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Monday 1 July 2013
Somerset County Resident Pleads Guilty in Cocaine Trafficking SchemeRead the Press Release
JOHNSTOWN, Pa. - A resident of Winder, Pa., pleaded guilty in federal court to a charge of conspiracy to distribute cocaine, United States Attorney David J. Hickton announced today.
Jamie H. Porcher, 28, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that from Nov. 2011 to July 18, 2012, Porcher conspired to possess and distribute 500 grams or more of cocaine.
Judge Gibson scheduled sentencing for Dec. 3, 2013, at 11 a.m. The law provides for a total sentence of 40 years in prison, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Pending sentencing, the court continued Porcher on bond.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Safe Streets Task Force initiative comprised of the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, the Pa. Attorney General's Office, the Blair County Drug Task Force, the Cambria County Drug Task Force, the Somerset County Drug Task Force, the Roaring Spring Borough Police Dept. and the Paint Township Police Dept. conducted the investigation that led to the prosecution of Porcher.
Sevierville Developer Receives Five Year Sentence for Wire and Bank Fraud Conspiracy and Money Laundering in $6 Million Mortgage Fraud SchemeRead the Press Release
KNOXVILLE, Tenn. – Jeffrey Whaley, 49, of Sevierville, Tenn., was sentenced on July 1, 2013, by the Honorable Thomas W. Phillips, U.S. District Court Judge, to serve five years in prison for his May 2012 federal convictions for wire fraud, bank fraud, money laundering, all arising from a mortgage fraud scheme. Whaley’s sentencing today followed his co-defendant and Sevierville title attorney Jerry Kerley’s four-year sentence imposed on June 6, 2013.
Whaley and Kerley were convicted of conspiring to defraud Citizens Bank, located in New Tazewell, Tenn., and SunTrust Mortgage, Inc., located in Richmond, Va., through a mortgage fraud scheme. The conspiracy involved a "straw borrower" mortgage fraud scheme in which straw borrowers were induced to obtain mortgage loans in their names based on promises that they would not have to make a down payment or mortgage payments for the property, would receive cash at closing, and would share in the profit following a resale of the property. As part of the conspiracy, materially false representations were made to Citizens Bank and SunTrust Mortgage, which, among other things, included false representations related to the straw borrowers’ source of funds for down payments and amounts recorded as "cash from borrower" on HUD-1 Settlement Statements and loan applications, for the purpose of inducing Citizens Bank and SunTrust Mortgage to disburse the mortgage loan proceeds it had wired to and entrusted with Kerley's title company Guaranty Land Title.
Kerley and Whaley concealed eight real estate transactions from Citizens Bank and SunTrust Mortgage that the borrower did not provide at closing the money identified as the "cash from borrower" on the HUD-1 Settlement Statement. In those eight transactions, Citizens Bank and SunTrust Mortgage, in total, wired more than $6 million in loan proceeds to Guaranty Land Title Company for disbursement. Kerley, a Tennessee licensed attorney, was the owner of Guaranty Land Title Company where the fraudulent loans were closed. Whaley conducted business through a company known as GBO Enterprises which received substantial sums of money from the loan proceeds. Kerley and Whaley committed money laundering offenses through financial transactions that involved proceeds from the mortgage fraud scheme.
“As we know from the all too recent financial crisis, fraud on mortgage lenders has the potential to disrupt our nation’s economic stability. The five- and four-year prison sentences for Whaley and Kerley demonstrate that mortgage fraud will be vigorously prosecuted by the U.S. Department of Justice,” said U.S. Attorney Bill Killian.
This investigation was conducted jointly by the Internal Revenue Service, Criminal Investigation, Federal Bureau of Investigation, and United States Secret Service. Assistant U.S. Attorneys Trey Hamilton and Zac Bolitho represented the United States.
San Anselmo Resident Sentenced to 5 months for Tax FraudRead the Press Release
SAN FRANCISCO, Calif. – John Kieran Hynes was sentenced today to 5 months in prison for filing a false tax return, announced United States Attorney Melinda Haag and IRS-CI Special Agent in Charge José M. Martinez.
According to court documents, during 2005, Hynes was the owner of Newtown Construction. Hynes admitted that when he received check payments for contracted construction services rendered during the 2005 tax year, he would either deposit the entire check into his business bank account, cash the entire amount of the check, or cash a portion of the check and deposit the remainder of the check into his business account. The amount Hynes received back in cash when he deposited only a portion of the check was called a “less-cash withdrawal.”
Hynes’ bookkeeper relied on the deposited amounts shown on his monthly bank statements to determine his gross business receipts in 2005. Hynes intentionally did not tell his bookkeeper about the less-cash withdrawals to prevent his bookkeeper from including the less-cash withdrawal amounts among the gross receipts that the bookkeeper tracked in the company accounting records.
In order to file his 2005 tax return, Hynes provided his tax return preparer with the company accounting records prepared by his bookkeeper. Hynes knew those accounting records understated the gross receipts earned under the name Newtown Construction because the gross receipts recorded did not include the less-cash withdrawals.
On his 2005 tax return, Hynes knowingly failed to report additional gross receipts of $214,595 earned by Newtown Construction which resulted in a tax loss to the United States of $66,524.
On March 12, 2013, Hynes, 46, of San Anselmo, California, pleaded guilty to one count of filing a false tax return.
In addition to 5 months imprisonment, the Court imposed one year of supervised release including 5 months of home detention, a $3,000 fine, and restitution of $66,524, to the Internal Revenue Service.
Special Assistant United States Attorney Charles Parker is prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Rosebud Man Sentenced for Assaulting, Resisting, or Impeding Certain OfficersRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man convicted of Assaulting, Resisting, or Impeding Certain Officers was sentenced on June 28, 2013 by U.S. District Judge Mark A. Moreno.
Jesse Young, age 36, was sentenced to 12 months in custody and $25 to the Federal Crime Victims Fund.
Young was indicted by a federal grand jury on December 11, 2012, and pled guilty to the charge on March 15, 2013.
The conviction stems from an incident that took place on May 29, 2012 when the victim was escorting Young to a restraint chair. Young was non-compliant and spat at the victim, hitting the victim with saliva on his face and ear.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
Young was remanded to the custody of the U.S. Marshals Service.
Rosebud Man Sentenced for Assaulting, Resisting, or Impeding Certain OfficersRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man convicted of Assaulting, Resisting, or Impeding Certain Officers was sentenced on June 28, 2013 by U.S. District Judge Mark A. Moreno.
Jesse Young, age 36, was sentenced to 12 months in custody and $25 to the Federal Crime Victims Fund.
Young was indicted by a federal grand jury on December 11, 2012 and pled guilty to the charge on March 15, 2013.
The conviction stems from an incident that took place on May 29, 2012, when the victim was escorting Young to a restraint chair. Young was non-compliant and spat at the victim, hitting the victim with saliva on his face and ear.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
Young was remanded to the custody of the U.S. Marshals Service.
Restaurateur Pleads Guilty to Income Tax EvasionRead the Press Release
PITTSBURGH, Pa. - A resident of Presto, Pa., pleaded guilty in federal court to a charge of federal income tax evasion, United States Attorney David J. Hickton announced today.
Donald J. DeBlasio pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that, as owner of DeBlasio's, the defendant engaged in the practice of "skimming" cash from restaurant sales, resulting in a total tax loss of $341,128.62 from the filing of false personal, corporate and payroll tax returns during the years 2007-2009.
Judge Cercone scheduled sentencing for 11 a.m. on Dec. 3, 2013. The law provides for a total sentence of five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Pending sentencing, the court released the defendant on bond.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation conducted the investigation that led to the prosecution of DeBlasio.
Redby Man Pleads Guilty to Assaulting Another with A MacheteRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 19-year-old Redby man pleaded guilty to assaulting another person with a machete while in Redby, a community on the Red Lake Indian Reservation. Dale Clinton White, Jr., pleaded guilty to one count of assault resulting in serious bodily harm. White, who was indicted on May 6, 2013, entered his plea before United States District Court Chief Judge Michael J. Davis.
In his plea agreement, White admitted that on March 22, 2013, he repeatedly struck another man with a machete as that man slept in the bedroom of a Redby residence. As a result of the assault, the victim suffered fractures to the skull, left arm, and front sinus, as well as lacerations on the scalp, face, and arms. The victim also had soft tissue damage and hemorrhagic shock, which required multiple blood transfusions.
For his crime, White faces a potential maximum penalty of ten years in federal prison. Judge Davis will determine his sentence at a future hearing, yet to be scheduled.This case is the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Clifford B. Wardlaw.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.President and Project Manager of Hubtec International Corporation SentencedRead the Press Release
Young C. Kim, President and project manager of co-defendant Hubtec International Corporation (“Hubtec”), was sentenced to two years of probation and ordered to pay a $200 special assessment fee based upon his participation in defrauding the U.S. Department of Transportation Federal Highway Administration (“FHWA”) and the Government of Guam Department of Public Works in connection with Hubtec’s contract to reconstruct and rehabilitate the Route 2 culverts and Cetti Bay slide repair in Agat and Umatac. Funded in part under the American Recovery and Reinvestment Act (“ARRA”) of 2009, the contract required that all steel and iron that were to be permanently incorporated into the project be manufactured in the U.S. pursuant to the Buy America requirement unless FHWA granted a waiver. Kim and Hubtec falsely represented that they used U.S.-made reinforcement steel bars for the project, when in fact, the defendants knew they incorporated Korean-made reinforcement steel bars which were not in compliance with applicable Buy America requirements. The Honorable Ramona V. Manglona, Designated Chief Judge, sentenced Kim in the U.S. District Court of Guam on June 27, 2013.
Kim pleaded guilty in October 29, 2012 to two counts of making false statements in connection with a highway project. The FHWA has debarred Kim and Hubtec for its willful violation of the Buy America provisions for a period of three years which has the effect of excluding them from being a participant or principal in federally-funded programs and projects unless an agency grants an exception. The sentencing for Hubtec is set for August 14, 2013 at 1:30 p.m.
The investigation was conducted by the Federal Bureau of Investigation (“FBI”) and the U.S. Department of Transportation, Office of Inspector General (“DOT-OIG”). The case was handled by Assistant U.S. Attorney Marivic P. David.
Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, stated that “this prosecution reflects that strong commitment of the U.S. Attorney’s Office, FBI, and DOT-OIG to ensure that ARRA funds are used for their intended purpose.”Pittsburgh Man Pleads Guilty to Drug ChargesRead the Press Release
PITTSBURGH, Pa. - A Pittsburgh resident pleaded guilty in federal court to charges of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Donald Lyles a/k/a Chief, 39, pleaded guilty to two counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that on or about April 25, 2013, Lyles possessed with intent to distribute 100 grams or more of a mixture and substance containing a detectable amount of heroin, a Schedule I controlled substance.
Judge Cercone scheduled sentencing for Dec. 3, 2013 at 10:00 a.m. The law provides for a total sentence of not less than 10 years to a maximum of life in prison, a fine not to exceed $8,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorney Charles A. Eberle is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Drug Enforcement Administration, and the Pennsylvania State Police conducted the investigation that led to the prosecution of Donald Lyles.
Pine Ridge Man Found Guilty of Firearm OffenseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota man indicted for Felon in Possession of a Firearm has been found guilty by a federal jury.
Timothy George Buckman, age 28, was convicted by a federal jury on June 26, 2013 for the firearm offense.
He was indicted in April 2013 following an investigation conducted by the Bureau of Indian Affairs Office of Justice Services and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The investigation produced evidence from the social media site Facebook, where pictures were posted of Buckman holding a 12-gauge shotgun.
The maximum penalty upon conviction is 10 years imprisonment and/or a $250,000 fine.
The charge stems from an incident occurring between January and September 2012 when Buckman possessed a 12-gauge shotgun. A prior felony conviction in 2009 prohibits Buckman from possessing a firearm.
The case was prosecuted by Assistant United States Attorney Sarah B. Collins. A sentencing date has not been set.
Pierre Woman Charged with Theft from an Indian Tribal OrganizationRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pierre, South Dakota woman has been indicted by a federal grand jury for Theft From an Indian Tribal Organization.
Ravae Bowman, age 40, was indicted by a federal grand jury on June 12, 2013. She appeared before U.S. Magistrate Judge Mark A. Moreno on June 27, 2013 and pled not guilty to the indictment.
The maximum penalty upon conviction is up to 5 years in custody, a $250,000 fine, or both; 3 years of supervised release; and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to an alleged embezzlement in October 2012 from a Subway store in Eagle Butte when Bowman was the manager. The Subway store is an entity of the Cheyenne River Sioux Tribe Telephone Authority and the Cheyenne River Sioux Tribe.
