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27 December 2024
Justice Department Issues Final Rule Addressing Threat Posed by Foreign Adversaries’ Access to Americans’ Sensitive Personal DataRead the Press Release
Note: View the fact sheet here.
WASHINGTON – Today, the Justice Department issued a comprehensive final rule carrying out Executive Order (E.O.) 14117 “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern.” The E.O. charged the Justice Department with establishing and implementing a new regulatory program to address the urgent and extraordinary national security threat posed by the continuing efforts of countries of concern (and covered persons that they can leverage) to access and exploit Americans’ bulk sensitive personal data and certain U.S. Government-related data. The Final Rule will take effect 90 days from the date of the Final Rule’s publication, with certain affirmative due diligence, reporting, and auditing requirements taking effect 270 days after publication.
“This final rule is a crucial step forward in addressing the extraordinary national security threat posed of our adversaries exploiting Americans' most sensitive personal data,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “This powerful new national-security program is designed to ensure that Americans' personal data is no longer permitted to be sold to hostile foreign powers, whether through outright purchase or other means of commercial access.”
The Final Rule implements the E.O. by promulgating generally applicable rules for certain categories of data transactions that pose an unacceptable risk to the national security of the United States. As described in the E.O., countries of concern and covered persons can use their access to this data to engage in malicious cyber-enabled activities and malign foreign influence activities, bolster their military capabilities, and track and build profiles on U.S. persons (including members of the military and U.S. Intelligence Community, as well as other Federal employees and contractors) for illicit purposes such as blackmail, coercion, and espionage, and to bolster their military capabilities. Countries of concern and covered persons can also exploit this data to collect information on activists, academics, journalists, dissidents, political opponents, or members of nongovernmental organizations or marginalized communities to intimidate them; curb political opposition; limit freedoms of expression, peaceful assembly, or association; or enable other forms of suppression of civil liberties.
The Final Rule reflects the risk highlighted in the E.O. that the vulnerability of Americans’ bulk sensitive data is exacerbated because countries of concern are increasingly using bulk sensitive personal data to develop and enhance artificial intelligence (AI) capabilities and algorithms that, in turn, enable the use of large datasets in increasingly sophisticated and effective ways to the detriment of U.S. national security. Countries of concern can use AI in conjunction with multiple unrelated data sets, for example, to identify U.S. persons whose links to the federal government would be otherwise obscured in a single dataset and who can then be targeted for espionage or blackmail.
Among other things, the Final Rule identifies countries of concern and covered persons to whom the Final Rule applies, and designates classes of prohibited, restricted, and exempt transactions. The Final Rule establishes bulk thresholds for certain sensitive personal data, including human ‘omic data, biometric identifiers, precise geolocation data, personal health data, personal financial data, and certain covered personal identifiers. The Final Rule also prescribes processes to obtain licenses authorizing otherwise prohibited or restricted transactions; protocols for the designation of covered persons; and provides advisory opinions, and recordkeeping, reporting, and other due diligence obligations for covered transactions.
The Final Rule is consistent with the United States’ commitment to promoting an open, global, interoperable, reliable, and secure internet; protecting human rights online and offline; supporting a vibrant, global economy by promoting cross-border data flows that are required to enable international commerce and trade; and facilitating open investment. Notably, the Final Rule does not impose generalized data localization requirements regarding the physical or electronic storage of Americans’ bulk sensitive personal data or U.S. Government-related data, nor does it require locating computing facilities within the United States to process such data. The Final Rule does not prohibit U.S. persons from conducting medical, scientific, or other research in countries of concern, or from partnering or collaborating with covered persons to share data to conduct researching, if that activity does not involve the exchange of payment or other consideration as part of a covered data transaction. The Final Rule also does not broadly prohibit U.S. persons from engaging in commercial transactions, including exchanging financial and other data as part of the sale of commercial goods and services with countries of concern or covered persons, or impose measures aimed at a broader decoupling of the substantial consumer, economic, scientific, and trade relationships that the United States has with other countries.
The Final Rule further exempts several classes of data transactions from the scope of its prohibitions and restrictions, including personal communications and certain financial services transactions, corporate group transactions, transactions authorized by Federal law and international agreements, investment agreements subject to a Committee on Foreign Investment in the United States (CFIUS) action, telecommunication services, biological product and medical device authorizations, clinical investigations, and others.
The Final Rule’s prohibitions and restrictions are consistent with other access restrictions on sensitive personal data that have been imposed in other contexts, including transactions reviewed by the CFIUS and the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Services Sector (Team Telecom).
Lastly, under the Final Rule, parties engaging in vendor agreements, employment agreements, and investment agreements involving access by countries of concern or covered persons to bulk U.S. sensitive personal data or U.S. Government-related data would be restricted transactions that must comply with the separate security requirements that have been developed by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) in coordination with the Justice Department. These security requirements include organizational and system-level requirements (such as ensuring that basic organizational cybersecurity policies, practices, and controls are in place), and data-level requirements (such as data minimization and masking, encryption, and privacy-enhancing techniques). These critical requirements will be published separately by CISA through the Federal Register and on CISA’s website.
In connection with the Final Rule, the Justice Department will publish compliance, enforcement, and other guidance, which will be located at www.justice.gov/nsd/data-security. The Department will also continue to engage with industry and other stakeholders to determine whether any wind-down licenses are appropriate as this program goes into effect. The Department also anticipates publishing information regarding the application process to seek an advisory opinion or a license for an otherwise prohibited or restricted transaction, as described generally in the Final Rule at Subpart H.
Former Federal Bureau of Prisons Lieutenant Convicted of Violating Inmate’s Civil RightsRead the Press Release
RALEIGH, N.C. – Daniel Mitchell, a former lieutenant at the Federal Bureau of Prisons (FBOP), pleaded guilty to one charge of conspiring to violate civil rights.
“The defendant’s actions were an unacceptable breach of his responsibilities as a law enforcement officer,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “FBOP officers cannot take the law into their own hands, and the Justice Department will aggressively prosecute federal and local law enforcement officials who use physical force to punish inmates.”
“Corrections Officers work in dangerous environments with limited resources and deserve our respect and gratitude,” said U.S. Attorney Michael F. Easley, Jr., for the Eastern District of North Carolina. “But officers acting outside the law to injure an inmate erodes the rule of law, violates civil rights and puts other officers’ lives in jeopardy. We won’t tolerate misconduct in our prisons, by inmates or guards, and will take every measure to keep our institutions safe.”
“Rather than following the normal disciplinary process, Mitchell devised a plan to violently retaliate against an inmate,” said Special Agent in Charge Timothy C. Edmiston of the Justice Department Office of the Inspector General (OIG) Mid-Atlantic Region. “This coordinated attack violated the civil rights of a defenseless inmate and broke every tenet that FBOP employees swear an oath to uphold. The Justice Department OIG is committed to protecting the civil rights of inmates and will pursue any DOJ employee who abuses their power.”
According to court documents and other information presented in court, on Dec. 8, 2021, Mitchell was on duty as a lieutenant supervising the special housing unit (SHU) at Federal Correctional Institute Butner Medium II. Victim K.G. was an inmate housed in the SHU under Mitchell’s supervision.
That morning, a female officer reported to Mitchell that she had been doing rounds in the SHU when inmate K.G. exposed himself and engaged in a sexual act within her view. After the female officer left, Mitchell called another corrections officer, co-conspirator 1, into his office to discuss how to handle K.G.’s alleged misconduct. The normal disciplinary process at FBOP involved a formal write-up of the alleged misconduct. Mitchell and co-conspirator 1 decided that the formal disciplinary was not sufficient. Instead, Mitchell directed co-conspirator 1 to take inmate K.G. from his cell to a holding cell to teach him a lesson by “tuning him up.”
After receiving Mitchell’s instructions, co-conspirator 1 asked some fellow officers to help move inmate K.G. to a holding cell. Once they were alone in the cell, co-conspirator 1 struck and kicked inmate K.G. several times, and knocked him to the ground. Other officers intervened and pulled co-conspirator 1 away from K.G. K.G. sustained minor injuries and later called a medical emergency to his room because the incident aggravated a preexisting back condition and caused spasms.
The Justice Department’s Officer of Inspector General initiated an investigation into the matter after an officer witness raised concerns. In interviews, multiple officer witnesses described officer co-conspirator 1’s unprovoked assault on inmate K.G. Officers also described seeing co-conspirator 1 meet with Mitchell just prior to when co-conspirator 1 asked for their assistance moving inmate K.G. to the holding cell. In later interviews, Mitchell and co-conspirator 1 both described meeting in Mitchell’s office and admitted that they agreed that officer co-conspirator 1 would assault K.G. as punishment.
A sentencing hearing is scheduled for March 31, 2025. Mitchell faces a maximum penalty of 10 years in prison. 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 investigated the case.
Assistant U.S. Attorney Jake D. Pugh for the Eastern District of North Carolina and Trial Attorney Eric Peffley of the Justice Department’s Civil Rights Division are prosecuting the case.
Former Federal Bureau of Prisons Lieutenant Convicted of Violating Inmate’s Civil RightsRead the Press Release
Daniel Mitchell, a former lieutenant at the Federal Bureau of Prisons (FBOP), pleaded guilty this week to one charge of conspiring to violate civil rights.
“The defendant’s actions were an unacceptable breach of his responsibilities as a law enforcement officer,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “FBOP officers cannot take the law into their own hands, and the Justice Department will aggressively prosecute federal and local law enforcement officials who use physical force to punish inmates.”
“Corrections Officers work in dangerous environments with limited resources and deserve our respect and gratitude,” said U.S. Attorney Michael F. Easley Jr for the Eastern District of North Carolina. “But officers acting outside the law to injure an inmate erodes the rule of law, violates civil rights and puts other officers’ lives in jeopardy. We won’t tolerate misconduct in our prisons, by inmates or guards, and will take every measure to keep our institutions safe.”
“Rather than following the normal disciplinary process, Mitchell devised a plan to violently retaliate against an inmate,” said Special Agent in Charge Timothy C. Edmiston of the Justice Department Office of the Inspector General (OIG) Mid-Atlantic Region. “This coordinated attack violated the civil rights of a defenseless inmate and broke every tenet that FBOP employees swear an oath to uphold. The Justice Department OIG is committed to protecting the civil rights of inmates and will pursue any DOJ employee who abuses their power.”
According to court documents and other information presented in court, on Dec. 8, 2021, Mitchell was on duty as a lieutenant supervising the special housing unit (SHU) at Federal Correctional Institute Butner Medium II. Victim K.G. was an inmate housed in the SHU under Mitchell’s supervision.
That morning, a female officer reported to Mitchell that she had been doing rounds in the SHU when inmate K.G. exposed himself and engaged in a sexual act within her view. After the female officer left, Mitchell called another corrections officer, co-conspirator 1, into his office to discuss how to handle K.G.’s alleged misconduct. The normal disciplinary process at FBOP involved a formal write-up of the alleged misconduct. Mitchell and co-conspirator 1 decided that the formal disciplinary was not sufficient. Instead, Mitchell directed co-conspirator 1 to take inmate K.G. from his cell to a holding cell to teach him a lesson by “tuning him up.”
After receiving Mitchell’s instructions, co-conspirator 1 asked some fellow officers to help move inmate K.G. to a holding cell. Once they were alone in the cell, co-conspirator 1 struck and kicked inmate K.G. several times, and knocked him to the ground. Other officers intervened and pulled co-conspirator 1 away from K.G. K.G. sustained minor injuries and later called a medical emergency to his room because the incident aggravated a preexisting back condition and caused spasms.
The Justice Department’s Officer of Inspector General initiated an investigation into the matter after an officer witness raised concerns. In interviews, multiple officer witnesses described officer co-conspirator 1’s unprovoked assault on inmate K.G. Officers also described seeing co-conspirator 1 meet with Mitchell just prior to when co-conspirator 1 asked for their assistance moving inmate K.G. to the holding cell. In later interviews, Mitchell and co-conspirator 1 both described meeting in Mitchell’s office and admitted that they agreed that officer co-conspirator 1 would assault K.G. as punishment.
A sentencing hearing is scheduled for March 31, 2025. Mitchell faces a maximum penalty of 10 years in prison. 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 investigated the case.
Assistant U.S. Attorney Jake D. Pugh for the Eastern District of North Carolina and Trial Attorney Eric Peffley of the Justice Department’s Civil Rights Division are prosecuting the case.
Former Assistant United States Attorney Timothy J. Ohms Retires from the Department of Justice After More Than Thirty Years of Federal ServiceRead the Press Release
Spokane, Washington - Today marks the final day of service for one of Eastern Washington’s longest-tenured federal prosecutors. Over the past thirty-three years, Assistant United States Attorney (AUSA) Timothy J. Ohms has served with distinction as a trial attorney and mentor within the United States Attorney’s Office. He is an expert in complex cases involving mental illness, international affairs/extradition, natural and cultural resource crimes, and violent crime. He was also one of the very first Assistant United States Attorneys in Eastern Washington to file cyberstalking charges.
AUSA Ohms prosecuted several significant drug trafficking cases as well as violent crime cases arising in Eastern Washington. He also was at the forefront of prosecuting cases involving wildlife and Native American artifacts. Over the course of his career, AUSA Ohms tried more than forty cases to a verdict and argued eighty-six cases in the Ninth Circuit Court of Appeals. Below are some highlights from AUSA’s tenure in the Eastern District of Washington:
- In 1992, AUSA Ohms and former AUSA Rolf Tangvald successfully prosecuted Barbara Fraley and Phil W. Champagne in connection with federal counterfeiting charges. Through the investigation into Fraley, authorities learned that Champagne had staged his death in the Olympia area in the early 1980s to collect on a $1.5 million insurance policy. After Champagne’s family collected on the insurance payout, he assumed the identity of Harold Richard Stegeman until his true identity was discovered during the investigation, prosecution, and trial of Fraley. The investigation began with the passing of a single counterfeit federal reserve note by Fraley at what was then a Perkins Restaurant in Ritzville. The case was the subject of a 1995 book by Burl Barer.
- In 1995, AUSA Ohms was a member of the prosecutorial team in United States v. Antero Carreno. The case was part of a larger investigation of organized drug trafficking in Northcentral Washington. Carreno ultimately pled guilty and stipulated to responsibility for smuggling 100 kilograms of cocaine into Canada.
- In 2001, AUSA Ohms was the trial attorney in United States v. John Calvert. Based on the evidence presented at trial, Calvert had been hired to retaliate against an elderly resident of Spokane who had testified in another federal case. In June of 1998, Calvert traveled to Spokane from Port Angeles with a co-conspirator. The co-conspirator entered the victim’s home and bound the victim and victim’s wife. The victim was able to break free, access a handgun, and shoot and kill the co-conspirator. The victim was shot and injured in the exchange. Calvert was convicted on all counts charged against him and received a lengthy prison sentence.
- In 2002, AUSA Ohms led an investigation of crack cocaine distribution by members of the Rolling 20s Crips street gang in the Browne’s Addition neighborhood of Spokane. Members of the gang had taken over a large number of units at what was then the Casa Grande apartment complex. The drug distribution fueled a large amount of collateral criminal conduct in the area. The investigation involved the simultaneous service of 23 search warrants at the apartment complex and led to the conviction of 15 people involved in the criminal enterprise.
- In 2010, AUSA Ohms led the prosecution team in United States v. Clarence Stensgar, wherein Stensgar was convicted of raping two women on the Colville Indian Reservation. For this pattern of sexual abuse, Stensgar was sentence to more than 10 years in federal prison.
- In 2011, AUSA Ohms and his trial partner, AUSA Tyler Tornabene, obtained a guilty verdict against Ricky S. Wahchumwah and Victoria Jim, who were convicted at trial for selling bald and golden eagle parts in violation of the Lacey Act. Wahchumwah, Jim, and other co-defendants had been illegally poaching bald and golden eagles by using horse and deer carcasses for bait. The tail feathers, flight feathers, and plumes were removed from the eagles and offered for sale. Evidence in the case revealed that the total number of eagles killed as part of the criminal activity exceeded fifty.
AUSA Ohms prosecuted the “Twisp Trio” in 2012, for violating the Endangered Species Act. The charges related to the unlawful killing of endangered gray wolves near Twisp, Washington. The investigation began when a resident of the area attempted to ship a fresh wolf hide to Canada using a false description of the shipment and a false name. The shipper refused the package because it was draining blood.
- In April 2014, AUSA Ohms prevailed in the Ninth Circuit Court of Appeals in United States v. Gillenwater, a case involving the transmission of threatening communications through the United States mail. AUSA Ohms argued the case before retired Supreme Court Justice Sandra Day O’Connor, who was sitting by designation on the case. Justice O’Connor wrote the opinion affirming the government’s position on appeal.
- In 2015, AUSA Ohms was the trial attorney in United States v. Cardenas, involving the possession of methamphetamine in conjunction with the unlawful possession of a firearm and an explosive device by a felon and in furtherance of a drug trafficking crime. The case stemmed from an incident on the lower South Hill in Spokane on April 26, 2012, in which Cardenas was shot during an exchange of gunfire with an unidentified person. The stolen firearm used by Cardenas was found on a woman who was attempting to drive Cardenas to the hospital. The evidence included bullets that were lodged in a neighboring home. Cardenas was convicted on all counts and sentenced to over 20 years in custody.
- AUSA Ohms led the prosecution team in the 2015 trial of Jason C. Youker, who orchestrated a conspiracy to distribute methamphetamine and heroin from a private compound located on Gold Mountain near Republic, Washington. Evidence at trial established that Youker used the compound to cut and package heroin and methamphetamine and then buried these drugs on the compound. Youker would disclose the locations of heroin and methamphetamine to subordinates or customers by text message. Youker was found guilty of more than thirty criminal counts that included the unlawful possession of firearms and the use of a communication facility in the commission of a drug felony. Youker was later sentenced to twenty years in federal prison.
