Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
20 December 2013
Richland County Man Sentenced on Methamphetamine Related ChargesRead the Press Release
A Richland County man was sentenced on December 18, 2013, to federal prison on methamphetamine related charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Timothy L. Garrard, 32, of Olney, Illinois, was sentenced to 180 months in prison, five years supervised release following his imprisonment, and fined $300. Garrard had previously pleaded guilty to three counts in a federal indictment. Count 1 charged that from on or about October 2011, until on or about November 2012, Garrard conspired to manufacture methamphetamine. Count 2 charged that from October 25, 2011, to October 29, 2012, Garrard possessed pseudoephedrine, knowing and having reasonable cause to believe that the pseudoephedrine would be used to manufacture methamphetamine. Count 3 charged that on November 4, 2012, Garrard possessed with the intent to distribute a mixture or substance containing Hydrocodone.
The investigation in this case was conducted by the Richland County Sheriff’s Office.
The case is being handled by Assistant United States Attorney George Norwood.
Resident of MacDill Air Force Base Charged with Aggravated Sexual Abuse and Production of Child PornographyRead the Press Release
Tampa, FL – Acting United States Attorney A. Lee Bentley, III announces the return by a grand jury of an indictment charging Erich Clifford Mandell Ramos (27, Tampa) with one count of aggravated sexual abuse, two counts of production of child pornography, and one count of possession of child pornography. If convicted on all counts, he faces a mandatory minimum term of 30 years’ imprisonment, up to a maximum penalty of life in federal prison. Mandell Ramos has remained in federal custody since his arrest, pursuant to a complaint, on November 21, 2013.
According to the indictment, Mandell Ramos sexually abused a person under twelve years old and created images of the sexual abuse, while on MacDill Air Force Base.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Stacie B. Harris.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Registered Nurse sentenced to 5 1/2 years in prison for stealing millions from Elderly Patient's EstateRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a former Anchorage registered nurse was sentenced in federal court in Anchorage yesterday for fraud and filing a false tax return.
Brian Amiel Ben-Israel, 54, of Atlanta, Georgia, was sentenced to 66 months in prison by Chief United States District Court Judge Ralph R. Beistline for stealing over two million dollars from an elderly woman’s estate. Ben-Israel pled guilty on September 16, 2013, to one count each of mail fraud, wire fraud and filing a false tax return. A separate hearing will be held on February 18, 2014 to determine how much he must pay in restitution.
According to Assistant U.S. Attorney Retta Rae Randall, who prosecuted the case, Ben-Israel was a registered nurse residing in Anchorage and working at Meridian Psychiatric Consulting Group when he met and befriended Ms. Juanita Gielarowski. During the period of 2005 through 2008, Ben-Israel became a health care provider and “financial advisor” to Gielarowksi and her daughter, Linda Stowers. Ben-Israel gained control over assets of the Juanita V. Gielarowski Revocable Trust by creating a new trust with the assistance of co-defendant, Philip Eric Myers, a former attorney. Once Ben-Israel and Myers gained control of the Trust, they diverted over two million dollars from Gielarowski’s Trust, intended to be used for her care and benefit, to their own personal benefit.
Ben-Israel and co-defendant Myers persuaded Gielarowski and Stowers, in December 2007, to invest more than one million dollars in Myers’ company, Typhoon Security Technology, Inc. Myers, the CEO of Typhoon, claimed the company would be one of the top three global leaders in explosives and weapons detection technology. Myers was the CEO of Typhoon. Ben-Israel had a contract with Typhoon to sell private placement investments on commission. However, Typhoon was suspended by the State of California in September 2007 and could no longer lawfully conduct business. The Estate lost all of its investment money.
Ben-Israel charmed and manipulated Gielarowski and Stowers; he allowed Stowers to pretend that they were husband and wife. As Stowers’ nurse, he encouraged her to take care of her health, getting gastric bypass surgery and plastic surgery. Ben-Israel enjoyed the plane trips such treatments required and he indulged in plastic surgery himself, paid for by the Gielarowski Estate. As a “financial advisor” he questioned how the Gielarowski Estate and assets were being invested, preying on Stowers and her mother’s financial concerns for her long-term care.
Ultimately Ben-Israel became a trustee of the Estate and gained access to the bank accounts of the Estate, transferring much of the funds to his personal bank account, using the money to pay for extensive travel and purchasing real estate, including a five-acre property located at 133 Kaiwiki, Hilo, Hawaii, for $750,000. Ben-Israel made a down payment of $476,500 with money from the Gielarowski Estate as well as the proceeds from the sale of his Hawaii condo. The home was titled only in Ben-Israel’s name.
Ben-Israel extensively remodeled this home with Gielarowski Estate funds, claiming the estate would be the retirement villa for Gielarowski and Stowers. Stowers did stay at the house while recovering from her surgeries; Gielarowski was morbidly obese and bedridden, unable to travel. A lift was used to remove her from her bed and into a wheelchair. In July 2009, this “4 acre tropical jungle paradise” was advertised as “The Garden of Eden … for the clothing challenged or clothing optional minded Gay Male community.” Ben-Israel is gay.
Ben-Israel gave substantial amounts of money from the Estate to partners and friends, claiming the money was an inheritance from a wealthy grandfather.
The tax charge is based upon income payments made to Ben-Israel by the Estate for nursing care that he did not report to his employer, Meridian, or to the IRS. He also failed to report the Typhoon commissions he received and the theft income he obtained.
The actions of Ben-Israel and Myers completely depleted the Juanita Gielarowski estate by August 2009, and caused Gielarowski to be moved from her long established home to a state funded elder care facility where she died in July 2010.
In sentencing the defendant, Judge Beistline stated that Ms. Gielarowski “was the ultimate in vulnerable victims.” “A fiduciary duty is a serious duty. If we cannot protect our elderly and our vulnerable, what kind of society are we? We need to protect the vulnerable.” When determining the length of the sentence, Judge Beistline asserted that the punishment had “to sting” and send a message to those whose jobs are to protect the elderly.
Tamera Cant, Assistant Special Agent in Charge for IRS Criminal Investigation in the Pacific Northwest, said, “The IRS enforces the nation’s tax laws, but we also take particular interest in cases where someone has taken what belongs to others. We are dedicated to working with our law enforcement partners to investigate scams that exploit the innocent.”
Deirdre L. Fike, Special Agent in Charge of the FBI in Alaska, said, “The crimes committed by Brian Amiel Ben-Israel are particularly reprehensible because he used his position as a nurse to steal funds intended to provide for the care of an elderly woman. This investigation is an example of the FBI’s ongoing commitment to protect Alaskans, especially the elderly, from fraud.”
Co-defendant Myers pled guilty on September 20, 2013, and has agreed to forfeiture and restitution in the amount of $1,081,000. Myers’ sentencing is scheduled for January 17, 2014, before Chief Judge Beistline.Ms. Loeffler commends the Federal Bureau of Investigation, the Internal Revenue Service - Criminal Investigation, and the Anchorage Police Department for the investigation of this case. Ms. Loeffler also commends the State of Alaska Office of Elder Fraud & Assistance who provided assistance in this investigation.
Providence Man Sentenced to 15 Years in Federal Prison for Producing Child Pornography and Transporting It into the United StatesRead the Press Release
PROVIDENCE, R.I. – Juan Carlos Santiago, 36, of Providence, R.I., was sentenced today to 15 years in federal prison for producing child pornography outside of the country and transporting it into the United States, announced United States Attorney Peter F. Neronha; Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police; and Bruce M. Foucart, Special Agent in Charge of the Boston field office of Homeland Security Investigations (HSI).
Santiago was arrested in December 2012 by Rhode Island State Police, Homeland Security Investigations (HSI), and agents and officers assigned to the Rhode Island State Police Internet Crimes Against Children (ICAC) Task Force. An investigation by the Rhode Island State Police, the ICAC Task Force and HSI revealed that Santiago digitally recorded sexual contacts with a prepubescent minor in the Dominican Republic, which he then transported to the United States.
At sentencing, U.S. District Court Judge Mary M. Lisi also ordered Santiago to serve lifetime supervised release following his prison term, to register as a sex offender, and to pay restitution in the amount of $1,825 to the victim for expenses related to counseling services. Santiago pleaded guilty on February 4, 2013, to one count of production of child pornography outside the United States and transportation into the United States.
According to court documents and information presented to the court, in May 2012, a special agent with the United States Naval Criminal Investigative Service assigned to the ICAC Task Force, while conducting an online Internet investigation focused on identifying users who traded child pornography, observed an IP address at Santiago’s Providence residence from which child pornography files were being traded. The agent successfully downloaded two files containing child pornography.
On October 26, 2012, ICAC Task Force agents and members of the Rhode Island State Police conducted a court authorized search of Santiago’s residence and seized two computers, digital storage devices, a digital camera and assorted CDs and DVDs. A forensic examination of the equipment by a Rhode Island State Police Computer Crimes digital forensic analyst revealed numerous images of Santiago engaged in sexual contact with a prepubescent male. Based on GPS coordinates embedded inside the photographs, agents determined that the images were taken in the Dominican Republic in 2011. Further investigation by HSI revealed that Santiago made several trips to the Dominican Republic, including on or about the same dates some of the images were created.
At the time of his guilty plea, Santiago admitted to the court that he had engaged in sexual contact with a prepubescent minor while in the Dominican Republic on two occasions in 2011. Santiago admitted to the court that he photographed and created video recordings of the encounters, and that he transported the images back to the United States.
The case was prosecuted by Assistant U.S. Attorney Adi Goldstein.
The matter was investigated by the ICAC Task Force, Rhode Island State Police and Homeland Security Investigations.
The ICAC Task Force is a Department of Justice grant-funded program administered by the Rhode Island State Police, and is comprised of detectives from the Rhode Island State Police; Providence, West Warwick, Coventry, Warwick, Johnston, and Pawtucket Police Departments; and federal agents from ICE-HSI, United States Postal Inspectors’ Office and United States Naval Criminal Investigative Service. The objective of the ICAC Task Force is to form strong working relationships among federal, state and local law enforcement in order to effectively and efficiently prevent, detect, investigate, and prosecute online child exploitation and child pornography crimes.
This case was prosecuted 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.”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]Providence Convenience Store Owner Sentenced to Federal Prison for Defrauding the Food Stamp Program, Money LaunderingRead the Press Release
PROVIDENCE, R.I. – Cristina Ramirez, 37, of Providence, owner of Cristina’s Market in Providence, was sentenced on Thursday to twelve months and one day in federal prison, to be followed by three years of supervised release, the first eight months to be served in home confinement, for defrauding the Food Stamp Program and money laundering. Ramirez’s sentence was announced by United States Attorney Peter F. Neronha.At sentencing, U.S. District Court Judge Mary M. Lisi also ordered Ramirez to pay $399,000 in restitution to the Food Stamp Program, and to comply with all requests for information from immigration officials to ascertain her immigration status. Previously, Ramirez refused to provide information regarding her immigration status to law enforcement and to the court.
Ramirez is among ten individuals charged earlier this year as the result of a two-year federal investigation into various alleged conspiracies and actions to defraud the federally funded Supplemental Nutrition Assistance Program (SNAP), commonly referred to as the Food Stamp Program, of more than $3 million dollars. Ramirez pleaded guilty on October 4, 2013, as charged in an information, with one count each of conspiracy to commit food stamp fraud and money laundering. She is the first person to plead guilty and to be sentenced in this matter.
The investigation, as detailed in court documents, identified five Providence area businesses where it is alleged that store owners and/or employees allowed SNAP benefit recipients to use their Electronic Benefit Transfer (EBT) cards to exchange their SNAP benefits for cash, a violation of the program’s laws and regulations. In this matter, it was alleged that Ramirez added a surcharge to the recipients’ withdrawal of SNAP benefits, usually an amount equal to half that of the amount of cash benefit received by the recipient. SNAP benefit funds are transferred electronically directly to accounts managed by the retailer.
According to information presented to the court, beginning in at least October 2010, Ramirez stole nearly $400,000 from the Food Stamp Program in less than three years. Ramirez and her two employees, her ex-husband and another person, both believed to be in the United States illegally, conducted the illicit business transactions.SNAP data maintained by the U.S. Department of Agriculture, Food and Nutrition Service, documents the growth in SNAP redemptions at Cristina’s Market from a monthly redemption rate of a few thousand dollars to a monthly redemption rate of up to more than $50,000. According to information presented to the court, Ramirez repeatedly withdrew the proceeds of her fraud in a manner that was designed to disguise its source, avoiding reporting requirements for transactions in excess of $10,000. Ramirez conducted $362,000 worth of transactions in this manner. The funds were used for personal and other non-business related expenses.
Ramirez was ordered to self-surrender to the U.S. Marshals on January 8, 2014, to begin serving her prison sentence. Ramirez is currently free on unsecured bond and was ordered to be monitored with the use of electronic GPS monitoring.
The cases are being prosecuted by Assistant U.S. Attorneys Sandra R. Hebert and Richard B. Myrus.
The investigation was conducted by the United States Attorney’s Office; the U.S. Department of Agriculture, Office of Inspector General; U.S. Department of Agriculture, Food and Nutrition Service, Retailer Investigations Branch; Internal Revenue Service Criminal Investigation; and the Rhode Island State Police.
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]Potomac Man Sentenced to 8 Years in Prison for Conspiring to Illegally Provide Satellite Services to IranRead the Press Release
Conspiracy Resulted in Launching of an Iranian Earth Observation Satellite; Front Company Created to Conceal Iranian Involvement
Greenbelt, Maryland - U.S. District Judge Peter J. Messitte sentenced Nader Modanlo, a/k/a Nader Modanlou, a/k/a Nader Modanlu, age 53, of Potomac, Maryland, a naturalized U.S. citizen born in Iran, today to eight years in prison followed by three years of supervised release for conspiring to illegally provide satellite related services to Iran in violation of the International Emergency Economic Powers Act, two counts of violating the Iran Trade Embargo, money laundering and obstruction of bankruptcy proceedings. Judge Messitte also ordered Modanlo to forfeit $10 million.
