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4 December 2014
Four Men Indicted on Charges in 2011 Kidnapping of Mother and Teenage Son in the PhilippinesRead the Press Release
Four Philippine nationals were indicted today on conspiracy, hostage-taking, and weapons charges stemming from the kidnapping in the Philippines of a mother and her then 14-year-old son in July of 2011. The indictment alleges that the group held the mother for approximately 82 days and the son for approximately 151 days, and forced the family to pay ransom for their return. The victims, both U.S. nationals, were in the Philippines on a family trip.
The indictment, returned by a grand jury in the U.S. District Court for the District of Columbia, was announced by John P. Carlin, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Stephanie Yonekura, Acting U.S. Attorney for the Central District of California, and Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
The four men are identified as John Does, but are also known as Furuji Indama, Radzmil Jannatul, Muadz, and Abu Basim. Each is charged with one count of conspiracy to commit hostage-taking, two counts of hostage-taking, one count of conspiracy to use, carry, brandish and discharge a firearm during a crime of violence and one count of using, carrying, brandishing and discharging a firearm during a crime of violence and aiding and abetting and causing an act to be done. None of the defendants is in custody.
If extradited to the United States and convicted of these charges, each defendant would face a maximum term of life in prison.
“The four men indicted are alleged to have been involved in the hostage-taking of two U.S. citizens vacationing in the Philippines more than three years ago,” said Assistant Attorney General Carlin. “Hostage-takers who target our citizens with captivity and violence anywhere in the world should know that we will pursue them and seek to bring them to justice, however long it takes.”
“While on a family vacation overseas, a Virginia mother and her teenage son were captured, forced into boats at gunpoint, and taken to an island where they were held hostage for ransom,” said U.S. Attorney Machen. “This indictment charges four Philippine men for their alleged roles in taking these Americans hostage and holding them captive for months in terrifying conditions. We remain focused on apprehending and extraditing these men so that they can face these charges in a courtroom in our nation’s capital.”
“The victim family in this case experienced great suffering when a mother and son were violently kidnapped and held by the defendants overseas, while family members in the United States endured for months without knowing the fate of their loved ones,” said Assistant Director Lewis, of the FBI’s Los Angeles Field Office. “It should be noted that, following the mother’s release, her son was held for months before valiantly escaping his captors. The charges in this case are the result of a joint investigation by the FBI and law enforcement partners in the Philippines, one of many countries with whom we work to identify those responsible for victimizing American citizens abroad and build cases for potential prosecution.”
According to the indictment, the defendants and co-conspirators kidnapped the two United States nationals on or about July 12, 2011. The woman, then age 43, and her then 14-year-old son were taken hostage from a beach cottage on Tictabon Island, several miles from the mainland of Zamboanga City in the southern Philippines.
Both hostages were forced into boats at gunpoint, brought to another island, Basilan Island, and forced to march to a camp where they were held until September 2011. The two were then forced to march to another camp, also on Basilan Island.
The indictment alleges that the defendants and their co-conspirators threatened to kill the hostages, and that they used firearms, including handguns, semiautomatic assault weapons, and destructive devices to keep and detain them. The indictment also alleges that the group demanded ransom from a family member of the hostages and did, in fact, cause a family member to make bank transfers as ransom payments.
The group released the mother on or about Oct. 2, 2011, but retained her teenage son as a hostage, and demanded that she pay a large ransom for his release. The son eventually escaped from his captivity on or about Dec. 9, 2011.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws. Every defendant is presumed innocent until and unless found guilty.
The charges were the result of an investigation led by the FBI’s Los Angeles Field Office. The case is being prosecuted by Assistant U.S. Attorneys Courtney Spivey Urschel and Thomas A. Gillice of the U.S. Attorney’s Office for the District of Columbia, Assistant U.S. Attorney Christopher Grigg of the U.S. Attorney’s Office for the Central District of California, and Trial Attorney T. J. Reardon III of the Counterterrorism Section of the National Security Division of the Department of Justice. Former Assistant U.S. Attorney Anthony Asuncion and Assistant U.S. Attorney George P. Varghese, now with the U. S. Attorney’s Office for the District of Massachusetts, investigated the case prior to indictment.
Four Men Indicted on Charges in 2011 Kidnapping of Mother and Teenage Son in the PhilippinesTwo U.S. Nationals Were Taken Hostage While on Family VacationRead the Press Release
WASHINGTON – Four Philippine nationals were indicted today on conspiracy, hostage-taking, and weapons charges stemming from the kidnapping in the Philippines of a mother and her then 14-year-old son in July of 2011. The indictment alleges that the group held the mother for approximately 82 days and the son for approximately 151 days, and forced the family to pay ransom for their return. The victims, both U.S. nationals, were in the Philippines on a family trip.
The indictment, returned by a grand jury in the U.S. District Court for the District of Columbia, was announced by John P. Carlin, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Stephanie Yonekura, Acting U.S. Attorney for the Central District of California, and Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
The four men are identified as John Does, but are also known as Furuji Indama, Radzmil Jannatul, Muadz, and Abu Basim. Each is charged with one count of conspiracy to commit hostage-taking, two counts of hostage-taking, one count of conspiracy to use, carry, brandish and discharge a firearm during a crime of violence, and one count of using, carrying, brandishing and discharging a firearm during a crime of violence and aiding and abetting and causing an act to be done. None of the defendants is in custody.
If extradited to the United States and convicted of these charges, each defendant would face a maximum term of life in prison.
“While on a family vacation overseas, a Virginia mother and her teenage son were captured, forced into boats at gunpoint, and taken to an island where they were held hostage for ransom,” said U.S. Attorney Machen. “This indictment charges four Philippine men for their alleged roles in taking these Americans hostage and holding them captive for months in terrifying conditions. We remain focused on apprehending and extraditing these men so that they can face these charges in a courtroom in our nation’s capital.”
“The four men indicted are alleged to have been involved in the hostage-taking of two U.S. citizens vacationing in the Philippines more than three years ago,” said Assistant Attorney General Carlin. “Hostage-takers who target our citizens with captivity and violence anywhere in the world should know that we will pursue them and seek to bring them to justice, however long it takes.”
“The victim family in this case experienced great suffering when a mother and son were violently kidnapped and held by the defendants overseas, while family members in the United States endured for months without knowing the fate of their loved ones,” said Assistant Director Lewis, of the FBI’s Los Angeles Field Office. “It should be noted that, following the mother’s release, her son was held for months before valiantly escaping his captors. The charges in this case are the result of a joint investigation by the FBI and law enforcement partners in the Philippines, one of many countries with whom we work to identify those responsible for victimizing American citizens abroad and build cases for potential prosecution.”
According to the indictment, the defendants and co-conspirators kidnapped the two United States nationals on or about July 12, 2011. The woman, then age 43, and her then 14-year-old son were taken hostage from a beach cottage on Tictabon Island, several miles from the mainland of Zamboanga City in the southern Philippines.
Both hostages were forced into boats at gunpoint, brought to another island, Basilan Island, and forced to march to a camp where they were held until September 2011. The two were then forced to march to another camp, also on Basilan Island.
The indictment alleges that the defendants and their co-conspirators threatened to kill the hostages, and that they used firearms, including handguns, semiautomatic assault weapons, and destructive devices to keep and detain them. The indictment also alleges that the group demanded ransom from a family member of the hostages and did, in fact, cause a family member to make bank transfers as ransom payments.
The group released the mother on or about Oct. 2, 2011, but retained her teenage son as a hostage, and demanded that she pay a large ransom for his release. The son eventually escaped from his captivity on or about Dec. 9, 2011.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws. Every defendant is presumed innocent until and unless found guilty.
The charges were the result of an investigation led by the FBI’s Los Angeles Field Office. The case is being prosecuted by Assistant U.S. Attorneys Courtney Spivey Urschel and Thomas A. Gillice of the U.S. Attorney’s Office for the District of Columbia, Assistant U.S. Attorney Christopher Grigg of the U.S. Attorney’s Office for the Central District of California, and Trial Attorney T. J. Reardon III of the Counterterrorism Section of the National Security Division of the Department of Justice. Former Assistant U.S. Attorney Anthony Asuncion and Assistant U.S. Attorney George P. Varghese, now with the U. S. Attorney’s Office for the District of Massachusetts, investigated the case prior to indictment.
14-269Former Putnam County Sheriff’s Deputy Sentenced for Civil Rights ViolationsRead the Press Release
Deputy used excessive force on two occasions while on duty
TERRE HAUTE - Acting United States Attorney Josh J. Minkler announced this afternoon the sentencing of Terry Joe Smith, a/k/a T.J., age 38, of Greencastle, Indiana. Smith who served as a deputy with the Putnam County Sheriff’s Department was sentenced to 14 months by U. S. District Judge William T. Lawrence. Smith was found guilty after a jury trial in September of this year on two counts of deprivation of civil rights under color of law.
“The public has a right to expect better from their law enforcement officers,” said Minkler. “It is certainly a tragedy when a law enforcement officer with a family choses to violate the civil rights of our citizens, but it would be a far greater tragedy if T.J. Smith was not held fully accountable for his unlawful use of force in this case.”
Testimony at trial indicated that Smith used excessive force against citizens on two occasions in his capacity as a Putnam County Sheriff’s Deputy. These incidents occurred on West Stardust Road and at the Lazy Acres trailer park in Greencastle.
On one occasion Smith punched a victim in the face after other officers had secured the victim resulting in serious bodily injury. The second offense occurred at the Lazy Acres Trailer Park in Greencastle when Smith threw a handcuffed person to the ground and drove his knee into that person’s back while lying on the ground.
Law enforcement officials are subject to criminal prosecution whenever evidence exists that they knowingly abuse their authority and deprive individuals of their constitutional rights. Such acts of misconduct, known as acts committed under “color of law,” include allegations of excessive force.
"The FBI will vigorously pursue law enforcement officers who violate their sacred duty to protect and serve,” said Special Agent in Charge W. Jay Abbott. “The vast majority of law enforcement officers serve bravely and with great integrity in the performance of their duties."
Minkler praised the outstanding law enforcement work by the Federal Bureau of Investigation. The FBI is a leading partner in the U.S. Attorney's Public Integrity Working Group, which was launched in April 2012 with the stated purpose of aggressively investigating allegations of public fraud, waste and abuse by public officials in Indiana.
According to Assistant United States Attorneys Bradley A. Blackington and MaryAnn T. Mindrum, who prosecuted the case for the government, Smith will serve two years of supervised release after his sentence.
Former New Orleans Tax Return Preparer, Indicted for Theft of Public Money, Wire Fraud, Aggravated Identity TheftRead the Press Release
DONALD STEWART, age 58, a former tax return preparer and resident of New Orleans, was indicted today for six counts of theft of public funds, two counts of wire fraud, and six counts of aggravated identity theft, announced United States Attorney Kenneth Allen Polite, Jr. and Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department’s Tax Division. According to the indictment, STEWART acted as a return preparer from approximately 2001 through 2008, before the IRS suspended his Electronic Filing Information Number.
As charged in the indictment, from January 2011 through February 2012, STEWART caused federal tax refunds in the names of others to be electronically deposited into bank accounts under his control. These deposits totaled approximately $37,809. STEWART is charged with two counts of wire fraud related to his filing of two specific false income tax returns in early 2011. The indictment further alleges that STEWART cashed or deposited U.S. Treasury checks, which represented federal income tax refunds, at a bank in the New Orleans area. These U.S. Treasury checks totaled approximately $539,393. Finally, STEWART is charged with aggravated identity theft for using the means of identification of others during and in relation with wire fraud and theft of public money.
STEWART faces a maximum term of twenty years imprisonment for each wire fraud charge, ten years imprisonment for each theft of public money count, and a mandatory term of two years imprisonment for each charge of aggravated identity theft. As to each count, he also faces a fine of $250,000, or twice the gross gain or loss caused by the offense, and terms of supervised release.
U. S. Attorney Polite and Acting Deputy Assistant Attorney General Wszalek reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by IRS-Criminal Investigation. It is being prosecuted by Tax Division Trial Attorneys Hayden Brockett and Lauren Castaldi and Assistant United States Attorney Carter K. D. Guice, Jr.
Former Bechtel Executive Pleads Guilty in Connection with a $5.2 Million Kickback SchemeRead the Press Release
The former Principal Vice President of Bechtel Corporation and General Manager of the Power Generation Engineering and Services Company (PGESCo) pleaded guilty today in connection with a $5.2 million kickback scheme intended to manipulate the competitive bidding process for state-run power contracts in Egypt.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland, Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Division and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington D.C. Field Office made the announcement.
“Asem Elgawhary took more than $5 million in kickbacks from companies trying to manipulate a competitive bidding process in their favor,” said Assistant Attorney General Caldwell. “Foreign corruption is an international scourge, and we will pursue those who take bribes, whether they are government officials or high-ranking corporate executives, like Elgawhary. Every corruption conviction is a step towards rooting out and deterring this global problem.”
“Our economy is so global in this day and age that if we allowed corrupt practices overseas such as taking bribes in exchange for special consideration when comparing bids, it would seriously impact our international trade. What Mr. Elgawhary admitted to doing has a dramatic affect on U.S. companies being able to expand and grow their work forces overseas in a fair market place, which in the long run hurts our economy,” said Special Agent in Charge Vogt of the FBI in Maryland and Delaware. “He displayed his blatant disregard for our rule of law when he used a portion of the bribe payment to purchase a house for $1.6 million in cash. This should send a message to others like Mr. Elgawhary, that hiding behind a foreign government won’t protect you from prosecution.”
“Mr. Elgawhary allowed greed to compromise his business practices by taking kickbacks to provide unfair advantages to companies willing pay for power contracts,” stated Special Agent in Charge Kelly of IRS-CI’s Washington D.C. Field Office. “He compounded his criminal activities by failing to report any of the kickback payments as income on his tax returns. It is imperative that honest companies know IRS Criminal Investigation will investigate and bring to prosecution those willing to line their pockets through unethical business practices.”
Asem Elgawhary, 73, of Potomac, Maryland, pleaded guilty today before U.S. District Judge Deborah K. Chasanow of the District of Maryland to mail fraud, conspiracy to commit money laundering, and obstruction and interference with the administration of the tax laws. Sentencing is scheduled for Mar. 23, 2015.
