Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Wednesday 31 July 2013
Indictment: Texas Man Sponsored Dog FightingRead the Press Release
KANSAS CITY, KAN. – A Texas man has been indicted on a federal charge of sponsoring dog fighting, U.S. Attorney Barry Grissom said today.
Vertrick Jordan, 47, Tyler, Texas, is charged with one count of conspiracy to engage in an animal fighting venture. The indictment alleges that Jordan conspired with two other men to engage in animal fighting. The men are Pete Davis, Jr., and Melvin L. Robinson, who are scheduled for sentencing Sept. 9 after pleading guilty to a federal charge of transporting animals for participation in an animal fighting venture.
The indictment alleges Jordan and the others conspired to:
– Acquire, breed and train pit bull dogs for the purpose of entering them in dog fights.
– Operate unlicensed kennels for pit bull dogs.
– Communicate between Kansas and Texas for the purpose of sponsoring dog fights.
– Collect forfeit fees from participants in dog fights.
– Sponsor and conduct illegal gambling and bookmaking activities as part of dog fights.
– Deny adequate and humane medical treatment to dogs injured and wounded in dog fights.
– Inhumanely abandon and destroy pit bull dogs who were severely injured in dog fights.The indictment alleges that on March 23, 2013, Davis and Robinson left a motel where they were staying in Tyler, Texas, with a pit bull dog belonging to Robinson, and drove to Jordan’s residence in Tyler. They planned to enter the dog in an animal fighting venture. The animal fighting venture was a “two dog card” and a “grand championship” match in which each dog was required to have won four previous fights to qualify for the grand championship match. Jordan permitted a pit for dog fighting to be constructed on his property. Investigators observed two trophies next to the pit. Jordan maintained approximately ten pit bull dogs on his property for the purpose of breeding them and selling them.
If convicted, Jordan faces a maximum penalty of five years in federal prison and a fine up to $250,000.The following agencies contributed to the investigation: The FBI, the Kansas City (KS) Police Department, the Harrison County (MO) Sheriff's Department, the Missouri State Highway Patrol, the Texas Department of Public Safety - Narcotics and Highway Patrol, East Texas HIDTA, the FBI Dallas Division - East Texas Resident Agencies, the American Society for the Prevention of Cruelty to Animals, the Texas Parks and Wildlife Department - Game Wardens, the Texas Department of Criminal Justice - OIG, the Lindale Police Department, the Smith County Sheriff’s Office, the Dallas Police Department and the Dallas County Sheriff’s Office and the American Society for the Prevention of Cruelty To Animals. Assistant U.S. Attorney Tris Hunt is prosecuting.
OTHER INDICTMENTS
Sudhir Dodda, 37, Allen, Texas, and Preetham Kodiripaka, 38, Allen, Texas, are charged with one count of conspiracy to commit visa fraud; four counts of making false statements on immigration documents, and one count of commercial carrier fraud and conspiracy to commit foreign labor contracting fraud. In addition, Kodiripaka is charged with 15 counts of mail fraud.The indictment alleges Dodda and Kodiripaka, co-owners of INEK Technologies, LLC in Overland Park, Kan., made false statements on documents they submitted in order to obtain H-1B specialty work visas for a dozen foreign workers. The crimes are alleged to have occurred at various times from October 2004 to the present in Johnson County, Kan.
Upon conviction, the crimes carry the following penalties:
Conspiracy: A maximum penalty of five years in federal prison and a fine up to $250,000.
Making false statements on immigration documents: A maximum penalty of 10 years and a fine up to $250,000 on each count.
Commercial carrier fraud and conspiracy to commit foreign labor contracting fraud: A maximum penalty of 20 years and a fine up to $250,000.
Mail fraud: A maximum penalty of 20 years and a fine up to $250,000 on each count.The U.S. Department of Labor - Office of the Inspector General, Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the Internal Revenue Service investigated. Assistant U.S. Attorney Chris Oakley is prosecuting.
Ian Sean Cahir, 40, Shawnee, Kan., is charged with three counts of misuse of a Social Security number and three counts of aggravated identity theft. The crimes are alleged to have occurred in August 2010 and January 2011 in Shawnee, Kan.
The indictment alleges Cahir used his six-year-old son’s Social Security number.
If convicted, he faces a maximum penalty of five years in federal prison without parole and a fine up to $250,000 on each count of misusing a Social Security number; and a mandatory two years to run consecutively to the underlying sentence on each count of aggravated identity theft. The Social Security Administration - Office of Inspector General investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Jose Magana-Garcia, 42, a citizen of Mexico, is charged with unlawfully re-entering the United States after being deported. He was found July 23, 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. ICE’s Enforcement Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Luis Zamarripa-Favela, 34, a citizen of Mexico, is charged with unlawfully re-entering the United States after being deported. He was found July 23, 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. ICE’s Enforcement Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Martin Martinez-Perez, 39, a citizen of Mexico, is charged with unlawfully re-entering the United States after being deported. He was found July 26, 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. ICE’s Enforcement Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Joel M. Lopez, 32, Wichita, Kan., is charged with one count of unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred July 30, 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Wichita Police Department investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Huntsville Man Indicted on Child Pornography ChargesRead the Press Release
BIRMINGHAM -- A federal grand jury late Tuesday indicted a Huntsville man on child pornography charges, announced U.S. Attorney Joyce White Vance and Alabama Bureau of Investigation Chief Neil Tew.
An indictment filed in U.S. District Court charges RICKY ALAN KLEMMER, 60, with distributing, receiving and possessing child pornography.
Count One charges that Klemmer used a computer to distribute child pornography over the Internet between February and June in Madison County. Count Two charges that he received child pornography by computer between November 2011 and July 2013, and Count Three charges Klemmer with possessing child pornography between May and July this year.
The maximum penalty for both distributing child pornography and receiving child pornography is 20 years in prison and a $250,000 fine. Those charges carry a minimum sentence of five years in prison. Possessing child pornography carries a maximum sentence of 10 years in prison and a $250,000 fine.
The ABI investigated the case. Assistant U.S. Attorney Chinelo Diké-Minor is prosecuting the case.
The public is reminded that an indictment contains only charges. It will be the government's responsibility to prove guilt beyond a reasonable doubt at trial.
Hazard Woman Pleads Guilty to Illegally Structuring Bank DepositsRead the Press Release
LONDON, KY - Lois Elaine Smith, 53, of Hazard, KY., pleaded guilty today to charges of currency structuring.
In her guilty plea, Smith admitted she intentionally structured cash deposits, in increments of just under $10,000, into an account at the Peoples Bank and Trust in Perry County. Smith acknowledged that she structured the deposits in this manner to prevent the bank from filing a currency transaction report with the federal government.
Under federal law, financial institutions, such as banks, are required to report to the federal government any currency deposit, withdrawal, or exchange that is over $10,000. It is a violation of federal law to intentionally structure cash transactions to avoid these reporting requirements.
Smith was indicted by a grand jury in February of 2013.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Christopher A. Henry, Special Agent in Charge, Nashville Field Division, Internal Revenue Service, jointly made the announcement.
The investigation was conducted by the IRS, Northern Kentucky Financial Crimes Task Force. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorneys Jordi De Llano and Robert K. McBride.
Smith is currently scheduled to appear before U.S. District Judge Gregory Van Tatenhove for sentencing, in London, on November 21, 2013, at 1:30 p.m. Smith faces a maximum prison sentence of five years. However, any sentence following conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Former Washington, D.C. Accountant Pleads Guilty to Tax FraudRead the Press Release
The Justice Department and Internal Revenue Service (IRS) announced today that John T. Hoang, of Woodbridge, Va., pleaded guilty in federal district court in Washington, D.C., to willfully aiding and assisting in the preparation of false income tax returns for tax year 2004.
According to court documents and statements made in court, Hoang was a certified public accountant (CPA) and an attorney. From January 2005 through April 2007, Hoang operated John T. Hoang CPA, a tax return preparation business and was one of two partners who owned Tax-Smart Technology Services. Hoang operated John T. Hoang CPA and Tax-Smart from various locations in the District of Columbia and Fairfax, Va.
In his capacity as a tax return preparer, Hoang prepared and supervised the preparation of client tax returns to be filed with the IRS and various state taxing authorities. For the tax years 2004, 2005 and 2006, Hoang prepared hundreds of Forms 1040 (U.S. Individual Income Tax Returns) and earned substantial income from his tax preparation activities. Hoang further received, through John T. Hoang CPA and Tax-Smart, a substantial portion of the refunds issued by the IRS to his clients. Despite earning revenue through his businesses of approximately $1 million in 2004; $2 million in 2005; and $3 million in 2006, Hoang failed to file any federal income tax returns or pay any federal income taxes for himself or his businesses.
Hoang admitted that he prepared and caused the preparation of false and fraudulent 2004, 2005 and 2006 Forms 1040 for his clients. When preparing these false Forms 1040 and related schedules for his clients, Hoang created wholly fictitious business income and expenses for what purported to be a technology licensing business. The false information resulted in the client-taxpayers reporting fake losses from the business activity and receiving either larger refunds than they were entitled to or a decrease in the amount of taxes due. Hoang admitted that the tax loss caused by some of the false returns he prepared was greater than $30,000 per return and that he prepared at least 24 such false returns for the 2004 through 2006 tax years.
As part of the plea agreement, Hoang admitted that the total tax loss caused by his criminal conduct is greater than $1.5 million.
United States District Judge Richard J. Leon, who is presiding over the matter, set a sentencing date of Nov. 06, 2013. Hoang faces a maximum sentence of six years in prison and a $500,000 fine.
The case was investigated by IRS-Criminal Investigation and is being prosecuted by Trial Attorneys Jorge Almonte and Jeffrey B. Bender of the Justice Department’s Tax Division.
Former Real Estate Developer and his Long-Time Girlfriend Convicted of 25 Counts for Tax Evasion SchemeRead the Press Release
A former western Washington real estate developer and his long-time girlfriend were convicted today in U.S. District Court in Seattle of 25 counts of tax evasion and false statements related to their scheme to avoid paying taxes on more than $23 million in income, announced U.S. Attorney Jenny A. Durkan. WINSTON BONTRAGER, 64, and PAULINE ANDERSON, 65, were indicted in March 2012, and have been in federal custody since June 2012. The jury deliberated about 3 days following a four week long jury trial. Jurors convicted the two on all counts presented by prosecutors. U.S. District Judge Richard A. Jones scheduled sentencing for November 22, 2013.
For WINSTON BONTRAGER, it is a second conviction for tax crimes and third federal criminal conviction. BONTRAGER was previously convicted in 1983 for bank fraud and in 1994 for defrauding the Oregon Public Employees Retirement System and the IRS of over $687,000. In 1994 he was sentenced to 40 months in prison. Some of the convictions returned today are for BONTRAGER’s false statements surrounding his failure to pay more than $687,000 in restitution from his prior conviction. During the trial prosecutors detailed how BONTRAGER and ANDERSON filed false tax returns from 2004-2009, failing to report more than $23 million in income and failing to pay more than $2.7 million in taxes. Over $10 million was moved into foreign bank accounts in PAULINE ANDERSON’s name, and virtually all of the couples’ assets were put in ANDERSON’s name in order to hide it from the IRS and those seeking to enforce BONTRAGER’s restitution obligation and collect delinquent taxes. At the same time that the couple paid little in income taxes, they purchased a luxury condominium in Bellevue and spent approximately $500,000 on an extensive remodel. They owned a $325,000 wine collection, a $1.2 million home in Southern California, a 6.7 carat diamond ring, a Bentley worth $186,000, and they spent over $3.4 million in credit card purchases, including travel, cosmetic surgery, cosmetic dentistry, restaurants, and clothing and shoes.
Prosecutors told the jury the case was about “fraud, deceit, and evasion,” and they urged jurors to “follow the money” to see how BONTRAGER and ANDERSON made millions of dollars but refused to pay a single dime for BONTRAGER’s restitution obligation, delinquent taxes, or in income tax. Prosecutors described various development deals in Vancouver, Washington where BONTRAGER made millions of dollars, in some instances defrauding business partners as well as the IRS.
The tax crimes of conviction are each punishable by between three to five years in prison, and the false statement convictions are also punishable by up to five years in prison. BONTRAGER was convicted of nine tax counts and eight counts of making false statements. ANDERSON was convicted of 11 tax counts.
The case was investigated by the Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Carl Blackstone and Aravind Swaminathan.
Former Network Engineer Indicted by A Federal Grand Jury in Connection with Million-dollar Computer System DamageRead the Press Release
CHARLESTON – A former network engineer at Charleston-based EnerVest Operating was indicted by a federal grand jury sitting in Charleston on Tuesday for allegedly causing extensive damage to the company’s computer system in June 2012, announced U.S. Attorney Booth Goodwin. Ricky Joe Mitchell, 34, of Mableton, GA, was charged with recklessly damaging a protected computer. The alleged damage led to widespread computer network issues and resulted in more than $1 million in losses to EnerVest.
The indictment alleges that on June 26, 2012, Mitchell, who knowingly accessed a protected computer without authorization, erased backup information, and disabled a data replication process designed to transmit backup data that was stored in Houston, Texas. Mitchell is also alleged to have deleted all of the company’s phone system accounts, extensions, and accounting data.
As a result of the alleged acts, employees at EnerVest Operating were unable to fully communicate or conduct business operations from approximately June 26, 2012 through July 27, 2012.
Mitchell faces up to 15 years in prison and a $500,000 fine if convicted.
The U.S. Secret Service conducted the investigation. United States Attorney Goodwin is handling the prosecution.
U.S. Attorney Booth Goodwin announced the Business Protection Initiative in November 2010. Business protection is a primary initiative of the U.S. Attorney’s Office that focuses on prosecuting individuals who defraud West Virginia businesses.
