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Thursday 4 December 2014
Baton Rouge Man Sentenced to Fifteen Years for Child Pornography OffenseRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that Chief Judge Brian A. Jackson sentenced BRADLEY BOURQUE, age 33, of Baton Rouge, Louisiana, to a term of imprisonment of 180 months, to be followed by ten years of supervised release. The Court also ordered BOURQUE to pay $1,000 in restitution to one of his victims.
Following an online undercover investigation, on April 20, 2013, state and federal agents from the Louisiana Attorney General’s Cyber Crime Unit and the U.S. Department of Homeland Security – Homeland Security Investigations executed a search warrant on BOURQUE’S residence. During the search, agents discovered hundreds of child pornography images and videos on BOURQUE’S computer and external hard drive. Through the course of the investigation, agents determined that BOURQUE had obtained many, if not all, of these child pornography files through the Internet.
Prior to this federal conviction, BOURQUE had previously been convicted of solicitation of a minor via computer under Florida state law and indecent behavior with a juvenile under Louisiana state law.
U.S. Attorney Walt Green stated, “This conviction and sentence should signal the United States Attorney’s Office’s commitment to aggressively prosecuting individuals who actively seek out images of sexually exploited children.”
This matter was investigated by the Louisiana Attorney General’s Office – Cyber Crime Unit and the U.S. Department of Homeland Security - Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Chris Dippel.
Baton Rouge Man Indicted for Mailing Threatening Letters to Federal and State CourthousesRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today the filing of an indictment returned by a federal grand jury earlier this week that charges BRIAN CAVALIER, age 33, of Baton Rouge, Louisiana, with two (2) counts of making threats by mail, in violation of Title 18, United States Code, Section 844(e). If convicted, the defendant could face significant incarceration, fines, restitution, and supervised release following imprisonment.
The indictment alleges that on or about November 1, 2013, CAVALIER mailed a threatening letter to the United States District Court for the Middle District of Louisiana in which he falsely and maliciously conveyed that a bomb had been planted in the federal courthouse and that the bomb was set to detonate within twenty-four (24) hours. According to the indictment, approximately one month later, on or about December 2, 2013, CAVALIER mailed a second threatening letter, this time to the 19th Judicial District Court in Baton Rouge, which also falsely and maliciously conveyed that a bomb had been planted in the state courthouse and that the bomb would soon detonate.
U.S. Attorney Green stated: “My office takes threats to the safety and security of our community’s judicial and governmental offices very seriously. Specific and credible threats not only disrupt the functioning of our government and affect the daily lives of many individuals who live and work in our community, but they also divert law enforcement resources from more critical missions.”
This matter is being investigated by the Federal Bureau of Investigation, working in close coordination with the Baton Rouge Fire Department, the East Baton Rouge Parish Sheriff’s Office, the Louisiana State Police, and other law enforcement agencies. The matter is being prosecuted by Assistant United States Attorney Alan A. Stevens, who serves as a Deputy Chief of the Criminal Division.
NOTE: An indictment is an accusation by the Grand Jury. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Avondale Drug Runner Sentenced to 78 Months in PrisonRead the Press Release
U.S. Attorney Kenneth A. Polite announced that BRADLEY S. WILLIAMS, age 49, of Avondale, was sentenced today following his guilty plea to conspiracy to distribute and possession with intent to distribute heroin and cocaine hydrochloride. On August 2, 2013, WILLIAMS was one of 15 defendants charged in a 17-count superseding indictment.
U.S. District Judge Jane Triche Milazzo sentenced WILLIAMS to a 78-month term of imprisonment followed by five years of supervised release.
This case evolved from the FBI New Orleans Gang Task Force investigation into the drug trafficking activities of BYRON EVANS. The investigation revealed that EVANS supplied kilogram quantities of heroin and cocaine to distributors located in the greater New Orleans area. EVANS acquired both the heroin and cocaine that he supplied to his distributors from two Columbian foreign nationals, both illegally present in the United States, YULIAN GABRIEL VERA-OLIVEROS, a/k/a “Paco,” and EZEQUIEL PADILLA ROMERO, a/k/a “Alvaro Herney Cortes,” a/k/a “Cookie.” One of the Columbians, ROMERO also pled guilty and acknowledged supplying EVANS not less than 10 kilograms of heroin for distribution. EVANS typically had his runners transport his heroin and cocaine to New Orleans on what is known as the dollar bus/Megabus. At times during the course of the conspiracy charged WILLIAMS transported heroin from Houston to New Orleans via the Megabus. WILLIAMS also acted as a street-level distributor of heroin for EVANS and supplied customers located in the Greater New Orleans area.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney J. Collin Sims is in charge of the prosecution.
Attorney General Holder to Hold Roundtable Meetings in Five More Cities as Part of Justice Department's "Building Community Trust" InitiativeRead the Press Release
On the heels of President Obama’s national call to foster strong, collaborative relationships between local police and the communities they protect and serve, the U.S. Department of Justice announced today the upcoming cities where Attorney General Eric Holder will hold regional roundtable meetings as part of the department’s Building Community Trust initiative. Those cities are: Cleveland, Memphis, Tennessee, Chicago, Philadelphia, and Oakland, California.
The roundtables will serve as an opportunity to bring law enforcement, elected officials and members of the community together to discuss next steps that the administration will take to improve relationships between law enforcement and the community, increase the integrity within our justice system, and share best practices for policing.
The Attorney General hosted the first such Building Community Trust roundtable meeting at Ebenezer Baptist Church in Atlanta on Monday. There, he discussed President Obama’s announcement to create the Task Force on 21st Century Policing, the federal review on the use of military-style equipment for local law enforcement, and the new Community Policing Initiative to fund up to 50,000 additional body-worn cameras for law enforcement agencies. At a community town hall meeting held at the Ebenezer Baptist Church, the Attorney General announced that the department will soon release new guidelines on the use of racial profiling by federal law enforcement agencies.
The next Building Community Trust roundtable meeting will be held in Cleveland on TODAY DECEMBER 4, 2014, at 2 p.m. EST. The meeting will include law enforcement, local officials, community leaders, student leaders and faith leaders. Additional details on the other four upcoming regional roundtables will be released in the coming weeks.
ATTORNEY GENERAL HOLDER HOLDS BUILDING COMMUNITY TRUST MEETING IN CLEVELAND:
WHO: U.S. Attorney General Eric Holder
U.S. Attorney Steven Dettelbach for the Northern District of Ohio
Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division
WHEN: THURSDAY, DECEMBER 4, 2014
2:00 p.m. EST
WHERE: U.S. Attorney’s Office
801 West Superior Avenue
Cleveland, OH 44113
PHOTO SPRAY AT THE BOTTOM (Media Gather Time: 1:45 p.m. EST)
NOTE: All media must present government-issued photo I.D. (such as a driver’s license as well as valid media credentials. Press inquiries regarding logistics should be directed to Kevin Lewis at [email protected] or Sabrina Curtis at [email protected].
Armed Bridgeport Crack Dealer Sentenced to 6 Years in Federal PrisonRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JONATHAN COLON, 27, of Bridgeport, was sentenced today by Senior U.S. District Judge Warren E. Eginton in Bridgeport to 72 months of imprisonment, followed by four years of supervised release, for possessing with intent to distribute crack cocaine.
According to court documents and statements made in court, on January 10, 2013, law enforcement officers executed a search warrant at COLON’s one-room apartment on Birmingham Street in Bridgeport and found approximately 62 grams of crack cocaine packaged for street sale. Officers also located a loaded .223 caliber Bushmaster XM15-E2S assault rifle under COLON’s mattress. COLON, who was in the apartment at the time of the search, admitted to officers that he purchased the rifle the previous day for a combination of cash and crack.
COLON has been detained since his arrest on January 10, 2013. On July 25, 2013, he pleaded guilty to one count of possession with intent to distribute 28 grams or more of cocaine base (“crack cocaine”).
COLON’s criminal history includes multiple felony convictions. In December 2008, he was arrested for possessing a .45 caliber automatic handgun and crack cocaine and subsequently served three years in prison for that offense. He was arrested in this case approximately six weeks after he release from state prison.
This matter was investigated by the Federal Bureau of Investigation’s Bridgeport Safe Streets Task Force and was prosecuted by Assistant U.S. Attorney Rahul Kale.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Anchorage Felon Charged with Federal Firearms CrimeRead the Press Release
Anchorage, Alaska – U.S. Karen L. Loeffler announced today that a local man was arraigned in federal court in Anchorage on one count of felon in possession of a firearm.
26 year-old Eric Ramirez Nebreja was charged in a one-count indictment.
According to the information presented to the court, Nebreja possessed a Glock 40 caliber pistol on October 9, 2014. Nebreja has two prior felony convictions from the State of Alaska for assault in the second degree and misconduct involving weapons in the third degree.
Special Assistant United States Attorney Erin W. Bradley, who presented the case to the grand jury, indicated that the law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Anchorage Police Department conducted the investigation leading to the indictment in this case. SAUSA Bradley is a prosecutor in the U.S. Attorney’s Office funded by the Municipality of Anchorage for the purpose of prosecuting gang-related and violent crime cases.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.Alderman’s Former Chief of Staff Pleads Guilty to Accepting $7,500 Bribe in Exchange for Letters of Support for Liquor LicenseRead the Press Release
CHICAGO — A former chief of staff for an unnamed Chicago alderman pleaded guilty today to accepting a $7,500 cash bribe in exchange for obtaining the alderman’s letters of support for a license to sell alcohol in the alderman’s ward. The defendant, CURTIS V. THOMPSON, JR., accepted the bribe from an individual who claimed he wanted to open a convenience store but was actually a cooperating witness in an FBI undercover investigation.
Thompson, 63, of Chicago, pleaded guilty to federal program bribery. According to court documents, Thompson accepted 75 $100 bills in a Christmas card that the cooperating witness gave him at the alderman’s holiday party on Dec. 19, 2013. Thompson admitted today that he used the money he received to pay personal expenses.
Thompson faces a maximum sentence of 10 years in prison and a $250,000 fine. A written plea agreement states that the government anticipates a United States Sentencing Guidelines range of 12 to 18 months in prison. Thompson was arrested in February of this year and is free on bond while awaiting sentencing, which U.S. District Judge Samuel Der-Yeghiayan scheduled for March 17, 2015, in Federal Court.
Thompson’s plea agreement and court documents describe a series of telephone conversations and in-person meetings between the cooperating witness and other individuals, including a meeting with Thompson on Oct. 7, 2013, in the alderman’s ward office. During the meeting, the cooperating witness showed Thompson a note, which stated, “$7,500 to Ald for L.O.S.” Thompson understood the note to mean payment of $7,500 in exchange for a letter of support from the alderman for a liquor license for a store to be opened in the ward. After seeing the note, Thompson nodded his head and said “Okay. I understand.”
At a meeting with Thompson, the alderman, and another individual in the ward office on Oct. 29, 2013, the cooperating witness handed the alderman a note, which stated, “$12k to you for letter of support[.]” Thompson admitted that he was passed that note and that he understood that the cooperating witness was offering to pay money for a letter of support from the alderman for a liquor license. A third meeting was held on Nov. 19, 2013, at which the cooperating witness explained he was going through the process of becoming a convenience store franchisee.
Over the next few weeks, Thompson prepared two letters of support on the alderman’s letterhead and signed the alderman’s name, after seeking and obtaining the alderman’s approval to write the letters. Thompson knew that the cooperating witness had picked up the letters of support from the alderman’s ward office and understood they would be used to obtain a liquor license for the proposed store. The bribe payment was exchanged a short time later.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorneys Megan Church and Bethany Biesenthal.
Plea Agreement
Albuquerque Man Sentenced to Federal Prison for Child Pornography ConvictionRead the Press Release
ALBUQUERQUE – Joshua Iben, 22, of Albuquerque, N.M., was sentenced this morning to five years in federal prison followed by five years of supervised release for his federal child pornography charges. Iben will be required to register as a sex offender after completing his prison sentence.
Iben was arrested on Nov. 21, 2013, based on an FBI investigation that began in July 2013 and revealed that an IP address subscribed to Iben’s residential address was being used to share child pornography images. According to the criminal complaint, on Nov. 20, 2013, FBI agents executed a federal search warrant at Iben’s residence and seized computers and computer-related media. While the search warrant was being executed, Iben participated in a voluntary, recorded interview during which he admitted that he began sharing child pornography images years ago and last received or sent such images by email the week before. A subsequent forensic examination of a laptop computer taken from Iben’s residence revealed that it contains images consistent with child pornography.On Dec. 17, 2013, Iben was indicted and charged with two counts of receipt of child pornography; two counts of distribution of child pornography; and one count of possession of child pornography. The indictment alleged that Iben received child pornography on two occasions on April 29, 2013, and distributed child pornography on two occasions on Sept. 20, 2013. It also alleged that Iben possessed child pornography on Nov. 20, 2013, and that Iben committed all five offenses in Bernalillo County, N.M.
