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23 December 2024
Hammond Man Sentenced for Violating Federal Gun Control and Federal Controlled Substances ActsRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that on December 19, 2024, Chief U.S. District Judge Nannette Jolivette Brown sentenced TYSHON COLEMAN (“COLEMAN”), age 28, a resident of Hammond, La., to a term of imprisonment for 106 months. COLEMAN previously pled guilty to Counts Three and Five of an indictment, charging him with violations of the Federal Controlled Substances and Federal Gun Control Acts. In Count Three, COLEMAN is charged with possession of a firearm, in furtherance of a drug trafficking crime, in violation of 18 U.S.C. Section 924(c)(1)(A)(i). In Count Five, COLEMAN is charged with possession of machine guns, in violation of 18 U.S.C. Sections 922(o)(1) and 924(a)(2). For Count Three, COLEMAN was sentenced to imprisonment for 60 months. For Count Five, COLEMAN was sentenced to imprisonment for 46 months. The sentences in Counts Three and Five were ordered to run consecutively.
Following imprisonment, COLEMAN also faces 3 years of supervised release and payment of a $200 mandatory special assessment fee.
According to court records, on May 18, 2022, the Ponchatoula Police Department went the Walmart Supercenter after receiving a complaint that a male, later identified as COLEMAN, was in possession of a firearm. Once at the parking lot, officers saw COLEMAN and another male seated inside of a vehicle. When officers ordered COLEMAN to show his hands, he refused to comply. After removing COLEMAN from the vehicle, officers observed a Glock Model 17, nine-millimeter handgun with a Glock machine gun conversion device and extended magazine, loaded with 30 rounds of ammunition, tucked between the passenger seat and the center console.
The officers also saw a red backpack in the front passenger seat area where COLEMAN was seated, and a green backpack on the adjoining floorboard. Upon opening the red bag, the officers found another Glock Model 17, nine-millimeter pistol, with a machine gun conversion device, as well as marijuana, fentanyl, heroin, methamphetamine, and a digital scale.
On the driver’s side floorboard, officers located a drum Model F5MFG, nine-millimeter caliber magazine, and a green backpack containing cocaine hydrochloride and marijuana.
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 the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Ponchatoula Police Department. It is being prosecuted by Assistant United States Attorney Brittany Reed of the Public Integrity Unit.
Hammond Man Guilty of Receipt of Materials Involving Sexual Exploitation of MinorsRead the Press Release
NEW ORLEANS, LA – U.S. Attorney Duane A. Evans announced that JOSEPH AUTHEMENT (“AUTHEMENT”), age 25, of Hammond, LA, pled guilty on December 18, 2025, to Receipt of Materials Involving the Sexual Exploitation of Minors, in violation of Title 18, United States Code, Sections 2252(a)(2) and (b)(1). AUTHEMENT faces a mandatory minimum sentence of five (5) years and up to twenty (20) years imprisonment, and/or up to a fine of $250,000.00, or the greater of twice the gross gain to the defendant or twice the gross loss to any person of the offense. In addition, AUTHEMENT faces a minimum of five (5) years of supervised release and up to life, after his release from prison. He also faces payment of a $100 mandatory special assessment fee.
According to court documents, on March 11, 2024, Homeland Security Investigations (“HSI”) obtained a federal search warrant to seize AUTHEMENT’s Apple iPhone. On March 12, 2024, HSI special agents (“SA”) located AUTHEMENT at his residence in Hammond, LA. The agents seized AUTHEMENT’s iPhone and located images and videos depicting the sexual exploitation of minors on that phone. SAs later determined AUTHEMENT used Telegram to download and purchase child sex abuse materials.
Sentencing in this matter is scheduled for March 19, 2025, before United States District Judge Jane Triche Milazzo.
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 like to acknowledge the assistance of the U.S. Department of Homeland Security, Homeland Security Investigations, and the Rio Grande Valley Child Exploitation Investigations Task Force. The prosecution of this case is being handled by Assistant U.S. Attorney Brian M. Klebba, Chief of the Financial Crimes Unit.
Gibson County Man Sentenced to Six Years in Federal PrisonRead the Press Release
Jackson, TN – A federal judge has sentenced Brantley Miller, 39, of Humboldt, TN, to six years in federal prison for his role in an organized drug trafficking scheme in West Tennessee. Acting U.S. Attorney Reagan Fondren for the Western District of Tennessee announced the sentence today.
According to evidence presented in court, in 2019, the Federal Bureau of Investigation, along with the West Tennessee Violent Crime and Drug Task Force; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Drug Enforcement Administration, began an investigation into the illegal distribution of narcotics in the Western District of Tennessee. By using controlled purchases of narcotics, search warrants to review the contents of suspicious packages, and other investigative tactics, the agents determined that Kendall Young, Cortez Jackson, and others were shipping methamphetamine, fentanyl, and marijuana from California to Tennessee for redistribution.
Throughout the investigation’s course, law enforcement agents seized over 32 pounds of methamphetamine and over 101 grams of fentanyl in the Western District of Tennessee. Further, agents seized three firearms from the individuals involved in this conspiracy.
On September 24, 2024, Miller pled guilty to conspiracy to possess with intent to distribute methamphetamine. On December 20, 2024, United States District Court Judge S. Thomas Anderson sentenced Miller to 72 months in federal prison and ordered Miller to serve 3 years of supervised release upon completion of the prison term. There is no parole in the federal system.
Miller was the final co-defendant to be sentenced in this drug trafficking conspiracy. Additionally, each of the following co-conspirators pled guilty and were sentenced by Judge Anderson as follows:
- Kendall Young, 32, Humboldt, TN: 188 months in prison and 3 years of supervised release for being a felon in possession of a firearm.
- Cortez Jackson, 29, Humboldt, TN: 134 months in prison and 5 years of supervised release for conspiracy to possess with intent to distribute methamphetamine.
- Vanessa Umanzor, 28, Huntingdon, TN: 43 months in prison and 3 years of supervised release for conspiracy to possess with the intent to distribute methamphetamine.
- Tristen Teague, 28, Paris, TN: 100 months in prison and 3 years of supervised release for conspiracy to possess with the intent to distribute methamphetamine.
- Orlando Sangster, 35, Humboldt, TN: 24 months in prison and 2 years of supervised release for conspiracy to possess with intent to distribute methamphetamine.
- Jonathan Sandoval, 31, Chula Vista, CA: 120 months in prison and 5 years of supervised release for conspiracy to possess with intent to distribute methamphetamine.
- Dejahn Jarrett, 31, Spring Valley, CA: 72 months in prison and 3 years of supervised release for conspiracy to possess with intent to distribute methamphetamine.
- Ronnie Young, 69, Humboldt, TN: 120 months in prison and 5 years of supervised release for conspiracy to possess with intent to distribute methamphetamine.
- Jaycent Montrell Pankey, a/k/a Jaycent Montrell Cox, 28, Jackson, TN: 42 months in prison and one year of supervised release for use of a telephone device to aid the distribution of methamphetamine.
- Devon Avery Landers, 53, Jackson, TN: 36 months in prison and 3 years of supervised release for conspiracy to possess with the intent to distribute methamphetamine.
- Joel Lynn Arnold 45, Lexington, TN: 84 months in prison and 4 years of supervised release for conspiracy to possess with the intent to distribute methamphetamine.
This investigation was conducted as 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.
This case was investigated by the FBI Jackson RA; the West Tennessee Violent Crime and Drug Task Force; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Drug Enforcement Administration.
Acting U.S. Attorney Reagan Fondren thanked Assistant United States Attorneys Christie R. Hopper and Hillary Parham, who prosecuted this case, as well as the law enforcement partners who investigated the case.
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For more information, please contact the Media Relations Team at [email protected]. Follow the U.S. Attorney’s Office on Facebook or on X at @WDTNNews for office news and updates.
Four Indicted for Operating Unlicensed Money Transmitting Business, Conspiracy to Make False Statements to A BankRead the Press Release
SAN FRANCISCO - A federal grand jury in Oakland indicted four individuals on charges of operating an unlicensed money transmitting business, conspiracy to operate an unlicensed money transmitting business, and conspiracy to make false statements to a bank.
According to the indictment filed Nov. 7, 2024, and unsealed Dec. 16, 2024, Gaston Kolker, 49, of Connecticut, Michael Goldfine, 66, of New York, Astrid Jasnis, 52, of Argentina, and Joanna O’Donnell, 56, of Sherman Oaks, California, allegedly made false statements to FDIC-insured banks in order to initiate and maintain a business transmitting money on behalf of others, many of whom were foreign nationals in Argentina. The defendants allegedly opened and maintained numerous accounts under false pretenses, claiming the accounts were held in the names of companies engaged in the importing and exporting of goods, when the defendants were operating the accounts for an unlicensed money transmitting business that transferred funds on behalf of others. The defendants are also charged with operating, and conspiring to operate, a money transmitting business without a license.
Kolker was arrested in Connecticut on Dec. 13, 2024, made his initial appearance in Hartford that day, and was released on $250,000 bond. Goldfine self-surrendered on Dec. 13, 2024, made his initial appearance in New York City that day, and was released on $100,000 bond. Kolker and Goldfine are scheduled to appear in San Francisco on Jan. 21, 2025, for initial proceedings before Magistrate Judge Peter H. Kang. O’Donnell self-surrendered and made her initial appearance in San Francisco on Dec. 16, 2024. She is currently released on $100,000 bond following a hearing before Magistrate Judge Sallie Kim on Dec. 20, 2024. Jasnis remains at large.
United States Attorney Ismail J. Ramsey, Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG) Special Agent in Charge Ryan Korner, and San Francisco Division Inspector in Charge Stephen M. Sherwood of the U.S. Postal Inspection Service (USPIS) made the announcement.
An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, defendants each face a maximum sentence of five years in prison and a $250,000 fine for each violation of 18 U.S.C. §§ 371 & 1014, conspiracy to make false statements to a bank, 18 U.S.C. §§ 371 & 1960, conspiracy to operate an unlicensed money transmitting business, and 18 U.S.C. § 1960, operation of an unlicensed money transmitting business. Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorney Robert David Rees is prosecuting the case with the assistance of Kay Konopaske and Veronica Hernandez. The prosecution is the result of an investigation by the FBI, FDIC-OIG, and USPIS.
Former MPD Intelligence Supervisor Guilty of Obstructing Investigation and Making False StatementsRead the Press Release
WASHINGTON – Shane Brian Lamond, 49, the former supervisor of the Intelligence Branch of the Metropolitan Police Department’s Homeland Security Bureau, was found guilty today of obstructing an investigation into the Dec. 12, 2020, destruction of a Black Lives Matter (BLM) banner and for making false statements to federal law enforcement officials, including lying when he denied tipping off Henry “Enrique” Tarrio, the national chairman of the Proud Boys, to the fact that law enforcement had a warrant for Tarrio’s arrest.
The announcement was made by U.S. Attorney Matthew M. Graves for the District of Columbia and FBI Assistant Director in Charge David Sundberg of the Washington Field Office.
“As proven at trial, Lamond turned his job on its head—providing confidential information to a source, rather than getting information from him—lied about the conduct, and obstructed an investigation into the source,” said U.S. Attorney Graves. “The intelligence gathering role that Lamond was supposed to play is critical to keeping our community safe. His violation of the trust placed in him put our community more at risk and cannot be ignored.”
"As a sworn law enforcement officer, Lamond took an oath to faithfully execute the law. Instead, he broke the law by providing confidential information to a source, obstructing an investigation into that source, and lying to federal investigators," said the FBI’s Sundberg. "His conviction is a testament to the FBI’s work to bring public officials to justice for abusing their positions of power and trust."
Lamond, of Stafford, Virginia, was found guilty following a seven-day bench trial before U.S. District Court Judge Amy Berman Jackson of one count of obstruction of justice in violation of D.C. Code Section 22-722 and three counts of making false statements in violation of Title18 United States Code, Section 1001. Judge Berman Jackson set a sentencing date of April 3, 2025.
According to the evidence at trial, Lamond worked as the supervisor of the Intelligence Branch of MPD’s Homeland Security Bureau. Beginning in July 2019, Lamond and Tarrio were in regular contact regarding Proud Boys planned activities in the District of Columbia as part of Lamond’s job responsibilities, but after the 2020 election, Lamond began using Telegram to surreptitiously provide information to Tarrio about law enforcement activity relating to Proud Boys’ activities in Washington, D.C.
For example, on December 18, 2020, Lamond gave Tarrio confidential law enforcement information into the investigation of the December 12, 2020, burning of a banner that read “#BLACKLIVESMATTER,” even though Tarrio was the prime subject in that investigation. Tarrio then passed this information to other Proud Boys. And, on January 4, 2021, while Tarrio was on a flight from Miami, Florida to the DMV, Lamond texted Tarrio, in a message set to self destruct, that a warrant had been signed for his arrest. After arriving in Arlington, Virginia, Tarrio drove to the District and was arrested on the warrant. Tarrio subsequently pleaded guilty to one count of destruction of property in connection with the burning of the banner.
On June 2, 2021, during an interview with federal law enforcement, Lamond made at least three false and misleading statements regarding his communications and contacts that formed the basis for the false statements convictions. These false and misleading statements related to (1) whether Lamond had notified Tarrio about the status of the MPD investigation into the banner burning; (2) whether Lamond notified Tarrio about Tarrio’s pending arrest warrant; and (3) the nature and scope of Lamond’s discussion with Tarrio prior to and after January 6.
The D.C. Code obstruction of justice charge carries a statutory maximum of 30 years in prison. Each charge for making a false statement carries a statutory maximum of five years in prison. The maximum statutory sentence for federal offenses is prescribed by Congress and is provided here for informational purposes. The sentencing will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
This case was jointly investigated by the FBI’s Washington Field Office and the United States Attorney's Office Criminal Investigations Unit. The case is being prosecuted by Assistant United States Attorneys Rebecca Ross and Joshua Rothstein.
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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
A Federal Bureau of Prisons (FBOP) lieutenant was found guilty this past weekend of violating the civil rights of an inmate by showing deliberate indifference to the inmate’s serious medical needs. The lieutenant and a 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, of Chesterfield, Virginia, and Registered Nurse Tonya Farley, 53, of Chesterfield, were on duty and working in their official capacities at the Federal Correctional Institution at Petersburg, Virginia, 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 the victim’s life, and their failure to act caused his death,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold accountable those who work inside our prisons and jails, including our federal facilities, when they fail in their duty to provide basic care and humane treatment to the people held 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 defendants in this case failed to honor that trust, and the inmate died.”
“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 and Farley will be sentenced on a later date. 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.
Former Executive of New Jersey Pharmaceutical Company Charged with $38 Million Insider Trading SchemeRead the Press Release
NEWARK, N.J. – An indictment was unsealed today charging a former executive of a publicly traded company with securities fraud and insider trading, U.S. Attorney Philip R. Sellinger announced.
Dale Chappell, 54, a former United States citizen and current resident of Switzerland, was charged by indictment with five counts of securities fraud. Chappell was formerly the Chief Scientific Officer and member of the Board of Directors of Humanigen, Inc., a publicly traded clinical-stage biopharmaceutical company with offices in New Jersey and California. Chappell was arrested on December 20 in Switzerland based on the U.S. criminal charges. The United States will seek Chappell’s extradition to stand trial in the District of New Jersey.
According to court documents, between June and August of 2021, Chappell avoided more than $38 million in losses by selling millions of shares of Humanigen stock while in possession of material, nonpublic information about Humanigen’s application to the Food and Drug Administration (FDA) for approval a drug to treat COVID-19 called Lenzilumab. Chappell—who sold the Humanigen shares through funds that he controlled—is alleged to have engaged in an insider trading scheme in which he fraudulently used Rule 10b5-1 trading plans to trade Humanigen stock.
The indictment alleges that in March 2021, Humanigen announced that it planned to seek emergency-use authorization (EUA) for Lenzilumab. However, between April and May of 2021, FDA staff allegedly informed Humanigen that it was unlikely to meet the criteria for issuance of an EUA. As alleged, knowing that Humanigen had not disclosed this information publicly, Chappell sold the funds’ Humanigen stock, and later also implemented Rule 10b5-1 plans to trade more Humanigen stock holdings. After Humanigen publicly announced that the FDA had declined EUA approval for Lenzilumab, Humanigen’s stock price declined approximately 50%.
“Our office is committed to holding accountable those who profit based on insider information. Combatting securities fraud and protecting the integrity of the markets continues to be a priority for this office.”
U.S. Attorney Sellinger
Chappell is charged with one count of engaging in a securities fraud scheme and four counts of securities fraud for insider trading. If convicted, he faces a maximum penalty of 25 years in prison on the securities fraud charge and 20 years in prison on each of the insider-trading charges.
The case is part of a data-driven initiative led by the Criminal Division’s Fraud Section to identify executive abuses of 10b5-1 trading plans. Chappell’s alleged trading was identified by the Fraud Section through its data-analytics tools. A Rule 10b5-1 trading plan, which allows a corporate insider of a publicly traded company to set up a plan for selling company stock, can offer an executive a defense to insider-trading charges. However, the defense is unavailable if the executive is in possession of material nonpublic information at the time he or she enters into the 10b5-1 trading plan. Additionally, a plan does not protect an executive if the trading plan was not entered into in good faith or was entered into as part of an effort or scheme to evade the prohibitions of Rule 10b5‑1.
U.S. Attorney Sellinger credited special agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Nelson I. Delgado, with the investigation.
The government is represented by Assistant U.S. Attorney Katherine M. Romano of the Health Care Fraud Unit in Newark and Trial Attorneys Matthew Reilly and David Austin of the Criminal Division’s Fraud Section.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
chappell.indictmentunsealed.pdfFood City Agrees to Pay over $8M to Settle False Claims Act Allegations Related to Opioid DispensingRead the Press Release
K-VA-T Food Stores Inc. doing business as Food City (Food City), a regional grocery store chain headquartered in Abingdon, Virginia, has agreed to settle the government’s allegations under the False Claims Act (FCA) related to its dispensing of opioids and other controlled substances. Under the settlement, Food City will pay the United States $8,488,378. Food City will pay an additional $78,621 to the states of Virginia and Kentucky for claims paid to Food City by state Medicaid programs.
“Pharmacies that fill prescriptions for opioids and other controlled substances have an obligation to ensure that those prescriptions are medically necessary,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to holding accountable pharmacies that have abdicated this responsibility and thereby contributed to the nation’s opioids crisis.”
