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9 December 2014
Former Union President Sentenced to 22 Months in Prison for Extortion Conspiracy Involving Christmastime Tribute PaymentsRead the Press Release
NEWARK, N.J. - The former president of International Longshoremen’s Association (ILA) was sentenced today to 22 months in prison for conspiring to extort ILA Local 1235 longshoremen on the New Jersey piers for Christmastime tribute payments, New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.
Thomas Leonardis, 57, of Glen Gardner, New Jersey, the president of the union from 2008 through 2011, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to Count Three of a second superseding indictment charging him with conspiring to extort Christmastime tributes from ILA Local 1235 members. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
During their guilty plea proceedings, Leonardis – along with Vincent Aulisi, 82, of West Orange, New Jersey, the president of ILA Local 1235 from approximately 2006 through 2007; and Robert Ruiz, 56, of Watchung, New Jersey, the delegate of the union from approximately 2007 through 2010 and former ILA representative – admitted that they conspired with each other and others to compel tribute payments from ILA union members, who made the payments based on actual and threatened force, violence and fear. The timing of the extortions typically coincided with the receipt by certain ILA members of “Container Royalty Fund” checks, a form of year-end compensation. Leonardis and Ruiz were suspended from their positions following their arrest in January 2011. Aulisi had already retired from his employment on the New Jersey piers at the time of his arrest.
Charges are still pending against three defendants in the superseding indictment, including a racketeering conspiracy charge against Stephen Depiro, 59, of Kenilworth, New Jersey – a soldier in the Genovese organized crime family of La Cosa Nostra. Since at least 2005, Depiro has managed the Genovese family’s control over the New Jersey waterfront – including the nearly three-decades-long extortion of port workers in ILA Local 1, ILA Local 1235, and ILA Local 1478. Members of the Genovese family, including Depiro, are charged with conspiring to collect tribute payments from New Jersey port workers at Christmastime each year through their corrupt influence over union officials, including the last three presidents of Local 1235.
In addition to the prison term Judge Cecchi sentenced Leonardis to serve three years of supervised release.
Aulisi and Ruiz previously pleaded guilty before Judge Cecchi to conspiring to extort Christmastime tributes from ILA Local 1235 members. In October 2014, Aulisi and Ruiz were sentenced to 18 months and 20 months in prison, respectively.
U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey, under the direction of Special Agent in Charge Aaron T. Ford, and in New York, under the direction of Assistant Director in Charge George Venizelos, as well as the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, with the investigation leading to today’s sentencing. They also thanked the Waterfront Commission of New York Harbor for its cooperation and assistance in the investigation.
The government is represented by Assistant U.S. Attorney Jacquelyn M. Kasulis of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.
The charges and allegations against the remaining defendants are merely accusations and they are considered innocent unless and until proven guilty.
14-431
Defense counsel: Michael N. Pedicini Esq., Chatham, New Jersey
Former St. Clair Sheriff's Deputy, Inmate Indicted for Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former St. Clair County, Mo., sheriff’s deputy and a former county jail inmate were indicted by a federal grand jury today for their roles in a wire fraud scheme.
Michael E. Mullaney, 52, of Lowry City, Mo., and William E. Parker, 52, of Fort Ritchie, Fla., formerly of Urich, Mo., were charged in an indictment returned by a federal grand jury in Springfield, Mo.
Mullaney was a deputy with the St. Clair County Sheriff’s Department who arrested Parker for first degree burglary on Feb. 20, 2010. While Parker was incarcerated, the indictment says, he and Mullaney devised a scheme to defraud Work Force West Virginia to claim unemployment benefits for Parker to which he was not entitled.
Today’s indictment alleges that Mullaney obtained personal information from Parker in order to make Parker’s claim for unemployment benefits through Work Force West Virginia. Mullaney allegedly completed an Internet form with Parker’s personal information to fraudulently certify Parker’s eligibility for unemployment benefits. Parker was not eligible for unemployment benefits, the indictment says, because he was not available and willing to accept full-time suitable work while he was incarcerated.
As a result of the fraud scheme, the indictment says, Parker received $5,388 on a bank debit card between Feb. 25 and May 10, 2010.
Today’s indictment also contains a forfeiture allegation, which would require Mullaney and Parker to forfeit to the government $5,388, which represents the proceeds obtained from the alleged offense.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull II. It was investigated by the FBI, the Missouri State Highway Patrol, the St. Clair County, Mo., Sheriff’s Department and the Work Force West Virginia Unemployment Compensation Division.
- Former School Teacher Detained Pending Child Pornography Charges
Former Grady Hospital Payroll Director Convicted of Embezzlement SchemeRead the Press Release
ATLANTA - Donald Thomas, the former payroll director for the Grady Memorial Hospital Corporation, has been convicted by a jury for stealing over $480,000 from one of Georgia’s largest hospitals.
“Thomas embezzled from a longstanding public institution that provides medical care to the poor and underserved in the Atlanta area and beyond,” said United States Attorney Sally Quillian Yates. “By its guilty verdict, the jury has held him accountable for stealing from taxpayers and Grady’s patients.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “At a time when health care institutions such as Grady Hospital are under the strain to meet the needs of their community, to include those served by publicly funded programs, the criminal actions of former Grady Hospital Payroll Director Thomas are all that more egregious. The conviction of Thomas should serve as a reminder that the FBI is part of an oversight process involving any and all allegations of thefts from federal health care programs and their related institutions and anyone involved in such activity could find themselves in front of a jury trial on similar charges.”
According to United States Attorney Yates, the charges and other information presented in court: From December 1994 through June 2011, Thomas served as Assistant Controller for Grady Memorial Hospital Corporation (“Grady”). Grady is one of the largest providers of charitable care in the state of Georgia. It relies significantly on federal funding, including Medicare and grants, to provide medical services regardless of ability to pay.
From January 2008 until June 2011, Thomas oversaw payroll for all 5500 Grady employees. He had access to and knowledge of Grady’s payroll system, which he used to falsify additional vacation pay and severance pay for terminated Grady employees. Since the employees had already left Grady, Thomas calculated that it was less likely that his fraud would be detected. After adding the additional compensation to the terminated employees’ payroll records, Thomas then removed their bank account numbers and replaced them with his own. As a result, the fraudulent payments were deposited into his own bank accounts. A total of 134 fraudulent payments were made in this manner.
Additionally, in two instances, Thomas falsified pay and created paper checks for the additional compensation. The checks were made payable to terminated Grady employees; however, Thomas forged the employees’ signatures to endorse the checks, and deposited them into his own bank account.
The scheme was discovered when a terminated employee contacted Grady to inform the payroll staff that her 2011 W-2 tax form showed more compensation than she had actually earned. Further investigation revealed that her payroll records had been altered and additional pay in her name had been deposited into an account controlled by Thomas. Though Thomas had attempted to cover up his embezzlement by reversing most of the fraudulent changes, in a few instances, he had failed to do so. As a result, additional wages and compensation were added to several employees’ year-end W-2 tax forms.
Over the course of the scheme, Thomas obtained over $480,000 in falsified vacation and severance pay.
The jury convicted Thomas, 55, of Atlanta, Ga., of six counts of theft from an organization receiving federal funds and six counts of wire fraud related to the fraudulent direct deposit payments. He was also convicted of two counts of bank fraud related to the forged checks. Sentencing is scheduled for February 25, 2015, at 10:30 a.m. before United States District Judge Charles A. Pannell, Jr.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorneys Shanya Dingle and G. Scott Hulsey are prosecuting the case.
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/.
Former Freedom Industries executive released on bondRead the Press Release
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin announced that former Freedom Industries executive Gary Southern was arrested Monday, December 8, 2014, in the Middle District of Florida. He made his initial court appearance today at 1:00 p.m. before United States Magistrate Judge Carol Mirando in Ft. Myers, Florida. Southern was released on a $100,000 unsecured bond, with his travel restricted to the Middle District of Florida and the Southern District of West Virginia. He was also required to surrender his passport and lawful permanent resident card. Southern’s next court appearance is set for December 18, 2014, at 2:00 p.m., for a preliminary hearing in front of U.S. Magistrate Judge Dwane Tinsley at the Robert C. Byrd United States Courthouse in Charleston, West Virginia. Southern’s arrest comes as a result of a criminal complaint filed Monday, December 8, 2014, in the Southern District of West Virginia, charging him with bankruptcy fraud, lying in a bankruptcy case and committing wire fraud by filing false documents in a bankruptcy case.
Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former FBI Agent Sentenced for Falsifying Background Check InformationRead the Press Release
Former FBI agent and Fort Lauderdale resident was sentenced today for falsifying background check interviews that he performed for potential employees of government entities.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Jay H. Donly, Acting Special Agent in Charge, Department of Homeland Security, Office of the Inspector General (DHS-OIG), made the announcement.
John McDonough, 69, of Fort Lauderdale, Florida, was sentenced by U.S. District Judge Robert N. Scola, Jr., to two years of probation and ten days of intermittent confinement in prison. On August 19, 2014, John McDonough pled guilty to one count of knowingly falsifying records in federal investigations, in violation of Title 18, United States Code, Section 1519. McDonough, a former FBI agent, worked as an independent contractor performing background check investigations for potential employees of government entities. During a quality control check, it was discovered that McDonough had falsified background check interviews for potential employees of Customs and Border Protection.
Mr. Ferrer commended the investigative efforts of DHS-OIG and the assistance provided by the Department of Justice Office of the Inspector General. This case was prosecuted by Assistant U.S. Attorney Vanessa Snyder.
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.
Former Connecticut Resident Charged with Attempting to Travel to China with Stolen U.S. Military Program DocumentsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that YU LONG, 36, formerly of New Haven, Conn., has been arrested and charged with attempting to travel to China with sensitive proprietary documents that set forth detailed equations and test results used in the development of technologically advanced titanium for U.S. military aircraft. The documents were taken from a Connecticut defense contractor where LONG had been employed.
LONG was arrested on a federal criminal complaint on November 7, 2014 at a residence in Ithaca, N.Y., after he had attempted, two days earlier, to fly to China from Newark Liberty International Airport in New Jersey, in the possession of the sensitive, proprietary material. LONG initially appeared in federal court in Syracuse, N.Y., on November 8 and 10, 2014, where he was ordered detained pending his transport to Connecticut to face the charges.
LONG appeared this morning before U.S. Magistrate Judge William I. Garfinkel in Bridgeport, Conn., who ordered the criminal complaint to be unsealed and LONG to remain in custody.
As alleged in the complaint affidavit and in statements made in court, LONG holds Chinese citizenship and is a lawful permanent resident of the U.S. From approximately August 2008 to May 2014, LONG worked as a Senior Engineer / Scientist at a research and development center for a major defense contractor in Connecticut (“Company A”). Both during and after his employment there, LONG traveled to the People’s Republic of China. Most recently, on August 19, 2014, LONG returned to the U.S. from China through John F. Kennedy International Airport in New York and, during a secondary inspection screening by U.S. Customs and Border Protection (CBP) officers, LONG was found in the possession of $10,000.00 in undeclared U.S. cash, registration documents for a new corporation being set up in China, and a largely completed application for work with a state-controlled aviation and aerospace research center in China. The application materials highlighted certain of LONG’s work history and experiences that he claimed to have obtained while employed at Company A, including work on F119 and F135 engines. The F119 engine is employed by the U.S. Air Force F-22 Raptor fighter aircraft, and the F135 engine is employed by the U.S. Air Force F-35 Lightning II fighter aircraft.
According to the criminal complaint and statements made in court, on November 5, 2014, LONG boarded a flight from Ithaca to Newark Liberty International Airport, with a final destination of China. During LONG’s layover in Newark, CBP officers inspected LONG’s checked baggage and discovered that it contained, among other things, sensitive, proprietary and export controlled documents from another major defense contractor, located outside the state of Connecticut (“Company B”). Further investigation determined that the U.S. Air Force had convened a consortium of major defense contractors, including Company A and Company B, to work together to see whether they could collectively lower the costs of certain metals used. As part of those efforts, members of the consortium shared technical data, subject to stringent restrictions on further dissemination. Company B reviewed the Company B documents found in LONG’s possession at Newark Liberty Airport and confirmed that it provided the documents to Company A as part of the consortium. Company B further confirmed that LONG was never an employee of Company B. A review of Company A computer records indicated that LONG had printed the documents while employed at Company A. The documents bore warnings that they contained sensitive, proprietary and export controlled material, which could not be copied or communicated to a third party. Moreover, since 1989, the U.S. has imposed a prohibition upon the export to China of all U.S. defense articles and associated technical data as a result of the conduct in June 1989 at Tiananmen Square by the military of the People’s Republic of China.
