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Tuesday 13 May 2014
South Carolina State Former Counsel Pleads Guilty in Connection with Kickback SchemeRead the Press Release
Contact Person: Nancy Wicker (803) 929-3000
Charleston, South Carolina ----- The United States Attorney’s Office announced today that Edwin Donald Givens, age 50, of Columbia, South Carolina, pled guilty to an Information (copy attached) charging him with misprision of a felony in connection with a kickback scheme related to the 2011 South Carolina State University homecoming concert, in violation of Title 18, United States Code, Section 4.
United States District Judge David C. Norton of Charleston accepted the plea and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the plea hearing established that GIVENS had actual knowledge of the commission of a federal felony offense involving the solicitation, receipt and payment of kickbacks by others involved with the concert, and that he failed to disclose such knowledge and took affirmative steps to conceal such information from federal law enforcement agents investigating the scheme, both prior to and during a November 14, 2011, interview with agents of the Federal Bureau of Investigation.
The maximum penalty GIVENS can receive is three (3) years imprisonment and a $250,000 fine, plus a special assessment of $100.
The case was investigated by agents of the Federal Bureau of Investigation (FBI), the South Carolina Law Enforcement Division (SLED), the Department of Housing and Urban Development (HUD), the Office of Inspector General (HUD-OIG), and the Internal Revenue Service (IRS-CI). This case and its companion cases are being prosecuted by Assistant United States Attorneys Nancy C. Wicker, Jane B. Taylor, DeWayne Pearson and J.D. Rowell.
PDF - Givens InformationSibling Sentenced to 4 Months in Jail for Theft of Sister's Welfare BenefitsRead the Press Release
PORTLAND, Ore. – A Portland woman was sentenced to four months in jail for stealing more than $10,000 in benefits intended for her disabled sister. Killda I. Boutros, 46, appeared in federal court for sentencing last week after previously pleading guilty to Social Security fraud in November.
According to court records and Boutros’ admissions in court, Boutros became her sister’s Representative Payee in September 2006, which enabled her to receive her sister’s Supplemental Security Income (SSI), a needs-based benefit administered by the Social Security Administration (SSA). As the Representative Payee, Boutros was required to report to SSA if her sister left the United States for more than 30 days. While her sister and other family members were outside the United States for months at a time, Boutros failed to report to SSA as she repeatedly withdrew the benefits. The government also showed the court documents seized from the Boutros family residence that included receipts for restaurant meals, groceries, utilities, and rent that were intended to be used by Boutros as proof of her sister’s expenses. In fact, the receipts were for time periods that her sister was outside the United States, indicating Boutros saved receipts of her own expenses to deceive SSA.
Citing the nature and circumstances of the offense, including the fact that Boutros committed the offense within months of becoming a naturalized U.S. citizen, U.S. District Judge Michael Simon sentenced Boutros to four months in custody, despite her lack of criminal history and her assurances that she would not re-offend. She was further ordered to pay $142,337.10 in restitution to SSA and the U.S. Department of Health and Human Services for SSI and Medicaid benefits fraudulently obtained by other family members. Judge Simon also advised Boutros that the jail sentence should send a message of “general deterrence” to the public.
Boutros was ordered to begin her jail sentence on June 19, 2014. Boutros’ brother, Jason, was sentenced to six months in jail in March, and will begin serving his sentence May 19, 2014. Two family members also charged in the indictment remain fugitives.
This case was investigated by agents for the Medicaid Fraud Unit, the Department of Health and Human Services, and the Social Security Administration, Office of Inspector General. The case was prosecuted by Special Assistant United States Attorney Helen L. Cooper as part of a partnership venture between the U.S. Attorney’s Office in Portland, Oregon, and the Seattle Region of the Social Security Administration, Office of the General Counsel.
Santa Fe Man Pleads Guilty to Federal Crack Cocaine and Firearms ChargesRead the Press Release
ALBUQUERQUE – Robert Romero, 26, of Santa Fe, N.M., pleaded guilty today to federal narcotics trafficking and firearms charges. Under the terms of his plea agreement, Romero will be sentenced to ten years in federal prison followed by four years of supervised release.
Romero was one of five men who were indicted in April 2013, on federal narcotics and firearms charges as the result of “Operation Rio Grande Stucco,” a DEA led investigation into an organization that allegedly manufactured and distributed cocaine base, more commonly known as “crack” or “crack cocaine,” in Santa Fe and Bernalillo Counties, N.M.
The five-count indictment charged Romero and his co-defendants, Gabriel Mirabal, 32, Dominic Anaya, 33, and Sam Elyicio, 37, of Albuquerque, and Michael Jaramillo, 24, of Santa Fe, with conspiring to distribute cocaine base in Bernalillo and Santa Fe Counties between May 2012 and April 2013. Jaramillo also was charged with distributing crack cocaine in Santa Fe in March 2012 and Romero was charged with possession of crack cocaine with intent to distribute in Santa Fe in July 2012. Romero also was charged with using and carrying a firearm in furtherance of a drug trafficking crime. Mirabal also was charged with possessing cocaine with intent to distribute in Albuquerque in Feb. 2013. Mirabal, Jaramillo and Elyicio were arrested in April 2013, while Romero and Anaya were transferred from state custody to federal custody in July 2013.
Today Romero pled guilty to Counts 1, 3 and 4 of the indictment charging him with conspiracy to distribute crack cocaine, possession of crack cocaine with intent to distribute, and possession of a firearm in furtherance of a drug trafficking crime, respectively. According to the plea agreement, Romero conspired with his co-defendants to distribute more than 280 grams of crack cocaine. On July 2012, Romero was stopped by law enforcement officers who found 11.1 grams of crack cocaine in Romero’s vehicle, which was packaged for resale, and a handgun Romero used for protection while distributing drugs. Romero remains in federal custody pending his sentencing hearing which has yet to be scheduled.
Co-defendant Jaramillo entered a guilty plea on March 21, 2014, to Count 1 of the indictment charging him with conspiracy to distribute crack cocaine. According to his plea agreement, Jaramillo purchased crack cocaine from co-defendants Mirabal and Anaya and then resold it others. Under the terms of his plea agreement, Jaramillo will be sentenced to 78 months in federal prison followed by four years of supervised release. He remains in custody pending his sentencing hearing.
Mirabal, Anaya and Elyicio have entered not guilty pleas to the indictment. If convicted of the drug trafficking charges against them, each faces a maximum penalty of not less than five years or more than 40 years in prison. They remain in custody pending trial. An indictment is merely an accusation, and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA and the HIDTA Region III Drug Task Force, with assistance from the 1st Judicial District Attorney’s Office for the State of New Mexico, and is being prosecuted by Assistant U.S. Attorney Nicholas J. Ganjei.
The Region III Drug Task Force is comprised of officers from the New Mexico State Police, Santa Fe Police Department and the Santa Fe County Sheriff’s Office and receives support from the HIDTA – High Intensity Drug Trafficking Area – program. HIDTA is a program of the White House Office of National Drug Control Policy that provides assistance to Federal, state, local, and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States.
The investigation leading to the indictment, has been designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program, a nationwide Department of Justice initiative that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
Ridgeview Man Sentenced for Possession of A Firearm by A Prohibited PersonRead the Press Release
United States Attorney Brendan V. Johnson announced that a Ridgeview, South Dakota, man convicted of Possession of a Firearm by a Prohibited Person was sentenced on May 12, 2014, by U.S. District Judge Roberto A. Lange.
Gary Big Eagle, age 50, was sentenced to 10 months in custody, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Big Eagle was indicted for Possession of a Firearm by a Prohibited Person by a federal grand jury on September 17, 2013. He pled guilty to the Indictment on February 11, 2014.
The conviction stems from an incident that took place on May 23, 2013, when a Cheyenne River Sioux Tribe Police Officer responded to a call. The officer entered the residence from where the call originated and was told that Big Eagle, who had been staying at the residence, was a convicted felon who had taken a rifle from the owner and refused to give it back. The officers found a rifle in the room where Big Eagle was staying. Big Eagle admitted he had been previously convicted of a felony and that he had not applied to be able to legally possess a firearm. He further acknowledged that the rifle in the room belonged to his mother, and that he used it to shoot skunks and snakes around the property.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Assistant U.S. Attorney Jay Miller.
Big Eagle was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Rapper Gucci Mane Pleads Guilty to Federal Firearms CrimeRead the Press Release
ATLANTA - Radric Davis, a/k/a Gucci Mane, who is a previously convicted felon, has pleaded guilty to illegally possessing a gun.
“Davis has a long history of violence and of illegally possessing and using guns," said United States Attorney Sally Quillian Yates. “This Office will prosecute those who illegally possess firearms, especially when, as Davis did, they have a history of violence and threaten others with firearms. Our priority is to take violent repeat offenders off our streets to build safer communities.”
“The criminal history of the defendant, Radric Davis shows a complete and utter disregard for the lives of others as well as for their personal pursuits,” said ATF Acting Special Agent in Charge Aladino Ortiz. “As an agency and unified law enforcement community, we will not tolerate armed violent felons continually terrorizing and reducing the quality of life in the neighborhoods where we live, work, and play.”
“The Atlanta Police Department is constantly working to prevent and solve crime in the City of Atlanta. The arrest and conviction of Mr. Radric Davis ensures that we are one step closer to making Atlanta the safest big city in the nation. Our partnership with the U.S. Attorney’s Office is the best example of how we all work together to keep criminals in prison and off our streets”, said Atlanta Police Chief George N. Turner.
According to United States Attorney Yates, the charges and other information presented in court: On Sept. 14, 2013, the Atlanta Police Department received a call from a concerned citizen, who told police that Davis was acting violent and had a handgun. Police found the defendant on the street, smelling strongly of marijuana, with a Glock, 40 cal. handgun loaded with 11 rounds of ammunition in his possession. When police arrived, Davis was waving the handgun and making threatening comments.
As part of the plea agreement, the district court, upon accepting the plea, will sentence Davis, 34, of Atlanta, Ga. to serve 39-months in a federal prison for his crime. Sentencing has been set for July 28, 2014, at 11:30 a.m., before United States District Court Judge Steve C. Jones.
This case is being investigated by the Atlanta Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives.Assistant United States Attorney Kim S. Dammers is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Prince George’s County Developer Daniel Colton Sentenced to Prison in Extortion SchemeRead the Press Release
Last of 17 Defendants to be Sentenced in Broad Extortion Scheme
that Arose from a Pay-to-Play Culture in Prince George’s CountyGreenbelt, Maryland – U.S. District Judge Peter J. Messitte sentenced Prince George’s developer Daniel Ira Colton, age 64, a resident of Annapolis, Maryland and Raleigh, North Carolina, today to two years in prison followed by three years of supervised release for conspiracy to commit extortion and to make false statements to the Federal Election Commission. Judge Messitte also entered an order that Colton pay a $50,000 fine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to court documents, in early 2006, FBI and IRS-CI agents began investigating allegations of corruption, campaign finance violations, and tax fraud related to several real estate developers in Maryland and their relationships with Prince George’s County officials. The investigation uncovered a far-reaching corruption scheme centered around a “pay to play” culture in the county, orchestrated by then County Executive Jack Johnson and other public officials, in which real estate developers, including Colton, and business owners provided things of value to public officials and their surrogates in return for official acts.
Colton was a prominent developer in Prince George’s County. Colton and other co-conspirators, including developer Patrick Ricker and retired Prince George’s County Fire Department official Karl Granzow, had an ownership interest in Greenbelt Metropark, which sought to design, develop and build a mixed-use project near the Greenbelt Metro Station, called Greenbelt Station. Colton, Ricker and their co-conspirators also had an interest in Day Homes, which was incorporated to construct single family homes in Maryland, and was involved in several development projects in the county.
According to Colton’s guilty plea and court documents, from 1997 through at least September 11, 2008, Colton, Ricker, Granzow and other business persons offered money, trip expenses, meals, drinks, hotel rooms, airline tickets, rounds of golf, employment, mortgage payments, and monetary and in-kind campaign contributions to state and local government officials, including former Director of Prince George’s County Department of Housing and Community Development James Edward Johnson. During much of the conspiracy, from 2001 through 2004, Colton was serving a 38 month federal sentence arising from his convictions in federal court in Greenbelt for conspiracy and bank fraud, related to several development projects in Maryland and a loss to the victim bank of $15 million to $20 million.
In exchange for the bribes, state and local officials performed and agreed to perform favorable official actions for Colton, Ricker, Granzow and other developers, business owners and their companies, including obtaining approval letters for the Greenbelt Station Detailed Site Plan; assisting in the acquisition of surplus property and land from the county for development by Day Homes; providing the conspirators with non-public county information; obtaining necessary state and local approvals and permits for Greenbelt Station and other developments and businesses in the county; voting in favor of legislation favorable to their development projects; and, ensuring that a certain developer would obtain a contract to purchase certain buildings for the county.
State and local officials concealed items they received from Colton and his co-conspirators by failing to report them or by misrepresenting their nature and value. Further, Colton and his co-conspirators concealed campaign contributions to the state and local officials that were above state and federal legal limits by using conduits and in-kind contributions. Specifically, Colton and his co-conspirators recruited “straw donors,” including family members and employees, to make state and federal campaign contributions with funds provided by or reimbursed by Colton and his co-conspirators. Colton and his co-conspirators also provided in-kind contributions to conceal the actual amount of their campaign contributions, such as campaign signs, food, alcohol and the administrative services of their employees and family members.
During the scheme, Colton, Ricker, Granzow and others conspired to provide between $400,000 and $1 million in bribes to public officials in return for official action. Colton pleaded guilty under seal to the charges on September 13, 2010.
James Edward Johnson, age 69, of Temple Hills, Maryland, pleaded guilty to conspiring to commit extortion and was sentenced on April 16, 2012 to 37 months in prison. Judge Messitte also entered an order requiring James Johnson to pay a fine of $25,000 and to forfeit $46,300 that was seized from his safe deposit box.
Patrick Q. Ricker, age 55, of Bowie, Maryland, pleaded guilty on December 30, 2009 to conspiring to commit honest services fraud and to make false statements to the Federal Election Commission; and to tax evasion. His plea was also entered under seal and was unsealed on May 17, 2011. Judge Messitte sentenced Ricker on November 16, 2012 to one year and a day in prison, and also entered an order that Ricker pay restitution of $250,000.
Karl Granzow, age 49, of Upper Marlboro, Maryland, previously pleaded guilty to conspiring to commit extortion and cause false statements to be filed with the Federal Election Commission, and to income tax evasion. Judge Messitte sentenced Granzow on October 3, 2012 to 18 months in prison, and entered an order that Granzow pay a fine of $10,000 and forfeit his financial interest in Greenbelt Metropark.
A total of 17 defendants have been convicted in the related investigations of corruption in Prince George’s County, including Jack Johnson, then County Executive and former State’s Attorney; Leslie Johnson, an elected County Councilwoman and Jack Johnson’s wife; Mirza Hussain Baig, a physician and developer in the County; Amrik Singh Melhi, an owner of numerous businesses in the County; and, Ravinder Melhi, an owner of numerous businesses in the county. These individuals also pleaded guilty to extortion, bribery, state and federal campaign finance violations, and fraud, which all evolved from the pay-to-play culture in the county. They have been sentenced to up to 87 months in prison (Jack Johnson).
United States Attorney Rod J. Rosenstein praised the FBI and IRS-CI for their work in the investigation and thanked the Prince George’s County Police Department for its assistance. Mr. Rosenstein thanked Assistant United States Attorneys James A. Crowell IV, A. David Copperthite and Sujit Raman, who prosecuted these cases.
Possession of Multiple Counterfeit Credit Cards Leads to Federal IndictmentRead the Press Release
McALLEN, Texas – A federal grand jury in McAllen has indicted Alfredo Alejandro Alvarez-Mendicuti, 35, of Mexico, for possessing 31 counterfeit credit cards with the intent to defraud, announced U.S. Attorney Kenneth Magidson.
According to the criminal complaint originally filed in the case, Alvarez-Mendicuti was arrested on April 25, 2014, at the Anzalduas Port of Entry after the 31 cards were found hidden in his waist and leg areas. He was allegedly attempting to enter the U.S. from Mexico with a revoked passport, according to the charges. He allegedly intended to use the fake cards to shop in McAllen.He made his initial appearance on April 28, 2014, before U.S. Magistrate Judge Peter E. Ormsby who ordered him to remain in custody pending further criminal proceedings.
If convicted, Alvarez faces up to 10 years in federal prison without parole and a fine of up to $250,000.
This case is being investigated by the Secret Service. Assistant U.S. Attorney Christopher Sully is prosecuting the case.
Philadelphia Man Indicted on Gun ChargesRead the Press Release
An indictment was unsealed today charging Joshua Moses, a/k/a “Roy R. Moses,” 32, of Philadelphia, Pennsylvania, with two counts of convicted felon in possession of firearm, announced United States Attorney Zane D. Memeger.
If convicted, defendant faces a maximum of 20 years in prison, three years of supervised release, and a $500,000 fine.
This case is part of Project Safe Neighborhoods, a federal initiative designed to identify and prosecute firearms offenders in federal court, where the defendant is likely to receive a substantial sentence upon conviction.
This case was investigated by the Bureau of Alcohol, Tobacco & Firearms and is being prosecuted by Assistant United States Attorney Ewald Zittlau.