- In 2018, AUSA Ohms and then law clerk Emily Sauvageau won the case of United States v. Odell Kinard. Just over a month prior, AUSA Ohms had volunteered to take over the drug-trafficking conspiracy case, which arose out of a Title III wiretap investigation. The jury stayed out less than two hours before returning verdicts of guilty on all 12 counts.
- AUSA Ohms and his co-counsel, Russell E. Smoot obtained a conviction against Rio A. Mirabal for the 2021 arson of St. Charles Parrish and School in Spokane, Washington. Mirabal also was ordered to pay nearly $5 million in restitution for the damage caused by the fire.
- In 2023, AUSA Ohms served on the trial team with AUSA Michael J. Ellis in United States vs. Tainewasher. The case involved a toddler on the Yakama Indian Reservation who died from exposure to fentanyl.
- AUSA Ohms, who also served as a Special Deputy Prosecuting Attorney in Stevens County, played a critical role in bringing first-degree murder charges against Charles Lloyd Tatom in connection with the 1997 deaths of Marlene and Cassie Emmerson. For approximately two decades, AUSA Ohms and AUSA Earl Hicks worked together on a parallel conspiracy investigation involving an outlaw motorcycle club community in the Colville area. Charges in the case were filed just over a week ago.
During his time with the Department of Justice, AUSA Ohms served on a detail to Romania as a Resident Legal Advisor. During his time overseas, AUSA Ohms represented DOJ’s Office of Overseas Prosecutorial Development, working with the Romanian Minister of Justice, judges, prosecutors, and other members of the criminal justice on matters of international priority, including human trafficking, counter terrorism, internal corruption, and transnational organized crime. During his four years in Romania, AUSA Ohms worked tirelessly to assist Romanian authorities to improve the efficiency and fairness of the criminal justice system.
Throughout his career, AUSA Ohms served as a mentor to younger AUSAs – helping them navigate the courtroom and teaching them how to present a federal case. Ohms also played a key role in the office’s law student intern program, investing countless hours in the interview process and mentoring the interns accepted into the program. AUSA Ohm’s involvement and dedication to mentoring during his DOJ tenure has been invaluable both for the Eastern District of Washington and nationwide. Many of the more than 100 law clerks AUSA Ohms mentored have become prosecutors, including several who serve as Assistant United States Attorneys and DOJ Trial Attorneys across the United States.
“Tim’s advocacy on behalf of the people of Eastern Washington is second-to-none. Whenever there is a sensitive, high-profile, complex, or challenging case, Tim is the one to handle it,” stated U.S. Attorney Waldref. “Tim did not shy away from hard cases. He has a passion and talent for telling the story of the victim by ensuring their voice is heard and understood in the courtroom. While we will miss Tim, his legacy will live on through the lives that he has touched over his storied 33-year career.”
First Assistant United States Attorney Richard R. Barker, stated, “Tim played a key role in recruiting me to the Eastern District of Washington, and he served as my mentor after I joined the office. I will forever be grateful for his example of what it means to be an AUSA – to always seek justice, to protect our community, and to make the right decisions, even when no one is looking. The U.S. Attorney’s Office for the Eastern District of Washington is a better place because of Tim Ohm’s Service.”
“Tim Ohms is an exceptional lawyer, and it has been my honor and privilege to serve with him for the past thirty-three years,” stated AUSA Earl A. Hicks. “He is one of our most seasoned prosecutors. Whenever he was in trial, I would become entranced by Tim’s incredible opening statements.”
AUSA Ohms graduated from Western Washington University with a degree in English and Classical Greek. He received his J.D. from Seattle University School of Law in 1985 and a Masters of Fine Arts from Eastern Washington University in 2003 while also serving as an AUSA. After graduating from law school, AUSA Ohms worked in private practice in Clarkson before becoming a Deputy Prosecuting Attorney in Asotin County, Washington. In 1988, Ohms was appointed the Asotin County Prosecutor, where he served until joining the U.S. Attorney’s Office in October of 1991.
Federal jury convicts Pharaoh’s owner of multiple charges, including bribery, sex trafficking conspiracy and witness tamperingRead the Press Release
BUFFALO, N.Y. - U.S. Attorney Trini E. Ross announced today that a federal jury has convicted Peter Gerace, 57, of Clarence, NY, of conspiracy to defraud the United States, bribery, sex trafficking conspiracy, maintaining a drug involved premises, narcotics conspiracy, witness tampering, and distribution of cocaine, which carry a maximum of life in prison.
Assistant U.S. Attorneys Joseph M. Tripi, Nicholas T. Cooper, and Casey L. Chalbeck, stated that between 2005, and 2019, Gerace, owner and operator of Pharaoh's Gentlemen's Club, conspired to defraud the United States and paid cash bribes to Drug Enforcement Administration special agent Joseph Bongiovanni. In exchange for payments he received, Bongiovanni protected Gerace and utilized his position to dissuade other members of law enforcement from conducting investigations into Gerace’s activities at Pharaoh’s. Bongiovanni was previously convicted and is awaiting sentencing.
In addition, between 2006, through 2019, Gerace knowingly maintained Pharaoh’s Gentlemen's Club as a drug involved premises, where he and others distributed cocaine, Adderall, marijuana, and heroin. Gerace and others distributed controlled substances and used other methods to coerce Pharaoh’s dancers to engage in sex acts inside Pharaoh’s. Gerace also, acting with others, sent threatening Facebook messages to a witness in order to prevent her from testifying and providing information in an official proceeding.
“Peter Gerace preyed on the most vulnerable victims, using them to grow his business and his profits,” stated U.S. Attorney Ross. “Peter Gerace did not want to be caught and have his crimes exposed. However, this investigative and prosecutorial team worked tirelessly, gathering the evidence, and connecting the dots and Peter Gerace now stands convicted of some of the most heinous crimes.”
“This case showcased the reality of trafficking in Western New York and across the country. It revealed the interplay between drugs, human trafficking, how powerful men, like Peter Gerace, used victims’ drug addictions to coerce them into acts of commercial sex for pure profit,” stated Matthew Miraglia, Special Agent-in-Charge of the FBI’s Buffalo Field Office. “Today’s verdict is a win for victims of human trafficking and hope to those who don’t have a voice. The FBI remains committed to eradicating human trafficking and providing victims with resources. We encourage any victim to come forward. Call 1-800-CALL-FBI or report online at tips.fbi.gov.”
“With his conviction, Peter Gerace must face the reality that he is not above the law, nor can he escape its consequences. Homeland Security Investigations, in collaboration with our law enforcement partners, is committed to safeguarding the vulnerable from those who use bribery, manipulation, and fear for their own personal gain,” said HSI Buffalo Special Agent-in-Charge Erin Keegan. “The welfare of the public is our highest priority, and HSI Buffalo will take every necessary measure to protect the safety and wellbeing of Western New Yorkers.”
“Today, a jury found that Gerace was guilty of engaging in drug and sex trafficking, preying on vulnerable victims. He also paid hundreds of thousands of dollars to corrupt Drug Enforcement Administration special agent Joseph Bongiovanni in an attempt to skirt the law and avoid accountability,” said Ryan T. Geach, Special Agent-in-Charge of the U.S. Department of Justice Office of the Inspector General Northeast Region. “I would like to thank the jury for their time and careful consideration of the facts.”
The verdict is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Erin Keegan, the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Matthew Miraglia, and the U.S. Department of Justice Office of the Inspector General, under the direction of Special-Agent-In-Charge Ryan T. Geach, Northeast Region.
Sentencing is scheduled for August 15, 2025, at 9:30 a.m., before Judge Lawrence J. Vilardo, who presided over the trial of the case.
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26 December 2024
United States Attorney Gerard M. Karam Announces ResignationRead the Press Release
SCRANTON – United States Attorney for the Middle District of Pennsylvania Gerard M. Karam announced today that he has submitted his resignation to President Biden effective January 10, 2025. The Middle District of Pennsylvania consists of 33 counties in northeastern and central Pennsylvania and is home to over 3.1 million people. There are offices in Scranton, Harrisburg, and Williamsport. Mr. Karam was nominated by Senators Robert Casey and Patrick Toomey, appointed by President Joseph R. Biden, confirmed by the United States Senate on June 13, 2022, and sworn into office on June 21, 2022.
“As a son of a police officer, being appointed United States Attorney in my home district has been an honor of a lifetime. I am grateful to President Biden, Attorney General Merrick Garland, Senator Robert Casey, and former Senator Patrick Toomey for the opportunity to serve as the chief federal law enforcement officer for the Middle District of Pennsylvania.”
“I am equally thankful for the career attorneys, professional staff and the dedicated law enforcement officers who work honestly, diligently and with the utmost good faith to keep our citizens safe, apply the rule of law equally and to protect the civil rights of our citizens. It has been a true privilege to serve alongside these impressive and committed individuals. Together we have had many proud accomplishments.”
In addition to being United States Attorney, Karam also served on the Attorney General’s Advisory Committee’s Subcommittees on White Collar Crime, Civil Rights and Controlled Substances.
The office and its law enforcement partners have had many achievements during Karam’s tenure:
Public Safety
As part of the Department of Justice’s Project Safe Neighborhoods, the office working hand in hand with Federal, local, and state partners indicted and convicted numerous defendants on drug trafficking, drug delivery resulting in death, firearms offenses, sex trafficking and exploitation of minors and murder. Some notable cases include:
- Three consecutive life sentences for a man who participated in the murder of three people including a federal witness.
- A sentence of 70 years for a man convicted of torture and illegally exporting weapon parts and related service to Iraq. It was only the second time a United States citizen has been convicted on torture charges in our country’s history.
- The indictment of seven individuals dubbed as the Fentanyl Robbery Gang for conspiracy resulting in the deaths of four victims.
Health Care
United States Attorney Karam prioritized fighting fraud, waste, and abuse in the health care industry. His office held health care systems and providers accountable both civilly and criminally. Notable cases include:
- Holding a multi-hospital health system accountable for submitting claims to Medicare for Annual Wellness Visit services that violated Medicare rules and regulations. The health system paid $11,712,336.00 to resolve civil liability.
- Holding a corporation responsible to pay $2,700,000.00 to resolve allegations that it violated the False Claims Act by failing to provide adequate cybersecurity to protect health care information.
- Doctor sentenced to 22 years imprisonment after convictions for unlawful distribution of controlled substances resulting in death.
- Seven defendants indicted on health care fraud kickback scheme involving over One Million Dollars in kickbacks.
Fraud/Theft
Karam also emphasized fighting fraud and theft. His effort resulted in the prosecution of unique and significant cases that include:
- Nine defendants indicted on a decades-long scheme to steal major artworks and sports memorabilia.
- Indictment and guilty pleas of individuals in a multi-state scheme to steal and sell human body parts.
- Four defendants indicted in a $120 Million disadvantaged business fraud scheme.
- Three defendants indicted in a multi-state money laundering and unemployment fraud scheme involving over $60 Million with $35 Million transferred to bank accounts in China.
- Indictment and guilty plea of individual charged with committing $11.5 Million in Covid-19 Pandemic Fraud.
- Indictment of Pennsylvania Common Pleas Court Judge for fraud, tampering with a witness and obstruction of justice.
Civil Rights
United States Attorney Karam took a comprehensive approach to protecting the civil rights of Pennsylvanians through enforcement efforts, community outreach and a strong partnership with the Department of Justice’s Civil Rights Division. These efforts include:
- Presentation of a United Against Hate program at high schools throughout the district;
- Holding corporations accountable for violations of the Fair Housing Act;
- The indictment of three police officers for police brutality involving 22 different arrests; and
- Holding governmental entities accountable for violations of the Americans with Disabilities Act.
Administrative
During Karam’s time, the Financial Litigation Unit collected nearly $20 million in civil actions brought by the Middle District of Pennsylvania. Over $12 million was collected in criminal matters and over $9 million in forfeitures.
The Administrative division led the hiring and onboarding of 15 new Assistant United States Attorneys. The division’s efforts allowed the district to be one of the most productive medium sized offices in the nation.
Karam also led the creation of the district’s first appellate and E-litigation units.
Upon Mr. Karam’s departure, First Assistant United States Attorney John Gurganus will assume the position of Acting United States Attorney pursuant to the Vacancies Reform Act.
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USAO Civil Division Ends 2024 with Notable AchievementsRead the Press Release
CLEVELAND – The Civil Division of the U.S. Attorney’s Office (USAO) for the Northern District of Ohio is responsible for litigating civil cases that involve the United States and its agencies throughout the 40 northern counties in the state of Ohio.
The Assistant U.S. Attorneys in this division litigate a diverse docket of both affirmative and defensive court cases on behalf of the United States and its various agencies. Examples include cases that involve federal laws concerning the environment, disability and anti-discrimination, voting rights, fair housing, fraud recovery on behalf of Medicare and Medicaid, and more. The division also recovers money owed to the government or victims of crimes, and collects payment of criminal restitution, fines, and penalties. Additional areas of responsibility include protecting the United States’ interests in medical malpractice actions, bankruptcies, foreclosures, and social security matters.
“Our civil division attorneys perform a broad array of work that protects the public fisc and has far-reaching impacts, from affirmatively protecting individual civil rights to defending the environment to recovering taxpayer money diverted by individuals and corporations through fraudulent conduct or deceptive health care practices,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio. “The division’s achievements this year are significant, and we will continue our efforts, next year and beyond, to hold accountable those who break federal laws and cheat the U.S. taxpayer, and to otherwise represent the United States’ interests in civil litigation.”
Some of the division’s notable achievements in 2024 include the following resolutions:
Investigation of the Cleveland Clinic Foundation - The Cleveland Clinic Foundation (CCF) agreed to pay $7,600,000 to resolve allegations that it violated the False Claims Act when it submitted federal grant applications and progress reports to the National Institutes of Health that did not disclose that a key employee involved in administering the grants had financial research support from other sources.
U.S. ex rel. White, et al. v. Rite Aid Corp., et al. - Rite Aid Corporation and 10 subsidiaries and affiliates agreed to settle the government’s allegations of filling unnecessary prescriptions under the False Claims Act and Controlled Substances Act, asserted in United States ex rel. White et al. v. Rite Aid Corp., et al. Under the settlement, the government will be paid $7.5 million.
U.S. ex rel. Rzeszutko v. Elixir Insurance Co., et al. – Three Rite-Aid subsidiaries, Elixir Insurance Company, RX Options LLC, and RX Solutions LLC, agreed to a settlement that resolved allegations that they violated the False Claims Act when they did not accurately report drug rebates to the Medicare program. As part of the settlement, Elixir Insurance and Rite Aid will pay the United States $101 million.
U.S v. Gerber, et al. – A federal court prohibited Ohio physician Gregory Gerber, M.D., from prescribing opioids and other controlled substances and ordered him to pay $4.7 million in a case alleging violations of the Controlled Substances Act and the False Claims Act. Allegations against Gerber include writing prescriptions for opioids and other controlled substances without a legitimate medical basis, causing a patient’s death due to a fentanyl patch overdose, and receiving kickback payments from a drug manufacturer when prescribing certain drugs that contain fentanyl.
U.S. v. Norfolk Southern Railway Co., et al. – The Norfolk Southern Railway Company agreed to a settlement valued at over $363 million to hold it accountable, address, and pay for the damage caused by the Feb. 3, 2023, train derailment in East Palestine, Ohio. The USAO worked in conjunction with the Environmental Enforcement Section of the Justice Department’s Environment and Natural Resources Division to settle the case. The settlement included provisions requiring Norfolk Southern to fund a community health program that will monitor and treat individual medical needs of residents and first responders stemming from the disaster. It also required Norfolk Southern to fund extensive environmental site cleanup to restore the region’s waterways and habitats; to implement expanded rail safety and emergency response measures and measures to improve and protect waterways and wetlands; and to monitor drinking water to ensure it is safe.
Additionally, the USAO’s Civil Division conducted numerous outreach efforts to connect with the community. In 2024, these included the following events:
Voting with a Disability – In February, U.S. Attorney Rebecca Lutzko took part in an online forum to highlight concerns and address issues that voters with disabilities encounter. Advocacy groups and others from throughout the state listened to the presentation and identified areas of concern. This event was held in partnership with the USAO for the Southern District of Ohio.
Legal Aid Society of Cleveland – In April, lawyers and support staff from the USAO volunteered their time and talents at a legal aid clinic. The event was held at the Cleveland Public Library-Memorial Nottingham Branch. Clinic volunteers provided advice and assistance to people with limited financial resources and addressed a range of civil, legal problems, such as landlord and tenant issues, employment, family law, and consumer law.
Summer Camp ADA Compliance – In May the USAO corresponded with numerous summer camps in the district to remind them of their obligations under the Americans with Disabilities Act (ADA). In particular, summer camps must make reasonable modifications to enable campers with disabilities to participate fully in all camp programs and activities.
Toledo Branch Office – Assistant U.S. Attorney Bill Rojas addressed local bar associations, providing current Department of Justice guidance for evaluating requests by debtors to discharge federal student loans. In May, he addressed the Bankruptcy Court Committee of the Toledo Bar Association. In December, AUSA Rojas participated on a panel for the Cleveland Metropolitan Bar Association’s William J. O’Neill and Pat E. Morgenstern-Clarren Bankruptcy Institute. The Department of Justice issued its student loan discharge guidance, in part, to set transparent discharge criteria and ease the burden on bankruptcy debtors in pursuing adversary proceedings.
To report crimes or file a complaint, please visit https://www.justice.gov/action-center/report-crime-or-submit-complaint#complaint.
