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Monday 22 July 2013
Littleton Police Officer Arrested for Drug Trafficking CrimesRead the Press Release
DENVER – Jeffery Allan Johnston, age 46, of Parker, Colorado, has been arrested based on a Criminal Complaint charging him with the drug trafficking related crimes, United States Attorney John Walsh, FBI Denver Special Agent in Charge Thomas Ravenelle and Littleton Police Chief Doug Stephens announced. Johnston was arrested without incident at his Parker home by the FBI on Friday, July 19, 2013. The Criminal Complaint was unsealed by the court today. Johnston appeared in U.S. District Court in Denver this afternoon, where he was advised of his rights and the charges pending against him. The government is asking the court that Johnston be held in custody without bond pending a resolution of his case. A detention hearing and a preliminary hearing is scheduled to take place on July 25, 2013 at 3:00 p.m.
The Criminal Complaint charges Johnston with possession of a mixture and substance containing a detectable amount of MDMA with intent to distribute; maintaining a drug-involved premises; possessing a firearm in furtherance of a drug trafficking crime; and using a telephone to facilitate a drug trafficking felony.
According to the affidavit in support of the arrest warrant, on July 15, 2013, Johnston contacted a friend via telephone. During the call, Johnston said he wanted to “catch up” with the friend. The person Johnston contacted is a known narcotics trafficker who has been invited to Johnston’s residence previously to distribute narcotics to guests at parties Johnston hosts. According to the friend, Johnston paid for 3,4-methylenedioxy methamphetamine (known as MDMA, Ecstasy or X) for his parties.
During the phone call Johnston asked if he could purchase between 40 and 50 Ecstasy pills from the source for between $15 to $20 each. They discussed the fact that some of the Ecstasy currently available was not well made. Johnston offered to use a test kit to confirm the quality of the Ecstasy. On July 19, 2013, the FBI conducted a controlled delivery of 37 Ecstasy pills and 6.3 grams of Ecstasy powder. Johnston paid $1,300 for the delivery. Following the exchange of Ecstasy and money, Johnston was taken into custody, and a search warrant was executed a Johnston’s residence.
Agents found the 10 grams of Ecstasy just delivered to Johnston in a kitchen drawer and a stainless steel Colt Officers Model .45 caliber pistol which was located in a small black bag on the counter above the drawer containing the Ecstasy. The pistol was loaded with seven .45 rounds of ammunition in the magazine and one .45 round in the chamber. Investigators also found suspected cocaine, suspected steroids, hundreds of suspected prescription pills, additional firearms, and hundreds of rounds of ammunition, all in his residence. Further, agents discovered evidence of drug trafficking in a kitchen drawer. In that drawer was empty pill pouches, a drug test kit and a scale.
In the Complaint, the preliminary charging document, Johnston faces: One count of possession of a mixture and substance containing a detectable amount of MDMA with intent to distribute, which carries a penalty of not more than 20 years in federal prison, and a fine of not more than $1,000,000; One count of maintaining a drug involved premises, which carries a penalty of not more than 20 years in federal prison, and a fine of not more than $500,000; One count of possession of a firearm in furtherance of a drug trafficking crime, which carries a penalty of not less than five years, and not more than life in federal prison, and a fine of up to $250,000; One count of using a telephone to facilitate a drug trafficking felony, which carries a penalty of not more than 4 years in federal prison, and up to a $500,000 fine.
This case was investigated by the Federal Bureau of Investigation (FBI). Those who may have information regarding this matter should contact the FBI at 303-629-7171.
Johnston is being prosecuted by Assistant U.S. Attorneys Guy Till and David Conner.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a federal felony crime has a Constitutional right to be indicted by a grand jury, thus finalizing the charges.
The charges contained in the Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
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Leader Convicted in Scheme to Steal Nearly $1.4 Million from Housing Authority of Baltimore City AccountRead the Press Release
Transferred Funds Out of Housing Authority’s Bank Account
Baltimore, Maryland - A federal jury today convicted Daren Kareem Gadsden, aka “D,” age 36, of Upper Marlboro, Maryland, on charges related to a conspiracy to steal almost $1.4 million from a Housing Authority of Baltimore City bank account.
The guilty verdict was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief James W. Johnson of the Baltimore County Police Department.
“Daren Gadsden stole from the Baltimore City Housing Authority by transferring money directly out of the Authority’s bank account,” said U.S. Attorney Rod J. Rosenstein. “The $1,399,700 in taxpayer funds stolen from the Baltimore City Housing Authority was supposed to be used to provide housing, not to line the pockets of criminals.”
According to information presented at his six day trial, in 2009, Gadsden owned a property in Baltimore that was rented to a low income individual, whose rental payments were paid by the Housing Authority of Baltimore City, from its account directly to Gadsden’s bank account. Witnesses testified that in late 2009 and 2010, Gadsden made a series of inquiries to another bank where he had an account about how to use his computer to make electronic transfers to and from his account at that bank. In early 2010, the Housing Authority lost a few thousand dollars when a series of unauthorized electronic transfers debited funds out of the Housing Authority’s account and into Gadsden’s bank account. After being confronted by Housing Authority officials, Gadsden denied any wrongdoing, but paid the Housing Authority $1,400 to cover some of its losses.
The evidence showed that from early 2010 until at least September 17, 2010, Gadsden and several co-defendants conspired to execute a larger scheme to defraud the Housing Authority. Specifically, Gadsden contacted Tyeast Brown to plan the fraud. Brown, in turn, contacted William Alvin Darden and Keith Eugene Daughtry, securing from Daughtry his social security card and birth certificate, which she provided to Darden. On May 19, 2010, Darden obtained a Maryland driver’s license with his photograph, but in Daughtry’s name, using Daughtry’s social security card and birth certificate as proof of identity. Darden then used the fraudulent license to open a bank account in the name of Keith Daughtry Contracting LLC. Gadsden had registered the entity with the state of Maryland, only a few days before, under a different, misspelled name. Darden also provided a mailing address for the company that was actually a mailbox rented by the conspirators at a commercial mailing store.
According to witness testimony, beginning in July, 2010, Gadsden and his co-conspirators electronically transferred funds from the Housing Authority’s bank account and into the Keith Daughtry Contracting LLC account. The conspirators then drained the stolen Housing Authority funds from the Keith Daughtry Contracting account by electronic transfers into accounts at other banks, in-person cash withdrawals and from automated teller machines. In addition, the conspirators electronically transferred funds from the Keith Daughtry Contracting account onto debit cards in the names of other individuals. For example, Gadsden opened a debit account in the name of another individual, using that person’s identity information without their knowledge or permission.
The evidence showed that Gadsden also tampered with evidence, deleting the contents of at least two email accounts after he was contacted by an FBI Special Agent. The accounts were provided as the points of contact for certain debit cards Gadsden opened using stolen identity information.
Gadsden faces a maximum sentence of 30 years in prison and a $1 million fine for the bank fraud conspiracy. Gadsden also faces a mandatory two years in prison, consecutive to any other sentence for aggravated identity theft, and 20 years in prison for one count each of attempting to tamper with evidence and for evidence tampering. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for October 24, 2013 at 1:00 p.m.
Tyeast Brown, aka “Peaches,” age 42, of Suitland, Maryland; William Alvin Darden, age 46, of Washington, D.C; and Keith Eugene Daughtry, age 52, of Washington, D.C. all pleaded guilty to their roles in the scheme. Daughtry and Brown were sentenced to 41 months and 36 months in prison, respectively, and each was ordered to pay restitution of $1,399,700. Darden is expected to be sentenced later this year.
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.
United States Attorney Rod J. Rosenstein thanked the FBI and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Sujit Raman and Gregory Bockin, who are prosecuting the case.
Larimer County Residents Indicted and Arrested on Conspiracy and Possession of A Schedule I Controlled Substance with Intent to Manufacture and DistributeRead the Press Release
DENVER – Five Larimer County residents were arrested late last week for conspiracy to distribute a controlled substance and possession of a controlled substance with intent to manufacture and distribute, U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar Kibble announced. The controlled substance in this case is commonly known as “Spice”. Playing a critical role in the investigation was the Northern Colorado Drug Task Force. The indictment was unsealed by the court today.
The five defendants arrested, Dien Le, Ponlue Pim, Pirun Pim, Ricky Pim, and Kenneth Barnes appeared in U.S. District Court in Denver this afternoon, where they were advised of their rights and the charges pending against them. They are due back in court on July 25, 2013 at 10:00 a.m. for arraignment and a detention hearing.
On last Friday, July 19, 2013 HSI agents and Northern Colorado Task Force officers executed search warrants at seven locations, including residences and businesses in Fort Collins. During the course of executing those warrants, agents and officers seized: money from several bank accounts used by the defendants (amounts to be determined), $26,000 in cash, 75 pounds of Spice and the chemicals and dry products to make Spice, thousands of packaging units of Spice for later sale, and several firearms.
According to the indictment, from October 11, 2012 through approximately April 30, 2013, and continuing within the State of Colorado and elsewhere, the defendants did knowingly and intentionally conspire to manufacture, possess with the intent to distribute, and to distribute mixtures or substances containing detectable amounts of JWH-018 [1-pentyl-3-(1-naphthoyl)indole], also known as synthetic cannabinoid, a Schedule I controlled substance. The street name for this drug is Spice.
During the spring of 2013, the defendants engaged in knowingly and intentionally possessing with intent to manufacture and distribute mixtures or substances containing synthetic cannabinoid controlled substance.
The investigation revealed that Barnes would order JWH-018, which is a white powder, from China. He would have the powder delivered from China to New York City. From there, he’d have the illegal substance sent from New York to Fort Collins. Barnes also had a green leafy type substance sent to Fort Collins from San Antonio, Texas. In Fort Collins, Barnes, Le and the Pims would mix the substances together, wet it, let it dry, thus creating Spice. They would then package the product and take it to head shops, gas stations and other local stores to sell it. The cost of 1.5 gram packets would be $10, and the cost for 3 gram packets would be $20.
The product used by the defendants, JWH-018, is manufactured in China, with no Food and Drug Administration or other type of oversight. It can contain substances that are dangerous to an individuals’ health. Some purchase Spice because they cannot purchase marijuana. Both substances are dangerous to an individual’s health, which is why both JWH-018 and marijuana are both listed as Schedule I Controlled Substances, which are banned from use.
Most defendants face conspiracy to distribute a controlled substance. Others face possession of a controlled substance with intent to manufacture and distribute. All charges carry a penalty of not more than 20 years in federal prison, and a fine of up to $1,000,000, per count.
“Spice is a very dangerous substance that is being used by people as young as teenagers,” said U.S. Attorney John Walsh. “When a person uses Spice they have no actual idea what they are putting into their body – as a key part of the product is made in China without regulatory controls.”
“Illicit smuggling schemes involving synthetic marijuana pose a growing threat to public health and safety,” said Kumar Kibble, special agent in charge of HSI Denver. “Because these drugs are unregulated and untested, it is impossible to know what chemicals are being ingested, making them incredibly dangerous. With these latest arrests, HSI and our law enforcement partners have struck a huge blow to the synthetic drug industry.”
“This is another excellent example of federal and local law enforcement personnel working well together,” said Lt. Greg Yeager, Commander of the Northern Colorado Drug Task Force. “The dismantling of this drug trafficking organization will have a lasting impact on the presence of illegal drugs not only in the City of Fort Collins, but across the nation.”
Those charged with conspiracy to distribute a controlled substance face not more than 20 years in federal prison, and a fine of up to $1,000,000. Those charged with possession of a controlled substance with intent to manufacture or distribute also face not more than 20 years in federal prison, and up to a $1,000,000 fine, per count.
This investigation was conducted by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and the Northern Colorado Drug Task Force. The Northern Colorado Drug Task Force is made up of the Fort Collins Police Department, the Loveland Police Department and Colorado Adult Parole.
This case was prosecuted by Assistant U.S. Attorney Jeremy Sibert.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
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Lake County Residents Charged with Conspiracy and Use of A Minor in A Large-Scale Marijuana OperationRead the Press Release
SAN FRANCISCO – Following a months-long federal investigation, Ryan Balletto and Patrick Pearmain were charged today with conspiracy to manufacture and distribute over 1,000 plants of marijuana and using a minor in a drug operation, announced United States Attorney Melinda Haag.
Balletto and Pearmain, of Lake County, are charged in a criminal complaint signed by Magistrate Judge Nandor J. Vadas and unsealed today. In addition to the conspiracy and use of a minor charges, Balletto is also charged in the complaint with possession of a firearm in furtherance of a drug trafficking crime. The case arose from an investigation by the Lake County Sheriff’s Office and the ICE Homeland Security Investigations, Contraband Smuggling Group, which led to the discovery of a 1,300 plant marijuana cultivation operation and a host of firearms in Lake County.
The complaint alleges that Balletto and Pearmain kept a fifteen year-old runaway for weeks at an extensive marijuana grow site on land owned by Balletto in Lake County, and that they used her to process marijuana plants. According to the complaint, Balletto and Pearmain allegedly subjected the minor victim to sexual abuse during that time.
Agents and officers allegedly discovered a cache of weapons at the grow site, most of which were loaded, including assault weapons, such as AR-15 style rifles with night vision scopes, and pistols. Stored with the rifles, officers allegedly found seven fully loaded 30-round .223 caliber magazines, four fully loaded 20-round .223 caliber magazines, and a large cache of assorted ammunition. With the weapons, officers allegedly found ballistic face masks, a helmet, a flak jacket, an armored plate carrier, night vision devices, and a gas mask. A search of Balletto’s residence allegedly uncovered even more weapons, including multiple sniper rifles, additional assault rifles, shotguns, pistols, and ammunition.