In his plea agreement, Elgawhary admitted that, from 1996 to 2011, he was assigned by Bechtel – a U.S. corporation engaged in engineering, construction and project management – to be the general manager at PGESCo, a joint venture between Bechtel and Egypt’s state-owned and state-controlled electricity company (EEHC). PGESCo assisted EEHC in identifying possible subcontractors, soliciting bids and awarding contracts to perform power projects for EEHC. Elgawhary admitted to accepting a total of $5.2 million from three power companies, which they paid to secure a competitive and unfair advantage in the bidding process. According to court documents, the power companies and their consultants paid more than $5.2 million in kickback payments into various off-shore bank accounts under the control of Elgawhary, including various Swiss bank accounts.
As Elgawhary admitted in his plea agreement, he attempted to conceal the kickback scheme by routing the payments through various off-shore bank accounts, including Swiss bank accounts, under his control. Elgawhary also sent various documents and “Representation Letters” to Bechtel executives and members of the PGESCo Board of Directors in Maryland, falsely certifying that he had no knowledge of any fraud or suspected fraud at PGESCo, and that there were no violations or possible violations of law or regulations that should have been considered for disclosure in PGESCo’s financial statements. Elgawhary also admitted that, in further attempt to conceal the scheme, he made misrepresentations to counsel for Bechtel when he was interviewed in April 2011.
Elgawhary also admitted to conspiring to launder the proceeds of the scheme and to obstructing and impeding the administration of U.S. tax laws by falsely claiming that he maintained only one foreign bank account, denying that he received any income from a foreign bank account, and failing to report any of the kickback payments as income for the tax years 2008 through 2011.
Elgawhary, a dual U.S. and Egyptian citizen, was arrested on a complaint when he flew into the United States on Nov. 26, 2013, and was indicted on Feb. 10, 2014.
The case is being investigated by the FBI’s Baltimore Division and IRS-CI’s Washington D.C. Field Office. Significant assistance was provided by the Criminal Division’s Office of International Affairs, and law enforcement counterparts in Switzerland, Germany, Italy, Saudi Arabia and Cyprus. The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David I. Salem of the District of Maryland.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Ex-Employee at Federal Prison in San Pedro Pleads Guilty to Accepting Bribe to Smuggle Mobile Phone into FacilityRead the Press Release
LOS ANGELES – A Lake Elsinore man who was employed as a correctional officer at the Federal Correctional Institution, Terminal Island has pleaded guilty to a federal bribery charge for taking $1,000 in cash to smuggle a cell phone into the prison facility.
Luis Borjon, 52, pleaded guilty on Tuesday to the felony charge and admitted that he took the payment while employed as a correctional officer by the United States Bureau of Prisons.
Borjon pleaded guilty before United States District Judge R. Gary Klausner, who is scheduled to sentence the defendant on February 23, 2015. At sentencing, Borjon will face a statutory maximum sentence of 15 years in federal prison.
According to court documents, Borjon approached an inmate under his supervision at the Terminal Island prison in November 2012 and solicited a “loan.” The inmate put Borjon in contact with the inmate’s brother, who was not in custody, and Borjon called the inmate’s brother to provide him with the number for Borjon’s “burner cell phone” (a disposable phone).
The inmate’s brother met Borjon in January 2013 at a gas station in Lake Elsinore, where Borjon accepted approximately $1,000 in cash and a cell phone to smuggle into the prison. Borjon subsequently smuggled the cell phone into the Terminal Island facility and delivered it to the inmate. Soon after, other correctional officers found and seized the smuggled cell phone.
After being indicted by a federal grand jury in June, Borjon was arrested on September 16. He was subsequently freed on bond.
The Borjon investigation was conducted by the United States Department of Justice Office of the Inspector General and the Federal Bureau of Investigation. The Drug Enforcement Administration provided assistance during the investigation.
Release No. 14-157
El Paso Business and Businessowner Charged in Connection with an Alleged Fraud and Trade Based Money Laundering Scheme Associated with Black Market Peso ExchangeRead the Press Release
In El Paso, federal and state authorities have arrested the owner and two employees of ERENE, Inc., (ERENE) for their alleged roles in an estimated $100 million trade based money laundering scheme announced U.S. Attorney Robert Pitman and Homeland Security Investigations (HSI) Acting Special Agent in Charge Tom Hernandez, El Paso Division.
ERENE, doing business as “J&E Sports,” “Rise High Skateshop,” Quicken,” “Quicken Footwear & Accessories,” “Pepes Casual,” “Arise 915,” and “Forward Footwear,” is an El Paso-based business which primarily sells shoes and other goods to U.S. and Mexican-based customers.
A 61–count federal grand jury indictment unsealed today in El Paso, charges ERENE, 52–year-old owner Jose Luis Rodriguez, 40–year-old ERENE Assistant Manager Jorge Penuelas, and 53-year-old ERENE employee Manuel Rodriguez with multiple money laundering conspiracy charges. Other charges alleged in the indictment include smuggling goods from the United States; engaging in monetary transactions in property derived from specified unlawful activity; conspiracy to commit mail and wire fraud; mail fraud; and, wire fraud.
The indictment alleges that since May 2007, Rodriguez on behalf of ERENE, made false and material representations to shoe suppliers that ERENE would only sell their product on a retail bases i.e. to end use consumers. On the basis of this representation, suppliers provided ERENE with millions of dollars in product which was primarily sold on a wholesale basis to Mexican and U.S. based purchasers. Once these goods were obtained, the indictment alleges, ERENE and the Mexican based wholesale purchasers used smugglers or “pasadors” to unlawfully smuggle shoes into Mexico from the United States. Through this method, ERENE and the Mexican based wholesale purchasers avoided tariffs, duties, and fees imposed by the Mexican government on the import of shoes into Mexico. Further, although the goods smuggled into Mexico are sold for pesos, the Mexican based wholesale purchasers paid for a significant majority of those goods with U.S. cash dollars.
The aforementioned schemes generated significant proceeds which the indictment alleges were laundered by the defendants through various means such as the purchase of U.S. Postal money orders.
Trade based money laundering (TBML) is the exploitation of the international trade system, including its financial system, to launder illicit proceeds. A subset of TBML is the Black Market Peso Exchange (BMPE). According to the indictment, criminal organizations are using the BMPE to convert the proceeds of their illegal activities from U.S. dollars to Mexican pesos in order to avoid the risk of smuggling bulk amounts of U.S. Currency across the border; risk detection by having to wire transfer the proceeds; and, to evade Mexican anti-money laundering regulations announced in June 2010 that restrict the amount of physical U.S. currency that Mexican banks may receive.
Generally, the BMPE scheme involves a drug trafficking organization or other criminal organization obtaining large amounts of U.S. dollars through illegal activity. These organizations, either directly or in conjunction with Mexican wholesalers/retailers or other third parties, then use these U.S. cash dollars to purchase goods within the United States, such as shoes. These goods are then brought into Mexico and sold for pesos.
All three defendants, who were arrested yesterday without incident, remain in federal custody pending detention hearings next week. In addition, federal and state law enforcement executed several search warrants yesterday at various locations and seized approximately $600,000 from four bank accounts affiliated with ERENE and Rodriguez as well as approximately 25,000 pairs of shoes with a rough estimated domestic value of $1,125,000.
Each money laundering conspiracy, mail and wire fraud conspiracy, mail fraud and wire fraud charge carries a maximum penalty of 20 years in federal prison upon conviction. Each money laundering and smuggling charge carries a maximum of ten years imprisonment upon conviction.
This investigation is being conducted by the HSI’s Financial Operations & Currency Unified Strikeforce (FOCUS). FOCUS is comprised of investigators from HSI, IRS – Criminal Investigation (IRSCI), U.S. Postal Inspection Service (USPIS), Customs and Border Protection – Office of Field Operations (CBP-OFO) and the El Paso Police Department. The Government of Mexico Servicio de Administracion Tributaria (SAT) also assisted in this investigation. The case is being prosecuted by Assistant United States Attorney Joseph Blackwell.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.El Departamento de Justicia Resuelve un Reclamo Contra un Empleador de California Sobre Discriminación Contra Trabajadores Nacidos al ExtranjeroRead the Press Release
El Departamento de Justicia anunció hoy que llegó a un acuerdo con Life Generations Healthcare LLC, conocido comercialmente como Generations Healthcare (GHC), una compañía que opera asilos de ancianos por todo California. El acuerdo sigue una decisión de un tribunal administrativo que determinó que GHC incurrió en un patrón y práctica discriminatoria contra individuos nacidos al extranjero, incluyendo ciudadanos naturalizados estadounidenses, en violación de de la Ley de Inmigración y Nacionalidad.
El día 30 de septiembre del 2011, el Departamento de Justicia presentó una demanda en contra de GHC en la que alegaba que la compañía discriminó en contra de los trabajadores nacidos al extranjero y que eran autorizados a trabajar. Específicamente, GHC requería que estos inmigrantes proporcionaran más documentos de lo que requería de los ciudadanos nacidos en los Estados Unidos para establecer autorización de trabajar. Después de un juicio, la Oficina del Funcionario Administrativo Principal de Audiencias - el tribunal administrativo que recibe tales demandas - decidió en favor del Departamento.
El acuerdo de hoy resuelve los asuntos correctivas en el caso, que el tribunal no abordό en su decisión anterior. Bajo el acuerdo, GHC pagará un total de $119,313 en pago atrasado a dos víctimas de discriminación, y $88,687 en sanciones civiles a los Estados Unidos. GHC también será sujeto a monitoreo por el departamento de sus prácticas de contratación por un periodo de dos años.
“Tanto la decisión de la corte como este acuerdo destacan la importancia de cumplir con la provisión antidiscriminatoria de la Ley de Inmigración y Nacionalidad, y las consecuencias al no hacerlo,” dijo Vanita Gupta, Sub-Procuradora General Interina para la División de Derechos Civiles. “Empleadores deben revisar sus pólizas de contratación y prácticas de verificación de elegibilidad de empleo para garantizar que cumplen con las leyes federales contra la discriminación.”
El caso fue litigado y resuelto por la Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a la Inmigración (OSC) en el Departamento de Justicia, que también es la oficina responsable por hacer cumplir con la provisión antidiscriminatoria de la INA. La ley prohíbe a los empleadores imponer cargas adicionales de documentos a los solicitantes autorizados a trabajar o empleados durante el proceso de verificación de elegibilidad de empleo a causa de su estado de ciudadanía o nacionalidad. La ley también prohíbe discriminación por estatus de ciudadanía o del origen nacional durante la contratación, el despido, el reclutamiento o la referencia por comisión, represalias, e intimidación.
Para más información sobre las protecciones contra discriminación en el empleo según las leyes migratorias, llame a la línea directa de OSC para trabajadores al 1-800-255-7688 (1-800-237-2515, TTY para personas con discapacidad auditiva), llame a la línea directa de OSC para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidad auditiva), o para registrarse para un seminario gratis ofrecido a través del internet visite http://www.justice.gov/crt/about/osc/webinars.php, envíe un correo electrónico al [email protected], o visite el sitio de Internet http://www.justice.gov/crt/about/osc.
Los solicitantes o empleados que consideren que fueron sujetos a (1) diferentes requisitos de verificación por su estatus de ciudadanía, estatus migratorio u origen nacional, o (2) discriminación por estatus de ciudadanía, estatus migratorio, u origen nacional con relación a la contratación, el despido y el reclutamiento o la referencia por comisión, deberán comunicarse a la línea de dedicada a trabajadores de OSC para asistencia.District Court Enters Permanent Injunction Against Los Angeles Seafood Company and Senior Officers to Stop Distribution of Adulterated ProductsRead the Press Release
The U.S. District Court for the Central District of California entered a consent decree of permanent injunction on Dec. 1 against Neptune Manufacturing Inc. of Los Angeles and its corporate officers, Alexander Goldring, Peter Oyrekh and Semyon Krutovsky, to prevent the distribution of adulterated seafood products, the Department of Justice announced today.
The department filed a complaint in the U.S. District Court for the Central District of California on Nov. 21 at the request of the U.S. Food and Drug Administration (FDA), alleging the company’s seafood products are produced under conditions that are inadequate to ensure the safety of its products. The complaint alleges that Neptune prepares, processes, packs, holds and distributes ready-to-eat smoked and salt-cured seafood including pickled herring, smoked steelhead trout, smoked halibut, smoked whitefish, smoked salmon and smoked mackerel. The complaint also alleges that defendants Goldring, Oyrekh and Krutovsky are Neptune’s corporate officers with the authority and responsibility for preventing and correcting violations of federal law at the company.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from committing violations of the federal Food, Drug, and Cosmetic Act. The consent decree requires Neptune to cease all manufacturing operations and requires that, in order for defendants to resume distributing seafood products, the FDA first must determine that Neptune’s manufacturing practices have come into compliance with the law.
“Neptune was repeatedly informed that the sanitation practices at its facility were deficient,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The failure to actively plan for and control the presence of bacteria and neurotoxins commonly found in seafood processing facilities can pose a serious risk to the public health.”
According to the complaint, since 2006, FDA inspections have documented a pattern of continuing conduct of insanitary conditions resulting in the persistent presence of Listeria monocytogenes (L. mono). These insanitary conditions were the result of deviations from current good manufacturing practices such as not adequately cleaning surfaces and utensils used for cutting fish. Further, according to the complaint, the FDA’s most recent inspection in December 2013 documented the defendants’ failure to have and comply with adequate Hazard Analysis and Critical Control Point (HACCP) plans that control for Clostridium botulinum (C. bot) and L. mono hazards. L. mono is the bacterium that causes listeriosis, a serious and sometimes fatal infection for vulnerable groups such as newborns, the elderly and those with an impaired immune system. Ingestion of the neurotoxin C. bot can cause botulism. Though the incidence of botulism is rare, its effect is severe and the disease can cause paralysis or death if not promptly treated.