As a result of the conspiracy, an Iranian earth observation satellite equipped with a camera was launched into space from Russia on October 27, 2005. The launch was the first-ever Iranian satellite put into orbit.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service, Mid-Atlantic Field Office.
"Nader Modanlo violated the law by helping Iran launch communications satellites," said U.S. Attorney Rod J. Rosenstein. "The Iran Trade Embargo prohibits Americans from supplying goods, technology and services to Iran directly or indirectly."
“This sentencing is the result of a complex, decade-long HSI investigation that spanned multiple countries and involved close partnership with the U.S. Attorney’s Office for the District of Maryland, the Defense Criminal Investigative Service and the Internal Revenue Service,” said HSI Baltimore Special Agent in Charge William Winter. “This investigation shows that HSI special agents will tenaciously pursue those who attempt to illegally export sensitive technologies and threaten the security of the United States by willfully violating our customs laws.”
“Through the joint efforts of IRS Criminal Investigation with our domestic and international law enforcement partners, Modanlo was brought to justice and convicted,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “Today’s sentencing is a reminder that IRS Criminal Investigation is committed to following the money trail across the globe and will not be deterred by the use of front companies and sophisticated financial transactions that hide the real ownership of the proceeds of criminal activity.”
“The sentencing action handed down today should send a clear message that the Defense Criminal Investigative Service (DCIS) and its law enforcement partners will aggressively and tirelessly pursue and prosecute anyone who willfully violates laws that are designed to preserve and protect our nation’s most critical technologies and resources,” said Robert E. Craig, Jr., Special Agent in Charge of the DCIS Mid-Atlantic Field Office. “DCIS, the criminal investigative arm of the Office of Inspector General, Department of Defense (DoD), is committed to pursuing cases involving the illegal transfer of U.S. Defense Department-related technologies around the world and ensuring the safety of America’s warfighters and all Americans.”
The President of the United States issued an Executive Order in 1995 imposing a trade embargo against Iran, after finding that Iran's policies and actions posed a threat to the national security of the United States. Under the embargo, the Department of the Treasury, through the Office of Foreign Assets Control, issued the Iranian Transactions Regulations, which prohibited the export, re-export, sale or supply, directly or indirectly, by a U.S. citizen, of goods, technology or services to Iran or the Government of Iran, without prior governmental authorization.
According to evidence presented at the six week trial, Modanlo was a mechanical engineer who received science and engineering degrees from George Washington University. Modanlo represented that he was an internationally-recognized expert on strategic policy and finances affecting the space-based telecommunications industry, and that he managed space and science programs for the Department of Defense, NASA and the industry.
Trial evidence showed that from January 2000 through November 27, 2007, Modanlo and others concocted an elaborate scheme to evade the Iran trade embargo to conceal Iranian involvement in prohibited activities and transactions. Beginning in 1992, Modanlo was the principal owner, chairman and president of Final Analysis, Inc. (FAI) in Maryland. Beginning in 1994, FAI contracted with POLYOT, an aerospace enterprise company owned by the government of the Russian Federation, to launch FAI telecommunications satellites. Between 1995 through 2000, FAI and POLYOT launched a satellite purchased by FAI, and designed, constructed and launched a second satellite, both from Plesetsk, Russia. Modanlo and other FAI personnel met with POLYOT officials as part of that relationship. As required by law, Modanlo obtained U.S. export licenses in order to export and launch the telecommunications satellites and other equipment from Russia.
In November 2001, Modanlo established New York Satellite Industries, LLC, (NYSI) after creditors filed a petition to place FAI into involuntary bankruptcy. NYSI purchased FAI's assets and Modanlo served as chairman and managing member of NYSI, using his home address as NYSI's business address.
Beginning in 2000, Modanlo brokered an agreement between POLYOT and Iran to construct and launch a satellite. Between the summer of 2001 and December 2001, Modanlo engaged in numerous meetings with POLYOT officials to broker Iran=s satellite program. In December 2001, several Iranian officials, including Sirous Naseri, a former Iranian Amabassador to Switzerland, went to Switzerland to express interest in "investing" in NYSI by interposing a Swiss company, because "the U.S. ha[d] sanctions in place against Iran," and direct investment would therefore be "problematic." Naseri, Reza Heidari, Mohammad Modares and Modanlo then went to Switzerland in April 2002 to work out the details of forming Prospect Telecom in order to conceal Iranian participation as an investor/lender in Modanlo's satellite telecommunications activities. Between April and June 2002, Heidari, Mohammad Modares and Abdol Mehrdad established Prospect Telecom and opened a bank account in Switzerland in the name of Prospect Telecom.
Heidari, Modares, and Mehrdad then caused $10 million to be wired into the Prospect Telecom bank account from numerous foreign accounts, including from China and Dubai, and then almost immediately wired the $10 million to Modanlo's NYSI account in Bowie, Maryland, in consideration for Modanlo’s assistance to Iran and the Iranians in brokering the satellite agreement with Russia, and for NYSI providing telecommunications services in support of that agreement. Modanlo also had agreed that NYSI would assist in obtaining telecommunications service provider licenses for the owners of Prospect Telecom and for the benefit of the Islamic Republic of Iran.
In October 2005, as a result of the efforts of Modanlo and his conspirators, POLYOT launched Iran=s first-ever satellite, a remote sensing and telecommunications satellite from Russia.
From 2005 to 2007, Modanlo made false statements and concealed information about the creation and ownership of Prospect Telecom during bankruptcy proceedings, including that Modanlo and co-conspirators had arranged for the formation of Prospect telecom to conceal Iranian involvement.
United States Attorney Rod J. Rosenstein praised the HSI Baltimore, DCIS and IRS - Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys David I. Salem and Stuart Berman, who prosecuted the case.
Patient Recruiter and Therapy Staffing Company Owner Sentenced for Roles in $7 Million Health Care Fraud SchemeRead the Press Release
A patient recruiter and a therapy staffing company owner were sentenced today to serve 50 months and 46 months in prison, respectively, for their participation in a $7 million health care fraud scheme involving defunct home health care company Anna Nursing Services Corp.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Ivan Alejo, 48, and Hugo Morales, 37, both of Miami, were sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In addition to their prison terms, Alejo and Morales were both sentenced to serve three years of supervised release. Alejo and Morales were also ordered to pay jointly and severally with their co-defendants $6,928,931 and $1,958,279, respectively, in restitution.
In August 2013, Alejo and Morales pleaded guilty before Judge Martinez to conspiracy to commit health care fraud.
Alejo worked as a patient recruiter at Anna Nursing, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. Morales owned a therapy staffing company, Professionals Therapy Staffing Services Inc., which provided therapists to Anna Nursing.
According to court documents, co-conspirators of Alejo and Morales operated Anna Nursing for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.
Alejo’s primary role in the scheme at Anna Nursing involved negotiating and paying kickbacks and bribes, interacting with patient recruiters and assisting in the submission of fraudulent claims to the Medicare program. Alejo and his co-conspirators would pay kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health and therapy services that were medically unnecessary and/or not provided. Alejo and his co-conspirators would pay kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications and other documentation. Alejo and his co-conspirators would use the prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services, which Alejo knew was in violation of federal criminal laws.
Morales’s primary role in the scheme at Anna Nursing involved operating Professionals Therapy, where he and others created fictitious progress notes and other patient files indicating that therapists from Professionals Therapy had provided physical or occupational therapy services to particular Medicare beneficiaries, when in many instances those services had not been provided and/or were not medically necessary. Morales knew the documents he and others from Professionals Therapy falsified were used to support false claims for home health care services billed to Medicare by his co-conspirators at Anna Nursing, which Morales knew was in violation of federal criminal laws.
From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were not medically necessary and/or not provided.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .Patient Recruiter and Therapy Staffing Company Owner Sentenced for Roles in $7 Million Health Care Fraud SchemeRead the Press Release
A patient recruiter and a therapy staffing company owner were sentenced today to serve 50 months and 46 months in prison, respectively, for their participation in a $7 million health care fraud scheme involving defunct home health care company Anna Nursing Services Corp.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Ivan Alejo, 48, and Hugo Morales, 37, both of Miami, were sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In addition to their prison terms, Alejo and Morales were both sentenced to serve three years of supervised release. Alejo and Morales were also ordered to pay jointly and severally with their co-defendants $6,928,931 and $1,958,279, respectively, in restitution.
In August 2013, Alejo and Morales pleaded guilty before Judge Martinez to conspiracy to commit health care fraud.
Alejo worked as a patient recruiter at Anna Nursing, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. Morales owned a therapy staffing company, Professionals Therapy Staffing Services Inc., which provided therapists to Anna Nursing.
According to court documents, co-conspirators of Alejo and Morales operated Anna Nursing for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.
Alejo’s primary role in the scheme at Anna Nursing involved negotiating and paying kickbacks and bribes, interacting with patient recruiters and assisting in the submission of fraudulent claims to the Medicare program. Alejo and his co-conspirators would pay kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health and therapy services that were medically unnecessary and/or not provided. Alejo and his co-conspirators would pay kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications and other documentation. Alejo and his co-conspirators would use the prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services, which Alejo knew was in violation of federal criminal laws.
Morales’s primary role in the scheme at Anna Nursing involved operating Professionals Therapy, where he and others created fictitious progress notes and other patient files indicating that therapists from Professionals Therapy had provided physical or occupational therapy services to particular Medicare beneficiaries, when in many instances those services had not been provided and/or were not medically necessary. Morales knew the documents he and others from Professionals Therapy falsified were used to support false claims for home health care services billed to Medicare by his co-conspirators at Anna Nursing, which Morales knew was in violation of federal criminal laws.
From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were not medically necessary and/or not provided.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
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.
Parmelee Woman Sentenced for Failure to AppearRead the Press Release
United States Attorney Brendan V. Johnson announced that a Parmelee, South Dakota, woman convicted of Failure to Appear was sentenced on December 19, 2013, by U.S. District Judge Roberto A. Lange.
Kamelia No Moccasin, a/k/a Kamelia Shoulders, age 29, was sentenced to 147 days in custody with credit for time served, 12 months of supervised release, 33 days of community confinement, and a $100 special assessment to the Federal Crime Victims Fund.
No Moccasin was indicted for Failure to Appear by a federal grand jury on August 21, 2013. She pled guilty on October 24, 2013.
No Moccasin was placed on personal recognizance after an initial appearance and arraignment for a federal Involuntary Manslaughter charge, which required her to attend all court proceedings as a condition of release. On June 11, 2013, No Moccasin did not appear for her trial as previously ordered. She was apprehended and arrested on June 20, 2013.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Marie H. Ruettgers prosecuted the case.
No Moccasin was immediately turned over to the custody of the U.S. Marshals Service.
Pair Sentenced on Health Care Related False Statement ChargesRead the Press Release
ROANOKE, VIRGINIA – A mother and son who falsely billed Medicaid for services that were not performed were sentenced yesterday morning in the United States District Court for the Western District of Virginia in Roanoke. In a related case earlier this week, a registered nurse who also billed Medicaid for services that were not performed in relation to the same situation, pleaded guilty.
Travis Bugg, 25, of Blacksburg, Va., and his mother, Sandra Bugg, 47, of Roanoke, Va., previously pled guilty to one count each of making a materially false statement in writing involving a healthcare benefit program. Yesterday in District Court, both Travis and Sandra Bugg were sentenced to 36 months of probation and ordered to pay restitution in the amount of $5,472. Travis Bugg will also be excluded from receiving earnings from Medicaid and Medicare for 5 years.
On Monday, December 16, in a related matter, Tammy Allen, 45, of Chesterfield, Va., pled guilty to one count of making a materially false statement in writing involving a healthcare benefit program and one count of health care fraud. Allen faces up to 10 years in prison when she is sentenced.
“These defendants abused a program designed to provide a safety net for those truly in need,” United States Attorney Timothy J. Heaphy said today. “When fraudsters bill the Medicaid program for health care services not actually performed, they undercut the solvency and effectiveness of the health care system. We will continue to hold responsible those who commit health care fraud and do what we can to prevent waste, fraud and abuse in the system.”
According to evidence presented at various court proceedings by Assistant United States Attorney Jennie Waering and Virginia Assistant Attorney General and Special Assistant United States Attorney Vaso Doubles, Sandra Bugg received eligibility to receive Medicaid services through the Medicaid Consumer Directed Program for the elderly and disabled, which allows the person who receives the care to hire their own personal care assistant, regardless of their qualification. As a result, Sandra Bugg hired her son,
Travis Bugg, to serve as her personal care assistant. During this time, Tammy Allen, a registered nurse, was hired to act as a service facilitator to determine the number of hours of care a recipient is entitled to receive and to provide home visits for Sandra and Travis Bugg. Travis Bugg has admitted that between September 2011 and January 2012, he billed Medicaid for 88 days of work as his mother’s personal care assistant for which he did not work. Sandra Bugg has admitted to signing the time sheets showing her son working those 88 days when, in fact, she knew he had not been at her home those 88 days. Tammy Allen has also admitted that she billed Medicaid for three in-home visits that she never made.
In all, Travis Bugg falsely billed Medicaid for $5,472 of services that were never provided. Tammy Allen falsely billed Medicaid $550 for the three home visits she never made.
The investigation of the case was conducted by the Virginia Medicaid Fraud Control Unit of the Virginia Attorney General’s Office and the Federal Bureau of Investigation. Assistant United States Attorney Jennie Waering and Virginia Assistant Attorney General and Special Assistant United States Attorney Vaso Doubles are prosecuting the case for the United States.