The penalties Balletto and Pearmain face for the drug conspiracy and use of a minor in a drug operation charges are a maximum of life in prison, with a mandatory minimum ten-year term. In addition, the possession of a firearm in furtherance of a drug trafficking crime carries a mandatory term of five years in prison, consecutive to any sentence imposed. Any sentence following conviction would be imposed by the court only after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentence, 18 U.S.C. § 3553(a).
“Some in our community believe that marijuana grow operations are run by compassionate caregivers interested only in supplying medicine to the sick. Unfortunately, this case illustrates what we in law enforcement see – marijuana grow operations that include heavily-armed, violent individuals, motivated by profit, carrying out abuses of vulnerable victims.” U.S. Attorney Haag said. “In light of the details alleged in the complaint, we fear additional victims may have been subjected to similar treatment by the defendants, and we urge anyone with information about other such victims to come forward. My office is dedicated to keeping the community safe, and we will continue to work with our local, state and federal law enforcement partners to help bring to justice those who victimize others, particularly those who are most vulnerable.”
"This is an investigation that was originated by Federal Investigators,” said Lake County District Attorney, Don Anderson. “The U.S. Attorney's office has the expertise and resources to assure the defendants are adequately punished for their crimes. We have been working with the U.S. Attorney's office in this matter and look forward to our continuing relationship with them"
"The criminal groups involved in growing and trafficking marijuana have repeatedly shown they have no qualms about using violence and intimidation against those who get in their way - in this case the alleged victim was only 15 years old," said Tatum King, Acting Special Agent in Charge, Homeland Security Investigations, San Francisco. "By pooling our resources, authorities and expertise, we've succeeded in dismantling a drug operation suspected of funneling significant quantities of marijuana into northern California and onto our streets. This case shows yet again why federal and state collaboration is crucial to combatting these kinds of public safety threats and ensuring that those involved are brought to justice."
The defendants made their initial appearance today in front of Judge Vadas. A detention hearing is set for both defendants on Wednesday, July 24, 2013, at 1:00 pm in Eureka, California.
Kevin Barry and Matthew McCarthy are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Erica Doerr. U.S. Attorney Haag and Homeland Security Investigations Special Agent in Charge Settles also commend the Lake County Sheriff’s Office and the Lake County District Attorney’s Office for their continuing cooperation and assistance in this investigation.
Please note, a complaint contains only allegations against an individual and, as with all defendants, the defendants in this case must be presumed innocent unless and until proven guilty.
(Balletto and Pearmain complaints)
Kansas City, Kan., Man Sentenced for Enticing A California Girl for SexRead the Press Release
KANSAS CITY, KAN. – A man from Kansas City, Kan., has been sentenced to10 years in federal prison for using the Internet to entice a 12-year-old girl in California to send him pictures of herself naked, U.S. Attorney Barry Grissom said today.
Robert Dobbertin, 40, Kansas City, Kan., pleaded guilty to one count of enticing a minor. In his plea, he admitted that in October 2008 a woman in Orange County, Calif., discovered that her 12-year-old daughter was involved in an on-line relationship with him.
The girl met Dobbertin through the Web site Teenspot.com. Dobbertin sent instant messages to the girl and talked sexually to her on the phone while engaged in masturbation. He asked for and received naked photographs of her. He asked her to perform sexual acts on herself. He sent her a video of himself masturbating and a digital photo of his penis.
When investigators served a search warrant at Dobbertin’s home in May 2009 they seized a computer containing child pornography and the records of two Yahoo! Messenger chats in which Dobbertin talked about his plans to travel to California to visit the girl and expressed a desire to have sex with her.
Grissom commended the FBI and Assistant U.S. Attorney Christine Kenney for their work on the case.
Justice Department Files Lawsuit Against the State of Florida for Unnecessarily Segregating Children with DisabilitiesRead the Press Release
The Justice Department announced today that it has filed a lawsuit against the state of Florida alleging the state is in violation of the Americans with Disabilities Act (ADA) in its administration of its service system for children with significant medical needs, resulting in nearly 200 children with disabilities being unnecessarily segregated in nursing facilities when they could be served in their family homes or other community-based settings. The lawsuit, filed in federal district court in Fort Lauderdale, Fla., further alleges that the state’s policies and practices place other children with significant medical needs in the community at serious risk of institutionalization in nursing facilities. The ADA and the Supreme Court’s decision in Olmstead v. L.C. require states to eliminate unnecessary segregation of persons with disabilities. The department’s complaint seeks declaratory and injunctive relief, as well as compensatory damages for affected children.
In September of last year, the department issued an extensive findings letter, notifying the state that it is in violation of the ADA. The letter found that the state’s failure to provide access to necessary community services and supports was leading to children with significant medical needs being unnecessarily institutionalized in, or being placed at serious risk of entering nursing facilities. The letter identified the numerous ways in which state policies and practices have limited the availability of access to medically necessary in-home services for children with significant medical needs. Additionally, the state’s screening and transition planning processes have been plagued with deficiencies. Some children have spent years in a nursing facility before receiving screening required under federal law to determine whether they actually need to be in a nursing facility.
As a result of the state’s actions and inaction, the state has forced some families to face the cruel choice of fearing for their child’s life at home or placing their child in a nursing facility. In one instance, the state cut one child’s in-home health care in half. Her family could not safely provide care themselves to make up for this reduction in services, and they felt they had no choice but to place her in a nursing home. Another child who entered a nursing facility as a young child spent almost six years in a facility before the state completed her federally mandated screening.
“Florida must ensure that children with significant medical needs are not isolated in nursing facilities, away from their families and communities,” said Eve Hill, Deputy Assistant Attorney General for the Civil Rights Division. “Children have a right to grow up with their families, among their friends and in their own communities. This is the promise of the ADA’s integration mandate as articulated by the Supreme Court in Olmstead. The violations the department has identified are serious, systemic and ongoing and require comprehensive relief for these children and their families.”
Since late 2012, the department has met with Florida officials on numerous occasions in an attempt to resolve the violations identified in the findings letter cooperatively. While the state has altered some policies that have contributed to the unnecessary institutionalization of children, ongoing violations remain. Nearly two hundred children remain in nursing facilities. Deficient transition planning processes, lengthy waiting lists for community-based services and a lack of sufficient community-based alternatives persist. The department has therefore determined that judicial action is necessary to ensure that the civil rights of Florida’s children are protected.
The ADA prohibits discrimination on the basis of disability by public entities, including state and local governments. The ADA requires public entities to ensure that individuals with disabilities are provided services in the most integrated setting appropriate to their needs. The department’s Civil Rights Division enforces the ADA, which authorizes the Attorney General to investigate allegations of discrimination based upon disability and to conduct compliance reviews regarding the programs and services offered by public entities. Visit www.justice.gov/crt to learn more about the ADA and other laws enforced by the Civil Rights Division. For more information on the Civil Rights Division’s Olmstead Enforcement, please visit: www.ada.gov/olmstead/index.htm .
Justice Department Files Lawsuit Against the Puerto Rico Police Department for Race, Color and Religious DiscriminationRead the Press Release
The Department of Justice announced today the filing of a lawsuit against the Puerto Rico Police Department PRPD) alleging that the PRPD discriminated against Yolanda Carrasquillo on the basis of race, color and religion in violation of Title VII of the Civil Rights Act of 1964, as amended (Title VII). Title VII is a federal statute that prohibits employment discrimination on the basis of race, color, national origin, sex and religion.
The suit, filed in the U.S. District Court for the District of Puerto Rico, alleges that the PRPD discriminated against Carrasquillo by subjecting her to daily verbal harassment about her race, color and religion over a period of approximately three years beginning in 2007 and ending in 2010. According to the complaint,. Carrasquillo, a sworn police officer, was subjected to a hostile work environment because of the discriminatory actions of a civilian co-worker who regularly used racial and other offensive slurs directed towards Carrasquillo, and other black or dark-skinned employees, that disparaged her race, color and Christian faith. The United States has alleged that the co-worker’s discriminatory conduct persisted on a daily basis and over a number of years, often in the presence of Carrasquillo’s other co-workers and numerous supervisory police officers at the PRPD.
Despite numerous timely complaints about the harassment by Carrasquillo to her supervisors and other PRPD officials, the PRPD failed to take any meaningful steps to stop the harassment or discipline the harasser. The complaint alleges that the PRPD failed to follow its anti-harassment policy which provides for zero tolerance for harassment and specifically charges supervisors with preventing and immediately correcting acts of discrimination of which they become aware through either a report made to them or personal observation.
Through this lawsuit, the United States is seeking declaratory and injunctive relief requiring the PRPD to develop and implement policies that would prevent its employees from being subjected to harassment based upon race, color or religion as well as monetary damages for Carrasquillo as compensation for the PRPD’s discriminatory actions.
Carrasquillo originally filed a charge of race, color and religious discrimination with the Equal Employment Opportunity Commission (EEOC), which investigated the matter, determined that there was reasonable cause to believe that discrimination had occurred, and referred the matter to the Department of Justice.
“All workers deserve the freedom to go to work each day without fear of harassment because of their race, color or religion. Public employers should set an example for others by upholding the law and taking prompt and effective action to stop discriminatory harassment,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division. “The Department of Justice will vigorously pursue such violations of Title VII.”
The continued enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Department of Justice is available on its website at www.usdoj.gov/crt .
Joplin Business Owner Who Sold K2 Pleads Guilty to Mail Fraud, Money LaunderingRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the owner of a Joplin, Mo., business pleaded guilty in federal court today to his role in a mail fraud conspiracy and to money laundering related to the sale of K2, the slang term for synthetic cannabinoid products.
Timmy J. Ridgway, 51, of Weir, Kan., waived his right to a federal grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to the charges contained in a federal information.
According to today’s plea agreement, Ridgway and others distributed synthetic cannabinoids at his business, The Looking Glass, 1860 W. 20th St., Joplin. K2 is a mixture of plant material that has been sprayed or mixed with a synthetic chemical compound similar to THC (tetrahydrocannabinol), the psychoactive ingredient in marijuana. K2 products are often labeled as “incense,” but in reality are intended for human consumption as a drug.
On March 4, 2013, law enforcement officers executed a search warrant at The Looking Glass and seized approximately 615 packages of “Bizarro,” 268 packages of “Orgazmo,”and $7,575 in cash. The same day, approximately $123,512 was seized from two bank accounts.
The labels on these packages of synthetic cannabinoids stated that the contents were “incense” or “potpourri” and “not for human consumption.” However, Ridgway admitted that he distributed K2, which contained a controlled substance analogue, for human consumption.
K2 was delivered to The Looking Glass via United Parcel Service (UPS) and FedEx from distributors and manufacturers in Ohio and California on at least 80 occasions between Dec. 29, 2011, and March 4, 2013. Invoices seized from The Looking Glass recorded the delivery of and payment for 93,931.5 grams of synthetic cannabinoids.
Ridgway admitted that he realized substantial profits from the distribution of synthetic cannabinoids. Between Nov. 8, 2012, and Feb. 5, 2013, he deposited a total of approximately $285,949 in cash proceeds from the sale of synthetic cannabinoids into his bank account.
Under the terms of today’s plea agreement, Ridgway must forfeit to the government a money judgment of $285,949, which represents the proceeds of the mail fraud conspiracy, as well as his business property in Joplin, a residential property in Pittsburg, Kan., and all of the funds that were seized from his business and bank accounts on March 4, 2013.
Under federal statutes, Ridgway is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $750,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Drug Enforcement Administration, IRS-Criminal Investigation, the Kansas Bureau of Investigation, the Missouri State Highway Patrol, the Jasper County Drug Task Force and the Joplin, Mo., Police Department.Home Health Agency Owner Pleads Guilty <br /> for Role in $13.8 Million Medicare Fraud SchemeRead the Press Release
Detroit-area resident Javed Rehman pleaded guilty today for his role in a $13.8 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the Chicago Regional Office for the U.S. Department of Health and Human Service’s Office of Inspector General (HHS-OIG).Rehman, 50, of Farmington Hills, Mich., pleaded guilty before U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, scheduled for Nov. 7, 2013, Rehman faces a maximum penalty of 10 years in prison.
According to information contained in plea documents, in or around May 2009, Rehman purchased Quantum Home Care Inc. with co-conspirators Tausif Rahman and Muhammad Ahmad. Rehman paid kickbacks to recruiters to obtain Medicare beneficiary information used to bill Medicare for home health services – including physical therapy and skilled nursing services – that were never rendered. Rehman was the administrator of Quantum and was responsible for the submission of false and fraudulent claims to Medicare based on falsified files created by the co-conspirators.Medicare paid approximately $1.7 million to Quantum for physical therapy and skilled nursing services that Quantum purported to render between approximately June 2009 and September 2011. According to court documents, between 2008 and 2009, Rehman’s co-conspirators acquired control of three other home health care companies. The four companies, including Quantum, received approximately $13.8 million from Medicare in the course of the conspiracy.
Rahman pleaded guilty on Jan. 5, 2012, to one count of conspiracy to commit health care fraud and one count of money laundering and is scheduled for sentencing on Oct. 30, 2013. Ahmad pleaded guilty on Aug. 28, 2012, to one count of conspiracy to commit health care fraud and is scheduled for sentencing on Oct. 29, 2013.
This case was investigated by the FBI, HHS-OIG, and IRS Criminal Investigation and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. It is being prosecuted by Assistant Chief Catherine K. Dick of the Criminal Division’s Fraud Section.Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
HPH Hospice to Pay $1 Million to Resolve False Claims Act AllegationsRead the Press Release
TAMPA – The United States Attorney’s Office for the Middle District of Florida announced today that Hernando-Pasco Hospice, Inc., d/b/a HPH Hospice, has agreed to pay $1 million to resolve allegations that it violated the False Claims Act by submitting false claims for hospice services to the Medicare and Medicaid programs. HPH Hospice is a Florida not-for-profit corporation that provides hospice services in various locations throughout Hernando, Pasco, and Citrus counties in Florida.
