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4 November 2013
Twin Falls Man Sentenced for Possessing Firearm with Obliterated Serial NumberRead the Press Release
BOISE – Brock Tyler Beutler, 24, of Twin Falls, Idaho, was sentenced today in United States District Court to seven months in prison for possession of a firearm with an obliterated serial number, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also sentenced Beutler to serve three years of supervised release, with three months of home detention, 80 hours of community service, and forfeiture of the firearm he possessed. He pleaded guilty to the charge on August 14, 2013.
According to court documents, officers with the Twin Falls Police Department found a handgun with an obliterated serial number in Beutler’s waistband during a traffic stop on February 5, 2013. When asked about the obliterated serial number on the firearm, Beutler admitted to filing off the serial number so that it could not be traced. Beutler was also in possession of a small amount of methamphetamine.
The case was investigated by the Twin Falls Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Three Murphysboro Residents Charged with Drug OffensesRead the Press Release
On October 31, 2013, Maurice L. Robinson, a/k/a “Ray Ray,” 33, Jamie Kay Kelly, a/k/a “Jamie K.” and “Jamie K. Short,” 45, and Harold Lawayne Barron, a/k/a “Wayne,” 50, all of Murphysboro, were arraigned in federal court in Benton, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. On October 23, 2013, Robinson, Kelly, and Barron, were charged by indictment with Conspiracy to Distribute Crack Cocaine. Kelly and Barron were also charged with Conspiracy to Manufacture Methamphetamine. At the October 31, 2013, court hearing, all three were ordered held without bond pending a December 30, 2013, jury trial.
The crack cocaine offense occurred between May 2013, and September 2013, in Jackson County. The methamphetamine offense occurred between August 2012, and October 2013, in Jackson and Perry Counties. Both offenses carry penalties of up to 20 years in prison, to be followed by 3 years supervised release, and a fine of up to $1,000,000.
Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Southern Illinois Enforcement Group, Murphysboro Police Department, Illinois State Police, and the Drug Enforcement Administration. The Jackson County State’s Attorney’s Office assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Tax Return Preparer Found Guilty for Involvement in Stole Identity refund fraud schemeRead the Press Release
Tampa, Florida– Acting United States Attorney A. Lee Bentley, III announces that a federal jury has found Kenyon Lamont Williams guilty of conspiracy to defraud the United States, filing false claims with the United States, and wire fraud. In addition, Williams was found guilty on two counts of wire fraud and two counts of aggravated identity theft. He faces a maximum penalty of forty-nine years in federal prison. A sentencing hearing has been set for January 24, 2014.
Williams was first indicted on January 10, 2013. Subsequently, a grand jury returned a superseding indictment against him on April 18, 2013.
According to testimony and evidence presented at trial, Williams worked in San Diego, California as a certified tax return preparer. Between 2007 and 2010, he worked as a part-time seasonal tax preparer. Around the beginning of 2011, Williams opened his own tax preparation service, which he operated out of his residence.
On January 25, 2012, Williams called his friend and fellow tax return preparer, Alesia Spivey, who lived in Tampa, Florida, and discussed the 2012 tax season and Williams’ desire to maximize refund amounts for his clients. During this conversation, Williams solicited information from Spivey regarding methods used, in Tampa, to increase tax refunds. Spivey and Carlista Hawls explained to Williams that individuals in Tampa were using a particular interest income scheme to file bogus tax returns with the IRS. Spivey instructed Williams on how to fill out the tax returns by employing this interest income scheme.
During several subsequent telephone conversations, Williams, Spivey, and Hawls discussed the interest income scheme being employed by them. Between January 25 and July 19, 2012, Williams prepared 168 fraudulent tax returns for tax year 2011 using bogus interest income figures provided by Spivey and Hawls. In all, the 168 fraudulent tax returns accepted by the IRS requested approximately $670,513.00 in refunds, resulting in the payment of approximately $517,744.00 in tax refunds.
In addition, on March 2, 2012, Spivey and Hawls flew to San Diego, California to meet with Williams. During that trip, Williams provided Spivey and Hawls with a list of names, dates of birth, and social security numbers, including a stack of Navy blood donor records, to be used in preparing fraudulent tax returns in Tampa.
Spivey pleaded guilty to her role in the scheme in January 2013. For her involvement in the scheme, Hawls pleaded guilty in February 2013. Both are currently scheduled to be sentenced in December 2013.
This case was investigated by the Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorneys Simon Gaugush and Adam Saltzman.
Supporting Documents: U.S. V. S.A.C. Capital Advisors, LP, S.A.C. Capital Advisors LLC, CR Intrinsic Investors, LLC, and Sigma Capital Management, LLCRead the Press Release
U.S. v. SAC Capital Advisors, LP, et al. Indictment
U.S. v. SAC Capital Advisors, LP, et al. Complaint - 13 Civ 5182
U.S. v. SAC Capital Advisors, LP, et al. Change of Plea Order
U.S. v. SAC Capital Advisors LP, et al. Cover Ltr, Plea Agt, and StipSt. Louis Man Sentenced for Failure to Register as A Sex OffenderRead the Press Release
David M. Hightower, a 23-year old, St. Louis, Missouri, man was sentenced on November 4, 2013, in federal district court in East St. Louis, Illinois, on one count of failure to register as a sex offender, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Hightower was sentenced to 18 months in prison, five years of supervised release, ordered to pay $100 special assessment and a $200 fine.
The violation occurred between July 14, 2009, and February 22, 2013. Hightower was required to register as a sex offender under both Illinois law and the Sex Offender Registration and Notification Act because he was convicted of Aggravated Criminal Sexual Abuse on September 16, 2005, in Madison County, Illinois.
Hightower signed an Illinois Sex Offender Registration Act Form on July 13, 2009, acknowledging he understood the conditions of maintaining his sex offender registration. It was discovered during an interview by a law enforcement officer on February 12, 2013, in St. Louis, Missouri, in relation to another charge that an active warrant was in effect in Madison County, Illinois, for his failure to register as a sex offender. Hightower admitted living in Missouri when the violation occurred, and not having registered as a sex offender in Missouri until February 23, 2013.
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 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 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.”
The case was investigated by the United States Marshals Service and prosecuted by Assistant United States Attorney Daniel T. Kapsak.
Snohomish County Woman who led Gun Trafficking Conspiracy Pleads Guilty to Gun and Drug ChargesRead the Press Release
A 34-year-old woman from Marysville, Washington, pleaded guilty today in U.S. District Court in Seattle to unlawful dealing in firearms, being a felon in possession of a firearm and distribution of methamphetamine, announced U.S. Attorney Jenny A. Durkan. HEATHER CHANCEY, a/k/a HEATHER LEE SLATER, was the leader of a group of four people indicted in July 2013, following an undercover investigation. Under the terms of the plea agreement, both sides will recommend between seven and ten years in prison when CHANCEY is sentenced by U.S. District Judge James L. Robart on February 3, 2014. The judge is not bound by the recommendation and can impose any sentence up to forty years allowed by law.
According to the indictment, on multiple occasions between October 2012 and January 2013, HEATHER CHANCEY and her coconspirators sold guns to an undercover law enforcement agent. Most of the sales occurred in the parking lot of the Tulalip Resort Casino in Marysville, Washington. Some of the sales occurred in other parking lots of businesses in Marysville or Arlington, Washington or at a Marysville residence. CHANCEY was prohibited from possessing firearms because of a 2001 conviction for methamphetamine possession. Some of the guns she possessed and sold in this case include: two sawed off shotguns and 13 regular shotguns – some with no visible serial numbers; 21 rifles – some with obliterated serial numbers; and four handguns. In her plea agreement, CHANCEY admits making the sales or brokering the deals between the undercover officer and her coconspirators. CHANCEY also admits an October 1, 2012 attempt to sell methamphetamine to the undercover officer at the same time she was selling him a firearm.
This investigation was conducted by the Snohomish Regional Gang and Drug Task Force, the Seattle Police Department, and the FBI. During the investigation, those agencies were assisted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Snohomish County Violent Offender Task Force and the United States Marshal’s Violent Offender Task Force. The case is being prosecuted by Assistant United States Attorney Kate Crisham.
San Diego Cfo Sentenced for Embezzling over $1 Million to Fund Fledgling Professional Football LeagueRead the Press Release
United States Attorney Laura E. Duffy announced that Jaime Cuadra, the former Chief Financial Officer of Oceanic Enterprises, Inc., was sentenced today by United States District Judge Marilyn L. Huff to serve 41 months in custody based on his conviction of wire fraud and filing a false federal income tax return. The charges stemmed from Cuadra’s embezzlement of $1,089,813.26 from Oceanic and its parent company, Umami Sustainable Seafood, Inc., a San Diego-based, publically traded company. Judge Huff also ordered Cuadra to pay back the $1,089,813.26 stolen from Umami and to pay $387,347.58 in back taxes to the Internal Revenue Service.
According to court documents, Cuadra embezzled the money from 2010 to 2013, by taking advantage of his access to one of Oceanic’s business accounts as the company’s CFO. In his guilty plea, Cuadra admitted that he carried out the scheme, in part, by falsifying Oceanic’s financial records by coding illicit transfers and expenditures as legitimate business expenses.
Court records show that during the period of the fraud, Cuadra not only served as Oceanic’s CFO, but also as the President and CEO of a fledgling football league. As a result of this conviction, Cuadra resigned from both organizations. Cuadra converted Oceanic’s funds to financially support the football league as well as for his personal benefit. Specifically, Cuadra used stolen funds to develop the football league and attract investors by paying league executives, as well as the league’s marketing, consulting, and public relations fees. For example, Cuadra directed over $200,000 to a woman who served as the league’s Chief Marketing Officer and Executive Vice President at the time. Cuadra’s use of embezzled funds for his personal expenditures included: (1) support for other outside business ventures (including a T-shirt business); (2) leasing a Porsche Cayenne; (3) travel, hotels, and meals; (4) a variety of miscellaneous purchases, including artwork, designer clothing, computers and entertainment systems, and tickets to sporting events; and (5) transfers to several personal accounts.
Court documents also described Cuadra’s falsification of his tax returns during the years in which he defrauded Oceanic and Umami. In particular, Cuadra failed to report his embezzled income on his 2010, 2011, and 2012 federal tax returns. And, in one instance, he wrote off an expense he had paid with embezzled funds as a “partnership loss,” which further reduced his adjusted gross income. In his guilty plea, Cuadra admitted that his false tax returns resulted in a cumulative tax loss of $387,347.58.
United States Attorney Laura E. Duffy praised the hard work of the agents from the Federal Bureau of Investigation and the Internal Revenue Service and reiterated her support of financial-crime prosecutions: "Mr. Cuadra’s brazen theft of corporate funds from one of our local companies was born from base motives – ego and greed. Such crimes shake the foundations of our businesses and cause investors to lose confidence in the markets. Our office will forge ahead with our commitment to investigate and prosecute this sort of fraud wherever it may occur.”
FBI Special Agent in Charge, Daphne Hearn, commented, "This case is about greed and taking advantage of a position of trust. Mr. Cuadra betrayed the trust of the company's investors and then tried to cover it up by falsifying corporate financial records. Today's sentencing should send a clear message that the FBI will continue to work with the U.S. Attorney's Office and our law enforcement partners to protect the American public from insider corporate fraud."
“Jaime Cuadra used his position of trust as the CFO of Oceanic Enterprises and Umami Sustainable Seafood to defraud them of over $1 million and failed to report his embezzled funds to the Internal Revenue Service,” said Joel P. Garland, IRS Criminal Investigation Acting Special Agent in Charge, Los Angeles Field Office. “Cuadra’s crimes caused a tax loss of more than $387,000. As a result, his future includes a period of imprisonment, being branded a convicted felon for the rest of his life, and paying restitution for all the taxes owed (plus penalties and interest). Today's sentencing of Jaime Cuadra emphasizes IRS Criminal Investigation’s aggressive pursuit of those who methodically use their position of trust to commit tax crimes for their own personal benefit."
DEFENDANT Criminal Case No. 13CR2298-H Jaime Cuadra SUMMARY OF CHARGESCount 1: Title 18, United States Code, Section 1343 B Wire Fraud
INVESTIGATING AGENCIES
Count 2: Title 26, United States Code, Section 7206(1) B Filing a False Federal Income Tax ReturnFederal Bureau of Investigation
Internal Revenue ServiceRemoved Alien Sentenced to Time Served for Illegally Re-entering United StatesRead the Press Release
PITTSBURGH – An illegal alien found in Washington, Pennsylvania, has been sentenced in federal court to a sentence of time served on his conviction of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Rigoberto Gonzalez- Pedro, 27, formerly from Mexico, as sole defendant.
According to information presented to the Court, Gonzalez-Pedro, an alien, was removed from the United States by United States Immigration and Customs Enforcement on December 2, 2008. Gonzalez-Pedro was found in Washington, Pennsylvania by the United States Immigration and Customs Enforcement on February 5, 2013.
Assistant United States Attorney Shardul S. Desai prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the U.S. Immigration and Customs Enforcement for the investigation leading to the successful prosecution of Gonzalez-Pedro.
Remaining Five Quarter Horses Allegedly Part of Los Zetas Money Laundering Operation Sold for Approximately $3.1 MillionRead the Press Release
Tempting Dash Sold For Record $1.7 Million
The remaining five quarter horses along with four embryos, part of more than 400 seized by federal authorities in June 2012 in connection with an alleged Los Zetas money laundering operation, have been sold for approximately $3.1 million, including Tempting Dash which sold for a record $1.7 million, announced United States Attorney Robert Pitman and Internal Revenue Service Criminal Investigation Special Agent in Charge Steve McCollough.
The horses, which were sold Friday, November 1, 2013, at Heritage Place Auction Facility in Oklahoma City, OK, included Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas, on October 24, 2009; Mr. Piloto, $1 million All American Futurity winner at Ruidoso Downs on Labor Day, 2010; Do Not Tempt Me, Dashin Follies; and, Separate Fire.
United States Attorney Robert Pitman noted that the proceeds from the sale of the quarter horses, totaling close to $12 million, will be held in escrow pending a final forfeiture action. Court documents allege that the horses were bought by and for members of the Los Zetas drug cartel with proceeds from narcotics trafficking.
“Like all criminal organizations, the Zetas are motivated by money. Identifying and taking their assets is an important way to lay an axe to the root of the tree. The forfeiture of these assets would represent a major step in our efforts to interrupt the cartel’s activity within this country,” stated United States Attorney Pitman. “It's always an added bonus when we are able to make the cartels effectively pay the costs of their own prosecutions.”
“This investigation has helped to disrupt this alleged international drug cartel’s U.S.-based money laundering operations and demonstrates the lengths that US law enforcement will go to deprive criminal organizations of the fruits of their illegal activities,” stated IRS-CI Special Agent in Charge Steve McCullough.
The sale of the horses is being made as a result of a court order in U.S. v. Miguel Angel Trevino Morales, et al. (WDTX case number A12cr210) and in accordance with industry practices.
Ramsey Man Pleads Guilty to Health Care FraudRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on October 31, 2013, William Dale Sidener, 31, of Ramsey, Illinois, pled guilty to a one-count indictment charging that he engaged in a scheme to commit health care fraud. Sentencing has been set for March 7, 2014, in United States District Court in East St. Louis, Illinois. Sidener will face up to 10 years in prison, a fine of up to $250,000, and up to 3 years of supervised release.
During his plea hearing, Sidener admitted that he had submitted false and fraudulent bills in relation to his alleged performance of personal assistant services in the Home Services Program, a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. Sidener admitted to falsely billing the program between November 2012 and February 2013, when he moved away from the person for whom he was supposed to be caring. As a result, Sidener improperly received $4,677.00 in payments for services not performed.
The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General and the Illinois State Police’s Medicaid Fraud Control Bureau. The case is being prosecuted by Assistant United States Attorney William E. Coonan.
If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services, Office of Inspector General, or you may call 800.447.8477.
