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Tuesday 14 May 2013
Federal Medicare Fraud Strike Force Charges Chicago Area Defendants with Defrauding Medicare and Other Health InsurersRead the Press Release
CHICAGO — Two area physicians and three health clinic co-owners are among seven defendants charged here with engaging in five separate, unrelated health care fraud schemes to defraud the Medicare program and/or private health insurers of millions of dollars, federal law enforcement officials announced today.
Four of the five cases here are part of a nationwide takedown by Medicare Fraud Strike Force operations in eight cities, announced today by the Departments of Justice and Health and Human Services, resulting in charges against 89 defendants, including doctors, nurses, and other licensed medical professionals, for their alleged participation in Medicare fraud schemes collectively involving approximately $233 million in false billings.
In Chicago, the defendants were charged in two criminal complaints and two informations filed today and yesterday, and an indictment that was unsealed today following the arrest of one defendant in Miami. All seven defendants were charged with health care fraud for allegedly defrauding the Medicare program, or violating the anti-kickback statute, which makes it illegal to offer, pay, solicit, or receive payments in exchange for referrals of Medicare patients. The charges involve various medical treatments and services, as well as durable medical equipment.
“Today’s announcement marks the latest step forward in our comprehensive efforts to combat fraud and abuse in our health-care systems,” said Attorney General Eric Holder. “These significant actions build on the remarkable progress that the HEAT has enabled us to make – alongside key federal, state, and local partners – in identifying and shutting down fraud schemes. They are helping to deter would-be criminals from engaging in fraudulent activities in the first place. And they underscore our ongoing commitment to protecting the American people from all forms of health-care fraud, safeguarding taxpayer resources and ensuring the integrity of essential health-care programs,” he added.
“Today’s charges are part of our continuing efforts not only to deprive dishonest healthcare providers of their illegal profits, but to demonstrate to the broader medical services community that healthcare fraud will be found out and prosecuted with all of our resources. In short, we will not tolerate medical professionals and providers who abuse our healthcare system,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois.
Details of the Chicago cases follow:
United States v. Ankur Roy, Akash Patel, and Dipen Desai
ANKUR ROY, AKASH PATEL, and DIPEN DESAI, who owned and operated Selectcare Health, Inc., which provided outpatient physical and respiratory therapy in Park Ridge and Skokie, were charged with submitting more than $4 million in false billings to Medicare between March and July 2011. Each defendant was charged with six counts of health care fraud in an indictment that was returned by a federal grand jury last Wednesday and unsealed today.
Roy, 36, of Miami was arrested today in south Florida, while Patel, 33, of Morton Grove, and Desai, 33, of Chicago, will be ordered to appear for arraignment on a later date in U.S. District Court in Chicago.
According to the indictment, the defendants submitted false claims to Medicare and Blue Cross Blue Shield on behalf of Selectcare patients for respiratory therapy services that were never provided. The alleged false billings sought reimbursement for services purportedly provided on days that Selectcare’s sole respiratory therapist was not working; for time periods in which the patients were not receiving care from Selectcare; and for treatment seven days a week for three hours per day, a schedule well in excess of any schedule prescribed for patients at Selectcare.
Roy, Patel and Desai used a third-party billing service to forward the alleged false claims to Medicare, as well as to private insurers such as Blue Cross if the patient had supplemental private insurance, including insurance funded by labor union health and welfare plans.
Between March and July 2011, the defendants allegedly submitted $4,009,094 in false billings for services that were purportedly provided between April 2010 and April 2011, resulting in payments totaling approximately $2,214,424 from Medicare and $320,881 from Blue Cross Blue Shield. The indictment seeks forfeiture of $2,535,305 in alleged fraud proceeds, including $446,974 in funds withdrawn by cashiers’ checks that were seized by the FBI in July 2012.
The government is represented by Assistant U.S. Attorney Maureen Merin. The case was investigated by the FBI, the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and the U.S. Department of Labor Office of Inspector General (DOL-OIG).
United States v. Cecilia Ibrahim
Dr. CECILIA IBRAHIM, an internal medicine physician who operated Sunrise Medical Center in Flossmoor, was charged with one count of health care fraud for allegedly engaging in a $1.7 million Medicare and private insurance false billing scheme.
Ibrahim, 50, of Frankfort, was charged in an information filed today in U.S. District Court. She will be arraigned on a date to be determined.
Between March 2006 and August 2009, Ibrahim allegedly submitted more than 3,200 false claims to Medicare and Blue Cross Blue Shield using a billing code for spinal decompression neuroplasty, a surgical procedure that she did not perform, when she only performed intervertebral differential dynamics therapy (IDD), a non-surgical procedure. As a result, she allegedly caused a loss of at least $300,000 to Medicare and $550,000 to Blue Cross Blue Shield. The indictment seeks forfeiture of at least $882,500 in alleged fraud proceeds.
The government is represented by Assistant U.S. Attorney Samuel B. Cole. The case was investigated by the FBI, HHS-OIG, and the Railroad Retirement Board Office of Inspector General.
United States v. Ellyse Lamon
ELYSSE LAMON, an account executive at a company that sold durable medical equipment, including back braces and transcutaneous electrical nerve stimulation units, also known as tens units, was charged with one count of health care fraud for allegedly engaging in a $350,000 Medicare false billing scheme.
Lamon, 30, of Elmhurst, was charged in an information filed today in U.S. District Court. She will be arraigned on a date to be determined.
Between October 2010 and May 2011, Lamon allegedly caused her company to submit false claims to Medicare representing that a physician had prescribed back braces and tens units when she knew that no physician had done so and the items were not medically necessary. In order to provide written support for the false claims, Lamon allegedly obtained patient records without a physician’s permission and added false information reflecting that a physician had ordered the equipment for the patients. She allegedly forged doctors’ signatures on documents, including false treatment records she created. Lamon further used patient information she had inappropriately accessed at a pain medicine center in Chicago to set up patient meetings where she falsely told patients that doctors had prescribed the equipment for them, according to the charges.
Lamon allegedly submitted false claims to Medicare totaling $352,685, resulting in payment of at least $206,233 to her medical equipment company. She allegedly profited from these false claims by receiving increased commissions and other benefits from her company.
The government is represented by Assistant U.S. Attorney Kruti Trivedi. The case was investigated by the FBI and is not part of the Medicare Fraud Strike Force operation.
United States v. Nalini Ahluwalia
Dr. NALINI AHLUWALIA, was charged with one count of violating the anti-kickback law for allegedly receiving $1,000 in exchange for referring two patients to a home health care agency in August 2012.
Ahluwalia, 58, of Burr Ridge, was charged in a complaint filed today in U.S. District Court. She will be ordered to appear on a date to be determined.
According to the complaint, a confidential informant who worked at a home health care company in Chicago, told agents that the CI had previously paid kickbacks to Ahluwalia of $400 to $500 per patient in exchange for her referral of Medicare patients to the home health care company.
On Aug. 23, 2012, at the direction of agents, the confidential informant met with Ahluwalia at the doctor’s office in Chicago, and paid her $1,000 for the two Medicare patient referrals in an exchange that was reflected on an audio/video recording, according to the complaint affidavit. In October 2012 and February 2013, the informant allegedly made two additional $500 payments to Ahluwalia in exchange for Medicare patient referrals.
The government is represented by Assistant U.S. Attorney Samuel B. Cole. The case was investigated by the FBI and the HHS-OIG.
United States v. Joseph Dickson
JOSEPH DICKSON, the president and owner of JD Medical Consultants, Inc., a medical marketing company, was charged with one count of violating the anti-kickback law for allegedly receiving $4,200 in exchange for referring patients to a home health care agency in October 2012.
Dickson, 65, of Lansing, was charged in a complaint filed yesterday in U.S. District Court. He will be ordered to appear on a date to be determined.
According to the complaint, a confidential informant who owned a home health care company in the Chicago area, told agents that the CI had previously paid kickbacks to Dickson, among others, for referring Medicare patients to another home health care company where s/he previously worked. Dickson was described as a “middle man” who arranged the referral of patients from a physician to a home health care company, and the confidential informant told agents that the CI had paid Dickson approximately $15,000 for referring about 30 patients between 2006 and 2008.
On Oct. 3, 2012, at the direction of agents, the confidential informant met with Dickson at his office in Chicago, and paid him $4,200 for seven Medicare patient referrals, at $600 each, in an exchange that was reflected on an audio/video recording, according to the complaint affidavit. In December 2012, the informant allegedly made an additional $1,800 payment to Dickson in exchange for Medicare patient referrals and re-certifications.
The government is represented by Assistant U.S. Attorney Joseph H. Thompson. The case was investigated by the FBI and the HHS-OIG.
The charges in these cases carry the following maximum penalties on each count: health care fraud — 10 years in prison and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater; and violating the anti-kickback statute — 5 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The Medicare Fraud Strike Force began operating in Chicago in February 2011, and consists of agents from the FBI and HHS-OIG, working together with prosecutors from the U.S. Attorney’s Office and the Justice Department’s Fraud Section. The strike force is are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
The nationwide takedown was announced today by Attorney General Holder, HHS Secretary Kathleen Sebelius and other federal law enforcement officials. Mr. Shapiro announced the Chicago charges with Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG, and James Vanderberg, Special Agent-in-Charge of the Labor Department Office of Inspector General in Chicago. The Railroad Retirement Board Office of Inspector General assisted in the Ibrahim investigation.
The public is reminded that indictments, informations, and complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: StopMedicareFraud.gov.
Ibrahim Information
Ahluwalia Complaint
Lamon Information
Dickson Complaint
SelectCare IndictmentFederal Jury Returns Guilty Verdict in Marriage Fraud CaseRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced the guilty verdict of JIAN BING WU yesterday in the United States District Court for Guam. The jury found WU guilty of conspiracy to commit marriage fraud and marriage fraud, based on his fraudulent marriage to Lynda Kathryn Laracuente for an immigration benefit. The charges stem from an Indictment filed on August 22, 2012 against WU and Bradley Jiblits.
The guilty verdict is the result of a six-day jury trial in front of Chief Judge Francis Tydingco-Gatewood. The jury found WU guilty of Count One, Conspiracy to Commit Marriage Fraud, in violation of 18, United States Code, Section 371, and Count Two, Marriage Fraud, in violation of Title 8, United States Code, Section 1325(c). Three co-defendants in related cases pleaded guilty previously and are awaiting sentencing. Defendant Jiblits entered his guilty plea to Conspiracy to Commit Marriage Fraud on November 28, 2012. Lynda Kathryn Laracuente pleaded guilty to Marriage Fraud on November 4, 2011, and Yingzi Zhang pleaded guilty to Aiding and Abetting False Statements on May 3, 2013.
WU’s sentencing hearing is scheduled for August 22, 2013. He faces a statutory maximum penalty of five years imprisonment and a maximum fine of $250,000.
U.S. Attorney Limtiaco stated, “Our immigration laws allow aliens who enter into legitimate marriages with U.S. citizens to gain the right to stay in the United States as permanent resident legal aliens. But aliens who engage in sham marriages to gain legal status in this country, and anyone who helps them to do so, undermine the integrity of that system and commit a fraud against the United States.”
The case was investigated by the Homeland Security Investigations. The case was prosecuted by Assistant United States Attorney Stephen F. Leon Guerrero and First Assistant United States Attorney Stephen P. Sinnott.
Fayetteville Man Pleads to Possesion of Stolen Firearm Intended for Use in Terrorist ActivitiesRead the Press Release
GREENVILLE - United States Attorney Thomas G. Walker announced that in federal court today ERWIN ANTONIO RIOS, a 19 year old resident of Fayetteville, North Carolina, pled guilty in front of United States Magistrate Judge James E. Gates to possession of a stolen firearm in violation of Title 18, United States Code, Section 922(j).
“Erwin Rios intended to commit violent acts against innocent people in furtherance of his extremist doctrine of hate. As demonstrated in this case, the multi-agency partnerships which make up our local Joint Terrorism Task Force continue to play a critical role in the day-to-day protection of our communities and our national security,” said John Strong, Special Agent in Charge of the Charlotte Division of the FBI.
On February 7, 2013, a Criminal Complaint was issued that charged RIOS with the above offense. According to the investigation, RIOS is a self-proclaimed adherent to the extremist views found within Radical Islam. RIOS desired to travel overseas in order to further what he termed “jihad” and expressly defined as various forms of violence against those he determined to be non-believers – to include U.S. forces. In order to obtain the funds necessary for such travel, RIOS devised a scheme to commit violent robberies within North Carolina. He intended to leave no witnesses alive in order to better secure success. As an initial step, RIOS sought out a firearm and expressed willingness to purchase a stolen hand gun. The FBI subsequently provided RIOS with the opportunity to purchase a purportedly stolen hand gun through a confidential informant. RIOS eagerly provided the funds for purchase of a weapon he believed to be stolen. Immediately afterwards RIOS was taken into custody.
Investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney, Jason M. Kellhofer, represented the government.
Elmore County Man Pleads Guilty to Producing Child PornographyRead the Press Release
Montgomery, Alabama - Joshua Ray Parton, age 25, of Elmore County, Alabama, was sentenced on Friday, May 10, 2013, to serve 30 years in federal prison for producing child pornography, U.S. Attorney George L. Beck, Jr., announced. Between 2007 and 2012, Parton raped two minor boys—a twelve-year-old and a nine-year-old—on multiple occasions, using his cell phone camera to capture images of his molestation of the children. Statements by the families of the victims reflected the severe and long-lasting suffering that the children had been through and continued to cope with. In handing down the 30-year prison sentence, Judge Myron Thompson noted the immeasurable trauma that Parton’s actions had wreaked in the lives of his child victims and their families.
“The actions of this defendant were revolting and despicable,” said United States Attorney George L. Beck, Jr. “We hope that this sentence will send a message to others who would prey upon children. We will not tolerate it and they will be prosecuted to the full extent of the law.”
