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29 April 2013
Former Beckley Police Dept. Evidence Technician Sentenced to Four Years’ Probation for Stealing Prescription PainkillersRead the Press Release
BECKLEY, W.Va. – Gabriella Brown, the former Beckley Police Department evidence technician, was sentenced today to four years’ probation for stealing oxycodone pills from the Department’s evidence storage room in August 2012. Brown was sentenced by Senior United States District Judge David A. Faber. Brown, 31, of Beckley, W.Va., previously pleaded guilty in December 2012 to obtaining controlled substances by misrepresentation, fraud, forgery, deception and subterfuge.
Brown’s crime prompted the dismissal of a number of drug prosecutions that involved evidence stored in the Beckley Police Department evidence room.
The Drug Enforcement Agency Tactical Diversion Squad was in charge of the investigation. Assistant United States Attorney Steven I. Loew handled the prosecution.
This case was being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Florida Woman Pleads Guilty to Running Stolen Identity Fax Fraud SchemeRead the Press Release
St. Louis, MO -TANIA HENDERSON, of Wesley Chapel, Florida, pled guilty to filing false tax returns using stolen identification of other people. She entered her plea in federal court in St. Louis before United States District Judge Carol E. Jackson.
According to court documents, between July and November 2012, Henderson’s plan involved obtaining the personal information of individuals, including their names and social security account numbers, and using the information to submit tax returns in the names of those individuals whose identities she had stolen. She manipulated the numbers on those tax returns so that the taxpayer would be due a refund-- typically in the $7,000-$8,000 range and used family and friends to receive and liquidate these refunds.
U.S. Attorney Richard G. Callahan observed that, "It used to be that most of the people we prosecuted for tax fraud were cheating on their own tax returns. Now, most of the people we are prosecuting for tax fraud are cheating with other people's tax returns."
The prosecution claims at least 236 bogus tax returns were filed in the names of victims of identity theft. Additionally, nearly 200 other individuals had their stolen identities used elsewhere in these returns. In all, the tax returns generated at least $1,824,919 in illegal refunds. The IRS was able to recall or intercept some of these refunds before they came into the control of Henderson and her network of friends and family. However, approximately $1,363,384 made it into her control, which she shared with her friends and family. She also used it to rent a luxury home in suburban Tampa, Florida, and purchase BMW and Jaguar sports cars and expensive electronics.
"The defendants who perpetrated this scheme systematically defrauded the government and the taxpaying public," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. "Protecting taxpayer money is a matter we take very seriously, and IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by preparing false claims for tax refunds."
Henderson pled guilty to one felony count of theft/embezzlement of public money and four counts of aggravated identity theft. She now faces a maximum penalty of ten years in prison and/or fines up to $250,000 for theft of public money. Each count of aggravated identity theft carries a penalty of two years, which must run consecutively to any other sentence. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges. Sentencing has been set for July 30, 2013.Three other individuals have pleaded guilty to their role in this scheme. Patrina Taylor, Creve Coeur, pled guilty in March to stealing government funds as part of the scheme. Taylor admitted she attempted to cash a United States treasury check that was generated as a tax refund for a return filed in the name of a deceased individual and made payable to a second deceased individual. Sentencing for Taylor has been set for June 2013.
In addition to Taylor, among those enlisted to receive and liquidate refunds were Jason
Bibbs and Betty Kirkendoll, both of whom resided in the Eastern District of Missouri. Bibbs and Kirkendoll have previously entered guilty pleas and await sentencing.Henderson’s husband, Dwayne Denard Johnson, also of Wesley Chapel, Florida, has been indicted for theft of government funds and aggravated identity theft and awaits trial in the Eastern District of Missouri. As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Mr. Johnson is presumed to be innocent unless and until proven guilty.
This case was investigated by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.Five Men Charged with Running Crack Cocaine Trafficking Operation in Bernalillo and Santa Fe CountiesRead the Press Release
ALBUQUERQUE – Five men have been indicted on federal narcotics and firearms charges as the result of “Operation Rio Grande Stucco,” a DEA led investigation into an organization that allegedly manufactured and distributed cocaine base, more commonly known as “crack” or “crack cocaine,” in Albuquerque, N.M., and Santa Fe, N.M.
The five-count indictment, which was filed under seal on April 9, 2013, charges Gabriel Mirabal, 31, Dominic Anaya, 32, and Sam Elyicio, 36, of Albuquerque, and Michael Jaramillo, 22, and Robert Romero, 25, of Santa Fe, with conspiracy to distribute cocaine base in Bernalillo and Santa Fe Counties between May 2012 and April 2013. Jaramillo also is charged with distributing cocaine base in Santa Fe in March 2012 and Romero is charged with possession of cocaine base with intent to distribute in Santa Fe in July 2012. Romero also is charged with using and carrying a firearm in furtherance of a drug trafficking crime. Mirabal also is charged with possessing cocaine with intent to distribute in Albuquerque in Feb. 2013. The indictment was unsealed following the arrests of three of the defendants.
Mirabal, who was arrested on April 24, 2013, made his initial appearance in federal court on April 25, 2013 and was ordered detained pending trial following a detention hearing on April 26, 2013. Jaramillo and Elyicio were arrested on April 25, 2013 and were ordered detained pending trial following detention hearings held earlier today. Anaya and Romero, who both are currently in state custody on unrelated charges, will be transferred to federal custody to face the charges in the indictment.
If convicted of the drug trafficking charges against them, each of the defendants faces a maximum penalty of not less than five years or more than 40 years in prison. If convicted of the firearms charge, Romero faces a five year prison sentence to run consecutive to any sentence imposed on the drug trafficking charges against him. An indictment is merely an accusation. All criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA and the HIDTA Region III Drug Task Force, and is being prosecuted by Assistant U.S. Attorney Nicholas J. Ganjei. The Region III Drug Task Force is comprised of officers from the New Mexico State Police, Santa Fe Police Department and the Santa Fe County Sheriff’s Office and receives support from the HIDTA – High Intensity Drug Trafficking Area – program. HIDTA is a program of the White House Office of National Drug Control Policy that provides assistance to Federal, state, local, and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States. The investigation leading to the indictment has been designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program, a nationwide Department of Justice initiative that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
Female Human Trafficker SentencedRead the Press Release
Defendant Ran an Interstate Prostitution Ring Involving a Juvenile
ATLANTA - Jessica Loren Posey was sentenced today to serve over seven years in federal prison for transporting a 16-year-old juvenile girl to Tennessee, Kentucky, and Ohio for the purpose of prostitution.
“Child sex trafficking is an horrific crime committed by both men and women,” said United States Attorney Sally Yates. “This defendant had no regard for the vulnerability of her victim and lured her into a quick-money lifestyle that led to the juvenile’s repeated sexual exploitation. Human traffickers should take note: You will be found and prosecuted for your role in sexual exploitation.”
“The FBI will continue to make those who engage in human trafficking a priority for investigation and prosecution,” stated Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office. “Today’s sentencing of defendant Posey should provide some solace for those whom she victimized in that she has now been taken off the streets.”
According to United States Attorney Yates, the charges and other information presented in court: In or about April 2010, Posey met the juvenile girl at a party. While the victim was only 16 years old, Posey caused her to engage in prostitution. To facilitate the girl’s commercial sex acts, Posey used a laptop computer to create advertisements of the child that she placed on websites, including backpage.com; uploaded nude photographs of the juvenile on her cell phone and on a website that Posey created; arranged for customers to engage in sex acts with the victim; and rented the hotel rooms where she caused the girl to engage in prostitution. Posey also drove the juvenile, and other young women, to various locations outside Georgia to commit commercial sex acts, including Chattanooga and Knoxville, Tennessee, Ohio and Kentucky. Posey received one half of the proceeds earned by the juvenile victim and the other young women. Following Posey’s arrest, the victim returned to live with her family.
Posey, 25, of Atlanta was sentenced by United States District Judge Richard W. Story to seven years, three months in prison to be followed by five years of supervised release. She was also ordered to pay restitution in the amount of $1,200 to the minor victim, perform 100 hours of community service, and register as a sex offender. Posey was convicted of these charges on February 6, 2013, following her entry of a guilty plea.This case was investigated by Special Agents of the Federal Bureau of Investigation (FBI) with assistance from the FBI’s Metro Atlanta Child Exploitation Task Force, including the Atlanta Police Department, Gwinnett County Police Department, City of Marietta Police Department, Fulton County Police Department, Clayton County Police Department, and the Sandy Springs Police Department.
If anyone has any information about human trafficking, they are encouraged to report the information to the FBI at 404-679-9000.Assistant United States Attorneys Susan Coppedge and Richard Moultrie prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Eagle Butte Man Indicted for Firearm Violations, Larceny and Tampering with A WitnessRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota man has been indicted by a federal grand jury for Possession and Sale of a Stolen Firearm, Drug User in Possession of a Firearm, Larceny and Tampering with a Witness.
Jody Albert Hunt, age 34, was indicted by a federal grand jury on April 12, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on April 24, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 20 years in custody, a $250,000 fine, or both; 3 years of supervised release; and a $100 special assessment. Restitution may also be ordered.
The charges relate to an allegation that Hunt, while he was a drug user, stole firearms and other property from a ranch near Eagle Butte. Later, Hunt attempted to get a witness to submit false information about the case.
The charges are merely an accusation and Hunt is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Hunt was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Dodge City Gang Member Sentenced for Attempted MurderRead the Press Release
WICHITA, KAN. – A member of a Dodge City street gang targeted in a federal racketeering case has been sentenced to 10 years in federal prison for attempted murder, U.S. Attorney Barry Grissom said today.
Jason Najera, 29, Dodge City, Kan., pleaded guilty to one count of attempted murder in furtherance of racketeering. In his plea, Najera admitted that on Aug. 27, 2011, he used a knife to stab two men he mistakenly believed were members of a rival gang.
On that date, Najera accompanied co-defendant Humberto Ortiz when Ortiz went to a residence at 703 9th Avenue in Dodge City. Ortiz and Najera confronted some men they suspected of being members of the Surenos street gang. Ortiz was a member of Los Carnales Chingones and Najera was a member of Diablos Viejos, both of which were associated with the Nortenos street gang and considered Surenos their common enemies.
When a fight started, Najera used a knife to stab victims Gabriel Rivera and Carlos Ramirez. During the fight, both Rivera and Ramirez were stabbed, with Rivera’s injuries requiring a life-flight to a hospital in Wichita.
In his plea, Najera admitted that as a member of the Diablos Viejos he was part of an ongoing criminal conspiracy involving the Nortenos street gang whose members used murder, robbery, assault and acts of violence to protect and expand their operations.
In January, co-defendant Humberto Ortiz was sentenced to 46 months in federal prison.
Najera and Ortiz were among 23 defendants indicted in 2012 who were charged under the federal RICO Act (Racketeering Influenced and Corrupt Organizations Act.) The indictment marked only the second time federal prosecutors in Kansas have filed charges under RICO and VICAR (Violent Crimes in Aid of Racketeering).
Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff’s Office, the Kansas Bureau of Investigation, Assistant U.S. Attorney Aaron Smith and Assistant U.S. Attorney Lanny Welch for their work on the case.
District Man Sentenced to 23-Year Prison Term After Pleading Guilty to Charges in Two Sexual Assaults-DNA Later Tied Him to the Crimes, Including One Committed A Decade Ago-Read the Press Release
WASHINGTON – Anthony Lamont Burns, 39, of Washington, D.C., has pled guilty to charges stemming from two sexual assaults that he committed years ago, including one attack against a 14-year-old girl, U.S. Attorney Ronald C. Machen Jr. announced today.
Burns pled guilty on April 26, 2013, in the Superior Court of the District of Columbia, to charges of first-degree child sexual abuse and attempted first-degree sexual abuse. The plea, which was contingent upon the Court’s approval, called for a sentence of 23 years in prison. The Honorable Robert E. Morin approved the plea and sentenced Burns immediately. Following completion of his prison term, Burns will be placed on five years of supervised release. He also will be required to register as a sex offender for the rest of his life.
According to the government’s evidence, the teenage victim was walking in the 4300 block of Iowa Avenue NW at about 10 p.m. on Jan. 26, 2003 when an unknown man grabbed her by the neck and placed a knife to her chest. The assailant told the girl that if she yelled, he would stab her in the heart. The man forced the girl into his vehicle and then made her perform numerous sexual acts against her will. When he finished, he drove the teenager back to where he had abducted her and allowed her to exit his car and leave. She immediately ran home and reported the assault to her family. Her family, in turn, immediately notified the police.
The girl had never seen Burns before the assault and had no idea who attacked her. However, the assailant’s semen was found on the girl’s underwear, and subsequent DNA analysis, developed after Burns was convicted in 2010 of a separate felony, tied him to the crime.
DNA evidence also linked Burns to a second attack, which took place in 2006. On April 29, 2006, at about 5:45 a.m., a woman was walking in the 6400 block of Georgia Avenue NW when a stranger approached her, brandished a knife and demanded money. The woman told the man she had no money. The man then forced her to the rear of a building in the 5400 block of Georgia Avenue, where he made her lay down in a bed of mulch and raped her. When he finished, the man ordered the victim to walk toward Georgia Avenue NW. She complied, then ran to a gas station and reported that she had just been raped by a stranger at knifepoint. As in the case of the 14-year old girl, semen that was recovered from the victim was shown, through subsequent DNA analysis, to belong to Anthony Burns.
In announcing the plea, U.S. Attorney Machen praised the work of those who investigated the cases for the Metropolitan Police Department, especially the members of MPD’s Sexual Assault Unit and Youth Division. He also commended the efforts of those who worked on the matter from the U.S. Attorney’s Office, including Paralegal Specialist Jason Manuel, Victim/Witness Advocate Lezlie Richardson, and Assistant U.S. Attorneys Sharon Marcus-Kurn and Peter V. Taylor, who investigated and prosecuted this case.
13-146District Man Pleads Guilty to Second-Degree Murder While Armed in 2012 Shooting in Northeast Washington-Defendant Shot Victim in Broad Daylight at A Busy Metro Bus Stop-Read the Press Release
WASHINGTON – Detrek Baker, 24, of Washington, D.C., has pled guilty to a charge of second-degree murder while armed for the April 2012 slaying of a man at a Northeast Washington bus stop, U.S. Attorney Ronald C. Machen Jr. announced today.
Baker entered his plea on April 26, 2013 in the Superior Court of the District of Columbia. The Honorable Herbert B. Dixon, Jr. scheduled sentencing for June 28, 2013.
According to the government’s evidence, on Saturday, April 28, 2012, the victim, James Sherrod, Jr., and a friend, both 22, walked to the U5 Metro bus stop in front of Mayfair Manor, in the 700 block of Kenilworth Terrace NE. Baker, who was carrying a red, black, and grey single-strap book bag, was standing at the bus stop along with several other young men.
For nearly an hour, the victim, Baker, and others stood at the bus stop, talking. At about 1:40 p.m., without provocation or warning, Baker pulled out a gun and shot Mr. Sherrod in the head. When the victim collapsed, Baker stood over him and fired additional bullets into his body.
Immediately after the shooting, Baker ran toward 800 Kenilworth Avenue NE. Eyewitnesses observed him pause beside one of the trash dumpsters there while running away; later they directed the police to those dumpsters. Inside one of the dumpsters was a red, black, and grey single-strap book bag and a .357 revolver. Inside the revolver were five spent casings and one live round. Two bullets were recovered from Mr. Sherrod’s body during an autopsy; police determined that those bullets were fired from the .357 revolver found in the dumpster.
Individuals at the bus stop as well as several members of the community spoke with law enforcement. They reported what they had observed at the bus stop. These eyewitnesses were instrumental not only in helping the police identify Baker as the shooter within hours of the murder, but also in strengthening the evidence against him, ultimately resulting his guilty plea.