Pharmacist Sentenced for DistributingMisbranded Drug for Kidney Dialysis PatientsRead the Press Release
TOPEKA, KAN. – A pharmacist has been sentenced to 48 months in federal prison for substituting a cheaper drug imported from China for the iron sucrose that the Federal Drug Administration has approved for kidney dialysis patients, U.S. Attorney Barry Grissom said today. He also was ordered to pay restitution of $848,504 and a $25,000 criminal fine, in addition to forfeiting $425,000 in cash.
Robert Harshbarger, Jr., 53, Kingsport, Tenn., who was doing business as American Inhalation Medication Specialists, Inc., pleaded guilty to one count of distributing a misbranded drug and one count of health care fraud. In his plea, he admitted that as a result of the fraud kidney dialysis patients treated by Kansas Dialysis Services, L.C., received iron sucrose that had not been certified by the FDA to meet quality and safety standards.Although there were no reports of harm to patients, the crime put patients at risk because the FDA cannot assure the safety and effectiveness of products that are not FDA approved and come from unknown sources or foreign locations.
Harshbarger admitted that health care benefit programs paid more than $848,000 for the misbranded iron sucrose he distributed from 2004 to 2009. Harshbarger misrepresented the iron sucrose drug as Venofer, which is the only iron sucrose drug approved by the FDA for both pre-dialysis and post-dialysis patients.
Harshbarger purchased iron sucrose from Chinese companies including Qingdao Shenbang Chemical Company in Qingdao, China, and Shanghai Rory Fine Chemicals Co., Ltd., in Shanghai, China. The iron sucrose from China was cheaper than purchasing Venofer.
Grissom commended the Food and Drug Administration, the Dept. of Health and Human Services, Office of Inspector General, and Assistant U.S. Attorney Tanya Treadway for their work on the case.Orange County Resident Pleads Guilty to Theft of Government Property from the Department of Veterans AffairsRead the Press Release
Served as a Fiduciary for Disabled VeteranGREENSBORO, N.C. –A Rougemont, North Carolina, man pleaded guilty today in federal court to theft of government property, announced United States Attorney Ripley Rand.
BASIL D. HALLIDAY, age 51, pleaded guilty before United States Disrrict Judge Catherine C. Eagles to theft of government property in connection with his role as fiduciary for a relative who was a disabled veteran. A fiduciary is a guardian appointed by the Secretary of the Department of Veterans Affairs to use funds provided by the Department of Veterans Affairs for the benefit of a veteran. Halliday became a fiduciary for the veteran on March 21, 2007. The Indictment in this case indicates that, from June 1, 2007, until on or about July 30, 2010, Halliday stole approximately $44,000.00 in funds provided by the Department of Veterans Affairs solely for the intended benefit of the disabled veteran.
The defendant faces a maximum penalty of ten years confinement. The plea agreement also requires the defendant to make restitution to the Department of Veterans Affairs. Sentencing will occur in Greensboro on February 27, 2014, before Senior United States District Judge N. Carlton Tilley, Jr.
The case was investigated by the Department of Veterans Affairs, Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Robert Hamilton.
Northern California Real Estate Investor Pleads Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Kuo Hsuan “Chuck” Chang, of San Francisco, entered his guilty plea in U.S. District Court for the Northern District of California in San Francisco. Felony charges were filed against Chang on Oct. 9, 2013.
Chang is the 37th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, Chang conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco County, Calif. Chang was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert co-conspirators’ money that would have otherwise gone to mortgage holders and others. Chang is charged with participating in these conspiracies beginning as early as October 2009 and continuing until about November 2010.
“The Antitrust Division will continue to vigorously prosecute anticompetitive schemes that compromise local markets and cause financial harm to consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Collusion at foreclosure auctions harmed both lenders and distressed homeowners in an already struggling real estate market, and the conspirators must be held accountable.”
As described in the charging document, the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“We urge anyone with information regarding fraudulent anticompetitive practices at foreclosure auctions to contact the FBI or our partners at the Antitrust Division,” said FBI San Francisco Special Agent in Charge David J. Johnson. “The FBI will continue to work with our law enforcement partners and the community to root out and bring to justice those individuals who undermine the real estate market and victimize legitimate consumers.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine.
The charges against Chang are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Alameda and Contra Costa counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at 415-553-7400.
This case was brought 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. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed 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.
**The fraud charge(s) referenced in this press release were
subsequently dismissed on the government’s motion.**
Nine Members of Violent Outlaw Motorcycle Gang ArrestedRead the Press Release
Nine members of a violent, armed, outlaw motorcycle gang were indicted and arrested today, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan.
The nine individuals are members of the Phantom Outlaw Motorcycle Club, which is headquartered in northwest Detroit and has chapters throughout Michigan, Ohio, and Kentucky. According to court records, the club and its members are allegedly involved in a range of criminal activity including murder and attempted murder, robbery, narcotics trafficking, the possession and sale of stolen motor vehicles and motorcycles, and witness intimidation.
The indictment charged the following individuals:
• Antonio Johnson, 39, of Detroit, charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, use and carry of firearms during and in relation to a crime of violence, and felon in possession of firearms.
• Marvin Nicholson, 45, of Detroit, charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, use and carry of firearms during and in relation to a crime of violence, assault of federal officers, and felon in possession of firearms.
• Raynard Brown, 37, of Detroit, charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence.
• Christopher Odum, 28, of Detroit, charged with conspiracy to commit murder in aid of racketeering.
• Roger Valdez, 28, of Pontiac, Mich., charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence.
• Brian Sorrell, 27, of Detroit, charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence.
• Brian Jackson, 46, of Detroit, charged with conspiracy to commit murder in aid of racketeering.
Two additional individuals, known at this time only by their club nicknames, have been charged with conspiracy to commit murder in aid of racketeering.
The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The arrests were made as part of the Detroit One Initiative, a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit, and through the lead efforts of the CVRP (Comprehensive Violence Reduction Partnership) Task Force, which consists of representatives of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Detroit Police Department; Michigan State Police; Michigan Department of Corrections; and the FBI. By working collaboratively, local, state, and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit. This indictment is a tangible and significant result of this joint effort.
The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan in Detroit.
New Haven Man Sentenced to More Than Four Years in Federal Prison for Illegal Gun PossessionRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that RUFUS SPEARMAN, 36, of New Haven, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 52 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, during a police pursuit on November 10, 2012, SPEARMAN discarded a loaded .50 caliber semi-automatic pistol underneath the front porch of a residence on Clover Place in New Haven. He was apprehended a short time later and the firearm was recovered. A search of SPEARMAN’s person revealed quantities of marijuana and methylone, also known as “bath salts.”
SPEARMAN’s criminal history includes state felony convictions for sale of hallucinogen/narcotics, possession of a controlled substance with intent to sell, arson and conspiracy to commit arson in the first degree.
SPEARMAN has been detained since his arrest on November 10, 2012. On July 11, 2013, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven Police Department. The case was prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.
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Tom Carson
(203) 821-3722 [email protected]Memphis Man Justin A. Jones Indicted for Filing False Irs FormsRead the Press Release
Memphis, TN – Justin A. Jones, 31, of Memphis, TN was indicted by a federal grand jury last week on charges that he created false Internal Revenue Service (IRS) documents for the purpose of causing the agency to place financial obligations on a third party, announced U.S. Attorney Edward L. Stanton III and Christopher A. Henry, Special Agent in Charge, IRS Nashville Field Office.
# # # #
According to facts revealed in the indictment, Jones corruptly endeavored to obstruct and impede the due administration of Internal Revenue laws by submitting to the Internal Revenue Service fictitious IRS Forms 1099-C (Cancellation of Debt) and 1099-OID (Original Issue Discount), each in the amount of $25,000, along with an IRS Form 1096 (Annual Summary and Transmittal), in order to cause the Internal Revenue Service to place financial obligations on J.W., a prosecutor assigned to prosecute Jones for criminal violations in Germantown, Tennessee, and the City of Germantown, when no relationship existed between Jones and J.W. or the City of Germantown that required the filing of the Form 1099-C or 1099-OID with the IRS. The IRS typically considers cancelled or forgiven debt to be taxable income to the debtor.
If convicted, Jones could receive up to three years in prison and a fine of up to $250,000. There is no parole in the federal system. This case was investigated by IRS Criminal Investigations, the Federal Bureau of Investigation, and the Germantown Police Department. Assistant U.S. Attorney Fred Godwin is representing the government.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Manhattan U.S. Attorney Announces Guilty Plea Agreement with SAC Capital Management CompaniesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today an agreement (the “Agreement”) to resolve insider trading charges against four companies – S.A.C. CAPITAL ADVISORS, L.P. (“SAC Capital LP”), S.A.C. CAPITAL ADVISORS, LLC (“SAC Capital LLC”), CR INTRINSIC INVESTORS, LLC (“CR Intrinsic”), and SIGMA CAPITAL MANAGEMENT, LLC (“Sigma Capital”), collectively (the “SAC Companies”) – that are responsible for the management of a group of affiliated hedge funds, collectively (the “SAC Hedge Fund” or “SAC”).
Under the Agreement, which is subject to Court approval, the SAC Companies will plead guilty to each count in which they are charged of an indictment (the “Indictment”) unsealed in July of this year charging the SAC Companies with securities fraud and wire fraud in connection with a large-scale insider trading scheme. The Agreement imposes a $1.8 billion financial penalty on the SAC Companies – the largest insider trading penalty in history – split between a $900 million fine in the criminal case (the “Criminal Case”), and a $900 million forfeiture judgment in a civil money laundering and forfeiture action (the “Forfeiture Action”) filed by the Government simultaneously with the criminal charges. It also provides that the SAC Companies and their affiliates will no longer accept outside investor funds and will shut down operations as an investment adviser.
The Agreement between the Government and the SAC Companies to plead guilty to all of the charges in the Indictment in which they are charged and resolve the Forfeiture Action is subject to judicial review and approval. The Government submitted the Agreement this morning to U.S. District Judge Laura T. Swain, who is presiding over the Criminal Case, captioned United States v. S.A.C. Capital Advisors, L.P., et al., 13 Cr 541 (LTS), and U.S. District Judge Richard J. Sullivan, who is presiding over the Forfeiture Action, captioned United States v. S.A.C. Capital Advisors, L.P., et al., 13 Civ. 5182 (RJS). The Agreement has no force unless and until it is approved by the district judges.
Manhattan U.S. Attorney Preet Bharara said: “As I said four years ago, at the time of our first major insider trading arrests, greed sometimes is not good. And there are at least 75 convicted insider trading defendants who, today, would likely agree. But individual guilt is not the whole of our mission. Sometimes, blameworthy institutions need to be held accountable too. No institution should rest easy in the belief that it is too big to jail. That is a moral hazard that a just society can ill afford. Today, SAC Capital, one of the world’s largest and most powerful hedge funds, agreed to plead guilty, shut down its outside investment business, and pay the largest fine in history for insider trading offenses. That is the just and appropriate price for the pervasive and unprecedented institutional misconduct that occurred here.”
FBI Assistant Director-in-Charge George Venizelos said: “What SAC Capital’s plea demonstrates is that cheating and breaking the law were not only permitted but allowed to persist. The result is $1.8 billion in fines and forfeiture, the largest penalty in an insider trading case ever, and termination of their investment advisory business. The problem of insider trading is real. For companies that willfully turn a blind eye, be on notice: how your employees make money is just as important as how much they make. The FBI’s investigation into insider trading on Wall Street, on Main Street, in hedge funds, at expert networking firms, and anywhere else, continues.”
As alleged in the Indictment, from 1999 through at least 2010, numerous employees of the SAC Companies obtained and traded on material, non-public information that they were not permitted to have (“Inside Information”), or recommended trades based on such information to SAC Portfolio Managers (“SAC PMs”) or the SAC Owner. Specifically, the Indictment charges the SAC Companies with insider trading offenses committed by numerous employees, occurring over the span of more than a decade, and involving the securities of more than 20 publicly-traded companies across multiple sectors of the economy. As charged in the Indictment, the systematic insider trading engaged in by SAC PMs and Research Analysts was the predictable and foreseeable result of multiple institutional failures. The failures alleged included hiring practices heavily focused on recruiting employees with networks of public company insiders, the failure of SAC management to question employees about trades that appeared to be based on Inside Information, and ineffective compliance measures that failed to prevent or detect such trading, particularly prior to late 2009.
The Complaint in the Forfeiture Action alleges that the SAC Companies engaged in money laundering by commingling the illegal profits from insider trading with other assets, using the profits to promote additional insider trading, and transferring the profits with the assistance of financial institutions.
The Agreement announced today has two component parts: first, a plea agreement to resolve the Criminal Case, and second, a stipulation and proposed order to resolve the civil money laundering and forfeiture claims in the Forfeiture Action. Both documents have been submitted to the district judges for review. If approved, the Agreement would provide for the following:
- The SAC Companies will plead guilty to all counts of the Indictment in which they are charged, which include a securities fraud and wire fraud count for each of the SAC companies.
- The SAC Companies will pay a $1.8 billion financial penalty, consisting of a $900 million fine in the Criminal Case and a $900 million judgment in the Forfeiture Action. Because the SAC Companies have already agreed to pay $616 million to the U.S. Securities & Exchange Commission to resolve related civil insider trading charges, that amount will be credited against today’s penalty, and therefore, the additional payment required under this Agreement will be approximately $1.2 billion. The SAC Companies have further agreed that neither they nor any other person or entity paying any portion of the $1.8 billion financial penalty shall claim any tax deduction or credit for any money paid in resolving the Criminal Case and the Forfeiture Action.
- The SAC Companies will no longer accept third party investor funds and will terminate operations as an investment adviser.
- The SAC Companies will each be sentenced to five-year terms of probation – the maximum allowed by law – with a provision to end probation earlier if the SAC Companies cease operating entirely. The terms of probation will require, among other conditions, that the SAC Companies employ appropriate compliance measures to identify and prevent insider trading. Additionally, the insider trading compliance measures of the SAC Companies and any related entities trading securities will be reviewed by an independent compliance expert who will direct the SAC Companies to correct identified deficiencies.
The Agreement would resolve the criminal charges against the SAC Companies but does not provide any individual with immunity from prosecution. Under the terms of the Agreement, the Government is not prevented from charging any individual with insider trading offenses and seeking the maximum prison term authorized by law for such offenses.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it 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.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Arlo Devlin-Brown, Antonia M. Apps and John T. Zach are in charge of the prosecution, and Assistant U.S. Attorneys Sharon Cohen Levin, Chief of the Asset Forfeiture Unit, Micah Smith and Christine Magdo are responsible for the forfeiture aspects of the case.
The Agreement relates only to the guilt of the SAC Companies and resolves pending charges against only the SAC Companies – it does not include any admissions pertaining to individual defendants. All criminal defendants are presumed innocent unless and until proven guilty.
U.S. v. SAC Capital Advisors LLP, et al. Cover Ltr, Plea Agt, and Stip
Man Sentenced to 70 Months in Prison for Possessing Child PornographyRead the Press Release
David K. Hechler, 28, of Chicago, Illinois, was sentenced Friday, November 1, 2013, in federal court to 70 months in prison for Possession of Child Pornography, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Following his prison sentence, Hechler will be on federal supervised release for 10 years and will also be required to register as a sex offender for the remainder of his life.
Court documents establish that in September 2007, during an undercover investigation conducted by the FBI Innocent Images Unit, agents identified a computer located in the Southern District of Illinois that had been used to attempt to purchase child pornography from the undercover internet website. Further investigation revealed that the computer and IP address used belonged to Hechler, who was a student at Greenville College at the time. During an interview with law enforcement, Hechler admitted to downloading and viewing image and video files containing child pornography on his computer. A forensic examination of Hechler’s computers revealed 262 image files and 3 video files containing child pornography.
This case is part of Project Safe Childhood, a nationwide initiative launched in 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.”
The investigation was conducted by the Federal Bureau of Investigation’s Metro East Cyber Crimes and Analysis Task Force. The case was prosecuted by Assistant United States Attorney Ali Summers.