The complaint charges LONG with transporting, transmitting and transferring in interstate or foreign commerce goods obtained by theft, conversion, or fraud. The charge carries a maximum term of imprisonment of 10 years and a fine of up to $250,000.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation is being led by the Federal Bureau of Investigation in New Haven in coordination with Homeland Security Investigations in New Haven and Newark. U.S. Attorney Daly also thanked the Federal Bureau of Investigation in Ithaca, Syracuse and Newark, the U.S. Customs and Border Protection Service in New York and Newark, and the U.S. Attorney’s Offices for the Northern District of New York and the District of New Jersey, for their efforts and assistance in this matter.
This case is being prosecuted by Assistant U.S. Attorneys Stephen Reynolds and Krishna Patel of the District of Connecticut, and Trial Attorney Brian Fleming of the Justice Department’s Counterespionage Section (CES).
PUBLIC AFFAIRS CONTACT:
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(203) 821-3722 [email protected]Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Greenville, South Carolina ---- United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictment(s) against the following: Abbeville County Resident Indicted for Distribution of Child Pornography
Kenneth Mark Brooks, age 53, of Donalds, South Carolina, was charged in a 2-count Indictment with distributing child pornography. The penalty Brooks could receive for each count is not less than five (5) years and not more than twenty (20) years imprisonment and a maximum fine of $250,000.00. This case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) special agents and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution.
Foreign Nationals Charged with Illegal Re-entry
Celerino Santaana-Soriano and Andres Francisco were each charged in Indictments with illegal re-entry to the United States, a violation of Title 8, United States Code, Section 1326. The maximum penalty each could receive, depending on their prior criminal history, is two to twenty years imprisonment. These cases were investigated by U.S. Immigration and Customs Enforcement (ICE) agents and are assigned to Assistant United States Attorney Max Cauthen of the Greenville office for prosecution.
Individual Indicted for Failure to Register as a Sex Offender
Billy Owens Orsini was charged in a 1-count Indictment with failure to register as a sex offender, a violation of Title 18, United States Code, Section 2250. The maximum penalty he could receive is ten years imprisonment. The case was investigated by agents of the United States Marshals Service and is assigned to Assistant United States Attorney Max Cauthen of the Greenville office for prosecution.
Greenville Resident Charged with Making Counterfeit Money
Lowman Leon Jamison, II, age 27, of Greenville, South Carolina, was charged in a 3-Count Indictment with making and selling counterfeit U.S. currency, a violation of Title 18, United States Code, Sections 471 and 473. The maximum penalty he could receive is twenty years imprisonment. The case was investigated by agents of the United States Secret Service and is assigned to Assistant United States Attorney Max Cauthen of the Greenville office for prosecution.
The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.Dry Prong Man Pleads Guilty to Damaging Archaeological Site in Kisatchie ForestRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that a Dry Prong man pleaded guilty Monday to illegally excavating a protected archaeological site in the Kisatchie National Forest.
Robert Edgar Miles Jr., 44, of Dry Prong, La., pleaded guilty before U.S. Magistrate Judge James D. Kirk to one count of unauthorized excavation, removal, damage, and alteration of archaeological resources. According to evidence presented at the guilty plea, U.S. Forest Service officers and archaeologists found a protected archaeological site, which was used as a campsite by native peoples from 2000 B.C. to 700 A.D., in the Kisatchie National Forest that had been heavily excavated leaving deep holes throughout the site. During the one-year investigation, officers captured images of Miles digging at the site in 2013 and later recovered multiple artifacts from the defendant.
Miles faces one year in prison, one year of supervised release and a $10,000 fine. Sentencing was set for March 5, 2015.
The U.S. Forest Service conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.Dexter Man Pleads Guilty to Pharmacy RobberyRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Michael
Thompson, 27, of Dexter, Maine, pled guilty today in U.S. District Court in Bangor to robbing a
Rite Aid pharmacy in Guilford, Maine.According to court records, on March 10, 2012, Thompson entered the Rite Aid pharmacy wearing a bandana, hood, sunglasses and gloves. He jumped over the pharmacy counter, brandished a large hunting style knife and demanded narcotics. A pharmacist opened the locker containing narcotics and Thompson filled his back pack with more than $500 worth of drugs.
The defendant faces up to 20 years in prison and a fine of up to $250,000. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.The investigation was conducted by the Piscataquis County Sheriff’s Office, the Maine
State Police, the Federal Bureau of Investigation and the Somerset County Sheriff’s Office.Department of Justice Launches New Digital ServicesRead the Press Release
Today the U.S. Department of Justice is announcing the launch of two new digital services for the American people: the DOJ News API and the DOJ Law Jobs API. These web APIs (application programming interfaces) provide web developers the ability to build mobile apps and other software applications that can search, sort, and filter thousands of press releases, speeches, blog posts, and law job vacancy announcements published by the Department. Consistent with the President's technology vision described in the Digital Government Strategy and Open Data Policy, this launch transforms collections of website documents into a transparent, interactive dataset.
Today's API launch is made possible by an effort led by the Office of the Chief Information Officer to replace the aging technology infrastructure of Justice.gov with a cloud-based, open source website management platform that will be used by hundreds of Department of Justice component offices across the country. This website upgrade adds search, sort, and filter capabilities to thousands of Supreme Court briefs, legal opinions, Freedom of Information Act (FOIA) court decisions, Congressional testimony, and more. To get started using the APIs or to learn more about developer resources from the Department, see www.justice.gov/developer.
“The APIs are part of an effort to replace aging technology with a cloud-based, open source platform,” said Deputy Assistant Attorney General, Information Resources Management/Chief Information Officer Joseph F. Klimavicz. “Website content that has been migrated to the new platform automatically adjusts to fit any device, including mobile devices and tablets, as well as desktops, making the Department's information assets more accessible than ever before. The open source platform also enables the Department to refresh content rapidly, providing better access to information to the American public.
In developing the website management platform and APIs, the Department followed guidance from the U.S. Digital Service and collaborated with the 18F program at the General Service Administration.
“It’s wonderful to see the Justice Department building out their suite of APIs,” said GSA Senior API Strategist Gray Brooks. “There's fantastic potential in government APIs, for the public as well as for agency operations. Simply put, this is the future of digital government and the efforts that go into justice.gov/developer will result in a more efficient and productive operation.”
Additional details about digital strategy and open government at the U.S. Department of Justice are available at www.justice.gov/digitalstrategy and www.justice.gov/open.
Daniel J. Casamatta Is Appointed Acting U.S. Trustee for Arkansas, Missouri and NebraskaRead the Press Release
WASHINGTON – Daniel J. Casamatta has been appointed by Attorney General Eric Holder as Acting U.S. Trustee for Arkansas, Missouri and Nebraska (Region 13), effective on January 1, 2015, the Executive Office for U.S. Trustees announced today. Mr. Casamatta replaces Nancy J. Gargula, the U.S. Trustee for Region 10 (Indiana and Central and Southern Illinois), who concurrently has served as the U.S. Trustee for Region 13 since 2006.
Mr. Casamatta has served as the Assistant U.S. Trustee in the Kansas City, Mo., office of the U.S. Trustee Program (USTP) since 2008. Prior to that appointment, he served as Assistant U.S. Trustee in Grand Rapids, Mich., for 18 years, and for periods of time was also the Acting Assistant U.S. Trustee in Indianapolis and the Acting Chief of the USTP's National Bankruptcy Training Institute located in the National Advocacy Center in Columbia, S.C. Mr. Casamatta currently leads the USTP's Data Integrity Group to ensure the accuracy and completeness of data in the Program's enforcement reporting systems. Before joining the USTP more than 26 years ago, Mr. Casamatta engaged in the private practice of law in Cleveland, specializing in commercial litigation and bankruptcy matters. He received his law degree from Case Western Reserve University Law School in Cleveland, and his undergraduate degree from Cleveland State University.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 93 field office locations. Region 13 is headquartered in Kansas City, Mo., with additional offices in Little Rock, Ark., and Omaha, Neb.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Dallas Woman Who Stole A Registered Nurse’s Identity and Used That Identity to Fraudulently Obtain Employment at Eight Metroplex Hospice Companies Faces up to 15 Years in Federal PrisonRead the Press Release
DALLAS — A Dallas woman who stole the identity of a registered nurse and used that identity to work at several Dallas-Fort Worth (DFW) area hospice companies, appeared in court this morning before U.S. Magistrate Judge David L. Horan, and pleaded guilty to a federal offense stemming from that conduct, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Jada Necole Antoine, 33, pleaded guilty to one count of fraud in connection with means of identification. She faces a maximum statutory penalty of 15 years in federal prison, a $250,000 fine and restitution. Antoine has been in custody since her arrest this past summer in Georgia on a related criminal complaint filed in May 2014 in the Northern District of Texas. She is scheduled to be sentenced on March 16, 2015.
According to documents filed in the case, Antoine, who was not licensed as a physician, registered nurse, or other health care provider, stole a registered nurse’s driver’s license and social security card, and used that victim’s driver’s license, social security number, and other means of identification to obtain employment at eight different hospice companies in the DFW area, including Heart to Heart Hospice of Texas, Odyssey Healthcare GP, LLC, Community Hospice of Texas, Elysian Hospice, Hospice Pharmacy Solutions, New Century Hospice, Keystone Custom Care Hospice, and Silverado Senior Living Hospice.
Having fraudulently obtained employment as a registered nurse at Heart to Heart and Odyssey, Antoine had direct responsibility for patient care. She submitted documents to Heart to Heart and Odyssey that falsely indicated that care was provided to patients under her supervision by a registered nurse, namely the registered nurse whose identification she had stolen.
Antoine’s false statements, theft of the victim’s identity, and other fraudulent activity caused Heart to Heart, Odyssey and other hospice agencies to submit false claims for, and obtain reimbursement from, Medicare and Medicaid for hospice services provided to Medicare beneficiaries and Medicaid clients. From approximately January 2009 through April 20, 2012, approximately $2.3 million in hospice claims were submitted to Medicare for services purportedly performed by Antoine while she was impersonating the victim registered nurse.
Antoine received compensation of $5,077 from Heart to Heart and $49,851 from Odyssey.
The FBI, Department of Health and Human Services Office of Inspector General, and the Texas Attorney General’s Medicaid Fraud Control Unit investigated. Special Assistant U.S. Attorney Douglas Brasher is in charge of the prosecution.
- Dallas Man Charged with Selling Unapproved Drugs Online
Criminal Charges Filed Against Postal Service EmployeeRead the Press Release
JOHNSTOWN, Pa. – United States Attorney David J. Hickton announced today, December 9, 2014, that a criminal Information has been filed in federal court in Johnstown charging a United States Postal Service employee with misappropriation of postal funds.
The one-count Information named Douglas J. Kubenko, 33, of Johnstown, Pa.
According to the Information filed with the court, from Sept. 28, 2012, to Nov. 7, 2013, Kubenko used a United States Postal Service credit card 21 times for purchases totaling $946.15 in gas for his private vehicle.
The law provides for a maximum total sentence of one year in prison, a fine of $100,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The United States Postal Service/Office of Inspector General conducted the investigation leading to the filing of charges in this case.
A criminal Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Columbus Man Sentenced to 13 years in Prison for Conspiring to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that Bryan Groene, 33, of Columbus, Nebraska, was sentenced on December 5, 2014, to 13 years in prison by United States District Judge John M. Gerrard. Groene had previously pled guilty after an incident on January 19, 2014, when a police officer encountered him outside a Columbus residence. The officer knew that Groene had an active warrant for his arrest. Upon contact, Groene was informed of the arrest warrant at which time he ran from the officer. The officer caught Groene after a short chase, but not before Groene discarded a plastic bag containing 6.41 grams of 88% pure methamphetamine. Thereafter, investigators located additional witnesses who identified Groene as a multiple ounce methamphetamine distributor in the Columbus area dating back to September of 2013. After serving his sentence, Groene will be required to serve a Term of Supervised Release of 5 years.
This case was the result of an investigation by the Columbus Police Department and the Nebraska State Patrol.
Cherokee County Men Sentenced in Armed Robbery Crime SpreeRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – Two Jacksonville, Texas men have been sentenced in connection with a violent crime spree targeting area businesses in the Eastern District of Texas announced U.S. Attorney John M. Bales today. The sentences were handed down today by U.S. District Judge Michael Schneider.
Jonathan Roshard Brown, 22, pleaded guilty on May 20, 2014, to interfering with interstate commerce by robbery (Hobbs Act conspiracy) and possessing a firearm during a crime of violence and was sentenced to 180 months in federal prison for the Hobbs Act conviction and 80 months for the firearms conviction.
Michael Dangelio Johnson, 25, pleaded guilty on Feb. 12, 2014 to interfering with interstate commerce by robbery (Hobbs Act conspiracy) and was sentenced to 100 months in federal prison today.
