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21 February 2014
Fairbanks Man Sentenced to 18 Years Imprisonment for His Role in Large Scale Drug Trafficking ConspiracyRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a man from Anchorage, Alaska, was sentenced in federal court in Anchorage for his role in an Anchorage and Fairbanks drug conspiracy.
Donnel Johnson, a/k/a, “Creep,” age 31, from Fairbanks, Alaska, was sentenced on Friday, February 21, 2014, by United States District Court Chief Judge Ralph R. Beistline. Johnson received a sentence of 216 months in prison and 5 years of supervised release on charges related to a drug conspiracy. Johnson was also ordered to forfeit vehicles and jewelry derived from drug trafficking.
Johnson was a key member of a drug trafficking conspiracy in which he and his accomplices attempted to conceal their drug trafficking by claiming they were involved in legitimate businesses, specifically that they were “artists,” employees, or promoters of an Anchorage recording label and rap and hip hop performance group known as “Out Da Cutt” or “ODC” Entertainment and “UNDB” (Up North ‘D’ or Dope Boys). Members of this conspiracy would record rap and hip hop songs, post videos on Youtube.com, and perform local shows in Anchorage and Fairbanks. Much of their music glorified the lifestyle of selling illegal narcotics and committing other crimes. The lavish and extravagant lifestyle portrayed in their music and videos was supported by their sales of illegal narcotics. Johnson held himself out as a record producer for the record label and recording group.
Johnson was the Fairbanks supervisor of the distribution of cocaine during the conspiracy. In fact, according to sources, Johnson was the largest distributor of cocaine in Fairbanks during the course of the conspiracy. Johnson would obtain cocaine from other members of the conspiracy in Anchorage, then he or others would deliver the cocaine to Fairbanks for distribution. According to court filings, in November 2012, the United States Postal Service intercepted ten kilograms of cocaine bound for two different Anchorage addresses. During the delivery of one of the packages, Johnson was observed in a vehicle conducting counter-surveillance in the area. In January 2012, while on a routine personal errand, an APD detective assigned to the DEA Task Force noticed the same vehicle at a Fred Meyer’s parking lot. As he watched the vehicle, Johnson arrived and placed a large duffel bag in the vehicle. The vehicle was then pulled over by Anchorage Police officers, and 12 kilograms of cocaine was found in the duffel bag. This cocaine was bound for Fairbanks, to be distributed by Johnson and his accomplices. The seizures resulted in numerous search warrants in Fairbanks and Anchorage. To date, 23 people have been charged in connection with the investigation.
Before imposing a sentence, Chief Judge Beistline told Johnson that a serious sentence was warranted, because “for at least the last three to five years, you were pouring cocaine into the Fairbanks community.”
Johnson was the latest to be sentenced in connection with the investigation. Previously, on November 2, 2012, Chief Judge Beistline sentenced Christopher Anderson to 14 months imprisonment. DeMarr Moultrie was sentenced to 40 months imprisonment on May 1, 2013. Jeraelyn Hill was sentenced to 66 months imprisonment on May 28, 2013. Jerry Wormley was sentenced to 36 months imprisonment on May 31, 2013. Rock Phelps II was sentenced to 18 months imprisonment on June 14, 2013. Brent Gunnels was sentenced to 6 months imprisonment on August 2, 2013. Mihla Hall was sentenced to 28 months imprisonment on August 21, 2013. Joshua Mustovich was sentenced to 87 months imprisonment on September 6, 2013. Dalon Johnson was sentenced to 92 months imprisonment on September 24, 2013. Antonio Fleming was sentenced to 70 months imprisonment on January 14, 2014. Tevoris Carter, Emma Shine, and Terrance Fleming have plead guilty for their roles in connection with the conspiracy and await sentencing.
Ms. Loeffler commended the Federal Bureau of Investigation, the Drug Enforcement Administration, the United States Postal Inspection Service, the Internal Revenue Service Criminal Investigation Division, and the Anchorage Police Department for the investigation leading to the successful prosecution of Mr. Johnson.
Endo Pharmaceuticals and Endo Health Solutions to Pay $192.7 Million to Resolve Criminal and Civil Liability Relating to Marketing of Prescription Drug Lidoderm for Unapproved UsesRead the Press Release
Pharmaceutical company Endo Health Solutions Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $192.7 million to resolve criminal and civil liability arising from Endo’s marketing of the prescription drug Lidoderm for uses not approved as safe and effective by the Food and Drug Administration (FDA), the Justice Department announced today. The resolution includes a deferred prosecution agreement and forfeiture totaling $20.8 million and civil false claims settlements with the federal government and the states and the District of Columbia totaling $171.9 million. Endo Pharmaceuticals Inc. is a Delaware corporation headquartered in Malvern, Pa.
“FDA’s drug approval process is designed to ensure that companies market their products for uses that are proven to be safe and effective,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will hold accountable those who circumvent that process in pursuit of financial gain.”In a criminal information filed today in the Northern District of New York, the government charged that, between 2002 and 2006, Endo Pharmaceuticals Inc. introduced into interstate commerce Lidoderm that was misbranded under the Federal Food, Drug and Cosmetic Act (FDCA). The FDCA requires a company, such as Endo Pharmaceuticals Inc., to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. During the period of 2002 to 2006, Lidoderm was approved by the FDA only for the relief of pain associated with post-herpetic neuralgia (PHN), a complication of shingles. The information alleges that, during the relevant time period, the Lidoderm distributed nationwide by Endo Pharmaceuticals Inc. was misbranded because its labeling lacked adequate directions for use in the treatment of non-PHN related pain, including low back pain, diabetic neuropathy and carpal tunnel syndrome. These uses were intended by Endo Pharmaceuticals Inc. but never approved by the FDA. The information further alleges that certain Endo Pharmaceuticals Inc. sales managers provided instruction to certain sales representatives concerning how to expand sales conversations with doctors beyond PHN and encouraged promotion of Lidoderm in workers’ compensation clinics.
In a deferred prosecution agreement to resolve the charge, Endo Pharmaceuticals Inc. admitted that it intended that Lidoderm be used for unapproved indications and that it promoted Lidoderm to health care providers for those unapproved indications. Under the terms of the deferred prosecution agreement, Endo Pharmaceuticals Inc. will pay a total of $20.8 million in monetary penalties and forfeiture. Endo Pharmaceuticals Inc. further agreed to implement and maintain a number of enhanced compliance measures, including making publicly available the results of certain clinical trials and requiring an annual review and certification of its compliance efforts by the Chief Executive Officer of its parent company, Endo Health Solutions. The deferred prosecution agreement will not be final until accepted by the U.S. District Court for the Northern District of New York.
“The safety and efficacy of drugs must be shown by science, not sales pitches,” said U.S. Attorney for the Northern District of New York Richard S. Hartunian. “Drugs marketed for intended uses not approved by the FDA are misbranded because their labeling lacks adequate directions for those uses. This settlement emphasizes that public health is protected by labeling based on product performance, rather than profitability, and promotes enhanced efforts to ensure compliance with all requirements.”
In addition, Endo agreed to settle its potential civil liability in connection with its marketing of Lidoderm. The government alleged that, from March 1999 through December 2007, Endo caused false claims to be submitted to federal health care programs, including Medicaid, a jointly funded federal and state program, by promoting Lidoderm for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by the federal health care programs. Of the $171.9 million Endo has agreed to pay to resolve these civil claims, Endo will pay $137.7 million to the federal government and $34.2 million to the states and the District of Columbia.
“Off-label marketing can undermine the doctor-patient relationship and adversely influence the clear and honest judgment of doctors that their patients rely on and trust,” said U.S. Attorney for the Eastern District of Pennsylvania Zane D. Memeger. “Pharmaceutical companies have a legal obligation to promote their drugs for only FDA-approved uses. This obligation takes precedence over the company’s bottom line.”
“The settlement announced today demonstrates the government’s continued scrutiny of pharmaceutical companies that interfere with FDA’s mission of ensuring that drugs are safe and effective for the American public,” said Special Agent in Charge of the FDA’s Office of Criminal Investigations’ New York Field Office Mark Dragonetti. “We will continue to work with our law enforcement partners to investigate and prosecute pharmaceutical companies that disregard the drug approval process and jeopardize the public health by engaging in the nationwide distribution of misbranded products.”
“Endo Pharmaceutical enriched themselves at the expense of the public,” said Special Agent in Charge Andrew W. Vale of the Albany Division of the Federal Bureau of Investigation. “Patients will search for drug therapies to assist in pain management, and they deserve the right to drugs approved for such use. The FBI will continue to work with our federal partners to investigate companies such as Endo Pharmaceuticals to ensure patients are safe.”
Also as part of the settlement, Endo Pharmaceuticals Inc. has agreed to enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General that requires Endo to implement measures designed to avoid or promptly detect conduct similar to that which gave rise to this resolution. Among other things, the CIA requires Endo to implement an internal risk assessment and mitigation program and requires numerous internal and external reviews of promotional and other practices. The CIA also requires key executives and individual board members to sign certifications about compliance, and it requires the company to publicly report information about its financial arrangements with physicians.
“By marketing Lidoderm for uses not covered by federal health care programs, Endo profited at the expense of taxpayers and could have put patients at risk,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “Under our CIA, Endo agrees to promote its products legally, while board members and top executives are specifically held accountable for compliance.”
The civil settlement resolves three lawsuits pending in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. The actions were filed by Peggy Ryan, a former Lidoderm sales representative, Max Weathersby, another former Lidoderm sales representative and Gursheel S. Dhillon, a physician. The whistleblowers’ share of the settlement has not been determined.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The civil settlement was handled by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Civil Division’s Commercial Litigation Branch. The criminal case was handled by the U.S. Attorney’s Office for the Northern District of New York and the Civil Division’s Consumer Protection Branch. These matters were investigated by the Federal Bureau of Investigation, the Food and Drug Administration Office of Criminal Investigation, the Department of Health and Human Services Office of Inspector General Office of Investigations, the Defense Criminal Investigative Service of the Department of Defense, the U.S. Postal Service Office of Inspector General and the Office of Personnel Management Office of Inspector General with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General and Office of General Counsel and Center for Medicare and Medicaid Services, the Food and Drug Administration’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
Except as to conduct admitted in connection with the deferred prosecution agreement, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Ryan v. Endo Pharmaceuticals Inc., Civil Action No. 05-cv-3450, United States ex rel. Weathersby, et al. v. Endo Pharmaceuticals Inc., et al, Civil Action No. 10-cv-2039 and United States ex rel. Dhillon v. Endo Pharmaceuticals, Civil Action No. 11-cv-7767, all docketed in the Eastern District of Pennsylvania.
Endo Pharmaceuticals and Endo Health Solutions to Pay $192.7 Million to Resolve Criminal and Civil Liability Relating to Marketing of Prescription Drug Lidoderm for Unapproved UsesRead the Press Release
WASHINGTON – Pharmaceutical company Endo Health Solutions Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $192.7 million to resolve criminal and civil liability arising from Endo’s marketing of the prescription drug Lidoderm for uses not approved as safe and effective by the Food and Drug Administration (FDA), the Justice Department announced today. The resolution includes a deferred prosecution agreement and forfeiture totaling $20.8 million and civil false claims settlements with the federal government and the states and the District of Columbia totaling $171.9 million. Endo Pharmaceuticals Inc. is a Delaware corporation headquartered in Malvern, Pa.
“FDA’s drug approval process is designed to ensure that companies market their products for uses that are proven to be safe and effective,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will hold accountable those who circumvent that process in pursuit of financial gain.”
In a criminal information filed today in the Northern District of New York, the government charged that, between 2002 and 2006, Endo Pharmaceuticals Inc. introduced into interstate commerce Lidoderm that was misbranded under the Federal Food, Drug and Cosmetic Act (FDCA). The FDCA requires a company, such as Endo Pharmaceuticals Inc., to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. During the period of 2002 to 2006, Lidoderm was approved by the FDA only for the relief of pain associated with post-herpetic neuralgia (PHN), a complication of shingles. The information alleges that, during the relevant time period, the Lidoderm distributed nationwide by Endo Pharmaceuticals Inc. was misbranded because its labeling lacked adequate directions for use in the treatment of non-PHN related pain, including low back pain, diabetic neuropathy and carpal tunnel syndrome. These uses were intended by Endo Pharmaceuticals Inc. but never approved by the FDA. The information further alleges that certain Endo Pharmaceuticals Inc. sales managers provided instruction to certain sales representatives concerning how to expand sales conversations with doctors beyond PHN and encouraged promotion of Lidoderm in workers’ compensation clinics.
In a deferred prosecution agreement to resolve the charge, Endo Pharmaceuticals Inc. admitted that it intended that Lidoderm be used for unapproved indications and that it promoted Lidoderm to health care providers for those unapproved indications. Under the terms of the deferred prosecution agreement, Endo Pharmaceuticals Inc. will pay a total of $20.8 million in monetary penalties and forfeiture. Endo Pharmaceuticals Inc. further agreed to implement and maintain a number of enhanced compliance measures, including making publicly available the results of certain clinical trials and requiring an annual review and certification of its compliance efforts by the Chief Executive Officer of its parent company, Endo Health Solutions. The deferred prosecution agreement will not be final until accepted by the U.S. District Court for the Northern District of New York.
“The safety and efficacy of drugs must be shown by science, not sales pitches,” said U.S. Attorney for the Northern District of New York Richard S. Hartunian. “Drugs marketed for intended uses not approved by the FDA are misbranded because their labeling lacks adequate directions for those uses. This settlement emphasizes that public health is protected by labeling based on product performance, rather than profitability, and promotes enhanced efforts to ensure compliance with all requirements.”
In addition, Endo agreed to settle its potential civil liability in connection with its marketing of Lidoderm. The government alleged that, from March 1999 through December 2007, Endo caused false claims to be submitted to federal health care programs, including Medicaid, a jointly funded federal and state program, by promoting Lidoderm for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by the federal health care programs. Of the $171.9 million Endo has agreed to pay to resolve these civil claims, Endo will pay $137.7 million to the federal government and $34.2 million to the states and the District of Columbia.
“Off-label marketing can undermine the doctor-patient relationship and adversely influence the clear and honest judgment of doctors that their patients rely on and trust,” said U.S. Attorney for the Eastern District of Pennsylvania Zane D. Memeger. “Pharmaceutical companies have a legal obligation to promote their drugs for only FDA-approved uses. This obligation takes precedence over the company’s bottom line.”
“The settlement announced today demonstrates the government’s continued scrutiny of pharmaceutical companies that interfere with FDA’s mission of ensuring that drugs are safe and effective for the American public,” said Special Agent in Charge of the FDA’s Office of Criminal Investigations’ New York Field Office Mark Dragonetti. “We will continue to work with our law enforcement partners to investigate and prosecute pharmaceutical companies that disregard the drug approval process and jeopardize the public health by engaging in the nationwide distribution of misbranded products.”
“Endo Pharmaceutical enriched themselves at the expense of the public,” said Special Agent in Charge Andrew W. Vale of the Albany Division of the Federal Bureau of Investigation. “Patients will search for drug therapies to assist in pain management, and they deserve the right to drugs approved for such use. The FBI will continue to work with our federal partners to investigate companies such as Endo Pharmaceuticals to ensure patients are safe.”
Also as part of the settlement, Endo Pharmaceuticals Inc. has agreed to enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General that requires Endo to implement measures designed to avoid or promptly detect conduct similar to that which gave rise to this resolution. Among other things, the CIA requires Endo to implement an internal risk assessment and mitigation program and requires numerous internal and external reviews of promotional and other practices. The CIA also requires key executives and individual board members to sign certifications about compliance, and it requires the company to publicly report information about its financial arrangements with physicians.
“By marketing Lidoderm for uses not covered by federal health care programs, Endo profited at the expense of taxpayers and could have put patients at risk,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “Under our CIA, Endo agrees to promote its products legally, while board members and top executives are specifically held accountable for compliance.”