Los Angeles Businessman Pleads Guilty to Conspiring to Defraud the United States by Concealing Israeli Bank AccountsRead the Press Release
Defendant is Latest in a Series of Defendants Charged with Failing to Report Income from Undeclared Accounts in Israel
David Raminfard of Los Angeles pleaded guilty today in the U.S. District Court for the Central District of California to conspiracy to defraud the United States, the Justice Department and Internal Revenue Service-Criminal Investigation (IRS-CI) announced.
According to court documents, Raminfard, a U.S. citizen, maintained undeclared bank accounts at an international bank headquartered in Tel Aviv, Israel, identified in court documents as Bank A. The accounts were held in the names of nominees in order to keep them secret from the U.S. government. One of the accounts was held in the name of Westrose Limited, a nominee entity formed in the Turks and Caicos Islands. To further ensure that his undeclared accounts remained secret, Raminfard placed a mail hold on his accounts. Rather than having his account statements mailed to him, Raminfard would receive them from an international accounts manager with Bank A in Israel, who brought the statements to Los Angeles and reviewed them with Raminfard during meetings at a hotel.
In or about 2000, Raminfard began secretly using the funds in his undeclared accounts as collateral for back-to-back loans obtained from the Los Angeles branch of Bank A. Raminfard used one of the loans to purchase commercial real estate in Los Angeles. By using back-to-back loans, Raminfard was able to access his funds in Israel without the U.S. Government finding out about his undeclared accounts. These loans also enabled Raminfard to claim the interest paid on the loans as a business expense on his companies’ business tax returns, while not reporting the interest earned in Israel as income on his individual income tax returns filed with the IRS. For tax years 2005 through 2010, Raminfard failed to report approximately $521,000 in income. The highest balance in Raminfard’s undeclared accounts was approximately $3 million.
Raminfard is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with conspiring to defraud the United States in connection with using undeclared bank accounts in Israel to obtain back-to-back loans in the United States.
U.S. citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file a Report of Foreign Bank and Financial Reports (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest or over which they have signature or other authority.
Raminfard faces a potential maximum prison term of five years and a maximum fine of $250,000. In addition, Raminfard has agreed to pay a civil penalty to the IRS in the amount of 50 percent of the high balance of his undeclared accounts for failing to file FBARs.
Assistant Attorney General Kathryn Keneally of the Department’s Tax Division and U.S. Attorney for the Central District of California André Birotte Jr. thanked special agents of IRS-CI, who investigated the cases, Tax Division Senior Litigation Counsel John E. Sullivan and Assistant Chief Elizabeth C. Hadden, who prosecuted the cases, and Assistant U.S. Attorney Sandra A. Brown of the U.S. Attorney’s Office, who assisted with the prosecutions.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax /.
Las Vegas Man Admits to ATM Theft in IdahoRead the Press Release
Plea Resolves Twenty-one ATM Thefts in Six Western States
BOISE — U.S. Attorney Wendy J. Olson announced that Clarence Edward Lancaster, 57, of Las Vegas, Nevada, pleaded guilty in United States District Court today to one count of bank larceny for stealing an ATM from the College of Southern Idaho in Twin Falls, Idaho, on July 22, 2012. In that instance, Lancaster used several tools to force open an ATM owned by First Federal Bank, to steal the cash inside. The plea agreement resolves 21 ATM thefts committed in Idaho, Wyoming, Washington, Utah, Oregon, and Arizona.
Lancaster was apprehended by law enforcement in January 2013 for a burglary on the campus of Eastern Arizona College. In that incident, Lancaster had entered a building in an attempt to steal from an ATM machine, but was observed by a college professor who called campus police. At a subsequent interview conducted by a Boise FBI agent and Eastern Arizona College police officer, Lancaster confessed to a number of similar ATM thefts, including thefts at Idaho State University, in Pocatello, and Boise State University. The FBI identified Lancaster as the perpetrator in other ATM thefts by geographically tracking his banking transactions and matching the dates and locations with ATM theft reports showing similar patterns of conduct. Lancaster also admitted an ATM theft at North Idaho College in Coeur d'Alene.
As part of the plea agreement, Lancaster admitted to 21 separate events of ATM theft from June 2012 through January 2013, in Idaho, Wyoming, Washington, Utah, Oregon and Arizona, for a total loss of $216,178.84 — $124,000 in U.S. currency, $88,366.84 for damages caused to ATM machines, and $3,612 of property damage to the buildings and equipment where the thefts took place. According to the plea agreement, Lancaster admitted to an additional theft of property from the Lied Animal Shelter, in Las Vegas, which he later pawned; unrecovered property loss was $189. The aforementioned figures are preliminary, as victims have the opportunity to submit impact statements for consideration at Lancaster’s sentencing hearing.
The maximum penalty for bank larceny is ten years in prison, a $250,000 fine, and three years of supervised release. As part of the plea agreement, Lancaster agreed to pay restitution of $216,367.84, and agreed to forfeiture of the cash proceeds of his crimes, at least $124,200.
Lancaster is scheduled to be sentenced on January 28, 2014, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Federal Bureau of Investigation, Boise Police Department, Pocatello Police Department, Twin Falls Police Department, Eastern Arizona College Campus Police, and Boise State campus security.
Kansas Man Pleads GuiltyTo Using Credit Card SkimmerRead the Press Release
TOPEKA, KAN. – A Kansas man pleaded guilty Monday to using a device called a credit card skimmer to steal credit card numbers, U.S. Attorney Barry Grissom said.
Yao Vignon Kpade, 32, Overland Park, Kan., pleaded guilty to one count of electronic access device fraud. In his plea, he admitted he was working at a Taco Bell in Belton, Mo., when he used the skimmer to obtain information from customers’ credit cards. He encoded the stolen information onto bank cards issued in his name and used those credit cards to purchase items such as iPads.
He used stolen information to make purchases at the Walmart in Overland Park, Kan.; Ranchmart Wine and Spirits in Leawood, Kan.; Walgreens in Prairie Village, Kan.; Walgreens in Overland Park, Kan.; Hy-Vee in Shawnee, Kan.; and Walmart in Shawnee, Kan. In his plea, he agreed to pay a total of more than $2,465 in restitution to two banks and to forfeit seized property including computers, electronic tablets and cell phones.
Sentencing is set for March 2. He faces a maximum penalty of 15 years in federal prison. Grissom commended the U.S. Secret Service, the Johnson County District Attorney’s Office, the Cass County (Mo.) District Attorney’s Office, the Shawnee Police Department, the Overland Park Police Department, the Leawood Police Department, DHS, Homeland Security Investigations and Assistant U.S. Attorney Tanya Treadway for their work on the case.
Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of North Carolina Reach Settlement with Warren County, North Carolina, Board of Education to Resolve Employment Rights Claim of A North Carolina ArmyRead the Press Release
RALEIGH - The Justice Department and the United States Attorney for the Eastern District of North Carolina announced today a settlement with the Warren County, North Carolina, Board of Education that resolves a lawsuit the Department filed on behalf of North Carolina Army Reserve soldier Dwayne Coffer under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
The settlement, which was filed as a Consent Agreement in the U.S. District Court for the Eastern District of North Carolina, resolves allegations that the Warren County Board of Education willfully violated USERRA by not renewing Coffer’s employment contract in 2008 because of his military service obligations. Coffer, a Sergeant First Class in the United States Army Reserve, worked at Warren County High School as an Assistant Principal. During his employment with the County, Coffer took periodic leave from work to fulfill his military obligations. According to the Justice Department’s complaint, the Board did not renew Coffer’s contract as an Assistant Principal in 2008 because staff members expressed frustration at accommodating his military service during the school year.
USERRA prohibits employers from discriminating against service members with respect to employment opportunities based on their past, current or future uniformed service obligations. USERRA also requires employers to promptly reemploy service members following their return from military leave. Under the terms of the Consent Agreement, the Warren County Board of Education will, among other things, reemploy Coffer under a two-year contract as a Lead Teacher/Site Supervisor at the salary he would have received had he remained continuously employed by the County, pay back-pay to Coffer in the amount of $10,000, and contribute lost retirement payments to Coffer’s retirement account in the amount of $13,702.63.
“USERRA affords military members who leave their civilian careers behind for significant periods of time to serve our country certain protections against unjust terminations,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “It is important that veterans have the opportunity to serve their country free from worry about termination without cause.”United States Attorney Thomas G. Walker stated, “I am pleased we were able to resolve this matter. Improper job terminations over military service cannot be tolerated.”
Additional information about USERRA can be found on the Justice Department websites www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as the Labor Department website www.dol.gov/vets/programs/userra/main.htm.
The Justice Department initiated the lawsuit after Coffer filed a complaint with the Labor Department’s Veterans’ Employment and Training Service, which investigated the matter and determined that the complaint had merit. This case was handled by the Employment Litigation Section of the Civil Rights Division and the United States Attorney’s Office for the Eastern District of North Carolina.Justice Department to Monitor Elections in Michigan, <br /> New York and OhioRead the Press Release
The Justice Department announced today that it will monitor elections on Nov. 5, 2013, in Detroit and Hamtramck, Mich.; Orange County, N.Y.; and Cuyahoga and Lorain Counties, Ohio. The monitoring is designed to ensure compliance with the Voting Rights Act, which prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
In Cuyahoga, Lorain and Orange Counties, the Department will assign federal observers from the U.S. Office of Personnel Management (OPM) to monitor polling place activities based on court orders. The observers will watch and record activities during voting hours at polling locations in these jurisdictions and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Detroit and Hamtramck. Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.
Each year, the department deploys federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/about/vot/ for more information about the Voting Rights Act and other federal voting rights laws.
Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Criminal and Civil InvestigationsRead the Press Release
WASHINGTON - Global health care giant Johnson & Johnson (J&J) and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to the nation’s largest long-term care pharmacy provider. The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion.
“The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” said Attorney General Eric Holder. “This multibillion-dollar resolution demonstrates the Justice Department’s firm commitment to preventing and combating all forms of health care fraud. And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people.”
The resolution includes criminal fines and forfeiture for violations of the law and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries.
“When companies put profit over patients’ health and misuse taxpayer dollars, we demand accountability,” said Associate Attorney General Tony West. “In addition to significant monetary sanctions, we will ensure that non-monetary measures are in place to facilitate change in corporate behavior and help ensure the playing field is level for all market participants.”
In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). This agreement is designed to increase accountability and transparency and prevent future fraud and abuse.
“As patients and consumers, we have a right to rely upon the claims drug companies make about their products,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “And, as taxpayers, we have a right to ensure that federal health care dollars are spent appropriately. That is why this Administration has continued to pursue aggressively – with all of our available law enforcement tools -- those companies that corrupt our health care system.”
J&J Subsidiary Janssen Pleads Guilty to Misbranding Antipsychotic Drug
In a criminal information filed today in the Eastern District of Pennsylvania, the government charged that, from March 3, 2002, through Dec. 31, 2003, Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal into interstate commerce for an unapproved use, rendering the product misbranded. For most of this time period, Risperdal was approved only to treat schizophrenia. The information alleges that Janssen’s sales representatives promoted Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use Risperdal to treat symptoms such as anxiety, agitation, depression, hostility and confusion. The information alleges that the company created written sales aids for use by Janssen’s ElderCare sales force that emphasized symptoms and minimized any mention of the FDA-approved use, treatment of schizophrenia. The company also provided incentives for off-label promotion and intended use by basing sales representatives’ bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses.
In a plea agreement resolving these charges, Janssen admitted that it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated behavioral disturbances exhibited by elderly, non-schizophrenic dementia patients. Under the terms of the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million. Janssen’s guilty plea will not be final until accepted by the U.S. District Court.The Federal Food, Drug, and Cosmetic Act (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 bear true, complete and accurate information. Under the FDCA, a pharmaceutical company must specify the intended uses of a drug in its new drug application to the FDA. Before approval, the FDA must determine that the drug is safe and effective for those specified uses. Once the drug is approved, if the company intends a different use and then introduces the drug into interstate commerce for that new, unapproved use, the drug becomes misbranded. The unapproved use is also known as an “off-label” use because it is not included in the drug’s FDA-approved labeling.
“When pharmaceutical companies interfere with the FDA’s mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk,” said Director of the FDA’s Office of Criminal Investigations John Roth. “Today’s settlement demonstrates the government’s continued focus on pharmaceutical companies that put profits ahead of the public’s health. The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the drug approval process and recklessly promote drugs for uses that have not been proven to be safe and effective.”
J&J and Janssen Settle Civil Allegations of Targeting Vulnerable Patients with the Drugs Risperdal and Invega for Off-Label Uses
In a related civil complaint filed today in the Eastern District of Pennsylvania, the United States alleges that Janssen marketed Risperdal to control the behaviors and conduct of the nation’s most vulnerable patients: elderly nursing home residents, children and individuals with mental disabilities. The government alleges that J&J and Janssen caused false claims to be submitted to federal health care programs by promoting Risperdal for off-label uses that federal health care programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal and paying kickbacks to physicians to prescribe Risperdal.
“J&J’s promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society – children, the elderly and those with developmental disabilities,” said U.S. Attorney for the Eastern District of Pennsylvania Zane Memeger. “This historic settlement sends the message that drug manufacturers who place profits over patient care will face severe criminal and civil penalties.”
In its complaint, the government alleges that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be “misleading.” The FDA cautioned Janssen that behavioral disturbances in elderly dementia patients were not necessarily manifestations of psychotic disorders and might even be “appropriate responses to the deplorable conditions under which some demented patients are housed, thus raising an ethical question regarding the use of an antipsychotic medication for inappropriate behavioral control.”
The complaint further alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the companies downplayed these risks. For example, when a J&J study of Risperdal showed a significant risk of strokes and other adverse events in elderly dementia patients, the complaint alleges that Janssen combined the study data with other studies to make it appear that there was a lower overall risk of adverse events. A year after J&J had received the results of a second study confirming the increased safety risk for elderly patients taking Risperdal, but had not published the data, one physician who worked on the study cautioned Janssen that “[a]t this point, so long after [the study] has been completed … we must be concerned that this gives the strong appearance that Janssen is purposely withholding the findings.”
The complaint also alleges that Janssen knew that patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as “uncompromised by safety concerns (does not cause diabetes).” When Janssen received the initial results of studies indicating that Risperdal posed the same diabetes risk as other antipsychotics, the complaint alleges that the company retained outside consultants to re-analyze the study results and ultimately published articles stating that Risperdal was actually associated with a lower risk of developing diabetes.
The complaint alleges that, despite the FDA warnings and increased health risks, from 1999 through 2005, Janssen aggressively marketed Risperdal to control behavioral disturbances in dementia patients through an “ElderCare sales force” designed to target nursing homes and doctors who treated the elderly. In business plans, Janssen’s goal was to “[m]aximize and grow RISPERDAL’s market leadership in geriatrics and long term care.” The company touted Risperdal as having “proven efficacy” and “an excellent safety and tolerability profile” in geriatric patients.
In addition to promoting Risperdal for elderly dementia patients, from 1999 through 2005, Janssen allegedly promoted the antipsychotic drug for use in children and individuals with mental disabilities. The complaint alleges that J&J and Janssen knew that Risperdal posed certain health risks to children, including the risk of elevated levels of prolactin, a hormone that can stimulate breast development and milk production. Nonetheless, one of Janssen’s Key Base Business Goals was to grow and protect the drug’s market share with child/adolescent patients. Janssen instructed its sales representatives to call on child psychiatrists, as well as mental health facilities that primarily treated children, and to market Risperdal as safe and effective for symptoms of various childhood disorders, such as attention deficit hyperactivity disorder, oppositional defiant disorder, obsessive-compulsive disorder and autism. Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children.
The government’s complaint also contains allegations that Janssen paid speaker fees to doctors to influence them to write prescriptions for Risperdal. Sales representatives allegedly told these doctors that if they wanted to receive payments for speaking, they needed to increase their Risperdal prescriptions.