The Medicare hospice benefit is available for patients who have a life expectancy of six months or less if their disease runs its normal course. Patients admitted to a hospice stop receiving care to cure their illnesses and instead receive medical care focussed on providing them with relief from the symptoms, pain, and stress of a terminal illness. Medicare reimburses for different levels of hospice care.
Today’s settlement resolves allegations that between January 1, 2005, and December 31, 2010, HPH Hospice submitted false Medicare and Medicaid claims for patients who did not need end of life care. The government alleged that HPH Hospice caused staff to admit ineligible patients in order to meet targets imposed by management, adopted procedures to delay and discourage staff from discharging patients who were not appropriate for hospice services, instructed staff to make false or misleading statements in patients’ medical records to make them appear eligible when they were not, and failed to implement an adequate compliance program that might have corrected these problems.
The settlement also resolves allegations that HPH Hospice billed the government at higher reimbursement rates than it was entitled to receive, and provided illegal kickbacks when it provided free services to skilled nursing facilities in exchange for patient referrals.
“The hospice industry provides medical care to our most vulnerable citizens. This settlement should send a message to providers that misconduct of this kind will not be tolerated,” stated A. Lee Bentley, III, Acting United States Attorney for the Middle District of Florida.
As part of the settlement, HPH Hospice has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.
The allegations settled today arose from a lawsuit filed by two former HPH Hospice employees, Heather Numbers and Greg Davis, under the qui tam or whistleblower provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the United States for false claims and share in any recovery. The whistleblowers in this case will collectively receive $250,000.
This matter was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, the Office of the Inspector General for the Department of Health and Human Services, and the Florida Attorney General’s Office, Medicaid Fraud Control Unit.
The lawsuit is captioned United States and State of Florida ex rel. Numbers and Davis v. Hernando-Pasco Hospice, Inc., et al., No. 10-cv-912 (M.D. Fla.). The claims settled by this agreement are allegations only; there has been no determination of liability.
Grants Pass Sex Offender Sentenced to 188 Months in Federal Prison for Possessing FirearmsRead the Press Release
MEDFORD, Ore. — U.S. District Judge Owen M. Panner today sentenced Norman Bruce Spencer, 59, of Grants Pass, Oregon to 188 months in federal prison for felon in possession of a firearm, followed by five years of supervised release.
In September 2010, the Josephine County Sheriff’s Office responded to a complaint that Spencer, an employee of the Whitehorse Country Store in Grants Pass, had sexually molested an 8-year old girl. The responding deputy determined that Spencer had multiple aliases and several felony convictions, including three prior convictions for child molestation, and that he had not registered as a sex offender in at least five years. Spencer was eventually arrested for sexual abuse of a minor and for failure to register as a sex offender. During the investigation, the deputies also discovered that Spencer possessed a Smith and Wesson .44 caliber revolver and a Norinco 12- gauge shotgun, which defendant kept at the store. An ATF agent traced the revolver and shotgun back to their original owners, who indicated they had sold the firearms to Spencer. He was eventually charged and convicted of sex abuse I in Josephine County Circuit Court and was sentenced to life in prison.
In imposing the federal sentence, Judge Panner found that Spencer was an armed career criminal. Under the federal Armed Career Criminal Act, any person who possesses a firearm or ammunition faces a 15-year mandatory minimum prison sentence if the person has three prior convictions for violent felonies or drug trafficking offenses. Spencer has previous felony convictions for attempted injury to a child (Idaho 2001); robbery in the second degree (California 2000); lewd acts upon a child under 14-years old (California 1993); aggravated assault in the third degree (Florida 1991), lewd acts upon a child under 14-years old (California 1986), and forgery (California 1982). In addition, Spencer was also convicted in Josephine County Circuit Court of three counts of felony sex abuse I of a minor, and was sentenced to life without parole. His federal sentence will run concurrent with the state sentence.
This case was investigated by the Josephine County Sheriff’s Office and the Bureau of Alcohol, Tobacco and Firearms. The prosecution was handled by Assistant U.S. Attorney Douglas W. Fong.
Girl's Former Tennis Coach Pleads Guilty to Solicting Her for Child PornographyRead the Press Release
KANSAS CITY, KAN. – A Missouri man who coached youth tennis has pleaded guilty to soliciting a minor girl he coached to give him photos of herself naked, U.S. Attorney Barry Grissom said today.
Rex Haultain, 56, Parkville, Mo., pleaded guilty to one count of soliciting child pornography. In his plea, he admitted that in 2009 he told a minor girl he was coaching that she sexually aroused him. While traveling to a tournament in the summer of 2010 he showed her a picture of his penis on his cell phone. In the fall of 2010 he began asking her to send him naked pictures of herself. He also sent her text messages stating that he was sexually aroused by her.
Sentencing is set for Oct. 28. Both parties have agreed to recommend to the judge a sentence of not less than 60 months and not more than 78 months in federal prison. Grissom commended the Overland Park Police Department, the FBI and Assistant U.S. Attorney Scott Rask for their work on the case.
Gallatin Man Pleads Guilty to Passport FraudRead the Press Release
NASHVILLE, Tenn.- July 22, 2013- Jose Camarena, 37, of Gallatin, Tennessee, pleaded guilty on July 19, 2013, to charges arising from fraudulent attempts to obtain a United States passport, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
Camarena pleaded guilty to two counts of making a false statement in an application for a United States passport and two counts of falsely representing that he was a United States citizen. Camarena admitted during the plea hearing that he is not a citizen of the United States and that, in 2008, and again in 2012, he applied for a United States passport while falsely representing that he was a U.S. citizen. Camarena also acknowledged that he submitted both passport applications under a false name and admitted providing false birth certificates and a Social Security card that he had obtained unlawfully in support of these applications.
After accepting Camarena’s plea, U.S. District Judge Aleta A. Trauger scheduled a sentencing hearing for September 27, 2013. Camarena could be sentenced to up to ten years in prison in connection with the false statement counts and to up to three years in prison in connection with the false representation of citizenship counts.
The case was investigated by the United States Department of State - Diplomatic Security Service, with assistance from the Gallatin Police Department and the United States Department of Homeland Security- Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney William F. Abely.Former Stamford Resident Sentenced to More Than Five Years in Federal Prison for Distributing CocaineRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that FRANK N. POTOLICCHIO, 63, of Monroe, formerly of Stamford, was sentenced on Friday, July 19, by United States District Judge Janet C. Hall in New Haven to 66 months of imprisonment, followed by four years of supervised release, for distributing cocaine. Judge Hall also ordered POTOLICCHIO to forfeit $60,000.
According to court documents and statements made in court, POTOLICCHIO was the leader of a Stamford-based drug trafficking ring. The investigation, which included the use of court-authorized wiretaps and physical surveillance, revealed that POTOLICCHIO and his co-conspirators acquired cocaine from Florida and sold it in smaller quantities to customers in Fairfield County.
On April 28, 2011, a search of POTOLICCHIO’s Avery Street residence revealed more than 200 grams of cocaine, narcotics packaging material, a 9mm handgun and approximately $7,158 in cash. An examination of POTOLICCHIO’s computer also revealed records of his cocaine sales and profits.
On April 1, 2013, POTOLICCHIO pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 500 grams or more of cocaine.
This matter is being investigated by the FBI Fairfield County Organized Crime Task Force and the Stamford Police Department. The Task Force is composed of members of the FBI, the Internal Revenue Service – Criminal Investigation, the Stamford Police Department, the Bridgeport Police Department and the Connecticut State Police.
The case is being prosecuted by Assistant United States Attorney Hal Chen.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Former Owner of Two Florida Airline Fuel Supply Companies <br /> Charged for Role in Scheme to Defraud Illinois-Based<br /> Ryan International AirlinesRead the Press Release
A former owner and operator of two Florida-based airline fuel supply service companies made his initial appearance today in the U.S. District Court for the Southern District of Florida in West Palm Beach on charges of participating in a scheme to defraud Illinois-based Ryan International Airlines, the Department of Justice announced.
Sean E. Wagner was arrested on July 19, 2013, in Weston, Fla., on a one-count criminal complaint to commit wire fraud and honest services fraud relating to a scheme to defraud Ryan, a charter airline company based in Rockford, Ill. At today’s hearing, the department said that Wagner was arrested after there were indications that he was a flight risk.The criminal complaint alleges that Wagner participated in a conspiracy to defraud Ryan by making kickback payments to Wayne Kepple, the former vice president of ground operations for Ryan in charge of contracting with providers of goods and services on behalf of the company. In exchange, Kepple awarded business to Wagner’s fuel supply service companies. According to the criminal complaint, from at least as early as December 2005 through at least August 2009, Wagner, his companies, and others made kickback payments totaling more than $200,000, in the form of checks, wire transfers, gift cards and cash, to Kepple while working at Ryan.
Ryan provided air passenger and cargo services for corporations, private individuals, and the U.S. government, including the U.S. Department of Defense, the U.S. Department of Homeland Security and the U.S. Marshals Service.
“The Antitrust Division will take enforcement action against those who subvert the competitive process by trading contracts for kickbacks, especially where the U.S. government is being victimized,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will hold accountable those who seek to defraud the government and U.S. taxpayers.”Wagner is charged with one count of conspiracy to commit wire fraud and honest services fraud, which carries a maximum sentence of 20 years in prison and a $250,000 criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.
As a result of this ongoing investigation, four individuals have pleaded guilty to date. Three of the individuals have been ordered to serve sentences ranging from 16 to 24 months in prison and to pay more than $220,000 in restitution. The fourth individual, Wayne Kepple, pleaded guilty and is awaiting sentencing.
This charge is the result of an investigation being conducted by the Antitrust Division’s National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General, with assistance from the U.S. Attorney’s Office for the Southern District of Florida. Anyone with information concerning anticompetitive conduct in the airline charter services industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm.
Former High-Ranking Nassau County Housing Official Sentenced to Eighteen Months’ IncarcerationRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Louis Abate, the former Fiscal Director for the Nassau County Office of Housing and Community Development, previously convicted of stealing over $120,000 in federal housing benefits intended for low-income Long Islanders in need of housing financial assistance, was sentenced to eighteen months in prison by United States District Judge Sandra J. Feuerstein. Judge Feuerstein also imposed restitution of $122,250.
The sentenced was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Cary Rubenstein, Special Agent-in-Charge, U.S. Department of Housing and Urban Development, Office of Inspector General.
“The defendant had the trust of his colleagues and the County and was charged with providing much needed housing for low income families. Instead, he abused that trust to enrich himself and cooked the books to hide his deception,” stated United States Attorney Lynch. “This sentence should deter likeminded public officials from abusing their authority by embezzling money entrusted in their care.” Ms. Lynch extended her grateful appreciation to the Department of Housing and Urban Development, Office of Inspector General, for its assistance.
Qualifying low income families are eligible to receive Section 8 Program rent subsidies under a federal program funded by the United States Department of Housing and Urban Development (HUD). The Nassau County Office of Housing and Community Development (NCOHCD) is the administrative entity responsible for implementing and monitoring the programs and grants funded by HUD in Nassau County, including Section 8 grants. Once a Section 8 applicant is accepted for assistance, NCOHCD, using Section 8 HUD funds, provides rent assistance through payments that are made directly to the recipient’s landlord. The Fiscal Director of NCOHCD is appointed by the Nassau County Executive.
Between May 2009 and August 2011, the defendant stole more than $120,000 in federal rental subsidies from a Section 8 program that he oversaw, which serviced individuals residing in Island Park, New York. In order to accomplish the theft, the defendant created a fictitious landlord with no associated tenant, and for more than two years diverted the Section 8 benefits for this supposed landlord to a bank account he personally controlled. Abate was successful in concealing his fraud from the NCOHCD by systematically altering various accounting records to remove any reference to the diverted funds. During this period, Abate illegally paid himself approximately $5,000 per month – more than three times the monthly amount of federal Section 8 subsidies received by any single participating landlord in the Island Park area during that time.
The government’s case is being prosecuted by Assistant United States Attorney Lara Treinis Gatz.
The Defendant
Name: LOUIS ABATE
Age: 49
Residence: North Massapequa, New YorkFormer Background Investigator for Federal Government Pleads Guilty to Making A False StatementRead the Press Release
WASHINGTON – Lindsay Branson III, 58, a former background investigator for the U.S. Office of Personnel Management (OPM), pled guilty today to a charge stemming from his falsification of work on background investigations of federal employees and contractors, announced U.S. Attorney Ronald C. Machen Jr. and Patrick E. McFarland, Inspector General for the Office of Personnel Management.
Branson, of Silver Spring, Md., pled guilty in the U.S. District Court for the District of Columbia to making a false statement. The Honorable Amy Berman Jackson scheduled sentencing for Oct. 10, 2013. The charge carries a statutory penalty of up to five years in prison and a fine of up to $250,000. As part of his plea agreement, Branson must pay $159,918 in restitution to the federal government.
According to a statement of offense submitted to the Court, Branson worked for Federal Investigative Services, a part of OPM that does federal background investigations.
Between September 2010 and November 2011, in multiple Reports of Investigations on background investigations, Branson represented that he had interviewed a source or reviewed a record regarding the subject of the background investigation. In fact, he had not conducted the interviews or obtained the records of interest. His reports were utilized and relied upon by the agencies requesting the background investigations to determine whether the subjects were suitable for positions having access to classified information, for positions impacting national security, or for receiving or retaining security clearances.