According to information presented in court, Brown, Johnson and two co-defendants conspired to commit robbery, which unlawfully obstructed, delayed and affected commerce in violation of federal law. Specifically, they committed four armed robberies in Jacksonville during a crime spree which began on Oct. 2, 2011 when they stole $9,465 from the Wal-Mart Supercenter in Jacksonville. On Nov. 2, 1012, they robbed the Razorback Grocery on Hwy 69 in Jacksonville. Brown brandished a handgun and demanded money from the owner. Razorback Grocery suffered a loss of approximately $16,000 in cash and $6,900 in Texas lottery tickets. On Nov. 16, 2012, Brown, Johnson and another defendant again robbed the owner of the Razorback Grocery while he was waiting in the commercial drive-thru line at the Austin Bank on West Commerce Street in Jacksonville. During the robbery Brown fired a handgun, striking the victim. The bullet passed through the victim’s hand, throat and shoulder. The victim survived after being airlifted to a Tyler hospital. The defendants obtained an undetermined amount of cash from the victim’s vehicle. The armed robbery resulted in the closure of Razorback Grocery and the temporary closure of Austin Bank. On Nov. 23, 2012, Brown and another person attempted to rob the owner of the Fast Fuel on Hwy 69 in Jacksonville. The owner was able to strike Brown and flee.
This case is being prosecuted as part of the Project Safe Neighborhoods Initiative. Project Safe Neighborhoods is aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state and local law enforcement agencies.
This case is being investigated by the FBI East Texas Gang Initiative and the Jacksonville Police Department with assistance from the Cherokee County District Attorney’s Office. This case is being prosecuted by Assistant U.S. Attorney Richard Moore.California Man Pleads Guilty to Multi-State Bank Fraud SchemeRead the Press Release
Defendant and Co-Conspirators Used Counterfeit Debit Cards
To Defraud a Financial Institution of $30,505.52ALBUQUERQUE – Kevin Cohn, 31, of Rialto, Calif., pleaded guilty this morning to conspiracy to commit bank fraud under a plea agreement with the U.S. Attorney’s Office. Cohn is the third member of the conspiracy to enter a guilty plea in the case.
Cohn’s co-defendants, Denny Smith, 50, of Hesperia, Calif., and Michael Anthony Bjornethun, 40, of Riverside, Calif., were charged with bank fraud offenses in a criminal complaint filed on Jan. 13, 2014. The two subsequently were indicted on Jan. 22, 2014, and charged with conspiracy to commit bank fraud and five counts of bank fraud.
Cohn was added as a defendant to the case in a 12-count superseding indictment filed on March 26, 2014. Count 1 of the indictment charged Smith and Cohn with conspiracy to commit bank fraud and Count 2 charged Smith and Bjornethun with the same offense. Counts 3 through 12 charged the three men with individual bank fraud offenses. According to the superseding indictment and other court filings, Cohn, Smith and Bjornethun perpetuated a scheme in Jan. 2014 to defraud a bank by using counterfeit debit cards to purchase items from U.S. Post Offices in New Mexico, Arizona and Texas.
This morning, Cohn pled guilty to Count 1 of the superseding indictment charging him with conspiracy to commit bank fraud. In entering his guilty plea, Cohn admitted that in Jan. 2014, he traveled with Smith from California to Arizona, New Mexico and Texas, where they visited various post offices and purchased stamps, gift cards and other items with counterfeit debit cards. Cohn admitted that the purpose of the trip was to commit fraud. In his plea agreement, Cohn admitted that he and his co-conspirators perpetuated fraud in the amount of $30,505.52 during the life of their bank fraud scheme.Cohn has been in federal custody since his arrest in Sept. 2014, and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Cohn faces a statutory maximum penalty of 30 years in prison. Cohn, together with his co-defendants, will be required to pay restitution in the amount of $30,505.52 to the U.S. Postal Service as part of his sentence.
Cohn’s co-defendants previously entered guilty pleas and have been sentenced. Smith entered a guilty plea on June 24, 2014, to Counts 1 and 2 of the superseding indictment, and was sentenced on Aug. 25, 2014, to 27 months in federal prison followed by three years of supervised release. Bjornethun plead guilty to the original indictment without the benefit of a plea agreement on March 19, 2014. On June 30, 2014, Bjornethun was sentenced to 172 days of time served followed by two years of supervised release.
This case was investigated by the U.S. Postal Inspection Service and is being prosecuted by Assistants U.S. Attorney Samuel A. Hurtado and C. Paige Messec.
CEO of Real Money Sports, Inc. Charged with Fraud, Racketeering, and ExtortionRead the Press Release
United States Attorney James L. Santelle of the Eastern District of Wisconsin announced today that Fort Lauderdale-area resident Adam H. Meyer (age: 42), the President and Chief Executive Officer of Real Money Sports, Inc., has been indicted on federal fraud, racketeering, extortion, and gun charges by a federal grand jury in Milwaukee, Wisconsin. According to the six-count indictment, which was unsealed earlier today, Real Money Sports is a “tout service” through which Meyer advises customers on which teams to bet on in National Football League, Major League Baseball, National Basketball Association, and National Collegiate Athletic Association games. He allegedly sells those picks for fees that sometimes run into the hundreds of thousands of dollars.
According to the indictment, Meyer promoted Real Money Sports by identifying himself as the “sports consultant to the stars” and by claiming to have an “unheard of win percentage” that was attributable to his employing a team of more than 130 experts, including former professional players and coaches. Meyer referred some of his tout-service customers to people and entities whom he falsely claimed were third-party bookmakers who could accept bets on sporting events. The purported third-party bookmakers were actually people working on behalf of Meyer.
One of Meyer’s tout service customers, identified in the indictment as “Victim A,” began purchasing picks from Meyer in 2007 and later was referred by Meyer to a party whom Meyer falsely claimed was an independent bookmaker. When Victim A eventually reduced his gambling activity, Meyer told him that they both were in danger. More specifically, Meyer falsely told Victim A that a bookie was threatening Meyer’s life over a large gambling debt. Meyer also falsely claimed that the bookie was holding Victim A and Meyer equally responsible for the debt.
According to the indictment, Meyer falsely told Victim A that a person named “Kent Wong” was attempting to collect the debt. “Kent Wong” actually was an alter-ego created by Meyer. Over the course of several years, Meyer—sometimes posing as Wong—repeatedly called Victim A to demand more money. In response to those demands, which often entailed threats that Victim A’s family would be harmed if he did not pay, Victim A transferred millions of dollars into bank accounts as directed by Meyer, who, in turn, used the money for his own personal purposes.
According to the charges in the indictment, in early 2012, after Victim A had refused to provide him with any further funds, Meyer arranged to meet with Victim A. Meyer set the meeting up under the false pretense that he was going to repay Victim A some portion of the millions of dollars in previous transfers.
According to the indictment, on April 16, 2012, Meyer and an associate flew from Florida to Fond du Lac, Wisconsin, for the meeting with Victim A. During the meeting, Meyer’s associate brandished a firearm and demanded that Victim A send Meyer more money to pay off a purported gambling debt. In response to that threat, Victim A agreed to pay Meyer $9.8 million and, over the course of the next week, wired that amount into accounts controlled by Meyer and Meyer’s agents. In total, between January 2009 and February 2013, Meyer and his associates obtained more than $25 million from Victim A.
Based on the conduct described above, the indictment charges three counts of wire fraud (Counts One through Three), one count of extortion (Count Four), one count of interstate travel in aid of a racketeering enterprise (Count Five), and one count of brandishing a firearm during and in relation to a crime of violence (Count Six). The three wire fraud counts, the extortion count, and the interstate travel in aid of racketeering count each carry a maximum penalty of 20 years of imprisonment, and the gun count carries a maximum term of life imprisonment. Each count also carries a maximum fine of $250,000.
In announcing the unsealing of the indictment, United States Attorney Santelle commented: “Conduct of the serious type and broad extent described in the indictment is not only violative of federal law prohibiting racketeering, extortion, and other violent behaviors but also trades on the sound, favorable image and positive public association with national sports entities and sporting events. It has been and remains the commitment of the United States Department of Justice to identify, investigate, and prosecute offense conduct of this sort thoroughly, exactingly, and effectively.” Santelle specifically commended the “outstanding efforts of Assistant United States Attorney James P. Loonam from the Office of United States Attorney for the Eastern District of New York, and the stellar investigative focus and work of the United States Postal Inspection Service, the Broward County Sheriff’s Office, and the New York City Police Department in bringing this defendant’s illegal activities to a close.”
Philip R. Bartlett, the Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service, said, “Mr. Meyer preyed on his victims with threats and intimidation, extorting funds to support a lavish lifestyle. Postal Inspectors and their law enforcement partners put an end to his racketeering reign of terror.”
This case is being prosecuted by First Assistant United States Attorney Gregory J. Haanstad.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Buffalo Man Sentenced on Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Wallace D. Peace, 39, of Buffalo, N.Y., who was convicted of conspiracy to possess with intent to distribute more than 280 grams of crack cocaine, was sentenced to 262 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorneys Mary Clare Kane and George C. Burgasser, who handled the case, stated that between January 2008 and July 29, 2008, the defendant was intercepted over New York State wiretaps, on numerous occasions, discussing cocaine-related transactions. These included conversations between Peace and co-defendant Patrick Perry during which they attempted to arrange to purchase cocaine from multiple sources of supply. Other conversations between the defendant and his customers involved the purchase and sale of crack cocaine.
On July 29, 2008, law enforcement officers executed a search warrant at Peace’s residence and seized digital scales, cell phones, packaging material, 129 grams of crack cocaine, small quantities of cocaine and marijuana, $1,157 in United States currency, and two firearms.
Peace was arrested along with 30 other defendants in July 2008. All 31 defendants now stand convicted.
The sentencing is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Region; Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of James S. Higgins, Acting Special Agent in Charge; and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Arizona Man Sentenced to Federal Prison for Assault Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Antonio Yazzie, 22, an enrolled member of the Navajo Nation who resides in Lukachukai, Ariz., was sentenced this afternoon for his assault with a dangerous weapon conviction. Yazzie will serve 24 months in federal prison followed by three years of supervised release.
Yazzie and his sister Maraintoinette Lynn Yazzie, 26, also of Lukachukai, Ariz., were arrested in April 2014, on a criminal complaint alleging that they attacked a Navajo man at his home in Tohlakai, N.M., on Feb. 26, 2014. The two subsequently were indicted in May 2014, and charged with one count of assault with a dangerous weapon and two counts of robbery. According to court filings, Yazzie and his sister allegedly assaulted the victim by restraining him and striking him repeatedly in the face and head with a rock and a coffee mug. The two then allegedly robbed the victim of cash and his truck.
Yazzie pled guilty on Sept. 9, 2014, to Count 1 charging him with assault with a dangerous weapon. In his plea agreement, Yazzie admitted striking the victim in the head and the face with a rock and a coffee mug with the intent to do bodily harm.Mariantoinette Lynn Yazzie pled guilty on Sept. 17, 2014, to Count 1 of the indictment. She has been in federal custody since her arrest and remains detained pending her sentencing hearing, which is scheduled for Jan. 13, 2015. Mariantoinette Lynn Yazzie faces a statutory maximum sentence of ten years in prison when she is sentenced.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.Anthony, N.M., Man Sentenced to Seven Years for Unlawful Possession of a Firearm and AmmunitionRead the Press Release
ALBUQUERQUE – Javier Orozco, 30, of Anthony, N.M., was sentenced today in federal court in Las Cruces, N.M., to 84 months in prison followed by three years of supervised release for being a felon in possession of a firearm and ammunition. Orozco was sentenced based on a guilty plea entered on Feb. 11, 2014.
Orozco and his brother, Victor Manuel Carreon, 24, also of Anthony, N.M., were arrested on Sept. 5, 2013, on a criminal complaint charging them with being felons in possession of firearms and ammunition. The two were subsequently indicted on these charges on Dec. 11, 2013. The indictment alleges that Carreon and Orozco unlawfully possessed firearms and ammunition in Doña Ana County, N.M., on June 19, 2013. At the time, the brothers were prohibited from possessing firearms or ammunition because they were convicted felons. Carreon previously had been convicted for possession of a controlled substance and aggravated fleeing from a law enforcement officer, and Orozco had been convicted for shooting at a motor vehicle and aggravated assault.According to court filings, on June 19, 2013, Carreon and Orozco were arrested on state charges by Doña Ana County Sheriff’s deputies who were seeking to arrest Carreon on state warrants. The deputies detained Orozco in the vicinity of a truck parked outside a residence in Anthony, and arrested Carreon inside the residence. At the time of his arrest, Carreon was near a trash can that contained a loaded handgun; he admitted ownership of the handgun during a post-arrest interview. The deputies arrested Orozco after they allegedly found a large amount of cash and a plastic bag containing methamphetamine in Orozco’s pockets. During a search of the truck, which allegedly was driven primarily by Orozco, officers allegedly found additional currency and a loaded handgun.
On Jan. 7, 2014, Carreon pled guilty to Count 2 of the indictment charging him with being a felon in possession of a firearm and ammunition. He was sentenced on May 21, 2014, to 46 months in prison followed by three years of supervised release.
