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11 March 2015
Federal Government Seizing Drug Properties in Rutland, VtRead the Press Release
The United States Attorney’s Office announced today that it had filed a forfeiture lawsuit against the real property at 24 and 24.5 Cottage Street in Rutland Vermont. The suit was brought pursuant to 21 U.S.C. § 881(a)(7), which provides that property which is used to commit or to facilitate the commission of felony drug offenses can be forfeited to the Government.
The property contains two buildings which are used as a single room occupancy hotel. Tenants each have use of a private room, but all bathrooms and kitchen spaces are shared among all tenants. Between them the two buildings have seventeen rooms plus a private apartment, which was occupied by Michael Petruccelli, the son of the owners, and his wife, Stacia Petruccelli.
The complaint and the accompanying affidavit of FBI agent Christopher Destito show that Michael Petruccelli was a crack cocaine addict who allowed drug dealers to stay at the property to sell drugs so long as they paid him in crack cocaine. The documents show Petruccelli also sold cocaine himself and helped some of the dealers sell their drugs, which included both heroin and crack cocaine. The documents also show that Michael Petruccelli went so far as to phone a dealer staying at the property to warn him that the police had entered the building and were heading for his room. The documents also show that law enforcement made seven buys of illegal narcotics at the property, including two buys of crack cocaine from Michael Petruccelli, and that he used a safe in the basement to store narcotics and assisted larger scale dealers to bag and sell their drugs.
The court documents show that the property is owned by a New York corporation owned by Francesca and Rudolph Petruccelli, parents of Michael Petruccelli. The owners have put the property in the control of Michael Petruccelli. The documents state that Mr. and Mrs. Petruccelli were informed by law enforcement of the drug dealing at the property, that they asked for assistance in stopping the illegal trade but that when they were informed that their son was dealing drugs there, they refused to take control of the property back from him. Michael Petruccelli was charged by federal indictment on February 4, 2015, with crack cocaine distribution. He is currently detained pending further proceedings in his criminal case.
The forfeiture proceedings against the Cottage Street properties and the criminal case against Michael Petruccelli are part of an on-going effort by the U.S. Attorney’s Office in conjunction with federal, state and local law enforcement agencies to address drug activity in Rutland. During the past year, the U.S. Attorney’s Office has charged approximately thirty individuals federally who have facilitated the drug trade in Rutland, Vermont.
The charged individuals have included out-of-state dealers responsible for bringing significant quantities of heroin and crack cocaine to Rutland; local residents who provided housing, transportation, and local distribution networks to these out-of-state dealers; and couriers who moved the drugs between other states (most frequently New York) and Vermont.
The United States Attorney’s Office stated that Troy Gibbs, 52, of Rutland, pled guilty on March 10, 2015 under the federal “crack-house statute,” 21 U.S.C. § 856(a)(2), which makes it a crime, subject to 20 years imprisonment, to knowingly allow drug dealers to stay at a residence to store, use or distribute their drugs. According to documents released in the case, Gibbs allowed out-of-state dealers to stay at his residence on Summer Street in Rutland in exchange for crack cocaine. Gibbs will be sentenced by Chief United States District Court Judge Christina Reiss on June 23, 2015.
The United States Attorney’s Office’s efforts to combat drug trafficking in Rutland have been supported by the work of the Vermont State Police Drug Task Force, the Drug Enforcement Agency, and the Federal Bureau of Investigation, and the Rutland Police Department. The United States Marshals Service will play a key role in the forfeiture of the Cottage Street properties. The criminal cases are being handled by AUSA Joe Perella. AUSA James Gelber is responsible for the property forfeitures.
Troy Gibbs is represented by Brooks McArthur, Esq. Michael Petruccelli is represented by Thomas Sherrer, Esq.
Fayette County Man Admits Threating the President, His FamilyRead the Press Release
PITTSBURGH -- A resident of the Uniontown, Pa., area, pleaded guilty in federal court to charges of threats against the President and the members of the immediate family of the President, United States Attorney David J. Hickton announced today.
Joseph H. Savage, 34, currently incarcerated for state convictions, pleaded guilty to two counts before Senior United States District Judge Maurice B. Cohill, Jr.
In connection with the guilty plea, the court was advised that on or about Oct. 26, 2012, while incarcerated and awaiting disposition on state charges, Savage wrote a graphic letter to the White House threatening to kill the President and the President’s family.
Judge Cohill scheduled sentencing for June 17, 2015 at 4 p.m. The law provides for a total sentence of 10 years in prison, a fine of $500,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The United States Secret Service conducted the investigation that led to the prosecution of Savage.
Ex-Marine Indicted in Sexual Assault of Another Marine on Camp PendletonRead the Press Release
SAN DIEGO – A former Marine is charged in an indictment unsealed today with sexually assaulting an active-duty Marine in November 2014 on Camp Pendleton.
Pedro Javier Orellana, 23, was indicted by a federal grand jury and surrendered himself for arrest in Laurel, Maryland on Wednesday. He made his first federal court appearance today in Greenbelt, Maryland. A detention hearing will be held on Thursday to determine if Orellana should be detained pending transfer back to San Diego.
According to the indictment, Orellana sexually assaulted his victim on the Marine base while she was “incapable of appraising the nature of the conduct or was physically incapable of declining participation in the sex act.”
DEFENDANT Case Number: 15CR0597 Pedro Javier Orellana Age: 23 Laurel, Maryland CHARGES18 U.S.C. § 2242(2) – Sexual Abuse- Incapacitated Victim (Maximum Life Sentence)
INVESTIGATING AGENCIESNaval Criminal Investigative Service
Marine Corps Criminal Investigation Division*The charges and allegations contained in an indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Ex-Casino Owner, Nevada Businessman and Former NFL Player Sentenced to Prison in Massive Tax Fraud SchemeRead the Press Release
Court Orders More than $35 Million in Restitution
A former casino owner from Henderson, Nevada, a former businessman from Las Vegas and a former NFL punter from Upland, California, were sentenced yesterday in U.S. District Court in Las Vegas to serve prison time and ordered to pay more than $35 million in restitution for conspiracy and fraud related to their promotion of a fraudulent tax product through the now-defunct National Audit Defense Network (NADN), announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Alan Rodrigues, NADN’s former general manager and executive vice president, was sentenced to serve 72 months in prison to be followed by three years of supervised release and to pay a $2,000 special assessment by U.S. District Court Judge Miranda Du of the District of Nevada. Rodrigues was ordered to pay restitution of more than $35 million to customers of NADN who purchased the fraudulent tax product. Weston Coolidge, a businessman who previously served as NADN’s president, was sentenced by Judge Du to serve 70 months in prison followed by three years of supervised release, and to pay a $2,000 special assessment for his part in the fraud. Coolidge was also ordered to pay restitution of more than $35 million to victims of the fraud. Joseph Prokop, who previously served as the National Marketing Director for Oryan Management and Financial Services, a company affiliated with NADN, was sentenced to serve 18 months in prison to be followed by 30 months home confinement and three years of supervised release. Prokop was also ordered to pay a $1,800 special assessment and restitution to victims of more than $35 million. At sentencing, Judge Du found that the defendants were responsible for fraud losses of more than $36 million and an intended tax loss of more than $60 million.
On May 27, 2014, after a six-week jury trial, the three defendants were convicted of one count of conspiracy to defraud the United States, 13 counts of aiding and assisting in the preparation of false income tax returns and four counts of mail fraud. Rodrigues and Coolidge were each convicted of an additional two counts of aiding and assisting in the preparation of false income tax returns.
“Business professionals who design, market and sell fraudulent tax products by criminally exploiting select provisions of the tax code will be prosecuted to the full extent of the law,” said Acting Assistant Attorney General Ciraolo. “The prison sentences handed down yesterday against the defendants demonstrate that the Department of Justice is committed to holding individuals responsible for their criminal conduct.”
The evidence at trial established that through NADN, the defendants promoted and sold a product called Tax Break 2000 to customers throughout the United States. NADN began to promote and sell Tax Break 2000 in early 2001. Tax Break 2000 purported to be an online shopping website. The defendants falsely and fraudulently told customers that buying the product would allow them to claim legitimate income tax credits and deductions under the Americans with Disabilities Act (ADA) by modifying the website each customer was provided to make it accessible to the disabled. NADN charged $10,475 for the product to maximize the fraudulent income tax credits and deductions that individuals would claim on their tax returns. Although the price of the product that was claimed on the tax returns was $10,475, the customers only paid between $2,000 and $2,695 out-of-pocket. The remainder of the cost was covered by a promissory note that customers were not expected to repay.
The defendants knew that the websites provided to customers made little, if any, money from sales commissions and that they did not entitle the purchaser to either a tax credit or any deductions. The defendants nonetheless taught and directed the tax return preparers working for NADN to prepare thousands of tax returns for customers that claimed the fraudulent tax credit and deductions. When special agents of the Internal Revenue Service (IRS) began to investigate Tax Break 2000 and NADN, the evidence showed that the defendants sought to cover up the fraud by creating false IRS Forms 1099 that reported fictitious income to make it appear that the websites were in fact earning money.
From 2001 through approximately May 2004, NADN sold the Tax Break 2000 product more than 18,000 times to thousands of customers located throughout the United States. As a result of the defendants’ fraud, thousands of NADN customers were audited by the IRS. On April 13, 2004, the Tax Division filed a civil complaint seeking to enjoin, among others, NADN, Rodrigues, Coolidge and Prokop from selling fraudulent tax schemes, including Tax Break 2000. NADN ceased operations in May 2004.
“We view schemes like Tax Break 2000 as organized tax evasion” said Special Agent in Charge John Collins of IRS Criminal-Investigation (IRS-CI). “It is a top priority for the IRS to stop promoters of these harmful schemes. The public should remember the old saying ‘if it sounds too good to be true, it probably is.’ Instead of being a tax break this fraudulent product cost the victims much more in the end with interest and penalties.”
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-CI who investigated the case. She also commended the substantial efforts of former Trial Attorneys Timothy J. Stockwell and Katherine L. Wong, and Paralegal Larry Garland of the Tax Division, who prosecuted the case, and Trial Attorney Mark L. Williams of the Tax Division, who assisted with sentencing. Acting Assistant Attorney General Ciraolo thanked the U.S. Attorney’s Office of the District of Nevada in Las Vegas for their substantial assistance.
Eugene Gang Member Sentenced to 10 Years for Possessing a Firearm as a FelonRead the Press Release
EUGENE, Ore. – On March 11, 2015, Gary Lee Walls, 39 years old, of Eugene, Oregon, was sentenced by U.S. District Judge Michael McShane to 10 years in federal prison for unlawful possession of a firearm. Upon his release from prison, Walls will be on supervised release for three years.
On August 29, 2013, Eugene Police Department officers arrested Walls for an outstanding parole violation and found him carrying a loaded handgun, knife, and methamphetamine. Walls is a member of the gang called the Insane Peckerwood Syndicate and has a lengthy criminal history, including prior felony convictions for robbery and kidnapping.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Eugene Police Department, and was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
Ernest Dailey of Wilmington Sentenced for Possession with Intent to Distribute More Than 28 Grams of Cocaine Base and Firearms Violation 924(c)Read the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, Senior United States District Judge James C. Fox sentenced, ERNEST DAILEY, 48, of Wilmington, to 262 months of imprisonment followed by 5 years of supervised release.
DAILEY was named in an Indictment filed on August 27, 2014. On December 1, 2014, the Defendant pled guilty to Possession with the Intent to Distribute more than 28 grams of Cocaine Base and Possession of a Firearm During and In Relation to a Drug Trafficking Crime. According to the investigation and information presented in open court during the sentencing, on March 26, 2014, officers with the Wilmington Police Department executed a search warrant at DAILEY’S residence. During the search officers found over 44 grams of cocaine base, which is crack, approximately 6 grams of cocaine hydrochloride, $8,800 in US Currency, various drug paraphernalia and a 9 mm semi-automatic firearm. DAILEY admitted that he had been selling drugs and admitted taking the firearm in a form of payment for drugs. Due to DAILEY’S extensive criminal history, having approximately 12 prior drug convictions, he was designated as a Career Offender.
Investigation of this case was conducted by the Wilmington Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Special Assistant United States Attorney Charity Wilson prosecuted the case. Ms. Wilson is a prosecutor with the District 5 District Attorney’s Office encompassing New Hanover and Pender Counties. District Attorney Ben David has assigned her to the United States Attorney’s Office to prosecute violent crime, firearm related cases, and narcotic crimes.
Eleven Individuals Charged with Stealing and Fraudulently Using Personal Information of Blue Cross Blue Shield SubscribersRead the Press Release
Eleven individuals from metro-Detroit have been charged with running identity theft and credit card fraud schemes, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Marlon Miller, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Jeffrey Frost, Special Agent in Charge of the U.S. Secret Service, Detroit Field Office and Chief Michael Patton, West Bloomfield Police Department, Southeast Michigan Financial Crimes Task Force.
Indicted for multiple counts of identity theft-related crimes were:
- Angela Denise Patton, 47, Belleville, MI
- Sam Oscar Patton, 47, Dearborn, MI
- Dontez Patton, 23, Woodhaven, MI
- Johnathon Weston, 24, Detroit, MI
- Charlie Smith, 47, Detroit, MI
- Thomas Turner, Sr., 47, Detroit, MI
- Aramona Coleman, 56, Southfield, MI
- Tynekwa Hill, 26, Pontiac, MI
- Jeffrey Morton, 41, Oak Park, MI
- Verdell Kennedy, 45, Detroit, MI
- Raymond Thomas, 40, Oak Park, MI
According to the indictment, Angela Patton, who worked for Blue Cross Blue Shield of Michigan (BCBSM), printed screen shots containing subscribers’ profiles, including Personal Identifying Information (PII), and gave them to other individuals who used that information to apply for credit in other people’s names and purchase merchandise in stores across the country. Co-conspirators were arrested in Texas, Ohio and Michigan in possession of BCBSM screen shots coming from Angela Patton’s work computer as well as counterfeit identification cards and credit cards in the names of individual subscribers whose personal information was included in those screen shots.
Agents recovered additional screen shots that included personal information belonging to thousands of BCBSM and Blue Care Network subscribers while executing search warrants at co-conspirators’ homes in metropolitan Detroit. The information included individuals’ names, dates of birth and Social Security numbers. Counterfeit and re-encoded credit cards and gifts cards were also recovered. The indictment alleges that three of the co-conspirators who used counterfeit credit cards at different major stores and warehouses fraudulently obtained more than $742,000 worth of merchandise from Sam’s Club alone.
United States Attorney McQuade, stated, "Criminals should know that while technology has made it easier than ever for them to commit identify fraud, technology is also making it easier for law enforcement to catch them. We are making enforcement of identity theft a high priority because this crime has become so pervasive and can be so damaging to victims.”
“An individual’s personal information has significant value on the black market, which is why the threat of data breaches and identity theft remain at an all-time high,” said Marlon Miller, HSI special agent in charge. “Over the last decade, we’ve seen a steady increase in crimes like this which is why HSI continues to prioritize and increase the quality and complexity of our investigative efforts to combat them.”