Branson’s false representations have required Federal Investigative Services to reopen and rework numerous background investigations that were assigned to him during the time period of his falsifications, at an estimated cost of at least $159,918 to the U.S. government.
Federal Investigative Services has a robust integrity assurance program which utilizes a variety of methods to ensure the accuracy of reported information. The falsification of investigative case work by the defendant was detected through the program.
This is one of numerous cases prosecuted by the U.S. Attorney’s Office for the District of Columbia in the last four years involving false representations by background investigators and record checkers working on federal background investigations. In addition to Branson, 16 other background investigators and two record checkers have been convicted of charges.
Federal Investigative Services, through its workforce of approximately 7,600, including 6,100 field investigators, is responsible for conducting background investigations for numerous federal agencies and their contractors, on individuals either employed by or seeking employment with those agencies or contractors. Federal Investigative Services conducted more than 2.1 million investigations during the 2012 fiscal year. More than 770,000 of these investigations involved applicants for access or continued access to classified information.
In performing background investigations, the investigators conduct interviews of individuals who have information about the person who is the subject of the review. In addition, the investigators seek out, obtain, and review documentary evidence, such as employment records, to verify and corroborate information provided by either the subject of the background investigation or by persons interviewed during the investigation. After conducting interviews and obtaining documentary evidence, the investigators prepare a Report of Investigation containing the results of the interviews and document reviews, and electronically submit the material to OPM in Washington, D.C. OPM then provides a copy of the investigative file to the requesting agency, which can use the information to determine an individual’s eligibility for employment or a security clearance.
In announcing the plea, U.S. Attorney Machen and Inspector General McFarland praised the efforts of Special Agent Christopher Sulhoff, OPM, Office of the Inspector General, and Philip Kroop and David Newcomer, OPM, Federal Investigative Services. They also acknowledged the work of Paralegal Specialist Nicole Wattelet and Legal Assistant Angela Lawrence, as well as Assistant U.S. Attorneys Ellen Chubin Epstein and David A. Last, who investigated and prosecuted this matter.
13-254Federal Jury Convicts Tempe Designer Drug Maker/distributor on Federal Controlled Substance Analogue Enforcement Act ViolationsRead the Press Release
PHOENIX – On July 19, 2013, Michael Rocky Lane, 51, of Cave Creek, Arizona, was found guilty of conspiracy to manufacture and distribute controlled substance analogues and possession with the intent to distribute controlled substance analogues by a federal jury in Phoenix. The case was tried before U.S. District Judge David G. Campbell from June 25, 2013 through July 19, 2013. Sentencing is set before Judge Campbell on October 21, 2013.
“The manufacture and distribution of designer drugs, which are often mislabeled as innocuous household items and contain chemicals similar to scheduled drugs, are a tremendous problem in our community and across the United States. Individuals who manufacture and distribute these mislabeled designer drugs are responsible for products that have been linked to overdoses, deaths, and hallucinations. My office stands ready to enforce the Analogue Enforcement Act and combat this growing problem,” said John S. Leonardo, U.S. Attorney, District of Arizona.
“Friday’s verdict serves notice to those who are contemplating entering this emerging area of the illegal drug industry,” said DEA Special Agent in Charge Doug Coleman. This DEA-led investigation and trial brought to light the fact that controlled substance analogues are highly addictive stimulants and no different than cocaine or methamphetamine. The criminals behind the importation, distribution and selling of these drugs have scant regard for human life in their reckless pursuit of illicit profits.”
The evidence at trial showed that, beginning in early 2011, Michael Rocky Lane worked with Nicholas Pascal Zizzo at Consortium Distribution in Phoenix, Arizona. Consortium Distribution manufactured a designer drug called “Eight Ballz Bath Salts,” which contained a powerful stimulant MDPV. In October of 2011, the Drug Enforcement Administration (DEA) made MDPV a Schedule I controlled substance, and subsequently Lane worked to find a replacement chemical to use in a new designer drug, which was re-labeled as “Eight Ballz Ultra Premium Glass Cleaner.” “Eight Ballz” was never intended as a legitimate glass cleaner or bath salt, but was designed specifically to intoxicate users.
In the fall of 2011, Lane started his own designer drug manufacturing company in Tempe called Dynamic Distribution. There, Lane manufactured and distributed other mislabeled designer drugs including “Amped Lady Bug Attractant Exuberance Powder,” “White Water Rapid Lady Bug Attractant Exuberance Powder,” and “Snowman Glass Cleaner.” These products were neither legitimate glass cleaners nor insect attractants. Instead, they were all powerful stimulants, including APVP, APBP, MPPP, and Pentedrone, each of which contained substances similar to controlled scheduled drugs. Lane made nearly $8000 a day from domestic internet sales of these products to individual customers alone.
On July 25, 2012, DEA executed hundreds of search warrants at Consortioum, Dynamic and other locations across the country as part of “Operation Log Jam,” a nationwide, coordinated investigation led by the Department of Justice and DEA to combat the growing epidemic of designer drug manufacturing and distribution here in the United States. Other conspirators prosecuted in this investigation and who are awaiting sentencing include, Nicholas Pascal Zizzo of Phoenix; Benjamin Joshua Lowenstein of Phoenix, Arizona; Vincent Collura of New Jersey; David Titus of Phoenix; Andrew Scott Freeman of Minnesota; Clinton Strunk of Mesa; Scott Stone of Minnesota; and Daniel Pollock of Escondido, California.
A conviction for conspiracy to manufacture and distribute a controlled substance analogue carries a maximum penalty of 20 years, a $1,000,000.00 fine or both.
The investigation in this case was conducted by the Drug Enforcement Administration and was assisted by the Arizona Department of Public Safety, the Phoenix Police Department, and the Buckeye Police Department. The prosecution was handled by D. J. Pashayan and Theresa Rassas, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-12-1419-PHX-DGC (LOA)
RELEASE NUMBER: 2013-056_LaneFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Doctor Sentenced in Health Care Fraud Obstruction CaseRead the Press Release
Dr. Mahmoud Yassin, 61, of Robinson, IL, was sentenced in federal district court in Benton for Obstructing a Criminal Health Care Fraud Investigator, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Dr. Yassin was sentenced to serve 3 years of probation, a fine of $10,000, a special assessment of $100, and ordered to pay restitution to BCBS of Illinois in the amount of $19,615.17. As a condition of probation, Dr. Yassin must also serve 30 days in prison.
The felony obstruction occurred on March 2, 2012, when a FBI agent, having served a subpoena for patient records on Dr. Yassin, was given a patient progress note that had been altered by the doctor to show an in-office examination previously claimed to an insurance carrier, but which had not taken place.
In a civil settlement with the United States Attorney’s Office regarding false claims to Medicare, Dr. Yassin paid double damages in the amount of $87,348.64. The restitution and civil false claims settlement were based on claims for in person office visits in which the patient either failed to show up for an appointment or only was spoken to by telephone.
The case was investigated by agents of the Federal Bureau of Investigation, the Department of Health and Human Services Office of Inspector General, the Drug Enforcement Administration, and the Illinois State Police Medicaid Fraud Control Bureau. The case is assigned to Assistant United States Attorney Michael J. Quinley.
District Man Pleads Guilty to Felony Sex Abuse Charge in Assault at Group Home-Defendant Overpowered Victim in His Own Bed -Read the Press Release
WASHINGTON – Chaqualo McNeil, 19, of Washington, D.C., has pled guilty to a felony charge stemming from a recent attempt to sexually abuse a fellow occupant of a group home, U.S. Attorney Ronald C. Machen Jr. announced today.
McNeil entered the plea to a charge of attempted first-degree sexual abuse on July 19, 2013, in the Superior Court of the District of Columbia. The Honorable John Ramsey Johnson scheduled sentencing for Sept. 20, 2013. McNeil faces a statutory maximum of 15 years in prison. He also must also register as a sex offender for the rest of his life.
According to the government’s evidence, on June 2, 2013, the victim, who is in his 20s, was residing in a group home in Northeast Washington with two other adult males, including the defendant. At about 5:30 a.m., while the group home staff was reportedly asleep downstairs, McNeil entered the victim’s bedroom, overpowered him in his bed, and sexually assaulted him.
In announcing the plea, U.S. Attorney Machen commended the work performed by those who investigated the case from the Metropolitan Police Department’s Sexual Assault Unit. He also acknowledged the efforts of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialist D’Yvonne Key and Assistant U.S. Attorney Mervin A. Bourne, Jr. who investigated and prosecuted the matter.
13-255Defendant Pleads Guilty to Sex Crime While Being Treated at LarnedRead the Press Release
WICHITA, KAN. – A Kansas man has pleaded guilty to an Internet sex crime that took place while he was in the Kansas Sexual Predator Treatment Program at Larned State Hospital
Mark D. Brull, 38, Larned State Hospital, pleaded guilty to one count of transferring obscene material to a child. In his plea, he admitted that while he resided at Larned State Hospital he became friends with co-defendant Ryan J. Dancosse, a resident of Wichita. Brull provided Dancosse with the passwords to Brull’s social networking profiles including Facebook, Twitter, Flickr and Youtube, as well as his email account. With Brull’s knowledge and agreement, Dancosse found and copied images of pornography and then uploaded the images to Brull’s accounts for others to see and discuss.
In April 2011, Brull and Dancosse began communicating with a 14–year-old boy living in Massachusetts. In April and May 2011 Brull communicated with the boy via email and telephone. Brull guided the boy to his social networking profiles on the Internet, where he knew Dancosse had uploaded pornography. The boy was able to view the images on his computer and then discuss them with Brull. The images included depictions of nude males performing sexual acts.
Sentencing is set for Oct. 4. Both parties have agreed to recommend to the judge a sentence of 10 years in federal prison.
Co-defendant Ryan J. Dancosse, 40, Wichita, Kan., pleaded guilty to one count of receiving child pornography. He is set for sentencing Oct. 2.
Grissom commended the Kansas Internet Crimes Against Children Task Force, the Wichita Police Department and the Sudbury, Mass., Police Department , U.S. Attorney Jason Hart and Attorney General Steve Karrer of Kansas Attorney General Derek Schmidt's office.
Collinsville Man Pleads Guilty to Production of Child PornographyRead the Press Release
A Collinsville man pled guilty on July 22, 2013, to Production of Child Pornography, in violation of Title 18, United States Code, Section 2251(a), the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Martin L. Evanick, a/k/a "Vlad," 31, Collinsville, IL, faces a term of imprisonment of not less than fifteen (15) years but not more than thirty (30) years, a fine up to $250,000, and a term of supervised release of five (5) years to life. Sentencing is scheduled for November 4, 2013, in East St. Louis, Illinois. Evanick has been in the custody of the United States Marshals Service since his arraignment on October 19, 2012.
The investigation began on April 21, 2012, when the victim’s mother contacted the Collinsville Police Department regarding a possible sexual assault on her 16 year old minor daughter by a 30 year old man, later identified as Defendant Martin L. Evanick. During interviews with authorities, the victim revealed that she had a sexual relationship with Evanick, and that Evanick had also taken nude pictures of her using his cellular telephone. During the investigation, Evanick’s cellular telephone was found to contain four photographs of the victim, taken when she was 17 years old, that constituted child pornography. In an interview with agents, Evanick admitted taking the sexually explicit photos of the victim.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Office and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources".
The case was investigated by the Collinsville, Illinois, Police Department and the Federal Bureau of Investigation's Metro East Cyber Crimes and Analysis Task Force. The case is assigned to Assistant United States Attorney Angela Scott.
Charenton Man Pleads Guilty to Larceny at the Chitimacha Tribal ReservationRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced that Kendrick T. Edmond, 21, of Charenton, La., pleaded guilty before U.S. District Magistrate Judge Patrick J. Hanna to larceny occurring at the Chitimacha Tribal Reservation.
According to evidence presented at the guilty plea, Edmond admitted to entering the Chitimacha Trading Post, which is within the Chitimacha Tribal Reservation, on March 31, 2013, and removing cancer donations from the register counter. The donations had been provided to defray the medical expenses of a member of the Sovereign Nation of the Chitimacha.Edmond faces up to one year in prison, one year of supervised release, restitution, and a $100,000 fine.
Jurisdiction in Indian Country is based upon the unique sovereign relationship between the federal government and Indian tribes. Congress has criminalized certain acts that take place in Indian Country. The U.S. Attorney’s Office prosecutes all felony and misdemeanor cases, arising in Indian Country, that are within the jurisdiction of this office. The U.S. Attorney’s Office prosecutes cases, arising in Indian Country, involving felonies where either the defendant or the victim is an Indian or both the defendant and the victim are Indian. The U.S. Attorney’s Office also prosecutes cases involving misdemeanors where the defendant is a non-Indian.
The Chitimacha Tribal Police Department conducted the investigation. Assistant U.S. Attorney Daniel J. McCoy is prosecuting the case.
CNMI Senator Pleads Guilty to Federal ChargeRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that JUAN MANGLONA AYUYU, Senator for Rota in the Northern Marianas Commonwealth Legislature, pleaded guilty today to federal charges in the U.S. District Court on Saipan.
In a written plea agreement, AYUYU pleaded guilty to Count One of the indictment in Criminal Case Number 1:12-cr-00036-1 (Conspiracy to Violate the Endangered Species Act) and Count One of the indictment in Criminal Case Number 1:12-cr-00039 (Conspiracy to Obstruct an Official Proceeding). In the plea agreement and at the plea hearing, AYUYU admitted that in October 2010 he conspired with his legislative assistant, Ryan James Inos Manglona, to transport eight federally protected Mariana fruit bats, or Fanihi, from Rota to Saipan on board a Freedom Air flight. AYUYU also admitted that after the bats were discovered by the Transportation Security Administration (TSA), he conspired in November 2010 to obstruct the ensuing federal grand jury investigation by asking Ryan Manglona to lie to the grand jury about their involvement. (Ryan Manglona previously pleaded guilty to perjury before the grand jury and conspiracy to violate the Endangered Species and Lacey Acts.)