The civil settlement resolves three lawsuits pending in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. The actions were filed by Peggy Ryan, a former Lidoderm sales representative, Max Weathersby, another former Lidoderm sales representative and Gursheel S. Dhillon, a physician. The whistleblowers’ share of the settlement has not been determined.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The civil settlement was handled by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Civil Division’s Commercial Litigation Branch. The criminal case was handled by the U.S. Attorney’s Office for the Northern District of New York and the Civil Division’s Consumer Protection Branch. These matters were investigated by the Federal Bureau of Investigation, the Food and Drug Administration Office of Criminal Investigation, the Department of Health and Human Services Office of Inspector General Office of Investigations, the Defense Criminal Investigative Service of the Department of Defense, the U.S. Postal Service Office of Inspector General and the Office of Personnel Management Office of Inspector General with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General and Office of General Counsel and Center for Medicare and Medicaid Services, the Food and Drug Administration’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
Except as to conduct admitted in connection with the deferred prosecution agreement, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Ryan v. Endo Pharmaceuticals Inc., Civil Action No. 05-cv-3450, United States ex rel. Weathersby, et al. v. Endo Pharmaceuticals Inc., et al, Civil Action No. 10-cv-2039 and United States ex rel. Dhillon v. Endo Pharmaceuticals, Civil Action No. 11-cv-7767, all docketed in the Eastern District of Pennsylvania.
Endo Health Solutions and Endo Pharmaceuticals of Malvern, Pa to Pay $171.9 Million to Resolve Civil False Claims AllegationsRead the Press Release
PHILADELPHIA -- Specialty pharmaceuticals company Endo Health Solutions, Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo), which is headquartered in Malvern, Pennsylvania, have agreed to pay $171.9 million to resolve civil allegations of off-label marketing of their adhesive pain patch Lidoderm. The civil resolution is the result of whistleblower allegations filed in the Eastern District of Pennsylvania and was announced today by the Department of Justice and United States Attorney Zane David Memeger. Separately handled and announced today by the Department of Justice and the Office of the United States Attorney for the Northern District of New York is Endo Pharmaceuticals Inc.’s additional deferred prosecution agreement to pay $20.8 million in criminal forfeiture and fines to resolve related criminal liability. The criminal resolution is discussed at http://www.justice.gov/opa/pr/2014/February/14-civ-187.html.
Civil Settlement in Eastern District of Pennsylvania. Lidoderm was FDA approved only for relief of pain associated with post-herpetic neuralgia (“PHN”), a painful condition that affects some individuals with a history of shingles. The civil settlement resolves allegations under the False Claims Act that, between March 1999 and December 2007: (1) Endo knowingly promoted Lidoderm for treatment of non-FDA-approved (off-label) conditions, including lower back pain and chronic pain; (2) because uses of the product for those conditions were not medically accepted indications, federal health care programs did not cover such uses; and (3) Endo’s off-label promotion caused providers to submit false reimbursement claims for such non-covered uses to Medicare, Medicaid, and other federal health care programs. Of the $171.9 million that Endo has agreed to pay to resolve these civil claims, the company will pay $137,700,172 to the United States and $34,209,981 to various States and the District of Columbia.
Under qui tam (whistleblower) provisions of the federal False Claims Act, certain private citizens may bring civil actions on behalf of the United States and may share in any recovery. The settled Lidoderm civil allegations include those originally brought by whistleblower Peggy Ryan in the first of three qui tam lawsuits now pending in federal court in the Eastern District of Pennsylvania. Ms. Ryan is a former Endo sales representative whose sales territory included upstate New York. The whistleblower share of the settlement has not yet been determined.
“Off-label marketing can undermine the doctor-patient relationship and adversely influence the clear and honest judgment of doctors that their patients rely on and trust. Pharmaceutical companies have a legal obligation to promote their drugs for only FDA-approved uses. This obligation takes precedence over the company’s bottom line,” said Memeger.
“FDA’s drug approval process is designed to ensure that companies market their products for uses that are proven to be safe and effective,” said Stuart F. Delery, Assistant Attorney General for the Civil Division of the United States Department of Justice. “We will hold accountable those who circumvent that process in pursuit of financial gain.”
Corporate Integrity Agreement. As part of the settlement, Endo Pharmaceuticals Inc. agrees to enter into a Corporate Integrity Agreement (“CIA”) with the Office of Inspector General of the U.S. Department of Health and Human Services (“HHS”). The CIA requires Endo to implement measures designed to avoid or promptly detect conduct similar to that which allegedly gave rise to this matter, including measures requiring: (1) an internal risk assessment and mitigation program; (2) numerous internal and external reviews of promotional and other practices; (3) key executives and individual Board members to sign compliance certifications; and (4) public reporting of information about Endo’s financial arrangements with physicians.
“By marketing Lidoderm for uses not covered by Federal health care programs, Endo profited at the expense of taxpayers and could have put patients at risk,” said Daniel R. Levinson, the HHS Inspector General. “Under our CIA Endo agrees to promote its products legally, while board members and top executives are specifically held accountable for compliance.”
Investigating these matters were the Federal Bureau of Investigation; the FDA’s Office of Criminal Investigations; the Defense Criminal Investigative Service of the Department of Defense; and the respective Inspector Generals’ Offices for HHS, the U.S. Postal Service, and the U.S. Office of Personnel Management.
The civil settlement was jointly handled: in the Eastern District of Pennsylvania, by Civil Chief Margaret L. Hutchinson, Deputy Chief Mary Catherine Frye, and Assistant U.S. Attorney Gerald B. Sullivan, with analysis by Auditors Denis J. Cooke and Dawn Wiggins; and at the Commercial Litigation Branch of the U.S. Department of Justice’s Civil Division, by Trial Attorney Brian McCabe. Assistance was provided by the HHS Office of Counsel to the Inspector General; the FDA’s Office of Chief Counsel; and the National Association of Medicaid Fraud Units.
The settled civil claims are allegations only. There has been no determination of civil liability. The civil lawsuits are docketed in the Eastern District of Pennsylvania as U.S.A. et al. ex rel. Ryan v. Endo Pharmaceuticals Inc., No. 05-cv-3450; U.S.A., et al. ex rel. Weathersby, et al., No. 10-cv-2039; and U.S.A. ex rel. Dhillon v. Endo Pharmaceuticals, No. 11-cv-7767.Release.pdf
Libodem Fully Executed Settlement Agreement.pdf
Coporate Intgerity Agreement - HHS.pdfUNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525El Paso Man Arrested and Charged in Alleged Laser Strike IncidentRead the Press Release
In El Paso today, FBI agents arrested 28–year-old Don Ray Dorsett for allegedly pointing a laser at an aircraft flying overhead announced United States Attorney Robert Pitman and FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In February 2012, President Barrack Obama signed the “FAA Modernization and Reform Act of 2012” and added a new provision that makes it a federal crime to aim a laser pointer at an aircraft. This week, the federal grand jury in El Paso returned a one-count indictment charging Dorsett with violating that provision (Title 18 United States Code Section 39A—Aiming a Laser Pointer at an Aircraft). The indictment alleges that on January 4, 2014, Dorsett knowingly aimed the beam of a laser pointer at a helicopter flying overhead. The aircraft belonged to the Texas Department of Public Safety.
“Although no one was injured during this incident, laser strikes can pose serious risks to flight crews, passengers, and even individuals on the ground. Laser strikes are a serious public safety hazard and will be treated as such by law enforcement officials,” stated United States Attorney Robert Pitman.
Upon conviction, the defendant faces up to five years in federal prison and a maximum $250,000 fine.
“Today’s arrest of Don Dorsett is a prime example of the cooperative and collaborative relationship between the FBI and our local partners. The FBI, in tandem with the Texas Department of Public Safety and our other local law enforcement partners, take aircraft safety seriously. The FBI will continue to vigorously investigate and seek prosecution for those engaged in laser strikes on aircrafts and other criminal activity involving aircrafts and innocent bystanders,” stated FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.
This indictment resulted from an investigation conducted by agents with the Federal Bureau of Investigation together with the Texas Department of Public Safety and the El Paso Police Department. Assistant United States Attorney Stanley Serwatka is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Reported incidents of laser strikes are on the rise. Since the FBI and the Federal Aviation Administration (FAA) began tracking laser strikes in 2005, statistics reflect a more than 1,100% increase in the deliberate targeting of aircraft by people with handheld lasers. In 2013, there were a total of 3,960 laser strikes reported – an average of almost 11 incidents per day.
Earlier this month, the FBI announced the inception of the Laser Threat Awareness Campaign, a nationwide effort led by the FBI in collaboration with the Air Line Pilots Association, Int’l (ALPA) and the FAA to raise awareness of aircraft laser illumination threats. If you have information about a lasing incident, contact the El Paso FBI at 915-832-5000. If you see someone pointing a laser at an aircraft, call the nearest local law enforcement agency immediately by dialing 911. Tips can also be submitted online at https://tips.fbi.gov.
Eight Miami Men Charged in Drug Trafficking Conspiracy and Distribution ChargesRead the Press Release
Indictment Stems from USAO’s Liberty City/Little Haiti Violence Reduction PartnershipWifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CID), Miami Field Office, announce the return of an indictment charging eight defendants with participating in a narcotics-trafficking conspiracy, in violation of Title 21, United States Code, Section 846, as well as charging several defendants individually with associated firearms offenses, including possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A)(i), and possession of a firearm and ammunition by a convicted felon, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(e).
The defendants charged are: Espere Desmond Pierre, 32; Markentz Blanc, 32; Meluin Jermaine Braynen, 19; Willis Maxi, 33; Wisvelt Voltaire, 32; Alex Bermudez, 24; Sanders Bermudez, 22; and Kervens Lalanne, 22, all of Miami.
According to the indictment, the defendants participated in the large-scale distribution of crack cocaine through multiple retail sale locations operated by the conspirators in the Little Haiti area of Miami.
In addition, Pierre and Blanc also conspired to use compromised personal identifying information to file numerous false and fraudulent tax returns in order to claim tax refunds to which they were not entitled. The defendants possessed the identity information (including names, dates of birth, and Social Security numbers) of over 1,000 persons. Pierre and Blanc were charged with conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349; and aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1). Blanc was additionally charged with possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3).
This case is, in large part, the result of the Violence Reduction Partnership, launched by the U.S. Attorney’s Office. Through this Partnership, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks in various neighborhoods, while simultaneously working with community leaders and concerned citizens to mentor at-risk youths, provide jobs and job training to young families, and help probationers and parolees successfully re-enter society.
Mr. Ferrer thanked FBI, ATF, IRS-CI, the MDPD, and the City of Miami Police Department for their work on the case. The case is being prosecuted by Assistant U.S. Attorney Seth M. Schlessinger.
An indictment is only an accusation and the defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Eagle Butte Man Charged with Assaulting, Resisting and Impeding A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Assaulting, Resisting and Impeding two federal contract officers.
William Pay Pay, age 51, was indicted on February 12, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on February 18, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Pay Pay is alleged to have forcibly assaulted, resisted, opposed, impeded, intimidated, and interfered with two different Cheyenne River Sioux tribal law enforcement officers in December 2013 in Eagle Butte. The incident resulted in bodily injury to and physical contact with the law enforcement officers.
The charges are merely an accusation and Pay Pay is presumed innocent until and unless proven guilty.The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Pay Pay was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Eagle Butte Man Charged with Aggravated Sexual Abuse by ForceRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Abuse by Force.
Brad Lee Red Bear, age 23, was indicted on February 12, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on February 18, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $250,000 fine, 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Red Bear is alleged to have forcibly sexually assaulted a woman in December 2013 in Eagle Butte, South Dakota. The charge is merely an accusation and Red Bear is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Red Bear was released on bond. A trial date has not been set.
District Woman Sentenced to Three-Year Prison Term for Involuntary Manslaughter in Traffic Fatality-Impaired Driver Lost Control of Car, Leading to Passenger’s Death-Read the Press Release
WASHINGTON – Corrine M. Johnson, 27, of Washington, D.C, was sentenced today to three years in prison on charges of involuntary manslaughter and driving under the influence of alcohol stemming from a traffic fatality that took place in 2012 in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Johnson pled guilty to the charges in November 2013 in the Superior Court of the District of Columbia. She was sentenced by the Honorable Robert E. Morin. Upon completion of her prison term, Johnson will be placed on five years of supervised release.
According to the government’s evidence, at approximately 1:35 a.m. on Saturday, Aug. 4, 2012, Johnson was driving her Hyundai Accent at a high rate of speed southwest bound on Division Avenue NE. The victim, Cierra Wilson, 25, was Johnson’s front seat passenger.
Witnesses saw Johnson driving at approximately twice the speed limit in the residential area, and failing to stop at the stop sign controlling the intersection of Division Avenue and Blaine Street NE. After running that stop sign, Johnson continued along Division Avenue and failed to stop at the stop sign controlling the next intersection at Division Avenue and Ames Street. As she ran the stop sign at that intersection, Johnson lost control of her car and crashed, wedging her car between a lamp post and the retaining wall of the corner house at the intersection. The crash instantly killed Ms. Wilson.
Almost immediately, area residents arrived on the scene and saw that the car was on fire. A resident put out the fire with a kitchen fire extinguisher. Officers from the Metropolitan Police Department (MPD), who were patrolling the area, were flagged down and immediately came to the scene. They found that Ms. Wilson, the front seat passenger, appeared to be already dead, and Johnson, still in the driver’s seat, was badly injured. Johnson was taken to a hospital and treated for her injuries. While at the hospital, Johnson’s blood was drawn and later analyzed to determine that her blood alcohol content was nearly twice the legal limit.
Crash analysis conducted by detectives from the MPD’s Major Crash Investigations Unit determined that Johnson’s Hyundai did not experience any mechanical malfunction, and that Johnson did not apply her brakes to avoid the crash. Further, the crash reconstruction evidence indicated that when she struck the retaining wall, killing Ms. Wilson, Johnson was travelling at approximately 55 mph in the 25 mph zone. Also, an opened bottle of vodka was found on the floorboard of the car.
In announcing the sentence, U.S. Attorney Machen praised those who investigated the case for the Metropolitan Police Department, including members of the Major Crash Investigations Unit and the Sixth District. He also expressed appreciation for those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Sandra Lane and Phil Aronson, and Victim/Witness Program Specialist Tamara Ince.
Finally, he commended the work of Assistant U.S. Attorney Edward A. O’Connell, who prosecuted the matter.
14-045District Man Sentenced to 18 Years in Prison for Beating Man to Death with BarbellAttack Took Place on Weekend Afternoon, on Busy Public SidewalkRead the Press Release
WASHINGTON – Jeffrey Mills, 52, of Washington, D.C., was sentenced today to 18 years in prison for beating a man to death with a barbell in an attack in Northwest Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Mills was found guilty by a jury in November 2013, following a trial in the Superior Court of the District of Columbia, of charges of voluntary manslaughter while armed and carrying a dangerous weapon. He was sentenced by the Honorable John Ramsey Johnson. Mills was sentenced to 18 years in prison for voluntary manslaughter while armed and three years for carrying a dangerous weapon. The sentences will run concurrent to one another. Upon completion of his prison term, Mills will be placed on five years of supervised release.
According to the government’s evidence, the victim, Juan Antonio Paredes, 45, was with several friends on the afternoon of Saturday, Jan. 14, 2012 on the Park Road sidewalk near the intersection with 14th Street NW. Mills, a local street vendor who would often park his van on Park Road and sell wares from a table he set up on the sidewalk, was also out that afternoon.
For no discernible reason, at about 1:55 p.m., Mills grabbed a long, 15-pound barbell that he often used to lift weights during the day. He then rushed at Mr. Paredes, striking him broadside in the back and then again in the back of the head, as if he was swinging a baseball bat. Before the attack, Mr. Paredes was talking with friends and had his back to the defendant.
Mr. Paredes, who did not see the attack coming, crumbled and fell against a cement bike rack and then to the ground. As he lay defenseless on his back, Mills stood over him and continued to jab him in the chest and abdomen with the end of the barbell. He also kicked him about the body. Witnesses described how the defendant struck Mr. Paredes about the body five to 10 times while Mr. Paredes was on the ground. At the time of the offense, Mills repeatedly yelled that Mr. Paredes had attacked him with a knife. However, as multiple witnesses testified during trial, Mr. Paredes was not threatening Mills in any way before he was attacked.
In announcing the sentence, U.S. Attorney Machen commended the officers, detectives, mobile crime lab technicians, and other personnel who investigated the case for the Metropolitan Police Department. He also expressed appreciation for the assistance provided by the U.S. Marshals Service, the U.S. Immigration and Customs Enforcement, the District of Columbia Department of Forensic Sciences, and other agencies. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Intelligence Specialist Zachary McMenamin; Information Technology Specialists Jeanie Latimore-Brown and Thomas “Ron” Royal; Supervisory Information Technology Specialist Joe Calvarese; Victim/Witness Advocate Christina Principe; Supervisory Victim/Witness Services Coordinator David Foster, and Paralegal Specialist Alesha Matthews Yette. Finally, he thanked Assistant U.S. Attorney Erin O. Lyons, who prosecuted the case.