“Sadly, but unfortunately true, these types of sexual assaults continue to plague not only our county, but other locations across the country,” stated Elmore County Sheriff Bill Franklin. “Hopefully, Mr. Parton will have an opportunity to reflect on the behavior he has exhibited while in jail, which I believe everyone hopes is a significant amount of time.”
This case is being brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit justice.gov/psc. For more information about internet safety education, please visit justice.gov/psc/resources.
This case was investigated by the Alabama Bureau of Investigation and the Elmore County Sheriff’s Office with the assistance of the United States Marshal’s Service. The case was prosecuted by Assistant United States Attorney Jared H. Morris.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Elizabeth D. Kupfer Sentenced to Three Years in Prison for Evading Federal TaxesRead the Press Release
ALBUQUERQUE – Elizabeth D. Kupfer, 50, of Rio Rancho, N.M., was sentenced this afternoon to 36 months in federal prison followed by three years of supervised release for her tax evasion conviction. Mrs. Kupfer also was ordered to pay $288,339 in restitution to the IRS. The restitution is to be paid jointly by Mrs. Kupfer and her husband Joseph C. Kupfer, 49, who also was convicted of tax evasion.
Mrs. Kupfer’s sentence was announced by U.S. Attorney Kenneth J. Gonzales, Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation, and Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI.
“Paying taxes is an obligation of citizenship and it is every citizen’s duty to pay them honestly and fully,” said U.S. Attorney Kenneth J. Gonzales. “When people like Elizabeth and Joseph Kupfer intentionally dodge their responsibility to pay taxes, honest Americans end up having to pay more. The sentence imposed on Mrs. Kupfer should serve as a warning that those who seek to avoid their tax responsibilities will be prosecuted and punished to the fullest extent of the law.”
“IRS Criminal Investigation will continue to investigate those who cheat their fellow citizens by not paying their taxes. In this case, Mrs. Kupfer intentionally concealed over $750,000 of income. Those who are tempted to commit tax evasion should know that the end result will likely be time in a federal prison” said Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of Internal Revenue Service Criminal Investigation.
Mr. and Mrs. Kupfer initially were charged in Dec. 2010, in a three-count indictment with evading more than $285,000 in federal taxes by failing to report at least $768,333 in taxable income during tax years 2004 through 2006. In July 2011, an 11-count superseding indictment was filed which added Armando G. Gutierrez, 65, of Corpus Christi, Texas, as a defendant, and also added conspiracy and theft of government property charges against Mr. Kupfer and Mr. Gutierrez, and obstruction and money laundering charges against Mr. Gutierrez. Thereafter, the court severed the three tax evasion counts against the Kupfers from the other eight counts in the superseding indictment for purposes of trial.
On Aug. 17, 2012, a federal jury convicted Mr. and Mrs. Kupfer on three tax evasion charges after a five-day trial. The evidence established that, from 2004 through 2006, Mr. Kupfer received income from his business, Kupfer Consulting, and the Kupfers reported income from Kupfer Consulting on their joint personal tax returns. Although Mr. Kupfer received $1,304,421 in revenue from Kupfer Consulting, the Kupfers reported only $502,541 on their federal tax returns and attempted to conceal approximately $768,333 in income by providing incomplete information to their tax preparer. The Kupfers then signed false and fraudulent tax returns, which they submitted to the IRS.
More specifically, the Kupfers claimed $125,969 in taxable income for 2004 but failed to include at least another $140,000 in income, thus evading at least $51,054 in federal taxes. They claimed $170,625 in taxable income for 2005 but failed to include another $170,000 in income, thus evading $64,651 in federal taxes. Finally, they claimed $125,734 in taxable income for 2006 but failed to include at least another $458,333 in income, thus evading $170,470 in federal taxes.
On Jan. 31, 2013, a federal jury found Mr. Kupfer and Mr. Gutierrez guilty of conspiracy and theft of government property charges after an eight-day trial. The jury also convicted Mr. Gutierrez on obstruction of justice and money laundering charges. Sentencing hearings have yet to be set for Mr. Kupfer and Mr. Gutierrez.
This case was investigated by IRS Criminal Investigation and the Albuquerque office of the FBI, and is being prosecuted by Assistant U.S. Attorneys Tara C. Neda and Cynthia L. Weisman.
Drug Trafficker in Eastern Shore Ring Sentenced to 16 Years in PrisonRead the Press Release
Baltimore, Maryland - U.S. District Judge Ellen L. Hollander sentenced Maurice Kenneth Hardy, age 37, of Bridgeville, Delaware, today to 16 years in prison followed by five years of supervised release for conspiring to distribute heroin, cocaine and cocaine base (crack cocaine).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Wicomico County Sheriff Michael A. Lewis; Salisbury Police Chief Barbara Duncan; Chief Michael Phillips of the Fruitland Police Department; U.S. Marshal Johnny Hughes; and Wicomico County State’s Attorney Matthew Maciarello.
According to his guilty plea, from 2009 until his arrest on June 29, 2011, Hardy conspired to sell heroin and cocaine with, or distributed the drugs to, Tereek Nutter and others. Austin Roberts was his primary source of supply. For example, on May 11, 2011, Hardy indicated in a telephone call with a co-conspirator that Roberts would be supplying him with seven kilograms of cocaine for $31,500 per kilogram. The next day in Salisbury, Maryland, Andrew Jackson, under Roberts’ direction, provided several kilograms of cocaine to Hardy. Subsequent to this meeting, law enforcement stopped Jackson’s vehicle and seized over $160,000 from a hidden compartment.
On June 29, 2011, after Hardy obtained 1.027 kilograms of cocaine from a co-conspirator, law enforcement stopped Hardy’s car and seized the cocaine. Law enforcement also executed a search warrant at Hardy’s home and a stash house used by Hardy, and seized a loaded handgun, ammunition, a digital scale, over $10,000, 82.4 grams of cocaine, 41.7 grams of heroin, a pocket scale and a large cocaine press.
During the course of the conspiracy, Hardy and his co-conspirators distributed over 15 kilograms of cocaine, a kilogram of heroin and a quantity of cocaine base.
Austin Roberts, III, age 37, formerly of Elkridge, Maryland; Andrew Jackson, age 39, of Baltimore, Maryland; and Tereek Nutter, age 30, of Salisbury, Maryland, previously pleaded guilty to their participation in the drug conspiracy. Judge Hollander sentenced Jackson to 10 years in prison, Nutter to 151 months in prison and scheduled Roberts’ sentencing for August 9, 2013 at 2:00 p.m.
United States Attorney Rod J. Rosenstein commended the DEA, U.S. Marshals Service and the Wicomico County Narcotics Task Force, comprised of the Maryland State Police, Wicomico County Sheriff’s Office, Salisbury Police Department, Fruitland Police Department, and the Wicomico County State’s Attorney’s Office for their work in this investigation. Mr. Rosenstein thanked Assistant United States Attorney Joshua L. Kaul, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Douglas, Georgia Pharmacist Pleads Guilty in Sex for Drugs ScamRead the Press Release
BRUNSWICK, GA: STANLEY SMITH, 61, of Douglas, Georgia, pled guilty yesterday before Chief U.S. District Court Judge Lisa Godbey Wood for distributing drugs to his customers without a legitimate medical purpose.
According to evidence presented during his guilty plea hearing, SMITH owned and operated Malcolm’s Drug Store located in Douglas, Georgia. A month ago, state and federal investigators received information that Smith had been trading very addictive prescription drugs for sex acts with multiple women since 2010. Some of women were addicts or became addicted to the drugs SMITH provided. In one instance, SMITH provided a woman with up to 360 hydrocodone pills a week. In an effort to hide his criminal activity, SMITH used aliases at various hotels, and would tape drugs and money on the outside of an electric box outside of his pharmacy. When approached by investigating agents, SMITH admitted he had traded drugs for sex for more than two years.
U.S. Attorney Edward Tarver stated, “This defendant used his pharmacy license as a license to deal drugs. He preyed upon those addicted to drugs and caused others to become addicted, all for his own personal gratification. This pharmacist will now exchange a white coat for an orange jumpsuit.”
SMITH faces up to 10 years in prison and a fine up to $500,000. There is no parole in the federal system. SMITH will be sentenced after the U.S. Probation Office completes a presentence investigation.
This case was investigated jointly by the DEA and the Georgia Drugs and Narcotics Agency. E. Greg Gilluly, Jr. is prosecuting the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Dominican Citizen Arrested After Allegedly Ingesting Pellets of CocaineRead the Press Release
HOUSTON - Mikkail Antonio Nolasco Jimenez, 27, has been arrested and charged with importing cocaine into the United States and conspiracy to possess with the intent to distribute it, United States Attorney Kenneth Magidson announced today. Jimenez, a citizen of the Dominican Republic, was arrested at Bush Intercontinental Airport (IAH) after it was determined he had allegedly ingested 53 pellets containing cocaine.
The criminal complaint filed today alleges that on Saturday, May 11, 2013, Jimenez arrived aboard a flight from Port of Spain Trinidad and Tobago bound for New York. Homeland Security Investigations (HSI) agents became suspicious when Jimenez provided inconsistent statements. The investigation resulted in the discovery of anomalies in his body resembling pellets believed to contain a controlled substance. Jimenez was transported and admitted to an area hospital.
Jimenez allegedly expelled a total of 53 pellets, which contained a substance that field-tested positive for cocaine, according to the complaint.
Jimenez made his made his initial appearance this afternoon before U.S Magistrate Judge Stephen Wm. Smith, at which time he was ordered into custody pending a detention hearing, set for Thursday, May 16.
Upon conviction, Jimenez faces a mandatory minimum of five and up to a 40 years in prison on each of the two counts.
The investigation leading up to the charges was conducted by Homeland Security Investigations and Customs and Border Protection. Assistant United States Attorney Stuart A. Burns is prosecuting the case.
District Man Sentenced to 34-Year Prison Term for Attacking and Threatening Woman in Southeast Washington-Defendant Was on Parole at Time of Attack-Read the Press Release
WASHINGTON - Clarence McCallum, 48, has been sentenced to a 34-year prison term on charges of kidnapping and felony threats stemming from an attack last year against an 18-year-old woman in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
McCallum, of Washington, D.C., has previously been convicted of violent offenses. He pled guilty in this case in October 2012 before he was to go on trial in the Superior Court of the District of Columbia. He subsequently moved to withdraw his plea, but that motion was denied last month. The Honorable Heidi M. Pasichow sentenced him on May 13, 2013. Upon completion of his prison term, McCallum will be placed on five years of supervised release.
According to the government’s evidence, at about 9:30 p.m. on May 27, 2012, the victim was walking home from work when McCallum grabbed her from behind in the 1200 block of V Street SE. He dragged her towards a nearby alley, at which point she managed to break free and run into the middle of the street. When she pulled out her cellphone and told McCallum that she was going to call 911, he told her that he would "get" her and started walking away.
While on the phone with 911, the victim followed McCallum so that he would not get away. She was aided by a neighborhood Good Samaritan who, when informed of what had just happened, agreed to help follow the assailant. After more than 10 minutes of pursuit, all while the victim remained on the line with 911, McCallum slipped into an alley. When he came out on the other side, several minutes later, the Good Samaritan spotted him and pointed him out to the police. After a brief foot chase, McCallum was stopped and placed under arrest.
At the time of the arrest, McCallum had been on parole for barely six weeks. He pled guilty in 1983, in two separate cases, to assault with intent to rape and rape while armed. He also pled guilty in 1984 in Prince George’s County, Md., to charges of kidnapping, robbery with a deadly weapon, and use of a handgun. Since his incarceration for those cases, he had been released on parole four times and had his release revoked four times, all following rearrests for assault-related conduct.
In announcing the sentence, U.S. Attorney Machen praised those who worked on the case from the Metropolitan Police Department (MPD). He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Litigation Technology Specialist Anisha Bhatia, Paralegal Specialists Theresa Nelson and Ethel Noble, and Assistant U.S. Attorney Justin Dillon of the Superior Court Homicide Section, who investigated and prosecuted the case.
13-169Deported Alien Charged with Illegally Re-Entering U.S.Read the Press Release
JOHNSTOWN, Pa. - A citizen of Mexico has been indicted by a federal grand jury in Johnstown on a charge of re-entry of an illegal alien, United States Attorney David J. Hickton announced today.
The one-count indictment named Miguel Cortez-Cagal, 32, of Altoona, Pa., as the sole defendant.
According to the indictment, on April 10, 2013, Cortez-Cagal, an alien who had been deported from the United States on Jan. 19, 2010, was found in Altoona, Pa. He had unlawfully re-entered this country without receiving permission from the Secretary of the Department of Homeland Security to do so.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Department of Homeland Security/Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Delwayne Denny Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on May 10, 2013, before Chief U.S. District Judge Dana L. Christensen, DELWAYNE DENNY, a 30-year-old resident of Box Elder and an enrolled member of the Chippewa Tribe, was sentenced to a term of:
Prison: 85 months
Special Assessment: $100
Supervised Release: 10 years
DENNY was sentenced in connection with his guilty plea to sexual abuse.
In an Offer of Proof filed by Assistant U.S. Attorney Danna R. Jackson, the government stated it would have proved at trial the following:
On March 11, 2012, DENNY, along with three other adults, returned to a house located on the Rocky Boy's Indian Reservation. The victim, who was very intoxicated, was taken into one of the bedrooms, by two concerned teenage boys, to "sleep it off." At some point in the evening DENNY went into the bedroom and engaged in sexual intercourse with the victim, even though she was passed out.
The victim regained consciousness and demanded that DENNY stop having sex with her. The victim grabbed clothes and left the house to look for help. Law enforcement had been called by a neighbor. Law enforcement found the victim in the fetal position in the middle of the roadway, crying hysterically. The victim was transported to the emergency room in Havre and consented to a sexual assault exam.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that DENNY will likely serve all of the time imposed by the court. In the federal system, DENNY does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Rocky Boy's Police Department.