In AYUYU’s plea agreement, the parties agreed -- subject to the Court’s approval -- that AYUYU will receive a sentence of between thirty-three and forty-one months in prison. The United States also agreed to dismiss the remaining charges after AYUYU is sentenced. Chief Judge Ramona V. Manglona set AYUYU’s sentencing for November 8, 2013.The case was investigated by agents of the U.S. Fish and Wildlife Service and the CNMI Division of Fish & Wildlife, an agency under the Department of Lands and Natural Resources. The prosecution is being handled by Assistant U.S. Attorneys Garth R. Backe and Ross K. Naughton.
16 Arrested in Organized Crime Drug Enforcement Task Force OperationRead the Press Release
LAREDO, Texas – Multiple indictments have been partially unsealed following the arrest and appearances of several area residents for numerous drug and money laundering charges, United States Attorney Kenneth Magidson announced today. The enforcement actions took place in the Laredo, Houston and Dallas areas on Friday, July 19, 2013.
The seven indictments were returned earlier this year and partially unsealed today upon their appearances in federal court. The alleged members of this drug and money laundering organization are charged with various federal violations, including engaging in a conspiracy to possess with intent to distribute and possession with intent to distribute multi-kilograms quantities of marijuana, cocaine, heroin and methamphetamines as well as conspiracy to launder drug proceeds. The alleged illegal conduct occurred from approximately 2009 through 2011.
Those arrested include:
Juan Antonio Elizondo, 24, of Laredo
Ahmed Alejandro Plascencia, 33, of Laredo
Ernesto Jimenez, 26, of Laredo
Francisco Garza, 55, of Laredo
Christian Abundez, 23, of Laredo
Blanca Abundez, 28, of Laredo
Abraham Bruno Ortiz, 49, of Laredo
Adrian Torres, 22, of Laredo
Rene Sanchez, 46, of Laredo
Olegario Valdez, 42, of Rio Bravo
Marco Antonio Marchan, 49, of Dallas
Juan Artemio Trevino, 41, of Houston
Ilmar Sierra, 35, of Dallas
Gabriel Munoz Solis, 40, of DallasAll made their initial appearances this morning and have been ordered into custody pending a detention hearing which has been scheduled for July 25, 2013.
Two others - Rolando Ariel Reyes-Apac, 33, and Heriberto Soto, 44, are also charged but are currently in custody on unrelated charges. They are expected to make their initial appearance on the charges in the near future.
The indictments allege the drug trafficking organization operated out of the Laredo area. They allegedly engaged in a conspiracy to distribute bulk quantities of marijuana, heroin, methamphetamines and cocaine from the Laredo area to distribution venues such as Dallas and Houston. In conjunction with the drug conspiracy, according to the indictments, the organization was involved in a money laundering conspiracy wherein large sums of money were transported from points of drug distributions to Laredo and Mexico. The indictments remain sealed as to those charged but not as yet in custody.
In late 2012 and early 2013, seven others were arrested in relation to this investigation. Nancy Gutierrez, 28, Pedro Menchaca, 39, Ricardo Cruz, 22, Jimmy Eusebio Trujillo, 50, Artemio Lemos, 47, Rosendo Rodriguez, 52 and Gilberto Soto-Diaz, 38, all of Laredo, have since pleaded guilty and are pending sentencing.
The indictments are the culmination of a long term Organized Crime Drug Enforcement Task Force Investigation dubbed “Operation Ultimate D” spearheaded by the Drug Enforcement Administration and Internal Revenue Service - Criminal Investigation with the assistance of Border Patrol, U.S. Marshals Service, Dallas Police Department Narcotics Unit, Webb County District Attorney's Office Drug Prosecution Unit, Laredo Police Department Narcotics Unit and Webb County Sheriff's Office Crime Stoppers Unit. Assistant United States Attorney Mary Lou Castillo is prosecuting the case.
Defendants are presumed innocent unless and until convicted through due process of law.
Saturday 20 July 2013
Former Treasurer for Steelworkers Local 635 Charged with Falsifying RecordsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced the filing of an Information in U.S. District Court in Scranton today charging Bernard C. Nolter, Jr., age 45, of Mt. Carmel, Pennsylvania, with falsification of financial records.
According to United States Attorney Peter J. Smith, Nolter was responsible for the financial records of Steelworkers Local 635 during 2010-11 when he falsified those records in order to conceal the fact that he had embezzled approximately $7,047 from the union.
The case was investigated by the U.S. Department of Labor. Prosecution is assigned to Assistant U.S. Attorney Lorna N. Graham.Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is one year imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Friday 19 July 2013
Yankton Man Indicted in Methamphetamine ConspiracyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Yankton, South Dakota, man has been indicted by a federal grand jury for his participation in a methamphetamine distribution conspiracy.
Richard Allen Schaefer, age 42, was indicted by a federal grand jury on July 9, 2013, for conspiracy to distribute 500 grams or more of methamphetamine. He appeared before U.S. Magistrate Judge John E. Simko on July 17, 2013, and pled not guilty to the indictment.The charge carries a mandatory minimum penalty of 10 years and a maximum penalty of life in prison and/or a $10 million fine. The charge is merely an accusation and Schaefer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Sioux Falls Police Department, the S.D. Division of Criminal Investigation, and the U.S. Drug Enforcement Administration. Assistant U.S. Attorney John E. Haak is prosecuting the case.
Schaefer was remanded to the custody of the U.S. Marshal. A trial date has not been set.William Fredrick Schroeder Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Helena, on July 8, 2013, before U.S. Magistrate Judge Jeremiah C. Lynch, WILLIAM FREDRICK SCHROEDER, a 31-year-old resident of Livingston, pled guilty to receipt of child pornography. Sentencing has been set for October 16, 2013. He is currently detained.
In an Offer of Proof filed by Special Assistant U.S. Attorney Ole Olson, the government stated it would have proved at trial the following:
On February 13, 2013, "S", a 13-year-old child in Helena, disclosed to her mother that she had engaged in sexual intercourse with SCHROEDER earlier that day.
Later on February 13, 2013, members of the Helena Police Department placed SCHROEDER under arrest and seized two cellular telephones from him.
Still later on February 13, 2013, when interviewed SCHROEDER admitted that he had engaged in sexual intercourse earlier that day with "S." SCHROEDER stated he believed "S" was 17-years-old.
SCHROEDER's girlfriend was also interviewed who stated she had previously advised SCHROEDER that "S" was only 13-years-old.
SCHROEDER faces possible penalties of a mandatory minimum of 5 years in prison and could be sentenced to 20 years, a $250,000 fine, and lifetime supervision.
The investigation was conducted by the Helena Police Department.
Week in Review – South BendRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
South Bend, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Decarlo Knighten, 36, of LaPorte, Indiana, pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of being a felon in possession of a firearm. Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Drug Enforcement Agency.Sentencing has been set for 10/17/2013 before Judge Jon E. DeGuilio. This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
Ian T Kideys, 49, of La Jolla, California, pled guilty before District Judge Robert L. Miller, Jr to the felony offense of wire fraud. Sentencing has been set for 10/21/2013 9:00 AM before Judge Robert L. Miller Jr. This charge was filed as a result of an investigation by Department of Housing and Urban Development.This case is being prosecuted by Assistant United States Attorney Donald Schmid.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Brian Purvines, 41, of Granger, Indiana, was sentenced by District Judge Jon E. DeGuilio to 57 months imprisonment and 20 years supervised release after pleading guilty to the felony offense of possession of child pornography.According to documents filed with this case, Purvines was detected based on his having files available for distribution via file sharing software known as “Frostwire.”Purvines possessed approximately 291 images of child pornography and 33 videos.The images and videos contained prepubescent children engaged in sexual activity with adults.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney John Maciejczyk.
Clifton Vortice, 33, of South Bend, Indiana, was sentenced by District Judge Robert L. Miller, Jr to 24 months imprisonment and 2 years supervised release after pleading guilty to the felony offense of being a convicted felon in possession of a firearm.According to documents filed in this case, Vortice has a 2006 marijuana possession conviction. In September 2011, he purchased and possessed a Desert Eagle 9 mm pistol.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Donald Schmid.
Kevin Howell, 46, of Michigan City, Indiana, was sentenced by District Judge Robert L. Miller, Jr to 60 months imprisonment and 4 years supervised release, after pleading guilty to the felony offense of possessing with the intent to distribute a mixture or substance containing a detectable amount of cocaine base (“crack.”)According to documents filed in this case, in January 2013, Howell possessed 28 grams of a white rock like substance at his residence in LaPorte County, Indiana.This substance was later tested by the Indiana State Police Lab and found to be cocaine base.This case was the result of an investigation by the Drug Enforcement Agency.This case was prosecuted by Assistant United States Attorney Frank Schaffer.
Cedric Hill, 33, of South Bend, Indiana, was sentenced by District Judge Robert L. Miller to 70 months imprisonment and 2 years supervised release after pleading guilty to the felony offense of possessing a firearm in and affecting interstate or foreign commerce.Hill has a prior felony firearms conviction. According to documents filed in this case, in November 2012, South Bend Police Officers stopped Hill after he left the Water Works Car Wash in South Bend, Indiana. Hill had been involved in an altercation at the Car Wash. Officers found a handgun outside the Car Wash. Hill admitted to having dropped this handgun outside the Car Wash and that he had possession of the weapon.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Frank Schaffer.
Randell Hargrove, 27, of South Bend, Indiana, was sentenced by District Judge Jon E. DeGuilio to total of 63 months imprisonment, 3 years supervised release on each count (concurrent) for a total of 3 years supervised release after pleading guilty to the felony offense of distributing marijuana and possession of a firearm in furtherance of a drug trafficking crime.According to documents filed with this case, Hargrove distributed both hydroponic and non-hydroponic marijuana.Hydroponic marijuana is the growing of plants in an inert, sterile growing medium rather than soil. At the time of law enforcement’s search of a relevant location, firearms belonging to Hargrove were retrieved.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Donald Schmid.
Week in Review – HammondRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Monta Oliver, 36, of Gary, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of distribution of crack cocaine.Sentencing has been set for 9/25/13.This charge was filed as a result of an investigation by the Federal Bureau of Investigation and the Gary Police Department.This case is being prosecuted by Special Assistant United States Attorney Armando Salinas.
Regina Cabell, 36, of West Lafayette, Indiana, pled guilty before Senior District Judge Rudy Lozano to the felony offense of submitting a claim to Indiana Medicaid for service to an Indiana Medicaid recipient that she did not actually provide and failure to file a 2011 federal income tax return.Sentencing has been set for 10/25/13.This charge was filed as a result of an investigation by the Indiana Medicaid Fraud Control Unit.This case is being prosecuted by Assistant United States Attorney Diane Berkowitz.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Terrence Benson, 23, of Hammond, Indiana, a defendant in the case US v Puntillo-Raggs et al., was sentenced on July 12, 2013 by Senior District Judge Rudy Lozano to 12 months of probation and restitution of $4,000.00 after pleading guilty to the felony offense of passing counterfeit obligations.According to documents filed by the government in this case, Benson passed the counterfeit currency in payment for “purchased” items from the victim store. He later returned many of the items “purchased” with the counterfeit currency in exchange for genuine cash or other things of value. This case was the result of an investigation by the United States Secret Service.This case was prosecuted by Assistant United States Attorney Randall Stewart.
Tyrone Reynolds, 34, an illegal alien living in Chicago, Illinois, and a defendant in the case US v Blades et al., was re-sentenced by Senior District Judge Rudy Lozano to 384 months imprisonment and 3 years of supervised release if not deported after being found guilty at trial of the felony offenses of kidnapping, conspiracy to distribute marijuana and use of a firearm during a crime of violence in relation to a narcotics offense.According to documents filed in this case, Reynolds and seven others robbed the victim, a self-admitted drug dealer, at his residence in Gary, Indiana.The group looted the victim’s residence, finding over $15,000 in cash.Believing there were more drugs and money they beat the victim and demanded that he cooperate.Eventually, the victim hatched a plan to escape by proposing to Reynolds that he could take the group to a cache of marijuana being stored in Chicago.Reynolds believed the victim and the group decided they would go to the location in Chicago.The victim was able to escape from the vehicle on route to the location and called law enforcement.This case was the result of an investigation by the Federal Bureau of Investigation and the Chicago Police Department.This case was prosecuted by Assistant United States Attorney David Nozick.
Jon Zondor, 71, of Hammond, Indiana, was sentenced by District Judge Joseph Van Bokkelen to 120 months imprisonment and 10 years of supervised release after pleading guilty to the felony offense of possession of child pornography.Zondor was also ordered to pay $500 in restitution to each of two victims.According to documents filed by the government in this case, 9,433 images and 248 videos were found in Zondor’s possession, many of which depicted prepubescent children being caused to engage in sexually explicit conduct .Zondor was convicted of aggravated criminal sexual abuse in 1989. This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney Jill Koster.
Dwayne Crawford, 40, of Merrillville, Indiana, was sentenced by Senior District Judge James Moody to 97 months imprisonment and 4 years of supervised release after pleading guilty to the felony offenses of conspiracy to possess with intent to distribute and distribute 100 kilograms or more of marijuana, possession with intent to distribute 500 grams or more of cocaine and engaging in a monetary transaction with criminally derived property of a value greater than $10,000.This case was the result of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Internal Revenue Service.This case was prosecuted by Assistant United States Attorney Jacqueline Jacobs.
