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7 January 2013
Former Police Detective and His Wife Sentenced in Drug ConspiracyRead the Press Release
Keith Gidelson, 36, a former Philadelphia Police Detective, was sentenced today to 4 years in prison for operating anabolic steroid and human growth hormone (“HGH”) distribution organization in Philadelphia and throughout the United States. His wife, Kirsten Gidelson, was sentenced to three years probation, with the first year on home confinement, and a $100 special assessment, for her participation in the conspiracy. Gidelson acquired steroids from foreign suppliers and then sold these steroids to his co-conspirators who distributed the drugs to their own customers. He pleaded guilty October 9, 2012, to conspiracy to distribute anabolic steroids and 16 counts of possession with intent to distribute anabolic steroids. In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered Gidelson to pay a $25,000 fine and ordered three years of supervised release.
Gidelson received monthly shipments of anabolic steroids and HGH from suppliers in Europe and China. One supplier shipped the steroids to California where defendant Robert Walters re-packaged them for shipment to Gidelson. Another supplier shipped orders of steroids to a mailbox that Gidelson had rented at a UPS store. Gidelson and his wife stored and packaged steroids and HGH at their home in Philadelphia. The couple met with drug customers, including defendants Michael Barclay, Keith Ebner, Jeffrey Filoon, Christian Kowalko, Joel Levin, Luke Lors, Joseph McIntyre, George Sambuca, William Schiavo, and Vaidotas Verikas, at their home and at Philadelphia-area fitness clubs, to distribute anabolic steroids and HGH in various quantities.
Gidelson also distributed steroids to customers throughout the United States that he met through online weightlifting chat rooms on websites including: Steroids.com; Inject.com; Isteroids.com; and Bodybuilding.com. Gidelson also allegedly used the electronic mail service yahoo.com, and the encrypted email services hushmail.com and safemail.com to place orders and communicate with his foreign suppliers.The case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Philadelphia Police Department, and the United States Postal Inspection Service. It was prosecuted by Assistant United States Attorney David L. Axelrod.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Pennington Gap Police Chief Pleads Guilty to Drug Conspiracy and Burglary ChargesRead the Press Release
ABINGDON, VIRGINIA -- The former police chief of the Pennington Gap Virginia Police Department pleaded guilty this morning to felony charges related to his involvement in the distribution of prescription pain killers and the burglary of a pharmacy.
William Bryan Young, 39, of Duffield, Va., pled guilty today in the United States District Court for the Western District of Virginia in Abingdon, to one count of conspiracy to possess with the intent to distribute and distribute oxycodone and one count of burglary of a pharmacy, related to the burglary of the Rite-Aid pharmacy in Pennington Gap, Virginia, on September 28, 2012.
Young’s co-defendants, Kevin Andrew Young, 35, of Duffield, Va., and Chris Miles, 35, of Duffield, Va., also entered guilty pleas to one count of burglary of a pharmacy.
“William Bryan Young abused his police authority and repeatedly broke the law he was sworn to uphold,” United States Attorney Timothy J. Heaphy said today. “By arranging a commercial burglary and engaging in numerous illegal drug transactions, Mr. Young tarnished the badge he wore and violated the trust of the people of Pennington Gap. This case demonstrates our commitment to enforce the law and hold individuals accountable, regardless of rank, position, or status.”
“When a police officer violates the trust that our citizens have placed in its law enforcement, that is something we will not tolerate. I hope this sends a clear message to those who would engage in this wanton misconduct that there will be a penalty paid,” said Richard Marianos, special agent in charge of ATF Washington Field Division.According to evidence presented at the guilty plea hearings by Assistant United States Attorney Zachary Lee, in the Spring of 2012, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) began investigating William Bryan Young’s associations with known drug distributors in Lee County, Virginia. Their investigation, aided by other state, local, and federal law enforcement agencies, determined that William Bryan Young was a long-time user of controlled substances, had distributed controlled substances while employed as the police chief, and that he had orchestrated the burglary of the Rite Aid pharmacy in Pennington Gap, Virginia to obtain prescription pain killers.
Specifically, the investigation determined that on September 28, 2012, William Bryan Young sent all other Pennington Gap Police Department personnel home to ensure that he would be the only police officer working the night shift. At approximately 2:50 a.m. a burglary of the Rite-Aid pharmacy in Pennington Gap, Virginia occurred. Just prior to the burglary, William Bryan Young, who was on duty at the time, contacted officers with the Lee County Sheriff’s Office to determine their positions relative to the location of the pharmacy. After determining that there were no law enforcement officers in close proximity to the pharmacy, William Bryan Young contacted Kevin Young, Jimmy Johnson and Chris Miles to tell them it was clear for them to break-in to the Rite Aid pharmacy. Kevin Young drove himself, Johnson and Miles to the Rite-Aid. Miles broke into the Rite-Aid pharmacy through the drive-thru window and stole approximately 5,000 oxycodone pills. William Bryan Young later received stolen pills from the pharmacy robbery.
On October 18, 2012, William Bryan Young, in his police department issued uniform, sold twenty oxycodone pills to a confidential informant cooperating with the ATF in their investigation. Shortly thereafter, William Bryan Young was arrested by agents with the ATF at the Lee County Courthouse in Jonesville, Virginia.
William Bryan Young admitted to being an illegal user of controlled substances for a number of years and admitted to distributing twenty Percocet pills earlier that day. William Bryan Young also admitted to distributing twenty Percocet pills the previous day, and to distributing six Percocet pills the previous weekend. A search of William Bryan Young’s police cruiser located the pre-recorded United States currency used by the confidential informant to purchase twenty Percocet pills earlier that day. Agents also located thirteen Percocet pills and one oxicodone pill in the police cruiser.
On October 18, 2012, a search warrant was executed at William Bryan Young’s residence located in Duffield, Virginia by federal agents, the Lee County Sheriff’s Office, and the Virginia State Police. Law enforcement officers found 548 Percocet pills and firearms in the residence. In addition, agents located empty evidence bags from the Pennington Gap Police Department in William Bryan Young’s personal vehicle that appeared to have previously contained controlled substances.
William Bryan Young faces a potential maximum sentence of up to forty years imprisonment and a potential fine of up to $1,250,000. Kevin Young faces a potential maximum sentence of up to twenty years imprisonment and a potential fine of up to $250,000. Chris Miles faces a potential maximum sentence of up to twenty years imprisonment and a potential fine of up to $250,000.
The investigation of the case was conducted by the Lee County Sheriff’s Office, Virginia State Police, Southwest Virginia Drug Task Force, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Drug Enforcement Administration, Federal Bureau of Investigation, and United States Marshals Service. Assistant United States Attorney Zachary Lee is prosecuting the case for the United States.Former Mayor of Melissa, Texas Guilty in Bribery SchemeRead the Press Release
Department of Justice
Office of Public AffairsSHERMAN, Texas – Two Collin County, Texas men, including the former mayor of the city of Melissa, have pleaded guilty in connection with a bribery scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
David E. Dorman, 66, of Melissa, Texas, pleaded guilty to an Information charging him with mail fraud today before U.S. Magistrate Judge Amos Mazzant. John Christie, 65, of Frisco, Texas, pleaded guilty to misprision of a felony on Jan. 4, 2013, before Judge Mazzant.According to information presented in court, in 2007, Dorman, then mayor of the city of Melissa, solicited a $70,000 bribe from Christie in exchange for arranging for the city of Melissa to annex a portion of land from the city of McKinney, Texas, in order for Christie to develop and sell the land to potential customers. Based on a letter from Dorman, the cities of Melissa and McKinney approved the annexation and in exchange, Christie made one $10,000 cash payment and two $10,000 payments by check to Dorman. The men were initially named in an indictment returned by a federal grand jury on Sep. 12, 2012.
Dorman faces up to 20 years in federal prison. Christie faces up to three years in federal prison for his role in the scheme. Sentencing dates have not been set.
This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Shamoil T. Shipchandler.
Former Huntington Convenience Store Owner Sentenced to Prison Time for Federal Food Stamp FraudRead the Press Release
All-In-One store was demolished in Huntington’s Fairfield district in December
HUNTINGTON, W.Va. - U.S. Attorney Booth Goodwin announced that a former Huntington convenience store owner was sentenced to six months in federal prison and six months of home confinement followed by three years of supervised release for defrauding the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the Food Stamp Program. Abderahamane Eloirzazi, also known as Abe, 44, of Huntington, was the owner and operator of the All-In-One convenience store formerly located on 9th Avenue in Huntington. The store, once a magnet for crime in Huntington’s Fairfield neighborhood, was demolished in December following the defendant’s conviction.Eloirzazi was required to hand over the property to the City of Huntington as a condition of his plea agreement.
U.S. Attorney Booth Goodwin said, “With this sentencing the book on the All-In-One store is closed. It is up to the community to write a new one.”
From some time prior to June 2010 and continuing until February 2012, Eloirzazi and co-defendants Stephanie Pauley, 35, and Cynthia Gibson, 40, all of Huntington, conspired together and with other known individuals in an illegal scheme to defraud the federal food benefits program. Federal food benefits cards are provided to qualifying low-income households for the purpose of feeding people who otherwise might go hungry. The benefits can only be used to buy food. Eloirzazi and his co-conspirators, however, cheated the program. Card-holders could walk into Eloirzazi’s store and swipe their cards for fake food purchases, pretending to buy food when in fact they were simply transferring money from their food benefits card to Eloirzazi’s account. In exchange, Eloirzazi would compensate them with cash or items like cigarettes or alcoholic beverages, usually offering only 50 to 65 cents for every dollar’s worth of food benefits a card-holder had paid him.
The Court ordered the defendant to pay restitution in the amount of $127,000 to the Department of Agriculture.
The investigation was conducted by the Department of Agriculture, the Huntington Police Department, the West Virginia State Police and the Department of Homeland Security. Assistant United States Attorney Erik Goes handled the prosecution. The sentence was imposed by United States District Judge Robert C. Chambers
Former Head of Major New York Caviar Distributor Sentenced in Manhattan Federal Court and Will Be Deported for Multi-Million Dollar Customs Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York announced that Italian citizen ISIDORO “MARIO” GARBARINO was sentenced today in Manhattan federal court to time served – approximately four months in prison – and will be deported for unlawfully importing more than 100,000 pounds of Russian and Iranian caviar, valued at more than $10 million, into the U.S. between 1984 and 1987. GARBARINO was first arrested on these charges in July 1987, but fled the country in July 1989 while he was free on bail. He remained a fugitive until his arrest by the U.S. Marshals in September 2012, and ultimately pled guilty in November 2012. GARBARINO was sentenced today by U.S. District Judge Kevin Thomas Duffy.
According to the Complaint, the Indictment, GARBARINO’s plea agreement, statements made in court proceedings, and other public documents:
At the time of his arrest in 1987, GARBARINO was the president and owner of the now-defunct Aquamar Gourmet Imports, Inc. (“Aquamar”), a company that supplied luxury food items, including Russian and Iranian caviar, to prominent New York City gourmet stores such as Zabar’s, and to some of the world’s largest air and cruise lines. At that time, certain Russian and Iranian goods that were imported into the U.S., including caviar, were taxed at a high rate—approximately 30 percent.
Between 1984 and 1987, GARBARINO and Aquamar used several schemes to avoid the tariffs, which were administered according to the value of the goods being imported. For example, GARBARINO would significantly understate the weight and value of the caviar he was importing by placing orders for thousands of pounds of caviar—with a wholesale value of hundreds of thousands of dollars—while declaring to the United States Customs Service that he was importing a small fraction of that amount. In another scheme, GARBARINO would arrange for Russian or Iranian caviar to land at John F. Kennedy International Airport in New York, purportedly for immediate exportation to customers overseas. Immediate exports, which were never supposed to leave the airport, were exempt from U.S. tariffs. GARBARINO, however, would secretly substitute much cheaper American caviar for the expensive Russian or Iranian caviar that had just arrived. He would then export the domestic goods, and unlawfully import and sell the foreign caviar to his U.S. customers. In so doing, GARBARINO avoided paying the required tariffs to the United States for the expensive foreign caviar, and defrauded his international customers who were paying full price for the imported caviar, but were instead receiving the cheaper American caviar. Through these schemes, GARBARINO was able to unlawfully import more than 100,000 pounds of Russian and Iranian caviar into the United States with a then-wholesale value in excess of $10 million.
Prior to today’s sentencing and as a condition of his plea agreement with the Government, GARBARINO, 69, paid $3 million in restitution to the U.S. Customs and Border Protection which represents the duties, penalties, and accrued interest owed for the unlawfully imported caviar described above.
Mr. Bharara thanked the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and its predecessor, the U.S. Customs Service, for their assistance in the investigation.
The case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Edward B. Diskant is in charge of the prosecution.
Former Clinic Owner Pleads Guilty to $3.4 Million Medicaid Fraud SchemeRead the Press Release
Fraudster Bought Luxury Vehicles and Jewelry with Stolen Funds
CHARLOTTE, N.C. – A Charlotte man pleaded guilty today for his involvement in a health care fraud scheme that attempted to defraud Medicaid of at least $3.4 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID).