Twenty-Nine-Year-Old Felon who Illegally Possessed Multiple Guns Sentenced to Federal PrisonRead the Press Release
A convicted felon who possessed two firearms was sentenced December 20, 2024, to two years in federal prison.
Devonte Oye Robertson, age 29, of Cedar Rapids, Iowa, received the prison term after an August 14, 2024, guilty plea to one count of possession of firearms by a felon. At the plea hearing, Robertson admitted that on January 19, 2024, he possessed Sig Sauer and Smith & Wesson pistols after having been convicted of two felonies.
Robertson was sentenced in Cedar Rapids by United States District Court Chief Judge C.J. Williams. Robertson was sentenced to 24 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
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.
Robertson is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Special Assistant United States Attorney Michael S.A. Hudson and it was investigated by the Cedar Rapids Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Federal Bureau of Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 24-cr-00054.
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Three Members of Violent National Gang SentencedRead the Press Release
DETROIT – Three members of the Almighty Vice Lord Nation (“AVLN”) were sentenced in federal court this week after a jury convicted them of RICO conspiracy, murder, drug trafficking, and weapons charges on April 23 of this year, United States Attorney Dawn N. Ison announced today. Ison was joined in the announcement by James Deir, Special Agent in Charge of the Detroit Field Office of the Alcohol, Tobacco, Firearms and Explosives (ATF).
Evidence presented at trial, before United States District Judge Jonathan J.C. Grey, proved the Almighty Vice Lord Nation (AVLN) was a vast criminal enterprise which committed acts of violence, drug trafficking, weapons offenses, and other crimes across the country. The AVLN are divided into different branches, each with their own leadership that answers to a “board” in Chicago. The trial involved members of the Traveling Vice Lords in Detroit, Michigan. The jury convicted:
• Terry Douglas, 44, of Detroit, who held the title of “Chief” and was the Michigan leader of the Traveling Vice Lords. Douglas was sentenced to 60 years in prison.
• Schuyler Belew, 31, of Detroit, who held the title of “Universal Elite” and was the Detroit leader of the Traveling Vice Lords. Belew was sentenced to 60 years in prison.
• Devun Baskerville, 34, of Detroit, who held the title of “Chief Enforcer” for the Traveling Vice Lords. Baskerville was sentenced to 70 years in prison.
The evidence at trial showed that these members of the AVLN worked together to further the AVLN, which involved AVLN members committing racketeering acts such as murder, narcotics trafficking, and witness intimidation. The jury heard testimony concerning a brazen shooting that took place in broad daylight at a Detroit park. In that shooting, Baskerville, acting upon orders from Douglas and Belew, murdered an individual suspected of cooperating with law enforcement and attempted to murder his girlfriend when he shot several times into her vehicle as she tried to flee. Also in the vehicle were her two young children, who miraculously, were not harmed. The girlfriend, who was pregnant at the time, suffered gunshot wounds but survived.
The jury also convicted Lawon Carter of drug trafficking and weapons offenses. Carter’s sentencing is set for April 28, 2025.
“The sentences handed down in this case should send a clear message to violent offenders who terrorize our neighborhoods: we won’t stop until you are brought to justice,” said U.S. Attorney Ison. “It is my sincere hope that these sentences bring some closure to the victim’s family.”
“The sentencing of three more members of the Almighty Vice Lord Nation (AVLN) is proof that ATF and its partners have zero tolerance for gang members who use illegal firearms to intimidate and murder our community members. This case was a complete reckoning of this gang and should serve as a wake-up call for gang members across Michigan. These three defendants represent the worst of the worst in our community. Greed bought them a one-way ticket straight into federal prison. It should be common knowledge throughout Michigan: violent gang activity will not be tolerated and will be disrupted; if you pack an illegal firearm to threaten and intimidate people in our community – pack a bag. You’re going to go to federal prison,” said, Special Agent in Charge James Deir.
This prosecution was part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Also instrumental in the investigation and prosecution of this case was the Detroit Police Department, and the Michigan Department of Corrections (MDOC) investigation staff.
Southern California-Based Clinics, Laboratory, and Owners to Pay $15 Million to Settle Allegations of False Claims Arising from Kickbacks and Self-ReferralsRead the Press Release
SETTLEMENT AGREEMENT
LOS ANGELES – A former Van Nuys physician, a medical center he founded, a laboratory he co-owned, and an executive at these entities have agreed to pay $15 million to settle allegations that they submitted false claims to Medicare and Medi-Cal from the payment of illegal kickbacks and self-referring patients, the Justice Department announced today.
Mohammad Rasekhi, who surrendered his medical license in December 2024; Sheila Busheri; Southern California Medical Center (SCMC); and R & B Medical Group, Inc. d/b/a Universal Diagnostic Laboratories (UDL) agreed to pay the amount.
Rasekhi is the founder and chief medical officer of SCMC and the co-owner of UDL. Busheri is the chief executive officer of SCMC and the co-owner and chief executive officer of UDL. SCMC is a federally qualified health center that operates six clinics in Southern California. UDL is a reference and esoteric laboratory in Southern California.
Medicaid is funded jointly by the states and the federal government. The State of California paid a portion of the Medicaid claims at issue and will receive approximately $7 million from the settlement.
The United States alleged that the defendants knowingly submitted or caused the submission of false claims to Medicare and Medi-Cal by:
- paying kickbacks to marketers to refer Medicare and Medi-Cal beneficiaries to SCMC clinics in violation of the Anti-Kickback Statute (AKS):
- paying kickbacks to third-party clinics in the form of above-market rent payments, complimentary and discounted services to clinic staff, and write-offs of balances owed by patients and clinic staff in exchange for referring Medicare and Medi-Cal beneficiaries to UDL for laboratory tests in violation of the AKS; and
- referring Medicare and Medi-Cal beneficiaries from SCMC clinics to UDL for laboratory tests in violation of the Stark Act’s prohibition against self-referrals.
The AKS prohibits parties who participate in federal health care programs from knowingly and willfully offering or paying remuneration in return for referring an individual to, or arranging for the furnishing of any item or services for which payment is made by, a federal health care program.
Likewise, the Stark Act, which is also known as the Physician Self-Referral Law, prohibits physicians from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.
“Providers who exploit the Medicare, Medicaid, and TRICARE programs for their personal financial gain will be held accountable under the False Claims Act,” said U.S. Attorney Martin Estrada. “This significant resolution evidences our steadfast commitment to ensuring the integrity of federally funded health care programs.”
“Kickback and self-referral schemes risk impairing the judgment of healthcare providers and diminish the reliability of the care that they render,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “This resolution upholds the Department’s abiding view that Medicare and Medicaid beneficiaries deserve care that is free from the taint of referrals that were driven by the providers’ financial interest.”
“There is an expectation that providers who receive Medicare and Medicaid program funds obey the law and operate with integrity,” said Acting Special Agent in Charge Eric Larson of the U.S. Department of Health & Human Services Office of the Inspector General (HHS-OIG). “This settlement is a reminder that HHS-OIG is committed to working with our law enforcement partners on holding those providers accountable who exploit taxpayer-funded healthcare programs for their own personal gain.”
“The announced settlement brings closure to the defendants’ schemes to defraud federal healthcare programs, including the Department of Defense’s TRICARE program,” said Bryan D. Denny, Special Agent in Charge for the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (“DCIS”), Western Field Office. “This case underscores DCIS’s commitment to working with its partners to hold accountable those who defraud TRICARE, particularly in instances wherein the alleged illicit activities jeopardize patient care.”
The settlement announced today resolves claims brought under the qui tam, or “whistleblower,” provisions of the False Claims Act in a joint filing by Ferzad Abdi, Julia Butler, Jameese Smith, and Karla Solis, who were former employees or managers of SCMC and UDL. The qui tam provisions permit a private party called a “relator” to file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Abdi v. Rasekhi, No. 18-cv-03966 (C.D. Cal.). The settlement announced today includes a $10 million payment for the portion of the case handled by the United States and a $5 million payment in a separate settlement between the relators and the defendants.
The resolution obtained in this matter was the result of a coordinated effort between the United States Attorney’s Office; the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; and the California Department of Justice. The U.S. Department of Health and Human Services, Office of Inspector General; the U.S. Department of Defense, Office of Inspector General; and DCIS provided assistance.
The investigation and resolution 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 the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Assistant United States Attorney Jack D. Ross of the Civil Fraud Section and Justice Department Trial Attorney Samson Asiyanbi of the Fraud Section handled this matter for the United States.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Southern California-Based Clinics, Laboratory and Their Owners to Pay $10M for False Claims Arising from Kickbacks and Self-ReferralsRead the Press Release
WASHINGTON – Mohammad Rasekhi M.D., Sheila Busheri, Southern California Medical Center (SCMC) and R & B Medical Group Inc., doing business as Universal Diagnostic Laboratories (UDL) (collectively, the defendants), have agreed to pay $10 million to resolve allegations that they submitted false claims to Medicare and California’s Medicaid program, known as Medi-Cal, arising from allegations of paying kickbacks and making self-referrals. The defendants are all based in southern California. Rasekhi is the founder and chief medical officer of SCMC and the co-owner of UDL. Busheri is the chief executive officer of SCMC and the co-owner and chief executive officer of UDL. SCMC is a federally qualified health center that operates six clinics in southern California. UDL is a reference and esoteric laboratory in Southern California.
The United States alleged that the defendants knowingly submitted or caused the submission of false claims to Medicare and Medi-Cal by (a) paying kickbacks to marketers to refer Medicare and Medi-Cal beneficiaries to SCMC clinics in violation of the Anti-Kickback Statute (AKS), (b) paying kickbacks to third-party clinics in the form of above-market rent payments, complimentary and discounted services to clinic staff and write-offs of balances owed by patients and clinic staff in exchange for referring Medicare and Medi-Cal beneficiaries to UDL for laboratory tests in violation of the AKS and (c) referring Medicare and Medi-Cal beneficiaries from SCMC clinics to UDL for laboratory tests in violation of the Stark Act prohibition against self-referrals.
The AKS prohibits parties who participate in federal health care programs from knowingly and willfully offering or paying remuneration in return for referring an individual to, or arranging for, the furnishing of any item or services for which payment is made by, a federal health care program. Likewise, the Stark Act, which is also known as the Physician Self-Referral Law, prohibits physicians from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. “Designated health services” include “clinical laboratory services.” Compliance with the AKS and Stark Act are conditions of payment under federal healthcare programs.
“Kickback and self-referral schemes risk impairing the judgment of healthcare providers and diminish the reliability of the care that they render,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “This resolution upholds the department’s commitment to ensuring that Medicare and Medicaid beneficiaries receive care that is untainted by the providers’ financial interest.”
“Providers who exploit the Medicare, Medicaid and TRICARE programs for their personal financial gain will be held accountable under the False Claims Act,” said U.S. Attorney Martin Estrada for the Central District of California. “This significant resolution evidences our steadfast commitment to ensuring the integrity of federally funded health care programs.”
“There is an expectation that providers who receive Medicare and Medicaid program funds obey the law and operate with integrity,” said Acting Special Agent in Charge Eric Larson of the Department of Health & Human Services Office of the Inspector General (HHS-OIG). “This settlement is a reminder that HHS-OIG is committed to working with our law enforcement partners on holding those providers accountable who exploit taxpayer-funded healthcare programs for their own personal gain.”
“The announced settlement brings closure to the defendants’ schemes to defraud federal healthcare programs, including the Department of Defense’s TRICARE program,” said Special Agent in Charge Bryan D. Denny of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS) Western Field Office. “This case underscores DCIS’ commitment to working with its partners to hold accountable those who defraud TRICARE, particularly in instances wherein the alleged illicit activities jeopardize patient care.”
Medicaid is funded jointly by the states and the federal government. The State of California paid a portion of the Medicaid claims at issue and will receive approximately $4 million from the settlement.
The settlement announced today resolves, in part, claims brought under the qui tam or whistleblower provisions of the False Claims Act by Ferzad Abdi, Julia Butler, Jameese Smit and Karla Solis, who were former employees or managers of SCMC and UDL. The qui tam provisions permit a private party called a “relator” to file an action on behalf of the United States and receive a portion of any recovery. The relators’ qui tam case is captioned United States ex rel. Abdi v. Rasekhi, No. 18-cv-03966 (CDCA). Concurrent with this announcement, the relators reached a separate settlement with the defendants for $5 million to resolve additional allegations in their qui tam complaint. The United States and the State of California declined to intervene as to those allegations and was not a party to the separate agreement. The relators’ share of the two settlements has not yet been determined.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, U.S. Attorney’s Office for the Central District of California and California Department of Justice, with assistance from HHS-OIG.
The investigation and resolution 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 800-HHS-TIPS (800-447-8477).
Trial Attorney Samson Asiyanbi of the Civil Division’s Fraud Section and Assistant U.S. Attorney Jack Ross for the Central District of California handled the matter.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
Settlement
SCDC Inmate Among 5 Indicted for Conspiracy to Distribute Meth, FentanylRead the Press Release
FLORENCE, S.C. — A federal grand jury in Florence returned a four-count indictment against Jawan Rayel White, 37; Derrell Sherald, 38; Amon Rasheem Rutledge, 34; Alexis Nicole Loscar, 30; and Christian Vargas, 21, for conspiracy to distribute and distribution of methamphetamine and fentanyl.
The indictment alleges that White, while incarcerated in the South Carolina Department of Corrections on a 25-year sentence for drug distribution, conspired with his co-defendants to distribute large quantities of methamphetamine and fentanyl into South Carolina and surrounding states.
White faces a maximum penalty of life imprisonment and is currently incarcerated in SCDC on an unrelated state conviction. Rutledge faces a maximum sentence of life imprisonment and is currently detained pending an initial appearance and detention hearing before the Honorable Kaymani D. West, United States Magistrate Judge. Sherald, Loscar, and Vargas each face penalties of 20 years in prison and are currently detained pending an initial appearance and detention hearing before the United States District Court.
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.
The case was investigated by Drug Enforcement Administration, United States Postal Inspection Service, and the South Carolina Department of Corrections Office of Inspector General. Assistant United States Attorney Matthew Ellis is prosecuting the case.
U.S. Attorney Adair F. Boroughs stated that all charges in the indictment are merely accusations and that defendants are presumed innocent unless and until proven guilty.
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Postal Employee Accused of Stealing Checks from the MailRead the Press Release
ST. LOUIS – A former U.S. Postal Service supervisor appeared in court Thursday to answer an indictment accusing her of stealing checks from the mail.
Benita D. Randle, 42, was indicted December 11 in U.S. District Court in St. Louis on one count of theft of mail by a U.S. Postal Service employee. She pleaded not guilty Thursday.
The indictment says that on Oct. 31, 2023, Randle stole about 90 checks from mail that had been entrusted to the Postal Service for delivery. Randle was a supervisor at the St. Louis Processing and Distribution Center in St. Louis at the time, the indictment says.
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.
The U.S. Postal Inspection Service and the U.S. Postal Service Office of Inspector General investigated the case. Assistant U.S. Attorney Jonathan Clow is prosecuting the case.
Ohio Man Sentenced to Prison for Unemployment Insurance and Bank FraudRead the Press Release
CLEVELAND – Darmani Hawkins, 21, of Aurora, was sentenced to 60 months in prison by U.S. District Judge Donald Nugent after pleading guilty to conspiracy to commit wire fraud and mail fraud; conspiracy to commit bank fraud; and mail theft, as part of schemes to fraudulently obtain coronavirus disease (COVID)-era state unemployment benefits and, separately, to steal checks from the mail, alter them, and deposit them. He was also ordered to pay $681,114.14 in restitution and serve three years of supervised release after imprisonment.
According to court documents, from 2020 through 2021, Hawkins conspired to fraudulently obtain COVID pandemic unemployment insurance benefits by submitting fake claims, and in 2023, he conspired to steal checks out of the United States mail, deposit them, and keep the proceeds.
In the COVID fraud scheme, Hawkins and his co-conspirators exploited the CARES Act (Coronavirus Aid, Relief, and Economic Security), which had been established to assist people who were out of work because of the COVID-related shutdown. They submitted false unemployment applications to multiple states, making it appear as if they were eligible to receive benefits when, in fact, they were not. Once a state’s unemployment agency approved the applications, the state mailed the unemployment benefits to Hawkins and his co-conspirators in the form of debit cards, which they used to withdraw cash for their personal benefit.
In the bank fraud and mail theft scheme, Hawkins used a social media platform to recruit postal workers to steal checks from the U.S. Postal Service in exchange for a fee. Hawkins also offered to pay people to use their established bank accounts to deposit the checks stolen from the mail. Those who agreed to participate in mail theft deposited the stolen checks into bank accounts that Hawkins had paid others to allow him to access. Hawkins then withdrew or received the stolen deposited funds.
“Mr. Hawkins shamelessly exploited federal resources intended to help those who became unemployed as a result of an uncontrollable, life-changing world event. His deceitful actions were selfish and heartless, diverting much-needed funds away from those who lost their jobs through no fault of their own,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio. “He also manipulated others to steal checks and misuse our banking system in a greedy effort to make easy money. Those, like Mr. Hawkins, who seek to capitalize on the misfortune of others by abusing federal safety nets established to protect the needy, and who steal from the U.S. taxpayer and private citizens, will be held to account and brought to justice.”
“The sentencing of Mr. Hawkins should send a strong message to anyone who believes they can deceive government programs designed to help the American public in times of need. As part of our mission, postal inspectors will aggressively work to protect the public and prevent criminal misuse of the mail,” said Postal Inspector in Charge Lesley Allison of the U.S. Postal Inspection Service’s Pittsburgh Division. “We value our relationships with the U.S. Attorney’s Office and the law enforcement partners involved in bringing Mr. Hawkins to justice.”