This case was investigated by the Las Cruces office of the FBI and the Doña Ana County Sheriff’s Office, with assistance from the 3rd Judicial District Attorney’s Office, and was prosecuted by Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office.Andrew R. Vara Is Appointed Acting U.S. Trustee for Delaware, New Jersey and PennsylvaniaRead the Press Release
WASHINGTON – Andrew R. Vara has been appointed by Attorney General Eric Holder as Acting U.S. Trustee for Delaware, New Jersey and Pennsylvania (Region 3), effective on January 1, 2015, the Executive Office for U.S. Trustees announced today. Mr. Vara replaces Roberta A. DeAngelis, who is retiring after more than 15 years with the U.S. Trustee Program (USTP), including more than eight years as Region 3 U.S. Trustee or Acting U.S. Trustee.
Mr. Vara has served as the Assistant U.S. Trustee in the USTP's Cleveland office since 2008. He also previously has headed the USTP's offices in Wilmington, Del., and Manhattan, as Assistant U.S. Trustee and Acting Assistant U.S. Trustee, respectively. He frequently serves as a faculty member and lecturer at the USTP’s National Bankruptcy Training Institute located in the National Advocacy Center in Columbia, S.C. Mr. Vara serves as co-chair of education for the American Bankruptcy Institute's (ABI) Ethics and Professional Compensation Committee and recently served as a member of the ABI's Ethics Task Force. Before joining the USTP more than 20 years ago, he clerked for Hon. Laurence Howard, Chief Judge of the U.S. Bankruptcy Court in the Western District of Michigan. Mr. Vara received his law degree with honors from Ohio State University Moritz College of Law in Columbus, Ohio, where he was awarded membership in the Order of the Coif, and his undergraduate degree magna cum laude from Duke University in Durham, N.C.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 93 field office locations. Region 3 is headquartered in Philadelphia, with additional offices in Wilmington, Del.; Newark, New Jersey; and Harrisburg and Pittsburgh, Pa.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Amherst Man Convicted Following Jury Trial of Drug OffensesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal jury in Buffalo has convicted Steven A. Knighton, 48, of conspiracy to possess with intent to distribute 500 grams or more of cocaine. The charge carries a mandatory minimum of 10 years in prison, a maximum of life and a $10,000,000 fine.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the prosecution of the case, stated that on March 13, 2009, the defendant was stopped by police in the parking lot of a local mall. New York State police had earlier stopped an individual in possession of seven kilograms of cocaine who then cooperated with the police and made phone contact with the defendant who was to pay for and receive two of the kilograms of cocaine. Inside the Knighton’s vehicle, officers located $41,000 in United States currency. It was determined that the money, which was shrink wrapped and found in the center console of the vehicle, was intended for the purchase of two kilograms of cocaine. Knighton was responsible for distributing more than 100 kilograms of cocaine in the Buffalo and Niagara Falls area between January 2008 and March 2009.
The verdict is the culmination of an investigation on the part of the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major Wayne C. Olson, the Drug Enforcement Administration, under the direction of Special Agent in Charge James S. Higgins, New York Field Division, the Cheektowaga Police Department, under the direction of Chief David Zack, the Amherst Police Department, under the direction of Chief John Askey, and the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto.
Sentencing is scheduled for March 22, 2015, at 2:00 p.m. before Chief U.S. District Judge William M. Skretny, who presided over the trial of the case.
Albuquerque Man Sentenced to Ten Years in Federal Prison for ATM Robbery Spree in Summer 2013Read the Press Release
Dickerson and Co-Defendant Perpetuated in Scheme to Rob Employees
Making ATM Deposits on Behalf of their Business EmployersALBUQUERQUE – Kelvin L. Dickerson, 36, of Albuquerque, N.M., was sentenced this afternoon to 121 months in federal prison followed by five years of supervised release for his conviction for robbing businesses engaged in interstate commerce.
Dickerson and his co-defendant, Dominique Dickens, 29, also of Albuquerque, were arrested in Dec. 2013, on an eight-count indictment charging them with conspiracy and seven Hobbs Act robberies. According to the indictment, between June 2013 and early Sept. 2013, Dickerson and Dickens engaged in a scheme to rob employees of businesses engaged in interstate commerce in Bernalillo County, N.M. Dickens would drive Dickerson to automatic teller machines (ATMs) where Dickerson would rob individuals who were making deposits. Dickens would pick Dickerson up after he committed the robberies and drive him away.On July 2, 2014, Dickerson entered a guilty plea to the indictment and admitted that he and his co-defendant conspired to rob individuals who were making deposits into ATMs between June 28, 2013 and Sept. 5, 2013. Dickerson also admitted robbing seven individuals during that time period. The victims of Dickerson’s criminal conduct were employed by One Main Financial, Loan Max Title Loans, Church’s Chicken, National Insurance, Sonic and Radio Shack, all of which are businesses engaged in interstate commerce.
Dickens pled guilty to a conspiracy charge and three Hobbs Act robbery charges on Aug. 6, 2014. In entering her guilty plea, Dickens admitted conspiring with Dickerson to interfere with interstate commerce by robbing individuals who were making deposits at ATMs on behalf of their business employers. Dickens specifically admitted aiding and abetting Dickerson in robbing the victims by driving him to the vicinity of the ATMs and then driving him away from the crime scenes on three occasions. Dickens faces a maximum statutory penalty of 20 years in prison on each charge to which she pleaded guilty. She remains in custody pending her sentencing hearing, which is scheduled for Dec. 16, 2014.
This case was brought as part of a law enforcement initiative launched in July 2012, by the FBI’s Violent Crimes and Major Offender Squad and the Albuquerque Police Department’s Armed Robbery Unit that targets suspects implicated in commercial armed robberies. This initiative is part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under the worst of the worst anti-violence initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from our communities for as long as possible.This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department and is being prosecuted by Assistant U.S. Attorney Jon K. Stanford.
8 December 2014
Utah County Man Faces January Trial Date on Federal Charges of Possession of 42 Stolen Firearms, Stealing Firearms from a Federal Firearms LicenseeRead the Press Release
SALT LAKE CITY - A Jan. 26, 2015, trial date has been set in U.S. District Court for Shawn Phillip Hansen, age 32, of Pleasant Grove, Utah, who has been charged in an indictment with stealing 42 firearms from a Federal Firearms Licensee (FFL) in Springville. Hansen was an employee of the FFL at the time the alleged thefts took place.
Hansen was charged in a two-count indictment returned in November. The first count of the indictment alleges that beginning on an unknown date and continuing through Sept. 24, 2014, Hansen had 42 stolen firearms in his possession. The second count of the indictment charges him with stealing the firearms from the FFL.
The 42 firearms include a variety of rifles, revolvers, pistols, handguns, and shotguns, including two Taurus International .410 caliber revolvers; two Winchester rifles; six Colt pistols; three U.S.A. Military Surplus .30-06 rifles; and two Browning shotguns. The estimated value of the stolen firearms is around $100,000.
The case came to law enforcement’s attention after the owner of the business determined that a firearm was missing from his inventory. Further investigation identified 42 missing firearms. The case is being investigated by the Springville Police Department and special agents of the ATF.
According to Acting U.S. Attorney Carlie Christensen, the case is being prosecuted federally as a part of the Utah Project Safe Neighborhood (PSN) initiative. PSN, which includes partnerships between local, state and federal police officers and prosecutors, is designed to create safer neighborhoods through a sustained reduction in crime associated with gang and gun violence.
“As the result of hard work by Springville detectives and agents from the Federal Bureau of Alcohol, Tobacco and Firearms, led by Springville Detective Jeff Ellsworth, over 40 weapons have been recovered and removed from the streets of Springville. Removing stolen guns from the streets reduces crime in our community, makes the dealer who had the guns stolen whole, and increases the safety of our citizens. We are pleased the U.S. Attorney’s Office is working with us to keep our communities safe,” Springville Police Chief K. Scott Finlayson said today.
The potential maximum penalty for each count in the indictment is 10 years in prison and a fine of $250,000. Hansen was released with conditions following an initial appearance on the charges.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Two Former Will County Bank Officials Plead Guilty to Concealing Loan Delinquencies of Two CustomersRead the Press Release
CHICAGO — A former officer and a former director of a bank in Will County have pleaded guilty to federal charges for fraudulently creating false reports that made it appear that the bank’s loan portfolio was in better shape than it actually was. The defendants together concealed delinquent loan payments on behalf of two customers whose multiple loans totaled approximately $2.8 million, and together caused the bank to lose more than $1.1 million, according to their guilty pleas that were announced today by federal law enforcement officials.
One defendant, MARTIN E. SCHMIDT, JR., was senior vice president for lending and a member of the board of directors of First Community Bank and Trust, which operates in Beecher and Peotone in Will County. Co-defendant, DONNA M. BARBER, was vice president for mortgage lending. First Community Bank and Trust cooperated with the federal investigation.
Schmidt, 57, of Beecher, pleaded guilty on Nov. 13 to making false bank reports and is free on his own recognizance pending sentencing on Feb. 26, 2015. Barber, 53, of Beecher, pleaded guilty to the same charge last Thursday and is free on her own recognizance pending sentencing on March 17, 2015. Both will be sentenced by U.S. District Judge Charles Kocoras in Federal Court in Chicago. They were charged together in a criminal information that was filed in late October.
Making false bank reports carries a maximum penalty of 30 years in prison and a $1 million fine. Schmidt’s plea agreement anticipates an advisory United States Sentencing Guidelines range of 41 to 51 months in prison. Barber’s plea agreement anticipates an advisory guidelines range of 33 to 41 months in prison, with the government recommending a sentencing of approximately 22 months provided she continues to fully cooperate.
In addition, Schmidt and Barber each face a 10-year prohibition on directly or indirectly participating in the affairs of any federally insured credit union or financial institution.
In pleading guilty, Schmidt and Barber admitted that they caused and made false entries in the bank’s past due accounts report for September 2009 by intentionally omitting to disclose as past due nine of Customer K’s loans and advances in the total principal amount of approximately $367,000, and 39 of Customer M’s loans in the total principal amount of approximately $2.5 million.
According to court documents, Schmidt was the point of contact for Customer K, and Barber was the point of contact for Customer M, and their compensation was based, in part, on the performance of the loans for which they were each responsible. By September 2008, Schmidt and Barber each knew that Customers K and M were unable to make payments to the bank on their various loans. They agreed that they needed to take action to prevent the delinquent accounts from appearing on the bank’s reports and began concealing their past due nature. The false entries extended from September 2008 until October 2009.
Barber, with Schmidt’s knowledge and approval, and Schmidt made and caused false entries in loan records allowing Customer M to skip payments without paying the interest due and extending notes without interest payments being current. Some false entries were made on a retroactive basis so the actual condition of the loans would not appear on the bank’s current monthly records.
Schmidt alone caused an unauthorized, undocumented advance of approximately $105,562 to be disbursed to Customer K to make payments on other delinquent loans. He also approved approximately $269,038 in loans to Customer K at a time when he knew that Customer K was unable to repay these loans. Schmidt also caused Barber to make entries in Customer K’s account records that allowed Schmidt to make unauthorized disbursements to Customer K.
Schmidt deceived the bank’s board of directors by leading them to believe that he and Barber were properly managing the bank’s loans, when they were actually fraudulently creating reports that made it appear that the loan portfolio was in better shape than it was.
Schmidt caused the bank to lose more than $1.18 million resulting from both customers’ delinquent loans, which would not have been extended and would have been called in default at an earlier time, as well as by issuing an authorized $80,000 letter of credit and improperly guaranteeing $22,500 in insufficient funds checks for Customer K. Schmidt and Barber were responsible for causing the bank to lose approximately $708,274 relating to Customer M’s loans, while Schmidt alone was responsible for the bank’s loss of approximately $475,100 resulting from Customer K’s loans.
The government is being represented by Assistant U.S. Attorney Brian Netols.
The guilty pleas were announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Schmidt Plea Agreement
Barber Plea AgreementTwo Former Cay Clubs Executives Plead Guilty in Connection with $300 Million Ponzi Scheme Involving Sales of Vacation Rental UnitsRead 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), Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), and Laura S. Wertheimer, Inspector General, Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), announce that Barry J. Graham, 59, and Ricky Lynn Stokes, 54, both of Ft. Myers, Florida, pled guilty today to conspiracy to commit bank fraud, in violation of Title 18, United States Code, Section 371, before U.S. Magistrate Judge Lurana S. Snow in Key West. The charges stem from the defendants’ participation in a $300 million Ponzi scheme involving the sale of vacation rental units to approximately 1,400 investors in the Florida Keys and elsewhere.
