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Thursday 6 November 2014
New Orleanian, Lionel Thomas, Indicted for Violations of the Federal Controlled Substances ActRead the Press Release
U.S. Attorney Kenneth A. Polite announced that LIONEL THOMAS, age 30, a resident of New Orleans, was charged today in a one count indictment for violations of the federal controlled substances act.
According to the indictment, THOMAS possessed with the intent to distribute one kilogram or more of a mixture or substance containing a detectable amount of heroin, a Scheduled I drug controlled substance.
If convicted, THOMAS faces a maximum term of imprisonment of ten years to life, a fine of $10,000,000 and five years of supervised release following any term of imprisonment.
U. S. Attorney Polite reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration (DEA) and the Federal Bureau of Investigation (FBI) in investigating this matter. Assistant United States Attorney David Haller is in charge of this prosecution.
(Download Indictment )
New Mexico Man Pleads Guilty to Charges of Sexual Assault of Female Inmates in His CustodyRead the Press Release
John Greene, 70, a former captain at the Gallup-McKinley Adult Detention Center (GMADC), entered a guilty plea to charges related to the sexual assaults of female inmates in his custody. Greene pleaded guilty to three counts of violating each of the victim’s right to bodily integrity by engaging in sexual contact against their will. Greene also pleaded guilty to two counts of making material false statements to the FBI when he denied both touching the breasts of one female inmate and having personal contact with another female inmate.
According to court documents, Greene admitted that in his capacity as a captain at GMADC, he had regular access to female inmates when he accompanied them to court hearings, transported them to other facilities, and had them brought to his office. This regular access gave him the opportunity to engage in unwanted sexual contact with three different women in December 2008 and January 2009. Greene committed these acts, knowing it was wrong, against the law and without the victims’ consent, but he did so anyway for his own gratification.
Greene also admitted that he lied to the FBI about his conduct on two occasions.
Under the terms of the plea agreement, Greene will be sentenced to five years of probation. As part of the plea agreement, Greene will forfeit his law enforcement certification and must comply with sex offender registration requirements.
A sentencing hearing has not yet been set.
This case is being investigated by the Gallup Resident Agency of the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Holland S. Kastrin for the District of New Mexico and Fara Gold of the Civil Rights Division of the U.S. Department of Justice.
Mortgage Fraud Ring SentencedRead the Press Release
ATLANTA – Patrice Hairston, Bonnie Rose, Sarah Hyldahl, and Ronnika Allen have been sentenced for their roles in a scheme to defraud mortgage lenders of over $2 million in mortgage loans.
“Mortgage fraud has dragged down our economy, blighted our communities, and put in jeopardy the financial security of many Americans. We will diligently pursue those who misuse the dream of home ownership to line their own pockets by fraud and deceit,” said United States Attorney Sally Quillian Yates.
“The U. S. Postal Inspection Service is committed to protecting the American Public from individuals who make misrepresentations to prey on innocent victims,” said Thomas L. Noyes II, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service. “The collaborative effort between federal agencies in this case is an excellent example of the partnerships that focus on bringing those to justice who violate the law and defraud hardworking citizens.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today's sentencing of this group engaged in mortgage fraud represents the federal government's commitment toward combatting such criminal activities. The FBI will continue to work with its various law enforcement partners in identifying such individuals engaged in this activity.”
According to United States Attorney Yates, the charges and other information presented in court: Hairston, a licensed real estate agent, and Rose were long time business partners, operating an office rental business on Covington Highway in DeKalb County, Ga. In late 2007 or 2008, Hyldahl and Allen began working out of Hairston and Rose’s office space.
Beginning in 2008, Hairston, Rose, Hyldahl, and Allen worked together to locate properties, recruit straw borrowers, and obtain mortgage loans using false information about the borrowers’ employment, income, and assets. Hairston created false W-2s and pay stubs (or earning statements) that were submitted to the lenders to obtain mortgage loans, along with fake bank statements that the co-conspirators obtained from other sources. The false documents represented that the straw borrowers earned significant salaries working for a company owned by Hairston and Rose. When lenders attempted to verify the straw borrower’s employment by contacting the company, Hairston, Rose, or their co-conspirators falsely verified the straw borrower’s employment, posing as a human resources manager or other high-level employee of Hairston and Rose’s company.
In addition to helping obtain fraudulent loans for straw borrowers, Rose and Allen purchased homes for themselves to live in using the same kind of false qualifying information that they used for straw borrowers. Hairston helped a straw borrower obtain and close a loan for a home based on false qualifying information, and then moved into the straw borrower’s home.
For certain loans, the co-conspirators induced the mortgage lender and seller to pay a “marketing fee” to companies owned by the co-conspirators that ranged from $58,000 to $75,000 per property. When the lender questioned the purpose of the “marketing fee” for one such property Hairston created a fake invoice for Hyldahl to submit to the lender that falsely portrayed the fee as having been paid for legitimate services. When the loans closed, the co-conspirators split the proceeds among themselves. Hairston, a licensed real estate agent, also received real estate commissions in the range of $7,000 to $9,000 on three of the properties.
The co-conspirators also used the funds obtained as “marketing fees” to pay the straw borrowers kickbacks as much as $15,000 after closing. In addition, for certain loans, the co-conspirators advanced straw borrowers the down payment which they were supposed to make from their own funds. Rose provided a cashier’s check which enabled the loan to close and then was paid back plus a small profit out of the “marketing fee” when the loan closed.
On January 22, 2009, federal and state law enforcement agents stopped a loan closing for a straw borrower that was based on false qualifying information and arrested Hyldahl, who was present for the closing. The closing paperwork for this loan reflected that the co-conspirators were attempting to obtain over $75,000 as a false “marketing fee.” Hairston was arrested when she arrived at the closing with the straw borrower’s down payment check, which she had obtained from Rose before coming to the closing.
Before the fraud ring was broken, the co-conspirators obtained over $2.7 million in total loans. Lenders suffered an actual loss to date of $1.1 million on these loans, and may incur additional losses in the future as a result of these loans. In addition to the properties that three co-defendants moved into, the co-conspirators obtained or attempted to obtain over $220,000 in cash from these closing (i.e., the “marketing fees”) and an additional approximately $23,000 in real estate commissions.
The defendants were sentenced as described below:
- Hairston, 52, of Lawrenceville, Ga., was convicted at trial earlier this year on multiple charges of conspiracy and mail and wire fraud, and has been sentenced to five years, four months in prison to be followed by three years of supervised release, and restitution will be determined.
- Hyldahl, 32, of Marietta, Ga., pleaded guilty to conspiracy and cooperated with the Government, and has been sentenced to one year and one day in prison to be followed by three years of supervised release, and ordered to pay $798,299 in restitution.
- Rose, 54, of Jonesboro, Ga., pleaded guilty to conspiracy and cooperated with the Government, and has been sentenced to three years of probation, the first eight months of which will be served in home confinement, and ordered to pay $339,531 in restitution.
- Allen, 30, of Powder Springs, Ga., pleaded guilty to conspiracy and cooperated with the Government, and has been sentenced to two years of probation, the first 60 days of which are home confinement, and restitution of $192,458.
This case was investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation.
Assistant United States Attorneys Doug Gilfillan and Christopher Huber prosecuted the case.
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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Montgomery County Woman Pleads Guilty to Transportation and Possession of Child PornographyRead the Press Release
Greenbelt, Maryland – Katherine Noelle Nash, age 26, of Burtonsville, Maryland, pleaded guilty today to transportation and possession of child pornography.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief J. Thomas Manger of the Montgomery County Police Department; and Montgomery County State’s Attorney John McCarthy.
According to Nash’s plea agreement, on September 8 and 9, 2013, Nash distributed nine videos depicting prepubescent minors engaged in sexually explicit conduct, to an undercover officer using a file sharing program. On October 23, 2013, a search warrant was executed at Nash’s residence and law enforcement seized two computers and other digital media.
A subsequent forensic examination of one of the computers revealed 12 images and a video file documenting Nash’s sexual abuse of a prepubescent female child, as well as sexually explicit conversations with another individual regarding the child. In addition, Nash possessed 37 files containing child pornography, including the files Nash distributed to the undercover officer. Nash had downloaded the files from the internet and many of the images were identified by the National Center for Missing and Exploited Children as depicting known victims. A preliminary analysis of the second computer revealed approximately 190 images and videos depicting children engaged in sexually explicit conduct.
As part of her plea agreement, Nash must register as a sex offender in the place where she resides, where she is an employee, and where she is a student, under the Sex Offender Registration and Notification Act (SORNA).
Nash and the government have agreed that if the Court accepts the plea agreement Nash will be sentenced to eight years in prison followed by a lifetime of supervised release. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for February 2, 2015 at 1:30 p.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, Montgomery County Police Department and Montgomery County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kelly O. Hayes and Kristi N. O’Malley, who are prosecuting the case.
Montgomery County Resident Sentenced to 70 Months in Prison for Possession of a Firearm by a Convicted FelonRead the Press Release
COUNCIL BLUFFS, IA - On November 5, 2014, Bill Joe Gillespie, a 32 year-old resident of Red Oak, Iowa, was sentenced by United States District Court Judge John Jarvey to 70 months in prison, to be followed by three years of supervised release, for possession of firearm by a convicted felon, announced United States Attorney Nicholas Klinefeldt.
An investigation revealed that Gillespie had broken into a Shell gas station in Red Oak, Iowa, during the early morning hours of December 15, 2013, and had taken, among other items, two shotguns. The shotguns were recovered from Gillespie a short time later. Gillespie pled guilty to the charge on May 8, 2014.
The investigation was conducted by the Red Oak, Iowa, Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release)
Montana Pharmacist Sentenced for Drug DeathRead the Press Release
BILLINGS - Ben Hunn, a 47-year-old licensed retail pharmacist in Sidney, Montana, was sentenced for the distribution of Vicodin resulting in death. Hunn was sentenced to 48 months in prison followed by 3 years supervised release.
Assistant U.S. Attorney Paulette Stewart told the court that on October 19, 2013, Ben Willard Hunn, a Sidney pharmacist, distributed Vicodin (hydrocodone), Soma, Ambien, and Xanax to a Sidney, Montana resident. Later that night, the victim died of a drug overdose. When Drug Enforcement Agency (DEA) agents interviewed Hunn, he admitted that he diverted hundreds of prescription pills to the victim and the victim's parents over the course of a year, from October 2012 through October 2013.
Hunn admitted that he did not know which prescriptions were legitimate and which were not; he simply printed duplicate labels from another prescription, placed them on the prescription bottles, and dispensed the controlled substances. On the date the victim died, Hunn admitted that he "stocked up the whole family." The investigation showed that on that date, Hunn distributed Vicodin (hydrocodone), Soma, Ambien, and Xanax to the deceased victim. The autopsy report listed the probable cause of death as a mixed drug overdose (carisoprodol and meprobamate). The medical examiner and toxicologists in the case also concluded that the amount of Vicodin (hydrocodone) in the victim's system was toxic/fatal by itself.
The prosecution was part of Project Safe Bakken, a cooperative effort between federal and state prosecutors and federal, state, local, and tribal law enforcement agencies in Montana and North Dakota. The investigation was conducted by the DEA Tactical Diversion Squad, which is comprised of law enforcement from DEA, Montana Division of Criminal Investigation, Billings Police Department; also the Sidney Police Department and the Montana Crime Lab.
Middlebury Fire Chief Charged with Embezzling FundsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that a federal grand jury sitting in New Haven has returned an indictment charging PAUL PERROTTI, 47, of Middlebury, with three counts of theft concerning programs receiving federal funds. PERROTTI is the Fire Chief for the Town of Middlebury.
PERROTTI was arrested this morning at his residence. He appeared before U.S. Magistrate Judge Holly B. Fitzsimmons in Bridgeport and was released on a $250,000 bond.
According to the indictment, PERROTTI has been the Fire Chief of the Middlebury Volunteer Fire Department, Inc. (“MVFD”) since 1997. PERROTTI also is a licensed electrical contractor and, since approximately 2010, has operated Paul Perrotti Electric, LLC (“PPE”). The indictment alleges that between 2011 and 2013, PERROTTI used MVFD operating accounts to pay for unauthorized personal expenses and for expenses associated with PPE. These payments included checks paid directly to PERROTTI, checks paid directly to PPE, checks made directly payable to employees of PPE, checks made to various vendors of PPE for PPE-related supplies, and checks made to reimburse third parties for personal loans owed by PERROTTI. PERROTTI also submitted invoices to the Town of Middlebury for expenses that he falsely claimed were incurred by MVFD but, in fact, were expenses related to the business of PPE, including bills for various vendors of PPE.