Delaware County Man Charged in Mortgage Fraud ConspiracyRead the Press Release
Thomas C. Phelan, 34, of Wayne, PA, is charged by Indictment, unsealed today, with participating in a mortgage fraud conspiracy involving more than five properties and more than $1 million in fraudulent loan proceeds, announced United States Attorney Zane David Memeger. Phelan is charged with one count of conspiracy to commit loan and wire fraud, and three counts of loan fraud and one count of wire fraud.
If convicted the defendant faces a maximum possible sentence of 115 years imprisonment, a five year period of supervised release, $4,250,000 fine and a $500 mandatory special assessment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Joan E. Burnes.Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525Defendant Sentenced to 15 Years for Distribution of Child PornographyRead the Press Release
OAKLAND – Clyde Craig was sentenced yesterday to 15 years in prison for distribution of child pornography, United States Attorney Melinda Haag announced.
Craig pleaded guilty on January 7, 2013, to distribution of child pornography. According to the plea agreement, Craig admitted to distributing over the Internet images and videos of minors engaged in sexually explicit conduct with another person. Craig, 56, of San Ramon, was indicted by a federal grand jury on July 12, 2012.
The sentence was handed down by U.S. District Court Judge Saundra Brown Armstrong following a guilty plea on Count One of the Indictment in violation of 18 U.S.C. § 2252(a)(2). Judge Armstrong also sentenced the defendant to a ten year period of supervised release and ordered him to register as a sex offender and to participate in a sex offender treatment program.
Rodney C. Villazor is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
DMI Gang Member Exiled to 16 Years in Prison for Racketeering, Including a MurderRead the Press Release
Baltimore, Maryland - U.S. District Judge Richard D. Bennett sentenced Gregory Cook, age 37, of Baltimore, Maryland, today to 16 years in prison, followed by five years of supervised release, for conspiracy to participate in a violent racketeering enterprise known as the Dead Man Incorporated (DMI).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief James W. Johnson of the Baltimore County Police Department; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Commissioner Anthony W. Batts of the Baltimore Police Department; Anne Arundel County Police Chief Larry W. Tolliver; Secretary Gary D. Maynard of the Maryland Department of Public Safety and Correctional Services; Baltimore County State’s Attorney Scott Shellenberger; Baltimore City State’s Attorney Gregg L. Bernstein; and Anne Arundel County State’s Attorney Frank R. Weathersbee.
According to court documents, DMI was founded originally in 2000 as a prison gang in Maryland, and at its inception was closely allied to the Black Guerilla Family (BGF), another prison gang. By 2006, DMI expanded its membership by recruiting members outside prison, including women.
According to Cook’s plea agreement, he was a member of DMI and in the summer of 2009 was in the Brooklyn, Maryland unit of the gang. Cook admitted that he trafficked in cocaine, crack, marijuana and prescription pills with other DMI members. In August and September 2009, one of Cook’s co-conspirators ordered a “hit” on an individual who owed him a drug debt. DMI member Walter Milewski was recruited to commit the murder, but killed the wrong person. As dictated by DMI rules, Cook and his co-conspirator sought the permission of a DMI “Elder” to murder Milewski, because they believed he was a risk to reveal what happened to police and as punishment for killing the wrong man. The murder was authorized and Cook was notified by a call to his cell phone when Milewski was killed.
Two of the founders of DMI, Perry Roark, a/k/a Rock, “Pops,” “Slim,” “Saho the Ghost,” age 42, and James Sweeney, age 36, of Baltimore, previously pleaded guilty and were both sentenced to life in prison.
Mr. Rosenstein praised the FBI, ATF, Maryland Department of Public Safety and Correctional Services; Baltimore County Police Department; Anne Arundel County Police Department; Baltimore City Police Department; the Maryland State Police; Baltimore County State’s Attorney’s Office; Baltimore City State’s Attorney’s Office; and Anne Arundel County State’s Attorney’s Office for their assistance in this investigation and prosecution.
United States Attorney Rod J. Rosenstein thanked Assistant United States Attorneys Robert R. Harding and Christopher J. Romano, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Cuban Found Guilty of Unlawfully Possessing Debit and Credit Card Account NumbersRead the Press Release
McALLEN, Texas - Pedro Garcia-Morales, a legal permanent resident from Cuba living in Donna, has been found guilty of possession of more than 15 unauthorized access devices with intent to defraud, United States Attorney Kenneth Magidson announced today. The McAllen federal jury returned its verdict just a short time ago following one day of trial and less than two hours of deliberation.
During trial, the government contended Garcia-Morales, 41, knowingly possessed more than 500 account numbers linked to credit and debit cards belonging to people from all over the United States.On Jan. 11, 2013, a search warrant was executed at the defendant’s home, at which time agents discovered two laptops, two flash drives, a credit card encoder and 49 gift/prepaid cards that had been encoded with stolen/unauthorized debit or credit card account numbers. The government proved Garcia-Morales knew the cards were to be used to make fraudulent purchases.
In fact, testimony of witnesses established that over a two-year period, Garcia-Morales used international hacking websites to purchase hundreds of account numbers. He then wired money internationally to hackers in China, Vietnam, Romania and the Ukraine. Encoding software on his laptops and flash drives was used to transfer the purchased account numbers on to the magnetic strips of gift/prepaid cards. The cards could then be used at retail stores to make seemly legitimate purchases. However, use of the cards unlawfully charged those transactions to others’ credit and debit card accounts.
U.S. District Judge Micaela Alvarez, who presided over the trial, has set sentencing for July 30, 2013, at 2:00 p.m., at which time he faces up to 10 years in prison and a possible $250,000 fine. He has been in custody since his arrest where he will remain pending the sentencing hearing.
U.S. Secret Service and the Hidalgo County Sheriff’s Office investigated. The case is being prosecuted by Assistant United States Attorneys Kristen Rees and Patricia Rigney.
Community Mental Health Center Program Coordinator<br /> Sentenced to 70 Months for Role in $63 Million Fraud SchemeRead the Press Release
WASHINGTON – A former program coordinator at the defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced in Miami to 70 months in prison today for her role in a $63 million fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office, made the announcement after sentencing by U.S. District Judge Cecilia M. Altonaga.Dana Gonzalez, 43, of High Point, N.C., pleaded guilty on March 6, 2013, to conspiracy to commit health care fraud. In addition to the prison sentence, Gonzalez was also sentenced to three years of supervised release and ordered to pay $19,428,120 in restitution.
During the course of the conspiracy, Gonzalez was employed as a therapist and program coordinator of HCSN’s Partial Hospitalization Program (PHP). A PHP is a form of intensive treatment for severe mental illness.
According to court documents, HCSN of Florida (HCSN-FL) operated community mental health centers at two locations. Gonzalez was aware that HCSN-FL paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid.
Gonzalez admitted that she routinely fabricated medical records for purported mental health treatment that were used to support false and fraudulent claims to health care benefit programs, including Medicare and Medicaid. Gonzalez admitted that she routinely fabricated these medical records, despite knowing that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease. Gonzalez, an unlicensed clinical social worker intern at the time, also admitted to providing unlicensed therapy to PHP patients when licensed therapists were absent.
In total, Gonzalez admitted that during her employment at HCSN, she and her co-conspirators submitted approximately $46,959,975 in false and fraudulent claims. According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case was prosecuted by Trial Attorney Allan J. Medina and former Special Trial Attorney William J. Parente of the Criminal Division’s Fraud Section. In support of the Medicare Fraud Strike Force, the FBI Criminal Investigative Division’s Financial Crimes Section has funded the Special Trial Attorney position.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Community Health Center Program Coordinator Sentenced to 70 Months for Role in $63 Million Fraud SchemeRead the Press Release
A former program coordinator at the defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced in Miami to 70 months in prison today for her role in a $63 million fraud scheme.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Michael B. Steinbach, Special Agent in Charge of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office, made the announcement after sentencing by U.S. District Judge Cecilia M. Altonaga.
Dana Gonzalez, 43, of High Point, N.C., pleaded guilty on March 6, 2013, to conspiracy to commit health care fraud. In addition to the prison sentence, Gonzalez was also sentenced to three years of supervised release and ordered to pay $19,428,120 in restitution.
During the course of the conspiracy, Gonzalez was employed as a therapist and program coordinator of HCSN’s Partial Hospitalization Program (PHP). A PHP is a form of intensive treatment for severe mental illness.
According to court documents, HCSN of Florida (HCSN-FL) operated community mental health centers at two locations. Gonzalez was aware that HCSN-FL paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid.
Gonzalez admitted that she routinely fabricated medical records for purported mental health treatment that were used to support false and fraudulent claims to health care benefit programs, including Medicare and Medicaid. Gonzalez admitted that she routinely fabricated these medical records, despite knowing that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease. Gonzalez, an unlicensed clinical social worker intern at the time, also admitted to providing unlicensed therapy to PHP patients when licensed therapists were absent.
In total, Gonzalez admitted that during her employment at HCSN, she and her co-conspirators submitted approximately $46,959,975 in false and fraudulent claims. According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case was prosecuted by Trial Attorney Allan J. Medina and former Special Trial Attorney William J. Parente of the Criminal Division’s Fraud Section. In support of the Medicare Fraud Strike Force, the FBI Criminal Investigative Division’s Financial Crimes Section has funded the Special Trial Attorney position.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Child Pornography Producer and Distributor Sentenced to Federal PrisonRead the Press Release
Fort Myers, FL - U.S. District Judge John Steele today sentenced Raymond Lugo (38, Punta Gorda) to 22 years in federal prison, to be followed by lifetime supervised release, for producing child pornography. The court also ordered Lugo to forfeit his computers and camera, which are traceable to proceeds of the offense. Lugo pleaded guilty on October 31, 2012.
According to court documents, Lugo victimized an approximately 2 year-old child on multiple occasions, for the purpose of producing child pornography photographs. Lugo photographed himself sexually molesting the child. He then traded those images with others for the purpose of obtaining other child pornography images.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Tama Koss Caldarone.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Carroll County Company Founder Pleads Guilty to $1.9 Million Securities FraudRead the Press Release
Baltimore, Maryland - John F. “Jef” Curran, III, age 42, of Westminster, Maryland pleaded guilty today to securities fraud, in connection with the sale of $1.9 million worth of stock in his company, Gargoyles, Inc.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division.
According to the statement of facts that is part of his plea agreement, Curran was the founder, president and single largest shareholder of Gargoyles, Inc., located in Westminster, Maryland. Gargoyles was a self-described “advanced materials application company,” purportedly doing business with customers in a variety of settings including the military and law enforcement.
From January 2009 to September 2010, Curran sold approximately $1.9 million worth of Gargoyles stock to investors. Curran admitted that he falsely represented to investors and potential investors that Gargoyles had customers, sales contracts and purchase orders for its products when, in fact, it did not. Curran also misrepresented his education to investors.
As part of his plea, Curran is obligated to pay restitution up to the amount of $1,963,065, to refund to any investor who so wishes, the money they invested in Gargoyles, Inc. Investors will be notified of the option of receiving a refund, and will have 30 days from the receipt of the notice to make the refund request.
As part of his plea agreement, and to resolve In the Matter of John Francis Curran, III and Gargoyles, Inc., Case No. 2010-0184, Curran and Gargoyles, Inc. agree to the entry of a consent order with the Maryland Securities Division of the Office of the Maryland Attorney General prohibiting Curran from violating the Maryland Securities Act and permanently barring Curran from selling or offering for sale securities in Maryland.
Curran faces a maximum sentence of 20 years in prison. U.S. District Judge Richard D. Bennett has scheduled sentencing for August 4, 2013, at 3:00 p.m.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein thanked the FBI and U.S. Postal Inspection Service for their work in the investigation and thanked the Securities Division of the Office of the Maryland Attorney General for its assistance in the case. Mr. Rosenstein praised Assistant U.S. Attorney Leo Wise, who is prosecuting the case.
Camden County, N.J., Man Sentenced to 10 Years in Prison for Conspiring to Distribute 13 Kilograms of CocaineRead the Press Release
CAMDEN, N.J. – A Camden County, N.J., man was sentenced today to 120 months in prison for attempting to purchase 13 kilograms of cocaine for distribution in and through New Jersey, U.S. Attorney Paul J. Fishman announced.
Jamal Herrin, 40, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an Information charging him with one count of knowingly and intentionally conspiring to distribute and possess with intent to distribute more than five kilograms of cocaine. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
The investigation into Herrin began in April 2012, when the U.S. Drug Enforcement Administration learned that Herrin – who was on bail pending state murder charges – was interested in purchasing large quantities of cocaine. Herrin admitted that he negotiated the purchase of 13 kilograms of cocaine and amassed more than $325,000 to purchase the cocaine.
In addition to the prison term, Judge Rodriguez sentenced Herrin to five years of supervised release.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration’s Camden Resident Office, under the direction of Acting Special Agent in Charge Robert G. Koval in Newark; the Camden County Prosecutor’s Office; the Rowan University Police Department; the Winslow Township Police Department; the Gloucester County Prosecutor’s Office; and local law enforcement agencies in support of the Camden division of the Philadelphia-Camden High Intensity Drug Trafficking Areas task force.The government is represented by Assistant U.S. Attorney Alyson M. Oswald of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel: Brian J. McMonagle Esq., PhiladelphiaCalifornia Man Sentenced to Prison, Ordered to Pay $1.5 Million for Scheme That Swindled New Jersey InvestorsRead the Press Release
TRENTON, N.J. – A man who perpetrated a million-dollar investment fraud from California that defrauded New Jersey victims was sentenced today to 46 months in prison for crimes related to the scheme, U.S. Attorney Paul J. Fishman announced.
Robert Schroy, 68, of Placentia, Calif., previously pleaded guilty to a criminal information charging him with one count each of wire fraud and tax evasion. U.S. District Judge Joel A. Pisano, who accepted the plea, also imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
From 2004 through 2009, Schroy solicited people to invest in an alleged “international bank trade.” He admitted that he and fellow conspirators falsely promised prospective investors extraordinary gains – ranging between 10 and 100 percent per week for a minimum period of 25 weeks – plus the return of their principal investment. Based on Schroy’s misrepresentations, numerous investors, including investors in New Jersey, wired investment monies to accounts controlled by Schroy and others. Although the money was wired to the designated accounts, Schroy admitted it was not invested in any bank trade. Instead, he and other conspirators used it for personal expenditures, including automobiles, vacations and meals at restaurants. In total, Schroy admitted they misappropriated at least $1 million in investor money.