In addition to allegations relating to Risperdal, today’s settlement also resolves allegations relating to Invega, a newer antipsychotic drug also sold by Janssen. Although Invega was approved only for the treatment of schizophrenia and schizoaffective disorder, the government alleges that, from 2006 through 2009, J&J and Janssen marketed the drug for off-label indications and made false and misleading statements about its safety and efficacy.
As part of the global resolution, J&J and Janssen have agreed to pay a total of $1.391 billion to resolve the false claims allegedly resulting from their off-label marketing and kickbacks for Risperdal and Invega. This total includes $1.273 billion to be paid as part of the resolution announced today, as well as $118 million that J&J and Janssen paid to the state of Texas in March 2012 to resolve similar allegations relating to Risperdal. Because Medicaid is a joint federal-state program, J&J’s conduct caused losses to both the federal and state governments. The additional payment made by J&J as part of today’s settlement will be shared between the federal and state governments, with the federal government recovering $749 million, and the states recovering $524 million. The federal government and Texas each received $59 million from the Texas settlement.
Kickbacks to Nursing Home Pharmacies
The civil settlement also resolves allegations that, in furtherance of their efforts to target elderly dementia patients in nursing homes, J&J and Janssen paid kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients. In a complaint filed in the District of Massachusetts in January 2010, the United States alleged that J&J paid millions of dollars in kickbacks to Omnicare under the guise of market share rebate payments, data-purchase agreements, “grants” and “educational funding.” These kickbacks were intended to induce Omnicare and its hundreds of consultant pharmacists to engage in “active intervention programs” to promote the use of Risperdal and other J&J drugs in nursing homes. Omnicare’s consultant pharmacists regularly reviewed nursing home patients’ medical charts and made recommendations to physicians on what drugs should be prescribed for those patients. Although consultant pharmacists purported to provide “independent” recommendations based on their clinical judgment, J&J viewed the pharmacists as an “extension of [J&J’s] sales force.”
J&J and Janssen have agreed to pay $149 million to resolve the government’s contention that these kickbacks caused Omnicare to submit false claims to federal health care programs. The federal share of this settlement is $132 million, and the five participating states’ total share is $17 million. In 2009, Omnicare paid $98 million to resolve its civil liability for claims that it accepted kickbacks from J&J and Janssen, along with certain other conduct.
“Consultant pharmacists can play an important role in protecting nursing home residents from the use of antipsychotic drugs as chemical restraints,” said U.S. Attorney for the District of Massachusetts Carmen Ortiz. “This settlement is a reminder that the recommendations of consultant pharmacists should be based on their independent clinical judgment and should not be the product of money paid by drug companies.”
Off-Label Promotion of the Heart Failure Drug Natrecor
The civil settlement announced today also resolves allegations that J&J and another of its subsidiaries, Scios Inc., caused false and fraudulent claims to be submitted to federal health care programs for the heart failure drug Natrecor. In August 2001, the FDA approved Natrecor to treat patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity. This approval was based on a study involving hospitalized patients experiencing severe heart failure who received infusions of Natrecor over an average 36-hour period.
In a civil complaint filed in 2009 in the Northern District of California, the government alleged that, shortly after Natrecor was approved, Scios launched an aggressive campaign to market the drug for scheduled, serial outpatient infusions for patients with less severe heart failure – a use not included in the FDA-approved label and not covered by federal health care programs. These infusions generally involved visits to an outpatient clinic or doctor’s office for four- to six-hour infusions one or two times per week for several weeks or months.
The government’s complaint alleged that Scios had no sound scientific evidence supporting the medical necessity of these outpatient infusions and misleadingly used a small pilot study to encourage the serial outpatient use of the drug. Among other things, Scios sponsored an extensive speaker program through which doctors were paid to tout the purported benefits of serial outpatient use of Natrecor. Scios also urged doctors and hospitals to set up outpatient clinics specifically to administer the serial outpatient infusions, in some cases providing funds to defray the costs of setting up the clinics, and supplied providers with extensive resources and support for billing Medicare for the outpatient infusions.
As part of today’s resolution, J&J and Scios have agreed to pay the federal government $184 million to resolve their civil liability for the alleged false claims to federal health care programs resulting from their off-label marketing of Natrecor. In October 2011, Scios pleaded guilty to a misdemeanor FDCA violation and paid a criminal fine of $85 million for introducing Natrecor into interstate commerce for an off-label use.
“This case is an example of a drug company encouraging doctors to use a drug in a way that was unsupported by valid scientific evidence,” said First Assistant U.S. Attorney for the Northern District of California Brian Stretch. “We are committed to ensuring that federal health care programs do not pay for such inappropriate uses, and that pharmaceutical companies market their drugs only for uses that have been proven safe and effective.”
Non-Monetary Provisions of the Global Resolution and Corporate Integrity Agreement
In addition to the criminal and civil resolutions, J&J has executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA includes provisions requiring J&J to implement major changes to the way its pharmaceutical affiliates do business. Among other things, the CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct. J&J may recoup monies from executives who are current employees and from those who have left the company. The CIA also requires J&J’s pharmaceutical businesses to implement and maintain transparency regarding their research practices, publication policies and payments to physicians. On an annual basis, management employees, including senior executives and certain members of J&J’s independent board of directors, must certify compliance with provisions of the CIA. J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.
“OIG will work aggressively with our law enforcement partners to hold companies accountable for marketing and promotion that violate laws intended to protect the public,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. "Our compliance agreement with Johnson & Johnson increases individual accountability for board members, sales representatives, company executives and management. The agreement also contains strong monitoring and reporting provisions to help ensure that the public is protected from future unlawful and potentially harmful off-label marketing."
Coordinated Investigative Effort Spans Federal and State Law Enforcement
This resolution marks the culmination of an extensive, coordinated investigation by federal and state law enforcement partners that is the hallmark of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which fosters government collaborations to fight fraud. Announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius, the HEAT initiative has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.
The criminal cases against Janssen and Scios were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the Northern District of California and the Civil Division’s Consumer Protection Branch. The civil settlements were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania, the Northern District of California and the District of Massachusetts and the Civil Division’s Commercial Litigation Branch. Assistance was provided by the HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division, the FDA’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
This matter was investigated by HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, the Office of Personnel Management’s Office of Inspector General, the Department of Veterans Affairs, the Department of Labor, TRICARE Program Integrity, the U.S. Postal Inspection Service’s Office of the Inspector General and the FBI.
One of the most powerful tools in the fight against Medicare and Medicaid financial fraud is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The department enforces the FDCA by prosecuting those who illegally distribute unapproved, misbranded and adulterated drugs and medical devices in violation of the Act. Since 2009, fines, penalties and forfeitures that have been imposed in connection with such FDCA violations have totaled more than $6 billion.
The civil settlements described above resolve multiple lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. From the federal government’s share of the civil settlements announced today, the whistleblowers in the Eastern District of Pennsylvania will receive $112 million, the whistleblowers in the District of Massachusetts will receive $27.7 million and the whistleblower in the Northern District of California will receive $28 million. Except to the extent that J&J subsidiaries have pleaded guilty or agreed to plead guilty to the criminal charges discussed above, the claims settled by the civil settlements are allegations only, and there has been no determination of liability.
Court documents related to today’s settlement can be viewed online at www.justice.gov/opa/jj-pc-docs.html.Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Fraud and Misbranding AllegationsRead the Press Release
Settlement is largest amount paid over misbranding and unapproved use of single drugPHILADELPHIA – Health care giant Johnson & Johnson (J&J) will pay over $2.2 billion to resolve criminal and civil liability that included the promotion of the atypical anti-psychotic drugs Risperdal and Invega for uses not approved as safe and effective by the Food and Drug Administration (FDA). Of the $2.2 billion, J&J is paying $1.673 billion to resolve allegations of off-label marketing for Risperdal and Invega, as well as the alleged payment of kickbacks to physicians involving Risperdal. The resolution – the largest in U.S. history involving a single drug (Risperdal) and the third-largest health care fraud settlement involving one company – is the result of whistleblower lawsuits filed in the Eastern District of Pennsylvania. It was announced today by the Department of Justice and United States Attorney Zane David Memeger.
Criminal Information: Risperdal was originally approved only to treat the management of the manifestations of psychotic disorders. On March 3, 2002, the approved use was narrowed to treatment of schizophrenia only. According to a criminal information filed today, Janssen Pharmaceuticals, Inc., a J&J subsidiary, introduced Risperdal for a new, unapproved use, rendering the product misbranded. In a plea agreement resolving these charges, Janssen admits that between March 3, 2002, and December 31, 2003, it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated disturbances exhibited by elderly, non-schizophrenic dementia patients. Under the terms of the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million. Janssen has agreed to plead guilty to introducing a misbranded drug into interstate commerce.
Civil Complaint: In its Complaint, the United States alleges that between January 1999 and December 2005, Janssen marketed Risperdal for unapproved uses to control and treat behavioral disturbances and conduct disorders in the nation’s most vulnerable patients: elderly nursing home residents, children, and individuals with mental disabilities. Between 2006 and 2009, the government alleges that Janssen marketed the sale and use of Invega – which was approved to treat schizophrenia – for conditions for which it was not approved. J&J and Janssen caused false claims to be submitted to federal healthcare programs by promoting these drugs for off-label uses that federal healthcare programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal, and paying kickbacks to physicians to prescribe Risperdal. The government’s complaint also contains allegations that Janssen paid speaker fees to doctors to influence them to write more prescriptions for Risperdal. Sales representatives allegedly told the doctors that if they wanted to receive payments for speaking, they needed to increase their Risperdal prescriptions. For this conduct, J&J is paying $1.273 billion in civil penalties. J&J paid $118 million to the State of Texas in March 2012 to resolve similar allegations involving both state and federal dollars, bringing the total civil settlement to $1.391 billion.The Federal Food, Drug and Cosmetic Act (FDCA) requires a pharmaceutical company to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses. A manufacturer’s promotional activities of a drug for a use not approved by the FDA are evidence of its intent to distribute the drug for a new, unapproved use, also known as “misbranding.” In its complaint, the government alleges that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be “misleading.”
“The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” said Attorney General Eric Holder. “This multibillion-dollar resolution demonstrates the Justice Department’s firm commitment to preventing and combating all forms of health care fraud. And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people.”“J&J’s promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society – children, the elderly, and those with developmental disabilities,” said Memeger. “This historic settlement sends the message that drug manufacturers who place profits over patient care will face severe criminal and civil penalties.”
Off-Label Promotion to the Elderly
The civil complaint further alleges that from 1999 through 2005, despite the FDA warnings, Janssen aggressively marketed Risperdal to control behavioral disturbances in dementia patients through an “ElderCare sales force” designed to target nursing homes and doctors who treated the elderly. In business plans, Janssen’s goal was to “[m]aximize and grow RISPERDAL’s market leadership in geriatrics and long term care.” The company touted Risperdal as having “proven efficacy” and “an excellent safety and tolerability profile” in geriatric patients. The complaint further alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the company downplayed these risks. For example, a J&J study showed a significant risk of strokes and other adverse events in elderly dementia patients taking Risperdal. Janssen pooled the study data with other studies resulting in a lower overall risk of adverse events.
Off-Label Promotion to Children
In addition to promoting Risperdal for elderly dementia patients, Janssen allegedly promoted the antipsychotic drug for use in children and individuals with mental disabilities from 1999 through 2005. J&J and Janssen knew that Risperdal posed certain health risks to children, including the risk of elevated levels of prolactin, a hormone that can stimulate breast development and milk production. Nonetheless, one of Janssen’s Key Base Business Goals was to grow and protect share in the child/adolescent market. Janssen instructed its sales representatives to call on child psychiatrists as well as mental health facilities that primarily treated children and to market Risperdal as safe and effective for symptoms of various childhood disorders, such as attention deficit hyperactivity disorder, obsessive-compulsive disorder, oppositional defiant disorder and autism. Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children.
The complaint also alleges that Janssen knew patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as “uncompromised by safety concerns (does not cause diabetes).” When Janssen received the initial results of studies indicating that Risperdal posed the same diabetes risk as other antipsychotics, the company retained outside consultants to re-analyze the study results and ultimately published articles stating that Risperdal was actually associated with a lower risk of developing diabetes.
Non-monetary Provisions and Corporate Integrity Agreement
In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS‑OIG). The agreement is designed to increase accountability and transparency and prevent future fraud and abuse.
The CIA includes provisions requiring J&J to implement major changes to the way its pharmaceutical affiliates do business. Among other things, the CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct. J&J may recoup monies from executives who are current employees and those who have left the company. The CIA also requires J&J’s pharmaceutical businesses to implement and maintain transparency regarding its research practices, publication policies, and payments to physicians. On an annual basis, management employees, including senior executives and certain members of J&J’s independent Board of Directors, must certify compliance with provisions of the CIA. J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.
“OIG will work aggressively with our law enforcement partners to hold companies accountable for marketing and promotion activities that violate laws intended to protect the public,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “Our compliance agreement with Johnson & Johnson increases individual accountability for board members, sales representatives, company executives and management. The agreement also contains strong monitoring and reporting provisions to help ensure that the public is protected from future unlawful and potentially harmful off-label marketing.”
“When pharmaceutical companies interfere with the FDA’s mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk. Today’s settlement demonstrates the government’s continued focus on pharmaceutical companies that put profits ahead of the public’s health,” said John Roth, director of the Food and Drug Administration’s Office of Criminal Investigations. “The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the drug approval process and recklessly promote drugs for uses that have not been proven to be safe and effective.”“Any illegal healthcare scheme to increase profit over the protection of unsuspecting patients is shameful,” said Special Agent-in-Charge Craig W. Rupert, Defense Criminal Investigative Service. “This illegal activity harms patients and negatively affects the delivery of healthcare to more than nine million Department of Defense military members, retirees, and their families. This settlement demonstrates DCIS’s continuing commitment to investigate those who abuse government healthcare programs and who disregard appropriate corporate governance at the expense of patients.”
“Unfortunately, there are those who take advantage of the healthcare system by seeking reimbursement for services and products that they are not entitled to,” said Monica Weyler, Special Agent-in-Charge of the Eastern Area Field Office for U.S. Postal Service Office of Inspector General. “We want to thank our law enforcement partners for their efforts in preventing fraud, waste, and abuse within the Postal Service.”This civil settlement described above resolves four lawsuits pending in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblowers in those cases will share $112 million from the federal share of the settlement amount.
This matter was investigated by the Health and Human Services-Office of Inspector General, the Food and Drug Administration’s Office of Criminal Investigations, the Defense Criminal Investigative Service of the Department of Defense, the Office of the Inspector General for the U.S. Postal Service. Assistance was provided by the National Association of Medicaid Fraud Control Units.
The criminal case is being prosecuted by Assistant U.S. Attorneys Albert Glenn and Scott Cullen; the civil case is being prosecuted by Assistant U.S. Attorneys Charlene Keller Fullmer and Mary Catherine Frye.
Court documents related to the entire global settlement can be viewed online at http://www.justice.gov/opa/jj-pc-docs.html.View the: Civil Complaint | Exhibits | Information
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Criminal and Civil InvestigationsRead the Press Release
WASHINGTON - Global health care giant Johnson & Johnson (J&J) and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to the nation's largest long-term care pharmacy provider. The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion.
"The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust," said Attorney General Eric Holder. "This multibillion-dollar resolution demonstrates the Justice Department's firm commitment to preventing and combating all forms of health care fraud. And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people."
The resolution includes criminal fines and forfeiture for violations of the law and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries.
"When companies put profit over patients' health and misuse taxpayer dollars, we demand accountability," said Associate Attorney General Tony West. "In addition to significant monetary sanctions, we will ensure that non-monetary measures are in place to facilitate change in corporate behavior and help ensure the playing field is level for all market participants."
In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). This agreement is designed to increase accountability and transparency and prevent future fraud and abuse.
"As patients and consumers, we have a right to rely upon the claims drug companies make about their products," said Assistant Attorney General for the Justice Department's Civil Division Stuart F. Delery. "And, as taxpayers, we have a right to ensure that federal health care dollars are spent appropriately. That is why this Administration has continued to pursue aggressively - with all of our available law enforcement tools -- those companies that corrupt our health care system."