The indictment further alleges that PERROTTI opened a Home Depot credit card account in the name of the MVFD and used it to purchase items related to his business, including electrical wires, breakers and wire. In addition, he used an MVFD debit card to withdraw cash for himself and to make purchases not related to the MVFD, including purchases for food and gas.
In total, it is alleged that PERROTTI embezzled more than $70,000 from the MVFD.
The charge of theft concerning programs receiving federal funds carries a maximum term of imprisonment of 10 years.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Sarah Karwan.
The case is assigned to U.S. District Judge Jeffrey Alker Meyer in Bridgeport.
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[email protected]Mexican National Pleads Guilty to Growing Marijuana in Lassen National ForestRead the Press Release
SACRAMENTO, Calif. —Daniel Gomez-Gonzalez, 32, of Mexico, pleaded guilty today to cultivating marijuana plants, United States Attorney Benjamin B. Wagner announced.
According to court documents, on July 11, 2014, United States Forest Service agents and Tehama County Sheriff’s deputies raided a marijuana cultivation site near the North Fork Antelope Creek in Tehama County in Lassen National Forest. Law enforcement counted and eradicated a total of 5,287 marijuana plants at the cultivation site. They also found a Remington shotgun, more than 1,000 pounds of trash and various types of fertilizers, insecticides, and animal poisons in the grow site. Gomez-Gonzalez was arrested on a forest trail west of the site. He told law enforcement that he was responsible for spraying, watering, and fertilizing the marijuana plants and that he expected to earn a portion of the profits generated from the marijuana grown at the site. Co-defendant Eric Perez was arrested the same day in the marijuana cultivation site.
This case is the product of an investigation by the United States Forest Service and Tehama County Sheriff’s Office. Assistant United States Attorney Christiaan Highsmith is prosecuting the case.
Gomez-Gonzalez is scheduled to be sentenced by United States District Judge Troy L. Nunley on January 22, 2015. He faces a maximum statutory penalty of 20 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Co-defendant Eric Perez has already pleaded guilty to manufacturing marijuana. He will be sentenced by Judge Troy L. Nunley on January 8, 2015.
Mexican Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
On November 6, 2014, Alejandro Memije-Fuentes, 33, a citizen of Mexico, was sentenced to 10 years and one month (121 months) in prison for conspiracy to distribute and possess with the intent to distribute 500 grams or more of methamphetamine in Lincoln. Memije-Fuentes was ordered to serve five years on supervised release following the prison term. However, it is likely that he will be deported upon completion of his prison sentence.
In April of 2014, Memije-Fuentes contacted an informant who was working with the Lincoln/Lancaster County Drug Task Force and made arrangements for the delivery of two pounds of methamphetamine to the informant. An associate of Memije-Fuentes was supposed to make the delivery to the informant, but the associate was contacted by officers on April 4, 2014, consented to a search of his car, and was found in possession of approximately two pounds of methamphetamine.
Despite his associate’s arrest, Memije-Fuentes stayed in contact with the informant and made arrangements for the delivery of five pounds of methamphetamine to the informant. Memije-Fuentes told the informant that the methamphetamine was being transported to Lincoln in a truck. On the evening of April 21, 2014, officers saw Memije-Fuentes and at least one other person meet with the driver of a semi-tractor trailer truck near Memije-Fuentes’s Lincoln motel. After this meeting, Memije-Fuentes returned to his motel room. In the early morning hours of April 22, 2014, officers executed a search warrant on that motel room. Memije-Fuentes and two other individuals were found in the room along with an air compressor in which approximately 6 ¼ pounds or 2.8 kilograms of methamphetamine had been hidden.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Medicare Beneficiaries Charged in Ambulance Health Care Fraud SchemeRead the Press Release
Two Brotherly Love Ambulance Employees and Four Four Medicare Beneficiaries Charged
PHILADELPHIA - Fritzroy Brown, 37, and Thael Kuran, 22, both of Philadelphia, PA, were charged today by indictment with conspiracy to commit health care fraud and making false statements in connection with health care matters, arising from their operation of Brotherly Love Ambulance, Inc., announced United States Attorney Zane David Memeger. Fritzroy Brown was also charged with theft of government funds and wire fraud for obtaining unemployment benefits while working full time at Brotherly Love Ambulance.
The indictment charges four other individuals with taking illegal kickbacks from Brotherly Love Ambulance and its employees. According to the indictment, Craig Brown, 46, Derrick Brown, 44, William Conner, 61, and Keisha Regusters, 37, all of Philadelphia, PA, received kickbacks from the company to induce them to ride with Brotherly Love Ambulance or to induce other Medicare beneficiaries to ride with Brotherly Love Ambulance. Craig Brown is also charged with making false statements in connection with health care matters; Derrick Brown and William Conner are charged with making false statements to federal agents.
The indictment alleges that the scheme involved more than $4 million in fraudulent claims submitted to Medicare. The defendants allegedly conspired to defraud Medicare by recruiting patients who were able to walk, and could travel safely by means other than ambulance, and who, therefore, were not eligible for ambulance transportation under Medicare requirements. The defendants, and others acting on their behalf, allegedly falsified reports to make it appear that the patients needed to be transported by ambulance when the defendants knew that the patients could be transported safely by other means and that many of them walked to the ambulance for transport, were driven in privately owned vehicles, or drove themselves to their destinations. According to the indictment, the defendants, themselves, or through others, paid illegal kickbacks to the patients as part of the scheme. The indictment charges that the defendants billed Medicare for these ambulance services as if those services were medically necessary and, as a result of the fraudulent billing, the Medicare program sustained losses of more than $2 million for this medically unnecessary method of transportation.
It is further alleged that Craig Brown, Derrick Brown, William Conner, and Keisha Regusters each received payments in the form of cash, checks, or other valuable items, in order to induce them to ride Brotherly Love ambulances or allow Brotherly Love to bill for ambulance services that were never provided, or to recruit other patients for the same purpose. The indictment also alleges that Craig Brown signed paperwork indicating that he had been provided with ambulance services that he did not actually receive, and that Derrick Brown and William Conner made false statements to federal investigators about receiving money from Brotherly Love to ride Brotherly Love ambulances.
The company’s president, Feda Kuran, and a manager, Neel Jackson, have pleaded guilty in connection with their conduct related to the company.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Labor Office of the Inspector General. It is being prosecuted by Assistant United States Attorneys Matthew J.D. Hogan and Paul W. Kaufman.
An Indictment is an accusation. The defendants are presumed innocent unless and until proven guilty.
Click here to view indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525Manhattan U.S. Attorney Settles Civil Fraud Claims Against Visiting Nurse Service for Obtaining Millions in Medicaid Payments by Enrolling Ineligible Individuals in Its Managed Long-Term Care Plans and for Providing Substandard Services at Social AdultRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Thomas O'Donnell, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the United States has settled civil fraud claims under the False Claims Act against VISITING NURSE SERVICE OF NEW YORK, VNS CHOICE, and VNS CHOICE COMMUNITY CARE (collectively, “VNS”) related to the enrollment of ineligible members in the VNS Choice managed long-term care plan (“Choice MLTCP”). VNS improperly billed the Medicaid program for 1,740 members whose needs did not qualify for the managed care plan. These members were improperly referred by social adult day care centers (“SADCCs”), or received services primarily from SADCCs, many of which provided substandard and minimal care.
Under the terms of the settlement approved today by United States District Judge Ronnie Abrams, VNS must pay a total of $34,994,428 to the Medicaid Program, $13,997,771 of which will go to the United States. In addition, VNS is required to:
- Credential only SADCCs that are properly certified and capable of providing community-based personal care services consistent with regulatory requirements
- Ensure that SADCCs provide the community-based personal care services called for under Choice MLTCP member care plans
- Monitor SADCCs in its provider network to ensure compliance with applicable regulations
- Prohibit marketing practices specifically directed at enrolling Choice MLTCP members through SADCCs
Manhattan U.S. Attorney Preet Bharara said: “VNS collected millions of dollars in Medicaid payments by enrolling ineligible persons into its managed care plan who clearly did not meet the criteria for long-term care. The company developed a network of social adult day care centers that were ill-equipped to provide the required level of care and instead served merely as a conduit to induce Medicaid beneficiaries to enroll.”
HHS-OIG Special Agent in Charge Thomas O'Donnell said: “VNS’s conduct compromised the integrity of the Medicaid program. HHS-OIG is committed to holding providers accountable for the quality of care they deliver and the manner in which that care is provided.”
Pursuant to the Medicaid managed long-term care program, health care providers, such as VNS, are responsible for arranging and managing long-term health care services offered to Medicaid beneficiaries. In exchange, providers receive a monthly capitation payment of approximately $3800 for each beneficiary enrolled in the health care plan. In order to qualify for enrollment in the Choice MLTCP, Medicaid beneficiaries need to be eligible for a nursing home level of care and require at least 120 days of community-based long-term care, which includes a wide range of health care services such as personal care services. VNS contracted with SADCCs to provide care, including personal care services, to Choice MLTCP members.
In the settlement agreement, VNS admits that 1,740 Choice MLTC members who had been referred by SADCCs or used SADCC services were not eligible to be members of the plan. These members were eventually unenrolled, beginning in August 2013. Although the SADCCs were supposed to be providing care to VNS Choice members, VNS admits that, during 2012 and 2013, various SADCCs in its provider network did not provide services that qualified as personal care services under the terms of its Medicaid contract. The settlement also resolves claims that VNS Choice improperly received referrals from SADCCs and induced members to use SADCCs as the members’ primary source of personal care services.
In April 2013, New York State had suspended enrollment in the Choice MLTCP based on concerns regarding the relationship between VNS and SADCCs. This suspension remained in effect until the Government reached an agreement in principle to resolve its investigation.
Mr. Bharara thanked the Medicaid Fraud Control Unit of the New York State Attorney General’s Office for its investigative efforts and extensive work on the case. Mr. Bharara also thanked HHS’s Office of the Inspector General for its assistance.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jeffrey K. Powell is in charge of the case.
Visiting Nurse Service Settlement
Manhattan U.S. Attorney and FBI Assistant Director Announce Securities and Wire Fraud Charges Against Texas Man for Running Bitcoin Ponzi SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that TRENDON SHAVERS, a/k/a “pirateat40,” was arrested this morning on securities fraud and wire fraud charges stemming from his involvement in a Bitcoin-related Ponzi scheme. SHAVERS was the founder and operator of Bitcoin Savings and Trust (“BCS&T”), which offered and sold Bitcoin-based investments through the Internet. In total, SHAVERS raised at least 764,000 Bitcoin in BCS&T investments, which amounted to more than $4.5 million based on the average price of Bitcoin during the period of the scheme. SHAVERS is expected to be presented today in the Eastern District of Texas, Sherman Division, before a United States Magistrate Judge.
Bitcoin are a decentralized form of electronic currency, existing entirely on the Internet and not in any physical form. The currency is not issued by any government, bank, or company, but rather is generated and controlled automatically through computer software operating on a “peer-to-peer” network. Bitcoin transactions are processed collectively by the software-enabled computers composing the network.
U.S. Attorney Preet Bharara said: “As alleged, Trendon Shavers managed to combine financial and cyber fraud into a Bitcoin Ponzi scheme that offered absurdly high interest payments, and ultimately cheated his investors out of their Bitcoin investments. This case, the first of its kind, should serve as a warning to those looking to make a quick buck with unsecured currency.”
FBI Assistant Director-in-Charge George Venizelos said: “Shavers used a new currency, but the same old reprehensible tricks. He claimed to offer a Bitcoin market-arbitrage strategy. In reality, it was nothing more than an insidious scheme motivated by greed. Today, Shavers’ jig is up. He finds himself under arrest and charged in Manhattan federal court.”
