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29 August 2014
Sacramento Woman Found Guilty in Mortgage Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — After a nine-day trial, a federal jury found Anna Sorokina Kuzmenko, 33, of Sacramento, guilty today of two counts of wire fraud in a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced. The trial was held before United States District Judge John A. Mendez.
According to court documents and evidence presented at trial, in February of 2007 Kuzmenko served as a straw buyer for a house in Carmichael. She applied for two loans to finance the entire purchase, and falsely represented that she was an orthodontist making $36,000 per month, had $42,000 in her bank account, was a United States citizen, and would live in the house she was purchasing. In fact, evidence at trial showed that Kuzmenko was not an orthodontist, declared only $13,000 in income for 2006 and none for 2007, had little to no money in her bank account, was not a citizen, and never lived in the house she purchased.
The evidence also showed that although the bank was told the sales price was $1 million, the seller had agreed to receive only approximately $800,000 from the transaction and to give the remaining money back to the scheme participants. Bank records showed that Kuzmenko’s husband and other family members received almost $177,000 through the scheme. Additionally, two of Kuzmenko’s family members received approximately $25,000 in commission payments based on the fraudulently procured loans. Kuzmenko defaulted on the mortgages for the Carmichael house in September 2007 and the property was foreclosed upon by April 7, 2008.
"Mortgage fraud cases can be very challenging, but this office has developed considerable expertise in prosecuting them,” stated U.S. Attorney Wagner. “We are pleased that the jury held Ms. Kuzmenko accountable for her crime, and we will continue our efforts to hold accountable those who enriched themselves through fraud, and who contributed to the financial meltdown that hit our communities so hard."
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Lee S. Bickley and Todd A. Pickles are prosecuting the case.
Kuzmenko is scheduled to be sentenced by Judge Mendez on December 9, 2014. She faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Raymond Man Sentenced for Diverting Fentanyl at Exeter HospitalRead the Press Release
CONCORD, NEW HAMPSHIRE – Peter McGlynn, 46, of Raymond, New Hampshire, was sentenced today in United States District Court for the District of New Hampshire to 42 months of probation for obtaining a controlled substance by fraud, announced United States Attorney John P. Kacavas.
McGlynn pleaded guilty to the charge on May 22, 2014. At the plea hearing before Chief U.S. District Judge Joseph Laplante, McGlynn admitted that on or about January 16, 2013, while working as an Emergency Medical Technician at Exeter Hospital, McGlynn volunteered to administer fentanyl (a powerful opiate) to a patient who was being treated at the Emergency Department of the hospital. Although he obtained 100 micrograms of fentanyl and claimed to administer the drug to a patient, the patient did not obtain any pain relief. A nurse suspected that the drug had not been provided to the patient. A drug test was performed on McGlynn. The test detected the presence of fentanyl in his system.
McGlynn’s crime took place just six months after another Exeter Hospital employee, David Kwiatkowski, was arrested for diverting fentanyl and tampering with consumer products. Kwiatkowski’s criminal activities resulted in the infection of dozens of people with Hepatitis C. On December 2, 2013, Kwiatkowski was sentenced to 39 years in prison for his conduct. The investigation of McGlynn did not reveal any evidence indicating that he had infected patients or exposed patients to any disease.
United States Attorney John P. Kacavas said, “My office remains committed to stopping drug diversion by health care workers. The Kwiatkowski case demonstrated that health care workers who divert or tamper with drugs can jeopardize the health and safety of their patients. Not only do drug diversion and tampering create the potential for patients to become infected with diseases, but it also can cause patients to experience unnecessary pain. Health care workers who divert drugs and ingest them on the job can also put patients at risk because their judgment can be clouded by the drugs they have taken. This can lead to errors that can have life-threatening consequences. I encourage all health care facilities to be alert to potential drug diversion incidents and to report them promptly to law enforcement officers. That is what Exeter Hospital did in this case.”
This investigation involved the cooperative efforts of federal and local law enforcement entities, including the Federal Bureau of Investigation, the Exeter Police Department, and the New Hampshire Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorney John J. Farley.
Rapid City Man Indicted on Child Pornography ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Receipt of Child Pornography and Possession of Child Pornography.
Andrew Hiipakka, age 27, was indicted on August 26, 2014. He appeared before U.S. Magistrate Judge John E. Simko on August 27, 2014, and pled not guilty to the Indictment.
The penalty upon conviction is a mandatory minimum of 5 years’ imprisonment up to 20 years’ imprisonment and/or a $250,000 fine, lifetime of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment charges that between November 2013 and August 2014, at Rapid City, Hiipakka knowingly received and possessed computers files containing images of child pornography.
The charges are merely accusations and Hiipakka is presumed innocent until and unless proven guilty.
The investigation was conducted by the South Dakota Internet Crimes Against Children Taskforce. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Hiipakka was released pending trial, with conditions limiting his use of the Internet and contact with children. A trial date has not been set.
Phoenix Man Pleads Guilty to Federal Child Pornography OffensesRead the Press Release
LUBBOCK, Texas — A former resident of Phoenix, Arizona, pleaded guilty today before U.S. District Judge Sam R. Cummings to federal child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Gregory James Flohr, 54, pleaded guilty to one count of transportation of child pornography and one count of possession of child pornography. He faces a statutory penalty of from five years to 30 years in federal prison, and a $500,000 fine. Judge Cummings ordered a presentence investigation report with a sentencing date to be set following the completion of that report. Flohr has been in custody since his arrest early last month on a related federal criminal complaint.
According to the factual resume filed in the case, when Flohr traveled from Arizona to Texas, he intentionally transported videos depicting a prepubescent female minor engaged in sexually explicit conduct. In addition, on the evening of July 2, 2014, Flohr knowingly possessed a Samsung cell phone that contained a child pornography video that had been transported from Arizona.
According to the complaint filed in the case, the investigation began on July 2, 2014, after Flohr entered a T-Mobile store in Lubbock, accompanied by “Jane Doe,” a female minor under age 12. Flohr purchased two cell phones, one for himself and one for Jane Doe. Flohr requested that the T-Mobile staff transfer data from his existing cell phone onto the newly purchased cell phone. This process involved Flohr telling the T-Mobile employee his Google Gmail account and password to facilitate the data transfer. During the data transfer, the employee noticed several images and videos of Flohr engaged in sexual contact with Jane Doe. After Flohr left the store, T-Mobile contacted the Lubbock Police Department to report the incident.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the 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 sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Lubbock Police Department, the Hockley County Sheriff’s Office, and the FBI were involved in the investigation of the case. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.
Phoenix Man Pleads Guilty to Federal Child Pornography OffensesRead the Press Release
LUBBOCK, Texas — A former resident of Phoenix, Arizona, pleaded guilty today before U.S. District Judge Sam R. Cummings to federal child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Gregory James Flohr, 54, pleaded guilty to one count of transportation of child pornography and one count of possession of child pornography. He faces a statutory penalty of from five years to 30 years in federal prison, and a $500,000 fine. Judge Cummings ordered a presentence investigation report with a sentencing date to be set following the completion of that report. Flohr has been in custody since his arrest early last month on a related federal criminal complaint.
According to the factual resume filed in the case, when Flohr traveled from Arizona to Texas, he intentionally transported videos depicting a prepubescent female minor engaged in sexually explicit conduct. In addition, on the evening of July 2, 2014, Flohr knowingly possessed a Samsung cell phone that contained a child pornography video that had been transported from Arizona.
According to the complaint filed in the case, the investigation began on July 2, 2014, after Flohr entered a T-Mobile store in Lubbock, accompanied by “Jane Doe,” a female minor under age 12. Flohr purchased two cell phones, one for himself and one for Jane Doe. Flohr requested that the T-Mobile staff transfer data from his existing cell phone onto the newly purchased cell phone. This process involved Flohr telling the T-Mobile employee his Google Gmail account and password to facilitate the data transfer. During the data transfer, the employee noticed several images and videos of Flohr engaged in sexual contact with Jane Doe. After Flohr left the store, T-Mobile contacted the Lubbock Police Department to report the incident.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the 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 sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Lubbock Police Department, the Hockley County Sheriff’s Office, and the FBI were involved in the investigation of the case. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.
Oakland Resident Sentenced to 30 Months in Tax Fraud SchemeRead the Press Release
OAKLAND – Jonathan Davis was sentenced today to 30 months in prison and ordered to pay restitution of $178,426 for his involvement in a tax fraud scheme, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez announced.
Davis, 33, of Oakland, pleaded guilty to one count of wire fraud on April 18, 2014. According to the plea agreement, Davis devised a scheme to obtain money by preparing and filing false federal income tax returns in the names of other people. In order to carry out this scheme, Davis had friends obtain names, birthdates, and social security numbers of people who did not authorize the use of that information on the filed tax returns. Davis opened bank accounts in the names of these victims and linked those accounts to debit cards for the purpose of receiving the fraudulent tax refunds. Davis directed the banks to mail the debit cards to himself or his friends and paid his friends up to $200 for addresses that he could use for bank accounts, debit cards, and tax returns. During 2011 and 2012, Davis caused 111 materially false federal income tax returns to be electronically filed. On those 111 returns, Davis falsely claimed refunds of $484,546, and successfully obtained $178,426 from the IRS.
Davis was indicted on August 22, 2013. He was charged with 11 counts of wire fraud and 11 counts of aggravated identity theft.
The sentence was handed down by the Honorable Jon S. Tigar, United States District Court Judge, following a guilty plea on one count in violation of 18 U.S.C. Section 1343. Judge Tigar also sentenced the defendant to a five-year period of supervised release. The defendant was ordered to surrender on Nov. 3, 2014.
Assistant United States Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the IRS, Criminal Investigation.
(Davis indictment )
New York Man Pleads Guilty to Bank Fraud and Aggravated Identity TheftRead the Press Release
NORFOLK, Va. – Jeffrey Washington, 36, of New York, NY, pled guilty yesterday to conspiracy to commit bank fraud and aggravated identity theft.
Dana J. Boente, United States Attorney for the Eastern District of Virginia made the announcement after the plea was accepted by U. S. District Judge Arenda L. Wright Allen.
Washington was charged in a criminal indictment returned on May 12, 2014, with one count of conspiracy to commit bank fraud, ten counts of bank fraud, seven counts of aggravated identity theft, and two counts of interstate transportation of property converted or taken by fraud. Washington faces a maximum penalty of thirty (30) years in prison on the bank fraud charge and a $1,000,000 fine, and a maximum penalty of a mandatory two (2) years in prison on the aggravated identity theft charge and a fine of $250,000 when he is sentenced on December 5, 2014, in Norfolk.
According to a statement of facts filed with his plea agreement, Washington was a leader of a group that conspired to steal identity and financial information from Wells Fargo Mortgage offices. There were twelve Wells Fargo offices in New York, Pennsylvania, Maryland and New Jersey that were the subject of burglaries from 2012 through 2014. Over 1,800 mortgage files were stolen that contained identity and financial information. The Wells Fargo mortgage customers had bank accounts at various financial institutions including Wells Fargo Bank, M&T Bank, PNC Bank, Capital One Bank, and TD Bank.
From 2012 – 2013, Washington and other conspirators traveled from New York to Virginia and other states along the East Coast in order to conduct the scheme. They impersonated various bank customers, using counterfeit identifications created from the stolen personal information, and opened business accounts in fake business names in order to drain legitimate customer accounts at various banks of hundreds of thousands of dollars. In August 2013, conspirator Alice Howard was arrested in the course of impersonating a bank customer at a Wells Fargo bank branch in Ashland, Virginia. Howard was charged with the same scheme and was sentenced to sixty-five (65) months imprisonment in April 2014. Following Howard’s arrest, Washington continued his involvement in obtaining mortgage files through the burglaries of other mortgage offices. Currently, two other individuals have been charged in the scheme.
This case was investigated by the United States Secret Service, the United States Postal Inspection Service and the Newport News Police Department. Assistant U. S. Attorney Brian Samuels is prosecuting the case on behalf of the United States.
District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
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Morgan State University Professor Sentenced to 3 Years in Prison in Scheme to Defraud the National Science Foundation and for Obtaining Kickbacks from Student StipendsRead the Press Release
Fraudulently Obtained $200,000 and Attempted to Obtain Another $500,000 through a National Science Foundation Small Business Program
Baltimore, Maryland - U.S. District Judge Ellen L. Hollander sentenced Manoj Kumar Jha, age 47, of Severn, Maryland, today to three years in prison followed by three years of supervised release for wire fraud, mail fraud, falsification of records, and theft of government property in connection with a scheme to fraudulently obtain research grants from the National Science Foundation (NSF) and kickbacks from students’ stipends. Judge Hollander also entered an order requiring Jha to pay $105,726 in restitution.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Allison Lerner, Inspector General at the National Science Foundation.According to trial testimony, from January 2008 through July 2009, Jha fraudulently obtained $200,000 in grant funds from the National Science Foundation=s (NSF) Small Business Technology Transfer (STTR) program to fund a highway project, and attempted to obtain another $500,000 through the same program. Jha converted the funds to his personal use. For example, Jha made payments on his mortgage and personal credit card and authorized approximately $11,000 in salary payments to his wife, who performed no NSF-related work.
Jha, a full time professor at Morgan State University, incorporated Amar Transportation Research and Consulting, Inc. (ATRC), and was its president and only director. Trial evidence showed that Jha submitted funding proposals on behalf of ATRC to the STTR. The stated purpose of Jha=s proposed project was to enhance current models used by highway planners to optimize horizontal and vertical highway routes, and ultimately, to commercialize the result. In his application for STTR funding, Jha listed himself as the principal investigator and the University of Maryland as the CRI. Under the STTR, the primary employment of the principal investigator must be with the small business at the time of the award; and at least 40% of the research must be performed by the small business and 30% by a collaborating research institution (CRI), as measured by the budget.
Trial evidence was presented that in his applications, Jha falsely represented that: he would secure “release time” or negotiate other leave options with Morgan State University in order to spend time at ATRC working on the highway project; that ATRC had eight employees; and that another Morgan State professor would be working for ATRC as a Senior Scientific Advisor. In fact, Jha remained employed full time as a professor at Morgan State and none of the statements were true. Jha also misrepresented the involvement of the University of Maryland in conducting research on the project and further misrepresented that he had obtained a $100,000 investment from a third party in order to qualify for matching funds from NSF.
On February 15, 2011, an investigator with the Office of Inspector General (OIG) for the NSF sent Jha a letter requesting copies of documents, including a list of all individuals who worked on the highway project and their time sheets, and the company=s expenditure ledger detailing all budget categories, as part of a proactive OIG review of ATRC’s compliance with laws, regulations, and conditions in connection with the NSF grant. On March 11, 2011, Jha provided, through his attorney, biweekly, signed time sheets purportedly maintained by Jha for a research scientist who worked on the highway project from October 1, 2008 until September 8, 2009. The time sheets were created by Jha only after receiving the OIG letter, and in such a way as to give the false appearance that the time sheets had been maintained and signed contemporaneously with the research scientist’s work. Jha also provided a copy of ATRC’s expenditure ledger as of September 10, 2009, in which he entered fictitious research expenses in order to conceal the fact that NSF funds had been converted to Jha’s personal use.
Finally, between March 4, 2008 and June 30, 2012, Morgan State University received federal funds under two subcontracts funded by the U.S. Department of Defense. Jha served as Morgan State’s Principal Investigator for those contracts and authorized stipend payments totaling approximately $100,000 to Morgan State University students working on those contracts. Trial evidence showed that between July 25, 2009 and July 24, 2010, Jha told some students who received stipend payments that they had to return a portion of the stipend funds to him, offering various false and misleading reasons. Some students returned a portion of their stipend to Jha, which Jha then used to pay personal expenses. The evidence showed that approximately $36,000 in stipend funds returned to Jha by Morgan State University students were deposited into Jha’s personal bank account
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein thanked the National Science Foundation, Office of Inspector General for its work in the investigation and thanked the Department of Transportation Office of Inspector General for its assistance. Mr. Rosenstein praised Assistant U.S. Attorney Martin J. Clarke and Special Assistant U.S. Attorney Fara Damelin, Investigative Attorney with the Office of Inspector General for the National Science Foundation, who prosecuted the case.