Pair Sentenced for Narcotics and Firearm ChargesRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that Keith B. Carver, 28, of Columbus, Georgia was sentenced on Thursday, December 19, 2013, to serve two hundred twenty eight (228) months imprisonment for possession with intent to distribute methamphetamine and possession of a firearm in the furtherance of a drug trafficking crime. Toni McGriff, 30, of Columbus, Georgia, received a sentence of forty six (46) months imprisonment for possession with intent to distribute methamphetamine in the same case. The sentences were handed down by the Honorable Clay D. Land, United States District Court Judge in Columbus, Georgia
Both defendants entered pleas of guilty on August 13, 2013. In their plea agreements, the defendants admitted that on November 22, 2012, they were in an automobile accident in Harris County, Georgia and subsequently abandoned the vehicle. The responding deputy found drug paraphernalia (scales, plastic bags, and an amount of U.S. Currency) inside the abandoned vehicle, later determined to be the property of Mr. Carver. Deputies later located Mr. Carver and Ms. McGriff entering a wooded area. A bag carried by Ms McGriff contained 67 grams of methamphetamine. Another bag, being carried by Mr. Carver, contained a loaded Ruger .357 Magnum revolver.“The difference in the sentences imposed on these two defendants is significantly influenced by the firearm carried by Mr. Carver. The message to drug dealers from this is clear: carrying a gun during a drug crime means doing significantly more prison time,” said United States Attorney Michael J. Moore.
The case was investigated by the Harris County Georgia Sheriff’s Office and the U.S. Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorney Mel Hyde.
For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Owner of New Jersey Debit Card Business Admits Filing False Tax ReturnsRead the Press Release
NEWARK, N.J. – An Orange County, N.Y., man who owned a New Jersey company admitted today to filing false income tax returns, U.S. Attorney Paul J. Fishman announced.
Richard Jackowitz, 60, of Warwick, N.Y., pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to two counts of an information charging him with filing false tax returns.
According to documents filed in this case and statements made in court:
Jackowitz owned and operated Branded Marketing, a Haskell, N.J., company that sold debit cards. For the 2007 and 2008 tax years, Jackowitz had unreported income from his company of approximately $105,512 and $359, 677, respectively. Jackowitz’s false tax returns caused a loss to the IRS of more than $300,000.
The tax charge to which Jackowitz pleaded is punishable by a maximum potential penalty of three years in prison and a $250,000 fine. As part of his plea agreement, Jackowitz also agreed to pay $319,940 in restitution to the government. Sentencing is scheduled for March 25, 2014.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jenny Kramer of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
13-480
Defense counsel: John D. Williams Esq., Vernon, N.J.
Jackowitz Information
Owner of Medical Equipment Company Pleads Guilty to Bank FraudRead the Press Release
St. Louis, MO - MICHAEL EDWARD FILMORE pled guilty to a multi-million dollar bank fraud against Pulaski Bank over several years while operating a medical equipment sales firm. In his plea agreement, Filmore admitted to fabricating and altering brokerage account records which purportedly showed he had millions of dollars in securities that he agreed to pledge as collateral for his outstanding loans, including a $1,000,000 revolving line of credit. Ultimately, Filmore obtained more than six million dollars from Pulaski through the fraud scheme and currently owes Pulaski more than five million dollars. None of the security pledged by Filmore, in the form of securities accounts or purported valuable medical equipment, existed as was represented to the bank.
According to court documents, Filmore was a borrower from Pulaski Bank, and had at least fifteen outstanding loans with a total balance owed of more than six million dollars by late 2013. Most of these loans are held in the name of Filmore’s company, Healthcare Partners Group, LLC. Over the course of Filmore’s relationship with Pulaski, which spanned many years, it was Pulaski’s understanding that he was engaged in the brokerage of medical equipment. Filmore often needed to finance the acquisition of equipment, which he sold and leased to his customers.
On November 1, 2013, Pulaski personnel determined that purchase order and account information associated with a new loan was suspicious. Further investigation by the bank revealed fictitious information had been submitted to the bank. Discovering these discrepancies, Pulaski cancelled the wire transfer of funds and reported the matter to authorities. A criminal complaint was filed against Filmore in federal court on November 16, 2013.
Filmore, Chesterfield, MO, pled guilty to one felony count of bank fraud before United States District Judge Audrey G. Fleissig, who set sentencing for March 18, 2014.
This charge carries a maximum penalty of 30 years in prison and/or fines up to $1million. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation; the U.S. Postal Inspection Service and the Special Inspector General for the Troubled Asset Relief Program (TARP), in cooperation with the executive staff of Pulaski Bank, who offered essential support to the investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.Oglala Man Sentenced for Assaulting A WomanRead the Press Release
United States Attorney Brendan V. Johnson announced that an Oglala, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on December 17, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Billy Bores a Hole, age 28, was sentenced to 46 months in custody, 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Bores a Hole was indicted by a federal grand jury on April 16, 2013, and he pled guilty to the offense on July 19, 2013.
In March 2013, at Oglala, Bores a Hole assaulted a woman by kicking her and stabbing her in the head, neck, back, and stomach, causing life-threatening injuries.
The investigation was conducted by the Bureau of Indian Affairs Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. The case was prosecuted by Assistant U.S. Attorney Sarah B. Collins.
Bores a Hole was immediately turned over to the custody of the U.S. Marshals Service.
North Carolina Man Sentenced on Odometer Tampering ChargesRead the Press Release
Francis Marimo was sentenced today in connection with an odometer tampering scheme, the Justice Department announced. Marimo was sentenced by U.S. District Court Judge Louise Wood Flanagan in New Bern, N.C., to serve 18 months in prison and one year of supervised release. Marimo also was ordered to pay $190,845 in restitution.
“Used car shoppers rely on mileage readings to judge both the value and safety of vehicles they might purchase,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Tampering with a vehicle’s odometer in order to swindle a would-be buyer is a federal crime that will be prosecuted.”
In June, Marimo pleaded guilty to two counts of odometer tampering. According to the Information filed in the case, from 2008 through 2012, Marimo purchased used vehicles primarily through online advertisements, then replaced the existing odometers with odometers showing lower mileages. Marimo sold these vehicles to consumers in the Raleigh, N.C., area while representing the low mileages on the replacement odometers as accurate. Mileage for one of the vehicles described in the Information was “rolled back” more than 100,000 miles. As part of a plea agreement, Marimo agreed that his conduct had caused between $120,000 and $200,000 in losses to consumers.
“The importance of accurate mileage readings on used car odometers cannot be overstated,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker. “This case demonstrates our determination to protect the consumer from this type of fraud.”
The North Carolina Division of Motor Vehicles and the National Highway Traffic Safety Administration (NHTSA) Office of Odometer Fraud Investigation investigated this case. The case was prosecuted by the Justice Department’s Civil Division, Consumer Protection Branch.
More information on odometer fraud is available at www.nhtsa.gov/Odometer-Fraud .
Norfolk, Va., Man Sentenced for Sexually Abusing Minors at Fort Polk BaseRead the Press Release
LAKE CHARLES, La. –United States Attorney Stephanie A. Finley announced that Renounte Abdul Jackson, 20, of Norfolk, Va., was sentenced Thursday by U.S. District Judge Patricia Minaldi to 27 months in prison and five years of supervised release for two counts of having abusive sexual contact with minors. Jackson pleaded guilty August 15, 2013.
According to the evidence presented at the guilty plea, Jackson was at a party at an unoccupied residence on the Fort Polk Military base July 18, 2012. He admitted to having sexual contact with a 13-year-old and a 14-year-old girl at different times that night. He also provided alcohol to those attending the party, including minors.
The U.S. Army Criminal Investigation Command conducted the investigation. Assistant U.S. Attorney Daniel J. McCoy prosecuted the case.New Jersey Woman Sentenced to 51 Months in Prison for Her Role in Stealing $7 Million in Charity HIV and Cancer MedicationRead the Press Release
Medicines Had Been Donated to be Used for Indigent Patients
TRENTON, N.J. – A New Jersey woman was sentenced today to 51 months in prison for her role in defrauding a charity program out of more than $7 million in donated HIV and cancer medication, U.S. Attorney Paul J. Fishman announced.
Keisha Jackson, 48, of Perth Amboy, N.J., previously pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to conspiracy to commit mail fraud.
According to documents filed in this case and statements made in court:
A pharmaceutical company donated millions of dollars’ worth of FDA-approved prescription medicines – including HIV and cancer treatments – at no cost to qualified patients experiencing financial difficulties. Jackson was employed as a customer service representative at a corporation providing administrative support for the donated medicines program.
Jackson conspired with Lateefa McKenzie Body, 35, of Linden, N.J., and others who entered hundreds of fraudulent orders into the company’s system and had the medicines delivered to Jackson’s address and other addresses she controlled. The medicines were then resold, and Jackson received payment for accepting the shipments.
Jackson admitted she understood that the payments were coming from sale of the stolen medications and that hundreds of shipments came to her home.
In addition to the prison term, Judge Cooper sentenced Jackson to serve three years of supervised release.
McKenzie Body was convicted in August 2013, following a jury trial, of one count of conspiracy to commit mail fraud and nine counts of mail fraud. She awaits sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation.
The government is represented by Senior Litigation Counsel Andrew Leven and
Unit Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit.13-481
Defense counsel: Pasquale Giannetta Esq., Wayne, N.J.
New Jersey Man Sentenced to Nine Years for Travelling to Virginia to Have Sex with MinorRead the Press Release
ALEXANDRIA, Va. - Royce DeWeese, 26, of Cherry Hill, New Jersey, was sentenced today to 108 months in prison for travelling to Virginia intending to have sex with a minor. After fulfilling his sentence, he will serve a lifetime term of supervised release.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Acting Special Agent in Charge Scot R. Rittenberg of U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Washington, made the announcement after sentencing by United States District Judge T.S. Ellis, III.
DeWeese pleaded guilty on September 13, 2013. According to court documents, between March and May 2013, DeWeese communicated over the Internet with an undercover HSI agent about plans to travel to Fairfax, Virginia in order to engage in sexual activity with the undercover agent’s supposed 10-year-old daughter. On May 14, 2013, DeWeese did travel from New Jersey to Fairfax, Virginia, where law enforcement arrested him.
The investigation was conducted by Homeland Security Investigations. Special Assistant United States Attorney Alicia J. Yass, a Trial Attorney with the Child Exploitation and Obscenity Section of the U.S. Justice Department’s Criminal Division, is prosecuting the case on behalf of the United States.
This investigation was part of Operation Predator, a nationwide HSI initiative to protect children from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers, criminal alien sex offenders and child sex traffickers. HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423 or by completing its online tip form. Both are staffed around the clock by investigators. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-843-5678.
The prosecution was 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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Mortgage Company Employee Charged in Fraud SchemeRead the Press Release
Princess Rosario, 37, a former employee of Mortgage IT in Allentown, was charged today by Information with one count of conspiracy to commit bank fraud, wire fraud affecting financial institutions, and the making of false statements to obtain loans insured by the Department of Housing and Urban Development, announced United States Attorney Zane David Memeger.
According to the Information, Rosario conspired with eight former employees of Madison Funding, a loan origination company, to defraud Mortgage IT into providing mortgage loans to people seeking to purchase real estate who were not creditworthy. Rosario allegedly helped loan officers and loan processors at Madison Funding falsify information on loan applications to Mortgage IT in order to get the loans approved.
The Information alleges that Rosario was paid for the business she generated for Mortgage IT, and that Mortgage IT wound up selling its interest in the loans to secondary investors, such as Citibank, Bank of America, and Wells Fargo, so that it would lose money if the borrowers ultimately defaulted on the loans, which many did.
If convicted, Rosario faces a maximum possible sentence of five years’ imprisonment, a $250,000 fine, three years of supervised release, and a $100 special assessment.
Her co-conspirators at Madison Funding included Joel Tillett, Jason Boggs, Claribel Gonzalez, Seemon Georges, Denise Peralta, Florentina Peralta, Ghovanna Gonzalez, and Angela Diaz, all of whom have already been charged and have pleaded guilty to mortgage fraud-based charges.
The case was investigated by the Offices of the Inspector General for the Department of Housing and Urban Development, the FDIC, and the Federal Housing Finance Agency. It is being prosecuted by Assistant United States Attorney Mark B. Dubnoff.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Mission Man Charged with Assault with A Dangerous Weapon and Assaulting, Resisting, Opposing, and Impeding A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man has been indicted by a federal grand jury for Assault with a Dangerous Weapon and Assaulting, Resisting, Opposing, and Impeding a Federal Officer.
Mark Antoine, age 22, was indicted on December 10, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on December 18, 2013, 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.
The charges relate to incidents that occurred on October 29, 2013, when Antoine was at a family member’s house on the Rosebud Sioux Indian Reservation and he assaulted a family member. He later assaulted and resisted law enforcement officers who were summoned to the same location.
The charge is merely an accusation and Antoine is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Tim Maher is prosecuting the case.
Antoine was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for February 11, 2014.
Mattoon Man to Serve More Than 16 Years in Prison for Child PornographyRead the Press Release
Urbana, Ill. – U.S. District Judge Michael P. McCuskey today ordered a Mattoon, Ill., man, Joseph W. Hoult, 27, to serve 200 months (16 years, 8 months) in federal prison for distribution, receipt and possession of child pornography. Judge McCuskey further ordered that Hoult remain on supervised release for the rest of his life following his release from prison. Hoult will also be required to register as a sex offender.
Hoult, previously of the 2900 block of Shelby Ave., has remained in the custody of the U.S. Marshals Service since his arrest in June 2012 in Alaska. A federal criminal complaint was filed against Hoult in July 2012, and a grand jury returned a 13-count indictment in August charging Hoult with six counts of receiving and six counts of distribution of child pornography, as well as one count of possession of child pornography, on various dates in 2012. On June 21, 2013, Hoult pled guilty to all the charges against him as charged in the indictment.
