Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Wednesday 3 April 2013
Indictments Returned in Hammond Federal CourtRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana—The United States Attorney’s Office announced that the following Indictments were returned on April 3, 2013:
Eugene Jackson, Jr., 32, of Gary, Indiana, was charged with possession of a firearm by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force.This case has been assigned to and will be prosecuted by Assistant United States Attorney Dean Lanter.
Terrance Winton, 48, of Merrillville, Indiana, was charged with possession with the intent to distribute crack cocaine.This charge was filed as the result of an investigation by the Federal Bureau of Investigation GRIT Task Force.This case has been assigned to and will be prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
Sammy Earl Jones, 29, of Gary, Indiana, was charged with possession of a firearm by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case has been assigned to and will be prosecuted by Assistant United States Attorney Thomas McGrath.
Simmuel Lamont Mobley, 45, of Gary, Indiana, was charged with possession of a firearm and ammunition by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case has been assigned to and will be prosecuted by Assistant United States Attorney Thomas McGrath.
Joseph Jamel Smith, 20, of Chicago, Illinois, was charged with possession of a firearm by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case has been assigned to and will be prosecuted by Assistant United States Attorney Thomas McGrath.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
Indictment: Sales of Marijuana Substitute K2 Made Kansas Men More Than $3 MillionRead the Press Release
TOPEKA, KAN. – Three Kansas men who launched a global sales and supply network for a synthetic version of marijuana have been charged with violating the federal Food, Drug and Cosmetic Act, U.S. Attorney Barry Grissom said today.
A 64-page federal indictment alleges the men began selling K2 – named after the second-highest mountain in the world – at a shop in Lawrence, Kan., and quickly expanded the business to encompass a chain of suppliers, retailers, wholesalers and business associates that reached to California; Massachusetts; New Jersey; Portland, Oregon; Las Vegas, Nev.; Indianapolis, Ind.; Argentina; Latvia, Germany, Lithuania, United Kingdom, Ukraine, Netherlands, Canada, Sweden, Singapore, Thailand and Uruguay.
The indictment also alleges the defendants unlawfully smuggled and distributed a Chinese-made diet drug called Que She.
Named in the indictment are:
Bradley Miller, 55, Wichita, Kan., who was part owner of Persephone’s Journey, a retail store in Lawrence, Kan., and Bouncing Bear Botanicals, ostensibly a wholesaler of herbs and botanical products. Bouncing Bear Botanicals was located in the basement of Persephone’s Journey and then moved to a warehouse in Oskaloosa, Kan. Miller developed recipes for K2 and manufactured it.
Clark Sloan, 54, Tonganoxie, Kan., Miller’s brother, who developed and monitored the Bouncing Bear Botanical Web site and worked in marketing and Internet technologies.
Jonathan Sloan, 32, Lawrence, Kan., Clark Sloan’s son, who was co-owner with Miller of Persephone’s Journey and Bouncing Bear Botanicals.Each of them is charged with the following:
One count of conspiracy to distribute a misbranded drug
One count of distributing K2, which is a misbranded drug.
One count of distributing Que She, a misbranded drug.
Eighteen counts of mail fraud.
One count of smuggling Que She into the United States
One count of smuggling K2 out of the United States
One count of smuggling Que She out of the United States
One count of conspiracy to commit money laundering.The indictment alleges:
– The defendants manufactured and distributed K2 as an “all natural product” but it contained synthetic chemicals called JWH Compounds that mimic the effects of the THC in marijuana. Their products also contained solvents, either the alcohol Everclear or acetone, as well as other additives.
– They manufactured and sold at least four types of K2 products: Standard, Citron, Blonde and Summit, with Standard being the least potent and Summit being the most potent, depending on the amount of JWH Compounds that were mixed with herbs. The defendants manufactured the K2 without quality controls, resulting in inconsistent potencies.
– They intended K2 products to be smoked like marijuana by recreational drug users, but they falsely referred to K2 products as aromatic incense and falsely labeled them as “not for consumption.” On Sacred Journey’s Facebook page they promoted what they called “K2 Smoke” as follows: “Ask about our new K2 smoke :) K2 = the second highest peak in the world :) Enjoy your journey!”
– Miller and Jonathan Sloan mailed samples of K2 to retail stores along with brochures and pricing information. They gave out free samples of K2 on what they called “Sample Sundays.”
The indictment quotes from e-mails the defendants sent and received including the following:
– “I made a new batch...If this flies pretty fast, maybe we can make half a million or so real quick and then bail.”
– “We could name the whole line off of mountains. The higher the strength, the higher the mountain.”
– “Big shipments of some weird substance are going to raise lotsa red flags...As soon as they figure out that it gets people high – BOINK – illegal.”
– “I know that money looks good...But I think it is walking a shaky line. Playing one step ahead of the feds is whacked out.”Upon conviction, the crimes carry the following penalties:
Conspiracy: A maximum penalty of five years in federal prison and a fine up to $250,000.
Distributing misbranded K2 or misbranded Que She: A maximum penalty of three years and a fine up to $250,000.
Mail fraud: A maximum penalty of 20 years and a fine up to $250,000 on each count.
Smuggling Que She into the United States: A maximum penalty of 20 years and a fine up to $250,000.
Smuggling Que She or Que She out of the United States: A maximum penalty of 10 years and a fine up to $250,000.
Conspiracy to commit money laundering: A maximum penalty of 20 years and a fine up to $500,000.The Food and Drug Administration investigated. Assistant U.S. Attorney Tanya Treadway is prosecuting.
Illinois Business Owner Indicted for $3 Million Scheme to Sell Foreign Versions of BotoxRead the Press Release
KANSAS CITY, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Alton, Ill., business owner was indicted by a federal grand jury today for distributing more than $3 million worth of foreign Botox and Juvederm in the United States.
Christopher Carstens, 47, of Alton, and his company, Orthopaedic Solutions, Inc., were charged in a nine-count indictment returned by a federal grand jury in Kansas City for violations of the Federal Food, Drug and Cosmetic Act.
Today’s indictment alleges that Carstens and Orthopaedic Solutions distributed approximately 5,879 units of a foreign version of the prescription drug Botox and a foreign version of the prescription device Juvederm through their sales representatives to doctors or other health care professionals in the United States between 2008 and 2011, at a retail value of approximately $3,058,183.
Juvederm is a clear, biodegradable gel implant that is injected into the skin to correct wrinkles and folds.
Carstens and Orthopaedic Solutions are charged with one count of mail fraud because they executed their scheme by distributing foreign Botox (which the FDA had not approved for distribution in the United States) via FedEx and attempted to hide their fraudulent scheme from doctors and health care professionals. Carstens and Orthopaedic Solutions are charged with one count of distributing an unapproved new drug across state lines because they had not received approval to import or distribute the foreign version of Botox in the United States. Carstens and Orthopaedic Solutions are charged with one count of distributing a misbranded drug across state lines because the foreign Botox labeling failed to bear the statement “Rx only.”
Carstens and Orthopaedic Solutions are charged with three counts of distributing an adulterated device across state lines because the foreign versions of Juvederm lacked FDA approval for distribution in the United States. Carstens and Orthopaedic Solutions are charged with three counts of distributing a misbranded device across state lines because the Juvederm 3 labeling failed to bear adequate directions for use or appropriate warnings.
Today’s indictment also contains a forfeiture count, which would require Carstens and Orthopaedic Solutions to forfeit to the government any property derived from the proceeds of the scheme, including a money judgment of $3,058,183.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the U.S. Food and Drug Administration, Office of Criminal Investigation.Hermosa Man Sentenced for Assault and EscapeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Hermosa, South Dakota man convicted of two counts of Assault Resulting in Serious Bodily Injury and one count of Escape, charged in two separate criminal cases, was sentenced on April 1, 2013 by U.S. District Judge Roberto A. Lange.
Barry Allman, age 22, was sentenced to 84 months in custody, 2 years of supervised release, and a $200 special assessment to the Victim Assistance Fund for the two counts of Assault Resulting in Serious Bodily Injury. Allman was sentenced to 12 months in custody on the Escape conviction, of which 6 months are consecutive and 6 months are concurrent with the assault conviction, and a $100 special assessment to the Victim Assistance Fund.
The assault conviction stems from an incident that took place on May 3, 2012 in Parmelee. While at a social gathering, Allman fired a 9mm handgun three times into the ground. Two of the rounds ricocheted and caused serious bodily injury to the victims.
The Escape conviction stems from an incident that took place on November 26, 2012 when Allman was released on a furlough from federal custody to attend a funeral. Allman failed to return as ordered, and absconded until he was apprehended on December 18, 2012.
The investigations were conducted by the Federal Bureau of Investigation, U.S. Marshal Service, Rapid City Police Department, and the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
Allman was remanded to the custody of the U.S. Marshal.
Hartford Man Sentenced to More Than Nine Years in Prison for Illegal Possession of A FirearmRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, announced that ALEXANDER GARAY, 36, of Hartford, was sentenced today by United States District Judge Vanessa L. Bryant in Hartford to 115 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, on May 22, 2012, GARAY was arrested after he engaged Hartford police officers in a car chase during which he nearly hit an officer, threw bags of heroin out of his car window and forced another individual’s vehicle off the road. A subsequent search of GARAY’s vehicle revealed a Taurus 9 millimeter pistol and an additional quantity of heroin.
The firearm GARAY possessed had been reported stolen from its legal owner in 2006.
Prior to May 2012, GARAY had been convicted of multiple felony offenses, including weapon in a motor vehicle (twice), criminal possession of a firearm, sale of hallucinogens/ narcotics, possession of narcotics (twice), and stealing a firearm.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
GARAY has been detained since his arrest by Hartford Police on May 22, 2012. On January 23, 2013, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the Hartford Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant United States Attorneys Jonathan S. Freimann and Michelle McConaghy.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Four Individuals, Including Two Utahns, Charged with Smuggling Peruvian Artifacts into United StatesRead the Press Release
SALT LAKE CITY -- A federal grand jury returned an indictment Wednesday morning charging four individuals, including two residents of West Valley City, Utah, with smuggling Peruvian artifacts into the United States and interstate transportation of the stolen property.
Charged in the indictment are Cesar Guarderas, age 70, and Rosa Isabel Guarderas, age 45, both of West Valley City and Javier Abanto-Sarmiento, age 39, and Alfredo Abanto-Sarmiento, age 36, both of Trujillo, Peru. Both West Valley City residents are naturalized U.S. citizens.
According to a complaint filed in the case, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) special agents initiated an investigation of Javier Abanto-Sarmiento and Cesar Guarderas in October 2012. Abanto-Sarmiento is the brother of Isabel Guarderas. Using an undercover agent, two Peruvian artifacts were purchased from Cesar Guarderas in November. Guarderas was given $3,000 at that time as a down payment for the two artifacts. The complaint alleges Guarderas represented the artifacts to be authentic, not replicas. Ten additional artifacts were purchased from Guarderas for $20,000 in November. The artifacts were examined by Utah Valley University and Tulane University professors, who are experts in the region and cultural time period. They were also tested at a laboratory in Washington. The artifacts were determined to be authentic.
According to the complaint, undercover telephone, e-mail and in-person discussions during the investigation corroborate the artifacts trafficking conspiracy between Javier Abanto-Sarmiento and Cesar Guarderas. Cesar Guarderas said Javier Abanto-Sarmiento had access to more than 100 pieces of pottery in Peru and was willing to ship them to the United States. Abanto-Sarmiento stated that he bribes officials in Peru to get the artifacts out of the country. Guarderas said Abanto-Sarmiento knows where to look for pottery buried in the ground and that he acquired some of his pottery using this method. Guarderas also said that Abanto-Sarmiento had a contact with the National Institute of Culture in Peru who provides him with authentic certifications stating that the pottery are replicas and Guarderas said that Abanto-Sarmiento uses the certifications to illegally export genuine artwork from Peru.
In December, HSI special agents in Salt Lake City detained a parcel originating from Peru and destined for the Guarderas residence in West Valley City. Special agents, who had a warrant to inspect the package, discovered eight artifacts inside the box. Special agents went to the Guarderas home a few days later and, according to the complaint, Guarderas, turned over eight additional artifacts from his garage. HSI special agents also have received an additional nine artifacts that were purchased by the undercover agent from Abanto-Sarmiento and shipped from Peru.
Abanto-Sarmiento was arrested by HSI special agents in Miami on March 4, 2013, as he flew into the United States from Peru. He is in custody and is being transferred to Salt Lake City by U.S. Marshals.
Cesar and Isabel Guarderas were arrested March 25, 2013, on a complaint. Federal prosecutors did not seek detention and the two were released. They are scheduled for arraignment Friday at 10:45 p.m. before U.S. Magistrate Judge Brooke C. Wells.
Alfredo Abanto-Sarmiento, who is in Peru, has not been arrested.
The potential maximum penalty for smuggling goods into the United States is up to 20 years in prison. Interstate transportation of stolen property carries a potential 10-year sentence. Each count has a potential fine of $250,000.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by HSI special agents.
In 1997, the United States and Peru, pursuant to the UNESCO Convention and the enactment of the U.S. Cultural Property Implementation Act, entered into a bi-lateral agreement prohibiting the importation into the United States of specific cultural property originating from Peru, including artifacts and ethnological religious objects.
HSI plays a leading role in criminal investigations that involve the illegal importation and distribution of cultural property, including the illicit trafficking of cultural property, especially objects that have been reported lost or stolen. Specially trained HSI special agents, assigned to both domestic and international offices, partner with governments, agencies and experts to protect cultural antiquities. Since 2007, HSI has repatriated more than 6,600 items representing the cultural heritage of more than 24 countries.
Four Akron Residents Indicted for Conspiracy Involving Student Financial Aid and Fake G.E.D. CertificatesRead the Press Release
Four Akron residents have been indicted for their roles in a conspiracy in which some used fake G.E.D. certificates to enroll in the University of Akron and fraudulently obtain more than $104,000 in financial aid, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Lori A. Martin, age 46, Raheem J. Martin, age 40, Teresa K. Scott, age 34, and Tina M. Mileca, age 34, are charged with conspiracy to commit mail fraud and wire fraud.
“These defendants cut corners to get money to which they were not entitled,” Dettelbach said. “Our office will continue to prosecute those who defraud the federal government.”
