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Tuesday 12 November 2024
Philadelphia Man Admits to Drug Trafficking in Monongalia CountyRead the Press Release
CLARKSBURG, WEST VIRGINIA – Rodney Johnson, 47, of Philadelphia, Pennsylvania, has admitted to his role in an organization that was supplying large amounts of methamphetamine, fentanyl, and cocaine to North Central West Virginia.
According to court documents, Johnson helped transport significant quantities of illicit drugs from Philadelphia to Morgantown, West Virginia. The organization utilized several properties in Monongalia County to store the drug supply.
Johnson faces up to 20 years in federal prison for each of the seven counts to which he pled. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorney Zelda Wesley is prosecuting the case on behalf of the government.
This case was investigated by the Mon Metro Drug Task Force, a HIDTA-funded initiative. The task force consists of the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Drug Enforcement Administration; the West Virginia State Police; the Monongalia County Sheriff’s Office; the Monongalia County Prosecuting Attorney’s Office; the Morgantown Police Department; the WVU Police Department; the Granville Police Department; and the Star City Police Department.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
U.S. Magistrate Michael John Aloi presided.
Paragon Systems Agrees to Pay $52M to Resolve False Claims Act Allegations Concerning Fraudulently Obtained Small Business Contracts and KickbacksRead the Press Release
Herndon, Virginia-based contractor Paragon Systems Inc. (Paragon) has agreed to pay to the United States $52 million to settle allegations that the company violated the False Claims Act by knowingly causing purported small businesses that it controlled to fraudulently obtain small business set-aside contracts. The settlement further resolves allegations that Paragon violated the Anti-Kickback Act. Paragon is one of the federal government’s largest providers of specialized security, fire and emergency response and mission support services, and the company provides security guards at federal buildings throughout the United States.
“Those who fraudulently procure, or assist others to fraudulently procure, small business set-aside contracts will be held accountable,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When ineligible companies obtain contracts reserved for veteran owned or socially or economically disadvantaged businesses, they prevent the small business community from receiving the contracting opportunities that Congress intended.”
The settlement resolves allegations that Paragon, acting through former high-ranking corporate executives, knowingly engaged in a fraudulent scheme to use purported small businesses that it controlled to obtain Department of Homeland Security (DHS) set-aside contracts reserved for Woman-Owned Small Businesses (WOSBs), Service-Disabled Veteran Owned Small Businesses (SDVOSBs) and other small businesses. The former high-ranking Paragon officials who carried out this alleged scheme included the company’s president, vice president of business development, vice president of operations, compliance manager and contracts manager. The United States contends the former Paragon executives engaged female relatives and friends to serve as figurehead owners of purported small businesses in order for those companies to obtain DHS set-aside contracts relating to the provision of security services at federal buildings, and that the Paragon-controlled companies then subcontracted substantially all of the work under the set-aside contracts to Paragon.
The settlement further resolves allegations that the purported small businesses surreptitiously paid substantial sums of money to the Paragon executives in violation of the Anti-Kickback Act. In total, the United States contends that the purported small businesses controlled by Paragon made over 300 separate payments to the former Paragon executives, totaling more than $11 million, which they attempted to conceal as purported “consulting payments” made to various shell companies formed by the former executives.
One of the purported small businesses, Athena Services International LLC (ASI) and its joint venture with Paragon, Athena Joint Venture Services LLC (AJVS), along with their owner, Alisa Silverman, have collectively agreed to pay more than $1.6 million to resolve their liability in connection with the alleged small business contracting fraud scheme. The settlement further resolves allegations that ASI, through Silverman, improperly received a Paycheck Protection Program loan that SBA forgave in full based on false representations that ASI complied with all PPP rules. The settlement with ASI, AJVS and Silverman is based on their ability to pay. The United States has filed a complaint against another purported small business, Patronus Systems Inc. and its owner Mabel O’Quinn, for their role in the alleged misconduct.
As part of the settlements, Paragon, ASI, AJVS and Silverman have agreed to cooperate with the department’s investigation of other parties and any related litigation.
“This settlement sends a message that flagrant misuse of government contracts through kickback schemes will not be tolerated,” said U.S. Attorney Erek L. Barron for the District of Maryland. “The integrity of our contracting programs is essential, and we remain committed to rooting out fraud that compromises fair access and accountability.”
“This settlement is the largest civil recovery in over a decade by the Department of Homeland Security Office of Inspector General (DHS-OIG),” said Inspector General Joseph V. Cuffari Ph.D of the DHS. “The settlement sends a clear message that the Federal Government will continue to investigate and prosecute fraud, waste, and abuse to protect small businesses owned by service-disabled veterans and other socially and economically disadvantaged individuals. I am grateful for the continued partnership with the Department of Justice and for the whistleblower who initiated the complaint.”
“Small Business Administration (SBA) programs must be preserved for truly small businesses,” said General Counsel Therese Meers of the SBA. “Fraud on SBA’s procurement programs deprives legitimate small businesses of important procurement opportunities, and fraud on the Paycheck Protection Program unconscionably undermines critical pandemic relief. The results in this matter reflect SBA’s and the government’s ongoing commitment to identifying and pursuing those who perpetrate such fraud.”
The settlements with Paragon, ASI, AJVS and Silverman resolve claims brought in a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The United States may intervene in the action, as it did in this case. The lawsuit is captioned United States ex rel. Pattison v. Paragon Systems Inc., et al., Case No. 21-3260 (DMD). As part of the settlement with Paragon, the whistleblower, Todd Pattison, will receive more than $9 million, and he will receive approximately $280,000 in connection with the settlement with ASI and Silverman.
The settlement was the result of a coordinated effort among the Civil Division’s Fraud Section, U.S. Attorney’s Office for the District of Maryland and DHS-OIG.
Senior Trial Counsel Alicia J. Bentley of the Civil Division’s Commercial Litigation Branch, Fraud Section, and Assistant U.S. Attorney Sarah Marquardt for the District of Maryland handled the matter.
The claims resolved by the settlement are allegations only. There has been no determination of liability as to those claims.
Paragon Settlement
Athena - Silverman Settlement
Paragon Systems Agrees to Pay $52M to Resolve False Claims Act Allegations Concerning Fraudulently Obtained Small Business Contracts and KickbacksRead the Press Release
Athena Services International, LLC and its Owner Also Agree to Pay More Than $1.6 Million to Resolve Related Allegations.
WASHINGTON – Herndon, Virginia-based contractor Paragon Systems Inc. (Paragon) has agreed to pay to the United States $52 million to settle allegations that the company violated the False Claims Act by knowingly causing purported small businesses that it controlled to fraudulently obtain small business set-aside contracts. The settlement further resolves allegations that Paragon violated the Anti-Kickback Act. Paragon is one of the Federal government’s largest providers of specialized security, fire and emergency response and mission support services, and the company provides security guards at federal buildings throughout the United States.
“This settlement sends a message that flagrant misuse of government contracts through kickback schemes will not be tolerated,” said U.S. Attorney Erek L. Barron for the District of Maryland. “The integrity of our contracting programs is essential, and we remain committed to rooting out fraud that compromises fair access and accountability.”
The settlement resolves allegations that Paragon, acting through former high-ranking corporate executives, knowingly engaged in a fraudulent scheme to use purported small businesses that it controlled to obtain U.S. Department of Homeland Security (DHS) set-aside contracts reserved for Woman-Owned Small Businesses (WOSBs), Service-Disabled Veteran Owned Small Businesses (SDVOSBs) and other small businesses. The former high-ranking Paragon officials who carried out this alleged scheme included the company’s President, Vice President of Business Development, Vice President of Operations, Compliance Manager and Contracts Manager. The United States contends the former Paragon executives engaged female relatives and friends to serve as figurehead owners of purported small businesses in order for those companies to obtain DHS set-aside contracts relating to the provision of security services at federal buildings, and that the Paragon-controlled companies then subcontracted substantially all of the work under the set-aside contracts to Paragon.
The settlement further resolves allegations that the purported small businesses surreptitiously paid substantial sums of money to the Paragon Executives in violation of the Anti-Kickback Act. In total, the United States contends that the purported small businesses controlled by Paragon made over 300 separate payments to the former Paragon executives, totaling more than $11 million, which they attempted to conceal as purported “consulting payments” made to various shell companies formed by the former executives.
One of the purported small businesses, Athena Services International LLC (ASI) and its joint venture with Paragon, Athena Joint Venture Services LLC (AJVS), along with their owner, Alisa Silverman, have collectively agreed to pay more than $1.6 million to resolve their liability in connection with the alleged small business contracting fraud scheme. The settlement further resolves allegations that ASI, through Silverman, improperly received a Paycheck Protection Program loan that SBA forgave in full based on false representations that ASI complied with all PPP rules. The settlement with ASI, AJVS and Silverman is based on their ability to pay. The United States has filed a complaint against another purported small business, Patronus Systems Inc. and its owner Mabel O’Quinn, for their role in the alleged misconduct.
As part of the settlements, Paragon, ASI, AJVS and Silverman have agreed to cooperate with the Department’s investigation of other parties and any related litigation.
“Those who fraudulently procure, or assist others to fraudulently procure, small business set-aside contracts will be held accountable,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When ineligible companies obtain contracts reserved for veteran owned or socially or economically disadvantaged businesses, they prevent the small business community from receiving the contracting opportunities that Congress intended.”
“This settlement is the largest civil recovery in over a decade by the Department of Homeland Security Office of Inspector General (DHS-OIG),” said Inspector General Joseph V. Cuffari Ph.D of DHS. “The settlement sends a clear message that the Federal Government will continue to investigate and prosecute fraud, waste, and abuse to protect small businesses owned by service-disabled veterans and other socially and economically disadvantaged individuals. I am grateful for the continued partnership with the Department of Justice and for the whistleblower who initiated the complaint.”
“Small Business Administration (SBA) programs must be preserved for truly small businesses,” said SBA General Counsel Therese Meers. “Fraud on SBA’s procurement programs deprives legitimate small businesses of important procurement opportunities, and fraud on the Paycheck Protection Program unconscionably undermines critical pandemic relief. The results in this matter reflect SBA’s and the government’s ongoing commitment to identifying and pursuing those who perpetrate such fraud.”
The settlements with Paragon, ASI, AJVS and Silverman resolve claims brought in a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The United States may intervene in the action, as it did in this case. The lawsuit is captioned United States ex rel. Pattison v. Paragon Systems Inc., et al., Case No. 21-3260 (DMD). As part of the settlement with Paragon, the whistleblower, Todd Pattison, will receive more than $9 million, and he will receive approximately $280,000 in connection with the settlement with ASI and Silverman.
This settlement was the result of a coordinated effort between the U.S. Attorney’s Office for the District of Maryland, the Civil Division’s Fraud Section, and the Department of Homeland Security’s Office of the Inspector General. U.S. Attorney Barron thanked Assistant U.S. Attorney Sarah Marquardt for the District of Maryland and Senior Trial Counsel Alicia J. Bentley of the Civil Division’s Commercial Litigation Branch, who handled the matter.
The claims resolved by the settlement are allegations only. There has been no determination of liability as to those claims.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Ozark Business Owner Sentenced for Social Security Fraud, PerjuryRead the Press Release
KANSAS CITY, Mo. – A former Harrisonville, Mo., man has been sentenced in federal court for Social Security fraud and for committing perjury when he testified at his trial.
Michael Sylvara, 39, who currently lives and owns a business in Ozark, Mo., but lived in Harrisonville at the time of the offense, was sentenced by U.S. District Judge Roseann A. Ketchmark on Wednesday, Nov. 6, to two years and three months in federal prison without parole. The court also ordered Sylvara to pay $42,369 in restitution to the government.
Sylvara is the co-owner of Volleyball Beach Ozark, the second largest indoor sand facility in the world, and maintains a real estate license.
On March 23, 2023, Sylvara was found guilty at trial of one count of Social Security fraud and one count of perjury.
Sylvara was originally indicted for Social Security fraud. Sylvara, who oversaw his disabled father’s Social Security benefits from 2016 to 2019, converted $42,369 of his father’s benefits to his own use. Sylvara testified in his own defense during a trial in October 2022, which resulted in a hung jury.
Sylvara was subsequently charged in a superseding indictment on Nov. 17, 2022. The superseding indictment contains the original charge of Social Security fraud and adds the perjury charge.
Sylvara was designated as the representative payee for his father, who is now deceased. As the representative payee, Sylvara was legally obligated to use all of the benefit payments to meet his father’s needs. Evidence introduced during the trial indicated that Sylvara instead converted some of his father’s benefit payments for his personal use to pay his utility, insurance and student loan bills, as well as his realtor association fees, over a period of 30 months.
A witness at the trial in October 2022 testified that she purchased basic necessities for Sylvara’s father, including clothes, underwear, socks, and a pair of shoes, without being reimbursed. She also testified that the only items in his father’s refrigerator were water, bread, cat food, and condiments. She described seeing Sylvara’s father eat cat food.
Sylvara presented testimony that he knew was false while under oath during his first trial in October 2022. Sylvara attempted to justify multiple cash withdrawals (totaling over $23,000) he made from the representative payee account. He claimed under oath he had a written agreement with the Social Security Administration that he could be paid $14 an hour for taking care of his father. Subsequent investigation showed there is no such agreement and there never has been.
This case was prosecuted by Special Assistant U.S. Attorneys Bradley Cooper, Amanda Hanson, and Courtney Pratten. It was investigated by the Social Security Administration.
Oregon Man Pleads Guilty to Three Federal Hate Crimes for Defacing SynagogueRead the Press Release
An Oregon man pleaded guilty today to three federal hate crimes after intentionally defacing a synagogue in Eugene, Oregon, on multiple occasions.
Adam Edward Braun, 34, of Eugene, pleaded guilty to two counts of intentionally defacing a synagogue and one count of attempting to intentionally damage the synagogue because the synagogue was a place of religious worship for Jewish people.
According to court documents and statements made in court, Braun targeted Temple Beth Israel, a Jewish synagogue in Eugene, with graffiti on two separate occasions. Between Sept. 10 and 11, 2023, Braun spray-painted the numbers “1377” on the exterior of the synagogue building. Braun admitted that he selected the numbers “1377” because it was similar to “1488,” a popular white-supremacist slogan that references Adolf Hitler and the “Fourteen words.” Months later, in January, Braun attempted to damage the synagogue’s glass doors using a ball-peen hammer. Braun stopped when he saw he was being recorded by a surveillance camera and went to another area of the property where he spray-painted the slogan “WHITE POWER” in large letters.
Braun faces a maximum penalty of one year in prison for each of the three charges, as well as fines and restitution.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Natalie K. Wight for the District of Oregon and Special Agent in Charge Douglas Olson of the FBI Portland Field Office made the announcement.
The FBI Portland Field Office investigated the case with assistance from the Eugene Police Department.
Trial Attorney Cameron A. Bell of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Gavin W. Bruce for the District of Oregon are prosecuting the case.
New Orleans Man Guilty of Possession of Firearms and Drug ChargesRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that on November 7, 2024, DERRICK THERIOT (“D. THERIOT”), age 29, of New Orleans, pled guilty to Counts 5 through 8 of the superseding indictment pending against him. Count 5 charged D. THERIOT with possession, with intent to distribute, fentanyl, in violation of Title 21, United States Code, Sections 841(a)(1), (b)(1)(C), and (b)(1)(D). Count 6 charged D. THERIOT with possession of a firearm, in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A)(i). Count 7 charged D. THERIOT with possession of a machinegun, in violation of Title 18, United States Code, Sections 922(o) and 924(a)(2). Finally, Count 8 charged D. THERIOT with being a felon in possession of a firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(8).