The charge is merely an accusation and Bowman is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Mikal Hanson is prosecuting the case. Bowman was released to a third party custodian pending trial.
A trial date has not been set.
Parole Officers Charged with Accepting PayoffsRead the Press Release
HOUSTON – Four parole officers from two Texas Department of Criminal Justice (TDCJ) offices in Houston have been indicted for accepting payoffs from parolees, United States Attorney Kenneth Magidson announced today along with FBI Special Agent in Charge Stephen L. Morris, Brad Livingston, TDCJ Executive Director and Bruce Toney, Inspector General of TDCJ – Office of Inspector General (OIG).
"Public officials suspected of corruption can undermine our trust and confidence in government and can tarnish virtually every aspect of American society,” said Morris. “Despite the fact that the vast majority of our country’s public officials are honest hard working Americans, who have dedicated their lives to serve the American people, there are unfortunately a small number who allegedly make decisions for the wrong reasons. The FBI will continue to pursue public corruption as a top priority and encourages anyone with information about potential wrongdoing by a public official to please contact the FBI."
April L. Carson, 35, of Missouri City, and Crystal M. Washington, aka Crystal Bureau, 52, of Houston, were employed at the TDCJ office located at 2410 Hamilton Street in Houston, while Darlene J. Muhammad, 42, and Ernie Rogers, 56, both of Houston, worked at the Houston TDCJ Parole Office at 8345 Telephone Road.
The four were taken into custody today and are expected to make their initial appearances before U.S. Magistrate Judge George Hanks at 2:00 p.m. this afternoon.
“These arrests are the result of an effective partnership with TDCJ - OIG and other law enforcement entities,” said Livingston. “We fully support their efforts to investigate, arrest and ultimately prosecute employees that are suspected of breaking the law.”
The indictment, unsealed today, indicates all of the defendants are responsible for the supervision of inmates within the state of Texas. Included in this responsibility is the supervision of parolees who travel between states and the supervision of their activities to ensure they do not engage in criminal conduct.
Each parole officer named in the indictment allegedly chose to accept money from a parolee in order to allow the parolee to continue his/her illegal narcotics trafficking and distribution activity. Specifically, the indictment alleges each officer accepted payoffs from parolees in the amount of $1000 - $3000 on at least one occasion in order to allow them to continue their criminal behavior.
“The alleged actions of these employees can erode the public’s confidence and damage the integrity of parole officers across the state that perform their duties faithfully every day,” said Toney. “We are committed to rooting out suspected corruption within the criminal justice system.”
If convicted, each faces up to 20 years imprisonment and a possible $250,000 fine.
Anyone suspecting criminal activity or abuse within the TDCJ can make a report by calling the toll-free TDCJ waste/fraud abuse hotline at 1-866-372-8329.
The operation was a combined public corruption task force effort conducted by the FBI, Texas Rangers, Houston Police Department and Office of Inspector General for the Texas Department of Criminal Justice. The case is being prosecuted by Southern District of Texas with the assistance of the Harris County District Attorney’s Office.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Parole Officers Charged with Accepting PayoffsRead the Press Release
HOUSTON – Four parole officers from two Texas Department of Criminal Justice (TDCJ) offices in Houston have been indicted for accepting payoffs from parolees, United States Attorney Kenneth Magidson announced today along with FBI Special Agent in Charge Stephen L. Morris, Brad Livingston, TDCJ Executive Director and Bruce Toney, Inspector General of TDCJ – Office of Inspector General (OIG).
"Public officials suspected of corruption can undermine our trust and confidence in government and can tarnish virtually every aspect of American society,” said Morris. “Despite the fact that the vast majority of our country’s public officials are honest hard working Americans, who have dedicated their lives to serve the American people, there are unfortunately a small number who allegedly make decisions for the wrong reasons. The FBI will continue to pursue public corruption as a top priority and encourages anyone with information about potential wrongdoing by a public official to please contact the FBI."
April L. Carson, 35, of Missouri City, and Crystal M. Washington, aka Crystal Bureau, 52, of Houston, were employed at the TDCJ office located at 2410 Hamilton Street in Houston, while Darlene J. Muhammad, 42, and Ernie Rogers, 56, both of Houston, worked at the Houston TDCJ Parole Office at 8345 Telephone Road.
The four were taken into custody today and are expected to make their initial appearances before U.S. Magistrate Judge George Hanks at 2:00 p.m. this afternoon.
“These arrests are the result of an effective partnership with TDCJ - OIG and other law enforcement entities,” said Livingston. “We fully support their efforts to investigate, arrest and ultimately prosecute employees that are suspected of breaking the law.”
The indictment, unsealed today, indicates all of the defendants are responsible for the supervision of inmates within the state of Texas. Included in this responsibility is the supervision of parolees who travel between states and the supervision of their activities to ensure they do not engage in criminal conduct.
Each parole officer named in the indictment allegedly chose to accept money from a parolee in order to allow the parolee to continue his/her illegal narcotics trafficking and distribution activity. Specifically, the indictment alleges each officer accepted payoffs from parolees in the amount of $1000 - $3000 on at least one occasion in order to allow them to continue their criminal behavior.
“The alleged actions of these employees can erode the public’s confidence and damage the integrity of parole officers across the state that perform their duties faithfully every day,” said Toney. “We are committed to rooting out suspected corruption within the criminal justice system.”
If convicted, each faces up to 20 years imprisonment and a possible $250,000 fine.
Anyone suspecting criminal activity or abuse within the TDCJ can make a report by calling the toll-free TDCJ waste/fraud abuse hotline at 1-866-372-8329.
The operation was a combined public corruption task force effort conducted by the FBI, Texas Rangers, Houston Police Department and Office of Inspector General for the Texas Department of Criminal Justice. The case is being prosecuted by Southern District of Texas with the assistance of the Harris County District Attorney’s Office.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Parkersburg Man Who Possessed More Than A Kilo of Cocaine During Drug Buy Pleads Guilty to Federal Drug and Firearm ChargesRead the Press Release
Curry fired a .40 caliber pistol during attempt to escape police custody
CHARLESTON, W.Va. – A Parkersburg man faces a mandatory minimum of 10 years to life in prison after pleading guilty today to federal drug and firearm charges. Richard Curry Jr, also known as “Cheese” and “Curtus Javon McDonald,” 31, pleaded guilty to possession with intent to distribute cocaine and discharging a firearm during a drug trafficking crime. On May 3, 2013, a confidential informant working with the Metropolitan Drug Enforcement Network Team (MDENT) arranged to purchase cocaine from Curry. Police observed Curry, who was driving a tan Hummer SUV, pull into the parking lot of the informant’s Charleston apartment complex. Curry later entered the informant’s residence where he was immediately grabbed by police. Curry, who began resisting arrest, fired a single shot from a Taurus .40 caliber pistol that he had hidden inside of his jacket. No one was injured as a result of the shooting. Police determined that the bullet entered into the floor of the residence.
A short time later, officers placed Curry under arrest. Police conducted a search of the defendant and found a package wrapped in electrical tape hidden on Curry’s person. The package contained cocaine weighing 1211 grams.
Police also obtained a search warrant for the defendant’s Hummer SUV. During a search of the vehicle, officers found 68 grams of crack cocaine and 73 grams of cocaine. Officers performed a check of the vehicle’s registration and determined that it had been registered to Curtus Javon McDonald.
On May 6, 2013, Curry appeared before United States Magistrate Judge Dwayne L. Tinsley, for an initial appearance on a criminal complaint that was filed against him. During the hearing, Curry represented to the Court that his name was Curtus Javon McDonald. However, after a fingerprint scan was performed on the defendant by the United States Marshals Service, his true identity was determined to be that of Richard L. Curry Jr.
Curry is responsible for distributing cocaine to a confidential informant on at least six other occasions. During the drug transactions, Curry distributed half-kilogram quantities of cocaine in exchange for cash.
Curry faces up to 20 years on Count One (cocaine possession charge) and a consecutive mandatory minimum of 10 years to life in prison on Count Two (use of firearm charge) when he is sentenced on October 21, 2013 by United States District Judge Thomas E. Johnston.
The investigation was conducted by MDENT and the DEA. Assistant United States Attorney Monica D. Coleman is in charge of the prosecution.
Owner of Bay Area Home Health Care Providers Charged with Tax Fraud and Structuring Cash TransactionsRead the Press Release
OAKLAND, Calif. – Muzaffar Hussain, of Hayward, was charged on June 25, 2013 with four counts of tax evasion, 13 counts of filing a false tax return, 18 counts of willful failure to truthfully account for and pay payroll taxes, and nine counts of structuring transactions to evade reporting requirements, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation (IRS-CI) Special Agent in Charge José M. Martinez.
According to the indictment, between July 2004 and December 2008, Hussain owned and operated Cross Roads Health Care and Hospice, Inc. (Cross Roads). As the corporate officer, he was responsible for collecting, accounting for and paying over Cross Roads’ employment withholdings taxes to the IRS. For a period of 18 quarters, Hussain failed to truthfully account for and pay over the required withholdings taxes to the IRS, in the amount of $534,728.15.
It is further alleged that Hussain filed tax returns with understated income for tax years 2005 and 2006, and he failed to file personal income returns altogether for 2007 and 2008. During all four years, according to the indictment, Hussain used corporate funds to pay personal expenses including payments for rent, marriage dissolution obligations, luxury cars, motor-home, and motorcycles in an attempt to conceal from the IRS his true and correct income.
The Indictment further alleges that Hussain signed and filed corporate income tax returns on behalf of three separate home health care providers that omitted gross receipts earned by the businesses. It is alleged that from 2004 through 2008, Hussain omitted gross receipts from the Corporate Income Tax Returns of Cross Roads in the amounts of $506,925, $795,384, $901,794, $372,930 and $312,992. From 2004 through 2006, Hussain allegedly omitted gross receipts from the Corporate Income Tax Returns he signed on behalf of Horizon Health Care, Inc. in the amounts of $264,928, $603,702 and $157,285. The indictment also alleges that from 2004 through 2008, Hussain omitted gross receipts from the Corporate Income Tax Returns of Sunshine Home Health Care, Inc. in the amounts of $363,917, $648,197, $140,390, $736,542 and $277,968.
The Indictment further alleges that between March 6, 2010, and May 24, 2010, Hussain knowingly structured money transactions for the purpose of evading reporting requirements.
The maximum statutory penalty for each count of tax evasion, in violation of Title 26, U.S.C § 7201 is five years in prison and a fine of $250,000. The maximum penalty for willful failure to collect or pay over taxes in violation of Title 26, U.S.C § 7202 is five years in prison and a fine of $250,000. The maximum statutory penalty for each count of filing a false tax return, in violation of Title 26, U.S.C § 7206(1) is three years in prison and a fine of $250,000. The maximum statutory penalty for each count of structuring transactions to evade the reporting requirement, in violation of Title 31, U.S.C § 5324(a)(3) is five years in prison and a fine of $250,000.
Special Assistant U.S. Attorney Charles Parker is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Operators of University of Louisville Hospital to Pay $2,833,408.60 to Settle False Medicare BillingsRead the Press Release
– University self-reported the over-billing for professional services
LOUISVILLE, Ky. – University Medical Center, doing business as University of Louisville Hospital, has voluntarily entered into a settlement agreement with the United States to pay $2,833,408.60 to settle allegations that it submitted or caused to be submitted false claims for payment to the Medicare program in violation of the Federal False Claims Act, announced David J. Hale, United States Attorney for the Western District of Kentucky, and the Office of Inspector General of the Department of Health and Human Services.
“Pursuing health care fraud is a priority of my Office, the Department of Justice, and the Department of Health and Human Services,” stated David J. Hale, United States Attorney for the Western District of Kentucky. “Those that do not follow the rules designed to safeguard our nation’s health care resources will be held to account.”
University of Louisville Hospital operates a separate fast track unit within the emergency department to address non-urgent care. This in-house immediate care center, FirstCare, is staffed by UMC-employed physician assistants (PAs) and nurse practitioners (NPs) under the direction of the Department of Emergency Medicine physicians – who in turn operate as University Emergency Medicine Associates.
According to the settlement agreement, from January 1, 2006 through December 31, 2010, the salaries and benefits paid to FirstCare PAs and NPs were claimed on UMC cost reports filed with Medicare between 2006-2010. At the same time, University Emergency Medicine Associate (UEMA) physicians generally treated the FirstCare PAs and NPs as their own employees including, to various degrees, billing and collecting from Medicare for their professional services.
In April 2011, counsel for UMC disclosed to the United States Attorney’s Office for the Western District of Kentucky that UMC may have violated federal law concerning the relationships it had with certain health care providers.