J&J Subsidiary Janssen Pleads Guilty to Misbranding Antipsychotic Drug
In a criminal information filed today in the Eastern District of Pennsylvania, the government charged that, from March 3, 2002, through Dec. 31, 2003, Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal into interstate commerce for an unapproved use, rendering the product misbranded. For most of this time period, Risperdal was approved only to treat schizophrenia. The information alleges that Janssen's sales representatives promoted Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use Risperdal to treat symptoms such as anxiety, agitation, depression, hostility and confusion. The information alleges that the company created written sales aids for use by Janssen's ElderCare sales force that emphasized symptoms and minimized any mention of the FDA-approved use, treatment of schizophrenia. The company also provided incentives for off-label promotion and intended use by basing sales representatives' bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses.
In a plea agreement resolving these charges, Janssen admitted that it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated behavioral disturbances exhibited by elderly, non-schizophrenic dementia patients. Under the terms of the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million. Janssen's guilty plea will not be final until accepted by the U.S. District Court.
The Federal Food, Drug, and Cosmetic Act (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 bear true, complete and accurate information. Under the FDCA, a pharmaceutical company must specify the intended uses of a drug in its new drug application to the FDA. Before approval, the FDA must determine that the drug is safe and effective for those specified uses. Once the drug is approved, if the company intends a different use and then introduces the drug into interstate commerce for that new, unapproved use, the drug becomes misbranded. The unapproved use is also known as an "off-label" use because it is not included in the drug's FDA-approved labeling.
"When pharmaceutical companies interfere with the FDA's mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk," said Director of the FDA's Office of Criminal Investigations John Roth. "Today's settlement demonstrates the government's continued focus on pharmaceutical companies that put profits ahead of the public's health. The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the drug approval process and recklessly promote drugs for uses that have not been proven to be safe and effective."
J&J and Janssen Settle Civil Allegations of Targeting Vulnerable Patients with the Drugs Risperdal and Invega for Off-Label Uses
In a related civil complaint filed today in the Eastern District of Pennsylvania, the United States alleges that Janssen marketed Risperdal to control the behaviors and conduct of the nation's most vulnerable patients: elderly nursing home residents, children and individuals with mental disabilities. The government alleges that J&J and Janssen caused false claims to be submitted to federal health care programs by promoting Risperdal for off-label uses that federal health care programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal and paying kickbacks to physicians to prescribe Risperdal.
"J&J's promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society - children, the elderly and those with developmental disabilities," said U.S. Attorney for the Eastern District of Pennsylvania Zane Memeger. "This historic settlement sends the message that drug manufacturers who place profits over patient care will face severe criminal and civil penalties."
In its complaint, the government alleges that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be "misleading." The FDA cautioned Janssen that behavioral disturbances in elderly dementia patients were not necessarily manifestations of psychotic disorders and might even be "appropriate responses to the deplorable conditions under which some demented patients are housed, thus raising an ethical question regarding the use of an antipsychotic medication for inappropriate behavioral control."
The complaint further alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the companies downplayed these risks. For example, when a J&J study of Risperdal showed a significant risk of strokes and other adverse events in elderly dementia patients, the complaint alleges that Janssen combined the study data with other studies to make it appear that there was a lower overall risk of adverse events. A year after J&J had received the results of a second study confirming the increased safety risk for elderly patients taking Risperdal, but had not published the data, one physician who worked on the study cautioned Janssen that "[a]t this point, so long after [the study] has been completed . we must be concerned that this gives the strong appearance that Janssen is purposely withholding the findings."
The complaint also alleges that Janssen knew that patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as "uncompromised by safety concerns (does not cause diabetes)." When Janssen received the initial results of studies indicating that Risperdal posed the same diabetes risk as other antipsychotics, the complaint alleges that the company retained outside consultants to re-analyze the study results and ultimately published articles stating that Risperdal was actually associated with a lower risk of developing diabetes.
The complaint alleges that, despite the FDA warnings and increased health risks, from 1999 through 2005, Janssen aggressively marketed Risperdal to control behavioral disturbances in dementia patients through an "ElderCare sales force" designed to target nursing homes and doctors who treated the elderly. In business plans, Janssen's goal was to "[m]aximize and grow RISPERDAL's market leadership in geriatrics and long term care." The company touted Risperdal as having "proven efficacy" and "an excellent safety and tolerability profile" in geriatric patients.
In addition to promoting Risperdal for elderly dementia patients, from 1999 through 2005, Janssen allegedly promoted the antipsychotic drug for use in children and individuals with mental disabilities. The complaint alleges that J&J and Janssen knew that Risperdal posed certain health risks to children, including the risk of elevated levels of prolactin, a hormone that can stimulate breast development and milk production. Nonetheless, one of Janssen's Key Base Business Goals was to grow and protect the drug's market share with child/adolescent patients. Janssen instructed its sales representatives to call on child psychiatrists, as well as mental health facilities that primarily treated children, and to market Risperdal as safe and effective for symptoms of various childhood disorders, such as attention deficit hyperactivity disorder, oppositional defiant disorder, obsessive-compulsive disorder and autism. Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children.
The government's complaint also contains allegations that Janssen paid speaker fees to doctors to influence them to write prescriptions for Risperdal. Sales representatives allegedly told these doctors that if they wanted to receive payments for speaking, they needed to increase their Risperdal prescriptions.
In addition to allegations relating to Risperdal, today's settlement also resolves allegations relating to Invega, a newer antipsychotic drug also sold by Janssen. Although Invega was approved only for the treatment of schizophrenia and schizoaffective disorder, the government alleges that, from 2006 through 2009, J&J and Janssen marketed the drug for off-label indications and made false and misleading statements about its safety and efficacy.
As part of the global resolution, J&J and Janssen have agreed to pay a total of $1.391 billion to resolve the false claims allegedly resulting from their off-label marketing and kickbacks for Risperdal and Invega. This total includes $1.273 billion to be paid as part of the resolution announced today, as well as $118 million that J&J and Janssen paid to the state of Texas in March 2012 to resolve similar allegations relating to Risperdal. Because Medicaid is a joint federal-state program, J&J's conduct caused losses to both the federal and state governments. The additional payment made by J&J as part of today's settlement will be shared between the federal and state governments, with the federal government recovering $749 million, and the states recovering $524 million. The federal government and Texas each received $59 million from the Texas settlement.
Kickbacks to Nursing Home Pharmacies
The civil settlement also resolves allegations that, in furtherance of their efforts to target elderly dementia patients in nursing homes, J&J and Janssen paid kickbacks to Omnicare Inc., the nation's largest pharmacy specializing in dispensing drugs to nursing home patients. In a complaint filed in the District of Massachusetts in January 2010, the United States alleged that J&J paid millions of dollars in kickbacks to Omnicare under the guise of market share rebate payments, data-purchase agreements, "grants" and "educational funding." These kickbacks were intended to induce Omnicare and its hundreds of consultant pharmacists to engage in "active intervention programs" to promote the use of Risperdal and other J&J drugs in nursing homes. Omnicare's consultant pharmacists regularly reviewed nursing home patients' medical charts and made recommendations to physicians on what drugs should be prescribed for those patients. Although consultant pharmacists purported to provide "independent" recommendations based on their clinical judgment, J&J viewed the pharmacists as an "extension of [J&J's] sales force."
J&J and Janssen have agreed to pay $149 million to resolve the government's contention that these kickbacks caused Omnicare to submit false claims to federal health care programs. The federal share of this settlement is $132 million, and the five participating states' total share is $17 million. In 2009, Omnicare paid $98 million to resolve its civil liability for claims that it accepted kickbacks from J&J and Janssen, along with certain other conduct.
"Consultant pharmacists can play an important role in protecting nursing home residents from the use of antipsychotic drugs as chemical restraints," said U.S. Attorney for the District of Massachusetts Carmen Ortiz. "This settlement is a reminder that the recommendations of consultant pharmacists should be based on their independent clinical judgment and should not be the product of money paid by drug companies."
Off-Label Promotion of the Heart Failure Drug Natrecor
The civil settlement announced today also resolves allegations that J&J and another of its subsidiaries, Scios Inc., caused false and fraudulent claims to be submitted to federal health care programs for the heart failure drug Natrecor. In August 2001, the FDA approved Natrecor to treat patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity. This approval was based on a study involving hospitalized patients experiencing severe heart failure who received infusions of Natrecor over an average 36-hour period.
In a civil complaint filed in 2009 in the Northern District of California, the government alleged that, shortly after Natrecor was approved, Scios launched an aggressive campaign to market the drug for scheduled, serial outpatient infusions for patients with less severe heart failure - a use not included in the FDA-approved label and not covered by federal health care programs. These infusions generally involved visits to an outpatient clinic or doctor's office for four- to six-hour infusions one or two times per week for several weeks or months.
The government's complaint alleged that Scios had no sound scientific evidence supporting the medical necessity of these outpatient infusions and misleadingly used a small pilot study to encourage the serial outpatient use of the drug. Among other things, Scios sponsored an extensive speaker program through which doctors were paid to tout the purported benefits of serial outpatient use of Natrecor. Scios also urged doctors and hospitals to set up outpatient clinics specifically to administer the serial outpatient infusions, in some cases providing funds to defray the costs of setting up the clinics, and supplied providers with extensive resources and support for billing Medicare for the outpatient infusions.
As part of today's resolution, J&J and Scios have agreed to pay the federal government $184 million to resolve their civil liability for the alleged false claims to federal health care programs resulting from their off-label marketing of Natrecor. In October 2011, Scios pleaded guilty to a misdemeanor FDCA violation and paid a criminal fine of $85 million for introducing Natrecor into interstate commerce for an off-label use.
"This case is an example of a drug company encouraging doctors to use a drug in a way that was unsupported by valid scientific evidence," said First Assistant U.S. Attorney for the Northern District of California Brian Stretch. "We are committed to ensuring that federal health care programs do not pay for such inappropriate uses, and that pharmaceutical companies market their drugs only for uses that have been proven safe and effective."
Non-Monetary Provisions of the Global Resolution and Corporate Integrity Agreement
In addition to the criminal and civil resolutions, J&J has executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA includes provisions requiring J&J to implement major changes to the way its pharmaceutical affiliates do business. Among other things, the CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct. J&J may recoup monies from executives who are current employees and from those who have left the company. The CIA also requires J&J's pharmaceutical businesses to implement and maintain transparency regarding their research practices, publication policies and payments to physicians. On an annual basis, management employees, including senior executives and certain members of J&J's independent board of directors, must certify compliance with provisions of the CIA. J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.
"OIG will work aggressively with our law enforcement partners to hold companies accountable for marketing and promotion that violate laws intended to protect the public," said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. "Our compliance agreement with Johnson & Johnson increases individual accountability for board members, sales representatives, company executives and management. The agreement also contains strong monitoring and reporting provisions to help ensure that the public is protected from future unlawful and potentially harmful off-label marketing."
Coordinated Investigative Effort Spans Federal and State Law Enforcement
This resolution marks the culmination of an extensive, coordinated investigation by federal and state law enforcement partners that is the hallmark of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which fosters government collaborations to fight fraud. Announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius, the HEAT initiative has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.
The criminal cases against Janssen and Scios were handled by the U.S. Attorney's Offices for the Eastern District of Pennsylvania and the Northern District of California and the Civil Division's Consumer Protection Branch. The civil settlements were handled by the U.S. Attorney's Offices for the Eastern District of Pennsylvania, the Northern District of California and the District of Massachusetts and the Civil Division's Commercial Litigation Branch. Assistance was provided by the HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division, the FDA's Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
This matter was investigated by HHS-OIG, the Department of Defense's Defense Criminal Investigative Service, the FDA's Office of Criminal Investigations, the Office of Personnel Management's Office of Inspector General, the Department of Veterans Affairs, the Department of Labor, TRICARE Program Integrity, the U.S. Postal Inspection Service's Office of the Inspector General and the FBI.
One of the most powerful tools in the fight against Medicare and Medicaid financial fraud is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The department enforces the FDCA by prosecuting those who illegally distribute unapproved, misbranded and adulterated drugs and medical devices in violation of the Act. Since 2009, fines, penalties and forfeitures that have been imposed in connection with such FDCA violations have totaled more than $6 billion.
The civil settlements described above resolve multiple lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. From the federal government's share of the civil settlements announced today, the whistleblowers in the Eastern District of Pennsylvania will receive $112 million, the whistleblowers in the District of Massachusetts will receive $27.7 million and the whistleblower in the Northern District of California will receive $28 million. Except to the extent that J&J subsidiaries have pleaded guilty or agreed to plead guilty to the criminal charges discussed above, the claims settled by the civil settlements are allegations only, and there has been no determination of liability.
Jacksonville Sex Offender Indicted on Federal Charges of Possession of Child PornographyRead the Press Release
Jacksonville, Florida – Acting United States Attorney A. Lee Bentley, III announces that a federal grand jury in Jacksonville has returned an indictment charging William Roland Baker (62, Jacksonville) with two counts of possessing child pornography. If convicted, he faces a mandatory minimum penalty of not less than 10 years, up to a maximum penalty of 20 years in federal prison and a potential life term of supervised release for each count. Baker was arrested in Jacksonville on November 4, 2013 and made his initial appearance in federal court earlier today. His arraignment is scheduled for November 7, 2013, at 2:30 p.m., before U.S. Magistrate James R. Klindt.
The indictment alleges that on or about May 29, 2013, Baker was found to be in possession of visual images depicting minors engaged in sexually explicit conduct.
According to court documents, Baker is a registered sex offender who was previously convicted of lewd and lascivious conduct with a child under the age of 16 on November 22, 1995.
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 Florida Department of Law Enforcement and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Hotchkiss Man Sentenced for Theft of Detective's Assault Rifle and Tactical GearRead the Press Release
Detective was in Denver receiving cancer treatment at time of crime
DENVER -- Keaton Bell, age 25, of Hotchkiss, Colorado, was sentenced today in U.S. District Court in Grand Junction by Senior U.S. District Court Judge John L. Kane to serve 5 years’ probation, with the first 12 months in community corrections for possession of stolen firearms and ammunition, and possession of machine gun, the United States Attorney’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Eagle County Sheriff’s Office announced. Bell was also ordered to serve 100 hours of community service. Bell, who appeared at the sentencing hearing in custody, will be released today and will surrender to the community corrections facility when there is an opening.
Bell was indicted by a federal grand jury in Denver on February 4, 2013. He pled guilty before Senior Judge Kane on May 30, 2013. He was sentenced today, November 4, 2013.
According to court documents, including the stipulated facts contained in the plea agreement, in October 2012, an Eagle County Sheriff’s Office detective and SWAT team member was in Denver undergoing cancer treatment. He lived in Gypsum, Colorado, with his girlfriend, who visited him periodically in Denver during his cancer treatment. The detective’s girlfriend gave her girlfriend permission to stay at the detective’s Gypsum home while the two were in Denver for the cancer treatment. The person staying at the home invited her boyfriend, Keaton Bell, to stay with her in Gypsum.
While Bell and his girlfriend were at the home between October 5 through October 7, 2012, they got into a fight. Bell eventually left, taking the detective’s SWAT equipment, including a machine gun, a hand gun, ammunition and tactical gear, which had been stored in the basement of the home. Some of the equipment and weapons were owned by Eagle County.
At the time the crime was reported, Bell was reportedly in Alberta, Canada, working for a mining company. Officers went to Bell’s home in Hotchkiss, Colorado on November 2, 2012, and were unable to reach anyone. Investigators continued to locate Bell when he responded via text about his location. He then called the officers when he became available. Officers asked for permission to search Bell’s pickup. He granted them permission as along as a family member was present. During the search officers found, among other things, a leg holster for a taser that the Special Operations Unit of the Sheriff’s Office, to which Hall was assigned, uses. Hall confirmed the leg holster was his. Officers then issued a state warrant for Bell’s arrest.