According to the two-count Complaint unsealed today in Manhattan federal court:
From at least September 2011 up through and including September 2012, SHAVERS operated a Ponzi scheme. Specifically, SHAVERS solicited investments in BCS&T on the “Bitcoin Forum” – a public, Internet-based forum where, among other things, Bitcoin investment opportunities were posted. SHAVERS’s offer to investors was straightforward: investors who lent Bitcoin to BCS&T would be paid up to seven percent interest weekly – an annualized interest rate of 3,641% per year – and investors could withdraw their investments in BCS&T at any time. SHAVERS claimed that the Bitcoin invested by BCS&T investors would be used to support a Bitcoin market-arbitrage strategy, which included (i) lending Bitcoin to others for a fixed period of time; (ii) trading Bitcoin via online exchanges; and (iii) selling Bitcoin locally via private, off-markets transactions – i.e., “over-the-counter transactions.” SHAVERS also personally guaranteed to cover any losses in the event of a market change. In truth, SHAVERS largely failed to execute the claimed market arbitrage strategy, failed to honor all of his investors’ redemption requests as well as his personal guarantee, and failed to deliver the agreed upon rates of interest.
In the end, BCS&T was a Ponzi scheme in which SHAVERS used Bitcoin from new investors to make purported interest payments to existing investors and to cover investors’ requests to withdraw Bitcoin from existing BCS&T accounts. In addition, SHAVERS diverted investors’ Bitcoin for day trading in his own account on a Bitcoin currency exchange, and exchanged investors’ Bitcoin for U.S. dollars to pay certain of his personal expenses. At the peak of the scheme, SHAVERS raised, and had in his possession, about seven percent of all the Bitcoin that were then in public circulation. In the end, at least 48 of approximately 100 investors lost all or part of their investment in BCS&T.
SHAVERS, 32, was arrested this morning at his home in McKinney, Texas. He is charged with one count of securities fraud and one count of wire fraud. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and maximum fine of $250,000, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
On September 18, 2014, in a separate civil action brought by the Securities and Exchange Commission (“SEC”), the United States District Court for the Eastern District of Texas entered final judgment against both SHAVERS and BCS&T, and ordered SHAVERS to pay more than $40 million in disgorgement and prejudgment interest, and a civil penalty of $150,000 related to BCS&T.
Mr. Bharara praised the work of the FBI, and thanked the SEC for its invaluable assistance. He added that the investigation is continuing.
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 is 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 Benjamin Naftalis, Daniel S. Goldman, and Michael Ferrara are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is
presumed innocent unless and until proven guilty.
The United States Attorney’s Office for the Southern District of New York is committed to protecting the rights of crime victims. If you are a victim of an offense being prosecuted by our Office, our Victim/Witness Unit can make sure that you are notified of important stages of the case to help you exercise your rights. In addition, our Victim/Witness Unit can help refer you to agencies that provide other services to witnesses, such as compensation and counseling. For information or assistance with referrals, please contact:
Wendy Olsen Clancy
Victim/Witness Coordinator
United States Attorney's Office
One St. Andrew’s Plaza
New York, New York 10007
(866) 874-8900
U.S. v. Trendon Shavers Complaint
Man Pleads Guilty to Possessing Child Pornography for the Second TimeRead the Press Release
BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today that Michael Kemp, 37, of Buffalo, NY, pleaded guilty before U.S. District Court Judge Richard J. Arcara to possessing child pornography. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of 20 years, and a fine of $250,000.
Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that on October 15, 2013, Kemp’s U.S. probation officer found a computer and hard drive hidden between the defendant’s mattress and box spring in his bedroom. The computer contained over 50 images and eight videos of child pornography. The defendant was on supervised release following his July 2008 release from prison for a previous conviction of possession of child pornography.
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 plea is the culmination of an investigation on the part of officers of the United States Probation Department, under the direction of Anthony SanGiacomo, Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, and the Regional Computer Forensic Laboratory.
Sentencing is scheduled for February 25, 2015 at 1:00 p.m. before Judge Arcara. Kemp will be sentenced on November 24, 2014 at 12:00 p.m. for violating his supervised release.Lincoln Couple Sentenced in Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that Benjamin Martin, 26, of Lincoln, Nebraska, and Audrey Glenn, 26, of Lincoln, were sentenced on November 6, in Lincoln, Nebraska, by United States District Judge John M. Gerrard, for conspiracy to distribute methamphetamine. Martin was also convicted of possession of a firearm in furtherance of a drug trafficking crime. Martin received a sentence of 135 months imprisonment on Count 1 and a consecutive 60 months imprisonment for Count 2, and Glenn received a sentence of 120 months in prison. Both will be required to serve 5 years of supervised release following their prison terms.
Martin distributed large quantities of methamphetamine to others in the Lincoln area. That ended December 20, 2013, when Lincoln Police were dispatched to the Walmart located at 2501 Grainger Parkway due to reports that there was a man passed out in a vehicle that was running. When officers arrived, Martin was slumped over in the vehicle with his pants unbuttoned and pulled down off his hips. Clearly visible were several rifle rounds lying in Martins lap. A rifle was located concealed under a blanket on the passenger seat next to Martin. The vehicle was searched and seized were another rifle, 2 pistols, 200 rounds of ammunition, a large capacity clip for one of the rifles, 15.5 grams of methamphetamine and cash. At the jail, more money was found in Martin’s possession, making the total seized over $48,000. After Martin was lodged in jail, he made a phone call to his girlfriend, Audrey Glenn. Glenn told Martin she was collecting money to get Martin out of jail. She was followed to a storage unit used by Martin and found in it was 4 ounces of methamphetamine.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Leading Experts to Discuss New Approaches to Keeping Guns from Those People at Elevated Risk of ViolenceRead the Press Release
United States Attorney James L. Santelle announced today that on Friday, November 7th, the Office of the United States Attorney for the Eastern District of Wisconsin will co-host with Josh Horwitz, Executive Director of the Educational Fund to Stop Gun Violence, and Jeri Bonavia, Executive Director of WAVE Educational Fund, a program entitled “From Virginia Tech to the Azana Spa: New Approaches to Keeping Guns from Dangerous People.”
This community education program will begin at 1:00 p.m. at the Joseph Zilber School of Public Health of the University of Wisconsin-Milwaukee located at 1240 N. 10th Street and will include reporting on evidence-based proposals for identifying and stopping the destructive, firearms-related behaviors of the most dangerous people in our communities. The program will feature a panel of national mental health, public health and gun violence prevention experts from the Consortium for Risk-Based Firearm Policy, together with local leaders to discuss new approaches to keeping guns out of the hands of potentially dangerous individuals. The approaches are detailed in a report the Consortium released late last year.
Among the panelists will be Josh Horwitz, Executive Director of the Educational Fund to Stop Gun Violence, Dr. Garen Wintemute, Professor of Emergency Medicine at the University of California at Davis, Dr. Shannon Frattorili, Associate Professor of the Johns Hopkins School of Public Health, Dr. Jeffrey Swanson, Professor in Psychiatry at Duke University, and Dr. Amy Barnhorst, Assistant Clinical Professor, Department of Psychiatry and Behavioral Sciences at the University of California. United States Attorney James L. Santelle, Milwaukee’s Assistant Police Chief, James Harpole, Nina Vinik, Joyce Foundation Program Director, Gun Violence Prevention Program, Sandy Pasch, Wisconsin State Assembly State Representative, 10th District, Rev. Jerry Hancock, First Congregational Church of Christ, Madison, and Ralph Hollmon, Milwaukee Urban League President and CEO, will be among the presenters.
Friday’s panel is an evidence-based component of a nationwide and local strategic effort by the U.S. Department of Justice and other state, local, and tribal law enforcement entities to combat gun violence and its impact on our communities by highlighting the value of practical, new tools and research-based methods available to government officials, investigators and prosecutors, health care providers, educators, business representatives, legislators, and community leaders. Among other aspects of the concepts to be described and discussed, these policies would prevent individuals from acquiring and possessing guns when they are at elevated risk of harming themselves and others.
In announcing the program, United States Attorney Santelle said: “In this thoughtful, practical discussion with researchers and educators who have devoted their academic careers to identifying the true geneses of firearm-related violence in our nation, we will be drafting a new design – an innovative blueprint – for keeping our residents safer and more secure here in Eastern Wisconsin and elsewhere. We know the sources of and reasons for violence, and our community gathering will focus on using that information and knowledge to save lives, prevent injury, diminish crime, and promote the well-being of our communities.”
“This country needs an evidenced-based, rational approach to curbing gun violence,” said Josh Horwitz, Executive Director of the Educational Fund to Stop Gun Violence. “While it is common to suggest that guns should be kept out of the hands of the ‘mentally ill,’ that category is too vague to be effective and can wrongly stigmatize a group of individuals who are in fact no more likely to be violent than the rest of us. The Consortium’s recommendations will save lives because they are tailored to remove firearms from those most at risk for future violence.”The Consortium’s epidemiological research identified behaviors associated with an increased risk of future violence, including – among others – prior acts of violence, threats of violence, and a history of substance and/or alcohol abuse.
“The evidence is strong: The recommended policy reforms can prevent gun violence here in Wisconsin,” said Jeri Bonavia, Executive Director of WAVE Educational Fund. “But the only way we will actually save lives is if we move these recommendations from paper to practice – a goal we believe every elected official in our state should embrace.”
Friday’s panel is open to media, and coverage is welcome. Interview opportunities with panelists and hosts are available ahead of time, as well as on the day of the event.Kentucky Man Sentenced to 12.5 Years in Prison for A String of Bank Robberies in Minnesota and Two Other StatesRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of GEORGE RICHARD GAUNT, 26, to 150 months in federal prison for robbing banks in three states, including Virginia, Iowa, and Minnesota. GAUNT was charged with one count of Bank Robbery in the District of Minnesota, one count of Bank Robbery in the Northern District of Iowa, and two counts of Bank Robbery in the Western District of Virginia. GAUNT pleaded guilty to all charges on April 7, 2014, in United States District Court in St. Paul, Minn. He was sentenced on November 5, 2014.
“This case is the result of successful efforts by multiple law enforcement agencies and federal prosecutors across three districts,” said Assistant U.S. Attorney Katharine Buzicky. “Working together, law enforcement officers apprehended a defendant who committed violent crimes across the country.”
According to the indictment and documents filed in court, in the fall of 2013, GAUNT disappeared from a halfway house in Kentucky and went on a bank robbery spree in Virginia, Iowa, and Minnesota. During each of the four bank robberies, GAUNT intimidated bank employees using a black BB gun that was designed to look exactly like a handgun. The defendant also passed to tellers violent and threatening notes. GAUNT handed a bank teller in Center Point, Iowa, a note that read, “I have a gun Give me $ No dye, trackers, or alarms I’ll kill everyone!”
According to documents filed in court, on October 15, 2013, GAUNT robbed a bank in Eagle Lake, Minnesota, using a BB gun and passing a threatening note that read, “I have a gun, this is no joke, I will kill you! Act normal, no alarms, trackers, or dye packs. PS this aint my first bank. So don’t make me kill again.” Later that day, law enforcement agents apprehended GAUNT with a BB gun and a bag with approximately $7,472 in cash that he had taken from the bank in Eagle Lake, Minnesota.
This case is the result of an investigation by the Federal Bureau of Investigation, the Augusta County Sheriff’s Office and the Henry County Sheriff’s Office in Virginia, the Linn County Sheriff’s Office in Iowa, the Minnesota State Patrol, the Eagle Lake Police Department, the Blue Earth County Sheriff’s Office and the Waseca County Sheriff’s Office in Minnesota.
This case was prosecuted by Assistant U.S. Attorney Katharine T. Buzicky.
Defendant Information:
GEORGE RICHARD GAUNT, 26
Louisville, KY
Convicted:
• Bank Robbery, 4 counts
Sentenced:
• 150 months in prison###
Jackson, Mississippi, Man Sentenced to 24 Months in Prison for the Attempted Online Extortion of the University of Louisville Athletic AssociationRead the Press Release
LOUISVILLE, Ky. – A Jackson, Mississippi, man was sentenced to 24 months in prison by Chief Judge Joseph H. McKinley Jr, in United States District Court Monday, November 3, 2014, following his conviction for the attempted online extortion of the University of Louisville Athletic Association, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Thomas E. Ray, age 36, of Jackson Mississippi was convicted of a single count of extortion, by means of threatening communication, by a federal jury in Louisville, on August 13, 2014. The jury deliberated less than two hours before reaching a guilty verdict.
According to evidence presented at trial, Ray used the alias “Melinda White” when he knowingly sent an email communication from his home in Jackson, to the Commonwealth of Kentucky, on April 23, 2013. Ray’s email was sent to two University of Louisville employees with a threat to injure the reputation of the University of Louisville Athletic Association and a demand for $3.5 million.
Ray was indicted by a federal grand jury in Louisville, on October 16, 2013. The indictment was unsealed on October 24, 2013, following Ray’s arrest in Mississippi, by the U.S. Marshal Service.