University Medical Center, Inc. is the 501(c) (3) organization which leases, operates and manages the University of Louisville Hospital and the James Graham Brown Cancer Center. UMC bills federal government health care programs, including Medicare, the TRICARE Program and Medicaid, for services it performs.
This settlement agreement is neither an admission of liability by UMC nor a concession by the United States that its claims are not well founded.
This matter was handled by Assistant U.S. Attorney Benjamin S. Schecter with assistance from the Department of Health and Human Services, Office of Counsel to the Inspector General.
Operation Winter's End Results in Drug Trafficking Charges Against 22 IndividualsRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced today the unsealing of a federal Indictment that charges a total of 22 defendants with drug trafficking offenses. The Indictment, which was filed on March 26, 2013, and unsealed today, is the result of Operation Winter’s End, a long-term, multi-agency investigation into the activities of an alleged drug trafficking organization that has purportedly been dealing heroin and methamphetamine on and around the Fort Berthold Reservation in northwest North Dakota.
In Bismarck, U.S. Attorney Purdon said, “The charges filed as a result of Operation Winter’s End are a first step to address the increased organized drug distribution activities on the Fort Berthold Reservation and in northwestern North Dakota. This Indictment will help make both reservation and non-reservation communities in the Bakken oil patch stronger and safer. The U.S. Attorney’s Office is committed to an anti-organized crime strategy in the Bakken oil patch that is built on close cooperation between federal, state, local, and tribal law enforcement agencies. With the help of these law enforcement partners, we will continue to do everything we can to address the growing threat of organized crime in this area.”
Special Agent in Charge Chris Warrener of the Federal Bureau of Investigation’s Minneapolis Field Office which includes North Dakota said, “Today’s 22 defendant Indictment of an ongoing investigation named Operation Winter’s End underscores the hard work and coordination of the FBI, BIA, various tribal law enforcement personnel of the Fort Berthold Reservation, along with the prosecutorial skills of the United States Attorney’s Office of North Dakota. This multi-jurisdictional investigation has struck a blow against a large national drug trafficking organization, which has plagued the good people of North Dakota.”
“Jurisdictional issues exist throughout Indian Country and working together with other federal, state and local agencies in a common goal is essential for Indian Country law enforcement,” said Bureau of Indian Affairs Special Agent in Charge Mario RedLegs. “This Operation affirms to the people of Fort Berthold that we are watching vigilantly and ensuring that they do have a safe place to live.”
Those charged with conspiracy to distribute and possess with intent to distribute methamphetamine and conspiracy to distribute and possess with intent to distribute heroin:
Horatio Lopez, a/k/a “Happy,” 33, Wasco, Calif.
Oscar Lopez, 28, Wasco, Calif.
Nathan David McKenzie, a/k/a/ Nate McKenzie, 33, Trenton, N.D.
Jaelyn Faith Crows Breast, 21, New Town, N.D.
Cassie Lynn Packineau, 22, New Town, N.D.
Donald T. Rasmussen, 26, New Town, N.D.
Kealoha Asaga Aulaumea, a/k/a “Sunga,” 21, New Town, N.D.
Bonita June Casarez, 29, New Town, N.D.
LaToya Christine Lone Bear, 31, Mandaree, N.D.
Guy Curtis Slates, 58, New Town, N.D.
Ashly June White, 27, New Town, N.D.
Elizabeth Ann Rodriguez, a/k/a Elizabeth Lockwood, a/k/a Liz Rodriguez, 27, New Town, N.D.
Sean Ray Conklin, 35, New Town, N.D.
Connie Rae Azure, 38, New Town, N.D.
Michael Jason Smith, 32, Evergreen, Colo.
Tomas David Hale, 20, New Town, N.D.
Gary Ray Foote, Jr., a/k/a “Bear,” 20, New Town, N.D.
Hailey Jo Deane, a/k/a Hailey Baker, 25, New Town, N.D.
Avis Gean Finley, 47, New Town, N.D.
Justin Lloyd Price, 24, New Town, N.D.
Akaka Katrina Aulaumea, 24, New Town, N.D.
Megan Darlene Overlie, 21, Minot, N.D.This investigation was a joint investigation by the Federal Bureau of Investigation and the Bureau of Indian Affairs – Drug Enforcement Unit, assisted by the Bureau of Indian Affairs – Law Enforcement Services, the Three Affiliated Tribes Police Department, the Three Affiliated Tribes Criminal Investigations, and the Bureau of Alcohol, Tobacco, Firearms & Explosives.
Purdon stressed that an Indictment is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
Assistant U.S. Attorney Rick Volk is prosecuting the case.
Omaha, Nebraska Man Pleads Guilty to Helping Fort Dodge Bank Robber Escape ArrestRead the Press Release
A man who was an accessory in robbing a bank in Fort Dodge, Iowa pled guilty June 27, 2013, in federal court in Sioux City.
Christopher Anderson, II, age 26, from Omaha, Nebraska, was convicted of one count of accessory-after-the-fact to bank robbery.
Information presented by the United States at the plea hearing revealed that on February 7, 2013, Anderson, drove another party to a location near a bank in Fort Dodge, Iowa. After robbing the bank, the other party returned to Anderson’s car, appeared to be in a hurry, appeared to be holding a bag, and urged Anderson to drive away quickly. Based on these observations Anderson concluded the other party had just committed a robbery. Anderson then drove the other party to Omaha, Nebraska, in order to help the bank robbery escape arrest, prosecution and imprisonment for the Fort Dodge, Iowa, robbery. Anderson was given $1,000 and he concluded this money was stolen and given to him in exchange for his help.
Sentencing before United States District Court Judge Mark W. Bennett will be set after a presentence report is prepared. Anderson remains free on bond previously set pending sentencing. Anderson faces a possible maximum sentence of not more than 10 years’ imprisonment, a $125,000 fine, a $100 in special assessment, and up to five years of supervised release following any imprisonment.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 13-3021.
This case was investigated by officers of the Fort Dodge, Iowa, Police Department, the Omaha, Nebraska Police Department, and Special Agents of the Department of Justice’s Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
Nebraska Man Arrested on Bank Robbery ChargesRead the Press Release
Michael Clayton, age 43, from Omaha, Nebraska, has been charged with one count of bank robbery. The charges are contained in an Indictment filed on May 22, 2013, in United States District Court in Sioux City.
The Indictment alleges that, on or about February 7, 20132, Clayton robbed the C.S. Bank in Fort Dodge, Iowa.
If convicted Clayton faces a possible maximum sentence of 20 years’ imprisonment, a $250,000 fine, a $100 special assessment, and 3-years of supervised release following any imprisonment.
Clayton appeared on June 12, 2013 in federal court in Sioux City and was held without bond. Clayton’s next appearance will be his trial which is set for August 5, 2013.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 13-3022.As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case was investigated by the Fort Dodge Police Department and the DOJ’s Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Forde Fairchild.
Morrison Man Pleads Guilty to Possession of Destructive DevicesRead the Press Release
DENVER – Richard Lawrence Sandberg, age 35, of Morrison, Colorado, pled guilty late last week before U.S. District Court Judge Philip A. Brimmer to two counts of possession of firearms (which includes destructive devices) which are not registered in the National Firearm Registration and Transfer Record, United States Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Andrew Traver announced. Sandberg, who appeared in custody, was remanded at the conclusion of the hearing. Sandberg is scheduled to be sentenced by Judge Brimmer on September 25, 2013 at 9:00 a.m.
Sandberg was arrested on January 24, 2013 based on a Criminal Complaint obtained on January 23, 2013. He was indicted by a federal grand jury in Denver on January 28, 2013. He pled guilty on June 27, 2013.
According to court documents, including the stipulated facts contained in the plea agreement, the investigation began when a Denver Police detective learned from a confidential informant that there was an individual who possessed destructive devices. The detective contacted ATF regarding this information. ATF, acting on this information, worked to introduce an undercover agent to meet the subject, who turned out to be Richard Sandberg. Eventually, the undercover agent met with Sandberg at his residence, where he was shown the destructive devices. Sandberg reportedly said he wanted to trade the devices for cocaine, or sell them for $300 each.
During the meeting, Sandberg made numerous threatening statements towards law enforcement and specifically the ATF. At the conclusion of the meeting, Sandberg gave the undercover agent three devices, which contained explosive powder, a fuse and shrapnel in the form of stainless steel ball bearings. ATF confirmed that Sandberg was not allowed to possess such devices.
Following Sandburg’s arrest, law enforcement officers conducted a search of his residence. During the search, law enforcement located an additional 28 homemade destructive devices, several hundred rounds of ammunition, and 3 firearms.
For each count of possession of a firearm (which includes destructive devices) which is not registered in the National Firearms Registration and Transfer Record; Sandberg faces not more than 10 years in federal prison, and a fine of not more than $250,000. Additionally, the defendant agrees to relinquish all claims, title, and interest the defendant has to all the ammunition seized in this case; 5.56 caliber rifle, model Low 16; a Remington, model 870 12 gauge shotgun; and a Beretta, model 92FS, 9mm pistol to the United States of America.
This case was investigated by ATF, the Denver Police Department and the Jefferson County Sheriff’s Office. The Denver Police Department Bomb Squad, the Jefferson County Sheriff’s Bomb Squad and the Colorado Springs Regional Explosives Unit provided assistance at Sandberg’s residence, where the destructive devices were found.
Sandberg is being prosecuted by Assistant U.S. Attorney Jeremy Sibert.
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Monett Man Pleads Guilty to Child Porn, Identified in German InvestigationRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Monett, Mo., man who was identified in a law enforcement investigation in Germany pleaded guilty in federal court today to receiving child pornography over the Internet.
Donald A. Rise, 57, of Monett, pleaded guilty before U.S. Magistrate Judge David P. Rush to the charge contained in a July 24, 2012 federal indictment.
By pleading guilty today, Rise admitted that he downloaded child pornography using various Web sites.
Rise was identified by German authorities who were investigating a Web site operated by a German citizen that was used to distribute child pornography. The German investigation resulted in the seizure of files from the Web site, including child pornography and log files. Information about computers in the United States that had downloaded child pornography from the German Web site was forwarded to the FBI, including a computer identified with Rise.
When officers contacted Rise at his residence, he admitted that he had viewed child pornography on his desktop computer the night before. Rise admitted that he had images of child pornography on his computer. He said the average age of the children depicted in those images was 12 years old and some of the images depict children in obvious distress.
Investigators conducted a forensic review of Rise’s computer and found 1,681 images of child pornography, including numerous images of children from 2 to 10 years old. The images depict children as young as toddlers being sexually assaulted by adult men and other children. Some images depict the children being restrained and gagged while being sexually abused and the children appear to be in distress and crying.
Under federal statutes, Rise is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 20 years in federal prison without parole, plus a fine up to $250,000. 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 Assistant U.S. Attorney Gary K. Milligan. It was investigated by the Southwest Missouri Cyber Crimes Task Force and the FBI.Mexican Man Charged with "Ticket Switch" Fraud at Home DepotRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned a two-count indictment charging Luis Alcalar Vasquez, 36, a citizen of Mexico, with possessing false identification documents and unauthorized access devices. The charges carry a maximum penalty of five years in prison terms and a $250,000 fine.
Assistant U.S. Attorney Paul J. Campana, who is handling the case, stated that according to the indictment and a criminal complaint filed in April 2013, the defendant obtained high-end merchandise at various Home Depot stores in Illinois, Indiana, Ohio and New York by scanning bar codes for lower ticketed items at self check-out stations. Vasquez scanned the bar codes for the lower cost items but took the more expensive items out of the stores. For example, the defendant scanned the bar code for a sink priced at $59.95 but actually left the store with a sink costing $444.79. Vazquez then returned the higher ticketed merchandise to another Home Depot location in exchange for stored value cards.
By early March, 2013, Home Depot became aware that the “ticket-switch” and refund transactions were being executed at stores in Western New York. On March 7, 2013, at stores in West Seneca, Buffalo, and Cheektowaga, sinks costing $444.79 were exchanged for stored value cards in that amount.Later on March 7, at Home Depot’s store in Lockport, the defendant tried to use a California driver’s license bearing his picture but a different name, in order to return merchandise valued at $700.55. However, Home Depot personnel stopped the transaction and called Niagara County Sheriff’s Office deputies to the Lockport store, where they took the defendant into custody. Niagara County Sheriff’s Office investigators found Vasquez had 20 false California drivers licenses in three different names but all bearing the defendant’s picture, and 17 Home Depot stored value cards worth approximately $5,910. Two cell phones with bar codes taped to their backs were found on the defendant.
The losses to Home Depot as a result of the fraud exceeded $30,000.
The indictment is the culmination of an investigation by the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel and the Niagara County Sheriff’s Office, under the direction of James Votour.