According to the complaint, the FDA has performed seven inspections of the defendants’ facility since 2006 and documented seafood HACCP or current good manufacturing practice violations every time. The complaint alleges that these inspections revealed that the company’s products are adulterated within the meaning of the Food, Drug, and Cosmetic Act. As alleged in the complaint, the company was told to take certain precautions while brining fish to control potential C. bot hazards but failed to take appropriate corrective action. Further, according to the complaint, cutting utensils were seen with dried pieces of fish on them, and exposed cracks, pits and crevices on the floor allowed water to pool in them, increasing the risk of L. mono contamination. The complaint alleges that FDA environmental samples taken around the facility tested positive for L. mono in critical areas such as the brining room, smoking/drying room and the walk-in cooler where finished products are stored.
The government is represented by Trial Attorney Dan Baeza of the Civil Division’s Consumer Protection Branch, with the assistance of Assistant U.S. Attorney Deborah Yim for the Central District of California and Assistant Chief Counsel for Enforcement Yen Hoang of the U.S. Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
DHS Technologies Agrees to Pay $1.9 Million to Settle Federal False Claims Act AllegationsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that DHS Technologies LLC and its subsidiary, DHS Systems LLC (collectively “DHS”), have agreed to pay $1.9 million, plus interest, to the United States to resolve allegations that DHS violated the False Claims Act by failing to disclose to the General Services Administration (“GSA”) that it offered greater discounts to a private company for the same items during the negotiation for the re-award of a government contract.
According to United States Attorney Peter Smith, this settlement agreement filed with the U.S. District Court today in Scranton resolves allegations that in 2007 DHS failed to inform the GSA during contract re-award negotiations, as it was required to do, that products offered for sale to the United States and its agencies were offered for sale at lower prices to a commercial company. This resulted in federal agencies paying more for the products from 2007 through 2013 than they would have had the GSA known about the lower prices.
DHS has its headquarters in Orangeburg, NY. It is a provider of mobile shelters and trailer-mounted support systems for military, medical, government and civilian organizations around the world. During the relevant time period, DHS conducted business in northeastern Pennsylvania, including with the Tobyhanna Army Depot.
“Companies doing business with the United States must be diligent in making sure American taxpayers are getting the best deal,” said GSA Deputy Inspector General Robert C. Erickson.
“Companies doing business with the U.S. government should do their part to ensure that the military is guaranteed a fair price for the goods and services it needs to support our military men and women,” said Frank Robey, the director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “Those companies who abuse their contracts will find our special agents ready to hold the companies accountable for their illegal activities.”
The settlement arose from a lawsuit filed in the United States District Court for the Middle District of Pennsylvania in 2011 by a whistleblower under the qui tam provisions of the False Claims Act. Under that law, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The False Claims Act further provides that the United States may intervene in the suit as it did in this case.
The case was investigated by the Justice Department’s Civil Division, the United States Attorney’s Office for the Middle District of Pennsylvania, the General Services Administration Office of Inspector General, the Army Criminal Investigation Command, the Defense Criminal Investigation Service, and the Defense Contract Audit Agency. The case was litigated by Assistant United States Attorney Timothy S. Judge of the United States Attorney’s Office for the Middle District of Pennsylvania.
The case is United States ex rel. McKinney v. DHS Technologies, LLC et al., Civ. No. 3:CV-11-146 (M.D.Pa.) The claims resolved by the settlement are allegations only; there has been no determination of liability. Other claims by the private plaintiff in the original lawsuit were not involved in the settlement and remain in the ongoing case.
Clay County Man Indicted on Methamphetamine Related ChargesRead the Press Release
Follow @SDILNewsKevin L. Brown, 44, of Flora, was indicted on December 2, 2014, on methamphetamine related charges in a one count Indictment returned by a Federal Grand Jury sitting in Benton, Illinois, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Count 1 charges that from May 2012, until on or about November 10, 2014, in Clay County, Brown conspired and agreed with others to knowingly and intentionally manufacture more than 50 grams of methamphetamine.
With respect to Count 1, Brown faces 5-40 years in federal prison, up to $2,000,000 fine, and supervised release of at least 4 years.
An Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation in this case was conducted by the Flora Police Department, the Clay County Sheriff’s Office, and the Southeastern Illinois Drug Task Force.
The case is being handled by Assistant United States Attorney George Norwood.
Chamico Employees Sentenced for Conspiracy to Commit Mail FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JERRY ATHEY, age 56, DAVID LOWE, age 48, and TERRY CASTILOW, age 48, all of Bogalusa, Louisiana, were sentenced yesterday for their roles in a scheme to defraud the Louisiana Workforce Commission of unemployment benefits.
U.S. District Court Judge Helen G. Berrigan sentenced ATHEY and LOWE to three years probation. CASTILOW was sentenced to 8 months home confinement and 5 years probation.
CASTILOW, LOWE, and ATHEY, were indicted in April 2014 – along with CHARLES “CHUCK” MIZELL, JR., JAMES CREEL, WILLIAM DARRYL KING, TENILLE NIELSON, JACQUELINE MYERS, and ROGER NADEAU – for mail fraud and conspiracy to commit mail fraud. According to the indictment, beginning at a time unknown, but no later than on or about September 24, 2009, and continuing through on or about January 11, 2014, MIZELL, JR., CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU, conspired to defraud the Louisiana Workforce Commission (“LWC”) of money and property by means of false and fraudulent representations, pretenses and promises, well knowing the representations, pretenses and promises were false, and mailed and caused to be mailed through the United States Postal Service unemployment (“UI”) benefit claim forms for the purpose of obtaining UI benefits to which they were not entitled. Specifically, at the time CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU applied for UI benefits and made weekly representations to LWC that they were unemployed and not getting paid, MIZELL, JR., actually employed them at Chamico, Inc., a Bogalusa construction company that concentrates on public, municipal, and industrial contracts.
MIZELL, JR., was the President of Chamico and, according to the factual bases signed by CASTILOW, LOWE, and ATHEY, he asked them to fraudulently file for unemployment so that he would not have to pay their full salaries during tough economic times for Chamico. CASTILOW, LOWE and ATHEY would each get cash from Chamico during the weeks they were claiming unemployment benefits reporting that they were not working and not getting any income from work.
In 2009, CASTILOW had personally participated in the unemployment scheme with MIZELL, JR., but when she became Chamico’s office manager in 2013 she assisted MIZELL, JR. in facilitating the scheme for the other employees. According to the factual basis for CASTILOW’s plea, she completed the unemployment forms for six Chamico employees, fraudulently representing to the Louisiana Workforce Commission that the employees did not work at Chamico when she knew that they were working and/or receiving income from Chamico. CASTILOW kept the payroll records for the employees and the ledgers showing how much cash each employee who was participating in the unemployment scheme was to receive each week. CASTILOW cashed the checks that MIZELL, JR. endorsed for those employees he was paying while they were drawing unemployment and still working for him. On pay day, those employees picked up the cash payments from CASTILOW.
MYERS pleaded guilty to conspiracy to commit mail fraud and on September 24, 2014, was sentenced to three years probation.
MIZELL, KING, CREEL and NIELSON previously pled guilty to conspiracy to commit mail fraud and are scheduled to be sentenced on January 28, 2015.
The trial of the ROGER NADEAU is scheduled for February 2, 2015.
U.S. Attorney Polite praised the work of the Department of Labor-OIG and the Federal Bureau of Investigation with assistance from the Louisiana Workforce Commission in investigating this case. Assistant United States Attorney Emily K. Greenfield is in charge of the prosecution.
California CPA Charged with Defrauding New Jersey Religious Center Out of More Than $4 MillionRead the Press Release
NEWARK, N.J. - A California CPA who allegedly stole more than $4 million from a worship center in New Jersey, is scheduled to have his initial New Jersey court appearance on Dec. 8, 2015, U.S. Attorney Paul Fishman announced.
Donald Gridiron, 50, is charged by complaint with one count of wire fraud. He was arrested in California Dec. 2, 2014, by FBI agents and released on bail after appearing in court there.
According to the complaint:
The worship center, a religious facility located in New Jersey, hired Gridiron based, in part, on his connections with individuals in the religious community as well as his standing within that community. The worship center agreed to pay Gridiron a monthly salary and reimburse him for reasonable expenses related to his work.
Gridiron allegedly used his employment to obtain additional money from the worship center without authorization. He had the worship center’s bank accounts transfer more than $2.75 million to accounts he controlled and more than $1.5 million to an account associated with a foundation in which Gridiron was involved. Gridiron then used funds from his accounts for his own use, including payments on a mortgage for his residence, payments to a luxury car dealership, and withdrawals in furtherance of his gambling.
The charge of wire fraud carries a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, twice the gross profits to Gridiron or twice the gross loss suffered to the victims of his offense.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; law enforcement officers of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s arrest. He also thanked special agents of the FBI in California for their assistance.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.14-427
Gridiron, Donald Complaint
Butler County Man Pleads Guilty to Stealing Disability Insurance BenefitsRead the Press Release
PITTSBURGH – A resident of Butler County, Pennsylvania, pleaded guilty in federal court to a charge of theft of government money, United States Attorney David J. Hickton announced today.
Jody Schmidt, 46, pleaded guilty to one count before United States District Court Judge David S. Cercone.
In connection with the guilty plea, the court was advised that from January 2005 to December 2012, Schmidt converted to his own use $71,450.00 in Social Security Title II, Disability Insurance benefit payments, which he knew he was not entitled to receive.
Judge Cercone scheduled sentencing for Wednesday, April 1, 2015 at 10 a.m. The law provides for a maximum total sentence of not more than 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentence, the court released Schmidt on bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The Social Security Administration, Office of Inspector General, conducted the investigation that lead to the prosecution of Schmidt.
Brothers Sentenced for Selling and Transporting Stolen Used Cooking Oil from Restaurants in Rhode and MassachusettsRead the Press Release
PROVIDENCE, R.I. – Andrew Jeremiah, 78, and his brother, Bruce Jeremiah, 72, of Cranston, R.I., owners and operators of Jeremiah Motors Corp., and Removal Services and Green Energy, in Central Falls, R.I., were sentenced in U.S. District Court in Providence today for conspiring to sell and transport used cooking oil stolen from restaurants in Rhode Island and Massachusetts to a processing plant in New Hampshire for processing to animal feed and biofuel.
U.S. District Court Judge John J. McConnell, Jr., sentenced each defendant to two years’ probation, with the first six months to be served in home confinement with electronic monitoring, and a $3,000 fine. Restitution in this matter will be determined at a later date. The defendants previously forfeited $44,730 in cash and a 1984 Ford F700 truck seized from them during the investigation.
Andrew and Bruce Jeremiah pleaded guilty in September to one count of conspiracy to unlawfully transport stolen goods with a value in excess of $5,000.
The sentences are announced by United States Attorney Peter F. Neronha; Vincent B. Lisi, Special Agent in Charge of the Boston Field Office of the FBI; and Central Falls Police Chief James J. Mendonca.
Anthony Simone, Sr., 60, of Cranston, a co-defendant in this matter, pleaded guilty on August 21, 2013, to one count each of conspiracy to transport in interstate commerce stolen goods and transport in interstate commerce stolen goods. He is scheduled to be sentenced by U.S. District Court Judge John J. McConnell, Jr., on January 8, 2015.
According to information presented to the court, between January 1, 2011, and November 9, 2012, Andrew and Bruce Jeremiah conspired to steal used vegetable cooking oil from restaurants in Rhode Island and Massachusetts, and to sell the product to a New Hampshire company that specializes in processing used cooking oil for use in animal feed and biofuel. During that time, Anthony Simone, Sr., was provided lists of businesses in Rhode Island and Massachusetts where quantities of used cooking oil could be found. About three times a week, between the hours of midnight and 6:00 am, Simone, using a truck registered to Jeremiah Motors, visited those businesses and others, and, without permission from the businesses, pumped the used cooking oil into a storage tank on the truck. The used cooking oil was transported to the Central Falls industrial facility operated by the Jeremiah brothers.
At the direction of the Jeremiahs, a New Hampshire company regularly sent tanker trucks to the Central Falls facility where the defendants loaded between 2,000 and 7,000 gallons of used vegetable oil per trip. More than 200,000 gallons of used cooking oil was stolen and sold to the New Hampshire processing plant.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland.
The matter was investigated by the Central Falls Police Department and the FBI.
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[email protected]Brooklyn Man Arrested and Charged in Manhattan Federal Court in Connection with Advance Fee SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that OCTAVIO LOMBARDO, a/k/a “Otto Lombardo,” was arrested this morning on wire fraud charges stemming from his advance fee scheme, which allegedly defrauded small business owners of more than $1 million.
Among other false and misleading statements, LOMBARDO allegedly lied to small business owners by claiming to have the ability and expertise to structure investment loans for their businesses through LOMBARDO’s exclusive relationships with small community banks across the United States, when in fact he did not have the ability to obtain such financing. In connection with the scheme, LOMBARDO induced over 30 business owners to pay an upfront fee that was purportedly to pay for expenses incurred during the due diligence process prior to the loan’s closing. Instead, LOMBARDO used the vast majority of the money he received from the business owners – over $1 million in total – on his own personal expenses, including rental payments, club dues, food and other personal items.
LOMBARDO is expected to be presented today in federal court in Manhattan before Chief United States Magistrate Judge Frank Maas.
U.S. Attorney Preet Bharara said: “As alleged, Mr. Lombardo repeatedly lied to dozens of small business owners and used an illegal scheme to defraud them of their hard-earned money. He proceeded to use this corruptly obtained money, amounting to over $1 million, on his own living expenses and leisure activities. I want to thank our partners at the FBI for their hard work in investigating this case and in continuing to expose unlawful schemes such as this one.”
FBI Assistant Director-in-Charge George Venizelos said: “As alleged, Lombardo stole from dozens of small business owners, looking to make significant investments with their new equity. His scheme not only defrauded the owners, but took capital away from new investments and critical employee hires.”
According to the Complaint unsealed today in Manhattan federal court:
From at least 2007 through 2013, LOMBARDO engaged in a fraudulent scheme to mislead small business owners into paying an upfront due diligence fee, typically in the amount of $25,000, in connection with loans that LOMBARDO promised to obtain for the small business owners. During this period, LOMBARDO held himself out to the business owners as having the ability and expertise to structure investment loans for their businesses through LOMBARDO’s purported exclusive relationships with small community banks across the United States. In fact, LOMBARDO had no ability to provide such financing, and none of the businesses at issue received a loan through LOMBARDO during this period.