During the investigation, officials determined that Hawkins had caused a loss of approximately $425,000 in the COVID fraud scheme and more than $700,000 in the stolen check scheme.
This case was investigated by the U.S. Department of Labor, the U.S. Postal Inspection Service, the Social Security Administration Office of the Inspector General, and the FBI Cleveland Division. The case was prosecuted by Assistant United States Attorney Erica Barnhill for the Northern District of Ohio.
To report fraud, visit https://www.dol.gov/agencies/eta/unemployment-insurance-payment-accuracy/UIFraudReporting or https://www.uspis.gov/report.
Missouri Man Indicted for Federal Hate Crime for Racially Motivated Threats Targeting St. Louis NAACPRead the Press Release
A federal indictment was unsealed charging a Missouri man with threatening the St. Louis office of the NAACP.
Darryl Jaspering, 62, of Warrenton, was indicted for one count of transmitting threatening communications and one count of interference with federally protected activities. According to the indictment, Jaspering wrote a message on the NAACP’s contact page “in which he used racially charged threats to physically harm the recipients of his message.” Jaspering, the indictment says, “intimidated and interfered with and attempted to intimidate and interfere with” NAACP employees “because of their race and color” and threatened the use of a dangerous weapon.
Jaspering faces a maximum penalty of five years in prison, a fine of up to $250,000 or both prison and a fine for the charge of transmitting threatening communications. He also faces a maximum penalty of 10 years in prison, a fine of up to $250,000 or both prison and a fine for the charge of interference with federally protected activities. If convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Sayler A. Fleming for the Eastern District of Missouri and Special Agent in Charge Ashley T. Johnson of the FBI St. Louis Field Office made the announcement.
The FBI St. Louis Field Office investigated the case.
Assistant U.S. Attorney Christine Krug for the Eastern District of Missouri and Trial Attorney Taylor Payne of the Civil Rights Division’s Criminal Section are prosecuting the case.
For more information and resources on the department’s efforts to combat hate crimes, visit www.justice.gov/hatecrimes.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former general manager of Anchorage business charged with wire fraud, tax evasionRead the Press Release
ANCHORAGE, Alaska – A federal grand jury in Alaska returned an indictment last week charging an Alabama man with wire fraud and tax evasion after he allegedly defrauded a local Anchorage business while serving as their general manager.
According to court documents, in 2008, James Wohlers, 56, of Deatsville, Alabama, was hired by GBR Equipment/Oilfield Services (GBR), an Anchorage based business that provides oilfield services on the North Slope and elsewhere, as their human resource manager. In 2009, Wohlers became their general manager, overseeing vendor interface, employee hiring, payroll and accounting. Part of his responsibilities included coordinating wire transfers from GBR’s bank account to outside accounts.
In 2019, an audit was completed on the company’s finances and bank records after employees determined the company was earning sufficient revenue but was unable to pay vendors and employees. The audit revealed that from at least 2013 to 2019, Wohlers allegedly executed wire transfers from the GBR account that did not benefit the company, and allegedly used GBR’s corporate credit cards for personal expenses, like paying personal credit card bills.
The indictment alleges that in 2015, Wohlers formed a partnership named BGI Industrial Services (BGI), which was registered with the Alabama Secretary of State. In 2017, GBR performed services for two companies. Wohlers allegedly sent both companies invoices from BGI for $25,000 and $2,500 respectively, and both companies paid the invoices. The money was deposited into BGI’s bank account. Wohlers also allegedly used GBR credit cards to pay for business expenses related to BGI and used employees paid by GBR to complete work on behalf of BGI.
In late 2015, Wohlers announced GBR employee pay cuts of 5 to 10 percent, along with other restrictive measures to address GBR’s poor financial condition. A few months later, Wohlers announced additional GBR employee pay cuts of 5 to 15 percent. Within two weeks of making his second announcement, Wohlers allegedly used over $43,000 of GBR’s funds to pay for airfare and other expenses related to a personal trip to China.
Wohlers was terminated by GBR in August 2019, and the company sent the defendant a demand letter stating he owed GBR $1.5 million. After being terminated, Wohlers allegedly deleted roughly 10,000 emails from GBR’s servers.
Wohlers is charged with one count of wire fraud and three counts of tax evasion. The defendant is scheduled for his initial court appearance on Jan. 10 before U.S. Magistrate Judge Matthew M. Scoble of the U.S. District Court for the District of Alaska. If convicted, he faces up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney S. Lane Tucker for the District of Alaska, Special Agent in Charge Rebecca Day of the FBI Anchorage Field Office and Special Agent in Charge Adam Jobes of the IRS Criminal Investigation, Seattle Field Office made the announcement.
The FBI Anchorage Field Office and the IRS Criminal Investigation Seattle Field Office are investigating the case.
Assistant U.S. Attorney Tom Bradley is prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Former Utah Movie Producer Sentenced for Tax Evasion and Forcibly Retaking Property Seized Under Court OrderRead the Press Release
A Utah man was sentenced on Monday to an aggregate of six years in prison for tax evasion and forcibly retaking a house and land that had been seized under court order to pay his outstanding tax debt.
According to court documents and evidence presented at trial, Paul Kenneth Cromar, formerly of Cedar Hills, Utah, owned a home in Cedar Hills and operated Blue Moon Productions LLC, a freelance film and media production company. From 1999 through 2005, Cromar did not file any federal income tax returns or pay any tax. In 2005, the IRS conducted an audit and assessed him with $703,266.96 in taxes, interest and penalties. For more than a decade thereafter, Cromar did not make any payments towards his outstanding debt and took steps to obstruct the IRS’s ability to collect his delinquent taxes.
In 2019, due to this course of conduct, a federal judge ordered that Cromar’s home be sold at auction to satisfy his tax obligations, which by then had ballooned to over $1 million. Cromar then attempted to stop the sale by filing false documents on the property’s title and with the IRS, including a false promissory note. He also attempted to intimidate potential purchasers of the home and harassed IRS personnel by filing frivolous lawsuits against them personally.
Shortly before the sale closed, Cromar broke into the home and attempted to reclaim it. With the help of others, he occupied the home unlawfully for five months, fortifying it with firearms, sandbags and wooden boards tactically placed throughout the house.
In addition to his prison sentence, U.S. District Judge Howard C. Nielson Jr. for the District of Utah ordered Cromar to serve three years of supervised release and to pay approximately $723,028.65 in restitution to the United States as a condition of his supervised release.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Trina A. Higgins for the District of Utah and Special Agent in Charge Carissa Messick of IRS Criminal Investigation’s Phoenix Field Office made the announcement.
IRS Criminal Investigation’s Phoenix Field Office and the Treasury Inspector General for Tax Administration (TIGTA) jointly investigated the case. The FBI assisted in locating and apprehending Cromar, who had been a fugitive from justice in a related Utah state court criminal matter since August 2022.
Trial Attorneys Meredith Havekost and Patrick Burns of the Tax Division and Assistant U.S. Attorney Mark Woolf for the District of Utah prosecuted the case. Trial Attorney Peter Anthony of the Tax Division assisted with the investigation.
Court Authorizes Service of John Doe Summons for IRS to Seek Identities of U.S. Taxpayers Who Participated in the “Gig Economy” via a Digital PlatformRead the Press Release
A federal court in California entered an order on Monday authorizing the IRS to serve a John Doe summons on JustAnswer LLC, seeking information about U.S. taxpayers who were paid for answering questions as “experts” during the years 2017-2020. The IRS is seeking the records of individuals who were paid by JustAnswer, which operates a digital platform through which members of the public can pay to have questions answered by professionals such as doctors, lawyers, veterinarians, engineers and tax professionals. JustAnswer is headquartered in Covina, California.
The “gig economy” is where people earn income providing on-demand work, services or goods through a digital platform like a website or an app. Well-known examples of such platforms include Airbnb, Uber, Lyft, DoorDash, Etsy, Handy and TaskRabbit. The gig economy is a recent phenomenon associated with the increased prevalence of smart phones and their applications, facilitating the development of online marketplaces and platforms in which individuals can connect to obtain and offer goods and services. Digital platforms commonly serve as intermediaries, connecting sellers or service providers with customers while also processing payments. In the court’s order, U.S. District Judge Dolly M. Gee for the Central District of California found that there is a reasonable basis for believing that U.S. taxpayers who were paid by JustAnswer to answer questions as experts may have failed to comply with federal tax laws.
The court’s order grants the IRS permission to serve what is known as a John Doe summons on JustAnswer. There is no indication that JustAnswer has engaged in any wrongdoing in connection with its digital platform business. Rather, the IRS uses John Doe summonses to obtain information about individuals whose identities are unknown and who possibly violated internal revenue laws, such as by not reporting income they received. This John Doe summons directs JustAnswer to produce records identifying U.S. taxpayers who have used its platform to earn income, along with other documents relating to their work.
“The gig economy has grown in recent years and with it, the concern for tax compliance issues has increased,” said Deputy Assistant Attorney General David Hubbert of the Justice Department’s Tax Division. “This John Doe summons demonstrates that working with the IRS we will use all the tools available to us to ensure that no matter how U.S. taxpayers earn income, they are properly reporting it and paying their taxes. Those who choose to be on the forefront of the gig economy must be aware of, and abide by, all their tax obligations.”
“Like their fellow Americans who earn income through traditional means, U.S. taxpayers who earn income from digital and other platforms that comprise the gig economy need to pay their fair share of taxes,” said IRS Commissioner Danny Werfel. “The world is getting smaller for tax cheats, and we will work collaboratively with our partners to vigorously enforce the nation’s tax laws.”
The IRS Small Business Self-Employed Division and IRS Office of Fraud Enforcement assisted with the investigation that led to this case.
The Justice Department and the IRS are committed to ensuring that taxpayers abide by all federal tax laws. Federal law requires U.S. individual taxpayers to pay taxes on all income earned worldwide. Individuals must report all income earned from the gig economy on a tax return. This includes income from part-time, temporary or “side work”; income not reported on an information return form (like a Form W-2 or 1099) or other income statement; or income paid in cash, property, goods or digital assets.
The Tax Division reminds gig economy workers that the IRS has information and tips for how they can comply with their tax obligations. The IRS also has guidance for digital platform providers about their tax reporting and filing requirements.
John Doe Ex Parte Petition Order - JA.pdf
24 December 2024
Former Federal Bureau of Prisons employees convicted of charges arising from their failure to obtain medical care for an inmate who later died from his injuriesRead the Press Release
RICHMOND, Va. – A Federal Bureau of Prisons (FBOP) lieutenant was found guilty on Dec. 21 of violating the civil rights of an inmate by showing deliberate indifference to the inmate’s serious medical needs. The lieutenant and an FBOP nurse were also found guilty of making false statements to a federal agent with the intent to obstruct the investigation into the inmate’s death.
According to court documents and evidence introduced at trial, Lieutenant Shronda Covington, 49, and Registered Nurse Tonya Farley, 53, both of Chesterfield, were on duty and working in their official capacities at the Federal Correctional Institution at Petersburg on Jan. 9, 2021. Covington willfully failed to ensure that the inmate, a 47-year-old man identified as W.W., was provided with necessary medical care, even though she knew that W.W. had a serious medical need, and Covington and Farley each made false statements to federal agents during the investigation into the inmate’s death.
Another FBOP official, Lieutenant Michael Anderson, previously pleaded guilty for his role in the inmate’s death and was sentenced to three years in custody.
“These defendants showed an appalling indifference and disregard for W.W.’s life,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold accountable those who fail in their duty to provide basic care and humane treatment to those in their custody.”
“Federal inmates are human beings in a uniquely vulnerable environment,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “Their care is the responsibility of corrections staff entrusted to uphold the highest standards of professional conduct. The failure to honor that trust in this case cost a man his life.”
“Covington’s inexcusable apathy to the medical needs of W.W. over the course of two days caused his unnecessary death,” said Special Agent in Charge Tim Edmiston of the Justice Department’s Office of the Inspector General Mid-Atlantic Region. “Covington and Farley also decided to lie about their involvement in order to escape accountability. The Justice Department Office of the Inspector General will continue to investigate civil rights violations at the hands of Federal Bureau of Prisons employees.”
Evidence presented at trial established that, in the early morning hours of Jan. 9, 2021, W.W.’s cellmate reported to facility staff that W.W. was exhibiting bizarre and unprecedented behavior, including that he was suddenly incontinent and unable to talk and walk normally. Over the course of two days, FBOP officials knew of but disregarded W.W.’s symptoms of a sudden neurological crisis, including his sudden incontinence, incomprehension, inability to talk, and struggles to stand or walk without falling.
Without medical attention to address his sudden and serious medical need, W.W. fell into walls and other objects numerous times, causing significant bruising and bleeding to his head and body. Although FBOP policy requires staff to provide necessary medical care to inmates, Covington and Anderson ignored the policy and their training and failed to respond to repeated calls for help from inmates and line staff.
W.W. finally fell head-first into a wall and then to the floor in an observation cell, where — despite inmate-observers’ continued calls for help — he lay for an hour and 40 minutes before officers rendered aid. An autopsy concluded that W.W. died of blunt force trauma to his head and that the lack of medical assistance he received during his series of falls and after his last fall contributed to his death.
Covington is scheduled to be sentenced on May 7, 2025, and Farley is scheduled to be sentenced on May 8, 2025. Covington faces a maximum penalty of 15 years in prison, and Farley faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence based on the U.S. Sentencing Guidelines and other statutory factors.
The Justice Department’s Office of the Inspector General investigated the case.
Assistant U.S. Attorney Thomas A. Garnett for the Eastern District of Virginia and Special Litigation Counsel Kathryn E. Gilbert and Trial Attorney Katherine McCallister of the Civil Rights Division’s Criminal Section are prosecuting the case and were previously assisted by then-Trial Attorney Matthew Tannenbaum of the Justice Department’s Civil Rights Division.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:23-cr-68.
23 December 2024
Virginia Man Sentenced to 180 Months in Prison for Possession with Intent to Distribute FentanylRead the Press Release
NEWARK, N.J. – A Virginia man was sentenced today to 180 months in prison for possession with intent to distribute fentanyl, U.S. Attorney Philip Sellinger announced today.
Djavon Holland, 37, of Virginia, was convicted on April 15, 2024, by a federal jury of two counts of possession with intent to distribute fentanyl following trial before U.S. District Judge Peter G. Sheridan in Trenton federal court. U.S. District Judge Robert Kirsch imposed the sentence today in Trenton federal court.
According to court documents and evidence presented at trial:
In August 2021, law enforcement officials received information that Holland was engaged in narcotics trafficking in or around the Virginia area and New Jersey. On Aug. 12, 2021, a confidential source working with the Ocean County Prosecutor’s Office contacted Holland to arrange a meeting with a confidential source working with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). On several occasions, Holland drove to New Jersey and sold fentanyl to ATF’s confidential source.
In addition to the prison term, Judge Kirsch sentenced Holland to 4 years of supervised release.
U.S. Attorney Sellinger credited special agents of the ATF, under the direction of Special Agent in Charge L.C. Cheeks Jr., and the Ocean County Prosecutor’s Office, under the direction of Ocean County Prosecutor Bradley D. Billhimer, with the investigation leading to the sentencing.
The government is represented by Assistant U.S. Attorneys Megan N. Linares and Jenny Chung of the Office’s Criminal Division in Newark.
Defense counsel: Pro Se; Michael Alexander Thomas Esq., Assistant Federal Public Defender, Newark, Standby Counsel
VA Hospital Nurse Indicted for Child PornographyRead the Press Release
KANSAS CITY, Mo. – A nurse at the Veterans Affairs hospital in Kansas City, Mo., has been indicted by a federal grand jury on charges related to child pornography.
Paul Robert Wyatt, 56, of Excelsior Springs, Mo., was charged in a three-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Tuesday, Dec. 17. The indictment was unsealed and made public today following Wyatt’s arrest and initial court appearance.
Wyatt is employed as a nurse at the Kansas City V.A. Medical Center on Linwood Boulevard in Kansas City, Mo.
The federal indictment alleges that Wyatt distributed child pornography over the internet on Sept. 9, 2023. The indictment also charges Wyatt with one count of receiving child pornography on Oct. 12, 2023, and one count of possessing child pornography (which involved a victim under the age of 12) on Nov. 22, 2023.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Maureen A. Brackett. It was investigated by the FBI.
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."
U.S. Attorney’s Office, the FBI, Along with Tribal and Local Law Enforcement Officials, Release Final “Don’t Click December” PSARead the Press Release
BOISE – During the holiday season, online criminals increasingly target Idahoans through online scams and fraud schemes. Today, U.S. Attorney Josh Hurwit, along with the FBI, the Fort Hall Police Department, the Bannock County Prosecuting Attorney’s and Sheriff’s Offices, the Bonneville County Prosecuting Attorney’s and Sheriff’s Offices, the Idaho Falls Police Department, and the Pocatello Police Department, released a fourth and final PSA as part of their joint “Don’t Click December” Consumer Protection Campaign. The AARP is also participating in the announcement and the awareness campaign.
The campaign advises members of the public to exercise skepticism and caution when receiving unsolicited online, email, pop-up, or text communications from unknown or unverified sources. If there is any doubt about a link, message, or attachment, law enforcement cautions: “Don’t Click It.”
In the fourth PSA, available here, Pocatello Police Chief Roger Schei, Bonneville County Sheriff Samuel Hulse, and U.S. Attorney Josh Hurwit warn the public about the “Tech Support” scam and explain some of the ways in which individuals can protect themselves.