Click here to view the indictment
An Indictment or Information 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, 215-861-8525Pasco Man Sentenced to 20 Years in Federal Prison for Production of Child PornographyRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Alton V. Morehead, age 36, of Pasco, Washington, was sentenced today for Production of Child Pornography. Senior United States District Court Judge Edward F. Shea sentenced Morehead to a twenty year term of imprisonment, to be followed by a 25 year term of court supervision after he is released from Federal prison. Morehead will also be required to register as a sex offender.
According to information disclosed during the court proceedings, in May 2012, a Special Agent with Homeland Security Investigations (HSI) accessed a photo hosting website and found a profile with an associated e-mail address that contained multiple risqué photos of children. HSI commenced investigation and obtained further information about the associated e-mail account, determining the account holder was Alton V. Morehead of Pasco, Washington.
On May 23, 2013, HSI Special Agents obtained a search warrant for Morehead's e-mail account. Agents discovered child pornography which Morehead had received over the internet. Additional e-mail accounts were subsequently identified as being utilized by Morehead. The e-mail accounts were used both for receipt of child pornography and distribution of child pornography produced by Morehead of several minors left in his care. Special Agents interviewed Morehead, who admitted his criminal conduct.
Michael C. Ormsby stated, "Prosecuting those who produce and distribute pornographic images of vulnerable minors is a priority of the United States Attorney's Office for the Eastern District of Washington. This Office dedicates significant resources to prosecuting such cases and seeks appropriate punishment."
"This is another example of what we see all too often, a trader of child pornography himself exploiting children to produce illicit images," said Brad Bench, Special Agent in Charge of HSI Seattle. "Every day, HSI Special Agents pursue individuals who prey on children for their self-gratification. This significant sentence comes as a result of such an investigation."
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. The Project Safe Childhood Initiative ("PSC") has five major components:
- Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue child victims;
- Participation of PSC partners in coordinated national initiatives;
- Increased federal enforcement in child pornography and enticement cases;
- Training of federal, state, and local law enforcement agents; and
- Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources".
This investigation was conducted by Homeland Security Investigations. The case was prosecuted by Alison L. Gregoire, an Assistant United States Attorney for the Eastern District of Washington.
13-CR-6047-EFS
Pasco Man Sentenced for Heroin TraffickingRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Arnulfo Gomez Tejeda, age 39, of Pasco, Washington, was sentenced today after having previously pleaded guilty on September 12, 2013, to possession with intent to distribute heroin. Senior United States District Court Judge Edward F. Shea sentenced Tejeda to an 18 year term of imprisonment, to be followed by a 10 year term of court supervision upon release from prison.
According to information disclosed during the court proceedings, in December of 2012, Special Agents with the Drug Enforcement Administration and officers with the Tri-City Metro Drug Task Force made multiple purchases of controlled substances from Tejeda. On January 4, 2013, law enforcement officers executed search warrants on Tejeda's vehicles and at his residence in Pasco, Washington. The officers discovered methamphetamine, heroin, cocaine, and a marijuana growing operation, as well as multiple firearms. Tejeda has multiple felony convictions.
Michael C. Ormsby said, "This prosecution was made possible because of the strong partnership among the Tri-City Metro Drug Task Force, the Drug Enforcement Administration, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The cross-designation of the Task Force officers working within the Drug Enforcement Administration facilitated the federal prosecution of this case. The United States Attorney's Office for the Eastern District of Washington is committed to prosecuting and seeking just punishment for those who distribute drugs in our communities."
This case was investigated by the cooperative efforts of the Tri-City Metro Drug Task Force, Drug Enforcement Administration, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Alison L. Gregoire, an Assistant United States Attorney for the Eastern District of Washington.
13-CR-0012-EFS
Palm Bay Man Sentenced to over 8 Years for Distributing Child PornographyRead the Press Release
Orlando, Florida – U.S. District Judge Roy B. Dalton, Jr. yesterday sentenced Keith William Davey, Jr. (28, Palm Bay) to 8 years and one month in federal prison for distributing child pornography. Davey is also required to register as a sex offender and to serve a 5-year term of supervision, following his release from prison. The court also ordered Davey to forfeit his computer equipment.
Davey pleaded guilty on February 11, 2014.
According to court documents, in November 2013, an undercover agent working in Portland, Maine initiated contact with Davey over the Internet. Davey believed that the agent was interested in child pornography and discussed trading images with the agent. On November 6, 2013, and again on November 8, 2013, Davey used the Yahoo Messenger photo sharing feature to send the agent images of child pornography, including images of prepubescent female children being sexually abused and exploited by adult males. Davey used his Yahoo Messenger screen name to transmit the images. Law enforcement agents executed a search at Davey’s Palm Bay residence, and during an interview, Davey admitted to sending the child pornography to the undercover agent and that he had obtained child pornography from the Internet. Agents also recovered Davey’s desktop computer and his SD card from his residence. These devices contained additional images of child pornography, including some of the images that Davey had distributed to the undercover agent.
This case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), with assistance from the Brevard County Sheriff's Office. It was prosecuted by Assistant United States Attorney Andrew C. Searle.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Oxford Resident Charged with Running Ponzi SchemeRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that ROBERT E. LEE, JR., 50, of Oxford, was arrested yesterday on a federal criminal complaint charging him with defrauding multiple investors via a Ponzi scheme.
As alleged in the criminal complaint, LEE was employed as a broker and financial advisor for various financial investment firms until July 2013 when he was terminated by his most recent employer, Rockwell Global Capital, LLC. Between January 2011 and March 2014, LEE defrauded individuals by claiming that he was investing their money in various investment vehicles when, in fact, he was maintaining custody of their funds in his personal bank account. He then used the money to make distributions to other investors, and for personal expenses. To conceal the scheme, LEE fabricated account statements and other documents, which he delivered to his victims. Victims lost several million dollars as a result of this scheme.
LEE was arrested yesterday at his residence. He then appeared before U.S. Magistrate Judge Joan G. Margolis in New Haven and was released on $250,000 bond.
The criminal complaint charges LEE with wire fraud, an offense that carries a maximum term of imprisonment of 20 years.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Christopher M. Mattei.
Citizens with information that may be helpful to this ongoing investigation are encouraged to contact the FBI at (203) 777-6311.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]New York Man Admits Role in International $200 Million Credit Card Fraud ConspiracyRead the Press Release
TRENTON, N.J. – A New York man today admitted his role in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.
Khawaja Ikram, 41, of Staten Island, N.Y., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiracy to commit bank fraud. Two co-defendants, Tarsem Lal, 73, of Iselin, N.J., and Azhar Ikram, 40, of Howard Beach, N.Y., pleaded guilty before Judge Thompson in Trenton on April 2, 2014, to informations charging them with conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:Khawaja Ikram was originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; and finally, run up large loans.
The scope of the criminal fraud enterprise required Ikram and his conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses of the false identities.
Ikram admitted he helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. He also admitted he knew the cards would be used fraudulently at businesses.
The charge to which Ikram pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Sept. 23, 2014. Azhar Ikram and Lal are scheduled to be sentenced Sept. 17, 2014,
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors, under the direction of Postal Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, for the investigation leading to today’s guilty plea. He also thanked the U.S. Social Security Administration for its role in the investigation.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit in Newark.This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established 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 nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
14-165
Defense counsel: Neil G. Duffy III Esq., Union, N.J.Ikram, Khawaja Information
Morgantown Resident Convicted on Tax Evasion ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Mitch BROZIK, a 52-year old Morgantown, West Virginia, resident appeared in United States District Court before Magistrate Judge John S. Kaull and entered a plea of guilty to “Obstructing and Impeding the Administration of the Internal Revenue Service.” Between 2005 and 2010, BROZIK concealed a corporate bank account that he used for personal expenses, providing inaccurate tax information to his personal accountants. BROZIK also made false statements to IRS Special Agents about the accuracy of his personal tax returns, his knowledge of personal expenses charged to corporate credit cards, and the existence of a corporate bank account that was not included in corporate records. BROZIK, who is free on bond, faces up to 3 years in prison.
This case was prosecuted by Assistant U.S. Attorney Andrew R. Cogar and investigated by the Internal Revenue Service-Criminal Investigations.
Mexican National Sentenced for Meth, Illegally Entering U.S.Read the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Mexican national was sentenced in federal court today for possessing methamphetamine that she intended to distribute in Morgan County, Mo., and for illegally reentering the United States.
Maria Teresa Marrufo, 48, a citizen of Mexico residing in Gardner, Kan., was sentenced by U.S. District Judge Fernando J. Gaitan to 10 years in federal prison without parole.
On Aug. 19, 2013, Marrufo pleaded guilty to possessing methamphetamine with the intent to distribute and to illegally reentering the United States after having been deported.
According to court documents, Marrufo was arrested in Morgan County while delivering 224 grams of pure methamphetamine. Her 16-year-old son was driving the car, and Maruffo, the passenger, provided an alias when confronted by officers.
At the time she committed this offense, Maruffo was still on supervised release for a prior drug offense. Maruffo was convicted of two drug-trafficking felonies for attempting to smuggle marijuana into the United States. After being charged and released, Maruffo absconded and remained a fugitive from justice for 12 years. She was deported in 2012, but illegally reentered the United States and resumed her illegal drug-trafficking activities.
This case was prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the Drug Enforcement Administration, the Morgan County, Mo., Sheriff’s Department and the Mid-Missouri Drug Task Force.
Metro Station Armed Carjacker Sentenced to over 17 Years in PrisonRead the Press Release
Carjacking Victim Shot and Seriously Injured
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Samuel Damien Bynum, age 24, of Washington, D.C., today to 207 months in prison, followed by five years of supervised release, for conspiring to use a gun during carjackings, using a gun during a carjacking, carjacking and being a felon in possession of a gun and ammunition.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Director in Charge Valerie Parlave of the Federal Bureau of Investigation’s Washington Field Office; Chief Mark A. Magaw of the Prince George’s County Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; Chief J. Thomas Manger of the Montgomery County Police Department; Montgomery County State’s Attorney John McCarthy; and Maryland Attorney General Douglas F. Gansler.
“Through coordinated efforts of local, state and federal law enforcement agencies, a gang of dangerous carjackers has been put out of business,” said U.S. Attorney Rod J. Rosenstein.
According to his plea agreement, beginning in January 2011, Bynum conspired with others to commit armed carjackings in Prince George’s and Montgomery Counties. On May 25, 2011, Bynum and co-conspirators drove to the Largo Metro Station in Largo, Maryland in a car they had stolen during a carjacking at the New Carrollton Metro Station a few days earlier. Bynum saw two people park their Camaro in the garage and followed them into the stairwell. Bynum told law enforcement that he blocked the stairwell so that his co-conspirators, who were armed with handguns, could rob the victims. Bynum or a conspirator hit one of the victims with a handgun, but they were unable to steal the victim’s car keys. Bynum and his conspirators fled, but returned a short time later to steal the Camaro after finding the keys to the car during their flight. Upon returning to the area, a co-conspirator gave Bynum one of the handguns and told Bynum to start shooting if the victims did anything. As one of the victims attempted to get into the car, Bynum and his conspirators shot several times at both victims. One of the victims was struck by a bullet and suffered permanent bodily injury requiring significant and ongoing medical attention.
Two alleged co-conspirators are being prosecuted federally and another was prosecuted in state court.
Bynum had previously purchased the handgun he used in the carjacking. Bynum had previously been convicted of a felony and was prohibited from possessing a gun and ammunition.
United States Attorney Rod J. Rosenstein commended the FBI, the Prince George’s and Montgomery Counties Police Departments and State’s Attorney’s Offices, and Maryland Attorney General’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant United States Attorney Thomas M. Sullivan and Special Assistant United States Attorney Gerald A. A. Collins, a cross designated Maryland Assistant Attorney General assigned to Exile cases, who prosecuted the case.Member of Cherry Hill Group ‘Little Spelman’ Pleads Guilty to Racketeering Conspiracy, Including MurderRead the Press Release
Murdered a Drug Rival and Helped a Conspirator Murder a Rival Drug Gang Member
Baltimore, Maryland – Dontay Purnell, age 27, of Baltimore, pleaded guilty today to conspiracy to participate in a racketeering enterprise, related to his drug dealing and violence in the Cherry Hill section of Baltimore.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.“Many of the shootings and murders in Baltimore City result from disputes between rival drug gangs,” said U.S. Attorney Rod J. Rosenstein. “Thanks to a lengthy and intensive investigation, we will hold accountable the criminals who turned Cherry Hill into a war zone.”
According to his plea agreement, from at least 2003 to 2013, Purnell was a member of a group known as “Little Spelman” in the “down the hill” area of Cherry Hill. This group committed robberies, homicides, non-fatal shootings and distributed crack cocaine, heroin, cocaine and marijuana. As a member of this group, it was foreseeable to Purnell that the Little Spelman group was responsible for distributing at least a kilogram of heroin, five kilograms or more of cocaine, 280 grams or more of cocaine base and a quantity of marijuana.In addition to selling drugs, Purnell was recruited to shoot and kill a drug rival, Vincent Paige, in order to expand the group’s drug territory. On April 20, 2006, Purnell approached Paige on the 3400 block of Spelman Road in Cherry Hill and told him he could no longer sell drugs there. Paige said he would be back and Purnell saw him go to a stash location where Paige stored drugs and weapons. Purnell approached Paige and shot him three times, killing Paige.
On April 9, 2011, Little Spelman group member Davon Martin shot and killed Dwight Taylor at a barbershop on W. Saratoga Street in Baltimore. Dwight Taylor was a member of a rival drug group operating in Cherry Hill known as “Up Da Hill.” His murder was in retaliation for a previous murder of another Little Spelman group member. Purnell assisted Martin by serving as the lookout, standing on the corner of Park Avenue and Saratoga Street, while Martin murdered Taylor inside the barbershop. Purnell also helped Martin flee the scene and dispose of some of Martin’s clothes.
Purnell faces a maximum sentence of life in prison. U.S. District Judge George L. Russell, III has scheduled sentencing for August 8, 2014, at 9:00 a.m.
Davon Martin, age 25, of Baltimore, Maryland pleaded guilty on April 24, 2014 to his participation in the racketeering conspiracy, including two murders. Martin and the government have agreed that if the Court accepts the plea agreement he will be sentenced to between 30 and 35 years in prison. Judge Russell has scheduled Martin’s sentencing for July 18, 2014 at 9:30 a.m.
United States Attorney Rod J. Rosenstein praised the ATF, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation and thanked the FBI, Baltimore County Police Department, Anne Arundel County Police Department, and Baltimore City Sheriff’s Office for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys Andrea L. Smith and Brooke Carey, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Medicare Fraud Strike Force Charges 90 Individuals for Approximately $260 Million in False BillingRead the Press Release
Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in six cities has resulted in charges against 90 individuals, including 27 doctors, nurses and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $260 million in false billings.
Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, FBI Assistant Director Joseph Campbell, U.S. Department of Health and Human Services (HHS) Inspector General Daniel R. Levinson and Deputy Administrator and Director of the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity Shantanu Agrawal.
This coordinated takedown is the seventh national Medicare fraud takedown in Strike Force history. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since their inception in March 2007, Strike Force operations in nine locations have charged almost 1,900 defendants who collectively have falsely billed the Medicare program for almost $6 billion. In addition, CMS, working in conjunction with HHS-OIG, has suspended enrollments of high-risk providers in five Strike force locations and has removed over 17,000 providers from the Medicare program since 2011.
The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Almost 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units and other federal, state and local law enforcement agencies participated in the takedown.
“Medicare is a sacred compact with our nation’s seniors, and to protect it, we must remain aggressive in combating fraud,” said Attorney General Holder. “This nationwide Medicare Strike Force takedown represents another important step forward in our ongoing fight to safeguard taxpayer resources and to ensure the integrity of essential health care programs. Department of Justice will not tolerate these activities. And we will continue working alongside the Department of Health and Human Services – as well as federal, state, and local partners – to use every appropriate tool and available resource to find, stop, and punish those who seek to take advantage of their fellow citizens.”
“The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius. “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars. Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price. We will protect a sacred trust and an earned guarantee.”
The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment and pharmacy fraud.
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided. In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit approximately $260 million in fraudulent billings.
“Today, across the nation, scores of defendants were arrested for engaging in hundreds of millions of dollars in health care fraud,” said Acting Assistant Attorney General O’Neil. “Among the defendants charged were 27 medical professionals, including 16 doctors. The crimes charged represent the face of health care fraud today – doctors billing for services that were never rendered, supply companies providing motorized wheelchairs that were never needed, recruiters paying kickbacks to get Medicare billing numbers of patients. The fraud was rampant, it was brazen, and it permeated every part of the Medicare system. But law enforcement continues to strike back. Using cutting-edge, data-driven investigative techniques, we are bringing fraudsters to justice and saving the American taxpayers billions of dollars. Overall, since its inception, the Department of Justice’s Medicare Fraud Strike Force has charged nearly 1,900 individuals involved in approximately $6 billion of fraud. We are committed to using every tool at our disposal to prevent, deter, and prosecute health care fraud.”
“We all feel the effects of health care fraud,” said FBI Assistant Director Campbell. “It leads to higher health care costs and makes it harder for seniors and those who are ill to get the care they need. The FBI and our law enforcement partners are committed to preventing and prosecuting health care fraud at all levels. But we need the public’s help. Take the time to be aware of fraud and call law enforcement if you see anything suspicious included in the billings to your insurance, Medicare, or Medicaid or have any unusual encounters with health care providers. We can work together to ensure your hard-earned dollars are used to care for the sick and not to line the pockets of criminals.”