On April 21, 2014, Iben entered guilty pleas to all five counts of the indictment. The guilty plea was entered into without the benefit of a plea agreement.
This case was investigated by the Albuquerque office of the FBI and the New Mexico Regional Computer Forensics Laboratory. It was prosecuted by Assistant U.S. Attorneys Marisa A. Lizarraga and Jacob A. Wishard as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
- Additional Members of South Laredo Trafficking Group Plead Guilty
Accountant from Rio Arriba County Sentenced to More Than Nine Years in Federal Prison for Conviction on Conspiracy, Mail Fraud and Identity Theft ChargesRead the Press Release
Jasonn Gonzales was Ring Leader of Multi-State Scheme to Defraud the
Federal and State Unemployment Insurance Systems of $1,356,000.00ALBUQUERQUE – Jasonn Gonzales, 42, an accountant from Velarde, N.M., was sentenced this afternoon for his conviction on conspiracy, mail fraud and aggravated identity theft charges arising out of a scheme to defraud the federal and state unemployment insurance systems. Gonzales was ordered to serve 111 months (9.25 years) in federal prison followed by three years of supervised release. Gonzales also was ordered to pay $804,735.73 in restitution to the victims of his criminal conduct.
The sentence was announced by U.S. Attorney Damon P. Martinez; David Wickersham Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Frauds Investigations; and R.L. Faulkerson, Postal Inspector in Charge of the Fort Worth Division of the U.S. Postal Inspection Service.
Gonzales and his co-defendant, Gerald Archuleta, 43, of Ojo Caliente, N.M., were charged in a six-count indictment that was filed on March 26, 2014. Count 1 charged the two men with conspiracy to commit mail fraud in furtherance of a scheme to defraud the federal and state Unemployment Insurance System in New Mexico, Texas and Colorado of money by false and fraudulent pretenses. Counts 2 through 5 of the indictment charged the men with mail fraud, and Count 6 charges Gonzales alone with aggravated identity theft.
The federal and state Unemployment Insurance System seeks to lessen the effects of unemployment through payments made to claimants (laid-off workers) on a weekly basis while the claimants seek employment. The unemployment insurance program is administered on behalf of the federal government by state workforce agencies in each state. The investigation of this case established that between 2009 and 2012, Gonzales and Archuleta schemed to defraud the New Mexico Department of Workforce Solutions, the Texas Workforce Commission and the Colorado Department of Labor and Employment of more than $1,356,000.00 by making false and fraudulent claims for unemployment benefits in the names of real people.
Gonzales and Archuleta perpetuated their unlawful scheme by fraudulently registering numerous non-existent companies with the three state workforce agencies and filing false quarterly reports for the fictitious companies which identified claimed employees. The two men provided the names, dates of birth and social security numbers of the claimed employees to the state agencies without the knowledge or authorization of the claimed employees, who were real people. Gonzales and Archuleta then made false and fraudulent claims for unemployment benefit claims on behalf of the claimed employees of the fictitious companies. The men opened post office boxes in New Mexico, Texas and Colorado, which they provided to the three state workforce agencies as mailing addresses for the claimed employees. The state agencies mailed debit cards to the claimed employees at the post office boxes and the defendants used the debit cards to withdraw the fraudulently obtained benefits. During the life of the conspiracy, Gonzales and Archuleta submitted fraudulent claims for unemployment benefits in the aggregate amount of $1,356,461.00, and defrauded the three state workforce agencies of approximately $804,735.73 in total.
On Aug. 18, 2014, Gonzales pled guilty to all six counts of the indictment without the benefit of a plea agreement. In entering his guilty plea, Gonzales agreed to the entry of a money judgment against him that requires him to pay restitution to the victims of his crime. Today, the court ordered Gonzales, jointly with Archuleta, to pay restitution to the victims as follows: $247,929.00 to the New Mexico Department of Workforce Solution; $488,107.00 to the Colorado Department of Labor and Employment; and $68,699.73 to the Texas Workforce Commission.
On Oct. 24, 2014, Archuleta entered a guilty plea to Count 1 through 5 of the indictment. Under the terms of his plea agreement, Archuleta will be sentenced to a prison term within the range of 87 to 108 months to be followed by a term of supervised release to be determined by the court. The plea agreement also requires Archuleta, jointly with Gonzales, to pay $734,123.73 in restitution. Archuleta’s sentencing hearing is scheduled for Jan. 27, 2015.
“Defrauding the unemployment insurance program undercuts an important part of our social safety net and harmed workers, employers, and those trying to get back to work,” said U.S. Attorney Damon P. Martinez. “I commend the work of the investigators from the U.S. Department of Labor and U.S. Postal Inspection Service for making sure that those who defraud programs designed to protect workers and their families during periods of unemployment are prosecuted to the fullest extent of the law.”
“Today’s sentencing highlights the Office of Inspector General’s commitment to investigating fraud against the U.S. Department of Labor's Unemployment Insurance program,” said Special Agent in Charge David Wickersham of the Dallas Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. “We will continue to work with our law enforcement partners to investigate fictitious employer schemes that compromise the integrity of the program and hold accountable those responsible for fraud against Department of Labor programs.”“The sentence imposed on Gonzales should serve as a strong deterrent to others who intend to misuse and exploit the nation's mail system to commit fraud,” said U.S. Postal Inspector in Charge R.L. Faulkerson of the Fort Worth Division of the Postal Inspection Service. “For more than 200 years, the U.S. Postal Inspection Service has been in the forefront of securing the world's largest mail system. The U.S. Postal Inspection Service remains committed to our mission of enforcing the laws that defend the nation's mail system from illegal or dangerous use; and ensuring the public's trust in the mail.”
This case was investigated by the Department of Labor Office of Inspector General, Office of Labor Racketeering and Frauds Investigations, and the U.S. Postal Inspection Service, and is being prosecuted by Assistant U.S. Attorney Tara C. Neda.
Wednesday 3 December 2014
United States and State of Florida File Complaint against Defunct for-Profit College Chain and its President for False Claims Act ViolationsRead the Press Release
The United States and State of Florida have brought a civil complaint against FastTrain II Corp., a private, for-profit chain of schools that was based in Miami, Florida and was doing business as FastTrain College and Alejandro (Alex) Amor, 56, of Coral Gables, who was FastTrain’s owner, president and Chief Executive Officer. The case arises from false statements and claims that FastTrain and Amor presented to, or caused to be presented to, the United States and Florida, in violation of the federal False Claims Act, the Florida False Claims Act and common law.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Pam Bondi, Florida Attorney General, Yessyka Santana, Special Agent in Charge, U.S. Department of Education Office of Inspector General’s (ED OIG) Southeastern Regional Office, George L. Piro, Special Agent in Charge, Federal Bureau of Investigations (FBI), Miami Field Office, made the announcement. On October 2, 2014, U.S. Attorney Ferrer announced that Amor and other individuals associated with FastTrain were charged in a fifteen count indictment with conspiracy to steal government funds, in violation of Title 18, United States Code, Section 371, and theft of government funds, in violation of Title 18, United States Code, Section 641.
At its peak, FastTrain operated seven Florida campuses in Miami-Dade, Broward, Hillsborough, Pinellas and Duval counties. The governments’ complaint in the civil case alleges that from at least January 1, 2009 through June 22, 2012, when FastTrain closed, FastTrain and Amor knowingly submitted, or caused to be submitted, numerous false claims for payment to the U.S. Department of Education (ED) arising from their fraudulent course of conduct in order to participate in the federal student aid programs authorized pursuant to Title IV of the Higher Education Act of 1965 (“HEA”), as amended, 20 U.S.C. §§ 1070 et seq. (“Title IV, HEA Programs”). The Title IV, HEA programs, which are administered by ED, provide students with financial aid in the form of, among other things, Federal Pell Grants, Federal Direct Loans, and formerly, loans guaranteed by the federal government.
According to the governments’ complaint:
FastTrain submitted and/or caused to be submitted false information relating to the eligibility of students to receive Title IV, HEA program assistance, by providing false documentation showing that students had high school diplomas or its recognized equivalent, when they did not. Some FastTrain admissions personnel coached certain prospective ineligible students to lie on Free Application for Federal Student Aid (“FAFSA”) documentation in order for FastTrain to secure more federal funding for students than the students were eligible to receive.
As a result of the fraudulent scheme and its false representations of Title IV eligibility, FastTrain received millions of dollars of Title IV financial aid that it otherwise would not have received but for its conduct.
As alleged in the governments’ complaint, the United States sustained damages for over $4,340,000.00 in student loans ($4,021,321.00 in FDL Program and $320,925.00 in disbursed FFEL Program loans). In addition, the United States has sustained damages through Federal Pell Grants obtained through FastTrain’s fraudulent activities in the amount of $2,212,904.00.
“Federal financial student aid programs are designed to assist students obtain an education. Those who misuse federal funds will be brought to justice and held accountable,” said U.S. Attorney Ferrer. “This case is an example of our commitment to use our civil enforcement laws – as well as criminal laws – to protect taxpayer dollars and ensure that individuals who seek to improve their lives through a quality education are able to do so.”
“Taking advantage of students in order to exploit federal financial aid programs is reprehensible, and we will continue to work with our federal partners to protect Florida students and the integrity of federal financial aid,” said Attorney General Bondi.
“Abuse of the federal student aid program is unacceptable,” said ED OIG Special Agent in Charge Yessyka Santanta. “Tracking down and holding accountable companies like FastTrain and its executives that take advantage of students to benefit the companies’ bottom line remains a priority of our office.”
“This case represents the abuse of a federal program designed to aid students,” said George L. Piro, SAC Miami. “The FBI and its partners will continue to investigate scams like this that seek to steal taxpayer dollars.”
The case is captioned United States of America, State of Florida ex rel Juan Peña, Plaintiffs/Relator vs. FastTrain II Corp. d/b/a FastTrain College, and Alejandro Amor, Defendants, Case No.: 1:12-cv-21431-COOKE/TORRES, United States District Court, Southern District of Florida. The United States brings its complaint to recover treble damages, civil penalties, and costs under the False Claims Act, 31 U.S.C. §§ 3729-33, and to recover damages and other monetary relief under the common law and equitable theories of unjust enrichment and payment by mistake. Florida seeks similar relief under the provisions of the Florida False Claims Act, §§ 68.081-68.09, Florida Statutes and common law.
The criminal investigation was underway when the civil suit was originally filed under the False Claims Act as a whistleblower suit against FastTrain by a FastTrain admissions officer. The False Claims Act allows private citizens to file whistleblower suits to provide the government information about wrongdoing. As was done in this case, the False Claims Act and the Florida statute authorize the federal and state governments, respectively, to intervene in and assume primary responsibility for litigating the respective federal and state claims in a filed lawsuit. If the United States proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damages that resulted and a penalty of $5,500 to $11,000 per claim. Florida’s statute provides similar relief.
U.S. Attorney Ferrer commended the investigative efforts of the Florida Office of the Attorney General, ED-OIG, FBI, and ED Office of General Counsel. This matter is being litigated by Assistant U.S. Attorney James A. Weinkle, Trial Attorney Jay Majors of the Commercial Litigation Branch, Civil Division, U.S. Department of Justice and Mark S. Hamilton, Special Counsel, Consumer Protection Division, Office of the Attorney General State of Florida.
The claims asserted against FastTrain and Amor in the United States’ and State of Florida’s complaint, are allegations only, and there has been no determination of liability.
Attachment:
Complaint (PDF)A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
U.S. Attorney’s Office for the District of Columbia Secures over $180 Million in Financial Recoveries in Fiscal 2014Office Has Collected Nearly $2.3 Billion over Past Five Fiscal YearsRead the Press Release
WASHINGTON - The U.S. Attorney’s Office for the District of Columbia collected nearly $180 million in criminal and civil actions and asset forfeitures during the most recent fiscal year, U.S. Attorney Ronald C. Machen Jr. announced today.
All told, the U.S. Attorney’s Office for the District of Columbia has collected nearly $2.3 billion in criminal and civil actions and asset forfeitures over the past five fiscal years.
The totals for Fiscal Year 2014 include over $160.9 million collected in criminal actions and over $11.9 million in civil actions. Another $7.7 million was collected in criminal and civil asset forfeiture actions. Additionally, the U.S. Attorney’s Office for the District of Columbia worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect another $1.4 million in civil actions cases pursued jointly with these offices.
“The $2.3 billion that we have recovered in recent years is a measure of our commitment to taxpayers and victims of crime,” said U.S. Attorney Machen. “We have restored dollars robbed from the U.S. Treasury by corrupt public officials and shady government contractors, and have deprived drug traffickers and fraudsters of their ill-gotten gains. We will continue to use the full range of legal tools at our disposal to protect the taxpayer and do justice.”
Attorney General Eric Holder recently announced that the Justice Department collected $24.7 billionnationwidein civil and criminal actions in the fiscal year ending Sept. 30, 2014. The collections in FY 2014 represent nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the Justice Department’s prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy.”