The charges were investigated by the Mattoon Police Department; U.S. Immigration and Customs Enforcement Homeland Security Investigations; and the East Central Illinois Cyber Crimes Working Group.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Mastermind of $15 Million Mortgage Fraud Scheme Sentenced to Just over 11 Years in PrisonRead the Press Release
LAS VEGAS, Nev. – The mastermind of a Las Vegas mortgage fraud scheme that caused approximately $15 million in losses to the lenders and financial institutions, has been sentenced to just over 11 years in federal prison for his guilty pleas to conspiracy and fraud charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Lloyd Gardley, 60, currently in federal custody in Pahrump, Nev., was sentenced on Wednesday, Dec. 18, 2013, by U.S. District Judge Gloria M. Navarro. Gardley pleaded guilty in August 2012 to one count of conspiracy to commit bank fraud, mail fraud and wire fraud, one count of bank fraud, and two counts of mail fraud. He will also have to serve five years of supervised release following his release from prison and pay over $1.4 million in restitution.
“Gardley is one of two individuals who were sentenced to prison this week for committing mortgage fraud in Nevada,” said U.S. Attorney Bogden. “Unfortunately, these crimes are not victimless and the damage to the community is lasting. The mortgage fraud scheme artificially inflated home values that, in turn, raised purchase prices of comparable homes, forcing innocent homebuyers to pay well above true market value for their homes. Since 2008 when the FBI and our office made mortgage fraud prosecutions a priority, we have investigated, charged and convicted hundreds of persons for federal mortgage fraud crimes and most of them are now serving time in federal prison.”
Ten persons were charged and convicted in the scheme which occurred between 2005 and 2007 and involved the use of straw buyers and the submission of fraudulent paperwork in order to obtain mortgage loans. Lloyd Gardley was considered to be the leader of the conspiracy and recruited others into the scheme, including loan officers, real estate agents, an escrow agent, and an accountant. Once the mortgage loans were approved, the defendants caused money from the loan transactions to be disbursed to their own use and benefit. The defendants typically rented the homes and re-sold them for a profit, using the same scheme. They then defaulted on the loans, causing approximately $15 million in losses to the lenders. The evidence showed that the defendants used the fraudulent scheme to purchase 30 homes in Las Vegas between 2005 and 2007. The total value of the mortgages was approximately $35 million. Some of the homes were “flipped” or sold twice within short periods of time.
The case was investigated by the U.S. Postal Inspection Service and prosecuted by Assistant U.S. Attorneys Sarah E. Griswold and Brian D. Pugh.
This case was handled in connection with the President's Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s Offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.Manhattan U.S. Attorney Announces Charges Against Three Individuals in Virginia, Ireland, and Australia for Their Roles in Running the “Silk Road” WebsiteRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Brian R. Crowell, the Special-Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of an indictment against ANDREW MICHAEL JONES, a/k/a “Inigo,” GARY DAVIS, a/k/a “Libertas,” and PETER PHILLIP NASH, a/k/a “Samesamebutdifferent,” a/k/a “Batman73,” a/k/a “Symmetry,” a/k/a “Anonymousasshit,” in connection with their alleged roles in operating “Silk Road,” a hidden website designed to enable its users to buy and sell illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement. JONES was arrested in Charles City, Virginia, on December 19, 2013, and was presented in Richmond, Virginia in the United States District Court for the Eastern District of Virginia today. DAVIS is believed to be in Ireland. NASH was arrested in Australia on December 20, 2013, by the Australian Federal Police in Brisbane, Australia. All three individuals are alleged to have conspired to run the Silk Road website with Ross William Ulbricht, a/k/a “Dread Pirate Roberts,” a/k/a “DPR,” a/k/a “Silk Road,” the alleged owner and operator of Silk Road, who was previously arrested in San Francisco, California, on October 1, 2013, pursuant to a Complaint filed in Manhattan federal court.
According to the allegations in the Indictment unsealed today in Manhattan federal court, and the Complaint previously filed against Ulbricht:
From about January 2011until October 2, 2013, the “Silk Road” website hosted a sprawling black-market bazaar on the internet, where illegal drugs and other illicit goods and services were regularly bought and sold by the site’s users. During its more than two-and-a-half years in operation, Silk Road was used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over a hundred thousand buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.
Ulbricht, the owner and operator of Silk Road, ran the website with the assistance of a small support staff, including both site administrators and forum moderators. The site administrators were responsible for, among other things, monitoring user activity on Silk Road for problems, responding to customer service inquiries, and resolving disputes between buyers and vendors. The forum moderators were responsible for, among other things, monitoring user activity on discussion forums associated with the site, providing guidance to forum users concerning how to conduct business on Silk Road, and reporting any significant problems discussed on the forums to the site administrators and to Ulbricht. Ulbricht paid the site administrators and forum moderators salaries ranging from approximately $50,000 to approximately $75,000 per year for their services.
JONES and DAVIS worked as site administrators on Silk Road. NASH worked as the primary moderator on the Silk Road discussion forums. JONES, DAVIS, and NASH were each paid salaries by Ulbricht for their roles in connection with Silk Road.
JONES, 24, of Charles City, Virginia, DAVIS, 25, of Wicklow, Ireland, and NASH, 40, of Brisbane, Australia, are each charged with one count of narcotics conspiracy, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison; one count of conspiracy to commit computer hacking, which carries a maximum sentence of five years in prison; and one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison.
Mr. Bharara praised the outstanding investigative work of the FBI and its New York Special Operations and Cyber Division, as well as the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the IRS, the New York City Police Department, U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), the New York State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Secret Service, the U.S. Marshals Service, Office of Foreign Assets Control, and NY Department of Taxation. Mr. Bharara also thanked the ICE-HSI Chicago-O’Hare office for its assistance and support, as well as the Department of Justice’s Computer Crime and Intellectual Property Section and Office of International Affairs. Additionally, Mr. Bharara praised the foreign law enforcement partners whose contributions to the success of the investigation and prosecution have been invaluable, namely, the Australian Federal Police, the Irish Republic’s Computer Crime Investigation Unit of the An Garda Siochana, the Reykjavik Metropolitan Police of the Republic of Iceland, and the French Republic’s Central Office for the Fight Against Crime Linked to Information Technology and Communication.
Mr. Bharara also noted that the investigation remains ongoing.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Serrin Turner is in charge of the prosecution, and Assistant United States Attorney Christine Magdo is in charge of the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Andrew Jones, et al. (Silk Road) Indictment
Man Who Extorted Minors to Produce Child Pornography SentencedRead the Press Release
ATLANTA - Tremain Hutchinson, who coerced minors to produce child pornography, has been sentenced to life in prison.
“This sexual predator used the anonymity of the internet to prey on young girls – mentally, physically, and emotionally violating them,” said United States Attorney Sally Quillian Yates. “His crimes certainly warrant the prison sentence he received, and the stiff sentence will protect our children from this vicious predator.”
“The exploitation of children is one of the most heinous crimes we investigate,” said Brock Nicholson, Special Agent in Charge of Homeland Security Investigations Atlanta, which oversees all of Georgia and the Carolinas. “This case was especially egregious due to the offenses committed and the number of juvenile victims. Let this sentence be a warning to individuals who prey on innocent children – we will find you, arrest you and ensure you are prosecuted to the fullest extent of the law.”
According to United States Attorney Yates, the charges and other information presented in court: Beginning in or about November 2011, Hutchinson, who was 26 at the time, used a social media site called Tagged.com to contact the victims, young girls ranging from 11 to 16 years old. Hutchinson by-passed the safety features of website by posing as a 15 to 18 year-old teenager. When he made contact with the girls he targeted, he immediately asked the victims to send him nude photos of themselves. After the victims sent the initial photographs, Hutchinson then demanded more sexually graphic images. Typically, the girls refused, and Hutchinson would verbally abuse and threaten them. The threats included Hutchinson saying that he would find out where they lived and harm them or their families, or saying that he would upload the girls’ earlier, nude photos to their schools' websites or to social media sites like Facebook.
The investigation began when DeKalb County Police learned that someone with an account on Tagged.com had forced a teenage girl to molest her younger brother and to send him images of the molestation. DeKalb County Police identified Hutchinson during the course of their investigation and obtained a subpoena for records of his Tagged.com account. A search of Hutchinson’s computer and cell phone revealed hundreds of images of young girls in various stages of nudity and engaged in sexual conduct.
Hutchinson admitted in court that he had raped two of the girls he contacted on Tagged.com. In one instance, Hutchinson contacted a girl using Tagged.com and enticed her to send him nude photos of herself. He then threatened her until she sent him several videos depicting her engaging in sexually explicit conduct. Hutchinson continued to demand that the victim send him more videos and pictures and threatened to kill her and her family if she did not comply. He also threatened to post the photos she had previously sent on the internet. In February 2012, Hutchinson went to the victim’s home and raped her. He also raped a 13 year-old he met on Tagged.com.
Then, again posing as a teenage boy, Hutchinson contacted an 11 year-old girl on Tagged.com. The victim refused to send nude images of herself to him. Two years later, Hutchinson contacted the victim again and coerced her into sending him various nude images. When she refused to send additional pictures, Hutchinson threatened to post naked pictures of other girls using the victim's name and phone number on the internet. He told her that people would think it was her in the photos. Hutchinson also sent the same victim a photograph of his genitals and tried to meet the victim in person to have sex with her.
Hutchinson, 28, of Mableton, GA, was sentenced today by United States District Judge Timothy Batten to life in prison. Hutchinson was convicted of these charges on October 10, 2013, after he pleaded guilty. He will be required to register as a sex offender if he is released from prison.
This case was investigated by Special Agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the DeKalb County Police Department.
Assistant United States Attorneys Yonette Buchanan and Leslie J. Abrams prosecuted the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Luzerne County Woman Charged with Tampering with Consumer ProductRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced that a Felony Information has been filed in U.S. District Court in Scranton against Yolanda Holman, age 35, Wilkes-Barre, Pennsylvania, charging her with tampering with a consumer product that affected interstate commerce.
According to United States Attorney Peter J. Smith, the Information alleges that on or about August 23, 2013, Holman knowingly and intentionally tainted a bottle of non-prescription children’s pain reliever with prescription pills and other medication and caused it to be taken to a retail store in Wilkes-Barre as a returned item.
U.S. Attorney Smith stated that suspected tainted containers related to this incident were recovered and were in the possession of law enforcement officers or otherwise destroyed. The tainted containers present no danger to the public.
If convicted, the defendant could be imprisoned for 10 years and fined in the amount of $250,000.
The investigation was conducted by agents of the Federal Bureau of Investigation – Scranton Resident Office. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 10 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.Lubbock Man Sentenced to 20 Years in Federal Prison on Federal Child Pornography ConvictionRead the Press Release
LUBBOCK, Texas — Joshua Matthew Miranda, 29, was sentenced this morning, by U.S. District Judge Sam R. Cummings, to 240 months (20 years) in federal prison, following his guilty plea in September 2013 to one count of receiving child pornography. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Miranda has been in custody since his arrest in the parking lot of a church in Lubbock, Texas, in early May 2013, after arranging to meet an undercover law enforcement officer who had posed as a 15-year-old girl with whom Miranda had exchanged emails of a sexual nature. According to the complaint filed in the case, at the time of his arrest, Miranda had a box in his vehicle that contained numerous sex toys, ropes, gags, a blind fold, duct tape and condoms. A federal grand jury later charged Miranda with attempted enticement of a child, production of child pornography and receipt and possession of child pornography. He pleaded guilty to the receipt count and received the statutory maximum for that offense.
After his arrest, a state search warrant was executed at his residence in Lubbock, and law enforcement located several images and videos of child pornography on Miranda’s computer. Miranda admitted that he downloaded from the Internet numerous child pornography images and videos, including videos of prepubescent minors engaged in sexually explicit conduct.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by the Lubbock Police Department and the FBI. Assistant U.S. Attorney Amanda R. Burch prosecuted.
Lubbock County Man Sentenced to 10 Years in Federal Prison for Possessing Child PornographyRead the Press Release
LUBBOCK, Texas—Stephen Carpenter, 33, of Slaton, Texas, was sentenced this morning, by U.S. District Judge Sam R. Cummings to 10 years in federal prison, following his guilty plea in August 2013 to one count of possession of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to plea documents filed in the case, Carpenter used a file-sharing program to search for depictions of minors engaged in sexually explicit conduct. Carpenter downloaded and viewed many of these depictions in the form of video files, and on February 14, 2013, Carpenter was found to be in possession of a computer containing depictions of minors engaged in sexually explicit conduct.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Slaton Police Department. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Louisburg Child Predator Sentenced to 18 YearsRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, United States District Judge Louise W. Flanagan sentenced JOSEPH PATRICK MURPHY , 21, of Louisburg to 216 months imprisonment, followed by lifetime of supervised release. Upon his relase from prison, MURPHY will be required to register as a sex offender.
MURPHY was named in an Indictment filed on May 21, 2013 charging him with three counts of distribution of child pornography and ten counts of the receipt of child pornography and one count of possession of child pornography. On August 15, 2013, MURPHY pled guilty to one count of distribution of child pornography.
According to the investigation, MURPHY used the internet to distribute numerous images of child pornography to undercover law enforcement agents. A search warrant was executed at MURPHY’S residence on April 19, 2012. MURPHY was present and after being advised of his rights, admitted to having created and used an online account to download and share images and movies of child exploitation.
Investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorneys Ethan Ontjes and Jay Exum 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.
Long-Time Friends Admit Embezzling from Tax Consulting BusinessRead the Press Release
DALLAS — Lamonica Phillips and Pamela Gail Willis, aka Pamela Gayle Knight, both of Dallas, appeared today before U.S. Magistrate Judge Renee Harris Toliver, and each pleaded guilty to a federal felony offense stemming from their embezzlement of funds from Phillips’ former employer, announced US. Attorney Sarah R. Saldaña of the Northern District of Texas.
Specifically Phillips and Willis, both 44, each pleaded guilty to one count of conspiracy to commit mail fraud. Each faces a maximum statutory penalty of five years in prison, a $250,000 fine and restitution. A sentencing date was not set.
In a related case, Audrey Starr, 51, of Oklahoma City, is charged with one count of conspiracy to commit mail fraud and four substantive counts of mail fraud. If convicted the conspiracy count carries a maximum statutory penalty of five years in federal prison and each of the substantive mail fraud counts carries a maximum statutory penalty of 20 years in prison. Each count also carries a maximum statutory penalty of $250,000.
