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Thursday 7 February 2013
Mexican Drug Traffickers Sentenced on Drug Conspiracy Charges; Conspiracy Manager Forfeits $750,000 in CashRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Genaro Torres, 58, formerly of Laredo, Texas, and Maria E. Garcia, 64, formerly of Houston, Texas, were sentenced for their roles in a cocaine conspiracy.
Torres, who was convicted of conspiracy to distribute, and possess with intent to distribute, five kilograms or more of cocaine, was sentenced to 10 years in prison by U.S. District Judge David G. Larimer. In addition, Torres forfeited $750,000 in United States currency, which he admitted constituted, or derived from, proceeds he obtained as a result of his illegal drug activity. Garcia, who was convicted of conspiracy to distribute, and possess with intent to distribute cocaine, was sentenced to four years in prison by Judge Larimer.
Assistant U.S. Attorney Frank H. Sherman, who handled the case, stated that the defendants were involved with a group of individuals that distributed over 150 kilograms of cocaine from Mexico in the United States between 1991 to 2008. During the course of the conspiracy, cocaine was transported to, and distributed in, Rochester by members of the conspiracy. Cocaine was also provided to Houston, Chicago, New York City, Atlanta and the New England region of the country.
Since the early 1990s, Genaro Torres was involved in transporting quantities of cocaine across the Mexican-South Texas border in the area of Laredo, Texas, and thereafter distributing the cocaine. Torres was found by the Court to have acted as a manager or supervisor in this extensive drug distribution activity and the Court further found that, between 2000 and 2008, Torres arranged at times for the distribution of multi-kilogram quantities of cocaine to individuals in or about Houston, Texas.
As for Maria Garcia, by early 2000, this defendant was selling cocaine in Houston, Texas, after being supplied by Genaro Torres. Between February 2000 and April 2000, Torres arranged the delivery of over 50 kilograms of cocaine in Houston, Texas, to Garcia or her customers. Torres and Garcia are Mexican citizens (and permanent resident aliens of the United States) and it is anticipated that both Torres and Garcia will be deported upon the completion of their sentences."It's often said that crime doesn't pay and in this case that is especially true," said U.S. Attorney Hochul. "The hard work of our law enforcement partners and prosecutors has led to the take down of a major drug conspiracy. But in addition, we have literally taken the profit out of this particular crime syndicate. The money being forfeited will now be put to a much more positive use including continued crime fighting efforts."
The sentencings are the result of an Organized Crime Drug Enforcement Task Force investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent in Charge Brian R. Crowell, New York Field Division, and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, assisted by the Rochester Police Department, under the direction of Chief James M. Sheppard, and the Internal Revenue Service - Criminal Investigation, under the direction of Special Agent in Charge Toni Weirauch.
Mexican Citizen Convicted of Smuggling Heroin in Her Luggage at IAHRead the Press Release
HOUSTON – A Mexican woman who was smuggling nearly two kilograms of heroin in her luggage as she arrived at George Bush-Intercontinental Airport (IAH) from Ecuador has entered a plea of guilty, United States Attorney Kenneth Magidson announced today.
Yessica Chanel Cabanillas-Torres, 21, of Sonora, Mexico, pleaded guilty to conspiracy to possess with the intent to distribute more than a kilogram of heroin just moments ago before United States District Judge Gray H. Miller.
At the hearing, Cabanillas-Torres admitted that on Oct. 4, 2012, she arrived at IAH as a passenger aboard a flight from Quito, Ecuador. Her ticket indicated she was continuing her travel through Houston to Newark, N.J. Upon her arrival at IAH, Customs and Border Protection (CBP) officers questioned Cabanillas-Torres about her reasons for visiting the United States and examined her and her luggage for potentially prohibited items or contraband.
During the examination, she presented herself and two hard-sided suitcases to CBP officers for examination. Officers removed the contents of the suitcases and noticed the suitcases seemed to be unusually heavy. Officers then x-rayed the two suitcases at which time anomalies were discovered along the inner frame of each bag. Based on these anomalies and the weight of the suitcases, officers drilled into the two suitcases and discovered a brown powdery substance within the walls of each suitcase which field tested positive for the presence of heroin. Officers then dismantled one of the suitcases and found several small bundles of heroin inside with a gross weight of approximately 1.2 kilograms. Officers then left the second suitcase intact and sent it to the CBP forensic laboratory to be disassembled in order to remove the suspected heroin inside. The second suitcase was also found to contain bundles of heroin and packaged in a similar fashion to the first suitcase. The total amount of heroin found was approximately 1.934 kilograms with a purity of approximately 82.7%
Cabanillas-Torres indicated she had been hired by an individual in Mexico to transport luggage from Quito to Newark in exchange for $4,000. She stated she did not know the identity of the person in Newark to whom she was supposed to deliver the luggage, but knew the luggage contained drugs and was intending to deliver these suitcases to another person in the U.S.
Judge Miller has set for sentencing for May 17, 2013, at 11:00 a.m., at which time she faces a minimum of 10 years and up to life imprisonment and a possible $10 million fine. She will remain in custody pending that hearing.
This case was investigated by Homeland Security Investigations and CBP. Assistant United States Attorney Arthur R. Jones is prosecuting the case.
Metroplex Agencies Reap Benefits of Major Marijuana Trafficking OrganizationRead the Press Release
Department of Justice
Office of Public AffairsGARLAND, Texas – The dismantling of a major marijuana trafficking organization has resulted in the distribution of significant assets to five Metroplex law enforcement agencies in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
In October 2010, law enforcement agencies became aware of a drug trafficking organization that was responsible for moving large amounts of marijuana and cash between the Dallas, Texas area and various points in Arizona. On Dec. 4, 2010, members of the drug trafficking organization were observed removing an air conditioning unit from a horse trailer to reveal a hidden compartment used to hide currency, marijuana and firearms. Law enforcement officers moved in and arrested members of the drug trafficking organization. They also recovered two rifles and a firearm on the front seat of a vehicle. Additional weapons were seized at the location along with $685,825.00 in cash. Agents then executed search warrants at other residences and a storage unit. At the storage unit, agents seized an additional $257,520.00, $206,400.00, and $309,880.00 for a total currency seizure of $1,722,446.00.
The Texas Department of Public Safety led the investigation with assistance from the Wylie Police Department, the Collin County Sheriff’s Office, the Dallas County Sheriff’s Office, and the Dallas County District Attorney’s Office. The Bureau of Alcohol, Tobacco, Firearms, and Explosives provided follow-up investigation after the arrest and seizure of evidence. In total, nine individuals were convicted of federal drug trafficking violations.
"This investigation is a great example of the successful partnership between local, state and federal law enforcement agencies in Texas," said DPS Deputy Director David Baker. "Thanks to the efforts by all involved, these criminals are now off our streets, and our communities are safer today."
The following agencies received equitable sharing checks as a result of this case:Texas Department of Public Safety $1,119,360.20 (65%)
Wylie Police Department $86,104.63 (5%)
Dallas County Sheriff’s Office $86,104.63 (5%)
Collin County Sheriff’s Office $68,883.70 (4%)
Dallas County District Attorney’s Office $17,220.93 (1%)The remaining 20% of the forfeiture money will be deposited into the Asset Forfeiture Fund.
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This case was prosecuted by Assistant U. S. Attorney Ernest Gonzalez.Maryland’s St. Joseph’s Medical Center Agrees to Pay $4.9 Million for Medically Unnecessary Hospital AdmissionsRead the Press Release
St. Joseph’s Medical Center, a hospital located in Towson, Md., has reached a settlement with the United States to pay $4.9 million in connection with its submission of false claims to Medicare, Medicaid and other federal healthcare programs, the Justice Department announced today.
This settlement resolves the hospital’s civil liability to the United States under the False Claims Act for the hospital’s disclosure that from 2007-2009 it engaged in a practice of admitting patients to the hospital unnecessarily. In particular, the hospital disclosed that it admitted patients for short stays – typically one or two days – that were not warranted by the patient’s medical condition, and thereby generated a larger reimbursement than was proper for each patient. Of the $4.9 million to be paid by St. Joseph’s, $4.6 million will go the United States, and $152,406 will go to the state of Maryland, which is also a party to the agreement.
“The improper admission of patients for the purpose of obtaining increased reimbursement is a significant drain on the resources of federal and state healthcare programs,” said Stuart F. Delery, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Division. “This recovery reflects the Department’s continuing efforts to safeguard federal funds.”
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 $10.2 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 billion.
Mr. Delery thanked the Department of Health and Human Services, Office of the Inspector General; the U.S. Attorney’s Office for the District of Maryland; and the Justice Department’s Commercial Litigation Branch, for their resolution of this matter.
Manhattan U.S. Attorney Files and Simultaneously Settles Lawsuit Against St. Luke’s-Roosevelt Hospital Center for Fraudulently Billing Medicare and MedicaidRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has filed and simultaneously settled a health care fraud lawsuit under the False Claims Act against the ST. LUKE’S-ROOSEVELT HOSPITAL CENTER (the “Hospital”), CONTINUUM HEALTH PARTNERS, INC., and SLR PSYCHIATRIC ASSOCIATES (“SLR”) (collectively, “ST. LUKE’S”) for improperly billing Medicare and Medicaid for out-patient services provided at its mental health clinics. As part of the settlement, ST. LUKE’S agreed to pay $2,325,000 to settle the Government’s claims for damages and penalties under the False Claims Act, with $1,258,115.17 of that amount to be paid to the United States and the balance to the State of New York for its share of the Medicaid overpayment. The settlement was approved yesterday by United States Circuit Court Judge Denny Chin, sitting by designation.
Manhattan U.S. Attorney Preet Bharara stated: “As they admitted today, St. Luke’s engaged in billing shenanigans that siphoned millions of taxpayer dollars out of government health care programs intended to benefit elderly and low-income individuals. Medicare and Medicaid fraud divert precious and dwindling resources from those who truly need help, and this Office will keep protecting those resources.”
According to the Complaint and Settlement filed in this case:
ST. LUKE’S double-billed the United States for psychiatric services provided by the Hospitals’ physicians at SLR, one of its out-patient mental health clinics, in two ways: (1) the Hospital sought and received reimbursement pursuant to Medicare for non-reimbursable costs relating to outpatient psychiatric visits conducted by SLR during the period 1999 to 2002; and (2) the Hospital billed out-patient psychiatric services to Medicaid as a rate-based service, which included the care provided by the physician and all other related costs. At the same time, SLR billed the Government on a fee-for-service basis for the same care provided by the physician. As a result, ST. LUKE’S received Medicare and Medicaid payments that it was not entitled to receive.
As part of the settlement, ST. LUKE’S has admitted, acknowledged, and accepted responsibility for the following conduct:
- During the period 1999 to 2002, the Hospital sought and received reimbursement pursuant to Medicare for non-reimbursable costs relating to outpatient psychiatric visits conducted by SLR.
- During the period from on or about February 1998 through 2002, the Hospital and SLR overbilled the United States and New York State in connection with claims for reimbursement under Medicaid relating to outpatient psychiatric visits conducted by SLR; specifically, SLR submitted claims and received reimbursement under Medicaid for costs that were already included in, and reimbursed to the Hospital pursuant to, separate claims submitted by the Hospital.
- From 2003 through 2010, the Hospital submitted claims and received reimbursement under Medicaid relating to services furnished by physicians in the Hospital’s outpatient mental health clinic. Department of Social Services regulations provide that “[t]he costs of routine physicians' services are included in facilities' rate or fee and shall not be billed separately.” The Hospital billed for such physician services separately, although the Hospital had removed the physician costs from its institutional cost report.
Pursuant to the settlement, ST. LUKE’S will pay $1,258,115.17 to the United States and $1,066,884.83 to the State of New York in damages and civil penalties within ten days of the settlement.
Mr. Bharara thanked the Office of the Inspector General for the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services for their assistance with the case. He also thanked the Medicaid Fraud Control Unit of the Office of the New York State Attorney General.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Joseph A. Pantoja is in charge of the case.
US v. St. Luke's Roosevelt Complaint
US v. St. Luke's Hospital Order of Settlement and Dismissal
US v. St Luke's Hospital Order of Settlement and ReleaseManhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Arrests of Three Defendants in $2.5 Million Ponzi SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), announced the filing of a three-count criminal Complaint charging CHARLES HUGGINS, CHRISTOPHER BUTCHKO, and ANNE THOMAS for allegedly perpetrating a $2.5 million Ponzi scheme involving investments in gold and diamonds purportedly mined in West Africa for sale in the United States. HUGGINS and THOMAS were arrested this morning in Edgewater, New Jersey, and Cliffside Park, New Jersey, respectively. BUTCHKO was arrested this morning in Murrieta, California. HUGGINS and THOMAS are expected to be presented in Manhattan federal court before Magistrate Judge Debra Freeman later today, and BUTCHKO is expected to be presented in federal court in the Central District of California later today.
Manhattan U.S. Attorney Preet Bharara said: “The promise of riches mined in Africa was fool’s gold that these defendants allegedly dangled in front of investors in what was nothing more than a scam. For those Ponzi schemers who have yet to get the message, be aware that you will be exposed by law enforcement and punished accordingly.”
Assistant Director-in-Charge George Venizelos said: “As alleged, these defendants lied about their intentions regarding investors’ money, pocketing most of it for personal use. So long as there are people with money to invest, there will likely be investment swindlers eager to take their money under false pretenses. There will also be the FBI to arrest the swindlers.”
According to the Complaint filed in Manhattan federal court:
From 2008 through September 2011, HUGGINS, BUTCHKO, and THOMAS solicited $2.5 million from various investors through companies known as JYork Industries Inc. (“JYork”) and Urogo Inc. (“Urogo”). HUGGINS and
BUTCHKO and others repeatedly made false and misleading representations about how they would use the investors’ money to mine gold and diamonds from Sierra Leone and Liberia, and promised high rates of return, based on the profits they said would be generated by the sale of the gold and diamonds in the United States.
HUGGINS, BUTCHKO, and THOMAS misappropriated the majority of the money they raised and kept it for themselves or used it to repay other investors. For example, investor funds were diverted to Orpheus Inc., a record label owned by HUGGINS, and VASNC Pvt Ltd., a petroleum company owned by BUTCHKO, and used to pay monthly apartment rental payments, restaurant bills, personal credit card bills, and other expenses. THOMAS personally received more than $90,000 in cash and disbursed more than $830,000 in investor proceeds through wire transfers to the Bahamas and checks repeatedly issued in amounts less than $10,000 in an apparent attempt to avoid the reporting threshold. Contrary to the defendants’ representations, only a small portion of the money they raised was transferred to Africa.
When investors complained that they had not received the return on their investment that they were promised, HUGGINS, BUTCHKO, and THOMAS frequently converted or offered to convert their investment into restricted shares of Oraco Resources, a publicly traded company of which HUGGINS, BUTCHKO, and THOMAS were majority shareholders. The investigation has revealed that only one investor to date has been made whole. That investor received the principal of his investment only after he threatened to bring civil litigation.
HUGGINS, 66, of Edgewater, New Jersey, and BUTCHKO, 43, of Murrieta, California, are each charged in the Complaint with one count of conspiracy to commit wire fraud and one count of wire fraud. Those counts each carry a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss derived from the offense. THOMAS, 68, of Cliffside Park, New Jersey, is charged with one count of conspiracy to commit wire fraud and one count of money laundering. The money laundering count carries a maximum potential penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the money laundering transactions.
Mr. Bharara praised the investigative work of the FBI in this case. He added that the investigation is ongoing.
The case is being handled by the General Crimes Unit of the United States Attorney's Office. Assistant United States Attorney Edward A. Imperatore is in charge of the prosecution.
The charges contained in the Compliant are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Huggins, Butchko, Thomas Complaint
Manassas Woman Pleads Guilty to Purchasing More Than 31 Handguns in 15 DaysRead the Press Release
ALEXANDRIA, Va. – Kimberly Yvette Dinkins, 44, of Manassas, Va., pled guilty today to purchasing 31 handguns from three Virginia gun shows to resell for profit.
Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, and James Newman, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after the plea was accepted by United States District Judge Claude M. Hilton.
Dinkins pled guilty to dealing firearms without a license and faces a maximum penalty of five years in prison when she is sentenced on May 3, 2013.According to a statement of facts filed in court, Dinkins purchased 31 firearms – all handguns – on three consecutive weekends from Nov. 17 through Dec. 1, 2012. She purchased 13 handguns at a gun show in Chantilly, Va., nine at a gun show in Richmond, Va., and nine at a gun show in Hampton, Va. Dinkins was not a federally licensed dealer of firearms; however, Dinkins was unemployed and purchased the handguns with the intention of selling them for profit.
This investigation is being conducted by ATF’s Washington Field Division. Special Assistant United States Attorney L. Rush Atkinson and Virginia Assistant Attorney General and Special Assistant United States Attorney Marc J. Birnbaum 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.Man Who Interfered with Flight Crew on JetBlue Flight from New York to California SentencedRead the Press Release
DENVER – Marcus Covington, age 33, of New York City, New York, was sentenced today by Senior U.S. District Court Judge Wiley Y. Daniel to serve 172 days (time served) for Interference with a Flight crew, U.S. Attorney John Walsh and FBI Denver Special Agent in Charge James Yacone announced. Following his prison sentence, Covington was ordered to spend 2 years on supervised release. While on supervised release the judge ordered that he not have any alcohol. The defendant was also ordered to pay JetBlue, the victim, $4,170 in restitution for costs incurred in the unexpected landing in Denver.
Covington was first charged by Complaint on August 20, 2012. He was then indicted by a federal grand jury on August 22, 2012. He pled guilty on November 28, 2012, and was sentenced on February 7, 2013.
According to court documents, on August 19, 2012, Covington intimidated a flight crew member and a flight attendant on JetBlue Flight 677, an Airbus A-320, carrying approximately 150 passengers, which was flying from John F. Kennedy International Airport in New York to Los Angeles International Airport. Covington also groped a 27 year-old pregnant female.
As a result of his assaultive and intimidating behavior, an FBI special agent, who was traveling on the flight as a passenger, was asked by flight crew to assist in dealing with Covington. Following consultation with the FBI agent and the Captain of JetBlue Flight 677, the Captain decided to divert the flight to Denver International Airport. The FBI agent and another passenger sat next to Covington to keep him under control while the plane made this unscheduled landing. While seated, the agent noticed Covington taking a number of unidentifiable pills.
Upon the aircraft’s arrival at the gate, Covington was escorted off the plane in handcuffs. While Denver Police Department officers were attempting to get Covington to sit in a chair, he kicked at, and spit on them while threatening to kill them.
This case was investigated by the Denver Police Department and the Federal Bureau of Investigation.
Covington was prosecuted by James Allison, Chief of the Criminal Division of the U.S. Attorney’s Office in Colorado.
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MCC Guard Indicted for Allegedly Taking Bribes to Violate Prison Rules Regarding Inmate Possession of ContrabandRead the Press Release
CHICAGO — A correctional guard at the federal Metropolitan Correctional Center in Chicago was indicted on bribery charges for allegedly violating Federal Bureau of Prisons rules regarding inmate possession of contraband. The defendant, TONY HENDERSON, was charged with five counts of bribery in an indictment returned by a federal grand jury. The charges are not related to the Dec. 18, 2012, escape of two inmates, both of whom were later captured, from the federal facility in downtown Chicago.
Henderson, 51, of Portage, Ind., an MCC correctional guard since 1996, was placed on administrative leave last September. No date has been set yet for his arraignment in U.S. District Court.
The charges, returned yesterday, were announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and John F. Oleskowicz, Special Agent-in-Charge of the Chicago Field Office of the U.S. Department of Justice Office of the Inspector General.
According to the indictment, on five different dates in July and August 2012 – July 12 and 28 and Aug. 4, 18 and 31 – Henderson accepted a bribe to violate BOP rules and regulations regarding inmate possession of contraband.
The Metropolitan Correctional Center, or MCC Chicago, located at 71 West Van Buren St., is an administrative detention facility operated by the Federal Bureau of Prisons.
The government is being represented by Assistant U.S. Attorney Christopher Parente.
Each count of bribery carries a maximum penalty of 15 years in prison and a $250,000 fine, or a fine of up to three times the value of the bribe. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Luzerne County Man Sentenced to Prison for Federal Heroin Trafficking ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Luzerne County man was sentenced today by Senior United States District Judge Richard P. Conaboy to serve 84 months in prison on the charge of conspiracy to distribute heroin.
According to United States Attorney Peter J. Smith, Alik Jerome Harrington, age 35, of Kingston, previously admitted to participating in a conspiracy to distribute heroin in the Luzerne County area. On April 14, 2011, after making a traffic stop, members of the Kingston Police Department seized over 200 bags of heroin from Harrington’s vehicle. Investigators then obtained a search warrant and obtained an additional quantity of heroin from a residence on Divison Street in Kingston where Harrington was residing.
In addition to the prison term, Senior Judge Conaboy also ordered that Harrington be supervised by a probation officer for three years following his prison sentence.
The investigation was conducted by the Kingston Police Department and the Federal Bureau of Investigation.
The case was prosecuted by Assistant United States Attorney Robert J. O’Hara.
Lumberton Woman Sentenced for Health Care FraudRead the Press Release
New Bern - United States Attorney Thomas G. Walker announced that in federal court on January 31, 2013, United States District Judge Louise W. Flanagan sentenced ANDETRA MICHELLE SAMPSON, 39, to 60 months imprisonment followed by 3 years supervised release, for her involvement in a health care fraud scheme that defrauded Medicaid of at least $2,187,951.65 for false billings for behavioral health services for children that were not provided. Sampson was ordered to pay full restitution to Medicaid in the amount of the fraud.
On July 11, 2012, SAMPSON pled guilty to one count of conspiring to commit health care fraud. According to court documents and proceedings, SAMPSON and others engaged in a scheme to defraud Medicaid, a health care benefit program, by submitting fraudulent claims for Day Treatment Services for preschool and school-aged children. Day Treatment Services are a covered Medicaid service designed to address a child’s medically necessary mental health and behavioral needs as evidenced by the presence of a mental diagnosis. This service required the authorization of a mental health professional such as a psychiatrist, in the form of a signed service order. SAMPSON was the principal owner and manager for Country Layne Day Treatment, LLC. located in Pembroke, North Carolina. In April 2006, SAMPSON applied for and received a Medicaid provider number and orchestrated an elaborate system for submitting fraudulent billings to Medicaid by billing for services that were not provided or were provided by unqualified individuals, falsifying service notes to hide these false billings, and creating false service orders with forged doctors’ signatures. This activity continued through 2010.
In November of 2010, the United States Health and Human Services Office of the Inspector General (HHS-OIG), the Medicaid Investigations Division (MID) of the North Carolina Attorney General’s Office, the North Carolina State Bureau of Investigation and the United States Secret Service seized in excess of $300,000.00 in property belonging to SAMPSON; the property was purchased using Medicaid money. All of this property has now been forfeited to the United States and included a fleet of recreational vehicles, personal vehicles, and rare motorcycles. The seizure included two custom motorcycles, a 2008 Queen Cobra and a 2008 Bourget Cobra, valued at $89,500.00 and $69,000.00 respectively.
North Carolina Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigation Division (MID), Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region, and Russell F. Nelson, Special Agent in Charge, United States Secret Service, Charlotte Field Office join the U.S. Attorney’s Office in making today’s announcement.
Investigation of this case was conducted by The United States Department of Health and Human Services, Office of the Inspector General, the Medicaid Investigations Division of the North Carolina Attorney General’s Office, the United States Secret Service, the North Carolina State Bureau of Investigation and the North Carolina Division of Medical Assistance Program Integrity Section. Assistant United States Attorney Thomas Murphy and Special Assistant U.S. Attorney Erica Bing of the Medicaid Investigations Division of the North Carolina Attorney General’s Office prosecuted this case. Assistant United States Attorney Steve West handled the forfeiture of these assets.
Louisville Return Preparer Sentenced to 27 Months in Prison for Preparing False Income Tax ReturnsRead the Press Release
– Returns claimed over $430,000 in false deductions and expenses
LOUISVILLE, KY – A Louisville tax preparer was sentenced in U.S. District Court by Judge John G. Heyburn, II to 27 months in prison and ordered to pay a $1,500 special penalty assessment, for aiding and assisting in the preparation of false income tax returns that claimed over $430,000 in false deductions and expenses announced David J. Hale, United States Attorney for the Western District of Kentucky.
Stacey Elzy, 38, pleaded guilty to all 15 counts of a federal grand jury indictment on September 10, 2012 and was sentenced on January 25, 2013. Elzy admitted in court that beginning in April 2006 and continuing through April 2008, she prepared individual income and partnership tax returns for other individuals that misrepresented and under-reported taxes owed by these taxpayers. Elzy assured her clients that the false itemized deductions and false business losses and the resulting inflated refunds were legitimate. The clients received large refunds and recommended Elzy to others, thus generating additional business. In total, the false items claimed by Elzy on the returns caused a loss of $207,243.00 to the IRS. The returns were filed with the Internal Revenue Service (IRS).
This case was prosecuted by Assistant United States Attorney Terry M. Cushing and was investigated by the IRS Criminal Investigation Division.
London Couple Convicted on All Counts of Child Pornography OffensesRead the Press Release
LONDON, KY - A federal jury found a London, KY., couple guilty of photographing two children engaging in sexually explicit conduct.
The jury convicted 58-year-old Ricky L. Sherman and his wife, 33-year-old Corrine Sherman late Wednesday afternoon of two counts of producing child pornography, conspiracy to produce child pornography, and one count of possessing child pornography. The jury returned the verdict after approximately four hours of deliberation following three days of trial.
Evidence presented at trial showed that, in 2008, the Shermans produced approximately 40 images of two prepubescent children engaged in sexually explicit conduct.
At the time Ricky Sherman was arrested for the federal offenses he was on probation for a previous state offense. The investigation started when state authorities received a tip that Ricky Sherman violated terms of his probation by having access to a computer. The evidence revealed that Ricky Sherman contacted his wife as the investigation was underway, and she subsequently attempted to conceal a camera from law enforcement. The camera was recovered and found to contain the produced child pornography images.
Ricky Sherman owned Truck Town Repair in Laurel County. He and his wife were indicted in September 2011.
Kerry B. Harvey, U.S Attorney for Eastern District Kentucky, Perrye Turner, Special Agent in Charge, FBI and Stewart Walker, Chief of the London Police Department jointly announced the convictions.
The investigation was conducted by the FBI and the London Police Department. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Jason Parman.
The Shermans will appear for sentencing on June 4, 2013. They face a minimum of 15 years in prison and a maximum of life. The couple will have to serve a minimum of 85 percent of the prison sentences imposed. The court will impose a sentence after reviewing the U.S. Sentencing Guidelines and the federal statutes.
Lebanon Woman Sentenced to 27 Months for $848,000 Wire FraudRead the Press Release
EUGENE, Ore. – Today, Chief U.S. District Judge Ann Aiken sentenced Rhonda Milligan, 42, of Lebanon, Oregon, to 27 months in federal prison for embezzling from her former employer, Entek Manufacturing, Inc., a company in Lebanon, Oregon. Milligan pled guilty to a single count of wire fraud on May 18, 2012. She was also sentenced to three years supervised release and must pay restitution in the amount of $848,156.
“This defendant abused her position of trust in her company by stealing hundreds of thousands of dollars to line her own pockets,” commented U.S. Attorney Amanda Marshall. “This sort of egregious fraud within the corporate setting will not be tolerated.”
According to the charges, court documents and other information presented in court, Milligan worked as an assistant to Entek’s president and on Entek’s management team for many years. As part of her responsibilities, Milligan had access to various financial accounts and paid personal bills for Entek’s president and owner. Milligan used her access to these accounts to embezzle money. She made more than $540,000 in unauthorized payments through an online electronic payment system to pay her personal credit card expenses and diverted another $293,000 by forging the name of Entek’s president on checks. Additionally, she skimmed from the company’s petty cash, and, in some cases, Milligan just cut checks for cash directly to herself. At sentencing, the court found that Milligan embezzled more than $848,000 between 2005 and 2011.
This case was investigated by the FBI and was prosecuted by Assistant U.S. Attorney Scott E. Bradford.
KC Man Sentenced to 10 Years for Child PornRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for attempting to receive child pornography over the Internet.
Russell S. Nicholson, 36, of Kansas City, was sentenced by U.S. Chief District Judge Fernando J. Gaitan to 10 years in federal prison without parole.
Nicholson pleaded guilty on Aug. 3, 2012. He was arrested after an officer with the Independence, Mo., Police Department, who was investigating child pornography offenses in an undercover capacity in conjunction with an officer with the Salem, Ore., Police Department, identified his computer as sharing files that contained child pornography.
Nicholson was using a peer-to-peer file-sharing program to share nine videos of child pornography with other users via the Internet. The videos depicted minors engaged in sexual intercourse and other sexual activity with adults and with other minors. The child victims in these videos were as young as three years old. Some of the videos depicted prepubescent children being subjected to penetration or attempted penetration by adult males, or being subjected to other sadistic or violent sexual activity.
Officers executed a search warrant at Nicholson’s apartment and seized three computers, which were found to contain evidence of child pornography. Nicholson admitted that he threw into a dumpster the laptop he had with him at the time he heard about the search warrant. He said he did this because he knew there was child pornography on the computer.
Nicholson admitted that he had been downloading child pornography over the Internet for approximately 10 years.
This case was prosecuted by Assistant U.S. Attorney Katharine Fincham. It was investigated by the FBI Cybercrime Task Force, the Independence, Mo., Police Department and the Salem, Ore., Police Department.
Project Safe Childhood
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.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Justice Department Seeks to Shut Down Miami Tax-Preparation OfficeRead the Press Release
The United States has asked a federal court to shut down a tax-preparation office in Miami, the Justice Department announced today. The civil injunction suit, filed in U.S. District Court for the Southern District of Florida, alleges that Olivia Greene and Walter Jefferson of Miami prepare returns through Angel Tax Service with falsely-claimed credits, including fuel tax credits, the earned-income tax credit, the work pay credit and educational credits.
According to the complaint, in order to conceal her role in this scheme, Greene prepared returns using an alias, Olivia Mayo. The complaint alleges that after the Internal Revenue Service (IRS) rejected Greene’s application for a preparer ID number, she hired other persons to obtain ID numbers in their names for Greene to use.
The IRS lists return-preparer fraud and false fuel tax credits as two of its “Dirty Dozen” tax scams .
In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website .
Related Materials:
United States v. Olivia Greene, etc., et al.
Complaint and Request for Injunctive Relief (PDF)Jury Convicts Pharr Man in Marijuana Smuggling ConspiracyRead the Press Release
McALLEN, Texas – A federal jury in McAllen has convicted Erick Ochoa-Rodriguez, 19, of Pharr, on two counts of conspiring to possess and actually possessing marijuana with the intent to distribute the controlled substance to another, United States Attorney Kenneth Magidson announced today. The verdicts were returned earlier today after nearly three days of trial.
Ochoa-Rodriguez was charged in an indictment returned on Nov. 13, 2012. During the trial, the government presented photos, maps and witness testimony illustrating his attempt to receive 175 kilograms of marijuana from unknown individuals carrying the drugs from the border.
On Oct. 29, 2012, Border Patrol agents encountered Ochoa-Rodriguez as he drove his vehicle to a planned rendezvous near a levee within two miles of the border with seven individuals who had carried marijuana bundles from the Rio Grande River. He immediately fled, first in his vehicle and then on foot into a densely forested area. Agents ultimately located him as he was lying in the fetal position within dense overgrowth through the use of a canine unit, trackers and aircraft.
The government also proved this was not the defendant’s first encounter with law enforcement. Additional evidence demonstrated that Ochoa-Rodriguez received 125 kilograms of marijuana from undercover federal agents on June 11, 2012, before successfully fleeing law enforcement on that occasion. The prosecution further introduced evidence obtained from his Facebook account wherein Ochoa-Rodriguez acknowledged coordinating the trafficking of large quantities of marijuana from Mexico into the United States. Further investigation revealed his growing ties with Mexican Drug Cartels and his involvement in cocaine trafficking, illegal possession of firearms, money laundering and other cartel-related crimes.
Ochoa-Rodriguez is scheduled to be sentenced on April 24, 2013, and faces up to 40 years imprisonment.
This case is being investigated by the Drug Enforcement Administration, Border Patrol and Homeland Security Investigations. Assistant United States Attorney Grady J. Leupold is prosecuting the case.
Jimmy Rollins Pleads Guilty to Producing Child PornographyRead the Press Release
CHATTANOOGA, Tenn. – Jimmy Rollins, 44, of Palmer, Tenn., pleaded guilty on Feb. 5, 2013, in the U.S. District Court for the Eastern District of Tennessee at Chattanooga, to producing child pornography. Sentencing has been set for May 6, 2013, in the U.S. District Court in Chattanooga.
Rollins faces a minimum term of 25 years up to 50 years in prison, a fine of up to $250,000 and supervised release from five years to life.
In February 2012, an undercover investigation by the Winchester Police Department identified Rollins as a person who used the internet to traffic in pornographic images of children. A search of his home in May 2012 revealed equipment used in the production of child pornography, and multiple photographic images and videos of Rollins engaged in sexual activity with a known minor. All the child pornographic scenes were set in a bedroom that can be recognized as Rollins’. Rollins had been previously convicted in 1994 of two counts of statutory rape in the Criminal Circuit Court of Grundy County, Tennessee.
U.S. Attorney William C. Killian stated, “We will aggressively prosecute those who are using interstate commerce to victimize children for profit and sexual gratification. Let the message be clear: If you engage in production of child pornography in the Eastern District of Tennessee, you will be caught and you will serve significant time in prison.”
On Nov. 27, 2012, a nine-count indictment, which included the aforementioned charge, was returned against Rollins by a federal grand jury sitting in Chattanooga, Tenn. This indictment was the result of an ongoing investigation by the Winchester Police Department, Tennessee Bureau of Investigation and Federal Bureau of Investigation. John P. MacCoon, Assistant U.S. Attorney represented the United States.
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.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Jesup Man Pleads Guilty to Sexually Exploiting Minor and Producing and Trafficking Child PornographyRead the Press Release
BRUNSWICK, GA: STEPHEN A. KEATING, 52, of Jesup, Georgia, pleaded guilty Tuesday before Chief United States District Court Judge Lisa Godbey Wood to three counts of Sexual Exploitation of a Minor in relation to his production of numerous images of child pornography, and one count of Distribution of Child Pornography.
Evidence presented at the guilty plea hearing showed that on numerous occasions in 2010 and 2011, KEATING sexually molested three minor children in order to create pictures and videos of that conduct. KEATING then distributed a number of the images, which were discovered in September 2012 during the arrest of a sex offender in Denmark. The charges against KEATING arose from an investigation led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from INTERPOL, the U.S. Customs and Border Protection (CBP) Office of Field Operations in Savannah, CBP Air and Marine Operations in Jacksonville, Fla., the Georgia Bureau of Investigation, and the Liberty County Sheriff’s Office.
United States Attorney Edward J. Tarver said, “No child should be subjected to sexual abuse and, certainly, no child should have to live with the knowledge that the abuse was captured on film for redistribution to other like-minded predators. This defendant exploited the most vulnerable members of our society, our children. Swift, aggressive prosecution of child predators is the highest priority for the Department of Justice and this United States Attorney’s Office.”
“To victimize the innocent in the manner that this child predator has pleaded guilty to is one of the most revolting crimes in our society," said Brock D. Nicholson, special agent in charge of ICE Homeland Security Investigations in Atlanta. “HSI special agents will not rest until each and every child victim of sexual exploitation is rescued and defendants like Keating are behind bars.”
Each count of Sexual Exploitation of a Minor to which KEATING pleaded guilty carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison. KEATING also faces a mandatory minimum sentence of 5 years in prison and a maximum sentence of 20 years in prison for Distribution of Child Pornography. If released from prison, KEATING will be required to register as a sex offender. The date for KEATING’s sentencing hearing has not yet been scheduled.
This case was brought as part of Project Safe Childhood, which is a nationwide U.S. Department of Justice initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. The case is being prosecuted by Assistant United States Attorney Jennifer G. Solari. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 341-7842.
Jason Owen Gierke Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on February 7, 2013, before Chief U.S. District Judge Richard F. Cebull, JASON OWEN GIERKE, a 51-year-old resident of Miles City, appeared for sentencing. He was sentenced to a term of:
Prison: 15 days (credit for time served)
Special Assessment: $100
Supervised Release: 3 years
He was sentenced in connection with his guilty plea to conspiring to maintaining drug involved premises.
In an Offer of Proof filed by Assistant U.S. Attorney Paulette L. Stewart, the government stated it would have proved at trial the following:
In approximately March of 2011, law enforcement received a complaint that Ross Pattison and Travis Birdinground were distributing marijuana to numerous people in Hardin and other places in Big Horn County. Through investigation and interviews, law enforcement determined that Pattison possessed a Montana medical marijuana card but was not listed as a caregiver because he is a convicted felon. Law enforcement also determined that Birdinground worked for Pattison delivering marijuana. Birdinground also possessed a medical marijuana card and was a caregiver for only one patient. Law enforcement observed Birdinground leave Pattison's residence numerous times a night and make trips to several residences within Hardin. Law enforcement also observed several individuals drive to Pattison's residence to purchase marijuana from Pattison.
On April 22, 2011, law enforcement executed search warrants for Pattison's Hardin residence and two pickup trucks. Law enforcement seized approximately five pounds of marijuana, approximately $124,000 in cash, digital scales, a paper grocery bag full of zip-lock bags, a methamphetamine pipe with residue, hashish, and photocopies of patient medical marijuana cards for marijuana caregivers GIERKE, Brandon Strecker, Birdinground and another individual.
On May 23, 2011, law enforcement executed a search warrant at Strecker's Hardin residence. Law enforcement seized a total of 420 marijuana plants - 112 marijuana plants in the attached garage, 239 marijuana plants in the bedroom, one plant in the living room, 68 in the greenhouse and shed. They also seized loose marijuana.
Several witnesses confirmed that Pattison would take and receive orders for marijuana and GIERKE, Birdinground, and another individual would deliver marijuana to the buyers. Several witnesses will testify that after Ross Pattison's house was searched, all deliveries were then made by Strecker or the others.
During an interview with law enforcement on April 22, 2011, Birdinground admitted his role in the conspiracy to distribute marijuana from Pattison's and Strecker's Hardin residences. The marijuana that he possessed on April 22, 2011, was marijuana that he was delivering for Pattison and Strecker. The marijuana was ordered through Pattison. Birdinground would pick up the marijuana from Pattison and give Pattison the money after the transaction. Pattison and Strecker paid Birdinground $800 every two weeks.
During an interview with law enforcement on May 25, 2011, GIERKE stated that he helped set up the greenhouses and watering system as part of the marijuana grow operation at Strecker's Hardin residence. GIERKE obtained his marijuana from Pattison and Strecker. GIERKE, Pattison, and Strecker were "business partners." Pattison put it all together and they grew the marijuana at Strecker's residence.
Chemists with the DEA laboratory in San Francisco tested the marijuana items submitted from the search of Strecker's residence. Some of the items were plant clippings as well as loose marijuana. The result of the analysis was that those items contained a detectable amount of marijuana, a Schedule I controlled substance.
Strecker, Pattison, and Birdinground pled guilty to federal charges and are awaiting sentencing.
The investigation was a cooperative effort between the Drug Enforcement Administration, the Montana Division of Criminal Investigation.
Investment Advisor to the Detroit Pension Funds Pleads Guilty to Conspiring with Former City Treasurer Jeffrey Beasley to Pay Him BribesRead the Press Release
Chauncey Mayfield, a former investment advisor to the two City of Detroit pension funds, pleaded guilty today to conspiring with former Detroit Treasurer Jeffrey Beasley to pay him bribes in exchange for new business from the pension funds, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Special Agent in Charge Robert Foley of the Federal Bureau of Investigation (“FBI”).
During a hearing this afternoon before United States District Judge Nancy Edmunds, Mayfield, 56, of Ft. Lauderdale, Florida, admitted that between 2006 and 2008 he had an agreement with the then City Treasurer Beasley to pay bribes to Beasley and others to influence Beasley’s decisions as a Trustee of Detroit’s Police and Fire Retirement System and General Retirement System.
Mayfield was the principal owner and Chief Executive Officer of MayfieldGentry Realty Advisors, L.L.C. (“MayfieldGentry”). MayfieldGentry was an investment advisor and fiduciary to the two Detroit pension funds overseeing a real estate investment portfolio worth more than $200 million of pension fund assets. According to Mayfield, Beasley agreed to maintain business for Mayfield’s company and to give Mayfield new pension fund business in exchange for cash others things of value. In particular, Mayfield gave $50,000 to the Kilpatrick Civic Fund. In addition, Mayfield paid for Beasley and others to take a trip to Las Vegas costing $60,000; paid for another private plane trip to Tallahassee, Florida costing $24,000; paid for a private jet flight to Bermuda; and hired Beasley’s paramour to work at MayfieldGentry at Beasley’s request. Because of the pension fund business directed to MayfieldGentry by Beasley, Mayfield earned significant investment advisory fees from Detroit’s two pension funds.
United States Attorney McQuade said, “Detroit’s pension fund officials are entrusted to care for the retirement savings of the City’s employees, including police officer and firefighters. Officials who abuse their positions of trust for personal gain will be brought to justice.”
Robert Foley, Special Agent in Charge, Federal Bureau of Investigation said,"Those individuals who engage in pay to play schemes rob citizens of their right to honest government. The FBI Led Detroit Area Public Corruption Task Force is committed to stopping these illegal acts."Based on his guilty plea and felony conviction for conspiring to pay bribes, Mayfield is facing a maximum of five years in prison and a fine of up to $250,000.
A criminal indictment is pending against Beasley and against Roy Dixon, a former investment advisor to the two pension funds who paid bribes to Beasley and other officials and who embezzled millions from the funds.
In addition, a number of other defendants have been convicted in relation to the pension fund investigation, including (1) Monica Conyers, a former Trustee of the General Retirement System and former member of the Detroit city council, for conspiracy to take bribes, including bribes relating to a proposed multi-million dollar pension fund investment in Wireless Resources and a $10,000 extortion payment relating to the Police and Fire Retirement System’s investment in the Romulus Deep Injection Waste Well; (2) Samuel L. Riddle, Conyers’ Chief of Staff, for conspiracy to commit bribery and extortion relating to the Wireless Resources and Romulus Deep Injection Well investments; (3) DeDan Milton, a former Trustee of Detroit’s two pension funds; (4) Andrew Park, an owner of Asian Village, who paid a bribe to obtain a $2.75 million loan from Detroit’s General Retirement System; and (5) Derrick Miller, former Chief Information Officer of Detroit, who accepted the bribe from Park and who took a kickback of more than $500,000 on a $44 million investment by Detroit’s two pension funds.
The case was investigated by agents of the Federal Bureau of Investigation, the Internal Revenue Service, and the Department of Labor. It is being prosecuted by Assistant United States Attorneys Robert Cares and David A. Gardey.
Indictment Returned in Hammond Federal CourtRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ FAX (219) 852-2770
Hammond, Indiana- The United States Attorney’s Office announced that the following Indictments were returned on February 7, 2013:
Stacy Davis, 45, of Gary, Indiana, was charged in an Indictment with the robbery of Chase Bank in Merrillville, Indiana and Fifth Third bank in Munster, Indiana.These charges were filed as the result of an investigation by the Federal Bureau of Investigation GRIT Task Force.This case has been assigned to and will be prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
Ronald Parks, 60, residence unknown, was charged in an Indictment with kidnapping.These charges were filed as the result of an investigation by the Federal Bureau of Investigation and the Hammond Police Department.This case has been assigned to and will be prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
IRS Criminal Investigation Warns the Public to be Vigilant About Identity TheftRead the Press Release
ALBUQUERQUE – IRS Criminal Investigation is warning taxpayers of an increase in false tax returns being filed with the IRS using stolen Social Security numbers. Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. Both nationwide and in New Mexico, IRS Criminal Investigation has designated identity theft as a priority area and increased numbers of tax fraud investigations relating to identity theft have been initiated in recent years.
There are 26 IRS Criminal Investigation field offices across the country that investigate tax fraud and refund fraud, including identity theft. Investigation analysts in IRS Scheme Development Centers often discover identity theft related schemes where refunds appear to be going to identity theft perpetrators. In these instances, action can be taken to stop additional false refunds and protect victim accounts. IRS Criminal Investigation recommends prosecution of refund fraud cases, including cases involving identity theft to the Department of Justice.
“IRS Criminal Investigation is serious about investigating identity theft,” said Gabriel Grchan, Acting Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation. “Filing fraudulent tax returns is the same thing as stealing from the U.S. Treasury. It also harms those individuals whose identities were stolen.”
“IRS Criminal Investigation has partnered with other local and Federal law enforcement agencies to identify the perpetrators of these identity theft schemes. We have obtained the full support of the U.S. Attorney’s Office to pursue prosecution of these individuals which has often resulted in significant prison sentences.”
The following is an example of a recent identity theft case in New Mexico: Douglas Kuester of Silver City, N.M., was sentenced in Nov. 2012 to 48 months in prison for filing false claims and aggravated identity theft. According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds.
“The IRS has taken numerous steps to combat identity theft and protect taxpayers. I encourage you to go to www.IRS.gov and read the Taxpayer Guide to Identity Theft, call 1-800-908-4490 or visit your local IRS office for information about identity theft and what to do if you become a victim,” said Grchan.
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IRS News Release
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IRS Fact Sheet
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IRS ID Theft Map
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Health Care Fraud Fugitive Is Extradited from Colombia to Serve 2006 SentenceRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the return to South Florida of fugitive Magda Luz Lavin, 55, after her arrest and extradition from Colombia. Lavin fled South Florida during a 2006 health care fraud trial, and was subsequently charged with bond jumping. She made her initial appearance in federal court earlier today on the bond jumping charge.
Lavin was the former owner of at least two HIV clinics in the Southern District of Florida. She was charged in a 25-count federal indictment with conspiracy to commit health care fraud, health care fraud, and money laundering. On September 18, 2006, after three weeks of trial before U.S. District Judge Joan A. Lenard, defendant Lavin failed to appear in Court and the Court issued a bench warrant for her arrest. Thereafter, the Court found that Lavin had fled the jurisdiction and had voluntarily waived her appearance during the remainder of the trial, and permitted the government to proceed with the trial. On September 25, 2006, the jury convicted Lavin on all counts.
On December 19, 2006, Judge Lenard sentenced Lavin in absentia to 180 months in prison, and ordered her to pay restitution in the amount of $5,037, 356. Upon her return, Lavin will begin to serve her sentence and face the bond jumping charges.
U.S. Attorney Wifredo A. Ferrer stated, “This case should serve as a wakeup call to health care fraud defendants who seek to avoid justice by fleeing to other countries: the arm of the law is long and we in law enforcement are patient. Sooner or later, we will catch you and you will be brought back to face justice.”
“In 2006, Magda Luz Lavin, a convicted health care fraudster, attempted to cheat justice by fleeing the country during her trial,” said Michael B. Steinbach, Special Agent in Charge of FBI Miami. “Thanks to the support and close cooperation of our partners including Interpol and the Colombian National Police, she is again in the United States in federal custody. Justice is served.”
According to the evidence, the defendant used two medical clinics, Alternative Day Spa, Corp., formerly in Kendall, and Alternative Treatment Programs, formerly in Key West, to defraud Medicare of more than $5 million between May 2000 and December 2002. The two clinics claimed to specialize in the treatment of HIV patients with “infusion therapy treatments.” The patients who attended the clinics were, in fact, HIV positive.
The evidence at trial showed that under Lavin’s direction, the clinics fraudulently billed Medicare for dosages of two expensive medications, Neupogen and Procrit. In fact, however, the patients received either no medication at all or minimal dosages of the medications diluted with vitamins and saline solution or dextrose solution. Lavin also paid kickbacks to patients to induce them to continue to attend the clinics.
During the trial, the evidence revealed that the defendants had caused the falsification of progress notes on “infusion therapy sheets” in the patients’ files to make it appear that the patients were receiving medications as billed to Medicare. In truth, however, patients were not receiving the medications as noted on the sheets and billed to Medicare. In addition, the government presented expert testimony that it was actually impossible for patients to receive the dosages of medications as billed to Medicare. The expert also testified that these medications were normally provided by injection, not by infusion, and that – contrary to the practice at the two clinics – Neupogen and Procrit should not be mixed together, or with saline solution.
Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer also thanked the U.S. Marshall’s Service for its assistance in returning this fugitive to the Southern District of Florida. The health care fraud case was prosecuted by Assistant U.S. Attorney Barbara Martinez.
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.
Hankinson Man Sentenced on Federal Firearm ChargesRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on Feb. 7, 2013, Anthony Nathaniel Hayes, Jr. of Hankinson, N.D., was sentenced before U.S. District Judge Ralph R. Erickson on charges of possession of firearms and ammunition by a convicted felon and possession of an unregistered firearm.
Judge Erickson sentenced Hayes, Jr. to nine and one-half years’ imprisonment to be followed by three years of supervised release. Hayes, Jr. was ordered to pay a $100 special assessment to the Crime Victim's Fund.
Hayes, Jr., 30, pleaded guilty on Aug. 15, 2012, to possessing four firearms and various ammunition including a stolen firearm and a silencer. The incident occurred in the District of North Dakota.
Federal firearms statutes prohibit possession of firearms by a convicted felon.According to the indictment filed, Hayes, Jr. Was previously convicted of assault in the third degree in Anoka County, Minnesota on July 10, 2006.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant U.S. Attorney Jennifer Klemetsrud Puhl prosecuted the case.
Gulfport Man Found Guilty on Federal Gun ChargesRead the Press Release
Gulfport, Miss - Albert Craft, Jr., 29, of Gulfport, was found guilty by a jury in U.S. District Court today of possession of a firearm by a convicted felon, announced United States Attorney Gregory K. Davis.
Craft will be sentenced on May 15, 2013 and faces a maximum penalty of ten years in prison and a $250,000 fine.
This case was investigated by the Bureau of Alcohol Tobacco and Firearms, the Mississippi Bureau of Narcotics, and the Gulfport Police Department. It was prosecuted by Assistant United States Attorney Annette Williams.###
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Our nation-wide commitment to reducing gun crime in America.
Gulfport Man Found Guilty on Federal Gun ChargesRead the Press Release
Gulfport, Miss - Albert Craft, Jr., 29, of Gulfport, was found guilty by a jury in U.S. District Court today of possession of a firearm by a convicted felon, announced United States Attorney Gregory K. Davis.
Craft will be sentenced on May 15, 2013 and faces a maximum penalty of ten years in prison and a $250,000 fine.
This case was investigated by the Bureau of Alcohol Tobacco and Firearms, the Mississippi Bureau of Narcotics, and the Gulfport Police Department. It was prosecuted by Assistant United States Attorney Annette Williams.###
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Our nation-wide commitment to reducing gun crime in America.
Grand Jury Returns Indictment Charging Jacksonville Man with Conspiracy to Distribute Crack CocaineRead the Press Release
Springfield, Ill. – A grand jury has returned a seven-count indictment against a Jacksonville, Ill., man, Michael Smith, 36, of the 200-block of Howe Street, for distribution of crack cocaine and heroin. Smith was charged last week by criminal complaint with possession with intent to distribute 280 grams or more of crack cocaine on or about Jan. 16, 2013.
The indictment charges Smith with conspiracy to distribute 280 grams or more of crack cocaine (one count); possession of 280 grams or more of crack cocaine with intent to distribute (one count); possession of heroin with intent to distribute (one count); and four counts of distribution of crack cocaine in December 2012 and January 2013.
The affidavit filed in support of the criminal complaint alleges that in December 2012 and January 2013, law enforcement officers with DEA and the Central Illinois Enforcement Group made controlled purchases of crack cocaine from Smith. Agents also executed a federal search warrant at Smith’s residence on Jan. 16, 2013. Officers recovered suspected marijuana and a Highpoint 9mm semi-automatic pistol and ammunition, as well as approximately 564 grams of crack cocaine and approximately 80 grams of heroin from under the hood of a pickup truck.
U.S. Magistrate Judge Byron G. Cudmore has ordered that Smith remain detained in the custody of the U.S. Marshals Service.
If convicted, the statutory penalty for conspiracy to distribute 280 grams or more of crack cocaine and for possession with intent to distribute 280 grams or more of crack cocaine is a mandatory minimum 10 years to life in prison. If the defendant has a prior drug felony conviction, the mandatory minimum penalty is 20 years to life in prison. For possession of heroin with intent to distribute and for each count of distribution of crack cocaine, the statutory penalty is up to 20 years in prison.
The charges are the result of an investigation by the Drug Enforcement Administration; the Central Illinois Enforcement Group; the Jacksonville Police Department; the Morgan County Sheriff’s Office; and Illinois State Police District Nine. The case is being prosecuted by Assistant U.S. Attorney Bryan D. Freres.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Grand Jury Returns Indictment Charging Jacksonville Man with Conspiracy to Distribute Crack CocaineRead the Press Release
Springfield, Ill. – A grand jury has returned a seven-count indictment against a Jacksonville, Ill., man, Michael Smith, 36, of the 200-block of Howe Street, for distribution of crack cocaine and heroin. Smith was charged last week by criminal complaint with possession with intent to distribute 280 grams or more of crack cocaine on or about Jan. 16, 2013.
The indictment charges Smith with conspiracy to distribute 280 grams or more of crack cocaine (one count); possession of 280 grams or more of crack cocaine with intent to distribute (one count); possession of heroin with intent to distribute (one count); and four counts of distribution of crack cocaine in December 2012 and January 2013.
The affidavit filed in support of the criminal complaint alleges that in December 2012 and January 2013, law enforcement officers with DEA and the Central Illinois Enforcement Group made controlled purchases of crack cocaine from Smith. Agents also executed a federal search warrant at Smith’s residence on Jan. 16, 2013. Officers recovered suspected marijuana and a Highpoint 9mm semi-automatic pistol and ammunition, as well as approximately 564 grams of crack cocaine and approximately 80 grams of heroin from under the hood of a pickup truck.
U.S. Magistrate Judge Byron G. Cudmore has ordered that Smith remain detained in the custody of the U.S. Marshals Service.
If convicted, the statutory penalty for conspiracy to distribute 280 grams or more of crack cocaine and for possession with intent to distribute 280 grams or more of crack cocaine is a mandatory minimum 10 years to life in prison. If the defendant has a prior drug felony conviction, the mandatory minimum penalty is 20 years to life in prison. For possession of heroin with intent to distribute and for each count of distribution of crack cocaine, the statutory penalty is up to 20 years in prison.
The charges are the result of an investigation by the Drug Enforcement Administration; the Central Illinois Enforcement Group; the Jacksonville Police Department; the Morgan County Sheriff’s Office; and Illinois State Police District Nine. The case is being prosecuted by Assistant U.S. Attorney Bryan D. Freres.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Gang Member Sentenced to 13 Years in Federal Prison for Sex Trafficking of a MinorRead the Press Release
PORTLAND, Ore. – Pedro Cruz Gonzales, 33, of Portland, Oregon, was sentenced by the Honorable Robert E. Jones to 13 years in federal prison following the defendant’s guilty plea to sex trafficking of a minor. Upon his release from prison, the defendant will serve a five year term of supervised release.
In pleading guilty, the defendant admitted that between August 2011 and September 2011, he recruited, enticed, harbored, transported, provided, obtained, and maintained a minor female knowing and in reckless disregard of the fact that she would be caused to engage in a commercial sex act.
Prior to imposing the sentence, Judge Jones recounted the defendant’s criminal history, his gang membership, the nature of the crime and then noted that the defendant was “a very bad, bad and dangerous man” who “engaged in one of the worst forms of a crime, sex trafficking with a minor.” In imposing the 13 year sentence, the Court directly addressed the defendant and told him, “Society needs to be protected from you.”
“We could not agree with Judge Jones more,” stated U.S. Attorney S. Amanda Marshall. “The prosecution of sex trafficking cases is a priority for the U.S. Attorney’s Office and sentences such as this send a powerful message that sex trafficking is a horrendous crime that we will aggressively prosecute.”
“Mr. Gonzales exploited one of the most vulnerable populations in society, runaway teenage girls, by preying upon their youth, vulnerabilities, and desperate circumstances,” said Multnomah County District Attorney Rod Underhill. “Cases such as this highlight the collaborative efforts of law enforcement and victim service groups in investigating and prosecuting these cases, as well as the continued need for preventative measures to ensure kids never find themselves in this situation in the first place.”
This case was investigated by Portland Police Bureau East Precinct Prostitution Coordination Detail, the Portland Police Bureau’s Minor Victims of Sex Trafficking Unit, the FBI’s Child Exploitation Task Force, and Immigration and Customs Enforcement Homeland Security Investigations. Sexual Assault Resource Center helped with providing victim assistance. Special Assistant U.S. Attorney Glen “J.R.” Ujifusa was the lead prosecutor on the case, and was assisted by Assistant U.S. Attorney Scott Kerin. Mr. Ujifusa is a Multnomah County Deputy District Attorney who also prosecutes sex trafficking cases in federal court as a member of the U.S. Attorney’s Office Gang and Sex Trafficking Unit.
Former State Corrections Accountant Pleads Guilty to Embezzling $77,000 from Various Department FundsRead the Press Release
Springfield, Ill. – A former employee of the Illinois Department of Corrections, Mary Ann Bohlen, 46, of Edinburg, Ill., admitted today that she embezzled approximately $77,000 from various department funds over a period of four years, from 2007 to 2011. During her appearance before U.S. Magistrate Judge Byron Cudmore, Bohlen waived indictment and entered pleas of guilty to two counts of mail fraud and two counts of embezzlement of government funds as charged in an information filed Feb. 1, 2013, by the U.S. Attorney’s Office for the Central District of Illinois.
According to court documents, Bohlen was employed from February 2004 until Feb. 15, 2012, as Assistant Deputy Director and Supervisor of Central Accounting for the Division of Fiscal Accounting Compliance. In her position, Bohlen had access to various financial accounts and funds including the Inmate Benefit Fund, Inmate Commissary Fund, and the Reimbursement and Education Fund. In April 2006, Bohlen became treasurer of the Illinois Correctional Employees Memorial Association, an organization of IDOC employees formed to recognize and memorialize IDOC employees who were killed or suffered permanent disability in the line of duty. Bohlen actively solicited employees to become members of the association, which was funded by membership fees, fundraisers and donations.
Bohlen admitted that from June 22, 2007, to July 19, 2011, she embezzled more than $50,000 from the Illinois Correctional Employees Memorial Association. As a further part of the scheme, Bohlen admitted that from about Mar. 6, 2008, to April 27, 2011, she embezzled more than $27,000 from other various funds, including the Inmate Benefit Fund, Inmate Commissary Fund, and the Reimbursement and Education Fund, to conceal and replace the funds she had embezzled from the Memorial Association.
Bohlen admitted that she wrote more than $50,000 worth of checks drawn on the Memorial Associations’ bank account which were payable to herself, to cash, and to a business in Owaneco, Ill., where she was an employee, partner or accountant. The business sold various products including Illinois wine, cheese, pizza, elk products, soy candles and other items.
Sentencing for Bohlen is scheduled on Jun. 10, 2013, before U.S. District Judge Sue E. Myerscough. Each count of mail fraud carries a statutory penalty of up to 20 years in prison; each count of embezzlement carries penalties of up to 10 years in prison.
The charges were investigated by the Illinois State Police and the U.S. Postal Inspection Service. Assistant U.S. Attorney Gregory K. Harris is prosecuting the case.
Former State Corrections Accountant Pleads Guilty to Embezzling $77,000 from Various Department FundsRead the Press Release
Springfield, Ill. – A former employee of the Illinois Department of Corrections, Mary Ann Bohlen, 46, of Edinburg, Ill., admitted today that she embezzled approximately $77,000 from various department funds over a period of four years, from 2007 to 2011. During her appearance before U.S. Magistrate Judge Byron Cudmore, Bohlen waived indictment and entered pleas of guilty to two counts of mail fraud and two counts of embezzlement of government funds as charged in an information filed Feb. 1, 2013, by the U.S. Attorney’s Office for the Central District of Illinois.
According to court documents, Bohlen was employed from February 2004 until Feb. 15, 2012, as Assistant Deputy Director and Supervisor of Central Accounting for the Division of Fiscal Accounting Compliance. In her position, Bohlen had access to various financial accounts and funds including the Inmate Benefit Fund, Inmate Commissary Fund, and the Reimbursement and Education Fund. In April 2006, Bohlen became treasurer of the Illinois Correctional Employees Memorial Association, an organization of IDOC employees formed to recognize and memorialize IDOC employees who were killed or suffered permanent disability in the line of duty. Bohlen actively solicited employees to become members of the association, which was funded by membership fees, fundraisers and donations.
Bohlen admitted that from June 22, 2007, to July 19, 2011, she embezzled more than $50,000 from the Illinois Correctional Employees Memorial Association. As a further part of the scheme, Bohlen admitted that from about Mar. 6, 2008, to April 27, 2011, she embezzled more than $27,000 from other various funds, including the Inmate Benefit Fund, Inmate Commissary Fund, and the Reimbursement and Education Fund, to conceal and replace the funds she had embezzled from the Memorial Association.
Bohlen admitted that she wrote more than $50,000 worth of checks drawn on the Memorial Associations’ bank account which were payable to herself, to cash, and to a business in Owaneco, Ill., where she was an employee, partner or accountant. The business sold various products including Illinois wine, cheese, pizza, elk products, soy candles and other items.
Sentencing for Bohlen is scheduled on Jun. 10, 2013, before U.S. District Judge Sue E. Myerscough. Each count of mail fraud carries a statutory penalty of up to 20 years in prison; each count of embezzlement carries penalties of up to 10 years in prison.
The charges were investigated by the Illinois State Police and the U.S. Postal Inspection Service. Assistant U.S. Attorney Gregory K. Harris is prosecuting the case.
Former Skiatook Superintendent Sentenced to Term of ImprisonmentRead the Press Release
United States Attorney Danny C. Williams, Sr., announced that earlier today United States District Court Judge Claire V. Eagan sentenced Dr. Gary L. Johnson to 12 months and 1 day imprisonment for Conspiracy to Defraud the United States and to Corruptly Solicit, Accept, Give and Offer Things of Value. He was ordered to pay $207,590.01 of the $657,197.27 in restitution to the Skiatook Public Schools. Parole has been abolished in the Federal System.
Johnson, the former Skiatook Public Schools Superintendent, and Mr. Enos, an Oklahoma City businessman, had previously admitted to conspiring to defraud the United States by hiding from the Internal Revenue Service income derived from bribes in the preparation and filing of Johnson’s Federal income tax returns. Additionally, the defendants admitted they had agreed to violate Federal laws by engaging in corrupt conduct to influence Johnson through a series of bribes.
During the course of the conspiracy from 2004-2010, Johnson failed to perform his fiduciary responsibilities as a public official as they related to the procurement of supplies, equipment and services. Meanwhile, Enos profited substantially as he over billed the Skiatook School District for basic supplies, equipment and services.
Enos would submit invoices to Johnson at the Skiatook Schools for the supplies, equipment and services at prices that were as much as 400% inflated above the fair market value. Johnson would then approve payments by the Skiatook Schools for the over billed invoices. In exchange, Johnson would corruptly solicit and accept things of value, including cash, tickets to college football games, and the costs for travel, food, lodging, and entertainment from Enos.
For example, in January 2004, Enos took Johnson to the National NCAA Division I Football Championship game in New Orleans, Louisiana. Furthermore, beginning in 2007 and continuing on a recurring basis, Enos purchased with cash Johnson’s University of Oklahoma (“OU”) football tickets for a price in excess of the fair market value and then provided him with upgraded OU football tickets that provided access to a box suite. Enos also provided Johnson with multiple cash bribes during the course of the conspiracy.
In order to conceal their corrupt agreement, the defendants used code words when discussing their conspiratorial agreement. They used the code word “cabinet” to refer to corrupt cash payments of $100, and the words “large cabinet” to refer to corrupt cash payments of $1,000. Likewise, they concealed their conspiracy from the United States by failing to include the cash kickbacks paid by Enos to Johnson on Johnson’s 2008 Federal income tax return.
U.S. Attorney Williams commented, “Today’s sentence puts public officials on notice that they are not above the law, and will be held accountable when they solicit and accept bribes to influence their conduct.”
Assistant United States Attorneys Joseph Wilson and Trent Shores prosecuted the case on behalf of the United States. Special Agents with the Internal Revenue Service and the Department of Education’s Office of the Inspector General investigated the criminal conduct-at- issue in coordination with State of Oklahoma authorities.
Former School Board Member Pleads Guilty to Cocaine TraffickingRead the Press Release
SHREVEPORT, La: United States Attorney Stephanie A. Finley announced today that former DeSoto Parish School Board member Bartholomew Claiborne, 25, of Mansfield, pleaded guilty Thursday before U.S. District Judge Elizabeth E. Foote to distributing cocaine.
Claiborne was indicted on Sept. 4, 2012, for distributing cocaine. According to the indictment, Claiborne was recorded to have distributed cocaine on 14 separate occasions between Oct. 11, 2011 and July 12, 2012. Authorities used surveillance methods to observe Claiborne selling cocaine.
Claiborne faces up to 20 years in prison, a fine of $1 million or both with three years of supervised release on the count. Sentencing has been set for May 21, 2013 at 11:30 a.m. “As an elected official, Bartholomew Claiborne swore to uphold the law, and by his own admission, failed to do so,” Finley stated. “He also failed the children and parents of his school board district where he served as a role model. We hope this case sends a message that public officials are not above the law. We will continue to prosecute those who violate federal laws. I thank all of the agencies on a federal, state and local level who participated in the investigation.”
Claiborne was the first indictment as part of the Organized Crime Drug Enforcement Task Force (OCDETF) “Operation Limpiar Casa.” The FBI, the DEA, the DeSoto Parish Sheriff’s Office, the Mansfield Police Department, and the Tri-Parish Task Force which includes DeSoto, Sabine and Red River parishes, participate in the OCDETF program and conducted the operation.
The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
First Assistant U.S. Attorney Alexander Van Hook is prosecuting the case.
United States Attorney Stephanie Finley is available for comment and can be reached at (337) 262-6618.
Former New Jersey Corrections Officer Sentenced to 30 Months in Prison for ExtortionRead the Press Release
CAMDEN, N.J. – Jermel Brown, a former senior corrections officer with the N.J. Department of Corrections (NJDOC) was sentenced today to 30 months in prison for using his official position to smuggle contraband to a prisoner in the Garden State Youth Correctional Facility in Yardville, N.J., (Yardville Prison) in exchange for $12,000, U.S. Attorney Paul J. Fishman announced.
Brown, 35, of Camden, N.J., previously pleaded guilty before Senior U.S. District Judge Joseph H. Rodriguez to an Information charging him with conspiracy to extort a cooperating witness who was incarcerated at Yardville Prison and who was identified in court filings as “CW1.” Judge Rodriguez imposed the sentence today in Camden federal court.According to documents filed in this case and statements made in court:
Brown agreed to use his position as a senior corrections officer to smuggle items, including mobile telephones and music players, into Yardville Prison for delivery to a prisoner – CW1 – in exchange for cash payments. Between July 2010 and July 2011, Brown and his co-conspirators, Kenneth Richards and Maurice Brown-Harden, conducted three transactions in which another cooperating witness outside the prison provided Richards and Brown-Harden with two mobile telephones and two portable music players and three cash payments of $4,000, $4,500, and $3,500 each. Brown then used his official position at the prison to deliver the mobile telephones and music players to the prisoner inside the facility.
In addition to the prison term, Judge Rodriguez sentenced Brown to three years of supervised release, 500 hours of community service and fined him $1,000. Richards and Brown-Harden previously pleaded guilty before Judge Rodriguez and both were sentenced in 2012 to 18 months’ imprisonment.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s sentence. He also thanked the N.J. Department of Corrections, Special Investigation Division, for its cooperation and assistance throughout the investigation.
The government was represented by Assistant U.S. Attorney Lee M. Cortes Jr. of the U.S. Attorney’s Office Special Prosecutions Division.
13-069Defense counsel: Joseph M. Marrone Esq., Philadelphia, PA
Former L.A. City Building Inspector Agrees to Plead Guilty to Federal Charges of Taking Tens of Thousands of Dollars in Bribe PaymentsRead the Press Release
Ex-inspector solicited and received bribes primarily from Koreatown businesses
LOS ANGELES – A former inspector with the Los Angeles Department of Building and Safety (LADBS) has been named in a federal bribery case that alleges he took more than $30,000 in bribes in relation to at least a dozen properties in and around the Koreatown District of Los Angeles.
Samuel In, 66, of Glendale, a 37-year veteran of LADBS, agreed in documents filed late yesterday to plead guilty to one count of soliciting and receiving monetary payments that In described to victims as “fees.”
According to a criminal information and a plea agreement filed yesterday afternoon in United States District Court, In admitted taking bribe payments from 2007 through the end of 2010.“Corruption by any official corrodes public confidence in governmental institutions,” said United States Attorney André Birotte Jr. “In this case, a government employee directly threatened the safety of the public by exploiting his position to line his own pockets. The victims were all the more vulnerable because they had limited abilities in English and depended on Mr. In to help them navigate through the inspection processes.”
In one example described in court documents, a victim identified as T.C., who wanted to open a retail store in Los Angeles in 2008, paid $5,000 to In. To open the store, the victim needed to convert office space in a process that required a building permit. The victim had limited English language ability and had a difficult time completing the LADBS paperwork. During one of the victim’s visits to LADBS’ offices, In assisted the victim in the Korean language, informing him that he was a senior inspector at LADBS, and advising the victim about construction plans.
The victim followed In’s advice and received a building permit from LADBS. Following the issuance of the permit, In went to the victim’s business and said he would take care of the inspections and other procedures through the final inspection of the retail store, if the victim paid In $4,000 in “fees.” In later increased the amount of his “fees” to $5,000, asked that any payments by check be made with the payee line left blank, and advised that checks made payable to LADBS would not be useful. The victim ultimately made several cash payments totaling $5,000.
As part of his plea agreement, In admitted that he solicited and accepted bribery payments totaling more than $30,000 in connection with his official duties in relation to at least 11 other Koreatown properties.
“Mr. In took advantage of Koreatown residents by taking their money under false pretenses, but also by deluding victims into a false understanding of how city business is conducted,” said Bill Lewis, Assistant Director in Charge of the FBI in Los Angeles. “The defendant’s decision to plead guilty is another step forward in restoring honest government to the city of Los Angeles.”
In will be summoned to make an initial appearance in United States District Court later this month.
The FBI began an undercover investigation of LADBS inspectors in the summer of 2010, after an informant reported that LADBS inspectors took cash bribes in exchange for necessary permit approvals on residential construction projects. Two former inspectors pleaded guilty to accepting bribe payments and were sentenced to federal prison (see: http://www.justice.gov/archive/usao/cac/Pressroom/2011/141.html).
The charge of bribery carries a statutory maximum sentence of 10 years in federal prison and a fine of $250,000.The case against In is the result of an investigation by the Federal Bureau of Investigation.
The FBI urges anyone with information about building inspectors or other officials accepting bribes to contact the FBI by calling its Los Angeles Field Office at (310) 477-6565, or by sending an e-mail to the dedicated anti-corruption address: [email protected].
Release No. 13-022
Former Jewelry Company Executive Sentenced in U.S.V.I. to Pay $1.1 Million in Fines and Community Service for Illegal Trade of Protected Black CoralRead the Press Release
Ashu Bhandari, the former president and CEO of GEM Manufacturing LLC, a U.S. Virgin Islands-based company, was sentenced Thursday in federal court in St. Thomas, U.S.V.I., for felony customs violations for his role in a scheme to illegally import protected black coral into the United States, the Department of Justice announced. Bhandari is the last defendant to be sentenced as the result of a far reaching investigation into the illegal trade in black coral. The scheme cost Bhandari’s company, GEM Manufacturing, millions of dollars in financial penalties and sent two of his trading partners to prison.
At today’s hearing, the court imposed a criminal fine of $918,950 and sentenced Bhandari to one month in jail, to be followed by one month of home confinement and one year of supervised release, during which Bhandari would be required to complete 300 hours of community service and be banned from any business venture involving coral or coral products. In addition to the fine, Bhandari will be required to pay $229,687 to the University of the Virgin Islands to be used for community service projects designed to research and protect black corals. The court recognized that Bhandari’s sentence was based, in part, on his cooperation with federal investigators in related illicit coral trafficking cases.
On Nov. 7, 2012, Ashu Bhandari pleaded guilty to one felony count of false classification of goods for his efforts to conceal his illegal importation of internationally protected black coral in 2009. GEM was in the business of manufacturing high-end jewelry and sculpture products that utilize black coral. During his term as CEO, Bhandari was responsible for ensuring the continued supply of raw black coral for the company. Black corals are considered important habitat for the deep sea marine environment and are protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Each of the species of black coral is listed in Appendix II of CITES and is subject to strict trade regulations.
Bhandari admitted that by 2008, he learned that GEM’s Taiwanese suppliers of black coral could not obtain legitimate CITES certificates. In spite of this knowledge, Bhandari made a “business decision to go forward” with the Taiwanese suppliers. The Taiwanese suppliers would label the coral shipments as “plastic” in order to fool customs authorities in Hong Kong and the United States. Bhandari admitted that by 2009 he knew that the shipments he arranged on behalf of GEM were coming into St. Thomas falsely labeled.
“Mr. Bhandari actively participated in an illegal scheme to traffic in protected black coral, a trade that has helped deplete a world resource that serves as essential habitat for marine biodiversity,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “As this case clearly shows, the Department of Justice will continue to aggressively prosecute those who violate U.S. law by illegally trafficking in protected species.”
“The effective stewardship of our natural resources by vigorously enforcing environmental laws is a priority of the Department of Justice,” said Ronald W. Sharpe, U.S. Attorney for the District of the Virgin Islands. “This prosecution, like many cases involving the investigation and prosecution of those who set out to exploit our precious natural resources, was complex, time consuming and required the expertise of multiple law enforcement agencies. The dedication and cooperative efforts of the various law enforcement agencies involved in the successful prosecution of this matter are to be commended.”
“This investigation is the culmination of a three year joint investigation led by U.S. Fish and Wildlife Service’s Office of Law Enforcement in partnership with the National Oceanic and Atmospheric Administration, U.S. Immigration and Customs Enforcement-Homeland Security Investigations, U.S. Attorney’s Office, the U.S. Justice Department’s Environment and Natural Resources Division and U.S. Customs and Border Protection,” said U.S. Fish and Wildlife Service Resident Agent in Charge David Pharo. “This investigation serves as a great example of multiple agencies, working together to stem the tide of exploitation of internationally protected species originating in marine environments. This investigation demonstrates our commitment to combat illegal international wildlife trafficking and bring justice to those that exploit protected marine resources for personal gain no matter where they are located.”
“Illegal importation and exportation of commercial quantities of CITES-protected corals is one of our Division's high priorities,” said Otha Easley, Acting Special Agent in Charge for the National Oceanic and Atmospheric Administration’s Office of Law Enforcement's Southeast Division. “Effective enforcement of CITES helps ensure that collection of these species is sustainable and that their survival in the wild is assured.”
“This sentence sends a clear message to black coral traffickers that we and our federal law enforcement partners are in the business of preventing illegal wildlife trade,” said Angel Melendez, Acting Special Agent in charge of HSI San Juan and U.S.V.I. “We will continue to identify and apprehend those who exploit protected species for commercial gain.”
Black coral is a precious coral that can be polished to a high sheen, worked into artistic sculptures and used in inlaid jewelry. Black coral is typically found in deep waters and many species have long life spans and are slow-growing. Using deep sea submersibles, scientists have observed that fish and invertebrates tend to accumulate around the black coral colonies. Thus, black coral communities serve important habitat functions in the mesophotic and deepwater zones. In the last few decades, pressures from overharvesting, due in part to the wider availability of scuba gear and the introduction of invasive species have threatened this group of coral. Recent seizures of illegal black coral around the world have led many to believe that black coral poaching is on the rise.
On Oct. 26, 2011, in the related case of U.S. v. GEM Manufacturing LLC, Case No. 2011-19 (D. Virgin Islands), GEM was sentenced to criminal financial penalties and forfeitures exceeding $4.47 million and three and a half years of probation that included a 10-point compliance plan that incorporated an auditing, tracking and inventory control program. GEM was also banned from doing business with its former coral supplier, Peng Chia Enterprise Co. Ltd. and its management team of Ivan and Gloria Chu. Ashu Bhandari was the individual known as “Co-conspirator X” in the related case of U.S. v. Gloria and Ivan Chu, Case No. 2010-003 (D. Virgin Islands). In January 2010, federal agents arrested the Chus as part of a sting operation in Las Vegas. The Chus were subsequently indicted in 2010 for illegally providing black coral to GEM. On June 23, 2010, Ivan Chu was sentenced to serve 30 months in prison and pay a $12,500 fine. Gloria Chu was sentenced to serve 20 months in prison and pay a $12,500 fine.
The case, developed as a result of Operation “Black Gold”, was investigated by agents of the U.S. Fish and Wildlife Service (FWS) and NOAA with support from U.S. Immigration and Customs Enforcement-Homeland Security Investigations and U.S. Customs and Border Protection. Analysis of coral samples by the FWS’s National Forensics Laboratory in Ashland, Ore., was critical to the investigation. The case was prosecuted by Christopher Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division and Nelson Jones of the U.S. Attorney’s Office in the U.S. Virgin Islands.
Former Jewelry Company Executive Sentenced in U.S.V.I. to Pay $1.1 Million in Fines and Community Service for Illegal Trade of Protected Black CoralRead the Press Release
Ashu Bhandari, the former president and CEO of GEM Manufacturing LLC, a U.S. Virgin Islands-based company, was sentenced Thursday in federal court in St. Thomas, U.S.V.I., for felony customs violations for his role in a scheme to illegally import protected black coral into the United States, the Department of Justice announced. Bhandari is the last defendant to be sentenced as the result of a far reaching investigation into the illegal trade in black coral. The scheme cost Bhandari’s company, GEM Manufacturing, millions of dollars in financial penalties and sent two of his trading partners to prison.
At today’s hearing, the court imposed a criminal fine of $918,950 and sentenced Bhandari to one month in jail, to be followed by one month of home confinement and one year of supervised release, during which Bhandari would be required to complete 300 hours of community service and be banned from any business venture involving coral or coral products. In addition to the fine, Bhandari will be required to pay $229,687 to the University of the Virgin Islands to be used for community service projects designed to research and protect black corals. The court recognized that Bhandari’s sentence was based, in part, on his cooperation with federal investigators in related illicit coral trafficking cases.
On Nov. 7, 2012, Ashu Bhandari pleaded guilty to one felony count of false classification of goods for his efforts to conceal his illegal importation of internationally protected black coral in 2009. GEM was in the business of manufacturing high-end jewelry and sculpture products that utilize black coral. During his term as CEO, Bhandari was responsible for ensuring the continued supply of raw black coral for the company. Black corals are considered important habitat for the deep sea marine environment and are protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Each of the species of black coral is listed in Appendix II of CITES and is subject to strict trade regulations.
Bhandari admitted that by 2008, he learned that GEM’s Taiwanese suppliers of black coral could not obtain legitimate CITES certificates. In spite of this knowledge, Bhandari made a “business decision to go forward” with the Taiwanese suppliers. The Taiwanese suppliers would label the coral shipments as “plastic” in order to fool customs authorities in Hong Kong and the United States. Bhandari admitted that by 2009 he knew that the shipments he arranged on behalf of GEM were coming into St. Thomas falsely labeled.
“Mr. Bhandari actively participated in an illegal scheme to traffic in protected black coral, a trade that has helped deplete a world resource that serves as essential habitat for marine biodiversity,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “As this case clearly shows, the Department of Justice will continue to aggressively prosecute those who violate U.S. law by illegally trafficking in protected species.”
“The effective stewardship of our natural resources by vigorously enforcing environmental laws is a priority of the Department of Justice,” said Ronald W. Sharpe, U.S. Attorney for the District of the Virgin Islands. “This prosecution, like many cases involving the investigation and prosecution of those who set out to exploit our precious natural resources, was complex, time consuming and required the expertise of multiple law enforcement agencies. The dedication and cooperative efforts of the various law enforcement agencies involved in the successful prosecution of this matter are to be commended.”
“This investigation is the culmination of a three year joint investigation led by U.S. Fish and Wildlife Service’s Office of Law Enforcement in partnership with the National Oceanic and Atmospheric Administration, U.S. Immigration and Customs Enforcement-Homeland Security Investigations, U.S. Attorney’s Office, the U.S. Justice Department’s Environment and Natural Resources Division and U.S. Customs and Border Protection,” said U.S. Fish and Wildlife Service Resident Agent in Charge David Pharo. “This investigation serves as a great example of multiple agencies, working together to stem the tide of exploitation of internationally protected species originating in marine environments. This investigation demonstrates our commitment to combat illegal international wildlife trafficking and bring justice to those that exploit protected marine resources for personal gain no matter where they are located.”
“Illegal importation and exportation of commercial quantities of CITES-protected corals is one of our Division's high priorities,” said Otha Easley, Acting Special Agent in Charge for the National Oceanic and Atmospheric Administration’s Office of Law Enforcement's Southeast Division. “Effective enforcement of CITES helps ensure that collection of these species is sustainable and that their survival in the wild is assured.”
“This sentence sends a clear message to black coral traffickers that we and our federal law enforcement partners are in the business of preventing illegal wildlife trade,” said Angel Melendez, Acting Special Agent in charge of HSI San Juan and U.S.V.I. “We will continue to identify and apprehend those who exploit protected species for commercial gain.”
Black coral is a precious coral that can be polished to a high sheen, worked into artistic sculptures and used in inlaid jewelry. Black coral is typically found in deep waters and many species have long life spans and are slow-growing. Using deep sea submersibles, scientists have observed that fish and invertebrates tend to accumulate around the black coral colonies. Thus, black coral communities serve important habitat functions in the mesophotic and deepwater zones. In the last few decades, pressures from overharvesting, due in part to the wider availability of scuba gear and the introduction of invasive species have threatened this group of coral. Recent seizures of illegal black coral around the world have led many to believe that black coral poaching is on the rise.
On Oct. 26, 2011, in the related case of U.S. v. GEM Manufacturing LLC, Case No. 2011-19 (D. Virgin Islands), GEM was sentenced to criminal financial penalties and forfeitures exceeding $4.47 million and three and a half years of probation that included a 10-point compliance plan that incorporated an auditing, tracking and inventory control program. GEM was also banned from doing business with its former coral supplier, Peng Chia Enterprise Co. Ltd. and its management team of Ivan and Gloria Chu. Ashu Bhandari was the individual known as “Co-conspirator X” in the related case of U.S. v. Gloria and Ivan Chu, Case No. 2010-003 (D. Virgin Islands). In January 2010, federal agents arrested the Chus as part of a sting operation in Las Vegas. The Chus were subsequently indicted in 2010 for illegally providing black coral to GEM. On June 23, 2010, Ivan Chu was sentenced to serve 30 months in prison and pay a $12,500 fine. Gloria Chu was sentenced to serve 20 months in prison and pay a $12,500 fine.
The case, developed as a result of Operation “Black Gold”, was investigated by agents of the U.S. Fish and Wildlife Service (FWS) and NOAA with support from U.S. Immigration and Customs Enforcement-Homeland Security Investigations and U.S. Customs and Border Protection. Analysis of coral samples by the FWS’s National Forensics Laboratory in Ashland, Ore., was critical to the investigation. The case was prosecuted by Christopher Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division and Nelson Jones of the U.S. Attorney’s Office in the U.S. Virgin Islands.
Former Employee of Deceased Friendswood Financial Advisor Charged with Running Own Ponzi SchemeRead the Press Release
HOUSTON - Brian Anthony Bjork, 43, of Missouri City, has been charged in an one-count Information with running a Ponzi scheme that defrauded nearly a dozen investors of more than $1 million, United States Attorney Kenneth Magidson announced today. Bjork was formerly employed by deceased Friendswood investment advisor Joel David Salinas.
The complaint was filed just moments ago and Bjork will be ordered to report for his initial appearance sometime in the near future.
Bjork was a registered investment advisor employed at companies owned and operated by Salinas, including J. David Financial Group and Select Asset Management. Bjork also served as treasurer of a non-profit organization known as the Houston Athletics Foundation (HAF).
The criminal information alleges that during his employment at those companies, and while serving as treasurer of HAF, Bjork orchestrated an investment fraud scheme whereby he would he would solicit and obtain funds from individuals and entities under the false pretense that he would either invest those funds in Salinas’ pawn shops or use those funds to purchase corporate bonds being offered by Salinas. In truth and in fact, according to the complaint, Bjork kept those funds and used them to support his own lifestyle and to pay prior investors. In order to accomplish this fraud, Bjork established a Bank of America account under the name Brian A. Bjork dba: J David Financial Group, an account for which he was the sole signatory. Bjork then perpetrated his fraud by largely preying upon current and former family members and utilizing his position as the treasurer of HAF to fraudulently obtain funds and convert them for his own use.
Although the Securities and Exchange Commission (SEC) has civilly charged J. David Financial, SAM, Salinas’s Estate, Bjork and others (Case No. 11-CV-2830) with Salinas’ massive bogus bond scam, the criminal investigation alleges Bjork’s culpability for this “scam within a scam” whereby Bjork allegedly defrauded a subset of the J. David Financial investors, including HAF, of nearly $1.5 million.
The investigation leading to the charges in this case was conducted by the United States Secret Service and the FBI. Assistant United States Attorney Jason Varnado is prosecuting this case.
Former Bureau of Prisons Doctor Sentenced for Sexual Abuse of Three InmatesRead the Press Release
Physician Was Charged in Atlanta and Washington, D.C.
With Sexually Abusing InmatesATLANTA - Dr. Lewis Jackson, 34, of Atlanta, was sentenced today in federal district court for sexually assaulting three inmates at the United States Penitentiary in Atlanta while employed as a physician with the U.S. Bureau of Prisons. Jackson was sentenced to 2 years, 1 month in prison by United States District Court Judge Amy Totenberg. He is awaiting sentencing in the District of Columbia where he pleaded guilty in January to sexually assaulting an inmate while working at the District of Columbia jail.
United States Attorney Sally Quillian Yates said, “The federal inmates who relied on Dr. Jackson for their care believed he would treat them humanely. He exploited this trust when he sexually abused three inmates at the United States Penitentiary in Atlanta and another inmate at the District of Columbia jail. His conduct cost him his license to practice medicine and ensured he will spend the next several years as an inmate himself.”This case was investigated by Special Agents of the Department of Justice Office of the Inspector General (OIG). Inspector General Michael E. Horowitz stated: “Dr. Jackson’s actions victimized inmates and undermined the good work of the correctional staff at USP Atlanta. The OIG will not tolerate conduct by Justice Department employees that risks the safety of inmates and correctional officers.”
According to United States Attorney Yates, the charges and other information presented in court, from January, 2011 through July, 2012, Jackson was a physician at the United States Penitentiary (USP) in Atlanta where he provided medical care to inmates in USP's medical ward. The USP houses medium security male inmates and has a satellite camp for minimum security male inmates.
In October 2011, Jackson molested three inmates who were seeking medical treatment at the USP. When confronted by special agents with the Department of Justice’s, Office of Inspector General, Jackson originally denied engaging in the sex acts. After agents played an undercover recording made by one of the inmates, however, Jackson admitted he sexually assaulted the inmates.
Jackson recently pleaded guilty in the Superior Court of the District Columbia to three counts of sexually abusing another inmate in the District of Columbia Jail in 2008. According to that indictment, Jackson performed a series of sex acts on the inmate after he sought medical treatment from Jackson. Jackson was on bond in that case at the time of his arrest in Atlanta.
This case is being investigated by Special Agents of the Department of Justice, Office of Inspector General.
Assistant United States Attorney Kurt R. Erskine is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Information 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.
Former Bank Employee Charged with Stealing More Than $190KRead the Press Release
McALLEN, Texas – Armando Ruben Aleman, 28, of Weslaco, has been indicted by a federal grand jury for allegedly stealing more than $190,000 from former employer BBVA Compass Bank in Mission, United States Attorney Kenneth Magidson announced today. The indictment was retuned late yesterday.
A criminal complaint was filed Jan. 10 in federal court in McAllen. It alleged that during more than half of last year, while Aleman was employed at BBVA Compass Bank, he emptied a deceased client’s account before the executor of the client’s will could retrieve the funds. The funds allegedly totaled more than $190,000.
The charges allege Aleman forged checks in the deceased client’s name. Then, Aleman allegedly transferred the funds into an account he opened at Chase Bank using a stolen identity from another person. Aleman managed to spend and transfer to himself more than $70,000 from the fraudulently-opened Chase account before his scheme was discovered and the bank froze the account, according to allegations.
Aleman turned himself in to federal authorities on Jan. 14, and he was later released on bond with conditions that he not work for or conduct business with a financial institution or work in any capacity where he would have access to customers’ bank accounts, credit card numbers or other personal identifying information. He will appear again in federal court on the indictment in the near future.
If convicted, Aleman could face up to 30 years in prison as well as a $1 million possible fine.
This case was investigated by the Secret Service with the assistance of the FBI. Assistant U.S. Attorney Christopher Sully is prosecuting the case.
Federal Criminal Complaint Filed Against Pair for Allegedly Transporting Undocumented ImmigrantsRead the Press Release
Defendants attempt to evade law enforcement resulted in three deaths
In San Antonio this morning, federal authorities filed a criminal complaint charging 31-year-old Javier Silva-Morales, a resident of Monterrey, Mexico, and 25–year-old Jose Abram Lopez-Lozano, a resident of Michoacàn, Mexico, with illegally transporting undocumented aliens announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Acting Deputy Special Agent in Charge Monica Mapel.
According to the complaint, the driver, Silva-Morales and his accomplice, Lopez-Lozano, were attempting to transport undocumented aliens yesterday from Falfurrias, TX, to Houston when a Wilson County Sheriff’s deputy attempted to conduct a traffic stop near Poth, TX. A vehicle chase ensued. After losing sight of the vehicle, deputies subsequently discovered several individuals at the end of an open field standing on top of what appeared to be the same vehicle which was now submerged under water. A total of 12 individuals, including both defendants, were apprehended by sheriff’s deputies with assistance from Texas Department of Public Safety troopers. HSI agents later determined that the twelve were in the United States without proper documentation and placed them under arrest. A Texas Department of Public Safety dive team dispatched to the scene recovered three bodies from the bottom of the water near the vehicle.
Upon conviction, the defendants face up to life in federal prison. Both remain in federal custody at this time.
This criminal complaint resulted from an investigation by HSI, the Texas Department of Public Safety and the Wilson County Sheriff’s Office. Special Assistant United States Attorney Christina Playton is prosecuting this case on behalf of the Government.
A criminal complaint is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Federal Charges Filed Against Two in Deadly Manhattan, Kan., Arson CaseRead the Press Release
KANSAS CITY, KAN. – Federal charges have been filed against two people in connection with an arson at an apartment complex in Manhattan, Kan., that killed a woman, U.S. Attorney Barry Grissom said today.
Patrick Martin Scahill, 20, Manhattan, Kan., and Virginia Amanda Griese, 19, Manhattan, Kan., have been indicted on one count of arson resulting in a death. The indictment alleges that on Feb. 6, 2013, Scahill and Griese were responsible for a fire at the Lee Crest Apartments, 820 Sunset Ave., in Manhattan. Vasanta Pallem, a 34-year-old postdoctoral researcher at Kansas State University who lived in the apartment complex, died as a result of the fire.
“The indictment alleges the defendants acted in reckless disregard for human life and that Ms. Pallem died as a direct result of their acts,” U.S. Attorney Barry Grissom said.
“As demonstrated in this tragedy, arson is a violent crime that can result in devastating loss,” said Marino F. Vidoli, Special Agent in Charge for the Bureau of Alcohol, Tobacco, Firearms and Explosives. “The ATF is committed to utilizing our unique resources and expertise to investigate these crimes.”
Grissom said the Riley County Attorney’s office requested the case be set for federal prosecution.
“The penalty for conviction in this case could be life in federal prison without parole,” Grissom said. “Working together with our state and local partners we are prepared to prosecute this case to the full extent of federal law.”
Grissom said he would not be able to respond at this point in the case to questions about the defendants’ motive for setting the fire.
“I anticipate more details of the investigation will be made public as the case proceeds,” he said.
Grissom said ATF investigated the case along with the Riley County Attorney’s Office, the Riley County Police Department, the Manhattan Fire Department, the Kansas State Fire Marshal’s Office, the Kansas Bureau of Investigations and the Pottawatomie County Sheriff’s Office. Assistant U.S. Attorney Jared Maag, Special Assistant U.S. Attorney Barry Wilkerson and Special Assistant U.S. Attorney Barry Disney are prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Fairfax Man Indicted for Producing Child Pornography and Attempted Enticement of A MinorRead the Press Release
ALEXANDRIA, Va. – Douglas Lee Payne Jr., 31, of Fairfax, Va., has been indicted by a federal grand jury on child exploitation related charges.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Lt. Colonel James A. Morris, Acting Fairfax County Chief of Police made the announcement after the indictment was returned.
Payne was indicted on Feb. 6, 2013, on one count of production of child pornography, which carries a mandatory minimum penalty of 15 years and a maximum penalty of 30 years in prison; one count of possession of child pornography, which carries a maximum penalty of 10 years in prison; one count of attempted enticement of a minor, which carries a mandatory minimum of 10 years and a maximum of life; and one count of attempted travel to engage in illicit sexual conduct, which carries a maximum of 30 years in prison, if convicted.
According to the indictment and other court documents, during the investigation of a Fairfax County probation violation in December 2011, evidence was discovered of communications between Payne and a minor victim in Indiana. These communications involved both text messages and Skype chats. In these communications Payne asked the minor victim for nude images and instructed her on how to pose. Payne had at least one child pornography image of the minor victim, which she had sent to him. Payne and the minor victim also had conversations about Payne going to Indiana to visit a cousin and that he would stop to see the minor victim and have sex with her on his way home. In addition, Payne had other child pornography images in his possession. On Dec. 28, 2011 Payne was on his way to Indiana when he was instructed to come home for a meeting with his Fairfax County probation officer.
This case was investigated by the Fairfax County Police Department and the FBI Washington Field Office’s Child Exploitation Task Force. Special Assistant United States Attorney Alicia J. Yass 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.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
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.Eleven People Arrested in Large-Scale Medicaid Fraud SchemeRead the Press Release
Bribery and Money Laundering Charges Also Lodged Against One Defendant
NEWARK, N.J. – Federal and state agents this morning arrested 11 people who are charged by Complaint, along with two corporations, in connection with a large-scale scheme to defraud the Medicaid program of millions of dollars, U.S. Attorney Paul J. Fishman announced today.
The Complaint also charges the owner of a home health aide business headquartered in Linden, N.J., with attempting on two occasions to hinder a state investigation by bribing a state regulator – who was working with the FBI – and with conspiring with the owner of another home health aide business in Elizabeth, N.J., to launder money.
The defendants arrested this morning are scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.“The defendants in this case allegedly enriched themselves by gaming the Medicaid system,” U.S. Attorney Fishman said. “The actions described in this Complaint are especially egregious, because the taxpayer dollars that were stolen were intended to provide necessary health care for our most vulnerable citizens. I’m especially proud that federal and state law enforcement agencies worked together effectively to uncover this alleged fraud.”
David Velazquez, Acting Special Agent in Charge of the FBI, Newark, said, “The FBI views health care fraud as a severe crime problem that poses a potential risk to patients and increases health care costs for all. Today's arrests are the result of a four-year investigation into a sophisticated scheme, involving multiple layers of fraud, money laundering and bribery, in order to defraud the New Jersey Medicaid program of millions of dollars. This case is indicative of how the FBI, along with its federal partners, and the State of New Jersey, will continue to work together to pursue those that steal from our health care system.”“Falsely billing Medicaid for millions of dollars as alleged in today’s Complaint is a serious crime,” IRS-Criminal Investigation Acting Special Agent in Charge Shantelle P. Kitchen, Newark Field Office, said. “Financial fraud schemes such as this are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible. “IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money.”
New Jersey Attorney General Jeffrey Chiesa said: “The New Jersey Division of Consumer Affairs regulates nurses, home health aides, and home health agencies in our state, and the Division's Enforcement Bureau aggressively investigates any allegations of fraud or wrongdoing by those regulated professionals and businesses. We are proud to have worked with the FBI on this investigation. Alleged billing fraud by health professionals affects the entire economy, and will not be tolerated.”
According to the Complaint filed in this case:
Irina Krutoyarsky, 58, of Springfield, N.J., was the owner and operator of HHCH Health Care Inc. (HHCH), a for-profit home health aide business located in Linden. HHCH billed Medicaid for services purportedly provided by home health aides to Medicaid-eligible patients. Medicaid is a jointly funded, federal-state health insurance program that provides certain health benefits to the disabled and individuals and families with low incomes and resources. Paul Mil, 68, of Springfield, was the owner and operator of People Choice Home Care Inc. (People Choice), another for-profit home health business located in Linden and Elizabeth, which also billed Medicaid for services purportedly provided by home health aides.
Krutoyarsky, Mil and their conspirators allegedly defrauded Medicaid of millions of dollars through a variety of schemes, including:
● billing Medicaid for treatment and services not actually rendered;
● obtaining fraudulent home health aide certifications for employees and others;
● using illegal aliens and/or non-certified individuals to provide home health aide services and billing Medicaid, claiming the services had been provided by certified home health aides.
According to the Complaint:
During the investigation, an individual working with the FBI – “Cooperating Witness Three” (CW3) – met Krutoyarsky, Mil, and others at HHCH and consensually recorded a number of conversations. For example, on Jan. 31, 2012, CW3 met with Krutoyarsky and Mil to discuss obtaining a home health aide license. During this consensually recorded conversation (audio and video), they discussed fraudulently billing Medicaid providing false information about the patients, known as a “bait and switch:”
Krutoyarsky: You know, it's just the free money . . . coming in.
CW3: That's true.Mil described how they billed Medicaid for services not actually rendered:
Mil: It’s a lot of people, a lot of people who . . . Medicaid. Government pay for the service. We can get, you know, between 10 and 18 hours [of Medicaid billing per week per patient]. Look, people can work in a week and get paid hundred bucks a week doing nothing. Why not?
Krutoyarsky: . . . But as long as these people doesn't live in the same address, so Medicaid is not gonna trace.
CW3: Oh, so otherwise they will trace. Okay.
Krutoyarsky: Because they do the tracings, you know. They gonna see who's working, who's not working, this and that. . . . So this way, they gonna have a free money. . . . Government, free money.
After meeting with Krutoyarsky and Mil, CW3 met with defendant Nekadam S. Galibova, an HHCH office employee, who assisted CW3 in obtaining a home health aide license without taking the required course or test. CW3 underwent neither the required training nor testing, but in March 2012, CW3 received a home health aide license from the New Jersey. Krutoyarsky, Mil, and others billed Medicaid under CW3’s license, knowing that CW3 provided no treatment to any patients.
Galibova was also a purported HHCH home health aide. The investigation revealed that she conspired with Krutoyarsky and others to bill Medicaid for services not rendered. Galibova and HHCH billed Medicaid for a patient (referred to as Patient M.N.) from July 27 to 31, 2009, and August 3 to 4, 2009, periods when that patient was, in fact, out of the country.
Krutoyarsky and Mil also dispatched undocumented aliens and other unlicensed individuals to patients’ homes. Defendant Sonia Mesa was observed by the FBI visiting a patient’s home, however, Medicaid was billed using the names of others, including Alla Neymet and Leonora Popesku.
Krutoyarsky also bribed a N.J. Department of Labor employee on two occasions to stop wage and hour investigations into HHCH and People Choice. This state employee, however, was cooperating with the FBI and is referred to in the Complaint as “Cooperating Witness Two” (CW2). On June 14, 2010, Krutoyarsky met CW2 about the state investigation into HHCH. Krutoyarsky did not want to provide CW2 with records related the HHCH and handed CW2 an envelope containing approximately $1,000 in cash.
Krutoyarsky and CW2 passed notes back and forth, negotiating the bribe. Eventually, Krutoyarsky agreed to pay CW2 $10,000, which she later paid. On April 14, 2011, Krutoyarsky paid another $15,000 to CW2 to subvert a state investigation into People Choice.Krutoyarsky and Mil then allegedly laundered the proceeds of the Medicaid fraud to conceal their scheme and allow it to continue. Krutoyarsky and defendant Gulmira Shayakhmetova are alleged to have conspired to structure money, by making numerous cash withdrawals in amounts under $10,000, to evade the banks requirement to file a report with the United States Treasury.
Count One charges conspiracy to commit health care fraud and carries a maximum penalty of 20 years in prison and a $250,000 fine. Counts Two and Three each charge bribery, and each charge carries a maximum penalty of 10 years in prison and a $250,000 fine. Count Four charges conspiracy to commit money laundering and carries a maximum penalty of 20 years in prison and a $500,000 fine. Count Five charges conspiracy to unlawfully structure financial transactions and carries a maximum penalty of five years in prison and a $250,000 fine.
In addition, HHCH and People Choice were charged in Count One of the Criminal Complaint with conspiracy to commit health care fraud.
The Criminal Complaint also alleges forfeiture and provides notice of the federal government’s intent to forfeit at least $3.45 million in proceeds from the alleged offense and numerous properties in Krutoyarsky’s name in New Jersey, Florida and New York.
U.S. Attorney Fishman praised agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; U.S. Citizenship and Immigration Services; N.J. Attorney General Jeffrey Chiesa; N.J. State Comptroller Matthew Boxer; Division Director Mark Anderson, Office of the State Comptroller, Medicaid Fraud Division; N.J., Division of Consumer Affairs, under the direction of Director Eric T. Kanefsky, Board of Nursing; Hal Wirth, Commissioner, N.J. Department of Labor; U.S. Department of State-Diplomatic Security; and the Marlboro Police Department, under the direction of Chief Bruce Hall, for the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorneys Anthony Moscato and Jonathan W. Romankow of the Organized Crime/Gangs Unit, Lakshmi Srinivasan Herman of the Economic Crimes Unit and Peter W. Gaeta of the Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
13-067
The following individual defendants were charged:
Name
Residence
Age
Charge(s)
Springfield, NJ
58
Counts One, Two, Three, Four, and Five
Paul Mil
Springfield, NJ
68
Counts One and Four
Nekadam S. Galibova
Union, NJ
51
Count One
Lilia Berstein
Old Bridge, NJ
57
Count One
Bella Fridman
East Brunswick, NJ
66
Count One
Malvina Frolova
Old Bridge, NJ
41
Count One
Sonia Mesa
Elizabeth, NJ
Count One
Nelson Mesa
Elizabeth, NJ
68
Count One
Alla Neymet
Edison, NJ
56 or 57
Count One
Leonora Popesku
Edison, NJ
65
Count One
Gulmira Shayakhmetova
Howell, NJ
46
Count Five
Additional information:
Certified Homemaker Home Health Aide employees who will be locked out of their place of employment and are looking for work should call: Home Health Assembly 732-877-1100 (Central NJ), 609-275-6100 (Southern NJ); Home Health Services Association of NJ 732-864-6111.To help care for family members in their homes or in a community-based system that will lose their homemaker home health aide due to the closing, please contact the NJ Division of Aging Services at 1-877-222-3737. The division's direct toll-free number, 1-800-792-8820, can only be used from in-state. They may also contact their HMO directly.
For Home-maker Home Health Aide applicants who were trained by these companies and are waiting to be certified (that is, their applications are still in process), the state Board of Nursing will be contacting each individual shortly with guidance.
HHCH Health Care Complaint
El Paso Man Sentenced to Federal Prison in Child Porn CaseRead the Press Release
Defendant was in possession of 5,342 videos and 133,345 images depicting child pornography
In El Paso this morning, 46-year-old Jose Miranda, a former mechanic with the El Paso Independent School District, was sentenced to six years in federal prison followed by a lifetime of supervised release for receipt and possession of material involving the sexual exploitation of children, announced United States Attorney Robert Pitman and Homeland Security Investigations Acting Special Agent in Charge Dennis Ulrich.
In addition to the prison term, Miranda is subject to an undetermined amount of restitution payable to the victims portrayed in the videos. U.S. District Judge Frank Montalvo is expected to rule on the restitution matter in approximately 30 days.
On May 31, 2012, Homeland Security Investigations (HSI) Cyber Crimes Group special agents executed a search warrant at the defendant’s residence and seized several computers and related equipment. According to court records, a forensics evaluation of the seized items revealed the presence of 5,342 videos and 133,345 images of minors engaging in sexually explicit conduct.
On October 22, 2012, Miranda pleaded guilty to one count of receipt of material involving the sexual exploitation of children and one count of possession of such material.
Assistant United States Attorney J. Brandy Gardes prosecuted this case on behalf of the Government.East Chicago Detective Indicted in Alleged Private Security Ghost-Payroll SchemRead the Press Release
HAMMOND, IND. – An East Chicago, Ind., police detective was indicted on federal fraud charges for allegedly engaging in a ghost-payroll scheme for nearly three years while he worked three different part-time security jobs in addition to his full-time law enforcement duties. The defendant, ROBERT APONTE, was charged with six counts of mail fraud and six counts of wire fraud in an indictment returned by a federal grand jury in Hammond.
Aponte, 42, of Chesterton, Ind., is scheduled to be arraigned at 9 a.m. on Monday in U.S. District Court in Hammond. Aponte has been an East Chicago police officer for 19 years, and during that time, he also served approximately eight years as an officer with the High Intensity Drug Trafficking Area (HIDTA) task force in Crown Point, Ind.
The charges, returned yesterday, were announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois. The case was investigated by the Federal Bureau of Investigation. The U.S. Attorney’s Office in Chicago is handling the prosecution in the Northern District of Indiana.
According to the indictment, between January 2009 and September 2011, Aponte defrauded his employers by receiving inflated wages from his private security side jobs by submitting time sheets that falsely overstated the hours he had worked. While working full time for the East Chicago Police Department, Aponte also held three part-time jobs as a security officer: at the East Chicago Housing Authority’s West Calumet Housing Complex; at Trillium Properties’ Lakeside Gardens and Harborside Apartments; and at Safety Training and Tracing, controlling and directing traffic at the BP refinery in Whiting, Ind.
Aponte allegedly scheduled shifts at West Calumet that overlapped with his shifts at the two Trillium properties and the BP refinery. He then caused the East Chicago Housing Authority to pay him for security patrols at West Calumet, when, instead, he was actually patrolling at either Lakeside Gardens or Harborside Apartments, or controlling refinery traffic, the charges allege. In addition, Aponte allegedly inflated the hours he worked for the housing authority and Trillium when he actually went off-duty for lengthy periods during his shifts and departed his duty station before his shifts ended.
The government is being represented by Chicago Assistant U.S. Attorney Patrick Otlewski, who is serving as a Special Assistant U.S. Attorney in Northern Indiana.
Each count of mail or wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
District Man Pleads Guilty to Making Arrangements to Have Sexual Contact with A ChildRead the Press Release
WASHINGTON – Carl Lott, 47, of Washington, D.C., pled guilty today to arranging to have sexual contact with a child, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Lott entered the guilty plea in the Superior Court of the District of Columbia. The Honorable Stuart G. Nash is to sentence him on April 11, 2013. Lott faces a maximum sentence of five years of imprisonment, as well as a fine of up to $50,000.
According to the government's evidence, on Nov. 8, 2012 Lott contacted a man he believed to be the father of a 12-year-old female child on a social network site. That man turned out to be an undercover MPD officer with the FBI's Child Exploitation Task Force.
Over the next two days, Lott engaged in online e-mail conversations with the undercover officer about having sexual relations with the purported child. During this period of time, Lott arranged a meeting - including time, date and location - with the undercover officer for the purpose of having sexual relations with the purported child. On Nov. 9, 2012, Lott met the undercover officer and was arrested.
This case was brought as part of the Department of Justice’s Project Safe Childhood initiative and investigated by the FBI’s Child Exploitation Task Force, which includes members of the FBI’s Washington Field Office and MPD. Project Safe Childhood is 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 U.S. Attorneys’ Offices and the 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, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge Parlave and Chief Lanier praised the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended Assistant U.S. Attorney Ari Redbord, who is prosecuting the case.
13-042Detroit Man Sentenced for Anti-Gay Hate CrimeRead the Press Release
Everett Dwayne Avery, 26, of Detroit, was sentenced today by U.S. District Judge John Corbett O’Meara after pleading guilty to committing a hate crime by assaulting a man because the man was gay. Avery was sentenced to serve 18 months in prison to be followed by three years of supervised release.
The assault occurred on March, 7, 2011, while Avery and the victim were at a convenience store in Detroit. Avery used anti-gay slurs toward the victim as Avery and the victim waited in line in the convenience store. Shortly after the first slurs, while still in the store, Avery used another anti-gay slur and punched the victim in the face, fracturing the victim’s eye socket. Avery pled guilty to violating the federal Hate Crimes Protection Act on Aug. 29, 2012.
"Hate-fueled incidents like this one have no place in a civilized society," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department is committed to using all the tools in our law enforcement arsenal, including the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, to prosecute acts motivated by hate."
“Congress has made it clear that it is a crime to assault people solely on the basis of their sexual orientation. Prosecutions under this law are important to ensure that all people in our community know that they have the full protection of the law,” said U.S. Attorney for the Eastern District of Michigan Barbara McQuade.
Special Agent in Charge Foley stated, "Hate Crimes have no place in a civilized society. We are a nation of laws and our laws embrace diversity and differences. The law does not tolerate the type of hate demonstrated in this matter and the FBI will investigate and put forth for prosecution a violation of that law."
The case was investigated by the FBI. The case was prosecuted by Assistant U.S. Attorney Pamela Thompson from the U.S. Attorney’s Office, and Trial Attorney Sanjay Patel from the Civil Rights Division of the U.S. Department of Justice.
Delaware Man Sentenced to 35 Years in Sex Travelling CaseRead the Press Release
PHILADELPHIA - John Angell, 41, of Smyrna, DE, was sentenced today to 35 years in prison for his conviction on 11 counts of traveling to have sex with a minor and 1 counts of aggravated sexual abuse of a child under the age of 12. Between June 2001 and June 2007, Angell, while working as a driver for the father of Minor 1, would drive the victim between the father’s house in the Eastern District of Pennsylvania and the mother’s house in the state of New York. On several occasions during that time period, Angell sexually assaulted Minor 1 while stopped at various rest areas.
In addition to the prison term, U.S. District Court Judge William H. Yohn, Jr. ordered 15 of supervised release, and ordered Angell to pay a $2,200 special assessment and a $1,000 fine.
The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Michelle Morgan.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525