“As reflected by the indictments, United States Secret Service in Detroit—along with our federal, state and local partners—remains dedicated to the pursuit and apprehension of those responsible for these serious identity theft cases,” stated Jeff Frost, Special Agent in Charge of the Secret Service Detroit Field Office. “The continued, multi-jurisdictional collaboration between law enforcement resulted in the indictment of these individuals for their involvement in these crimes, and we will maintain our resolve as we continue to thoroughly investigate this case.”
"The entire West Bloomfield community is grateful for the great law enforcement partnership that has led to the continuing federal indictments related to these very serious crimes. As the investigation continues, this partnership remains devoted to bringing everyone that played a role in these incidents to justice," said Chief Michael Patton.
“Our company is determined to thoroughly investigate alleged fraud, and work hands-on with law enforcement to bring perpetrators of fraud and identity theft to justice,” said Gregory W. Anderson, vice president for Corporate and Financial investigations at Blue Cross Blue Shield of Michigan. “We salute the task force for these arrests, and for their diligent efforts to help Blue Cross protect our members’ personal information and privacy.”
If policy holders notice any inappropriate activity on their Explanation of Benefits statements, BCBSM and BCN ask members to contact the companies’ Anti-Fraud Hotline at 800-482-3787, between 8:30 a.m. and 4:30 p.m. Monday through Friday.
The case was investigated by the Southeast Michigan Financial and Cyber Crimes Task Force, which is based at the Novi Police Department and includes U.S. Secret Service, Homeland Security Investigations, the U.S. Postal Inspection Service, and IRS Criminal Investigations agents, as well as state and local law enforcement officers from the West Bloomfield, Novi, Royal Oak, Southfield, and Troy Police Departments.
The case is being prosecuted by Assistant U.S. Attorney Abed Hammoud with the United States Attorney’s Office for the Eastern District of Michigan in Detroit.
An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.El Dorado Hills Man Indicted for Embezzling More Than $400,000 from Former EmployerRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Jeffrey Lamson, 51, of El Dorado Hills, charging him with wire fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, from at least 2009 through 2011, Lamson embezzled over $400,000 from a company located in Placer and Sacramento Counties while he served that company as controller. Lamson used company funds to make unauthorized payments to himself and others and made payments to a fictitious vendor, controlled by Lamson, for services that were never performed.
This case is the product of an investigation by the Internal Revenue Service‑Criminal Investigation. Assistant United States Attorneys Shelley D. Weger and Jean M. Hobler are prosecuting the case.
If convicted, Lamson faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gain or loss caused by the fraud. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Eighteen Miami-Dade County Residents Charged for their Alleged Participation in Private Insurance Health Care Fraud SchemeRead the Press Release
Fourteen individuals were arrested today for their alleged participation in a scheme to defraud privately insured health care plans located in Miami-Dade County, including Cigna, Blue Cross Blue Shield (BCBS), United Health Care (UHC), Miami-Dade County Public Schools, City of Miami, Pepsi Co., BJ’s Wholesale Club, Inc., Lincoln Property Company, Macy’s Inc., Nextera Energy Inc., Radioshack Corporation, Sodexo, Inc., Southeast Frozen Foods Company LP, and other self-insured employers which offered Administrative Services Only (ASO) insurance plans to their employees.
ASO insurance plans reimbursed Cigna, BCBS, and UHS for the money paid out by the insurance companies for health benefits for their respective employees. Therefore, the employers acted in a self-insured role; making them financially responsible for any claim payments to their employees.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, Alysa D. Erichs, Special Agent in Charge, United States Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), J.D. Patterson, Director, Miami-Dade Police Department (MDPD), Ian A. Moffett, Chief, Miami-Dade Schools Police Department, Rodolfo Llanes, Chief, Miami Police Department (MPD), and Sergio Velazquez, Chief, Hialeah Police Department, made the announcement.
Reynaldo Castillo, 46, of Hialeah, Hendris Castillo Morales, 33, of Miami, Lisbet Castillo, 23, of Hialeah, Maite Garcia, 40, of Hialeah, Osvaldo Marin Medina, 48, of Hialeah, Alejandro Biart, 40, of Miami, Alejandro Jesus Cura, 47, of Miami, Dania Chavez, 43, of Miami, Ezequiel Severo Casas, 28, of Hialeah, Humberto Martinez Rodriguez, 43, of Hialeah, Jose Gerardo Gonzalez, 23, of Miami, Julio Suarez, 47, of Miami, Nelson Ramos, 56, of Miami, Reinaldo Cinta Gonzalez, 46, of Miami, Rudy N. Dominguez, 25, of Hialeah, and Diulys Martinez, 39, of Miami, were charged with Conspiracy to commit Health Care Fraud and Health Care Fraud in United States v. Reynaldo Castillo, et al., Case No. 15-20144-Cr-Scola. In addition, Maite Garcia was charged with Conspiracy to Pay Health Care Kickbacks and Payment of Kickbacks in Connection with a Federal Health Care Program.
As alleged in the indictment, Reynaldo Castillo, Hendris Castillo Morales, Lisbet Castillo Batista, and Maite Garcia owned and controlled 30 companies based in Miami, Hialeah, Hialeah Lakes, and Doral, Florida. These individuals utilized medical director staffing companies to obtain and misappropriate the names and licensing information for numerous physicians. This information was then used to submit false and fraudulent claims to the private insurance plans.
The indictment further alleges that Alejandro Biart accepted kickbacks from co-conspirators in return for referring Cigna, BCBS, and UHC beneficiaries to the medical clinics controlled by Reynaldo Castillo, Hendris Castillo Morales, Lisbet Castillo Batista, and Maite Garcia. These beneficiaries signed documents falsely and fraudulently representing that they had received medical services when, in fact, they had not received medical services.
The indictment additionally charges Maite Garcia for her role in paying kickbacks and bribes to certain beneficiaries in order to reimburse the beneficiaries for their monthly premium payments to Cigna.
According to the indictment, Osvaldo Marin Medina, Humberto Martinez Rodriguez, Alejandro Jesus Cura, Dania Chavez, Ezequiel Severo Casas, Jose Gerardo Gonzalez, Julio Suarez, Nelson Ramos, Reinaldo Cinta Gonzalez, Rudy N. Dominguez and Duilys Martinez agreed, in exchange for a fee, to have companies be placed in their names, to open bank accounts and check cashing accounts in the names of the companies, and to cash and deposit checks received from Cigna, BCBS, and UHC.
The indictment alleges that as a result of this scheme, Reynaldo Castillo together with his co-conspirators, submitted and caused to be the submitted false and fraudulent claims to private insurance plans, including Cigna, BCBS, UHC, and ASO insurance plans managed by Cigna, BCBS, and UHC, on behalf of the medical clinics seeking approximately $125,676,324.00, as reimbursement for injection treatments, physical therapy treatments, and other medical items and services which were neither ordered by a physician nor provided to a beneficiary as claimed. Based on these false and fraudulent claims, Cigna, BCBS, and UHC, as well as, ASO insurance plans managed by Cigna, BCBS, and UHC, paid the medical clinics approximately $13,853,392.00.
The indictment further alleges that Reynaldo Castillo, Lisbet Castillo Batista, and Hendris Castillo incorporated Investors Group of Florida Corp. to receive proceeds from the medical clinics and utilized those proceeds to purchase real estate properties. Investors Group of Florida Corp. was listed as owner of the purchased real estate properties and acted as the leasing agent. Reynaldo Castillo was the president and registered agent of Investors Group of Florida Corp. The real properties are subject to criminal forfeiture as specified in the indictment.
Osvaldo Marin Medina and Alejandro Biart were also charged in United States v. Ernesto Castillo, et al., Case No. 15-20017-Cr-Ungaro, together with Ernesto Castillo, 43, of Hialeah, and Danny Jacomino Bordon, 50, of Miami, for Conspiracy to Commit Health Care Fraud and Health Care Fraud.
The indictment alleges that Ernesto Castillo, Osvaldo Marin Medina, Alejandro Biart, Danny Jacomino Bordon, and their co-conspirators submitted and caused Amazing Medical Services Inc. (Amazing) to submit claims to Cigna seeking reimbursement in the amount of approximately $1,111,183.00, which claims falsely and fraudulently represented that medical services were prescribed by a doctor and provided to Cigna beneficiaries by Amazing. As a result of such false and fraudulent claims, Cigna made payments to Amazing in the approximate amount of $86,035.00.
The indictment further alleges that Ernesto Castillo, Osvaldo Marin Medina, Alejandro Biart caused Serenity Rehabilitation Center, Inc. (Serenity) to submit fraudulent claims to Cigna seeking reimbursement in approximately $1,806,800.00, which resulted in reimbursement payments to Serenity in the approximate amount of $252,259.00. The defendants also caused World of Rehabilitation Therapy, Inc. (World Rehab) to submit fraudulent claims to Cigna seeking reimbursement in the amount of approximately $2,245,300.00, which resulted in payments to World of Rehab from Cigna in the approximate amount of $889,151.00.
The indictment alleges that defendant Alejandro Biart accepted kickbacks from co-conspirators in return for referring Cigna beneficiaries to Amazing, Serenity, and World of Rehab.
Jose Gerardo Gonzalez, Reynaldo Castillo, Ezequiel Severo Casas, and Danny Jacomino Bordon remain at large.
Mr. Ferrer thanked the FBI, ICE-HIS, MDPD, Miami-Dade Schools Police Department, MPD, and the Hialeah Police Department for their investigative efforts. This case is being prosecuted by Assistant U.S. Attorney Christopher J. Clark.
An indictment is only an accusation and the defendants are presumed innocent until proven guilty.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Eight Alleged Members and Suppliers of Heroin Trafficking Organization ChargedRead the Press Release
NEWARK, N.J. – Eight people were charged today in connection with their roles in a drug trafficking organization that obtained heroin from Essex County, New Jersey, and supplied it to Central Jersey, U.S. Attorney Paul J. Fishman announced.
The defendants (see chart below) were each charged by complaint with one count of conspiracy to distribute 100 grams or more of heroin. Five of the eight defendants were arrested this morning as part of a coordinated takedown by federal, state and local law enforcement authorities and are scheduled to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the complaint:
The joint investigation by the Middlesex County Prosecutor’s Office and the Organized Crime and Drug Enforcement Task Force relied upon intercepted communications, physical surveillance, controlled heroin purchases, information from confidential sources and other investigative techniques. Law enforcement officers uncovered the operational structure and inner workings of the drug trafficking organization, which enriched a local street gang, the “Bounty Hunter Bloods.”
From October 2014 through March 2015, the defendants took part in a scheme to distribute heroin in an area known as “Parkside,” which straddles Franklin Township in Somerset County and New Brunswick in Middlesex County. Members of the drug trafficking organization transported the “raw,” or unpackaged, form of heroin from Essex County to Middlesex and Somerset counties and used stash houses and other temporary locations to package, store and distribute heroin. They attempted to avoid detection by using code to disguise the nature of their discussions and used prepaid cellular phones for short periods of time.
The defendants are:
Name
Age
Residence
40
Newark
Daniel Newsom, a/k/a “Spree,”
35
Franklin Township
David Miller
38
Franklin Township
Bruce Williams*
37
Newark
Juan Peralta
40
Newark
Anthony McBride*
57
New Brunswick
Tamir Styles*
37
Franklin Township
Myisha Wilson
36
Newark
(*remains at large)
Webb supplied heroin to Newsom, Miller, and Styles, all of whom lived in and around the Parkside neighborhood. He typically obtained the raw heroin suppliers, including Williams and Peralta. In some cases, Webb drove from Newark to Parkside to deliver the heroin; in other cases, Newsom, Miller, and others traveled to Newark to pick up the drugs from Webb.
The conspiracy count with which each of the defendants is charged carries a minimum potential penalty of five years in prison, a maximum of 40 years in prison, and a $5 million fine.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge George Belsky; detectives of the N.J. State Police, under the direction of Col. Rick Fuentes; officers of the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew C. Carey; and officers of the Somerset County Prosecutor’s Office, under the direction of Prosecutor Geoffrey D. Sorianno, with the joint investigation leading to today’s charges. He also thanked the North Brunswick, New Brunswick and Franklin Township police departments for their roles in the investigation.
The government is represented by Assistant U.S. Attorneys Andrew Bruck and Jonathan W. Romankow of the office’s Organized Crime/Gangs Unit in Newark.
The charge and allegations contained in the complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
14-087
District Court Enters Permanent Injunction Against Texas Pharmacy and Senior Executives to Prevent Distribution of Adulterated and Misbranded DrugsRead the Press Release
The U.S. District Court for the Western District of Texas entered a consent decree of permanent injunction against Specialty Compounding LLC, Raymond L. Solano III and William L. Swail to prevent the distribution of adulterated and misbranded drugs, the Department of Justice announced today.
The department filed a complaint in the U.S. District Court for the Western District of Texas on Feb. 23, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, Specialty Compounding manufactured both sterile and non-sterile drugs at a facility in Cedar Park, Texas, and distributed the company’s drugs to hospitals, surgery centers and health clinics in Texas and throughout the United States. As noted in the complaint, Solano is Specialty Compounding’s pharmacist-in-charge and co-owner, and Swail is Specialty Compounding’s Managing Partner and co-owner.
The complaint alleges that Specialty Compounding manufactured a sterile injectable drug product that tested positive for bacterial growth. In addition, according to the complaint, in August 2013, FDA received reports from two Texas hospitals that 17 patients had developed bacterial infections caused by Rhodococcus equi after receiving infusions of calcium gluconate manufactured by Specialty Compounding. Specialty Compounding ceased sterile drug manufacturing operations in August 2013, and recalled all lots of its unexpired sterile drug products distributed since Feb. 1, 2013.
“Specialty Compounding’s manufacturing practices posed a serious risk to the public health,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The American public needs to have the confidence that pharmaceutical drugs on the market are safe and effective.”
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a permanent injunction. As part of the settlement, the company and its owners have committed to implementing corrective actions before resuming production of sterile drugs. Specifically, the injunction prohibits Specialty Compounding and its owners from manufacturing, holding or distributing sterile drugs until they comply with the federal Food, Drug, and Cosmetic Act and its regulations. The permanent injunction also provides the defendants cannot resume distribution of sterile drug products until they receive written approval from the FDA that they are in compliance with the remedial provisions of the permanent injunction.
As described in the complaint, the FDA inspected Specialty Compounding’s Cedar Park facility in August and September 2013, and found insanitary conditions and numerous violations of the current good manufacturing practice requirements for drug products. Among other observations, the FDA found that the company was distributing some of their drugs without receiving a valid prescription for an identified individual patient and was introducing into interstate commerce unapproved new drugs and misbranded drugs. In addition, as alleged in the complaint, analyses of samples of a drug product collected by the FDA found bacterial contamination in one of the company’s drugs. The company initiated a recall of all injectable drugs on Aug. 9, 2013.
