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10 March 2014
Employee of Deep River Gun Frame Manufacturer Pleads Guilty to Federal Firearms ViolationsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Daniel J. Kumor, Special Agent in Charge of the ATF Boston Field Division, announced that ROBERT BRINKERHOFF, 54, of Old Lyme, pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to violating federal firearms laws. BRINKERHOFF works as the general manager of Tri-Town Plastics, a federally-licensed firearms manufacturer located in Deep River.
According to court documents and statements made in court, Tri-Town Plastics (“Tri-Town”) has a contract with Smith and Wesson to manufacturer firearm frames at its Deep River facility. In February 2012, after the Plainfield Police Department seized a Smith and Wesson 9 millimeter handgun from a residence, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) learned that Smith and Wesson had no record of the handgun ever having been manufactured. A review of Tri-Town’s records revealed that the handgun had been scrapped in March 2011.
The investigation revealed that, in 2009, ATF had directed Tri-Town to address some record-keeping issues that were uncovered during a routine inspection. In March 2011, while ATF was preparing to conduct another routine inspection of Tri-Town, two Tri-Town employees discovered that there were approximately 23 firearms missing from their inventory. Rather than report the firearms as missing, the employees falsely listed them as “scrapped” in Tri-Town’s acquisition and disposition records so that ATF would not learn that they were missing and would renew Tri-Town’s license. Soon after ATF contacted Tri-Town in February 2012 to inquire about the Smith and Wesson handgun that was seized in Plainfield, one of the Tri-Town employees responsible for the fraudulent scrapping advised BRINKERHOFF of the phony record entries that were recorded in March 2011. BRINKERHOFF waited until June 2012 to cause a theft/loss report that listed the 23 missing firearms to be filed with ATF. However, the report failed to advise ATF that all of the firearms had been falsely listed as scrapped in March 2011.
BRINKERHOFF pleaded guilty to one count of failing to file a theft/loss report and one count of making false statements in a theft/loss report. Judge Underhill scheduled sentencing for June 2, 2014, at which time BRINKERHOFF faces a maximum term of imprisonment of one year and a fine of up to $100,000 on each count.
This ongoing investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant U.S. Attorneys Robert M. Spector and Vanessa Richards.
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(203) 821-3722 [email protected]Drug Defendants, Inmate Appear in Federal Court in BluefieldRead the Press Release
BLUEFIELD, W.Va. – United States Attorney Booth Goodwin announced today that four defendants convicted of distributing hydromorphone pills to persons cooperating with law enforcement authorities were sentenced in federal court in Bluefield. Senior United States District Judge David A. Faber sentenced Kevin Eugene Petty, 36, of Bluefield, to eight years in prison. Petty received an additional sentence of two years for violating the conditions of his previously imposed supervised release. He pled guilty in September of 2013, admitting that on September 20, 2012, he distributed ten hydromorphone pills at or near Bluefield, West Virginia.
Jason Robert Davis, 28, of Bluefield, Virginia, was sentenced to three years and 10 months in federal prison. He pled guilty in September of 2013, admitting that on January 31, 2012, he distributed five hydromorphone pills. That drug deal took place near Princeton. Davis also admitted that between 2010 and 2012 he sold a total of 125 hydromorphone pills, 125 oxycodone pills and 25 oxymorphone pills.
Bobby Michael Short, Jr., 47, of Princeton, was sentenced to one year three months in federal prison. He pled guilty in November of 2013, admitting that on May 17, 2013, he distributed one hydromorphone pill in Princeton. He also admitted distributing a total of 75 hydromorphone pills.
Darryl I. Shrader, 54, of Spanishburg, was sentenced to three years of probation. He pled guilty in November of 2013, admitting that on January 28, 2013, he distributed four hydromorphone pills in Bluefield, West Virginia. He also admitted distributing eight more hydromorphone pills during January, 2013.
These cases were investigated by the West Virginia State Police Bureau of Criminal Investigations and the Southern West Virginia Drug and Violent Crime Task Force, and were prosecuted under the Bluefield Pill Initiative, 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. 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 opiate painkillers in communities across the Southern District.
A federal inmate also appeared before Judge Faber. Billy Williams, 24, an inmate at the Federal Correctional Institution at McDowell, near Welch, pled guilty to possessing a weapon in a federal correctional facility. Williams admitted that on October 29, 2013, he possessed a homemade knife, commonly known as a “shank,” while he was serving time at the prison. Williams faces up to five years in prison and a $250,000 fine when he is sentenced on July 7, 2014. The investigation was conducted by the Federal Bureau of Prisons.
Doctor Admits Taking Cash Kickbacks for Patient Referrals and Failing to Report Nearly $1 Million in IncomeRead the Press Release
NEWARK, N.J. — An Essex County, N.J., doctor practicing family medicine in East Orange, N.J., today admitted receiving cash kickbacks for diagnostic testing referrals of his patients and failing to file tax returns on $1 million of income over a three-year period, U.S. Attorney Paul J. Fishman announced.
Yash Khanna, M.D., 72, of Livingston, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a six-count superseding indictment charging him with conspiracy to violate the federal health care anti-kickback statute; soliciting and receiving more than $10,000 in illegal cash kickbacks for patient referrals in violation of the anti-kickback statute; and failing to file tax returns for tax years 2008, 2009, and 2010.
According to documents filed in this case and statements made in court:
From 2009 through 2011 Khanna owned and operated his own medical practice, Family Medicine and Pediatrics LLC. He agreed with representatives of a diagnostic testing facility called Orange Community MRI LLC (Orange MRI) that he would be paid cash in exchange for patients he referred for testing. He received cash kickbacks from Orange MRI for diagnostic tests performed on Medicare and Medicaid patients and met with an Orange MRI representative at his office on Oct. 4, 2011, and Nov. 10, 2011, taking envelopes with cash. Khanna acknowledged taking kickback cash from Orange MRI on other occasions as well.
Khanna admitted to earning income of more than $381,000 in 2008, $400,000 in 2009, and $214,000 in 2010. He intentionally failed to file tax returns or ask for extensions during those years.
The anti-kickback charges each carry a maximum potential penalty of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. The tax charges each carry a maximum penalty of one year in prison and a maximum $100,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for June 27, 2014.Khanna is the 15th doctor convicted in the government’s investigation of Orange MRI and its corrupt referring doctors. Healthcare practioners convicted in the case have so far forfeited a total of $460,140.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Tom O’Donnell; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and criminal investigators with the U.S. Attorney’s Office for the investigation leading to the guilty plea.The case is being prosecuted by Deputy Chief Scott B. McBride of the U.S. Attorney’s Office’s Economic Crimes Unit and Deputy Chief Joseph G. Mack of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
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Defense counsel: Christopher L. Patella Esq., Bayonne, N.J.
Khanna Superseding Indictment
Cobb County Man Sentenced in Identity Theft SchemeRead the Press Release
ATLANTA – Bradford Thomas has been sentenced to ten years and one month in prison for using stolen identities of prisoners to file false federal income tax returns that claimed millions of dollars in fraudulent refunds.
“This defendant used the stolen identities of prisoners to steal millions of taxpayer dollars and enrich his own lifestyle,” said United States Attorney Sally Quillian Yates. “This case exemplifies our continuing efforts to combat identity-theft schemes designed to steal tax dollars, which have grown to disturbing levels.”
“We would like this sentence to serve as a strong message that there are consequences for stealing and using other individual’s personal identifying information,” stated IRS Criminal Investigation, Special Agent in Charge, Veronica F. Hyman-Pillot. “Be assured that we will continue to be proactive in the investigation of individuals who engage in similar behavior.”
According to United States Attorney Yates, the charges, and other information presented in court: From January 2010 through May 2013, Thomas orchestrated a scheme to file over 1,200 false tax returns using the names and Social Security numbers of various victims, many of whom were incarcerated in jails or prisons throughout the country. These false tax returns claimed over $5.5 million in fraudulent tax refunds which were directed to be deposited into bank accounts controlled by Thomas or individuals working with him. The scheme caused an actual loss of over $1.6 million in taxpayer money.
In conjunction with the arrest of Thomas in August 2013, federal agents searched two locations from which the tax returns were electronically submitted to the IRS, including a business named “Immaculate Autos” at 2691 McCollum Parkway, Suite E, Kennesaw, Ga., and Bradford Thomas's primary residence in Acworth, Ga. At those locations, investigators uncovered $438,080 in cash, two handguns, jewelry, and various luxury automobiles, including a 2005 Rolls Royce Phantom, a 2008 Maserati Granturismo, a 2005 Bentley 2D, a 2006 Mercedes Benz, a 2003 Hummer H2, a 2007 Mercedes Benz S550, a 2004 Land Rover Range Rover, and a 2002 GMC Denali XL.
Thomas, 47, of Cobb County, Ga., was sentenced by United States District Judge Steve C. Jones to ten years and one month in federal prison and three years of supervised release, and ordered to pay $1,663,035 in restitution to the IRS. The Court also ordered Thomas to forfeit his interest in the cash, weapons, jewelry, and luxury automobiles found at his business and residence. Thomas pleaded guilty on November 22, 2013, to wire fraud and aggravated identity theft.
This case was investigated by the Internal Revenue Service Criminal Investigation. If you believe you may be a victim of tax return-related identity theft, please contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 (Mon. - Fri., 7 a.m. - 7 p.m. local time).
Assistant United States Attorneys Thomas J. Krepp and Mary F. Kruger are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Berks County Businessman Charged with Tax FraudRead the Press Release
Harvey G. Bitler, Sr., 56, of Shillington, PA, was charged today by information with failing to pay over to the government income taxes and social security taxes withheld from his employees’ paychecks, announced United States Attorney Zane David Memeger.
Bitler was the owner of Big H Farms and BH Farms in Berks County, Pennsylvania. Big H Farms provided labor for mushroom growing facilities and BH Farms employed salaried employees associated with the operation and management of Big H Farms. The information alleges that these companies withheld Medicare and Social Security taxed (FICA taxes) and income taxes from their employees’ paychecks but, between 2007 and 2012, made no payments to the Internal Revenue Service of these withheld taxes. It is further alleged that between 2008 and 2012, BH Farms did not pay over all the taxes withheld in the first quarter of 2008, and made no payments to the Internal Revenue Service for the remaining quarters of those years. In total, for these periods, Bitler withheld but allegedly failed to pay a total of $4,566,572.04.
If convicted, the defendant faces a maximum possible sentence of five years in prison and possible restitution to the IRS.
The case was investigated by the Internal Revenue Service Criminal Investigations with the assistance from revenue agents with Small Business and Self-Employed Division of the Internal Revenue Service. It is being prosecuted by Assistant United States Attorney Albert S. Glenn.
Click here to view the indictment
1An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Ballard Resident who Repeatedly Sold Marijuana to Middle and High School Students Sentenced to 30 Months in PrisonRead the Press Release
A resident of Seattle’s Ballard neighborhood was sentenced today in U.S. District Court in Seattle to 30 months in prison and two years of supervised release for conspiracy to distribute marijuana, distribution of marijuana and possession of marijuana with intent to distribute, announced U.S. Attorney Jenny A. Durkan. ALEJANDRO ANTONIO CASTILLO, 51, came to the attention of law enforcement in March 2013 after a middle school parent reported students were purchasing marijuana from CASTILLO’s home a block north of Ballard High School. Surveillance of the home and purchases by undercover officers revealed that CASTILLO and his associates were repeatedly selling marijuana to minors including high school and middle school students from area schools. At sentencing U.S. District Judge James L. Robart said he had reviewed photos of “the parade of kids coming up to the back door and buying drugs…. It is not acceptable to sell marijuana to school kids…. It is not acceptable to have guns at home to protect your drug trade.”