Cay Clubs Resorts and Marinas (Cay Clubs) operated from 2004 through 2008, from offices in the Florida Keys and Clearwater. Cay Clubs marketed vacation rental units for 17 locations in Florida, Las Vegas and the Caribbean, to investors throughout the United States. Cay Clubs would promise to develop dilapidated properties into luxury resorts, and would promise investors an upfront “leaseback” payment of 15 to 20% of the sales price of the unit at the time of closing. Once an investor agreed to purchase a unit, Cay Clubs would arrange for a real estate closing and lender financing, but would not disclose the leaseback payment and other financial inducements to the borrowers on paperwork submitted to lending institutions.
According to court documents, Graham was the Director of Sales for Cay Clubs from 2004 through late 2007. Stokes was, from September 2005 to 2008, one of Cay Clubs’ highest-producing sales agents and was Cay Clubs’ Director of Investor Relations.
During this time, Graham and Stokes conspired with others to fraudulently inflate the prices of Cay Clubs units through insider sales. Graham, Stokes and other insiders purchased units from Cay Clubs without disclosing their affiliation with Cay Clubs. Thereafter, these insider sale prices were used on marketing materials to make it appear to investors that the Cay Clubs units were rapidly increasing in price. Furthermore, as Cay Clubs experienced financial difficulties, Graham, Stokes and others conspired to fraudulently market the Cay Clubs investment to new investors by making false and misleading statements, including by concealing Cay Clubs’ failure to convert dilapidated properties into luxury resorts.
Stokes, Graham, and also others created and distributed marketing materials that contained false and misleading statements in order to induce investors to purchase units. For example, Stokes created a sales script and power point presentation entitled “Retire Rich and Young in Paradise.” The sales script contained numerous false and fraudulent statements and was provided to investors and made available to the investing public on the internet.
Graham received approximately $6.5 million and Stokes received approximately $6.2 million disbursed as real estate commissions or referral fees from Cay Clubs’ affiliated accounts during the fraud.
Previously, Fred Davis Clark, Jr., and Cristal R. Clark, a/k/a Cristal R. Coleman, were charged by Superseding Indictment on September 16, 2014, with conspiracy to commit bank fraud and substantive counts of bank fraud, in connection with the alleged Cay Clubs Ponzi scheme. The defendants were ordered to be detained pretrial, and trial is set for March 16, 2015 before U.S. District Judge Jose E. Martinez in Key West.
Graham and Stokes are scheduled to be sentenced on March 23, 2015, at 1:30 p.m.
Mr. Ferrer commended the investigative efforts of IRS-CI, ICE-HSI and FHFA-OIG, and the assistance of the SEC Miami Regional Office in this matter. The matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy and Thomas A. Watts-FitzGerald.
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.
Two Florida Reptile Dealers Sentenced to Prison for Conspiring and Trafficking in Protected ReptilesRead the Press Release
Two Florida men were sentenced on charges of conspiracy and trafficking in protected timber rattlesnakes and endangered Eastern indigo snakes on Friday, Dec. 5. A federal judge in Philadelphia sentenced Robroy MacInnes, 55, of Inverness, Florida, and Robert Keszey, 48, of Bushnell, Florida, to 18 months and 12 months in prison respectively for their role in trafficking in state and federally protected reptiles. MacInnes and Keszey co-owned a well-known reptile dealership, Glades Herp Farm Inc., based in Florida, and Keszey formerly hosted the Discovery Channel show “Swamp Brothers.” The defendants will also serve three years of supervised release. MacInees was also sentenced to pay a $4,000 fine and Keszy will pay a $2,000 fine.
Between 2006 and 2008, the defendants collected protected snakes from the wild in Pennsylvania and New Jersey, purchased protected eastern timber rattlesnakes that had been illegally collected from the wild in New York, and transported eastern indigo snakes, which are listed under the federal Endangered Species Act, from Florida to Pennsylvania. The evidence at trial showed that the protected rattlesnakes were destined for sale at reptile shows in Europe, where a single timber rattlesnake can sell for up to $800. The eastern indigos were intended for domestic sale where a single snake is worth up to $1,000. In addition to trafficking in illegal animals, the defendants attempted to persuade a witness not to provide the government with information regarding their illegal dealings.
The eastern timber rattlesnake is a species of venomous pit viper native to the eastern United States, and is listed as threatened in New York. It is also illegal to possess an eastern timber rattlesnake without a permit in Pennsylvania. The eastern indigo snake, the longest native North American snake species, is listed as threatened by both Florida and federal law.
Both MacInnes and Keszey were convicted on Nov. 15, 2013 after a jury trial in Philadelphia. The case was investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement, with assistance from the New York Department of Environmental Conservation. The case was prosecuted by Trial Attorney Patrick M. Duggan of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Assistant U.S. Attorney Mary Kay Costello of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
Twenty-eight Alamance County and Two Guilford County Residents IndictedRead the Press Release
GREENSBORO, N.C. – Twenty-seven men and three women have been indicted by a federal grand jury in Greensboro, North Carolina on charges of drug trafficking and illegal weapons possession, announced Ripley Rand, United States Attorney for the Middle District of North Carolina. The defendants reside in Alamance and Guilford Counties.
The fifteen indictments allege violations under Title 21, United States Code, Sections 846, 841(a)(1) and 843(b), and Title 18, United States Code, Sections 922(g)(1) and 924(c)(1)(A)(i), to include: conspiracy to distribute cocaine base and marihuana, the distribution of cocaine hydrochloride, cocaine base and marihuana, the use of communications facilities to facilitate the conspiracy to distribute marihuana, possession of firearms in furtherance of drug trafficking activity and possession of firearms by convicted felons.
Indicted and in custody are:
Dennis Ray Bass, 32
Lashaun Christopher Bolton, 23
Jamar Levelle Bradley, 23
Kelly Denise Bradley, 30
Debra Edmunds Brown, 49
William Earl Brown, Jr., 29
Mandrell Edward Davis, 24
Walter Lewis Ferguson, 40
Joshua Gant, Jr., 31
Jesse Nicholas Gowing, 27
Derek Leon Hinton, 29
Brandon Tremayne Holman, 30
Harry Deangelo Lea, 25
Laquan Gavanete Love, 21
Vondrell Xavier Majette, 26
Danny Lee McCollum, 30
Tyler Corda McGee, 21
Bradley Lee McNeil, 27
Bobby Deshaun Page, 30
Terrance Romeck Page, 33
Michael Brian Poteat, 31
Anthony Mandrell Rogers, 28
Richard Lamar Ruffin, 34
Donte Luther Williamson, 24
Indicted, but not yet in custody are:
Brittney Michelle Brown, 27
Stanley Curtis Gillom, 29
Grayland Duran Graves, 37
Travis Dewayne Jeffries, 27
Thomas Delawrence Leath, 45
Kendrick Eugene Sellars, 26
The cases were investigated by the Alamance County Sheriff’s Office, Burlington Police Department, Graham Police Department, Federal Bureau of Investigation (FBI), and the FBI Safe Streets Task Force, which includes the Eden Police Department, Greensboro Police Department, Guilford County Sheriff’s Office, High Point Police Department, and the Winston-Salem Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, United States Drug Enforcement Administration, and the United States Marshal’s Service.
The charges contained in the indictments are allegations. The defendants are presumed innocent unless and until each is proven guilty beyond a reasonable doubt in a court of law.
Suffolk Woman Sentenced to 65 Months in Prison for Conspiring to Commit Wire Fraud and Identity TheftRead the Press Release
NORFOLK, Va. – Sheila Clark Lewis, 56, of Suffolk, Va., was sentenced today to 65 months in prison, followed by four years of supervised release, and restitution in the amount of $99,875.97 for conspiracy to commit wire fraud and aggravated identity theft.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Service, made the announcement after sentencing by Senior United States District Judge Robert G. Doumar.
Lewis pleaded guilty on September 2, 2014. According to court documents, the defendant and co-conspirator, Shavika Thompson, acquired identity information of approximately 200 medical patients without authorization from Thompson’s employer, a telephone answering and messaging service that catered to doctors and medical service practices. They used the information to use and establish numerous store credit card accounts in victims’ names at Kmart, Sears, and Kohl’s department stores. At various times between November 2012 and September 2013, they made purchases using the victims’ accounts. Surveillance videos for the date, time, and locations of purchases show that the defendants were together at the time of purchase in most instances.
Co-defendant Shavika Thompson pleaded guilty on September 4, 2014 and is currently scheduled to be sentenced on January 12, 2015.
This case was investigated by U.S. Postal Inspection Service. Assistant United States Attorney Randy Stoker prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-88.Tweet
Stanislaus County Defendants Plead Guilty in Scheme to Send Methamphetamine to HawaiiRead the Press Release
FRESNO, Calif. — Miguel Leontapia, 33, and Gilberto Chavez Leon, age 29, both Delhi residents, pleaded guilty Monday to conduct relating to a scheme to send methamphetamine to Hawaii, United States Attorney Benjamin B. Wagner announced. Leontapia pleaded guilty to possession of methamphetamine with the intent to distribute and Leon pled guilty to conspiracy to bulk smuggle cash.
According to court documents, in August 2012, Leontapia and his co-defendants obtained approximately three pounds of methamphetamine that they attempted to ship to Hawaii. Instead, law enforcement seized it. Leon admitted that in August 2012, he and a co‑conspirator traveled from Stanislaus County to Hawaii where they obtained approximately $67,000 cash. Leon and the other person then attempted to take that cash, concealed on their persons and in their luggage, onto a flight to Oakland from Honolulu.
This case is the product of an investigation by the Drug Enforcement Administration, the Stanislaus Drug Enforcement Agency, and the Modesto Police Department. Assistant United States Attorney Kevin Rooney is prosecuting the case.
This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Leontapia and Leon are scheduled to be sentenced by United States District Judge Lawrence J. O'Neill on March 2, 2015. Leontapia faces a maximum statutory penalty of life in prison and a $10 million fine. Leon faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
South Dakota U.S. Attorney's Office Collects over $3.6 Million in Fiscal Year 2014Read the Press Release
United States Attorney Brendan V. Johnson announced that the U.S. Attorney’s Office in South Dakota collected over $3.6 million in Fiscal Year (FY) 2014 from civil and criminal actions. Of this amount, over $2.3 million was collected in criminal actions and over $729,000 was collected in civil actions.
Additionally, the District of South Dakota worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $625,000 in civil actions that were pursued jointly.
“Our collection figures represent an important component of the work done in the U.S. Attorney’s Office,” said Johnson. “In addition to protecting the public through prosecutions, we also collect money to help the victims of these crimes and recoup losses to the American taxpayer.”
Nationally, Attorney General Eric Holder announced that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.
San Jose Man Charged with Violating the Endangered Species ActRead the Press Release
SAN JOSE – Ryan Lopez Bernardez was arraigned today on charges that he violated the Endangered Species Act by transporting two endangered Asian Arowana fish, announced United States Attorney Melinda Haag and United States Fish and Wildlife Service Special Agent in Charge Jill Birchell.
A grand jury returned an indictment against Bernardez on October 15, 2014, but it remained under seal until his arrest and subsequent arraignment today.
According to the indictment, Bernardez, 39, of San Jose, is alleged to have transported in the course of commercial activity, and sold, two fish. The fish are a species known as Asian Arowana, or Asian Bonytongue (scleropoges formosos). These fish are listed as endangered under the Endangered Species Act, and any sales or transportation of them are therefore illegal.
Bernardez was arrested in San Jose on Friday, December 05, 2014, and made his initial appearance in federal court in San Jose on Monday, December 8, 2014. Bernardez is currently out of custody. Bail was set at $100,000. His next scheduled appearance is at 1:30 on December 11, 2014, for a further detention hearing before the Honorable Howard R. Lloyd, United States Magistrate Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of five years, and a fine of $250,000. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Gary G. Fry is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Legal Technician Laurie Worthen. The prosecution is one of several that resulted from an investigation by the United States Fish and Wildlife Service.
Rosebud Woman Charged with Concealing Person from ArrestRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota, woman has been indicted by a federal grand jury for Concealing Person From Arrest.
Samantha Spotted War Bonnet, age 24, was indicted on November 13, 2014. She appeared before U.S. Magistrate Judge Mark A. Moreno on December 4, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 1 year in custody and/or a $100,000 fine, 1 year of supervised release, and $25 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between June 12, 2014, and June 13, 2014, Spotted War Bonnet harbored and concealed a person who had an active warrant for arrest.
The charge is merely an accusation and Spotted War Bonnet is presumed innocent until and unless proven guilty.The investigation is being conducted by the U.S. Marshals Service and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Timothy M. Maher is prosecuting the case.
Spotted War Bonnet was released on bond pending trial. A trial date has not been set.
Rosebud Man Sentenced for Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on December 1, 2014, by U.S. District Judge Roberto A. Lange.
Patrick Black Spotted Horse, age 25, was sentenced to 15 months in custody, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Black Spotted Horse was indicted for Failure to Register as a Sex Offender by a federal grand jury on August 19, 2014. He pled guilty to the Indictment on September 22, 2014.