The fact that a defendant has been charge with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Maryland Businessman Pleads Guilty to Concealing Foreign Bank Account at Israel-based Bank on His Tax ReturnRead the Press Release
The Justice Department and Internal Revenue Service, Criminal Investigation (IRS-CI) announced that Alexei Iazlovsky of Potomac, Md., pleaded guilty today in the U.S. District Court for the Central District of California to filing a false tax return for tax year 2008.
According to court documents, Iazlovsky, a U.S. citizen, maintained an undeclared bank account held in the name of a foreign corporation at the Luxembourg branch of an Israeli bank. Iazlovsky owned a corporation that produced documentaries for Russian television stations. A tax return preparer suggested to Iazlovsky that he could reduce his taxes by keeping money out of the United States and diverting payments from his Russian clients to a foreign bank account held in the name of a foreign corporation. Iazlovsky met with a banker from the Israeli bank at a New York hotel to open the Luxembourg account.
According to court documents, Iazlovsky diverted a total of $2.6 million in untaxed payments from his Russian clients to his undeclared bank account in Luxembourg. From 2002 through 2009, Iazlovsky filed false individual and corporate tax returns that failed to report his authority over and ownership of the bank account in Luxembourg. He also omitted the income diverted to and generated by the undeclared account in Luxembourg. Iazlovsky has admitted that the tax loss is more than $400,000.
Iazlovsky is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with failing to report income from undeclared accounts held at Israeli banks.
“Individuals who evade their tax obligations cheat their country and their fellow citizens,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The Department of Justice is committed to using all of the many available tools to find and prosecute those who hide income and assets in offshore bank accounts, and to pursue the taxes and penalties that are due.”
"Offshore tax evasion is a top priority for IRS-CI, and the facts in this case are clear. Earned income was placed into foreign bank accounts for the purpose of committing offshore tax fraud," said Richard Weber, Chief, IRS-CI. "Through our efforts, we are gaining access to more and more information on institutions and individuals involved in offshore tax fraud, and you can expect us to use all of our enforcement tools to stop this abuse."
U.S. citizens and residents who have an interest in, signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file a Report of Foreign Bank and Financial Reports (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Iazlovsky has agreed to pay a civil penalty in the amount of 50 percent of the high balance of his undeclared account to resolve his civil liability with the IRS for failing to file FBARs. Iazlovsky faces a maximum prison term of three years and a maximum fine of $250,000.
Assistant Attorney General Keneally thanked special agents of IRS-CI, who investigated the case, and Tax Division Trial Attorneys Ellen M. Quattrucci and Christopher S. Strauss, who prosecuted the case, and Assistant U.S. Attorney Sandra R. Brown of the U.S. Attorney’s Office for the Central District of California, who assisted with the prosecution.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Los Angeles-Area Doctor and Patient Recruiter Plead Guilty <br /> to Participating in a Power Wheelchair Scheme That Defrauded Medicare of over $10.1 MillionRead the Press Release
A Los Angeles-area doctor and a patient recruiter pleaded guilty today for their roles in a power wheelchair fraud scheme that defrauded Medicare of over $10.1 million.
The plea was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Joseph Fendrick, Special Agent in Charge of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse.
Dr. Emmanuel Ayodele, 65, of Los Angeles, and Alejandro Maciel, 43, of Huntington Park, Calif., pleaded guilty before U.S. District Judge George Wu in the Central District of California to one count of health care fraud and one count of conspiracy to commit health care fraud, respectively.
Ayodele admitted that he defrauded Medicare by participating in a power wheelchair fraud scheme with the operators of fraudulent durable medical equipment (DME) supply companies. According to court documents, DME suppliers provided Ayodele with patients recruited by street-level patient recruiters or “marketers,” who illegally solicited people with Medicare benefits for power wheelchairs and other DME that the people did not need. In court documents, Maciel admitted that he was one of these marketers.
Maciel admitted that he approached people at their homes, swap meets, grocery stores and other locations, and made various misrepresentations to the people about his true identity and Medicare. Maciel admitted that these misrepresentations allowed him to gain the trust of Medicare beneficiaries and convince them to provide him with their Medicare billing and personal information, which Maciel, Ayodele, and their co-conspirators used to defraud Medicare. Maciel also admitted that, through his misrepresentations, he convinced people to travel with him to fraudulent medical clinics and DME supply companies owned and operated by his co-conspirators. Ayodele admitted that he owned one of these fraudulent medical clinics, Beth Medical Clinic, which he operated in Los Angeles.
Ayodele admitted that, at Beth Medical, he wrote medically-unnecessary prescriptions for power wheelchairs and DME. Ayodele admitted he knew that the DME supply companies used the medically-unnecessary prescriptions and documents that he wrote to submit claims to Medicare for medically-unnecessary power wheelchairs and DME. For example, Ayodele admitted that the operators of fraudulent DME supply company Bonfee Inc., who were indicted with Ayodele and Maciel on Medicare fraud charges, paid Ayodele to write a medically-unnecessary power wheelchair prescription for one of Bonfee’s customers, and then used that prescription to submit a false power wheelchair claim to Medicare that totaled over $6,000.
Maciel admitted that his profit from the scheme came in the form of illegal kickbacks paid to him for every person whose Medicare billing and personal information his co-conspirators successfully used to bill Medicare for power wheelchairs or other items of DME. According to court documents, once his co-conspirators successfully billed Medicare, Maciel delivered the power wheelchairs and other DME to the people whom he recruited. During these deliveries, Maciel observed that the people could walk, and that they did not have a legitimate need for the wheelchairs and other DME.
As a result of their conduct, Ayodele and Maciel admitted that they and the owners and operators of Bonfee, Lutemi Medical Supplies, and other fraudulent DME companies submitted and caused to be submitted over $10,132,178 in false and fraudulent claims to Medicare. Ayodele and Maciel admitted that Medicare paid Bonfee and the other DME supply companies over $5,388,754 on these false and fraudulent claims.
Two of Ayodele and Maciel’s co-defendants, Charles Agbu, a former pastor who owned Bonfee, and Dr. Juan Van Putten, have pleaded guilty to Medicare fraud charges and are scheduled for sentencing on Aug. 15, 2013, and Sept. 26, 2013, respectively. Ayodele and Maciel’s other co-defendants, Obiageli Agbu and Candalaria Estrada, are scheduled for trial on July 9, 2013.
The owner of Lutemi, Olufunke Fadojutimi, a registered nurse, was arrested on May 14, 2013, on Medicare fraud charges. Fadojutimi is scheduled for trial on Oct. 22, 2013. Defendants are presumed innocent unless proven guilty in court.
At sentencing, scheduled for Sept. 30, 2013, Ayodele and Maciel each face a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Trial Attorneys Jonathan T. Baum, Alexander Porter, William Kanellis and Blanca Quintero of the Criminal Division’s Fraud Section. The case is being investigated by the FBI, HHS-OIG and the California Department of Justice.
The case 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 Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
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.
Los Angeles Medical Supply Company Owner Sentenced <br /> to Five Years in Prison for $8.4 Million Medicare Fraud SchemeRead the Press Release
The owner and operator of a durable medical equipment (DME) supply company was sentenced today to serve five years in prison in connection with a health care fraud scheme involving Latay Medical Services, a DME company based in Gardena, Calif.
The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Central District of California André Birotte Jr.; Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); and Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
Bolademi Adetola, 47, of Harbor City, Calif., was sentenced today by U.S. District Judge George H. Wu in the Central District of California. In addition to her prison term, Adetola was sentenced to serve three years of supervised release and ordered to pay $4,555,198 in restitution.
On March 1, 2013, Adetola was convicted by a jury in federal court in Los Angeles of one count of conspiracy to commit health care fraud and 12 counts of health care fraud. During trial, the evidence showed that Adetola, as the former owner and operator of Latay, fraudulently billed millions of dollars to Medicare for DME that was either never provided to its Medicare beneficiaries or was not medically necessary.
The trial evidence showed that between January 2005 and October 2009, Adetola paid cash kickbacks for fraudulent prescriptions for DME, such as power wheelchairs and hospital beds. The evidence at trial showed that a co-conspirator physician wrote prescriptions for power wheelchairs and other DME that the Medicare beneficiaries did not need and ultimately never used. The co-conspirator physician testified that Adetola paid him cash kickbacks for every fraudulent prescription that he wrote for the DME and that Adetola used his prescriptions to bill Medicare for the power wheelchairs and other DME. Several Medicare beneficiaries testified that they were lured to medical clinics with the promise of a free recliner sofa, only to receive power wheelchairs that they did not need and did not want. According to the testimony, the beneficiaries were unsuccessful in their attempts to reject delivery of the power wheelchairs from Adetola’s supply company.
In addition, the trial evidence showed that Adetola billed Medicare for DME supposedly provided and delivered to Medicare beneficiaries who were deceased at the time of service. One particular claim submitted by Adetola to Medicare showed that the Medicare beneficiary’s death preceded the date the Medicare beneficiary supposedly signed for the service.As a result of this fraud scheme, Adetola submitted and caused the submission of over $8.4 million in false and fraudulent claims to Medicare, and received over $4.5 million on those claims.
The case is being prosecuted by Assistant Chief Benton Curtis and Trial Attorney Blanca Quintero of the Criminal Division’s Fraud Section. The case is being investigated by the FBI and the Los Angeles Region of HHS-OIG.
The case 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 Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.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.
Laurel Bank Robber Sentenced to 8 Years in Prison for Four Robberies in over Three MonthsRead the Press Release
Attempted to Rob Two More Banks
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Jeffrey Wayne Malcolm, age 56, of Laurel, Maryland, today to 8 years in prison followed by three years of supervised release for bank robbery.
The sentence 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; Chief Richard McLaughlin of the Laurel Police Department; Howard County Police Chief William McMahon; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; and Frederick County Sheriff Charles A. “Chuck” Jenkins.
According to his plea agreement, Malcolm robbed the following four banks: PNC Bank at 7451 VanDusen Road in Laurel of $1,327 on October 28, 2011; PNC Bank at 1621 West Liberty Road in Sykesville of $3,597 on January 17, 2012; and the Suntrust Bank at 11323 Fingerboard Road in Monrovia of $1,776 on January 25, 2012, and $4,388 on February 4, 2012.
Malcolm also attempted to rob the PNC Bank at 15290 Frederick Road in Woodbine on November 7, 2011, but the teller refused to hand over money. Two days later he attempted to rob the PNC Bank at its VanDusen branch, but when a teller saw him approach the bank wearing a ski mask, bank employees locked the front door, preventing him from entering.
United States Attorney Rod J. Rosenstein commended the FBI, Laurel Police Department, Howard County Police department, Maryland Police Department, Frederick County Bureau of Investigations and Frederick County State’s Attorney's Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney P. Michael Cunningham, who prosecuted the case.
Kansas Man Sentenced for Conspiracy to Distribute Crack and Powder CocaineRead the Press Release
United States Attorney Deborah R. Gilg announced that July 1, 2013, Jared Lance Howe, 29, of Topeka, Kansas, was sentenced to five years (60 months) in prison for his conviction for conspiracy to distribute cocaine base and powder cocaine. Howe will serve four years on supervised release after completion of the prison term.
Information provided to law enforcement indicated that between January of 2007 and June 14, 2011, Howe was involved with a group of persons who were transporting cocaine base, also known as crack cocaine, and powder cocaine from the Denver, Colorado area to the North Platte, Nebraska area and locations in Kansas. On two occasions in May and June of 2011, Howe and Megan Miller, of Denver, picked up crack cocaine from Howe’s co-defendant, Lavon Owens, in the Denver area. Howe then drove Miller to the North Platte area where Miller delivered the crack cocaine. Howe was held responsible for the distribution of at least 96 grams (approximately 3 ½ ounces) of cocaine base.
Owens also pled guilty to the conspiracy charge and was sentenced in December of 2012 to 78 months in prison. Miller was indicted separately for conspiracy to distribute crack cocaine and powder cocaine and was sentenced to 57 months in prison in April of 2012.
This case was investigated by the CODE Task Force which is made up of law enforcement agencies throughout a 22-county area in west-central/southwest Nebraska and includes the North Platte Police Department, Dawson County Sheriff=s Office, Lincoln County Sheriff=s Office, Red Willow County Sheriff=s Office, Frontier County Sheriff=s Office, Nebraska State Patrol, Federal Bureau of Investigation (FBI), Drug Enforcement Administration (DEA), and Homeland Security Investigations (HSI).
Justice Department Files Fair Housing Lawsuit against Owners and Managers of Rental Homes in Washington State for Discrimination against Persons with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against the owners and managers of rental homes in and near Kelso and Longview, Wash., for violating the Fair Housing Act by discriminating against persons with disabilities.