According to documents filed in the case, Phillips and Willis devised and carried out a scheme to embezzle money from Phillips’ employer, Industry Consulting Group (ICG). Starr allegedly became a conspirator in the scheme through knowingly receiving and using stolen funds.
ICG is a tax consulting business based in Dallas that focuses on tax valuation of properties and the maintenance of tax portfolios. As part of their business ICG, on behalf of their clients, pays taxes on home mortgages and provides valuations of properties in order to contest tax appraisals.
As part of her duties, Phillips had access to ICG’s financial software, could prepare checks on behalf of ICG and was responsible for cashing and mailing checks to ICG’s customers. Phillips began the scheme to defraud ICG in March 2012, following a conversation with her good friend, Willis.
The case is being investigated by the FBI. Assistant U.S. Attorney P. J. Meitl is in charge of the prosecution.
Local Doctor Pleads Guilty in Misbranding Drugs CaseRead the Press Release
LAREDO, Texas – Eduardo Miranda M.D., 55, of Laredo, has pleaded guilty to one count of introducing misbranded drugs into the country, announced United States Attorney Kenneth Magidson.
From October 2007 through January 2009, Miranda, a doctor who specializes in treating patients with cancer, ordered cancer drugs from a pharmacy called QSP, based in Canada. These drugs were not approved for distribution or use in the U.S. and did not bear adequate labeling for use. Some of the drugs had instructions and labeling in other languages. QSP was also not an authorized distributor or a retailer of these drugs in Canada.
Miranda then used these drugs interchangeably with Food and Drug Administration (FDA) - approved versions on his patients and filed insurance claims with Medicaid, Medicare and Blue Cross/Blue Shield of Texas as if he were using lawfully-approved versions.As part of the plea agreement, Miranda has agreed to pay back the reimbursement he had received while using non-approved versions - more than $1 million.
He was permitted to remain on bond pending his sentencing, which will be set at a later date. At that time, he will face up to a year in federal prison and/or a possible $100,000 fine.
The case was investigated by the FDA and Texas Attorney General’s Office-Medicaid Fraud Control Unit and prosecuted by Assistant United States Attorneys (AUSA) Raul Guerra and Sonah Lee and former AUSAs Sam Louis, Diana Song and D.J. Young.Lincoln Man Sentenced for Possession with Intent to Distribute Cocaine BaseRead the Press Release
On December 20, 2013, Israel Dewayne Mileage, age 22,of Lincoln, was sentenced to 70 months in prison for possession with intent to distribute 28 grams or more of cocaine base, also known as crack cocaine. Following the prison sentence, Mileage will serve four years on supervised release. He was also ordered to forfeit $209 in cash to the United States.
On April 10, 2013, a U.S. Postal Inspector went to Mileage’s Lincoln apartment to deliver a package which had been identified as suspicious. When contacted by the Postal Inspector, Mileage said he was expecting the package and said it contained shoes. Mileage eventually admitted he was not the person to whom the package was addressed. After obtaining permission from the person to whom the package was addressed, the Postal Inspector opened the package and found two pairs of shoes. Inside the shoes were two bags containing a total of 54.5 grams of cocaine base, also known as crack cocaine. Mileage was arrested and was found in possession of $209 in cash. A search warrant was obtained for Mileage’s apartment. During the search, officers found a digital scale containing cocaine base residue in the kitchen; a small amount of marijuana in the living room; and a loaded pistol in Mileage’s bedroom.
This case was investigated by the Postal Inspection Service and the Lincoln/Lancaster County Narcotics Task Force.
Lincoln Man Sentenced for EscapeRead the Press Release
On December 20, 2013, Michael James Sands, age 35 of Lincoln, was sentenced to six months in prison, (time-served), for escape. On June 13, 2013, Sands failed to return as scheduled from a job site to a work release facility in Hastings, Nebraska, where he was serving a sentence for violation of supervised release following an earlier federal prison term for conspiracy to distribute methamphetamine. Sands returned to the Hastings facility approximately 24 hours late. He was arrested on the escape charge on June 20, 2013, and has remained in custody since that date. Sands will serve an additional one year on supervised release after completing the prison term.
This case was investigated by the United States Marshals Service.
Leader of Violent Jewelry Theft Ring Sentenced to 20 YearsRead the Press Release
NEWPORT NEWS, Va. – Alexander Cuadros-Garcia, 39, of Richmond, Va., and Leonardo Ortiz, 42, of North Chesterfield, Va., were sentenced to 240 months and 210 months in prison, respectively, for participating in a violent and highly sophisticated jewelry theft ring that operated out of Richmond, Va.
Dana J. Boente, Acting U.S. Attorney for the Eastern District of Virginia; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; and Carl J. Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement following the sentencing by District Court Judge Arenda L. Wright Allen.
“This crew was violent, sophisticated, and relentless in stealing several million dollars in jewelry from victims along the East Coast,” said Acting U.S. Attorney Boente. “The substantial sentences imposed on these two defendants, along with the sentences imposed before on their confederates, is a testament to the great work and cooperation of our law enforcement partners across multiple states and agencies.”
“This is a perfect example of our commitment to combating violent and organized crime elements operating within our nation,” added Carl Vasilko, Special Agent in Charge of the ATF’s Washington Field Division. “ATF’s new FRONTLINE Initiative has been implemented to concentrate our resources against those who pose the greatest threat to our citizens through violence and terror. I am extremely impressed with the courage and diligence of our agents in the Norfolk Field Office, which spearheaded this operation, and I commend them on their success.”
According to court documents, Cuadros-Garcia led the organized criminal group in stealing more than $4.6 million in jewelry from victims in Virginia and at least four other states, including New York, New Jersey, North Carolina, and Maryland. In March 2012, Cuadros-Garcia and Ortiz were charged along with six other members of the Richmond-based ring.
Members regularly conducted lengthy surveillance on jewelry stores to identify vulnerable individuals and then follow their targets back to the individuals’ hotel or home. In most of the robberies, several men would appear suddenly as the victims approached or entered their car, punch out the car’s windows, threaten the victims at knife-point and steal the victims’ merchandise. In addition, the robbers would puncture the victims’ car tires and steal their cell phone to reduce the chance of pursuit or apprehension.
After a successful robbery, members of the ring would travel to New York to sell the merchandise to businessmen, who coordinated re-selling the stolen property or melting it down for future use. Members of the ring then laundered the proceeds through bank accounts and businesses.
Co-defendants Lucesita Argueta, Raul Antonio Escobar-Martinez, Luis Carlos Muchado, William Leandro Herrera-Bohorquez, Jose Alfredo Rivero-Garcia, and Juanita Diaz previously pleaded guilty for their roles in the theft ring. Escobar-Martinez and Herrera-Bohorquez were sentenced on March 7 and March 14, 2013, respectively, to serve 87 months in prison. Rivero-Garcia was sentenced on July 24, 2013, to 37 months in prison. Argueta was sentenced on September 18, 2013, to 108 months in prison. Diaz was sentenced on September 18, 2013, to serve 12 months of home confinement. Muchado was sentenced on September 27, 2013, to serve 97 months in prison.
Cuadros-Garcia was sentenced on December 18, 2013, to 240 months in prison, and Ortiz was sentenced on December 20, 2013, to 210 months in prison.
The investigation of this case was led by the ATF’s Washington Field Division, with the assistance of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the police departments in Williamsburg, Virginia Beach, Henrico County, Chesterfield, Prince William County and Fairfax County, Va., along with the Virginia State Police; the Baltimore County, Md., Police Department; the Port Authority of New York and New Jersey; the New York City Police Department; and the police departments in Rutherford, N.J., and Gwinnett County, Ga.; and the Morris County, N.J. Prosecutor’s Office.
Assistant U.S. Attorney Eric M. Hurt of the Eastern District of Virginia and Trial Attorney Jerome M. Maiatico of the Criminal Division’s Organized Crime and Gang Section prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Justice Department and Consumer Financial Protection Bureau Reach $98 Million Settlementto Resolve Allegations of Auto Lending Discrimination by AllyRead the Press Release
The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced the federal government’s largest auto loan discrimination settlement in history to resolve allegations that Detroit-based Ally Financial Inc. and Ally Bank have engaged in an ongoing nationwide pattern or practice of discrimination against African-American, Hispanic and Asian/Pacific Islander borrowers in their auto lending since April 1, 2011. The agreement is the first joint fair lending enforcement action by the department and CFPB. With this agreement, eight of the top 10 largest fair lending settlements in the department’s history have been under Attorney General Eric Holder’s leadership.
The settlement provides $80 million in compensation for victims of past discrimination by one of the nation’s largest auto lenders and requires Ally to pay $18 million to the CFPB’s Civil Penalty Fund. Ally also must refund discriminatory overcharges to borrowers for the next three years unless it significantly reduces disparities in unjustified interest rate markups. This system will create a strong financial incentive to eliminate discriminatory overcharges.
“With this largest-ever settlement in an auto loan discrimination case, we are taking a firm stand against discrimination in a critical lending market,” said Attorney General Eric Holder. “By requiring Ally to provide refunds to those who are overcharged because of their race or national origin, this agreement will ensure relief for Americans who are victimized. It will enable the Justice Department and the CFPB to work closely with Ally and others to prevent discriminatory practices in the future. And it will reinforce our determination to respond aggressively to discrimination in America’s lending markets – wherever it is found.”
The settlement resolves claims by the department and the CFPB that Ally discriminated by charging approximately 235,000 African-American, Hispanic and Asian/Pacific Islander borrowers higher interest rates than non-Hispanic white borrowers. The agencies claim that Ally charged borrowers higher interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk. The average victim paid between $200 and $300 extra during the term of the loan. The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending. Ally’s settlement with the DOJ, which is subject to court approval, was filed today in the U.S. District Court for the Eastern District of Michigan in conjunction with the DOJ’s complaint. Ally resolved the CFPB’s claims by entering into a public administrative settlement.“Discrimination is a serious issue across every consumer credit market,” said CFPB Director Richard Cordray. “We are returning $80 million to hard-working consumers who paid more for their cars or trucks based on their race or national origin. We look forward to working closely with the Justice Department and Ally to make sure this serious issue will be addressed appropriately in the years ahead as well.”
Rather than taking applications directly from consumers, Ally makes most of its loans through over 12,000 car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Ally. Ally’s business practice, like most other major auto lenders, allows car dealers discretion to vary a loan’s interest rate from the price Ally initially sets based on the borrower’s objective credit-related factors. Dealers receive greater payments from Ally on loans that include a higher interest rate markup. The coordinated investigations by the department and the CFPB that preceded today’s settlement determined this system of subjective and unguided pricing discretion directly results in Ally’s qualified African-American, Hispanic and Asian/Pacific Islander borrowers paying more than qualified non-Hispanic white borrowers.
The agencies claim that Ally fails to adequately monitor its interest rate markups for discrimination or require dealers to document their markup decisions. Ally’s first effort to monitor for discrimination in interest rate markups began only earlier this year after it learned of the CFPB’s preliminary findings of discrimination, and resulted in only two dealers being sanctioned and subjected to nothing more than voluntary training.
“This settlement provides relief to those who were harmed by this discrimination,” said U.S. Attorney for the Eastern District of Michigan Barbara McQuade. “Lenders must consider an individual borrower’s credit worthiness, based on income, savings, credit history and other objective factors when determining the terms of a loan. This settlement will ensure that in the future, borrowers will be able to obtain loans from Ally based on their own credit history free from discrimination based on race or national origin.”Today’s settlement represents the first resolution of the department’s joint effort with the CFPB to address discriminatory auto lending practices. The 2010 Dodd-Frank Act gave both the DOJ and the CFPB authority to take action against large banks like Ally for violating the ECOA. Although the department has filed previously filed lawsuits alleging violations of ECOA involving car loans, today is the first ECOA lawsuit against an auto lender that operates nationwide.
In addition to the $98 million in payments for its past conduct and requirement to refund future discriminatory charges, the settlement requires Ally to improve its monitoring and compliance systems. The settlement allows Ally to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results. The department commends Ally for working cooperatively to reach an appropriate resolution of this case. The department looks forward to Ally’s commitment, as part of the settlement, to work with the Civil Rights Division and the CFPB to find improved ways to fairly charge all consumers while also fairly compensating auto dealers for the services they provide.
The department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 30 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The settlements in these matters provide for a minimum of $775 million in monetary relief for impacted communities and more than 535,000 individual borrowers. The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications .
The settlement provides for an independent administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Ally’s discrimination. The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time. Individuals who have auto loan questions or would like to submit a complaint can contact the CFPB at (855) 411-2372.
The Civil Rights Division, the U.S. Attorney’s Office for the Eastern District of Michigan and the CFPB are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.govJustice Department Transfers Dayton Property to Oasis House as Part of Operation GoodwillRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON, OHIO - U.S. Attorney Carter Stewart and Acting U.S. Marshal Pat Sedoti of the Southern District of Ohio hosted an event this morning signifying the transfer of ownership of a property seized as part of a federal criminal case that will now be used as a safe house for women trying to escape prostitution and the sex industry.
The transfer marks the first time in Ohio that a property seized from a criminal has been transferred to community use through a Justice Department program known as “Operation Goodwill.”
U.S. Attorney Stewart and Acting Marshal Sedoti were joined by FBI Assistant Special Agent in Charge Robert Hughes and Dayton Police Chief Richard Biehl in presenting the keys and a ceremonial deed of transfer to Cheryl Oliver of Oasis House.
“This house is a symbol of change,” U.S. Attorney Stewart said. “Once acquired through illegal activity, it will now serve as a safe-house for women and support them as they escape the sex industry.”
Investigating agencies seized the house in 2010 during a successful investigation by the Dayton Police Department and the FBI into a Dayton drug dealer. The drug dealer purchased the house as a way of laundering proceeds from his drug dealing activity. The drug dealer was sentenced to prison. The house was forfeited to the law enforcement agencies, who agreed to turn the property over to the Oasis House.