Joshua Atwood, 29, of Crown Point, Indiana, was sentenced by Senior District Judge Rudy Lozano to 97 months imprisonment and 20 years of supervised release after pleading guilty to the felony offense of possession of child pornography involving visual depictions involving a minor who had not attained twelve years of age.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.This case was prosecuted by Assistant United States Attorney Jill Koster.
Montell Williams, 34, of Chicago, Illinois, was sentenced by Senior District Judge Rudy Lozano to 120 months imprisonment and 8 years of supervised release after pleading guilty to the felony offense of transporting an individual in interstate commerce with the intent that the individual engage in prostitution.According to documents filed by the government in this case, the Gary Police Department received information from an Illinois citizen who reported her daughter was being held against her will. The investigation subsequent to that initial lead established that Williams, acting as a pimp, was recruiting women into prostitution, advertising them on internet sites, transporting them across state lines and using force to ensure they continued to work for him. From 2010 to 2012, the victims resided with Williams in Gary, Indiana, and two different locations in Illinois. This case was the result of an investigation by the Federal Bureau of Investigation and the Gary Police Department.This case was prosecuted by Assistant United States Attorney Jill Koster.
Week in Review – Fort WayneRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS:
Francisco Garcia-Hernandez, 35, of Fort Wayne, Indiana, was sentenced by District Judge Theresa L. Springmann to 37 months imprisonment after pleading guilty to the felony offense of distributing and possessing with the intent to distribute a controlled substance, namely 500 grams or more of cocaine.According to documents filed in this case, undercover law enforcement was able to purchase cocaine from Garcia-Hernandez.Garcia-Hernandez was involved in numerous drug transactions of which the last involved transacting approximately 528 grams of cocaine pressed into a hard brick form.This case was the result of an investigation by the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney Anthony Geller.
Clara M Haught, 64, of Garrett, Indiana, was sentenced by District Judge Theresa L. Springmann to 3 years of probation, to include10 months of home detention, and $31,075.42 in restitution after pleading guilty to the felony offense of production/trafficking in counterfeit devices.According to documents filed in this case, Haught opened multiple credit cards in a friend’s name without their permission or consent.Haught gained knowledge of the information by claiming to help the individual with a local cable bill.This case was the result of an investigation by United States Postal Service.This case was prosecuted by Assistant United States Attorney Tina Nommay.
Waterbury Man Sentenced to 10 Years in Federal Prison for Illegally Possessing, Selling FirearmsRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that ROBERTO SANTIAGO, 28, of Waterbury, was sentenced today by United States District Judge Robert N. Chatigny in Hartford to 120 months of imprisonment, followed by three years of supervised release, for illegally possessing and selling firearms.
According to court documents and statements made in court, on August 2, 2011, SANTIAGO sold a semi-automatic handgun in exchange for $400 to an individual working with law enforcement. On August 9, 2011, SANTIAGO sold a semi-automatic rifle and 250 rounds of ammunition to an undercover officer for $1,500. Both of the firearms were manufactured outside of Connecticut.
Prior to August 2011, SANTIAGO had sustained six felony convictions. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm that has moved in interstate or foreign commerce.
On October 22, 2012, SANTIAGO pleaded guilty to one count of possession of a firearm by a previously convicted felon.
SANTIAGO has been detained in state custody since his August 31, 2011 arrest on several unrelated state charges. On November 1, 2011, he received an effective state sentence of four years--which he is currently serving--for five felony convictions and one misdemeanor conviction. The federal sentence imposed today will run concurrently to the remainder of SANTIAGO’s state sentence.
This matter was investigated by the Drug Enforcement Administration, with substantial assistance provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant United States Attorney Marc H. Silverman.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Virginia Man Pleads Guilty to Possession of Child PornographyRead the Press Release
WASHINGTON – Richard Mark Abbott, 62, of Chesterfield, Va., pled guilty today to a federal charge of possession of child pornography, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Abbott entered the guilty plea in the U.S. District Court for the District of Columbia. The Honorable John D. Bates is to sentence him on Oct. 18, 2013. Abbott faces a maximum sentence of 10 years of imprisonment, as well as a potential fine of $250,000.
According to the government's evidence, on March 15, 2013, Abbott contacted an undercover officer with the FBI's Child Exploitation Task Force, who had posted an ad on a social network site frequented by individuals with a sexual interest in children. Over the next few days, Abbott engaged in online e-mail and instant messaging with the undercover officer, whom Abbott believed was the father of an under-aged girl.
During the course of their communications, Abbott sent the undercover officer ten images of child pornography. On May 2, 2013, Abbott was arrested at his residence in Virginia. Pursuant to a search warrant for the residence, law enforcement recovered various electronic devices including two computers and various external storage devices. After a forensic review of those items, law enforcement recovered over 600 images of child pornography.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director Parlave and
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Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of Assistant U.S. Attorney Ari Redbord, who is prosecuting the case.U.S. Intervenes in False Claims Act Lawsuit Against<br /> Fla. Home Health Care Company and Its OwnerRead the Press Release
The government has intervened in a whistleblower lawsuit against A Plus Home Health Care, Inc., a home health care company in Fort Lauderdale, Fla., and its owner, Tracy Nemerofsky, the Justice Department announced today. The government alleges that A Plus offered referring physicians’ spouses sham marketing positions with the company to induce the physicians to refer Medicare patients for home health care services.
“Kickback schemes subvert the home health care market place and undermine the integrity of consumer choice,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “We will continue to hold accountable those who abuse our public health care programs at the expense of patients and taxpayers.”
The government alleges that, beginning in 2006, A Plus Home Health Care engaged in a scheme to increase Medicare referrals in the heavily saturated home health care market of southern Fla. The company allegedly hired at least seven physicians’ spouses and one physician’s boyfriend to perform marketing duties but required them to perform few, if any, actual job duties. To cover up the scheme, the government alleges, Ms. Nemerofsky generated sham personnel files, which included lists of job duties the spouses and boyfriend did not perform and performance reviews of job functions they did not complete, to give the false impression that the spouses and boyfriend were legitimate employees.
The government’s complaint also alleges that the spouses’ and boyfriend’s salaries were an inducement and reward for the physicians’ referrals of Medicare patients to A Plus Home Health Care. In fact, the government alleges the physicians’ referrals to A Plus Home Health Care spiked dramatically when the spouses and boyfriend began receiving paychecks from
A Plus, allowing A Plus to receive millions of dollars in Medicare reimbursements. For example, in 2005, before A Plus hired any referring physicians’ spouses, A Plus was allegedly reimbursed $1.1 million from Medicare for home health care services. Conversely, in 2011, when A Plus was paying salaries to the seven referring physicians’ spouses and one physician’s boyfriend, A Plus’ Medicare reimbursement allegedly reached an all-time high of $6.6 million.“We will not relent in our efforts to combat fraudulent kickback schemes, such as the no-show jobs scheme used in this case, and return dollars to the Medicare program,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “These schemes are classic examples of the fraud and abuse that plague and threaten the financial stability of Medicare, which provides much needed services to the sick and elderly.”
According to an August 2012 Department of Health and Human Services’ Office of Inspector General report, home health services are particularly vulnerable to fraud, waste and abuse. In 2010, Medicare paid a reported $19.5 billion to 11,203 home health care agencies for services provided to 3.4 million beneficiaries.The lawsuit was filed by a former A Plus Home Health Care director of development, William Guthrie, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government and receive a share of any recovery. The act also authorizes the government to intervene in and assume primary responsibility for litigating the lawsuit, as the government has done in this case. The government previously settled with two of the couples that accepted payments from A Plus Home Health Care.
The government’s intervention in this lawsuit illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.7 billion through False Claims Act cases, with more than $10.7 billion of that amount recovered in cases involving fraud against federal health care programs.
The A Plus Home Health Care investigation reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Florida, the Department of Health and Human Services’ Office of Inspector General, and the Federal Bureau of Investigation.
The lawsuit is U.S. ex rel. Guthrie v. A Plus Home Health Care, Inc., 12 CV 60629 (S.D. Fla.). The claims asserted against the defendants are allegations only, and there has been no determination of liability.
U.S. Intervenes in False Claims Act Lawsuit Against Fla. Home Health Care Company and Its OwnerRead the Press Release
The government has intervened in a whistleblower lawsuit against A Plus Home Health Care, Inc., a home health care company in Fort Lauderdale, Fla., and its owner, Tracy Nemerofsky, the Justice Department announced today. The government alleges that A Plus offered referring physicians’ spouses sham marketing positions with the company to induce the physicians to refer Medicare patients for home health care services.
“We will not relent in our efforts to combat fraudulent kickback schemes, such as the no-show jobs scheme used in this case, and return dollars to the Medicare program,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “These schemes are classic examples of the fraud and abuse that plague and threaten the financial stability of Medicare, which provides much needed services to the sick and elderly.”
“Kickback schemes subvert the home health care market place and undermine the integrity of consumer choice,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “We will continue to hold accountable those who abuse our public health care programs at the expense of patients and taxpayers.”
The government alleges that, beginning in 2006, A Plus Home Health Care engaged in a scheme to increase Medicare referrals in the heavily saturated home health care market of southern Fla. The company allegedly hired at least seven physicians’ spouses and one physician’s boyfriend to perform marketing duties but required them to perform few, if any, actual job duties. To cover up the scheme, the government alleges, Ms. Nemerofsky generated sham personnel files, which included lists of job duties the spouses and boyfriend did not perform and performance reviews of job functions they did not complete, to give the false impression that the spouses and boyfriend were legitimate employees.
The government’s complaint also alleges that the spouses’ and boyfriend’s salaries were an inducement and reward for the physicians’ referrals of Medicare patients to A Plus Home Health Care. In fact, the government alleges the physicians’ referrals to A Plus Home Health Care spiked dramatically when the spouses and boyfriend began receiving paychecks from A Plus, allowing A Plus to receive millions of dollars in Medicare reimbursements. For example, in 2005, before A Plus hired any referring physicians’ spouses, A Plus was allegedly reimbursed $1.1 million from Medicare for home health care services. Conversely, in 2011, when A Plus was paying salaries to the seven referring physicians’ spouses and one physician’s boyfriend, A Plus’ Medicare reimbursement allegedly reached an all-time high of $6.6 million.
According to an August 2012 Department of Health and Human Services’ Office of Inspector General report, home health services are particularly vulnerable to fraud, waste and abuse. In 2010, Medicare paid a reported $19.5 billion to 11,203 home health care agencies for services provided to 3.4 million beneficiaries.
The lawsuit was filed by a former A Plus Home Health Care director of development, William Guthrie, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government and receive a share of any recovery. The act also authorizes the government to intervene in and assume primary responsibility for litigating the lawsuit, as the government has done in this case. The government previously settled with two of the couples that accepted payments from A Plus Home Health Care.
The government’s intervention in this lawsuit illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.7 billion through False Claims Act cases, with more than $10.7 billion of that amount recovered in cases involving fraud against federal health care programs.
The A Plus Home Health Care investigation reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Florida, the Department of Health and Human Services’ Office of Inspector General, and the Federal Bureau of Investigation.
The lawsuit is U.S. ex rel. Guthrie v. A Plus Home Health Care, Inc., 12 CV 60629 (S.D. Fla.). The claims asserted against the defendants are allegations only, and there has been no determination of liability.
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.
Two Broward Residents Sentenced for Identity Theft SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced that defendants Nathaniel Troy Maye, a/k/a Troy May, 44, and Tiwanna Tenise Thomason, 40, both of Ft. Lauderdale, were sentenced today before U.S. District Judge William J. Zloch. Maye was sentenced to 66 months in prison, followed by 3 years of supervised release. Thomason was sentenced to 5 years’ probation.
Both defendants previously pled guilty to one count of possession of 15 or more unauthorized access devices, in violation of Title 18, United States Code, Sections 1029(a)(3) and 2, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2.
According to court documents, on January 5, 2013, a cooperating source (CS) met with Thomason and Maye. During the meeting, Maye told the CS that he had a large number of stolen identities on a flash drive, and discussed using the stolen identities to file fraudulent tax returns and get refunds from those returns. On January 7, 2013, Maye gave the CS a flash drive containing 50 names, dates of birth, and accompanying social security numbers.
On January 8, 2013, the IRS executed a search warrant at Thomason’s apartment. During the search, the IRS recovered numerous electronic storage devices, including computers and flash drives. On two of the flash drives, the IRS found the personal identifying information of thousands of individuals, most of whom were from outside the state of Florida. The personal identifying information included the names, dates of birth, addresses, and social security numbers of numerous individuals.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Strider Dickson.
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.
Thomas Mark Marceau Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on July 17, 2013, before U.S. Magistrate Judge Keith Strong, THOMAS MARK MARCEAU, a 28-year-old resident of Browning and an enrolled member of the Blackfeet Tribe, pled guilty to (2) charges of abusive sexual contact. Sentencing has been set for October 22, 2013. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Ryan G. Weldon, the government stated it would have proved at trial the following:
X.X. disclosed to an FBI agent that MARCEAU had molested him. The assault occurred sometime between the years of 2007 through 2009, and X.X. was less than
Blackfeet Indian Reservation. MARCEAU was in his early twenties.
When interviewed about the sexual assault of X.X., MARCEAU stated that he was close with X.X. When asked about the inappropriate contact that he had with X.X., MARCEAU acknowledged that such sexual contact occurred. Y.Y. was 11-years-old when he disclosed to law enforcement that MARCEAU had molested him. The molestations perpetrated against Y.Y. occurred between 2007 and 2012, and Y.Y. was under 12 years of age during that time. As with X.X., MARCEAU was in his twenties when the molestations against Y.Y. occurred. Y.Y. explained that MARCEAU had been molesting him since Y.Y. was 6-years-old.