In connection with the scheme, LOMBARDO made a series of false and misleading misrepresentations to the business owners, including: (i) that LOMBARDO could obtain interest-only loans in amounts ranging from $1 million to $75 million by consolidating the lending power of several small community banks into a trust, which he would manage through his holding company, Lombardo & Company; (ii) that, in order to structure the loan appropriately, LOMBARDO needed to conduct due diligence of the businesses, which included obtaining corporate and financial documentation and conducting site visits; (iii) that LOMBARDO required a non-refundable upfront payment – generally in the amount of $25,000 – to cover the expenses incurred during the due diligence process, including legal and other professional fees, taxes, appraisals and the like; and (iv) that this fee would be incorporated into the final loan agreement, so that the business owners would ultimately “get back” the upfront payment once the financing was in place.
As a result of these misrepresentations, LOMBARDO obtained over $1 million in so-called due diligence payments from more than three dozen business owners. LOMBARDO spent the vast majority of the due diligence payments on his own personal expenses, including, among other things, rental payments, club dues, food and other personal items. For example, LOMBARDO spent more than $300,000 on rental payments for his residence in Brooklyn, more than $100,000 on membership dues for a private gun club located in Manhattan and more than $50,000 on restaurants and purchases of wine and liquor.
Once he received the due diligence payments, LOMBARDO made a variety of excuses to the business owners – including, among others, that he was having health problems and had been hospitalized, that he was traveling and/or that he had a new grandchild – in order to explain the delay in closing the loan.
Ultimately, LOMBARDO did not provide any of the loans to the business owners as promised.
LOMBARDO, 67, was arrested this morning at his residence in Brooklyn, New York. He is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the Federal Bureau of Investigation. He added that the investigation is continuing.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Amy Lester and Damian Williams are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is
presumed innocent unless and until proven guilty.
U.S. v. Octavio Lombardo Complaint
Boise Woman Admits Unlawfully Possessing A FirearmRead the Press Release
BOISE – Andrea Lorraine Polisso, 36, of Boise, Idaho, pleaded guilty today in United States District Court to one count of unlawfully possessing a firearm, U.S. Attorney Wendy J. Olson announced.
According to information presented in court, law enforcement agents served a search warrant at Polisso’s residence on June 20, 2014. During the search, agents located a pink and silver .380 handgun in Polisso’s bedroom. When questioned about the handgun, Polisso admitted to possessing the firearm. She also admitted that she should not possess firearms due to her criminal history. Polisso is prohibited from possessing firearms because she was previously convicted of the felony crime of possessing a controlled substance on January 18, 2006, in Canyon County, Idaho.
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. The government is seeking forfeiture of the firearm.
Polisso is scheduled to be sentenced on February 13, 2015, by U.S. District Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; and Boise Police Department’s Gang Unit. Polisso is being prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Binghamton Area Physician Required to Pay Civil Penalty for Violations of the Federal Controlled Substances ActRead the Press Release
Broome County Ophthalmologist settles for $75,000.00
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian announced his office reached a civil settlement with Dr. J. Louis Pecora, an Endicott, New York ophthalmologist, for $75,000.00. As part of the settlement, Dr. Pecora also voluntarily surrendered his Drug Enforcement Administration (DEA) numbers, which enables physicians to prescribe controlled substances. The settlement was in connection with violations of the Controlled Substances Act.
In August of 2012, DEA was notified that Dr. Pecora had made suspicious orders of hydrocodone. Thereafter, DEA and New York State Police investigators conducted an inspection of Dr. Pecora’s office and home and subsequently questioned him about controlled substances he purchased between January 18, 2010 and August 8, 2012. According to the complaint filed in connection with the settlement, Dr. Pecora ordered schedule III controlled substances on eighteen (18) occasions for personal use, between January 18, 2010 and August 8, 2012. More specifically, within this time period, Dr. Pecora ordered 3,800 tablets of Hydrocodone and 500 tablets of Vicodin ES, schedule III controlled substances, for personal use, without a medical purpose and outside the usual course of his professional practice. Pursuant to regulations, a prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his or her professional practice. When Dr. Pecora ordered these controlled substances for his personal use, he did not meet these requirements. In addition, according to the complaint, Dr. Pecora refused or negligently failed to maintain a biennial inventory of controlled substances from January 18, 2010 to August 8, 2012. A biennial inventory of all controlled substances on hand is required by federal regulations.
The Controlled Substances Act was enacted to ensure that controlled substances are properly regulated and to help prevent drug diversion. Prescription drug abuse is a significant nationwide issue. According to U.S. Attorney Richard S. Hartunian, his office takes drug diversion very seriously and will aggressively pursue those who violate the Controlled Substances Act, especially if they are professionals in the medical field. "It simply is unacceptable for medical professionals to act irresponsibly when handling controlled substances. The potential for these substances to end up in the wrong hands is something we are not willing to risk, and we will take whatever steps are necessary to prevent this from happening."
Baton Rouge Man Sentenced to Fifteen Years for Child Pornography OffenseRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that Chief Judge Brian A. Jackson sentenced BRADLEY BOURQUE, age 33, of Baton Rouge, Louisiana, to a term of imprisonment of 180 months, to be followed by ten years of supervised release. The Court also ordered BOURQUE to pay $1,000 in restitution to one of his victims.
Following an online undercover investigation, on April 20, 2013, state and federal agents from the Louisiana Attorney General’s Cyber Crime Unit and the U.S. Department of Homeland Security – Homeland Security Investigations executed a search warrant on BOURQUE’S residence. During the search, agents discovered hundreds of child pornography images and videos on BOURQUE’S computer and external hard drive. Through the course of the investigation, agents determined that BOURQUE had obtained many, if not all, of these child pornography files through the Internet.
Prior to this federal conviction, BOURQUE had previously been convicted of solicitation of a minor via computer under Florida state law and indecent behavior with a juvenile under Louisiana state law.
U.S. Attorney Walt Green stated, “This conviction and sentence should signal the United States Attorney’s Office’s commitment to aggressively prosecuting individuals who actively seek out images of sexually exploited children.”
This matter was investigated by the Louisiana Attorney General’s Office – Cyber Crime Unit and the U.S. Department of Homeland Security - Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Chris Dippel.
Baton Rouge Man Indicted for Mailing Threatening Letters to Federal and State CourthousesRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today the filing of an indictment returned by a federal grand jury earlier this week that charges BRIAN CAVALIER, age 33, of Baton Rouge, Louisiana, with two (2) counts of making threats by mail, in violation of Title 18, United States Code, Section 844(e). If convicted, the defendant could face significant incarceration, fines, restitution, and supervised release following imprisonment.
The indictment alleges that on or about November 1, 2013, CAVALIER mailed a threatening letter to the United States District Court for the Middle District of Louisiana in which he falsely and maliciously conveyed that a bomb had been planted in the federal courthouse and that the bomb was set to detonate within twenty-four (24) hours. According to the indictment, approximately one month later, on or about December 2, 2013, CAVALIER mailed a second threatening letter, this time to the 19th Judicial District Court in Baton Rouge, which also falsely and maliciously conveyed that a bomb had been planted in the state courthouse and that the bomb would soon detonate.
U.S. Attorney Green stated: “My office takes threats to the safety and security of our community’s judicial and governmental offices very seriously. Specific and credible threats not only disrupt the functioning of our government and affect the daily lives of many individuals who live and work in our community, but they also divert law enforcement resources from more critical missions.”
This matter is being investigated by the Federal Bureau of Investigation, working in close coordination with the Baton Rouge Fire Department, the East Baton Rouge Parish Sheriff’s Office, the Louisiana State Police, and other law enforcement agencies. The matter is being prosecuted by Assistant United States Attorney Alan A. Stevens, who serves as a Deputy Chief of the Criminal Division.
NOTE: An indictment is an accusation by the Grand Jury. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Avondale Drug Runner Sentenced to 78 Months in PrisonRead the Press Release
U.S. Attorney Kenneth A. Polite announced that BRADLEY S. WILLIAMS, age 49, of Avondale, was sentenced today following his guilty plea to conspiracy to distribute and possession with intent to distribute heroin and cocaine hydrochloride. On August 2, 2013, WILLIAMS was one of 15 defendants charged in a 17-count superseding indictment.
U.S. District Judge Jane Triche Milazzo sentenced WILLIAMS to a 78-month term of imprisonment followed by five years of supervised release.
This case evolved from the FBI New Orleans Gang Task Force investigation into the drug trafficking activities of BYRON EVANS. The investigation revealed that EVANS supplied kilogram quantities of heroin and cocaine to distributors located in the greater New Orleans area. EVANS acquired both the heroin and cocaine that he supplied to his distributors from two Columbian foreign nationals, both illegally present in the United States, YULIAN GABRIEL VERA-OLIVEROS, a/k/a “Paco,” and EZEQUIEL PADILLA ROMERO, a/k/a “Alvaro Herney Cortes,” a/k/a “Cookie.” One of the Columbians, ROMERO also pled guilty and acknowledged supplying EVANS not less than 10 kilograms of heroin for distribution. EVANS typically had his runners transport his heroin and cocaine to New Orleans on what is known as the dollar bus/Megabus. At times during the course of the conspiracy charged WILLIAMS transported heroin from Houston to New Orleans via the Megabus. WILLIAMS also acted as a street-level distributor of heroin for EVANS and supplied customers located in the Greater New Orleans area.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney J. Collin Sims is in charge of the prosecution.
Attorney General Holder to Hold Roundtable Meetings in Five More Cities as Part of Justice Department's "Building Community Trust" InitiativeRead the Press Release
On the heels of President Obama’s national call to foster strong, collaborative relationships between local police and the communities they protect and serve, the U.S. Department of Justice announced today the upcoming cities where Attorney General Eric Holder will hold regional roundtable meetings as part of the department’s Building Community Trust initiative. Those cities are: Cleveland, Memphis, Tennessee, Chicago, Philadelphia, and Oakland, California.
The roundtables will serve as an opportunity to bring law enforcement, elected officials and members of the community together to discuss next steps that the administration will take to improve relationships between law enforcement and the community, increase the integrity within our justice system, and share best practices for policing.
The Attorney General hosted the first such Building Community Trust roundtable meeting at Ebenezer Baptist Church in Atlanta on Monday. There, he discussed President Obama’s announcement to create the Task Force on 21st Century Policing, the federal review on the use of military-style equipment for local law enforcement, and the new Community Policing Initiative to fund up to 50,000 additional body-worn cameras for law enforcement agencies. At a community town hall meeting held at the Ebenezer Baptist Church, the Attorney General announced that the department will soon release new guidelines on the use of racial profiling by federal law enforcement agencies.
The next Building Community Trust roundtable meeting will be held in Cleveland on TODAY DECEMBER 4, 2014, at 2 p.m. EST. The meeting will include law enforcement, local officials, community leaders, student leaders and faith leaders. Additional details on the other four upcoming regional roundtables will be released in the coming weeks.
ATTORNEY GENERAL HOLDER HOLDS BUILDING COMMUNITY TRUST MEETING IN CLEVELAND:
WHO: U.S. Attorney General Eric Holder
U.S. Attorney Steven Dettelbach for the Northern District of Ohio
Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division
WHEN: THURSDAY, DECEMBER 4, 2014
2:00 p.m. EST
WHERE: U.S. Attorney’s Office
801 West Superior Avenue
Cleveland, OH 44113
PHOTO SPRAY AT THE BOTTOM (Media Gather Time: 1:45 p.m. EST)
NOTE: All media must present government-issued photo I.D. (such as a driver’s license as well as valid media credentials. Press inquiries regarding logistics should be directed to Kevin Lewis at [email protected] or Sabrina Curtis at [email protected].
Armed Bridgeport Crack Dealer Sentenced to 6 Years in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JONATHAN COLON, 27, of Bridgeport, was sentenced today by Senior U.S. District Judge Warren E. Eginton in Bridgeport to 72 months of imprisonment, followed by four years of supervised release, for possessing with intent to distribute crack cocaine.
According to court documents and statements made in court, on January 10, 2013, law enforcement officers executed a search warrant at COLON’s one-room apartment on Birmingham Street in Bridgeport and found approximately 62 grams of crack cocaine packaged for street sale. Officers also located a loaded .223 caliber Bushmaster XM15-E2S assault rifle under COLON’s mattress. COLON, who was in the apartment at the time of the search, admitted to officers that he purchased the rifle the previous day for a combination of cash and crack.
COLON has been detained since his arrest on January 10, 2013. On July 25, 2013, he pleaded guilty to one count of possession with intent to distribute 28 grams or more of cocaine base (“crack cocaine”).
COLON’s criminal history includes multiple felony convictions. In December 2008, he was arrested for possessing a .45 caliber automatic handgun and crack cocaine and subsequently served three years in prison for that offense. He was arrested in this case approximately six weeks after he release from state prison.
This matter was investigated by the Federal Bureau of Investigation’s Bridgeport Safe Streets Task Force and was prosecuted by Assistant U.S. Attorney Rahul Kale.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Anchorage Felon Charged with Federal Firearms CrimeRead the Press Release
Anchorage, Alaska – U.S. Karen L. Loeffler announced today that a local man was arraigned in federal court in Anchorage on one count of felon in possession of a firearm.
26 year-old Eric Ramirez Nebreja was charged in a one-count indictment.
According to the information presented to the court, Nebreja possessed a Glock 40 caliber pistol on October 9, 2014. Nebreja has two prior felony convictions from the State of Alaska for assault in the second degree and misconduct involving weapons in the third degree.