Additionally, the U.S. Attorneys’ offices nationwide, working with partner agencies and divisions, collected over $4.5 billion in asset forfeiture actions in FY 2014.
The U.S. Attorneys offices, along with the department’s litigating divisions, are responsible for enforcing and collecting criminal and civil debts owed to the United States and criminal debts owed to federal crime victims. In the District of Columbia, the Financial Litigation Unit in the Civil Division of the U.S. Attorney’s Office aggressively handles these responsibilities. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
Collections in Civil Actions
The collections in civil actions by the U.S. Attorney’s Office for the District of Columbia included more than $1.3 million generated by a settlement with Deloitte Consulting LLP, together with its predecessors and successors. This matter involved billing the government for certain personnel in labor categories for which they did not qualify on work orders under a contract with the Department of Justice. Deloitte management responsible for these tasks orders learned of these inappropriate labor categorizations in May 2012. Nonetheless, Deloitte continued to bill certain personnel at inappropriate labor categories and rates until October 2012.
The amount also included $4.2 million, plus interest, paid by the Washington Metropolitan Area Transit Authority (WMATA), to resolve allegations that it filed false claims in connection with using federal funds to impermissibly award a contract for a financial management information technology project without using competitive procurement procedures.
In another case, Alliance Rehabilitation LLC, a Maryland limited liability company with an administrative office in Hanover, Maryland and a billing office in Fairfax, Virginia, paid the United States $2.4 million as part of a settlement of allegations that the firm’s billings to Medicare and the TRICARE health care program violated the False Claims Act. The company operates physical therapy clinics in the Washington, D.C., metropolitan area.
Collections in Criminal Actions
The collections in criminal actions by the U.S. Attorney’s Office for the District of Columbia included $886,000 paid by a former senior policy advisor for the U.S. Environmental Protection Agency who pled guilty to carrying out a scheme in which he kept collecting pay and benefits even though he was not at work. John C. Beale pled guilty in September 2013 to theft of government property. Between January 2000 and April 2013, Beale was absent for about 2 ½ years. Among other things, he falsely claimed that he needed to be away while working on a project for the Central Intelligence Agency.
Beale also paid the government another $507,000 to satisfy a forfeiture money judgment in the same case.
Collections in Forfeiture Cases
Since taking office in February 2010, U.S. Attorney Machen has emphasized the importance of asset forfeiture to fight crime and criminal organizations and to seek justice for victims. Asset forfeiture is a powerful tool that can deprive criminals and criminal organizations of illegal proceeds and instrumentalities of crimes, recover property that may be used to compensate victims, and deter crime. Federal law provides authority to seize and forfeit the proceeds of virtually all serious federal offenses. Forfeited assets are deposited into the Department of Justice Asset Forfeiture Fund and Department of Treasury Asset Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.
In addition to the $507,000 judgment involving Beale, other significant collections generated by the Office’s Asset Forfeiture and Money Laundering Unit in Fiscal 2014 included over $1.8 million from the sale of forfeited real property of Kerry F. Khan, a former program manager for the U.S. Army Corps of Engineers. Khan is serving a prison sentence of 19 years and seven months following his guilty plea in an investigation of a ring of corrupt public officials and government contractors that engaged in bribery, kickbacks and other crimes. Participants in the scheme stole over $30 million through inflated and fictitious invoices.
The total also includes over $2.2 million in real property and funds seized from Min Jung Cho, the former president of Nova Datacom, LLC, a company involved in the scheme. She also pled guilty in the investigation involving Kerry Khan and others and is awaiting sentencing.
In addition, in a national security case, the government forfeited aviation equipment, valued at more than $90,000. This equipment was being procured by front companies on behalf of entities in Iran, in violation of U.S. sanctions. The front companies would launder money into the country in an attempt to conceal the true beneficiaries of the transactions. The forfeiture action led to a recovery of the equipment, and ultimately the sale of the equipment for the benefit of the United States.
Finally, in another case, the government collected $388,613 in forfeiture from Gezo G. Edwards, formerly of Silver Spring, Md., who was found guilty by a jury of conspiring to distribute large amounts of cocaine in the Washington, D.C., metropolitan area. Edwards was sentenced in February 2014 to a life prison term. The money was seized as proceeds of the drug conspiracy.
14-267Truck Driver Charged with Illegally Receiving Social Security Disability BenefitsRead the Press Release
PITTSBURGH – An Armstrong County truck driver has been indicted by a federal grand jury in Pittsburgh on a charge of theft of government property, United States Attorney David J. Hickton announced today.
The one-count indictment named Billy Joe Toy, 43, of Worthington, Pennsylvania, as the sole defendant.
According to the indictment, Toy received Social Security disability insurance benefit payments based on his alleged inability to engage in any substantial gainful activity, and thereby caused $55,012 in disability payments to be paid to him and on behalf of his minor child, while he was employed as a truck driver and concealed his compensation for the payment of his wages to his wife’s business.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The Social Security Administration, Office of Inspector General, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Ten Defendants Charged in $70 Million Scheme to Defraud Medicaid and Medicare Through Medical Clinics in Brooklyn and QueensRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), William J. Bratton, Commissioner of the New York City Police Department (“NYPD), and Thomas O’Donnell, the Special Agent-in-Charge of the New York Office of the Department of Health and Human Services, announced today the unsealing of an indictment charging ten defendants with operating a massive health care fraud scheme through three medical clinics in Brooklyn and Queens through which the defendants submitted over $70 million in fraudulent claims to Medicaid and Medicare. As alleged in the Indictment, VICTOR LIPKIN, VADIM ZUBKOV, EDUARD ZAVALUNOV, NIKOLOZ CHOCHIEV, ANATOLIY FATAKHOV, MARIANA SWAFFAR, JACQUELINE PINEZ, JONATHAN OLIVER, JASON BRISSETT, and GILBERT TROTMAN recruited financially disadvantaged and homeless people insured by Medicare and/or Medicaid (the “Phony Patients”) to undergo unnecessary medical tests, typically performed by unlicensed personnel, at the clinics in exchange for cash, and then billed the insurers for administering those unnecessary tests. In total, the defendants are alleged to have submitted over $70 million in fraudulent claims to Medicaid and Medicare, for which they fraudulently received over $25 million in insurance payments. Each of the defendants was arrested this morning. All of the defendants other than TROTMAN are expected to be arraigned in Manhattan federal court later today before a U.S. Magistrate Judge. TROTMAN was arrested in the Atlanta, Georgia, area and will be presented there later today.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, these defendants corrupted financially strapped people and fleeced Medicare and Medicare to the tune of tens of millions of dollars. To fuel their greedy scheme, the defendants allegedly had phony patients submit to medically unnecessary treatments, paying these ‘patients’ a fraction of what they themselves reaped from the fraudulent billings. The scheme enriched the defendants and burdened Medicare and Medicaid, but the scheme has been exposed and ended.”
FBI Assistant Director-in-Charge Venizelos said: “As alleged, the defendants engaged in a systematic scheme to defraud government programs designed to assist deserving patients. Adding insult to injury, the defendants preyed upon vulnerable members of our community, exploiting the less fortunate in furtherance of their criminal activity. Health care fraud wastes tax dollars, increases costs for the public and destroys the integrity of our health care system. The FBI, along with our federal, state, and local law enforcement partners, is committed to investigating this type of fraud and holding accountable those who take advantage of our government health care programs.”
NYPD Commissioner William J. Bratton said: “Healthcare fraud places a burden on taxpayers and on a healthcare system that millions of people rely on for medical care. Thanks to the collaborative efforts of our investigators, along with our federal partners, this criminal network was dismantled and its members will be held accountable for their actions.”
HHS Special Agent-in-Charge O’Donnell said: “Kickbacks and medically unnecessary services have no place in the Medicare and Medicaid systems. These programs are intended for the elderly and the most vulnerable segments of our society. The Office of Investigations will continue to vigorously pursue those that defraud these programs for their personal gain.”
According to the allegations contained in the Indictment unsealed today in Manhattan federal court:
The Heath Care Fraud Scheme
Beginning in or about 2005, LIPKIN and ZUBKOV recruited and paid a particular licensed physician (the “Doctor”) to act as the nominal owner and/or physician under whose name three purported medical clinics would bill Medicare, Medicaid, and private insurance providers (the “Insurance Providers”) for unnecessary services and tests – including sleep tests and stress tests – performed at the clinics. The clinics were located on Avenue V in Brooklyn, New York, and on Hillside Avenue and Elmhurst Avenue, respectively, in Queens, New York. LIPKIN and ZUBKOV were, in fact, the beneficial owners of the clinics, but they concealed their ownership through the Doctor’s nominal affiliation with the clinics, and by laundering the proceeds of the clinics’ operation through shell companies that they owned and controlled. LIPKIN, ZUBKOV, and ZAVALUNOV operated and controlled the clinics, and ran the clinics’ day-to-day operations, despite the fact that they were not licensed physicians, as required by New York law.
At the direction of LIPKIN, ZUBKOV, and ZAVALUNOV, other members of the scheme, including OLIVER, BRISSETT and TROUTMAN (the “Runners”), and CHOCHIEV, recruited financially disadvantaged individuals with Medicaid and/or Medicare insurance to act as Phony Patients and undergo unnecessary medical tests at the clinics in exchange for cash payments. The Runners often recruited such individuals from soup kitchens and local welfare offices, and coached them on what to say on various medical forms in order to make it falsely appear that the medical tests to which the defendants intended to subject them were medically necessary. In furtherance of the scheme, CHOCHIEV also made threats of physical violence to individuals who CHOCHIEV believed owed money to the scheme members.
Also in furtherance of the scheme, before the medically unnecessary tests were performed on the Phony Patients, SWAFFAR and PINEZ obtained the Phony Patients’ Medicaid and/or Medicare insurance information, and then contacted the Insurance Providers to confirm that the Insurance Providers would reimburse for the tests. SWAFFAR and PINEZ engaged in such conduct knowing that the Phony Patients were being recruited and paid by the Runners to undergo the tests. Once they determined that a particular Phony Patient’s insurance would pay out claims made by the clinic for the planned medical tests, SWAFFAR and PINEZ notified the Runners that the individuals were eligible and could be brought to the clinic to undergo such tests.
After the Phony Patients had been recruited, confirmed to be Medicare and/or Medicaid eligible, and transported to one of the clinics by the Runners or CHOCHIEV, in many instances, certain individuals who were not physicians administered a host of unnecessary medical tests to them. In particular, for example, FATAKHOV administered unnecessary medical tests, including stress tests, to the Phony Patients of the Elmhurst Avenue Clinic. FATAKHOV administered these tests outside the presence and supervision of the Doctor or other licensed physician, knowing that the presence or supervision of a licensed physician was required. After the unnecessary medical tests were administered, the Phony Patients were paid cash kickbacks. The defendants, through the clinics, then submitted fraudulent claims to Medicaid and Medicare seeking reimbursement for the unnecessary medical tests. In total, in the course of the scheme, the defendants fraudulently billed over $70 million to Medicaid and Medicare, for which they received over $25 million in reimbursements.
All ten defendants are charged with conspiring to commit mail fraud, wire fraud, and health care fraud. LIPKIN, ZUBKOV, and ZAVALUNOV are also charged with conspiring to launder the proceeds of the fraud. A table listing the charges against each defendant and the potential penalties for each count is attached. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI’s New York Health Care Fraud Task Force, the NYPD, and HHS. Mr. Bharara also thanked the New York City Human Resources Administration, the New York State Office of Medicaid Inspector General, and the New York State Attorney General Medicaid Fraud Control Unit for their assistance in the investigation.
The FBI’s New York Health Care Fraud Task Force was formed in 2007 in an effort to combat health care fraud in the greater New York City area. The task force comprises agents, officers, and investigators of the FBI, NYPD, New York State Insurance Fraud Bureau, U.S. Department of Labor, U.S. Office of Personnel Management Inspector General, U.S. Food and Drug Administration, NYS Attorney General’s Office, NYS-Office of Medicaid Inspector General, NYC Health and Hospitals Inspector General, New York City Human Resources Administration, and National Insurance Crime Bureau.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Timothy Howard and Daniel Tehrani are in charge of the prosecution. Assistant United States Attorney Carolina Fornos is in charge of the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Click here to view chart(s)
Lipkin, Victor, et al. Indictment (14 Cr 773)
Stillwater Man Pleads Guilty to Role in Large Shoplifting RingRead 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 Terry Stewart, 35, of Stillwater, NY, pleaded guilty to engaging in a racketeering conspiracy before U.S. District Judge Richard J Arcara. The charge carries a maximum penalty of 20 years in prison.