Note: The charge contained in the indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty
Click here to view a copy of the indictment
Former Manager of Virginia Beach Mortgage Brokerage Sentenced to 66 Months in JailRead the Press Release
NORFOLK, Va. – David Burrus, Jr., age 40, of Burns, TN, was sentenced today to 66 months in prison, followed by a five year term of supervised release, for conspiring to commit wire and mail fraud. Burrus was also ordered to pay restitution of $241,779.26.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Royce Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office, and Joseph Clarke, Special Agent in Charge of the Office of Inspector General, Department of Housing and Urban Development, Mid-Atlantic Region, made the announcement after sentencing by Senior United States District Judge Robert G. Doumar.
Burrus pleaded guilty on March 18, 2013 to count one of the indictment pending against him. According to court documents, Burrus managed and ran a Virginia Beach branch office of a mortgage brokerage firm headquartered in Tennessee from 2003 through 2007. Burrus also co-owned a title and escrow company which conducted real estate closings for many of the loans originated by loan officers supervised by Burrus. Burrus also owned another entity, Southern Living Properties, which he used to receive monies from fraudulent real estate transactions that he conducted.From 2005 through 2007, Burrus sought and obtained numerous mortgage loans in both his and his spouse's names. In the course of these transactions, Burrus agreed to buy local properties for more than the sellers' listing price, provided that the transactions were structured to ensure that any extra sales proceeds were paid to Southern Living Properties at the real estate closings. This ensured that, unbeknownst to the mortgage lenders, Burrus received a substantial portion of the loan proceeds when buying properties in his or his spouse's name.
To induce lenders to approve various requests for mortgage loans, Burrus also submitted false loan applications, fictitious leases purporting to show his properties were generating rental income, and false Southern Living invoices billing property sellers for work and services that had never been performed. Burrus also made material misrepresentations to mortgage lenders about his and his spouse's income and liabilities, his rental income, and about his spouse's intent to occupy properties purchased as her primary residence.
Shortly before the crash of the real estate market, Burrus also sought to sell properties in his portfolio to his associates and offered to pay kickbacks to buyers to facilitate sales. Rhonda Wyland, age 44, of Virginia Beach and then a loan officer working for Burrus, agreed to purchase one such property in Portsmouth, VA, in exchange for a kickback of $140,000. Wyland also made false statements to obtain a mortgage loan to complete this transaction and, after receiving the $140,000 kickback, defaulted upon the loan. On December 12, 2012, Wyland pled guilty to a criminal information charging her with conspiracy to commit wire fraud. On April 5, 2013, Chief United States District Judge Rebecca Beach Smith sentenced Wyland to serve six months in jail and six months of home confinement.
As a result of his activities, Burrus obtained mortgage loans to purchase seventeen properties in Hampton Roads and then defaulted upon those loans. The known losses stemming from these loans are approximately $2,036,296.00.
This case was investigated by the FBI’s Norfolk Field Office and HUD's Office of Inspector General. Assistant United States Attorney Robert Krask prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Former CEO/Owner of Home Health Care Provider Sentenced to Prison for Falsifying Records Involving A Federal Audit-Audit Involved Medicaid/Medicare Payments-Read the Press Release
WASHINGTON – Jeannette N. Awasum, the former owner of a health care provider, was sentenced today to eight months of incarceration on a federal charge stemming from falsifying records in connection with a U.S. Department of Health and Human Services audit.
The sentence was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS - OIG) for the region including the District of Columbia.
Awasum, 49, of Germantown, Md., pled guilty in April 2013 in the U.S. District Court for the District of Columbia to a charge of falsification of records in connection with a federal investigation. She was sentenced by the Honorable Richard J. Leon. Upon completion of her prison term, Awasum will be placed on two years of supervised release. Four months of that time will be on home detention. She also was ordered to perform 500 hours of community service.
According to a statement of offense, signed by the defendant as well as the government, in early June 2010, Awasum, the Chief Executive Officer and owner of Tri State Home Health and Equipment Service, was informed that the U.S. Department of Health and Human Services requested the physician-signed plans of care for 130 of its patients. These plans of care are what authorize providers like Tri State to provide home healthcare services to Medicare and D.C. Medicaid beneficiaries.
Awasum knew that Tri State lacked plans of care for 62 of these 130 patients. Tri State received approximately $1,879,853 from Medicare and D.C. Medicaid for treating these 62 patients during the period for which plans of care were missing. Awasum directed her employees to fraudulently create plans of care for the services that these 62 patients received, making it appear as if the documents had been created prior to the services being provided. In total, the employees created 81 plans of care for these 62 patients.
Awasum instructed one of her employees to take the 81 fabricated forms to a doctor whom Awasum knew never examined these patients. Despite the fact that this doctor never examined these patients, he signed the plans of care in June 2010, making it appear as if he authorized these 62 patients receiving home healthcare services prior to the time that Tri State provided these services. The employee, at Awasum’s directions, placed the fraudulent 81 plans of care in Tri State’s file so that the forms would be present when the U.S. Department of Health and Human Services audited the services provided to these 62 patients.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Special Agent in Charge DiGiulio commended the efforts of those who investigated the case from the FBI’s Washington Field Office and the Office of the Inspector General of the U.S. Department of Health and Human Services. They also praised those who worked on the case from the U.S. Attorney’s Office, including Legal Assistant Donna Galindo, former Assistant U.S. Attorney Courtney G. Saleski, and Assistant U.S. Attorney Matt Graves, who prosecuted the matter.
13-271Five Arrested for Methamphetamine Manufacturing in Vero BeachRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, and Deryl Loar, Sheriff, Indian River County Sheriff’s Office, announce the arrest of five Vero Beach residents: Edward McElhenny, 50, Clinton Story, 30, Paul Richardson, 27, Angela Story, 32, and Kelly McCartney, 36. The five defendants made their initial appearance yesterday before U.S. Magistrate Judge Frank J. Lynch, Jr. in Ft. Pierce and were detained pending trial. A pre-trial detention hearing has been set for Thursday, August 1, 2013.
The criminal complaint charges the five defendants with conspiracy to manufacture, distribute and possess with intent to distribute a controlled substance, over fifty (50) grams of methamphetamine in violation of Title 21, United States Code, Section 841 (a) (1) and (b)(1)(A)(viii); all in violation of Title 21, United States Code, Section 846. If convicted, the defendants face a mandatory minimum of ten years in prison, and a possible maximum sentence of life, followed by five years of supervised release, and up to $10 million in fines.
According to the criminal complaint, during the third week of April 2013, the Indian River County Sheriff’s Office (IRCSO), Multi-Agency Criminal Enforcement (MACE) Unit conducted an investigation, which led to the execution of a search warrant. On May 9, 2013, members of the DEA-Clandestine Laboratory Enforcement Team (CLET) executed a state search warrant at 1913 22nd Avenue, Vero Beach, Florida (residence). At the time of entry, Clinton Story, Edward McElhenny, Paul Richardson and Angela Story were at the residence and were detained. Clinton Story, Angela Story, and Paul Richardson admitted to purchasing pseudoephedrine, knowing it was for the manufacture of methamphetamine.
Edward McElhenny admitted that he has manufactured methamphetamine in the past. The DEA CLET team members searched the home and surrounding property. A search of the residence led to the discovery of pre-cursor chemicals and laboratory equipment which were utilized in and comprised a fully operational methamphetamine laboratory. A fingerprint specialist processed the scene and physical evidence, and discovered the fingerprints of Clinton Story, Edward McElhenny, and Kelly Maureen McCartney. McCartney admitted that she visited 1913 22nd Avenue on multiple occasions, and was aware of the methamphetamine manufacturing and use that took place at the residence. She also acknowledged that she purchased pseudoephedrine packets on multiple occasions with the knowledge that it was being used to manufacture methamphetamine.
Mr. Ferrer commended the investigative efforts of the DEA and the Indian River County Sheriff’s Office for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
A criminal complaint is only an accusation and a defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Federal Grand Jury Indicts Man in Connection with Alleged Diesel Fuel Theft at Military FacilityRead the Press Release
Thousands of dollars’ worth of diesel fuel allegedly stolen from W.Va. Guard facility in Red House
CHARLESTON – A federal grand jury sitting in Charleston indicted a Red House man on Tuesday in connection with an alleged theft scheme that took thousands of dollars’ worth of diesel fuel from a military facility located in Putnam County, announced U.S. Attorney Booth Goodwin. Charles Raymond Franklin, 59, of Red House, W.Va., was charged in a three-count indictment with conspiracy to steal and receive public property and conspiring to receive stolen government property.
The indictment alleges that on February 15, 2013, Franklin knowingly received approximately 196 gallons of diesel fuel that was stolen from the West Virginia National Guard’s Combined Support Maintenance Shop located in Red House.
The Naval Special Warfare Command (NSW), a component of the U.S. Navy, contracted with the West Virginia National Guard to run its Operational Stock (Ops Stock) program that stored and maintained equipment for naval operations at the facility in Red House. The heavy equipment that was maintained by the Guard as part of the Ops Stock program used diesel fuel.
The indictment further alleges that on February 19, 2013, Franklin received approximately 194 gallons of diesel fuel that was also stolen from the facility in Red House. Franklin allegedly purchased the stolen diesel fuel at a greatly discounted rate from an individual known to the grand jury.
Franklin faces up to five years on the receiving stolen property charge and up to 10 years in prison on each charge of conspiring to receive stolen government property, if convicted. Franklin also faces a $250,000 fine on each count.
The investigation was conducted by the FBI. Assistant United States Attorney Blaire Malkin is in charge of the prosecution.
Note: The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty
Click here to view a copy of the indictment
Ex-ceo of Imperial Valley Hospital Pleads Guilty to Fraud and EmbezzlementRead the Press Release
Richard Mendoza, the former Chief Executive Officer (“CEO”) of Pioneers Memorial Healthcare District (“PMHD”) in Brawley, California, pled guilty today to embezzling more than $90,000 from the Imperial Valley Hospital.
According to court documents, Mendoza served as CEO of PMHD from October 2001, until his termination in November 2011. Mendoza’s embezzlement activity was initially discovered by the Imperial Valley hospital in the fall of 2011, during an annual audit of expenses and disbursements. The FBI subsequently initiated an investigation that uncovered the extent of Mendoza’s embezzlement activity. According to court documents, while CEO, Mendoza submitted more than 30 fraudulent reimbursement requests for trainings, seminars and conferences that he never attended. As set forth in his plea agreement, Mendoza filled out registration forms indicating that he had paid for this training with his personal credit card, when in fact he had not. To conceal the fact that he had not actually paid for the conferences, Mendoza took advantage of his position as the hospital’s top executive and directed employees in PMHD’s Accounts Payable Department to reimburse his personal credit card account based only on these fraudulent registration forms (and without any additional proof of payment).
At the time he submitted each false reimbursement request, Mendoza knew that he had not registered for the medical conferences, was not planning to attend the medical conferences, and had not used his personal credit card to pay for the attendant registration costs. To the contrary, Mendoza would often be seen around the hospital on the dates he was supposedly attending these out-of-town conferences. For example, on one occasion Mendoza submitted a fraudulent reimbursement request for a medical conference in New York City, but instead attended a PMHD Board of Directors meeting in Brawley on the date of the conference. As part of his plea agreement, Mendoza agreed to pay more than $90,000 in restitution to the hospital.
United States Attorney Laura E. Duffy praised the hard work of the agents from the Federal Bureau of Investigation and emphasized her support for financial crime prosecutions: “Mr. Mendoza violated the trust of his employer and the people he served in the community. Today’s guilty plea is yet another example of our commitment to investigate and prosecute those who illegally use their position of trust to unlawfully enrich themselves.”
FBI Special Agent in Charge, Daphne Hearn, commented, “Today’s plea agreement is a direct result of the commitment and teamwork between the FBI and the U.S. Attorney’s Office to hold those accountable who use their position of trust to unjustly line their own pockets.”
Mendoza is scheduled to be sentenced on October 25, 2013, at 8:30 a.m. before U.S. District Judge John A. Houston.
DEFENDANT Case Number: 13cr2716-JAH Richard Mendoza SUMMARY OF CHARGESMail fraud, in violation of Title 18, United States Code, Section 1341 - Maximum penalties: 20 years in prison, $250,000 fine, term of supervised release of three years, restitution, forfeiture, and $100 special assessment.
INVESTIGATING AGENCYFederal Bureau of Investigation
Elmira Man Indicted on Gun ChargeRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Rochester has returned a single-count indictment charging Marques Cayne, 30, of Elmira, N.Y., with being an armed career criminal in possession of firearms and ammunition. The charge carries a mandatory minimum sentence of 15 years in prison, a maximum of life, a fine of $250,000.00, or both.
Assistant U.S. Attorney Charles E. Moynihan, who is handling the case, stated that according to the indictment, the defendant possessed two loaded semi-automatic handguns on January 4, 2013. Members of the New York State Department of Corrections and Community Supervision went to the defendant’s residence in Elmira to conduct a compliance check on the defendant, who was on parole supervision at the time. While there, officers, assisted by members of the Elmira Police Department, discovered the two handguns in the defendant’s bedroom.
The indictment is the culmination of an investigation on the part of Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Resident Agent in Charge, Rochester Field Office, Scott Heagney, and Resident Agent in Charge, Buffalo Field Office, Francis J. Christiano, members of the Elmira Police Department, under the direction of Chief Michael Robertson, and members of the New York State Department of Corrections and Community Supervision.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Eight Linked to Fraudulent Mortgage Brokerage in Ventura County That Generated Millions in Sales Arrested in Federal CaseRead the Press Release
VENTURA, California – Federal and local authorities this morning arrested eight individuals linked to a mortgage fraud scheme that filed loan applications on behalf of lower-income, primarily Spanish-speaking individuals, generating substantial loan fees and commissions and causing lending institutions to suffer millions of dollars in losses when homes went into foreclosure.
