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26 June 2014
Ambulance Company Manager Sentenced to Five Years for Role in Medicare Fraud ConspiracyRead the Press Release
PHILADELPHIA – Mikhail Vasserman, 51, of Philadelphia, PA., was sentenced today to five years in prison for his role in a health care fraud scheme involving Penn Choice Ambulance Inc., operating from Huntingdon Valley, PA and Camp Hill, PA. Vasserman pleaded guilty on October 21, 2013 to conspiracy to commit health care fraud, false statements relating to health care matters, and paying kickbacks to patients, a total of 14 counts. Vasserman, who was the manager for Penn Choice’s Huntingdon Valley base, was indicted with the company’s owner Anna Mudrova, and operators Yury Gerasyuk, Irina Vasserman, Aleksandr Vasserman, Khusen Akhmedov, and Valeriy Davydchik, all of whom have pleaded guilty.
The scheme involved more than $3.6 million in fraudulent claims submitted to Medicare. The defendants conspired to defraud Medicare by recruiting patients who were able to walk and could travel safely by means other than ambulance and who therefore were not eligible for ambulance transportation under Medicare requirements. The defendants, and others acting on their behalf, falsified reports to make it appear that the patients needed to be transported by ambulance when the defendants knew that the patients could be transported safely by other means and that many of them walked to the ambulance for transport. The defendants themselves, or through others, paid illegal kickbacks to the patients as part of scheme. The defendants billed Medicare for these ambulance services as if those services were medically necessary and, as a result of the fraudulent billing, the Medicare program sustained losses of more than $1.5 million for this medically unnecessary method of transportation.
In addition to the prison term, U.S. District Court Judge Juan R. Sànchez ordered three years of supervised release, restitution in the amount of $1,703,450.74, joint and several with the co-defendants, a special assessment of $1,400 and forfeiture of any assets traceable to the offense.
In prior proceedings, defendant Khusen Akhmedov, an EMT, was sentenced to 27 months in prison; ambulance drivers, Valeriy Davydchik and Yury Gerasyuk, were each sentenced to 24 months in prison; and the corporation was ordered to pay restitution and to cease all operations. The three remaining defendants are awaiting sentencing.
The case was investigated by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services, Office of the Inspector General. It is being prosecuted by Assistant United States Attorney M. Beth Leahy.
In addition to restitution to Medicare of $1,548,583.93, the Court ordered restitution of approximately $154,866.81 payable to Highmark Blue Cross, which provides supplemental insurance to Medicare beneficiaries.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Alaska Attorney Pleads Guilty to Failing to File Income Tax ReturnsRead the Press Release
Paul D. Stockler pleaded guilty today in the U.S. District Court in Anchorage, Alaska, to three counts of willful failure to file income tax returns, the Justice Department and Internal Revenue Service (IRS) announced.
According to the plea agreement, Stockler is an attorney who operated a law practice in Anchorage. For tax years 2006, 2008 and 2009, he earned gross income in excess of the filing threshold, but failed to file U.S. individual income tax returns reporting this income to the IRS. Stockler faces a statutory maximum sentence of one year in prison, one year of supervised release, and a fine of up to $100,000 for each count of willful failure to file an income tax return.
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Kevin F. Sweeney and Katherine Wong of the Justice Department’s Tax Division are prosecuting the case.
25 June 2014
Woodstock, Vermont Business Woodstock Pharmacy Takes Steps to Comply with the Americans with Disabilities ActRead the Press Release
The United States Attorney’s Office for the District of Vermont announces that the owners of Woodstock Pharmacy located at 19 Central Street, Woodstock, Vermont have agreed to complete specific modifications to come into compliance with Title III of the Americans with Disabilities Act (“ADA”). Title III of the ADA prohibits a public accommodation from denying an individual or a class of individuals, on the basis of a disability, the opportunity to participate in or benefit from the goods, services, facilities, or accommodations of an entity. Title III requires a public accommodation to remove architectural barriers to access in existing facilities where it is readily achievable to do so. The United States Attorney’s Office’s investigation began following a complaint made to the Vermont Human Rights Commission regarding the accessibility of Woodstock Pharmacy.
An onsite survey of Woodstock Pharmacy performed by United States Department of Justice architects revealed ADA compliance issues related to the shop’s entrances and interior spaces. Woodstock Pharmacy will remedy ADA compliance issues related to the shop’s entrances and interior by October 1, 2014.
Woodstock Pharmacy’s owner recognized the obligation to address the issues identified in the onsite survey. Gary Smith, owner of Woodstock Pharmacy, is to be commended for his cooperation with the Office of the United States Attorney for the District of Vermont.
The Office of the United States Attorney for the District of Vermont worked in partnership with Tracey Tsugawa of the Vermont Human Rights Commission in addressing and resolving these important civil rights issues. Assistant United States Attorney Nikolas P. Kerest, with assistance from the Disability Rights Section of the Civil Rights Division of the Department of Justice, handled this matter on behalf of the United States and is working with other Vermont businesses to resolve their ADA compliance issues. Further information on the ADA and its requirements may be found at www.ada.gov.
Williamson County Man Pleads Guilty to Methamphetamine ConspiracyRead the Press Release
Follow @SDILNewsOn June 25, 2014, John S. Andrews, 30, of Marion, pled guilty to a one-count indictment, charging conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
The offense occurred between August 2012 and December 2012, in Jackson County. Evidence at the plea hearing established that Andrews and others obtained pseudoephedrine together for use in the manufacture of methamphetamine. Andrews, who is currently incarcerated in the Illinois Department of Corrections, is set for sentencing on the federal offense on October 30, 2014. At that time, he faces a term of imprisonment of up to 20 years, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The investigation was conducted by the Jackson County Sheriff’s Office and the Murphysboro Police Department.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Williamson County Man Pleads Guilty to Firearm and Cocaine OffensesRead the Press Release
Follow @SDILNewsOn June 25, 2014, James D. Gunn, 34, of Marion, pled guilty to a two-count indictment, charging unlawful possession of a firearm by a felon and possession with intent to distribute cocaine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
The offenses occurred on October 31, 2013, in Williamson County. Evidence at the plea hearing established that Gunn sold cocaine to a confidential source working for law enforcement. During an October 31, 2013, search warrant at Gunn’s Marion residence, agents located a Ruger, Super RedHawk, .44 caliber revolver, cocaine, digital scales, drug packaging materials, and U.S. currency. Upon arrest, Gunn admitted to ownership of the firearm and cocaine. At the plea hearing, Gunn’s bond was revoked and he was remanded to the custody of the U.S. Marshals Service, pending an October 30, 2014, sentencing hearing.
On the firearm offense, Gunn faces a term of imprisonment of up to 10 years, to be followed by 3 years’ supervised release, and a $250,000 fine. On the cocaine offense, Gunn faces a term of imprisonment of up to 20 years, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The investigation was conducted by the Southern Illinois Enforcement Group. The Bureau of Alcohol, Tobacco, Firearms, and Explosives, Illinois State Police, and Williamson County States Attorney’s Office assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Wilkes-Barre Man Sentenced to Prison on Drug ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Wilkes-Barre man was sentenced yesterday, in federal court in Scranton, by United States District Judge Malachy Mannion, to serve 151 months in prison on a charge of conspiracy to distribute heroin.
According to United States Attorney Peter Smith, Zacharae Lowe, age 31, a resident of Wilkes-Barre pleaded guilty to the conspiracy charge in Octoberof 2013.
Lowe was charged after an investigation conducted by the United States Drug Enforcement Administration, the Pennsylvania State Police and the Wilkes-Barre Police Department. An Indictment was filed against Lowe and nine other persons on May 21, 2013. The charges against Lowe arose from his involvement in heroin trafficking and possession of firearms. Lowe was sentenced as a career offender under the United States Sentencing Commission Sentencing Guidelines.
In addition to the prison term, Judge Mannion ordered that Lowe be supervised by a probation officer for 4 years following his release from prison.
The case was prosecuted by Assistant United States Attorney William S. Houser.
Wilkes-Barre Man Sentenced to Prison on Drug ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Wilkes-Barre man was sentenced yesterday, in federal court in Wilkes-Barre, by United States District Judge A. Richard Caputo, to serve 151 months in prison on a charge of possession with intent to distribute cocaine and crack cocaine.
According to United States Attorney Peter Smith, Robert Tolbert, age 40, a resident of the Wilkes-Barre area, pleaded guilty to the drug charge in February of this year.
Tolbert was charged after an investigation conducted by the Federal Bureau of Investigation, the Pennsylvania Office of Attorney General Bureau of Narcotics Investigation, the Plains Township Police Department, and the Luzerne County District Attorney’s Office. The investigation resulted in charges against Tolbert and ten others. An Information was filed against Tolbert on January 21, 2014. The charge against Tolbert arose from his involvement in cocaine and crack cocaine trafficking. Tolbert was sentenced as a career offender under the United States Sentencing Commission Sentencing Guidelines.
In addition to the prison term, Judge Caputo ordered that Tolbert be supervised by a probation officer for 3 years following his release from prison.
The case was prosecuted by Assistant United States Attorney John C. Gurganus.
Wentzville Man Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – JAMES STALEY was indicted for his alleged scheme to defraud investors by making false promises of high rates of return and minimal risk. The indictment states that Staley defrauded eleven investors/lenders by causing them to invest over $3.4 million, giving him commissions totaling over $570,000.
According to the indictment, in 2007, James Staley operated Wealth Financial International. That same year, he became a sales agent for a Premium Financing Company located in California known as B & B Equity. As a sales agent Staley found individuals to provide loans for life insurance policies. In many instances, several of these investor/lender’s funds were bundled together to provide financing to purchase one life insurance policy. Staley received a commission for each investor/lender that he found to contribute financing for the purchasing of the life insurance policies. B & B required the lender/investor to invest in the insurance policy for a fixed period of time varying from 18 months to two years. During this period of time Staley represented to clients of Wealth Financial that B & B Premium Financing Company would sell the bundled insurance policies on the open market with guaranteed returns. However, Staley was well aware that if B & B was unable to secure a buyer for the bundled insurance policies, his clients would lose all their monies invested in the Premium Financing product sold by B & B. The indictment states that Staley defrauded eleven investors/lenders by causing them to invest over $3.4 million with B & B, giving him commissions totaling over $570,000.
Staley, Wentzville, MO, was indicted by a federal grand jury on three felony counts of wire fraud on June 18, 2014. He appeared in federal court earlier this week.
If convicted, wire fraud carries a maximum penalty of 30 years in prison and/or fines up to $ 1 million. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Dianna Collins is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.U.S. Attorney Announces “take 25” Child Safety Event in TucsonRead the Press Release
TUCSON, Ariz. - The National Center for Missing and Exploited Children (NCMEC) created the Take 25 campaign to encourage families to take 25 minutes to talk to their children about safety and abduction prevention. NCMEC estimates that 800,000 children are reported missing in America every year, which is more than 2,000 children each day. Fortunately, most of these children are quickly located.
NCMEC has found that in 51% of attempted abduction cases, children escaped would-be abductors through their own actions. 32% of the children actively resisted (yelling, kicking, pulling away, running away, or attracting attention). Even more inspiring is that in 17% of these cases, a parent or another individual intervened to rescue the child. Teaching and reassuring children about safety - without scaring them - requires a delicate balance. Take 25 provides parents tools and age-appropriate suggestions for approaching the topic of safety with their children.
“The annual Take 25 national child safety campaign is particularly important this time of year, when children begin their summer breaks from school and have more time on their hands” said U.S. Attorney John S. Leonardo. “We encourage parents to take time and pledge to talk with their children about safety and abduction prevention. We hope that the tools and information provided at this year’s Take 25 event will assist families in keeping their children safe.”
This year, the United States Attorney’s Office, in partnership with the U.S. Marshals Service, Department of Homeland Security, Federal Bureau of Investigation, the Tucson Police Department, the Arizona Attorney General’s Office, the Pima County Sheriff’s Office, and the Arizona Child Advocacy Center, will offer a Take 25 child safety event at the Tucson Children’s Museum. This event is designed to help parents and others teach children to be alert to potential threats and provide steps that children can take to stay safe, both on the Internet and in daily life.
The event will be held on Monday, June 30, 2014 at the Children’s Museum Tucson, from 9:00 a.m. to 4:00 p.m. Information regarding child safety will be provided, and law enforcement representatives will be available to speak with children and parents. In addition, interactive children’s self-defense demonstrations by Ko Sho Martial Training Institute will be scheduled throughout the day, and digital child identification kits will be provided free of charge to those that attend.