The government is represented by Trial Attorney Jessica Gunder of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel Melissa Mendoza of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
Detroit man sentenced to 4+ years in federal pill caseRead the Press Release
Defendant caught with more than 300 pills hidden in detergent box
HUNTINGTON, W.Va. – Kendall Lamar Spears, 35, of Detroit, Michigan, was sentenced to 51 months in federal prison after a December 2014 jury conviction on possession with intent to distribute oxymorphone, U.S. Attorney Booth Goodwin announced today. In late October 2012, Spears paid a Huntington couple to drive him to Detroit under the pretense of allowing him to visit family. After they arrived in Detroit, Spears left the couple for approximately an hour and returned with several bags from a Family Dollar store. He then went into a back room of the apartment in which the couple was waiting, where, according to trial testimony, Spears remained for approximately one hour before notifying the couple that he was ready to return to Huntington.
While in Detroit, the female who was driving Spears called her mother and told her that she was concerned that Spears was bringing heroin back to Huntington for resale. The woman’s parents relayed the information to members of the Huntington Police Department, who, along with agents from the Huntington Violent Crime and Drug Task Force, set up surveillance in anticipation of the group’s return. When law enforcement saw the van traveling back into Huntington, they stopped it and, with the owner’s permission, searched it. During the search, agents seized 302 oxymorphone pills inside a box of detergent located inside a Family Dollar bag in the seat where Spears had been riding.
Following the discovery of the pills, the couple informed law enforcement that they were unaware of what the package contained.
Chief United States District Judge Robert C. Chambers presided over the two-day jury trial and the sentencing hearing.
Detroit man convicted of selling oxycodone near MorgantownRead the Press Release
CLARKSBURG, WEST VIRGINIA – Terrell Moore, 35, of Detroit, Michigan, was convicted in federal court today of oxycodone trafficking, United States Attorney William J. Ihlenfeld, II, announced today.
An investigation by the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that Moore sold oxycodone in January 2015 in Monongalia County, West Virginia. He pled guilty today to a criminal Information charging him with one count of “Distribution of Oxycodone.” He faces up to 20 years in prison and a fine of up to $1,000,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
As part of the plea agreement, Moore also agreed to forfeit his interest in a 2010 Ford Fusion vehicle.
Assistant U.S. Attorney Shawn Morgan is prosecuting the case on behalf of the government.
U.S. Magistrate Judge John S. Kaull presided.
Canton Couple Sent to Prison for $2.3 Million Student Loan FraudRead the Press Release
A Canton couple was sentenced to prison for defrauding the United State Department of Education out of more than $2.3 million by obtaining fake high school diplomas for prospective students, fraudulently applying for financial aid on their behalf by representing that the students had the necessary educational credentials, and then enrolling them in the college that the couple operated, law enforcement officials said.
John “Richard” Ceroni, 65, was sentenced to 69 months in prison. Adale “Marie” Cernoni, 63, was sentenced to 55 months in prison. They were ordered to pay more than $2.3 million in restitution.
The Ceronis pleaded guilty to conspiracy to commit mail fraud and conspiracy to launder money. Richard Ceroni also pleaded guilty to obstruction.
The Ceronis were co-founders Carnegie Career College. From at least 2003, Carnegie College held itself out to the public as a private not-for-profit college that offered a select number of associate degrees, as well as various “certificate” programs in areas such as blood drawing.
Around 2002, Richard Ceroni applied with the Department of Education to participate in the federal student financial aid (SFA) program. That application was approved in December 2003, according to court documents.
Richard Ceroni was dean and director of education at Carnegie College, while Marie Ceroni was the director of Carnegie and was responsible for financial matters at the school. Richard Ceroni was also founder of Historical Chapel Ministries (HCM), which was registered as a tax-exempt charitable organization. It had offices in the same building as Carnegie College in Suffield, Ohio. Both Ceronis held themselves out as ministers of HCM, but it did not have regular services or congregants, according to court documents.
In February 2007, Carnegie College opened a branch “campus” that operated in a single-family home in Canton. In 2010, Carnegie moved its branch campus to a commercial building in North Canton, which also hosted a variety of other Ceroni ventures, including a driving school and a massage service, according to the indictment.
From June 2007 through May 2012, the Ceronis fraudulently obtained approximately $2.3 million from the Department of Education by submitting applications for SFA funds that stated students at Carnegie College had obtained valid high school diplomas; they also falsely told prospective students they would earn a valid high school diploma at the same time they attended Carnegie College and that such a diploma would be paid for by a “scholarship from a church” in order to increase enrollment and access to SFA funds, according to court documents.
The Ceronis recruited students who had not earned high school diplomas or G.E.D. certificates, and thus were not eligible for SFA funds, and submitted fraudulent financial aid documents to the Department of Education. They used online high schools, including Australia-based Adison High School, to purchase fake high school diplomas and coursework transcripts for students who were not required to attend any classes or complete any coursework, according to court documents.
Marie Ceroni paid Adison High School, which provided diplomas using the graduation date on which the student would have graduated from high school had they completed high school in the normal course. Sometimes those dates predated general public access to the Internet, according to court documents.
The Ceronis comingled fraudulently obtained money in several accounts and used that money to fund personal expenditures and expand Carnegie College. Between February 2011 and February 2012, for example, Marie Ceroni made more than $475,000 in large cash withdrawals from two accounts that operated under the Historical Chapel Ministries name. Money from those accounts was used to make under-the-table cash payments to the defendants and other Carnegie College employees who the Ceronis claimed were unpaid volunteers, according to court documents.
There were also payments using comingled funds from a several accounts, including: on July 8, 2010, Marie Ceroni wrote a check for $100,038 to pay off a personal line of credit; on Dec. 17, 2010, Marie Ceroni wrote a check for $119,230 to pay off a personal line of credit that was used, among other things, to purchase two Jeep vehicles; in 2012, the Ceronis wrote check to pay credit card balances that included charges for fake Adison High School diplomas and transcripts; in 2010, Marie Ceroni made and caused to be made electronic fund transfers to pay for credit cards that included charges of more than $4,300 from Royal Caribbean Cruises and more than $800 from Airtran; in 2011, similar electronic transfers were made to pay off credit card charges from stores including Victoria’s Secret, Wine & Spirits, Simply Tans and the University of Akron bookstore; on July 11, 2011, Marie Ceroni wrote a check for $15,650 to Jared Jewelers; on Nov. 22, 2011, she wrote a check for $24,808 to Zale’s to pay for wedding bands for the couple’s daughter; on Jan. 12, 2012, she wrote a check for $3,806 to Jared Jewelers and nine days later wrote another check to Jared Jewelers for $9,782, according to court documents.
This case is being prosecuted by Assistant U.S. Attorneys Rebecca Lutzko and Robert Patton following an investigation by the United States Department of Education – Office of Inspector General, the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division.
California Man Sentenced for Federal Heroin Trafficking Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Curtis Wallace Pack, Jr., 31, of San Diego, Calif., was sentenced this morning in federal court in Santa Fe, N.M., to 60 months in prison followed by four years of supervised release for his heroin trafficking conviction.
Pack was arrested on Sept. 12, 2013, at the Greyhound Bus Station in Albuquerque, N.M., after a consensual search by DEA agents revealed that Pack had concealed bundles containing approximately .95 kilograms of heroin inside a gift-wrapped package. Pack subsequently was indicted on Oct. 9, 2013, and charged with possession of heroin with intent to distribute.
Pack entered a guilty plea to the indictment on March 14, 2014, and admitted possessing the heroin with the intent to distribute in Bernalillo County, N.M.
This case was investigated by the Interdiction Unit of the DEA’s Albuquerque office, which focuses on disrupting the flow of narcotics, weapons, and the proceeds of illegal activities as they are smuggled into or through New Mexico in passenger buses, passenger trains, commercial vehicles and automobiles. Assistant U.S. Attorney Paul Mysliwiec prosecuted the case.
This case was prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Buffalo Man Pleads Guilty to Gun Charges Involving Two MurdersRead 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 Brandon Jonas, 29, of Buffalo, NY, pleaded guilty to two counts of discharge of a firearm in furtherance of a crime of violence before U.S. District Judge Richard J. Arcara. The charges carry a mandatory minimum penalty of 35 years in prison, a maximum of life, a $250,000 fine or both.
Assistant U.S. Attorneys Joseph M. Tripi and Wei Xiang, who are handling the case, stated that on November 11, 2004, the defendant shot and killed Nelson and Miguel Camacho, who were brothers, inside a residence on Niagara Street on Buffalo’s West Side.
The defendant, along with co-defendants Efrain Hidalgo and Misael Montalvo, received information that the brothers might have large amounts of money or drugs and would be good targets to rob. On November 11, 2004, defendant Montalvo drove Jonas and Hildalgo to the vicinity of the Niagara Street residence. Jonas was armed with an AK-47 style rifle and Hidalgo had a baseball bat. After surveilling the residence, Jonas and Hildalgo forced their way into the residence in an attempt to rob money and drugs from the brothers. During the robbery attempt, Jonas shot and killed the Camachos.
Josue Ortiz served 10 years in state prison for the murders of Nelson and Miguel Camacho. His conviction was recently vacated by an Erie County Court judge based on the findings of this federal investigation.
Efrain Hildalgo was convicted and is scheduled to be sentenced on June 17, 2015 at 1:00 p.m. Charges are still pending against Misael Montalvo. 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 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.
Sentencing is scheduled for June 29, 2015 at 1:00 p.m. before Judge Arcara.
Boone County man sentenced to federal prison in meth caseRead the Press Release
CHARLESTON, W.Va. – Chris Curry, 37, of Nellis, Boone County, West Virginia, was sentenced to six months in federal prison and three years’ supervised release, U.S. Attorney Booth Goodwin announced today. Curry previously pleaded guilty in December 2014, admitting that he had agreed to receive a package containing methamphetamine for another person. Curry further admitted that he was to have received a small amount of the methamphetamine in exchange for accepting delivery of the package to his residence.
United States District Judge Thomas E. Johnston imposed today’s sentence.
The successful prosecution of Curry was the result of an investigation by agents of the Drug Enforcement Administration and the West Virginia State Police.
61 Individuals Indicted for Drug TraffickingRead the Press Release
SAN JUAN, Puerto Rico – On March 4, a federal grand jury in the District of Puerto Rico returned an indictment against 61 defendants charged with conspiracy to possess with intent to distribute controlled substances in the municipalities of Manatí, Barceloneta, and Florida, PR, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) is in charge of the investigation, with the collaboration of the Puerto Rico Police Department, specially the Arecibo Strike Force, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The indictment alleges that beginning in 2000, the organization distributed crack, heroin, cocaine, marihuana, Oxycodone (commonly known as “Percocet”), and Alprazolam (commonly known as “Xanax”) within 1,000 feet of a real property comprising a housing facility owned by a public housing authority. The object of the conspiracy was to distribute controlled substances at the Enrique Zorilla Public Housing Project, the Los Murales Public Housing Project, the Cortes Ward, the San José Ward and the Acueducto Ward, all located in the Municipality of Manatí, PR. The conspiracy also distributed controlled substances at V & B Public Housing Project in the Municipality of Barceloneta, and the Villas de Florida Public Housing Project, located in the Municipality of Florida; all for financial gain and profit.
The 61 co-conspirators had many roles in order to further the goals of the conspiracy. According to the indictment this organization had up to 12 leaders/drug point owners/enforcers, two narcotics suppliers, at least 11 runners, six drug processors, 24 sellers, three look-outs/facilitators. Eighteen of the individuals are facing one count of possessing firearms in furtherance of a drug trafficking crime.
The 61 defendants are: Carlos Gotay Guzmàn, a.k.a. “Moro;” Javier Gonzàlez Pérez, a.k.a. “Javier Tornillo;” Reinaldo Colón Oliveras, a.k.a. “Tito Capao; Roberto Maldonado Rodríguez, a.k.a. “Robert El Calvo;” Carlos Vàzquez Otero, a.k.a. “Carlos Misquin;” Julio Alberto Rivera-Rodríguez, a.k.a. “Ito;” Eric O. Rosa Ramos, a.k.a. “El Indio;” Jorge L. Alicia Pagàn, a.k.a. “Bebo Conejo;” Alfredo Virella Laureano, a.k.a. “Keko;” Christian Rodríguez Rivera, a.k.a. “Cuso;” José M. Rivera Molina, a.k.a. “Bolillo;” Jonathan Ortiz Salgado, a.k.a. “Cochi;” Juan Ramiro Fonseca-Otero, a.k.a. “Burro;” Héctor Moreno Rivera, a.k.a. “Mickey Bay;” Aníbal García Quiñones, a.k.a. “Junior El Manco;” Luis Daniel Rosa-Santiago, a.k.a. “Luisda;” José Resto-Laureano, a.k.a. “Piti;” Jaime Freytes Maldonado, a.k.a. “Micro;” Alexander Avilés Santiago, a.k.a. “Pipo;” Héctor Colón Romero, a.k.a. “Coscu;” Ulises Soto Soto; Jose Luis Ortiz Vega, a.k.a. “Bebo Chino;” Christian Pantoja-Sànchez, a.k.a. “Wolf;” Ernie Vega Cruz, a.k.a. “Ernie Perla;” Jonathan Figueroa Hernàndez, a.k.a. “Jonathan Mickey Mouse;” Roberto R. Valle Cordero, a.k.a. “Robert de Niro;” Ramón J. Figueroa Colón, a.k.a. “Bengay;” Josué Salgado Pagàn, a.k.a. “Tony Monaco;” Héctor Earl Montilla-Battice, a.k.a. “Cacho;” Christian Torres Moràn, a.k.a. “Palomita;” Jessie Vega Quiñones; Alex José Babilonia-Torres, a.k.a. “Alex Moña;” Luis Ernesto Gonzàlez Moreno, a.k.a. “Poeta;” Luis M. Cortés Class, a.k.a. “Luis El Loco;” Héctor M. Rodríguez Soto, a.k.a. “Buddhita;” Omar E. Mendoza Vidal, a.k.a. “Cuajo;” Edwin Montijo Gonzàlez, a.k.a. “Joel Sandwich;” Luis Centeno Ortiz; Edwin Mendoza Vargas, a.k.a. “Pito Chuli Mami;” Rubén de Jesús-Ortiz, a.k.a. “Rubencito;” José Rivera Medina, a.k.a. “Pito Llaga;” Jovanny Reyes Sànchez, a.k.a. “Jovanny El Lento;” Elizabeth Gerena Santiago, a.k.a. “Eli La Mona;” Kelvin Xavier Nieves-De Jesús, a.k.a. “Kelvin Blue;” Ruben Larregui López, a.k.a. “Cusito;” Fernando J. Muñíz Vega, a.k.a. “Joel Vega;” Emmanuel Salgado Gonzàlez, a.k.a. “Mejico;” Danny Salgado Gonzàlez, a.k.a. “Danny;” Luis A. Serrano Aponte, a.k.a. “Cachi;” Luis Ángel Siragusa Soto, a.k.a. “El Gordo Siragusa;” Carlos José Siragusa Soto, a.k.a. “Bebe Siragusa;” Christian O. Rodríguez Morales, a.k.a. “Christian El Lento;” Dennis Colón Laureano, a.k.a. “Buho;” Shaquille E. Rivera de Jesús; Ruth Emily Hernaiz Rojas, a.k.a. “Ruty;” Luis Antonio Ibañez-Bello, a.k.a. “Gordo Ibanez;” José Antonio Acevedo Nazario, a.k.a. “Sindicato;” Beatriz de Los Angeles Ortiz-Sànchez, a.k.a. “Bea;” José O. Padilla Flores, a.k.a. “Landi;” Jorge Rivera Sànchez; and Delgado Díaz.