Ronnie Lorenzo Robinson, 36, of Charlotte, pleaded guilty today before U.S. Magistrate Judge David S. Cayer to two counts of health care fraud. At today’s plea hearing, Robinson admitted that from in or about 2007 to in or about 2011, he engaged in a scheme to defraud Medicaid of at least $3.4 million in fraudulent reimbursement payments from false claims submitted to Medicaid. According to filed court documents and statements made in court, Robinson owned and operated Peaceful Alternative Resources, Inc. (PAR), which held itself out as a non-profit provider of mental health and mentoring services and maintained offices in Charlotte, Mooresville and Greensboro, N.C. Robinson and his company defrauded Medicaid by submitting false claims to Medicaid stating that licensed clinicians allegedly employed by PAR had performed services when those clinicians had not. The claimed services, if provided at all, were provided by unlicensed individuals who were not approved by Medicaid to provide such services and, in many instances, the claimed services were not provided at all.
According to filed documents, Robinson and his company misappropriated the Medicaid provider numbers of at least three licensed clinicians who performed some work for PAR. Robinson then used these Medicaid provider numbers to seek reimbursement for services that the licensed clinicians did not perform. Court documents indicate that Robinson obtained Medicaid beneficiary information from other organizations. Although employees associated with PAR sometimes provided services to the Medicaid recipients, these services typically were not provided by licensed professionals and were little more than mentoring services, which Medicaid does not reimburse. Court documents indicate that Robinson attempted to defraud Medicaid of approximately $3.4 million and received approximately $3.1 million in payments.
During the course of the investigation, law enforcement agents seized a 2004 Land Rover Range Rover HSE, a 2007 Chevrolet Suburban, a 2007 Mercedes S550 and a 1 5/8 carat oval ladies diamond ring, purchased with money fraudulently obtained from Medicaid. Agents also seized a classic 1972 Chevrolet Chevelle-Malibu, a 2006 Chrysler 300 and approximately $660,000 in funds in connection with the fraud. Robinson has agreed to forfeit all of these assets as part of his plea.
“This type of blatant abuse of a federally-funded system simply will not be tolerated,” said U.S. Attorney Tompkins. “The money Robinson stole from Medicaid was intended to cover the medical expenses of needy North Carolinians, including children, not to fund the defendant’s penchant for cars and jewelry. My office will continue to hold accountable those who engage in schemes that rip off government health care programs supported by taxpayer dollars.”
“Health care fraud increases costs for everyone and degrades the integrity of our health care system. The FBI is committed to rooting out this type of fraud and holding those accountable who attempt to illegally manipulate the system that so many Americans count on,” said John A. Strong, Special Agent in Charge of the Charlotte Division of the FBI.
“Fraud like this hurts patients who really need care, wastes tax dollars, and drives up health care costs for everyone. Our investigators and attorneys will continue to work with their federal partners to go after health care fraud,” said Attorney General Roy Cooper, who oversees North Carolina’s MID.
At sentencing, Robinson faces a maximum term of 10 years in prison and a $250,000 fine for each count of conviction. In his plea agreement, Robinson has agreed to pay full restitution to Medicaid for any losses resulting from his criminal scheme. The final restitution amount will be determined by the Court at Robinson’s sentencing hearing, which has not been scheduled yet. Robinson remains on bond pending sentencing.
The investigation into Robinson was handled by the FBI and MID. The prosecution was handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Former Bowie Union Trustee Sentenced for Stealing over $379,000 of Labor Union FundsRead the Press Release
Greenbelt, Maryland - U.S. District Judge Roger W. Titus sentenced Ava L. Ramey, age 61, of Bowie, Maryland today to two years in prison followed by three years of supervised release for embezzling at least $379,000 from a labor union. Judge Titus also ordered that Ramey pay restitution and forfeiture of $379,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and District Director Mark Wheeler of the U.S. Department of Labor, Office of Labor - Management Standards.
According to her guilty plea, from December 2005 to October 2009, Ramey served first as an assistant trustee and then a trustee for the United Government Security Officers of America Local 21 based in Bowie, Maryland. During that time, for her personal use, Ramey: wrote more than $80,000 in checks from the union account either to herself or to “cash;” purchased more than $70,000 worth of merchandise with the union debit card; withdrew more than $60,000 from the union account at ATMs; withdrew in person or transferred to her personal account more than $100,000 of union funds; and wrote more than $60,000 in checks from the union account to her family members.
In all, Ramey embezzled a total of at least $379,000 from the union.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked the U.S. Department of Labor, Office of Labor - Management Standards for its work in the investigation and praised Assistant U.S. Attorney Sujit Raman, who prosecuted the case.
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Florida Woman Sentenced for Role in $30 Million Telemarketing Scam That Victimized over 22,000 PeopleRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Erin Todd, 31, of West Palm Beach, Florida was sentenced in federal district court on Friday, January 4, 2013, to 42 months in prison, 5 years supervised release, and ordered to pay a $500 fine and a $100 special assessment fee. Todd was convicted of one count of Conspiracy to Commit Mail and Wire Fraud following a three-day jury trial in September 2012.
The evidence at trial showed that Todd was a low-level telemarketer, referred to as an “opener,” at Creative Vacation Solutions, a timeshare resale telemarketing operation that was based in Palm Beach County, Florida. Todd’s role as an opener was to reach out as an initial contact to timeshare owners and set them up for a string of false representations centered around a promise that Creative Vacation Solutions had a buyer for an owner’s timeshare. Telemarketers, like Todd, then solicited advanced fees of up to several thousand dollars from each victim in purported closing costs that they promised would be refunded to the owner once the closing on the property occurred. Many timeshare owners were falsely told that their closings were scheduled within the next sixty to ninety days. Despite collecting fees from 22,000 victims, these companies did not sell a single timeshare unit. Todd earned only about $5,600 in her five months working as an opener. Additional evidence introduced at sentencing, however, indicated that, after Todd left Creative Vacation Solutions, she and her co-defendant, David Johnson, operated other timeshare resale scams in Florida that targeted some of the same victims as Creative Vacation Solutions. David Johnson pleaded guilty and was sentenced to 3 years in prison on December 14, 2012.
Todd is the nineteenth individual to be sentenced in connection with this Florida-based telemarketing scam operating under the names Universal Marketing Solutions and Creative Vacation Solutions. The scam targeted owners of timeshares throughout the United States and Canada. Todd conspired with Jennifer Kirk, the owner of Universal Marketing Solutions and Creative Vacation Solutions to bilk over 22,000 victims out of $30 million dollars. The scam victimized consumers in all fifty states, the District of Columbia and Puerto Rico, all ten Canadian provinces and the Northwest Territory of Canada. There were at least 54 victims in twenty eight (28) of the thirty eight (38) counties comprising the Southern District of Illinois.
Approximately twenty-nine others have been charged and twenty-three have pleaded guilty in connection with the Creative Vacation Solutions telemarketing scam. The first of whom was Jennifer Kirk, who pleaded guilty to a criminal Information on June 30, 2011. She was sentenced on January 9, 2012, to over 16 years in prison and five years supervised release.
This prosecution follows an investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service, the Florida Attorney General’s Office, the Florida Department of Agriculture and Consumer Services, and the Boynton Beach Florida Police Department. The prosecution of the case was handled by Special Assistant U.S. Attorney Katherine Lewis, Assistant U.S. Attorney Nathan Stump, and Assistant U.S. Attorney Bruce E. Reppert.
EMH Regional Medical Center and North Ohio Heart Center <br /> to Pay U.S. $4.4 Million to Resolve False Claims Act AllegationsRead the Press Release
EMH Regional Medical Center (EMH) has agreed to pay the United States $3,863,857 and North Ohio Heart Center Inc. (NOHC) has agreed to pay the United States $541,870 to settle allegations that they submitted false claims to Medicare, the Justice Department announced today.
EMH is a non-profit community hospital system located in Lorain County, Ohio. During the relevant time period, NOHC was an independent physician group located in Lorain County that practiced at EMH. The settlement resolves allegations that between 2001 and 2006 EMH and NOHC performed unnecessary cardiac procedures on Medicare patients. Specifically, the United States alleged that EMH and NOHC performed angioplasty and stent placement procedures on patients who had heart disease but whose blood vessels were not sufficiently occluded to require the particular procedures at issue.
“Billing Medicare for cardiac procedures that are not necessary or appropriate contributes to the soaring costs of health care and puts patients at risk. The settlement demonstrates the Department of Justice’s efforts both to protect public funds and safeguard Medicare beneficiaries,” said Stuart F. Delery, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Division.
“ Most doctors act responsibly,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “ These few didn't. Patient health and taxpayer dollars have to come before greed.”
This matter was initiated by the filing of a whistleblower complaint under the False Claims Act (FCA). Under the FCA, private citizens can bring suit for false claims on behalf of the United States and receive a share of the recovery obtained by the government. The whistleblower in this matter, Kenny Loughner, was the former manager of EMH’s catheterization and electrophysiology laboratory. As a result of the settlement, Mr. Loughner will receive $660,859 of the United States’ recovery.
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 $10.1 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 $13.8 billion.
The investigation was jointly handled by the U.S. Attorney’s Office for the Northern District of Ohio, the Justice Department’s Civil Division, the Office of the Inspector General of the Department of Health and Human Services Cleveland Field Office and the FBI. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The case is captioned United States ex rel. Loughner v. EMH Regional Medical Center, et al. , Case No. 1:06-cv-2441 (N.D. Oh.)
Delaware Man Sentenced to 97 Months on Fraud and Money Laundering ChargesRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Kyong Ho Kim, age 45, of Newark, Delaware, was sentenced today by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, to 97 months imprisonment and full restitution, after being convicted of wire fraud (18 U.S.C. § 1343), and engaging in monetary transactions in property derived from specified unlawful activity (Money Laundering, 18 U.S.C. § 1957).
The defendant solicited and obtained over US $2.2 million from more than eight victims in Delaware and elsewhere, through a fraudulent foreign currency trading scheme. The defendant represented that he was a successful foreign currency trader and that he would invest his victims’ money in foreign currency markets. Meanwhile, the defendant diverted most of the funds into his personal bank accounts. The defendant continued the fraud over a decade by falsifying bank records and sending victims false financial statements, indicating that their investments had grown through foreign currency trading. The defendant spent the diverted funds on personal items such as a high-end Mercedes, a yacht, and a lease on a waterfront home.
U.S. Attorney Oberly said of the sentence, “Fraud schemes targeting individual investors have a devastating impact on the victims’ financial and emotional well-being. This case should send a clear signal that those who commit fraud by representing themselves as so-called investment advisors will face significant penalties.”
This case was prosecuted by Assistant United States Attorney Lauren M. McEvoy, and was investigated by the Federal Bureau of Investigation.
Convicted Felon Pleads Guilty to Federal Charges in Straw-Buying Scheme to Purchase and Stockpile FirearmsRead the Press Release
PROVIDENCE, R.I. – Peter A. Laporte, 47, of Warwick, a four-time convicted felon who helped orchestrate the straw-purchase of 10 firearms and a significant quantity of ammunition from a federally licensed firearms dealer in Wyoming, R.I., pleaded guilty today in federal court to being a felon in possession of a firearm.
Laporte admitted to the court that he orchestrated the purchases during the summer of 2012, because he wanted to stockpile firearms, ammunition and other supplies in preparation for “doomsday.” Laporte was arrested in August 2012, as he exited the firearms dealer’s business.
Laporte’s guilty plea was announced by United States Attorney Peter F. Neronha; Guy N. Thomas, Special Agent in Charge ATF’s Boston Field Office; Richmond Police Chief Elwood M. Johnson, Jr.; and Warwick Police Chief Colonel Stephen M. McCartney.
At today’s change of plea hearing, Laporte admitted to the court that on July 30, 2012, he accompanied his wife to the firearms dealer and advised her on several purchases of firearms which she made, including four 9mm pistols, a .357 revolver, two semi-automatic assault rifles, a Remington 30-6 rifle, two shotguns and more than 750 rounds of ammunition.
According to information presented to the court, two weeks after ordering the firearms and ammunition, Laporte and his wife returned to the gun shop to pick-up the firearms. Laporte provided a cash payment totaling $6,878.63. He returned to the dealer again on August 22, 2012, to pick-up ammunition that was previously ordered. He was arrested as he exited the business.
Nine of the firearms, 1,000 rounds of assault rifle ammunition and other items were seized by federal agents on August 22, 2012, during an authorized search of a garage and trailer in Warwick rented by Laporte. Court records indicate that a search of Laporte and his wife’s Warwick residence resulted in the seizure of the 10th firearm purchased on July 30 and another rifle.
The case is being prosecuted by Assistant U.S. Attorney Milind M. Shah.
The matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. United States Attorney Peter Neronha acknowledged the assistance of the Richmond and Warwick Police Departments in the investigation of this matter and the arrest of the Laporte.
Contact: 401-709-5357
[email protected]Company and Its President Agree to $5 Million Settlement over Billing for Linguists Sent into War ZonesRead the Press Release
PHILADELPHIA - Worldwide Language Resources, Inc., and its president, Lawrence P. Costa, have agreed to pay $5 million to resolve civil liabilities under the False Claims Act for allegedly providing untested linguists to the United States Department of Defense operating in overseas combat zones and for other military venues. This settlement, announced by U.S. Attorney Zane David Memeger, also resolves allegations that Worldwide which, at the time, was operating in Maine, billed the government for linguist services that were not provided.