“ Today's arrests demonstrate the effectiveness of our Strike Forces in combating Medicare and Medicaid fraud,” said HHS Inspector General Levinson. “Through seamless teamwork, our agents and law enforcement partners bring lawbreakers to justice, protect beneficiaries and recover stolen taxpayer funds.”
“ Fraud can inflict real harm on Medicare beneficiaries and CMS is committed to working with our law enforcement partners to get criminals behind bars and out of the Medicare program as swiftly as possible,” said CMS Program Integrity Deputy Administrator Agrawal. “Today’s actions represent further consequences for bad actors, many of whom CMS had already stopped paying, or even kicked out of the program. Fundamentally, this is about protecting the well-being of our beneficiaries and the investment of taxpayer dollars.”
In Miami, a total of 50 defendants were charged today and yesterday for their alleged participation in various fraud schemes involving approximately $65.5 million in false billings for home health care and mental health services, and pharmacy fraud. In one case, two defendants were charged in connection with a $23 million pharmacy kickback and laundering scheme. Court documents allege that the defendants solicited kickbacks from a pharmacy owner for Medicare beneficiary information, which was used to bill for drugs that were never dispensed. The kickbacks were concealed as bi-weekly payments under a sham services contract and were laundered through shell entities owned by the defendants.
Eleven individuals were charged by the Houston Medicare Strike Force. Five Houston-area physicians were charged with conspiring to bill Medicare for medically unnecessary home health services. According to court documents, the defendant doctors were paid by two co-conspirators to sign off on home health care services that were not necessary and often never provided.
Eight defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $32 million. In one case, a doctor was charged for causing almost $24 million in losses to Medicare through his own fraudulent billing and referrals for durable medical equipment, including over 1,000 expensive power wheelchairs, and home health services that were not medically necessary and frequently not provided.
In Detroit, seven defendants were charged for their roles in fraud schemes involving approximately $30 million in false claims for medically unnecessary services, including home health services, psychotherapy and infusion therapy. In one case, four individuals, including a doctor, were charged in a sophisticated $28 million fraud scheme, where the physician billed for expensive tests, physical therapy and injections that were not necessary and not provided. Court documents allege that when the physician’s billings raised red flags, he was put on payment review by Medicare. He was allegedly able to continue his scheme and evade detection by continuing to bill using the billing information of other Medicare providers, sometimes without their knowledge.
In Tampa, Florida, seven individuals were charged in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions of dollars in physician services and tests that never occurred . In one case, five individuals were charged for their alleged roles in a $12 million health care fraud and money laundering scheme that involved billing Medicare using names of beneficiaries from Miami-Dade County for services purportedly provided in Tampa area clinics, 280 miles away. The defendants then allegedly laundered the proceeds through a number of transactions involving several shell entities.
In Brooklyn, New York, the Strike Force announced an indictment against Syed Imran Ahmed, M.D., in connection with his alleged $85 million scheme involving billings for surgeries that never occurred; Dr. Ahmed had been arrested last month and charged by complaint. Dr. Ahmed has charged with health care fraud and making false statements. In addition, the Brooklyn Strike Force charged six other individuals, including a physician and two billers who allegedly concocted a $14.4 million scheme in which they recruited elderly Medicare beneficiaries and billed Medicare for medically unnecessary vitamin infusions, diagnostic tests and physical and occupational therapy supposedly provided to these patients.
The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Eastern District of New York, the Southern District of Texas, the Central District of California, the Middle District of Louisiana, the Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.
A complaint or indictment is merely an accusation, and defendants are presumed innocent unless and until proven guilty.
To learn more about HEAT, go to: www.stopmedicarefraud.gov .
Court documents associated with this press release are available at: http://www.justice.gov/opa/mfsf-pc-2014. htmlMedicare Fraud Strike Force Charges 90 Individuals for Approximately $260 Million in False BillingRead the Press Release
27 Medical Professionals, Including 16 Doctors, Charged with Health Care Fraud
Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in six cities has resulted in charges against 90 individuals, including 27 doctors, nurses and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $260 million in false billings. .
Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, FBI Assistant Director Joseph Campbell, U.S. Department of Health and Human Services (HHS) Inspector General Daniel R. Levinson and Deputy Administrator and Director of the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity Shantanu Agrawal.
This coordinated takedown is the seventh national Medicare fraud takedown in Strike Force history. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since their inception in March 2007, Strike Force operations in nine locations have charged almost 1,900 defendants who collectively have falsely billed the Medicare program for almost $6 billion. In addition, CMS, working in conjunction with HHS-OIG, has suspended enrollments of high-risk providers in five Strike force locations and has removed over 17,000 providers from the Medicare program since 2011.
The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Almost 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units and other federal, state and local law enforcement agencies participated in the takedown.
“Medicare is a sacred compact with our nation’s seniors, and to protect it, we must remain aggressive in combating fraud,” said Attorney General Holder. “This nationwide Medicare Strike Force takedown represents another important step forward in our ongoing fight to safeguard taxpayer resources and to ensure the integrity of essential health care programs. Department of Justice will not tolerate these activities. And we will continue working alongside the Department of Health and Human Services – as well as federal, state, and local partners – to use every appropriate tool and available resource to find, stop, and punish those who seek to take advantage of their fellow citizens.”
“The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius. “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars. Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price. We will protect a sacred trust and an earned guarantee.”
The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment and pharmacy fraud.
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided. In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit approximately $260 million in fraudulent billings.
“Today, across the nation, scores of defendants were arrested for engaging in hundreds of millions of dollars in health care fraud,” said Acting Assistant Attorney General O’Neil. “Among the defendants charged were 27 medical professionals, including 16 doctors. The crimes charged represent the face of health care fraud today – doctors billing for services that were never rendered, supply companies providing motorized wheelchairs that were never needed, recruiters paying kickbacks to get Medicare billing numbers of patients. The fraud was rampant, it was brazen, and it permeated every part of the Medicare system. But law enforcement continues to strike back. Using cutting-edge, data-driven investigative techniques, we are bringing fraudsters to justice and saving the American taxpayers billions of dollars. Overall, since its inception, the Department of Justice’s Medicare Fraud Strike Force has charged nearly 1,900 individuals involved in approximately $6 billion of fraud. We are committed to using every tool at our disposal to prevent, deter, and prosecute health care fraud.”
“We all feel the effects of health care fraud,” said FBI Assistant Director Campbell. “It leads to higher health care costs and makes it harder for seniors and those who are ill to get the care they need. The FBI and our law enforcement partners are committed to preventing and prosecuting health care fraud at all levels. But we need the public’s help. Take the time to be aware of fraud and call law enforcement if you see anything suspicious included in the billings to your insurance, Medicare, or Medicaid or have any unusual encounters with health care providers. We can work together to ensure your hard-earned dollars are used to care for the sick and not to line the pockets of criminals.”
“Today's arrests demonstrate the effectiveness of our Strike Forces in combating Medicare and Medicaid fraud,” said HHS Inspector General Levinson. “Through seamless teamwork, our agents and law enforcement partners bring lawbreakers to justice, protect beneficiaries and recover stolen taxpayer funds.”
“Fraud can inflict real harm on Medicare beneficiaries and CMS is committed to working with our law enforcement partners to get criminals behind bars and out of the Medicare program as swiftly as possible,” said CMS Program Integrity Deputy Administrator Agrawal. “Today’s actions represent further consequences for bad actors, many of whom CMS had already stopped paying, or even kicked out of the program. Fundamentally, this is about protecting the well-being of our beneficiaries and the investment of taxpayer dollars.”
In Miami, a total of 50 defendants were charged today and yesterday for their alleged participation in various fraud schemes involving approximately $65.5 million in false billings for home health care and mental health services, and pharmacy fraud. In one case, two defendants were charged in connection with a $23 million pharmacy kickback and laundering scheme. Court documents allege that the defendants solicited kickbacks from a pharmacy owner for Medicare beneficiary information, which was used to bill for drugs that were never dispensed. The kickbacks were concealed as bi-weekly payments under a sham services contract and were laundered through shell entities owned by the defendants.
Eleven individuals were charged by the Houston Medicare Strike Force. Five Houston-area physicians were charged with conspiring to bill Medicare for medically unnecessary home health services. According to court documents, the defendant doctors were paid by two co-conspirators to sign off on home health care services that were not necessary and often never provided.
Eight defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $32 million. In one case, a doctor was charged for causing almost $24 million in losses to Medicare through his own fraudulent billing and referrals for durable medical equipment, including over 1,000 expensive power wheelchairs, and home health services that were not medically necessary and frequently not provided..
In Detroit, seven defendants were charged for their roles in fraud schemes involving approximately $30 million in false claims for medically unnecessary services, including home health services, psychotherapy and infusion therapy. In one case, four individuals, including a doctor, were charged in a sophisticated $28 million fraud scheme, where the physician billed for expensive tests, physical therapy and injections that were not necessary and not provided. Court documents allege that when the physician’s billings raised red flags, he was put on payment review by Medicare. He was allegedly able to continue his scheme and evade detection by continuing to bill using the billing information of other Medicare providers, sometimes without their knowledge.
In Tampa, Florida, seven individuals were charged in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions of dollars in physician services and tests that never occurred. In one case, five individuals were charged for their alleged roles in a $12 million health care fraud and money laundering scheme that involved billing Medicare using names of beneficiaries from Miami-Dade County for services purportedly provided in Tampa area clinics, 280 miles away. The defendants then allegedly laundered the proceeds through a number of transactions involving several shell entities.
In Brooklyn, New York, the Strike Force announced an indictment against Syed Imran Ahmed, M.D., in connection with his alleged $85 million scheme involving billings for surgeries that never occurred; Dr. Ahmed had been arrested last month and charged by complaint. Dr. Ahmed has charged with health care fraud and making false statements. In addition, the Brooklyn Strike Force charged six other individuals, including a physician and two billers who allegedly concocted a $14.4 million scheme in which they recruited elderly Medicare beneficiaries and billed Medicare for medically unnecessary vitamin infusions, diagnostic tests and physical and occupational therapy supposedly provided to these patients.
The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Eastern District of New York, the Southern District of Texas, the Central District of California, the Middle District of Louisiana, the Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.
A complaint or indictment is merely an accusation, and defendants are presumed innocent unless and until proven guilty.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorney Allan Medina of the Criminal Division’s Fraud Section.
To learn more about HEAT, go to: http://www.stopmedicarefraud.com.
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.
Manhattan U.S. Attorney Files and Settles Civil Fraud Lawsuit Against Subcontractor for Fraudulent Conduct That Violated Rules Designed to Encourage Participation of Minority and Women-Owned BusinessesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Robert E. Van Etten, Inspector General of the Port Authority of New York and New Jersey (the “Port Authority”), and Douglas Shoemaker, regional Special Agent-in-Charge of the U.S. Department of Transportation’s (“DOT”) Office of Inspector General, announced today that the United States has filed, and simultaneously settled, a civil fraud lawsuit against a subcontractor, MORETRENCH AMERICAN CORPORATION (“MORETRENCH”), for engaging in fraudulent conduct to exploit regulations designed to increase the role of minority-owned businesses in order to secure a subcontract on the federally-funded World Trade Center Transportation Hub project (the “HUB Project”). Specifically, MORETRENCH caused the prime contractor of the HUB Project to falsely represent to the Port Authority that MORETRENCH paid hundreds of thousands of dollars to a disadvantaged business enterprise (“DBE”) to perform legitimate work on the contract when, in fact, the DBE did not perform any significant work and instead simply received a kickback from MORETRENCH for the fraudulent use of its DBE status. In the settlement, approved in Manhattan federal court yesterday by U.S. District Judge Laura Taylor Swain, MORETRENCH admitted and accepted responsibility for violating the applicable regulations governing the Hub Project and agreed to pay $3 million. MORETRENCH further agreed to pay the Office of Inspector General of the Port Authority $50,000 for its investigative costs.
Manhattan U.S. Attorney Preet Bharara said: “The federal Disadvantaged Business Enterprise regulations and similar Port Authority rules serve the important function of increasing legitimate participation by minority-owned businesses in federally-funded construction projects. With this settlement, Moretrench has publicly admitted to fraudulently violating these rules and will pay a substantial fine as a consequence. I want to thank our partners at the Port Authority Office of Inspector General and the U.S. Department of Transportation’s Office of Inspector General for their work in this important case.”
Port Authority Inspector General Robert E. Van Etten said: “This investigation has shown how individuals in the construction industry have manipulated and circumvented the intent of the Port Authority’s Minority and Women’s Business Enterprise Program for the World Trade Center Transportation Hub project by utilizing firms as fronts to satisfy the Program goals. I would hope that this case serves as an incentive to the industry to adhere to the Program’s intent. I urge those with information of instances of other fraudulent practices to report them to law enforcement. Working with our law enforcement partners we will continue to vigilantly investigate allegations of fraud in the construction industry.”
Douglas Shoemaker, regional Special Agent-in-Charge of DOT’s Office of Inspector General, said: “As evidenced by Moretrench’s agreement to settle this lawsuit, we remain steadfast in our commitment to preventing and detecting fraud related to federally funded transportation programs. Working with our law enforcement and prosecutorial colleagues, we will continue to protect the taxpayers’ investment in our nation’s infrastructure from fraud, waste, abuse and violations of law.”
BACKGROUND ON DBEs
In 1980, the DOT issued regulations in connection with a program to increase the participation of minority and disadvantaged business enterprises in federally-funded public construction contracts. To become certified as a DBE, a company must, among other things, be owned and controlled by socially and economically disadvantaged individuals; be an independent business whose viability does not depend on its relationship with other firms; employ its own work force and own equipment necessary to perform its work; and be able to meet its financial obligations.
General contractors can count funds paid to DBEs toward the attainment of the DBE goals only if the DBEs performed a “commercially useful function.” A DBE subcontractor performs a commercially useful function only when it is responsible for the execution of the work of the contract; actually performs, manages, and supervises the work involved; and furnishes the supervision, labor, and equipment necessary to perform its work.
MORETRENCH’S FRAUD
According to the allegations in the complaint:
As a condition of receiving DOT funding, the Port Authority set Minority Business Enterprise (“MBE”) and Women’s Business Enterprise (“WBE”) goals for the HUB Project. DOT determined that, with respect to the HUB Project, the Port Authority was permitted to follow its own MBE and WBE rules as they were substantially equivalent to the federal DBE regulations. MORETRENCH was hired as a subcontractor on the HUB Project and, as part of its contract, was required to use its best efforts to obtain seventeen percent MBE/WBE participation. MORETRENCH represented that it had hired Environmental Energy Associates, LLC (“EEA”) as a subcontractor to operate the dewatering system for the HUB Project (dewatering is the removal of groundwater). However, EEA operated as a shell company. EEA and MORETRENCH had an arrangement whereby MORETRENCH hired the pump operators, supervised the job site and assembled bi-weekly payrolls. In order to give the appearance that EEA was performing a legitimate role as an MBE, several pump operators, who were already working on the job site as MORETRENCH employees, were switched to EEA’s payroll. EEA’s payroll paperwork was assembled by MORETRENCH employees, but listed EEA as the contractor. EEA received a mark-up on the payroll records as compensation for the use of its MBE status. As part of its requests for payment, MORETRENCH prepared reports to the Port Authority falsely representing that MORETRENCH paid EEA for work performed on the project when in fact MORETRENCH was performing the work itself.
Pursuant to the settlement agreement, MORETRENCH admitted, acknowledged, and accepted responsibility for making and causing false statements to be made in violation of applicable regulations designed to encourage the participation of disadvantaged business enterprises in federally-funded construction projects. MORETRENCH also agreed to pay the United States $3 million.
Mr. Bharara praised the Port Authority Office of Inspector General and the U.S. Department of Transportation’s Office of Inspector General for their invaluable work on this case. He also thanked the Metropolitan Transportation Authority Office of Inspector General and the United States Department of Labor Office of Inspector General for their assistance.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Mara Trager and Ellen London are in charge of the case.
Moretrench Complaint14cv3250
Moretrench endorsed stipulationMail and Identity Theft Results in Three and a Half Year Federal SentenceRead the Press Release
Southern Oregon Victims the Subject of Identity Theft and FraudMEDFORD, Ore. - Michelle Renee Lustig, 45, of Grants Pass, Oregon, was sentenced to 42 months in federal prison by Senior U.S. District Judge Owen M. Panner, after her convictions for conspiracy to commit mail theft, conspiracy to commit bank fraud and aggravated identity theft. As part of her sentence, Lustig received a mandatory consecutive term of two years in prison required by federal statute where a victim’s identification was possessed or used in committing bank fraud. Lustig was also ordered to pay $12,387.06 in restitution to victims of the fraud. Her co-defendant, Gregory Stephen Brooks, 50, also of Grants Pass, Oregon, was sentenced last month by Judge Panner to 81 months in federal prison.
Between March 2013 and July 2013, Lustig and Brooks stole substantial quantities of mail from the mailboxes of over 400 victims in Jackson and Josephine Counties. Some of the stolen mail was recovered discarded along the roadside, and two boxes of stolen mail, which included financial instruments, were recovered from a U-Haul truck being used by Lustig and Brooks. Additional boxes of stolen mail were recovered from a residence where they both were staying in Grants Pass. The two forged and deposited stolen checks, and used stolen debit and credit cards for making withdrawals from victim bank accounts and fraudulent retail purchases. They also used victims’ personal identification to apply for and obtain credit and debit cards from victim companies. When Lustig was arrested, law enforcement discovered additional stolen mail in her car, including mail previously stolen that was in the process of being returned by postal authorities to earlier victims from the Onion Mountain area of Josephine County.