Defendants José Antonio Acevedo-Nazario, aka “Sindicato;” José O. Padilla-Flores, aka “Landi;” Reinaldo Colón-Oliveras, aka “Tito Capao;” Jorge Rivera-Sànchez; and Leslie Delgado-Díaz are each facing one count of conspiracy to commit money laundering. Defendant Josué Salgado-Pagàn, aka “Tony Monaco” is facing two counts of money laundering.
“This is the second arrest operation against a gang in Manatí in the last three weeks. These arrests will keep the law-abiding citizens in these areas safer from the inevitable violence that drug trafficking brings,” said U.S. Attorney Rodríguez-Vélez. “These arrests are a clear indication of the success of the OCDETF program in the fight against drug trafficking.”
“This case exemplifies that those involved in the distribution of narcotics and other contraband will be vigorously investigated and prosecuted,” said Ángel M. Meléndez, Special Agent in Charge of HSI San Juan. “HSI thanks our local, state and federal law enforcement partners for their significant cooperation in dismantling this drug trafficking organization.”“ATF continues to be in the forefront in fighting against firearms trafficking and firearms related violence. The area of Manatí, PR wakes up a safer place thanks to the Federal, State and Local law enforcement partnership,” said Hugo Barrera, ATF Special Agent in Charge.
The defendants were the targets of a long-term Organized Crime Drug Enforcement Task Force (OCDEFT) investigation. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Assistant U.S. Attorney Edward Veronda is in charge of the prosecution of the case. If convicted the defendants face a minimum sentence of 10 years up to life in prison. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
# # #*******media Advisory*******Read the Press Release
FORT WORTH TO JOIN NATIONAL EFFORT TO BUILD TRUST AND RECONCILIATION BETWEEN LAW ENFORCEMENT AND COMMUNITIES THEY SERVE
Attorney General Holder to Convene My Brother’s Keeper Roundtable with Students and Officers to Announce Six Regional Sites for the National Initiative for Building Community Trust and Justice
FORT WORTH, Texas – As part of the Department of Justice’s ongoing commitment to strengthening the relationship between law enforcement and the communities they serve, tomorrow, THURSDAY, MARCH 12, 2015 at 2:00 p.m. CDT, Attorney General Eric Holder will announce the first six pilot sites for the National Initiative for Building Community Trust and Justice.
The National Initiative for Building Community Trust and Justice, first announced in April 2014, is a $4.75 million partnership between the Department of Justice and criminal justice experts that will invest in training, evidence-based strategies, policy development and research to combat distrust and mend bonds between law enforcement and the community.
Attorney General Holder will announce the six Building Community Trust pilot sites after a My Brother’s Keeper roundtable discussion at the Department of Justice with law enforcement officers and students. This announcement comes on the heels of the Attorney General’s multi-state Building Community Trust tour held over the last several months.
WHO: Attorney General Eric Holder Assistant Attorney General Karol V. Mason of the Office of Justice Programs
WHEN: THURSDAY, MARCH 12, 2015 2:00 p.m. CDT
WHERE: U.S. Department of Justice 950 Pennsylvania Avenue, N.W. Washington, DC 20530. PHOTO SPRAY AT THE BOTTOM (Media Access: 2:30 p.m. EDT//Media Gather Time: 3:00 p.m. EDT//Department of Justice Visitor’s Center on Constitution Avenue between 9th and 10th Streets.)
Background on the National Initiative for Building Community Trust:
The initiative, which is an ongoing partnership with the Justice Department, will provide training to law enforcement and communities on bias reduction, procedural fairness, and reconciliation, and will apply evidence-based strategies in six pilot sites around the country. It will also establish a clearinghouse where information, research and technical assistance are readily accessible for law enforcement, criminal justice practitioners and community leaders.
The three-year grant has been awarded to a consortium of national law enforcement experts led by John Jay College of Criminal Justice. Yale Law School, the Center for Policing Equity at UCLA and the Urban Institute make up the rest of the consortium. The initiative will be guided by a board of advisors which includes national leaders from law enforcement, academia and faith-based groups, as well as community stakeholders and civil rights advocates. In a holistic approach, the initiative will simultaneously address the tenets of procedural justice, reducing implicit bias and facilitating racial reconciliation.
The initiative will complement and be advised by other Justice Department components such as the Office of Justice Programs, the Office of Community Oriented Policing Services, the Office on Violence Against Women, the Civil Rights Division and the Community Relations Service.
10 March 2015
Zuni Pueblo Man Charged with Assaulting Three-Year-Old ChildRead the Press Release
ALBUQUERQUE – Terrence Fred Cachini, 28, a member and resident of Zuni Pueblo, N.M., made his initial appearance in federal court in Albuquerque, N.M., on a criminal complaint charging him with assault resulting in serious bodily injury. Cachini entered a not guilty plea to the charge in the criminal complaint and was released to a half-way house pending trial.
The criminal complaint alleges that Cachini assaulted a three-year-old Indian child and caused the victim to suffer serious bodily injury on Feb. 24, 2015, at a residence in Zuni Pueblo within McKinley County, N.M. According to the criminal complaint, the FBI initiated an investigation into Cachini on Feb. 25, 2015, after receiving a report from medical staff at the University of New Mexico Hospital where the victim was being treated for injuries, including soft tissue injuries to all planes of the victim’s body, allegedly caused by physical abuse.
If convicted of the charges in the criminal complaint, Cachini faces a statutory maximum penalty of ten years in federal prison. Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque and Gallup offices of the FBI. Assistant U.S. Attorney Sarah Mease is prosecuting the case.
Woodring Pleads Guilty to Federal Charges Related to Attacks on Power GridRead the Press Release
LITTLE ROCK – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation; and Grover Crossland, Resident Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) – Little Rock Field Office announced today that Jason Woodring, age 38, of Jacksonville, Arkansas, pleaded guilty today to charges related to his attacks on Central Arkansas’ power grid between August and October of 2013. Those attacks included sabotaging an electrical support tower and downing a 500,000-volt power line onto a railroad track near Cabot, Arkansas, which resulted in approximately $550,000 worth of damage; setting fire to and destroying an Extra High Voltage (EHV) switching station in Scott, Arkansas, causing over $4,000,000 in damages; and cutting down two power poles, which led to the temporary loss of power to approximately 9,000 people in Jacksonville, Arkansas. According to First Electric Cooperative representatives, damages from this incident exceeded $48,000. Woodring was charged in an 8-count indictment by a federal grand jury on November 6, 2013. He has been in federal custody since that time.
Pursuant to a plea agreement with the United States, Woodring pleaded guilty to Destruction of an Energy Facility for downing the Cabot power lines (Count Two) and for setting fire to the Scott power station (Count Three). He also pleaded guilty to Using Fire to Commit a Felony (Count Four) in relation to the arson in Scott. Finally, Woodring pleaded guilty to being an illegal drug user in possession of various firearms and ammunition (Count Eight) and agreed to forfeit the firearms and ammunition.
“The citizens of Central Arkansas can rest a bit easier today with the plea of Jason Woodring,” stated Thyer. “The power grid attacks had the potential to put many lives at risk. When we depend on electrical power not only for comfort and convenience, but also for safety, security and life-sustaining equipment, not knowing where the next attack would occur held the public hostage to an unknown attacker. I am extremely grateful to all the investigators from the FBI, Joint Terrorism Task Force, Bureau of Alcohol, Tobacco, Firearms and Explosives, Union Pacific Police, Entergy, First Electric, Lonoke County Sheriff’s Office, Cabot Police, Arkansas State Police, Conway Police Department, Little Rock Police Department and Arkansas Game and Fish Commission for their cooperation and commitment to this investigation these past few months.” Under the plea agreement, the United States and Woodring have agreed that Woodring should be sentenced to 180 months (or 15 years) in federal prison. The presiding judge, the Honorable Billy Roy Wilson, will determine his actual sentence. The amount of restitution owed by Woodring will be determined at or before his sentencing hearing scheduled for June 18, 2015, at 10:30 a.m.
The charge of Destruction of an Energy Facility carries a possible sentence of not more than 20 years in prison. Use of a Fire to Commit a Felony has a statutory sentence of ten years which must be served consecutive to the underlying felony. The charge of being a Drug User in Possession of a Firearm or Ammunition carries a possible sentence of not more than ten years in prison. Woodring could also face not more than a $250,000 fine for each charge against him and not more than three years of supervised release.
This investigation was conducted by the FBI, Joint Terrorism Task Force, Bureau of Alcohol, Tobacco, Firearms and Explosives, Union Pacific Police, Entergy, First Electric, Lonoke County Sheriff’s Office, Cabot Police, Arkansas State Police, Conway Police Department, Little Rock Police Department and Arkansas Game and Fish Commission.
Violent Felon Charged with Murder of a Deputy U.s. MarshalRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced that JAMIE D. CROOM, age 31, has been charged in a federal criminal complaint with the murder of Deputy United States Marshal Josie Wells while Deputy Wells was engaged in the performance of his official duties, in violation of Title 18, United States Code, Sections 1111 and 1114.
Drew J. Wade, Chief of Public Affairs for the U.S. Marshals Service, released the following statement concerning the incident giving rise to the federal complaint: “At approximately 11:00 a.m. today, Deputy Marshal Wells died in the line of duty. Deputy Marshal Wells was part of a team executing a warrant on a fugitive wanted for double homicide. The team engaged gunfire and Wells was shot. He was immediately transported to an area hospital, where he died. The fugitive was also shot and transported to a hospital. The shooting investigation is being led by the Federal Bureau of Investigation and the Baton Rouge Police Department. No other law enforcement personnel were injured during this incident.”
This matter is being investigated by the FBI and the Baton Rouge Police Department, with the assistance of the East Baton Rouge Sheriff’s Office, the Louisiana State Police, the Bureau of Alcohol Tobacco Firearms and Explosives (ATF), the Pointe Coupee Sheriff’s Office and the District Attorney’s Offices for the Nineteenth and Eighteenth Judicial Districts.
This matter is being prosecuted by Assistant United States Attorneys M. Patricia Jones, who serves as Senior Litigation Counsel, and Robert W. Piedrahita, who serves as Litigation Counsel.
NOTE: A federal complaint is an accusation by the United States. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Utah Resident Sentenced for Tax Evasion and Filing a False ReturnRead the Press Release
A Kaysville, Utah, man was sentenced yesterday in the U.S. District Court for the District of Utah to serve 27 months in prison to be followed by three years of supervised release, and ordered to pay $174,684 in restitution.
On Sept. 19, 2014, Jon T. McBride was convicted following a jury trial of three counts of tax evasion and one count of filing a false federal income tax return, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
The evidence at trial established that McBride prepared and filed a false individual federal income tax return for the year 2005. He failed to report approximately $109,785 in gross income that he received during the 2005 tax year. McBride also willfully attempted to evade his federal income taxes for the 2006, 2007 and 2009 tax years by failing to file an individual federal income tax return, filing a false tax return where he underreported his income by more than $300,000, and filing a false tax return that reported zero income. McBride also used several nominees to hide and conceal his ownership in property and partnerships to keep those assets out of the reach of the Internal Revenue Service (IRS).
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Brent Ward of the Justice Department’s Criminal Division and Andrea Kafka of the Tax Division, who prosecuted the case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the District of Utah for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Utah Resident Sentenced for Tax Evasion and Filing a False ReturnRead the Press Release
SALT LAKE CITY - Jon Telford McBride of Kaysville, Utah, was sentenced Monday afternoon in U.S. District Court in Salt Lake City to 27 months in prison to be followed by three years of supervised release. He also was ordered to pay $174,684 in restitution.
McBride was convicted of three counts of tax evasion and one count of filing a false federal income tax return following a jury trial in September, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
“In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe,” said John G. Collins, IRS Criminal Investigation Special Agent in Charge of Utah. “Taxpayers deserve our vigilance in the investigation and prosecution of those who choose to file false tax returns and try to evade paying the taxes they owe. This sentence should send a clear message; schemes to evade the payment of taxes are a violation of the federal tax laws and the consequences of such schemes can and will result in jail time.”
The evidence at trial established that McBride prepared and filed a false individual federal income tax return for the year 2005. He failed to report approximately $109,785 in gross income that he received during the 2005 tax year. McBride also willfully attempted to evade his federal income taxes for the 2006, 2007 and 2009 tax years by failing to file an individual federal income tax return, filing a false tax return where he underreported his income by more than $300,000, and filing a false tax return that reported zero income. McBride also used several nominees to hide and conceal his ownership in property and partnerships to keep those assets out of the reach of the Internal Revenue Service (IRS).
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Brent Ward of the Justice Department’s Criminal Division and Andrea Kafka of the Tax Division, who prosecuted the case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the District of Utah for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Two St. Robert Women Plead Guilty to Nigerian Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two St. Robert, Mo., women have pleaded guilty in federal court to their roles in a Nigerian fraud scheme in which thousands of victims across the country were tricked into cashing up to $3 million in counterfeit money orders and cashier’s checks.
Lisa Kaye Barwick-Majeski, 54, of St. Robert, pleaded guilty today before U.S. District Judge M. Douglas Harpool to leading the conspiracy to commit wire fraud. Co-defendant Cheryl Barber, 41, also of St. Robert, pleaded guilty to her role in the conspiracy on Feb. 10, 2015.
Under the terms of today’s plea agreement, Barwick-Majeski must pay up to $3 million in restitution to her victims and must forfeit $1,485,301 to the government.
By pleading guilty today, Barwick-Majeski admitted that she was the primary leader of a conspiracy that involved counterfeit postal money orders, counterfeit bank cashier’s checks and numerous wires to unindicted co-conspirators in the country of Nigeria.
Barwick-Majeski, with the help of Barber and other co-conspirators, dispatched counterfeit postal money orders and bogus cashier checks to thousands of victims throughout the United States. These false money orders and cashier checks were deposited in victims’ bank accounts after the victims were duped into believing they were paid participants as part of a “secret shopper” exercise designed for them to evaluate Wal-Mart and various money wire outlets. The victims were instructed to keep approximately $200 or more of the less than $2,000 counterfeited postal money order or bogus cashier’s check, and immediately wire the remaining money to Barwick-Majeski and her co-defendants. After a few days, the counterfeited money order or bogus cashier’s check would be returned against the victims’ account as not negotiable. The victims would then be obligated to pay their banks or their financial institutions for most of the money they wired to Barwick-Majeski and others.
Barwick-Majeski and her co-defendants shared most of their proceeds with a group of Nigerians that were responsible for supplying Barwick-Majeski with fraudulent postal money orders and cashier’s checks.
Barber admitted that she wired funds to co-conspirators in Nigeria to further the illegal scheme. Barber admitted that her criminal conduct within the wire fraud conspiracy amounted to approximately $25,129 of illegal wires sent or received by Barber. Under the terms of her plea agreement, Barber must pay restitution to her victims.
During the course of the investigation, according to court documents, law enforcement officers seized more than $1.7 million worth of counterfeit postal money orders. Some of those counterfeit money orders were taken directly from Barwick-Majeski and some were seized by U.S. Customs and Border Protection or intercepted en route to Barwick-Majeski.