On November 20, 2012, Bell was reported as a suspicious person at a Wal-Mart in Glenwood Springs, Colorado, and police were called. The Glenwood Springs Police Department arrested Bell on the Eagle County arrest warrant. Investigators confirmed that Bell stole from Hall a Colt rifle, a Glock, a .380 pistol, magazines, and a suppressor for the rifle. They also found out that once Bell returned from Canada he then put the stolen items into his truck.
The Eagle County Sheriff’s Office obtained a state search warrant for the truck, and found a camouflage-colored rifle case under the driver’s side rear wheel well which contained the following items stolen from Hall’s home: a Colt M4 Commando .223 Fully Automatic Rifle, an EOTech Sight System, a Surefire Light System, a GemTech Halo Suppressor, a Glock 9mm model 26 semi-automatic pistol, and two .223 magazines. They also found the Bersa .380 with holster under the hood and in the engine compartment of the vehicle.
The Colt rifle is imprinted with information that the weapon is fully automatic. Further, the firearm was clean when it was stolen and dirty when recovered, evidencing that it had been fired.
The Eagle County detective who was the victim of this crime has since passed away from complications related to his cancer.
“The defendant stole special equipment designed solely for the use of law enforcement,” said U.S. Attorney John Walsh. “In the wrong hands, that equipment can be used for serious wrong-doing. Thanks to the hard work of the Eagle County Sheriff and the ATF, they were able to identify and arrest the person responsible for the theft. I would also like to give my condolences to the detective’s family and the Eagle County Sheriff’s Office, as I understand he recently passed away – Eagle County has lost a tremendous law enforcement officer.”
“Detectives from the Eagle County Sheriff’s Office worked long and hard putting together the case against Keaton Bell. This included searches of vehicles and structures in other counties of Colorado,” said Eagle County Sheriff Joseph Hoy. “We appreciate the assistance of local, state, and federal law enforcement agencies during this investigation. All Sheriff’s Office and Detective Kyle Hall’s personal weapons were recovered from Bell. Unfortunately, Detective Hall passed away on October 25th from complications of his cancer. He did not get a chance to see Mr. Bell be sentenced for his crimes.”
This case was investigated by the Eagle County Sheriff’s Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Federal Bureau of Investigation (FBI).
The defendant was prosecuted by Assistant U.S. Attorney Michelle Heldmyer.
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Hogsett Announces Sentencing of Five for Roles in New York-based Credit Card Fraud RingRead the Press Release
INDIANAPOLIS – Joseph H. Hogsett, the United States Attorney, announced today that five individuals were sentenced today by U.S. District Court Judge Tanya Walton Pratt after being convicted of possessing hundreds of counterfeit credit cards as part of a credit card fraud scheme allegedly based in New York. This follows a collaborative investigation by the United States Secret Service and the Clarksville Police Department.
“The threat of identity theft is real, and it is growing,” Hogsett said. “That is why we have teamed up with the Secret Service and our local law enforcement partners to send the message that if you engage in this activity, you will be caught and face serious time behind bars.”
The five defendants sentenced Friday, November 1st, were all residents of New York. Judge Pratt imposed the following terms of imprisonment for each defendant:
Amanda Adam, age 21 – Sentenced to 24 months (2 years)
Trevor Hinds, age 45 – Sentenced to 30 months (2 years, 6 months)
Blandine Joseph, age 37 – Sentenced to 30 months (2 years, 6 months)
Tycia Peterson, age 27 – Sentenced 39 months (3 years, 3 months)
Paul Roberson, age 33 – Sentenced to 41 months (3 years 5 months)The defendants all entered guilty pleas immediately before their sentencing hearings. In doing so, they admitted that on April 3, 2013, Roberson, Peterson, and Adam entered the Sam’s Club in Clarksville and attempted to use fraudulent credit cards to make purchases. Those transactions were declined, and raised the suspicions of the store’s security team, who alerted local law enforcement.
The three defendants then left the Sam’s Club, and store security observed them meet with defendants Hinds and Joseph in the parking lot. All five defendants left the parking lot and were followed to a nearby Red Lobster restaurant. Officers from the Clarksville Police Department were advised of their location and entered the restaurant, asking the defendants to exit for questioning.
A search of their vehicle revealed more than 300 counterfeit credit cards made out in the names of all five defendants. The vehicle was rented by Hinds in New York on March 26, 2013. Law enforcement officers also located counterfeit credit cards that had been hidden in the men’s and women’s restrooms inside the Red Lobster.
According to Assistant U.S. Attorney Todd S. Shellenbarger, who prosecuted the case for the government, Judge Pratt also ordered each defendant to pay restitution in the amount of $29,818 and imposed supervised release of three years following their terms of imprisonment.
Gettysburg Attorney Charged Federally with Defrauding Clients of over $3 MillionRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced the filing of an Information in U.S. District Court in Harrisburg today charging Wendy Weikal-Beauchat, age 46, of Gettysburg, Pennsylvania, with wire fraud and money laundering.
According to United States Attorney Peter J. Smith, Beauchat is charged with defrauding eight clients of more than $3,000,000 during the period from 2007 through 2013. Beauchat, an attorney, was a member of a law firm located in Gettysburg until February 2012. According to the law firm website, Beauchat’s area of concentration was estate planning and long-term care planning.
Beauchat allegedly misappropriated client funds to pay for her business and personal expenses.
It is charged that she concealed her fraudulent actions by providing clients with bogus Certificates of Deposit and IRS 1099 Interest Forms. The investigation is continuing in an effort to identify other clients who may have been victimized in Beauchat’s scheme.
The investigation is being conducted by Internal Revenue Service, Criminal Investigations and the FBI.
"The IRS enforces the nation's tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others,” said Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. With both law enforcement and financial investigation expertise, our agents are uniquely qualified to assist with these types of cases by following the money. IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture and help put a stop to this and other types of white collar crime."
“When a lawyer, an officer of the court, defrauds clients, it’s a serious crime – and a heinous breach of trust,” said FBI Special Agent in Charge Edward J. Hanko. “The FBI is committed to investigating financial schemes at every level, and working with our partners to hold white-collar crooks accountable.”
The case is being prosecuted by Assistant U.S. Attorney Joseph J. Terz and Special Assistant U.S. Attorney Brian Sinnett, from the Adams County District Attorney’s Office.
The U.S. Attorney’s Office also filed a plea agreement which must be approved by the District Court.
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 30 years’ imprisonment, a term of supervised release following imprisonment, a forfeiture 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.
Former Umatilla Tribal Police Officer Sentenced in Federal CourtRead the Press Release
Fermore Craig, Jr., had previously pled guilty to Abusive Sexual Contact and Making False Statements to the FBIPORTLAND, Ore. – Fermore Joseph Craig, Jr., 44, of Pendleton, Oregon, was sentenced today to 30 months in federal prison by U.S. District Judge Michael W. Mosman. In August, Craig pled guilty to one count of abusive sexual contact and one count of making false statements to the FBI. Following today’s sentencing hearing, Craig turned himself in to the U.S. Marshals service to begin serving his prison term.
After Craig has completed his 30 months in prison, he was ordered to serve five years of federal supervised release. While on supervised release, Craig will be required to participate in a sex offender assessment and treatment program, and he will be prohibited from having any contact with the victim in the case. Craig’s conviction for abusive sexual contact will also require him to register as a sex offender.
“The victim in this case showed tremendous courage by speaking out against the police officer who sexually abused her,” stated U.S. Attorney Amanda Marshall. “Fortunately, Mr. Craig is no longer in law enforcement and is now in prison.”
According to the prosecutor’s statements in court, on May 11, 2013, on the Umatilla Indian Reservation, Craig touched the intimate parts of an adult female. Craig admitted that he intentionally touched the victim’s intimate parts to arouse and gratify his own sexual desire, and he did so without the victim’s permission.
When the victim subsequently disclosed the sexual abuse, the FBI and Oregon State Police initiated an investigation and interviewed Craig. On May 13, 2013, during an interview with an FBI special agent and an Oregon State Police trooper, Craig made false statements to the investigators by lying about the sexual contact he had with the victim.
Craig had been employed as a Umatilla Tribal Police Officer for approximately 15 years, but he was not on duty as a police officer at the time the sexual abuse occurred. After the abuse was reported by the victim, Craig was immediately placed on administrative leave. Craig ultimately resigned from the Umatilla Tribal Police Department in June, while the investigation was ongoing. At today’s sentencing hearing, Craig relinquished his certification from the Oregon Department of Public Safety Standards and Training, thereby terminating his right to be a police officer in the State of Oregon.
The case was investigated by the FBI’s Pendleton office and the Oregon State Police. Assistant U.S. Attorney Craig Gabriel prosecuted the case.
Former Taylor County, Kentucky Deputy Sheriff Charged with Distribution of Anabolic SteroidsRead the Press Release
– Wore Taylor County Sheriff’s Department uniform and drove law enforcement vehicle during alleged distribution
BOWLING GREEN, Ky. – A former Taylor County, Kentucky deputy sheriff charged with distribution of anabolic steroids, waived his formal appearance in United States District Court in Bowling Green Friday, and a trial date was scheduled for December 16, 2013, announced David J. Hale United States Attorney for the Western District of Kentucky.
William Allen Rice, age 38, of Campbellsville, was charged in a criminal complaint on October 1, 2013 and subsequently charged by federal grand jury indictment on October 16, 2013.
According to the three-count federal indictment, on three separate occasions, between May 17, 2013, and August 10, 2013, in Taylor County, Kentucky, defendant Rice was recorded allegedly distributing Schedule III controlled substances including Boldenone Undecylenate, Nandrolone Decanoate and Testosterone Enanthate. Further, the Affidavit attached to the Criminal Complaint alleges that defendant Rice was observed driving his assigned Taylor County Sheriff’s Office vehicle to prearranged meeting locations and wore his Taylor County Sheriff’s Office uniform and a pistol on his hip during one transaction with a confidential human source.
If convicted of the charges, Rice faces no more than 30 years in prison, a fine of no more than $1,500,000 and no less than two years of supervised release. The trial was scheduled before Chief Judge Joseph H. McKinley Jr.
This case is being prosecuted by Assistant United States Attorney Amanda E. Gregory and is being investigated by the Federal Bureau of Investigation (FBI).
The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.
Former Holocaust Claims Conference Director Sentenced to Eight Years in Prison for $57.3 Million Fraud on Organization That Makes Reparations to Victims of Nazi PersecutionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that SEMEN DOMNITSER was sentenced today in Manhattan federal court to eight years in prison for his participation in a $57 million fraud scheme that targeted programs administered by the Conference on Jewish Material Claims Against Germany, Inc. (the “Claims Conference”), and that were established to aid the survivors of Nazi persecution. DOMNITSER, a former employee of the Claims Conference who served as the Director of the relevant programs from 1999 to 2010, was convicted on May 8, 2013 of one count of conspiracy to commit mail fraud and one count of mail fraud, following a four-week trial. He was sentenced today by U.S. District Judge Thomas P. Griesa.
Manhattan U.S. Attorney Preet Bharara said: “As the highest ranking insider to participate in this despicable fraud against the Holocaust Claims Conference, Mr. Domnitser played an integral role in the scheme by processing fraudulent applications to the Conference and turning a profit of thousands of dollars for himself. With today’s sentence, he will be held to account for victimizing Holocaust survivors by diverting funds meant to help them to his own pocket and contributing to this $57 million scheme.”
According to the Superseding Indictment, other documents filed in Manhattan federal court, the evidence presented at trial, and statements made during court proceedings:
The Claims Conference, a not-for-profit organization that provides assistance to victims of Nazi persecution, supervises and administers several funds that make reparation payments to victims of the Nazis, including “the Hardship Fund” and “the Article 2 Fund,” both of which are funded by the German government. Applications for disbursements through these funds are processed by employees of the Claims Conference’s office in Manhattan, New York, and the employees are supposed to confirm that the applicants meet the specific criteria for payments under the funds.
As part of the charged scheme, a network of individuals systematically defrauded the Article 2 Fund and Hardship Fund programs for over a decade. The Claims Conference first suspected the fraud in November 2009, and immediately reported their suspicions to law enforcement, which conducted a wide-reaching investigation.
The Hardship Fund pays a one-time payment of approximately $3,500 to victims of Nazi persecution who evacuated the cities in which they lived and were forced to become refugees. Members of the conspiracy submitted fraudulent applications for people who were not eligible. Many of the recipients of fraudulent funds were born after World War II, and at least one person was not even Jewish. Some members of the conspiracy recruited other individuals to provide identification documents, such as passports and birth certificates, which were then fraudulently altered and submitted to corrupt insiders at the Claims Conference, who then processed those applications. When the applicants received their compensation checks, they kept a portion of the money and passed the rest back up the chain, to their recruiters and others involved in the scheme.
From the investigation to date, the Claims Conference has determined that at least 3,839 Hardship Fund applications appear to be fraudulent. These applications resulted in a loss to the Hardship Fund of approximately $12.3 million.
The Article 2 Fund makes monthly payments of approximately $400 to survivors of Nazi persecution who make less than $16,000 per year, and either lived in hiding or under a false identity for at least 18 months; lived in a Jewish ghetto for 18 months; or were incarcerated for six months in a concentration camp or a forced labor camp. The fraud involved doctored identification documents in which the applicant’s date and place of birth had been changed. The fraud also involved more sophisticated deception, including altering documents that the Claims Conference obtained from outside sources to verify a person’s persecution by the Nazis. Some of the detailed descriptions of persecution in the fraudulent Article 2 Fund applications were completely fabricated.
From the investigation to date, the Claims Conference has determined that at least 1,112 Article 2 Fund cases it processed have been determined to be fraudulent. Those cases have resulted in a loss to the Claims Conference of approximately $45 million.
DOMNITSER was an Article 2 Fund caseworker from 1994 until 1999, and as a caseworker, helped process fraudulent applications. In 1999, DOMNITSER became the Director of both the Article 2 Fund and the Hardship Fund, and continued to serve in that role until his termination in February 2010. As Director, DOMNITSER approved fraudulent applications and received thousands of dollars in payments – typically in the form of money orders – from applicants who had received money from the funds to which they were not entitled.
In addition to his prison term, DOMNITSER, 55, of Brooklyn, New York, was sentenced to three years of supervised release. He was also ordered to forfeit $59,230 and pay restitution in the amount of $57.3 million.
Since 2010, a total of 31 individuals have been charged with participating in the scheme to defraud the Article 2 Fund and Hardship Fund programs. Twenty-eight defendants pled guilty and three—DOMNITSER, Luba Kramrish, and Oksana Romalis—were convicted after trial. Kramrish was sentenced by Judge Griesa on September 20, 2013, to 37 months in prison, and Romalis is scheduled to be sentenced before Judge Griesa on November 26, 2013, at 11:00 a.m.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation (“FBI”). He also thanked the Claims Conference for bringing this matter to the FBI’s attention and for its continued cooperation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Christopher D. Frey and Special Assistant U.S. Attorney Rebecca Rohr are in charge of the prosecution.
Former Corrections Officers Sentenced for Federal Civil Rights Offenses and Obstruction of Justice for Beating Death of an Inmate at Ventress Correctional Facility in AlabamaRead the Press Release
The Justice Department announced today that U.S. District Court Judge Myron H. Thompson sentenced four former corrections officers of the Alabama Department of Corrections – Michael Smith, Matthew Davidson, Joseph Sanders and Scottie Glenn – in connection with the beating death of former inmate Rocrast Mack. Smith, 39, who was convicted by a federal jury on June 25, 2013, of seven counts of civil rights violations and obstruction of justice, was sentenced to 30 years imprisonment. Davidson, 45, who pled guilty to two civil rights violations and an obstruction of justice violation, was sentenced to seven years. Sanders, 32, who pled guilty to an obstruction of justice violation, was sentenced to five years. Glenn, 30, who pled guilty to a civil rights violation and a conspiracy violation, was sentenced to five years.