As to Count 5, the maximum penalty is 20 years of imprisonment, and/or up to a $1,000,000 fine, and at least 3 years of supervised release.
As to Count 6, the minimum penalty is 5 years, up to a life sentence, to run consecutively to any other sentence, up to a $250,000 fine, and up to 5 years of supervised release.
As to Count 7, the maximum penalty is 10 years of imprisonment, and/or up to a $250,000 fine, and up to 3 years of supervised release.
As to Count 8, the maximum penalty is 15 years of imprisonment, and/or up to a $250,000 fine, and up to 3 years of supervised release. Each count carries a mandatory special assessment fee of $100.00.
According to court records, on May 12, 2023, two victims were shot and killed after leaving a bar on N. Claiborne Avenue. A co-defendant was identified as a possible suspect in that double homicide. During the investigation of the co-defendant, the Bureau of Alcohol, Tobacco, Firearms, and Explosives agents, assisting New Orleans Police Department detectives, saw suspected stolen vehicles at two residences, and linked one of them to the co-defendant and D. THERIOT.
On November 27, 2023, law enforcement obtained search warrants for both residences. D. THERIOT admitted possessing the fentanyl for future drug sales. Additionally, D. THERIOT admitted possessing firearms in furtherance of drug trafficking, because those weapons were kept to protect his drugs. Additionally, D. THERIOT knew that the Glock Model 27, 40 caliber pistol contained a Glock auto-sear and, if the trigger was pulled, it would expel more than one bullet without having to reset the trigger.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun track violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the New Orleans Police Department. United States Attorney Mike Trummel of the Violent Crime Unit handled the prosecution.
Nashville Man Sentenced to 15 Years for Unlawful Possession of Ammunition by a FelonRead the Press Release
NASHVILLE – Demetris Octavius Parrish, 37, of Nashville, Tennessee, was sentenced on Friday to 15 years in prison for unlawful possession of ammunition by a convicted felon, announced Acting United States Attorney Thomas J. Jaworski for the Middle District of Tennessee.
At approximately 8:30 a.m. on February 26, 2021, Parrish entered the R&B Market located at 2600 Clarksville Pike, in Nashville. The Market’s manager recognized Parrish as a regular customer. They had a brief conversation, during which Parrish said that he wanted to exchange some goods. When the manager told Parrish that he could not return those goods because the Market did not sell them, Parrish became enraged, stated that he would return to kill the manager, and then left the Market.
Approximately 30 minutes later, Parrish returned to the Market carrying a black 9mm pistol. Parrish entered the Market and pointed the pistol at the manager, who was behind the check-out counter. As the manager fled to the rear of the Market, Parrish fired multiple shots at him. Parrish then fled the Market. Parrish’s first visit to the Market, the attempted shooting and Parrish’s flight from the Market were captured by the Market’s surveillance cameras.
Metro Nashville police officers responded and, upon arriving, recovered three 9mm caliber cartridge cases inside the Market from the rounds that Parrish had fired.
“This prosecution demonstrates our office’s commitment to protecting the community from repeat offenders who wreak havoc with firearms,” said Acting United States Attorney Thomas J. Jaworski. “The defendant was previously convicted of at least six felony offenses, including aggravated assault and aggravated robbery. Thanks to the work by our prosecutors and law enforcement partners, the community will finally be safe from the defendant’s crimes for an extended period.”
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Metropolitan Nashville Police Department. Assistant U.S. Attorneys Nicholas J. Goldin and Rascoe Dean prosecuted the case.
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Naples Man Sentenced for Possessing and Accessing with Intent to View Child Sexual Abuse ImagesRead the Press Release
Fort Myers, Florida – U.S. District Judge Thomas P. Barber has sentenced Myles Edwin Huff (46, Naples) to five years in federal prison for possessing and accessing with intent to view images depicting the sexual abuse of children. Huff was also ordered to register as a sex offender. Huff entered a guilty plea on July 23, 2024.
According to court documents, between July and September 2023, the National Center for Missing and Exploited Children (NCMEC) received 28 cyber tips from an electronic service provider reporting that Huff was involved in the possession of child sex abuse material. On November 16, 2023, the FBI executed a search warrant at Huff’s residence and seized his cellphone. During an interview with agents, Huff stated that he used his cellphone to search for child sexual abuse material. The subsequent forensic examination of Huff’s cellphone revealed images of child sexual abuse material.
This case was investigated by Federal Bureau of Investigation, the Fort Myers Child Exploitation and Human Trafficking Task Force, which includes the Lee County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Yolande G. Viacava.
This 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.
Montgomery Man Charged with Possession of a Machinegun Conversion Device on the Campus of Tuskegee UniversityRead the Press Release
Montgomery, Ala. – A Montgomery, Alabama, man is facing a federal charge for possessing a firearm with a machinegun conversion device, announced Acting United States Attorney Kevin Davidson. On Nov. 10, 2024, law enforcement arrested 25-year-old Jaquez Myrick, alleging that he illegally possessed a machinegun.
According to the criminal complaint and other court records, on Nov. 10, 2024, law enforcement responded to a reported mass shooting at a parking lot on the campus of Tuskegee University in Tuskegee, Alabama. Upon arrival, responding officers observed a large number of people gathered in the parking lot and heard shots being fired. One of the officers observed Myrick holding a handgun and detained him. When agents inspected the handgun retrieved from Myrick, they determined that it was equipped with a machinegun conversion device.
When installed on a firearm, a machinegun conversion device, commonly known as a “switch,” allows a gun to function as a fully automatic weapon capable of firing up to 20 rounds per second with a single pull of the trigger. The possession of a machinegun — which under the relevant federal statute, includes the possession of a conversion device alone — carries a penalty of up to ten years in prison and a $250,000 fine. Myrick made his initial appearance in federal court this afternoon in Montgomery.
A criminal complaint is merely an allegation that a crime has been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The Alabama Law Enforcement Agency (ALEA), Tuskegee University Police Department, City of Tuskegee Police Department, Macon County Sheriff’s Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Federal Bureau of Investigation (FBI), the Fifth Judicial Circuit District Attorney’s Office, and the Alabama Attorney General’s Office are investigating this case. Assistant U.S. Attorney Tara S. Ratz for the Middle District of Alabama is prosecuting the case.
Law enforcement is asking for the public’s assistance in this investigation. Anyone with information is asked to please submit tips at 1-800-CALL-FBI and upload any digital files regarding this incident online at: fbi.gov/tuskegeeshooting24.
Montgomery County Man, N.J. Woman Sentenced for Conspiracy to Commit Visa Fraud, Conspiracy to Obstruct Justice, RespectivelyRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that two defendants charged for their roles in the alleged Savani Group racketeering conspiracy have been sentenced by United States District Court Judge Jeffrey L. Schmehl.
Vivek Savani, 37, of North Wales, Pennsylvania, was sentenced today to 10 days' imprisonment, three years of supervised release, the first 60 days of which are served in home detention, a $1,000 fine, and a $100 special assessment for conspiracy to commit visa fraud. He pleaded guilty to that offense in July, admitting involvement in a scheme to unlawfully obtain H1-B nonimmigrant work visas, which allow an employer to temporarily employ a foreign worker in the United States on a non-immigrant basis in a “specialty occupation.”
Susan Malpartida, 29, of Passaic, New Jersey, was sentenced on Friday to one year of probation, a $500 fine, and a $100 special assessment for conspiracy to obstruct justice. In May, Malpartida pleaded guilty to lying to a federal grand jury in an effort to thwart a government investigation into serious visa fraud crimes allegedly committed at her employer, American Unity Dental.
Vivek Savani and Malpartida were among 12 defendants charged in a sweeping 42-count indictment unsealed in January 2023, which alleged that, for more than a decade, brothers Bhaskar Savani, Arun Savani, and Niranjan Savani, and others operated a criminal enterprise through a multi-state network of dental practices and related dental businesses. (Note: Vivek Savani is not related to the Savani brothers.) The case is scheduled to go to trial in April 2025.
This case was investigated by the FBI; the Department of Health and Human Services Office of Inspector General; IRS Criminal Investigation; Homeland Security Investigations; the Department of State’s Diplomatic Security Service; the Food and Drug Administration Office of Criminal Investigations; the Department of Labor Office of Inspector General; the Pennsylvania Attorney General’s Office; and the State of Iowa Medicaid Fraud Control Unit.
The case is being prosecuted by Assistant United States Attorneys Lesley Bonney, Kevin Jayne, and Anthony Scicchitano, and Department of Justice Money Laundering and Asset Recovery Section Attorney Darrin McCollough, Senior Policy Advisor. The asset seizure and forfeiture is being prosecuted by Assistant United States Attorneys Sarah Grieb and Andrew Jenemann.
Matawan Cardiologist Sentenced to 35 Months in Prison for Defrauding Health Insurance Companies of More Than $1.9 Million through Health Care Fraud SchemeRead the Press Release
TRENTON, N.J. – The owner and sole medical provider of a New Jersey medical practice was sentenced today to 35 months in prison for orchestrating a health care fraud scheme causing over $1.9 million in insurance reimbursements for false claims, U.S. Attorney Philip R. Sellinger announced.
Dr. Fazal Panezai, 76, of Morganville, New Jersey, previously pleaded guilty before U.S. District Judge Georgette Castner to an information charging him with participating in a health care fraud scheme. Judge Castner imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
Panezai, who owned and operated Matawan-Aberdeen Heart & Medical Center, for years submitted false claims to at least six health insurance benefit programs for office visits that either never occurred or did not take place for the length of time that he claimed.
For example, Panezai submitted claims for office visits lasting approximately 1,675 minutes – approximately 27.9 hours – for one day’s worth of office visits on May 27, 2022. Panezai also billed health insurance providers over $80,000 for office visits when he was out of the country and not conducting any office visits. Panezai also submitted claims for office visits when patients only picked up a prescription for a controlled substance from the front desk and never met with him. The false claims caused insurance plans to issue reimbursement checks to the center. Panezai kept the illicit profits, which totaled more than $1.9 million.
In addition to the prison term, Judge Castner sentenced Panezai to three years of supervised release and ordered him to pay restitution of $1.95 million.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation leading to the sentencing. He also thanked the Matawan Police Department.
The government is represented by Assistant U.S. Attorneys DeNae Thomas of the Health Care Fraud Unit and Jessica R. Ecker of the Criminal Division in Newark.
Leader of Real Estate Investment Firm Sentenced to 12 Years in Prison for Role in $658 Million Ponzi Scheme and Multimillion-Dollar Tax Evasion ConspiracyRead the Press Release
NEWARK, N.J. – The shadow chief executive officer of National Realty Investment Advisors LLC (NRIA) was sentenced today to 144 months in prison for orchestrating a scheme to defraud more than 2,000 investors in a $658 million Ponzi scheme and conspiring to evade millions of dollars in tax liabilities, U.S. Attorney Philip R. Sellinger announced.
Thomas Nicholas Salzano, aka “Nicholas Salzano,” 66, of Secaucus, New Jersey, previously pleaded guilty before U.S. District Judge Evelyn Padin to securities fraud, conspiracy to commit wire fraud, and conspiracy to defraud the United States. Salzano admitted he made numerous misrepresentations to investors while he secretly ran NRIA behind the scenes. He admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends. Salzano also admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends and failing to report and pay taxes on those misappropriated funds. Judge Padin imposed the sentence today in Newark federal court.
“For years, Salzano, operating from the shadows to conceal his prior history of fraud, told lie after lie to investors, continuously deceived them, and operated his business as a Ponzi scheme, through which he stole money from thousands of investors in order to support his lavish lifestyle. His greed and flagrant disregard for the law caused staggering losses in excess of $650 million. This office will continue to prioritize prosecuting individuals, like Salzano, who engage in rampant fraud to ensure they are held accountable with long jail sentences and are ordered to make their victims whole.”
U.S. Attorney Philip R. Sellinger
“Salzano trampled on the trust that his clients placed in him to invest their money prudently but instead he stole their investments for his own self-enrichment through his atrocious scheme which resulted in the theft of over $650 million,” said Harry Chavis, Jr., Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office. “Today’s sentencing of Salzano should send a message to others who choose to prey on innocent victims through similar investment fraud schemes that IRS – Criminal Investigation and our law enforcement partners are committed to pursuing justice for all Americans that are victimized by these schemes. Salzano’s clients were not the only victim of this scheme, every American taxpayer was also victimized by Salzano when he failed to pay tens of millions of dollars in taxes which would have funded local schools, infrastructure projects, and social programs for those in need.”
According to documents filed in this case and statements made in court:
From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC (the “Fund”), a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions. These included the financial position of NRIA, the manner in which the defendants and their conspirators used Fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.
Salzano and his conspirators executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors; advertisements on billboards, television, and radio; and meetings and presentations to investors. Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors, which were intended to mislead Fund investors into believing that NRIA was a solvent business that generated significant profits. In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors. Despite investing almost none of his own capital into the business, Salzano misappropriated millions of dollars of investor money to support his lavish lifestyle, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA.
Salzano concealed his true managerial role at NRIA in an effort to avoid scrutiny from investors of his history of fraud at a large telecommunications company. In addition to defrauding investors, Salzano orchestrated a separate, but related, conspiracy to avoid paying taxes on his misappropriated funds.
In addition to the prison term, Judge Padin sentenced Salzano to three years of supervised release. As part of his plea agreement, Salzano has agreed to a forfeiture money judgment of $8.52 million, full restitution of $507.4 million to the victims of his offenses, and has agreed to pay $6.46 million to the IRS.
U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Chavis in Boston; and special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation, with assistance from FBI Headquarters Criminal Investigative Division.
The government is represented by Assistant U.S. Attorneys Jonathan Fayer, Lauren E. Repole, and John Mezzanotte, of the U.S. Attorney’s Office’s Criminal Division, and Trial Attorney Samuel Bean of the U.S. Justice Department’s Tax Division.
Las Vegas Man Sentenced to over 16 Years in Prison for Sexual Exploitation of TeenagerRead the Press Release
LAS VEGAS – A Las Vegas man was sentenced today by United States District Judge Jennifer A. Dorsey to 16 years and eight months in prison to be followed by 10 years of supervised release for coercion and enticement, child sexual exploitation, and possession of child sexual abuse material (CSAM).
According to court documents, Kenton Hardy King (29) met a 15-year-old child through Omegle, an online chat platform. In June 2020, he coerced and enticed the victim to engage in sexual activity with him and to engage in sexually explicit conduct for the purpose of producing sexually explicit material. King possessed CSAM on two of his cell phones. He threatened to send images and video of the victim to the victim’s family, friends, and schoolmates.
In June 2024, following a five-day trial, a jury found King guilty of one count each of coercion and enticement; sexual exploitation of children; and possession of child pornography.
United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.
The FBI and the Henderson Police Department investigated the case. Assistant United States Attorneys Steven Rose and Jean Ripley prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse, launched in May 2006 by the Justice Department. Led by U.S. Attorney’s Offices and 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.justice.gov/psc.
Anyone with information on suspected child sexual exploitation can contact the National Center for Missing and Exploited Children at 1-800-THE-LOST (1-800-843-5678) or https://report.cybertip.org.
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KC Woman Sentenced to 45 Years for Sexual Exploitation of Two Child VictimsRead the Press Release
SPRINGFIELD, Mo. – A Kansas City, Mo., woman was sentenced in federal court today for the sexual exploitation of two children.
Jessica Ann Young, 34, was sentenced by U.S. District Judge Stephen R. Bough to 45 years in federal prison without parole.