In addition to the counterfeit postal money orders, law enforcement officers executed a search warrant at Barwick-Majeski’s residence on Nov. 5, 2013, and seized a parcel that contained 354 counterfeit BMO-Harris Bank cashier’s checks with a total face value of more than $1 million. According to court documents, law enforcement officers also seized $406,800 in counterfeit Mid Missouri Credit Union cashier’s checks during the investigation.
Under federal statutes, Barwick-Majeski and Barber are each subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the St. Robert, Mo., Police Department.
Twenty-Six People Indicted for Conspiracy in which Electronics Stolen in Toledo were Sold in Michigan and the Middle EastRead the Press Release
Twenty-six people, most of them from the Toledo area, were indicted in federal court for their roles in a wide-ranging conspiracy in which stolen computers, smart phones and other electronics were fenced at stores in Toledo and resold in Michigan and the Middle East, law enforcement officials said.
Some members of the conspiracy used firearms, threats and violence as part of their operation. Others illegally cashed millions of dollars’ worth of checks at their stores. Others sold counterfeit clothing from their stores. And members of the conspiracy worked together at various Toledo stores to launder money, according to the indictment.
The indictment was announced by Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office, Toledo Police Chief George Kral, Lucas County Sheriff John Tharp and Troy Stemen, Assistant Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Indicted are Mamoun Awwad, 43, of Maumee; Adnan Awad, 33, of Toledo; Ihab Awad, 31, of Toledo; Ayman Awwad, 42, of Maumee; Anwar Awad, 39, of Toledo; Kamal Awwad, 40, of Toledo; Fady Awwad, 34, of Toledo; Aref Kahala, 23, of Maumee; Saif Alkhatib, 23, of Perrysburg; Haney Sarsour, 36, of Dearborn, Mich.; Ameen Sarsour, 31, of Dearborn, Mich.; Michael Safadi, 37, of Westland, Mich.; Freddy Delatorre, 32, of Toledo; Jeffrey Houttekier, 24, of Toledo; Ahmed Abdulateeef, 47, of Toledo; Ehab Adbdelsalam, 22, of Toledo; Timothy Fields, 32, of Toledo; Ali Abdallah, 34, of Dearborn, Mich.; Mustafa Deebajah, 27, of Dearborn, Mich.; Essa Allawneh, age unknown, of Amman, Jordan; Adli Alawneh, age unknown, of Amman, Jordan; Omar Dari, 54, of Ann Arbor, Mich.; Mutaz Almumani, 29, hometown unknown; Fadi Qasis, 30, hometown unknown; Mayssam Kaddoura, 36, of Toledo and Jamal Abdel Aziz, 44, of Toledo.
Mamoun Awwad, Adnan Awad, Ihab Awad, Ayman Awwad, Anwar Awad, Kamal Awwad, Fady Awwad and Aref Kahala are family members who own and operate various businesses in Toledo, including clothing stores, electronics stores and grocery/convenience stores. They use these businesses to facilitate various criminal schemes, including the sale of counterfeit goods, trafficking stolen goods and unlawfully cashing checks, according to the indictment.
The Awwad family enterprise bought stolen electronics, such as iPhones, iPads and Samsung cellular phones, from drug addicts and low-income people, then altered the electronics’ hardware and software so they could be registered on cellular networks. The Awwad family enterprise then sold the stolen electronics locally, in Michigan and overseas. Mamoun Awwad did this, in part, by meeting with crew members of Royal Jordanian Airlines in Detroit to have them transport electronics and cash, according to the indictment.
The goal of the conspiracy was to generate cash and send it overseas to establish a series of residences in Rammoun, Palestine, for members of the Awwad family enterprise and their families to own and occupy, according to the indictment.
The family unlawfully cashed checks at the Reynolds Quick Stop and other grocery/convenience stores as a way to generate revenue and launder proceeds from the sale of counterfeit and stolen goods. The family cashed more than $11 million in checks at various store locations between 2011 and 2014, according to the indictment.
The family also knowingly sold shoes, sweat suits, t-shirts and other clothing bearing counterfeit logos and trademarks of brands including Nike, Timberland, Coogi, Ralph Lauren, RoccaWear, Ecko, Lacoste, Dolce Gabbana and others, according to the indictment.
The Awwad family enterprise used violence and threats of violence to maintain control of the stolen goods market in Toledo. For example, Mamoun Awwad threatened someone with a 9 mm pistol while an employee held a knife of their throat. In another incident, Mamoun Awwad assaulted someone outside a cellular phone store because that person tried to sell seven stolen iPhones without Mamoun Awwad’s permission, according to the indictment.
The conspiracy took place from 2006 through 2015, according to the indictment.
Count 1 charges a RICO conspiracy. Count 2 charges conspiracy – interstate and foreign transportation of stolen property. Count 3 charges conspiracy to smuggle goods from the U.S. Count 4 charges conspiracy to commit access device fraud. Count 5 charges conspiracy to traffic counterfeit goods. Count 6 charges conspiracy to commit money laundering.
“This is a sophisticated crime and money-laundering racket whose reach stretched from Ann Arbor to Amman,” Dettelbach said. “According to the indictment, they bought stolen electronics, often from drug addicts in Toledo, and shipped them out of the state and country for millions of dollars.”
“The Awwad criminal enterprise used force and intimidation to control their complex network of illegal schemes all in an effort to line their bank accounts with millions,” Anthony said. “We are pleased the strength of our long standing local, state, and federal law enforcement partnerships has successfully dismantled a pervasive criminal enterprise that has plagued the citizens of Toledo and Lucas County for more than a decade."
“I think an operation such as this shows how well local law enforcement works with the federal government,” Kral said. “Multiple arrests, simultaneous search warrants, and complex investigations require synergy and cooperation. One agency alone simply can’t get it done. The working relationship between TPD and our federal partners has never been better. The citizens of the City of Toledo are much safer thanks to this multidisciplinary approach to policing."
“The 26 individuals indicted went to great lengths to create the illusion of a successful family enterprise. In reality, what they created was nothing more than a false front, hiding a tangled web of financial lies,” Stemen said. “This massive federal indictment has exposed these individuals for who they really are, thugs and thieves. It would not have been possible without the highly successful collaboration of IRS-Criminal Investigation and our federal and local law enforcement partners; including the Toledo Police Department and the Lucas County Sheriff’s Office, both of which played critical roles in the success of this investigation.”
This case is being prosecuted by Assistant U.S. Attorneys Duncan Brown and Michael Freeman following an investigation by the FBI, Toledo Police Department, Lucas County Sheriff’s Office and IRS-CI.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
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 Indicted for Operating ‘Pay-To-Stay’ Schools That Allegedly Enabled Foreign Nationals to Remain in U.S. as Foreign ‘Students’Read the Press Release
LOS ANGELES – Three Los Angeles-area residents responsible for operating a network of four schools were arrested this morning on federal charges for allegedly helping hundreds of foreign nationals remain in the United States as foreign students, even though they never attended classes.
The three defendants allegedly ran a “pay-to-stay” scheme through three schools in Koreatown – Prodee University/Neo-America Language School; Walter Jay M.D. Institute, an Educational Center (WJMD); and the American College of Forensic Studies (ACFS) – and a fourth school currently operating in Alhambra, Likie Fashion and Technology College.
The three defendants are named in a 21-count indictment returned yesterday by a federal grand jury. The indictment alleges a conspiracy to commit immigration fraud, a host of immigration offenses and money laundering.
The indictment also contains an allegation that would require the defendants to forfeit property and proceeds derived from the fraud scheme, which investigators estimate took in as much as $6 million a year in “tuition” payments.
“Immigration fraud schemes potentially compromise national security and cheat foreign nationals who play by the rules,” said Acting United States Attorney Stephanie Yonekura. “In this case, officials at several schools allegedly abused their responsibility to ensure that only legitimate foreign students were allowed to the stay in the country. This type of fraud against the United States will be thoroughly examined to bring those responsible to justice and to protect the integrity of our immigration system.”
Those named in the indictment unsealed today are:
Hee Sun Shim (also known as Leonard Shim and Leo Shim), 51, of Beverly Hills, the owner and manager of the schools;
Hyung Chan Moon (also known as Steve Moon), 39, of Los Angeles, who assisted with the operation and management of the schools; and
Eun Young Choi (also known as Jamie Choi), 35, of Los Angeles, a former employee who assisted with the operation and management of the schools.
The defendants, who were taken into custody by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), are expected to be arraigned on the indictment tomorrow in United States District Court.
“Given the implications for national security and public safety, we will move aggressively to target individuals who compromise the integrity of our nation’s immigration system out of greed and self-interest,” said Claude Arnold, special agent in charge for HSI Los Angeles. “Simply put, those who exploit the benefits of the student visa program can expect to get a lesson in criminal justice.”
The investigation in this case began in 2011 after a compliance team from HSI’s Student and Exchange Visitor Program (SEVP) paid an unannounced visit to Prodee University’s main campus on Wilshire Boulevard. During the visit, the team observed only one English language class with three students in attendance, even though records for the Student and Exchange Visitor Information System (SEVIS) showed more than 900 foreign students were enrolled at Prodee’s two campuses. That same day, the SEVP team made an unannounced visit to ACFS where they found only one religion class in session with a single student present. At the time, SEVIS records indicated that ACFS had more than 300 foreign students in active status.
During the ensuing investigation, HSI special agents identified several dozen foreign nationals, primarily from South Korea and China, who originally entered the U.S. as F-1 non-immigrant students to attend other SEVP authorized schools, but subsequently transferred to schools in the Prodee network. These students lived across the nation, indicating that they were not actually attending classes at Prodee or the other schools.
As detailed in the indictment, Prodee and its affiliated schools were authorized to issue a document that certified a foreign national had been accepted to a school and would be a full-time student. The document – “Certificate of Eligibility for Nonimmigrant (F-1) Student Status - for Academic and Language Students,” which is commonly called a Form I-20 – made a student eligible to obtain an F-1 student visa that would allow the student to enter and remain in the United States while the student was making normal progress toward completing a full course of study.
The indictment alleges that Prodee and the other schools issued Form I-20s to foreign nationals who were not bona fide students, had no intention of attending the schools and lived outside of California. As part of the conspiracy, Shim and Choi allegedly were involved in the creation of bogus student records, including transcripts, for some of the students for the purpose of deceiving immigration authorities. The indictment further alleges that Shim would transfer a purported student from one school to another to avoid arousing the suspicion of immigration authorities about “students” who had been in the United States for lengthy periods of time.
In exchange for the Form I-20, a student would make “tuition” payments of as much as $1,800 to “enroll” for six months in one of the schools, according to the indictment.
The indictment charges Shim, Moon and Choi with conspiring to commit immigration fraud. Shim is charged with 13 counts of use or possession of an immigration document procured by fraud; and Moon and Choi are each charged with one count of the same offense. Shim is charged with three counts of encouraging illegal residence, as well as two counts of money laundering.
The conspiracy count carries a statutory maximum sentence of five years in federal prison. The substantive immigration fraud charges each carry up to 10 years in prison. The money laundering charges carry a potential penalty of 20 years.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Effective immediately, Prodee and its affiliated schools will no longer be able to access SEVIS, and HSI will be seeking to withdraw the schools’ SEVP certification, which will bar the institutions from enrolling foreign students. Foreign students who are currently enrolled at any of these schools should contact SEVP representatives for further instructions at (703) 603-3400 weekdays between 7 a.m. and 8 p.m. EDT. Additional information for affected students has also been posted on the SEVP Web page on ICE’s website, http://www.ice.gov/sevis/whats-new.
SEVP monitors approximately 1 million international students who are pursuing studies in the U.S. on F and M visas. It also certifies schools that enroll these students and manages the SEVIS database, which houses information on international students, exchange visitors and their dependents. In addition to unannounced site visits to SEVP-certified schools, SEVP’s compliance unit has implemented a number of measures to ensure only bona fide U.S. schools can enroll international students, including the use of a risk assessment tool, requirements for regular recertification, and the deployment of field representatives to visit certified schools twice yearly.
The HSI-led investigation into Prodee is ongoing. HSI has received substantial assistance with the case from U.S. Citizenship and Immigration Services’ Fraud Detection and National Security Division.
Release No. 15-026
Third Ocean Shipping Executive Pleads Guilty to Price Fixing on Ocean Shipping Services for Cars and TrucksRead the Press Release
An employee of Japan-based Nippon Yusen Kabushiki Kaisha (NYK) pleaded guilty today and was sentenced to 15 months in a U.S. prison for his involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced today.
According to the one-count felony charge filed in U.S. District Court for the District of Maryland in Baltimore on Jan. 16, 2015, Susumu Tanaka, who was a manager, deputy general manager and general manager in NYK’s car carrier division, conspired to allocate customers and routes, rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore. Tanaka participated in the conspiracy from at least as early as April 2004 until at least September 2012.
Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and off of an ocean-going vessel. Examples of this cargo include new and used cars and trucks and construction and agricultural equipment.
“Today’s sentence is another step toward bringing to justice the perpetrators of this long-running cartel and restoring competition to the ocean shipping industry,” said Bill Baer, Assistant Attorney General for the Antitrust Division. “But this investigation is far from over. We are continuing our efforts to hold accountable the companies and executives who seek to maximize profits through illegal, anticompetitive means.”
Pursuant to the plea agreement, which the court accepted today, Tanaka was sentenced to serve a 15-month prison term and pay a $20,000 criminal fine for his participation in the conspiracy. In addition, Tanaka has agreed to assist the department in its ongoing investigation into the ocean shipping industry.
Tanaka was charged with a violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for an individual. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s sentence is the third against an individual in the division’s ocean shipping investigation, and the first against an individual from NYK. Three corporations have agreed to plead guilty and to pay criminal fines totaling more than $136 million, including NYK, which has agreed to pay a criminal fine of $59.4 million, pending court approval.
This plea agreement is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.
South American Counter-Terrorism Official Sentenced to 195 Months in Prison for Attempting to Support HezbollahRead the Press Release
Also Convicted of Narcotics Trafficking and Firearms Offenses
Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York announced that Dino Bouterse, a citizen of Suriname who assisted in the formation of that country’s Counter-Terrorism Unit, was sentenced today in federal court in New York City to 195 months in prison for attempting to provide material support and resources to Hezbollah, a designated terrorist organization, along with narcotics trafficking and firearms offenses. Bouterse, who was arrested in Panama on Aug. 29, 2013, and arrived in the United States on Aug. 30, 2013, pleaded guilty before U.S. District Judge Shira A. Scheindlin, who also imposed today’s sentence.
“Dino Bouterse was supposed to oppose terrorism,” said U.S. Attorney Bharara. “Instead, Bouterse betrayed his official position and tried to support and aid Hezbollah, including his agreement to assist Hezbollah in acquiring weapons, and conspiring to import cocaine to the U.S. Today he has been sentenced to a lengthy prison term for those odious crimes.”