Black Spotted Horse had a prior sexual assault conviction in federal court in South Dakota and knew that under the Sex Offender Registration and Notification Act, he needed to properly register and update his registration. On July 12, 2014, Black Spotted Horse absconded from his residence in Rapid City and failed to return. He was apprehended on the Rosebud Sioux Indian Reservation on July 31, 2014, and arrested on outstanding tribal warrants. From the time he absconded from his Rapid City residence until he was apprehended on the Rosebud Reservation, Black Spotted Horse knowingly failed to register and update his registration.
This case was investigated by the U.S. Marshals Service, and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Tim Maher prosecuted the case.
Black Spotted Horse was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Ring Leader of Credit Card Ring Arrested After More Than A Year as A FugitiveRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces that Michel Lermos-Hernandez, the alleged ring leader of a massive credit card fraud and identity theft conspiracy, has been arrested after more than a year as a fugitive. He was first charged by complaint on May 23, 2013, and was subsequently indicted on July 29, 2013, for conspiracy, credit card fraud, bank fraud, and aggravated identity theft. If convicted, he faces maximum penalties ranging from 5 to 30 years in federal prison on each conspiracy, fraud, and identity theft count, and a mandatory 2-year consecutive term in prison for each of the three aggravated identity theft counts. Lermos was released on a bond and fled on or about November 10, 2013.
According to court documents, Lermos allegedly led a credit card fraud ring in which conspirators obtained credit card numbers by placing key loggers on credit card terminals that intercepted and stored swiped credit and debit card account information at the International Mall in Tampa, including the Häagen-Dazs ice cream store. Lermos and others then created counterfeit credit cards using the stolen credit and debit card account numbers. Lermos obtained blank credit card stock, embossing machines, and magnetic stripe re-encoders and also sold stolen account numbers to his co-defendant, Viviana Reyes, and others.
After making the counterfeit credit cards, Lermos provided them to his co-conspirators, including his sister, Norma Cabezas-Hernandez, his girlfriend, Danay-Crespo Rodriguez, and at least two other individuals, including Lazaro Rodriguez and Abel Osorio-Cuok, who used the cards to purchase electronics and gift cards at Tampa area retailers. The conspirators then took these items to Reyes, who paid them in cash for the fraudulently obtained merchandise. Reyes then sold the items at a discounted price.
Agents estimate that the actions of the conspirators in this case have impacted more than 1,000 identity theft victims and the loss to date to the affected financial institutions exceeds $650,000.
Lermos’s co-defendants have all been adjudicated guilty and sentenced as follows:
- Viviana Reyes was sentenced to 12 years’ incarceration on May 14, 2014, after a four-day trial during which she was found guilty on all counts of conspiracy, credit card fraud, bank fraud, and identity theft charges.
- Danay Crespo-Rodriguez was sentenced to seven years in prison on July 1, 2014, after pleading guilty to credit card fraud conspiracy and aggravated identity theft charges.
- Norma Cabezas-Hernandez was sentenced to five years’ imprisonment on April 23, 2014, after pleading guilty to credit card fraud conspiracy and aggravated identity theft charges.
- Lazaro Rodriguez was sentenced to three years and one month in prison on January 24, 2014, after pleading guilty to credit card fraud conspiracy and aggravated identity theft charges.
- Abel Osorio-Cuok was sentenced to five years’ probation on February 25, 2014, after pleading guilty to one count of credit card fraud conspiracy.
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Tampa Police Department, the Florida Department of Law Enforcement, and the United States Secret Service (USSS), all of which are members of the USSS’s credit card fraud and identity theft task force. It is being prosecuted by Assistant United States Attorneys Mandy Riedel and Suzanne Nebesky.
Lermos’s apprehension was made possible by the tireless efforts of the U.S. Secret Service, FDLE, TPD, and the U.S. Marshals Service.
Ridgeland Man Pleads Guilty to Bankruptcy FraudRead the Press Release
Jackson, Miss – William Marshall Wolfe, 45, of Ridgeland, pled guilty today in U.S. District Court to the fraudulent transfer of approximately $1.5 million in real property from the bankruptcy estate of Steadivest, LLC, announced U. S. Attorney, Gregory K. Davis, Acting U. S. Trustee Henry G. Hobbs, Jr. of Region 5, FBI Special Agent in Charge Donald Alway, IRS Criminal Investigation Special Agent in Charge Jerome R. McDuffie, and Inspector in Charge Robert B. Wemyss of the U. S. Postal Inspection Service.
William Marshall Wolfe placed Steadivest, LLC, in bankruptcy in the Southern District of Mississippi on March 23, 2009. On the eve of bankruptcy, Wolfe, as owner and managing officer of Steadivest, LLC, fraudulently transferred real property belonging to Steadivest, LLC, or its related entities, to another company, which he managed and solicited investors, in order to keep the properties from the bankruptcy estate, all in violation of Sections 152(7), Title 18, United States Code.
Wolfe will be sentenced on March 3, 2015 at 9:00 a.m. by U.S. District Judge Carlton W. Reeves. He faces a maximum sentence of five years in prison and a $250,000 fine.
The U. S. Trustee referred this matter to the U. S. Attorney for prosecution. The investigation was conducted by the FBI, IRS Criminal Investigation, and the U.S. Postal Inspection Service, with assistance from the U.S. Trustee.
Revere Woman Pleads Guilty to Defrauding Government Benefits ProgramsRead the Press Release
BOSTON – A Revere woman pleaded guilty today to fraudulently receiving over $88,000 in disability payments and rental assistance benefits.
Emily Lardiero, 64, pleaded guilty to theft of public money. In November 2014, Lardiero was charged in a felony information. U.S. District Court Judge Rya W. Zobel scheduled sentencing for March 11, 2015.
In 2003, Lardiero began receiving Supplemental Security Income disability benefits from the Social Security Administration (SSA). Recipients of these benefits are required to inform SSA if they return to work or if they acquire money or property that might make them financially ineligible to continue receiving benefits. Lardiero did not report any work or income to SSA and stated during a benefits review in November 2013 that she was still disabled and had no income aside from her SSA benefits. In reality, however, Lardiero was working at Action Emergency Services, a family business in Revere. She also drew income from the business, which she did not report to SSA. By failing to disclose her work and income to SSA, Lardiero received $47,671 in benefits to which she was not entitled.
Additionally, since 2001, Lardiero was illegally receiving rental assistance benefits from the U.S. Department of Housing and Urban Development (HUD). Under this program, HUD pays a significant portion of the monthly rent to the landlord, and the tenant pays the remainder. To receive this subsidy, tenants are not allowed to have any ownership interest in the housing in which they live. In 2007, Lardiero became the sole trustee of the trust that owned the house she was living in and as such she could control the property as if she were the legal owner. Despite signing annual acknowledgements that she knew she could not have any interest in her housing unit, Lardiero continued to participate in the subsidy program. From 2007 to 2010, an acquaintance of Lardiero’s received the monthly landlord’s payments from HUD, and then forwarded the money to her each month. In this manner, Lardiero illegally received $40,391 in HUD benefits.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office in partnership with the Social Security Administration to investigate and prosecute fraud pertaining to Social Security disability benefits.
In July 2014, Charles Flynn and Steven Grondell of Georgetown were each sentenced to three years of probation, including six months of home confinement, and were ordered to serve 105 hours of community service and to pay $105,158 in restitution to SSA. Flynn received SSA disability benefits while working under Grondell’s identity, and with his permission, to conceal the work from SSA.
Also in July 2014, Carl Lynch of Ware was sentenced to three years of probation, including six months of home confinement, and was ordered to pay $50,264 in restitution to SSA. Lynch received SSA disability benefits while working under another man’s identity to conceal the work from SSA.
In January 2014, Antonio Pulinario Brea of the Dominican Republic was sentenced to 10 months in prison and was ordered to pay $60,455 in restitution to SSA. Pulinario Brea used the identity of an American citizen to obtain SSA disability benefits that he would not have been entitled to receive under his true identity.
The charging statute in the Lardiero case provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement today. The Lardiero case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Rapid City Man Indicted for Assault and BurglaryRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Assault with a Dangerous Weapon and Burglary.
Leroy Wayne Brown Bull Sr., age 24, was indicted on February 19, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on December 1, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 25 years’ imprisonment and/or a $250,000 fine, 3 years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment charges that in November of 2013, Brown Bull and another person broke into a home near Kyle and assaulted a man.
The charges are merely accusations and Brown Bull is presumed innocent until and unless proven guilty.
The investigation was conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Brown Bull was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Plummer Man Pleads Guilty to Strangulation ChargeRead the Press Release
COEUR D’ALENE - James Andrew Samuels, Jr., 27, of Plummer, Idaho, pleaded guilty today in United States District Court to strangulation, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, on November 15, 2013, Samuels got into an argument with a woman he was dating. Samuels admitted that he grabbed the victim by the neck and strangled or attempted to strangler her. The woman was transported to the hospital and later released, having sustained bruises to her face and neck.
The charge is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Samuels is scheduled to be sentenced on March 3, 2015, by U.S. District Judge Edward J. Lodge at the federal courthouse in Coeur d’Alene.
The case was investigated by the Coeur d’Alene Tribal Police Department and the Federal Bureau of Investigation. The case was prosecuted in federal court because the crime occurred on the Coeur d'Alene Indian Reservation and the defendant is an enrolled member of the Coeur d’Alene tribe.
Otismed Corporation and Former CEO Plead Guilty to Distributing FDA-Rejected Cutting Guides for Knee Replacement SurgeriesRead the Press Release
Corporation to Pay More than $80 Million to Resolve Criminal and Civil Investigations
NEWARK, N.J. – OtisMed Corp. and its former chief executive officer admitted today to intentionally distributing knee replacement surgery cutting guides after their application for marketing clearance had been rejected by the Food and Drug Administration (FDA), and the corporation agreed to pay more than $80 million to resolve its related criminal and civil liability, the Justice Department announced today.
OtisMed and its CEO, Charlie Chi, 45, of San Francisco, pleaded guilty in Newark federal court. OtisMed pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging it with distributing, with the intent to defraud and mislead, adulterated medical devices into interstate commerce in violation of the Food, Drug, and Cosmetic Act (FDCA). Judge Cecchi also sentenced the company today, fining OtisMed $34.4 million and ordering $5.16 million in criminal forfeiture. In a separate civil settlement, OtisMed agreed to pay $40 million plus interest to resolve its civil liability. Chi pleaded guilty before U.S. Magistrate Judge Mark Falk to three counts of introducing adulterated medical devices in interstate commerce. Chi will be sentenced by Judge Cecchi on March 18, 2015.
“It is vital that products like the OtisKnee are subjected to the appropriate level of scrutiny,” U.S. Attorney Paul J. Fishman said. “Patients seeking medical care are vulnerable; they are often afraid, and in pain. They should be able to trust their doctors. And they should be entitled to trust that the devices their doctors are using are safe, effective, tested, and approved. OtisMed and Charlie Chi betrayed that trust.”
“Americans must be able to trust that they are treated with medical devices that have been shown to be safe and effective,” Deputy Assistant Attorney General Jonathan Olin for the Justice Department’s Civil Division said “The Department of Justice will not tolerate companies and individuals that cut corners when it comes to the public’s health.”
The civil settlement resolves claims filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. The civil lawsuit was filed in the District of New Jersey and is captioned U.S. ex rel. Adrian v. OtisMed Corp., et al.
OtisMed was a privately held company when OtisMed and Chi committed the criminal conduct, and was later acquired by Stryker Corp., a medical technology company based in Michigan, in November 2009. At the time the shipments were made in September 2009, Stryker executives were not aware that OtisMed and Chi had shipped cutting guides after the FDA had rejected the company’s application for marketing clearance for the device. Stryker, OtisMed’s parent corporation, cooperated with the government with regard to Otismed’s pre-acquisition conduct throughout the investigation. In addition to the criminal pleas and civil resolution, OtisMed also agreed to be excluded from participating in all federal health care programs for a period of 20 years and Stryker separately agreed to a series of compliance measures aimed at preventing future misconduct.
According to documents filed in this case and statements made in court:
Chi was among the founders of OtisMed in August 2005, and conceived of the OtisKnee orthopedic cutting guide, its primary product. Chi acted as OtisMed’s president, chief executive officer and board of directors’ chairman until OtisMed was acquired by Stryker in November 2009. The OtisKnee was used by surgeons during total knee arthroplasty (TKA), commonly known as knee replacement surgery. The surgical procedure requires a surgeon to remove the ends of the leg bones and to reshape the remaining bone to accommodate the implantation of an artificial knee prosthesis. The cuts to the bone must be made at precise angles because they are critical to the clinical result; failure to achieve the correct angle in TKA procedures can result in failure of the bones and/or the implanted prosthetic joint.