This morning’s arrests are the result of a grand jury indictment that charges the eight defendants in a conspiracy to commit bank fraud and wire fraud. The investigation, which was started by the Ventura County District Attorney’s Office, determined that members of the scheme generated dozens of mortgage loans for unqualified borrowers. The indictment specifically outlines a series of allegedly fraudulent loans worth more than $11 million.The federal investigation that resulted in the indictment unsealed this morning was conducted by the Federal Bureau of Investigation; the Federal Housing Finance Agency, Office of Inspector General; the U.S. Department of Housing and Urban Development, Office of the Inspector General; and the United States Secret Service.
The indictment details a scheme led by Camarillo resident Jose Garcia and run out of an Oxnard-based company called New Concepts Home Loans (NCHL), where members of the alleged conspiracy prepared mortgage applications that contained false information about borrowers’ income, employment and assets. As part of the scheme, according to the indictment, Jose Garcia’s wife and others obtained bogus “CPA letters” from tax preparers that falsely stated the mortgage applicants were engaged in a particular business.
The defendants in these cases generated huge commissions and fees through the mortgage application process – typically at least $10,000 per mortgage.
The victim lenders who suffered losses as a result of the alleged scheme include Washington Mutual Bank, Wells Fargo Bank, Countrywide Bank, IndyMac Bank, SunTrust Bank, World Savings Bank and JPMorgan Chase Bank.
“Jose Garcia and his cohorts are alleged to have lured unsophisticated borrowers with promises of putting them into homes they clearly could not afford,” said United States Attorney André Birotte Jr. “But this American dream quickly turned into a nightmare for these borrowers when they realized they could not afford their new homes. All the while, real estate professionals like Jose Garcia reaped huge profits from the fraudulent loans that they brokered.”District Attorney Gregory D. Totten stated: “These arrests for serious federal crimes illustrate the tenacity of state and federal law enforcement to continue our years-long effort to bring to justice those who perpetrated real estate fraud-based crimes against unsuspecting, often monolingual, victims in our communities.”
FBI Assistant Director in Charge Bill L. Lewis commented: “Mr. Garcia allegedly directed his workforce, including unlicensed individuals acting as realtors, to peddle the dream of home ownership in the poorest neighborhoods of Oxnard, where they easily found people eager to buy. This case and others were made based on the cooperative relationship among federal and local investigators working as a team to combat mortgage fraud in Ventura County.”The indictment charges:
Jose “Joe” Bautista Garcia, 46, of Camarillo, a real estate broker who in addition to NCHL owned Century 21 Premier Realty, who allegedly directed agents to go door-to-door and “cold call” unqualified borrowers in Ventura County;
Lucy Ann Garcia, Jose Garcia’s wife, 46, also of Camarillo, who co-owned NCHL;
Jose Fernando Murguia, 47, of Oxnard, a loan officer at NCHL;
Sesilia Garcia, one of Jose Garcia’s sisters, 30, of Oxnard, a loan officer at NCHL;
Lili Ayala Hernandez, 41, of Oxnard, a loan officer at NCHL;
Lidubina “Lido” Mendoza Perez, 41, of Moreno Valley, a loan officer who worked at NCHL’s office in Bakersfield;
Gregg Scott Quinn, 40, of Camarillo, a loan officer at NCHL; and
Cesar Rodriguez Azamar, 36, of Santa Paula, an employee of NCHL.
All of the defendants in this case face a statutory maximum sentence of 30 years in prison if they are convicted of the conspiracy count in the indictment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.The defendants arrested today will begin making their initial court appearances this afternoon in United States District Court in Los Angeles.
The investigation was conducted by the Federal Bureau of Investigation; the Ventura County District Attorney’s Bureau of Investigation; the Federal Housing Finance Agency, Office of Inspector General; the U.S. Department of Housing and Urban Development, Office of the Inspector General; and the United States Secret Service.
Release No. 13-098
Eagle Man Sentenced to over 17 Years in Prison for Theft from Retirement PlansRead the Press Release
Hutcheson Must Pay Fraud Victims More Than $5.3 Million in Restitution
BOISE – A federal judge this afternoon sentenced Matthew D. Hutcheson, 41, of Eagle, Idaho, to 210 months in prison, U.S. Attorney Wendy J. Olson announced. On April 15, 2013, a jury convicted Hutcheson of 17 counts of wire fraud. U.S. District Judge William Fremming Nielsen also ordered Hutcheson to serve three years of supervised release and pay $5,307,688 in restitution to the victims.
Hutcheson is a former trustee and fiduciary for the G Fiduciary Retirement Income Security Plan (the “G Fid Plan”) and the Retirement Security Plan & Trust (the “RSPT”). During the eight day trial, the government presented evidence that beginning in 2010, Hutcheson perpetrated schemes to defraud the G Fid and RSPT plans, and misappropriated over $5 million of plan assets.
The jury heard evidence that from January 2010 through December 2010, Hutcheson misappropriated just over $2 million of G Fid Plan assets for his personal use. On 12 occasions, Hutcheson directed the G Fid Plan record-keeper to wire transfer plan assets from the G Fid Plan account at Charles Schwab to bank accounts he controlled and to other bank accounts for his personal benefit. Hutcheson used these assets to extensively renovate his personal residence, including installing a pool, to repay personal loans, to purchase luxury automobiles, motorcycles, all-terrain vehicles, and a tractor, and for other personal expenses. When G Fid Plan clients, plan record-keepers, and others requested information about the location and status of the plan assets, Hutcheson misrepresented that they were safely invested.
The jury also heard evidence that in December 2010, Hutcheson misappropriated approximately $3,276,000 of RSPT Plan assets to pursue the purchase of the Tamarack Resort in Donnelly, Idaho, on behalf of a limited liability corporation he controlled, called Green Valley Holdings, LLC. In December 2010, Hutcheson directed the RSPT Plan record-keeper to wire transfer approximately $3 million from the RSPT Plan to an escrow account for the benefit of Green Valley Holdings, LLC. Hutcheson directed the RSPT Plan record-keeper to describe the transaction in plan records as an investment in a fixed income bank note. In reality, Hutcheson used the $3 million to purchase a bank note secured by a majority interest in the Osprey Meadows Golf Course and Lodge at the Tamarack Resort in the name of Green Valley Holdings, not the RSPT Plan. Hutcheson later obtained a $425,000 cash loan from a private lender in Virginia using the same bank note as collateral, and placing the lender above other creditors in case of default. When the RSPT Plan auditor questioned Hutcheson about the investment, Hutcheson told the auditor there was no plan investment in a fixed income bank note, and that he had “loaned” the money from the RSPT Plan to Green Valley Holdings. Hutcheson produced purported loan documents to the auditor, but they were fraudulent and forged. In addition, in December of 2010, Hutcheson directed the RSPT Plan record-keeper to wire transfer $275,000 from the RSPT Plan to a bank account he controlled. Hutcheson transferred $250,000 of this money to an escrow account at US Bank to demonstrate to the Tamarack Corporation's creditors that Green Valley Holding had the financial means to purchase the resort. Later, Hutcheson spent the money for personal purposes.
After approximately three hours of deliberation, the jury found Hutcheson guilty on all counts.
In announcing today’s sentence, Judge Nielsen made specific findings that Hutcheson defrauded more than 250 individual victims, used sophisticated means to commit his offenses, abused a position of private trust as a fiduciary and trustee for the plans, and willfully obstructed justice by committing perjury at trial and offering a fraudulent document into evidence.
“Mr. Hutcheson’s criminal conduct had many aggravating factors that required the firm sentenced imposed by the Court today,” said Olson. “Mr. Hutcheson placed his own personal interests and greed above the clients’ whose retirement interests he pledged to safeguard. This office will continue to take pension fraud very seriously and hold accountable those who seek personal gain from others’ hard work through fraud and deceit. I commend the federal law enforcement officers who conducted the thorough investigation and Assistant United States Attorney Ray Patricco for his outstanding prosecution of this case.”
“The defendant’s despicable conduct jeopardized the financial security of workers covered by these pension plans,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “He funded a life of luxury at the expense of hundreds of people who were just trying to save for retirement. This case is indicative of our close and continued partnership with fellow federal agencies to vigorously pursue those who abuse their positions of trust and commit crimes against employee benefit plan participants.”
“Matthew Hutcheson willfully defrauded more than 250 individual investors and abused his position as trustee of their retirement plans to divert $5.3 million for his personal use,” said FBI Salt Lake City Special Agent in Charge Mary Rook. “The FBI and its law enforcement partners are committed to investigating and prosecuting those who fund a luxurious lifestyle at the expense of hard-working, trusting investors. Some victims in these types of cases have their life savings tied up in fraudulent investments and never fully recover. We encourage the public to remain vigilant—check your investments; ask your investment manager hard questions; and report suspected fraud to the FBI.”
The case was investigated by the United States Department of Labor, Employee Benefits Security Administration, and the Federal Bureau of Investigation.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Eagle Butte Man Charged with Assault by Striking, Beating and WoundingRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man has been charged by Information with Assault by Striking, Beating and Wounding.
John Maynard, age 50, appeared before U.S. Magistrate Judge Mark A. Moreno on July 26, 2013, and pled not guilty to the charge.
The maximum penalty upon conviction is up to 1 year of custody, a $100,000 fine, or both; 1 year of supervised release; and $25 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to an alleged incident in July 2013 when Maynard struck the victim with a closed fist. The charge is merely an accusation and Maynard is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Maynard was remanded to the custody of the U.S. Marshals Service pending trial. The trial has been set for September 24, 2013.
District Man Pleads Guilty to Second-Degree Murder, Admits Setting Victim on Fire-Attack Took Place in June 2013 in Southeast Washington-Read the Press Release
WASHINGTON – Shawn Lewis, 41, of Washington D.C., pled guilty today to a charge of second-degree murder for killing a man in June 2013 by setting him on fire at an apartment building in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Lewis pled guilty in the Superior Court of the District of Columbia. Under terms of the plea agreement, the parties each agreed to recommend a sentence between 16 years and 24 years in prison. The Honorable Russell F. Canan scheduled sentencing for Oct. 18, 2013.
According to the government’s evidence, at about 6:25 p.m. on June 28, 2013, Lewis returned to the apartment building where he was living in the 1600 block of 21st Place SE. He then went to the back porch of the building, holding a lit piece of newspaper and a container of ignitable liquid. Lewis threw the liquid on the victim, Douglas Farley, 38, who was on the back porch. He ignited the liquid with the lit newspaper, engulfing Mr. Farley in flames. Lewis was arrested on the scene at about 9:25 that evening.
Mr. Farley was taken to the Washington Hospital Center, where he died on July 3, 2013. A post-mortem examination determined that Mr. Farley died as a result of complications from thermal and inhalation injuries sustained by the flames.
In announcing the plea, U.S. Attorney Machen praised the work of the detectives, officers, and crime scene technicians who investigated the case for the Metropolitan Police Department. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Debra Joyner, Victim/Witness Advocate Jennifer Clark, and Intelligence Specialist Sharon Johnson. Finally, he recognized the efforts of Assistant U.S. Attorneys Philip Selden, Kathryn Rakoczy, and Jonathan Kravis, who investigated and prosecuted the case.
13-269Deported Alien Charged with Illegally Re-entering U.S.Read the Press Release
PITTSBURGH, Pa. - An illegal alien found in Pittsburgh has been indicted by a federal grand jury in Pittsburgh on a charge of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named Luis Alberto Alvarez-Arguello, a/k/a Rosalio Martinez-Alvarez, a/k/a Rosalio Alvarez-Martinez, a/k/a Mario Martinez-Contreras, 28, a native of Mexico, as the sole defendant.
According to indictment, Luis Alberto Alvarez-Arguello, an alien, was formally removed from the United States by United States Immigration and Customs Enforcement on Jan. 14, 2011 and June 13, 2011. Luis Alberto Alvarez-Arguello was found to be illegally present in Pittsburgh on July 19, 2013, by the Port Authority Police.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. Defendant has been placed on detention.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The U.S. Immigration and Customs Enforcement and the Port Authority Police conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Cape Coral Man Fined $4,000 for Speeding in Manatee ZoneRead the Press Release
Fort Myers, Florida - U.S. Magistrate Judge Douglas N. Frazier sentenced Juergen H. Kreuzer (52, Cape Coral) yesterday to a fine of $4,000 for operating a vessel at 55 miles per hour in a posted and marked 25 mile per hour manatee protection zone. Kreuzer was operating his vessel on the Caloosahatchee River, near Shell Point. He pleaded guilty on July 16, 2013.
According to court documents, Kreuzer had seven prior convictions for manatee zone speeding violations. Kreuzer operates All Around Boats - a business in Cape Coral that is engaged in boat rentals, and fishing and boat tours.
This case was investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement. It was prosecuted by Assistant United States Attorney Jeffrey F. Michelland.
Cantarero-Sanchez Sentenced for Conspiracy to Transport Illegal AlienRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on July 31, 2013, Darwin Cantarero-Sanchez, 26, of Honduras, was sentenced by U.S. District Judge Patrick A. Conmy on a charge of conspiracy to transport illegal alien and a charge of improper entry by an alien. Cantarero-Sanchez pleaded guilty to the charges on May 7, 2013.
Judge Conmy sentenced Cantarero-Sanchez to serve one year and one day in federal prison on the charge of conspiracy to transport illegal alien and 117 days to serve concurrently on the charge of improper entry by an alien. Cantarero-Sanchez was ordered to pay a $110 special assessment to the Crime Victim’s Fund.
On April 6, 2013, at approximately 1:30 a.m., Cantarero-Sanchez and seven other individuals were apprehended approximately one half-mile south of the Sherwood, North Dakota, Port of Entry. All eight individuals had just illegally crossed the border into the United States without having been inspected or admitted by an immigration official.
Two of the subjects stated that they had paid Cantarero-Sanchez to smuggle them into the United States from Montreal, Quebec, Canada, to the Sherwood Port of Entry. Cantarero-Sanchez then led the group around the port of entry crossing and illegally into the United States.