On March 11, 2024, Jessica Young pleaded guilty to two counts of the sexual exploitation of a minor. Her husband, Houston Wade Young, 37, was sentenced on July 30, 2024, to life in federal prison without parole. Houston Young pleaded guilty to one count of the sexual exploitation of a minor on Jan. 30, 2024.
Houston Young, while an inmate at the Vernon County jail, was found to be in possession of a cell phone that contained images of child pornography on March 5, 2020. Young was being detained pending a civil proceeding to determine whether he should be civilly committed as a sexually violent predator for his prior sex offense convictions.
On March 7, 2020, law enforcement officers received information that Jessica Young had sent pornographic images of a 7-year-old child (identified in court documents as “John Doe 1”) to Houston Young’s cell phone. Investigators found text messages on the cell phone between Jessica and Houston Young that discussed sexually abusing John Doe 1. During the text messages, Jessica Young sent Houston Young two pornographic images of John Doe 1. Multiple other images of child pornography sent by Jessica Young also were found on Houston Young’s cell phone.
Jessica Young admitted she had sexually abused two child victims, John Doe 1 and 13-year-old John Doe 2, on multiple occasions. Jessica Young also admitted that she had recorded video of herself sexually abusing John Doe 2.
A forensic analysis of Houston Young’s cell phone determined that he sent images of child pornography to Jessica Young and a 16-year-old child victim (identified in court documents as “Jane Doe”). Houston Young sent pornographic images of himself to Jane Doe, solicited pornographic images of her that she sent to him, and engaged in sexual conversations. Jane Doe told investigators she met Houston Young on a game room chat, League of Legends, and started talking via that forum. They communicated via text, the Kik and Whatsapp applications, and video chat.
Houston Young was involuntarily committed to the Missouri Department of Mental Health’s Sex Offender Rehabilitation and Treatment Services program in February 2021. He has two prior felony convictions related to the sexual exploitation of children. He was convicted of child molestation in Wright County, Mo., in 2005 and of possessing child pornography in Jackson County, Mo., in 2016.
This case was prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI, the Vernon County, Mo., Sheriff’s Department, and the Kentucky Department of Criminal Investigations.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Justice Department Sues to Block UnitedHealth Group’s Acquisition of Home Health and Hospice Provider AmedisysRead the Press Release
The Justice Department, together with the Attorneys General of Maryland, Illinois, New Jersey, and New York, filed a civil antitrust lawsuit today to block UnitedHealth Group Incorporated (UnitedHealth)’s proposed $3.3 billion acquisition of rival home health and hospice services provider Amedisys Inc. (Amedisys). The complaint filed in the District of Maryland alleges that the transaction would eliminate competition between UnitedHealth and Amedisys (Defendants). Since UnitedHealth’s prior acquisition of Amedisys’s home health and hospice rival LHC Group Inc. (LHC) in 2023, Defendants have been two of the largest home health and hospice providers in the United States. Eliminating the competition between UnitedHealth and Amedisys would harm patients who receive home health and hospice services, insurers who contract for home health services, and nurses who provide home health and hospice services.
“We are challenging this merger because home health and hospice patients and their families experiencing some of the most difficult moments of their lives deserve affordable, high quality care options,” said Attorney General Merrick B. Garland. “The Justice Department will not hesitate to check unlawful consolidation and monopolization in the healthcare market that threatens to harm vulnerable patients, their families, and health care workers.”
“Millions of patients depend on United and Amedisys to receive home health and hospice care in the comfort of their homes,” said Principal Deputy Associate Attorney General Benjamin C. Mizer. “The Department’s lawsuit demonstrates our commitment to ensuring that consolidation does not threaten quality, affordability, or wages in these vital healthcare markets. I commend the staff of the Antitrust Division for their extraordinary work on this matter.”
“American healthcare is unwell. Unless this $3.3 billion transaction is stopped, UnitedHealth Group will further extend its grip to home health and hospice care, threatening seniors, their families and nurses,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “I want to thank my colleagues at the Antitrust Division for their tireless efforts to fight on behalf of Americans for a competitive economy.”
As described in the complaint, home health and hospice services constitute critically important parts of the American healthcare system. Home health care helps patients recover from hospitalization or receive continuing treatment for a chronic condition at home, while hospice provides comfort and support to terminally ill patients and their family members. Patients rely on the skill and expertise of home health and hospice nurses, who must effectively treat patients at home.
Today, Defendants are fierce competitors in the provision of home health and hospice services. According to the complaint, Amedisys’s former CEO and current Board Chairman, has acknowledged that the “pure competition” between UnitedHealth and Amedisys helps them “keep each other honest” and “driv[e] better and better quality” to the benefit of their patients. Further, the two companies view each other as close competitors for home health and hospice nurses. UnitedHealth’s proposed acquisition of Amedisys would eliminate that competition and threaten the benefits it provides. UnitedHealth’s market share after the transaction would make the merger presumptively illegal in:
- Hundreds of local home health care markets, with an annual volume of commerce exceeding $1.6 billion annually, in 23 states and the District of Columbia;
- Dozens of local hospice markets, with an annual volume of commerce exceeding $300 million annually, in 8 states; and
- Hundreds of local markets for home health and hospice nurse labor, employing at least 8,000 nurses, in 24 states.
To address some of the overlaps between UnitedHealth and Amedisys, UnitedHealth has proposed to divest certain facilities to VitalCaring Group (VitalCaring). But as the complaint alleges, the proposed divestiture does not alleviate harm in over 100 home health, hospice, and labor markets, which generate at least a billion dollars in revenue annually, serve at least 200,000 patients, and employ at least 4,000 nurses. As further alleged in the complaint, VitalCaring has lower quality scores than either UnitedHealth or Amedisys and is beset by financial challenges, including a potential legal judgment approaching a half-billion dollars. According to a Texas court, before becoming CEO of VitalCaring, its current CEO was running a competitor of VitalCaring while also running VitalCaring “from the shadows.”
The United States also seeks civil penalties against Amedisys for falsely certifying compliance with its obligations under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The complaint alleges that Amedisys violated the HSR Act because, at the time of its sworn certification, Amedisys failed to produce millions of documents or disclose the deletion of other documents. For each day that Amedisys was in violation of the HSR Act, the United States seeks a monetary penalty of up to $51,744, as authorized by statute.
UnitedHealth is a publicly traded Delaware corporation headquartered in Minnetonka, Minnesota. UnitedHealth is a vertically integrated insurer, healthcare provider, pharmacy benefit manager, and healthcare software and services vendor that brought in $372 billion in revenue in 2023. In 2022, before their company was acquired by UnitedHealth, LHC nurses and other healthcare professionals made approximately 12 million visits to patients in 37 states and the District of Columbia and earned over $2.3 billion in revenue.
Amedisys is a home health and hospice services provider and a publicly traded Delaware corporation headquartered in Baton Rouge, Louisiana. In 2023, Amedisys nurses and other healthcare professionals made 10.6 million visits to patients in 37 states and the District of Columbia, earning the company $2.2 billion in revenue.
Jury Finds Lakeland Man Guilty of Conspiracy to Distribute CocaineRead the Press Release
Orlando, FL – United States Attorney Roger B. Handberg announces that a federal jury has found Damion Clarke (33, Lakeland) guilty of conspiring to distribute cocaine. Clarke faces a maximum penalty of 20 years in federal prison. His sentencing hearing has been scheduled for March 12, 2025.
According to the evidence and testimony presented during the three-day trial, the FBI Orlando Safe Streets Task Force began an investigation into a Jamaican Criminal Enterprise engaged in the distribution of controlled substances in Central Florida. The FBI received information from a confidential source that Clarke had connections to this enterprise and was willing to connect them with Rafick Gilpin, an individual who distributed large volumes of cocaine, in exchange for a portion of the profits from the drug transactions. The FBI utilized the confidential source and an undercover agent to conduct controlled purchases of cocaine ranging from ounces to one kilogram, as well as firearms, from Gilpin and his co-conspirators from November 2021 until July 2022 in Orlando. During the course of the investigation, Clarke acted as the middleman between the confidential source and Gilpin by introducing the parties, facilitating their communications during the negotiations and lead ups to the transactions, and ensuring the transactions were successfully completed.
On August 8, 2023, Gilpin was sentenced to 10 years in federal prison for conspiracy to distribute cocaine and possession of firearms in furtherance of a drug trafficking offense.
This case was investigated by the Federal Bureau of Investigation, the Orlando Police Department, and the Apopka Police Department. It is being prosecuted by Assistant United States Attorney Michael Sartoian.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Jacksonville Sex Offender Indicted for Attempting to Meet A 13-Year-Old Child to Engage in Sexual ActivityRead the Press Release
Jacksonville, Florida – United States Attorney Roger B. Handberg announces the return of an indictment charging Jeremy Wayne Leggett (36, Jacksonville) with using the internet to attempt to entice a child to engage in sexual activity. If convicted, Leggett faces a minimum penalty of 10 years, up to life, in federal prison, and a potential life term of supervised release. Leggett is a registered child sex offender, having been previously convicted in Florida in 2020 of traveling to meet a child to commit an unlawful sexual offense and transmission of harmful materials to a child. Leggett has been ordered detained pending the outcome of his case.
According to court documents, on June 16, 2023, an undercover FBI agent (the “UC”) in the Jacksonville area, posing as a minor child, was working online in a particular social media application (app) to identify individuals seeking to make contact with and engage in sexual activity with children. The UC engaged in online conversation with an app username “dAddi” who posted a notice in a public chat room that read “Lookingfor[under 18 emoji] wannaspoiladaughter.” During this online conversation, user “dAddi,” who was subsequently identified as Leggett, was advised that the “child” was 13 years old. Leggett asked if the “child” “[l]ike[d] older men,” and sent the “child” a photo of himself. After more conversation, Leggett suggested that they meet in person for sexual activity, and he sent the “child” an explicit photo of himself. During the next three days, Leggett reinitiated text messages with the UC and continued attempting to persuade the “child” to meet for sex and to send him sexually suggestive photos.
On June 19, 2023, Leggett and the “child” made arrangements to meet at a shopping center in Jacksonville. Later that evening, Leggett went to the agreed-upon location and drove around the parking lot there for about 30 minutes. When law enforcement officers attempted to make contact with Leggett, he quickly reversed his vehicle and fled the scene. A short time later, officers with the Jacksonville Sheriff’s Office and FBI agents located Leggett at a residence in Jacksonville and arrested him.
This case was investigated by the Federal Bureau of Investigation, the Jacksonville Sheriff’s Office, and the Naval Criminal Investigative Service. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in 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 child victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Insurance Mogul Pleads Guilty to $2B Fraud and Money Laundering SchemeRead the Press Release
A Florida man pleaded guilty today to conspiracy to commit offenses against the United States and conspiracy to commit money laundering in connection with a scheme to defraud insurance regulators and policyholders through a web of companies based in North Carolina, Bermuda, Malta, and elsewhere.
According to court documents, from no later than 2016 through at least 2019, Greg Lindberg, 54, of Tampa, conspired with others to defraud various insurance companies, other third parties, and ultimately thousands of insurance policyholders. Lindberg and others conspired to deceive the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his companies, and improperly used insurance company funds for his personal benefit. Lindberg and his co-conspirators caused companies he controlled to invest more than $2 billion in loans and other securities with his own affiliated companies and laundered the proceeds of the scheme. As set forth in the indictment, Lindberg directed the scheme and personally benefitted from the fraud in part by “forgiving” more than $125 million in loans to himself from the insurance companies that he controlled.
To carry out the conspiracies, Lindberg and others engaged in circular transactions among Lindberg’s web of entities using insurance company funds and made and caused to be made various materially false and misleading statements and representations to and omitted material information from regulators, various ratings agencies, insurance companies, insurance policyholders, and others regarding these transactions.
As a result of Lindberg’s conduct, his insurance companies, third-party entities, and policyholders suffered substantial financial hardship, and some of his insurance companies have been placed in rehabilitation and liquidation.
“Greg Lindberg and his co-conspirators misused $2 billion of company funds in their international scheme to defraud corporate victims, regulators, and policyholders,” said Principal Deputy Assistant Attorney General Nicole Argentieri, head of the Justice Department’s Criminal Division. “Thousands of policyholders suffered substantial financial hardship as a result of Lindberg’s fraud scheme, which left multiple companies in or on the brink of liquidation. The Justice Department will not hesitate to hold corporate executives accountable when they threaten critical sectors of the economy, like the insurance industry, to enrich themselves.”
“Lindberg created a complex web of insurance companies, investment businesses, and other business entities and exploited them to engage in millions of dollars of circular transactions. Lindberg’s actions harmed thousands of policyholders, deceived regulators, and caused tremendous risk for the insurance industry,” said U.S. Attorney Dena J. King for the Western District of North Carolina. “Today’s guilty plea affirms our commitment to protecting the public from predatory financial schemes and bringing to justice those who betray public trust for personal gain.”
“Lindberg’s elaborate network of investments, insurance companies, and financial deals was designed to exploit the insurance system and drain millions from policyholders to enrich himself at the public’s expense,” said Special Agent in Charge Robert M. DeWitt of the FBI Charlotte Field Office. “The FBI remains steadfast in our commitment to root out financial fraud.”
Lindberg pleaded guilty to one count of conspiracy to commit offenses against the United States, including wire fraud, investment adviser fraud, and crimes in connection with insurance business, and one count of money laundering conspiracy. He faces a maximum penalty of five years in prison on the conspiracy to commit offenses against the United States count and 10 years in prison on the money laundering conspiracy count. In addition to pleading guilty to these charges, on May 15, following a retrial, Lindberg was convicted by a federal jury in Charlotte of conspiracy to commit honest services wire fraud and bribery concerning programs receiving federal funds for orchestrating a bribery scheme involving independent expenditure accounts and improper campaign contributions, aimed at bribing the elected North Carolina Commissioner of Insurance to influence the regulation of Lindberg’s insurance companies. A sentencing date has not yet been set. A federal district court judge will determine Lindberg’s sentence in both cases after considering the U.S. Sentencing Guidelines and other statutory factors in each case. Lindberg was remanded into the custody of the U.S. Marshals.
In December 2022, one of Lindberg’s top executives, Christopher Herwig, pleaded guilty in a related case to conspiring with Lindberg and others to commit offenses against the United States, including wire fraud, investment advisor fraud, and money laundering, as well as to the making of false statements in the business of insurance. Herwig is also awaiting sentencing.
The FBI Charlotte Field Office is investigating the case. The Securities and Exchange Commission’s Chicago Regional Office provided valuable assistance to the investigation.
Trial Attorney Lyndie Freeman of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Dan Ryan and Taylor Stout for the Western District of North Carolina are prosecuting the case.
Insurance Mogul Pleads Guilty to $2B Fraud and Money Laundering SchemeRead the Press Release
CHARLOTTE, N.C. – A Florida man pleaded guilty today to conspiracy to commit offenses against the United States and conspiracy to commit money laundering in connection with a scheme to defraud insurance regulators and policyholders through a web of companies based in North Carolina, Bermuda, Malta, and elsewhere, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.
According to court documents, from no later than 2016 through at least 2019, Greg Lindberg, 54, of Tampa, conspired with others to defraud various insurance companies, other third parties, and ultimately thousands of insurance policyholders. Lindberg and others conspired to deceive the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his companies, and improperly used insurance company funds for his personal benefit. Lindberg and his co-conspirators caused companies he controlled to invest more than $2 billion in loans and other securities with his own affiliated companies and laundered the proceeds of the scheme. As set forth in the indictment, Lindberg directed the scheme and personally benefitted from the fraud in part by “forgiving” more than $125 million in loans to himself from the insurance companies that he controlled.
