supply gaming type software crucial to operating internet sweepstakes operations in North Carolina.”
Cumberland County Sheriff Earl R. “Moose” Butler stated: “This announcement marks a major milestone in the long and ongoing fight against illegal gambling. In this case, for several years, video poker machines have been masquerading as sweepstakes. We hope these agreements will stop and deter evasion of North Carolina’s gambling laws. We have long been involved in this fight, and we will not stop until the laws passed by the legislature and the North Carolinians they represent are fully enforced.”
Investigation of this matter was conducted by North Carolina Alcohol Law Enforcement, the Internal Revenue Service, and the Cumberland County Sheriff’s Department in coordination with Assistant United States Attorneys David Bragdon and Joshua Royster.
Strongsville man faces child pornography chargesRead the Press Release
Ross J. Cozens, 68, of Strongsville, was charged with receiving and possessing visual depictions of minors engaged in sexually explicit conduct, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
The Indictment charges that from on or about September 22, 2007, through on or about June 16, 2014, in the Northern District of Ohio, Eastern Division, and elsewhere, Cozens knowingly received, using any means and facility of interstate and foreign commerce, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct, and which files had been shipped and transported in and affecting interstate and foreign commerce. The indictment also charges that on December 16, 2014, Cozens possessed a computer, an external hard drive and a USB storage device, each that contained child pornography.
If convicted, the sentence in this case will be determined by the court after consideration of the federal sentencing guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the United States Postal Inspection Service.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
State Fraud Enforcement Official Arrested, Charged with Wire FraudRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that LYNWOOD PATRICK, JR., 39, of East Hartford, was arrested today on a federal criminal complaint charging him with wire fraud in connection with his submission of a fraudulent application for a personal mortgage modification.
PATRICK was arrested this morning at his residence. He appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford and was released on a $150,000 bond.
According to the criminal complaint, PATRICK is employed as the Director of Investigations for the State of Connecticut Department of Social Services, Office of Quality Assurance.
The complaint alleges that, from approximately November 2012 through May 2013, PATRICK applied for a mortgage modification under the Making Home Affordable program, a federal initiative designed to assist homeowners who have experienced a decline in income access secure loans at lower rates. When applying for mortgage relief through JP Morgan Chase, PATRICK fabricated State of Connecticut paystubs and lied about his assets in order qualify for the program. Specifically, PATRICK claimed total assets of $500 in one checking account to show that he had experienced a loss of income causing a hardship when, in fact, he had thousands of dollars spread out over multiple accounts at several institutions and his rate of pay had not diminished.
In his capacity as the Director of Investigations, PATRICK is responsible for coordinating and conducting activities to prevent, detect and investigate fraud, waste, abuse and overpayments in the Connecticut Medicaid, Care4Kids, Supplemental Nutritional Assistance and Connecticut Energy Assistance Programs. PATRICK’s salary is partially paid for by the federal Centers for Medicare and Medicaid Services, which is a federal agency within the U.S. Department of Health and Human Services.
The criminal complaint charges PATRICK with wire fraud, which carries a maximum term of imprisonment of 20 years.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Connecticut Public Corruption Task Force, which includes the U.S. Department of Health and Human Services – Office of Inspector General, U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Bureau of Investigation, U.S. Postal Inspection Service and Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Christopher M. Mattei.
Citizens are encouraged to report to corruption to the Connecticut Public Corruption Task Force by calling 1-800-CALL-FBI (1-800-225-5324).
St. Louis County Man Sentenced on Federal Firearms ChargesRead the Press Release
St. Louis, MO – TODD SCOTT, St. Louis, Missouri, was sentenced to 10 years in prison for illegally possessing a firearm.
According to the plea agreement, Scott was found by St. Louis police officers in possession of a .38 special revolver on November 12, 2013. As a convicted felon, including two prior federal convictions for possession with the intent to distribute heroin and a weapons charge, Scott was prohibited from possessing a firearm.
Scott pled guilty to possessing a firearm as a convicted felon in February. He appeared today for sentencing before Judge Stephen N. Limbaugh, Jr.
This case was investigated by the St. Louis Metropolitan Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
Six Defendants Convicted in Mortgage Fraud Scheme After 12-Day TrialRead the Press Release
SACRAMENTO, Calif. — After a 12–day trial, a federal jury today found six defendants guilty of all counts of wire fraud in connection with a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.
Irina Markevich, 30, of Rio Linda; Anatoliy Markevich, 35, of Sacramento; and Marina Pukhkan, 53, of Rio Linda, were each convicted of two counts of wire fraud. Daniil Markevich, 38; his wife Svetlana Markevich, 38, both of Escondido; and Alex Markevich, 40, of Rio Linda, were each convicted on one count of wire fraud.
According to evidence presented at trial, between February 2007 and March 2008, the defendants each obtained home loans using fraudulent loan applications and related documents that contained false information about their income, assets, bank accounts, and intent to occupy the residences. The proceeds of the fraud scheme were derived from inflated purchase prices and payments for fake construction work that never in fact took place.
All together the defendants obtained over $5 million in home loans for six properties in Roseville, Sacramento, and West Sacramento, and then made only between three and six payments before letting the loans go into default. Although their loan applications claimed that they individually made approximately $190,000 to $426,000 per year, the defendants’ tax returns showed that they actually made only between about $3,000 and $22,000 in 2007, the year they purchased the homes.
Each of the properties purchased by the defendants was foreclosed upon within about one year of the purchase date. For acting as straw buyers in this mortgage fraud scheme, the defendants were collectively compensated hundreds of thousands of dollars and purchased such things as a Lincoln Navigator and a limousine with the proceeds. The total fraud proceeds to them, other family members, and other participants in the scheme was in excess of $700,000.
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. Assistant United States Attorney Christopher S. Hales and Special Assistant United States Attorney E. Kate Patchen are prosecuting the case.
All of the defendants are scheduled to be sentenced by United States District Judge John A. Mendez on August 11, 2015. Each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count of conviction. The actual sentence, 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.