“When pharmacies fill prescriptions for opioids and other powerful controlled substances without regard to their legitimacy or medical necessity it significantly contributes to the opioid epidemic, causing great harm to our citizens and communities,” said U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “This settlement agreement demonstrates that the United States Attorney’s Office, and federal, state and local law enforcement partners, are using all tools available to address the opioid crisis.”
“The Medicare and Medicaid programs deliver vital prescription drug services to beneficiaries,” said Special Agent in Charge Kelly J. Blackmon of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “This case underscores HHS-OIG’s dedication to addressing the nation’s opioid overdose crisis and ensuring that only legitimate, medically necessary prescriptions are dispensed.”
“The opioid epidemic continues to significantly impact the nation, devastating families across our country,” said Special Agent in Charge Derek M. Holt of the Office of Personnel Management Office of the Inspector General. “We applaud our law enforcement partners and colleagues at the Justice Department for their work to hold pharmacies accountable for actions that could exacerbate the epidemic and endanger the health and safety of patients served by federal health care programs.”
“This settlement demonstrates our commitment to holding pharmacies that knowingly dispense medically unnecessary opioids and other controlled substances accountable for their actions,” said Special Agent in Charge Darrin K. Jones of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS thanks the U.S. Attorney’s Office and our investigative partners for their steadfast dedication to fighting the opioid epidemic plaguing our country and helping us protect servicemembers and their families.”
“TRICARE is committed to providing safe, effective, and appropriate care to our warfighters, retirees, veterans and their families,” said Chief Edward C. Norton Jr. of the Defense Health Agency’s Pharmacy Operations Division. “Dispensing medically unnecessary opioids and other controlled substances to our beneficiaries puts them at great risk and will not be tolerated. We will continue to hold pharmacies accountable for abiding by these standards to ensure we are delivering the very best health benefit to those who serve, or have served, our nation.”
The United States alleged that, from Jan. 1, 2011, through Dec. 31, 2018, 24 Food City store pharmacies dispensed opioids and other controlled substances that were medically unnecessary, lacked a legitimate medical purpose or medically accepted indication, and/or were not dispensed pursuant to valid prescriptions. The United States alleges that, as a result, Food City knowingly submitted, or caused to be submitted, false claims to federal healthcare programs.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by K-VA-T Litigation Partnership, LLP. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. K-VA-T Litigation Partnership, LLP v. K-VA-T Food Stores, Inc. d/b/a Food City, Case No. 3:20-cv-436 (EDTN). Relator K-VA-T Litigation Partnership, LLP will receive $1,527,908 of the proceeds from the settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for Eastern District of Tennessee, with assistance from HHS-OIG and DCIS.
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 Elizabeth J. Kappakas of the Civil Division’s Fraud Section and Assistant U.S. Attorneys Alan G. McGonigal and Alexa O. Hadley for the Eastern District of Tennessee handled the matter.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
Food City Agrees to Pay over $8 Million to Settle False Claims Act Allegations Related to Opioid DispensingRead the Press Release
KNOXVILLE, Tenn.– K-VA-T Food Stores, Inc. doing business as Food City (Food City), a regional grocery store chain headquartered in Abingdon, Virginia, has agreed to settle the government’s allegations under the False Claims Act (FCA) related to its dispensing of opioids and other controlled substances. Under the settlement, Food City will pay the United States $8,488,378. Food City will pay an additional $78,621 to the states of Virginia and Kentucky for claims paid to Food City by state Medicaid programs.
According to court filed documents, the United States alleged that, from Jan. 1, 2011, through Dec. 31, 2018, 24 Food City store pharmacies dispensed opioids and other controlled substances that were medically unnecessary, lacked a legitimate medical purpose or medically accepted indication, and/or were not dispensed pursuant to valid prescriptions. The United States alleges that, as a result, Food City knowingly submitted, or caused to be submitted, false claims to federal healthcare programs.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by K-VA-T Partnership, LLP. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. K-VA-T Litigation Partnership, LLP v. K-VA-T Food Stores, Inc. d/b/a Food City, Case No. 3:20-cv-436 (EDTN). Relator K-VA-T Litigation Partnership, LLP will receive $1,527,908 of the proceeds from the settlement.
“Pharmacies that fill prescriptions for opioids and other controlled substances have an obligation to ensure that those prescriptions are medically necessary,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to holding accountable pharmacies that have abdicated this responsibility and thereby contributed to the nation’s opioids crisis.”
“When pharmacies fill prescriptions for opioids and other powerful controlled substances without regard to their legitimacy or medical necessity it significantly contributes to the opioid epidemic, causing great harm to our citizens and communities,” said U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “This settlement agreement demonstrates that the United States Attorney’s Office and federal, state, and local law enforcement partners, are using all tools available to address the opioid crisis.”
“The Medicare and Medicaid programs deliver vital prescription drug services to beneficiaries,” said Special Agent in Charge Kelly J. Blackmon of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “This case underscores HHS-OIG’s dedication to addressing the nation’s opioid overdose crisis and ensuring that only legitimate, medically necessary prescriptions are dispensed.”
“The opioid epidemic continues to significantly impact the nation, devastating families across our country,” said Special Agent in Charge Derek M. Holt of the Office of Personnel Management Office of the Inspector General. “We applaud our law enforcement partners and colleagues at the Department of Justice for their work to hold pharmacies accountable for actions that could exacerbate the epidemic and endanger the health and safety of patients served by Federal health care programs.”
“Today’s settlement demonstrates our commitment to holding pharmacies that knowingly dispense medically unnecessary opioids and other controlled substances accountable for their actions,” stated Special Agent in Charge Darrin K. Jones of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS thanks the U.S. Attorney’s Office and our investigative partners for their steadfast dedication to fighting the opioid epidemic plaguing our country and helping us protect servicemembers and their families.”
“TRICARE is committed to providing safe, effective, and appropriate care to our warfighters, retirees, veterans, and their families. Dispensing medically unnecessary opioids and other controlled substances to our beneficiaries puts them at great risk and will not be tolerated,” said Chief Edward C. Norton Jr. of the Pharmacy Operations Division for the Defense Health Agency. “We will continue to hold pharmacies accountable for abiding by these standards to ensure we are delivering the very best health benefit to those who serve or have served our nation.”
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for Eastern District of Tennessee, with assistance from HHS-OIG and DCIS.
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).
The matter was handled by Assistant U.S. Attorneys Alan G. McGonigal, Alexa Ortiz Hadley, and Jeremy S. Dykes for the Eastern District of Tennessee, and Civil Division Fraud Section Trial Attorney Elizabeth J. Kappakas.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
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Essex County Man Charged with Firearms and Drug Trafficking OffensesRead the Press Release
NEWARK, N.J. – An Essex County man has been indicted for firearms and narcotics offenses, U.S. Attorney Philip R. Sellinger announced.
Raishaun Lofton, 30, of Newark, New Jersey, was charged by indictment with one count of possession of a firearm and ammunition by a convicted felon, one count of possession of ammunition by a convicted felon, one count of possession with intent to distribute fentanyl, and one count of possessing a firearm in furtherance of a drug trafficking crime. He appeared today before United States Magistrate Judge Almonte in Newark federal court and was detained.
According to documents filed in this case and statements made in court:
On February 22, 2024, during an investigation, police officers recovered from Lofton a privately made firearm with no serial number, nine rounds of 9mm ammunition, 81 glassine envelopes containing fentanyl, and plastic jugs commonly used to distribute illegal drugs. On April 22, 2024, video surveillance footage depicted Lofton firing a different firearm into the air during an argument. One of the bullets from the firearm that Lofton shot entered a nearby living room where a family with two children was watching a movie. During the subsequent investigation, law enforcement recovered the firearm that Lofton had fired.
The two counts of possession of a firearm and ammunition by a convicted felon each carry a maximum sentence of 15 years in prison and a maximum fine of $250,000. The count of possession with intent to distribute fentanyl carries a maximum sentence of 20 years in prison and a maximum fine of $1,000,000. The count of possession of a firearm in furtherance of a drug trafficking offense carries a mandatory minimum sentence of five years in prison, which must run consecutively to the sentence imposed on the other counts, a maximum sentence of life in prison, and a maximum fine of $250,000.
U.S. Attorney Sellinger credited special agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, and police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Emanuel Miranda, with the investigation that led to the charges.
The government is represented by Assistant U.S. Attorney Eli Jacobs of the General Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Tatiana Nnaji, Esq., Assistant Federal Public Defender, Newark
lofton_indictment.pdfDrug Wholesaler Agrees to $1.5 Million Settlement of Anti-Kickback Statute and False Claims Act AllegationsRead the Press Release
MACON, Ga. – A $1.5 million civil settlement resolving allegations under the Anti-Kickback Statute and False Claims Act has been reached with BTW Solutions, LLC, an Arkansas-based drug wholesaler specializing in providing drugs and related billing services to physicians treating workers’ compensation patients.
The case resolved by this settlement agreement — U.S. ex rel. Young v. BTW Solutions, LLC, et al., 3:17-cv-94 — began as a qui tam suit filed on June 7, 2017. The Government filed a Complaint in Intervention on Sept. 21, 2023, and the parties have been litigating the matter since that time.
The defendant agreed to pay $1.5 million to the United States to resolve allegations that it violated the False Claims Act (FCA) by submitting bills to the Department of Labor’s Office of Workers’ Compensation Programs (OWCP) for the dispensing of certain pain creams in violation of the Anti-Kickback Statute. The OWCP pays workers’ compensation claims submitted on behalf of injured federal workers. The settlement marks the end of a years-long investigation during which the defendant fully cooperated.
“The Anti-Kickback Statute protects medical decision-making from being corrupted by improper financial considerations,” said U.S. Attorney Peter D. Leary. “I am proud of our office’s efforts litigating this unique and difficult case involving an often-overlooked program designed to provide needed healthcare to injured federal workers. I want to thank the U.S. Department of Labor Office of the Inspector General and the U.S. Postal Service Office of the Inspector General for their partnership in this case.”
“This settlement allows the OWCP to recover medical bill payments under the Federal Employees’ Compensation Act and return these funds to the Employees’ Compensation Fund,” said Office of Workers’ Compensation Director Christopher J. Godfrey. “It also shows the commitment of the Department of Labor to ensuring that program funds are used as the law requires, and the benefits of having the department’s Office of the Inspector General devote significant investigative resources to detecting cases of possible abuse within the FECA program.”
The United States alleges that from 2013 to 2018, the defendant induced the sale of its pain creams to physicians by offering them at or near cost, billing the OWCP on behalf of the physicians at an exorbitant markup and then splitting the reimbursement with the physicians. The United States alleges that such conduct constitutes a violation of the Anti-Kickback Statute and that the resulting claims submitted to OWCP for the pain creams therefore violate the FCA.
The claims resolved by this settlement are allegations only, and there has been no determination or admission of liability.
The Anti-Kickback Statute prohibits any person, including specialty medical and pharmaceutical suppliers, from offering or paying, directly or indirectly, any remuneration — which includes money or anything of value — to induce the purchase of a drug that will be reimbursed by a federal healthcare program.
The FCA is a federal law that imposes civil liability on any persons or entities who submit, or cause to be submitted, false claims for payment on the federal government or its contractors. The liability that can be imposed under the statute is treble damages (that is, three times the loss caused by the false claims) and a civil penalty between $13,946 to $27,894 per false claim. The FCA is the primary authority used by the United States Attorney’s Office’s Civil Division to redress fraud, waste and abuse within federal programs, including, but not limited to, Medicare, Medicaid, TRICARE and OWCP.
This case was investigated by Special Agent Joshua Barnes of the U.S. Department of Labor – Office of the Inspector General (DOL-OIG) and Special Agent Derek Bigham of the U.S. Postal Service - Office of the Inspector General (USPS-OIG).
Assistant U.S. Attorneys Todd P. Swanson and W. Taylor McNeill of the Middle District of Georgia represented the United States in the civil action and settlement agreement.
Chief Science Officer of Publicly Traded Health Care Company Charged for Insider Trading Scheme Utilizing 10b5-1 Trading PlansRead the Press Release
Note: View a copy of the indictment here.
An indictment was unsealed today charging a former U.S. citizen with engaging in an insider trading scheme involving the stock of Humanigen Inc., a publicly traded biopharmaceutical company. Dale Chappell, 54, who was formerly the chief scientific officer and member of the Board of Directors of Humanigen, was arrested on Dec. 20 in Switzerland based on the U.S. criminal charges. The United States will seek Chappell’s extradition to stand trial in the District of New Jersey.
According to court documents, between June and August of 2021, Chappell avoided more than $38 million in losses by selling millions of shares of Humanigen stock while in possession of material nonpublic information about Humanigen’s application to the Food and Drug Administration (FDA) for approval of a drug to treat COVID-19 called Lenzilumab. Chappell — who sold the Humanigen shares through funds that he controlled — is alleged to have engaged in an insider trading scheme in which he fraudulently used Rule 10b5-1 trading plans to trade Humanigen stock.
The indictment alleges that, in March 2021, Humanigen announced that it planned to seek emergency use authorization (EUA) for Lenzilumab. However, between April and May 2021, FDA staff allegedly informed Humanigen that Humanigen was unlikely to meet the criteria for issuance of an EUA. As alleged, knowing that this information was not disclosed publicly by Humanigen, Chappell sold the funds’ Humanigen stock, and later also implemented Rule 10b5-1 plans to trade more Humanigen stock holdings. After Humanigen publicly announced that the FDA had declined EUA approval for Lenzilumab, Humanigen’s stock price declined approximately 50%.
Chappell is charged with one count of engaging in a securities fraud scheme and four counts of securities fraud for insider trading. If convicted, he faces a maximum penalty of 25 years in prison on the securities fraud scheme charge and 20 years in prison on each of the insider trading charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case is part of a data-driven initiative led by the Criminal Division’s Fraud Section to identify executive abuses of 10b5-1 trading plans. Chappell’s alleged trading was identified by the Fraud Section through its data-analytics tools. A Rule 10b5-1 trading plan, which allows a corporate insider of a publicly traded company to set up a plan for selling company stock, can offer an executive a defense to insider-trading charges. However, the defense is unavailable if the executive is in possession of material nonpublic information at the time he or she enters into the 10b5-1 trading plan. Additionally, a plan does not protect an executive if the trading plan was not entered into in good faith or was entered into as part of an effort or scheme to evade the prohibitions of Rule 10b5‑1.
Principal Deputy Assistant Attorney General Brent Wible, head of the Justice Department’s Criminal Division; U.S. Attorney Philip R. Sellinger for the District of New Jersey; and Assistant Director Chad Yarbrough of the FBI’s Criminal Investigative Division made the announcement.
The FBI is investigating the case. The Justice Department’s Office of International Affairs is handling the request for Chappell’s extradition.
Trial Attorneys David Austin and Matthew Reilly of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Katherine Romano for the District of New Jersey are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
California Man Pleads Guilty to Distribution of Child Pornography and Making A Hoax Bomb Threat in Connection with Retaliation Against A Cumberland County MinorRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced that Nathaniel Sean Deleon, age 20, of Tulare, California, pleaded guilty on December 18, 2024, to a two-count criminal information charging him with distribution of child pornography and making a bomb threat hoax, in connection with a campaign of retaliation against a Cumberland County minor in 2023.
According to U.S. Attorney Gerard M. Karam, court documents and statements made in court show that Deleon met the then-16-year-old minor victim on the Roblox gaming platform and began an online relationship. The relationship ended. Thereafter, between June 2023 and November 2023, Deleon caused law enforcement in Cumberland County, Pennsylvania to respond to 23 related “swatting” incidents at addresses in Cumberland County, the majority of which belonged to the minor victim. The calls generally related information that someone had a gun and had killed, or was about to kill, another person.
On November 30, 2023, Deleon, identifying himself as the minor victim, informed a suicide prevention worker via an internet messaging application that the minor victim had placed pipe bombs in the classrooms and bathrooms of Big Spring High School, located in Cumberland County, and was in a car outside of the school with a shotgun. As a result, approximately 650 students and staff from Big Spring High School were evacuated. No bombs went off and it was determined that there were no explosive devices inside the school.
Deleon also distributed sexually explicit video of the minor victim on two occasions in November 2023.
Deleon agreed to pay restitution in accordance with a schedule to be determined by the Court.
The case was investigated by the Federal Bureau of Investigation and the Pennsylvania State Police. Assistant United States Attorney David C. Williams is prosecuting the case.
The maximum combined penalty under federal law for these offenses is 25 years, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
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Brazilian Man Charged with Making Extortionate Threats to Publicize Stolen Data Obtained by Unlawful Computer IntrusionRead the Press Release
Newark, N.J. – A citizen and resident of Brazil was charged with making extortionate threats to publicize data stolen from the Brazilian subsidiary of a New Jersey company, U.S. Attorney Philip R. Sellinger announced.
Junior Barros De Oliveira, 29, of Curitiba, Brazil was charged with four counts of extortionate threats involving information obtained from protected computers in violation of Title 18, United States Code, Section 1030(a)(7)(B) and four counts of threatening communications in violation of Title 18, United States Code, Section 875(d) in an indictment unsealed today in Newark federal court.
According to the Indictment:
In March 2020, De Oliveira gained unauthorized access and exceeded authorized access to the computer systems of Victim 1-Brazil, the Brazilian subsidiary of a New Jersey company. Exploiting this access, De Oliveira obtained confidential customer information relating to approximately 300,000 customers of Victim 1-Brazil. In September 2020, De Oliveira began contacting U.S. representatives of Victim 1, including its CEO, in an attempt to extort money from Victim 1-Brazil. De Oliveira demanded over approximately $3,000,000 in Bitcoin in exchange for keeping the stolen data confidential and not publicizing it.
Each of the four counts of making extortionate threats in relation to information obtained from protected computers carry a maximum prison term of 5 years, and a maximum fine of $250,000 or twice the value of any gain or loss, whichever is greater. Each of the four counts of threatening communications carry a maximum prison term of 2 years, and a maximum fine of $250,000 or twice the value of any gain or loss, whichever is greater.
U.S. Attorney Sellinger credited special agents of the Federal Bureau of Investigation (“FBI”)’s Newark Field Office, under the direction of Acting Special Agent in Charge Nelson I. Delgado.