14-044Disability Doctor Peter J. Lesniewski Sentenced in Manhattan Federal Court to Eight Years in Prison for His Role in LIRR Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that PETER J. LESNIEWSKI, a Board-certified orthopedist, was sentenced today in Manhattan federal court to eight years in prison for his role in the alleged massive fraud scheme in which Long Island Railroad (“LIRR”) workers claimed to be disabled upon early retirement so that they could receive disability benefits to which they were not entitled. Between 1999 and 2008, LESNIEWSKI provided fraudulent medical narratives in support of the disability applications of at least 230 LIRR employees. In all, over 98% of the more than 400 LIRR employees he supposedly treated received disability benefits after seeing LESNIEWSKI. Following a three-week jury trial, LESNIEWSKI was convicted on August 6, 2013, on all 10 counts with which he was charged, including: one count of conspiracy to commit mail fraud, wire fraud and health care fraud; one count of conspiracy to defraud the Railroad Retirement Board (“RRB”); three counts of health care fraud; and five counts of mail fraud.
Manhattan U.S. Attorney Preet Bharara said: “In perpetrating this elaborate scheme, Dr. Lesniewski compromised both his professional and his personal integrity. Regrettably, Dr. Lesniewski is one of a number of healthcare professionals whose gross misconduct has depleted the RRB’s funds and diverted benefits from the rightful beneficiaries of its disability program.”
According to the Complaint, the Superseding Indictments, the evidence at trial, and statements made in court:
The RRB is an independent U.S. agency that administers benefit programs, including disability benefits, for the nation’s railroad workers and their families. A unique LIRR contract allowed employees to retire at the relatively young age of 50 – the age of eligibility has since changed to 55 – if they had been employed by the LIRR for at least 20 years. Eligible employees are entitled to receive an LIRR pension, which is a portion of the full retirement payment for which they are eligible at 65. In addition, at full retirement age (between age 60 and age 65 depending on years of service) they are eligible to receive an RRB retirement pension. LIRR workers who retired at 50 with only an LIRR pension would receive less than their prior salary and substantially lower pension payments than those to which they would be entitled at full retirement age. However, LIRR employees who retired and claimed disability could receive a disability payment from the RRB on top of their LIRR pension, regardless of age. A retiree’s LIRR pension, in combination with RRB disability payments, can be roughly equivalent to the base salary earned during his or her career.
Hundreds of LIRR employees have allegedly exploited the overlap between the LIRR pension and the RRB disability program by pre-planning the date on which they would falsely declare themselves disabled so that it would coincide with their projected retirement date. These false statements, made under penalty of prosecution in disability applications, allowed LIRR employees to retire as early as age 50 with an LIRR pension, supplemented by the fraudulently obtained RRB disability annuity. From 1995 through 2011, more than 75% of retiring LIRR employees stopped working and began receiving RRB disability benefits, whereas during this same period, only 25% of retiring Metro-North employees stopped working and began receiving RRB disability benefits.
LESNIEWSKI was instrumental in helping LIRR retirees receive disability benefits to which they were not entitled. As part of the massive fraud scheme, LESNIEWSKI prepared false documentation purporting to show the LIRR employees’ steady decline toward disability exactly at the time they pre-planned their retirement. He then provided to those LIRR employees a narrative for submission to the RRB that claimed they should receive a disability annuity. These medical narratives were completely fabricated or grossly exaggerated so that LESNIEWSKI could recommend a set of restrictions that, if legitimate, would render it impossible for the LIRR employees to continue performing their jobs. Many of the purportedly “objective” findings from the tests he conducted showed nothing more than normal degenerative changes one would expect to see in patients within the relevant age bracket.
LESNIEWSKI received approximately $1,000, often in cash, for these fraudulent assessments and narratives, and hundreds of thousands of dollars in additional health insurance payments for unnecessary medical treatments. In turn, the 242 patients who obtained disability benefits with LESNIEWSKI’s assistance have received approximately $70 million in RRB disability benefit payments. In sentencing LESNIEWSKI, Judge Marrero found that the total intended losses from his fraud were over $90 million, and that the actual losses suffered by the RRB and insurance companies to date total over $70 million.
In addition to his prison term, LESNIEWSKI, 63, of Rockville Centre, New York, was also sentenced to three years of supervised release. He was also ordered to forfeit $70,947,699 and pay $70,632,900 in restitution.
Thirty-three people have been charged in connection with the LIRR disability fraud scheme, 28 of whom have pled guilty and five of whom were convicted after trial.
Mr. Bharara praised the Railroad Retirement Board’s Office of the Inspector General, the FBI, and the Metro Transit Authority’s Office of the Inspector General for their outstanding work in the investigation, which he noted is ongoing. He also acknowledged the previous investigation conducted by the New York State Attorney General’s Office into these pension fraud issues.
The Office’s Complex Frauds Unit is handling the case. Assistant U.S. Attorneys Justin Weddle, Daniel Tehrani, and Nicole Friedlander are in charge of the prosecution.
Denver Man Sentenced to Federal Prison for Being A Felon in Possession of A FirearmRead the Press Release
DENVER – Reginald Jerome Wray, age 35, of Denver, was recently sentenced by U.S. District Court Judge Raymond P. Moore to serve 77 months in federal prison, followed by 3 years on supervised release, for being a felon in possession of a firearm, U.S. Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Luke Franey announced. Wray, who appeared at the sentencing hearing in custody, was remanded at the end of the proceeding.
Wray was indicted by a federal grand jury in Denver on May 8, 2013. He pled guilty before Judge Moore on November 4, 2013. Wray was sentenced on February 19, 2014.
According to the stipulated facts contained in the plea agreement, on April 1, 2013, shortly before 2:00 a.m., Denver police attempted to make a traffic stop of a speeding Jeep Commander SUV. When the officer turned on his overhead lights, the SUV took off at a high rate of speed and eluded the officer. The SUV turned a corner and crashed into two parked cars. The driver, who was the sole occupant of the vehicle, fled from the SUV on foot. Police officers gave chase and found the defendant, Reginald Jerome Wray, hiding behind a wall near the scene of the accident. The defendant admitted that he was the driver of the SUV.
Police conducted an inventory search of the SUV. Inside, officers found a firearm, specifically a Charter Arms, Bulldog .44 caliber revolver, loaded with 5 rounds of ammunition. Officers also found marijuana, Diazepam (Valium), a portable scale, and two cell phones in the vehicle. The defendant intentionally fled from police because he was on the run, as he was on parole and had an active warrant for a parole violation.
Prior to April 1, 2013, the defendant was a convicted felon and prohibited person. He had previously been convicted of the following felony offenses punishable by more than one year imprisonment:
* 8/16/2010: Marijuana - Possession of 8 oz or More, Boulder County, Colorado, District Court Case No. 2010CR0221;
* 6/18/2010: Escape - Attempt from Felony Pending, Boulder County, Colorado, District Court Case No. 2010CR00008;
* 10/8/2009: Possession of Weapon by Previous Offender, Boulder County, Colorado, District Court Case No. 2008CR1488;
* 11/15/2002: Possession of Schedule 2 Controlled Substance, Denver County, Colorado, District Court Case No. 2002CR3054;
* 2/3/2000: Felony Menacing, Arapahoe County, District Court, Case No. 1999CR3166
During sentencing, Judge Moore ruled that the defendant’s prior statutory rape conviction, a misdemeanor under Colorado law, qualified as a felony crime of violence for sentencing purposes. Specifically, in 2007, the defendant was convicted in Jefferson County of Sex Assault – 10 Year Age Difference. In that case, the defendant, 29-years-old at the time, had sexual intercourse with a 16-year-old minor in an automobile. He received 24-months in jail for that offense. A violation of this state law is a Class 1 misdemeanor and an “extraordinary risk” crime under Colorado law, punishable by up to 24 months imprisonment. While the crime may be classified as a “misdemeanor” under state law, it is considered a felony for sentencing purposes because it carries a potential penalty of more than one year imprisonment. The judge’s ruling increased the defendant’s prison sentence.
“The defendant’s long criminal record demonstrates that he remains a danger to the community,” said U.S. Attorney John Walsh. “As today’s sentence shows, felons in possession of firearms face stiff prison sentences.”
“ATF will continue to identify violent offenders who violate federal firearms law,” said Denver ATF Special Agent in Charge Luke Franey. “Taking these felons off the streets of Denver will make our communities a safer place to live.”
“This is a great example of how the Denver Police Department works closely with our State and Federal Law Enforcement partners,” said Denver Police Chief Robert White.
This case was investigate by the ATF and the Denver Police Department.
Wray was prosecuted by Assistant U.S. Attorney Richard A. Hosley, Chief of the Major Crimes Section, Criminal Division.
Clay County Jail Administrator Pleads Guilty to Violating Inmates' Civil RightsRead the Press Release
BIRMINGHAM -- The former jail administrator of the Clay County Detention Center pleaded guilty Wednesday to violating the civil rights of inmates by using his authority to sexually abuse or otherwise deprive the inmates of their constitutional rights, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
JEFFREY SCOTT COTNEY, 48, of Ashland, entered his plea before U.S. District Judge L. Scott Coogler to four counts of deprivation of rights under color of law between May 2009 and spring 2010 while he worked as Clay County's jail administrator. As part of that job, Cotney ran the inmate worker program, recommending which inmates could participate in the program and supervising the inmate workers.
A federal grand jury indicted Cotney in November. His sentencing is scheduled May 27.
As part of Cotney's plea agreement with the government, he must register as a sex offender, surrender all current law enforcement licenses and certifications and neither seek nor hold a law enforcement job or one where he would have custodial authority over others, including as a correctional or probation officer or bail bondsman.
Cotney pleaded guilty to four counts involving three inmates, but the conduct he admitted to in his plea agreement also includes a fourth inmate.
In his plea, Cotney admitted to coercing one inmate to submit to a sexual act on four occasions in 2009, three times at Cotney's home and once on the side of the road during a trip to Oxford to get automobile parts.
Cotney admitted to violating the civil rights of a second inmate in 2009, forcing that inmate to submit to a strip search with no law enforcement justification.
Cotney admitted to repeatedly and improperly grabbing and touching a third inmate in 2009 and 2010, including telling the inmate that he needed to check whether the inmate had any new tattoos and ordering the inmate to remove all his clothing. The inmate had tattoos on his legs, chest, hipbones, arms and groin, and Cotney felt all the tattoos, according to his plea agreement.
Cotney admitted to falsely accusing a fourth inmate of possessing contraband and ordering that inmate into lockdown for 45 days and then having him transferred to a state prison, all in retaliation for the man rejecting a sexual proposition from Cotney.
By pleading guilty to four of the eight charges in the indictment, Cotney could face a year in prison on each of the four counts of using his authority as a jail administrator to deprive the inmates of their civil rights.
The FBI and the Alabama Bureau of Investigation investigated the case, which Assistant U.S. Attorney Tamarra Matthews Johnson is prosecuting.
Clay County Jail Administrator Pleads Guilty to Violating Inmates' Civil RightsRead the Press Release
BIRMINGHAM -- The former jail administrator of the Clay County Detention Center pleaded guilty Wednesday to violating the civil rights of inmates by using his authority to sexually abuse or otherwise deprive the inmates of their constitutional rights, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
JEFFREY SCOTT COTNEY, 48, of Ashland, entered his plea before U.S. District Judge L. Scott Coogler to four counts of deprivation of rights under color of law between May 2009 and spring 2010 while he worked as Clay County's jail administrator. As part of that job, Cotney ran the inmate worker program, recommending which inmates could participate in the program and supervising the inmate workers.
A federal grand jury indicted Cotney in November. His sentencing is scheduled May 27.
As part of Cotney's plea agreement with the government, he must register as a sex offender, surrender all current law enforcement licenses and certifications and neither seek nor hold a law enforcement job or one where he would have custodial authority over others, including as a correctional or probation officer or bail bondsman.
Cotney pleaded guilty to four counts involving three inmates, but the conduct he admitted to in his plea agreement also includes a fourth inmate.
In his plea, Cotney admitted to coercing one inmate to submit to a sexual act on four occasions in 2009, three times at Cotney's home and once on the side of the road during a trip to Oxford to get automobile parts.
Cotney admitted to violating the civil rights of a second inmate in 2009, forcing that inmate to submit to a strip search with no law enforcement justification.
Cotney admitted to repeatedly and improperly grabbing and touching a third inmate in 2009 and 2010, including telling the inmate that he needed to check whether the inmate had any new tattoos and ordering the inmate to remove all his clothing. The inmate had tattoos on his legs, chest, hipbones, arms and groin, and Cotney felt all the tattoos, according to his plea agreement.
Cotney admitted to falsely accusing a fourth inmate of possessing contraband and ordering that inmate into lockdown for 45 days and then having him transferred to a state prison, all in retaliation for the man rejecting a sexual proposition from Cotney.
By pleading guilty to four of the eight charges in the indictment, Cotney could face a year in prison on each of the four counts of using his authority as a jail administrator to deprive the inmates of their civil rights.
The FBI and the Alabama Bureau of Investigation investigated the case, which Assistant U.S. Attorney Tamarra Matthews Johnson is prosecuting.
Churchill Man Sentenced for Unlawfully Selling Drug SamplesRead the Press Release
PITTSBURGH - A resident of Allegheny County, Pennsylvania, has been sentenced in federal court to six months imprisonment, six months of home confinement, three years of supervised release, and forfeiture of $56,000, on his conviction of unlawfully selling drug samples, United States Attorney David J. Hickton announced today.
United States District Judge Cathy Bissoon imposed the sentence on Lawrence A. Swanson, 54.
According to the information presented to the court, from in and around January 2005, to in and around May 2011, Swanson sold prescription drug samples such as samples of Allegra, Avalide, Avapro, Avelox, Benicar, Celebrex, Crestor, Cymbalta, Diovan, Diovan HCT, Evista, Janumet, Januvia, Lexapro, Lovaza, Lyrica, Micardis HCT, Namenda, Nexium, Plavix, Prevacid, Prilosec, Seroquel XR, Singular, TriCor, Vytorin, Zetia, Zyprexa, Benicar, Lipitor, and Pristi Q, to two local pharmacists. Those pharmacists were separately charged. Swanson met his supplier in various grocery store parking lots late at night to receive garbage bags filled with the samples. The samples had the lot numbers and expiration dates removed from the pill packaging making it impossible to know if the drugs had expired or had been recalled. There was a possibility of harm to patients, but no harm or injury to any patient was ever reported. Over the time period charged, Swanson collected a total of $181,108.07.
Judge Bissoon stated that engaging in the black market sale of sample drugs is a serious crime that threatens the integrity of our medicine distribution system, and in order to deter others and to properly punish this defendant a jail sentence is necessary.
Assistant United States Attorney Nelson P. Cohen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the U.S. Food and Drug Administration-Office of Criminal Investigations, and the Internal Revenue Service-Criminal Investigation, for the investigation leading to the successful prosecution of Lawrence A. Swanson.
California State Senator Ronald Calderon Charged with Taking Bribes in Exchange for Official Acts on Behalf of Hospital Owner and Independent Film Studio That Was Actually an FBI FrontRead the Press Release
LOS ANGELES – Ronald Calderon, a member of the California State Senate, has agreed to surrendered to federal authorities on Monday after being named in a federal grand jury indictment that accuses him of taking tens of thousands of dollars in bribes from a businessman and from people who were associated with a Hollywood film studio, but who were in actuality undercover FBI agents.
Ronald S. Calderon, 56, of Montebello, is charged in a 24-count indictment that was returned late yesterday by a federal grand jury with mail fraud, wire fraud, honest services fraud, bribery, conspiracy to commit money laundering, money laundering and aiding in the filing of false tax returns.
The indictment also charges Thomas M. Calderon, 59, also of Montebello, who is Ronald’s brother and a former member of the California State Assembly. Along with his brother, Thomas Calderon is charged in the money laundering conspiracy and with seven substantive counts of money laundering.
Tom Calderon self-surrendered this morning after being informed of the indictment and is expected to be arraigned this afternoon in United States District Court.