This case was investigated by the Jackson County Sheriff’s office, Grants Pass Department of Public Safety and the U.S. Postal Inspection Service, and was prosecuted by Assistant U. S. Attorney Byron Chatfield.
Luzerne County Woman Sentenced to 26 Months for Tampering with A Consumer ProductRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced that Yolanda Holman, age 35, Wilkes-Barre, was sentenced today in federal court in Scranton for tampering with a consumer product. Senior U.S. District Court Judge Richard P. Conaboy sentenced Holman to 26 months incarceration followed by 2 years of supervised release.
According to United States Attorney Peter J. Smith, a Criminal Information filed on December 19, 2013 charged that Holman knowingly and intentionally tainted a bottle of Children’s Advil on August 23, 2013 with prescription pills and other medication. Holman waived indictment and entered a guilty plea on February 4, 2014.
All of the tainted containers were recovered and are in the possession of law enforcement officers or otherwise destroyed. The tainted containers presented no danger to the public. The retail store where the Advil was purchased cooperated with federal authorities.
The investigation was conducted by agents of the Federal Bureau of Investigation – Scranton Resident Office. The case was prosecuted by Assistant United States Attorney Michelle Olshefski.Luzerne County Man Pleads Guilty to Heroin ConspiracyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a West Pittston resident pleaded guilty today before Senior U.S. District Court Judge James M. Munley to participating in a drug conspiracy that distributed heroin to others during a 13-month time period.
According to United States Attorney Peter Smith, the defendant, Robert Romasiewicz, age 20, admitted to regularly obtaining heroin in New Jersey and distributing it to others on multiple occasions in Luzerne County during January 2013 through February 24, 2014.
The charge against Romasiewicz resulted from an investigation by the Federal Bureau of Investigation.
Romasiewicz faces a potential maximum sentence of 20 years in prison and a $1 million fine. Sentencing was scheduled for August 26, 2014.
Romasiewicz also agreed to forfeit two firearms seized by agents during the investigation.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Leader of Real Estate Flipping Scheme IndictedRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces the return by a grand jury of an indictment charging Stephen Mayer (50, Miami Beach) with one count of conspiracy to commit wire fraud affecting a financial institution. If convicted, Mayer faces a maximum penalty of 30 years in federal prison. The indictment also notifies Mayer that the United States intends to forfeit any assets that are alleged to be traceable to proceeds of the offense.
On April 29, 2014, Mayer was arrested on a federal complaint and detained in Miami.
According to court documents, Mayer engineered a complex real estate flipping scheme involving different participants and shell companies under his control. From approximately September 18, 2003 and continuing through at least September 14, 2007, Mayer defrauded lenders by causing mortgages to be issued based on fraudulent information provided by several “straw buyers” whom he recruited. Mayer facilitated the scheme utilizing several Florida corporations, including InvestFund Corp USA, Inc., and Regal Windsor Homes, Inc.
Between September and March 2005, Mayer bought at least 24 properties in Hillsborough County for approximately $2,341,000. He resold these same properties, usually on the same day, to his “investors” for approximately $3,723,290. The transactions resulted in a net profit of approximately $1,528,790. The purchasers of these properties, known as “straw buyers,” were recruited by Mayer to utilize their good credit in order to obtain mortgage loans for purchases. The “straw buyers” subsequently transferred the titles back to Mayer, and/or one of Mayer’s companies, by quit claim deed. Mayer would facilitate the transfer of properties between his various investors, each time inflating the prices. When these properties were later resold at even greater prices, Mayer again profited from the sales. The total loss to the affected lenders exceeds $2.75 million.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the United States Secret Service and the Florida Department of Law Enforcement. It will be prosecuted by Assistant United States Attorneys Kelley Howard-Allen and Mandy Riedel.
Laredoan Who Fled to Mexico Indicted for KidnappingRead the Press Release
LAREDO, Texas – A federal grand jury has indicted Raul Ochoa-Perez, 42, of Laredo, on charges of conspiracy to kidnap and kidnapping, announced United States Attorney Kenneth Magidson.
A criminal complaint was filed Jan. 15, 2014, but Ochoa-Perez had allegedly fled to Mexico. Ochoa-Perez turned himself in to federal authorities April 15, 2014, and was subsequently detained pending further proceedings. He is expected to appear before U.S. Magistrate Judge Song Quiroga in the coming days for his initial appearance.
The indictment, returned today, alleges that on Jan. 13, 2014, Ochoa-Perez forced a male victim into a vehicle and took him into Mexico at gunpoint. There, he was allegedly bound and beaten. According to the charges, Ochoa-Perez supervised as others put a gun in the victim's mouth and a knife to his throat. They allegedly demanded money and threatened to cut the victim into pieces if he did not comply. The indictment also alleges Ochoa-Perez called the victim’s girlfriend and threatened her life, the lives of her children and parents as well as the life of the victim if she did not give Ochoa-Perez $55,000.
If convicted, Ochoa-Perez faces a maximum sentence of life in prison and a $250,000 fine for each charge.
The case is the result of an investigation led by the FBI. Assistant U.S. Attorney James Hepburn is handling the case.
A defendant is presumed innocent unless convicted through due process of law.Justice Department, Health and Human Services <br /> and Other Law Enforcement Officials to Announce <br /> Significant Medicare Fraud Strike Force ActionsRead the Press Release
Officials from the Justice Department, Health and Human Services and other law enforcement partners will hold a press conference TODAY, TUESDAY, MAY 13, 2014, at 2:00 p.m. EDT, to announce Medicare Fraud Strike Force law enforcement actions in Miami and throughout the nation.WHO: David A. O’Neil, Acting Assistant Attorney General of the Criminal
Division
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida
Tyler Smith, Assistant Inspector General of the HHS Office of Inspector General (HHS-OIG)
George Piro, Special Agent in Charge for FBI’s Miami Division
Shantanu Agrawal M.D., Deputy Administrator and Director for Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity
James Mann, Deputy Director of the Medicaid Fraud Control Unit for the Florida Attorney General’s Office
WHAT: Press conference announcing Medicare Fraud Strike Force actions
WHEN: TODAY, TUESDAY, MAY 13, 2014
2:00 p.m. EDT
WHERE: United States Attorney’s Office
Southern District of Florida
Second Floor, Media Room
99 N.E. 4th Street
Miami FL 33132
OPEN PRESS
NOTE: All media must present government-issued photo I.D. (such as driver’s license) as well as valid media credentials. Press inquiries regarding logistics should be directed to Annette Castillo at (305) 961-9100.
Justice Department Reaches $60 Million Settlement with Sallie Mae to Resolve Allegations of Charging Military Servicemembers Excessive Rates on Student LoansRead the Press Release
The Department of Justice today announced the federal government’s first lawsuit filed against owners and servicers of student loans for violating the rights of servicemembers eligible for benefits and protections under the Servicemembers Civil Relief Act (SCRA). The United States’ complaint alleges that three defendants, collectively known as Sallie Mae, engaged in a nationwide pattern or practice, dating as far back as 2005, of violating the SCRA by failing to provide members of the military the six percent interest rate cap to which they were entitled. The three defendants are Sallie Mae Inc. (now known as Navient Solutions Inc.), SLM DE Corporation (now known as Navient DE Corporation), and Sallie Mae Bank. The complaint further alleges that defendants Sallie Mae Inc. and SLM DE Corporation also violated the SCRA by improperly obtaining default judgments against servicemembers.
In addition to the complaint, the department filed a proposed settlement of the lawsuit which will require Sallie Mae to pay $60 million to compensate servicemembers for the alleged SCRA violations. The department estimates that about 60,000 servicemembers will receive compensation under the settlement. The settlement and complaint have been filed in the U.S. District Court for the District of Delaware and the settlement is pending approval in that court.
The proposed settlement covers the entire portfolio of student loans serviced by, or on behalf of, Sallie Mae. This includes private student loans, direct Department of Education loans and student loans that originated under the Federal Family Education Loan Program. The proposed settlement is far-reaching, with certain sevicemembers to be compensated for violations of the SCRA that occurred almost a decade ago.
In addition to the $60 million in compensation, the proposed settlement contains several other key provisions to ensure that servicemembers are protected going forward. Sallie Mae must request that all three major credit bureaus delete negative credit history entries caused by the interest rate overcharges and improper default judgments. Going forward, Sallie Mae is required to streamline the process by which servicemembers may notify Sallie Mae of their eligibility for SCRA benefits. The revised process will include an SCRA online intake form for servicemembers, and the availability of customer service representatives specially trained on the rights of those in military service. It also requires Sallie Mae to pay the United States a civil penalty of $55,000.
“Federal law protects our servicemembers from having to repay loans under terms that are unaffordable or unfair,” said Attorney General Eric Holder. “That is the least we owe our brave servicemembers who make such great sacrifices for us. But as alleged, the student lender Sallie Mae sidestepped this requirement by charging excessive rates to borrowers who filed documents proving they were members of the U.S. military. By requiring Sallie Mae to compensate its victims, we are sending a clear message to all lenders and servicers who would deprive our servicemembers of the basic benefits and protections to which they are entitled: this type of conduct is more than just inappropriate; it is inexcusable. And it will not be tolerated.”
“Our men and women in uniform who are called to active duty should not be subjected to additional red tape to receive the benefits they’re entitled to for serving their country,” said U.S. Education Secretary Arne Duncan. “What's more, every student who has taken out a federal student loan should have the peace of mind that the department's servicers are following the law and treating all borrowers fairly. Federal student loans are a critical part of helping every American find the clearest path to the middle class through a higher education, so we must do everything we can to ensure quality customer service for every borrower.”
“Our brave men and women in the military should not have to worry about receiving the benefits the SCRA provides,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department continues to enforce vigorously the laws that protect service members while they do their difficult and necessary work.”
“I applaud the work of the Department of Justice and all the agencies whose joint cooperation made this settlement possible,” said U.S. Attorney Charles M. Oberly III for the District of Delaware. “The least we can do for our brave men and women who sacrifice so much to preserve our freedom is to see that they are afforded the benefits they are lawfully entitled to.”
The department’s settlement is the result of a joint effort with the Department of Education, the Federal Deposit Insurance Corporation (FDIC), and the Consumer Financial Protection Bureau (CFPB). The department’s investigation of Sallie Mae was the result of a referral of servicemember complaints from the CFPB’s Office of Servicemember Affairs, headed by Holly Petraeus. The Department of Justice worked closely with the Department of Education during the investigation to ensure that aggrieved servicemembers with federally owned and federally guaranteed student loans would be fully compensated, and be able to receive the SCRA benefit of a reduced six percent interest rate through a streamlined process going forward. In addition, the FDIC today announced its own important settlement with Sallie Mae in an effort to ensure protections for those who protect this country.
The settlement provides for an independent administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department identifies as victims. The department will make a public announcement and post information on its website once more details about the compensation process become available. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department at this time.
The department’s recent SCRA enforcement actions include negotiated agreements with the nation’s five largest home mortgage loan servicers as part of the National Mortgage Settlement, a historic agreement between the United States, 49 state attorneys general, the District of Columbia and the five servicers. The department has also obtained major settlements against other lenders and servicers for conducting improper mortgage foreclosures and auto repossessions and for failing to grant the six percent interest rate benefit to SCRA-protected servicemembers.
The Civil Rights Division is the component within the Department of Justice authorized to enforce the SCRA. This federal law provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about SCRA enforcement by the Justice Department, please visit www.servicemembers.gov or call 1-800-896-7743.
Jury Finds Arizona Man Guilty of Drug Trafficking ChargesRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that a federal jury has convicted Raul Eduardo Rivera de la Torre, 25, of Tucson, Arizona, of conspiracy to possess with intent to distribute, and to distribute, marijuana. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years, a fine of $2,000,000 or both.
Assistant U.S. Attorney Charles Moynihan, who handled the prosecution of the case, stated that the conspiracy began operations in March of 2007 and continued through April of 2010. During that time, members of the conspiracy shipped hundreds of pounds of marijuana from Tucson, Arizona, to Cleveland, Ohio, Port Chester, N.Y., Philadelphia, Pennsylvania, and Rochester, N.Y. The organization acquired marijuana from a supplier who was from Mexico. The Government’s proof showed that de la Torre, who is from Mexico and went to high school in the United States, was responsible for translating between the suppliers, who spoke Spanish, and the members of the conspiracy purchasing the marijuana and shipping it to the Northeast, including Rochester, who spoke English.
At trial, a Government witness, who was involved in the conspiracy, detailed that he would purchase marijuana from the Mexican supplier and would be assisted by the translations of the defendant. The witness testified that he would utilize various companies to ship marijuana packaged in boxes to various locations in Rochester. He then detailed that he later utilized over-land trucking companies to deliver crates full of marijuana to various locations in the Northeastern United States.
Another Government witness detailed how he was responsible for receiving the shipments of marijuana in Rochester and that he would distribute the marijuana once it arrived.
The conviction is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration under the direction of James J. Hunt, Acting Special Agent in Charge of the New York Division.
Sentencing is scheduled for September 3, 2014, at 3:00 PM before Judge Frank P. Geraci.Jerome Woman Sentenced to 70 Months for Immigration Fraud SchemeRead the Press Release
Defendant ordered to pay over $400,000 in restitution to more than 50 victims
BOISE – Celia Perez, 40, of Jerome, Idaho, was sentenced to 70 months in federal prison for a seven-year immigration services fraud scheme that was executed through the United States mail, U.S. Attorney Wendy J. Olson announced. United States District Court Judge John C. Coughenour from the Western District of Washington also ordered Perez to serve three years of supervised release and to pay $400,000 in restitution to more than fifty victims. Perez pled guilty to the offense on February 12, 2014.
As a part of her plea agreement, Perez admitted that she falsely represented herself as an immigration attorney and solicited fees from clients for immigration services that she never provided. The scheme ran from 2006 through 2013. As part of the scheme to defraud, Perez sent her clients invoices requesting money for “fines and fees,” that she claimed were due and owing to various U.S. Government agencies for immigration benefits applications. The clients then sent money, by certified checks and money orders, to Perez at her U.S. Post Office Box in Wendell, Idaho, through the use of the U.S. Mail. Perez never filed any applications for immigration benefits with any U.S. Government agencies, nor were any fines or fees ever owed by the clients for immigration benefits applications. Rather, Perez used the money paid by the clients for her own purposes.
According to the plea agreement, during the investigation, Perez voluntarily met with agents of ICE’s Homeland Security Investigations and admitted that she had engaged in the fraud scheme for several years. Perez further admitted that she obtained money from victims identified in the plea agreement, but did not pay any fines or fees to U.S. Government agencies as she had represented. Instead she used the money for her own purposes. Perez admitted that the amount of loss resulting from her fraud scheme is greater than $300,000, but less than $400,000. Perez also admitted that she opened approximately 12 credit card accounts, and obtained a student loan in the name of a relative.
At the sentencing hearing, Judge Coughenour heard testimony from five victims about the financial impact that the defendant's crimes had on them. Several victims described in court how the defendant’s actions caused families to lose tens of thousands of dollars that they paid to Perez for immigration services. Victims explained how their relatives lost opportunities to come to the United States while waiting on the false hope promised by Ms. Perez. One victim told the Court that his wife was stuck in Mexico as a result of the defendant’s inactions, and another victim lamented that he was unable to visit his parents prior to their deaths because the defendant had caused problems with his immigration status.
“Today’s sentence and restitution order send a strong message that those who dream of U.S. citizenship cannot be victimized by others whose only interest is greed and personal benefit,” said Olson. “Celia Perez took advantage of her victims and took their money when she was never in a position to help them realize their dreams. I commend Special Agent Rich Cross, the lawyers from my office who worked on this case and the victims and their advocates who had the courage to come forward to expose Ms. Perez’s criminal conduct.”
“Fraud of this nature is prolific and criminals such as Perez know many immigrants will pay a premium for legal assistance to obtain immigration benefits,” said Brad Bench, special agent in charge of HSI Seattle, who oversees Idaho investigations. “HSI is dedicated to protecting immigrants and the integrity of the legal immigration system. It was only through victims coming forward that we were able to put an end to Perez’s crimes and keep others from being victimized.”
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and U.S. Postal Inspection Service (USPIS).
Isleta Pueblo Man Sentenced to Federal Prison for Assault ConvictionRead the Press Release
ALBUQUERQUE – Louie Valdez, 51, was sentenced this morning to 27 months in federal prison for his assault conviction. Valdez will be on supervised release for three years after he completes his prison sentence. He also was ordered to pay a fine of $1,547 and a special penalty assessment of $100.
Valdez, a member of Isleta Pueblo who resides in Bosque Farms, N.M., was indicted in Nov. 2012, and charged with assault resulting in serious bodily injury and assault with a dangerous weapon. According to the indictment, Valdez seriously injured a man by running over him with a vehicle on Aug. 10, 2011, in a location within Isleta Pueblo.
On Jan. 17, 2014, Valdez pled guilty to Count 1 of the indictment charging him with assault resulting in serious bodily injury. In his plea agreement, Valdez admitted that on Aug. 10, 2011, he intentionally drove his pickup truck over the victim and the victim suffered serious injuries as a result of the assault.