The defendants conspired to obtain federal student financial aid money to which the recipients were neither eligible nor entitled by creating and submitting fake Official Transcripts falsely reporting General Educational Development test results and the awarding of G.E.D. certificates for persons who had not earned and did not have such certificates, according to the indictment.
The defendants submitted these fake documents to the University of Akron to gain admission to the university and, thereby, access to the federal funds. The defendants used the grant and loan money they received to pay for living expenses and other personal expenditures, as well as costs associated with attending the University of Akron, according to the indictment.
The conspiracy took place from August 2006 through September 2011, according to the indictment.
Lori Martin created fake Official Transcripts that reported test results and the awarding of G.E.D. certificates for Raheem Martin, Scott and Mileca. She also helped them complete online applications to the University of Akron and student aid, according to the indictment.Scott and Mileca each paid $200 each to Lori Martin for the fake G.E.D. Official Transcript, according to the indictment.
Lori and Raheem Martin obtained more than $76,100 in Pell Grants and federally insured loans from these activities. Scott received more than $23,800 in Pell Grants and federally insured loans while Mileca obtained at least $4,600, according to the indictment.
As a result of the conspiracy, the Department of Education was defrauded and sustained a total loss of at least $104,611, according to the indictment.
This case was investigated by Special Agents of the Department of Education, Office of Inspector General, located in Ann Arbor, Michigan, and the University of Akron Police Department, with the assistance of the Akron Police Department.
If convicted, the defendants’ sentences will be determined by the Court after review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ roles in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant United States Attorney Rebecca Lutzko.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Stock Broker Pleads Guilty in Manhattan Federal Court to Insider Trading ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that THOMAS C. CONRADT, a former stock broker at a securities trading firm (“Securities Trading Firm-1”), pled guilty today in Manhattan federal court to charges arising from his involvement in an insider trading scheme. The alleged scheme involved the misappropriation of material, non-public information (“Inside Information”) concerning IBM’s acquisition of a software company, SPSS, Inc., in 2009. CONRADT was charged in November 2012, and pled guilty today before U.S. District Judge Andrew L. Carter, Jr. pursuant to a cooperation agreement.
According to the Indictment to which CONRADT pled guilty, statements made during the plea proceeding, and other court documents:
The Inside Information concerning IBM’s acquisition of SPSS originated from a corporate lawyer who was part of the legal team that represented IBM in the transaction (“Attorney-1”) in 2009. On May 31, 2009, Attorney-1 shared Inside Information concerning the transaction, including the names of the parties and the fact that IBM was going to acquire SPSS for a significant premium over its market price, with his close friend, Trent Martin, a former research analyst at an international financial services firm. The information was shared in confidence and, based on their longstanding history of sharing confidences, Attorney-1 expected that Martin would not share the information or use it to trade.
However, in June and July 2009, Martin bought SPSS common stock and call option contracts based on the Inside Information he was given by Attorney-1 and, in turn, shared the tip with his roommate, CONRADT, who worked as a stock broker at a securities trading firm (“Securities Trading Firm-1”). In June and July 2009, CONRADT bought SPSS common stock and tipped David J. Weishaus, his co-worker at Securities Trading Firm-1, who also bought SPSS common stock and call options. CONRADT and Weishaus also tipped their co-workers at Securities Trading Firm-1 (“CC-1 and CC-2”), who then bought SPSS call option contracts. When IBM announced its acquisition of SPSS on July 28, 2009, the share price of SPSS common stock rose by 41% in one day. Thereafter, Martin, CONRADT, Weishaus, CC-1, and CC-2 sold their SPSS positions, yielding total profits of approximately $1 million.
CONRADT, 35, of Denver, Colorado, pled guilty to one count of conspiracy to commit securities fraud and two counts of securities fraud. The conspiracy count carries a maximum sentence of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The securities fraud counts each carry a maximum sentence of 20 years in prison and a maximum fine of $5 million. As part of his plea agreement, CONRADT agreed to forfeit his share of the proceeds obtained from the offense. He is scheduled to be sentenced by Judge Carter on October 3, 2013.
Weishaus is next scheduled to appear before Judge Carter on June 5, 2013. Martin was arrested in in Hong Kong in December 2012 pursuant to a request from the United States and extradited to the United States in March 2013. Martin is next scheduled to appear before Judge Carter on April 10, 2013. The charges against Weishaus and Martin are merely accusations. They are presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the FBI. He also thanked the U.S. Securities and Exchange Commission. Mr. Bharara noted that the investigation is continuing.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John T. Zach and David B. Massey are in charge of the prosecution.
U.S. v. Thomas C. Conradt and David J. Weishaus Indictment
Former SSA Executive Sentenced to 15 Months in Prison for Embezzling over $400,000 and Tax EvasionRead the Press Release
Baltimore, Maryland - U.S. District Judge J. Frederick Motz sentenced Salvatore Petti, age 76, of Ellicott City, Maryland today to 15 months in prison followed by three years of supervised release for evading payment of taxes on income earned from a Social Security Administration (SSA) employee association and embezzling funds from the association. Judge Motz also entered an order that Petti: forfeit approximately $83,000 in proceeds held in bank accounts, and from the sale of a personal seat license for the Baltimore Ravens and three Marriott timeshares; and pay restitution totaling $570,493 - $299,724 to the employee association for the funds he embezzled; and $270,769 to the IRS for unpaid taxes from 1998 through 2009.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“There are serious consequences for this type of criminal conduct,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington, D.C. Field Office. “Mr. Petti’s act of intentionally under-reporting income on his federal tax returns is unlawful. Today’s sentence demonstrates the collaborative effort between IRS Criminal Investigation and its federal law enforcement partners in bringing individuals to justice who choose to engage in any financial scheme to defraud the American public.” Petti worked for the SSA for more than 40 years, retiring in 1995 as a District Director. He also served as the treasurer for the Employees Activities Association (EAA) of the SSA, located in Woodlawn, Maryland. The EAA provided social, recreational, welfare, health and athletic activities for its members, the employees of the SSA. EAA was comprised of multiple entities, including two for-profit and three non-profit entities. Between 2005 and 2008, Petti earned an annual salary from the EAA of approximately $60,000.
According to his plea, in 2009, the SSA Office of Inspector General audited the EAA and discovered that Petti had not reported any EAA income to the IRS between 2006 and 2008. Indeed, by February 2009, Petti had not reported to the IRS any EAA income from at least 1998 through 2009. Petti was also able to evade paying taxes on his salary from EAA by classifying himself as an independent contractor, when he in fact knew that he should have been classified as an employee. Unlike other employees of EAA who had income, Social Security, and Medicare taxes withheld from their paychecks, Petti did not. Even though he classified himself as an independent contractor, Petti did not issue himself a Form 1099, he did not send the IRS a Form 1099 showing the income he received, and he did not report his EAA income to the IRS when he filed his false tax returns.
The auditors told Petti in February 2010 that Petti’s EAA income would be reported to the IRS. The next month, Petti filed amended tax returns for the years 2006 through 2009, reporting his EAA salary. Petti, however, included false expenses for purported “office expenses,” “supplies,” “travel” and “utilities.”
Further investigation revealed that Petti was embezzling substantial funds from the EAA. Between 2005 and 2009, in addition to the $60,000 salary he was entitled to receive, Petti issued unauthorized checks to himself, which he falsely classified as “administrative expenses” and “general expenses,” in order to conceal his theft from EAA. Additionally, because Petti knew that the outside accounting firm audited the non-profit entities but not the for-profit entities, Petti issued the checks to himself from the for-profit entities’ bank accounts in order to hide the unauthorized income from the accounting firm. By doing so, Petti was able to hide approximately $416,000 of unauthorized payments to himself between 2005 and 2009. Petti did not report the $416,134 of additional, unauthorized income on either his original tax returns for years 2005 through 2009, nor on his amended tax returns in 2006 through 2009.
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 SSA - OIG for its assistance in the case. Mr. Rosenstein commended the IRS Criminal Investigation for its work in the investigation and praised Assistant U.S. Attorney David I. Sharfstein, who prosecuted the case.
Former Portsmouth Restaurant Owner Pleads Guilty to Credit and Debit Card FraudRead the Press Release
CONCORD, N.H. – Former Portsmouth, N.H., restaurateur Brian Pearson, 30, pleaded guilty in United States District Court for the District of New Hampshire to wire fraud, announced United States Attorney John P. Kacavas.
Pearson acknowledged that, from approximately January 2011 to May 23, 2011, he processed more than 1400 unauthorized credit and debit fraud transactions against the accounts of individuals who had previously dined at his now defunct Portsmouth restaurant, Bella Sol. Pearson obtained the credit and debit card numbers from the hard drive of his restaurant’s point-of-sale system where they were stored. Pearson was a resident of Chocorua, N.H., until he was arrested on charges relating to the credit and debit card fraud.
Pearson is facing a maximum prison sentence of twenty years and a fine of $250,000. Pearson is scheduled to be sentenced on July 8, 2013 and has been detained pending sentencing.
This case arose from an investigation jointly undertaken by the U.S. Secret Service and the Portsmouth Police Department. The case is being prosecuted by Assistant United States Attorney Bill Morse.
Former Insurance Broker Indicted for EmbezzlementRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; Randall C. Coleman, Special Agent in Charge of the Little Rock Field Office for the Federal Bureau of Investigation; and Deborah Perry, Acting Regional Director of the United States Department of Labor, Employee Benefits Security Administration; announced today that a federal grand jury indicted John Mathis Lile III, 55, of Little Rock on two counts of embezzlement.
According to the indictment, Lile was formerly the President of Cosmopolitan Life Insurance Company (“Cosmo”) and President, CEO, and Chairperson of Advanced Insurance Brokerage of America, Inc. (“AIBA”), Little Rock-based companies that together funded and managed self-insurance health care plans for small businesses around the State. The indictment goes on to claim that Lile abused his position by using a company-issued credit card to charge personal expenses of more than $300,000 over a three-year span, all of which were ultimately paid for by funds from Cosmo and AIBA.
“When health care companies are victimized, the shockwaves extend far beyond office walls and negatively impact the lives and wellbeing of individual policy holders,” stated Thyer. “Those who steal from trusting citizens for personal gratification will ultimately find there is a price to pay. If convicted of these charges, Lile faces a statutory sentence of ten years on each count.”
“In today’s challenging economic times, hard-working Arkansans must be able to rely on the security of their employment benefits to support themselves and their families,” said SAC Coleman. “My office will continue to work together with the Department of Labor, the Department of Justice, and our other partners to investigate and pursue prosecution of those who choose to embezzle from employment benefit plans.”
“Theft of employee benefit plan assets jeopardizes the security of America’s workers. I hope that this indictment sends a clear message to all who hold an office of trust, or operate or administer employee benefit plans, that the Department of Labor is committed to vigorously pursuing those who abuse their positions for personal gain,” Perry added.
This investigation was conducted by the Federal Bureau of Investigation and the United States Department of Labor. It is being prosecuted by First Assistant United States Attorney Patrick C. Harris and Assistant United States Attorney Alex Morgan.
An indictment contains only allegations. The defendant is presumed innocent unless and until proven guilty.
Former Dallas Police Officer Pleads Guilty to Federal Tax OffenseRead the Press Release
DALLAS — Stephanie Barney appeared on Friday before U.S. Magistrate Judge David L. Horan and pleaded guilty to an information charging one count of making or subscribing a false income tax return. She faces a maximum statutory penalty of three years in federal prison and a $100,000 fine. In addition, according to the terms of the plea agreement, Barney agrees to pay restitution of up to $42,941 to the Internal Revenue Service (IRS). The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the factual resume filed in the case, Barney admitted that in June 2007, while she was employed as an officer with the Dallas Police Department, she filed an amended joint tax return, for tax year 2006. She admitted that on that return, she claimed false medical deductions and falsely claimed a business loss that caused her to understate the amount of her taxable income.
Barney also admitted, according to the factual resume, that she filed similar false tax returns for tax years 2004 and 2005. When Barney was audited by the IRS in 2007, she provided the investigating revenue agent falsified checks and receipts in an attempt to fraudulently substantiate the questionable itemized deductions she had claimed on her 2006 tax return.
According to the factual resume, the tax loss is $42,941.58, representing the total losses for tax years 2004, 2005 and 2006.
According to an order setting conditions for her release, Barney is a resident of Dallas. A sentencing date has not yet been set.
The case is being investigated by IRS Criminal Investigation. Assistant U.S. Attorney Stephen P. Fahey is in charge of the prosecution.
Former CEO/Owner of Home Health Care Provider Pleads Guilty to Falsifying Records in Connection with A Federal Audit-Audit Involved Medicaid/Medicare Payments-Read the Press Release
WASHINGTON – Jeannette N. Awasum, the former owner of a health care provider, pled guilty today to a federal charge stemming from falsifying records in connection with a U.S. Department of Health and Human Services audit.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Nicholas DiGiulio, Special Agent In Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS - OIG) for the region including the District of Columbia.
Awasum, 49, of Germantown, Md., pled guilty in the U.S. District Court for the District of Columbia to a charge of falsification of records in connection with a federal investigation. She is to be sentenced July 9, 2013 by the Honorable Richard J. Leon. The charge carries a maximum statutory sentence of 20 years in prison and a fine of up to $250,000.
According to a statement of offense, signed by the defendant as well as the government, in early June 2010, Awasum, the Chief Executive Officer and owner of Tri State Home Health and Equipment Service, was informed that the U.S. Department of Health and Human Services requested the physician-signed plans of care for 130 of its patients. These plans of care are what authorize providers like Tri State to provide home healthcare services to Medicare and D.C. Medicaid beneficiaries.
Awasum knew that Tri State lacked plans of care for 62 of these 130 patients. Tri State received approximately $1,879,853 from Medicare and D.C. Medicaid for treating these 62 patients during the period for which plans of care were missing. Awasum directed her employees to fraudulently create plans of care for the services that these 62 patients received, making it appear as if the documents had been created prior to the services being provided. In total, the employees created 81 plans of care for these 62 patients.