The case was investigated by the United States Border Patrol (Portal and Bottineau), the Renville County Sheriff’s Department, the Bottineau County Sheriff’s Department, the Sherwood Police Department and the Royal Canadian Mounted Police.
Assistant U.S. Attorney David Hagler prosecuted the case.
Canadaigua Man Sentenced on Tax ChargesRead the Press Release
Rochester, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Richard Williams, of Canandaigua, N.Y., who was convicted of attempting to evade income tax for the year 2010, was sentenced to three years probation and ordered to pay $123,638 in restitution to the Internal Revenue Service by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Bradley E. Tyler, who handled the case, stated that the defendant was the owner and sole proprietor of Richard’s Paving. For the year 2010, Williams failed to report employee wages to the IRS by providing false Social Security Numbers (SSN’s) to various customers and by directing all of his customers to write checks to him personally. The defendant then cashed the checks at the customer’s bank instead of depositing the checks into a business bank account and provided false SSN’s to the banks.
This law enforcement action is part of 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.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of under the direction of Toni M. Weirauch, Special Agent in Charge.Cable TV Operator Pleads Guilty to Wire and Mail FraudRead the Press Release
The Defendant Unlawfully Retransmitted Satellite TV Programming To Over 550 Customers
BRYSON CITY, N.C. – A cable TV operator pleaded guilty today before U.S. Magistrate Judge Dennis L. Howell to wire fraud and mail fraud charges for fraudulently acquiring and unlawfully rebroadcasting DIRECTV satellite television programming to the customers of Highlands Cable Group, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Joining U.S. Attorney Tompkins in making today’s announcement is John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
According to the criminal indictment filed in April 2013, Ninian Ulysses Bond, II, 60, of Highlands, N.C., was the owner and principal operator of Highlands Cable Group, a company engaged in the business of providing cable TV programming to customers in Macon County, N.C. According to the indictment, from July 2002 to December 13, 2011, Bond devised and executed a fraudulent scheme to establish and maintain multiple DIRECTV residential and commercial lodging subscriber accounts for the purpose of fraudulently acquiring DIRECTV satellite TV systems. The fraudulent scheme enabled Bond to acquire and maintain over 30 DIRECTV integrated satellite receiver units and DIRECTV satellite access cards required to decode DIRECTV’s satellite TV signals. According to the indictment and today’s plea hearing, Bond used the fraudulently-acquired DIRECTV equipment to unlawfully retransmit DIRECTV’s satellite television signals to Highlands Cable Group’s subscribers. Court records show that as of December 2011, Highlands Cable Group had more than 550 customers.
According to court documents and court proceedings, Bond paid DIRECTV less than $500 per month to maintain the fraudulent DIRECTV subscriber accounts. Court records indicate that Bond received monthly payments from Highlands Cable Group’s subscribers who had been receiving DIRECTV’s TV programming. According to court records, the fraudulently-acquired DIRECTV television programming that was rebroadcast to Highlands Cable Group’s subscribers was valued at over $45,000 per month, and enabled Bonds and Highlands Cable Group to unfairly compete against other local cable TV companies. At the plea hearing, the government stated that the loss attributable to the fraudulent scheme is estimated at $4.5 million.
The defendant has been released on bond since May 2013. The wire fraud and mail fraud charge each carry a maximum of 20 years in prison and a $250,000 fine. A sentencing date has not been set yet.
The investigation was handled by the Federal Bureau of Investigation. This prosecution was handled by Assistant U.S. Attorneys Tom O’Malley and Ben Bain-Creed of the U.S. Attorney’s Office in Charlotte.
Bossier City Man Sentenced for Running an Internet Gambling OperationRead the Press Release
SHREVEPORT, La. –United States Attorney Stephanie A. Finley announced today thatTerry Lee Doty Jr., 34, of Bossier City, La., was sentenced by U.S. District Judge S. Maurice Hicks Jr., to three years of probation and was ordered to pay a $50,000 fine for operating an illegal internet sports gambling site.
Doty pleaded guilty in April 2013, to one count of transmission of wagering information, a federal felony offense. According to FBI testimony presented at the guilty plea, Doty was the local administrator for an internet sports gambling site based in Costa Rica. Doty had approximately 280 clients placing sports bets with him, one of which was an undercover FBI agent.
“Sports gambling on internet websites is no different than bookmaking operations run by traditional ‘pay phone’ bookies,” Finley stated. “Gambling on sporting events is strictly regulated, but unregulated internet sports books preclude any meaningful control of gambling and avoid compliance with the law. That is why it is important that we enforce federal gambling laws.”
The Federal Bureau of Investigation and the Louisiana State Police conducted the investigation. Special Assistant U.S. Attorney William J. Flanagan prosecuted the case.
Bernalillo, N.M., Woman Pleads Guilty to Defrauding Wal-Mart and Other Major RetailersRead the Press Release
ALBUQUERQUE – Veronica Benavidez, 38, of Bernalillo, N.M., pleaded guilty this morning to a federal wire fraud charge under a plea agreement with the U.S. Attorney’s Office.
During her plea hearing, Benavidez entered a guilty plea to a felony information charging her with wire fraud. The information alleged that from Jan. 2010 through Dec. 2010, Benavidez engaged in a scheme to defraud major retailers, primarily Wal-Mart stores located throughout the country and outside of New Mexico, by falsely claiming that she purchased merchandise from the stores which was mistakenly sent to other customers. Benavidez then requested and obtained refunds for merchandise that she had not purchased and to which she was not entitled. To perpetuate the scheme, Benavidez requested refunds in her own name and several others and requested that the refunds be sent to various locations in New Mexico, including Albuquerque and Rio Rancho, in the form of MoneyGram wire transfers and Wal-Mart pre-paid money cards. As a result of Benavidez’s illegal scheme, retailers transferred approximately $12,599.58 to Benavidez in New Mexico.
In her plea agreement, Benavidez admitted perpetuating the scheme described in the felony information. She also admitted using cell phones to contact the stores to fraudulently claim refunds. More specifically, Benavidez admitted using cell phones to make 26 calls to 26 stores between Jan. 12, 2010 and Dec. 31, 2010, and receiving approximately $12,599.58 in fraudulent refunds.
At sentencing, Benavidez faces a maximum possible sentence of 20 years in prison and a $250,000 fine. The plea agreement requires that Benavidez make full restitution to the victims of her criminal conduct, which is estimated at $39,331.70. Benavidez’s sentencing date has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and is being prosecuted by Assistant U.S. Attorney Mary L. Higgins.
-
Information
-
Attorney Charged with Participating in Extensive Insurance Fraud ConspiracyRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that a federal grand jury in New Haven has returned a nine-count indictment charging attorney JOSEPH P. HADDAD, 65, of Orange, with federal offenses related to his participation in an extensive insurance fraud scheme.
The indictment was returned on July 25, 2013 and was unsealed today. HADDAD appeared this afternoon before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport, entered a plea of not guilty and was released on a $150,000 bond.
This matter stems from “Operation Running Man,” a 14-month undercover fraud investigation headed by the Federal Bureau of Investigation. The investigation included the use of recordings of an undercover special agent meeting with HADDAD, various doctors and chiropractors in relation to auto-accident personal injury litigation.
As alleged in the indictment, HADDAD, a Bridgeport-based personal injury attorney, conspired with chiropractors and others to defraud several insurance companies by exaggerating the auto accident injuries of HADDAD’s clients, and the cost of their medical care, to justify larger monetary settlements with the insurance companies. As part of the scheme, the co-conspirators fabricated medical records, prescribed unnecessary pain medication, performed unnecessary chiropractic treatment, ordered and billed for diagnostic tests of questionable medical value, and overstated injuries or permanent partial disabilities that were allegedly caused by the accidents.
“This kind of blatant fraud drives up the cost of insurance for all people,” stated Acting U.S. Attorney Daly. “With the help of the FBI, the U.S. Attorney’s Office is committed to uncovering these schemes and prosecuting those who are the most responsible, especially corrupt attorneys and doctors who drive these schemes and profit the most in direct violation of their professional oaths.”
“The level of detail and orchestration alleged in this conspiracy to defraud automobile insurance companies is wrought with unadulterated greed and avarice,” stated FBI Special Agent in Charge Mertz. “As an attorney, Mr. Haddad is an officer of the court and, therefore, privileged and entrusted with upholding its laws and ethical canons. Instead, because of his selfish actions, Mr. Haddad is now a defendant in federal court and faced with some very serious charges.”
The indictment alleges that, between December 2006 and February 2010, HADDAD conspired in the scheme with Francisco R. Carbone, who had been licensed to practice medicine until his license was revoked by the State of Connecticut in March 2005, and with Dr. Mark Kirshner, who owned and operated two chiropractor offices in Bridgeport and one in Stamford.
As part of the scheme, it is alleged that HADDAD would pay “runners” to locate and deliver to him clients for his personal injury practice. Because state law barred attorneys from hiring runners in personal injury cases, HADDAD attempted to hide this practice by paying the runners in cash. Dr. Kirshner regularly met with HADDAD to provide him with thousands of dollars in cash and, in return, HADDAD reimbursed Kirshner with checks written from his business account. HADDAD often included on the checks false memo lines suggesting that the checks were for medical expenses incurred by his clients. During the course of the conspiracy, it is alleged that Kirshner gave HADDAD more than $100,000 in cash. HADDAD also paid runners with checks directly from his client trust account, often disguising these payments as “independent investigative services.”
The indictment further alleges that HADDAD regularly instructed clients to see Carbone for purported medical treatment, even though HADDAD was aware that Carbone had lost his medical license. Carbone provided HADDAD’s clients with prescription pain medication, even if the medication was not needed and, in reports, fabricated the clients’ injuries, medical conditions and permanent partial disability ratings. In multiple instances, Carbone did no medical examination at all. Carbone billed the victim insurance carriers in his name or in the name of another physician for services he allegedly rendered, and provided prescriptions, bills, medical reports and final reports to HADDAD, who submitted the documents to the victim carriers to support requests for settlement.
It is further alleged that HADDAD referred clients to Dr. Kirshner’s Bridgeport chiropractor offices, which operated under the name Health First Medical, P.C., and that Kirshner often permitted HADDAD to influence the course of patients’ medical treatments by acquiescing to HADDAD’s instructions that a patient receive more treatment and diagnostic tests despite the questionable need for both. Kirshner and other chiropractors at Health First, including Jennifer Netter, established a protocol to treat patients in HADDAD’s cases for six months, regardless of medical need, and would not resolve treatment of patients unless instructed to do so by HADDAD. Netter and others at Health First often falsified medical records by indicating that they had examined the patients when they had not, and by misrepresenting that patients’ pain complaints and other symptoms continued. After the six-month period, each patient would receive a permanent partial disability rating, regardless of the permanence of the medical condition. If a patient had received a permanency rating for a prior accident, the protocol was to give a higher or different disability rating for the present accident.
Kirshner also owned a diagnostic testing company, Midas Medical LLC, and instructed his employees to conduct Nerve Conduction Velocity (NCV) tests whenever a patient’s symptoms could potentially implicate testing, even though he knew the test results would not change the course of treatment. It is alleged that HADDAD and Kirshner arranged for Carbone to order the tests, believing that, if ordered by a doctor, the tests would be given greater weight by the victim insurance companies and increase the likelihood of higher settlement payments. It is further alleged that HADDAD summoned at least one chiropractor to his office so that Kirshner could explain that the chiropractor would receive a kickback of several hundred dollars for each referral of HADDAD’s clients for NCV testing. Kirshner’s office would provide to HADDAD a bill of approximately $2,000 for each NCV test, and HADDAD would submit the bills to the victim carriers as part of settlement discussions.
As disclosed during today’s court proceeding, more than 10 insurance carriers lost a total of approximately $2.5 million as a result of this fraud scheme.
The indictment charges HADDAD with one count of conspiracy to commit mail fraud and eight counts of mail fraud. If convicted, HADDAD faces a maximum term of imprisonment of 20 years on each count.
Carbone, Kirshner, Netter, two other chiropractors and a licensed doctor of osteopathic medicine have pleaded guilty to charges stemming from this scheme. Each awaits sentencing.
As to HADDAD, Acting U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation, with the assistance of the National Insurance Crime Bureau, the Metropolitan Property and Casualty Insurance’s Special Investigation Unit and the Travelers Insurance Company.
The case is being prosecuted by Assistant United States Attorneys Christopher W. Schmeisser and Robert M. Spector.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Attleboro Business Man Sentenced for Falsifying Results of Harzardous Material TestingRead the Press Release
BOSTON – The owner of a North Attleboro company that tests compressed gas cylinders was sentenced today in U.S. District Court in Worcester for falsifying the re-testing of thousands of cylinders.
Aaron Beauchesne, 37, of Attleboro Falls, was sentenced by U.S. District Judge F. Dennis Saylor IV to six months home confinement, followed by two years of probation and $77,953 in restitution. In May 2013, Beauchesne pleaded guilty to failing to test and falsifying the results of almost 6,000 compressed gas cylinders for numerous customers in the South Shore area.
Beauchesne was the sole owner of Beauchesne Fire Equipment which tested and certified fire extinguishers and other compressed gas cylinders, such as oxygen tanks, for public and private customers. Under the Federal Hazardous Materials Transportation Law, cylinders used to transport compressed gasses must be requalified periodically to determine the structural integrity of the cylinders and to identify dangerous or nonperforming cylinders. Beauchesne Fire Equipment was certified by the U.S. Department of Transportation as an approved requalification facility for retesting and requalifying compressed gas cylinders. Throughout 2011 and continuing through early 2012, Beauchesne frequently failed to conduct hydrostatic testing and/or instructed employees to forego the testing on thousands of compressed gas cylinders.
United States Attorney Carmen M. Ortiz and Theodore L. Doherty III, Special Agent in Charge of the U.S. Department of Transportation, Office of the Inspector General, Office of Investigations, made the announcement today. The case was prosecuted by Assistant U.S. Attorney S. Theodore Merritt of Ortiz’s Public Corruption Unit.