In pleading guilty to the tax evasion count, Schroy specifically admitted he failed to file a 2007 U.S. Individual Income Tax Return and failed to report $479,566 of taxable income, upon which an additional tax of $151,781 was owed to the IRS.
In addition to the prison term, Judge Pisano sentenced Schroy to serve three years of supervised release and ordered him to pay $1,540,044 in restitution.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and the N.J. Bureau of Securities, under the direction of Bureau Chief Abbe R. Tiger, for their work in the investigation.
The government is represented by Deputy Chief Christopher J. Kelly of the U.S. Attorney’s Office Economic Crimes Unit in Newark.This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel: Joshua Markowitz Esq., Lawrenceville, N.JCalifornia Man Indicted for Allegedly Distributing Crack Cocaine and Marijuana in MinnesotaRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 30-year-old man from Sacramento, California, was indicted for allegedly distributing controlled substances in Minnesota. Demar Deshawn Powell was specifically charged with one count of conspiracy to distribute or possess with intent to distribute a controlled substance and one count of attempt to distribute or possess with intent to distribute a controlled substance.
The indictment alleges that on September 21, 2012, Powell distributed a controlled substance. A law enforcement affidavit filed in the case states that on September 20, 2012, a suspicious package came into the Minneapolis-St. Paul International Airport. An officer in the K-9 unit purportedly notified authorities that a drug-sniffing dog had alerted to narcotics in the package. During the subsequent execution of a search warrant on the parcel, which was being shipped from Sacramento to a Bloomington address, authorities allegedly found approximately 283 grams of crack cocaine and 123.5 grams of marijuana. On September 21, 2012, the package was delivered to the Bloomington address. The police then executed a search warrant on the package and arrested Powell when he later claimed it.If convicted, Powell faces a potential maximum penalty of life in prison, because he has been convicted of felony drug charges in the past. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the United States Postal Inspection Service, the Bloomington Police Department, and the Minneapolis-St. Paul International Airport Police Department, with cooperation from the Sacramento County Sheriff’s Office in California. The case is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.
An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
California Jewelry Store Owner Sentenced to Prison for Conspiracy to Defraud the United States and Conspiracy to Launder the Proceeds of Bank FraudRead the Press Release
Safieh Fard, 52, of Escondido, Calif., was sentenced late yesterday to 63 months in prison by U.S. District Judge Cormac J. Carney. Fard was also ordered to pay $594,000 in restitution to the Internal Revenue Service (IRS) for unpaid individual income taxes. Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally, U.S. Attorney Andre Birotte Jr., and the IRS made the announcement.
Fard was convicted by a Santa Ana, Calif., jury on Nov. 21, 2012, of one count of conspiracy to defraud the IRS and one count of conspiracy to launder the proceeds of bank fraud. Fard’s co-conspirators, her sister Sedigheh Bahramian, and two of her sons, Mohsen Kikalaye and Ahmad Kikalaye, pleaded guilty and were sentenced to related counts of bank fraud in 2010.
According to the indictment and evidence introduced at trial, starting in 1997 and continuing through 2004, Fard and her co-conspirators purchased valuable residential real estate properties, including numerous beachfront properties in Newport Beach, Calif. To obtain mortgages to purchase these properties, Fard and her co-conspirators provided false information to federally insured banks that substantially overstated their income and assets on mortgage applications. Fard submitted mortgage applications that falsely stated she earned over $40,000 per month, despite claiming no taxable income on her federal income tax returns during the eight year conspiracy.
Evidence introduced at trial established that Fard and her co-conspirators bought, sold, and transferred ownership of the properties between and among themselves. Ultimately, the properties were sold to third parties resulting in substantial monetary gain. Fard and her co-conspirators then failed to report capital gains on more than $3.7 million from these sales on their federal income tax returns.
The evidence further established that Fard and her co-conspirators Mohsen Kikalaye and Ahmad Kikalaye sold Newport Beach properties to unrelated third parties and received the proceeds in a large lump-sum payment by either wire transfer or check. Fraud proceeds were then transferred through multiple bank accounts to an account in the name of Fard’s co-conspirator Ahmad Kikalaye, who withdrew proceeds in cash in amounts slightly below the $10,000 federal reporting requirement. Fraud proceeds were also used to buy new real estate properties.
The case was investigated by special agents from IRS - Criminal Investigation and the Department of Homeland Security - Homeland Security Investigations and prosecuted by Tax Division Trial Attorneys Erin S. Mellen and Mark L. Williams, with valuable support from the U.S. Attorney’s Office in Santa Ana, Calif.
Business Owners; Brothers Sentenced for Employing Unauthorized AliensRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Geoffrey Lechner, 52, of Brighton, N.Y., and his brother, Douglas Lechner, 51, of Rochester, N.Y., who were convicted of employing unauthorized aliens, were fined $3,000 each by U.S. Magistrate Judge Marian W. Payson.
Assistant U.S. Attorney Marisa J. Miller, who handled the case, stated that the brothers are the principal owners of Clover Lawn Care. The defendants hired two or more aliens to work at the lawn care and landscaping company despite knowing that they were not authorized to work in the United States. The matter came to the attention of law enforcement in June 2012, following an accident involving a Clover Lawn Care vehicle driven by four employees in Brighton, N.Y.
The sentencing is the culmination of an investigation on the part of Special Agents of the Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, Agents of the United States Border Patrol under the direction of Assistant Patrol Agent in Charge Michael Werthman, and Officers of the Brighton Police Department, under the direction of Chief Mark T. Henderson.Brother and Sister Team Sentenced to 10 Months in Prison for Running a Fraudulent Document RingRead the Press Release
OAKLAND – Ana Mendoza-Roman and Ricardo Mendoza-Roman were sentenced today to 10 months in prison and three years of supervised release for conspiracy to produce and transfer false identification documents, United States Attorney Melinda Haag announced. Ana and Ricardo Mendoza-Roman are siblings who are citizens of Mexico and are unlawfully present in the United States.
In their guilty pleas, the defendants admitted to conspiring to produce and sell false alien registration cards which appeared to be issued by or under the authority of the Department of Homeland Security, and Social Security cards, which appeared to be issued by or under authority of the Social Security Administration.
On August 23, 2012, Homeland Security Investigation (HSI) Task Force agents executed federal search warrants at the defendants’ residence and on two vehicles owned by the defendants. During the execution of these search warrants, agents uncovered a document mill which contained fraudulent document manufacturing equipment including a laminator, printer, computer, seals, card stock and thousands of business cards offering these illegal services. A 9mm Beretta handgun and multiple high-capacity magazines were also seized from the residence.
“These sentences should serve as a reminder about the consequences facing those involved in the counterfeit document trade,” said Clark Settles, Special Agent in Charge for HSI San Francisco. “Individuals who knowingly and indiscriminately sell phony identity documents are putting the security of our communities and even our country at risk, which is why these cases are a priority for Homeland Security Investigations.”
The sentence was handed down by U.S. District Court Judge Sandra Brown Armstrong following defendants’ guilty pleas to violations of 18 U.S.C. § 371. The defendants have remained in federal custody since their arrest on August 23, 2012.
Assistant U.S. Attorney Christina McCall and Special Assistant U.S. Attorney Tamara Weber prosecuted the case with the assistance of Vanessa Vargas and Jeanne Carstensen. This prosecution was the result of an investigation by the HSI-led Document and Benefit Fraud Task Force and the Richmond Police Department into an organization that manufactured and sold counterfeit identity documents in Richmond, Pittsburg, Concord and San Rafael, California.
Birmingham Tax-Preparer Gets Three Years in Prison for Aiding Filing of False Tax ReturnsRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Birmingham tax-preparer to three years in prison and ordered her to repay $322,876 to the U.S. Treasury for aiding and abetting the filing of false income tax returns, announced U.S. Attorney Joyce White Vance and IRS Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge R. David Proctor sentenced SALLY ELIZABETH WYNN, 65, on three counts of aiding and abetting the filing of a false return. A federal jury convicted her on those charges following a three-day trial in January. Wynn was a 20-year professional tax-preparer and owner of Centerpoint Financial Services. After serving her prison sentence, she must serve a year on probation.
"Our country offers many benefits and opportunities to people from all walks of life, but with those benefits comes the obligation to pay taxes on earnings," Vance said. "Ms. Wynn's conviction and sentence make clear that tax preparers who do not follow the income tax laws will be prosecuted and ordered to pay back what they stole," she said.
"Concealing income in order to evade taxes is a serious offense," Hyman-Pillot said. "It is our hope that today's sentence will send a strong message that tampering with the integrity of our nation's tax system can result in jail time and that these violations must be, and will continue to be pursued in order to obtain justice."
According to evidence at trial, Wynn helped one of her clients hide income from the Internal Revenue Service for the 2005, 2006, and 2007 tax years. The evidence showed that Wynn provided tax-preparation and bookkeeping services to Gonzalez Construction Incorporated and its owner, Jose Gonzalez. As a result, Wynn knew that Gonzalez received at least $340,000 in personal income during each of the years in question. Nevertheless, she prepared tax returns for him that claimed between $55,000 and $66,000 in total income during each of the three years.
Gonzalez still faces criminal charges for his role in these crimes.
The IRS investigated the case. Assistant U.S. Attorneys Melissa K. Atwood and Robin B. Mark prosecuted the case.
Belleville Man Sentenced to Prison Term for Felon in Possession of A FirearmRead the Press Release
Courtney Darris, 22, of Belleville, Illinois, was sentenced to 70 months in prison in the federal district court for Unlawful Possession of a Firearm by a Previously Convicted Felon, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. Darris was also order to pay a $100 special assessment, a $500 fine and to serve a term of 2 years of supervised release following imprisonment. There is no parole in the federal system. Darris has been in custody since his arrest on September 17, 2012.
“I hope that cases like this will help send out messages that my office will continue to vigorously prosecute any illegal use of firearms and that the penalties are severe.” said United States Attorney Wigginton.
Court documents establish that on September 17, 2012 at 5:00 p.m., Darris was standing outside the Food Mart on Carlyle Avenue in Belleville, Illinois when a vehicle pulled onto the lot. At that time, Darris withdrew a firearm from his backpack and fired several shots in the direction of the vehicle. Darris was arrested later that same day and found to be in possession of a Hi-Point 9mm pistol with a fully loaded magazine. The serial number of the firearm had been filed off. Darris agreed to a recorded interview with law enforcement at which time he admitted to being in possession of the firearm and to shooting the gun in the direction of the vehicle while at the Food Mart.
The investigation was conducted by the St. Clair County Sheriff’s Department and the Bureau of Alcohol, Tobacco and Firearms (ATF). The case was prosecuted by Assistant United States Attorney Ali Summers.
Allentown Mortgage Co.'s Former Manager Pleads Guilty to FraudRead the Press Release
PHILADELPHIA – Joel Tillett, 36, of Whitehall, PA, pleaded guilty yesterday to charges in connection with a mortgage fraud conspiracy. Tillett, the former general manager of Madison Funding, Inc., a now-defunct Allentown mortgage loan origination company, pleaded guilty to conspiracy and to forging or counterfeiting loan documents. The fraud conspiracy caused mortgage lending businesses to issue millions of dollars’ worth of loans that were based on false information.
Tillett was indicted along with five former employees: Jason Boggs, Claribel Gonzalez, Florentina Peralta, Ghovanna Gonzalez, all of Allentown, and Angela Diaz, of Bethlehem. Denise Peralta, also of Allentown, was charged by information.
Tillett admitted in court that between October 2006 and at least June 2008, he conspired to defraud mortgage lenders by submitting loan applications that contained false information about the borrowers which was often supported by falsified, forged, and altered documents. The mortgage lenders, which included Washington Mutual Inc., Countrywide Home Loans, Mortgage IT, International Mortgage Corporation, and Security Atlantic Mortgage Company, relied on the fraudulent representations and provided Madison Funding’s clients with millions of dollars in loans to purchase real estate. Each funded loan generated thousands of dollars’ worth of commissions to Madison Funding and its employees. Many of those loans have since defaulted and some of them were insured by the Federal Housing Administration (“FHA”), which was an agency within the United States Department of Housing and Urban Development (“HUD”).
A sentencing hearing for Tillett is scheduled for August 14, 2013. He faces a maximum possible sentence of seven years in prison,three years of supervised release, a $500,000 fine, and a $200 special assessment.
The case was investigated by the Department of Housing and Urban Development Office of the Inspector General, the Federal Deposit Insurance Corporation Office of Inspector General, and the Federal Housing Finance Agency Office of Inspector General. It is being prosecuted by Assistant United States Attorney Mark B. Dubnoff.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Albuquerque Man Sentenced to Federal Prison for Involuntary Manslaughter ConvictionRead the Press Release
ALBUQUERQUE – Lawrence Presley O’Dell, 25, an enrolled member of the Navajo Nation who resides in Albuquerque, N.M., was sentenced this morning to 37 months in federal prison followed by three years of supervised release for his involuntary manslaughter conviction. O’Dell also was ordered to pay $9,455.74 in restitution to cover funeral costs for the victim.
O’Dell was arrested in Oct. 2012, and charged with causing the death of a Navajo man, Ramus James, on June 25, 2012, while driving while intoxicated in Red Rock, N.M., which is located on the Navajo Indian Reservation. O’Dell has been in federal custody since his arrest.