According to Assistant U.S. Attorney Anthony M. Bruce, who is handling the case, Stewart was part of an organized shoplifting ring that stole hundreds of thousands of dollars in merchandise, including breast pumps, whitening strips, cross stitch an needlepoint kits, electric toothbrushes, thumb drives, pet supplements, razors, and tool sets big box from big box stores such as Walmart, Sears, Home Depot, JoAnn Fabrics, Tops and Wegmans. The merchandise was then allegedly sold to co-defendant Rico Vendetti for 25¢ on the dollar. The merchandise was then allegedly sold by Vendetti on eBay for about half of its retail value, primarily to out-of-state customers. The defendant alone supplied Vendetti with about $700,000 in stolen merchandise over a period of several years.
Rico Vendetti, along with Arlene Combs, Albert Parsons, and Donald Griffin, all of Rochester, N.Y., are charged with felony murder in the death of 78-year old Homer Marciniak during the course of a home invasion robbery at Marciniak’s home in Medina, N.Y. in July, 2010. In addition, Vendetti and Combs are charged with racketeering, which includes the murder, witness tampering and transporting stolen goods in interstate commerce. If convicted of the felony murder charge, Vendetti, Combs, Parsons and Griffin face a mandatory sentence of life in prison without parole.
Vendetti is scheduled to be tried in front of Judge Aracara beginning next week. Charges are pending against defendants Combs, Parsons, and Griffin. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the result of an investigation on the part of Special Agents from the Federal Bureau of Investigation, the New York State Police, under the direction of Major Scott Crosier, the Orleans County Sheriff’s Department, under the direction of Sheriff Scott Hess, the Monroe County Sheriff’s Office, under the direction of Sheriff Patrick O’Flynn, the Medina Police Department, under the direction of Chief Jose Avila and Officers from the Rochester Police Department under the direction of Chief Michael Ciminelli.
Sentencing is scheduled for March 16, 2015 before Judge Arcara.
Statement by U.S. Attorney Loretta E. Lynch on Federal Investigation into Death of Eric GarnerRead the Press Release
BROOKLYN, NY – United States Attorney for the Eastern District of New York Loretta E. Lynch released the following statement regarding the federal investigation into the July death of Eric Garner of New York:
“Since the death of Eric Garner in July, our office has monitored this case closely. At the outset, informed by prior experience and in keeping with the standard practice in these types of cases in New York, the local investigation proceeded first. As the Attorney General explained earlier tonight, because the local investigation has come to a close, the Justice Department will now move forward with its own independent inquiry to determine whether federal civil rights laws have been violated. The investigation will be conducted by the U.S. Attorney’s Office and the Justice Department’s Civil Rights Division. The investigation will be fair and thorough, and it will be conducted as expeditiously as possible.”
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Rochester Man Sentenced on Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Keith Lewis, 37, of Rochester, NY, who was convicted of possession with intent to distribute and to distribute 280 grams or more of cocaine, was sentenced to 20 years in prison and 10 years supervised release by U.S. District Judge David G. Larimer. The defendant was also ordered to forfeit $2,051 in proceeds from his drug trafficking activities.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that Lewis was involved in the trafficking of cocaine in the Rochester area from at least May of 2011 to May of 2013, with the assistance of others, including Mahogany Lewis. The defendant purchased and transported cocaine from suppliers in Rochester and Buffalo, NY, and processed cocaine into cocaine base. Lewis was also responsible for the direct distribution of cocaine base to others in Rochester.
On May 14, 2013, officers conducted a traffic stop of a minivan being driven by co-consprirator Mahogany Lewis. Keith Lewis was the front seat passenger. Their two children were also in the van. After all were removed from the van, Mahogany Lewis asked if she could take a grocery bag that contained the children’s snacks with her. Upon inspection of the bag, officers observed a quantity of cocaine. The bag was placed back in the minivan which was taken to the Public Safety Building to be searched after a search warrant was secured. The Lewis’ were taken there as well to be interviewed.
During the execution of a search warrant, officers collected a knotted plastic grocery bag, an electronic room key for a room at the Extended Stay America Hotel, where the couple had been staying, and a cellular telephone. The plastic grocery bag contained approximately 143 grams of crack cocaine, 10 grams of heroin, two plastic bags containing rubber-banded packets of 20 green baggies of heroin, one plastic bag containing 11 bundles of glassine baggies of heroin, two shredder/grinders, empty zip-lock and glassine baggies and a digital scale. Keith Lewis had $2,051 on his person. Three cellular were located and seized as well from the couple. As part of the investigation, a confidential source advised officers that the source regularly purchased crack cocaine from Keith and Mahogany Lewis over the previous 24 months from the Lewis’ residence at 610 Lake Avenue and from a drug house at 208 Conkey Avenue, Rochester. Keith Lewis has two prior felony drug convictions and is on lifetime probation.
Mahogany Lewis was convicted and sentenced to time served and two years supervised release.
The conviction is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, and officers from the Greater Rochester Area Narcotics Enforcement Team, composed of law enforcement personnel in Monroe County, under the direction of Rochester Police Department Chief Michael Ciminelli.
Rochester Man Sentenced for Possessing Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Jonathan Lopez-Polo, 26, of Rochester, NY, who was convicted of possession of child pornography, was sentenced to 25 years supervised release by U.S. District Court Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Craig R. Gestring, who handled the case, stated that the defendant possessed more than 600 images of child pornography on digital media he owned, including a computer and removable media. The images included prepubescent children, as well as depictions of violence against children. As part of his sentence, Lopez-Polo also forfeited all computer equipment seized by the FBI during the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, Child Exploitation Task Force.
Rite Aid Corporation Pays $2.99 Million for Alleged Use of Gift Cards to Induce Medicare and Medicaid BusinessRead the Press Release
Rite Aid Corporation, a Delaware corporation and national retail drugstore chain with its principal place of business in Camp Hill, Pennsylvania, has paid the United States $2.99 million to resolve allegations that it violated the False Claims Act by inappropriately using gift cards as inducements, the Department of Justice announced today.
The settlement resolves allegations that Rite Aid offered illegal inducements to Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies. The government alleged that from 2008 to 2010, Rite Aid had knowingly and improperly influenced the decisions of Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies by offering them gift cards in exchange for their business.
“This case demonstrates the government's ongoing commitment to enforcing accountability, transparency and fairness in the retail pharmacy industry,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division. “The government will continue to advocate for the best interests of Medicare and Medicaid patients, and prevent pharmacies from improperly manipulating their healthcare choices.”
“This settlement holds Rite Aid accountable for exerting undue influence on individuals when they make important healthcare decisions about where and when to fill prescriptions,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Corporate profit should never steer an individual away from making the right healthcare decision.”
“Pharmacies are not allowed to improperly influence the decision-making of Medicare and Medicaid patients about where to fill prescriptions,” said Special Agent in Charge Glenn R. Ferry for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Pharmacy chains that manipulate patient choices in this way will be held accountable.”
The settlement resolves allegations filed by Jack Chin under the qui tam, or whistleblower provisions of the False Claims Act, which authorizes private parties to sue for fraud on behalf of the United States and share in the recovery. Chin will receive approximately $508,300 of the settlement.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was investigated jointly by the Commercial Litigation Branch of the Civil Division, the U.S. Attorney’s Office for the Central District of California, the National Association of Medicaid Fraud Control Units and HHS-OIG.
The claims settled by today’s agreement are allegations only and there has been no determination of liability.
Rite Aid Corporation Pays $2.99 Million for Alleged Use of Gift Cards to Induce Medicare and Medicaid Patients to Transfer PrescriptionsRead the Press Release
LOS ANGELES – Rite Aid Corporation has paid the United States $2.99 million to resolve allegations that it violated the False Claims Act by inappropriately using gift cards as inducements, the Department of Justice announced today.
The settlement resolves allegations that Rite Aid offered illegal inducements to Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies. The government alleged that, from 2008 to 2010, Rite Aid knowingly and improperly influenced the decisions of Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies by offering them gift cards in exchange for their business.
“This settlement holds Rite Aid accountable for exerting undue influence on individuals when they make important healthcare decisions about where and when to fill prescriptions,” said Acting U.S. Attorney Stephanie Yonekura. “Corporate profit should never steer an individual away from making the right healthcare decision.”
Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division stated: “This case demonstrates the government's ongoing commitment to enforcing accountability, transparency and fairness in the retail pharmacy industry. The government will continue to advocate for the best interests of Medicare and Medicaid patients, and prevent pharmacies from improperly manipulating their healthcare choices.”
The settlement, which was announced today after a federal judge last week unsealed part of the case, resolves allegations filed by a Florida pharmacist under the qui tam, or whistleblower provisions of the False Claims Act, which authorizes private parties to sue for fraud on behalf of the United States and share in the recovery.
“Pharmacies are not allowed to improperly influence the decision-making of Medicare and Medicaid patients about where to fill prescriptions,” said Special Agent in Charge Glenn R. Ferry for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Pharmacy chains that manipulate patient choices in this way will be held accountable.”
Rite Aid is a Delaware corporation and national retail drugstore chain with its principal place of business in Camp Hill, Pennsylvania,
This case was investigated jointly by the United States Attorney’s Office, the Commercial Litigation Branch of the Justice Department’s Civil Division, the National Association of Medicaid Fraud Control Units and HHS-OIG.
The claims settled by today’s agreement are allegations only and there has been no determination of liability.
Release No. 14-155
Ringleader of Tax and Social Security Scheme SentencedRead the Press Release
BOSTON – A Florida man was sentenced in U.S. District Court in Worcester yesterday for leading a scheme to steal and launder over $100,000 in government funds.
Sniders Jean-Jacques, 27, of Sunny Isles Beach, Fla., was sentenced by U.S. District Court Judge Timothy S. Hillman to 24 months in prison, three years of supervised release, and was ordered to pay $110,299 in restitution to the federal government. In July 2014, Jean-Jacques pleaded guilty to theft of government money.
In early 2013, Jean-Jacques and a Worcester man, Marvin Lubin, recruited couriers in Worcester to open bank accounts in the name of sham businesses. Social Security benefits and IRS tax refund payments, all illegally obtained using stolen identities, were then deposited to the accounts. At the direction of Lubin and Jean-Jacques, cash was immediately withdrawn following each deposit and delivered by the couriers as instructed. All of the money involved represents funds stolen from the United States government.
Forty-five victims had their identities used as part of Jean-Jacques’s scheme: 13 victims’ identities were used to steal Social Security payments, and 32 victims’ identities were used to steal tax refunds.
“Identity theft wreaks havoc in people’s financial lives and Social Security fraud deprives citizens in need of important benefits,” said United States Attorney Carmen M. Ortiz. “Targeting such schemes is a federal enforcement priority.”
“Our office is committed to partnering with law enforcement agencies and pursuing perpetrators of identity theft and electronic government fraud schemes similar to the Worcester-based operation directed by Mr. Jean-Jacques,” said Scott Antolik, Special Agent in Charge of the Office of Inspector General, Social Security Administration, Office of Investigations, Boston Field Division. “To protect themselves from similar identity theft schemes, all citizens should safeguard their personal information, regularly monitor their financial accounts and any government benefit accounts, and report any suspicious account activity to the appropriate authorities.”
In October 2014, Lubin was sentenced to one year and one day in prison for his role in this scheme. Four others have pleaded guilty in connection with this scheme: couriers Juanita Hall, Natalia Santana, and Shantelle Smith; and Emeline Lubin, Marvin Lubin’s sister, who stole names and Social Security numbers from her then employer, Tufts Health Plan, and supplied the stolen information to Jean-Jacques for use in the scheme.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General; Worcester Police Chief Gary J. Gemme; and Norwood Police Chief William G. Brooks III, made the announcement. The case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Red Lake Man Sentenced to 10 Years for Domestic AssaultRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of KYLE WAYNE MARTIN, SR., 25, an enrolled member of the Red Lake Band of Chippewa Indians, to 120 months in federal prison for a violent domestic assault committed on the Red Lake Indian Reservation. MARTIN pleaded guilty on August 20, 2014, to one count of strangulation. The defendant was sentenced today before Chief Judge Michael J. Davis in U.S. District Court in Minneapolis, Minn.
According to the defendant’s guilty plea and documents filed in court, on March 24, 2014, MARTIN assaulted the victim, who was an intimate acquaintance, in the driveway of the family home in the Ponemah District within the exterior boundaries of the Red Lake Indian Reservation. MARTIN strangled the victim in a severe act of domestic violence, restraining her as she attempted to escape in her car. MARTIN also assaulted his relatives when the victim sought to escape from the house. The attack left the victim with both physical and emotional injuries.
The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.
To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.
This case resulted from an investigation conducted by the Red Lake Tribal Police Department and the Federal Bureau of Investigation.
The case was prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.
Defendant Information:
KYLE WAYNE MARTIN, SR., 25
Ponemah, Minn.
Convicted:
• Strangulation, 1 count
Sentenced:
• 120 months in prisonRancho Santa Fe Businessman Pleads Guilty; Admits Scheme to Sell but Not Deliver Imaging Systems for Breast ExamsRead the Press Release
SAN DIEGO - Rancho Santa Fe Businessman Christopher John Cozzie pleaded guilty to fraud charges in federal court today, admitting that he sold imaging and diagnostic systems for breast examinations that he either did not deliver or partially delivered.