To carry out the conspiracies, Lindberg and others engaged in circular transactions among Lindberg’s web of entities using insurance company funds and made and caused to be made various materially false and misleading statements and representations to and omitted material information from regulators, various ratings agencies, insurance companies, insurance policyholders, and others regarding these transactions.
As a result of Lindberg’s conduct, his insurance companies, third-party entities, and policyholders suffered substantial financial hardship, and some of his insurance companies have been placed in rehabilitation and liquidation.
“Greg Lindberg and his co-conspirators misused $2 billion of company funds in their international scheme to defraud corporate victims, regulators, and policyholders,” said Principal Deputy Assistant Attorney General Nicole Argentieri, head of the Justice Department’s Criminal Division. “Thousands of policyholders suffered substantial financial hardship as a result of Lindberg’s fraud scheme, which left multiple companies in or on the brink of liquidation. The Justice Department will not hesitate to hold corporate executives accountable when they threaten critical sectors of the economy, like the insurance industry, to enrich themselves.”
“Lindberg created a complex web of insurance companies, investment businesses, and other business entities and exploited them to engage in millions of dollars of circular transactions. Lindberg’s actions harmed thousands of policyholders, deceived regulators, and caused tremendous risk for the insurance industry,” said U.S. Attorney King. “Today’s guilty plea affirms our commitment to protecting the public from predatory financial schemes and bringing to justice those who betray public trust for personal gain.”
“Lindberg’s elaborate network of investments, insurance companies, and financial deals was designed to exploit the insurance system and drain millions from policyholders to enrich himself at the public’s expense,” said Special Agent in Charge Robert M. DeWitt of the FBI Charlotte Field Office. “The FBI remains steadfast in our commitment to root out financial fraud.”
Lindberg pleaded guilty to one count of conspiracy to commit offenses against the United States, including wire fraud, investment adviser fraud, and crimes in connection with insurance business, and one count of money laundering conspiracy. He faces a maximum penalty of five years in prison on the conspiracy to commit offenses against the United States count and 10 years in prison on the money laundering conspiracy count. In addition to pleading guilty to these charges, on May 15, following a retrial, Lindberg was convicted by a federal jury in Charlotte of conspiracy to commit honest services wire fraud and bribery concerning programs receiving federal funds for orchestrating a bribery scheme involving independent expenditure accounts and improper campaign contributions, aimed at bribing the elected North Carolina Commissioner of Insurance to influence the regulation of Lindberg’s insurance companies. A sentencing date has not yet been set. A federal district court judge will determine Lindberg’s sentence in both cases after considering the U.S. Sentencing Guidelines and other statutory factors in each case. Lindberg was remanded into the custody of the United States Marshals.
In December 2022, one of Lindberg’s top executives, Christopher Herwig, pleaded guilty in a related case to conspiring with Lindberg and others to commit offenses against the United States, including wire fraud, investment advisor fraud, and money laundering, as well as to the making of false statements in the business of insurance. Herwig is also awaiting sentencing.
The FBI Charlotte Field Office is investigating the case. The Securities and Exchange Commission’s Chicago Regional Office provided valuable assistance to the investigation.
Assistant U.S. Attorneys Dan Ryan and Taylor Stout for the Western District of North Carolina and Trial Attorney Lyndie Freeman of the Criminal Division’s Fraud Section are prosecuting the case.
Inmate Sentenced to Prison for Possessing Weapon at FCI McDowellRead the Press Release
BLUEFIELD, W.Va. – Tony Lashon Cleveland Jr., 27, an inmate at the Federal Correctional Institution (FCI) McDowell, was sentenced today to one year and three months in prison, to be followed by three years of supervised release, for possession of a weapon by an inmate at a federal prison.
According to court documents and statements made in court, on or about September 12, 2023, an FCI McDowell staff member conducted a pat-down search of Cleveland and found a handcrafted weapon commonly known as a “shank” in one of his socks. The shank was a piece of metal approximately five inches long with a sharpened point on one end and melted plastic on the other end to form a handle. Cleveland admitted to possessing the shank, and further admitted that it was designed and intended to be used as a weapon. Today’s sentence will run consecutively to his undischarged term of incarceration.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Federal Bureau of Prisons.
Senior United States District Judge David A. Faber imposed the sentence. Assistant United States Attorney Timothy D. Boggess prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 1:24-cr-62.
Hartford, Connecticut Man Sentenced to 35 Months in Northeast Kingdom Drug ConspiracyRead the Press Release
Burlington, Vermont – The United States Attorney’s Office for the District of Vermont stated that on November 8, 2024, Marvin Byrd, 29, of Hartford, Connecticut, was sentenced by Chief United States District Judge Christina Reiss to a term of 35 months’ imprisonment to be followed by a 3-year term of supervised release. Byrd previously pleaded guilty to conspiracy to distribute controlled substances, including fentanyl.
According to court records, Byrd agreed with multiple other individuals to acquire and ultimately distribute controlled substances in Orleans County in Vermont. Between at least March and August 2023, Byrd—who went by “TJ” while in Vermont—stayed with multiple local residents in Orleans County and used their residences as places to prepare and distribute controlled substances. The last residence Byrd occupied for that purpose was in Barton, Vermont. Investigators performed multiple controlled purchases involving Byrd and his coconspirators in that time, including one purchase of fentanyl directly from Byrd in April 2023.
United States Attorney Nikolas P. Kerest noted that this case was part of a sustained joint federal, state, county and local law enforcement investigation into drug-and-firearms-trafficking activities in Vermont’s Northeast Kingdom. He stated that the United States Attorney’s Office remains committed to its partnerships in the Kingdom and their long-term, in-depth investigations. U.S. Attorney Kerest commended the collaborative investigatory efforts of the Northeast Vermont Drug Task Force; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; Homeland Security Investigations; the Orleans County Sheriff’s Department; the Newport Police Department; the Air & Marine Operations division of Customs and Border Protection, and the Federal Bureau of Investigation.
The case was prosecuted by Assistant U.S. Attorney Matthew Lasher. Byrd was represented by Assistant Federal Public Defender Sara Puls and defense attorney Arthur Ruben, Esq.
Georgia Man Sentenced to Prison for Engaging in a $200,000 Check Fraud Scheme in UtahRead the Press Release
SALT LAKE CITY, Utah – Toddorius Goodwin, 34, of Atlanta, Georgia, was sentence today to 36 months’ imprisonment after he participated in a scheme to steal from banks and credit unions in Utah by cashing counterfeit checks.
In addition to Goodwin’s term of imprisonment, U.S. District Court Judge Tena Campbell sentenced Goodwin to five years’ supervised release and ordered him to pay over $214,000 in restitution to the banks and credit unions he stole from.
In August 2024, Goodwin pleaded guilty to conspiracy to commit bank fraud and aggravated identity fraud.
According to court documents and statements at Goodwin’s sentencing hearing, from April to October 2022, Goodwin and his associates traveled from Georgia to Utah several times to engage in a sophisticated check fraud scheme. They recruited impoverished individuals locally to take on the risk – as the runners entering the banks to physically cash the forged checks and potentially face arrest. The scheme was a proactive, well-planned, and team-orchestrated crime. Goodwin and his associates stole payroll checks from private mailboxes, altered the “payable to” names on the checks to the recruited individual’s name, and sent that individual into various banks to cash the forged checks in exchange for a small cut of the profit. Goodwin and his associated trained the recruits and coached them through an earpiece from a distance. Goodwin and his associates successfully cashed at least $214,179.51 worth of counterfeit checks in Utah within just a few months.
“Seeking justice for financial fraud is a priority for the U.S. Attorney’s Office,” said U.S. Attorney Trina A. Higgins of the District of Utah. “Mr. Goodwin’s behavior demonstrates a disrespect for the law and the community. By working with our law enforcement partners, it is our hope, through prosecution, we can deter these crimes from further occurring in our communities.”
“Exploiting the vulnerable to commit check fraud is not only a crime against the law but a grave injustice against humanity," said HSI Las Vegas Special Agent in Charge Chris Miller. "Those who prey on the impoverished to cash fraudulent checks, manipulating their desperation for personal gain, stands as a stark reminder of the darkest facets of greed. This sentencing is a reminder that Justice will find them, and their deceit will not go unpunished.”
The case was investigated by Homeland Security Investigations (HSI).
Special Assistant United States Attorney Sachi Jepson of the U.S. Attorney’s Office for the District of Utah is prosecuting the case.
Fresno County Man Indicted for Mailing Falsified Disability Insurance ClaimsRead the Press Release
FRESNO, Calif. — A federal grand jury returned an eight-count indictment against Leonel Hernandez, 51, of Parlier, charging him with mail fraud, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Hernandez was employed as a supervisor for a farm labor contractor in Sanger. Between March 2017 and October 2020, Hernandez submitted falsified disability insurance claims using identities of individuals known to him, including some who were already deceased and some who were farm laborers in Sanger or Fresno. Hernandez forged physician signatures on the disability insurance claim forms, falsely certifying that the physicians had examined the claimants and falsely certifying other medical information that was allegedly obtained through such examinations. Hernandez used the U.S. mail to submit at least 20 claims and caused losses exceeding $300,000.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Employment Development Department. Assistant U.S. Attorneys Chan Hee Chu and Joseph Barton are prosecuting the case.
If convicted, Hernandez faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Four defendants indicted on federal firearms chargesRead the Press Release
SAVANNAH, GA: Newly returned indictments in the Southern District of Georgia include felony charges for illegal firearms possession, while additional defendants have been sentenced to federal prison or await further proceedings after pleading guilty to federal gun charges.
“As we continue to see the proliferation of illegal guns converted to fully automatic fire, we commend our law enforcement partners for acting to contain this threat to our neighborhoods,” said Jill E. Steinberg, U.S. Attorney for the Southern District of Georgia. “Keeping firearms out of the hands of felons remains a priority for our office.”
The cases are prosecuted as part of Project Safe Neighborhoods in collaboration with federal, state, and local law enforcement agencies, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the FBI, to reduce violent crime with measures that include targeting convicted felons who illegally possess guns.
Those indicted in November include:
- Antonio Rodriquez Holmes III, 30, of Augusta, charged with Illegal Possession of a Machine Gun, Possession of a Firearm with an Obliterated Serial Number, and Possession of a Firearm by a Convicted Felon;
- Luke Bunyun Jr., 46, of Waynesboro, Ga., charged with Possession of a Firearm by a Convicted Felon; and,
- Lemar Neil Robinson, 35, of Savannah, charged with Possession of a Firearm by a Convicted Felon.
Also charged in a recently unsealed indictment was Charlie Sapp, 57, of Savannah, charged with Possession of a Firearm by a Convicted Felon.
All indicted defendants are considered innocent unless and until proven guilty.
Defendants recently adjudicated on federal firearms charges include:
- Richard Bruce Salyer Jr., 49, of Forsyth, Ga., was sentenced to 170 months in prison after pleading guilty to Possession of a Firearm by a Convicted Felon. Chatham County police officers found a pistol in Salyer’s waistband while investigating a report of a stolen vehicle in November 2023. Salyer has two prior convictions for illegally possessing firearms, and at the time of his arrest was an escapee from the Jefferson County, Ga., Correctional Institute.
- David Kreiss, 49, of Twin City, Ga., was sentenced to 88 months in prison after pleading guilty to Possession of Firearms by a Convicted Felon. Twin City police found Kreiss in possession of a rifle and four shotguns while investigating a domestic disturbance.
- Kavon Smalls, 29, of Savannah, was sentenced to 42 months in prison after pleading guilty to Possession of a Firearm by a Convicted Felon. Savannah police found a pistol after chasing Smalls when he ran away from a vehicle that crashed during an attempted traffic stop.
- Keyeon Demar Tykeim Smith, 23, of Augusta, was sentenced to 15 months in prison and fined $1,000 after pleading guilty to Receipt of a Firearm by a Person Under Indictment. Richmond County deputies found a pistol in Smith’s possession while serving an arrest warrant.
- Maleak J. Parrish, 24, of Savannah, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Savannah police fund a pistol in Parrish’s possession during a traffic stop.
- Willie Dunbar, 45, of Villa Rica, Ga., awaits sentencing after pleading guilty to Possession of a Machine Gun. During a January traffic stop, Wheeler County deputies found Dunbar in possession of a Polymer80 “ghost gun” fitted with a device converting it to automatic fire.
- Brodrick Kyle Merritt, 42, of Augusta, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon as an armed career criminal. Richmond County deputies found a pistol in Merritt’s possession during a traffic stop. Merritt was on probation on state charges when arrested, and faces a mandatory minimum sentence of 15 years in prison.
- Raquan Williams, 23, of Savannah, awaits sentencing after pleading guilty to False Statement During the Purchase of a Firearm. Williams attempted to purchase a shotgun from a Chatham County firearms dealer in June 2023, falsely claiming he was not under indictment at the time on state charges for armed robbery and aggravated assault.
- Stanley Hall, 22, of Savannah, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Savannah police found Hall in possession of a handgun while investigating a reported attempted vehicle break-in.
- Corinthian Lamar Colonel, 26, of Savannah, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Officers from the Savannah Police Department and the Georgia Department of Community Supervision found two firearms in Colonel’s residence during a September 2023 search.
- Eddie Robertson, 30, of Savannah, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Savannah police officers found Robertson in possession of a handgun after a December 2023 traffic stop and foot chase.
- Jacorey Rivers, 32, of Savannah, awaits sentencing after pleading guilty to Possession of a Machinegun, and Possession with Intent to Distribute Fentanyl. Rivers was on supervised release when he fled from a traffic stop and crashed. Officers found a Glock pistol in his possession that had been converted to automatic fire.
- Scottie Eugene Bryant, 48, of Grovetown, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Grovetown police officers searched Bryant’s residence and seized multiple firearms in April 2023.
The cases are being prosecuted for the United States by the Southern District of Georgia U.S. Attorney’s Office.
Under federal law, it is illegal for an individual to possess a firearm if he or she falls into one of nine prohibited categories including being a felon; illegal alien; or unlawful user of a controlled substance. Further, it is unlawful to possess a firearm in furtherance of a drug trafficking offense or violent crime. It is also illegal to purchase – or even to attempt to purchase – firearms if the buyer is a prohibited person or illegally purchasing a firearm on behalf of others. Lying on ATF Form 4473, which is used to lawfully purchase a firearm, also is a federal offense.
For more information from the ATF on the lawful purchasing of firearms, please see: https://www.atf.gov/qa-category/atfw-form-4473
Four Nigerian Citizens Sentenced in Connection with International Romance ScamsRead the Press Release
Memphis, TN – Four Nigerian citizens residing in the United States and Canada have been sentenced to federal prison for their roles in a conspiracy that perpetuated a series of romance and investment scams against victims across the United States, including in Western Tennessee. All four defendants were convicted of conspiracy to commit money laundering as part of a scheme that used false identities and email accounts on internet dating sites to trick people into wiring or mailing money to shell companies and fictitious agents. Reagan Fondren, Acting U.S. Attorney for the Western District of Tennessee, announced the sentences today.
A federal grand jury in the Western District of Tennessee indicted the following individuals on June 29, 2023 with conspiracy to commit fraud and money laundering:
- Patrick Edah, 40, a Nigerian citizen residing in the Toronto, Canada area,
- Efe Egbowawa, 41, a Nigerian citizen residing in the Atlanta area,
- Igocha Mac-Okor, 40, a Nigerian citizen residing in the Atlanta area, and
- Kay Ozegbe, 44, a naturalized U.S. citizen residing in Atlanta.
Evidence presented in court revealed that from 2017 to approximately November 2021, members of the conspiracy assumed false identities on social media, gaming applications, dating websites, and other internet-based platforms in a scheme to trick victims into entering friendships and romantic relationships. These defendants then played various roles in exploiting those connections to convince individuals to send them money via wire, check, U.S. mail, and package delivery services.