$956,590 Settlement with UPMC Resolves False Claims Act AllegationsRead the Press Release
PITTSBURGH, Pa. - The University of Pittsburgh Medical Center (“UPMC”) and a related joint venture, UPMC VNA Home Health (“UPMC Home Health”), have agreed to pay the United States $956,590 to settle False Claims Act allegations, United States Attorney David J. Hickton announced today.
The settlement results from a self disclosure by UPMC to the United States Attorney’s Office concerning referrals for home health services made from UPMC hospitals to UPMC Home Health. Based on information provided by UPMC, the United States alleged that it had civil claims against UPMC and UPMC Home Health resulting from Medicare billings for home health services that were not supported by a documented face-to-face encounter with a physician or authorized non-physician practitioner, as required by Medicare rules and regulations. The settlement resolves the matter without the filing of litigation.
This matter was investigated by the Office of Inspector General of the Department of Health and Human Services and the United States Attorney’s Office for the Western District of Pennsylvania. Assistant United States Attorney David Lew handled this matter on behalf of the United States.
Tuesday 30 July 2013
Wyeth Pharmaceuticals Agrees to Pay $490.9 Million for Marketing the Prescription Drug Rapamune for Unapproved UsesRead the Press Release
Wyeth Pharmaceuticals Inc., a pharmaceutical company acquired by Pfizer, Inc. in 2009, has agreed to pay $490.9 million to resolve its criminal and civil liability arising from the unlawful marketing of the prescription drug Rapamune for uses not approved as safe and effective by the U.S. Food and Drug Administration (FDA), the Justice Department announced today. Rapamune is an “immunosuppressive” drug that prevents the body’s immune system from rejecting a transplanted organ.
“FDA’s drug approval process ensures companies market their products for uses proven safe and effective,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “We will hold accountable those who put patients’ health at risk in pursuit of financial gain.”
The Federal Food, Drug and Cosmetic Act (FDCA) requires a company such as Wyeth to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. In 1999, Wyeth received approval from the FDA for Rapamune use in renal (kidney) transplant patients. However, the information alleges, Wyeth trained its national Rapamune sales force to promote the use of the drug in non-renal transplant patients. Wyeth provided the sales force with training materials regarding non-renal transplant use and trained them on how to use these materials in presentations to transplant physicians. Then, Wyeth encouraged sales force members, through financial incentives, to target all transplant patient populations to increase Rapamune sales.
“The FDA approves drugs for certain uses after lengthy clinical trials,” said Sanford Coats, U.S. Attorney for the Western District of Oklahoma. “Compliance with these approved uses is important to protect patient safety, and drug companies must only market and promote their drugs for FDA-approved uses. The FDA approved Rapamune for limited use in renal transplants and required the label to include a warning against certain uses. Yet, Wyeth trained its sales force to promote Rapamune for off-label uses not approved by the FDA, including ex-renal uses, and even paid bonuses to incentivize those sales. This was a systemic, corporate effort to seek profit over safety. Companies that ignore compliance with FDA regulations will face criminal prosecution and stiff penalties.”
Wyeth has pleaded guilty to a criminal information charging it with a misbranding violation under the FDCA. The resolution includes a criminal fine and forfeiture totaling $233.5 million. Under a plea agreement, which has been accepted by the U.S. District Court in Oklahoma City, Wyeth has agreed to pay a criminal fine of $157.58 million and forfeit assets of $76 million.
The resolution also includes civil settlements with the federal government and the states totaling $257.4 million. Wyeth has agreed to settle its potential civil liability in connection with its off-label marketing of Rapamune. The government alleged that Wyeth violated the False Claims Act, from 1998 through 2009, by promoting Rapamune for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs. These unapproved uses included non-renal transplants, conversion use (switching a patient from another immunosuppressant to Rapamune) and using Rapamune in combination with other immunosuppressive agents not listed on the label. The government alleged that this conduct resulted in the submission of false claims to government health care programs. Of the amounts to resolve the civil claims, Wyeth will pay $230,112,596 to the federal government and $27,287,404 to the states.
“Wyeth’s conduct put profits ahead of the health and safety of a highly vulnerable patient population dependent on life-sustaining therapy,” said Antoinette V. Henry, Special Agent in Charge, Metro-Washington Field Office, FDA Office of Criminal Investigations. “FDA OCI is committed to working with the Department of Justice and our law enforcement counterparts to protect public health.”
Pfizer is currently subject to a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General that it entered in connection with another matter in 2009, shortly before acquiring Wyeth. The CIA covers former Wyeth employees who now perform sales and marketing functions at Pfizer. Under the CIA, Pfizer is subject to exclusion from federal health care programs, including Medicare and Medicaid, for a material breach of the CIA, and the company is subject to monetary penalties for less significant breaches.
“We are committed to enforcing the laws protecting public health, taxpayers and government health programs, and to promoting effective compliance programs,” said Daniel R. Levinson, Inspector General, Department of Health and Human Services. “Our integrity agreement with Pfizer, which acquired Wyeth, includes required risk assessments, a confidential disclosure program, and auditing and monitoring to help prospectively identify improper marketing.”
The civil settlement resolves two lawsuits pending in federal court in the Western District of Oklahoma 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 share in any recovery. The first action was filed by a former Rapamune sales representative, Marlene Sandler, and a pharmacist, Scott Paris. The second action was filed by a former Rapamune sales representative, Mark Campbell. The whistleblowers’ share of the civil settlement has not been resolved.
"The success obtained in this case is an excellent example of how we address the threats to our nation’s health care system; the importance of the public reporting of fraud, waste, or abuse; and the significant results that can be obtained through multiple agencies cooperating in investigations,” said James E. Finch, Special Agent in Charge of the Oklahoma City Division of the FBI.
The criminal case was handled by the U.S. Attorney’s Office for the Western District of Oklahoma (USAO) and the Justice Department’s Civil Division, Consumer Protection Branch. The civil settlement was handled by USAO and the Justice Department’s Civil Division, Commercial Litigation Branch. The Department of Health and Human Services’ (HHS) Office of Counsel to the Inspector General; the HHS Office of General Counsel, Center for Medicare and Medicaid Services; the FDA’s Office of Chief Counsel; and the National Association of Medicaid Fraud Control Units. These matters were investigated by the FBI; the FDA’s Office of Criminal Investigation; HHS’ Office of Inspector General, Office of Investigations and Office of Audit Services; the Defense Criminal Investigative Service; the Office of Personnel Management’s Office of Inspector General and Office of Audit Services; the Department of Veterans’ Affairs’ Office of Inspector General; and TRICARE Program Integrity.
Except for conduct admitted in connection with the criminal plea, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Sandler et al v. Wyeth Pharmaceuticals, Inc., Case No. 05-6609 (E.D. Pa.) and United States ex rel. Campbell v. Wyeth, Inc., Case No. 07-00051 (W.D. Okla.).
Wyeth Pharmaceuticals Agrees to Pay $490.9 Million for Marketing the Prescription Drug Rapamune for Unapproved UsesRead the Press Release
Oklahoma City – Wyeth Pharmaceuticals, Inc., a pharmaceutical company acquired by Pfizer, Inc. in 2009, has agreed to pay $490.9 million to resolve its criminal and civil liability arising from the unlawful marketing of the prescription drug Rapamune for uses not approved as safe and effective by the U.S. Food and Drug Administration (FDA), the Justice Department announced today. Rapamune is an "immunosuppressive" drug that prevents the body’s immune system from rejecting a transplanted organ.
"The FDA approves drugs for certain uses after lengthy clinical trials," said Sanford Coats, U.S. Attorney for the Western District of Oklahoma. "Compliance with these approved uses is important to protect patient safety, and drug companies must only market and promote their drugs for FDA-approved uses. The FDA approved Rapamune for limited use in renal transplants and required the label to include a warning against certain uses. Yet, Wyeth trained its sales force to promote Rapamune for off-label uses not approved by the FDA, including ex-renal uses, and even paid bonuses to incentivize those sales. This was a systemic, corporate effort to seek profit over safety. Companies that ignore compliance with FDA regulations will face criminal prosecution and stiff penalties."
"FDA’s drug approval process ensures companies market their products for uses proven safe and effective," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. "We will hold accountable those who put patients’ health at risk in pursuit of financial gain."
The Federal Food, Drug and Cosmetic Act (FDCA) requires a company such as Wyeth to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or "off-label" uses until the company receives FDA approval for the new intended uses. In 1999, Wyeth received approval from the FDA for Rapamune use in renal (kidney) transplant patients. However, the information alleges, Wyeth trained its national Rapamune sales force to promote the use of the drug in non-renal transplant patients. Wyeth provided the sales force with training materials regarding non-renal transplant use and trained them on how to use these materials in presentations to transplant physicians. Then, Wyeth encouraged sales force members, through financial incentives, to target all transplant patient populations to increase Rapamune sales.
Wyeth has pled guilty to a criminal information charging it with a misbranding violation under the FDCA. The resolution includes a criminal fine and forfeiture totaling $233.5 million. Under a plea agreement, which has been accepted by the U.S. District Court in Oklahoma City, Wyeth has agreed to pay a criminal fine of $157.58 million and forfeit assets of $76 million.
The resolution also includes civil settlements with the federal government and the states totaling $257.4 million. Wyeth has agreed to settle its potential civil liability in connection with its off-label marketing of Rapamune. The government alleged that Wyeth violated the False Claims Act, from 1998 through 2009, by promoting Rapamune for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs. These unapproved uses included non-renal transplants, conversion use (switching a patient from another immunosuppressant to Rapamune) and using Rapamune in combination with other immunosuppressive agents not listed on the label. The government alleged that this conduct resulted in the submission of false claims to government health care programs. Of the amounts to resolve the civil claims, Wyeth will pay $230,112,596 to the federal government and $27,287,404 to the states.
"Wyeth’s conduct put profits ahead of the health and safety of a highly vulnerable patient population dependent on life-sustaining therapy," said Antoinette V. Henry, Special Agent in Charge, Metro-Washington Field Office, FDA Office of Criminal Investigations. "FDA OCI is committed to working with the Department of Justice and our law enforcement counterparts to protect public health."
Pfizer is currently subject to a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General that it entered in connection with another matter in 2009, shortly before acquiring Wyeth. The CIA covers former Wyeth employees who now perform sales and marketing functions at Pfizer. Under the CIA, Pfizer is subject to exclusion from federal health care programs, including Medicare and Medicaid, for a material breach of the CIA, and the company is subject to monetary penalties for less significant breaches.
"We are committed to enforcing the laws protecting public health, taxpayers and government health programs, and to promoting effective compliance programs," said Daniel R. Levinson, Inspector General, Department of Health and Human Services. "Our integrity agreement with Pfizer, which acquired Wyeth, includes required risk assessments, a confidential disclosure program, and auditing and monitoring to help prospectively identify improper marketing."
The civil settlement resolves two lawsuits pending in federal court in the Western District of Oklahoma 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 share in any recovery. The first action was filed by a former Rapamune sales representative, Marlene Sandler, and a pharmacist, Scott Paris. The second action was filed by a former Rapamune sales representative, Mark Campbell. The whistleblowers’ share of the civil settlement has not been resolved.
"The success obtained in this case is an excellent example of how we address the threats to our nation’s Health Care System; the importance of the public reporting of fraud, waste, or abuse; and the significant results that can be obtained through multiple agencies cooperating in investigations," said James E. Finch, Special Agent in Charge of the Oklahoma City Division of the Federal Bureau of Investigation.
The criminal case was handled by the U.S. Attorney’s Office for the Western District of Oklahoma (USAO) and the Justice Department’s Civil Division, Consumer Protection Branch. The civil settlement was handled by USAO and the Justice Department’s Civil Division, Commercial Litigation Branch. The Department of Health and Human Services’ (HHS) Office of Counsel to the Inspector General; the HHS Office of General Counsel, Center for Medicare and Medicaid Services; the FDA’s Office of Chief Counsel; and the National Association of Medicaid Fraud Control Units. These matters were investigated by the Federal Bureau of Investigation; the FDA’s Office of Criminal Investigation; HHS’ Office of Inspector General, Office of Investigations and Office of Audit Services’ the Defense Criminal Investigative Service; the Office of Personnel Management’s Office of Inspector General and Office of Audit Services; the Department of Veterans’ Affairs’ Office of Inspector General; and TRICARE Program Integrity.
Except for conduct admitted in connection with the criminal plea, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Sandler et al v. Wyeth Pharmaceuticals, Inc., Case No. 05-6609 (E.D. Pa.) and United States ex rel. Campbell v. Wyeth, Inc., Case No. 07-00051 (W.D. Okla.). Pfizer cooperated with the government’s investigation.
This case was prosecuted by United States Attorney Sanford C. Coats and Assistant U.S. Attorneys Vicki Zemp Behenna and H. Lee Schmidt.
Woodinville, Washington Company and Owner Plead Guilty to Violating Arms Export Control Act and Wire FraudRead the Press Release
to Taiwan
A Woodinville, Washington based company and its owner pleaded guilty today in U.S. District Court in Seattle to violating the Arms Export Control Act and wire fraud, announced U.S. Attorney Jenny A. Durkan. The company, PRECISION IMAGE CORPORATION, is operated by owner, CHIH-KWANG HWA, out of his Woodinville home. HWA obtained contracts to supply circuit boards to the U.S. Navy, by falsely claiming the boards would be manufactured in the United States. Instead HWA illegally sent restricted information to a company in Taiwan for the boards to be manufactured there. The company faces a fine of up to $1,000,000 and HWA faces up to 20 years in prison when sentenced by U. S. District Judge James. L. Robart on October 28, 2013.
“Our national security depends upon protecting our military systems and their specifications. Going ‘on the cheap,’ gave this defendant an unfair advantage over other suppliers and risked our security,” said U.S. Attorney Jenny A. Durkan. “Protecting our military technical data and enforcing our export restrictions are critical priorities of the U.S. Attorney’s Office.”