For more information on NCMEC, visit www.missingkids.com. For more information about the Take 25 campaign, visit www.Take25.org. For more information on Project Safe Childhood, visit www.projectsafechildhood.gov.
RELEASE NUMBER: 2014-036_Take_25_Tucson
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Two Former Stock Brokers Charged in Manhattan Federal Court with Insider Trading OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), today announced conspiracy and securities fraud charges against BENJAMIN DURANT and DARYL PAYTON, two former stock brokers at a securities trading firm (“Securities Trading Firm-1”), for their alleged involvement in an insider trading scheme. Specifically, DURANT, PAYTON, and their co-conspirators allegedly traded on the basis of material, non-public information (“Inside Information”) concerning IBM’s acquisition of a software company, SPSS, Inc., in 2009, earning hundreds of thousands of dollars in profits. DURANT and PAYTON were arrested this morning at their homes in Manhattan, New York, and will be presented in Manhattan federal court before U.S. Magistrate Judge Michael H. Dolinger this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Benjamin Durant and Daryl Payton not only acquired inside information about a corporate acquisition and made illegal profits from it, but they colluded with others to conceal their crime, even holding a secret meeting at a hotel the night the acquisition was announced to devise their cover-up plan. This kind of dishonesty is profitable only in the short run, ultimately leading to arrest and prosecution.”
FBI Assistant Director-in-Charge George Venizelos said: “The defendants bought SPSS stock and options before a leaked acquisition by IBM, violating the law and breaching their duty, as alleged. When Durant and Payton were asked about their trades in an internal investigation, they doubled down and lied. Today they find themselves under arrest. The integrity and fairness of our financial markets are paramount. It’s a matter of national security. We will police this type of illegal behavior and make as many arrests as necessary until people stop cheating and ripping off others to get ahead.”
In a separate action, the U.S. Securities and Exchange Commission (“SEC”) announced civil charges against DURANT and PAYTON.
The following allegations are based on the Indictment unsealed today in Manhattan federal court:
The Inside Information concerning IBM’s acquisition of SPSS originated from a corporate lawyer who was part of the legal team that represented IBM in the transaction (“Attorney-1”) in 2009. On May 31, 2009, Attorney-1 shared Inside Information concerning the transaction, including the names of the parties and the fact that IBM was going to acquire SPSS for a significant premium over its market price, with his close friend, Trent Martin, a former research analyst at an international financial services firm. The information was shared in confidence and, based on their longstanding history of sharing confidences, Attorney-1 expected that Martin would not share the information or use it to trade.
However, in June and July 2009, Martin bought SPSS common stock and call option contracts based on the Inside Information he was given by Attorney-1 and, in turn, shared the tip with his roommate, Thomas Conradt, who worked as a stock broker at Securities Trading
Firm-1. In July 2009, Conradt passed along the tip to DURANT and PAYTON, his co-workers at Securities Trading Firm-1, who then bought SPSS call options based on the Inside Information. When IBM announced its acquisition of SPSS on July 28, 2009, the share price of SPSS common stock rose by 41% in one day. Thereafter, DURANT, PAYTON, Martin, Conradt and David Weishaus, whom Conradt also tipped, sold their SPSS positions, yielding total profits worth hundreds of thousands of dollars.
After IBM announced its acquisition of SPSS, DURANT and PAYTON took steps to conceal their illegal insider trading activity. On the evening the IBM/SPSS transaction was announced, DURANT and PAYTON met Conradt, Weishaus, and another co-conspirator at a hotel in Manhattan. At that meeting, DURANT, PAYTON, and the others discussed their trading in SPSS securities and how much money they made. When they were all together, DURANT suggested that if anyone asked why they had traded in SPSS securities, they should simply say that they liked technology stocks. Thereafter, prior to the sale of his call options, PAYTON transferred his options from securities accounts at Securities Trading Firm-1 to two securities accounts that he opened at a different brokerage firm. In doing so, PAYTON falsely informed the new brokerage firm during a recorded telephone call that he was a “self-employed real estate consultant,” rather than a stock broker at Securities Trading Firm-1. In that call, a representative from the new brokerage firm specifically informed PAYTON that if he worked at a broker/dealer, duplicate account statements might have to be sent to his employer. Nevertheless, PAYTON did not inform the new brokerage firm that he worked at Securities Trading Firm-1. Later, in November 2009, when Securities Trading Firm-1 conducted an investigation into the trading activity of DURANT and PAYTON in SPSS, both of them offered cover stories for their SPPS trading and neither indicated that he had heard about SPSS from, or spoken about the company with, Conradt, Weishaus, or another co-conspirator.
DURANT, 37, of New York, New York, has been charged with one count of conspiracy to commit securities fraud and two counts of securities fraud (Count Two and Three). PAYTON, 38, also of New York, New York, has been charged with one count of conspiracy to commit securities fraud and three counts of securities fraud (Count Four through Six). Count One, the conspiracy charge, carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. Counts Two through Six each carry a maximum potential penalty of 20 years in prison and a maximum fine of $5 million. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Martin, Conradt, and Weishaus have previously pled guilty.
Mr. Bharara praised the investigative work of the FBI. He also thanked SEC for its assistance in the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Telemachus P. Kasulis and John T. Zach are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Benjamin Durant and Daryl Payton Indictment
Two Area Men Plead Guilty to Federal Heroin ChargesRead the Press Release
Beckley, W.Va. – United States Attorney Booth Goodwin announced today that two area men pled guilty to drug charges in federal court in Beckley. Tommy Ray Prater II, 34, of Beaver, pled guilty to traveling in interstate commerce to facilitate unlawful activity. He admitted that on April 9 and 10, 2013, he and another person drove from Shady Spring, West Virginia to Camden, New Jersey, where they obtained heroin, and returned to Shady Spring where the heroin was sold. Prater admitted that he had made this same trip for heroin on other occasions. He faces a sentence of up to five years and a $250,000 fine. The case was investigated by the West Virginia State Police, the Raleigh County Sheriff’s Department, and the FBI.
Christopher Miller, 32, of Alderson, pled guilty to distribution of heroin. Miller admitted that in August of 2013, he distributed two packets of heroin to a person cooperating with law enforcement authorities. The drug deal took place in the Alderson area. Miller faces a sentence of up to twenty years and a $1,000,000 fine. His case was investigated by the Greenbrier County Drug and Violent Crime Task Force and is being prosecuted under the Greenbrier Heroin and Pill Initiative directed by the United States Attorney’s Office.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
United States District Judge Irene C. Berger set sentencings in both cases for October 23, 2014.Top Two Officers of Joe Gibson Suzuki Guilty as Charged in Federal CourtRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Lewis Jones Harward, Jr., age 41, of Myrtle Beach, South Carolina Richard James Harward, age 40, of Belton, South Carolina Lennie Wylie Sanders, age 32, of Danville, Virginia Wanda Suzette Smith, age 59, of Fountain Inn, South Carolina Kathy Valentine Stewart, age 60, of Easley, South Carolina Brian J. Sullivan, age 56, of Lawrenceville, Georgia
Columbia, South Carolina ----- United States Attorney Bill Nettles announced today that Paul Michael Gibson, age 57, of Spartanburg, South Carolina, and Billy John Mills, Jr., age 45, of Huntersville, North Carolina, have pled guilty as charged to a three count Federal Wire Fraud Indictment. The pleas were accepted by District Judge Timothy M. Cain sitting in the G. Ross Anderson Federal Courthouse in Anderson, South Carolina. Gibson and Mills join seven others who have entered pleas of guilty for their roles in the operation of Suzuki dealerships operating in Spartanburg and Gaffney, South Carolina, under the name of Joe Gibson Suzuki. (Names, ages and addresses of these seven are at the end of this release.) All nine will be sentenced after the preparation of Presentence Reports. Assistant United States Attorney David C. Stephens of Greenville was in charge of the prosecution of the case and presented the guilty pleas to the Court.
USA Nettles advised that the copy of the indictment attached hereto sets forth in detail the facts of the case, but that in summary Joe Gibson Suzuki, at one point one of the most productive Suzuki dealerships in the country, was an organization riddled with illegal practices. These practices included false advertising, false statements to induce banks to finance uncreditworthy purchasers, and false reporting of sales to cause bonuses to be paid by Suzuki of North America. Mr. Gibson was the owner of the dealership and Mr. Mills ran the day to day operations of the business. At the guilty plea hearing, AUSA Stephens stated that there was a “culture of corruption” that permeated the entire business. Joe Gibson Suzuki is no longer in business.
Mr. Nettles commended agents of the United States Postal Service and the Federal Bureau of Investigation for their years of work in investigating this case. Mr. Nettles stated that many aspects of this case were novel and that he was unaware of other criminal prosecutions of car dealers for misleading advertisements as in this case.
The following is a list of others convicted in this case:#####
Three Men Indicted on Gambling and Money Laundering ChargesRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Rochester has returned a 23-count indictment charging Paul Borrelli, 66, and Joseph Ruff, 32, both of Rochester, N.Y., and Mark Ruff, 40, of Connecticut, with conducting an illegal gambling business.
The indictment also charges Borrelli with 12 counts of money laundering, two counts involving the deposit of gambling proceeds into business accounts held by two Rochester companies to conceal the nature of gambling proceeds, and 10 counts of conducting financial transactions affecting interstate commerce which involved over $10,000 of proceeds of illegal gambling activity. Joseph Ruff was charged with 10 counts of money laundering, three counts of involving the deposit of gambling proceeds into specified bank accounts in order to conceal the nature of the gambling proceeds, and 10 counts of conducting financial transactions affecting interstate commerce which involved over $10,000 of proceeds of illegal gambling activity.
If convicted of the illegal gambling offense, the defendants face a maximum sentence of five years in prison, and a $250,000 fine. If convicted of the money laundering charges, Paul Borrelli and Joseph Ruff face a maximum sentence up to 20 years in prison and a $500,000 fine. Additionally, the defendants would be required to forfeit $76 million in United States currency, the sum of money equal to the total amount of gross wagers involved in the illegal gambling business, six bank accounts, three real properties and a vehicle.
Assistant U.S. Attorney Robert A. Marangola, who is handling the case, stated that according to the indictment, since January 2012, Borrelli, Joseph Ruff, and Mark Ruff have conducted an illegal gambling business involving sports betting which utilized multiple offshore internet gambling websites. The defendants provided betters with an account and password that permitted them to place wagers on various sporting events over the websites. The websites provide the “line” and tallied the total won or lost by the bettors. The cash payments to settle wagers generally occurred at face-face meetings, drop offs at residences or the Marina Bar (owned and managed by Borrelli and Joseph Ruff), FedEx deliveries, and bank deposits.
Borrelli was arrested at his residence at 31B Veldor Park in the City of Rochester, and Joseph Ruff was arrested today at his residence at 360 Edgemere Drive, a lakefront residence on Lake Ontario. Coinciding with their arrests this morning, federal search warrants were executed at each of their residences. During the searches, law enforcement seized over $80,000 in gambling proceeds secreted in various locations.
Borrelli and Joseph Ruff were arraigned this afternoon before Magistrate Judge Marian W. Payson and released on their own recognizance. They are due back in court on July 1, 2014.
An arrest warrant has been issued for Mark Ruff.
The indictment is the culmination of an investigation conducted by the Organized Crime Drug Enforcement Task Force, which included the Monroe County District Attorney’s Office, under the direction of District Attorney Sandra Doorley, Federal Bureau of Investigation, Internal Revenue Service, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office, Rochester Police Department, under the direction of Chief Michael Ciminelli, Drug Enforcement Administration, under the direction of Acting Special Agent in Charge James J. Hunt, New York Field Division, Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, New York Field Division, Greece Police Department, under the direction of Chief Patrick Phelan, and the Webster Police Department, under the direction of Chief Gerald Pickering.Three California Men Sentenced for Leading a Large Scale Juneau Oxycodone Distribution and Money Laundering ConspiracyRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that three defendants in a multi-year, multi-agency investigation have been sentenced for their roles in a large-scale drug trafficking and money laundering conspiracy operating between California and Alaska. The defendants sentenced were:
- MILAN CAPRICE THOMAS, 43, of Sacramento, California, was sentenced to 105 months imprisonment and three years of supervised release on June 24, 2014. Thomas pled guilty in May 2012 to conspiracy to distribute and to possession with the intent to distribute oxycodone, and conspiracy to launder money.
- DEANDRE TYRON DANTZLER, 34, of Sacramento, California, was sentenced to 144 months imprisonment and five years supervised release on June 24, 2014. Dantzler pled guilty in July 2011 to conspiracy to distribute and to possession with the intent to distribute oxycodone.