As part of the conspiracy, romance scammers or “handlers” posed as potential friends or romantic partners and entered online relationships with unwitting victims. The relationships usually developed quickly through social media contact, text messages, email, and phone calls. Once the victim was clearly engaged in the scam, the scammer would begin to ask for emergency financial assistance. If the victim sent money, the scammer would ask for increasingly larger amounts of financial assistance. There were dozens of victims who each lost amounts ranging from several thousand dollars to several hundred thousand dollars. For example, one victim who resided in the Western District of Tennessee lost over $400,000 to this scheme over the course of several months.
Edah, Egbowawa, Mac-Okor, and Ozegbe functioned as “money mules” in the conspiracy. That is, they worked in conjunction with other members of the conspiracy to move the financial proceeds of the scams through several layers of bank accounts and shell companies to hide the sources of the money and make it difficult to trace.
U.S. District Court Judge Thomas L. Parker sentenced Egbowawa to 60 months in federal prison on April 17, 2024. Judge Parker later sentenced Ozegbe to 36 months in federal prison on September 23, 2024. On October 30, 2024, Edah and Mac-Okor were sentenced by Judge Parker to 30 months and 50 months, respectively, in federal prison.
“These individuals used deception and fraud to prey on the vulnerable causing unmeasurable emotional damage and significant financial losses,” said Special Agent in Charge Joe Carrico of the FBI - Nashville Field Office, Memphis Resident Agency. “The FBI will continue to work with our law enforcement partners to target these predators and bring them to justice.”
The case was investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service.
Acting United States Attorney Reagan Fondren thanked Assistant U.S. Attorneys Tony Arvin and Scott Smith, who prosecuted this case, as well as law enforcement partners for their role in the investigation.
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For more information, please contact the Media Relations Team at [email protected]. Follow the U.S. Attorney’s Office on Facebook or on X at @WDTNNews for office news and updates.
Fort Dodge Man Guilty of Possession with Intent to Distribute MethamphetamineRead the Press Release
Craig Carnell Pickens, age 41, from Fort Dodge, Iowa, pled guilty to possession with intent to distribute methamphetamine.
At the plea hearing, evidence showed, law enforcement stopped a vehicle for an equipment violation. Upon contacting the driver, law enforcement noticed an odor of marijuana coming from the vehicle and asked the driver and Pickens, who was the passenger, to exit the vehicle. Both occupants initially refused to exit. Pickens eventually produced a glass jar of marijuana and a marijuana blunt from a backpack that was at his feet and provided it to law enforcement through the sunroof of the vehicle. After numerous requests by law enforcement, Pickens eventually exited the vehicle and was arrested. A search of the vehicle discovered multiple bags of methamphetamine totaling approximately 180 grams. Methamphetamine was found in the backpack that was at Pickens’ feet as well as drug paraphernalia.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Pickens remains in custody of the United States Marshal pending sentencing. Pickens faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, and 5 years to life of supervised release following any imprisonment.
The case was investigated by the Garner Police Department and State of Iowa Department of Public Safety, Division of Narcotics Enforcement and is being prosecuted by Assistant United States Attorney Kraig R. Hamit.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 24-CR-3032.
Follow us on X @USAO_NDIA.
Former Used-Car Dealer Sentenced to Federal Prison for $3 Million Fraud SchemeRead the Press Release
GAINESVILLE, Ga. - Mitchell C. Simpson, who stole $3 million from companies that provided floor-plan financing to his used-car dealership, has been sentenced to federal prison for wire fraud.
“Simpson abused his position of trust and hurt the companies that enabled him to operate his business,” said U.S. Attorney Ryan K. Buchanan. “Our office, along with our law enforcement partners, is dedicated to investigating and prosecuting individuals who take advantage of others under false pretenses.”
“Simpson lied to the very people who were the lifeline to his small business,” said FBI Atlanta Senior Supervisory Resident Agent Mitchell Jackson. “We value our partnerships with local and state law enforcement to ensure these offenders are held accountable and the victims get justice.”
According to U.S. Attorney Buchanan, the charges and other information presented in court: From early 2012 through early 2019, Simpson operated Mitch Simpson Motors, a used car dealership in Cleveland, Georgia. Three floor-plan lenders, Dealer Financial Holdings LLC, Americash Advance, Inc., and Floorplan Xpress, LLC-OK, each provided Simpson with a revolving line of credit. Commonly known as floor-plan financing, this credit line allowed Simpson to purchase an inventory of vehicles to re-sell to customers. Each line of credit was governed by a written contract, also known as a floor-plan financing agreement. Simpson was required to abide by the terms and conditions of the agreements, and he was required to provide the floor-plan lenders with complete and truthful information concerning all matters related to the agreements.
When Simpson wanted to borrow money to purchase a vehicle to add to his dealership’s inventory, he would contact one of the floor-plan lenders and provide that lender with a description of the vehicle, including the vehicle identification number, and the amount of the loan requested. If the vehicle was subject to any other liens or security interests, Simpson was required to disclose that fact to the floor-plan lender. If Simpson led the lender to believe that the vehicle was not subject to any other liens or security interests, the lender would transfer the requested funds to Simpson’s custody and control. In return for the loan, the dealership would grant the floor-plan lender a purchase-money security interest in the vehicle. Simpson was also required to keep the vehicle free from all other liens and security interests until sold.
Simpson defrauded the floor-plan lenders by using a single vehicle as collateral for more than one floor-plan loan, which is a deceptive and illegal practice referred to in the used-car industry as double floor-planning and triple floor-planning – a practice expressly prohibited by the floor-plan financing agreements.
To hide the double and triple floor-planning, Simpson made false and misleading statements and omitted material facts in his communications with the floor-plan lenders. In addition, whenever Simpson sold a vehicle in which one of the floor-plan lenders held a security interest, Simpson was required to hold the proceeds from the sale of that vehicle in trust for the secured lender and promptly pay the secured lender all amounts due under the applicable floor-plan financing agreement.
But Simpson did not always pay the floor-plan lenders, as required. Instead, he engaged in a shell game with vehicle titles and did not always provide truthful information to lenders concerning the location of vehicles and concerning whether vehicles had been sold. This is an illegal practice referred to in the used-car industry as operating “out of trust,” which was expressly prohibited by the floor-plan financing agreements. Simpson’s fraudulent scheme resulted in a loss of more than $3 million to the floor-plan lenders.
Mitchell C. Simpson, 56, of Cornelia, Georgia, was sentenced by U.S. District Judge Steve C. Jones to three years, five months in prison to be followed by three years of supervised release. He was also ordered to pay restitution in the amount of $105,803.70. Simpson was convicted of wire fraud on July 2, 2024, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney John Russell Phillips and former Assistant U.S. Attorney David A. O’Neal prosecuted the case.
For further information, please contact [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Pain Center Receptionist Sentenced for Conspiracy to Distribute Oxycodone and MethadoneRead the Press Release
LONDON, Ky. – A Chicago woman, Judith Harskey, 56, was sentenced Tuesday to two years in prison, by U.S. District Judge Claria Horn Boom, for conspiracy to distribute oxycodone and methadone.
According to her plea agreement, beginning in 2019 through November 2022, Harskey conspired with others to distribute oxycodone and methadone, while working as a receptionist at the Midwest Physician Pain Center, a pain clinic in Chicago. During the conspiracy timeframe, numerous Perry County, Kentucky patients regularly traveled to the clinic; and without seeing a doctor, they paid Harskey a cash co-pay. She then filled out prescriptions that were previously signed by the absent owner/physician, for oxycodone, methadone, and other controlled substances. Harskey never possessed prescribing authority.
When law enforcement ultimately executed a search warrant, on November 18, 2022, they recovered 541 blank, pre-signed prescriptions from Harskey’s office, including 30 from her purse.
Under federal law, Harskey must serve 85 percent of her prison sentence. Upon her release from prison, he will be under the supervision of the U.S. Probation Office for 3 years.
Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky, and Jim Scott, Special Agent in Charge, DEA, Louisville Field Division, jointly announced the sentence.
The investigation was conducted by the DEA. Assistant U.S. Attorney Pearce Nesbitt is prosecuting the case on behalf of the United States.
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Former Missouri State Trooper Charged with Civil Rights CrimesRead the Press Release
CAPE GIRARDEAU – A former Missouri State Highway Patrol trooper was indicted Tuesday and accused of unlawfully searching women’s cell phones during traffic stops to find nude pictures.
David McKnight, 39, was indicted by a grand jury in U.S. District Court in Cape Girardeau with one count of destroying records in a federal investigation and nine counts of deprivation of rights under color of law, namely the right to be free from unreasonable search and seizure. The indictment says that between Sept. 1, 2023, and August 19, 2024, McKnight took cell phones from nine different women. McKnight then searched the phones and used his personal cell phone to photograph nude pictures that he found, the indictment says. He later deleted the images from his cell phone, it says.
McKnight stopped most of the women for traffic violations, the indictment says. He took their phones under the auspices of confirming that they had insurance coverage or verifying their identification, it says.
“These allegations are being taken very seriously, and we’d like to encourage anyone who believes they had a concerning interaction with McKnight to contact the FBI,” said U.S. Attorney Sayler A. Fleming.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Anyone with information is asked to contact the FBI by calling 1-800-CALL-FBI (800-225-5324) or via tips.fbi.gov.
The Missouri State Highway Patrol and the FBI investigated the case. Assistant U.S. Attorney Christine Krug is prosecuting the case.
Former Hinds County Sheriff Convicted for Soliciting Bribes and Providing Ammunition to a Convicted FelonRead the Press Release
Jackson, Miss. – On Friday, November 8, 2024, A federal jury convicted Marshand Crisler, a former Hinds County, Mississippi Sheriff, on both counts of an indictment charging him with soliciting and accepting $9,500 in bribes and for knowingly providing ammunition to a convicted felon. The trial lasted three days and the jury deliberated for approximately two hours.
According to court documents and evidence presented at trial, Crisler, 55, was appointed as Sheriff of Hinds County in August 2021. In September, October, and November 2021, Crisler solicited and accepted $9,500 in cash bribes in exchange for agreeing to provide information concerning criminal investigations to the convicted felon who paid the bribes, protect a jailed family member of that felon by moving that family member to a safer place within the Hinds County Jail, and award employment with the Hinds County Sheriff’s Office to the felon. Crisler also gave ammunition to that same convicted felon, knowing that the person was a convicted felon. It is against federal law for a public official to solicit or accept bribes. It is also against federal law to provide firearm ammunition to a known convicted felon.
Crisler is scheduled for sentencing on February 6, 2025, and faces a maximum penalty of 10 years in prison and a $250,000 fine for each offense. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
“This conviction should serve as notice to public officials in Mississippi who sell their office in exchange for bribes that the Department of Justice will work to hold them accountable,” said U.S. Attorney Todd W. Gee.
“The steadfast commitment of the FBI and the USAO in protecting the community has been exemplified with the conviction of Mr. Crisler,” said FBI Special Agent in Charge Robert A. Eikhoff. “Public officials accepting bribes and violating the public’s trust will continue to be aggressively investigated by the FBI.”
The case was investigated by the FBI.
Assistant U.S. Attorneys Herbert S. Carraway and Charles W. Kirkham prosecuted the case.
Former Comptroller of Athletic Club Sentenced in $1 Million Wire Fraud SchemeRead the Press Release
SAN JUAN, Puerto Rico – On November 7, 2024, United States District Court Chief Judge Raúl Arias Marxuach sentenced Zuleika Molina-Orozco, former comptroller of a not-for-profit sports and social club located at a resort in Humacao, Puerto Rico to 37 months in prison for a wire fraud scheme.
According to court documents, Molina-Orozco was the comptroller of Company A, a not-for-profit sports and social club, and had access and control over Company A’s bank account. Between October 2019 and March 2022, Molina-Orozco fraudulently made thirty-nine (39) unauthorized wire transfers from Company A’s bank account to three (3) of her credit cards and two (2) unauthorized wire transfers to another bank account, all totaling $1,100,283.36. The money the defendant obtained from the fraud scheme was used to pay the defendant’s personal credit card expenses, to purchase a 2020 Ford F-150 truck, and to transfer money to other individuals.
The defendant plead guilty to all eight counts on April 4, 2024. Molina-Orozco was ordered to pay restitution of $1,100,283.36, which corresponds to the money she obtained from the fraud scheme.
U.S. Attorney W. Stephen Muldrow of the District of Puerto Rico; and Rebecca C. González-Ramos, Special Agent in Charge of Homeland Security Investigations (HSI) made the announcement.
HSI investigated the case.
Assistant U.S. Attorney Scott H. Anderson prosecuted the case.
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Former Assistant Treasurer for Bridgestone Americas Arrested and Charged with a $15 Million Wire Fraud and Money Laundering SchemeRead the Press Release
NASHVILLE –A criminal complaint unsealed today charges Sajju Khatiwada, 43, of Franklin, Tennessee, with wire fraud and money laundering for conducting a scheme in which he submitted approximately $15 million in bogus reimbursement invoices to his employer, Bridgestone Americas, Inc., for payments to himself, announced Acting United States Attorney for the Middle District of Tennessee Thomas J. Jaworski.
According to the complaint, starting in 2016, Khatiwada was employed by Bridgestone in various positions, and he was working as Bridgestone’s Assistant Treasurer, Capital Planning and Funding, when he left the company in April 2024. Khatiwada was responsible for managing the relationships with banks that provided credit card processing services at each of the retail Bridgestone locations across the United States, acting as a liaison with bank representatives and initiating payments for bank fees and credit card processing fees.
In July 2020, Khatiwada created a phony vendor called Paymt-Tech, LLC and began submitting bogus invoices to Bridgestone for purported bank fees owed to Paymt-Tech. Each month from August 2020 to April 2024, Khatiwada sent an email from his Bridgestone email account to initiate a payment to Paymt-Tech, LLC for the fictitious monthly bank fees. The email would contain a bogus PDF invoice and would request payment of the invoice. Bridgestone approved payment of these invoices, believing they were for true bank fees for a legitimate vendor, Chase Paymentech.
In April 2024, Khatiwada left his employment at Bridgestone. Approximately two months later, Bridgestone Accounting Department personnel questioned the significant decrease in monthly bank fees being paid by Bridgestone. The subsequent investigation identified that between August 2020 and April 2024, Khatiwada had submitted 47 false invoices to Bridgestone for a total amount paid of $14,923,978.57, which the FBI traced back to Khatiwada.
If convicted, Khatiwada faces up to 20 years in federal prison on the wire fraud count and 10 years in federal prison on the money laundering count, and a fine of up to twice the value of the money laundered.
This case is being investigated by the Federal Bureau of Investigation, Nashville Field Office. Assistant U.S. Attorney Kathryn Booth is prosecuting the case.
A federal complaint is merely an allegation. The defendant is presumed innocent until proven guilty in a court of law.
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Former Air National Guardsman Sentenced to 15 Years in Prison for Unlawfully Disclosing Classified National Defense InformationRead the Press Release
BOSTON – Jack Douglas Teixeira, a former member of the United States Air National Guard (USANG) stationed in Massachusetts, was sentenced today in federal court in Boston for retaining and transmitting hundreds of pages of classified National Defense Information (NDI), including many documents designated Top Secret, on an online social media platform in 2022 and 2023.
Teixeira, 22, of North Dighton, Mass., was sentenced by U.S. District Court Judge Indira Talwani to 15 years in prison to be followed by three years of supervised release. Teixeira was also barred from having contact with foreign agents. In March 2024, Teixeira pleaded guilty to six counts of willful retention and transmission of classified information relating to the national defense.