The untested linguists were provided under two contracts. A 1999 Contract was a “requirements” contract that obligated the government to fill all of its requirements for linguist services exclusively from Worldwide; the government could not acquire such services from any other entity or person. The 2003 Contract with Worldwide provided for a lower price than that previously provided under the GSA Contract for certain services, and was designed to reduce the costs to the government of acquiring those services. Both the 1999 and 2003 Worldwide contracts included qualification requirements for the proficiency of the linguists supplied by Worldwide pursuant to the delivery orders, including requirements that each linguist take certain proficiency tests and achieve certain test scores in order to be acceptable to work under the contracts.
The government alleges that Worldwide knowingly supplied untested linguists under the
1999 Contract and the 2003 Contract until March 2004, despite its knowledge that both contracts included specific testing requirements. The government alleges that: Worldwide failed to test its linguists; failed to notify any government employee that it was not testing its linguists; continued to supply untested linguists to the government to serve in overseas combat areas and other military venues; and continued to invoice the government for the services of these untested linguists and certify its compliance with the contractual testing requirements. Worldwide did not know if its untested linguists were adequate to the assigned tasks.Without the testing, the government was asked to pay for linguists who were untested in the subject language and/or English who may have had inadequate or no proficiency, potentially obligating the government to pay for a useless “service,” or services which were insufficient to meet the needs of military personnel.
In addition, the government alleges that Worldwide: billed the government for linguist services that were not provided at all; claimed payment for linguists’ services for more than the number of days in the billing period; invoiced the government for services of a linguist who was incapacitated and unable to provide services; invoiced additional man-days that were not worked by any linguists; and invoiced for the services of one linguist twice under two separate delivery orders for work performed only once.
The United States’ investigation included whistleblower allegations brought by former Worldwide employees Brian Remmey and Khalil Nouri, who filed lawsuits on behalf of the United States under the whistleblower provision of the False Claims Act. Remmey and Nouri will share $925,000 from the settlement amount.
Assistant United States Attorneys Susan Dein Bricklin and Viveca D. Parker handled the civil investigation and settlement negotiations. Auditor Dawn Wiggins of the United States Attorney’s Office for the Eastern District of Pennsylvania contributed significantly to both the investigation and negotiation of the government’s claims. The Department of Defense Criminal Investigative Service and Contract Audit Agency, and the Naval Criminal Investigative Service also participated in the investigation.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Closing Attorney Charged with Wire Fraud in Mortgage Loan SchemeRead the Press Release
BIRMINGHAM – Federal prosecutors have charged a Birmingham real estate lawyer with wire fraud in connection with a nearly $1 million mortgage fraud scheme, announced U.S. Attorney Joyce White Vance.
The U.S. Attorney’s Office charged KELVIN LEONARD DAVIS, 41, with four counts of wire fraud for knowingly submitting false mortgage documents and statements to various lenders in order to obtain approval for mortgage loans. At the time of the fraudulent transactions, from October 2007 to January 2012, Davis served as the closing attorney on each of the fraudulent loan transactions.
Davis has agreed to plead guilty to the charges and to forfeit $269,335 to the government as proceeds of the illegal activity.
The charges against Davis were filed in October. Documents in the case were unsealed last week in U.S. District Court.
According to the four-count information charging Davis, and his plea agreement with the government, he carried out his fraud as follows:
Davis submitted false statements with loan documents in order to obtain approval for mortgage loans that would, otherwise, not have been approved. In many instances, Davis, while serving as closing attorney, would use his trust account to provide money to the borrower when a mortgage loan was closing. Davis would recover the money by subtracting the amount he provided from the proceeds he issued to the seller. Davis also would assess the seller a fee, ranging from $1,000 to $6,000, and make checks for the fee payable to Peaceful Valley Homes, a corporation he had formed. Total losses to the various lenders as a result of Davis’ fraud were nearly $1 million.
The maximum sentence for each count is 20 years in prison and a $1 million fine.
The FBI and the Department of Housing and Urban Development, Office of Inspector General, investigated the case, which Assistant U.S. Attorney Robin Mark is prosecuting.
Cando Man Sentenced for Possession of Child PornographyRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on Jan. 7, 2013, Jerry W. Gibson, 46, Cando, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of possession of materials involving the sexual exploitation of minors. Gibson pleaded guilty to the charge on Aug. 22, 2012.
Judge Hovland sentenced Gibson to serve six years and six months in federal prison, to be followed by five years of supervised release. Gibson must register as a sex offender. Gibson was also ordered to pay a $100 special assessment to the Crime Victim’s Fund.
From an unknown time up until Jan. 19, 2012, Gibson possessed images on his home computer which depicted minors engaged in sexually explicit conduct. Gibson admitted using the internet to receive and possess those images.
The case was investigated by the Bureau of Indian Affairs – Turtle Mountain Agency, the Federal Bureau of Investigation and the N.D. Bureau of Criminal Investigation.
This case was brought as a part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Assistant U.S. Attorney Brandi Sasse Russell prosecuted the case.
Cabell County Doctor Sentenced to 2 Years in Prison for Federal Drug CrimeRead the Press Release
Doctor’s prescribing practices connected to numerous deaths; sentence is four times the maximum recommended by federal guidelines
HUNTINGTON, W.Va. –United States Attorney Booth Goodwin today announced that a Cabell County doctor was sentenced to two years in prison for violating federal drug control laws. Dr. Anita Dawson, 55, of Milton, W.Va., previously pleaded guilty in July to aiding and abetting the illegal acquisition of prescription drugs by misrepresentation, fraud, forgery, deception and subterfuge. The sentence is four times the maximum sentence recommended under federal sentencing guidelines, which called for a sentence of zero to six months.
Dawson admitted that from July 2006 until May 21, 2009, she wrote prescriptions for addictive pain medications to an individual identified by the initials E.B. Dawson admitted she prescribed a total of nearly 6,000 pills containing oxycodone and more than 220 pills for the painkiller Endocet. Dawson further admitted that at the time she wrote the prescriptions for E.B., she knew that the patient was seeking pain medication for an addiction and other inappropriate reasons.
Dawson and E.B. entered into a pain management agreement that required the patient to submit to drug tests and pill counts. Despite E.B.’s repeated violations of the pain management agreement, Dawson admitted she continued to prescribe pain medication.
At today’s sentencing hearing, United States District Judge Robert C. Chambers heard from family members of three people killed in 2009 when their vehicle was hit by another vehicle driven by a patient of Dawson’s. The patient was addicted to prescription drugs and was under the influence of prescription medication at the time of the crash. In imposing Dawson’s sentence, Judge Chambers also noted that nine other patients of Dawson’s had died of prescription drug overdoses.
“It’s hard to put into words the devastating impact of this defendant’s crimes,” said U.S. Attorney Goodwin. “My heart goes out to the families who spoke at today’s hearing and to everyone who lost a loved one because of Dr. Dawson. Judge Chambers was right: This woman’s behavior is shocking, and this case should send a message to other doctors who abuse their prescription power.”
“The vast majority of physicians prescribe responsibly,” Goodwin continued, “but even a handful of bad doctors can flood our communities with illegal pills. Every time we put a law-breaking doctor out of business, it’s a big step toward getting this problem under control.”
In sentencing Dawson, Judge Chambers said that doctors who violate prescription laws need to be held accountable for their role in the “horrible problem” of prescription drug abuse. Judge Chambers said he intended the sentence to send a warning to doctors that they will be held accountable for their prescribing practices.
Dawson’s medical license was suspended by the West Virginia Board of Osteopathy in April 2010, on the same day federal and state investigators executed a search warrant at her Milton office. Following the search and the suspension of her medical license, Dawson voluntarily gave up her license permanently.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
The investigation was conducted by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services Office of Inspector General, and the Drug Enforcement Administration, with assistance from the West Virginia State Police and the Cabell County Sheriff’s Office. Assistant United States Attorney Steven Loew handled the prosecution.
Brothers from Espanola Arraigned on Federal Conspiracy and Theft of Postal Property ChargesRead the Press Release
ALBUQUERQUE – This morning, Joseph Torrez, 24, and his brother Ivan Chavez, 18, both of Espanola, N.M., were arraigned on a two-count indictment charging them with conspiracy and theft of postal property offenses. Both men entered not guilty pleas during this morning’s proceedings.
Count 1 of the indictment, which was filed on Dec. 19, 2012, charges Torrez and Chavez with conspiracy to commit theft of postal property. Count 2 charges Torrez alone with theft of postal property. At the time of the offenses alleged in the indictment, Chavez was employed as a contract driver by the U.S. Postal Service in Rio Arriba, County.
The indictment alleges that Chavez conspired with Torrez to stage a robbery at a U.S. Post Office in Rio Arriba County. It further alleges that, during the staged robbery on Nov. 19, 2012, Torrez stole $7,651 in postal remittances from the Post Office. According to the indictment, Chavez reported the staged robbery and falsely claimed that he had been assaulted by the “robber,” when in fact no assault or robbery had been committed and, instead, Torrez committed a theft of postal property with Chavez’s assistance.
U.S. Attorney Kenneth J. Gonzales said that Torrez and Chavez were arrested on a criminal complaint on Nov. 27, 2012, after investigation revealed that the Nov. 19, 2012 robbery of the Fairview Station Post Office in Espanola was staged.
If convicted on the conspiracy charge, Torrez and Chavez each face a maximum penalty of three years of imprisonment. Torrez also faces a maximum penalty of three years of imprisonment if convicted on the theft charge. The two men are released on conditions of release and pretrial services supervision pending trial.
The case was investigated by the U.S. Postal Inspection Service with assistance from the Espanola Police Department and the New Mexico State Police, and is being prosecuted by Assistant U.S. Attorney Norman Cairns.
Boise Man Pleads Guilty to Illegally Possessing FirearmRead the Press Release
BOISE – Devin Edward Montgomery, 33, of Boise, Idaho, pleaded guilty today in United States District Court to a single count information charging him with unlawful possession of a firearm, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, on April 3, 2012, federal search warrants were served on a residence located on Broadway Avenue in Boise, Idaho, which served as the clubhouse for the Slayers gang. The search located a Mossberg 12 gauge shotgun inside a safe. According to the plea agreement, Montgomery admitted that he purchased the firearm on August 18, 2011, from Impact Guns in Boise. Montgomery further admitted that at the time he possessed the firearm, he was an unlawful user of a controlled substance and thereby prohibited under federal law from possessing any firearms. Montgomery has charges pending in state court, including delivery of a controlled substance, recruiting a criminal gang member, grand theft by extortion, and aggravated assault. Montgomery agreed pursuant to the plea agreement to forfeit the shotgun.
The federal charge of unlawful possession of a firearm is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Sentencing is set for March 26, 2013, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Coeur d’Alene.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Boise Police Department.
The case was prosecuted as part of Idaho’s Project Safe Neighborhoods Program, which seeks to reduce gun violence in Idaho.
Biloxi Man Sentenced on Federal Firearms ChargeRead the Press Release
Gulfport, Miss - John Buster Jones, 24, of Biloxi, was sentenced to 41 months in prison followed by three years of supervised release for making a false statement to a firearms dealer to purchase a firearm, U. S. Attorney Gregory K. Davis announced today.
Chief U.S. District Judge Louis Guirola, Jr. also ordered Jones to forfeit one Roman/Cugir, WASR 10 model, 7.62 caliber rifle with two extended magazines and one Glock, model 27, .40 caliber pistol.
This case was part of an undercover operation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Annette Williams.###
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Belleville Man Sentenced for Firearms OffenseRead the Press Release
A Belleville, Illinois, man was sentenced to a prison term in federal district court for possession of a firearm by a convicted felon on January 7, 2013, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Tyler E. Evans, 26, was sentenced in federal district court in East St. Louis to 46 months in prison, 3 years of supervised release, a $100 special assessment, and a fine of $200, following his plea of guilty, on September 24, 2012, to an Indictment charging him with Possession of a Firearm by a Convicted Felon. The weapons he possessed were also ordered forfeited.
Evans was previously convicted June 22, 2010, in St. Clair County, Illinois, of the state felony of Unlawful Possession of a Weapon by a Felon. He was released from prison on parole in April, 2011.
Shortly after his release, on June 9, 2011, law enforcement officers conducted a parole compliance search of Evans’ Belleville residence and found two firearms – a Taurus Rossi .357 caliber revolver, and a Mossberg 12-gauge shotgun. This discovery led to the federal charge for Evans.
The case was investigated by members of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Assistant U.S. Attorney Stephen B. Clark.
Belcourt Man Sentenced for Involuntary ManslaughterRead the Press Release
BISMARCK - U.S. Attorney Timothy Q. Purdon announced that on Jan. 7, 2013, Koleman J. Gourneau, 30, of Belcourt, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of involuntary manslaughter. Gourneau pleaded guilty to the charge on Sept. 24, 2012.
Judge Hovland sentenced Gourneau to four years and nine months in federal prison, to be followed by three years of supervised release. Gourneau was ordered to pay a $100 special assessment to the Crime Vcitim’s Fund.