- RICHARD MELVIN CORUM, 31, of Sacramento, California, was sentenced to 120 months imprisonment and six years supervised release on June 23, 2014. Corum was convicted at a jury trial on July 1, 2013, for conspiracy to distribute and to possession with the intent to distribute oxycodone, and witness tampering.
According to filings with the court, Thomas, Dantzler and Corum were high-level members of a drug trafficking conspiracy who acquired large amounts of oxycodone from suppliers in the lower 48 states. In 2007, Thomas and Dantzler began transporting oxycodone on their person to Juneau, Alaska, using commercial air travel, and travelled back body-carrying drug proceeds. The pair later used drug couriers to carry drugs on commercial aircraft to Alaska and drug proceeds back to California. Thomas and Dantzler would arrange flights for couriers who would import the oxycodone to other members of the conspiracy in Juneau for subsequent sale. Thomas and Dantzler later used bank accounts and wire remittance companies to transfer drug proceeds from Alaska to California. Thomas and Dantzler used dozens of people in the procurement, transport, and sale of tens of thousands of oxycodone pills in the Juneau area and Thomas laundered over $1.5 million in drug proceeds through his bank account and that of another co-conspirator.
Corum joined the conspiracy in early 2011 as a source of supply. Due to heavy law enforcement interdiction efforts, Corum was later brought in by Thomas to be an equal member in the conspiracy. Corum recruited drug couriers to travel to Alaska for the conspiracy and had the couriers reside in the community, while receiving packages containing oxycodone via package delivery services in order to avoid detection.
On March 2, 2012, Corum was arrested for his role in the drug conspiracy. Corum made numerous threats to potential witnesses against him while awaiting trial. He said, “Everyone that is going to testify against me will disappear.” Corum later assaulted an individual who was cooperating with law-enforcement and was scheduled to testify at Corum’s trial. He was also convicted by the jury of a charge relating to this assault.
In sentencing the defendants, United States District Court Judge Timothy M. Burgess repeatedly emphasized the seriousness of the offense due to the human wreckage caused by the defendants’ distribution of a highly addictive narcotic, and noted the need to protect the public and to deter the defendants and others from committing these types of crimes in the future.
“This multimillion dollar enterprise submerged Juneau in a sea of addiction,” said DEA Special Agent in Charge Matthew G. Barnes. “The nationwide prescription drug and heroin epidemic is fueled by organizations just like this. The success of this investigation is attributed to the ongoing partnership between DEA and our federal, state, and local law enforcement partners.”
“Large-scale narcotic trafficking operations infect our communities with crime and destroy the lives of people caught up in using the poison they peddle,” said Kenneth J. Hines, Special Agent in Charge of Internal Revenue Service, Criminal Investigation, in Seattle. “Drug crimes leave a paper trail and I am pleased that the IRS partners with the interdiction efforts of the DEA and local law enforcement to dismantle these organizations.”
Ms. Loeffler commends the Drug Enforcement Administration, Internal Revenue Service - Criminal Investigation, Port of Seattle Police Department, and the Juneau Police Department - Drug Metro Unit, for the investigation leading to the successful prosecution and dismantlement of this large criminal organization.
Tampa Man Sentenced for Role in Fraudulent Tax Refund SchemeRead the Press Release
ROANOKE, VIRGINIA – A Tampa, Fla. man previously convicted of a scheme to profit from fraudulent United States Treasury checks was sentenced in absentia yesterday in the United States District Court for the Western District of Virginia in Roanoke.
Osama “Sam” Mustafa, 51, of Tampa, Fla., was previously convicted of one count of conspiracy to defraud the United States for the purpose of impairing the lawful functions of the Internal Revenue Service, to receive fraudulent Treasury Checks, to commit wire fraud and to structure currency transaction, one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering.
Yesterday in U. S. District Court, Mustafa was sentenced in absentia to 240 months of federal incarceration. In addition, $17.7 million in assets were ordered forfeited from the defendant. Mustafa removed his monitoring bracelet and fled law enforcement following his conviction and while awaiting sentencing, and his bail bond has been forfeited.
“Mr. Mustafa stole millions of dollars by obtaining fraudulent income tax refunds,” United States Attorney Timothy J. Heaphy said today. “Working with our investigative partners, we will do all we can to prosecute tax fraud and hold tax cheats accountable.”
“Using the U.S. Treasury as a personal piggy bank to obtain millions of dollars in fraudulent refunds, Mustafa not only showed his blatant disregard of the law, but also for those taxpayers victimized,” said Thomas J Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field
Office. “This sentencing is a reminder that identity thieves who use the personal information of unsuspecting victims to file bogus tax returns and steal millions of dollars from the U.S. Treasury, will be prosecuted to the fullest extent of the law.”Mustafa was convicted of purchasing fraudulent income tax return refund checks and checks issued for Refund Anticipation Loans, and then presenting those fraudulent checks for payment at financial institutions in the Western District of Virginia, Middle District of Florida, and elsewhere.
The investigation of the case was conducted by the Internal Revenue Service-Criminal Investigations, the Federal Bureau of Investigation, the United States Secret Service, the United States Marshals Service Asset Forfeiture Program, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the United States Attorney’s Office for the Middle District of Florida. Assistant United States Attorney Joseph Mott prosecuted the case for the United States.
St. Louis County Man Indicted on Tax ChargesRead the Press Release
St. Louis, MO – RAJU MUKHI was indicted for his alleged failure to file a report to the IRS on his foreign financial accounts and for filing false tax returns.
United States citizens are required to report income from foreign countries, such as bank account, securities and any other financial accounts on their tax returns. If the value is more than $10,000, they are required to file a Report of Foreign Bank and Financial Accounts, Form TD F90-22.1 (FBAR).
According to the indictment, Mukhi failed to disclose the existence of Clariden Bank and Goldman, Sachs & Company Bank-Singapore accounts and the income earned in these accounts to his tax preparers for the years 2006 and 2008. The indictment also states that Mukhi failed to file an FBAR disclosing that he had financial accounts in Singapore and Switzerland for years 2007-2010.Mukhi, St. Louis, MO, was indicted by a federal grand jury on two felony counts of filing false tax returns and four felony counts of failure to file reports of foreign bank and financial accounts. The indictment was returned June 5th, but remained sealed until the arrest of the defendant. He is expected to appear in federal court for arraignment this morning.
If convicted, each count of filing false tax returns carries a maximum penalty of three years in prison and/or fines up to $100,000. Each of the other counts carry a maximum penalty of five years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Dianna Collins is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Santostee Man Sentenced to Twenty-Seven Months for Assaulting Navajo TeenagerRead the Press Release
ALBUQUERQUE – Jayson Gustina, 24, an enrolled member of the Navajo Nation who resides in Sanostee, N.M., was sentenced this morning to 27 months in federal prison followed by three years of supervised release for his assault conviction. Gustina also was order to pay $1,654.92 in restitution to cover the costs of medical care for the victim of his criminal conduct.
Gustina was arrested on Oct. 23, 2013, on a criminal complaint charging him with assault resulting in serious bodily injury and aggravated sexual abuse. On Jan. 19, 2013, Gustina was indicted and charged with assault resulting in serious bodily injury and abusive sexual contact. According to court filings, Gustina assaulted the victim, a 16-year-old Navajo girl, and attempted to rape her on Aug. 21, 2013, in Shiprock, N.M.
On March 17, 2014, Gustina admitted assaulting the victim on Aug. 21, 2013. He also acknowledged that the victim suffered severe bruising, swelling, and a fractured cheek bone as a result of the assault.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety and was prosecuted by Assistant U.S. Attorney Paul H. Spiers.
The case was prosecuted as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Sand Springs Man Sentenced to 5 Months Home Detention, $30,000 Restitution for Theft of Government PropertyRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that DAVID ALLEN ROBERTS, age 32, of Sand Springs, Oklahoma, was sentenced to 5 years of probation with 5 months of home detention for THEFT OF GOVERNMENT PROPERTY, in violation of Title 18, United States Code, Section(s) 641. ROBERTS was also ordered to pay $30,727.65 in restitution.
Charges arose from an investigation by the Broken Arrow Police Department, the Naval Criminal Investigation Services and the Federal Bureau of Investigation. The defendant was indicted in November, 2013 and pled guilty in December, 2013.
The Indictment alleged that during the period of in or about February 2013 to on or about October 15, 2013, in the Eastern District of Oklahoma, the defendant did willfully and knowingly embezzle, steal, purloin, and convert to his own use and the use of another, things of value of the United States having a value of more than $1000.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing.
Assistant United States Attorney Christopher Wilson represented the United States.
Retailer Sentenced for Food Stamp FraudRead the Press Release
Obtained At Least $1.2 Million in Payments for Food Sales That Never Occurred
Baltimore, Maryland – U.S. District Judge William D. Quarles Jr. sentenced Abdullah Aljaradi, age 52, a citizen of Yemen residing in Baltimore, was sentenced to two years in prison followed by three years of supervised release for wire fraud in connection with a scheme to illegally redeem food stamp benefits in exchange for cash. Judge Quarles also entered an order that Aljaradi pay $1.2 million in forfeiture and restitution.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture’s Office of Inspector General, Northeast Region; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
Aljaradi and co-defendant Ahmed Ayedh Al-Jabrati operated two convenience stores, Second Obama Express and D&M Deli and Grocery, located next door to each other at 901 Harlem Avenue in Baltimore. According to their plea agreements and court documents, the stores participated in the Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients obtain EBT cards through the state Department of Human Resources, then use the EBT card to purchase approved food items from participating retailers.
Aljaradi and Al-Jabrati knew that it was a violation of SNAP regulations to trade cash for SNAP benefits. Nevertheless, from October 2010 to July 2013, Aljaradi and Al-Jabrati exchanged SNAP benefits for cash at less than face value of the EBT benefits, in violation of the food stamp program rules, and kept up to 50 percent of the benefits for themselves.
Judge Quarles determined today that Aljaradi obtained at least $1.2 million in payments for food sales that never occurred.
Eight of the 10 convenience store owners or operators who were indicted in September 2013 in connection with schemes to illegally redeem food stamp benefits in exchange for cash have pleaded guilty to food stamp fraud and/or wire fraud. Ahmed Ayedh Al-Jabrati, age 56, a citizen of Yemen residing in Baltimore, was sentenced to two years in prison, and ordered to pay restitution of $1.2 million. Jung Kim, age 52, of Ellicott City, Maryland, was sentenced to 20 months in prison, and ordered to forfeit $95,453.50 and pay restitution of $205,000. Amara Cisse, age 51, of Windsor Mill, Maryland, was sentenced to 27 months in prison and ordered to pay restitution of $654,349.24, and his wife, Fanta Keita was sentenced to two months in prison. John Cunningham, age 55, of Baltimore, was sentenced to two years in prison. Retailer Hyung Cho, age 40, was sentenced to 38 months in prison, and his mother Dae Cho, age 67, was sentenced to 18 months in prison. The Chos were also ordered to forfeit $371,439.21 and pay restitution of $1.4 million. Two more retailers were indicted in January 2014.United States Attorney Rod J. Rosenstein praised USDA’s Office of Inspector General and FBI for their work in the investigation. U.S. Attorney Rosenstein expressed appreciation to Secretary Ted Dallas and the Maryland Department of Human Resources, as well as U.S. Citizenship and Immigration Services - Office of Fraud Detection and National Security for their assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Kathleen O. Gavin, who prosecuted the case.
Pittsburgh Woman Admits Purchasing Gun for Convicted FelonRead the Press Release
PITTSBURGH - A Pittsburgh resident pleaded guilty yesterday in federal court to a charge of violating federal firearm laws, United States Attorney David J. Hickton announced today.
Asia M. Harris, 34, pleaded guilty to one count before Senior United States District Judge Gustave Diamond.
In connection with the guilty plea, the court was advised that on Aug. 16, 2011, Harris purchased a Springfield XDM-40 .40 caliber pistol from a Pittsburgh-area sporting goods store. On Oct. 16, 2013, Allegheny County Police officers executing a search warrant in Pittsburgh found the loaded gun on the bed in the master bedroom shared by Harris and Mark A. Brazil. Brazil was a convicted felon who, under federal law, could not lawfully possess a firearm. In a later interview with agents of the FBI, Harris advised that Brazil had asked her to purchase the firearm for him because he was a convicted felon and could not buy it himself. Harris stated that Brazil gave her $800 to buy the gun and told her which gun to buy. Harris advised that she considered the firearm as belonging to Brazil and knew what she did was wrong.
Judge Diamond scheduled sentencing for Oct. 11, 2014, 2014 at 11 a.m. The law provides for a total sentence of not more than 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Harris on bond.