In this scam, criminals impersonate technology, banking, or government officials to convince victims to share personal information. You could get a pop-up on your computer indicating your accounts have been hacked and to call a number. But that number goes to the scammer who tries to manipulate you to gain access to your computer or accounts and takes your money to fix a non-existent problem. If you get such a request, Don’t Click It. Government entities and legitimate businesses will never call you or send unsolicited pop-up messages to ask for access to your computer.
This four-part series of PSAs were released in the weeks leading up to Christmas is an effort to alert the public to other common online fraud schemes that Idaho law enforcement has seen affect Idahoans.
Unfortunately, these are not the only schemes affecting the public, and new schemes arise all the time. Law enforcement hopes that the “Don’t Click December” Consumer Protection Campaign will raise public awareness and encourage individuals to talk to their friends and relatives about not clicking suspicious links, texts, messages, pop-ups, or attachments.
“Through the Don’t Click December campaign, we recognize that any Idahoan with a smartphone, tablet, or computer is likely to be targeted by online criminals at some point,” said U.S. Attorney Hurwit. “But we are not helpless. By being aware of common schemes and by talking to loved ones about the red flags of online fraud, every Idahoan can make a difference in this fight.”
“As technology continues to evolve and scammers become more aggressive and creative in their tactics, the public should be more vigilant than ever,” said Special Agent in Charge Shohini Sinha of the Salt Lake City FBI. “The FBI is committed to prevention and awareness efforts during the holiday season and throughout the year. Anyone who believes they are a victim of a scam should call their bank, report the crime to law enforcement, and file a complaint with the FBI's Internet Crime Complaint Center at www.IC3.gov.”
The U.S. Attorney’s Office and its law enforcement partners recognize that we all must work to eliminate the stigma individuals may experience if they are victimized. There is no shame to falling victim to an online scheme, which are often designed by professional criminals, sophisticated, and tested repeatedly across the country.
For this reason, the “Don’t Click December” Consumer Protection Campaign also publicizes ways to report scams and incidents of fraud to the FBI and local law enforcement.
To learn more about these and other scams targeting Americans visit FBI.gov, and if you believe you have been victimized, take-action by reporting it to FBI’s Internet Crime Complaint Center at IC3.gov or by contacting your local law enforcement agency.
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U.S. Attorney Philip R. Sellinger Announces His ResignationRead the Press Release
NEWARK, N.J. – The United States Attorney for the District of New Jersey, Philip Sellinger, announced his resignation today, effective at 11:59 p.m., Jan. 8, 2025. Mr. Sellinger made the following statement regarding his departure and tenure in office:
Serving as the United States Attorney has been the honor of a lifetime. My sincere thanks to President Biden for appointing me the temporary steward of the U.S. Attorney’s Office. I leave knowing the storied traditions of this Office will continue through our dedicated career Assistant U.S. Attorneys and staff. Here is just a fraction of their accomplishments over the past three years.
Violent Crime
Targeting New Jersey’s violent street gangs has been a top priority of my administration. Building on the Office’s strong tradition in this area, our Violent Crime Initiatives (“VCIs”) in Newark, Jersey City, Camden, and Paterson bring together our federal and local law enforcement partners to identify, investigate and prosecute the perpetrators driving shootings and the lethal drug trade in our communities. Rather than broadly imposing mandatory minimum sentences, we have reserved the most severe sentences for these drivers of violence. This targeted approach has proven extremely effective. Shootings and murders in New Jersey have fallen steadily year over year. The total number of shooting victims statewide fell from 1,166 in 2021, to 733 in 2023, and murder victims fell from 250 in 2021, to 190 total in 2023. In 2024, shootings and murders continue to decline.
And because our responsibility to protect vulnerable members of the community extends well beyond gang violence, after nearly a decade of skillful appellate advocacy, we obtained significant sentences for a husband and wife who inflicted years of devastating abuse on their three young foster children while living at the Picatinny Arsenal and elsewhere.
Civil Rights
I created the first standalone Civil Rights Division at any U.S. Attorney’s Office, bringing civil and criminal AUSAs together to combat hate and protect civil rights, including the alarming rise in hate incidents against our Black, Jewish and Muslim communities. We advanced the civil rights of the people of New Jersey in several areas.
We obtained the hate crime conviction of a man who committed a string of violent assaults—including carjackings—on visibly identifiable members of the Orthodox Jewish community around Lakewood, New Jersey. We obtained the conviction of a man who admitted to publishing a manifesto containing threats to attack a synagogue and Jewish people. And we secured a hate crime conviction against a man who admitted to breaking into the Center for Islamic Life at Rutgers University, during the Eid-al-Fitr holiday, where he destroyed religious artifacts. We also charged an individual with throwing a Molotov cocktail at a Jewish temple, which charges remain pending.
We brought civil lawsuits to end systemic racism of communities of color by major banks in and around Newark and New Brunswick, obtaining remedies likely to result in $250 million in loans for the residents of Black, Hispanic, and Asian neighborhoods. We issued findings that New Jersey Veterans Homes provided grossly inadequate conditions resulting in some of the highest death rates in the nation during the COVID-19 pandemic and secured a consent decree to protect the constitutional rights of the veterans. And after issuing a Findings Report regarding systemic violations of Fourth Amendment rights by the Trenton Police Department, we have taken significant steps to end unconstitutional policing in Trenton.
We also brought lawsuits securing the right of religious organizations to build temples and mosques in the face of discriminatory zoning policies. And we protected voting rights for Spanish speakers in Union County, and access to the polls for individuals with disabilities in Hudson and Morris Counties.
Economic Crimes and Government Fraud
My Office led the investigation into TD Bank’s pervasive failures to prevent money laundering networks from using the bank to move massive sums of illicit funds. Our investigation established that the bank did not monitor 92% of its funds, totaling $18 trillion, for a period of years. This allowed criminal money laundering networks to move over $670 million through the bank. The investigation recently culminated in TD Bank’s landmark guilty plea to violating the Bank Secrecy Act and conspiring to commit money laundering, resulting in over $1.8 billion in criminal penalties. We prosecuted and obtained convictions of a shadow CEO of a real estate firm for perpetrating a Ponzi scheme that scammed thousands of victims out of $658 million and an Army reservist who defrauded and stole from Gold Star families. We prosecuted several other securities fraud, insider trading and market manipulation cases.
And we charged the chief executive officer and a foreperson of a construction company hired by the city of Newark to replace lead pipes, whom we allege intentionally left lead pipes in the ground, endangering public health.
Cyber Crime
During my administration, our Cybercrime Unit achieved international prominence, leading the investigation of LockBit, then the most prolific and destructive ransomware group in the world. LockBit victims included hospitals, schools, nonprofit organizations, critical infrastructure facilities, and government and law-enforcement agencies across nearly 120 countries, including Washington D.C.’s Metropolitan Police Department. Before being disrupted through the efforts of our Office and our international partners, LockBit had extracted over $500 million in ransom payments worldwide and caused billions of dollars in broader losses. We charged seven LockBit members, including its leader, and have obtained two convictions to date.
National Security
Our National Security Unit, working in partnership with the FBI and our state and local partners, has protected New Jersey from domestic and international threats.
We swiftly charged a former Marine for his threats to commit mass shootings targeting white people in New Jersey. We successfully prosecuted two individuals for concealing material support to designated foreign terrorist organizations Hamas and Hay'at Tahrir al-Sham (HTS). And we also charged three Chinese intelligence officers, along with a Chinese national, with conspiracy to act in the United States as agents of China. Among other things, the conspirators allegedly attempted to recruit an individual who was a former federal law enforcement officer and state homeland security official, and was then serving as a professor at an American university.
Health Care Fraud and Opioid Abuse Prevention and Enforcement
Our Health Care Fraud Unit prosecuted individuals and companies responsible for defrauding government and private health care plans; government contract and customs fraud; unlawful kickback schemes; and fraudulently obtaining millions in federal COVID-19 relief loans. Our Opioid Abuse Prevention and Enforcement Unit aggressively prosecuted the crooked doctors, pharmacies, and sales representatives who put opioids on the street.
Civil Litigation and Asset Recovery
Our Civil Division successfully represented various branches of the United States government in a wide variety of civil and administrative litigation. Quite apart from the $1.8 Billion criminal penalty recovered from TD Bank, for fiscal years 2022, 2023 and 2024, the District of New Jersey collected a total of over $599 million in criminal and civil debts, including restitution for victims, criminal fines, civil penalties, and in cases the office handled jointly with other U.S. Attorney’s Offices and components of the Department of Justice.
Office Transformation
Because of the office’s demonstrated track record, we secured a rare opportunity to hire more AUSAs and support staff. With over 165 AUSAs, the Office is now the largest, and the most impactful, it has ever been. At the same time, building on the office’s longstanding strengths in eLitigation, and U. S. Attorney Sellinger’s role as Chair of the DOJ-wide Elitigation Advisory Council, the office has substantially upgraded its capacity for electronic review of evidence.
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The attorneys and staff members of this Office are some of the finest public servants in the country. They work extraordinarily hard, uphold the highest standards of excellence, and ceaselessly pursue the cause of justice. It is their dedication and commitment that has enabled this Office to achieve so much over the past three years.
Acting U.S. Attorney
Upon United States Attorney Sellinger’s departure, First Assistant U.S. Attorney Vikas Khanna will become Acting U.S. Attorney.
Pending Charges
With respect to all individuals and entities noted above against whom charges remain pending, the charges and allegations contained in the charging instruments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two Quad Cities Men Sentenced for Multiple Armed Robbery and Firearm ChargesRead the Press Release
ROCK ISLAND, Ill. – Two Quad Cities men, Emmanuel Lance Howard, 24, of Davenport, Iowa, and Evander Allen Jordan, 39, of Rock Island, Illinois, were sentenced on December 18, 2024, for conspiracy to commit armed robbery and multiple robbery and firearms charges. Howard was sentenced to a total of fifty years of imprisonment and Jordan was sentenced to a total of one hundred and fifty years and one month of imprisonment.
Howard and Jordan were found guilty following a two-week jury trial held in August 2024. The men have remained in federal custody since they were arrested in 2021.During the trial, the government presented evidence to establish that, in the summer and fall of 2020, Howard and Jordan committed ten separate armed robberies in the Quad Cities area, including five armed robberies of retail stores in Rock Island and Moline, one armed robbery and shooting of a man, and a carjacking of a woman in Rock Island, along with three armed robberies of retail stores in Davenport. During their violent crime spree, in which they stole firearms, money, jewelry, and other property, Howard and Jordan shot two men, pistol-whipped and assaulted others, and repeatedly threatened the lives of all of the more than 20 victims. One victim repeatedly begged for her life, and another was so terrified that she feared her young son at home, across the street from the robbery, would hear his mother being shot.
Following an extensive investigation involving the Rock Island, Davenport, and Moline police departments; the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”); and the Federal Bureau of Investigation (“FBI”), Howard and Jordan were charged in 2021 in a fifteen-count indictment with one count of conspiracy to commit armed robbery, five counts of Hobbs Act robbery, one count of carjacking, six counts of brandishing or discharging a firearm in furtherance of a crime of violence, and one count of possession of a firearm by a convicted felon. These charges were the result of Howard and Jordan committing the following armed robberies in Rock Island, Moline, and Davenport:
• July 31, 2020: Little Caesar’s on 18th Avenue Rock Island, Illinois
• August 14, 2020: Little Caesar’s on West Locust Street, Davenport, Iowa
• September 5, 2020: MidWest Title Loans on 11th Street, Rock Island, Illinois
• September 12, 2020: Pizza Hut on Locust Street, Davenport, Iowa
• September 12, 2020: Papa John’s on 19th Avenue, Moline, Illinois
• September 18, 2020, Carjacking, Rock Island, Illinois
• October 4, 2020: Domino’s Pizza on 14th Avenue, Rock Island, Illinois
• October 9, 2020: Kwik Shop on Telegraph Road, Davenport, Iowa
• October 16, 2020: Pawn King on 11th Street, Rock Island, Illinois
At the sentencing hearing in front of Chief U.S. District Judge Sara Darrow, the government noted the violent nature of Howard and Jordan’s crimes and the need to protect the public. Also at the hearing, Judge Darrow commented on the relentless nature of their conduct, the physical harm that they inflicted on the victims of their crimes, and the lasting impact of their crimes on the lives of others.
In addition to the sentences of imprisonment imposed in this case, Jordan – who was on supervised release for conspiracy to commit armed bank robbery, armed bank robbery, and brandishing a firearm during a robbery – also had that term of supervised release revoked.
“These crimes were committed with a viciousness that had life-altering consequences for the victims. A sentence of this magnitude will ensure these offenders are unable to harm others in the future.” said U.S. Attorney Gregory K. Harris. “The exemplary cooperation among the law enforcement professionals in Rock Island, Moline, Davenport; the Bureau of Alcohol, Tobacco and Firearms; and the Federal Bureau of Investigation, resulted in these individuals being held accountable and sent the message that violent crimes will not be tolerated in our communities.”
“The severity of this sentence holds accountable these two defendants who created fear throughout the community,” said ATF Special Agent in Charge Christopher Amon of the Chicago Field Division. “Working collectively with our law enforcement partners and the United States Attorney’s Office strengthens our ability to investigate and prosecute these important cases.”
“I would like to extend my deepest appreciation to the U.S. Attorney’s Office and all law enforcement agencies involved in the investigation and successful prosecution of Emmanuel Howard and Evander Jordan,” said Chief Timothy J. McCloud of the Rock Island Police Department. “Countless hours spent bringing dangerous individuals to justice are a testament to the strength of our partnerships and commitment to providing a safer Quad Cities. We can all breathe easier knowing these two criminals will no longer threaten the safety of our great community.”“Today’s sentencing sends a clear message to those involved in this case and anyone considering terrorizing our communities with violence. It will not be tolerated.” said Darren J. Gault, Chief of Police for the Moline Police Department. “The Quad Cities is a great place to live, visit and do business. I am grateful to our federal partners for prosecuting this interstate crime spree and bringing the offenders to justice. The Quad Cities law enforcement community works very well together and contributes to strong public safety.”
The statutory penalty for the conspiracy to commit robbery and robbery charges is up to 20 years in prison; the statutory penalty for the carjacking charge is up to 15 years in prison; the statutory penalty for the possession of a firearm in furtherance of a crime of violence charge is a minimum consecutive sentence for each count charged of seven years to life in prison; the statutory penalty for the discharge of a firearm in furtherance of a crime of violence charge is a minimum consecutive sentence of 10 years to life in prison; and the statutory penalty for the possession of a firearm by a convicted felon charge is up to ten years in prison. As a result, Howard faced a statutory mandatory minimum sentence of 45 years to life in prison for just the firearms offenses. Jordan had a prior federal firearms conviction for brandishing a firearm during a robbery and faced a minimum of 150 years to life in prison for the firearms offenses alone.
The case investigation was conducted by the Rock Island, Davenport, and Moline Police Departments, as well as the Bureau of Alcohol, Tobacco and Firearms and the Federal Bureau of Investigation, Springfield Field Office. Assistant U.S. Attorneys Jennifer Mathew, Timothy Bass and Jeffrey Kienstra represented the government in the prosecution.
Two Indicted in Red Lake Drug Trafficking ConspiracyRead the Press Release
MINNEAPOLIS – Two men have been indicted for conspiracy to distribute methamphetamine and fentanyl on the Red Lake Indian Reservation, announced United States Attorney Andrew M. Luger.
According to court documents, on or about September 4, 2024, Bobby Lee Donnell, 46, and Jordan Lee Lussier, 29, were stopped by the Minnesota State Patrol. A state trooper checked Donnell’s and Lussier’s driver’s licenses and found both had been revoked; Lussier also had a warrant for his arrest. A subsequent search of the vehicle led to the discovery of over 50 grams of methamphetamine and over 40 grams of fentanyl.
Donnell and Lussier were each indicted on one count of conspiracy to possess methamphetamine and fentanyl with the intent to distribute. An arraignment and motions hearing has been scheduled for January 24, 2025.
This case is the result of an investigation conducted by the FBI, Paul Bunyan Drug Task Force, and the Minnesota State Patrol.
Assistant U.S. Attorney Campbell Warner is prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Stilwell Resident Sentenced for ArsonRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Aaron Welch Earley, age 42, of Stilwell, Oklahoma, was sentenced to 24 months in prison for one count of Arson in Indian Country. The Court also ordered Earley pay restitution in the amount of $130,268.91.
The charge arose from an investigation by the Adair County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On March 28, 2024, Earley pleaded guilty to the charge. According to investigators, on March 14, 2023, Earley willfully and maliciously set fire to an insured Westville, Oklahoma, residence for financial benefit. The total reported loss exceeded $100,000.
The crime occurred in Adair County, within the boundaries of the Cherokee Nation Reservation, in the Eastern District of Oklahoma.
The Honorable Ronald A. White, Chief U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. Earley will remain in the custody of the U.S. Marshals Service pending transportation to a designated United States Bureau of Prisons facility to serve a non-paroleable sentence of incarceration.
Assistant U.S. Attorney Kevin Gross represented the United States.
Slidell Man Sentenced for Possession of Child Sexual Abuse MaterialsRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced that on December 18, 2024, CHRISTOPHER MICHAEL SOMMERS (“SOMMERS”), age 42, of Slidell, La., was sentenced for Possession of Materials Involving the Sexual Exploitation of Minors, in violation of Title 18, United States Code, Sections 2252(a)(4)(B) and (b)(2). United States District Judge Jane Triche Milazzo sentenced SOMMERS to ten (10) years imprisonment, followed by a fifteen (15) year term of supervised release, and a $100 mandatory special assessment fee.
The defendant’s sentence was subject to a sentencing enhancement of a ten-year mandatory minimum because of a conviction on December 13, 2011, in the United States District Court, Eastern District of Louisiana, for Receipt of Child Pornography, in violation of Title 18, United States Code, Section 2252(a)(2).