Awasum instructed one of her employees to take the 81 fabricated forms to a doctor whom Awasum knew never examined these patients. Despite the fact that this doctor never examined these patients, he signed the plans of care in June 2010, making it appear as if he authorized these 62 patients receiving home healthcare services prior to the time that Tri State provided these services. The employee, at Awasum’s directions, placed the fraudulent 81 plans of care in Tri State’s file so that the forms would be present when the U.S. Department of Health and Human Services audited the services provided to these 62 patients.
In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Special Agent in Charge DiGiulio commended the efforts of those who investigated the case from the FBI’s Washington Field Office and the Office of the Inspector General of the U.S. Department of Health and Human Services. They also praised those who worked on the case from the U.S. Attorney’s Office, including Legal Assistant Donna Galindo, former Assistant U.S. Attorney Courtney G. Saleski, and Assistant U.S. Attorney Matt Graves, who is prosecuting the matter.
13-115Fluor Hanford Agrees to Pay $1.1 Million to Resolve Allegations of Improper LobbyingRead the Press Release
The Justice Department announced today that Fluor Hanford LLC has agreed to pay $1.1 million to settle allegations that Fluor violated the False Claims Act by using federal funds for lobbying. Fluor is a Department of Energy (DOE) contractor that performs management and engineering services at the DOE’s Hanford Nuclear Site in eastern Washington. Fluor’s parent company, Fluor Corporation, is headquartered in Texas and performs engineering, construction and personnel services for commercial and government customers.
Between 2005 and 2009, Fluor contracted with the DOE to manage and operate the Hazardous Materials Management and Emergency Response (HAMMER) Center. The HAMMER Center provides homeland security and emergency response training to first responders and law enforcement personnel. Fluor allegedly used DOE funds to lobby Congress and other federal officials to increase funding for the HAMMER Center, in violation of a federal law known as the Byrd Amendment, which prohibits the use of federal funds for lobbying.
“The money allocated by Congress for this program was designed to train first responders and law enforcement personnel to respond to crisis situations, not to lobby Congress for more funding,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “This resolution demonstrates that the Justice Department will work to ensure that public funds are not used to influence legislation.”
“The cleanup efforts at Hanford are too important to have prime contractors who misuse government funds to lobby for more government funds,” said Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington. “We are pleased that Fluor has settled these allegations and hope that this serves as a reminder to all prime contractors at Hanford that they must be good stewards of tax payer dollars.”
The allegations resolved by today’s settlement were initially alleged in a whistleblower lawsuit filed under the False Claims Act by Loydene Rambo, a former employee of Fluor. Under the False Claims Act, private whistleblowers can sue on behalf of the United States for false claims. The United States has the right to take over the action, as it did here. The whistleblower is entitled to a share of any recovery. Rambo will receive $200,000 of the government’s settlement.
This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with investigative assistance provided by the Department of Energy’s Office of Inspector General.
The False Claims Act suit was filed in the U.S. District Court for the Eastern District of Washington, and is captioned United States ex rel. Rambo v. Fluor Hanford, LLC et al., No. cv-11-5037 (E.D. Wash.). The claims settled in this case are allegations only; there has been no determination of liability.
Fluor Hanford Agrees to Pay $1.1 Million to Resolve Allegations of Improper LobbyingRead the Press Release
WASHINGTON – The Justice Department announced today that Fluor Hanford LLC (Fluor) has agreed to pay $1.1 million to settle allegations that Fluor violated the False Claims Act by using federal funds for lobbying. Fluor is a Department of Energy (DOE) contractor that performs management and engineering services at the DOE's Hanford Nuclear Site in Eastern Washington. Fluor's parent company, Fluor Corporation, is headquartered in Texas and performs engineering, construction, and personal services for commercial and government customers.
Between 2005 and 2009, Fluor contracted with the DOE to manage and operate the Hazardous Materials Management and Emergency Response (HAMMER) Center. The HAMMER Center provides homeland security and emergency response training to first responders and law enforcement personnel. Fluor allegedly used Department of Energy funds to lobby Congress and other federal officials to increase funding for the HAMMER Center, in violation of a federal law known as the Byrd Amendment, which prohibits the use of federal funds for lobbying.
"The money allocated by Congress for this program was designed to train first responders and law enforcement personnel to respond to crisis situations, not to lobby Congress for more funding," said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. "This resolution demonstrates that the Justice Department will work to ensure that public funds are not used to influence legislation."
"The cleanup efforts at Hanford are too important to have prime contractors who misuse government funds to lobby for more government funds," said Michael C. Ormsby, United States Attorney for the Eastern District of Washington. "We are pleased that Fluor has settled these allegations and hope that this serves as a reminder to all prime contractors at Hanford that they must be good stewards of tax payer dollars."
The allegations resolved by today's settlement were initially alleged in a whistleblower lawsuit filed under the False Claims Act by Loydene Rambo, a former employee of Fluor. Under the False Claims Act, private whistleblowers can sue on behalf of the United States for false claims. The United States has the right to take over the action, as it did here. The whistleblower is entitled to a share of any recovery. Rambo will receive $200,000 of the government's settlement.
This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney's Office for the Eastern District of Washington, with investigative assistance provided by the Department of Energy Office of Inspector General.
The False Claims Act suit was filed in the United States District Court for the Eastern District of Washington, and is captioned United States ex rel. Rambo v. Fluor Hanford, LLC et al., No. CV-11-5037 (E.D. Wash.). The claims settled in this case are allegations only; there has been no determination of liability.
Federal Jury Convicts Three in Health Care Fraud Scheme Stemming from Their Involvement in the Operation of Euless Healthcare Corp.Read the Press Release
Scheme Involved Nearly $3 Million in Fraudulent Billings
DALLAS — Following a seven-day trial, before U.S. District Judge David C. Godbey, a federal jury has convicted three defendants on health care fraud and related charges stemming from their involvement in the operation of Euless Healthcare Corporation (EHC) and Medic Healthcare Incorporated (Medic), announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. ECH was located on West Bedford Euless Road in Hurst Texas, and Medic, which operated from October 2009 to May 2011, was located on Bonhomme Road in Houston.
Specifically, defendants Godwin Umotong, 58, and Comfort Gates, 46, both of Houston, were each convicted on one count of conspiracy to commit health care fraud. In addition, Umotong was also convicted on five counts of health care fraud and Gates was convicted on two counts of health care fraud. Umotong was an employee of EHC and Medic; Gates was an employee of Medic. Defendant Vagharshak Smbatyan, 61, of Grenada Hills, California, was convicted on one count of making a false statement to a federal agency.
The conspiracy count and each of the substantive health care fraud counts carry a maximum statutory penalty of 10 years in federal prison, a $250,000 fine and restitution. The false statement count carries a maximum statutory penalty of five years in federal prison, a $250,000 fine and restitution. Judge Godbey set a July 15, 2013, sentencing date for all three defendants convicted today.
Ovsanna Agopian, the operator of both EHC and Medic, pleaded guilty in November 2012 to one count of conspiracy to commit health care fraud. Agopian, 58, is a resident of Houston; her husband is Vagharshak Smbatyan. Three other defendants charged in the case, Boghos Babadjanian, 55, of Sherman Oaks, CA; Leslie Omagbemi, 56, of Dallas, TX; and Munda Massaquoi, 69, of Houston, TX, also pleaded guilty to their roles in the fraud. All are awaiting sentencing.
According to documents filed in the case and evidence presented at trial, Agopian, Umotong, Omagbemi, Massaquoi and Gates conspired together to submit, or cause to be submitted, fraudulent claims to Medicare for diagnostic tests and office visits. Agopian recruited unlicensed doctors to work for EHC and Medic by telling them that they would treat beneficiaries in the beneficiaries’ homes. Medicare does not pay for services performed by unlicensed persons. Nevertheless, these recruits went to beneficiaries’ homes and purported to conduct medical examinations, including ordering diagnostic tests. In total, more than $2.7 million was fraudulently billed, and of that amount, Medicare paid more than $1.3 million.
The case was investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant U.S. Attorneys Michael McCarthy and Michael Elliott are in charge of the prosecution.
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 HEAT Strike Force, go to: http://www.stopmedicarefraud.gov/.
Federal Grand Jury in San Antonio Returns Tax Related IndictmentsRead the Press Release
In San Antonio today, a federal grand jury returned three indictments charging San Antonio residents with various tax related offenses announced United States Attorney Robert Pitman and Internal Revenue Service–Criminal Investigation Special Agent in Charge Steve McCollough.
The first indictment charges Sampson Delton Cotten with 23 counts of preparing false and fraudulent income tax returns. According to the indictment, Cotton, doing business as SC Financial Consultant Tax Co., knowingly prepared false income tax returns for approximately ten taxpayers from 2007 to 2010 that included fraudulent amounts of business income or loss as well as exemption amounts. Authorities estimate the total loss due to Cotton’s scheme was over $111,000. Upon conviction, Cotton faces up to three years in federal prison per count.
The second indictment charges Mark Schautteet with one count of tax evasion and three counts of making and subscribing a false income tax return. According to the indictment, from 2001 to 2007, the de facto owner and chief executive officer of Forming Services of Texas, Inc.; Forming Systems of Texas, Inc. and Suspended Forms, Inc., did willfully attempt to evade paying federal taxes withheld from employee wages and Federal Insurance Contributions Act (FICA) taxes. The indictment also alleges that Schautteet failed to file Employer’s Quarterly Federal Tax Returns (Form 941) and provided fraudulent information to a tax return preparer thus causing false income tax returns to be filed for tax years 2004, 2005 and 2006 which understated Schautteet’s actual income. The indictment further alleges that Schautteet attempted to hide assets in a trust which he created and used monies from that trust to pay third party debts. Furthermore, the indictment alleges that Schautteet canceled the sale of a parcel of real estate upon which the Internal Revenue Service had placed a lien in an effort to collect the taxes owed. Upon conviction, Shautteet faces up to five years in federal prison for tax evasion and up to three years in federal prison per count for making and subscribing a false income tax return.
The third indictment charges Lapoe Smith, Jr., with one count of tax evasion and four counts of making and subscribing a false income tax return. The indictment alleges that from August 2005 to May 2011, Smith knowingly evaded paying income tax for the calendar year 2005 on $2 million he failed to claim as income.
Upon conviction, Smith faces up to five years in federal prison for tax evasion and up to three years in federal prison per count for making and subscribing a false income tax return.
Assistant United States Attorney William R. Harris is prosecuting these cases on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Farmington Man and Apple Valley Woman Plead Guilty to Armed Robbery of Northfield HotelRead the Press Release
MINNEAPOLIS—Yesterday in federal court in St. Paul, a 27-year-old Farmington man and 29-year-old Apple Valley woman pleaded guilty to the armed robbery of America’s Best Value Inn and Suites in Northfield. On April 2, 2013, Eric Wade Forcier pleaded guilty to two counts of interference with commerce by robbery pursuant to the Hobbs Act; one count of using, carrying, possessing and brandishing a firearm during and in relation to a crime of violence; and one count of being a felon in possession of a firearm. Julie Ann Campana pleaded guilty to one count of aiding and abetting interference with commerce by robbery. Both were indicted on December 3, 2012, and both pleas were entered before United States District Court Judge Paul A. Magnuson.
In his plea agreement, Forcier admitted that on October 29, 2012, he entered the hotel wearing a Halloween mask, pointed a handgun at the night manager, and demanded money from the cash register and the safe. After receiving $114, he ran outside to an awaiting vehicle. Shortly after the car left the scene, police stopped it and arrested Campana, the driver. Forcier fled from police, discharging his handgun, but was arrested later in the day. Officers recovered items from the vehicle as well as along the path that Forcier took in running from the police. Those items included the Halloween mask and a .32-caliber, semi-automatic pistol.Forcier also admitted robbing four other businesses. On October 22, 2012, he stole $1,850 from Eddy’s Bar & Grill in Inver Grove Heights. He admittedly entered the bar, pointed a handgun at several employees, and fired it at the ceiling. On October 15, 2012, he stole $60 from an Apple Valley Domino’s Pizza; on October 18, 2012, he stole $154.41 from a Bloomington SuperAmerica; and on October 19, 2012, he stole $200 from an Apple Valley Jiffy Lube.
Because he is a felon, Forcier is prohibited under federal law from possessing firearms at any time. His prior Dakota County convictions include second-degree drug possession (2008), possession of stolen property (2008), two counts of fifth-degree drug possession (2007), and fleeing police in a motor vehicle (2007).
In her plea agreement, Campana admitted she was the lookout and get-away driver for Forcier on October 29. Campana also admitted that before the robbery, she asked the hotel’s night manager several questions about the hotel’s nighttime operations. In addition, Campana was admittedly Forcier’s get-away driver for the robberies at Eddy’s, SuperAmerica, and Domino’s.
For his crimes, Forcier faces a potential maximum penalty of 20 years in prison on each of the two robbery counts; life in prison for brandishing a firearm; and ten years in prison for being a felon in possession of a firearm. Campana faces a potential maximum penalty of 20 years in prison. Judge Magnuson will determine their sentences at a future hearing, yet to be scheduled.
The Hobbs Act, passed by Congress in 1946, allows federal prosecutors to prosecute individuals who commit armed robberies of businesses engaged in interstate commerce.
This case is the result of an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the Dakota County Sheriff’s Office; the Rice County Sheriff’s Office; and the police departments of Apple Valley, Bloomington, Inver Grove Heights and Northfield. It is being prosecuted by Assistant U.S. Attorneys Amber M. Brennan and Allen A. Slaughter.Easton Hospital Agrees to Pay Government $454,866Read the Press Release
To Resolve Allegation Of Improper Medicare Claims
The United States Attorney's Office for the Middle District of Pennsylvania announced that Easton Hospital has agreed to pay the United States $454,866 to resolve allegations that it submitted improper claims to the Medicare program. Easton Hospital is a subsidiary of Community Health Systems and is located in Easton, Pennsylvania.
According to United States Attorney Peter J. Smith, Easton Hospital has agreed to pay $454,866 to resolve allegations that from January 1, 2004, through May 28, 2009, Easton Hospital improperly submitted claims to the Medicare program for payment that contained evaluation and management services that were not allowable under Medicare.
Medicare does not normally allow additional payments for such services performed by a provider on the same day as a procedure, unless the service is significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure. In such cases, an attachment to the claim, known as "Modifier 25," may be submitted to allow the additional payment.