“As Washington moves forward with regulated marijuana, it is critical that we enforce the prohibition on sales to children and on those who use guns to protect their illegal activity,” said U.S. Attorney Jenny A. Durkan. “This defendant was selling to minors as young as 13 and had previously demonstrated his willingness to use guns to protect his drug business. The mix of drugs and guns is dangerous for the whole community, including kids who could show up at the door during a drug related robbery.”
According to records in the case, on various dates in April 2013, Seattle Police detectives observed teens from Whitman Middle School and Ballard High School approach the home where CASTILLO lives with his family members and associates. The teens would go to the back door of the home, be there for a few minutes and leave. Some were observed to be holding plastic bags of what appeared to be marijuana as they left. On April 5, 2013, detectives observed 18 teens between the age of 14 and 18 approach the house in a three hour period beginning just before noon. Most of the teens appeared to come directly from Ballard High School.
On four different occasions, undercover officers posing as juveniles purchased both marijuana and brownies laden with marijuana from CASTILLO or his associates. On April 24, 2013, Seattle Police served a search warrant at the home and seized approximately 1,200 grams of suspected marijuana which included approximately 99 marijuana cigarettes, nine trays of suspected marijuana brownies, four shotguns, one rifle, six handguns, and $4,755 in U.S. Currency. According to police reports, the home had previously been targeted in a home invasion robbery. Two men had fired a shotgun into the house, CASTILLO fired back with one of his firearms, but the robbers fled and no one was hit by gunfire.
Judge Robart said he questioned CASTILLO’s claims that he only sold drugs because he was “behind on his bills,” noting that more than $4,700 in cash was seized at the house. “It is necessary that we get out the message: regardless of legalization, you do not sell drugs to minors,” Judge Robart said.
CASTILLO was charged federally in September 2013, and pleaded guilty in December 2013.
The case was investigated by the Seattle Police Department and the Drug Enforcement Administration (DEA) and is being prosecuted by Special Assistant United States Attorney Stephen Hobbs. Mr. Hobbs is a Senior Deputy King County Prosecutor specially designated to prosecute gun and drug cases in federal court.Attorney General Holder, Calling Rise in Heroin Overdoses<br /> ‘Urgent Public Health Crisis,’ Vows Mix of Enforcement,<br /> TreatmentRead the Press Release
Calling the rise in overdose deaths from heroin and other prescription pain-killers an “urgent public health crisis,” Attorney General Eric Holder vowed Monday that the Justice Department would combat the epidemic through a mix of enforcement and treatment efforts. As an added step, the Attorney General is also encouraging law enforcement agencies to train and equip their personnel with the life-saving, overdose-reversal drug known as naloxone.
Speaking in a video message posted on the Justice Department’s website, Holder noted that between 2006 and 2010, heroin overdose deaths increased by 45 percent.
“When confronting the problem of substance abuse, it makes sense to focus attention on the most dangerous types of drugs. And right now, few substances are more lethal than prescription opiates and heroin,” Holder said.
Relatedly, Holder is urging first responders to carry the drug known as naloxone. When administered quickly and effectively, naloxone immediately restores breathing to a victim in the throes of a heroin or opioid overdose. Seventeen states and the District of Columbia have amended their laws to increase access to naloxone, resulting in over 10,000 overdose reversals since 2001. Used in concert with “Good Samaritan” laws, which grant immunity from criminal prosecution to those seeking medical help for someone experiencing an overdose, naxolone can save lives.
The Attorney General also urged the public to view the award-winning documentary, “The Opiate Effect,” to learn more about the realities, and the dangers, of opiate abuse. The video is available for free online HERE.The complete text of the Attorney General’s video message is below: “When confronting the problem of substance abuse, it makes sense to focus attention on the most dangerous types of drugs. And right now, few substances are more lethal than prescription opiates and heroin.
“Addiction to heroin and other opiates – including certain prescription pain-killers – is impacting the lives of Americans in every state, in every region, and from every background and walk of life – and all too often, with deadly results. Between 2006 and 2010, heroin overdose deaths increased by 45 percent. Scientific studies, federal, state and local investigations, addiction treatment providers, and victims reveal that the cycle of heroin abuse commonly begins with prescription opiate abuse. The transition to—and increase in—heroin abuse is a sad but not unpredictable symptom of the significant increase in prescription drug abuse we’ve seen over the past decade.
“It’s clear that opiate addiction is an urgent – and growing – public health crisis. And that’s why Justice Department officials, including the DEA, and other key federal, state, and local leaders, are fighting back aggressively.
“Confronting this crisis will require a combination of enforcement and treatment. The Justice Department is committed to both.
“On the enforcement side, we’re doing more than ever to keep illicit drugs off the streets – and to bring violent traffickers to justice. With DEA as our lead agency, we have adopted a strategy to attack all levels of the supply chain to prevent pharmaceutical controlled substances from getting into the hands of non-medical users. DEA proactively investigates the diversion of controlled substances at all levels of the supply chain. This includes practitioners that illegally dispense prescriptions, pharmacists that fill those prescriptions, and distributors that send controlled substances downstream without due diligence efforts. DEA also uses its regulatory authority to review and investigate new pharmacy applications in targeted areas to identify and prevent storefront drug traffickers from obtaining DEA registrations. And they’re also going after “pill mills.”
“Since 2011, DEA has opened more than 4,500 investigations related to heroin. They’re on track to open many more. And as a result of these aggressive enforcement efforts, the amount of heroin seized along America’s southwest border increased by more than 320 percent between 2008 and 2013.
“Of course, enforcement alone won’t solve the problem. That’s why we are enlisting a variety of partners – including doctors, educators, community leaders, and police officials – to increase our support for education, prevention, and treatment. DEA engages in widespread education of pharmacists, doctors, and other health practitioners in the identification and prevention of controlled substance diversion during the healthcare delivery process. In the Northern District of Ohio, for example, the U.S. Attorney convened a summit at the Cleveland Clinic, bringing together health and law enforcement professionals to address that area’s 400-percent rise in heroin-related deaths. And nationwide, the Justice Department is supporting more than 2,600 specialty courts that connect over 120,000 people convicted of drug-related offenses with the services they need to avoid future drug use and rejoin their communities.
“We can, and should, be proud of these results. But more can be done. And frequently, the most effective efforts are those that begin at home. Parents and families can help raise awareness about the devastating consequences of opiate abuse. And Americans like the Gates family of Skowhegan, Maine, are showing the way. Their son, Will, was a bright young student at the University of Vermont who overdosed on heroin and lost his life – five years ago this month.
“During their grief, Will’s parents and his brother have transformed their story of heartbreaking loss into a powerful force for change. Working with the U.S. Attorney’s Office in Vermont, they created an award-winning documentary – called “The Opiate Effect” – to educate people about the realities, and the dangers, of opiate abuse. Fifty thousand people have already watched this video for free online. And I urge you to do the same – because it’s only by working together that we can confront this crisis, strengthen our communities, and save lives.”
The full video is available at http://www.justice.gov/agwa.php
Attorney Admits Underreporting Income on Tax ReturnsRead the Press Release
PITTSBURGH - A Pittsburgh man pleaded guilty in federal court to charges of filing false tax returns on April 14, 2008, United States Attorney David J. Hickton announced today.
Zenford A. Mitchell, pleaded guilty to two counts before United States District Judge Donetta W. Ambrose.
In connection with the guilty plea, the court was advised that Mitchell filed false tax returns on April 14, 2008, for calendar year 2006 and for 2007, by deliberately underreporting his income from his law practice and from withdrawals from his individual retirement account.
Judge Ambrose scheduled to sentencing for June 30, 2014. The law provides for a maximum total sentence of three years in prison, a fine of $250,000, or both for each count of conviction. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Internal Revenue Service conducted the investigation that led to the prosecution of Zenford A. Mitchell.
Albuquerque Man Charged with Federal Hate Crime Related to Anti-Semitic Threats Against BusinesswomanRead the Press Release
The Department of Justice announced that this morning John W. Ng, 58, of Albuquerque, N.M., made his initial appearance in federal court on a criminal complaint charging him with a hate crime offense. This charge is related to anti-Semitic threats Ng made against a Jewish woman who owns and operates the Nosh Jewish Delicatessen and Bakery in Albuquerque.
Ng was arrested by the FBI on March 7, 2014, based on a criminal complaint alleging that he interfered with the victim’s federally protected rights by threatening her and interfering with her business because of her religion. According to the criminal complaint, between Jan. 22, 2014, and Feb. 8, 2014, Ng allegedly posted threatening anti-Semitic notes on and in the vicinity of the victim’s business.
A criminal complaint merely establishes probable cause, and Ng is presumed innocent unless proven guilty. If convicted on the offense charged in the criminal complaint, Ng faces a maximum statutory penalty of one year in prison.
This matter was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Mark T. Baker of the U.S. Attorney’s Office for the District of New Mexico and Trial Attorney AeJean Cha of the U.S. Department of Justice’s Civil Rights Division.
Albuquerque Man Charged with Federal Hate Crime Related to Anti-Semitic Threats Against BusinesswomanRead the Press Release
ALBUQUERQUE – The Department of Justice announced that this morning John W. Ng, 58, of Albuquerque, N.M., made his initial appearance in federal court on a criminal complaint charging him with a hate crime offense related to anti-Semitic threats made against a Jewish woman who owns and operates the Nosh Jewish Delicatessen & Bakery in Albuquerque.
Ng was arrested by the FBI on March 7, 2014, based on a criminal complaint alleging that he interfered with the victim’s federally protected rights by threatening the victim and interfering with her business because of her religion. According to the criminal complaint between Jan. 22, 2014 and Feb. 8, 2014, Ng allegedly posted threatening anti-Semitic notes on and in the vicinity of the victim’s business.
A criminal complaint merely establishes probable cause, and Ng is presumed innocent unless proven guilty. If convicted on the offense charged in the criminal complaint, Ng faces a maximum statutory penalty of one year in prison.
This case was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Mark T. Baker of the U.S. Attorney’s Office for the District of New Mexico and Trial Attorney AeJean Cha of the U.S. Department of Justice’s Civil Rights Division.
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Ng Complaint
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Airline Pilot Indicted for Traveling to Have Sex with MinorRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA - A commercial airline pilot has been indicted on charges of traveling across state lines in order to have sex with a minor female.
U.S. Attorney William J. Ihlenfeld, II, announced that MUSTAFA M. BAZBAZ, age 28, of Oakdale, Pennsylvania was named in a two-count Indictment charging him with “Travel with Intent to Engage in Illicit Sexual Conduct” and “Transportation of a Minor with Intent to Engage in Criminal Sexual Activity.” BAZBAZ allegedly began communicating with a 15-year old female from Jefferson County, Ohio, in December of 2013 via the website known as MeetMe.com. BAZBAZ is alleged to have misrepresented his age and name to the victim, claiming to be 17 years old and to be named “Mike B.” It also alleged that BAZBAZ sent sexually explicit images of himself to the victim before arranging to pick up the victim near her home in Jefferson County in December of 2013. The criminal complaint asserts that BAZBAZ then took the victim to a hotel room in Hancock County where he engaged in sexual intercourse with her.
If convicted, BAZBAZ faces up to forty years in prison. This case will be prosecuted by Assistant U.S. Attorney Robert H. McWilliams, Jr. and is being investigated by the Federal Bureau of Investigation and the Hancock County (WV) Sheriff’s Department.
In other matters considered by the Clarksburg Grand Jury, Ihlenfeld announced that CLAUDE JONES a/k/a “MIKE JONES,” age 29 and DESEAN LAMARR AARON, age 24, of Fairmont, West Virginia, were named in an eight-count Indictment charging them with “Conspiracy to Possess with Intent to Distribute and to Distribute Crack Cocaine, Cocaine HCL and Heroin.” JONES faces an additional six counts and AARON faces an additional two counts for the distribution of the controlled substances. The defendants each face up to twenty years in prison on each count. The case will be prosecuted by Assistant U.S. Attorney Zelda E. Wesley and was investigated by the Three Rivers Drug Task Force.