Remlap Man Sentenced to 25 Years in Prison for String of 2012 Armed RobberiesRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Remlap man to 25 years in prison for a string of armed robberies in northeastern Jefferson County in October 2012, including one in which a store customer was shot. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Steven Gerido announced the sentence.
U.S. District Judge Karon O. Bowdre sentenced JAMEY LEE MATTHEWS, 41, to 25 years in prison, in accordance with a binding plea agreement Matthews entered with the government. The judge also ordered Matthews to pay $202,000 in restitution for medical expenses to the man he shot, and $6,000 to the stores he robbed.
Matthews pleaded guilty in October 2014 to four counts of robbery under the federal Hobbs Act, which involves robbery affecting interstate commerce, one count of armed pharmacy robbery, and one count of discharging a firearm during a crime of violence.
He committed the Hobbs Act robberies at Mike's Quick Stop on the Pinson Valley Parkway on Oct. 11, 2012, Dollar General in Trafford on Oct. 15, 2012, Winn Dixie supermarket on Old Springville Road and Roger's Gas Station in Clay, both on Oct. 19, 2012. He committed the armed pharmacy robbery at Tyner's Pharmacy on Chalkville Road in Birmingham on Oct. 15, 2012. Matthews discharged a firearm during the robbery at Roger's Gas Station.
According to Matthews' plea agreement, he brandished a firearm during all the robberies, but fired a gun as he ran out of Roger's and employees and customers from the gas station chased him. A customer was struck five times and testified during the sentencing hearing that he still has two pellets in his hip.
Authorities charged Matthews with the robberies after he was found, seriously injured, beneath a remote bluff in Remlap on Oct. 20, 2012. After he was flown to UAB for treatment, Blount County Sheriff's deputies found a pick-up truck at the top of the bluff that was registered to Matthews' mother, according to the plea agreement. Four firearms, a customer's check written to Roger's on Oct. 19, and pill bottles from Tyner's Pharmacy were found in the truck. Ballistics tests later matched shell cases recovered from the Roger's robbery to a Rossi .410-caliber shotgun found in the truck, the plea agreement says.
The FBI and ATF investigated the case, which Assistant U.S. Attorney John B. Felton prosecuted.
###
Rathdrum Man Sentenced to Prison for Possession of Child Pornography ChargeRead the Press Release
COEUR D'ALENE - Randy James Hirst, 58, of Rathdrum, Idaho, was sentenced yesterday to 36 months in prison for possessing child pornography, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Hirst to pay $3,000 to a child in one of the images Hirst possessed, and to serve ten years of supervised release upon his release from prison. Hirst pleaded guilty to the charge on January 21, 2015.
According to the plea agreement, Hirst’s computer was identified as making child pornography available in an internet based peer to peer network. A U.S. Secret Service agent discovered Hirst’s online activity and in July 2013, a federal search warrant was served on Hirst’s Rathdrum residence. Investigators seized Hirst’s computers and later found that they contained nine videos and three-hundred images of children engaged in sexually explicit acts. A forensic analysis revealed that Hirst used search terms to find sexually explicit images of preteen girls. During the sentencing hearing, Hirst admitted that he committed the crime and apologized to the Court and his family.
The case was investigated through the collaborative effort of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), United States Secret Service, United States Border Patrol, and United States Customs and Border Protection. These agencies participate in the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icactaskforce.org.
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.”
Previously Convicted Felon Sentenced to 92 Months in Federal PrisonRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Matthew Edward Baumrucker, age 31, of Spokane, Washington was sentenced today after having previously pled guilty on January 8, 2015 to being a Previously Convicted Felon in Possession of a Firearm. Chief United States District Court Judge Rosanna Malouf Peterson sentenced Baumrucker to a 92 month term of imprisonment, to be followed by a three year term of court supervision following he is released from Federal prison.
According to court records, on March 12, 2014, Detectives with the Spokane County Sheriff’s Office were looking for Baumrucker, as he had several active warrants for his arrest. Baumrucker was ultimately located in a motel in Spokane Valley, Washington. Detectives made phone contact with Baumrucker, who agreed to come out of his motel room. After the call, surveillance officers located outside of the motel building saw Baumrucker place a handgun on the air conditioner unit outside of the window to his room. After he was arrested, Baumrucker admitted he possessed the gun, but denied it was his.
Michael C. Ormsby started, "Matthew Baumrucker has a significant criminal history, including a prior federal felony conviction. He was a righteous target and I commend the Spokane Police Department, the Spokane Sheriff’s Office, and the FBI for their efforts in making this a successful prosecution. The public must understand that every previously convicted felon who possesses a firearm and/or even a single round of ammunition faces serious consequences when caught. The 92 month sentence meted out today is just one such example."
This investigation was conducted by the Federal Bureau of Investigation, the Spokane Sheriff’s Office, and the Spokane Police Department. Caitlin A. Baunsgard, an Assistant United States Attorney for the Eastern District of Washington, prosecuted the case.
Plummer Man Sentenced for Breaking Cousin’s JawRead the Press Release
COEUR D'ALENE - Desmond J. Seyler, 26, of Plummer, Idaho, was sentenced yesterday to 15 months in prison for assault resulting in serious bodily injury, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Seyler to serve three years of supervised release, and to pay $20,008.27 in restitution. Seyler pleaded guilty on August 12, 2014.
According to the plea agreement, Seyler admitted that he fractured his cousin’s jaw when he hit her in the face. Seyler was intoxicated at the time he committed the crime. he case was prosecuted in federal court because the offense happened on the Coeur d'Alene Indian Reservation and both Seyler and his victim are members of federally recognized tribes. During sentencing Judge Winmill recognized the defendant’s efforts in engaging in treatment and embracing sobriety.
The case was investigated by the Coeur d’Alene Tribal Police and the Federal Bureau of Investigation (FBI).