“The Operation Goodwill program allows the Justice Department to transfer seized properties to non-profits, such as the Oasis House, to convert the property from criminal use into a positive community based endeavor,” Acting U.S. Marshal Patrick Sedoti said.
“Members of the Dayton Police Department have long recognized that arrest of persons involved in prostitution was ineffective without meaningful intervention, including residential treatment services to rehabilitate the lives of those who are ensnared in this lifestyle,” Dayton Police Chief Biehl said. “The Dayton community will now be able to provide more effective intervention for prostituted women and reduce the substantial harm they experience as well as the harm to communities from prostitution activity.”“We are hopeful this property will be transformed into a community resource that will bring positive change to this neighborhood and the lives of those who are served at Oasis House,” said FBI Special Agent in Charge Kevin Cornelius.
“Without Operation Goodwill, women would still be cold this December and for every December coming,” said Cheryl Oliver, Executive Director at Oasis House. “Without this project, there wouldn’t be a safe place for these women to go.”
Through Operation Goodwill, forfeited real or personal property can be transferred to state or local governments in support of drug abuse treatment, drug crime prevention and education, housing, job skills and other community-based public health and safety programs. Operation Goodwill was established in 1997, but was revised in 2010 to streamline the transfer process.
Any designated non-profit organization can apply to participate in Operation Goodwill. To participate, they must complete a Memorandum of Understanding with the Department of Justice to use the property for at least five years under specific circumstances.
Justice Department Settles Discrimination Lawsuit Against Reading Parking Authority in PennsylvaniaRead the Press Release
The Department of Justice announced today that it has entered a consent decree with the Reading Parking Authority (RPA) in the City of Reading, Pa., which, if approved by the court, will resolve a lawsuit filed by the United States on June 27, 2013. The complaint alleged that the RPA violated Title VII of the Civil Rights Act of 1964 when it discriminated against former employee Henry Perez and other current and former employees of the RPA by subjecting them to harassment based on national origin (Hispanic), and then retaliating against Perez when he complained about the discrimination and harassment.
Under the terms of the consent decree, the RPA will institute new policies and procedures to ensure that its employees are not subjected to discrimination, harassment and retaliation. These policies and procedures will include a new reporting and investigation process to ensure that employees may report allegations of discrimination, harassment and retaliation, and that upon receiving such complaints, designated individuals will ensure that all such complaints are investigated appropriately. Additionally, the RPA will be required to provide training to all employees regarding discrimination, harassment and retaliation, as well as the terms of the new policies and procedures put in place as a result of the consent decree. Finally, the RPA will pay a total of $77,500 in monetary relief to individuals harmed by the discrimination, harassment and retaliation.
“No one should have to endure harassment due to their national origin or retaliation for speaking out against such discrimination,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “This lawsuit sends a clear message that the department will vigorously protect the rights of those in the public sector facing discrimination. The department commends the RPA for working to put in place new policies and procedures to protect its employees from discrimination, harassment and retaliation.”
The Philadelphia District Office of the Equal Employment Opportunity Commission (EEOC) investigated and attempted to resolve Perez’s charge of discrimination before referring it to the Department of Justice for litigation.
“By working together closely in appropriate cases, the EEOC and Department of Justice can marshal public resources more effectively and strategically,” said EEOC District Director Spencer H. Lewis Jr. of the EEOC’s Philadelphia District Office. “This settlement demonstrates once again that our partnership can yield significant results and will ensure all public employees are protected from egregious and unlawful discrimination, harassment and retaliation in the workplace.”
More information about the EEOC is available on its website at www.eeoc.gov . The enforcement of the Title VII is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt .Justice Department Recovers $3.8 Billion from False Claims Act Cases in Fiscal Year 2013Read the Press Release
The Justice Department secured $3. 8 billion in settlements and judgments from civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2013, Assistant Attorney General for the Civil Division Stuart F. Delery announced today. This dollar amount, which is the second largest annual recovery of its type in history, brings total recoveries under the False Claims Act since January 2009 to $ 17 billion – nearly half the total recoveries since the Act was amended 27 years ago in 1986.
The Justice Department’s fiscal year 2013 efforts recovered more than $3 billion for the fourth year in a row and are surpassed only by last year’s nearly $5 billion in recoveries. As in previous years, the largest recoveries related to health care fraud, which reached $2. 6 billion. Procurement fraud (related primarily to defense contracts) accounted for another $ 890 million – a record in that area.
“It has been another banner year for civil fraud recoveries, but more importantly, it has been a great year for the taxpayer and for the millions of Americans, state agencies and organizations that benefit from government programs and contracts,” said Assistant Attorney General Delery. “The $3. 8 billion in federal False Claims Act recoveries in fiscal year 2013, plus another $443 million in recoveries for state Medicaid programs, restores scarce taxpayer dollars to federal and state governments. The government’s success in these cases is also a strong deterrent to others who would misuse public funds, which means government programs designed to keep us safer, healthier and economically more prosperous can do so without the corrosive effects of fraud and false claims.”
The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans benefits, federally insured loans and mortgages, transportation and research grants, agricultural supports, school lunches and disaster assistance. In 1986, Congress strengthened the Act by amending it to increase incentives for whistleblowers to file lawsuits on behalf of the government, which has led to more investigations and greater recoveries.
Most false claims actions are filed under the Act’s whistleblower, or qui tam, provisions, which allow private citizens to file lawsuits alleging false claims on behalf of the government. If the government prevails in the action, the whistleblower, known as a relator, receives up to 30 perc ent of the recovery. The number of qui tam suits filed in fiscal year 2013 soared to 752 –100 more than the record set the previous fiscal year. Recoveries in qui tam cases during fiscal year 2013 totaled $2. 9 billion , with whistleblowers recovering $345 million.
Health Care Fraud
The $2. 6 billion in health care fraud recoveries in fiscal year 2013 marks four straight years the department has recovered more than $2 billion in cases involving health care fraud. This steady, significant and continuing success can be attributed to the high priority the Obama Administration has placed on fighting health care fraud. In 2009, Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement. This coordination has yielded historic results: From January 2009 through the end of the 2013 fiscal year, the department used the False Claims Act to recover $12 .1 billion in federal health care dollars. Most of these recoveries relate to fraud against Medicare and Medicaid. Additional information on the government’s efforts in this area is available at StopMedicareFraud.gov, a webpage jointly established by the Departments of Justice and Health and Human Services.
Some of the largest recoveries this past fiscal year involved allegations of fraud and false claims in the pharmaceutical and medical device industries. Of the $2. 6 billion in federal health care fraud recoveries, $1.8 billion were from alleged false claims for drugs and medical devices under federally insured health programs that, in addition to Medicare and Medicaid, include TRICARE, which provides benefits for military personnel and their families, veterans’ health care programs and the Federal Employees Health Benefits Program. The department recovered an additional $443 million for state Medicaid programs.
Many of these settlements involved allegations that pharmaceutical manufacturers improperly promoted their drugs for uses not approved by the Food and Drug Administration (FDA) – a practice known as “off-label marketing.” For example, drug manufacturer Abbott Laboratories Inc. paid $1.5 billion to resolve allegations that it illegally promoted the drug Depakote to treat agitation and aggression in elderly dementia patients and schizophrenia when neither of these uses was approved as safe and effective by the FDA. This landmark $1.5 billion settlement included $575 million in federal civil recoveries, $225 million in state civil recoveries and nearly $700 million in criminal fines and forfeitures. In another major pharmaceutical case, biotech giant Amgen Inc. paid the government $762 million, including $598.5 million in False Claims Act recoveries, to settle allegations that included its illegal promotion of Aranesp, a drug used to treat anemia, in doses not approved by the FDA and for off-label use to treat non-anemia-related conditions. For details, see Abbott, Abbott sentencing, and Amgen.
The department also settled allegations relating to the manufacture and distribution of adulterated drugs. For example, generic drug manufacturer Ranbaxy USA Inc. paid $505 million to settle allegations of false claims to federal and state health care programs for adulterated drugs distributed from its facilities in India. The settlement included $237 million in federal civil claims, $118 million in state civil claims and $150 million in criminal fines and forfeitures. For details, see Ranbaxy.
Adding to its successes under the False Claims Act, the Civil Division’s Consumer Protection Branch, together with U.S. Attorneys across the country, obtained 16 criminal convictions and more than $1. 3 billion in criminal fines, forfeitures and disgorgement under the Federal Food, Drug and Cosmetic Act (FDCA). The FDCA protects the health and safety of the public by ensuring, among other things, that drugs intended for use in humans are safe and effective for their intended uses and that the labeling of such drugs bears true, complete and accurate information.
In other areas of health care fraud, the department obtained a $237 million judgment against South Carolina-based Tuomey Healthcare System Inc., after a four-week trial, for violating the Stark Law and the False Claims Act. The Stark Law prohibits hospitals from submitting claims to Medicare for patients referred to the hospital by physicians who have a prohibited financial relationship with the hospital. Tuomey’s appeal of the $237 million judgment is pending. If the judgment is affirmed on appeal, this will be the largest judgment in the history of the Stark Law. For the court’s opinion, see Tuomey.
The department also recovered $26.3 million in a settlement with Steven J. Wasserman M.D., a dermatologist practicing in Florida, to resolve allegations that he entered into an illegal kickback arrangement with Tampa Pathology Laboratory that resulted in increased claims to Medicare. Tampa Pathology Laboratory previously paid the government $950,000 for its role in the alleged scheme. The $26.3 million settlement is one of the largest with an individual in the history of the False Claims Act. For details, see Wasserman.
Procurement Fraud
Fiscal year 2013 was a record year for procurement fraud matters. The department secured more than $887 million in settlements and judgments based on allegations of false claims and corruption involving government contracts. Prominent among these successes was the department’s $664 million judgment against Connecticut-based defense contractor United Technologies Corp. (UTC). A federal court found UTC liable for making false statements to the Air Force in negotiating the price of a contract for fighter jet engines. In 2004, the department had won a smaller judgment after a three-month trial. Both sides appealed, but the government’s arguments prevailed, resulting in the case being returned to the trial court to reassess damages. The $664 million judgment, which UTC has appealed, is the largest judgment in the history of the False Claims Act and, if the appellate court affirms, will be the largest procurement recovery in history. For details, see UTC.
The department also settled allegations of false claims with two companies in connection with their contracts with the General Services Administration (GSA) to market their products through the Multiple Award Schedule (MAS) program. To be awarded a MAS contract, and thereby gain access to the broad government marketplace, contractors must provide GSA with complete, accurate and current information about their commercial sales practices, including discounts afforded to their commercial customers. The government alleged that W.W. Grainger Inc., a national hardware distributor headquartered in Illinois, and Ohio-based RPM International Inc. and its subsidiary, Tremco Inc., a roofing supplies and services firm, failed to disclose discounts given to their commercial customers, which resulted in government customers paying higher prices. The department recovered $70 million from W.W. Grainger in a settlement that also included allegations relating to a U.S. Postal Services contract and $61 million from RPM International Inc. and Tremco. For details, see Grainger, RPM/Tremco.
Other Fraud Recoveries
A $45 million settlement with Japan-based Toyo Ink S.C. Holdings Co. Ltd. and its Japanese and United States affiliates (collectively Toyo) demonstrates the breadth of cases the department pursues. This settlement resolved allegations that Toyo misrepresented the country of origin on documents presented to the Department of Homeland Security’s U.S. Customs and Border Protection to evade antidumping and countervailing duties on imports of the colorant carbazole violet pigment into the United States. These duties protect U.S. businesses by offsetting unfair foreign pricing and foreign government subsidies. For details, see Toyo.
The False Claims Act also is used to redress grant fraud. In a significant case involving a grant from the Department of Education, Education Holdings Inc. (formerly The Princeton Review Inc.) paid $10 million to resolve allegations that the company fabricated attendance records for thousands of hours of afterschool tutoring of students that was funded by the federal grant. For details, see Education Holdings.
Recoveries in Whistleblower Suits
Of the $3. 8 billion the department recovered in fiscal year 2013, $2. 9 billion related to lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the department paid out more than $345 million to the courageous individuals who exposed fraud and false claims by filing a qui tam complaint. (The average share paid to whistleblowers in fiscal year 2013 cannot be determined from these numbers because the awards paid to whistleblowers in one fiscal year do not always coincide with the fiscal year in which the case was resolved, and the fiscal year’s recoveries may include amounts to settle allegations outside the whistleblower’s complaint.)
Whistleblower lawsuits were in the range of three to four hundred per year from 2000 to 2009, when they began their climb from 433 lawsuits in fiscal year 2009 to 752 lawsuits in fiscal year 2013. Due to the complexity of fraud investigations generally, the outcomes of many of the qui tam cases filed this past fiscal year are not yet known, but the growing number of lawsuits filed since 2009 have led to increased recoveries. Qui tam recoveries exceeded $2 billion for the first time in fiscal year 2010 and have continued to exceed that amount every year since. Qui tam recoveries this past fiscal year bring the department’s totals since January 2009 to $13.4 billion. During the same period, the department paid out $1.98 billion in whistleblower awards.
“These recoveries would not have been possible without the brave contributions made by ordinary men and women who made extraordinary sacrifices to expose fraud and corruption in government programs,” said Assistant Attorney General Delery. “We are also grateful to Congress and its continued support of strengthening the False Claims Act, including its qui tam provisions, giving the department the tools necessary to pursue false claims.”
In 1986, Senator Charles Grassley and Representative Howard Berman led successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009, Senator Patrick J. Leahy, along with Senator Grassley and Representative Berman, championed the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes. And in 2010, the passage of the Affordable Care Act provided additional inducements and protections for whistleblowers and strengthened the provisions of the federal health care Anti-Kickback Statute.
Assistant Attorney General Delery also expressed his deep appreciation for the dedicated public servants who investigated and pursued these cases. These individuals include attorneys, investigators, auditors and other agency personnel throughout the Justice Department’s Civil Division, the U.S. Attorneys’ Offices, the Departments of Defense and Health and Human Services, the various Offices of Inspector General and the many other federal and state agencies that contributed to the department’s recoveries this past fiscal year.