This case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services with assistance from the Isleta Pueblo Tribal Police Department, and was prosecuted by Assistant U.S. Attorney Paul H. Spiers.
International Cocaine Trafficking Network Impacting the Low Country and Midlands Charge in Charleston, SCRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Charleston, South Carolina ----- William N. Nettles, the United States Attorney for the District of South Carolina; Harry S. Sommers, the Special Agent in Charge of the Atlanta Division of the Drug Enforcement Administration (“DEA”); Brock Nicholson, the Special Agent in Charge of Homeland Security Investigations (“HSI”) in Atlanta; Mark Keel, the Chief of the South Carolina Law Enforcement Division (“SLED”); and L. C. Knight, the Sheriff of Dorchester County, announce the arrests of defendants in a drug distribution conspiracy indictment involving a cocaine trafficking network operating between Mexico and South Carolina.
According to the federal indictment unsealed in Charleston, SC today, Jose Alfredo Sierra-Reynoso of Saint Matthews, SC, Michael Clark, a/k/a “Bizzy B” of Holly Hill, SC, Lonnell McFadden, a/k/a “June” of Holly Hill, SC, Marion Jerome Mack, a/k/a “Jigga” of Holly Hill, SC, Adryenne R. Johnson of Lexington, SC, Allen Washington, a/k/a “Dirty” of Holly Hill, SC, and Harold Robinson of Holly Hill, SC were charged by a grand jury with conspiring to distribute more than five kilograms of cocaine in South Carolina. The indictment alleges the conspiracy began in or around July 2011.
The indictment is the culmination of an Organized Crime Drug Enforcement Task Force investigation conducted by DEA Charleston Task Force, the Dorchester/Summerville Metro Narcotics Unit, HSI Border Enforcement Security Team, and SLED.
In today’s enforcement operation, over 75 law enforcement officers executed arrest warrants and served search warrants in several South Carolina counties. Law enforcement agencies conducting the takedown operation include DEA, Dorchester/Summerville Metro Narcotics Unit, HSI, SLED, United States Marshals Service, Federal Bureau of Investigation (FBI), South Carolina Highway Patrol, Alcohol, Tobacco & Firearms (ATF), Lexington County Sheriff’s Office, Calhoun County Sheriff’s Office, and Orangeburg County Sheriff’s Office.
“Today’s operation is a testament to the effectiveness of the OCDETF program in dismantling drug trafficking organizations, from their South Carolina base up to their sources of supply,” said United States Attorney Bill Nettles of the District of South Carolina.
"International and interstate drug dealers should take heed that federal, state, and local law enforcement in South Carolina is well organized, cooperative and effective," said Special Agent in Charge Harry Sommers of the DEA Atlanta Field Division. “This investigation is an excellent example of how South Carolina’s law enforcement community bands together to dismantle criminal networks.”
“Dismantling sophisticated transnational criminal organizations takes a lot of teamwork and a lot of effort,” said Special Agent in Charge Brock D. Nicholson, Homeland Security Investigations (HSI) Atlanta. “HSI is a strong supporter of the DEA’s Organized Crime Drug Enforcement Task Force and we are proud to have played a role in this investigation.”
“Criminals think they can avoid the law by running across county or state lines and even national borders. This collaborative effort among law enforcement agencies from every branch of government shows clearly there’s no place to hide for those who would do harm to our citizens.” said Chief Mark Keel of the South Carolina Law Enforcement Division.
“Cooperation and collaboration is the key to good, quality law enforcement and this case is prime example of how many agencies working toward a common goal can have far reaching success. The streets and citizens of Dorchester County are safer as a result of this partnership.” said Sheriff L. C. Knight of the Dorchester County Sheriff’s Office.
The DEA Charleston Task Force is comprised of Special Agents and Task Force Officers from DEA, Berkeley County Sheriff’s Office, Charleston County Sheriff’s Office, Charleston Police Department, Dorchester County Sheriff’s Office, Hampton County Sheriff’s Office, North Charleston Police Department, Mount Pleasant Police Department, South Carolina Highway Patrol, South Carolina Law Enforcement Division, and Summerville Police Department.
Prosecution of the investigation is led by Assistant United States Attorney Nick Bianchi of the United States Attorney’s Office in Charleston, SC.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.Grants Pass Armed Career Criminal Sentenced to 20 Years in Federal PrisonRead the Press Release
MEDFORD, Ore. - On Monday, May 12, 2014, Senior U.S. District Judge Owen M. Panner sentenced Christopher Darrell Joseph Sage, 49, of Grants Pass, Oregon, to 20 years in federal prison, after he previously pleaded guilty to being a felon in possession of a firearm and possession of methamphetamine with intent to distribute. Sage will be on supervised release for five years after he completes his prison sentence.
On January 2, 2013, Rogue Area Drug Enforcement Team (RADE) detectives observed Sage enter and leave the Grants Pass apartment of a previously arrested methamphetamine dealer. A Grants Pass patrol unit and a RADE detective followed Sage to a motel parking lot. Sage got out of his pickup and began walking away, ignoring the officers’ multiple commands to stop and take his hands out of his pockets. Sage fought with the officers and had to be tasered three times before he was finally subdued and handcuffed. Officers discovered that Sage was a multiple convicted felon and probation absconder. Officers searched Sage’s truck and found a stolen Bushmaster AR-15 semi-automatic assault rifle with two 30 round magazines and several boxes of .223 ammunition, a Remington 12 gauge shotgun, digital gram scales, ziplock plastic baggies, and drug notes. In his coat pocket Sage had a quarter pound of methamphetamine and a handwritten list of firearms.
Under federal law, any person who possesses a firearm or ammunition after being previously convicted of three violent felonies or felony drug trafficking crimes is an Armed Career Criminal and faces a 15 year mandatory minimum prison sentence. Sage is an Armed Career Criminal based upon his prior felony convictions for assault on a police officer (2 counts), and three felony convictions for manufacture of methamphetamine. His criminal history additionally includes previous felony convictions for felon in possession of a firearm, unauthorized use of a vehicle, and possession of methamphetamine, and receiving stolen property, and misdemeanor convictions for forgery, theft, obstructing police, DUII, and reckless driving.
This case was investigated jointly by the Rogue Area Drug Enforcement Team, the Grants Pass Department of Public Safety, and the Bureau of Alcohol, Tobacco, and Firearms, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Fulton Man Sentenced to 15 Years for Marijuana, Illegal FirearmRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Fulton, Mo., man was sentenced in federal court today on two separate cases for marijuana trafficking and for illegally possessing a firearm.
Corey James Brewer, 30, of Fulton, was sentenced by U.S. District Judge Fernando J. Gaitan to 15 years in federal prison without parole. Brewer was sentenced as an armed career criminal due to his prior felony convictions.
On Nov. 25, 2013, Brewer pleaded guilty to possessing marijuana with the intent to distribute. Brewer also pleaded guilty to a separate federal indictment that charges him with being a felon in possession of a firearm.
Brewer admitted that he acquired marijuana on a trip to Kansas City, Mo., in September 2010. After Brewer arrived at a Kansas City residence, he placed a black suitcase, which contained about 50 pounds of marijuana, inside a toolbox in the bed of a truck that was being driven by a cooperating source. When the vehicle was stopped during the return trip at an exit on I-70 in Boone County, Mo., law enforcement officers seized the suitcase. They also seized approximately one kilogram of cocaine that was discovered underneath the seat of another defendant, Jason Randall Holloway of Callaway County, Mo.
Holloway was sentenced to five years in federal prison without parole after pleading guilty in a separate but related case to participating in a conspiracy to distribute 100 kilograms or more of marijuana and five kilograms or more of cocaine from 2007 to September 2010. Holloway also pleaded guilty to three additional counts of possessing marijuana with the intent to distribute, distributing marijuana and possessing marijuana and cocaine with the intent to distribute.
By pleading guilty to the second federal indictment, Brewer admitted that he was a felon in possession of firearms.
An employee of the Wal-Mart store in Fulton, Mo., contacted two police officers who were at the store in September 2012 to report that Brewer had just purchased more than 40 boxes of ammunition. Police officers interviewed Brewer and seized from his residence a Kel Tec 9mm pistol, a Rock Island .45-caliber pistol, a DPMS AR-15, a Maverick Arms 12-gauge shotgun, a Taurus .380-caliber pistol, and ammunition. Brewer told officers that he normally carried the .45-caliber and 9mm handguns at his shop and that he had a vest that concealed the pistols underneath his arms.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearms or ammunition. Brewer has six prior felony convictions for burglary, three prior felony convictions for stealing, a prior felony conviction for property damage, two prior felony convictions for stealing a motor vehicle and a prior felony conviction for nonsupport.
These cases were prosecuted by Assistant U.S. Attorney Lauren E. Kummerer. They were investigated by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, and Firearms and Explosives, and MUSTANG (the Mid-Missouri Unified Strike Team And Narcotics Group).Fort Thompson Man Charged with Assault and RobberyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Fort Thompson, South Dakota, man has been indicted by a federal grand jury for Domestic Assault by a Habitual Offender, Assault with a Dangerous Weapon, and Robbery.
Gary Walking Bull, age 36, was indicted on April 22, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 12, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 15 years in custody and/or a $250,000 fine, 3 years of supervised release, and up to $400 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between March 21, 2014, and March 22, 2014, and again on April 7, 2014, Walking Bull unlawfully committed domestic assaults against a victim. At the time of the assaults, Walking Bull had at least two separate prior convictions for assaults that were against a spouse or intimate partner. In one of the cases, the victim was assaulted with a dangerous weapon and money was taken from her.
The charges are merely accusations and Walking Bull is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Walking Bull was remanded to the custody of the U.S. Marshals Service pending trial which has been set for July 1, 2014.
Former Wethersfield Resident Sentenced to 46 Months in Prison for Distributing HeroinRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSE NEGRON, also known as “Chino,” 29, formerly of Wethersfield, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 46 months of imprisonment, followed by three years of supervised release, for distributing heroin.
According to court documents and statements made in court, this matter stems from a joint law enforcement investigation headed by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department into gang-related narcotics trafficking in Hartford’s South End. The investigation specifically targeted a drug trafficking organization headed by Angel Rosa, aka “Little” and “Daddy,” who is a member of the Los Solidos street gang. Rosa’s cousin, Angel Rosa, aka “Mo Betta” and “Fab,” supervised the daily operations of the organization, which distributed heroin and other narcotics in the Zion Street area.
The investigation, which included court-authorized wiretaps, further revealed that Iran Negron, aka “Face,” “Cara” and “Pete,” stored large quantities of the organization’s heroin at his Gilman Street residence, and also sold heroin and cocaine to his own customers. JOSE NEGRON, who is Iran Negron’s nephew, supplied heroin to Iran Negron and Angel Rosa, aka Mo Betta.
As a result of the investigation, 21 individuals were charged with various federal offenses, and law enforcement officers seized narcotics, one firearm, approximately $230,000 in cash, eight vehicles and jewelry.
NEGRON was arrested on April 12, 2013. On January 24, 2014, he pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, heroin.
NEGRON’s criminal history includes convictions for sale of narcotics, larceny and failure to appear.
NEGRON, who has been residing in Manchester while released on a $150,000 bond, was ordered to report to prison on June 10.
Angel Rosa, aka “Little” and “Daddy,” Angel Rosa, aka “Mo Betta” and “Fab,” and Iran Negron have pleaded guilty. On April 29, 2014, “Mo Betta” was sentenced to 165 months of imprisonment. “Little” and Iran Negron await sentencing.
This matter was investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force, which included members of the Connecticut State Police, Hartford Police Department, East Hartford Police Department, Connecticut Department of Correction and Connecticut National Guard. The Connecticut State Police’s Emergency Services Unit, Hartford Police Department’s Emergency Response Team, Capital Region Emergency Response Team, Drug Enforcement Administration, Homeland Security Investigations and the New Britain, East Hartford, Wethersfield and Manchester Police Departments have provided valuable assistance to the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Brian Leaming and Patrick Caruso.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Former Senior Clerk of Palm Beach County Health Department Sentenced for Her Role in an Identity Theft Tax Refund Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Salita St. Simon, 31, of Belle Glade, was sentenced by U.S. District Judge Kenneth A. Marra to 24 months in prison, followed by two years of supervised release. St. Simon was also ordered to pay restitution of $19,896.20.
St. Simon previously pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, one count of conspiracy to obtain and disclose individually identifiable health information, in violation of Title 18, United States Code, Section 371 and Title 42, United States Code, Sections 1320d-6(a)(2), (a)(3), and (b)(3), and one count of obtaining individually identifiable health information, in violation of Title 42, United States Code, Sections 1320d-6(a)(2) and (b)(3).
St. Simon was a senior clerk at a Palm Beach County Health Department (PBCHD) office in Belle Glade, Florida. As a senior clerk, St. Simon had access to the Health Management System (HMS) for the purpose of performing her job duties. HMS was a computerized database containing patient information, including names, dates of birth, and social security numbers, that PBCHD received and created during and in relation to the treatment of its patients. At sentencing, the Court found that St. Simon had stolen the social security numbers and other identifying information of 1,858 people. St. Simon stole patient information from HMS and gave it to several other people who were using the information to obtain refunds from the IRS.
Mr. Ferrer commended the investigative efforts of the FBI and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Marc Osborne.
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 School Teacher Sentenced to 5 Years in Prison for Possessing and Distributing Child PornographyRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that RICHARD DOYLE, 65, formerly of Litchfield, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 60 months of imprisonment, followed by five years of supervised release, for possessing and distributing child pornography. At the time of his arrest in December 2012, DOYLE was employed as a teacher at a private school in Connecticut.
According to court documents and statements made in court, in late October 2012, a law enforcement agent logged into a publicly available Internet file sharing program and downloaded images of child pornography from shared directories maintained by DOYLE. On December 4, 2012, the FBI executed a search warrant at DOYLE’s Litchfield residence. DOYLE was arrested after he admitted that he had used the file sharing program to obtain and trade child pornography. DOYLE further admitted that he had been viewing child pornography since the 1970’s, had used other computer programs to trade child pornography, and had purchased magazines containing child pornography.
DOYLE indicated that he had thousands of child pornography images in his collection, with some of boys as young as five, six or seven years old. He directed the FBI to a plastic container hidden under his workbench in the basement of his home, and indicated that the thumb drives in that container comprised his collection of child pornography, with the exception of some magazines that were still in the attic.
DOYLE stated that he only used his home computer system to download and view child pornography and never used his computer at the school where he was employed.
Pursuant to the search warrant, law enforcement seized a desktop computer and seven thumb drives. Examination of the computer and thumb drives revealed in excess of 4,000 image files and approximately six video files of child pornography.
On December 16, 2013, DOYLE waived his right to indictment and pleaded guilty to one count of receipt and distribution of child pornography.
DOYLE has been released on a $200,000 bond and residing with family members since shortly after his arrest on December 4, 2012. He was ordered to report to prison on July 7.
This case was investigated by the Federal Bureau of Investigation and the Connecticut Child Exploitation Task Force, which includes federal, state and local law enforcement agencies. The Connecticut State Police assisted the investigation. The case was prosecuted by Assistant U.S. Attorney Ray Miller.
The Connecticut Child Exploitation Task Force, which is housed at the main FBI office in New Haven, investigates crimes against children occurring over the Internet, and provides computer forensic review services for participating agencies. For more information about the Task Force, or to report child exploitation crimes, please contact the FBI at 203-777-6311.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Former New Jersey Transit Official Admits Agreeing to Accept $8,000 BribeRead the Press Release
NEWARK, N.J. – A former New Jersey Transit (NJ Transit) official today admitted she agreed to accept an $8,000 bribe and power washing services in connection with a snow removal contract, U.S. Attorney Paul J. Fishman announced.
Donna Schiereck, 56, of Jackson, N.J., pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging her with one count of agreeing to accept a bribe.
According to documents filed in this case and statements made in court:
From September 2012 to December 2012, Schiereck was a supervisor at NJ Transit. Schiereck agreed to accept $8,000 in exchange for her assistance with maintaining snow removal work for a Lakewood, N.J., company. She also sought and received free power washing services from the company in return for her official assistance.
The bribery count to which Schiereck pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 9, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the N.J. State Police, under the direction of Col. Joseph R. Fuentes, superintendent of the state police, for the investigation leading to today’s guilty plea. He also thanked N.J. Attorney General’s Office, under the direction of Acting Attorney General John Hoffman, and Eli Honig, director of the N.J. Division of Criminal Justice, for their work on the investigation.
The government is represented by Assistant U.S. Attorney Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division in Newark and Special Assistant U.S. Attorney Michael A. Monahan, chief of the Financial and Computer Crimes Bureau, Division of Criminal Justice, N.J. Office of the Attorney General.
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Defense counsel: David A. Schwartz Esq., Eatontown, N.J.
Schiereck, Donna Information
Former Jpd Officer Sentenced to 25 Months in Prison for BriberyRead the Press Release
Jackson, Miss. – Former Jackson Police Officer Tony Davis, of Clinton, was sentenced in U.S. District Court today to 25 months in federal prison for bribery, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen. He was also ordered to pay a $5,000.00 fine.