Ron Calderon is travelling and has agreed to surrender Monday morning. Ron Calderon’s arraignment will be Monday afternoon.
The indictment describes a scheme in which Ron Calderon allegedly solicited and accepted approximately $100,000 in cash bribes – as well as plane trips, gourmet dinners and trips to golf resorts – in exchange for official acts, such as supporting legislation that would be favorable to those who paid the bribes and opposing legislation that would be harmful to them. The indictment further alleges that Ron Calderon attempted to convince other public officials to support and oppose legislation.
“Public corruption is a betrayal of the public trust that threatens the integrity of our democratic institutions,” said United States Attorney André Birotte Jr. “Senator Calderon is accused of accepting tens of thousands of dollars in bribes and using the powers of his elected office to enrich himself and his brother Tom, rather than for the benefit of the public he was sworn to serve.”
Bill Lewis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, stated: “Corruption victimizes each and every one of us. The indictment alleges Mr. Calderon traded influence for cash in the 30th District and beyond. In addition to robbing us of taxpayer money, corrupt practices rob us of trust in government.”
In the first part of the bribery scheme, Ron Calderon allegedly took bribes from Michael Drobot, the former owner of Pacific Hospital in Long Beach, a major provider of spinal surgeries that were often paid by workers’ compensation programs. California law allowed the hospital to pass on to insurance companies the full cost it had paid for medical hardware it used during spinal surgeries. In another case filed this morning, Drobot admitted that his hospital exploited this law, which was often called the “spinal pass-through,” by using hardware that had been purchased at highly inflated prices from companies that Drobot controlled and passing this cost along to insurance providers. Drobot allegedly bribed Ron Calderon so that he would use his public office to preserve this law that helped Drobot maintain a long-running and lucrative health care fraud scheme.
While the corruption indictment does not implicate Ron Calderon in the health care fraud scheme, Ron Calderon is charged with taking bribes from Drobot to preserve the spinal pass-through law. The indictment specifically alleges that Drobot bribed Ron Calderon by hiring Calderon’s college-age son to work as a file clerk at his company and paying him approximately $30,000 over the course of three summers. Ron Calderon’s son showed up for only about 15 days of work each summer, according to the indictment, which also accused Ron Calderon of accepting plane trips, golf outings and expensive dinners from Drobot. Ron Calderon allegedly arranged meetings between Drobot and other public officials and helped Drobot attempt to persuade the other legislators to keep the spinal pass-through law in effect.
In another case filed this morning in United States District Court, Drobot has agreed to plead guilty to charges of conspiracy and paying illegal kickbacks. In his plea agreement, Drobot admits paying bribes to Ron Calderon.
In another part of the bribery scheme, Ron Calderon allegedly solicited and accepted bribes from people he thought were associated with an independent film studio, but who were in fact undercover FBI agents. Ron Calderon solicited and accepted bribes in exchange for supporting an expansion of a state law that gave tax credits to studios that produced independent films in California. The Film Tax Credit applied to productions of at least $1 million, but, in exchange for bribes, Ron Calderon agreed to support new legislation to reduce this threshold to $750,000, according to the indictment. The indictment specifically alleges that Ron Calderon agreed to support the new Film Tax Credit legislation in exchange for his daughter being paid $3,000 a month for a job he knew she simply did not perform.
According to the indictment, Ron Calderon took several official actions with respect to reducing the threshold for the Film Tax Credit. Ron Calderon signed an official letter indicating that he supported a lower threshold, he met with other state senators to discuss the benefits of lowering the threshold, and he “caused legislation to be introduced in the Senate, which he intended to use as a vehicle to create a separate tax credit,” according to the indictment.
In addition to the nearly $40,000 paid to his daughter, Ron Calderon allegedly solicited from the undercover FBI agents payments that included $5,000 for his son’s college tuition and $25,000 to Californians for Diversity, a non-profit political organization operated by Tom Calderon.
Both Calderons face money laundering charges for allegedly funneling bribe money through Californians for Diversity and Tom Calderon’s consulting firm, some of which went to Ron Calderon and his daughter.
Ron Calderon faces two tax fraud charges for allegedly helping in the preparation of false tax returns that fraudulently claimed business expense deductions in relation to the money his son received from Drobot.
Joel P. Garland, the Acting Special Agent in Charge for IRS Criminal Investigation’s Los Angeles Field Office, commented: “Ronald and Thomas Calderon were granted the privilege of political office to better the lives of the citizens they represented, but instead Ronald Calderon used his office to commit bribery, tax and other crimes for their own selfish benefit. Today’s actions reaffirm our commitment to this joint agency task force and our pursuit of justice. Public officials hold a position of trust and those who commit bribery, tax fraud and other crimes, take note.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If Ron Calderon were to be convicted of the 24 charges in the indictment, he would face a statutory maximum sentence of 396 years in federal prison.
If Tom Calderon is convicted of the money laundering charges alleged in the indictment, he would face a statutory maximum sentence of 160 years in prison.
The investigation into the Calderons was conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation.
Release No. 14-026
California Residents Plead Guilty in Scheme to Defraud NissanRead the Press Release
Francisco DeLaRosa, 40, of West Covina, Calif., and Tracey Young, 45, of Los Angeles, pleaded guilty today before U.S. Chief District Judge William J. Haynes, Jr. to conspiring to launder money derived from a scheme to defraud Nissan North America, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Young and DeLaRosa each admitted in their plea agreement that from March 2007 through April 2008, they conspired to launder the proceeds that resulted from the scheme to defraud Nissan. Young and DeLaRosa admitted that they, and others, would approach individuals who owned Nissan vehicles to obtain information such as the owner’s name, address, and vehicle identification number. They then passed this information to Kenneth Carter a co-defendant and Nissan employee, who used the information to file false and fraudulent claims at Nissan requesting settlement checks.
After the checks were issued by Nissan to settle the fictitious claims, Young and DeLaRosa, and others, directed the Nissan owners to deposit the checks into their bank accounts or to cash the checks and return funds from the settlement checks to Young and DeLaRosa, who then transferred the funds either directly or indirectly to Kenneth Carter, who was involved in the scheme. Young admitted she often kept a portion of the proceeds.
According to the indictment, approximately 80 false claims were filed as part of the scheme, totaling approximately $571,500.
DeLaRosa agreed to pay restitution of at least $31,500 for his portion of the scheme, and Young agreed to pay restitution in the amount of at least $191,250 for her portion of the scheme.Sentencing is scheduled for June 13, 2014. Each defendant faces up to 20 years in prison and a fine of $500,000.
On November 18, 2013, another co-defendant in the case, Adrian Franklin, 40, of Chandler, Arizona, pleaded guilty to one count of conspiracy to commit money laundering. Franklin is scheduled to be sentenced on March 28, 2014.
The indictment that also named three other defendants whose cases are still pending: Kenneth Carter, 44, of Corona, Calif; Bruce Young, 49, of Compton, Calif; and Wendell Young, 34, of Inglewood, Calif. The indictment charged conspiracy, mail fraud, and conspiracy to commit money laundering, and alleged that Nissan lost approximately $571,500 as a result of the scheme.
An indictment is merely an accusation and all persons are presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the IRSB Criminal Investigation and the Tennessee Bureau of Investigation. Assistant United States Attorney Kathryn Ward Booth represents the government.
Burlington, N.J., Real Estate Consultant Sentenced to 20 Months in PrisonRead the Press Release
Helped Clients Fraudulently Obtain Multiple Home Equity Loans.
CAMDEN, N.J. – A real estate consultant was sentenced today to 20 months in prison for helping five people defraud banks by obtaining multiple home equity loans on the same property, U.S. Attorney Paul J. Fishman announced.
William Barksdale, 47, of Burlington, N.J., previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to commit wire fraud. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Barksdale was the owner of Barksdale Business Group, Barksdale Investment Properties, and Barksdale Loan Consultants. He devised a scheme to obtain multiple home equity lines of credit on a single home for more than the property was worth. A homeowner would submit loan applications to several lenders simultaneously without advising each lender about the other applications. Any bank conducting a title search would receive a clean title report because the other home equity lines of credit had not yet been recorded.
Barksdale advised five people to secure multiple home equity loans using his scheme, and each obtained at least three home equity loans on a single property. One individual obtained seven home equity loans on one home. Each person paid Barksdale a portion of the fraudulent proceeds. Many of the home equity loans later went into default. The scheme caused more than $1 million in losses.
In addition to the prison term, Judge Kugler sentenced Barksdale to five years of supervised release. A restitution hearing will be held at a later date.
U.S. Attorney Fishman credited agents of the FBI’s Trenton Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford, and agents of the N.J. Division of Criminal Justice, under the leadership of Director Elie Honig, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
14-058Defense counsel: Robert N. Agre Esq., Haddonfield, N.J.
Barksdale Information
Burlington, N.J., Real Estate Consultant Sentenced to 20 Months in PrisonRead the Press Release
Helped Clients Fraudulently Obtain Multiple Home Equity Loans.
CAMDEN, N.J. – A real estate consultant was sentenced today to 20 months in prison for helping five people defraud banks by obtaining multiple home equity loans on the same property, U.S. Attorney Paul J. Fishman announced.
William Barksdale, 47, of Burlington, N.J., previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to commit wire fraud. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Barksdale was the owner of Barksdale Business Group, Barksdale Investment Properties, and Barksdale Loan Consultants. He devised a scheme to obtain multiple home equity lines of credit on a single home for more than the property was worth. A homeowner would submit loan applications to several lenders simultaneously without advising each lender about the other applications. Any bank conducting a title search would receive a clean title report because the other home equity lines of credit had not yet been recorded.
Barksdale advised five people to secure multiple home equity loans using his scheme, and each obtained at least three home equity loans on a single property. One individual obtained seven home equity loans on one home. Each person paid Barksdale a portion of the fraudulent proceeds. Many of the home equity loans later went into default. The scheme caused more than $1 million in losses.
In addition to the prison term, Judge Kugler sentenced Barksdale to five years of supervised release. A restitution hearing will be held at a later date.
U.S. Attorney Fishman credited agents of the FBI’s Trenton Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford, and agents of the N.J. Division of Criminal Justice, under the leadership of Director Elie Honig, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
14-058Defense counsel: Robert N. Agre Esq., Haddonfield, N.J.
Barksdale Information
Bossier City Man Pleads Guilty to Production and Sale of Counterfeit U.S. MoneyRead the Press Release
SHREVEPORT, La. –United States Attorney Stephanie A. Finley announced today that Corey Crosby, 23, of Bossier City, pleaded guilty before U.S. District Judge Donald E. Walter, to making and selling counterfeit Federal Reserve notes.
According to evidence presented at the guilty plea, authorities used a confidential informant to buy counterfeit money in the Shreveport/Bossier City area in June of 2013. Crosby was identified as the seller and manufacturer after the informant bought counterfeit money and uncut sheets of counterfeit money from him in denominations of $100, $20, and $10. Investigators also matched Crosby’s fingerprints to a printer used to manufacture the counterfeit notes.
Crosby faces up to 20 years in prison, three years of supervised release, restitution, and a fine of $250,000 for one count of counterfeiting obligations or securities. He will also face the same penalties for one count of dealing in counterfeit obligations or securities. Sentencing was set for May 22, 2014.
The U.S. Secret Service - Shreveport Office, Caddo Parish Sheriff’s Office, Shreveport Police Department, and Bossier Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Brandon B Brown is prosecuting the case.
Birmingham Man Gets 12 1/2 Years in Prison for Selling HeroinRead the Press Release
BIRMINGHAM -- A federal judge Thursday sentenced a Birmingham man to more than 12 years in prison for distributing heroin, announced U.S. Attorney Joyce White Vance and federal Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.JAMES DARNELL LEVERT, 31, pleaded guilty in October to two counts of selling heroin in Birmingham in December 2012 . One sale involved .35 grams of heroin; the second sale was .32 grams. U.S. District Judge Inge P. Johnson sentenced Levert to 12 years and seven months in prison, to be followed by four years of supervised release. The judge sentenced Levert as a "career offender" under the federal sentencing guidelines.
Levert's plea follows a plea earlier this month of HAROLD D. MIMS, 31, of Birmingham, to selling heroin that resulted in a death. That charge carries a mandatory minimum 20-year sentence. Mims was charged in connection to the death last year of William C. Wiggins in Tuscaloosa.
Both Levert and Mims were arrested during a roundup of heroin dealers in north Alabama in September. The roundup was part of an initiative launched in 2012 by the U.S. Attorney's Office, the DEA, district attorneys, and many federal, state and local agencies to attack the supply of heroin in the Northern District of Alabama.
"It is gratifying that so many law enforcement agencies in north Alabama recognize the dangerous scope of the heroin problem in our district and that they came together last year to take dealers off the streets," Vance said. "The roundup brought an immediate drop in the number of heroin overdose deaths in north Alabama, which have spiraled in the last few years, and helped to alert the community that the deadly problem exists here."
"As more of these defendants are sentenced, I hope more people realize that the heroin problem is real, and that selling heroin will lead to prison. If you sell heroin that causes a death, you will be prosecuted and you will get at least 20 years in prison," she said.
As a result of the September sweep, 49 people were indicted on drug distribution charges over the first several months of 2013. Of those 49 defendants, 39 have pleaded guilty, one was tried and convicted, four cases were dismissed, four are in pre-trial diversion programs, and one defendant remains a fugitive.
The DEA investigated the cases in conjunction with many state and local agencies. Assistant U.S. Attorney L. James Weil Jr. is prosecuting the cases.
Barre Man Indicted for Convenience Store RobberyRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Lee Jay Manning, 28, of Barre, Vermont, was charged in a three-count indictment with robbing a Cumberland Farms convenience store in Barre on February 12, 2014, in violation of 18 U.S.C. § 1951, possessing a firearm in furtherance of that robbery, in violation of 18 U.S.C. § 924(c), and possessing that firearm as a convicted felon, in violation of 18 U.S.C. § 922(g).
According to court records, Manning robbed the Cumberland Farms convenience store in Barre on the evening of February 12, 2014 with a semi-automatic handgun. He was apprehended by law enforcement, in possession of the handgun, shortly after the robbery. In 2004, Manning was convicted in Vermont of burglary, which is a felony offense. Federal law prohibits convicted felons from possessing firearms.
Following his arrest on February 12, 2014, Manning appeared in federal court on February 13, 2014 to answer to a preliminary complaint. Magistrate Judge John M. Conroy ordered Manning detained at that time. The federal grand jury returned the three-count indictment on February 20, 2014. The court has yet to schedule Manning’s arraignment.
If convicted of the robbery charge, Manning faces a statutory maximum term of imprisonment of 20 years. A conviction for possession of a firearm as a convicted felon carries a statutory maximum of 10 years in prison. If convicted of carrying the firearm in furtherance of the robbery, Manning faces a maximum of life imprisonment and mandatory minimum term of five years in prison. Federal law requires that Manning serve such a sentence consecutively to any other sentence he receives.
The actual sentence in the event of conviction would be determined by the court with reference to the advisory federal sentencing guidelines. United States Attorney Tristram J. Coffin stated that the indictment is an accusation only and that Manning is presumed to be innocent unless and until proven guilty.
United States Attorney Coffin commended the efforts of the Bureau of Alcohol Tobacco Firearms and Explosives, the Barre City Police Department, the Barre Town Police Department, the Berlin Police Department, and the Vermont State Police for their investigation into this matter.
The prosecution is being handled by Assistant U.S. Attorney Timothy C. Doherty, Jr. Manning is represented by the Federal Public Defender’s Office.
Ardmore Woman Pleads Guilty to Theft of Government FundsRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that ALLISON FAITH BATTLES, age 29, of Ardmore, Oklahoma, pled guilty to Making A False Statement, in violation of Title 18, United States Code, Section 1001(a)(2) and Theft Of Government Funds, in violation of Title 18, United States Code, Section 641.
The charge arose from an investigation by the Social Security Administration, Office of Inspector General. The defendant was indicted in January, 2014.
The Indictment alleged that on or about February 16, 2012, in the Eastern District of Oklahoma, the Defendant did knowingly make and cause to be made a materially false, fictitious, and fraudulent statement and representation in a matter within the jurisdiction of the Social Security Administration, an agency of the United States.