According to court documents, the case against SOMMERS developed from an undercover online investigation by the Apache Junction Police Department in Arizona into those individuals who were sharing Child Sexual Abuse Material (“CSAM”). As a result, on April 3, 2024, Homeland Security Investigations (“HSI”) special agents, along with the St. Tammany Parish Sheriff’s Office and the Louisiana Bureau of Investigation, executed a federal search warrant at SOMMERS’s residence in Slidell. During the execution of the search warrant, SOMMERS was found in possession of a Samsung 256 gigabyte USB thumb drive containing 950 images and videos depicting the sexual victimization of minors.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office would also like to acknowledge the assistance of the U.S. Department of Homeland Security, Homeland Security Investigations; the St Tammany Parish Sheriff’s Office; The Apache Junction Police Department; and the Louisiana Bureau of Investigation, with this matter. The prosecution of this case is being handled by Assistant U.S. Attorney Brian M. Klebba, Chief of the Financial Crimes Unit.
Sequoyah County Resident Sentenced for Federal Drug CrimeRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Robert Carl Ward, age 69, of Vian, Oklahoma, was sentenced to 120 months in prison for one count of Possession with Intent to Distribute Methamphetamine.
The charge arose from an investigation by the Sequoyah County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On June 3, 2024, Ward pleaded guilty to the charge. According to investigators, on January 2, 2024, agents discovered Ward in possession of possessed gallon-size baggies containing crystalline methamphetamine, two sets of digital gram-weight scales, and smaller plastic baggies filled with crystalline methamphetamine. In total, Ward possessed over 575 grams of methamphetamine, a Schedule II controlled substance, which he intended to distribute.
The Honorable Ronald A. White, Chief U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. Ward will remain in the custody of the U.S. Marshals Service pending transportation to a designated United States Bureau of Prisons facility to serve a non-paroleable sentence of incarceration.
Assistant U.S. Attorneys Rachel Geizura and Edith Singer represented the United States.
Sartell Woman Pleads Guilty in Bank Fraud CaseRead the Press Release
MINNEAPOLIS – A Sartell woman has pleaded guilty to wire fraud, announced U.S. Attorney Andrew M. Luger.
According to court documents, Adelle Starin, 40, engaged in a fraud scheme through a Minnesota business she founded and operated called Baby’s on Broadway, which sold baby products and toys. As part of the scheme, Starin submitted fraudulent claims for reimbursement to TRICARE, a healthcare program of the U.S. Department of Defense Military Health System. TRICARE paid out many of Starin’s fraudulent claims, but when TRICARE began rejecting those claims, Starin expanded her scheme to bring other sources of revenue into her company. She created a company called Sunshine Medical LLC and represented to two lenders—Liquid Capital Enterprises Corp. and Slope Tech. Inc.—that she needed financing to buy inventory for Baby’s on Broadway from Sunshine. In reality, and as Starin knew, Sunshine Medical had no business operations or revenue. To execute this scheme, Starin created fake Sunshine Medical invoices. She then sent those invoices to the lenders by means of wire communications in interstate commerce. Over the course of her scheme, Starin obtained over $9,000,000 in financing on the basis of her misrepresentations.
Starin pleaded guilty on December 19, 2024, in U.S. District Court to one count of wire fraud before Judge Jeffrey Bryan. A sentencing hearing will be scheduled at a later date.
The case is the result of an investigation by the FBI, and the U.S. Department of Defense’s Defense Criminal Investigative Service and Defense Health Agency Office of Inspector General.
Assistant U.S. Attorney Daniel W. Bobier is prosecuting the case for the United States.
Sacramento Man Pleads Guilty to Sexual Assault of Fellow Passenger Aboard International Flight to San FranciscoRead the Press Release
SAN FRANCISCO – Rajesh Kumar Kapoor, 57, of Sacramento, pleaded guilty on Dec. 19, 2024, to sexual assault of another passenger aboard an aircraft bound for San Francisco.
Defendant was indicted on Mar. 13, 2024. The indictment alleged that, while on a flight from the Republic of Korea to San Francisco on Jan. 16, 2024, Kapoor touched the victim’s breasts and inner thigh without permission.
In connection with pleading guilty, Kapoor admitted that he intentionally touched the victim’s inner thigh without the victim’s permission and with the intent to harass her. Kapoor pleaded guilty, with no plea agreement from the government, to abusive sexual contact in violation of 18 U.S.C. § 2244(b).
“Sexual assault has no place in our society, not on the ground and not in the skies. Airline passengers should not have to fear sexual assault while traveling. These assaults are federal crimes, and I urge the public to report them to law enforcement so they can be investigated and prosecuted,” said United States Attorney Ismail J. Ramsey.
"Sexual misconduct on an aircraft is a serious violation of federal law and public trust,” said Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp. “Everyone has the right to feel safe while traveling. The FBI will continue working with our partners to ensure justice for victims of such outrageous criminal behavior.”
Kapoor’s sentencing is scheduled for Mar. 27, 2025, before the Honorable Edward M. Chen, Senior U.S. District Judge. He faces a statutory maximum of two years in prison and a $250,000 fine. Any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Special Assistant United States Attorney Matthew Chou and Assistant United States Attorney Nicholas M. Parker are prosecuting this case with the assistance of Claudia Hyslop, Marina Ponomarchuk, Andy Ding, and Tina Rosenbaum. The prosecution is the result of an investigation by the FBI, with assistance from U.S. Customs and Border Protection and the San Francisco Police Department Airport Bureau.
Redmond Man Sentenced to Federal Prison for Identity Theft and Evading Tax Debt PaymentsRead the Press Release
EUGENE, Ore.—A Redmond, Oregon man was sentenced to federal prison Tuesday for using a stolen identity to open more than 30 bank accounts and credit cards and evading payments on his $1.1 million tax debt.
Michael David Anastasia, 69, was sentenced to 24 months in federal prison and three years’ supervised release. He was also ordered to pay $777,899 in restitution to his victim. Restitution to the IRS will be determined at a later date.
According to court documents, from 2002 until January 2020, Anastasia knowingly and intentionally used the social security number of a victim to open numerous bank accounts and credit cards. In addition, between 1991 and 2003, Anastasia received $1.4 million from another victim after convincing them of a fabricated agreement with the United States to secure access to allegedly seized funds. In 2007, Anastasia was convicted of tax evasion for failing to pay federal income taxes on the funds received from the victim.
In November 2015, following his release from prison, Anastasia entered into an agreement with the IRS whereby he would make payments towards his tax debt if he received more than $4,526 per month. Rather than pay his taxes, Anastasia convinced the victim to send funds over this amount to his roommate. Anastasia instructed his roommate to withdraw the overage in cash, which Anastasia stored in a safe in his residence. Between March 2016 and September 2018, Anastasia evaded paying more than $180,000 to the IRS.
On February 15, 2024, a federal grand jury in Eugene returned a nine-count superseding indictment charging Anastasia with wire fraud, aggravated identity theft, tax evasion, and making false statements to financial institutions.
On September 4, 2024, Anastasia pleaded guilty to tax evasion and identity theft.
This case was investigated by the FBI and IRS. It was prosecuted by Gavin W. Bruce and William M. McLaren, Assistant U.S. Attorneys for the District of Oregon.
Raleigh Man Who Fled from Police with “Ghost Gun” Sentenced to Eight YearsRead the Press Release
RALEIGH, N.C. – A Raleigh man was sentenced to 96 months in prison after fleeing from the police and discarding a “ghost gun”. On May 22, 2024, Treyvion Maleke Sutton pled guilty to being a felon in possession of a firearm and ammunition.
According to court documents and other information presented in court, on December 8, 2023, Sutton, 20, fled from Raleigh police officers on foot after officers attempted a traffic stop of a vehicle in which he was a passenger. While running from officers, Sutton discarded a loaded, unserialized “ghost gun” with an extended magazine. Sutton, who has prior felony convictions for common law robbery, assault by strangulation, discharge of a weapon into occupied property, assault with a deadly weapon with intent to kill and battery of an unborn child, was prohibited from possessing firearms or ammunition.
A privately made firearm is often called a “ghost gun” because it is not marked with a serial number and therefore is far more difficult for law enforcement to trace if they are used to commit crimes. These firearms can be made from scratch, or they can be assembled from weapon parts kits, including “buy-build-shoot” kits, which are weapon part kits with pre-manufactured, dissembled, complete firearms (a firearm in a box).
The conviction is a result of the ongoing Violent Crime Action Plan (VCAP) initiative which is a collaborative effort with local, state, and federal law enforcement agencies, working with the community, to identify and address the most significant drivers of violent crime. VCAP involves focused and strategic enforcement, and interagency coordination and intelligence-led policing.
Michael F. Easley, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The Federal Bureau of Investigation and the Raleigh Police Department investigated the case and Assistant U.S. Attorney Sarah E. Nokes prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:24-CR-24-D-RN.
Operator and Owner of Oil Tanker Plead Guilty and Are Sentenced for Concealment of Pollution from Vessel and Obstruction of JusticeRead the Press Release
Two Greek shipping companies pleaded guilty and were sentenced today for violating the Act to Prevent Pollution from Ships (APPS), falsifying records and obstruction of justice. The charges arose out of two United States port calls in which crew members of the Motor Tanker Kriti Ruby presented false records to the U.S. Coast Guard (USCG) to conceal illegal transfers and discharges of oily bilge water from the vessel.
As part of the plea, Avin International Ltd. and Kriti Ruby Special Maritime Enterprises were ordered to pay a criminal fine of $3,375,000 and a $1,125,000 community service payment to the National Fish and Wildlife Foundation. Both companies were also sentenced to serve five-year terms of probation during which they will be subject to environmental compliance plans with a monitorship to ensure future compliance.
The companies pleaded guilty and were sentenced for violating APPS in May and September 2022 during port calls by the Kriti Ruby to Jacksonville, Florida, and the Sewaren Terminal of the port of Newark, New Jersey, respectively. The companies also pleaded guilty and were sentenced for falsification of records and obstruction of justice in connection with the September 2022 port call.
The Kriti Ruby’s former chief engineer, Konstantinos Atsalis, was sentenced today to time served and a $5,000 fine after previously pleading guilty to charges related to the discharge of oily waste into the sea — including concealing the pollution by falsifying records — from the Kriti Ruby near the petroleum terminal in Sewaren, New Jersey. Second engineer Sonny Bosito was sentenced to time served for concealing pollution by falsifying records.
“Prioritizing profits over the environment by discharging oily waste into the sea and working to cover up that pollution is illegal,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “We are committed to enforcing the law and fighting against maritime pollution.”
“Maritime pollution is extremely harmful to the environment, and so difficult to detect, especially when the polluters take elaborate steps to falsify records to conceal their crimes,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “Law protecting our seas exist for a reason, and we will work together with our enforcement partners to ensure they are followed, and violators are punished.”
“Today’s plea demonstrates our unwavering commitment, in partnership with the Environmental Crimes Section and the U.S. Attorney’s Office, to ensuring compliance of critical domestic oil pollution laws and holding violators of these laws accountable,” said Rear Admiral Michael E. Platt, Commander of USCG’s First District. “Please assist the Coast Guard in these vital efforts by promptly reporting any suspicions of similar illegal activity onboard vessels directly to the Coast Guard Investigative Service.”
According to court documents and statements made in court, the Kriti Ruby is an ocean-going oil tanker registered in Greece. It is owned by Avin International and operated by Kriti Ruby Special Maritime Enterprises. On multiple occasions between May and September 2022, crew members discharged oily waste into the sea via the ship’s sewage system, bypassing required pollution prevention equipment. They did not, as required, record these discharges in the vessel’s oil record book. To make it difficult for the USCG to discover, crew members concealed most of the pumps and hoses used to conduct the bypass operations in a sealed void space called a “cofferdam.”
As part of his guilty plea, Atsalis admitted to falsifying the vessel’s oil record book and he acknowledged that the vessel’s crew had knowingly bypassed required pollution prevention equipment by discharging oily waste from the vessel’s engine room through its sewage system into the sea. Additionally, he admitted that he directed crew members to hide equipment used to conduct these transfers.
Bosito admitted to causing a false oil record book to be presented to the USCG during its inspection of the Kriti Ruby. He also admitted to directing crew members to hide equipment used to conduct transfers from the bilge wells to the sewage tank before the USCG’s inspection.
The USCG’s Investigative Service (CGIS) investigated the case. Individuals can report suspicious activity onboard vessels to CGIS TIPS at www.p3tips.com/878.
Senior Trial Attorney Kenneth E. Nelson and Trial Attorney Lauren D. Steele of ENRD’s Environmental Crimes Section, Assistant U.S. Attorneys Joseph Stern and Kathleen P. O’Leary for the District of New Jersey and Special Assistant U.S. Attorney Katherine E. Ward for the District of New Jersey prosecuted the case.
Operator and Owner of Oil Tanker Plead Guilty to Concealment of Pollution from Vessel and Obstruction of JusticeRead the Press Release
NEWARK, N.J. – Two Greek shipping companies pleaded guilty today to violating the Act to Prevent Pollution from Ships (APPS), falsifying records and obstruction of justice. The charges arose out of two United States port calls in which crew members of the Motor Tanker Kriti Ruby presented false records to the U.S. Coast Guard to conceal illegal transfers and discharges of oily bilge water from the vessel.
In accordance with the plea, United States District Judge Esther Salas sentenced Avin International Ltd. and Kriti Ruby Special Maritime Enterprises to pay a criminal fine of $3,375,000 and a $1,250,000 community service payment to the National Fish and Wildlife Foundation. She also sentenced them to serve five-year terms of probation during which they will be subject to environmental compliance plans with a monitorship to ensure future compliance.
The companies pleaded guilty for violating APPS in May and September 2022 during port calls by the Kriti Ruby to Jacksonville, Florida, and the Sewaren Terminal of the port of Newark, respectively. The companies also pleaded guilty to falsification of records and obstruction of justice in connection with the September 2022 port call.
The Kriti Ruby’s former chief engineer, Konstantinos Atsalis, was sentenced today to time served and ordered to pay a $5,000 fine after previously pleading guilty to charges related to the discharge of oily waste into the sea — including concealing the pollution by falsifying records — from the Kriti Ruby near the petroleum terminal in Sewaren, New Jersey. Second engineer Sonny Bosito was sentenced to time served for concealing pollution by falsifying records.
“Maritime pollution is extremely harmful to the environment, and so difficult to detect, especially when the polluters take elaborate steps to falsify records to conceal their crimes. Law protecting our seas exist for a reason, and we will work together with our enforcement partners to ensure they are followed, and violators are punished.”
U.S. Attorney Sellinger
“Prioritizing profits over the environment by discharging oily waste into the sea and working to cover up that pollution is illegal,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “We are committed to enforcing the law and fighting against maritime pollution.”
“Today’s plea demonstrates our unwavering commitment, in partnership with the Environmental Crimes Section and the U.S. Attorney’s Office, to ensuring compliance of critical domestic oil pollution laws and holding violators of these laws accountable,” said Rear Admiral Michael E. Platt, Commander of the U.S. Coast Guard’s First District. “Please assist the Coast Guard in these vital efforts by promptly reporting any suspicions of similar illegal activity onboard vessels directly to the Coast Guard Investigative Service (CGIS).”
According to court documents and statements made in court:
The Kriti Ruby is an ocean-going oil tanker registered in Greece. It is owned by Avin International and operated by Kriti Ruby Special Maritime Enterprises. On multiple occasions between May and September 2022, crew members discharged oily waste into the sea via the ship’s sewage system, bypassing required pollution prevention equipment. They did not, as required, record these discharges in the vessel’s oil record book. To make it difficult for the USCG to discover, crew members concealed most of the pumps and hoses used to conduct the bypass operations in a sealed void space called a “cofferdam.”
As part of his guilty plea, Atsalis admitted to falsifying the vessel’s oil record book and he acknowledged that the vessel’s crew had knowingly bypassed required pollution prevention equipment by discharging oily waste from the vessel’s engine room through its sewage system into the sea. Additionally, he admitted that he directed crew members to hide equipment used to conduct these transfers.
Bosito admitted to causing a false oil record book to be presented to the USCG during its inspection of the Kriti Ruby. He also admitted to directing crew members to hide equipment used to conduct transfers from the bilge wells to the sewage tank before the USCG’s inspection.
The USCG’s Investigative Service investigated the case. Individuals can report suspicious activity onboard vessels to CGIS TIPS at www.p3tips.com/878.
Assistant U.S. Attorneys Joseph Stern and Kathleen P. O’Leary and Special Assistant U.S. Attorney Katherine E. Ward for the District of New Jersey and Senior Trial Attorney Kenneth E. Nelson and Trial Attorney Lauren D. Steele of the Environment and Natural Resources Division’s Environmental Crimes Section prosecuted the case.
03-_avin_dnj_information_signed.pdfOklahoma Man Pleads Guilty in Firearms Trafficking SchemeRead the Press Release
Jacksonville, Florida –United States Attorney Roger B. Handberg announces that Christopher John Murchison (52, Oklahoma) has pleaded guilty to two counts of making false statements in records required to be maintained by a licensed firearms dealer. Murchison faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been scheduled.
According to the plea agreement, Murchison, along with Michael Sawyer and Randolph Swindle, aided and abetted each other to illegally acquire and traffic approximately 177 firearms, which were subsequently sold on the streets for profit. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) began investigating the firearm trafficking operation after several firearms were recovered in connection with international crimes in Puerto Rico and Colombia. The investigation revealed a sophisticated scheme involving Sawyer purchasing firearms online and shipping them to Swindle, a federal firearms licensee in Bunnell, Florida.