According to the charging information and the plea agreements in the case, between 2009 and 2011, HWA obtained contracts worth $180,034 to supply circuit boards to the U.S. Navy. The Navy supplied technical data to PRECISION IMAGE that contained the technical specifications for the circuit boards. This technical data was designated on the United States Munitions List, International Traffic in Arms Regulations. As a result, this technical data could not legally be transmitted outside the United States without a license from the U.S. State Department. CHIH-KWANG HWA knew about this restriction at the time he received the technical data from the Navy. HWA did not get the appropriate licenses, and sent the restricted data to the Taiwan manufacturer. One of the transmissions occurred in September 2011, and the Taiwanese manufactured circuit boards were later provided to the Navy. In addition, many of the contracts awarded to HWA were set aside for companies that promised to manufacture the boards in the United States. HWA falsely represented to the Navy in connection with these contracts that the boards were being manufactured in the United States, when instead they were being manufactured in Taiwan.
“U.S. export controls are in place to keep sensitive technology from falling into the hands of our nation's enemies,” said Brad Bench, special agent in charge of HSI Seattle. “One of HSI's highest priorities is to prevent illicit procurement networks, terrorist groups, and hostile nations from illegally obtaining military items and controlled dual-use technology.”
Under the terms of the plea agreement, prosecutors will recommend the company pay a $300,000 fine and HWA serve a sentence within the anticipated guidelines range of 15-21 months in prison. Judge Robart is free to accept or reject these recommendations at the time of sentencing.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Naval Criminal Investigative Service. The case is being prosecuted by Assistant United States Attorneys Todd Greenberg and Thomas Woods.
Press contact for the U.S. Attorney’s Office is Emily Langlie at (206) 553-4110 or [email protected].Woman Sentenced for Stealing Dead Father's Social Security BenefitsRead the Press Release
PHILADELPHIA - Sophia Beltz, 55, of Philadelphia, PA was sentenced today to nine months in prison for the theft of $172,133 in government funds. Beltz stole Social Security Administration Retirement Insurance Benefits intended for her father who had died in February 1997. Beltz carried out her fraud scheme until it was discovered in August 2012. She pleaded guilty on April 30, 2013. U.S. District Court Judge Legrome D. Davis noted that Beltz collected the funds every month for over 15 years which amounted to approximately 180 fraudulently collected checks.
In addition to the prison term, Beltz must pay restitution to the Social Security Administration in the amount of $172,133 and she must serve three years of supervised release following her prison term.
The case was investigated by the Social Security Administration, Office of Inspector General and was prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Weslaco Man Sentenced for Carjacking Woman and Four ChildrenRead the Press Release
McALLEN, Texas - Luis Armando Garza Jr., 31, of Weslaco, has been ordered to prison following his conviction for carjacking and use of a firearm during a crime of violence, United States Attorney Kenneth Magidson announced today. Garza pleaded guilty Feb. 27, 2013.
Today, U.S. District Judge Micaela Alvarez sentenced Garza to 139 months in federal prison followed by five years of supervised release and ordered restitution to the victims.
The conviction stems from Garza’s armed carjacking of a minivan from a woman and four children on Nov. 25, 2012. The evidence presented during the hearing today showed that a Mexican National offered to pay Garza $2,000 to steal a vehicle he could take to Mexico. Once the Mexican National provided him with the handgun, Garza approached a minivan while it was parked at a Weslaco convenience store. Without warning, Garza pointed the weapon at the owner while demanding she and the children, ranging from 12 to 15 years of age, exit the vehicle. Once they complied with his demands, Garza stole the family vehicle.
In handing down the sentences, Judge Alvarez noted the tremendous amount of harm he had inflicted by pointing his weapon at a mother and her terrified children. She referenced the financial and emotional distress the victims continue to suffer from the Garza’s crime. Moreover, Judge Alvarez expressed her concern for the deliberate manner in which the defendant committed the offense as well as his lengthy and violent criminal history.
Garza will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated by the FBI with assistance from the Weslaco Police Department. The case is being prosecuted by Assistant United States Attorney Grady J. Leupold.
Waterloo Man Pleads Guilty to Robbing Bank and Assaulting A CustomerRead the Press Release
A man who robbed the Farmer’s Savings Bank in Frederika, Iowa, and pistol whipped a bank customer during the robbery, pled guilty today in federal court in Cedar Rapids.
Steven Vandewalker, 38, from Waterloo, Iowa, was convicted of one count of bank robbery and using a dangerous weapon to assault another person during the course of the robbery.
In a plea agreement, Vandewalker admitted he entered the Farmer’s Savings Bank in Frederika around 12:30 p.m. on October 23, 2012, carrying a handgun. Vandewalker was wearing a baseball cap and a mask covering the bottom of his face. After entering the bank, Vandewalker went into an office where a bank employee and a customer were talking and yelled at the two to get on the floor. Vandewalker then hit the customer in the face with the handgun, causing the customer to fall to the floor. Vandewalker then went behind the teller counter and had a teller give him cash from the drawers and the bank safe. Vandewalker then fled the bank with more than $36,000. On October 26, 2012, officers searched Vandewalker’s home in Waterloo, finding $26,000 in cash and a handgun.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Vandewalker remains detained pending sentencing. Vandewalker faces a possible maximum sentence of 25 years’ imprisonment, a $250,000 fine, a $100 special assessment, and 5 years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the Iowa Division of Criminal Investigation, the Bremer County Sheriff’s Office, the Buchanan County Sheriff’s Office, the Waterloo Police Department, and the Federal Bureau of Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-2010.
Violent Robber Sentenced in White Plains Federal Court to Life in Prison for Murder in NewburghOf Tomas AlmodovarRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that GEORGE SQUIRE was sentenced today in White Plains federal court to life in prison for his murder of Tomas Almodovar on March 24, 2012. SQUIRE shot and killed Almodovar while SQUIRE was robbing Almodovar in the lobby of 5 City Terrace, Newburgh, New York. On September 5, 2012, SQUIRE was indicted in this district for (1) committing a Hobbs Act Robbery, in violation of Title 18, United States Code, Section 1951; and (2) causing the death of Almodovar by discharging a firearm during a robbery, in violation of Title 18, United States Code, Section 924(j). On February 27, 2013, SQUIRE pled guilty to both counts in the Indictment. United States District Judge Kenneth M. Karas presided over this case.
Manhattan U.S. Attorney Preet Bharara said: “This senseless murder is yet another sad example of what happens when men who use and carry guns commit crimes. Now, a wife is without a husband, and three young children have lost their father. This Office’s ongoing commitment to rooting out the scourge of gang members who commit violent crimes in areas like Newburgh will not stop.”
According to the statements made at sentencing and documents filed in the case:
SQUIRE robbed Almodovar at gunpoint and during the robbery, SQUIRE shot and killed Almodovar. Following the murder, SQUIRE bragged to a friend that SQUIRE had been waiting inside 5 City Terrace to rob customers of a marijuana business operating on the second floor of the building, and that SQUIRE approached Almodovar with a .25 caliber firearm as Almodovar was coming downstairs from the second floor apartment. SQUIRE decided to kill Almodovar because Almodovar brushed away SQUIRE’s gun, and SQUIRE described watching Almodovar stumble out of the building onto Broadway before falling down from the gunshot wound. SQUIRE was 19 years old at the time he killed 26-year old Almodovar. SQUIRE and Almodovar had never met before that night. The victim was not involved in drug trafficking activity, but was an occasional user of marijuana who made purchases for personal use.
Tomas Almodovar was married, employed and the father of three young children. On the night he was killed, Almodovar had been on a date with his wife and they had just returned from dinner and a movie. A courtroom full of Almodovar’s family members and friends attended the sentencing, including his parents and widow. Several family members submitted letters to the Court or spoke at the sentencing about Almodovar’s life-long dedication to his family.
This case is being prosecuted by the White Plains Office and the Violent Crimes Unit. Assistant United States Attorneys Parvin Moyne and Andrew Bauer are in charge of the prosecution.
SquireGeorge.Indictment
University Place Tax Preparer Sentenced for Tax EvasionRead the Press Release
A long-time University Place, Washington tax accountant and tax preparer was sentenced today in U.S. District Court in Tacoma to two years of probation and $146,226 in restitution for tax evasion. JOSEPH J. DORIA, 70, pleaded guilty to falsifying his tax returns in 2007, 2008, and 2009. DORIA submitted fraudulent tax returns that understated his income and overstated his expenses. DORIA blamed a gambling addiction for his decision to cheat on his taxes. At sentencing U.S. District Judge Benjamin H. Settle made treatment with Gamblers Anonymous part of DORIA’s probationary sentence.
According to records filed in the case, the fraud came to light during an IRS audit of DORIA’s returns in 2011. The total tax loss over the three year period was $146,226.
Prosecutors noted that as a respected tax accountant and tax preparer for more than 35 years, DORIA knew the wrongful nature of his conduct. “Notably, he also knew that there were alternatives to falsifying these tax returns. Based on his background in tax preparation and accounting, Mr. Doria no doubt was fully aware that if he did not have the ability to pay his taxes, he could have approached the Internal Revenue Service and sought relief. Mr. Doria could have sought an offer and compromise to provide him with more time to pay his taxes and/or a reduction in his total tax liability. Despite this and other options, Mr. Doria chose the most dishonest solution to his problem: he falsified his tax returns.”
The case was investigated by the Internal Revenue Service Criminal Investigations (IRS-CI) and was prosecuted by Assistant United States Attorney Lawrence Lincoln.
Press contact for the U.S. Attorney’s Office is Emily Langlie at (206) 553-4110 or [email protected].
USW Political Director Sentenced and Fined for Embezzling Union FundsRead the Press Release
PITTSBURGH, Pa. - A resident of Cranberry Township, Pa., has been sentenced in federal court to 24 months probation and a $2,000 fine on his conviction of union embezzlement, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Charles Rocha, 44.
According to information presented to the court, Rocha, the former Director of the Political Department of the United Steelworkers International Union (USW), engaged in misuse of a USW credit card and falsification of semi-monthly USW voucher entries during the period from January of 2008 until June of 2009.
Prior to imposing sentence, Judge Hornak stated that Mr. Rocha had a "steep, sharp and successful climb from the floor of a tire plant in Texas to the top" of the USW; that the defendant has recognized the harm that he brought on himself and his family; and that this prosecution against a senior member of one of the largest labor organizations in the world would help ensure that union dues are used only for proper purposes.
Assistant United States Attorney Leo M. Dillon prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Labor, Office of Labor Management Standards for the investigation leading to the successful prosecution of Rocha.
Two Individuals Appear in Federal Court on Drug-Related ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
MARTINSBURG, WEST VIRGINIA - United States Attorney William J. Ihlenfeld, II
announced that the following individuals recently appeared in Federal Court in Martinsburg.CHRISTOPHER MICHAEL ROOF, age 35, of Atlanta, Georgia, was sentenced to 24 months imprisonment to be followed by three years of supervised release for the “Possession with Intent to Distribute Cocaine Base and Cocaine Hydrochloride” in Martinsburg, West Virginia. ROOF was remanded to the custody of the United States Marshal pending designation to a Federal institution.
This case was prosecuted by Assistant United States Attorney Stephen L. Vogrin and investigated by the Martinsburg Police Department.
DORIAN MARCELL WILSON, age 25, of Martinsburg, entered a plea of guilty to “Possession with Intent to Distribute Crack Cocaine.” WILSON, who is in custody pending sentencing, faces up to 20 years imprisonment and a $1,000,000 fine.
This case was prosecuted by Assistant United States Attorney Brandon S. Flower and investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.
Two Florida Residents Convicted on Bribery ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
CLARKSBURG, WEST VIRGINIA - Two individuals entered pleas of guilty in United
States District Court in Clarksburg on July 30, 2013, before Magistrate Judge John S. Kaull.United States Attorney William J. Ihlenfeld, II, announced that:
JASON NOEL SQUIRES, age 28, and NIKOLE MONIQUE WATKINS, age 24, entered pleas of guilty to Conspiracy to Commit Bribery of a Public Official and Bribery of a Public Official. Between January 1, 2012, and August 14, 2012, SQUIRES, a correctional officer at FCI Gilmer, smuggled tobacco into the prison on multiple occasions. SQUIRES provided the tobacco to inmates. In exchange, the inmates arranged to have contacts outside of the prison send money to WATKINS, who was the girlfriend of SQUIRES, via Western Union and Postal money grams. WATKINS was aware that SQUIRES was smuggling contraband to inmates. SQUIRES and WATKINS received approximately $40,000 for the tobacco that SQUIRES smuggled into the prison.
SQUIRES and WATKINS, who are free on bond pending sentencing, face up to 20 years imprisonment and a $500,000 fine.
This case was prosecuted by Assistant United States Attorney Brandon S. Flower and investigated by the United States Department of Justice Office of Inspector General, with assistance from the Special Investigative Services Unit at FCI Gilmer.
Two Bridgeport Men Charged with Drug-related MurderRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in New Haven has returned an eight-count indictment charging JOHNNIE JEFFERSON, also known as “Jeezy,” 23, and TRUMAINE HEARST, also known as “Man,” 19, both of Bridgeport, with murder, robbery, drug and firearms offenses related to the October 2012 death of Dawayne Cobb in Bridgeport.
On October 10, 2012, at approximately 6:20 p.m., the body of Dawayne Cobb was discovered in the driver seat of an idling vehicle in the vicinity of 220 Sunshine Circle in Bridgeport. Cobb had gunshot wounds in his shoulder and abdomen.
The indictment alleges that, on October 10, 2012, JEFFERSON and HEARST drove together to Sunshine Circle in order to meet Cobb, murdered him and stole marijuana from him. JEFFERSON and HEARST transported the stolen marijuana to a Bridgeport residence and subsequently distributed it amongst themselves and others.