Teixeira was arrested in April 2023 and charged by criminal complaint with retention and transmission of NDI and unauthorized removal and retention of classified documents or materials. He was subsequently indicted by a federal grand jury in Boston in June 2023. He has remained in federal custody since his arrest.
“Jack Teixeira repeatedly shared classified national defense information on a social media platform in an attempt to impress anonymous friends on the internet – instead, it has landed him a 15-year sentence in federal prison,” said Attorney General Merrick B. Garland. “Teixeira’s profound breach of trust endangered our country’s national security and that of our allies. This sentence demonstrates the seriousness of the obligation to protect our country’s secrets and the safety of the American people.”
“Mr. Teixeira is responsible for engaging in one of the most significant leaks of classified documents and information in United States history, which resulted in exceptionally grave and long-lasting damage to the national security of the United States. He exploited his Top-Secret security clearance to share critical defense information online. In doing so, he exposed sensitive defense information involving our allies, putting our intelligence community and our troops at risk,” said Acting United States Attorney Joshua S. Levy. “Leaking and distributing classified information poses significant and real consequences across the globe. Today, justice was served for all the men and women serving our country overseas with honor and fealty to their oath.”
“This sentencing is a stark warning to all those entrusted with protecting national defense information: betray that trust, and you will be held accountable,” said FBI Director Christopher Wray. “Jack Teixeira’s criminal conduct placed our nation, our troops, and our allies at great risk. The FBI will continue to work diligently with our partners to protect classified information and ensure that those who turn their backs on their country face justice.”
“Jack Teixeira is the textbook example of an insider threat, and today’s sentence holds him accountable for being one of the most prolific leakers of classified national defense information in American history. This former Air National Guardsman grossly betrayed our country and the oath he took to safeguard its secrets in order to boost his ego and impress his friends,” said Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “This was not a victimless crime. The exceptionally grave damage he caused will impact our national security for decades to come. This case should serve as a warning to others that the FBI will not hesitate to investigate anyone who discloses classified material to anyone not authorized to receive it.”
“Teixeira violated his oath to defend the United States by recklessly and repeatedly sharing highly classified national defense information on a social media platform,” said Roman Rozhavsky, Special Agent in Charge of the FBI Washington Field Office's Counterintelligence Division. “His callous disregard for his duty undermined national security and risked the safety of U.S. and allied troops. The FBI moved swiftly to arrest Teixeira, and today's sentence reflects the gravity of his crimes. The FBI will continue to hold accountable anyone who divulges U.S. secrets and threatens the security of the American people."
Teixeira enlisted in the USANG in September 2019. Until his arrest in 2023, he served with the 102d Intelligence Wing at Otis USANG Base in Massachusetts as a Cyber Defense Operations Journeyman. Teixeira’s primary responsibility was maintaining and troubleshooting the classified workstations of other members of the 102 Intelligence Wing. In order to perform his job, Teixeira was granted a Top-Secret//Sensitive Compartmented Information security clearance in 2021. Beginning in or around January 2022, Teixeira unlawfully retained and transmitted NDI classified as “TOP SECRET” or “SECRET” and/or Sensitive Compartmented Information (SCI), onto the social media platform Discord to persons not authorized to receive such information.
Teixeira used a secure workstation at the Otis USANG Base to conduct hundreds of searches for classified documents containing NDI that were unrelated to his duties. On two separate occasions, Teixeira’s superiors warned him not to take notes on classified intelligence information and to stop conducting “deep dives” into classified intelligence information. Despite these warnings and his considerable training, Teixeira purposefully and repeatedly removed classified information and documents containing NDI without authorization from the secure facility where he worked. Teixeira subsequently transmitted the information by typing it into an online social media platform, where it was further transmitted by other users. Teixeira also posted images of hundreds of classified documents to a social media platform, nearly all of which bore standard classification markings – including “SECRET,” “TOP SECRET” and SCI designations – indicating that they contained highly classified United States government information. The documents and information illegally disseminated by Teixeira discussed a range of topics including descriptions of the Russia-Ukraine conflict and troop movements on a particular date. The information he retained and disseminated was derived from sensitive U.S. intelligence, gathered through classified sources and methods.
Shortly before his arrest in April 2022, Teixeira took steps to conceal his disclosures by destroying and disposing of his electronic devices, deleting his online accounts, and encouraging his online acquaintances to do the same.
Attorney General Garland; Acting U.S. Attorney Levy; FBI Director Wray; FBI SAC Cohen; and FBI Washington SAC Rozhavsky made the announcement today. Valuable assistance was provided by the Naval Criminal Investigative Service; Air Force Office of Special Investigations; and the U.S. Attorney’s Office for the Eastern District of Virginia. Assistant U.S. Attorneys Nadine Pellegrini and Jared C. Dolan, Chief and Deputy Chief of the U.S. Attorney’s National Security Unit, respectively, Jason A. Casey of the U.S. Attorney’s National Security Unit, and Trial Attorney Christina A. Clark of the National Security Division’s Counterintelligence and Export Control Section prosecuted the case.
Former Air National Guardsman Sentenced to 15 Years in Prison for Unlawfully Disclosing Classified National Defense InformationRead the Press Release
A former member of the U.S. Air National Guard (USANG), Jack Douglas Teixeira, 22, of North Dighton, Massachusetts, was sentenced today in federal court in Boston for retaining and transmitting hundreds of pages of classified National Defense Information (NDI), including many documents designated top secret, on an online social media platform in 2022 and 2023. Teixeira, was sentenced to 15 years in prison to be followed by three years of supervised release. Teixeira was also barred from having contact with foreign agents.
In March, Teixeira pleaded guilty to six counts of willful retention and transmission of classified information relating to the national defense. Teixeira was arrested in April 2023 and charged by criminal complaint with retention and transmission of NDI and unauthorized removal and retention of classified documents or materials. He was subsequently indicted by a federal grand jury in Boston in June 2023. He has remained in federal custody since his arrest.
“Jack Teixeira repeatedly shared classified national defense information on a social media platform in an attempt to impress anonymous friends on the internet – instead, it has landed him a 15 year sentence in federal prison,” said Attorney General Merrick B. Garland. “Teixeira’s profound breach of trust endangered our country’s national security and that of our allies. This sentence demonstrates the seriousness of the obligation to protect our country’s secrets and the safety of the American people.”
“This sentencing is a stark warning to all those entrusted with protecting national defense information: betray that trust, and you will be held accountable,” said FBI Director Christopher Wray. “Jack Teixeira’s criminal conduct placed our nation, our troops, and our allies at great risk. The FBI will continue to work diligently with our partners to protect classified information and ensure that those who turn their backs on their country face justice.”
“Mr. Teixeira is responsible for engaging in one of the most significant leaks of classified documents and information in United States history, which resulted in exceptionally grave and long-lasting damage to the national security of the United States,” said Acting U.S. Attorney Joshua S. Levy for the District of Massachusetts. “He exploited his Top-Secret security clearance to share critical defense information online. In doing so, he exposed sensitive defense information involving our allies, putting our intelligence community and our troops at risk. It is vital that our classified information remains just that – classified. Leaking and distributing this kind of information poses significant and real consequences across the globe. This is disturbing conduct that will not go unnoticed and unchecked.”
Teixeira enlisted in the USANG in September 2019. Until his arrest in 2023, he served with the 102nd Intelligence Wing at Otis USANG Base in Massachusetts as a Cyber Defense Operations Journeyman. Teixeira's primary responsibility was maintaining and troubleshooting the classified workstations of other members of the 102nd Intelligence Wing. In order to perform his job, Teixeira was granted a Top-Secret//Sensitive Compartmented Information security clearance in 2021. Beginning in or around January 2022, Teixeira unlawfully retained and transmitted NDI classified as “TOP SECRET” or “SECRET” and/or Sensitive Compartmented Information (SCI), onto the social media platform Discord to persons not authorized to receive such information.
Teixeira used a secure workstation at the Otis USANG Base to conduct hundreds of searches for classified documents containing NDI that were unrelated to his duties. On two separate occasions, Teixeira’s superiors warned him not to take notes on classified intelligence information and to stop conducting “deep dives” into classified intelligence information. Despite these warnings and his considerable training, Teixeira purposefully and repeatedly removed classified information and documents containing NDI without authorization from the secure facility where he worked. Teixeira subsequently transmitted the information by typing it into an online social media platform, where it was further transmitted by other users. Teixeira also posted images of hundreds of classified documents to a social media platform, nearly all of which bore standard classification markings – including “SECRET,” “TOP SECRET” and SCI designations – indicating that they contained highly classified U.S. government information. The documents and information illegally disseminated by Teixeira discussed a range of topics including descriptions of the Russia-Ukraine conflict and troop movements on a particular date. The information he retained and disseminated was derived from sensitive U.S. intelligence, gathered through classified sources and methods.
Shortly before his arrest in April 2022, Teixeira took steps to conceal his disclosures by destroying and disposing of his electronic devices, deleting his online accounts, and encouraging his online acquaintances to do the same.
The FBI Washington and Boston Field Offices investigated the case. Valuable assistance was provided by the Naval Criminal Investigative Service, Air Force Office of Special Investigations, and the U.S. Attorney's Office for the Eastern District of Virginia.
Assistant U.S. Attorneys Nadine Pellegrini, Jared C. Dolan, and Jason A. Casey for the District of Massachusetts and Trial Attorney Christina A. Clark of the National Security Division's Counterintelligence and Export Control Section prosecuted the case.
Foreign National Pleads Guilty to Laundering Millions of Dollars in Illicit Proceeds from Cryptocurrency Investment ScamsRead the Press Release
LOS ANGELES – A foreign national pleaded guilty today to a federal criminal charge for his role in a scheme to launder proceeds from cryptocurrency investment scams.
Daren Li, 41, a dual citizen of China and St. Kitts and Nevis, and a resident of China, Cambodia, and the United Arab Emirates, pleaded guilty to one count of conspiracy to commit money laundering.
“Financial criminals and the money launderers who enable them wreak untold harm, ruining lives in the process,” said United States Attorney Martin Estrada. “Investors should be diligent and on guard against anyone offering quick riches via new, exotic investments. A healthy dose of skepticism could prevent financial ruin down the road.”
According to court documents, Li admitted that he conspired with others to launder funds obtained from victims through cryptocurrency scams and related fraud. In furtherance of the conspiracy, he communicated with his co-conspirators through encrypted messaging services.
To conceal or disguise the nature, location, source, ownership, and control of the fraudulently obtained victim funds, Li would instruct co-conspirators to open U.S. bank accounts established on behalf of shell companies and would monitor the receipt and execution of interstate and international wire transfers of victim funds. Li and other co-conspirators received victim funds in financial accounts they controlled, and then monitor the conversion of victim funds to virtual currency, specifically Tether (USDT), and the subsequent distribution of that virtual currency to cryptocurrency wallets controlled by Li and his co-conspirators.
Li admitted that at least $73.6 million in victim funds were directly deposited into bank accounts associated with him and his co-conspirators, including at least $59.8 million deposited from U.S. shell companies that laundered victim proceeds.
“Daren Li and his co-conspirators laundered over $73 million from the victims of cryptocurrency investment scams, using a web of shell companies and international bank accounts,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Although Li committed this offense from outside the United States, he was not beyond the reach of the Justice Department. Today’s plea reflects our ongoing commitment to working with our domestic and international partners to hold accountable anyone responsible for cryptocurrency investment fraud against U.S. victims — wherever the perpetrators are located.”
“This investigation demonstrates how domestic and international partnerships are vital to successfully combatting transnational crime,” said Acting Assistant Director of Investigations Michael Ball of the U.S. Secret Service (USSS).
Li was arrested on April 12 at Hartsfield-Jackson Atlanta International Airport and subsequently transported to Los Angeles.
United States District Judge R. Gary Klausner scheduled a March 3, 2025, sentencing hearing, at which time Li will face a statutory maximum sentence of 20 years in federal prison.
USSS’s Global Investigative Operations Center is investigating the case. Homeland Security Investigations’ El Camino Real Financial Crimes Task Force, Customs and Border Protection’s National Targeting Center, the Dominican Republic National Drug Directorate Sensitive Investigative Unit and Fugitive Task Force, U.S. Marshals Service, Drug Enforcement Administration, and the Justice Department’s Office of International Affairs provided assistance.
Assistant United States Attorneys Maxwell Coll of the Cyber and Intellectual Property Crime Section and Nisha Chandran of the Corporate and Securities Fraud Strike Force along with Justice Department Trial Attorney Stefanie Schwartz of the Criminal Division’s Computer Crime and Intellectual Property Section’s National Cryptocurrency Enforcement Team are prosecuting this case.
If you or someone you know is a victim of cryptocurrency investment scams, report it to IC3.gov.
Foreign National Pleads Guilty to Laundering Millions in Proceeds from Cryptocurrency Investment ScamsRead the Press Release
Daren Li, 41, a dual citizen of China and St. Kitts and Nevis, and a resident of China, Cambodia, and the United Arab Emirates, pleaded guilty today to one count of conspiracy to commit money laundering for his role in a scheme to launder millions of dollars in proceeds of cryptocurrency investment scams.
“Daren Li and his co-conspirators laundered over $73 million from the victims of cryptocurrency investment scams, using a web of shell companies and international bank accounts,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Although Li committed this offense from outside the United States, he was not beyond the reach of the Justice Department. Today’s plea reflects our ongoing commitment to working with our domestic and international partners to hold accountable anyone responsible for cryptocurrency investment fraud against U.S. victims — wherever the perpetrators are located.”
Li was arrested on April 12 at Hartsfield-Jackson Atlanta International Airport and subsequently transported to the Central District of California.
According to court documents, Li admitted that he conspired with others to launder funds obtained from victims through cryptocurrency scams and related fraud. In furtherance of the conspiracy, he communicated with his co-conspirators through encrypted messaging services. In order to conceal or disguise the nature, location, source, ownership, and control of the fraudulently obtained victim funds, Li would instruct co-conspirators to open U.S. bank accounts established on behalf of shell companies and would monitor the receipt and execution of interstate and international wire transfers of victim funds. Li and other co-conspirators would receive victim funds in financial accounts they controlled, and then monitor the conversion of victim funds to virtual currency, specifically Tether (USDT), and the subsequent distribution of that virtual currency to cryptocurrency wallets controlled by Li and his co-conspirators.
Li admitted that at least $73.6 million in victim funds were directly deposited into bank accounts associated with him and his co-conspirators, including at least $59.8 million deposited from U.S. shell companies that laundered victim proceeds.
“Financial criminals and the money launderers who enable them wreak untold harm, ruining lives in the process,” said United States Attorney Martin Estrada for the Central District of California. “Investors should be diligent and on guard against anyone offering quick riches via new, exotic investments. A healthy dose of skepticism could prevent financial ruin down the road.”
“This investigation demonstrates how domestic and international partnerships are vital to successfully combatting transnational crime,” said Acting Assistant Director of Investigations Michael Ball of the U.S. Secret Service (USSS).
Li is scheduled to be sentenced on March 3, 2025. Li faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
USSS’s Global Investigative Operations Center is investigating the case. Homeland Security Investigations’ El Camino Real Financial Crimes Task Force, Customs and Border Protection’s National Targeting Center, the Dominican Republic National Drug Directorate Sensitive Investigative Unit and Fugitive Task Force, U.S. Marshals Service, Drug Enforcement Administration, and Justice Department’s Office of International Affairs provided assistance.
Trial Attorney Stefanie Schwartz of the Criminal Division’s Computer Crime and Intellectual Property Section’s National Cryptocurrency Enforcement Team and Assistant U.S. Attorneys Maxwell Coll and Nisha Chandran for the Central District of California are prosecuting the case.