In Feb. 2013, O’Dell pleaded guilty to a felony information charging him with involuntary manslaughter. In entering his guilty plea, O’Dell admitted driving his vehicle at a high rate of speed while under the influence of intoxicating beverages on June 25, 2012. O’Dell admitted crashing the vehicle and killing the passenger in the vehicle.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety and was prosecuted by Presiliano A. Torrez.16 Defendants, Including Mexican Drug Cartel Members, Charged in Cocaine ConspiracyRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas and Randall C. Coleman, Special Agent in Charge of the Federal Bureau of Investigation, Little Rock Field Office announced that a 25-count indictment handed down by a federal grand jury on May 2, 2013, was unsealed today charging sixteen defendants in Arkansas, Texas, and Mexico with multiple drug offenses. The indictment alleges the lead defendant, Idalia Ramos Rangel, a/k/a La Tia or Big Momma, is a high-ranking member of the Gulf Cartel who directs a drug trafficking organization based in Matamoros, Mexico. That organization is responsible for the distribution of multiple hundreds of kilograms of cocaine in the United States.
The Indictment is the result of a large-scale investigation into cocaine and narcotics trafficking from Mexico to Arkansas. Agents determined that Rangel's drug trafficking organization is responsible for delivery of more than one hundred kilograms of cocaine in Arkansas. The charges in the Indictment include conspiracy to possess with intent to distribute more than five kilograms of cocaine, distribution of cocaine and use of a telephone to facilitate a drug trafficking crime. All sixteen defendants are charged with conspiracy to distribute cocaine. If convicted of conspiracy to distribute more than five kilograms of cocaine, each defendant will face a sentence of not less than 10 years to life imprisonment.
"The arrests made in this case have dismantled a primary supply of cocaine into the State of Arkansas," stated Thyer. "From the Gulf Cartel to prison to the streets of Central Arkansas, this was not a typical case to investigate. I want to thank the FBI for their leadership in this investigation. I also want to acknowledge the significant investigative work the Federal Bureau of Prisons and the Little Rock Police Department provided. Those who do business with drug cartels should be on notice that law enforcement is investigating and will commit the resources necessary to punish them for their illegal trafficking."
"Today, a strong group of dedicated federal, state, and local law enforcement officials - from Arkansas to Texas - came together to disrupt a criminal drug enterprise directly linked to the Gulf Cartel," stated FBI Special Agent in Charge Randall Coleman. "It was simply a case of outstanding teamwork. In Arkansas, we will continue to work together to disrupt and dismantle those groups who choose to conduct their criminal enterprise activities here."
According to the indictment, Rangel's family members are alleged to be involved in the drug distribution conspiracy. Her son, Mohammed Kazam Martinez, a/k/a Mo, a federal inmate in the Bureau of Prisons, recruited inmates in the Federal Correctional Complex at Forrest City, Arkansas, to distribute Rangel's Gulf Cartel cocaine upon their release from prison. Those inmates included Emmanuel Ilo, a/k/a Chi Chi or Chi, and Mervin Johnson, a/k/a Slim, who the indictment alleges began distributing kilogram and multi-ounce quantities of the cocaine in Central Arkansas upon their release from federal prison. Mohammed Martinez communicated with members of this drug trafficking organization using the prison telephone and e-mail systems to coordinate the distribution of cocaine to, and the collection of drug proceeds from, former federal inmates and others. Another of Rangel's sons, Homar Martinez, and one of her daughters, Nishme Martinez, are also charged as part of the conspiracy.
The indictment alleges that Ilo distributed Rangel's Gulf Cartel cocaine to Dwatney Noid; Dwight McLittle, a/k/a D.A.; Lamont Williams, a/k/a Peter Rabbit; Gerard Trice, a/k/a Fly; Tarvars Honorable, a/k/a Pudgy; and others, for redistribution to customers in the Eastern District of Arkansas. The FBI made multiple controlled purchases of cocaine in Central Arkansas totaling more than one kilogram during the investigation of this case.
The investigation was conducted by the FBI, with substantial assistance from the Federal Bureau of Prisons and the Little Rock Police Department. The case is being prosecuted by Assistant United States Attorneys Michael Gordon and Chris Givens.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
DEFENDANTS/CHARGES - 11 in custody - 10 arrested today
Conspiracy to possess with intent to distribute cocaine:
- Idalia Ramos Rangel, 57, Matamoros, Mexico
- Mohammed Kazam Martinez, 31, Beaumount, TX
- Emanuel Ilo, 34, Little Rock, AR
- Mervin Johnson, 37, Little Rock, AR
- Homar Martinez, 31, Brownsville, TX
- Manuel Garza, 31, Brownsville, TX
- Jaime Benevides, 27, Austin, TX
- Nishme Martinez, 26, Austin, TX
- Denice Duran Martinez, 34, Brownsville, TX
- Yadira Anahy Martinez, 36, Brownsville, TX
- Dwatney Noid, 30, Little Rock, AR
- Dwight McLittle, 27, Little Rock, AR
- Shanieka Tatum, 35, Little Rock, AR
- Lamont Williams, 34, Little Rock, AR
- Gerard Trice, 29, Little Rock, AR
- Tarvars Honorable, 33, Little Rock, AR
In addition to the conspiracy charges, the following defendants are also charged with the following crimes:
- Emanuel Ilo, distribution of cocaine (6 counts), use of a telephone to facilitate a drug trafficking crime (2 counts).
- Mervin Johnson, distribution of cocaine (1 count).
- Dwatney Noid, distribution of cocaine (2 counts), use of a telephone to facilitate a drug trafficking crime (2 counts).
- Dwight McLittle, distribution of cocaine (6 counts).
- Shanieka Tatum, use of a telephone to facilitate a drug trafficking crime (3 counts).
- Lamont Williams, use of a telephone to facilitate a drug trafficking crime (2 counts).
- Gerard Trice, use of a telephone to facilitate a drug trafficking crime (2 counts).
- Tarvars Honorable, distribution of cocaine base (1 count), use of a telephone to facilitate a drug trafficking crime (1 count).
STATUTORY SENTENCES
Conspiracy to possess with intent to distribute more than five kilograms of cocaine is punishable by not less than 10 years, not more than life, incarceration in the Bureau of Prisons with a possible fine of up to $10,000,000, and not less than 5 years supervised release.
Possession with intent to distribute less than 500 grams of cocaine or less than 28 grams of cocaine base is punishable by not more than 20 years incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not less than 3 years supervised release.
Use of a communication facility to facilitate a drug trafficking crime are not more than 4 years incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 1 year supervised release.
(Rangel Indictment)
(Tallenetal Indictment)
12 Los Angeles-Area Residents Accused of Attempting to Bilk Medicare Out of $22 Million Arrested as Part of Nationwide CrackdownRead the Press Release
LOS ANGELES – Twelve Los Angeles-area residents – including California’s second-largest biller for chiropractic services, a physician’s assistant, and owners of durable medical equipment (DME) and ambulance companies – were taken into custody today in relation to seven criminal cases that allege they cumulatively submitted more than $22 million in false billings to Medicare.
The charges filed in Los Angeles are part of a nationwide “takedown” by Medicare Fraud Strike Force operations in eight cities that led to charges against 89 individuals for their alleged participation in schemes to collectively submit about $223 million in fraudulent claims to Medicare (for national press release and all related charging documents, see: http://www.justice.gov/opa/mfsf-pc-docs-2013.html).
The dozen defendants taken into custody are among 13 people charged in Los Angeles in cases that allege health care fraud. The 12 either were arrested this morning or self-surrendered to authorities after learning that they had been charged in federal court. All of those defendants are scheduled to be arraigned this afternoon. A thirteenth defendant is a fugitive.
Dr. Houshang Pavehzadeh, of the Sylmar Physician Medical Group, allegedly billed Medicare more than $1.7 million for chiropractic treatments he never performed. During the scheme, which ran from 2005 through 2012, Dr. Pavehzadeh, 40, of Agoura Hills, became the second-largest Medicare biller in California for chiropractic services – even though he was not in the United States when some of the alleged services were performed. In addition to being charged with health care fraud, Pavehzadeh is charged with aggravated identity theft related to Medicare beneficiaries whose information he used to bill Medicare as a part of the scheme. When investigators tried to conduct an audit of Pavehzadeh’s claims, he falsely reported to the Los Angeles Police Department that he had been carjacked and that patient files requested by the auditors had been stolen from his car. Pavehzadeh surrendered this morning, and he is scheduled to be arraigned with other Los Angeles-area defendants this afternoon in the Roybal Federal Building.
Nine defendants affiliated with DME companies were also charged in five separate indictments.
Olufunke Fadojutimi, 41, of Carson, a registered nurse; Ayodeji Temitayo Fatunmbi, 41, formerly of Carson, and now believed to be residing in Nigeria; and Maritza Velazquez, 40, of Las Vegas, were charged with health care fraud. The scheme allegedly revolved around Lutemi Medical Supplies, a DME company Fadojutimi owned and where Fatunmbi and Velazquez worked. According to the indictment in this case, Lutemi billed Medicare more than $8.3 million in claims, primarily for medically unnecessary power wheelchairs. Fadojutimi and Fatunmbi allegedly laundered Medicare funds in order to purchase fraudulent prescriptions for those power wheelchairs and pay illegal kickbacks to recruit Medicare beneficiaries. Fadojutimi was arrested this morning in Los Angeles, while Velazquez was arrested in Las Vegas. Fatunmbi is currently a fugitive being sought by federal authorities.
Susanna Artsruni, 45, of North Hollywood, and Erasmus Kotey, 76, of Montebello, a licensed physician’s assistant, allegedly worked together to commit health care fraud out of a medical clinic on Vermont Avenue where they both worked. Kotey allegedly prescribed medically unnecessary DME, including power wheelchairs, for Medicare beneficiaries. Many of those power wheelchair prescriptions were then used by Artsruni’s DME company, Midvalley Medical Supply, to support fraudulent claims to Medicare. In only four months, the clinic and Midvalley billed Medicare more than $525,000 for these fraudulent claims. Artsruni has previously been convicted of health care fraud and was on pretrial supervision at the time she allegedly laundered some of the proceeds of this fraud. Artsruni was arrested this morning, while Kotey self-surrendered.
Three other DME cases were also charged, alleging fraudulent Medicare billing for medically unnecessary power wheelchairs that were sometimes never even delivered. In one case, Akinola Afolabi, 53, of Long Beach, the owner of Emmanuel Medical Supply, allegedly submitted more than $2.6 million in in false and fraudulent billing to Medicare. In another case, Queen Anieze-Smith, 52, of Encino, and Abdul King-Garba, 47, of Westwood, the owners and operators of ITC Medical Supply, allegedly submitted more than $1.8 million in false and fraudulent billing to Medicare. In the third case, Clement Etim Aghedo, 53, of Fontana, the owner of Ace Medical Supply Company, allegedly submitted more than $1.8 in false and fraudulent claims to Medicare. Afolabi, Anieze-Smith, and King-Garba were all arrested this morning, while Aghedo self-surrendered.
In the seventh case brought as part of today’s takedown, three defendants affiliated with Gardena-based ProMed Medical Transportation, an ambulance company, were charged with submitting more than $5.9 million in false claims to Medicare between 2008 and 2011. ProMed’s owner, Yaroslav Proshak, 45, of Valley Village; general manager Sharetta Wallace, 35, of Inglewood; and office manager and biller Sergey Mumjian, 40, of West Hollywood, submitted claims for medically unnecessary transportation services and then created fake documentation purporting to support those claims. Proshak, Wallace, and Mumjian were arrested this morning.
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and the Department of Health and Human Services to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
The Los Angeles cases announced today are being investigated by a Medicare Fraud Strike Force team, which is comprised of agents and investigators with the Federal Bureau of Investigation; the Department of Health and Human Services, Office of Inspector General; IRS - Criminal Investigation; and Medicaid Fraud Control Units, including the California Department of Justice. The cases are being prosecuted by attorneys from the United States Attorney’s Office and the Fraud Section of the Justice Department’s Criminal Division.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The charge of health care fraud carries a statutory maximum penalty of 10 years in federal prison. Money laundering carries a potential penalty of 20 years in prison. Aggravated identity theft carries a mandatory two-year prison term.
Release No. 13-069a
Monday 13 May 2013
Wichita Man Sentenced to 10 Years for Distributing Child PornRead the Press Release
WICHITA, KAN. – A Wichita man was sentenced to more than 10 years in federal prison for distributing child pornography, U.S. Attorney Barry Grissom said today.
Deric D. Davin, 34, Wichita, Kan., was sentenced to 121 months in federal prison. He pleaded guilty to one count of distributing child pornography. In his plea, he admitted he used a peer-to-peer file sharing network on the Internet to receive and distribute child pornography. In February 2012, an FBI agent in Tulsa, Okla., downloaded child pornography from Davin’s computer in Wichita.
Grissom commended the FBI and Assistant U.S. Attorney Jason Hart for their work on case.
West Hollywood Doctor Indicted on Federal Charges for Writing Prescriptions for Narcotics After Being Ordered to StopRead the Press Release
LOS ANGELES – A West Hollywood doctor surrendered to federal authorities this morning after being indicted last Friday on federal drug trafficking charges that allege he wrote more than 1,200 prescriptions for powerful painkillers after a federal order revoked his authority to prescribe those drugs.
James William Eisenberg, 72, who resides in the Venice district of Los Angeles, surrendered this morning at the United States Courthouse, where he is expected to be arraigned this afternoon.
Eisenberg is named in an indictment that charges him with four counts of using a revoked DEA registration number and three counts of distribution of hydrocodone, which is the generic drug found in brand-name products such as Vicodin and Norco.
Eisenberg allegedly wrote the prescriptions while he worked out of several medical offices in West Hollywood, including a Santa Monica Boulevard storefront he called Pacific Support Services. Eisenberg also issued “medical marijuana” recommendations from these West Hollywood locations, according to court documents and DEA administrative records.
In order to legally prescribe controlled substances such as hydrocodone, physicians must be registered with the United States Attorney General and have a valid DEA registration number. On December 14, 2011, a DEA administrative judge determined that Eisenberg acted as a “drug dealer” and suspended his registration number. The DEA issued an order permanently revoking Eisenberg’s registration on July 24, 2012.