“The department’s continued success in recovering fraudulent claims for taxpayer money this past fiscal year is a product of the tremendous skill and dedication of the people who worked on these cases and investigations and continue to work hard to protect against the misuse of taxpayer dollars,” said Delery.
Justice Department Announces Funding Opportunities for Federally-Recognized Tribes and Tribal ConsortiaRead the Press Release
The U.S. Department of Justice today announced the opening of a comprehensive grant solicitation for funding to support public safety, victim services, and crime prevention by American Indian and Alaska Native governments. The department’s FY 2014 Coordinated Tribal Assistance Solicitation (CTAS) is available at www.justice.gov/tribal/open-sol.html .
“Over the past four years, more than $437 million in much-needed assistance has been provided to American Indian and Alaska Native communities through the Coordinated Tribal Assistance Solicitation,” said Associate Attorney General Tony West. “These resources are helping to strengthen justice, hope, and healing in tribal communities and are supporting efforts to intervene in the lives of at-risk youth, prevent violence against women, improve community policing, and explore alternatives to incarceration.”
CTAS is administered by the Justice Department’s Office of Justice Programs (OJP), the Office of Community Oriented Policing Services (COPS) and the Office on Violence Against Women (OVW). The funding can be used to enhance law enforcement; bolster adult and juvenile justice systems; prevent and control juvenile delinquency; serve victims of sexual assault, domestic violence, and elder abuse; and support other efforts to combat crime.
Applications for CTAS are submitted through the Justice Department’s Grants Management System (GMS) which enables grantees to register and apply for CTAS online. Applicants should register early, and no later than Tuesday, March 4, 2014, in order to resolve difficulties in advance of the application deadline. The deadline for submitting applications in response to this grant announcement is 7:00 p.m. EST on Monday, March 24, 2014 .
The FY 2014 CTAS reflects improvements and refinements from earlier versions. The department received feedback from tribal leaders during tribal consultations and listening sessions, from written comments from applicants and grantees, and from a specially developed assessment tool that was used to obtain information about the application experience.
For the FY 2014 CTAS, a tribe or tribal consortium will submit a single application and select from nine competitive grant programs referred to as Purpose Areas. This approach allows the department’s grant-making components to consider the totality of a tribe’s overall public safety needs.The nine purpose areas are:
1. Public Safety and Community Policing (COPS)
2. Comprehensive Tribal Justice Systems Strategic Planning (BJA)
3. Justice Systems, and Alcohol and Substance Abuse (BJA)
4. Corrections and Correctional Alternatives (BJA)
5. Violence Against Women Tribal Governments Program (OVW)
6. Children’s Justice Act Partnerships for Indian Communities (OVC)
7. Comprehensive Tribal Victim Assistance Program (OVC)
8. Juvenile Justice (OJJDP)
9. Tribal Youth Program (OJJDP)
Tribes or tribal consortia are encouraged to explore other funding opportunities for which they may be eligible under non-tribal, government-specific federal grant programs. Additional funding information may be found at www.grants.gov or the websites of individual agencies.
Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination, and action on public safety in tribal communities.Jury Finds Pueblo Bishop Gang Member Guilty in RICO Murder Case for Ambush Killing of Father in Front of His 2-Year-Old SonRead the Press Release
LOS ANGELES -- A member of the Pueblo Bishop Bloods street gang was convicted by a federal jury today for the murder of a young man with no gang affiliation who was executed in front of his 2-year-old son.
Rondale Young, also known as “P-Grump,” 30, of South Los Angeles, was convicted on several counts after a two-week jury trial before United States District Judge S. James Otero. Young was found guilty of violating the federal Racketeer Influenced and Corrupt Organizations Act (RICO) in relation to the murder of 23-year-old Francisco Cornelio.
In addition to the RICO offense, Young was convicted of witness intimidation related to Young’s conduct after he was arrested for the murder. The jury also found Young guilty of conspiring to murder Mr. Cornelio, as well as the actual murder, both of which were done in furtherance of the Pueblo Bishop criminal enterprise. In addition, Young was convicted of using a gun that resulted in murder. Based on these convictions, Young faces a mandatory minimum term of life in federal prisonment, plus ten years.
Young is scheduled to be sentenced by Judge Otero on May 26.
The federal convictions come after Young had been acquitted in Los Angeles Superior Court on murder charges related to the slaying of Mr. Cornelio. After the acquittal in state court, the FBI’s Los Angeles Metropolitan Task Force on Violent Gangs re-investigated the case and uncovered additional evidence related to the murder and Young’s involvement with the Pueblo Bishops.
The evidence presented at trial showed that Young drove his car, which contained other armed gang members, into rival gang territory early on the morning of August 2, 2009. The Pueblo Bishops were seeking retaliation after an earlier shooting against their gang. The Pueblo Bishops targeted Mr. Cornelio because he appeared to be Hispanic and was in rival gang territory. According to witnesses who testified, two Pueblo Bishops, who were armed with shotguns, got out of Young’s vehicle and ambushed an unsuspecting Mr. Cornelio, who was washing his car. The gang members shot him once in the back without saying a word, while the victim’s son sat in the back seat of the car. There was no evidence that Cornelio had any gang ties.
The murder was unsolved prior to a federal racketeering indictment that was unsealed in August 2010. http://www.justice.gov/archive/usao/cac/Pressroom/pr2010/122.html). The federal indictment charged that Young and his co-defendants were members of a criminal enterprise that engaged in murder, drug dealing, firearms trafficking, witness intimidation and armed robbery as part of the gang’s efforts to control and terrorize the Pueblo Del Rio Housing Projects in South Los Angeles.
Young is the third person to be convicted in federal court in relation to the murder of Mr. Cornelio. In a prior trial, a federal jury determined that Anthony “Bandit” Gabrourel was also part of the plot by Pueblo Bishop members to murder Mr. Cornelio. At that trial, the evidence showed that Gabourel was one of two Pueblo Bishops who exited Young’s car with shotguns and fatally shot Mr. Cornelio. Gabrourel was sentenced earlier this year by Judge Otero to 40 years in federal prison. The third person conviction in relation to the murder was sentenced to five years in prison for hiding the murder weapon after the slaying.
As a result of the federal investigation into the racketeering activity of the Pueblo Bishop Bloods, a total of 45 defendants were charged in federal indictments. Prosecutors have secured convictions against 41 of those defendants. Two defendants are in state custody after receiving lengthy sentences for violent gang crimes, and two are fugitives.
The investigation into the Pueblo Bishop Bloods was conducted by the Federal Bureau of Investigation; the Los Angeles Police Department, Newton Division; the United States Department of Housing and Urban Development, Office of Inspector General; and the Los Angeles County District Attorney’s Office.
Release No. 13-151
J. Kevin Kelley Sentenced to Six Years in Prison for BribesRead the Press Release
Former Cuyahoga County employee and Parma School Board member J. Kevin Kelley was sentenced today to six years in prison and ordered to pay $605,035 for his involvement in several bribery schemes, federal law enforcement officials announced today.
Kelley, 44, formerly of Parma, previously pleaded guilty in U.S. District Court to multiple counts of Hobbs Act conspiracy, conspiracy to commit mail fraud, conspiracy to commit theft or bribery concerning programs receiving federal funds, theft or bribery concerning programs receiving federal funds and making false tax returns.
“Kevin Kelley, the last of more than 60 indicted individuals in Operation Airball to be sentenced, exploited his corrupt connections in order to line his pockets,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office. “The FBI will continue efforts to combat misuse of taxpayers’ dollars at any level.”
Kelley previously pleaded guilty to several bribery schemes involving Cuyahoga County Auditor Frank Russo, Cuyahoga County Commissioner Jimmy Dimora, Anthony O. Calabrese, Ferris Kleem and others.
Kelley admitted to helping organize a bribery scheme in which Cuyahoga County officials Jimmy Dimora and Frank Russo were sent to Las Vegas in exchange for supporting county funding for the agency. Kelley was paid my by Alternatives Agency for “consulting services” and he used a portion of the money to purchase first-class airfare to Las Vegas for Dimora, Russo and Russo’s companion, according to court documents.
Kelley organized the trip in coordination with Ferris Kleem and then helped Kleem get an inspector he specifically requested to the Snow Road resurfacing project, which was being performed by Kleem’s company, according to court documents.
Calabrese hired Kelley as a consultant for Alternatives Agency, paying up to $4,900 a month, but Kelley performed little actual work for the agency. Instead the money was paid in order to obtain favorable consideration from Kelley and others on business matters unrelated to Alternatives Agency, according to court documents.
On several occasions, Kelley also steered county contracts and Parma schools contracts to companies that paid bribes to him or to his friends and associates, according to court documents.
Kelley also filed false tax returns in years 2003-2007 in which he did not disclose $189,659 of income, according to court documents.
The case was prosecuted by Assistant United States Attorneys Antoinette T. Bacon, Ann C. Rowland and Nancy L. Kelley following an investigation by the FBI and IRS – Criminal Investigation.
Iowa Woman Sentenced for Distribution of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that a Cushing, Iowa, woman convicted of Distribution of a Controlled Substance was sentenced on December 19, 2013 by U.S. District Judge Roberto A. Lange.
Dana Hoover, a/k/a Dana Strawn, age 52, was sentenced to 27 months in custody, 3 years of supervised release, a $2,900 fine and a $100 special assessment to the Federal Crime Victims Fund.
Hoover was indicted for the above charge by a federal grand jury on May 15, 2013. She pled guilty on August 29, 2013.
The conviction stems from an incident occurring in April of 2012 when Hoover was introduced to an undercover agent. After conversation and exchanging text messages, Hoover agreed to sell methamphetamine to the agent, whom Hoover knew to be located in the central South Dakota area. The agent wired money to Hoover and arrangements were made for the agent to pick up the methamphetamine from Hoover. On May 10, 2012, at a truck stop near Sioux Falls, South Dakota, Hoover met the agent and delivered the methamphetamine.
The State Health Lab confirmed that the substance Hoover sold on May 10, 2012, was methamphetamine with a weight of 7.39 grams. The total amount of methamphetamine attributed to Hoover for distribution was at least 20 grams but less than 30 grams.
The investigation was conducted by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Hoover was immediately turned over to the custody of the U.S. Marshals Service.
I-55 Bandit Pleads Guilty to Bank Robbery ChargesRead the Press Release
St. Louis, MO - ANDREW MABERRY, O’Fallon, IL, who the FBI referred to as the I-55 Bandit, entered a guilty plea to bank robbery, including the July 2, 2013, robbery of the Commerce Bank in Jefferson County, Missouri. He entered his plea before United States District Judge Catherine D. Perry in St. Louis.
According to court documents, on July 2, 2013, Maberry robbed the Commerce Bank in Arnold, Missouri. He also admitted with his plea agreement to nine other robberies in five states: May 15, 2013, US Bank in Crystal City, Missouri; May 21, 2013, First State Community Bank in Cape Girardeau, Missouri; May 6, 2013, Scott Credit Union in Edwardsville, Illinois; June 5, 2013, Harford Bank in Bel Air, Maryland; June 9, 2013, TD Bank located in Essex, Maryland; July 19, 2013, Wells Fargo Bank in Bel Air, Maryland; July 24, 2013 Susquehanna Bank in Ocean City, Maryland; July 30, 2013 Huntington National Bank in Hurricane, West Virginia; and August 14, 2013 Bank of Jackson in Jackson, Tennessee. On September 10, 2013, a multi-state press release was issued, which included bank security camera photographs of the robber who had been dubbed the "I-55 Bandit." The FBI here and in other districts received numerous phone calls from individuals stating that they know Andrew Maberry. On the same date, FBI in St. Louis was contacted and told that the I-55 Bandit wanted to turn himself in, and on September 11, 2013, Andrew Caleb Maberry turned himself in to the FBI in St. Louis.
Bank robbery carries a maximum penalty of 20 years in prison and or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges. A sentencing date has not been set.
This case is being investigated by the Federal Bureau of Investigation with assistance from multiple law enforcement agencies from several states. Assistant United States Attorney Tom Mehan is handling the case for the U.S. Attorney’s Office.
Houston Man Sentenced for Using Fake Credit Cards and Other Devices to Illegally Access Cash While at Southeast Louisiana CasinosRead the Press Release
LAKE CHARLES, La. –United States Attorney Stephanie A. Finley announced that Deamioune Fransyre Caples, 33, of Houston, Texas, was sentenced Thursday by U.S. District Judge Patricia Minaldi, to 41 months in prison, three years of supervised release, and 40 hours of community service for using counterfeit credit cards and other devices to steal thousands of dollars. He was also ordered to pay restitution of $70,700 taken in the scheme. He pleaded guilty August 1, 2013.
According to evidence presented at the guilty plea, between June 21, 2012 and January 13, 2013, Caples used counterfeit credit cards and other access devices at Delta Downs, L’Auberge Du Lac, and Isle of Capri casinos to access money. The devices included Green Dot Visa cards, 123 Rewards cards, Chase cards, Wells Fargo cards and Bank of America cards among others. The cards displayed Caples’ name on the front, but the magnetic strip on the back contained the identity of the financial institution and individual who had not authorized Caples to use their account information. The defendant made the counterfeit access devices in Texas and traveled to the Western District of Louisiana to use them.
The U.S. Secret Service investigated the case. Assistant U.S. Attorney Howard C. Parker prosecuted the case.
Hilo Man Pleads Guilty to Fraud and Tax ChargesRead the Press Release
HONOLULU – Justin Wade Smith, age 32, formerly of Hilo, pled guilty on December 19, 2013 in federal court to two counts of wire fraud, and one tax charge, growing out of his operation of an “advance fee” scheme.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that, according to information presented in court, Smith engaged in a scheme to defraud involving the solicitation of money through various false representations. Smith’s false statements included telling others that (1) he would inherit money from a sizable family trust, once he paid certain fees and costs, and (2) he was a contractor for a law enforcement agency, and could generate large fees through drug seizures. In court proceedings, Smith admitted asking people to “advance” money to him, and promising to repay the amounts with substantial interest once he obtained money from the family trust or law enforcement agency. Smith admitted that he was not an heir to a large trust, or a law enforcement contractor, and that he used the money received from others to support his own lifestyle.