Pharmacy Company Agreed to Pay $5 Million to Settle Claims That It Gave Gift Cards and Waived Copayayments for Medicare and Medicaid Patients in Violation of the Anti-Kickback StatuteRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that Physician Pharmacy Alliance, Inc., (“PPA”), agreed to pay $5 Million to settle claims that, under prior ownership, PPA gave improper gift cards in order to induce referrals or enrollments of Medicare and Medicaid patients, and routinely waived copayments of Medicare and Medicaid patients, in violation of the Anti-kickback statute.
“This settlement demonstrates our commitment to protect taxpayer money and the integrity of Medicare and Medicaid health care programs. This case underscores for health care providers that if you commit fraud by giving gift cards or routinely waiving copayments in order to induce referrals, you will be liable for substantial damages and penalties under the Anti-kickback statute,” stated U.S. Attorney Walker.
Health Care Providers are prohibited from giving illegal remunerations under the Anti-kickback statute, which includes giving cash equivalents, such as gift cards, and routinely waiving copayments. PPA provides pharmacy services through home delivery to Medicare and Medicaid patients in North Carolina. PPA’s current owners agreed to this settlement for damages and penalties based upon allegations of PPA practices that occurred prior to their purchase of the business in 2011. The claims resolved by civil settlement are allegations only; there has been no determination of liability.
The settlement was the result of coordinated effort by the U.S. Attorney’s Office for the Eastern District of North Carolina, the United States Department of Health and Human Services Office of the Inspector General, and the North Carolina Department of Justice's Medicaid Investigations Division. Assistant United States Attorneys Neal Fowler and William Gilmore, along with North Carolina Department of Justice Attorneys Stacy Race and Michael Heavner, directed the investigation and negotiated the settlement.
Palos Hills Felon Charged with Illegally Possessing and Dealing Firearms; 10 Guns SeizedRead the Press Release
CHICAGO ― Ten assorted pistols, rifles, shotguns, and a revolver have been seized and a Palos Hills man is facing federal firearms charges as a result of an investigation led by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Over the course of the investigation, the defendant illegally sold eight firearms to a confidential informant, and two additional firearms were seized from the defendant’s residence at the time of his arrest in March 2015.
Steven Riley, 23, of Palos Hills, was charged yesterday in a seven count indictment by a federal grand jury on charges of being a felon-in-possession of firearms and dealing firearms without a federal license. Riley was arrested on a federal complaint in March 2015, and remains on bond. Riley will be arraigned on a date to be determined by U.S. District Court Judge Virginia M. Kendall.
According to the complaint, beginning in October 2014 through February 2015, Riley sold numerous firearms to a confidential informant (CI). In recorded conversations between Riley and the CI, Riley discussed the importance of removing the serial numbers so that the firearms could not be traced. Riley also supplied the CI with ammunition at three of the five controlled purchases; one of the guns purchased by the CI was loaded with ammunition.
According to the charges, the CI purchased eight firearms in total from Riley; four rifles, three shotguns, and a revolver, many of which had obliterated serial numbers. Riley is also charged with illegal possession of two loaded semi-automatic pistols recovered at his residence during the execution of a search warrant. In addition, the indictment seeks forfeiture of 1,872 rounds of ammunition seized from his residence on the day of his arrest.
Being a felon-in-possession of a firearm carries a maximum sentence of 10 years in prison and a $250,000 fine. Dealing firearms without a federal license carries a maximum sentence of five years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Carl Vasilko, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The Hickory Hills Police Department assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Elizabeth Pozolo.
Criminal complaints are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Palm Coast Man Indicted on Federal Charge of Failure to Register as A Sex OffenderRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Stephen Paul Cotton (43, Palm Coast) has been indicted for failing to register as a sex offender after traveling from Florida to North Carolina. If convicted, he faces up to 10 years in federal prison. Cotton was arrested in Suwanee, Georgia on April 11, 2015.
According to the indictment, on or about January 6, 1999, Cotton was convicted of committing a lewd and lascivious act on a child in Manatee County, Florida. Subsequent to his conviction, and between July 2, 2012 and December 19, 2014, he traveled from Florida to North Carolina and failed to register as a sex offender, as required by the Sex Offender Registration and Notification Act.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act provides for the use of federal law enforcement resources, including the United States Marshals Service, to assist state and local authorities in locating and apprehending non-compliant sex offenders. This case was investigated by the United States Marshals Service, the Suwanee (Georgia) Police Department, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent until, and unless, proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Office of Justice for Victims of Overseas Terrorism Celebrates 10-Year AnniversaryRead the Press Release
The Justice Department’s Office of Justice for Victims of Overseas Terrorism (OVT) today celebrates its 10-year anniversary of providing specialized assistance to U.S. citizen victims and their families when they are injured or killed in terrorist attacks abroad, announced Assistant Attorney General for National Security John P. Carlin.
OVT was founded on May 6, 2005, by then-Attorney General Alberto Gonzales. It is now part of the Justice Department’s National Security Division, which was created in 2006. OVT’s primary responsibility to Americans who are victims of overseas terrorism is to work to ensure that investigation and prosecution remain a high priority. OVT also updates victims and their families on the progress of any criminal investigation and prosecution, and ensures that the rights of victims and their families are treated with honor and respect by criminal justice systems around the world. The office has worked to provide support to U.S. victims of terrorist attacks in many nations, including Afghanistan, Colombia, Germany, Israel, Iraq, Indonesia, India, Kenya, Pakistan and the Philippines, among others.
“The Office of Justice for Victims of Overseas Terrorism serves as an advocate for our citizens impacted by terrorism as they navigate foreign criminal justice systems in pursuit of accountability,” said Assistant Attorney General Carlin. “I applaud the work they have done over the last decade to aid hundreds of victims and their families, and look forward to continuing to support their office as they provide such critical resources to American victims of terrorism overseas and their families.”
“OVT is truly a groundbreaking office in the Department of Justice,” said Director Heather Cartwright of OVT. “Victims themselves identified the need and called for the creation of an office devoted to advocating for justice for U.S. citizens who suffer terrorist attacks in foreign countries. Ten years after its creation, OVT has developed an advocacy program to support these victims, and looks forward to providing even more comprehensive support and services in the future.”