ROBERT DALE TASKER, age 43, an inmate at the Tygart Valley Regional Jail in Belington, West Virginia, was named in a four-count Indictment charging him with three counts of “Threats Against the President,” and one count of “Threats Against Family Members of the President.” TASKER faces up to five years in prison on each count. This case will be prosecuted by Assistant U.S. Attorney Randolph J. Bernard and was investigated by the United States Secret Service.
GARY ALLEN STEWART, age 31, of Sutton, West Virginia, was named in a four-count Indictment charging him with “Obstruction of Correspondence.” STEWART faces up to five years in prison on each count. This case was investigated by the United States Postal Inspection Service, Office of Inspector General, and will be prosecuted by Assistant U.S. Attorney Michael Stein.
ANTHONY SCOTT MOATS, age 39, of Lost Creek, West Virginia, was charged with being a “Felon in Possession of a Firearm.” MOATS, who has prior felony convictions for burglary, drug distribution, and bank theft, is alleged to have possessed a firearm in September of 2013 in Monongalia County. MOATS faces up to fifteen years in prison if convicted. This case will be prosecuted by Wesley and was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Marshals Service.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty.
Aaron Kinzer Sentenced to 188 Months for Drug TraffickingRead the Press Release
GREENEVILLE, Tenn. – On Mar. 10, 2014, Aaron Kinzer, 32, of Bristol, Tenn., was sentenced to a total of 188 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge. Upon his release from prison Kinzer will be supervised for eight years by the U.S. Probation Office.
Kinzer pleaded guilty in July 2012 to conspiring to distribute crack cocaine and marijuana, and money laundering. He led a conspiracy to traffic in marijuana and crack cocaine, obtained in Atlanta and Charlotte, in the Tri-Cities area. Kinzer’s sentencing brings to a close the investigation which resulted in the conviction of seven individuals.
Law enforcement agencies participating in the joint investigation included the Sullivan County Sheriff’s Office; Bristol Tennessee Police Department; Iredell County, North Carolina Sheriff’s Department; North Carolina State Highway Patrol; and Drug Enforcement Administration. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
8 March 2014
Local Attorney Arrested on Fraud IndictmentRead the Press Release
St. Louis, MO – St. Charles County attorney JEFFREY WITT was arrested on an indictment charging him with falsifying documents to obtain a line of credit on a St. Louis County home which did not belong to him, as well as aggravated identity theft.
According to the indictment issued by the federal grand jury, during September 2013, Witt submitted a false loan application in the name of an individual identified in the indictment as PW, in order to obtain a $100,000 line of credit secured by the individual's St. Louis-area residence. The individual home owner was unaware of Witt's loan application. The indictment alleges that Witt provided an associate with false documentation and identification in PW's name so the associate could impersonate PW at the loan closing. Together they were able to obtain the $100,000 bank loan credit line. Witt immediately drew out $60,000 from the credit line, which funds Witt deposited into his law firm bank account and then withdrew for personal purposes. The indictment alleges that subsequent to the loan closing, PW learned of Witt's action and confronted him. In order to conceal the scheme, Witt falsely represented to PW that he had cancelled the loan. To convince PW, Witt created a false letter on fake bank letterhead, forged the signature of a bank officer and created a false "Deed of Release," all of which purportedly released the Deed of Trust on PW's home securing the loan.
Witt was arrested on the charges Friday, March7, 2014, by FBI Special Agents when he landed at Kennedy International Airport in New York City on an inbound flight from Istanbul, Turkey. He will have his initial appearance before a Federal Magistrate Judge in Brooklyn, New York, on Saturday, March 8, 2014.
Witt, St. Charles, MO, was indicted by a federal grand jury December 11th on one felony count of bank fraud and one felony count of aggravated identity theft. The indictment was under seal until the arrest of the defendant Friday evening, March 7, 2014.
If convicted, bank fraud carries a maximum penalty of 30 years in prison and/or fines up to $1 million. Each count of aggravated identity theft carries a mandatory two-year prison sentence consecutive to any other term of imprisonment and/or fines up to $250,000. In determining the actual sentence, 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 Hal Goldsmith is handling the case for the U.S. Attorney's Office. The United States Attorney’s Office, Eastern District of New York provided cooperation in the arrest of the defendant.
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.
7 March 2014
West Logan Restaurant Owner Pleads Guilty to Laundering Cash from Illegal Gambling OperationRead the Press Release
Defendant Traveled To Tennessee to Purchase Sports Car With Ill-Gotten Gains
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin announced today that a West Logan restaurant owner pled guilty Thursday to laundering cash from an illegal gambling operation. Since May of 2008, Gregory A. Dotson, 51, of Chapmanville, who was the proprietor of Giovanni’s of Logan in West Logan, operated an illegal poker machine gambling parlor in the back of a tobacco store in South Williamson, Kentucky. Although payouts from poker machines, often referred to as gray machines, are illegal under Kentucky law, Dotson routinely paid out gambling winnings to patrons. Dotson retrieved the proceeds from the illegal gambling operation weekly and brought the cash across state lines to his office at Giovanni’s. Dotson then commingled the cash he brought in from his legitimate business with that from his illegal enterprise.
On August 16, 2010, Dotson traveled from West Virginia to Bristol, Tennessee, with nearly $12,000 of cash proceeds from the illegal gambling operation and used those funds to help purchase a sports car.
In October of 2013, agents from the Internal Revenue Service Criminal Investigative Division raided the gambling parlor, seizing forty machines in operation and another forty machines in storage.
As part of the plea agreement, Dotson agreed to forfeit nearly $150,000 in cash, a $96,000 Mercedes sport-utility vehicle, a $50,000 Rolex watch, and several expensive firearms, in addition to the eighty gray machines seized from the South Williamson operation.
In addition to the forfeiture, Dotson faces up to ten years in prison and a $250,000 fine when he is sentenced on June 11, 2014.
The investigation was conducted by the Internal Revenue Service Criminal Investigative Division with assistance from the Federal Bureau of Investigation. Assistant United States Attorney Thomas Ryan is in charge of the prosecution.
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEA (before District Judge Robert L. Miller, Jr.)
Quintin T. Ferguson, 24, of Mishawaka, Indiana pled guilty to the felony offense of possessing heroin with intent to distribute. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.Sentencing has been set for 6/25/2014.This case is being prosecuted by Assistant United States Attorney Donald Schmid.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
(before District Judge Robert L. Miller, Jr.)
Quintien Walker, 22, of South Bend, Indiana was sentenced to 22 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of making a false statement during the acquisition of a firearm.According to documents filed in this case, in July 213, Walker provided a false written statement in obtaining a firearm. This case was the result of an investigation by the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney Donald Schmid.
(before District Judge Jon E. DeGuilio)
Alicia Green, 28, of South Bend, Indiana was sentenced to 37 months imprisonment with 2 years supervised release and ordered to pay $99,501.94 in restitution after pleading guilty to the felony offense of defrauding the United States government.According to documents filed in this case, Walker participated with others in a false tax return preparation and filing scheme in South Bend, Indiana. Individuals prepared and submitted Forms 1040, U.S. Individual Income Tax Returns, with false or inflated Forms W-2 to obtain false tax refunds. This scheme resulted in the submission of approximately 1,189 false tax refunds for tax years 2008, 2009, and 2010. Beginning in 2009, Walker opened and controlled bank accounts that received tax refunds from some of these false tax returns and she shared in the proceeds generated by these false tax returns. This case was the result of an investigation by the Internal Revenue Service – Criminal Investigation Department.This case was prosecuted by Assistant United States Attorney Frank Schaffer.
Week in Review – HammondRead the Press Release
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Darian Brown, 36, of Merrillville, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of mail fraud.Sentencing has been set for 5/21/14. This charge was filed as a result of an investigation by the Federal Bureau of Investigation.This case is being prosecuted by Assistant United States Attorney Randall Stewart.
Roy Dunn, 60, of Winamac, Indiana, a defendant in the case US v Hoosier EMS Inc. et al., pled guilty before District Judge Joseph Van Bokkelen to the felony offense of conspiracy to submit fraudulent claims to Medicare in connection with ambulance transportation for Medicare recipients in Northwest Indiana.Sentencing has been set for 5/20/14. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Medicaid Fraud Control Unit and the US Department of Health and Human Services.This case is being prosecuted by Assistant United States Attorneys Diane Berkowitz and Thomas McGrath.
Jeanetta Brown, 32, of Calumet City, Illinois, pled guilty before Magistrate Judge Paul Cherry to the felony offense of making false statements with respect to information required to be kept in the records of a federally licensed firearms dealer in connection with the purchase of a firearm.Magistrate Cherry is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case is being prosecuted by Assistant United States Attorney Dean Lanter.
James Gerodemos, 50, of Schererville, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of engaging in the business of dealing in explosive material without a license.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case is being prosecuted by Assistant United States Attorney Thomas McGrath.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITION
(before District Judge Theresa L. Springmann:)
Keana Davis, 33, of Fort Wayne, Indiana was sentenced to 151 months imprisonment with 8 years supervised release after pleading guilty to the felony offense of knowingly distributing 28 grams or more of crack cocaine.According to documents filed in this case, in June 2013, Davis’s residence was searched by law enforcement officers.Approximately 175.9 grams of a white powdered substance along with $3,820 in cash were discovered. Over 28 grams of the white powdered substance tested positive as crack.Among the currency found in the residence were two $100 bills used as part of a controlled buy.Additional items used in the production and distribution of drugs were found at the residence.This case was the result of an investigation by the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney Anthony Geller.
W.Va. Division of Highways Administrator Indicted on False Statement ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs Specialist
CLARKSBURG, WEST VIRGINIA – An administrator with the state Division of Highways has been charged with making a false statement to a federal agent.United States Attorney William J. Ihlenfeld, II, announced that EDWARD MATTHEW TUTTLE, 38 years old, of Buckhannon, West Virginia, was indicted by a federal grand jury this week on one count of "False Statement to a Federal Agent." TUTTLE is charged with making materially false statements last month to an F.B.I. agent who questioned him as part of an ongoing federal investigation into the Equipment Division of the West Virginia Division of Highways. TUTTLE currently serves as the Highway Administrator for WVDOH in Upshur County, and formerly served as a supervisor with the Equipment Division.
An indictment is merely an accusation and TUTTLE is presumed innocent until and unless proven guilty. TUTTLE faces up to five years in prison and a fine of up to $250,000 if he is convicted. Under the Federal Sentencing Guidelines the actual sentence imposed will be based upon the seriousness of the offense and his prior criminal history, if any.This case is being prosecuted by Assistant United States Attorney John C. Parr and was investigated by the U.S. Attorney’s Office Public Corruption Unit. Agents and officers from the Federal Bureau of Investigation, the West Virginia State Police, and the State Commission on Special Investigations are leading the inquiry.
Two Ocean Shipping Companies to Pay $3.4 Million to Settle Claims<br /> of Price Fixing Government Cargo Transportation ContractsRead the Press Release
Sea Star Line LLC and Horizon Lines LLC have agreed to resolve allegations that they violated the False Claims Act by fixing the price of government cargo transportation contracts between the continental United States and Puerto Rico, the Department of Justice announced today. Under the settlement agreements, Sea Star Line has agreed to pay $1.9 million, and Horizon Lines has agreed to pay $1.5 million.“Today’s civil settlements demonstrate our continuing vigilance to ensure that those doing business with the government do not engage in anticompetitive conduct,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Government contractors who seek to profit at the expense of taxpayers will face serious consequences.”
The government alleged that former executives of the defendant ocean shippers used personal email accounts to communicate confidential bidding information, thereby enabling each of the shippers to know the transportation rates that its competitor intended to submit to federal agencies for specific routes. This information allowed the shippers to allocate specific routes between themselves at predetermined rates. Among the contracts affected were U.S. Postal Service contracts to transport mail and Department of Agriculture contracts to ship food. Both Sea Star Line and Horizon Lines previously pleaded guilty, in related criminal proceedings, to anticompetitive conduct in violation of the Sherman Act.