In this matter, the government determined that Easton Hospital incorrectly attached Modifier 25 to Medicare claims that led Medicare to pay the hospital for evaluation and management services that were not significant and separately identifiable from the underlying procedure for which Medicare also paid the hospital.
The U.S. Attorney’s Office acknowledged and Easton Hospital’s cooperation and remedial action which helped to resolve the matter. After the Government contacted Easton Hospital concerning improper Modifier 25 claims, the hospital conducted an internal review to determine what caused the improper claims to be submitted to the Medicare program and took action to increase medical coding training and bolster its compliance program.
The Harrisburg Office of the U.S. Attorney’s Office had jurisdiction because Medicare provider claims are processed by Novitas Solutions, Inc., formerly Highmark Medicare Services, in Camp Hill, Pennsylvania. The U.S. Attorney’s Office for the Eastern District of Pennsylvania cooperated in this matter.
The case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General, in Harrisburg and handled by D. Brian Simpson, of the United States Attorney's Office, Civil Division.
East St. Louis Man Sentenced on Crack Cocaine ChargesRead the Press Release
Kevin M. Cavitt, 45, of East St. Louis, Illinois, was recently sentenced in United States District Court in East St. Louis, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. The Court sentenced Cavitt to 84 months in prison, followed by six years of supervised release. The Court also imposed a fine of $300 and a special assessment of $100. Cavitt had previously entered a plea of guilty to a single count of Possession with the Intent to Distribute Crack Cocaine. The offense took place in the John DeShields Federal Housing Facility in East St. Louis, Illinois.
“It is always a good thing to stop a drug dealer, but to stop one in public housing is even better.” noted United States Attorney Wigginton.
Information revealed in Court shows that on July 11, 2012, officers of the U.S. Marshal Task Force observed what was believed to be a drug sale between Cavitt and the driver of a vehicle next to the John DeShields housing complex. Upon being asked to stop, Cavitt fled officers and was seen throwing three plastic baggies found to contain “crack cocaine” and a digital scale. Several hundred dollars in cash was found on his person. This money was forfeited as drug proceeds.
The investigation was conducted by the United States Marshal Service Task Force, which includes members of the East St. Louis Police Department, and occurred on a detail called “Ban and Bar” sweeps. This program is coordinated by the United States Attorney’s Office, the U.S. Marshals Service Task Force, and the East St. Louis Housing Authority. The program is designed to reduce crime in the Federal Housing Developments by patrolling federal properties and by arresting individuals that commit crimes on or near federal housing developments. The case was prosecuted by Assistant United States Attorney Deirdre A. Durborow.
Drug Organization Operating in Perry Housing Projects DismantledRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Buffalo has returned an indictment charging 12 defendants with conspiracy to traffic 280 grams or more of cocaine base and 500 grams or more of cocaine within the Perry Housing Projects. The defendants are also accused of utilizing three apartments within the Perry Housing Projects and a juvenile to further their drug trafficking activities.
This morning, law enforcement officers also executed 11 search warrants and arrested Tyshawn Bradley, 27, and Nannette Brown, 44, both of Cheektowaga, N.Y., Darnell Brown, a/k/a D, 28, Dallas McLamore, a/k/a Ice, a/k/a Dal, 28, Eric Ross, 23, Brandon Atkins, a/k/a YB, 26, Tashawn Gay, 22, Melvin Tucker, a/k/a Hoff, 23, David Varner, 54, Latifah Donaldson, a/k/a LaLa, 21, Tara Robinson, a/k/a Coek, 23 and Phayon Redmond, a/k/a Booper, 27, all of Buffalo. The charges carry a mandatory minimum sentence of 10 years in prison, a maximum of life, a fine of $10,000,000, or both.
In addition, the grand jury has returned three indictments charging Dimone Thomas, a/k/a Pony, 26, Shariff Johnson, a/k/a Ahmad Johnson, 33 and Rudell Jackson, a/k/a Rudy, 24 with distributing cocaine base in the Fruit Belt area of Buffalo. The Jackson charges carry a mandatory minimum five years to forty years imprisonment, a fine of $5,000,000, or both, while the Thomas and Johnson charges carry up to 20 years imprisonment, a $1,000,000 fine, or both.
United States Attorney Hochul stated, “Children and grandmothers living in the Perry apartments - or any public housing project - are entitled to live as safe and secure as every other American.” Hochul continued, “For too long, those who call this area home were subjected to the danger and destruction of drug traffickers. Criminals should know we mean business, while residents and companies alike should know the area is now safe for business, school and play.”Assistant U.S. Attorney Timothy C. Lynch, who is handling the Perry Projects case, stated that the investigation focused on the drug trafficking activities of Tyshawn Bradley, Darnell Brown, Dallas McLamore and their associates. According to the indictment, Bradley, Brown, McLamore and Eric Ross operated a cocaine base and cocaine distribution organization on a daily basis out of several apartments within the Perry Housing Projects, including apartments within the high-rise towers located at 124 Fulton Street and 305 Perry Street. The organization also utilized a person under the age of 18 to distribute cocaine base to customers on the grounds of the public housing facility. Law enforcement utilized court-ordered wire interceptions, undercover drug purchases, covert cameras and traditional police investigative techniques to infiltrate and dismantle this organization.
The Fruit Belt area indictments charge narcotics trafficking in the area of the new Medical Campus.
The indictments are the culmination of an investigation on the part of the Federal Bureau of Investigation’s Safe Streets Task Force, under the direction of Special Agent in Charge Christopher M. Piehota, the New York State Police, under the direction of Major Matthew Renneman, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
District Man Enters Plea of Nolo Contendere in Bank Robbery Case-Defendant Arrested Shortly After the Crime-Read the Press Release
WASHINGTON – John Morris, 64, of Washington, D.C., entered a plea of nolo contendere today to a charge of bank robbery while armed, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Morris entered the plea in the U.S. District Court for the District of Columbia. Under a nolo contendere plea, a defendant is convicted of the offense, accepts responsibility, and agrees that the government could prove him guilty beyond a reasonable doubt. However, the defendant in such a plea does not admit to the facts of the case. The Honorable Richard W. Roberts scheduled sentencing for June 11, 2013. Morris faces a statutory maximum of 25 years in prison.
According to the government’s evidence, just before noon on March 22, 2012, Morris walked into a TD Bank in the 1200 block of First Street NE. He was wearing a black jacket, black pants, black shoes, sunglasses and a cap. He demanded money from two bank tellers, claiming that he had a bomb. The tellers turned over about $3,700. Morris left a bag behind, which he claimed had the bomb, and warned that he could remotely control its detonation.
Two officers with the Metropolitan Police Department were in the area at the time of the robbery, and they quickly spotted Morris across the street from the bank. A third MPD officer arrived on the scene, and Morris told him, “Yeah, I did it. It’s rough out here.” Morris, who at the time of his arrest was dressed in a black jacket, black pants, black shoes, sunglasses and a cap, also could be seen clearly on video surveillance photographs of the robbery.
The stolen money was recovered after the robbery. Morris’s bomb threat led to an emergency response that included the evacuation of the bank. The bag left inside the bank contained an alarm clock.
In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge Parlave and Chief Lanier thanked those who investigated the case from the MPD and FBI’s Washington Field Office, including the FBI/MPD Violent Crimes Task Force. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Stephanie Brooker, former Chief of the Asset Forfeiture and Money Laundering Section, and Paralegal Specialist Jeannette Litz. Finally, they expressed appreciation to Assistant U.S. Attorney Catherine K. Connelly, who is prosecuting the matter.
13-114Deported Honduran Charged with Illegal Re-entering United StatesRead the Press Release
PITTSBURGH - An individual found in Homestead, Pa., has been indicted by a federal grand jury in Pittsburgh on a charge of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named Wilson Baca-Ortiz, 33, formerly from Honduras, as the sole defendant.
According to indictment, Wilson Baca-Ortiz, an alien, was removed from the United States by United States Immigration and Customs Enforcement on Nov. 21, 2005. Wilson Baca-Ortiz was found on March 21, 2013, pursuant to an on-going investigation into another immigration matter.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Covington Businessman, Bay E. Ingram, Sentenced in Connection with Bp Oil Spill FraudRead the Press Release
BAY E. INGRAM, age 51, a resident of Covington, Louisiana, was sentenced today to 18 months imprisonment by United States District Judge Sarah S. Vance for conspiracy to commit wire fraud in the aftermath of the BP oil spill, announced U.S. Attorney Dana J. Boente. INGRAM was also ordered to pay $463,271.31 in restitution, which he paid today, to the victims of his crimes; Rotorcraft Leasing Company, LLC (RLC) received $314,091.77 and British Petroleum, p.l.c. (BP) received $149,179.54.
According to court documents, INGRAM was a businessman who owned and operated Southeast Recovery Group (SRG), a company which provided disaster relief services in the aftermath of the oil spill due to the sinking of the Deepwater Horizon rig in the Gulf of Mexico in April 2010. INGRAM through his company SRG, provided a helicopter that was supposed to be used for oil spill response by representatives of the St. Bernard Parish Sheriff’s Office and the Louisiana Department of Wildlife and Fisheries, and also assisted in the construction of helipads at the Hopedale, Louisiana facility of British Petroleum, p.l.c. (BP). In the case of both the helicopter and the helipads, INGRAM through his company SRG, acted as a “middleman” between the supplier of the helicopter, and the companies responsible for the construction of the helipads, on the one hand, and BP, who was billed for cost of providing the goods and services, on the other hand. In the case of the helicopter, INGRAM was supplied the helicopter from his supplier, a company called Rotorcraft Leasing Company, LLC (RLC).
According to documents filed with the court, INGRAM arranged for the helicopter to be stationed at Hopedale from June through November 2010, but never had an agreement with BP to supply the helicopter after June 15, 2010. In an effort to get paid by BP, and to justify the amount of his unpaid invoices to BP totalling approximately $1.4 million, INGRAM falsified and forged documents, including a contract between his company and RLC. INGRAM also falsified flight logs and flight manifests for the helicopter.
INGRAM also caused the construction of five helipads at Hopedale at a cost of approximately $110,000. He then falsely represented to BP that his actual costs had been over $250,000, and billed BP for, and was paid, $303,000.
Throughout the period June 2010 and April 2011, court documents assert that INGRAM’s suppliers repeatedly contacted INGRAM in an effort to seek payment. Trying to dissuade his suppliers from contacting BP directly, INGRAM created false and fictitious e-mails, some in the names of real persons and some in the name of a non-existent or fictitious person.
The case was investigated by special agents of the Federal Bureau of Investigation.
The case was being prosecuted by Assistant U. S. Attorneys Matt Chester and Eileen Gleason.
Court of Appeals Rejects Second Amendment Challenge to Federal Firearms StatuteRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that the United States Court of Appeals for the Second Circuit has rejected a Second Amendment challenge to a federal statute which imposes stiff punishment on drug traffickers who possess firearms to further their drug-trafficking activities. Ron Bryant was convicted in 2008, following a jury trial in federal court in Rochester, New York, of trafficking in crack cocaine and possessing a shotgun in furtherance of his drug activity. Bryant appealed his conviction, claiming that because he possessed the shotgun to protect his home, the federal statute violated his Second Amendment right to bear arms.
Bryant based his claim on the United States Supreme Court’s decision in District of Columbia v. Heller, which was decided shortly after his conviction. In Heller, the Supreme Court said that law-abiding responsible citizens have a constitutional right under the Second Amendment to bear arms for lawful purposes. In a case decided shortly after Heller, the Supreme Court emphasized that this right was most notably “for self-defense within the home.”
In Bryant’s case, the Court of Appeals rejected Bryant’s claim that the Second Amendment protected his right to possess the shotgun to protect himself while he was selling crack cocaine from his home. The Court said that even if Bryant had originally obtained the shotgun for the legitimate reason of protecting himself after he was robbed, “once Bryant engaged in an illegal home business, . . . he was no longer a law-abiding citizen using the firearm for a lawful purpose, and his conviction for possession of a firearm under these circumstances does not burden his Second Amendment right to bear arms.”
Bryant remains in federal prison serving a sentence of 81 months imposed by United States District Judge Charles J. Siragusa following his conviction.
On appeal the government was represented by Assistant United States Attorney Monica J. Richards and the trial was handled by Assistant United States Attorneys Aaron J. Mango and Michael DiGiacomo.
Cleveland Woman Accused of Stealing Prescription Pad from Hospital to Obtain OxycodoneRead the Press Release
A federal grand jury returned a one-count indictment charging a Cleveland woman with conspiracy to possess with intent to distribute Oxycodone, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Charmin Reeves, age 35, is accused of stealing 10 blank prescriptions from an area hospital where she worked. She filled one out one prescription for 90 pills of Oxycontin in November 2009 and sold the other nine blank prescriptions for $900, according to the indictment.
"Prescription drug abuse is a huge problem throughout Ohio," Dettelbach said. "We will continue to work with our law enforcement partners to push back against this trend."
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael L. Collyer. The case was investigated by the Cleveland branch of the Federal Bureau of Investigation and the Cleveland Police Narcotics Unit.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Chicago Man Sentenced to Life in Prison for Killing Bank Teller During Robbery in 2007Read the Press Release
CHICAGO — A Chicago man was sentenced today to life in prison for the fatal shooting of bank teller Tramaine Gibson during a bank robbery at the Illinois Service Federal Savings and Loan on the city’s south side on May 22, 2007. The defendant, DAVID VANCE, was convicted at a trial in July 2011 of the fatal shooting while robbing the ISF bank, located on Martin Luther King Drive, of $6,875 with two co-defendants. A security guard and a customer were also shot during the robbery.
Vance, 34, was also convicted of robbing the Cole Taylor Bank, located on East 63rd Street in Chicago, of $11,438 on May 10, 2007. He received the mandatory life sentence from U.S. District Judge Joan Gottschall, who also imposed a mandatory consecutive sentence of 32 years for Vance’s use of a firearm during the robberies and shooting. There is no parole in the federal prison system.
Judge Gottschall also ordered mandatory restitution of nearly $1.2 million that includes restitution to the banks, as well as funds for the security guard’s disability and the estate of Gibson, who was 23 when he was killed. No funds are likely to be recovered, however, the judge acknowledged in court.