According to court documents, Cozzie operated two companies, Advance Functional Imaging, and Green Screen Labs, which purported to sell equipment that included infrared cameras, laptops or touchscreen computers and imaging software plus training and interpretation services for less invasive breast examinations.
He admitted that between 2007 and 2009, he marketed the equipment to holistic healthcare providers via the internet and at health and wellness conventions in Las Vegas and various locations in California. He charged up to $35,000 per system to customers from California to Australia.
Cozzie admitted in his plea agreement that by 2008, he had no capital to run his business and was unable to provide the entire package of equipment to customers – particularly the cameras needed to do the imaging. He was selling used cameras, as well as selling the same camera to more than one customer.
According to the plea agreement, in February of 2009, when Cozzie had already failed to deliver his systems to other customers, a doctor in Texas contracted with Cozzie for an imaging system, including a new camera, computer and training. According to his plea, on April 6, 2009, the doctor wired Cozzie $32,000 for the system, but never received the camera, despite repeated contacts with Cozzie.
According to the plea agreement, some customers received partial systems; some received nothing. Yet Cozzie continued to market and sell the systems. The approximate loss suffered by Cozzie’s customers exceeds $200,000.
According to the indictment, Cozzie even removed a camera from the offices of one of his clients and delivered it to another client in another part of California.
Sentencing was set for March 3, 2015, before U.S. District Judge William Q. Hayes.
DEFENDANTS Case Number: 14cr0900WQH Christopher John Cozzie Age: 57Rancho Santa Fe, California
CHARGESWire Fraud, 18 U.S.C. 1343
INVESTIGATING AGENCY
Maximum Sentence: 20 years, $250,000 fine, $100 penalty assessment, restitutionFederal Bureau of Investigation
President of Middlesex County, New Jersey, Investment Company Sentenced to 15 Months in Prison for Defrauding InvestorsRead the Press Release
NEWARK, N.J. – The former president of a Middlesex County, New Jersey, investment company was sentenced today to 15 months in prison for defrauding investors out of more than $250,000, U.S. Attorney Paul J. Fishman announced.
Shreyans Desai, 27, of Edison, New Jersey, president of Shreysiddh Capital LLC, located in Iselin, New Jersey, previously pleaded guilty before U.S. District Judge William J. Martini to Counts One and Two of a superseding indictment charging him with wire fraud. The third count in the indictment, securities fraud, was dismissed after Judge Martini imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Desai misled a number of investors about his licensing status and the registration status of the company to induce them to entrust their money to him so that he could trade securities on their behalf. Desai then sought to retain control of the funds by providing investors with an inflated value of their investments and also inflated the amount of commissions he purportedly earned through trading those funds.In addition to the prison term, Judge Martini sentenced Desai to three years of supervised release and ordered to pay restitution of $121,250.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jane H. Yoon and Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
14-420
Defense counsel: Alyssa A. Cimino Esq., Fairfield, N.J.Postal Employee Charged with Stealing VA Medicine Parcels from Mail Distribution CenterRead the Press Release
PITTSBURGH - A mail handler has been indicted by a federal grand jury in Pittsburgh on a charge of theft of mail by postal employee, United States Attorney David J. Hickton announced today.
The one-count indictment named Lisa A. White, 46, as the sole defendant.
According to the indictment, defendant, while working as a Mail Handler at the Pittsburgh Network Distribution Center on Sept. 5, 2014, stole six Veteran’s Administration (VA) medicine parcels addressed to different Pittsburgh-area VA patients.
The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The United States Postal Service and Veteran’s Administration Offices of Inspector General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Ponemah Man Sentenced for Violently Strangling A Woman on the Red Lake Indian ReservationRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of TERRY DEAN ICEMAN, 47, to 41 months in federal prison for a violent assault committed on the Red Lake Indian Reservation. On April 3, 2014, following a three-day trial, a federal jury found ICEMAN guilty of one count of strangulation. The defendant was sentenced in U.S. District Court in Duluth, Minn., on December 2, 2014.
As proven at trial, on the morning of July 18, 2013, ICEMAN assaulted his girlfriend by hitting her repeatedly and dragging her by her hair. During the assault, ICEMAN threw the victim onto the ground and strangled her with an article of clothing that he had torn from her body. As a result of the attack, the victim suffered swelling and bruising on her face and neck as well as bruising all over her body.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.
Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered during their lives than Caucasian women.
The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.
To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.
This case resulted from an investigation conducted by the Red Lake Tribal Police Department and the Federal Bureau of Investigation.
The case was prosecuted by Assistant U.S. Attorneys Manda M. Sertich and Deidre Y. Aanstad.
Defendant Information:
TERRY DEAN ICEMAN, 47
Ponemah, Minn.
Convicted:
• Strangulation, 1 count
Sentenced:
• 41 months in prisonPittston Man Sentenced to More Than Two Years in Federal Prison for His Role in A Heroin Trafficking ConspiracyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 22-year-old Pittston resident was sentenced today to serve 25 months in prison by Senior U.S. District Court Judge James M. Munley for his role in a heroin trafficking conspiracy that operated in Luzerne County during 2013 and early 2014.
According to United States Attorney Peter Smith, the defendant, Robert Romasiewicz, previously pleaded guilty to conspiring with Sal Biscotto, also of Pittston, and others to obtain heroin from suppliers in New Jersey and distribute it to customers in Luzerne County. Biscotto, who also pleaded guilty to participating in the conspiracy, is awaiting sentencing in the case.
Romasiewicz was charged in a criminal Information filed by the U.S. Attorney’s Office in April 2014, as a result of an investigation by the Federal Bureau of Investigation, the Luzerne County District Attorney’s Office, and Pittston Police.
Judge Munley also ordered that Romasiewicz spend three years on supervised release following his prison sentence, pay a $300 fine and a $100 special assessment.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Paterson City Council Member and Former City Council President Pleads Guilty to Agreeing to Accept and Accepting BribesRead the Press Release
NEWARK, N.J. – A Paterson City Council member and former council president today admitted accepting bribes from a purported developer in exchange for his official help, New Jersey U.S. Attorney Paul J. Fishman announced.
Anthony Davis, 50, of Paterson, New Jersey, pleaded guilty today before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of attempting to obstruct, delay and affect interstate commerce by extortion under color of official right.
According to documents filed in this case and statements made in court:
On April 20, 2012, Davis accepted $5,000 in cash from an individual who was cooperating with federal authorities and who purported to be an out-of-state real estate developer. Davis accepted the bribe in exchange for his official action as Paterson City Council president to foster the developer’s business interests in Paterson. Between July 6, 2012, and July 25, 2012, Davis had meetings with the developer, during which Davis discussed the possibility of accepting additional money from the developer in exchange for a letter from Davis to the developer’s lender indicating that the Paterson City Council supported the developer with respect to certain business endeavors in Paterson. On July 25, 2012, Davis agreed to accept and accepted $5,000 in cash from the developer in exchange for such a letter.
The extortion count to which Davis pleaded guilty is punishable by up to 20 years in prison and a fine of the greater of $250,000 or twice the gross pecuniary loss or gain from the offense. Sentencing is scheduled for March 18, 2015.
U.S. Attorney Fishman credited special agents of the FBI Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division.
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Defense counsel: Randy Davenport Esq., Piscataway, N.J.
Davis, Anthony Information
Owners of Orlando Health Care Clinic Charged with $3 Million Medicare Fraud SchemeRead the Press Release
Charges have been unsealed against husband and wife owners of an Orlando health care clinic for their roles in a fraud scheme that resulted in the submission of more than $3 million in allegedly fraudulent claims to Medicare.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida and Special Agent in Charge Derrick Jackson of the U.S. Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement after the defendants were taken into custody last night and this morning.
A federal grand jury in the Middle District of Florida returned an indictment on Nov. 19, 2014, against Juan Carlos Delgado, 58, and Nereyda Infante, 48, both of Orlando, Florida, charging them with one count of conspiracy to commit health care fraud, five counts of health care fraud, and one count of conspiracy to commit money laundering. According to the indictment, Delgado and Infante owned and operated Prestige Medical Services and Rehab Center, a health care clinic that purportedly provided medical services to Medicare Part B and Medicare Part C beneficiaries, and three other similarly named clinics that also purportedly provided medical services to Medicare Part C beneficiaries.
Between February 2012 and September 2014, the defendants allegedly submitted claims to Medicare that falsely represented that medical services were provided, medically necessary, and prescribed by a physician, when they were not. The health care fraud counts specifically allege fraudulent claims involving Pentostatin prescriptions, an expensive chemotherapeutic medication, that were not medically necessary, not prescribed by a physician, and not provided. The indictment also alleges that the defendants transferred proceeds obtained as the result of fraudulent claims and diverted them for their personal use. According to the indictment, the defendants obtained more than $1.8 million in proceeds from the alleged fraud.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The case is being investigated by the HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida. The case is being prosecuted by Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Owner of Nursing Agency Convicted of Multi-Million Dollar Fraud and Money Laundering SchemeRead the Press Release
BOSTON – After deliberating for less than four hours, a federal jury convicted the owner of a home nursing agency for fraudulently billing millions of dollars of services to Medicare and then laundering the proceeds. The jury also decided that the defendant’s $750,000 home in Natick is forfeitable because it was purchased with the fraud proceeds.
Following a 15-day trial, Michael Galatis, 63, was convicted of conspiracy to commit health care fraud, ten counts of health care fraud, and seven counts of money laundering. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Feb. 26, 2015.
The jury also found that Galatis used portions of the proceeds of the fraud scheme to purchase a $750,000 house in Natick in 2010. Over the course of 14 months, Galatis purchased the house, and paid off a mortgage, in increments including $50,000 and in excess of $100,000, until he owned it free and clear of a mortgage. The jury’s finding renders Galatis’s home forfeitable. In addition, the jury found that $50,000 contained in two bank accounts related to the fraud scheme is forfeitable.
Galatis, a registered nurse, owned and operated At Home VNA (AHVNA), a home health agency located in Waltham. The Medicare program pays for home health services under specified conditions. From 2006 to 2012, Galatis caused AHVNA to submit more than $27 million in false and fraudulent claims to Medicare, and Medicare paid AHVNA more than $20 million for home health services.
Galatis, along with his co-conspirator, trained AHVNA nurses to recruit older patients on Medicare who lived in large apartment buildings. Galatis held “wellness clinics” at these buildings where nurses convinced senior citizens to enroll with AHVNA and have a nurse visit them in their home. Galatis trained AHVNA nurses to manipulate the patients’ Medicare assessment forms to make it appear as though the patients qualified for Medicare home health services, when that was often not the case. The home health orders were signed by AHVNA’s paid medical director, Dr. Spencer Wilking, who has separately pleaded guilty to health care fraud.
The elderly patients’ primary care physicians were unaware that AHVNA was sending nurses to see their patients in their homes. A number of primary care physicians complained to Galatis and asked him to stop seeing the patients, but he ignored these complaints. Similarly, AHVNA’s nurses asked Galatis if they could stop seeing the patients, because they did not need home health services, but Galatis refused these requests as well.
In 2011, Medicare passed a new requirement that a physician certify that she or he had a face-to-face encounter with the patient about the need for home health care. Even after this regulation was enacted, Galatis continued to bill Medicare for millions of dollars of home health care even though Dr. Wilking continued to sign each order without examining any of the patients.
The charging statutes provide a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss resulting from the offense, and restitution to the Medicare program. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Dr. Wilking is scheduled to be sentenced on Feb. 3, 2015. Janice Troisi, also a registered nurse and the AHVNA clinical director, is expected to go to trial on June 22, 2015.
United States Attorney Carmen M. Ortiz; Philip Coyne, Special Agent in Charge of the U.S. Health and Human Services, Office of Inspector General, Office of Investigations; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys David S. Schumacher and Lisa A. Schlatz of Ortiz’s Health Care Fraud Unit. The trial team was also assisted by the New England Benefit Integrity Support Center, a fraud contractor for the Medicare program.
Ohio Woman Sentenced to Six Months in Prison, Six Months' Home Confinement, for Creating Fictitious Evidence to Obstruct A Federal InvestigationRead the Press Release
NEWARK, N.J. - An Ohio woman who claimed she investigates labor unions on behalf of attorneys was sentenced today to six months in prison and six months’ home confinement for impeding a federal investigation, U.S. Attorney Paul J. Fishman announced.
Debbie Shank Morgan, 58, of Euclid, Ohio, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging her with one count of obstruction of justice. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
In May 2012, Morgan contacted federal agents from the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (DOL-OIG) in New Jersey, a law enforcement agency that investigates allegations related to federal crimes, such as bribery and theft, involving labor unions, union officers, and employee benefit plans.
Morgan said she was a non-practicing lawyer who investigates crimes associated with labor unions, employee benefit plans and other alleged violations of federal criminal and civil law. Morgan said she had information that a former union officer and his father, both from an international labor union, had committed serious violations of federal law. She alleged they had embezzled $30 million from a political action committee (PAC) associated with the union.