The government is represented by Assistant U.S. Attorney David E. Malagold of the Cybercrime Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
deoliveira.indictment.pdfBaltimore Man Sentenced to Federal Prison for Possessing an Illegal FirearmRead the Press Release
Greenbelt, Maryland – Today, U.S. District Judge Deborah K. Chasanow sentenced Montreal Proctor, 34, of Baltimore, Maryland, to three years in federal prison, followed by three years of supervised release, for federal charges of illegal possession of a firearm and ammunition.
Erek L. Barron, U.S. Attorney for the District of Maryland, announced the sentence with Special Agent in Charge Toni M. Crosby, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Commissioner Richard Worley, Baltimore Police Department (BPD).
According to his guilty plea, on June 30, 2022, Proctor walked through the 500 block of Chateau Avenue, in Baltimore, while armed with a loaded firearm. While walking, Proctor encountered police officers as they were patrolling the area. He then took a loaded firearm from out of his waistband, resulting in a brief standoff. Proctor eventually dropped the firearm and began to flee before he was later arrested.
Law enforcement recovered the firearm and found that it was a Ruger .40 caliber pistol that was loaded with more than 10 rounds of ammunition. Proctor was previously convicted of several violent offenses, including attempted murder, first-degree assault, and attempted robbery. In addition to his federal sentence, Proctor is facing state charges for violating probation.
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 make our neighborhoods safer for everyone. PSN, an evidence-based program proven to be effective at reducing violent crime, is the centerpiece of the Department of Justice’s violent crime reduction efforts. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
U.S. Attorney Barron commended the ATF and BPD for their work in the investigation. Mr. Barron also thanked Assistant U.S. Attorneys Jason D. Medinger and Adeyemi Adenrele, who prosecuted the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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21 December 2024
DeWitt Post Office Station Manager Indicted for Stealing StampsRead the Press Release
SYRACUSE, NEW YORK – Emilio Chirico, age 56, the Station Manager for the DeWitt, New York Post Office, has been charged by indictment with wire fraud, misappropriation of postal funds, and false entries and reports, announced United States Attorney Carla B. Freedman and Matthew Modafferi of the United States Postal Service, Office of Inspector General (USPS-OIG).
The indictment alleges that between January 2021 and March 2023, Chirico stole $81,553.94 in stamps from the DeWitt Post Office and falsified postal records to conceal the theft of the stamps. Chirico has been the station manager at the DeWitt Post Office since March 2012.
The charges filed against Chirico carry a maximum sentence of 30 years in federal prison, a fine of up to $1,000,000.00, and a term of supervised release of up to 5 years. A defendant’s sentence is imposed by a judge based on the statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
The charges in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty.
The United States Postal Service, Office of Inspector General (USPS-OIG) is investigating the case, which is being prosecuted by Assistant U.S. Attorneys Tamara B. Thomson and Michael F. Perry.
20 December 2024
Wake County Man Responsible for Trafficking Methamphetamine Sentenced to 10 YearsRead the Press Release
RALEIGH, N.C. – Michael Lynn Russell, a 62-year-old resident of Fuquay-Varina, has been sentenced to 120 months in prison after being arrested twice for trafficking methamphetamine. Russell pled guilty on October 8, 2024.
“This sentencing reflects the commitment of the Fuquay-Varina Police Department to protecting our community from the devastating impact of methamphetamine trafficking. We are grateful for the collaboration with the United States Attorney’s Office, the DEA, the North Carolina State Highway Patrol, and our dedicated officers who worked tirelessly to bring this case to justice. Let this serve as a clear message: we will not tolerate illegal drug activity in Fuquay-Varina,” said Fuquay-Varina Police Chief Tim Smith.
According to the court documents and other information review by the court, in August and September 2022, officers with the Fuquay-Varina Police Department (FVPD) received information from a confidential source (CS1) that Russell was sourcing drug sales occurring at the Marquee Station Apartments in Fuquay-Varina. Law enforcement conducted surveillance on Russell between September 2022 and December 2022. On December 2, 2022, officers with the North Carolina State Highway Patrol (NCSHP), the FVPD, and the Drug Enforcement Administration (DEA) conducted a traffic stop on Russell’s vehicle after he left a hotel. A K-9 officer then conducted an open-air sniff search of the car, which resulted in a positive alert for controlled substances.
A search of Russell resulted in the seizure of two large bundles of cash folded in half and rubber banded. A search of the vehicle revealed two scales, a meth pipe, torches, baggies, methamphetamine, Suboxone, hydrocodone and Adderall pills, cocaine, and a locked box containing U.S. currency. A total of $10,779.00 in cash was seized during the traffic stop. Russell was arrested following the traffic stop and released on a state bond.
From August 2022 through May 15, 2024, Russell was arrested twice each while possessing additional drugs. At sentencing Russell was found to be responsible for 44 kilograms of methamphetamine, 10 milligrams of hydrocodone, 11 dosage units of Suboxone, 150 milligrams of pure methamphetamine, 5 grams of cocaine, and 26 dosage units of Alprazolam. After each of his arrests, Russell admitted to his criminal activities to law enforcement.
Michael F. Easley, Jr., U.S. Attorney for the Eastern District of North Carolina, made the announcement after sentencing by Chief Judge Richard Myers. The Drug Enforcement Administration, Fuquay-Varina Police Department, and the North Carolina State Highway Patrol investigated the case. Assistant U.S. Attorney Jennifer C. Nucci 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 number 5:24-cr-00142-M-BM.
United States and Arizona File to Effect Transfer of Land to Be Held in Trust for the Hopi TribeRead the Press Release
The Justice Department, the Department of the Interior (DOI), the State of Arizona and the Hopi Tribe today announced the filing of a “friendly condemnation” to effect the historic transfer of more than 20,000 acres of land from Arizona to the United States to be held in trust for the Hopi Tribe. Upon the deposit by the Hopi Tribe of $3.9 million, which serves as an estimate of just compensation for the benefit of the State of Arizona, into the Registry of the U.S. District Court for the District of Arizona, these lands will be owned by the United States and then immediately placed into trust for the Hopi Tribe. The lands being transferred are interspersed with Hopi-owned lands and have long been leased to the Hopi Tribe for ranching purposes.
This is the first of an anticipated series of condemnation actions to ultimately transfer approximately 110,000 acres from Arizona to the United States in trust for the Hopi Tribe. As with subsequent actions, today’s condemnation is filed with the concurrence of Arizona and authorized by the Navajo-Hopi Land Dispute Settlement Act of 1996, which ratified a 1995 resolution to a long-running land dispute in northeastern Arizona between the Hopi Tribe, the Navajo Tribe and the United States. When the title is transferred to the United States, DOI will take the lands into trust for the Hopi Tribe.
“Today’s filing starts the process of eliminating the interspersed ownership that characterizes much of the lands the Hopi Tribe uses for ranching in northeast Arizona, as was envisioned by the Settlement Act of 1996,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “Arizona will receive just compensation for the land, and the Hopi Tribe will no longer have to deal with checkerboarded ownership, which will help improve its use for ranching and other agriculture activities.”
“Today’s filing could initiate historic transfer of more than 20,000 acres back into Hopi Tribe ownership, a first step in the process to transfer an overall 110,000 acres into trust for the Tribes,” said Solicitor Bob Anderson of the Department of the Interior. “All parties stand to benefit, as the State of Arizona will receive just compensation and the Hopi Tribe will take on cohesive ownership across lands that hold sacred and economic significance and will support ranching and agricultural activities of their communities.”
“After nearly three decades of the Hopi fighting for their rights, I’m proud to enter into this historic agreement,” said Arizona Governor Katie Hobbs. “Every Arizonan should have an opportunity to thrive and a space to call home, and this agreement takes us one step closer to making those Arizona values a reality. While politicians of the past refused to hear the voices of tribal communities in our state, I’m so glad to work side-by-side with them as we build a state that gives every family opportunity. I look forward to continued partnership with Chairman Nuvangyaoma and the 22 tribal governments across our state.”
“Today is not only a historic day, it is also a day of celebration for the Hopi Tribe. The 1996 Hopi-Navajo Land Settlement Act is being fulfilled; the Hopi Tribe signed the settlement with the United States 30 years ago,” said Chairman Timothy L. Nuvangyaoma of the Hopi Tribe. “I am grateful to everyone who worked on making this a reality; I want to acknowledge the hard-working staff at the Governor’s office, the Arizona State Land Commission, the Department of the Interior and the Department of Justice. A special thank you to Governor Hobbs, Secretary Haaland and Commissioner Sahid for their leadership, collaboration and dedication to this effort. Within Hopi, it is our time of the Soyal’ang ceremony — the start of the New Year and the revitalization of life. It is fitting that this historic moment coincides with such an important time.”
The acquisition includes all appurtenant water and mineral rights owned by Arizona. However, it is subject to, and will not affect, existing easements and rights of way for public highways and utilities and similar encumbrances.
Attorneys from ENRD’s Land Acquisition Section are handling the matter.
United States Joins Lawsuit Against Former Executives of Kabbage Inc. Alleging False Claims Act Violations in Connection with Paycheck Protection Program LendingRead the Press Release
The United States has intervened and filed a complaint against Robert Frohwein, Kathryn Petralia and Spencer Robinson, three former executives of Kabbage Inc., a now-bankrupt financial technology company. The United States alleges that they violated the False Claims Act by submitting and causing the submission of false claims for loan forgiveness, loan guarantees and processing fees to the Small Business Administration (SBA) in connection with Kabbage’s participation in the Paycheck Protection Program (PPP).
“The PPP was intended to provide critical assistance to eligible businesses during the economic uncertainty caused by the pandemic,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to ensuring that PPP lenders — including their executives — are held accountable for contributing to the misuse of PPP funds by knowingly failing to comply with applicable program requirements, including approving PPP loans in inflated amounts and to ineligible borrowers.”
Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, to provide federally guaranteed loans to small businesses suffering economic hardship due to the COVID-19 pandemic. The SBA administered the PPP. The CARES Act authorized private lenders to approve PPP loans for eligible borrowers who could later seek forgiveness of the loans so long as they used loan funds on employee payroll and other eligible expenses. Among other things, participating PPP lenders were required to confirm borrowers’ average monthly payroll costs by reviewing the payroll documentation submitted with the borrower’s application. Lenders were also required to follow applicable Bank Secrecy Act/Anti-Money Laundering requirements to help combat fraud. Any unforgiven or defaulted PPP loans made by lenders were guaranteed by the SBA, so long as the lenders adhered to PPP requirements. Lenders who originated PPP loans were paid a fixed fee calculated as a percentage of the loan amount by the SBA.
According to the government’s complaint, Frohwein and Petralia co-founded Kabbage in 2008 and served as the company’s chief executive officer and president, respectively, while Robinson formerly served as the company’s head of strategy. Kabbage was approved as a PPP lender in 2020 and approved more than $7 billion in PPP loans that year for which the company was paid more than $217 million in processing fees after certifying that it had complied with all applicable lending requirements.
The complaint alleges that, between April and October 2020, the defendants knowingly submitted or caused the submission of false claims for loan guarantees, loan forgiveness and processing fees relating to tens of thousands of PPP loans that were systemically inflated due to calculation errors by Kabbage. These errors allegedly included Kabbage’s double-counting of state and local taxes paid by employees and the failure to exclude annual compensation in excess of $100,000 per employee from its calculation of payroll costs. Additionally, the lawsuit alleges that the defendants knowingly submitted or caused the submission of false claims for processing fees related to tens of thousands of PPP loans where Kabbage failed to implement appropriate fraud controls. The government’s complaint alleges that the defendants ignored these violations to maximize PPP processing fees before selling off the majority of Kabbage’s assets in October 2020.
Kabbage Inc., which is now winding down its operations as KServicing Wind Down Corp. after filing for bankruptcy in the wake of the 2020 asset sale, previously agreed to resolve allegations relating to its role in the submission of false claims to the SBA. As part of that settlement, the United States received a general unsecured claim in the bankruptcy proceeding of up to $120 million, and the company received a credit for $12.5 million that Kabbage returned to SBA during the department’s investigation.
“The PPP was a light providing hope to businesses in the midst of the shadow of a global pandemic,” said U.S. Attorney Damien M. Diggs for the Eastern District of Texas. “Unfortunately, some unscrupulous lenders and executives took advantage of that situation by lining their pockets with ill-gotten incentive payments from processing PPP loans despite not performing even the most cursory fraud checks or reviews of borrower documentation. Individuals who shirked their responsibilities at the expense of the public fisc must be held accountable. This lawsuit against Kabbage’s former executives demonstrates our firm commitment to holding all parties responsible for their part in causing the submission of false claims to the PPP.”
“SBA’s lending partners have a responsibility to ensure only eligible borrowers gain access to SBA’s programs,” said Special Agent in Charge Brady Ipock of the SBA Office of Inspector General (SBA OIG)’s Central Region. “SBA OIG stands ready to support the Justice Department in rooting out greed and wrongful actions. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their support and dedication to pursuing justice in this case.”
The lawsuit was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Paul Pietschner, a former analyst in Kabbage’s collections department. The FCA permits private parties to file suit on behalf of the United States for false claims and to share in any recovery. The FCA also permits the United States to intervene in such an action, as it has done in this case. A defendant who violates the act is subject to liability for three times the government’s losses, plus applicable penalties.
On May 17, 2021, Attorney General Merrick B. Garland established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across the federal government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international actors committing civil and criminal fraud and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit www.justice.gov/coronavirus.
Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Trial Attorney Sarah E. Loucks of the Civil Division’s Commercial Litigation Branch, Fraud Section and Assistant U.S. Attorney Betty Young for the Eastern District of Texas are handling the matter, with assistance provided by the SBA’s Office of General Counsel and Office of the Inspector General.
The case is captioned United States ex rel. Pietschner v. Kabbage, Inc., et al., No. 4:21-cv-110-SDJ (EDTX).
The claims asserted by the United States are allegations only. There has been no determination of liability.
United States Charges Dual Russian and Israeli National as Developer of LockBit Ransomware GroupRead the Press Release
Note: A copy of the superseding criminal complaint can be found here.
A superseding criminal complaint filed in the District of New Jersey was unsealed today charging a dual Russian and Israeli national for being a developer of the LockBit ransomware group.
In August, Rostislav Panev, 51, a dual Russian and Israeli national, was arrested in Israel pursuant to a U.S. provisional arrest request with a view towards extradition to the United States. Panev is currently in custody in Israel pending extradition on the charges in the superseding complaint.
“The Justice Department’s work going after the world’s most dangerous ransomware schemes includes not only dismantling networks, but also finding and bringing to justice the individuals responsible for building and running them,” said Attorney General Merrick B. Garland. “Three of the individuals who we allege are responsible for LockBit’s cyberattacks against thousands of victims are now in custody, and we will continue to work alongside our partners to hold accountable all those who lead and enable ransomware attacks.”
“The arrest of Mr. Panev reflects the Department's commitment to using all its tools to combat the ransomware threat,” said Deputy Attorney General Lisa Monaco. “We started this year with a coordinated international disruption of LockBit — the most damaging ransomware group in the world. Fast forward to today and three LockBit actors are in custody thanks to the diligence of our investigators and our strong partnerships around the world. This case is a model for ransomware investigations in the years to come.”
“The arrest of alleged developer Rostislav Panev is part of the FBI’s ongoing efforts to disrupt and dismantle the LockBit ransomware group, one of the most prolific ransomware variants across the globe,” said FBI Director Christopher Wray. “The LockBit group has targeted both public and private sector victims around the world, including schools, hospitals, and critical infrastructure, as well as small businesses and multi-national corporations. No matter how hidden or advanced the threat, the FBI remains committed to working with our interagency partners to safeguard the cyber ecosystem and hold accountable those who are responsible for these criminal activities.”
“The criminal complaint alleges that Rostislav Panev developed malware and maintained the infrastructure for LockBit, which was once the world’s most destructive ransomware group and attacked thousands of victims, causing billions of dollars in damage,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Along with our domestic and international law enforcement partner actions to dismantle LockBit’s infrastructure, the Criminal Division has disrupted LockBit’s operations by charging seven of its key members (including affiliates, developers, and its administrator) and arresting three of these defendants — including Panev. We are especially grateful for our partnerships with authorities in Europol, the United Kingdom, France, and Israel, which show that, when likeminded countries work together, cybercriminals will find it harder to escape justice.”
“As alleged by the complaint, Rostislav Panev for years built and maintained the digital weapons that enabled his LockBit coconspirators to wreak havoc and cause billions of dollars in damage around the world,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “But just like the six other LockBit members previously identified and charged by this office and our FBI and Criminal Division partners, Panev could not remain anonymous and avoid justice indefinitely. He must now answer for his crimes. Today’s announcement represents another blow struck by the United States and our international partners against the LockBit organization, and our efforts will continue relentlessly until the group is fully dismantled and its members brought to justice.”
According to the superseding complaint, documents filed in this and related cases, and statements made in court, Panev acted as a developer of the LockBit ransomware group from its inception in or around 2019 through at least February 2024. During that time, Panev and his LockBit coconspirators grew LockBit into what was, at times, the most active and destructive ransomware group in the world. The LockBit group attacked more than 2,500 victims in at least 120 countries around the world, including 1,800 in the United States. Their victims ranged from individuals and small businesses to multinational corporations, including hospitals, schools, nonprofit organizations, critical infrastructure, and government and law-enforcement agencies. LockBit’s members extracted at least $500 million in ransom payments from their victims and caused billions of dollars in other losses, including lost revenue and costs from incident response and recovery.
LockBit’s members comprised “developers,” like Panev, who designed the LockBit malware code and maintained the infrastructure on which LockBit operated. LockBit’s other members, called “affiliates,” carried out LockBit attacks and extorted ransom payments from LockBit victims. LockBit’s developers and affiliates would then split ransom payments extorted from victims.
As alleged in the superseding complaint, at the time of Panev’s arrest in Israel in August, law enforcement discovered on Panev’s computer administrator credentials for an online repository that was hosted on the dark web and stored source code for multiple versions of the LockBit builder, which allowed LockBit’s affiliates to generate custom builds of the LockBit ransomware malware for particular victims. On that repository, law enforcement also discovered source code for LockBit’s StealBit tool, which helped LockBit affiliates exfiltrate data stolen through LockBit attacks. Law enforcement also discovered access credentials for the LockBit control panel, an online dashboard maintained by LockBit developers for LockBit’s affiliates and hosted by those developers on the dark web.