For more information on the important work done by OVT every day, please visit their website. If you are a U.S. citizen victim of international terrorism or a victim’s family member and you seek information on foreign criminal justice proceedings, OVT can assist you. Please contact OVT at [email protected].
Norristown Bookmaker Pleads to Tax ChargesRead the Press Release
PHILADELPHIA - Jacob Corropolese, Sr., 65, of Norristown, PA, pleaded guilty today to tax charges in connection with his sports bookmaking operation. Corropolese admitted to filing false tax returns when he ran a sports bookmaking operation. Corropolese received more than $500,000 in proceeds from bettors but did not report any income from his bookmaking activities on his federal income tax returns for 2010 and 2011. As a result he substantially underreported his income in each year.
U.S. District Court Judge Jan E. DuBois scheduled a sentencing hearing for DATE. Corropolese faces a maximum possible sentence of six years in prison, one year of supervised release, a $200,000 fine, and restitution to the IRS.
The case was investigated by the Internal Revenue Service Criminal Investigations and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Nancy E. Potts.
Muskogee Man Sentenced to 120 Months for Possession of Firearm with Obliterated Serial NumberRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that STEVEN ALEX HUGHART, age 38, of Muskogee, Oklahoma, was sentenced to 120 months imprisonment, followed by 3 years of supervised release for being a Felon in Possession of a Firearm, in violation of Title 18, United States Code, Section 922(g)(1) and Possession of a Firearm with a Removed, Obliterated, or Altered Serial Number, in violation of Title 18, United States Code, Sections 922(k) and 924(a)(1)(B).
The charges arose from an investigation by the Muskogee Police Department and the Federal Bureau of Investigation. The defendant was indicted in September, 2014 and pled guilty in January, 2015.
The Indictment alleges that on or about February 13, 2014, within the Eastern District of Oklahoma, the defendant having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, one .380 Jimenez Arms handgun, bearing an obliterated serial number, which had been shipped and transported in interstate commerce.
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 prison at which he will serve his nonparolable sentence.
First Assistant United States Attorney Doug Horn represented the United States.
More Charges Against Christan County Reserve Deputy in $14.5 Million Investment Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a reserve deputy sheriff for Christian County, Mo., was indicted by a federal grand jury today on additional charges related to a $14.5 million investment fraud scheme.
Marty Layne Brickey, 44, of Republic, Mo., was charged in a 30-count superseding indictment returned by a federal grand jury in Springfield, Mo. Today’s superseding indictment replaces an indictment that was returned on June 10, 2014, and adds additional charges.
Brickey has been commissioned as a reserve deputy sheriff in Christian County, Mo., since 2012.
Including three counts of wire fraud and six counts of money laundering contained in the original indictment, today’s indictment charges Brickey with a total of 10 counts of wire fraud, 13 counts of money laundering and seven counts of failure to pay employment taxes.
According to the indictment, Brickey owned and operated several companies that marketed, promoted and managed software development. Interzone Entertainment, LLC, had offices located in Springfield, Chicago, Ill., Perth, Australia, Belo Horizonte, Brazil, and in China before it ceased operations in February 2010. Big Collision Games, LLC, had offices in Texas and in Dublin, Ireland. MasterTitle Games, Inc., and Spectacle Games maintained offices in Austin, Texas. Brickey also owned Zoonik USA, Inc., and Studio Avenue, Inc.
The federal indictment alleges that Brickey defrauded investors of more than $14.5 million in a scheme that operated from January 2008 to January 2014. Brickey allegedly told victim investors that their investment funds would be used to bring a video game to market and they would share in the profits. Brickey made false statements to potential investors regarding the amount of capital he had raised from other investors, the indictment says, and how close his companies were to bringing a product to market.
Brickey allegedly told potential investors he was working with, or close to receiving investments from, various celebrities and important persons, including Shaquille O’Neal, Kanye West, Kim Kardashian, the Sheik of Abu Dhabi and various corporate entities.
In reality, the indictment says, Brickey used a substantial amount of investor funds to pay his personal expenses unrelated to the development and marketing of any video game, and to repay prior investors who had demanded the return of their money. None of Brickey’s companies brought a video game to market, and the total revenue of Brickey’s companies during this time period was approximately $2,281.
Brickey is charged with seven counts of failure to pay employment tax (including federal income taxes, Medicare and Social Security taxes of employees) related to his role as president of Interzone from August 2006 to December 2011.
Between April 2009 and June 2011, the indictment says, Brickey caused Interzone to make hundreds of thousands of dollars of expenditures for his personal benefit while, at the same time, failing to pay over to the IRS the payroll tax due from Interzone’s employees’ paychecks. Interzone allegedly failed to account for and pay over approximately $102,813 in payroll taxes during those seven quarters.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation and the FBI.
Missouri Man Sentenced for Conspiracy to Commit Mail FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ROGER NADEAU, age 51, a resident of Linn, Missouri, was sentenced today for his role in a scheme to defraud the Louisiana Workforce Commission of unemployment benefits. NADEAU previously pled guilty to conspiracy to commit mail fraud.
U.S. District Judge Helen G. Berrigan sentenced NADEAU to one year probation and a $500 fine. Additionally, NADEAU was ordered to pay $2,470 in restitution to the Louisiana Workforce Commission (“LWC”).
According to the court records, beginning at a time unknown, but no later than on or about September 24, 2009, and continuing through on or about January 11, 2014, NADEAU along with CHARLES MIZELL, JR., TERRY CASTILOW, WILLIAM DARRYL KING, DAVID LOWE, JAMES CREEL, JERRY ATHEY, TENILLE NIELSON, and JACQUELINE MYERS conspired to defraud the LWC of money and property by means of false and fraudulent representations, pretenses and promises, well knowing the representations, pretenses and promises were false, and mailed and caused to be mailed through the United States Postal Service unemployment (“UI”) benefit claim forms for the purpose of obtaining UI benefits to which they were not entitled. Specifically, at the time CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU applied for UI benefits and made weekly representations to LWC that they were unemployed and not getting paid, MIZELL, JR., actually employed them at Chamico, Inc., a Bogalusa construction company that concentrates on public, municipal, and industrial contracts.