According to the indictment, other documents filed in federal court and statements made at today’s sentencing:
In 2013, Bouterse used his position within the government of Suriname to assist individuals he believed were members of Hezbollah, who informed Bouterse that they intended to conduct terrorist attacks against American interests. In exchange for a multimillion-dollar payment, Bouterse agreed to allow large numbers of purported Hezbollah operatives to use Suriname as a permanent base for, among other things, attacks on American targets. In furtherance of his efforts to assist Hezbollah, Bouterse supplied a false Surinamese passport to a purported Hezbollah operative for the purpose of clandestine travel, including travel to the United States; discussed heavy weapons that he could provide to Hezbollah; and instructed the purported Hezbollah members about how Hezbollah operatives, supplied with a Surinamese cover story, could enter the United States.
In June 2013, Bouterse and a co-defendant, Edmund Quincy Muntslag, met in Bouterse’s office in Suriname with confidential sources (the CSs) working with the Drug Enforcement Administration (DEA) to discuss importing cocaine into the United States using commercial airline flights. During the meeting, Bouterse showed the CSs a rocket launcher and a kilogram of cocaine.
Approximately one month later, Bouterse and Muntslag worked to provide transportation and security for cocaine being sent through Suriname to the United States. As a test run, Bouterse and Muntslag sent 10 kilograms of cocaine on a commercial flight departing from Suriname. Bouterse personally verified the arrangements for the 10-kilogram cocaine shipment in a text message. The cocaine was intercepted by law enforcement officials after it departed Suriname.
In July 2013, Bouterse met with one of the CSs to discuss opening Suriname to the CSs’ purported Hezbollah associates.
Later that month, Bouterse met in Europe with one of the CSs and with two other men who purported to be associated with Hezbollah. During this meeting, Bouterse discussed initially hosting 30 to 60 Hezbollah members in Suriname for training and operations. He also indicated that he wanted a Hezbollah cell in Suriname to act, in part, as a personal armed force. Bouterse confirmed his understanding that the purported Hezbollah operatives would operate in South America against American targets, and he agreed to supply Surinamese passports to the operatives and to assist with their applications for visas to travel from South America into the United States. In addition, in response to a request for surface-to-air missiles and rocket-propelled grenades, Bouterse stated that he would need “two months” and that he would provide a list of what he could supply. Finally, at the July 2013 meeting in Europe, Bouterse agreed to create a false Surinamese passport for one of the purported Hezbollah operatives so that Bouterse and the Hezbollah operative could travel to Suriname to inspect the facilities that Bouterse had agreed to prepare for the Hezbollah contingent.
At a subsequent meeting in August 2013, Bouterse delivered a Surinamese passport with false identifying information to a purported Hezbollah operative. As had been discussed at the July 2013 meeting in Europe, the purported Hezbollah operative was to use the fraudulent passport to travel to Suriname. Bouterse indicated that everything was ready in Suriname for the arrival of the purported Hezbollah members, and that some “toys” – a code-word for weapons – would be available for inspection.
Following this meeting, Bouterse was arrested by Panamanian law enforcement and transferred to the custody of the DEA.
* * *
On Aug. 29, 2014, Bouterse pleaded guilty to attempting to provide material support to Hezbollah, a foreign terrorist organization; conspiring to import five kilograms or more of cocaine into the United States; and using and carrying, or aiding and abetting the use and carrying of, a firearm during and in relation to a drug-trafficking crime. In addition to his prison term, Bouterse, 42, a citizen of Suriname, was ordered to pay a $300 special assessment fee.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the outstanding efforts of the DEA’s Special Operations Division. Assistant Attorney General Carlin and U.S. Attorney Bharara also thanked the DEA’s Miami Field Division, Panama City Country Office, Port-of-Spain Country Office and Bogota Country Office; the Government of the Republic of Panama; and the U.S. Department of Justice’s Office of International Affairs
This case is being prosecuted by Assistant U.S. Attorneys Michael D. Lockard, Adam Fee, Michael Ferrara and Edward Y. Kim of the Southern District of New York and Trial Attorney Andrew Sigler of the Justice Department’s National Security Division.
Socorro County Man Sentenced to Five Years in Prison for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Dario Olivas, 24, of Veguita, N.M., was sentenced today in federal court in Santa Fe, N.M., to 60 months in prison followed by four years of supervised release for his methamphetamine trafficking conviction.
Olivas was arrested on Aug. 9, 2013, on an indictment charging him with two counts of distributing methamphetamine in Valencia County, N.M., on May 14, 2013 and July 8, 2013.
Olivas pled guilty on March 11, 2014, to one count of methamphetamine distribution. In entering his guilty plea, Olivas admitted that on May 14, 2013, he sold approximately 30.5 gross grams of methamphetamine to an undercover DEA task force officer for $1,100.00 at a restaurant in Belen, N.M. Olivas further admitted that on July 8, 2013, he sold approximately 88.8 gross grams of methamphetamine to the same undercover DEA task force officer for $3,300.00 at a restaurant in Belen.
This case was investigated by the Albuquerque office of the DEA and was prosecuted by Assistant U.S. Attorneys Samuel A. Hurtado and Stephen R. Kotz.
Shelton Man Sentenced to 70 Months in Federal Prison for Distributing HeroinRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JERMAINE BUCHANAN, also known as “Hot Main,” 20, of Shelton, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 70 months of imprisonment, followed by five years of supervised release, for distributing heroin.
According to court documents and statements made in court, in January 2012, the FBI Bridgeport Safe Streets Task Force, Bridgeport Police Department and Connecticut State Police Statewide Narcotics Task Force began an investigation into narcotics trafficking and violent criminal activity in and around the Trumbull Gardens housing complex in Bridgeport. The investigation revealed that Ronell Hanks, also known as “Biz” and “Ace,” headed an organization that sold heroin, cocaine and crack cocaine 24-hours a day, seven days a week. BUCHANAN received heroin from Hanks and sold the drug to his own customer base.
During the course of the investigation, investigators seized approximately one kilogram of heroin, one-half kilogram of crack cocaine, approximately $100,000 in cash, three vehicles, jewelry, nine firearms, and more than 200 rounds of ammunition.
BUCHANAN was arrested December 5, 2013. A search of BUCHANAN’s residence at the time of his arrest revealed a Glock 26 handgun, an empty magazine for another firearm, a quantity of heroin packaged for distribution and five mobile phones.
On December 18, 2013, a grand jury in Bridgeport returned an indictment charging BUCHANAN, Hanks and 12 other individuals with narcotics and firearms trafficking offenses.
BUCHANAN has been detained since his arrest on December 5, 2013. On August 13, 2014, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin.
Hanks pleaded guilty and, on February 26, 2015, he was sentenced to 17 years of imprisonment.
This matter is being investigated by the FBI’s Bridgeport Safe Streets Task Force, in coordination with the Bridgeport Police Department, the Trumbull Police Department and the Connecticut State Police Statewide Narcotics Task Force. The Bureau of Alcohol, Tobacco, Firearms and Explosives, and the State’s Attorney for the Judicial District of Fairfield are assisting this investigation and prosecution. The case is being prosecuted by Assistant U.S. Attorneys Tracy Lee Dayton and Rahul Kale.
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(203) 821-3722 [email protected]San Antonio Businessman Arrested in Connection with Multi-Million Dollar Investment ScamRead the Press Release
In San Antonio today, FBI agents arrested 53-year-old Armando Jesus Hernandez Leal of Shavano Park, TX, in connection with a multi-million dollar investment fraud scam announced Acting United States Attorney Richard Durbin, Jr., FBI Special Agent in Charge Christopher Combs, San Antonio Division and Internal Revenue Service-Criminal Investigation Special Agent in Charge William Cotter.
A federal criminal complaint unsealed today charges Hernandez with one count of wire fraud. According to the complaint, Hernandez was responsible for managing an estimated $66 million investment portfolio of a Mexican businessman and his family. The complaint alleges that from 2005 to 2014, Hernandez had not invested his clients’ money like he had agreed to, but instead spent their money to purchase homes, planes and other assets for his personal use.
Hernandez had his initial appearance in federal court this morning and detained without bond pending a detention hearing scheduled for 3:30pm on March 13, 2015, before United States Magistrate Judge John Primomo. Upon conviction, Hernandez faces up to 20 years in federal prison.
This investigation was conducted by special agents from the FBI and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Greg Surovic is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Raleigh County man sentenced to four years for federal child pornography crimeRead the Press Release
SOPHIA, W.Va. – David Alan Hunt, a 33 year-old Raleigh County man, was sentenced to today to serve four years in federal prison followed by five years of supervised release for possessing child pornography, announced United States Attorney Booth Goodwin. The sentence was handed down by United States District Judge Irene C. Berger.
Hunt previously admitted that on March 23, 2012, he possessed approximately 60 images of child pornography, including sexually explicit images of prepubescent minors and minors engaged in sexual acts. The child pornography was discovered on Hunt’s computers and a computer disc, both of which were located at his home in Sophia, West Virginia. The investigation also revealed that Hunt received and shared child pornography by using a file sharing network that allows users to download files from computers around the world.
U.S. Attorney Goodwin stated, “The exploitation of innocent children is a heinous crime. Child Pornography has a highly destructive impact on the most vulnerable segment of society and my office will work diligently to ensure that individuals like Mr. Hunt are prosecuted to the fullest extent of the law.”
The West Virginia Internet Crimes Against Children Task Force conducted the investigation. Assistant United States Attorney Lisa Johnston handled the prosecution.
This case was prosecuted as part of United States Attorney Goodwin’s ongoing initiative to combat child sexual exploitation and abuse in the Southern District of West Virginia.
Pottstown Pair Charged in Attempted Bank RobberyRead the Press Release
James Garner, 30, and Ruben Marshall, 48, both of Pottstown, PA, were charged today with conspiracy to commit armed bank robbery, and possession of a firearm in furtherance of a crime of violence, announced United States Attorney Zane David Memeger. Garner is also charged with attempt to commit armed bank robbery.
According to the indictment, on February 6, 2015, Garner approached Person #1 about robbing the Apex Community Federal Credit Union in Stowe, PA. On February 10, 2015, Marshall allegedly met with Garner to discuss details of the robbery plan. The indictment further alleges that on February 12, 2015, Garner assembled the tools necessary to rob the bank - including masks, two-way radios, gloves, and a handgun - but was arrested that night by the FBI before he could complete the robbery the following morning, as planned.
If convicted, each defendant faces a maximum of life in prison, with a minimum mandatory sentence of five years in prison, a $250,000 fine and at least five years of supervised release.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Joseph A. LaBar.
Pine Ridge Man Acquitted of ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man was acquitted of Theft of Government Property and False Statement, as a result of a federal jury trial in Rapid City, on February 27, 2015.
Daigre Douville, age 51, was indicted by a federal grand jury on March 18, 2014.
The charges alleged that he embezzled, stole, and converted overtime payments in excess of $1,000, and falsified a government document.
The investigation was conducted by Office of Inspector General, U.S. Department of the Interior. The U.S. Attorney's Office prosecuted the case.
Payroll Company Owner Sentenced for Stealing $1.2M in IRS Taxes from Small Businesses and Municipal Water SupplyRead the Press Release
PROVIDENCE, R.I. – Warren Hebert, 67, of Barrington, R.I., owner of Checkmaster Payroll Services, has been sentenced to 24 months in federal prison and ordered to pay $1.1 million in restitution to seven businesses and the Seekonk, Mass., Water District that he defrauded when he diverted federal payroll taxes he collected from them that were to have been paid to the IRS, announced United States Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of IRS Criminal Investigation.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Hebert to serve two years supervised release and to perform 200 hours of community service upon completion of his prison term. Hebert pleaded guilty on October 20, 2014, to eight counts of wire fraud and one count of impeding the administration of the Internal Revenue Code.
At the time of his guilty plea, Hebert admitted to the court that beginning in as early as April 2009 and continuing through at least October 2011, he diverted for his own personal use approximately $1,266,680 in funds due to the IRS that he withdrew from at least seven small businesses operating in Rhode Island and Massachusetts, which were to have been used to pay the clients’ federal employment taxes. In some instances Hebert used some of the funds to pay additional tax liabilities, interest and penalties of other clients whose tax returns he had previously failed to accurately prepare, file and pay.
Among the small businesses defrauded by Hebert were a nursery school, a local gym and a family owned moving company. Hebert also admitted to diverting funds from the Seekonk, Mass., Water District, a municipal water agency.
United States Attorney Peter F. Neronha commented, “What makes the defendant’s conduct particularly appalling is that, at bottom, he stole money from several small businesses, as well as a municipality. Such entities, private and public, often operate near the margin, where every dollar counts. The defendant violated the trust placed in him and, out of greed, diverted money that these entities had worked so hard to generate and set aside to pay their fair share of taxes. A meaningful prison sentence is more than appropriate.”
“IRS Criminal Investigation takes employment tax violations very seriously," said William P. Offord, Special Agent in Charge of the Boston field office of IRS Criminal Investigation. “Mr. Hebert’s tax fraud is particularly egregious because his clients entrusted his business, Checkmaster Payroll Services, to collect and timely remit their employees’ payroll taxes.” Instead, Mr. Hebert diverted over $1.2 million of these taxes for his personal benefit, which may result in the loss of future social security or Medicare benefits for the victims.”
The case was prosecuted by Assistant U.S. Attorney John P. McAdams.
The matter was investigated by IRS Criminal Investigation, with the assistance of the FBI, Rhode Island FDA Task Force, Barrington Police and Rhode Island State Police.###
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]Palm Coast Man Arrested and Charged with Receiving and Possessing Child PornographyRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today the return of an indictment charging Gioacchino “Jack” Campo (56, Palm Coast) with two counts of receiving child pornography and one count of possessing child pornography. If convicted, he faces a mandatory minimum penalty of 5 years, up to a maximum of 20 years, in federal prison for each receipt count and up to 10 years in prison for the possession count. Campo was arrested at his home on March 9, 2015.
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 investigated by the Federal Bureau of Investigation, Jacksonville and Daytona Beach Offices. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another 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.
Oregon Man Pleads Guilty to Failure to Register as Sex OffenderRead the Press Release
St. Croix, USVI – Joe Dale Loomis, 57, of Oregon, pleaded guilty today in District Court on St. Croix to one count of Failure to Register as a Sex Offender, United States Attorney Ronald W. Sharpe announced.
As part of his plea, Loomis admitted that he was convicted of Sodomy in the First Degree, a sex offense involving a minor in Oregon in 1991. On or about October 22, 2013, Loomis traveled from Oregon to St. Croix. From that time through August 19, 2014, Loomis knowingly failed to register as a sex offender on St. Croix in violation of the Sex Offender Registration and Notification Act (SORNA).
Loomis is facing a maximum sentence of 10 years in prison, and a $250,000 fine. No sentencing date has been set.
The case was investigated by the United States Marshals Service, and is being prosecuted by Assistant U.S. Attorneys Rami S. Badawy and Everard E. Potter.
Oneida County Man Sentenced for Mail TheftRead the Press Release
SYRACUSE, NEW YORK – On March 9, 2015, MICHAEL OLIVER (34) of Waterville, New York, was sentenced in United States District Court following his earlier plea of guilty to two counts of obstructing the United States mail, in violation of 18 U.S.C. § 1701.
United States Magistrate Judge David E. Peebles sentenced OLIVER to one year of Probation and 25 hours of community service. Additionally, the judge imposed a $250 fine and ordered OLIVER to pay $1,155.95 in restitution to the known victims.