Davis pled guilty to the bribery charge in December, 2013, admitting that, while employed as a Patrol Sergeant with the Jackson Police Department in 2010, Davis advised another Jackson Police Officer that he would pay the officer $10,000 if he would assist Davis in disposing of an outstanding drug charge against a defendant Davis knew.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Jerry Rushing.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Former Essex County, N.J., Sheriff’s Officer Sentenced to 15 Months in Prison for Collecting A Debt Through ExtortionRead the Press Release
Two Conspirators Sentenced to Probation
NEWARK, N.J. – A Monmouth County, N.J., man who formerly worked as a sheriff’s officer in Essex County was sentenced today to 15 months in prison for conspiring to collect a debt using extortionate means, U.S. Attorney Paul J. Fishman announced.John Balsamo, 50, of West Long Branch, N.J., previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an indictment charging him with using threats of violence and economic harm to collect a debt from the victim, an Ocean County, N.J., construction contractor. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Balsamo and conspirators Timothy Kelly, 38, of Jersey City, N.J., and Robert C. Bantang,
Jr., 45, of Oceanport, N.J., used extortionate means in order to collect $50,000 the contractor owed to Kelly from 2009. The conspirators made the victim believe that the money he had borrowed from Kelly was owed to the “Old Man,” a member of organized crime who would cause physical harm to the victim if the debt was not paid. Balsamo also displayed a key to a construction site where the victim was working in Brick, N.J., and warned that the key could be used to gain access to, and cause damage to the site, due to the victim’s failure to fully repay the debt. Balsamo and Kelly sent Bantang to the construction site on three occasions to deliver threats purportedly on behalf of the “Old Man.”On March 24, 2011, Balsamo and Kelly went to the Brick construction site, which was now a completed restaurant, to confront the victim. Kelly told the victim that if he had brought his “boys” that it would have gotten “done right in here, right in this place, right like this, in front of everybody . . . and your wife gets it too.” Kelly also told the victim that he deserved “a beatin’ just out of f- - kin’ principle.” Balsamo warned that the “Old Man” wanted to “beat the shit” out of the restaurant owner due to the victim’s failure to repay the debt, which Balsamo and Kelly now stated had grown to $70,000. Balsamo also advised the victim that the “Old Man” has been “promoted,” implying that the “Old Man” now possessed a higher position in organized crime.
Kelly and Bantang previously pleaded guilty in February 2012 to conspiring to collect a debt from the victim using extortionate means, before Judge Hayden. Kelly was sentenced today to three years of probation, including four months of house arrest and 40 hours of community service. Bantang was sentenced to three years of probation.
In addition to the prison term, Judge Hayden sentenced Balsamo to two years of supervised release and ordered him to pay restitution of $2,500 in cash and a Rolex watch he had taken from the victim.
Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and special agents of the N.J., State Commission of Investigation, under the direction of Executive Director Philip James Degnan, for the investigation leading to today’s sentencings.
The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Economic Crime Unit in Newark.
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Defense Counsel:
Balsamo: John Yauch Esq., Assistant Federal Public Defender, Newark
Kelly: Timothy Donohue Esq., West Orange, N.J.
Bantang: Michael Baldassare Esq., NewarkFormer Corrections Officer Sentenced for Conspiring with Inmate to Smuggle Illegal Items into PrisonRead the Press Release
ASHLAND, KY - A former corrections officer at the Federal Corrections Institute (FCI) in Ashland, Ky., has been sentenced to federal prison for conspiring with an inmate and others to smuggle prohibited items into the prison.
U.S. District Judge David L. Bunning sentenced 46-year-old James Lewis on Monday to 15 months in federal prison. Under federal law, Lewis will have to serve at least 85 percent of his prison sentence.
According to court records, from December 2010 until February 2012, Lewis conspired with inmate Gary Musick, of Newport, Tenn., and Musick’s girlfriend, Cindy Gates, to introduce tobacco, marijuana, and nude photographs into the prison. Gates frequently visited the prison and gave the items to Lewis. Lewis subsequently provided the items to Musick, in exchange for payment from Gates and others.
Evidence at Musick’s trial, in March, established that he sold some of the prohibited items to other inmates. Musick was convicted of conspiracy to introduce contraband into a correctional facility and possession of contraband. Gates pleaded guilty to a misdemeanor conspiracy charge, prior to trial, and she was also sentenced on Monday; she received probation.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and John F. Oleskowicz, Special Agent in Charge, Department of Justice, Office of the Inspector General, Chicago Field Office, jointly announced the sentence.
The investigation was conducted by the Department of Justice, Office of the Inspector General. Assistant U.S. Attorneys Edwin J. Walbourn, III and Wade T. Napier prosecuted this case on behalf of the federal government.
Former Cape Cod Man Sentenced for Attempted Arson and Attempted Witness TamperingRead the Press Release
BOSTON – A former West Harwich man was sentenced today for attempting to recruit two homeless men to burn a West Harwich residence and then attempting to tamper with the witnesses of the criminal case.
Benjamin Parker, 29, was sentenced by U.S. District Judge George A. O’Toole to six years in prison and three years of supervised release. In March, Parker pleaded guilty to attempted arson, attempted kidnaping, and attempted witness tampering.
In September 2011, Parker solicited two homeless Boston men to burn residential rental property in West Harwich. The men immediately notified the authorities and then assisted in the ensuing investigation. Parker provided the men with materials to set the fire and explained when and how he wanted it started. Parker was arrested later that weekend.
In March 2012, Parker was charged with the attempted arson in federal court. He was released on conditions and was scheduled to plead guilty in July 2013. However, in June 2013 he traveled to Hartford, Conn. in violation of his conditions of release and attempted to hire a member of the Latin Kings street gang to kidnap and hold the men he had solicited to commit the arson. The individual Parker approached reported Parker’s activities to authorities and, like the two Boston men, assisted with the investigation. Parker was arrested on June 24, 2013 in upstate New York, where he was living with his family as part of his conditions of release.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division; Chief Paul MacMillan of the MBTA Police Department; Boston Police Commissioner William Evans; Stephen D. Coan, State Fire Marshal; Harwich Police Chief William Mason; and Hartford Police Chief David A. Groves, made the announcement today.
Former Army Contracting Official Indicted on Federal Charges in Bribery and Kickback SchemeDefendant Accused of Taking Cash, Vacations, and Other Benefits, Including Part Ownership of Two Companies Awarded Government ContractsRead the Press Release
WASHINGTON – In Seon Lim, a former contracting official for the U.S. Department of the Army, was arrested today following his indictment on federal bribery and other charges in a scheme in which he allegedly accepted more than $350,000 in cash, along with vacations and other benefits, from favored contractors.
The indictment was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); Peggy E. Gustafson, Inspector General for the Small Business Administration (SBA); Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS); and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
Lim, 48, of Fairfax Station, Va., also known as InSeon Lim, was indicted on May 8, 2014 in the U.S. District Court for the Eastern District of Virginia. The 10-count indictment, which was unsealed following today’s arrest, accuses Lim of one count of conspiracy, four counts of bribery, money laundering, a tax offense, and related charges. Lim made his initial court appearance today and was released pending a status hearing May 20, 2014.
Lim is the latest person to be charged in an investigation into domestic bribery, bid-rigging, and federal contracting. A total of 17 individuals and one corporation, Nova Datacom, LLC, have pled guilty to federal charges, and a second company, Saena Tech Corp., entered into a deferred prosecution agreement with the government.
The indictment provides notice that, if convicted, the United States will seek forfeiture of all proceeds of the charged offenses, including Lim’s house in Fairfax Station.
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“A federal grand jury has charged this Army official with taking more than $350,000 in cash, a Lexus, and a trip to the Bahamas in exchange for steering business to crooked contractors,” said U.S. Attorney Machen. “Seventeen people and one corporation have already pled guilty as part of this sweeping investigation into bribery in federal contracting. The wide reach of these prosecutions should send a clear message to corrupt public officials and contractors who use secret payoffs to cheat the system.”
“Accepting personal gifts in exchange for favorable action on government contracts steals from the American taxpayer and has no place in government contracting,” said Assistant Director in Charge Parlave. “Working together to protect federal funds, the FBI and our law enforcement partners will continue to ensure that those who commit fraud and corruption are brought to justice.”
“IRS Criminal Investigation is focused on cases in which greedy public officials, who for their own personal benefit, use their official position to accumulate ill-gotten wealth at a cost to the taxpayer,” said Special Agent in Charge Kelly. “The illegal activity detailed in the indictment regarding this bribery and kickback scheme was both extensive and significant. IRS Criminal Investigation, in conjunction with our law enforcement partners, is committed to investigating cases just like these.”
“Federal small business contracts are not pay-to-play,” said SBA Inspector General Gustafson. “Corruption, bribery, and deceitful actions will be rooted out of the system, and those responsible will be brought to justice. I want to thank our law enforcement partners and the U.S. Attorney’s Office for their cooperation and dedication to this investigation.”
“It's a sad day when the public's trust is shaken by the criminal acts of government officials who are entrusted to safeguard our taxpayer dollars, said DCIS Special Agent in Charge Craig. “However, today sends a strong message that DCIS, along with its investigative partners, will ensure prosecution of those individuals to the fullest extent of the law, no matter who they are or what position they hold.”
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According to the indictment, Lim was a public official until April 2012. The charges involve his activities as an assistant project manager and product director with the Program Executive Office Enterprise Information Systems, a part of the Army that provides infrastructure and informational management systems.
The indictment covers activities from May 2007 through October 2011.
Until June 2010, Lim resided and worked in Seoul, South Korea. While in South Korea, his primary duties were to oversee and implement communications systems upgrades for the U.S. forces there, which included approximately 10 communications centers and various other special projects at military sites throughout the country. Among other things, Lim coordinated work on a major contract, which, in turn, had numerous sub-contracts.
From June 2010 until his resignation in April 2012, Lim worked as a product director at Fort Belvoir, Va.
The indictment alleges that Lim secretly used his official position to enrich himself by soliciting and accepting gifts, payments and other things of value from government contractors in return for favorable official action. Among other things, the indictment alleges, Lim received payments personally and to accounts that he controlled; payments for travel, vacation, vehicles, cellphones and cellular service for himself and family members; payments for female escorts; ownership interests in two companies, and assistance in obtaining home financing.
The government contractors, meanwhile, enriched themselves by secretly obtaining favorable official action, the indictment alleges. At Lim’s direction, some of the contractors allegedly submitted fraudulent invoices for purported work that was not actually performed. Also at Lim’s direction, the indictment alleges, these contractors then paid him a portion of the proceeds generated by the fraudulent invoices.
The indictment provides details about numerous contracts and payments. For example:
-Nova Datacom: According to the indictment, two former employees of the company - Alex N. Cho, also known as Young N. Cho, and Nick Park - separately paid Lim a total of $50,000 in cash in 2007. In addition, Park paid for Lim’s travel, lodging, meals and entertainment during a trip to the Philippines in 2007, and Cho paid for lodging and a $1,000 casino chip during a trip later that year to Las Vegas, the indictment alleges.
-Avenciatech: According to the indictment, two former officials of Avenciatech, Inc., a government contractor based in Annandale, Va., provided Lim with cash and an ownership interest in the company in exchange for official action. For example, the indictment alleges, one of the former officials - Oh Song Kwon, also known as Thomas Kwon - provided Lim with cash payments; payments for hotel stays for Lim and family members, including a trip to the Atlantis resort in the Bahamas; payments to finance the purchase of a 2010 Lexus automobile, and payments for other things of value. Kwon also assisted Lim in obtaining financing for the purchase of a home in Fairfax Station, Va., where Lim resided following his reassignment in 2010 to a position at Fort Belvoir.
- UEI:Nick Park left Nova Datacom in 2007 and co-founded another government contractor, Unisource Enterprise Inc. (UEI), based in Annandale, Va. According to the indictment, in exchange for favorable treatment, Park provided Lim with a secret ownership in UEI. Among other things, Lim allegedly provided Park with sensitive procurement information.
-Saena Tech: According to the indictment, a former official with Saena Tech, which was based in South Korea, provided Lim with $70,000 in cash; payments for meals, entertainment, and an automobile, and $175,000 of the proceeds generated by a fraudulent invoice.
Cho, Park, and Kwon are among those who earlier pled guilty to charges in the case.
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An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
This investigation is being conducted by the FBI’s Washington Field Office; the Washington Field Office of the Internal Revenue Service-Criminal Investigation, the Office of the Inspector General for the Small Business Administration; the Department of Defense’s Defense Criminal Investigative Service; the Defense Contract Audit Agency, and the Army Criminal Investigation Command. It is being prosecuted by Assistant U.S. Attorneys Michael K. Atkinson and Bryan Seeley of the Fraud and Public Corruption Section and Assistant U.S. Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section, all of the U.S. Attorney’s Office for the District of Columbia, and Assistant U.S. Attorney Jack Hanly, of the U.S. Attorney’s Office for the Eastern District of Virginia.
14-112Former Army Assistant Inspector General Pleads Guilty to Fraud Scheme Targeting Identities of U.S. Army OfficersRead the Press Release
James Robert Jones, 43, of Woodlawn, Tennessee pleaded guilty today in connection with a scheme to obtain fraudulent bank loans using the stolen identities of active duty U.S. Army officers, announced David Rivera, United States Attorney for the Middle District of Tennessee. At a hearing today before U.S. District Court Judge Aleta A. Trauger, Jones entered a plea of guilty to one count of bank fraud, one count of making a false statement to a bank, one count of making a false statement to federal agents, and one count of obstructing justice.
At his plea hearing, Jones, a former Assistant Inspector General with the U.S. Army Office of Inspector General at Fort Campbell, admitted abusing his position to obtain personal identifying information, including Social Security numbers and dates of birth, of active duty U.S. Army officers, including officers who were deployed to Afghanistan. Jones acknowledged that he used this personal identifying information to apply for loans in the officers’ names, that he obtained loans from two federally-insured financial institutions, and that he used the money from the loans for his own personal benefit. Jones further admitted that he attempted to conceal his scheme by asking a colleague to delete records found on his U.S. Army-issued laptop computer, and by seeking to cast blame for his crimes on a deceased U.S. Army officer, despite the fact that the deceased officer had no involvement in the scheme.Jones faces up to 30 years in prison for the counts of bank fraud and making a false statement to a bank, up to 20 years in prison for obstructing justice, and up to 5 years in prison for making false statements to investigators. Jones will be sentenced by Judge Trauger on August 11, 2014.
The case was investigated by the United States Secret Service and the U.S. Army Criminal Investigations Command at Fort Campbell. The United States is represented by Assistant U.S. Attorney William F. Abely.
Fifty South Florida Residents Charged as Part of Nationwide Coordinated Takedown by Medicare Fraud Strike Force OperationsRead the Press Release
90 Individuals Charged Nationally for Submitting Approximately $260 Million in Fraudulent Billing; South Florida Responsible for more than $65,701,885 in False Billings
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Attorney General Eric Holder, Daniel R. Levinson, Inspector General, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Ronald Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Field Office, Amy L. Parker, Assistant Special Agent in Charge, Eastern Region, U.S. Office of Personnel Management, Office of Inspector General (OPM-OIG), Pam Bondi, Florida Attorney General, and Gerald Bailey, Commissioner, Florida Department of Law Enforcement (FDLE), announce that fifty (50) South Florida residents were charged for their alleged participation in various schemes to defraud Medicare out of more than $65,701,885. The charges in South Florida are part of a nationwide takedown by Medicare Fraud Strike Force operations in six cities that resulted in charges against 90 individuals, including doctors, nurses, licensed medical professionals and others, for their alleged participation in Medicare fraud schemes involving approximately $260 million in false billings.
U.S. Attorney Wifredo A. Ferrer stated, “Today, 50 defendants were charged in a number of schemes with defrauding our nation’s Medicare program here in South Florida. While some of the schemes were different, all of the defendants possessed the common goal of stealing from a program whose purpose is to provide the security of health care to seniors and the infirm. This is unacceptable. Hopefully, the sight of so many criminal defendants – from medical professionals to clinic owners to Medicare beneficiaries – being held accountable for their misdeeds will send a message of deterrence to those thinking Medicare fraud is a good idea. The efforts described today should also demonstrate that law enforcement in Miami will continue to fight the battle against health care fraud on all fronts. There is simply no safe harbor for Medicare fraudsters in South Florida.”
“Medicare is a sacred compact with our nation’s seniors, and to protect it, we must remain aggressive in combating fraud,” said Attorney General Holder. “This nationwide Medicare Strike Force takedown represents another important step forward in our ongoing fight to safeguard taxpayer resources and to ensure the integrity of essential health care programs. Department of Justice will not tolerate these activities. And we will continue working alongside the Department of Health and Human Services – as well as federal, state, and local partners – to use every appropriate tool and available resource to find, stop, and punish those who seek to take advantage of their fellow citizens.”
“Today’s arrests demonstrate the effectiveness of our Strike Forces in combatting Medicare and Medicaid fraud,” said U.S. Department of Health and Human Services Inspector General Daniel R. Levinson. “Through seamless teamwork, our agents and law enforcement partners bring lawbreakers to justice, protect beneficiaries, and recover stolen taxpayer funds.”
“The actions of the FBI and our partners today have disrupted the operations of several health care fraud operations,” said George L. Piro, Special Agent in Charge, FBI Miami. “But, we need the public’s assistance. Report suspicious activity, inform your insurance company if you see charges on your explanation of benefits for services you did not receive and protect your insurance cards and other personally identifiable information.”
“Greed is the ultimate downfall of these criminals,” said Inspector in Charge Ronald Verrochio. “Today exemplifies the great work of the U.S. Postal Inspection Service and its law enforcement partners in combating fraud.”