MIZELL, JR. was the President of Chamico and, according to the court records, asked NADEAU and his other employees to fraudulently file for unemployment so that he would not have to pay their full salaries during tough economic times for his business. NADEAU and the other employees would each get cash from Chamico during the weeks they were claiming unemployment benefits reporting that they were not working and not getting any income from work.
U.S. Attorney Polite praised the work of the Department of Labor-OIG and the Federal Bureau of Investigation with assistance from the Louisiana Workforce Commission in investigating this case. Assistant United States Attorney Emily K. Greenfield was in charge of the prosecution.
Member of the Jenifer Drug Trafficking Organization Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – U. S. District Judge Richard D. Bennett sentenced William Hegie, age 54, of Baltimore, to 10 years in prison followed by five years of supervised release for conspiring to distribute five or more kilograms of cocaine, in connection with his participation in the Jenifer drug trafficking organization (Jenifer DTO).
The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Commissioner Anthony W. Batts of the Baltimore Police Department; and Chief James W. Johnson of the Baltimore County Police Department.
According to his plea agreement, from September 2012 to October 2014, the Jenifer DTO supplied Hegie and others with kilogram-quantities of cocaine for distribution in and around the Baltimore-Washington metropolitan areas. Hegie became a member of the conspiracy to distribute more than five kilograms of cocaine.
The Jenifer DTO obtained its cocaine from suppliers in or around Houston, Texas. The Jenifer DTO would transport money hidden in secret compartments in “courier vehicles” from Baltimore to Houston. The cocaine was then transported from Houston to Baltimore in the Jenifer DTO’s courier vehicles. In July 2013, a courier vehicle for the Jenifer DTO was intercepted in Arkansas that contained approximately 23 kilograms of cocaine hidden in a secret compartment. Between August 2013 and October 2014, approximately 30 shipments of cocaine, concealed in secret compartments in the Jenifer DTO’s courier vehicles, were made to the Jenifer DTO. On October 9, 2014, approximately 27 kilograms of cocaine were seized from one of the Jenifer DTO’s courier vehicles.
Hegie agreed that he was a member and co-conspirator of the Jenifer DTO, which was responsible for trafficking no less than 750 kilograms of cocaine from Houston to Baltimore from August 2013 to October 2014.
United States Attorney Rod J. Rosenstein praised the DEA, IRS Criminal Investigation and Baltimore City and County Police Departments for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys John W. Sippel, Jr. and Scott A. Lemmon, who are prosecuting the case, and expressed his appreciation to the United States Attorney’s Offices for the Southern District of Texas and the Southern District of New York for their assistance in this Organized Crime Drug Enforcement Task Force case.
Manhattan U.S. Attorney Settles Civil Fraud Claims Against Vascular Surgery Clinic and Surgeon for Fraudulently Billing Medicare for Nonreimbursable Vascular Surgery ProceduresRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the United States has settled civil fraud claims under the False Claims Act against MATTOO & BHAT MEDICAL ASSOCIATES, P.C. (“MBPC”) and DR. FENG QIN (“DR. QIN”) related to MBPC’s submission of fraudulent claims for reimbursement by Medicare for vascular surgical procedures that are not covered under Medicare. In connection with the settlement, which was approved by U.S. District Judge Louis L. Stanton on May 1, 2015, the defendants agreed to pay a total of $1,150,000 to resolve their liabilities.
Manhattan U.S. Attorney Preet Bharara said: “As they admitted, Mattoo & Bhat Medical Associates, P.C., and Dr. Feng Qin performed and billed Medicare for surgery procedures in violation of Medicare’s billing rules. We will continue to work to protect the public’s money from providers who try to skirt Medicare billing rules for their own profit.”
HHS-OIG Special Agent in Charge Scott Lampert said: “Performing invasive procedures that do not qualify for Medicare reimbursement and then billing Medicare for them undermines the financial integrity of the Medicare program. This settlement is another example of OIG’s commitment to protecting our beneficiaries and taxpayers from such abusive practices.”
According to the complaint filed in Manhattan federal court:
Patients with end-stage renal disease (“ESRD”), who are covered by Medicare, regularly require and receive dialysis treatments. Vascular surgeons may provide vascular access services to these patients, such as creation and maturation of fistulas, a port in the patient’s arm to obtain access to the patient’s circulatory system, through which dialysis is done. In addition, when clinically indicated, such surgeons may provide fistulagrams, a radiological procedure in which dye is injected into the patient’s vein or artery to visualize the port and surrounding blood vessels, and angioplasties, in which wires and balloons are inserted into veins or arteries that have narrowed in order to restore the patient’s blood flow. Routine monitoring of a dialysis patient’s access site, however, is typically done by the patient’s nephrologist and the dialysis nurses and technicians, who are reimbursed by Medicare for the ongoing monitoring and surveillance.
According to Medicare billing rules in New York State, monitoring of a dialysis patient’s access site does not require vascular surgery procedures, such as fistulagrams and angioplasties, and these procedures are not reimbursable unless the patient has specific clinical problems, such as significant difficulty receiving dialysis properly. Routinely performing fistulagrams and angioplasties where there is no supporting clinical indication is not reimbursable by Medicare. The rules also state that angioplasties are reimbursed by Medicare only if, in addition to the clinical findings required to support a fistulagram, there is evidence that the patient’s blood vessel has a restriction greater than 50% of the vessel’s diameter.