Morgan provided federal agents with e-mails and other documents and items as evidence. She had, in fact, falsified, altered and created these items. Morgan provided federal agents with e-mails she claimed were evidence in support of her allegations. Federal agents then obtained a court-authorized search warrant and seized the actual e-mails transmitted through the service provider. The e-mails from the search warrant demonstrated that she had altered and fabricated the e-mails before giving them to federal agents. In September 2012, she claimed that an unknown individual had fired a weapon at her car while she was driving it in Ohio. Morgan then provided federal agents with two digital recordings, allegedly with the wife of the alleged shooter. In these consensual recordings, the wife admitted that her husband had fired a weapon at Morgan’s car. The recordings, however, were fabricated and created by Morgan and an unknown third party.
In addition to the prison term, Judge McNulty sentenced Morgan to serve three years of supervised release and fined her $5,000.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Region, under the direction of Special Agent in Charge Cheryl Garcia, for the investigation.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Jack A. Meyerson Esq., Philadelphia
Milwaukee-Area Attorney Charged in Federal Court with Defrauding Financial Institutions and Clients,Money Laundering, and Filing a False Tax ReturnRead the Press Release
United States Attorney James L. Santelle for the Eastern District of Wisconsin announced that, yesterday, a federal grand jury returned a 33-count indictment charging Sarah E.K. Laux a/k/a “Sarah Kitzke” (age 35) of Mequon, Wisconsin, with two counts of bank fraud, nine counts of wire fraud, one count of mail fraud, 20 counts of money laundering, and one count of filing a false tax return. If convicted of bank fraud, Laux faces a maximum penalty of up to 30 years’ imprisonment, a $1 million fine, and 5 years on supervised release. If convicted of mail fraud or wire fraud, Laux faces a maximum penalty of up to 20 years’ imprisonment, a $250,000 fine, and 3 years on supervised release.
The indictment charges Laux with defrauding four different clients to whom Laux provided trust and estates advice and to whose funds Laux gained access through her solo-practice law firm. According to the indictment, Laux defrauded those clients out of more than $2.2 million in funds that Laux then converted to her own use.Specifically, the indictment alleges that, between 2010 and 2012, Laux engaged in a scheme to defraud Carleen Vogel Guenther and her family’s corporation, Eilcar Corporation, by gaining access to their money and then, through misrepresentations and false pretenses, converting more than $1.6 million of their money to her own use. The indictment alleges that Laux used that money to buy residential real property and an insurance business and to pay Laux’s personal bills and bills of Laux’s law firm, Laux Law, LLC.
The indictment alleges that Laux also defrauded Associated Bank, N.A., and its subsidiary Associated Trust, N.A., which served as trustee of a trust of which Carleen Guenther was a beneficiary, by falsely representing to those financial institutions that Carleen Guenther needed a distribution from the trust to buy a condominium in a retirement home; causing those financial institutions to distribute the $450,000 for that purpose; and then converting the $450,000 to her own use. The indictment further alleges that Laux then prepared falsified documents and presented those falsified documents, and made false statements, to Associated Trust and Associated Bank to conceal that Laux had fraudulently converted the $450,000 in distributions from the trust to Laux’s own use.
The indictment also alleges that, during 2013, Laux defrauded two other estate-planning clients, a husband and wife, by embezzling approximately $584,000 of their investment monies after having promised to use their money to buy annuities.
The indictment further alleges that Laux engaged in money laundering transactions using proceeds of these fraud schemes and that Laux also filed a materially false and fraudulent personal income tax return for tax year 2010 on behalf of herself and her husband. According to the indictment, Laux falsely stated that her and her husband’s income for 2010 was $104,249, when in fact the amount was in excess of that amount.
According to United States Attorney Santelle: “The Department of Justice places a high priority on prosecuting financial crimes suspected to have been committed by persons who occupy positions of trust, such as attorneys, who abuse their clients’ trust to commit their offenses. This is especially so when the victims of the suspected offense are vulnerable because of age or infirmity and have relied upon their attorney to faithfully protect their financial interests and well being- only to have that trust exploited and abused." Santelle specifically commended the Internal Revenue Service and the Federal Bureau of Investigation for their highly professional and comprehensive investigation of this case.
Special Agent in Charge Shea Jones of the IRS Criminal Investigation St. Paul Field Office further stated: “Attorneys, and especially estate-planning attorneys, hold positions of trust in the eyes of their clients. Attorneys who embezzle their clients’ money breach that trust. IRS Criminal Investigation takes such allegations of attorney embezzlements very seriously and is committed to thoroughly investigating those attorneys who are suspected to have so victimized their clients.”The United States is also seeking forfeiture of residential property located in Mequon, Wisconsin, and two businesses – Lasting Legacy, LLC and Family Foundation, LLC – that Laux allegedly purchased with proceeds of her alleged fraud schemes, as well as the remaining proceeds of those alleged schemes.
The case is being investigated by Special Agents of the IRS Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Scott J. Campbell is prosecuting the case.
An indictment is merely the formal method of charging an individual and does not create an inference of her guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.Miami Resident Pleads Guilty to Unauthorized Possession of Stolen IdentitiesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Steve Steinberg, Chief, Aventura Police Department, announce that Perized Oquieno Adams, a/k/a “Kevin Wilson,” 38, of Miami, pled guilty to one count of conspiracy to possess fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(b)(2), and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2. Sentencing is scheduled for February 9, 2015 before U.S. District Judge Jose E. Martinez. At sentencing, Adams faces up to five years in prison for the unauthorized access device charge, and a mandatory term of two years in prison, consecutive to any other term in prison, for the aggravated identity theft charge.
On April 30, 2014, co-defendant Charles Osasumwen Obasuyi, 39, of Miami, was sentenced to 36 months in prison, followed by 3 years of supervised release, and was ordered to pay restitution of $110,708.77. Obasuyi previously pled guilty to one count of conspiracy to possess fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(b)(2), and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2.
According to court documents, law enforcement observed the defendant approach the Chase Bank ATM machine in the Aventura Mall parking lot and conduct what appeared to be a suspicious transactions. After leaving the ATM machine, the defendant entered the passenger side of a White Chevy Equinox with heavily tinted windows. Law enforcement conducted a traffic stop of the vehicle and observed a white envelope on the driver, Obasuyi’s’ lap. The detectives also observed an additional white envelope in the driver’s side door of the vehicle and a bundle of $20.00 bills scattered in the center console of the vehicle. Inside of both envelopes were multiple credit/debit cards and United States currency.
When approached by law enforcement, Adams’ told the officers that his name was “Kevin Wilson”. When his identity could not be confirmed, Adams was taken into custody for obstruction of justice. During an inventory search of the vehicle, officers recovered approximately $8,900.00 in U.S currency from the vehicle and an additional $140.00 in Adams’ pocket. Officers also recovered fifteen debit cards in names other than Adams and Obasuyi and an ATM withdrawal receipt in the amount of $200 from a Regions Bank located in North Miami Beach. Adams’ fingerprints and palm prints were recovered from both envelopes.
Mr. Ferrer commended the investigative efforts of IRS-CI and the Aventura Police Department. The case is being prosecuted by Assistant U.S. Attorney Maurice A. Johnson.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mexican National Pleads Guilty to Selling Fake Identification, Illegal Reentry to the U.S.Read the Press Release
SHREVEPORT, La. –United States Attorney Stephanie A. Finley announced that a Mexican national pleaded guilty Tuesday to his role in a scheme to sell counterfeit identification and also to illegally reentering the United States. A second Mexican national pleaded guilty to hiring an illegal alien.
Nazario Flores-Cordero, 44, of Mexico, pleaded guilty to one count of fraud and misuse of visas, permits and other documents; one count of false representation of a Social Security account number; and one count of illegal re-entry to the United States following deportation. Jesus Francisco Herrera-Gonzalez, 36, also of Mexico, pleaded guilty to one count of encouraging or inducing Nazario Flores-Cordero, an illegal alien, to reside in the United States by employing him. They pleaded guilty before U.S. District Judge S. Maurice Hicks.
According to the evidence presented at the guilty pleas, Flores-Cordero sold counterfeited or altered fake permanent resident cards and Social Security cards from October 2011 to May of 2014 in the Shreveport/Bossier City area that were to be used to falsely show that illegal aliens were lawfully in the United States and could be employed. Each counterfeit permanent resident card showed the name of the individual and photograph of the individual to be employed. Each counterfeit Social Security card falsely used and represented a Social Security account number not assigned to the individual named on the card. Flores-Cordero was also found to be illegally in the United States after he was last removed from the United States to Mexico in 2013.
Flores-Cordero faces five years in prison for fraud and for false Social Security number representation, plus two years in prison for illegal re-entry. Herrera-Gonzalez faces five years in prison. Both face one to three years of supervised release and a $250,000 fine for each count. The court can also order them deported. A sentencing date of March 23, 2015 was set.
United States Immigrations and Customs Enforcement-Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie Jr. is prosecuting the case.
Metairie Man Pleads Guilty to Making False Statements on Tax ReturnRead the Press Release
U.S. Attorney Kenneth A. Polite announced that TIMOTHY DUCKWORTH, age 47, of Metairie, pleaded guilty today to making false statements on income tax returns.
According to court documents, DUCKWORTH made false statements on his tax return for the year 2007 under-reporting his income in the amount of approximately $610,495, which resulted in DUCKWORTH having taxes due and owing in the amount of approximately $213,579.
DUCKWORTH faces a maximum term of imprisonment of three years in prison, one year of supervised release after any term of imprisonment and a $100,000 fine. U.S. District Judge Ivan L.R. Lemelle scheduled sentencing for March 25, 2015.
U.S. Attorney Polite praised the work of the Internal Revenue Service – Criminal Investigations and the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
Maui Resident Sentenced for Fraud and Tax Charges Related to Debt Elimination SchemeRead the Press Release
HONOLULU -- A federal judge sentenced Mahealani Ventura-Oliver, 44, formerly of Maui, to 78 months of imprisonment on December 1, for her role in marketing a debt elimination and tax scheme between 2008 and 2009. District Judge J. Michael Seabright also ordered Ventura-Oliver to pay $424,534 in restitution to the victims of her offenses. In October 2013, after an 11-day trial, the jury found Ventura-Oliver guilty of conspiring to use fictitious financial instruments, 15 counts of mail fraud, one count of money laundering, one count of conspiring to submit false tax returns seeking $1.5 million in refunds from the IRS, and submitting one false tax return.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to evidence produced in court, Ventura-Oliver and others were part of a group known as Ko Hawaii Pae Aina, the Registry and Hawaiiloa Foundation. Between 2008 and 2009, the group held weekly seminars on Maui, where Ventura-Oliver and others spoke about Hawaiian history and culture, and royal land patents. The evidence showed that, in return for the payment of a fee, the group offered to provide distressed homeowners with “bonds” and other documents that would pay off their mortgages and forestall collection efforts. The “bonds” purportedly directed the United States Treasury Department or the State of Hawaii Comptroller of the Currency to make payments on behalf of the homeowners.
According to evidence presented at the trial, Hawaiiloa Foundation collected approximately $468,000 from approximately 200 individuals who went through the debt elimination process. Many of the individuals tried to use the bonds but ultimately lost their homes through foreclosure, or had to renegotiate loans. The government presented evidence that, as part of its process, the Hawaiiloa Foundation also promoted a tax program whereby participants supposedly could seek refunds from the IRS for debts paid off with the purported bonds.
At yesterday’s sentencing hearing, Judge Seabright said Ventura-Oliver portrayed herself as an expert in Hawaiian culture and history, and “sold herself as wanting to help Native Hawaiians.” The judge found that Ventura-Oliver actually knew that her program did not work but preyed on the vulnerabilities of her participants.
Ventura-Oliver was the last of four defendants sentenced in the case. Her estranged husband, John Oliver, who pled guilty, and Pilialoha Teves were previously sentenced to jail terms of 42 months, and Lehua Hoy was sentenced to a three year term of probation. The court earlier had ordered that certain property derived from the offenses be forfeited to the United States. The property included approximately $84,000 in cash, more than $18,000 seized from bank accounts, gold coins worth over $36,000, and vehicles.
The investigation of this case was conducted jointly by the Federal Bureau of Investigation, the Internal Revenue Service -- Criminal Investigation, the United States Postal Inspection Service, and the Maui Police Department. The prosecution was handled by Assistant U.S. Attorney Larry Tong and former Assistant U.S. Attorney Michael Nammar.
Maryland Man Pleads Guilty to Traveling into the District of Columbia to Engage in Illicit Sexual Conduct with A Minor and Possession of Child PornographyRead the Press Release
WASHINGTON – Steven Sollera, Jr., 39, of Edgewood, Md., pled guilty today to charges of traveling interstate to engage in illicit sexual conduct with a minor and possession of child pornography, announced U.S. Attorney Ronald C. Machen Jr., Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Sollera entered the guilty plea in the U.S. District Court for the District of Columbia. The Honorable Tanya S. Chutkan is to sentence him on April 7, 2015. Sollera faces a statutory maximum of 30 years of imprisonment for traveling interstate to engage in illicit sexual conduct and a maximum of 20 years of imprisonment for possession of child pornography, as well as a fine of $250,000 on each count.