“Postal Service contractors must understand and know that actions that undermine the contracting process, such as conspiring to suppress and eliminate competition, will not be tolerated and will be aggressively investigated,” said Tom Frost, Special Agent in Charge of the Major Fraud Investigations Division (MFID) with the Postal Service Office of Inspector General. “MFID will continue to work with DOJ, both criminally and civilly, to bring those individuals and companies to justice.”
The civil settlements resolve allegations in a lawsuit filed in federal court in Jacksonville, Fla., by former Sea Star Line executive William B. Stallings. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Stallings will receive $512,719 of the recovered funds.
The settlements were the result of a coordinated effort by the Civil Division of the Department of Justice and the U.S. Postal Service Office of Inspector General.
The case is captioned United States ex rel. Stallings v. Sea Star Line LLC, et al., Case No. 3:13-cv-152-J-12JBT (M.D. Fla.). The claims resolved by the settlements are allegations only, except to the extent the conduct was admitted as part of the defendants’ prior guilty pleas, and there has been no determination of liability.
Two Citizens of Malaysia Sentenced in U.S. District CourtRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Defendant KUAN SIONG TAN, age 23, and Defendant CHOON BOON TAN, age 27, both citizens of Malaysia, were sentenced on March 5, 2014, in the District Court of Guam, for their convictions of aggravated identity theft. Each defendant was sentenced to a 24-month term of imprisonment to be followed by three years of supervised release. They were also ordered to pay restitution to the victims of their criminal conduct in the amount of $634.42 for CHOON BOON TAN and $1,961.43 for KUAN SIONG TAN.
On January 8, 2013, KUAN SIONG TAN and CHOON BOON TAN entered Guam from Malaysia. A secondary inspection by the U.S. Customs and Border Protection agency was conducted, and the defendants were found with numerous counterfeit access devices or credit cards. Prior to their arrival into Guam, the defendants used counterfeit access devices or credit cards to fraudulently obtain goods and services from a hotel and merchants in Kuala Lumpur, Malaysia, and Bangkok, Thailand. KUAN SIONG TAN possessed 47 counterfeit cards while CHOON BOON TAN possessed 39 such cards. Some of the credit cards were encoded with stolen credit card account information of account holders in the mainland United States with institutions such as Chase Bank, Bank of America, and Capital One Bank. KUAN SIONG TAN and CHOON BOON TAN were arrested on January 8, 2013, by agents with the Homeland Security Investigations and the U.S. Secret Service.
U.S. Attorney Alicia A.G. Limtiaco stated, “Identity theft and related white collar and financial fraud crimes victimize individuals, financial institutions and merchants. The U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands and the Department of Justice are committed to combating identity theft and other white collar and financial fraud crimes. We will continue to dedicate federal resources effectively to prevent, investigate and prosecute the unlawful use of identifying information. Federal and local law enforcement are committed to protecting our community and consumers against theft, fraud and other related criminal activity.”
This case was investigated by special agents from the Department of Homeland Security/Homeland Security Investigations and U.S. Secret Service and prosecuted by Assistant U.S. Attorney Stephen F. Leon Guerrero.- The U.S. Attorney’s Office Announced Today A Jury Found Gary Conti Guilty of Bankruptcy Fraud. Judge Brian Morris Declared A Mistrial on the Remaining Counts of the Indictment Because the Jury Could Not Reach A Verdict.
The Executive Office for Immigration Review to Host Stakeholder Meeting on Recognition and Accreditation ProgramRead the Press Release
SUMMARY: The Executive Office for Immigration Review (EOIR) invites interested parties to participate in a meeting providing a general overview of EOIR's recognition and accreditation program.
DATE: Friday, March 21, 2014, at 2 p.m.
MEETING LOCATION: 5107 Leesburg Pike, Suite 1800, Falls Church, VA.
RSVP: To RSVP for the meeting, please contact Lauren Alder Reid, Counsel for Legislative and Public Affairs, 703-305-0289, [email protected], by noon on March 20, 2014. In-person attendance will be limited to the first forty (40) individuals to RSVP. Those who are unable to attend in person will be able to participate via teleconference and to view meeting slides via the Internet during the meeting. Call-in and Web access information will be available to those who RSVP. To attend the meeting via conference call and Web, please RSVP with the name(s) of the attendee(s), the attendee's organization, and an email address where instructions may be sent for accessing the conference call and Web meeting.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Statement of Manhattan U.S. Attorney Preet BhararaOn the Verdict in United States V. James Rosemond and Rodney JohnsonRead the Press Release
“We are gratified that the jury reached a unanimous verdict finding Rodney Johnson guilty of narcotics distribution and possession of firearms in connection with a drug conspiracy. As for the charges on which the jury was not able to reach a unanimous verdict, the Government’s contention remains that James Rosemond and Rodney Johnson are responsible for the murder of Lowell Fletcher. We are currently considering our options with respect to a retrial.”
Six Members of Human Smuggling Organization IndictedRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Carlos Velazquez-Roman (52, North Port), Jasmine Santos-Martinez (40, North Port), Yoel Emilio Baez-Hernandez (40, Hialeah), Edel Mesa-Hernandez (35, Miami), Mario Emilio Tamayo-Mejias (51, Port Charlotte), and Amable Gonzalez-Mandin (56, Miami) with conspiring to bring more than 100 illegal aliens into the United States, bringing illegal aliens into the U.S., transporting illegal aliens, and violating a federal regulation prohibiting departing U.S. waters with intent to enter Cuban waters without authorization. If convicted, each faces up to 10 years in federal prison for each alien, as it relates to the conspiracy charge. Bringing illegal aliens in the U.S. yields a mandatory minimum penalty of five years, up to a maximum of 15 years in federal prison. Transporting illegal aliens carries a maximum penalty of 10 years in federal prison. Violating a federal regulation prohibiting departing U.S. waters with intent to enter Cuban waters without authorization can result in a maximum penalty of 10 years in federal prison. The indictment also notifies all six individuals that the United States is seeking a forfeiture money judgment of at least $1,530,000, the proceeds of the charged criminal conduct, real property located at 4871 Kendsha Street, North Port, Florida, and a vessel registered to Velazquez-Roman, both of which are to be forfeited to the United States as substitute assets.
According to the indictment, beginning on an unknown date prior to May 3, 2007 and continuing through at least May 15, 2013, all six individuals were part of a conspiracy to bring and attempt to bring more than 100 illegal aliens to the United States. Velazquez- Roman is charged with six instances of bringing illegal aliens to the U.S., while Mesa-Hernandez, Santos-Martinez, Tamayo-Mejias, and Gonzalez-Mandin are each charged with one instance of bringing illegal aliens to the U.S. Velazquez-Roman is charged with two instances of departing U.S. territorial waters and entering Cuban territorial waters without permission, while Mesa-Hernandez, Tamayo-Mejias, and Gonzalez-Mandin are each charged with one such incident. Velazquez-Roman and Gonzalez-Mandin are each charged with transporting an illegal alien within the U.S.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Border Patrol, and the United States Coast Guard Investigative Service. It will be prosecuted by Assistant United States Attorney and Senior Litigation Counsel Donald L. Hansen.
Sioux Falls Man Charged with Failure to AppearRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota, man has been charged by an Information filed May 15, 2013, with a federal offense of Failure to Appear.
David Andrews, age 31, appeared before U.S. Magistrate Judge Mark A. Moreno on March 5, 2014, and pled not guilty to the charge.
The maximum penalty upon conviction is up to 1 year in custody and/or a $100,000 fine, 1 year of supervised release, and $25 to the Federal Crime Victims Fund. Restitution may also be ordered.
On May 6, 2013, Andrews, having been convicted of the offense of Possession of a Controlled Substance, failed to appear for his sentencing hearing in Pierre as required by law.
The charge is merely an accusation and Andrews is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Andrews was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Russell Adler Charged with Conspiracy to Violate the Federal Election Campaign ActRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce the filing of charges against Russell S. Adler, 52, of Ft. Lauderdale. The defendant is alleged to have conspired to violate the Federal Election Campaign Act while a shareholder of the former Fort Lauderdale law firm of Rothstein, Rosenfeldt and Adler, P.A. (RRA).
According to the criminal information filed with the Court earlier today, the defendant was an attorney who was designated as a shareholder of RRA. He was charged with one count of conspiracy to violate the Federal Election Campaign Act and to defraud the United States, in violation of Title 18, United States Code, Section 371. If convicted, the defendant faces a maximum statutory sentence of up to five years in prison
The information charges that in order to circumvent campaign finance laws setting limitations on the amounts which donors can contribute, Rothstein enlisted some of the attorneys and administrative personnel of RRA, and other persons associated with RRA, including Adler, to make political contributions to various political campaigns which were unlawfully reimbursed to them by RRA.
U.S. Attorney Wifredo A. Ferrer stated, “The Federal Election Campaign Act is designed to limit financial influence in the election of candidates. Russell Adler blatantly ignored and circumvented clearly established campaign finance laws in an effort to increase the stature and apparent political power of RRA. The information filed today against Adler holds him accountable for his acts. Adler is now the seventh attorney and seventeenth accomplice to be held accountable in Rothstein’s $1.2 billion Ponzi scheme.”
“According to these charges, Russell S. Adler sought to undermine the campaign finance process and will now have to answer for his decision to do so,” said George L. Piro, Special Agent in Charge, FBI Miami. “This investigation is not over.”
IRS-CI Special Agent in Charge Jose A. Gonzalez stated, “The defendant made contributions to the presidential primary campaign of John McCain and the United States Senate campaign of Charlie Crist, which were unlawfully reimbursed by RRA. Today’s action demonstrates our collective efforts to enforce the law and ensure public trust. This investigation is not over as we are committed to ‘following the money trail’ and pursuing the evidence wherever it leads.”
Mr. Ferrer commended the investigative efforts of the FBI and IRS-CI. This case is being prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan.
An information is only an accusation and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Real Estate Developer Sentenced for Bank and Loan FraudRead the Press Release
PHILADELPHIA - Michael Pouls, 52, of Gladwyne, Pennsylvania, was sentenced today to 96 months in prison for fraudulently inducing two banks to loan him a total of $13.35 million. Pouls defrauded National Penn Bank in 2007 and the former Wilmington Bank in 2008 by presenting fraudulent securities statements. He pleaded guilty on December 10, 2012 to one count of bank fraud, one count of wire fraud and two counts of loan fraud.
Pouls signed closing documents on the National Penn loan in November 2007 knowing that the collateral he had pledged – a TD Ameritrade account - had already been depleted. Seven months later, in June 2008, he likewise obtained a second and much larger loan from Wilmington Trust based on the same non-existent collateral, giving both banks negative pledges on the identical phony collateral. For a period of more than two years, Pouls regularly provided both banks with forged account statements. In 2010, Pouls asked the banks for even more money and that’s when National Penn discovered the fraud.
In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered five years of supervised release, restitution/forfeiture in the amount of $11,975,053.80, and a $400 special assessment.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Karen Grigsby.
Ramsey Man Sentenced on Health Care Fraud ChargeRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on March 7, 2014, William Dale Sidener, 31, of Ramsey, Illinois, was sentenced on the one-count indictment charging that he engaged in a scheme to commit health care fraud in the United States District Court in East St. Louis, Illinois. The district court sentenced Sidener to serve three years of probation, with the three months to be in home confinement. The district court also ordered Sidener to pay $4,677.75 in restitution to the Illinois Department of Human Services and pay a special assessment of $100.00.
During his plea hearing, Sidener admitted that he had submitted false and fraudulent bills in relation to his alleged performance of personal assistant services in the Home Services Program, a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. Sidener admitted to falsely billing the program between November 2012 and February 2013, when he moved away from the person for whom he was supposed to be caring. As a result, Sidener improperly received $4,677.00 in payments for services not performed.
The investigation was conducted by the U.S. Department of Health and Human Services Office of Inspector General and the Illinois State Police Medicaid Fraud Control Bureau. The case is being prosecuted by Assistant United States Attorney Liam Coonan.
Pueblo Man Sentenced to 71 Months in Federal Prison for Tax Evasion, Bank Fraud and Interfering with IRS LawsRead the Press Release
DENVER – Michael Destry Williams, age 49, of Pueblo, Colorado, was sentenced yesterday by U.S. District Court Judge Christine M. Arguello to serve 71 months in federal prison for tax evasion, currency structuring, bank fraud, and interfering with the IRS’s administration of the internal revenue laws, the U.S. Attorney’s Office, Internal Revenue Service - Criminal Investigation (IRS CI) and Treasury Inspector General for Tax Administration (TIGTA) announced. Williams was also ordered to serve a five year term of supervised release, following his prison sentence, and to pay a $10,000 fine and $60,597.80 in restitution to the IRS. Williams has remained in federal custody in this case since his arrest on June 26, 2013 and will ultimately be designated to a Bureau of Prisons facility to complete service of his imprisonment term.
Williams was found guilty by a jury on November 5, 2013 following a 6 day trial before Judge Arguello. Williams was indicted by federal grand jury in Denver on March 22, 2012, followed by a superseding indictment on July 26, 2012.
According to the indictment, superseding indictment and evidence presented at trial, Williams was self-employed as a general contractor focusing primarily on residential construction projects, including roofing, remodeling and the repair and restoration of residential structures sustaining fire and water related damage. He was also self-employed as a real estate investor involved in the purchase, renovation and resale (commonly known, as “fixing and flipping”) of residential properties. Williams operated under the name of Greenview Construction, Inc., a Colorado corporation.
From April 2005 and continuing through January 2008, Williams willfully attempted to evade a substantial amount of income tax and self-employment tax due and owing by him to the United States for calendar years 2005, 2006 and 2007. He failed to file income tax returns and failed to pay to the IRS income tax and self-employment tax. To conceal his income, Williams established and used trusts as part of his tax evasion scheme and structured over $90,000 in deposited funds from July 2008 through September 2008.
In November of 2009, Williams attempted to defraud a Colorado financial institution by depositing worthless fabricated United States Treasury checks for his own benefit. There were two false treasury checks totaling $55,000 payable to Greenview Construction. In February of 2010, there was a third fabricated United States Treasury check in the amount of $250,000 that Williams tendered to the El Paso County Court to settle a criminal misdemeanor case for which he had been sentenced to a jail term.
From October 2008 through December 2010, Williams mailed numerous frivolous correspondences to the Secretary of the Treasury as well as various IRS offices in an attempt to obstruct and impede the administration of the internal revenue laws. The obstructive efforts included attempts by Williams to target State of Colorado judicial officers who had presided over three separate state cases in which Williams was named as a defendant. In particular, Williams sent IRS criminal referrals accusing one of these judicial officers and the Clerk of the El Paso County District Court with committing criminal tax and related offenses.
“As part of his wholesale disregard for his legal obligations, Mr. Williams decided simply to pocket money due to the IRS for both his income tax and his self-employment tax,” said U.S. Attorney John Walsh. “Because of his criminal actions, the defendant is going to spend nearly 6 years in federal prison.”
“This sentencing is a reminder there are serious and significant consequences for those who commit tax fraud. IRS CI will continue their pursuit of those who attempt to defraud and intentionally interfere with America's tax system,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
“Congratulations all around for the excellent work on this case,” said J. Russell George, the Treasury Inspector General for Tax Administration. “This is another example of outstanding collaboration between TIGTA and the Internal Revenue Service’s Criminal Investigation Division to stop fraudulent schemes in their tracks. Those who engage in such schemes will be investigated and referred for prosecution. Thanks to the work of Mr. Harmon and his entire office, such individuals are prosecuted to the fullest extent of the law.”
This case was investigated by agents with IRS Criminal Investigation (IRS CI) and U.S. Treasury Inspector General for Tax Administration (TIGTA). The case was prosecuted by Assistant U.S. Attorney Kenneth Harmon with assistance from the Department of Justice Tax Division Trial Attorney Kevin Sweeney.
Provider of Services for Special Needs Preschool Students Pleads Guilty in Manhattan Federal Court to Fraud ChargeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that CHEON PARK, owner and executive director of Bilingual SEIT, a government-funded provider of special education services and preschool programs to New York City preschool children, pled guilty today for his role in defrauding the federal, New York State, and New York City governments of millions of dollars. PARK pled guilty in Manhattan federal court before the U.S. District Judge J. Paul Oetken.
Manhattan U.S. Attorney Preet Bharara said: “Cheon Park has admitted his role in a criminal scheme to enrich himself by taking federal, state, and city funds intended for special needs children and diverting them for his own personal use. With today’s guilty plea, he now stands convicted of a federal crime and faces the prospect of a substantial prison term.”
According to the Information, an earlier Criminal Complaint, and statements made at court proceedings:
Between 2005 and 2012, PARK deliberately inflated both the amount of compensation Bilingual SEIT paid certain of its employees and contractors, and the type of work performed by certain employees on annual certified consolidated fiscal reports (“CFRs”) and financial statements submitted to the New York State Education Department (“NYSED”) and the New York City Department of Education (“NYCDOE”).
PARK owned and operated Bilingual SEIT from at least 2005 to 2012. During that time, Bilingual SEIT had a contract with the NYCDOE to provide publicly funded special education services and preschool programs to New York City schoolchildren aged three to five with physical, emotional, and/or developmental disabilities. Specifically, Bilingual SEIT received funding to provide: (1) special education itinerant teacher, commonly referred to as SEIT, services; (2) special education classes in a center-based setting for preschool students with special needs; (3) individual evaluations for preschool students with disabilities; and (4) physical, occupational, and/or speech therapy for preschool students who qualified for such services. As of September 2012, Bilingual SEIT operated out of five locations in Manhattan, Queens, and Brooklyn.
During the seven-year period that Bilingual SEIT was under contract with the NYCDOE, it claimed reimbursement for and received approximately $94.5 million in federal, New York State, and New York City funding to provide the services described above. In order to receive such money, on behalf of Bilingual SEIT, PARK was required to file a CFR supported by audited financial statements with the NYSED. The CFR and audited financial statements represented the costs that Bilingual SEIT had incurred the previous year and the justification for those costs, and included compensation Bilingual SEIT purported to pay its employees and contractors. Each year, PARK signed the certification pages for the CFRs filed with the NYSED, which relied on the CFR and audited financial statements in determining the amount of public funds to pay Bilingual SEIT per student for the services Bilingual SEIT provided to New York City preschool students.
Beginning in approximately June 2011, the New York State Comptroller’s office (the “Comptroller”) conducted an audit of Bilingual SEIT to determine whether the costs reported by Bilingual SEIT on the CFRs for the years July 2007 through 2009 were properly calculated, justified, and allowable under guidance issued by the NYSED. In July 2012, the Comptroller issued a report that concluded that nearly $1.5 million of the costs that PARK certified for the two-year audit period should have been disallowed, including money paid to 26 employees whose time and attendance could not be substantiated. As a result of the Comptroller’s report, the NYCDOE cancelled Bilingual SEIT’s classes and declined to renew its contract with Bilingual SEIT.
In fact, PARK engaged in several schemes designed to inflate the costs Bilingual SEIT represented it incurred, resulting in more public money for Bilingual SEIT, much of which, as set forth below, was kicked back to PARK. PARK fraudulently received funds from New York State and New York City to pay multiple individuals who performed little or no work for Bilingual SEIT. At PARK’s request and direction, these individuals then kicked back as much as 50% of the salary they fraudulently received from Bilingual SEIT to PARK. PARK also fraudulently received funds from New York State and New York City to deliberately overpay other individuals who worked for Bilingual SEIT. At PARK’s request and direction, these individuals also kicked back a portion of the overpayment to PARK on a regular basis.
Further, in addition to receiving kickbacks, PARK used Bilingual SEIT funds for his personal benefit in other ways. PARK arranged for Bilingual SEIT to pay his ex-wife and ex-sister-in-law for work they did not perform, and also arranged for Bilingual SEIT to pay for tutoring for PARK’s children and for a Bilingual SEIT employee to clean PARK’s home twice a week.
PARK, 46, of Manhasset, New York, pled guilty to one count of mail fraud, which carries a maximum term of 20 years in prison. He is scheduled to be sentenced by Judge Oetken on July 29, 2014, at 2:00 p.m. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the Office of the State Comptroller, the Special Commissioner of Investigation for New York City’s Department of Education, the Office of Inspector General for the United States Department of Education. He also thanked the Queens County District Attorney’s Office for its assistance.
This case is being prosecuted by the Office’s Public Corruption Unit. Assistant United States Attorneys Paul Krieger, Rebecca Ricigliano, and Martin Bell are in charge of the prosecution.
U.S. v. Cheon Park Information
Pittsburgh Man Pleads Guilty in Heroin Trafficking ConspiracyRead the Press Release
PITTSBURGH – On March 6, Terrious Harper was convicted of conspiring to distribute and possess with intent to distribute in excess of 100 grams of heroin, United States Attorney David J. Hickton announced today.
Harper, 29, of Pittsburgh, Pa., pled guilty before United States District Judge Nora Barry Fischer. Judge Fischer scheduled sentencing to occur on July 29, 2014, at 9:30 a.m.
In support of the guilty plea, the Court was informed that, during 2012 and up to May 2013, Harper was supplied with bricks of heroin on credit by members of a drug-trafficking organization based out of Pittsburgh’s Larimer neighborhood after the members of the organization received the heroin from their out-of-state sources of supply. Over the course of that time period, Harper received hundreds of bricks of heroin and then distributed them in the Pittsburgh area and paid those who supplied him back.
The law provides for a maximum total sentence of at least five and up to 40 years in prison, a fine of up to $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Drug Enforcement Administration in Pittsburgh and New York, the Pennsylvania State Police, the Pittsburgh Bureau of Police, the Allegheny County Police Department, the Pennsylvania Attorney General's Office, the Wilkins Township Police Department, the East Pittsburgh Police Department, the New York Police Department, the Blair County District Attorney's Office, and the Allegheny County District Attorney's Office conducted the investigation leading to the conviction in this case.
Owner of Tax Preparation Business in Washington, D.C., Indicted for Conspiring to Defraud the Internal Revenue Service and Preparing False Individual Income Tax ReturnsRead the Press Release
On Feb. 26, 2014, a federal grand jury sitting in the District of Columbia returned a 17 count indictment charging Sherri Davis, previous owner and operator of 2FT Fast Facts Tax Service, a tax return preparation business located in Washington, D.C., for conspiring to defraud the Internal Revenue Service (IRS), aiding and assisting in the preparation of false individual income tax returns and filing false individual income tax returns, the Justice Department and IRS announced following the unsealing of Davis’ indictment today.
According to the indictment, from 2006 through 2011, Davis conspired with others to defraud the IRS by preparing and filing false income tax returns that contained fraudulent deductions, expenses, losses and credits to which 2FT clients were not entitled, thereby generating fraudulent income tax refunds. Davis instructed co-conspirator LaDonna Davis to falsify tax documents for 2FT clients in order to reduce their taxable income and to get a larger refund than what the client was entitled to receive. Davis also provided 2FT clients with false documentation to support fraudulently claimed charitable contributions and mileage expenses on their individual income tax returns for use in a potential or pending audit.
The indictment also alleges that Davis filed false 2007 through 2009 individual income tax returns for herself, which underreported 2FT’s gross receipts and falsely claimed business losses for 2FT. Davis faces a statutory maximum potential sentence of 53 years in prison and a fine of up to $4,250,000.