It further alleged that from in or about July 2009 to in or about April 2012, in the Eastern District of Oklahoma, the Defendant did willfully and knowingly embezzle, steal and convert to her own use, money and things of value from the Oklahoma Department of Human Services, an agency receiving and administering funds on behalf of the United States, which had been paid to the defendant as food stamps and medical benefits to which the defendant knew she was not entitled and having a value in excess of $1,000.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion.
The statutory range of punishment is not more than 10 years imprisonment and/or up to a $250,000.00 fine.
Assistant United States Attorney Chris Wilson represented the United States.
Another Drug Conspiracy and Money Laundering Ring Leader Heads to Prison for 30 YearsRead the Press Release
CORPUS CHRISTI, Texas – Jose Fidel Guajardo aka “Garfield,” 42, a leader of a drug trafficking and money laundering conspiracy, has been handed a significant federal sentence, announced United States Attorney Kenneth Magidson.
Today, U.S. District Judge Janis Graham Jack determined Guajardo to be a leader in the conspiracy and sentenced him to a total of 360 months in federal prison. In handing down the sentence, Judge Jack considered his extensive criminal history and the need to protect the public from future criminal conduct. She further ordered he serve a five-year-term of supervised release following completion of his prison term and also ordered forfeiture of his interest in a property on Aaron Street in Corpus Christi.
Another leader in the conspiracy, Manuel Pena aka “Super,” also received a 30-year sentence earlier this year. Several others – Ignacio Pena aka “Nacho,” Raul Leal Martinez aka “Indio” or “Wahoo,” and David Pete Dominguez aka “Buda,” all also of Corpus Christi, previously pleaded guilty in relation to the case as well and were sentenced to 168, 85 and 120 months, respectively. Julieann Gutierrez was sentenced yesterday to 220 months, while the last defendant, Rocky Bazaldua aka “Rock,” will be sentenced March 20, 2014.
The indictment charged all of the defendants with conspiring from June 1, 2008, to Jan. 8, 2013, to possess with intent to distribute more than 50 grams of methamphetamine. The investigation revealed Guajardo, a member of the Texas Syndicate prison gang, orchestrated various drug deals in the Corpus Christi area. Evidence proved that in March 2011 Guajardo made deals to provide 20 kilograms of cocaine to a drug distributor located in San Antonio. Guajardo also made deals with Manuel Pena to purchase methamphetamine for distribution in the Corpus Christi area.
Guajardo and Martinez also pleaded guilty to conspiring to launder the proceeds of their drug sales through various financial transactions. Evidence showed that Guajardo invested significant amounts of cash into the material, labor and services supplied in the building of homes in the Corpus Christi area. Agents determined this cash was the proceeds of illegal drug sales. As part of his plea agreement, Guajardo also agreed to forfeit his interests in various properties around Corpus Christi.
Guajardo has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated through a joint effort by the Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, Texas Department of Public Safety, the Nueces and Kleberg County Sheriff’s Offices, and the Corpus Christi, Aransas Pass and Portland Police Departments. The case is being prosecuted by Assistant United States Attorney Michael Hess.
Alvarado Pharmacy and Its Owner Ordered to Repay Medicare over $1 MillionRead the Press Release
United States Attorney Laura E. Duffy announced today that Alvarado Medical Plaza Pharmacy, Inc. was sentenced by United States District Court Judge Janis L. Sammartino to repay Medicare over $1 million, and to pay a $10,000 fine, following its conviction of federal Health Care Fraud for billing Medicare for unapproved oncology drugs.
The pharmacy had admitted that between May 2010 and June 2011, it ordered $752,688.00 of prescription oncology drugs from Quality Specialty Products (QSP) in Canada. The drugs ordered from QSP were unapproved versions of drugs sold in the United States as Avastin, Eloxatin, Gemzar, Neupogen, Rituxin, Taxotere, and Zometa, which were shipped from Canada to defendant in San Diego. The pharmacy further admitted that it was aware that the drugs were not intended for sale in the United States because (a) the packaging and shipping documents indicated that the drugs were shipped to the office from outside the United States; (b) many of the invoices identified the origin of the drugs and intended markets as countries other than the United States; (c) the labels did not bear the “RX Only” language required by the Food and Drug Administration (FDA); (d) the labels did not bear the National Drug Code (NDC) numbers found on the labels of the drugs intended for the U.S. market; (e) many of the labels had information in foreign languages; (f) the drugs were purchased at a substantial discount; and (g) the packing slips indicated that the drugs came from Canada.
The pharmacy further admitted that it supplied the prescription oncology drugs purchased from QSP to doctors, pre-mixed in infusion bags, without advising the doctors that the drugs came from abroad and were not approved for use in the United States. As known to the pharmacy, Medicare provides reimbursement only for drugs approved for use in the United States. Each drug approved by the FDA for use in the United States is assigned a specific code by Medicare for reimbursement claim purposes. The pharmacy admitted that it was aware that some of the drugs purchased from QSP would be administered to Medicare patients, and that doctors would bill Medicare for those drugs using the reimbursement code for U.S. approved drugs. The pharmacy admitted that by causing doctors to falsely claim that the drugs were approved by the FDA for use on patients in the United States, Medicare was fraudulently overbilled at least $1,004,284.04 between May 2010 and June 2011.
Also today Judge Sammartino sentenced William Burdine, a pharmacist licensed in the State of California and the owner of Alvarado Medical Plaza Pharmacy. Burdine was sentenced to 8 months’ home confinement, and ordered to complete 240 hours of community service over his five year period of probation. Burdine admitted that he ordered the prescription oncology drugs from QSP in Canada, knowing that it was unlawful for him to import those drugs into the United States under the Food, Drug and Cosmetic Act, and was convicted of Importation of Goods Contrary to Law. Burdine was also ordered to repay Medicare in the same amount as Alvarado Medical Plaza Pharmacy.
Criminal Case No. 13cr4295-JLS
DEFENDANTSAlvarado Medical Plaza Pharmacy, Inc.
Incorporated:1992
William Burdine
Age: 65 San Diego, California SUMMARY OF CHARGESAlvarado Medical Plaza Pharmacy Inc.
Health Care Fraud, in Violation of Title 18, United States Code, Section 1347.
Maximum Penalty for a corporation: 5 years probation, a $500,000 fine and $400 special assessment.William Burdine
AGENCY
Importation Contrary to Law, in Violation of Title 18, United States Code, Section 545.
Maximum Penalty: 10 years in custody and/or $250,000 fine and a $100 special assessmentU.S. Food and Drug Administration, Office of Criminal Investigations
Accountant Sentenced to 2 Years in Prison for Conspiracy, Violating Tax LawsRead the Press Release
PITTSBURGH - A Hampton Township resident was sentenced yesterday in federal court to 24 months imprisonment and a fine of $30,000 on his conviction of conspiracy to harbor illegal aliens and violating federal tax laws, United States Attorney David J. Hickton announced today.
United States District Judge Terrence F. McVerry imposed the sentence on Martin R. Bujaky, 65, of Gibsonia, Pa.
According to information presented to the court, between approximately 2000 and 2007, Bujaky, an accountant, conspired with others to harbor out-of-status aliens employed in the hotel housekeeping industry in the Pittsburgh area, as well as Cleveland, Columbus, and Cincinnati, Ohio, by knowingly preparing false tax returns on behalf of their employers, which failed to report their wages as income. Bujaky assisted in the preparation and presentation of false quarterly tax returns for portions of 2005 and 2006 for B&M Best Consulting Co. by understating the size of the payroll and the employment taxes due to the Internal Revenue Service. These false returns accounted for approximately $9 million in unreported wages. United States Attorney Hickton stated that the entire scheme, over the course of seven years, resulted in a tax loss of approximately $3.7 million.
Prior to imposing sentence, Judge McVerry stated that Bujaky’s role in the conspiracy enabled his co-conspirators to conceal their true earnings and continue to victimize the workers.
Assistant United States Attorney Margaret E. Picking prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service-Criminal Investigation, Department of Homeland Security-Homeland Security Investigations (HSI), and U.S. Department of Labor for the investigation leading to the successful prosecution of Bujaky.
20 February 2014
Worldwide Drug Trafficker SentencedRead the Press Release
SACRAMENTO, Calif. —Shiraz Malik, 36, a Pakistani national residing in Warsaw, Poland, was sentenced today by United States District Judge Lawrence K. Karlton to 15 years in prison for conspiring to distribute controlled substances and listed chemicals, conspiring to import controlled substances and ephedrine into the United States, and conspiring to launder money, United States Attorney Benjamin B. Wagner announced today.
According to court documents, from June 1, 2008, through September 8, 2011, Malik sold pharmaceuticals and highly regulated chemicals to customers in the United States, Europe, Mexico, and other countries and conspired to launder the profits of that activity. Malik took orders from customers via the Internet and coordinated with people in Pakistan to fill the orders. The drugs were sent from Pakistan to the customers, and Malik emailed the tracking numbers that his co-conspirators in Pakistan gave him to the customers. Malik sold large quantities of ephedrine to customers in Mexico, the country of origin for most of the methamphetamine sold in the United States.
In May 2008, DEA agents learned of two business-to-business Internet websites where businesses were offering to sell and illegally import into the United States pharmaceutical drugs, such as oxycontin, that are controlled substances under U.S. law, and regulated chemicals, such as ephedrine HCL, which is a precursor chemical used to manufacture methamphetamine. Two businesses that were offering controlled substances through the websites were Shama Medical Store in Karachi, Pakistan and Good Luck Trading Company in the United Kingdom. Both businesses referred customers to email addresses associated with Malik.
According to court documents, in the course of the three-year investigation, agents made eight undercover purchases of various drugs from Malik that were shipped from a post office in Lahore, Pakistan to addresses in the Sacramento area. In each instance, the purchase request was sent to Malik via email and payment instructions were sent by Malik to the undercover agent. Malik maintained at least two bank accounts in Poland that he used to receive payments for Internet drug purchases from undercover agents.
According to documents filed in the case, undercover agents met with Malik on three separate occasions in Milan, Italy (June 2009), Vienna, Austria (November 2009), and in Budapest, Hungary (August 2010). During those meetings, with the cooperation of law enforcement officials in the host countries, the agents posed as U.S.-based illegal drug dealers and had discussions with Malik about future purchases and possible collaborative efforts. In the meetings, Malik explained that his operation sold a variety of pharmaceutical and controlled substances including: steroids, OxyContin, ketamine, diazepam, lidocaine, illegal drugs including heroin from Pakistan, Ecstasy from Holland, methamphetamine (believed to be made in the Czech Republic), and ephedrine from India or China.
“Mr. Malik operated an international supermarket for illegal drugs,” said U.S. Attorney Benjamin Wagner. “As the Internet allows everyone access to international markets, federal law enforcement officials will be vigilant in protecting this country from overseas predators who profit off the addiction of others. Here, the defendant supplied addictive drugs, including oxycontin and heroin, to other drug traffickers in the U.S. and around the world, and supplied materials needed to make methamphetamine to clandestine producers in Mexico and Africa. Malik had never set foot in this country before he was arrested and extradited here on these charges. This should serve as a lesson to those drug traffickers who ship illegal drugs into the United States and who think they are untouchable.”Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick stated, “Shiraz Malik led an elaborate international drug trafficking network using the anonymity of the Internet to distribute dangerous controlled substances, pharmaceutical narcotics, and substances for illicit drug manufacture to customers around the world. The outstanding assistance and support DEA received from our foreign and domestic counterparts led to the successful prosecution of Malik. This sentencing sends a clear message that law enforcement will work across international borders to seek justice against criminal organizations.”
“Today’s sentence reflects the seriousness of this crime,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “The defendant used sophisticated methods to move large quantities of drug money around the world. CI is committed to following the money to financially disrupt and dismantle narcotics trafficking organizations.”
“This sentence is entirely fitting given the serious health risks associated with this defendant’s criminal activities,” said Dan Lane, assistant special agent in charge for Homeland Security Investigations (HSI) Sacramento. “The illegal sale of controlled substances and prescription drugs over the Internet represents a major safety threat for consumers who buy medications online. HSI will continue to work closely with its law enforcement partners here and overseas to identify and dismantle highly dangerous schemes such as this one.”
Malik was arrested at the Prague International Airport on September 8, 2011, and was extradited on June 22, 2012, from the Czech Republic to the United States. He pleaded guilty to the conspiracy counts on October 7, 2013.
This case is the product of an investigation by the U.S. Drug Enforcement Administration, the Internal Revenue Service, Criminal Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the El Dorado County Sheriff’s Office. Assistant U.S. Attorney Richard J. Bender and former Assistant U.S. Attorney Daniel S. McConkie prosecuted the case with the assistance of attorneys from the U.S. Department of Justice’s: Office of International Affairs, the Narcotics and Dangerous Drugs Section, and the Organized Crime and Drug Enforcement Task Force Section.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of OCDETF is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Woman Serving Drug Sentence Charged with Contempt for Refusing to Testify at Co-Defendant's TrialRead the Press Release
PITTSBURGH - A Pittsburgh woman has been indicted by a federal grand jury in Pittsburgh on a charge of criminal contempt of court, United States Attorney David J. Hickton announced today.
The one-count indictment, returned on Feb. 18, named Marquetta Lavelle Mitchell, 41, as the sole defendant.
According to the indictment, Mitchell disobeyed and resisted the lawful process, order and command of a Court of the United States, that is, she refused to testify at the Oct. 16-22, 2012, trial of Andre Williams, for charges that included conspiracy to possess with intent to distribute five kilograms or more of cocaine, at Case Number 11-116, despite: the subpoena that required her to do so; an instruction from Senior United States District Court Judge Alan N. Bloch that her Fifth Amendment rights had been extinguished; and a written order compelling her to testify pursuant to a grant of immunity from Senior United States District Court Judge Alan N. Bloch.
The law provides for an unlimited period of incarceration and/or a fine, at the discretion of the Court. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant. Court records reveal that before Mitchell refused to testify at the trial of her co-defendant Andre Williams, Mitchell herself was prosecuted for federal drug charges and is serving a 10-year sentence.
Assistant United States Attorney Ross E. Lenhardt is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, Homeland Security Investigations and the 21st Judicial District Drug Task Force in Tennessee conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Winchester Man Sentenced on Child Porn ChargesRead the Press Release
HARRISONBURG, VIRGINIA – A Winchester man who previously admitted to enticing 19 minors into engaging in sexually explicit conduct via web cams, was sentenced yesterday in the United States District Court for the Western District of Virginia in Harrisonburg.
Brian Patrick Aronhalt, 33, of Winchester, Va., previously pled guilty to one count of conspiracy to produce child pornography, one count of enticing minors to engage in sexually explicit conduct, four counts of producing child pornography, one count of possession of child pornography and one count of distributing child pornography.
Yesterday in District Court, he was sentenced to 20 years in federal prison and a lifetime of supervised release following his prison term. Restitution in this matter will be determined during a separate hearing to be scheduled in the next 90 days.
“Mr. Aronhalt used deception to repeatedly abuse children,” United States Attorney Timothy J. Heaphy said today. “His case serves as a grim reminder for parents to monitor what their children are doing online. Those of us who work in law enforcement will continue to pursue and prosecute predators like Mr. Aronhalt. We won’t be successful, however, unless parents acknowledge the threat and take steps to help their children stay safe online.”
Evidence presented at yesterday’s hearing showed that Aronhalt posed as a minor female online and enticed numerous minor boys to masturbate for him via webcam, which he recorded. Evidence also showed that the defendant’s collection of self-produced webcam videos depicted at least 100 separate minors.
The defendant learned from others online how to use a sexually explicit video of a female to appear as a live webcast to the minor boys. Using the pre-recorded video, Aronhalt enticed the boys to masturbate for him via webcam and recorded the sexually explicit conduct.
In addition, during the execution of a search warrant, agents from the Federal Bureau of Investigation and the DC Internet Crimes Against Children Task Force found thousands of images depicting child pornography on Aronhalt’s computers.
The investigation of the case was conducted by the Federal Bureau of Investigation, the Northern Virginia DC Internet Crimes against Children Task Force and the Child Exploitation and Obscenity Section of the Department of Justice. Assistant United States Attorney Nancy Healey will prosecute the case for the United States along with Trial Attorney Sarah Chang, U.S. Department of Justice, Child Exploitation and Obscenity Section (CEOS). CEOS’s High Technology Investigative Unit (HTIU) conducted computer forensic analysis for the case.