“The work of this Strike Force should be a warning to all those who believe that they can defraud the Government with impunity,” said ASAC Amy L. Parker. “If you break the laws of the United States, if you put monetary gain above patient safety, you will be caught and you will be prosecuted. The OPM-OIG is committed to working with law enforcement organizations at all levels to ensure the safety of Federal employees, annuitants, and their dependents, as well as protecting taxpayer dollars.”
“The work of this Strike Force should be a warning to all those who believe that they can defraud the Government with impunity,” said ASAC Amy L. Parker. “If you break the laws of the United States, if you put monetary gain above patient safety, you will be caught and you will be prosecuted. The OPM-OIG is committed to working with law enforcement organizations at all levels to ensure the safety of Federal employees, annuitants, and their dependents, as well as protecting taxpayer dollars.”
“My Medicaid Fraud Control Unit is a proud partner in this nationwide takedown to stop Medicaid and Medicare fraud, which has resulted in charges being brought against dozens of people for defrauding these government programs,” stated Attorney General Pam Bondi. “We will continue to partner with federal, state and local agencies to uphold the integrity of the Medicaid program and to protect taxpayer dollars.”
Florida Department of Law Enforcement Commissioner Gerald Bailey said, “FDLE will continue to infiltrate these criminal organizations. These cases are complex and involve the authority and expertise of multiple law enforcement agencies; I appreciate their hard work.”
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,900 defendants who collectively have falsely billed the Medicare program for more than $6 billion. In addition, CMS, working in conjunction with HHS-OIG, has temporarily stopped enrollments of high-risk providers in five Strike force locations and has removed over 17,000 providers from the Medicare program since 2011.
Specifically, the South Florida cases announced as part of the nationwide Medicare Fraud Strike Force takedown include:
1. United States v. Cecilia Valdes, Case No. 14-20297-CR-Williams
Cecilia Valdes, 46, of Miami, is charged with one count of conspiracy to commit health care fraud. The information filed against Valdes, a physical therapist, alleges that she was paid by therapy staffing service agencies to falsely and fraudulently certify that she had provided home health care physical therapy services to Medicare beneficiaries when she had in fact never done so. As the result of Valdes’ conduct, the Medicare program sustained losses of approximately $355,000. If convicted, Valdes faces up to ten years in prison.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Kevin J. Larsen.
2. United States v. Maria E. Ortiz, Case No. 14-20238-CR-Cooke
Maria E. Ortiz, 46, of Homestead, is charged with conspiracy to commit money laundering, substantive counts of money laundering, conspiracy to structure transactions to evade federal reporting requirements, and substantive counts of structuring transactions to evade reporting requirements. The indictment alleges that between November 2011 and June of 2012, Ortiz and others conspired to launder the proceeds of illegal health care kickbacks from Musomed Health Care Corp., a home health agency certified by Medicare. Ortiz and others allegedly withdrew kickback proceeds from banks in amounts less than $10,000 to evade the reporting of the transactions. If convicted, Ortiz faces up to 20 years in prison for each count of money laundering, and up to ten years for each count of structuring.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Eric E. Morales.
3. United States v. Yulianela Martinez, et.al., Case No. 14-20239-CR-Middlebrooks
Yulianela Martinez, 32, of Hialeah, Luisa Cladera, 53, of Hialeah, Leyma Sosa, 39, of Hialeah, and Miguel Delgado 41, of Hialeah, were charged with conspiracy to pay illegal kickbacks in relation to a federal health care program and with substantive counts of paying illegal kickbacks in relation to a federal health care program. The indictment alleges that between 2009 and 2012, the defendants offered and paid kickbacks and bribes to recruiters for the referral of Medicare beneficiaries to MCDS Home Health Group, a corporation purportedly providing skilled nursing services, physical therapy, occupational therapy, and home health aide services to Medicare beneficiaries. If convicted, the defendants face up to five years for each kickback count.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Amanda Perwin.
4. United States v. Israel Benigno Gil, Case No. 14-20263-CR-Middlebrooks
Israel Benigno Gil, 85, of Hialeah, is charged with two counts of receiving health care kickbacks. The indictment alleges that Gil was a Medicare beneficiary and received payments in return for ordering, arranging for, and recommending purchasing and ordering home health services. If convicted, Gil faces up to five years in prison for each kickback count.
Mr. Ferrer commended the investigative efforts of USPIS, HHS-OIG, and FBI. This case is being prosecuted by Assistant U.S. Attorney Robert T. Watson.
5. United States v. Miriam Castellanos, Case No. 14-20264-CR-Scola
Miriam Castellanos, 63, of Miami, is charged with conspiracy to commit health care fraud and eight counts of substantive health care fraud. The indictment alleges that Castellanos was president and owner of Professional Treatment Medical Center, Inc., and submitted false and fraudulent claims, causing Medicare to incur a loss of $1,473,504. If convicted, Castellanos faces up to ten years in prison for each count of health care fraud.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Christopher Clark.
6. United States v. Miguel Espinosa and Luis Buzzi, Case No. 14-20317-CR-Cooke
Miguel Espinosa, 45, of Coral Springs, and Luis Buzzi, 50, of Hialeah, are charged with conspiracy to commit health care fraud, nine counts of substantive health care fraud, conspiracy to receive health care kickbacks, and substantive counts of receiving kickbacks. Espinosa and Buzzi were patient recruiters who allegedly received and paid kickbacks for referral of Medicare beneficiaries to Lord’s Medical. The indictment alleges that from Febrauty 2010 through July 2011, Lord’s Medical Rehab Center Inc. submitted $5,497,047 in false and fraudulent claims for medical services to Blue Cross Blue Shield, and was paid $2,346,416 of the submitted claims. If convicted, the defendants face up to ten years in prison for each count of health care fraud, and up to five years in prison for each kickback count.
Mr. Ferrer commended the investigative efforts of the FBI, HHS-OIG and Office of Personnel Management. This case is being prosecuted by Assistant U.S. Attorney Christopher Clark.
7. United States v. Manuel J. Chavez, Case No. 14-20321-CR-Ungaro
Manuel J. Chavez, 34, of Miami Beach, is charged with eight counts of health care fraud. The indictment alleges that Chavez submitted false and fraudulent claims for medications to Medicare Part D in connection with Pharma One, a pharmacy in Hialeah. An invoice reconciliation analysis of Pharma One drug purchases shows that it overbilled Medicare by approximately $1,381,278. If convicted, Chavez faces up to ten years in prison for each count of health care fraud.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Christopher Clark.
8. United States v. Eduardo Perez de Morales, Case No. 12-20663-CR-Zloch(s)(s)
Eduardo Perez de Morales, 26, of Miami, is charged with one count of conspiring to launder the proceeds of health care fraud. According to Court records, Jorge Emilio Perez de Morales Sante, a fugitive defendant previously charged, operated a money remitting company that moved money from the United States to Cuba. The superseding indictment alleges that Jorge Emilio Perez de Morales and his brother Eduardo Perez de Morales laundered health care fraud proceeds through the money remitting company’s bank accounts. The United States is seeking forfeiture of $238,067,956. If convicted, Eduardo Perez de Morales faces up to 20 years in prison.
Mr. Ferrer commended the investigative efforts of the Florida Department of Law Enforcement and the FBI. This case is being prosecuted by Assistant U.S. Attorney H. Ron Davidson.
9. United States v. Yamile Calvo-Gonzalez, Case No. 14-20288-CR-Lenard
Yamile Calvo-Gonzalez, 41, of Miami, the owner of WY Medical Group and Rehabilitation Services Inc., is charged with conspiracy to commit health care fraud, substantive health care fraud, conspiracy to receive health care kickbacks and substantive receipt of kickbacks. The indictment alleges that Calvo-Gonzalez and her co-conspirators submitted and caused the submission of false and fraudulent claims to Medicare and Florida Medicaid for home health services that were neither medically necessary or actually provided. The indictment further alleges that the defendant acted as a patient recruiter and received kickbacks and bribes from co-conspirator home health agency owners for referring beneficiaries to serve as patients. If convicted, Calvo-Gonzalez faces up to ten years in prison for each count of health care fraud, and up to five years in prison for each kickback count.
Mr. Ferrer commended the investigative efforts of the Florida Attorney General Medicaid Fraud Control Unit and HHS-OIG. This case is being prosecuted by Special Assistant U.S. Attorney Hagerenesh Simmons from the Florida Attorney General’s Office, Medicaid Fraud Control Unit.
10. United States v. Igor Iturriaga, Ovidio Iturriaga and Esther Lopez, Case No. 14-20324-CR-Moore
Igor Iturriaga, 45, Ovidio Iturriaga, 71, and Esther Lopez, 54, all of Miami, were charged with conspiracy to pay and receive health care kickbacks in relation to a federal health care program, receipt of health care kickbacks in connection with a federal health care program, conspiracy to commit money laundering, and substantive counts of money laundering. The indictment alleges that in 2012, the defendants cashed checks for their co-conspirators, knowing that the cash they provided to their co-conspirators would be used to pay kickbacks to patient recruiters who provided Medicare beneficiaries to home health care agencies Miami United Home Health Care, Inc. and TGR Home Health Care, Inc. The defendants acted as patient recruiters and also accepted kickbacks from their co-conspirators in return for referring Medicare beneficiaries to Miami United and TGR for home health services. The defendants and their co-conspirators used the beneficiary information obtained through the payment of bribes and kickbacks to cause Miami United and TGR to submit claims to Medicare for home health services purportedly provided to the recruited Medicare beneficiaries. If convicted, the defendants face up to 20 years in prison on the money laundering counts, and up to five years in prison on the kickback counts.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Robert T. Watson.
11. United States v. Jesus Fundora and Carlos Manuel Perez Gomez, Case No. 14-20287-CR-Altonaga
Jesus Fundora, 36, and Carlos Manuel Perez Gomez, 50, both of Miami, are charged with conspiracy to commit health care fraud as well as 12 counts of substantive health care fraud. The indictment alleges that the defendants filed false and fraudulent prescription drug claims under Medicare Part D through Kiara Pharmacy, and as a result of those false and fraudulent claims, Medicare sustained a loss of over $6 million. If convicted, the defendants face up to ten years in prison for each count of health care fraud.
Mr. Ferrer commended the investigative efforts of HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Jon M. Juenger.
12. United States v. Adalberto Perez Peguero, Maydelin Matos Fernandez, Roberto Rogelio Rojas and Maria Arce, Case No. 14-20266-CR-Lenard(s)
Adalberto Perez Peguero, 42, Maydelin Matos Fernandez, 34, Roberto Rogelio Rojas, 72, all of Miami, and Maria Arce, 57, of Miami Beach, are charged with conspiracy to commit health care fraud, and Perez Peguero, Matos Fernandez and Arce are charged with substantive counts of health care fraud as well. The indictment also charges Perez Peguero with paying kickbacks, and Rogelio Rojas and Arce with receiving kickbacks. The indictment alleges that Perez Peguero managed and operated Alephzayn Health Services and he offered and paid kickbacks and bribes to patient recruiters, including Rogelio Rojas, in return for referring beneficiaries so that he and Matos Fernandez could bill Medicare, through Alephzayn, for services that were not medically necessary and provided. The indictment further alleges that beneficiaries, including Arce, solicited and accepted bribes and kickbacks in exchange for permitting their beneficiary information to be used to submit false and fraudulent claims to Medicare. If convicted, the defendants face up to ten years in prison for each count of health care fraud, and up to five years in prison for each kickback count.
Mr. Ferrer commended the investigative efforts of USPIS, HHS-OIG and FBI. This case is being prosecuted by Assistant U.S. Attorney James V. Hayes.
13. United States v. Joel Diaz Reyes and Miguel Gonzalez, Case No. 14-20292-CR-Scola(s)
Joel Diaz Reyes, 42, and Miguel Gonzalez, 41, both of Miami, are charged with conspiracy to commit health care fraud, substantive counts of health care fraud, conspiracy to pay and receive health care kickbacks, and substantive counts of paying and receiving health care kickbacks. The indictment alleges that the defendants recruited Medicare beneficiaries to Santa Barbara Pharmacy in order to cause the submission of false and fraudulent claims to Medicare for drugs that were not medically necessary and were never provided. The defendants also allegedly offered and paid kickbacks and bribes to Medicare beneficiaries and caused false and fraudulent prescriptions to be created for those beneficiaries. If convicted, the defendants face up to ten years for each count of health care fraud, and up to five years for each kickback count.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney James V. Hayes.
14. United States v. Luisa Isabel Vega, Case No. 14-2530-CR-Simonton
Luisa Isabel Vega, 57, of Miami, is charged by criminal complaint with health care fraud. Vega was the owner of AB Pharmacy, which billed Medicare Part D for dispensed prescription drugs, and as a result of those claims, received $8.4 million. However, an invoice reconciliation by government agents showed that AB Pharmacy did not buy enough of the drugs billed for to support the amount the pharmacy was paid for dispensing those drugs. As a result, AB Pharmacy received $4.2 million for drugs that it never dispensed. Interviews with beneficiaries revealed that many had been paid kickbacks by patient recruiters in return for allowing AB Pharmacy to submit fraudulent claims to Medicare using their beneficiary information, and many had never received the billed-for medications. If convicted, Vega faces up to ten years for each count of health care fraud.
Mr. Ferrer commended the investigative efforts of HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Jon M. Juenger.
15. United States v. Alexander Gonzalez and Virgilio Zayas, Case No. 14-20334-CR-Cooke
Alexander Gonzalez, 37, and Virgilio Zayas, 65, both of Miami, are charged with conspiracy to pay and receive health care kickbacks. Gonzalez is also charged with thirteen substantive counts of paying kickbacks and Zayas is also charged with two substantive counts of receiving kickbacks. Gonzalez managed and operated a Miami-based HHA, Suncare Home Health Services, Inc. ("Suncare"), which purportedly provided home health therapy to Medicare beneficiaries. Gonzalez paid patient recruiters kickbacks for referring patients to Suncare. Patient recruiters would buy home health prescriptions from doctors in the area and paid beneficiaries a kickback for serving as patients. Zayas was paid kickbacks as both a patient recruiter and for serving as a beneficiary himself at Suncare. The defendants face up to five years in prison for the conspiracy charge, and up to five years in prison for each substantive count.
Mr. Ferrer commended the investigative efforts of USPIS. This case is being prosecuted by Assistant U.S. Attorney James V. Hayes.
16. United States v. Yenisey Suarez, et al., Case No. 14-20322-CR-Williams
Yenisey Suarez, 36, of Miami, Lourdes Duarte, 41, of Hialeah, and Erick Armando Juarez, 32, of Miami, are charged with one count of conspiracy to defraud the United States and receive health care kickbacks and two counts each of receipt of kickbacks in connection with a federal health care program. The indictment alleges that the defendants were patient recruiters for defunct home health care company Starlite Home Health Care Inc. (Starlite Home Health). The defendants are alleged to have solicited and received kickbacks and bribes from the owner and operator of Starlite Home Health in return for recruiting patients to Starlite Home Health and allowing the company to bill the Medicare program on behalf of the recruited patients for home health care and therapy services that were not medically necessary and/or were not provided. As alleged in the indictment, between approximately May 2010 through May 2013, Starlite Home Health submitted over $8 million in fraudulent claims to Medicare and was reimbursed approximately $3 million by Medicare. If convicted, the defendants face up to five years in prison for each kickback count.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorney Kelly Graves of the Criminal Division’s Fraud Section.
17. United States v. Abigail Aguila, Estrella Perez, Solchys Perez, and Monica Macias, Case No. 14-20300-CR-Moore
Abigail Aguila, 40, of Miami, Estrella Perez, 57, of Coral Gables, Solchys Perez, 34, of Miami, and Monica Macias, 52, of Miami, are charged with conspiracy to defraud the United States and receive health care kickbacks. Solchys Perez and Estrella Perez are also charged with conspiracy to commit health care fraud and with receiving kickbacks in connection with a federal health care program. The indictment alleges that the defendants participated in a scheme involving Trust Care Health Services, Inc. (Trust Care). The defendants allegedly supplied Medicare beneficiaries to Trust Care in exchange for kickbacks and bribes. Trust Care, in turn, fraudulently billed Medicare for more than $20 million for home health services that were not provided and/or were not medically necessary. If convicted, the defendants face up to ten years in prison for the health care fraud charge, and up to five years in prison for each kickback-related charge.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne P. McNamara of the Criminal Division’s Fraud Section.
18. United States v. Cruz Sonia Collado, Case No. 14-20302-CR-Scola. United States v. Euridice Borroto, Case No. 14-20310-CR-Lenard
Cruz Sonia Collado, 64, of Homestead, and Euridice Borroto, 45, of Miami, are charged with conspiracy to defraud the United States and pay health care kickbacks. Collado also faces substantive kickback charges. The indictment alleges that Cruz Sonia Collado orchestrated a scheme involving Nestor’s Health Services, Inc. (Nestor’s). As owner and operator of Nestor’s, the defendant paid kickbacks and bribes to patient recruiters, in exchange for the recruiters providing Medicare beneficiaries to Nestor’s for purported home health and therapy services. Nestor, in turn, fraudulently billed Medicare for approximately $6.5 million for home health care services purportedly provided to the Medicare beneficiaries. Euridice Borroto was a patient recruiter who solicited patients to participate in the scheme at Nestor’s. If convicted, the defendants face up to five years in prison for each count charged.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne P. McNamara of the Criminal Division’s Fraud Section.