The orders issued by the administrative judge were based on findings that Eisenberg, who at the time was working out of a “medical marijuana” club in Arizona, “lacked a legitimate medical purpose and acted outside of the usual course of professional practice” when he wrote prescriptions for oxycodone (the generic form of a drug often best known as the brand-name OxyContin) and Xanax in exchange for $150 cash payments. The DEA judge also found that Eisenberg wrote “medical marijuana” recommendations to undercover officers posing as patients, and that Eisenberg prescribed OxyContin to one of the undercover agents “before [Eisenberg] had even performed a physical examination.”
DEA investigators later learned that Eisenberg continued to prescribe controlled substances, including hydrocodone, in violation of the DEA’s orders. A review of a California Department of Justice database that can be used to track prescriptions showed that, following the suspension of Eisenberg’s registration number, patients filled more than 1,700 of his prescriptions for controlled substances, including more than 1,200 prescriptions for hydrocodone. As charged in the indictment, Eisenberg wrote one of those prescriptions on December 27, 2011, less than two weeks after his registration number was suspended.
DEA investigators executed a federal search warrant on one of Eisenberg’s West Hollywood offices on February 19, 2013. The affidavit in support of the search warrant outlines evidence, including surveillance and undercover operations, that Eisenberg continued to write prescriptions for controlled substances in violation of the DEA’s revocation order. The evidence included an operation in which an undercover agent, posing as a patient, obtained a prescription from Eisenberg for hydrocodone and alprazolam (the generic form of a drug best known as Xanax). A receptionist at Eisenberg's office asked the undercover agent if “he was looking for medical marijuana” as well, according to the search warrant affidavit.
According to the affidavit, when a West Hollywood pharmacist refused to fill Eisenberg prescriptions for hydrocodone and alprazolam in June 2012, Eisenberg called the pharmacy and asked the pharmacist to make an “exception” and fill the prescription.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
If convicted of the seven counts in the indictment, Eisenberg faces a statutory maximum sentence of 46 years in federal prison.
The investigation into Eisenberg was conducted by the Drug Enforcement Administration.
Release No. 13-068
United States Attorney’s Office Honors Federal, State & Local Law Enforcement Personnel for Exceptional ServiceRead the Press Release
BOSTON - United States Attorney Carmen M. Ortiz recently recognized 152 officials from federal, state and local law enforcement agencies for exceptional service at the annual Law Enforcement Public Service Awards Ceremony.
The ceremony held at the United States Courthouse in Boston on May 8 identified 15 cases worthy of special recognition from 2012 for outstanding collaboration, investigative achievement, investigative excellence and victim assistance. The honorees were nominated by Assistant U.S. Attorneys involved in the investigation and prosecution of the cases.
During the event, US Attorney Ortiz praised law enforcement personnel or their accomplishments and recognized the demands placed upon them.
“This work can be difficult, and at times, it may seem thankless,” she said. “Please know that your efforts do not go unnoticed. What you have sacrificed - your personal safety, your precious time with your families – it is truly appreciated by our office, your agencies and the communities for which you have dedicated your esteemed service.”
Cases receiving recognition for Outstanding Collaborative Investigation were those that required exceptional efforts of investigators to overcome significant challenges and achieve a successful conclusion resulting from collaboration with multiple agencies. Cases and agencies highlighted in this category were as follows:
- U.S. v. John Alicea-Burgos, et al.
Recipients: Drug Enforcement Administration; Easthampton Police Department, Federal Bureau of Investigation; and Holyoke Police Department - U.S. v. GlaxoSmithKline, LLC
Recipients: U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations; Federal Bureau of Investigation; Department of Defense, Office of Inspector General, Defense Criminal Investigative Service; U.S. Food and Drug Administration, Office of Criminal Investigations; United States Postal Service, Office of Inspector General; U.S. Department of Veterans Affairs, Office of Inspector General; and Office of Personnel Management, Office of Inspector General - United States v. Luis Alberto Gonzalez, et al.
Recipients: Drug Enforcement Administration; Fairhaven Police Department; and Massachusetts State Police through the FBI North Shore Gang Task Force and Essex County Drug Task Force - U.S. v. Thomas A. Donahue
Recipients: Federal Bureau of Investigation and U.S. Immigration and Customs Enforcement, Homeland Security Investigations - U.S. v. Emadeddin Muntasser, et al.
Recipients: Federal Bureau of Investigation; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; Massachusetts State Police; U.S. Immigration and Customs Enforcement, Customs and Border Protection; and U.S. Internal Revenue Service, Criminal Investigation - U.S. ex rel. Giddarie v. Sanofi-Aventis
Recipients: U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations; Federal Bureau of Investigation; United States Postal Service, Office of Inspector General; and Office of Personnel Management, Office of Inspector General.
Cases receiving recognition for Investigative Achievement were limited to those that substantially and significantly contributed to the mission of the U.S. Attorney’s Office and the Department of Justice. Cases and agencies highlighted in this category were as follows:
- U.S. v. Owens Brown
Recipients: Federal Bureau of Investigation; Boston Police Department; and Massachusetts State Police Gang Task Force. - U.S. v. Ralph F. DeLeo, et al.
Recipients: Federal Bureau of Investigation; Massachusetts Department of Correction; Boston Police Department; Medford Police Department; and U.S. Internal Revenue Service, Criminal Investigation - U.S. ex rel. Susan Hutcheson v. Blackstone Medical, Inc.
Recipient: Department of Defense, Office of Inspector General, Defense Criminal Investigative Service - U.S. v. Dion, et al., U.S. v. Rickaby, U.S. v. Savage, and U.S. v. Lapierre, et al.
Recipients: U.S. Postal Inspection Service; U.S. Internal Revenue Service; and U.S. Internal Revenue Service, Criminal Investigation - Operation Magic Wand
Recipients: Drug Enforcement Administration and Boston Police Department - U.S. v. Orthofix, Inc. and U.S. v. Thomas Guerrieri
Recipient: U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations
Cases receiving recognition for Investigative Excellence were reserved for those whose actions led to the arrest of a dangerous subject or the exposure of a significant criminal conspiracy. The case need not be prosecuted in the District of Massachusetts, but related to a federal or international matter. Cases and agencies highlighted in this category were as follows:
- U.S. v. Jose L. Baez
Recipients: Bureau of Alcohol, Tobacco, Firearms and Explosives; Boston Fire Department, Fire Investigation Unit; Boston Police Department; Massachusetts State Police, Fire and Explosion Investigation Unit; and Cambridge Fire Department - U.S. v. Rezwan Ferdaus
Recipients: Federal Bureau of Investigation and Worcester Police Department - Operation Holitna
Recipient: U.S. Immigration and Customs Enforcement, Homeland Security Investigations
The award recipients in Operation Holitna also received a Victim Service Award for their tireless efforts to rescue child victims of sexual abuse and pornography. Operation Holitna has led to the identification of about 160 child victims worldwide and arrests of 33 and 16 individuals internationally and domestically, respectively. Untold numbers of children have been saved from these predators due the exceptional efforts of those recognized.
- U.S. v. John Alicea-Burgos, et al.
Union Official from Jersey City Local Sentenced to Six Months in Prison for Embezzling MoneyRead the Press Release
NEWARK, N.J. – The president of Local 148 of the Production Workers Union was sentenced today to six months in prison for conspiring with the secretary-treasurer/recording secretary to steal money from the union by taking unauthorized salary increases and bonuses, U.S. Attorney Paul J. Fishman announced.
Stephen P. Arena, 58, of Nesconset, N.Y., previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of a 24-count Indictment, which charged Arena with conspiracy to embezzle money and funds from Local 148. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Local 148 of the Production Workers Union of the Allied, Novelty, and Production Workers of America, located in Jersey City, N.J., represents workers from various trades, including bus drivers, hotel workers, and factory workers.
Arena, the union’s president, and David J. Caivano, its secretary-treasurer/recording secretary, conspired to embezzle money belonging to Local 148 by giving themselves unauthorized salary increases and bonuses with no legitimate union purpose and which had not been authorized by the union or its members. Arena admitted he conspired with Caivano to embezzle money from the union.
Caivano pleaded guilty before Judge Chesler to unlawfully engaging in a financial transaction with a labor union and was sentenced to three years of probation.In addition to the prison term, Judge Chesler sentenced Arena to two years of supervised release and fined him $5,000. Arena’s plea agreement also requires him to repay the union approximately $110,000 in restitution.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert L. Panella; investigators from the U.S. Department of Labor, Office of Labor Management Standards, New York District Office, under the direction of District Director Andriana Vamvakas, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney Office’s Organized Crime/Gangs unit, in Newark.
13-192Defense counsel: Nicholas G. Kaizer Esq., New York
Two Local Men Sentenced for Supporting Foreign TerroristsRead the Press Release
MINNEAPOLIS—Today in federal court, U.S. District Court Chief Judge Michael J. Davis sentenced two local men for providing material support to foreign terrorists. Mahamud Said Omar, also known as Sharif Omar, age 46, of Minneapolis, was sentenced to 180 months in federal prison on each of Counts 1 through 4, and 240 months in federal prison on Count 5, with the prison sentences to run concurrently. He was also ordered to remain on life-long supervised release once he has served his prison term. Kamal Said Hassan, age 28, of Minneapolis, was sentenced to 120 months in federal prison on each of Counts 1 and 2 and 96 months in federal prison on Count 3, to be served concurrently, followed by 20 years of supervised release.
Omar was indicted on August 20, 2009, on Count 1: conspiracy to provide material support to terrorists; Count 2: providing material support to terrorists; Count 3: conspiracy to provide material support to a Foreign Terrorist Organization; Count 4: providing material support to a Foreign Terrorist Organization; and Count 5: conspiracy to kill, kidnap, maim, and injure overseas. He was arrested in the Netherlands in November of 2009 and extradited to the United States in August of 2011. In October 2012, he was tried and convicted of these crimes. He remains in custody.On February 18, 2009, Hassan pleaded guilty to Counts 1 and 2 of an information, alleging he provided material support to terrorists and providing material support to the Foreign Terrorist Organization al-Shabaab. He admitted that he had traveled to Somalia, had graduated from an al-Shabaab training camp, and had participated in an al-Shabaab ambush of Ethiopian soldiers. Then, on August 12, 2009, he was charged with and entered a guilty plea to Count 3 of a superseding information, alleging that he made false statements to the Federal Bureau of Investigation (“FBI”) during interviews with the FBI in early 2009. Those charges were based on the fact that Hassan had lied to the FBI about his continued involvement with al-Shabaab after completing training in an al-Shabaab camp. He pleaded guilty to that crime and remains in custody.
Following today’s sentencings, John Carlin, Acting Assistant Attorney General for National Security, said, “With today’s sentences, two individuals who played crucial roles in raising funds and recruiting fighters from the United States to assist al-Shabaab are being held accountable. I thank the many agents, analysts, and prosecutors responsible for this extensive investigation and the many successful prosecutions that have resulted.”
U.S. Attorney B. Todd Jones added, “Fighting terrorism, whether at home or abroad, remains the number-one priority of the U.S. Department of Justice. To that end, we must continue to counter violent extremism and radicalization through tough prosecution whenever necessary and education and outreach efforts whenever possible. We need to keep our young people from being recruited and trained by foreign terror organizations, not only because of the threat to themselves and others elsewhere in the world but because of the danger they pose if they return to this country.”
From September 2007 through August 2009, Omar, a Somali citizen who was a lawful permanent resident of the United States, conspired with others to provide financial assistance as well as personnel to al-Shabaab, a Somali group designated a Foreign Terrorist Organization by the U.S. State Department in March 2008. Specifically, while on a trip to Somalia in early 2008, Omar visited an al-Shabaab safe-house, providing those in charge with hundreds of dollars for the purchase of AK-47 assault weapons, to be used by the Minneapolis men who had traveled there to fight with al-Shabaab. After returning to the United States, Omar facilitated the travel of several young men from Minnesota to Somalia, where they trained with and fought for al-Shabaab. In the fall of 2008, he assisted six additional men, some of whom were as young as 17 years of age, in traveling from Minnesota to Somalia. Later that year, Omar left the United States for Saudi Arabia and eventually sought asylum in the Netherlands.
Prior to departing from Minnesota in December 2007, Hassan engaged in fund-raising and attended meetings at a Minneapolis mosque, restaurant, and private residence for the purpose of developing and implementing the plan to induce Somali men in Minneapolis to travel to Somalia to fight for al-Shabaab. Once in Somalia, he participated in, among other things, an attack by al-Shabaab on a convoy of Ethiopians who were traveling in Somalia. In addition, he assisted in the construction of an al-Shabaab training camp, and he appeared in an al-Shabaab propaganda video that encouraged others to travel to Somalia and join al-Shabaab.J. Chris Warrener, Special Agent in Charge of the Federal Bureau of Investigation’s Minneapolis Field Office, which leads the Minnesota Joint Terrorism Task Force, the primary investigative entity in this case, said, “Today marks a significant point in our efforts to identify and neutralize the efforts of al-Shabaab to support terrorist operations from their American Diaspora. It represents years of hard work by the FBI Joint Terrorism Task Force, our many state, local, and federal partners, as well as countless courageous leaders and parents in the Minneapolis Somali community. While the sentencing today represents closure to two very significant cases, our overall investigation continues with our full commitment.”
This case arose out of “Operation Rhino,” a federal investigation that has focused primarily on the disappearance of approximately 20 young, ethnic Somali men from the Twin Cities area during the past six years. The young men were recruited to fight with al-Shabaab against Somalia’s internationally recognized Transitional Federal Government and African Union peacekeeping troops in Somalia.
The earliest groups of identified “travelers” departed the United States in October and December of 2007, while others left in February 2008, August 2008, September 2008, November 2008, and October 2009. Upon arriving in Somalia, the men resided in al-Shabaab safe houses in Southern Somalia until constructing an al-Shabaab training camp, where they were thereafter trained. Senior members of al-Shabaab and a senior member of al-Qaeda in East Africa conducted those trainings.