If you or someone you know is a victim of cryptocurrency investment scams, report it to IC3.gov.
Florida Ophthalmology Practice Agrees to Pay $1.3M to Resolve Allegations of Fraudulent Claims for Cranial UltrasoundsRead the Press Release
Brandon Eye Associates P.A. (Brandon Eye), an ophthalmology practice with offices in Brandon, Sun City and Plant City, Florida, has agreed to pay $1.3 million to resolve alleged violations of the False Claims Act and an analogous Florida statute arising from its billing for trans-cranial doppler ultrasounds (TCDs) provided through a kickback arrangement with a third party. Brandon Eye has agreed to cooperate with the Justice Department’s investigations of other participants in the alleged scheme.
“The payment of kickbacks can bias medical decision making, result in unnecessary services, and drive up health care costs at the expense of the American taxpayers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates that the Justice Department will continue to hold accountable those who enter into kickback arrangements that undermine the integrity of federal health care programs.”
The settlement announced today resolves allegations that Brandon Eye knowingly submitted, and caused the submission of, false claims for medically unnecessary TCDs performed on Brandon Eye’s patients. Brandon Eye and a third-party provider of turnkey mobile TCD services, through an agreement, performed TCDs on Brandon Eye patients who had been diagnosed with common health conditions such as diabetes, hypertension and glaucoma. Before the patient received the TCD result, Brandon Eye and the third-party provider identified the patients as having received a serious diagnosis — most commonly of occlusion and stenosis of their cerebral arteries — that could qualify the patient for reimbursement of a TCD by Medicare or Medicaid. However, nearly all patients who received TCDs never had occlusion and stenosis of cerebral arteries, and that diagnosis was accordingly not reflected in the patient’s medical history or in the TCD results. For each TCD ordered for each Medicare Part B patient, Brandon Eye claimed reimbursement for the technical component of the test, paid the third-party TCD provider based on the volume or value of tests ordered, and referred the patient to the TCD provider’s preferred radiology group for the TCD’s professional component.
The United States alleged that as a result of this scheme, Brandon Eye submitted, or caused the submission of, false claims to Medicare and Medicaid for TCDs that were medically unnecessary, that were premised on false diagnoses, and that resulted from violations of the Anti-Kickback Statute and the Stark Law. Of the $1.3 million total settlement amount, $1,210,245.70 is to be paid to the United States, and $89,754.30 is to be paid to the State of Florida for its share of Medicaid, which is a jointly funded federal and state program.
“This settlement demonstrates the continued commitment of the U.S. Attorney’s Office to investigate and hold responsible medical providers seeking reimbursement from federal health care programs for unnecessary medical tests at taxpayers’ expense,” said U.S. Attorney Roger Handberg for the Middle District of Florida. “We will continue to pursue these actions against providers who exploit federal health care programs for personal gain.”
“We are all victims when the Medicare and Medicaid systems taxpayers fund are cheated,” said Special Agent in Charge Matthew Fodor of the FBI Tampa Field Office. “This is why the FBI vigorously investigates alleged kickback schemes and false billing practices, because it is our mission to protect the American people.”
“Kickback arrangements meant to boost company profits can corrupt the legitimate medical decision-making process and undermine the integrity of federal healthcare programs,” said Special Agent in Charge Stephen Mahmood of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG and our law enforcement partners will continue to pursue allegations of improper billing and kickback schemes to protect both Medicare and Medicaid and those served by those programs.”
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from HHS-OIG and the FBI.
Trial Attorney Nelson Wagner of the Civil Division’s Commercial Litigation Branch, Fraud Section, and Assistant U.S. Attorney Mamie Wise for the Middle District of Florida handled the matter.
The government’s pursuit of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 1-800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only. There has been no determination of liability.
Florida Ophthalmology Practice Agrees to Pay $1.3M to Resolve Allegations of Fraudulent Claims for Cranial UltrasoundsRead the Press Release
Tampa, FL – Brandon Eye Associates P.A. (Brandon Eye), an ophthalmology practice with offices in Brandon, Sun City and Plant City, Florida, has agreed to pay $1.3 million to resolve alleged violations of the False Claims Act and an analogous Florida statute arising from its billing for trans-cranial doppler ultrasounds (TCDs) provided through a kickback arrangement with a third party. Brandon Eye has agreed to cooperate with the Justice Department’s investigations of other participants in the alleged scheme.
“The payment of kickbacks can bias medical decision making, result in unnecessary services, and drive up health care costs at the expense of the American taxpayers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates that the Justice Department will continue to hold accountable those who enter into kickback arrangements that undermine the integrity of federal health care programs.”
The settlement announced today resolves allegations that Brandon Eye knowingly submitted, and caused the submission of, false claims for medically unnecessary TCDs performed on Brandon Eye’s patients. Brandon Eye and a third-party provider of turnkey mobile TCD services, through an agreement, performed TCDs on Brandon Eye patients who had been diagnosed with common health conditions such as diabetes, hypertension and glaucoma. Before the patient received the TCD result, Brandon Eye and the third-party provider identified the patients as having received a serious diagnosis — most commonly of occlusion and stenosis of their cerebral arteries — that could qualify the patient for reimbursement of a TCD by Medicare or Medicaid. However, nearly all patients who received TCDs never had occlusion and stenosis of cerebral arteries, and that diagnosis was accordingly not reflected in the patient’s medical history or in the TCD results. For each TCD ordered for each Medicare Part B patient, Brandon Eye claimed reimbursement for the technical component of the test, paid the third-party TCD provider based on the volume or value of tests ordered, and referred the patient to the TCD provider’s preferred radiology group for the TCD’s professional component.
The United States alleged that as a result of this scheme, Brandon Eye submitted, or caused the submission of, false claims to Medicare and Medicaid for TCDs that were medically unnecessary, that were premised on false diagnoses, and that resulted from violations of the Anti-Kickback Statute and the Stark Law. Of the $1.3 million total settlement amount, $1,210,245.70 is to be paid to the United States, and $89,754.30 is to be paid to the State of Florida for its share of Medicaid, which is a jointly funded federal and state program.
“This settlement demonstrates the continued commitment of the U.S. Attorney’s Office to investigate and hold responsible medical providers seeking reimbursement from federal health care programs for unnecessary medical tests at taxpayers’ expense,” said U.S. Attorney Roger Handberg for the Middle District of Florida. “We will continue to pursue these actions against providers who exploit federal health care programs for personal gain.”
“We are all victims when the Medicare and Medicaid systems taxpayers fund are cheated,” said Special Agent in Charge Matthew Fodor of the FBI Tampa Field Office. “This is why the FBI vigorously investigates alleged kickback schemes and false billing practices, because it is our mission to protect the American people.”
“Kickback arrangements meant to boost company profits can corrupt the legitimate medical decision-making process and undermine the integrity of federal healthcare programs,” said Special Agent in Charge Stephen Mahmood of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG and our law enforcement partners will continue to pursue allegations of improper billing and kickback schemes to protect both Medicare and Medicaid and those served by those programs.”
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from HHS-OIG and the FBI.
Trial Attorney Nelson Wagner of the Civil Division’s Commercial Litigation Branch, Fraud Section, and Assistant U.S. Attorney Mamie Wise for the Middle District of Florida handled the matter.
The government’s pursuit of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 1-800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only. There has been no determination of liability.
Fentanyl Distributor Is Sentenced to Five Years in Prison for Firearms OffenseRead the Press Release
CHARLOTTE, N.C. – A Charlotte fentanyl distributor was sentenced to five years in prison today for possession of a firearm in furtherance of a drug trafficking crime, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. Demetrius Lamar Mattox, 39, was also ordered to serve three years under court supervision after he is released from prison.
Bennie Mims, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, joins U.S. Attorney King in making today’s announcement.
According to filed court documents and court proceedings, over the course of an investigation into drug trafficking activities in Charlotte, law enforcement identified Mattox as a local fentanyl distributor. The investigation determined that Mattox sold fentanyl and firearms to a confidential source on multiple occasions between September and October 2023.
Mattox pleaded guilty on August 13, 2024. He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.
The ATF led the investigation. Assistant U.S. Attorney Alfredo De La Rosa of the U.S. Attorney’s Office in Charlotte prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Federal Bureau of Prison Lieutenant Indicted for Civil Rights ViolationsRead the Press Release
A Federal Bureau of Prisons (FBOP) lieutenant at U.S. Penitentiary (USP) McCreary, in Pine Knot, Kentucky, was indicted last week by a federal grand jury in London, Kentucky, for federal civil rights violations, including violating an individual’s rights under the color of law, falsifying records to impede an investigation, and witness tampering.
The indictment alleges that Zachary Toney, 33, while acting under color of law as a USP McCreary lieutenant, repeatedly kicked and struck a victim while the victim was on the ground and handcuffed behind his back, which caused bodily injury to the victim. The indictment further alleges that Toney then wrote a memorandum documenting a false account of his interactions with the victim intended to cover up the unlawful force that he had used against the victim, omitting that he repeatedly kicked and struck the victim and stating that there were no inmate injuries.
The indictment also alleges that Toney, while acting as a lieutenant, instructed three correction officers to write reports omitting the force that they had observed Toney using against the victim.
“The Justice Department’s mission is to protect the civil rights of all Americans, including those who are incarcerated,” said Deputy Attorney General Lisa Monaco. “As alleged, Lieutenant Zachary Toney assaulted a defenseless person in his custody then tried to cover up that misconduct by falsifying records and tampering with witnesses. These charges make clear we will hold accountable Federal Bureau of Prisons personnel who abuse their positions of authority.”
“Correctional officers have an obligation to respect the constitutional rights of the people in their custody and to report honestly on any misconduct,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to enforce those obligations in federal as well as state and local facilities.”
“We trust Federal Bureau of Prisons employees to foster a safe and humane environment for inmates to serve out their sentences. Instead, this indictment alleges that Toney violently assaulted a defenseless inmate and lied to cover it up,” said Inspector General Michael E. Horowitz of the Justice Department. “The Department of Justice Office of the Inspector General will continue to aggressively investigate any FBOP employee who allegedly violates the civil rights of an inmate in their custody and care.”
“Ensuring the safety and security of inmates in the custody of the government is critically important,” said U.S. Attorney Carlton S. Shier IV for the Eastern District of Kentucky. “We remain committed to ensuring that custody and care is in accordance with the law.”
If convicted, Toney faces a maximum penalty of 10 years in prison for the deprivation of rights charge and a maximum penalty of 20 years in prison for each count of the falsification of records charge and witness tampering charges. Upon any conviction, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Justice Department’s Office of the Inspector General and FBI investigated the case.
Assistant U.S. Attorney Zach Dembo for the Eastern District of Kentucky and Trial Attorney Tara Allison of the Justice Department’s Civil Rights Division are prosecuting the case.
FBOP is committed to rooting out misconduct within its ranks and working with law enforcement partners to prosecute violations of federal law. The numerous FBOP employees working diligently to ensure justice for the victims of misconduct are critical to the Department’s reform efforts.
Any indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
us_v_toney_indictment_v.1.pdfFather and Son Owners of Florida Marketing and Medical Device Companies Charged with $28 Million Health Care Fraud and Kickback SchemeRead the Press Release
NEWARK, N.J. – Two Florida men were arraigned today on charges relating to their roles in a multimillion-dollar durable medical equipment (DME) and prescription drug health care fraud and kickback scheme, Attorney for the United States Vikas Khanna announced.
Nicholas A. Alberino, 61, of Boca Raton, Florida, and his son, Nicholas P. Alberino, 34, of Parkland, Florida, are each charged in a seven-count indictment with conspiracy to commit health care fraud and wire fraud, wire fraud, conspiracy to violate the federal Anti-Kickback Statute, and four counts of violating the Anti-Kickback Statute. The defendants were each arraigned today before U.S. District Judge Esther Salas in Newark federal court, and each pleaded not guilty.
According to documents filed in this case and statements made in court:
From February 2018 to April 2019, the Alberinos operated five Florida companies, each of which generated medically unnecessary prescriptions for certain expensive medications as well as DME such as orthotic braces through a telemarketing and telemedicine scheme. The Alberinos specifically sought to identify and target Medicare beneficiaries. Call centers contacted the beneficiaries by telephone and pressured them to accept the expensive medications and DME. The Alberinos then transmitted the beneficiaries’ personal information, as well as pre-written doctor’s orders and prescriptions, to RediDoc LLC, a purported telemedicine company. The Alberinos pre-selected prescription medications and DME for beneficiaries based on the potential for high reimbursement payments from insurance payers such as Medicare, and not based on the beneficiaries’ medical needs.
RediDoc, in turn, sent the information and documents the Alberinos provided to doctors. The doctors then typically signed the prescriptions despite not having any contact with the patients or conducting a bona fide assessment of the patients’ medical needs from which the doctors could have deemed that it was medically necessary to order the DME or medications. Once the doctors signed the prescriptions, the Alberinos directed RediDoc to steer them to third parties with which the Alberinos had illicit kickback and bribe arrangements. DME suppliers and pharmacies ultimately fulfilled these fraudulent orders and submitted claims for reimbursement to health care benefit programs, including Medicare. The Alberinos also fulfilled fraudulent orders using DME supply companies that they owned and controlled.
The Alberinos paid over $6 million in kickbacks and bribes to RediDoc in exchange for the fraudulent orders and received over $27 million in kickbacks and bribes from third parties in return for fraudulent orders. The Alberinos also received over $1.7 million from Medicare for fraudulent claims that they submitted directly to Medicare through DME supply companies they owned and controlled. Medicare ultimately paid at least $27 million to DME suppliers and pharmacies based on the fraudulent orders that originated with the Alberinos.
The health care fraud and wire fraud conspiracy count and wire fraud count each carry a maximum potential penalty of 20 years in prison. The charge of conspiracy to violate the Anti-Kickback Statute carries a maximum potential penalty of five years in prison. The four counts of violating the Anti-Kickback Statute are each punishable by 10 years in prison. Each of the seven counts in the indictment is also punishable by a fine of $250,000, or twice the gain or loss from the offense, whichever is greatest.
Attorney for the United States Khanna credited special agents of the U.S. Department of Health and Human Services Office of Inspector General, under the direction of Special Agent in Charge Naomi Gruchacz, the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Patrick J. Hegarty, and the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation.
The government is represented by Assistant U.S. Attorneys Katherine M. Romano and Garrett J. Schuman of the Health Care Fraud Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
alberino.indictment.pdfEdmond Resident Pleads Guilty to Attempted Coercion and EnticementRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Lee Edward Redman, age 52, of Edmond, Oklahoma, entered a guilty plea to one count of attempting to coerce and entice a minor into illegal sexual activity.
The Indictment alleged that beginning on or about October 21, 2022, and continuing until October 24, 2022, Redman knowingly attempted to persuade, induce, entice, and coerce an individual under the age of 18 years old to engage in sexual activity for which any person can be charged with a criminal offense.
The charges arose from an investigation by the Muskogee County Sheriff’s Office and the Federal Bureau of Investigation.
The Honorable Judge D. Edward Snow, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the plea and ordered the completion of a presentence investigation report. Redman will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Morgan Muzljakovich represented the United States.
Dover Man Who Went on Criminal Rampage Before Opening Fire on Lakeland Police Officers and ATF Agents During Highspeed Chase Sentenced to Federal PrisonRead the Press Release
Tampa, Florida – U.S. District Judge Steven Merryday has sentenced Francisco Cabrera (29, Dover) to 38 years in federal prison for robbery, carjacking, attempted murder, and possession of a firearm as a convicted felon. Cabrera entered a guilty plea on December 1, 2023.