Ray faced no more than two years in prison, a maximum fine of $250,000 and a one year period of supervised release.
This case was prosecuted by Assistant United States Attorney A. Spencer McKiness and was investigated by the Federal Bureau of Investigation (FBI), Louisville Metro Police Department, and Office of the Kentucky Attorney General.
Hurricane Man Pleads Guilty to Drug, Firearm Charges; Plea Agreement Includes Recommended 144-Month SentenceRead the Press Release
ST. GEORGE, UT - A Feb. 3, 2015, sentencing date has been set for Chad Eugene Devaughn, age 42, of Hurricane, Utah, after he entered guilty pleas to possession of methamphetamine with intent to distribute and possession of a firearm in furtherance of a drug trafficking offense in federal court in St. George earlier this week. Devaughn was charged in a Felony Information filed Oct. 28, 2014.
The plea agreement includes a stipulated sentence of 144 months, which is subject to court approval. As a part of the plea agreement, Devaughn also agreed to forfeit property acquired from or traceable to his criminal offenses and any property that was used to facilitate his criminal conduct, including $4,500 in currency; eight firearms; and magazines and ammunition in various calibers seized with the firearms. Several of the firearms were confirmed stolen, federal prosecutors said.
U.S. District Judge Ted Stewart will impose a sentence in the case at 10:30 a.m. Feb. 3, 2015, in federal court in St. George.
As a part of the plea agreement, Devaughn stipulated that on about Aug. 26, 2014, he possessed methamphetamine with the intent to distribute it. Washington County Drug Task Force officers and agents executing a search warrant at his residence recovered approximately 220 grams of methamphetamine. He also admitted that he possessed firearms, including a Kel Tec 9mm caliber handgun, in furtherance of the drug trafficking offense. Law enforcement officers recovered the firearms and methamphetamine from his residence.
Honduran Man, Jason Guzman-urquia, Charged with Immigration OffenseRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JASON GUZMAN-URQUIA, age 36, a native of Honduras, was indicted today by a federal grand jury for reentering the United States without permission, after previously having been deported.
According to court documents, on August 2, 2007, GUZMAN-URQUIA was previously removed from the United States. On October 22, 2014, GUZMAN-URQUIA was found in the Eastern District of Louisiana and had not received permission from the Attorney General of the United States or the Secretary of the Department of Homeland Security to reenter.
If convicted, GUZMAN-URQUIA faces a maximum term of two years imprisonment, as well as a fine of $250,000.
U.S. Attorney Polite reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Immigration and Customs Enforcement in investigating this matter. Assistant United States Attorney Jon Maestri is in charge of the prosecution.
(Download Indictment )
Harold Henthorn Arrested for First Degree Murder Related to Death of Wife at Rocky Mountain National ParkRead the Press Release
DENVER – Harold Henthorn, age 58, of Highlands Ranch, Colorado, was arrested without incident this morning by Special Agents with the National Park Service (NPS) and the Federal Bureau of Investigation (FBI), with substantial support from the Douglas County Sheriff’s Office, following his indictment on First Degree Murder, the agencies announced. The indictment was returned by a federal grand jury in Denver yesterday, November 5, 2014. Henthorn is scheduled to make his initial appearance before U.S. Magistrate Judge Kathleen M. Tafoya at 2:00 p.m. today, where he will be advised of his rights and the charges pending against him.
According to the indictment, on or about September 29, 2012, in the State and District of Colorado, and within the jurisdiction of the United States, namely the Rocky Mountain National Park, Henthorn willfully, deliberately, maliciously, and with premeditation and malice aforethought did unlawfully kill his wife, Toni Henthorn.
If convicted, Henthorn faces a mandatory term of life in federal prison without the possibility of parole, as well as a fine of up to a $250,000.
“The indictment charges Henthorn with the first degree murder of his wife in Rocky Mountain National Park,” said U.S. Attorney John Walsh. “The United States Attorney’s Office will work tirelessly with the National Park Service and the FBI to ensure that justice is done for the victim and her family.”
“The National Park Service is always concerned for the protection of our visitors,” said Mark Magnuson, Rocky Mountain National Park Chief Ranger. “When a violent crime such as this occurs in a national park, one of our nation’s most treasured places, we work hard to ensure that those responsible are held accountable and the victim and the victim’s family are afforded justice. In this case, we will continue to work closely with the FBI and the U.S. Attorney’s Office toward a just resolution.”
“Working with our partners from Douglas County and the National Park Service, FBI agents took Henthorn into custody this morning,” said FBI Denver Division Special Agent in Charge Thomas Ravenelle. “As with all defendants, Henthorn will now be afforded his day in court after an extensive investigation.”
This case was investigated by the National Park Service and the Federal Bureau of Investigation. The Douglas County Sheriff’s Office provided assistance during the investigation and arrest.
The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.
Georgia Woman Sentenced for Role in Nigerian "Mystery Shopper" ScamRead the Press Release
PITTSBURGH - A resident of Lilburn, Georgia, has been sentenced in federal court to three years probation, the first eight months of which shall be served in home detention; restitution in the total amount of $47,815.15 and special assessment of $100 on her conviction of fraud conspiracy, United States Attorney David J. Hickton announced today.
United States District Judge Cathy Bissoon imposed the sentence on Monica Mason, 49.
According to the information presented to the court, Mason was involved in a Nigerian "Mystery Shopper" scam whereby her coconspirator Shawn Foote knowingly prepared and addressed fraudulent mail containing counterfeit instruments to victims, who believed they were acting as mystery shoppers. The victims unwittingly received the counterfeit commercial and Postal money orders and checks and cashed them to make small purchases for purposes of evaluating the commercial services provided. They then wire transferred excess funds back to Mason, Foote, and others. After these transactions, the money orders and checks were returned as counterfeit by the victims’ banks and they were left to repay the bank from their own funds.
Assistant United States Attorney Paul E. Hull prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Postal Inspection Service and Homeland Security Investigations for the successful prosecution of Mason.
Georgia Couple Arraigned on Federal Methamphetamine ChargesRead the Press Release
Defendants Allegedly Conspired to Manufacture and Distribute Meth in
Clinton CountyPLATTSBURGH, NEW YORK – Billy Slick and Danielle Trombly Slick appeared in federal court in Plattsburgh, NY this morning and pleaded not guilty to charges related to the manufacture and distribution of methamphetamine, announced United States Attorney Richard S. Hartunian, Drug Enforcement Administration Special Agent in Charge James J. Hunt, and New York State Police Troop B Headquarters Bureau of Criminal Investigations Captain Robert S. LaFountain. The two-count indictment alleges that they conspired to manufacture, to possess with intent to distribute, and to distribute 50 grams or more of methamphetamine in Clinton County and elsewhere from approximately 2011 through June 2013. The indictment also charges Billy Slick with possession of methamphetamine with intent to distribute it. The defendants were detained pending trial, which is currently scheduled for January 5, 2014, in Syracuse, NY.
United States Attorney Richard Hartunian said, “The scourge of drugs like methamphetamine is devastating to individuals, their families and our neighborhoods. We continue to do everything possible to keep these drugs out of our communities. I commend the collaborative law enforcement efforts in this case.”
“Not only did law enforcement locate, arrest and bring back Mr. and Mrs. Slick to New York to face drug charges, they identified how the couple used the one-pot method to produce and distribute methamphetamine throughout the North Country,” stated DEA Special Agent in Charge James J. Hunt. “Simply put- methamphetamine use and production result in explosions, fires, hazardous waste, addiction and associated crimes. I would like to thank our federal, state and local law enforcement partners whose relentless efforts led to their arrest, extradition and arraignment.”
New York State Police Captain Robert LaFountain said, “The New York State Police extends our sincere gratitude to United States Attorney Richard Hartunian and our law enforcement partners for their efforts in this investigation. The Slicks' criminal manufacturing and distribution of methamphetamine in Clinton County resulted in numerous area residents becoming addicted to this devastating drug. This will hopefully send a clear message to drug dealers that law enforcement will work diligently to investigate and apprehend those that engage in this criminal behavior.” If convicted of Count 1, the conspiracy charge, the maximum penalties the Slicks each face include: a mandatory minimum term of imprisonment of 5 years; a maximum term of imprisonment of 20 years; a fine of $5,000,000; and up to lifetime supervised release. If convicted of Count 2, possession with the intent to distribute, the maximum penalties Billy Slick faces include: a term of imprisonment of 20 years; a $1,000,000 fine, and lifetime supervised release.
The case is being investigated by the Drug Enforcement Administration, New York State Police, the High Intensity Drug Trafficking Areas Program of New York and New Jersey, the Plattsburgh Police Department, the Clinton County District Attorney’s Office, and the Essex County District Attorney’s Office. Assistant United States Attorney Katherine Kopita is prosecuting the case.
All charges are merely accusations and all defendants are presumed innocent unless and until proven guilty in a court of law.
Ft. Lauderdale, Florida - Man Sentenced to Five Years Imprisonment, to be Followed by Three Years of Supervised Release. He was Ordered to Pay a Fine of $250,000 and Restitution of $8,204,328.49Read the Press Release
SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced today the sentencing of Walid Osmond Turk.
Turk, 41, formerly of Ft. Lauderdale, Florida, had pled guilty on April 30, 2014 to Conspiracy to Traffic in Counterfeit Goods. From 2003 through 2008, Turk imported millions of dollars worth of counterfeit exercise equipment from China which he sold on the internet representing it as genuine from such manufacturers as Nautilis, BowFlex and Fitness Quest. He had been an international fugitive since his indictment in May 2009. He surrendered to United States authorities in April 2014.
On November 5, 2014, Turk was sentenced to five years imprisonment, to be followed by three years of supervised release. He was ordered to pay a fine of $250,000 and restitution of $8,204,328.49.
The case was investigated by the United States Secret Service, Homeland Security Investigations and the United States Postal Inspection Service.
The case was prosecuted by Assistant United States Attorney Edward R. Broton
Freeland Man Sentenced to Prison for His Role in Drug Trafficking ConspiracyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 34-year-old Freeland resident was sentenced yesterday to 37 months in prison by U.S. District Court Judge Robert D. Mariani for his role in a drug trafficking conspiracy that operated in Monroe and Berks Counties during 2010 to 2013.
According to United States Attorney Peter Smith, the defendant, Arnando Diaz-DeJesus, previously pleaded guilty to conspiracy to distribute heroin, cocaine, cocaine base (“crack”), and Oxycodone.
Diaz-DeJesus was indicted by a federal grand jury sitting in Scranton in June 2013, as a result of an investigation by the Drug Enforcement Administration, Department of Homeland Security (DHS), Homeland Security Investigations (HSI), the Pennsylvania State Police, the Pennsylvania Attorney General’s Office, and Berks County Detectives.
Judge Mariani also ordered that Diaz-DeJesus spend three years on supervised release following his prison sentence and pay a $100 special assessment.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Founder of Bankrupt O.C. Real Estate Investment Firm Pleads Guilty in Fraud Scheme That Resulted in $110+ Million BankruptcyRead the Press Release
SANTA ANA, California – One of the owners of a now-defunct Southern California real estate investment firm pleaded guilty today to perpetrating a fraudulent scheme that ended with the bankruptcy of the company, in which investors and banks collectively lost more than $110 million.
John Packard, 64, of Long Beach, pleaded guilty to one count of mail fraud before United States District Judge Cormac J. Carney.
During today’s hearing, Packard admitted bilking investors in Pacific Property Assets (PPA), which had offices in Long Beach and Irvine. Packard and his co-defendant, Phoenix resident Michael J. Stewart, created PPA in 1999 to purchase, renovate, operate and resell or refinance apartment complexes in Southern California and Arizona. Typically, PPA financed property acquisitions through mortgages, and it raised money from private investors to pay for renovations to the properties. After several years, PPA would usually refinance (or sometimes sell) each property.
Although PPA’s apartment rental operations were not profitable, it was able to raise cash through refinancing and selling properties. As real estate values were generally increasing until approximately 2007, the properties were refinanced at ever-higher values, which enabled PPA to use the extra refinancing proceeds to not only pay off the original mortgages, but also to make payments on other loans, make payments to investors, and to pay Stewart and Packard. In its 10 years of operations, PPA acquired more than 100 real estate properties and raised tens of millions of dollars from hundreds of investors.