In July 2008, men from Minneapolis as well as other Americans participated in an al-Shabaab ambush of Ethiopian troops. One of those men, Shirwa Ahmed, who had resided at the safe house with Omar and Hassan, detonated a vehicle-borne improvised explosive device as one of five coordinated suicide bombings on October 29, 2008, in Bosaso and Hargeisa, Somalia. Ahmed is believed to have become the first American suicide bomber. On May 30, 2011, Farah Mohamed Beledi, one of the men charged with terrorism offenses in October 2009, was killed at a checkpoint in Somalia as he attempted to detonate his suicide vest. To date, approximately 18 individuals have been charged in the course of Operation Rhino, and eight defendants have been convicted. The remaining ten are believed to be fugitives or have been killed in Somalia.
These cases were the result of an investigation by the FBI’s Minneapolis Joint Terrorism Task Force, with the assistance of the Netherlands National Police Service, the Netherlands Ministry of Security and Justice, the Justice Department’s Office of International Affairs, the U.S. Department of State, and the U.S. Department of Defense.
It was prosecuted by Assistant U.S. Attorneys Charles J. Kovats, John Docherty, and LeeAnn K. Bell, as well as William M. Narus of the Counterterrorism Section of the U.S. Department of Justice’s National Security Division.Two Broward Residents Plead Guilty to Identity TheftRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced that defendants Nathaniel Troy Maye, a/k/a Troy May, 44, and Tiwanna Tenise Thomason, 40, both of Ft. Lauderdale, both pled guilty on Friday, May 10, 2013, to one count of possession of 15 or more unauthorized access devices, in violation of Title 18, United States Code, Sections 1029(a)(3) and 2, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2.
Sentencing has been scheduled for July 19, 2013, before U.S. District Judge William J. Zloch. At sentencing, the defendants each face a maximum of up to 10 years in prison for the possession of unauthorized access devices charge, and a mandatory sentence of 2 years in prison for the aggravated identity theft charge.
According to court documents, on January 5, 2013, a cooperating source (CS) met with Thomason and Maye. During the meeting, Maye told the CS that he had a large number of stolen identities on a flash drive, and discussed using the stolen identities to file fraudulent tax returns and get refunds from those returns. On January 7, 2013, Maye gave the CS a flash drive containing 50 names, dates of birth, and accompanying social security numbers.
On January 8, 2013, the IRS executed a search warrant at Thomason’s apartment. During the search, the IRS recovered numerous electronic storage devices, including computers and flash drives. On two of the flash drives, the IRS found the personal identifying information of thousands of individuals, most of whom were from outside the state of Florida. The personal identifying information included the names, dates of birth, addresses, and social security numbers of numerous individuals.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Strider Dickson.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Area Women Charged with Submitting Fraudulent Bills for Home Health ServicesRead the Press Release
CORPUS CHRISTI, Texas - Sylvia Salinas Ramirez, of Driscoll, and Debra Jean Velasquez, of Robstown, have surrendered to authorities following the return of an indictment alleging they perpetrated a scheme to defraud the Texas Medicaid program through fraudulent home health billings, United States Attorney Kenneth Magidson announced today along with Texas Attorney General Greg Abbott.
The 14-count indictment was returned Wednesday, May 8, 2013. Ramirez, 51, and Velasquez, 41, were taken into custody this morning and are expected to make an appearance before U.S. Magistrate Judge Janice Ellington this afternoon, at which time the issue of bond will be decided.
Ramirez and Velasquez are charged with one count of conspiracy to commit health care fraud, six counts of health care fraud, four counts of wire fraud and three counts of aggravated identity theft.
The indictment alleges the women were employed by the Corpus Christi office of MRNG Inc. doing business as Caring Touch Home Health. During that time, Ramirez and Velasquez allegedly submitted false and fraudulent bills to Medicaid and the managed care organizations known as Evercare of Texas LLC and Superior Health Plan Inc. for home health services that had not been provided. Evercare and Superior received funds from Medicaid to manage the home health care of Medicaid beneficiaries. According to the indictment, from on or about Aug. 1, 2009, through on or about June 15, 2010, Ramirez and Velasquez created false and fraudulent time sheets for current and former Caring Touch employees for home health services that were not provided. The indictment accuses Ramirez and Velasquez of then fraudulently billing Medicaid, Evercare and Superior in the name of Caring Touch for those non-existent services.
The indictment also alleges that in order to personally profit from their fraudulent billings, Ramirez and Velasquez allegedly created payroll records from the fraudulent time sheet which they sent to Caring Tough’s payroll staff. According to the indictment, Ramirez and Velasquez obtained the payroll checks generated from the false and fraudulent time records, forged the signatures of the payees, then cashed the checks and divided the money among themselves. The indictment does not accuse Caring Touch or the employees whose names were used on the false time sheets and checks of any wrongdoing.
The indictment alleges that from or about Aug. 1, 2009, through on or about June 15, 2010, Ramirez and Velasquez submitted and or caused others to submit approximately 628 false and false and fraudulent claims in the approximate aggregate sum of $345,393.41 for home health services which were not provided. As a result, Texas Medicaid, Evercare and Superior paid the approximate aggregate sum of $155,127.72, according to allegations.
Conspiracy to commit health care fraud and each of the six counts of health care fraud carry a maximum punishment of 10 years in federal prison without parole, upon conviction, while the four counts of wire fraud each carries a possible 20 year sentence. All of these charges also include a possible $250,000 fine. If convicted of aggravated identity theft, the defendants will serve a mandatory two-year additional prison term on each count which must be served consecutive to any other prison sentence imposed.
The charges were the result of a joint investigation conducted by officers and agents of the Corpus Christi Police Department, the FBI, Department of Health and Human Services - Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit. Special Assistant United States Attorney Rex Beasley and Assistant United States Attorney Jeffery Preston are prosecuting the case.
A defendant is presumed innocent unless convicted through due process of law.Topeka Man Charged with Producing Child PornRead the Press Release
TOPEKA, KAN. – A Topeka man has been charged with producing child pornography, U.S. Attorney Barry Grissom said today.
Jonathan Kearn, 38, Topeka, Kan., is charged in a federal criminal complaint filed in U.S. District Court in Topeka with one count of producing child pornography, one count of distributing child pornography and one count of possessing child pornography.
The affidavit in support of the criminal complaint says the investigation began in April 2013 when Kearn is alleged to have contacted an investigator working undercover with the Queensland Police Service in Queensland, Australia. Kearn sent the agent photographs of naked children. After being contacted by Australian police, Homeland Security Investigations (HSI) Cyber Crime Center, Child Exploitation Investigations Unit followed an electronic trail leading to Kearn. Investigators served a search warrant at Kearn’s residence in Topeka and seized child pornography.
If convicted, he faces a penalty of not less than 15 years and not more than 30 years on the charge of producing child pornography, not less than 5 years and not more than 20 years on the charge of distributing child pornography and not more than 10 years on the charge of possessing child pornography. Homeland Security Investigations (HSI) investigated. Assistant U.S. Attorney Christine Kenney is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.Timberlake Man Sentenced for Bribery of A Public OfficialRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced today that Senior United States District Judge W. Earl Britt sentenced WILLIAM NEVILLE DOWE, of Timberlake, North Carolina, for Bribery of a Public Official, in violation of Title 18, United States Code, Section 201(b)(2)(C). DOWE was sentenced to 36 months’ imprisonment, followed by a three-year term of supervised release.
The investigation revealed that DOWE worked as a corrections officer at Federal Correctional Institution-Butner, in Butner, North Carolina, from 2006 to September 2012. Between July 2011 and June 2012, DOWE smuggled contraband, including cigarettes, alcohol, pornographic magazines, cellular phones and marijuana, inside the federal institution and sold the contraband to inmates. Agents estimate that DOWE received bribes amounting to approximately $15,000.
The investigation of this case was conducted by the Department of Justice Office of the Inspector General, United States Postal Service, and the North Carolina State Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Kimberly A. Moore.
Three Sentenced in Conspiracy to Commit Visa FraudRead the Press Release
Wilfredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), announced the sentencing of three defendants who had engaged in a visa fraud case.
At today’s sentencing, that U.S. District Judge Jose E. Martinez sentenced Sarah Tipfun to 60 months in prison, to be followed by one year of supervised release. Chatchai Nakornprai, a/k/a Tony, was sentenced to 24 months in prison, to be followed by one year of supervised release. Defendant Boonting Nuampaton, a/k/a Tina, was sentenced to 18 months in prison, to be followed by 1 year of supervised release. The defendants had previously pled guilty to conspiracy to commit visa fraud and bribery, in violation of Title 18, United States Code, Section 371 and 1546, and 201(b)(1)(A).
According to the factual proffer submitted in connection with the plea, Sara Tipfun owned two Thai restaurants in the Treasure Coast and was attempting to obtain fraudulent immigration documents for her employees. During the investigation, an undercover agent (UCA) posing as a corrupt ICE agent who could fraudulently obtain and sell genuine Lawful Permanent Resident Cards (otherwise known as I-551 cards or green cards) was introduced to Tipfun.
From December 2011 to October 11, 2012, Tipfun, Nakornprai, Nuampatona and others arranged for 43 Thai nationals to meet with the UCA in an attempt to buy illegal green cards. The UCA conducted several undercover meetings with others in order to process (i.e., photograph and fingerprint) the aliens and obtain completed I-485 forms (green card applications) from them. All of these meetings were audio-recorded. During these meetings, the UCA was introduced to other restaurant owners who also participated in the scheme. Some of these owners recruited and transported aliens to and from the meetings with the UCA, helped the aliens fill out I-485 forms and gather their immigration documents, lent some of the aliens money to purchase the illegal green cards and, according to Tipfun, charged the aliens additional money on top of the price of the green card for introducing the alien to Tipfun and the UCA.
Mr. Ferrer commended the investigative efforts of ICE-HSI, ICE-ERO, U.S. Marshal’s Office, and the Florida Department of Alcohol and Tobacco. The case is being prosecuted by Assistant U.S. Attorneys Shaniek Maynard, Carmen Lineberger and Antonia Barnes.
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.
Three Defendants Plead Guilty to Participating in Massive Immigration Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York announced that XIA PING WEN, SONG LUO, and XIAO FENG XU, have each pled guilty in connection with a massive immigration fraud scheme involving thousands of asylum applications submitted to immigration authorities by at least 10 law firms. WEN pled guilty on May 7, 2013, before Magistrate Judge Gabriel Gorenstein, and LUO pled guilty on May 10, 2013, before U.S. District Court Judge John G. Koeltl. XU pled guilty today before Magistrate Judge Frank Maas.
Manhattan U.S. Attorney Preet Bharara said: “The United States opens its arms to victims of persecution across the globe, and our asylum laws are the vehicle through which we are able to provide that critical safety net. Those who orchestrate fraud under the asylum laws, like the defendants in this case, make it more difficult for genuine victims, and we will come down hard on them.”
According to the Indictments against WEN, LUO, and XU, and other documents filed in this case:
XU worked as an office manager at a law office in New York, New York, and LUO worked as a paralegal at a law firm also located New York City (collectively the “Law Firms”). The Law Firms fabricated stories of persecution in connection with the asylum applications of clients that often followed one of three fact patterns: (a) forced abortions performed on women pursuant to China’s family planning policy; (b) persecution based on the client’s belief in Christianity; or (c) political or ideological persecution, typically for membership in China’s Democratic Party or Falun Gong. Since 2006, the Law Firms have submitted more than 1,000 asylum applications. XU, LUO, and other employees at the Law Firms, profited by creating and submitting these asylum applications on behalf of Chinese alien applicants. WEN provided various services to the Law Firms, and other law firms, including selling fake documents in aid of the fraudulent asylum applications.
LUO, XU, and WEN each pled guilty to one count of conspiring to commit immigration fraud, and each face a maximum of five years in prison. LUO, 34, of Queens, New York, is scheduled to be sentenced by U.S. District Court Judge John G. Koeltl on September 20, 2013. XU, 57, of Queens, New York, and WEN, 49, of New York, New York, are scheduled to be sentenced by U.S. District Court Judge Sidney H. Stein on September 19, 2013.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation (“FBI”) and the United States Citizenship and Immigration Services (“USCIS”).
The prosecution is part of “Fiction Writers,” a joint investigation led by the United States Attorney’s Office for the Southern District, the FBI, and the USCIS. To date, 29 defendants have been charged with participating in nine separate but overlapping immigration fraud schemes in New York City, including eight lawyers. Seven defendants have now been convicted. The charges against the remaining defendants are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The prosecution is being handled by the Office’s Organized Crime Unit. Assistant U.S. Attorneys Harris Fischman, Robert Boone and Brian Blais are in charge of the prosecution.
U.S. v. Xia Ping Wen Indictment
U.S. v. Xiao Feng Xu Indictment
U.S. v. Xiao Feng Xu IndictmentStorm Lake Man Sentenced to Federal Prison for Methamphetamine ConspiracyRead the Press Release
A man who conspired to manufacture and distribute methamphetamine was sentenced May 10, 2013, to more than five years in federal prison.
Rodney Brock, 43, from Storm Lake, Iowa, received the prison term after a February 7, 2013, guilty plea to conspiring to manufacture and distribute methamphetamine.
At the guilty plea, Brock admitted his involvement in a conspiracy from about July 2011 through October 2012 that manufactured and distributed at least 50 grams of actual (pure) methamphetamine. According to pseudoephedrine purchase logs obtained in the investigation, starting in July 2011 through October 2012 Brock himself acquired at least 34.9 grams of pseudoephedrine for the manufacture of methamphetamine, and associates of Brock acquired at least 55 grams of pseudoephedrine for the manufacture of methamphetamine by Brock. On July 5, 2012, law enforcement officers executed a search warrant at Brock’s residence and seized a number of items indicative of methamphetamine manufacturing.
Brock was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Brock was sentenced to 66 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
Brock is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Storm Lake Police Department, Buena Vista County Sheriff’s Office, Clay County Sheriff’s Office, and the Iowa Division of Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 12-4097.