Once the firearms arrived, Sawyer prefilled ATF Form 4473s using his own name, as well as the names of his mother and a friend. These falsified forms were then handed to Murchison, who used them to retrieve the firearms from Swindle. Murchison subsequently rebuilt the firearms into assault-rifle-style pistols, which were then handed back to Sawyer for resale on the street. Between July 2021 and February 2022, the group purchased, modified, and trafficked approximately 177 firearms. Many of these firearms have been recovered in connection with crimes both nationally and internationally.
All individuals involved in the scheme have been arrested and have pleaded guilty in federal court. Swindle and Sawyer each pleaded guilty to one count of making false statements in records required by a licensed firearms dealer. They face a maximum penalty of five years in federal prison.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Kirwinn Mike.
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.
Oklahoma Debtors Denied Discharge for Failure to Keep Records or Explain Loss of Millions in AssetsRead the Press Release
The Justice Department’s U.S. Trustee Program (USTP) and Tax Division recently obtained denial of bankruptcy discharge for a married couple in Oklahoma who failed to keep sufficient records, failed to file tax returns for several years and could not satisfactorily explain their loss of $90 million in assets in the years leading up to the bankruptcy.
On Nov. 22, after a three-day trial, the Bankruptcy Court for the Northern District of Oklahoma entered judgment denying a discharge for chapter 7 debtors Tucker and Vickie Link. The Links listed about $79,000 in assets and debts of more than $30 million, mostly tax liabilities to the IRS. The Links maintained a web of foreign and domestic corporate structures that they used to support a lavish lifestyle, including a yacht, an operating ranch and three homes. Despite Tucker Link’s substantial experience in financial services and accounting, the couple had not filed individual tax returns or maintained business records beyond bank statements and promissory notes since 2016. At trial, the evidence revealed that the Links had lost about $90 million in assets since 2006.
The United States — represented by the Tax Division — and the U.S. Trustee filed separate complaints seeking to bar the debtors’ discharge on numerous grounds. After trial, the court issued an opinion denying the discharge. The court based its decision on the debtors’ failure to keep books and records in a way that creditors and the court could gain a meaningful understanding of their financial condition and the debtors’ failure to satisfactorily explain their loss of assets. As the court noted, “[t]o say the Links have created a tangled mess of financial structures that defy understanding is an understatement of epic proportions.”
One of the USTP’s core functions is to combat bankruptcy fraud and abuse through civil enforcement actions against debtors who engage in fraud or otherwise abuse the bankruptcy system. When circumstances warrant, the USTP takes action to deny those debtors a discharge. Under section 727(a)(3) of the Bankruptcy Code, debtors are not entitled to a discharge if they unjustifiably conceal, destroy, mutilate, falsify or fail to maintain or preserve records about their financial condition or business transactions. Under section 727(a)(5), the court can deny a discharge based on a debtor’s failure to satisfactorily explain any loss or deficiency of assets to meet the debtor’s liabilities.
“Bankruptcy requires transparency by debtors seeking the fresh start of a bankruptcy discharge,” said Director Tara Twomey of the Executive Office for U.S. Trustees. “In cases such as this, involving financially sophisticated debtors, there is no excuse for haphazard recordkeeping and opaque explanations for such significant losses.”
The USTP’s mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders — debtors, creditors and the public. The USTP consists of 21 regions with 89 field offices nationwide and an Executive Office in Washington, D.C. Learn more about the USTP at www.justice.gov/ust.
New Orleans Man and Texas Woman Indicted for Wire Fraud, Identity Theft, Money Laundering and Federal Drug OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – United States Attorney Duane A. Evans announced that KEVIN THOMPSON (“THOMPSON”), age 39, of New Orleans, and NINA THOMAS (“THOMAS”), age 34, of Austin, Texas, were charged a superseding indicted on December 13, 2024, for conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, wire fraud, in violation of Title 18, United States Code, Section 1343, aggravated identity theft, in violation of Title 18, United States Code, Section 1028(A)(a)(1), money laundering, in violation of Title 18, United States Code, Section 1957. THOMPSON alone was charged with possession with intent to distribute 500 grams or more of cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B), and possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A).
According to the indictment, in 2020, THOMAS filed a petition for divorce from her husband (“Victim 1”) in 2020 in Texas. In 2021, THOMAS and THOMPSON entered into a romantic relationship. From on or about September 6, 2021, to on or about December 13, 2024, THOMAS and THOMPSON obtained money and property from Victim 1 by fraudulently transferring funds from Victim 1’s bank accounts to bank accounts created by THOMAS and THOMPSON. To obtain these funds, THOMAS and THOMPSON created an email account in Victim 1’s name then opened several bank accounts by using that email account and Victim 1 or THOMPSON’s address, or THOMPSON’s address and/or telephone number. THOMAS and THOMPSON then fraudulently wired funds from Victim 1’s actual financial accounts into the newly created accounts which they controlled. After obtaining the funds from Victim 1’s accounts, THOMAS and THOMPSON made several cash withdrawals, sometimes in amounts as much as $300,000.00, from the accounts that she and THOMPSON created. In addition to making cash withdrawals, THOMAS and THOMPSON used the fraudulently obtained funds to purchase items, including a Hermes Birkin handbag for $28,796.00 and a Porsche Panamera for $52,890.00.
Also according to court records, on or about June 9, 2023, THOMPSON knowingly and intentionally possessed with intent to distribute 500 grams or more of cocaine. Additionally, on that same day, THOMPSON knowingly possessed a Springfield Armory HS Produkt Model Hellcat, nine-millimeter pistol, in furtherance of the possession with intent to distribute cocaine offense.
If convicted of the wire fraud counts, THOMAS and THOMPSON each face a maximum term of imprisonment of thirty years, a fine of up to $250,000.00, and up to three years of supervised release following any term of imprisonment. For the aggravated identity theft counts, THOMAS and THOMPSON each face a mandatory term of imprisonment of two years to run consecutive to any other sentence imposed, a fine of up to $250,000.00, and up to one year of supervised release following any term of imprisonment. For the money laundering count, THOMAS and THOMPSON each face a maximum term of imprisonment of ten years, a fine of up to $250,000.00, and up to three years of supervised release following any term of imprisonment. For the possession with intent to distribute cocaine count, THOMAS faces a mandatory minimum term of imprisonment of five years, a maximum term of imprisonment of forty years, a fine of up to $5,000,000.00, and at least four years of supervised release following any term of imprisonment. For the firearm count, THOMPSON faces a mandatory minimum term of imprisonment of five years and a maximum of life imprisonment, to run consecutive to any other sentence imposed, a fine of up to $250,000.00, and up to five years of supervised release following any term of imprisonment. U.S. Attorney Evans reiterated that the superseding indictment is merely a charging document and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by the Federal Bureau of Investigation, the Drug Enforcement Administration and the Jefferson Parish Sheriff’s Office. The prosecution is being handled by Assistant United States Attorney André Jones of the Narcotics Unit.
New Orleans Man Plead Guilty for Violation of the Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – DRESHAWN FIELDS, age 28, a resident of New Orleans, pled guilty on Wednesday, December 4, 2024 to a one-count indictment for possessing with the intent to distribute fentanyl, announced U.S. Attorney Duane A. Evans.
FIELDS faces a maximum term of imprisonment of twenty (20) years, a fine of up to $1,000,000, at least three (3) years of supervised release following any term of imprisonment, and a $100 mandatory special assessment fee.
According to court records, in 2023, the Federal Bureau of Investigation (“FBI”) began to monitor FIELDS’s Instagram account. On October 4, 2023, FIELDS posted a video of four boxes of Tapentadol with the caption “Rush hour (train emoji).” Train emojis are often used to advertise Tapentadol for sale. Tapentadol is a Schedule II narcotic. On January 9, 2024, a New Orleans Police Department (“NOPD”) officer observed a white Dodge Charger located at 10833 Chef Menteur Highway, New Orleans, Louisiana. Law enforcement verified the identification of the vehicle via the vehicle identification number (“VIN”) and discovered that it was stolen from Kenner, Louisiana on December 8, 2023. The female stated that FIELDS was the driver of the vehicle. The investigating officer authored a search warrant for the vehicle FIELDS fled from, which was signed by an Orleans Parish magistrate commissioner. The investigating officer confiscated multiple items pursuant the execution of the search warrant.
On March 11, 2024, a federal criminal complaint was signed charging FIELDS with possession with the intent to distribute narcotics. Subsequently, law enforcement arrested FIELDS near Orleans Parish Criminal District Court as he exited a vehicle. A search warrant for the vehicle was submitted and approved. Pursuant to the search warrant, law enforcement recovered methamphetamine, a magazine with live rounds, a scale, baggies, and five individual pills that later tested positive for fentanyl.
The case was investigated by New Orleans Police Department and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Mike Trummel of the Violent Crimes Unit.
Multi-Kilo Armed Franklin County Drug Trafficker Sentenced to Eight YearsRead the Press Release
RALEIGH, N.C. – Talvin Lamar Brandon, 29, was sentenced to 96 months in prison for armed drug trafficking after hitting an officer’s patrol car as he was fleeing from a traffic stop. On September 3, 2024, Brandon pled guilty to conspiracy to distribute and possess with intent to distribute 500 grams or more of cocaine, and possession with the intent to distribute 500 grams or more of cocaine.
According to court documents and other information presented in court, Brandon was identified as a kilogram level source of cocaine supply in the Franklin County area. In July 2024, law enforcement attempted a traffic stop of Brandon’s vehicle after a suspected drug transaction. However, as the officer exited the vehicle to conduct the stop, Brandon fled, hitting the officer’s patrol car as he sped away. Officers pursued Brandon, who eventually lost control of the vehicle and ran off the road. Brandon then exited the vehicle and attempted to flee on foot. While fleeing, Brandon dropped two kilograms of cocaine. From his vehicle, law enforcement seized a firearm and a loaded magazine.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launders, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks.
Michael F. Easley, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Terrence W. Boyle. The Drug Enforcement Administration and the Franklin County Sheriff’s Department investigated the case and Assistant U.S. Attorney Casey L. Peaden prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:23-CR-247.
Marrero Man Sentenced for Machine Gun PossessionRead the Press Release
NEW ORLEANS, LA – United States Attorney Duane A. Evans announced that JOSEPH P. SCHWARTZ, IV (“SCHWARTZ”), age 21, of Marrero, La., was sentenced on December 17, 2024, by U.S. District Judge Darrel James Papillion after previously pleading guilty to possessing a machine gun, in violation of Title 18, United States Code, Sections 922(o) and 924(a)(2). SCHWARTZ was sentenced to 24 months imprisonment, three (3) years of supervised release, and ordered to pay a $100 mandatory special assessment fee.
According to court documents, on February 25, 2022, while patrolling Bourbon Street during Mardi Gras, Louisiana State Police (LSP) troopers observed two males engaged in an altercation. One male, later determined to be SCHWARTZ, possessed a concealed firearm. As Troopers attempted to stop him, SCHWARTZ resisted and fled through the Mardi Gras crowds with the gun in his hand. Ignoring repeated law enforcement commands to stop, he discarded the weapon in a trash can. SCHWARTZ was apprehended thereafter, and the firearm recovered. It was later determined that the recovered firearm, a Glock Model 23, .40 caliber pistol, with a Glock auto-sear, had been modified to enable automatic fire.
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.
U.S. Attorney Evans praised the work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Louisiana State Police in investigating this matter. The case was prosecuted by Special Assistant U.S. Attorney James N. Ollinger of the Violent Crime Unit.
Man Guilty of Conspiring to Steal Mail, Possession of a Postal Service Mail Key and Possession of Stolen MailRead the Press Release
NEW ORLEANS, LOUISIANA -- U.S. Attorney Duane A. Evans announced today that CHAD WOODS (“WOODS”), age 29, of New Orleans, pled guilty on Thursday, December 19, 2024, to Conspiracy to Steal United States Mail in violation of Title 18, United States Code, Section 371 Possession of a United States Postal Service (USPS ) “arrow” key in violation of Title 18, United States Code, Section 1704, and Possession of Stolen Mail that had been deposited into authorized mail receptacles, in violation of Title 18, United States Code, Section 1708. United States District Court Judge Eldon E. Fallon set sentencing for March 27, 2025.
According to the indictment, on June 23, 2022, WOODS and another man stole mail from one location and attempted to steal mail from another location in Kenner, Louisiana. The co-conspirator acted as the driver and WOODS used the USPS key to steal mail from the first location . After a police chase, the pair were found in possession of 36 stolen checks, including one forged counterfeit check, six opened pieces of mail, and the USPS “arrow key” used to open the USPS mailboxes to steal mail.
WOODS faces a maximum penalty of up to five (5) years imprisonment on the Conspiracy to Steal United States Mail and the Possession of Stolen Mail counts, and up to ten (10) years imprisonment on the count of Possession of the United States Postal Service mail key, each of these counts to be followed by up to three (3) years of supervised release, a fine of up to $250,000, and a mandatory $100 special assessment fee.
U.S. Attorney Evans praised the work of the United States Postal Inspection Service, the Jefferson Parish Sheriff’s Office and the Kenner Police Department in investigating this matter. Assistant U.S. Attorney Jon Maestri of the General Crimes Unit is charge of the prosecution.
MMM Holdings, LLC Agrees to Pay 15.2 Million Dollars to Resolve Allegations that it Violated the False Claims Act and Anti-Kickback StatuteRead the Press Release
SAN JUAN, Puerto Rico – The United States Attorney for the District of Puerto Rico and the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) announce that MMM Holdings, LLC. (MMM) has agreed to pay $15,228,340 to resolve False Claims Act allegations that it implemented a gift card incentive program in violation of the Anti-Kickback Statute.
According to the settlement agreement, the United States asserted that MMM submitted or caused to be submitted claims for payment to the Medicare Program relating to a gift card incentive scheme implemented by MMM during the period of January 2018 to December 2022, which the United States alleged violated the Anti-Kickback Statute, and which resulted in violations of the False Claims Act. As a result of the incentive scheme, the United States alleged that MMM distributed gift cards to administrative assistants of providers to induce the referral, recommendation, or arrangement for enrollment of thousands of Medicare beneficiaries in an MMM Medicare Advantage plan. Those newly enrolled Medicare beneficiaries resulted in associated premium payments of $6,091,336. The negotiated settlement with MMM took into consideration the company’s cooperative efforts and implementation of internal controls.
In connection with the settlement, MMM entered into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires, among other conditions, that MMM create procedures designed to ensure that any new or existing marketing arrangements do not violate the Anti-Kickback statute. MMM must also engage an Independent Review Organization to review the systems that MMM has in place to track such arrangements and to review a sample of the arrangements each year of the CIA.
This agreement underscores the commitment of the Justice Department and HHS-OIG to deter fraud, waste, and abuse in federal benefit programs. “Investigating healthcare fraud remains a high priority in the Department of Justice and the United States Attorney’s Office will aggressively pursue those that violate the healthcare laws of the United States”, said United States Attorney W. Stephen Muldrow. “In this case, we appreciate MMM’s cooperation during the investigation and willingness to promptly negotiate a resolution in this matter.”
Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the Department of Health and Human Services, Office of Inspector General, said “Medicare Advantage plans that engage in improper financial arrangements undermine the integrity of the Medicare program and place profits ahead of enrollees’ best interests. HHS-OIG will continue to coordinate with our law enforcement partners to identify and investigate such allegations in order to protect federal health care programs and the Americans who rely on them.”
This matter was prosecuted by Assistant U.S. Attorney Rafael J. López-Rivera, Civil Health Care Fraud Coordinator, at the U.S. Attorney’s Office, in coordination with the U.S. Department of Health and Human Services, Office of Inspector General and the collaboration of the Federal Bureau of Investigation.
The United States Attorney’s Office encourages anyone with information involving waste, fraud, and abuse in federal healthcare or other programs, to please report the illegal conduct, by contacting:
HHS-OIG Hotline: 1-800-HHS-TIPS (1-800-447-8477) or https://tips.oig.hhs.gov
To file a voluntary self-disclosure, please access the link below:
https://oig.hhs.gov/compliance/self-disclosure-info/self-disclosure-protocol/
You may also contact the FBI at (202) 324-3000, or online at www.fbi.gov or tips.fbi.gov.
The settled civil claims are allegations only and MMM did not admit liability as part of this settlement agreement. Further, there has been no determination of civil liability.
Lunenburg Man Arrested and Charged with Possession of Child Sexual Abuse MaterialRead the Press Release
BOSTON – A Lunenburg, Mass man has been arrested and charged in connection with possession of child sexual abuse material (CSAM).
Michael Myers, 37, has been charged with possession of child sexual abuse material. Myers was arrested on Dec. 17, 2024 and is in state custody on related offenses. Myers made his initial appearance before U.S. Magistrate Judge David H. Hennessy this morning and consented to detention pending trial.
According to the charging document, law enforcement obtained a search warrant for Myer’s residence and found his cell phone to contain several videos and images of CSAM. In 2015, Myers was convicted of possession of child pornography and sentenced to serve two years of probation by state authorities. He is a Level One Sex Offender.
The charge of possession of child sexual abuse material with a prior conviction provides for a mandatory minimum sentence of 10 years, up to 20 years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
United States Attorney Joshua S. Levy; Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England; and Lunenburg Police Interim Police Chief Jeffrey M. Thibodeau made the announcement today. Assistant U.S. Attorney Daniel Bennett of the Worcester Branch Office is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by 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.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Laredo man indicted for smuggling over 100 people in locked trailerRead the Press Release
LAREDO, Texas – A federal grand jury has returned an indictment for transporting and/or smuggling of a large group of undocumented aliens via tractor trailer, announced U.S. Attorney Alamdar S. Hamdani.