Special Assistant United States Attorney Erin W. Bradley, who presented the case to the grand jury, indicated that the law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Anchorage Police Department conducted the investigation leading to the indictment in this case. SAUSA Bradley is a prosecutor in the U.S. Attorney’s Office funded by the Municipality of Anchorage for the purpose of prosecuting gang-related and violent crime cases.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.Alderman’s Former Chief of Staff Pleads Guilty to Accepting $7,500 Bribe in Exchange for Letters of Support for Liquor LicenseRead the Press Release
CHICAGO — A former chief of staff for an unnamed Chicago alderman pleaded guilty today to accepting a $7,500 cash bribe in exchange for obtaining the alderman’s letters of support for a license to sell alcohol in the alderman’s ward. The defendant, CURTIS V. THOMPSON, JR., accepted the bribe from an individual who claimed he wanted to open a convenience store but was actually a cooperating witness in an FBI undercover investigation.
Thompson, 63, of Chicago, pleaded guilty to federal program bribery. According to court documents, Thompson accepted 75 $100 bills in a Christmas card that the cooperating witness gave him at the alderman’s holiday party on Dec. 19, 2013. Thompson admitted today that he used the money he received to pay personal expenses.
Thompson faces a maximum sentence of 10 years in prison and a $250,000 fine. A written plea agreement states that the government anticipates a United States Sentencing Guidelines range of 12 to 18 months in prison. Thompson was arrested in February of this year and is free on bond while awaiting sentencing, which U.S. District Judge Samuel Der-Yeghiayan scheduled for March 17, 2015, in Federal Court.
Thompson’s plea agreement and court documents describe a series of telephone conversations and in-person meetings between the cooperating witness and other individuals, including a meeting with Thompson on Oct. 7, 2013, in the alderman’s ward office. During the meeting, the cooperating witness showed Thompson a note, which stated, “$7,500 to Ald for L.O.S.” Thompson understood the note to mean payment of $7,500 in exchange for a letter of support from the alderman for a liquor license for a store to be opened in the ward. After seeing the note, Thompson nodded his head and said “Okay. I understand.”
At a meeting with Thompson, the alderman, and another individual in the ward office on Oct. 29, 2013, the cooperating witness handed the alderman a note, which stated, “$12k to you for letter of support[.]” Thompson admitted that he was passed that note and that he understood that the cooperating witness was offering to pay money for a letter of support from the alderman for a liquor license. A third meeting was held on Nov. 19, 2013, at which the cooperating witness explained he was going through the process of becoming a convenience store franchisee.
Over the next few weeks, Thompson prepared two letters of support on the alderman’s letterhead and signed the alderman’s name, after seeking and obtaining the alderman’s approval to write the letters. Thompson knew that the cooperating witness had picked up the letters of support from the alderman’s ward office and understood they would be used to obtain a liquor license for the proposed store. The bribe payment was exchanged a short time later.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorneys Megan Church and Bethany Biesenthal.
Plea Agreement
Albuquerque Man Sentenced to Federal Prison for Child Pornography ConvictionRead the Press Release
ALBUQUERQUE – Joshua Iben, 22, of Albuquerque, N.M., was sentenced this morning to five years in federal prison followed by five years of supervised release for his federal child pornography charges. Iben will be required to register as a sex offender after completing his prison sentence.
Iben was arrested on Nov. 21, 2013, based on an FBI investigation that began in July 2013 and revealed that an IP address subscribed to Iben’s residential address was being used to share child pornography images. According to the criminal complaint, on Nov. 20, 2013, FBI agents executed a federal search warrant at Iben’s residence and seized computers and computer-related media. While the search warrant was being executed, Iben participated in a voluntary, recorded interview during which he admitted that he began sharing child pornography images years ago and last received or sent such images by email the week before. A subsequent forensic examination of a laptop computer taken from Iben’s residence revealed that it contains images consistent with child pornography.On Dec. 17, 2013, Iben was indicted and charged with two counts of receipt of child pornography; two counts of distribution of child pornography; and one count of possession of child pornography. The indictment alleged that Iben received child pornography on two occasions on April 29, 2013, and distributed child pornography on two occasions on Sept. 20, 2013. It also alleged that Iben possessed child pornography on Nov. 20, 2013, and that Iben committed all five offenses in Bernalillo County, N.M.
On April 21, 2014, Iben entered guilty pleas to all five counts of the indictment. The guilty plea was entered into without the benefit of a plea agreement.
This case was investigated by the Albuquerque office of the FBI and the New Mexico Regional Computer Forensics Laboratory. It was prosecuted by Assistant U.S. Attorneys Marisa A. Lizarraga and Jacob A. Wishard as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
- Additional Members of South Laredo Trafficking Group Plead Guilty
Accountant from Rio Arriba County Sentenced to More Than Nine Years in Federal Prison for Conviction on Conspiracy, Mail Fraud and Identity Theft ChargesRead the Press Release
Jasonn Gonzales was Ring Leader of Multi-State Scheme to Defraud the
Federal and State Unemployment Insurance Systems of $1,356,000.00ALBUQUERQUE – Jasonn Gonzales, 42, an accountant from Velarde, N.M., was sentenced this afternoon for his conviction on conspiracy, mail fraud and aggravated identity theft charges arising out of a scheme to defraud the federal and state unemployment insurance systems. Gonzales was ordered to serve 111 months (9.25 years) in federal prison followed by three years of supervised release. Gonzales also was ordered to pay $804,735.73 in restitution to the victims of his criminal conduct.
The sentence was announced by U.S. Attorney Damon P. Martinez; David Wickersham Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Frauds Investigations; and R.L. Faulkerson, Postal Inspector in Charge of the Fort Worth Division of the U.S. Postal Inspection Service.
Gonzales and his co-defendant, Gerald Archuleta, 43, of Ojo Caliente, N.M., were charged in a six-count indictment that was filed on March 26, 2014. Count 1 charged the two men with conspiracy to commit mail fraud in furtherance of a scheme to defraud the federal and state Unemployment Insurance System in New Mexico, Texas and Colorado of money by false and fraudulent pretenses. Counts 2 through 5 of the indictment charged the men with mail fraud, and Count 6 charges Gonzales alone with aggravated identity theft.
The federal and state Unemployment Insurance System seeks to lessen the effects of unemployment through payments made to claimants (laid-off workers) on a weekly basis while the claimants seek employment. The unemployment insurance program is administered on behalf of the federal government by state workforce agencies in each state. The investigation of this case established that between 2009 and 2012, Gonzales and Archuleta schemed to defraud the New Mexico Department of Workforce Solutions, the Texas Workforce Commission and the Colorado Department of Labor and Employment of more than $1,356,000.00 by making false and fraudulent claims for unemployment benefits in the names of real people.
Gonzales and Archuleta perpetuated their unlawful scheme by fraudulently registering numerous non-existent companies with the three state workforce agencies and filing false quarterly reports for the fictitious companies which identified claimed employees. The two men provided the names, dates of birth and social security numbers of the claimed employees to the state agencies without the knowledge or authorization of the claimed employees, who were real people. Gonzales and Archuleta then made false and fraudulent claims for unemployment benefit claims on behalf of the claimed employees of the fictitious companies. The men opened post office boxes in New Mexico, Texas and Colorado, which they provided to the three state workforce agencies as mailing addresses for the claimed employees. The state agencies mailed debit cards to the claimed employees at the post office boxes and the defendants used the debit cards to withdraw the fraudulently obtained benefits. During the life of the conspiracy, Gonzales and Archuleta submitted fraudulent claims for unemployment benefits in the aggregate amount of $1,356,461.00, and defrauded the three state workforce agencies of approximately $804,735.73 in total.
On Aug. 18, 2014, Gonzales pled guilty to all six counts of the indictment without the benefit of a plea agreement. In entering his guilty plea, Gonzales agreed to the entry of a money judgment against him that requires him to pay restitution to the victims of his crime. Today, the court ordered Gonzales, jointly with Archuleta, to pay restitution to the victims as follows: $247,929.00 to the New Mexico Department of Workforce Solution; $488,107.00 to the Colorado Department of Labor and Employment; and $68,699.73 to the Texas Workforce Commission.
On Oct. 24, 2014, Archuleta entered a guilty plea to Count 1 through 5 of the indictment. Under the terms of his plea agreement, Archuleta will be sentenced to a prison term within the range of 87 to 108 months to be followed by a term of supervised release to be determined by the court. The plea agreement also requires Archuleta, jointly with Gonzales, to pay $734,123.73 in restitution. Archuleta’s sentencing hearing is scheduled for Jan. 27, 2015.
“Defrauding the unemployment insurance program undercuts an important part of our social safety net and harmed workers, employers, and those trying to get back to work,” said U.S. Attorney Damon P. Martinez. “I commend the work of the investigators from the U.S. Department of Labor and U.S. Postal Inspection Service for making sure that those who defraud programs designed to protect workers and their families during periods of unemployment are prosecuted to the fullest extent of the law.”
“Today’s sentencing highlights the Office of Inspector General’s commitment to investigating fraud against the U.S. Department of Labor's Unemployment Insurance program,” said Special Agent in Charge David Wickersham of the Dallas Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. “We will continue to work with our law enforcement partners to investigate fictitious employer schemes that compromise the integrity of the program and hold accountable those responsible for fraud against Department of Labor programs.”“The sentence imposed on Gonzales should serve as a strong deterrent to others who intend to misuse and exploit the nation's mail system to commit fraud,” said U.S. Postal Inspector in Charge R.L. Faulkerson of the Fort Worth Division of the Postal Inspection Service. “For more than 200 years, the U.S. Postal Inspection Service has been in the forefront of securing the world's largest mail system. The U.S. Postal Inspection Service remains committed to our mission of enforcing the laws that defend the nation's mail system from illegal or dangerous use; and ensuring the public's trust in the mail.”
This case was investigated by the Department of Labor Office of Inspector General, Office of Labor Racketeering and Frauds Investigations, and the U.S. Postal Inspection Service, and is being prosecuted by Assistant U.S. Attorney Tara C. Neda.
3 December 2014
United States and State of Florida File Complaint against Defunct for-Profit College Chain and its President for False Claims Act ViolationsRead the Press Release
The United States and State of Florida have brought a civil complaint against FastTrain II Corp., a private, for-profit chain of schools that was based in Miami, Florida and was doing business as FastTrain College and Alejandro (Alex) Amor, 56, of Coral Gables, who was FastTrain’s owner, president and Chief Executive Officer. The case arises from false statements and claims that FastTrain and Amor presented to, or caused to be presented to, the United States and Florida, in violation of the federal False Claims Act, the Florida False Claims Act and common law.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Pam Bondi, Florida Attorney General, Yessyka Santana, Special Agent in Charge, U.S. Department of Education Office of Inspector General’s (ED OIG) Southeastern Regional Office, George L. Piro, Special Agent in Charge, Federal Bureau of Investigations (FBI), Miami Field Office, made the announcement. On October 2, 2014, U.S. Attorney Ferrer announced that Amor and other individuals associated with FastTrain were charged in a fifteen count indictment with conspiracy to steal government funds, in violation of Title 18, United States Code, Section 371, and theft of government funds, in violation of Title 18, United States Code, Section 641.
At its peak, FastTrain operated seven Florida campuses in Miami-Dade, Broward, Hillsborough, Pinellas and Duval counties. The governments’ complaint in the civil case alleges that from at least January 1, 2009 through June 22, 2012, when FastTrain closed, FastTrain and Amor knowingly submitted, or caused to be submitted, numerous false claims for payment to the U.S. Department of Education (ED) arising from their fraudulent course of conduct in order to participate in the federal student aid programs authorized pursuant to Title IV of the Higher Education Act of 1965 (“HEA”), as amended, 20 U.S.C. §§ 1070 et seq. (“Title IV, HEA Programs”). The Title IV, HEA programs, which are administered by ED, provide students with financial aid in the form of, among other things, Federal Pell Grants, Federal Direct Loans, and formerly, loans guaranteed by the federal government.
According to the governments’ complaint:
FastTrain submitted and/or caused to be submitted false information relating to the eligibility of students to receive Title IV, HEA program assistance, by providing false documentation showing that students had high school diplomas or its recognized equivalent, when they did not. Some FastTrain admissions personnel coached certain prospective ineligible students to lie on Free Application for Federal Student Aid (“FAFSA”) documentation in order for FastTrain to secure more federal funding for students than the students were eligible to receive.
As a result of the fraudulent scheme and its false representations of Title IV eligibility, FastTrain received millions of dollars of Title IV financial aid that it otherwise would not have received but for its conduct.
As alleged in the governments’ complaint, the United States sustained damages for over $4,340,000.00 in student loans ($4,021,321.00 in FDL Program and $320,925.00 in disbursed FFEL Program loans). In addition, the United States has sustained damages through Federal Pell Grants obtained through FastTrain’s fraudulent activities in the amount of $2,212,904.00.
“Federal financial student aid programs are designed to assist students obtain an education. Those who misuse federal funds will be brought to justice and held accountable,” said U.S. Attorney Ferrer. “This case is an example of our commitment to use our civil enforcement laws – as well as criminal laws – to protect taxpayer dollars and ensure that individuals who seek to improve their lives through a quality education are able to do so.”
“Taking advantage of students in order to exploit federal financial aid programs is reprehensible, and we will continue to work with our federal partners to protect Florida students and the integrity of federal financial aid,” said Attorney General Bondi.
“Abuse of the federal student aid program is unacceptable,” said ED OIG Special Agent in Charge Yessyka Santanta. “Tracking down and holding accountable companies like FastTrain and its executives that take advantage of students to benefit the companies’ bottom line remains a priority of our office.”
“This case represents the abuse of a federal program designed to aid students,” said George L. Piro, SAC Miami. “The FBI and its partners will continue to investigate scams like this that seek to steal taxpayer dollars.”
The case is captioned United States of America, State of Florida ex rel Juan Peña, Plaintiffs/Relator vs. FastTrain II Corp. d/b/a FastTrain College, and Alejandro Amor, Defendants, Case No.: 1:12-cv-21431-COOKE/TORRES, United States District Court, Southern District of Florida. The United States brings its complaint to recover treble damages, civil penalties, and costs under the False Claims Act, 31 U.S.C. §§ 3729-33, and to recover damages and other monetary relief under the common law and equitable theories of unjust enrichment and payment by mistake. Florida seeks similar relief under the provisions of the Florida False Claims Act, §§ 68.081-68.09, Florida Statutes and common law.