On Oct. 12, 2011, Gourneau left Betty’s Bar, located west of Belcourt on the Turtle Mountain Indian Reservation, driving his Ford Bronco. At the time, Gourneau was under the influence of intoxicating liquor. Shortly after leaving the bar, Gourneau’s vehicle struck a person, causing significant injuries to her which resulted in her death.
The case was investigated by the Bureau of Indian Affairs - Turtle Mountain Agency, the Federal Bureau of Investigation, the N.D. Bureau of Criminal Investigation and the N.D. Highway Patrol.
Assistant U.S. Attorney Brandi Sasse Russell prosecuted the case.
Batesland Man Sentenced for Assaulting A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Batesland man convicted of Assault on a Federal Officer was sentenced on December 11, 2012, by U.S. District Judge Jeffrey L. Viken. William Morrisette, age 23, was sentenced to 12 months and 1 day of imprisonment and 2 years of supervised release and ordered to pay $100 to the Victim Assistance Fund.
In January 2012, during a traffic stop near Pine Ridge, Morrisette threw cocaine in the face of a tribal police officer who had pulled him over. Morrisette pled guilty on June 19, 2012.
This case was investigated by the Oglala Sioux Tribe Department of Public Safety and the Bureau of Indian Affairs, Office of Justice Services. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Bank Robber Sentenced to 14 Years in PrisonRead the Press Release
Greenbelt, Maryland - U.S. District Judge Peter J. Messitte sentenced Daniel R. McRae, age 55, of Beltsville, Maryland, today to fourteen years in prison followed by three years of supervised release for bank robbery. Judge Messitte also ordered that McRae pay restitution of $8,150.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief Richard McLaughlin of the Laurel Police Department.
According to his guilty plea, on December 14, 2009 McRae entered the Chevy Chase Bank branch at 13600 Baltimore Avenue, Ste. 800, Laurel, Maryland and passed a note to a bank teller indicating that he was robbing the bank. McRae demanded large bills. The teller gave McRae $8,150 and he fled.
McRae’s estranged wife worked for the bank, overseeing 24 branches, including their security. When provided with surveillance photos of the robber, McRae’s wife immediately reported the individual as being McRae. The bank tellers who observed the robbery also identified McRae from a photo line-up.
United States Attorney Rod J. Rosenstein commended the FBI and Laurel Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney James A. Crowell IV, who prosecuted the case.
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Attorney Arrested in Connection with $30 Million Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. – An attorney formerly licensed in New Jersey was arrested this morning in connection with a long-running, large-scale mortgage fraud scheme which caused losses of more than $30 million, U.S. Attorney Paul J. Fishman announced.
Michael Rumore, 54, of Lyndhurst, N.J., is charged by Complaint with conspiracy to commit bank fraud and with money laundering. Rumore and seven other co-conspirators were charged by complaint in September 2012. He made his initial appearance and had a bail hearing this afternoon before U.S. Magistrate Judge Patty Shwartz in Newark.
According to the Complaint:
From September 2006 to May 2008, the Rumore and the other defendants engaged in a long-running, large-scale mortgage fraud conspiracy through a mortgage company called Premier Mortgage Services (“PMS”). The conspirators targeted properties in low-income areas of New Jersey (the “subject properties”). After recruiting “straw buyers,” the defendants used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets, and earned far more income, than they actually did. The defendants then submitted these fraudulent documents as part of mortgage loan applications to financial institutions.
Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties. The defendants then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (“HUD-1s”), which hid the true sources and destinations of the mortgage funds provided by financial institutions. Once the money was entered into accounts they controlled, the defendants shuttled funds among various other accounts, in amounts greater than $10,000 per transaction. In reality, as opposed to the defendants’ false representations and fraudulent documents, the straw buyers had no means of paying the mortgages on the subject properties, and many of the subject properties entered into foreclosure proceedings. In total, the conspirators and others defrauded financial institutions out of more than $30 million.
Rumore, an attorney licensed in the State of New Jersey, served as the settlement agent on mortgage loans brokered by other conspirators – Isaac DePaula, Adilson Silva, and Lester Soto – for various Subject Properties. Rumore used his status as an attorney to further the fraudulent scheme, including by convening closings, receiving funds from lenders, and preparing HUD-1s that purported to reflect the sources and destinations of funds for mortgages on subject properties, when in fact, the HUD-1s were neither true nor accurate. At or following the closings, Rumore disbursed mortgage loan proceeds directly to PMS, Soto, DePaula, and Silva, including amounts not reflected on the HUD-1s. Rumore received a fee for each fraudulent loan in which he participated.
The criminal Complaint charges Rumore with one count of bank fraud conspiracy. If convicted, he faces a maximum potential penalty of 30 years in prison and a fine of $1,000,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge David Velazquez; and special agents of the IRS, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen for the investigation leading to today’s Complaint. Fishman also thanked the Social Security Administration, under the direction of Special Agent in Charge Edward Ryan, for its role in the investigation.The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office General Crimes Unit and Zach Intrater of the Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack nObama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The charge and allegations contained in the Complaint against each defendant are merely accusations, and the defendants are considered innocent unless and until proven guilty.
13-013Rumore, Michael Complaint
Athens Man Pleads Guilty to Stealing Medical Teaching Items from UniversityRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO – Weston Henri Moquin, 28, of Athens, Ohio pleaded guilty in U.S. District Court to one count of interstate transportation of stolen property and one count of theft from a program receiving federal funds in connection with the theft and sale of human bones and plastinated human remains from Ohio University.
Carter Stewart, U.S. Attorney for the Southern District of Ohio and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the plea entered today before Senior U.S. District Judge Peter C. Economus.
According to court documents, Moquin worked at Ohio University’s Heritage College of Osteopathic Medicine and stole materials used as teaching aids between July 2011 and June 2012. The materials included loose human bones, skulls, skeletons, plastinated human remains, autopsy saws and other materials that had been purchased by the university. Moquin sold the items primarily through his eBay account. Most of the stolen goods were shipped to customers in California, Utah and Oregon. Moquin received a total of $84,683.85 for the items.
Each crime carries a maximum penalty of ten years imprisonment, followed by three years of supervised release. Judge Economus will determine the sentence following a pre-sentence investigation by the court. The plea agreement also calls for Moquin to pay restitution to the university.
U.S. Attorney Stewart commended the investigation by the FBI as well as Assistant U.S. Attorney Deborah A. Solove who prosecuted the case.
Alton Resident Sentenced for Illegally Possessing A FirearmRead the Press Release
Edwin Stewart, a 35-year old Alton, Illinois, resident, was sentenced today in United States District Court to 57 months in prison for illegally possessing a firearm, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois.
In September, 2012, Stewart pled guilty to being a convicted felon who had knowingly possessed a New England Firearms, .22 L.R. caliber revolver, on or about August 8, 2011.
Having considered the facts and circumstances surrounding Stewart’s conviction and his criminal history, which was extensive, the Court chose the 57-month sentence. There is no parole in the federal prison system. In addition to the prison sentence, Stewart will serve 3-years of supervised release. United States Attorney Stephen R. Wigginton noted that, “My office remains committed to prosecuting criminals who illegally possess firearms. A sentence like this one sends a strong message.”
The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Alton Police Department investigated this case, which was prosecuted by Assistant United States Attorney Monica A. Stump.
Albuquerque Man to Serve 200 Months in Prison for Federal Methamphetamine Trafficking and Firearms ConvictionRead the Press Release
ALBUQUERQUE – Last week, a federal judge sentenced David Deloss Washburn, 31, of Albuquerque, N.M., to a 200-month term of imprisonment to be followed by five years of supervised release for his conviction on methamphetamine trafficking and firearms charges. Washburn’s sentence was announced by U.S. Attorney Kenneth J. Gonzales and Thomas G. Atteberry, Special Agent in Charge of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Washburn was charged with possession of methamphetamine and Ecstasy with intent to distribute; carrying a firearm in relation to a drug trafficking crime; and being a felon in possession of a firearm in an indictment that was filed under seal on Aug. 25, 2010. The indictment alleged that, on May 7, 2010, Washburn possessed distribution amounts of methamphetamine and Ecstasy in Bernalillo County, N.M. It also alleged that, on that same date, Washburn carried a firearm in relation to a drug trafficking crime. On May 7, 2010, Washburn was prohibited from possessing firearms and ammunition because he previously had been convicted of the following felony offenses in the Second Judicial District Court for the State of New Mexico: (1) aggravated fleeing from a law enforcement officer, (2) possession of methamphetamine; and (3) auto burglary.
On Feb. 10, 2011, Washburn was indicted in a separate case and charged with being a felon in possession of a firearm and possession of a firearm with an obliterated serial number. The second indictment alleged that Washburn possessed a firearm with an obliterated serial number in Bernalillo County on Dec. 14, 2010.
The first indictment was unsealed on Feb. 22, 2011, when Washburn was transferred from state custody to federal custody. Washburn has been in federal custody since that time.
On March 14, 2012, Washburn pled guilty to the methamphetamine trafficking and firearms charges in the first indictment and the felon in possession charge in the second indictment under a plea agreement with the U.S. Attorney’s Office.
At his sentencing hearing on Jan. 3, 2013, Washburn was sentenced to 140 months of imprisonment for the methamphetamine trafficking conviction to be followed by a consecutive 60 months of imprisonment for carrying a firearm in relation to a drug trafficking crime, for a total of 200 months of imprisonment. Washburn also was sentenced to 10 years of imprisonment for being a felon in possession, which is to run concurrent to his 200 month prison sentence.
The case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Albuquerque Police Department and the Bernalillo County Sheriff’s Office with assistance from the District Attorney’s Office for the Second Judicial District, and was prosecuted by Assistant U.S. Attorney Linda J. Mott.
The case against Washburn was brought as part of a federal anti-violence initiative that targets Dthe worst of the worstD offenders for federal prosecution under the federal firearms and narcotics laws. Under the initiative, a state-wide, multi-agency effort denominated as the New Mexico Federal Gang Task Force, the U.S. AttorneyDs Office and federal law enforcement agencies work with New MexicoDs District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from our communities for as long as possible.
19 ½ Years in Prison for Man Who Produced Child Porn Images for Rent MoneyRead the Press Release
Springfield, Ill. – U.S. District Judge Sue E. Myerscough today sentenced Anthony L. Ferguson, 25, to serve 235 months (19 years, 7 months) in federal prison and to remain on supervised release for life following his release from prison. Ferguson has been detained in the custody of the U.S. Marshals Service since his arrest in March 2012, along with co-defendant Laura J. Sigler, 26.
In July 2012, Ferguson entered an open plea of guilty to using a five-year-old child to produce child pornography in November 2011, when Ferguson and Sigler were living at the Budget Inn in Lincoln, Ill. According to court documents, Ferguson and Sigler used the images of child pornography to secure rent money. On Dec. 6, 2012, Sigler pled guilty to the offense. Sentencing for Sigler is scheduled on Apr. 15, 2013.
The case was investigated by ICE’s Homeland Security Investigations and the Lincoln Police Department. Assistant U.S. Attorney Timothy A. Bass prosecuted the case on behalf of the government.
The case was prosecuted under 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 U.S. 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.
6 January 2013
New York Man Pleads Guilty to Money Laundering Charge Stemming from Oxycodone InvestigationRead the Press Release
February 6, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that EMMANUEL BABE, also known as “Manny,” 39, of Mount Kisco, N.Y., pleaded guilty today before United States District Judge Janet C. Hall in New Haven to one count of conspiracy to commit money laundering.
This matter stems from “Operation Blue Coast,” an investigation headed by the Drug Enforcement Administration’s Bridgeport High Intensity Drug Trafficking Area Task Force into the large-scale trafficking of oxycodone pills from Florida to Connecticut. The investigation revealed that an individual regularly purchased oxycodone from suppliers in Florida, transported the oxycodone to Connecticut by commercial airline or automobile, and sold the pills for profit to various Connecticut-based narcotics dealers. He then transported the proceeds of his oxycodone sales from Connecticut to Florida, either by having a courier drive the money or by using commercial airline flights.
In early 2011, the Florida narcotics trafficker hired BABE to drive large amounts of U.S. currency from New York or Connecticut to Florida. BABE eventually learned that the money he was transporting were the proceeds of the narcotics trafficker’s oxycodone sales in Connecticut. BABE, who was paid approximately $750 for each trip, transported at least $150,000 in cash to Florida in an effort to disguise the source of the funds.
BABE has been detained since his arrest on September 13, 2011.
Judge Hall has scheduled sentencing for May 1, 2013, at which time BABE faces a maximum term of imprisonment of 20 years.
Twenty individuals, including two law enforcement officers and three Transportation Security Agency officers, have been charged as a result of this investigation.
This matter is being investigated by the Drug Enforcement Administration’s Bridgeport High Intensity Drug Trafficking Area Task Force, which includes personnel from the Connecticut State Police and the Bridgeport, Milford, Norwalk, Stamford and Westport Police Departments; the Drug Enforcement Administration in Florida and the U.S. Department of Homeland Security Office of Inspector General. In addition, the U.S. Marshals Service and the Greenwich, Monroe, Danbury and Waterbury Police Departments have assisted the investigation.