“This heinous crime is an unfortunate example of how an armed robbery can go horribly wrong,” the government argued in support of the mandatory sentence. “A life sentence will send a message to individuals considering such crimes that they will forfeit the right to live in a free society when they are caught. They will forfeit that right not for a few years, but for the rest of their lives.”
Vance jumped the teller counter and “killed Gibson in his cold-blooded pursuit of the money in the bank vault,” the government argued. Vance confronted Gibson, who was unarmed, and demanded that he open the vault, which he was not even able to do. Vance shot Gibson at close range and then dragged his bleeding body toward the bank vault. Because the murder occurred during a bank robbery, the judge ruled that the life sentence was required regardless of whether Vance intended to kill Gibson.
Two co-defendants, Alton Marshall, 34, who testified against Vance, and Henry Bluford, 35, both of Chicago, each pleaded guilty to the bank robberies and, under the terms of their plea agreements, are expected to receive sentences of 20 years in prison when they are sentenced on April 17 and 24, respectively.
The government is being represented by Assistant U.S. Attorneys Sharon Fairley, Lela Johnson, and Andrianna Kastanek.
The sentence was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Case SentencedRead the Press Release
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced today that U.S. District Court Chief Judge Brian A. Jackson sentenced Brad J. Case, age 30, of Baton Rouge, Louisiana, to a term of imprisonment of 96 months and 20 years supervised release after imprisonment. Case had previously pled guilty to one count of distribution of child pornography.
On May 8, 2011, Case distributed 25 images of child pornography to an undercover Special Agent with the Federal Bureau of Investigation (FBI) through the internet using a peer-to-peer file sharing program. The FBI was able to trace the source of the child pornography to an apartment located in Baton Rouge and rented by Case. On October 12, 2011, the FBI executed a search warrant at Case’s apartment and seized, among other things, a computer belonging to Case. A forensic examination of Case’s computer revealed several hundred images and numerous videos depicting child pornography.
This matter was investigated by the United States Attorney’s Office for the Middle District of Louisiana and the Federal Bureau of Investigation. The matter was prosecuted by Assistant United States Attorney Chris Dippel.
Carney's Point, NJ Woman Charged in Multi-Million Dollar Mortgage Fraud SchemeRead the Press Release
Rashika J. Moon, 42, of Carneys Point, New Jersey, was charged today by Information with participating in a mortgage fraud conspiracy involving more than 100 Philadelphia properties and more than $20 million in fraudulent loan proceeds, announced United States Attorney Zane David Memeger. Moon is charged with conspiracy to commit loan and wire fraud, false statement in connection with Federal Housing Administration loan, and loan fraud. The information also seeks the criminal forfeiture of over $1.7 million from Moon.
The information alleges a massive mortgage fraud conspiracy that operated between May 2004 and February 2009, primarily in the West Philadelphia section of the city of Philadelphia. Moon, is alleged to have been associated with KREW Settlement Services, a Philadelphia real estate settlement company that is alleged to have been at the center of the conspiracy. Moon is alleged to have had the legal authority to sign checks from KREW’s bank account. Moon is also alleged to have directly participated in numerous fraudulent loan applications by either purchasing properties in her name based on the submission of false loan applications and other false documents, or by later “selling” many of those properties to “straw buyers” whose identities and fraudulent information were used to obtain other loans. Many of the fraudulent loan applications are alleged to have included falsely-inflated sales prices and falsely-inflated appraisals, causing the lenders to loan more money than the properties than they were truly worth. Most of the mortgages were unpaid and most of the properties fell into foreclosure.
According to the information, co-conspirator Eric Ponder, charged elsewhere, held himself out as a real estate developer and helped cause the submission of numerous fraudulent loan applications that resulted in mortgages being unwittingly issued by various banks by, making false statements on loan applications in his own name and helping secure mortgages in the names of others by recruiting “straw buyers” whose identity and fraudulent information was used to obtain the loans. Ponder is also alleged to have submitted false invoices for construction work never performed on the properties in order to justify payments to him from the settlement proceeds of loans in the names of the straw buyers. The information also alleges that another co-conspirator, Willie G. Manley, charged elsewhere, was an accountant who created false income documents, such as W-2 forms, paystubs, and Form 1040 income tax returns, which were submitted to lenders. The conspiracy also included grossly inflated appraisals, false title insurance policies, false receipts for home repairs that were never performed, and straw buyers who knowingly allowed their names and identities to be used to purchase the properties and defraud the banks.
If convicted, Moon faces a maximum possible sentence 37 years imprisonment, 5 years supervised release, a fine of $1,500,000 or twice the value of the property involved in the transactions, and a $300 special assessmentThe case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, and the Department of Housing and Urban Development’s Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525CVS to Pay $11 Million to Settle Civil Penalty Claims Involving Violations of Controlled Substances ActRead the Press Release
One of the Largest Settlements Ever Paid for Record-Keeping Violations
By Retail Pharmacy Chain Related to Controlled PharmaceuticalsOklahoma City, Oklahoma -- CVS Pharmacy, Inc., and Oklahoma CVS Pharmacy, L.L.C., (collectively "CVS"), have agreed to pay $11,000,000 to the United States to settle civil penalty claims for record-keeping violations under the Controlled Substances Act and related regulations, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
"The abuse of prescription drugs is a well-documented epidemic inflicting devastating, long-term, effects on individuals, families, and entire communities," said U.S. Attorney Sanford C. Coats. "To combat this problem, it is essential that those who dispense controlled substances comply with DEA's record-keeping requirements. This ensures that dispensers of prescription drugs remain accountable for the controlled substances within their control and makes the illegal diversion of those drugs more difficult. I commend the DEA Office of Diversion Control who diligently pursued this investigation."
"Abuse of prescription drugs is one of the most critical issues we face today. The scope of this problem is alarming," said Acting Special Agent in Charge Daniel R. Salter of the DEA Dallas Field Division. "This settlement reinforces the responsibilities of all pharmacies to prevent the diversion of dangerous drugs. This case highlights DEA's steadfast resolve to combat the growing prescription drug abuse problem in this country by ensuring that all DEA registrants, including nationwide pharmacy chains, are in compliance with the law. This is vital to protect public health and keep our communities safe."
The Controlled Substances Act, 21 U.S.C. Sections 801 et seq. ("CSA"), was passed by Congress to combat the illegal distribution and abuse of controlled substances, including prescription medications. The CSA is enforced by the Drug Enforcement Administration's (DEA) Office of Diversion Control, whose mission is to prevent, detect, and investigate the diversion of controlled pharmaceuticals and listed chemicals from legitimate sources while ensuring an adequate and uninterrupted supply for legitimate medical, commercial, and scientific needs. Under the CSA, entities registered with the DEA who purchase, distribute, dispense, transfer, or sell controlled substances must comply with inventory and documentation requirements. Regulations promulgated under the CSA require that each DEA registrant, including pharmacies, maintain complete and accurate records of each substance manufactured, received, sold, delivered, dispensed or otherwise disposed of by the registrant for two years. These requirements play a vital role in ensuring the appropriate handling, accounting, and distribution of controlled substances. Violations of the record-keeping requirements subject DEA registrants to civil monetary penalties.
CVS is a Rhode Island corporation with its corporate headquarters in Woonsocket, Rhode Island. CVS currently operates approximately 7,400 retail pharmacies in the United States that dispense branded and generic prescription drugs, including controlled substance medications, to retail consumers. CVS operates 46 pharmacy retail stores in Oklahoma. Each CVS pharmacy retail store is separately registered with DEA and is assigned a unique DEA registration number to dispense controlled substances as required by the CSA.
The United States has alleged that from October 6, 2005 to October 5, 2011, CVS pharmacy retail stores in Oklahoma and elsewhere violated the CSA and the record-keeping regulations by:
- 1) Creating, entering and maintaining invalid "dummy" DEA registration numbers or numbers other than the valid DEA registration number of the prescribing practitioner on dispensing records, which were at times provided to state prescription drug monitoring programs;
- 2) Filling prescriptions for certain prescribers whose DEA registration numbers were not current or valid; and
- 3) Entering and maintaining CVS dispensing records, including prescription vial labels, in which the DEA registration numbers of non-prescribing practitioners were substituted for the DEA registration numbers of the prescribing practitioners.
In order to resolve the claims by the United States, CVS has agreed to pay $11,000,000 to the government to settle civil penalty claims and acknowledged that each of its DEA-registered retail stores is required to comply with the record keeping requirements as provided under the CSA and the regulations promulgated thereunder. In reaching this settlement, CVS did not admit liability, and the government did not make any concession regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Drug Enforcement Administration's Office of Diversion Control, Oklahoma City District Office Diversion Group, and was prosecuted by Assistant United States Attorney Ronald R. Gallegos. Settlement was concluded with the assistance of the Department of Justice Criminal Division’s Narcotic and Dangerous Drug Section.
Buffalo Man Pleads Guilty to Cocaine Charges in 31-Gang CaseRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that David Howard, age forty-one (41), of Buffalo, New York, pleaded guilty before District Judge Richard J. Arcara for cocaine trafficking in 2008 and 2009. The charge carries a maximum penalty of life in prison.
According to Assistant U.S. Attorney Michael L. McCabe, Howard aided in distributing kilogram amounts of cocaine to members of the “31 Gang” in Buffalo, New York. In doing so, Howard used a house at 115 Shumway, in the City of Buffalo, as a “work house” for the purchase, preparation and distribution of cocaine and crack cocaine. In February 2009, Howard also provided money to co-defendant Marcus Chambers to purchase multiple kilograms of cocaine from a supplier in Mentor, Ohio. On February 17, 2009, Chambers was stopped by local police in Mentor, who recovered $220,000 from Chambers’s vehicle.
Howard was indicated along with 34 others in this case. All defendants have pleaded with 3, including Howard, awaiting sentencing.
The plea was the culmination of an investigation on the part of agents from the Federal Bureau of Investigation under the direction of Special Agent in Charge Christopher M. Piehota and officers on the FBI's Safe Streets Task Force.
Sentencing is scheduled on July 15, 2013 at 1:00 p.m. before Judge Arcara.
Bookkeeper Sentenced to Prison for Fraud and Aggravated Identity TheftRead the Press Release
BIRMINGHAM – U.S. District Judge C. Lynwood Smith Jr. this week sentenced an Etowah County woman to nearly five years in prison for stealing more than $900,000 from her former employer through fraud and identity theft, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
Judge Smith ordered PEGGY MCGLAUGHN, 68, to serve 57 months in prison, 33 months for the fraud and 24 months for the aggravated identity theft, to be served consecutively to the fraud sentence. McGlaughn also must serve five years’ supervised release after completing her prison sentence and must pay $933,079 in restitution to Bob Roberts & Company, the Etowah County construction company where she worked as bookkeeper and office manager for 24 years. She will be credited $60,750 toward that restitution for two vehicles seized through asset forfeiture proceedings by the FBI.
McGlaughn is scheduled to report to prison in June. She pleaded guilty to the fraud and aggravated identity theft charges in 2011. According to court records, she carried out her scheme to steal from her employer as follows:
From October 2003 until February 2010, McGlaughn obtained the signatures of Bob Roberts & Company principals on company checks and told the principals those checks would be used to pay for company expenses. McGlaughn would make the checks out to another company employee and, unbeknownst to that employee, forge his endorsement on the checks and then present them to a local bank for payment. During the course of her scheme, McGlaughn forged endorsements and cashed more than 100 of the company’s checks, keeping the money for herself.
The FBI investigated the case, and it was prosecuted by the U.S. Attorney’s Office for the Northern District of Alabama.
Battlefield Man Indicted for $785,200 Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Battlefield, Mo., man has been indicted by a federal grand jury for a $785,200 scheme to defraud his employer.
Travis E. Honaker, 35, of Battlefield, was charged in a 25-count indictment returned by a federal grand jury in Springfield on Tuesday, April 2, 2013.
The federal indictment alleges that Honaker engaged in a scheme to defraud his employer, Success Leasing, Inc. (or its affiliated company Prime, Inc.), in Springfield, by causing 109 wire transfers totaling $785,200 to be made to his bank accounts from the sale of used vehicles and equipment between August 2007 and December 2011.
Honaker is charged with 12 counts of wire fraud and 13 counts of money laundering.
According to the indictment, Honaker worked for Success Leasing and Pedigree Truck Sales, affiliated companies of Prime. He sold used equipment, including auxiliary power units (APUs) and used trucks that had previously been leased by Success to others. After the lease period expired and the trucks and equipment were returned to the company, Honaker was tasked with managing their sale to others.
Honaker allegedly began charging unauthorized “finder’s fees” or deposits to purchasers of Success’s used trucks in August 2007. Honaker was not authorized to charge finder’s fees or deposits. He never informed Success that he was collecting a finder’s fee or deposit for the trucks he was selling, the indictment says, and he did not remit the money back to Success.
Honaker allegedly created T&H Consulting, LLC, in January 2011 for the purpose of receiving these finder’s fees and deposits. According to the indictment, the purchasers wired funds to this account.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney. Gary Milligan. It was investigated by the U.S. Secret Service, IRS-Criminal Investigation and the Springfield, Mo., Police Department.Baltimore Man Sentenced in Mortgage Fraud SchemeRead the Press Release
Lenders, Including Fannie Mae and Freddie Mac, Lost Over $1 Million from Fraudulently Obtained LoansBaltimore, Maryland - U.S. District Judge James K. Bredar sentenced Kenneth Koehler, age 43, of Baltimore, today to 18 months in prison followed by two years of supervised release for conspiracy to commit wire fraud in connection with a mortgage fraud scheme in which fraudulent loans were obtained on six properties, all of which subsequently went into foreclosure. Five of those properties, accounting for over $790,000 in losses, were on the same street - four of them in the same block. Judge Bredar ordered Koehler to pay restitution of $1,007,812.
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; Inspector General Steve A. Linick of the Federal Housing Finance Agency; and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division.
From 2004 through 2008, Koehler invested in Baltimore residential real estate. Koehler obtained financing for the purchase and sale of his properties from Worthington Mortgage Group, LLC, a mortgage brokerage company controlled by a former business partner.
According to his guilty plea, beginning in 2006 Koehler conspired with his former business partner to obtain loans for Worthington Mortgage clients under false pretenses. They used Voicebank, a technology employee leasing company that they had previously owned, as a fictitious employer for Worthington borrowers who needed fraudulent verifications of their employment. Voicebank had ceased doing business in 2001. The Voicebank phone number activated a voice mail message accessible to both Koeher and his partner. If called upon by the lender, either Koehler or his partner would verify the employment or income information supplied on the loan application.
Koehler obtained two loans by fraudulently inflating his own monthly income. In 2006, Koehler signed a loan application prepared by his co-conspirator to refinance a loan on property at 229 S. Chapel Street in Baltimore, which falsely stated that Koehler earned $20,000 per month with Voicebank. Both Koehler and the co-conspirator knew that he was self-employed. In 2007 the same false information was submitted on a loan application to purchase property at 2217 Gough Street in Baltimore. Both properties went into foreclosure, resulting in losses of more than $221,000 to lenders, including the Federal National Mortgage Association (Fannie Mae).
In 2007 and 2008, Koehler and his co-conspirator also arranged for another individual to purchase three properties, and for that individual’s brother to purchase a fourth property, all located on S. Chapel Street and all owned by Koehler. In all four cases, Koehler concealed the true purchase price of the properties from the lenders by signing the settlement sheet stating that he had received a substantial down payment from the buyers, when in fact no such payments had occurred. Koehler also kicked back part of the sales proceeds from each loan to the buyers, further reducing the sales price of the property. By concealing the true sales price for the properties, the conspirators manipulated the lenders into funding more than 100% of the purchase price. All four properties went into foreclosure, resulting in losses of more than $686,000 to Fannie Mae and Federal Home Loan Mortgage Association (Freddie Mac).
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 commended the FBI, Federal Housing Finance Agency - Office of Inspector General and U.S. Postal Inspection Service for their investigative work. Mr. Rosenstein thanked Assistant U.S. Attorney Gregory R. Bockin, who prosecuted the case.
Aurora Man Accused of Diverting $225,000 from Construction Contracts for Personal Use, Including Restoring CorvetteRead the Press Release
A nine-count criminal information was filed charging an Aurora, Ohio, man with crimes related to a scheme of at least $225,000 involving construction projects, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
Robert J. Berryhill, 51, is accused of creating a fictitious company as a way to divert money on construction projects for his own personal use, including the restoration of a vintage Corvette sports car he had purchased, according to the information.
Berryhill, who served as the senior vice president of Carnegie Management and Development Corp. (CMDC) in Westlake, Ohio, is charged with five counts of mail fraud, two counts of wire fraud, and one count each of aggravated identity theft and false personation of an officer or employee of the United States.
“This defendant is accused of abusing the trust of his employer, his colleagues and his customers in an effort to enrich himself,” said Dettelbach. “He is accused of using public contracts as a way to get his Corvette restored and his pockets lined with hundreds of thousands of dollars.”
“Robert Berryhill is accused of creating false businesses, false invoices and ultimately pretending to be an FBI employee, all in a desperate attempt to defraud others out of at least $225,000,” Anthony said. “The FBI remains committed to detecting and stopping those defrauding others.”
Knoxbi Company, LLC, which was managed by CMDC, won the bid to build an FBI office in Knoxville, Tennessee in August 2007. The company used Blaine Construction Company to serve as the on-site general contractor, according to the information.
In March 2009, Indy-Fedreau LLC, which was also managed by CMDC, won the bid to construct an FBI building in Indianapolis. The company used Welty Building Company as the general contractor, according to the information.
At the same time, Berryhill also created a fictitious contractor known as American Excavators Company (AEC) for the purpose of submitting false invoices to divert CMDC monies to his personal use, according to the information.
From August 2008 through September 2009, Berryhill defrauded CMDC, Knoxbi, Indy-Fedreau, Blaine and Welty to obtain money. He did this by creating false invoices in the name of Ore Enterprises – the Pennsylvania company Berryhill hired to restore his vintage Corvette – and then submitted them to Blaine and Welty. Those companies paid the invoices then passed the cost on to Knoxbi and Indy-Fedreau for final payment, according to the information.
Berryhill also created false invoices in the name of AEC that he submitted to Blaine and Welty. Those companies paid AEC and then passed the cost of the invoice to Knoxbi and Indy-Fedreau for final payment, according to the information.
Overall, Berryhill caused an actual loss of at least $225,919.
Berryhill is also accused of falsely pretending to be an FBI employee identified as “W.C.M.” on July 28, 2008, and demanding that Blaine pay an invoice from Ore regarding the construction of an FBI building in Knoxville, according to the information.
The case resulted from an investigation conducted by Federal Bureau of Investigation. The case was handled by Assistant United States Attorney Robert J. Patton.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record (if any), the defendant’s role in the offenses and the characteristics of the violations. In all cases, the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Atlantic County, N.J., Man Admits Role in Heroin ConspiracyRead the Press Release
CAMDEN, N.J. – An Atlantic County, N.J., man today admitted his involvement in a scheme to distribute heroin in and through New Jersey, U.S. Attorney Paul J. Fishman announced.
Nassaun Hines, a/k/a “Bubbles,” a/k/a “Nay,” 27, pleaded guilty before U.S. District Judge Joseph H. Rodriguez to a Superseding Information charging him with knowingly and intentionally conspiring to distribute 100 to 400 grams of heroin, and possession of a firearm by a previously convicted felon. Hines was previously indicted for the heroin distribution conspiracy and the possession of the firearm.
According to documents filed in this case and statements made in court:
Beginning in March 2010, FBI special agents and members of the Atlantic County Prosecutor’s Office used wiretaps to intercept telephone conversations between Jamal Reid, Nassaun Hines, and others. The monitored calls and other information revealed that Hines, Reid, and others were distributing large amounts of heroin. During the calls, agents overheard Hines agreeing to deliver heroin to others, agreeing to gather money from others for heroin, and agreeing to purchase heroin. Agents observed Hines meeting with his conspirators on numerous occasions.
Hines acknowledged that between April 2, 2010, and May 15, 2010, he sold quantities of heroin in Atlantic County and conspired with others in connection with his drug trafficking activity. Hines also admitted that he knowingly possessed a firearm on May 15, 2010.
Hines faces a statutory, mandatory, minimum term of five years in prison; a statutory, maximum prison term of 40 years, and a $5 million fine on the conspiracy count and a maximum potential sentence of 10 years in prison and a $250,000 fine on the weapons count. Sentencing is scheduled for July 8, 2013.
Ten people have been charged for their roles in this heroin distribution conspiracy. To date, five individuals have pleaded guilty to conspiracy to distribute heroin, three remain incarcerated pending trial, and two are fugitives. On Feb. 14, 2013, Leroy Farmer, 38, of Pleasantville, and Baseem Taliaferro, 27, of Pleasantville, pleaded guilty to Superseding Informations charging each in connection with their roles in this heroin distribution conspiracy. Farmer’s sentencing is scheduled for May 20, 2013, at 10:00 a.m., and Taliaferro’s sentencing is scheduled for May 23, 2013, at 10:00 a.m., both before Judge Rodriguez. Edward Brown Jr., a/k/a “Eddie Brown, a/k/a “Eddie Cane,” a/k/a “Cane,” and Matthew Palmer, a/k/a “Matt,” a/k/a “White Boy Matt,” a/k/a “White Boy” – remain fugitives.
U.S. Attorney Fishman credited special agents of the FBI's Atlantic City Resident Agency – Safe Streets Task Force, which during the Reid investigation consisted of task force officers from Atlantic County Prosecutor's Office, Atlantic City Police Department, Northfield Police Department and Pleasantville Police Department, under the direction of Acting Special Agent in Charge David Velazquez; and special agents from the Bureau of Alcohol, Tobacco, Firearms & Explosives, under the direction of Special Agent in Charge Thomas J. Cannon in Newark.
The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Alyson M. Oswald of the U.S. Attorney's Office Criminal Division in Camden.
13-153
Defense counsel:
Hines: John F. Renner Esq., Marlton, N.J.
Farmer: Justin T. Loughry Esq., Camden
Taliaferro: Paul A. Sarmousakis Esq., Avalon, N.J.Hines Superseding Information
Arbonnie Ellen Seal Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on April 3, 2013, before Chief U.S. District Judge Richard F. Cebull, ARBONNIE ELLEN SEAL, a 50-year-old resident of Billings, was sentenced to a term of:
Prison: 18 months
Special Assessment: $200
Supervised Release: 4 years
SEAL was sentenced in connection with her guilty plea to conspiracy to possess with the intent to distribute methamphetamine and possession with the intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Marcia K. Hurd, the government stated it would have proved at trial the following:
SEAL and another individual came to the attention of law enforcement in Billings when a confidential informant contacted the High Intensity Drug Trafficking Area (HIDTA) Task Force in May 2011 and reported that he/she had been obtaining methamphetamine for the past eight weeks from an individual and redistributing it to the Northern Cheyenne Indian Reservation. The CI reported that he/she got eight balls, then half ounces, then ounces from the individual and would then return to the reservation, break down the methamphetamine into smaller amounts and redistribute it. The CI brought back one pound of methamphetamine from Washington to the individual in Montana.
A second CI agreed to purchase methamphetamine from SEAL in late August 2011. The CI had been purchasing methamphetamine in the amount of a quarter gram a day for the last 3 months from SEAL. The CI went to SEAL's house on August 24, but she was not home. The CI texted SEAL and asked where she was, SEAL replied that she was at the other individual's home. Law enforcement believed that the individual was SEAL's source of supply and that SEAL had just purchased methamphetamine from the individual to sell to the CI. SEAL was stopped in her car for talking on a cell phone and speeding, and ultimately consented to a search of her car. There were 14.3 grams of methamphetamine found that SEAL had just purchased from the individual, and numerous items of drug paraphernalia. SEAL admitted that she had been getting methamphetamine for redistribution from the individual.
SEAL and the individual conspired to distribute at least 50 grams of methamphetamine. The individual distributed methamphetamine to SEAL on August 24, and SEAL possessed it with the intent to distribute it to the CI.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that SEAL will likely serve all of the time imposed by the court. In the federal system, SEAL 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 conducted by the Billings Big Sky Safe Streets Task Force.
Allen Man Indicted for Assault and Aggravated Sexual AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that an Allen, South Dakota man has been indicted by a federal grand jury for assault with a knife on February 23, 2013, and for sexual abuse in the spring of 2012.
Curtis Dupris, age 32, was indicted by a federal grand jury on March 19, 2013 for Assault with a Dangerous Weapon, Assault Resulting in Serious Bodily Injury, and Aggravated Sexual Abuse. Dupris appeared before U.S. Magistrate Judge Veronica L. Duffy on March 22, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is up to life imprisonment and a $250,000 fine.
The charges are merely accusations and Dupris is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Dupris was remanded to the custody of the U.S. Marshal. A trial date has been set for May 28, 2013.
28 Members of Bronx Drug Trafficking Crew Charged in Manhattan Federal Court with Distributing Heroin and Crack CocaineRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Raymond W. Kelly, the Police Commissioner of the City of New York (“NYPD”), today announced charges against 28 members of the Briggs Avenue Organization, a criminal organization that controls narcotics distribution around the area of 194th Street and Briggs Avenue in the Bronx, New York, for conspiracy to distribute heroin and crack cocaine. The Indictment, which was unsealed today, also charges ten of the defendants with firearms offenses.
Of the 28 defendants named in the Indictment, 16 were taken into custody as part of a coordinated operation involving federal, state, and local law enforcement officers. Four of the remaining defendants are in state custody on other charges, two are in federal custody, and six are at large. The defendants who were taken into custody today were presented and arraigned in Manhattan federal court this afternoon before U.S. Magistrate Judge Kevin Nathaniel Fox. U.S. District Judge Shira A. Scheindlin is assigned to the case.
Manhattan U.S. Attorney Preet Bharara said: “Step-by-step and case-by-case, this Office, along with our law enforcement partners is doing everything within its power to eliminate the scourge of gangs along with the narcotics trafficking and violence that are tools of their trade. Today’s indictment of 28 members of this alleged criminal organization is the latest in our campaign to give the streets of the Southern District back to its residents.”
FBI Assistant Director-in-Charge George Venizelos said: “It is almost axiomatic that where there are drugs there will be guns. Drug trafficking organizations use guns and violence to secure turf and intimidate or eliminate competition. We will continue to work with the Police Department to make the city safer and more secure, and we will do it neighborhood by neighborhood.”
NYPD Commissioner Raymond W. Kelly said: “NYPD officers routinely risk their own lives to improve public safety for New Yorkers, and this investigation of a violent drug trafficking crew is no exception. The subjects in this case possessed and sold assault weapons to police, and used threats of violence to bolster their business of exploiting drug addicts, until the NYPD and federal partners stepped in. I commend the detectives in this case, especially those working undercover, as well as FBI investigators and prosecutors in the U.S. Attorney's office, on their efforts to return peace to law-abiding residents of the Bronx.”
As alleged in the Indictment and other documents filed in Manhattan federal court:
Members of the Briggs Organization have been engaged in the sale of heroin and crack cocaine since 2008. Between May 2012 and March 2013, several NYPD officers, working in an undercover capacity (the “UCs”) made approximately 21 separate purchases of heroin from at least 18 different members of the Briggs Organization. On each of those occasions, members of the Briggs Organization sold heroin to UCs which was branded with one of the Briggs Organization's stamps, including, “Oh Yeah” and “Fugitive.” During the course of this investigation, the UCs purchased over 900 “bundles” of heroin and firearms, including an AK-47 assault rifle and an UZI 9mm machine gun. In the course of the charged conspiracy, members of the drug trafficking organization used firearms, threats of violence and violence to secure and enforce their drug territory.
MARK ALLIE, JOSE VERA, JONATHAN SAMBULA, GUILLERMO ORTIZ, MICHAEL ORTIZ, JAMAINE TAYLOR, RACHEL DIAZ, CHRISTIAN FABRE, DAMON GROOMS, ROBERT HENDERSON, NOEL FELICIANO, JOSE AVILES, JONATHAN MIRABAL, ANDRE CUNNINGHAM, HARANAKK DINGLE, LUIS GUZMAN, ZOA BRIGGS, ROBERT TORRES, DARNELL HOPKINS, JELFREY GUTIERREZ, JASON LEWIS, MAX JORDAN, EDWARD ALEXIS MEDRANO, LUZ FIGUEROA, FNU LNU, a/k/a “Kat,” MICHAEL McDUFFIE, and DAVID WILSON, are charged with conspiring to distribute and possessing with intent to distribute heroin and crack cocaine.