OtisMed marketed the OtisKnee cutting guide as a tool to assist surgeons in making accurate bone cuts specific to individual patients’ anatomy based on magnetic resonance imaging (MRI) performed prior to surgery. None of OtisMed’s claims regarding the OtisKnee device were evaluated by the FDA before the company used them in advertisements and promotional material.
Between May 2006 and September 2009, OtisMed sold more than 18,000 OtisKnee devices, generating revenue of approximately $27.1 million.
On Oct. 2, 2008, OtisMed submitted a pre-market notification to the FDA seeking clearance to market the OtisKnee. The company had not previously sought the FDA’s clearance or approval and had been falsely representing to physicians and other potential purchasers that the product was exempt from such pre-market requirements.
On Sept. 2, 2009, the FDA sent OtisMed a notice that its submission had been denied, noting that the company had failed to demonstrate that the OtisKnee was as safe and effective as other legally marketed devices. The letter warned OtisMed that distribution of the OtisKnee prior to approval would be an FDCA violation, and indicated the FDA viewed the product as a “significant risk device system,” which is defined as presenting a potential for serious risk to the health, safety or welfare of a subject. Chi and others at OtisMed received advice from legal and regulatory counsel confirming it would be unlawful for OtisMed to continue distributing the OtisKnee.
Though the board of directors unanimously decided to stop further shipments of the devices, Chi and others at OtisMed were concerned that inconveniencing surgeons planning to use the OtisKnee in scheduled surgeries would exacerbate the negative impact of the FDA letter on the reputation of OtisMed and the device. Chi directed OtisMed employees to organize a mass shipment of all OtisKnee devices that had been manufactured but had not yet been shipped and suggested ways for the employees to hide the shipments from FDA regulators.
At Chi’s direction, OtisMed shipped approximately 218 OtisKnee guides from California to surgeons throughout the United States, including 16 to surgeons in New Jersey. Both Chi and OtisMed admitted that Chi ordered the distribution a week after the FDA denied OtisMed’s request for clearance.
“Companies and individuals put the public health at risk by not complying with FDA regulatory requirements for the pre-market review of medical devices,” said Acting Director Philip J. Walsky for the FDA’s Office of Criminal Investigations. “We will continue to assure consumer confidence in FDA-regulated products by investigating and bringing to justice those who endanger patient safety by distributing unapproved surgical devices.”
“When OtisMed and its CEO, Charlie Chi, distributed medical devices that were not FDA-approved, they violated the trust that patients extend to health care professionals. This outrageous behavior triggered our agency to exclude OtisMed from participating in Medicare and Medicaid for 20 years,” Special Agent in Charge Thomas O’Donnell of the New York Regional Office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) said. “We will continue to work with our law enforcement partners to protect federally funded health care programs and the patients who rely on those programs.”
The civil settlement resolves allegations arising from the marketing and distribution of the OtisKnee without receiving approval or clearance from the FDA for the device. Specifically, the settlement alleged that in May 2006, OtisMed, through co-promotion activities with Stryker Corporation, began commercially distributing the OtisKnee without having received clearance or approval from the FDA for the device. OtisMed continued to distribute the device while its application was pending and even after the FDA informed OtisMed that the product could not be lawfully distributed until FDA approved the device.
The settlement also alleged that OtisMed encouraged health care providers to submit claims for MRIs that were not reimbursable because they were not performed for diagnostic use, but rather solely to provide data for the creation of the OtisKnee. Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims.The company will pay approximately $41.2 million, including interest, to resolve its civil liability for submitting false claims to the Medicare, TRICARE, Federal Employees Health Benefits and Medicaid programs. Of that amount, approximately $41 million will be paid to the federal government. Medicaid is funded jointly by the states and the federal government and participating Medicaid states will receive approximately $376,700 of the settlement amount. As part of today’s resolution, the relator will receive approximately $7 million.
In addition to agreeing to continue to cooperate with the government’s investigation and maintain a compliance program, Stryker agreed to conduct a review and audit regarding whether other marketed devices have the appropriate FDA approvals and share the results of that audit with the government. Stryker also agreed to annual certifications from the president of Stryker’s orthopedics group and from Stryker’s board of directors regarding the effectiveness of the compliance program.
Chi faces a statutory maximum sentence of one year in prison and a $100,000 fine, or twice the gain or loss from the offense, for each of the three counts of introducing adulterated medical devices in interstate commerce.
The guilty pleas and civil settlement are the culmination of a long-term investigation conducted jointly by the FDA’s Office of Criminal Investigations, under the direction of Special Agent in Charge Antoinette V. Henry, and HHS-OIG, under the direction of Special Agent in Charge O’Donnell. Counsel to the HHS-OIG and FDA’s Office of Chief Counsel to the FDA also assisted. The National Association of Medicaid Fraud Control Units, along with the Medicaid Fraud Control Unit of the Massachusetts Attorney General’s Office, assisted in coordinating the settlements with the various states.Additional assistance was provided by the Defense Health Agency and the Office of Personnel Management–Office of the Inspector General.
This resolution illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The government is represented in the criminal case by Jacob T. Elberg, chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit and Trial Attorney Ross S. Goldstein of the Justice Department’s Consumer Protection Branch, and in the civil settlement by Assistant U.S. Attorney Charles Graybow of the District of New Jersey’s Health Care and Government Fraud Unit, and Trial Attorney Charles Biro of the Justice Department’s Civil Division.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office for the District of New Jersey shortly after taking office, including creating the stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $620 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the FDCA and other statutes.
14-428
Defense counsel:
OtisMed: Brien O’Connor Esq.; Joshua Levy Esq., Boston
Charlie Chi: Peter Harvey Esq., New YorkCounsel for Relator Richard Adrian: Joseph Callow Esq., Cincinnati, Ohio; Joel Hesch Esq., Lynchburg, Virginia
OtisMed Documents
OtisMed Corporation and Former CEO Plead Guilty to Distributing FDA-Rejected Cutting Guides for Knee Replacement SurgeriesRead the Press Release
OtisMed Corp. and its former chief executive officer (CEO) admitted today to intentionally distributing knee replacement surgery cutting guides after their application for marketing clearance had been rejected by the Food and Drug Administration (FDA), and the corporation agreed to pay more than $80 million to resolve its related criminal and civil liability, the Justice Department announced today.
OtisMed and its CEO, Charlie Chi, 45, of San Francisco, pleaded guilty in federal court in Newark, New Jersey. OtisMed pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging it with distributing, with the intent to defraud and mislead, adulterated medical devices into interstate commerce in violation of the Food, Drug, and Cosmetic Act (FDCA). Judge Cecchi also sentenced the company today, fining OtisMed $34.4 million and ordering $5.16 million in criminal forfeiture. In a separate civil settlement, OtisMed agreed to pay $40 million plus interest to resolve its civil liability. Chi pleaded guilty before U.S. Magistrate Judge Mark Falk to three counts of introducing adulterated medical devices in interstate commerce. Chi will be sentenced by Judge Cecchi on March 18, 2015.
“Americans must be able to trust that they are treated with medical devices that have been shown to be safe and effective,” said Deputy Assistant Attorney General Jonathan Olin for the Justice Department’s Civil Division. “The Department of Justice will not tolerate companies and individuals that cut corners when it comes to the public’s health.”
“It is vital that products like the OtisKnee are subjected to the appropriate level of scrutiny,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “Patients seeking medical care are vulnerable; they are often afraid, and in pain. They should be able to trust their doctors. And they should be entitled to trust that the devices their doctors are using are safe, effective, tested and approved. OtisMed and Charlie Chi betrayed that trust.”
The civil settlement resolves claims filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. The civil lawsuit was filed in the District of New Jersey and is captioned U.S. ex rel. Adrian v. OtisMed Corp., et al.
OtisMed was a privately held company when OtisMed and Chi committed the criminal conduct, and was later acquired by Stryker Corp., a medical technology company based in Michigan, in November 2009. At the time the shipments were made in September 2009, Stryker executives were not aware that OtisMed and Chi had shipped cutting guides after the FDA had rejected the company’s application for marketing clearance for the device. Stryker, OtisMed’s parent corporation, cooperated with the government with regard to Otismed’s pre-acquisition conduct throughout the investigation. In addition to the criminal pleas and civil resolution, OtisMed also agreed to be excluded from participating in all federal health care programs for a period of 20 years and Stryker separately agreed to a series of compliance measures aimed at preventing future misconduct.
According to documents filed in this case and statements made in court:
Chi was among the founders of OtisMed in August 2005, and conceived of the OtisKnee orthopedic cutting guide, its primary product. Chi acted as OtisMed’s president, CEO and board of directors’ chairman until OtisMed was acquired by Stryker in November 2009. The OtisKnee was used by surgeons during total knee arthroplasty (TKA), commonly known as knee replacement surgery. The surgical procedure requires a surgeon to remove the ends of the leg bones and to reshape the remaining bone to accommodate the implantation of an artificial knee prosthesis. The cuts to the bone must be made at precise angles because they are critical to the clinical result; failure to achieve the correct angle in TKA procedures can result in failure of the bones and/or the implanted prosthetic joint.
OtisMed marketed the OtisKnee cutting guide as a tool to assist surgeons in making accurate bone cuts specific to individual patients’ anatomy based on magnetic resonance imaging (MRI) performed prior to surgery. None of OtisMed’s claims regarding the OtisKnee device were evaluated by the FDA before the company used them in advertisements and promotional material.
Between May 2006 and September 2009, OtisMed sold more than 18,000 OtisKnee devices, generating revenue of approximately $27.1 million.
On Oct. 2, 2008, OtisMed submitted a pre-market notification to the FDA seeking clearance to market the OtisKnee. The company had not previously sought the FDA’s clearance or approval and had been falsely representing to physicians and other potential purchasers that the product was exempt from such pre-market requirements.
On Sept. 2, 2009, the FDA sent OtisMed a notice that its submission had been denied, noting that the company had failed to demonstrate that the OtisKnee was as safe and effective as other legally marketed devices. The letter warned OtisMed that distribution of the OtisKnee prior to approval would be an FDCA violation, and indicated the FDA viewed the product as a “significant risk device system,” which is defined as presenting a potential for serious risk to the health, safety or welfare of a subject. Chi and others at OtisMed received advice from legal and regulatory counsel confirming it would be unlawful for OtisMed to continue distributing the OtisKnee.
Though the board of directors unanimously decided to stop further shipments of the devices, Chi and others at OtisMed were concerned that inconveniencing surgeons planning to use the OtisKnee in scheduled surgeries would exacerbate the negative impact of the FDA letter on the reputation of OtisMed and the device. Chi directed OtisMed employees to organize a mass shipment of all OtisKnee devices that had been manufactured but had not yet been shipped and suggested ways for the employees to hide the shipments from FDA regulators.
At Chi’s direction, OtisMed shipped approximately 218 OtisKnee guides from California to surgeons throughout the United States, including 16 to surgeons in New Jersey. Both Chi and OtisMed admitted that Chi ordered the distribution a week after the FDA denied OtisMed’s request for clearance.
“Companies and individuals put the public health at risk by not complying with FDA regulatory requirements for the pre-market review of medical devices,” said Acting Director Philip J. Walsky for the FDA’s Office of Criminal Investigations. “We will continue to assure consumer confidence in FDA-regulated products by investigating and bringing to justice those who endanger patient safety by distributing unapproved surgical devices.” “When OtisMed and its CEO, Charlie Chi, distributed medical devices that were not FDA-approved, they violated the trust that patients extend to health care professionals,” said Special Agent in Charge Thomas O’Donnell of the New York Regional Office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “This outrageous behavior triggered our agency to exclude OtisMed from participating in Medicare and Medicaid for 20 years. We will continue to work with our law enforcement partners to protect federally funded health care programs and the patients who rely on those programs.”
The civil settlement resolves allegations arising from the marketing and distribution of the OtisKnee without receiving approval or clearance from the FDA for the device. Specifically, the settlement alleged that in May 2006, OtisMed, through co-promotion activities with Stryker Corporation, began commercially distributing the OtisKnee without having received clearance or approval from the FDA for the device. OtisMed continued to distribute the device while its application was pending and even after the FDA informed OtisMed that the product could not be lawfully distributed until FDA approved the device.
The settlement also alleged that OtisMed encouraged health care providers to submit claims for MRIs that were not reimbursable because they were not performed for diagnostic use, but rather solely to provide data for the creation of the OtisKnee. Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims.
The company will pay approximately $41.2 million, including interest, to resolve its civil liability for submitting false claims to the Medicare, TRICARE, Federal Employees Health Benefits and Medicaid programs. Of that amount, approximately $41 million will be paid to the federal government. Medicaid is funded jointly by the states and the federal government and participating Medicaid states will receive approximately $376,700 of the settlement amount. As part of today’s resolution, the relator will receive approximately $7 million.