The indictment charges JEFFERSON and HEARST with causing the death of Dawayne Cobb through the use of a firearm. This charge carries a mandatory lifetime term of imprisonment or death, should the government seek the death penalty in this matter.
The indictment also charges both defendants with conspiracy to use a firearm during and in relation to crimes of violence and drug trafficking crimes, use of a firearm during and in relation to crimes of violence, conspiracy to interfere with commerce by robbery, interference with commerce by robbery, conspiracy to possess with intent to distribute marijuana, possession with intent to distribute marijuana, and use of a firearm during and in relation to drug trafficking crimes.
The indictment was returned on July 23, 2013. JEFFERSON and HEARST are currently in state custody.
This matter is being investigated by Bridgeport Police Department and the FBI’s Bridgeport Safe Streets Task Force, which includes the Bridgeport, Norwalk, Trumbull and Fairfield Police Departments. The case is being prosecuted by Assistant United States Attorneys Tracy Dayton and Rahul Kale.
Acting U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Three Brook Park Men Indicted for $2 Million Food-Stamp FraudRead the Press Release
Three Brook Park men were indicted for defrauding the Supplemental Nutrition Assistance Program (formerly the Food Stamp Program) out $2 million from four Cleveland stores where they accepted food stamps for ineligible items such as beer and cigarettes, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Saed (Sam) Wahdan, 41, his brother, Maher (Mario) Wahdan, 42, and Nidal Jaber, 45, were each indicted on one count of conspiracy to commit food stamp fraud, one count of food stamp fraud and two counts of unlawful redemption of food stamps. Maher Wahdan faces an additional count of theft of public funds.
“The food stamp program has provided nutritious food to thousands of hungry families over the years,” Dettelbach said. “We will continue to work to recover money stolen from the program and eradicate waste, fraud and abuse of government programs.”
Between January 2008 and March 2012, the defendants and others conspired to commit more than $2 million in food-stamp fraud through four of their businesses: One Stop Beverage, 5105 Franklin Blvd.; Bridge Deli and Beverage, 4700 Bridge Ave.; Franklin Beverage and Deli, 4719 Franklin Blvd., and Scott Food Mart, 951 Linn Drive.
The Wahdans owned and operated all four stores but put them in the names of other people to conceal the fact that Saed Wahdan had a prior conviction for food stamp trafficking and Maher Wahdan had a prior conviction for impersonating an officer – both of which precluded their participation in the food stamp program, according to the indictment.
The defendants used their businesses to exchange customer food stamps for cash and other unauthorized items, including beer and cigarettes. They also purchased food stamp cards from customers and used them at other grocery locations to purchase inventory for their stores and for their personal use, according to the indictment.
The indictment seeks to forfeit property derived from the proceeds of the criminal conduct of the Wahdans, including the following Cleveland properties: 9604 Dennison Ave.; 3353 West 44th Street; 3374 West 130th Street; 1452 West 75th Street and 951 Linn Drive.
This case is being prosecuted by Assistant U.S. Attorneys Christos N. Georgalis, Vasile Katsaros and James Morford following an investigation by the U.S. Department of Agriculture, Office of Inspector General-Investigations and Department of Homeland Security, Homeland Security Investigations.
If convicted, the defendants’ sentences will be determined by the court after a review of factors unique to the case, including the defendants’ prior criminal record, if any, the defendants’ role in the offense, and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Arrested as Part of Operation Cross CountryRead the Press Release
Memphis, TN – Trenton Mitchell, 23; Rodney Armstrong, 22; and Charlisa Wright, 18; have
# # # #
been charged in a criminal complaint with child prostitution, announced U.S. Attorney Edward
L. Stanton III.
Operation Cross Country was a nationwide law enforcement sweep led by the Federal Bureau of
Investigation targeting child sex-trafficking. According to the complaint filed in the Western
District of Tennessee, the operation involved infiltrating ads listed on backpage.com in the
Memphis metropolitan area. The operation resulted in the recovery of a 14-year-old runaway
who had been missing since June 20, 2013, who was subjected to prostitution and physical abuse
at the hands of the accused.
All three defendants are in custody and awaiting an initial appearance. This case was
investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Debra Ireland is
representing the government.
The charges and allegations contained in this complaint are merely accusations, and the
defendants are considered innocent unless and until proven guilty.Texas Man Sentenced in Identity Theft CaseRead the Press Release
Gulfport, Miss. – Mikel Chad Adams, 42, of Dallas, Texas, was sentenced today by U.S. District Judge Sul Ozerden to serve 120 months in prison followed by three years of supervised release for producing, using, and trafficking in counterfeit credit cards, announced U.S. Attorney Gregory K. Davis and Allen W. Bryant, Resident Agent in Charge, U.S. Secret Service. Adams was also ordered to pay $16,526 in restitution to the credit card companies.
Adams was arrested after attempting to use a fraudulent credit card at a gas station in Pass Christian, Mississippi. A search of Adams and his car revealed several sheets of paper listing debit and credit card numbers, as well as sheets of laminate paper. Some of the laminate paper had account numbers printed on them that matched the account numbers found on the sheets of paper. Adams would affix the laminate with the credit card account numbers to blank credit cards and create the fraudulent cards to make purchases. The investigation revealed that the account numbers were actual numbers belonging to two major banks. A total of 916 account numbers from the two issuing banks were found, and approximately 638 true account holder victims were identified and notified that their account numbers had been compromised.
Prior to his guilty plea in the counterfeit credit card case, Adams failed to appear as required under the terms and conditions of his bond and was thereafter arrested on a bench warrant. He has since been indicted and pled guilty for failure to appear and is set for sentencing in that case on August 14, 2013.
This case was investigated by the United States Secret Service and was prosecuted by Assistant U.S. Attorney Ruth Morgan.
###If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Statement by the Attorney General on Senate Vote to Confirm James Comey as FBI DirectorRead the Press Release
U.S. Attorney General Eric Holder released the following statement Monday night after the U.S. Senate voted 93-1 to confirm James Comey as the next director of the Federal Bureau of Investigation:
“Jim Comey is a dedicated public servant who brings an impeccable sense of judgment, a commitment to innovative methods and tools, and a lifetime of experience to a role that is critical to the protection of our nation and its citizens. I’ve known Jim for almost 20 years – and I have every confidence that, as he assumes leadership of the Federal Bureau of Investigation, he will continue to uphold the standards of excellence and integrity that the FBI’s outgoing Director, Bob Mueller, helped to establish. As a seasoned prosecutor, a proven leader, and a faithful servant of the American people, I am confident that Jim will be a superb FBI Director. I applaud the U.S. Senate for approving his nomination. And I look forward to working with him – and with all of the brave men and women who serve the FBI – to continue protecting the American people, ensuring our nation’s security, and promoting the rule of law while upholding our most treasured values.”
South Jersey Man Sentenced to One Year in Prison for Stealing Father’s Benefit Checks for 22 Years After His DeathRead the Press Release
CAMDEN, N.J. – A South Jersey man who hid his father’s death from authorities to continue getting his Social Security payments was sentenced today to 12 months in prison for stealing more than $200,000 in retirement savings benefits paid out to the deceased, U.S. Attorney Paul J. Fishman announced.
Michael Shelton, 66, of Pennsauken, N.J., previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of theft of government funds. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Shelton admitted that when his father died in March of 1990, he intentionally did not notify the Social Security Administration (SSA), as he was obligated to do, so that he could continue to receive his father’s SSA retirement checks. The SSA discovered the death in June of 2012, at which time the deceased was receiving $977 in monthly retirement benefits.
After his father had died, Shelton set up a direct deposit for the checks into a PNC Bank account in his father’s name. Shelton acknowledged he accessed that account at various times and used the money to pay for personal expenses. Shelton admitted that from March 1990 to July 2012, he collected $204,606 to which he was not entitled.
In addition to the prison term, Judge Simandle sentenced Shelton to three years of supervised release and ordered him to pay $204,606 in restitution to the Social Security Administration. Shelton was also ordered to pay restitution of $204,606.
U.S. Attorney Fishman credited special agents of the Social Security Administration – Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden.
13-318
Defense counsel: Thomas Young Esq., Assistant Federal Public Defender, CamdenSix Marshall County Residents Convicted for the Distribution of Oxycodone Within 1,000 Feet of A Protected LocationRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
Seven Others Appear for Pleas and Sentencing
WHEELING, WEST VIRGINIA - United States Attorney William J. Ihlenfeld, II
announced that the following individuals recently appeared in Federal Court in Wheeling.ANDREW J. RICHARDSON, age 27, KRISTEN A. STURM, age 24, TYLER M. YOUNG, age 20, JENNIFER A. THOMPSON, age 25, BROOKE STURM, age 18 and AMANDA K. VANSCYOC, age 31, entered pleas of guilty to “Distribution of Oxycodone within 1,000 Feet of the Moundsville Middle School. BROOKE STURM, who is in custody pending sentencing, and RICHARDSON, KRISTEN STURM, YOUNG, THOMPSON and VANSCYOC, who are free on bond, face 1 to 40 years imprisonment and a $2,000,000 fine. This case was investigated by the Marshall County Drug Task Force, which includes officers and agents from the Moundsville Police Department, the Marshall County Sheriff’s Department and the Drug Enforcement Administration.
JEFFREY J. OLIVER, age 26, of Wheeling, was sentenced to 30 months imprisonment to be followed by five years of supervised release for “Possession of Child Pornography.” OLIVER, who is free on bond, will self-report to the designated Federal institution. This case was investigated by the West Virginia State Police -Bureau of Criminal Investigations and the Federal Bureau of Investigation and was prosecuted 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, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
These cases were prosecuted by Assistant United States Attorney Robert H. McWilliams, Jr.
WILLIAM “CHAZ” CRISWELL, age 29,of Wheeling, was sentenced to 24 months imprisonment to be followed by three years of supervised release for “Felon in Possession of a Firearm.” CRISWELL, who is free on bond, will self-report to the designated Federal institution. This case was prosecuted by Assistant United States Attorney Stephen L. Vogrin and investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives along with the Wheeling Police Department.
CHARLES J. WESTBROOKS, age 47, of Paden City, West Virginia, was sentenced to 5 years probation for “Theft of Public Funds.” This case was prosecuted by Assistant United States Attorney David J. Perri and investigated by the United States Department of Veterans Affairs, Office of Inspector General- Criminal Investigation Division.
HERBERT C. BREIDING, age 34, of Triadelphia, West Virginia, was sentenced to 3 years probation for “Possession of a Firearm While Under a Current Protective Order.” This case was prosecuted by Assistant United States Attorney Stephen L. Vogrin and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
RONALD SNIDER, age 50, of Weirton, West Virginia, entered a plea of guilty to “Conspiracy to Distribute Cocaine.” SNIDER, who is free on bond, faces up to 20 years imprisonment and a $1,000,000 fine. This case was prosecuted by Assistant United States Attorney Robert H. McWilliams, Jr. and investigated by the Drug Enforcement Administration and the Jefferson County, Ohio, Drug Task Force.
Jose Jesús TAPIA MONTES, age 36, of Washington, Pennsylvania, was sentenced to
30 months imprisonment and Elmer Pina PINTO, age 44, of Washington, Pennsylvania, was sentenced to 33 months imprisonment for “Aiding and Abetting in the Transportation of an Individual in Interstate Commerce with Intent to Engage in Illegal Sexual Activity.” TAPIA MONTES and PINTO were remanded to the custody of the United States Marshal pending designation to a Federal institution. The F.B.I. was assisted by the Wheeling Police Department and the Harmony House Child Advocacy Center in the investigation. The case was prosecuted by Assistant U.S. Attorney Robert H. McWilliams, Jr.Sex Offender Sentenced to Prison for Failing to RegisterRead the Press Release
A sex offender who failed to register with authorities was sentenced today to over three years in federal prison.
Dana Curry, 41, from Waterloo, Iowa, received the prison term after a March 25, 2013, guilty plea to one count of failing to register as a sex offender.
At the guilty plea, Curry admitted to failing to properly update his sex offender registration in Iowa from June 2010 through November 28, 2012. Curry was required to register because he was convicted in Arapahoe County, Colorado, of one count of Second Degree Sexual Assault.
Curry was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Curry was sentenced to 37 months’ imprisonment. A special assessment of $100 was imposed. He must also serve an 8-year term of supervised release after the prison term. There is no parole in the federal system.
Curry is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the United States Marshal’s Service and the Iowa Division of Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 13-2003.
Second Mexican National Pleads Guilty to Participating in Conspiracy to Distribute 3000 Kilograms of MarijuanaRead the Press Release
ALBUQUERQUE – Jerome Dominic Concha, 20, a member and resident of Jemez Pueblo, was sentenced this afternoon to 57 months in federal prison followed by three years of supervised release for two assault convictions. Concha also was ordered to pay $13,359.38 to the Indian Health Services in Taos and Jemez Pueblos to cover the costs of medical care for the victims of Concha’s assaults.
Concha was arrested on Feb. 15, 2012, and charged with assaulting a Taos Pueblo man on Jan. 7, 2011. Concha pleaded guilty to an assault charge on July 27, 2012, and admitted seeking the victim out, knocking him to the ground, and repeatedly striking him about the head and face. The victim had to undergo surgery to repair the extensive damage to the bone structure of the orbit of the eye and nasal bone fractures he sustained as a result of Concha’s assault.
While on release under pretrial supervision and awaiting sentencing on the Jan. 7, 2011 assault, Concha was again arrested on Jan. 10, 2013, on another assault charge. In Feb. 2013, Concha was indicted and charged with assault resulting in serious bodily injury. According to court records, on Jan. 1, 2013, Concha repeatedly struck a Jemez Pueblo man in the face and head with a hatchet in a residence on Jemez Pueblo. On April 22, 2013, Concha pleaded guilty to this second assault and admitted assaulting the victim with a hatchet. The victim sustained serious injuries, including a depressed skull fracture, a fracture to the jaw and upper palate, and the loss of multiple teeth, as a result of the assault.