U.S. Attorney Fein also acknowledged the cooperation of the Westchester County Department of Public Safety and the Florida Highway Patrol, and the substantial assistance provided by the United States Attorney’s Office for the Southern District of Florida.
This case is being prosecuted in the District of Connecticut by Assistant United States Attorneys Rahul Kale and Tracy Lee Dayton.
PUBLIC AFFAIRS CONTACT:
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Tom Carson
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5 January 2013
Lucas Wyman Mulvaugh Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on January 3, 2013, before U.S. District Judge Dana L. Christensen, LUCAS WYMAN MULVAUGH, a 35-year-old resident of Belgrade, appeared for sentencing. MULVAUGH was sentenced to a term of:
Prison: 45 days
Special Assessment: $100
Forfeiture: $50,000
Supervised Release: 3 years
MULVAUGH was sentenced in connection with his guilty plea to conspiracy to maintain 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:
From approximately March 2009 until March 14, 2011, Randy Leibenguth, Stephanie Leibenguth, and MULVAUGH manufactured and distributed marijuana in the Bozeman/Belgrade area. The Leibenguths owned and operated Montana Cannabis Ministry/Montanans Cultivating Medicine (MCM). MULVAUGH owned and operated Outlaw Hill Health Institute (OHHI).
On March 14, 2011, law enforcement seized 539 marijuana plants from the Leibenguths at the MCM location and 892 marijuana plants from MULVAUGH at the OHHI location.
According to a man who worked for MULVAUGH on March 14, 2011, MULVAUGH and Randy Leibenguth were "business partners" until February 2011. In February 2011, MULVAUGH and Leibenguth were in a business dispute that ended their relationship.
According to X.X., X.X. purchased over $300,000 worth of marijuana from Randy Leibenguth. This was corroborated by bank records. X.X. purchased most of the marijuana from Randy Leibenguth, but also made purchases from Stephanie Leibenguth and MULVAUGH. Some purchases were at the storefront at the MCM location and a couple of purchases were from MULVAUGH at the OHHI location.
Testimony and documents generated by the conspiracy would have shown that the conspiracy involved the manufacture of at least 1,000 marijuana plants and at least 100 kilograms of a substance containing a detectable amount of marijuana during the above time frame.
Randy Leibenguth and Stephanie Leibenguth pled guilty to federal charges and are awaiting sentencing.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that ? will likely serve all of the time imposed by the court. In the federal system, ? does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Drug Enforcement Administration, the Montana Division of Criminal Investigation, the Missouri River Drug Task Force, the Federal Bureau of Investigation, the Environmental Protection Agency - Criminal Investigation Division, and the Laurel Police Department.
Crystal Gretchen Nomee 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 January 3, 2013, before Chief U.S. District Judge Richard F. Cebull, CRYSTAL GRETCHEN NOMEE, a 34-year-old resident of Lodge Grass, appeared for sentencing. NOMEE was sentenced to a term of:
Prison: 37 months
Special Assessment: $100
Supervised Release: 5 years
NOMEE was sentenced in connection with her guilty plea to conspiracy to possess with the intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Marcia K. Hurd, the government stated it would have proved at trial the following:
Leroy "Bucky" Smith came to the attention of law enforcement in approximately 2007 in Big Horn County and on the Crow and Northern Cheyenne reservations as it was common knowledge that he was a distributor of methamphetamine believed to be getting his supply from Billings. One individual gave law enforcement information about methamphetamine dealings with Smith from 2008 through June of 2010. Several confidential informants also provided information on Smith's distribution of methamphetamine, from 2007 to the present, as well as their further distribution of that methamphetamine.
During the investigation, law enforcement learned that NOMEE was one of the people who purchased methamphetamine for resale to customers in the area, as well as for her own personal use from approximately 2010 through October 2011. Law enforcement also received specific information that Smith was dealing with NOMEE.
On October 13, 2011, the two met at a parking lot in Hardin where Smith sold her 3.5 grams of methamphetamine. She was stopped a short time later and the drugs recovered. When questioned, NOMEE admitted her role within the conspiracy and admitted that she had a methamphetamine problem.
Smith pled guilty to federal charges and has been sentenced.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that NOMEE will likely serve all of the time imposed by the court. In the federal system, NOMEE does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Montana Division of Criminal Investigation, the Drug Enforcement Administration, and the Bureau of Indian Affairs.
Christopher Wentlein 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 January 4, 2013, before Chief U.S. District Judge Richard F. Cebull, CHRISTOPHER WENTLEIN, a 33-year-old resident of Billings, appeared for sentencing. WENTLEIN was sentenced to a term of:
Prison: 84 months
Special Assessment: $100
Supervised Release: 5 years
WENTLEIN was sentenced in connection with his guilty plea to conspiracy to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Lori Harper Suek, the government stated it would have proved at trial the following:
On November 4, 2011, the drug task force in Billings conducted a controlled buy of methamphetamine from WENTLEIN using a confidential informant (CI). The CI bought .6 grams of meth for $30. Later on that same day, WENTLEIN was stopped and consented to a search of his car and house. The searches netted cash ($1,887) and methamphetamine (8.4 grams), as well as a marijuana pipe, marijuana, a digital scale, a gun, and ammunition. After the search, WENTLEIN identified his source as X.X. and agreed to cooperate.
On November 8, 2011, the task force bought two ounces of meth from X.X. using WENTLEIN as a CI. In an interview of WENTLEIN after the purchase, WENTLEIN admitted that he had bought approximately 30 ounces from X.X. over a period of six months. He admitted that he got the gun that was seized during the search of his car by trading meth for it.
Again, on December 30, 2011, the task force used WENTLEIN to buy one ounce of meth from X.X. The transaction took place at X.X.'s house. After the transaction, the task force obtained a search warrant for the house.
On January 2, 2012, X.X. was stopped on the interstate. X.X. agreed to talk with law enforcement and admitted that he was selling meth in Billings for approximately a year, and that he had been traveling to Denver to pick up meth for about 7 months. He admitted to getting 20-30 pounds of meth from his Denver source and selling it in Billings. X.X. admitted that he had traveled to Denver the previous week and bought 5 pounds of meth, which was in his bedroom.
Law enforcement seized approximately 5 pounds of meth during the search of X.X.'s house, as well as some guns, scales, cash, and drug paraphernalia. X.X.'s truck was searched on January 4, 2012, and some meth, cocaine, and drug paraphernalia were found.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that WENTLEIN will likely serve all of the time imposed by the court. In the federal system, WENTLEIN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the High Intensity Drug Trafficking Area (HIDTA) Task Force.
Avatar Marvinjo Springfield 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 January 4, 2013, before Chief U.S. District Judge Richard F. Cebull, AVATAR MARVINJO SPRINGFIELD, a 25-year-old resident of Lodge Grass and an enrolled member of the Crow Tribe of Indians, appeared for sentencing. SPRINGFIELD was sentenced to a term of:
Prison: 9 months
Special Assessment: $25
Supervised Release: 1 year
SPRINGFIELD was sentenced in connection with his guilty plea to simple assault of person under the age of 16 years.
In an Offer of Proof filed by Assistant U.S. Attorney E. Vincent Carroll, the government stated it would have proved at trial the following:
On January 25, 2012, SPRINGFIELD, one of his friends, and the victim, who was 14-years-old at the time of the offense, were all drinking in a fifth-wheel trailer parked at a residence in Lodge Grass. According to the victim, she went into a back bedroom of the camper while SPRINGFIELD and his friend continued to drink in the front of the trailer. She then came back to the front of the trailer where SPRINGFIELD and his friend were, and she "blacked out." (The victim later told agents that on a scale of 1 to 10 - with 1 being sober and 10 being extremely drunk - she was a "10."). The next thing she remembered is "coming to" and SPRINGFIELD was hitting her in the face. The victim then went to her grandmother's where she spent the night. The victim was later taken to the hospital and treated for her injuries.
SPRINGFIELD was interviewed by law enforcement officers and stated that he was drinking with his friend and the victim in the fifth-wheel trailer. At one point, the friend saw the victim's mother driving around looking for the victim. SPRINGFIELD indicated that he told the victim to leave because he did not want any trouble from the victim's mother for drinking with the victim. When the victim refused to leave, SPRINGFIELD claimed that he and his friend attempted to leave, and the victim came at him and hit him in the back of the head. SPRINGFIELD explained that he then "spun around and hit [the victim] once" in the nose by "backhand[ing]" her.
The treating physician stated that the victim's injuries did not qualify as "serious bodily injury," but that the injuries did constitute "substantial bodily injury," because they involve: (A) a temporary but substantial disfigurement; and (B) a temporary but substantial loss or impairment of the function of any bodily member, organ or mental faculty.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that SPRINGFIELD will likely serve all of the time imposed by the court. In the federal system, SPRINGFIELD does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation and Bureau of Indian Affairs.
4 January 2013
Yates Petroleum Pays $416,000 to Resolve Allegations It Violated the False Claims ActRead the Press Release
DENVER – John Walsh, the United States Attorney for the District of Colorado, today announced that Yates Petroleum Corporation has paid $416,000.00 to resolve allegations that the company submitted false statements about the royalties the company owed for natural gas removed from federal leases in Wyoming.
According to the terms of the settlement, the United States contends that Yates made false statements to the Department of the Interior concerning the volume of natural gas that Yates produced from twelve leases in the Powder River Basin in Wyoming. Specifically, Yates used gas measurement devices that did not meet the gas measurement standards of the Bureau of Land Management (BLM) and were unapproved for field use. On January 20, 2009, the Buffalo Field Office of the BLM issued an Order stating that the measurement devices – also known as 1” V-Cone Meters – were not approved for use on federal leases. Yates submitted compliance plans indicating that the company would comply with the BLM’s Order.
However, Yates continued to use 1” V-Cone Meters. From May 2009, to and until April 2012, Yates used the unapproved gas meters to measure gas produced from twelve leases and may have under-reported the volume of gas collected from and the royalties owed to the United States.
“When companies lease federal lands for oil and natural gas production they must accurately measure the oil and gas that they take from federal lands and pay the American taxpayer appropriately,” said United States Attorney John Walsh. “Companies face stiff penalties if they break the rules and fail to accurately measure the natural resources removed from federal lands.”
“This settlement demonstrates the benefits of the Office of Natural Resources Revenue’s (ONRR’s) continuing efforts to further strengthen its enforcement program to ensure that energy companies report and pay all the royalties that are due to the American public,” said Paul A. Mussenden, DOI’s Deputy Assistant Secretary for Natural Resources Revenue Management. “We will continue to pursue those companies who under report production and under pay their royalties to make certain that American taxpayer assets are protected.”
“This settlement, the result of collaboration and cooperation between the OIG, DOJ, ONRR and BLM, should send a clear message to deter companies from engaging in fraudulent and noncompliant activities,” said Mary Kendall, Deputy Inspector General for the Department of the Interior.
“This is a good example of how BLM Wyoming takes seriously our regulatory duties on behalf of the American public,” said Don Simpson, BLM Wyoming State Director.
The United States Attorney’s Office thanks the Department of the Interior, Office of the Inspector General, the Bureau of Land Management and the Office of Natural Resources Revenue (ONRR) for the hard work and cooperation that made this recovery possible. The claims settled by this agreement are allegations only. There has been no determination of liability.
Assistant United States Attorney J. Chris Larson handled this matter for the United States Attorney’s Office.
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United States Attorney Edward L. Stanton III Names Larry Laurenzi as Civil Rights Unit ChiefRead the Press Release
Memphis, TN – Edward L. Stanton III, United States Attorney for the Western District of Tennessee, has named veteran federal prosecutor and former acting United States Attorney Laurence J. Laurenzi as Civil Rights Unit Chief.
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U.S. Attorney Stanton created the dedicated Civil Rights Unit in February 2011, in order to enhance the ability of the U.S. Attorney’s Office to enforce federal civil rights laws in the Western District of Tennessee. The Civil Rights Unit prosecutes the full spectrum of federal civil rights crimes, including official misconduct, law enforcement corruption, human trafficking, and hate crimes. In addition, fair housing, fair lending, Americans with Disability Act, and Uniform Services Employment and Re-employment Rights Act cases continue to remain a priority of the district. The Civil Rights Unit has received national acclaim for its dedicated efforts, including prominent recognition from U.S. Attorney General Eric Holder and the Department of Justice for its distinguished work in combatting human and sex trafficking.
Mr. Laurenzi is a career federal prosecutor and has handled a wide range of civil rights cases. He will serve as Unit Chief in addition to continuing his present duties as Executive Assistant United States Attorney. As Unit Chief, Mr. Laurenzi will lead the implementation of the Unit’s strategic priorities and manage relationships with key federal, state, and local law enforcement partners and community stakeholders.
“Larry Laurenzi has an esteemed track record of service to the Department of Justice and the Western District of Tennessee,” said United States Attorney Edward L. Stanton III. “I am confident that under his capable leadership, this District’s Civil Rights Unit will continue to work diligently to ensure that all Americans enjoy the rights and freedoms the Constitution guarantees them.”
Assistant United States Attorneys Brian Coleman and Jonathan Skrmetti, who have served in the Unit since its creation, will continue to complement the team.