In addition to agreeing to continue to cooperate with the government’s investigation and maintain a compliance program, Stryker agreed to conduct a review and audit regarding whether other marketed devices have the appropriate FDA approvals and share the results of that audit with the government. Stryker also agreed to annual certifications from the president of Stryker’s orthopedics group and from Stryker’s board of directors regarding the effectiveness of the compliance program.
Chi faces a statutory maximum sentence of one year in prison and a $100,000 fine, or twice the gain or loss from the offense, for each of the three counts of introducing adulterated medical devices in interstate commerce.
The guilty pleas and civil settlement are the culmination of a long-term investigation conducted jointly by the FDA’s Office of Criminal Investigations, under the direction of Special Agent in Charge Antoinette V. Henry, and HHS-OIG, under the direction of Special Agent in Charge O’Donnell. Counsel to the HHS-OIG and FDA’s Office of Chief Counsel to the FDA also assisted. The National Association of Medicaid Fraud Control Units, along with the Medicaid Fraud Control Unit of the Massachusetts Attorney General’s Office, assisted in coordinating the settlements with the various states.
Additional assistance was provided by the Defense Health Agency and the Office of Personnel Management–Office of the Inspector General.
This resolution illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The government is represented in the criminal case by Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit and Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch, and in the civil settlement by Assistant U.S. Attorney Charles Graybow of the District of New Jersey’s Health Care and Government Fraud Unit and Trial Attorney Charles Biro of the Civil Division.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office for the District of New Jersey shortly after taking office, including creating the stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $620 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the FDCA and other statutes.
OtisMed Documents
Okeechobee County Woman Pleads Guilty to Social Security Fraud ChargesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Thomas Caul, Special Agent in Charge, Social Security Administration, Office of Inspector General (SSA-OIG), announce that Brenda Harden, 56, of Okeechobee, Florida, pled guilty today to charges of embezzlement and theft of government monies, in violation of Title 18, United States Code, Section 641.
According to statements made in open court and documents filed in the case, Harden is the daughter of the late Mary Beard, who died on November 20, 2012. Harden had a joint checking bank account with her mother, and she continued to withdraw and spend her mother’s social security widow’s survivor benefits, when they continued to be paid every month following Beard’s death. Until the discovery of the overpayments by the Social Security Administration, which ended all payments in April 2014, Harden had taken and spent for herself a total of $24,499.
Sentencing is scheduled for February 13, 2015, before U.S. District Judge Robin L. Rosenberg in Fort Pierce. At sentencing, Harden faces a possible maximum statutory sentence of up to ten years in prison.
Mr. Ferrer commended the investigative efforts of the SSA-OIG. This case is being prosecuted by Assistant U.S. Attorney Theodore Cooperstein.
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.
Ocean County, N.J., Man Sentenced to One Year in Prison for His Role in Multi-Million Dollar Real Estate Investment SchemeRead the Press Release
TRENTON, N.J. – A Lakewood, New Jersey, man was sentenced today to one year and one day in prison for his part in a real estate investment fraud scheme that defrauded investors of more than $1 million, U.S. Attorney Paul J. Fishman announced.
Alex Schleider, 49, previously pleaded guilty before U.S. District Judge Joel A. Pisano to an information charging him with one count of wire fraud. Judge Pisano imposed the sentence today in Trenton federal court.According to documents filed in this case and statements made in court:
Schleider, Eliyahu Weinstein, 39, of Lakewood, and the other defendants persuaded victims to invest in the purported purchase of an apartment complex, “Belle Glade Gardens,” in Florida. They told the victims that Weinstein had the opportunity to purchase Belle Glade Gardens at a discounted price and immediately flip it at a substantial profit. Schleider and Weinstein further told the victims that Weinstein had already placed $2.5 million in the trust account of a Miami law firm for the transaction; that if the victims contributed another $2.5 million toward the transaction, those funds would remain in escrow at the Miami law firm until the deal closed; and that the victims would be repaid within 60 days. The victims wired $2.83 million to the Miami law firm in order to complete the Belle Glades Gardens transaction. Schleider and Weinstein did not use the money to purchase Belle Glades Gardens. Instead, they redirected the money from the law firm to accounts that they controlled, returned $1.8 million to the victims as a purported return on a prior Facebook investment, and used the remaining money for their own purposes.
In addition to the prison term, Judge Pisano Schleider to serve three years of supervised release and ordered him to pay restitution of $613,200 and forfeiture of $363,200.
Weinstein, 39, also pleaded guilty to charges related to his role in the scheme and is scheduled for sentencing on Dec. 15, 2014. Charges against a third conspirator, Aaron Muschel, 64, of Brooklyn, New York, who was charged in the criminal complaint filed against Weinstein and Schleider in May 2013, remain pending. The charges against him are merely accusations and he is presumed innocent until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Aaron T. Ford in Newark, for the investigation leading to today’s sentencing. He also thanked agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for their role in the investigation.
The government is represented by Counsel to the U.S. Attorney Rachael A. Honig; Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit; Assistant U.S. Attorney Zach Intrater, Deputy Chief of the General Crimes Unit; and Evan S. Weitz of the Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack 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. attorney’s 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.
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Defense counsel: Marc Agnifilo Esq., New YorkNew York Man Sentenced to 33 Months in Prison for Making Threats Against Member of CongressCommunicated Threats by Phone and E-MailRead the Press Release
WASHINGTON – Aniruddha Sherbow, 44, whose last known address was in Poughkeepsie, N.Y., was sentenced today to 33 months in prison for making a series of threats against Congresswoman Tulsi Gabbard, U.S. Representative for the 2nd District of Hawaii.
The sentencing was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, Kim C. Dine, Chief of the United States Capitol Police, and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office.
Sherbow entered a plea of nolo contendere on Feb. 21, 2014, in the U.S. District Court for the District of Columbia, to two counts of transmission of threats in interstate commerce. Under a nolo contendere plea, a defendant is convicted of the offense, accepts responsibility, and agrees that the government could prove him guilty beyond a reasonable doubt. However, the defendant in such a plea does not admit to the facts of the case.
The Honorable Reggie B. Walton accepted the plea and sentenced Sherbow today. Following his prison term, Sherbow will be placed on three years of supervised release. During that time, Sherbow is barred from any direct or indirect contact with Congresswoman Gabbard. Judge Walton also ordered Sherbow to pay $538,282 in restitution to the United States government, as reimbursement for security expenses incurred as a result of his threats. Finally, the judge ordered Sherbow to get a mental health evaluation and treatment, if necessary.
Sherbow was arrested on Aug. 28, 2013, in Tijuana, Mexico, by Policia Estatal Preventiva, Baja California State Police Fugitive Unit, pursuant to a federal arrest warrant issued in the U.S. District Court for the District of Columbia. He has been in custody ever since. In addition to New York, Sherbow has lived in California, Mexico, and Hawaii.
According to the government’s evidence, Sherbow had been harassing Congresswoman Gabbard since approximately February 2011, including making threats via email and telephone. The charges relate to two such threats, made in August of 2013.
On Aug. 1, 2013, Sherbow left a voicemail message on Congresswoman Gabbard’s phone in which he threatened to kill her. Congresswoman Gabbard was in Washington, D.C., when she received the threatening message. On Aug. 3, 2013, Sherbow, identifying himself by name, sent an e-mail to Congresswoman Gabbard and others, including the FBI. The subject and body of this e-mail also contained threats directed at Congresswoman Gabbard.
In announcing the sentence, U.S. Attorney Machen, Chief Dine, and Assistant Director in Charge McCabe commended the work of those who investigated the case from the U.S. Capitol Police and the FBI. They also expressed appreciation for the work of the Policia Estatal Preventiva, Baja California State Police Fugitive Unit; U.S. Customs and Border Protection, San Ysidro, and the San Diego and Honolulu Divisions of the FBI for their crucial work and joint collaboration in apprehending the defendant. Finally, they acknowledged the efforts of Assistant U.S. Attorneys Michael C. DiLorenzo and Christopher Kavanaugh, who investigated and prosecuted the case.
14-271New Orleans Woman Charged with Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that LAVERNE ROSE, age 68, of New Orleans, was charged today with theft of government funds.
According to the bill of information, from 1990 to 2014, ROSE stole approximately $282,400 from the United States Social Security Administration. If convicted, ROSE faces up to ten years’ incarceration and a fine of up to twice the theft amount.
U.S. Attorney Polite reiterated that a bill of information 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 United States Social Security Administration in investigating this matter. Assistant U.S. Attorney Chandra Menon is in charge of this prosecution.
Navajo Man Pleads Guilty to Federal Sexual Abuse ChargeRead the Press Release
Defendant Prosecuted as Part of Federal Initiative to Address the Epidemic Incidence of Violence Against Native Women
ALBUQUERQUE – Lorin Nelson Dee, 74, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., entered a guilty plea today to a federal abusive sexual contact charge.
Dee was arrested in April 2014, on a criminal complaint charging him with aggravated sexual abuse and abusive sexual contact. Dee subsequently was indicted on those two charges. According to court filings, Dee forced a Navajo woman to engage in a sexual act on April 23, 2014. The offense occurred within the Navajo Indian Reservation in San Juan County, N.M.
This morning, Dee pled guilty to Count 2 of the indictment, charging him with abusive sexual contact. In his plea agreement, Dee admitted intentionally touching and rubbing the victim’s breast by use of force on April 23, 2014.
Dee has been in federal custody since his arrest and remains detained pending sentencing, which has yet to be scheduled. At sentencing, Dee faces a statutory maximum penalty of ten years in prison.
This case was investigated by the Shiprock office of the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorney Kyle T. Nayback.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Miami-Area Certified Nursing Assistant Sentenced to 150 Months in Prison for Role in $200 Million Medicare Fraud SchemeRead the Press Release
A Miami licensed nursing assistant was sentenced today to serve 150 months in prison for participating in a $200 million Medicare fraud scheme involving fraudulent billings by American Therapeutic Corporation (ATC), a mental health company headquartered in Miami.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement.
Rodolfo Santaya, 55, of Miami, was convicted on July 18, 2014, after a six-day jury trial, of conspiracy to commit health care fraud and wire fraud, conspiracy to pay and receive bribes and kickbacks, and two counts of receipt of bribes and kickbacks in connection with a federal health care benefit program. In addition to the prison sentence, U.S. District Judge Jose E. Martinez of the Southern District of Florida ordered Santaya to pay more than $18.2 million in restitution.
Evidence at trial demonstrated that, between 2006 and 2010, Santaya was paid thousands of dollars a month in cash kickbacks in exchange for referring Medicare beneficiaries to ATC, which operated purported partial hospitalization programs (PHPs) in seven locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness.
Evidence at trial also demonstrated that the Medicare beneficiaries Santaya sent to ATC did not need, qualify for, nor receive PHP treatment. Nevertheless, ATC submitted false and fraudulent bills to Medicare for services purportedly provided to each of Santaya’s patients. In order to justify ATC’s fraudulent billings, medical professionals, including doctors, fabricated and signed fraudulent medical documentation and patient files.
ATC, an associated management company, and more than 20 individuals, including ATC’s owners, have all previously pleaded guilty or been convicted at trial. Santaya has been in federal custody since his conviction.
The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Assistant Chief Robert A. Zink and Trial Attorneys Nicholas E. Surmacz and Kelly Graves of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Miami-Area Certified Nursing Assistant Sentenced to 150 Months in Prison for Role in $200 Million Medicare Fraud SchemeRead the Press Release
A Miami licensed nursing assistant was sentenced today to serve 150 months in prison for participating in a $200 million Medicare fraud scheme involving fraudulent billings by American Therapeutic Corporation (ATC), a mental health company headquartered in Miami.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement.
Rodolfo Santaya, 55, of Miami, was convicted on July 18, 2014, after a six-day jury trial, of conspiracy to commit health care fraud and wire fraud, conspiracy to pay and receive bribes and kickbacks, and two counts of receipt of bribes and kickbacks in connection with a federal health care benefit program. In addition to the prison sentence, U.S. District Judge Jose E. Martinez of the Southern District of Florida ordered Santaya to pay more than $18.2 million in restitution.
Evidence at trial demonstrated that, between 2006 and 2010, Santaya was paid thousands of dollars a month in cash kickbacks in exchange for referring Medicare beneficiaries to ATC, which operated purported partial hospitalization programs (PHPs) in seven locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness.
Evidence at trial also demonstrated that the Medicare beneficiaries Santaya sent to ATC did not need, qualify for, nor receive PHP treatment. Nevertheless, ATC submitted false and fraudulent bills to Medicare for services purportedly provided to each of Santaya’s patients. In order to justify ATC’s fraudulent billings, medical professionals, including doctors, fabricated and signed fraudulent medical documentation and patient files.
ATC, an associated management company, and more than 20 individuals, including ATC’s owners, have all previously pleaded guilty or been convicted at trial. Santaya has been in federal custody since his conviction.
The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Assistant Chief Robert A. Zink and Trial Attorneys Nicholas E. Surmacz and Kelly Graves of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
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.