According to the government's evidence, on June 5, 2014, Sollera contacted an undercover officer with the FBI's Child Exploitation Task Force, through a social network site. Over the next few days, Sollera engaged in communications with the undercover officer, whom the defendant believed was the father of an under-aged girl. During this time, Sollera arranged with the undercover officer to meet for the purpose of engaging in sexual acts with the child.
During the course of their communications, Sollera provided links containing 22 still images and 14 videos of child pornography. On June 10, 2014, he traveled from Maryland to a pre-arranged meeting place in Washington, D.C to have sex with the purported child. When he arrived at the meeting place, he was arrested.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge McCabe, and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of Assistant U.S. Attorney Ari Redbord, who is prosecuting the case.
14-268Man Charged and Taken into Custody for Adams County Investment Fraud SchemeRead the Press Release
The United States Attorney for the Middle District of Pennsylvania announced today the unsealing of an indictment of Jorge Salazar, a/k/a J. Michael Salazar, for wire fraud.
Salazar, age 54, a resident of Georgia, was indicted on November 12, 2014 for defrauding approximately ten investors from Adams County, Pennsylvania. The indictment was sealed pending the arrest of Salazar. The investment scheme netted Salazar approximately $350,000 during a six-month period. As part of the scheme, Salazar passed himself off as a licensed attorney and investor from Atlanta, Georgia. According to Salazar, the funds he received were guaranteed to yield a return of three times the initial investment. The money turned over to Salazar was not invested by him, but rather misappropriated for his own personal needs. On November 20, 2014, agents of the FBI and IRS-CI arrested Salazar in Kentucky. A federal Magistrate Judge in Kentucky ordered that Salazar be detained and transported to Harrisburg, Pennsylvania, to face the federal charges.
The investigation was conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Joseph J. Terz.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 20 years' imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
(Salazar indictment)
Local Businessman Pleads Guilty to Tax EvasionRead the Press Release
SAN DIEGO – Ho Sung Lim, owner of three Cricket Wireless outlets in San Diego County, pleaded guilty in federal court today to a tax evasion charge, admitting that he used a number of methods to avoid paying income and employment taxes to the Internal Revenue Service.
According to his plea agreement, Lim acknowledged that he failed to report income from his business; he paid employees in cash and underreported their wages to avoid payroll taxes; and he paid personal expenses from a corporate account – all of which lowered his tax bill by more than $160,000 over four years.
Lim’s plea was accepted by U.S. Magistrate Judge Mitchell D. Dembin and is subject to final approval by U.S. District Court Judge Larry A. Burns. He was charged via information today.
“We all have to pay our fair share of taxes,” said U.S. Attorney Laura Duffy. “Anyone who deliberately shirks this obligation takes a big risk, as Mr. Lim has learned.”
Erick Martinez, IRS Criminal Investigation’s Special Agent in Charge said, “Business owners have a responsibility to pay their fair share of taxes—both income and employment—and remit those taxes to the Internal Revenue Service. The failure to do so is a very serious offense. Those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t.”
According to his plea agreement, Lim admitted that on several occasions between 2009 and 2012 he skipped his duty to file Employer’s quarterly Federal Tax Return, Form 941 (“Payroll Taxes”), on behalf of his business Telecell, Inc. Lim admitted that he attempted to evade or defeat the payment of Payroll Taxes by various means, including, but not limited to paying employees from his business, Telecell, Inc., in cash, and without reporting to the IRS the full amount of income he paid to those employees.
DEFENDANTS Case Number: 14cr3484-LAB Ho Sung Lim Age: 47 San Diego, California CHARGESTax Evasion – Title 26 U.S.C., Section 7201
INVESTIGATING AGENCY
Maximum Penalty: 5 years’ imprisonment; $100,000 fine; costs of prosecution.Internal Revenue Service Criminal Investigation
*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
- Local Businessman Convicted of Transporting and Sexually Assaulting Female Employee
Leader of A Violent Crew Convicted of Racketeering and Six MurdersRead the Press Release
Earlier today, following five weeks of trial, a federal jury in Brooklyn, New York, returned guilty verdicts against Christian John and Marvin Johnson. John was the leader of a violent criminal enterprise called the “Hull Street Crew,” that was found to be responsible for six murders, two attempted murder, armed robberies, murder-for-hire, narcotics distribution, and gambling on dog fighting, all of which occurred in the Bushwick, Bedford-Stuyvesant, and East New York areas of Brooklyn. Johnson committed a brutal murder with John that the jury found to have aided the criminal enterprise. When sentenced by United States Senior District Judge Frederic Block, both defendants face mandatory life sentences.
The verdicts were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and William J. Bratton, Commissioner, New York City Police Department.
United States Attorney Lynch extended her grateful appreciation to the FBI and the New York City Police Department for their outstanding assistance in this case.
Christian John was found guilty of the 2000 murder of Charlemagne Lormand, the 2008 murder of Barry Haynes, the 2008 murder of Daquane Shelton and the 2011 murders of Jason Bostic and Aaron Formey. Both defendants were found guilty of the 2006 murder of Earle Kevin Obermuller. During the Obermuller murder, the defendants lured the victim to an abandoned building where they duct taped his entire head and watched him suffocate to death. The defendants then set him on fire. During the 2011 murders of Jason Bostic and Aaron Formey, the defendant Christian John ordered his crew members to bind the victims with duct tape and to kill them. Among his many other crimes, Christian John was also found guilty of assaulting a crew member by tying him up and pouring scalding water over his body.
The government’s case was prosecuted by Celia A. Cohen, Soumya Dayananda, and Robert T. Polemeni.
The Defendants:
CHRISTIAN KESTON JOHN
Age: 30
Brooklyn, N.Y.
MARVIN JOHNSON
Age: 30
Brooklyn, N.Y.
Laplace Man Pleads Guilty to Fraudulent Claims for Oil Spill CompensationRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CHARLIE ENGLISH, age 33, a resident of LaPlace, pled guilty today to one count of conspiracy to commit wire fraud relating to fraudulent applications he made or caused to be made to the Gulf Coast Claims Facility (GCCF) for financial assistance during the aftermath of the Deepwater Horizon oil spill.
According to court documents, the GCCF made disaster assistance money available to individuals and businesses affected by the oil spill resulting from the Deepwater Horizon explosion. The GCCF required individuals to verify loss of income. ENGLISH worked as a claims adjuster for the GCCF. Beginning in or about September 2010, ENGLISH, provided fraudulent documentation to his co-conspirators who posed as claimants, and submitted and/or caused to be submitted, via the internet, false claims for loss earnings representing that the claimants were employed in a commercial fishing business before the oil spill when in fact the claimants did not work in the commercial fishing industry. ENGLISH was to share in the claim proceeds in exchange for his assistance with the claims. Based on the fraudulent documentation, the GCCF issued approximately $257,400 to undeserving individuals.
ENGLISH faces a maximum term of imprisonment of five years, a $250,000 fine, and three years of supervised release following imprisonment. U.S. District Judge Helen G. Berrigan scheduled sentencing for March 11, 2015.
This case was brought as part of this District’s partnership with the National Center for Disaster Fraud (NCDF), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected] or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
U.S. Attorney Polite praised the work of the U.S. Postal Inspection Service and the U.S. Secret Service in investigating this matter. Assistant U.S. Attorney Julia K. Evans is in charge of the prosecution.
Lakeville Food Packaging Plant Employee Indicted for Conspiring to Defraud Company for More Than $1.8 MillionRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of CHARLES MICHAEL COLES, 43, and others, for conspiring to defraud an Illinois-based food packaging and processing company for more than $1.8 million. COLES was employed as a buyer/inventory coordinator for the Illinois-based company, and was responsible for maintaining the parts inventory of a food packaging plant located in Lakeville, Minn. The defendants are expected to make initial appearances on December 15, 2014, in U.S. District Court in Saint Paul, Minn.
According to the indictment and documents filed in court, from at least 2011 until November 14, 2014, COLES was responsible for ordering parts, submitting purchase orders, receiving shipments of parts, and maintaining the parts inventory at the Lakeville, Minn., plant of a food packaging and processing company. COLES devised a scheme to defraud his employer by submitting false invoices for industrial supplies and parts purportedly supplied by several fictitious industrial supply companies.
According to the indictment and documents filed in court, COLES conspired with and recruited his co-conspirators, STEVE CROOK, AARON ASH, DARREN GARDNER, JACQUELINE ROBINSON, and WILLIAM DAMPIER, to create fictitious industrial supply companies. COLES then submitted fraudulent purchase orders and invoices to his employer from each of his co-conspirators’ fictitious companies. After COLES’ employer paid the fraudulent invoices, each co-conspirator split the proceeds with COLES.
According to the indictment and documents filed in court, between April 2011 and October 2014, CROOK owned a fictitious company called Karlvelous Supply. The only address for Karlvelous Supply was a rented mailbox inside a UPS Store in White Bear Lake, Minn. COLES and CROOK caused approximately $582,224 to be paid to Karlvelous Supply on the basis of false and fraudulent invoices submitted by COLES, and COLES and CROOK split the proceeds of these fraudulent payments.
According to the indictment and documents filed in court, between October 2011 and October 2014, ASH owned a fictitious company called Rubber-Steel Products, LLC. The only address for Rubber-Steel Products, LLC, was a rented mailbox inside a UPS Store in Brooklyn Center, Minn. COLES and ASH caused approximately $512,218 to be paid to Rubber-Steel Products on the basis of false and fraudulent invoices submitted by COLES, and COLES and ASH split the proceeds of these fraudulent payments.
According to the indictment and documents filed in court, between January 2012 and October 2014, GARDNER owned a fictitious company called DG Automation Controls, LLC. The only address for DG Automation Controls, LLC, was a rented mailbox inside a UPS Store in Eden Prairie, Minn. COLES and GARDNER caused approximately $409,191 to be paid to DG Automation Controls on the basis of false and fraudulent invoices submitted by COLES, and COLES and GARDNER split the proceeds of these fraudulent payments.
According to the indictment and documents filed in court, between January 2013 and November 2014, ROBINSON owned a fictitious company called Tessman Industrial Supply, LLC. The only address for Tessman Industrial Supply, LLC, was a rented mailbox inside a UPS Store in Saint Paul, Minn. COLES and ROBINSON caused approximately $253,881 to be paid to Tessman Industrial Supply on the basis of false and fraudulent invoices submitted by COLES, and COLES and ROBINSON split the proceeds of these fraudulent payments.
According to the indictment and documents filed in court, between June 2014 and November 2014, DAMPIER owned a fictitious company called A-Z Industrial Supply Co., LLC. The only address for A-Z Industrial Supply Co., LLC., was DAMPIER’S home address in Phoenix, Ariz. COLES and DAMPIER caused approximately $47,666 to be paid to A-Z Industrial Supply Co., on the basis of false and fraudulent invoices submitted by COLES, and COLES and DAMPIER split the proceeds of these fraudulent payments.
This case is the result of an investigation conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, the Internal Revenue Service – Criminal Investigations, and the Lakeville Police Department.
This case is being prosecuted by Assistant U.S. Attorney Joseph H. Thompson.
Defendant Information:
CHARLES MICHAEL COLES, 43
Otsego, Minn.
Charges:
• Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 5 counts
STEVE KARLVELOUS CROOK, 43
Maplewood, Minn.
Charges:
• Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 count
AARON ARTHUR ASH, 42
Minneapolis, Minn.
Charges:
• Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 count
DARREN LAMONT GARDNER, 42
Unknown
Charges:
• Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 count
JACQUELINE ROBINSON, 46
Saint Paul, Minn.
Charges:
• Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 count
WILLIAM CURTIS DAMPIER, 32
Phoenix, Ariz.
Charges:
• Conspiracy to Commit Mail Fraud, 1 count
• Mail Fraud, 1 countJustice Department Reaches Settlement with Franciscan St. James Health to Stop Discrimination Against Persons with Hearing DisabilitiesRead the Press Release
The Justice Department announced today a settlement with Franciscan St. James Health (St. James), to ensure that patients and companions who are deaf or hard of hearing receive sign language interpreters and other services necessary to ensure effective communication, in compliance with Title III of the Americans with Disabilities Act (ADA). St. James is a healthcare system providing comprehensive healthcare in Illinois including hospitals in Chicago Heights and Olympia Fields. This settlement is part of the department’s Barrier-Free Health Care Initiative (initiative), a partnership of the Civil Rights Division and U.S. Attorney’s offices across the nation to ensure that people with disabilities, including those who are deaf or hard of hearing, who have HIV, and who have mobility disabilities, have equal access to medical services.