By the end of 2007, when the real estate market began to decline and credit became scarce, PPA’s business model was no longer feasible. To keep PPA afloat, from late 2007 through April 2009, Stewart admitted today that he and Packard continued to raise tens of millions of dollars from new investors. The defendants used those new funds to pay earlier investors, mortgage lenders, other company expenses, and Stewart and Packard themselves. Packard admitted that by October 2008, he and Stewart knew that PPA was dependent on these investor loans to make its monthly debt payments and continue operating, and was unable to raise money through other means.
Packard also admitted that during the course of this continued fundraising effort, Stewart – with Packard’s knowledge and consent – misrepresented PPA’s financial condition, claiming that its business model was still working, and that PPA was still financially stable and able to raise money through refinancing. Stewart and Packard concealed from investors the fact that the business had effectively become a Ponzi scheme, using new investors’ funds to pay back earlier investors. Moreover, following PPA’s final investor offering in 2009, virtually none of the investors’ approximately $9.23 million in funds were used to invest in new property purchases, as had been promised to investors; instead, the money was used to pay earlier investors and banks, to pay Stewart and Packard, and to pay PPA’s bankruptcy attorney.
PPA and a group of related companies filed for bankruptcy in June 2009. When the bankruptcy was filed, PPA owed 647 private investors more than $91 million, and it owed banks approximately $100 million. In the bankruptcy proceedings, the private investors received nothing, while banks lost an estimated $24 million.
Packard faces a statutory maximum sentence of 20 years in federal prison when he is sentenced by Judge Carney on May 18, 2015.
Stewart is scheduled to go on trial on April 14, 2015.
The investigation in this case was conducted by the Federal Bureau of Investigation, which received assistance from the United States Trustee’s Office.
Release No. 14-146
Former Studio Money Man Sentenced to Federal Prison for EmbezzlementRead the Press Release
LOS ANGELES – A former finance manager of a television production studio was sentenced this morning to two years in federal prison for embezzling approximately $2.5 million from the Culver City company.
Nolan Mitchell Ransdell, 41, of Canyon Country, was sentenced by United States District Judge George Wu. In addition to the prison term, Judge Wu ordered Ransdell to pay $2,458,589 in restitution.
Ransdell previously pleaded guilty to bank fraud and admitted that he stole money from his employer, Studio Lambert USA, which is now known as All3Media America. Ransdell embezzled the money in several ways, including forging an executive’s signature on checks Ransdell had made out to himself. Ransdell also took checks that the executive had pre-signed for “emergency” use and made himself the payee. In addition, Ransdell made checks payable to a subordinate, and then instructed that employee to cash the checks and return the money to him. Ransdell also made unauthorized cash withdrawals from Studio Lambert’s bank accounts.
Studio Lambert USA, a subsidiary of a British studio, produced television shows for distribution in the United States, including Undercover Boss. Studio Lambert’s parent company noticed that the accounting for the production accounts was not consistent with the accounting for the corporate accounts. When asked to explain the differences, Ransdell made up excuses, for instance, saying that discrepancies were the result of payment delays in connection with prepaid debit cards. Once it realized it was the victim of embezzlement, Studio Lambert contacted the FBI and assisted in the investigation.
The case against Ransdell is the result of an investigation by the Federal Bureau of Investigation.
Release No. 14-145
Former PA Turnpike Commission Employee Sentenced to 200 Months in Prison for Producing Child PornographyRead the Press Release
PITTSBURGH - A Fayette County resident was sentenced on Nov. 5, 2014, in federal court to 200 months imprisonment, to be followed by 15 years supervised release, on her conviction of production of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Lisa A. Renze, 49, of Uniontown, Pa.
According to information presented to the court, on Jan. 30, 2010, Renze used and coerced a 12-year-old minor female to engage in sexually explicit conduct for the purpose of producing digital photographs of the conduct. The sexually explicit digital photographs taken on Jan. 30, 2010, and other occasions between 2009 and 2011, were then distributed by Renze to her friend and Pennsylvania Turnpike Commission co-worker, John Longo. Longo entered a guilty plea to a similar charge of production of child pornography on Aug. 28, 2014. The sentencing for John Longo is scheduled for Jan. 22, 2015. Longo has been detained pending that sentencing proceeding.
The defendant was remanded to the Bureau of Prisons.
Assistant United States Attorney Carolyn J. Bloch prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Department of Homeland Security, Immigration and Customs Enforcement, and the Pennsylvania State Police for the investigation leading to the successful prosecution of Renze.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former New York State Inspector Sentenced for Negligent Dangerment Under the Clean Air ActRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul announced today that Theodore Lehmann, 67, Buffalo, NY, who was convicted of a misdemeanor charge of negligent endangerment under the Clean Air Act, was sentenced to one year probation by U.S. District Court Judge Richard J. Arcara.
“Today’s sentencing brings to an end the government’s investigation into this community health hazard,” said U.S. Attorney Hochul. “But let this case also serve as a warning to any other companies or individuals who deliberately harm our community or environment. Our Office stands ready to protect the public through vigorous enforcement of federal law.”
Assistant U. S. Attorney Aaron J. Mango, who is handling the case, stated that the defendant was employed by JMD Environmental, Inc. (JMD) as an air sampling technician and a project monitor, and was certified by the New York State Department of Health to conduct asbestos project monitor and air sampling duties. From June 9, 2009 to January 11, 2010, co-defendants Johnson Contracting of WNY, Inc. (Johnson Contracting), Ernest Johnson, and Rai Johnson, conducted asbestos abatement activities at six buildings at the Kensington Towers Apartment Complex in Buffalo. During the abatement process, co-defendant Rai Johnson created daily project logs to document the progress at Kensington Towers. The logs are documents required to be maintained under the Clean Air Act.
At the conclusion of the abatement for building B-2 by Johnson Contracting, Rai Johnson wrote in his daily project log that all material containing asbestos had been removed from the boiler room, when in truth, all asbestos had not been removed. Thereafter, on August 25, 2009, the defendant conducted a visual inspection of the boiler room at building B-2 and issued a satisfactory visual inspection, when in truth, the defendant was aware that all asbestos had not been removed. In doing so, the defendant acted as an accessory after the fact to the false statement made by the Johnson defendants.
This is the final defendant to be sentenced as part of the Kensington Towers asbestos abatement project. In addition to Ernest and Rai Johnson, other defendants who have been convicted include JMD project monitors Evan Harnden and Brian Scott; and current and former public officials responsible for certifying the project’s compliance with applicable laws and regulations, including Donald Grzebielucha and William Manuszewski.
The sentencing is the culmination of an investigation on the part of Special Agents of the U.S. Environmental Protection Agency - Criminal Investigation Division, under the direction of Special Agent-In-Charge, Vernesa Jones-Allen; Special Agents of the Federal Bureau of Investigation; Special Agents of the U.S. Department of Housing and Urban Development - Office of Inspector General, under the direction of Special Agent-In-Charge Christina D. Scaringi; and Investigators of the New York State Department of Environmental Conservation Police, BECI, under the direction of Captain Frank Lauricella. Additional assistance was provided by the New York State Department of Labor, Asbestos Control Bureau.Former Fresno Business CFO Charged with Embezzling and Money LaunderingRead the Press Release
FRESNO, Calif. — Anthony Lester, 51, of Fresno, was indicted today by a federal grand jury, charging him with mail fraud and money laundering, United States Attorney Benjamin B. Wagner announced.
According to court documents, Lester was the controller at Century Builders in Fresno, and later the Chief Financial Officer. During his employment, he had access to the financial accounts of another Fresno business, Highlands Energy Services. Between November 2010 and December 2011, Lester used this access to divert money from bank accounts and credit cards held by Highlands Energy Services into other financial accounts, including Lester’s own PayPal Inc. account. He attempted to conceal the embezzled funds by transferring them into his personal bank account. In total, Lester embezzled approximately $300,000 from Highlands Energy Services.
According to the indictment, employees of Highlands Energy Services and Century Builders questioned Lester about payments to some vendors because they were inconsistent with company practices. One of the questionable vendors was American Products, which was in fact a fictitious company invented by Lester to conceal his embezzlement. In response to such questions, Lester attempted to make it appear that American Products was a legitimate vendor. First, he visited a local supply company near Fresno claiming to be from “Valley Builders” (also a fictitious company). Then, he purchased weather stripping, dead bolts, spring hinges and thresholds. He packaged the goods for delivery to Highlands and labeled them as coming from American Products in New York. Then Lester sent the goods from a Fresno UPS facility.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Fresno Police Department. Assistant United States Attorney Patrick R. Delahunty is prosecuting the case.
If convicted of mail fraud, Lester faces a maximum penalty of 20 years in prison, a $250,000 fine, and three years of supervised release. If convicted of money laundering, he faces a maximum penalty of 20 years in prison, and a fine of $500,000 or twice the value of the property involved, whichever is greater, and three years of supervised release. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Corrections Supervisor Pleads Guilty to Charges of Sexual Assault of Female Inmates in His CustodyRead the Press Release
ALBUQUERQUE – John Greene, 70, a former captain at the Gallup-McKinley Adult Detention Center (GMADC), entered a guilty plea to charges related to the sexual assaults of female inmates in his custody. Greene pleaded guilty to three counts of violating each of the victim’s right to bodily integrity by engaging in sexual contact against their will. Greene also pleaded guilty to two counts of making material false statements to the FBI when he denied both touching the breasts of one female inmate and having personal contact with another female inmate.
According to court documents, Greene admitted that in his capacity as a captain at GMADC, he had regular access to female inmates when he accompanied them to court hearings, transported them to other facilities, and had them brought to his office. This regular access gave him the opportunity to engage in unwanted sexual contact with three different women in December 2008 and January 2009. Greene committed these acts, knowing it was wrong, against the law and without the victims’ consent, but he did so anyway for his own gratification.
Greene also admitted that he lied to the FBI about his conduct on two occasions.
Under the terms of the plea agreement, Greene will be sentenced to five years of probation. As part of the plea agreement, Greene will forfeit his law enforcement certification and must comply with sex offender registration requirements.
A sentencing hearing has not yet been set.
This case is being investigated by the Gallup Resident Agency of the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Holland S. Kastrin for the District of New Mexico and Fara Gold of the Civil Rights Division of the U.S. Department of Justice.Final Conspirator Pleads Guilty in Scheme to Embezzle over $1 Million from Co-Conspirator’s EmployerRead the Press Release
Greenbelt, Maryland – Brian Hooper, age 42, of Woodbridge, Virginia, pleaded guilty today to conspiring to commit wire fraud in connection with a scheme to steal over $1 million from a consulting company.The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to his plea agreement, co-defendant Janice McCumbie worked for a global consulting business that had offices in Maryland and elsewhere. Clients paid large retainers to secure consulting services. The consulting company would issue refund checks to the clients in certain circumstances, including when a client’s retainer exceeded the amount of work that the consulting company actually performed or when the client made duplicate payments to the consulting company. McCumbie’s duties included coordinating client refunds.
In 2008, Hooper introduced McCumbie to a co-conspirator, who was not a client of the consulting company. Between June and December 2008, McCumbie caused the consulting company to issue six fraudulent refund checks totaling $121,081.22 to the co-conspirator in exchange for a share of the check proceeds. The co-conspirator shared the proceeds from five of these fraudulent checks with Hooper and McCumbie.
In 2009, Hooper introduced McCumbie to defendant Leonard Smedley, who was also not a client of the consulting company. From February 2009 to October 2013, McCumbie caused the consulting company to issue 42 false refund checks totaling $910,490.74 to Smedley in exchange for Smedley sharing the check proceeds with Hooper and McCumbie.
Hooper has agreed to forfeit and pay restitution of $1,031,571.96, the loss resulting from his conduct.
Hooper faces a maximum sentence of 20 years in prison. U.S. District Judge George J. Hazel scheduled his sentencing for February 2, 2015, at 9:30 a.m.
Leonard Smedley II, age 35, of Capitol Heights, Maryland; Amber Gayleard, age 29, of Schuylkillhaven, Pennsylvania; and Janice McCumbie, age 45, of Marydel, Maryland; previously pleaded guilty to the conspiracy and are scheduled to be sentenced on January 15, 20 and 27, 2015, respectively.
United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant United States Attorneys Leah Jo Bressack and David Salem, who are prosecuting the case.
Federal Grand Jury Criminal Indictments AnnouncedRead the Press Release
TULSA, Okla. — The results of the November 2014 Federal Grand Jury were announced today by Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma.
The following individuals have been charged with violations of United States law in indictments returned by the Grand Jury. The return of an indictment is a method of informing a defendant of alleged federal crimes which must be proven in a court of law beyond a reasonable doubt to overcome a defendant’s presumption of innocence.