19. United States v. Annarella Garcia and Annilet Dominguez, Case No. 14-20301-CR-Moreno
Annarella Garcia, 44, and Annilet Dominguez, 27, both of Hialeah, are charged with conspiracy to commit health care fraud. Dominguez is also charged with substantive counts of making false statements related to health care matters, and the other defendant is also charged with money laundering. The indictment alleges that the defendants participated in a scheme involving Professional Medical Home Health LLC. (Professional Home Health). The defendants and their co-conspirators submitted false and fraudulent claims for home health services that were not provided and/or were not medically necessary. In turn, Medicare paid Professional Home Health approximately $6 million for services purportedly provided to Medicare beneficiaries. If convicted, the defendants face up to 20 years in prison for the money laundering charge, up to ten years in prison for the health care fraud charge, and up to five years in prison for each false statement charge.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne P. McNamara of the Criminal Division’s Fraud Section.
20. United States v. Armando Buchillon and Lizette Garcia, Case No. 14-20299-CR-Lenard
Armando Buchillon, 42, of Miami, is charged with conspiracy to commit health care fraud and substantive health care fraud. Lizette Garcia, 37, of Hialeah, is charged with payment of kickbacks in connection with a federal health care program. The indictment alleges that the defendants participated in a scheme involving Anna Nursing Services Corp. Buchillon, a registered nurse, was Anna Nursing’s Director of Nursing. Garcia was a receptionist and office worker. The defendants paid kickbacks and bribes to patient recruiters, in exchange for the recruiters providing Medicare beneficiaries to Anna Nursing for purported home health and therapy services. As a result of the submission of fraudulent claims on behalf of these beneficiaries, Medicare paid Anna Nursing more than $7 million for purported home health services. If convicted, the defendants face up to ten years in prison for each heath care fraud charge, and up to five years in prison for the kickback-related charge.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne P. McNamara of the Criminal Division’s Fraud Section.
21. United States v. Barry Kaplowitz, M.D., Christopher Gabel, Melvin Hunter and Tiffany Foster, Case No. 14-20323-CR-Altonaga
Barry Kaplowitz, M.D., 53, of Aventura, Christopher Gabel, 61, of Davie, Melvin Hunter, 61, of Davie, and Tiffany Foster, 47, of Alabama, are charged with participating in a conspiracy to commit health care and wire fraud arising from claims made to Medicare by Hollywood Pavilion, LLC (“HP”), a state licensed psychiatric hospital located in Hollywood that purportedly provided inpatient and outpatient psychiatric care to Medicare beneficiaries. Dr. Barry Kaplowitz is also charged with health care fraud and false statements relating to health care matters related to claims HP made to Medicare for patients that he purportedly treated. Christopher Gabel, Melvin Hunter and Tiffany Foster are also charged with participating in a conspiracy to pay illegal bribes and kickbacks to patient brokers and causing claims to be submitted for Medicare beneficiaries who were procured through bribes and kickbacks. The indictment alleges that from at least 2003 through September 2012, HP billed Medicare more than $67 million for services that were never rendered, for patients that did not qualify for the services being billed, and for claims that were procured through bribes and kickbacks. If convicted, the defendants face up to 20 years in prison for wire fraud, up to 10 years for health care fraud, and up to five years for the false statements and the kickback counts
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorney Nicholas Surmacz of the Criminal Division’s Fraud Section.
22. United States v. Gabriel Delgado and Guillermo Delgado, Case No. 14-2581-Otazo Reyes
Guillermo Delgado, 42, and Gabriel Delgado, 41, both of Miami, are charged with conspiracy to defraud the United States and receive health care kickbacks, receipt of kickbacks in connection with a federal health care program and conspiracy to commit money laundering. As alleged in the complaint, the defendants are patient recruiters who controlled numerous patients residing in Assisted Living Facilities (ALFs) located in the Miami area and referred them to pharmacies, home health agencies, and community mental health centers among other Medicare providers in exchange for kickback payments. The complaint also alleges that the defendants led a money laundering scheme with Jose Morales, the owner and operator of Morales Pharmacies whereby the defendants would provide checks to Morales for him to cash through a Western Union franchise operated by Morales. The complaint alleges that the defendants and Morales submitted and caused to be submitted approximately $23,367,755.07 in false and fraudulent claims to the Medicare and Florida Medicaid programs. Morales pleaded guilty in December 2012 to one count each of health care fraud and payment of kickbacks for his role in the scheme. If convicted, the defendants face up to five years in prison for each kickback count, and up to 20 years for the money laundering conspiracy.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorney Allan Medina of the Criminal Division’s Fraud Section.
23. United States v. Nelson Salazar, Case No. 14-20326-CR-Martinez
Nelson Salazar, 45, of Miami, is charged with conspiracy to commit health care fraud. The information filed against Salazar alleges that he was a patient recruiter for American Therapeutic Corporation (ATC) who would pay and receive kickbacks in exchange for referring Medicare beneficiaries to attend ATC. The information further alleges that Salazar and others caused false and fraudulent claims to be submitted to Medicare for services purportedly provided at ATCs locations. If convicted, the defendant faces up to ten years in prison.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorney Allan Medina of the Criminal Division’s Fraud Section.
24. United States v. Francisco Pabon, Case No. 14-20327-CR-Ungaro
Francisco Pabon, 64, of Miami, is charged with conspiracy to commit health care fraud. The information filed against Pabon alleges that he was a mental health technician and social worker at an inpatient psychiatric hospital located in Miami, and he received illegal health care kickbacks in exchange for referring inpatient psychiatric patients to Health Care Solution Network (HCSN). The information further alleges that Pabon and his co-conspirators submitted and caused to be submitted claims to Medicare and Medicaid in an approximate amount of $63 million for partial hospitalization program services that were not medically necessary and were not provided at HCSN in Florida and North Carolina. If convicted, the defendant faces up to 10 years in prison.
Mr. Ferrer commended the investigative efforts of FBI and HHS-OIG. This case is being prosecuted by Trial Attorney Allan Medina of the Criminal Division’s Fraud Section.
25. United States v. Lazaro Martinez, Case No. 14-20329-CR-Cooke
Lazaro Martinez, 72, of Miami, was a patient recruiter who received illegal health care kickbacks from Jose Carlos Morales, the former owner and operator of the Morales Pharmacies, and, in turn, paid illegal health care kickbacks to owners and operators of assisted living facilities located in Miami. Morales agreed to pay illegal health care kickbacks to patient recruiters like Martinez to guarantee a stream of beneficiary information to be used to submit false and fraudulent claims to Medicare and Medicaid. If convicted, the defendant faces up to five years in prison.
Mr. Ferrer commended the investigative efforts of FBI and HHS-OIG. This case is being prosecuted by Trial Attorney Allan Medina of the Criminal Division’s Fraud Section.
26. United States v. Michael Mendoza, Case No. 14-20328-CR-Lenard
Michael Mendoza, 45, of Miami, is charged with conspiracy to commit health care fraud. The information filed against Mendoza alleges that Mendoza was a patient recruiter for American Therapeutic Corporation (ATC), which purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness. As further alleged in the information, Mendoza agreed with the owner of ATC and others to refer patients to ATC in exchange for kickbacks. According to the information, the PHP services for which the patients were referred to ATC were not medically necessary and not provided. If convicted, the defendant faces up to ten years in prison.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case is being prosecuted by Trial Attorney Allan Medina of the Criminal Division’s Fraud Section.
An indictment and information are merely charges and defendants are presumed innocent until 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.
Fifth and Final Defendant Sentenced in the Treasure Valley Meth Distribution RingRead the Press Release
BOISE B Mexican national Luis Angel Nunez-Leon, 25, a Mexican national illegally in the United States, was sentenced yesterday to 30 months in prison followed by three years of supervised release for distributing methamphetamine, U.S. Attorney Wendy J. Olson announced. U.S. District Judge John C. Coughenour, visiting from the Western District of Washington, also ordered Nunez-Leon to forfeit $6,060 in United States currency seized during the investigation.
Nunez-Leon pled guilty on November 26, 2013. During his plea hearing, Nunez-Leon admitted driving co-Defendant Angel Valdez-Soto to and from a drug transaction in Caldwell, Idaho on April 11, 2011. Nunez-Leon admitted knowing that Valdez-Soto had arranged to distribute 55 grams of methamphetamine. During the transaction, Valdez-Soto distributed 55 grams of methamphetamine to a confidential informant.
Four co-defendants have been sentenced. Angel Valdez-Soto, a Mexican national, was sentenced on May 22, 2012 to 108 months in prison followed by five years of supervised release for distributing methamphetamine. Roy Brian Coolidge of Nampa, Idaho, was sentenced on April 2, 2012 to 57 months in prison followed by five years of supervised release for conspiracy to distribute methamphetamine. Jose Romos-Gonzales, a Mexican national, was sentenced on June 5, 2012 to 188 months in prison, followed by five years of supervised release for distributing methamphetamine. Jose Gregorio Valenzuela-Favela, a Mexican national, was sentenced on February 19, 2014 to 57 months in prison for distributing methamphetamine.
"These sentences demonstrate that those who poison our communities and our youth with methamphetamine will serve long sentences in federal prisons,@ said Olson. AState and federal law enforcement officers throughout Idaho will work together to ensure that drug traffickers are caught, prosecuted and convicted."
The case was investigated by the Boise Police Department Narcotics Unit, the Drug Enforcement Administration (DEA) and the Nampa Police Department.
Federal Authorities Arrest Suspended Catholic PriestRead the Press Release
SAN JUAN, Puerto Rico – A federal grand jury returned a four-count indictment against Israel Berríos-Berríos, a suspended Catholic priest, for sex trafficking of children and transporting a minor with the intent to engage criminal sexual conduct, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico.
The indictment alleges that from in or about the year 2007, through in or about 2008, Berríos-Berríos, while affecting interstate commerce, did knowingly recruit, entice, harbor, transport, provide, obtain and maintain, a 14-15 year-old male, identified as “John Doe,” knowing that said minor had not attained the age of 18. Defendant transported minor “John Doe” in an automobile owned and used by the San José Parish, from Aibonito, PR, to the defendant’s residence located in Naranjito, PR, knowing that “John Doe” would engage in a commercial sex act.
From on or about July 21, 2008, through on or about July 30, 2008, the defendant transported “John Doe” to the City of Miami, Florida, where together they took a four-day cruise to the Bahamas aboard the vessel known as “Majesty of the Seas,” knowing that minor “John Doe” would engage in a commercial sext act.
“Unfortunately, sexual abuse of children has become all too common in Puerto Rico,” said United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. “The USAO for the District of Puerto Rico is committed to taking full advantage of our investigative tools in order to protect our children from sexual predators. I urge the public to be on the lookout for children being transported anywhere within Puerto Rico for the purpose of engaging in any sexual activity, and to contact the authorities immediately.”
The case is being prosecuted by Assistant U.S. Attorney Marshal D. Morgan, Coordinator of the initiative Project Safe Childhood. If convicted, the defendant faces a mandatory minimum sentence of incarceration of ten years and a possible maximum statutory penalty of life imprisonment.
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 U.S. Attorneys’ offices and 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.
“These allegations are especially disturbing given the position of trust the defendant has occupied,” said Ángel M. Meléndez, special agent in charge of HSI San Juan. “Identifying people who violate their positions of public trust by contributing to the exploitation of children is a top priority for HSI. Anyone who targets children for sexual exploitation should also consider themselves a target by HSI and by our law enforcement partners regardless of who they are. We have an obligation to protect those most vulnerable in our society who cannot protect themselves.”
A criminal indictment contains only charges and is not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty.
Essex County, N.J., Man Arrested in Multi-Million Dollar Real Estate Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man was arrested at his home by federal law enforcement officers this morning on charges that he allegedly ran a real estate investment scheme that bilked victims out of $4 million, U.S. Attorney Paul J. Fishman announced today.
Abbe Edelman, 50, of Livingston, is charged by complaint with six counts of wire fraud. He is scheduled to make his initial court appearance later today before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the complaint:
Beginning in 2004, Edelman operated through several companies alleged to be in the business of buying and selling real estate. He allegedly engaged in a real estate investment fraud in which he obtained millions of dollars from victims who invested in his scheme. Edelman told investors that he had significant past real estate experience, including a purported history of successfully buying and selling numerous bank foreclosed properties, and an MBA degree from NYU in real estate finance. Edelman claimed that he had long standing relationships with banks that provided him with unique access to purchase foreclosed properties below market prices and, in fact, already had negotiated with the banks to purchase certain properties at agreed-upon prices that would guarantee an easy resale and profit for investors.Edelman promised investors that any investment would be used solely for the purchase and renovation of specific investment properties in, among other places, New York, New Jersey, California, and Florida. Edelman represented to his investors that he could obtain extraordinary returns – as much as 25 percent – in as little as eight to 12 months. Edelman allegedly told some victims he had received from other investors, including professional athletes and celebrities, the majority of the capital needed to purchase the investment properties. He also said he provided cash deposits to the financial institutions to secure the right to purchase the investment properties and invested his own money in the deals.
In reality, neither Edelman nor any of his real estate companies had a history of purchasing any bank foreclosed properties. Edelman also did not possess even an undergraduate degree. He did not have any deals lined up involving any investment properties, did not have his own money invested in any such deals, and did not have any money from celebrity investors. Edelman induced investors to give him $4 million and used little, if any, of it to fund any real estate acquisitions or renovations, instead diverting the funds for his own use.
He allegedly used the funds for his home mortgage and day-to-day living expenses, such as restaurants, telephone, and gas bills, purchased merchandise from high-end retailers, such as Gucci and Neiman Marcus, repaid existing investors in Ponzi-scheme fashion and paid his legal expenses in connection with victims seeking repayment of their investment.When investors later inquired about the status of their investments, Edelman offered additional misrepresentations, including emails sent from a fake email account he had created, falsely assuring investors that he and his company had closed on the foreclosed properties, sometimes telling them buyers for the properties already had been identified.
In some cases, to allow the scheme to continue undetected, Edelman made “lulling” payments to investors, ranging from $100 to tens of thousands of dollars, to permit the scheme to continue. When payments were made to any investors, Edelman generally represented that the money was from the sale of investment properties, when, in fact, it came from a new investor.The wire fraud counts with which he is charged each carry a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited criminal investigators with the U.S. Attorney’s Office and postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s arrest.
The charges and allegations against Edelman are merely accusations and he is considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky of the Economic Crimes Unit and Evan S. Weitz of the Asset Forfeiture and Money Laundering Unit.
Today’s arrest 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. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
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Edelman, Abbe Complaint
Eric Pack of Burlington Sentenced to 60 Months for Distribution of Crack CocaineRead the Press Release
The Office of the United States Attorney for the District of Vermont stated Eric Pack, 54, of Burlington, Vermont was sentenced on May 13, 2014 for distribution of crack cocaine. Judge J. Garvan Murtha, sitting in Brattleboro, sentenced Pack to 60 months in prison, to be followed by three years of supervised release.
According to court records, the Burlington Police Department conducted controlled purchases of crack cocaine from Pack in February and March 2013. At the time Pack was selling crack cocaine, he was on probation with the State of Vermont for possession of stolen property. Pack was arrested in June 2013 and plead guilty on January 23, 2014 to a two-count information charging him with distribution of crack cocaine.
This matter was investigated by the Burlington Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Border Patrol, with the assistance of the United States Marshals Service. The case was prosecuted by Assistant U.S. Attorney Kevin J. Doyle. Pack is represented by Elizabeth D. Mann, Esq.
Dallas-Based Physician and Home Health Agency Director of Nursing Convicted in $3 Million Medicare Fraud ConspiracyRead the Press Release
Late yesterday, a federal jury in the Northern District of Texas convicted a physician and a home health agency manager for their participation in a $3 million Medicare fraud conspiracy.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Sarah R. Saldaña of the Northern District of Texas, Special Agent in Charge Diego Rodriguez of the FBI Dallas Division and Special Agent in Charge Mike Fields of the Dallas office of the Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations made the announcement.
Joseph Megwa, M.D., and Ebolose Eghobor, R.N., were convicted of one count of conspiracy to commit health care fraud, and Megwa was convicted of three substantive counts of health care fraud. Eghobor was acquitted of the three substantive health care fraud counts brought against him. The home health care charges related to a scheme involving PTM Healthcare Services Inc. (PTM), which was owned and operated by Ferguson Ikhile, R.N. Ikhile pleaded guilty in 2013 to conspiracy to commit health care fraud.
According to evidence presented at trial, from approximately 2006 to 2011, PTM recruited Medicare beneficiaries so that PTM could bill Medicare for unnecessary home health services. Ikhile, Eghobor and others then prepared fraudulent medical records that made it appear that the beneficiaries needed home health services. In exchange for cash payments, Megwa, who owned and operated Raphem Medical Practice P.A., falsely certified that the beneficiaries needed home health services and that the services otherwise qualified for payment under Medicare.
Megwa was also convicted of four counts of making false statements related to a health care benefit program based on his submission of false claims to Medicare for home visits or house calls to patients that he never actually made.
The investigation was led by the FBI, HHS-OIG and the Medicaid Fraud Control Unit of the Office of the Texas State Attorney General and was brought by the Medicare Fraud Strike Force, a joint effort of the U.S. Attorney’s Office for the Northern District of Texas and the Criminal Division’s Fraud Section. The case was prosecuted by Deputy Chief Jeffrey A. Goldberg and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.