The lawsuit, filed in the U.S. District Court for the Western District of Washington, alleges that Linda Barber, Bert Barber and Lori Thompson engaged in a pattern or practice of violating the Fair Housing Act or denied rights protected by the Act. Specifically, the lawsuit asserts that the defendants established and implemented a discriminatory policy that allowed waiver of the defendants’ mandatory $1,000 “pet deposit” for service animals with specialized training, but not for other assistance animals, including emotional support animals. The suit also alleges that, by refusing a tenant’s requests for a reasonable accommodation to waive the $1,000 pet deposit for her assistance animal, the defendants violated the Fair Housing Act.
“The Fair Housing Act ensures that individuals with disabilities who live with and benefit from assistance animals have equal access to housing,” said Eric Halperin, Senior Counsel and Special Counsel for Fair Lending in the Civil Rights Division. “The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of persons with disabilities.”
“The rights of our disabled citizens need to be protected and landlords should not engage in conduct that makes their lives more difficult,” said U.S. Attorney Jenny A. Durkan for the Western District of Washington. “A tenant should not have to repeatedly prove they need a service animal or other accommodation, and should not face retaliation when they make a complaint to those tasked with protecting their civil rights.”
This lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD). A low-income tenant with a mental disability repeatedly asked the defendants to waive the $1,000 pet deposit for her assistance animal and provided numerous notes from medical professionals to support her request. As a result of the defendants’ policy and their failure to grant her request, she waited for over two and a half years to obtain an assistance animal and then began to pay the deposit in monthly installments at great financial hardship. After filing her HUD complaint, she was subjected to retaliation and harassment by the defendants, and she eventually moved out of the defendants’ unit. After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department.
“Housing providers must grant reasonable accommodations needed by residents with disabilities,” said Bryan Greene, Acting Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice are committed to ensuring that everyone has equal housing opportunities and is able to exercise their fair housing rights without fear of retaliation.”
The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions, and a civil penalty. Any individuals who have information relevant to this case are to contact the Housing and Civil Enforcement Section of the Civil Rights Division at 1-800-896-7743, ext. 7.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Justice Department Files Fair Housing Lawsuit Against Owners and Managers of Rental Homes in Washington State for Discrimination Against Persons with DisabilitiesRead the Press Release
The Justice Department today filed a lawsuit against the owners and managers of rental homes in and near Kelso and Longview, Wash., for violating the Fair Housing Act by discriminating against persons with disabilities.
The lawsuit, filed in the U.S. District Court for the Western District of Washington, alleges that Linda Barber, Bert Barber and Lori Thompson engaged in a pattern or practice of violating the Fair Housing Act or denied rights protected by the Act. Specifically, the lawsuit asserts that the defendants established and implemented a discriminatory policy that allowed waiver of the defendants’ mandatory $1,000 “pet deposit” for service animals with specialized training, but not for other assistance animals, including emotional support animals. The suit also alleges that, by refusing a tenant’s requests for a reasonable accommodation to waive the $1,000 pet deposit for her assistance animal, the defendants violated the Fair Housing Act.
“The Fair Housing Act ensures that individuals with disabilities who live with and benefit from assistance animals have equal access to housing,” said Eric Halperin, Senior Counsel and Special Counsel for Fair Lending in the Civil Rights Division. “The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of persons with disabilities.”
“The rights of our disabled citizens need to be protected and landlords should not engage in conduct that makes their lives more difficult,” said U.S. Attorney Jenny A. Durkan for the Western District of Washington. “A tenant should not have to repeatedly prove they need a service animal or other accommodation, and should not face retaliation when they make a complaint to those tasked with protecting their civil rights.”
This lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD). A low-income tenant with a mental disability repeatedly asked the defendants to waive the $1,000 pet deposit for her assistance animal and provided numerous notes from medical professionals to support her request. As a result of the defendants’ policy and their failure to grant her request, she waited for over two and a half years to obtain an assistance animal and then began to pay the deposit in monthly installments at great financial hardship. After filing her HUD complaint, she was subjected to retaliation and harassment by the defendants, and she eventually moved out of the defendants’ unit. After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department.
“Housing providers must grant reasonable accommodations needed by residents with disabilities,” said Bryan Greene, Acting Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice are committed to ensuring that everyone has equal housing opportunities and is able to exercise their fair housing rights without fear of retaliation.”
The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions, and a civil penalty. Any individuals who have information relevant to this case are to contact the Housing and Civil Enforcement Section of the Civil Rights Division at 1-800-896-7743, ext. 7.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Jordanian Pleads Guilty to Marrying Two Women to Evade Immigration LawsRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that Emad Edin Yousef Abdallah, 29, of Jordan, pleaded guilty before U.S. District Judge Richard T. Haik to marriage fraud.
According to evidence presented at the guilty plea, the defendant admitted that he entered into two fraudulent marriages to change his immigration status and evade the immigration laws of the United States. The March 3, 2009 marriage ended in divorce in June 2010, and Abdallah married another woman on June 27, 2011. He admitted that the second marriage also took place in part to change his immigration status and evade immigration laws.Abdallah faces a maximum penalty of five years in prison, a $250,000 fine, and three years of supervised release for marriage fraud. A sentencing of July 12, 2013 was set.
United States Immigrations and Customs Enforcement conducted the investigation. Assistant U.S. Attorney James T. McManus is prosecuting the case.
Johnstown Child Porn Possessor Sentenced to 4+ Years in PrisonRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., has been sentenced in federal court to 50 months in prison and 15 years supervised release on his conviction of possession of child pornography, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on James Robert Reynolds, 54.
According to information presented to the court, on March 30, 2011, Reynolds knowingly possessed videos and images as computer graphic files containing images of child pornography, which had been shipped and transported in interstate or foreign commerce by means of a computer.
Assistant U.S. Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
According to Mr. Hickton, this case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse, led by the United States 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.
Mr. Hickton commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Conemaugh Township Police Department for the investigation leading to the successful prosecution of Reynolds.
Informational: Federal Court ArraignmentRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on June 28, 2013, before U.S. Magistrate Judge Carolyn S. Ostby, the following individual was arraigned:
BLAYNE KYLE BRADY, a 22-year-old resident of Lame Deer, appeared on a charge of assault resulting in serious bodily injury. He is currently detained. If convicted of this charge, BRADY faces possible penalties of 10 years in prison, a $250,000 fine, and 3 years supervised release. Assistant U.S. Attorney Lori Harper Suek is the prosecutor for the United States. The investigation was conducted by Bureau of Indian Affairs.
The defendant pled not guilty to the charge.
The charge, an indictment, information or complaint, is merely an accusation and all persons named as defendants are presumed innocent until proven guilty. A pre-trial conference and a trial date will be set and the United States will be required to prove the allegations set forth in the indictment beyond a reasonable doubt.
Hotel Financier Pleads Guilty to Conspiring to Bribe A Bank Loan OfficerRead the Press Release
ATLANTA - Guy Mitchell has pleaded guilty to a charge of conspiring to commit bank fraud and to pay bribes to an officer of a financial institution.
“Mitchell used millions of improperly obtained loan proceeds to fund a lavish lifestyle,” said United States Attorney Sally Quillian Yates. “His actions corrupted the lending process and jeopardized the safety and soundness of Integrity Bank, which failed and was taken over by the FDIC. Today, Mitchell’s plea of guilty brings this bank fraud investigation and prosecution to a just conclusion.”
“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join our law enforcement colleagues in announcing Mr. Mitchell’s guilty plea,” said Jason Moran, Special Agent in Charge, FDIC Atlanta Region. “When major borrowers conspire with bank insiders to engage in fraudulent activities that contribute to institution failures, all parties must be brought to justice. The FDIC OIG is committed to ensuring the safety and soundness of banks throughout the country and protecting the Deposit Insurance Fund against such criminal behavior.”
According to United States Attorney Yates, the charges and other information presented in court: Mitchell borrowed more than $40 million from the now-failed Integrity Bank in 2005 and 2006, allegedly to finance his interests in various hotels around the country. One of these loans was to acquire and renovate the Casa Madrona Hotel, a luxury property overlooking the water in Sausalito, California. During that time, Mitchell was bribing Douglas Ballard, a former loan officer at Integrity, with hundreds of thousands of dollars. Although Mitchell did use some of the money he received from Integrity for hotel purposes, he never performed any renovations on the Casa Madrona. Instead, he used loan draws to buy a private island in the Bahamas, to travel by private jet, and to pay for Miami Heat tickets, fancy jewelry, expensive cars, and a mansion in Coconut Grove. Mitchell, the bank’s largest borrower, eventually defaulted on his loans, contributing to Integrity Bank’s failure.
Douglas Ballard previously pleaded guilty to conspiracy and tax evasion. Additionally, Todd Foster, another Integrity employee, pleaded guilty to securities fraud.
Mitchell, 53, of Miami, Fl., could receive a maximum sentence of 5 years in prison and a fine of up to $250,000, or twice the greater of the gain or loss. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Sentencing is scheduled for October 10, 2013, at 10:00 a.m. before United States District Judge Julie E. Carnes.
This case is being investigated by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation, Office of Inspector General.
Assistant United States Attorneys Douglas W. Gilfillan and Christopher C. Bly are prosecuting the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Highlands Ranch Man Found Guilty of Human Trafficking and Other OffensesRead the Press Release
DENVER – Kizzy Kalu, age 49, of Highlands Ranch, was found guilty today of 89 counts of mail fraud, visa fraud, human trafficking and money laundering by a federal jury, the U.S. Attorney’s Office for the District of Colorado announced. The four week jury trial was before Chief U.S. District Court Judge Marcia S. Krieger. The jury deliberated for approximately a day and a half before reaching its verdicts. Kalu was found not guilty of 6 counts. Kalu, who was in custody during the trial, was remanded into custody following the reading of the verdict. The defendant is scheduled to be sentenced by Chief Judge Krieger on September 23, 2013 at 9:00 a.m.
Prior to trial, co-defendant, Philip Langerman, age 78, of McDonough, Georgia, pled guilty for his role in the criminal scheme. A sentencing date has not yet been scheduled for Langerman.
Kalu was indicted by a federal grand jury in Denver on March 1, 2012. A superseding indictment was obtained on February 12, 2013. The jury trial started on June 3, 2013. Kalu was found guilty of a vast majority of counts today, July 1, 2013.
According to the indictment and evidence presented at trial, Kalu and Langerman were involved in a scheme making false representations to foreign nationals, to the State of Colorado, to the United States of America, and others for the purpose of obtaining money. Kalu and Langerman provided false information to the U.S. government to obtain the apparent lawful presence in the U.S. of foreign nationals. The foreign nationals then worked for nursing homes and other long-term care facilities. Those facilities paid Kalu’s company, Foreign Healthcare Professionals Group, for the hours the foreign nationals worked. Kalu retained approximately 40% of the money earned from the labor of the foreign nationals.
Among the false information provided to the U.S. government was that the foreign nationals would be employed by Adam University as nurse instructor supervisors (which were considered “specialty occupations” under U.S. immigration law and regulations) and earn more than the prevailing wage so as not to undermine the wages of U.S. workers. Adam University existed largely in name only and had no genuine need for nurse instructor supervisors. The foreign nationals were granted H-1B visas based on fraudulent representations permitting them to be employed as nurse instructors/supervisors by the largely nonexistent Adam University. Rather than working in specialty occupations, the foreign nationals worked as nurses earning below the prevailing wage.
Kalu also made false representations to the foreign nationals, including that they would have full time work available in Colorado. Upon their arrival, they learned that they would have to interview for positions and would not be employed by Adam University in a clinical setting. Some were unable to find full time work. Some learned that Kalu would not allow them to travel freely. Kalu threatened to cause their deportation if the foreign nationals did not provide him their labor and services. As Kalu’s scheme evolved, Kalu directed that the foreign nationals find work on their own and be paid directly by the healthcare facilities. However, Kalu demanded that the foreign nationals pay him between $800 to $1,200 a month or face deportation. Kalu threatened to notify the U.S. Department of Homeland Security and have their visas canceled if they did not pay him the money he demanded. Kalu used debt to help keep the foreign nationals with him. Many had gone deeply into debt to pay him for assistance in obtaining the visas. In addition, Kalu required the foreign nationals to sign employment contracts that provided they would owe Kalu $25,000 if they left his employment.
Kalu was convicted of 19 counts of commercial carrier/mail fraud, which carries a penalty of not more than 20 years in federal prison, per count. He was convicted of 3 counts of visa fraud, which carries a penalty of not more than 10 years in federal prison, per count. He was convicted of 9 counts of trafficking in forced labor, which carries a penalty of not more than 20 years in federal prison, per count. He was found guilty of 13 counts of forced labor, which carries a penalty of not more than 20 years per count. He was found guilty of 15 counts of encouraging and inducing aliens to enter the U.S., which carries a penalty of not more than 10 years in prison, per count. Kalu was convicted of 30 counts of money laundering, which carries a penalty of not more than 20 years in prison per count. Each of the 89 counts also carries a fine of up to $250,000.
“We don’t tolerate lying to the United States,” said First Assistant U.S. Attorney Bob Troyer. “And we don’t tolerate victimizing laborers and cheating folks out of their hard-earned money. Today’s guilty verdict on 89 criminal counts confirms these simple truths, and it comes as a direct result of the determination and skill of the prosecution team and the talented agents from the State Department’s Diplomatic Security Service, ICE Homeland Security Investigations, and the U.S. Department of Labor’s Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations.”
“Today’s verdict reflects Diplomatic Service’s commitment to aggressively protect U.S. borders and the integrity of our travel document and labor laws,” said Michael Bayer, Special Agent in Charge of the Department of State’s Diplomatic Security Service. “Diplomatic Security is committed to working with the U.S. Attorney’s Office, DHS-HSI, and other Law Enforcement Agencies around the world to investigate allegations of Passport and visa fraud, trafficking in humans, forced labor and other associated offenses, and to bring those who commit these crimes to justice.”
“Homeland Security Investigations aggressively investigates human trafficking, which is modern-day slavery,” said Kumar Kibble, special agent in charge of HSI in Denver. “These human traffickers use force, fraud and coercion to obtain free or cheap labor from their victims so the traffickers can maximize their profits.”
This case was investigated by the Department of State’s Diplomatic Security Service, ICE Homeland Security Investigations, and the U.S. Department of Labor’s Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations. Further critical support was provided by U.S. Citizenship and Immigration Services, Office of Fraud Detection and National Security and the Douglas County Sheriff’s Office.
Kalu was prosecuted by Special Assistant U.S. Attorney Beth Gibson and Assistant U.S. Attorney Robert Brown.
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Haughton Man Sentenced to 10 Years in Prison for Possessing Child PornographyRead the Press Release
SHREVEPORT, La. – U.S. Attorney Stephanie A. Finley announced today that John James William Bonacci Sr., 70, of Haughton, La., was sentenced before U.S. District Judge Elizabeth E. Foote to 10 years in prison and a lifetime of supervised release for possessing child pornography.
According to court documents, authorities searched Bonacci’s home on Feb. 17, 2012 in connection with a child molestation complaint. Before a search of his home was conducted, Bonacci admitted to viewing pornography for many years. Authorities found more than 1,100 videos and 90 photographs depicting child pornography. Some of the videos contained images of children under 12 years of age and some had children as young as one year. Bonacci pleaded guilty on Oct. 29, 2012.
The FBI, the Northwest Louisiana Internet Crimes Against Children Task Force, Bossier Parish District Attorney’s Office and the Bossier Parish Sheriff’s Office investigated the case. Assistant U.S. Attorney Earl M. Campbell prosecuted the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice launched nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Tips or other information can also be submitted to the FBI at tips.fbi.gov. Tips may be submitted anonymously. The Shreveport FBI office number is (318) 861-1890.
Former Treasurer of Aldie Fire Department Pleads Guilty to Federal Charge for Embezzling over $600,000Read the Press Release
ALEXANDRIA, Va. – Jerry Keith Cromer, Jr., 79, of Gainesville, Va., pleaded guilty today to theft from an organization receiving federal funds.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Colonel W. Steven Flaherty, Virginia State Police Superintendent, made the announcement after the plea was accepted by United States District Judge Gerald Bruce Lee.
Cromer faces a maximum penalty of ten years in prison, a $250,000 fine, and full restitution when he is sentenced on October 11, 2013.
According to the statement of facts filed with the plea agreement, Cromer served as treasurer of the Aldie Volunteer Fire Department from 1995 through 2012. The members of the fire department elected Cromer to this post. In the statement of facts, Cromer admitted that from 2000 to 2012 he intentionally embezzled and converted to his own use approximately $645,000 that belonged to the Aldie Volunteer Fire Department. He used these fire department funds to satisfy his personal mortgage payments, pay personal credit card bills, repair his automobile, and for other personal expenditures. In addition to local community donations, the Aldie Volunteer Fire Department receives funding from Loudoun County and the federal government.
This case was investigated by the Federal Bureau of Investigation’s Washington Field Office and the Virginia State Police. Assistant United States Attorney Mark D. Lytle is prosecuting the case on behalf of the United States.
The FBI encourages anyone with information regarding similar allegations of fraud or corruption to call the FBI’s Northern Virginia Public Corruption tip line at (703) 686-6225.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Former Technology Company Insiders Sentenced in Manhattan Federal Court for Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MARK ANTHONY LONGORIA, a former employee of Advanced Micro Devices (“AMD”) and a consultant for the expert networking firm Primary Global Research (“PGR”), and WALTER SHIMOON, a former employee of Flextronics International, Ltd. (“Flextronics”) and also a consultant for PGR, were each sentenced today to time served plus two years of supervised release for their participation in insider trading schemes during which they provided material, nonpublic information (“Inside Information”) obtained from their employers to certain PGR clients who were money managers. In addition, SHIMOON also provided Inside Information to John Kinnucan, who operated a research firm and then provided the information to certain money managers.
LONGORIA pled guilty pursuant to a cooperation agreement in June 2011 to one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, one count of securities fraud, and one count of false statements. SHIMOON pled guilty pursuant to a cooperation agreement in July 2011 to two counts of conspiracy to commit securities and wire fraud and one count of securities fraud. LONGORIA and SHIMOON were sentenced today in Manhattan federal court by U.S. District Judge Jed S. Rakoff.
According to the Informations and statements made during the defendants’ plea proceedings and sentencings:
From 2007 and 2010, LONGORIA worked as a supply chain manager at AMD, a company that produced microprocessor chips. While employed at AMD, LONGORIA engaged in consultation calls with PGR employees and clients. For two quarters in 2009, he provided top line revenue and gross margin information for AMD during some of these calls. Throughout the period, he also routinely provided average sales prices and product sales figures for all of the company’s product lines. For example, between July 2008 and November 2009, LONGORIA provided AMD Inside Information to a hedge fund located in New York, New York (the “New York Hedge Fund”), that executed securities transactions, based in whole or in part, on LONGORIA’s information. The New York Hedge Fund earned approximately $2 million in profits using LONGORIA’s information. In 2006, in connection with a separate but related scheme, LONGORIA also provided confidential business information concerning the business of Western Digital to PGR employees and its clients in his capacity as a PGR consultant.
From 2008 to 2010, SHIMOON worked as a Director of Business Development at Flextronics, a technology company that designed, engineered and manufactured electronics products. During that time, SHIMOON obtained confidential information, including Inside Information, concerning Flextronics; customers of Flextronics, including Apple, Inc. (“Apple”); and suppliers of Flextronics, including OmniVision Technologies, Inc. (“OVTI”). SHIMOON then provided this information to employees and clients of PGR and to Kinnucan. For example, SHIMOON provided Inside Information concerning OVTI’s revenues to an employee of a hedge fund located in White Plains, New York. The hedge fund subsequently executed securities transactions in OVTI and earned profits of over $750,000. On another occasion, SHIMOON disclosed to Kinnucan, and, separately, to a cooperating witness who claimed to represent a PGR client, that Apple would be launching a new iPhone in 2010 that would contain two cameras. The cameras would give iPhone users the ability to videoconference, which was a significant enhancement over prior generations of the iPhone. SHIMOON knew that disclosure of this and other information violated fiduciary duties he owed to Flextronics, and/or violated non-disclosure agreements executed between Flextronics and Apple. PGR paid SHIMOON approximately $18,000 for the consultation services he provided to PGR clients from mid-2008 to 2010, and Kinnucan paid SHIMOON approximately $27,500 for providing confidential information, including Inside Information.
In addition to the terms of supervised release imposed, LONGORIA, 46, of Round Rock, Texas, was sentenced to forfeiture of $170,000, and a $400 special assessment. SHIMOON, 41, of San Diego, California, was also sentenced to forfeiture of $45,500, and a $300 special assessment.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
The cases are being handled by the Office's Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Antonia M. Apps and Katherine Goldstein are in charge of the prosecutions.
Former Ripley Police Officer Pleads Guilty to Possession of Child PornographyRead the Press Release
George Michael Puskas II admits having sexual relationship with a minor
CHARLESTON, W.Va. – A 31-year-old former police officer pleaded guilty today to possession of child pornography, announced U.S. Attorney Booth Goodwin. George Michael Puskas II, of Ripley, entered into a guilty plea in federal court in Charleston.
Puskas established a sexual relationship with a then 16-year-old minor in March 2010. At the time of the relationship, Puskas produced images and a video of the minor having sex or performing sex acts. Puskas produced a video of child pornography using a police department-issued digital camera. Puskas also used a cellphone to create images of child pornography. On September 7, 2011, Puskas possessed between 10 and 150 images of child pornography.
Puskas was employed as a police officer with the Ripley Police Department from June 2008 until May 2012. The defendant was an officer with the department at the time of the child pornography violation. Puskas resigned from the Ripley Police Department in May 2012.
U.S. Attorney Booth Goodwin said, “Mr. Puskas swore an oath to protect and serve the community. He obviously failed to uphold that oath. Pedophiles like Mr. Puskas must be held accountable when they commit disgraceful crimes like this one.”
On April 6, 2012, the West Virginia Internet Crimes Against Children Task Force executed a federal search warrant and seized a computer, a flash drive, and other items that Puskas used to produce child pornography. Puskas told police that he produced and possessed images of child pornography.
Puskas also told police that he maintained a relationship with the minor up until the time the individual turned 18 years old. On September 14, 2011, Puskas sent the individual an image that showed the two of them having sex.
Puskas faces up to 10 years in prison and a $250,000 fine when he is sentenced on October 1, 2013 by United States District Judge John T. Copenhaver, Jr.
The West Virginia Internet Crimes Against Children Task Force conducted the investigation. Assistant United States Attorney Lisa Johnston is in charge of the prosecution.
This case was brought as part of U.S. Attorney Goodwin’s ongoing initiative to combat child sexual exploitation and abuse in the Southern District of West Virginia.
Former President of San Diego Customs Brokers Association Sentenced to 37 Months in Prison for Evading Import Taxes on $100 Million in Foreign-Made GoodsFraudulently Imported Goods Included Chinese-made Clothing, Cigarettes and Salmonella-Infected ProduceRead the Press Release
United States Attorney Laura E. Duffy announced that a San Diego businessman and his corporation were sentenced today for their roles in a long-running conspiracy to evade customs duties.
United States District Judge Michael M. Anello sentenced Gerardo Chavez to serve 37 months in prison and his corporation, International Trade Consultants, LLC, to serve 5 years of probation. In addition, Judge Anello ordered that Chavez forfeit real property in Tecate, California, where Chavez maintained his corporate offices. Judge Anello also ordered Chavez to appear for a future restitution hearing, at which Chavez could be ordered to pay millions of dollars in compensation to state and federal taxing authorities.
According to court filings, Chavez was the President of the San Diego Customs Brokers Association, a trade group for licensed professionals in the import-export field. Between 2007 and his arrest in 2012, Chavez and his companies supervised numerous shipments of commercial goods while coordinating one-half billion dollars in trade between merchants in the United States and other countries. Ultimately, Chavez was apprehended after a four month-long wiretap investigation led by special agents with Immigration and Customs Enforcement’s Homeland Security Investigations and assisted by specialized international trade experts and officers from United States Customs and Border Protection. Prior to sentencing, Chavez cancelled his individual, local and national Customs licenses, effectively ending his career as a customs broker.
According to court documents, Chavez’s scheme focused on purchasing large, commercial quantities of foreign-made goods and importing them without paying import taxes, also known as Customs duties. Wholesalers in the United States would procure commercial shipments of, among other things, Chinese-made apparel and Indian-made cigarettes, and arrange for them to be shipped by ocean container to the Port of Long Beach, California. Before the goods entered the United States, conspirators acting at Chavez=s direction would prepare paperwork and database entries indicating that the goods were not intended to enter the commerce of the United States, but instead would be “transshipped” “in-bond” to another country, such as Mexico. By claiming that the goods would not enter the commerce of the United States but instead were just passing through to another country, Chavez and his conspirators tricked Customs officials into believing that no customs duties were owed on the merchandise.
Then, instead of completing the in-bond transshipment, Chavez and his conspirators would hire truck drivers to haul the shipments to warehouses throughout Southern California. Chavez and his conspirators then generated fraudulent paperwork to cover up the scheme. As the conspirators had now effectively imported the goods tax-free, they could in turn sell more merchandise at cheaper pricesCand reap greater profitsCthan their law-abiding competitors, including domestic American manufacturers of the same goods.
According to court filings, Chavez played a crucial role in the scheme, allowing others to use his lucrative customs license as the authority under which commercial shipments fraudulently entered the United States. While delegating much of the day-to-day operations to employees and contractors, Chavez provided crucial support to the conspiracy, advising on how to best deceive federal officers—and even volunteering to erase evidence from conspirators’ computers. Over the course of his scheme, Chavez helped his clients evade at least $18 million in import taxes on more than $100 million in fraudulently imported foreign goods. In addition, Chavez’s coconspirators—using Chavez’s license, expertise and logistical support—succeeded in importing adulterated Mexican food products, as well as produce infected with Salmonella Agona, a disease-causing and potentially life-threatening bacteria.
Chavez’s 37-month sentence also marks the latest in a string of Customs-related prosecutions pursued by the U.S. Attorney’s Office. Chavez’s sentencing came a little more than three weeks after a federal jury returned guilty verdicts on all counts pursued against one of Chavez’s conspirators, Sunil Mirwani and his Los Angeles-based company, M Trade, Inc. Mirwani owned approximately $30 million in Chinese-made textiles that Chavez helped fraudulently import into the United States. During that trial, some of Chavez’s former coconspirators testified under oath about Chavez’s fraudulent methods, noting that one of his contractors had access to equipment capable of forging certain official marks used by United States Customs and Border Protection.
United States Attorney Duffy said: "Our system of international trade relies on the honesty and integrity of all participants; and perhaps most of all, of customs brokers, to ensure that applicable taxes are paid, and that hazardous materials do not cross our country’s borders. Gerardo Chavez abused the trust this country instilled in him, endangering public health and stealing from the United States treasury at a time when we could ill afford it—all for his personal, fraudulent, gain.”
“Today’s sentencing illustrates the importance of DHS components working seamlessly to prevent criminals from exploiting the commercial trade corridor in the San Diego-Tijuana region,” said Derek Benner, special agent in charge for HSI in San Diego. “HSI will continue to prioritize investigations involving suspected Customs fraud in an effort to maintain the highest degree of integrity in cross border trade.”
“CBP is charged with protecting the revenue of the United States. This case demonstrates our commitment to that mission and the importance of working with our federal partners,” said Pete Flores, CBP director of field operations for San Diego. “Joint efforts such as this are crucial to maintaining our nation’s economic security and competitiveness.”
Lisa Malinowski, Special Agent in Charge, U.S. Food and Drug Administration's Office of Criminal Investigations, Los Angeles Field Office, said: “Today’s sentencing demonstrates OCI’s commitment to investigating and holding accountable those who conspire to import adulterated and potentially life-threatening products to the unsuspecting public. OCI will continue to join with our law enforcement counterparts to pursue those who place consumer’s health at risk for financial gain.”
DEFENDANTS Case Number: 12CR3137-MMA Gerard Chavez
International Trade Consultants, LLC SUMMARY OF CHARGESChavez:
Count 1: Conspiracy to Defraud the United States and to Commit Offenses against the
United States, in violation of Title 18, United States Code, Section 371.Counts 2-3: Bringing in Goods by Means of False Statements, in violation of Title 18, United
States Code, Section 542.Count 57: Laundering of Monetary Instruments, in violation of Title 18, United States Code,
Section 1956(a)(2)(A) and (h).International Trade Consultants, LLC
INVESTIGATING AGENCIES
Count 1: Conspiracy to Defraud the United States and to Commit Offenses againstImmigration and Customs Enforcement’s Homeland Security Investigations
United States Customs and Border Protection
Internal Revenue Service – Criminal Investigations
Food and Drug Administration
Alcohol and Tobacco Tax and Trade BureauFormer N.J. Turnpike Authority Manager Charged with Stealing More Than $120,000Read the Press Release
NEWARK, N.J. – A former claims manager for the N.J. Turnpike Authority was arrested today for allegedly stealing more than $120,000 from the authority, U.S. Attorney Paul J. Fishman announced.
Gerardo Blasi, 54, of Clifton, N.J., was arrested by special agents of the FBI and charged by complaint with mail fraud and defrauding a state agency that receives federal funds. He is scheduled to make his initial appearance later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint:
Blasi was a claims manager at the N.J. Turnpike Authority, responsible for negotiating and collecting payments from insurance companies whose insured drivers caused damage to the Turnpike. From April 2011 to June 2013, Blasi allegedly stole more than $120,000 from the authority in several ways, including instructing insurance companies to issue checks payable to fraudulent repair companies. When the checks were mailed to Blasi at the authority, he would arrange to have them cashed and keep a portion of the money for himself.
The fraud count with which Blasi is charged carries a maximum potential penalty of up to 20 years in prison and a $250,000 fine. The theft from a state agency count is punishable by a maximum potential penalty of up to 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s charges. He also thanked the N.J. Turnpike Authority for its cooperation in the investigation.
The government is represented by Assistant U.S. Attorney David L. Foster of the office’s Special Prosecutions Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Blasi Complaint
Former Massachusetts Attorney Charged with Recording Fraudulent Federal Tax Lien Releases and with Bank FraudRead the Press Release
BOSTON – A Braintree man was charged in an indictment unsealed today with tax and bank fraud violations, primarily for recording and attempting to record false and fraudulent federal tax lien releases on properties he owned, and attempting to obtain a bank loan by fraud.
John C. McBride, 64, formerly of Marblehead and Edgartown, was charged in an Indictment with endeavoring to obstruct and impede the due administration of the internal revenue laws, and bank fraud.
The indictment alleges that McBride, a Massachusetts attorney from 1974 to 2007, owned residences in Marblehead and Edgartown, both of which had federal tax liens placed on them by the IRS to secure tax assessments of more than $650,000. The indictment alleges that in early 2008, in connection with his obtaining a $288,000 loan secured by the Marblehead property, McBride caused six false, forged, and fraudulent Certificates of Federal Tax Lien Release to be recorded against that property, knowing that they were in fact false, forged and fraudulent, and not issued by the IRS.
In March 2008, it is alleged that McBride attempted, unsuccessfully, to record two such fraudulent Certificates of Federal Tax Lien Releases against his Edgartown property. Finally, the indictment alleges that McBride attempted to obtain a $387,000 reverse mortgage loan from Bank of America in 2011, to be secured by the Edgartown property. In connection with that loan application, it is alleged that McBride provided false information concerning the liens on that property and about the status of his bankruptcy proceeding, and also caused to be recorded a fraudulent and unauthorized Discharge of Mortgage which purported to discharge a mortgage on the Edgartown property in an amount greater than $700,000. The indictment asserts that Bank of America discovered the fraudulent Discharge before the loan closed, and no funds were disbursed to McBride.
The statutory maximum sentence for the tax offense is three years in prison, followed by one year of supervised release and a $250,000 fine. The statutory maximum sentence for the bank fraud offense is 30 years in prison, to be followed by five years of supervised release and a $1 million fine.
United States Attorney Carmen M. Ortiz; Kevin J. McGlynn, Special Agent in Charge of the U.S. Treasury Inspector General for Tax Administration, Office of Investigations, New York Field Office; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit. The U.S. Attorney’s Office also received assistance from the U.S. Trustee’s Office in Boston.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Investment Adviser Charged for Fraud That Caused over $3 Million in LossesRead the Press Release
BOSTON - A Plymouth man was charged today in connection with an investment fraud that caused retired clients over $3 million in losses.
Jeffrey A. Liskov, 42, was charged in an Information with investment adviser fraud.
It is alleged that from November 2008 through August 2010, Liskov defrauded retired advisory clients. In 2008, despite sustaining large personal losses in risky, highly volatile foreign currency exchange trading, Liskov is alleged to have begun advising retired clients with conservative investment goals to allow him to engage in such trading with a portion of their retirement money. Liskov received significant performance fees for conducting this volatile trading on behalf of clients based on short-term gains, without regard to the long-term performance of his trading in the clients’ accounts.
In late 2009, after sustaining large trading losses for long-time clients, Liskov started liquidating securities in the brokerage accounts of these clients and investing the proceeds in foreign currency exchange trading without the clients’ knowledge or authorization. In order to fund these investments behind his clients’ backs, Liskov used white-out correction fluid and other methods to create fraudulent documents that allowed him to open new foreign currency exchange trading accounts and/or to transfer funds from client brokerage accounts to foreign currency exchange trading accounts. This allowed Liskov to secretly engage in additional foreign currency exchange trading on behalf of long-time clients for whom he had already lost significant amounts of money – additional trading from which, in some instances, Liskov was able to pocket large performance fees. The trading Liskov engaged in with the funds from this fraud caused over $3 million in losses to the long-time clients, but garnered Liskov over $200,000 in performance fees.
The statutory maximum offense for investment adviser fraud is five years in prison, followed by three years of supervised release, a $250,000, and restitution.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. US Attorney Ortiz expressed appreciation for the significant assistance her office received from the US Securities and Exchange Commission, and also acknowledged the cooperation of the United States Commodity Futures Trading Commission. The case is being prosecuted by Assistant U.S. Attorney Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.
The details contained in the Information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Chief & President of Remington, Virginia Fire Department Indicted Separately for Fraud, EmbezzlementRead the Press Release
ALEXANDRIA, Va. – Douglas G. “Bo” Taylor, age 52, of Remington, Va., the former Chief of the Remington Volunteer Fire & Rescue Department (“RVFD”), was charged in an eight-count indictment by a federal grand jury on allegations related to theft from a program receiving federal funds, wire fraud and filing false individual income tax returns, according to charges unsealed today. In a separate indictment, William Joseph Stuart, age 52, of Bealton, Va., the former President of the RVFD, was also charged with theft from a program receiving federal funds, according to a one-count indictment made public yesterday.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation, made the announcement today after the indictment of Taylor was unsealed. Taylor is scheduled to make his initial appearance later this afternoon in the United States District Court for the Eastern District of Virginia. Stuart is expected to appear in the same Court on Friday, August 2, 2013, for his arraignment.
Taylor faces a maximum penalty on the two theft charges of ten years in prison, and twenty years in prison for each of the four wire fraud charges. These charges carry a maximum fine of $250,000 and full restitution. Finally, for each of the two charges alleging the filing of false income tax returns, Taylor faces a maximum penalty of three years in prison, a $100,000 fine, and full restitution. Stuart faces a maximum penalty on the single theft count of ten years in prison, $250,000 fine, and full restitution.
According to the indictment, Taylor served as the Chief of the RVFD from 1994 through 2011, during a time when the RVFD fire station underwent major renovations and reconstruction with funding, in significant part, from the U.S. Department of Agriculture. The indictment alleges that Taylor, a licensed master electrician, offered to do some of the renovations at the fire station and only seek reimbursement for his out of pocket expenses. As the charges allege, Taylor then submitted false invoices which contained charges for materials Taylor did not purchase and charges for labor that, at times, was never performed or were inflated from the hours that were actually performed. Taylor is also accused of using a Prince William County Public Schools System (“PWCS”) credit card to purchase some of the materials used at the fire station project (and elsewhere). In total, the indictment alleges that Taylor defrauded the RVFD of more than $90,000 and the PWCS of approximately $60,000. Finally, Taylor is accused of not disclosing the money he fraudulently obtained from the RVFD and winnings from the Virginia lottery on two individual income tax returns filed with the IRS.
A separate indictment alleges that during 2008 and 2009, Stuart embezzled approximately $40,000 from the RVFD financial accounts where he had signature authority.
This case was investigated by the Federal Bureau of Investigation’s Washington Field Office and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Mark D. Lytle is prosecuting the case on behalf of the United States.
Any person who believes they may have information regarding public corruption in the Northern Virginia area is encouraged to call the FBI’s Northern Virginia Public Corruption Hotline at 703-686-6225.
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.Florida Resident Pleads Guilty to Role in $90 Million Pharmaceutical Theft from Connecticut WarehouseRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that AMED VILLA, 48, a citizen of Cuba last residing in Miami, Fla., pleaded guilty today to federal charges stemming from his participation in the theft of approximately $90 million in pharmaceuticals from a warehouse in Enfield, Conn., and $8 million in cigarettes from a warehouse in Illinois.
“The Eli Lilly theft is reportedly the largest in Connecticut history, and I commend the FBI in New Haven and the Enfield Police Department, as well as our counterparts in the Central District of Illinois and other jurisdictions, for their cooperative investigative efforts in dismantling a prolific cargo theft ring,” stated Acting U.S. Attorney Daly.
“Today’s guilty plea is the result of a most exhaustive and far-reaching investigation, highlighted by exemplary teamwork among our federal, state and local partners,” stated FBI Special Agent in Charge Mertz. “Complex investigations involving multiple agencies and jurisdictions are often difficult because they require an especially organized and coordinated effort in order to bring those responsible for crimes to justice. The tremendous investigative and prosecutive effort in this matter is evident by Villa’s guilty plea.”
According to court documents and statements made in court, between January and March 2010, VILLA and others conspired to steal pharmaceuticals from the Eli Lilly Company warehouse and storage facility in Enfield, Conn. The investigation revealed that, in early 2010, members of the conspiracy traveled from the Miami area to Connecticut to gather information about the warehouse facility and the surrounding area. Shortly before the theft, VILLA and another individual drove from Florida to Flushing, N.Y., where they purchased tools needed to break into the warehouse facility, and then traveled to Connecticut.
In the evening of March 13, 2010, VILLA and others traveled in a tractor trailer to the parking lot of the Eli Lilly warehouse facility, dropped off a ladder and left. Later that evening, VILLA and a co-conspirator carried the ladder to the facility, checked for security in the front area, climbed onto the roof, used the tools to cut a hole in the facility roof, dropped down into the facility and disabled the alarm system. Thereafter, VILLA and others loaded approximately 53 pallets of pharmaceuticals into the tractor trailer, which they had backed up to the loading dock of the facility.
The pallets of pharmaceuticals included thousands of boxes Zyprexa, Cymbalta, Prozac, Gemzar and other medicines, valued at approximately $90 million.
Once the conspirators returned to Miami, they packed the pharmaceuticals into moving boxes and stored them in self-storage units in the Miami area.
As part of the investigation, on October 14, 2011, law enforcement authorities searched a storage facility in Florida and recovered pharmaceuticals that had been stolen from the Enfield warehouse.VILLA also pleaded guilty to a federal theft charge from the Central District of Illinois, admitting that, on January 24, 2010, he and others stole approximately 3,512 cases of cigarettes and a cargo trailer from a warehouse in East Peoria, Ill. During this theft, the warehouse was accessed by a hole cut in the roof and the security system was bypassed. A ladder and tools were discovered near the hole in the roof. In addition, a water bottle was recovered from the floor inside the warehouse. Analysis of DNA found on the water bottle revealed that the DNA profile was consistent with VILLA. The DNA profile also matched DNA recovered during the investigation of the Eli Lilly warehouse theft.
VILLA pleaded guilty to one count of conspiracy to commit theft from an interstate shipment and two counts of theft from an interstate shipment. When he is sentenced, VILLA faces a maximum term of imprisonment of 25 years.
VILLA has been detained since his arrest on May 3, 2012.
The investigation of the Enfield warehouse theft was led by the FBI in New Haven and the Enfield Police Department, with the assistance of several other United States Attorney’s Offices and federal, state and local law enforcement agencies that have been investigating large-scale thefts of pharmaceuticals and other products. The investigation of the warehouse theft in East Peoria was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the East Peoria Police Department.
This case is being prosecuted in the District of Connecticut by Assistant U.S. Attorney Anastasia E. King, with the assistance of Assistant U.S. Attorney K. Tate Chambers of the Central District of Illinois.
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[email protected]First Cousins from La Plant Charged with IncestRead the Press Release
United States Attorney Brendan V. Johnson announced that a woman and a man from La Plant, South Dakota have been indicted by a federal grand jury for two counts of Incest.
Nicholas White Eagle, age 26, and Fawn Lynn Scott, age 20, were indicted by a federal grand jury on June 12, 2013. White Eagle and Scott appeared before U.S. Magistrate Judge Mark A. Moreno on June 25 and 27, 2013 and pled not guilty to the indictment.
The maximum penalty upon conviction is up to 5 years in custody, a $250,000 fine, or both; 3 years of supervised release; and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges stem from incidents that occurred in April 2011 and February 2013 in La Plant. The charges are merely accusations and White Eagle and Scott are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
White Eagle and Scott were released to third party custodians pending trial. A trial date has not been set.
Final Defendant Sentenced in Puerto Rican Identity Theft RingRead the Press Release
Department of Justice
July 01, 20131
Office of Public AffairsSHERMAN, Texas – A 33-year-old Houston man has been sentenced for his role in a Puerto Rican identity theft ring operating in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Luigi Montes pleaded guilty in July 2012 to conspiracy to submit false statements to the U.S. Postal Service and false claims to the Internal Revenue Service and was sentenced to 60 months in federal prison on June 28, 2013, by U.S. District Judge Marcia Crone. Montes was ordered to pay restitution in the amount of $50,381 to the Internal Revenue Service.According to information presented in court, Luigi admitted that he and his co-conspirators used false identities to obtain private mail boxes (PMBs) in East Texas and elsewhere and prepare false tax returns in the names of Puerto Rican citizens who had not authorized the tax returns listing the PMBs as locations for the fraudulent tax refund checks to be mailed. A federal indictment was returned in Mar. 15, 2012 charging Luigi and five others in the scheme.
Lupe Mendoza, 31, of Houston, was sentenced to 15 months in federal prison on Apr. 15, 2013 for conspiracy to make a false statement to the U.S. Postal Service and ordered to pay restitution to the IRS in the amount of $31,270. Tania Estafania Aguilar Gomez, 25, of Dallas, was sentenced to 10 months in federal prison on Feb. 15, 2013 and ordered to pay restitution of $22,268 to the IRS. Rosalba Gomez, 47, of Dallas, was sentenced to five months in federal prison on Feb. 15, 2013. David Gomez, 22, of Omaha, Nebraska, was sentenced to 16 months in federal prison on Nov. 29, 2012. Joana Gomez, 50, of Balch Springs, Texas, was sentenced to five months in federal prison on Aug. 21, 2012.
This case was investigated by the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney J. Andrew Williams.
Federal Inmate Pleads Guilty to Possessing ContrabandRead the Press Release
JOHNSTOWN, Pa. - An inmate of FCI Loretto pleaded guilty in federal court to a charge of possession of contraband in prison, United States Attorney David J. Hickton announced today.
Lonnie Johnston, 31, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that on Oct. 31, 2012, Inmate Johnston possessed heroin and marijuana .
Judge Gibson scheduled sentencing for Oct. 31, 2013, at 9:30 a.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Special Investigative Staff at the Federal Correctional Institution at Loretto conducted the investigation that led to the prosecution of Johnston.
Executives from Miami-Area Mental Health Care Hospital Convicted for Participating in $70 Million Medicare Fraud SchemeRead the Press Release
A federal jury Friday convicted four individuals for their participation in a Medicare fraud scheme involving nearly $70 million in fraudulent billings by Hollywood Pavilion (HP), a mental health care hospital.
Friday’s verdict was announced by U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Karen Kallen-Zury, 59, of Lighthouse Point, Fla., and Daisy Miller, 44, of Hollywood, Fla., were each found guilty of one count of conspiracy to commit wire fraud and health care fraud, five substantive counts of wire fraud and two substantive counts of health care fraud. Michele Petrie, 64, of Ft. Lauderdale, Fla., was found guilty of one count of conspiracy to commit wire fraud and health care fraud and three substantive counts of wire fraud. Kallen-Zury, Miller, Petrie and a fourth defendant, Christian Coloma, 49, of Miami Beach, Fla., were also convicted of one count of conspiracy to pay bribes in connection with Medicare, with Kallen-Zury and Coloma also each being convicted on five substantive counts of paying bribes.
“The defendants participated in a massive scheme that attempted to defraud the United States of approximately $70 million by taking advantage of Medicare beneficiaries,” said Acting Assistant Attorney General Raman. “By paying bribes to a network of patient recruiters and falsifying documents, the defendants created the illusion of providing intensive psychiatric care to qualifying patients, when in reality they provided no care of substance. The verdict illustrates the success of the inter-agency Medicare Fraud Strike Force, which is dedicated to stamping out Medicare fraud.”
The defendants were charged in an indictment returned on Oct. 2, 2012. Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through HP, a state-licensed psychiatric hospital located in Hollywood that purportedly provided, among other things, inpatient psychiatric care and intensive outpatient psychiatric care. The defendants paid illegal bribes and kickbacks to patient brokers in order to obtain Medicare beneficiaries as patients at HP who did not qualify for psychiatric treatment. The defendants then submitted claims to Medicare for those patients who were procured through bribes and kickbacks.
Karen Kallen-Zury, the CEO and registered agent of HP, attempted to conceal the payment of bribes and kickbacks by creating false documents to make it appear as if legitimate services were being rendered.
Evidence at trial established that Miller, the clinical director of HP’s inpatient facility, and Petrie, the head of HP’s intensive outpatient program, facilitated the payment of bribes to patient recruiters and oversaw the fraudulent admissions and treatment of unqualified patients.
Trial evidence also demonstrated that Coloma, the director of physical therapy for an entity associated with HP, facilitated the payment of bribes and kickbacks, and he supervised the creation of false documents to conceal the bribery scheme.
From at least 2003 through at least August 2012, HP billed Medicare nearly $70 million for services that were not properly rendered, for patients that did not qualify for the services being billed and for claims for patients who were procured through bribes and kickbacks.
The criminal case is being prosecuted by Trial Attorneys Robert A. Zink, Andrew H. Warren and Anne McNamara of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, 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 Southern District of Florida.
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.
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.
Executive Sentenced to 21 Months in Prison for Participation in Securities Kickback SchemeRead the Press Release
BOSTON - A Cleveland man was sentenced in federal court today for using kickbacks in order to trigger investments in a thinly-traded stock.
Muhammad (M.J.) Shaheed, 45, was sentenced by U.S. District Judge Douglas P. Woodlock to 21 months in prison to be followed by two years of supervised release and forfeiture of $30,000. In February 2013, Shaheed pleaded guilty to mail and wire fraud arising out his participation in an undercover FBI operation. Shaheed admitted to paying secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in a publicly-traded company, Augrid Global Holdings Corporation, of which Shaheed was Chief Executive Officer. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents. What Shaheed did not know was that the purported investment fund representative was actually an undercover agent.
The conviction and sentence followed a year-long investigation focusing on preventing fraud in the micro-cap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies a share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.
Shaheed is one of 15 defendants charged criminally with having participated in the undercover operation. Nine of those charged have now pleaded guilty and two were convicted after a jury trial.
The Securities and Exchange Commission, which conducted a parallel civil investigation alongside the FBI undercover operation, cooperated with criminal authorities throughout the course of the investigation and prosecution.
U.S. Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Sarah E. Walters and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Essex County, N.J., Man Convicted on Weapons ChargesRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man, charged in connection with a year-long investigation by the FBI Safe Streets Task Force that led to the confiscation of 45 guns from the streets of Newark, East Orange and Irvington, was convicted on weapons charges, U.S. Attorney Paul J. Fishman announced today.
Randy Andrew, 36, of Irvington, N.J., was convicted by a federal jury of one count each of trafficking firearms and conspiracy to traffic firearms and three counts of possession of a firearm by a convicted felon after a one-week trial before U.S. District Judge William Walls in Newark federal court.According to documents filed in this case and the evidence at trial:
Andrew and seven others (all of whom have since pleaded guilty) were arrested in 2011 on charges of trafficking in firearms without a license. For more than one year the FBI Safe Streets Task Force led an operation to recover firearms in an effort to stem gun violence and take weapons off the streets of Newark and surrounding areas. Agents directed and supervised a “sting operation,” using a confidential informant to purchase firearms from illegal gun brokers and dealers. The operation yielded 45 illicit firearms, including several assault rifles, machine pistols, shotguns and semi-automatic handguns.
Andrew was selling firearms out of a laundromat in Irvington. On five separate occasions between May and July 2010, he met with the informant to discuss the purchase of assault weapons. On May 10, May 19 and June 9, 2010, Andrew sold firearms to the informant. On June 1 and July 12, 2010, he attempted to sell assault weapons to the informant, but his supplier could not provide the guns.
Andrew represented himself pro se after the first day of trial, assisted by defense counsel. The trafficking and conspiracy charges on which Andrew was convicted are punishable by a maximum potential penalty of five years in prison and the felon in possession charges are punishable by up to 10 years in prison. Sentencing is scheduled for Sept. 3, 2013.
U.S. Attorney Fishman credited the FBI special agents and local detectives and investigators from the FBI’s Safe Streets Task Force, which operates under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation that led to the guilty verdict. The Safe Streets Task Force comprises the FBI, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the Essex County Corrections Department, and the Newark, East Orange and Jersey City Police Departments.The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Amy D. Luria of the U.S. Attorney’s Office Criminal Division.
13-274Defense counsel: Paul Casteleiro Esq., Hoboken, N.J.