Agents also interviewed MARCEAU about sexual contact with Y.Y. MARCEAU admitted that the sexual contact occurred.
MARCEAU faces possible penalties of life in prison, a $250,000 fine and lifetime supervision.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Bureau of Indian Affairs.
Texas Man Indicted for Failure to Pay Child SupportRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lockhart, Texas, man has been indicted by a federal grand jury for Failure to Pay Child Support.
Dylan L. Warner, age 30, was indicted by a federal grand jury on November 6, 2012, for failing to pay over $13,300 in past due child support. He appeared before U.S. Magistrate Judge John E. Simko on July 18, 2013, and pled not guilty to the indictment.
The maximum penalty upon conviction is two years' imprisonment and/or a $250,000 fine, one year supervised release, one additional year upon revocation, a $100 assessment fee to the Federal Crime Victims Fund, and child support restitution amount owing at the time of sentencing.
The charge is merely an accusation and Warner is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Department of Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Thomas J. Wright is prosecuting the case.
Warner was released on bond pending trial. A trial date has not been set.Tangipahoa Parish Men Indicted on Drug and Gun ChargesRead the Press Release
JEFFREY MICHELE, 43; LESLIE MCMORRIS, 55; and SAM MICHELE, III, 40, all residents of Tangipahoa Parish, were indicted today by a federal Grand Jury on two counts involving cocaine conspiracy and distribution charges occurring in Tangipahoa Parish, announced U. S. Attorney Dana J. Boente.
According to the indictment, beginning at a time unknown and continuing until on or about July 7, 2013, JEFFREY MICHELE, LESLIE MCMORRIS and SAM MICHELE, III did knowingly and intentionally conspire and agree to distribute five kilograms or more of cocaine hydrochloride. JEFFREY MICHELE is also charged in the indictment with distribution of a quantity of cocaine hydrochloride.
If convicted on all charges, JEFFREY MICHELE, LESLIE MCMORRIS and SAM MICHELE, III, face a minimum term of imprisonment of ten years, a maximum term of life imprisonment, a fine of $10,000,000, and a minimum term of five years of supervised release following any term of imprisonment.
U. S. Attorney Boente reiterated that the indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
The investigation is being conducted by Special Agents of the Drug Enforcement Administration. The case is being prosecuted by Assistant U. S. Attorney Andre’ Jones.
(Download Indictment )
Suspended Doctor Sentenced for Illegally Dispensing Millions of Pills at Area Weight Loss Clinics, as Well as Tax Evasion with WifeRead the Press Release
HAMMOND, Ind. — A suspended physician who owned weight loss clinics in northwest Indiana and south suburban Chicago was sentenced to two years in federal prison for illegally dispensing millions of pills containing amphetamine-based controlled substances to patients, and he and his wife were also sentenced for federal income tax evasion relating to their operation of the clinics. The defendants, DR. RAKESH ANAND and MEENA ANAND, who owned and managed Doctors Weight Loss Clinics in Merrillville, Ind., and Tinley Park and Orland Park in Illinois, were also ordered to pay $745,872 in restitution to the IRS from nearly $5.2 million that was seized from them and ordered forfeited.
Rakesh Anand, 57, a suspended physician in Illinois and who was also licensed in Indiana, and his wife, Meena Anand, 53, both of Tinley Park, were sentenced yesterday by U.S. District Judge Joseph S. Van Bokkelen in Federal Court in Hammond after both defendants pleaded guilty in January. The U.S. Attorney’s Office in Chicago is handling the prosecution in the Northern District of Indiana. Judge Van Bokkelen fined Rakesh Anand $750,000 and ordered him to begin serving his two-year sentence on Aug. 30. Meena Anand was fined $100,000 and ordered to begin serving her 30-day sentence on Sept. 3.
In addition to the fines, forfeiture, and restitution, the Anands remain civilly liable to the Internal Revenue Service for any and all back taxes and a civil fraud penalty of up to 75 percent of the underpayment plus interest.
The Anands had agreed, and the judge ordered them, to pay restitution of $745,872 to the IRS for taxes they owed on nearly $2 million of unreported income between 2005 and 2008. The restitution is to be paid from funds frozen in a brokerage account when the Anands were indicted in August 2011. In addition, they agreed to forfeit more than $4.45 million in additional funds that were frozen or seized during the investigation, bringing to nearly $5.2 million the total amount of funds being applied to forfeiture and restitution.
Rakesh Anand admitted that between January 2002 and February 2010, he and another physician, Dr. Dinesh Saraiya, purchased and dispensed more than 1 million pills containing Phendimetrazine, a Schedule III controlled substance, and more than 3 million pills containing Phentermine, a Schedule IV controlled substance. The Anands grossed more than $5 million from their operation of the three weight loss clinics.
(Saraiya, 75, of Tinley Park, cooperated in the case and pleaded guilty to conspiracy to distribute controlled substances. He is scheduled to be sentenced on July 30 in Federal Court in Chicago.)
According to court records, between 2002 and February 2010, Rakesh Anand hired Saraiya, who agreed with him to illegally dispense the amphetamine-based controlled substances as weight loss medications to patients without performing physical examinations or any medical tests, and without reviewing patients’ records, obtaining a complete medical history, or providing any subsequent monitoring. In return, Rakesh Anand paid Saraiya based on how many patients he saw and how many pills he dispensed to patients on a daily basis. In dispensing the medications, Rakesh Anand and Saraiya failed to determine whether patients had first made a reasonable effort to lose weight through diet and exercise, a prerequisite to prescribing controlled substances for weight loss. In some instances, Rakesh Anand employed clerks to dispense the controlled substances even though he was not present and had not consulted with them.
During the course of the investigation, several undercover law enforcement agents, including two with slight builds and body mass indexes well below the obesity level, purchased controlled substances at the clinics without any of the appropriate medical protocols.
The sentences were announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois. The investigation was conducted by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service Criminal Investigation Division, the Food and Drug Administration and the Indiana State Police.
The government is being represented by Assistant U.S. Attorneys Matthew Schneider, Diane Berkowitz, and Orest Szewciw.
Suspended Doctor Sentenced for Illegally Dispensing Millions of Pills at Area Weight Loss Clinics, as Well as Tax Evasion with WifeRead the Press Release
U.S. Department of Justice
UnitedStatesAttorney
NorthernDistrictof Illinois
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GaryS. Shapiro EverettMcKinleyDirksenUnitedStatesCourthouse
UnitedStatesAttorney219SouthDearbornStreet,5thFloor
HAMMOND,Ind.—Asuspendedphysician whoownedweightlossclinicsinnorthwest IndianaandsouthsuburbanChicagowassentencedtotwoyearsinfederalprisonforillegally dispensingmillionsofpillscontainingamphetamine-basedcontrolledsubstancestopatients,and heandhiswifewerealsosentencedforfederalincometaxevasionrelatingtotheiroperationof theclinics.Thedefendants,DR.RAKESHANANDandMEENAANAND,whoownedand managedDoctorsWeightLossClinicsinMerrillville, Ind.,andTinleyParkandOrlandParkin Illinois, werealsoordered topay$745,872inrestitution totheIRSfromnearly$5.2million that was seizedfromthemandorderedforfeited.
Rakesh Anand ,57,a suspendedphysicianinIllinoisandwhowasalsolicensedinIndiana, andhiswife,MeenaAnand,53,bothofTinleyPark,weresentenced yesterday byU.S.District JudgeJosephS.VanBokkeleninFederalCourtinHammondafterbothdefendantspleadedguilty inJanuary. TheU.S.Attorney’sOfficeinChicagoishandlingtheprosecutionintheNorthern DistrictofIndiana.JudgeVanBokkelenfinedRakeshAnand$750,000andorderedhim tobegin
serving histwo-yearsentenceonAug.30.MeenaAnandwasfined$100,000andorderedto beginservingher30-daysentenceon Sept.3.
Inadditiontothefines,forfeiture,andrestitution, theAnandsremaincivillyliabletothe InternalRevenueServiceforanyandallbacktaxesandacivilfraudpenaltyofupto75percent of theunderpaymentplusinterest.
TheAnandshadagreed,andthejudgeorderedthem,topayrestitution of$745,872tothe IRSfortaxestheyowedonnearly $2millionofunreportedincomebetween2005and2008. The restitutionistobepaidfromfundsfrozeninabrokerageaccountwhentheAnandswereindicted inAugust2011. Inaddition,theyagreedtoforfeitmorethan$4.45millioninadditionalfunds thatwerefrozenorseizedduringtheinvestigation,bringingtonearly$5.2millionthetotal amountof funds beingappliedtoforfeitureandrestitution.
Rakesh Anand admittedthatbetweenJanuary2002andFebruary2010,heandanother physician, Dr.DineshSaraiya,purchased anddispensedmorethan1millionpillscontaining Phendimetrazine,aScheduleIIIcontrolledsubstance,andmorethan3millionpillscontaining Phentermine,aScheduleIVcontrolledsubstance.TheAnandsgrossedmorethan$5million fromtheiroperationof thethreeweightloss clinics.
(Saraiya,75,ofTinleyPark,cooperated inthecaseandpleadedguiltytoconspiracy to distributecontrolledsubstances. Heisscheduled tobesentenced onJuly30inFederalCourtin Chicago.)
Accordingto court records,between2002 and February2010, RakeshAnand hired Saraiya,whoagreedwithhimtoillegallydispensetheamphetamine-basedcontrolledsubstances asweightlossmedicationstopatientswithoutperformingphysicalexaminationsoranymedical
tests ,andwithoutreviewingpatients’records, obtaining acomplete medicalhistory,orproviding anysubsequentmonitoring. Inreturn,RakeshAnandpaidSaraiyabasedonhowmanypatients hesawandhowmanypillshedispensedtopatientsonadailybasis.Indispensing the medications,RakeshAnandandSaraiyafailedtodeterminewhetherpatientshadfirstmadea reasonableefforttoloseweightthroughdietandexercise, aprerequisite toprescribingcontrolled substancesforweightloss. Insomeinstances,RakeshAnandemployedclerkstodispensethe controlledsubstanceseventhoughhewas notpresentandhadnotconsultedwiththem.
Duringthecourseoftheinvestigation, severalundercoverlawenforcementagents, including twowithslightbuildsandbodymassindexeswellbelowtheobesitylevel,purchased controlledsubstancesattheclinicswithoutanyof theappropriatemedicalprotocols.
The sentences were announcedby Gary S. Shapiro,United States Attorney for the NorthernDistrictofIllinois.Theinvestigation wasconductedbytheFederalBureauof Investigation, theDrugEnforcementAdministration,theInternalRevenueServiceCriminal InvestigationDivision,theFood andDrug AdministrationandtheIndianaStatePolice.
Thegovernment isbeingrepresentedbyAssistantU.S.AttorneysMatthewSchneider, DianeBerkowitz,andOrest Szewciw.
Statement of U.S. Attorney Jenny A. Durkan on the Passing of Kip TokudaRead the Press Release
“With the passing of Kip Tokuda, the Western District of Washington has lost a beloved community leader, an undaunted advocate for children, and a devoted husband, father and friend. His legacy lives in the causes he advanced, the lives he bettered, and the multitude he mentored. Kip never stopped serving. Most recently, he was a valued member of the Community Police Commission, the public’s voice in police reform efforts in Seattle. He brought to that work, as he did to everything he touched, a true moral compass and genuine hope for the future. His voice was strong and respected and, as always, he spoke for the disadvantaged. We miss him.”
A public memorial service will be held at 2 p.m. on Sunday, July 21st, at Kane Hall on the campus of the University of Washington.
St. Louis Man Sentenced for Role in Cocaine ConspiracyRead the Press Release
A St. Louis man who pled guilty on April 11, 2013, in federal court, to being a member of a large cocaine distribution organization, was sentenced on July 19, 2013, the United States for the Southern District of Illinois, Stephen R. Wigginton, announced today. Mario Orduna, 46, was sentenced to 60 months imprisonment, followed by three years of supervised release. Orduna was also ordered to pay a $500 fine and a $100 special assessment. The Court entered an Order directing that Orduna forfeit $18,500 (which represented drug proceeds) to the United States.
To date, twenty-nine other members of the organization, which was responsible for trafficking in more than 150 kilograms of cocaine, have been convicted and sentenced to prison for terms ranging from 21 months to 521 months.
Evidence in support of the indictment was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Participating agencies include the Drug Enforcement Administration (DEA), Internal Revenue Service, Criminal Investigations, the U.S. Immigration and Customs Enforcement Office of Homeland Security Investigations (ICE HSI), Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), U.S. Marshal Service, the Granite City Police Department, Fairmont City Police Department, Collinsville Police Department, Fairview Heights Police Department, Caseyville Police Department, Pontoon Beach Police Department, Park Hills (Missouri) Police Department, the St. Clair County Sheriff’s Department, and the Illinois State Police. This case was assigned to Assistant United States Attorney Randy G. Massey for prosecution.
Sentencing Extortion by A Public OfficialRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced the sentencing of Jarrod “J. D.” Murkerson, 35, a resident of Blakely, Georgia, on July 18, 2013, by the Honorable W. Louis Sands, United States District Judge for the Middle District of Georgia. On March 27, 2013, Mr. Murkerson entered a plea of guilty to Extortion by a Public Official.
Judge Sands sentenced Mr. Murkerson to serve twenty-four (24) months imprisonment, followed by two (2) years supervised release, and a $100 mandatory assessment fee. There is no parole in the federal system.