The case is being prosecuted by Trial Attorneys Jessica Moran and Tiwana Fleming of the Justice Department’s Tax Division. Additional information about the division and its enforcement efforts may be found at its website .
O.C. Woman Sentenced to over 3 Years in Prison for Defrauding NunsRead the Press Release
SANTA ANA, California – An Irvine woman was sentenced today to 37 months in federal prison for defrauding a group of Roman Catholic Sisters out of $285,000, which she misappropriated and spent for her own use after promising to use the money to help the nuns purchase a retirement home.
Linda Rose Gagnon, 59, was sentenced by United States District Judge Andrew J. Guilford, who presided over Gagnon’s trial last year.
Gagnon was found guilty of three counts of wire fraud in November for defrauding the U.S. Province of the Religious of Jesus & Mary (RJM), an order of nuns devoted to educational and charitable work. The evidence presented at trial showed that Gagnon promised to use RJM funds to purchase a retirement home for the Sisters. Instead, Gagnon used the funds to pay for her personal expenses and to fund the unprofitable operations of her real estate finance company – burning through the entire $285,000 in only 64 days. Gagnon used the funds to pay for personal expenses, including travel, lingerie, groceries, manicures, hair dressing, restaurants, lease payments for an Audi TT sports car, and valet pet-sitting services for her dog.
In addition to the prison term, which Gagnon was ordered to begin serving by June 13, Judge Guilford said he would order the defendant to pay full restitution to the victim nuns. The amount of restitution will include at least the $285,000 that Gagnon stole from RJM, but the court may order her to pay RJM for other related losses.
This case was investigated by the FBI.
Release No. 14-030
O'Fallon Man Pleads Guilty to Fraud ConspiracyRead the Press Release
St. Louis, MO – JASON RAUSCHELBACH pled guilty to charges involving his conspiracy to defraud the United States and several banks through his business, The Mortgage Store, Inc., in 2008.
According to court documents, Rauschelbach was the CEO of The Mortgage Store, Inc. (TMS) and the president of Title America. By 2008, TMS was a major mortgage brokering business with officers in four states and hundreds of employees. The main offices were in Westport Plaza and Wentzville. The businesses were operating at a financial deficit in 2008. TMS incurred over $600,000 in federal employment (including withholding) tax liabilities in the first three quarters of 2008 that were not paid over to the United States. There were not sufficient funds available to fund the disbursements from TMS and, in addition, to meet all of the expenses incurred by TMS, including the delinquent employment tax liabilities. In order to meet certain expenses and, at the same time, conceal the absence of adequate funds, Rauschelbach and others at TMS caused insufficient funds checks drawn on the checking accounts of both TMS and Title America to be deposited between those accounts in such a way that the "float" concealed the true balances of each account. The accounts were at Enterprise Bank in Clayton and at the First Bank of the Lake in Osage Beach, Missouri. The TMS account had a negative balance of approximately $850,000 in June 2008, when the banks stopped accepting the floated checks.
In order to maintain its status as a loan correspondent for loans guaranteed by the Federal Housing Administration, TMS was required to maintain certain net worth balances that would be audited by a HUD authorized private firm and submitted to HUD by TMS. In June 2008, Rauschelbach and others at TMS falsified information concerning the net worth of TMS to the auditor for submission to HUD.
Additionally, in June and July 2008, TMS incurred liabilities for a 401k retirement plan in effect for its employees, as well as liabilities for the health and dental insurance plans offered to its employees. The amounts withheld from the employees’ pay checks were not paid over as required by law.
Finally, Rauschelbach received substantial distributions from TMS and Title America in 2008 despite the federal employment tax delinquencies and other unpaid liabilities, as well as the artificial balances being maintained in the TMS and Title America checking accounts. In addition, he and others at TMS directed that TMS funds be paid on loans on properties at Tan-Tar-A Resorts in the Lake of the Ozarks, and for a ranch property in Breckenridge, Colorado. He was a partial owner of those properties
Rauschelbach, of O’Fallon, Missouri, pled guilty to one felony count of conspiracy before United States District Judge Henry E. Autrey. Sentencing has been set for June 2, 2014.
He now faces 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 FBI, IRS Criminal Investigation and the Inspector General Offices of HUD and the Department of Labor. Assistant United States Attorney James E. Crowe, Jr., is handling the case for the U.S. Attorney's Office.
Member of the Granados-Hernandez Sex Trafficking Organization, Eleuterio Granados-Hernandez, Sentenced to 22 Years in PrisonRead the Press Release
Earlier today, Eleuterio Granados-Hernandez was sentenced before Judge Kiyo A. Matsumoto in U.S. District Court in Brooklyn, New York, to 22 years’ imprisonment, to be followed by five years of supervised release, for the sex trafficking of five victims and restitution in the amount of approximately $3 million for three victims.
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 preyed on young women with the intent to force them into a degrading life of sexual slavery. He targeted the women, disregarding their dignity, solely to line his pockets in proceeds from the prostitution business,” stated United States Attorney Lynch. “This sentence sends a message to other would-be traffickers that we are committed to eradicating the sex trafficking of young girls.” Ms. Lynch extended her grateful appreciation to the organizations that provided services and advocacy to the victims in this case, including Sanctuary for Families, Safe Horizon, My Sister’s Place and the law firm of King and Spalding.
On August 1, 2012, Granados-Hernandez pled guilty to a superseding information charging that between October 2000 and April 2011, he smuggled five victims, including one minor, from Mexico illegally into the United States and forced each of them to engage in prostitution. Granados-Hernandez, who kept the prostitution proceeds earned by the victims, engaged in a pattern of abuse for over a decade.
According to court documents, Granados-Hernandez smuggled each of the victims with the intent to force then into prostitution. For example, soon after he smuggled the victim identified as Jane Doe #2 to New York, Granados-Hernandez insisted that she work as a prostitute where she provided sexual services for as many as 15 to 18 clients per day.
Similarly, in 2003, Granados-Hernandez smuggled the victim identified as Jane Doe #3 into the United States and soon after forced her into prostitution. Jane Doe #3 worked for Granados-Hernandez for approximately six years and during that period, he beat her and threatened her frequently.
In 2009, Granados-Hernandez met the 17 year-old victim known as Jane Doe #5 in Puebla, Mexico and smuggled her to New York shortly after she turned 18 years old. Three months after her arrival in New York, Granados-Hernandez insisted that Jane Doe #5 work as a prostitute. When Jane Doe #5 refused, Granados-Hernandez physically assaulted her several times. Fearing more violence, Jane Doe #5 worked for Granados-Hernandez as a prostitute until 2010.
In 2005, Granados-Hernandez became romantically involved with the victim identified as Jane Doe #11 when she was 15 years old. Soon after their initial meeting, Granados-Hernandez smuggled her into the United States. Once in the United States, Granados-Hernandez told Jane Doe #11 that she had to work as a prostitute to repay the smuggling debt. Although she initially refused, Jane Doe #11, age 16 at the time, feared physical abuse and relented to working as a prostitute for Granados-Hernandez.
At the sentencing, Jane Doe #11 spoke about her victimization by Granados-Hernandez over a four-year period. She stated that, “When I was just 15 years old he took advantage of my innocence and lied to me so I could be under his control. He promised me a happy life next to him but instead I lived the worst nightmare.” Jane Doe #11 further stated that, “Granados-Hernandez never cared about how much I suffered. To him, I was just an object that brought him money.”
As set forth in court filings, Granados-Hernandez’s brother Samuel Granados-Hernandez and his cousins, Angel Cortez-Granados and Antonio Lira-Robles, 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. Cortez-Granados, Samuel Granados-Hernandez and Lira-Robles all pleaded guilty to sex trafficking. In September 2013, Cortez-Granados was sentenced to 15 years in prison, in a separate case. At the time of their sentencings, Samuel Granados-Hernandez and Lira-Robles likewise face a 15-year mandatory minimum sentence.
The government’s case was prosecuted by Assistant United States Attorney Soumya Dayananda.
The Defendant:
ELEUTERIO GRANADOS-HERNANDEZ
Age: 31
Mexico
E.D.N.Y. Docket No. CR-11-297 (S-5) (KAM)
Martial Arts Instructor Will Serve 90 Years in Federal Prison for Production of Child PornographyRead the Press Release
Follow @SDILNewsChristopher M. Horton, 21, of Highland, Illinois was sentenced today in the U.S. District Court to 90 years in prison for six counts of Production of Child Pornography, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced. Horton was also ordered to pay $3,250 in restitution to the victims of his offenses and a $600 special assessment. If he is ever released from prison, he will be on federal supervised release for the remainder of his life.
“While there is little comfort for the instant victims, it is assuring to know that such a vicious predator will never again walk free in Southern Illinois.” said United States Attorney Wigginton.
Employed as a martial arts instructor at a studio in Belleville, Illinois, Horton sexually abused three students, ages 6, 6, and 10 years, and video recorded these acts of abuse using his cell phone. Horton also attempted to engage a fourth minor, who was 7 years old, in sexually explicit conduct to produce a recording of that conduct. Approximately 57 video files containing child pornography were recovered from Horton’s cellular phone, which were created by Horton between the dates of May 1, 2012, and February 9, 2013. During an interview with law enforcement, Horton confessed to sexually abusing the minors and to having produced video recordings of the abuse.
In all, evidence showed that Horton preyed upon children whenever given the opportunity, including at the karate studio where he worked, private residences, and at his home. United States Attorney Wigginton noted, “Horton demonstrated brazen arrogance in his commission of the sexual abuse of these children, committing his acts while other adults were in the same building and often just on the other side of a closed door.” Two electronic entries, located in the “Notes” folder of Horton’s iPhone, found during the forensic examination, demonstrated the calculated and premeditated manner in which Horton targeted each of his victims. In the two entries, Horton meticulously scripted what he would say to his young victims to solicit them, groom them and to keep them silent.
In pronouncing the sentence, Chief United States District Judge David R. Herndon commented on the shocking and serious nature of the offenses committed by Horton: “Probably in my 15 years as a federal judge this is the most serious and heinous case that I have seen. . . . The dangerousness and deviousness of the defendant’s acts are off the charts.”
The case was investigated by the Madison County Sheriff’s Department, the Federal Bureau of Investigation’s Metro East Cyber Crimes and Analysis Task Force, the Highland, Illinois, Police Department and the Belleville, Illinois, Police Department. Horton is also charged with several counts of Predatory Criminal Sexual Assault and Aggravated Criminal Sexual Abuse in the Circuit Courts of Madison and St. Clair Counties. Those charges are still pending. The case was prosecuted by Assistant United States Attorney Ali Summers.
Manhattan U.S. Attorney Announces Medicaid Fraud Charges Against Postal Employee and SpouseRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Thomas O’Donnell, the Special Agent in Charge of the New York Office of the United States Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), today announced charges against ALEXANDER KNOBEL, an employee of the United States Postal Service the (“Postal Service”), and his spouse, YANA MALKINA, for Medicaid fraud. The Complaint alleges that KNOBEL and MALKINA repeatedly submitted fraudulent documents to obtain and continue to receive Medicaid for themselves and their family, defrauding the Medicaid Program of nearly $100,000, and causing resources designed for low-income individuals to be diverted to themselves. The defendants were arrested this morning and are expected to be presented today before U.S. Magistrate Judge James L. Cott.
Manhattan U.S. Attorney Preet Bharara said: “Defendants like Alexander Knobel, a U.S. Postal Service employee, and his wife, Yana Malkina, who allegedly manipulate and exploit the Medicaid system, divert valuable resources from those who truly need the assistance. Such allegedly criminal conduct is particularly troubling when committed by an employee of the federal government.”
HHS-OIG Special Agent in Charge Thomas O’Donnell said: “Scammers who corruptly take advantage of the Medicaid system and deprive poor and vulnerable beneficiaries of the care and support they need, take note: the Office of Inspector General, New York Regional Office will continue to work aggressively to eliminate such schemes - and those who perpetrate them - from our health care system.”