According to the court documents, Smith ran his scheme from 2006 through 2012 in Hawaii and elsewhere, and obtained more than $1 million in cash, Western Union or Moneygram wire transfers, and the “loading” of a prepaid debit card belonging to Smith.
During court proceedings, Smith also pled guilty to willfully failing to file a tax return for the calendar year 2012, during which he received approximately $233,995 from his wire fraud scheme. Under the plea agreement, Smith admitted failing to report total income of $1,024,196 between 2007-2012, and that the resulting tax liability was $185,386.
Smith will be sentenced on March 31, 2014 by United States District Judge J. Michael Seabright, and will face maximum penalties of 20 years of imprisonment on each of the wire fraud counts, and up to one year of imprisonment on the failure to file tax return charge. Smith will also be ordered to pay restitution to the victims of his wire fraud scheme, and to pay up to $185,386 in back taxes, plus interest and penalties to the Internal Revenue Service.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service -- Criminal Investigation, with the assistance of the Hawaii County Police Department. The prosecution was handled by Assistant United States Attorney Larry Tong.
Health Care Clinic Owner Sentenced for Role in $7 Million Medicare Fraud SchemeRead the Press Release
The owner of a Miami home health care company was sentenced to serve 235 months in prison yesterday for her participation in a $7 million health care fraud scheme involving defunct home health care company Anna Nursing Services Corp.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Dora Moreira, 46, was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In addition to her prison term, Moreira was sentenced to serve three years of supervised release and ordered to pay $6,928,931 in restitution.
In October 2013, Moreira was convicted by a jury of one count of conspiracy to commit health care fraud, one count of conspiracy to defraud the United States and receive and pay health care kickbacks, one count of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering and five counts of money laundering.
Moreira was the owner and operator of Anna Nursing, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.
According to evidence presented at trial, Moreira operated Anna Nursing for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.
Moreira paid kickbacks and bribes to patients, negotiated and interacted with patient recruiters, and coordinated and oversaw the submission of fraudulent claims to the Medicare program. Moreira also laundered money received from Medicare in order to conceal her financial transactions and generate cash needed to pay kickbacks to patients, patient recruiters, and others in return for assisting her in the fraudulent scheme at Anna Nursing.
From approximately July 2010 through approximately May 2013, Anna Nursing was paid approximately $7 million by Medicare for fraudulent claims for home health services that were not medically necessary and/or not provided.
This case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case was prosecuted by Assistant Chief Benton Curtis and Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
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.
Grand Rapids Man Sentenced to 23 Years in Prison and Forfeits House for Child Pornography ConvictionRead the Press Release
GRAND RAPIDS, MICHIGAN – Gary William Hampton, 63, of Grand Rapids, was sentenced to 23 years in federal prison for producing and possessing child pornography. Hampton’s house, where the abuse occurred, was forfeited as a result of the conviction. U.S. Chief District Judge Paul L. Maloney explained, “The offense conduct in this case is horrendous. Aggravating factors include extortion of the young person and supplying him with controlled substances. I am also very concerned with the defendant’s statements to his friend that there was no victim here.” The prison term will be followed by 10 years of supervised release.
U.S. Attorney Patrick A. Miles, Jr. commended the lengthy sentence stating, “Protecting children from sexual exploitation is a high priority for this U.S. Attorney’s office. The sentence and the forfeiture of the defendant’s house should send a deterrence message to others who might consider creating the supply and the demand for child pornography offenses. If you commit a child pornography offense inside your home, you risk losing your home as part of the sentence.”
The case came to the attention of law enforcement when the victim reported that he was sexually abused by Hampton from 2003 to 2007, when the victim was 13 to 17 years old. Hampton gave money and illegal drugs to the boy in exchange for sex, and Hampton threatened the victim to keep it a secret. Police located sexually explicit photographs of the victim posing in Hampton’s house and engaging in various sex acts. Hampton pled no contest in federal court to a two-count indictment charging Production and Possession of Child Pornography.
As part of a coordinated investigation and prosecution, the Kent County Prosecutor’s Office pursued prosecution in state court for the underlying sexual abuse of the minor. On August 15, 2013, Hampton pled guilty in the 17th Circuit Court in Grand Rapids, MI, to one count of Criminal Sexual Conduct – First Degree and was sentenced to 10-15 years in jail. The federal and state sentences will run concurrently.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.The Federal Bureau of Investigation (FBI) and Grand Rapids Police Department (GRPD) investigated the case. Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the case.
END
Grand Jury Returns IndictmentsRead the Press Release
MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.Mexican citizen charged with illegal re-entry into U.S.
Severo De Santiago De La Cruz, age 33, a citizen of Mexico found in Lyon County, Minnesota, is charged with one count of illegally re-entering the United States after previously being deported subsequent to a conviction for an aggravated felony.
If convicted, De La Cruz faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney Sarah E. Hudleston.Minneapolis man charged with possessing with intent to distribute methamphetamine
Isreal Landa-Leon, age 28, of Minneapolis, is charged with one count of possession with intent to distribute methamphetamine.
If convicted, Landa-Leon faces a potential maximum penalty of 40 years in prison. This case is the result of an investigation by the U.S. Drug Enforcement Administration. It is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.Man charged with robbing several banks
Maurice Dixon, age 46, no known address, was charged with three counts of bank robbery and one count of interference with commerce by robbery, pursuant to the Hobbs Act.
If convicted, Dixon faces a potential maximum penalty of 20 years in prison on each count. This case is the result of an investigation by the Federal Bureau of Investigation, and the police departments of Minneapolis, Roseville and St. Paul. It is being prosecuted by Assistant U.S. Attorney Kevin S. Ueland.Mexican citizen charged with illegal re-entry into U.S.
Adain Salcido-Perez, a citizen of Mexico found in Richfield, Minnesota, is charged with one count of illegally re-entering the United States after previously being deported.
If convicted, Salcido-Perez faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney Andrew Dunne.Georgia Man Sentenced to Prison for Selling Firearms to Felons to Support Violent Ku Klux Klan GroupRead the Press Release
ABINGDON, VIRGINIA – United States Attorney Timothy J. Heaphy announced today that a Georgia man and member of the Ku Klux Klan has been sentenced to imprisonment in the United States District Court for the Western District of Virginia in Abingdon.
On December 19, 2013, Michael Lee Fullmore, 30, of Claxton, Ga., was sentenced to 52 months imprisonment after pleading guilty to two counts of providing a firearm to a convicted felon.
“Those of us who work in law enforcement will do all we can to keep firearms away from prohibited persons,” United States Attorney Timothy J. Heaphy said today. “Mr. Fullmore ignored that important restriction and has now been held accountable. The fact that his fraudulent gun sales were motivated by a desire to finance hate crimes makes his conduct more despicable. ”
According to evidence presented at the guilty plea hearing and sentencing by Assistant United States Attorney Zachary T. Lee, Fullmore, a member of the Georgia Knight Riders of the Ku Klux Klan, came to the attention of the Federal Bureau of Investigation when he began to take steps to establish a more violent and radical sub-group of the Ku Klux Klan, which he intended would commit violent crimes against minorities.
Fullmore believed that this organization could be supported by selling firearms to convicted felons and militia groups. On numerous occasions, Fullmore sold firearms, including an AR-15 assault rifle and an AK-47 assault rifle with an obliterated serial number, to a convicted felon in Georgia and Virginia who was working with the FBI as a confidential informant. On one occasion, Fullmore also sold marijuana and firearms to an undercover law enforcement officer. Fullmore was arrested by the FBI in June 2013 after he stated to the confidential informant that he wanted to fire-bomb a Catholic church in the Claxton, Ga. area based upon its ties to the Hispanic community.
The investigation of this case was conducted by the Federal Bureau of Investigation Atlanta and Richmond Divisions and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney Zachary T. Lee of the United States Attorney’s Office in Abingdon is prosecuting the case.
Genzyme Corp. to Pay $22.28 Million to Resolve False <br /> Claims Allegations Related to “Slurry” Used in PatientsRead the Press Release
Genzyme Corp. has agreed to pay $22.28 million to resolve allegations that it marketed, and caused false claims to be submitted to federal and state health care programs for use of, a “slurry” version of its Seprafilm adhesion barrier, the Justice Department announced today. Seprafilm is a thin film intended to reduce adhesions after surgery by forming a bio-resorbable barrier between abdominal tissue and organs. Genzyme is a biotechnology corporation based in Cambridge, Mass., and was acquired by Sanofi-Aventis SA in April 2011.
“There will be consequences when medical device companies alter products to increase sales and profits without regard for risks to patient safety,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Federal health care participants should receive only devices that are medically reasonable and necessary.”The government alleges that Genzyme sales representatives taught doctors and other staff to cut the Seprafilm sheets into small pieces, add saline and allow the pieces to dissolve until the desired consistency was reached. This mixture was referred to as “slurry.” Genzyme sales representatives traded recipes for slurry, and trained each other in how to create it. The slurry was used in laparoscopic or “key hole” surgeries by inserting a catheter filled with the mixture into the body and squirting it into the abdominal cavity. Seprafilm is FDA-approved for use in open abdominal surgery but not for minimally invasive surgeries, such as laparoscopic or key hole surgery. Allegedly, as a result of this conduct, Genzyme knowingly caused hospitals and other purchasers of Seprafilm to submit false and fraudulent claims to federal health care programs for uses of Seprafilm that were not reimbursable.
“Beneficiaries of federal health care plans, including Medicare recipients and military families, should not be treated with devices that have been improperly altered,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “When companies promote such practices, resulting in the submission of health care claims that cannot legally be reimbursed, they will be made to pay by this office and the Department of Justice.”“As with drugs, patients need assurance that medical devices are safe and effective,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “The government contends that Genzyme marketed an altered, untested device. Taxpayers and patients deserve better.”
The allegations resolved by today’s settlement were originally raised in two lawsuits filed against Genzyme under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery. The whistleblowers, or relators’, share of the settlement has not been determined.Assistant Attorney General Delery thanked the Office of Chief Counsel for the Food and Drug Administration, the U.S. Attorney’s Office for the Middle District of Florida, the Justice Department’s Commercial Litigation Branch, the Defense Health Agency, the Office of Personnel Management, the Department of Veterans Affairs and the Department of Health and Human Services Office of Inspector General for the collaboration that resulted in the settlement.
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 Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The two lawsuits are captioned United States ex rel. Fuentes, Russo v. Genzyme Corp., No. 09-cv-1245 (M.D. Fla.) and United States ex rel. Kelley v. Genzyme Corp., No. 10-cv-549 (M.D. Fla.).
Genzyme Corp. to Pay $22.38 Million to Resolve False Claims Allegations Related to "Slurry" Used in PatientsRead the Press Release
WASHINGTON - Genzyme Corp. has agreed to pay $22.28 million to resolve allegations that it marketed, and caused false claims to be submitted to federal and state health care programs for use of, a “slurry” version of its Seprafilm adhesion barrier, the Justice Department announced today. Seprafilm is a thin film intended to reduce adhesions after surgery by forming a bio-resorbable barrier between abdominal tissue and organs. Genzyme is a biotechnology corporation based in Cambridge, Mass., and was acquired by Sanofi-Aventis SA in April 2011.
“There will be consequences when medical device companies alter products to increase sales and profits without regard for risks to patient safety,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Federal health care participants should receive only devices that are medically reasonable and necessary.”
The government alleges that Genzyme sales representatives taught doctors and other staff to cut the Seprafilm sheets into small pieces, add saline and allow the pieces to dissolve until the desired consistency was reached. This mixture was referred to as “slurry.” Genzyme sales representatives traded recipes for slurry, and trained each other in how to create it. The slurry was used in laparoscopic or “key hole” surgeries by inserting a catheter filled with the mixture into the body and squirting it into the abdominal cavity. Seprafilm is FDA-approved for use in open abdominal surgery but not for minimally invasive surgeries, such as laparoscopic or key hole surgery. Allegedly, as a result of this conduct, Genzyme knowingly caused hospitals and other purchasers of Seprafilm to submit false and fraudulent claims to federal health care programs for uses of Seprafilm that were not reimbursable.
“Beneficiaries of federal health care plans, including Medicare recipients and military families, should not be treated with devices that have been improperly altered,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “When companies promote such practices, resulting in the submission of health care claims that cannot legally be reimbursed, they will be made to pay by this office and the Department of Justice.”
“As with drugs, patients need assurance that medical devices are safe and effective,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “The government contends that Genzyme marketed an altered, untested device. Taxpayers and patients deserve better.”
The allegations resolved by today’s settlement were originally raised in two lawsuits filed against Genzyme under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery. The whistleblowers, or relators’, share of the settlement has not been determined.
Assistant Attorney General Delery thanked the Office of Chief Counsel for the Food and Drug Administration, the U.S. Attorney’s Office for the Middle District of Florida, the Justice Department’s Commercial Litigation Branch, the Defense Health Agency, the Office of Personnel Management, the Department of Veterans Affairs and the Department of Health and Human Services Office of Inspector General for the collaboration that resulted in the settlement. This case was investigated jointly by Assistant U.S. Attorney Charles Harden of the United States Attorney’s Office for the Middle District of Florida and Trial Attorney Charles Biro of the Commercial Litigation Branch of the Justice Department’s Civil Division.
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 Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.The claims settled by this agreement are allegations only, and there has been no determination of liability. The two lawsuits are captioned United States ex rel. Fuentes, Russo v. Genzyme Corp., No. 09-cv-1245 (M.D. Fla.) and United States ex rel. Kelley v. Genzyme Corp., No. 10-cv-549 (M.D. Fla.).