As part of his plea, Mr. Murkerson admitted that in July 2011, while he was employed with the Early County Sheriff’s Office as an Investigator, he provided information and protection to an illegal drug dealer. Court records revealed that Mr. Murkerson was not aware that the drug dealer was working as a confidential informant with law enforcement. Mr. Murkerson admitted that he received $1000.00 in exchange for the information and protection that was provided to the informant when he transported nine (9) ounces of cocaine through Early County. Mr. Murkerson also admitted that in August 2011, he agreed to sell the confidential informant steroids for $1200.00.
“Anytime a law enforcement officer violates the law that they have taken an oath to uphold, it causes the trust of the people they promised to protect and serve to erode,” said U.S. Attorney Michael Moore.The case was investigated by Federal Bureau of Investigation and the Georgia Bureau of Investigation, and prosecuted by Assistant United States Attorney K. Alan Dasher.
Inquiries regarding the case should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney's Office at (478) 621-2602.
Seattle Man Pleads Guilty to Wire Fraud & Money Laundering for Ponzi Scheme Involving Fake Investments in PeruRead the Press Release
A Seattle man who marketed real estate investment opportunities in Peru pleaded guilty in U.S. District Court in Seattle today to wire fraud and money laundering for his creation and operation of a classic Ponzi scheme, announced U.S. Attorney Jenny Durkan. JOSE L. NINO DE GUZMAN, Jr., 30, ran NDG Investment Group, LLC from 2006 until 2009, when the Washington State Department of Financial Institutions issued a cease and desist order concerning his fraudulent sales of investment opportunities. According to the plea agreement filed in the case, DE GUZMAN raised more than $30 million from over 200 investors for real estate investments in Peru. However, the investments as described to investors did not occur.
DE GUZMAN is scheduled to be sentenced by U.S. District Judge Robert S. Lasnik on November 1, 2013. Pursuant to the terms of the plea agreement, the government will recommend a sentence of 151 months imprisonment.
According to records filed in the case, DE GUZMAN left school at the University of Washington without graduating and at the age of 23 founded NDG Investment Group LLC. Prior to starting the company in September 2006, DE GUZMAN had been employed by U.S. Bank as a teller and then as a personal banker. However, despite his true background, DE GUZMAN solicited investors by telling them he had worked at U.S. Bank for three years as a business and commercial lending officer and specialized in fixed income with a focus on real estate.“This defendant brazenly and persistently defrauded investors by lying about his background and success and misused millions of their dollars for his personal benefit,” said Jenny A. Durkan, U.S. Attorney for the Western District of Washington. “His victims included family members, friends and co-workers who did not know he paid for his glitz with their money. When the scheme crumbled, they sadly learned that Mr. De Guzman had perpetuated a massive fraud.”
DE GUZMAN made numerous misrepresentations about his success and the most basic fundamentals of the investments. For example, DE GUZMAN falsely represented to investors that he had a proven track record of successfully developing real estate through an established company in Peru; that the investors’ funds would be used for specific real estate projects and that the investments were secured by real property in Peru; that investors would get a high rate of return on their investments when the development projects were complete; and that NDG would only receive a portion of the profits upon successful completion of the projects and after all the investors had received their original investment and projected rates of return. These representations were false. Neither DE GUZMAN nor NDG had ever successfully completed any real estate projects in Peru and, despite raising funds for approximately twenty projects, had only purchased a limited number of real properties. No projects ever generated a profit. Nevertheless, NINO DE GUZMAN told the investors their projects were completed or were progressing, and he sent periodic, fraudulent “updates” to investors, including showing “construction” sites for projects in which the land had not even been purchased. Investors’ funds instead were used to fund DE GUZMAN’s lavish lifestyle, including the purchase of a $365,000 diamond ring, a $600,000 yacht, a $250,000 suite at Qwest Field for Seahawks games and a $200,000 Bentley automobile. Moreover, as in a classic Ponzi scheme, DE GUZMAN used millions of dollars of investors’ funds to pay off previous investors to continue the illusion that DE GUZMAN was a successful developer, and to induce additional investors.
“The FBI is pleased that Mr. De Guzman is finally taking responsibility for his actions,” said Special Agent-in-Charge Laura M. Laughlin of the FBI Seattle office. “He exploited friends, loved ones, and coworkers indiscriminately to fund a lavish lifestyle for himself. The FBI stands with the prosecutors and victims in refusing to tolerate such heartless criminal activity.”
DE GUZMAN pitched his investment opportunity at expensive downtown clubs and hotels, and emphasized NDG’s established alliances and relationships with well-known businesses and individuals. Some of the investors were the parents or friends of people employed by NDG, and it was some of these employees who first reported DE GUZMAN to regulators when they became aware of the fraud.
The case was investigated by the Washington State Department of Financial Institutions (DFI), the Internal Revenue Service Criminal Investigations and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Tessa Gorman, Justin Arnold and Aravind Swaminathan, as well as Special Assistant United States Attorney Robert Kondrat, who is a DFI attorney cross-designated to the United States Attorney’s Office to prosecute securities fraud cases.
For additional information please contact Thomas Bates for the United States Attorney’s Office at (206) 553-7970 or [email protected].
Richmond Tax Preparer Sentenced for Preparing False Income Tax ReturnsRead the Press Release
LEXINGTON, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Christopher A. Henry, Special Agent in Charge, IRS Criminal Investigation Division, Nashville Field Office, jointly announced today that a Richmond, KY., man, who prepared false income tax returns, was sentenced to 36 months in federal prison.
U.S. District Judge Karen Caldwell sentenced 58 year-old James Raymond Kennedy for aiding and assisting in the preparation of false income tax returns. Kennedy had previously admitted he promoted tax deductions, to his clients, that were not authorized by law. Kennedy submitted false tax returns using these deductions, which resulted in the U.S> Government losing approximately $345,000. Kennedy’s clients were unaware that the deductions Kennedy used were not authorized under the tax code.
Kennedy pleaded guilty to the charges in August of last year. He operated J.R. Kennedy and Associates from 2006 through April 2009.
Judge Caldwell ordered Kennedy to report on September 30, 2013, to the Bureau of Prisons, to begin serving his sentence.
This investigation was conducted by IRS, Criminal Investigation Division. Assistant U.S. Attorney Robert K. McBride represented the U.S. Attorney’s Office in the case.
Prosecutions Continue in Illegal Re-entry Cases Involving Those with Prior Criminal RecordsRead the Press Release
MINNEAPOLIS -- In the District of Minnesota, court action continued this week in St. Paul for two separate cases regarding Mexican nationals who entered the United States illegally after being deported as criminals. In each case, the individual was charged with one count of illegal re-entry after removal.
In the first case, Lorenzo Armendariz-Sanchez, age 45, pleaded guilty earlier today. He was indicted on May 21, 2013, and entered his plea before United States District Court Judge Donovan W. Frank. In his plea agreement, Armendariz-Sanchez admitted that on April 21, 2013, authorities found him in the U.S. illegally after he had been previously deported. His deportation followed a 1998 Faribault County conviction for burglary in the first degree. On April 21, authorities identified Armendariz-Sanchez, also known as Lorenzo Sanchez Armendariz, as an alien with a criminal record while he was in the Blue Earth County Jail, where he was being held after an arrest for burglary and domestic assault.
Identification was made through the U.S. Immigration and Customs Enforcement’s (“ICE”) Criminal Alien Program (“CAP”). One of the goals of that program is to locate criminal aliens incarcerated in federal and state prisons, as well as in local jails, and prevent them from being released into society by having them federally prosecuted.
For his crime, Armendariz-Sanchez faces a potential maximum penalty of 20 years in federal prison, followed by deportation. Judge Frank will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by ICE’s Enforcement and Removal Operations (“ICE ERO”). It is being prosecuted by Assistant U.S. Attorney Katharine T. Buzicky.
In the second case, on July 18, 2013, U.S. District Court Judge Paul A. Magnuson sentenced Mario Mireles-Flores, age 24, to 58 months. He was indicted on January 8, 2013, and pleaded guilty on April 2, 2013. In his plea agreement, Mireles-Flores admitted that on December 5, 2012, authorities found him in the U.S. illegally after he had been previously deported. His deportation followed a 2010 McLeod County conviction for escape from custody. Authorities recently identified him as an alien with a criminal record while he was serving a sentence in the Sibley County Jail for providing false information to police. That identification was made through the CAP.
This case was the result of an investigation by ICE ERO.
In some instances, federal prosecution occurs only after the individual has been prosecuted for the recent underlying offense. Both men will remain in custody until their current federal cases are resolved. To learn more about the CAP, visit www.ice.gov/criminal-alien-program/Powhatan Store Owners Each Sentenced to 24 Months for Conspiring to Structure $10,000,000 Obtained from Illicit Cigarette SalesRead the Press Release
RICHMOND, Va. –Jayant Khare, 51, and Loveleen Khare, 56, both of Powhatan, Va., were each sentenced today to 24 months for conspiring to structure more than $10,000,000 in cash transactions for the purpose of preventing banking institutions from reporting those transactions to the Internal Revenue Service (IRS).
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; John P. Torres, Special Agent in Charge for ICE’s Homeland Security Investigations (HSI), Washington, D.C.; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office, made the announcement after the sentencing by United States District Judge Henry E. Hudson.
Jayant Khare and Loveleen Khare both pled guilty to the conspiracy charge on April 29, 2013, and April 17, 2013, respectively.
According to documents filed with the court, Jayant and Loveleen Khare owned and operated two cigarette retail stores known as Cigarettes America Plus and Cigarettes America at Westchester. Jayant and Loveleen Khare admitted that from October 2011 to December 2012, they conspired to structure over $10,000,000 in U.S. currency by splitting up cash deposits into accounts maintained at six banks, all in an effort to prevent the banks from filing Currency Transaction Reports with the IRS, which must be filed on cash deposits of $10,000 or greater. The structured cash was obtained by selling large quantities of cigarettes to out-of-state individuals who were known to be transporting the cigarettes to locations outside of the Commonwealth of Virginia for resale as contraband cigarettes because the appropriate state taxes were not paid on them. The sales took place at Jayant and Loveleen Khare’s personal residence and from the back door of the retail stores.
This case was investigated by HSI, the Internal Revenue Service - Criminal Investigation, and the Tobacco Enforcement Unit of the Office of the Attorney General of Virginia. Assistant United States Attorneys Dominick S. Gerace and Laura Colombell Marshall 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.Portland Man Sentenced in Online Threat CaseRead the Press Release
The Creator of Malicious Websites is Sentenced to Federal PrisonPORTLAND, Ore. – The creator of websites that facilitated the posting of malicious and defamatory information about people was sentenced to federal prison today for making a threatening communication. United States District Judge Marco A. Hernandez sentenced Cyrus Andrew Sullivan to 24 months in federal prison for making a threatening communication to a victim of one of Sullivan’s websites. Sullivan, 30, resided in Portland, Oregon before his arrest in the case.
The case arose from an investigation involving websites created by Sullivan, which facilitated the posting of malicious and defamatory information about people. The people about whom such information had been posted were informed they could pay a fee to another website created by Sullivan to have some of the information removed. Sullivan’s conduct gained so much notoriety that he was the subject of a national television show hosted by Anderson Cooper in March of 2012.
One of Sullivan’s victims, a woman from Portland, Oregon, demanded that Sullivan remove false and malicious information about her on one of the websites. When Sullivan refused to remove the information unless she paid him $10,000, she fought back. She aggregated publicly available information about Sullivan and posted it online for other people, including other victims, to see. On June 4, 2012, when Sullivan realized what the victim had done, he threatened to kill her. On June 7, 2012, Sullivan was arrested by detectives with the Portland Police Bureau, and has been in custody since that time. He has prior convictions for criminal mischief in the second degree, assaulting a public safety officer, harassment, and recklessly endangering other persons.
The defendant was initially charged in Multnomah County Circuit Court with coercion, but that case was dismissed in favor of federal prosecution. On April 15, 2013, Sullivan pleaded guilty to making a threatening communication. In pleading guilty, he admitted that he sent an email message via the Internet containing a threat to kill another person, which a reasonable person would take as a serious expression of an intention to inflict bodily harm. His sentence was enhanced because he made multiple threats. His sentence was also enhanced because he engaged in obstructive conduct which involved threatening the victim and a judge during a release hearing, and threatening an investigator with the Oregon Consumer Protection Section of the Oregon Department of Justice.
Upon release from custody, Sullivan will serve a three year period of supervised release. During his supervised release he must abide by a number of conditions which include mental health counseling, and restricted access to computers and the Internet.
The case was investigated by the Portland Police Bureau, the Oregon Consumer Protection Section of the Oregon Department of Justice, and the Federal Bureau of Investigation, with the assistance of the Multnomah County District Attorney’s Office. The case was prosecuted by Assistant U. S. Attorney Sean B. Hoar.
Pine Ridge Couple Sentenced for Involuntary ManslaughterRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, couple convicted of Involuntary Manslaughter were sentenced on July 11, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Whitnee Eagle, age 25, and Abraham Silas Red Cloud, age 31, were each sentenced to nine months' custody, three years of supervised release, and ordered to pay $100 to the Federal Crime Victims Fund.
Eagle and Red Cloud were indicted for Felony Child Abuse and Neglect and Involuntary Manslaughter by a federal grand jury on July 24, 2012. The charges stemmed from an incident on June 26, 2012, when Eagle and Red Cloud had been drinking large quantities of alcohol, rolled over on their five-month-old son who was sleeping in the same bed, and suffocated him.
Eagle pled guilty to Involuntary Manslaughter on March 12, 2013, and Red Cloud pled guilty to Involuntary Manslaughter on March 13, 2013.
This case was investigated by the Federal Bureau of Investigation, the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Eagle and Red Cloud were immediately turned over to the custody of the U.S. Marshal.