Former Unit Chief Steve Parker has been assigned to a U.S. Department of Justice detail in New Orleans, Louisiana.U.S. Soldier Sentenced in Texas to 18 Months in Prison for His Role in Fraudulent Military Recruiting Referral Bonus SchemeRead the Press Release
WASHINGTON ? A member of the U.S. military was sentenced today to serve 18 months in prison for his participation in a conspiracy to obtain approximately $244,000 in fraudulent recruiting referral bonuses from various U.S. military components and their contractor, announced Assistant Attorney General Lanny A. Breuer of the Justice Department?s Criminal Division.
U.S. Army Specialist Richard Garcia, 29, of Kirby, Texas, was sentenced today by Chief U.S. District Judge Fred Biery in the Western District of Texas. In addition to his prison term, Judge Biery sentenced Garcia to serve three years of supervised release and ordered Garcia to pay $244,000 in restitution, jointly and severally with co-conspirators.
On July 26, 2012, Garcia pleaded guilty to one count of conspiracy to commit wire fraud.
According to court documents, Garcia enlisted in the U.S. Army in approximately November 2005.
According to court documents, between 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. (Docupak) to administer recruiting bonus programs designed to offer monetary incentives to soldiers who referred others to join the U.S. military. In addition, the Army managed its own recruiting bonus programs, which offered bonuses to soldiers who referred other individuals to join the Army or the Army Reserves after registering online as recruiting assistants (RA) or sponsors. Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he referred to serve in the U.S. military.
Garcia admitted that he participated in a fraud scheme whereby active duty and civilian contract recruiters provided RAs and sponsors with the names and Social Security numbers of ?walk-in? soldiers ? or persons who decided to join the military without being referred by anyone. Using this information, the RAs and sponsors claimed credit for referring these potential soldiers to join the military, when in fact they did not refer them. As part of the fraud scheme, the RAs and sponsors split the bonus payments with the recruiters and others who provided the potential soldiers? personal identifying information.
According to court documents, Garcia and his co-conspirators received at least $244,000 in fraudulent recruiting referral bonuses in total. Garcia and a co-conspirator personally received a total of approximately $13,000 in fraudulent recruiting referral bonuses by using Garcia?s RA account to claim that Garcia was responsible for referring certain potential soldiers to the U.S. Army, when in fact he had not referred those soldiers.
This case arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses. To date, 10 individuals have been charged, all of whom have pleaded guilty. The investigation is ongoing.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter and Sean F. Mulryne of the Criminal Division?s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Division.
U.S. Announces Clean Air Act Settlement with Wisconsin UtilityRead the Press Release
WASHINGTON – The Wisconsin Public Service Corporation (WPS) will invest approximately $300 million in pollution control technology, pay a civil penalty of $1.2 million, and spend $6 million on environmental mitigation projects to resolve violations of the Clean Air Act (CAA), according to the terms of a settlement with the United States, announced today by the Department of Justice and the U.S. Environmental Protection Agency (EPA).
“This settlement will eliminate thousands of tons of harmful air pollution each year, thus improving air quality in Wisconsin and downwind areas,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The agreement, which requires WPS to reduce emissions from both of its coal-fired power plants in Wisconsin, demonstrates the Justice Department’s continuing efforts, along with EPA, to bring large sources of air pollution into compliance with the Clean Air Act.”“EPA is committed to protecting communities from the pollution problems that matter most, including reducing air pollution from the largest sources of emissions,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “The pollution reductions and the significant investment in local environmental projects under this agreement will ensure that the people of Wisconsin and neighboring states have cleaner, healthier air.”
“This resolution of the Clean Air Act claims against WPS not only ensures that the damage to our environment from past, excessive emissions will be addressed but that residents throughout the region will benefit from the latest technology, resulting in significant future reductions in air pollutants,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “The Justice Department and the EPA are strongly committed to promote innovative, alternative, and renewable sources of energy that also ensure that our next generations will breathe air that does not compromise their health. Today’s settlement promotes both goals—and accomplishes environmental justice for all Americans.”
The settlement, which covers the utility’s two power plants – the Pulliam plant in Green Bay, Wis., and the Weston plant in Rothschild, Wis. – requires WPS to install new pollution control technology on one of its largest units, to continuously operate the new and existing pollution controls, and to comply with stringent emission rates and annual tonnage limitations. The settlement also requires WPS to permanently retire, refuel or repower four additional coal-fired units at the Pulliam and Weston plants. The actions taken by WPS to comply with this settlement will result in annual reductions of sulfur dioxide (SO2), nitrogen oxides (NOx), and particulate matter emissions by approximately 15,000 tons from 2010 levels. This settlement covers all eight coal-fired boilers at WPS’s two power plants.
WPS will also spend $6 million on projects that will benefit the environment and human health in communities located near the WPS facilities. WPS must pay $250,000 each to the U.S. Forest Service and the National Park Service, to be used on projects to address the damage done from WPS’s alleged excess air emissions. Up to $4 million will be spent on a renewable energy resource enhancement project, up to $1.2 million on a wood stove change-out project, and up to $300,000 on a community digester project to convert food and/or animal waste to biogas or electricity. WPA may also fund a compressed natural gas or hybrid fleet conversion project, or a solar panel installation project.
Reducing air pollution from the largest sources of emissions, including coal-fired power plants, is one of EPA’s National Enforcement Initiatives for 2011-2013. SO2 and NOx, two key pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. These pollutants are converted in the air to fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. Reducing these harmful air pollutants will benefit the communities located near WPS facilities, particularly communities disproportionately impacted by environmental risks and vulnerable populations, including children. Because air pollution from power plants can travel significant distances downwind, this settlement will also reduce air pollution outside of the immediate region.This is the 25th settlement secured as part of EPA’s national enforcement initiative to control harmful emissions from power plants under the Clean Air Act’s New Source Review requirements. The total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed 2 million tons each year once all the required pollution controls have been installed and implemented.
The settlement was lodged in the U.S. District Court for the Eastern District of Wisconsin, and is subject to a 30-day public comment period and final court approval. It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html.
More information about the settlement: www.epa.gov/enforcement/air/cases/wps.html
More information about EPA’s enforcement initiative: www.epa.gov/compliance/data/planning/initiatives/2011airpollution.html
Two More Sentenced in Cuyahoga County Corruption CaseRead the Press Release
A former Cuyahoga County employee and another man were sentenced to prison after previously pleading guilty to racketeering, law enforcement officials said.
Former Deputy Cuyahoga County Auditor Samir Mohammad was sentenced to nearly four years in prison. He pleaded guilty last year to racketeering, conspiracy to commit bribery concerning programs receiving federal funds, Hobbs Act conspiracy, witness tampering and making false statements.
Hamdi “Sam” Qasem was sentenced to four months detention to be followed by four months home detention.
Both men admitted last year to trading things of value with public officials in exchange for favorable personnel decisions, according to court records.
Former Cuyahoga County Auditor Frank Russo and others did cause the county to hire designees of Mohammad and Qasem, including members of the same social organization to which they belonged, in return for Russo and others receiving things of value, according to court records.
Mohammad also used an intermediary to offer and give things of value to former Cuyahoga County Commissioner Jimmy Dimora in return for favorable personnel decisions, according to court documents.
Mohammad, along with Russo, Kevin Payne and J. Kevin Kelley, also used their influence to secure the participation of Broma Information Technology, an IT consulting firm, in a large county project, in return for cash kickbacks. Mohammad received a portion of those cash payments, which he, in turn, delivered to Russo, according to court documents.
The case was prosecuted by Assistant United States Attorneys Henry F. DeBaggis and Justin J. Roberts following an investigation by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigation.
Two Individuals Arrested for Conspiracy to Possess with Intent to Distribute CocaineRead the Press Release
SAN JUAN, P.R. – On January 2, 2013, United States Magistrate Judge Sylvia Carreño-Coll authorized a criminal complaint against Jose De Leon and Wilson Consencion for conspiracy to possess with the intent to distribute controlled substances onboard a vessel subject to the jurisdiction of the United States, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. United States Coast Guard (USCG) and Caribbean Border Interagency Group (CBIG) law enforcement authorities, working in support of the Caribbean Corridor Strike Force (CCSF), arrested the two smugglers, seized a go-fast vessel and a 40-bale shipment of cocaine in waters south of Puerto Rico on Sunday, December 30, 2012. The drug shipment was estimated to have a street value of over $29 million dollars.
The defendants, knowingly and intentionally combined, conspired, confederated and agreed together and with each other, and with other persons known and unknown, to commit the following offense against the United States: to possess with the intent to distribute five kilograms or more of a mixture or substance containing a detectable amount of cocaine, on board a vessel subject to the jurisdiction of the United States, that is, a vessel without nationality as defined by Title 46, United States Code, Section 70502(c)(A). The District of Puerto Rico was the first point where the defendants entered the United States after the commission of the offense.
“This is another example of the success of the Caribbean Corridor Strike Force Initiative,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “We will continue maximizing all of our combined resources to investigate and prosecute those who in flagrant disregard of our laws try to smuggle illegal contraband into our jurisdiction.”
“This is the third major cocaine shipment this Holiday season in the Sector San Juan area of responsibility in which the Coast Guard and Caribbean regional law enforcement partners have collectively detained a total of three vessels, six smugglers and kept over 4,847 pounds of cocaine from reaching criminal hands,” said Coast Guard Capt. Drew Pearson, Sector San Juan Commander. “Our efforts to stem the flow of drugs into Puerto Rico and the Virgin Islands as far off shore as possible is unwavering and will reduce crime across the region.”
The case is being prosecuted by Special Assistant United States Attorney Kelley Tiffany. If convicted the defendants could face up to life in prison. Criminal complaints contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
In July 2006, CBIG was formally created to unify efforts of the U.S. Customs and Border Protection, the U.S. Coast Guard (USCG), Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the United States Attorney‘s Office for the District of Puerto Rico, and Puerto Rico Police Joint Forces of Rapid action (FURA) in their common goal of securing the borders of Puerto Rico and the U.S. Virgin Islands against illegal migrant and drug smuggling.
CCSF is an initiative of the U.S. Attorney's Office created to disrupt and dismantle major drug trafficking organizations operating in the Caribbean. CCSF is part of the High Intensity Drug Trafficking Area (HIDTA) and Organized Crime Drug Enforcement Task Force (OCDETF) that investigates South American-based drug trafficking organizations responsible for the movement of multi-kilogram quantities of narcotics using the Caribbean as a transshipment point for further distribution to the United States. The initiative is composed of ICE-HSI, the U.S. Attorney for the District of Puerto Rico, DEA, FBI, the Coast Guard, CBP and PRPD's Joint Forces for Rapid Action.
Tips from Members of the Public Lead to Arrest of Woman Charged as ‘Jane Doe’ in Federal Child Pornography Production CaseRead the Press Release
LOS ANGELES – Within hours of federal authorities appealing to the public for help in a child pornography case with ties to the Los Angeles area, a woman charged as “Jane Doe” has been arrested outside her apartment complex in the San Fernando Valley.
Letha Mae Montemayor, 52, was taken into custody without incident at approximately 7:30 p.m. Thursday by special agents with ICE Homeland Security Investigations (HSI) and officers from the Los Angeles Police Department. Montemayor was identified by both her facial appearance and distinctive tattoos.
Montemayor was arrested less than 10 hours after the United States Attorney and officials with HSI announced the filing of a criminal case and released photographs of an unidentified man and woman – who at the time were known only as “Jane Doe” and “John Doe” – involved in a child sexual exploitation case (see: http://www.justice.gov/usao/cac/Pressroom/2013/001.html).
At approximately 2 p.m. Thursday, authorities received the first tip via a call to the ICE Tip Line regarding the possible identity of “Jane Doe.” After this initial phone call, several corroborating leads were provided by members of the public. After further investigation, HSI special agents determined that Montemayor was the likely suspect. She was placed under surveillance and subsequently arrested.
“This significant development brings us one step closer to vindicating the victim and helping to regain some dignity for all victims of child exploitation crimes,” said United States Attorney André Birotte Jr. “With the help of the media and concerned members of the public, we were able to quickly identify the woman allegedly involved in this child pornography case. We still want the public’s help in identifying John Doe and the victim in the disturbing series of images that continue to be circulated on the Internet.”
Montemayor is charged as “Jane Doe” in a federal criminal complaint that alleges two counts – one count of conspiracy to produce child pornography and one count of production of child pornography. Each of those two counts carry a mandatory minimum sentence of 15 years in federal prison. Montemayor is expected to make her initial appearance in federal court on Monday afternoon.
The identity and whereabouts of the male suspect in the case, “John Doe,” remain unknown at this time, as does the identity of the victim. Federal authorities emphasized that the investigation is ongoing.
“Just after ICE’s nationwide plea for public assistance, five separate community tips led to the arrest of Jane Doe, said U.S. Immigration and Customs Enforcement (ICE) Director John Morton. “This arrest would not have happened without the public’s help, and it demonstrates how much individual citizens can do to help law enforcement attack crime. The best way to protect innocent children from sex offenders is for law enforcement, educators, parents and concerned citizens to join forces and fight back.”