The superseding complaint also alleges that Panev exchanged direct messages through a cybercriminal forum with LockBit’s primary administrator, who, in an indictment unsealed in the District of New Jersey in May, the United States alleged to be Dimitry Yuryevich Khoroshev (Дмитрий Юрьевич Хорошев), also known as LockBitSupp, LockBit, and putinkrab. In those messages, Panev and the LockBit primary administrator discussed work that needed to be done on the LockBit builder and control panel.
Court documents further indicate that, between June 2022 and February 2024, the primary LockBit administrator made a series of transfers of cryptocurrency, laundered through one or more illicit cryptocurrency mixing services, of approximately $10,000 per month to a cryptocurrency wallet owned by Panev. Those transfers amounted to over $230,000 during that period.
In interviews with Israeli authorities following his arrest in August, Panev admitted to having performed coding, development, and consulting work for the LockBit group and to having received regular payments in cryptocurrency for that work, consistent with the transfers identified by U.S. authorities. Among the work that Panev admitted to having completed for the LockBit group was the development of code to disable antivirus software; to deploy malware to multiple computers connected to a victim network; and to print the LockBit ransom note to all printers connected to a victim network. Panev also admitted to having written and maintained LockBit malware code and to having provided technical guidance to the LockBit group.
The LockBit Investigation
The superseding complaint against, and apprehension of, Panev follows a disruption of LockBit ransomware in February by the United Kingdom (U.K.)’s National Crime Agency (NCA)’s Cyber Division, which worked in cooperation with the Justice Department, FBI, and other international law enforcement partners. As previously announced by the Department, authorities disrupted LockBit by seizing numerous public-facing websites used by LockBit to connect to the organization’s infrastructure and by seizing control of servers used by LockBit administrators, thereby disrupting the ability of LockBit actors to attack and encrypt networks and extort victims by threatening to publish stolen data. That disruption succeeded in greatly diminishing LockBit’s reputation and its ability to attack further victims, as alleged by documents filed in this case.
The superseding complaint against Panev also follows charges brought in the District of New Jersey against other LockBit members, including its alleged primary creator, developer, and administrator, Dmitry Yuryevich Khoroshev. An indictment against Khoroshev unsealed in May alleges that Khoroshev began developing LockBit as early as September 2019, continued acting as the group’s administrator through 2024, a role in which Khoroshev recruited new affiliate members, spoke for the group publicly under the alias “LockBitSupp,” and developed and maintained the infrastructure used by affiliates to deploy LockBit attacks. Khoroshev is currently the subject of a reward of up to $10 million through the U.S. Department of State’s Transnational Organized Crime (TOC) Rewards Program, with information accepted through the FBI tip website at www.tips.fbi.gov/.
A total of seven LockBit members have now been charged in the District of New Jersey. Beyond Panev and Khoroshev, other previously charged LockBit defendants include:
- In July, two LockBit affiliate members, Mikhail Vasiliev, also known as Ghostrider, Free, Digitalocean90, Digitalocean99, Digitalwaters99, and Newwave110, and Ruslan Astamirov, also known as BETTERPAY, offtitan, and Eastfarmer, pleaded guilty in the District of New Jersey for their participation in the LockBit ransomware group and admitted deploying multiple LockBit attacks against U.S. and foreign victims. Vasiliev and Astamirov are presently in custody awaiting sentencing.
- In February, in parallel with the disruption operation described above, an indictment was unsealed in the District of New Jersey charging Russian nationals Artur Sungatov and Ivan Kondratyev, also known as Bassterlord, with deploying LockBit against numerous victims throughout the United States, including businesses nationwide in the manufacturing and other industries, as well as victims around the world in the semiconductor and other industries. Sungatov and Kondratyev remain at large.
- In May 2023, two indictments were unsealed in Washington, D.C., and the District of New Jersey charging Mikhail Matveev, also known as Wazawaka, m1x, Boriselcin, and Uhodiransomwar, with using different ransomware variants, including LockBit, to attack numerous victims throughout the United States, including the Washington, D.C., Metropolitan Police Department. Matveev remains at large and is currently the subject of a reward of up to $10 million through the U.S. Department of State’s TOC Rewards Program, with information accepted through the FBI tip website at www.tips.fbi.gov/.
The U.S. Department of State’s TOC Rewards Program is offering rewards of:
- Up to $10 million for information leading to the arrest and/or conviction in any country of Khoroshev;
- Up to $10 million for information leading to the arrest and/or conviction of Matveev;
- Up to $10 million for information leading to the identification and location of any individuals who hold a key leadership position in LockBit; and
- Up to $5 million for information leading to the arrest and/or conviction in any country of any individual participating or attempting to participate in LockBit.
Information is accepted through the FBI tip website at tips.fbi.gov.
Khoroshev, Matveev, Sungatov, and Kondratyev have also been designated for sanctions by the Department of the Treasury’s Office of Foreign Assets Control for their roles in launching cyberattacks.
Victim Assistance
LockBit victims are encouraged to contact the FBI and submit information at www.ic3.gov/. As announced by the Department in February, law enforcement, through its disruption efforts, has developed decryption capabilities that may enable hundreds of victims around the world to restore systems encrypted using the LockBit ransomware variant. Submitting information at the IC3 site will enable law enforcement to determine whether affected systems can be successfully decrypted.
LockBit victims are also encouraged to visit www.justice.gov/usao-nj/lockbit for case updates and information regarding their rights under U.S. law, including the right to submit victim impact statements and request restitution, in the criminal litigation against Panev, Astamirov, and Vasiliev.
The FBI Newark Field Office, under the supervision of Acting Special Agent in Charge Nelson I. Delgado, is investigating the LockBit ransomware variant. Israel’s Office of the State Attorney, Department of International Affairs, and Israel National Police; France’s Gendarmerie Nationale Cyberspace Command, Paris Prosecution Office — Cyber Division, and judicial authorities at the Tribunal Judiciare of Paris; Europol; Eurojust; the U.K.’s NCA; Germany’s Landeskriminalamt Schleswig-Holstein, Bundeskriminalamt, and the Central Cybercrime Department North Rhine-Westphalia; Switzerland’s Federal Office of Justice, Public Prosecutor’s Office of the Canton of Zurich, and Zurich Cantonal Police; Spain’s Policia Nacional and Guardia Civil; Japan’s National Police Agency; Australian Federal Police; Sweden’s Polismyndighetens; Canada’s Royal Canadian Mounted Police; Politie Dienst Regionale Recherche Oost-Brabant of the Netherlands; and Finland’s National Bureau of Investigation have provided significant assistance and coordination in these matters and in the LockBit investigation generally.
Trial Attorneys Debra Ireland and Jorge Gonzalez of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorneys Andrew M. Trombly, David E. Malagold, and Vinay Limbachia for the District of New Jersey are prosecuting the charges against Panev and the other previously charged LockBit defendants in the District of New Jersey.
The Justice Department’s Cybercrime Liaison Prosecutor to Eurojust, Office of International Affairs, and National Security Division also provided significant assistance.
Additional details on protecting networks against LockBit ransomware are available at StopRansomware.gov. These include Cybersecurity and Infrastructure Security Agency Advisories AA23-325A, AA23-165A, and AA23-075A.
A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
United States Attorney Christopher R. Kavanaugh Steps DownRead the Press Release
CHARLOTTESVILLE, Va. – Christopher R. Kavanaugh announced today that he will step down as the United States Attorney for the Western District of Virginia, resigning from the Department of Justice, effective Friday, December 20, 2024 at 11:59 p.m. after serving more than three years in office.
“Four years ago, Chris Kavanaugh was one of the first people I brought in to join the Office of the Deputy Attorney General because of his experience within the Department and his leadership on national security issues,” said Deputy Attorney General Lisa Monaco. “Throughout his distinguished career – at Main Justice, as an Assistant U.S. Attorney in the District of Columbia and the Western District of Virginia, and as United States Attorney – Chris has served the Department and his fellow Virginians with integrity and tenacity. I am grateful for his service.”
Mr. Kavanaugh was sworn in by Deputy Attorney General Monaco on October 7, 2021, after having been unanimously confirmed by the United States Senate. Mr. Kavanaugh was later appointed to be a member of the Attorney General’s Advisory Committee, a group that advises the Attorney General and Deputy Attorney General on emerging policy issues facing the Department and the United States Attorney community. Mr. Kavanaugh also chaired the AGAC’s National Security Subcommittee, which supported the Department’s enhanced focus on investigations and prosecutions of malign foreign influence and nation state threats.
“Chris Kavanaugh has been an incredible partner for ATF and a national leader in the fight against violent crime. He has worked side-by-side with law enforcement to bring impactful cases, prosecute dangerous criminals, and lead in the innovative use of Crime Gun Intelligence to make Virginia, and this Nation, safer,” said Steven M. Dettelbach, Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
During his tenure, Mr. Kavanaugh led the U.S. Attorney’s Office through a transitional period, expanding its footprint, hiring a record number of federal prosecutors and staff, and spearheading ground-breaking criminal and affirmative civil enforcements.
“Every day, the public servants of United States Attorney’s Office for the Western District of Virginia work to make the District – and our Nation – a safer and better place for us all,” United States Attorney Kavanaugh said today. “It has been the honor of my life to lead this team of selfless individuals who are so dedicated to fairness, the rule of law, and doing what is right. I know that WDVA will continue to make an outsized impact as citizens of the Justice Department, and I look forward to its future.
I thank President Biden for nominating me, Senators Mark Warner and Tim Kaine for their recommendation, and Attorney General Garland and Deputy Attorney General Monaco for leading the Department and supporting the United States Attorney community during my tenure. It has been an honor to serve the American people.”
Under Mr. Kavanaugh’s leadership, the Western District of Virginia has achieved notable successes in numerous complex criminal and civil cases. For example:
United States v. McKinsey & Company
For the first time ever, a management consulting firm was held criminally responsible for advice resulting in the commission of a crime by a client, Purdue Pharma, the makers of OxyContin. McKinsey & Company agreed to pay $650 million to resolve criminal and civil investigations into the firm’s consulting work, including a 2013 engagement with Purdue Pharma which McKinsey advised on steps to ‘turbocharge’ sales of OxyContin. A former senior partner at McKinsey & Company also agreed to plead guilty to one felony count of obstruction of justice for deleting Purdue related documents in an attempt to obstruct future investigations.
United States v. Envigo
In 2024, the Western District of Virginia obtained criminal convictions of Envigo, a biotechnology company dedicated to breeding animals for medical research with locations throughout North America. WDVA’s investigation revealed that Envigo was mistreating animals in violation of the Animal Welfare Act and polluting waterways in violation of the Clean Water Act. After a federal search warrant was executed, the Justice Department secured the surrender of over 4,000 beagles from an Envigo facility in Cumberland, Virginia. Envigo pled guilty to violating the Animal Welfare Act and the Clean Water Act, agreeing to pay more than $35 million in criminal penalties and fines – a record for any prosecution under the Animal Welfare Act.
The Killing of Big Stone Gap Police Officer Michael Chandler
Tragedy struck the small town of Big Stone Gap, Virginia in the early morning hours of November 13, 2021, when Big Stone Gap Police Officer Michael Chandler was murdered while responding to a disturbance call. The United States Attorney’s Office for WDVA brought federal charges against not only the person who shot and killed Chandler, Michael Donivan White, but also 18 other defendants who were a part of a methamphetamine trafficking conspiracy. Over the last few years, every single defendant has been convicted. White is scheduled to be sentenced in February 2025 and faces between 40- and 100-years’ incarceration.
The Bribery Trial of Sheriff Scott Jenkins
This week, a federal jury in the Charlottesville Division of WDVA returned guilty verdicts on all counts against former Culpeper County Sheriff Scott Jenkins. Jenkins had accepted numerous cash bribes and bribes in the form of campaign contributions from at least eight different people – one of whom he believed to be a felon – in exchange for appointing them as Auxiliary Deputy Sheriffs. A jury found Jenkins guilty of bribery, honest services fraud, and conspiracy after a trial and he will be sentenced in March 2025.
District Transformation
In addition to the case work victories, under Mr. Kavanaugh’s leadership, the U.S Attorney’s Office itself has transformed. Offices in Abingdon and Charlottesville have expanded, and the Office was awarded a nearly 20% increase in Assistant United States Attorneys, expanding the level of federal prosecutors to their highest levels in history. In a challenging budget climate, Mr. Kavanaugh has also made strides to modernize the Office’s capabilities to process voluminous amounts of documents for its more sophisticated prosecutions.
“On behalf of FBI Richmond, I sincerely thank Chris Kavanaugh for his service as U.S. Attorney. His unwavering commitment to justice and his exceptional partnership have been instrumental in advancing our shared mission of keeping Virginia safe. Chris’ leadership and collaboration have made a profound impact, and we deeply appreciate his dedication to ensuring the rule of law prevails,” said Stanley M. Meador, Special Agent in Charge of the FBI Richmond Division.
“U.S. Attorney Kavanaugh’s leadership and vision have been instrumental in our initiatives to safeguard the health and safety of the citizens of Western Virginia. His determination in developing effective judicial strategies have contributed to the dismantling of many drug-trafficking networks and significantly mitigating this threat to our communities. We extend our best wishes to him in his future endeavors,” said Jarod Forget, Special Agent in Charge of the Drug Enforcement Administration’s Washington Division.
Prior to his time as United States Attorney, Mr. Kavanaugh was an Assistant United States Attorney for 14 years, having served in United States Attorney’s Offices for both the Western District of Virginia and the District of Columbia. During his career, Mr. Kavanaugh directed numerous multi-agency investigations and prosecutions, with a focus on national security, white-collar crime, civil rights, and violent crimes involving racketeering and homicides. In WDVA, he served as the District’s chief national security prosecutor and Senior Litigation Counsel. Among other matters, he led the Department’s investigations and prosecutions into the Unite the Right riots of August 2017 in Charlottesville, Virginia. Just prior to his confirmation, Mr. Kavanaugh was Senior Counsel to Deputy Attorney General Lisa O. Monaco at the U.S. Department of Justice in Washington, D.C.
U.S. Charges Dual Russian and Israeli National as Developer of Lockbit Ransomware GroupRead the Press Release
Defendant Rostislav Panev in Custody Pending Extradition from Israel to the United States
NEWARK, N.J. – A superseding criminal complaint filed in the District of New Jersey was unsealed today charging a dual Russian and Israeli national for being a developer of the LockBit ransomware group, U.S. Attorney Philip R. Sellinger announced.
In August, Rostislav Panev, 51, a dual Russian and Israeli national, was arrested in Israel pursuant to a U.S. provisional arrest request with a view towards extradition to the United States. Panev is currently in custody in Israel pending extradition on the charges lodged in the superseding complaint.
“As alleged by the complaint, Rostislav Panev for years built and maintained the digital weapons that enabled his LockBit coconspirators to wreak havoc and cause billions of dollars in damage around the world. But just like the six other LockBit members previously identified and charged by this office and our FBI and Criminal Division partners, Panev could not remain anonymous and avoid justice indefinitely. He must now answer for his crimes. Today’s announcement represents another blow struck by the United States and our international partners against the LockBit organization, and our efforts will continue relentlessly until the group is fully dismantled and its members brought to justice.”
U.S. Attorney Philip R. Sellinger
“The Justice Department’s work going after the world’s most dangerous ransomware schemes includes not only dismantling networks, but also finding and bringing to justice the individuals responsible for building and running them,” said Attorney General Merrick B. Garland. “Three of the individuals who we allege are responsible for LockBit’s cyberattacks against thousands of victims are now in custody, and we will continue to work alongside our partners to hold accountable all those who lead and enable ransomware attacks.”
“The arrest of Mr. Panev reflects the Department's commitment to using all its tools to combat the ransomware threat,” said Deputy Attorney General Lisa Monaco. “We started this year with a coordinated international disruption of LockBit — the most damaging ransomware group in the world. Fast forward to today and three LockBit actors are in custody thanks to the diligence of our investigators and our strong partnerships around the world. This case is a model for ransomware investigations in the years to come.”
“The arrest of alleged developer Rostislav Panev is part of the FBI’s ongoing efforts to disrupt and dismantle the LockBit ransomware group, one of the most prolific ransomware variants across the globe,” said FBI Director Christopher Wray. “The LockBit group has targeted both public and private sector victims around the world, including schools, hospitals, and critical infrastructure, as well as small businesses and multi-national corporations. No matter how hidden or advanced the threat, the FBI remains committed to working with our interagency partners to safeguard the cyber ecosystem and hold accountable those who are responsible for these criminal activities.”
“The criminal complaint alleges that Rotislav Panev developed malware and maintained the infrastructure for LockBit, which was once the world’s most destructive ransomware group and attacked thousands of victims, causing billions of dollars in damage,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Along with our domestic and international law enforcement partner actions to dismantle LockBit’s infrastructure, the Criminal Division has disrupted LockBit’s operations by charging seven of its key members (including affiliates, developers, and its administrator) and arresting three of these defendants — including Panev. We are especially grateful for our partnerships with authorities in Europol, the United Kingdom, France, and Israel, which show that, when likeminded countries work together, cybercriminals will find it harder to escape justice.”
“For five years, Panev helped to grow LockBit into a ransomware machine of deception and extortion,” said Acting Special Agent in Charge Nelson I. Delgado of the FBI Newark Field Office. “His reach was far and wide but FBI Newark and our international law enforcement partners were able to disrupt his reign. Panev’s arrest marks a victory against these conspirators, and is a step towards upholding justice and neutralizing these criminals.”
According to the superseding complaint, documents filed in this and related cases, and statements made in court, Panev acted as a developer of the LockBit ransomware group from its inception in or around 2019 through at least February 2024. During that time, Panev and his LockBit coconspirators grew LockBit into what was, at times, the most active and destructive ransomware group in the world. The LockBit group attacked more than 2,500 victims in at least 120 countries around the world, including 1,800 in the United States. Their victims ranged from individuals and small businesses to multinational corporations, including hospitals, schools, nonprofit organizations, critical infrastructure, and government and law-enforcement agencies. LockBit’s members extracted at least $500 million in ransom payments from their victims and caused billions of dollars in other losses, including lost revenue and costs from incident response and recovery.
LockBit’s members comprised “developers,” like Panev, who designed the LockBit malware code and maintained the infrastructure on which LockBit operated. LockBit’s other members, called “affiliates,” carried out LockBit attacks and extorted ransom payments from LockBit victims. LockBit’s developers and affiliates would then split ransom payments extorted from victims.
As alleged in the superseding complaint, at the time of Panev’s arrest in Israel in August, law enforcement discovered on Panev’s computer administrator credentials for an online repository that was hosted on the dark web and stored source code for multiple versions of the LockBit builder, which allowed LockBit’s affiliates to generate custom builds of the LockBit ransomware malware for particular victims. On that repository, law enforcement also discovered source code for LockBit’s StealBit tool, which helped LockBit affiliates exfiltrate data stolen through LockBit attacks. Law enforcement also discovered access credentials for the LockBit control panel, an online dashboard maintained by LockBit developers for LockBit’s affiliates and hosted by those developers on the dark web.
The superseding complaint also alleges that Panev exchanged direct messages through a cybercriminal forum with LockBit’s primary administrator, who, in an indictment unsealed in the District of New Jersey in May, the United States alleged to be Dimitry Yuryevich Khoroshev (Дмитрий Юрьевич Хорошев), also known as LockBitSupp, LockBit, and putinkrab. In those messages, Panev and the LockBit primary administrator discussed work that needed to be done on the LockBit builder and control panel.
Court documents further indicate that, between June 2022 and February 2024, the primary LockBit administrator made a series of transfers of cryptocurrency, laundered through one or more illicit cryptocurrency mixing services, of approximately $10,000 per month to a cryptocurrency wallet owned by Panev. Those transfers amounted to over $230,000 during that period.
In interviews with Israeli authorities following his arrest in August, Panev admitted to having performed coding, development, and consulting work for the LockBit group and to having received regular payments in cryptocurrency for that work, consistent with the transfers identified by U.S. authorities. Among the work that Panev admitted to having completed for the LockBit group was the development of code to disable antivirus software; to deploy malware to multiple computers connected to a victim network; and to print the LockBit ransom note to all printers connected to a victim network. Panev also admitted to having written and maintained LockBit malware code and to having provided technical guidance to the LockBit group.
The LockBit Investigation
The superseding complaint against, and apprehension of, Panev follows a disruption of LockBit ransomware in February by the U.K. National Crime Agency (NCA)’s Cyber Division, which worked in cooperation with the Justice Department, FBI, and other international law enforcement partners. As previously announced by the Department, authorities disrupted LockBit by seizing numerous public-facing websites used by LockBit to connect to the organization’s infrastructure and by seizing control of servers used by LockBit administrators, thereby disrupting the ability of LockBit actors to attack and encrypt networks and extort victims by threatening to publish stolen data. That disruption succeeded in greatly diminishing LockBit’s reputation and its ability to attack further victims, as alleged by documents filed in this case.
The superseding complaint against Panev also follows charges brought in the District of New Jersey against other LockBit members, including its alleged primary creator, developer, and administrator, Dmitry Yuryevich Khoroshev. An indictment against Khoroshev unsealed in May alleges that Khoroshev began developing LockBit as early as September 2019, continued acting as the group’s administrator through 2024, a role in which Khoroshev recruited new affiliate members, spoke for the group publicly under the alias “LockBitSupp,” and developed and maintained the infrastructure used by affiliates to deploy LockBit attacks. Khoroshev is currently the subject of a reward of up to $10 million through the U.S. Department of State’s Transnational Organized Crime (TOC) Rewards Program, with information accepted through the FBI tip website at www.tips.fbi.gov/.
A total of seven LockBit members have now been charged in the District of New Jersey. Beyond Panev and Khoroshev, other previously charged LockBit defendants include:
- In July, two LockBit affiliate members, Mikhail Vasiliev, also known as Ghostrider, Free, Digitalocean90, Digitalocean99, Digitalwaters99, and Newwave110, and Ruslan Astamirov, also known as BETTERPAY, offtitan, and Eastfarmer, pleaded guilty in the District of New Jersey for their participation in the LockBit ransomware group and admitted deploying multiple LockBit attacks against U.S. and foreign victims. Vasiliev and Astamirov are presently in custody awaiting sentencing.
- In February, in parallel with the disruption operation described above, an indictment was unsealed in the District of New Jersey charging Russian nationals Artur Sungatov and Ivan Kondratyev, also known as Bassterlord, with deploying LockBit against numerous victims throughout the United States, including businesses nationwide in the manufacturing and other industries, as well as victims around the world in the semiconductor and other industries. Sungatov and Kondratyev remain at large.
- In May 2023, two indictments were unsealed in Washington, D.C., and the District of New Jersey charging Mikhail Matveev, also known as Wazawaka, m1x, Boriselcin, and Uhodiransomwar, with using different ransomware variants, including LockBit, to attack numerous victims throughout the United States, including the Washington, D.C., Metropolitan Police Department. Matveev remains at large and is currently the subject of a reward of up to $10 million through the U.S. Department of State’s TOC Rewards Program, with information accepted through the FBI tip website at www.tips.fbi.gov/.
The U.S. Department of State’s Transnational Organized Crime (TOC) Rewards Program is offering rewards of:
- Up to $10 million for information leading to the arrest and/or conviction in any country of Khoroshev;
- Up to $10 million for information leading to the arrest and/or conviction of Matveev;
- Up to $10 million for information leading to the identification and location of any individuals who hold a key leadership position in LockBit; and
- Up to $5 million for information leading to the arrest and/or conviction in any country of any individual participating or attempting to participate in LockBit.
Information is accepted through the FBI tip website at tips.fbi.gov.
Khoroshev, Matveev, Sungatov, and Kondratyev have also been designated for sanctions by the Department of the Treasury’s Office of Foreign Assets Control for their roles in launching cyberattacks.
Victim Assistance
LockBit victims are encouraged to contact the FBI and submit information at www.ic3.gov. As announced by the Department in February, law enforcement, through its disruption efforts, has developed decryption capabilities that may enable hundreds of victims around the world to restore systems encrypted using the LockBit ransomware variant. Submitting information at the IC3 site will enable law enforcement to determine whether affected systems can be successfully decrypted.
LockBit victims are also encouraged to visit www.justice.gov/usao-nj/lockbit for case updates and information regarding their rights under U.S. law, including the right to submit victim impact statements and request restitution, in the criminal litigation against Panev, Astamirov, and Vasiliev.
The FBI Newark Field Office, under the supervision of Acting Special Agent in Charge Nelson I. Delgado, is investigating the LockBit ransomware variant. Israel’s Office of the State Attorney, Department of International Affairs, and Israel National Police; France’s Gendarmerie Nationale Cyberspace Command, Paris Prosecution Office — Cyber Division, and judicial authorities at the Tribunal Judiciare of Paris; Europol; Eurojust; the United Kingdom’s National Crime Agency; Germany’s Landeskriminalamt Schleswig-Holstein, Bundeskriminalamt, and the Central Cybercrime Department North Rhine-Westphalia; Switzerland’s Federal Office of Justice, Public Prosecutor’s Office of the Canton of Zurich, and Zurich Cantonal Police; Spain’s Policia Nacional and Guardia Civil; Japan’s National Police Agency; Australian Federal Police; Sweden’s Polismyndighetens; Canada’s Royal Canadian Mounted Police; Politie Dienst Regionale Recherche Oost-Brabant of the Netherlands; and Finland’s National Bureau of Investigation have provided significant assistance and coordination in these matters and in the LockBit investigation generally.
Assistant U.S. Attorneys Andrew M. Trombly, David E. Malagold, and Vinay Limbachia for the District of New Jersey and Trial Attorneys Debra Ireland and Jorge Gonzalez of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the charges against Panev and the other previously charged LockBit defendants in the District of New Jersey.
The Justice Department’s Cybercrime Liaison Prosecutor to Eurojust, Office of International Affairs, and National Security Division also provided significant assistance.
Additional details on protecting networks against LockBit ransomware are available at StopRansomware.gov. These include Cybersecurity and Infrastructure Security Agency Advisories AA23-325A, AA23-165A, and AA23-075A.
The charges and allegations contained in the superseding complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Frank Arleo, Esq.
panev.supersedingcomplaint.pdfU.S. Attorney’s Office for the Eastern District of Washington Highlights Key 2024 Prosecutions of Crimes Against ChildrenRead the Press Release
Spokane, Washington – U.S. Attorney Vanessa R. Waldref, highlighted several prosecutions involving crimes against children in Eastern Washington during the last year. “Cases involving the abuse of young children are some of the most difficult matters that my office handles,” stated U.S. Attorney Waldref. “It is my honor to lead such a talented team of prosecutors and investigators, who work tirelessly to achieve justice on behalf of vulnerable victims.”
The U.S. Attorney’s Office brings these cases in federal court through its partnership with the Internet Crimes Against Children Task Force Program (ICAC). The ICAC program – which was developed in response to an ever-increasing number of children and an ever-increasing number of online images depicting child sexual abuse – provides funding to help state and local law enforcement develop an effective response to technology-facilitated child sexual exploitation and Internet crimes against children. The ICAC program also provides forensic and investigative components, training and technical assistance, victim services, and community education.
“Without the dedication of our state and local partners through the ICAC, many of those responsible for these terrible crimes may not have been held to account,” said U.S. Attorney Waldref.
In remarks shared from the U.S. Attorney’s Office, U.S. Attorney Waldref highlighted the following child exploitation cases prosecuted by her office in the past year:
- Michael Emineth and Malesa Hale engaged in years-long sexual abuse of a minor victim and recorded images depicting the abuse. In January 2024, Emineth was sentenced to 30 years, and Hale was sentenced to 28 years in federal prison.
- Robert Wayne Hutton placed a camera, hidden in a clock radio, on a bathroom counter in order to secretly film his victim undressing. The camera was wirelessly linked to Hutton’s smartphone, which Hutton used to view the recordings. In March 2024, Hutton was sentenced to 20 years in federal prison.
- Rick Lynn Johnson used his phone and computer to download and share thousands of images and videos depicting child sexual abuse. In May 2024, Johnson was sentenced to 5 years in prison and ordered to pay $60,000 in restitution to seven of his victims.
- Dallas Michael Shuler worked at Riverside Elementary School. According to court documents, he allegedly admitted to conversing with more than two dozen minors regarding sexual content, including by sharing and trading sexually explicit pictures and videos. In December 2024, Shuler was charged with producing and distributing child sexual abuse material and online enticement.
- Gerald Alan Nott, who is a registered sex offender, was using the internet at his parent’s home in Richland, Washington to download and distribute more than 1,000 files depicting child sexual abuse material. In August 2024, Nott was sentenced to 15 years in prison.
- Lucas Murphy contacted his victim online and asked the victim to send sexually explicit photos. Murphy later kidnapped the victim from Eastern Washington and subjected her to repeated physical and sexual abuse. In August 2024, he received a 20 year sentence.
- Former law enforcement officer, Koby Don Williams attempted to meet, what he thought, was a 13-year-old girl for sex at a hotel in Richland, Washington. Williams was found guilty at trial, and in September 2024, was sentenced to more than 11 years in federal Prison.
- Tony J. Bolen and Casey Allen Greer worked together to produce child sexual abuse material of a young child that Greer had been sexually abusing since as early as May 2021. In December 2024 both were found guilty at trial. The sentencing for Bolen and Greer is set for April 23, 2025, in Spokane, Washington.
- Nathan Roy Stout downloaded hundreds of files of child sexual abuse material. At the time of his offense, Stout was serving a sentence for committing a similar crime in 2018. For his latest offense, Stout was sentenced to 15 years in federal prison.
- Craig Michael Berry repeatedly enticed young teens to send him nude images and videos of sexual conduct in exchange for alcohol, vape pens, cartridges for the pens, and marijuana. In December of 2024, Berry was sentenced to 20 years in federal prison.
“These examples demonstrate the Department of Justice’s commitment to prosecuting difficult cases,” stated U.S. Attorney Waldref. “We will continue to work every day, alongside our partners in the ICAC Task Force, to prevent horrific victimization of children, protect victims, and remove dangerous offenders from our community.”
These cases reference herein were 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 U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
U.S. Attorney’s Office and FBI Announce Second Superseding Indictment, Bringing Additional Kidnapping and Assault Charges Against Serial Murderer, Kidnapper, and Sexual Abuser Labar TsethlikaiRead the Press Release
ALBUQUERQUE – Federal prosecutors have filed six additional charges against Labar Tsethlikai for kidnapping and assault with a dangerous weapon. The additional charges are part of a larger series of violent crimes committed by Tsethlikai against Native American men across New Mexico between 2022 and 2024. The added charges correspond to 5 additional victims.
Labar Tsethlikai, 51, an enrolled Member of Zuni Pueblo, now faces a 17-count second superseding indictment charging him with five additional counts of kidnapping and one count of assault with a dangerous weapon as follows:
- Count 5: Kidnapping of John Doe 3 on or about May 19, 2023, in Indian Country, McKinley County, New Mexico
- Count 11: Kidnapping of John Doe 6 on or about August 24, 2023, in Indian Country, McKinley County, New Mexico
- Count 12: Assault with a dangerous weapon (baseball bat) against John Doe 6 on or about August 24, 2023, in Indian Country, McKinley County, New Mexico
- Count 13: Kidnapping of John Doe 7 on or about September 7, 2023, in Indian Country, McKinley County, New Mexico
- Count 14: Kidnapping of John Doe 8 on or about September 15, 2023, in Indian Country, McKinley County, New Mexico
- Count 16: Kidnapping of John Doe 10 on or about April 5, 2024, in Bernalillo County, New Mexico
In total, the second superseding indictment identifies 11 victims of Tsethlikai. The investigation is ongoing.
Tsethlikai was initially charged with second degree murder on April 25, 2024. On July 31, 2024, a federal grand jury charged Tsethlikai in an 11-count superseding indictment with two counts of kidnapping resulting in death, one count of first-degree murder, one count of first-degree felony murder, four counts of kidnapping, one count assault with intent to commit murder, one count of assault resulting in serious bodily injury, and one count of aggravated sexual abuse:
- Count 1: On October 22, 2022, Tsethlikai allegedly kidnapped and murdered John Doe 1.
- Count 2: On January 18, 2024, Tsethlikai allegedly murdered John Doe 2 willfully, deliberately, maliciously, and with premeditation.
- Count 3: On January 18, 2024, Tsethlikai allegedly killed John Doe 2 during the commission of a kidnapping and sexual abuse.
- Count 4: On January 18, 2024, Tsethlikai allegedly kidnapped John Doe 2 and death resulted.
- Count 6: On June 15, 2023, Tsethlikai allegedly kidnapped John Doe 4.
- Count 7: On June 15, 2023, Tsethlikai allegedly assaulted John Doe 4 with the specific intent to commit murder.
- Count 8: On June 15, 2023, Tsethlikai allegedly assaulted John Doe 4, and the assault resulted in serious bodily injury.
- Count 9: On July 13, 2023, Tsethlikai kidnapped John Doe 5.
- Count 10: On July 13, 2023, Tsethlikai allegedly sexually abused John Doe 5 by force and threats, and the sexual act consisted of contact between the penis of Tsethlikai and the mouth of John Doe 5.
- Count 15: On February 16, 2024, Tsethlikai allegedly kidnapped John Doe 9 using interstate facilities and instrumentalities.
- Count 17: On April 11, 2024, Tsethlikai allegedly kidnapped John Doe 11 using interstate facilities and instrumentalities.
If convicted, Tsethlikai faces a mandatory life sentence or death for the kidnapping resulting in death and first-degree murder charges, up to twenty years imprisonment on the assault with intent to murder charge, up to ten years imprisonment on the assault resulting in serious bodily injury charge, and any number of years up to life for the kidnapping and aggravated sexual abuse charges.
U.S. Attorney Alexander M.M. Uballez, and Raul Bujanda, Special Agent in Charge of the Federal Bureau of Investigation’s Albuquerque Field Office, made the announcement today.
The Gallup Resident Agency of the Federal Bureau of Investigation’s Albuquerque Field Office, led by Special Agent Mark Stephenson, is investigating this case with assistance from the Albuquerque Police Department’s Homicide Unit, Sex Crimes Unit, and Air Support Unit. Assistant United States Attorneys Matthew J. McGinley and Mark A. Probasco are prosecuting the case, with victim support provided by the FBI’s Victim Services Division, the United States Attorney’s Office Victim Witness Unit, and Utah Navajo Health Systems, Inc., Victim Services.
The FBI continues to investigate Tsethlikai’s involvement in crimes against other victims. If you have reason to believe you or someone you know may be a victim, or have information about Tsethlikai, please call the FBI at (505) 889-1300 or submit tips online at tips.fbi.gov.
Labar Tsethlikai is approximately 5’7” and weighs 180 pounds. He is heavyset, has short brown hair, brown eyes, and wears glasses. He sometimes wears a gold bracelet. He is from Zuni, but travels extensively around New Mexico, including Gallup, Albuquerque, and Santa Fe. He is believed to work in the Native American jewelry industry and may be a Zuni jewely artist.
This case is part of the Department of Justice’s Missing or Murdered Indigenous Persons (MMIP) Regional Outreach Program, which aims to aid in the prevention and response to missing or murdered Indigenous people through the resolution of MMIP cases and communication, coordination, and collaboration with federal, Tribal, state, and local partners. The Department views this work as a priority for its law enforcement components. Through the MMIP Regional Outreach Program, a broad spectrum of stakeholders work together to identify MMIP cases and issues in Tribal communities and develop comprehensive solutions to address them. This prosecution upholds the Department’s mission to the unwavering pursuit of justice on behalf of Indigenous victims and their families.
View the Second Superseding Indictment (Tsethlikai).pdf# # #
U.S. Attorney, FBI Announce Federal Charges Against Arizona Man for Sexual AbuseRead the Press Release
ALBUQUERQUE – A Whiteriver man has been charged with two counts of sexual abuse.
The indictment alleges that between August 1, 2021, and August 31, 2021, Fernando Yatsatie, Jr., 47, a member of the Zuni Pueblo, unlawfully engaged in and attempted to engage in sexual acts using threats and intimidation.
Yatsatie will remain in custody pending trial, which has not been scheduled. If convicted, Yatsatie faces any term of years up to life in prison.
U.S. Attorney Alexander M.M. Uballez and Raul Bujanda, Special Agent in Charge of the FBI Albuquerque Field Office, made the announcement today.
The Gallup Resident Agency of the FBI Albuquerque Field Office investigated this case with assistance from the Zuni Police Department. Assistant U.S. Attorney Nicholas J. Marshall is prosecuting the case.
View the Indictment (Yatsatie).pdfAn indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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U.S. Attorney's Office Secures Guilty Plea from Albuquerque Man for Production of Child Sexual Abuse MaterialRead the Press Release
ALBUQUERQUE – An Albuquerque man pleaded guilty to federal charges of production of child sexual abuse materials, admitting to creating illicit content and using social media to lure minors for sexual exploitation.
According to court documents, Kevin Vallo, 40, used the social media messaging app Telegram to communicate with a 13-year-old victim. Vallo created multiple profiles on Telegram under different names and personas, misrepresenting his age as 16 when he was actually 39 years old.
Vallo admitted to engaging in sexually explicit chats with the victim and repeatedly inviting her to his residence. On or about February 19, 2024, Vallo persuaded the victim and two other minors to come to his home in Albuquerque for the purpose of engaging in sexual activity.
Vallo further admitted to recording four separate videos of himself engaging in sexual activity with the victim using his cellular phone, which he then sent to the victim. These videos constitute child pornography under federal law.
Vallo will remain in custody pending sentencing, which has not yet been scheduled. At sentencing, Vallo faces 15 to 25 years in prison. Upon his release from prison, Vallo will be subject to a minimum of 5 years and up to life of supervised release and must register as a sex offender.
U.S. Attorney Alexander M.M. Uballez, and Raul Bujanda, Special Agent in Charge of the FBI Albuquerque Field Office, made the announcement today.
The FBI Albuquerque Field Office investigated this case with assistance from the Bernalillo County Sheriff’s Office. Assistant United States Attorney Jesse Pecoraro is prosecuting the case 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 U.S. Attorneys' Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit Justice.gov/PSC.
If you have reason to believe you or your child may be a victim of Vallo, or if you have information about this ongoing investigation, please call the FBI at (505) 889-1300 or submit their tips online at tips.fbi.gov.
View the Plea Agreement (Vallo).pdf# # #
U.S. Attorney's Office Secures Agreement with Washoe County to Ensure Polling Place Access to Voters with DisabilitiesRead the Press Release
RENO – The United States Attorney’s Office for the District of Nevada has entered into an agreement with the Washoe County Board of Commissioners to resolve a compliance review that identified numerous physical barriers at polling sites. The agreement resolves the United States’ investigation into Washoe County’s compliance with Title II of the Americans with Disabilities Act, which prohibits discrimination on the basis of disability by a state or local government in any of its programs or services. The agreement will be in place through the 2026 and 2028 election cycles.
“We must continue to protect the rights of all Nevadans to participate in one of the most fundamental rights we possess, voting rights,” said Sue Fahami, First Assistant United States Attorney, District of Nevada. “That is why we are proud to protect the rights of voters with disabilities to cast their ballot in person, privately, independently and without barriers. We are grateful for Washoe County’s commitment to helping accomplish this mutual goal.”
On June 11, 2024, during Nevada’s primary election, the United States surveyed 10 polling locations in Washoe County. The surveys found a multitude of architectural and equipment barriers both in the exterior of polling sites and inside voting areas rendering the facilities inaccessible. These physical barriers included obstructions at accessible voting stations, unreachable voting machine controls, missing accessibility signage at parking spaces, surface openings from the public sidewalk to the accessible entrance, gaps and level changes.
As part of the agreement, Washoe County will train poll workers on the County’s obligations under the Americans with Disabilities Act and how to employ temporary measures if necessary. It will also use the technical assistance of an accessibility expert and an evaluation form for each current and prospective polling place based on ADA architectural standards. Washoe County will also survey polling locations for accessibility throughout the term of the agreement. Importantly, when selecting future polling sites, Washoe County will ensure that new locations are ADA accessible. The United States Attorney’s Office will monitor the agreement and provide technical assistance.
The Washoe County investigation is part of the Department of Justice’s ADA Voting Initiative, which focuses on protecting the voting rights of individuals with disabilities across the country. A hallmark of the ADA Voting Initiative is its collaboration with jurisdictions to increase accessibility at polling places.
The case is being handled by Assistant United States Attorney Ednin D. Martinez.
If you believe you have been discriminated against based on disability, please submit a report www.civilrights.justice.gov. For more information on the ADA, please call the department’s toll-free ADA Information Line at 1-800-514-0301 (TTY 1-833-610-1264) or visit www.ada.gov.
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voluntary_compliance_agreement_between_the_u.s.a._and_washoe_county_nevada_dj_no_204_46_180_with_attachment_u.s.a_0.pdfTwo-Time Convicted Felon Sentenced to over 11 Years in Prison for Drug and Firearm ChargesRead the Press Release
BOSTON – A Lynn man was sentenced today in federal court in Boston for drug and firearm charges.
Jose Perez, 27, was sentenced by Chief U.S. District Court Judge F. Dennis Saylor to 142 months in prison, to be followed by three years of supervised release. In August 2024, Perez was convicted after a five day jury trial of one count of conspiracy to distribute and to possess with intent to distribute controlled substances and one count of felon in possession of a firearm. In January 2023, Perez was arrested and charged along with co-defendant Henry Del Rio.
In December 2022, police officers attempted to stop a vehicle speeding through Lexington, Mass. that Perez was driving. Instead of pulling over, Perez accelerated and engaged in a high-speed escape attempt, traveling more than 85 miles per hour on residential streets, crashing head-first into another vehicle, and ultimately losing control and colliding into a post. As Perez exited the vehicle, a loaded Glock 34X 9mm semi-automatic handgun dropped to the ground. Perez and Del Rio, his passenger, then fled and led officers on a foot chase through a Stop and Shop parking lot. After officers apprehended Perez and Del Rio, Perez was found with over $2,000 cash in his pockets. Officers also recovered a bag of cocaine and a bag containing 44 smaller, individually wrapped bags of fentanyl in Del Rio’s flight path, as well as a bag of cocaine in the vehicle Perez had crashed.
At the time, Perez was on supervised release in connection with two prior federal convictions: one in 2017 for engaging in the business of dealing firearms without a license, and one in 2020 for conspiracy to distribute controlled substances and felon in possession of a firearm. Given Perez’s status as a felon, he is barred from possessing a firearm.
In May 2024, Del Rio pleaded guilty to conspiracy to distribute and possess with intent to distribute controlled sentences and is scheduled to be sentenced in January 2025.
United States Attorney Joshua S. Levy and James M. Ferguson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division made the announcement today. Valuable assistance was provided by the Lexington, Chelsea and MBTA Police Departments and Customs and Border Protection. Assistant U.S. Attorneys Mike Crowley and Sarah Hoefle of the Organized Crime and Gang Unit prosecuted the case.
Two New Haven Men Found Guilty of Fentanyl Trafficking OffensesRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, today announced that a jury in Bridgeport federal court has found LUIS SALAMAN, also known as “Bebe,” 42, and JESUS SEGUINOT, also known as “Chuchi,” 34, guilty of fentanyl trafficking offenses. A trial before U.S. District Judge Stefan R. Underhill began on December 9 and the jury returned guilty verdicts on multiple counts of a superseding indictment late yesterday afternoon.
According to the evidence presented during the trial, in October 2021, the FBI’s Safe Streets Task Force learned that Salaman was distributing large quantities of narcotics throughout New Haven. The investigation revealed that Salaman worked with Seguinot and others to distribute fentanyl. Between November 2021 and March 2022, investigators made multiple controlled purchases of distribution quantities of fentanyl from Salaman, Seguinot, and their associates.
The jury found Salaman and Seguinot guilty of conspiracy to distribute 40 grams or more of fentanyl, and Salaman guilty of three counts of possession with intent to distribute, and distribution of, 40 grams or more of fentanyl. The jury found Salaman not guilty of four counts, and Seguinot not guilty of one count, of possession with intent to distribute, and distribution of, 40 grams or more of fentanyl.
At sentencing, which is scheduled for March 13, Salaman faces a term of imprisonment of at least 10 years, and Seguinot faces a term of imprisonment of at least five years. Salaman faces enhanced penalties because of a prior conviction for a serious violent felony.
Salaman has been detained since his arrest on April 5, 2022. Seguinot was arrested on April 10, 2023, and is released on a $100,000 bond.
This investigation has been conducted by FBI’s Safe Streets Task Force, which includes members from the FBI, the Connecticut State Police, the Connecticut Department of Correction, and the New Haven, Milford, East Haven, West Haven, and Wallingford Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Robert S. Ruff and David T. Huang.
Two Missoula residents admit to trafficking large quantities of fentanyl, meth in communityRead the Press Release
MISSOULA — Two Missoula residents accused of working together to distribute more than 100,000 fentanyl pills and pounds of meth in the community admitted to charges today, U.S. Attorney Jesse Laslovich said.
The defendants, Taylor Gale Penny, 35, and Joey Lee Forward, 34, each pleaded guilty to possession with intent to distribute controlled substances. The defendants face a mandatory minimum of 10 years to life in prison, a $10 million fine and at least five years of supervised release.
U.S. Magistrate Judge Kathleen L. DeSoto presided. Sentencing was set for April 24, 2025 before U.S. District Judge Dana L. Christensen. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Penny was detained pending further proceedings. Forward was released pending further proceedings.
The government alleged in court documents that the FBI’s Montana Regional Violent Crime Task Force was investigating Penny and Forward for distributing fentanyl and methamphetamine from November 2023 until September 2024. Information received indicated the defendants were moving more than 100,000 fentanyl pills and pounds of meth. During various encounters with law enforcement, the defendants possessed more than 1,000 fentanyl pills and 1.5 ounces of methamphetamine. Confidential sources stated that Penny and Forward were the biggest dealers in Missoula.
After her arrest on Sept. 3, 2024, Penny told law enforcement that she began distributing fentanyl in January 2024 to support her habit. In March 2024, she was distributing approximately 5,000 fentanyl pills per week in Missoula. In total, she admitted to distributing well over 120,000 pills over the last nine months.
Penny told law enforcement she met Forward two years prior and was purchasing fentanyl pills from him. They then began to work together, and she would cut him in on profits she received. She estimated that Forward distributed four ounces of methamphetamine every week over the last six months, for approximately six pounds of methamphetamine.
Forward told law enforcement that he would distribute 85 fentanyl pills each day. He admitted also distributing methamphetamine and fentanyl powder.
The U.S. Attorney’s Office is prosecuting the case. The FBI’s Montana Regional Violent Crime Task Force conducted the investigation.
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. For more information about Project Safe Neighborhoods, please visit Justice.gov/PSN.
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Two Maryland Men Indicted for Unemployment Insurance Fraud Scheme of More Than $1 MillionRead the Press Release
Baltimore, Maryland – A federal grand jury has returned an indictment charging two Maryland men on federal charges related to a scheme to fraudulently obtain more than $1 million in unemployment insurance benefits. On February 1, 2024, a grand jury returned a sealed indictment of Daiwor Woah-Tee, age 51, of Belcamp, Maryland, and Dekwii Woah-Tee, age 46, of Rosedale, Maryland with conspiracy to commit wire fraud, and one count of aggravated identity theft, respectively, relating to a scheme to obtain more than $1,000,000 in unemployment insurance benefits. The indictment was unsealed upon the arrest of the defendants.
The defendants had an initial appearance on December 18, 2024, in the U.S. District Court in Baltimore before U.S. Magistrate Judge Charles Austin.
The indictment was announced by Erek L. Barron, U.S. Attorney for the District of Maryland, Special Agent in Charge Troy W. Springer of the Department of Labor Office of Inspector General, Office of Investigations for the National Capital Region (DOL-OIG), and Inspector General Dr. Joseph V. Cuffari, Department Homeland Security - Office of Inspector General (DHS-OIG).
As detailed in the indictment, unemployment insurance (“UI”) was a joint state and federal program that provided monetary benefits to eligible beneficiaries. UI payments were intended to provide temporary financial assistance to lawful workers who were unemployed through no fault of their own. Beginning in or around March 2020, in response to the COVID-19 pandemic, several federal programs expanded UI eligibility and increased UI benefits, including the Pandemic Unemployment Assistance Program (PUA), Federal Pandemic Unemployment Compensation (FPUC), and the Lost Wages Assistance Program (LWAP).
In Maryland, those seeking UI benefits submitted online applications. Applicants had to answer specific questions to establish eligibility to receive UI benefits, including their name, Social Security Number (SSN), and mailing address, among other things. Applicants also had to self-certify that they met a COVID-19-related reason for being unemployed, partially employed, or unable to work. Maryland Department of Labor (MD-DOL) relied upon the information in the application to determine UI benefits eligibility. Once an application was approved, the MD-DOL typically distributed state and federal UI benefits electronically to a debit card, which claimants could use to withdraw funds and/or make purchases.
As alleged in the indictment, from March 2020 to September 2021, the defendants conspired to commit wire fraud defrauding State Workforce Agencies (SWA), including the MD-DOL, by impersonating victim individuals for the purpose of submitting fraudulent claims for unemployment insurance. The defendants used victim personal identifying information (PII), including name, date of birth, and/or SSN submit applications for UI benefits. The UI benefits obtained through the scheme was more than $1,000,000.
If convicted, the defendants face a maximum sentence of 20 years in federal prison for wire fraud conspiracy and aggravated identity theft carries a mandatory minimum sentence of two years in prison that runs consecutive to any other sentence. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
The District of Maryland Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.
For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
U.S. Attorney Barron commended the DOL-OIG, DHS-OIG, and IRS-CI for its work in the investigation. Mr. Barron thanked Assistant U.S. Attorney John D’Amico and Special Assistant U.S. Attorney Jared W. Murphy, who are prosecuting the federal case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Two California Men Charged in Largest NFT Scheme Prosecuted to DateRead the Press Release
Note: View the indictment here.
A six-count indictment was unsealed today in Los Angeles charging two California men with defrauding investors of more than $22 million in cryptocurrency through a series of digital asset project “rug pulls,” a type of fraud scheme in which the creator of a nonfungible token (NFT) or other digital asset project solicits funds from investors for the project and then abruptly abandons the project and fraudulently retains investors’ funds. Both men were arrested yesterday by Homeland Security Investigations (HSI) in Los Angeles.
According to court documents, from May 2021 to May 2024, Gabriel Hay, 23, of Beverly Hills, and Gavin Mayo, 23, of Thousand Oaks, sponsored several NFT and other digital asset projects and undertook promotional activities in support of those projects. Hay and Mayo allegedly made or caused others to make materially false and misleading statements regarding the digital asset projects being launched and provided false and misleading project “roadmaps” detailing plans for the NFTs or other digital asset projects after their launch that the sponsors never intended to fulfill. For example, the indictment alleges that in promoting the Vault of Gems NFT project, Hay and Mayo falsely claimed that the project would be the “first NFT project to be pegged to a hard asset.” However, instead of pursuing the Vault of Gems project or others as they had represented they would, Hay and Mayo allegedly abandoned the projects after collecting millions in funds from investors.
“Gabriel Hay and Gavin Mayo allegedly defrauded investors in digital asset projects of tens of millions of dollars and threatened an individual who attempted to expose their roles in these fraudulent schemes,” said Principal Deputy Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Fraudsters take advantage of new technologies and financial products to steal investors’ hard-earned money. The department is committed to protecting investors and will continue to work with our law enforcement partners to root out fraud involving cryptocurrency and other digital assets and bring offenders to justice.”
“For three years, Hay and Mayo apparently lied to their investors in order to defraud them out of millions of dollars,” said HSI Executive Associate Director Katrina W. Berger. “Such technological fraud schemes cost investors millions of dollars every year. Just because such crimes aren’t violent does not mean they are victimless. HSI will continue to investigate, disrupt, and dismantle such cryptocurrency fraud networks.”
“Whenever a new investment trend occurs, scammers are sure to follow,” said U.S. Attorney Martin Estrada for the Central District of California. “My office and our law enforcement partners will continue our efforts to protect consumers and punish wrongdoers involved in crypto fraud.”
Hay, Mayo, and others allegedly used these tactics with a variety of digital asset projects, including Vault of Gems, Faceless, Sinful Souls, Clout Coin, Dirty Dogs, Uncovered, MoonPortal, Squiggles, and Roost Coin. Hay and Mayo also allegedly used a variety of means to conceal their involvement in the fraudulent projects by falsely identifying other individuals or causing other individuals to be falsely identified as owners of the projects. When one project manager on the Faceless NFT project exposed Hay and Mayo as being behind that project, Hay and Mayo allegedly embarked on a harassment campaign against the project manager, sending or causing the sending of messages to the project manager and his parents for the purpose of intimidating him and his family and causing them great emotional distress.
Hay and Mayo are each charged with one count of conspiracy to commit wire fraud, two counts of wire fraud, and one count of stalking. If convicted, they each face a maximum penalty of 20 years in prison on each of the conspiracy and wire fraud counts and a maximum penalty of five years on the stalking count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
HSI Baltimore is investigating the case.
Trial Attorneys Tian Huang and Tamara Livshiz of the Criminal Division’s Fraud Section, both members of the National Cryptocurrency Enforcement Team (NCET), and Assistant U.S. Attorney Maxwell Coll for the Central District of California are prosecuting the case.
The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.
If you believe that you are a victim of any of the scams listed above or other scams involving the defendants, please email [email protected].
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Arizonans Plead Guilty to Fraud Targeting AHCCCSRead the Press Release
PHOENIX, Ariz. – CoEric Riley, 38, of Mesa, pleaded guilty on Tuesday to Healthcare Fraud. His co-defendant, Britney Gooch, 37, of Mesa, also pleaded guilty to Healthcare Fraud on November 21, 2024. Sentencing for Riley and Gooch is scheduled for February 21, 2025, before United States District Judge Krissa M. Lanham.
Riley and Gooch admitted that they defrauded the Arizona Health Care Cost Containment System (AHCCCS), Arizona’s Medicaid agency, through their company New Horizons Behavioral Health, a behavioral health clinic in Mesa, Arizona. They further admitted that through New Horizons, they exploited AHCCCS’s American Indian Health Program (AIHP) by falsely billing for services that were not provided to AIHP patients. As a result of the fraudulent billing submissions, Riley and Gooch obtained approximately $3.3 million in illegitimate proceeds from AHCCCS.
A conviction for Healthcare Fraud carries a maximum penalty of 10 years in prison and a fine of up to $250,000, or both.
The Federal Bureau of Investigation – Phoenix Division conducted the investigation in this case. The United States Attorney’s Office, District of Arizona, Phoenix, is handling the prosecution.
CASE NUMBER: CR-24-01794-PHX-KML
RELEASE NUMBER: 2024-179_Riley and Gooch# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.Twin Drug Traffickers Each Receive Life SentencesRead the Press Release
Just 12 months after an Amarillo methamphetamine trafficker received a life sentence, his twin brother was sentenced to life in prison for similar crimes, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
Landis Charles Barrow, 46, was charged in February 2023. After a six-day trial, a jury convicted Mr. Barrow of one count of conspiracy to distribute controlled substances, three counts of distribution of methamphetamine, one count of possession of intent to distribute methamphetamine, one count of possession with intent to distribute cocaine, and one count of possession of a firearm in furtherance of a drug trafficking crime in August. Landis Barrow was sentenced Thursday by U.S. District Judge Matthew J. Kacsmaryk.
His twin brother, Mandis Barrow, was convicted at a separate trial of one count of conspiracy to distribute methamphetamine, one count of distribution methamphetamine, and one count of possession with intent to distribute methamphetamine. He was sentenced in January by the same judge.
According to evidence presented at Landis’ trial, Landis sold, or facilitated the sale, of large quantities of methamphetamine to a confidential source on three occasions in late 2022.
During a February 2023 search of Landis’ residence, DEA agents discovered pound quantities of methamphetamine, two large baggies of cocaine, drug scales and paraphernalia, $7,000 in cash, a firearm, and a drug ledger with Landis’ name written in it. During a call made from the Randall County Detention Center, he admitted to being part of a criminal organization.
During his trial testimony, Landis admitted to distributing approximately 1,000 kilograms (2,200 pounds) of controlled substances for a Mexican Cartel. Landis admitted to running a “crew” of individuals, and that he was a “gangster.” Landis admitted to carrying a firearm with him at all times.
Court documents and trial testimony reflect that Landis Barrow is a suspect in a murder investigation involving his alleged retaliation for the theft of a large quantity of drugs and money that occurred in November 2022 at second residence associated with him.
During the sentencing hearing, Judge Kacsmaryk ruled that Landis had, in fact, made credible threats of violence to shoot or harm people he believed were involved in the robbery. Judge Kacsmaryk further found that Landis had perjured himself during his trial testimony.
The Drug Enforcement Administration’s Dallas Field Division – Amarillo Resident Agency conducted the investigation with the assistance of the Potter County Sheriff’s Office, the Randall County Sheriff’s Office, the Amarillo Police Department, and the Texas Department of Public Safety. Assistant U.S. Attorneys Anna Marie Bell and Sean Long prosecuted the case.
Tolleson Man Indicted for Threats to the President-Elect and Others and for Firearms OffensesRead the Press Release
PHOENIX, Ariz. – On Tuesday, a federal grand jury indicted Manuel Tamayo-Torres, of Tolleson, on four counts of False Statement During the Purchase of a Firearm, one count of Threats Against the President and Successors to the Presidency, one count of Interstate Threatening Communications, and one count of Possession of a Firearm by a Person Subject to an Order of Protection.
According to the complaint, Tamayo-Torres was convicted in 2003 in California for Assault with Great Bodily Injury, a felony. In July 2023 a court in Arizona issued an order of protection against him, in effect for two years, which restrains him from harassing, stalking or threatening his ex-wife. Both the conviction and the order of protection prohibited his possession of firearms. Despite this, in November 2023, Tamayo-Torres attempted to purchase firearms on two separate occasions, falsely stating he had not been convicted of a felony and was not subject to an order of protection.
The complaint also alleges that in November 2024 Tamayo-Torres made postings on a social media platform threating to harm the President-elect of the United States, including that he was going to kill the President-elect and do violence to his family. In at least one of his posts, Tamayo-Torres displayed a firearm in the context of making threatening statements. That firearm, as well as others, were later located in his home.
A conviction for any of the following: False Statement During the Purchase of a Firearm, Threats Against the President and Successors to the Presidency, or Interstate Threatening Communications carries a maximum penalty of five years in prison and a fine of up to $250,000, or both. A conviction for Possession of a Firearm by a Prohibited Person carries a maximum penalty of 15 years in prison and a fine of up to $250,000, or both.
Tamayo-Torres was previously arrested on the complaint in San Diego on November 25, 2024, and he remains detained pending a detention hearing in the District of Arizona. An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, Phoenix Field Division, and the United States Secret Service, Phoenix Field Office, are conducting the investigation in this case, with valuable assistance provided by the United States Marshals Service and the United States Attorney’s Office in the Southern District of California. The United States Attorney’s Office, District of Arizona, Phoenix, is handling the prosecution.
CASE NUMBER: CR-24-2063-PHX-SMB
RELEASE NUMBER: 2024-180_Tamayo-Torres# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.Three Twin Cities Men Indicted in Narcotics Fraud ConspiracyRead the Press Release
MINNEAPOLIS – Three individuals have been charged in a conspiracy to acquire scheduled controlled substances by fraud, announced U.S. Attorney Andrew M. Luger.According to court documents, Oscar Becerra-Ruiz, 21, Jasper William Johnson, 19, and Rayjaun Keon Varner, 23, knowingly conspired with each other to obtain promethazine with codeine, a controlled substance. From approximately December 2022 and continuing through on or about August 3, 2023, the defendants used paid internet-based record searches to secure identifying information of registered physicians practicing in Minnesota and Wisconsin. Johnson then used this information to illegally access the Drug Enforcement Administration’s Registrant Information Consolidated System (RICS), a government-run database designed to track physician registration, compliance, and reporting, and to prevent the diversion of controlled substances from legitimate medical sources to the illicit black market.
The indictment alleges that after gaining access to multiple physicians’ RICS accounts, Johnson changed the physicians’ valid contact information in the system to phone numbers, email addresses, and physical addresses he and his co-conspirators maintained and controlled. The defendants then used the stolen and compromised information to set up physician customer accounts with several online pharmaceutical wholesalers. Using pre-paid debit cards and peer-to-peer payment accounts also registered in the physicians’ names, the defendants unlawfully placed dozens of orders with the pharmaceutical vendors for controlled substances, including promethazine with codeine, a prescription-strength cough syrup containing the opioid codeine.
To date, the investigation, which remains ongoing, has not uncovered any evidence of patients or patient information having been compromised by the defendants.
Becerra-Ruiz, Johnson, and Varner were each charged with conspiracy to obtain controlled substances by fraud and attempt to obtain controlled substances by fraud. Johnson was charged with an additional 11 counts of wire fraud, 3 counts of accessing a protected computer in furtherance of fraud, and 4 counts of aggravated identity theft. The defendants will be arraigned at a later date.
This case is the result of an investigation conducted by the Drug Enforcement Administration, with assistance from the U.S. Postal Inspection Service and the U.S. Secret Service.
Assistant U.S. Attorneys Lauren O. Roso and Allen A. Slaughter are 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.
Three El Dorado Men sentenced to Federal Prison for Possessing Firearms Converted into Machine GunsRead the Press Release
EL DORADO, ARKANSAS – Three El Dorado Men have been sentenced in the United States District Court for the Western District of Arkansas, El Dorado Division, for Possession of Machineguns in violation of federal law.
According to court documents, on April 24, 2022, Officers with the El Dorado Police Department executed a search warrant at an apartment complex in the El Dorado Area to locate a wanted individual Mark Oliver Wade, age 23, of El Dorado, Arkansas. A search of the residence uncovered one stolen firearm and one firearm was converted to fire in fully automatic mode. United States District Court Judge Susan O. Hickey sentenced Wade to thirty- three (33) months in federal prison with three years of supervised release to follow.
On March 29, 2023, Officers with the El Dorado Police Department initiated a traffic stop on a vehicle in El Dorado, Arkansas. Markayleo Alonzo James, age 22, of El Dorado, Arkansas, was encountered by law enforcement during this incident. Officers found that James was in possession of a firearm that was converted to fire in fully automatic mode. United States District Court Judge Susan O. Hickey sentenced James to twenty- four (24) months in federal prison with three years of supervised release to follow.
Additionally on May 23, 2023, Officers with the El Dorado Police Department initiated a traffic stop on another vehicle in El Dorado, Arkansas. Inshiqaq Qalam Qiyama II, age 23, of El Dorado, Arkansas, was encountered by law enforcement during this incident. Officers found that Qiyama was in possession of a firearm that was converted to fire in fully automatic mode. United States District Court Judge Susan O. Hickey sentenced Qiyama to twenty- seven (27) months in federal prison with three years of supervised release to follow.
“Glock switches and other automatic weapon conversion kits create a significant danger to both law enforcement officers and innocent civilians,” said United States Attorney David Clay Fowlkes. “These conversion devices are simple to make and sell but are capable of changing ordinary handguns and rifles into incredibly dangerous fully automatic weapons. These weapons are hard to control and can cause massive property damage and potential loss of life. With these weapons, even civilians in their homes are in danger from the numerous, uncontrolled rounds fired using conversion kits. These cases send an important message to our communities: we will continue to investigate and prosecute individuals in possession of illegal automatic weapons and conversion kits. Keeping our communities safe is the most important part of our mission in Western Arkansas.”
The El Dorado Police Department’s CID/CAD divisions and the Federal Bureau of Investigation investigated the case.
Assistant U.S. Attorneys Briana Robbins and Trent Daniels prosecuted the cases.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov.
The U.S. Attorney’s Office Secures an Agreement Resolving ADA Complaint Involving A New Jersey Medical PracticeRead the Press Release
Agreement Removes Discriminatory Barriers to Individuals with Vision and Hearing Disabilities
NEWARK, N.J. – The U.S. Attorney’s Office for the District of New Jersey secured a settlement agreement to resolve allegations that Advanced ENT & Allergy discriminated against a prospective patient who is deaf and has low vision in violation of the Americans with Disabilities Act (ADA). Following an investigation, the U.S. Attorney’s Office found that Advanced ENT & Allergy, which has eleven offices in southern New Jersey, violated the ADA by refusing to provide in-person sign language interpretation services where doing so was necessary for deaf and low vision patients to effectively communicate. Instead, the practice relied exclusively on screen-based, remote interpretation, even when those services could not accommodate patients and prospective patients who could not effectively see a screen due to their vision disability. These findings are based, in part, on evidence gathered by the U.S. Department of Justice Fair Housing Testing Program.
Under the settlement agreement, Advanced ENT & Allergy will, among other things, implement a non-discrimination policy to ensure that individuals with disabilities are afforded full and equal opportunities to its benefits and services. The medical practice will also ensure that it will provide in-person interpretation services to patients and prospective patients with disabilities who require that service to effectively communicate. Advanced ENT & Allergy will also provide mandatory ADA training to its employees. It is anticipated that Advanced ENT & Allergy will be acquired by ENT and Allergy Associates, LLP effective January 1st, and will do business under that new name. ENT and Allergy Associates had no role in conduct at issue in the complaint.
The ADA prohibits places of public accommodation, such as Advanced ENT & Allergy, from discriminating on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations.
Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office’s Civil Rights Division at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint.
Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD).
The government is represented by Assistant U.S. Attorney Emily B. Goldberg of the U.S. Attorney’s Office’s Civil Rights Division.
advancedentallergy.settlement.pdfTexas title company employee admits to orchestrating $350,000 real estate wire fraud schemeRead the Press Release
McALLEN, Texas – A 55-year-old McAllen resident has pleaded guilty to conspiracy to commit wire fraud, announced U.S. Attorney Alamdar S. Hamdani.
Mayela Saby Cantu admitted she knowingly participated in a scheme that used falsified lien payoff statements, fraudulent warranty deeds and deceptive emails to mislead lenders, title companies and property buyers.
From November 2020 until her arrest, Cantu defrauded buyers and lenders in multiple property transactions while working at Sierra Title in McAllen. Using her position of trust, she facilitated closings backed by falsified documents. In one notable case, she directed others to create a fraudulent email address resembling that of a legitimate lienholder. Cantu then used the fake account to send false payoff amounts via interstate wires, leading a title company to improperly disburse more than $350,000.
Cantu facilitated additional fraudulent property transactions, including arranging closing on properties that had already been sold and accepting undisclosed cash payments. By concealing the true nature of these deals, she caused significant financial harm to the affected parties.
Chief U.S. District Judge Randy Crane will impose sentencing March 3, 2025. At that time, Cantu faces up to 20 years in federal prison and a possible $250,000 maximum fine.
She was permitted to remain on bond pending that hearing.
The FBI, McAllen Police Department and Texas Department of Insurance conducted the investigation. Assistant U.S. Attorney Eric D. Flores is prosecuting the case.
Syracuse Man Pleads Guilty to Distribution and Possession of Child PornographyRead the Press Release
SYRACUSE, NEW YORK – David Hullihen, age 41, of Syracuse, pled guilty today to ten counts of receipt of child pornography. United States Attorney Carla B. Freedman, and Craig L. Tremaroli, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI) made the announcement.
As part of his guilty plea, Hullihen admitted that he sent multiple videos depicting child sexual abuse material to another person over the application Wire. Hullihen also possessed child sexual abuse material on his cell phone. Hullihen is a registered sex offender with two previous convictions for child pornography offenses in New York.
The offenses to which Hullihen pled guilty carry a mandatory minimum sentence of 15 years, with a maximum of 40 years imprisonment. A defendant’s sentence is imposed by a judge based on the statute the defendant violated, the United States Sentencing Guidelines, and other factors. However, if Chief United States District Judge Brenda K. Sannes accepts the parties’ agreed-upon disposition at sentencing on April 23, 2025, Hullihen will receive an prison term of 235 months. Hullihen’s sentence must also include a post-imprisonment term of supervised release of between five years and life, a fine of up to $250,000.00, restitution to the children whose images he distributed and possessed, and he will be required to register as a sex offender upon his release from prison.
This case was investigated by the FBI’s Albany Division Child Exploitation and Human Trafficking Task Force, the Tiffin, Ohio Police Department, the Syracuse, New York Police Department, and the New York State Police. Special Assistant U.S. Attorney Paul Tuck prosecuted Hullihen as part of Project Safe Childhood.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is 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 https://www.justice.gov/psc.
Spokane Man Sentenced to 15 Years in Federal Prison for Possession of Child PornographyRead the Press Release
Spokane, Washington – On December 11, 2024, United States District Judge Thomas O. Rice sentenced Nathan Roy Stout, age 39, from Spokane, Washington, to 15 years in federal prison for Possession of Child Pornography. Judge Rice also imposed a lifetime of supervised release and restitution of $9,000.
According to court documents and information presented at the sentencing hearing, in January 2023, Stout was living in the Residential Reentry Center (RRC) in Spokane Washington following a 2018 conviction for distributing child pornography. While at the RRC, a staff member discovered that child pornography was stored on Stout’s cell phone. Stout later told his case manager at the RRC that he had been downloading child pornography and then deleting it.
An FBI agent conducted an extraction of Stout’s phone and located 116 files of young children being sexually abused. The agent also located multiple file cleaners, which are designed to erase files, on Stout’s cell phone.
“Mr. Stout downloaded child exploitation material, even while serving a sentence for a similar crime,” stated United States Attorney Vanessa Waldref. “I commend my team of prosecutors and investigators who dedicate their careers to protecting the most vulnerable members of our communities. Every case we investigate and prosecute – every victim identified and rescued – brings some level of justice for those who suffer the tragic effects of child abuse and exploitation.”
“Mr. Stout continued to download and view child pornography while on probation following a sentence for the same offense.” said Gregory L. Austin, Acting Special Agent in Charge of the FBI’s Seattle field office. “Protecting and advocating for children is one of the most noble tasks entrusted to the FBI. I especially want to thank the investigators who work these cases on behalf of children, despite how troubling the facts may be.”
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 U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
This case was investigated by the FBI. This case was prosecuted by Assistant United States Attorney Rebecca R. Perez.
2:24-cr-00021-TOR
Sixteen Cardiology Practices to Pay a Total of $17.7M to Resolve False Claims Act Allegations Concerning Inflated Medicare ReimbursementsRead the Press Release
Sixteen separate cardiology practices and associated physicians, located across 12 states, have agreed to pay amounts totaling $17,761,564 to resolve allegations that they each violated the False Claims Act by overbilling Medicare for diagnostic radiopharmaceuticals.
Diagnostic radiopharmaceuticals are radioisotopes bound to biological molecules that target specific organs, tissues or cells within the human body and are used to diagnose and, in some cases, treat certain cancers and diseases. In 13 states and the District of Columbia, Medicare Part B reimburses healthcare providers for diagnostic radiopharmaceuticals based on the provider’s acquisition cost. In those jurisdictions, Medicare’s contractors have published guidance explaining the reimbursement methodology and providers’ obligation to accurately report their invoice costs for diagnostic radiopharmaceuticals. The government alleged that the settling cardiology practices regularly reported inflated acquisition costs to Medicare for these drugs. In each of the settlements, the conduct occurred for at least a year, and in some instances, the conduct extended over a period of more than 10 years.
“The financial stability of federal healthcare programs depends upon providers complying with applicable billing rules,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are committed to ensuring that Medicare funds are expended appropriately and to pursuing those who knowingly fail to do so.”
The settling medical practices and associated physicians have agreed to pay the following amounts:
- Western Kentucky Heart & Lung Associates PSC and Mohammed Kazimuddin ($6,750,000)
- Heart Clinic of Paris P.A. and Arjumand Hashmi ($2,600,000)
- Scranton Cardiovascular Physician Services LLC ($2,369,111)
- Shannon Clinic ($996,856)
- Edward W. Leahey M.D. Professional Association and Edward Leahey ($894,679)
- Metropolitan Cardiovascular Consultants LLC and Ayim Djamson ($846,888)
- Cardiology Center of New Jersey LLC, Mario Criscito, Frank Iacovone, and Sameer Kaul ($740,000)
- Clovis Cardiology Associates LLC and Mahamadu Fuseini ($600,000)
- Family Medical Specialty Clinic PLLC, Melecio Abordo, and June Abadilla ($409,594)
- James R. Higgins M.D. Inc. and James Higgins ($395,537)
- TrustCare Health LLC ($279,407)
- Taj Medical Inc. ($240,000)
- White River Diagnostic Clinic PLC, Margaret Kuykendall, and Seth Barnes ($234,490)
- Veinguard Heart & Vascular Center P.C. and Fareeha Khan ($195,000)
- Boulder Medical Center PC ($160,000)
- Wellspring Cardiac Care P.A. ($50,000).