Assistant United States Attorney Margaret E. Picking is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Allegheny County Police, with the assistance of the Pittsburgh Police, conducted the investigation that led to the prosecution of Harris.
Petersburg Man Pleads Guilty in Federal Court to Distribution, Receipt, and Possession of Child PornographyRead the Press Release
Anchorage, Alaska-United States Attorney Karen L. Loeffler announced today that Tye Leif Petersen, 46, a resident of Petersburg, Alaska, pled guilty in federal court to distribution, receipt, and possession of child pornography.
According to the facts presented in court by Assistant U.S. Attorney Jack S. Schmidt, on July 29, 2013, the Federal Bureau of Investigation in Juneau received information from a related federal investigation in the Eastern District of Tennessee investigating the distribution, receipt, and possession of child pornography. The investigation identified an email account belonging to defendant Tye Leif Petersen. This email account contained six videos of child pornography. The Internet Protocol (IP) address indicated that Petersen lived in Petersburg, Alaska, and had used this account to access child pornography. Further investigation revealed that Petersen received and possessed 22 videos and 291 photos of child pornography from an individual in the Eastern District of Tennessee. A search warrant was obtained for Petersen’s home where FBI agents recovered 11 CD-ROM’s, five thumb drives, three detached hard drives, and one Apple Desktop computer which all contained images of child pornography and contained an additional 37 videos of child pornography. Petersen identified an additional email account that showed activity of Petersen’s distribution of child pornography.
Judge Timothy M. Burgess, who took Petersen’s plea, scheduled sentencing for November 11, 2014, at 11:00 a.m. The law provides for a mandatory minimum sentence of five years on the distribution and receipt charges, and each charge carries a maximum sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense(s) and the criminal history, if any, of the defendant.
Ms. Loeffler commends the agents of the Federal Bureau of Investigation who conducted the investigation that led to the prosecution of Petersen.
Petaluma Couple Indicted for Conspiracy to Defraud the United StatesRead the Press Release
SAN FRANCISCO – Yesterday, a federal grand jury indicted Lara A. Karakasevic, AKA Lara Castle, and James C. Castle, AKA Chis Castle, with Conspiracy to Defraud the United States, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
According to the Indictment, Karakasevic, 44, and her spouse, Castle, 49, both individually and doing business as TTF Consulting, LLC, are alleged to have prepared six false and fraudulent Forms 1099-OID that were used to file five false and fraudulent tax returns seeking refunds ranging from $83,948 to $537,884. Karakasevic was also indicted for filing a false 2005 Amended U.S. Individual Income Tax Return.
An Indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face a maximum sentence of five years prison time, and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Cynthia Stier is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Ed Solis and IRS Special Agent James Quinn. The prosecution is the result of a four year investigation by the IRS.
(Karakasevic indictment )
Pennsylvania Pharmaceutical Wholesaler Value Drug, Inc. to Pay $4,000,000 in SettlementRead the Press Release
Settles Claims that Value Drug Failed to Report Suspicious Orders of Oxycodone to Pharmacies in Maryland and Pennsylvania
Baltimore, Maryland – Value Drug, Inc. (Value Drug) has agreed to pay $4,000,000 to the United States to resolve allegations that it violated the Controlled Substances Act (CSA) by failing to report suspicious orders of oxycodone to six pharmacies located in Maryland and Pennsylvania. Value Drug is a wholesale purchasing and distribution cooperative located in Altoona, Pennsylvania, that distributes pharmaceuticals, including controlled substances, to approximately 600 independent pharmacies located in Maryland, Pennsylvania and Ohio.The settlement agreement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division.
“Pharmacy wholesalers and retailers that fill unusually large or frequent orders for controlled substances without notifying the DEA violate the law and are subject to penalties,” said U.S. Attorney for the District of Maryland Rod J. Rosenstein. “Abuse of pharmaceutical drugs is one of the top federal law enforcement priorities.”
“DEA is responsible for ensuring that all controlled substance transactions take place within DEA regulatory closed system. All legitimate handlers of controlled substances must maintain strict accounting for all distributions and Value Drug failed to adhere to this policy,” stated Special Agent-in-Charge Karl C. Colder of the Drug Enforcement Administration’s Washington Division. “Oxycodone is a very addictive drug and failure to report suspicious orders of oxycodone is a serious matter. The civil penalty levied against Value Drug should send a strong message that all handlers of controlled substances must perform due diligence to ensure the public safety,” stated Colder.
The CSA requires distributors of pharmaceuticals, such as Value Drug, to identify and report suspicious orders of controlled substances, such as orders of unusual size, unusual frequency or those that substantially deviate from a normal pattern. The settlement resolves allegations that from January 1, 2009 through September 12, 2012, Value Drug failed to report suspicious orders of oxycodone to six pharmacy customers, including: Russo’s Pharmacy in Hagerstown, Maryland; Zonetak Pharmacy in Owings Mills, Maryland; Philly Pharmacy- Chestnut Avenue and Philly Pharmacy- Roosevelt Boulevard both located in Philadelphia, Pennsylvania; and East Hills Pharmacy and Johnstown Pharmacy, both in Johnstown, Pennsylvania.
As part of the settlement, Value Drug will also enter into a Memorandum of Agreement (MOA) with the DEA. The MOA will resolve administrative claims that the DEA has against Value Drug and will require that Value Drug implement more effective systems and measures to detect and report suspicious orders of controlled substances. The MOA will remain in place for a period of three years.
U.S. Attorney Rod J. Rosenstein commended the DEA’s Office of Diversion Control for its work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Thomas F. Corcoran, who handled the case.Omaha Woman Sentenced to 70 Months Imprisonment for her Role in a Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that Andrea McCord of Omaha was sentenced on June 23, 2014, to 70 months in prison by Chief United States District Judge Laurie Smith Camp. McCord had previously pled guilty for her involvement in a conspiracy to distribute more than one pound of methamphetamine.
On October 9, 2012, the Omaha Police Department executed a search warrant on Andrea McCord’s Omaha residence after she twice sold amounts of methamphetamine to a cooperating witness working with law enforcement. Inside the residence officer located approximately 546 grams of methamphetamine, drug scales, drug records, and drug packaging materials.
This case was the result of an investigation by the Omaha Police Department.
Omaha Woman Sentenced for Social Security Fraud and Theft of U.S. Government Money and PropertyRead the Press Release
United States Attorney Deborah R. Gilg announced that on June 19, 2014, United States District Court Judge Joseph F. Bataillon sentenced Shawna Faith Rene Stokes of Omaha, Nebraska, age 35, to 12 months and 1 day imprisonment, following her conviction for Social Security Fraud and Theft of U.S. Government Money and Property. Ms. Stokes was also ordered to serve a three year term of supervised release after serving her prison term and ordered to pay a $100 special assessment. She was also ordered to make restitution in the amount of $38,989.00.
During the period of March, 2010, through May, 2012, Ms. Stokes received approximately $38,989.00 in Social Security Administration and Nebraska Department of Health and Human Services Supplemental Nutrition Assistance Program benefits which were to be used for care and support of her minor children. However, Ms. Stokes was not using the benefits for the children’s care and support, but rather used the benefits for personal and unauthorized purposes.
This case was investigated by the Social Security Administration, Office of Inspector General.
Norwalk CA Man Sentenced to 292 Months for Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that ALEJANDRO DIEGO GARCIA, age 36, of Norwalk, California was sentenced to 292 months imprisonment, followed by 5 years of supervised release for Possession with Intent to Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(A)(viii) and Title 18, United States Code, Section 2.
Charges arose from an investigation by the Oklahoma Highway Patrol and the Drug Enforcement Administration. The defendant was indicted in August, 2013 and pled guilty in November, 2013.
The Indictment alleged that on or about July 15, 2013 in the Eastern District of Oklahoma and elsewhere, ALEJANDRO DIEGO GARCIA, did unlawfully, knowingly and intentionally possess with the intent to distribute in excess of Five-Hundred (500) grams of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Edward Snow represented the United States.
Nine Individuals Indicted for Conspiracy to Commit Mail Fraud, Wire Fraud, and Money LaunderingRead the Press Release
GREENEVILLE, Tenn. — On June 10, 2014, a federal grand jury in Greeneville returned a 49-count indictment against Brian C. Rose, a.k.a. John Hankins, 34, of Johnson City, Tenn.; Robert S. McGregor, a.k.a. Jim Robinson III, 36, of Bowling Green, Ky.; Dallas P. McRae, 44, of Orlando, Fla.; Hugh F. Sackett, 83, of Anderson, S.C.; James M. Robinson, 55, of Perkin, Ind.; Brent Loveall, 30, of Johnson City, Tenn.; Jason Smith, 39, of Bowling Green, Ky.; Ray C. Spears, a.k.a. Brock Hamilton, 44, of Johnson City, Tenn.; and Jennifer L. Key, 36, of Louisville, Ky., for a conspiracy to commit mail fraud and wire fraud and money laundering. In addition Rose, McGregor, McRae, Sackett, Robinson, Loveall, Spears, and Key were all charged with substantive mail and/or wire fraud charges.
Five of these individuals appeared in court for initial appearance and arraignment during June 16-19, 2014, before U.S. Magistrate Judge Dennis H. Inman and pleaded not guilty to the charges in the indictment. Three of these individuals will appear in Court on June 30, 2014, for initial appearance and arraignment before Magistrate Judge Inman.
Brian C. Rose appeared in court on June 23, 2014, for a detention hearing before U.S. Magistrate Judge C. Clifford Shirley. Rose was detained pending trial.
The details of the charges are outlined in the indictment, which is filed as public record in the U.S. District Court for the Eastern District of Tennessee at Greeneville. The investigation showed that Rose established an office for New Century Coal in Johnson City, Tenn., and staffed the office with McGregor, McCrae, Sackett, Robinson, Loveall, Smith, Spears, and Key who all targeted potential investor victims, using false and fraudulent representations to solicit sales of shares in New Century Coal and received funds exceeding $15 million from more than 160 investors who reside in multiple locations in the United States.
If convicted, all face a maximum term of 20 years in prison and a maximum fine of $250,000.00, a term of supervised release of at least three years. All also face mandatory court assessments and restitution as ordered by the court.
This indictment is the result of investigation by the United States Secret Service, Internal Revenue Service Criminal Investigations Division, and Federal Bureau of Investigation. Assistant U.S. Attorney Helen C.T. Smith will represent the United States.
Members of the public are reminded that these are only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Nenahnezad, N.M., Man Pleads Guilty to Federal Arson ChargeRead the Press Release
ALBUQUERQUE – Gregory Bitsilly, 28, an enrolled member of the Navajo Nation who resides in Nenahnezad, N.M., pleaded guilty this morning to an indictment charging him with arson under a plea agreement with the U.S. Attorney’s Office.
Bitsilly was arrested in March 2014, on a criminal complaint charging him with arson. He was indicted on that same charge in April 2014. According to court filings, Bitsilly set fire to the residence he shared with his wife and children on March 24, 2014, because his wife was attempting to leave him for being physically abusive. The residence and its contents were a total loss.
During today’s proceedings, Bitsilly admitted willfully and maliciously setting fire to the home he resided in with his wife and children on March 24, 2014.
Under the terms of his plea agreement, Bitsilly will be sentenced to a federal prison term within the range of 24 to 40 months followed by a term of supervised release to be determined by the court. Bitsilly has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and the Shiprock Division of the Navajo Nation Division of Public Safety and is being prosecuted by Special Assistant U.S. Attorney David Adams. It was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Nation’s Largest Nursing Home Pharmacy Company to Pay $124 Million to Settle Allegations Involving False Billings to Federal Health Care ProgramsRead the Press Release
Omnicare Inc., the nation’s largest provider of pharmaceuticals and pharmacy services to nursing homes, has agreed to pay $124.24 million for allegedly offering improper financial incentives to skilled nursing facilities in return for their continued selection of Omnicare to supply drugs to elderly Medicare and Medicaid beneficiaries, the Justice Department announced today . Omnicare is headquartered in Cincinnati, Ohio.
“Health care providers who seek to profit from providing illegal financial benefits will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Schemes such as this one undermine the health care system and take advantage of elderly nursing home residents.”
“Omnicare provided improper discounts in return for the opportunity to provide medication to Medicare and Medicaid beneficiaries,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “Nursing homes should select their pharmacy provider based on the best quality, service and cost to the residents, not based on improper discounts to the nursing facility.”
The settlement resolves allegations that Omnicare submitted false claims by entering into below-cost contracts to supply prescription medication and other pharmaceutical drugs to skilled nursing facilities and their resident patients to induce the facilities to select Omnicare as their pharmacy provider. The facilities were participating providers under agreements with Medicare and Medicaid. In addition to the facilities’ own claims for reimbursement from Medicare for short-term rehabilitation treatment rendered to patients, Omnicare submitted additional claims for reimbursement to Medicare and Medicaid for drugs Omnicare supplied. Of the $124.24 million to be paid by Omnicare, $8.24 million will go to various states which jointly funded the Medicaid programs impacted by Omnicare’s conduct.
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. The Anti-Kickback Statute is intended to ensure that the selection of health care providers and suppliers is not compromised by improper financial incentives and is instead based on the best interests of the patient.
The settlement resolves allegations brought in two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The first whistleblower, Donald Gale, a former Omnicare employee, will receive $ 17.24 million.
The settlement with Omnicare was the result of a coordinated effort by the U.S. Attorney’s Office for the Northern District of Ohio, the Commercial Litigation Branch of the Justice Department’s Civil Division, the Department of Health and Human Services Office of Inspector General, and the National Association of Medicaid Fraud Control Units.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.5 billion through False Claims Act cases, with more than $13.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.Mescalero Apache Man Pleads Guilty to Misdemeanor Assault ChargeRead the Press Release
ALBUQUERQUE – Julius Scott Mendez, 21, a member of the Mescalero Apache Nation who resides in Mescalero, N.M., pleaded guilty this morning to a misdemeanor information charging him with assault. The guilty plea was entered without the benefit of a plea agreement.
Mendez was arrested on Oct. 10, 2013, on a criminal complaint charging him with assault. According to court filings, Mendez assaulted the victim, another Mescalero Apache man in a location within the Mescalero Apache Reservation.
During today’s plea hearing, Mendez admitted to assaulting the victim in the early morning hours of Oct. 10, 2013, by kicking the victim in the face and chest. Mendez also acknowledged that, at the time of the assault, the victim was lying on the ground and unable to defend himself.
Mendez faces a maximum penalty of a year in prison when he is sentenced. His sentencing hearing has yet to be scheduled. Mendez was remanded into custody following entry of his guilty plea and will be held pending a detention hearing scheduled for June 30, 2014.
This case was investigated by the Mescalero Agency of the BIA’s Office of Justice Services and is being prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office.
Member of the Granados-Hernandez Sex Trafficking Organization, Antonio Lira-Robles, Sentenced to 188 Months in PrisonRead the Press Release
Earlier today, Antonio Lira-Robles was sentenced before Judge Kiyo A. Matsumoto in U.S. District Court in Brooklyn, New York, to 188 months’ imprisonment, to be followed by five years of supervised release, for the sex trafficking of one victim and restitution in the amount of approximately $1.2 million dollars.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.
“This defendant is the final defendant to be sentenced in this case, which sought to end the Granados-Herndandez’s long standing family business of preying on young women and luring them to the United States, only to be forced into the violent world of prostitution,” stated United States Attorney Lynch. “Although no prosecution can remedy the egregious harms that the victims of sex trafficking suffer, we sincerely hope that this prosecution brought some closure to the many victims of the Granados-Hernandez organization.” Ms. Lynch extended her grateful appreciation to the organizations that provided services and advocacy to the victims in this case, including Sanctuary for Families and the law firm of Simpson, Thacher and Bartlett, LLP.
On December 19, 2013, Lira-Robles pled guilty to one count of a superseding indictment, which charged that between October 2000 and April 2011, he smuggled a victim from Mexico illegally into the United States and forced her to engage in prostitution. Over approximately ten years, Lira-Robles was a member of the Granados-Hernandez sex trafficking organization (the “Organization”). As part of the trafficking scheme engaged in by the Organization, Lira-Robles and his co-conspirators started romantic relationships with females in Mexico and then lured them to the United States with the false promise of a better life. Each of these victims was transported by a member of the Organization, with the intent that they would engage in prostitution. Once in the United States, the Organization forced victims into prostitution by threats, coercion, and violence. For each of the victims, the Organization kept all of the proceeds from the prostitution.
Lira-Robles was responsible for the sex trafficking of Jane Doe #1 and the recruitment of Jane Doe #4. Lira-Robles conduct towards both of these victims shows the same pattern of criminal conduct and abuse. In 1999, Lira-Robles recruited Jane Doe #1 in Tenancingo, Mexico, soon began a relationship with her and moved her into his parents’ home. Shortly thereafter, Jane Doe #1 became pregnant and Lira-Robles forced her to abort the child. Lira-Robles then forced Jane Doe #1, through threats and physical violence, to begin prostituting in Mexico City. In June 2000, Lira-Robles and Jane Doe #1 travelled to Queens, New York. Upon their arrival, Jane Doe #1 stated that she did not want to work as a prostitute to which Lira-Robles responded by physically assaulting her. As a result of the defendant’s violence towards her, Jane Doe #1 worked for Lira-Robles in New York and Boston from 2001 to 2010 and gave all the prostitution proceeds to him.
During the same time period as his involvement with Jane Doe #1, Lira-Robles recruited Jane Doe #4. Similar to his relationship with Jane Doe #1, Lira-Robles began a romantic relationship with Jane Doe #4 and suggested they travel to the United States. Upon their arrival to here, Lira-Robles told Jane Doe #4 that in order to pay off the smuggling debt she had to work as a prostitute. Jane Doe #4 worked for Lira-Robles from approximately 2004 until 2010.
At the sentencing, Jane Doe #1 stated that, “I was a victim of sex trafficking and forced into prostitution because of Antonio [Lira Robles].” Jane Doe #1 described in detail the extreme abuse she suffered under the control of Lira-Robles, stating that “He did not treat me like a human being. He treated me like a sexual robot.” Jane Doe #1 further stated: “For years I cried in silence. I carried the scars of Antonio’s abuse every day, but I can no longer be silent. I am here today so Antonio and his family will no longer be able to force another woman into prostitution.”
Lira-Robles’ cousins, Samuel Granados-Hernandez, Eleuterio Granados-Hernandez and Angel Cortez-Granados, also smuggled young women from Mexico illegally into the United States, forced them to work as prostitutes in New York City and elsewhere, and collected profits from their activities. Each of the three defendants pleaded guilty to sex trafficking. In September 2013, Cortez-Granados was sentenced to 15 years in prison, in a separate case. In March 2014, Eleuterio Granados-Hernandez was sentenced to 22 years in prison for the sex trafficking of five victims. In May 2014, Samuel Granados was sentenced to 15 years for the sex trafficking of three victims.
The government’s case was prosecuted by Assistant United States Attorney Soumya Dayananda.
The Defendant:
ANTONIO LIRA-ROBLES
Age: 38
Mexico
E.D.N.Y. Docket No. CR-11-297 (S-5) (KAM)
Member of Russian Organized Crime Group Sentenced in Manhattan Federal Court to 20 Years in Prison for Ordering Murder of Two IndividualsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that BORIS LISYANSKY was sentenced today to 20 years in prison for his role in hiring a hitman to kill two Queens businessmen, which resulted in a non-fatal shooting in May 2010. LISYANSKY was convicted of one count of murder for hire and one count of conspiracy to commit murder for hire on April 29, 2013, after a six-day trial before Judge George B. Daniels in Manhattan federal court.
Manhattan U.S. Attorney Preet Bharara stated: “Boris Lisyansky ordered the cold-blooded murder of two innocent men. Thankfully, his intended victims survived the attempt. Today’s sentence makes clear that even when you send others to do your dirty work, you will be found and held accountable for your crimes.”
According to the Indictment filed in Manhattan federal court and the evidence at trial and sentencing:
In May 2010, LISYANSKY hired an associate, Jesus Rosa, to kill the father and son owners of a catering hall (the “Catering Hall”) in Queens. Torrance Crayton, a/k/a “King Blood,” another associate of LISYANSKY’s, provided Rosa with a gun to use in the murders. LISYANSKY arranged a meeting with the intended victims at their Catering Hall under the ruse that LISYANSKY was considering booking the Catering Hall for his wedding. LISYANSKY met with the victims in the Catering Hall on a weekday during normal business hours. Acting at LISYANSKY’s direction, Rosa entered the Catering Hall during that meeting and brandished his firearm. LISYANSKY, pretending to be a victim, covertly signaled to Rosa the two intended victims of the murder. Rosa pointed the gun at the head of one of the two victims, but decided he could not go through with the murder and instead shot the victim in the leg, and fled the Catering Hall. Rosa jumped into a waiting getaway car driven by Jayson Vasquez-Soto. Vasquez-Soto and Rosa drove back to LISYANSKY’s apartment where they proceeded, at the direction of LISYANSKY, to destroy evidence from the murder plot, including wiping the car down to destroy fingerprint evidence. The police arrived at the Catering Hall soon after the shooting and LISYANSKY, still posing as a victim of the hold-up, gave false details about the shooter to the police.
In addition to the prison term, Judge Daniels sentenced LISYANSKY, 39, of Queens, New York, to three years of supervised release and ordered him to pay a special assessment of $200.
Mr. Bharara praised the outstanding efforts of the Federal Bureau of Investigation and the New York City Police Department in connection with this investigation.
A number of co-conspirators and accomplices were also prosecuted in connection with this case. Jesus Rosa pleaded guilty to murder for hire, conspiracy to commit murder for hire, and other offenses, and is awaiting sentencing. Torrance Crayton, a/k/a “King Blood,” pleaded guilty to firearms possession and was sentenced by United States District Judge Richard Sullivan to 5 years in prison. Jayson Vazquez-Soto was convicted at trial of obstruction of justice and sentenced by United States District Judge George B. Daniels to 24 months in prison.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Alexander Wilson and Harris Fischman are in charge of the prosecution.
Member of Russian Organized Crime Group Sentenced in Manhattan Federal Court to 20 Years in Prison for Ordering Murder of Two IndividualsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that BORIS LISYANKSY was sentenced today to 20 years in prison for his role in hiring a hitman to kill two Queens businessmen, which resulted in a non-fatal shooting in May 2010. LISYANKSY was convicted of one count of murder for hire and one count of conspiracy to commit murder for hire on April 29, 2013, after a six-day trial before Judge George B. Daniels in Manhattan federal court.
Manhattan U.S. Attorney Preet Bharara stated: “Boris Lisyansky ordered the cold-blooded murder of two innocent men. Thankfully, his intended victims survived the attempt. Today’s sentence makes clear that even when you send others to do your dirty work, you will be found and held accountable for your crimes.”
According to the Indictment filed in Manhattan federal court and the evidence at trial and sentencing:
In May 2010, LISYANKSY hired an associate, Jesus Rosa, to kill the father and son owners of a catering hall (the “Catering Hall”) in Queens. Torrance Crayton, a/k/a “King Blood,” another associate of LISYANKSY’s, provided Rosa with a gun to use in the murders. LISYANKSY arranged a meeting with the intended victims at their Catering Hall under the ruse that LISYANKSY was considering booking the Catering Hall for his wedding. LISYANKSY met with the victims in the Catering Hall on a weekday during normal business hours. Acting at LISYANKSY’s direction, Rosa entered the Catering Hall during that meeting and brandished his firearm. LISYANKSY, pretending to be a victim, covertly signaled to Rosa the two intended victims of the murder. Rosa pointed the gun at the head of one of the two victims, but decided he could not go through with the murder and instead shot the victim in the leg, and fled the Catering Hall. Rosa jumped into a waiting getaway car driven by Jayson Vasquez-Soto. Vasquez-Soto and Rosa drove back to LISYANKSY’s apartment where they proceeded, at the direction of LISYANKSY, to destroy evidence from the murder plot, including wiping the car down to destroy fingerprint evidence. The police arrived at the Catering Hall soon after the shooting and LISYANKSY, still posing as a victim of the hold-up, gave false details about the shooter to the police.
In addition to the prison term, Judge Daniels sentenced LISYANSKY, 39, of Queens, New York, to three years of supervised release and ordered him to pay a special assessment of $200.
Mr. Bharara praised the outstanding efforts of the Federal Bureau of Investigation and the New York City Police Department in connection with this investigation.
A number of co-conspirators and accomplices were also prosecuted in connection with this case. Jesus Rosa pleaded guilty to murder for hire, conspiracy to commit murder for hire, and other offenses, and is awaiting sentencing. Torrance Crayton, a/k/a “King Blood,” pleaded guilty to firearms possession and was sentenced by United States District Judge Richard Sullivan to 5 years in prison. Jayson Vazquez-Soto was convicted at trial of obstruction of justice and sentenced by United States District Judge George B. Daniels to 24 months in prison.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Alexander Wilson and Harris Fischman are in charge of the prosecution.
Mattapoisett Woman Sentenced for Embezzling from Middleboro BusinessesRead the Press Release
BOSTON – A Mattapoisett woman was sentenced today to a year in prison for stealing nearly $320,000 from two Middleboro businesses.
Marie Greany, 43, was sentenced by U.S. District Judge Rya W. Zobel to one year and one day in prison, three years of supervised release, and ordered to pay $74,000 in restitution which is the balance of the stolen funds that Greany has yet to repay. In March 2014, Greany pleaded guilty to wire fraud.
Greany worked as a bookkeeper for two computer systems design and consulting businesses in Middleboro. Between 2006 and 2012, she stole nearly $320,000 from the two companies. Among other things, Greany used a company credit card to make unauthorized charges for personal expenses, including travel, tickets to sporting events and theater productions, restaurant meals and tuition, as well as the costs of operating her photography business. She then paid those charges with corporate funds from both companies. Greany also transferred money from the businesses’ bank accounts to pay her personal credit card bills. Additionally, Greany had the payroll processing company for the victim companies issue payments to her as reimbursement for expenses, which had actually been incurred by other employees, as well as increased salary payments for herself. She also wrote two unauthorized checks on a company account which she used for her own purposes.
United States Attorney Carmen M. Ortiz and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Sandra S. Bower of Ortiz’s Economic Crimes Unit.
Maryland Man Sentenced to Prison on Drug ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Maryland man was sentenced yesterday, in federal court in Scranton, by United States District Judge Malachy Mannion, to serve 160 months in prison on a charge of conspiracy to distribute heroin.
According to United States Attorney Peter Smith, Michael Murray, age 36, a resident of Maryland pleaded guilty to the conspiracy charge in Novemberof 2013.
Murray was charged after an investigation conducted by the United States Drug Enforcement Administration, the Pennsylvania State Police and the Wilkes-Barre Police Department. An Indictment was filed against Murray and nine other persons on May 21, 2013. The charges against Murray arose from his involvement in heroin trafficking. Murray was sentenced as a career offender under the United States Sentencing Commission Sentencing Guidelines.
In addition to the prison term, Judge Mannion ordered that Murray be supervised by a probation officer for 4 years following his release from prison.
The case was prosecuted by Assistant United States Attorney William S. Houser.
Manhattan U.S. Attorney Announces Charges Against Purported Investment AdviserRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that STEVEN WESSEL, a/k/a “Wes Wessels,” was arrested this morning on securities fraud and wire fraud charges. WESSEL is expected to be presented today in Manhattan federal court before United States Magistrate Judge Michael H. Dolinger.
Manhattan U.S. Attorney Preet Bharara said: “As charged, Steven Wessel was much less an investment adviser than a serial liar. He allegedly lied in telling one investor that his funds would be invested in securities, and then lied in soliciting money from a second investor to pay back the first.”
According to the two-count Complaint unsealed in Manhattan federal court:
From at least June 2013 through April 2014, WESSEL ran a fraudulent investment scheme. WESSEL, who claimed to be the Chairman and Executive Managing Member of Steeplechase USA, LLC (“Steeplechase USA”), located in New York, New York, represented to an investor (“Investor A”) that Steeplechase USA was in the business of trading securities. WESSEL personally solicited $200,000 from Investor A on the understanding that the funds would be solely invested in securities.
Contrary to WESSEL’s promise to invest Investor A’s funds in securities, WESSEL used substantially all of Investor A’s money for his own personal benefit, including for cash withdrawals and personal expenses, including making a payment of $25,000 toward a restitution obligation from a prior judgment of conviction. WESSEL did not tell Investor A about this misappropriation. Instead, WESSEL falsely represented to Investor A that his $200,000 investment had gained tens of thousands of dollars and that Steeplechase USA’s portfolio had gained approximately 167% in 2013.
When Investor A requested to withdraw his funds from Steeplechase USA, WESSEL solicited a $550,000 loan from a second investor (“Investor B”). WESSEL falsely represented that he would use Investor B’s money to provide financing for a commercial real estate project. To induce Investor B to lend him money, WESSEL, among other things, created and sent a fabricated email to Investor B. The fabricated email purported to be from a bank and made it appear as if the real estate project was legitimate.
Contrary to WESSEL’s promise to Investor B, WESSEL used substantially all of Investor B’s money for his own benefit, including to pay $251,000 to Investor A – money that, according to WESSEL, represented Investor A’s initial $200,000 investment and $51,000 in trading profits.
WESSEL is charged with one count of securities fraud and one count of wire fraud. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Bharara praised the work of the Criminal Investigators of the United States Attorney’s Office, who investigated this case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Damian Williams is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Steven Wessel Complaint
Man Charged with Robbing Sovereign BankRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced today the filing a bank robbery charge against Tashan Lantiqua Layton, age 24, of Harrisburg, Pennsylvania.
According to U.S. Attorney Peter Smith, on March 30, 2013, Layton entered the Sovereign Bank branch located at 519 South 29th Street, Harrisburg, Pennsylvania, and brandishing a gun robbed the bank of approximately $18,682.00.
If convicted, Layton faces a term of imprisonment of up to twenty years and a fine of up to $250,000.
The investigation was conducted by the Harrisburg Police Department and the FBI. It is being prosecuted by Assistant United States Attorney Joseph J. Terz.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Man Admits Defrauding Fema After Massachusetts Tornado in 2011Read the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that ROBBIE ROSSI, 42, formerly of Massachusetts, pleaded guilty yesterday before U.S. Magistrate Judge Donna F. Martinez in Hartford to one count of mail fraud arising from a scheme to fraudulently obtain disaster relief funds from the Federal Emergency Management Agency (FEMA).
According to court documents and statements made in court, a severe storm and tornado outbreak struck central Massachusetts on June 1, 2011. After a Presidential Declaration authorized FEMA to provide disaster relief funds to local residents, ROSSI obtained more than $12,000 in disaster relief benefits by falsely representing that he lived at a residence on New Bridge Street in West Springfield, Mass., that had been damaged by the storm. As part of the scheme, ROSSI provided FEMA with false documentation of rent payments he claimed to have paid in the months following the storm. Between August 2011 and April 2013, ROSSI received payments at various addresses that he supplied to FEMA, including a residence in Enfield, Conn.
ROSSI is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on September 18, 2014, at which time he faces a maximum term of imprisonment of 30 years. ROSSI also has agreed to pay restitution in the amount of $12,718.60.
ROSSI has been detained since his arrest in Las Vegas on January 14, 2014.
This case was investigated by the Office of the Inspector General of the U.S. Department of Homeland Security with the assistance of the Las Vegas office of the U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorney David J. Sheldon.
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Tom Carson
(203) 821-3722 [email protected]Local Tattoo Artist Convicted of Federal Firearms ChargeRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury today found Anthony Lee Erity (33, Kenneth City) guilty of possession of a firearm and ammunition by a convicted felon. Erity faces a maximum penalty of 10 years in federal prison. His sentencing hearing is scheduled for September 18, 2014, before U.S. District Judge Virginia M. Hernandez Covington. Erity was indicted on November 21, 2013.
According to testimony and evidence presented at trial, on July 11, 2013, during an undercover operation at a local tattoo shop in Pinellas County, Erity sold a firearm and ammunition out of his car to a confidential informant. Erity had previously been convicted of a felony, and was therefore prohibited from possessing firearms or ammunition under federal law. Both the firearm and ammunition were manufactured outside the State of Florida and therefore affected interstate commerce. As the trial date approached, Erity took steps to flee the country to avoid federal prosecution. Based on that conduct, Erity was ordered detained pending trial.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the St. Petersburg Police Department. It is being prosecuted by Assistant United States Attorneys Adam M. Saltzman and Simon A. Gaugush.
It is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Trevor Velinor, Acting Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is another example of ATF’s Frontline Strategy to impact violent crime within our communities.
Justice Department Settles with Omnicare, Inc. for $124 Million to Resolve False Claims AllegationsRead the Press Release
Omnicare, Inc., the nation’s largest provider of pharmaceuticals and pharmacy services to nursing homes, has agreed to pay $124.24 million for allegedly offering improper financial incentives to skilled nursing facilities in return for their continued selection of Omnicare to supply drugs to elderly Medicare and Medicaid beneficiaries, the Justice Department announced today. Omnicare is headquartered in Cincinnati, Ohio.
“We will not tolerate health care providers who use illegal discounts to get business from nursing homes,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Schemes such as this one undermine the health care system and take advantage of elderly nursing home residents.”
“Omnicare provided improper discounts in return for the opportunity to provide medication to Medicare and Medicaid beneficiaries,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “Nursing homes should select their pharmacy provider based on the best quality, service and cost to the residents, not based on improper discounts to the nursing facility.”
The settlement resolves allegations that Omnicare submitted false claims by entering into below-cost contracts to supply prescription medication and other pharmaceutical drugs to skilled nursing facilities and their resident patients to induce the facilities to select Omnicare as their pharmacy provider. The facilities were participating providers under agreements with Medicare and Medicaid. In addition to the facilities’ own claims for reimbursement from Medicare for short-term rehabilitation treatment rendered to patients, Omnicare submitted additional claims for reimbursement to Medicare and Medicaid for drugs Omnicare supplied. Of the $124.24 million to be paid by Omnicare, $8.24 million will go to various states which jointly funded the Medicaid programs impacted by Omnicare’s conduct.
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. The Anti-Kickback Statute is intended to ensure that the selection of health care providers and suppliers is not compromised by improper financial incentives and is instead based on the best interests of the patient.
The settlement resolves allegations brought in two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The first whistleblower, Donald Gale, a former Omnicare employee, will receive $17.24 million.
The settlement with Omnicare was the result of a coordinated effort by the U.S. Attorney’s Office for the Northern District of Ohio, the Commercial Litigation Branch of the Justice Department’s Civil Division, the Department of Health and Human Services Office of Inspector General, and the National Association of Medicaid Fraud Control Units.
The government’s settlement of these allegations illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.9 billion through False Claims Act cases, with more than $13.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Judge Sends Former Philadelphia Police Officer to Prison for 15 Years for Obstructing A Federal Drug InvestigationRead the Press Release
PHILADELPHIA – Rafael Cordero, 53, of Philadelphia, was sentenced today to 180 months in prison for interfering with the federal drug investigation of the Christian Serrano/Edwin Medina Drug Trafficking Organizations (“DTOs”). Cordero, who at the time was a 23-year veteran of the Philadelphia Police Department, provided sensitive law enforcement information about drug investigations to his half-brother, David Garcia, a member of the Serrano/Medina DTOs. Cordero was convicted on December 3, 2013.
Cordero told his half-brother about a surveillance camera put up by the DEA to monitor activities occurring at a garage, located at 538 East Indiana Street in Philadelphia, used by the Medina DTO. When the FBI and DEA executed search warrants at several locations associated with the Serrano/Medina DTOs, including the garage, Cordero, after being informed about the searches by his half-brother and without having any official reason to do so, went to the search location on East Indiana Street and began looking in the windows of the garage. When confronted by law enforcement and brought inside the location, Cordero misrepresented his reason for being at the location and offered to assist with the search. At no time did Cordero provide his name to law enforcement.
Immediately after leaving the search location, Cordero placed a call to David Garcia and shared with him, among other things, how many law enforcement officers were conducting the search and what areas of the garage they were searching. Garcia removed a DVR tape that law enforcement had inadvertently failed to seize during the search and viewed it to see if Cordero was recorded at the garage at the time of the search, which he was. At no time did Cordero inform law enforcement that David Garcia had possession of the video tape.
When questioned by federal agents, Cordero denied giving information to Garcia regarding the surveillance camera, denied knowing of anyone associated with the Indiana Street garage and denied having spoken to David Garcia about the search at the garage.
In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered a $5,000 fine and three years of supervised release. The case was investigated by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Philadelphia Police Department. It was prosecuted by Assistant United States Attorneys Kevin Brenner and Maureen McCartney.
Indianapolis Man Pleads Guilty to Defrauding Investors in Ponzi Scheme Involving Fictitious Online Credit UnionRead the Press Release
ALEXANDRIA, Va. – Timothy J. Coughlin, 63, of Indianapolis, Indiana, pleaded guilty today to committing wire fraud and impersonating an Internal Revenue Service official while operating the Oxford International Credit Union (OICU), which Coughlin used to solicit online investments.
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; Andrew Ceresney, Director, Division of Enforcement, U.S. Securities and Exchange Commission (SEC); and J. Russell George, Treasury Inspector General for Tax Administration (TIGTA), made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema.According to a statement of facts filed with the plea agreement, from around 2006 through March 2014, Coughlin operated OICU and anotheronline investment vehicle known as the Oxford International Cooperative Union. Investors paid annual dues to participate in the Oxford entities and made investments in OICU through online payment processors. As part of the scheme, Coughlin created a website through which he posted false information to investors’ online accounts indicating that their deposits were earning significant daily returns, which averaged 0.471% each trading day from January 2007 through December 2009 (equivalent to a 356% approximate rate of return over that time period). To further the fraud, Coughlin posted a fake certificate stating that OICU was an insured credit union, and he also made audio recordings in which he falsely claimed that members were earning significant returns on their investments.
By the end of 2009, Coughlin had ceased approving requests for account withdrawals from investors, claiming that taxing authorities in the United States and Canada were freezing Oxford’s assets abroad. In January 2012, Coughlin falsely announced to investors that he had reached an agreement to resolve the tax issues, and he created a fictitious agreement on which he forged the signatures of an actual IRS employee in Washington, DC and a lawyer based in New York.
During the course of this fraudulent scheme, Coughlin received nearly $15 million from almost 5,000 people for investments and members’ annual dues. Before December 2009, Coughlin approved about $4.4 million in withdrawal requests by investors.
Coughlin faces a maximum penalty of 23 years in prison when he is sentenced on Sept. 26, 2014.This case was investigated by the FBI’s Washington Field Office, SEC, and TIGTA. Assistant U.S. Attorney Jack Hanly is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-221.Imperial Valley RV Storage Company Charged with Illegally Disposing over A Million Gallons of Raw SewageRead the Press Release
SAN DIEGO – United States Attorney Laura E. Duffy announced that Glamis Dunes Storage Inc. and its owner, Michael Mamelli, Sr. were arraigned today on charges that they injected and disposed of potentially millions of gallons of sewage underground at the Glamis Dunes Storage site, in violation of the Safe Drinking Water Act.
According to the indictment, in August of 2007, Glamis Dunes Storage obtained a conditional use permit from Imperial County to install and operate a 20,000 gallon holding tank for RV waste (including sewage and grey water) at the facility. At that time, Glamis Dunes Storage represented that the wastewater would be pumped out by a licensed septage hauler and disposed of at the Holtville wastewater treatment plant, and estimated that at full occupancy, they would dispose of approximately 1.25 million gallons of RV sewage and grey water at a wastewater treatment plant per year.
The indictment alleges that on December 16, 2009, a Cease and Desist Order was issued to Michael Mamelli of Glamis Dunes Storage by the Imperial County Department of Environmental Health Services, after it was discovered that Glamis Dunes Storage and Mamelli were illegally disposing of sewage from the RV holding tank by pumping out the sewage and discharging it into an underground septic tank on the site. The Cease and Desist Order required them to immediately cease the discharge of sewage to the underground septic tank, remove the underground septic tank and to retain the services of a registered hauler to pump out the RV holding tank and provide evidence of disposal at a wastewater treatment plant.
The indictment further alleges that between February 16, 2010, and March 12, 2010, the defendants had a contractor build a leach field in the rear of the property, place a pump in the RV holding tank, and connect a pipe directly from the RV holding tank out to the leach field, concealing the power connection for the pump under gravel near the RV holding tank. Thereafter, it is alleged that defendant Mamelli and other employees of Glamis Dunes Storage illegally disposed of the sewage in the RV holding tank by activating the pump and discharging the sewage through the underground leach field.
Between August and October of 2012, the defendants had a contractor add a new pump and two 2,500-gallon septic tanks in series to the pipe connecting the RV holding tank to the leach field, and continued to illegally dispose of the sewage in the RV holding tank by discharging the sewage through the underground septic tanks and leach field without a permit or other authorization from the EPA.
The Safe Drinking Water Act, Section 300h-2(b) of Title 42 of the United States Code, prohibits the willful violation of any requirement of an applicable underground injection program. The underground injection program applicable to Class V injection wells in the State of California is the national underground injection control program, which is administered by the Environmental Protection Agency.
Under the federal regulations, injection wells are regulated according to the classification that the well is given. Class V injection wells include septic system wells used to inject the waste or effluent from a multiple dwelling, business establishment, community or regional business establishment septic tank. The regulations prohibit any underground injection of fluids, except into a well permitted or otherwise authorized under this program. The construction of any well required to have a permit is prohibited until the permit has been issued.
The indictment also seeks criminal forfeiture of the sum of $125,000, alleged to be the proceeds of the offense.
Michael Mamelli and Glamis Durnes Storage, Inc. are scheduled to appear before U.S. District Court Judge William Q. Hayes on August 8, 2014, at 2:00 p.m. for a hearing on all motions.
DEFENDANT Case No.: 14-CR-1766-WQH Glamis Dunes Storgage, Inc. Incorporated: 2006 Glamis, California Michael J. Mamelli, Sr. Age: 63 Newport Beach, California CHARGESUnlawful Injection of Pollutants, a felony, in violation of Title 42, United States Code, Section 300h-2(b)(2); Maximum Penalty: Three years in custody, the greater of a $10,000 fine or twice the illegal gain or loss and a $100 penalty assessment
INVESTIGATING AGENCYEnvironmental Protection Agency, Criminal Investigations Division
Bureau of Land Management*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Illegal Alien Convicted of Purchasing False IDRead the Press Release
BOSTON – Former Peabody man found guilty of purchasing false identity documents and receiving unemployment benefits.
Following a three-day trial, Renato de la Cruz, 40, was convicted of theft of public money, use of a falsely obtained Social Security Number, and aggravated identity theft. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Oct. 14, 2014.
De la Cruz, an illegal alien, entered the United States using a false name and purchased identity documents in the name of yet another person. De la Cruz then used the purchased identifying information to obtain a Social Security Number and used the Social Security Number for multiple purposes, including to obtain thousands of dollars of unemployment benefits to which he was not entitled.
De la Cruz faces a maximum sentence of 10 years and a $250,000 fine.
United States Attorney Carmen M. Ortiz; Cheryl Garcia, Acting Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, NY Regional Office; Scott Antolik, Special Agent in Charge of the U.S. Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; Bruce M. Foucart, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Sean Gallagher, Field Office Director of U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations, New England Field Office; made the announcement today. The case was investigated by the Homeland Security Investigations Document and Benefit Fraud Task Force. The case is being prosecuted by Robert E. Richardson and Brian A. Pérez-Daple of Ortiz’s Major Crimes Unit.
Huntersville Physician Pleads Guilty to Health Care Fraud and Tax Fraud and Agrees to Pay $6.2 Million to Settle Civil Fraud ClaimsRead the Press Release
Former Owner Of Northcross Medical Center Hid $2.4 Million In Income Used To Build 8,000-Square Foot Home On Lake Norman
CHARLOTTE, N.C. – Mark Tuan Le, an internal medicine physician and former owner of Northcross Medical Center, pleaded guilty today to federal criminal charges in connection with a healthcare fraud scheme that billed health insurers for services that were not performed and for evading over $800,000 in taxes in 2009 and 2010, announced Anne M. Tompkins U.S. Attorney for the Western District of North Carolina.
Earlier this month, Le, 55 of Huntersville, N.C., also agreed to pay $6.2 million to the United States to settle civil fraud allegations that Le and his medical center defrauded Medicare and Medicaid by submitting claims for medically unnecessary diagnostic test and procedures. The $6.2 million settlement is the Western District’s largest ever against a single physician.
U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region; and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
In making today’s announcement U.S. Attorney Tompkins stated, “Dr. Le exploited his medical license to carry out a criminal scheme involving fraudulent billings for services that were not needed or not given. Then, Dr. Le took his criminal conduct a step further and covered up the additional income to avoid the tax liability. As this case shows, we will use all of the tools and resources in our disposal to prosecute fraud, including pursuing parallel criminal and civil proceedings.” U.S. Attorney Tompkins further urged anyone with information of instances involving fraudulent medical billing or other practices involving health care fraud to report them to law enforcement.
“Illegal schemes like this one waste tax dollars and divert funds that are supposed to go toward needed medical care. Our investigators and attorneys will continue to work closely with federal officials to fight health care fraud and recover the public’s money,” said North Carolina Attorney General Roy Cooper.
“Le cheated Americans twice. First by settling health fraud charges to the tune of $6.2 million, and then through $800,000 in tax evasion, said Derrick L. Jackson, Special Agent in Charge for Office of Inspector General of the U.S. Department of Health and Human Services Atlanta region including North Carolina. “Working shoulder to shoulder with our law enforcement partners, we will pursue and prosecute criminals like Dr. Mark Tuan Le.”
“Dr. Le’s exploitation of Medicare and Medicaid, in concert with his tax evasion, made the burden heavier for every American taxpayer” said Thomas J. Holloman, Special Agent in Charge, IRS Criminal Investigation. “This type of criminal activity carries with it serious consequences. IRS Criminal Investigation and our law enforcement partners are committed to the pursuit of those that would engage in this type of fraud.”
Criminal CaseAccording to filed documents and statements made in court, from at least 2009 to 2013, Le and others defrauded Medicare, Medicaid and private health insurers by submitting false claims for certain procedures – namely hemorrhoidectomies and Enhanced External Counterpulsation (EECP) therapy – when those services were never actually provided. Le owned and operated Northcross Medical Center and employed numerous family members at that practice and related businesses. Le and others conspired to defraud health insurers by billing for EECP treatments that were never performed and, if performed, were not medically necessary. Court documents explain that EECP treatments are recommended for patients with chronic disabling angina and insurance companies typically require that diagnosis as a condition of reimbursing claims for EECP treatments.
Court records indicate that after Le and his practice obtained an EECP machine in or about late 2008, Northcross Medical Center’s claims for EECP treatment skyrocketed. According to court documents, most patients did not qualify for EECP treatment and Le falsified the diagnosis code in order to obtain reimbursement. Information contained in filed court documents indicates that Le most frequently claimed to have performed these treatments upon his or his employees’ relatives when the procedures were not actually performed. Court documents also indicate that Le further defrauded insurance programs, including Medicare and a private insurer, by submitting false and fraudulent claims for hemorrhoidectomies (the removal of hemorrhoids) which did not occur.
According to court documents, in or about 2009 and 2010, Le committed tax evasion by hiding approximately $2.4 million in personal income from the IRS by falsely claiming that certain payments were Northcross Medical Center’s business expenses. In reality, court records indicate, Le used these funds to purchase and construct a $2.4 million, 8000-square foot residence on Lake Norman in Cornelius. Plea documents indicate that Le reported to IRS that his taxable income for 2010 was $40,142, resulting in a tax liability of $832.00. Le significantly underreported his income also in 2009, by fraudulently misclassifying personal income as business expenses. In reality, Le had an additional income of approximately $1.2 million in 2010 and another $1.2 million in 2009 and, as a result of his tax scheme, Le evaded a total of $844,367 of personal income taxes, court records show.
Le pleaded guilty today before U.S. Magistrate Judge David S. Cayer to one count of conspiracy to commit health care fraud, seven counts of health care fraud and one count of tax evasion. At sentencing, Le faces a maximum prison term of 10 years and a $250,000 fine for the health care fraud charges and a maximum prison term of five years and a $250,000 fine for the tax evasion charge. As part of his plea agreement, Le has agreed to pay full restitution to Medicare, Medicaid, private insurers and to IRS for any losses. The final restitution amount will be determined by the court at Le’s sentencing hearing. Le is currently released on bond. A sentencing date has been set yet.
Civil SettlementIn addition to criminal charges to which Le pleaded guilty today, Le and Northcross Medical Center have agreed to a $6.2 million settlement to resolve allegations stemming from a federal civil complaint filed on June 4, 2014 by the United States, pursuant to the False Claims Act. According to the civil complaint, from December 2007 through March 2013, Le and his practice billed Medicare and Medicaid for services that were not medically necessary, not provided, and/or provided to immediate family members, and otherwise failed to comply with Medicare and Medicaid rules and regulations. A final judgment in favor of the United States was entered on June 9, 2014. Le and Northcross Medical Center have paid $2.1 million already to resolve these claims and must pay the remainder within 18 months.
The investigation into Le was handled by HHS-OIG, IRS and MID. The criminal prosecution is handled by Assistant U.S. Attorney Kelli Ferry. Assistant U.S. Attorney Jonathan Ferry handled the civil settlement. U.S. Attorney Tompkins also thanked the North Carolina Medical Board for their assistance in the investigation.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
Huntersville Physician Pleads Guilty to Health Care Fraud and Tax Fraud and Agrees to Pay $6.2 Million to Settle Civil Fraud ClaimsRead the Press Release
Former Owner Of Northcross Medical Center Hid $2.4 Million In Income Used To Build 8,000-Square Foot Home On Lake Norman
CHARLOTTE, N.C. – Mark Tuan Le, an internal medicine physician and former owner of Northcross Medical Center, pleaded guilty today to federal criminal charges in connection with a healthcare fraud scheme that billed health insurers for services that were not performed and for evading over $800,000 in taxes in 2009 and 2010, announced Anne M. Tompkins U.S. Attorney for the Western District of North Carolina.