Juan Carlos Andrado-Morillo. Alien in the United States After Deportation. Andrado-Morillo, 41, was arrested in Tulsa County and is charged with having returned to the United States unlawfully after being deported in November 2012 near Harlingen, Texas. If convicted, the statutory maximum penalty is 20 years in prison and a $250,000 fine. The U.S. Immigration and Customs Enforcement is the investigative agency.
Mary Elizabeth Beaty. Theft of Government Property. Beaty, 57, of Tulsa, is charged with stealing approximately $49,778.93 in Social Security Funds from December 2009 to August 2012. If convicted, the statutory maximum penalty is 10 years in prison and a $250,000 fine. Upon conviction, a criminal forfeiture money judgment would also be entered in the amount of $49,778.93. The Social Security Administration-Office of Inspector General is the investigative agency.
Tony D’Marco Cato. Felon in Possession of a Firearm and Ammunition, Possession of Marijuana with Intent to Distribute, and Possessing a Firearm in Furtherance of a Drug Trafficking Crime. Cato, 31, of Tulsa, is charged with possessing a .380 caliber pistol and ammunition after prior felony convictions. Cato is also charged with possessing marijuana with intent to distribute and possessing a firearm in furtherance of a drug trafficking crime. If convicted, the statutory maximum penalty is 10 years in prison and a $250,000 fine for being a felon in possession of a firearm and ammunition; up to five years in prison and a $250,000 fine for possession of marijuana with intent to distribute; and not less than five years in prison and up to life in prison, to run consecutively with any other term of imprisonment, and a $250,000 fine for possessing a firearm in furtherance of a drug trafficking crime. Upon conviction, Cato would also forfeit the pistol and ammunition. The Oklahoma Bureau of Narcotics and Dangerous Drugs is the investigative agency.
Juan Pablo Charre and Alejandro Cabrera Charre. Drug Conspiracy and Possession of Methamphetamine with Intent to Distribute. Juan Charre, 34, and Alejandro Charre, 23, both of Austin, Texas, are charged with conspiracy and possessing 500 grams or more of methamphetamine with intent to distribute. If convicted, the statutory maximum penalty for drug conspiracy and possession of methamphetamine with intent to distribute is not less than 10 years and up to life in prison, and a $10,000,000 fine. Upon conviction, a criminal forfeiture money judgment would also be entered in the amount of $46,000 and seized currency would be forfeited. The Drug Enforcement Administration and the Tulsa Police Department are the investigative agencies.
Isaias Gonzalez-Rosales. Alien in the United States After Deportation. Gonzalez-Rosales, 28, was arrested in Tulsa County and is charged with having returned to the United States unlawfully after being deported in September 2011 near Del Rio, Texas. If convicted, the statutory maximum penalty is 20 years in prison and a $250,000 fine. The U.S. Immigration and Customs Enforcement is the investigative agency.
Kari Ann Hunt. Embezzle, Steal, Purloin and Knowingly Convert Public Monies. Hunt, 39, of Ramona, Oklahoma, is charged with stealing on a recurring basis from April to July 2014, money and objects of value in excess of $1,000 belonging to the United States Postal Service. If convicted, the statutory maximum penalty would be not more than 10 years in prison and a $250,000 fine. The Office of Inspector General U.S. Postal Service is the investigative agency.
Teri Dean Maloney. Theft of Government Property. Maloney, 51, of Wyandotte, Oklahoma, is charged with stealing approximately $49,913 in Social Security Funds from January 2010 to June 2013. If convicted, the statutory maximum penalty is 10 years in prison and a fine up to $250,000. Upon conviction, a criminal forfeiture money judgment would also be entered in the amount of $49,913. The Social Security Administration-Office of Inspector General is the investigative agency.
Jesus Parra-Lopez. Alien in the United States After Deportation. Parra-Lopez, 37, was arrested in Tulsa County and is charged with having returned to the United States unlawfully after being deported in August 2013 near Laredo, Texas. If convicted, the statutory maximum penalty is 20 years in prison and a $250,000 fine. The U.S. Immigration and Customs Enforcement is the investigative agency.
Andrew Scott Pierson. Felon in Possession of Firearms. Pierson, 39, of Jay, Oklahoma, is charged with possessing firearms after prior felony convictions. If convicted, the statutory maximum sentence is not more than 10 years in prison and a $250,000 fine. The Bureau of Alcohol, Tobacco, Firearms and Explosives is the investigative agency.Timothy Jason Sumner. Failure to Register as a Sex Offender. Sumner, 30, is charged with failing to register as a sex offender as required under the Sex Offender Registration and Notification Act after a 2011 conviction. If convicted, the maximum statutory penalty would be 10 years in prison and a $250,000 fine. The U.S. Marshals Service is the investigative agency.
Ronald Dean Tiger. Failure to Register as a Sex Offender. Tiger, 47, is charged with failing to register as a sex offender as required under the Sex Offender Registration and Notification Act after a 2001 conviction. If convicted, the maximum statutory penalty would be 10 years in prison and a $250,000 fine. The U.S. Marshals Service is the investigative agency.
Tayler Marie Marvina Warren. Possession of Methamphetamine with Intent to Distribute and Possession of Firearms in Furtherance of a Drug Trafficking Crime. Warren, 23, of Vinita, Oklahoma, is charged with two counts of possessing methamphetamine with intent to distribute and two counts of possessing a firearm in furtherance of a drug trafficking crime. If convicted for possession of methamphetamine with intent to distribute, Warren faces a statutory maximum penalty of up to 20 years in prison and a $1,000,000 fine. The statutory minimum sentence for possession of firearm in furtherance of a drug trafficking crime is not less than 5 years in prison and a $250,000 fine. Upon conviction, Warren would also forfeit seized currency, the firearms, and ammunition. The Bureau of Indian Affairs and the Delaware County Sheriff are the investigative agencies.
Federal Charge Filed in Lenexa Bank RobberyRead the Press Release
KANSAS CITY, KAN. – Federal charges were filed Thursday in a Lenexa bank robbery, U.S. Attorney Barry Grissom said.
Donald Rucks, 42, was charged with one count of bank robbery. Rucks is accused of robbing the Arvest Bank in Lenexa on Nov. 4, 2014. Investigators alleged he entered the bank and was talking on a cell phone for several minutes before giving a teller a note saying, “BE QUIET, 100s, 50s and 20s PLEASE.” He put the money in the pocket of the white hoodie sweatshirt he was wearing and fled with the money.
After surveillance footage from the bank was made public, police received tips leading them to Rucks. He was arrested Nov. 5 in Olathe, Kan.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. The Olathe Police Department and the FBI investigated. The U.S. Attorney’s Office is prosecuting.
Fairfield Man Who Possessed Assault Weapon on Unh Campus Pleads Guilty to Federal Firearm OffenseRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that WILLIAM DONG, 23, of Fairfield, pleaded guilty today in Hartford federal court to transporting an assault weapon into Connecticut in violation of federal law.
According to court documents and statements made in court, in September 2013, DONG traveled to Pennsylvania, purchased a Bushmaster model XM-15-E2S, .223 caliber semi-automatic rifle and transported the rifle back to Connecticut. This firearm is considered a prohibited assault weapon under Connecticut state law.
On December 3, 2013, West Haven Police arrested DONG in the vicinity of the University of New Haven after he was found in possession of two handguns on his person, and the Bushmaster rifle, which was seized from his nearby car. DONG told police that he had purchased the rifle from a seller in Pennsylvania in September 2013 through an advertisement placed on www.armslist.com.
Although it is not unlawful under federal law for an individual, who is not a prohibited person, to possess this Bushmaster firearm, it is a federal violation for an individual to purchase this firearm outside of Connecticut and travel into the state with it, since it is a prohibited firearm under Connecticut state law.
DONG has been detained since his arrest. He is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny in Hartford on January 29, 2015, at which time he faces a maximum term of imprisonment of five years.
On October 17, 2014, DONG pleaded guilty in Milford Superior Court to state firearms offenses related to the December 2013 incident in West Haven.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, working together with the West Haven Police Department. The case is being prosecuted by Assistant U.S. Attorney Robert M. Spector.
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[email protected]Essex Man Sentenced to 50 Years in Prison for Production of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Foster William Dove III, age 39, of Essex, Maryland, today to 50 years in prison, followed by lifetime supervised release for production of child pornography. Judge Quarles ordered that upon his release from prison, Dove must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to court documents and statements made at today’s hearing, on August 18, 2013, Dove distributed a video depicting minors engaged in sexually explicit conduct to an undercover officer using a file sharing program. A search warrant was subsequently executed at Dove’s residence and law enforcement recovered images and videos documenting Dove’s sexual abuse of two minor boys. Investigation also revealed that Dove had secretly videotaped approximately 17 additional minor males engaging in sexually explicit conduct through a hidden camera in his bathroom. Dove has been detained since his arrest on September 16, 2013.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, HSI-Baltimore, Baltimore County Police Department and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Bonnie S. Greenberg, who prosecuted the case.
El Salvadorian National Pleads Guilty to Theft of Unemployment Insurance BenefitsRead the Press Release
BOSTON – A Chelsea man pleaded guilty yesterday to fraudulently accepting over $46,000 in unemployment insurance benefits.
Oscar P. Valles-Lopez, a/k/a Oscar Valle, 44, pleaded guilty to a one-count Information charging him with mail fraud. U.S. District Court Judge George A. O’Toole scheduled sentencing for Feb. 13, 2014. Valles-Lopez is an El Salvadorian national who illegally reentered the United States in July 2003 after previously living in this country from 1996 to 2001. After working for several years under fraudulently obtained immigration papers, he lost his job in 2009. Although Valles-Lopez knew he was not entitled to unemployment insurance benefits without a valid work permit, he paid $400 for a false permit and made three claims for benefits in 2009, 2010, and 2012. Over the course of several years, Valles-Lopez cashed 111 unemployment checks totaling $46,218.
Valles-Lopez entered into a plea agreement with the government in which the parties agreed to recommend a sentence of one year of probation with the special condition that the first four months be served under home confinement. The defendant also agreed to restitution in the full amount of the benefits obtained under this scheme. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.United States Attorney Carmen M. Ortiz; Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Regional Office; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Douglas County Resident Sentenced to 84 Months in Prison for Felon in Possession of a FirearmRead the Press Release
COUNCIL BLUFFS, IA - On November 5, 2014, Barvarito Garcia Longoria, a 35 year-old resident of Omaha, Nebraska, was sentenced by United States District Court Judge John A. Jarvey to 84 months in prison to be followed by three years of supervised release for being a convicted felon in possession of a firearm, announced United States Attorney Nicholas A. Klinefeldt.
On April 3, 2014, Garcia Longoria pled guilty to the charge of being a felon in possession of a firearm. Pottawattamie County law enforcement investigated a domestic incident, and found Garcia Longoria in possession of a defaced 9mm handgun. Garcia Longoria was prohibited from possessing a firearm after he pled guilty in 2006 to third degree assault on an officer.
The investigation was conducted by the Pottawattamie County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Dominican Republic Native Charged with Impersonating AnotherRead the Press Release
PHILADELPHIA - Jonathan Melendez, a/k/a “Malvin Vasquez-Valerio,” a/k/a “JELM,” 30, a native of the Dominican Republic, was charged in a five-count indictment with three counts of false personation of citizenship, aggravated identity theft and misuse of another person’s Social Security number, announced United States Attorney Zane David Memeger. According to the indictment, between December 26, 2012 and October 17, 2013, during the course of a drug case involving heroin distribution, Melendez, a citizen of the Dominican Republic, falsely claimed to be a United States citizen.
It is further alleged that Melendez falsely represented that a certain Social Security account number was assigned to him, when, in fact, such Social Security account number was not the number assigned to him. Melendez is further charged with having possessed and used a means of identification of another person, specifically the Social Security number and the birth certificate of “JELM,” in connection with the false personation of United States citizenship. Melendez was convicted in the heroin distribution case and sentenced to 36 months in prison.
If convicted of these charges, Melendez faces a maximum penalty of 16 years in prison, including a mandatory minimum term of two years for aggravated identity theft, three years of supervised release, a fine of $1.25 million and a special assessment of $500.
The case was investigated by the FBI’s Violent Gang Task Force, U.S. Immigration and Custom Enforcement’s Enforcement and Removal Division, and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Joseph T. Labrum, III.