The incident occurred at Ventress Correctional Facility in Clayton, Ala., on Aug. 4, 2010, and at the time of the incident Smith was a lieutenant with supervisory authority over other officers on his shift. According to the evidence presented at trial, Smith assaulted Mack in an office in the prison, repeatedly striking him with a baton, stomping on him and kicking him. The evidence also showed that Smith assaulted Mack again several minutes later in the medical unit by repeatedly stomping on Mack’s head. Mack died the following morning in a Montgomery, Ala., hospital.
“These defendants each played a role in the vicious and fatal beating of Mr. Mack, and then they lied to authorities to conceal their culpability,” said Acting Assistant Attorney General for the Department’s Civil Rights Division Jocelyn Samuels. “Their actions run completely counter to the responsibilities and trust given to law enforcement officers. The Justice Department will continue to vigorously prosecute those officers who commit such heinous criminal acts, and I hope that these sentencings help bring some measure of closure to the Mack family.”
“The majority of our corrections officers are dedicated to protecting and serving the public,” said U.S. Attorney for the Middle District of Alabama George L. Beck Jr. “These correctional officers were not so dedicated. These correctional officers savagely beat, stomped, and tortured a restrained man and then lied to protect themselves. There is no excuse for such behavior. Correctional officers walk a tough line, but they cannot cross that line into the criminal element. I hope that these sentences bring some sense of justice to the victim’s family and reinforce the notion that no one is above the law.”
This case was investigated by the Mobile, Ala., Division of the FBI in partnership with the Alabama Bureau of Investigation, and was prosecuted by Trial Attorney Patricia Sumner of the department’s Civil Rights Division and Assistant U.S. Attorney Jerusha Adams of the U.S. Attorney’s Office for the Middle District of Alabama.
Former Corrections Officers Sentenced for Federal Civil Rights Offenses and Obstruction of Justice for Beating Death of an Inmate at Ventress Correctional Facility in AlabamaRead the Press Release
Montgomery, Alabama - Montgomery, AL – Michael Smith, Matthew Davidson, Joseph Sanders and Scottie Glenn, all former corrections officers with the Alabama Department of Corrections, were sentenced today by U.S. District Court Judge Myron H. Thompson in connection with the beating death of former inmate Rocrast Mack. Smith, 39, who was convicted by a federal jury on June 25, 2013, of seven counts of civil rights violations and obstruction of justice, was sentenced to 30 years imprisonment. Davidson, 45, who pled guilty to two civil rights violations and an obstruction of justice violation, was sentenced to seven years. Sanders, 32, who pled guilty to an obstruction of justice violation, was sentenced to five years. Glenn, 30, who pled guilty to a civil rights violation and a conspiracy violation, was sentenced to five years.
The incident occurred at Ventress Correctional Facility in Clayton, Ala., on Aug. 4, 2010, and at the time of the incident Smith was a lieutenant with supervisory authority over other officers on his shift. According to the evidence presented at trial, Smith assaulted Mack in an office in the prison, repeatedly striking him with a baton, stomping on him and kicking him. The evidence also showed that Smith assaulted Mack again several minutes later in the medical unit by repeatedly stomping on Mack’s head. Mack died the following morning in a Montgomery, Ala., hospital.
“These defendants each played a role in the vicious and fatal beating of Mr. Mack, and then they lied to authorities to conceal their culpability,” said Acting Assistant Attorney General for the Department’s Civil Rights Division Jocelyn Samuels. “Their actions run completely counter to the responsibilities and trust given to law enforcement officers. The Justice Department will continue to vigorously prosecute those officers who commit such heinous criminal acts, and I hope that these sentencings help bring some measure of closure to the Mack family.”
“The majority of our corrections officers are dedicated to protecting and serving the public,” said U.S. Attorney for the Middle District of Alabama George L. Beck Jr. “These correctional officers were not so dedicated. These correctional officers savagely beat, stomped, and tortured a restrained man and then lied to protect themselves. There is no excuse for such behavior. Correctional officers walk a tough line, but they cannot cross that line into the criminal element. I hope that these sentences bring some sense of justice to the victim’s family and reinforce the notion that no one is above the law.”
This case was investigated by the Mobile, Ala., Division of the FBI in partnership with the Alabama Bureau of Investigation, and was prosecuted by Assistant U.S. Attorney Jerusha Adams of the U.S. Attorney’s Office for the Middle District of Alabama and Trial Attorney Patricia Sumner of the Civil Rights Division of the Department of Justice.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Former Cameron County Woman Convicted of Voter FraudRead the Press Release
BROWNSVILLE, Texas – Sonia Leticia Solis, 55, has entered a plea of guilty to voting more than once in connection with the 2012 primary runoff election held in Cameron County on July 31, 2012, announced United States Attorney Kenneth Magidson.
The election included candidates running for the U.S. House of Representatives.
Solis resided in Brownsville during the election and obtained multiple mail-in ballots by forging applications on behalf of individuals she represented to be disabled.
U.S. District Judge Hilda Tagle, who accepted the guilty plea, has set sentencing for Feb. 5, 2014, at which time Solis faces a possible federal prison sentence of up to five years and a maximum $10,000 fine.
This case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Bill Hagen.
Former Attorney Sentenced for Fraud SchemesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Jackson County, Mo., attorney was sentenced in federal court today for bank fraud, which involved stealing funds from the Sam and Lindsey Porter foundation, as well as bankruptcy fraud.
Harley Kent Desselle, 63, of Raytown, Mo., was sentenced by U.S. District Judge Dean Whipple to three years in federal prison without parole. The court also ordered Desselle to pay a total of $348,794 in restitution, including $343,045 to one of his victims and $5,749 to the Bankruptcy Trustee for the U.S. District Court.
On May 6, 2013, Desselle pleaded guilty to one count of bank fraud and one count of making a false oath in a bankruptcy proceeding. He also admitted that he defrauded the widow of a longtime friend in an investment fraud scheme.
“This was a pattern of deceit, a series of fraud schemes that spanned at least eight years by a now-disgraced and disbarred attorney,” Dickinson said. “He abused his position as an officer of the court to take advantage of a grieving widow and to prey upon the memory of murdered children. He abused the legal system in a fraud-tainted bankruptcy filing. The law that he was sworn to serve, but spurned instead, will hold him accountable.”
At the time of the fraud schemes, Desselle was an attorney in private practice and operated an investment company called New Century Investments. Desselle was suspended from the practice of law in December 2008 and disbarred by the Missouri Supreme Court in April 2009.
Porter Foundation Scheme
Sam and Lindsey Porter were the children of Tina Porter. They disappeared in 2004. Their bodies were not discovered until 2007, when their father admitted his role in their deaths and pleaded guilty to murder. Beginning in 2007, donations were made to a bank account opened at the Bank of Grain Valley under the name of samandlindsey.org, Inc. Funds donated to the bank account were intended for use in building a children's playground.
Desselle charged $2,500 for the initial set up of samandlindsey.org, Inc. He began managing the samandlindsey.org, Inc., bank account in September 2007. At the time the foundation was established, Desselle told Tina Porter he would take care of everything on the account. He was the only person who could sign foundation checks. Porter asked Desselle, on numerous occasions, for bank statements and/or documents related to the account, but Desselle refused to produce documents and would not disclose the bank account information.
On Oct. 25, 2007, Desselle wrote a $12,000 check drawn on the foundation’s account and deposited it into his law firm trust account. Porter did not authorize the $12,000 check. On Oct. 29, 2007, Desselle wrote a $7,500 check drawn on the foundation’s account, made payable to New Century Investments, and deposited it into his New Century account. Porter was not aware of and did not authorize the $7,500 check.
When Porter learned of the $19,500 in misappropriations she insisted that Desselle return the funds to the foundation’s account. Desselle deposited two checks into the foundation account – a $19,500 check with “original investment” listed in the memo and a $2,238 check with “balance of investment with interest” listed in the memo. The $2,238 check actually came from legal fees earned by Desselle in his law practice and/or money borrowed from friends or family members instead of interest earned on the account.
Nunez Bankruptcy Scheme
Desselle acted as the attorney for Christina Nunez in her bankruptcy filing in 2008. Nunez owned a motorcycle that would not have been exempt under bankruptcy law. Desselle directed Nunez to sell the motorcycle and give him the proceeds, which she believed would be placed in the law firm’s trust account and used to pay down debt due her creditors. Desselle told Nunez the motorcycle sale proceeds would be exempt from bankruptcy creditors and not part of the estate.
Nunez sold the motorcycle for $13,500; she kept $500 and gave the remaining $13,000 to Desselle. Desselle used the $13,000 deposited in trust for Nunez for his own personal expenses rather than payment of Nunez's creditors.
Desselle filed Nunez's bankruptcy on Oct. 13, 2008. Nunez testified at a subsequent bankruptcy hearing that she never reviewed the bankruptcy petition and never signed the schedules. The bankruptcy schedules submitted by Desselle on Nunez's behalf did not include the $13,000 he received from Nunez for the sale of the motorcycle.
On May 12, 2009, the bankruptcy court ordered Desselle to refund all the money withdrawn from Nunez's trust account to the bankruptcy trustee. (Desselle refunded $7,251, but kept the remaining $5,749.) During the hearing, the court stated Desselle was involved in "...numerous acts of malpractice, deceit, and ...stealing," and "...likely falsified all of the bankruptcy schedules and statements and the various documents that had to be filed in order to initiate a bankruptcy filing."
Clifton Life Insurance Scheme
In addition to the two specific counts of the indictment to which Desselle pleaded guilty, his plea agreement also acknowledges that he defrauded Nancy Clifton, to whom he must pay $343,045 in restitution.
Clifton received $750,000 in life insurance proceeds in 1996 when her husband was killed in a motor vehicle accident. Desselle, a longtime friend of Clifton’s husband, offered to invest the life insurance proceeds for Clifton in New Century and promised her high yields on the investment.
Clifton received only two investment statements from Desselle, one in 2006 and one in 2007. Those statements were both false and fraudulent. Desselle created both documents to lull Clifton into believing her money was safe. In reality, Clifton's funds were lost by Desselle several years earlier, between 1998 and 2000.
Desselle made “interest payments” on Clifton’s investments by creating false documents to lull her into believing she was receiving interest payments, when the funds actually came from Desselle’s law firm or from funds Desselle solicited from family members. One of those payments came from the samandlindsey.org, Inc., account.
When Clifton read newspaper reports of Desselle’s handling of the Porter foundation account in 2008, she told Desselle to liquidate her investments as soon as possible. Desselle eventually admitted that her investments had all been lost.
This case was prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by FBI and the U.S. Trustee for Region 13 and the Kansas City Office of U.S. Trustee. Region 13 of the U.S. Trustee Program is headquartered in Kansas City, Mo., with additional offices in St. Louis, Mo., Little Rock, Ark. and Omaha, Neb. The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.Fast Food Restaurant Robbers Plead GuiltyRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that TREVIN MAURICE GIBSON of Greenville, MICHAEL RONDALE GIBSON of Greenville, PRENTISE JAVAUGHN WILKINS of Williamston and DESHAUN ENTREA SPRUILL of Robersonville each pled guilty to firearms charges resulting from a string of robberies of fast food restaurants in and around Greenville from September 2011 through January 2012. The robberies involved outlets of Bojangles, KFC, Subway, Burger King, McDonalds and Popeyes.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Greenville Police Department, the Williamston Police Department, the Robersonville Police Department, the Wilson Police Department, the Farmville Police Department, the Elizabeth City Police Department, the Goldsboro Police Department, the Snow Hill Police Department, and the Pitt County Sheriff’s Office. Assistant United States Attorney John Bennett is prosecuting the case.
Each defendant entered a plea before Chief U.S. District Judge James C. Dever, III to two counts of using or carrying a firearm during and in relation to a crime of violence, or possessing a firearm in furtherance of a crime, in violation of Title 18, United States Code, Section 924(c)(1)(A). SPRUILL entered his plea on Friday, November 1, 2013, and TREVIN GIBSON, MICHAEL GIBSON and WILKINS entered their pleas on Monday, November 4, 2013. Each defendant faces a mandatory minimum sentence of thirty years without parole, and could be sentenced to up to life in prison. Each defendant will be sentenced the week of February 10, 2014. Another defendant, Marcus Roshawn Garrett, entered a guilty plea earlier and is pending sentencing next month.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.Estrade Guilty PleaRead the Press Release
BATON ROUGE, LA – Acting United States Attorney Walt Green announced that the defendant, Gerald Estrade, 56, Baton Rouge, LA, pled guilty today, on the morning of trial, before the Honorable James J. Brady for threatening to murder a former federal law enforcement officer in violation of federal law. An Indictment was returned on January 10, 2013, formally charging Estrade with this offense.
Estrade was charged with threatening to kill the former United States Attorney for the Eastern District of Louisiana, James “Jim” Letten, and his family, with the intent to retaliate against him on account of his official duties, in violation of Title 18 U.S.C. 155(a)(1).
On January 7, 2013, Estrade, while a patient in the Baton Rouge General Behavioral Health Unit, advised Baton Rouge General’s Chief of Security, and former BRPD Chief, Jeff LeDuff, that if he was released, he would take all of his remaining money from his bank account, travel to New Orleans, LA, buy a gun, go to Mr. Letten’s house, hide behind a big oak tree in Mr. Letten’s front yard, and kill Mr. Letten and his dog, Rico, in front of Mr. Letten’s daughter. Estrade told Chief LeDuff that he wanted to kill Mr. Letten in retaliation for his failure to help him when he reached out to him from prison in 2005.
Chief LeDuff immediately advised former United States Attorney Letten and the FBI of the threat because he believed that Mr. Letten’s life was in serious danger.
Later that same day, Estrade was interviewed by two FBI agents. Estrade repeatedly stated that his intent was to travel to New Orleans and kill former United States Attorney Letten and his family. Estrade also advised that he had gone to Mr. Letten’s residence in 2001 and spoke to Mr. Letten briefly in his yard. Estrade further advised that he had sent a letter threatening Mr. Letten to the FBI in 2005 or 2006, while he was incarcerated in Allan Correctional Center. Estrade stated after he sent this letter, FBI agents came to the prison to interview him and thereafter he experienced a lot of problems. Estrade advised that he intended to kill Mr. Letten in retaliation for the problems that Mr. Letten caused him as a result of the 2005 letter.
At sentencing, Estrade faces a maximum penalty of a term of imprisonment of ten (10) years, a $250,000 fine, or both, and a mandatory special assessment of $100.
Acting U.S. Attorney Walt Green stated, “All threats against public officials will be thoroughly investigated and vigorously prosecuted by this office to the full extent of the law. Our public officials should not have to live in fear for doing their jobs.”
“We thank the FBI and the U.S. Attorney’s Office in the Middle District of Louisiana for their outstanding efforts in prosecuting this case,” stated Kenneth Allen Polite, Jr., U.S. Attorney for the Eastern District of Louisiana. “Threats against public servants in an effort to impede the administration of justice cannot and will not be tolerated.”
FBI SAC Michael J. Anderson stated, “Threats of such violence are never tolerated, but those threats that could interfere with vital law enforcement functions must be swiftly addressed to prevent any chilling effects on those charged with carrying out their public safety duties.”
This investigation is being handled by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Jennifer M. Kleinpeter, who serves as a Deputy Criminal Chief, and Assistant United States Attorney J. Christopher Dippel, Jr.
Eagle Man Pleads Guilty to Prescription Drug FraudRead the Press Release
BOISE – Rahil Akhtar, 37, of Eagle, Idaho, pleaded guilty today in federal court to one count of acquiring and obtaining a controlled substance by misrepresentation, fraud and deception, U.S. Attorney Wendy J. Olson announced. Akhtar was a dentist licensed to practice in the state of Idaho.
According to court documents, from 2011 through June 2013, Akhtar schemed to obtain controlled substances for himself by writing fraudulent prescriptions to other people. The prescriptions were for medications containing hydrocodone, a Schedule III controlled substance, and Alprazolam (a benzodiazepine), a Schedule IV controlled substance. Generally, Akhtar would write a prescription to a person who was not a current patient in need of treatment or a prescription. At Akhtar’s direction, the person would fill the prescription at a pharmacy and return the majority of the pills to Akhtar. Sometimes Akhtar provided the person filling the prescription with money, but other times he expected that person to pay for the prescription. On some occasions, the person picking up the prescription kept some of the pills.