MBPC operated two office-based surgical offices in Manhattan and Queens, which operated under the trade name “AV Care,” from December 2010 to April 2012, and DR. QIN worked primarily at MBPC’s Manhattan location. AV Care’s patients were ESRD patients undergoing dialysis treatment. As a regular practice, AV Care routinely scheduled patients for fistulagrams and angioplasties as many as three months in advance, and MBPC surgeons, including DR. QIN, performed these fistualgrams as a matter of routine even if the patient presented without a clinical reason. Furthermore, from time to time, DR. QIN performed angioplasties on AV Care patients where the patient information and records did not support the presence of a restriction greater than 50% of the diameter of the patient’s blood vessel. MBPC wrongly billed Medicare for these procedures, which were excluded from Medicare coverage by the applicable rules.
As part of today’s settlement, MBPC and DR. QIN admitted that they regularly performed, and billed Medicare for, vascular surgery procedures done only for surveillance purposes, in violation of the Medicare billing rules. MBPC agreed to pay $1,000,000 and Dr. QIN agreed to pay $150,000 to resolve their respective liabilities for this conduct. In addition, MBPC and DR. QIN entered into integrity agreements with HHS-OIG, through which they agreed to implement certain compliance measures and submit to monitoring by HHS-OIG.
The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Rebecca C. Martin and Jean-David Barnea are in charge of the case.
AVCare relator release
Feng Qin stip and order
Mattoo+Bhat stip and order IIManhattan U.S. Attorney Files Suit Against Plastic Surgery Practice and Surgeon for Discriminating Against Patients with DisabilitiesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today the filing of a lawsuit against the SPRINGFIELD MEDICAL AESTHETIC P.C. d/b/a ADVANCED COSMETIC SURGERY OF NEW YORK (“ADVANCED COSMETIC”), and EMMANUEL O. ASARE, M.D. (“ASARE”), a plastic surgery practice and surgeon in that practice, alleging discrimination on the basis of disability in violation of Title III of the Americans with Disabilities Act of 1990 (“Title III of the ADA”). ADVANCED COSMETIC, which has offices in Manhattan and Long lsland, and ASARE are alleged to have unlawfully discriminated against a prospective patient (the “Patient”) on the basis of his disability by refusing to provide services to the Patient, without even conducting a medical assessment of his condition, because the Patient is HIV positive.
Manhattan U.S. Attorney Preet Bharara said: “Medical providers are not free under the law simply to refuse their services to a person with a serious medical condition like HIV. Individuals with disabilities are entitled to the same medical services as everyone else, and there can be no room in the medical profession for the kind of discrimination alleged in this lawsuit.”
Title III of the ADA prohibits discrimination by doctors, lawyers, hospitals, restaurants, retail stores, hotels, private transportation providers, and other private businesses and nonprofit organizations that provide services to the public. All of these entities are prohibited from excluding individuals with disabilities from their services and programs because they have a serious medical condition, such as HIV.
According to the Complaint filed in Manhattan federal court, the Patient is a cancer survivor living with HIV. In July 2014, the Patient scheduled an appointment at ADVANCED COSMETIC to have an initial consult regarding his gynecomastia, an inflation of breast tissue that is a common side effect of both cancer treatments and anti-retroviral HIV medications. On or about July 14, 2014, the Patient met with ASARE at ADVANCED COSMETIC’s Manhattan offices. Upon learning that the Patient was living with HIV, ASARE immediately told the Patient that ADVANCED COSMETIC did not provide services to those with HIV, and the Patient was asked to leave. Subsequently, ASARE and ADVANCED COSMETIC stated that it is their policy not to provide services to people living with any of a host of ailments, including HIV, cancer, and diabetes.
The Complaint filed today seeks to require ADVANCED COSMETIC and ASARE to take the necessary steps to prevent and remedy any future discrimination on the basis of disability, particularly against those with serious medical conditions such as HIV, cancer, and diabetes, and pay compensation to the victims of discrimination and a civil penalty.
This case is being handled by the Office’s Civil Rights Unit. Assistant United States Attorney Arastu K. Chaudhury is in charge of the case.
To file a complaint alleging that any place of public accommodation within the Southern District of New York is not accessible to persons with disabilities, use the Civil Rights Complaint Form available on the United States Attorney’s Office’s website, www.usdoj.gov/usao/nys. Complaints should be sent to:
U.S. Attorney’s Office, Southern District of New York
86 Chambers Street, 3rd Floor
New York, New York, 10007
Attention: Chief, Civil Rights Unit
US v. Asare Complaint with Exhibits
Man Who Was Caught with Almost 100 Pounds of Meth and Marijuana in Vehicle Sentenced to over 30 Years in PrisonRead the Press Release
LAS VEGAS, Nev. – A Topeka, Kansas man who was pulled over by Nevada Highway Patrol Officers in 2013, and found to be in possession of 24 pounds of methamphetamine and 74 pounds of marijuana, was sentenced today to 365 months in prison and 10 years of supervised release, announced U.S. Attorney Daniel G. Bogden, for the District of Nevada.
Paul Edward Davis, 49, who was convicted by a jury in Las Vegas on Dec. 2, 2014, of one count of possession of methamphetamine with the intent to distribute and one count of possession of marijuana with the intent to distribute, was sentenced by U.S. District Judge Andrew P. Gordon.
“This defendant was transporting large quantities of methamphetamine and marijuana,” said U.S. Attorney Bogden. “We work with our Nevada High Intensity Drug Trafficking Area (HIDTA) program and with state and local law enforcement on several task forces to apprehend and prosecute federally drug traffickers who are traveling through our Nevada communities with significant quantities of drugs for distribution.”
According to the court records, on July 27, 2013, at approximately 9:15 p.m., a Nevada Highway Patrol Officer pulled Davis’ SUV over for speeding on I-15 northbound near Las Vegas at Mile Marker 64. The trooper immediately observed the odor of marijuana coming from the inside of the vehicle, and a law enforcement canine dog alerted to the presence of a controlled substance. During a search of the vehicle, officers located three cellular phones, numerous air fresheners, and several large canvas bags in the rear area of the vehicle containing approximately 24 pounds of methamphetamine and 74 pounds of marijuana. Testimony at trial established that the value of the drugs was over $1 million.