According to the allegations in the Complaint unsealed today in Manhattan federal court:
Medicaid is a largely federally-funded program in the United States designed to provide low-income families with affordable health care. In New York State, the Department of Health administers the Medicaid Program, and the New York City Human Resources Administration oversees the program and processes applications in New York City.
In late 2008, KNOBEL, who had been employed by the Postal Service since the spring of 2006, and MALKINA, his wife, who had been employed as a home attendant for several years, submitted an application for Medicaid on behalf of themselves and their children in which they falsely stated that no adult in the household was employed. Based on this fraudulent application, KNOBEL, MALKINA, and their children were approved to receive Medicaid. Each year thereafter, KNOBEL and/or MALKINA submitted renewals to continue to receive Medicaid for themselves and their family. Each annual renewal form, signed by KNOBEL and/or MALINKA, contained multiple false statements, including with respect to KNOBEL’s employment, MALKINA’s employment and income, and whether KNOBEL and MALKINA were able to obtain health insurance through their employers. Further, in summer 2010, KNOBEL and MALKINA purchased a home for $445,000, but in multiple subsequent renewals, KNOBEL and MALKINA falsely stated that they did not own their home.
KNOBEL, 37, and MALKINA, 37, both of Brooklyn, New York, are each charged with one count of conspiracy to commit mail fraud and health care fraud, one count of mail fraud, and one count of health care fraud, which carry maximum sentences of 20 years, 20 years, and 10 years in prison, respectively. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of HHS-OIG, and thanked the United States Postal Service, Office of the Inspector General, and the New York City Human Resources Administration for their assistance in this investigation, which he noted is ongoing.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorney Daniel C. Richenthal is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Alexander Knobel and Yana Malkina Complaint
Man Admits Stalking Former Federal Witness Against HimRead the Press Release
Faces New Jail Term of Up To 5 Years
SYRACUSE, NEW YORK – Paul Raymond Ross, 59, of Endwell, NY pled guilty today in United States District Court before the Honorable Thomas J. McAvoy to Interstate Stalking of a former witness against him in a previous federal prosecution – announced United States Attorney Richard S. Hartunian. In 2008 Ross pled guilty to making extortionate demands for $20,000 from a victim who has been identified publically by the initials “K.O.D.” The victim in that previous case provided assistance to the Federal Bureau of Investigation, including by producing copies of threatening communication received from the defendant. As a result of his plea in that earlier case, Ross was sentenced to 27 months in prison, followed by 3 years of supervised release. Upon completion of his sentence, Ross immediately began to stalk KOD electronically. That is, Ross began to send out thousands of electronic messages to the victim’s clients, her employees, the media, and, via the mail, to her in any effort to harass, injure, and cause her severe emotional distress and financial damage. Ross posted threatening photographs and made false statements about her.
On October 31, 2013, Ross was indicted by a federal grand jury for Retaliation Against a Witness and Interstate Stalking. He is being held in pretrial detention. His guilty plea today subjects him to a maximum possible penalty of 5 years in jail, a $250,000 fine, and 3 years of supervised release. Sentencing has been set for June 4, 2014 at 9:30 AM in Binghamton, NY.
This matter was investigated by Special Agents of the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Craig A. Benedict, who may be reached at 315-448-0672 with questions about the case.
Lubbock Man Sentenced to 210 Months in Federal Prison for Producing Child PornographyRead the Press Release
LUBBOCK, Texas — Nicholas Lee Blair, 31, was sentenced today by U.S. District Judge Sam R. Cummings to 210 months in federal prison and a lifetime of supervised release, following his guilty plea in November 2013 to an indictment charging one count of production of child pornography. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the documents filed in the case, on or about December 25, 2012, when he resided in Lubbock, Texas, Blair persuaded a minor female, “Jane Doe,” to engage in sexually explicit conduct while he used his cellphone camera, aimed at her while she was in the bathroom of his home, to record a video of her.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Lubbock Police Department and the FBI investigated. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Local Real Estate Business Owner Pleads Guilty to Federal Fraud ChargesRead the Press Release
St. Louis, MO - RICHARD SADDLER owned Omicron Capital LLC, a company in the business of assisting customers in refinancing commercial and real estate loans.
According to court documents and statements made in court at the time of his guilty plea hearing, between Jan. 1, 2010, and March 31, 2013, Saddler accepted roughly $350,000 from at least seven customers based upon his false representations that the money would be used for down payments or appraisals on commercial real estate refinancing. Instead, Saddler actually used the money to pay the mortgage on his home, which was in foreclosure, as well as airline tickets, meals and other personal expenses.
Saddler, St. Louis County, pled guilty to three felony counts of wire fraud before United States District Judge Carol E. Jackson. Sentencing has been set for May 30, 2014.
Each count of wire fraud carries a maximum penalty of 20 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 Federal Bureau of Investigation. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.
Local Man Sentenced Involving Wire Fraud SchemeRead the Press Release
St. Louis, MO - SEAN HOLLAND was sentenced to 14 months in prison involving a wire fraud scheme whereby he embezzled money from a condominium association for which he served as bookkeeper.
Holland worked as a bookkeeper for Maryland House Condominium in St. Louis between 2008 and 2010 and made $64,000 of unauthorized electronic transfers of funds to his personal bank account and concealed the transfers from the management of the association.
Holland, St. Louis, pled guilty in September and appeared today for sentencing before U.S. District Judge Catherine D. Perry.
The case was investigated by the St. Louis Metropolitan Police Department, the U.S. Secret Service and the St. Louis Circuit Attorney’s Office. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
Local 17 President and Business Manager Convicted of Racketeering Conspiracy, Conspiracy to Commit Extortion and Attempted ExtortionRead the Press Release
BUFFALO, N.Y. B The United States Attorney's Office announced today that following a nine week trial, a federal jury has convicted Mark N. Kirsch, 54, President and Business Manager of Operating Engineers Local 17, based in Hamburg, N.Y., of conspiracy to commit racketeering, conspiracy to commit extortion, and attempted extortion. The charges carry a maximum penalty of 20 years in prison, a $250,000 fine, or both. In addition, the defendant=s interest in Local 17, including his management position within the Union, is subject to forfeiture.
According to Assistant U.S. Attorneys Anthony M. Bruce and Edward H. White, who, along with U.S. Department of Justice Trial Attorney Robert S. Tully, handled the prosecution of the case, defendant Kirsch, from at least January 1997 to December 2007, participated in a criminal enterprise with the objective of extorting property from various construction firms throughout Western New York. The objective of the Local 17 criminal enterprise was to obtain several types of property through extortion, including: (1) the right of various businesses to make business decisions free from outside pressure; (2) the wages and benefits to be paid by various businesses for unwanted, unnecessary, and superfluous labor; (3) the jobs and associated wages and benefits of employees of various businesses at construction sites in the Western District of New York; and (4) the property of construction contractors consisting of wages and benefits to be paid pursuant to labor contracts with Local 17. Among the unlawful means the defendant Kirsch used to secure these objectives were actual violence, threats, intimidation, sabotage of property, and threats and attempts to interrupt and delay construction projects in order to drive up costs to the contractors and thus cause economic harm.
“Today’s verdict confirms that for over 10 years, former IUOE Local 17 President and Business Manager, Mark N. Kirsch, operated a criminal enterprise. Kirsch engaged in a decade-long Racketeering Conspiracy. He conspired to extort employers and employees of Western New York of jobs, wages, and benefits through the use of physical violence and the destruction of property. The Office of Inspector General will continue to work with the United States Attorney’s Office and our other law enforcement partners to investigate criminal allegations of wrongdoing by union officials and union members," stated Cheryl Garcia, Acting Special Agent-in-Charge of the New York Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
Retired Local 17 Business Representative Gerald E. Bove, member Michael J. Caggiano, member Kenneth Edbauer, and Business Representative Thomas Freedenberg, were acquitted of similar charges.
The verdict is the result of an investigation by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent-in-Charge of the New York Regional Office, the Federal Bureau of Investigation, and the New York State Police, under the direction of Major Michael Cerretto.Leader of Identity Theft Ring Sentenced <br /> for Stealing More Than 600 Identities <br /> and Causing More Than $1 Million in LossesRead the Press Release
The leader of an identity theft ring that stole more than 600 identities from U.S. government employees and others was sentenced today to serve 12 years in prison, followed by three years of supervised release.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting United States Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Kathy A. Michalko of the United States Secret Service’s Washington Field Office and Chief Edwin C. Roessler Jr. of the Fairfax County Police Department made the announcement.
Jenaro Blalock, 31, of Clinton, Md., pleaded guilty on Oct. 29, 2013, to access device fraud and aggravated identity theft and was sentenced by United States District Judge Claude M. Hilton. Blalock was also ordered to pay full restitution to victims.
According to court documents, between June 2011 and July 2013, Blalock and co-leader Christopher Bush recruited women with access to identity information through their employers to steal more than 600 identities, primarily belonging to employees of the U.S. Department of State, the U.S. Department of Defense and the U.S. Agency for International Development. Blalock provided blank driver’s licenses so that Bush could make fraudulent driver’s licenses bearing the victims’ real names, addresses and dates of birth. Blalock also made fraudulent credit cards bearing victims’ names. Members of the identity theft ring, including Blalock, used those fraudulent driver’s licenses and victims’ social security numbers to open instant credit lines at retailers and obtain rental cars, which were frequently sold on the black market with altered vehicle identification numbers. According to information provided at sentencing, the identity theft ring caused victim losses of between $1 million and $2.5 million.
On Jan. 17, 2014, Bush was sentenced to serve 10 years in prison for his role in the scheme.
This case was investigated by the United States Secret Service and the Fairfax County Police Department, with assistance from the City of Fairfax Police Department, Prince George’s County Washington Area Vehicle Enforcement, Prince George’s County Financial Crimes Section, the Metropolitan Washington Airport Authority, the Delaware State Police, the Maryland State Police, the D.C. Metropolitan Police Department, the U.S. Postal Inspection Service, the Office of the Inspector General of the U.S. Department of Agriculture and the Office of the Inspector General of the U.S. Department of State .
The case was prosecuted by Trial Attorney Peter Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia.Leader of Identity Theft Ring Targeting Government Employees and Others Sentenced to 12 YearsRead the Press Release
Defendants stole over 600 identities and caused more than $1 million in victim losses
ALEXANDRIA, Va. – Jenaro Blalock, 31, of Clinton, Md., was sentenced today to 12 years in prison, followed by three years of supervised release, for access device fraud and aggravated identity theft. Blalock also was ordered to pay full restitution to the victims.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Kathy A. Michalko, Special Agent in Charge for the United States Secret Service’s Washington Field Office; and Colonel Edwin C. Roessler, Jr., Fairfax County Chief of Police, made the announcement after sentencing by United States District Judge Claude M. Hilton.
Blalock pleaded guilty on Oct. 29, 2013.
According to court documents, between June 2011 and July 2013, Blalock and co-leader Christopher Bush recruited women with access to identity information through their employers to steal more than 600 identities, primarily belonging to employees of the U.S. Department of State, the U.S. Department of Defense and the U.S. Agency for International Development. Blalock provided blank driver’s licenses so that Bush could make fraudulent driver’s licenses bearing the victims’ real names, addresses and dates of birth. Blalock also made fraudulent credit cards bearing victims’ names. Members of the identity theft ring, including Blalock, used those fraudulent driver’s licenses and victims’ social security numbers to open instant credit lines at retailers and obtain rental cars, which were frequently sold on the black market with altered vehicle identification numbers. The identity theft ring caused victim losses of between $1 million and $2.5 million.
On Jan. 17, 2014, co-leader Bush was sentenced to 10 years in prison.