The criminal complaint alleges that “Jane Doe” – now believed to be Montemayor – was involved in the production of a widely circulated series of child pornography images taken about 11 years ago. Despite extensive investigative efforts, investigators were unable to determine the identity of the male and female in the photographs, which is what prompted the appeal for the public’s assistance. The pictures show an adult man and woman sexually molesting a girl who appears to be about 13. Forensic analysis of the images conducted by the National Center for Missing & Exploited Children (NCMEC) led investigators to conclude they were produced in the Los Angeles area, specifically the San Fernando Valley.
The child pornography images in this case were first discovered in Chicago in 2007. The material was submitted to the Child Victim Identification Program operated by NCMEC, which determined the victim had not yet been identified and was not linked with other known child pornography images.
The search for “John Doe” and the victim in this case continues, and anyone with information or tips that can assist in the investigation is encouraged to call 866-347-2423 or visit www.ICE.gov/tips. Both are staffed around the clock by investigators. Tips may be reported anonymously.
Release No. 13-002
Three Individuals Enter Pleas of Guilty in Federal CourtRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA - Three individuals entered pleas of guilty on January
3, 2013, in United States District Court in Wheeling before Judge Frederick P. Stamp, Jr.United States Attorney William J. Ihlenfeld, II, announced that:
JAMIE L. JOYNER, age 35, of Deland, Florida, entered a plea of guilty to “Conspiracy to Distribute Schedule II Controlled Substances” from March of 2012 to September 12, 2012, for his role in Florida to West Virginia pill ring. In a joint investigation, involving the Marshall County Sheriff’s Department, the Moundsville Police Department, the DEA, United State Postal Service, and the West Virginia State Police, beginning in the spring of 2012, agents received information that Millie Roupe’s apartment in Marshall County was being used to distribute pills being brought to West Virginia from Florida typically via rental vehicles. During the investigation, a traffic stop occurred during which $2,096 in drug proceeds was seized which will be forfeited to the United States as proceeds from the drug activity.
JOYNER, who is in custody pending sentencing, faces up to 20 years imprisonment and a $1,000,000 fine.
JOSEPH A. MCDONALD, age 26, of Glen Dale, West Virginia, entered a plea of guity to “Distribution of Oxycodone within 1,000 Feet of a Protected Location.” and one count of “Distribution of Oxycodone” on May 21, 2012. MCDONALD, who is on bond pending sentencing, faces up to 40 years imprisonment and a $2,000,000 fine. This case was investigated by the Marshall County Sheriff’s Department.
These cases were prosecuted by Assistant United States Attorney John C. Parr.
SHAWN L. BINKOWSKI, age 25, of Wheeling, West Virginia, entered a plea of guilty to “Felon in Possession of a Firearm.” BINKOWSKI, having previously been convicted in the Circuit Court of Ohio County, West Virginia, of the felony offense of Grand Larceny, knowingly possessed a Bryco Arms pistol on September 16, 2012, in Wheeling. BINKOWSKI, who is in custody pending sentencing, faces up to 10 years imprisonment and a $250,000 fine.
The case was prosecuted by Assistant United States Attorney Stephen L. Vogrin and investigated by the United States Probation office and the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Wheeling Police Department.
Three Defendants Convicted in $28.5 Million Drug ConspiracyRead the Press Release
KANSAS CITY, KAN. A federal jury has returned guilty verdicts against three men convicted for their roles in a $28 million drug trafficking conspiracy, U.S. Attorney Barry Grissom said today.
Marvin Lee Ellis, 36, Kansas City, Kan., was convicted Friday on one count of conspiracy to distribute crack cocaine, three counts of distributing crack cocaine, one count of possession with intent to distribute crack cocaine, one count of maintaining a residence in furtherance of drug trafficking at 921 Haskell in Kansas City, Kan., one count of unlawful possession of a firearm in furtherance of drug trafficking, and one count of unlawful possession of a firearm after a felony conviction.
Robert Vasquez, 40, Socorro, Texas, was convicted Friday on one count of conspiracy to commit money laundering and one count of money laundering.
Vernon Brown, 36, Kansas City, Kan., was convicted Friday on one count of conspiracy to possess with intent to distribute cocaine and crack cocaine.A fourth defendant, Kyle Stephen, was acquitted.
During trial, prosecutors presented evidence that the defendants were part of a drug trafficking organization that in October 2010 became the target of an investigation by the Drug Enforcement Administration. Investigators worked to identify both suppliers and customers of co-defendant Djuane Sykes.
The investigation yielded the seizure and forfeiture of more than $2 million in cash, 194 firearms, 29 vehicles, 26 kilograms of cocaine and three kilograms of crack.
Prosecutors presented evidence that the traffickers employed a group of couriers who would transport cocaine and marijuana from Mexico to Kansas City, and U.S. currency from the Kansas City area south to be smuggled into Mexico. Robert Vazquez was one of those couriers. On Jan. 13, 2012, investigators were watching when Vasquez met other conspirators at the Swift commercial trucking center in Edwardsville, Kan., and placed a bag inside his semitrailer truck. Investigators followed him to the area of Pratt, Kan., where the Kansas Highway Patrol stopped him and seized a black duffel bag containing $549,495 in U.S. currency.
During trial, prosecutors also presented evidence that members of the Kansas City, Kan., Police Department’s narcotics unit working undercover were able to buy crack cocaine several times in February and March 2012 from Marvin Ellis at 921 Haskell and at other locations in Kansas City, Kan. In addition, prosecutors presented evidence that Vernon Brown purchased quantities of crack cocaine from Sykes for several years and he sold it to individuals who came to the 2200 block of Russell to purchase drugs.
Ellis, Vasquez and Brown will be set for sentencing at a later date. They face the following potential penalties:
- Conspiracy to distribute crack cocaine: Not less than 10 years and not more than life and a fine up to $10 million.
- Distributing crack cocaine: A maximum penalty of 20 years and a fine up to $1 million.
- Maintaining a drug involved residence: A maximum penalty of 20 years and a fine up to $1 million.
- Conspiracy to commit money laundering and money laundering: A maximum penalty of 10 years and a fine up to $250,000.
- Unlawful possession of a firearm after a felony conviction: A maximum penalty of 10 years and a fine up to $250,000.
- Unlawful possession of a firearm in furtherance of drug trafficking: Not less than five years and a fine up to $250,000.
Grissom commended the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Internal Revenue Service, the Kansas City, Kan., Police Department and Assistant U.S. Attorney Terra Morehead for their work on the case.
Thirteen Year Fugitive, Dr. Juan Rios, SentencedRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on January 4, 2013, Juan Rios, 65, of Peru, was sentenced to 37 months in prison and ordered to pay fines and restitution totaling over $320,000.00 for his conviction on Health Care Fraud, Mail Fraud, and Failure to Appear. Rios was also ordered to serve 3 years of supervised release after his period of incarceration.
Rios was first indicted in December of 1999 for Health Care Fraud and Mail Fraud. A superseding indictment was returned in August of 2000, adding a charge of Failure to Appear after Rios fled to Peru, forfeiting $350,000 in cash that had been posted as bond.
During his change-of-plea hearing on September 18, 2012, Rios admitted fleeing the United States after he was indicted. Rios further admitted that as a Southern Illinois Physician, in the mid to late 1990s, he had defrauded several insurance companies of over $400,000. Rios, who had offices in Collinsville and Bethalto, Illinois, also admitted that he had submitted false bills for medical treatment and services that were not provided to his patients while at the same time fraudulently receiving over $250,000 in personal disability payments.
The investigation was conducted by the Southern Illinois Health Care Fraud Task Force, with the U.S. Postal Inspection Service, the Federal Bureau of Investigation, the National Insurance Crime Bureau, the U.S. Department of Health Human Services, Office of Inspector General, and the Illinois State Police being the primary investigative agencies. The case is being prosecuted by Assistant United States Attorneys Ranley R. Killian and Michael J. Quinley.
Syracuse, New York - Man pled to a one count indictment that charged him with committing robbery at the Veteran’s Administration Hospital in Syracuse.Read the Press Release
Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today the guilty plea of Brian Lamont Roberts, 54, of Syracuse, New York. Roberts pled guilty in federal district court before the Honorable Judge Norman Mordue, to a one count indictment that charged him with committing robbery at the Veteran’s Administration Hospital in Syracuse, NY on February 2, 2012. The robbery charge carries a maximum possible penalty of 15 years in prison.
During his plea colloquy, Roberts admitted he robbed a delivery truck driver of a can of soda at knife point, while threatening the driver with bodily injury. He further admitted that he committed the offense while high on crack cocaine and alcohol, and that he suffers from addiction to both substances. Roberts has been in prison and drug and alcohol treatment for nearly a year since the robbery. Judge Mordue ordered that such treatment continue. Sentencing has been set for May 13, 2013 at 10 a.m.
This case was investigated by Special Agents of the Veteran’s Administration. The case is being prosecuted by Assistant United States Attorney Craig A. Benedict. Questions may be directed to AUSA Benedict at 315-448-0672.
Solomons Man Pleads Guilty to Producing Child PornographyRead the Press Release
Greenbelt, Maryland - Joshua P. Blakenship, age 25, of Solomons, Maryland, pleaded guilty today to producing child pornography.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Calvert County Sheriff Mike Evans; and the Rapid City South Dakota Police Department.
"Joshua Blankenship is typical of the predators children routinely encounter on the internet," said U.S. Attorney Rod J. Rosenstein.
According to his plea agreement, Blakenship “friended” a teenage girl on Facebook in January 2011. They exchanged text messages and by March 2011, Blankenship asked the girl for a nude photo of herself. The girl sent Blakenship a nude photo she took on her cell phone.
On July 4, 2011, Blankenship sent a text message to the girl demanding 10 nude pictures and said that if she did not produce and send the photos, she would go to jail because she had sent an illegal image on her cell phone. Between July 5 and 7, 2011, Blakenship sent numerous texts describing the images he wanted her to produce and threatening to call the police if she refused. The victim produced several dozen pictures and sent them to Blakenship.
Blakenship was identified and his residence searched on August 5, 2011. Blakenship admitted to forcing people under the age of 18 to send him pictures, and to creating a fake profile on the Internet to gain access to pictures and videos of girls.
As part of his plea agreement, Blakenship must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Blakenship and the government have agreed that if the Court accepts the plea agreement Blakenship will be sentenced to 12 years in prison. U.S. District Judge Roger W. Titus has scheduled sentencing for March 15, 2013.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 "resources" tab on the left of the page.
This investigation was part of Operation Predator, a nationwide HSI initiative to protect children from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers, criminal alien sex offenders and child sex traffickers. HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE or by completing its online tip form. Both are staffed around the clock by investigators.
United States Attorney Rod J. Rosenstein commended HSI Baltimore, Calvert County Sheriff’s Office and Rapid City, South Dakota Police Department for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney LisaMarie Freitas of the U.S. Justice Department, Criminal Division, Child Exploitation and Obscenity Section, and Assistant U.S. Attorney Kristi N. O’Malley who prosecuted the case.
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Shelby Woman Pleads Guilty to Defrauding Medicaid of $8 Million, Aggravated Identity Theft and Tax FraudRead the Press Release
Woman Steals Identity of Therapist to Submit False Claims to Medicaid
CHARLOTTE, N.C. – A Shelby woman pleaded guilty today for her involvement in a health care fraud scheme that defrauded Medicaid of $8 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to defrauding Medicaid, Victoria Finney Brewton, 37, of Shelby, N.C., also pleaded guilty to stealing a therapist’s identity to commit the fraud and to filing a false tax return.
U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
Brewton pleaded guilty today before U.S. Magistrate Judge David Keesler to seven counts of health care fraud and health care fraud conspiracy, one count of aggravated identity theft and one count of filing a false tax return. At today’s plea hearing, the defendant admitted that from 2008 to 2012, Brewton, her co-defendant Linda Radeker, also of Shelby, and others submitted in excess of $8 million in false claims to Medicaid. According to filed court documents and statements made in court, Brewton operated a series of after-school and summer childcare programs in Shelby. Brewton recruited juvenile Medicaid recipients to her childcare programs by promising that the program would be free for Medicaid recipients. After Brewton obtained the children’s and families’ Medicaid recipient numbers, she used this information to fraudulently bill Medicaid for mental and behavioral health services which were never provided.
According to the criminal information, Brewton was not licensed or qualified to provide mental and behavioral health services and she was not approved by Medicaid. Instead, Brewton enlisted the assistance of other complicit Medicaid-approved providers, such as Linda Radeker, and in other instances, stole the identity of Medicaid-approved providers, in order to accomplish the fraud. Court documents indicate that Brewton conspired with Radeker, a licensed professional counselor enrolled with North Carolina Medicaid, to submit claims to Medicaid making it appear that Radeker had provided the claimed mental and behavioral health services when, in fact, Radeker did not provide any of the services. Radeker and Brewton then split the Medicaid payments 50/50 for these false claims.