Juan Manuel Aguirre, 49, is charged in a three-count indictment with conspiracy to transport an undocumented alien within the United States and the transportation of an undocumented alien within the United States for financial gain. He is expected to appear for his arraignment before a U.S. magistrate judge in the near future.
According to the criminal complaint originally filed in the case, On Dec. 2, law enforcement observed individuals being loading into a white trailer in a warehouse parking lot.
After the white truck that was hauling it departed the location, authorities conducted a traffic stop, according to the charges. A search allegedly resulted in the discovery of 101 non-U.S. citizens locked inside the trailer, including 12 unaccompanied children. The charges further allege two reported they had difficulty breathing and feared for their life due to the conditions in the trailer.
If convicted, Aguirre faces up to 10 years in prison for each of the three counts and fines of up to $250,000.
Homeland Security Investigations, FBI, Texas Department of Public Safety and Border Patrol conducted the Organized Crime Drug Enforcement Task Forces (OCDETF) operation with the assistance of Customs and Border Protection, Drug Enforcement Administration and the Webb County Sheriff’s Office. 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 on the Department of Justice’s OCDETF webpage.
Assistant U.S. Attorney Brandon Scott Bowling is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Josephine County Man Sentenced to Federal Prison for Illegally Manufacturing Marijuana and Falsifying Tax ReturnsRead the Press Release
MEDFORD, Ore.—A Josephine County, Oregon man was sentenced to federal prison Wednesday for illegally manufacturing marijuana and filing false tax returns with the IRS.
Steven Shirley, 52, was sentenced to 24 months in federal prison and five years’ supervised release. He was also ordered to pay $290,291 in restitution to the IRS and $12,896 in restitution to the Bureau of Land Management (BLM) for damage the marijuana grows caused to the environment on BLM land.
According to court documents, beginning in 2012, Shirley began purchasing properties in Cave Junction, Oregon as president and minister of Earth Peoples Park (EPP), an Oregon nonprofit religious organization. After purchasing a property, Shirley leased the land to third parties and used profits from the lease to purchase additional properties. By 2019, Shirley, through EPP, owned or co-owned 21 properties in Josephine County, Oregon, and received at least $400,000 per year through property leases.
“We thank the dedicated law enforcement officers for their commitment to disrupt the defendant’s scheme that damaged public lands and circumvented his tax responsibilities,” said Natalie Wight, U.S. Attorney for the District of Oregon.
“Mr. Shirley tried to profit from the abuse of nonprofit exemptions and illegal drug operations,” said Adam Jobes, Special Agent in Charge of IRS Criminal Investigation’s Seattle Field Office. “Wednesday’s ruling acknowledges that he’s no spiritual leader.”
In September 2019, investigators from the Josephine Marijuana Enforcement Team (JMET ) identified sixteen of the properties had large scale, unlicensed marijuana grows. On October 1, 2019, law enforcement executed search warrants and seized more than 15,000 marijuana plants and nine firearms and determined that a portion of BLM lands were used for these grows. Investigators learned Shirley not only employed and directed staff to illegally grow and harvest marijuana, but he also sold and delivered the marijuana. On June 14, 2021, BLM agents with the assistance of JMET executed search warrants on eleven EPP properties and discovered Shirley continued to illegally manufacture and sell marijuana on lands owned by EPP and the BLM. Agents also seized additional firearms.
As part of the investigation, IRS agents reviewed EPP’s religious organization tax exempt status and Shirley’s personal tax records from 2015 to 2018. They determined EPP did not qualify as a religious organization and that Shirley used EPP as a for-profit land management company, which is a non-exempt purpose under IRS code. In addition, agents learned Shirley intentionally underreported lease income by more than $1 million, resulting in more than $290,000 in unpaid taxes.
On August 2, 2023, Shirley was charged by criminal information with illegally manufacturing marijuana and filing a false tax return. He pleaded guilty on March 12, 2024.
This case was investigated by the BLM, IRS Criminal Investigation, and JMET, with assistance from the IRS Tax-Exempt and Government Entities Division, Oregon State Police, Southern Oregon High-Tech Crimes Task Force, and Oregon Department of Environmental Quality. It was prosecuted by Judith R. Harper, Assistant U.S. Attorney for the District of Oregon.
Jefferson Parish Man Sentenced to 25 Years Imprisonment for Producing Child Sexual Abuse VideosRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced today that JAYDEN D. D. HALL (“HALL”), age 23, of Harvey, Louisiana, was sentenced for federal crimes involving child sexual abuse.
HALL previously pled guilty to one count of Production of Materials Involving the Sexual Exploitation of Children, in violation of Title 18, United States Code, Sections 2251(a) and (e); and three counts of Transportation of Materials Involving the Sexual Exploitation of Children, in violation of Title 18, United States Code, Sections 2252(a)(1) and (b)(1). According to court documents, HALL created child sexual abuse videos and used social media accounts to distribute those videos, and other child sexual abuse material, through the internet.
United States District Judge Jay C. Zainey sentenced HALL to twenty-five years in prison for the production count. For each transportation count, HALL was sentenced to twenty years in prison, concurrent with the production count. HALL was also sentenced to five years of supervised release after his release from prison, and payment of a $100 mandatory special assessment fee for each count.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office would also like to acknowledge the assistance of the following agencies in this matter: the U.S. Department of Homeland Security, Homeland Security Investigations; the Louisiana Bureau of Investigation; the Jefferson Parish Sheriff’s Office, Strategic Engagement Team; and the New Orleans Police Department. The prosecution of this case was handled by Assistant U.S. Attorney Nicholas D. Moses, Health Care Fraud Coordinator.
Jamestown Pharmacist Arrested and Charged with Health Care Fraud and Aggravated Identity Theft in a Multi-Million Dollar Health Care Fraud SchemeRead the Press Release
NASHVILLE – A federal indictment returned last week and unsealed on Friday charges Jamestown pharmacist Philip Hall, 48, with 9 counts of Health Care Fraud and 6 counts of Aggravated Identity Theft, announced Acting United States Attorney for the Middle District of Tennessee Thomas J. Jaworski.
According to the indictment, Hall was a licensed pharmacist in Tennessee and was the owner, operator, and registered agent of Hall Family Pharmacy, Inc. (“HFP”), a pharmacy with locations in Jamestown and Clarkrange, Tennessee.
Hall was the pharmacist-in-charge of HFP Jamestown and one of the pharmacists at HFP Clarkrange. From 2018 until at least May 2024, Hall submitted false claims to Medicare, Medicaid, TRICARE, and Blue Cross Blue Shield, for prescriptions for drugs that were medically unnecessary, not actually dispensed, or were not ordered by a physician or other healthcare provider. In many cases, the pharmacies lacked the inventory to even dispense these drugs. In total, Hall submitted false claims to Medicare, Medicaid, and TRICARE totaling more than $6 million. On many occasions, Hall also used the identification of other people without their authorization to obtain reimbursement for claims submitted to a health care benefit program. Hall personally profited from his participation in the scheme by receiving fraud proceeds for his personal use.
“We will always seek to protect taxpayer dollars from those who would take them fraudulently and illegally,” said Acting United States Attorney Thomas J. Jaworski. “Seniors in our community need to know that Medicare will be protected from fraud and abuse.”
If convicted, Hall faces up to ten years in federal prison for each health care fraud count, and two years consecutive in federal prison for the aggravated identity theft counts. The United States also is seeking a money judgment in the amount of $6,524,585.44, which represents the proceeds of Hall’s fraud scheme.
This case is being investigated by the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), the Tennessee Bureau of Investigation, and the Department of Defense, Office of Inspector General. Assistant U.S. Attorney Chris Suedekum is prosecuting the case.
If you believe that you or someone you know may have any information about the conduct alleged in the indictment, please contact the HHS-OIG Hotline at 1-800-HHS-TIPS (1-800-447-8477) or call the HHS-OIG Hall tip line at (888) 720-4377.
An indictment is merely an allegation. The defendant is presumed innocent until proven guilty in a court of law.
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JBER Airman charged with distributing, possessing child pornographyRead the Press Release
ANCHORAGE, Alaska – A U.S. Air Force Airman stationed at Joint Base Elmendorf-Richardson (JBER) was arrested last Thursday after a federal grand jury in Alaska returned an indictment charging him with distributing and possessing child sexual abuse materials (CSAM).
According to court documents, in August 2024, Caleb French, 27, was reported to the U.S. Air Force Office of Special Investigations (AFOSI) by an individual who claimed French wanted to commit sexual assaults against minors. AFOSI executed a search warrant on French’s residence and recovered multiple digital devices allegedly containing over a thousand images and videos depicting child sexual abuse. Law enforcement discovered that French also allegedly sent the reporting individual a link to a video depicting CSAM that same month.
Court documents further allege that French surreptitiously took photos and videos of children in public throughout the community. It’s alleged that French intended to use the visuals to produce artificial intelligence generated CSAM.
French is charged with one count of distribution of child pornography and one count of possession of child pornography. The defendant made his initial court appearance today before U.S. Magistrate Judge Matthew M. Scoble of the U.S. District Court for the District of Alaska. If convicted, he faces up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney U.S. Attorney S. Lane Tucker for the District of Alaska and Special Agent in Charge Rebecca Day of the FBI Anchorage Field Office made the announcement.
The FBI Anchorage Field Office and Anchorage Police Department are investigating this case as part of the FBI’s Child Exploitation and Human Trafficking Task Force, with significant assistance from AFOSI.
Assistant U.S. Attorney Mac Caille Petursson is prosecuting the case.
If anyone has information concerning French’s alleged actions, please contact the FBI Anchorage Field Office at (907) 276-4441 or anonymously at tips.fbi.gov.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Inform Diagnostics Agrees to Pay $2.9 Million to Resolve Potential False Claims Act Liability for Self-Reported ViolationsRead the Press Release
BOSTON – Inform Diagnostics, Inc. (Inform) has agreed to pay $2.9 million to resolve potential False Claims Act liability arising out of conduct that potentially violated the Anti-Kickback Statute (AKS), resulting in the submission of false claims for payment to Medicare and other federal health care programs. Inform voluntarily self-disclosed the conduct to the U.S. Attorney’s Office earlier this year.
Inform is a clinical laboratory with headquarters in Irving, Texas that provides anatomic pathology services to physician practices throughout the United States.
According to the settlement, Inform admitted that, from 2018 through 2023, Inform had purchased test arrangements (PTAs) with a small number of its physician practice customers. Reimbursement for anatomic pathology laboratory services involves two components: a “technical” component, involving the physical preparation of the specimen for pathologist review, and a “professional” component, involving analysis of the slide by the pathologist. Under Inform’s PTAs, the customer performed one component while referring the other component to Inform to perform and Inform billed commercial insurers for both components, reimbursing the customer at a set price. Customers with PTAs also referred other services to Inform, including services that Inform billed to Medicare and federal health care programs. The United States contends that Inform’s PTAs resulted in the submission of false claims for payment to federal health care programs because those claims were tainted by violations of the AKS.
The settlement credits Inform for its self-disclosure. Inform self-reported the conduct, which was unknown to the United States at the time of the disclosure in March 2024, including the results of an internal investigation, the nature of the potentially problematic relationships, and the potential financial impact to the government. Inform has terminated all of its PTAs.
“By self-disclosing this conduct to the federal government, Inform saved itself hundreds of thousands of dollars. That benefit is available to any company that takes the responsible step of reporting false claims to the government. This office is committed to making sure that companies that come forward with information regarding potential violations of the law before the government learns of them get real benefits from such a decision,” said United States Attorney Joshua S. Levy. “While we do not condone unlawful conduct, we commend companies that save time and resources on both sides by disclosing what they know and allowing the government to determine whether to proceed. That is what Inform did here, and today’s resolution both recognizes Inform’s laudable decision to self-disclose and should serve as an incentive for other companies to do the same. Self-disclosures will be resolved fairly and expeditiously.”
United States Attorney Levy; Roberto Coviello, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); and Patrick Hegarty, Special Agent in Charge, Defense Criminal Investigation Service, Northeast Field Office made the announcement. Assistant U.S. Attorneys Abraham R. George, Chief of the Civil Division and Alexandra Brazier of the Affirmative Civil Enforcement Unit handled the matter.
IRS Obtains Court Order Authorizing “John Doe” Summonses for Records Relating to U.S. Taxpayers Who May Have Used Network of Offshore Service Providers to Hide Assets and Evade TaxesRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; David A. Hubbert, the Deputy Assistant Attorney General for the Justice Department’s Tax Division; and Danny Werfel, Commissioner of the Internal Revenue Service (“IRS”), announced that U.S. District Judge John P. Cronan entered an order today authorizing the IRS to issue summonses requiring certain entities to produce information about U.S. taxpayers, including individuals and trusts, who may have used the services of a multinational group of affiliated companies that operate under the trade name “Trident Trust” (collectively, the “Trident Trust Group”) to evade federal income taxes. Specifically, the IRS summonses seek records from a Trident Trust Group affiliate, as well as from companies that may have facilitated electronic fund transfers and courier deliveries to Trident Trust Group entities, to identify U.S. taxpayers who may have used the Trident Trust Group’s services to create or control foreign assets and entities to potentially avoid compliance with their U.S. tax obligations.
Acting U.S. Attorney Edward Y. Kim said: “Today’s action is part of this Office’s steadfast commitment to hold accountable those who use offshore service providers to avoid paying their U.S. taxes. In obtaining authority to issue these latest John Doe summonses, we continue our joint efforts with the IRS to investigate tax evaders who use foreign financial accounts and sham foreign entities to hide their assets and income.”
Tax Division Deputy Assistant Attorney General David A. Hubbert said: “The Department of Justice and the IRS are committed to using the tools available to us, including John Doe summonses like the ones authorized today, to ensure that taxpayers fully meet their responsibilities, including reporting their worldwide income and use of foreign accounts.”
IRS Commissioner Danny Werfel said: “U.S. taxpayers and their facilitators who hide offshore income generating activities and assets from the U.S. government are on notice that the IRS continues to prioritize combatting offshore abusive activities. These records will assist the IRS and its partners in finding those taxpayers, ensuring their compliance with the U.S. tax laws and delivering on our mission of a fair tax system.”
Federal tax law requires U.S. citizens, resident aliens, and trusts with gross annual income above the reporting threshold to pay taxes on all their income earned worldwide. They must also disclose their interests in certain foreign financial accounts, assets, and entities. Failure to report these offshore arrangements or pay associated taxes can result in serious civil and criminal consequences. According to the allegations set forth in the documents filed in support of the petition to authorize the John Doe summonses, and other information in the public record:
The Trident Trust Group is a privately owned network of entities operating in nearly 30 jurisdictions worldwide, including known tax havens. The Trident Trust Group has provided corporate, trust, and fund administration services for over 40 years. It offers, among other things, services that enable customers to conceal their interests in offshore accounts and entities, including creating opaque corporate structures in jurisdictions with strict privacy laws, providing corporate directors and officers who act on their customers’ behalf, mail forwarding and retention services, and inactive companies known as “shelf companies” that are dormant and sitting “on a shelf” for purpose of later sale, that are incorporated with a standard memoranda or articles of association and have inactive shareholders, directors, and secretaries. The Trident Trust Group advertises these services as assisting its clients in keeping confidential their beneficial ownership of assets and avoiding public reporting, including for “tax and estate planning.”
Some U.S. clients of the Trident Trust Group use or may use these services to conceal their interests in assets and avoid paying U.S. taxes on them. For example, Trident Trust Group employees have listed themselves as the founders, directors, and officers of thousands of Panamanian companies to help their U.S. taxpayer clients potentially conceal their interests in and income from these foreign entities. Indeed, at least nine U.S. taxpayers who used the Trident Trust Group’s services to conceal their interests in foreign assets have reported their tax non-compliance to the IRS through the agency’s Offshore Voluntary Disclosure Program—which allowed U.S. taxpayers to voluntarily disclose their foreign accounts or entities used to evade tax liability in exchange for fixed penalties.
In this action, the Court granted the IRS permission to serve what is known as a “John Doe” summons on Nevis Services Limited, a Trident Trust Group affiliate based in Manhattan, that seeks information about U.S. taxpayers who may have used its services or those of other entities within the Trident Trust Group to establish, maintain, operate, or control: any foreign financial account or other foreign asset; any foreign corporation, company, trust, foundation, or other legal entity; or any foreign or domestic financial account or other asset in the name of such foreign entity, from 2014 through 2023. By obtaining these records, the IRS expects to be able to identify Trident Trust Group clients who used the Group’s services to avoid or evade U.S. taxes.
In addition, the Court also granted the IRS leave to serve summonses on twelve financial entities and courier services: the Federal Reserve Bank of New York; Clearing House Payments Company LLC; HSBC Bank USA, N.A.; the Bank of New York Mellon Corporation; Citibank, N.A.; UBS AG; Bank of America, N.A.; Deutsche Bank Trust Company Americas; FedEx Corporation; DHL Express (USA), Inc.; and United Parcel Service, Inc. There is no allegation in this action that these financial entities and courier services have engaged in any wrongdoing. Rather, the IRS uses John Doe summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown. The John Doe summonses direct these financial entities and courier services to produce records that will enable the IRS to identify U.S. taxpayers who have sent or received money or documents to or from the Trident Trust Group, along with other records relating to these transactions.
In parallel, the U.S. has sought John Doe summonses in the U.S. District Courts for the Northern District of Georgia and the District of South Dakota authorizing the IRS to issue summonses to four other U.S.-based entities in the Trident Trust Group seeking information about U.S. taxpayers who may have used the Group’s services.
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This case is being handled by the Office’s Tax and Bankruptcy Unit. Assistant U.S. Attorney Anthony J. Sun is in charge of the case.