In accepting the defendant’s guilty plea, Judge Dixon asked the defendant why he shot Mr. Sherrod. Baker admitted that there was no ongoing hostility or “beef” between him and the victim; rather, he simply stated that he shot the victim because he “did not like him.”
In announcing the plea, U.S. Attorney Machen praised the work of the detectives, officers, and crime scene technicians who investigated the case for the Metropolitan Police Department. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Ethel Gregory, Marian Russell, and Kendra Johnson; Lead Paralegal Specialist Sharon Newman; Victim/Witness Advocate Marcia Rinker, and Intelligence Specialists Lawrence Grasso, Shannon Alexis, Sharon Johnson, and William Hamann. Finally, U.S. Attorney Machen recognized former Assistant U.S. Attorney J.P. Cooney and Assistant U.S. Attorney Kimberley Nielsen, who investigated and prosecuted the case.
13-147District Man Pleads Guilty to Felony Charge in Sexual Assault of Young Male Relative-One Attack Took Place in 2008 at Defendant’s Place of Employment-Read the Press Release
WASHINGTON - A 48-year-old man pled guilty today to one count of attempted first-degree child sexual abuse for sexually assaulting a young male relative in 2008, U.S. Attorney Ronald C. Machen Jr. announced.
The defendant, of Laurel, Md., is not identified here to protect the privacy of his victim. He entered the plea in the Superior Court of the District of Columbia. The Honorable Robert E. Morin scheduled sentencing for July 12, 2013. The defendant faces up to 15 years in prison.
According to the government’s evidence, the defendant repeatedly sexually abused the victim in 2008, when the child was 9 or 10 years old. One of the sexual assaults took place at the defendant’s place of employment in Washington, D.C. In May of 2009, the victim reported the abuse to his mother and then to law enforcement.
In announcing the plea, U.S. Attorney Machen expressed his appreciation to the Metropolitan Police Department, Youth Investigations Unit. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Donhue Griffith, Victim/Witness Advocate Melissa Milam, and the Litigation Support Unit, including Paul Howell. He acknowledged the outstanding work of the Children’s Advocacy Center and specifically, Karen Giannakoulias, who provided critical services and treatment to the victim. Finally, U.S. Attorney Machen praised the work of Assistant U.S. Attorney Lindsay Suttenberg, who indicted the case.
13-149District Man Found Guilty of First-Degree Murder While Armed and Other Charges in Shooting That Killed One Teenager and Wounded Another in Northwest Washington-Attack Took Place on Memorial Day of 2011-Read the Press Release
WASHINGTON - Eugene A. Kelly, 28, of Washington, D.C., was found guilty by a jury today of first-degree murder while armed, assault with intent to kill while armed, and related charges for the shooting of two teenagers in Northwest Washington on Memorial Day of 2011, U.S. Attorney Ronald C. Machen Jr. announced.
The verdict followed a trial in the Superior Court of the District of Columbia. The Honorable Herbert B. Dixon, Jr. scheduled sentencing for Aug. 6, 2013.
According to the government’s evidence, on May 30, 2011, at about 10:15 p.m., the victims, two 15-year-old boys, were walking home in the 1400 block of New Jersey Avenue NW. As they were walking, Kelly opened fire and shot both teenagers. Isaiah Harris was killed by a single gunshot wound to his body. The surviving victim was shot in the leg.
Just before the shooting, Kelly, who was riding a small trick bike, had stopped to talk to a neighborhood acquaintance. The defendant mentioned his brother’s 2008 murder, and stated his belief that someone from the nearby 5th and O Streets neighborhood was responsible. Kelly announced that someone was going to pay for his brother’s murder, and said that he was going to retrieve a gun. He then retrieved a gun by a nearby dumpster and rode east on P Street toward New Jersey Avenue. Seconds later, the defendant fired multiple times, targeting the two teens.
The victims did not know Kelly and had no knowledge of or involvement in the 2008 murder of his brother. They were simply walking from the area of 5th and O Streets NW.
During a search warrant of the defendant’s home two days later, law enforcement officers found a small trick bike that matched the witnesses’ descriptions of the bike used by the shooter, as well as ammunition consistent with the type used in the murder.
Finally, on Sept. 14, 2011, a guard at the District of Columbia Jail found a note taken from an inmate during a routine morning check. The note, signed by Kelly with his jail identification number, provided a witness’s name and address, and identified members of the witness’s family. A handwriting expert from the FBI concluded that Kelly wrote the note.
In announcing the verdicts, U.S. Attorney Machen commended the work of the Metropolitan Police Department, the FBI, and the District of Columbia Department of Forensic Sciences, which were involved in the investigation and prosecution of this case. U.S. Attorney Machen also expressed appreciation to Paralegal Specialists Kelly Blakeney and Ethel Noble, Victim /Witness Advocate Marcia Rinker, Supervisory Litigation Technology Specialist Joseph Calvarese, Assistant U.S. Attorney Michael Ortwein, who indicted the case, and Assistant U.S. Attorneys Jennifer A. Kerkhoff and Holly R. Shick, who tried the case.
13-151Dickinson Man Sentenced for Sexual Exploitation of MinorsRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on April 29, 2013, James O. Thompson, 41, Dickinson, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of sexual exploitation of minors. Thompson pleaded guilty to the charge on Jan. 10, 2013.
Judge Hovland sentenced Thompson to 25 years in federal prison, to be followed by a lifetime term of supervised release. Thompson was ordered to register as a sex offender.
Thompson was originally convicted in North Dakota for Gross Sexual Imposition in 1999. As a result of that conviction, Thompson was required to register as a sex offender. On Sept. 17, 2011, Thompson was arrested by state authorities for failure to register as a sex offender. During his arrest he was found in possession of a smart phone, which after search subsequent to arrest was found to contain numerous obscene images of a minor female. An investigation then revealed that from May 2011 through Sept. 2011 Thompson developed a relationship with a juvenile through text messaging. It was discovered that Thompson first met the juvenile at a fast food restaurant where he was employed and she was a customer and Thompson then contacted the juvenile, portraying himself as a like aged juvenile male, and he requested the juvenile send sexually explicit photos of herself to him.
The investigation was initiated by the North Dakota Internet Crimes Against Children Task Force and was a cooperative effort of Homeland Security Investigations, the North Dakota Bureau of Criminal Investigation, the North Dakota Parole & Probation Office, the Bismarck Police Department, with the assistance of the Burleigh County State’s Attorney’s Office.
This case was brought as a part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Assistant U.S. Attorney Gary Delorme prosecuted the case.
Devils Lake Woman Sentenced on Federal Drug ChargeRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on April 29, 2013, Ashley Lenoir of Devils Lake, N.D., was sentenced before U.S. District Judge Ralph R. Erickson on a charge of distribution of a controlled substance.
Judge Erickson sentenced Lenoir to five months’ imprisonment and five months of community confinement to be followed by three years of supervised release. Lenoir was ordered to pay a $100 special assessment to the Crime Victim's Fund.
Lenoir, 31, pleaded guilty on Feb. 5, 2013, to selling methamphetamine, a Schedule II controlled substance, on the Spirit Lake Indian Reservation. The incident occurred on Aug.15, 2011.
The case was investigated by the Bureau of Indian Affairs and the Drug Enforcement Administration.
Assistant U.S. Attorney Janice M. Morley prosecuted the case.
Devils Lake Man Sentenced for Striking, Beating and WoundingRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on April 29, 2013, Zev Boyd Rush of Devils Lake, N.D., was sentenced before U.S. District Judge Ralph R. Erickson on a charge of striking, beating and wounding.
Judge Erickson sentenced Rush to two months’ imprisonment and four months of electronic monitoring to be followed by one year of supervised release. Rush was ordered to pay restitution in the amount of $1,355 and to pay a $10 special assessment to the Crime Victim's Fund.
Rush, 33, pleaded guilty on Feb. 4, 2013, to assaulting the victim with a black metal collapsible baton causing numerous contusions to the victim’s arms and leg. The incident occurred on Oct. 26, 2010, on the Spirit Lake Indian Reservation.
The case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs.
Assistant U.S. Attorney Janice M. Morley prosecuted the case.
Dallas County Man Arrested and Charged in $3.5 Million Staged Accident Fraud SchemeRead the Press Release
DALLAS — Leroy Nelson, 61, of Duncanville, Texas, was arrested this morning by federal agents on felony charges, outlined in an indictment returned by a federal grand jury in Dallas last week and unsealed today, stemming from his alleged role in a multi-million dollar staged accident fraud scheme. Nelson made his initial appearance this afternoon before U.S. Magistrate Judge Irma C. Ramirez, who ordered him detained pending a detention hearing set for Wednesday at 2:00 p.m. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Specifically, the indictment charges Nelson with six counts of mail fraud and six counts of engaging in illegal monetary transactions.
The indictment alleges that from at least 2005, Nelson, aided and abetted by others, devised a scheme to defraud multiple insurance companies by submitting false claims for fictitious automobile accidents. As part of the scheme, Nelson promised cash payments to individuals he recruited for them to falsely report to their automobile insurance company that, while driving, they damaged a piece of equipment that was on the road or that was being hauled by a trailer. Nelson provided scripts to these individuals that instructed them on how to report the damage to their insurance company.
Nelson fabricated the written claims and submitted them to insurance companies. The damaged equipment was described as very technical in nature, such as: a “Remote Aircraft Landing Marker,” a “chemical Pipeline Examiner” or a “Seismographic Probe.” The claims would include a fictitious repair estimate and a photograph of the equipment. The claimed repair expenses would usually be from $16,000 to $19,000.
When insurance companies paid the claims, checks would be mailed to an address that Nelson provided. He directed the insurance companies’ checks to either warehouses he owned in Duncanville or to private mail boxes he had opened in Minnesota, Missouri, Mississippi, Washington, Arizona, Connecticut and Louisiana. After establishing the mail boxes, Nelson directed that the mail be forwarded to his address on Explorer Street in Duncanville.
A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, each of the mail fraud counts carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine; each of the engaging in an illegal monetary transaction counts carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. In addition, restitution could be ordered. The indictment also includes a forfeiture allegation, which would require Nelson, upon conviction, to forfeit to the government proceeds traceable to the property as well as seven vehicles, including two Mercedes, a motor home, a boat and his residence on Explorer Road in Duncanville.
The investigation is being conducted by the FBI, Internal Revenue Service Criminal Investigation and the U.S. Postal Inspection Service. Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.
Crownpoint Man Pleads Guilty to Federal Aggravated Child Sexual Abuse ChargeRead the Press Release
ALBUQUERQUE – Justin Kenneth, 20, a member and resident of the Navajo Nation, pleaded guilty last Thursday to an aggravated sexual abuse charge under a plea agreement with the U.S. Attorney’s Office. Under the terms of the plea agreement, Kenneth will be sentenced to a federal prison term of eight to ten years followed by a term of supervised release of five years to life to be determined by the court. Kenneth also will be required to register as a sex offender.
Kenneth was arrested in Dec. 2010, on a criminal complaint alleging that he sexually abused a child under the age of 12 in Oct. 2010, on the Navajo Indian Reservation. During his plea hearing, Kenneth entered a guilty plea to a felony information charging him with aggravated sexual abuse and admitted sexually abusing the child victim by touching the child’s genitals. Kenneth further admitted that he committed this crime on Oct. 6, 2010, at a residence located on the Navajo Indian Reservation.
Kenneth was remanded into the custody of the U.S. Marshals Service after entering his guilty plea. He will remain detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Gallup office of the FBI and the Crownpoint office of the Navajo Division of Public Safety. Assistant U.S. Attorney Jacob A. Wishard is prosecuting the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.Crestwood Official Convicted of Falsifying Reports to Conceal Village’s Use of Well in Drinking Water SupplyRead the Press Release
CHICAGO — A former water department official for the southwest suburban Village of Crestwood was convicted today of lying repeatedly to environmental regulators for more than 20 years about using a water well to supplement the village’s drinking water supply from Lake Michigan. The defendant, THERESA NEUBAUER, former water department clerk and supervisor and currently Crestwood’s police chief on leave, was found guilty of all 11counts of making false statements by a federal jury after a week-long trial.
Neubauer, 55, of Crestwood, faces a maximum sentence of five years in prison and a $250,000 fine on each count. U.S. District Judge Joan Gottschall set sentencing tentatively for Oct. 2. A co-defendant, FRANK SCACCIA, 61, of Crestwood, the village’s retired certified water operator, pleaded guilty on April 11 to making false statements and is also awaiting sentencing. Neubauer concealed the village’s use of its well from the government and the citizens of Crestwood to save money, prosecutors argued to the jury. By doing so, the village didn’t have to fix its leaking water distribution system, pay the neighboring Village of Alsip more money for water drawn from Lake Michigan, and properly monitor for contaminants that could have been introduced to Crestwood’s water supply.
“Nobody really knows what was in the water for all those years because [Neubauer’s] lies defeated testing,” Assistant U.S. Attorney Timothy Chapman said in his closing argument.
The charges did not allege, and the trial did not seek to establish, that the defendants’ false statements in regulatory reports concealing the use of well water resulted in any harm to Crestwood’s nearly 11,000 residents or to the environment, but the concealment avoided regulations requiring that Crestwood test its commingled water supply and monitor the amount of certain contaminants.
“The charges in this case are seemingly technical reporting violations. But the lies in those reports evidenced a calloused disregard for the welfare and safety of the citizens of Crestwood by their public officials. The decades’ long scheme proved at trial through the efforts of special agents of the U.S. EPA is a disheartening reminder of what can happen when public officials and employees put their own interests ahead of the people they were supposed to serve,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois.
“Neubauer lied about the true source of the village’s drinking water and for years submitted false documents to cover up the fact that the residents of Crestwood were drinking water from a well that was not properly tested,” said Randall Ashe, Special Agent-in-Charge of the U.S. Environmental Protection Agency’s Office of Criminal Enforcement in Chicago.
According to the evidence at trial, since at least 1973, the substantial majority of Crestwood’s drinking water came from Lake Michigan and was purchased from neighboring Alsip, which, in turn, had purchased the water from the City of Chicago after it was treated and tested pursuant to state and federal environmental regulations. Since 1982, Crestwood regularly supplemented the Lake Michigan water with water drawn from an underground aquifer through a well located on Playfield Drive, known as Well #1. Crestwood found it necessary to supplement the Lake Michigan water with water pumped from Well #1, in part, because of substantial leakage in its water distribution system, which Crestwood officials failed to adequately repair.
Between 1987 and 2008, Neubauer schemed with others to conceal that Crestwood was supplementing its Lake Michigan water with water drawn from Well #1. She helped prepare and submit various false reports stating that Well #1 was on standby status and no water from the well was distributed to Crestwood’s drinking water customers, and also stating that the sole source of Crestwood’s drinking water was Lake Michigan water purchased from Alsip. The false statements were contained in annual Consumer Confidence Reports (CCRs) and Monthly Operation and Chemical Analysis Reports (MORs).
The trial evidence showed that Neubauer was part of a scheme involving a small circle of trusted village employees, including Scaccia, that were directed by Crestwood’s longtime former mayor, Chester Stranczek, who was not charged.
Under the federal Safe Drinking Water Act of 1974, the U.S. Environmental Protection Agency created regulations to ensure the safety of drinking water distributed by public water systems by requiring testing and establishing maximum contaminant levels for various contaminants. The EPA delegated the primary responsibility for enforcement to the Illinois Environmental Protection Agency, which established its own state regulations that implemented the federal statute and regulations.
Because the City of Chicago tested and treated Lake Michigan water for contaminants, Crestwood, like other municipalities that purchased water directly or indirectly from Chicago, was excused from monitoring its Lake Michigan water for certain contaminants. Due to Crestwood’s use of Well #1, however, the village was required to periodically monitor its drinking water for organic contaminants, inorganic contaminants, and radiological contaminants beginning in the 1970s.
Crestwood was also required to submit an Annual Water Use Audit form, known as an LMO-2 form, to the Illinois Department of Natural Resources and, previously, to the Illinois Department of Transportation. This form required Crestwood to report the amount of water it had drawn from Lake Michigan and from Well #1, and to account for the amount of water distributed and lost by its water system annually. From at least 1982 to 2008, Crestwood officials filed LMO-2 forms that neither reported the amount of water drawn from Well #1, nor accurately accounted for the amount of water distributed and lost by its water system.
Scaccia was responsible for ensuring that water distributed by Crestwood met all federal and state regulations, including filing annual CCRs; obtaining the raw data that was used to complete the MORs; transmitting raw data for the MORs to Neubauer so that she could complete them and submit them to the IEPA; and serving as a point of contact for IEPA with respect to drinking water compliance issues. Neubauer prepared the CCRs for signature by Stranczek, arranged for the CCRs to be issued to Crestwood’s water customers, prepared MORs for distribution to the IEPA based upon information obtained from Scaccia, and distributed completed MORs to IEPA. All the while, Neubauer and Scaccia knew that water pumped from Well #1 was being distributed to the village’s water customers.
The government is being represented by Assistant U.S. Attorneys Erika Csicsila and Timothy Chapman.
Counterfeiting, Fraud and Drugs Earn Colorado Man 51 Months in Federal PrisonRead the Press Release
BOISE – Jeffrey Eugene Barfield, 50, of Thornton, Colorado, was sentenced today to 51 months in prison for mail fraud, dealing in counterfeit United States currency, and distributing oxycodone, U.S. Attorney Wendy J. Olson announced. U.S. District Judge John C. Coughenour also ordered Barfield to serve five years of supervised release following his prison term, pay $13,565 in restitution, and forfeit $4,000 of criminal proceeds and all property used to facilitate the crimes. Barfield pleaded guilty to the charges in December 2012.
According to the plea agreement, while serving a prison sentence in Colorado in January 2011, Barfield began planning a counterfeiting operation involving the trade of counterfeit United States currency for true currency, illegal drugs and firearms. As part of the scheme, Barfield planned to manufacture the fake money and sell it to another person. Upon his release from prison and over the course of nearly six months, Barfield manufactured and sold $10,200 in counterfeit money. He delivered the fake money and 50 oxycodone pills across state lines to Idaho via the United States Postal Service. The person receiving the contraband reported it to law enforcement.
Barfield was arrested by state law enforcement officers in June 2012 for passing counterfeit bills at garage sales in Northglenn, Colorado. After being advised of his rights, Barfield told a United States Secret Service agent, “It was good for a long time but it's over; I did it, I made it, and [an accomplice] and I spent them.” Barfield admitted to manufacturing the counterfeit Federal Reserve Notes he passed at the garage sales, as well as the counterfeit Federal Reserve Notes he mailed across state lines. Barfield further described how he and an accomplice passed multiple counterfeit bills throughout the Denver area, by purchasing items at local Home Depot and Lowe’s Home Improvement stores, which they would then return for genuine cash. Barfield admitted that he and an accomplice would “hit” one to two stores per day approximately one to two times per week.
The case was investigated by the United States Secret Service, the Federal Bureau of Investigation, and United States Postal Inspection Service.
Coraopolis Man Charged with Possession of Child PornographyRead the Press Release
PITTSBURGH - A resident of Allegheny County was indicted on April 24, 2013, by a federal grand jury in Pittsburgh on a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The one-count indictment, unsealed today, named Daniel Lewis Dolde, 43, of Coraopolis, Pa., as the sole defendant.
According to the indictment, on or about May 10, 2012, Dolde possessed visual depictions, namely, videos and images in computer graphics files, the production of which involved the use of minors engaging in sexually explicit conduct.
The law provides for a maximum total sentence of 10 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 Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Department of Homeland Security - Homeland Security Investigations conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Coast Guard Petty Officer Headed to Prison for Stealing More Than $600,000 in Government PropertyRead the Press Release
HOUSTON – Brandon Lee Scott, U.S. Coast Guard Petty Officer Second Class, of Dickinson, has been ordered to federal prison for using a government-issued credit card to purchase items for his own benefit, United States Attorney Kenneth Magidson announced today. He pleaded guilty Monday, Feb. 11, 2013.
Today, Vanessa D. Gilmore, who accepted the guilty plea, handed Scott a 37-month sentence to be followed by a term of three years of supervised release. He was further ordered to pay $617,441.64 in restitution. In handing down the sentence, Judge Gilmore noted that Scott had abused a position of trust and imposed a sentence at the maximum sentencing guideline range.
At the hearing in support of his guilty plea, Scott, 29, acknowledged the United States could prove he utilized a government issued credit card to buy nearly $3000 worth of electronics for his personal benefit. On June 30, 2011, Scott admitted he used a J.P. Morgan Chase purchase card to buy a 55-inch Samsung High Definition television set and two 10-inch Android WiFi g tablets having a total value of $2,659.97.
Previously released on bond, Scott was permitted to remain on bond and to voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.The charge against Scott resulting in the plea and sentence was the result of an investigation conducted by the U.S. Coast Guard Investigative Service and the Department of Homeland Security-Office of Inspector General. Assistant United States Attorney Daniel C. Rodriguez is prosecuting the case.
Charleston Pill Dealer Pleads Guilty to Federal Oxycodone Distribution ChargeRead the Press Release
Police seize hundreds of prescription painkillers, more than $35,000 and firearms during search of defendant’s home
CHARLESTON, W.Va. – A Charleston pill dealer faces up to 20 years in prison after pleading guilty today in federal court to distribution of oxycodone, announced U.S. Attorney Booth Goodwin. On October 3, 2012, law enforcement officers with the Kanawha County Sheriff’s Department executed a search warrant at the Charleston residence belonging to Eric Simmons, 27. During the search of Simmons’ residence, police seized approximately $35,410 in cash, two rifles, two handguns and 872 30-milligram oxycodone pills.
Simmons had previously sold 10 30-milligram oxycodone pills to a confidential informant working with the Kanawha County Sheriff’s Department in exchange for $300. The illegal pill transaction occurred at the parking lot of the Ivy Motel located on MacCorkle Avenue in Charleston.
Simmons regularly sold prescription painkillers in and around Charleston for $30 to $35 per pill. The cash seized from the defendant’s residence was proceeds collected from illegal prescription pill transactions.
Simmons is scheduled to be sentenced on August 5, 2013 by United States District Judge Thomas E. Johnston.
The Kanawha County Sheriff’s Department conducted the investigation. Assistant United States Attorney John Frail is in charge of the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by various federal, state and local law enforcement agencies, remain committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets and curtailing the spread of opiate painkillers in communities across the Southern District.
Central Coast Man Pleads Guilty in Fraud Scheme That Bilked In-Laws, In-Laws’ Friend, and Banks Out of Nearly $50 MillionRead the Press Release
SANTA ANA, California – A Central Coast man pleaded guilty this afternoon in a wide-ranging fraud scheme that caused more than $47 million in losses to several victims, including his in-laws, who were long-established and well-respected farmers in San Luis Obispo County.
John Mark Moore, 51, of Nipomo, pleaded guilty today to federal charges relating to his fraud scheme, which continued for well over a decade until he came clean to his family in the fall of 2011 and then to federal authorities last year.
Appearing before United States District Judge David O. Carter, Moore pleaded guilty to four federal offenses: two counts of making false statements to Farm Credit West (FCW), a production credit association in Templeton, California; one count of mail fraud; and one count of wire fraud.
Over the course of 11 years, Moore misappropriated approximately $24 million from his in-laws, plus another $23 million from five banks and another individual who was a friend and business associate of his in-laws.
According to court documents, Moore took unauthorized disbursements from the bank accounts and lines of credit belonging to his father-in-law and mother-in-law. Once he had control of the funds derived from his in-law’s accounts, Moore used the money to support businesses that he and his father controlled. Over the course of approximately 11 years, Moore diverted approximately $13.8 million from his in-law’s business and personal accounts at FCW and transferred the money to his father’s company, Moore Agricultural Products (which after March 2004 was owned by his mother) or to companies Moore himself owned, such as American Microtech, LLC.
In another scheme, Moore also stole money from his in-laws by fraudulently increasing their personal and business lines of credit at FCW, and then fully drawing down on these lines of credit without having the ability to repay these loans. Moore improperly increased these lines of credit by repeatedly forging his in-law’s signatures on several loan applications that allowed him to increase their personal and business lines of credit at FCW in one case from $1 million to $6.5 million and, in another case, from $1 million to $4 million. Accordingly, Moore fraudulently borrowed $10.5 million against his in-law’s business and personal lines of credit from 2000 through 2011, and he fully defaulted on these obligations.
In another scheme, Moore fraudulently obtained funds by increasing his lines of credits he obtained in the name of himself, his wife, his companies, and his mother through various means, including forging his wife’ signature, submitting false personal financial statements, and pledging phony collateral to secure the loans. As a result of this fraudulent borrowing, the victim lending institutions – including FCW, Heritage Oaks Bank, Union Bank, Rabobank and Happy State Bank in Dumas, Texas – sustained aggregate losses of approximately $11.4 million.
In the fourth scheme in this case, Moore bilked a friend and business associate of his in-laws beginning in 2002 when Moore entered into a series of ranching and farming ventures with the victim. As part of Moore’s scheme to defraud his in-laws’ friend, who is identified in court documents as GLM, Moore entered into a bogus contract in which he agreed to undertake various agricultural ventures and share the proceeds of these ventures with GLM in exchange for GLM providing the start-up capital. However, Moore had no intention of starting agricultural ventures, and instead he used GLM’s money for other purposes. As a result of Moore’s defendant’s fraudulent scheme, GLM lost more than $12 million, which was never repaid.
The false statement charges each carry a statutory maximum penalty of 30 years in federal prison, and the fraud charges each carry a potential penalty of 20 years in prison. Therefore, as a result of his guilty pleas today, Moore faces a potential sentence of 100 years in federal prison. The actual sentence will be determined by Judge Carter when he sentences Moore on July 29.
Moore self-reported his illegal conduct to federal authorities over the course of 2012. Based on the information he provided and a subsequent investigation, the case against Moore is the product of work completed by special agents with the Federal Bureau of Investigation.
Release No. 13-059
Buffalo Man Indicted on Conspiracy and Aggravated Identity Theft ChargesRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Buffalo has returned a 66-count indictment charging Clifton Jackson, 44, of Buffalo, N.Y., with conspiracy to unlawfully use Social Security numbers, conspiracy and the filing of false tax returns in 2011, and aggravated identity theft. The charges carry a maximum penalty of 10 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Trini E. Ross, who is handling the case, stated that according to the indictment, the defendant devised a scheme to defraud individuals and the United States Government by obtaining and using the names and social security numbers issued to several individuals. Jackson then used that information to file fraudulent tax returns for the tax year 2011with the IRS.
The defendant will be arraigned on the charges on May 1, 2013, at 11:00 a.m. before U.S. Magistrate Judge H. Kenneth Schroeder, Jr.
The indictment is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service - Criminal Investigation Division, under the direction of Special Agent- in-Charge Toni M. Weirauch, and the United States Postal Inspection Service under the direction of Kevin Niland, Inspector in Charge, Boston Division.
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.Bryan Chiropractic Clinic Owner Convicted of $3 Million Automobile Insurance FraudRead the Press Release
HOUSTON – The owner of a now defunct chiropractic clinic in Bryan has pleaded guilty to engaging in a conspiracy to defraud various automobile insurance companies of more than $3 million, United States Attorney Kenneth Magidson announced today.
Marion Young, 42, co-owner of Private Chiropractic Care, admitted he participated in a two-year conspiracy to defraud numerous auto insurance companies by recruiting alleged auto accident victims to be represented by a Bryan area law firm. He further admitted he operated Private Chiropractic Care clinic as a front to allow fraudulent chiropractic bills to be created for treatments which were never performed and then used as support for fraudulent settlement demand letters sent to auto insurance companies. During the course of the conspiracy, Young received checks and cash from the firm totaling approximately $112,000.
Once represented by the firm, clients were sent to Private Chiropractic to be evaluated by chiropractor and co-defendant Chase Lindsey, 34. Lindsey pleaded guilty earlier this year, admitting he entered into an agreement with the office manager of that same law firm. Lindsey agreed to provide medical evaluations of, and recommend treatment for, those patients in exchange for $2,000 in cash per month, which totaled approximately $58,000 during the course of the conspiracy. Lindsey routinely prescribed medically unnecessary treatment which was provided, if at all, by unlicensed, untrained and unqualified individuals and never supervised the treatments allegedly administered by these unqualified individuals. Lindsey always prescribed the same six treatments but the patients usually received only two - ice/heat packs and electric stimulation. Lindsey prescribed the treatments be done 3-4 times per week for 5-6 weeks, but the patients usually went once a week for 3-4 weeks.
Young knew the patients were not receiving most of the treatments prescribed and that they were not going for treatments on many of the days reflected on the Private Chiropractic Care bills. Young knew the false Private Chiropractic Care billing was prepared at the law firm and that the fraudulent bills were used as support for settlement demand letters sent to auto insurance companies. The fraudulent demand letters caused the insurance companies to issue settlement checks, which were spilt between Young and others.
Young also participated in the scheme to defraud the insurance companies as an accident client of the law firm. Three separate checks, totaling nearly $5000, were sent and made payable to Young and the law firm to settle an accident claim which was based on fraudulent chiropractic bills produced at the firm. Young never received the treatments reflected on the bills sent to the insurance companies.
The scheme to defraud the automobile insurance companies resulted in the submission of more than $3 million in false billing claims. The insurance companies paid at least $1.2 million in false claims during 2007-2009.
U.S. District Judge Kenneth Hoyt, who accepted the guilty plea, has set sentencing for Sept. 16, 2013, at which time Young faces up to 20 years in prison and a possible $250,000 fine. As part of his plea agreement, Young also agreed to forfeit the $112,000 he received and to pay restitution of $1.2 million to the insurance companies victimized by the scheme. Young was allowed to remain free on bond pending his sentencing.
Three remaining defendants charged in relation to this case are scheduled for trial on Sept. 24, 2013. They are presumed innocent unless convicted through due process of law.
The criminal charges are the result of a joint investigation by agents of the FBI and the National Insurance Crime Bureau. Assistant United States Attorney Al Balboni is prosecuting the case.
Blackfoot Man Sentenced for Involuntary ManslaughterRead the Press Release
POCATELLO – Kendall Perry, 22, of Blackfoot, Idaho, was sentenced today in United States District Court to 30 months in prison for involuntary manslaughter, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Perry to serve three years of supervised release and do 200 hours of community service. Perry, an enrolled member of the Shoshone-Bannock Tribes, was indicted by a federal grand jury on October 23, 2012, on one count of involuntary manslaughter. He pleaded guilty to the charge on January 28, 2013.
According to the indictment, on June 30, 2012, Perry, who was intoxicated, was operating a 1999 GMC Yukon with gross negligence, causing a roll-over accident near the intersection of Philbin and Sheepskin Road that resulted in the death of Cullen Fightsover, a passenger in the vehicle. An accident reconstructionist said the vehicle was traveling at 74 mph in a 50 mph zone. Perry ran a stop sign, went through the intersection and then lost control and rolled into a field, ejecting the three occupants from the vehicle. Fightsover was life-flighted, but was pronounced dead at the hospital. Perry admitted drinking hard liquor and beer and admitted smoking marijuana in the hours before the crash. Perry admitted he was “buzzed” from the alcohol he had consumed.
The victim’s family members spoke at sentencing and expressed forgiveness towards Perry. Judge Winmill stated to those present in the courtroom that he considered those statements in imposing sentence.
The case was investigated by the Fort Hall Police Department, the Federal Bureau of Investigation, and the Idaho State Police.
Au Optronics Corporation Executive Sentenced for Role in <br /> LCD Price-Fixing ConspiracyRead the Press Release
An executive of AU Optronics Corp., a Taiwan-based liquid crystal display (LCD) producer, was sentenced today in U.S. District Court in San Francisco for his participation in a worldwide thin-film transistor-liquid crystal display (TFT-LCD) price-fixing conspiracy. Shiu Lung Leung, AU Optronics Corp.’s former senior manager in its Desktop Display Business Group, was sentenced to serve 24 months in prison and to pay a $50,000 criminal fine, the Department of Justice announced.
AU Optronics Corp., based in Hsinchu, Taiwan, and its American subsidiary, AU Optronics Corp. America, headquartered in Milpitas, Calif., were found guilty in March 2012, for their participation in the price-fixing conspiracy, following an eight-week trial. Former AU Optronics Corp. president Hsuan Bin Chen and former AU Optronics Corp. executive vice president Hui Hsiung were also found guilty at that time. A mistrial was declared against Leung after that trial. Today’s sentencing took place before Judge Susan Illston and follows a three-week retrial that started in November 2012 and resulted in Leung’s conviction.
“These international price-fixers caused consumers to pay inflated prices for their computer monitors, notebook computers and televisions,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division. “Prison sentences for culpable executives, combined with substantial fines against corporate wrongdoers, are the most effective deterrents for protecting consumers from this kind of illegal cartel behavior.”
The indictment charged that AU Optronics Corp. participated in the worldwide price-fixing conspiracy from Sept. 14, 2001, to Dec. 1, 2006, and that its subsidiary joined the conspiracy as early as spring 2003. The indictment further charged that Leung participated in that conspiracy from May 15, 2002 to Dec. 1, 2006. LCD panels affected by the conspiracy were a major component in flat-panel computer monitors, notebook computers, and flat-screen televisions sold in the United States. The conspirators fixed the prices of LCD panels during monthly meetings with their competitors, which were secretly held in hotel conference rooms, karaoke bars and tea rooms around Taiwan.Eight companies have been convicted of charges arising out of the department’s ongoing investigation and have been sentenced to pay criminal fines totaling $1.39 billion. All together, 22 executives have been charged. Including today’s sentence, 13 executives have been convicted and have been sentenced to serve prison terms ranging from six to 36 months.
Today’s charges are the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco office and the FBI in San Francisco. Anyone with information concerning illegal conduct in the LCD industry is urged to call the Antitrust Division’s San Francisco office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.html
Attorney General Holder Names U.s. Attorney Hartunian to Advisory CommitteeRead the Press Release
Albany, New York – United States Attorney General Eric Holder today announced the appointment of Northern District of New York United States Attorney Richard S. Hartunian to serve a two-year term on the Attorney General's Advisory Committee (AGAC). Hartunian was one of six U.S. Attorneys appointed to the AGAC, comprised of the U.S. Attorneys selected from 16 of the 93 federal judicial districts in the United States, plus the U.S. Attorney for the District of Columbia and representatives of the three litigating divisions led by U.S. Attorneys – criminal, civil, and appellate.
United States Attorney Hartunian said, “I am honored to have been appointed by Attorney General Holder to serve on his Advisory Committee, and look forward to working with him and the U.S. Attorneys representing other districts to protect, promote, and enhance the fair administration of justice across our nation.”
Hartunian has served as the United States Attorney for the Northern District of New York since the beginning of 2010. He had been an Assistant United States Attorney since 1997, serving as the Northern District’s Narcotics Chief and Organized Crime Drug Task Force Coordinator from 2006 until he became U.S. Attorney. He is a 1983 graduate of Georgetown University and 1986 graduate of Albany Law School of Union University. Prior to joining the U.S. Attorney’s Office, Hartunian served as an Assistant District Attorney for the Office of District Attorney in Albany County and worked in private practice.
The Attorney General’s Advisory Committee was established in 1973; it is responsible for considering and making recommendations to the Attorney General regarding establishing and modifying the policies and procedures of the U.S. Department of Justice, cooperating with State Attorneys General and other state and local officials, promoting greater consistency in the application of legal standards, and formulating programs to improve the quality of justice at all levels throughout the United States.
The Attorney General’s press release announcing the appointment of U.S. Attorney Hartunian and five other U.S. Attorneys is attached.
Attorney General Holder Appoints U.S. Attorney Sharpe to Advisory CommitteeRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced the appointment of Ronald W.
Sharpe, United States Attorney for the District of the Virgin Islands, along with five others, to serve two-year terms on the Attorney General’s Advisory Committee (AGAC). The other five U.S. Attorneys are: David Barlow, District of Utah; Richard S. Hartunian, Northern District of New York; Barbara L.
McQuade, Eastern District of Michigan; Wendy J. Olson, District of Idaho; and Anne Tompkins, Western
District of North Carolina.“It’s a pleasure to welcome the newest members of the Attorney General’s Advisory Committee, a group of U.S. Attorneys with whom I regularly consult on some of the most critical law enforcement and public safety issues facing our country,” said Attorney General Holder. “I’m grateful for their service and leadership on the AGAC. I applaud the excellent work that each of them is leading in their home districts.
And I look forward to working closely with them as we work together to confront the present challenges and seize new opportunities to protect and ensure justice for the American people.”The AGAC, chaired by U.S. Attorney for the Eastern District of New York Loretta E. Lynch, was created in 1973. The committee, which reports to the Attorney General through the Deputy Attorney
General, represents the voice of the U.S. Attorneys and provides advice and counsel to the Attorney
General on policy, management and operational issues impacting the Offices of the U.S. Attorneys. U.S.
Attorney Sharpe serves as a member of the AGAC’s Border and Immigration Law Enforcement
Subcommittee, LECC/Victim/Community Issues Subcommittee, and Environmental Issues Working
Group.“I am honored that Attorney General Holder has asked me to serve on this important committee,”
U.S. Attorney Sharpe said. “I look forward to working with my colleagues on the AGAC to help shape law enforcement policy at the national level.”Sharpe was presidentially appointed U.S. Attorney for the District of the Virgin Islands on July 7, 2011, having served as Interim U.S. Attorney from September 2009 until his confirmation. He also served as the First Assistant U.S. Attorney for the District of the Virgin Islands from 2008 to 2009. Prior to joining the U.S. Attorney’s Office in the Virgin Islands, Sharpe served as an Assistant U.S. Attorney in the District of Columbia from 1995 to 2008, and as an associate at Jones Day from 1991 to 1995.
The full AGAC membership is listed below:
Loretta E. Lynch, United States Attorney, Eastern District of New York, Chair
Sally Quillian Yates, United States Attorney, Northern District of Georgia, Vice Chair
David Barlow, United States Attorney, District of Utah
Laura E. Duffy, United States Attorney, Southern District of California
Richard S. Hartunian, United States Attorney, Northern District of New York
Timothy J. Heaphy, United States Attorney, Western District of Virginia
Brendan V. Johnson, United States Attorney, District of South Dakota
Pamela Cothran Marsh, United States Attorney, Northern District of Florida
Barbara L. McQuade, United States Attorney, Eastern District of Michigan
Wendy J. Olson, United States Attorney, District of Idaho
Carmen Milagros Ortiz, United States Attorney, District of Massachusetts
Robert L. Pitman, United States Attorney, Western District of Texas
James L. Santelle, United States Attorney, Eastern District of Wisconsin
Ronald W. Sharpe, United States Attorney, District of the Virgin Islands
Carter M. Stewart, United States Attorney, Southern District of Ohio
Anne Tompkins, United States Attorney, Western District of North Carolina
Ronald C. Machen, United States Attorney, District of Columbia, ex officio
Daniel Bella, Criminal Chief, Northern District of Indiana, ex officio
Suzanne Bauknight, Civil Chief, Eastern District of Tennessee, ex officio
Robert Zauzmer, Appellate Chief, Eastern District of Pennsylvania, ex officioAttorney General Holder Appoints Six New U.S. Attorneys to Advisory CommitteeRead the Press Release
Attorney General Eric Holder today announced the appointment of six new U.S. Attorneys to serve two-year terms on the Attorney General’s Advisory Committee (AGAC): David Barlow, District of Utah; Richard S. Hartunian, Northern District of New York; Barbara L. McQuade, Eastern District of Michigan; Wendy J. Olson, District of Idaho; Ronald W. Sharpe, District of the Virgin Islands; and Anne Tompkins, Western District of North Carolina.
“It’s a pleasure to welcome the newest members of the Attorney General’s Advisory Committee, a group of U.S. Attorneys with whom I regularly consult on some of the most critical law enforcement and public safety issues facing our country,” said Attorney General Holder. “I’m grateful for their service and leadership on the AGAC. I applaud the excellent work that each of them is leading in their home districts. And I look forward to working closely with them as we work together to confront the present challenges and seize new opportunities to protect and ensure justice for the American people.”
The Attorney General also thanked the U.S. Attorneys who have completed their two-year terms and are rotating off the committee: Paul J. Fishman, District of New Jersey; Benjamin B. Wagner, District of Eastern California; Steven M. Dettelbach, Northern District of Ohio; John F. Walsh, District of Colorado; and Stephanie A. Finley, Western District of Louisiana.
The AGAC, chaired by U.S. Attorney for the Eastern District of New York Loretta E. Lynch, was created in 1973. The committee, which reports to the Attorney General through the Deputy Attorney General, represents the voice of the U.S. Attorneys and provides advice and counsel to the Attorney General on policy, management and operational issues impacting the Offices of the U.S. Attorneys.
A brief bio on each appointee is below: David Barlow was presidentially appointed U.S. Attorney for the District of Utah on Oct. 15, 2011. He previously served as the General Counsel and Chief Counsel for Judiciary for Senator Michael S. Lee in 2011. From 2000 to 2010, Mr. Barlow worked at Sidley Austin LLP; first as an associate from 2000 to 2006, and then as a Partner from 2006 to 2010. Prior to this, Mr. Barlow was an Associate at Locke Lord Bissell & Liddell LLP from 1998 to 2000. Barlow serves as chair of the AGAC’s Local Government Coordination Working Group, and as a member of the Border and Immigration Law Enforcement Subcommittee, Native American Issues Subcommittee and White Collar/Fraud Subcommittee.
Richard Hartunian was presidentially appointed U.S. Attorney for the Northern District of New York on Feb. 19, 2010. Prior to his appointment, he served as an Assistant U.S. Attorney for the Northern District of New York (1997-2010). From 1990 to 1997, Hartunian worked both as an Assistant District Attorney for the Office of the District Attorney in Albany County, New York, and as a partner at Hartunian and Clark. Prior to that, he was an associate attorney at Devine, Piedmont and Rutnik. Hartunian serves as vice chair of the AGAC’s the Border and Immigration Law Enforcement Subcommittee, and as a member of the Native American Issues Subcommittee, Environmental Issues Working Group and Health Care Fraud Working Group.Barbara McQuade was presidentially appointed U.S. Attorney for the Eastern District of Michigan on Jan. 4, 2010. She previously served as an Assistant U.S. Attorney for the Eastern District of Michigan from 1998 to 2010, becoming Deputy Chief of the National Security Unit in 2005. Previously McQuade was an associate attorney at Butzel Long P.C., from 1993 to 1998. She began her legal career as a law clerk for the Honorable Bernard A. Friedman of the U.S. District Court for the Eastern District of Michigan from 1991 to 1993. McQuade serves as Vice Chair of the AGAC’s Terrorism/National Security Subcommittee, and as a member of the Border and Immigration Law Enforcement Subcommittee, Civil Rights Subcommittee, Local Government Coordination Working Group, and Medical Marijuana Working Group.
Wendy Olson was presidentially appointed U.S. Attorney for the District of Idaho on June 25, 2010. Prior to her appointment she served as an Assistant U.S. Attorney for the District of Idaho from 1997-2010, including as Senior Litigation Counsel (2006-2010). Olson worked for the Criminal Section of the Civil Rights Division of the Department of Justice, where she was a trial attorney from 1992 until 1996, and Deputy Director of Operations and Assistant to the Director on the National Church Arson Task Force from 1996 until 1997. Olson was also an Adjunct Professor of Legal Writing at the George Washington University School of Law from 1994 until 1997. Olson serves as a member of the AGAC’s Border and Immigration Law Enforcement Subcommittee, Civil Rights Subcommittee, Native American Issues Subcommittee, and Local Government Coordination Working Group.
Ronald Sharpe was presidentially appointed U.S. Attorney for the District of the Virgin Islands on July 7, 2011. He was the court appointed U.S. Attorney from July 2011. From 2008 to 2009, he served as the First Assistant U.S. Attorney for the District of the Virgin Islands, and as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the District of Columbia from 1995 to 2008. Prior to this, Sharpe was an associate at Jones, Day, Reavis & Pogue, from 1991 to 1995. Sharpe serves as a member of the AGAC’s Border and Immigration Law Enforcement Subcommittee, LECC/Victim/Community Issues Subcommittee and Environmental Issues Working Group.
Anne Tompkins was presidentially appointed U.S. Attorney for the Western District of North Carolina on Apr. 26, 2010. Prior to her appointment Tompkins was a partner at Alston & Bird, LLP, from 2005 to 2010. From 2000 to 2005, she was an Assistant U.S. Attorney for the Western District of North Carolina, serving as deputy criminal chief from 2002 to 2004 and on detail in the Regime Crimes Liason Office in Baghdad, Iraq, from 2004 to 2005. Tompkins serves as Vice Chair of the AGAC’s Civil Rights Subcommittee, and as a member of the Native American Issues Subcommittee, Office Management and Budget Subcommittee, White Collar/Fraud Subcommittee and Health Care Fraud Working Group.
The full AGAC membership is listed below: Loretta E. Lynch, U.S Attorney, Eastern District of New York, Chair
Sally Quillian Yates, U.S Attorney, Northern District of Georgia, Vice Chair
David Barlow, U.S. Attorney, District of Utah
Laura E. Duffy, U.S. Attorney, Southern District of California
Richard S. Hartunian, U.S. Attorney, Northern District of New York
Timothy J. Heaphy, U.S. Attorney, Western District of Virginia
Brendan V. Johnson, U.S. Attorney, District of South Dakota
Pamela Cothran Marsh, U.S. Attorney, Northern District of Florida
Barbara L. McQuade, U.S. Attorney, Eastern District of Michigan
Wendy J. Olson, U.S. Attorney, District of Idaho
Carmen Milagros Ortiz, U.S. Attorney, District of Massachusetts
Robert L. Pitman, U.S. Attorney, Western District of Texas
James L. Santelle, U.S. Attorney, Eastern District of Wisconsin
Ronald W. Sharpe, U.S. Attorney, District of the Virgin Islands
Carter M. Stewart, U.S. Attorney, Southern District of Ohio
Anne Tompkins, U.S. Attorney, Western District of North Carolina
Ronald C. Machen, U.S. Attorney, District of Columbia, ex officio
Daniel Bella, Criminal Chief, Northern District of Indiana, ex officio
Suzanne Bauknight, Civil Chief, Eastern District of Tennessee, ex officio
Robert Zauzmer, Appellate Chief, Eastern District of Pennsylvania, ex officioArmenian National Pleads Guilty in $1.5 Million Health Care Fraud and Money Laundering SchemeRead the Press Release
BRUNSWICK, GA: AVETIK MOSKOVIAN, 46, an Armenian National, plead guilty Tuesday before Chief United States District Court Judge Lisa Godbey Wood to his role in a conspiracy launder approximately $1.5 million in funds defrauded from Medicare through a phony medical business in Brunswick, Georgia.MOSKOVIAN, who resided in Los Angeles until the time of his arrest and was here in the United States on a permanent residence card from Armenia, pleaded guilty to Money Laundering Conspiracy in violation of Title 18, United State Code, Section 1956(h), before Chief United States District Court Judge Lisa Godbey Wood.
According to the evidence presented at MOSKOVIAN’S guilty plea hearing:From 2007 through 2008, various conspirators defrauded Medicare through a durable medical equipment company in Brunswick, Georgia, known as Brunswick Medical Supply. These conspirators submitted millions of dollars in phony claims for health care services that were never provided. The evidence showed that the conspirators stole the identities for doctors and patients from multiple different states, including Alaska, California, New York, and Ohio, and even submitted claims for people that were deceased at the time that he claimed to have provided them the medical equipment.
Once Medicare paid for these phony claims, MOSKOVIAN and other took numerous steps to launder the stolen money. MOSKOVIAN helped form at least four sham businesses in Los Angeles, opened multiple bank accounts in the names of these businesses, and used these bank accounts to launder the proceeds of the fraud at Brunswick Medical Supply. MOSKOVIAN engaged in multiple financial transactions within these accounts, including wire transfers and counter withdrawals of tens of thousands of dollars in cash, as part of his effort to help hide the money defrauded from Medicare.
MOSKOVIAN now faces a maximum statutory penalty of up to twenty (20) years in prison; a fine up to $500,000; and 5 years of supervised release. His sentencing will be scheduled after the United States Probation Office completes a presentence investigation.
United States Attorney Edward J. Tarver said, “Moskovian and others in this criminal organization thought that they could exploit Medicare to steal from this nation’s taxpayers and then avoid detection through this defendant’s money laundering operations. They were wrong. With this money laundering conviction, this Office and its law enforcement partners have taken another important step towards cleaning up the fraud in our nation’s health care programs.”
Derrick L. Jackson, Special Agent in Charge of the Atlanta Region for the Office of Inspector General of the Department of Health and Human Services, said “Avetik Moskovian engaged in a scheme to defraud Medicare by conducting numerous financial transactions with money that was generated through unlawful activity. The OIG strongly pursues those who abuse government healthcare programs for financial gain.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI remains very committed toward providing the much needed investigative resources in protecting such federally funded programs like Medicare from fraud and abuse. Mr. Moskovian, in diverting those public funds to his personal bank account, denied other individuals the health care that those funds were intended for.”
The prosecution of MOSKOVIAN was part of a multi-jurisdictional investigation involving more than $100 million worth of phony claims submitted to Medicare. More than 35 defendants were charged as part of this investigation in Brunswick, Georgia, New York, Los Angeles, Cleveland and Albuquerque. The investigation in the Southern District of Georgia was the result of a multi-agency team of federal, state and local agents, led by the FBI and HHS-OIG), working together to combat health care fraud.
Assistant United States Attorney Brian T. Rafferty prosecuted the case. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Alabama Businessman Sentenced for Fraud, Paying BribesRead the Press Release
NORFOLK, Va. – Huffman Earl Monk, 52, Brookwood, Ala., was sentenced today to 63 months in prison, followed by three years of supervised release, for wire fraud and for paying bribes to a U.S. Coast Guard Transportation Officer. Monk was also ordered to pay a fine of $15,000.00 and $779,549.85 in restitution to the U.S. Treasury.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region; and Michael P. Dawson, Special Agent in Charge, Department of Homeland Security, Office of Inspector General, Washington Field Office, made the announcement after sentencing by United States District Judge Mark S. Davis.
Monk previously pled guilty to the charges on January 9, 2013. According to court documents, Monk was the owner and operator of 12 freight brokerage companies that were headquartered in a single office in Brookwood, Ala. Many of Monk’s freight brokerage companies contracted with Department of Defense Transportation Command (TransCom) to ship military-related freight. Monk’s co-conspirator was an active duty U.S. Coast Guard (USCG) Petty Officer assigned as a Transportation Administrator at the Surface Forces Logistics Center in Norfolk, Va. It was the co-conspirator’s primary duty was to coordinate the shipping of large freight such as boats, trailers, generators, etc. between USCG bases located throughout the United States. The co-conspirator utilized the TransCom automated system to bid out and then contract the shipments with authorized freight brokerage companies.
In September 2009, Monk traveled to Norfolk to meet with the co-conspirator and told him that in exchange for issuing USCG freight contracts to Monk’s freight companies, Monk would kickback a percentage of the profits to him. The co-conspirator agreed to Monk’s offer and, shortly thereafter, Monk began offering monetary bribes to the co-conspirator by providing him with debit cards linked to several of Monk’s business bank accounts. In order to inflate the profits Monk and the co-conspirator would make from each contract Monk encouraged the co-conspirator to fraudulently manipulate various data entered into the TransCom computer system in order to artificially inflate the price of the shipping contracts the co-conspirator steered to Monk’s companies. Monk and the co-conspirator also engaged in creating false shipping contracts for shipments that did not exist, and thereafter awarding the contract and profits to one or more of Monk’s companies. Since no freight was actually being shipped pursuant to these false contracts, the USCG payments to Monk was all profit, resulting in the co-conspirator also receiving a larger kickback from Monk. Over a two-year period, Monk paid out over $220,000 in bribe payments. The total fraud loss to the United States based on these fraudulent military shipping contracts was over $1 million.
The military has recently implemented a number of internal changes to TransCom’s computer systems to enhance the integrity of the bidding and contracting process used by Department of Defense and Department of Homeland Security Transportation Officers.
This investigation was brought as part of the Hampton Roads Procurement Fraud Initiative, a collaboration of defense investigative agencies, Inspectors General, and law enforcement dedicated to strengthening the integrity of the federal procurement system.This case was investigated by the United States Coast Guard Investigative Service and the Department of Homeland Security, Office of the Inspector General, Washington Field Office, with the cooperation and assistance of the Coast Guard Surface Forces Logistics Center. Assistant United States Attorneys Stephen W. Haynie and V. Kathleen Dougherty are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.20-year Sentence for Owner of Primary Health Care in Chillecothe, Ohio for Conpsiring to Distribute Oxycodone and Money LaunderingRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Kevin Huff, 36, of Portsmouth, Ohio was sentenced in U.S. District Court to serve 262 months in prison for his role in conspiring to distribute more than 200,000 dosage units (30mg tablets) of Oxycodone and money laundering. In addition, Huff was ordered to forfeit six properties in Lucasville and Sciotoville, Ohio; three vehicles, three ATV’s, a boat, $20,000 in currency, the contents of two bank accounts totaling approximately $118,875 and his latest income tax return as proceeds of the ill-gotten gains.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Ohio Attorney General Mike DeWine; Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Cincinnati Field Office (IRS); Kyle W. Parker, Executive Director of the Ohio Board of Pharmacy; and Kimberly C. Anderson, Interim Executive Director, State Medical Board of Ohio announced the sentence handed down by U.S. District Judge Michael R. Barrett.
“Between July 2009 and June 2011 Huff conspired to illegally distribute Oxycodone and concealed the proceeds gained from the clinic he owned by purchasing real property, vehicles, and boats, as well as concealing the proceeds in bank accounts,” U.S. Attorney Stewart said. “I want to commend the investigators in the agencies named above as well as special agents with the Ohio Bureau of Criminal Investigation in Attorney General DeWine’s Office, the Ohio Organized Crime Task Force, the Rt. 23 Pipeline Task Force, Ross County Sheriff George W. Lavender Jr., Ross County Prosecutor Matthew S. Schmidt, and Chillicothe Police Chief Roger Moore for their agencies’ role in the investigation.”
According to court documents, agencies began investigating Primary Health Care clinic owned by Huff early in 2011. Primary Health Care charged each “patient” $200 in cash in return for prescriptions for Oxycodone and other narcotics without the benefit of a legitimate medical examination by a physician. The physician on staff saw approximately 25 patients per day.
"This case should serve as an example of just how serious we are about stopping those who are involved in overprescribing prescription medication," said Attorney General DeWine. "People are regularly overdosing on prescriptions that they should never have access to in the first place, and if we have to put those responsible in prison for decades, that's what we'll do."
Huff received between $5,000 and $8,000 in U.S. currency three times a month for his share of the clinic's proceeds. In 2009, Huff received approximately $245,000 in U.S. currency from the operation of the pain clinic. Huff did not deposit this cash into a bank; instead he kept the currency at several locations including his basement and in the shed behind his mother-in-law's house. Huff used the money to pay day-to-day expenses, purchase assets, and take vacations.
The proceeds generated from the operation of Primary Health Care pain clinic represented the proceeds of illegal narcotics trafficking. Other drugs commonly prescribed also included Hydrocodone and Xanax.
Huff purchased a house in Lucasville, Ohio and concealed the purchase of the house by deeding the house in the name of another individual. Huff used $40,000 in drug proceeds to pay for the house.
Huff pleaded guilty on June 27, 2012 to one count of unlawfully conspiring to distribute oxycodone and one count of money laundering. He was sentenced to 240 months for the conspiracy followed by 22 months for the money laundering.“Kevin Huff not only fueled the prescription drug problem in Southern Ohio, he supported addiction in several parts of the country”, said Acting Special Agent in Charge Kathy A. Enstrom, IRS, Criminal Investigation, Cincinnati Field Office. “IRS Criminal Investigation is committed with taking the profit away from criminal enterprises and putting those individuals in jail.”
Stewart recognized District Criminal Chief Kenneth L. Parker and Special Assistant U.S. Attorney Aaron Haslam from Ohio Attorney General DeWine’s Office, who are representing the United States in this case.
27 April 2013
Dutschke Charged in Ricin CaseRead the Press Release
OXFORD, Miss. B Felicia C. Adams, United States Attorney for the Northern District of Mississippi, and Daniel McMullen, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in Mississippi, announce:
James Everett Dutschke, age 41, of Tupelo, Mississippi, has been arrested on a Criminal Complaint charging him with knowingly developing, producing, stockpiling, transferring, acquiring, retaining and possessing a biological agent, toxin and delivery system, for use as a weapon, to wit: ricin, and with attempting, threatening and conspiring to do the same, in violation of Title 18, United States Code, Section 175(a). If convicted on this charge, Dutschke faces maximum possible penalties of life imprisonment, a $250,000 fine and 5 years of supervised release.
Dutschke is expected to appear in the United States District Court in Oxford, Mississippi, on Monday, April 29, 2013, before U. S. Magistrate Judge S. Allan Alexander. The arrest is based on a federal charge. A defendant is presumed innocent until proven guilty in court.
The arrest resulted from a cooperative investigation by the Federal Bureau of Investigation-Mississippi and Memphis Joint Terrorism Task Forces, the United States Secret Service, the U. S. Postal Inspection Service, the U. S. Capitol Police, the United States Attorney’s Office for the Northern District of Mississippi and the Counterterrorism Section of the Justice Department’s National Security Division, assisted by the following state and local agencies: Mississippi National Guard 47th Civil Support, Mississippi Office of Homeland Security, Lee County Sheriff’s Office, Prentiss County Sheriff’s Office, Corinth Police Department, Tupelo Police Department and Booneville Police Department.
The public is reminded to be vigilant in alerting any suspicious letters or activity to the appropriate authorities.
26 April 2013
Week in Review – South BendRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
South Bend, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Robert Pulliam, 52, of New Carlisle, Indiana, pled guilty before Magistrate Judge Christopher Nuechterlein to the felony offense of manufacturing marijuana.Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. Sentencing has been set for 7/31/13.This charge was filed as a result of an investigation by the Drug Enforcement Administration. This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
Dale Hite, 27, of Plymouth, Indiana, pled guilty before Magistrate Judge Christopher Nuechterlein to the felony offense of conspiracy to manufacture methamphetamine.Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. Sentencing has been set for 7/25/13.This charge was filed as a result of an investigation by the Drug Enforcement Administration.This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITION:
Shawn Lunsford, 35, of Peru, Indiana, was sentenced by District Judge Jon DeGuilio to 63 months imprisonment and 25 years of supervised release after pleading guilty to the felony offense of possession of child pornography. Based on an ongoing investigation, a gents from the FBI Cybercrimes Unit and other affiliated agencies executed a search warrant at Lunsford’s residence in order to search any computers that were found in the home for the presence of child pornography. Lunsford was found to be in possession of approximately 7,073 images, approximately 1000 of which were prepubescent minors. This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney John Maciejczyk.
Week in Review – HammondRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Jose Gonzalez, 31, of Chicago, Illinois, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of possession with the intent to distribute 500 grams or more of cocaine.Sentencing has been set for 8/7/13.This charge was filed as a result of an investigation by the Drug Enforcement Administration.This case is being prosecuted by Assistant United States Attorney Joshua Kolar.
Johana Velazquez, 29, of Rensselaer, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of conspiracy to distribute cocaine.Sentencing has been set for 6/27/13.This charge was filed as a result of an investigation by the Drug Enforcement Administration and the Illinois State Police.This case is being prosecuted by Assistant United States Attorney Joshua Kolar.
Krystal Puntillo-Raggs, 21, Javorious Raggs, 22, and Terrence Benson, 22, of Hammond, Indiana, pled guilty before Senior District Judge Rudy Lozano to the felony offense of passing counterfeit obligations.Sentencing for Raggs and Benson has been set for 7/12/13.Puntillo-Raggs will be sentenced on 8/13/13.These charges were filed as a result of an investigation by the United States Secret Service.This case is being prosecuted by Assistant United States Attorney Randall Stewart.
Darren Williams, 34, of Lafayette, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of possession of child pornography.Sentencing has been set for 7/10/13.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Columbus, Indiana Police Department.This case is being prosecuted by Assistant United States Attorney Jill Koster.
Julian Rebeles, 22, of Hammond, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of possession of a firearm by a convicted felon.Sentencing has been set for 7/10/13.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force and the Hammond Police Department.This case is being prosecuted by Assistant United States Attorney David Nozick.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Phillip Ramos, II, 25, of Hammond, Indiana, was sentenced by Chief Judge Philip Simon to 27 months imprisonment and 3 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute cocaine.According to documents filed by the government, during a traffic stop involving Ramos, Hammond Police found a black duffle bag holding eight plastic bags containing a total of 3600 gross grams of a green leafy substance purported to be marijuana. Additionally the duffle bag contained six ounces of a white rock like substance purported to be cocaine, along with a Volunteer Enterprises and Smith and Wesson revolvers.A Sentry Safe was also located in the trunk of the vehicle that contained 647 gross grams of marijuana, a bag that contained 22.5 gross grams of cocaine and assorted prescription pills. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hammond Police Department.This case was prosecuted by Assistant United States Attorney David Nozick.
Nathan Elmore, 22, of Gary, Indiana, was sentenced by Senior District Judge Rudy Lozano to 121 months imprisonment, $21,440.80 in restitution and 3 years of supervised release after pleading guilty to the felony offenses of the robberies of Rally’s, Family Dollar, Church’s Chicken, Kentucky Fried Chicken and Auto Zone in Gary, Indiana; Game Stop and Auto Zone in Hammond, Indiana; and the armed robbery of Tech Credit Union in East Chicago, Indiana.
Seandell Rounds, 21, of Riverdale, Illinois, a co-defendant in the Elmore case, was sentenced by Senior District Judge Rudy Lozano to 57 months imprisonment, $189.00 in restitution and 2 years of supervised release after pleading guilty to the felony offenses of the robberies of Subway in Gary and Auto Zone in Merrillville, Indiana.
These charges were brought as a result of a cooperative law enforcement effort by the Federal Bureau of Investigation, the East Chicago Police Department, the Gary Police Department, the Hammond Police Department and the Merrillville Police Department.
This case was prosecuted by Assistant United States Attorney Dean Lanter.
Warren County, Kentucky, Construction Company Owner Guilty of Income Tax EvasionRead the Press Release
– Concealed $1,045,327 in income from the IRS
– Failed to disclose his ownership in Tri-State Construction and income receivedLOUISVILLE, KY – A Warren County, Kentucky construction company owner pleaded guilty in United States District Court this week to an Indictment charging tax evasion announced David J. Hale, United States Attorney for the Western District of Kentucky.
Darrell Mathis, owner of Tri-State Construction, pleaded guilty before United States Magistrate Judge James Moyer, on April 22, 2013, to five counts of income tax evasion due for the tax years 1999 through 2001 and 2005 through 2009. The returns were filed with the Internal Revenue Service (IRS).
According to the plea agreement, from June 2004 until December 2011, Mathis evaded payment of $177,634 in federal income taxes due for the tax years 1999 through 2001. During this time period, among other things, he falsely submitted an IRS Offer-in-Compromise Form 656 in which he concealed his ownership and control of his personal assets, including vehicles and boats, and his business, Tri-State Construction and the company’s bank accounts. Throughout this period he owned and operated Tri-State construction but concealed his ownership and income from the IRS by placing it in the name of a nominee and directing IRS From W-2's not be filed in his name. For the tax years 2005 through 2008 Mathis received approximately $1,045,327 in income from Tri-State construction that he concealed from the IRS by not reporting the income on his federal income tax returns. The resulting additional tax due and owing for 2005 through 2009, is $383,558. Mathis knowingly signed his 2005 through 2008 federal income tax returns under the penalty of perjury.
The tax evasion counts, Mathis pleaded guilty to, also charged that in December 2007, Mathis purchased a piece of real estate at Cooper Dearing Road for $144,900 in the name of a nominee to conceal the purchase from the IRS. In January 2008, he sold this piece of real estate for $235,000 and purchased property located at 121 Timber Ridge Court, Alvaton, Kentucky, again in the name of a nominee. Further, in 2009 and 2010, Mathis caused the owner of Southside Auto Sales to file liens on his vehicles to conceal his equity in them from the IRS. Lastly, in January 2007, Mathis purchased a Keystone camper, titling the camper in a nominee name to conceal his ownership.
Mathis faces up to twenty-five years in prison and a fine of $500,000. A Sentencing date has not been scheduled.
This case is being prosecuted by Assistant United States Attorney Bryan Calhoun and Joshua Judd and was investigated by the IRS, Division of Criminal Investigation.
Vincent J. Garcia Sentenced to Twenty-Seven Months in Federal Prison for Bank Fraud Conviction - Albuquerque Real Estate Developer Also Ordered to Pay $722,543.76 in RestitutionRead the Press Release
ALBUQUERQUE – Albuquerque real estate developer Vincent J. Garcia, 61, was sentenced this afternoon to 27 months in federal prison followed by five years of supervised release for his bank fraud conviction. Garcia also was ordered to pay $722,543.76 in restitution to the banks that were the victims of his criminal conduct. Garcia is required to surrender himself to a federal correctional institution to be designated by the U.S. Bureau of Prisons within 60 days to begin serving his prison sentence.
Garcia’s sentence was announced by U.S. Attorney Kenneth J. Gonzales, Gabriel L. Grchan, Acting Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation, David Anderson, Special Agent in Charge of the Kansas City Region of the Federal Deposit Insurance Corporation (FDIC), Office of Inspector General, and Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI.
Garcia pleaded guilty in Aug. 2011, to Count 3 of a 19-count superseding indictment charging him and co-defendants Derek Barnhill, 48, formerly of Rio Rancho, and David Garcia, 36, of Albuquerque, with bank fraud and money laundering charges in connection with three real estate development projects, including the Anaszai Downtown LLC (Anasazi Building). In entering his plea, Garcia admitted committing bank fraud in the amount of $365,677.00, and acknowledged that the gross loss amount to the victims of his fraudulent activity was $842,237.44.
Garcia admitted executing a plan to obtain funding from the Columbian Bank & Trust Co. (Bank) by having Barnhill submit a bank construction loan drawn-down request containing a material misrepresentation. Garcia then used $360,000.00 in construction loan proceeds to invest in a casino in Washington State. To obtain these funds, Garcia had Barnhill submit a construction loan draw-down request in the amount of $365,677.00 to the Bank on Feb. 12, 2007. The draw-down request falsely stated that the funds were needed for “materials and price lock” for construction services to be provided by a specific company.
Garcia also admitted instructing Barnhill to draw down the construction loan knowing that the funds would not be directly utilized in the construction of the Anasazi Building. In requesting that Barnhill submit the draw-down request, Garcia knew that the request would falsely represent that the money would be used for a direct construction expense.
In his plea agreement, Garcia stated that his company engaged his son, co-defendant David Garcia, to act as the general contractor for the Anasazi Building and the other real estate development projects, and that David Garcia was compensated in the form of labor and materials for construction work on his personal residence. Garcia admitted submitting invoices for work performed on his son’s residence to the Bank and to the First Financial Credit Union and manipulated the invoices to appear to be direct expenses for his real estate development projects. Garcia asserted that David Garcia was not aware that the invoices for work performed and labor provided at his residence were being submitted to the banks as direct project expenses.
In Dec. 2010, Barnhill entered a guilty plea to Count 3, a bank fraud offense, and Count 10, a money laundering offense, of the superseding indictment. In his plea agreement, Barnhill provided a more expansive description of the bank fraud to which Garcia entered his guilty plea. To that end, Barnhill said that, on Feb. 12, 2007, Garcia told Barnhill that he needed $360,000.00 for a “good faith payment” towards the purchase of a casino. Garcia asked Barnhill to use an old bid for sheet rock for the Anasazi Building to get the money. Barnhill altered the sheet rock bid to support a fictitious draw-down request for $365,677.00 and submitted the request based solely on the false invoice to the Bank. After the Bank disbursed the money, Barnhill transferred the funds to an Anasazi account at New Mexico Bank and Trust. The next day, Garcia and Barnhill went to New Mexico Bank and Trust and withdrew $360,000.00 of the proceeds and the money at Compass Bank in an account in the name of Albuquerque Downtown Partners. Thereafter, Garcia flew to Washington State with a Compass Bank check for $360,000.00 to make a payment on the casino. In entering his guilty plea, Barnhill did not implicate David Garcia in the criminal conduct charged in the superseding indictment. The charges against David Garcia subsequently were dismissed.
Barnhill faces up to 20 years of imprisonment, a maximum $1,000,000 fine, and restitution as ordered by the court. He remains on conditions of release pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by IRS Criminal Investigation, the FDIC-OIG and the Albuquerque office of the FBI, and was prosecuted by Assistant U.S. Attorney Jonathon M. Gerson.United States Sues Novartis Pharmaceuticals Corp. for Allegedly Paying Multi-Million Dollar Kickbacks to Doctors in Exchange for Prescribing Its DrugsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Stuart F. Delery, the Acting Assistant Attorney General for the U.S. Department of Justice’s Civil Division, announced today that the United States has filed a civil false claims lawsuit against NOVARTIS PHARMACEUTICALS CORP. (“NOVARTIS”). The Government’s Complaint seeks damages and civil penalties under the False Claims Act and under the common law for paying kickbacks to doctors to induce them to prescribe NOVARTIS pharmaceutical products that were reimbursed by federal health care programs. The lawsuit alleges that the payments violated the Anti-Kickback Statute (“AKS”) and, as a result of Novartis’s unlawful conduct, the Government paid false claims for reimbursement for Novartis pharmaceutical products. The Government intervened in part in an action before Judge Paul G. Gardephe filed by a whistleblower on January 5, 2011, under the qui tam provisions of the False Claims Act. This is the second lawsuit to be filed in the Southern District this month against NOVARTIS alleging illegal kickbacks. The U.S. Attorney’s Office sued NOVARTIS on April 23, 2013 for allegedly paying kickbacks to pharmacies that were disguised as rebates and discounts in exchange for the pharmacies switching patients on CellCept or a generic drug to NOVARTIS’s immunosuppressant drug, Myfortic. That suit is before Judge Colleen McMahon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Novartis corrupted the prescription drug dispensing process with multi-million dollar ‘incentive programs’ that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs. And for its investment, Novartis reaped dramatically increased profits on these drugs, and Medicare, Medicaid, and other federal healthcare programs were left holding the bag, doling out millions of dollars in kickback-tainted claims. Healthcare fraud imposes tremendous costs and causes great harm to an already burdened healthcare system, and the government will not tolerate it. The widespread kickback fraud alleged in our two lawsuits against Novartis – which only a few years ago settled a False Claims Act case involving violations of the Anti-Kickback Statute based on illegal payments to doctors – makes us question whether Novartis is getting the message.”
Acting Assistant Attorney General Stuart F. Delery said: “Kickback schemes like those alleged in this case not only call into question the integrity of individual medical decisions, they raise the cost of health care for all of us. Patients deserve care based on a doctor’s sound medical judgment, not the doctor’s personal financial interest. The Department of Justice will continue to pursue companies that use improper incentives, like those alleged here, to promote their products.”
The following allegations are based on the Complaint filed today in Manhattan federal court:
NOVARTIS, a pharmaceutical company headquartered in East Hanover, New Jersey, is a subsidiary of NOVARTIS A.G., an international pharmaceutical company headquartered in Basel, Switzerland. From January 2001 through at least November 2011, NOVARTIS systematically violated the AKS, which prohibits the payment of remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally-funded programs. Indeed, NOVARTIS violated its own internal policies concerning speaker programs, which require that the programs have an educational purpose and that slides about the company’s drugs be presented. NOVARTIS violated the AKS by paying doctors to speak about certain drugs, including its hypertension drugs Lotrel and Valturna and its diabetes drug Starlix, at events that were often little or nothing more than social occasions for the doctors. The payments and lavish dinners given to the doctors were, in reality, kickbacks to the speakers and attendees to induce them to write prescriptions for NOVARTIS drugs. In many instances NOVARTIS made payments to doctors for purported speaker programs that either did not occur at all or that had few or no attendees, and thousands of programs were held all over the country at which few or no slides were shown and the doctors who participated spent little or no time discussing the drug at issue.
Many speaker programs were also held in circumstances in which it would have been virtually impossible for any presentation to be made, such as on fishing trips off the Florida coast. No slides were shown on the boat. Other NOVARTIS events were held at Hooters restaurants.
In connection with these programs, NOVARTIS also frequently treated the doctors to expensive dinners that they hosted at high-end restaurants. For example, a July 5 dinner for three, including the speaker, at a Washington, D.C. restaurant cost $2,016, or $672 per person. NOVARTIS also paid a $1,000 honorarium to the speaker for this program. One of the two attendees had attended the same program a short time earlier. At another program held on Valentine’s Day in 2006, NOVARTIS paid $3,127, for a meal for three people at a West Des Moines, Iowa restaurant, or $1,042 per person.
NOVARTIS’s internal analyses show that speaker programs had a high return on investment in terms of the additional prescriptions for its drugs written by the doctors who participated in the programs, both as speakers and attendees, with the highest return arising from payments to doctors as “honoraria” for speaking. In short, doctors increased the number of prescriptions they wrote when they were being paid by Novartis to speak about a drug. As a result, NOVARTIS spent millions on speaker programs yearly. According to NOVARTIS’s data, during the period from January 2002 through November 2011 it spent nearly $65 million and conducted more than 38,000 speaker programs for just three drugs: the hypertension drugs, Lotrel and Valturna, and the diabetes drug, Starlix. In the absence of a legitimate purpose for many of the programs, the payments were nothing more than kickbacks to the doctors that induced them to write prescriptions in violation of the AKS.
NOVARTIS was well aware that its speaker programs created opportunities to provide kickbacks to doctors. In September 2010, NOVARTIS entered into a settlement with the U.S. Department of Justice to settle False Claims Act lawsuits based in part on violations of the AKS due to illegal remuneration paid to doctors through such mechanisms as speaker programs, and signed a Corporate Integrity Agreement (“CIA”) with the U.S. Department of Health and Human Services Office of Inspector General agreeing to implement a rigorous compliance program.
Even after entering into the CIA, NOVARTIS’s compliance program was inadequate to prevent kickbacks from being paid in conjunction with NOVARTIS’s speaker programs. NOVARTIS did not adequately review its speaker program to determine whether the programs were being used for an illegitimate purpose. Furthermore, although many instances of speaker program abuse were reported to NOVARTIS, sanctions were generally mere slaps on the wrist. In some cases, sales representatives who violated NOVARTIS’s own speaker program policies were nevertheless promoted. Even after September 2010, NOVARTIS continued to conduct bogus speaker programs that were simply vehicles for paying kickbacks to doctors in the form of honoraria and expensive meals.
As a consequence of its violations of the AKS, NOVARTIS has caused the submission of numerous false claims for drugs to federal health care programs, including Medicare, Medicaid, TRICARE, and the Department of Veterans Affairs health care program, resulting in millions of dollars in reimbursements. Novartis’s unlawful conduct caused those false claims to be made to and paid by the federal health care programs.
The Complaint seeks treble damages and penalties under the False Claims Act for false claims for reimbursement for Lotrel, Valturna, and Stalix, as well as for other NOVARTIS cardiovascular drugs. In addition, the United States seeks damages under the common law.
Mr. Bharara thanked the Justice Department’s Civil Division and the Department of Health and Human Services, Office of Inspector General for their extraordinary assistance in this case.
The case is being handled by the United States Attorney’s Office’s Civil Frauds Unit. Mr. Bharara established the Civil Frauds Unit in March 2010 to bring renewed focus and additional resources to combating civil fraud.
Assistant U.S. Attorneys Heidi A. Wendel and Mara E. Trager are in charge of the case.
U.S. v. Novartis 2 Complaint
U.S. v. Novartis Relator 2nd Amended Complaint (11civ00071)United States Successful in False Claims Act Cases Against Landlords Charging Housing Choice Voucher Tenants Excess RentsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Marcia K. Cypen, Executive Director, Legal Services of Greater Miami, Inc. (LSGMI), announced the United States’ successful prosecution of several civil False Claims Act cases brought under the qui tam provisions of the False Claims Act, 31 U.S.C. §3730(b) against landlords participating in the United States Department of Housing and Urban Development’s (HUD) Housing Choice Voucher/Section 8 (HCV) Program who unlawfully received excessive rent subsidies known as Housing Assistance Payments (HAP).
Through Section 8 of the United States Housing Act of 1937, as amended, HUD distributes federal funds to local public housing agencies to assist eligible low income families in obtaining decent, safe, and sanitary housing in the private rental market. To receive federally subsidized rents, landlords participating in the HCV Program contractually agree to comply with HUD requirements, to charge only the rent authorized by the local public housing agency and to not raise rents or change lease terms without the written approval of the local public housing agency.
Two of the False Claims Act cases were originally filed by LSGMI who represented Sabrina R. Newberry and Taronda Wade, two low income tenants participating in the HCV Program administered by the Miami-Dade Public Housing and Community Development, a department of Miami-Dade County previously known as the Miami-Dade Public Housing Agency. The tenants brought the cases on behalf of the United States alleging that their landlords, the defendants, made unlawful false claims for rental subsidies by charging and accepting excessive rents, in violation of HUD rules and contractual requirements. After investigating the cases, the United States intervened in the two suits. The United States filed amended complaints asserting that the landlords violated the False Claims Act by making false statements to the County’s HCV Program and endorsing HAP rent subsidy checks for which the United States suffered damages.
1. United States of America, ex rel Sabrina R . Newberry, Relator, Plaintiffs, v. George David Horton, Defendant, Case No. 1:11-cv-20153-Graham.
According to court documents, during her brief tenancy, Newberry’s landlord, the Rev. Dr. George David Horton, collected $5,377.32 in rent from Ms. Newberry in excess of that specified in the HAP Contract and the rental agreement approved by the County’s HCV Program. A settlement was reached in this matter after the United States filed a Motion for Summary Judgment. There, the landlord who denied wrongdoing, paid to the United States $26,000 of which Ms. Newberry received, pursuant to the provisions of the False Claims Act, a Relator’s share of $5,377.32 and recovery of her legal expenses. During its investigation of the matter, the United States learned that Rev. Dr. Horton had also accepted at least $19,169.00 in excessive rents from another HCV tenant over a long period of time. In settlement of that matter, the landlord agreed to pay to the United States an additional $24,000.00.
2. United States of America, ex. rel. Taronda Wade, Relator, vs. DBS Investments, LLC, and John P. Joseph, 1:11-cv-20155-Cooke.
Court documents provide that Ms. Wade’s landlord, DBS Investments and John P. Joseph, unlawfully charged and accepted $4,398.00 more than Ms. Wade was lawfully required to pay during her tenancy. U.S. District Judge Marcia Cooke granted the United States’ motion for summary judgment in this matter and entered an award against the Defendants and in favor of the United States of $35,194.00, consisting of damages in the amount of $13,194.00 and penalties of $22,000. The Court additionally entered an award of $4,398.00 in damages, $10,470.00 in attorney’s fees and $152.35 in costs to Ms. Wade.
U.S. Attorney Wifredo A. Ferrer stated, “We will not tolerate abuse of federal housing or other programs. Schemes such as the ones uncovered in these cases steal taxpayers’ monies and often prey on those who need our assistance the most. We appreciate the actions of Legal Services of Greater Miami in bringing these cases and applaud whistleblowers for coming forward and exposing these schemes. We are pleased to return these monies to the taxpayers.”
“This is not only a legal victory for low-income tenants but also serves as a deterrent to other landlords who do not comply with federal housing requirements,” said LSGMI Senior Staff Attorney Sean Rowley. Added Mr. Rowley, “This case also illustrates how the novel use of the False Claims Act to challenge illegal conduct by landlords can be a highly effective legal strategy and can serve as precedent for other public housing tenant advocates.”
Mr. Ferrer commended LSGM and Miami-Dade Public Housing and Community Development for their assistance and investigative efforts. These cases were prosecuted by Assistant U.S. Attorney James A. Weinkle.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
United States Files Complaint Against Novartis Pharmaceuticals Corp. for Allegedly Paying Kickbacks to Doctors in Exchange for Prescribing Its DrugsRead the Press Release
The Justice Department announced today that the United States has filed a second civil false claims lawsuit against Novartis Pharmaceuticals Corp. involving alleged kickbacks paid by the company to health care providers. The government’s complaint seeks damages and civil penalties under the False Claims Act and under the common law for paying kickbacks to doctors to induce them to prescribe Novartis pharmaceutical products that were reimbursed by federal health care programs. The lawsuit alleges that the payments violated the Anti-Kickback Statute and, as a result of Novartis’s unlawful conduct, the government paid false claims for reimbursement for Novartis pharmaceutical products.
“Kickback schemes like those alleged in this case not only call into question the integrity of individual medical decisions, but they also raise the cost of health care for all of us,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “Patients deserve care based on a doctor’s sound medical judgment, not the doctor’s personal financial interest. The Department of Justice will continue to pursue companies that use improper incentives, like those alleged here, to promote their products.”
“As alleged, Novartis corrupted the prescription drug dispensing process with multi-million dollar ‘incentive programs’ that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs. And for its investment, Novartis reaped dramatically increased profits on these drugs, and Medicare, Medicaid, and other federal healthcare programs were left holding the bag, doling out millions of dollars in kickback-tainted claims,” said U.S. Attorney for the Southern District of New York Preet Bharara. “Healthcare fraud imposes tremendous costs and causes great harm to an already burdened healthcare system, and the government will not tolerate it. The widespread kickback fraud alleged in our two lawsuits against Novartis – which only a few years ago settled a False Claims Act case involving violations of the Anti-Kickback Statute based on illegal payments to doctors – makes us question whether Novartis is getting the message.”
The following allegations are based on the government’s complaint filed in the Southern District of New York:
Novartis, a pharmaceutical company headquartered in East Hanover, N.J., is a subsidiary of Novartis AG, an international pharmaceutical company headquartered in Basel, Switzerland. From January 2001 through at least November 2011, Novartis systematically violated the Anti-Kickback Statute , which prohibits the payment of remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally-funded programs. Indeed, Novartis violated its own internal policies concerning speaker programs, which require that the programs have an educational purpose and that slides about the company’s drugs be presented. Novartis violated the Anti-Kickback Statute by paying doctors to speak about certain drugs, including its hypertension drugs Lotrel and Valturna and its diabetes drug Starlix, at events that were often little or nothing more than social occasions for the doctors. The payments and lavish dinners given to the doctors were, in reality, kickbacks to the speakers and attendees to induce them to write prescriptions for Novartis drugs. In many instances Novartis made payments to doctors for purported speaker programs that either did not occur at all or that had few or no attendees, and thousands of programs were held all over the country at which few or no slides were shown and the doctors who participated spent little or no time discussing the drug at issue.
Many speaker programs were also held in circumstances in which it would have been virtually impossible for any presentation to be made, such as on fishing trips off the Florida coast. Other Novartis events were held at Hooters restaurants.
In connection with these programs, Novartis also frequently treated the doctors to expensive dinners that they hosted at high-end restaurants. For example, a July 5 dinner for three, including the speaker, at a Washington, D.C. restaurant cost $2,016, or $672 per person. Novartis also paid a $1,000 honorarium to the speaker for this program. One of the two attendees had attended the same program a short time earlier. At another program held on Valentine’s Day in 2006, Novartis paid $3,127, for a meal for two at a West Des Moines, Iowa restaurant, or $1,042 per person.
Novartis’s internal analyses show that speaker programs had a high return on investment in terms of the additional prescriptions for its drugs written by the doctors who participated in the programs, both as speakers and attendees, with the highest return arising from payments to doctors as “honoraria” for speaking. In short, doctors increased the number of prescriptions they wrote when they were being paid by Novartis to speak about a drug. As a result, Novartis spent millions on speaker programs yearly. According to Novartis’s data, during the period from January 2002 through November 2011, it spent nearly $65 million and conducted more than 38,000 speaker programs for just three drugs: the hypertension drugs, Lotrel and Valturna, and the diabetes drug, Starlix. In the absence of a legitimate purpose for many of the programs, the payments were nothing more than kickbacks to the doctors that induced them to write prescriptions in violation of the Anti-Kickback Statute .
Novartis was well aware that its speaker programs created opportunities to provide kickbacks to doctors. In September 2010, Novartis entered into a settlement with the U.S. Department of Justice to settle False Claims Act lawsuits based in part on violations of the AKS due to illegal remuneration paid to doctors through such mechanisms as speaker programs, and signed a corporate integrity agreement with the U.S. Department of Health and Human Services Office of Inspector General agreeing to implement a rigorous compliance program.
Even after entering into the corporate integrity agreement, Novartis’s compliance program failed to prevent kickbacks from being paid in conjunction with Novartis’s speaker programs. No individual at the company was tasked with examining its speaker program data to determine whether the programs were used for an illegitimate purpose. Furthermore, although instances of speaker program abuse were reported to Novartis, sanctions were generally mere slaps on the wrist. In some cases, sales representatives who violated Novartis’s own speaker program policies were nevertheless promoted. Even after September 2010, Novartis continued to conduct bogus speaker programs that were simply vehicles for paying kickbacks to doctors in the form of honoraria and expensive meals.
As a consequence of its violations of the Anti-Kickback Statute , Novartis has caused the submission of numerous false claims for drugs to federal health care programs, including Medicare, Medicaid, TRICARE and the Department of Veterans Affairs health care program, resulting in millions of dollars in reimbursements. Novartis’s unlawful conduct caused those false claims to be made to and paid by the federal health care programs.
The complaint seeks treble damages and penalties under the False Claims Act for the false claims for reimbursement for Lotrel, Valturna, and Stalix, as well as for other Novartis cardiovascular drugs. In addition, the United States seeks damages under the common law.
The complaint was filed in a lawsuit brought under the qui tam, or whistleblower, provisions of the False Claims Act by Oswald Bilotta, a former Novartis sales representative. Under the Act’s qui tam provisions, a private citizen, known as a “relator,” can sue on behalf of the United States and share in any recovery. The United States may join the lawsuit, as it has here. The lawsuit is United States ex rel. Bilotta v. Novartis Pharmaceuticals Corporation et al., No. 11-cv-0071 (S.D.N.Y.). The claims in the complaint filed by the government are allegations only, and there has been no determination of liability.
On April 23, 2013, the United States filed a separate complaint in the Southern District of New York against Novartis, alleging that the company gave kickbacks, in the form of rebates and discounts, to pharmacies in exchange for the pharmacies’ agreement to switch transplant patients from competitor drugs to a Novartis product. As here, that complaint seeks treble damages and civil penalties under the False Claims Act and remedies under the common law.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.
United States Attorney's Office Supports Drug Enforcement Administration's National Take-Back InitiativeRead the Press Release
United States Attorney Michael J. Moore, Middle District of Georgia, announces the commitment of resources to the Drug Enforcement Administration’s National Take-Back Initiative which will take place on Saturday, April 27, 2013, from 10:00 a.m. to 2:00 p.m. in various locations throughout the district. This is an opportunity for those who have subsequently accumulated unwanted and unused prescription drugs, to safely dispose of them.In the five previous Take-Back events, the Drug Enforcement Administration, along with state, local, and tribal law enforcement partners, have collected more than two million pounds (1,018 tons) of prescription medication from circulation. The National Prescription Take-Back Day aims to provide a safe, convenient and responsible means of disposal, while also educating the public about the potential for abuse of these medications.
“We understand that prescription medicine abuse is a serious issue that is affecting an entire generation,” said U.S. Attorney Michael J. Moore. “We have joined this important effort because we are committed to fighting prescription medicine abuse. As prosecutors of narcotics cases, we understand that the need to endorse this effort is crucial. Cleaning out medicine cabinets and securing medications will reduce the chance of someone abusing prescription medication that is not intended for them, and will protect surplus drugs from theft.
The U.S. Attorney’s Office encourages everyone to take part in the National Prescription Take-Back Initiative on Saturday, April 27, 2013 where the Drug Enforcement Administration, state, local, and community partners will be collecting unwanted medicines. In addition, we urge everyone to report drug dealers and unscrupulous medical personnel who provide prescription medicines to our citizens.
Take-Back events will be held in various locations, including Eatonton, Macon, Forsyth, Leesburg, Athens, Ft. Benning, and Blakely.To join the effort, find a location near you and take the pledge to stop prescription medicines abuse go to: Locate Collection Site Near You
Collection site locations are now available. Check back often; sites are added daily. Please contact the Call Center at 1-800-882-9539 if you require assistance.Tokio Woman Pleads Guilty to Conspiracy to Commit Bank FraudRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on April, 23, 2013, Kelly Touche of Tokio, N.D., pleaded guilty before U.S. District Judge Ralph R. Erickson to a charge of conspiracy to commit bank fraud.
Touche, 39, pleaded guilty to soliciting another person to cash a stolen check when she knew the check had been stolen. The incident occurred in September of 2012 in the Districts of North Dakota and Minnesota.
The charge of conspiracy to commit bank fraud carries a statutory maximum penalty of 30 years' imprisonment.
The case was investigated by the U.S. Postal Inspection Service.
Sentencing for Touche has been scheduled for July 22, 2013, in U.S. District Court in Fargo, N.D., at 11:00 a.m.
Assistant U.S. Attorney Janice M. Morley is prosecuting the case.
Three Charged with Filing Fraudulent Claims for Federal Income Tax RefundsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON, OHIO -- A federal grand jury here has indicted Ebony F. Taste, 27, Trotwood, Saleen M. Nolan, 25, Dayton, and Jazmen Yates, 29, Galloway, with one count of conspiracy to file false claims for federal income tax refunds, totaling in excess of $150,000, with the Internal Revenue Service (IRS). In addition, each was charged individually with filing false claims for federal income tax refunds with the IRS; Taste was charged with five counts, Nolan with four counts, and Yates with four counts.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Cincinnati Field Office and Gavin McClaren, Resident Agent in Charge, U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, Cleveland, Ohio announced the indictment filed today.
The indictment accuses Taste, Nolan, and Yates with participating in a conspiracy between late 2008 and April 2011. The indictment alleges that Taste, Nolan, and Yates obtained personal identifying information, including names, dates of birth, and Social Security numbers belonging to other individuals. Yates is also accused with recruiting purported taxpayers and directing them to Taste.
Taste and Nolan allegedly prepared and filed false income tax returns in the names of the purported taxpayers. Each of the false income tax returns falsely claimed substantial income tax refunds. It has been alleged that Taste and Nolan instructed the IRS to wire transfer the false income tax refunds to various bank accounts the two defendants controlled. Taste, Nolan, and Yates allegedly kept a portion of the fraudulently obtained income tax refunds for themselves and provided the remainder of the income tax refunds to the purported taxpayers.
"Law abiding citizens expect the government to hold accountable those who use deceit and fraud to line their pockets with money, especially when that money represents stolen federal taxes," said Kathy A. Enstrom, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.An indictment is merely an accusation. All defendants are presumed innocent until and unless proven guilty. Conspiracy to file false claims for federal income tax refunds with the IRS is punishable by up to ten years in prison and a fine of up to $250,000. Filing false claims for federal income tax refunds with the IRS is punishable by up to five years in prison and a fine of up to $250,000.
This case is being prosecuted by Assistant United States Attorney Brent Tabacchi and investigated by special agents of IRS-Criminal Investigation and the Veterans Administration Office of Inspector General.
Theft and Fraud Charges Filed Against Canton Woman Accused of Illegally Getting Social SecurityRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced that a grand jury returned a two-count indictment charging Lisa J. Music, 54, of Canton, with one count of theft of government property and one count of Social Security fraud.
The indictment alleges that Music stole and converted to her own use, approximately $37,390 in Social Security payments made to her that she was not entitled to receive.
The indictment further alleges that Music concealed and failed to disclose her marriage to her second husband in order to continue to receive Social Security payments.
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.
The case is being prosecuted by Assistant U.S. Attorney Lauren Bell, following investigation by agents of the Social Security Administration Office of Inspector General.
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.
Stamford Man Sentenced to Five Years in Federal Prison for Distributing CocaineRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, today announced that ELLIOT CHIAPPETTA, 61, of Stamford, was sentenced yesterday by United States District Judge Janet C. Hall in New Haven to 60 months of imprisonment, followed by four years of supervised release, for distributing cocaine.
According to court documents and statements made in court, CHIAPPETTA was part of a drug-trafficking ring based in Stamford in 2009 and 2010. The investigation, which included the use of court-authorized wiretaps and physical surveillance, revealed that CHIAPPETTA and his co-conspirators acquired cocaine and sold it in smaller quantities to customers in Fairfield County. In April 2010, CHIAPPETTA traveled with a co-conspirator to southern Florida to obtain a kilogram of cocaine from their source of supply.
On January 28, 2013, CHIAPPETTA pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 500 grams or more of cocaine.
CHIAPPETTA’s criminal history includes state felony convictions in 1992 for sale of narcotics and possession of narcotics, and a federal conviction in 2004 for conspiring to conduct an illegal gambling business.
This matter is being investigated by the FBI Fairfield County Organized Crime Task Force and the Stamford Police Department. The Task Force is composed of members of the FBI, the Internal Revenue Service – Criminal Investigation, the Stamford Police Department, the Bridgeport Police Department and the Connecticut State Police.
The case is being prosecuted by Assistant United States Attorney Hal Chen.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Springfield Man Arrested for Producing Child PornographyRead the Press Release
ALEXANDRIA, Va. – Andrew Choi, 35, of Springfield, Va., was arrested today on charges of production and possession of child pornography.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Chief of Police Douglas W. Keen of the Manassas City Police Department made the announcement after Choi’s initial appearance before United States Magistrate Judge Theresa C. Buchanan.
According to court documents and court proceedings today, Choi engaged in online video chats with underage boys between May 2012 and January 2013. The underage boys performed sex acts on camera and Choi recorded it using a screen capture program. In addition, hundreds of other images and videos of child pornography were also discovered on Choi’s computers.
Choi is charged with production of child pornography, and faces a mandatory minimum of 15 years and maximum of 30 years in prison, if convicted. He is also charged with possession of child pornography, and faces a maximum of 10 years in prison, if convicted.
Criminal complaints are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
The investigation was conducted by the Manassas City Police Department and the Northern Virginia/DC Internet Crimes against Children Task Force. Special Assistant United States Attorney Alicia J. Yass, a Trial Attorney with the Child Exploitation and Obscenity Section of the Justice Department’s Criminal Division, is prosecuting the case on behalf of the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.usdoj.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on http://pacer.uspci.uscourts.gov.
# # #Seth Patrick Durnam Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on April 25, 2013, before U.S. Magistrate Judge Jeremiah C. Lynch, SETH PATRICK DURNAM, a resident of Bozeman, pled guilty to possession of child pornography. Sentencing has been set for July 25, 2013. He is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Tara J. Elliott, the government stated it would have proved at trial the following:
On November 8, 2010, DURNAM was at a residence in Bozeman for a job interview.
On Saturday, November 13, 2010, the homeowner found a 2GB SD card in his driveway. The homeowner called his father who had visited earlier in the day to inquire if the card was his. His father replied that it was not and suggested that he view the images on the card to identify the owner. He did so and found hundreds of images of child pornography, that he described as "naked, under-age boys." When scrolling through the images, the homeowner found a picture of DURNAM, whom he recognized from the earlier job interview. The homeowner contacted law enforcement and turned over the card.
When interviewed by a detective the next day, DURNAM admitted that he "did like images of younger boys" but claimed it was earlier in his life. When the SD card was examined, approximately 300 sexually explicit images and 5 movies of nude prepubescent and early teen boys were found on the card. The images had been copied to the SD card on April 21, 2010, by means of another device. There were also several pictures of DURNAM on the card.
DURNAM possessed images and movies of children clearly prepubescent and children engaged in sadistic or masochistic abuse or other depictions of violence.
DURNAM faces possible penalties of 10 years in prison, a $250,000 fine and lifetime supervision.
The investigation was conducted by the Gallatin County Sheriff's Office.
San Francisco Man Sentenced to 151 Months for LSD and Ecstasy Trafficking OffensesRead the Press Release
SAN FRANCISCO - Defendant Oshan Cook was sentenced yesterday to 151 months in prison for conspiracy to distribute MDMA (“ecstasy”), possession with the intent to distribute ecstasy, and possession with the intent to distribute LSD, United States Attorney Melinda Haag announced.
On November 1, 2012, a federal jury found that Cook participated in a conspiracy to distribute ecstasy, and that he possessed with the intent to distribute ecstasy and more than 10 grams of LSD. The jury returned guilty verdicts on one count of distribution of more than 10 grams of LSD in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A)(v), and two counts of ecstasy trafficking in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(C). The guilty verdicts followed a 4-day jury trial before U.S. District Court Judge Jeffrey S. White.
Evidence at trial showed that Cook, 35, of San Francisco, participated in a conspiracy to distribute 1,383 grams of ecstasy that was delivered to an undercover DEA agent in a buy-bust operation, and that Mr. Cook was arrested on the day of the buy-bust operation, wearing a backpack containing 630 grams of ecstasy and 39.3 grams of liquid LSD.
Cook was charged by a federal grand jury, along with three co-defendants, in a Superseding Indictment on August 26, 2010. He was the last of the 4 defendants to be sentenced in this case. Defendant Yuri Lambert previously pled guilty to an ecstasy trafficking offense, and defendant James Edmonds pled guilty to an LSD trafficking offense. Both Lambert and Edmonds are currently serving 63 month sentences. Defendant Victoria Vanlaanen also pled guilty to an ecstasy trafficking offense, and is currently serving an 18 month sentence.
After the jury returned its verdict on November 1, 2012, Cook was remanded into the custody of the United States Marshals, and he remains in custody to serve his sentence.
The sentence was handed down by U.S. District Court Judge Jeffrey S. White. Judge White also sentenced the defendant to a five year period of supervised release.
Chinhayi Cadet and Pete Axelrod are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Ana Guerra. The prosecution is the result of a 2-year investigation by the Drug Enforcement Administration.
Red Lake Man Indicted for Running Another Vehicle Off the RoadRead the Press Release
MINNEAPOLIS—A federal indictment unsealed yesterday charges a 30-year-old Red Lake man for running a vehicle driven by a woman off the road while on the Red Lake Indian Reservation. The indictment, which was filed on April 22, 2013, charges Tony Lee Lussier with one count of assault with a dangerous weapon. The indictment was unsealed following Lussier’s initial appearance in federal court.
The indictment alleges that on May 12, 2012, Lussier assaulted the woman with intent to do bodily harm, with a motor vehicle. The woman was driving a Pontiac Bonneville, which was allegedly forced off the road by Lussier who was driving a gray van.
If convicted, Lussier faces a potential maximum penalty of ten years in prison. All sentences will be determined by a federal district court judge. This case is the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Laura M. Provinzino.Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.
An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
Press ReleaseRead the Press Release
RICHMOND MAN CONVICTED OF DISCHARGING FIREARM DURING DRUG
TRANSACTION AT SPOTSYLVANIA TOWN CENTER MALLRICHMOND, Va. – Travis Doug Burley, 26, of Richmond, Virginia, was found guilty yesterday of using and possessing a firearm during and in relation to a drug trafficking offense. The jury also unanimously found that the firearm had been discharged during the offense. Following the jury’s verdict, Judge Gibney immediately remanded Burley into the custody of the United States Marshals Service. He faces a 10-year mandatory minimum sentence, and a maximum possible sentence of life imprisonment, when he is sentenced on July 23, 2013.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Carl Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Washington Field office, made the announcement.
According to evidence at trial, on July 11, 2012, Burley contacted a Spotsylvania-area man, Matthew Johnson, to purchase four ounces of high grade marijuana. Burley, who was previously unknown to Johnson, used a mutual friend named Ronnie Morgan, Jr., to broker the deal. Morgan and Johnson negotiated the transaction through a text message conversation, and eventually agreed to meet that evening in the Spotsylvania Town Center Mall, near the Costco store. When Johnson arrived at the Mall, he parked near a car he saw containing his friend Morgan, the defendant Burley, and a third unidentified man.
Immediately after Johnson parked his car, Burley got into the passenger seat, brandished a handgun and told Johnson, “You know what this is about” and demanded that Johnson give him the drugs. Johnson, who did not know Burley, denied having anything, which prompted Burley to hit Johnson repeatedly with one fist while holding a .40 caliber Smith & Wesson semiautomatic pistol in the other. Johnson grabbed the handgun, which discharged while the men struggled over it. A single bullet injured both Burley in the hand and Johnson in the hand and left calf.
Johnson drove a short distance from the scene and attempted to hide the marijuana, and further lied to investigators during his initial 911 call. However, when later confronted by investigators with various items of evidence, including text messages from his cell phone, he agreed to cooperate. Johnson, who still has pending drug distribution charges in Spotsylvania County, acknowledged his guilt during his testimony, without the benefit of any immunity or plea agreement from local prosecutors.
During the struggle in Johnson’s car, Ronnie Morgan, Jr, stood outside of Johnson’s car looking in. After Burley’s handgun went off during the fight, both Morgan and the third, unidentified man fled the scene prior to police arriving. Morgan, who was a long-time associate of Burley, was subpoenaed to testify before a federal grand jury, during which he lied that he knew who Burley was when shown photographs of his friend. Morgan later pleaded guilty to perjury as a result of those false statements, and is scheduled for sentencing on May 14, 2013, before Judge Gibney. Morgan was not called as a witness during the trial.
The investigation was conducted by the Richmond Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Spotsylvania County Sheriff’s Office. Mr. MacBride and Special Agent Vasilko wish to acknowledge the significant assistance provided by the offices of Spotsylvania County Commonwealth’s Attorney, William F. Neely, and Spotsylvania County Sheriff, Roger L. Harris, during the federal phase of this investigation. Assistant United States Attorney Brian R. Hood prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
# # #Owner of Buy-A-Home Real Estate Brokerage Sentenced in Manhattan Federal Court to 70 Months in Prison for Participating in Multi-Million Dollar Mortgage Fraud Scheme and Committing PerjuryRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MITCHELL COHEN, the owner of the now defunct Buy-A-Home real estate brokerage business, was sentenced today in Manhattan federal court to 70 months in prison for participating in a multi-million dollar mortgage fraud scheme and for committing perjury. COHEN was indicted in July 2012 and pled guilty in December 2012 to one count of conspiracy to commit mail, wire and bank fraud and one count of perjury in connection with statements he made in a civil lawsuit filed against him by this Office. COHEN was sentenced today before U.S. District Judge Denise L. Cote.
Mr. Bharara also announced that the Office reached a settlement of its lawsuit against COHEN in which he admitted to conspiring with others to secure federally-insured mortgage loans through fraud. Under that settlement, a $2.7 million judgment will be entered against COHEN, and he will be permanently barred from participating in real estate sales involving federally-insured mortgages and from any advertising, marketing, or solicitation of business involving such sales. The settlement was approved by U.S. District Judge Lorna G. Schofield.
Manhattan U.S. Attorney Preet Bharara stated: “The egregious conduct for which Mitchell Cohen was sentenced today helped contribute to the home mortgage crisis and to FHA’s dire financial straits, and it also caused many home buyers to lose homes they could ill afford in foreclosure proceedings. He will now answer for his crimes with jail time and multi-million dollar criminal and civil penalties. This case is a prime example of how our Office uses every legal tool in our toolbox – both criminal and civil – to punish those who engage in mortgage fraud.”
According to the Indictment and statements made during court proceedings:
COHEN’s Mortgage Fraud Scheme
From 2007 through 2010, the U.S. Department of Housing and Urban Development’s Federal Housing Administration (“HUD-FHA”) provided mortgage insurance to borrowers seeking residential mortgages. Unlike conventional loans, FHA-insured loans required little cash investment from borrowers and were more flexible in income and payment ratio requirements. To qualify for FHA mortgage insurance, a potential borrower had to meet HUD requirements regarding his or her creditworthiness and ability to make mortgage payments. No undisclosed payments could be made or promised in connection with a residential mortgage transaction. At all relevant times, certain private lenders were authorized to make commitments for the provision of FHA mortgage insurance on behalf of HUD. They did so through the execution and ultimate submission to HUD of various mortgage documents, forms, and supporting documentation. Because FHA-backed mortgages were valuable commodities, lenders typically sold them to banks that pooled them and then resold them to institutional investors.
From April 2007 through October 2010, COHEN operated a real estate brokerage business in Queens, New York known, at various times, as Buy-a-Home, LLC and First Home Brokerage, LLC (“Buy-a-Home”). Buy-a-Home employed several sales managers, as well as a number of sales agents who recruited clients to purchase homes who were usually first-time home buyers. COHEN and Buy-a-Home employees facilitated the sales of the homes by preparing documentation to secure FHA-insured loans to fund the borrowers’ purchases.
During that time period, COHEN engaged in a widespread conspiracy to defraud HUD into issuing FHA mortgage insurance and to defraud banks into purchasing the FHA-backed mortgages issued to Buy-a-Home’s clients in order to earn substantial profits. Through entities he controlled, COHEN bought, or promised sellers he would buy, homes at one price, and then he and others at Buy-a-Home recruited unsophisticated buyers of modest means and induced them into purchasing the same homes at inflated prices, which were typically $100,000 higher than the original sale price. To insure that the deals for these properties would go through, COHEN and others schemed to make the Buy-a-Home clients – who did not and could not qualify to receive FHA mortgage insurance – seem more creditworthy. In furtherance of this scheme:
- COHEN directed Buy-a-Home employees to pay off borrowers’ debts, often with cash funneled through bank accounts of borrowers’ relatives, in order to make the borrowers appear more creditworthy and to make it seem that their debts had been paid by an appropriate source;
- COHEN directed Buy-a-Home employees to provide cash to borrowers so that they could obtain certified checks falsely showing that they had sufficient funds to close;
- COHEN directed borrowers’ relatives to sign false gift affidavits to make it seem that the borrowers’ debts had lawfully been paid off, or the borrowers’ funds for closing had been appropriately provided by relatives, when in fact they had unlawfully paid off the debts themselves or through Buy-a-Home; and
- COHEN advised borrowers to make other false statements on loan applications submitted to HUD.
In so doing, COHEN concealed the borrowers’ true financial condition from HUD and the banks that subsequently bought the FHA-backed mortgages, all in an effort to insure that they and Buy-a-Home could profit from the deals. COHEN also made mortgage payments on behalf of certain borrowers to further conceal their financial condition and to prevent banks from enforcing their right to sell loans back to the lenders that first provided the borrowers with mortgages.
Through this scheme, COHEN defrauded HUD into issuing, and banks into purchasing, millions of dollars in fraudulent loans. Furthermore, because the FHA insurance was based on false statements made to HUD, and the borrowers could not really afford their mortgages, many of the homes went into foreclosure proceedings, forcing HUD to pay out $1,574,259.43 million in insurance payments.
COHEN’S Perjury in the Civil Mortgage Fraud Action Against Him
In December 2010, the U.S. Attorney’s Office for the Southern District of New York filed a civil complaint against COHEN, the mortgage lender, and the appraisers who helped him orchestrate the fraud at Buy-a-Home. On December 29, 2010, the District Judge presiding over the civil action entered a preliminary injunction barring COHEN from participating in real estate sales involving HUD-insured mortgages and any advertising, marketing, or solicitation of business involving such mortgages.
Subsequently, in October 2011, the Government moved for a finding of civil contempt against COHEN, alleging that he willfully violated the preliminary injunction by re-establishing Buy-a-Home under a new name – Y-Rent New York, LLC (“Y Rent”) – which was nominally owned by COHEN’s wife and another individual, but was in fact operated by COHEN. In connection with his opposition to the contempt motion, COHEN filed a declaration in November 2011 in which he falsely stated, under penalty of perjury, that he was not involved with Y Rent, did not train Y Rent’s salespeople, did not take certain types of business calls, and did not speak to prospective borrowers. In December 2011, COHEN was held in contempt for having willfully violated the injunction against him in the civil action
In addition to the prison term, Judge Cote sentenced COHEN, 55, of Old Westbury, New York, to three years of supervised release. COHEN was also ordered to forfeit $7,515,966, and to pay $1,574,259.43 in restitution to HUD-FHA. He will surrender on June 28, 2013, at 2:00 p.m. The civil judgment against COHEN consists of $2.2 million in damages and $500,000 in penalties. COHEN’s civil settlement is the fifth and final settlement in the civil action. In four prior settlements entered in 2011 and 2012, the Government recovered $1.55 million in damages and penalties from the lender and the appraisers. The lender, the lender’s principals and key employees, and the appraisers all agreed to be barred from all HUD programs either permanently or for a term of up to 10 years.
Mr. Bharara praised HUD-OIG and FHFA-OIG for their outstanding work in the investigation.
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 matter is being handled by the Office’s Complex Frauds Unit and the Civil Frauds Unit. Assistant U.S. Attorneys Janis Echenberg and Nicole Friedlander are in charge of the criminal case, and Assistant U.S. Attorneys Li Yu and Cristine Phillips are in charge of the civil case.
U.S. v. Mitchell Cohen Consent Order