Wichita Man IndictedOn Charge of Attempting to Rob Dollar GeneralRead the Press Release
KANSAS CITY, KAN. - A Wichita man was indicted today on a federal charge of attempting to rob a Dollar General store, U.S. Attorney Barry Grissom said.
Emanuel Goines, 46, is charged with a Feb. 10, 2014, attempted robbery at Dollar General, 2020 E. 21st, in Wichita, Kan. Goines initially was charged in a criminal complaint filed Feb. 12 in U.S. District Court in Wichita. An affidavit alleges that on Feb. 10, 2014, officers were working on a special detail in response to an increase in commercial robberies. Two officers in an unmarked car saw Goines enter the Dollar General store at 2020 E. 21st North. When marked cars responded, Goines ran from the store. Officers found him hiding beneath a truck in the 2200 block of North Piatt.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. The Wichita Police Department investigated. Assistant U.S. Attorney David Lind is prosecuting.
OTHER INDICTMENTS
Justin Johnson, 38, and Penny Johnson, 37, the owners of Timberview Construction in Lenexa, Kan., are charged with one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering.
The indictment alleges they diverted the proceeds of a loan guaranteed by the Small Business Administration for purchases that were not part of the stated purpose of the loan. It also alleges they laundered proceeds of the crime through wire transfers to bank accounts they controlled.
If convicted, they face a maximum penalty of 30 years in federal prison and a fine up to $1 million on the bank fraud charge, and a maximum penalty of 10 years and a fine up to $250,000 on the money laundering charge. The Small Business Administration, the Internal Revenue Service, the Federal Deposit Insurance Corporation, the Federal Reserve Board – OIG, the U.S. Secret Service and the Office of the Special Inspector General for the Troubled Asset Relief Program investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting.
John Lee Cline, 48, Halstead, Kan., is charged with a Jan. 21, 2014, robbery of the Intrust Bank at 3932 W. 13th North in Wichita, Kan.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney David Lind is prosecuting.
Tomas Zepeda, Jr., 34, and Shawna Lynn Mathis, 31, are charged with one count of possession with intent to distribute methamphetamine. The crime is alleged to have occurred Feb. 11, 2014 in Thomas County, Kan.
If convicted, they face a maximum penalty of 20 years in federal prison and a fine up to $1 million. The Kansas Bureau of Investigation investigated. Assistant U.S. Attorney Mona Furst is prosecuting.
Thomas Lee Wohlford, 31, Wichita, Kan., is charged with unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred Feb. 11, 2014, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Wichita Police Department investigated. Assistant U.S. Attorney Matt Treaster is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Warwick Resident Sentenced to 3 Years in Federal Prison for Possession of Child PornographyRead the Press Release
PROVIDENCE, R.I. – Leonard O’Neill, 58, of Warwick, R.I., was sentenced today to 36 months in federal prison for possession of child pornography, announced United States Attorney Peter F. Neronha, Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police, and Cheryl DiPrizio, Special Agent in Charge of the Northeast Field Office of the United States Naval Criminal Investigative Service (NCIS).
At sentencing, U.S. District Court Judge Mary M. Lisi ordered O’Neill to serve 10 years supervised release upon completion of his prison term. O’Neill pleaded guilty on October 17, 2013.
According to information presented to the court, in May 2012, members of the Rhode Island State Police Internet Crimes Against Children (ICAC) task force were conducting an on-line Internet investigation of file-sharing networks to identify users possessing and sharing child pornography. On May 21, 2012, a Special Agent from NCIS assigned to the ICAC task force observed 235 files of child pornography being shared from an IP address in Warwick, R.I. The agent made a direct connection to the IP address and downloaded two image files and two zip files containing dozens of images of child pornography. The IP address was later identified as belonging to the defendant.
According to information presented to the court, on November 28, 2012, federal, state and local law enforcement members of the ICAC task force executed a court authorized search of the defendant’s Warwick residence and seized a laptop computer, two desktop computers, a video camera and two external hard drives. A forensic analysis of the computers and hard drives revealed 15,000 images and 2,430 videos depicting prepubescent children engaged in sexual acts with adult males, including images involving infants, bondage and bestiality. The National Center for Missing and Exploited Children is attempting to determine the identity of the victims.
Leonard, who was not at home at the time his residence was searched, was arrested a short time later by members of the ICAC task force at his place of employment.
Leonard, who was released to home confinement on $50,000 secured bond following his arraignment in federal court on July 11, 2013, wasordered to self-surrender by March 20, 2014, to begin serving his term of imprisonment.The case was prosecuted by Assistant U.S. Attorney Lee H. Vilker.
The Rhode Island Internet Crimes Against Children (ICAC) task force actively engages in investigative efforts to identify subjects involved in child exploitation-related activities. The Rhode Island ICAC Task Force Program, funded by the Department of Justice, is administered by the Rhode Island State Police and supports a national network of multi-agency, multi-jurisdictional task forces engaged in investigations, forensic examinations, and prosecutions related to Internet crimes against children and technology-facilitated child sexual exploitation.
The Rhode Island ICAC task force is comprised of members of the Rhode Island State Police Computer Crimes Unit along with detectives from the Bristol, Coventry, Jamestown, Middletown, North Kingstown, Pawtucket, Portsmouth, Warwick, and Woonsocket Police Departments, and agents from Homeland Security Investigations, United States Naval Criminal Investigative Service and United States Postal Inspection Services
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Vanceboro Man Sentenced for Transporting Child PornographyRead the Press Release
WILMINGTON – United States Attorney Thomas G. Walker announced that today in federal court Senior United States District Judge James C. Fox sentenced WILLIAM CHRISTOPHER BUTLER , 55, to 240 months imprisonment, followed by a life-term of supervised release and he is required to register as a Sex Offender.
A Federal Grand Jury returned a Criminal Indictment on July 17, 2013. On October 1, 2013, BUTLER pled guilty to one count of transporting child pornography.
According to the investigation, on March 19, 2013, Greenville Police Department was notified by Inmotion, a media transfer and video production company, that they had received 8mm film from BUTLER requesting it be transferred to DVD. The film contained child pornography. During an interview with BUTLER on March 21, 2013, he admitted that he had transported the film from Bonita Springs, Florida to North Carolina when he moved to Vanceboro.
Investigation of this case was conducted by the Greenville Police Department and North Carolina State Bureau of Investigation, through the partnership of the North Carolina Internet Crimes Against Children Task Force. Assistant United States Attorney Ethan Ontjes prosecuted the case for the United States.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Uniontown Man Sentenced to Prison for Illegally Possessing RevolverRead the Press Release
PITTSBURGH - A convicted felon was sentenced yesterday afternoon in federal court to 18 months imprisonment followed by three years supervised release on his conviction of violating federal firearms laws, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on William Kent Bricker, 56, of Uniontown, Pa.
According to information presented to the court, on Sept. 2, 2012, Bricker, being a convicted felon, illegally possessed a .32 caliber revolver. Bricker was convicted of armed bank robbery in 1993 and illegal firearms possession in 2004. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm.
Assistant United States Attorney Charles A. Eberle prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Pennsylvania State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Bricker. This case was prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
Two Sentenced in Madison County Tax Sale SchemeRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Scott McLean, 51, of Belleville, Illinois, and John A. Vassen, 56, of O’Fallon, Illinois, were sentenced in the United States District Court in East St. Louis, Ill., for violating the Sherman Antitrust Act.
Evidence presented at the sentencing hearing established that McLean and Vassen participated in a price fixing scheme orchestrated by former Madison County Treasurer Fred Bathon. Bathon structured the Madison County tax sale to permit the tax buyers to charge distressed homeowners inflated interest rates from 2005-2008 in exchange for campaign contributions.
“These tax buyers repeatedly gouged financially distressed homeowners with confiscatory interest rates enabled by a corrupt treasurer. This crime was a toxic combination of public corruption fueled by private greed. The people of Southern Illinois deserve better.” said United States Attorney Wigginton. US Attorney Wigginton praised the work of the Metro East Public Corruption Task Force, including agents from the IRS and the FBI. “These dedicated men and women work long hours for little pay to keep the citizens of our District safe from those who seek only to enrich themselves at our expense.”
McLean was sentenced to 18 months in prison, to serve three (3) years supervised release, pay a $25,000 fine and a special assessment of $100. Vassen was sentenced to 24 months in prison, to serve three (3) years supervised release, pay a $25,000 fine and a special assessment of $100. Both sentences were in excess of the recommendation from the United States Sentencing Guidelines. A third tax buyer, Barrett R. Rochman, 70, of Makonda, Ill., also pled guilty to participating in noncompetitive tax sales on October 17, 2013. Rochman is scheduled to be sentenced on March 25, 2014.
The former treasurer of Madison County, Illinois, Fred Bathon pled guilty to antitrust charges on February 5, 2013. Bathon was sentenced on December 6, 2013, to thirty (30) months in prison, two (2) years supervised release, a fine of $20,000, and a special assessment of $100.
The charges allege that at Illinois tax lien auctions, investors bid to purchase tax lien certificates issued against delinquent tax payers. Investors are supposed to compete to purchase these tax liens by bidding on the interest rate the property owner will be required to pay prior to redeeming the tax lien attached to the owner's property. The bid opens at no more than the statutory maximum of 18% and through a competitive bidding process can be driven as low as 0 percent. The bidder offering the least penalty percentage rate, i.e., the bidder who is willing to allow the owner to redeem his property for the smallest penalty, is allowed to purchase the tax lien. As such, competitive bidding benefits financially distressed homeowners by reducing the amount of money that they have to pay to save their home from foreclosure; however, that same system reduces the profit made by tax buyers. Tax buyers prefer to receive high interest rates, which corresponds to higher profits.
For the tax sales conducted in 2005-2008, Fred Bathon structured the tax sales in a way that eliminated competitive bidding and allowed the tax buyers to engage in price fixing by only bidding the statutory maximum interest rate of 18%. The tax buyers who pled guilty today were charged with making campaign donations to Bathon in exchange for receiving property tax liens at non-competitive interest rates.
By 2007 and 2008, the bid rigging and price fixing was so pervasive that distressed homeowners were charged the statutory maximum interest rate on nearly every property tax lien sold. During the tax auction occurring November 14-15, 2007, 2,549 out of 2,574 property tax liens were awarded to bidders for the statutory maximum interest rate of 18%, which represented 99.03% of the property tax liens auctioned. During the tax auction occurring November 13-14, 2008, 2,290 out of 2,364 property tax liens were awarded to bidders for the statutory maximum interest rate of 18%, which represented 96.86% of the property tax liens auctioned.
The investigation was conducted through the Metro East Public Corruption Task Force by agents from the Internal Revenue Service, and the Federal Bureau of Investigation. The case is being prosecuted by US Attorney Stephen R. Wigginton and Assistant United States Attorney Steven D. Weinhoeft.
Two Grand Haven Men Sentenced for Stealing Firearms from Gun Stores in Ottawa and Muskegon CountiesRead the Press Release
GRAND RAPIDS, MICHIGAN – Muskegon County Prosecutor D.J. Hilson, Ottawa County Prosecutor Ronald J. Frantz, and ATF Special Agent in Charge, Steven Bogdalek joined U.S. Attorney Patrick Miles in announcing that Joseph Jerry Sweet, age 33, and Ronald Patrick Cook, age 28, both from the Grand Haven area, were sentenced for their roles in stealing firearms from Federal Firearms Licensees. Cook received a sentence of 156 months, and Sweet received a sentence of 188 months. The defendants were ordered to pay restitution in the amount of $23,339.25 for the unrecovered firearms and the damage to the stores. Both were ordered to serve a three-year period of supervised release following their prison sentences.
Sometime during the night on June 27, 2013, the two defendants broke into the Renegade River store in Spring Lake, Michigan, stealing eight firearms. On July 13, 2013, the two broke into the Grasmeyer Brothers Gun & Supply Shop in Dalton Township, Michigan, at approximately 12:30 a.m., stealing 24 firearms, including twenty handguns and four rifles. Nine of the Grasmeyer firearms were later recovered. Most of the remaining firearms were sold or traded to drug dealers, including an individual who was the defendant’s main heroin supplier.
Federal law prohibits the theft of firearms from Federal Firearms Licensees. Both stores are federally-licensed firearms dealers. The defendants faced a maximum sentence of twenty years in prison.
This case resulted from a coordinated investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Muskegon County Sheriff’s Department, the Grand Haven Public Safety Department, the Spring Lake/Ferrysburg Police Department, and the Michigan State Police-West Michigan Enforcement Team (WEMET).U.S. Attorney Miles commented: “These significant federal sentences are the result of an on-going cooperative state and federal effort to combat gun violence in our communities, and they underscore the danger posed by this criminal behavior.
Muskegon County Prosecutor Hilson added: “When it comes to gun violence, the Muskegon County Prosecutor’s Office will continue to work hand in hand with the U.S. Attorney’s Office to make sure that those individuals who engage in illegal gun activity are removed from our neighborhoods so that we as a community are able to enjoy safe days and quiet nights.”
Ottawa County Prosecutor Frantz stated: “We appreciate the cooperative efforts of both federal and local law enforcement in bringing these matters to a just conclusion.” ATF Special Agent in Charge Bogdalek added, “we understand that firearms which are stolen typically end up in the hands of violent criminals that threaten the safety of our communities every day. Criminals should know that when they steal firearms from a Federal Firearms Licensee (FFL), ATF will respond with our state and local law enforcement partners to apprehend them.”
The Honorable Robert J. Jonker presided over this case.
END
Two Florida Men Sentenced for Defrauding Thousands of Homeowners in $4 Million<br /> Nationwide Home Loan Modification ScamRead the Press Release
Two Florida men were sentenced today to serve 84 months in prison for defrauding thousands of homeowners in a $4 million nationwide home loan modification scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Romero made the announcement.
Christopher S. Godfrey, 44, of Delray Beach, Fla., and Dennis Fischer, 42, of Highland Beach, Fla., were sentenced by U.S. District Court Judge Rya W. Zobel of the District of Massachusetts and ordered to serve three years of supervised release following their prison term.
The defendants were convicted on Nov. 14, 2013, after a two-week trial, of one count of conspiracy, eight counts of wire fraud, eight counts of mail fraud and one count of misusing a government seal.
“These men stole millions of dollars from struggling Americans who had achieved the dream of home ownership and sought help to refinance their mortgages and save their homes from foreclosure,” said Acting Assistant Attorney General Raman. “Today’s sentences should serve as a warning to anyone who exploits distressed homeowners and prevents them from getting the real help they need.”
“These convictions and sentences should send the message that those who prey on the most economically vulnerable among us to line their own pockets will be caught, convicted and given the long prison sentences they deserve,” said U.S. Attorney Ortiz.
“Scamming homeowners by selling for $400 to $2,000 what is a free application to TARP’s housing program is a despicable crime, and for their crimes, Godfrey and Fischer will each spend the next seven years in federal prison,” said Special Inspector General Romero. “Godfrey and Fischer swindled homeowners out of more than $4 million, which they used for extravagant trips to Dubai and France, luxury shopping sprees, and to pay their own mortgages on waterfront homes in Florida beach communities. SIGTARP and our law enforcement partners will put an end to scams that exploit TARP and bring swift justice to con men who perpetrate these scams.”
According to the evidence presented at trial, from January 2009 through May 2011, Godfrey, Fischer and their employees, operating under the name Home Owners Protection Economics Inc. (HOPE), made a series of misrepresentations to induce struggling homeowners to pay HOPE a $400 to $2,000 up-front fee in exchange for HOPE’s help obtaining federally funded home loan modifications. Among these misrepresentations were the claims that, with HOPE’s assistance, the homeowner was guaranteed to receive a loan modification under the Home Affordable Modification Program (HAMP), which is part of the Troubled Asset Relief Program (TARP) and is a federally funded mortgage-assistance program. For example, the defendants routinely claimed that the homeowner had already been approved for a loan modification, provided phony “approval codes,” quoted new (and wholly fictitious) mortgage terms and due dates, touted their 98 percent past success rate and claimed that they were “underwriters” or were otherwise affiliated with the homeowners’ mortgage companies. HOPE also claimed that it would offer homeowners refunds in the unlikely event that they did not receive a loan modification.