These charges stemmed from an investigation by the U.S. Postal Inspection Service and the Office of Inspector General of the U.S. Postal Service. The investigation revealed that OLIVER obstructed the passage of the mail by opening envelopes addressed to others and stealing the contents of that mail, all while employed as a highway contract driver for the Postal Service in Oneida and Chenango counties. Between May and September 2014, OLIVER stole greeting cards, cash, and gift cards, among other things, from at least 160 different pieces of mail. In advance of sentencing, thirty-one victims submitted victim-impact statements for the court to consider in imposing OLIVER’s sentence.
This case was prosecuted by Assistant United States Attorney Michael F. Perry.
For additional information, contact Executive Assistant U.S. Attorney John G. Duncan at 315- 448-0672.
Nurse Charged with Health-Care Fraud Scheme for Billing Medicare for Unnecessary ServicesRead the Press Release
CHICAGO — A registered nurse was arrested today on a federal health care fraud charges. The nurse defendant, JAMES ADEMIJU, who operates two nursing agencies, Adonis Inc. and BestMed-Care Services Ltd., was arrested this morning and charged with health care fraud in a criminal complaint. The complaint alleges a scheme to defraud Medicare by billing for unnecessary nursing services that were provided to patients who were not confined to the home and who were obtained via illegal payments for patient referrals. For over three years, beginning in 2011, a total of approximately $5 million was paid to the two agencies by Medicare for services rendered to patients deemed to be homebound.
Ademiju, 41, of Matteson, a licensed registered nurse in Illinois since 2006, is scheduled to appear at 3:00 p.m. today before U.S. Magistrate Judge Mary M. Rowland in U.S. District Court.
Simultaneous with Ademiju’s arrest, agents from the FBI, the U.S. Department of Health and Human Services Office of Inspector General, and other law enforcement agencies executed search warrants at the offices of Adonis Inc., and BestMed-Care Services Ltd., both located in Dolton. Warrants were also executed to seize alleged fraud proceeds maintained in bank accounts maintained by Adonis Inc. and BestMed-Care Services Ltd.
The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG. The Railroad Retirement Board Office of Inspector General is also participating in the investigation.
According to a 56-page affidavit in support of the arrest, search and seizure warrants, the charge against Ademiju arises from the investigation of Suburban Home Physicians, a Schaumburg company that did business as Doctor At Home. In a related case, an indictment was returned last month against a doctor, Alan Newman, and a nurse, Diana Jocelyn, at Suburban Home Physicians. According to the affidavit unsealed today, Ademiju works at two nursing agencies, Adonis, as the office manager, and BestMed-Care Services, as the administrator. Between February 2011 and December 2014, Medicare paid Adonis approximately $1.9 million and BestMed-Care Services approximately $3.1 million for skilled-nursing services.
Adonis and BestMed-Care Services allegedly obtained many patients from a marketing company which claimed to offer "free" nursing services to Medicare beneficiaries. Adonis and BestMed-Care Services paid hundreds of dollars per patient to a marketing company which would refer patients to Adonis and BestMed-Care Services.
According to the affidavit, Adonis and BestMed-Care Services referred many patients to physicians at Suburban Home Physicians, even when patients had primary-care physicians and continued to see those primary-care physicians. Physicians at Suburban Home Physicians then certified the patients for skilled-nursing services, even when patients did not qualify for skilled-nursing services that were covered by Medicare.
Also described in the complaint, nursing assessments signed by Ademiju contained false information about patients. For example, Ademiju signed nursing assessments that falsely stated that patients were homebound and that falsely stated that patients needed assistance with activities of daily living such as dressing and bathing themselves. Adonis and BestMed-Care Services then billed Medicare for long periods in part by periodically discharging patients, claiming the patients no longer needed services, and then re-admitting the same patients a short time later without telling the patients that they had been discharged or re-admitted. In some instances, a patient was discharged from one agency and then admitted at the other agency in less than a week, and sometimes even on the same day.
One patient, Patient LD, who received nursing services from Adonis and BestMed-Care Services and was certified for such services by a physician at Suburban Home Physicians, told law enforcement that she began receiving nursing services after getting a call out of the blue and being told that a physician and nurse would come visit her. Patient LD said that she was not confined to the home during the time that she received nursing services, and said that the nursing visits were "worthless." Medicare paid Adonis and BestMed-Care Services more than $11,000 for the nursing services provided to Patient LD.
Another patient described in the complaint, Patient JS, who received services from Adonis and BestMed-Care Services and was certified for such services by a physician at Suburban Home Physicians, told law enforcement that he realized that the nursing visits were unnecessary and eventually stopped them. Patient JS told law enforcement that he felt bad for having allowed the visits to go on as long as he had even when he knew they were unnecessary. Medicare paid Adonis and BestMed-Care Services more than $13,000 for the nursing services provided to Patient JS.
The government is being represented by Assistant U.S. Attorney Stephen Chahn Lee.
Ademiju was charged with one count of health care fraud and faces a maximum penalty of 10 years in prison and a $250,000 fine or a fine totaling twice the gain or loss, whichever is greater, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint and an indictment are not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The Medicare Fraud Strike Force began operating in Chicago in February 2011, and consists of agents from the FBI and HHS-OIG, working together with prosecutors from the U.S. Attorney’s Office and the Justice Department’s Fraud Section. The strike force is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Scores of defendants have been charged locally in health care fraud cases since the strike force began operating in Chicago.
To report health care fraud to learn more about the Health Care Fraud Prevention & Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Complaint
Notice of Court ProceedingsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
When: Thursday, March 12, 2015 at 10:00 a.m. Where:
Columbia, South Carolina
Matthew J. Perry, Jr., Courthouse
901 Richland Street, Courtroom #4
Columbia, SC 29201
Additional Details: This is a joint investigation of the FBI, SLED, the South Carolina Attorney General’s Office and the United States Attorney’s Office into public corruption. The case is being prosecuted by Assistant U.S. Attorneys Jim May and Jay Richardson of the Columbia Office. #####Norwalk Man Who Illegally Sold Firearms Sentenced to More Than 3 Years in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that RAUL CABAN-MARTES, 22, of Norwalk, was sentenced yesterday by U.S. District Judge Michael P. Shea in Hartford to 40 months of imprisonment, followed by three years of supervised release, for illegally selling firearms.
According to court documents and statements made in court, between August 2013 and January 2014, CABAN-MARTES and others sold five firearms, ammunition and a bullet proof vest to a convicted felon. CABAN-MARTES knew that the purchaser intended to sell the firearms to others in Norwalk.
CABAN-MARTES has been detained since his arrest on July 2, 2014. On December 5, 2014, he pleaded guilty to one count of conspiracy to engage in the business of dealing in firearms without a license.
In December 2014, while he was in federal custody, CABAN-MARTES instructed family members to conceal another firearm so that he could sell the weapon upon his release.
This matter was investigated by the Norwalk Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U.S. Attorney Vanessa Richards.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Nevada Man Sentenced to 8 Years in Prison for Threatening to Kill a Federal Law Enforcement Officer -Defendant Previously Was Convicted of Similar Crime-Read the Press Release
WASHINGTON –Jeffrey Henry Williamson, 49, of Las Vegas, Nev., was sentenced today to 8 years in prison for making threats against a federal law enforcement officer, U.S. Attorney Ronald C. Machen Jr. and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, announced.
Williamson was found guilty of the charge by a jury in December 2014, following a trial in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Rosemary M. Collyer. Upon completion of his prison term, Williamson will be placed on three years of supervised release.
According to the government’s evidence, Williamson called the 911 Office of Unified Communications, in Washington, D.C., on June 19, 2014, and during an approximately 4 ½-minute recorded call, threatened to kill an FBI Special Agent who works in Denver. The evidence presented at trial established that Williamson made the threats in retaliation for an investigation of the defendant that the agent conducted in 2005 and 2006. That investigation involved harassing and threatening phone calls that Williamson was making to the Denver FBI field office and federal judges in Denver.
In 2008, Williamson was prosecuted in the Southern District of Texas for making threatening communications there. He was found guilty following a trial and sentenced to 42 months in prison, to be followed by three years of supervised release. However, Williamson kept up a pattern of harassing communications directed at federal officials. He completed his sentence and was released, but the Court revoked his supervised release. He then completed his second period of incarceration on Nov. 29, 2013. He arrived in Washington, D.C., in May 2014.
In announcing the sentence, U.S. Attorney Machen and Assistant Director in Charge McCabe commended those who investigated the case from the FBI’s Violent Crimes Task Force and the U.S. Marshals Service. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Litigation Technology Specialist Leif Hickling; Criminal Investigators Zachary McMenamin and Durand Odom; Paralegal Specialists Jessica Moffatt and Michelle Holland, and Legal Assistant Donice Adams. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Frederick Yette, who prosecuted the case.
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Nebraska Man Sentenced for Misprision of A Felony and Rapid City Woman Sentenced for Assault Resulting in Substantial Bodily InjuryRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lincoln, Nebraska, man convicted of Misprision of a Felony and a Rapid City, South Dakota, woman convicted of Assault Resulting in Substantial Bodily Injury were sentenced on March 9, 2015, by U.S. District Judge Roberto A. Lange.
Gilbert Young, age 43, was sentenced to 36 months in custody to be served consecutively to his Cherry County, Nebraska case, one year of supervised release, $32,881.66 in restitution, jointly and severally with his co-defendant, and a $100 special assessment to the Federal Crime Victims Fund.
Terri Covey a/k/a Terry Covey, age 41, was sentenced to 12 months in custody, two years of supervised release, $32,881.66 in restitution, jointly and severally with her co-defendant, and a $100 special assessment to the Federal Crime Victims Fund.
Young and Covey were indicted by a federal grand jury on May 13, 2014. Young pled guilty on December 16, 2014, and Covey pled guilty on December 15, 2014.
In February 2013, Covey and Young were dating and living together on the Rosebud Sioux Indian Reservation in South Dakota. On or about February 16, 2013, shortly after midnight, Covey left a child victim in the care of Young. At some point while in Young’s care, the victim suffered an acceleration/deceleration injury that caused the victim to have a severe seizure. Young witnessed the child victim having a seizure, but did not call 911 to obtain medical care for the child. Young informed Covey that something was wrong with the victim at 8:00 a.m., but Covey did not seek care for the victim for another two and a half hours. The child’s injuries worsened because of the delay in seeking medical care.
In the weeks before the injury, Covey grabbed the child’s face and caused bruising on the child’s face.
Young had knowledge of the abuse of the child and concealed the same from law enforcement authorities.
This case was investigated by Rosebud Sioux Tribe Law Enforcement Services and the Federal Bureau of Investigation. Assistant U.S. Attorney Tim Maher prosecuted the case.
Both Defendants were immediately turned over to the custody of the U.S. Marshals Service.
More Than 50 Guns Seized and Four Men Charged in Illegal Firearms Trafficking OperationRead the Press Release
SAN DIEGO – Four men appeared in federal court today and yesterday to face charges that they participated in a scheme to manufacture and traffic in firearms illegally, in some instances by assembling untraceable assault-style weapons in a defendant’s home and then selling the guns for thousands of dollars.
Federal, state and local law enforcement officials served multiple search warrants and made the arrests Friday at locations in Bonsall and Escondido and Temecula. During the searches and throughout the investigation, agents seized more than 50 firearms, including silencers, a short-barreled shotgun, unfinished lower receivers and AR-15-style homemade assault rifles. Some of the firearms were stolen, or had obliterated serial numbers, or both. Agents also found thousands of rounds of ammunition.
Christian Romero, Clay Bautista-Marquez, Ruben Tovar-Ordonez and Matthew Nutt were taken into custody separately on Friday. Romero and Nutt are charged via complaint with engaging in the business of manufacturing and dealing in firearms without a license; Bautista and Tovar are charged via indictment with unlawful dealing in firearms.
A fifth man, Michael Martin, was also arrested and charged via complaint with possession of a firearm – specifically two silencers - not registered to him in the National Firearms Registration and Transfer Record.
All but Martin were held without bond, pending upcoming detention hearings. Martin was to be released on a $20,000 bond.
During the searches Friday, agents also found numerous unfinished lower receivers commonly known as ULRs. ULRs can be lawfully purchased and sold by individuals who do not possess a Federal Firearms License because they are not considered firearms. Manufacturers are not required to mark ULRs with make, model and serial number. They can be manufactured into completed receivers, which are classified as firearms under federal law. An individual engaged in the business of manufacturing completed receivers or dealing in completed receivers is required to have a Federal Firearms License. Otherwise, doing so is a violation of federal law.
“Firearms traffickers who fly under the radar of law enforcement, assembling dangerous and untraceable assault-style weapons in the privacy of their homes, are a significant challenge and a major concern to me,” said U.S. Attorney Laura Duffy. “Because of this investigation, scores of these guns have been removed from the underground market and our communities are safer as a result.”
Many of the assault rifles seized by agents were manufactured from unfinished lower receivers. ATF Special Agent in Charge Carlos A. Canino stated, “These weapons are particularly dangerous because they bear no manufacturer markings or serial numbers making them virtually impossible to trace.” Canino added, “When law enforcement officials join forces in this type of investigation, the result is a significant disruption in violent crime.”
DEFENDANT Case Number: 15MJ0740 Matthew Nutt Age: 29 Escondido, California CHARGESEngaging in the Business of Dealing in Firearms without a License, in violation of 18 USC 922(a)(1)(A)
Maximum Penalties: Five years imprisonment, a fine of not more than $250,000, and a term of supervised release of not more than 3 years.
DEFENDANT Case Number: 15MJ0721 Christian Romero Age: 21 Bonsall, California CHARGESEngaging in the Business of Dealing in Firearms without a License, in violation of 18 USC 922(a)(1)(A)
Maximum Penalties: Five years imprisonment, a fine of not more than $250,000, and a term of supervised release of not more than 3 years.
DEFENDANTS Case Number: 14CR3360 Clay Bautista-Marquez Age: 30 Bonsall, California Ruben Tovar-Ordonez Age: 45 Temecula, California CHARGESUnlawful Dealing in Firearms, in violation of18 USC 922(a)(1)(A). Maximum Penalties Five years imprisonment, a fine of not more than $250,000, and a term of supervised release of not more than 3 years.
DEFENDANT Case Number: 15mj0741 Michael Martin Age: 38 Bonsall, California CHARGESPossession of a Firearm not Registered to him in the National Firearms Registration and Transfer Record, 26 U.S.C. § 5861(d). Maximum Penalties: Ten years in prison, $10,000 fine.
INVESTIGATING AGENCIESDrug Enforcement Administration
Bureau of Alcohol, Tobacco, Firearms and Explosives
Internal Revenue Service
Bureau of Land Management
San Diego Police Department
Immigration and Customs Enforcement –Enforcement and Removal Operations
United States Marshal’s Service
San Diego Sheriff’s Department*A complaint is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Montana Tribes Selected as Pilot Project for Prosecuting Domestic Violence CrimesRead the Press Release
HELENA – The United States Attorney’s Office for the District of Montana announces that the Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation have been selected by the Department of Justice as a Pilot Project for implementation of the Violence Against Women Act (VAWA). Starting March 6, 2015, the Fort Peck tribal court can now exercise special criminal jurisdiction over certain crimes of domestic and dating violence, regardless of the defendant’s Indian or non-Indian status. Fort Peck is one of only five tribes nationwide to be selected for Pilot Project status.
“The U.S. Attorney’s Office congratulates Fort Peck for its hard work in earning Pilot Project status,” said Montana U.S. Attorney Michael Cotter. “This is a significant win for public safety and tribal sovereignty for the Assiniboine and Sioux Tribes.” The tribes engaged in an extensive application process to ensure adequate safeguards are in place to fully protect defendants’ rights, such as the right to an attorney.
"From the beginning of the VAWA tribal working group, we wanted to see Fort Peck succeed in the pilot because it is a large rural reservation with a larger criminal case load,” said John Dossett, General Counsel for the National Congress of American Indians. “They have provided a very good model for other large tribes and it will increase justice and safety for those reservations. Hats off to Fort Peck."
Other qualifying tribes in Montana and throughout the country also have the opportunity to expand special jurisdiction over certain domestic and dating violence crimes when VAWA took full effect on Saturday. Nothing in VAWA changes the obligation of federal authorities to prosecute violent crime in Indian Country. For more information about VAWA and the Pilot Projects, go to: http://www.justice.gov/tribal.
Members of International Conspiracy Sentenced to Combined 60 Years for Multi-Million Dollar Internet Fraud SchemeRead the Press Release
LEXINGTON — The perpetrators of an international wire fraud scheme, involving the fraudulent sale of automobiles over the internet, have been sentenced to combined terms of imprisonment totaling more than 60 years.
On Monday, U.S. Senior District Judge Joseph M. Hood sentenced the last of ten defendants involved in the criminal conspiracy. The scheme, which operated in Lexington and other places, originated in Eastern Europe, where conspirators used legitimate websites, such as eBay.com and Autotrader.com, to advertise non-existent vehicles for sale. The advertisements would list the used-vehicles for a competitive price. Once contacted by potential buyers, the conspirators would negotiate the price with victims, via telephone and e-mail.
After an agreement to purchase a vehicle was reached, conspirators instructed victims to wire the purchase funds to United States-based members of the conspiracy, through Western Union, MoneyGram, or a bank wire transfer. The conspirators would then pick up the funds using various forms of fraudulent identification. The United States-based conspirators kept some of the proceeds but wired the rest of the money to the international members of the conspiracy.
Within the United States, the conspiracy operated in Georgia, Ohio, Kentucky, Tennessee, Indiana, and Michigan. In all, more than 550 victims of the scheme, whose losses exceed $2,000,000, have been identified.
The defendants sentenced include Nicholas Corey Garner and Petrica Octavian Stoian. Garner was a leader of the conspiracy who recruited many of the United States-based defendants to join the scheme; he received 240 months in prison. Stoian is a Romanian national, who coordinated several aspects of the international portion of the conspiracy. He admitted to opening bank accounts in Hungary, using false identities, to receive proceeds of the fraud. In June of 2013, the United States extradited Stoian from Hungary, to face the fraud charges in this case. Stoian received 97 months in prison.
Other members of the conspiracy have been sentenced as follows: Dwayne Hardy, 72 months; Nathaniel Garner, 70 months; Harold Smith, 60 months; Brooks Sowell, 60 months; Sabrina Carmichael, 60 months; April Abrams, 36 months; and Eli Holley, 36 months (sentenced Monday). Jelahni Williams, who only participated in the conspiracy for three days, was sentenced to time-served.
Under federal law, each defendant must serve at least 85 percent of their prison sentence and will be under the supervision of the United States Probation Office for three years following their release.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Craig Hutzell, Acting Special Agent in Charge of the U.S. Secret Service, jointly announced the sentences.
The investigation was conducted by the U.S. Secret Service and Assistant U.S. Attorney Erin M. Roth prosecuted the case on behalf of the federal government.
Medicare Beneficiary Pleads Guilty to Receiving Kickbacks in Health Care MattersRead the Press Release
PHILADELPHIA – Craig Brown, 46, of Philadelphia, PA, pleaded guilty today to receiving kickbacks and making false statements in a health care matter, announced United States Attorney Zane David Memeger. The defendant faces a maximum possible sentence of 25 years in prison, three years of supervised release, a $1.25 million fine, a $500 special assessment, and an order of restitution. U.S. District Court Judge William H. Yohn, Jr. scheduled a sentencing hearing for June 10, 2015.
In July 2010, Feda Kuran, charged elsewhere, began operating Brotherly Love Ambulance, Inc. with a co-schemer. In approximately May 2011, Craig Brown began receiving transport to dialysis by Brotherly Love, even though he could have been transported safely by means other than ambulance and was, therefore, not eligible for ambulance service under Medicare and Medicaid requirements. Shortly thereafter, Brown began transporting himself in his personal vehicle once more, but he permitted Brotherly Love to bill for the transports as though he was being transported by ambulance. Brown accepted monthly payments to induce him to continue to ride with Brotherly Love and, later, to induce him to allow Brotherly Love to bill for his transport even though he was driving himself. Brown was also given payments for referring others to Brotherly Love and for transporting other purported patients of Brotherly Love in his personal vehicle even though Brotherly Love was billing for ambulance transports for those individuals. In addition, Brown signed ambulance “run sheets” indicating that he was being transported by ambulance when, in fact, he was transporting himself to and from dialysis.
As a result of his actions and those of Brotherly Love, the Medicare program paid more than $18,000 in inappropriate bills. As a result of the overall scheme at Brotherly Love, the Medicare program was billed for more than $4.9 million and paid more than $2 million in inappropriate bills. Kuran was sentenced in November 2014 to 64 months in prison.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Labor Office of the Inspector General. It is being prosecuted by Assistant United States Attorneys Paul W. Kaufman and Mary Crawley.
McNeil-PPC Inc. Pleads Guilty in Connection with Adulterated Infants' and Children's Over-the-Counter Liquid DrugsRead the Press Release
McNeil-PPC Inc. entered a guilty plea in Federal District Court in Philadelphia today to one count of an information charging the company with delivering for introduction into interstate commerce adulterated infants’ and children’s over-the-counter (OTC) liquid medicines, the Department of Justice announced today. As part of the criminal resolution, McNeil, a wholly owned subsidiary of Johnson & Johnson, agreed to pay a criminal fine of $20 million and forfeit $5 million.
Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division and First Assistant U.S. Attorney Louis D. Lappen of the Eastern District of Pennsylvania today announced the filing of a criminal Information against McNeil for delivering for introduction into interstate commerce infants’ and children’s liquid OTC drugs that were adulterated. According to the criminal charge, the infants’ and children’s liquid medicines were adulterated because they were not manufactured, processed, packed or held in conformance with current Good Manufacturing Practices (cGMP), in violation of the federal Food, Drug and Cosmetic Act (FDCA).
The U.S. District Court for the Eastern District of Pennsylvania accepted McNeil’s guilty plea.
In addition to McNeil’s guilty plea, McNeil remains subject to a permanent injunction entered by the U.S. District Court in 2011, requiring the company, among other things, to make remedial measures before reopening its manufacturing facility in Fort Washington, Pennsylvania.
“McNeil’s failure to comply with current good manufacturing practices is seriously troubling,” said Acting Assistant Attorney General Mizer. “The Department of Justice will continue to be aggressive in pursuing and punishing companies such as McNeil that disregard a process designed to assure quality medicines, especially OTC drugs for infants and children.”
“The law requires that drugs be produced under the most rigorous of quality standards,” said First Assistant U.S. Attorney Lappen. “When companies fail to exercise the vigilance that the law demands, they will held be accountable. Drug companies should be aware that failing to adhere to good manufacturing practices subjects them to penalties and prosecution.”
According to the information, the OTC liquid drugs manufactured by McNeil at its Fort Washington facility, including Infants’ and Children’s Tylenol and Infants’ and Children’s Motrin, were bottled on four lines of machinery dedicated to liquid formulations. As alleged in the information, on or about May 1, 2009, McNeil received a complaint from a consumer regarding the presence of “black specks in the liquid on the bottom of the bottle” of Infants’ Tylenol. According to the information, the foreign material was later identified as including nickel/chromium-rich inclusions, which were not intended ingredients in this OTC liquid drug. In connection with receiving this consumer complaint, McNeil did not initiate or complete a Corrective Action Preventive Action (CAPA) plan, as alleged in the charging document.
The information alleges numerous other instances in which McNeil found metal particles in bottles of Infants’ Tylenol at its Fort Washington facility but failed to initiate or complete a CAPA. According to the information, during a 2010 Inspection of McNeil’s Fort Washington facility, the U.S. Food and Drug Administration (FDA) asked McNeil for a list with all non-conformances for particles and the associated OTC drug batches that had occurred since an FDA inspection in 2009. As noted in the information, this document revealed 30 batches of OTC liquid drugs, including Infants’ Tylenol, Children’s Tylenol, and Children’s Motrin. During the 2010 inspection, the FDA asked McNeil for the CAPA plan covering the particles and foreign material found in the Infants’ and Children’s OTC drugs, and a McNeil employee confirmed that McNeil did not have such a CAPA plan.
On or about April 30, 2010, McNeil Consumer Health Care, a division of McNeil, in consultation with the FDA, announced that the company was recalling all lots of certain unexpired Infants’ and Children’s OTC drugs manufactured at McNeil’s Fort Washington facility and distributed in the United States and other countries around the world. McNeil’s recall included, but was not limited to, Infants’ and Children’s Tylenol and Infants’ and Children’s Motrin. According to a press release issued by McNeil on April 30, 2010, some of the recalled OTC drugs “may contain tiny particles.”
The FDCA prohibits causing the introduction or delivery for introduction into interstate commerce of any adulterated drug. Under the law, a drug is adulterated if the methods used in, or the facilities and controls used for, the manufacture, processing, packing, labeling, holding and distribution of drugs and components were not in conformance with cGMP requirements for drugs. Drugs not manufactured, processed, packed, labeled, held and distributed in conformance with cGMP requirements are adulterated as a matter of federal law, without any showing of actual defect.
“Drug quality – and especially with the medicines we give our children – is of paramount concern to the FDA,” said Commissioner Margaret A. Hamburg M.D. of the FDA. “The FDA expects manufacturers to have systems in place that will quickly discover and correct problems with medical products before they enter the U.S. marketplace. Today’s guilty plea holds accountable those corporations who risk jeopardizing the public health by not adhering to the high standards set for drug manufacturers.”
Acting Assistant Attorney General Mizer and First Assistant U.S. Attorney Lappen commended the investigative efforts of the FDA’s Office of Criminal Investigations. The government is represented in this case by Assistant Director Jeffrey Steger and Trial Attorney Kathryn Drenning of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Mary Beth Leahy of the Eastern District of Pennsylvania, with the assistance of Associate Chief Counsel for Enforcement Laura Pawloski of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
McNeil-PPC Inc. Pleads Guilty in Connection with Adulterated Infants' and Children's Liquid MedicationsRead the Press Release
PHILADELPHIA – McNeil-PPC Inc. pleaded guilty today to violating the federal Food, Drug and Cosmetic Act (FDCA) with regard to infants’ and children’s liquid medications, including Infants’ Tylenol, Children’s Tylenol and Children’s Motrin. McNeil, a wholly owned subsidiary of Johnson & Johnson, was charged with delivery for introduction into interstate commerce drugs that were deemed adulterated. It is a misdemeanor. The company will pay a criminal fine of $20 million and forfeit $5 million.
The guilty plea and resolution were announced today by First Assistant U.S. Attorney Louis D. Lappen, Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, and Director George M. Karavetsos, with FDA’s Office of Criminal Investigations.
According to court documents, the OTC liquid drugs manufactured by McNeil at its Fort Washington facility were bottled on four lines of machinery dedicated to liquid formulations. On or about May 1, 2009, McNeil received a complaint from a consumer regarding the presence of “black specks in the liquid on the bottom of the bottle” of Infants’ Tylenol. The foreign material was later identified as including nickel/chromium-rich inclusions, which were not intended ingredients in this OTC liquid drug. In connection with receiving this consumer complaint, McNeil did not initiate or complete a Corrective Action Preventive Action (CAPA) plan in conformance with current Good Manufacturing Practices.
The information alleges other instances in which McNeil found metal particles in bottles of Infants’ Tylenol at its Fort Washington facility, but failed to initiate or complete a CAPA. According to the information, during a 2010 Inspection of McNeil’s Fort Washington facility, the U.S. Food and Drug Administration (FDA) asked McNeil for a list with all non-conformances for particles and the associated OTC drug batches that had occurred since an FDA inspection in 2009. As noted in the information, this document revealed 30 batches of OTC liquid drugs, including Infants’ Tylenol, Children’s Tylenol, and Children’s Motrin. During the 2010 inspection, the FDA asked McNeil for the CAPA plan covering the particles and foreign material found in the Infants’ and Children’s OTC drugs, and a McNeil employee confirmed that McNeil did not have such a CAPA plan.
On or about April 30, 2010, McNeil Consumer Health Care, a division of McNeil, in consultation with the FDA, announced that the company was recalling all lots of certain unexpired Infants’ and Children’s OTC drugs manufactured at McNeil’s Fort Washington facility and distributed in the United States and other countries around the world. McNeil’s recall included, but was not limited to, Infants’ and Children’s Tylenol and Infants’ and Children’s Motrin.
Under the law, a drug is adulterated if the methods used in, or the facilities and controls used for, the manufacture, processing, packing, labeling, holding and distribution of drugs and components were not in conformance with cGMP requirements for drugs. Drugs not manufactured, processed, packed, labeled, held and distributed in conformance with cGMP requirements are adulterated as a matter of federal law, without any showing of actual defect.
McNeil remains under a 2011 permanent injunction entered by the U.S. District Court in the Eastern District of Pennsylvania, requiring it to, among other things, make remedial measures before reopening its manufacturing facility in Fort Washington, Pennsylvania.
“The law requires that drugs be produced under the most rigorous of quality standards. When companies fail to exercise the vigilance that the law demands, they will held be accountable” said Lappen. “Drug companies should be aware that failing to adhere to good manufacturing practices subjects them to penalties and prosecution.”
“McNeil’s failure to comply with current good manufacturing practices is seriously troubling,” said Acting Assistant Attorney General Mizer. “The Department of Justice will continue to be aggressive in pursuing and punishing companies such as McNeil that disregard a process designed to assure quality medicines, especially OTC drugs for infants and children.”
“Drug quality – and especially with the medicines we give our children – is of paramount concern to the FDA. The FDA expects manufacturers to have systems in place that will quickly discover and correct problems with medical products before they enter the U.S. marketplace,” said Margaret A. Hamburg, M.D., Commissioner, U.S. Food and Drug Administration. “Today’s guilty plea holds accountable those corporations who risk jeopardizing the public health by not adhering to the high standards set for drug manufacturers.”
The case was investigated by the Food and Drug Administration Office of Criminal Investigations. It is being prosecuted jointly by Assistant U.S. Attorney Mary Beth Leahy and Jeffrey Steger, Assistant Director with the Department of Justice Civil Division’s Consumer Protection Branch. Assistance is being provided by Consumer Protection Branch Trial Attorney Kathryn Drenning and Associate Chief Counsel for Enforcement Laura Pawloski, with the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.