The settlement with St. James is the fourth under the initiative since the start of the new fiscal year on Oct. 1, 2014, joining agreements signed in Edmonds, Washington; Stafford and Lake Ridge, Virginia; and Vero Beach, Florida. Since its launch three years ago, the department has reached 25 agreements under the initiative.
The agreement was reached after the department investigated a complaint that a patient who is deaf was denied a sign language interpreter throughout her four day stay in the hospital. Title III of the ADA requires health care providers to ensure that their communications with people with hearing disabilities are as effective as their communications with people without disabilities.
Under the settlement agreement, St James will ensure that the hospitals:
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Provide auxiliary aids and services, including sign language interpreters, to people who are deaf or hard-of-hearing, within prescribed time frames and free of charge;
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Designate an ADA Administrator;
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Utilize their grievance resolution systems to investigate disputes regarding effective communication with deaf and hard of hearing patients;
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Post notices of their effective communication policy;
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Train hospital personnel on the effective communication requirements of the ADA;
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File compliance reports with the Department of Justice; and
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Pay damages in the amount of $70,000.00 to the complainant in this case.
“Next year as we mark the 25th anniversary of the enactment of the ADA, we will celebrate a quarter century of progress in eliminating the barriers that have historically kept people with disabilities from equal access to and the full enjoyment of services readily available to persons without disabilities,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “But we must also acknowledge that even after all this time, there is still much to be done. Effective communication in healthcare is one of those critical areas.”
The department has a number of publications available to assist entities to comply with the ADA, including a Business Brief on Communicating with People Who Are Deaf or Hard of Hearing in Hospital Settings, www.ada.gov/hospcombr.htm, and publications specific to health care providers, HIV discrimination, and effective communication with people with hearing and vision disabilities, as well as publications about tax credits available for providing access.
For more information on the ADA and to access these publications, visit www.ada.gov. For more information on the Barrier Free Health Care Initiative visit www.ada.gov/usao-agreements.htm. Those interested in finding out more about this settlement or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected].
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- Jury Convicts Man for Illegally Reentering the United States
Judge Sends 68-Year Old Child Predator to Prison for 15 YearsRead the Press Release
PHILADELPHIA - Thomas Rafferty, 68, of Levittown, PA, was sentenced today to 15 years in prison for taking sexually explicit pictures of young girls. The investigation began when one of the victims reported the abuse nine years after the events. Agents of Immigration and Customs Enforcement Homeland Security Investigations were able to resurrect the “cold case” and obtain a search warrant for the defendant’s residence. In a computer, the agents found the images that the victim had described. Three victims testified at today’s sentencing about the impact of Rafferty’s action on their lives. Rafferty pleaded guilty July 15, 2014.
In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered three years of supervised release and a $100 special assessment.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations, with assistance from the Naval Criminal Investigative Service and was prosecuted by Assistant United States Attorney Michael L. Levy.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Jefferson City Man Pleads Guilty to Meth ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., man pleaded guilty in federal court today to his role in a conspiracy to distribute methamphetamine.
John Albert Overstreet, 35, of Jefferson City, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to the charge contained in a Feb. 12, 2014, federal indictment.
By pleading guilty today, Overstreet admitted that he participated in the conspiracy to distribute methamphetamine in Cole County, Mo., in January 2014.
Law enforcement officers, who had conducted several undercover drug transactions with Overstreet, executed a search warrant at two Jefferson City apartments on Jan. 10, 2014. When the door to one of the apartments was breached, Overstreet was seen standing in the hallway. Overstreet ran into a bedroom, where he attempted to conceal something down the front of his pants. Officers removed the object, which was determined to be a bag containing 14 smaller bags of methamphetamine totaling 195 grams.
Overstreet admitted that he traveled to the Joplin, Mo., area twice to receive at least seven ounces of methamphetamine (for which he paid $6,000 per trip) as directed by co-defendant Jose Manuel Escobedo, 40, of Springfield, Mo. Escobedo has also pleaded guilty to his role in the conspiracy.
Co-defendant Victoria Elizabeth Voisard, 26, of Fulton, Mo., has pleaded guilty to one count of distributing crack cocaine and one count of distributing methamphetamine.
Under federal statutes, Overstreet is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 40 years in federal prison without parole, plus a fine up to $5 million. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Stuart Zander. It was investigated by the Drug Enforcement Administration, the Jefferson City, Mo., Police Department and MUSTANG (the Mid-Missouri Unified Strike Team and Narcotics Group).Investment Managers Sentenced in Manhattan Federal Court for Several Hundred Million-Dollar Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that STEPHEN WALSH and PAUL GREENWOOD, investment managers and principals of WG Trading Company, LP, and WG Trading Investors, were sentenced in Manhattan federal court in connection with a fraudulent commodities trading and investment advisory scheme. WALSH was sentenced to 20 years in prison, and GREENWOOD was sentenced to 10 years in prison. WALSH and GREENWOOD ran a fraudulent commodities trading and investment advisory scheme that raised billions of dollars, misappropriated hundreds of millions of those dollars for their own personal benefit, and then created false promissory notes and account statements to conceal their theft. WALSH pled guilty on April 25, 2014, and was sentenced on October 29, 2014, by United States District Judge Miriam Goldman Cedarbaum. GREENWOOD pled guilty pursuant to a cooperation agreement on July 28, 2010, and was sentenced today by Judge Cedarbaum.
Manhattan U.S. Attorney Preet Bharara said: “Stephen Walsh and Paul Greenwood ran an investment operation that purported to follow a conservative strategy but was in fact mostly fictional. They stole hundreds of millions of dollars of investors’ funds – much of it from sophisticated institutional investors – and lied to conceal their theft. Now they are answering for their massive fraud, and they will have to forfeit their ill-gotten gains and their freedom”
According to the Indictment, other documents filed in Manhattan federal court, and statements made during court proceedings:
From at least 1996 through February 2009, WALSH and GREENWOOD solicited $7.6 billion in investor funds on the understanding that they would invest the funds in a program called “equity index arbitrage,” which they represented was a conservative trading strategy that had outperformed the results of the S&P 500 Index for more than 10 years. As a result, several institutional investors – including charitable and university foundations, retirement and pension plans, and other institutions – invested billions of dollars. Investors either became limited partners in WG Trading Company or received promissory notes issued by WG Trading Investors that WALSH and GREENWOOD represented would pay interest at a rate equal to the investment returns earned by a limited partner of WG Trading Company.
Contrary to their representations to investors, WALSH and GREENWOOD misappropriated hundreds of millions of dollars in investor funds for their own personal use and to satisfy obligations on investments that were unrelated to the “equity index arbitrage” trading business. WALSH and GREENWOOD executed promissory notes in favor of WG Trading Investors to, among other things, conceal trading losses and their misappropriation of investor funds. These promissory notes materially misstated the financial condition of WG Trading Company and misled investors. WALSH and GREENWOOD also created and caused others to create false account statements that were sent to clients to reflect fictitious returns consistent with the returns that had been promised to those clients.
In addition to the prison sentence, WALSH, 69, of Sands Point, New York, was sentenced to three years of supervised release, and ordered to forfeit $50,743,779; and GREENWOOD, 67, of Southern Pines, North Carolina, was sentenced to three years of supervised release, and ordered to forfeit $83.5 million. The Court further ordered restitution to be paid by both WALSH and GREENWOOD in an amount to be determined.
On July 21, 2009, Deborah Duffy, the former Chief Compliance Office of WG Trading Company, pled guilty to conspiracy, securities fraud, and money laundering for her role in the fraud scheme. Duffy’s sentencing is set for January 8, 2015.
Mr. Bharara praised the work of the Federal Bureau of Investigation, and thanked the United States Securities and Exchange Commission, the United States Commodity Futures Trading Commission, and the National Futures Association for their assistance.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jessica A. Masella and Benjamin Naftalis are in charge of the prosecution.
Identity Trafficker in Puerto Rico Sentenced to 81 Months in PrisonRead the Press Release
A leader of a Puerto Rican identity trafficking organization was sentenced today to serve 81 months in prison.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodríguez-Vélez of the District of Puerto Rico, Principal Deputy Assistant Secretary Thomas S. Winkowski of U.S. Immigration and Customs Enforcement (ICE), Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS), Director Bill A. Miller of the U.S. State Department’s Diplomatic Security Service (DSS) and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.
Enrique Rogelio Mendez-Solis aka Rogelio Quero-Mendez, Roberto Marquez-Prada, 40, a Mexican national formerly of Seymour, Indiana, was sentenced today by U.S. District Judge Juan M. Pérez-Giménez in the District of Puerto Rico for his leading role in trafficking the identities and corresponding identity documents of Puerto Rican U.S. citizens. Judge Pérez-Giménez also ordered the defendant to serve three years of supervised release and to forfeit $422,793 in illegal proceeds. Mendez-Solis illegally entered the United States and the government will seek his deportation following the service of his prison sentence. On Dec. 3, 2013, Mendez-Solis pleaded guilty to one count of conspiracy to commit identification fraud, one count of conspiracy to commit human smuggling for financial gain and three counts of aggravated identity theft.
According to court documents, individuals located in the Savarona area of Caguas, Puerto Rico, obtained Puerto Rican identities and corresponding identity documents. Other conspirators located in various cities throughout the United States solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. The identity brokers in the United States ordered the identity documents from the document suppliers in Savarona on behalf of their customers by making coded telephone calls. The conspirators were charged with using text messages, money transfer services and express priority or regular U.S. mail to complete their illicit transactions.
Court documents allege that some of the conspirators assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation. Their customers generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses. Some customers obtained the documents to commit financial fraud and attempted to obtain a U.S. passport. According to court documents, the organization trafficked at least 1,500 identities.
Various identity brokers were operating in Rockford, DeKalb and Aurora, Illinois; Seymour, Columbus and Indianapolis, Indiana; Hartford, Connecticut; Clewiston, Florida; Lilburn and Norcross, Georgia; Salisbury, Maryland; Columbus and Fairfield, Ohio; Dorchester, Lawrence, Salem and Worcester, Massachusetts; Grand Rapids, Michigan; Nebraska City, Nebraska; Elizabeth, New Jersey; Burlington and Hickory, North Carolina; Hazelton and Philadelphia, Pennsylvania; Houston, Texas; Abingdon and Albertville, Alabama; and Providence, Rhode Island.
To date, 53 individuals have been charged for their roles in the identity trafficking scheme. All 49 arrested defendants have pleaded guilty and 46 defendants have been sentenced, including:
• Jorge Luis “Daniel” Mendez, 38, a Dominican national formerly of Rio Piedras, Puerto Rico, sentenced to 75 months in prison on April 28, 2014, followed by 3 years of supervised release;
• Daniel Aparicio-Lara, 30, a Mexican national formerly of Burlington, North Carolina sentenced to 65 months in prison on Dec. 18, 2012, followed by 3 years of supervised release;
• Rafael Joaquin Beltre-Beltre, 36, a Dominican national formerly of Caguas, Puerto Rico, sentenced to 63 months in prison on Sept. 4, 2012, followed by deportation;
• Wilfredo Blanco-Diaz, 41, a Dominican national formerly of Caguas, Puerto Rico, sentenced to 61 months in prison on March 11, 2014, followed by deportation;
• Jose Sergio Garcia-Ramirez, 39, a Mexican national formerly of Rockford, Illinois, sentenced to 54 months in prison on Nov. 26, 2012, followed by deportation;
• Moises Lara-Ceballos, 37, a Mexican national formerly of Seymour, Indiana, sentenced to 54 months in prison on Jan. 21, 2014, followed by deportation; and
• Wilson Antonio Hernandez-Fernandez, 40, a Dominican national formerly of Caguas, Puerto Rico, sentenced to 48 months in prison on Feb. 4, 2014, followed by 3 years of supervised release.
The charges are the result of Operation Island Express, a nationally coordinated investigation led by the ICE Homeland Security Investigations’ (ICE-HSI) Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office and the DSS Resident Office in Puerto Rico. The Illinois Secretary of State Police; Elgin, Illinois Police Department; Seymour, Indiana Police Department and Indiana State Police provided substantial assistance. The ICE-HSI Assistant Attaché office in the Dominican Republic and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS-CI offices around the country provided invaluable support.
The case is being prosecuted by Trial Attorneys James S. Yoon, Hope S. Olds, Courtney B. Schaefer, and Christina Giffin of the Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of the Criminal Division’s Asset Forfeiture and Money Laundering Section and the support of the U.S. Attorney’s Office for the District of Puerto Rico. The U.S. Attorney’s Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, District of Massachusetts, District of Nebraska, Middle District of North Carolina, Southern District of Ohio, Middle District of Pennsylvania, District of Rhode Island, Southern District of Texas and Western District of Virginia provided substantial assistance.
Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html. Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline. Anyone who may have information about particular crimes in this case should also report them to the ICE tip line or website.
Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft. Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html; www.ssa.gov/pubs/10064.html; www.fbi.gov/about-us/investigate/cyber/identity_theft; and www.irs.gov/privacy/article/0,,id=186436,00.html.