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
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PATTY HARTMAN, Media Contact, 215-861-8525Des Moines Pharmacist Pleads Guilty to Drug Diversion and Tax EvasionRead the Press Release
DES MOINES, IA – On November 6, 2014, Mark Graziano, principal owner of Bauder Pharmacy, and A. Michael Enloe, pled guilty to the charge of conspiracy to distribute a controlled substance, announced United States Attorney Nick Klinefeldt. Graziano also pled guilty to tax evasion.
“In addition to cheating on his taxes, Graziano has now admitted that he illegally sold hydrocodone pills out of Bauder Pharmacy” stated Nick Klinefeldt. “This occurred over five years, and involved hundreds of thousands of pills. Prescription drug abuse is a serious problem in this state and across the country. It wreaks havoc on the lives of all those involved. It has also been demonstrated to lead to the addiction of even more dangerous drugs, such as heroin. Though Graziano is a pharmacist, this activity had nothing to do with legitimate pharmacy practice. Graziano was a drug dealer: plain and simple.”
Sentencing is scheduled for February 6, 2015. If the Court accepts the terms of the plea agreement, Graziano faces a period of imprisonment between 24 and 37 months, and Enloe will be placed on probation for a period of one to five years. Graziano has also agreed to forfeit the property listed in the Notice of Forfeiture in the Second Superseding Indictment, and the parties have agreed that the property may be sold and the proceeds applied to restitution.
This case was investigated by the Drug Enforcement Administration and Internal Revenue Service Criminal Investigation. Prosecution of this matter is being handled by the U.S. Attorney’s Office for the Southern District of Iowa.
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Defendant Convicted in Identity Theft Tax Fraud Scheme Involving Medical Patients’ Personal Identifying InformationRead 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 Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, announce that defendant Kenol Augustin, 36, of Miami, was convicted by a federal jury of one count of conspiracy to commit access device fraud, in violation of Title 18, United States Code, Section 1029(b). Sentencing is scheduled for January 15, 2015. At sentencing, Augustin faces up to five years in prison.
According to court documents and evidence presented at trial, in January 2012, an individual recruited into the scheme searched their employer’s database and accessed the names and Social Security numbers (personal identity information or PII) of individual medical patients. This employee then provided a list of individuals’ PII in exchange for a cash payment made by defendant Augustin. Augustin and his co-conspirators then caused false and fraudulent tax returns seeking refunds to be filed with the Internal Revenue Service using the PII that the conspirators had so obtained.
Defendant Barnard (13-20684-CR-COOKE), who was also involved in this conspiracy, was sentenced on July 23, 2014 to 36 months in prison, to be followed by two years of supervised release, and was ordered to pay restitution of $57,000. Barnard pled guilty to one count of possession of 15 or more unauthorized access devices, in violation of Title 18, United States Code, Sections 1029(a)(3) and 2, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
Mr. Ferrer commended the investigative efforts of IRS-CI and the USSS. These cases are being prosecuted by Assistant U.S. Attorneys James V. Hayes and Gera Peoples.
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.
Civil Complaint Filed Against Islip Terrace Doctor for Issuing Prescriptions Without Legitimate Medical NeedRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, and James J. Hunt, Drug Enforcement Administration Special Agent in Charge (DEA New York), today announced the filing of a civil action by the United States against Lawrence Womack, age 48, an Islip Terrace, New York, based physician.
In the civil action, the United States alleges that between January 2011 and June 2013, the defendant wrote 241 prescriptions for Schedule II controlled substances, specifically for oxycodone, methadaone and fentanyl, in the absence of any legitimate medical need. The complaint alleges that in writing these prescriptions the defendant disregarded patients’ toxicology screens that indicated potentially lethal drug interactions. In addition, the complaint alleges that the defendant conducted periodic breast examinations in exchange for continued prescriptions and/or increased amounts of opioids, including oxycodone.
Oxycodone is a scheduled controlled substance that may be dispensed by medical professionals only for a legitimate medical purpose in the usual course of a doctor’s professional practice. It is a powerful and highly addictive drug and is increasingly abused because of its potency when crushed into a powder and ingested, leading to a heroin like euphoria.
“Medical professionals who hand out prescriptions for narcotics in the absence of any legitimate medical need place the lives of their patients at risk and contribute to the scourge of prescription drug abuse in our communities. Doctors who violate their oaths in this manner will be held accountable to the fullest extent of the law,” stated United States Attorney Lynch. “I want to thank our partners at the Department of Health and Human Services, Office of the Inspector General, for their outstanding investigative efforts in this case.”
“By no means was Dr. Womack upholding his oath to do no harm when he continued to prescribe oxycodone pills to patients after being alerted of their failed drug tests,” stated DEA Acting Special Agent in Charge Hunt. “Ignoring the warning signs, Dr. Womack’s alleged actions supported the ultimate distribution of diverted oxycodone throughout Long Island communities enabling opioid addiction.”
In January 2012, this Office and the DEA’s Long Island Tactical Diversion Squad comprising agents and officers of the DEA, Nassau County Police Department, Rockville Centre Police Department and Port Washington Police Department, in conjunction with the five District Attorneys in this jurisdiction, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Prescription Drug Initiative to mount a comprehensive response to what the United States Department of Health and Human Services’ Center for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics. So far, the Prescription Drug Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 15 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and a pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The United States’ case is being handled by Assistant United States Attorney Diane C. Leonardo.
Chicago Man Indicted on Federal Charges for Allegedly Illegally Selling and Possessing FirearmsRead the Press Release
CHICAGO ― A Chicago man was indicted on federal firearms charges alleging that he illegally sold firearms and illegally possessed nearly two dozen firearms, including assault rifles, handguns, and shotguns earlier this year. All of the firearms were seized by ATF agents following alleged purchases by an undercover confidential source, federal law enforcement officials announced today.
The defendant, JIMMY WRIGHT, also known as “Lil Man,” 28, of Chicago, was charged with one count of selling firearms without a federal firearms dealer license and eight counts of being a convicted felon-in-possession of 22 firearms in a nine-count indictment returned yesterday by a federal grand jury.
Wright has remained in federal custody since he was arrested on Oct. 7 and charged in a criminal complaint. He will be arraigned on a date to be determined in U.S. District Court in Chicago.
According to the charges, between July 21 and Sept. 22, 2014, Wright illegally sold firearms without a federal license. According to the complaint affidavit, the confidential source purchased at least 12 firearms from Wright on six different dates between July 22 and Sept. 2. These firearms included two assault rifles, seven handguns, two shotguns, and a “Tec 9” semi-automatic handgun with an obliterated serial number and an extended magazine.
The eight felon-in-possession counts allege that Wright illegally possessed a total of 22 firearms on eight different dates between July 22 and Sept. 22 of this year.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Carl Vasilko, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and Garry McCarthy, Superintendent of the Chicago Police Department.
Each count of being a felon-in-possession of firearms carries a maximum sentence of 10 years in prison, and selling firearms with a federal license carries a maximum sentence of five years in prison, and all nine counts carry a maximum fine of $250,000. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorney Timothy Storino.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Canadensis Chiropractor Sentenced to Prison on Tax and Fraud ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Canadensis chiropractor was sentenced today, in federal court in Scranton, by United States District Judge Robert Mariani, to serve 15 months in prison on charges of aiding the preparation and filing of a false federal income tax return and false statements relating to healthcare matters.
According to United States Attorney Peter Smith, Dr. Maria Giacalone-Hewson, age 43, a resident of Canadensis who operated Canadensis Healthcare, Inc., pleaded guilty to the tax and fraud charges in September of 2013.
A criminal Information was filed against Giacalone-Hewson on July 15, 2013. The charges against her arose from the filing of a 2006 federal income tax return that falsely claimed her taxable income was $89,754, when, in fact, she had taxable income of $1,151,928, and owed at least $363,566 in taxes for that year. Giacalone-Hewson was also held accountable at sentencing for taxes of $113,821 that she owed for tax years 2007 through 2010.
The criminal Information to which Giacalone-Hewson pleaded guilty also charged her with making false statements relating to healthcare matters. At the time of her guilty plea, Dr. Giacalone-Hewson admitted that she made false statements in connection with payment for health care benefits by submitting false written statements claiming that chiropractic and other services were provided to certain patients when no such services were in fact provided.
In addition to the prison term, Judge Mariani ordered that Giacalone-Hewson be supervised by a probation officer for three years following her release from prison.
The investigation was conducted by the Internal Revenue Service Criminal Investigation, the United States Secret Service and the Northeastern Pennsylvania Insurance Fraud Task Force. The case was prosecuted by Assistant United States Attorney William S. Houser.
Commissioner of Mississippi Department of Corrections and Local Businessman Indicted by Federal Grand JuryRead the Press Release
Jackson, Miss – Christopher B. Epps, former Commissioner for the Mississippi Department of Corrections, and Cecil McCrory, a former Mississippi legislator, former Justice Court Judge, former Chairman of the Rankin County School Board, and a local businessman, were arraigned today before U.S. Magistrate Judge F. Keith Ball on a 49-count indictment returned by a federal grand jury, announced Acting U.S. Attorney Harold Brittain, FBI Special Agent in Charge Donald Alway, IRS-Criminal Investigation Special Agent in Charge Gabriel L. Grchan, U.S. Postal Inspector in Charge Robert Wemyss, and Mississippi State Auditor Stacey Pickering.
CRIMINAL CHARGES IN THE INDICTMENT:
Epps and McCrory were charged in the indictment with:
COUNTS
CHARGE
PRISON
FINE
SUPERVISED RELEASE
1
Honest Services
Wire Fraud Conspiracy
18 U.S.C. § 1349
20 years
$250,000
3 years
2-13
(Epps only)
Bribery
18 U.S.C. § 666(a)(1)(B)
10 years
$250,000
3 years
14-22
(McCrory only)
Bribery
18 U.S.C. § 666(a)(2)
10 years
$250,000
3 years
23
Money Laundering Conspiracy
18 U.S.C. § 1956(h)
20 years
greater of twice the value of property involved or $500,000
3 years
24-27
Honest Services
Wire Fraud
18 U.S.C. §§ 1343, 1346
20 years
$250,000
3 years
Epps was also individually charged in the indictment with:
COUNTS
CHARGE
PRISON
FINE
SUPERVISED RELEASE
28-41
Illegal Structuring of
Financial Transactions
31 U.S.C. § 5324(a)(3)
5 years
$250,000
3 years
42-43
Money Laundering
18 U.S.C. § 1956(a)(1)(B)(i)
20 years
greater of twice the value of property involved or $500,000
3 years
44-49
Filing False Tax Returns
26 U.S.C. § 7206(2)
3 years
$100,000
1 year
FACTS OF THE CASE:
According to the indictment, from 2007 through March 2014, McCrory gave Epps bribes and kickbacks in exchange for Epps awarding or directing the award of MDOC contracts, leases, or work to McCrory’s companies or to companies employing McCrory as a consultant. McCrory secretly paid Epps either in cash, through checks paying off Epps’s home mortgage, through wire transfers paying the loan on Epps’s beach condominium, or through wire transfers to investment accounts owned by Epps. Epps illegally structured the deposits of cash received from McCrory into Epps’s various bank accounts, or used such cash to purchase cashier’s checks, all in amounts less than $10,000. This structuring alone reached almost $1 million from January 2008 through June 2014. Epps further concealed these crimes by filing false tax returns from 2008 through 2013, whereby he failed to report such income on his tax returns.
In addition, the government has placed a lien on and is seeking to forfeit Epps’s home in Flowood, Mississippi, and his condominium in Pass Christian, Mississippi. The government also seized Epps’s 2010 Mercedes Benz S550 and 2007 Mercedes Benz S65 V12 AMG, as well as almost $1 million in cash from various bank and investment accounts controlled by Epps.
Harold Brittain, the Acting U.S. Attorney in this case, stated:
"The abuse of power and position by public officials has plagued our state for many years. Our tolerance for public corruption is zero. We will hold accountable under the law everyone who bears the responsibility of public service and sells the trust that has been bestowed upon them. We will not tolerate such fraud and abuses by public officials that have cost our citizens so dearly."
"By statute, the FBI is charged with the investigation of public officials alleged to abuse their positions for private gain," stated Donald Alway, Special Agent in Charge of the FBI in Mississippi. "This remains a top priority. Mississippi has the right to expect honest, unbiased service and representation from its elected and/or appointed officials at all levels of government. The FBI will continue to work in cooperation with its federal, state, and local partners to identify, investigate, and prosecute those who would violate the public’s trust."