According to the trial evidence, in exchange for the up-front fees, HOPE sent its customers, including homeowners in Massachusetts, a do-it-yourself application package, which was virtually identical to the application that the government provides free of charge. The HOPE customers had no advantage in the application process, and, in fact, most of their applications were denied. Through these misrepresentations, HOPE was able to persuade thousands of homeowners to pay more than $4 million in fees.
Trial evidence also showed that the defendants claimed that they operated HOPE as a non-profit, when, in fact, they operated as a for-profit telemarketing fraud scheme. Godfrey and Fischer used funds that homeowners had paid into the purported non-profit’s bank account to pay for their trips to Dubai and the South of France, to shop at luxury stores, to pay for their pool service, and to pay the mortgages on their waterfront home and condominium. The remaining two defendants in the case, Vernell Burris Jr. and Brian Kelly, have pleaded guilty and will be sentenced on Feb. 25, 2014.
The case was investigated by SIGTARP and is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder in the District of Massachusetts’s Computer Crimes Unit.Two Florida Men Sentenced for Defrauding Thousands of Homeowners in $4 Million Nationwide Home Loan Modification ScamRead the Press Release
BOSTON – Two Florida men were sentenced today to serve 84 months in prison for defrauding thousands of homeowners in a $4 million nationwide home loan modification scheme.
United States Attorney Carmen M. Ortiz, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Romero made the announcement.
Christopher S. Godfrey, 44, of Delray Beach, Fla., and Dennis Fischer, 42, of Highland Beach, Fla., were sentenced by U.S. District Court Judge Rya W. Zobel and ordered to serve three years of supervised release following their prison term.
The defendants were convicted on Nov. 14, 2013, after a two-week trial, of one count of conspiracy, eight counts of wire fraud, eight counts of mail fraud and one count of misusing a government seal.
“These convictions and sentences should send the message that those who prey on the most economically vulnerable among us to line their own pockets will be caught, convicted and given the long prison sentences they deserve,” said U.S. Attorney Ortiz.“These men stole millions of dollars from struggling Americans who had achieved the dream of home ownership and sought help to refinance their mortgages and save their homes from foreclosure,” said Acting Assistant Attorney General Raman. “Today’s sentences should serve as a warning to anyone who exploits distressed homeowners and prevents them from getting the real help they need.”
“Scamming homeowners by selling for $400 to $2,000 what is a free application to TARP’s housing program is a despicable crime, and for their crimes, Godfrey and Fischer will each spend the next seven years in federal prison,” said Special Inspector General Romero. “Godfrey and Fischer swindled homeowners out of more than $4 million, which they used for extravagant trips to Dubai and France, luxury shopping sprees, and to pay their own mortgages on waterfront homes in Florida beach communities. SIGTARP and our law enforcement partners will put an end to scams that exploit TARP and bring swift justice to con men who perpetrate these scams.”
According to the evidence presented at trial, from January 2009 through May 2011, Godfrey, Fischer and their employees, operating under the name Home Owners Protection Economics Inc. (HOPE), made a series of misrepresentations to induce struggling homeowners to pay HOPE a $400 to $2,000 up-front fee in exchange for HOPE’s help obtaining federally funded home loan modifications. Among these misrepresentations were the claims that, with HOPE’s assistance, the homeowner was guaranteed to receive a loan modification under the Home Affordable Modification Program (HAMP), which is part of the Troubled Asset Relief Program (TARP) and is a federally funded mortgage-assistance program. For example, the defendants routinely claimed that the homeowner had already been approved for a loan modification, provided phony “approval codes,” quoted new (and wholly fictitious) mortgage terms and due dates, touted their 98 percent past success rate and claimed that they were “underwriters” or were otherwise affiliated with the homeowners’ mortgage companies. HOPE also claimed that it would offer homeowners refunds in the unlikely event that they did not receive a loan modification.
According to the trial evidence, in exchange for the up-front fees, HOPE sent its customers, including homeowners in Massachusetts, a do-it-yourself application package, which was virtually identical to the application that the government provides free of charge. The HOPE customers had no advantage in the application process, and, in fact, most of their applications were denied. Through these misrepresentations, HOPE was able to persuade thousands of homeowners to pay more than $4 million in fees.
Trial evidence also showed that the defendants claimed that they operated HOPE as a non-profit, when, in fact, they operated as a for-profit telemarketing fraud scheme. Godfrey and Fischer used funds that homeowners had paid into the purported non-profit’s bank account to pay for their trips to Dubai and the South of France, to shop at luxury stores, to pay for their pool service, and to pay the mortgages on their waterfront home and condominium. The remaining two defendants in the case, Vernell Burris Jr. and Brian Kelly, have pleaded guilty and will be sentenced on Feb. 25, 2014.
The case was investigated by SIGTARP, and is being prosecuted by Assistant U.S. Attorney Adam Bookbinder of Ortiz’s Computer Crimes Unit and Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section.Texas Man Charged with Hate Crime for Assault Based on Victim’s Sexual OrientationRead the Press Release
Brice Johnson, 19, of Springtown, Texas, has been charged with willfully causing bodily injury to a person because of the actual or perceived sexual orientation of that person in a federal criminal complaint, the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Northern District of Texas and the FBI Dallas Division announced. The complaint was filed on Feb. 12, 2014, in the U.S. District Court in Fort Worth, Texas.
Johnson has been in state custody since his arrest on Sept. 10, 2013, and he made his initial appearance in federal court today.
According to the affidavit filed with the criminal complaint, in the early morning hours of Sept. 2, 2013, the adult male victim, identified as A.K., connected with Johnson through the cell phone application for MeetMe.com. A.K.’s MeetMe.com page indicated he was a gay man, while Johnson’s page indicated he was not gay. During their communications, Johnson said that he was interested in engaging in sexual activity with A.K. He invited A.K. to his home, gave A.K. his cell phone number and address and they exchanged text messages planning their sexual activity.
After A.K. showed up at the house, Johnson severely beat him, then put him into the trunk of A.K.’s car and drove him to a friend’s home. Based on ligature marks on A.K.’s wrists, it appears that he was bound with an electrical cord while he was in the trunk of the car. Individuals at the home told Johnson to take A.K. to the hospital or they would call the police, and Johnson eventually drove the victim to an Emergency Medical Services station in Springtown.
A.K. was hospitalized for 10 days in Fort Worth, and he was diagnosed and treated for multiple skull and facial fractures. The investigation revealed that on the night of the incident, Johnson saved A.K.’s cell phone number using a gay slur as a contact name and Johnson later stated that he was playing a prank on the victim because of his sexual orientation, again using a gay slur when referring to A.K. According to the affidavit, A.K. said that he had no physical contact with Johnson prior to the attack.
A federal complaint is a written statement of the essential facts of the offenses being charged and must be made under oath before a magistrate judge. The defendant is presumed innocent until proven guilty. However, the statutory maximum penalty upon conviction for the offense as charged is 10 years in federal prison and a $250,000 fine. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment, and an indictment could include other charges that increase the maximum penalty.
The investigation is being conducted by the FBI, the Springtown Police Department and the Parker County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Cara Foos Pierce and Trial Attorney Saeed Mody of the Civil Rights Division.
Steven Marshall Fout Sentenced to 151 Months in Prison for Distribution and Possession of Child PornographyRead the Press Release
KNOXVILLE, Tenn.- Steven Marshall Fout, 24, of Sweetwater , Tenn., was sentenced on Feb. 20, 2014, to serve 151 months in prison by the Honorable Danny C. Reeves, visiting U.S. District Judge. The sentence was imposed as the result of a guilty plea entered by Fout in June 2013, to federal charges of knowingly distributing and possessing child pornography.
Upon his release from prison, Judge Reeves imposed a 30-year term during which Fout’s activities will be supervised by the U.S. Probation Office. He was also ordered to pay $2,500 in restitution to victims whose digital images were found on in his possession.
Also, as a result of the conviction, the federal Sex Offender Registration and Notification Act will require Fout to register following his incarceration with the state sex offender registry anywhere he resides, is employed, or is a student.
The investigation leading to the conviction and sentencing of Fout was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Matthew T. Morris represented the United States at sentencing.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Six Indicted in Fraud Cases Related to Telemarketing Operations That Solicited Millions to Fund Fake MoviesRead the Press Release
LOS ANGELES – Four people were arrested today on federal fraud charges stemming from telemarketing operations that allegedly solicited investments in movies with false promises of high returns with little risk.
Today’s arrests are the result of two federal grand jury indictments unsealed this morning. The indictments charge a total of six defendants who allegedly participated in separate fundraising schemes related to bogus film projects. While one movie script was written, no movies were ever actually produced. The indictments allege that the defendants executed the schemes to defraud victims around the nation and collectively caused losses of several million dollars.
The first case is contained in a 29-count indictment relating to two companies -- Mutual Entertainment LLC and Film Shoot LLC. Four defendants related to this scheme are charged with mail fraud, wire fraud, attempted wire fraud and making false statements.
The defendants are:
Samuel Braslau, 53, of Mar Vista, an attorney and co-founder of the companies, who was arrested this morning;
Rand Jay Chortkoff, 64, of Encino, a co-founder of the companies, who was arrested this morning;
Stuart Rawitt, 47, of West Hollywood, a salesperson, who was arrested this morning;
Robert Matias, 50, of Granada Hills, a salesperson who is a fugitive.
The three arrested this morning are expected to be arraigned this afternoon in United States District Court in Los Angeles.Also today, the Securities and Exchange Commission filed a civil lawsuit that alleges Braslau, Chortkoff and Rawiit defrauded investors (see: http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370540815507)
In the second case, the operators of another company – C22 in the San Fernando Valley -- were named in a 19-count indictment that accuses them of mail fraud, wire fraud, and attempted wire fraud. The two named in an indictment focusing on a company known under several permutations of C22 are:
Mack Machen, 70, of Sunland, the president of C22, who has agreed to self-surrender and be arraigned this afternoon; and
Anthony David Millan, 37, of Chula Vista, the CEO of C22, who was arrested this morning and is expected to make his first court appearance this afternoon in United States District Court in Santa Ana.
The first indictment focuses on the activities of a company called Mutual Entertainment LLC and later renamed Film Shoot LLC, which allegedly bilked investors in a motion picture called “Marcel” and later renamed “The Smuggler.”
The indictment alleges that the defendants raised money for the film through boiler room telemarketing operations. The telemarketers allegedly made fraudulent pitches to investors after first representing themselves to be independent “surveyors” from a national research firm. Victims were falsely told that 64 percent of investor money would be used to produce the film, and that investors would be first in line to receive any revenue generated by the movie, according to the indictment, which states that the defendants also falsely claimed to have contracted with well-known actors to appear in “The Smuggler.”
During the course of the Mutual Entertainment/Film Shoot scheme, the defendants allegedly persuaded more than 60 investors across the nation to invest a total of $1.8 million in the movie that was never produced.
In 2011, the Alabama Securities Commission filed an administrative order against the company and one of the defendants, concluding that the defendants in that action had failed to comply with many provisions of the Code of Alabama 1975 pertaining to the offer and sale of investments. As alleged in the indictment, following the issuance of this order, two other defendants changed the name of the company from Mutual Entertainment to Film Shoot, and the name of the movie from “Marcel” to “The Smuggler,” in an attempt to hide the Alabama Order from potential investors.
The second indictment unsealed today focuses on C22 Capital, Inc. and C22 LLC, Inc. This indictment alleges that telemarketers for C22 fraudulently induced investments to fund a movie titled “Beyond the Mat.”
According to the indictment, the C22 defendants and their telemarketers made cold-calls to potential investors and told the victims that their money would be used to provide short-term “bridge loans.” Later, the defendants began soliciting money for investment in “Beyond the Mat.” The indictment alleges that the defendants issued promissory notes and promised returns of up to 13 percent per year.
Approximately 80 victims were fraudulently induced to invest in C22, and during the course of the scheme they lost more than $3 million, according to the indictment.
In late 2011, the California Department of Corporations issued a Desist and Refrain order the directed C22 LLC, Inc. to stop doing business due to its fraudulent practices. The indictment alleges that the defendants continued to conduct their business under a different name.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The wire fraud and mail charges each carry a statutory maximum penalty of 20 years in federal prison.
The criminal investigation is being investigated by the Federal Bureau of Investigation.
Release No. 14-024
Sentencing for February 14 - 20, 2014Read the Press Release
Maya Latoya Wiltz, 31, of Riverbank, California, was sentenced by Federal District Court Judge Alan B. Johnson on February 20, 2014, for fraud using an unauthorized access device. Wiltz was arrested in Stanislaus County, California. She received 30 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and restitution in the amount of $102,813.87 to 34 victims. This case was investigated by the Federal Bureau of Investigation and U.S. Secret Service.
Travis J. Harding, 20, of Gillette, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on February 19, 2014, for conspiracy to possess stolen firearms. Harding was arrested in Gillette, Wyoming. He received 41 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Cody Lynn Clark, 41, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on February 18, 2014, for possession with intent to distribute, and to distributing 78 grams of methamphetamine and for possession of a firearm in furtherance of a drug trafficking crime. Clark was arrested in Cheyenne, Wyoming. He received 106 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $800.00 fine and a $200.00 special assessment. This case was investigated by the Cheyenne Police Department and the Wyoming Division of Criminal Investigation.
Levi W. Massman, 22, of Casper, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on February 18, 2014, for conspiracy to possess stolen firearms. Massman was arrested in Casper, Wyoming. He received 60 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and restitution in the amount of $11,642.81, joint and several with other defendants. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Vertis McDonald, 32, of Casper, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on February 14, 2014, for conspiracy to possess stolen firearms. McDonald was arrested in Casper, Wyoming. He received 42 months imprisonment, to be followed by three years of supervised release, and was ordered to a $100.00 special assessment. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Self-employed Munhall Man Took $18K in Compensation Benefits Through FraudRead the Press Release
PITTSBURGH – A suburban Pittsburgh man pleaded guilty in federal court to a charge of Federal Employees’ Compensation Fraud, United States Attorney David J. Hickton announced today.
William J. Miller, Jr., 52, of Munhall, Pa., pleaded guilty to one felony count before Senior United States District Judge Maurice B. Cohill, Jr.
According to information presented to the Court at the guilty plea, Miller, in connection with the application and receipt of federal employees' compensation moneys and benefits, concealed and covered up the fact that he was self-employed and involved in a business enterprise. Miller's fraudulent conduct resulted in compensation checks totaling approximately $18,104.57 being issued to him during the period from March 13, 2011, to November 19, 2011, checks he knew he was not entitled to.
Judge Cohill scheduled sentencing for May 29, 2014, at 1:30 p.m. The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentence, the court released Miller on bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The Department of Labor, Office of Inspector General, and the United States Postal Service, Office of Inspector General, conducted the investigation leading to the Information in this case.
San Antonio Bank Robber Sentenced to 70 Months in Federal PrisonRead the Press Release
This morning, 27-year-old Larry Elmoe Drummer of San Antonio was sentenced to 70 months in federal prison and ordered to pay $8,581 for robbing the Chase Bank located in the Park North shopping center on February 1, 2013, announced United States Attorney Robert Pitman and Federal Bureau of Investigation Acting Special Agent in Charge Aaron C. Rouse, San Antonio Division.
On November 13, 2013, Drummer pleaded guilty to one count of bank robbery for the above mentioned incident. At the time of his guilty plea, Drummer agreed to pay restitution for his role in three additional bank robberies, namely: $4,296 for the robbery of Frost Bank in the 10000 block of Wurzbach Road on December 19, 2012; $1,000 for the robbery of Security Service Bank in the Park North shopping center on January 23, 2013; and, $11,000 for an earlier robbery of Chase Bank in the Park North shopping center on January 2, 2013. The total restitution ordered in this case to be paid by the defendant amounts to $24,887.
This investigation was conducted by the Federal Bureau of Investigation together with the San Antonio Police Department. Assistant United States Attorney Matthew Lathrop prosecuted this case on behalf of the Government.
Sacramento Dentist Indicted for Fraudulent Billing Scheme Involving Unnecessary Dental WorkRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned an 18-count indictment today against David M. Lewis, 60, of Sacramento, charging him with one count of conspiracy to commit health care fraud and mail fraud and 17 counts of health care fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Lewis was a dentist who operated a dental practice in Sacramento. Beginning in late 2008 or early 2009, Lewis began targeting United Parcel Service employees for dental treatment because their health care plan under the Northern California General Teamsters Security Fund provided 100 percent coverage without any annual limits. Lewis offered cash and other incentives to UPS patients for receiving dental treatment from Lewis, or for recruiting other UPS employees to receive such treatment.