Earlier this month, Le, 55 of Huntersville, N.C., also agreed to pay $6.2 million to the United States to settle civil fraud allegations that Le and his medical center defrauded Medicare and Medicaid by submitting claims for medically unnecessary diagnostic test and procedures. The $6.2 million settlement is the Western District’s largest ever against a single physician.
U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region; and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
In making today’s announcement U.S. Attorney Tompkins stated, “Dr. Le exploited his medical license to carry out a criminal scheme involving fraudulent billings for services that were not needed or not given. Then, Dr. Le took his criminal conduct a step further and covered up the additional income to avoid the tax liability. As this case shows, we will use all of the tools and resources in our disposal to prosecute fraud, including pursuing parallel criminal and civil proceedings.” U.S. Attorney Tompkins further urged anyone with information of instances involving fraudulent medical billing or other practices involving health care fraud to report them to law enforcement.
“Illegal schemes like this one waste tax dollars and divert funds that are supposed to go toward needed medical care. Our investigators and attorneys will continue to work closely with federal officials to fight health care fraud and recover the public’s money,” said North Carolina Attorney General Roy Cooper.
“Le cheated Americans twice. First by settling health fraud charges to the tune of $6.2 million, and then through $800,000 in tax evasion, said Derrick L. Jackson, Special Agent in Charge for Office of Inspector General of the U.S. Department of Health and Human Services Atlanta region including North Carolina. “Working shoulder to shoulder with our law enforcement partners, we will pursue and prosecute criminals like Dr. Mark Tuan Le.”
“Dr. Le’s exploitation of Medicare and Medicaid, in concert with his tax evasion, made the burden heavier for every American taxpayer” said Thomas J. Holloman, Special Agent in Charge, IRS Criminal Investigation. “This type of criminal activity carries with it serious consequences. IRS Criminal Investigation and our law enforcement partners are committed to the pursuit of those that would engage in this type of fraud.”
Criminal CaseAccording to filed documents and statements made in court, from at least 2009 to 2013, Le and others defrauded Medicare, Medicaid and private health insurers by submitting false claims for certain procedures – namely hemorrhoidectomies and Enhanced External Counterpulsation (EECP) therapy – when those services were never actually provided. Le owned and operated Northcross Medical Center and employed numerous family members at that practice and related businesses. Le and others conspired to defraud health insurers by billing for EECP treatments that were never performed and, if performed, were not medically necessary. Court documents explain that EECP treatments are recommended for patients with chronic disabling angina and insurance companies typically require that diagnosis as a condition of reimbursing claims for EECP treatments.
Court records indicate that after Le and his practice obtained an EECP machine in or about late 2008, Northcross Medical Center’s claims for EECP treatment skyrocketed. According to court documents, most patients did not qualify for EECP treatment and Le falsified the diagnosis code in order to obtain reimbursement. Information contained in filed court documents indicates that Le most frequently claimed to have performed these treatments upon his or his employees’ relatives when the procedures were not actually performed. Court documents also indicate that Le further defrauded insurance programs, including Medicare and a private insurer, by submitting false and fraudulent claims for hemorrhoidectomies (the removal of hemorrhoids) which did not occur.
According to court documents, in or about 2009 and 2010, Le committed tax evasion by hiding approximately $2.4 million in personal income from the IRS by falsely claiming that certain payments were Northcross Medical Center’s business expenses. In reality, court records indicate, Le used these funds to purchase and construct a $2.4 million, 8000-square foot residence on Lake Norman in Cornelius. Plea documents indicate that Le reported to IRS that his taxable income for 2010 was $40,142, resulting in a tax liability of $832.00. Le significantly underreported his income also in 2009, by fraudulently misclassifying personal income as business expenses. In reality, Le had an additional income of approximately $1.2 million in 2010 and another $1.2 million in 2009 and, as a result of his tax scheme, Le evaded a total of $844,367 of personal income taxes, court records show.
Le pleaded guilty today before U.S. Magistrate Judge David S. Cayer to one count of conspiracy to commit health care fraud, seven counts of health care fraud and one count of tax evasion. At sentencing, Le faces a maximum prison term of 10 years and a $250,000 fine for the health care fraud charges and a maximum prison term of five years and a $250,000 fine for the tax evasion charge. As part of his plea agreement, Le has agreed to pay full restitution to Medicare, Medicaid, private insurers and to IRS for any losses. The final restitution amount will be determined by the court at Le’s sentencing hearing. Le is currently released on bond. A sentencing date has been set yet.
Civil SettlementIn addition to criminal charges to which Le pleaded guilty today, Le and Northcross Medical Center have agreed to a $6.2 million settlement to resolve allegations stemming from a federal civil complaint filed on June 4, 2014 by the United States, pursuant to the False Claims Act. According to the civil complaint, from December 2007 through March 2013, Le and his practice billed Medicare and Medicaid for services that were not medically necessary, not provided, and/or provided to immediate family members, and otherwise failed to comply with Medicare and Medicaid rules and regulations. A final judgment in favor of the United States was entered on June 9, 2014. Le and Northcross Medical Center have paid $2.1 million already to resolve these claims and must pay the remainder within 18 months.
The investigation into Le was handled by HHS-OIG, IRS and MID. The criminal prosecution is handled by Assistant U.S. Attorney Kelli Ferry. Assistant U.S. Attorney Jonathan Ferry handled the civil settlement. U.S. Attorney Tompkins also thanked the North Carolina Medical Board for their assistance in the investigation.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
Hugo Man Sentenced to 180 Months for Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that SAMMY WAYNE DAVIS, age 46, of Hugo, Oklahoma, was sentenced to 180 months imprisonment, followed by 8 years of supervised release for Possession with Intent to Distribute Methamphetamine, in violation of Title 18, United States Code, Sections 922(g)(I) and 924(e).
The charge arose from an investigation by the Hugo Police Department, the Choctaw County Sheriff’s Office and District 17 District Attorney’s Drug Task Force. The defendant was indicted in February, 2013 and pled guilty in March, 2014.
The Indictment alleged that on or about June 5, 2011, within the Eastern District of Oklahoma, the defendant did knowingly and intentionally possess with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant remains in the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Dean Burris represented the United States.
Hogsett Announces Sentencing of Bloomington-area Resident as Part of Gun, Drug ProsecutionRead the Press Release
U.S. Attorney continues seeing results from Violent Crime Initiative
Bloomington – Joseph H. Hogsett, United States Attorney, announced the sentencing of Courtney Pickett, 29, Bloomington for one count of conspiracy to distribute with intent to possess five kilograms of cocaine and one count of carrying a firearm in furtherance of a drug trafficking crime. Pickett was sentenced to 15 years by U.S. District Judge Sarah Evans Barker.
“When criminals band together, the damage they can inflict is much greater,” said Hogsett. “It is important to prosecute every player in the game so that career criminals don’t have a chance to repeat their attempts.”
Between November and mid-December 2011, Pickett and four other defendants conspired to break into a property they believed contained a large quantity of narcotics. Pickett illegally possessed a firearm in order to further the plan to rob the property. Local and federal law enforcement monitored the defendants’ activities and interrupted the attempted robbery on December 15, 2011.
“This office is dedicated to taking violent criminals off the streets of our Hoosier communities,” said Hogsett.
Thomas Owings, a codefendant is serving a 20 year sentence for his part in the crime at Terre Haute Federal Prison.
This prosecution was part of the United States Attorney’s Violent Crime Initiative. The United States Attorney’s Violent Crime Initiative began in 2011, and is intended to focus on the “worst of the worst” violent offenders by marshaling federal resources to provide local partners the additional tools they may need to succeed in their effort to promote peace. In 2011, only 14 firearms charges were filed. Since then, over 330 firearms cases have been prosecuted. By charging these cases federally, violent felons serve at least 85 % of their sentence.
According to Assistant United States Attorney Barry Glickman, who prosecuted this case for the government, Pickett will also serve three years of supervised release after his sentence.
Hogsett Announces Indictment of Suspected Warrick County Methamphetamine DealerRead the Press Release
Hogsett continues crackdown on methamphetamine trafficking
BOONVILLE – Joseph H. Hogsett, United States Attorney, announced the indictment of a Warrick County man for possession with intent to distribute 50 grams or more of methamphetamine. Matthew Collins, 51, was indicted by a grand jury yesterday.
“Methamphetamine is a harmful drug,” said Hogsett. “Getting it off the streets and putting dealers behind bars is the best way to prevent drug-related violence in our Hoosier communities.”
Since March of this year, DEA officials have been assisting the Warrick Country Sheriff’s Office (WCSO) criminal investigations narcotic division in an investigation involving Collins. Collins is suspected of distributing pound quantities of methamphetamine in the Warrick County area.
Law enforcement began tracking Collins for his alleged drug distribution and on June 8, 2014, stopped Collins for speeding on SR 161 just inside in Indiana border in Spencer County. Deputies from the Warrick County Sheriff’s Department used their K-9 partner to determine the presence of methamphetamine in Collins’ vehicle. Field tests allegedly revealed nearly 15 ounces of crystal methamphetamine.
“Credit should go where it is due. Collaboration between federal and local levels of law enforcement helps our office do our job and take those harming Hoosiers off the streets,” said Hogsett.
Collins remains in custody at the Spencer County Jail.
According to Assistant United States Attorney Lauren Wheatley who is prosecuting this case for the government, Collins could face 10 years to life and a $5 million fine if convicted.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Hogsett Announces Indictment of New Albany Area Violent FelonRead the Press Release
Over 30 weapons confiscated as U.S. Attorney continues efforts to keep career criminals unarmed and off Hoosier streets
NEW ALBANY, IN – Joseph H. Hogsett, United States Attorney, today announced the indictment of Paul James Hoskins, 45, Charlestown Indiana. A grand jury indicted Hoskins on one count of felony possession of a firearm.
“This office has been vigorous in our prosecution of felons in possession of firearms,” said Hogsett. “This defendant represents the worst of the worst as far as career criminals go and it is our job to make sure these people are off the streets and not endangering the stability and peace of Hoosier communities.”
On June 16, 2014, law enforcement officials, upon suspecting Hoskins of engaging in the distribution of methamphetamine and protecting the narcotics with firearms, executed a search warrant on his residence in Charlestown. There, officers allegedly found a 9 mm handgun and multiple rounds of ammunition.
Upon further investigation, and the cooperation of an informant, it was determined that Hoskins also allegedly stored firearms at his parent’s residence, next door. Law enforcement obtained consent to search from Hoskins’ parents. During this consent search, two firearms were found in a rear bedroom. Also in this bedroom was a padlocked closet allegedly storing over 30 firearms, including a sawed-off short-barreled 12 gauge shotgun. A key for the padlocked door was found on the dresser of Hoskins’ bedroom in his own residence.
This prosecution is a result of a joint effort between the ATF (Alcohol, Tobacco, Firearms) office in Louisville, Indiana State Police, Clark County Sheriff’s Department and the Charlestown Police Department.
By federal law, it is illegal for a prior felon to own or possess a firearm. The Federal Armed Career Criminal Act further punishes an individual who possesses a firearm and has at least three prior violent felony convictions with a fifteen year mandatory minimum sentence of imprisonment.
Hoskins felony record spans both Indiana and Kentucky and includes, among others:
Resisting Law Enforcement Causing Bodily Harm, 1993
Fleeing & Eluding Law Enforcement, 1994
Wanton Endangerment, 1st Degree, 1994
Possession of Marijuana with Prior Conviction, Possession of a Concealed Handgun with Prior Conviction, 1994
Resisting Law Enforcement, 2000
Wanton Endangerment, 1st Degree, 2001
Theft, 2007“This office is dedicated to taking violent criminals off the streets and has seen great success in this goal,” said Hogsett. “I am proud of the partnerships we have forged with state and local partners combating crime in our Hoosier communities.”
This prosecution was part of the United States Attorney’s Violent Crime Initiative. The United States Attorney’s Violent Crime Initiative began in 2011, and is intended to focus on the “worst of the worst” violent offenders by marshaling federal resources to provide local partners the additional tools they may need to succeed in their effort to promote peace. Additionally, federal defendants serve 85 % of their sentence.
According to Assistant United States Attorney Lauren Wheatley, who is prosecuting the case on behalf of the government, if convicted, Hoskins can serve a mandatory minimum sentence of 15 years.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.