IRS Criminal Investigation Special Agent in Charge Gabriel L. Grchan said: "Quite often crimes of greed include more than concealing income from the IRS. This case is a prime example of how Special Agents of IRS Criminal Investigation work with the FBI, the United States Attorney's Office and local law enforcement to bring individuals who have violated the
public’s trust to justice. We will continue to work tirelessly with our partners to stop those individuals who scheme and conspire with each other to benefit themselves to the detriment of other citizens and their government. This case should send a strong message to the citizens of Mississippi, and those engaged in public corruption, that there is no place to hide and justice will ultimately be served. "
"Postal Inspectors have a long history of relentlessly pursuing those who use the mail in schemes to defraud the public, and public corruption cases like this are particularly troubling," said U.S. Postal Inspector in Charge Robert Wemyss. "We are grateful to have been able to lend our unique expertise to investigate the fraud and to track down assets the defendants allegedly attempted to steal from the American people."
The Mississippi Office of the State Auditor assisted with the investigation. Commenting on the indictments, State Auditor Stacey Pickering said, "It is a very sad day in Mississippi when two men with a history of public service are charged with blatantly committing crimes to increase their personal fortunes. They are accused of deliberately violating public trust while serving in positions of leadership. This case is a textbook example of state, local and federal officials working together to protect taxpayer money."
In announcing the indictment, Acting U.S. Attorney Harold Brittain, FBI Special Agent in Charge Donald Alway, IRS-Criminal Investigation Special Agent in Charge Gabriel L. Grchan, U.S. Postal Inspector in Charge Robert Wemyss, and Mississippi State Auditor Stacey Pickering praised the efforts of special agents with the FBI, IRS-Criminal Investigations, U.S. Postal Inspection Service, and the Mississippi State Auditor’s Office, as well as the Leake County Sheriff’s Office.
Assistant U.S. Attorneys Mike Hurst, Darren LaMarca, and Scott Gilbert, as well as financial analyst Kim Mitchell, are prosecuting the case.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
Buffalo Man Sentenced for Committing Four Bank RobberiesRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Earl Moss, 29, of Buffalo, NY, who was convicted of bank robbery and brandishing a firearm in connection with a crime of violence, was sentenced to 171 months in prison by Chief U.S. District Court Judge William M. Skretny. The defendant was also ordered to pay restitution totaling $48,636.00
According to Assistant U.S. Attorneys John E. Rogowski and Edward H. White, who handled the case, the defendant robbed four banks in Buffalo and Amherst in 2010 and 2011 including:
o The April 20, 2010, robbery of the Citizens Bank at 3180 Sheridan Drive in Amherst, during which the defendant, wearing women’s clothing, passed the teller a note demanding money. After the teller turned over an amount of money to Moss and shortly after he left the bank, the dye pack in the bank money exploded. The defendant abandoned the money which was recovered by a nearby citizen who took the money back to the bank;
o The April 30, 2010, robbery of the Citizens Bank at 1893 Elmwood Avenue in Buffalo, during which the defendant, again wearing women’s clothing, passed the teller a note reading “no dye packs or I’ll kill you.” The defendant fled the scene after receiving an amount of money;
o The December 24, 2010, armed robbery of the Citizens Bank at 3180 Sheridan Drive in Amherst, during which the defendant, wearing a hooded sweat shirt and sun glasses, waived a silver hand gun and demanded money from the bank tellers. Moss received money from several tellers and ran from the bank. A customer in the bank took pursuit after the defendant and fired four shots from a pistol he had a permit to carry. None of the shots struck Moss and the defendant escaped with the money; and
o The April 18, 2011, armed robbery of the Citizens Bank at 1893 Elmwood Avenue in Buffalo, during which the defendant, again wearing a hooded sweat shirt and sun glasses, waived a silver hand gun and demanded money from the bank tellers. Moss received money from several tellers and ran from the bank.
Moss moved to the Atlanta, Georgia, area after the first two robberies. In early December, 2010, following an armed robbery of a bank in Atlanta, the Federal Bureau of Investigation received information that Moss may be responsible for that robbery as well as the Buffalo area robberies. As a result, the FBI gathered sufficient evidence which resulted in Moss’s arrest two days after the last robbery. The defendant has been incarcerated since his arrest.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, the Amherst Police Department, under the direction of Chief John C. Askey, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.Buffalo Man Sentenced for Bank RobberyRead the Press Release
BUFFALO, N.Y.BU.S. Attorney William J. Hochul announced today that Demetrien Bell Bradley, 20, of Buffalo, NY, who was convicted of bank robbery, was sentenced to 24 months in prison by Chief U.S. District Judge William M. Skretny. The defendant was also ordered to pay $1,540 in restitution.
According to Assistant U.S. Attorney Mary Catherine Baumgarten, who handled the case, on November 6, 2013, Bradley entered the Key Bank at 306 West Ferry Street in Buffalo. The defendant passed the teller a note demanding money and threatening that he had a gun.
The sentencing is the culmination of an investigation by the Federal Bureau of Investigation Safe Streets Task Force.Biotronik Inc. to Pay $4.9 Million to Resolve Claims that Company Paid Kickbacks to PhysiciansRead the Press Release
Biotronik Inc. of Lake Oswego, Oregon, has agreed to pay the United States $4.9 million to resolve allegations made under the False Claims Act that the company made various improper payments to induce physicians to use devices that it manufactured and sold, the Justice Department announced today.
“When medical device manufacturers make improper payments to physicians, they encourage medical decision-making based on financial gain rather than the best interests of patients,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “Today’s resolution demonstrates the Department of Justice’s continuing commitment to ensuring that beneficiaries of federal health care programs receive appropriate medical care.”
The settlement resolves allegations that Biotronik, through the payment of kickbacks to physicians, caused hospitals and ambulatory surgery centers to submit false claims to Medicare and Medicaid for the implantation of Biotronik pacemakers, defibrillators and cardiac resynchronization therapy devices. Biotronik allegedly induced electrophysiologists and cardiologists practicing in Nevada and Arizona to continue using Biotronik devices, or to convert to Biotronik devices, by paying the implanting physician in the form of repeated meals at expensive restaurants and inflated payments for membership on a physician advisory board.
“Today’s resolution of claims underscores one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by illegal payments,” said U.S. Attorney Benjamin Wagner for the Eastern District of California.
The settlement announced today stems from a whistleblower complaint filed by a former Biotronik employee, Brian Sant, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the United States and to share in the proceeds of the suit. The act permits the United States to intervene and take over the lawsuit, as it did in this case as to some of Sant’s allegations. Sant will receive approximately $840,000 of the federal 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 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with Biotronik Inc. was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office for the Eastern District of California, the U.S. Department of Health and Human Services-Office of Inspector General and the FBI.
The lawsuit is captioned United States ex rel. Sant v. Biotronik, Inc., No. 2:09-CV-03617 KJM EFB (E.D. Cal.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Biotronik Inc. to Pay $4.9 Million to Resolve Claims That Company Paid Kickbacks to PhysiciansRead the Press Release
SACRAMENTO, Calif. – Biotronik Inc. of Lake Oswego, Oregon, has agreed to pay the United States $4.9 million to resolve allegations under the False Claims Act that the company made various improper payments to induce physicians to use devices manufactured and sold by Biotronik, United States Attorney Benjamin B. Wagner and the Justice Department announced today.
“When medical device manufacturers make improper payments to physicians, they encourage medical decision-making based on financial gain rather than the best interests of patients,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “Today’s resolution demonstrates the Department of Justice’s continuing commitment to ensuring that beneficiaries of federal health care programs receive appropriate medical care.”
The settlement resolves allegations that Biotronik, through the payment of kickbacks to physicians, caused hospitals and ambulatory surgery centers to submit false claims to Medicare and Medicaid for the implantation of Biotronik pacemakers, defibrillators, and cardiac resynchronization therapy devices. Biotronik allegedly induced electrophysiologists and cardiologists practicing in Nevada and Arizona to continue using Biotronik devices, or to convert to Biotronik devices, by paying the implanting physician in the form of repeated meals at expensive restaurants and inflated payments for membership on a physician advisory board.
“Today’s resolution of claims underscores one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by illegal payments,” said, U.S. Attorney Wagner.
The settlement announced today stems from a whistleblower complaint filed by a former Biotronik employee, Brian Sant, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the United States and to share in the proceeds of the suit. The act permits the United States to intervene and take over the lawsuit, as it did in this case as to some of Sant’s allegations. Sant will receive approximately $840,000 of the federal 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 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with Biotronik Inc. was the result of a coordinated effort among the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Eastern District of California; the U.S. Department of Health and Human Services, Office of Inspector General, and the FBI.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
Arrest Made in Ventura for $5 Million Movie Studio Construction Scam in Northern CaliforniaRead the Press Release
SACRAMENTO, Calif. — A 32-count indictment was unsealed today after the arrest of Carissa Carpenter, 51, formerly of Malibu, charging her with mail fraud, wire fraud, and three counts of making a false statement to a government agent, United States Attorney Benjamin B. Wagner announced.
According to court documents, from 1997 until October 24, 2014, Carpenter represented to investors and others that she had a project to build a movie studio in Northern California. As a result of the scheme, investors, firms who did work for Carpenter and municipalities collectively lost over $5 million on the project.
According to the indictment, Carpenter claimed that her projected movie studio complex would be profitable and environmentally friendly and was supported by well‑connected people in the entertainment industry. She said that she had invested hundreds of millions of dollars of her own money in the project and that she had arranged financing for the project but needed investment or bridge loans until the alleged financing was complete. The locations of the project varied: El Dorado Hills, north of the Sacramento International Airport in Sutter County, Lathrop, the former naval base on Mare Island in Vallejo, and Dixon, among other places. Additionally, Carpenter represented that reputable architecture, construction, design, and public relations firms were involved in the project, and that she had or was in the process of finalizing the purchase of the land where the studio would be built. As a result, investors gave Carpenter millions of dollars to invest in her studio project.
The indictment alleges that in fact, Carpenter used investor money to fund her personal expenses and extravagant lifestyle. Contrary to her claims, the Hollywood people were not involved in the project at all or had little involvement. Similarly, the architecture, construction, design, and public relations firms were not involved or had done only preliminary work on the project. She also did not own or purchase property for the studio.
Further, during the investigation in July 2013, Carpenter told an FBI agent that she told investors that she was going to use their money for personal expenses, that she had used 50-75 percent of investor money for the project, and that two well-known Hollywood producers had committed to her Lathrop project and that she had spoken to one of them. All of these statements were false.
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Todd A. Pickles is prosecuting the case.
If convicted, Carpenter faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gross loss or gain from the fraud scheme. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Ambulance Company, Owners, and Manager Plead Guilty to Health Care Fraud and Kickback SchemeRead the Press Release
PHILADELPHIA – Life Support Corporation, formerly located in Feasterville-Trevose, PA, pleaded guilty today to one count of conspiracy to commit health care fraud. In separate hearings, the company owners, Nazariy Kmet, 35, of Jamison, PA, and Bogdan Kmet, 30, Warminster, PA and a company manager, Rostislav Kmet, 26, of Philadelphia, PA, also pleaded guilty to conspiracy to commit health care fraud and to violating the federal anti-kickback statute. Sentencing hearings are scheduled for all parties on February 11, 2015.
Defendant Life Support and its owners and a manager operated an ambulance company that transported patients who were able to walk and could travel safely by means other than ambulance and who therefore were not eligible for ambulance transportation under Medicare requirements. The defendants or others acting on their behalf falsified reports to make it appear that the patients needed to be transported by ambulance when the defendants and their employees knew that the patients could be transported safely by other means and that many of them were able to walk. Some patients were transported in personal vehicles rather than ambulances and those trips were billed to Medicare as if ambulance services had been provided. The defendants were also involved in paying kickbacks to patients so that the patients would continue to be transported by Life Support ambulances rather than switching to another fraudulent ambulance company. The defendants billed for the ambulance services as if those services were medically necessary and, as a result of the fraudulent scheme, the Medicare program paid more than $1.9 million for this inappropriate method of transportation.
Nazariy Kmet, Bogdan Kmet, and Rostislav Kmet each face substantial terms of imprisonment, three years of supervised release, a fine in excess of $3.8 million, mandatory restitution estimated at over $1.9 million, forfeiture of assets, and a special assessment. Life Support Corporation will also have restitution and forfeiture obligations. All defendants could be excluded from participating in federal health care programs.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Matthew J.D. Hogan.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525