Davis was on federal supervised release for a drug trafficking conviction when he was pulled over for this offense. In 2000, he had been convicted by a federal jury in Topeka, Kan., of distributing crack cocaine within 1,000 feet of a university and sentenced to 17½ years in prison and 10 years of supervised release. After serving 11 years, he was re-sentenced and released from prison due to the amendments that were made to the federal sentencing guidelines which reduced the penalties for persons convicted of crimes involving crack cocaine.
The case was prosecuted by Assistant U.S. Attorney Amber M. Craig and investigated by the DEA, Nevada Highway Patrol, and Las Vegas Metropolitan Police Department.
Luzerne County Man Charged with Receiving and Distributing Child PornographyRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Pittston man was indicted on April 28, 2015, by a federal grand jury for receiving and distributing child pornography.
According to United States Attorney Peter Smith, the grand jury alleges that Steven Wolfe, age 25, used a computer and other electronic devices to download and distribute images of child pornography during November 2013 through February 4, 2015. Wolfe is currently in Luzerne County Prison and will be appearing before U.S. Magistrate Judge Karoline Mehalchick on Friday, May 8, 2015.
The charge stems from an investigation by Homeland Security Investigations, the Luzerne County District Attorney’s Office, and Pittston Police.
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."
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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 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.
# # #
Local Man Sentenced for Drug Trafficking OffensesRead the Press Release
PANAMA CITY, FLORIDA – Jonathon Luke Holder, 23, of Panama City Beach, was sentenced to 7 years and 8 months in federal prison by United States District Judge Richard Smoak for possessing methamphetamine with intent to distribute and for possessing a firearm in furtherance of a drug-trafficking crime. The sentence was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Holder admitted that, on January 7, 2015, he travelled from Bay County, Florida, to the Atlanta, Georgia, area to purchase methamphetamine that he intended to distribute. When Holder left Bay County to travel to the Atlanta area, he took with him a loaded Ruger 9mm pistol for his protection and for the protection of his drug-trafficking activities.
Holder returned to the Bay County area early the next morning. Holder was arrested as he exited the vehicle he was driving with a small Sentry safe. Inside the safe, Holder had approximately 1010 grams of a mixture and substance containing methamphetamine and the pistol.
This was Holder’s third trip to the Atlanta area to purchase methamphetamine for distribution in the Bay County area. In the first trip, Holder purchased and distributed one pound of methamphetamine, and in the second trip, Holder purchased and distributed two pounds of methamphetamine.
The case was investigated by the Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorney Gayle E. Littleton.
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 available 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.
Leetonia man charged with sexually exploiting minorsRead the Press Release
Lucas J. Ippolito, 41, of Leetonia, Ohio, was charged with transportation of a minor to engage in illegal sex, sexual exploitation of a child and receipt, distribution and possession of sexually exploitive visual depictions of minors, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
The indictment charges that on or about January 23, 2015, Ippolito knowingly transported an individual who had not attained the age of 18 years, that is a 15-year-old girl, in interstate commerce from Pennsylvania to Ohio, with the intent that such 15-year-old girl engage in sexual activity for which Ippolito could be charged with a criminal offense.
The indictment also charges that on or about on or about February 14, 2015, March 14, 2015 and April 3, 2015, Ippolito knowingly transported an individual who had not attained the age of 18 years, that is a 13-year-old girl, in interstate commerce from Pennsylvania to Ohio, with the intent that such 13-year-old girl engage in sexual activity for which he could be charged with a criminal offense.
The indictment also charges that between December 3, 2014 and March 9, 2015, Ippolito persuaded, induced, enticed and coerced the two minors to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.
The indictment also charges that from on or about January 6, 2015, through on or about April 7, 2015, Ippolito knowingly received and distributed, using any means and facility of interstate and foreign commerce, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct.
Lastly, the indictment charges that on or about March 30, 2015, Ippolito knowingly possessed three computers and a cellular phone, each containing child pornography, and at least one image involved in the offense involved a prepubescent minor or a minor who had not attained 12 years of age.
If convicted, the sentence in this case will be determined by the court after consideration of the federal sentencing guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Ohio Bureau of Criminal Investigation and the Youngstown office of the Federal Bureau of Investigation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
LAPD Officer Indicted for Attempting to Smuggle Mexican Citizen in Trunk of His CarRead the Press Release
SAN DIEGO – Los Angeles police Officer Carlos Curiel Quezada, Jr., and his girlfriend, Angelica Godinez, were indicted by a federal grand jury today on charges that they attempted to smuggle a Mexican citizen into the United States in the trunk of Quezada’s car at the Otay Mesa border crossing in March.
According to court documents, Quezada drove his 2014 Nissan Juke, with Godinez as the front seat passenger, into the United States through the Otay Mesa Port of Entry on March 14, 2015, at about 6:30 p.m. They presented their U.S. passports and told a Customs and Border Protection Officer they had nothing to declare. The officer decided to refer them aside for a more intensive inspection.
During the inspection, officers examined the car with the Z-Portal, a non-intrusive imaging device similar to an X-ray, and detected something unusual in the rear cargo area of the vehicle. Antanasio Perez Avalos, a 26-year-old Mexican national, was found in a compartment in the spare-tire area. All three individuals were then taken into custody and interviewed.
Two days later, Quezada and Godinez were charged in a one-count complaint with Bringing in Illegal Aliens without Presentation. On March 19, 2015, the government’s motion to dismiss the complaint, without prejudice, was granted.
The pair was indicted by a federal grand jury today on the same charge - Bringing in Illegal Aliens without Presentation. Quezada is scheduled to be arraigned on the indictment May 7 at 2:00 p.m. before U.S. Magistrate Judge William Gallo and Godinez on May 12 at 9:00 am before U.S. Magistrate Judge Barbara L. Major.