According to court documents and evidence presented during the sentencing hearing, between January 13 and 17, 2022, Cabrera engaged in a crime spree where he robbed two stores and a gas station in Plant City and Brandon. During these robberies, Cabrera held victims at gunpoint. At times, he removed the magazine from his pistol, showed bullets to the victims and stated, “this is for real” or “give me the money or I will shoot you.”
On January 19, 2022, Cabrera returned to the gas station he had robbed. Cabrera approached an individual sitting inside a truck and carjacked him at gunpoint. As Cabrera was escaping in the vehicle, he brandished his firearm at others who had attempted to stop him and help the victim.
Hours later, detectives from the Lakeland Police Department and agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) located Cabrera in Plant City. The officers turned on their lights and sirens and began pursuit. Cabrera fled, tore through Plant City, eventually getting on I-4 headed east towards Lakeland. During the 11-mile chase, Cabrera traveled at speeds of more than 100 miles per hour, nearly crashed into a truck, drove through red lights and into oncoming traffic causing other vehicles to take evasive actions, and nearly missed hitting other vehicles. While fleeing, Cabrera fired gunshots at numerous local and federal agents, firing approximately 8 to 15 gunshots at 7 different police officers. On one occasion, he fired at two officers who were in front of him outside their vehicles attempting to deploy stop sticks, striking the front hood of one of their vehicles.
In fear that Cabrera was going to kill someone, and after determining that no other law enforcement officers or civilians would be in danger, an ATF special agent fired at Cabrera striking him twice in his lower back. Lakeland Police officers and ATF agents then surrounded Cabrera. The same law enforcement officers that Cabrera had fired upon then quickly provided him with first aid medical assistance, saving his life.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Lakeland Police Department. It was prosecuted by Assistant United States Attorney Diego F. Novaes.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Dominican Man Charged with Illegal ReentryRead the Press Release
Burlington, Vermont – The Office of the United States Attorney for the District of Vermont announced that on October 31, 2024 a federal grand jury returned an indictment charging Luis Edison Capellan-Ortiz, 49, of the Dominican Republic, with illegally reentering the United States after being removed for the commission of an aggravated felony.
Capellan-Ortiz entered a plea of not guilty to the charges during an arraignment on November 8, 2024, before United States Magistrate Judge Kevin J. Doyle. On October 21, 2024, at Capellan-Ortiz’s initial appearance, Judge Doyle previously ordered that Capellan-Ortiz be detained during the pendency of this matter.
The United States Attorney’s Office emphasizes that an indictment contains allegations only and that Capellan-Ortiz is presumed innocent until and unless proven guilty. Capellan-Ortiz faces up to 20 years of imprisonment if convicted. The actual sentence, however, would be determined by the District Court with guidance from the advisory United States Sentencing Guidelines and the statutory sentencing factors.
United States Attorney Nikolas P. Kerest commended the investigatory efforts of the United States Border Patrol.
The prosecutor is Assistant United States Attorney Andrew C. Gilman. Capellan-Ortiz is represented by Assistant Federal Public Defender Sara M. Puls.
Defendant Convicted of Sex Trafficking and Interstate Prostitution on Long Island and in Other StatesRead the Press Release
A federal jury in Central Islip today convicted Michail McKen of two counts of sex trafficking by force and two counts of interstate prostitution in connection with a sex trafficking business he operated in Suffolk and Nassau Counties, New York, Virginia, Arizona, Massachusetts and elsewhere. The verdict followed a six-day trial before United States District Judge Joan M. Azrack. When he is sentenced, McKen faces a mandatory minimum term of 15 years in prison and up to life in prison.
Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Robert Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the verdict.
“The defendant stands convicted today of luring vulnerable women into his web of deceit and coercing them to have commercial sex with men all over the country, including on Long Island,” stated United States Attorney Peace. “He falsely promised his victims a better life, but instead controlled their lives with threats of violence and manipulation to enrich himself. Prosecuting sex traffickers like McKen is a priority of my Office and it is also my hope that today’s verdict brings some measure of consolation to survivors of this awful, exploitative crime.”
Mr. Peace expressed his appreciation to the Arizona Desert Hawk Violent Crime Task Force, the FBI’s Baltimore and Richmond Field Offices and the Henrico County, Virginia, Police Division for their assistance on the case.
FBI Assistant Director in Charge Dennehy stated, “For three years, Michail McKen established a national trafficking route to ensnare and force countless women into sexual slavery. False promises and deceit progressed into physical violence and degradation to ensure his victims remained captive. May today's conviction demonstrate the FBI's commitment to apprehending all individuals who implement perverted tactics to profit off another's body.”
As proven at trial, between 2019 and 2022, McKen was a pimp who used violence and threats of violence to coerce multiple women to engage in commercial sex acts for his own profit. McKen often recruited sex workers through social media and then caused them to travel to Long Island, where McKen is originally from, to engage in commercial sex acts in hotels and other locations. As part of his sex trafficking business, McKen sent his victims all over the country to engage in commercial sex acts, including Virginia, Massachusetts, Pennsylvania, Arizona, Kentucky, Alabama and Oregon. McKen enticed the victims with false promises of a better life and a lucrative partnership based on sharing illicit proceeds. He also choked, beat and threatened the victims at gunpoint to control them. Some of McKen’s victims suffered from drug addiction and he would maintain leverage over those victims by forcing them to engage in commercial sex acts in exchange for a rationed supply of opioids that would prevent them from going through complete withdrawal.McKen forced his victims to abide by strict rules, such as forbidding them from talking to other pimps or even making eye contact with other men in public and wearing lingerie under their street clothes, so they were always prepared for sex work. McKen also took identification documents from victims, which he held as ransom to prevent them from acting independently of him. One victim who testified at trial had the word “Cavalli,” the defendant’s street name which he adopted from the name of a famous fashion designer, tattooed across her ribcage.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Megan E. Farrell and Samantha Alessi are in charge of the prosecution with the assistance of Paralegal Specialist Adam Bernard, Legal Assistant Hannah Valoy, and Victim Witness Specialist Stephanie Marroquin.
The Defendant:
MICHAIL MCKEN (also known as “Kells” and “Cavalli”)
Age: 36
Baldwin, New York and Phoenix, ArizonaE.D.N.Y. Docket No. 23-CR-377 (JMA)
Danbury Business Owner Sentenced to Prison for Tax EvasionRead the Press Release
Vanessa R. Avery, United States Attorney for the District of Connecticut, announced that BILL G. MAKROS, 58, of Danbury, was sentenced today by U.S. District Judge Vernon D. Oliver in Hartford to seven months of imprisonment, followed by two years of supervised release, for tax evasion.
According to court documents and statements made in court, Makros owned and operated a tree service business known as Budget Tree and Stump Removal Service, LLC. From 2016 through 2020, Makros’ business gross receipts totaled $1,426,915, but he concealed his income by receiving customer payments in the form of checks made payable to “cash” or to him personally, and by depositing the checks into bank accounts other than his business bank account. At times, he also cashed check payments and did not deposit the cash into any business or personal accounts. For the 2016 through 2020 tax years, Makros failed to file his federal individual tax returns, and failed to pay taxes totaling $140,694.
In addition, during the COVID-19 pandemic, Makros received two pandemic relief loans totaling $31,200. As part of the application process, Makros submitted IRS Schedule C forms for his business that purported to be part of his tax returns for 2019 and 2020, even though he had not filed tax returns with the IRS for those years. The loans were subsequently forgiven.
Judge Oliver ordered Makros to pay $137,672 in restitution to the IRS.
On July 1, 2024, Makros pleaded guilty to tax evasion.
In 2008, Makros was convicted in Connecticut state court of two counts of failing to pay over sales tax.
Makros, who is released on bond, is required to report to prison on January 7, 2025.
This investigation was conducted by the Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Anastasia King.
Dallas Developer Pleads Guilty to Bribing Council MembersRead the Press Release
A Dallas real estate developer who bribed two city officials pleaded guilty today, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
Sherman Roberts, 70, who previously helmed City Wide Community Development Corporation, was indicted in December 2020 and pleaded guilty Tuesday to conspiracy to commit bribery.
According to court documents, Mr. Sherman bribed two City Council Members, Mayor Pro Tem Dwaine Caraway and City Council Member Carolyn Davis, to support loans and low income housing tax credits for his apartment projects.
In return for several thousand dollars in cash – plus the promise of future payments after her city council tenure ended – Council Member Davis lobbied for Mr. Roberts’s real estate projects, including Serenity Place, Runyon Springs, and Patriot’s Crossing.
She promoted Serenity Place to the City Housing Committee, demanded other developers also seeking real estate funding withdraw their applications in order to increase Mr. Roberts’s chances of success, recommended Serenity Place receive a 9% low income housing tax credit, and voted to approve a $1.9 million City of Dallas loan.
“Right now you and me are making money,” Mr. Roberts texted Council Member Davis shortly after the vote.
About a month later, she repeatedly reached out to ask for more money, “just a few dollars.” He agreed.
Then, she and Mr. Roberts met with Mayor Pro Tem Caraway to address a problem with his Patriot’s Crossing project.
In return for several hundred dollars cash and a $2,000 monthly stipend, Mayor Pro Tem Caraway agreed to stop the city from issuing a request for proposal (RFP) for the Patriots Crossing project and to deliver the project for Mr. Roberts.
“How much is the project worth?” Mayor Pro Tem Caraway asked. “Once you’re successful with this project, don’t forget about me.”
“I won’t forget about you,” Mr. Roberts responded. “That’s where the money is… the money has never been an issue.”
Mr. Roberts now faces up to five years in federal prison. He is slated to be sentenced on March 12, 2025.
Mayor Pro Tem Caraway pleaded guilty in 2019 to conspiracy to commit honest services fraud and tax evasion and was sentenced to more than four years in federal prison. The same year, City Council Member Carolyn Davis pleaded guilty to conspiracy to commit bribery concerning an agent of a local government receiving federal benefits, but passed away in a car crash before she could be sentenced.
Mr. Roberts was one of three real estate developers charged in connection with the bribery scandal. Devin Hall, the developer behind the Grand Park Place apartment project, pleaded guilty in August 2020. Ruel Hamilton, the AmeriSouth Realty Group executive who backed the Royal Crest housing project, is awaiting retrial on conspiracy and bribery charges.
The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation with the assistance of IRS – Criminal Investigation’s Dallas Field Office. Assistant U.S. Attorney Marcus Busch is prosecuting the case with the help of Assistant U.S. Attorney Donna Max.
Convicted Felon Sentenced to Nearly Four Years in Federal Prison for Illegal Firearm Possession and Violating Sex Offender LawsRead the Press Release
RAPID CITY - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Camela C. Theeler has sentenced a Pine Ridge, South Dakota, man convicted of Possession of a Firearm by a Prohibited Person and Failure to Register as a Sex Offender. The sentencings took place on October 28, 2024.
As to the conviction for Possession of a Firearm by a Prohibited Person, Jason Pumpkin Seed, age 36, was sentenced to three years and 10 months in federal prison, followed by three years of supervised release. For the conviction for Failure to Register as a Sex Offender, Pumpkin Seed was sentenced to 18 months in federal prison, followed by five years of supervised release. The Court ordered the prison sentences and periods of supervised release to be served concurrently. Pumpkin Seed was also ordered to pay $200 in special assessments to the Federal Crime Victims Fund.
A federal grand jury indicted Pumpkin Seed in July and November of 2023. He pleaded guilty to both charges on July 23, 2024.
The conviction for possessing a firearm resulted from Pumpkin Seed’s arrest after fleeing Rapid City Police officers in a stolen car in February of 2023. After Pumpkin Seed abandoned the car, officers recovered a loaded Hi-Point semi-automatic pistol with an obliterated serial number inside the car. Pumpkin Seed’s DNA was recovered from the car and the firearm. At the time he possessed the firearm, Pumpkin Seed was a convicted felon who is prohibited from possessing firearms,
The conviction for failing to register as a sex offender stems from Pumpkin Seed failing to register his address with the sex offender compliance officer in May of 2023, as required by federal law. Pumpkin Seed had previously been convicted in federal court of a violent sex offense. His sex offense conviction requires him to register as a sex offender for the rest of his life.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
This case is also part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Rapid City Police Department, and the U.S. Marshals Service. Assistant U.S. Attorney Heather Knox prosecuted the case.
Pumpkin Seed was immediately remanded to the custody of the U.S. Marshals Service.
Convicted Felon Sentenced to 11 Years in Prison for Distributing Fentanyl Following his Release from PrisonRead the Press Release
BOSTON – A previously convicted felon was sentenced today in federal court in Boston for his involvement in a fentanyl distribution conspiracy.
Ruben Depina, 25, of Rockland, Mass. was sentenced by U.S. District Court Judge Julia E. Kobick to 11 years in prison, to be followed by five years of supervised release. In August 2024, Depina pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute 400 grams and more of fentanyl; one count of distributing and possessing with intent to distribute fentanyl; and three counts of distributing and possessing with intent to distribute 40 grams and more of fentanyl. Depina was arrested and charged in September 2023 and has remained in custody since.
In May 2023, a law enforcement officer – who previously worked in an undercover capacity – received a call from Depina who introduced himself as “Jake.” Depina told the officer that he recently got out of jail and was contacting his best customers because he was selling drugs again. Depina subsequently participated in four controlled sales in May and June 2023 during which he sold differing quantities of fentanyl to a confidential informant in exchange for cash. Specifically, on or about May 8, 2023, Depina sold approximately 21 grams of fentanyl to the confidential informant; on or about May 16, 2023, Depina sold at least 40 grams of fentanyl to the informant; on or about May 25, 2023, Depina sold at least 40 grams of fentanyl to the informant; and on or about June 5, 2023, Depina sold at least 40 grams of fentanyl to the informant.
On June 11, 2023, Depina’s vehicle was observed speeding in East Bridgewater. The vehicle sped off after being stopped by law enforcement and collided with a van at an intersection. When law enforcement approached the vehicle, Depina was observed reaching towards the passenger side floor before complying with instructions to show his hands. Depina was immediately removed through the passenger side window and arrested. During a search of Depina’s vehicle, a loaded firearm, multiple cellphones, a digital scale and a satchel containing at least 20 grams of cocaine base were recovered.
On June 12, 2023, during a search of a residence and loft connected to Depina, over 400 grams of fentanyl, multiple cellphones, four firearms, multiple rounds of ammunition, drug paraphernalia (including digital scales and cutting agent) and paperwork in Depina’s name were recovered.
Acting United States Attorney Joshua S. Levy and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. Valuable assistance was provided by the Plymouth County District Attorney’s Office; the Massachusetts State Police; the Suffolk, Plymouth and Bristol County Sheriff's Departments; and the Boston, Brockton, Bridgewater, East Bridgewater, Rockland and Westport Police Departments. Assistant U.S. Attorney Kaitlin R. O’Donnell of the Criminal Division prosecuted the case.
Convicted Felon Sentenced to 40 Months for Possessing A FirearmRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron has sentenced Byron Louder (35, Orlando) to three years and four months in federal prison for possessing a firearm as a convicted felon. Louder entered a guilty plea on August 15, 2024.
According to court records, in the late afternoon on December 25, 2022, law enforcement observed Louder standing in the parking lot of a closed business wearing a ski mask, drinking liquor, and conducting several quick hand-to-hand transactions. The officers also observed a firearm in Louder’s waistband. After detaining Louder, a Sig Sauer pistol was recovered from his person. Louder had been convicted of at least three felonies prior to this incident. As a previously convicted felon, he is prohibited from possessing firearms or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Orlando Police Department. It was prosecuted by Assistant United States Attorney Stephanie A. McNeff.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.