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5 July 2013
Fairfax County Man Sentenced to 300 Months for Producing Child Pornography and Attempted Enticement of A MinorRead the Press Release
ALEXANDRIA, Va. – Douglas Lee Payne, Jr., 31, of Fairfax County, Va., was sentenced today to 300 months in prison, followed by a lifetime period of supervised release, for charges of production of child pornography and attempted enticement of a minor.
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 Edwin C. Roessler, Jr., Acting Fairfax County Chief of Police, made the announcement after sentencing by United States District Judge Leonie M. Brinkema.
Payne pleaded guiltyon April 8, 2013. According to court documents, during the investigation of a Fairfax County probation violation in December 2011, electronic communications between Payne and two minor females, one in Indiana and another in Pennsylvania, were discovered. In these communications, Payne asked the minor victims for nude images and instructed them on how to pose. Payne had a least one child pornography image of each minor victim, which, as he had requested, had been sent to him. Payne and the minor victim in Indiana also had conversations about Payne going on a trip to Indiana to visit family and having sex with the minor on his trip home to Virginia. On December 28, 2011, Payne was on his way to Indiana when he was instructed to come home for a meeting with his Fairfax County probation officer.
This case was investigated by the Fairfax County Police Department and the FBI Washington Field Office’s Child Exploitation Task Force. Special Assistant United States Attorney Alicia J. Yass, a Trial Attorney with the Child Exploitation and Obscenity Section of the Justice Department’s Criminal Division, is prosecuting the case on behalf of the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
3 July 2013
William Lawrence Barrow Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on July 2, 2013, before U.S. District Judge Sam E. Haddon, WILLIAM LAWRENCE BARROW, a 40-year-old resident of Clearfield, Utah, pled guilty to conspiracy to possess with intent to distribute heroin and methamphetamine. Sentencing has been set for October 7, 2013. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
On January 10, 2013, a Montana Highway Patrol (MHP) Trooper observed a vehicle on Interstate 94 near Glendive that failed to have visible registration tags. The Trooper approached the passenger side window of the vehicle and detected the odor of raw marijuana coming from within the suspect vehicle. The driver of the vehicle was identified as R.B. The passenger of the vehicle was identified as M.C.
The Trooper was given permission to search the vehicle by the registered owner, M.C. During the search, the Trooper discovered a backpack inside the vehicle. M.C. advised the backpack did not belong to him. Likewise, R.B. also denied owning the backpack. In the backpack law enforcement found numerous items of drug paraphernalia such as tin foil, a torch, numerous small plastic baggies, and a locked box. Inside the locked box there were two bags containing powdery substances. One bag field tested positive for heroin and weighed approximately 2 ounces. The second bag field tested positive for methamphetamine and weighted approximately 1.5 ounces.
The investigation revealed that R.B. and M.C. drove from Dickinson, North Dakota, to Billings on January 9, 2013. They stayed at a local motel in Billings and while at the motel, R.B. went to another room and stayed for about 2 hours. R.B. was meeting with his source of supply for methamphetamine and heroin. It was believed the male source of supply was still staying at the motel in Billings. R.B. and M.C. had previously traveled to Billings just before New Year's Day, 2013, to pick up more drugs from the same source of supply.
Law enforcement returned to the motel in Billings and discovered the source of supply, BARROW, was still staying at the motel.
Agents obtained a search warrant for the motel room. Just prior to executing the search warrant agents noticed BARROW and the female with him were packing up their car and preparing to leave the motel. Agents detained BARROW and the female passenger until a K9 Officer was able to arrive and conduct an exterior sniff test of the vehicle BARROW was driving. The K9 alerted on the vehicle.
The car and the motel room were searched by law enforcement. Agents found syringes, plastic baggies, two computers, four cellular phones - which contained several text messages between BARROW and R.B. - a leather notebook with drug ledger, a flash drive, and a false bottom Arizona Iced tea can.
BARROW was detained at the Billings DEA Office. Agents seized $2,503.22 from BARROW's person along with approximately three (3) ounces of heroin wrapped in a plastic bag.
Further investigation revealed that BARROW was R.B.'s main drug connection out of Utah. BARROW had historical distributed at least 100 grams of methamphetamine and 100 grams of heroin to R.B. during the course of the conspiracy.
BARROW faces possible penalties of a mandatory minimum of 5 years in prison and could be sentenced to 40 years, a $2,000,000 fine, and 4 years supervised release.
The illegal activities described in this case were in part attributable to the demand currently being noted in the areas referred to as the "Bakken Boom." The change of plea in this case is a direct result of the cooperative efforts of the Drug Enforcement Agency and the Montana Division of Criminal Investigations in those communities directly affected by the population influx due to the Bakken.
Warren County Man Sentenced to 28 Years in Prison on Federal Child Pornography ChargesRead the Press Release
St. Louis, MO - RANDALL PAUL ABERNATHY, Warrenton, MO, was sentenced to 339 months in prison for his production and transportation of child pornography between September 2010 and September 2011. Abernathy pled guilty in January. He appeared today for sentencing in St. Louis before United States District Judge Catherine D. Perry.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Erin Granger handled the case for the U.S. Attorney’s Office.
Virginia-Based Corporation Agrees to Pay $5.75 Million to Resolve False Claims Act AllegationsRead the Press Release
Tampa, FL – The Justice Department announced today that Science Applications International Corporation (SAIC) will pay $5.75 million to the federal government to resolve a lawsuit alleging violations of the False Claims Act. SAIC, headquartered in McLean, Virginia, is a defense contractor that provides professional engineering and other services to various agencies and departments of the United States.
The lawsuit centered on a General Services Administration Blanket Purchase Agreement (BPA) awarded to SAIC, in September 2006, for the provision of professional engineering and consulting services. Those services aided non-traditional assessment (NTA) work, which is the study and evaluation of the military utility of new products and emerging technologies. Through nineteen Task Orders issued under the BPA, SAIC performed NTA work for multiple DOD entities including U.S. Central Command at MacDill Air Force Base in Tampa, as well as the Coalition and Irregular Warfare Center at Nellis AFB in Las Vegas, Nevada. The General Services Administration (GSA) is an agency of the United States Government. Through its Federal Acquisition Service, GSA assists in the management and support of other federal agencies and government components through the provision of products and services to them. In some instances, GSA will assist a federal government agency by issuing a competitive contract solicitation for services required by that agency.
The United States contends that SAIC personnel aided others to induce GSA to issue the BPA solicitation by misleading GSA personnel into believing they were issuing the BPA on behalf of a federal government agency. In fact, the solicitations were issued on behalf of an entity associated with a state institution in New Mexico. An employee of that state institution was appointed to review cost proposals and billings by SAIC, but failed to discharge his duties independently by, among other things, not properly reviewing and vetting cost and scope of work estimates prepared by SAIC. Additionally, the government alleges that SAIC, and others, promoted the BPA to various DOD entities as a contract vehicle that had already been subject to competition, thereby bypassing truly competitive bidding on that work.
Pursuant to the settlement, SAIC will make a one-time payment of $5,750,000.00 to the United States. The DOD entities will retain all work performed, or work product created by SAIC, under the BPA. The U.S. will not pay any further monies for that work, nor remit or refund any monies to SAIC for that work.
“Federal contracts must be awarded based on full disclosure and fair dealing,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “It is completely unacceptable for taxpayer dollars to be paid under circumstances where the integrity of the contracting process has been undermined.” “This recovery illustrates the emphasis and resources we place on detection and recovery of fraud, waste, and abuse in government procurement contracts – particularly those involving defense contractors and others who supply goods and services to the Department of Defense, the branches of our military, and their bases,” said Robert E. O’Neill, U.S. Attorney for the Middle District of Florida."SAIC received a contract, awarded by GSA, from a fictitious government agency," said GSA Inspector General Brian D. Miller. "This deceptive scheme shows that we must be on the lookout for all forms of contract fraud."
The lawsuit was filed by a whistleblower (also known as a relator), under the qui tam provisions of the False Claims Act, which allows private parties to file suit on behalf of the United States and share in any recovery. Timothy Ferner, a former active-duty Lt. Colonel assigned to the CIWC, made the allegations which initiated the government’s investigation. Ferner will receive a $977,500.00 share of the recovery from SAIC.
This case was investigated jointly by Assistant U.S. Attorney Charles Harden of the United States Attorney’s Office for the Middle District of Florida, Trial Attorneys Don Williamson and Niall O’Donnell of the Commercial Litigation Branch of the Justice Department’s Civil Division, and Assistant Special Agent in Charge James Taylor of the Atlanta Office of the Inspector General for GSA. Substantial investigative support was also provided by agents from the Tampa Resident Agency of the Defense Criminal Investigative Service, the Melbourne Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command, and the MacDill Detachment of the Air Force Office of Special Investigations.
The claims settled by today’s agreement are allegations only; there has been no determination of liability.
Veteran Affairs Employee Indicted for Sale of Veterans' Identity InformationRead the Press Release
Tampa, Florida - United States Attorney Robert E. O'Neill announces the unsealing of an indictment yesterday charging David F. Lewis with wrongful disclosure of health information, access device fraud, and aggravated identity theft. If convicted, Lewis faces a maximum penalty of ten years in federal prison on each count of wrongful disclosure of health information and ten years’ imprisonment on each count of access device fraud, all to be followed by up to two years for each aggravated identity theft offense. The Indictment also notifies Lewis that the United States is seeking a money judgment in the amount of $105,271.00, the proceeds of the charged criminal conduct.
According to the indictment and court documents, Lewis was a Department of Veterans Affairs employee who stole the identities of patients at the James A. Haley Veterans Hospital. Lewis then sold those identities to others, who used them to file fraudulent U.S. income tax returns and obtain fraudulent tax refunds.
Special Agent in Charge Quentin G. Aucoin of the Veterans Affairs, Office of the Inspector General, stated, "These crimes are particularly egregious, and the VA Office of Inspector General is dedicated to aggressively investigating individuals who misuse patient information, especially when used for personal and financial gain."
Special Agent in Charge James Robnett of the Internal Revenue Service - Criminal Investigation stated, "The indictment and arrest of David F. Lewis by members of the Tampa Bay Alliance, in partnership with the US Attorney's office, demonstrates the continued commitment the members of the alliance have in investigating identity theft and stolen identify refund fraud that is in the Tampa Bay area. The alliance will continue to vigorously investigate this crime which has victimized the most vulnerable citizens in the Tampa Bay area."
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Department of Veterans Affairs - OIG, the Internal Revenue Service - Criminal Investigation, the Tampa Police Department, and the Florida Highway Patrol. It will be prosecuted by Assistant United States Attorney Sara C. Sweeney.
Two Buffalo Women Charged in Tax SchemeRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned an indictment charging Keianna A. Jones, 27, and Dominique N. Taylor, 27, both of Buffalo, N.Y., with conspiracy to defraud the government with respect to claims and assisting in the preparation of false income tax returns. The conspiracy charge carries a maximum sentence of 10 years in prison and a $250,000 fine and the false income tax return charge carries a maximum sentence of three years in prison and a $100,000 fine.
Assistant U.S. Attorney Robert C. Moscati, who is handling the case, stated that according to the indictment, the defendants obtained blank W-2 forms from local businesses and prepared false W-2 forms. Jones and Taylor then assisted others in filing false returns using the fraudulent W-2s. This resulted in numerous individuals receiving income tax refunds to which they were not entitled.
The indictment is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service - Criminal Investigation Division, under the direction of New York Field Office Special Agent- in-Charge Toni M. Weirauch.The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Two Aryan Brotherhood of Texas Gang Members Plead Guilty to Federal Racketeering ChargesRead the Press Release
Two members of the Aryan Brotherhood of Texas gang (ABT) pleaded guilty today to racketeering charges related to their membership in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Glen Ray Millican, aka “Fly,” 39, and Justin Christopher Northrup, aka “Ruthless,” 28, both of Houston, each pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.
According to court documents, Millican, Northrup and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. Millican, Northrup and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.
By pleading guilty to racketeering charges, Millican and Northrup admitted to being members of the ABT criminal enterprise and agreeing to commit multiple acts of violence and/or narcotics trafficking on behalf of the ABT.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
At sentencing, scheduled for Sept. 26, 2013, Millican and Northrup each face a maximum penalty of life in prison.
Millican and Northrup are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. They are the seventh and eighth defendants, respectively, to plead guilty.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department – Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Southern District of Texas.
Two Aryan Brotherhood of Texas Gang Members Plead Guilty to Federal Racketeering ChargesRead the Press Release
HOUSTON - Two members of the Aryan Brotherhood of Texas gang (ABT) pleaded guilty today to racketeering charges related to their membership in the ABT’s criminal enterprise, announced United States Attorney Kenneth Magidson and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Glen Ray Millican, aka “Fly,” 39, and Justin Christopher Northrup, aka “Ruthless,” 28, both of Houston, each pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.
According to court documents, Millican, Northrup and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. Millican, Northrup and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.
By pleading guilty to racketeering charges, Millican and Northrup admitted to being members of the ABT criminal enterprise.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
At sentencing, scheduled for Sept. 26, 2013, at 2:00 p.m., Millican and Northrup each face a maximum penalty of life in prison.
Millican and Northrup are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. They are the seventh and eighth defendants, respectively, to plead guilty.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; sheriff’s offices in Harris, Tarrant, Atascosa, Orange and Waller Counties; police departments in Alvin, Carrollton and Mesquite Texas; as well as the Montgomery and Atascosa County District Attorney’s Offices.The case is being prosecuted by the U.S. Attorney’s Office of the Southern District of Texas and the Criminal Division’s Organized Crime and Gang Section.
Two Area Men Plead Guilty to Federal Charges Including the Assault of A Federal OfficerRead the Press Release
St. Louis, MO - FREDERICK CRAYTON, St. Louis City, pled guilty to federal gun and assault charges involving the April 18, 2013, assault of a federal officer. His brother DWAYNE CRAYTON, pled guilty yesterday to charges of selling crack cocaine to an undercover officer. Both defendants appeared before United States District Judge Audrey G. Fleissig in St. Louis.
According to court documents, on April 15, 2013, Dwayne Crayton sold crack cocaine to an undercover agent. Three days later on April 18, 2013, his brother Frederick and James Jones arranged to sell three firearms to an ATF undercover agent and two Confidential Informants. During a struggle involving several firearms, Frederick Crayton assaulted the undercover agent in an attempt to rob the agent of the money that was to be used to buy the three firearms.
Co-defendant James Edward Jones, also of St. Louis City, was indicted in April on related charges and awaits trial.
These charges carry a penalty range of5 to 25 years in prison and/or fines up to $1,000,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges. Sentencings have been set for October 2013.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. The remaining defendant is presumed to be innocent unless and until proven guilty.
This case was investigated by the Bureau of Alcohol, Tobacco and Firearms. Assistant United States Attorney Tom Mehan is handling the case for the U.S. Attorney’s Office.Twenty-Fifth Defendant Pleads Guilty in Manhattan Federal Court in Connection with Lirr Disability Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Martin J. Dickman, Inspector General of the Railroad Retirement Board (“RRB-OIG”), George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Barry L. Kluger, Inspector General of the New York State Metropolitan Transportation Authority (“MTA-OIG”), announced that ROBERT ELLENSOHN, a former bridges and buildings inspector for the Long Island Railroad (“LIRR”), pled guilty today for his role in the allegedly massive fraud scheme in which LIRR workers claimed to be disabled upon early retirement so that they could receive disability benefits to which they were not entitled. ELLENSOHN pled guilty in Manhattan federal court before U.S. District Judge Sidney H. Stein. He is the 33rd defendant to be charged, and the 25th defendant to plead guilty in the case, which alleges a pervasive pattern of fraudulent disability claims being filed with the U.S. Railroad Retirement Board (“RRB”) by retiring LIRR employees.
According to the Information filed today and statements made in other public filings and in court:
The LIRR Disability Fraud Scheme
The RRB is an independent U.S. agency that administers benefit programs, including disability benefits, for the nation’s railroad workers and their families. A unique LIRR contract allowed employees to retire at the relatively young age of 50 – the age of eligibility has since changed to 55 – if they had been employed by the LIRR for at least 20 years. Eligible employees are entitled to receive an LIRR pension, which is a portion of the full retirement payment for which they are eligible at 65. In addition, at full retirement age (between age 60 and age 65 depending on years of service), they are eligible to receive an RRB retirement pension. For LIRR workers who retired at 50 with only an LIRR pension, they would receive less than their prior salary and substantially lower pension payments than those to which they would be entitled at full retirement age. However, LIRR employees who retired and claimed disability could receive a disability payment from the RRB on top of their LIRR pension, regardless of age. A retiree’s LIRR pension, in combination with RRB disability payments, can be roughly equivalent to the base salary earned during his or her career.
Hundreds of LIRR employees have allegedly exploited the overlap between the LIRR pension and the RRB disability program by pre-planning the date on which they would falsely declare themselves disabled so that it would coincide with their projected retirement date. These false statements, made under penalty of prosecution in disability applications, allowed LIRR employees to retire as early as age 50 with an LIRR pension, supplemented by the fraudulently obtained RRB disability annuity. From 1995 through 2011, more than 75% of LIRR employees stopped working and began receiving RRB disability benefits, whereas during this same period, only 25% of retiring Metro-North employees stopped working and began receiving RRB disability benefits. During the period 2004 through 2008, only three doctors were responsible for approximately 86% of the disability claims submitted by LIRR retirees. Of these, one has died and one, Dr. Peter J. Ajemian, pled guilty and admitted that he declared “large numbers of Long Island Railroad employees” to be disabled even though they were not disabled and could have continued working in their railroad jobs. Dr. Ajemian was sentenced in May 2013 to eight years in prison.
ELLENSOHN, 59, of North Merrick, New York, pled guilty to one count of conspiracy to commit mail fraud, wire fraud, and health care fraud; one count of conspiracy to defraud the United States and the RRB; and one count of wire fraud. He faces a maximum sentence of 45 years in prison. ELLENSOHN is scheduled to be sentenced by Judge Stein on January 8, 2014.
Thirty-three people have been charged in connection with the LIRR disability fraud scheme, 25 of whom have now pled guilty. Of the 25 defendants that have pled guilty, two have been sentenced. The charges against the remaining defendants are merely allegations, and they are all presumed innocent unless and until proven guilty.
Mr. Bharara praised the work of the RRB-OIG, the FBI, and the MTA-OIG for their outstanding work in the investigation, which he noted is ongoing. He also acknowledged the previous investigation conducted by the New York State Attorney General’s Office into these pension fraud issues.
The case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Justin Weddle, Nicole Friedlander, and Daniel Tehrani are in charge of the prosecution.
Twenty-Fifth Defendant Pleads Guilty in Manhattan Federal Court in Connection with LIRR Disability Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Martin J. Dickman, Inspector General of the Railroad Retirement Board (“RRB-OIG”), George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Barry L. Kluger, Inspector General of the New York State Metropolitan Transportation Authority (“MTA-OIG”), announced that ROBERT ELLENSOHN, a former bridges and buildings inspector for the Long Island Railroad (“LIRR”), pled guilty today for his role in the allegedly massive fraud scheme in which LIRR workers claimed to be disabled upon early retirement so that they could receive disability benefits to which they were not entitled. ELLENSOHN pled guilty in Manhattan federal court before U.S. District Judge Sidney H. Stein. He is the 33rd defendant to be charged, and the 25th defendant to plead guilty in the case, which alleges a pervasive pattern of fraudulent disability claims being filed with the U.S. Railroad Retirement Board (“RRB”) by retiring LIRR employees.
According to the Information filed today and statements made in other public filings and in court:
The LIRR Disability Fraud Scheme
The RRB is an independent U.S. agency that administers benefit programs, including disability benefits, for the nation’s railroad workers and their families. A unique LIRR contract allowed employees to retire at the relatively young age of 50 – the age of eligibility has since changed to 55 – if they had been employed by the LIRR for at least 20 years. Eligible employees are entitled to receive an LIRR pension, which is a portion of the full retirement payment for which they are eligible at 65. In addition, at full retirement age (between age 60 and age 65 depending on years of service), they are eligible to receive an RRB retirement pension. For LIRR workers who retired at 50 with only an LIRR pension, they would receive less than their prior salary and substantially lower pension payments than those to which they would be entitled at full retirement age. However, LIRR employees who retired and claimed disability could receive a disability payment from the RRB on top of their LIRR pension, regardless of age. A retiree’s LIRR pension, in combination with RRB disability payments, can be roughly equivalent to the base salary earned during his or her career.
Hundreds of LIRR employees have allegedly exploited the overlap between the LIRR pension and the RRB disability program by pre-planning the date on which they would falsely declare themselves disabled so that it would coincide with their projected retirement date. These false statements, made under penalty of prosecution in disability applications, allowed LIRR employees to retire as early as age 50 with an LIRR pension, supplemented by the fraudulently obtained RRB disability annuity. From 1995 through 2011, more than 75% of LIRR employees stopped working and began receiving RRB disability benefits, whereas during this same period, only 25% of retiring Metro-North employees stopped working and began receiving RRB disability benefits. During the period 2004 through 2008, only three doctors were responsible for approximately 86% of the disability claims submitted by LIRR retirees. Of these, one has died and one, Dr. Peter J. Ajemian, pled guilty and admitted that he declared “large numbers of Long Island Railroad employees” to be disabled even though they were not disabled and could have continued working in their railroad jobs. Dr. Ajemian was sentenced in May 2013 to eight years in prison.
ELLENSOHN, 59, of North Merrick, New York, pled guilty to one count of conspiracy to commit mail fraud, wire fraud, and health care fraud; one count of conspiracy to defraud the United States and the RRB; and one count of wire fraud. He faces a maximum sentence of 45 years in prison. ELLENSOHN is scheduled to be sentenced by Judge Stein on January 8, 2014.
Thirty-three people have been charged in connection with the LIRR disability fraud scheme, 25 of whom have now pled guilty. Of the 25 defendants that have pled guilty, two have been sentenced. The charges against the remaining defendants are merely allegations, and they are all presumed innocent unless and until proven guilty.
Mr. Bharara praised the work of the RRB-OIG, the FBI, and the MTA-OIG for their outstanding work in the investigation, which he noted is ongoing. He also acknowledged the previous investigation conducted by the New York State Attorney General’s Office into these pension fraud issues.
The case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Justin Weddle, Nicole Friedlander, and Daniel Tehrani are in charge of the prosecution.
U.S. v. Robert Ellensohn Information
Tucson Man Sentenced to 51 Months for Bank Robbery SpreeRead the Press Release
OAKLAND – Raymond David Lopez was sentenced today to 51 months in prison for a string of bank robberies he committed in May and June of 2012, announced United States Attorney Melinda Haag.
Lopez pleaded guilty on April 3, 2013, to six counts of bank robbery. According to the plea agreement, Lopez admitted to robbing the following banks of the amounts, and on the dates, listed below by using verbal demands, a demand note, and intimidation:
- $2,475 from a U.S. Bank branch in Pleasanton, California, on May 9, 2012
- $2,606 from a U.S. Bank branch in Pleasant Hill, California, on May 13, 2012
- $1,409 from a First Community Bank branch in Alameda, California, on May 26, 2012
- $1,135 from a Bank of America branch in Lafayette, California, on May 29, 2012
- $4,900 from a U.S. Bank branch in Alameda, California, on June 4, 2012
- $756 from a U.S. Bank branch in Dublin, California, on June 12, 2012
Lopez also admitted to the following bank robberies outside of the Northern District of California, which he accomplished in similar fashion:
- $7,214 from a River City Bank branch in Roseville, California, on April 26, 2012
- $3,542 from another River City Bank branch on May 2, 2012
- $4,000 from a Woodforest National Bank branch in Amarillo, Texas, on April 14, 2012
All stolen funds were insured by the FDIC.
Mr. Lopez, 30, of Tucson, Arizona, was indicted by a federal grand jury on August 30, 2012. He was charged in the Indictment with six counts of bank robbery in violation of Title 18, United States Code, Section 2113(a).
The sentence was handed down by the Honorable Phyllis J. Hamilton, U.S. District Court Judge, following a guilty plea to all six counts alleged in the Indictment. Judge Hamilton also sentenced the defendant to a three-year period of supervised release and ordered the defendant to pay a total of $28,037 in restitution to the victim banks. The defendant remained in custody and will immediately begin serving the sentence immediately.
Andrew S. Huang and Christina McCall are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Vanessa Vargas. The prosecution is the result of an investigation by the Federal Bureau of Investigation, in conjunction with the Dublin Police Department, Pleasanton Police Department, El Cerrito Police Department, Pleasant Hill Police Department, Alameda Police Department, Contra Costa County Sheriff’s Office, Alameda County Sheriff’s Department, and Roseville Police Department.
(Lopez Indictment )
Trans1, Inc. to Pay U.s. $6 Million to Settle False Claims Act AllegationsRead the Press Release
Baltimore, Maryland – Medical device manufacturer TranS1, Inc., now known as Baxano Surgical, Inc., has agreed to pay the United States $6 million to resolve allegations under the civil False Claims Act that the company caused health care providers to submit false claims to Medicare and other federal health care programs for minimally-invasive spine surgeries.
The settlement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein; Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division; Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Special Agent in Charge Drew Grimm, Office of Personnel Management, Office of Inspector General.
This settlement resolves allegations that TranS1 knowingly caused health care providers to submit claims with incorrect diagnosis or procedure codes for certain minimally-invasive spine fusion surgeries in which physicians used TranS1’s AxiaLIF System™, a device developed as an alternative to invasive spine fusion surgeries. The United States further alleges that TranS1 improperly counseled physicians and hospitals to bill for the AxiaLIF System™ by using incorrect and inaccurate codes intended for more invasive spine fusion surgeries. As a result, the United States contends that health care providers received greater reimbursement than they were entitled to for performing the minimally-invasive AxiaLIF procedures.
“A medical device manufacturer violates the law when it advises physicians and hospitals to report the wrong codes to federal health insurance programs in order to increase reimbursement rates,” said Rod J. Rosenstein, United States Attorney for the District of Maryland. “Health care providers are required to bill federal health care programs truthfully for the work they perform.”
“The Justice Department is committed to ensuring that medical device manufacturers follow the law when providing devices to beneficiaries of federal health care programs,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “It is critical that health care providers bill federal health care programs accurately and honestly for the work they perform, and it is imperative that they base their selection of medical devices on the best interests of their patients, not on whether a device manufacturer is paying them for promotional speaking or consulting.”
The settlement also resolves allegations that TranS1 knowingly paid illegal remuneration to certain physicians for participating in speaker programs and consultant meetings intended to induce them to use TranS1 products, in violation of the Federal Anti-Kickback Statute, and thereby caused false claime to be submitted to federal health care programs. The Anti-Kickback Statute, prohibits offering or paying remuneration to induce referrals of items or services covered by federally-funded programs and is intended to ensure that a physician’s medical judgments are not compromised by improper financial incentives and are based solely on the best interests of the patient.
Finally, the settlement resolves the United States’ allegations that TranS1 promoted the sale of its AxiaLIF System™ for uses that were not approved or cleared by the U.S. Food and Drug Administration, including in certain procedures to treat complex spine deformity, which were not covered by federal health care programs.
As part of the settlement, TranS1 has agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. That agreement provides for procedures and reviews to be put in place to avoid and promptly detect similar conduct.
“Using kickbacks to encourage health providers to make false payment claims will not be tolerated,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “TranS1's agreement to now comply with government health laws is encouraging.”
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the District of Maryland and is captioned United States ex rel. Kevin Ryan v. TranS1, Inc. As part of today’s resolution, Mr. Ryan will receive $1,020,000 from the settlement.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.5 billion.
The settlement was a result of an investigation by the U.S. Attorney’s Office for the District of Maryland, the Justice Department’s Civil Division, the Inspector General of Department of Health and Human Services, the Department of Defense Criminal Investigative Services and the Inspector General for the Office of Personnel Management. The case was handled by Assistant U.S. Attorneys Thomas Barnard and Thomas Corcoran and Trial Attorney Colin Huntley of the Justice Department Civil Division.
Tony Ray Many Guns Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on July 2, 2013, before U.S. Magistrate Judge Keith Strong, TONY RAY MANY GUNS, a 36-year-old resident of Browning and an enrolled member of the Blackfeet Tribe, pled guilty to assault resulting in serious bodily injury. Sentencing has been set for October 21, 2013. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Ryan G. Weldon, the government stated it would have proved at trial the following:
On February 28, 2013, MANY GUNS' wife was sleeping at a friend's home in Browning, which is within the exterior boundaries of the Blackfeet Indian Reservation. At approximately 2:00 a.m., MANY GUNS showed up at the residence after drinking "downtown." He knocked on the bedroom window so that his wife would let him inside, but she did not open the window. MANY GUNS instead entered the house through the front door and was angry that his wife failed to aid in his entrance. While they were both in bed, MANY GUNS began to hit his wife by striking her in the mouth and in the cheek with a closed fist. MANY GUNS' wife started to return blows but soon rolled onto her stomach and buried her face in the mattress in an effort to protect herself.
MANY GUNS continued to hit his wife and eventually stuck her index finger in his mouth and bit down "as hard as he could." In an effort to get MANY GUNS to release her finger, his wife used her left hand to dig into MANY GUNS' eye. MANY GUNS let go and then used both of his hands to strangle his wife. MANY GUNS' wife recalled making gasping and choking noises and began to pray out loud. MANY GUNS said, "You better pray."
The physical altercation stopped for a short time, and MANY GUNS told his wife that he wanted something to eat. He made his wife go with him. Once in the kitchen, MANY GUN's wife said something that angered him. MANY GUNS responded by slamming her into the wall near the refrigerator. He then grabbed his wife around the neck and strangled her until she lost consciousness. MANY GUNS' wife did not know how long she was unconscious, but when she regained consciousness, MANY GUNS was holding her up by her arms in the same spot. She reached out and pushed at MANY GUNS and slapped him in the face. MANY GUNS returned fire, using a closed fist to strike her in the mouth, which caused bleeding. MANY GUNS gave his wife a towel and said, "Don't bleed on my floor."
The next day, MANY GUNS' wife soaked her finger in an attempt to prevent infection. MANY GUNS' wife eventually told him, "It felt like you were [going] [to] bite my finger off." MANY GUNS responded, "I was trying to." He then told her that she should not try to fight back.
MANY GUNS' wife went to the hospital because her finger became infected and she was unable to move it. The injury to the finger of MANY GUNS' wife was extremely painful. She received Lortab, which is a narcotic drug, for the pain and was required to go through IV therapy.
On March 4, 2013, MANY GUNS was interviewed about his wife's finger. MANY GUNS initially said that he did not remember anything happening to his wife's finger. After further questioning, MANY GUNS eventually recalled that his wife was upset and yelled that she hated him. While trying to get his wife to calm down, MANY GUNS stated that his wife reached forward and pressed a finger into his eyes. MANY GUNS claimed that was when he bit her finger. MANY GUNS acknowledged that he bit his wife's finger for one minute and remembered that she was screaming, crying, and bleeding profusely.
MANY GUNS faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Bureau of Indian Affairs.
Three More Charged in Scheme to Defraud BP Oil Spill Claims FundRead the Press Release
BIRMINGHAM – Federal prosecutors this week charged three more people as part of a conspiracy to fraudulently take money from funds established to pay claims from individuals and businesses harmed by the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.In separate informations filed Monday in U.S. District Court, the U.S. Attorney's Office charged JEREMY JAMAL BELL, 24, and ANTHONY KEITH BIVINS, 42, both of Birmingham, and CAMETRICA L. MENIFIELD, 31, of Bessemer, with conspiring in 2011 to participate in a scheme to defraud the Gulf Coast Claims Facility. Combined, the three defendants were paid about $138,881 from the oil spill claims funds. All three defendants have signed plea agreements with the government expressing their intention to plead guilty to the charges.
The U.S. Attorney's Office has now charged eight people with conspiring to defraud the oil spill claims funds, and the first five have pled guilty.
British Petroleum, which owned the Macondo oil well where the Deepwater Horizon drilling rig exploded, established the Gulf Coast Claims Facility in June 2010 for the purpose of administering and settling claims resulting from the oil spill disaster. A subsidiary of BP established the Deepwater Horizon Oil Spill Trust Fund in August 2010 to pay certain types of claims and expenses from the oil spill, including claims settled through the GCCF.
Bell, Bivins and Menifield are each charged with independently agreeing to provide personal information, such as Social Security numbers and bank account information, to individuals who recruited them so that they could use the information to file fraudulent claims for lost wages with the GCCF. The recruiters are not named in the charging documents. After the fraudulent claims were paid to Bell, Bivins and Menifield, each of them returned part of the money to the individuals who recruited them to participate in the scheme, according to the informations and plea agreements.The GCCF paid Bell $42,877 from the Deepwater Horizon Oil Spill Trust Fund on Aug. 9, 2011, according to the court documents. Later that month, Bell withdrew $42,402 from his account and gave it to the person who recruited him to participate in the scheme, according to the documents.
Bivins received about $61,987 in claim funds in October 2011. On Oct. 29, 2011, according to his information and plea agreement, he cashed the claims check, used some of it to buy money orders and a prepaid $5,000 debit card, as directed, and turned it all over to a co-conspirator. He was given $5,000 and the prepaid debit card in return.
Menifield received about $34,023 from the GCCF on July 21, 2011, according to her information and plea agreement. On July 22, 2011, she gave about $24,000 to a co-defendant and kept about $10,000, according to the documents.
The FBI investigated these cases. Assistant U.S. Attorney Henry Cornelius is prosecuting the cases.
Three Men Sentenced After Pleading to Violations of the Racketeer Influenced Corrupt Organization Act, the Federal Gun Control and Controlled Substances Acts, and Obstruction of JusticeRead the Press Release
MELVIN HUDSON, age 26, MOSES LAWSON, age 27, and TEDRICK REYNARD, age 24, all of Harvey, Louisiana were sentenced today before U.S. District Judge Lance M. Africk after pleading guilty to Violations of the Racketeer Influenced Corrupt Organization Act, the Violent Crime in Aid of Racketeering Act, the Federal Gun Control and Controlled Substances Acts, Aiding and Abetting, and Obstruction of Justice.
MELVIN HUDSON was sentenced to twenty-five (25) years imprisonment and ten (10) years of supervised release. HUDSON pled guilty to Count 1: Conspiracy to Violate the Racketeer Influence and Corrupt Organizations Act (“RICO”), in violation of Title 18, United States Code, Section 1962(d); Count 2: Conspiracy to Distribute and Possess with Intent to Distribute over 280 grams of Cocaine Base (“crack”), in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(A), and 846; Count 5: Conspiracy to Possess Firearms, in violation of Title 18, United States Code, Section 924(o); Count 6: Obstruction of Justice, in violation of Title 18, United States Code, Section 1519; Count 15: Distribution of a Quantity of Heroin, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C); Count 16: Prohibited Person in Possession of a Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2); Count 17: Possession with Intent to Distribute Cocaine Base (“crack”), in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C); and Count 18: Possession of a Firearm in Furtherance of a Drug Trafficking Crime, in violation of Title 18, United States Code, Section 924(c)(1)(A)(i). Melvin Hudson pled guilty pursuant to an 11(c)(1)(C) plea agreement.
MOSES LAWSON was sentenced to twenty-five (25) years imprisonment and ten (10) years of supervised release. LAWSON was also ordered to pay restitution to the victim’s family in the amount of $8,000.00. LAWSON pled guilty to Count 1: Conspiracy to violate the Racketeer Influence and Corrupt Organizations Act (“RICO”), in violation of Title 18, United States Code, Section 1962(d); Count 2: Conspiracy to Distribute and Possess with Intent to Distribute over 280 grams of Cocaine Base (“crack”), in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(A), and 846; Count 7: Prohibited Person in Possession of a Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2); and Count 8: Person in Possession of a Stolen Firearm, in violation to Title 18, United States Code, Sections 922(j) and 924(a)(2). LAWSON admitted that both he and other Murder Squad members participated in the murder Reginald Francois on April 1, 2010. LAWSON pled guilty pursuant to an 11(c)(1)(C) plea agreement.
TEDRICK REYNARD was sentenced to twenty (20) imprisonment and ten (10) years of supervised release. REYNARD pled guilty to Count 1:Conspiracy to violate the Racketeer Influence and Corrupt Organizations Act (“RICO), in violation of Title 18, United States Code, Section 1962(d); Count 2: Conspiracy to Distribute and Possess with Intent to Distribute over 280 grams of Cocaine Base (“crack”), in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(A), and 846; Count 5: Conspiracy to Possess Firearms, in violation of Title 18, United States Code, Section 924(o); Count 20: Distribution of a Quantity of Cocaine Base (“crack”), in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C); and Count 22: Possession with Intent to Distribute a Quantity of Cocaine Base (“crack”), in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C).
This case arose out of a joint investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco and Firearms, and the Jefferson Parish Sheriff’s Office. This investigation targeted an area which exhibited a disproportionate amount of violent crimes and narcotics trafficking. During the course of the investigation, specific individuals were identified as the main perpetrators of many of the violent acts and much of the narcotics distribution. Federal and local law enforcement officers interviewed witnesses, confidential informants, as well as state defendants, relative to the targeted individuals. It was revealed that a group of individuals operated in various areas of Harvey, Louisiana, specifically the neighborhoods known as Scottsdale and Haydel. This group controlled these areas for their narcotics distribution activities through violence and through threats of violence, to include murder, attempted murder, obstruction and assaults. They were referred to as the Harvey Hustlers and/or Murder Squad.
The “Murder Squad,” or “MS,” was a faction of the Harvey Hustlers composed primarily of individuals residing in the Harvey, Louisiana area of Jefferson Parish, Louisiana. While they primarily operated on the Westbank of Jefferson Parish, members conducted business in other parts of the Eastern District of Louisiana. The “Harvey Hustlers” also referred to as “HH” originated in the Harvey area in the mid-1980s. Members of the organization “hustled” meaning they distributed illegal narcotics.
The case was investigated by the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco and Firearms, and the Jefferson Parish Sheriff’s Office. The case was being prosecuted by Assistant United States Attorneys Duane A. Evans and Bill McSherry.
Tacoma, Wash. Medical Firm to pay $14.5 Million to Settle Overbilling AllegationsRead the Press Release
WASHINGTON - Sound Inpatient Physicians Inc. will pay $14.5 million to settle allegations that it overbilled Medicare and other federal health care programs, the Justice Department announced today. Sound Physicians is a Tacoma, Wash.-based provider of hospitalists and other physicians to hospitals and other medical facilities. It employs more than 700 hospitalists and post-acute physicians, who provide services at 70 hospitals and a growing network of post-acute facilities in 22 states.
“Physicians who participate in Medicare and other federal health care programs must document and bill for their services accurately and honestly,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The Department of Justice is committed to ensuring that Medicare and other federal funds are expended appropriately.”
Today’s settlement addresses allegations that, between 2004 and 2012, Sound Physicians knowingly submitted to federal health benefits programs inflated claims on behalf of its hospitalist employees for higher and more expensive levels of service than were documented by hospitalists in patient medical records. Hospitalists are physicians, typically trained in internal medicine, who provide care exclusively to hospital inpatients and have no office or outpatient practice.
“Fraudulently inflated billing of government health care programs puts those programs at risk, and impacts the system’s ability to care for the neediest in our communities,” said Jenny A. Durkan, U.S. Attorney for the Western District of Washington. “During this time of tight government budgets, we will do all we can to make sure everyone plays by the rules and does not run up the taxpayers’ tab.”
Allegations that Sound Physicians had improperly billed a variety of federal health care programs were brought to the government’s attention through a lawsuit filed by a former Sound Physicians employee, Craig Thomas, under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens to bring civil actions on behalf of the government and share in any recovery. Thomas will receive $2.7 million of the $14.5 million settlement for exposing Sound Physicians’ inflated claims.
This civil settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.7 billion through False Claims Act cases, with more than $10.7 billion of that amount recovered in cases involving fraud against federal health care programs.
The Sound Physicians settlement was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Western District of Washington; the Department of Health and Human Services Office of Inspector General; the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service; the Office of Personnel Management Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; and the TRICARE Management Activity Office of General Counsel.
The lawsuit is United States of America ex rel. Craig Thomas v. Sound Inpatient Physicians, Inc. and Robert A. Bessler, Civil Action No. C09-5301RBL (W.D. Wash.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Tacoma, Wash., Medical Firm to Pay $14.5 Million <br /> to Settle Overbilling AllegationsRead the Press Release
Sound Inpatient Physicians Inc. will pay $14.5 million to settle allegations that it overbilled Medicare and other federal health care programs, the Justice Department announced today. Sound Physicians is a Tacoma, Wash.-based provider of hospitalists and other physicians to hospitals and other medical facilities. It employs more than 700 hospitalists and post-acute physicians, who provide services at 70 hospitals and a growing network of post-acute facilities in 22 states.
“Physicians who participate in Medicare and other federal health care programs must document and bill for their services accurately and honestly,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The Department of Justice is committed to ensuring that Medicare and other federal funds are expended appropriately.”
Today’s settlement addresses allegations that, between 2004 and 2012, Sound Physicians knowingly submitted to federal health benefits programs inflated claims on behalf of its hospitalist employees for higher and more expensive levels of service than were documented by hospitalists in patient medical records. Hospitalists are physicians, typically trained in internal medicine, who provide care exclusively to hospital inpatients and have no office or outpatient practice.
“Fraudulently inflated billing of government health care programs puts those programs at risk, and impacts the system’s ability to care for the neediest in our communities,” said Jenny A. Durkan, U.S. Attorney for the Western District of Washington. “During this time of tight government budgets, we will do all we can to make sure everyone plays by the rules and does not run up the taxpayers’ tab.”
Allegations that Sound Physicians had improperly billed a variety of federal health care programs were brought to the government’s attention through a lawsuit filed by a former Sound Physicians employee, Craig Thomas, under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens to bring civil actions on behalf of the government and share in any recovery. Thomas will receive $2.7 million of the $14.5 million settlement for exposing Sound Physicians’ inflated claims.
This civil settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.7 billion through False Claims Act cases, with more than $10.7 billion of that amount recovered in cases involving fraud against federal health care programs.
The Sound Physicians settlement was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Western District of Washington; the Department of Health and Human Services Office of Inspector General; the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service; the Office of Personnel Management Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; and the TRICARE Management Activity Office of General Counsel.
The lawsuit is United States of America ex rel. Craig Thomas v. Sound Inpatient Physicians, Inc. and Robert A. Bessler, Civil Action No. C09-5301RBL (W.D. Wash.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.Sheriff, Irvin F. Hingle, Sentenced for Conspiracy to Commit Mail Fraud and BriberyRead the Press Release
IRVIN F. HINGLE, a/k/a “JIFF” HINGLE, age 61, a resident of Belle Chasse, Louisiana, was sentenced today to 46 months imprisonment by U. S. District Judge Sarah R. Vance after he pleaded guilty to one count of conspiracy, announced U. S. Attorney Dana J. Boente. In addition to the term of imprisonment, Judge Vance ordered that HINGLE be placed on two years of supervised release following the term of imprisonment, pay a $10,000 fine and a $100.00 special assessment.
According to court documents, from approximately 1992 through 2011, HINGLE was employed as the elected Sheriff of Plaquemines Parish, Louisiana. As the Sheriff, HINGLE was the chief law enforcement officer for Plaquemines Parish.
In 2007, the Plaquemines Parish Sheriff’s Office entered into a contract with Benetech, LLC (Benetech) to provide services relating to recovery from damages due to previous and future natural disasters. In early- to mid- 2008, on two separate occasions, HINGLE, as the Sheriff, approved Benetech’s invoices and issued checks to Benetech in connection with work purportedly done under the 2007 contract. Within weeks of HINGLE’s approvals, W. Aaron Bennett, the owner of Benetech, paid HINGLE $10,000 in cash, on two separate occasions, intending to influence him in connection with the contract between Benetech and the Plaquemines Parish Sheriff’s Office.
In addition, as the elected Sheriff, HINGLE was required to file annual campaign reports with the Louisiana Board of Ethics in Baton Rouge, Louisiana, and to certify, among other things, information relating to campaign contributions and expenditures. According to court documents, in 2008, HINGLE solicited campaign contributions from contributors and instead of expending those funds for campaign-related activities, HINGLE expended them for personal use, in violation of Louisiana campaign finance laws. HINGLE and others in his campaign finalized the 2008 campaign finance report and mailed it to Baton Rouge, Louisiana in February 2009, falsely listing over $100,000 in expenditures as campaign-related when, in fact, they were for personal use.
The case was investigated by agents from the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation Division.
The case was prosecuted by Assistant U. S. Attorneys Matt Chester and Eileen Gleason.
Shaker Heights Man Indicted for Impersonating A Diplomat, Attempting to Buy House and Car with Fake DocumentsRead the Press Release
A Shaker Heights man was indicted for impersonating a diplomat and attempting to buy a house and car using fictitious financial documents, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Derek J. Bishop, 42, was named in a seven-count indictment filed in U.S. District Court. He is charged with fictitious obligations, impersonating a diplomat and wire fraud.
Bishop used fictitious Fifth Third checks in March 2013 to attempt to purchase a Nissan Armada for $54,098 from Ganley Nissan. He also tried to use fictitious checks to make payments to Verizon, AT&T, and Nationwide Insurance, according to the indictment.
Bishop falsely claimed he was a foreign diplomat of the Vatican/Postmaster General of the Divine Province in an attempt to avoid paying taxes on the vehicle and to demand his release from the Cuyahoga County Jail, according to the indictment.
Finally, Bishop used fraudulent trust documents in March 2013 to attempt to purchase property in Moreland Hills, Ohio, for more than $3.1 million. He attempted to purchase the property by providing Chicago Title Company LLC with false and fraudulent trust documents representing to be for the Bishop Family Trust, even though the trust had no assets or funds to pay the purchase price, according to the indictment.
This case is being prosecuted by Assistant United States Attorney Matthew W. Shepherd following an investigation by the Federal Bureau of Investigation.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Seven Charged with Oxycodone Conspiracy in Broward County Pill Mill OperationRead the Press Release
The defendants include a Doctor, a Physician’s Assistant, and Clinic Owners/Managers
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, and Scott Israel, Sheriff, Broward Sheriff’s Office (BSO), announced the unsealing of a federal indictment charging seven defendants for their participation in the illegal dispensing and distribution of oxycodone, among other offenses. The 20-count indictment, filed July 2, 2013, charges defendants Jason Boyd, 43, of Davie, Jason Rodriguez, 36, of Fort Lauderdale, Vijay Chowdary, M.D., 69 of Boca Raton, Harish Chowdary, P.A., 64, of Fort Lauderdale, Amanda Bozer, 34, of Fort Lauderdale, Nestor Merces, Jr., 35, of New York, and Hector Bruno, 35, of Pembroke Pines with various crimes, including conspiracy to distribute, dispense and possess controlled substances, maintaining drug-involved premises, and money laundering. Six of the defendants made their initial appearances in federal court in Fort Lauderdale and Connecticut earlier today. Defendant Hector Bruno remains a fugitive.
Researchers from the Centers for Disease Control and Prevention report that Schedule II prescription painkillers, like oxycodone, cause more drug overdose deaths than cocaine and heroin combined. Oxycodone and other Schedule II drugs have a high potential for abuse and can be crushed and snorted, or dissolved and injected, to get an immediate high. This abuse can lead to addiction, overdose, and sometimes death.
The indictment alleges that from October 2010 to the present, the defendants operated Intracoastal Medical Groups, Inc. (IMG), in Broward County, as a pill mill clinic that offered patients prescriptions for oxycodone and other controlled substances without any legitimate medical purpose and outside the usual course of professional medical practice. According to the charges, individuals, including drug addicts and traffickers, seeking to buy large quantities of oxycodone and other controlled substances would travel from hundreds of miles from other states to obtain prescriptions at the defendants’ clinic. Defendant Jason Boyd operated and financed IMG until the Florida Legislature enacted legislation requiring pain management clinics to be owned by licensed physicians. At that time, ownership of IMG was transferred on paper to a physician and in March 2012, to Dr. Chowdary.
To execute the scheme, IMG employed doctors, like defendant Vijay Chowdary, who agreed to prescribe oxycodone and other controlled substances to patients without regard to medical necessity, with only a cursory physical examination of the patient, and in violation of numerous federal and state laws and DEA regulations regarding the storage and distribution of controlled substances. To accomplish the scheme, the defendants created and used a number of false documents. For example, the defendants used phony Florida identification cards to make it appear that all of IMG’s patients were residing in Florida. The defendants also made and used false MRI reports, and discarded urinalysis results that showed that patients were using cocaine and other drugs, advising the patients to return when their urine was clean. The clinic allowed and encouraged the use of “sponsors,” a practice in pill mills where an individual “sponsors” a group of patients in the clinic and pays all of the expenses associated with clinic visit in return for all or a portion of the pills prescribed.
U.S. Attorney Wifredo A. Ferrer stated, “As this case demonstrates, federal and local law enforcement continue to stand united to tackle the pill mill epidemic that has plagued Broward County and our state. Together, we are making a positive difference, as we continue to bring down these unscrupulous doctors and drug dealers who seek to hide behind a medical license. Pill mill operators be warned: we are not done yet.”
Mark R. Trouville, DEA Special Agent in Charge stated, “This is a text book example of an illegal prescription drug trafficking organization. These rogue doctors and greedy drug dealers tried to make a pill mill look like a legitimate business. The days of profiting from these crimes have come to an end for these seven defendants. The diversion of pharmaceutical drugs remains a priority for the DEA and our law enforcement partners in South Florida. We will stay committed to ridding our communities of those who look to become rich from the diversion of powerful prescription medications.”
“I’m extremely proud of the hard work and dedication our investigators have put into building a solid case against these suspects,” Sheriff Scott Israel said. “This group is made up of drug traffickers passing themselves off as businessmen and medical patients and unscrupulous clinicians pretending to be medical professionals. They did all of this to further their criminal enterprise without concern for the people whose lives they were putting at risk.”
If convicted, the defendants face up to 20 years in prison for conspiracy to distribute, dispense and possess oxycodone; up to 20 years for distributing, dispensing, and aiding and abetting the distribution and dispensing, of oxycodone outside the usual course of professional practice and not for a legitimate medical purpose; and up to 20 years for maintaining a location for the distribution of narcotics. Lastly, defendant Boyd faces up to 20 years on the money laundering charges.
Today’s case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Ferrer commended the DEA and BSO for their hard work on this case. This case is being prosecuted by Assistant U.S. Attorney Julia Vaglienti.
An indictment is only an accusation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Attachment:
Indictment (PDF)
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.
Sentences for July 01-02, 2013Read the Press Release
Mario Demon Lee, 45, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on July 2, 2013, for making a false statement in application of a passport. Lee was arrested in Cheyenne, Wyoming. He received 21 months imprisonment, to be followed by two years of supervised release and was ordered to pay a $100.00 special assessment. This case was investigated by the Diplomatic Security Service.
Mario Moreno-Reyes, aka Mario Reyes, aka Mario Moreno, aka Mario Manuel Reyes, 53, of Mexico, was sentenced by Chief Federal District Court Nancy D. Freudenthal on July 1, 2013, for illegal re-entry of a previously deported alien into the United States. Moreno-Reyes was arrested in Gillette, Wyoming. He received 15 months imprisonment, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Science Applications International Corporation<br /> Agrees to Pay $5.75 Million to Settle False Claims Act AllegationsRead the Press Release
The Justice Department announced today that Science Applications International Corporation (SAIC) has agreed to pay $5.75 million to settle allegations that it violated the False Claims Act by submitting claims under a contract with the General Services Administration (GSA) that it knew had been awarded in violation of federal procurement regulations. SAIC provides scientific, engineering and technical services to commercial and government customers and is headquartered in Northern Virginia.
In 2006, GSA awarded a blanket purchase agreement (BPA) to SAIC for the provision of professional engineering and consulting services. Those services related to the study and evaluation of new products and emerging technologies. The United States contended that SAIC personnel provided false information to GSA contracting officials to induce them to award the BPA to SAIC. In particular, the United States alleged that SAIC caused another individual to falsely represent himself as an employee of the Senior Executive Staff of the Department of Defense and the Director of another federal agency. SAIC performed a substantial number of the task orders it received under the BPA for the U.S. Central Command at MacDill Air Force Base in Tampa, Florida.
“Federal contracts must be awarded based on full disclosure and fair dealing,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “It is completely unacceptable for taxpayer dollars to be paid under circumstances where the integrity of the contracting process has been undermined.”“This recovery illustrates the emphasis and resources we place on detection and recovery of fraud, waste and abuse in government procurement contracts – particularly those involving defense contractors and others who supply goods and services to the Department of Defense, the branches of our military, and their bases,” said Robert E. O’Neill, U.S. Attorney for the Middle District of Florida.
"SAIC received a contract, awarded by GSA, based on fictitious information," said GSA Inspector General Brian D. Miller. "This deceptive scheme shows that we must be on the lookout for all forms of contract fraud."
The lawsuit against SAIC was originally filed under the whistleblower provisions of the False Claims Act by Timothy Ferner, a retired Lt. Colonel in the U.S. Air Force, in the U.S. District court for the Middle District of Florida. The False Claims Act prohibits the submission of false claims for government money or property and allows the United States to recover treble damages and penalties for a violation. Under the Act’s whistleblower provisions, a private party may file suit on behalf of the United States and share in any recovery. The United States may elect to intervene and take over the case, as it did here. Mr. Ferner’s share of the settlement has been determined to be $977,500.
The claims resolved by this settlement are allegations only and there has been no determination of liability. The case is United States ex rel. Ferner v. SAIC, No. 8:10-cv-741-T-33-AEP (M.D. Fla.)Philadelphia Man Charged with Illegal Reentry After DeportationRead the Press Release
Joel Ernesto Esquerra-Cervantes, a/k/a “Luis Gonzalez-Solivan,” a/k/a “Raul Salazar-Trujillo,” a/k/a “Armando Espinoza Padilla,” 34, of Philadelphia, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney David Memeger. The indictment alleges that on or about April 28, 2012, Esquera-Cervantes, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about September 13, 1998, March 3, 1999, February 20, 2000, February 28, 2000, May 13, 2003, September 12, 2003, October 27, 2003, January 13, 2009, January 15, 2009 and January 24, 2009.
If convicted the defendant faces a maximum possible sentence of two years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”) and is being prosecuted by Assistant United States Attorney Bea Witzleben.
Click here to view the indictment
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY’S OFFICE Contact: PATTY HARTMAN
EASTERN DISTRICT, PENNSYLVANIA Media Contact
Suite 1250, 615 Chestnut Street 215-861-8525
Philadelphia, PA 19106COPIES OF NEWS MEMOS AND RELATED DOCUMENTS CAN ALSO BE FOUND AT
HTTP://www.justice.gov/usao/paeUNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Oakland Man Sentenced to over Thirteen Years in Prison for Carjacking and RobberyRead the Press Release
OAKLAND - Patrick Fiammetta-McConnell was sentenced today to 157 months in federal prison for carjacking, robbery, possession of methamphetamine for sale, and being a felon in possession of a firearm, announced United States Attorney Melinda Haag.
McConnell, 31, of Oakland, California, pleaded guilty on November 19, 2012, to carjacking, in violation of Title 18 U.S.C. § 2119; interference with commerce by robbery, in violation of Title 18 U.S.C. § 1951(a); possession with intent to distribute 5 grams or more of methamphetamine, in violation of Title 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(viii); one count of being a felon in possession of a firearm, in violation of Title 18 U.S.C. § 922(g)(1); and one count of being a felon in possession of ammunition, in violation of Title 18 U.S.C. § 922(g)(1).
According to court documents, McConnell admitted that on July 27, 2011, he and codefendant Ismael Eduardo Axtle each used a firearm in the course of a carjacking and robbery of a San Francisco parking garage employee. Days after this incident, on August 1, 2011, McConnell was caught with a stolen vehicle and 40 rounds of .40 caliber ammunition. McConnell initially fled on foot from law enforcement officers, but was ultimately apprehended carrying several baggies of methamphetamine which he admitted he was planning to sell. Officers later found a .40 caliber handgun in the trunk of yet another stolen vehicle in McConnell’s possession.
United States District Court Judge Saundra Brown Armstrong imposed McConnell's 157-month sentence and ordered him to begin serving his time immediately. Judge Armstrong also sentenced McConnell to 4 years of supervised release to follow his term of imprisonment. Axtle pleaded guilty on May 14, 2013, to robbing the parking garage as well as other unrelated crimes, and is scheduled to be sentenced by Judge Armstrong on July 30, 2013.
Brigid Martin of is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathleen Turner. The conviction and sentence were the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Alameda County Regional Auto Theft Task Force, California Highway Patrol, Oakland Police Department, and San Francisco Police Department.
Northern Arapaho Woman Sentenced for Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Christopher A. Crofts announced today that on July 1, 2013, Phoebe Dawn Soundingsides, a 28-year-old enrolled Northern Arapaho woman from Arapahoe, Wyoming, appeared in Federal District Court for sentencing before Chief United States District Judge Nancy D. Freudenthal on a single count of assault resulting in serious bodily injury. Soundingsides received 42 months imprisonment, to be followed by two years of supervised release and was ordered to pay restitution in the amount $33,750.76 and a $100.00 special assessment. The charge stemmed from a stabbing which occurred on January 18-19, 2012, on the Wind River Indian Reservation. The case was investigated by the Federal Bureau of Investigation with assistance from the Bureau of Indian Affairs, and local law enforcement authorities.
North Carolina-Based Trans1 to Pay U.S. $6 Million <br /> to Settle False Claims Act AllegationsRead the Press Release
Medical device manufacturer TranS1 Inc., now known as Baxano Surgical Inc., has agreed to pay the United States $6 million to resolve allegations under the False Claims Act that the company caused health care providers to submit false claims to Medicare and other federal health care programs for minimally-invasive spine surgeries, the Justice Department announced today.
“The Justice Department is committed to ensuring that medical device manufacturers follow the law when providing devices to beneficiaries of federal health care programs,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “It is critical that health care providers bill federal health care programs accurately and honestly for the work they perform, and it is imperative that they base their selection of medical devices on the best interests of their patients.”
The United States alleged that TranS1 knowingly caused health care providers to submit claims with incorrect diagnosis or procedure codes for minimally-invasive spine fusion surgeries using Trans1’s AxiaLIF System. That device was developed as alternative to invasive spine fusion surgeries. The United States alleges that TranS1 improperly counseled physicians and hospitals to bill for the AxiaLIF System by using incorrect and inaccurate codes intended for more invasive spine fusion surgeries. The United States alleged that, as a result, health care providers received greater reimbursement than they were entitled to for performing the minimally-invasive AxiaLIF procedures.
The United States further alleged that TranS1 knowingly paid illegal remuneration to certain physicians for participating in speaker programs and consultant meetings intended to induce them to use TranS1 products, in violation of the Federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and thereby caused false claims to be submitted to federal health care programs. The Anti-Kickback Statute prohibits offering or paying remuneration to induce referrals of items or services covered by federally-funded programs and is intended to ensure that a physician’s medical judgments are not compromised by improper financial incentives and are based solely on the best interests of the patient.
In addition, the United States alleged that TranS1 promoted the sale and use of its AxiaLIF System for uses that were not approved or cleared by the U.S. Food and Drug Administration, including use in certain procedures to treat complex spine deformity, and which were thus not covered by federal health care programs.
“A medical device manufacturer violates the law when it advises physicians and hospitals to report the wrong codes to federal health insurance programs in order to increase reimbursement rates,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland. “Health care providers are required to bill federal health care programs truthfully for the work they perform.”
As part of the settlement, TranS1 has agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.
“Using kickbacks to encourage health providers to make false payment claims will not be tolerated,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “TranS1’s agreement to now comply with government health laws is an important step.”
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the District of Maryland and is captioned United States ex rel. Kevin Ryan v. TranS1, Inc. As part of today’s resolution, Mr. Ryan will receive $1,020,000 from the settlement.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.7 billion.
The settlement with TranS1 was the result of a coordinated effort among the U.S. Attorney’s Office for the District of Maryland; the Commercial Litigation Branch of the Justice Department’s Civil Division; the Department of Health and Human Services’ Office of Inspector General; the Department of Defense, Office of the Inspector General; and the Office of Personnel Management, Office of Inspector General.The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Nine Students from Nepal Who Attended Kansas State University Charged with Visa FraudRead the Press Release
TOPEKA, KAN. – Nine students from Nepal who attended Kansas State University have been indicted on charges of visa fraud and conspiracy, U.S. Attorney Barry Grissom said today.
A grand jury indictment unsealed today alleges the students conspired to maintain their non-immigrant visas by making false statements that they possessed funds to pursue their proposed course of study and support themselves and their dependents. The defendants, each of whom is charged with one count of conspiracy to commit visa fraud and 25 counts of visa fraud, are:
Mahendra Thapa, 33 years old.
Khem Acharya, 41 years old.
Raj Kumar Dani, 37 years old.
Santosh Ghimire, 37 years old.
Lila Ballav Pandey, 41 years old.
Laxman Pokhrel, 37 years old.
Keshar Prasain, 38 years old.
Govind Paneru, 32 years old.
Narayan Chapagain, 43 years old.The indictment alleges that beginning in the fall of 2008 all nine students obtained temporary possession of financial resources for the purpose of obtaining statements from financial institutions to support their false claims that each personally had the needed funds. Each of the students temporarily obtained funds from fellow Nepalese students and deposited the funds in their bank accounts. After obtaining a notarized bank letter, they returned the funds to the other students.
If convicted, each of the defendants faces a maximum penalty of 10 years in federal prison and a fine up to $250,000 on each count. U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated the case. Assistant U.S. Attorney Richard Hathaway is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Navajo Man Pleads Guilty to Federal Assault and Child Abuse ChargesRead the Press Release
Prosecution Brought as Part of a Federal Initiative to
Address the Epidemic Incidence of Violence against Native WomenALBUQUERQUE – Everett D. Williams, 24, an enrolled member of the Navajo Nation who resides in Nambe Pueblo, N.M., pleaded guilty this morning to federal assault and child abuse charges. Williams’ guilty plea was announced by U.S. Attorney Kenneth J. Gonzales and DuWayne W. Honahni, Sr., Special Agent in Charge of District IV of BIA’s Office of Justice Services.
Williams was arrested in March 2013, based on a criminal complaint charging him with assaulting his intimate partner with a hammer and causing her to sustain serious bodily injury. In April 2013, Williams was indicted and charged with one count of assault resulting in serious bodily injury, one count assault with a deadly weapon, and two counts of child abuse. According to court filings, Williams assaulted the victim, a Kewa Pueblo woman, and endangered the health of two toddlers on Feb. 23, 2013, in a residence located on Nambe Pueblo.During today’s plea hearing, Williams entered a guilty plea to all four counts of the indictment and admitted to striking the victim in the head with a hammer and causing her serious bodily injury. The criminal complaint reflects that the victim required surgery to treat a gaping wound on her forehead. Williams also admitted that, while swinging the hammer at the victim, he missed the victim and instead struck a three-year-old child in the back. He further admitted that, while attempting to hit the victim with his fist, he struck a two-year-old child above the eye.
Williams has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Williams faces a maximum possible penalty of ten years in prison for each of the two assault charges and three years in prison for each of the child abuse charges.
This case was investigated by the Northern Pueblos Agency of the BIA’s Office of Justice Services and is being prosecuted by Special Assistant U.S. Attorney David M. Adams. The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project which is sponsored by the Justice Department’s Office on Violence Against Women, and seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Moises Chicaj-imul Pleads Guilty to Fraud and Misuse of A Permanent Resident Card and Illegal Use of A Social Security NumberRead the Press Release
MOISES CHICAJ-IMUL, age 26, a citizen of Guatemala, pled guilty in federal court today before U. S. District Judge Helen G. Berrigan to a two-count indictment charging him with fraud and misuse of a Permanent Resident Card and illegal use of a Social Security number, announced U. S. Attorney Dana Boente.
According to court documents, August 12, 2008, CHICAJ, knowingly possessed, used, and attempted to use a Permanent Resident Card, prescribed by law as evidence of authorized stay and employment in the United States, which CHICAJ knew was counterfeited. CHICAJ also admitted to falsely representing that a Social Security number had been assigned to him by the Commissioner of Social Security with intent to deceive for the purpose of completing an Employment Eligibility Verification Form.
CHICAJ faces a maximum term of imprisonment of fifteen (15) years, a fine of $500,000.00 and three (3) years of supervised release following any term of imprisonment.
This case was investigated by United States Immigration and Customs Enforcement, Homeland Security Investigations (ICE). The prosecution is being handled by Special Assistant United States Attorney Robert Weir.
(Download Factual Basis )
Members of International Arms Smuggling Network Sentenced to Prison for Trafficking Weapons and Ammunition to GreeceRead the Press Release
CAMDEN, N.J. – Four members of an international arms trafficking organization were sentenced to prison today in New Jersey for conspiring to smuggle substantial quantities of firearms and ammunition from the United States to Greece, U.S. Attorney Paul J. Fishman announced.
Dennis Meleshes, 46, and Vladimir Polivka, 58, of Las Vegas and Nick Somos, 71, of Queens, N.Y., each previously pleaded guilty before U.S. District Judge Joseph E. Irenas to informations charging them with conspiracy to smuggle weapons. Vasileios Angelakis, 36, also of Queens, previously pleaded guilty to misprision of a felony.
Judge Irenas sentenced Meleshes to serve six months in prison and six months of home confinement; and Polivka, Somos and Angelakis to 24, 18 and 15 months in prison, respectively.
According to documents filed in this case and statements made in Camden federal court:
Beginning in December 2011, Meleshes, Polivka and Somos orchestrated a plan to acquire a large quantity of weapons and ammunition in the United States that they intended to ship to Greece for sale on the black market. Meleshes and Polivka purchased a number of weapons – some of the money for which was provided by Angelakis – at various locations in Nevada and surrounding areas.
Meleshes and Polivka ultimately created a weapons cache that included 65 revolvers and semi-automatic pistols, an UZI machine gun, one AK-47 assault rifle and approximately 10,540 assorted rounds of ammunition. Meleshes and Polivka packed the weapons in two vehicles – an Audi A6 and a Chevrolet Caprice – one of which contained an improvised lock system, or “trap,” which was intended to prevent law enforcement from finding the cache. Polivka and another individual then drove the vehicles to a freight forwarding service in Brooklyn, N.Y., where Somos had arranged for the cars to be loaded onto cargo containers and placed on a commercial shipping line bound for Greece via Port Naples, Italy. Meleshes and Angelakis traveled to Italy in order to personally receive the shipment.
Customs officials issued a recall on the shipment and the cargo container was returned to the Port of New York/Newark in New Jersey. The weapons cache was seized on April 3, 2012. Law enforcement confirmed it contained items listed as U.S. Munitions List defense articles, which require a license to be exported out of the United States. No such license accompanied any of the firearms recovered and a search of law enforcement databases revealed that no licenses had been obtained by any of the defendants for the items.
In fact, the export documents filed in connection with the shipment did not list any of the weapons or ammunition.In all, the seized weapons and ammunition were worth more than $250,000 on the secondary market in Greece.
In addition to the prison terms, Judge Irenas sentenced Meleshes, Polivka and Somos to serve three years of supervised release and Angelakis to serve a year of supervised release.
U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon; U.S. Customs and Border Protection, led by Robert E. Perez, director of New York Field Operations; as well as detectives from the Las Vegas Metropolitan Police Department, with the investigation.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit in Newark.13-277
Defense counsel: Dennis Meleshes: Ryan Clark Esq., Freehold, N.J.
Vladimir Polivka: Susan C. Cassell Esq., Ridgewood, N.J.
Nick Somos: Louis Rosenthal Esq., Brooklyn
Vasileios Angelakis: Joseph Rubino Esq., West Orange, N.J.Man Pleads Guilty in Role in 2001 Arson That Killed His 15-year-old SonRead the Press Release
St. Louis, MO - STEVEN HENRY KEMPER of St. Louis County, pled guilty this morning in connection with the November 16, 2001, arson of his family’s home in Florissant, Missouri. Kemper’s 15-year old son, Zachariah Andrew Kemper, was trapped in the basement and killed during the fire. Kemper pled guilty to one-count of aiding and abetting the use of fire to commit mail fraud. He appeared before United States District Court Judge Audrey G. Fleissig to enter his guilty plea.
The 2001 fire was originally the subject of state charges in which only Kemper’s wife, Sandra Bryant, was charged with felony murder by arson. During the ensuing trial, the judge declared a mistrial after ruling that certain evidence had mistakenly been shown to the jury. The Missouri Supreme Court ultimately held that because the mistrial was declared over the defense objection, state prosecutors were barred from retrying the defendant in state court because of the United States Constitution’s “double jeopardy” provision.
The federal indictment charges both Steven Kemper and his wife Sandra Kay Bryant for their involvement in the 2001 arson. Both defendants were charged with aiding and abetting the use of fire to commit mail fraud in count II of the indictment. Sandra Bryant faces a separate charge in count I of the indictment.
Although no trial date has been set, charges remain pending against Sandra Bryant. As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Sentencing has been set for October 3, 2013, at 10:30 a.m. Kemper faces a mandatory minimum of 10 years up to life imprisonment for his crime. In determining actual sentences, a judge is required to consider the United States Sentencing Guidelines, which provide recommended sentencing ranges.
This case was originally investigated by Saint Louis County Police Department. The United States Bureau of Alcohol, Tobacco, Firearms, and Explosives took up the investigation after the Missouri Supreme Court decision barring the retrial by state prosecutors. The St. Louis County Prosecutor’s Office also provided significant assistance.Los Gatos Man Convicted of Endangering the Safety of an AircraftRead the Press Release
SAN FRANCISCO – Hasan Ibrahim was convicted by a federal jury today of attempting to place destructive substances on an airplane, United States Attorney Melinda Haag announced.
The jury found that the defendant willfully intended to place nine different hazardous materials on a Lufthansa passenger airplane bound for Frankfurt, Germany. The hazardous materials were ultimately destined for Jeddah, Saudi Arabia. In related charges, the jury convicted Ibrahim of failing to properly label the packages containing the hazardous materials and failing to complete the requisite shipping papers as required by the Department of Transportation. The guilty verdict followed a six-day jury trial before the Honorable Edward M. Chen, U.S. District Court Judge.
Evidence at trial established that Ibrahim, 62, of Los Gatos, California, doing business as MechChem Corporation, ordered and shipped hazardous materials for over ten years. Many of the chemicals the defendant handled were flammable, corrosive, and highly toxic. As a result of their dangerous properties, many of the chemicals were forbidden by transport on a passenger airplane, and two chemicals in particular were forbidden by transport on any aircraft.
In all, the jury convicted Ibrahim of nine counts of attempting to place destructive substances on an aircraft, in violation of 18 U.S.C. § 32(a)(2); ten counts of shipping hazardous materials without the proper shipping papers and without the proper labels, in violation of 49 U.S.C. § 5124(c) and (d); one count of failing to file required export information, in violation of 13 U.S.C. § 305(a)(1); and two counts of attempting to smuggle goods, in violation of 18 U.S.C. § 554(a).
Ibrahim remains out of custody pending the sentencing hearing.
Ibrahim’s sentencing hearing is scheduled for October 9, 2013, before Judge Edward M. Chen in San Francisco. The maximum statutory penalty for each count of attempting to place a destructive substance on an airplane in violation of 18 U.S.C. § 32(a)(2) is 20 years in prison and a fine of $250,000. However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Peter Axelrod and Brian Stretch are the Assistant U.S. Attorneys who are prosecuting the case with the aid of legal assistant Bridget Kilkenny. The prosecution is the result of an investigation by the Federal Bureau of Investigation, the United States Department of Transportation, Office of Inspector General, the Federal Aviation Administration, the United States Customs and Border Protection, and the United States Department of Commerce, Bureau of Industry and Security.
Last Two Bricktown Gang Members Plead GuiltyRead the Press Release
As Part of these Pleas: Saquan Evans Admits to Killing 20 Month Old Child, Shooting Four People, Gun Possessions and Possessing Substantial Gang Paraphernalia
Ernest Hester Admits to a Shooting, Gun Possessions and a Gang Assault at a Denny’s Restaurant in SyracuseSYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announces that SAQUAN EVANS, age 23, and ERNEST HESTER, age 24, both residents of Syracuse, pled guilty today in U.S. District Court in Syracuse to an indictment which charged them and 12 others with conspiring to exploit their membership in the Bricktown Gang to engage in a pattern of racketeering activity which included multiple acts of murder, drug trafficking, and robbery. All fourteen defendants have now guilty in this matter.
As part of their pleas, EVANS and HESTER admitted that the Bricktown Gang has operated within the City of Syracuse from at least 2000 through the present and that members of the Bricktown Gang: (1) maintain a specific geographic territory within the City of Syracuse in which only gang members can sell crack cocaine, cocaine and marijuana; (2) protect that exclusive crack distribution territory with violence if necessary; (3) obtain drugs from suppliers in New York City and elsewhere; (4) project a very violent attitude and respond to violence with violence in order to preserve their stature in the gang community; (5) on occasion use hand signs, wear blue colored bandanas and have tattoos, all of which are intended to signify their gang membership; (6) use criteria such as willingness to use violence, ability to sell drugs, and familial connections to determine membership; and (7) routinely carry and use firearms in connection with their gang activity.
EVANS also admitted as part of his plea that he: (1) possessed a handgun in the 200 Block of Oakwood Avenue on March 4, 2006; (2) was involved in a shooting in the vicinity of 1300 South State Street on November 7, 2006; (3) jointly possessed a 9 mm handgun along with several co-defendants, including ERNEST HESTER, in the 200 block of Baker Avenue on November 15, 2006; (4) shot four rival gang members as they sat at a table playing cards at 321 Shirley Drive on November 7, 2012; (5) shot and killed 20 month old Rashad Walker, Jr., while intending to kill a rival gang member, on November 28, 2010; and (6) possessed substantial gang paraphernalia including a detailed gang roster, writings, drawings, photos, rap lyrics and clothing.
HESTER also admitted as part of his plea that he: (1) along with a co-defendant, shot at three people in the 500 block of West Colvin Street on April 2, 2005; (2) possessed ten bags of crack cocaine after being shot in the 100 block of Beard Avenue on October 19, 2006; (3) jointly possessed a 9 mm handgun, as noted above, that occurred on November 15, 2006; (4) jointly possessed a .45 caliber handgun and a 9 mm handgun, along with multiple co-defendants, while together in a vehicle at 1400 Erie Blvd. West on December 13, 2008; and (5) actively participated in the stabbing of four persons inside a Denny’s restaurant on Erie Blvd East on January 30, 2011.
Both EVANS and HESTER are scheduled to be sentenced in December, 2013. Each faces up to life imprisonment, a $250,000 fine, and up to five years of supervised release following any period of incarceration.
This prosecution resulted from a long-term investigation conducted by the Syracuse Gang Violence Task Force, which is comprised of agents and detectives from the following agencies: United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office), the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Troopers, and the United States Marshals Service. The Onondaga County District Attorney’s Office also assisted in the investigation.
Further questions or inquiries may be directed to Assistant U.S. Attorney, John M. Katko, who is handling the case, at (315) 448-0672.
Large-Scale, Miami-Based Marijuana Trafficker Convicted in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DANIEL FERNANDEZ, 35, was found guilty yesterday in Manhattan federal court of marijuana trafficking. FERNANDEZ was convicted following a two-and-a-half-week jury trial before U.S. District Judge Laura Taylor Swain.
Manhattan U.S. Attorney Preet Bharara said: “As a member of a sophisticated network of drug traffickers, Daniel Fernandez profited handsomely from many years of distributing truckloads of marijuana to the New York City area. He now stands convicted, along with more than 50 other defendants whose massive drug dealing network was stopped as a result of a successful, multi-agency law enforcement effort.”
According to the charging documents in this case and evidence presented at trial:
On August 21, 2012, this Office announced the unsealing of a 40-count Racketeering Influenced Corrupt Organizations Indictment (the “RICO Indictment”) charging nine individuals with participating in a massive racketeering organization led by Manuel Geovanny Rodriguez-Perez (the “Rodriguez Enterprise”) whose members allegedly sold massive quantities of marijuana; engaged in murders and other violent acts; transported and laundered millions of dollars; obstructed justice and committed perjury; and engaged in firearms offenses.
FERNANDEZ, a Miami-based marijuana broker, was one of Rodriguez-Perez’s principal suppliers of marijuana. From at least 2007 through October 2010, he directly supplied Rodriguez-Perez with over a ton of marijuana, which was funneled into Washington Heights, New York for distribution throughout the New York City area.
FERNANDEZ was convicted of one count of conspiracy to distribute 1,000 kilograms and more of marijuana, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life. The charges against him arose out of a multi-year investigation titled “Operation Green Venom,” a coordinated multi-agency investigation that was led by Immigration and Customs Enforcement’s Homeland Security Investigations (“ICE HSI”) and first announced in October 2010. With his conviction, a total of more than 50 defendants have been convicted in United States v. Manuel Geovanny Rodriguez-Perez, et al., 10 Cr. 905 (LTS), and related cases. Those defendants include former Rock-a-fella music founder Kareem Burke, a/k/a “Biggs,” who received a sentence of 60 months in prison, and High Times Magazine editor Matthew Woodstock Stang, a/k/a “Magazine Guy,” who has not yet been sentenced. Trial of the defendants charged in the RICO Indictment is scheduled for March 2014. The charges against these remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Mr. Bharara praised the outstanding investigative work of ICE HSI and the New York City Police Department. He also thanked U.S. Customs and Border Protection; the U.S. Drug Enforcement Administration; the U.S. Marshals Service; the Bergen County, New Jersey Prosecutor’s Office; the Englewood, New Jersey, Police Department; the U.S. Department of Housing and Urban Development; and the City of New York Department of Investigation for their assistance. Mr. Bharara added that the investigation is continuing.
The prosecution of the cases arising from “Operation Green Venom” is being overseen by the Office’s Violent Crimes Unit. Assistant U.S. Attorneys Amie N. Ely, Sarah E. McCallum, Jessica Ortiz, and Sarah Paul are in charge of the prosecution. Assistant U.S. Attorney Michael D. Lockard is responsible for the forfeiture proceedings.
Justice Department Settles Immigration-related Discrimination Claim Against Alabama Employment AgencyRead the Press Release
The Justice Department today reached an agreement with Stellar Staffing LLC, based in Birmingham, Ala., resolving claims that the employment agency violated the anti-discrimination provision of the Immigration and Nationality Act (INA).
The department’s independent investigation was initiated based on evidence uncovered during the investigation of a related retaliation charge filed against Stellar Staffing. The department’s investigation concluded that since at least July 2008, the company required specific documents issued by the Department of Homeland Security from non-U.S. citizens during the employment eligibility verification process, but accepted a variety of identity and work authorization documentation from U.S. citizens.
Under the terms of the settlement agreement, Stellar Staffing will pay $2,250 in civil penalties to the United States, undergo Justice Department training on the anti-discrimination provision of the INA and be subject to monitoring of its employment eligibility verification practices for a period of one year.
“The anti-discrimination provision protects work-authorized individuals from being treated differently in the hiring process based on discriminatory assumptions about their status,” said Gregory Friel, Deputy Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is fully committed to vigorously enforcing the law.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TTY for hearing impaired), sign up for a no-cost webinar at www.justice.gov/about/osc/webinars.php , email [email protected] or visit the website at www.justice.gov/crt/about/osc
Jury Convicts Former MoneyGram Agent of Telemarketing Fraud SchemeRead the Press Release
The United Attorney’s Office for the Middle District of Pennsylvania announced that following a 6-day trial before U.S. District Court Judge Christopher C. Conner, a federal jury in Harrisburg convicted Itohan Agho-Allen, of Brooklyn, New York, late Tuesday, on charges of laundering money paid by victims of international telemarketing fraud schemes.
Agho-Allen was convicted of criminal conspiracy, 8 counts of wire fraud and 14 counts of money laundering. Following the verdict, Agho-Allen was taken into custody. A sentencing date has not yet been scheduled.
According to United States Attorney Peter J. Smith, Agho-Allen, age 39, was an agent of Miracle Multi-Link, a MoneyGram and Western Union outlet in Brooklyn, New York and had been recruited to process money transfers received from fraud schemes including sweepstakes, loans, employment opportunities, persons-in-need and internet purchases.
Between 2002 and November 2010, money transfers originating in locations in Pennsylvania, including York, Bloomsburg, Berwick, Hazleton, Lebanon, Chambersburg, East Stroudsburg and Montoursville, were transmitted through facilities to fraud participants in Brooklyn, Spain, Romania, Canada and Nigeria. Money in excess of $7 million was obtained from hundreds of victims throughout the United States through telemarketing schemes that falsely promised financial awards and other valuable items.
At trial the Government presented evidence that Agho-Allen entered fictitious identifying information into the Moneygram or Western Union computer systems disguising the true nature of the transaction and the identities of individuals perpetrating the frauds. For doing so, Agho-Allen was paid 10-15% of each transaction.
Assistant U.S. Attorney Christy Fawcett, the Government trial attorney, noted that, “The money launderer is crucial to the success of the international fraud scheme because she conceals from victims and law enforcement who is behind the fraud and where the money is going.”
Agho-Allen was indicted in March 2011 and charged with conspiracy to commit mail fraud, wire fraud and money laundering and counts of wire fraud and money laundering.
To-date, approximately 33 former MoneyGram and Western Union agents have been prosecuted by the United States Attorney’s Office in Harrisburg. Several of them testified as Government witnesses at Agho-Allen’s trial. In addition, in November 2012, the U.S. Department of Justice reached a settlement with MoneyGram which resulted in the forfeiture of $100 million to be used to compensate thousands of victims.
This case is part of an on-going, long-term investigation by the U.S. Postal Inspection Service in coordination with the United States Attorney’s Office for the Middle District of Pennsylvania and with cooperation from Canadian law enforcement agencies.
Prosecution was handled by Assistant United States Attorney Christy H. Fawcett.
Persons who believe they were victims of the fraud scheme should visit http://www.justice.gov/criminal/vns/caseup/ or call 1-877-282-2610 (United States Only) or 317-324-0390 (International) for instructions on how to request compensation.
Persons with information and/or complaints concerning suspected marketing fraud schemes should contact their nearest United States Post Office or 1-877-USMAIL-5.
Joseph Daniel Capehart Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on July 3, 2013, before U.S. District Judge Sam E. Haddon, JOSEPH DANIEL CAPEHART, a 28-year-old resident of Miles City, pled guilty to distribution of methadone. Sentencing has been set for October 7, 2013. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
On October 5, 2011, Miles City Police, Custer County Sheriff's deputies and agents with Montana Division of Criminal Investigations responded to a report of a deceased female at a residence in Miles City. The deceased individual was identified as C.H., a 28-year-old white female.
Law enforcement learned that C.H. had been found unresponsive at 9:00 a.m. on October 5, 2011, in her bedroom at her home. C.H. was pronounced dead and found to have died from a self-administered, intravenous injection of methadone. Next to C.H., in her bedroom, officers found a spoon with white residue and nearby on a night stand were three other spoons containing white residue as well as a hypodermic needle and syringe. Law enforcement collected numerous items of drug paraphernalia including: a bottle of oxycodone in C.H.'s name; hypodermic syringes; a baggie containing an unknown white powder; a Samsung cell phone; unknown red pills, and more syringes.
Searches were conducted on the phones taken from the home. A phone number in one of the phones was under the contact name "Joe." The number was looked up by law enforcement and came back to CAPEHART. CAPEHART sent C.H. several text messages on October 4 and 5, 2011.
CAPEHART contacted law enforcement following C.H.'s death to report that he had information about her death. During several tape recorded interviews with law enforcement in the days following C.H.'s death, CAPEHART reported "middling" a deal between C.H. and another individual for a small amount of methadone tablets. CAPEHART initially reported the transaction occurred in the week before C.H.'s death.
CAPEHART now admits that he knew C.H. and that at one point approximately one month before her death, C.H. asked him to trade a quantity of methadone pills for oxycontin pills - C.H.'s drug of choice. Approximately one week before her death, CAPEHART reports that C.H. contacted him and asked for the methadone pills back. CAPEHART reports giving C.H. the 10 to 15 methadone, 10 milligram tablets back in the week before her death.
During the search of C.H.'s house, law enforcement found approximately 30 methadone pills in a bottle, not including the methadone pills C.H. self-injected prior to her death. The evidence is unclear if C.H. obtained additional methadone pills from a source other than CAPEHART in the days prior to her death.
CAPEHART faces possible penalties of 20 years in prison, a $1,000,000 fine, and 3 years supervised release.
The investigation was a cooperative effort between the Miles City Police Department, the Custer County Sheriff's Office, and the Montana Division of Criminal Investigation.
James Douglas Cassity Pleads Guilty to Fraud and Money Laundering ChargesRead the Press Release
St. Louis, MO -JAMES DOUGLAS CASSITY pled guilty today before United States District Judge Jean C. Hamilton to participating in a fraudulent scheme involving the sale of prearranged funeral contracts and misappropriation of insurance premiums. Cassity faces up to 115 months in prison for his role.
In court, Cassity admitted that beginning as early as 1992 and continuing until 2008, National Prearranged Services, Inc. (“NPS”) sold prearranged funeral contracts in several states, including Missouri, Illinois and Ohio. During that time, insurance companies affiliated with NPS, including Lincoln Memorial Life Insurance Company, issued life insurance policies related to those prearranged funeral contracts. As part of the contracts, the total price for funeral services and merchandise for an individual was agreed upon, and that price would remain constant regardless of when the funeral services and merchandise would be needed. Customers entering into prearranged funeral contracts would usually pay a single sum of money up-front to NPS either directly or through a funeral home that was also a party to the contract. NPS represented to individual customers, funeral homes and state regulators that funds paid by customers under the prearranged funeral contracts would be kept in a secure trust or insurance policy as required under state law. Cassity admitted, however, that NPS made use of funds paid by customers in ways that were inconsistent, both with its prior and continuing representations and with the applicable state laws and regulations. Cassity admitted that he benefited from the misuse of customer funds.Cassity pled guilty to two counts of wire fraud (counts 17 and 21), one count of bank fraud (count 7), one count of mail fraud (count 24), one count of money laundering (count 26) and one count of misappropriation of an insurance premium (count 48).
Cassity will be sentenced on November 7, 2013. Earlier this month, Cassity’s co-defendant Sharon Nekol Province pled guilty to six counts of mail fraud, wire fraud and misappropriation of insurance premiums arising out of the same scheme. Also today, Defendant’s co-defendant Brent Douglas Cassity pled guilty to participating in the same scheme. Cassity’s co-defendants Randall K. Sutton, Howard A. Wittner and David R. Wulf are scheduled to appear for trial starting on August 5, 2013. As is always the case, charges do not constitute proof of guilt and every defendant is presumed to be innocent unless and until proven guilty.
Cassity’s case was investigated by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Postal Inspection Service. Assistant United States Attorneys Steven Muchnick, Charles Birmingham and Richard Finneran are handling the case for the U.S. Attorney’s Office.Jacksonville Man Charged in Conspiracy to Send Money SyriaRead the Press Release
Jacksonville, Florida - United States Attorney Robert E. O'Neill announces the indictment of Emell Meda Meda (44, Jacksonville) charging him with one count of conspiracy to structure financial transactions, and one count of structuring financial transactions. If convicted on both counts, Meda Meda faces a maximum penalty of 10 years in federal prison. The indictment also notifies Meda Meda that the United States intends to forfeit $18,500, which is alleged to be traceable to the offense. Meda Meda was arrested on July 2, 2013.
According to the indictment, on or about June 10, 2009, Meda Meda instructed and paid two other individuals to each send $6,120 to a specific individual in Syria. The individuals were instructed to use their own names, as opposed to using Emell Meda Meda's name, when completing the required paperwork for the international electronic funds transfers. Thereafter, on June 12, 2009, Meda Meda instructed a third individual to use his/her own name to send $6,630 to an individual in Syria via an electronic funds transfer. On each occasion, the individuals were instructed to send the funds in this manner in order to conceal the fact that Meda Meda was the source of the money. Syria is a country classified by the U.S. Department of State as a state sponsor of terrorism.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Internal Revenue Service - Criminal Investigation. It will be prosecuted by Assistant United States Attorney Mark B. Devereaux.
Grand Rapids Man Pleads Guilty to Transferring Firearm Used to Kill Seven PeopleRead the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that Michael James Allen, a 35-year-old Grand Rapids resident, pled guilty to transferring a Glock 9mm semiautomatic pistol to Roderic Dantzler, knowing that Dantzler was a convicted felon and prohibited by law from possessing a firearm. Dantzler used that firearm on July 7, 2011, to kill seven people in Grand Rapids, including two children; he then led police on a high-speed chase through highly-populated areas of Grand Rapids; and he used the pistol to take three hostages and to shoot at pursuing officers before using the gun to commit suicide.
Allen, himself a multi-convicted felon, faces up to ten years’ imprisonment. Federal law prohibits the transfer of a firearm to another person if the transferor either knows or has reasonable cause to believe the person has previously been convicted of a felony. Dantzler served three years in prison after being convicted in 2000 of felony assault with intent to do bodily harm. Dantzler had also incurred misdemeanor convictions for assault and battery, domestic violence, and malicious destruction of property. Allen’s criminal history includes a 1997 misdemeanor conviction for possession of marijuana, a 2000 misdemeanor conviction for attempted assault with a dangerous weapon, a 2000 felony conviction for possession with intent to distribute cocaine, a 2001 felony conviction for possession with intent to deliver cocaine, a 2001 felony conviction for being a felon in possession of a firearm, and a 2008 felony conviction for delivery/manufacture of marijuana.
This case is the result of a joint two-year investigation by the Grand Rapids Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The search for the person who provided the firearm to Dantzler began within hours of its recovery from the crime scene.
In a related case, on May 20, 2013, 31-year-old Joseph Michael Krul, a multi-convicted felon, pled guilty before the Honorable Robert Holmes Bell to possessing the same Glock 9mm pistol prior to its transfer to Allen. Krul’s federal felon-in-possession conviction carries a maximum penalty of ten years’ imprisonment. His criminal history includes a 2008 felony conviction for assault with a dangerous weapon. Krul will be sentenced on October 1, 2013.
U.S. Attorney Miles praised the work of the Grand Rapids Police Department and the ATF, noting the dedication, professionalism, and countless hours of work that resulted in this successful prosecution. He also noted the importance of enforcing those laws intended to deter the illegal trafficking of firearms. “This case exemplifies the insidious nature of illegal gun trafficking that all too often leads to a tragic end. The primary purpose of the federal laws barring convicted felons from possessing firearms, and prohibiting the transfer of firearms to convicted felons, is the prevention of violent crime, such as caused the senseless death of seven innocent people on July 7, 2011. Hopefully, those intent on circumventing the federal firearms laws will get the message that we are prepared to protect the public by bringing them to justice.”
“This investigation is an example of ATF’s commitment and determination in making our communities safe. ATF’s Frontline strategy is our business model that addresses such violent gun crime. These accomplishments could not have been achieved without the collaboration and hard work of ATF, Grand Rapids Police Department, and the United States Attorney’s Office”, said ATF Acting SAC Daryl McCrary.
Allen will be sentenced by the Honorable Paul L. Maloney. A sentencing hearing has not yet been scheduled.
END
Former Owner/Operators of Summit Accommodators in Bend Convicted of Conspiracy to Defraud Clients and Conspiracy to Commit Money LaunderingRead the Press Release
PORTLAND, Ore. – A jury in federal court in Portland today convicted three former owner/operators of Summit Accommodators, Inc., of Bend, of conspiracy to commit mail fraud and conspiracy to commit money laundering in connection with a 10-year fraud scheme. The defendants used $75 million of client funds for undisclosed personal investments in real estate, investments in businesses in the Bend area, and loans to business associates and family members. Sentencing in the case is scheduled for October 23, 2013, before U.S. District Judge Anna J. Brown.
“Attorneys, certified public accountants and business executives who, motivated by greed, lie to clients to gain use of their money for personal purposes are especially deserving of prosecution and punishment,” said U.S. Attorney Amanda Marshall. “This office and our federal and state partners will do whatever it takes to bring dishonest professionals to justice.”
After three weeks of trial and two and one-half days of deliberations the jury found CPA Mark A. Neuman and Attorney Lane D. Lyons, both of Bend, and Timothy D. Larkin, of Redmond, guilty of conspiring to defraud the clients of their former business, Summit Accommodators, Inc., by misrepresenting how they would hold and use client funds. Several thousand clients entrusted them with more than $1 billion from 1999 to 2008, when the business closed and filed for bankruptcy. Brian Stevens, another former owner/operator of Summit, previously pleaded guilty to identical charges and testified against his former partners.
Neuman and Stevens created Summit in 1991 to help customers take advantage of lawful federal income tax deferral transactions. In a typical transaction, a customer would sell income producing property, allow Summit to hold the proceeds of the sale, then buy another income producing property within 180 days. Federal income tax laws then allowed the customer to defer paying taxes on the profits from sale of the first property. Summit eventually opened affiliate offices in Texas, Washington, Utah, Montana, Wyoming, Nevada, and Lake Oswego, Oregon.
In 2002, Neuman and Stevens hired Larkin as Summit’s Chief Operating Officer. In 2005, Neuman and Stevens hired Lyons as Summit’s in-house counsel. In 2006, Larkin and Lyons became equal partners in Summit with Neuman and Stevens.
The trial evidence showed that although Neuman and Stevens began using their clients’ exchange funds for personal investments before 1999, they promised their clients their exchange funds would remain in Summit bank accounts and would only be used to complete their tax deferral exchanges. Neuman was responsible for creating Summit marketing brochures and Summit’s website. Both falsely promised Summit would maintain client funds in bank accounts or in government securities.
From 2004 through October 2008, Summit held between $49 million and $109 million of its customers’ money in a typical month. The defendants routinely transferred large amounts of client money to Inland Capital Corp., another company they owned and controlled. Through Inland, the conspirators used client funds for over 100 real estate projects in Central Oregon in which one or more of them had direct personal interests.
The co-conspirators hid the fraud scheme by concealing from most of Summit’s employees and from most of the owner-operators of Summit’s branch offices that the conspirators were using Summit customer money to invest in real estate and for loans to themselves and others. In February 2007, when Summit’s clients and branch owner-operators began to express concern about the safety of Summit client money, the conspirators lied by saying that all Summit client money was deposited and maintained in financial institutions or invested in highly-secured short term notes. For 10 years, the conspirators intentionally concealed from clients that they used large amounts of client money to enrich themselves.
This case was investigated by the Federal Bureau of Investigation; IRS, Criminal Investigation; the United States Postal Inspection Service; and the Oregon Division of Finance and Corporate Securities. Assistant U.S. Attorneys Seth D. Uram and Donna Maddux handled the prosecution of the case.
Former Orleans Parish Deputy, John P. Sens, Sentenced for Conspiracy to Commit BriberyRead the Press Release
JOHN P. SENS, 52, a resident of New Orleans, Louisiana, was sentenced today to 60 months imprisonment by U. S. District Judge Kurt D. Engelhardt for conspiracy to commit bribery, announced U.S. Attorney Dana J. Boente. In addition to the term of imprisonment, Judge Engelhardt ordered that SENS be placed on three years of supervised release following the term of imprisonment, pay a $100.00 special assessment, and forfeit property valued at $67,903.25.
According to court documents, SENS, the former Director of Purchasing at the Orleans Parish Sheriff’s Office (“OPSO”), began illegally receiving things of value from two contractors, identified as Businessman A and Businessman B in court documents, in exchange for a rigged bidding system employed to steer OPSO work to Businessman A and Businessman B. In particular, from 2007 through 2011, Businessman A and Businessman B would submit bids for OPSO work in the names of their respective companies but, with the knowledge and participation of, among others, SENS, would also submit phony or fake bids for these same projects in the names of other local companies, in an effort to give the appearance of a competitive bidding process. In many cases, the phony bids would intentionally be higher than the bids from Businessman A or Businessman B and, consequently, SENS would award the work to Businessman A or Businessman B.
In exchange for this rigged bidding process, according to court documents, SENS received various things of value from Businessman A and Businessman B. For example, from 2007 through 2011, SENS received approximately $30,000 in cash from Businessman A, as well as the digging and installation of a pool at a residence owned by SENS, at no cost to him. Similarly, during this same period of time, Businessman B paid for the purchase, framing, and matting of several paintings (so-called “Blue Dog” prints) for SENS.
The case was investigated by special agents of the Federal Bureau of Investigation.
The case was prosecuted by Assistant U.S. Attorneys Matt Chester and Jon Maestri.
Former Jpd Detective Pleads Guilty to BriberyRead the Press Release
Jackson, Miss. -- Robert Nikita Shegog, 40, of Terry, Mississippi, pled guilty in U.S. District Court today to bribery, U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen announced.
Shegog admitted that, while employed as a Narcotics Detective with the Jackson Police Department in 2010, he advised a Hinds County criminal defendant that he would assist him in getting a sentence reduction on an outstanding drug charge if he would pay Shegog $45,000.00.
Shegog will be sentenced by U.S. District Judge Henry T. Wingate on September 12, 2013 at 9:30 a.m. and faces a maximum sentence of 10 years in prison and a $250,000 fine.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Jerry Rushing.
###If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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Former Employee of National Prearranged Services, Inc. and Lincoln Memorial Life Insurance Company Pleads Guilty to Fraud and Money Laundering ChargesRead the Press Release
St. Louis, MO - BRENT DOUGLAS CASSITY pled guilty today before United States District Judge Jean C. Hamilton to participating in a fraudulent scheme involving the sale of prearranged funeral contracts and monetary transactions involving the proceeds of that scheme. Cassity faces up to five years in prison for his role.
In court Cassity admitted that beginning as early as 1992 and continuing until 2008, National Prearranged Services, Inc. ("NPS") sold prearranged funeral contracts in several states, including Tennessee and Ohio. During that time, insurance companies affiliated with NPS issued life insurance policies related to those prearranged funeral contacts. As part of the contracts, the total price for funeral services and merchandise for an individual was agreed upon, and that price would remain constant regardless of when the funeral services and merchandise would be needed. Customers entering into prearranged funeral contracts would usually pay a single sum of money up-front to NPS either directly or through a funeral home that was also a party to the contract. NPS represented to individual customers, funeral homes and state regulators that funds paid by customers under the prearranged funeral contracts would be kept in a secure trust or insurance policy as required under state law. Cassity admitted, however, that NPS made use of funds paid by customers in ways that were inconsistent both with its prior and continuing representations and with the applicable state laws and regulations.
Cassity was employed at various times by NPS and also served as a Director of Lincoln Memorial Life Insurance Company, for which NPS served as General Agent. Cassity also held numerous titles with affiliated companies, including Chief Executive Officer, Chairman, President and Director of Forever Enterprises, Inc., and President and Director of National Heritage Enterprises.Cassity pled guilty to one count of mail fraud (count 31), one count of wire fraud (count 21) and one count of money laundering (count 38). Cassity also pled guilty to willfully permitting James Douglas Cassity, whom he knew to have been convicted of a felony involving fraud or dishonesty, to exercise significant control over NPS’ affiliated insurance companies. (Count 50)
Cassity will be sentenced on November 7, 2013, at 9 a.m. Earlier this month, Cassity’s co-defendant and fellow NPS executive Sharon Nekol Province pled guilty to six counts of mail fraud, wire fraud and misappropriation of insurance premiums arising out of the same scheme. Cassity’s co-defendants, James Douglas Cassity, Randall K. Sutton, Howard A. Wittner and David R. Wulf have entered pleas of not guilty and are scheduled to appear for trial starting on August 5, 2013. As is always the case, charges do not constitute proof of guilt and every defendant is presumed to be innocent unless and until proven guilty.
Cassity’s case was investigated by the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation and the Postal Inspection Service. Assistant United States Attorneys Steven Muchnick, Charles Birmingham and Richard Finneran are handling the case for the U.S. Attorney’s Office.Former Customs and Border Protection Officer Sentenced to 12 Years for Bribery and Conspiracy to Import DrugsRead the Press Release
Former Customs and Border Protection Officer Oscar Osbaldo Ortiz-Martinez was sentenced today by Chief United States District Judge Barry Ted Moskowitz to serve 144 months in federal prison for conspiring to allow drugs to be smuggled into the United States through his inspection lanes in exchange for tens of thousands of dollars in bribes. Judge Moskowitz also ordered the defendant to serve 5 years of supervised release following his prison term and imposed a $22,000 fine.
Ortiz, a two-year veteran who was assigned to the Calexico Ports of Entry, was convicted by a federal jury in September 2012, of conspiracy to import controlled substances and bribery. After a trial that lasted more than a week, the jury deliberated for just three hours before returning the verdicts.
According to court records and evidence presented at trial, Ortiz and his accomplice, Victor Manuel Silva, Jr., believed they were working for individuals with ties to a drug trafficking organization when, in fact, they were doing business with undercover agents and federal law enforcement cooperators posing as narcotics traffickers. Ortiz accepted $22,000 in bribes and was arrested on September 23, 2010, when he showed up to collect another $30,000 bribe from the informant. Silva was arrested later that day.
At trial, the government presented audio recordings of Ortiz discussing the smuggling of narcotics through his inspection lane with co-defendant Silva and a confidential informant. In two of those conversations, Ortiz made plans to allow the informant to cross 5 - 12 kg of cocaine through his lane in exchange for $20,000 and 15 kg of methamphetamine for $30,000.
Also during those recorded conversations, Ortiz established code words for the informant to use if the computer randomly required Ortiz to send the informant to secondary inspection, and they agreed these code words would prompt the informant to abandon the vehicle and run back to Mexico. Ortiz also at one point suggested the informant use motorcycles to smuggle narcotics, because they could then cross drugs “every day.”
The verbal exchanges between Ortiz and the informant when two bribes were paid, for $2,000 and $20,000, were also audio recorded. And for the latter transaction, agents video recorded Ortiz leaving the informant’s truck with the bag of money in his hand.
Silva, the accomplice who pleaded guilty in February 2011 to conspiracy to import at least 5 kilograms of cocaine, testified at trial against Ortiz, admitting that he and Ortiz had conspired to use the informant to smuggle narcotics through Ortiz’s lane. Silva also testified that he and Ortiz wanted to make as much money as possible.
“While the overwhelming majority of border officers are doing their jobs with vigilance and integrity, we have found that some are not, and we are going to bring to justice every one of these corrupt officials who violate the public’s trust and put our borders at risk,” said U.S. Attorney Laura Duffy.
“Acts of corruption within the Department of Homeland Security represent a threat to our nation and undermine the honest and hardworking employees who strive to maintain the integrity of the Department,” said Dennis M. McGunagle, Special Agent-in-Charge for the Department of Homeland Security, Office of Inspector General. “Corruption will not be tolerated and those who choose to break the law will be pursued aggressively. We appreciate the efforts of the U.S. Attorney’s Office for bringing these individuals to justice.”
“I commend the outstanding work by the law enforcement team of investigators and prosecutors in this important case,” said Joe Jeronimo, special agent in charge for ICE Office of Professional Responsibility. “ICE takes all allegations of criminal misconduct by DHS employees seriously, and will continue to aggressively investigate such allegations to ensure that the perpetrators are prosecuted to the fullest extent of the law.”
“Corrupt acts are a disgrace and the exact opposite of the values that form the basis of who we are,” said Pete Flores, Director of Field Operations for U.S. Customs and Border Protection (CBP) in San Diego. “CBP is a world-class law enforcement agency and enjoys a special position of national trust as the sole border enforcement agency. The vast majority of our officers are highly skilled, hard-working professionals dedicated to our mission to protect the American public. We will actively ferret out and work to prosecute to the fullest extent of the law any employees who commit unethical or unlawful acts that violate that special trust. This case will send a strong message to the community at large that we will not tolerate corruption in our workforce.”
DEFENDANTS
Criminal Case No. 10cr3986-BTM Oscar Osbaldo Ortiz-Martinez
Victor Manuel Silva, Jr. SUMMARY OF CHARGESConspiracy to Import Controlled Substances, in violation of Title 21, United States Code, Sections 952, 960, and 963
Bribery, in violation of Title 18, United States Code, Section 201
INVESTIGATING AGENCIESUnited States Department of Homeland Security, Office of Inspector General
United States Department of Homeland Security, Immigration and Customs Enforcement, Office of Professional ResponsibilityFormer Bank Branch Manager Pleads Gulty in Federal Court to Embezzling Nearly $250,000Read the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
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CLARKSBURG, WEST VIRGINIA —United States Attorney William J. Ihlenfeld, II, announced that DEBORAH D. RADCLIFF, age 51, of Weston, West Virginia, a former branch manager of the Weston branch of Huntington National Bank entered pleas of guilty on July 3, 2013, before Magistrate Judge John S. Kaull. RADCLIFF entered pleas of guilty to one count of “Embezzlement by a Bank Employee” and one count of “Structuring.”
During the period July 1, 2011, to November 5, 2012, while serving as the branch manager, RADCLIFF embezzled and misapplied $247,249.88 from depositors’ accounts and engaged in acts of structuring to cause the bank to fail to file a Currency Transaction Report for currency transactions of $10,000 or more. To execute the scheme, RADCLIFF utilized her position as branch manager to issue or direct to be issued cashier’s checks from funds withdrawn from depositors’ accounts issued in the name of the depositor. RADCLIFF would take possession of the cashier’s check, forge the name of the depositor and cash the checks for her own personal benefit. The ages of the alleged victims ranged from 56 to 90 years, with all but one alleged victim 64 years or older. As a branch bank manager, RADCLIFF was aware of banking rules and regulations requiring banks to file reports for single financial transactions of more than $10,000. To conceal her embezzlement from the customer’s account, she would have multiple cashier’s checks issued for less than $10,000, which she would cash on different days. On one of those instances, RADCLIFF withdrew $16,407.96 from an 84- year old customer’s account on May 2, 2012, splitting the embezzlement into two separate cashier’s checks in the amount of $8,203.98, then cashed one of the checks that day and the other five days later.
RADCLIFF, who is free on bond pending sentencing, faces up to 40 years imprisonment, a $1,500,000 fine and an order of restitution of $247,249.88.
Huntington National Bank has restored all of the customers’ money to their accounts. The case was prosecuted by Assistant United States Attorney John C. Parr and investigated by the Federal Bureau of Investigation and Internal Revenue Service, with cooperation from the Huntington National Bank’s Corporate Security office.Federal Jury Finds 3 Defendants Guilty in $8 Million Food Stamp Fraud and Money Laudering ConspiracyRead the Press Release
SAVANNAH, GA: RASHELLA REED, 41, from Riverdale, Georgia; DERRICK ROBINSON, 41, also from Riverdale; and, TORY HARDWICK, 21, from Chattanooga, Tennessee, were convicted last week after a 4-day jury trial before United States District Court Judge William T. Moore, Jr. for their roles in an $8 million fraud upon the Supplemental Nutrition Assistance Program (SNAP), commonly known as the Food Stamp Program, and the Women, Infant and Children Program (WIC).
According to evidence presented during the trial, the defendants conspired to traffick over $8 million in government benefits from SNAP and the WIC program, and to launder the proceeds of their ill-gotten gains. The scheme included 13 storefronts throughout Georgia, including stores in Savannah, Augusta, Atlanta, Decatur, Macon and Columbus. Defendants Reed, Robinson and Hardwick owned or operated the Decatur, Georgia store known as “The Baby Spot.” The 13 stores amounted to “pretend” grocery stores, which were used as a front to buy over $8 million in food stamp benefits and WIC vouchers for cash. SNAP and WIC recipients were paid anywhere from $.10 to $.60 on the dollar for their benefits; the defendants and other conspirators pocketed the rest. A total of 16 defendants were charged with the scheme; the other 13 defendants pled guilty.
United States Attorney Edward J. Tarver said, “SNAP and WIC are food programs set up to help those who need help. These defendants scammed federal food programs and swindled American taxpayers. Let this case serve as notice to any would-be fraudster that if you exchange food stamps and WIC vouchers for cash, you can expect your next meal to be served from the chow-line at a federal prison.”
Karen Citizen-Wilcox, Special Agent-in-Charge of the USDA-OIG said, “The United States Department of Agriculture, Office of Inspector General, remains diligent in working with federal, state, and local law enforcement and the Department of Justice to investigate and prosecute individuals and entities bent on defrauding, through trafficking, Agriculture food programs that have been created to provide food purchasing power to those who would otherwise not have such purchasing power. The American taxpayer expects that the tax dollars used to fund such programs will be used for the intended purposes of the programs. The Office of Inspector General will continue its diligence in working with its law enforcement partners to pursue prosecution of individuals such as those convicted in this investigation to ensure the integrity of Agriculture programs.”
The prosecution of this case arose out of an investigation led by Special Agent Salina Walker of the United States Department of Agriculture, Office of Inspector General. Assistant
United States Attorneys James D. Durham and E. Gregory Gilluly prosecuted the case for the United States.Federal Grand Jury Indicts Vaughn Watrous on Five Counts of Bank RobberyRead the Press Release
PROVIDENCE, R.I. – A federal grand jury in Providence today returned a five-count indictment charging Vaughn Watrous, 36, formerly of Providence, with five counts of bank robbery, announced United States Attorney Peter F. Neronha, Cranston Police Chief Colonel Marco Palombo, Jr., Providence Police Chief Colonel Hugh T. Clements, Jr., and Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office.
The indictment alleges that between February 6 and February 14, 2013, Watrous robbed a total of five banks in Providence and Cranston. The indictment alleges that Watrous robbed four of the banks on consecutive dates.
Watrous, who will appear for arraignment in U.S. District Court at a date yet to be determined, has been detained at the ACI since his arrest by Cranston Police on February 14, 2013.
If convicted, Watrous faces statutory penalties of up to 20 years in federal prison; 3 years of supervised release; and a fine of $250,000 for each count of bank robbery.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
The robberies were investigated by Providence Police, Cranston Police and the FBI.
An indictmentis merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/Contact: 401-709-5357
[email protected]Federal and State Prosecutors Join Louisville Metro Police to Charge Repeat, Violent Offenders in “Project Recoil”Read the Press Release
– U.S. Attorney creates new violent crime unit
– Maximizes penalties for most violent offendersLOUISVILLE, Ky. – U.S. Attorney David J. Hale was joined today by Jefferson County Commonwealth’s Attorney Thomas B. Wine, Louisville Metro Police Chief Steve Conrad, Special Agent in Charge ATF Louisville, Stuart L. Lowrey, Special Agent in Charge FBI Louisville, Perrye Turner, U.S. Marshall James E. Clark and Assistant County Attorney Ann Dyke, in the announcement of the initial results of “Project Recoil,” a coordinated review and prosecution of violent gun crime arrests in metro Louisville. The review effort includes federal and state prosecutors, agents and officers from The U.S. Attorney’s Office, the Jefferson County Commonwealth’s Attorney’s Office, Jefferson County Attorney’s Office, ATF, FBI, and LMPD’s Viper and Robbery Units.
“To the metro Louisville community, we want you to know that the police officers, federal agents, and federal and state prosecutors are working together to fight violent crime in Louisville. It is a determined and unified effort. It is a priority for each of the law enforcement agencies assembled here,” stated U.S. Attorney David J. Hale during the press conference held at the U.S. Attorney’s Louisville offices.
“There is a strong bond between the Office of United States Attorney and the Office of Commonwealth’s Attorney.. Our prosecutors have a great professional working relationship. They understand the state and federal systems and know which system gives us the best opportunity to get dangerous criminals off the streets both quickly and for as long as possible, ” stated Thomas Wine, Commonwealth’s Attorney.
“By working together, we are leveraging each other’s strengths to ensure criminals that use firearms are held accountable,” stated Chief Steve Conrad, Louisville Metro Police Department.
ATF Special Agent in Charge Stuart Lowrey said, “Through Project Recoil, ATF, Louisville Metro PD, our federal law enforcement partners, and our Federal and State prosecutors are coordinating our efforts to maximize our impact on violent crime in the Louisville Metro area. This violent crime reduction partnership plays an important role in combating violent gun crime. It allows law enforcement to share intelligence and operate with greater unity of effort, stemming the flow of crime guns and investigating and prosecuting the people who illegally possess or use firearms to commit violent crimes.”
“Project Recoil is an excellent example of law enforcement’s commitment to cooperation and collaboration, the most effective weapon against crime,” said Perrye K. Turner Special Agent in Charge of the FBI in Kentucky.
This successful team approach to prosecuting violent offenders in Louisville, began five months ago, and has resulted in three federal indictments with four defendants being charged. Each week, prosecutors from the U.S. Attorney’s Office, Commonwealth’s Attorney’s Office, and the County Attorney’s Office meet with officers from Louisville Metro Police Department’s (LMPD)Viper Unit and agents and analysts from the ATF, FBI, and U.S. Marshall’s Office. They review recent arrest reports from metro Louisville involving illegal firearms and violent crime.
Three cases developed out of Project Recoil include Troy Lamont Gaines, Jr., 22, and Shaundrell Robinson, 33, who were charged in a 22 count federal indictment on April 2, 2013. The defendants have prior felony convictions and were charged with eleven armed robberies between December 5, 2012 and January 3, 2013 in Metro Louisville. During one robbery, a shot was allegedly fired by Gaines during a struggle with a customer. These defendants face a minimum of twenty-five years for each armed robbery, under federal statutes. Dorris Trice III, 31, was charged as a multiple convicted felon by a federal grand jury in Louisville on June 19, 2013. The three count indictment includes possessing a firearm which he allegedly used during the robbery of a food mart on March 3, 2013. Yesterday, a federal grand jury in Louisville, returned a four count indictment against Lavon Crayton, 31charging him with being a convicted felon in possession of a weapon, and possession with the intent to distribute heroin, “crack” cocaine and marijuana.
In conclusion, U.S. Attorney Hale stated, “Project Recoil is one piece of a comprehensive anti-violent crime strategy which emphasizes collaboration among federal, state and local law enforcement and prosecutorial agencies to more effectively investigate and prosecute violent criminals in Louisville. By working together, and by including all of our community stakeholders in the broad effort to stem violent crime, we will reduce violence and its impact on our city.”