“Practices and providers who overcharge the government and fail to return overpayments compromise our healthcare programs,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “When people see the wrong and report it, we have the tool we need to put a stop to this type of irresponsible conduct. So, I applaud the whistleblowers who came forward in this case.”
“These practitioners overbilled the Medicare program by grossly exaggerating the acquisition costs of drugs used in diagnostic imaging of the heart,” said U.S. Attorney Michael A. Bennett for the Western District of Kentucky. “This office is committed to protecting our federal health care programs, and we will hold accountable anyone who seeks to exploit them.”
“Medicare providers are required to be honest and accurate in the costs they report for reimbursement,” said Special Agent in Charge Maureen Dixon of the Department of Health and Human Services Office of the Inspector General (HHS-OIG). “HHS-OIG will continue to work with our law enforcement partners to investigate alleged false claims act violations and ensure the integrity of the Medicare program. ”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by relators Jasjit Walia and Preet Randhawa in the District of Columbia and the Western District of Kentucky. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The whistleblowers will receive a total of more than $2.7 million from the settlements announced today.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorneys’ Offices for the District of Columbia and Western District of Kentucky, with assistance from the HHS Office of Counsel to the Inspector General and Office of Investigations.
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare 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 James Nealon of the Justice Department’s Civil Division, Assistant U.S. Attorneys Ben Schecter and Matt Weyand for the Western District of Kentucky and Assistant U.S. Attorneys John Truong and Stephen DeGenaro for the District of Columbia handled the matter.
The claims resolved by the settlements are allegations only. There has been no determination of liability.
View the Heart Clinic of Paris settlement agreement here.
View the Leahey settlement agreement here.
View the Scranton settlement agreement here.
View the Metropolitan settlement agreement here.
View the Shannon Clinic settlement agreement here.
View the Family Medical Specialty Clinic settlement agreement here.
View the Taj Medical settlement agreement here.
View the TrustCare settlement agreement here.
View the Veinguard settlement agreement here.
View the Wellspring settlement agreement here.
View the White River settlement agreement here.
View the WKHL settlement agreement here.
View the Boulder Medical Center settlement agreement here.
View the CCNJ settlement agreement here.
View the Clovis settlement agreement here.
View the Higgins settlement agreement here.
Sixteen Cardiology Practices to Pay a Total of $17.7M to Resolve False Claims Act Allegations Concerning Inflated Medicare ReimbursementsRead the Press Release
Sixteen separate cardiology practices and associated physicians, located across 12 states, have agreed to pay amounts totaling $17,761,564 to resolve allegations that they each violated the False Claims Act by overbilling Medicare for diagnostic radiopharmaceuticals.
Diagnostic radiopharmaceuticals are radioisotopes bound to biological molecules that target specific organs, tissues or cells within the human body and are used to diagnose and, in some cases, treat certain cancers and diseases. In 13 states and the District of Columbia, Medicare Part B reimburses healthcare providers for diagnostic radiopharmaceuticals based on the provider’s acquisition cost. In those jurisdictions, Medicare’s contractors have published guidance explaining the reimbursement methodology and providers’ obligation to accurately report their invoice costs for diagnostic radiopharmaceuticals. The government alleged that the settling cardiology practices regularly reported inflated acquisition costs to Medicare for these drugs. In each of the settlements, the conduct occurred for at least a year, and in some instances, the conduct extended over a period of more than 10 years.
“The financial stability of federal healthcare programs depends upon providers complying with applicable billing rules,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are committed to ensuring that Medicare funds are expended appropriately and to pursuing those who knowingly fail to do so.”
The settling medical practices and associated physicians have agreed to pay the following amounts:
- Western Kentucky Heart & Lung Associates PSC and Mohammed Kazimuddin ($6,750,000)
- Heart Clinic of Paris P.A. and Arjumand Hashmi ($2,600,000)
- Scranton Cardiovascular Physician Services LLC ($2,369,111)
- Shannon Clinic ($996,856)
- Edward W. Leahey M.D. Professional Association and Edward Leahey ($894,679)
- Metropolitan Cardiovascular Consultants LLC and Ayim Djamson ($846,888)
- Cardiology Center of New Jersey LLC, Mario Criscito, Frank Iacovone, and Sameer Kaul ($740,000)
- Clovis Cardiology Associates LLC and Mahamadu Fuseini ($600,000)
- Family Medical Specialty Clinic PLLC, Melecio Abordo, and June Abadilla ($409,594)
- James R. Higgins M.D. Inc. and James Higgins ($395,537)
- TrustCare Health LLC ($279,407)
- Taj Medical Inc. ($240,000)
- White River Diagnostic Clinic PLC, Margaret Kuykendall, and Seth Barnes ($234,490)
- Veinguard Heart & Vascular Center P.C. and Fareeha Khan ($195,000)
- Boulder Medical Center PC ($160,000)
- Wellspring Cardiac Care P.A. ($50,000).
“Practices and providers who overcharge the government and fail to return overpayments compromise our healthcare programs,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “When people see the wrong and report it, we have the tool we need to put a stop to this type of irresponsible conduct. So, I applaud the whistleblowers who came forward in this case.”
“These practitioners overbilled the Medicare program by grossly exaggerating the acquisition costs of drugs used in diagnostic imaging of the heart,” said U.S. Attorney Michael A. Bennett for the Western District of Kentucky. “This office is committed to protecting our federal health care programs, and we will hold accountable anyone who seeks to exploit them.”
“Medicare providers are required to be honest and accurate in the costs they report for reimbursement,” said Special Agent in Charge Maureen Dixon of the Department of Health and Human Services Office of the Inspector General (HHS-OIG). “HHS-OIG will continue to work with our law enforcement partners to investigate alleged false claims act violations and ensure the integrity of the Medicare program. ”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by relators Jasjit Walia and Preet Randhawa in the District of Columbia and the Western District of Kentucky. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The whistleblowers will receive a total of more than $2.7 million from the settlements announced today.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorneys’ Offices for the District of Columbia and Western District of Kentucky, with assistance from the HHS Office of Counsel to the Inspector General and Office of Investigations.
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare 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 James Nealon of the Justice Department’s Civil Division, Assistant U.S. Attorneys Ben Schecter and Matt Weyand for the Western District of Kentucky and Assistant U.S. Attorneys John Truong and Stephen DeGenaro for the District of Columbia handled the matter.
The claims resolved by the settlements are allegations only. There has been no determination of liability.
View the Heart Clinic of Paris settlement agreement here.
View the Leahey settlement agreement here.
View the Scranton settlement agreement here.
View the Metropolitan settlement agreement here.
View the Shannon Clinic settlement agreement here.
View the Family Medical Specialty Clinic settlement agreement here.
View the Taj Medical settlement agreement here.
View the TrustCare settlement agreement here.
View the Veinguard settlement agreement here.
View the Wellspring settlement agreement here.
View the White River settlement agreement here.
View the WKHL settlement agreement here.
View the Boulder Medical Center settlement agreement here.
View the CCNJ settlement agreement here.
View the Clovis settlement agreement here.
View the Higgins settlement agreement here.
Roseville Man Sentenced to 70 Months in Prison for Being A Felon in Possession of AmmunitionRead the Press Release
SACRAMENTO, Calif. — Arnes Krajinic, 33, of Roseville, was sentenced Thursday by United States District Judge Daniel J. Calabretta to 5 years and 10 months in prison for being a felon in possession of ammunition, United States Attorney Phillip A. Talbert announced.
According to court documents, law enforcement began investigating Krajinic in January 2023 because he was advertising fentanyl and firearms for sale via Instagram. On January 17, 2023, law enforcement arrested Krajinic and found him in possession of approximately 95 grams of fentanyl powder, miscellaneous prescription pills, over $7,000 in cash, a digital scale, and a privately manufactured 9mm firearm that did not have a serial number and was loaded with ammunition. Krajinic was prohibited from possessing firearms and ammunition because he had previously been convicted of multiple felonies, including for robbery, possession of controlled substances while armed, possession of a concealed weapon in a vehicle, felon in possession of a firearm, and possession of controlled substances for sale.
This case was the product of an investigation by the U.S. Marshals Service, the ATF, and the Placer County Special Investigations Unit, with assistance from the Roseville Police Department. Assistant United States Attorney Emily G. Sauvageau prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results. For more information about Project Safe Neighborhoods, please visit Justice.gov/PSN.
Registered Sex Offender sentenced to 10 years in prison for possession of images of child sexual abuseRead the Press Release
Seattle –A 53-year-old Des Moines, Washington, man, who is a registered sex offender, was sentenced today to ten years in prison for possession of images of child sexual abuse, announced U.S. Attorney Tessa M. Gorman. Edward James Creed was on Washington State Department of Corrections supervision when he was found to have unapproved electronic devices in his residence and images of child sexual abuse on his phone. At the sentencing hearing U.S. District Judge Kymberly K. Evanson said, “creating a market for this material perpetuates the horrific abuse of children.”
According to records filed in the case, Creed previously served more than ten years in state custody for a 2008 Kitsap County conviction for rape of a child. He was released in 2017 but was returned to custody for a time in 2019. In March of 2024, community corrections review of his phone revealed that he had collected seventy images of child sexual abuse. After his arrest, a search of his room at the sex offender residence revealed that he had a number of unapproved electronic devices.
In asking for the ten year sentence Assistant United States Attorney Cecelia Gregson wrote to the court, “In light of the defendant’s demonstrated sexualized interest in minors, it bears repeating that it is exceedingly troubling Creed successfully completed a sexual deviancy treatment program in prison and after two relatively short periods of time in the community was caught seeking out (2020) or successfully obtaining (2024) child sexual abuse material and unlawfully accessing the internet to do so…. He has proven history of deceiving those tasked with monitoring him in the community and has demonstrated a significant commitment to do so.”
Judge Evanson ordered Creed to be on 15 years of supervised release to follow prison.
The case was investigated by Homeland Security Investigations (HSI) and the Washington State Department of Corrections.
The case was prosecuted by Assistant United States Attorney Cecelia Gregson.
This case was also brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the U.S. Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.
Rapid Health Agrees to Pay $8.2M for Allegedly Billing Medicare for Over-the-Counter COVID-19 Tests That Were Not Provided to BeneficiariesRead the Press Release
Covid Test DMV LLC, doing business as Rapid Health (Rapid Health), a pharmacy located in Los Angeles, has agreed to pay the United States $8,242,860 to resolve allegations that it violated the False Claims Act (FCA) by knowingly submitting or causing the submission of false claims to Medicare for over-the-counter (OTC) Covid-19 tests that were not provided to Medicare beneficiaries.
Between April 2022 and May 2023, Rapid Health distributed OTC Covid-19 tests in connection with the Centers for Medicare & Medicaid Services (CMS) OTC Covid-19 Test Demonstration Project (Demonstration Project). During the Demonstration Project, Medicare Part B beneficiaries could request OTC Covid-19 tests from participating providers, and CMS would reimburse those providers for up to eight OTC Covid-19 tests per Medicare Part B beneficiary per month at a fixed rate of $12 per test.
The settlement announced today resolves allegations that Rapid Health knowingly submitted or caused the submission of claims to Medicare for OTC Covid-19 tests that Rapid Health never provided to Medicare beneficiaries. Medicare patients could order OTC Covid-19 tests from Rapid Health during the Demonstration Project through Rapid Health’s website. When Rapid Health received an order, it was supposed to process the order, generate a shipping label, and send the OTC Covid-19 test to the beneficiary. The United States alleged that issues with Rapid Health’s processing procedures caused Rapid Health to bill orders to Medicare without shipping the test to the beneficiary, and that although Rapid Health was aware of these issues it nevertheless continued to bill Medicare for tests that were not shipped.
“The Demonstration Project was designed to increase the availability of OTC Covid-19 tests to Medicare beneficiaries in an unprecedented time of need,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Providers that knowingly billed for tests that were never given to patients failed to support the goals of the project and defrauded the American taxpayers.”
“This outcome serves as a reminder of our unwavering commitment to combat health care fraud and investigate those who allegedly attempt to exploit and defraud Medicare and other federally funded health care programs,” said Special Agent in Charge Maureen Dixon of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “With our local, state and federal partners, HHS-OIG will continue to work aggressively to ensure the dependability and the integrity of the Medicare program.”
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and HHS-OIG.
Trial Attorney Lindsay DeFrancesco of the Civil Division’s Fraud Section handled the matter.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across the federal government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international actors committing civil and criminal fraud and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit www.justice.gov/coronavirus.
Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
Port St. Lucie Firearms Dealer Pleads Guilty to Failing to Keep Proper Records of SalesRead the Press Release
MIAMI – On Dec. 18, Michael John Pellicione, 76, the owner of a Port St. Lucie, Fla., gun shop, who operated out of his residence, pleaded guilty to the five-count indictment for selling several firearms “off the books” in violation of 18 U.S.C. § 922(b)(5), which penalizes the failure of a firearms dealer to keep a proper record of sales.
Pellicione, a federal firearms licensee (FFL), failed to enter the sale of five firearms into his acquisition and disposition (A&D) record. Federal law requires an FFL to record, in the A&D book, all of the firearms that the FFL receives or makes, and then indicate where each of those firearms are – whether they are still in the FFL’s inventory or where they went if they were sold or transferred. Additionally, the A&D book must include the type of firearm, the make, model, caliber, and serial number, the date and from whom the firearm was received and that person's address, as well as the name, date, and address of the person to whom the firearm was sold or transferred.
A sentencing date has not yet been scheduled in this matter. At sentencing, Pellicione faces up to five years’ imprisonment. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Markenzy Lapointe, U. S. Attorney for the Southern District of Florida, Special Agent in Charge Anthony Salisbury of Homeland Security Investigations (HSI), Miami, and Special Agent in Charge Christopher A. Robinson of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Miami Field Division, made the announcement.
HSI Fort Pierce and ATF Fort Pierce investigated this case. Managing Assistant U.S. Attorney Carmen Lineberger is prosecuting this matter.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov, under case number 24-cr-14055.
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Physician Resolves Allegations of Improper Prescribing Practices Involving Controlled SubstancesRead the Press Release
BOSTON – A family medicine practitioner based out of Three Rivers, Mass. has agreed to pay $220,000 in civil penalties to settle allegations that he violated the Controlled Substances Act by prescribing controlled substances outside the usual course of professional practice.
As part of the settlement agreement, Dr. Stephen R. Holuk, 75, of Three Rivers, admitted that he regularly prescribed schedule II-controlled substances for his patients. For four of his patients, Dr. Holuk prescribed opioids in combination with benzodiazepines and muscle relaxers. During the covered period, Dr. Holuk wrote 280 prescriptions for opioids for these four patients alone, while also prescribing them benzodiazepines and muscle relaxers. Moreover, Dr. Holuk prescribed opioids for his patients without consistently conducting functional pain assessments or opioid risk assessments. He also rarely checked the Massachusetts Prescription Awareness Tool (formerly the Prescription Drug Monitoring Program), before prescribing his patients schedule II controlled substances, as required by Massachusetts law.
Under the Controlled Substances Act physicians, and other prescribers registered with the Drug Enforcement Administration, may only issue prescriptions for a legitimate medical purpose and in the usual course of professional practice.
“When doctors prescribe addictive opioids outside the scope of proper professional practice, they put patients at risk of overdose and undermine efforts to address the opioid crisis,” said United States Attorney Joshua S. Levy. “Our office and our federal law enforcement partners will continue to hold medical providers accountable for irresponsible prescribing, especially when it threatens the safety of our communities.”
“This settlement resolves allegations that Dr. Stephen Holuk abused his prescribing privileges,” said Jodi Cohen, Special Agent in Charge of the FBI’s Boston Division. “Doctors willing to illegally distribute and prescribe opioids only deepen the drug epidemic that continues to ravage our area. We encourage the public to report any information about prescription abuse to us or our law enforcement partners.”
“Medical practitioners who prescribe controlled substances have an obligation to do so responsibly and for legitimate medical purposes,” said Special Agent in Charge Roberto Coviello of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “We will continue to investigate allegations of dangerous and irresponsible prescribing as we work to protect patients from such conduct.”
U.S. Attorney Levy, FBI SAC Cohen and HHS-OIG SAC Coviello made the announcement today. Assistant U.S. Attorney Lindsey Ross of the Affirmative Civil Enforcement Unit handled the case.
Orlando Man Pleads Guilty to Distributing over Nine Pounds of MethamphetamineRead the Press Release
Ocala, Florida – United States Attorney Roger B. Handberg announces that Desean Williams (38, Orlando) has pleaded guilty to distribution and possession with intent to distribute 50 grams or more of methamphetamine. Williams faces a minimum penalty of 10 years, up to life, in federal prison. A sentencing date has not yet been scheduled.
According to the plea agreement, on January 31, 2024, Williams distributed approximately 4.5 kilograms of methamphetamine to another individual at a gas station in Marion County.
This case was investigated by the Drug Enforcement Administration and the Marion County Unified Drug Enforcement Strike Team. It is being prosecuted by Assistant United States Attorney Sarah Janette Swartzberg.
Oneida County Felon Admits to Firearm and Drug OffensesRead the Press Release
ALBANY, NEW YORK – Leshawn Thomas, age 33, of Clayville, New York, pled guilty yesterday to possessing cocaine and cocaine base with the intent to distribute them and to unlawfully possessing firearms. United States Attorney Carla B. Freedman and Frank A. Tarentino III, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), New York Division, made the announcement.
Thomas, who had two prior felony convictions, admitted to possessing with intent to distribute approximately 3 kilograms of cocaine and 268.14 grams of cocaine base in Oneida County, New York, on or about April 28, 2023. He also admitted to possessing two loaded semi-automatic pistols: a Glock, model 22, .40 cal. and a Kahr, model CM9, .9 mm.
Thomas is scheduled to be sentenced by Chief United States District Judge Brenda K. Sannes on April 4, 2025. He faces a minimum term of 10-years in federal prison and a maximum of life, and a term of supervised release between 5 years and life. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
DEA investigated the case with the assistance of the Saratoga County Sheriff’s Office, the Oneida County Sheriff’s Office, and the New York State Department of Corrections and Community Supervision (NYDOCCS). Assistant U.S. Attorney Allen J. Vickey is prosecuting the case.