The criminal investigation was underway when the civil suit was originally filed under the False Claims Act as a whistleblower suit against FastTrain by a FastTrain admissions officer. The False Claims Act allows private citizens to file whistleblower suits to provide the government information about wrongdoing. As was done in this case, the False Claims Act and the Florida statute authorize the federal and state governments, respectively, to intervene in and assume primary responsibility for litigating the respective federal and state claims in a filed lawsuit. If the United States proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damages that resulted and a penalty of $5,500 to $11,000 per claim. Florida’s statute provides similar relief.
U.S. Attorney Ferrer commended the investigative efforts of the Florida Office of the Attorney General, ED-OIG, FBI, and ED Office of General Counsel. This matter is being litigated by Assistant U.S. Attorney James A. Weinkle, Trial Attorney Jay Majors of the Commercial Litigation Branch, Civil Division, U.S. Department of Justice and Mark S. Hamilton, Special Counsel, Consumer Protection Division, Office of the Attorney General State of Florida.
The claims asserted against FastTrain and Amor in the United States’ and State of Florida’s complaint, are allegations only, and there has been no determination of liability.
Attachment: Complaint (PDF)
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
U.S. Attorney’s Office for the District of Columbia Secures over $180 Million in Financial Recoveries in Fiscal 2014Office Has Collected Nearly $2.3 Billion over Past Five Fiscal YearsRead the Press Release
WASHINGTON - The U.S. Attorney’s Office for the District of Columbia collected nearly $180 million in criminal and civil actions and asset forfeitures during the most recent fiscal year, U.S. Attorney Ronald C. Machen Jr. announced today.
All told, the U.S. Attorney’s Office for the District of Columbia has collected nearly $2.3 billion in criminal and civil actions and asset forfeitures over the past five fiscal years.
The totals for Fiscal Year 2014 include over $160.9 million collected in criminal actions and over $11.9 million in civil actions. Another $7.7 million was collected in criminal and civil asset forfeiture actions. Additionally, the U.S. Attorney’s Office for the District of Columbia worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect another $1.4 million in civil actions cases pursued jointly with these offices.
“The $2.3 billion that we have recovered in recent years is a measure of our commitment to taxpayers and victims of crime,” said U.S. Attorney Machen. “We have restored dollars robbed from the U.S. Treasury by corrupt public officials and shady government contractors, and have deprived drug traffickers and fraudsters of their ill-gotten gains. We will continue to use the full range of legal tools at our disposal to protect the taxpayer and do justice.”
Attorney General Eric Holder recently announced that the Justice Department collected $24.7 billionnationwidein civil and criminal actions in the fiscal year ending Sept. 30, 2014. The collections in FY 2014 represent nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the Justice Department’s prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy.”
Additionally, the U.S. Attorneys’ offices nationwide, working with partner agencies and divisions, collected over $4.5 billion in asset forfeiture actions in FY 2014.
The U.S. Attorneys offices, along with the department’s litigating divisions, are responsible for enforcing and collecting criminal and civil debts owed to the United States and criminal debts owed to federal crime victims. In the District of Columbia, the Financial Litigation Unit in the Civil Division of the U.S. Attorney’s Office aggressively handles these responsibilities. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
Collections in Civil Actions
The collections in civil actions by the U.S. Attorney’s Office for the District of Columbia included more than $1.3 million generated by a settlement with Deloitte Consulting LLP, together with its predecessors and successors. This matter involved billing the government for certain personnel in labor categories for which they did not qualify on work orders under a contract with the Department of Justice. Deloitte management responsible for these tasks orders learned of these inappropriate labor categorizations in May 2012. Nonetheless, Deloitte continued to bill certain personnel at inappropriate labor categories and rates until October 2012.
The amount also included $4.2 million, plus interest, paid by the Washington Metropolitan Area Transit Authority (WMATA), to resolve allegations that it filed false claims in connection with using federal funds to impermissibly award a contract for a financial management information technology project without using competitive procurement procedures.
In another case, Alliance Rehabilitation LLC, a Maryland limited liability company with an administrative office in Hanover, Maryland and a billing office in Fairfax, Virginia, paid the United States $2.4 million as part of a settlement of allegations that the firm’s billings to Medicare and the TRICARE health care program violated the False Claims Act. The company operates physical therapy clinics in the Washington, D.C., metropolitan area.
Collections in Criminal Actions
The collections in criminal actions by the U.S. Attorney’s Office for the District of Columbia included $886,000 paid by a former senior policy advisor for the U.S. Environmental Protection Agency who pled guilty to carrying out a scheme in which he kept collecting pay and benefits even though he was not at work. John C. Beale pled guilty in September 2013 to theft of government property. Between January 2000 and April 2013, Beale was absent for about 2 ½ years. Among other things, he falsely claimed that he needed to be away while working on a project for the Central Intelligence Agency.
Beale also paid the government another $507,000 to satisfy a forfeiture money judgment in the same case.
Collections in Forfeiture Cases
Since taking office in February 2010, U.S. Attorney Machen has emphasized the importance of asset forfeiture to fight crime and criminal organizations and to seek justice for victims. Asset forfeiture is a powerful tool that can deprive criminals and criminal organizations of illegal proceeds and instrumentalities of crimes, recover property that may be used to compensate victims, and deter crime. Federal law provides authority to seize and forfeit the proceeds of virtually all serious federal offenses. Forfeited assets are deposited into the Department of Justice Asset Forfeiture Fund and Department of Treasury Asset Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.
In addition to the $507,000 judgment involving Beale, other significant collections generated by the Office’s Asset Forfeiture and Money Laundering Unit in Fiscal 2014 included over $1.8 million from the sale of forfeited real property of Kerry F. Khan, a former program manager for the U.S. Army Corps of Engineers. Khan is serving a prison sentence of 19 years and seven months following his guilty plea in an investigation of a ring of corrupt public officials and government contractors that engaged in bribery, kickbacks and other crimes. Participants in the scheme stole over $30 million through inflated and fictitious invoices.
The total also includes over $2.2 million in real property and funds seized from Min Jung Cho, the former president of Nova Datacom, LLC, a company involved in the scheme. She also pled guilty in the investigation involving Kerry Khan and others and is awaiting sentencing.
In addition, in a national security case, the government forfeited aviation equipment, valued at more than $90,000. This equipment was being procured by front companies on behalf of entities in Iran, in violation of U.S. sanctions. The front companies would launder money into the country in an attempt to conceal the true beneficiaries of the transactions. The forfeiture action led to a recovery of the equipment, and ultimately the sale of the equipment for the benefit of the United States.
Finally, in another case, the government collected $388,613 in forfeiture from Gezo G. Edwards, formerly of Silver Spring, Md., who was found guilty by a jury of conspiring to distribute large amounts of cocaine in the Washington, D.C., metropolitan area. Edwards was sentenced in February 2014 to a life prison term. The money was seized as proceeds of the drug conspiracy.
14-267Truck Driver Charged with Illegally Receiving Social Security Disability BenefitsRead the Press Release
PITTSBURGH – An Armstrong County truck driver has been indicted by a federal grand jury in Pittsburgh on a charge of theft of government property, United States Attorney David J. Hickton announced today.
The one-count indictment named Billy Joe Toy, 43, of Worthington, Pennsylvania, as the sole defendant.
According to the indictment, Toy received Social Security disability insurance benefit payments based on his alleged inability to engage in any substantial gainful activity, and thereby caused $55,012 in disability payments to be paid to him and on behalf of his minor child, while he was employed as a truck driver and concealed his compensation for the payment of his wages to his wife’s business.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The Social Security Administration, Office of Inspector General, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Ten Defendants Charged in $70 Million Scheme to Defraud Medicaid and Medicare Through Medical Clinics in Brooklyn and QueensRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), William J. Bratton, Commissioner of the New York City Police Department (“NYPD), and Thomas O’Donnell, the Special Agent-in-Charge of the New York Office of the Department of Health and Human Services, announced today the unsealing of an indictment charging ten defendants with operating a massive health care fraud scheme through three medical clinics in Brooklyn and Queens through which the defendants submitted over $70 million in fraudulent claims to Medicaid and Medicare. As alleged in the Indictment, VICTOR LIPKIN, VADIM ZUBKOV, EDUARD ZAVALUNOV, NIKOLOZ CHOCHIEV, ANATOLIY FATAKHOV, MARIANA SWAFFAR, JACQUELINE PINEZ, JONATHAN OLIVER, JASON BRISSETT, and GILBERT TROTMAN recruited financially disadvantaged and homeless people insured by Medicare and/or Medicaid (the “Phony Patients”) to undergo unnecessary medical tests, typically performed by unlicensed personnel, at the clinics in exchange for cash, and then billed the insurers for administering those unnecessary tests. In total, the defendants are alleged to have submitted over $70 million in fraudulent claims to Medicaid and Medicare, for which they fraudulently received over $25 million in insurance payments. Each of the defendants was arrested this morning. All of the defendants other than TROTMAN are expected to be arraigned in Manhattan federal court later today before a U.S. Magistrate Judge. TROTMAN was arrested in the Atlanta, Georgia, area and will be presented there later today.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, these defendants corrupted financially strapped people and fleeced Medicare and Medicare to the tune of tens of millions of dollars. To fuel their greedy scheme, the defendants allegedly had phony patients submit to medically unnecessary treatments, paying these ‘patients’ a fraction of what they themselves reaped from the fraudulent billings. The scheme enriched the defendants and burdened Medicare and Medicaid, but the scheme has been exposed and ended.”
FBI Assistant Director-in-Charge Venizelos said: “As alleged, the defendants engaged in a systematic scheme to defraud government programs designed to assist deserving patients. Adding insult to injury, the defendants preyed upon vulnerable members of our community, exploiting the less fortunate in furtherance of their criminal activity. Health care fraud wastes tax dollars, increases costs for the public and destroys the integrity of our health care system. The FBI, along with our federal, state, and local law enforcement partners, is committed to investigating this type of fraud and holding accountable those who take advantage of our government health care programs.”
NYPD Commissioner William J. Bratton said: “Healthcare fraud places a burden on taxpayers and on a healthcare system that millions of people rely on for medical care. Thanks to the collaborative efforts of our investigators, along with our federal partners, this criminal network was dismantled and its members will be held accountable for their actions.”
HHS Special Agent-in-Charge O’Donnell said: “Kickbacks and medically unnecessary services have no place in the Medicare and Medicaid systems. These programs are intended for the elderly and the most vulnerable segments of our society. The Office of Investigations will continue to vigorously pursue those that defraud these programs for their personal gain.”
According to the allegations contained in the Indictment unsealed today in Manhattan federal court:
The Heath Care Fraud Scheme
Beginning in or about 2005, LIPKIN and ZUBKOV recruited and paid a particular licensed physician (the “Doctor”) to act as the nominal owner and/or physician under whose name three purported medical clinics would bill Medicare, Medicaid, and private insurance providers (the “Insurance Providers”) for unnecessary services and tests – including sleep tests and stress tests – performed at the clinics. The clinics were located on Avenue V in Brooklyn, New York, and on Hillside Avenue and Elmhurst Avenue, respectively, in Queens, New York. LIPKIN and ZUBKOV were, in fact, the beneficial owners of the clinics, but they concealed their ownership through the Doctor’s nominal affiliation with the clinics, and by laundering the proceeds of the clinics’ operation through shell companies that they owned and controlled. LIPKIN, ZUBKOV, and ZAVALUNOV operated and controlled the clinics, and ran the clinics’ day-to-day operations, despite the fact that they were not licensed physicians, as required by New York law.
At the direction of LIPKIN, ZUBKOV, and ZAVALUNOV, other members of the scheme, including OLIVER, BRISSETT and TROUTMAN (the “Runners”), and CHOCHIEV, recruited financially disadvantaged individuals with Medicaid and/or Medicare insurance to act as Phony Patients and undergo unnecessary medical tests at the clinics in exchange for cash payments. The Runners often recruited such individuals from soup kitchens and local welfare offices, and coached them on what to say on various medical forms in order to make it falsely appear that the medical tests to which the defendants intended to subject them were medically necessary. In furtherance of the scheme, CHOCHIEV also made threats of physical violence to individuals who CHOCHIEV believed owed money to the scheme members.
Also in furtherance of the scheme, before the medically unnecessary tests were performed on the Phony Patients, SWAFFAR and PINEZ obtained the Phony Patients’ Medicaid and/or Medicare insurance information, and then contacted the Insurance Providers to confirm that the Insurance Providers would reimburse for the tests. SWAFFAR and PINEZ engaged in such conduct knowing that the Phony Patients were being recruited and paid by the Runners to undergo the tests. Once they determined that a particular Phony Patient’s insurance would pay out claims made by the clinic for the planned medical tests, SWAFFAR and PINEZ notified the Runners that the individuals were eligible and could be brought to the clinic to undergo such tests.
After the Phony Patients had been recruited, confirmed to be Medicare and/or Medicaid eligible, and transported to one of the clinics by the Runners or CHOCHIEV, in many instances, certain individuals who were not physicians administered a host of unnecessary medical tests to them. In particular, for example, FATAKHOV administered unnecessary medical tests, including stress tests, to the Phony Patients of the Elmhurst Avenue Clinic. FATAKHOV administered these tests outside the presence and supervision of the Doctor or other licensed physician, knowing that the presence or supervision of a licensed physician was required. After the unnecessary medical tests were administered, the Phony Patients were paid cash kickbacks. The defendants, through the clinics, then submitted fraudulent claims to Medicaid and Medicare seeking reimbursement for the unnecessary medical tests. In total, in the course of the scheme, the defendants fraudulently billed over $70 million to Medicaid and Medicare, for which they received over $25 million in reimbursements.
All ten defendants are charged with conspiring to commit mail fraud, wire fraud, and health care fraud. LIPKIN, ZUBKOV, and ZAVALUNOV are also charged with conspiring to launder the proceeds of the fraud. A table listing the charges against each defendant and the potential penalties for each count is attached. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI’s New York Health Care Fraud Task Force, the NYPD, and HHS. Mr. Bharara also thanked the New York City Human Resources Administration, the New York State Office of Medicaid Inspector General, and the New York State Attorney General Medicaid Fraud Control Unit for their assistance in the investigation.
The FBI’s New York Health Care Fraud Task Force was formed in 2007 in an effort to combat health care fraud in the greater New York City area. The task force comprises agents, officers, and investigators of the FBI, NYPD, New York State Insurance Fraud Bureau, U.S. Department of Labor, U.S. Office of Personnel Management Inspector General, U.S. Food and Drug Administration, NYS Attorney General’s Office, NYS-Office of Medicaid Inspector General, NYC Health and Hospitals Inspector General, New York City Human Resources Administration, and National Insurance Crime Bureau.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Timothy Howard and Daniel Tehrani are in charge of the prosecution. Assistant United States Attorney Carolina Fornos is in charge of the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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Lipkin, Victor, et al. Indictment (14 Cr 773)
Stillwater Man Pleads Guilty to Role in Large Shoplifting RingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Terry Stewart, 35, of Stillwater, NY, pleaded guilty to engaging in a racketeering conspiracy before U.S. District Judge Richard J Arcara. The charge carries a maximum penalty of 20 years in prison.
According to Assistant U.S. Attorney Anthony M. Bruce, who is handling the case, Stewart was part of an organized shoplifting ring that stole hundreds of thousands of dollars in merchandise, including breast pumps, whitening strips, cross stitch an needlepoint kits, electric toothbrushes, thumb drives, pet supplements, razors, and tool sets big box from big box stores such as Walmart, Sears, Home Depot, JoAnn Fabrics, Tops and Wegmans. The merchandise was then allegedly sold to co-defendant Rico Vendetti for 25¢ on the dollar. The merchandise was then allegedly sold by Vendetti on eBay for about half of its retail value, primarily to out-of-state customers. The defendant alone supplied Vendetti with about $700,000 in stolen merchandise over a period of several years.
Rico Vendetti, along with Arlene Combs, Albert Parsons, and Donald Griffin, all of Rochester, N.Y., are charged with felony murder in the death of 78-year old Homer Marciniak during the course of a home invasion robbery at Marciniak’s home in Medina, N.Y. in July, 2010. In addition, Vendetti and Combs are charged with racketeering, which includes the murder, witness tampering and transporting stolen goods in interstate commerce. If convicted of the felony murder charge, Vendetti, Combs, Parsons and Griffin face a mandatory sentence of life in prison without parole.
Vendetti is scheduled to be tried in front of Judge Aracara beginning next week. Charges are pending against defendants Combs, Parsons, and Griffin. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the result of an investigation on the part of Special Agents from the Federal Bureau of Investigation, the New York State Police, under the direction of Major Scott Crosier, the Orleans County Sheriff’s Department, under the direction of Sheriff Scott Hess, the Monroe County Sheriff’s Office, under the direction of Sheriff Patrick O’Flynn, the Medina Police Department, under the direction of Chief Jose Avila and Officers from the Rochester Police Department under the direction of Chief Michael Ciminelli.
Sentencing is scheduled for March 16, 2015 before Judge Arcara.
Statement by U.S. Attorney Loretta E. Lynch on Federal Investigation into Death of Eric GarnerRead the Press Release
BROOKLYN, NY – United States Attorney for the Eastern District of New York Loretta E. Lynch released the following statement regarding the federal investigation into the July death of Eric Garner of New York:
“Since the death of Eric Garner in July, our office has monitored this case closely. At the outset, informed by prior experience and in keeping with the standard practice in these types of cases in New York, the local investigation proceeded first. As the Attorney General explained earlier tonight, because the local investigation has come to a close, the Justice Department will now move forward with its own independent inquiry to determine whether federal civil rights laws have been violated. The investigation will be conducted by the U.S. Attorney’s Office and the Justice Department’s Civil Rights Division. The investigation will be fair and thorough, and it will be conducted as expeditiously as possible.”
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Rochester Man Sentenced on Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Keith Lewis, 37, of Rochester, NY, who was convicted of possession with intent to distribute and to distribute 280 grams or more of cocaine, was sentenced to 20 years in prison and 10 years supervised release by U.S. District Judge David G. Larimer. The defendant was also ordered to forfeit $2,051 in proceeds from his drug trafficking activities.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that Lewis was involved in the trafficking of cocaine in the Rochester area from at least May of 2011 to May of 2013, with the assistance of others, including Mahogany Lewis. The defendant purchased and transported cocaine from suppliers in Rochester and Buffalo, NY, and processed cocaine into cocaine base. Lewis was also responsible for the direct distribution of cocaine base to others in Rochester.
On May 14, 2013, officers conducted a traffic stop of a minivan being driven by co-consprirator Mahogany Lewis. Keith Lewis was the front seat passenger. Their two children were also in the van. After all were removed from the van, Mahogany Lewis asked if she could take a grocery bag that contained the children’s snacks with her. Upon inspection of the bag, officers observed a quantity of cocaine. The bag was placed back in the minivan which was taken to the Public Safety Building to be searched after a search warrant was secured. The Lewis’ were taken there as well to be interviewed.
During the execution of a search warrant, officers collected a knotted plastic grocery bag, an electronic room key for a room at the Extended Stay America Hotel, where the couple had been staying, and a cellular telephone. The plastic grocery bag contained approximately 143 grams of crack cocaine, 10 grams of heroin, two plastic bags containing rubber-banded packets of 20 green baggies of heroin, one plastic bag containing 11 bundles of glassine baggies of heroin, two shredder/grinders, empty zip-lock and glassine baggies and a digital scale. Keith Lewis had $2,051 on his person. Three cellular were located and seized as well from the couple. As part of the investigation, a confidential source advised officers that the source regularly purchased crack cocaine from Keith and Mahogany Lewis over the previous 24 months from the Lewis’ residence at 610 Lake Avenue and from a drug house at 208 Conkey Avenue, Rochester. Keith Lewis has two prior felony drug convictions and is on lifetime probation.
Mahogany Lewis was convicted and sentenced to time served and two years supervised release.
The conviction is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, and officers from the Greater Rochester Area Narcotics Enforcement Team, composed of law enforcement personnel in Monroe County, under the direction of Rochester Police Department Chief Michael Ciminelli.
Rochester Man Sentenced for Possessing Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Jonathan Lopez-Polo, 26, of Rochester, NY, who was convicted of possession of child pornography, was sentenced to 25 years supervised release by U.S. District Court Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Craig R. Gestring, who handled the case, stated that the defendant possessed more than 600 images of child pornography on digital media he owned, including a computer and removable media. The images included prepubescent children, as well as depictions of violence against children. As part of his sentence, Lopez-Polo also forfeited all computer equipment seized by the FBI during the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, Child Exploitation Task Force.
Rite Aid Corporation Pays $2.99 Million for Alleged Use of Gift Cards to Induce Medicare and Medicaid BusinessRead the Press Release
Rite Aid Corporation, a Delaware corporation and national retail drugstore chain with its principal place of business in Camp Hill, Pennsylvania, has paid the United States $2.99 million to resolve allegations that it violated the False Claims Act by inappropriately using gift cards as inducements, the Department of Justice announced today.
The settlement resolves allegations that Rite Aid offered illegal inducements to Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies. The government alleged that from 2008 to 2010, Rite Aid had knowingly and improperly influenced the decisions of Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies by offering them gift cards in exchange for their business.
“This case demonstrates the government's ongoing commitment to enforcing accountability, transparency and fairness in the retail pharmacy industry,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division. “The government will continue to advocate for the best interests of Medicare and Medicaid patients, and prevent pharmacies from improperly manipulating their healthcare choices.”
“This settlement holds Rite Aid accountable for exerting undue influence on individuals when they make important healthcare decisions about where and when to fill prescriptions,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Corporate profit should never steer an individual away from making the right healthcare decision.”
“Pharmacies are not allowed to improperly influence the decision-making of Medicare and Medicaid patients about where to fill prescriptions,” said Special Agent in Charge Glenn R. Ferry for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Pharmacy chains that manipulate patient choices in this way will be held accountable.”
The settlement resolves allegations filed by Jack Chin under the qui tam, or whistleblower provisions of the False Claims Act, which authorizes private parties to sue for fraud on behalf of the United States and share in the recovery. Chin will receive approximately $508,300 of the settlement.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was investigated jointly by the Commercial Litigation Branch of the Civil Division, the U.S. Attorney’s Office for the Central District of California, the National Association of Medicaid Fraud Control Units and HHS-OIG.
The claims settled by today’s agreement are allegations only and there has been no determination of liability.
Rite Aid Corporation Pays $2.99 Million for Alleged Use of Gift Cards to Induce Medicare and Medicaid Patients to Transfer PrescriptionsRead the Press Release
LOS ANGELES – Rite Aid Corporation has paid the United States $2.99 million to resolve allegations that it violated the False Claims Act by inappropriately using gift cards as inducements, the Department of Justice announced today.
The settlement resolves allegations that Rite Aid offered illegal inducements to Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies. The government alleged that, from 2008 to 2010, Rite Aid knowingly and improperly influenced the decisions of Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies by offering them gift cards in exchange for their business.
“This settlement holds Rite Aid accountable for exerting undue influence on individuals when they make important healthcare decisions about where and when to fill prescriptions,” said Acting U.S. Attorney Stephanie Yonekura. “Corporate profit should never steer an individual away from making the right healthcare decision.”
Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division stated: “This case demonstrates the government's ongoing commitment to enforcing accountability, transparency and fairness in the retail pharmacy industry. The government will continue to advocate for the best interests of Medicare and Medicaid patients, and prevent pharmacies from improperly manipulating their healthcare choices.”
The settlement, which was announced today after a federal judge last week unsealed part of the case, resolves allegations filed by a Florida pharmacist under the qui tam, or whistleblower provisions of the False Claims Act, which authorizes private parties to sue for fraud on behalf of the United States and share in the recovery.
“Pharmacies are not allowed to improperly influence the decision-making of Medicare and Medicaid patients about where to fill prescriptions,” said Special Agent in Charge Glenn R. Ferry for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Pharmacy chains that manipulate patient choices in this way will be held accountable.”
Rite Aid is a Delaware corporation and national retail drugstore chain with its principal place of business in Camp Hill, Pennsylvania,
This case was investigated jointly by the United States Attorney’s Office, the Commercial Litigation Branch of the Justice Department’s Civil Division, the National Association of Medicaid Fraud Control Units and HHS-OIG.
The claims settled by today’s agreement are allegations only and there has been no determination of liability.
Release No. 14-155
Ringleader of Tax and Social Security Scheme SentencedRead the Press Release
BOSTON – A Florida man was sentenced in U.S. District Court in Worcester yesterday for leading a scheme to steal and launder over $100,000 in government funds.
Sniders Jean-Jacques, 27, of Sunny Isles Beach, Fla., was sentenced by U.S. District Court Judge Timothy S. Hillman to 24 months in prison, three years of supervised release, and was ordered to pay $110,299 in restitution to the federal government. In July 2014, Jean-Jacques pleaded guilty to theft of government money.
In early 2013, Jean-Jacques and a Worcester man, Marvin Lubin, recruited couriers in Worcester to open bank accounts in the name of sham businesses. Social Security benefits and IRS tax refund payments, all illegally obtained using stolen identities, were then deposited to the accounts. At the direction of Lubin and Jean-Jacques, cash was immediately withdrawn following each deposit and delivered by the couriers as instructed. All of the money involved represents funds stolen from the United States government.
Forty-five victims had their identities used as part of Jean-Jacques’s scheme: 13 victims’ identities were used to steal Social Security payments, and 32 victims’ identities were used to steal tax refunds.
“Identity theft wreaks havoc in people’s financial lives and Social Security fraud deprives citizens in need of important benefits,” said United States Attorney Carmen M. Ortiz. “Targeting such schemes is a federal enforcement priority.”
“Our office is committed to partnering with law enforcement agencies and pursuing perpetrators of identity theft and electronic government fraud schemes similar to the Worcester-based operation directed by Mr. Jean-Jacques,” said Scott Antolik, Special Agent in Charge of the Office of Inspector General, Social Security Administration, Office of Investigations, Boston Field Division. “To protect themselves from similar identity theft schemes, all citizens should safeguard their personal information, regularly monitor their financial accounts and any government benefit accounts, and report any suspicious account activity to the appropriate authorities.”
In October 2014, Lubin was sentenced to one year and one day in prison for his role in this scheme. Four others have pleaded guilty in connection with this scheme: couriers Juanita Hall, Natalia Santana, and Shantelle Smith; and Emeline Lubin, Marvin Lubin’s sister, who stole names and Social Security numbers from her then employer, Tufts Health Plan, and supplied the stolen information to Jean-Jacques for use in the scheme.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General; Worcester Police Chief Gary J. Gemme; and Norwood Police Chief William G. Brooks III, made the announcement. The case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Red Lake Man Sentenced to 10 Years for Domestic AssaultRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of KYLE WAYNE MARTIN, SR., 25, an enrolled member of the Red Lake Band of Chippewa Indians, to 120 months in federal prison for a violent domestic assault committed on the Red Lake Indian Reservation. MARTIN pleaded guilty on August 20, 2014, to one count of strangulation. The defendant was sentenced today before Chief Judge Michael J. Davis in U.S. District Court in Minneapolis, Minn.
According to the defendant’s guilty plea and documents filed in court, on March 24, 2014, MARTIN assaulted the victim, who was an intimate acquaintance, in the driveway of the family home in the Ponemah District within the exterior boundaries of the Red Lake Indian Reservation. MARTIN strangled the victim in a severe act of domestic violence, restraining her as she attempted to escape in her car. MARTIN also assaulted his relatives when the victim sought to escape from the house. The attack left the victim with both physical and emotional injuries.
The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.
To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.
This case resulted from an investigation conducted by the Red Lake Tribal Police Department and the Federal Bureau of Investigation.
The case was prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.
Defendant Information: KYLE WAYNE MARTIN, SR., 25
Ponemah, Minn.
Convicted: • Strangulation, 1 count
Sentenced: • 120 months in prisonRancho Santa Fe Businessman Pleads Guilty; Admits Scheme to Sell but Not Deliver Imaging Systems for Breast ExamsRead the Press Release
SAN DIEGO - Rancho Santa Fe Businessman Christopher John Cozzie pleaded guilty to fraud charges in federal court today, admitting that he sold imaging and diagnostic systems for breast examinations that he either did not deliver or partially delivered.
According to court documents, Cozzie operated two companies, Advance Functional Imaging, and Green Screen Labs, which purported to sell equipment that included infrared cameras, laptops or touchscreen computers and imaging software plus training and interpretation services for less invasive breast examinations.
He admitted that between 2007 and 2009, he marketed the equipment to holistic healthcare providers via the internet and at health and wellness conventions in Las Vegas and various locations in California. He charged up to $35,000 per system to customers from California to Australia.
Cozzie admitted in his plea agreement that by 2008, he had no capital to run his business and was unable to provide the entire package of equipment to customers – particularly the cameras needed to do the imaging. He was selling used cameras, as well as selling the same camera to more than one customer.
According to the plea agreement, in February of 2009, when Cozzie had already failed to deliver his systems to other customers, a doctor in Texas contracted with Cozzie for an imaging system, including a new camera, computer and training. According to his plea, on April 6, 2009, the doctor wired Cozzie $32,000 for the system, but never received the camera, despite repeated contacts with Cozzie.
According to the plea agreement, some customers received partial systems; some received nothing. Yet Cozzie continued to market and sell the systems. The approximate loss suffered by Cozzie’s customers exceeds $200,000.
According to the indictment, Cozzie even removed a camera from the offices of one of his clients and delivered it to another client in another part of California.
Sentencing was set for March 3, 2015, before U.S. District Judge William Q. Hayes.
DEFENDANTS Case Number: 14cr0900WQH Christopher John Cozzie Age: 57Rancho Santa Fe, California
CHARGESWire Fraud, 18 U.S.C. 1343
INVESTIGATING AGENCY
Maximum Sentence: 20 years, $250,000 fine, $100 penalty assessment, restitutionFederal Bureau of Investigation
President of Middlesex County, New Jersey, Investment Company Sentenced to 15 Months in Prison for Defrauding InvestorsRead the Press Release
NEWARK, N.J. – The former president of a Middlesex County, New Jersey, investment company was sentenced today to 15 months in prison for defrauding investors out of more than $250,000, U.S. Attorney Paul J. Fishman announced.
Shreyans Desai, 27, of Edison, New Jersey, president of Shreysiddh Capital LLC, located in Iselin, New Jersey, previously pleaded guilty before U.S. District Judge William J. Martini to Counts One and Two of a superseding indictment charging him with wire fraud. The third count in the indictment, securities fraud, was dismissed after Judge Martini imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court: Desai misled a number of investors about his licensing status and the registration status of the company to induce them to entrust their money to him so that he could trade securities on their behalf. Desai then sought to retain control of the funds by providing investors with an inflated value of their investments and also inflated the amount of commissions he purportedly earned through trading those funds.In addition to the prison term, Judge Martini sentenced Desai to three years of supervised release and ordered to pay restitution of $121,250.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jane H. Yoon and Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
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Defense counsel: Alyssa A. Cimino Esq., Fairfield, N.J.Postal Employee Charged with Stealing VA Medicine Parcels from Mail Distribution CenterRead the Press Release
PITTSBURGH - A mail handler has been indicted by a federal grand jury in Pittsburgh on a charge of theft of mail by postal employee, United States Attorney David J. Hickton announced today.
The one-count indictment named Lisa A. White, 46, as the sole defendant.
According to the indictment, defendant, while working as a Mail Handler at the Pittsburgh Network Distribution Center on Sept. 5, 2014, stole six Veteran’s Administration (VA) medicine parcels addressed to different Pittsburgh-area VA patients.
The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The United States Postal Service and Veteran’s Administration Offices of Inspector General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Ponemah Man Sentenced for Violently Strangling A Woman on the Red Lake Indian ReservationRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of TERRY DEAN ICEMAN, 47, to 41 months in federal prison for a violent assault committed on the Red Lake Indian Reservation. On April 3, 2014, following a three-day trial, a federal jury found ICEMAN guilty of one count of strangulation. The defendant was sentenced in U.S. District Court in Duluth, Minn., on December 2, 2014.
As proven at trial, on the morning of July 18, 2013, ICEMAN assaulted his girlfriend by hitting her repeatedly and dragging her by her hair. During the assault, ICEMAN threw the victim onto the ground and strangled her with an article of clothing that he had torn from her body. As a result of the attack, the victim suffered swelling and bruising on her face and neck as well as bruising all over her body.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.
Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered during their lives than Caucasian women.
The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.
To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.
This case resulted from an investigation conducted by the Red Lake Tribal Police Department and the Federal Bureau of Investigation.
The case was prosecuted by Assistant U.S. Attorneys Manda M. Sertich and Deidre Y. Aanstad.
Defendant Information: TERRY DEAN ICEMAN, 47
Ponemah, Minn.
Convicted: • Strangulation, 1 count
Sentenced: • 41 months in prisonPittston Man Sentenced to More Than Two Years in Federal Prison for His Role in A Heroin Trafficking ConspiracyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 22-year-old Pittston resident was sentenced today to serve 25 months in prison by Senior U.S. District Court Judge James M. Munley for his role in a heroin trafficking conspiracy that operated in Luzerne County during 2013 and early 2014.
According to United States Attorney Peter Smith, the defendant, Robert Romasiewicz, previously pleaded guilty to conspiring with Sal Biscotto, also of Pittston, and others to obtain heroin from suppliers in New Jersey and distribute it to customers in Luzerne County. Biscotto, who also pleaded guilty to participating in the conspiracy, is awaiting sentencing in the case.
Romasiewicz was charged in a criminal Information filed by the U.S. Attorney’s Office in April 2014, as a result of an investigation by the Federal Bureau of Investigation, the Luzerne County District Attorney’s Office, and Pittston Police.
Judge Munley also ordered that Romasiewicz spend three years on supervised release following his prison sentence, pay a $300 fine and a $100 special assessment.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Paterson City Council Member and Former City Council President Pleads Guilty to Agreeing to Accept and Accepting BribesRead the Press Release
NEWARK, N.J. – A Paterson City Council member and former council president today admitted accepting bribes from a purported developer in exchange for his official help, New Jersey U.S. Attorney Paul J. Fishman announced.
Anthony Davis, 50, of Paterson, New Jersey, pleaded guilty today before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of attempting to obstruct, delay and affect interstate commerce by extortion under color of official right.
According to documents filed in this case and statements made in court:
On April 20, 2012, Davis accepted $5,000 in cash from an individual who was cooperating with federal authorities and who purported to be an out-of-state real estate developer. Davis accepted the bribe in exchange for his official action as Paterson City Council president to foster the developer’s business interests in Paterson. Between July 6, 2012, and July 25, 2012, Davis had meetings with the developer, during which Davis discussed the possibility of accepting additional money from the developer in exchange for a letter from Davis to the developer’s lender indicating that the Paterson City Council supported the developer with respect to certain business endeavors in Paterson. On July 25, 2012, Davis agreed to accept and accepted $5,000 in cash from the developer in exchange for such a letter.
The extortion count to which Davis pleaded guilty is punishable by up to 20 years in prison and a fine of the greater of $250,000 or twice the gross pecuniary loss or gain from the offense. Sentencing is scheduled for March 18, 2015.
U.S. Attorney Fishman credited special agents of the FBI Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division.
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Defense counsel: Randy Davenport Esq., Piscataway, N.J.
Davis, Anthony Information
Owners of Orlando Health Care Clinic Charged with $3 Million Medicare Fraud SchemeRead the Press Release
Charges have been unsealed against husband and wife owners of an Orlando health care clinic for their roles in a fraud scheme that resulted in the submission of more than $3 million in allegedly fraudulent claims to Medicare.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida and Special Agent in Charge Derrick Jackson of the U.S. Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement after the defendants were taken into custody last night and this morning.
A federal grand jury in the Middle District of Florida returned an indictment on Nov. 19, 2014, against Juan Carlos Delgado, 58, and Nereyda Infante, 48, both of Orlando, Florida, charging them with one count of conspiracy to commit health care fraud, five counts of health care fraud, and one count of conspiracy to commit money laundering. According to the indictment, Delgado and Infante owned and operated Prestige Medical Services and Rehab Center, a health care clinic that purportedly provided medical services to Medicare Part B and Medicare Part C beneficiaries, and three other similarly named clinics that also purportedly provided medical services to Medicare Part C beneficiaries.
Between February 2012 and September 2014, the defendants allegedly submitted claims to Medicare that falsely represented that medical services were provided, medically necessary, and prescribed by a physician, when they were not. The health care fraud counts specifically allege fraudulent claims involving Pentostatin prescriptions, an expensive chemotherapeutic medication, that were not medically necessary, not prescribed by a physician, and not provided. The indictment also alleges that the defendants transferred proceeds obtained as the result of fraudulent claims and diverted them for their personal use. According to the indictment, the defendants obtained more than $1.8 million in proceeds from the alleged fraud.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The case is being investigated by the HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida. The case is being prosecuted by Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Owner of Nursing Agency Convicted of Multi-Million Dollar Fraud and Money Laundering SchemeRead the Press Release
BOSTON – After deliberating for less than four hours, a federal jury convicted the owner of a home nursing agency for fraudulently billing millions of dollars of services to Medicare and then laundering the proceeds. The jury also decided that the defendant’s $750,000 home in Natick is forfeitable because it was purchased with the fraud proceeds.
Following a 15-day trial, Michael Galatis, 63, was convicted of conspiracy to commit health care fraud, ten counts of health care fraud, and seven counts of money laundering. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Feb. 26, 2015.
The jury also found that Galatis used portions of the proceeds of the fraud scheme to purchase a $750,000 house in Natick in 2010. Over the course of 14 months, Galatis purchased the house, and paid off a mortgage, in increments including $50,000 and in excess of $100,000, until he owned it free and clear of a mortgage. The jury’s finding renders Galatis’s home forfeitable. In addition, the jury found that $50,000 contained in two bank accounts related to the fraud scheme is forfeitable.
Galatis, a registered nurse, owned and operated At Home VNA (AHVNA), a home health agency located in Waltham. The Medicare program pays for home health services under specified conditions. From 2006 to 2012, Galatis caused AHVNA to submit more than $27 million in false and fraudulent claims to Medicare, and Medicare paid AHVNA more than $20 million for home health services.
Galatis, along with his co-conspirator, trained AHVNA nurses to recruit older patients on Medicare who lived in large apartment buildings. Galatis held “wellness clinics” at these buildings where nurses convinced senior citizens to enroll with AHVNA and have a nurse visit them in their home. Galatis trained AHVNA nurses to manipulate the patients’ Medicare assessment forms to make it appear as though the patients qualified for Medicare home health services, when that was often not the case. The home health orders were signed by AHVNA’s paid medical director, Dr. Spencer Wilking, who has separately pleaded guilty to health care fraud.
The elderly patients’ primary care physicians were unaware that AHVNA was sending nurses to see their patients in their homes. A number of primary care physicians complained to Galatis and asked him to stop seeing the patients, but he ignored these complaints. Similarly, AHVNA’s nurses asked Galatis if they could stop seeing the patients, because they did not need home health services, but Galatis refused these requests as well.
In 2011, Medicare passed a new requirement that a physician certify that she or he had a face-to-face encounter with the patient about the need for home health care. Even after this regulation was enacted, Galatis continued to bill Medicare for millions of dollars of home health care even though Dr. Wilking continued to sign each order without examining any of the patients.
The charging statutes provide a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss resulting from the offense, and restitution to the Medicare program. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Dr. Wilking is scheduled to be sentenced on Feb. 3, 2015. Janice Troisi, also a registered nurse and the AHVNA clinical director, is expected to go to trial on June 22, 2015.
United States Attorney Carmen M. Ortiz; Philip Coyne, Special Agent in Charge of the U.S. Health and Human Services, Office of Inspector General, Office of Investigations; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys David S. Schumacher and Lisa A. Schlatz of Ortiz’s Health Care Fraud Unit. The trial team was also assisted by the New England Benefit Integrity Support Center, a fraud contractor for the Medicare program.
Ohio Woman Sentenced to Six Months in Prison, Six Months' Home Confinement, for Creating Fictitious Evidence to Obstruct A Federal InvestigationRead the Press Release
NEWARK, N.J. - An Ohio woman who claimed she investigates labor unions on behalf of attorneys was sentenced today to six months in prison and six months’ home confinement for impeding a federal investigation, U.S. Attorney Paul J. Fishman announced.
Debbie Shank Morgan, 58, of Euclid, Ohio, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging her with one count of obstruction of justice. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
In May 2012, Morgan contacted federal agents from the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (DOL-OIG) in New Jersey, a law enforcement agency that investigates allegations related to federal crimes, such as bribery and theft, involving labor unions, union officers, and employee benefit plans.
Morgan said she was a non-practicing lawyer who investigates crimes associated with labor unions, employee benefit plans and other alleged violations of federal criminal and civil law. Morgan said she had information that a former union officer and his father, both from an international labor union, had committed serious violations of federal law. She alleged they had embezzled $30 million from a political action committee (PAC) associated with the union.
Morgan provided federal agents with e-mails and other documents and items as evidence. She had, in fact, falsified, altered and created these items. Morgan provided federal agents with e-mails she claimed were evidence in support of her allegations. Federal agents then obtained a court-authorized search warrant and seized the actual e-mails transmitted through the service provider. The e-mails from the search warrant demonstrated that she had altered and fabricated the e-mails before giving them to federal agents. In September 2012, she claimed that an unknown individual had fired a weapon at her car while she was driving it in Ohio. Morgan then provided federal agents with two digital recordings, allegedly with the wife of the alleged shooter. In these consensual recordings, the wife admitted that her husband had fired a weapon at Morgan’s car. The recordings, however, were fabricated and created by Morgan and an unknown third party.
In addition to the prison term, Judge McNulty sentenced Morgan to serve three years of supervised release and fined her $5,000.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Region, under the direction of Special Agent in Charge Cheryl Garcia, for the investigation.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Jack A. Meyerson Esq., Philadelphia