DEFENDANTS Case Number: Carlos Curiel Quezada Jr. Age: 34 Los Angeles, California Angelica Godinez Age: 31 CHARGESBringing in Illegal Aliens without Presentation – Title 8 United States Code Sec. 1324(a)(2)(B)(iii)
INVESTIGATING AGENCIES
Maximum penalty: 10 years’ imprisonment and $250,000 fineU.S. Customs and Border Protection
*The charges and allegations contained in the Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.Justice Department Statement on Baltimore Mayor's Request for a Pattern or Practice Investigation into the Baltimore Police DepartmentRead the Press Release
Justice Department spokesperson Dena Iverson released the following statement Wednesday following the request from Baltimore Mayor Stephanie Rawlings-Blake for a pattern or practice investigation into the Baltimore Police Department.
“The Attorney General has received Mayor Rawlings-Blake’s request for a Civil Rights Division 'pattern or practice' investigation into the Baltimore Police Department. The Attorney General is actively considering that option in light of what she heard from law enforcement, city officials, and community, faith and youth leaders in Baltimore yesterday.”
Jury Convicts St. Louis Man, Berkeley Woman of Drug TraffickingRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a St. Louis, Mo., man and a Berkeley, Mo., woman have been convicted by a federal trial jury of their roles in a drug-trafficking conspiracy after the man suffered a heroin overdose in a Columbia, Mo., hotel room.
Gustavo Ruvalcaba, 44, of St. Louis, and Jennifer Ann Foust, 29, of Berkeley, Mo., were found guilty of the charges contained in a Dec. 16, 2014, federal indictment. Following the presentation of evidence, the jury in the U.S. District Court in Jefferson City, Mo., deliberated for about two and a half hours on Tuesday, May 5, 2015, before returning the verdicts to U.S. District Judge Stephen R. Bough, ending a trial that began Monday, May 4, 2015.
Ruvalcaba and Foust each were found guilty of participating in a conspiracy to distribute heroin, crack cocaine, powder cocaine and methamphetamine from July 2013 to July 2014. Ruvalcaba was also convicted of four counts of possessing heroin, crack cocaine, powder cocaine and methamphetamine, each with the intent to distribute, on July 14, 2014. Foust was also charged in the possession counts but the jury was unable to reach a verdict; the court declared a mistrial on those counts in regard to Foust.
Columbia police officers were dispatched to a room at the Super 8 Motel in response to a heroin overdose on July 14, 2014. Foust had called 911 for Ruvalcaba, who was lying on the floor and being treated by EMS and fire personnel when officers arrived. Officers executed a search warrant for the hotel room and seized 16.4 grams of black tar heroin, 6.6 grams of crack cocaine, 35.3 grams of powder cocaine, 11.6 grams of pure methamphetamine, drug paraphernalia, seven cell phones and $78,525 divided up into 8 different manila envelopes and numerous piles.
St. Charles, Mo., police officers also had found Ruvalcaba and Foust together in an Embassy Suites hotel room about a year earlier, on July 10, 2013. Foust initially told officers that nobody else was in the hotel room, but they heard noises in the bathroom. Officers noticed drugs and drug paraphernalia scattered in plain view throughout the room and a large bundle of cash. The bathroom door was locked and they continued to hear sounds of plastic being rubbed together, water running and the toilet flushing. Officers believed evidence was being destroyed, so they jimmied open the bathroom door and found Ruvalcaba, who had two fists full of wet plastic baggies. Other wet baggies were found on the sink. Ruvalcaba was handcuffed and set in a chair.
When one of the officers turned around to speak to Foust, Ruvalcaba quickly ingested some of the 15.4 grams of methamphetamine that was being weighed on a digital scale found in the bedroom. Ruvalcaba, who had chunks of methamphetamine in his mouth and on his face and t-shirt, began to eat the methamphetamine at a fast pace and refused to spit it out. When asked why he had ingested the methamphetamine, Ruvalcaba stated, “You can’t charge me without any evidence.” Officers seized 9.6 grams of crack cocaine, 5.7 grams of methamphetamine, drug paraphernalia, five cell phones and $11,086 from the hotel room.
St. Charles police officers arrested Ruvalcaba and Foust again on Sept. 12, 2013, after their vehicle was pulled over on Interstate 70 for operating without proper registration. A K-9 walked around the vehicle and alerted to several areas of the vehicle, including the trunk. Officers found several syringes in a suitcase in the trunk.
Ruvalcaba and Foust were transported to the police station. While they were waiting in the holdover area, Ruvalcaba, whose right hand was handcuffed to the holding bench, reached with his free left hand to remove his shoe and retrieved a package of methamphetamine. Ruvalcaba threw the package of methamphetamine toward Foust, who pulled it toward her with her foot, placed it in her mouth and swallowed it. Officers ordered Foust to open her mouth and noticed a white residue on her tongue; officers also found methamphetamine on the floor where Foust was sitting.
Under federal statutes, Ruvalcaba is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of 140 years in federal prison without parole, plus a fine up to $13 million. Foust is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 40 years in federal prison without parole, plus a fine up to $5 million. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander and Assistant U.S. Attorney Jim Lynn. It was investigated by the Drug Enforcement Administration, the Columbia, Mo., Police Department, the U.S. Postal Inspection Service, the St. Charles City Police Department, the St. Charles County, Mo., Sherriff’s Department and the St. Charles County Regional Drug Task Force.
Johnstown Man Pleads Guilty in Heroin Trafficking RingRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., pleaded guilty in federal court to a charge of conspiracy to distribute heroin, United States Attorney David J. Hickton announced today.
Terrance Sitton, 42, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that from Jan. 22, 2015, to April 17, 2015, Sitton conspired to distribute and possess with the intent to distribute 100 grams or more of heroin.
Judge Gibson scheduled sentencing for Oct. 8, 2015, at 10:00 a.m. The law provides for a total sentence of 40 years in prison, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, the Pennsylvania Attorney General's Office, the Cambria County Drug Task Force, the Altoona Police Department, and the Cambria County District Attorney's Office, conducted the investigation that led to the prosecution of Sitton.