Somerset Optometrist and Eye Care Group Sued for Medicare and Medicaid FraudRead the Press Release
CITY, KY - The U.S. Attorney’s Office filed a lawsuit today against a Somerset optometrist and his practice group, alleging that Dr. Philip Robinson and Associates in Eye Care P.S.C., defrauded the Medicare and Medicaid programs.
The lawsuit alleges that the defendants sought and received payment from Medicare and Medicaid for unnecessary eye examinations and for services Robinson didn’t provide.
According to the complaint, Robinson frequently visited area nursing homes and often claimed to treat more than 100 nursing home patients in a single day. The complaint alleges that on certain dates, these services would have required more than 20 hours’ worth of direct patient care per day, and that Robinson was not working inside these nursing homes more than 8 hours per day.
The complaint also claims that the defendants sought payment for routine monthly eye examinations that were unreasonable and unnecessary given the patients’ conditions. Many nursing home patients received an eye examination from Robinson every four to five weeks for five years or more. At times, Robinson billed Medicare for certain eye examinations more than any other optometrist in the United States.
The complaint accuses the defendants of violating the False Claims Act. If found liable, the defendants would face financial penalties between $5,500 and $11,000 per false claim, and would have to repay Medicare and Medicaid three times the amount of the U.S. Government’s loss for the fraud.
“Under the guise of caring for nursing home residents, these defendants exploited the Medicare and Medicaid programs,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “Individuals paying for eye care with money from their own pocket would not be expected to pay a doctor to simply monitor their vision with a monthly exam, especially if the exams were as brief and superficial as what Robinson provided. Health care programs funded with taxpayer dollars are no different.”
The investigation preceding the complaint was conducted by agents with the Department of Health and Human Services, Office of Inspector General and the Kentucky Attorney General’s Medicaid Fraud and Abuse Control Unit. Assistant U. S. Attorney Paul McCaffrey will represent the U.S. Attorney’s Office in this case.
Sheldon Harmon Pleads Guilty to Bank Fraud, Money Laundering and False Statements to a BankRead the Press Release
Formerly of Ridgefield, Washington, Defendant Admits to Fraudulent Loan Applications Totaling $3.825 Million Dollars to Umpqua BankPORTLAND, Ore. - Sheldon Harmon, formerly of Ridgefield, Washington now of St. George, Utah pled guilty before U.S. District Judge Marco A. Hernandez today to one count of bank fraud, one count of false statements to a bank, and two counts of money laundering.
Harmon refinanced a commercial real property located in Vancouver, Washington through Umpqua Bank’s commercial lending in Beaverton, Oregon. To qualify for the loan, Harmon submitted several false leases to Umpqua Bank indicating that multiple tenants were renting approximately 90% of the commercial property and paying rent to Harmon of almost $70,000 per month. During the underwriting process, Harmon had business signs for the tenants made and hung them outside office space in the building and during a tour of the building, showed Umpqua Bank’s representatives where the tenants purportedly worked. In fact, none of the tenants were leasing the office space in the building as represented by Harmon and not one of them had made a lease payment to Harmon. Based on Harmon’s misrepresentations, Umpqua loaned him $3.825 million dollars and Harmon took out cash proceeds of over $1 million. Harmon admitted that he laundered over $500,000 of the loan proceeds through his bank account.
“Individuals who steal from financial institutions through deception will be prosecuted by this office. We will not permit the integrity of our banking system to be manipulated by cheats,” said U.S. Attorney Amanda Marshall. Marshall thanked the Internal Revenue Service and the United States Postal Service for their combined investigative efforts.
“Lying to a bank in order to trick them into giving you other people’s money is criminal and runs counter to ideals, like honesty and fair dealing, which are essential to the strength of our financial system,” said Steven J. Bellis, Assistant Special Agent in Charge of IRS Criminal Investigation in Oregon. “I am pleased that IRS Special Agents bring their unique expertise in following the money to cases like this in order to help hold people engaging in fraud accountable for their actions.”
Bank fraud and false statements to a bank carry a maximum term of 30 years in prison. Money laundering carries a maximum penalty of 10 years. Sentencing is set for August 12, 2013.
This investigation was conducted by Special Agents Abraham Smith and Nicholas Warner at the Internal Revenue Service - Criminal Investigation and the United States Postal Inspection Service. This case is being prosecuted by Assistant U.S. Attorneys Michelle Kerin and Katie Lorenz.
Seven Sentenced in Meth CasesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
ELKINS, WEST VIRGINIA - Eight individuals were recently sentenced in United States District Court in Elkins by Chief Judge John Preston Bailey, with seven of the sentencings related to the manufacture of methamphetamine.
According to United States Attorney William J. Ihlenfeld, II, the following individuals appeared before Judge Bailey for sentencings:
RICHARD WAYNE WEAVER, age 38, of Horner, West Virginia, was sentenced to 135 months imprisonment to be followed by six years of supervised release. WEAVER entered a plea of guilty on September 18, 2012, to “Conspiracy to Manufacture, Possess with Intent to Distribute and Distribute Methamphetamine from May of 2011 to July of 2012 in the Northern District of West Virginia.” WEAVER was remanded to the custody of the United States Marshal pending designation to a Federal institution. The case was investigated by the Upshur County Sheriff’s Department, the Buckhannon Police Department and the United States Marshals Service.
ROBERT ALLEN COOK, age 49, of Moorefield, West Virginia, was sentenced to 78 months imprisonment to be followed by three years of supervised release. COOK entered a plea of guilty on November 30, 2012, to “Possession of Material Used in the Manufacture of Methamphetamine” for conduct that occurred in January of 2012, in Hardy County. CHAMP, who is free on bond, will self-report to the designated Federal institution. The case was investigated by the West Virginia State Police, the Hardy County Sheriff’s Department and the Moorefield Police Department.
ANDREW CARR, age 18, of Lahmansville, West Virginia, was sentenced to 48 months imprisonment to be followed by three years of supervised release. CARR entered a plea of guilty on December 11, 2012, to “Possession of Material Used in the Manufacture of Methamphetamine.” CARR, who is free on bond, will self-report to the designated Federal institution. This case was investigated by the Grant County Sheriff’s Department, the West Virginia State Police-BCI and United States Forest Service/Homeland Security Investigations.
STEVEN B. MILLER a/k/a “PASCO,” age 40, of Dryfork, West Virginia, was sentenced to 57 months imprisonment to be followed by three years of supervised release. MILLER entered a plea of guilty on December 11, 2012, to “Possession of Material Used in the Manufacture of Methamphetamine.” MILLER, who is free on bond, will self-report to the designated Federal institution. This case was investigated by the Randolph County Sheriff’s Department, the West Virginia State Police-BCI and United States Forest Service/Homeland Security Investigations.
PAULA LYNN CHAMP, age 30, of Purgitsville, West Virginia, was sentenced to 33 months imprisonment to be followed by three years of supervised release. CHAMP entered a plea of guilty on November 30, 2012, to “Possession of Material Used in the Manufacture of Methamphetamine” for conduct that occurred in January of 2012, in Hardy County. CHAMP, who is free on bond, will self-report to the designated Federal institution. The case was investigated by the West Virginia State Police, the Hardy County Sheriff’s Department and the Moorefield Police Department.
ARCHIE RAY ARBOGAST, age 36, of Durbin, West Virginia, was sentenced to five years probation, with the first six months being under home confinement. ARBOGAST entered a plea of guilty on December 11, 2012, to “Possession of Material Used in the Manufacture of Methamphetamine.” This case was investigated by the Randolph County Sheriff’s Department, the West Virginia State Police-BCI and United States Forest Service/Homeland Security Investigations.
KELLEY LEIGH COHENOUR, age 35, of Marlinton, West Virginia, was sentenced to five years probation. COHENOUR entered a plea of guilty on February 7, 2013, to “Possession of Material Used in the Manufacture of Methamphetamine.” This case was investigated by the West Virginia State Police (Pocahontas County Detachment), the Pocahontas County Sheriff’s Office and the Pocahontas County Community Corrections.
These cases were prosecuted by Assistant United States Attorney Stephen D. Warner. LAWAN GADDY, age 24, of Lewis County, West Virginia, was sentenced to 21 months
imprisonment to be followed by three years of supervised release. GADDY entered a plea of
guilty on December 14, 2012, to “Providing a False Statement to a Federal Firearms Licensee in the Acquisition of a Firearm” on September 20, 2011. GADDY, was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was prosecuted by Assistant United States Attorney Zelda E. Wesley and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Weston Police Department.Salinas Realtor Sentence to 14 Months Imprisonment for Tax EvasionRead the Press Release
SAN JOSE, California – Cheryl Savage was sentenced last week to 14 months in prison, and ordered to pay a $10,000 fine and $123,463 in restitution for tax evasion, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in José M. Martinez announced.
Savage, age 57, of Monterey, California, pleaded guilty on September 12, 2012. According to court documents, Savage has been a realtor since 1981, becoming a broker in 1988 when she opened Steinbeck ERA Realty, a real estate brokerage in Salinas, California. On her business website, Savage describes herself as knowledgeable in 1031 Tax Deferred Exchanges. A 1031 Tax Deferred Exchange occurs when a taxpayer sells rental property and reinvests the sales proceeds in replacement rental property. In this way, a taxpayer can defer the recognition of capital gains tax until the replacement rental property is sold.
In 2004 Savage sold two rental properties, realizing $777,014 taxable gain. Savage used those sales proceeds to purchase her primary residence at Via Del Milagro in Monterey, California. In October 2005, she filed her 2004 federal income tax return falsely reporting that the proceeds from the sale of her rental properties were used to purchase a replacement rental property. Savage also falsely reported that she had received rental income from Via Del Milagro. The rental payments Savage reported on Schedule E of her 2004 federal income tax return were actually from a tenant who leased another property Savage owned.
Savage was charged by a federal grand jury on October 4, 2011 with three counts of tax evasion. She pleaded guilty to one count.
The case is being prosecuted Assistant U.S. Attorney Cynthia Stier. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Salina Man Sentenced to 6+ Years on Drug, Gun ChargesRead the Press Release
TOPEKA, KAN. – A Salina man has been sentenced to 78 months in federal prison on drug trafficking and firearms charges, U.S. Attorney Barry Grissom said today.
Chris Alan Martin, 46, Salina, Kan., pleaded guilty to one count of possession with intent to distribute methamphetamine, one count of possession of a firearm in furtherance of drug trafficking and one count of unlawful possession of a firearm after a felony conviction. After investigators arranged to buy methamphetamine from Martin, the I-70 Drug Task Force obtained a search warrant for his residence in Salina. Investigators seized methamphetamine and three handguns. Martin was prohibited by federal law from possessing a firearm following a 2008 felony conviction for possession of methamphetamine.
Grissom commended the I-70 Drug Task Force and Assistant U.S. Attorney Randy Hendershot for their work on the case.
Rochester Man Sentenced for Selling Fake Christmas OrnamentsRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Hakan Umsu, 32, of Rochester, N.Y., who was convicted of criminal copyright infringement involving Christmas ornaments that he was selling at kiosks in local malls, was sentenced to one year probation by U.S. District Court Judge Richard J. Arcara.
Special Assistant U.S. Attorney Fauzia K. Mattingly, who handled the case, stated that Umsu had obtained the ornaments from a company in China which were replicas of the copyright-protected holiday ornaments created by Rudolph & Me, Inc., a family-owned company located in Sarasota, FL. The defendant then sold the ornaments at kiosks in local malls during the retail holiday season.
The sentencing is the result of an investigation by Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge, James C. Spero.Rochester Man Pleads Guilty to Fraud and Money Laundering ConspiraciesRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Kenneth M. Griffin, 45, of Rochester, N.Y., pleaded guilty before U.S. District Judge Frank P. Geraci, to conspiring to commit mail and wire fraud and conspiring to engage in money laundering activities. The charges carry a maximum penalty of 20 years in prison, a fine of $500,000 or both.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that the defendant owned and controlled an employment staffing business that he operated under various names, including LHT USA, Inc., and Cambridge Personnel, Inc. From August 2007 to June 2008, Griffin conspired with others to commit mail and wire fraud, and also to launder their ill-gotten gains, which totaled more than $500,000. Among other things, the fraud involved creating false invoices and other supporting documents that the defendant then sold to a series of financing companies on a weekly basis for immediate cash. When a financing company realized that it had been sold uncollectible invoices and stopped dealing with Griffin's business, the defendant would change business names and continue the scheme with another financing company.
For example, on April 15, 2008, $19,000 worth of false invoices were issued for Griffin's business, Cambridge Personnel. The invoices claimed that the defendant had provided services to various customers which he had not. Griffin then sold these false invoices to New Century Financial, the third and final victim of his scheme.
To conceal his involvement in the conspiracy, Griffin created corporations such as LHT USA and Cambridge Personnel, and put those corporations in the names of nominee owners. The defendant further concealed his involvement by laundering the proceeds of the fraud by using the services of a debit card company known as Comdata Corporation. Griffin and his co-conspirators created and used an account at Comdata to receive the proceeds of their fraud, and to conceal their ownership and control over these proceeds. They concealed their control and ownership over the fraudulently obtained money by transferring the funds on to Comdata debit cards, which are anonymous on their face. Griffin then provided these anonymous Comdata cards to lower-level employees with directions to go to ATMs around the Rochester area to withdraw cash and then return the cash to defendant.
“This case is another example of why it is so important for all to know who they are doing business with,” said U.S. Attorney Hochul. “Fraud costs American businesses and individuals literally billions of dollars each and every year. While this Office will continue to vigorously investigate and prosecute fraud wherever it occurs, still the best defense is for our citizens to guard against letting it happen in the first place. For more information on how to protect yourself, visit the www.Stopfraud.gov website, or contact our Office day or night.”
The plea is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-in-Charge Toni M. Weirauch, and Special Agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel.
Sentencing is scheduled for August 28, at 9:30 a.m. before Judge Geraci.