This case was investigated by the United States Secret Service and the Fairfax County Police Department, with assistance from the City of Fairfax Police Department, Prince George’s County Washington Area Vehicle Enforcement, Prince George’s County Financial Crimes Section, the Metropolitan Washington Airport Authority, the Delaware State Police, the Maryland State Police, the D.C. Metropolitan Police Department, the U.S. Postal Inspection Service, the Office of the Inspector General of the U.S. Department of Agriculture, and the Office of the Inspector General of the U.S. Department of State. Assistant United States Attorney Lindsay Kelly and Special Assistant United States Attorney Peter Roman of the Department of Justice’s Computer Crimes and Intellectual Property Section prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Lakeland Man Convicted of Charges Related to Armed RobberyRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces that a federal jury today found Kristian Keron Green (23, Lakeland) guilty of conspiracy to interfere with interstate commerce by robbery, interference with interstate commerce by robbery, and using and carrying a firearm during and in relation to a crime of violence. Green faces a maximum penalty of 20 years in federal prison on each of the robbery counts and a mandatory minimum of 10 years on the firearm charge, which must run consecutive to the robbery counts. His sentencing hearing will be scheduled at a later date. Green was indicted on March 5, 2013.
According to the evidence presented at trial, early in the morning of December 4, 2010, Green and Joshua Antoin Chatmon robbed a Circle K convenience store, in Lakeland, at gunpoint. During the robbery, Chatmon held a firearm, which was discharged, striking the clerk. Green and Chatmon took $40 from the store.
On July 31, 2013, Chatmon pleaded guilty for his role in the crime. His sentencing hearing is scheduled for March 25, 2014, at 9:00 a.m., before U.S. District Judge Mary Scriven.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Polk County Sheriff’s Office. It is being prosecuted by Assistant United States Attorneys Joseph W. Swanson and James A. Muench.
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 Julie Leon, 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 also a part of ATF’s Frontline strategy to reduce violent crime and improve the quality of life in communities where law enforcement efforts are focused.
Justice Department Sues to Stop California Tax Return PreparersRead the Press Release
The United States filed a civil complaint asking a federal court in Fresno, Calif., to enjoin Ken Mendoza and Alice Mendoza from preparing federal tax returns for others, the Justice Department announced today. The complaint alleges that the Mendozas frequently prepare tax returns for individuals claiming refunds from the federal government that are not deserved. According to the complaint, since 2010, the Mendozas have prepared over 600 tax returns for individuals in the Fresno area.
According to the complaint, the Mendozas improperly understate their customers’ federal tax liabilities by fabricating business expenses, claiming false or inflated credits, particularly educational credits, and deducting customers’ personal expenses that are not legally deductible. In total, the complaint alleges that the loss to the U.S. Treasury from the Mendozas’ activities could be as much as $2.8 million for tax years 2010 through 2011.
In addition, the complaint seeks to enjoin anyone acting in concert with the Mendozas from preparing or filing federal tax returns; to prohibit the Mendozas from requesting or directing the preparation of federal tax returns for others; to require the Mendozas, within 30 days of entry of an injunction issued in this case, to contact all persons for whom they prepared a federal tax return since Jan. 1, 2008, and to inform all such persons of the permanent injunction entered against them; to require the Mendozas to provide a list of all such persons to the United States; to allow the United States to monitor the Mendozas’s compliance with any such injunction; and to request that the court retain jurisdiction over this case to enforce any injunction entered against the Mendozas.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013 . The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website . An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page . If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Ken Mendoza, etc., et al.
Complaint for Permanent Injunction and Other Equitable ReliefJury Convicts Doctor, Pharmacist, Marketer in Health Care Fraud SchemeRead the Press Release
A doctor, a pharmacist and a marketer were convicted today in federal court in Detroit for health care fraud and controlled substance distribution, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge James V. Allen, Drug Enforcement Administration, Detroit Division, Paul R. Abbate, Special Agent in Charge, Federal Bureau of Investigation, and Lamont Pugh, III, Special Agent in Charge, Department of Health and Human Services Office of Inspector General ("HHS-OIG").
The jury returned guilty verdicts against Dr. Carl Fowler, M.D., 61, of West Bloomfield, pharmacist Mukesh Khunt, 34, of Toronto, Ontario, Canada, and Michael Thoran of Detroit. Defendants Fowler and Thoran were convicted on all three of the counts with which they were charged, conspiracies to commit health care fraud, to distribute controlled substances, and to pay or receive health care kickbacks. Defendant Khunt was convicted of six of the seven counts with which he was charged, health care fraud conspiracy, conspiracy to distribute controlled substances, and two counts health care fraud and two counts of controlled substances distribution. The jury was unable to reach a verdict on the seventh count charging a conspiracy to pay or receive health care kickbacks.
McQuade stated, “Law enforcement investigators in metro-Detroit are aggressively investigating health care fraud and detecting abuses by doctors and pharmacists. We hope that prosecutions like this one will deter medical professionals from stealing taxpayer funds intended for health care.”
The evidence presented during the three-week trial demonstrated that, from approximately January 2006 through August 2011, Canton Pharmacist Babubhai Patel owned and controlled 26 pharmacies (termed “the Patel Pharmacies” at trial), which operated in and around Detroit. The evidence also showed that Babubhai Patel’s model for turning a profit at his pharmacies was based upon large-scale health care fraud and the diversion of controlled substances. Babubhai Patel paid cash kickbacks and other things of value to physicians in exchange for those physicians writing prescriptions for expensive medications, without regard to medical necessity, that could be billed to Medicare, Medicaid, or a private insurer through one of the Patel Pharmacies. Physicians affiliated with Babubhai Patel would also write prescriptions for controlled substances for their patients, again regardless of medical necessity, which would then be filled at one of the Patel Pharmacies. These controlled substances were distributed to patients and patient recruiters as a kickback in exchange for the patients using a Patel Pharmacy. Pharmacists at the Patel Pharmacies would increase the pharmacies’ profits by billing insurers for medications never actually distributed to patients.
The evidence presented at trial showed that Fowler was one of the physicians to whom Babubhai Patel paid bribes and kickbacks in exchange for referrals of prescriptions. In exchange, Dr. Fowler wrote numerous prescriptions for expensive medications, without regard to medical necessity, that could be filled at one of the Patel Pharmacies. He also wrote unlawful prescriptions for narcotic drugs in Schedules II-V, including oxycontin and oxycondone, which were resold on the street market.
Evidence also demonstrated that Khunt, a pharmacist in Babubhai Patel’s organization, billed Medicare, Medicaid, and private insurers for expensive medications he never dispensed to patients. He also knowingly filled prescriptions for scheduled controlled substances such as vicodin that were never intended for the patients, but which were resold by marketers on the street market.
The evidence showed that Thoran was a marketer who recruited patients who were seen by cooperating doctors or clinics. After unlawful prescriptions for controlled substances were written and filled at the pharmacies, Thoran would take possession of the controlled drugs in order to sell them on the street market.
These defendants are three of 39 individuals who have been charged with offenses relating to their involvement with Babubhai Patel’s pharmacy network. All but three of the defendants have now been convicted of felonies arising out of their involvement with Babubhai Patel; 24 of those defendants entered guilty pleas, and 12, including the three defendants today, have been convicted after trial. Defendant Babubhai Patel was convicted at a trial in August 2012; he is serving a 17-year prison sentence. One defendant remains a fugitive, while two defendant’s cases remain pending, with a trial date set for July, 2014.
The case was prosecuted by Assistant United States Attorneys John K. Neal and Wayne F. Pratt.
Jackson Man Pleads Guilty to Federal Civil Rights Charge of Desecrating Religious ParaphernaliaRead the Press Release
Jackson, TN – Justin Shawn Baker, 25, of Jackson, TN, was sentenced to 12 months in prison following his guilty plea of violating the civil rights of students and faculty of the Margolin Hebrew Academy by defacing a Torah and religious prayer books, announced U.S. Attorney Edward L. Stanton III.
According to information contained in the indictment and facts revealed during today’s sentencing hearing, on or about January 12, 2013, students and faculty of the Margolin Hebrew Academy were staying overnight at the Doubletree Hotel in Jackson en route to Gatlinburg, TN. While there, they used a meeting room at the hotel to conduct a Sabbath worship service. A Torah, religious books, and musical instruments were left in the meeting room overnight with the intention of continuing worship services on the following morning.
The facts presented today further revealed Baker admitted that while employed as a security guard at the hotel, he discovered the items in the room, and defaced the Torah, the prayer books, and the musical instruments with profanity, anti-Semitic phrases, and Satanic writing. He also admitted to spitting on the Torah. Photographic evidence presented during the hearing confirmed that the Torah was defaced with profanity and phrases including “Hail Satan.”
In addition to the prison sentence, Chief U.S. District Judge J. Daniel Breen ordered Baker to pay $9,999.99 in restitution to Margolin Hebrew Academy and to serve one year of supervised release. There is no parole in the federal system.
This case was investigated by the FBI and is being prosecuted by First Assistant U.S. Attorney Larry Laurenzi and Trial Attorney Douglas Kern of the Civil Rights Division’s Criminal Section.# # # #
Investment Manager Who Fled During Trial Sentenced to 210 Months for Foreign Currency Fraud SchemeRead the Press Release
Earlier today, Thomas Qualls, the President of International Foreign Currency, Inc., was sentenced to a term of imprisonment of 210 months following his convictions for mail fraud, wire fraud, conspiracy and obstruction of justice. The proceeding was held before the Hon. Dora L. Irizarry, United States District Judge, at the United States Courthouse in Brooklyn. Judge Irizarry also imposed restitution of approximately $817,000.
During the fourth week of his trial, Qualls failed to appear in court on the day closing arguments were scheduled to begin. After determining that Qualls had fled, the court resumed the trial in the defendant’s absence, and the jury returned a verdict of guilty on all counts. Approximately six months later, Canadian authorities apprehended Qualls, and he remained in Canadian custody until he was extradited to the United States.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, U.S. Postal Inspector-in-Charge, New York Division.
“The defendant bilked his clients by stealing their hard-earned money, and when faced with the overwhelming evidence of his misdeeds presented to a jury of his peers, he fled the country,” said United States Attorney Lynch. “This case shows, once again, that you can run, but you cannot hide – we will continue to safeguard the markets by zealously prosecuting fund managers who betray the trust of investors.” Ms. Lynch expressed her grateful appreciation to the United States Marshals Service and the Postal Inspection Service, as well as law enforcement authorities in Canada, for their assistance.
Qualls operated a fraudulent investment firm known as International Foreign Currency, Inc. (“IFC”) in Garden City, New York. Qualls and his co-conspirators purported to invest funds in foreign currency. Instead, Qualls stole investors’ funds and spent them on business and personal expenses, including a Caribbean cruise, expenses for his pets, and payments on a Jaguar automobile. At the trial, multiple former IFC employees testified that the defendant was the head of the company, controlled all the trading and all the company’s funds, and instructed them to provide false and misleading information to prospective investors. The defendant also created falsified account statements to conceal the fraud from investors. Ultimately, investors lost approximately $1 million as a result of the defendant’s scheme. The evidence at trial also established that Qualls participated in multiple prior fraudulent schemes.
The government's case was prosecuted by Assistant United States Attorney Daniel Spector.
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 is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendant:
THOMAS QUALLS
Age: 45
Hanover Township Man Sentenced for Distribution of Crack CocaineRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania, announced that Anthony Moore, age 31, of Hanover Township, Pennsylvania, was sentenced by U.S. District Court Judge Robert D. Mariani today in Scranton to 130 months’ incarceration to be followed by a four-year term of supervised release, for distribution of crack cocaine.
Moore was indicted in January 2013 for illegal distribution of heroin, cocaine base (crack) involving 500 grams or more of cocaine. He pled guilty in October 2013 pursuant to a plea agreement.
The investigation was conducted by the DEA. The case was prosecuted by Assistant United States Attorney Todd K. Hinkley.
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