These cases were investigated by the Albuquerque office of the FBI with assistance from the Taos Police Department and the Pueblo of Jemez Police Department, and were prosecuted by Assistant U.S. Attorney Niki Tapia-Brito.
Second Mexican National Pleads Guilty to Participating in Conspiracy to Distribute 3000 Kilograms of MarijuanaRead the Press Release
ALBUQUERQUE – Jose Domingo Jasso-Topete, 34, a Mexican national illegally present in the United States, pleaded guilty this morning in Las Cruces federal court to conspiracy and possession of more than 1,000 kilograms of marijuana with intent to distribute. The guilty plea was announced by U.S. Attorney Kenneth J. Gonzales, Special Agent in Charge Dennis A. Ulrich, II, of Homeland Security Investigations (HSI) in El Paso, Texas Ulrich, and Chief Patrol Agent Scott A. Luck, El Paso Sector of the U.S. Border Patrol.
Jasso-Topete is one of eight Mexican nationals arrested shortly after midnight on March 24, 2012, by U.S. Border Patrol agents after agents observed five vehicles breach the International Border Fence south of Animas, N.M. The agents conducted surveillance as the vehicles drove northbound in a convoy and moved in when four of the vehicles crashed into each other. The agents eventually apprehended eight individuals and took control of the four vehicles which contained approximately 3,154 kilograms of marijuana.
The eight defendants initially were charged in four criminal complaints and subsequently indicted together and charged with conspiracy and possession of more than 1,000 kilograms of marijuana with intent to distribute. Four of the defendants also were charged with re-entering the United States after prior deportation.
During today’s proceedings, Jasso-Topete entered guilty pleas to Counts 1 and 2 of the indictment charging him with conspiracy to possess marijuana with intent to distribute and possession of more than 1,000 kilograms of marijuana with intent to distribute. In his plea agreement, Jasso-Topete acknowledged that on March 24, 2013, he was in a vehicle that was part of a five-vehicle convoy that smuggled approximately 3,000 kilograms of marijuana from Mexico into the United States. Jasso-Topete admitted that on the night of March 24, 2013, he and seven others crossed from Mexico into New Mexico and drove through the desert until they were apprehended by Border Patrol Agents. He further admitted that all five vehicles, which were covered with camouflage tarps and driven without headlights, were loaded with marijuana that they intended to deliver to other individuals in the United States.
At sentencing, Jasso-Topete faces a prison sentence of not less than ten years and not more than life imprisonment. He will be deported after he completes his prison sentence. Jasso-Topete has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
Co-defendant Francisco Flores-Enriquez, 26, also a Mexican national illegally present in the United States, entered a guilty plea on July 26, 2013, to Count 1 of the indictment, the conspiracy charge. He, too, faces a prison sentence of not less than ten years and not more than life imprisonment and will be deported after he completes his prison sentence.
The remaining six co-defendants have entered not guilty pleas and are detained pending trial. The charges in the indictment against the co-defendants are merely accusations and the co-defendants are presumed innocent unless found guilty beyond a reasonable doubt in a court of law.
This case was investigated by the Deming, N.M., office of HSI and the Lordsburg, N.M., office of the U.S. Border Patrol, and is being prosecuted by Assistant U.S. Attorney Edwin Garreth Winstead, III, of the U.S. Attorney’s Las Cruces Branch Office.
Rochester Business Owner Pleads Guilty to Tax Crimes; Will Pay $11.5 Million to the GovernmentRead the Press Release
ROCHESTER, N.Y. - U.S. Attorney William J. Hochul, Jr. announced that John P. Gizzi, 64, of Rochester, N.Y., pleaded guilty to filing false tax returns in 2008 and 2009 before U.S. District Court Judge Frank P. Geraci. Jr. The charges carry a maximum sentence of six years in prison, a $500,000 fine, or both. In addition, a corporation owned by Gizzi, Rochester Machinery Suppliers, Inc., pleaded guilty to aiding and abetting the preparation of a false tax return.
In addition to paying the $1,901,633 in criminal restitution for taxes that he owes, Gizzi will also forfeit $1,500,000 to the Government in a related proceeding brought by the United States Attorney's Office. Rochester Machinery Suppliers, Inc., Gizzi's corporation, will pay a $500,000 fine for its role in assisting Gizzi's tax crimes. Finally, and as stated in Court today, the defendant will pay $7,623,431 to settle related civil claims with the Internal Revenue Service. This brings the total to be paid by Gizzi to the Government to $11,525,064.
“To hide this amount of money in an effort to avoid paying one’s fair share in taxes is really an insult to all Americans who play by the rules,” said U.S. Attorney Hochul. “Let this case serve as a warning that no one – including the wealthy – is above the law.”
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Gizzi owned and managed several entities, including Rochester Machinery Suppliers, Inc.. The defendant misused his entities to conceal income and artificially inflate expenses in several complex schemes. By misrepresenting the truth on his tax returns, Gizzi evaded paying $1,901,633 in federal income taxes.
One of Gizzi's schemes involved concealing cash compensation that he earned from sales of scrap metal generated by his entities. The defendant obtained at least $1,920,729 in cash from his scrap metal sales, but reported none of it on his tax returns. In another scheme, Gizzi hid and then failed to report, $2,195,084 in income from rent, expense reimbursements and transportation billings generated by his entities. Finally, the defendant used his entities to claim $1,320,638 in bogus expenses that he was not entitled to claim.
U.S. Attorney Hochul noted that today’s convictions represent yet another multi-million dollar judgment impacting the Rochester area, all obtained in the past two months. On May 24, 2013, the Office announced the criminal conviction of ISTA Pharmaceuticals, a company acquired by Bausch + Laumb. The company paid the United States $33.5 million to resolve criminal and civil liability arising from its marketing, distribution and sale of its drug Xibrom.
Last week, the United States Attorney’s Office secured the conviction of Debra Bulter, former Program Administrator for the University of Rochester’s Department of Anesthesiology. Bulter admitted defrauding both the University of Rochester, and a Medical Group, of approximately $3.9 million.
The Gizzi plea is the result of an investigation by Internal Revenue Service, Criminal Investigations, under the direction of Toni M. Weirauch, Special Agent in Charge and the Internal Revenue Service, Large Business and International Division, Financial Services Industry in Upstate New York.
Sentencing is scheduled for November 4, 2013 at 3:00 p.m. before Judge Geraci.Prior Sex Offender Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
ALBUQUERQUE – John W. Vandermeer, 62, of Albuquerque, N.M., pleaded guilty this morning to receipt of a visual depiction of minors engaged in sexually explicit conduct. Under the terms of his plea agreement, Vandermeer will be sentenced to 15 years in federal prison followed by a lifetime of supervised release. Vandermeer also will be required to register as a sex offender. The guilty plea was announced by U.S. Attorney Kenneth J. Gonzales, Special Agent in Charge Dennis A. Ulrich, II, of Homeland Security Investigations (HSI) in El Paso, Texas, and Chief Robert W. Shilling of the New Mexico State Police (NMSP).
Vandermeer was arrested on Dec. 4, 2012, on a criminal complaint alleging that he received and possessed child pornography in Bernalillo County, N.M., between Jan. 2011 and Nov. 2012. On Dec. 19, 2012, Vandermeer was indicted and charged with three counts of receipt of child pornography and two counts of possession of child pornography. The indictment alleged that Vandermeer received child pornography from Jan. 2009 through April 16, 2011 and that he possessed child pornography in Dec. 2012, in Bernalillo County.
During today’s proceedings, Vandermeer entered a guilty plea to Count 3 of the indictment charging him with receipt of child pornography. In his plea agreement, Vandermeer acknowledged that HSI and NMSP executed a search warrant at his residence on Dec. 4, 2012 and seized computers and computer-related media. The search warrant was issued based on an undercover investigation by the NMSP that began in Nov. 2012, and targeted individuals who possessed, received and distributed child pornography. The investigation revealed that an IP Address which was subscribed to Vandermeer was being used to download child pornography images and videos through a peer-to-peer file-sharing program.
Vandermeer also acknowledged voluntarily participating in a recorded interview on Dec. 4, 2012, during which he admitted downloading child pornography images and videos of prepubescent children. Vandermeer also admitted having a prior conviction for raping a child under the age of 14 years from Massachusetts. According to court filings, during the interview, Vandermeer stated that he moved from Massachusetts to Albuquerque in 1987 after he was convicted of child rape. Vandermeer also stated that he was involved in Albuquerque theater productions involving children.
Vandermeer faces the enhanced penalty of a mandatory minimum 15 year prison sentence because of his prior sex offense conviction. He remains in federal custody pending his sentencing hearing, which has yet to be scheduled. Under the terms of his plea agreement, Vandermeer will forfeit his computers and computer-related media.
This case was investigated by the Albuquerque office of HSI, the Online Predator Unit of the NMSP and the New Mexico Regional Computer Forensic Laboratory. It is being prosecuted by Assistant U.S. Attorney Charlyn E. Rees as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 64 federal, state and local law enforcement agencies associated with the ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
President of Frederick Mail Preparation Service Sentenced to Prison for Fraud Resulting in Losses of over $628,500Read the Press Release
Majority of Victims Were Non-Profit Clients Who Relied on the Mailings to
Raise Funds
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Chester William Bigelow, age 58, of Woodbine, Maryland, today to 30 months in prison, followed by three years of supervised release, for conspiracy to commit mail and wire fraud relating to the failure to provide contracted-for services to clients of Bigelow’s company, RMS Direct, Inc., resulting in losses of over $628,500. Judge Blake also ordered Bigelow to perform 200 hours of community service and to forfeit $628,581.48, representing postage payments made to RMS by its clients, but never paid to the USPS, as well as $13,500, which he withdrew from the RMS bank account and was used by his family members to purchase a car for their personal use.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division.
According to his plea agreement, Bigelow was the president and owned 65% of the shares of RMS Direct, Inc., a mail preparation service located in Frederick, Maryland, with over 200 clients and revenues of over $5 million per year. Under the supervision of Bigelow and RMS vice president Stephen Reid, RMS entered into contracts to prepare and submit to the U.S. Postal Service (USPS), large-volume mailings, typically made up of pamphlets, brochures, books, and other printed materials.
RMS clients were primarily non-profit corporations that relied upon the mailings sent through RMS to raise funds, and the timing of the mailings was essential to their fundraising efforts. RMS assembled the mailings, applied the postage and addresses, and organized the pieces of mail for submission to the USPS. RMS submitted the mailings to a full-time USPS Acceptance Clerk that was assigned to its office. As proof that the mailings went out, RMS then emailed its clients either of two USPS documents – a postage statement signed and certified by the USPS Acceptance Clerk or a Mailing Transaction Receipt printed from an online USPS database. Both documents included information as to the dates, times, number of pieces of mail and postage paid. Once the RMS client received a statement, it would remit payment to RMS.
Bigelow admitted that the conspiracy began in 2005, when he and Reid, who owned 35% of the shares of RMS, falsified postage statements to misrepresent to RMS clients that mailings were being sent out in a timely fashion when, in fact, the mailings were late. Beginning in 2009, Bigelow and Reid selected certain mailings or portions of mailings that would not be submitted at all to USPS for delivery. Bigelow and Reid made sure that the documentation sent to the RMS client was falsified to indicate that the full mailing had been submitted, thereby causing the client to overpay RMS for postage and services.
To accomplish the fraud, Bigelow, Reid, and RMS employees operating at their direction, generated false postage statements, forged the signature of the USPS Acceptance Clerk and created a false impression of the special USPS date stamp used on the postage statement. Bigelow attempted to recreate the special USPS date stamp by hand, but was unsuccessful. Then, in 2006, RMS employees gained unauthorized access to the USPS Acceptance Clerk’s key to the filing cabinet where the date stamp was stored. Bigelow instructed an RMS employee to make a copy of the key, which Bigelow kept in his desk drawer. From that time until 2010, Bigelow, Reid, and RMS employees operating at their direction used Bigelow’s copy of the key to gain access to the date stamp when the USPS Acceptance Clerk was not present in order to falsify postage statements. Beginning in 2010, when the computer-generated Mailing Transaction Receipt was adopted by the USPS to certify mailings, Bigelow and Reid falsified those as well, using a document that had been created, which, when printed, looked identical to the USPS Mailing Transaction Receipt. Bigelow and Reid directed RMS employees to use this document to create false Mailing Transaction Receipts, which were sent to RMS clients as proof of the timely and complete submission of their mailings.
Bigelow and Reid took other measures to conceal the fraud and prolong the victimization of RMS clients. For example, RMS clients often included pieces of mail known as “seeds,” in the mailings they provided to RMS. These “seeds” were sent to particular individuals or addresses so that the client could track the timing and appearance of the mailing. Bigelow directed RMS employees to make sure to deliver the “seeds” from the mailings that were going out late or were not otherwise submitted to the USPS, in order to conceal the fraud.
Bigelow also requested refunds for mailings or portions of mailings that RMS failed to submit to USPS for delivery. If postage was paid for a mailing, but the mailing was not submitted for delivery, RMS, as a third-party mailer, could request a refund of 90% of the postage value. Bigelow requested these refunds for unsent pieces of mail and retained the funds as RMS revenue. The refunds requested were generally in amounts less than the $500 threshold that would have triggered additional scrutiny by USPS officials.
As a result of the scheme, at least 19 victims lost a total of $628,581.48.
Stephen Reid, age 51, of Frederick, Maryland, previously pleaded guilty to the same charge and was sentenced to two years in prison and ordered to forfeit and pay restitution of $628,581.48, the amount of loss resulting from the fraud.
United States Attorney Rod J. Rosenstein praised the U.S. Postal Inspection Service for its work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney Matthew Lunder, a trial attorney with the Justice Department’s Antitrust Division, National Criminal Enforcement Section, who prosecuted the case.