Mescalero Apache Man Sentenced for Misdemeanor Assault ConvictionRead the Press Release
ALBUQUERQUE – Julius Scott Mendez, 21, a member of the Mescalero Apache Nation who resides in Mescalero, N.M., was sentenced this afternoon in federal court in Las Cruces, N.M., to two years of probation for his misdemeanor assault conviction. Mendez also spent 65 days in federal custody while awaiting sentencing.
Mendez was arrested on Oct. 10, 2013, on a criminal complaint charging him with assault. According to court filings, Mendez assaulted the victim, another Mescalero Apache man, in a location within the Mescalero Apache Reservation.
Mendez pled guilty on June 25, 2014, to a misdemeanor information charging him with assault by striking, beating or wounding. During his plea hearing, Mendez admitted to assaulting the victim in the early morning hours of Oct. 10, 2013, by kicking the victim in the face and chest. Mendez also acknowledged that, at the time of the assault, the victim was lying on the ground and unable to defend himself.
This case was investigated by the Mescalero Agency of the BIA’s Office of Justice Services and was prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office.Manufacturer of Spinal Devices and Surgeon to Pay United States $2.6 Million to Settle Alleged Kickback SchemeRead the Press Release
Omni Surgical L.P., doing business as Spine 360, a manufacturer of devices used in spinal surgery, and Dr. Jamie Gottlieb, an Indiana spinal surgeon, have agreed to pay $2.6 million to the United States to settle allegations that Spine 360 paid illegal kickbacks to Gottlieb to induce him to use the company’s products. Spine 360 is based in Austin, Texas.
“The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can alter a physician’s judgment about the patient's true health care needs and drive up health care costs for everybody,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”
The Anti-Kickback Statute restricts the financial relationships that medical device manufacturers may have with doctors who use or prescribe their products. It is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based upon the best interests of the patient.
The settlement announced today involved payments that Spine 360 made between 2007 and 2009 to an entity controlled by Gottlieb. Although the payments were purportedly made pursuant to a series of intellectual property agreements, the United States contended that those agreements were shams, and that the payments were intended to compensate Gottlieb for using Spine 360 products in his surgeries.
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 $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The case was handled by the Commercial Litigation Branch of the department’s Civil Division , the U.S. Attorney’s Office for the Northern District of Indiana and the U.S. Department of Health and Human Services-Office of Inspector General. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Makah Tribal Member Sentenced to 33 Months in Prison for Knife AttackRead the Press Release
An enrolled member of the Makah Tribe was sentenced today to 33 months in prison and three years of supervised release for assault with a dangerous weapon, announced U.S. Attorney Jenny A. Durkan. KENNETH A. WARD, 44, was taken into federal custody on December 26, 2013, following the assault on Makah Tribal land. At sentencing U.S. District Judge Robert J. Bryan said, “When you're drinking, you're a danger to your community and a danger to your family . . . . This was an inch away from a murder case . . . you're in luck you weren't successful with the swing of your knife.”
According to records filed in the case, on December 22, 2013, WARD showed up at the apartment of the victim and accused the victim of stealing his jacket. After punching the victim in the face, WARD pulled out a knife with a 2-3 inch blade, and slashed and cut the victim’s chin, narrowly missing the victim’s throat. The assault resulted in the victim having to receive medical treatment and four internal and four external stitches to his wounds.
WARD pleaded guilty in May 2014.
The case was investigated by the Neah Bay Department of Public Safety and the FBI.
The case was prosecuted by Assistant United States Attorneys J. Tate London and Ye-Ting Woo.
Major Federal Wildlife Prosecution at South Carolina PlantationRead the Press Release
Contact Person: Rhett DeHart (843) 727-4381
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that William Martin, age 59, of Yemassee, Keith Gebhardt, age 54, of Yemassee, and Mark Argetsinger, age 63, of Beaufort, were sentencedin federal court in Charleston, South Carolina, for the unlawful trapping and killing of migratory birds at Mackay Point Plantation in Jasper County. This crime is a violation of the Migratory Bird Treaty Act under Title 16, United States Code, Section 703. United States Magistrate Judge Bristow Marchant of Charleston sentenced Martin, Gebhardt, and Argetsinger to six months probation, community service, a one-year ban on trapping, and a fine. In addition to the guilty pleas of Martin, Gebhardt, and Argetsinger, Mackay Point Plantation LLC. has agreed to pay $250,000.00 in community restitution. The U.S. Attorney’s Office in South Carolina and the Fish and Wildlife Service will divide these funds among local animal charities such as the Center for the Birds of Prey and the Society for the Prevention of Cruelty to Animals (SPCA).
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Evidence presented in this case established that Mackay Point Plantation is an 8,000 acre plantation in Jasper County. It is a state-of-the-art hunting preserve that has twenty-six (26) miles on intra-coastal rivers, two large guest houses, horse stables, and a hunting dog kennel. The plantation is divided into different hunting areas for deer, quail, doves, and ducks, and it has twelve (12) employees who manage the hunting preserve. It is a private plantation and is used only by the owners and their family and friends.
William Martin is the general manager of Mackay Point. Keith Gebhardt trains the horses and the hunting dogs. Mark Argetsinger handles the heavy equipment. These employees release approximately 6,000 quail each year on the plantation for the owners to hunt. Red-tail Hawks and Great Horned Owls are native to South Carolina, and these birds of prey eat quail as natural predators. In order to improve the quail hunting, Martin, Gebhardt, and Argetsinger placed dozens of baited, steel traps to kill hawks and owls. These hawks and owls are protected under the Migratory Bird Treaty Act and cannot be killed without a permit.
This case came to the attention of the authorities based on a confidential tip. Soon thereafter, a South Carolina Department of Natural Resources (DNR) officer saw a dead hawk near the river bank on the plantation. The DNR and Fish and Wildlife Service (FWS) agents installed cameras on the plantation over a two-year period, and the surveillance footage shows Argetsinger and Gebhardt trapping and shooting more than 30 hawks and owls. The trapping and killing occurred only during quail season. This trapping is more gruesome than shooting the hawks and owls because the birds were often trapped for several days being killed.
In February 2014, a federal search warrant was executed at Mackay Point Plantation, and more traps and dead birds of prey were uncovered. Argetsinger and Gebhardt were interviewed and confessed to unlawfully trapping and killing hawks and owls in order to improve the quail hunting. Martin, the plantation manager, was also implicated in the trapping. There is no evidence that the owners of Mackay Point were involved in the killing of the hawks and owls.
The killing of birds of prey, such as hawks and owls, to improve quail hunting has become a widespread problem in the Southeast. The $250,000.00 in community restitution is one of the largest financial penalties in the history of the Fish and Wildlife Service. U.S. Attorney Bill Nettles stated after the guilty plea and sentencing that the “Federal Government has a strong interest in protecting our nation’s natural resources, including wildlife.” Nettles further stated that “Today's sentence sends a strong message to unscrupulous hunters and landowners who think they are above the law.”
Luis Santiago, Special Agent-in-Charge, Southeast Region, U.S. Fish and Wildlife Service said of today’s plea: “This case is an excellent example of the cooperative investigative efforts between the South Carolina Department of Natural Resources, and the U.S. Fish & Wildlife Service, and each agency’s strong commitment to investigate violations of wildlife laws. We take very seriously our mission to support our state counterpart wildlife enforcement agencies, and we will continue to aggressively pursue individuals as well as corporations who are involved in the illegal take of protected species of wildlife”.
Assistant United States Attorney Rhett DeHart of the Charleston office prosecuted the case. The case was investigated by agents of Fish and Wildlife Service and the South Carolina Department of Natural Resources.Mail Fraud Involving Mineral Rights Results in 32 Months in Prison and $1 Million Restitution for Louisiana ManRead the Press Release
Oklahoma City, Oklahoma – JORDAN SIMON, 34, of Baton Rouge, Louisiana, was sentenced by United States District Judge Joe Heaton to serve 32 months in prison for mail fraud involving mineral rights, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. According to court records, from November of 2011 through March of 2013, Simon induced an Oklahoma woman to sell her mineral rights to Simon’s company, Iconic Resources, promising to pay her for those rights. However, Simon sold the mineral rights to third parties and sent the woman checks which were rejected for insufficient funds and mailed her a bogus mineral deed which purported to convey the interests back to the woman.
Simon was charged by Information on February 25, 2014, and pled guilty on March 13, 2014. As part of his plea agreement, Simon agreed to pay restitution to the Oklahoma woman and to other victims whom he also defrauded of their mineral rights. Judge Heaton sentenced Simon to serve 32 months in prison, followed by three years supervised release, and ordered him to pay $1,054,143.86 in restitution to his victims.
This case is the result of an investigation by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Amanda Maxfield Green.
Lubbock Man Pleads Guilty to Child Pornography OffenseRead the Press Release
LUBBOCK, Texas — Scott Brandon Hutcheson, 37, of Lubbock, Texas, pleaded guilty today before U.S. District Judge Sam R. Cummings to one count of transportation of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Hutcheson faces a statutory penalty of not less than five years or more than 20 years in federal prison, up to a $250,000 fine, and up to a lifetime of supervised release. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. Hutcheson remains on bond.
According to the factual resume filed in the case, in January 2014, Hutcheson used his computer to send an image of child pornography to the wife of a childhood classmate of his. The image depicted the recipient’s son, age four or five, eating an ice cream cone. The image, however, had been modified to make it appear the child was engaged in sexually explicit conduct. The child’s name was also displayed across the top of the image. Hutcheson sent the image, under the name of a third party, with the message:
A friend of mine asked me to send you this, and to inform you that it has been re-blogged onto NAMBLA (North American Boy Love Association) sponsored websites. He said that you would understand that filth is an aesthetic.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the 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 sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The case was investigated by the Lubbock Police Department and the FBI. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.
Leader of Bakken Drug Trafficking Organization Sentenced to 20 Years in Federal CourtRead the Press Release
BILLINGS-A Washington man, who led a major drug trafficking organization that distributed large amounts of pure methamphetamine in Montana, particularly in the Bakken Region, was sentenced in federal court today for the offense of possession of methamphetamine with intent to distribute. Billings United States District Court Judge Susan P. Watters sentenced Robert Farrell Armstrong, also known as "Dr. Bob," to 240 months in prison, to be followed by a term of 5 years supervised release. Armstrong, 49, is from Moses Lake, Washington.
Assistant United States Attorneys Joseph Thaggard and Brendan McCarthy prosecuted the case, which is a part of Project Safe Bakken. That project is an interagency effort by the United States Attorneys for Montana and North Dakota and the Attorneys General for Montana and North Dakota, as well as a number of federal, state, local, and tribal law enforcement agencies. It designed to fight crime in the Bakken Region of eastern Montana and western North Dakota. The Drug Enforcement Administration (DEA), Montana Division of Criminal Investigations (MDCI), Sidney Police Department, Sweet Grass Sheriff's Department, Montana Highway Patrol, and the United States Border Patrol participated in the investigation of Armstrong and his accomplices as part of "Operation Oil Patch Kids." Thus far, the investigation has resulted in the convictions of 19 individuals for federal crimes related to Armstrong's drug trafficking organization.
The conspiracy at the heart of the charges against Armstrong and his accomplices began in approximately April 2012 and continued until October 2013, when a federal grand jury in Montana returned indictments that charged Armstrong and his associates with federal drug trafficking and firearms offenses. In a court document filed prior to Armstrong's sentencing, Thaggard wrote:
By the summer of 2012, the Defendant was living in Sidney, Montana and distributing large amounts of essentially pure methamphetamine through a network of subordinate drug traffickers. The methamphetamine came from the state of Washington. Sometimes the Defendant and his accomplices obtained the drugs in Washington. At other times, they met the source of supply in places in western Montana, then transported the drugs to Sidney. At other times the drugs were delivered directly to Sidney. Some of the members of the conspiracy carried firearms. Others acted as enforcers who collected drug debts."
Michael Cotter, the United States Attorney for the District of Montana, praised the sentence, stating "This defendant and his associates damaged the social fabric of Montana by distributing large amounts of pure methamphetamine in our state. The sentence handed down to Mr. Armstrong today should send a clear message to those who seek to commit similar crimes that such conduct will not be tolerated. With the dismantling of Mr. Armstrong's drug trafficking organization, Montana is a safer place to live."
Because there is no parole in the federal system, Armstrong will have to serve at least 85% of his sentence before he is released from prison.
The case was investigated by the DEA, MDCI, Sidney Police Department, Sweet Grass County Sheriff's Office, Dawson County Sheriff's Office, and the United States Border Patrol.
Kansas City Man Sentenced to Life in Federal Drug Trafficking CaseRead the Press Release
KANSAS CITY, KAN. - A Kansas City man was sentenced Thursday to life in prison in a federal drug trafficking case, U.S. Attorney Barry Grissom said.
Christopher Craig, 32, Kansas City, Mo., pleaded guilty to one count of conspiracy to distribute cocaine, crack cocaine and marijuana, and two counts of using a phone in furtherance of drug trafficking. He admitted that he was part of a drug trafficking ring that operated from January 2006 to December 2012 in Kansas City, Kan.
Prosecutors argued for a longer sentence on the grounds that Craig planned and participated in an attempted robbery on Aug. 14, 2012, that resulted in the shooting death of one of the robbers. Officers were called to Research Medical Center when a shooting victim was dropped off at the emergency room entrance. The victim died of three gunshot wounds to his upper body.
Investigators learned that Craig had planned the robbery. He had taken the victim and another man to a south Kansas City location where a large sum of money and drugs were kept. During the robbery, the target of the robbery shot the victim. Craig was a member of the MOB street gang.
Grissom commended the Kansas City, Kan., Police Department, the Kansas City, Mo., Career Criminal Squad, the FBI, Assistant U.S. Attorney Sheri McCracken and Special Assistant U.S. Attorney Trent Krug for their work on the case.
Justice Department Files Lawsuit Against Louisiana Crane Company Alleging Discrimination Against Work-authorized ImmigrantsRead the Press Release
The Justice Department announced today the filing of a lawsuit with the Executive Office for Immigration Review against Louisiana Crane Company LLC (Louisiana Crane), which is headquartered in Eunice, Louisiana.
The complaint alleges that Louisiana Crane violated the Immigration and Nationality Act’s (INA) anti-discrimination provision by creating hurdles for immigrants during the employment eligibility verification process because of their citizenship status. Specifically, the complaint states that, from at least January 2013 until at least September 2013, Louisiana Crane required employees who it believed to be non-U.S. citizens to present specific documentation for the Form I-9 and/or E-Verify, but allowed believed to be U.S. citizens the flexibility to present a variety of documents. The INA’s anti-discrimination provision prohibits employers from discriminating against people with permission to work in the United States because of their citizenship status.
“The law protects people who have permission to work from facing discriminatory obstacles during employment eligibility verification,” said Molly Moran, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “It is important that all people who have permission to work in the United States face an equal playing field when proving their work authorization.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php , email [email protected] ; or visit OSC’s website at www.justice.gov/crt/about/osc .
Applicants or employees who believe they were subjected to different documentary requirements based on their citizenship status, immigration status, or national origin, or discrimination based on their citizenship status, immigration status, or national origin in hiring, firing, or recruitment or referral for a fee should contact OSC’s worker hotline for assistance.
Gering Man Sentenced for Distributing Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Ralph Moreno, 52, of Gering, Nebraska, was sentenced in the United States District Court at Lincoln, Nebraska, for distributing child pornography. The Honorable John M. Gerrard sentenced Moreno to 72 months imprisonment. There is no parole in the federal prison system. After his release from prison Moreno will begin a 5 year term of supervised release. Moreno will also be required to register as a sex offender.
On October 1, 2013, an Investigator with the Nebraska State Patrol downloaded a video of child pornography from Moreno’s computer. Two days later, five additional videos of child pornography were downloaded from Moreno’s computer. On November 12, 2013, Investigators with the Nebraska State Patrol executed a search warrant at Moreno’s residence. A list of search terms for securing child pornography was found in his bedroom. A forensic review of his computer revealed over 200 videos of child pornography collected over a five year period. The videos depicted numerous prepubescent children. The most common age range depicted was 6-12 years. The videos were graphic and showed children engaged in various sexual acts.
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 Attorney’s 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
Gang Member Sentenced to 54 Years in Prison for Taking Part in Conspiracy That Led to Murders, Shootings, and Other Violence-One Murder Took Place Outside A Funeral in Northwest Washington-Read the Press Release
WASHINGTON – Keir Johnson, 24, a member of a criminal street gang based at 14th and Girard Streets in Northwest Washington, was sentenced today to a 54-year prison term on murder and other charges stemming from a conspiracy to assault, kill, and threaten rivals and obstruct justice.
The sentence, in the Superior Court of the District of Columbia, was announced by U.S. Attorney Ronald C. Machen Jr., Cathy L. Lanier, Chief of the Metropolitan Police Department, and Robert D. MacLean, Acting Chief of the U.S. Park Police.
Three co-defendants -- Robert Givens, 21, Lester Williams, 26, and Marcellus Jackson, 26 – were sentenced in June 2014 to decades in prison for their roles in the crimes.
The men, all from Washington, D.C., were found guilty by a jury in March 2014, following nearly four months of trial. Johnson, Givens, and Williams were found guilty of murder and other offenses. Jackson was found guilty of murder, conspiracy, assault with a dangerous weapon, and related offenses.
The Honorable Lynn Leibovitz sentenced Johnson today. In June, she sentenced Givens to 30 years in prison; Williams to 47 ½ years of incarceration; and Jackson to 38 years.
The 14th and Girard gang, also known as G-Rod, 1-4, and the Cut Crew, was centered in the areas of 14th and Girard and 14th and Fairmont Streets NW. The group was engaged in a longstanding conflict with rival crews, especially ones that were based in the areas of 17th and Euclid Streets NW and the 600 block of Morton Street NW. The gang’s victims included Sean Robinson, 18, who was killed in the parking lot of a school in August 2010, and Jamal Coates, 21, who was killed following a funeral in September 2010.
Givens was found guilty of second-degree murder while armed in the slaying of Mr. Robinson, as well as a charge of assault with a dangerous weapon involving a second victim shot at the scene. He also was found guilty of conspiracy, firearms offenses, and charges that he committed the crimes for the benefit of a criminal street gang.
Johnson and Williams were each found guilty of first-degree murder while armed in the killing of Mr. Coates. They also were found guilty of assault with intent to kill in the shooting of another individual in that attack, as well as assault with a dangerous weapon for firing upon a third person that day. Johnson and Williams also were found guilty of conspiracy, firearms offenses, and charges that they committed the crimes for the benefit of a criminal street gang. Finally, Johnson also was found guilty of a charge of assault with intent to kill while armed stemming from a separate attack in June 2010 in which a man was wounded.
In addition to conspiracy, Jackson was found guilty of second-degree murder in the slaying of Mr. Coates, assault with a dangerous weapon involving an attack against one of the individuals with Mr. Coates, and charges that he committed the offenses for the benefit of a criminal street gang.
According to the government’s evidence, the shootings resulted from a longstanding conflict with rival crews. The government presented evidence of these and other crimes:
June 27, 2010: Johnson chased, shot, and attempted to kill a rival crew member in the parking lot of a gas station in the 3400 block of Georgia Avenue NW.
Aug. 11, 2010: Givens and others committed the murder of Mr. Robinson, who lived in the area of 17th and Euclid Streets, as well as the shooting of two 14-year-olds who were with him while they stood together in the parking lot of a school in the 2600 block of Mozart Street NW.
Sept. 28, 2010: Johnson and Williams committed the murder of Mr. Coates, a rival crew member, near 13th and U Streets NW, during the funeral procession for a young female with family ties to the rival crew. In addition to shooting Mr. Coates, Williams and Johnson shot a second person in the attack and fired upon a third individual. Jackson provided assistance to Johnson and Williams.
After the funeral shooting, the defendants took many steps to attempt to obstruct justice and avoid prosecution, such as trying to find and locate witnesses and in the case of two of the defendants, fleeing to North Carolina.
The men were indicted in December 2011, following an investigation by the Metropolitan Police Department, the U.S. Park Police, and the Drug Enforcement Administration. Two other members of the crew earlier pled guilty to charges stemming from their violent conduct.
In announcing the sentence, U.S. Attorney Machen, MPD Chief Lanier, and Acting U.S. Park Police Chief MacLean thanked those who investigated the case from theMPD, the Park Police, and the DEA. They also expressed appreciation for the assistance provided by the U.S. Marshals Service; the FBI/MPD Safe Streets Task Force; the U.S. Postal Inspection Service; the FBI Cellular Analysis Survey Team; the FBI Digital Forensic and Analysis Section; the U.S. Secret Service Forensic Sciences Division; the District of Columbia Department of Corrections Office of Investigative Services; the District of Columbia Department of Forensic Sciences; the Washington D.C./Baltimore High Intensity Drug Trafficking Area; the Alexandria, Va. Police Department; the Marlboro County, S.C. Sherriff’s Office, and the Miami-Dade County State’s Attorney’s Office. They also acknowledged the assistance of Bruce Budowle, PhD, executive director of the University of North Texas Health Science Center’s Institute of Investigative Genetics.They expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Assistant U.S. Attorneys Sharad Khandelwal and Joseph P. Cooney, who helped secure the indictment; Assistant U.S. Attorney Kacie Weston, who assisted with trial preparation; Assistant U.S. Attorneys Chrisellen Kolb and David Goodhand who assisted with legal analysis; and Michael Ambrosino, Special Counsel for DNA and Forensic Evidence Litigation. In addition, they acknowledged the work of Legal Assistants Kendra Johnson, Marian Russell, Sharon Newman, Kwasi Fields, Philip Aronson, and Benjamin Kagan-Guthrie; former Intelligence Analyst Lawrence Grasso; Intelligence Analyst Zachary McMenamin; Information Technology Specialist Leif Hickling; Victim/Witness Security Specialists Michael Hailey, M. Laverne Forrest, Debra Cannon, Tanya Via, and Katina Adams; Victim/Witness Advocate Marcia Rinker; and Criminal Investigators Durand Odom, Tommy Miller, Mark Crawford, and Christopher Brophy.
Finally, they expressed appreciation for the work of Assistant U.S. Attorneys Todd Gee, Emily Miller, Laura Bach, and Deborah Sines, who prosecuted the case.
14-188Fourth Grade Teacher Sentenced to 10 Years for Enticing and Coercing A 15-Year-Old Girl During Sexually Explicit Online ChatsRead the Press Release
ALEXANDRIA, Va. – A fourth grade teacher from Charlottesville, Virginia was sentenced today to ten years in prison, followed by ten years of supervised release, for enticing and coercing a 15-year-old girl to engage in sexually explicit online chats.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Timothy A. Gallagher, Acting Assistant Director in Charge of the FBI’s Washington Field Office; Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police; Timothy J. Longo, Charlottesville Chief of Police; and Stephan M. Hudson, Prince William County Chief of Police, made the announcement after sentencing by U.S. District Judge Claude M. Hilton.
Corey Schock, 44, pleaded guilty on June 12, 2014 to online coercion and enticement of a minor. According to court documents, Schock engaged in sexually explicit online chats with a 15-year-old female who lived in Woodbridge, Virginia using the Kik Interactive, Skype, and SnapChat programs. In those chats, Schock sent the girl several sexually explicit pictures of himself, and he requested that she send him sexually explicit pictures. In response, the girl sent Schock pictures and videos of herself engaging in sexually explicit behavior. Schock and the girl also discussed meeting in person to engage in sexual activity, and both specifically referred to their respective ages during online chats.
According to court records and proceedings, Schock engaged in similar conduct over a two-year period with numerous underage girls, 18 of whom have been positively identified by the FBI to date.
This case was investigated by the FBI’s Washington Field Office and the Fairfax County, Charlottesville, and Prince William County police departments. Assistant U.S. Attorney Matt J. Gardner is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-196.
Former Pepperell Man Charged with Bankruptcy FraudRead the Press Release
Boston – A former Pepperell man was charged with concealing $3 – $4 million in bankruptcy filings.
Cyril Gordon Lunn, 66, formerly of Pepperell, Mass., was charged in an indictment with concealing assets from his bankruptcy creditors and making a false statement in one of his bankruptcy schedules.
The case was originally indicted in September 2006, but it was unsealed today after Lunn was arrested by Canadian authorities.
According to the indictment, Lunn filed a bankruptcy petition in October 2001 in which he failed to disclose that he owned approximately $3 – $4 million in cash. From 1998 through September 2001, Lunn transferred the cash from the United States to Canada, and deposited some or all of the funds in safe deposit boxes in Canada. In May 2004, Lunn filed a civil suit in Canada in which he submitted affidavits and testified under oath concerning his ownership of approximately $3 – $4 million and the transfer of those funds from the United States to Canada in the years prior to 2002.
Lunn is also charged with making a false statement in one of his bankruptcy filings by falsely stating he had closed all safe deposit boxes by September 2001, when in fact. Lunn had failed to disclose a safe deposit box he had opened at the Granite Bank in New Hampshire, and which Lunn continued to access after the bankruptcy filing.
The charging statute provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of the greater of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit. The case was referred to the United States Attorney’s Office by the U.S. Trustee’s Office in Boston and Worcester.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Paintsville Doctor Admits Role in Pill Mill That Illegally Dispensed 25,000 Prescription PillsRead the Press Release
LEXINGTON, KY -A former doctor in Paintsville, Ky., was sentenced to 48 months in prison on Thursday, for his role in a conspiracy that was responsible for illegally distributing more than 25,000 prescription pills in Eastern Kentucky.
U.S. District Judge Amul Thapar sentenced Rano Bofill, 72, for conspiracy to unlawfully dispense Oxycodone. Judge Thapar also ordered that Bofill pay $15,000 in community restitution to the Commonwealth of Kentucky. Under federal law, Bofill will have to serve at least 85 percent of his prison sentence.
According to court documents, from January 2009 until December 2012, Bofill conspired with Tammy Cantrell and Shelby Lackey, owners of Care More Pain Management, LLC, located in Johnson County, to distribute thousands of Oxycodone pills to patients without a legitimate medical purpose.
Bofill acknowledged that he wrote prescriptions for numerous patients after performing little to no examination and, in some instances, he even signed off on prescriptions without actually ever seeing the patients. Patients who visited the clinic paid $200 for the initial visit and $185 for subsequent visits; all fees were paid in cash. Bofill admitted he saw approximately 25 patients per day and was paid between $5,000 and $6,000 per week.
For their part in the conspiracy, Lackey and Cantrell received sentences of 97 and 108 months respectively. At the time of their guilty pleas, in April 2013, Cantrell and Lackey were the first pain clinic owners in the Eastern District of Kentucky to have federal convictions for illegally distributing prescription drugs. Another doctor at the clinic, Richard Albert, pleaded guilty to a conspiracy charge in July 2012; he was sentenced to 75 months in prison. Albert, Cantrell, and Lackey have collectively agreed to forfeit approximately $, 128,206 as proceeds of the conspiracy.
The investigation into this case started when detectives with the Kentucky Attorney General’s Office received complaints, from local law enforcement, that Care More was seeing a remarkably high volume of patients. Court records state that patient lines at Care More stretched into the parking lot.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; James V. Allen, Acting Special Agent in Charge, DEA; and Jack Conway, Kentucky Attorney General, jointly announced today’s plea.
The investigation was conducted by the Kentucky Attorney General’s Office, the DEA, and the Paintsville Police Department. Assistant U.S. Attorney Roger West prosecuted this case on behalf of the federal government.
Former Mutual Benefits Corporation Head Sentenced to 20 Years in Prison for His Role in $1 Billion MBC SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), announce that Joel Steinger, a/k/a “Joel Steiner,” (Steinger) was sentenced to 20 years in prison, three years of supervised release, and ordered to forfeit $15 million by U.S. District Judge Robert N. Scola, Jr. A restitution hearing is scheduled for November 24, 2014. .
Steinger previously pled guilty to conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. §1349, as a result of his scheme to defraud investors in Mutual Benefits Corporation (MBC), which marketed viatical and life settlements.
Steinger is the final defendant to be convicted out of 13 charged as a result of the MBC scheme, which defrauded approximately 30,000 victims. As the de facto head of MBC, Steinger, along with conspirators Steven Steiner, a/k/a Steven Steinger, Michael McNerney, and Anthony M. Livoti, Jr., Esq., and others, raised more than $1.25 billion from investors before being shut down by federal regulators in May 2004. By the time charges were filed in December, 2009, investor losses were estimated to amount to more than $800 million.
According to the evidence presented in a related trial and summarized during Steinger’s guilty plea, from approximately 1994 to May 2004, MBC purchased life insurance policies from persons suffering from AIDS, the chronically ill, and elderly persons. Having purchased the life insurance policies, MBC sold fractionalized interests in insurance policy death benefits, known as “viatical settlements,” to approximately 30,000 investors. MBC solicited the investments through an international network of sales agents. In promotional materials, MBC told investors that its viatical settlements offered a fixed rate of return with low risk, and that investors’ principal and returns were paid by the insurance companies. Under Steinger’s direction, MBC misrepresented various important facts relating to its viatical settlements, including, for example, the estimated life expectancies of the insured persons, the supposedly independent role of doctors determining those life expectancies, MBC’s fraudulent methods used to acquire life insurance policies, the risks associated with certain policies, the payment of premiums, and the source of funds used to pay investors.
Steinger, already a convicted felon at the time of the MBC fraud, hid behind a figurehead company president to conceal a criminal and disciplinary history that otherwise would have prevented the company from obtaining a license to conduct business in Florida and elsewhere.
Evidence supporting his conviction also established that new investor money was used to pay premiums on life insurance policies purchased by earlier investors and to pay investors who requested their money back. In essence, the evidence demonstrated that Steinger and his co-conspirators were operating a Ponzi-like scheme, using new investor money to pay for earlier investor obligations, and that money from new investors was continuously required to prevent the MBC Ponzi-scheme from collapsing, which, ultimately, it did.
Co-defendant Steiner was also a founding principal of MBC, was actively involved in MBC’s marketing and promotional activities, and encouraged investors to buy MBC’s investments. On September 3, 2013, Steiner pled guilty to charges in the same case. Steiner was also found guilty by a federal jury in a related case, United States v. Steven Steiner, No. 11-20578-CR-Williams in connection with money laundering and obstruction of justice related to the use and concealment of more than $15 million dollars in proceeds derived from the MBC fraud. Steiner was sentenced to a total of 15 years in prison.
Co-defendant Livoti, Jr. was convicted for his role in the MBC fraud on December 4, 2013, after a jury trial. Livoti was sentenced to 10 years in prison.
Today’s sentencing also resolved Steinger’s more recent Case No. 12-CR-20123-Scola, charging conspiracy to commit mail and wire fraud against health insurers, where Steinger, his brother Steven Steiner, and his brother’s life partner, Henry Fecker, made false claims of employment in order to secure group health coverage. Steinger received a total sentence of 20 years, followed by three years of supervised release to run concurrently with the sentence imposed in the MBC case. Mr. Ferrer commended the investigative efforts of the Internal Revenue Service, Criminal Investigation. This case was prosecuted by Assistant U.S. Attorneys Jerrob Duffy, Dwayne Williams and Alison W. Lehr.
Mr. Ferrer commended the investigative efforts of the FBI and the Miami Regional Office of the Securities and Exchange Commission, which previously brought a civil action against MBC and its principals. The MBC case is being prosecuted by Assistant U.S. Attorneys Karen Rochlin and Alison W. Lehr.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Hospital Employee Pleads Guilty to Criminal HIPPA ChargesRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas — U.S. Attorney John M. Bales announced today that a former employee of an East Texas hospital has pleaded guilty to criminal HIPAA charges in the Eastern District of Texas.
Joshua Hippler, 30, formerly of Longview, Texas, was indicted on March 26, 2014, on charges of Wrongful Disclosure of Individually Identifiable Health Information. Hippler pleaded guilty on August 28, 2014 during a hearing before United States Magistrate Judge John D. Love.
The indictment alleged that from December 1, 2012, through January 14, 2013, Hippler, who was then an employee of a covered entity under HIPAA, obtained protected health information with the intent to use the information for personal gain.
Hippler faces up to ten years in federal prison. A sentencing date has not been set.
The investigation leading to the charges was conducted by agents from the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG) and the U.S. Postal Inspection Service. Assistant United States Attorney Nathaniel C. Kummerfeld is prosecuting the case.
Former Head of Suriname’s Counter-Terrorism Unit Pleads Guilty in Manhattan Federal Court to Attempting to Support Hezbollah, Narcotics Trafficking, and Firearms OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DINO BOUTERSE, who is the son of the President of Suriname and reportedly served previously as the head of Suriname’s Counter-Terrorism Unit, pled guilty today in Manhattan federal court in connection with his attempt to provide material support and resources to Hezbollah, a designated terrorist organization, along with narcotics trafficking and firearms offenses. BOUTERSE, who was arrested in Panama on August 29, 2013, and arrived in the United States on August 30, 2013, pled guilty before U.S. District Judge Shira A. Scheindlin.
Manhattan U.S. Attorney Preet Bharara said: “Today, a supporter of terrorism, who was in a position of national power in Suriname and presented himself as an opponent of terrorism, has pled guilty. In addition to conspiring to import cocaine into the United States, Dino Bouterse has acknowledged that he attempted to provide material support to Hezbollah. Now he faces, at a minimum, 15 years in prison.”
According to the Indictment, other documents filed in Manhattan federal court, and statements made at today’s guilty plea:
In 2013, BOUTERSE used his position to assist individuals he believed were members of Hezbollah who intended to conduct terrorist attacks against American interests. In exchange for a multimillion-dollar pay-off, BOUTERSE agreed to allow large numbers of purported Hezbollah operatives to use Suriname as a permanent base for, among other things, attacks on American targets. In furtherance of his efforts to assist Hezbollah, BOUTERSE supplied a false Surinamese passport to a purported Hezbollah operative, who in actuality was an undercover law enforcement officer, for the purpose of clandestine travel, including travel to the United States, began determining which heavy weapons he could provide to Hezbollah, and indicated how Hezbollah operatives, supplied with a Surinamese cover story, could enter the United States.
In June 2013, BOUTERSE and his co-defendant, Edmund Quincy Muntslag, met in Suriname with DEA confidential sources (the “CSs”), in a local government office, to discuss importing cocaine into the United States using commercial airline flights. During the meeting, BOUTERSE showed the CSs a rocket launcher and a kilogram of cocaine.
Approximately one month later, BOUTERSE and Muntslag worked to provide transportation and security for cocaine being sent through Suriname to the United States. As a test run, BOUTERSE and Muntslag sent 10 kilograms of cocaine on a commercial flight departing from Suriname. BOUTERSE personally verified the arrangements for the 10-kilogram cocaine shipment in a text message. The cocaine was intercepted by law enforcement officials after it departed Suriname.
In July 2013, BOUTERSE met with one of the CSs to discuss opening Suriname to the CSs’ purported Hezbollah associates.
Later that month, BOUTERSE met in Europe with one of the CSs and with two other men who purported to be associated with Hezbollah. During this meeting, BOUTERSE discussed initially hosting 30 to 60 Hezbollah members in Suriname for training and operations. He also indicated that he wanted a Hezbollah cell in Suriname, in part, to act as a personal armed force. BOUTERSE confirmed his understanding that the purported Hezbollah operatives would operate in South America against American targets, and he agreed to supply Surinamese passports to the operatives—and to assist with their applications for visas to travel from South America into the United States. In addition, in response to a request for surface-to-air missiles and rocket-propelled grenades, BOUTERSE stated that he would need “two months” and that he would provide a list of what he could supply. Finally, at the July 2013 meeting in Europe, BOUTERSE agreed to create a false Surinamese passport for one of the purported Hezbollah operatives, so that BOUTERSE and the Hezbollah operative could travel to Suriname to inspect the facilities that BOUTERSE had agreed to prepare for the Hezbollah contingent.
At a subsequent meeting in August 2013, BOUTERSE delivered a Surinamese passport with false identifying information to a purported Hezbollah operative. As had been discussed at the July 2013 meeting in Europe, the purported Hezbollah operative was to use the fraudulent passport to travel to Suriname. BOUTERSE indicated that everything was ready in Suriname for the arrival of the purported Hezbollah members, and that some “toys,” or weapons, would be available for inspection.
Muntslag was arrested on August 29, 2013, in Trinidad and Tobago, and is pending extradition to the United States to face a narcotics importation charge in the Indictment.
BOUTERSE, 41, pled guilty to one count of attempting to provide material support to Hezbollah, a designated foreign terrorist organization, one count of conspiring to import cocaine into the United States, and one count of carrying a firearm in connection with the conspiracy to import cocaine. Those charges carry a maximum term in prison of life, and a mandatory minimum term in prison of 15 years.
The charge against the remaining defendant, Edmund Quincy Muntslag, is merely an allegation, and he is presumed innocent unless and until proven guilty.
Mr. Bharara praised the outstanding efforts of the Special Operations Division of the Drug Enforcement Administration (“DEA”). Mr. Bharara also thanked the DEA’s Miami Field Division, Panama City Country Office, Port-of-Spain Country Office, and Bogota Country Office; the Government of the Republic of Panama; and the U.S. Department of Justice’s Office of International Affairs and its National Security Division.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael D. Lockard, Adam Fee, Michael Ferrara, and Edward Y. Kim are in charge of the prosecution.
U.S. v. Dino Bouterse S2 Indictment
Former CFO of Rothstein, Rosenfeldt and Adler, P.A. Sentenced for Conspiracy to Launder Money and to Defraud A Financial InstitutionRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Irene Shannon, formerly known as Irene Stay, 50, of Miami, was sentenced today in Miami by U.S. District Judge Ursula Ungaro to five years in prison, to be followed by two years of supervised release.
On May 21, 2014, Shannon pled guilty to conspiracy to commit money laundering and bank fraud, in violation of Title 18, United States Code, Section 371, through the operation of the former Fort Lauderdale law firm of Rothstein, Rosenfeldt and Adler, P.A. (RRA). Shannon was the Chief Financial Officer of RRA. In 2009, it was discovered that RRA was being utilized by its Chairman and Chief Executive Officer, Scott W. Rothstein, to commit a massive Ponzi scheme stemming from the sale of fictitious confidential settlements.
When she entered her guilty plea, Shannon admitted that she oversaw the accounting functions of RRA, including the deposits and withdrawals made by RRA and Rothstein at TD Bank and other financial institutions. In furtherance of the Ponzi scheme, Shannon transferred hundreds of millions of dollars obtained from investors to pay prior investors in the scheme and to supplement and support the operation and activities of RRA, among other purposes. The defendant further admitted that she was well aware that hundreds of millions of dollars were not being held in trust accounts for investors, contrary to what those investors had been told, and that the funds were instead being disbursed to further Rothstein’s fraudulent scheme. The defendant also admitted that she utilized her position to float checks between and among certain bank accounts maintained by RRA in a form of bank fraud commonly known as “check kiting.”
Mr. Ferrer commended the investigative efforts of the IRS-CI and FBI. This case is being prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Bank Employee Charged with Misapplication of Bank FundsRead the Press Release
PHILADELPHIA - Lynsey H. Haslip, formerly “Lynsey H. Dabback,” 32, of Pottstown, Pennsylvania, was charged today by information with misapplication of bank funds by an employee, announced United States Attorney Zane David Memeger. The information alleges that in 2009 Haslip, while employed as an Assistant Branch Manager at PNC Bank in West Chester, Pennsylvania, misapplied a total of $172,100 from bank customers’ accounts.
According to the information, between January and May 2009, Haslip performed approximately 12 unauthorized withdrawals, debits, and redemptions from the accounts of seven different PNC Bank customers without the customers’ knowledge or consent. Haslip used the stolen funds to issue cashier’s checks to, and make deposits to the accounts of, other PNC Bank customers. Haslip told the recipient customers that they had received PNC Bank loans, when she knew that they had not been approved for any such loans by the bank.
If convicted, the defendant faces a maximum possible sentence of 30 years in prison, five years of supervised release, a fine of up to $1 million, a $100 special assessment, and an order to pay full restitution.
The case was investigated by the United States Secret Service and is being prosecuted by Assistant United States Attorney Nancy E. Potts.
Click here to view the indictment
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Arthrocare Executives Sentenced for Orchestrating $750 Million Securities Fraud SchemeRead the Press Release
The former chief executive officer (CEO) of ArthroCare Corporation was sentenced to serve 20 years in prison, and the former chief financial officer (CFO) was sentenced to serve 10 years in prison today for their leading roles in a $750 million securities fraud scheme. Two other former senior vice presidents of ArthroCare were also sentenced to prison terms for their roles in the scheme.
Principal Deputy Assistant Attorney General Marshall L. Miller of the Department of Justice’s Criminal Division and Special Agent in Charge Christopher H. Combs of the FBI’s San Antonio Field Office made the announcement. U.S. District Judge Sam Sparks in the Western District of Texas imposed the sentences.
“Earlier today, in federal court in Austin, Texas, we witnessed the culmination of an epic tale of greed,” said Principal Deputy Assistant Attorney General Miller. “The CEO, CFO and two vice presidents of ArthroCare sentenced today ran a successful business, but they wanted more. Their greed led to fraud, and their fraud caused investors to lose hundreds of millions of dollars. At the Criminal Division of the Department of Justice, we are committed to prosecuting individuals who commit crimes to make money, whether they do so on street corners or in corner offices. The aggressive pursuit of corporate executives who commit fraud is at the core of our mission to pursue justice and protect the American public.”
“This scheme of betrayal and deceit was carried out by the defendants without regard to the deep-reaching and irreparable harm their actions caused to thousands of victims, here in Texas, and throughout the United States,” said FBI Special Agent in Charge Combs. “While it is important to recognize the financial losses sustained by all victims, which includes individual investors and institutional investment firms, many of the victims will never recover from the financial ruin caused by the defendants’ greed. Many of the victims worked hard their entire lives, saving money for retirement or their children’s’ college funds. Some were already living on fixed incomes and are now struggling to make ends meet. The FBI will continue to aggressively work to uncover these fraud schemes in an effort to prevent future victimization and to protect the integrity of the securities and commodities market.”
On June 2, 2014, former ArthroCare’s CEO Michael Baker, 55, and former CFO Michael Gluk, 56, were convicted by a jury of wire fraud, securities fraud, and conspiracy to commit wire and securities fraud; Baker was also convicted of making false statements. On June 24, 2013, John Raffle, 46, the former Vice President of Strategic Business Units, pleaded guilty to conspiracy to commit securities, mail and wire fraud, and two false statements charges. On May 9, 2013, David Applegate, 55, the former Senior Vice President of the Spine Division, pleaded guilty to conspiracy to commit securities, mail and wire fraud, and a false statements charge. At sentencing, the court found that investors lost approximately $756 million as a result of the defendants’ scheme to artificially inflate the share price of ArthroCare stock through sham transactions.
According to court documents, between 2005 and 2009, Baker, Gluk, Raffle and Applegate executed a scheme to artificially inflate sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors. Products were shipped to distributors at quarter end based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders. ArthroCare then fraudulently reported these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to appear to meet or exceed internal and external earnings forecasts. ArthroCare’s distributors agreed to accept these shipments of millions of dollars of excess inventory in exchange for lucrative concessions from ArthroCare, such as upfront cash commissions, extended payment terms, and the ability to return products. In some cases, like that of ArthroCare’s largest distributor, DiscoCare, the defendants agreed ArthroCare would acquire the distributor and the inventory so that the distributor would not have to pay ArthroCare for the products at all.
Between December 2005 and February 2009, ArthroCare’s shareholders held more than 25 million shares of ArthroCare stock. On July 21, 2008, after ArthroCare announced publicly that it would be restating its previously reported financial results to reflect the results of an internal investigation and account for the defendants’ fraud, the price of ArthroCare shares dropped from $40.03 to $23.21 per share. On Dec.19, 2008, ArthroCare again announced publicly that it had identified more accounting errors and possible irregularities related to the defendants’ fraud. That day, the price of ArthroCare shares dropped from approximately $16.23 to approximately $5.92 per share.
In addition to the underlying conduct, Baker was convicted of lying to the U.S. Securities and Exchange Commission during its investigation of the conduct. The court further found, as part of sentencing, that Baker and Gluk each lied under oath during their trial testimony, in which they attempted to escape responsibility for their actions.
In addition to their prison terms, Baker and Gluk were sentenced to serve five years of supervised release. In addition, the court ordered Gluk and Baker to forfeit $22,165,030, the amount of their profits from the scheme.
John Raffle was sentenced to serve 80 months in prison followed by three years of supervised release. David Applegate was sentenced to serve 60 months in prison followed by three years of supervised release.
The case was investigated by the FBI’s San Antonio Field Office. The case was prosecuted by Deputy Chief Benjamin D. Singer and Trial Attorneys Henry P. Van Dyck and William S.W. Chang of the Criminal Division’s Fraud Section. The Department recognizes the substantial assistance of the Criminal Division’s Asset Forfeiture and Money Laundering Section and the U.S. Securities and Exchange Commission, as well as the critical role of the U.S. Attorney’s Office for the Western District of Texas, which provided invaluable support to the prosecution team during all phases of the litigation.District Man Sentenced to Eight-Year Prison Term for Armed Home Invasion in Northeast Washington-Victims Were Held at Gunpoint by Masked Men While Their Home Was Ransacked-Read the Press Release
WASHINGTON – Andre Townsend, 20, of Washington, D.C., was sentenced today to an eight-year prison term for his role in an armed home invasion that took place last fall in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Townsend pled guilty in March 2014, in the Superior Court of the District of Columbia, to charges of armed robbery, first-degree burglary, tampering with physical evidence, and unlawful entry. He was sentenced by the Honorable William M. Jackson. Upon completion of his prison term, Townsend will be placed on five years of supervised release.
According to the government’s evidence, Townsend and his accomplices, who were wearing ski masks, carried out the crimes at about 2:30 a.m. on Oct. 3, 2013. They saw a taxicab dropping off the victim in the 5700 block of Blaine Street NE. They followed the victim into his home. Once inside, they held the victim, the victim’s fiancé, and the victim’s mother at gunpoint for approximately 40 minutes while they ransacked the home and stole various items. Those items included cash, electronics, and the fiancé’s engagement ring, which the fiancé unsuccessfully tried to hide from the defendants during the burglary.
Townsend and the other assailants left the home in two vehicles that belonged to the victims and deposited the proceeds from the burglary inside a vacant home on Raleigh Street SE. Worried that the police might recover fingerprints from the vehicles they had stolen, the men then drove the vehicles into a field adjacent to an elementary school on Alabama Avenue SE, set the vehicles on fire, and retreated on foot to the vacant home on Raleigh Street SE.
One of the accomplices was wearing a GPS tracking device in connection with his supervised release in an unrelated robbery case. Members of the Metropolitan Police Department (MPD) used data generated by that device to track the defendants to the home on Raleigh Street SE. The police barricaded the residence and ultimately arrested all of the defendants in or near the residence. The police also recovered most of the proceeds of the burglary, along with several ski masks, from the Raleigh Street home. The police did not recover the engagement ring.
A co-defendant in the case, Ricardo Blakeney, 21, of Washington, D.C., has pled guilty to second-degree burglary and is to be sentenced Oct. 17, 2014. A third co-defendant, Darnell Mason, 22, also of Washington, D.C., is scheduled for trial on Nov. 19, 2014.
In announcing the sentence, U.S. Attorney Machen praised the work of the detectives and officers who investigated the case for the Metropolitan Police Department. He also acknowledged the efforts of those who worked on the case for the U.S. Attorney’s Office, including Paralegal Specialists Richard Cheatham and Antoinette Sakamsa. Finally, U.S. Attorney Machen acknowledged the efforts of Assistant U.S. Attorneys Ben Schrader and Karen Seifert, who investigated and prosecuted the case.
14-190District Man Sentenced to 12 Years in Prison for Attacking Co-Worker with Sledgehammer at Auto Body ShopDefendant Struck Victim Several Times in the HeadRead the Press Release
WASHINGTON – Abdul Ewumi, 39, of Washington, D.C., was sentenced today to a 12-year prison term for attacking a co-worker with a sledgehammer last year at an auto body shop in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Ewumi was found guilty by a jury in July 2014, following a trial in the Superior Court of the District of Columbia, of assault with intent to kill while armed, aggravated assault while armed, and related offenses. He was sentenced by the Honorable William M. Jackson. Upon completion of his prison term, Ewumi will be placed on five years of supervised release.
According to the government’s evidence, the victim and Ewumi worked in early 2013 as mechanics at an auto body shop on Benning Road NE. At Ewumi’s request, the victim repaired the transmission on a car. The owner of the car later returned the vehicle to Ewumi, complaining that, although the transmission was working properly, the heating system no longer worked.
On April 1, 2013, Ewumi confronted the victim about the heating system issue. The victim denied responsibility. Ewumi became enraged, grabbed the victim by his head, pulled him across the exposed engine of a car the victim was working on, and began punching him in the back of the head. The shop manager, who was working in a nearby office, heard the commotion and intervened by separating the men.
Ewumi nevertheless continued to threaten the victim. In an effort to dissuade Ewumi from antagonizing him, the victim threw a screwdriver across the garage, further enraging the defendant. Ewumi then retrieved his hand-held sledgehammer from his toolbox and ran towards the victim, shouting, “I’m gonna’ kill you!” Ewumi struck the victim in the head four to five times, leaving him with cuts to his head, a broken bone in his face, and more than $50,000 in medical bills. Another mechanic who was working outside the shop heard the second assault and intervened. The police arrived shortly thereafter and arrested the defendant.
In announcing the sentence, U.S. Attorney Machen praised the work of the detectives and officers who investigated the case for the Metropolitan Police Department. He also acknowledged the efforts of those who worked on the case for the U.S. Attorney’s Office, including Paralegal Specialists Richard Cheatham and Antoinette Sakamsa. Finally, U.S. Attorney Machen acknowledged the efforts of Assistant U.S. Attorney Ben Schrader, who investigated and prosecuted the case.
14-189Detroit Gang Leader Convicted for Planning Armed Robbery by Gang MembersRead the Press Release
A leader of a street gang that operated on the east side of Detroit was found guilty today by a federal jury of aiding and abetting an armed robbery.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan and Special Agent in Charge Steven Bogdalek of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in Detroit made the announcement.
Christopher LaJuan Tibbs, 39, was convicted after a three-day jury trial before U.S. District Judge Bernard A. Friedman.
The evidence at trial established that Tibbs, also known as Chief Fatah, was the leader of the Michigan branch of the Mafia Insane Vice Lords – a violent street gang that operated primarily on the east side of Detroit. The Mafia Insane Vice Lords was a local faction of the national Vice Lord gang that originated in Chicago. Tibbs helped plan an armed robbery of a Little Caesars restaurant in Redford, Michigan, in September 2013. Tibbs sent subordinate members of the gang to commit the crime and took a majority of the proceeds from the robbery.
The case was investigated by ATF, with assistance from the Redford, Michigan, Police Department, the Detroit Police Department, and the Chicago Police Department. The case was prosecuted by Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant United States Attorney Louis Gabel of the Eastern District of Michigan.Detroit Gang Leader Convicted for Planning Armed Robbery by Gang MembersRead the Press Release
A leader of a street gang that operated on the east side of Detroit was found guilty today of aiding and abetting an armed robbery, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Leslie R. Caldwell, Assistant Attorney General for the Justice Department’s Criminal Division, and Steven Bogdalek, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives in Detroit.
Christopher LaJuan Tibbs, 39, was convicted after a three-day trial before U.S. District Judge Bernard A. Friedman.The evidence at trial established that Tibbs, also known as Chief Fatah, was the leader of the Michigan branch of the Mafia Insane Vice Lords -- a violent street gang that operated primarily on the east side of Detroit. The Mafia Insane Vice Lords was a local faction of the national Vice Lord gang that originated in Chicago. Tibbs helped plan an armed robbery of a Little Caesars restaurant in Redford, Michigan, in September 2013. Tibbs sent subordinate members of the gang to commit the crime, and took a majority of the proceeds from the robbery.
The trial marked the first time that the criminal street gang enhancement has been charged in the Eastern District of Michigan. Because the jury found that Tibbs committed the crime to advance the criminal activities of his gang, the maximum penalty for aiding and abetting the robbery increased from 20 to 30 years in prison. Tibbs faces an additional mandatory minimum sentence of seven years for his conviction for aiding and abetting the use of a firearm during the robbery. The seven-year sentence must be served consecutively to the sentence that Tibbs receives for aiding and abetting the robbery.
“This conviction, utilizing a novel legal theory, is an example of the way we are using all available resources to tackle gang violence in our neighborhoods,” McQuade said. “We are working diligently to prevent violent crime, but when a serious crime like this one occurs, we will prosecute the defendants with the full force of the law.”
The case was investigated by ATF, with assistance from the Redford Police Department, Detroit Police Department, and Chicago Police Department. The case was prosecuted by Assistant United States Attorney Louis Gabel and Trial Attorney Joseph Wheatley for the Criminal Division’s Organized Crime and Gang Section.
Defendant Charged in Investment Scam Yielding Millions of Dollars from Investors – And Miami Heat TicketsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Haider Zafar, 36, formerly of Miami-Dade County, has been charged with five counts of wire fraud in connection with an investment scam that yielded millions of dollars from investors and Miami Heat premium ticket package.
If convicted, Zafar faces a maximum penalty of 20 years in prison on each wire fraud count.
According to the indictment, Zafar would introduce and portray himself as Haider Zafar Haswhani, a member of a wealthy and influential Pakistani family that operated several hotels, including the Marriott Hotel bombed in Islamabad, Pakistan, textile plants and oil businesses. He claimed he lived in a penthouse in The Essex house in New York, but also had residences at The Setai, the Mondrian, and 10 Museum Park, across the street from the American Airlines Arena.
In approximately October of 2012, Zafar approached a Miami Heat sales executive and said he wanted to purchase a premium three-season ticket package, which would cost $1,055,000, along with other items related to the Miami Heat and games played at the American Airlines Arena. He was provided the package in anticipation of later payment.
Shortly thereafter, and using this same identity, the indictment alleges Zafar obtained a loan and millions of dollars from investors wanting to invest in an investment opportunity he proposed to them. Zafar, according to the indictment, never invested anything, and instead used the money provided for personal expenses and to pay a portion of what was owed for the Miami Heat tickets.
Though at the time of this offense Zafar was living in Miami-Dade County, Zafar is presently incarcerated in Ohio awaiting sentencing on federal fraud charges there.
Mr. Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorney Luis M. Pérez.
An indictment is only an accusation and a defendant is presumed innocent until and unless proven guilty.
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.
Court Approves Police Reform Agreement in Portland, OregonRead the Press Release
Today, the United States won court approval of a settlement agreement to reform the ways in which the Portland Oregon Police Bureau (“PPB”) interacts with individuals with actual or perceived mental illness. The agreement was entered jointly by the United States and the city of Portland, Oregon, with the approval of the Albina Ministerial Alliance Coalition for Justice and Police Reform (“AMA Coalition”) and Portland Police Association (“PPA”). The agreement addresses constitutional claims in a civil action filed by the United States pursuant to the Violent Crime Control and Law Enforcement Act of 1994. In today’s order, the court approved the agreement with the requirement that the parties appear for periodic hearings to provide the court progress on implementation of the agreement.
The agreement requires changes—many of which PPB has already begun to implement—in PPB’s policy, training, supervisory oversight, community-based mental health services, crisis intervention, employee information systems, officer accountability and community engagement and oversight. The agreement also calls for innovative new mechanisms for ongoing community involvement in the implementation of reforms. In addition, the agreement establishes an independent compliance officer and community liaison (“COCL”), who will be responsible for synthesizing data related to PPB’s use of force, reporting to the city council, the Justice Department and the public and gathering input from the public related to PPB’s compliance with the agreement. Finally, the agreement lays the framework for a community oversight advisory board (“COAB”), which will be a crucial mechanism for civil engagement in the reform process.
“We are committed to continuing to work with our partners in the community throughout the reform process to ensure full implementation of the settlement agreement,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “We applaud the city’s efforts to implement portions of the settlement agreement during the pendency of the litigation. We are pleased to provide the court information about reforms through ongoing periodic hearings. We are also appreciative of the continued collaboration with the AMA Coalition and the participation of the PPA to resolve these issues to enable the entry of the settlement agreement. We look forward to the positive changes that these civil rights reforms will bring about for the people of Portland.”
“Today’s decision is the culmination of significant work on the part of all parties to reach such a groundbreaking resolution for the citizens of Portland ,” said U.S. Attorney Amanda Marshall for the District of Oregon. “We are very grateful to the court for entering this order, and look forward to continued collaboration with the city of Portland, the Portland Police Bureau, the Portland Police Association, the Albina Ministerial Alliance Coalition for Justice and Police Reform , and all citizens of Portland to ensure the letter and the spirit of this agreement are upheld.”
The United States’ complaint followed an investigation, launched on June 8, 2011, and conducted by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the District of Oregon. The investigation focused on whether PPB engages in unconstitutional or unlawful policing through the use of excessive force, with a specific focus on the use of force against people with actual or perceived mental illness or in mental health crisis.
In a September 2012 findings letter detailing the outcome of the 14-month investigation, the Justice Department found that most uses of force by PPB officers were lawful and reasonable, but it also found reasonable cause to believe that PPB engages in a pattern or practice of excessive force, in violation of the Fourth Amendment of the U.S. Constitution and the Violent Crime Control and Law Enforcement Act of 1994, in certain contexts. Following the release of the findings letter, the United States and the city engaged in settlement negotiations resulting in the settlement agreement, which the city council voted to approve. The city fully cooperated with the United States throughout its investigation and was eager to address problems identified in the United States’ findings letter regarding Portland Police Bureau’s policies, practices, training and supervision through entry of the settlement agreement.
On Dec. 17, 2012, the United States initiated a lawsuit against the city and, with the city’s cooperation, concurrently filed a joint motion asking the court to approve the negotiated settlement agreement and conditionally dismiss the case. Specifically, the United States’ complaint alleged that PPB engages in a pattern or practice of using excessive force on individuals with actual or perceived mental illness by: (1) too frequently using a higher level of force than necessary; (2) using electronic control weapons (“ECWs”), commonly referred to as “Tasers,” in circumstances when such force is not justified, or deploying ECWs more times than necessary on an individual; and (3) using a higher degree of force than justified for low-level offenses.
Both PPA and the AMA Coalition subsequently moved to intervene in the suit, seeking to join the case as parties and objecting to the proposed settlement agreement. The court partially granted PPA’s motion to intervene and granted the AMA Coalition enhanced amicus status, allowing the AMA Coalition to participate in the litigation. The court then ordered all parties to mediation to attempt to resolve PPA’s and the AMA Coalition’s objections to the settlement agreement. Such mediation efforts have resulted in a memorandum of understanding with PPA and a separate agreement previously reached with the AMA Coalition.
Following a fairness hearing on the settlement agreement, the court previously found that the settlement agreement is substantively fair, reasonable and adequate. The court found, however, that it needed a procedure to receive information on the city’s implementation of reforms on at least an annual basis. In today’s ruling, the court required the parties and COCL to file quarterly reports with the court and required the parties to appear for periodic hearings to describe to the court the progress being made toward achieving substantial compliance with all provisions of the settlement agreement and any obstacles or impediments toward that end, and to respond to the court’s questions on these issues.
The assigned attorneys in the United States Attorney’s Office in Portland were Bill Williams, Adrian Brown and David Knight. From the Civil Rights Division of the Department of Justice in Washington, D.C., the assigned attorneys were Laura Coon, Jonas Geissler and Michelle Jones.
For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt . If you have any comments or concerns specific to this matter, please feel free to contact us at [email protected] or 1-877-218-5228.
Court Approves Police Reform Agreement in Portland, OregonRead the Press Release
WASHINGTON– Today, the United States won court approval of a settlement agreement to reform the ways in which the Portland Oregon Police Bureau (“PPB”) interacts with individuals with actual or perceived mental illness. The agreement was entered jointly by the United States and the city of Portland, Oregon, with the approval of the Albina Ministerial Alliance Coalition for Justice and Police Reform (“AMA Coalition”) and Portland Police Association (“PPA”). The agreement addresses constitutional claims in a civil action filed by the United States pursuant to the Violent Crime Control and Law Enforcement Act of 1994. In today’s order, the court approved the agreement with the requirement that the parties appear for periodic hearings to provide the court progress on implementation of the agreement.
The agreement requires changes—many of which PPB has already begun to implement—in PPB’s policy, training, supervisory oversight, community-based mental health services, crisis intervention, employee information systems, officer accountability and community engagement and oversight. The agreement also calls for innovative new mechanisms for ongoing community involvement in the implementation of reforms. In addition, the agreement establishes an independent compliance officer and community liaison (“COCL”), who will be responsible for synthesizing data related to PPB’s use of force, reporting to the city council, the Justice Department and the public and gathering input from the public related to PPB’s compliance with the agreement. Finally, the agreement lays the framework for a community oversight advisory board (“COAB”), which will be a crucial mechanism for civil engagement in the reform process.
“We are committed to continuing to work with our partners in the community throughout the reform process to ensure full implementation of the settlement agreement,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “We applaud the city’s efforts to implement portions of the settlement agreement during the pendency of the litigation. We are pleased to provide the court information about reforms through ongoing periodic hearings. We are also appreciative of the continued collaboration with the AMA Coalition and the participation of the PPA to resolve these issues to enable the entry of the settlement agreement. We look forward to the positive changes that these civil rights reforms will bring about for the people of Portland.”
“Today’s decision is the culmination of significant work on the part of all parties to reach such a groundbreaking resolution for the citizens of Portland,” said U.S. Attorney Amanda Marshall for the District of Oregon. “We are very grateful to the court for entering this order, and look forward to continued collaboration with the city of Portland, the Portland Police Bureau, the Portland Police Association, the Albina Ministerial Alliance Coalition for Justice and Police Reform, and all citizens of Portland to ensure the letter and the spirit of this agreement are upheld.”
The United States’ complaint followed an investigation, launched on June 8, 2011, and conducted by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the District of Oregon. The investigation focused on whether PPB engages in unconstitutional or unlawful policing through the use of excessive force, with a specific focus on the use of force against people with actual or perceived mental illness or in mental health crisis.
In a September 2012 findings letter detailing the outcome of the 14-month investigation, the Justice Department found that most uses of force by PPB officers were lawful and reasonable, but it also found reasonable cause to believe that PPB engages in a pattern or practice of excessive force, in violation of the Fourth Amendment of the U.S. Constitution and the Violent Crime Control and Law Enforcement Act of 1994, in certain contexts. Following the release of the findings letter, the United States and the city engaged in settlement negotiations resulting in the settlement agreement, which the city council voted to approve. The city fully cooperated with the United States throughout its investigation and was eager to address problems identified in the United States’ findings letter regarding Portland Police Bureau’s policies, practices, training and supervision through entry of the settlement agreement.
On Dec. 17, 2012, the United States initiated a lawsuit against the city and, with the city’s cooperation, concurrently filed a joint motion asking the court to approve the negotiated settlement agreement and conditionally dismiss the case. Specifically, the United States’ complaint alleged that PPB engages in a pattern or practice of using excessive force on individuals with actual or perceived mental illness by: (1) too frequently using a higher level of force than necessary; (2) using electronic control weapons (“ECWs”), commonly referred to as “Tasers,” in circumstances when such force is not justified, or deploying ECWs more times than necessary on an individual; and (3) using a higher degree of force than justified for low-level offenses.
Both PPA and the AMA Coalition subsequently moved to intervene in the suit, seeking to join the case as parties and objecting to the proposed settlement agreement. The court partially granted PPA’s motion to intervene and granted the AMA Coalition enhanced amicus status, allowing the AMA Coalition to participate in the litigation. The court then ordered all parties to mediation to attempt to resolve PPA’s and the AMA Coalition’s objections to the settlement agreement. Such mediation efforts have resulted in a memorandum of understanding with PPA and a separate agreement previously reached with the AMA Coalition.
Following a fairness hearing on the settlement agreement, the court previously found that the settlement agreement is substantively fair, reasonable and adequate. The court found, however, that it needed a procedure to receive information on the city’s implementation of reforms on at least an annual basis. In today’s ruling, the court required the parties and COCL to file quarterly reports with the court and required the parties to appear for periodic hearings to describe to the court the progress being made toward achieving substantial compliance with all provisions of the settlement agreement and any obstacles or impediments toward that end, and to respond to the court’s questions on these issues.
The assigned attorneys in the United States Attorney’s Office in Portland were Bill Williams, Adrian Brown and David Knight. From the Civil Rights Division of the Department of Justice in Washington, D.C., the assigned attorneys were Laura Coon, Jonas Geissler and Michelle Jones.
For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt. If you have any comments or concerns specific to this matter, please feel free to contact us at [email protected] 1-877-218-5228.
Businessman Pleads Guilty to Federal Export Offense and to Mishandling Classified DocumentsDefendant, A Former Military Officer, Admits Selling Restricted Weapons Parts Without A LicenseRead the Press Release
WASHINGTON – Justin Gage Jangraw, a former U.S. Army officer who operated a business that sold military-grade weapons parts and accessories, pled guilty today to violating the Arms Export Control Act by selling restricted items without a license. He also pled guilty to a separate charge stemming from his unauthorized removal and retention of classified documents that he obtained while he was in the Army.
Jangraw, 34, of Rockford, Mich., entered the guilty plea in the U.S. District Court for the District of Columbia.
The plea was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John P. Carlin, Assistant Attorney General for the Department of Justice’s National Security Division; Ryan L. Spradlin, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) - Homeland Security Investigations (HSI) in Atlanta; Brad Bench, Special Agent in Charge U.S. Immigration and Customs Enforcement (ICE) - Homeland Security Investigations (HSI) in Seattle; and Gregory T. Bretzing, Special Agent in Charge of the FBI’s Portland, Oregon, Division.
The Honorable James E. Boasberg scheduled sentencing for Nov. 21, 2014. The export charge carries a statutory maximum of 20 years in prison and the charge involving classified documents carries up to a year in prison. Both charges also carry potential financial penalties. In addition, Jangraw agreed, as a condition of his plea, to the forfeiture of an AR-15 assault rifle and 117 magazines, as well as various weapons parts, which were seized by law enforcement during the investigation.
According to a statement of facts filed as part of the guilty plea, Jangraw is a former U.S. Army Captain once deployed to Iraq. He later operated an online business, using the names “Heapeach” and “Sexyweapon.com,” in Portland. The business sold military-grade weapons parts and accessories to customers located worldwide.
The Arms Export Control Act (AECA) controls the export of defense articles as designated on the United States Munitions List. The AECA and its attendant regulations, the International Traffic in Arms Regulations (ITAR), require a person to apply for and obtain a license from the Department of State before exporting from the United States any arms, ammunition or articles of war that are designated on the Munitions List.
From November 2009 through January 2011, according to the statement of facts, Jangraw sold and exported from the United States a total of 287 Munitions List items – including riflescopes manufactured to military specifications - to international customers in 34 different foreign countries, generating more than $12,000.
Jangraw willfully exported Munitions List parts and accessories even though he and his business never applied for or obtained a license to export defense articles from the United States. He did so with full knowledge of the licensing requirements.
Following an undercover HSI investigation, HSI agents obtained a warrant to search Jangraw’s residence, which was then in Portland. During the search, in April 2011, agents seized four computers and electronic media, gun magazines, documents and products such as a weapon sight, gun rails, gun parts, and an AR-15 assault rifle.
A subsequent review of images seized from Jangraw’s laptop computer led to the discovery of classified material that included e-mails from Jangraw’s work with the Army. The FBI was alerted and performed a follow-up search in July 2011 that led to the discovery of additional material that Jangraw had removed, without authorization, from Iraq. He took the laptop with him to numerous foreign countries and accessed unprotected Wi-Fi networks with the laptop while it contained the classified documents. The hundreds of classified documents contained information on military plans, weapons systems or operations, and other subjects pertaining to national security.
“Justin Jangraw repeatedly showed a disregard for our national security,” said U.S. Attorney Machen. “He held onto classified material after leaving the U.S. Army, keeping sensitive information on his laptop. Then, when he went into business, he sold strictly regulated weapons parts to international customers without a license. We appreciate the work of our law enforcement partners in now bringing him to justice.”
“This defendant betrayed the oath he took to uphold the Constitution of the United States by knowingly circumventing our laws to export sensitive technology to anyone with the money to pay for it,” said Acting Special Agent in Charge Spradlin, of ICE Homeland Security Investigations in Atlanta. “Thanks to the hard work of federal prosecutors and Homeland Security Investigations special agents in Atlanta and Portland, with significant support from the FBI, this criminal scheme has been shut down and the defendant will be held responsible for his flagrant violation of the law.”
“The mishandling of classified material has the potential to cause serious damage to national security as well as to jeopardize the lives of our U.S. forces who put themselves in harm’s way every day,” said Special Agent in Charge Bretzing, of the FBI. “A top priority of the FBI has always been to protect critical national secrets and assets and prevent them from falling into the wrong hands. This case is an excellent example of not only our dedication to protecting national security but also the hard work and dedication from our partners in the Department of Defense.”
This case was investigated by ICE-HSI offices in Portland and Atlanta and the FBI’s Portland Division, and assisted by U.S. Central Command. It is being prosecuted by Assistant U.S. Attorney Brenda J. Johnson of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney David Recker of the Counterespionage Section of DOJ’s National Security Division. Assistance was provided by Assistant U.S. Attorney George P. Varghese, now with the U.S. Attorney’s Office for the District of Massachusetts.
14-187Boston Man Convicted of Aiding and Abetting Interstate Transportation for ProstitutionRead the Press Release
Contact: Gail Fisk Malone
Assistant United States Attorney
Tel: (207) 945-0373Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Fritz
Blanchard, 28, of Boston, Massachusetts, was found guilty yesterday in U.S. District Court of aiding and abetting the interstate transportation of women for prostitution following a four-day jury trial in Portland.According to the indictment and trial evidence, on March 27, 2013, Blanchard and
Samuel Gravely caused a Presque Isle woman and a Portland woman to engage in prostitution at a Portland hotel, advertising their services on backpage.com. The next day, Blanchard and
Gravely drove the two women, and another Portland woman, from Portland to Boston intending that the three work as prostitutes there. When they arrived in Boston, Blanchard took two of the women to a downtown street and told them how to attract customers and engage in prostitution.Blanchard faces up to 10 years in prison and a $250,000 fine. He will be sentenced after completion of a presentence investigation report by the U.S. Probation Office. On November 20, 2013, Gravely pled guilty to interstate transportation of women for prostitution. He awaits sentencing.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland
Security Investigations, with assistance from the Boston Police Department; the Federal Bureau of Investigation; the Portland, Presque Isle, Old Town, Brunswick and Saco Police Departments; the Maine Drug Enforcement Agency; and Cumberland County Sheriff’s Office.Athletic Director, Two Others Plead Guilty to EmbezzlementRead the Press Release
CHARLOTTESVILLE, VIRGINIA – Three men, including the athletic director at Monticello High School and the vice president of Downtown Athletic Store, pled guilty this morning in the United States District Court for the Western District of Virginia to a federal misdemeanor charge related to bid rigging.
In separate hearings this morning in Federal Court, Fitzgerald Arnette Barnes, 50, of Louisa, Va., David Mayhew Deane, 54, of Keswick, Va., and Charles Albert Phillips, 48, of Annapolis, Md., waived their right to be indicted and pled guilty to a one-count Information charging each with one count of knowingly embezzling money belonging to the United States.
“When school officials spend taxpayer dollars, they must comply with procurement rules that encourage competition and ensure that schools obtain the best possible price,” United States Attorney Timothy J. Heaphy said today. “These three individuals worked together to circumvent these important procurement regulations by creating dummy bids for athletic apparel and equipment. This case demonstrates our continuing commitment to ensuring that public funds are responsibly handled.”
Barnes, the athletic director at Monticello High School, has admitted to being involved with Deane, the Vice President of Downtown Athletic, and Phillips, the Vice President of Sales for Team Distributor, a sports apparel retailer in Maryland, in a scheme to fix bids on athletic apparel purchased for Monticello High School.
The three have admitted that between August 2008 and August 2010 they fraudulently created price bids that were used as the basis for contracts involving the sale of athletic equipment and apparel from Downtown Athletic to Monticello High School. Albemarle County policy requires a bid from three different vendors when entering into contracts with private companies for goods and services which cost more than $1000.
Over the course of several years, Barnes directed Deane to obtain and submit to Monticello High School the three required bids, one bid for Downtown Athletic and two representing other, fictitious retailers, ensuring Downtown Athletic would be awarded the contract.
On several occasions, Deane contacted Phillips and asked him to also submit false bids to Monticello High School that were higher than the bid submitted by Downtown Athletic Store. After receiving the two false and one authentic bid, Barnes awarded multiple contracts for the sale of athletic apparel and equipment to Deane and Downtown Athletic.
Following today’s guilty plea hearing, all three defendants were sentenced. Phillips was ordered to pay a $350 fine, Barnes was ordered to pay a $750 fine and Deane was ordered to pay a $1,500 fine.
The investigation of the case was conducted by the Federal Bureau of Investigation. United States Attorney Timothy J. Heaphy and Assistant United States Attorney Ronald Huber prosecuted the case for the United States.
Arlington Doctor and Five Conspirators Indicted with Operating Oxycodone Distribution RingRead the Press Release
ALEXANDRIA, Va. – An Arlington, Virginia doctor and five co-conspirators were indicted by a federal grand jury yesterday for operating an oxycodone distribution ring in which the participants allegedly wrote, filled, and sold fraudulent prescriptions for over 11,000 oxycodone pills and other controlled substances throughout Virginia and in other states.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Timothy A. Gallagher, Acting Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement.
The six indicted defendants reside in Virginia and include Dr. Derron McRae Simon, 45, of Midlothian; Donald Alvin Petties, 51, of Sterling; Ereida Arlett Escobar, 23, of Falls Church; Linda Dao, 21, of Arlington; Michael Harris, 21, of Falls Church; and Aaron Kwon, 29, of Manassas. All six defendants are charged with one count of conspiracy to distribute and dispense controlled substances and one or more counts of possession with the intent to distribute controlled substances. Simon also is charged with three counts of distributing a controlled substance to persons under the age of 21, and both Simon and Petties are charged with one count of aggravated identity fraud.
According to the nine-count indictment, from January 2013 until around July 2014, Simon was the chief medical director, and often the primary or only medical doctor, at WithinMe MD, a wellness practice in Arlington. From November 2008 until July 2014, Simon’s medical license was restricted by the Virginia Board of Medicine after having either been suspended or placed on probation. Simon’s license was summarily suspended on July 11, 2014.
According to court records, beginning in February 2013, Simon and the other five defendants conspired to distribute oxycodone throughout Virginia and other states. Simon allegedly wrote and sold hundreds of prescriptions for oxycodone and other controlled substances, despite knowing that the individuals in whose names the prescriptions were written were abusing, misusing, distributing, and/or selling the drugs. Simon allegedly had never met many of these purported patients, and he also wrote prescriptions in the names of his five co-conspirators, as well as friends, relatives, and fictitious individuals.
According to the indictment, Simon directed Escobar, a receptionist and medical assistant at Simon’s practice, to confirm calls from pharmacists seeking to verify his oxycodone prescriptions. Simon also allegedly directed Escobar to create fraudulent patient history forms and medical records to make it appear that these individuals were actually legitimate patients. Around May 2013, Simon purchased a pill press so that he and Petties allegedly could make homemade oxycodone tablets without having to go through pharmacies.
The indictment alleges that the defendants conspired to distribute well over 11,000 oxycodone 30 mg pills, for a total value of over $735,000. For each fraudulent prescription, Simon and/or Escobar received approximately $500 to $1,000.
Each of the defendants faces a maximum penalty of 20 years in prison and a $1 million fine if convicted of the charged conspiracy or possession offenses. Additionally, Simon faces a mandatory minimum sentence of one year and a maximum penalty of 40 years in prison if convicted of distributing oxycodone to a person under the age of 21. Simon and Petties also face a mandatory two-year consecutive term in prison if convicted of aggravated identity fraud.
This case was investigated by the FBI’s Washington Field Office. Special Assistant U.S. Attorneys Jason M. Scheff and Allison Ickovic are prosecuting the case.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-300.
A Federal Jury Finds Local Attorney Guilty of Drug Conspiracy and Money Laundering ChargesRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announces that a federal jury earlier today found Lafayette attorney Daniel James Stanford, 56, guilty of conspiring to distribute synthetic drugs, conspiring to introduce misbranded drugs into interstate commerce, and money laundering charges.
After an eight-day trial, over six hours of deliberation, hundreds of pages of exhibits, and testimony from 30 plus witnesses, the jury found Stanford guilty of one count of conspiracy to distribute or possess with intent to distribute a controlled substance analogue, one count of conspiracy to introduce or cause to be introduced misbranded drugs into interstate commerce, one count of conspiracy to launder money, and 5 counts of money laundering. Stanford was found not guilty on 5 counts of the indictment, which outlined additional money laundering charges. U.S. District Judge Elizabeth E. Foote presided over the trial.
In September of 2012, Stanford, Curious Goods, a Limited Liability Corporation (LLC), and eight co-conspirators, Alexander Derrick Reece, 40 of Gainesville, Fla.; Drew T. Green, 38 of Roswell, Ga.; Thomas William Malone, Jr., 45 of Roswell, Ga.; Boyd Anthony Barrow, 43 of Canton, Ga.; Joshua Espinoza, 49 of Marietta, Ga.; Richard Joseph Buswell, 44 of Lafayette, La.; Daniel Paul Francis, 42 of Dawsonville, Ga.; and Barry L. Domingue, 52 of Carencro, La., were charged by a grand jury in a 16 count indictment with conspiracy to distribute synthetic drugs, conspiracy to introduce misbranded drugs into interstate commerce, conspiracy to commit money laundering, and various money laundering charges.
At the time of the indictment, Curious Goods, LLC, was a business based in Lafayette and controlled by co-conspirator Richard Buswell. Buswell has since pleaded guilty to other federal charges involving an investor fraud scheme. During the trial, evidence showed that Curious Goods stores sold a product called AMr. Miyagi@ that was infused with synthetic cannabinoids. Although mislabeled as a potpourri, AMr. Miyagi@ was sold to be smoked for the sole purpose of getting the consumer of the product Ahigh.@ The synthetic cannabinoids infused into AMr. Miyagi@ are considered Schedule I controlled dangerous substances under federal law, but were marketed by Stanford and his co-conspirators as every day potpourri. Witnesses testified that on March 1, 2011 to December 31, 2011, Curious Goods stores throughout Acadiana raked in approximately $5 million for the sale of the illegal AMr. Miyagi@ product and paid the supplier of “Mr. Miyagi”, Pinnacle Products, approximately $1.5 million.
Testimony at trial identified Pinnacle Products LLC/Pinnacle Products Group, based in Marietta, Ga., as the manufacturer of the AMr. Miyagi@ products being sold in Acadiana. They supplied the products to local Curious Goods stores. Pinnacle Products LLC was controlled and operated by Stanford’s co-conspirators, Boyd Anthony Barrow and Joshua Espinoza. Pinnacle obtained the synthetic cannabinoids utilized to manufacture AMr. Miyagi@ from NutraGenomics, which was located in an Alpahretta, Georgia and controlled by co-conspirators, Drew T. Green and Thomas William Malone, Jr. NutraGenomics distributed synthetic cannabinoids throughout the United States. The majority of the synthetic cannabinoids distributed by NutraGenomics were supplied by another one of Stanford’s co-conspirators, Alexander Derrick Reece.
Prior to trial, Stanford’s co-conspirators, Reece, Green, Malone, Barrow, Espinoza, Buswell, and Francis all pleaded guilty in federal court, but appeared in federal court as witnesses for the government in this trial. Stanford, who is a criminal defense attorney, decided to represent himself at trial. During opening statements, after the government laid out how they expected the evidence to reveal Stanford’s knowing involvement in the drug conspiracy, Stanford told the jury that his “integrity and honor” were “not negotiable,” and he advised the jury that he was “absolutely not guilty of any of this.” However, at trial, the evidence showed that Stanford was actively involved with the Curious Goods enterprise, that he was well aware that the company sold a product called “Mr. Miyagi,” and that “Mr. Miyagi” was a substance that was infused with synthetic cannabinoids.
Exhibits introduced at trial exposed that “Mr. Miyagi” was specifically labelled “not for human consumption” and sold as a product that would be smoked by users to get high. The evidence also demonstrated that the product was packaged to be intentionally false and misleading, marketed as potpourri. The exterior package label of “Mr. Miyagi” stated that it was to be used to refresh scent in drawers, closets, and cars; all of which Stanford knew to be false. It listed its ingredients as “exotic blend of Herbs, Plants and Botanicals.” The package also advised purchasers that “[a]s of this printing, this product complies with all U.S. federal laws;” another statement which Stanford also knew to be false. During the trial, prosecutors showed jurors just how misleading the labeling was by opening a packet of the so-called scent refresher which resembled marijuana. Testimony at trial made it clear that Stanford knew that the product was being consumed by humans, that it was harmful and not a scent refresher, and that the product was marketed to youthful customers. The intentional mislabeling and misbranding, spearheaded by Stanford, were part of a legal strategy and subterfuge to feign compliance with the law, to avoid law enforcement detection, and to avoid civil and criminal liability.
Testimony at trial outlined that as the conspiracy progressed, individuals were recruited to purchase Curious Goods franchises. Then as the business grew and franchise stores opened, the Curious Goods organization brought in Stanford, and Stanford in turn recruited co-conspirator Dan Francis. Francis’ role was to assist Stanford in forming Louisiana’s version of the Retail Compliance Association (RCA), a company that was formed as a non-profit, but utilized for the sole purpose of advising smoke shops and other retail outlets how to strategically sell and market synthetic drugs as common, every day, over the counter products. Stanford named himself as Director of RCA and was advised by Dan Francis who was experienced in the synthetic cannabinoid industry.
Emails introduced at trial showed that Stanford wanted Louisiana’s RCA to facilitate the conspiracy. At trial, witnesses testified that franchise owners were forced to join the Louisiana RCA. Evidence showed that for his efforts, Stanford was to collect between $1,000 and $5,000 weekly from each Curious Goods franchise store based on the volume of sales from the stores, in addition to collecting $6,250 each from the Curious Goods companies and Pinnacle Products, a total of $12,500 per week. Witnesses testified that Stanford, through RCA, stood to be paid approximately $40,000 – $50,000 per week from all of these sources.
In order to maintain the supply of “Mr. Miyagi” from Georgia and to convince prospective franchisees to sell Mr. Miyagi, Stanford and Richard Buswell convinced Pinnacle Products and franchisees that they, Stanford and Buswell, had obtained a letter from the Louisiana Attorney General’s Office permitting the sale of “Mr. Miyagi” in the state of Louisiana for two years, which Stanford knew to be untrue and knew that no such letter existed. At trial, the government played recordings of Stanford advising franchise owners that he met with Louisiana’s Attorney General. Stanford was trying to convince disgruntled franchisees to continue working, selling and receiving products from Pinnacle, despite what seemed to be clear law enforcement action indicating that the product they were selling was illegal.
At trial, Kurt Wall, the Director of the Criminal Division of the Louisiana Attorney General’s Office testified that the alleged letter never existed, and no one from the Attorney General’s Office had ever spoken to Stanford regarding any synthetic drugs. In addition, Louisiana Attorney General, James D. “Buddy” Caldwell, was called as a witness and testified that neither he nor anyone in his office would make assurances that could lead to the introduction of synthetic drugs into Louisiana.
During the course of the conspiracy, some of the co-conspirators confronted Stanford about the existence of the so called Attorney General letter. Witnesses stated under oath that after being confronted, Stanford admitted that he did not have a letter, but was a close personal friend of the State Attorney General, and the two had a hand shake agreement about the synthetics. After the confrontation, Stanford shifted his story and explained that Caldwell assured him that no one would be prosecuted by the Attorney General’s Office for dealing in the substance. However, Louisiana Attorney General Caldwell testified to jurors that he did not know Stanford, and during closing arguments, Stanford conceded that he did not meet with Caldwell on the synthetic cannabinoids.
Among the many witnesses testifying at trial, were local law enforcement and DEA Task Force agents who testified that during the execution of search warrants, on December 8, 2011, they searched all Curious Goods store locations, including the company’s warehouse in Lafayette and seized approximately 190 pounds of synthetic drugs.
Stanford faces up to 30 years in prison and a fine of up to $2 million for his role in the drug conspiracy. For the charges relating to the conspiracy to misbrand, he faces up to 5 years in prison and a fine of up to $250,000. The money laundering conspiracy and each count of money laundering carries a sentence of up to 10 years in prison and a fine of up to $250,000. A sentencing date for Stanford has not been set. Stanford’s co-conspirators are set to be sentenced on September 19, 2014.
The Drug Enforcement Administration, Federal Bureau of Investigation, Homeland Security Investigations, the Internal Revenue Service, Lafayette Police Department, Lafayette Parish Sheriff’s Office, Iberia Parish Sheriff’s Office, Vermillion Parish Sheriff’s Office, and the Louisiana State Police conducted this investigation. Assistant U.S. Attorneys John Luke Walker, J. Collin Sims, and Robert C. Abendroth are prosecuted the case.
U. S. Attorney Finley stated, “This case is a huge victory for the Acadian area. Too many members of our community visited these shops that sold this poison, especially the youth. Stanford’s insatiable desire for money drove him to join this conspiracy and put many, many people in harm’s way. Today his greed and criminal activity have consequences. This case highlights how lucrative this industry is and reveals the length that criminals are willing to go to profit while endangering the health and safety of citizens. Stanford’s goal was to hide behind what he wanted the world to believe was a legitimate company, but his scheme failed because of the dedicated men and women of federal, state and local law enforcement who are committed to the safety of this community. They are to be commended for years of hard work to get these illegal substances off the street and hold these criminals accountable. I hope that store owners, franchisees, investors and distributers who want a make a fast buck at the expense of others think twice and understand that we will not hesitate to investigate and prosecute their criminal activity.”
28 August 2014
Wilkes-Barre Township Volunteer Fire Department Chief Charged Federally with Stealing Department FundsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a criminal Information has been filed in U.S. District Court in Scranton charging the Chief of the Wilkes-Barre Township Volunteer Fire Department, John Yuknavich, age 51, of Wilkes-Barre Township, Pennsylvania, with stealing in excess of $5,000 from the fire department and Wilkes-Barre Township in the course of his duties as Chief of that fire department between 2008 and 2011.
According to United States Attorney Peter Smith, Yuknavich was responsible for ensuring the deposit of monthly funds received from Wilkes-Barre Township, as well as all other funds received either through charitable contributions or annual state aid received from the Commonwealth of Pennsylvania. Yuknavich allegedly deposited only part of the monthly $3500 check received from Wilkes-Barre Township intended to pay fire department bills, and took the remainder of the check in cash, most of which he used for his personal benefit.
Federal law prohibits theft or intentional misapplication of $5,000 or more from local government programs that receive more than $10,000 in federal funds annually.
The Government also filed a plea agreement with Yuknavich which must be approved by the U.S. District Court. The agreed upon restitution included in the plea agreement is $45,000. An additional term of the plea agreement requires Yuknavich to resign his position as an officer or any other official title he holds with the Wilkes-Barre Township Volunteer Fire Department within ten days of the entry of the plea.
The prosecution is the result of a joint investigation by the Federal Bureau of Investigation (FBI), the Luzerne County District Attorney’s Office, and the Pennsylvania State Police with the assistance of the Pennsylvania Department of the Auditor General. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 10 years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
United States Intervenes in False Claims Act Lawsuits Against Evercare Hospice and Palliative Care, Now Known as Optum Palliative Care and HospiceRead the Press Release
The United States has partially intervened against defendants in two whistleblower lawsuits in the Federal District Court for the District of Colorado alleging Evercare Hospice and Palliative Care (Evercare) submitted false claims for the Medicare hospice benefit. Evercare is now known as Optum Palliative and Hospice Care, which provides hospice services across the United States. One of the suits names Evercare’s parent companies, including UnitedHealth Group Inc.
“The hospice benefit is designed for patients who are terminally ill and need end-of-life care,” said Assistant Attorney General Stuart F. Delery for the Department of Justice’s Civil Division. “We will continue to protect the ability of Medicare recipients to receive appropriate treatment by ensuring that entities providing hospice care are only treating, and billing for, qualified patients.”
The Medicare hospice benefit is available for patients who elect palliative care (medical care focused on providing patients with relief from pain, symptoms or stress) for a terminal illness, and have a life expectancy of six months or less if their illness runs its normal course. When a Medicare patient is admitted to hospice, that individual is no longer entitled to Medicare coverage for care designed to cure his or her illness.
The lawsuits, filed by former employees of Evercare, allege that defendants violated the False Claims Act by knowingly submitting false claims for hospice benefits for patients who did not have a life expectancy of six months or less. The complaints include allegations that management pressured employees and physicians to admit and retain patients who were not terminally ill and challenged or disregarded physicians’ decisions that patients should be discharged.
“Hospice care plays a critical role in our healthcare system, providing for end-of-life care as opposed to curative life care,” said U.S. Attorney John Walsh for the District of Colorado. “When companies systematically overbill Medicare by keeping people in hospice when they don’t need to be there, it jeopardizes this important benefit for others under the program. We will not tolerate such conduct. The District of Colorado and the Civil Fraud Section of the Department of Justice deserve substantial credit for pursuing that mission in these Evercare Hospice cases.”
“The decision to provide hospice services should be prompted by a patient’s terminally ill medical condition and desire for palliative care, not a hospice provider’s desire to boost its profits,” said Special Agent in Charge Gerald T. Roy of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our agency is dedicated to safeguarding both the Medicare program and Medicare patients.”
The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for the submission of false claims to the government. The private plaintiffs are entitled to receive a share of any funds recovered through the lawsuit. The False Claims Act authorizes the United States to intervene in a whistleblower lawsuit and take over primary responsibility for litigating it as the United States has done here, and permits the government to recover three times its damages plus civil penalties. The United States has notified the court that it intends to file its own complaint.
The government’s intervention in these actions is part of the government’s emphasis on combating health care fraud and another step 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 $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Colorado, and the Department of Health and Human Services’ Office of Inspector General. The claims asserted against defendants are allegations only, and there has been no determination of liability.
The lawsuits are consolidated and captioned United States ex rel. Fowler and Towl v. Evercare Hospice, Inc., et al., No. 11-cv-00642 (D. Colo.); United States ex rel. Rice v. Evercare Hospice, Inc., No. 14-cv-01647 (D. Colo.).
United States Intervenes in False Claims Act Lawsuits Against Evercare Hospice and Palliative Care, Now Known as Optum Palliative Care and HospiceRead the Press Release
WASHINGTON – The United States has partially intervened against defendants in two whistleblower lawsuits in the Federal District Court for the District of Colorado alleging Evercare Hospice and Palliative Care (Evercare) submitted false claims for the Medicare hospice benefit. Evercare is now known as Optum Palliative and Hospice Care, which provides hospice services across the United States. One of the suits names Evercare’s parent companies, including UnitedHealth Group Inc.
“The hospice benefit is designed for patients who are terminally ill and need end-of-life care,” said Assistant Attorney General Stuart F. Delery for the Department of Justice’s Civil Division. “We will continue to protect the ability of Medicare recipients to receive appropriate treatment by ensuring that entities providing hospice care are only treating, and billing for, qualified patients.”
The Medicare hospice benefit is available for patients who elect palliative care (medical care focused on providing patients with relief from pain, symptoms or stress) for a terminal illness, and have a life expectancy of six months or less if their illness runs its normal course. When a Medicare patient is admitted to hospice, that individual is no longer entitled to Medicare coverage for care designed to cure his or her illness.
The lawsuits, filed by former employees of Evercare, allege that defendants violated the False Claims Act by knowingly submitting false claims for hospice benefits for patients who did not have a life expectancy of six months or less. The complaints include allegations that management pressured employees and physicians to admit and retain patients who were not terminally ill and challenged or disregarded physicians’ decisions that patients should be discharged.
“Hospice care plays a critical role in our healthcare system, providing for end-of-life care as opposed to curative life care,” said U.S. Attorney John Walsh for the District of Colorado. “When companies systematically overbill Medicare by keeping people in hospice when they don’t need to be there, it jeopardizes this important benefit for others under the program. We will not tolerate such conduct. The District of Colorado and the Civil Fraud Section of the Department of Justice deserve substantial credit for pursuing that mission in these Evercare Hospice cases.”
“The decision to provide hospice services should be prompted by a patient’s terminally ill medical condition and desire for palliative care, not a hospice provider’s desire to boost its profits,” said Special Agent in Charge Gerald T. Roy of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our agency is dedicated to safeguarding both the Medicare program and Medicare patients.”
The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for the submission of false claims to the government. The private plaintiffs are entitled to receive a share of any funds recovered through the lawsuit. The False Claims Act authorizes the United States to intervene in a whistleblower lawsuit and take over primary responsibility for litigating it as the United States has done here, and permits the government to recover three times its damages plus civil penalties. The United States has notified the court that it intends to file its own complaint.The government’s intervention in these actions is part of the government’s emphasis on combating health care fraud and another step 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 $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Colorado, and the Department of Health and Human Services’ Office of Inspector General. The claims asserted against defendants are allegations only, and there has been no determination of liability.
The lawsuits are consolidated and captioned United States ex rel. Fowler and Towl v. Evercare Hospice, Inc., et al., No. 11-cv-00642 (D. Colo.); United States ex rel. Rice v. Evercare Hospice, Inc., No. 14-cv-01647 (D. Colo.).
Two Tennessee Men Plead Guilty to Conspiracy to Operate Illegal Cockfighting & Gambling BusinessRead the Press Release
Criminal Enterprise Collected More Than $100,000 in Proceeds
NASHVILLE, Tenn.- August 28, 2014- Thomas Hardiman, 66, of Iron City, Tenn. and Walter Wooten, 58, of Leoma, Tenn. pleaded guilty today to conspiring to operate an illegal gambling business and to assisting an animal fighting venture, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. These convictions relate to these defendants’ role with a cockfighting enterprise known as the “Shiloh Club,” which operated in Hohenwald, Tenn. until being shut down by Federal and state authorities In May 2009.
During a hearing today before U.S. District Court Judge Kevin Sharp, Hardiman and Wooten admitted conspiring with each other, and with Howard Gay and Philip Heidekker, to conduct the illegal gambling business known as the Shiloh Club. Hardiman and Wooten each acknowledged that the Shiloh Club operated regular cockfighting derbies in Hohenwald, Tenn. approximately every other Saturday from November until July, and that spectators and others gambled openly on the outcome of cockfights. Each defendant also admitted that individuals traveled from out-of-state for the purpose of entering roosters in the cockfighting derbies and gambling on the outcome of the fights. Hardiman acknowledged that the Shiloh Club collected more than $12,000 in entry fees at one particular derby, and that it collected more than $100,000 from spectators and participants over the course of its 2008-09 season.
Hardiman is scheduled to be sentenced on November 21, 2014 and Wooten is scheduled for sentencing on December 15, 2014. Each faces up to five years in prison and a fine of up to $250,000.
On April 10, 2014, Howard Gay, 56, of Hohenwald, Tenn., was convicted of three counts in connection with his role with the Shiloh Club. Specifically, Gay was found to be guilty of conspiring to operate an illegal gambling business, of operating an illegal gambling business, and of assisting an animal fighting venture. Gay is scheduled to be sentenced by Judge Sharp on September 19, 2014. He also faces up to five years in prison and a fine of up to $250,000, as well as the forfeiture of property used in the illegal activity.
Phillip Heidekker, 67 of Bon Aqua, Tenn., was also indicted by a federal grand jury on January 17, 2013 in connection with his role with the Shiloh Club. Heidekker is currently awaiting trial. An indictment is merely an accusation and is not evidence of guilt, and Heidekker is presumed innocent unless and until proven guilty in a court of law.
This case was investigated by agents with the U.S. Department of Agriculture - Office of Inspector General and the Tennessee Bureau of Investigation, with valuable assistance from the Tennessee Highway Patrol, the Federal Bureau of Investigation, the Williamson County Sherriff’s Department, and the 21st Judicial District Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Two Individuals Plead Guilty to Importing and Selling Hazardous and Counterfeit ToysRead the Press Release
Yesterday, at the federal courthouse in Brooklyn, New York, two Queens, New York residents pled guilty today in connection with importing more than 100,000 hazardous and counterfeit children’s toys from China for sale in the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Special Agent in Charge James T. Hayes Jr. of Homeland Security Investigations (HSI) New York, Director Robert E. Perez of Customs and Border Protection (CBP) New York Field Operations, Chairman Elliott Kaye of the Consumer Product Safety Commission (CPSC) and Commissioner William J. Bratton of the New York City Police Department (NYPD) made the announcement.
“In a criminal twist on a toy story, the defendants made millions importing dangerous, knock-off toys that put children in harm’s way,” said Assistant Attorney General Caldwell. “The defendants used a continuously shifting series of corporate entities in an effort to stay one step ahead of law enforcement. But their game has now come to an end. The Department of Justice is committed to stopping those who would smuggle hazardous, counterfeit goods into the United States.”
“For eight years, the defendants lined their pockets while putting at risk the health of our children by smuggling dangerous and copyright-infringing toys into the United States. Today’s guilty pleas signify the end of this dangerous pipeline from China. We will continue to be vigilant and prosecute those who would smuggle dangerous and unlawful items into our country and neighborhoods,” said U. S. Attorney Lynch. Ms. Lynch extended her grateful appreciation to the HSI Intellectual Property Rights Group and the NYPD and thanked the Consumer Product Safety Commission and Customs and Border Protection for their assistance.
“The United States has some of the strongest toy standards and lowest lead limits in the world, specifically to keep children safe,” said CPSC Chairman Kaye. “We have no more important mission than protecting children. For that reason, the CPSC will continue to work with our federal partners to enforce toy safety requirements at the ports and in the marketplace.”
“The defendants in this case endangered thousands of American children by manufacturing for sale counterfeit toys made with unsafe amounts of lead and other hazardous chemicals,” said Special Agent in Charge Hayes Jr. “HSI focuses its efforts to protect intellectual property, first and foremost, on those counterfeit goods that present health and safety hazards to consumers.”
Chenglan Hu, 52, and Hua Fei Zhang, 53, of Bayside, New York, pleaded guilty in connection with importing children’s toys with copyright-infringing images and counterfeit trademarks of popular children’s characters, as well as unsafe lead levels, small parts that presented risks of choking or ingestion, easily-accessible battery compartments, and other potential hazards. Hu and Zhang were the last of nine defendants to plead guilty in this investigation; Guan Jun Zhang, Jun Wu Zhang, and five corporations – Family Product USA Inc., H.M. Import USA Corp., ZCY Trading Corp., Zone Import Corp. and ZY Wholesale Inc. – previously pleaded guilty to Consumer Product Safety Act (CPSA) and trademark counterfeiting charges. In pleading guilty to trafficking in hazardous consumer goods in violation of CPSA, Hu and Zhang also agreed to forfeit $700,000 and more than 120,000 unsafe children’s toys. The government previously seized three luxury vehicles and six bank accounts, and filed lis pendens against two real properties owned by Zhang in Queens, New York.
According to court filings and facts presented at the plea hearings, from July 2005 through January 2013, Hu, Zhang and the other individual defendants used the companies they owned to import toys from China and sell them from a storefront and warehouse in Ridgewood, New York, and other locations in Brooklyn and Queens. According to court documents, CBP seized toys imported by the defendants from shipping containers entering the United States from China on thirty-three separate occasions. Seventeen of the thirty-three seizures contained toys prohibited from import into the United States because of excessive lead content, excessive phthalate levels, small parts that presented risks of choking, aspiration or ingestion, and easily-accessible battery compartments. Sixteen of the thirty-three seizures contained toys bearing copyright-infringing images and counterfeit trademarks, including a wide variety of popular children’s characters, such as Winnie the Pooh, Dora the Explorer, SpongeBob SquarePants, Betty Boop, Teenage Mutant Ninja Turtles, Power Rangers, Spiderman, Tweety, Mickey Mouse, and Pokémon, as well as those from movies such as “Cars,” “Toy Story” and “High School Musical.”
Hu, Zhang and the other individual defendants changed their use of the companies, sometimes even forming new companies, and alternated their formal titles in order to conceal their continued importation and distribution of the hazardous and counterfeit toys.
Hu and Zhang pleaded guilty before U.S. Magistrate Judge James Orenstein of the Eastern District of New York.
The case was prosecuted by Assistant U.S. Attorneys William P. Campos and Claire Kedeshian of the Eastern District of New York and Senior Counsel Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section. The case was jointly investigated by the HSI Intellectual Property Rights Group and the NYPD, through its participation in the New York Border Enforcement Security Taskforce, with the assistance of CPSC and CBP.
Two Correctional Officers Plead Guilty and an Inmate Is Sentenced in Baltimore Jail Racketeering ConspiracyRead the Press Release
Baltimore, Maryland – Former correctional officer Derrick Jones, age 41, of Baltimore, pleaded guilty today to participating in a racketeering conspiracy that included the smuggling of drugs and contraband inside the Baltimore City Detention Center (BCDC). Correctional officer Aisha Fraction, age 26, of Baltimore, pleaded guilty to the same charge on August 27, 2014.On August 27, 2014, Judge Ellen L. Hollander sentenced BGF member and inmate Frederick Morrison, age 30, also of Baltimore, to five years in prison, consecutive to the state sentence he is currently serving, followed by three years of supervised release, for the racketeering conspiracy.
The guilty pleas and sentence were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Secretary Gregg Hershberger of the Maryland Department of Public Safety and Correctional Services; Baltimore Police Commissioner Anthony W. Batts; and Baltimore City State’s Attorney Gregg L. Bernstein.This case was developed as a result of the efforts of the Maryland Prison Task Force, formed in 2011 with the Maryland Department of Public Safety and Correctional Services, local, state and federal law enforcement agencies, and prosecutors. The Task Force has met regularly for over three years, generating recommendations to reform prison procedures and producing leads that have been pursued by state, local and federal criminal investigators. The investigation is continuing.
According to court documents, the Black Guerilla Family (BGF) has been the dominant gang at the BCDC, and in several connected facilities, including the Baltimore Central Booking Intake Center (BCBIC), the Women’s Detention Center, which houses many men, and in the Jail Industries Building.
Jones and Fraction were employed as correctional officers (COs) at the Baltimore City Detention Center. Jones and Fraction admitted that they smuggled contraband, including prescription pills, marijuana, and cellular phones, into BCDC for further distribution by inmates who were BGF members, such as Tavon White and Steven Loney. At times, other correctional officers helped Jones and Fraction to smuggle the contraband into the prison. Fraction had a personal relationship with at least one BGF inmate and was aware of other inmates and COs who were involved in smuggling and in sexual relationships. The defendants knew that by smuggling such contraband into BCDC, they furthered the racketeering enterprise of BGF.
According to his plea agreement, Morrison is a member of BGF and was in pretrial custody at BCDC from 2012 to 2013. During that time, Morrison was involved with and often directed the smuggling of contraband into BCDC, including cell phones, tobacco, marijuana and other drugs, through the services of COs, who received payments, gifts or a share of the profits. Morrison had a sexual relationship with at least one of the COs involved in contraband trafficking. Morrison and his closest BGF allies frequently used various people to obtain contraband outside the prison, hold it or deliver it to COs for smuggling. Morrison also helped conceal contraband from prison officials at BCDC who would conduct periodic searches for contraband.
U.S. District Judge Ellen L. Hollander scheduled sentencing for Jones and Fraction, on January 9, 2015 and December 5, 2014, respectively. The defendants face a maximum penalty of 20 years in prison for the racketeering conspiracy.
Co-defendant Raylanair Reese, age 32, of Baltimore, is scheduled for a rearraignment on Friday, August 29, 2014, and several other defendants are scheduled for rearraignment next week.
To date, twenty-six of the 44 defendants charged in the conspiracy have pleaded guilty, including 16 correctional officers. One defendant has died. Trial is scheduled to begin November 17, 2014 for the remaining defendants.
U.S. Attorney Rosenstein recognized the efforts of the other members of the Maryland Prison Task Force, including: Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Chief Mark A. Magaw of the Prince George’s County Police Department; United States Marshal Johnny Hughes; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Tom Carr, Director of the Washington-Baltimore High Intensity Drug Trafficking Area; and Dave Engel, Executive Director of the Maryland Coordination and Analysis Center.
United States Attorney Rod J. Rosenstein praised the FBI, Maryland Department of Public Safety and Correctional Services, Baltimore Police Department, and Maryland Prison Task Force, for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.Two Baltimore Pimps Sentenced to Prison for Sex Trafficking of A MinorRead the Press Release
Prostituted a 14 Year Old Female
Baltimore, Maryland - U.S. District Judge Richard D. Bennett sentenced Kenneth Ronald Robinson, age 52, of Baltimore, today to 12 years in prison, followed by 25 years of supervised release, for sex trafficking involving a 14 year old girl. On August 26, 2014, Judge Bennett sentenced co-defendant Eric Evans, age 35, of Baltimore, to 10 years in prison, followed by 15 years of supervised release, for the same charge.The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; and Baltimore County State’s Attorney Scott Shellenberger.
According to the guilty pleas, on the evening of June 17, 2013, Maryland Child Exploitation Task Force members recovered a 14 year old girl from a motel on Joppa Road in Baltimore. The victim was located after law enforcement viewed a picture of her on a known Internet web site that advertises for prostitution, and called the number on the advertisement. Undercover officers made a “date” for prostitution with victim, which led them to her location.
Subsequent interviews of the victim revealed that at Robinson’s direction, the victim had been staying with co-defendants Cheralyn Crawford and Craig Judy and had been performing commercial sex acts from that hotel for approximately four days. At Robinson’s request, Crawford took sexually explicit pictures of the victim using co-defendant Jeffrey Clark’s cell phone. Crawford and Judy posted those photos in ads on a website. Judy used the prostitution earnings of both the minor victim and Crawford to pay for the ads. A subsequent search of Clark’s cell phone revealed that it contained photos of both the victim and Crawford used on the website’s sex ads. At Robinson’s direction, Clark transported the victim to motels, stores and restaurants in the Towson, Maryland area. One of the motel rooms used by the victim, Crawford, and Judy was registered to Clark.
The victim also advised that Robinson introduced her to Evans so that she could engage in prostitution at Evans’ direction. The victim told law enforcement that Evans posted sex ads for the victim on a website using photos he had taken of the victim. The victim also stated that Evans kept the money she earned from prostitution. At least one of the victim’s sex ads was posted on June 7, 2013, from an address used by a motel in Towson where records show that Evans had paid for a room from June 3 to 8, 2013.
Co-defendants Cheralyn Crawford, a/k/a “Rachel,” age 25, of Baltimore, Jeffrey Clark, age 43, of Nottingham, Maryland; and Craig Judy, age 29, of Baltimore, previously pleaded guilty to using the Internet to promote a minor to engage in prostitution. Judge Bennett sentenced Jeffrey Clark to 46 months in prison, Craig Judy to 3 years in prison and scheduled Cheralyn Crawford’s sentencing for September 24, 2014 at 3:00 p.m.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, Maryland State Police and the Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Ayn B. Ducao, P. Michael Cunningham and Rachel M. Yasser, who prosecuted the case.
Texas Resident Charged with Illegal ReentryRead the Press Release
Florencio Marcos-De Luna, 37, of Plano, Texas, was charged today by indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about July 28, 2014, Marcos-De Luna, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about February 23, 2010, October 24, 2011, and April 19, 2012.
If convicted the defendant faces a maximum possible sentence of 10 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney M. Taylor Aspinwall.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to view the indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Texas Leader of Synthetic Drug Ring Sentenced for His Role in the Deaths of Grand Forks Area TeenagersRead the Press Release
FARGO - U. S. Attorney Timothy Q. Purdon announced that on Aug. 28, 2014, Charles William Carlton, 29, Katy, Texas, was sentenced before U. S. District Judge Ralph R. Erickson to serve 20 years and six months in prison for conspiracy to possess with intent to distribute and distribution of controlled substances and controlled substance analogues resulting in serious bodily injury or death, introduction and delivery of a misbranded drug and money laundering.
On June 11, 2012, Grand Forks, N.D. Police Department responded to a call of a male lying on a sidewalk. Upon arrival they found 18-year-old Christian Bjerk dead from an overdose. A few blocks away officers found two other males, 18-year-old Wesley Sweeney and a 15-year-old male also disorientating and hallucinating. Both were taken to a local hospital.
Two days later on June 13, 2014, law enforcement would once again respond to a call for service as Elijah Stai, 17-years-old had stopped breathing and ultimately died from a drug overdose. It was determined that both overdoses resulted from ingesting N-(2-methoxybenzyl)-4-iodo-2, 5-dimethoxyphenethlylamine also known as 2CI-NBOMe.
For the first time ever, Drug Enforcement Agency - Drug Classification Section officially determined that these drugs were analogues of a Schedule I controlled substance 2, 5-Dimethoxy-4bromopheethlamine, also known as 2C-B, which is known to be very powerful and dangerous. U.S. Attorney Tim Purdon, in conjunction with local law enforcement, immediately warned the public about the potential dangers of these substances.The investigation revealed that the conspiracy involved the distribution of many illegal analogue controlled substances through an online business called Motion Resources that imported the illegal substances from several countries and sold them throughout the United States.
First Assistant U.S. Attorney Chris Myers said, “In response to the tragic deaths of two young people from our community, the response of local, state and Federal law enforcement was remarkable. Within 60 days, they identified and dismantled an international drug trafficking organization and undoubtedly saved lives. The 15 defendants that were held accountable for their roles in this case hopefully will provide a measure of justice for the families of Christian Bjerk and Elijah Stai. However, the fact remains that in this case the distribution of drugs resulted in the death of two young kids and affected a countless number of lives - sadly once again, the circumstances in this case forcefully rebut the tiresome argument that dealing drugs is a victimless crime.”
Judge Erickson also sentenced Carlton to three of years of supervised release and a $300 special assessment to be paid to the Crime Victims Fund. Carlton was also ordered to forfeit $385,000 in proceeds related to Motion Resources.
“Not only is a criminal going to prison for his crimes, but the government has seized a significant portion of the illegal proceeds through asset forfeiture,” stated Special Agent in Charge Kelly R. Jackson of the St. Paul Field Office. “The role of IRS Criminal Investigation in narcotics investigations is to follow the money so we can financially disrupt and dismantle major drug trafficking organizations. One of the government's most powerful weapons is the ability to seize through asset forfeiture the assets associated with narcotics-related crimes. IRS Criminal Investigation is proud to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice"“Today’s sentence concludes an extensive investigation and demonstrates the continued commitment of FDA's Office of Criminal Investigations and its law enforcement partners to aggressively pursue those who sell unapproved and harmful products over the internet that threaten the public health. Unfortunately, in this case there were deadly consequences and the perpetrators of this crime have been punished accordingly. FDA takes its responsibility to protect the health and safety of the US consumer very seriously,” said Special Agent-in-Charge John J. Redmond of the FDA’s Office of Criminal Investigations, Chicago Field Office.
Throughout the investigation, “Operation Stolen Youth” uncovered 14 other defendants in connection with Carlton. Five of those defendants also pled guilty to conspiracy to distribute analogue controlled substance resulting in death. The sentences for the other defendants are as follows:
Casey Rosen -Minneapolis, Minn. 20 years
Andrew Spofford- Fargo, N.D. 17.5 years
Wesley Sweeney- Manvel, N.D. 12.5 years
Adam Budge- Grand Forks, N.D. 11.3 years
John Polinski- Houston, Texas 11 years
Peter Hoistad- Grand Forks, N.D. 8 years
Ryan Lane- East Grand Forks, Minn. 5 years
William Fox- Grand Forks, N.D. 4 years
Byron Landry- Kiln, Miss. 40 months
Stephen Bucher- Bemidji, Minn. 36 months
Ron Norling- Grand Forks, N.D. 27 months
Dilion Breen - Grand Forks, N.D. 16 months
Scott Anthony- Grand Forks, N.D. 15 months
Allyson Desantos- Grand Forks, N.D. Probation
The case was investigated by Homeland Security Investigations, Drug Enforcement Administration, Food and Drug Administration, Internal Revenue Service, North Dakota Bureau of Criminal Investigation, and Grand Forks Police Department.First Assistant U.S. Attorney Chris Myers prosecuted the cases.
St. Francis Man Charged with Possession of A Firearm by A Prohibited PersonRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota, man has been indicted by a federal grand jury for Possession of a Firearm by a Prohibited Person.
Cody James Horse Looking, age 29, was indicted on August 19, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on August 22, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about February 15, 2014, Horse Looking, having previously been convicted of a misdemeanor crime of domestic violence, knowingly possessed a firearm, which had been shipped and transported in interstate and foreign commerce.
The charge is merely an accusation and Horse Looking is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Timothy M. Maher is prosecuting the case.
Horse Looking was released on bond pending trial. A trial date has not been set.