ALLIE, SAMBULA, ORTIZ, TAYLOR, GROOMS, CUNNINGHAM, JORDAN, FIGUEROA, FNU LNU, a/k/a “Kat,” are also charged with possessing, brandishing and discharging firearms in connection with the drug crimes.
STEVE RAMSNAMY is charged with being a felon in possession of a firearm, specifically an AK-47 assault rifle.
A chart containing the ages, residency information, and charges against the defendants, as well as the maximum penalties they face is attached.
Mr. Bharara praised the outstanding investigative work of the FBI and the NYPD. He added that the investigation is continuing.
The prosecution of this case is being overseen by the Office’s Violent Crimes Unit. Assistant United States Attorneys Jessica Ortiz and Jessica Masella are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Click here to view chart(s)
U.S. v. Allie, Mark et al. Indictment
12 Defendants Charged with Federal Crimes for Stolen Identity Tax Fraud SchemeRead the Press Release
Law Enforcement Officers Arrest 23 on Federal and State Charges
STATESBORO, GA: The federal grand jury sitting in Savannah, Georgia returned six indictments yesterday charging 12 defendants with 115 violations of federal law involving fraudulent tax returns. The federal crimes charged in these indictments range from a conspiracy to defraud the Internal Revenue Service to identity theft from medical records. All of these indictments allege that the defendants illicitly obtained personal identifiers, such as names, dates of birth, and Social Security numbers, and used these means of identification to prepare and submit fraudulent tax returns in order to obtain tax refunds which were then converted to the defendants’ use.
Based on these federal charges and related state crimes, law enforcement officials are arresting 21 individuals today in Georgia, one defendant in Ohio, and one defendant in Florida, who are listed below. These arrests are part of the same long-term investigation which led to multiple search warrants being executed in Statesboro, Georgia in September 2012. Initial federal court appearances for the federally indicted defendants who were arrested in Statesboro, Georgia are scheduled for April 4, 2013 in Savannah, Georgia.
United States Attorney Edward J. Tarver said, “These indictments and arrests demonstrate the commitment of the United States Attorney’s Office to protecting the privacy of medical records and the hard-earned money of honest taxpayers. While April 15th is traditionally seen as the end of tax season, this investigation is ongoing. Our law enforcement partners will continue to trace electronically-filed fraudulent tax returns to track down these identity thieves and put them in handcuffs.”
IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot said, “Today's announcement exemplifies IRS Criminal Investigation's intense focus and rigorous pursuit of perpetrators of identity theft and refund fraud. IRS is extremely grateful for the cooperation and assistance we have received from our partners at the local, state and federal level. Be assured that IRS Criminal Investigation, with our law enforcement partners, will continue to be proactive in the investigation of those individuals who engage in similar behavior.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “Today’s extensive joint law enforcement actions resulting in almost two dozen arrests demonstrates the growing problem involving tax refund related fraud and, more importantly, the growing law enforcement response to address it. The FBI will continue to work with its various law enforcement partners, to include providing additional resources, to disrupt such groups engaged in these types of tax fraud activities.”
Statesboro Director of Public Safety Wendell Turner said, “The Statesboro Police Department has been working with our local and federal counterparts to apprehend the persons responsible for defrauding the government and individuals through a variety of criminal schemes. We are very proud of these partnerships and the results they yield for our citizens. This investigation is just another example of everyone working together, sharing resources, information and expertise for the common good of our community.”
If convicted, each federal defendant faces a maximum penalty of twenty years imprisonment for the conspiracy charge, twenty years imprisonment for each count of filing fraudulent tax returns, ten years imprisonment for the charge of misusing medical records, and a two-year mandatory, consecutive prison sentence for each charge of aggravated identity theft. Each of these charges also carries a fine of up to $250,000.
United States Attorney Edward J. Tarver emphasized that an indictment is only an accusation and is not evidence of guilt. The defendants are entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
FBI Special Agent Marcus Kirkland, IRS Special Agent Gwen Weston, and SPD Sgt. James Winskey, assisted by their agencies’ colleagues, are conducting the investigation which led to these indictments and arrests. Also assisting in today’s arrests are the U.S. Secret Service, Georgia Bureau of Investigation, Georgia State Probation Office, and the sheriff’s offices for Bulloch and Richmond counties. Assistant United States Attorneys David Stewart and Lamont A. Belk are the federal prosecutors in these cases. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 341-7842.
List of 12 Federal Defendants with their age and current residence
ERICA BALDWIN, 31, of Statesboro, Georgia
TRACY DENSON, 44, of Statesboro, Georgia
SHAKITA EASON, 30, of Statesboro, Georgia
YOLANDA EDMOND, 36, of Statesboro, Georgia
GLORIA EVANS, 44, of Statesboro, Georgia
JOSHUA MINCEY, 20, of Statesboro, Georgia
PORSCHE PINKNEY, 19, of Augusta, Georgia
DWAN SCOTT, 32, of Statesboro, Georgia
JENNA SCOTT, 28, of Jacksonville, Florida
GREGORY SMITH, 21, of Statesboro, Georgia
TIDAESHA TAYLOR, 27, of College Park, Georgia
ANDREA WEBB, 31,of Register, GeorgiaList of 11 Individuals Arrested on State Warrants with their age and current residence
SANTRAVIS JERROD BROWN, 23, of Statesboro, Georgia
REGINALD RAYNARD ELLISON, 29, of Statesboro, Georgia
SANCHEZ ORTEGA HARDEN, 28, of Statesboro, Georgia
CHRYSTAL N. HARLIE, 32, of Statesboro, Georgia
VICTORIA QUINN JOHNSON (BALDWIN), 28, of Statesboro, Georgia
SEAN LEE, 34, of Statesboro, Georgia
MYRON KELSEY RAWLS, 30, of Statesboro, Georgia
VERA RICHMOND, 69, of Statesboro, Georgia
LANIKA LOYONDA WALDEN (MINCEY), 37, of Statesboro, Georgia
MELISSA SHANTEL WHITFIELD, 33, of Statesboro, Georgia
LASHARETT GENET WILKERSON, 30, of Statesboro, Georgia
Tuesday 2 April 2013
White Horse Man Sentenced on Assault ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that a White Horse, South Dakota man convicted of Assault Resulting in Serious Bodily Injury was sentenced on April 1, 2013 by U.S. District Judge Roberto A. Lange.
Cliff Marshall, Jr., age 35, was sentenced to 15 months imprisonment, 18 months of supervised release and a $100 special assessment. The court ordered that the issue of restitution remain open for 60 days. A restitution hearing will be set within 90 days to resolve any potential restitution amounts.
Marshall was indicted by a federal grand jury in August of 2012. He plead guilty to the Indictment on January 9, 2013.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy Morley prosecuted the case.
Marshall was immediately turned over to the custody of the U.S. Marshal to begin serving his sentence.
Waterbury Man Admits Role in Meth Distribution RingRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, announced that KEVIN WALLIN, 61, of Waterbury, pleaded guilty today before Senior United States District Judge Alfred V. Covello in Hartford to one count of conspiracy to distribute 500 grams or more of a mixture and substance containing methamphetamine (“meth”).
According to court documents and statements made in court, this matter stems from a joint investigation by the Drug Enforcement Administration and the Connecticut State Police’s Statewide Narcotics Task Force. The investigation, which included the use of court-authorized wiretaps, controlled purchases of meth, physical surveillance and the use of an undercover officer, revealed that WALLIN received shipments of meth from individuals in California on consignment with the understanding that he would pay his sources with proceeds generated by his distribution of the drug. After receiving the shipments of meth, he distributed the drug to other dealers and sold it to his own customers.
On six occasions between September 2012 and January 2013, WALLIN sold meth to the undercover officer.
In pleading guilty, WALLIN admitted that he received and distributed 1.7 kilograms of meth.
Judge Covello has scheduled sentencing for June 25, 2013, at which time WALLIN faces a maximum term of imprisonment of life and a fine of up to $10 million.
WALLIN has been detained since his arrest on January 3, 2013. A court-authorized search of WALLIN’s residence on that date revealed meth, drug paraphernalia and drug packaging materials.
Four other individuals have been charged as a result of this investigation and are currently awaiting trial. As to these defendants, U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being prosecuted by Assistant United States Attorneys Patrick Caruso and H. Gordon Hall.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Washington Man Indicted on Federal Hate Crime Charge Related to Racially-motivated AssaultRead the Press Release
The Department of Justice today announced that a federal grand jury sitting in Seattle has indicted Jamie Larson, 49, on a federal hate crime charge relating to a racially-motivated assault of a 50-year-old Sikh man.
Larson has been charged with one count of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act that was enacted in October 2009. The indictment alleges that on Oct. 17, 2012, the subject assaulted the victim, based upon the victim’s actual and perceived race, color and national origin, which included Middle Eastern and Arab descent. The defendant was arrested at the scene of the attack after a witness called 911.
The charge carries a statutory maximum of 10 years in prison.
The Shepard-Byrd law criminalizes acts of physical violence causing bodily injury motivated by any person’s actual or perceived race, color, national origin, religion, sexual orientation, gender, gender identity or disability.
The matter is being investigated by the Seattle Division of the FBI. The case is being prosecuted by Assistant U.S. Attorney Bruce F. Miyake of the U.S. Attorney’s Office for the Western District of Washington and Trial Attorney Nicholas Durham of the U.S. Department of Justice’s Civil Rights Division.
An indictment is merely an accusation, and the subject is presumed innocent unless proven guilty.
Washington Man Indicted on Federal Hate Crime Charge Related to Racially-Motivated AssaultRead the Press Release
WASHINGTON – The Department of Justice today announced that a federal grand jury sitting in Seattle has indicted Jamie Larson, 49, on a federal hate crime charge relating to a racially-motivated assault of a 50-year-old Sikh man.
“Attacks such as this one, based on prejudice and racial hate, are contrary to who we are and violate the law,” said U.S. Attorney Jenny A. Durkan. “Protecting the civil rights of all the members of our community is a top priority for our office.”
Jamie Larson has been charged with one count of violating the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act that was enacted in October 2009. The indictment alleges that on Oct. 17, 2012, the subject assaulted the victim, based upon the victim’s actual and perceived race, color and national origin, which included Middle Eastern and Arab descent. The defendant was arrested at the scene of the attack after a witness called 911.
Larson will appear in U.S. District Court in Seattle at 1:30 today.
The charge carries a statutory maximum of 10 years in prison.
The Shepard-Byrd law criminalizes acts of physical violence causing bodily injury motivated by any person’s actual or perceived race, color, national origin, religion, sexual orientation, gender, gender identity or disability.
The matter is being investigated by the Seattle Division of the FBI. The case is being prosecuted by Assistant U.S. Attorney Bruce F. Miyake of the U.S. Attorney’s Office for the Western District of Washington and Trial Attorney Nicholas Durham of the U.S. Department of Justice’s Civil Rights Division.
An indictment is merely an accusation, and the subject is presumed innocent unless proven guilty.
Vice President of Frederick Mail Preparation Service Pleads Guilty to Fraud Resulting in Losses of over $628,500Read the Press Release
Majority of Victims Were Non-Profit Clients Who Relied on the Mailings to Raise FundsBaltimore, Maryland – Stephen Reid, age 50, of Frederick, Maryland, pleaded guilty today to conspiracy to commit mail and wire fraud relating to the failure to provide contracted-for services to clients of Reid’s company, RMS Direct, Inc., resulting in losses of over $628,500.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division.
“In addition to defrauding postal customers, this scheme jeopardized the reputation of the U.S. Postal Service with its customers,” said Gary Barksdale, Inspector in Charge, Washington Division, U.S. Postal Inspection Service. Mr. Barksdale continued, “Through investigations such as this, postal inspectors will continue to protect postal customers and ensure thePostalService retains its reputation as the most trusted government agency.”
According to his plea agreement, Reid was the vice president and part-owner of RMS Direct, Inc., a mail preparation service located in Frederick, Maryland, with over 200 clients and revenues of over $5 million per year. Under the supervision of Reid and his co-conspirator, RMS entered into contracts to prepare and submit to the U.S. Postal Service (USPS), large-volume mailings, typically made up of pamphlets, brochures, books, and other printed materials.
RMS clients were primarily non-profit corporations that relied upon the mailings sent through RMS to raise funds, and the timing of the mailings was essential to their fundraising efforts. RMS assembled the mailings, applied the postage and addresses, and organized the pieces of mail for submission to the USPS. RMS submitted the mailings to a full-time USPS Acceptance Clerk that was assigned to its office. As proof that the mailings went out, RMS then emailed its clients either of two USPS documents – a postage statement signed and certified by the USPS Acceptance Clerk or a Mailing Transaction Receipt printed from an online USPS database. Both documents included information as to the dates, times, number of pieces of mail and postage paid. Once the RMS client received a statement, it would remit payment to RMS.
Reid admitted that the conspiracy began in 2005, when he and his co-conspirator falsified postage statements to misrepresent to RMS clients that mailings were being sent out in a timely fashion when, in fact, the mailings were late. Beginning in 2009, Reid and his co-conspirator selected certain mailings or portions of mailings that would not be submitted at all to USPS for delivery. Reid and his co-conspirator made sure that the documentation sent to the RMS client was falsified to indicate that the full mailing had been submitted, thereby causing the client to overpay RMS for postage and services.
To accomplish the fraud, Reid, his co-conspirator, and RMS employees operating at their direction, generated false postage statements, forged the signature of the USPS Acceptance Clerk and created a false impression of the special USPS date stamp used on the postage statement. In 2006, RMS employees made an unauthorized copy of the USPS Acceptance Clerk’s key to the filing cabinet where the official date stamp was kept. From that time until 2010, Reid, his co-conspirator, and RMS employees operating at their direction used the copied key to gain access to the date stamp when the USPS Acceptance Clerk was not present in order to falsify postage statements. Beginning in 2010, when the computer-generated Mailing Transaction Receipt was adopted by the USPS to certify mailings, Reid and his co-conspirator falsified those as well, using a document that had been created, which, when printed, looked identical to the USPS Mailing Transaction Receipt. Reid and his co-conspirator directed RMS employees to use this document to create false Mailing Transaction Receipts, which were then sent to RMS clients as proof of the timely and complete submission of their mailings.
Reid and his co-conspirator took other measures to conceal the fraud and prolong the victimization of RMS clients. For example, RMS clients often included pieces of mail known as “seeds,” in the mailings they provided to RMS. These “seeds” were sent to particular individuals or addresses so that the client could track the timing and appearance of the mailing. Reid’s co-conspirator directed RMS employees to make sure to deliver the “seeds” from the mailings that were going out late or were not otherwise submitted to the USPS, in order to conceal the fraud.
As a result of the scheme, at least 19 victims lost a total of $628,581.48.
Reid faces a maximum sentence of 20 years in prison and a fine of $250,000. As part of his plea agreement, Reid will be required to forfeit $628,581.48. U.S. District Judge Catherine C. Blake scheduled sentencing for July 12, 2013 at 9:00 a.m.
United States Attorney Rod J. Rosenstein praised the U.S. Postal Inspection Service for its work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney Sean C. Marlaire, who is prosecuting the case.
Two Former Executives of Athletic Equipment Company Admit Extensive Fraud on New Jersey SchoolsRead the Press Release
NEWARK, N.J. – The former chief financial officer and chief executive officer of a leading supplier of athletic equipment and reconditioning services today admitted their roles in a conspiracy to defraud schools in New Jersey and elsewhere, U.S. Attorney Paul J. Fishman announced.
Mitchell Kurlander, 54, of Allentown, Pa., and his father-in-law, Alan Abeshaus, 81, of Highland Beach, Fla., each pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to one count of mail and wire fraud conspiracy. They were indicted in May 2011.
“The long-running fraud Kurlander and Abeshaus ran cheated students, teachers and the taxpayers who support them,” U.S. Attorney Fishman said. “Just as offensive is the conduct of school officials who turned a blind eye to the deceit in exchange for cash payoffs and gifts. The admissions of guilt by these two main defendants will help turn a page on this sorry chapter.”
“For years, Circle Systems Group Inc. utilized deceptive business practices to defraud schools throughout New Jersey and the United States for their own personal gain,” FBI Acting Special Agent in Charge David Velazquez said. “These well-orchestrated schemes not only affected the schools they were defrauding, but innocent students and taxpayers as well. The pleas entered today are indicative of the continuing efforts of the FBI and its law enforcement partners to identify and fully investigate complex financial fraud schemes. "
“The corporate executives and the educators who participated in this scheme not only abused their position of trust for personal gain, but did so at the expense of students at schools across the country. That is completely unacceptable,” said William Hamel, Assistant Inspector General for Investigations with the U.S. Department of Education. “I’m proud of the work of OIG Special Agents and our partners in law enforcement for holding these individuals accountable for their selfish and reckless actions.”
According to documents filed in the case and statements made in court:
Circle System Group Inc. (Circle) sold and reconditioned athletic equipment, uniforms, and apparel. Although its services were marketed nationally, a large portion of Circle’s business focused on middle schools, high schools, colleges, and youth sports programs in New Jersey. Circle’s business depended primarily on a sales force that attempted to maintain relationships with the school officials—including athletic directors, equipment managers, trainers, and coaches—who were responsible for purchasing athletic equipment and reconditioning services on behalf of the schools.
From at least 1997 to June 2007, Circle engaged in a number of business practices aimed at defrauding schools, including keeping duplicate payments by schools that should have been returned or credited back to schools, submitting fake quotes to school officials, and submitting fraudulent invoices to schools.
Circle sent invoices and monthly statements of account to schools. Schools often paid both the invoices and statements, paying twice for the same items or services. At the direction of Kurlander and Abeshaus, Circle improperly retained at least $822,000 in overpayments from various schools in New Jersey and elsewhere and converted these overpayments to the personal use and benefit of Abeshaus.
Circle and its sales staff often would provide multiple price quotes, including some that appeared to come from other companies, to allow schools with requirements to obtain multiple price quotes to justify a contract with Circle. Using quote forms with the letterhead of other companies, Circle administrative staff would prepare fake, higher quotes at the direction of Kurlander and others. Circle submitted numerous such fake quotes to schools in New Jersey and elsewhere during the course of the conspiracy.
As a routine business practice, and to ingratiate Circle with school officials, Kurlander authorized Circle employees to make gifts and donations to schools and school officials, and often would take officials on golf outings and to meals. Kurlander routinely inflated Circle’s invoices for services and goods to those schools to reimburse Circle for these donations and gifts. Gifts provided by Circle to school officials included computers, digital cameras, flat-screen TVs, golf clubs, leather jackets and other personal apparel.
Circle sometimes also submitted bid packages and price quotations for goods and reconditioning services that were lower than the prices that Circle intended to charge schools. After Circle obtained a school’s business, Circle would, at Kurlander’s direction, garner its desired profits by fraudulently inflating the quantity or nature of the reconditioning work or by fraudulently inflating other invoices to those schools for reconditioning services.
The conspiracy count to which the defendants pleaded guilty are punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross pecuniary gain or loss from the offense. Sentencing is scheduled for July 9, 2013.
Three other individuals previously pleaded guilty to their involvement in the conspiracy. On Dec. 22, 2008, former Circle president David Drill pleaded guilty to conspiring to defraud, among other Circle customers, various New Jersey schools. Two school officials—former Long Branch High School Athletic Director Charles Ferrara Jr. and former Elizabeth High School official Robert Firestone—pleaded guilty on Nov. 22, 2010, and Jan. 5, 2011, respectively, to participating in the conspiracy. Ferrara and Firestone admitted, among other things, that they received items from Circle for their personal use and directed Circle to fraudulently bill the cost of those items back to their respective schools. All three await sentencing before U.S. District Judge Dickinson R. Debevoise.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velasquez in Newark; and U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Steven Anderson of the Mid-Atlantic region and Special Agent in Charge Brian Hickey of the Northeastern Region, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr. and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
13-147
Defense counsel:
Kurlander: William A. DeStefano Esq., Philadelphia
Abeshaus: Kevin H. Marino Esq., Chatham, N.J.Kurlander, Mitchell, Et al. Indictment (Circle Systems)
Tonawada Man Sentenced for Cocaine TraffickingRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Keith Simmons, 35, of Tonawanda, N.Y., who was convicted of cocaine trafficking, was sentenced to eight years in prison by U.S. District Judge Richard J. Arcara.
According to Assistant U.S. Attorney Michael L. McCabe, who handled the case, Simmons managed a drug-trafficking organization in Niagara County and northern Erie County which distributed at least 50 kilograms of cocaine from 2004 to the date of his arrest in July 2009. Simmons and other members of this drug trafficking organization sold cocaine at many locations, including Papa Joe's Restaurant on Niagara Falls Boulevard and J.T. Wheatfield's Bar and Restaurant on Ward Road in Wheatfield.Simmons was among 21 defendants arrested in July of 2009. All have been convicted.
Today's sentencing is the culmination of an investigation on the part of Special Agents from the Federal Bureau of Investigation, under the direction of Christopher M. Piehota, officers from the Niagara County Drug Task Force, under the direction of Sheriff James Votour, the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto the Amherst Police Department, under the direction of Chief John Askey.Three Mexican Nationals Sentenced in Meth Trafficking CaseRead the Press Release
Three Co-defendants Await Sentencing
POCATELLO – Three co-defendants in Eastern Idaho were sentenced in United States District Court yesterday for drug trafficking and related charges, U.S. Attorney Wendy J. Olson announced today. The defendants appeared before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
Juan Aguilar, 60, a Mexican national, formerly residing in San Jose, California, was sentenced to 120 months in federal prison followed by five years of supervised release for possession with intent to distribute in excess of 50 grams of methamphetamine. Aguilar was also ordered to pay a $1,000 fine. He pleaded guilty to the charge on December 19, 2012.
Juan Mendoza, 41, of Menan, Idaho, was sentenced to 102 months in prison followed by five years of supervised release for possession with intent to distribute in excess of 50 grams of methamphetamine. Mendoza was also ordered to pay a $1,000 fine. He pleaded guilty on December 18.
Jose Rios-Jimenez, 62, a Mexican national formerly living in Menan, Idaho, was sentenced to time served – 16 months – for possession of a firearm by a prohibited person and illegal entry of a removed alien. He was ordered to forfeit the handgun he illegally possessed. Rio-Jimenez pleaded guilty to the charges on December 18. He will be subject to deportation.
Three co-defendants have pleaded guilty to related charges and are awaiting sentencing. Raymond Camacho, a/k/a Jesus Mendoza Nunez, 57, a Mexican national, pleaded guilty on January 24, 2013, to possession with intent to distribute in excess of 50 grams of methamphetamine. Douglas I. McAdam, 47, of Pocatello, pleaded guilty on February 11 to possession with intent to distribute in excess of five grams of methamphetamine. Camacho and McAdam are set for sentencing on April 29. Marilyn N. Leones, 42, of Pocatello, pleaded guilty to possession with intent to distribute methamphetamine; she is set for sentencing on May 28. Eldon K. McConnell, 48, of Pocatello, is scheduled for a competency hearing on April 4.
According to the plea agreements, on November 24, 2011, Camacho and Aguilar were in a vehicle stopped by law enforcement officers in Bannock County, Idaho. A search of the vehicle located approximately three pounds of methamphetamine. Forensic analysis later determined the substance contained in excess of 50 grams of actual methamphetamine. Camacho and Aguilar admitted to knowing the methamphetamine was in the vehicle and possessed it with the intention of distributing it to others.
During execution of a search warrant at Mendoza’s residence in Jefferson County, Idaho, law enforcement discovered various controlled substances. Mendoza later admitted that he possessed the methamphetamine intending to distribute it to others and that he had previously distributed methamphetamine in the Pocatello area. During execution of a second search warrant, at Rios-Jimenez’s residence, also in Jefferson County, law enforcement discovered a Hi-Point.380 caliber pistol, which Rios-Jimenez admitted possessing. Authorities also discovered that Rios-Jimenez was illegally in the United States, having been lawfully removed on December 7, 1990.
The case was investigated by Idaho State Police, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Chubbuck Police Department.
Superceding Indictment Filed, Additional Defendant Charged in Drug ConspiracyRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Rochester has returned a nine count superseding indictment charging an additional defendant and additional crimes in a Rochester area drug conspiracy.
Devin Allen-Furtick, aka “Little Cuz,” 20, is charged with conspiracy to possess with intent to distribute and to distribute 280 or more grams of cocaine base, a quantity of cocaine and a quantity of marijuana. In addition, he is charged with possession with intent to distribute 28 grams or more of cocaine base.
In February 2013, the following defendants were also charged with conspiracy to possess with intent to distribute and to distribute cocaine base, cocaine and marijuana, along with other drug related charges: Tyshawn Simmons, aka “Ty,” 30; Tashaka Mitchum, aka “Sharky,” 22; Marquis McMillian, aka “Dap,” 21; Melvin Hill, aka “Pumpkin,” Franklin Brock Jr., aka “Little Frank,” 19; Franklin Brock Sr., 39; Patrick Christner, 28; Tina McDonald, 40; Schmillion Weaver, 29 and Ciarra Crane, 23. The charge carries a mandatory minimum term of 10 years in prison, a maximum of life, a fine of $10,000,000, or both.
Defendants Simmons, McMillian and Brock are also charged with attempting to kill a person in retaliation for that person’s cooperation in a federal investigation and with unlawfully using a firearm to commit the shooting. These charges carry maximum penalties of 30 years and life in prison, respectively. Marquis McMillian is charged with attempting to kill a second person to prevent that person from testifying in connection with the first shooting. He is also charged with unlawfully using a firearm to commit that second shooting. These charges also carry maximum penalties of 30 years and life in prison, respectively.
Defendants Simmons, Mitchum and McMillian are also charged with unlawfully possessing firearms in furtherance of the drug trafficking conspiracy. The gun charge carries a mandatory minimum of five years in prison, a maximum of life, a fine of $250,000, or both.
Assistant U.S. Attorney Everardo A. Rodriguez, who is handling the case, stated that the addition of Furtick as a defendant and the additional charge against him stem from the continuation of a long-term investigation into the drug trafficking activities in the Rochester area of Simmons and the other charged defendants. The investigation remains ongoing with respect to potential additional charges and additional defendants.
Devin Allen-Furtick was arraigned before Federal Magistrate Judge Marian W. Payson today. He pleaded not guilty to the charges against him. Furtick is being held pending a detention hearing which is scheduled for Friday, April 5 at 2:00 p.m. Defendants Simmons, Mitchum, Brock and McMillan are also detained.
The superseding indictment is the result of an investigation headed by the Rochester Police Department, under the direction of Chief James Sheppard, with assistance from the United States Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division. Other law enforcement agencies assisted in the arrests including the United States Marshal’s Service, under the direction of Marshal Charles Salina and the New York State Division of Parole, under the direction of Charles Bour.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Statement of Manhattan U.S. Attorney Preet Bharara on the Federal Corruption Charges Unsealed Against New York State Senator Malcolm Smith, New York City Council Member Daniel Halloran, and Four OthersRead the Press Release
“Today’s charges demonstrate, once again, that a show-me-the-money culture seems to pervade every level of New York government. The complaint describes an unappetizing smorgasbord of graft and greed involving six officials who together built a corridor of corruption stretching from Queens and the Bronx to Rockland County and all the way up to Albany itself. As alleged, Senator Malcolm Smith tried to bribe his way to a shot at Gracie Mansion – Smith drew up the game plan and Councilman Halloran essentially quarterbacked that drive by finding party chairmen who were wide open to receiving bribes. After the string of public corruption scandals that we have brought to light, many may rightly resign themselves to the sad truth that perhaps the most powerful special interest in politics is self-interest. We will continue pursuing and punishing every corrupt official we find, but the public corruption crisis in New York is more than a prosecutor’s problem.”
U.S. v. Malcolm Smith, et al. Complaint