The indictment alleges that in some instances, Lewis caused claims to be submitted to Delta Health Systems, which administered the UPS health care plan, that falsely billed the plan for work that was never performed. In many other instances, Lewis performed unnecessary dental work on healthy teeth of the UPS employees, including root canals, and claims were submitted to Delta for payment for these unnecessary services.
The indictment also alleges that Lewis created false narratives for work that was not performed or created false statements about purported pre-existing dental conditions of the UPS employee’ teeth to justify the work performed. In some instances, Lewis drilled into healthy teeth, installed a temporary filling, instructed his assistants to take X-rays of the temporary fillings, and then submitted claims to Delta with X-rays of the temporary fillings, falsely claiming that the X-rays depicted tooth decay justifying further restorative procedures.
The total amount of fraudulent billings submitted to Delta as a result of the conspiracy and health care fraud was more than $1 million.
This case is the product of an investigation by the U.S. Department of Labor ‑ Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor ‑ Employee Benefits Security Administration with assistance from the Dental Board of California. Assistant United States Attorney Todd A. Pickles is prosecuting the case.
If convicted, Lewis faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gross gain from the fraud. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Queens, N.Y., Men Sentenced to 57 Months in Prison for Large-Scale Atm Skimming Scheme Targeting New Jersey Bank CustomersRead the Press Release
NEWARK, N.J. - Two Romanian natives residing in Queens, N.Y., were sentenced today to prison terms for a scheme to steal account information from bank customers throughout New York, New Jersey, and Connecticut by installing secret card-reading devices on ATMs, U.S. Attorney Paul J. Fishman announced.
Ioan Leusca, a/k/a “Ionel Spinu,” 30, and Dezso Gyapias, a/k/a “Valentin Folea,” 29, were each sentenced to 57 months in prison.
The defendants previously pleaded guilty before U.S. District Judge William J. Martini to separate informations charging each with one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Leusca and Gyapias have been held without bail since their arrests on Jan. 13, 2013. Judge Martini imposed the sentences today in Newark federal court.
According to documents filed in these and other cases and statements made in court:
Leusca and Gyapias admitted that they and their fellow conspirators installed skimmers and pinhole cameras at bank ATMs. The devices were installed on multiple ATMs in New Jersey and Connecticut. Each skimmer, an electronic device, would read and record identity and account information contained in the magnetic strip of a customer’s ATM card. The pinhole camera secretly recorded bank customers’ keystrokes as they entered their personal identification numbers. Leusca and Gyapias admitted that they and other conspirators went back to collect the devices containing the recorded information.
Leusca and Gyapias acknowledged that after the stolen customer account and identification information had been loaded onto blank ATM cards, they and their conspirators used those cards to steal $985,000 from Citibank ATMs in New Jersey, New York and Connecticut.
The charges leading to their sentences arose from a larger investigation into a skimming scheme that targeted customers in the tri-state area in 2012 and early 2013. Together, the schemes cost a number of banks a total of $5 million in cash stolen from their customer accounts.
Of the eight others charged in relation to the wider scheme, all Romanian nationals who lived in Queens, seven are in custody. The leaders of the scheme, Marius Vintila, 31, and Bogdan Radu, 31, were charged by criminal complaint on July 10, 2013. Vintila and Radu designed and created the actual skimming devices and pinhole cameras and recruited individuals, including Leusca and Gyapias, to install them on bank ATMs. Vintila used an alias to rent multiple self-storage units, in which he stored the contents of an entire skimming operation, including skimming devices, pinhole cameras, super glue, tape, SD cards, batteries, computers, molds, fraudulent ATM cards, and cash proceeds. Radu taught co-conspirators how to install the skimming devices, and used an alias to move skimming devices and cash proceeds overseas.Other charged conspirators, including Constantin Ginga, 53, Marius Cotiga, 35, Constantin Pendus, 30, Emil Revesz, 30, Florin Apetrei, 18 and another individual charged as “first name unknown, last name unknown,” a/k/a “Chioru,” installed the devices designed by Vintila and Radu onto bank ATMs and used fraudulent ATM cards to steal millions of dollars. They used hats, jackets, scarves and sunglasses to disguise themselves while installing the devices and while using the cards to withdraw money.
Ginga, Cotiga, Leusca, Gyapias, Pendus, Revesz, Apetrei, and Radu are in custody in New Jersey and being held without bail. Ginga previously pleaded guilty to conspiring to commit bank fraud and aggravated identity theft and awaits sentencing on Feb. 26, 2014. On Sept. 24, 2013, Vintila was apprehended in Sweden and extradited to the United States in February 2014. Vintila was charged in a six-count indictment on Feb.18, 2014, with conspiracy to commit bank fraud, aggravated identity theft, conspiracy to possess 15 or more counterfeit access devices, possession of 15 or more counterfeit access devices, conspiracy to possess access device-making equipment, and possession of access device-making equipment. The individual known as “Chioru” remains at large.
In addition to the prison terms, Judge Martini sentenced Leusca and Gyapias to two years each of supervised release and to pay $985,000 in restitution.
U.S. Attorney Fishman praised special agents of the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge James Mottola, along with special agents of the U.S. Department of Homeland Security’s Immigration and Customs Enforcement, Homeland Security Investigations in Newark, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s sentences.
The charges and allegations against the other defendants charged in the pending complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and David Eskew of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Leusca: Frank Arleo Esq., West Orange, N.J.
Gyapias: Joseph Rotella Esq., NewarkPuerto Rico/U.S. Virgin Islands High Intensity Drug Trafficking Area Program Receives National RecognitionRead the Press Release
St. Thomas, VI – White House Drug Control Policy Director Gil Kerlikowske has awarded the St. Thomas Major Organization Investigations unit of the Puerto Rico/U.S. Virgin Islands High Intensity Drug Trafficking Area program (HIDTA) the 2013 national award for Outstanding Task Force Effort, announced United States Attorney Ronald W. Sharpe.
United States Attorney Sharpe, who served as the Chairperson of the PR/USVI HIDTA from June 2012 through December 2013, congratulated the St. Thomas MOI on being chosen for this prestigious award. “Close collaboration with our federal and local law enforcement partners is critical to our efforts to reduce the supply of illicit drugs and the violence associated with its distribution and use,” Sharpe said.
“The DEA Caribbean Division is very proud of the accomplishments of our St. Thomas HIDTA Task Force and we congratulate them for this well-deserved 2013 ONDCP Director's Award,” said Vito Salvatore Guarino, Special Agent in Charge of the DEA Caribbean Division “Key to the St Thomas HIDTA Task Force sustained success is the close coordination and joint work with our law enforcement partners VIPD, ATF, FBI, HSI, IRS, CBP, and the USMS.”
Disrupting and dismantling drug trafficking organizations is fundamental to the mission of the PR/USVI HIDTA. In furtherance of this goal, the St. Thomas Major Organization Investigations (MOI) unit formed an operation known by law enforcement as “Operation Franco’s Folly/Excess Baggage” that targeted the trafficking of narcotics through the St. Thomas Airport. Through the course of the operation, law enforcement employed innovative investigative tactics while maintaining a high level of secrecy which led to the arrest and indictment of 28 individuals, the seizure of over 40 kilograms of cocaine destined for Puerto Rico, Florida and Georgia, and the seizure of a substantial amount of assets. Operation Franco’s Folly also uncovered significant public corruption, which led to the arrest and prosecution of several airport baggage handlers and a Transportation Security Administration officer, whose official positions and access to sensitive areas of the airport posed serious risks to national security.
Significantly, the operation revealed that Roberto Tapia, Director of Enforcement Operations for the Virgin Islands Department of Planning and Natural Resources (DPNR) utilized his official supervisory law enforcement position as well as a DPNR vessel and automobile to facilitate narcotics smuggling. Angelo Hill, former Chief of the Virgin Islands Police Department (VIPD) assisted Tapia by helping him traffic narcotics and avoid detection by federal law enforcement. In September 2013, Tapia pleaded guilty to racketeering charges in connection with his use of DPNR as a criminal enterprise to engage in illegal drug trafficking activities. Angelo Hill also pleaded guilty to related charges. Both men are in custody awaiting sentencing.
The Office of National Drug Control Policy’s HIDTA program provides federal resources to designated areas to help reduce drug trafficking and its harmful consequences. Law 3 enforcement organizations within HIDTAs assess drug-trafficking problems and design specific initiatives to decrease the production, manufacture, transportation, distribution, and chronic use of drugs and money laundering. The HIDTA program plays a vital role in the Obama Administration’s efforts to make the nation safer and healthier by reducing drug use and its consequences. There are currently 28 HIDTAs, which include approximately 16 percent of all counties in the United States and 60 percent of the U.S. population. HIDTA-designated counties are located in 46 states, Puerto Rico, the U.S. Virgin Islands, and the District of Columbia.
Sharpe also commended the agencies that comprise the St. Thomas MOI for their efforts in securing the award and for the overall success of the HIDTA program. These agencies include the Federal Bureau of Investigation (FBI), U.S. Drug Enforcement Administration (DEA), Virgin Islands Police Department (VIPD), United States Marshals Service (USMS), Internal Revenue Service Criminal Investigation Division (IRS-CID), U.S. Department of Homeland Security, Homeland Security Investigations (HSI), U.S. Customs and Border Protection (CBP), and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Additional information about the HIDTA program is available on the ONDCP Web site: www.WhiteHouseDrugPolicy.gov
Postal Employee Sentenced for Stealing from the Post OfficeRead the Press Release
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Donna Spencer, 51, of Falconer, N.Y., pleaded guilty to misappropriation of postal funds by a postal service employee before Chief U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 10 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who is handling the case, stated that Spencer was employed by the United States Postal Service since 1986. Between February 13, 1999, and July 19, 2013, the defendant was employed as the Postmaster at the Frewsburg, N.Y. Post Office. During that time, Spencer accepted cash payments from USPS customers for the purchase of postage stamps. Instead of depositing the cash payments into the USPS register, the defendant kept the cash for her own purposes. An audit of the Frewsburg facility determined that the total loss amount was $14,023.50.
Sentencing is scheduled for May 27, 2014 at 10:00 a.m. before Judge Skretny.
The plea is the culmination of an investigation by the United States Postal Inspection Service, under the direction of Inspector in Charge Kevin Niland of the Boston Division.Pittsburgh Man Facing Federal Drug and Gun ChargesRead the Press Release
PITTSBURGH – A Pittsburgh resident has been indicted by a federal grand jury on charges of violating federal narcotics and firearms laws, United States Attorney David J. Hickton announced today.
The three-count indictment, returned on Feb.18, named Eugene Allen Morgan, 44, as the sole defendant.
According to the indictment, on or about Sept. 12, 2013 and Sept. 19, 2013, Morgan distributed and possessed with the intent to distribute a quantity of heroin, a Schedule I controlled substance. Additionally, on or about Jan. 30, 2014, Morgan, being a convicted felon, illegally possessed a Smith & Wesson .40 caliber semi-automatic pistol. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing a firearm or ammunition.
The law provides for a maximum total sentence of 30 years in prison, a fine of $1,250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Charles A. Eberle is prosecuting this case on behalf of the government.
A task force led by the Drug Enforcement Administration and the Pennsylvania State Police conducted the investigation leading to the indictment in this case. The task force also included several other federal, state, and local agencies from multiple states, including the Internal Revenue Service - Criminal Investigations, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the United States Marshals Service, the Allegheny County District Attorney’s Office, the Pittsburgh Bureau of Police, the Allegheny County Police Department, the Penn Hills Police Department, the Monroeville Police Department, and the McKees Rocks Police Department.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pittsburgh Man Charged with Trying to Send A Pistol from U.S. to LebanonRead the Press Release
PITTSBURGH – A Stanton Heights man has been indicted by a federal grand jury in Pittsburgh on a charge of smuggling goods from the United States, United States Attorney David J. Hickton announced today.
The one-count indictment, returned on Feb. 18, named Tarek Mohamed Chok, 49, as the sole defendant.
According to the indictment presented to the Court, on or about Sept. 18, 2012, Chok knowingly and fraudulently attempted to export and send a Springfield, Model 1911, .45 caliber pistol from the United States to Lebanon.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney James T. Kitchen is prosecuting this case on behalf of the government.
The Department of Homeland Secuirty conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pine Bluff Family Found Guilty in tax Fraud Scheme; Fraudulent Refunds Submitted Totaled More Than $1.7 MillionRead the Press Release
Little Rock - Christopher R. Thyer,United States Attorney for the Eastern District of Arkansas; and Christopher A. Henry, Internal Revenue Service-Criminal Investigation Special Agent in Charge; announced that after a two and one-half week trial, Brenda Laws, age 56, Lareka Laws, age 35, Jameel Laws, age 27, and Milton Laws, Jr., age 32, all of Pine Bluff, were all found guilty on February 13, 2014, of conspiracy to defraud the United States by filing false tax returns.
Brenda Laws was found guilty of filing 249 false tax returns for 249 different people who claimed the Frist Time Home Buyer (FTHB) credits on their 2008 tax return. She was also convicted of aiding her son, Milton, in the filing of his false tax return.
Lareka Laws was convicted of conspiracy and two counts of filing false tax returns. Jameel Laws was convicted of conspiracy and filing his own false tax return. Milton laws, Jr. was convicted of conspiracy and filing his own false tax return with the assistance of his mother, Brenda.
“The blatant abuse of the tax code credit for first time homebuyers by this family for their personal gain and gambling funds is inexcusable,” stated Thyer. “When 56% of all tax returns with the FTHB credit from Jefferson County and 46% of the same FTHB credit returns from Alteimer filed in 2009 were filed from the Laws residence, it didn’t take long for this investigation to begin and end with the Laws. I am grateful for the tedious investigative work of the IRS agents and for the attention the jury gave to the vast amount of evidence during the long trial. Their service to the citizens of Arkansas has brought about the just conviction of a family who thought nothing of stealing from law-abiding taxpayers.”
“At the IRS, protecting taxpayer money is a matter we take extremely serious. An integral part of the agency’s mission involves detecting and catching fraudulent tax refund claims,” stated SAC Henry. “Convictions, like those in this case, send a loud and clear message that individuals who violate our nation’s tax laws will be fully investigated, prosecuted, and subjected to the full punishment of the law for their actions.”
Stephen Barnett and Tenesha Roberts, also indicted in this case, both pled guilty to the conspiracy prior to the trial. Both testified against the Laws at trial.
According to the indictment, all six individuals conspired to defraud the Internal Revenue Service (IRS) by filing 2008 federal income tax returns in their own names and in the names of others without their knowledge to claim refunds they knew they were not entitled to receive. This group of individuals was allegedly responsible for the filing of a total of 251 tax returns which falsely claimed the First-Time Homebuyers Credit. The refund claims totaled more than $1.7 million. Brenda and Lareka Laws created false Forms 5405, the First-Time Homebuyer Credit Form, which contained fabricated addresses and acquisition dates of property that the taxpayer listed did not purchase. These returns were then filed electronically with the IRS.
Milton Laws, Jr. was detained after trial. His pretrial release was revoked December 10, 2013, by United States Magistrate Judge Beth Deere. The Third Motion to Revoke stated that Milton violated the terms of his release by submitting diluted specimens for drug screenings on six separate occasions during 2012. On October 29, 2012, his drug screen tested positive for marijuana. On October 19, 2012, he failed to make payments on citations. On December 12, 2012, his blood alcohol content test revealed a 0.343% blood alcohol level. He failed to appear for required counseling sessions and on March 5, 2013, was terminated from outpatient treatment as a result of his lack of participation in treatment services. He continued to disregard the restrictions put in place by the United States Magistrate Judge resulting in his arrest. All other defendants in the case have remained out on their own recognizance.
Sentencing for all defendants will be set by the Court at a later date.
Each individual faces a maximum penalty of 10 years in prison, a fine of $250,000, or both with not more than 3 years’ supervised release on the conspiracy count. Each false claim count carries a maximum penalty of 5 years in prison, a fine of $250,000, or both with not more than 3 years supervised release.
The investigation was conducted by the Internal Revenue Service - Criminal Investigation Division. First Assistant United States Attorney Pat Harris and Assistant United States Attorney Stephanie Mazzanti have prosecuted this case for the United States.