According to the plea agreement, Akhtar admitted that he wrote approximately 93 prescriptions and thereby acquired by fraud more than 2,500, but less than 5,000, dosage units of Schedule III and IV controlled substances. Akhtar further admitted the prescriptions were written without a legitimate medical purpose and outside the usual course of a professional dental practice: the individuals to whom the prescriptions were written were not patients in need of the prescriptions at the time; Akhtar provided no treatment and created no medical records related to the prescriptions; and although written to different people, the prescriptions were intended to provide drugs for Akhtar.
As part of the plea agreement, Akhtar will withdraw his DEA application for a DEA number in the state of Washington and agreed not to reapply for any DEA registration for at least one year after the final entry of judgment in this case, or the completion of any term of incarceration resulting from this case, whichever is later.
The charge of acquiring and obtaining a controlled substance by misrepresentation, fraud and deception is punishable by up to four years in prison (or eight years for persons with a prior controlled substance felony conviction), a term of supervised release of not more than one year (but not more than three years), and up to eight years of supervised release.
Akhtar is scheduled to be sentenced on January 29, 2014, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
This case was investigated by the Drug Enforcement Administration (DEA Diversion) and Meridian Police Department.
Debt Collection Employee and Son-in-Law Sent to Prison for Identity Theft Tax SchemeRead the Press Release
Quentin Collick of Montgomery, Ala., and Deatrice Williams of Duluth, Ga., were sentenced Nov. 1, 2013, to serve 85 and 51 months in prison, respectively, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr. Collick and Williams were previously found guilty by a jury in the Middle District of Alabama of conspiring to file false claims, wire fraud, and aggravated identity theft. Collick was also convicted of three counts of theft of public funds. Corey Thompson, a co-conspirator, previously pleaded guilty and was sentenced to serve 30 months in jail.
Based on evidence introduced at trial and court filings, Williams worked for a debt collection company located in Norcross, Ga. As an employee, Williams had access to a database that stored names, social security numbers and dates of birth of individuals who owed medical debts. Williams stole the identities of a number of these individuals and provided the stolen information to Collick, her son-in-law.
Collick and Thompson used stolen identities to file false tax returns and fraudulently claim tax refunds. In 2011 and 2012, Thompson worked as an independent contractor for a cable company installing cable and internet access for customers. To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers’ internet service, and along with Collick, filed false tax returns using the customers’ internet access, making it appear as if the false tax returns were being filed by the customers. Thompson and Collick then directed the tax refunds to be placed on pre-paid debit cards, which were mailed to Montgomery, Ala. However, those cards were intercepted by the U.S. Postal Service. Several tax refund checks were also mailed by the IRS, based upon the fraudulent returns, which Collick retrieved and cashed.
This case was investigated by special agents of IRS - Criminal Investigation and prosecuted by Tax Division Trial Attorneys Michael Boteler, Jason H. Poole and Alexander Effendi
Convicted Felon Violated Federal Gun Law by Possessing WeaponRead the Press Release
PITTSBURGH - A resident of Wilmerding, Pa., pleaded guilty in federal court to a charge of violating federal firearms laws, United States Attorney David J. Hickton announced today.
Monte Blair, 40, pleaded guilty to one count before Senior United States District Judge Gustave Diamond.
In connection with the guilty plea, the court was advised that on or about Sept. 28, 2012, Blair, being a convicted felon, illegally possessed a Ruger 9mm pistol. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing a firearm.
Judge Diamond scheduled sentencing for March 4, 2014, at 10:00 a.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Assistant United States Attorney Charles A. Eberle is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Monte Blair. This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
Collinsville Man Sentenced to Nearly Twenty Years in Prison for Production of Child PornographyRead the Press Release
A Collinsville, Illinois, man was sentenced on November 4, 2013, on a charge of Production of Child Pornography, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Martin L. Evanick, a/k/a "Vlad," 32, was sentenced to a term in prison of 235 months, to be followed by 20 years supervised release, fined $2,000, and ordered to pay a special assessment of $100. In addition, upon his release from prison, Evanick must register as a sex offender as a condition of his supervised release. Evanick has been detained, that is, held without bond, since his arraignment on October 19, 2012.
“Protecting our children from predators who would steal their very childhood is my highest priority.” said United States Attorney Wigginton. “Like all of us, I am utterly repulsed by such crimes. It is my fervent hope that sentences like this one would deter any person bent on exploiting children.”
The investigation began in April, 2012, when the victim’s (“TM”) mother contacted the Collinsville Police Department regarding a possible sexual assault on her 16 year old minor daughter by a 30 year old man. That man was later identified as Evanick. TM divulged that Evanick had also taken nude pictures of her using his cellular telephone. The investigation revealed that, from approximately March 1, until April 21, 2012, TM stayed with a friend who lived near Evanick. TM and her friend would often visit Evanick at his house.
In a videotaped interview, TM said that, in March and April of 2012, she and Evanick had sex five to six times, and that each sexual encounter occurred at Evanick’s residence. TM said that Evanick warned her not to tell anyone, including her friend. TM stated that, in April 2012, Evanick took pictures of them engaged in oral sex, and that he also took nude pictures of her that exposed her naked genitalia. TM was 17 at the time the photographs were taken. Evanick was 30 years old.
In his first interview, Evanick denied ever having sexual intercourse with TM, and insisted that no nude photographs of TM would be on his cellular phone. A subsequent review of the contents of Evanick’s cellular telephone revealed four photographs that involved TM, all of which were pornographic. Two of the photos showed TM and Evanick engaged in a sexual act, while the other two photos were close-up pictures of TM’s genitalia. The four photographs were later shown to TM who identified herself and Evanick in the photographs.
In a second interview with FBI agents, Evanick admitted that he had a sexual relationship with TM that began in approximately mid-March, 2012, and that he knew she was 17 years old at the time. He said that the two had sex five to seven times, always at his house.
Additional evidence introduced at sentencing revealed that another female minor, after learning of Evanick’s arrest on the news, came forward to report that Evanick had sex with her when she was 14 years old. This girl, who also submitted a written victim impact statement, spoke at the sentencing hearing and revealed that, after she reported the incident in November 2012, she tried to commit suicide, was diagnosed with PTSD, and had to move in with her parents because she was afraid to live alone because she had forced herself to forget the molestation that occurred shortly after her 14th birthday.
The victim in the charged offense, TM, and her mother, also provided victim impact statements to the Court, as well as providing oral statements regarding the effects of Evanick’s actions on both of them. TM told the Court that she had trouble sleeping, as well as other difficulties that she has experienced as a result of the charged offense.
Evidence introduced at sentencing also revealed that Evanick targeted both of the victims while they were vulnerable, and asked them if they were virgins before engaging in sexual contact with them.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 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.”
The case was investigated by the Collinsville, Illinois, Police Department and the Federal Bureau of Investigation's Springfield Child Exploitation Task Force. The case is assigned to Assistant United States Attorney Angela Scott.
Citizen of Mexico Sentenced to 57 Months in Prison for Illegally Reentering U.S. After DeportationRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that LUCIANO FLORES JIMINEZ, 46, also known as Roberto Gonzalez-Gonzalez” and “Alberto Torres,” was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 57 months of imprisonment for illegally reentering the U.S. after he was deported.
According to court documents and statements made in court, JIMINEZ, a citizen of Mexico last residing in Bridgeport, has never held legal status in the U.S. In November 2009, JIMINEZ was deported to Mexico after he had sustained numerous convictions for larceny and other offenses in Connecticut, Georgia and Florida.
JIMINEZ illegally reentered the U.S. and was subsequently found and prosecuted under the alias of “Roberto Gonzalez-Gonzalez” in the Southern District of Texas for illegal reentry. After receiving a 90-day sentence, he was deported in July 2011.
JIMINEZ illegally reentered the U.S. in August 2011, was found, and deported a third time in November 2011.
JIMINEZ again illegally reentered the U.S. and, in June 2012, was arrested for a theft offense in Memphis, Tenn., under the alias of “Alberto Torres.” On December 5, 2012, he was arrested in Stamford on charges of criminal impersonation, forgery, larceny and interfering/resisting arrest.
JIMINEZ has been detained since his last arrest. On August 13, 2013, he pleaded guilty to one count of illegal reentry of a removed alien.
The investigation revealed that JIMINEZ used approximately 14 different aliases and five dates of birth in the U.S. since at least 1994.
This matter was investigated by U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations. The case was prosecuted by Assistant U.S. Attorney Deborah R. Slater.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Carrollton Property Owner Pays Settlement for Logging in Wetlands EasementRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the government has reached a settlement agreement with a Carrollton, Mo., man who admitted he logged trees that were located in a wetlands easement on his property.
Ben Gibson, of Carrollton, Mo., paid the government $11,419 as part of a settlement agreement. Under the terms of the agreement, the government will not file a civil complaint against Gibson and will use that payment to implement a forest mitigation plan, including replanting trees to replace those that were harvested by Gibson.
“The federal government has made a substantial investment in easements to protect our wetlands from destruction,” Dickinson said. “This is an important natural resource for all Missourians. Property owners who willingly participate in the Wetland Reserve Program must honor their commitment or face the consequences.”
In January 2008, the government paid $86,424 to Gibson’s company, By-Pass, to acquire the easement, which explicitly prohibits harvesting timber. After the dissolution of By-Pass, the property was transferred to Gibson. On Oct. 11, 2011, personnel with the Natural Resources Conservation Service discovered that 97 trees had been harvested from the easement site. Gibson admitted that he was responsible for harvesting the trees, which had a total volume of 42,204 board-feet with an estimated market value of $8,230.
Under the terms of the settlement agreement, Gibson acknowledges that any subsequent violation of the easement will constitute a breach of the settlement agreement and entitle the government to $86,424 in damages (the amount paid to obtain the easement).
The Wetland Reserve Program is a voluntary program that provides landowners the opportunity to protect, restore, and enhance wetlands on their property by enrolling acreage into the program through the use of permanent easements, 30-year easements, restoration cost share agreements, or any combination of those options.
This case was overseen by Assistant U.S. Attorney Amy B. Blackburn.
Carbondale Man Charged in Heroin ConspiracyRead the Press Release
On October 28, 2013, Michael A. Burns, 45, of Carbondale, was arraigned in federal court in Benton, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Burns was charged by indictment, on October 23, 2013, with Conspiracy to Distribute Heroin. At the October 28, 2013, court hearing, Burns was ordered held without bond pending a December 30, 2013, jury trial.
According to the indictment, the offense occurred between August 2012, and August 23, 2013, in Carbondale, Jackson County. The heroin offense carries a penalty of up to 20 years in prison, to be followed by 3 years supervised release, and a fine of up to $1,000,000.
Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation was conducted by the Southern Illinois Enforcement Group. The Illinois State Police, Carbondale Police Department, and the Jackson County State’s Attorney’s Office assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Cape Girardeau, Missouri, Man Sentenced for Manufacturing and Distributing Counterfeit CurrencyRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that on November 1, 2013, Tyrone A. Jones, 24, of Cape Girardeau, Missouri, was sentenced to 30 months in prison, to be followed by 3 years of supervised release, in United States District Court in Benton, after pleading guilty to two counts of manufacturing and passing counterfeit United States currency.
At his plea on July 25, 2013, Jones admitted that on February 10, 2013, and again on March 10, 2013, he passed over $600.00 in counterfeit currency at a business located in Alexander County, within the Southern District of Illinois. He also admitted that he had manufactured other counterfeit currency that was recovered by the United States Secret Service.
The case was investigated by agents of the United States Secret Service. The case is being prosecuted by Assistant United States Attorneys Ranley R. Killian.
Cameron County Man Sentenced to 171 Months in Prison for Armed CarjackingRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced that Thomas Edward Smith, age 59, of Emporium, Pennsylvania, was sentenced on November 1 by Chief U.S. District Court Judge Christopher C. Conner to a 171-month term of imprisonment and three years of supervised release for armed carjacking.
According to United States Attorney Peter J. Smith, on August 8, 2012, Thomas Smith pretended to be working on a car parked along a street in Emporium and flagged down an employee of Citizens & Northern Bank. Smith entered the vehicle and pulled out a handgun. Smith then directed the victim to drive to the Citizens & Northern Bank branch in Emporium. Smith told the victim this would be "the worst day of her life," that the victim and the bank had taken his house away from him in a bank foreclosure, and that the victim and another bank employee were now "going to pay for it." The victim jumped out of the vehicle to escape from Smith, who then also fled from the vehicle.
Smith was indicted in September 2012. In August 2013, Smith was convicted of carjacking, brandishing a gun during a crime of violence and receiving a stolen firearm stemming from an armed carjacking.
The case was investigated by the Emporium Borough Police Department, the Cameron County Sheriff, the Pennsylvania State Police, and the Federal Bureau of Investigation. Prosecution was handled by Assistant United States Attorney George J. Rocktashel.California Woman Pleads Guilty to Threatening Minot Air Force BaseRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on Nov. 4, 2013, Tiffany S. Anderson, 24, Lompoc, California, pleaded guilty in U.S. District Court on two counts of communicating a threat to destroy property by explosive and one count of interstate threatening communications.
On Nov. 6, 2012, and on Dec. 19, 2012, Anderson called the Minot Air Force Base from California and falsely reported there was a bomb on the base. On Dec. 20, 2012, Anderson called the Minot Public Schools Head Start program located at the Minot Air Force Base and threatened to shoot children at the school. During her plea hearing, Anderson admitted she made the threats in an attempt to cause trouble for her former boyfriend who was an Airman stationed at the base. Anderson disguised the number she was calling from by using a Voice Over Internet Protocol (“VOIP”) service. Through their investigation, law enforcement agents were able to determine the calls were made by Anderson from her iPhone.
Each charge carries a statutory maximum penalty of 10 years in federal prison and a $250,000 fine.
The case was investigated by the Federal Bureau of Investigation and Minot Air Force Base Office of Special Investigations.Sentencing for Anderson has been scheduled for Feb. 3, 2014, in U.S. District Court in Bismarck, N.D., at 9:00 a.m.
Assistant U.S. Attorney Rick Volk is prosecuting the case.
Businessman Convicted in Fraud SchemeRead the Press Release
BOSTON – The former Treasurer and Chairman of the Board of Directors of Nevada-based First Global Financial Corporation was convicted today for his participation in a fraudulent kickback scheme.
Albert Reda, 67, of Tustin, Calif., was convicted following a six-day jury trial. Reda was convicted of wire fraud and mail fraud. U.S. District Court Judge Denise J. Casper scheduled sentencing for February 11, 2014.
Reda was convicted for his participation in a scheme to pay secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in the defendant’s company, a publicly traded company that traded on the over-the-counter securities market. The kickbacks were concealed through the use of a sham consulting agreement and other fraudulent documents, such as bogus invoices. What the defendant did not know was that the purported investment fund representative was actually an undercover agent with the Federal Bureau of Investigation.
The conviction followed a year-long investigation focusing on preventing fraud in the micro-cap stock markets. Microcap companies are small publicly-traded companies whose stock often trades at pennies a share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.
To date, 15 individuals have been charged arising out of the FBI’s undercover operation, and all 15 have been convicted, either after trial or by way of a guilty plea.
The statutory maximum penalties for mail and wire fraud are 20 years in prison to be followed by three years of supervised release and a $250,000 fine.The Securities and Exchange Commission, which conducted a parallel civil investigation alongside the FBI undercover operation, cooperated with criminal authorities in bringing these charges, and charges against other defendants who participated in the kickback scheme. The Financial Industry Regulatory Authority (FINRA) provided assistance with the trial.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, announced the conviction today. The case was prosecuted by Assistant U.S. Attorneys Vassili Thomadakis, Eric P. Christofferson and Sarah E. Walters of Ortiz’s Economic Crimes Unit.
This case was brought in coordination with President Barack Obama’s 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 to bear 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.