Filed documents also indicate that Brewton hired licensed therapist K.S.M. in October 2010 to provide services at Brewton’s company, Healing Hearts. Although K.S.M. provided some mental and behavioral health services while she worked at Healing Hearts, Brewton submitted false and fraudulent claims to Medicaid through K.S.M.’s Medicaid provider number far in excess of the services actually provided by K.S.M. In or about October 2011, K.S.M. left Healing Hearts after learning that Brewton had submitted false claims through K.S.M.’s Medicaid provider number. Thereafter, Brewton misappropriated K.S.M.’s identity, specifically her Medicaid provider number, in order to continue to submit fraudulent claims to Medicaid after K.S.M. was no longer employed at Healing Hearts. Specifically, the defendant admitted that on or about October 27, 2011, Brewton submitted an Electronic Funds Transfer Authorization Agreement to Medicaid directing that reimbursements for claims submitted through K.S.M.’s provider numbers be deposited into a bank account held and controlled by Brewton. From in or about April 2011 to May 2012, Brewton submitted in excess of $1.8 million in false claims through K.S.M.’s provider number which K.S.M. did not provide. According to court documents, Brewton also misused the Medicaid provider numbers of other therapists employed by her companies in order to submit false claims to Medicaid through their numbers.
As part of her plea, Brewton also admitted that she defrauded the United States by filing a false tax return for the year 2009 which intentionally failed to report the income Brewton received from her scheme to defraud Medicaid. She also failed to file tax returns for 2010 and 2011, which further masked the income from her fraud scheme. Brewton agreed to forfeit a 2005 Dodge Magnum which was seized as the proceeds of fraud during the investigation.
Brewton, who was released on bond, faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charges, and a maximum term of three years in prison and a $250,000 fine for the filing of a false tax return charge. In her plea agreement, Brewton has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the Court at Brewton’s sentencing hearing, which has not been scheduled yet.
Radeker pleaded guilty to charges of health care conspiracy and money laundering on September 13, 2012 and is awaiting sentencing.
The investigation into Brewton was handled by the FBI, MID, IRS, and HHS-OIG. Special Assistance to the Task Force was provided by the North Carolina Division of Medical Assistance, Program Integrity Section. The prosecution was handled by Assistant U.S. Attorneys Kelli Ferry and Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistleblower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447- 8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Shelby Woman Pleads Guilty to Defrauding Medicaid of $8 Million, Aggravated Identity Theft and Tax FraudRead the Press Release
Woman Steals Identity of Therapist to Submit False Claims to Medicaid
CHARLOTTE, N.C. – A Shelby woman pleaded guilty today for her involvement in a health care fraud scheme that defrauded Medicaid of $8 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to defrauding Medicaid, Victoria Finney Brewton, 37, of Shelby, N.C., also pleaded guilty to stealing a therapist’s identity to commit the fraud and to filing a false tax return.
U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.
Brewton pleaded guilty today before U.S. Magistrate Judge David Keesler to seven counts of health care fraud and health care fraud conspiracy, one count of aggravated identity theft and one count of filing a false tax return. At today’s plea hearing, the defendant admitted that from 2008 to 2012, Brewton, her co-defendant Linda Radeker, also of Shelby, and others submitted in excess of $8 million in false claims to Medicaid. According to filed court documents and statements made in court, Brewton operated a series of after-school and summer childcare programs in Shelby. Brewton recruited juvenile Medicaid recipients to her childcare programs by promising that the program would be free for Medicaid recipients. After Brewton obtained the children’s and families’ Medicaid recipient numbers, she used this information to fraudulently bill Medicaid for mental and behavioral health services which were never provided.
According to the criminal information, Brewton was not licensed or qualified to provide mental and behavioral health services and she was not approved by Medicaid. Instead, Brewton enlisted the assistance of other complicit Medicaid-approved providers, such as Linda Radeker, and in other instances, stole the identity of Medicaid-approved providers, in order to accomplish the fraud. Court documents indicate that Brewton conspired with Radeker, a licensed professional counselor enrolled with North Carolina Medicaid, to submit claims to Medicaid making it appear that Radeker had provided the claimed mental and behavioral health services when, in fact, Radeker did not provide any of the services. Radeker and Brewton then split the Medicaid payments 50/50 for these false claims.
Filed documents also indicate that Brewton hired licensed therapist K.S.M. in October 2010 to provide services at Brewton’s company, Healing Hearts. Although K.S.M. provided some mental and behavioral health services while she worked at Healing Hearts, Brewton submitted false and fraudulent claims to Medicaid through K.S.M.’s Medicaid provider number far in excess of the services actually provided by K.S.M. In or about October 2011, K.S.M. left Healing Hearts after learning that Brewton had submitted false claims through K.S.M.’s Medicaid provider number. Thereafter, Brewton misappropriated K.S.M.’s identity, specifically her Medicaid provider number, in order to continue to submit fraudulent claims to Medicaid after K.S.M. was no longer employed at Healing Hearts. Specifically, the defendant admitted that on or about October 27, 2011, Brewton submitted an Electronic Funds Transfer Authorization Agreement to Medicaid directing that reimbursements for claims submitted through K.S.M.’s provider numbers be deposited into a bank account held and controlled by Brewton. From in or about April 2011 to May 2012, Brewton submitted in excess of $1.8 million in false claims through K.S.M.’s provider number which K.S.M. did not provide. According to court documents, Brewton also misused the Medicaid provider numbers of other therapists employed by her companies in order to submit false claims to Medicaid through their numbers.
As part of her plea, Brewton also admitted that she defrauded the United States by filing a false tax return for the year 2009 which intentionally failed to report the income Brewton received from her scheme to defraud Medicaid. She also failed to file tax returns for 2010 and 2011, which further masked the income from her fraud scheme. Brewton agreed to forfeit a 2005 Dodge Magnum which was seized as the proceeds of fraud during the investigation.
Brewton, who was released on bond, faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charges, and a maximum term of three years in prison and a $250,000 fine for the filing of a false tax return charge. In her plea agreement, Brewton has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the Court at Brewton’s sentencing hearing, which has not been scheduled yet.
Radeker pleaded guilty to charges of health care conspiracy and money laundering on September 13, 2012 and is awaiting sentencing.
The investigation into Brewton was handled by the FBI, MID, IRS, and HHS-OIG. Special Assistance to the Task Force was provided by the North Carolina Division of Medical Assistance, Program Integrity Section. The prosecution was handled by Assistant U.S. Attorneys Kelli Ferry and Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistleblower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447- 8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Seminole County Man Sentenced to More Than Six Years for Possessing Child PornographyRead the Press Release
Orlando, Florida - Chief U.S. District Judge Anne C. Conway sentenced Roberto J. Irizarry-Colon (28, Chuluota) yesterday to 6 ½ years in federal prison for possessing child pornography. The court also ordered Irizarry-Colon to forfeit the computers and thumb drives that he used to possess the child pornography. As part of Irizarry-Colon’s sentence, the court also ordered him to serve a life term of supervised release and to register as a sex offender. Irizarry-Colon pleaded guilty on August 14, 2012.
According to court documents, Irizarry-Colon possessed and stored child pornography on his computers, thumb drives, and on several online storage servers. During the execution of a search warrant, law enforcement officers searched several thumb drives and two computers that Irizarry-Colon owned. The officers found thousands of pictures and 100 movies which recorded the sexual abuse of children less than 12 years old. During an interview, Irizarry-Colon admitted to possessing child pornography for the last ten years.
This case was investigated by the Federal Bureau of Investigation and the Seminole County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Karen L. Gable.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the tab "resources."
San Antonio Police Officer Arrested in Bribery InvestigationRead the Press Release
This morning, a federal criminal complaint was filed against 36-year-old San Antonio Police Officer Curtis W. Lundy charging him with theft of honest services by wire fraud announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Armando Fernandez and San Antonio Police Chief William McManus.
According to the complaint, on December 15, 2012, Officer Lundy responded to a call concerning an assault in progress at a Northside apartment complex. At the scene, Officer Lundy detained an individual in connection with the assault after that individual admitted to Officer Lundy that he was in possession of a user amount of marijuana. While the subject was detained, Officer Lundy indicated that he would hold off on filing the possession of marijuana charge in exchange for a $400 payment. During subsequent phone conversations, Officer Lundy raised the payment to $500.
The complaint also states that earlier this week, the subject contacted the Federal Bureau of Investigation about the matter. At the FBI’s direction, the subject was able to make multiple audio recordings of cellular telephone conversations with Officer Lundy. During one of those conversations, Officer Lundy instructed the subject to meet yesterday afternoon in order to collect the $500. Surveillance observed Officer Lundy, the sole occupant, arrive in a marked SAPD patrol vehicle and collect an envelope from the subject which contained $500. Authorities arrested Officer Lundy last night after his shift was completed.
Upon conviction, Officer Lundy faces up to 20 years in federal prison and a maximum $250,000 fine. Officer Lundy appeared before United States Magistrate Judge John Primomo this morning for his initial appearance and was released on a personal recognizance bond.
This case was investigated by agents with the Federal Bureau of Investigation together with San Antonio Police Department Internal Affairs. Assistant United States Attorney Greg Surovic is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Russian Citizen Sentenced in Manhattan Federal Court to Three Years in Prison for Sophisticated International Cyber CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that VLADIMIR ZDOROVENIN, a Russian national, was sentenced today in Manhattan federal court to three years in prison in connection with a series of sophisticated international cyber crimes. ZDOROVENIN, who was initially charged in January 2012 with his son, Kirill Zdorovenin, pled guilty in February 2012 to one count of conspiracy to commit wire fraud and one count of wire fraud, for his involvement in the schemes. He was sentenced today by U.S. District Judge Paul G. Gardephe.
Manhattan U.S. Attorney Preet Bharara said: “From his perch halfway across the globe, Vladimir Zdorovenin engaged in a slew of cyber crimes that left multiple victims in the United States. Cybercrime is particularly insidious because there is no need for geographic proximity between perpetrators and their victims, and Zdorovenin’s sentence today should serve as a reminder to others that law enforcement does not require geographic proximity to prosecute these crimes either.”
According to documents filed in Manhattan federal court and statements made during court proceedings:
While in Russia between 2004 and 2005, ZDOROVENIN engaged in a series of crimes that victimized citizens of the United States through the use of stolen credit card information, multiple phony websites, and bank accounts in Russia and Latvia. Specifically, he conspired to steal victims’ personal identification information, including credit card numbers, through the use of computer programs that were surreptitiously installed on victims’ computers and that recorded the information as it was entered by the victims. He also conspired to purchase stolen credit card numbers from other individuals, and to use the stolen credit card information to make what appeared to be legitimate purchases of goods from various Internet businesses including Sofeco LLC, Pintado LLC, and Tallit LLC. However, the purchases were fraudulent and were used as a means of deceiving banks, credit card service processors, credit card holders, and others. In fact, ZDOROVENIN stole the money directed to the websites through the fraudulent and unauthorized charges he and a co-conspirator caused to be made on the stolen credit cards.
Additionally, ZDOROVENIN conspired to use the Internet to unlawfully access the financial services accounts of victims located in the United States and then transferred or attempted to transfer hundreds of thousands of dollars from those accounts to bank accounts under his and a co-conspirator’s control. Finally, after taking over victims’ online brokerage accounts, ZDOROVENIN and a co-conspirator bought and sold thousands of shares of certain companies’ stock in an effort to manipulate the prices of those stocks. ZDOROVENIN and the co-conspirator realized profits through this scheme by simultaneously purchasing or selling shares of the same stocks through an online brokerage account, maintained in the name of Rim Investment Management, Ltd.
In addition to his prison term, ZDOROVENIN, 55, of Moscow, Russia, was ordered to forfeit up to $1 million, and pay restitution in an amount to be determined within 90 days.
Mr. Bharara praised the outstanding investigative work of the FBI.
This case is being handled by the Office's Complex Frauds Unit. Assistant U.S. Attorneys James J. Pastore, Jr. and Thomas G.A. Brown are in charge of the prosecution.
Kirill Zdorovenin, ZDOROVENIN’s son and co-conspirator, remains at large. The charges against Kirill Zdorovenin are merely accusations, and he is presumed innocent unless and until proven guilty.
Rochester Man Pleads Guilty in Large Tax Refund SchemeRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Juan Marie Delvalle, 25, of Rochester, N.Y., pleaded guilty before U.S. District Court Judge David G. Larimer to conspiracy to commit tax fraud in connection with a large, nationwide tax refund scheme. The charge carries a maximum penalty of 10 years in prison, a $250,000 fine, or both.
Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that from February 1, 2011 to October 31, 2011, the defendant was involved in a scheme to obtain income tax refunds by the filing of fraudulent federal income tax returns with the Internal Revenue Service. Specifically, stolen identities were utilized to file the fraudulent returns. In addition, the wages and related tax withholdings reported on the returns were fabricated in order to obtain refunds. Most of the returns were filed in the names and social security numbers of individuals residing in Puerto Rico without their knowledge. The refund checks issued as a result of the fraudulent returns were sent to various addresses in Rochester and other locations in the country.
A total of 8,336 returns were filed by a company in Bronx, New York claiming refunds totaling $45,768,391. Refunds totaling $3,321,542.00 for 590 of the returns were sent by the IRS to various locations in the Rochester area. Delvalle retrieved the refund checks sent to Rochester and then forwarded the money to individuals in the New York City area who were responsible for filing the false tax returns.
The plea is the culmination of a joint investigation on the part of the Internal Revenue Service, Criminal Investigation Division, under the direction of Toni Weirauch, Special Agent in Charge, New York Field Office, and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota.