Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
13 December 2024
United States Settles False Claims Act Allegations Against Pharmaceutical Distributor for Paying Kickbacks Through Inventory Management SystemsRead the Press Release
ASD Specialty Healthcare LLC (ASD), doing business as Besse Medical (Besse), has agreed to pay $1.67 million to resolve allegations that it violated the Anti-Kickback Statute and False Claims Act by providing inventory management systems to retina practices at no cost to induce them to purchase drugs from Besse. ASD, headquartered in Carrollton, Texas, distributes specialty medical and pharmaceutical products nationwide, including ophthalmological injections that treat neovascular age-related macular degeneration (wet AMD).
As part of the settlement agreement, ASD admits that it acquired a commercially available inventory management system, known as PODIS, in May 2017. Through November 2023, ASD offered PODIS at no cost to customers who met certain purchase requirements, including that they purchase branded Wet AMD drugs from ASD and convert to an ASD customer if not a current customer. The government alleges that ASD caused physicians to submit false claims to Medicare, TRICARE and the Department of Veterans Affairs induced by these kickbacks.
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, such as free inventory management systems — to induce the purchase of a drug that Medicare pays for.
“According to the allegations in today’s settlement, ASD purchased a commercially available product and leveraged it to gain business in violation of the AKS,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will pursue kickbacks at all levels of the distribution chain to preserve the integrity of federal health care programs.”
“Pharmaceutical distributors cannot violate the law to gain a financial advantage,” said U.S. Attorney Joshua S. Levy for the District of Massachusetts. “Offering improper incentives to health care customers can increase health care costs and disadvantage competitors who are playing by the rules. Our office is committed to continue pursuing these investigations with our federal law enforcement partners.”
“Improper financial inducements can compromise medical judgement and threaten the integrity of the Medicare program,” said Special Agent in Charge Roberto Coviello of the U.S. Department of Health and Human Services Office of Inspector General. “We are committed to pursuing allegations of kickbacks and false claims as we work to protect the integrity of the taxpayer-funded Medicare program, and we encourage the public to come forward with information about such conduct.”
“Investigating schemes that undermine the integrity of TRICARE, the healthcare system for military members and their families, is a top priority for the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service (DCIS),” said Special Agent in Charge Patrick J. Hegarty of the DCIS Northeast Field Office. “Today’s announcement demonstrates our commitment to work with our partner agencies and the Justice Department to pursue those individuals and corporations that submit false claims to the TRICARE system.”
“Investigations such as these help safeguard the integrity of the healthcare industry marketplace and protect taxpayer funds,” said Special Agent in Charge Christopher Algieri of the Department of Veterans Affairs Office of Inspector General (VA OIG)’s Northeast Field Office. “The VA OIG thanks the Justice Department and our federal law enforcement partners for their collaboration in this joint investigation.”
The settlement resolves claims brought under the whistleblower or qui tam provisions of the FCA by Julianne Nunnelly and Matthew Shanks. Ms. Nunnelly and Mr. Shanks are former employees of Regeneron Pharmaceuticals Inc., which manufactures and sells a drug to treat wet AMD. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. Mr. Shanks and Ms. Nunnelly will receive $250,705.20 from the proceeds of the settlement. The lawsuit is captioned United States ex rel. Nunnelly et al. v. Regeneron Pharmaceuticals, Inc. et al., No. 20-cv-11401-PBS (Dist. Mass.). The United States filed a complaint in intervention against Regeneron Pharmaceuticals, Inc., on March 28, that remains pending.
The investigation of this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorneys’ Offices for the District of Massachusetts, with assistance from the Department of Health and Human Services Office of Inspector General, FBI, DCIS, VA-OIG and the Office of Personnel Management Office of Inspector General.
The investigation and resolution of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Trial Attorneys Douglas Rosenthal and Samuel Lehman of the Justice Department’s Civil Division and Assistant U.S. Attorneys Diane Seol and Lindsey Ross for the District of Massachusetts handled the matter.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
United States Obtains Consent Decree Against Lilmor Management, Morris Lieberman, and Others to Abate Lead Paint and Improve Housing Conditions Across More Than 2,500 Apartments in Largely Low and Moderate-Income NeighborhoodsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Lisa F. Garcia, the Regional Administrator for Region 2 of the U.S. Environmental Protection Agency (“EPA”); Matthew Ammon, the U.S. Department of Housing and Urban Development (“HUD”) Office of Lead Hazard Control and Healthy Homes; and Rae Oliver Davis, the Inspector General of the HUD Office of the Inspector General (“HUD OIG”), announced today that the United States, together with the State of New York, filed a civil lawsuit against LILMOR MANAGEMENT LLC (“LILMOR”), MORRIS LIEBERMAN (“LIEBERMAN”), and related LLCs (the “LLC DEFENDANTS”) (collectively, the “Defendants”), alleging that since 2012 the Defendants have violated federal law relating to lead-based paint safety and maintained a public nuisance in approximately 2,700 apartments, including more than 2,500 still owned by the LLC Defendants and more than 2,400 apartments currently managed by LILMOR and LIEBERMAN. Among other things, the U.S. and the State of New York allege that the Defendants’ apartments are riddled with peeling lead paint and lead dust; infested by rats, mice, and roaches; damp from perpetual leaks and covered with growing mold; and otherwise a danger to human health. More than 130 children living in the Defendants’ apartments have tested positive for elevated blood-lead levels since 2012.
The parties simultaneously filed a Consent Decree that would resolve the lawsuit and impose extensive relief, including requiring the Defendants to pay $3.575 million in penalties and $2.925 million in restitution to affected tenants, and requiring Defendants to identify and abate all lead-based paint (at an estimated cost of $10 million) and remediate substandard housing conditions across more than 2,500 apartments, subject to the oversight of an independent Housing Specialist selected by the U.S. and New York State.
U.S. Attorney Damian Williams said: “New Yorkers are entitled to protection from lead-paint hazards and other unsafe conditions in their homes. Landlords must comply with federal lead paint laws, and they cannot neglect their residential properties in ways that create a public nuisance. The consent decree we filed today, if entered by the Court, would provide the most extensive relief ever achieved in a case of this kind, including requiring the defendants to make 2,500 apartments safe and sanitary and to pay $6.5 million, including nearly $3 million in restitution to impacted tenants.”
EPA Regional Administrator Lisa F. Garcia said: “Our message to housing authorities, landlords, and renovators is loud and clear – Follow The Law – if you persist in cutting corners and putting public health at risk, we will pursue a violation and you will pay a hefty fine. There is no excuse for these violations. Rather than protecting children from lead poisoning, Lilmor Management Company LLC and the other named defendants systematically violated lead paint safety regulations. EPA appreciates the partnership with HUD, the U.S. Department of Justice and New York State officials on this action that underscores our joint commitment to protect our children and families from lead hazards.”
HUD Director Matthew Ammon said: “Today’s settlement means that thousands of families in New York City will have their apartments tested for lead and made lead safe. HUD’s partnering with DOJ and EPA on this case is part of the whole-of-government approach that is vital for addressing lead hazards in homes nationally.”
HUD-OIG Inspector General Rae Oliver Davis said: “The defendants’ failure to maintain safe and healthy living conditions for tenants, particularly the hundreds of children who have tested positive for elevated blood-lead levels, is simply unacceptable. This consent decree holds the defendants accountable for its egregious conduct. It provides important relief for victims and will require the defendant to take meaningful action to protect tenants from future exposure to health hazards. My office will continue to work with DOJ, HUD, EPA, and our local partners such as the New York Attorney General in addressing critical health and safety issues and safeguarding the well-being of families nationwide from preventable hazards such as lead poisoning.”
Exposure to lead-based paint dust is the most common cause of lead poisoning, which can lead to severe, irreversible health problems, particularly in children. Lead poisoning can affect children’s brains and developing nervous systems, causing reduced IQ, learning disabilities, and behavioral problems. Federal law seeks to protect tenants from these grave threats. In particular, the federal Lead Disclosure Rule requires landlords and their agents to inform tenants about the risks of lead exposure in their apartments before entering lease agreements and to disclose known facts about the presence of lead paint and lead paint hazards in their housing. The federal Renovation, Repair, and Painting Rule (“RRP Rule”) provides work-practice standards and related requirements to minimize the risk of lead exposure during renovation projects.
As alleged in the U.S. and New York State’s Complaint filed in the district court, LIEBERMAN is the co-owner and principal of LILMOR, which currently manages a portfolio of more than 2,400 apartments and previously managed others. Many of the apartments are owned by the LLC DEFENDANTS. The apartments are largely located in communities where families have low to moderate incomes and are disproportionately burdened by environmental and other health hazards. For years, the Defendants systematically failed to provide their tenants with disclosures about lead-based paint and lead-based paint hazards in their apartments, as required by the Lead Disclosure Rule. LILMOR and LIEBERMAN also failed to protect tenants when conducting renovation work as required by the RRP Rule, creating risks of exposure to toxic dust. Furthermore, the Defendants failed to properly maintain their residential properties, leading to apartments that were so unsafe and unsanitary as to present a public nuisance.
* * *
In the Consent Decree, LILMOR and LIEBERMAN admit, acknowledge, and accept responsibility for the following, among other things:
- Defendants own, control, or manage, in whole or in part, 49 residential buildings containing 2,539 units in New York City, all of which were built prior to 1978.
- Government records show that, since 2012, more than 130 children have tested positive for elevated blood-lead levels while living in an apartment owned or controlled by one or more of the Defendants.
Disclosures
- Prior to November 2020, LILMOR and LIEBERMAN failed to provide tenants entering new and renewal leases with known information relating to lead-based paint or lead-based paint hazards and/or records in the possession or control of the Defendants relating to lead-based paint or lead-based paint hazards, as required by the federal Lead Disclosure Rule.
- In hundreds of apartments they rented, LILMOR and LIEBERMAN knew of lead-based paint or previous lead-based paint hazards because of prior lead-based paint hazard violations issued by the New York City Department of Housing Preservation and Development (“HPD”) or the New York City Department of Health and Mental Hygiene (“DOHMH”), but LILMOR and LIEBERMAN did not disclose this fact to tenants as required by the Lead Disclosure Rule.
- Prior to the dates upon which government records show that children tested positive for elevated blood-lead levels while residing in the Defendants’ apartments, LILMOR and LIEBERMAN had received citations for lead-based paint hazard violations from HPD or DOHMH for at least 18 of these apartments but did not disclose the fact that these apartments contained lead-based paint to the tenants when they signed their leases or lease renewals.
Lead-Safe Work Practices
- LILMOR and LIEBERMAN lacked federal certification to conduct repairs and renovations that required lead-safe work practices pursuant to the RRP Rule, did not provide maintenance staff with equipment necessary to perform RRP-Rule-compliant work, and did not train maintenance staff on lead-safe work practices. LILMOR and LIEBERMAN provided no instructions to its maintenance staff to prevent them from conducting work that was required to be performed in accordance with lead-safe work practices. Their work-order database nevertheless reflects that work subject to the RRP Rule was conducted by their maintenance staff.
- Through at least 2020, LILMOR and LIEBERMAN failed to follow lead-safe work practices required by federal and local law in covered repair and renovation projects for which they engaged an entity that worked solely or principally for them. During this time, the entity did not employ lead-safe work practices.
- Furthermore, although LILMOR had arranged for this entity to receive EPA certifications required by the RRP Rule in 2010 and 2020, the entity was not certified to conduct work covered by the RRP Rule from 2015 to 2020.
- In a period spanning from 2019 to the present, HPD issued violations to Defendants under applicable housing code provisions:
- more than 966 times for lead-based paint hazards,
- more than 2331 times for rodent or roach infestations,
- more than 1465 times for mold,
- more than 1492 times for leaks, and
- more than 85 times for lack of heat.
The Consent Decree agreed upon by the parties requires the Defendants, among other things, to do the following:
- Identify and abate all lead-based paint across 49 buildings containing more than 2,500 apartments.
- Eliminate substandard conditions throughout this housing portfolio.
- Engage an independent Housing Specialist, selected by the U.S. and the State of New York, to oversee the Defendants’ work under the consent decree.
- Pay a $3.25 million civil penalty to the U.S.
- Pay $3.25 million to New York State, of which $325,000 will be a civil penalty and $2.925 million will be used to pay restitution to tenants harmed by Defendants’ conduct.
- Provide rent-abatement credits for tenants affected by lead-based paint violations and substandard conditions.
- Provide tenant education efforts to tenants related to the hazards of lead-based paint.
To provide public notice and afford members of the public the opportunity to comment on the Consent Decree, the decree will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval.
Mr. Williams thanked EPA and HUD attorneys and staff and HUD OIG for their critical work in this matter. Mr. Williams also thanked the Housing Protection Unit of the New York Attorney General’s Office for coordinating in pursuing the federal and state claims resolved in the Consent Decree.
This case is being handled by the Environmental Protection Unit of the Office’s Civil Division. Assistant U.S. Attorneys Zack Bannon and Jacob Lillywhite are in charge of the case.
U.S. Attorney's Office Alerts Consumers on Common Holiday ScamsRead the Press Release
CHARLOTTE, N.C. – The U.S. Attorney’s Office is warning the public of a potential uptick in cyberscams during the holiday season and is cautioning everyone to remain alert against cybercriminals targeting online consumers, particularly older adults.
“The holiday season is a time for joy and generosity, but it’s also a time when cybercriminals seek to target unsuspecting consumers and exploit increased online activity,” said U.S. Attorney Dena J. King. “Whether you’re buying gifts, donating to charity, or searching for a seasonal job, staying vigilant against online scams is the best way to keep the spirit of the season merry and bright.”
2023 Holiday Scams
According to the FBI’s 2023 Internet Crimes Report (IC3) North Carolina ranked in the top 15 states for online financial fraud, both in filed complaints and monetary losses. The report indicates that last year $12.5 billion in financial losses were reported to the FBI. The report also indicates that IC3 received complaints about online shopping and “non-delivery” schemes, which generally spike during the holiday season.
Here are the most common scams that consumers may come across this time of the year:
Fake Online Stores or “Lookalike Stores.” Be on the lookout for online stores that are either entirely fake or made to look like legitimate stores. Watch out for red flags, such as deeply discounted prices especially for in-demand items, like electronics, jewelry, and clothing. Be particularly careful with social media ads that link to bogus online stores or product listings. These scams target shoppers looking to buy luxury or hard-to-find items at an affordable price. Consumers may end up with stolen credit card information or paying for an item that is never received.
Missed Delivery/Non-Delivery Notification. With the rise in online shopping, lots of packages arrive at our front door during the holiday season. Beware of fake delivery notification emails or text messages alerting you of a missed package delivery. Think twice before clicking on the link provided in a text or email, as it may direct you to a website designed to steal your information. Make sure you pay attention to the domain address of the link to ensure it is a reputable delivery site and be especially cautions with delivery websites that ask for your personal or payment information to complete a package delivery.
Gift Card Scams. Gift card scams involve either scamming consumers into buying fake gift cards or tricking consumers into using gift cards to pay for fraudulent goods or services. For example, avoid online stores or advertisements that purport to sell commercial gift cards at deeply discounted prices. While they may have you believe you are buying a gift card on sale, in fact you may end up receiving a gift card with zero money value. Instead, purchase gift cards from reputable retailers.
Fake Charities. During the holidays, cybercriminals seek to take advantage of consumers’ generosity through fraudulent charities, GoFundMe campaigns, and other charitable causes. These types of scams can be particularly difficult to decipher, so before donating money be extra cautious about selecting a charity. If donating online, research the charity thoroughly, check with the Better Business Bureau, and take a look at the charity’s URL and website for telltale signs of fraud, including misspellings, bad grammar, and no contact information. For GoFundMe type of donations research the organizer or the group behind the campaign making a donation.
Phishing Emails or Texts. Cybercriminals take advantage of the hustle and bustle of the holiday season to dupe consumers via phishing emails or texts that contain suspicious links. Be particularly mindful of purported communications from your bank or credit card company, warning you that your account has been compromised. These phishing emails or texts generally prompt you to click on the provided link to log into your account to update your compromised information, so scammers can steal your information. Also avoid clicking on emails that promise free giveaways, prompt you to claim a prize, or ask you to confirm a reservation or other booking. If you receive this type of communication do not use the provided link. For example, if it’s an email related to a compromised bank account, instead of using the link in the email, go to your bank’s main website to log into your account.
Fraudulent Seasonal Jobs. Employment scams tend to increase during the holiday season, as scammers prey on individuals seeking to make extra money. Be mindful of fake job ads, especially online job listings that offer really good money for very little work. Do not ever pay upfront for any equipment or training you need for a new job. Also, do not readily provide your personal identifying information (social security number, date of birth, address, etc.) or your financial and banking information without confirming the job is legitimate. Be particularly mindful of money mule schemes, in which a fake employer asks you to cash a check through your bank, keep a portion of the money, and then send the rest of the money back to the employer.
Scams Targeting Older Adults
The U.S. Attorney’s Office also cautions that older adults are particularly vulnerable of becoming victims of online fraud, not only during the holidays, but throughout the year. According to the FBI’s IC3 2023 report, adults 60 years and older reported the highest monetary losses, with a combined $3.4 billion lost to financial fraud.
As part of the ongoing efforts to educate older adults about online scams and financial fraud, today the U.S. Attorney’s Office co-hosted a scam alert seminar in Charlotte, during which participants received important information about financial fraud. Following the presentation, attendees participated in a game of “Fraud Bingo,” a fun activity designed to deliver information and practical tips on how to prevent the financial exploitation and victimization by scammers.
“Online scams targeting the elderly remain a growing concern in North Carolina,” said U.S. Attorney King. “It’s our duty to protect our vulnerable older population from financial fraud and prevent its devastating financial impact on seniors. Fraud Bingo is a fun and engaging way to deliver information that can help older adults understand how scammers operate, learn the tactics they use, and find out how to protect themselves from financial harm.”
Some examples of financial fraud targeting older Americans are:
- Lottery Phone Scams – in which the callers convince seniors that a large fee or taxes must be paid before they can receive lottery winnings.
- Grandparent Scams – which convince seniors that their grandchildren are in trouble and need money to make rent, repair a car, or even money for bail.
- Romance Scams – which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose.
- Tech Support Scams – which convince victims to pay for non-existent problems with their computers.
- IRS Imposter Scams – which defraud victims by posing as IRS agents and claiming that victims owe back taxes.
- Sham Business Opportunities – which convince victims to invest in lucrative business opportunities or investments.
Here are some tips that can help avoid falling victim to a financial scam:
- Don’t share personal information with anyone you don’t know.
- Don’t pay a fee for a prize or lottery winning.
- Don’t click on pop-up ads or messages.
- Delete phishing emails and ignore harassing phone calls.
- Don’t send gift cards, checks, money orders, wire money, or give your bank account information to a stranger.
- Don’t fall for a high-pressure sales pitch or a lucrative business deal.
- If a scammer approaches you, take the time to talk to a trusted friend or family member.
- Keep in mind that if you send money once, you’ll be a target for life.
- Remember, it’s not rude to say, “NO.”
- A good rule of thumb is, if it’s too good to be true, it’s likely a scam.
To report elder fraud please call the Justice Department’s Elder Fraud Hotline at 1-833-FRAUD-11 (833-372-8311).
If you believe you are the victim of an online scam call the FBI and file a report with the FBI’s Internet Crime Complaint Center at IC3.gov or contact local law enforcement.
Trio Pleads Guilty in Reservation MurderRead the Press Release
Jackson, Miss. – Three individuals pled guilty today to their roles in a murder on the Mississippi Band of Choctaw Indians’ Reservation.
According to court documents, in September 2023, Michael Jeffrey Shaffer, Sr., 48, and Montero Ray Willis, 22, used a firearm to shoot and kill a tribal member in the Pearl River Community of the Mississippi Band of Choctaw Indians’ Reservation. Deyonkia Alice Willis, 30, acted as an accessory after the fact to the murder. The defendants were indicted by a federal grand jury in November of 2023.
The defendants will be sentenced at a later date to be determined by the court. Michael Jeffrey Shaffer, Sr., and Montero Ray Willis both face up to life in prison for murder in the second degree. Deyonkia Alice Willis faces up to fifteen years in prison. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Todd W. Gee and Acting Special Agent in Charge Robert A. Eikhoff of the Federal Bureau of Investigation made the announcement.
The Choctaw Police Department and the Federal Bureau of Investigation investigated the case as part of the Project Safe Neighborhoods Tribal Initiative.
Assistant U.S. Attorneys Kevin J. Payne and Brian K. Burns prosecuted the case.
Project Safe Neighborhood’s Tribal Initiative refers to the inclusion of tribal law enforcement officials and community leaders within the Project Safe Neighborhoods (PSN) program, a national initiative by the U.S. Department of Justice that aims to identify and address the most pressing violent crime issues in a community by bringing together federal, state, local, tribal law enforcement, prosecutors, and community partners to develop comprehensive solutions; essentially, it signifies the program's efforts to actively involve tribal entities in combating crime within their jurisdictions.
Third Former NYCHA Superintendent Convicted of Bribery and Extortion Offenses at TrialRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that Corey Gilmore, a former NYCHA superintendent, was convicted of bribery and extortion under color of official right for taking thousands of dollars from contractors in exchange for awarding those contractors no-bid contracts or approving payment on previously awarded contracts at NYCHA developments for approximately six years. The verdict followed a four-day trial before U.S. District Judge Lewis J. Liman.
U.S. Attorney Damian Williams said: “Corruption is an insidious crime—difficult to detect, corrosive in its effect on government agencies, and damaging to the public’s trust in government institutions. As a NYCHA Superintendent, Corey Gilmore abused his position of public trust by demanding thousands of dollars of bribes from contractors, betraying his duty to NYCHA residents, the City of New York, and taxpayers. The jury’s unanimous verdict sends a clear message that those who use their public offices for personal gain will be held accountable.”
According to the evidence presented in court during the trial:
NYCHA is the largest public housing authority in the country, providing housing to New Yorkers across the City and receiving over $1.5 billion in federal funding from the U.S. Department of Housing and Urban Development (“HUD”) every year. When repairs or construction work at NYCHA housing require the use of outside contractors, services must typically be purchased via a bidding process. However, when the value of a contract was under a certain threshold, designated staff at NYCHA developments, including superintendents, could hire a contractor of their choosing without soliciting multiple bids. With either type of contract, a NYCHA employee needed to certify that the work was satisfactorily completed in order for the contractor to receive payment from NYCHA.
GILMORE, a superintendent at three NYCHA developments in the Bronx between 2016 and 2023—Bronx River Houses, Eastchester Gardens, and Forest Houses—demanded and received cash in exchange for NYCHA contracts. GILMORE typically demanded $1,000 for each contract he awarded. In total, GILMORE demanded and received tens of thousands of dollars in bribes in exchange for hundreds of thousands of dollars in NYCHA contracts.
Of the 70 individual NYCHA employees charged with bribery and extortion offenses in February 2024, 59 have pled guilty, and three have been convicted after trial.
If you believe you have information related to bribery, extortion, or any other illegal conduct by NYCHA employees, please contact [email protected] or (212) 306-3356. If you were involved in such conduct, please consider self-disclosing through the SDNY Whistleblower Pilot Program at [email protected].
* * *
GILMORE, 46, of Garnerville, New York, was convicted of one count of federal program bribery, which carries a maximum term of 10 years in prison, and one count of extortion under color of official right, which carries a maximum term of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the New York City Department of Investigation, U.S. Department of Homeland Security – Homeland Security Investigations (“HSI”), the HUD Office of Inspector General, and the U.S. Department of Labor – Office of Inspector General, which work together collaboratively as part of the HSI Document and Benefit Fraud Task Force, as well as the special agents and task force officers of the U.S. Attorney’s Office for the Southern District of New York.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles criminal organizations using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Emily Deininger, Matthew King, and Derek Wikstrom are in charge of the prosecution, with the assistance of Paralegal Specialist Braden Florczyk.
Texas Man Pleads Guilty to Federal Dogfighting OffensesRead the Press Release
Jesus Allen Stephens, of Waskom, Texas, pleaded guilty yesterday to felony charges related to his participation in a major dogfighting event in November 2021 in Waskom.
According to court documents, Stephens organized and hosted a large-scale dogfighting event on family-owned property in Harrison County, Texas, on Nov. 13, 2021. Stephens and others arranged to fight dogs at the event for gambling and entertainment purposes. Prior to the event, Stephens announced a series of up to 14 matches and sent multiple individuals GPS coordinates to the property. The fight included out-of-state participants.
Law enforcement personnel who disrupted the event found a dogfighting pit structure, a severely injured dog and other dogfighting evidence. Several pit bull-type dogs were also found at Stephens’s residences in addition to items commonly used for dog fighting purposes, such as treadmills and heavy chains.
Under federal law, it is illegal to fight dogs in a venture that affects interstate commerce and to possess, train, transport, deliver, sell, purchase or receive dogs for fighting purposes. Stephens pleaded guilty to conspiracy, sponsoring and exhibiting a dog in a dogfight and possessing a dog for dogfighting purposes. Stephens faces up to five years in prison and a $250,000 fine for each count.
Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD), U.S. Attorney Damien M. Diggs for the Eastern District of Texas and Special Agent in Charge Lyonel Myrthil of the FBI’s New Orleans Field Office made the announcement.
The FBI’s Shreveport, Louisiana, and Tyler, Texas, Resident Agencies are investigating this case. Deputies with the Harrison County, Texas, Sheriff’s Office have also provided invaluable assistance.
Trial Attorney Sarah Brown and Senior Trial Attorney Ethan Eddy of ENRD’s Environmental Crimes Section are prosecuting the case with assistance from James Noble of the U.S. Attorney’s Office for the Eastern District of Texas.
Texas Man Indicted on Child Sexual Exploitation ChargesRead the Press Release
An indictment was unsealed today in the Middle District of Tennessee charging a Texas man for child sexual exploitation offenses.
According to court documents, between October 2018 and May 2019, Philip Taylor Sobash, 34, of Austin, then a practicing physician, engaged in an online sexually explicit relationship with Minor Victim 1, who resided in the Middle District of Tennessee. This online relationship allegedly began after they connected on a dating website that facilitates “sugar daddy” relationships. Although Minor Victim 1 represented that she was 18 when she signed up for the website, the site did not verify the age of its users. As alleged, after their communications moved to text message, Minor Victim 1 quickly informed Sobash of her true age and sent him a photo of her driver’s license, which confirmed that she was a minor.
Sobash allegedly requested that Minor Victim 1 produce and send him sexually explicit images of herself and provided her thousands of dollars in cash and gifts to entice her to do so. Over the course of more than seven months, Minor Victim 1 allegedly sent hundreds of sexually explicit photos and videos to Sobash, most of which constituted child sexual abuse material (CSAM). Although Sobash allegedly assured Minor Victim 1 that the images she sent him would remain private between them, he distributed the images online. This led to unknown persons contacting Minor Victim 1 and attempting to blackmail her to produce more CSAM.
Court filings indicate that the FBI discovered in 2024 that Minor Victim 1’s CSAM was available for sale on a publicly accessible website and was labeled with Minor Victim 1’s first and last name. The CSAM was part of a larger collection of sexually explicit images and videos of about 70 young women and girls called the “DiscreetGent” collection.
According to court documents, evidence from various sources that indicates Sobash is “DiscreetGent” and is responsible for the sexually explicit imagery found in the online collection. The court filings further allege that in addition to Minor Victim 1, at least four other victims featured in the “DiscreetGent” collection were minors at the time they created CSAM for Sobash. Sobash allegedly sent electronic payments to Minor Victim 1 and the other minor victims, sometimes with sexual comments attached, and Sobash’s Apple iCloud account contained copies of Minor Victim 1’s CSAM.
Sobash was arrested earlier today in the Western District of Texas. He is charged with one count of sexual exploitation of a minor, one count of coercing a minor to engage in prostitution or unlawful sexual activity, and one count of receipt of child pornography. If convicted, he faces a mandatory minimum penalty of 15 years in prison and a maximum penalty of 30 years in prison on the sexual exploitation of a minor count, a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison on the coercing a minor to engage in prostitution or unlawful sexual activity count, and a mandatory minimum penalty of five years in prison and a maximum penalty of 20 years in prison for the receipt of child pornography count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Anyone who believes they or their minor dependent was victimized by Sobash is asked to visit the following FBI website and complete a short online questionnaire: www.fbi.gov/SobashVictims.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Criminal Division; Acting U.S. Attorney Thomas J. Jaworski for the Middle District of Tennessee; and Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division made the announcement.
The FBI’s Child Exploitation Operational Unit is investigating the case.
Trial Attorney Adam Braskich of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Monica R. Morrison for the Middle District of Tennessee are prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the 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 www.justice.gov/psc.
An indictment is merely an allegation. The defendant is presumed innocent until proven guilty in a court of law.
Texas Man Indicted on Child Sexual Exploitation ChargesRead the Press Release
NASHVILLE - An indictment was unsealed today in the Middle District of Tennessee charging a Texas man for child sexual exploitation offenses.
According to court documents, between October 2018 and May 2019, Philip Taylor Sobash, 34, of Austin, then a practicing physician, engaged in an online sexually explicit relationship with Minor Victim 1, who resided in the Middle District of Tennessee. This online relationship allegedly began after they connected on a dating website that facilitates “sugar daddy” relationships. Although Minor Victim 1 represented that she was 18 when she signed up for the website, the site did not verify the age of its users. As alleged, after their communications moved to text message, Minor Victim 1 quickly informed Sobash of her true age and sent him a photo of her driver’s license, which confirmed that she was a minor.
Sobash allegedly requested that Minor Victim 1 produce and send him sexually explicit images of herself and provided her thousands of dollars in cash and gifts to entice her to do so. Over the course of more than seven months, Minor Victim 1 allegedly sent hundreds of sexually explicit photos and videos to Sobash, most of which constituted child sexual abuse material (CSAM). Although Sobash allegedly assured Minor Victim 1 that the images she sent him would remain private between them, he distributed the images online. This led to unknown persons contacting Minor Victim 1 and attempting to blackmail her to produce more CSAM.
Court filings indicate that the FBI discovered in 2024 that Minor Victim 1’s CSAM was available for sale on a publicly accessible website and was labeled with Minor Victim 1’s first and last name. The CSAM was part of a larger collection of sexually explicit images and videos of about 70 young women and girls called the “DiscreetGent” collection.
According to court documents, evidence from various sources that indicates Sobash is “DiscreetGent” and is responsible for the sexually explicit imagery found in the online collection. The court filings further allege that in addition to Minor Victim 1, at least four other victims featured in the “DiscreetGent” collection were minors at the time they created CSAM for Sobash. Sobash allegedly sent electronic payments to Minor Victim 1 and the other minor victims, sometimes with sexual comments attached, and Sobash’s Apple iCloud account contained copies of Minor Victim 1’s CSAM.
Sobash was arrested earlier today in the Western District of Texas. He is charged with one count of sexual exploitation of a minor, one count of coercing a minor to engage in prostitution or unlawful sexual activity, and one count of receipt of child pornography. If convicted, he faces a mandatory minimum penalty of 15 years in prison and a maximum penalty of 30 years in prison on the sexual exploitation of a minor count, a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison on the coercing a minor to engage in prostitution or unlawful sexual activity count, and a mandatory minimum penalty of five years in prison and a maximum penalty of 20 years in prison for the receipt of child pornography count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Anyone who believes they or their minor dependent was victimized by Sobash is asked to visit the following FBI website and complete a short online questionnaire: www.fbi.gov/SobashVictims.
Acting U.S. Attorney Thomas J. Jaworski for the Middle District of Tennessee; Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Criminal Division; and Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division made the announcement.
The FBI’s Child Exploitation Operational Unit is investigating the case.
Assistant U.S. Attorney Monica R. Morrison and Trial Attorney Adam Braskich of the Criminal Division’s Child Exploitation and Obscenity Section are prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the 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 www.justice.gov/psc.
An indictment is merely an allegation. The defendant is presumed innocent until proven guilty in a court of law.
# # # # #
Ten-Time Convicted Felon Pleads Guilty to Possessing A FirearmRead the Press Release
Jacksonville, Florida – United States Attorney Roger B. Handberg announces that Loranzia Outin, III (48, Middleburg) has pleaded guilty to possessing two firearms as a convicted felon. Outin faces a maximum penalty of 15 years in federal prison. A sentencing date has not yet been scheduled.
According to court documents, on March 22, 2024, the Clay County Sheriff’s Office and their SWAT team executed a search warrant at Outin’s residence. During the search of Outin’s room, law enforcement officers located a 9mm pistol and a .22 caliber revolver. Outin had 10 prior felony convictions, including selling methamphetamine, possession of cocaine, and possession of a weapon or ammunition by a convicted felon. As a convicted felon, Outin is prohibited from possessing firearms under federal law.
This case was investigated by the Clay County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Brenna Falzetta.
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.
Tax Return Preparer Sentenced to 30 Months in Prison for Filing False Tax ReturnsRead the Press Release
TUCSON, Ariz. – Nour Abubakr Nour, 34, of Tucson, was sentenced on December 3, 2024, by United States District Judge Scott H. Rash to 30 months in prison. Nour pleaded guilty to Aiding and Assisting in the Preparation and Presentation of a False Tax Return on December 21, 2023.
Nour operated a tax return preparation business, known as Skyman Tax, LLC, located in Tucson. For tax years 2016 through 2018, Nour prepared and filed at least 27 false individual federal income tax returns for his clients, which included falsely claimed business income. Using the business income, Nour inflated tax refunds so that he could pay himself large tax return preparation fees. Nour’s clients had no knowledge that Nour was filing false tax returns under their names. Nour was ordered to pay restitution to the United States Treasury in the amount of $150,154.00 for the false tax refunds.
IRS Criminal Investigation conducted the investigation in this case. The United States Attorney’s Office, District of Arizona, Tucson, handled the prosecution.
CASE NUMBER: CR-23-00516-TUC-SHR
RELEASE NUMBER: 2024-174_Nour# # #
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.Suffolk County Corrections Officers Charged with COVID Unemployment and Loan FraudRead the Press Release
BOSTON – Two corrections officers employed by the Suffolk County Sherriff’s Department were arrested today for allegedly submitting fraudulent information in an effort to obtain loans through CARES Act programs like the Pandemic Unemployment Assistance (PUA) program and the Paycheck Protection Program (PPP).
Christnel Orisca, 25, of Boston, was indicted by a federal grand jury on five counts of wire fraud and one count of making a false statement to a financial institution, arising out of PUA, traditional Unemployment Insurance (UI) and PPP loan benefits obtained prior to his employment at the Suffolk County Sherriff’s Department. Jasmine Murphy, 38, also of Boston, was indicted on seven counts of wire fraud and one count of making a false statement to a financial institution, arising out of PUA and PPP loan benefits obtained prior to her employment at the Suffolk County Sherriff’s Department and UI benefits obtained prior to and during her employment there.
The defendants were arrested this morning and will appear in federal court in Boston at 1:30 PM and 1:45 PM today.
“This case highlights the critical importance of protecting taxpayer-funded programs like the CARES Act from fraud and abuse,” said United States Attorney Joshua S. Levy. “These defendants, who hold positions of public trust as corrections officers, are alleged to have knowingly exploited pandemic relief programs intended to support small businesses and unemployed workers during a time of unprecedented crisis. Such conduct not only undermines the integrity of these programs but also betrays the public’s trust. My office remains steadfast in holding accountable those who engage in such schemes and ensuring that federal relief funds are used for their intended purpose – helping those in genuine need.”
“An important part of the mission of the Office of Inspector General is to investigate allegations of fraud involving COVID-19 pandemic unemployment insurance programs. We will continue to work with our law enforcement partners to investigate these types of allegations,” said Special Agent-in-Charge Jonathan Mellone, U.S. Department of Labor, Office of Inspector General.
“Today’s arrest sends a clear message that those seeking to fraudulently receive benefits will be investigated and prosecuted. DHS OIG is grateful for our continued partnership with our law enforcement partners as we continue fighting corruption,” said Inspector General Joseph V. Cuffari, Ph.D., U.S. Department of Homeland Security, Office of Inspector General.
According to the charging document, Orisca has been a Corrections Officer with the Suffolk County Sherriff’s Department since late 2021. It is alleged that Orisca fraudulently applied for pandemic unemployment and small business loan benefits while working full-time, initially for a security company and later for a delivery company. While employed full-time, it is alleged that Orisca collected approximately $54,700 in unemployment benefits and small business loan funds.
According to the indictment, Murphy has been a Corrections Officer with the Suffolk County Sherriff’s Department since approximately January 2022. It is alleged that Murphy fraudulently applied for pandemic unemployment and small business loan benefits while working for trucking and workforce services companies. It is alleged that Murphy collected approximately $44,346 in unemployment benefits and small business loan funds to which she was not entitled.
In both of their PUA applications, it is alleged that Orisca and Murphy made fraudulent representations about their employment status and thereafter falsely claimed, on a weekly basis, that they did not work and did not receive any income during the prior week. In their PPP loan applications, it is alleged that Orisca and Murphy submitted false statements to SBA-approved lenders, including about the income and/or payroll of their purported small businesses, in order to obtain their loans. According to the charging documents, they also made false representations on forms submitted to request that their PPP loans be forgiven.
The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a $250,000 fine. The charge of making false statements to a financial institution provides for a sentence of up to 30 years in prison, five years of supervised release and a $1 million fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
U.S. Attorney Levy, DOL-OIG SAC Mellone and DHS-OIG Inspector General Cuffari made the announcement today. The U.S. Postal Inspection Service, Boston Police Department and the Suffolk County Sheriff’s Department provided valuable assistance with the investigation. Assistant U.S. Attorneys Adam Deitch and Dustin Chao of the Public Corruption Unit are prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across 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 criminal actors and assists agencies tasked with administering relief programs to prevent fraud by 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 https://www.justice.gov/coronavirus and https://www.justice.gov/coronavirus/combatingfraud.
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 via the https://www.justice.gov/disaster-fraud/webform/ncdf-disaster-complaint-form.
The details contained in the charging document are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Spokane Business Owner Pleads Guilty to Conspiracy to Violate the Clean Air Act and Stealing COVID-19 Relief FundsRead the Press Release
Spokane, Washington - Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced today that Pavel Ivanovich Turlak, and his Spokane-based trucking companies; PT Express, LLC, Spokane Truck Service, LLC, and Pauls Trans, LLC pleaded guilty to conspiring to illegally violate Clean Air Act emissions controls and to fraudulently obtaining hundreds of thousands of dollars in COVID-19 relief funding. Turlak is scheduled to be sentenced on April 2, 2025, at 9:30 a.m. in Spokane, Washington.
Under the Clean Air Act, diesel trucks are required to maintain systems and components that limit harmful emissions of dangerous pollutants such as diesel particulates. Exposure to diesel exhaust can lead to serious health conditions like asthma and respiratory illnesses. Exposure also can worsen existing heart and lung disease, especially in children and the elderly. Heavy-duty diesel trucks are also required under the Clean Air Act to maintain an onboard-diagnostic system which monitors the functionality of the hardware emissions control components. To ensure that the required emissions control systems are functioning properly, if the system detects that an emissions control component is not working, or has been removed, it will ultimately put the truck into what is known as “limp mode,” which limits the top speed to as low as 5 miles per hour.
Based on the plea agreement accepted by the court and information disclosed during court proceedings, between August 2017 and November 2023, Turlak purchased illegal “delete tune” files from Florida-based Ryan Hugh Milliken and his company, Hardaway Solutions, LLC. The files were designed to disable and defeat required emissions controls and monitoring systems. Turlak loaded the delete tunes into his own trucks used in his businesses, as well as trucks of co-conspirators who were customers of Spokane Truck Service, LLC. Milliken and Hardway Solutions, LLC pleaded guilty to violating the Clean Air Act in November 2024.
In addition to violating the Clean Air Act, Turlak also admitted to fraudulently obtaining hundreds of thousands of dollars in COVID-19 Relief funding. Between March 2020 and August 2021, Turlak falsely and fraudulently applied for and received more than $300,000 in federal funding that was designated to go to eligible small businesses during the COVID-19 pandemic. Turlak and his businesses were not eligible to receive this funding due to their ongoing participation in a conspiracy to violate the Clean Air Act; yet, Turlak and his businesses falsely certified that they were eligible for this funding.
As a condition of the plea agreement, Turlak and his companies entered a compliance agreement to ensure that their trucks protect the public health and comply with Clean Air Act requirements going forward.
“Mr. Turlak pursued a business of profiting from pollution. By installing emission defeat devices in his own vehicles and the vehicles of others, he sought an illegal competitive advantage and evaded important safeguards designed to protect public health and the environment,” stated U.S Attorney Waldref. “Families in Eastern Washington deserve to breathe cleaner air, and I am grateful for our partners on our Environmental Task Force who are committed to protecting our community. Working together we will continue to ensure a healthy, high quality of life and keep our region safe and strong.”
This case was investigated by the EPA’s Criminal Investigation Division with assistance from EPA’s National Enforcement Investigations Center, the Small Business Administration, Office of Inspector General, and the Spokane Police Department. Assistant United States Attorneys Dan Fruchter and Jacob E. Brooks, and Special Assistant United States Attorney Gwendolyn Russell, are prosecuting the case.
2:24-cr-00057-TOR
Six Defendants Guilty of Drug, Firearms, and Robbery Crimes Related to Robbery of Undercover ATF AgentRead the Press Release
NEW ORLEANS, LOUISIANA – Over the past few months, MICHAEL LOTT, DIANTA TROPEZ, VERNELL WOODARD, QUINDELE ADDISON, SHEENA RUDOLPH, and CORIS ADDISON, all of New Orleans, pled guilty before United States District Judge Ivan L.R. Lemelle to charges stemming from a controlled purchase of methamphetamine as well as an attempted controlled purchase of methamphetamine, during which a Alcohol, Tobacco, Firearms and Explosives (ATF) undercover agent, and another individual, were armed robbed, announced U.S. Attorney Duane A. Evans.
According to court records, on August 29, 2023, VERNELL WOODARD, QUINDELE ADDISON, SHEENA RUDOLPH, and CORIS ADDISON, conspired to distribute, methamphetamine to an undercover ATF agent and another individual, at a Westbank, New Orleans apartment. The plan came to fruition when VERNELL WOODARD, QUINDELE ADDISON, and SHEENA RUDOLPH sold the undercover ATF agent approximately seven grams of pure methamphetamine.
After this methamphetamine distribution deal was completed, VERNELL WOODARD arranged for the undercover ATF agent and the other individual to return to the apartment the following day to purchase more drugs. When the undercover ATF agent and the other individual arrived at the apartment complex the next day, WOODARD told them to return to the same apartment. As they were coming upstairs, MICHAEL LOTT, armed with an AR-15 style weapon,hid in a closet inside the apartment. Once the undercover ATF agent and the other individual were inside the apartment, DIANTA TROPEZ entered, pointed a Glock pistol at the undercover ATF agent and the other individual, and demanded they get down and hand over their possessions. Simultaneously, MICHAEL LOTT emerged from the closet, pointed the AR-15 style weapon at them, and also demanded they turn over their possessions.
Other agents monitoring the deal, realized something was wrong and began responding. MICHAEL LOTT and DIANTA TROPEZ heard the law enforcement response, which stopped the robbery, and everyone in the apartment tried to flee. The undercover ATF agent and the other individual went onto the third-floor apartment balcony and began climbing down to escape. During their climb, the agent fell and sustained severe injuries.
As a result of this criminal conduct, MICHAEL LOTT, DIANTA TROPEZ, VERNELL WOODARD, QUINDELE ADDISON, SHEENA RUDOLPH, and CORIS ADDISON were indicted on eleven-counts related to the drug trafficking and armed robbery.
On August 14, 2024, SHEENA RUDOLPH pleaded guilty to the methamphetamine conspiracy and the distribution of methamphetamine on August 29, 2023. On August 29, 2024, CORIS ADDISON pleaded guilty to the methamphetamine conspiracy. On September 13, 2024, DIANTA TROPEZ pleaded guilty to conspiring to rob a person of money belonging to the United States, armed robbery of a person of money belonging to the United States, brandishing a firearm during and in relation to a crime of violence, assaulting an officer of the United States with a deadly weapon, and being a felon in possession of a firearm. On October 2, 2024, MICHAEL LOTT pleaded guilty to the same charges as TROPEZ. On November 22, 2024, VERNELL WOODARD pleaded guilty to the methamphetamine conspiracy and distribution charges, as well as the charges related to his participation in the armed robbery and to maintaining a drug involved premises. Finally, on December 5, 2024, QUINDELE ADDISON pleaded guilty to the methamphetamine conspiracy, the distribution of methamphetamine, in addition to being a felon in possession of a firearm, possessing a firearm in furtherance of drug trafficking, and maintaining a drug involved premises.
SHEENA RUDOLPH and CORIS ADDISON are set for sentencing on January 22, 2025. RUDOLPH faces at least five years up to forty years in prison, a fine of up to $5,000,000, at least four years of supervised release, and a $100 per count mandatory special assessment. CORIS ADDISON faces a potential penalty of up to twenty years, a fine of up to $1,000,000, and at least three years of supervised release.
DIANTA TROPEZ, MICHAEL LOTT, and VERNELL WOODARD are set to be sentenced on February 18 and 19, 2025. On the drug counts, WOODARD faces at least five years up to forty years in prison, a fine of up to $5,000,000, and at least four years of supervised release. All three defendants face the following potential penalties on the armed robbery counts: for the conspiracy, a maximum penalty of five years in prison, a fine of up to $250,000, and up to three years of supervised release; for the robbery of a person of money belonging to the United States, a penalty of up to twenty-five years in prison, a fine of up to $250,000, and up to three years of supervised release; for brandishing a firearm during a crime of violence, a mandatory minimum of at least seven years up to life in prison, that must run consecutive to every other term of imprisonment, a fine of up to $250,000, and up to five years of supervised release; and, or the assault on a federal officer, up to twenty years in prison, a fine of up to $250,000, and up to three years of supervised release. LOTT and TROPEZ also face up to fifteen years in prison, a fine of up to $250,000, and up to three years of supervised release, on the felon in possession of a firearm counts.
QUINDELE ADDISON is set to be sentenced on March 26, 2025. On the drug counts, he faces up to twenty years in prison, a fine of up to $1,000,000, and at least three years of supervised release. For the possession of a firearm in furtherance of drug trafficking, he faces a mandatory minimum of at least five years up to life in prison, that must run consecutive to every other term of imprisonment, a fine of up to $250,000, and up to five years of supervised release. Finally, on the felon in possession of a firearm count, QUINDELE ADDISON faces up to fifteen years in prison, a fine of up to $250,000, and up to three years of supervised release.
As to every charged count to which a defendant has pled guilty, that person would also face payment of a mandatory $100 special assessment fee.
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 investigation of this case was conducted, primarily, by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, that was assisted by the Louisiana State Police, the Federal Bureau of Investigation, the New Orleans Police Department, and Crimestoppers GNO. The case is being prosecuted by Assistant United States Attorneys David Haller, Senior Litigation Counsel and PSN Coordinator, and Nolan Paige, Chief of the Narcotics Unit.
Sequoyah County Resident Sentenced Federal Drug and Firearm Related CrimesRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Beau Don Morton, age 42, of Muldrow, Oklahoma, was sentenced to 30 months in prison for one count of illegal possession of a firearm and ammunition by a user of controlled substances, and 30 months for one count of maintaining a drug-involved premises.
The charges arose from an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Sequoyah County Sheriff’s Office.
On June 3, 2024, Morton pleaded guilty to the charges. According to investigators, on April 6, 2022, deputies with the Sequoyah County Sheriff’s Office executing a search warrant on Morton’s Muldrow residence discovered two small plastic baggies containing white crystalline methamphetamine, a metal canister of heroin, a small plastic bag containing 43 amphetamine tablets, a plastic container containing fentanyl tablets, multiple baggies containing sealed syringes, a set of digital scales, and an AR-15-style firearm with twelve loaded magazines of ammunition.
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 Honorable Ronald A. White, Chief U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. Morton will remain in the custody of the U.S. Marshals Service pending transportation to a designated United States Bureau of Prisons facility to serve a non-paroleable sentence of incarceration.
Assistant U.S. Attorneys Edith Singer and Rachel Geizura represented the United States.
Seattle man pleads guilty to wire fraud and aggravated identity theft for schemes to steal from employer, disaster relief program, and former significant otherRead the Press Release
Seattle – A 31-year-old Seattle man pleaded guilty today in U.S. District Court in Seattle to two counts of wire fraud and one count of aggravated identity theft for three different fraud schemes between 2019 and 2022, announced U.S. Attorney Tessa M. Gorman. Westcott Francis-Curley has been in custody since March 2024, following his indictment in August 2023. U.S. District Judge Ricardo S. Martinez scheduled sentencing for March 21, 2025.
The schemes began in 2019, when Francis-Curley embezzled money from his then-employer by misusing cloud computing resources and accounts available to him as an employee. Francis-Curley used employer bank accounts and his employee work authorizations to purchase cloud computing resources, then sell them back to the company—paying himself with company money—at many times their market value. Through this scheme he obtained more than $550,000, and he was caught while attempting to obtain another half-million dollars. He spent significant portions of the proceeds on extravagances, such as private jets.
In 2020, Francis-Curley defrauded the Paycheck Protection Program, a COVID assistance program designed to help small businesses and their employees weather the pandemic. Francis-Curley filed paperwork claiming that two companies he controlled had large payrolls that qualified for assistance, when in fact they had no operations, had no payroll, and did not qualify for relief. He obtained nearly $100,000 and spent much of it on personal goods and services.
Finally, in October 2022, Francis-Curley applied for and obtained a credit card in the name of his former significant other. Francis-Curley used the card for more than $1,000 in personal expenditures.
For the totality of that conduct, prosecutors and Francis-Curley’s attorneys will recommend a three-year prison term. Judge Martinez is not bound by the recommendation and can impose any sentence allowed by law. Francis-Curley has agreed to pay restitution to his former employer, to the Small Business Administration, and to the person whose identity he used to obtain the credit card.
Wire fraud is punishable by up to 20 years in prison. Wire fraud in connection with a national disaster is punishable by up to 30 years in prison. Aggravated identity theft is punishable by a mandatory two years in prison to run consecutive to any other sentence imposed in the case.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney David T. Martin.
Robert McLane Imprisoned for Defrauding Auto Dealer EmployerRead the Press Release
Burlington, Vermont – The United States Attorney’s Office announced that Robert McLane, 36, of Websterville, Vermont was sentenced yesterday in United States District Court in Burlington to 18 months of imprisonment following his guilty plea to a charge of mail fraud. Chief U.S. District Judge Christina Reiss ordered that McLane serve three years of supervised release following completion of his prison term and also pay restitution in the amount of $566,000. The court ordered McLane to surrender to the United States Bureau of Prisons on April 4, 2025 to begin serving his sentence.
According to court records, between approximately March 2019 and September 23, 2022, McLane was employed by Formula Nissan, Inc., an automobile sales and service dealership located in central Vermont, where McLane served as the Parts Manager and then the Director of Parts and Service. In his positions, McLane oversaw the parts and service departments; supervised other employees; and ordered, received and paid for automotive parts needed in the dealership’s operations. In ordering, receiving and paying for parts, McLane typically communicated with Formula Nissan’s parts supplier, Nissan North America, using the Dealer Management System software.
Beginning in about January 2021 and continuing until September 2022, McLane defrauded the dealership by ordering certain vehicle parts from the dealership’s parts supplier, including vehicle suspension lift kits. The cost to the dealership of each lift kit was in the $2300 to $2900 range. The supplier billed, and the dealership subsequently paid, for the lift kits McLane had ordered.
As part of the scheme, McLane caused the lift kits not to be entered into the dealership’s inventory of parts-on-hand.
Instead of selling the lift kits for the benefit of the dealership, McLane advertised them for sale on Facebook at prices substantially discounted from their wholesale cost to the dealership. Over the course of the scheme, McLane sold more than 200 lift kits to persons around the United States, and he shipped the kits to his own customers by using the dealership’s Federal Express account. Purchasers paid McLane for the lift kits via transfers of funds to a personal PayPal account that McLane maintained in his own name and for his own benefit.
As a result of McLane’s fraud, Formula Nissan and its insurance company suffered an out-of-pocket loss of at least $575,000.
This case was investigated by the Federal Bureau of Investigation.
McLane is represented by Assistant Federal Public Defender Steven Barth. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Rhode Island Man Sentenced to 10 Years in Prison for his Role in Wide-Ranging Fentanyl Trafficking Conspiracy that Spanned Across the CountryRead the Press Release
BOSTON – A Rhode Island man was sentenced in federal court in Boston for his role in a fentanyl trafficking organization involved in the manufacturing and distribution of fentanyl pills that spanned across Massachusetts, Rhode Island, New York, Texas and North and South Carolina.
Erik Ventura, 36, was sentenced by U.S. District Court Judge Leo T. Sorokin to 10 years in prison, to be followed by five years of supervised release. In May 2024, Ventura pleaded guilty to a superseding indictment charging him with conspiracy to distribute and possess with intent to distribute 400 grams or more of fentanyl. In July 2024, Jasdrual Perez pleaded guilty and is scheduled to be sentenced on Dec. 16, 2024. Ventura and Perez were arrested and charged in February 2022 and have remained in custody since.
In September 2019, an investigation began into a drug trafficking organization (DTO) lead by Jasdrual Perez, based in Providence, Rhode Island, known to manufacture large quantities of fentanyl pills designed to appear like pharmaceutical grade oxycodone/Percocet pills and distribute them and other controlled substances throughout the United States. Ventura was a trusted member of the DTO and maintained one of the drug stash locations. Ventura transported cash and kilogram quantities of drugs to and from New York on behalf of the DTO, distributed thousands of fentanyl pills to wholesale customers in Massachusetts and was paid by the DTO for his work as a drug distributor. Ventura also distributed fentanyl and cocaine to his own customers, including one who suffered a non-fatal overdose at a DTO stash house where Ventura resided. In February 2022, two industrial grade pill presses, approximately 20 kilograms of powdered fentanyl, pressed fentanyl pills and other items, including kilograms of pill binder used in the large-scale manufacturing of clandestinely pressed fentanyl pills, were seized.
United States Attorney Joshua S. Levy; Stephen Belleau, Acting Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Jonathan Wlodyka, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today. Special assistance in the investigation was provided by the United States Attorney’s Office for the District of Rhode Island; the Federal Bureau of Investigation, Providence Resident Agency; the Drug Enforcement Administration, Providence Field Office; Rhode Island State Police; and the Cranston, Warwick and West Warwick Police Departments. Assistant U.S. Attorneys Lindsey E. Weinstein and Kunal Pasricha of the Narcotics & Money Laundering Unit are prosecuting the case.
This operation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations. 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.
The details contained in the charging documents are allegations. The remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Revere Man Pleads Guilty to Ammunition Offense in Connection with Everett ShootingRead the Press Release
BOSTON – A Revere man pleaded guilty yesterday in federal court in Boston to illegally possessing ammunition in connection with a January shooting in a residential neighborhood of Everett.
Kenneth Munoz, 27, pleaded guilty to one count of being a felon in possession of ammunition. U.S. Senior District Court Judge William G. Young scheduled sentencing for April 9, 2025.
On the afternoon of Jan. 2, 2022, three individuals fired over 20 shots in an Everett neighborhood causing ballistic damage in the surrounding area, including bullet holes inside of bedrooms and living rooms in surrounding residences. The shooting was captured on video surveillance from nearby residences. Munoz was identified as one of the two shooters. Munoz is prohibited from possessing firearms and ammunition due to prior convictions.
The charge of being a felon in possession of ammunition provides for a sentence of up to 10 years in prison, up to three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
United States Attorney Joshua S. Levy, James M. Ferguson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, Everett Police Chief Paul Strong and Chelsea Police Chief Keith E. Houghton made the announcement. Assistant U.S. Attorney Sarah Hoefle of the Organized Crime & Gang Unit is prosecuting the case.
Repeat offender who was involved in a gun battle on Seattle’s Capitol Hill sentenced to 16 years in prisonRead the Press Release
Seattle – A 50-year-old repeat offender was sentenced today in U.S. District Court in Seattle to 16 years in prison for possessing firearms while distributing drugs and violating his conditions of supervision from prior convictions, announced U.S. Attorney Tessa M. Gorman. Ruchell Gilbert was on supervised release for a 2012 conviction for illegal firearms possession and drug trafficking, when he became involved in a shoot-out in Seattle’s Capitol Hill neighborhood. One woman died after being hit by gunfire. At today’s sentencing hearing U.S. District Judge Ricardo S. Martinez said, “A young woman died that night from a gun battle on Capitol Hill. That is exactly the kind of danger that occurs when you have people dealing drugs while armed with firearms.”
“This case is a stark reminder of why it is illegal for felons to possess firearms,” said U.S. Attorney Gorman. “In this case Mr. Gilbert got into an argument about a blocking parked car and reached for his gun with tragic consequences. The death of 20-year-old Essence Greene Madden has devastated her family and loved ones, and robbed the community of someone who was focused on doing good in the world.”
According to records filed in the case, Gilbert had been released from prison and began his term of supervised release on May 30, 2022. Barely a year later, in July 2023, an unruly crowd gathered on Capitol Hill for a street racing event and Gilbert is seen driving a car which was ultimately blocked by another vehicle. Gilbert is seen getting out and getting into some kind of argument with those in the blocking car. On surveillance video from a nearby business it appears that Gilbert pulls up his shirt to flash a gun in his waistband. After returning to the car one of the people Gilbert confronted starts firing at his vehicle. Gilbert pulls his gun and fires back in a volley of at least four shots. One of the shots appears to hit a bystander in the head. Essence Greene Madden died at Harborview Medical Center.
Gilbert drove from the scene and later is taken to Harborview Medical Center for treatment of a gunshot wound. When federal probation officers learned Gilbert had been involved in the shootout, they got a warrant for his arrest and to search his vehicle. In Gilbert’s truck they found distribution quantities of methamphetamine, fentanyl pills, cocaine, and marijuana as well as a loaded firearm. However, the firearm he used in the shoot-out has never been found.
On March 14, 2024, Gilbert pleaded guilty to Possession of Controlled Substances with Intent to Distribute and Carrying a Firearm During and in Relation to a Drug Trafficking Crime.
Today in court Essence Greene Madden’s father, Eldon Madden, said, “The decision that Mr. Gilbert made, changed the lives of our family, friends, and community…. (my daughter) was stripped of her life due to acts of anger – anger is what drove this incident…. My child did not deserve to die in the manner that she died in, she was on her way to being a productive, loving, caring, person who helped preserve life not take it away. That’s why she chose to work in the medical field.”
In asking for a 192-month sentence, prosecutors noted Gilbert’s lengthy history of violent crimes and his unwillingness to change even with court supervision. “Mr. Gilbert appeared to be doing well on supervision, but in reality, it was an act. In retrospect, it is clear that Mr. Gilbert continued to deal drugs and continued to carry firearms – firearms he was more than willing to use if he felt himself provoked,” prosecutors wrote in their sentencing memo.
Judge Martinez imposed five years of supervised release to follow the prison term.
The case was investigated by the Seattle Police Department and U.S. Probation Office.
The case was prosecuted by Assistant United States Attorney Vince Lombardi.
Raymore Man Sentenced for Drug Trafficking, Illegal FirearmsRead the Press Release
KANSAS CITY, Mo. – A Raymore, Mo., man was sentenced in federal court today for his role in a drug-trafficking conspiracy and for illegally possessing firearms.
Tony Diaz, 41, was sentenced by U.S. District Judge Greg Kays to nine years in federal prison without parole.
His brother and co-defendant, Serjio Diaz, 40, of Belton, Mo., was sentenced on Oct. 9, 2024, to 15 years in federal prison without parole.
On April 9, 2024, Serjio and Tony Diaz each pleaded guilty to one count of conspiracy to distribute heroin, methamphetamine, and cocaine, one count of possessing heroin with the intent to distribute, and one count of possessing firearms in furtherance of a drug-trafficking crime. Tony Diaz also pleaded guilty to one count of being a felon in possession of firearms. Serjio Diaz also pleaded guilty to one count of money laundering.
Serjio Diaz admitted that he was the primary organizer of the drug-trafficking organization during the conspiracy that lasted from Jan. 1, 2019, to June 22, 2021.
The investigation began on March 18, 2019, when federal agents interdicted and seized a package from California that contained more than 4.5 kilograms of methamphetamine, which was addressed to Serjio Diaz’s residence. On the same day, federal agents also interdicted and seized a package from California that contained more than three kilograms of methamphetamine, which was addressed to the residence of Tony Diaz.
During the course of the investigation, investigators conducted 23 controlled transactions from Serjio and Tony Diaz, utilizing an FBI confidential source. Over the course of these controlled purchases, law enforcement purchased more than seven kilograms of methamphetamine, more than six kilograms of heroin, and 468.6 grams of cocaine from Serjio and Tony Diaz for a total of $243,900.
In one transaction, for example, the confidential source purchased a kilogram of methamphetamine for $9,000 from Tony Diaz. In another instance, the confidential source purchased 222.4 grams (7.5 ounces) of cocaine from Serjio Diaz for $7,000.
On June 22, 2021, law enforcement officers arrested Serjio and Tony Diaz and searched Serjio Diaz’s residences and vehicles. Officers found almost nine kilograms of heroin, 166 grams of cocaine, six bags of pills that contained fentanyl and weighed a total of 78 grams, a Glock 9mm semi-automatic pistol, and $82,250 in cash.
Officers searched Tony Diaz’s residence and found 1,128 grams of suspected heroin, 28 grams of suspected cocaine, a Zastava Arms 7.62x39mm semi-automatic rifle, a Romarm Cugir 7.62x39mm semi-automatic rifle, and $5,461 in cash in Tony Diaz’s bedroom. Officers also found a Remington Arms .22-caliber rifle in a shed, one pound of suspected marijuana in his Lincoln Navigator SUV, and a Ruger 9mm semi-automatic pistol and 3.4 grams of suspected marijuana in his BMW X5.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Tony Diaz has a prior felony conviction for possession of a controlled substance.
From May 1, 2019, to Dec. 31, 2020, Serjio Diaz deposited 93 money orders, totaling $82,145, into either his personal bank account or the bank account of his business, Imperial Window & Gutter Cleaning, LLC. Serjio Diaz went to multiple post offices on the same date to purchase money orders; 21 of those purchases occurred soon after a controlled drug purchase was made by law enforcement in this investigation. Serjio Diaz limited his purchase to a maximum of $2,000 at each post office in order to avoid federal reporting requirements.
Co-defendant Maria Jasmin Lopez, 24, of Phoenix, Arizona, also pleaded guilty to her role in the drug-trafficking conspiracy and was sentenced on Aug. 1, 2023, to 11 years and two months in federal prison without parole.
Co-defendant Vicente Aguilera pleaded guilty to using a cell phone to facilitate a drug-trafficking conspiracy and was sentenced on Nov. 1, 2024, to 16 months in federal prison without parole.
This case is being prosecuted by Assistant U.S. Attorney Bradley K. Kavanaugh. It was investigated by the U.S. Postal Inspection Service, the FBI and the Jackson County Drug Task Force.
Organized Crime and Drug Enforcement Task Force
This case 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.
Rapid City Man Sentenced to Nine Years in Federal Prison for Illegal Possession of FirearmRead the Press Release
RAPID CITY - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Camela C. Theeler has sentenced a Rapid City, South Dakota, man convicted of Possession of a Firearm by a Prohibited Person. The sentencing took place on December 11, 2024.
Charles Colhoff, age 36, was sentenced to nine years in federal prison, followed by three years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Colhoff was indicted by a federal grand jury in February 2024. He pleaded guilty on October 3, 2024.
On November 4, 2023, Colhoff was involved in a shooting in Rapid City where he and another individual exchanged gunfire following an argument. Colhoff was uninjured but the other individual sustained two gunshot wounds and required surgery. Officers processing the scene located three 9mm cartridge casings related to the shooting. Colhoff was located by law enforcement on November 11, 2023, and found to be in possession of a Browning 9mm semi-automatic pistol believed to be the same pistol Colhoff used in the shooting. Ballistics testing was conducted, which confirmed the three 9mm casings recovered at the shooting scene were fired from the pistol recovered from Colhoff. Colhoff knew he was prohibited from possessing firearms based on a prior federal felony offense, which also involved a firearm.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pennington County Sheriff's Office, and the Rapid City Police Department. Assistant U.S. Attorney Benjamin Patterson prosecuted the case.
Colhoff was immediately remanded to the custody of the U.S. Marshals Service.
Port St. Lucie Man Sentenced to 15 years in Prison for Third Bank Robbery ConvictionRead the Press Release
MIAMI – A Port St. Lucie man was sentenced to 15 years in prison after pleading guilty to bank robbery, which is his third such conviction.
David Abram Ziesel, 45, previously pled guilty to robbing a bank in Fellsmere, Fla. According to court records, in January of 2024, Ziesel entered the bank with his face and head covered, and immediately began shouting, “This is a robbery!” Ziesel demanded bank employees put cash in his pillowcase, and then Ziesel fled the bank. Law enforcement officers quickly located Ziesel’s vehicle as it traveled at speeds of over 100 m.p.h. Ziesel then led officers on a high-speed chase down I-95 and into the City of Fort Pierce, weaving in and out of cars, driving down the wrong side of the road, and running red lights. The pursuit ended when Ziesel crashed his car into another vehicle, and it came to rest against a power pole.
U.S. Attorney Markenzy Lapointe for the Southern District of Florida, and Jeffrey B. Veltri, Special Agent in Charge, FBI, Miami Field Office, made the announcement.
FBI Miami investigated this case with assistance from the Fellsmere Police Department, Florida Highway Patrol, and Indian River County Sheriff’s Office. Assistant U.S. Attorney Justin Hoover is prosecuting the case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov under case number 24-cr-14009.
###
Ponchatoula Woman Sentenced to Prison for Embezzling from EmployerRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that on Tuesday, December 10, 2024, ANGELA C. MITCHELL (“MITCHELL”), age 49, of Ponchatoula, Louisiana was sentenced to a year and a day in prison by U.S. District Judge Greg G. Guidry. MITCHELL had previously pleaded guilty to access device fraud in connection with her embezzlement from a Covington, Louisiana company ( “Company A” in court documents) where she worked from October 2016 to June 2018.
According to court records, MITCHELL embezzled approximately $116,998.70 from Company A by, among other things, fraudulently transferring funds from Company A’s bank accounts via electronic transfers and by drafting unauthorized checks to herself. MITCHELL committed the fraud during her employment, and continued illegally accessing Company A’s accounts after she was terminated in June 2018.
In addition to the term of imprisonment, Judge Guidry ordered MITCHELL to pay $116,998.70 in restitution to Company A. Judge Guidry also sentenced MITCHELL to three years of supervised release and ordered her to pay a $100 mandatory special assessment fee.
U.S. Attorney Evans praised the work of the Homeland Security Investigations - New Orleans Field Office, in investigating this matter. Assistant U.S. Attorney Matthew R. Payne, of the Financial Crimes Unit, is in charge of the prosecution.
Pawn Shop Owners Charged with Purchasing, Trafficking Millions of Dollars of Stolen GoodsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Larry Leonard, 60, and Nathaniel “Nat” Leonard, 68, both of Philadelphia, Pennsylvania, were charged by indictment with conspiracy to transport and sell stolen goods in interstate commerce and interstate transportation of stolen property. Larry Leonard was also charged with money laundering.
The defendants, who are cousins, jointly ran three pawn shops: Society Hill Loan and K&A Money Loan Pawnbrokers (“K&A”), both in Philadelphia, and Lou’s Jewelry and Pawnshop (“Lou’s Jewelry”) in Wilmington, Delaware.
Larry Leonard controlled the day-to-day operations of K&A and oversaw the day-to-day operations of Lou’s Jewelry, and Nat Leonard controlled the day-to-day operations of Society Hill Loan.
The indictment alleges that the defendants were using their businesses to buy and sell large volumes of new, stolen, in-box merchandise supplied by two main groups of people.
The first group, known colloquially as “boosters,” collectively stole millions of dollars of new retail merchandise from retailers in the Philadelphia and Delaware region, and elsewhere, including from The Home Depot, Lowe’s, Target, Walmart, Best Buy, CVS, Rite Aid, Safeway, and others, which the boosters then sold to the Leonards’ pawn shops for cash.
The other group, referred to by the defendants as “mooks,” collectively stole millions of dollars of new retail merchandise from across the United States, which the “mooks” then resold in bulk quantities to the defendants and other pawn shop employees for cash on a recurring basis.
The defendants are alleged to have transferred the stolen goods from Lou’s Jewelry in Delaware and K&A in the Kensington section of Philadelphia to Society Hill Loan in South Philadelphia, where the defendants listed the stolen merchandise for sale via the Society Hill Loan eBay site, which they controlled.
From November 2019 through December 2023, the Leonards are alleged to have sold more than $19 million in stolen merchandise via their eBay site. The defendants are alleged to have shipped the stolen merchandise from Society Hill Loan in Philadelphia to customers across the country.
Larry Leonard is also charged with three counts of money laundering for using the proceeds of the illegal sale of stolen merchandise to pay off more than $120,000 in credit card bills from December 2022 through April 2023.
If convicted, Larry Leonard faces a maximum possible sentence of 45 years’ imprisonment and Nathaniel Leonard faces a maximum possible sentence of 15 years’ imprisonment.
This case was investigated by Homeland Security Investigations, with assistance from the U.S. Postal Inspection Service, the IRS, Delaware State Police, and the Philadelphia Police Department. The case is being prosecuted by Assistant United States Attorneys Matthew T. Newcomer and S. Chandler Harris.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Omaha Man Sentenced to 15 Years for Possession of Fentanyl PillsRead the Press Release
United States Attorney Susan Lehr announced that Rafael Magana, age 31, of Omaha, Nebraska, was sentenced December 13, 2024, in federal court in Omaha for three drug trafficking crimes involving fentanyl, including possession with intent to distribute 400 grams or more of fentanyl. Chief United States District Judge Robert F. Rossiter, Jr., sentenced Magana to 180 months’ imprisonment. There is no parole in the federal system. After Magana’s release from prison, he will begin a 10-year term of supervised release.
An investigation that began in March 2023 identified Magana as a supplier of fentanyl pills in Omaha. A confidential informant made four buys of fentanyl pills after the informant contacted Magana. Magana’s residence was searched pursuant to a warrant on July 24, 2023. Agents found more than 1,000 fentanyl pills and seized $6,680 cash. At the residence, agents also found paperwork for a storage unit. Magana gave consent to search the storage unit, which uncovered another 13,800 fentanyl pills.
Magana faced an enhancement mandatory minimum for the possession charge because of a 2015 federal conviction for conspiracy to distribute oxycodone. The $6,680 cash will be ordered forfeited to the United States as proceeds of illegal drug trafficking.
The indictment also charged Magana and two co-defendants with conspiracy to distribute fentanyl. Zacharie Stinson, age 31, of Omaha pleaded guilty and was sentenced in September to 57 months in prison. Lucas Ehly, age 31, of Omaha has pleaded guilty and is scheduled to be sentenced December 20, 2024.
This case was investigated by the Drug Enforcement Administration and the Omaha Metro Drug Task Force.
Ogden Man Found Guilty of Possessing a Firearm and Ammunition as a Convicted FelonRead the Press Release
Salt Lake City, Utah – A federal jury in Salt Lake City returned a guilty verdict Thursday against a convicted felon after he unlawfully possessed a firearm and ammunition in 2022.
Michael Anthony Rangel, 42, of Ogden, Utah was charged by indictment in September 2022.
According to court documents and evidence presented at trial, in July 2022, officers with the Ogden Metro Gang Task Force conducted a traffic stop on a vehicle with Mr. Rangel as the passenger. Rangel, knowing he was a convicted felon and restricted from possessing a firearm and ammunition, possessed a Taurus PT111 G2 pistol. Officers seized the firearm and associated ammunition, and it was later discovered the firearm was manufactured outside the State of Utah and had traveled through interstate commerce.
Rangel’s sentencing will be held at a later date before U.S. District Court Judge Howard C. Nielson, Jr. at the Orrin G. Hatch United States District Courthouse in downtown Salt Lake City.
United States Attorney Trina A. Higgins of the District of Utah made the announcement.
The case is being investigated by Ogden Metro Gang Task Force.
Special Assistant United States Attorney Branden B. Miles and Assistant United States Attorney Luisa Gough of the U.S. Attorney’s Office for the District of Utah are prosecuting 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 gun violence and other violent crime, 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.
###
Oak Creek company to pay over $2.3 million to resolve allegations it submitted false claims to obtain a Paycheck Protection Program LoanRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on December 3, 2024, Zund America, Inc., a corporation located in Oak Creek, Wisconsin, agreed to pay $2,300,825 to resolve allegations that it violated the False Claims Act by submitting false claims to obtain a Paycheck Protection Program (PPP) loan for which it was not eligible.
Congress created the PPP in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. Under the PPP, eligible businesses could receive loans guaranteed by the SBA and, if the business spent the loan proceeds on qualified expenses, SBA would repay the loan and any accrued interest on the borrower’s behalf. In December 2020, Congress authorized certain borrowers who received an earlier PPP loan to obtain an additional “second-draw” loan. The second-draw loan program included additional eligibility requirements. Under the second-draw loan rules, for a company to be deemed a small business eligible for a second loan, the company, together with any corporate affiliates, had to employee 300 or few individuals.
Zund America is owned by a Swiss holding company, Zund Holding AG. Through common ownership and management, Zund America is affiliated with 19 other Zund entities that operate across the globe. In February 2021, Zund America received a second-draw PPP loan, which the SBA later repaid. The United States alleges that Zund America was not eligible for this loan because Zund America and its affiliates had more than 300 employees.
“Congress created the PPP to help small businesses and their employees survive the COVID-19 pandemic,” said U.S. Attorney Haanstad. “To make funds available as quickly as possible and save jobs, Congress and the SBA trusted companies to certify that they complied with the eligibility rules. Unfortunately, Zund America did not fulfill its obligations, and instead submitted false information to obtain its second-draw loan. This settlement requires Zund America to repay the SBA plus a substantial penalty.”
“The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office, SBA’s Office of Inspector General and other Federal law enforcement agencies, as well as private individuals who uncover fraudulent conduct to recover the product of this fraud as well as penalties,” said SBA General Counsel Therese Meers.
The government’s investigation resulted from a whistleblower complaint filed under the qui tam provisions of the False Claims Act. The whistleblower will receive a share of the settlement. This case is pending as United States ex rel. GNGH 2, Inc. v. Zund America, Inc., No. 24-cv-0661.
Together with the SBA, Assistant United States Attorney Michael Carter represented the government in this matter. The settlement agreement states allegations only; Zund America, Inc., does not admit liability for the allegations.
# # #
For Additional Information Contact:
Public Information Officer
414-297-1700
Follow us on Twitter
OFAC-Sanctioned Afghan Man Sentenced to 30 Years in Prison for Narco-Terrorism and Witness TamperingRead the Press Release
Haji Abdul Satar Abdul Manaf, 59, of Afghanistan, also known as Haji Abdul Sattar Barakzai, was sentenced to 30 in prison for attempting to import heroin into the U.S., engaging in narco-terrorism for the benefit of the Taliban, attempting to engage in narco-terrorism for the benefit of the Haqqani Network, and witness tampering offenses. Manaf was convicted after a two-week jury trial that concluded in August.
According to court documents, evidence at trial, and statements made in public court proceedings, the Treasury Department sanctioned Manaf in June 2012, pursuant to the U.S.’ terrorism sanctions authority, Executive Order No. 13224, for storing or moving money for the Taliban. Upon announcing the sanctions against Manaf, the Treasury Department stated that Manaf “donated thousands of dollars to the Taliban to support Taliban activities in Afghanistan and has distributed funds to the Taliban” and provided money “to aid the Taliban’s fight against Coalition Forces.”
Beginning in at least January 2018, Manaf attempted to import large quantities of heroin into the United Sates; paid benefits to the Taliban to support his heroin trafficking; and attempted to provide financial support to the Haqqani Network, a violent faction of the Taliban. Specifically, Manaf participated at in-person meetings, recorded telephone calls, and electronic communications with five individuals whom Manaf understood to be affiliated with an international drug trafficking organization. During those meetings, Manaf helped arrange to import large quantities of heroin into the U.S. with the assistance of — and recognizing that some of the proceeds of that narcotics trafficking would be provided to — the Taliban and the Haqqani Network. Four of these individuals were, in fact, DEA confidential sources. The fifth was an undercover DEA agent (the UC).
The Haqqani Network and the Taliban have committed highly public acts of terrorism against U.S. interests, including U.S. and coalition forces in Afghanistan. In August 2018, Manaf sold the UC a ten-kilogram shipment of heroin in Afghanistan, after the UC told Manaf that the heroin would ultimately be imported into the United States for sale in New York. Manaf repeatedly told the UC that Manaf had paid the Taliban in connection with the production of the ten-kilo shipment and reported that heavily armed members of the Taliban would guard and transport future heroin shipments for Manaf and the UC. In August 2018, Manaf facilitated the transfer of thousands of dollars of what he believed to be narcotics proceeds through his money-remitting business to individuals Manaf had been advised were members of the Haqqani Network. Manaf subsequently agreed to supply the UC with thousand-kilogram loads of heroin for importation into the United States.
Following his arrest overseas and subsequent extradition, while incarcerated in New York pending trial in this case, Manaf directed members of his family in Afghanistan to kidnap and threaten a DEA source — a witness to his crimes — in an effort to silence him. Specifically, in a series of recorded prison calls in February and March 2019, Manaf directed his brothers to bring the source to Manaf’s family home, to “not let him go even for a minute,” to take the source’s phone, and to hand the source over to a “security chief” who would make the source “confess like a parrot” and “tell the whole story in two minutes.” Manaf’s brothers did just as he directed — they kidnapped that DEA source at gunpoint in Afghanistan and threatened to kill him.
In addition to the prison term, Manaf was sentenced to five years of supervised release and ordered to forfeit the proceeds of his crimes.
The DEA Special Operations Division’s Bilateral Investigations Unit; the DEA European Regional Director; the DEA Copenhagen, Canberra, Dubai, Islamabad, Kabul, New Delhi, and Sydney Country Offices; the Government of Estonia; and the Australian Criminal Intelligence Commission investigated the case.
Assistant U.S. Attorneys Sam Adelsberg, Nicholas S. Bradley, and Kimberly J. Ravener for the Southern District of New York are prosecuting the case with assistance from Trial Attorney Joshua Champagne of the National Security Division’s Counterterrorism Section.
OFAC-Sanctioned Afghan Man Sentenced to 30 Years in Prison for Narco-Terrorism and Witness TamperingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today that HAJI ABDUL SATAR ABDUL MANAF, a/k/a “Haji Abdul Sattar Barakzai,” was sentenced to 30 years in prison for attempting to import heroin into the U.S., engaging in narco-terrorism for the benefit of the Taliban, attempting to engage in narco-terrorism for the benefit of the Haqqani Network, and witness tampering offenses. MANAF was convicted after a two-week jury trial that concluded in August 2024. The sentence was imposed by U.S. District Judge Jed S. Rakoff, who also presided over the trial.
U.S. Attorney Damian Williams said: “Haji Abdul Satar Abdul Manaf was in the business of peddling poison. He leveraged the help of terrorists—the Taliban—to advance his drug business and to expand his drug trafficking operation to the United States. And he did not hesitate to order the kidnapping of a critical witness at gunpoint in an effort to silence him. Thankfully, our law enforcement allies, in partnership with the career national security prosecutors of this Office, put an end to his years of narco-terrorism.”
DEA Administrator Anne Milgram said: “Haji Abdul Satar Abdul Manaf used heroin as a weapon of war, funding the Taliban and Haqqani Network to spread terror and death. His poison targeted our streets while his profits fueled violence against U.S. coalition forces. Today's sentence sends a clear message: narco-terrorists who bankroll terror and threaten American lives will be brought to justice, no matter where they hide.”
According to the Complaint, Indictment, evidence at trial, and statements made in public court proceedings:
In June 2012, the U.S. Treasury Department sanctioned MANAF pursuant to the U.S.’s terrorism sanctions authority, Executive Order No. 13224, for storing or moving money for the Taliban. In announcing the sanctions against MANAF, the Treasury Department stated that MANAF “donated thousands of dollars to the Taliban to support Taliban activities in Afghanistan and has distributed funds to the Taliban” and provided money “to aid the Taliban’s fight against Coalition Forces.”
Beginning in at least January 2018, MANAF attempted to import large quantities of heroin into the U.S.; paid benefits to the Taliban to support his heroin trafficking; and attempted to provide financial support to the Haqqani Network, a violent faction of the Taliban. Specifically, MANAF participated in in-person meetings, recorded telephone calls, and electronic communications with five individuals whom MANAF understood to be affiliated with an international drug trafficking organization. During those meetings, MANAF helped arrange to import large quantities of heroin into the U.S. with the assistance of—and recognizing that some of the proceeds of that narcotics trafficking would be provided to—the Taliban and the Haqqani Network. Four of these individuals were, in fact, DEA confidential sources. The fifth was an undercover DEA agent (the “UC”).
The Haqqani Network and the Taliban have committed highly public acts of terrorism against U.S. interests, including U.S. and coalition forces in Afghanistan. In August 2018, MANAF sold the UC a ten-kilogram shipment of heroin (the “Ten Kilo Shipment”) in Afghanistan, after the UC told MANAF that the heroin would ultimately be imported into the United States for sale in New York. MANAF repeatedly told the UC that MANAF had paid the Taliban in connection with the production of the Ten Kilo Shipment, and reported that heavily armed members of the Taliban would guard and transport future heroin shipments for MANAF and the UC. In August 2018, MANAF facilitated the transfer of thousands of dollars of what he believed to be narcotics proceeds through his money-remitting business to individuals MANAF had been advised were members of the Haqqani Network. MANAF subsequently agreed to supply the UC with thousand-kilogram loads of heroin for importation into the United States.
Following his arrest overseas and subsequent extradition, and while incarcerated in New York pending trial in this case, MANAF directed members of his family in Afghanistan to kidnap and threaten a DEA source—a witness to his crimes—in an effort to silence him. Specifically, in a series of recorded prison calls in February and March 2019, MANAF directed his brothers to bring the source to MANAF’s family home, to “not let him go even for a minute,” to take the source’s phone, and to hand the source over to a “security chief” who would make the source “confess like a parrot” and “tell the whole story in two minutes.” MANAF’s brothers did just as he directed—they kidnapped that DEA source at gunpoint in Afghanistan and threatened to kill him.
* * *
In addition to the prison term, MANAF, 59, of Afghanistan, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative efforts of the DEA’s Special Operations Division’s Bilateral Investigations Unit; the DEA European Regional Director; the DEA Copenhagen, Canberra, Dubai, Islamabad, Kabul, New Delhi, and Sydney Country Offices; the Government of Estonia; and the Australian Criminal Intelligence Commission.
This prosecution is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Sam Adelsberg, Nicholas S. Bradley, and Kimberly J. Ravener are in charge of the prosecution, with assistance from Trial Attorney Joshua Champagne of the Counterterrorism Section.
Newark Businessman Admits Bribing Former Newark Deputy Mayor and Director of Newark Department of Economic and Housing DevelopmentRead the Press Release
NEWARK, N.J. – A Newark business owner admitted bribing a former city official in exchange for that official’s assistance in acquiring and redeveloping Newark-owned properties, U.S. Attorney Philip R. Sellinger announced.
Frank Valvano, Jr., 57, of Florham Park, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to two counts of an indictment charging him with honest services fraud and bribery.
“As he admitted in court, Frank Valvano, Jr. provided cash, jewelry, and other benefits to a public official in exchange for the official’s use of his influence to further Valvano’s private business interests, defrauding the people of Newark of their right to the official’s honest services. He corrupted the public official’s independent judgment and violated the public trust for his own financial gain. Our office will continue to work with our law enforcement partners to make sure that the people of New Jersey are protected from public officials whose greed overrides their sworn duty to serve the people and from the individuals who bribe those officials.”
U.S. Attorney Philip R. Sellinger
According to documents filed in the case and statements made in court:
Valvano admitted bribing Carmelo Garcia – who served as deputy mayor and director of the Newark Department of Economic and Housing Development (DEHD) and executive vice president and chief real estate officer of the Newark Community Economic Development Corporation (NCEDC) – in exchange for Garcia’s assistance with the acquisition and redevelopment of city-owned property.
From 2017 through April 2019, Valvano, Irwin Sablosky, and others provided significant monetary payments and other benefits to Garcia while he was serving as a high-level Newark official, and prior to that, as an executive officer of the NCEDC (now known as Invest Newark), in exchange for Garcia’s use of his official positions and influence within the city of Newark and the NCEDC to advance real estate development matters of interest to Sablosky and Valvano. These matters included obtaining preliminary designation letters for Sablosky and Valvano and securing Newark-approved redevelopment agreements (RDAs) that allowed them to purchase and acquire various Newark-owned properties for redevelopment, and to ensure that Garcia did not use his influence and authority to act against their interests. In addition to cash, Valvano and Sablosky also gifted Garcia jewelry, including multiple high-end watches and chains, from their pawnbroker and jewelry business. They also paid for Garcia’s expenses on a trip to Miami, Florida.
Phone records and text messages obtained by law enforcement show extensive communication between Garcia, Valvano, Sablosky, and others throughout this period of time, including text messages in which Garcia arranged to personally collect cash provided by Valvano and Sablosky. In one instance, in June 2018, Valvano and Sablosky, through an intermediary, supplied Garcia, then the city’s acting deputy mayor and director of the city’s DEHD, $25,000 in cash as part of the stream of bribes provided to Garcia.
The Travel Act charge in Count 19 of the indictment carries a maximum potential penalty of 5 years in prison. The bribery charge in Count 26 carries a maximum penalty of 10 years in prison. All charges are punishable by a fine of $250,000 or twice the amount of the pecuniary gain from the offense. Sentencing is scheduled for April 16, 2025.
Valvano originally was charged by indictment in October 2021 with Sablosky, 64, of Springfield, New Jersey, and Garcia, 49, of Hoboken, New Jersey. Garcia previously pleaded guilty to conspiracy to defraud the city of Newark and the NCEDC of Garcia’s honest services, honest services wire fraud, and receiving bribes in connection with the business of a federally funded local government and organization and is awaiting sentencing. Sablosky previously pleaded guilty to conspiracy to honest services wire fraud and bribery and is awaiting sentencing.
U.S. Attorney Sellinger credited special agents of the FBI’s Newark Field Office, under the direction of Acting Special Agent in Charge Nelson I. Delgado; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jenifer I. Piovesan, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Vicky Vazquez, with the investigation leading to today’s plea.
The government is represented by Elaine K. Lou, Deputy Chief of the Criminal Division, and Katherine J. Calle and Edeli Rivera of the U.S. Attorney’s Office’s Special Prosecutions Division.
valvanoetal.indictment.pdf
New York Man Sentenced to 69 Months in Prison for Hacking, Credit Card Trafficking and Money Laundering ConspiraciesRead the Press Release
BOSTON – A New York City man has been sentenced in federal court in Boston for conspiracies to engage in computer hacking, trafficking in stolen payment card numbers and money laundering.
Vitalii Antonenko, 32, was sentenced by United States District Judge William G. Young to time served plus 10 days (69 months and 18 days in prison) to be followed by three years of supervised release. The Court ordered Antonenko to pay approximately $1.8 million in restitution to a victim in the case. In September 2024, Antonenko pleaded guilty to one count of conspiracy to gain unauthorized access to computer networks and to traffic in unauthorized access devices, and one count of money laundering conspiracy. Antonenko was arrested and detained in March 2019 on money laundering charges at New York’s John F. Kennedy International Airport after he arrived there from Ukraine carrying computers and other digital media that held hundreds of thousands of stolen payment card numbers. He was indicted by a federal grand jury in May 2020.
Antonenko and co-conspirators scoured the internet for computer networks with security vulnerabilities that were likely to contain credit and debit card account numbers, expiration dates, and card verification values (Payment Card Data) and other personally identifiable information (PII). They used a hacking technique known as a “SQL injection attack” to access those networks without authorization, extracted Payment Card Data and other PII, and transferred it for sale on online criminal marketplaces. Once a co-conspirator sold the data, Antonenko and others used Bitcoin as well as traditional bank and cash transactions to launder the proceeds in order to disguise their nature, location, source, ownership and control. The conspiracy’s victims included a hospitality business and non-profit scientific research institution, both located in eastern Massachusetts.
United States Attorney Joshua S. Levy and Andrew Murphy, Special Agent in Charge of the U.S. Secret Service, Boston Field Office made the announcement today. Assistant U.S. Attorney Seth B. Kosto, Chief of the Securities, Financial & Cyber Fraud Unit, prosecuted the case.
New Orleans Man Pleads Guilty of Federal Gun Control Act ViolationRead the Press Release
NEW ORLEANS, LOUISIANA – LEO TATE (“TATE”), age 31, a resident of New Orleans, pled guilty on December 11, 2024, before United States District Judge Jane Triche Milazzo to being a felon in possession of a firearm, a violation of the Federal Gun Control Act, announced U.S. Attorney Duane A. Evans.
According to court records, in April 2024, Federal Bureau of Investigation agents stopped a vehicle occupied by TATE, who agents knew had a felony arrest warrant from Orleans Parish, and another man, for whom agents had a federal warrant to obtain a DNA swab. When agents stopped the vehicle, TATE and the other man attempted to flee, but were apprehended shortly after exiting the vehicle. During a search of the vehicle, agents found a Glock pistol with an extended magazine and a round in the chamber that TATE admitted was his. TATE also admitted knowing he was prohibited from possessing a firearm, due to his numerous prior felony convictions.
Judge Milazzo set sentencing for January 30, 2025. TATE faces a maximum term of fifteen years imprisonment, up to three years of supervised release, a fine of up to $250,000, and a mandatory special assessment fee of $100.
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 Federal Bureau of Investigations and the New Orleans Police Department. It is being prosecuted by Assistant United States Attorney David Haller, Senior Litigation Counsel and PSN Coordinator.
New Orleans Man Guilty of Firearm Possession to Further Drug TraffickingRead the Press Release
NEW ORLEANS, LOUISIANA – JOSHUA WILLIAMS (“WILLIAMS”), age 21, pled guilty on December 12, 2024 before U.S. District Judge Nannette Jolivette Brown, to possession of a firearm in furtherance of a drug trafficking crime, in violation of 18 U.S.C. § 924(c)(1)(A)(i), announced U.S. Attorney Duane A. Evans.
According to court documents, WILLIAMS sold marijuana in the New Orleans area, including through his Instagram accounts. WILLIAMS frequently posted photos and videos to Instagram showing him in possession of firearms, marijuana, and large amounts of cash.
Law enforcement tracked a GMC Sierra pickup truck, stolen in New Orleans to WILLIAMS’s residence. Officers executed a search warrant at WILLIAMS’s residence and recovered the following items: a Glock Model 22, .40 caliber firearm (reported stolen), a Glock Model 19, nine-millimeter firearm, and a large glass jar containing 75 grams of marijuana, some of which was packaged for distribution. Both firearms were loaded and had extended magazines. WILLIAMS possessed the firearms and ammunition in furtherance of his drug trafficking crime.
WILLIAMS faces a mandatory minimum sentence of five years up to life in prison, up to three years of supervised release, up to a $250,000 fine and a mandatory special assessment fee of $100.
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 theUnited States Bureau of Alcohol, Tobacco, Firearms, and Explosives and the New Orleans Police Department. It is being prosecuted by Assistant United States Attorney Mary Katherine Kaufman of the General Crimes Unit.
Michigan Man Sentenced for Methamphetamine TraffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Drake D. Dodson-Williams, 33, of Southgate, Michigan, was sentenced to 70 months in federal prison for possession with intent to distribute methamphetamine.
According to court documents and statements made in court, Dodson-Williams was the leader of a drug trafficking organization, operating from Michigan to Harrison County, West Virginia. During a traffic stop on Dodson-Williams’s vehicle, officers seized cocaine, heroin, methamphetamine, and cash. The defendant has a criminal history that includes multiple drug convictions.
Dodson-Williams will serve three years of supervised release following his prison sentence.
Assistant U.S. Attorney Christie Utt prosecuted the case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives; the Greater Harrison Drug Task Force, a HIDTA-funded initiative; and the Harrison County Sheriff’s Office investigated.
Chief U.S. District Judge Thomas S. Kleeh presided.
Mexican National Sentenced to 15 Years in Federal Prison on Drug ChargesRead the Press Release
BOISE – Efren Alexander Aviles-Pacheco, 29, of Culiacan, Sinaloa, Mexico, illegally living in Ontario, Oregon, was sentenced to 15 years in federal prison for possession with intent to distribute methamphetamine, U.S. Attorney Josh Hurwit announced today. Senior U.S. District Court Judge B. Lynn Winmill also sentenced Aviles-Pacheco to serve 10 years of supervised release, but advised Aviles-Pacheco that he will most certainly be deported to Mexico after serving his sentence.
According to court records, Aviles-Pacheco, was arrested on November 22, 2022, in a motel room in Nampa. He was found in possession of 122 grams of methamphetamine, 365 grams of fentanyl, 29 grams of cocaine, $3,415 in cash, and a 9mm handgun. He pleaded guilty to possession with intent to distribute methamphetamine on August 5, 2024. In 2019, Aviles-Pacheco was previously convicted of the same charge in the District of Idaho. On February 12, 2019, Aviles-Pacheco was sentenced to 46 months in prison and was deported to Mexico after serving his sentence. Shortly after being deported, he returned to the United States and resumed his drug trafficking activities. At sentencing, Judge Winmill found that he was likely responsible for the death of at least two individuals who overdosed on drugs provided by him. Judge Winmill stated that “if ever there was a case that screamed out for a long prison sentence, this is the case.” Aviles-Pacheco is prohibited from possessing firearms due to his status of being an illegal alien, yet in both of his federal cases, he possessed handguns.
Aviles-Pacheco is the latest member of an Ontario, Oregon family that has been convicted of drug trafficking crimes.
- Aviles-Pacheco’s father, Efren Ramon Aviles-Lopez, a/k/a Marcelo Sanchez-Espinoza, was sentenced in the District of Idaho in 2015 to serve 20 years for conspiracy to distribute methamphetamine;
- His mother, Alma Loreno Pacheco-Ortiz, was sentenced in 2024 in the District of Oregon to time served and five years of supervised release after she was arrested transporting 40 pounds of methamphetamine, a kilo of heroin, and a firearm;
- His grandfather, Efren Avilez-Lopez, was sentenced in 2024 to 9 years in federal prison for possession with intent to distribute 20 pounds of methamphetamine in the District of Idaho;
- His grandmother, Maria Medina-Zeveda, was sentenced in 2024 to 37 months in federal prison for possession with intent to distribute 20 pounds of methamphetamine in the District of Idaho;
- His uncle, Victor Pacheco-Ortiz, was sentenced in 2024 to five years in federal prison for possession with intent to distribute 21 pounds of methamphetamine in the District of Idaho; and
- His sister, Esmeralda Aviles-Pacheco, was indicted, on December 10, 2024, on two counts of distributing methamphetamine and one count of distributing fentanyl in the District of Idaho. On December 11, 2024, she appeared in court on the indictment and entered a not guilty plea. A trial was scheduled for February 10, 2025.
“Through his repeated involvement in this longstanding drug trafficking operation in Oregon, this defendant has earned every day of his 15-year sentence,” said U.S. Attorney Hurwit. “I commend our prosecutors and thank our law enforcement partners—in both Idaho and Oregon—for dismantling criminal networks like this one and eliminating drug distribution pathways into Idaho.”
“We at the Drug Enforcement Administration and our partners work tirelessly to protect our community from people who sell drugs that harm and kill our citizens,” said David F. Reames, Special Agent in Charge, DEA Seattle Field Division. “Repeat offenders like Mr. Aviles-Pacheco richly deserve long prison terms, since it is clear that there is no other way to keep our communities safe from them. Make no mistake: If you deal drugs in Idaho, our team will hold you accountable.”
U.S. Attorney Hurwit commended the work of the Washington County Sheriff’s Office, the Nampa Police Department, the Drug Enforcement Administration and the High Desert Drug Task Force, with assistance from the Payette County Task Force, which led to the charges. Assistant U.S. Attorney Christian S. Nafzger prosecuted the case.
This prosecution is 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.
The High Desert Drug Task Force is a multi-jurisdictional narcotics task force that identifies, disrupts, and dismantles local, multi-state, and international drug trafficking organizations using an intelligence-driven, multi-agency prosecutor-supported approach. They are supported by the Oregon-Idaho High-Intensity Drug Trafficking Area (HIDTA).
An indictment is merely an allegation and defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
###
Mexican Felon Sentenced to Federal Prison for Drug Trafficking and Firearm ChargeRead the Press Release
SPARTANBURG, S.C. —Sergio Magallan-Tinoco, a/k/a “John Migo,” 45, of Michoacan, Mexico, was sentenced to 15 years in federal prison for possession with intent to distribute over five kilograms of cocaine and possession of a firearm in furtherance of the drug trafficking crime.
Evidence presented to the court showed that in the Fall of 2023, law enforcement in the Upstate conducted controlled purchases of fentanyl and cocaine from Magallan-Tinoco. Law enforcement later obtained a search warrant for Magallan-Tinoco’s residence, locating additional fentanyl and cocaine, along with a money counter, scales, and a loaded .380 caliber handgun. Magallan-Tinoco was found to be responsible for trafficking 20 kilograms of cocaine. Magallan-Tinoco has a prior conviction for possession with intent to distribute cocaine.
United States District Judge Donald C. Coggins sentenced Magallan Tinoco to 180 months imprisonment to be followed by a five year term of supervised release. A $400,000 forfeiture judgment was also issued against him. There is no parole in the federal system.
This prosecution is 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. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case was investigated by Homeland Security Investigations, Border Enforcement Security Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Spartanburg County Sheriff’s Office, Cherokee County Sheriff’s Office, Greenville County Sheriff’s Office, and Greenville County Multi-Jurisdictional Drug Enforcement Unit. Assistant U.S. Attorney Jamie Schoen is prosecuting the case.
###
Maximiliano Davila-Perez, Former Head of Bolivian Anti-Narcotics Agency, Extradited to the United States from Bolivia on Cocaine Importation and Firearms ChargesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today that MAXIMILIANO DAVILA-PEREZ, a/k/a “Macho,” was extradited from Bolivia and arrived in the U.S. this morning to face federal charges for conspiring to import cocaine into the U.S. and conspiring to use and possess machineguns in connection with this cocaine importation conspiracy. DAVILA-PEREZ will make his initial appearance in the Southern District of New York this afternoon before the Honorable Robyn F. Tarnofsky. DAVILA-PEREZ’s case is assigned to U.S. District Court Judge Denise L. Cote.
U.S. Attorney Damian Williams said: “As alleged, Maximiliano Davila-Perez abused his position as the head of Bolivia’s anti-narcotics law enforcement agency to instead aid the very narcotics traffickers he was entrusted to investigate and arrest. Along the way, he sought to use Bolivian law enforcement officers to guard and transport cocaine shipments and participate in the shipment of massive quantities of cocaine. While this conduct is abhorrent, it is sadly not shocking; instead, this is the latest example of our work with the DEA’s Special Operations Division in rooting out this type of cocaine-fueled corruption around the globe. Let this be another loud message to those who would abuse their positions to send ton-quantities of cocaine to the United States: our reach is global, our memory is long, and we will not allow you to continue to flood our country with cocaine without punishment. I commend the work of the career prosecutors of this Office, who have investigated and prosecuted these cases alongside the Special Operations Division for years and will continue to do so for as long as remains necessary.”
DEA Administrator Anne Milgram said: “Maximiliano Davila-Perez was supposed to fight the drug trade, but instead he fueled it. As the head of Bolivia's anti-narcotics agency, he turned law enforcement into a cocaine trafficking machine, seeking to flood our streets with poison. His betrayal of public trust ends here. Let this extradition serve as a warning: no corrupt official is untouchable, and the DEA will stop at nothing to bring criminals to justice, no matter where they hide.”
According to the allegations contained in the Superseding Indictment, other court filings, and statements made during court proceedings:[1]
Until in or about November 2019, DAVILA-PEREZ was the Director of Bolivia’s chief anti-narcotics law enforcement agency, Fuerza Especial de Lucha Contra el Narcotráfico (“FELCN”). In DAVILA-PEREZ’s role as Director of FELCN, he exploited his official position in furtherance of large-scale cocaine trafficking activities, including by seeking to divert resources away from investigating traffickers supported by DAVILA-PEREZ, and by providing heavily armed FELCN officers under his command as security for cocaine shipments. DAVILA-PEREZalso worked in partnership with large-scale cocaine suppliers who operated cocaine labs in Bolivia and agreed to ship more than a thousand kilograms of Bolivian cocaine to New York.
In or around July 2019, while DAVILA-PEREZ was still the Director of FELCN, DAVILA-PEREZ and his co-conspirators were recorded while they discussed a plot to send over one ton of cocaine to the U.S. via airplane from Bolivia. During that meeting, DAVILA-PEREZ suggested using particular airfields in Bolivia at which he controlled airport security and could divert law enforcement resources to provide cover while the aircraft was loaded with ton-quantities of cocaine. DAVILA-PEREZ also committed to providing uniformed FELCN officers armed with machineguns to guard the plane during loading and before takeoff. DAVILA-PEREZ explained that he charged by-the-kilogram rates for the protection of the cocaine load.
In November 2019, DAVILA-PEREZ was demoted from his post at FELCN but continued to use his political influence and law enforcement authority while he conspired to import ton-quantities of cocaine from Bolivia to the U.S. and provide armed paramilitary protection for those cocaine shipments. Indeed, between November 2019 and February 2020, during a series of recorded meetings and calls, DAVILA-PEREZ and his co-conspirators continued to arrange the anticipated cocaine shipment. During those meetings, DAVILA-PEREZ discussed the drug competition in the New York market; his continued promise to provide armed protection for the cocaine shipment; and the successful delivery of a 10-kilogram sample of cocaine in Lima, Peru, which was delivered on or about December 10, 2019, in anticipation of the larger cocaine shipment that DAVILA-PEREZ and his co-conspirators intended to import to the U.S. under DAVILA-PEREZ’s protection.
* * *
DAVILA-PEREZ, 60, of Bolivia, is charged with: conspiring to import cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison; and conspiring to use and carry machineguns during, and to possess machineguns in furtherance of, the cocaine importation conspiracy, which carries a maximum term of life in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding efforts of the Special Operations Division of the DEA Bilateral Investigations Unit for its ongoing assistance. He also thanked the DEA Southern Cone Division, the DEA Newark Field Division, the DEA Aviation Division, and the U.S. Department of Justice’s Office of International Affairs for securing extradition of DAVILA-PEREZ.
This prosecution is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Sam Adelsberg, Matthew J.C. Hellman, and David J. Robles are in charge of the prosecution.
The charges in the Superseding Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment, and the description of the Indictment and court filings set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Maryland Man Convicted of Sexual Assault on Baltimore Cruise ShipRead the Press Release
Baltimore, Maryland – After a two-week trial, a federal jury found Jalen Thomas Kelley, 22, Abingdon, Maryland, guilty of aggravated sexual abuse, sexual abuse, and assault within the territorial jurisdiction.
Erek L. Barron, U.S. Attorney for the District of Maryland announced the verdict with Special Agent in Charge William J. DelBagno, Federal Bureau of Investigation (FBI), Baltimore Field Office.
“Sexual violence is a horrific violation of personal autonomy and will not be tolerated. We will hold perpetrators accountable,” said U.S. Attorney Barron. “This verdict should send a message to survivors that they are heard, validated and supported.”
According to the evidence presented at trial, between January 1, and January 2, 2023, the defendant forcibly raped and assaulted the victim, who was a minor at the time, aboard the Carnival Legend. The cruise vessel was scheduled to return to Baltimore on January 2. In addition to the charged offenses, during trial, prosecutors presented testimony from six other individuals who alleged Kelley sexually assaulted them on separate occasions. Kelley faces a maximum sentence of life in prison. A federal district court judge will determine the sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
“We will never stop working to serve justice for the victims of predators like Mr. Kelley, no matter where the crime occurs,” said FBI Baltimore SAC DelBagno said. “Today’s conviction reflects the unwavering resolve of the FBI to protect our communities and keep Americans safe.”
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the “Resources” tab on the left of the page.
U.S. Attorney Barron commended the FBI, for its work in the case, and thanked the Harford County State’s Attorney’s Office; Harford Country Sherriff’s Office; Union County North Carolina District Attorney’s Office; Wingate University Campus Safety; and the Wingate Police Department for their assistance. Additionally, Mr. Barron thanked Assistant U.S. Attorneys Sean R. Delaney and Colleen Elizabeth McGuinn, who prosecuted the federal case. He also recognized FBI Special Agent Calista Walker and Legal Administrative Specialist Julie Jarman.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.
# # #
Man Sentenced to 18 Years in Prison for RobberiesRead the Press Release
AKRON, Ohio – Timothy Hyatt, 36, of Akron, has been sentenced to 18 years in prison by U.S. District Judge Charles Fleming after pleading guilty to four counts of interference with commerce by means of robbery, and two counts of using, carrying, and brandishing a firearm during a crime of violence.
According to court documents, from December 2023 to January 2024, Hyatt entered multiple businesses to commit robberies. He threatened employees with a loaded firearm, and in one instance, shots were exchanged between Hyatt and an employee who had obtained a firearm. Hyatt was shot during the scuffle and left the business. After he was treated at a local hospital for a gunshot wound, he was taken to the Akron Police Department, read his Miranda rights, and eventually confessed to committing four robberies.
The business locations Hyatt robbed were:
- Panera Bread, Cuyahoga Falls, Dec. 19, 2023
- Sav-a-Lot, Akron, Dec. 27, 2023
- Game Stop, Akron, Dec. 29, 2023
- Taco Bell, Akron, Jan. 1, 2024
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Akron Police Department, and the Cuyahoga Falls Police Department.
This case was prosecuted by Assistant U.S. Attorney Joseph Dangelo for the Northern District of Ohio.
Madison Man Sentenced to 14 Months for Passing Counterfeit $100 BillsRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Alex J. Stubbs, 27, Madison, Wisconsin, was sentenced yesterday by U.S. District Judge William M. Conley to 14 months in federal prison for passing counterfeit U.S. currency. Stubbs pleaded guilty to this charge on September 19, 2024. He was also ordered to pay $3,400 in restitution.
Between July and November 2023, Stubbs and codefendant Cornelius Stewart presented counterfeit $100 bills to more than three dozen merchants throughout Wisconsin. Stubbs and Stewart presented the phony bills when making small purchases, thereby receiving significant amounts of change in legitimate U.S. currency. Stewart manufactured the bills and gave them to Stubbs in exchange for legitimate currency.
Stewart pleaded guilty on December 9, 2024. His sentencing is scheduled for February 27, 2025.
The charges against Stubbs and Stewart were the result of an investigation conducted by Madison, Fitchburg, Sun Prairie, Cottage Grove, Cross Plains, Lake Mills, Marshall, Verona, Shorewood Hills, Tomah, Oconomowoc Police Departments, as well as the Dane County Sheriff’s Office and the United States Secret Service. Assistant U.S. Attorney Robert Anderson prosecuted this case.
Luzerne County Man Sentenced to 136 Months in Prison for Drug Trafficking and Possession of Firearms in Furtherance of Drug TraffickingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Charles Vincent Benincasa, age 41, of Kingston, Pennsylvania, was sentenced on December 12, 2024, to 136 months’ imprisonment by United States District Court Judge Robert D. Mariani for possession with intent to distribute controlled substances and possession of firearms in furtherance of drug trafficking.
According to United States Attorney Gerard M. Karam, on July 19, 2023, Benincasa distributed cocaine out of his home in Kingston. Two days later, the Luzerne County Drug Task Force executed a search warrant on that same home. Task Force Members discovered distribution amounts of cocaine, marijuana and fentanyl, and in total, nearly $15,000 dollars in cash. Benincasa was also in possession of one thousand rounds of ammunition and six firearms, to include multiple handguns and rifles. Two firearms bore no serial numbers, commonly known as untraceable “ghost guns.” At least one of the unserialized firearms was an AR-15 style short-barrel rife. One handgun had an extended 31-round magazine.
The case was investigated by the Luzerne County Drug Task Force together with the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Luisa Honora Berti is prosecuting 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.
The maximum penalty under federal law for this offense is a term of life imprisonment, 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.
# # #
Los Angeles Man Pleads Guilty to Money LaunderingRead the Press Release
SACRAMENTO, Calif. — Tracy Arnett, 39, of Los Angeles, pleaded guilty today to conspiracy to commit money laundering, U.S. Attorney Phillip A. Talbert announced.
According to court documents, from August 2023 through March 2024, Arnett and three co-conspirators conducted multiple financial transactions involving funds they believed to be proceeds of cocaine trafficking. Their belief as to the nature of the funds was based on representations of an individual working at the direction of law enforcement. In total, the co-conspirators received approximately $940,000 in purported drug trafficking proceeds. Of that amount, the co-conspirators laundered approximately $811,000.
This case is the product of an investigation by the IRS Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorneys Matthew Thuesen and Whitnee Goins are prosecuting the case.
A sentencing date for Arnett has not been set. Arnett is scheduled for a status conference regarding sentencing before U.S. District Judge Dena Coggins on June 13, 2025. Arnett faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the court’s discretion after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Kennedy Street Drug Gang Members Sentenced for Drug Trafficking While Armed with GunsRead the Press Release
WASHINGTON – Angel Enrique Suncar, 31, and Tristan Miles Ware, 25, both of Washington D.C. and members of the violent Kennedy Street Crew (KDY), were sentenced today for their roles in a massive drug trafficking organization that operated open-air markets in Northwest Washington D.C.
Suncar, a twice-convicted felon who sold marijuana and cocaine base and also possessed firearms to facilitate the crew’s drug trafficking activities, was sentenced to 60 months in federal prison. Suncar, aka “Coqui,” pleaded guilty on June 12, 2024, to possessing a firearm during a drug trafficking crime. In addition to the prison term, U.S. District Judge Beryl A. Howell ordered Suncar to serve five years of supervised release. Ware, aka “Greedy,” pleaded guilty July 11, 2024, to conspiracy to distribute 100 kilograms or more of marijuana and to possession of a firearm during a drug trafficking offense. Judge Howell sentenced Ware to 120 months in prison and also ordered him to serve five years of supervised release.
The sentences were announced by U.S. Attorney Matthew M. Graves, FBI Acting Special Agent in Charge David Geist of the Washington Field Office Criminal and Cyber Division, DEA Special Agent in Charge Jarod Forget of the Washington Division, ATF Special Agent in Charge Anthony Spotswood of the Bureau of Alcohol, Tobacco, Firearms, and Explosives - Washington Division, and Special Agent in Charge Kareem Carter, of the Internal Revenue Service – Criminal Investigation Washington D.C. Field Office.
According to court documents, KDY members operated open-air drug markets on an 11-block stretch of Kennedy Street in Northwest Washington, D.C., as well as surrounding streets. Like many drug trafficking organizations (DTOs), KDY armed itself with fire power to facilitate the drug trade and defend its territory from rival crews.
Suncar was a regular presence in the open-air drug market that KDY controlled. Law enforcement collected evidence of his trafficking at or near his residence on the 1200 block of Kennedy Street NW. Suncar’s role as a trafficker for the KDY crew was further borne out by law enforcement’s recovery of narcotics, cash, and two firearms at his residence on June 27, 2023. On that date, law enforcement searched his residence as part of a coordinated arrest operation conducted at locations in Northern Virginia, Maryland, and the District of Columbia. At Suncar’s residence, law enforcement discovered the hallmarks of a drug trafficker who manufactures his own supply: multiple baggies of crack cocaine, multiple Pyrex dishes containing powered residue, digital scales, two firearms, additional ammunition, and approximately $1,410 in cash.
Ware was apprehended on June 26, 2023, at a residence on the 1300 block of 5th Street NW, along with two co-defendants. At the residence, law enforcement recovered 3.5 kilos of marijuana, approximately $2,710 in cash, and six firearms. One of the firearms was a Glock 23 handgun which was swabbed for DNA and matched that of Ware’s. Months prior to the arrest, on January 26, 2023, law enforcement encountered Ware at a home on the 1700 block of D Street, NE, with several KDY members suspected of smuggling marijuana from California to the DMV via commercial flights. Agents recovered ten firearms, assorted ammunition, 21 kilos of marijuana packed in suitcases, and 40 grams of fentanyl-laced pills at the home.
This investigation was conducted under the auspices of the Organized Crime Drug Enforcement Task Force. 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 Metropolitan Police Department, the DEA’s Washington Division, ATF’s Washington Field Division, with assistance from FBI’s Washington Field Office, and the IRS-Criminal Investigation Washington, D.C. Office.
The matter is being prosecuted by Assistant U.S. Attorneys Matthew W. Kinskey and Sitara Witanachchi, of the of the Violence Reduction and Trafficking Offenses Section of the U.S. Attorney’s Office for the District of Columbia.
DEFENDANTS
NAME
AGE
CHARGES/SENTENCES
Kenneth Ademola Olugbenga27Pleaded Guilty to Conspiracy to Distribute and Possess with the Intent to Distribute 500 Grams or more of Cocaine Base, and a Detectable Amount of Marijuana; and Possessing a Firearm in Furtherance of a Drug Trafficking Offense. Sentencing is scheduled for January 16, 2025.Khali Ahmed Brown, aka “Migo Lee”22Pleaded Guilty to Conspiracy to Distribute 100 Kilograms or More of Marijuana and 400 Grams or More of Fentanyl and Oxycodone; Possession of a Firearm in Furtherance of a Drug Trafficking Offense; and Assault with a Dangerous Weapon. Sentencing is scheduled for January 9, 2025.Keion Michael Brown21Pleaded Guilty to Conspiracy to Distribute 100 Kilograms or More of Marijuana and Oxycodone and Possessing a Firearm in Furtherance of a Drug Trafficking Crime. Sentencing is scheduled for January 9, 2025.Miasiah Jamal Brown, aka “Michael Jamal Crawford”21Sentenced August 16, 2024, to Five Years for Possessing a Firearm in Furtherance of a Drug Trafficking Crime.Tristan Miles Ware, aka “Greedy”23Sentenced December 13, 2024, to 120 Months for Conspiracy to Distribute 100 Kilos of Marijuana; and Possessing a Firearm During a Drug Trafficking Crime.Jovan Williams, aka “Chewy” and “Choo”20Pleaded Guilty to Conspiracy to Distribute 100 Kilograms or More of Marijuana and Armed Carjacking. Sentencing is scheduled for January 16, 2025.Herman Eric-Bibmin Signou, aka “Herman Signour”23Sentenced March 22, 2024, to 40 Months for Conspiracy to Distribute and Possess with Intent to Distribute 100 Kilograms of More of MarijuanaCameron Xavier Reid26Sentenced May 31, 2024, to 60 Months for Conspiracy to Distribute 100 Kilograms of More of Marijuana.Warren Lawrence Fields, III, aka B-Dub26Sentenced May 16, 2024, to 60 Months for Possessing a Firearm During a Drug Trafficking Offense and for Conspiracy to Commit Money Laundering.Juwan Demetrius Clark, aka “Squirrel”28Pleaded Guilty to Conspiracy to Commit Money Laundering. Sentencing is scheduled for January 9, 2025.Aaron DeAndre Mercer, aka “Curby,”27Sentenced September 13, 2024, to 120 Months for Conspiracy to Distribute 400 Grams or More of Fentanyl, Marijuana, and Cocaine Base.David Penn, aka “Turtle”31Sentenced November 15, 2024, to 220 Months for Conspiracy to Distribute Marijuana, 40 Grams or More of Fentanyl, and a Mixture of Cocaine Base; and Two Counts of Possessing a Firearm in Furtherance of a Drug Trafficking Offense.Ronald Lynn Dorsey, aka “Ron G” and “HBGeezy”29Sentenced September 13, 2024, to 30 Months for Conspiracy to Commit Money Laundering.Antonio Reginald Bailey, aka “Boy Boy,” and “Fellow King”22Sentenced February 8, 2024, to 24 Months for Receiving a Firearm While Under Indictment.Anthony Trayon Bailey, aka “Fat Ant,” and “Bizzle”27Sentenced April 26, 2024, to 15 Months for Conspiracy to Distribute 100 Kilograms or More of Marijuana, 400 Grams or More of Fentanyl, and a Mixture and Substance Containing a Detectable Amount of Cocaine Base.Angel Enrique Suncar, aka “Coqui”29Sentenced December 12, 2024, to 60 Months for Possessing a Firearm During a Drug Trafficking Crime.Adebayo Adediji Green30Sentenced August 16, 2024, to 60 Months for Possessing a Firearm in Furtherance of a Drug Trafficking Crime.Defendant Cameron Reid is from Falmouth, VA; all remaining defendants are from Washington, D.C.
23cr0202
Justice Department Announces Resolution of Criminal and Civil Investigations into McKinsey & Company’s Work with Purdue Pharma L.P.; Former McKinsey Senior Partner Charged with Obstruction of JusticeRead the Press Release
McKinsey & Company Inc. (McKinsey), a global management consulting firm based in New York, has agreed to pay $650 million to resolve a criminal and civil investigation into the firm’s consulting work with opioids manufacturer Purdue Pharma L.P. (Purdue). The resolution pertains to McKinsey’s advice to Purdue concerning the sales and marketing of Purdue’s extended-release opioid drug, OxyContin, including a 2013 engagement in which McKinsey advised on steps to “turbocharge” sales of OxyContin.
Today’s resolution marks the first time a management consulting firm has been held criminally responsible for advice resulting in the commission of a crime by a client and reflects the Justice Department’s ongoing efforts to hold actors accountable for their roles in the opioid crisis. The resolution is also the largest civil recovery for such conduct.
Additionally, a former McKinsey senior partner who worked on Purdue matters has been charged with obstruction of justice in federal court in Abingdon, Virginia. Martin E. Elling, 60, a U.S. citizen currently residing in Bangkok, Thailand, has been charged with one count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department. Elling has agreed to plead guilty and is expected to appear in federal court in Abingdon to enter his plea and for sentencing at later dates.
As part of the government’s resolution with McKinsey, the company has entered into a five-year deferred prosecution agreement (DPA) (part one and part two) in connection with a criminal Information filed in U.S. District Court for the Western District of Virginia against McKinsey’s U.S. subsidiary (McKinsey & Company Inc. United States, “McKinsey U.S.”). The information charges McKinsey U.S. with one felony count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct, and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department; and one misdemeanor count of knowingly and intentionally conspiring with Purdue and others to aid and abet the misbranding of prescription drugs, held for sale after shipment in interstate commerce, without valid prescriptions.
McKinsey has agreed to pay a penalty of over $231 million, a forfeiture amount of over $93 million (reflecting all money it was paid by Purdue from 2004 to 2019) and a payment of $2 million to the Virginia Medicaid Fraud Control Unit to resolve the criminal allegations. McKinsey also has entered into a civil settlement agreement in which it will pay over $323 million to resolve its liability under the False Claims Act for allegedly providing advice to Purdue Pharma L.P. that caused the submission of false and fraudulent claims to federal healthcare programs for medically unnecessary prescriptions of OxyContin, as well as allegedly failing to disclose to the U.S. Food and Drug Administration (FDA) conflicts of interest arising from McKinsey US’s concurrent work for Purdue and the FDA. This brings the total payments under the global resolution to $650 million.
Today’s filing includes a 71-page Agreed Statement of Facts, which provides a detailed account of McKinsey’s work with Purdue relating to OxyContin. As part of the resolution, McKinsey has agreed to implement a significant compliance program, including a system of policies and procedures designed to identify and assess high-risk client engagements. As part of this compliance program, McKinsey will implement new document retention procedures and training for all partners, officers and employees who provide or implement advice to clients. This compliance program is in addition to the provisions negotiated between McKinsey and the Department in a concurrent resolution with McKinsey & Company Africa that was announced on Thursday, Dec. 5.
McKinsey has also agreed that it will not do any work related to the marketing, sale, promotion or distribution of controlled substances during the five-year term of the DPA. The resolution requires McKinsey’s Managing Partner to certify, on an annual basis, the firm’s compliance with its obligations under the DPA and federal law.
“This global resolution shows the department’s commitment to holding accountable those who played key roles in fueling the opioid crisis,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Consulting companies cannot advise their clients to break the law, and then skirt responsibility when their clients do so.”
“For the first time in history, the Justice Department is holding a management consulting firm and one of its senior executives criminally responsible for the sales and marketing advice it gave resulting in the commission of crime by a client,” said U.S. Attorney Christopher R. Kavanaugh for the Western District of Virginia. “This ground-breaking resolution demonstrates the Justice Department’s ongoing commitment to hold accountable those companies and individuals who profited from our Nation’s opioid crisis.”
“McKinsey schemed with Purdue Pharma to ‘turbocharge’ OxyContin sales during a raging opioid epidemic — an epidemic that continues to decimate families and communities across the nation. Today’s groundbreaking resolution makes clear our office’s commitment to holding powerful companies accountable for their part in the opioid epidemic, even if they did not make, sell, or dispense the drugs,” said U.S. Attorney Joshua Levy for the District of Massachusetts. “Consulting firms like McKinsey should get the message: if the advice you give to companies in boardrooms and PowerPoint presentations aids and abets criminal activity, we will come after you and we will expose the truth.”
“No amount of money can make-up for the devastating impact and heartbreaking loss of life the opioid crisis has inflicted on the people of Massachusetts, and our country. But today’s settlement is a sobering reminder that if you try to capitalize on a crisis by putting profits over patient safety — and then try to obstruct a federal investigation — you will pay a hefty price,” said Special Agent in Charge Jodi Cohen of the FBI Boston Field Office. “McKinsey is now being held criminally and financially accountable for devising an aggressive marketing strategy that was in reality a roadmap to boost sales of highly addictive opioids. Their actions resulted in powerful prescription painkillers being used in an unsafe, ineffective, and medically unnecessary manner. As both health care consumers, and taxpayers, this type of fraud negatively impacts all of us.”
“McKinsey’s management consulting work with Purdue Pharmaceuticals significantly contributed to a devastating public health crisis affecting American families and communities nationwide,” said Inspector General Christi A. Grimm of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is committed to holding accountable those who violate the law and put the public at risk, including health care consultants who are complicit in fraudulent schemes.”
“Aiding and abetting in the potential misbranding and illegal distribution of controlled substances poses a danger to U.S. consumers,” said Special Agent in Charge George A. Scavdis of the FDA Office of Criminal Investigations Metro Washington Field Office. We will continue to investigate and bring to justice companies whose actions put profits over patient safety.”
“Today’s resolution holds this defendant accountable for its role in the aggressive marketing and promotion of opioids. Their actions led to medically unnecessary opioid prescriptions, which compromised the integrity of VA’s healthcare system that cares for our nation’s veterans,” said Department of Veterans Affairs (VA) Inspector General Michael J. Missal. “We thank our law enforcement partners for their diligent work in bringing this case to closure.”
“It shocks the conscience that a major consulting corporation would actively seek to increase the submission of fraudulent claims for medically unnecessarily opioid prescriptions in the midst of the opioid crisis,” said Inspector General Krista A. Boyd of the U.S. Office of Personnel Management Office of the Inspector General. “The outstanding efforts of our law enforcement partners and colleagues at the Department of Justice led to this ground-breaking result. We must hold accountable those who prey upon the most vulnerable Americans in the name of increased profits.”
As described in the DPA, McKinsey received credit for its cooperation with the United States in connection with the criminal investigation, including providing updates regarding information obtained through is internal investigation; highlighting documents of interest in voluminous productions; and facilitating interviews. McKinsey also engaged in extensive remedial measures, including voluntarily stopping all work in 2019 on any opioid-specific business issues; terminating two senior partners, including Elling, who communicated about deleting opioid-related documents concerning Purdue; hiring a new chief legal officer and chief ethics and compliance officer; significantly enhancing its new client selection framework; and deploying a formalized diligence review and intake process for all clients. McKinsey has agreed to continue to cooperate with the United States.
McKinsey’s Criminal Liability for Misbranding
The criminal misbranding charge was based on McKinsey’s advice to Purdue Pharma L.P. as set forth in the Agreed Statement of Facts filed today. Between 2004 and 2019, McKinsey contracted with Purdue on 75 different engagements in the United States. In 2007, a Purdue affiliate pleaded guilty to misbranding OxyContin, from 1996 through 2001, by falsely marketing it as less addictive, less subject to abuse and diversion, and less likely to cause dependence and withdrawal than other pain medications, and Purdue entered into a five-year corporate integrity agreement (CIA) with HHS-OIG. After the 2007 guilty plea, McKinsey partners maintained close contact with Purdue, and in 2009, worked with Purdue to enhance “brand loyalty” for OxyContin and protect market share. In 2010 McKinsey worked with Purdue to obtain FDA approval for a version of OxyContin that was reformulated with abuse-deterrent properties. Following the introduction of reformulated OxyContin in August 2010, OxyContin sales immediately began to decline. Purdue studied the drivers for this decline and attributed it, in large part, to a drop in prescriptions for individuals abusing OxyContin and increases in regulatory safeguards intended to hinder medically unnecessary prescribing of OxyContin.
In May 2013, Purdue retained McKinsey to conduct a rapid assessment of the underlying drivers of OxyContin performance, identify key opportunities to increase near-term OxyContin revenue and develop plans to capture priority opportunities. This 2013 effort was called Evolve to Excellence, or “E2E,” and included McKinsey advising Purdue on how to “turbocharge” the sales pipeline for OxyContin by, among other strategies, intensifying marketing to High Value Prescribers, included prescribers who were writing opioid prescriptions for uses that were unsafe, ineffective, and medically unnecessary. McKinsey consultants spoke with Purdue about the concerns and increasing reluctance of pharmacists and pharmacy chains to fill prescriptions for OxyContin as abuse of the drug rose. McKinsey consultants also went on several “ride-alongs” with Purdue sales representatives in the field, as these sales representatives called on prescribers and pharmacists. In notes about one of these ride-alongs, a McKinsey consultant wrote, in part, “Pharmacist; [had] a gun and was shaking; abuse is definitely a huge issue[.]”
In August 2013, McKinsey partners met with certain members of the Purdue Board of Directors (members of the family that controlled Purdue) to present McKinsey’s findings and proposal; as one McKinsey partner reported afterwards, “[b]y the end of the meeting the findings were crystal clear to everyone and they gave a ringing endorsement of ‘moving forward fast.’” McKinsey also described for Purdue the financial value at stake: “hundreds of millions, not tens of millions.”
For Purdue and McKinsey, E2E was a financial success. Their targeting of High Value Prescribers slowed OxyContin’s declining sales and kept Purdue’s profits flowing at the expense of public health. After the conclusion of McKinsey’s work for Purdue on E2E, McKinsey performed additional work with Purdue that also sought to maximize OxyContin sales by further targeting sales efforts to High Value Prescribers.
Obstruction of Justice by Former McKinsey Senior Partner
According to the charging documents filed today, Elling served as the Director of the client services team for approximately 30 of McKinsey’s engagements with Purdue. He had a senior, relationship-focused role with respect to the E2E engagement and was involved in securing the engagement for McKinsey. On July 4, 2018, Elling allegedly emailed another senior partner: “Just saw in the FT that [Purdue board member] is being sued by states attorneys general for her role on the [Purdue] Board. It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything other [than] eliminating all our documents and emails. Suspect not but as things get tougher there someone might turn to us.” According to court documents, forensic analysis of Elling’s McKinsey-issued laptop found that Elling in fact removed materials related to McKinsey’s work for Purdue from the laptop, as well as a Purdue-related folder from his Outlook email account.
Elling faces a maximum penalty of 20 years in prison, three years of supervised release and a fine up to $250,000 for the obstruction of justice charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
False Claims to Federal Healthcare Programs
The department’s civil False Claims Act settlement resolves allegations that, from 2013 to 2014, McKinsey US, by advising Purdue to turbocharge OxyContin marketing to High Value Prescribers, some of whom were already prescribing very large quantities of OxyContin, as a means to increase OxyContin sales, and despite its awareness of the opioid crises, thereby knowingly caused false and fraudulent claims for OxyContin to be submitted to Medicare, Medicaid, TRICARE, the Federal Employees Health Benefit Program and the Veterans Health Administration.
Along with the civil settlement, McKinsey US entered into a five-year Corporate Integrity Agreement with HHS-OIG. The CIA, HHS-OIG’s first with a management consulting firm, contains novel obligations regarding risk assessment and quality control. First, the CIA requires McKinsey’s Compliance Committee to establish a robust risk evaluation process, evaluating engagement risks and providing quality oversight for certain client deliverables. Second, it requires McKinsey to establish a Quality Review Program to assess the quality of McKinsey’s advice to certain life sciences and health care clients with the dual goals of ensuring that McKinsey complies with applicable laws and does not provide or assist clients with plans, advice, or strategies that violate the law. HHS-OIG will select an independent Compliance Expert to review McKinsey’s systems and processes under the Quality Review Program and to review a sample of McKinsey client engagements, including the advice provided to those clients.
False Claims to FDA
The department’s civil False Claims Act settlement also resolves allegations that, from 2014 to 2017, McKinsey US knowingly misled the FDA by assigning consultants to concurrently work on both FDA projects and competitively sensitive Purdue projects, contrary to McKinsey US’ conflict of interest policy. While soliciting a contract from the FDA, McKinsey US represented to the FDA that it had a conflict-of-interest policy in which its consultants serving the FDA would not be assigned to a competitively sensitive project for a significant period of time following an assignment for FDA. The FDA then awarded McKinsey US the first in a series of contracts on a project relating to the monitoring of the safety of FDA-regulated products. McKinsey US admitted that it did not inform the FDA that its consultants worked on the Purdue projects around the same time those consultants also worked on the FDA project.
Assistant U.S. Attorney Randy Ramseyer for the Western District of Virginia; Assistant U.S. Attorneys Amanda P. Masselam Strachan and William B. Brady for the District of Massachusetts; Senior Trial Counsel Kristen M. Echemendia of the Civil Division’s Commercial Litigation Branch, Fraud Section; Trial Attorneys Jessica Harvey and Steven R. Scott of the Civil Division’s Consumer Protection Branch; and Special Assistant U.S. Attorneys and Assistant Attorneys General Kristin Gray and Kimberly Bolton of the Virginia Office of the Attorney General’s Medicaid Fraud Control Unit are prosecuting the criminal case against Elling and McKinsey.
The civil resolution was handled by Senior Trial Counsel Christopher Terranova of the Civil Division’s Commercial Litigation Branch, Fraud Section. The FDA Office of Criminal Investigations, FBI and Offices of the Inspector General of the Department of Health and Human Services, Department of Veterans Affairs and Office of Personnel Management investigated the case, with assistance from the Department of Justice’s Computer Crimes and Intellectual Property Section Cybercrime Lab.
The details contained in the charging documents and civil resolution are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Announces Resolution of Criminal and Civil Investigations into McKinsey & Company’s Work with Purdue Pharma L.P.; Former McKinsey Senior Partner Charged with Obstruction of JusticeRead the Press Release
BOSTON — McKinsey & Company Inc. (McKinsey), a global management consulting firm based in New York, has agreed to pay $650 million to resolve a criminal and civil investigation into the firm’s consulting work with opioids manufacturer Purdue Pharma L.P. (Purdue). The resolution pertains to McKinsey’s advice to Purdue concerning the sales and marketing of Purdue’s extended-release opioid drug, OxyContin, including a 2013 engagement in which McKinsey advised on steps to “turbocharge” sales of OxyContin.
Today’s resolution marks the first time a management consulting firm has been held criminally responsible for advice resulting in the commission of a crime by a client and reflects the Justice Department’s ongoing efforts to hold actors accountable for their roles in the opioid crisis. The resolution is also the largest civil recovery for such conduct.
Additionally, a former McKinsey senior partner who worked on Purdue matters has been charged with obstruction of justice in federal court in Abingdon, Virginia. Martin E. Elling, 60, a U.S. citizen currently residing in Bangkok, Thailand, has been charged with one count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department. Elling has agreed to plead guilty and is expected to appear in federal court in Abingdon to enter his plea and for sentencing at later dates.
As part of the government’s resolution with McKinsey, the company has entered into a five-year deferred prosecution agreement (DPA) in connection with a criminal Information filed in U.S. District Court for the Western District of Virginia against McKinsey’s U.S. subsidiary (McKinsey & Company Inc. United States, “McKinsey U.S.”). The information charges McKinsey U.S. with one felony count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct, and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department; and one misdemeanor count of knowingly and intentionally conspiring with Purdue and others to aid and abet the misbranding of prescription drugs, held for sale after shipment in interstate commerce, without valid prescriptions.
McKinsey has agreed to pay a penalty of over $231 million, a forfeiture amount of over $93 million (reflecting all money it was paid by Purdue from 2004 to 2019) and a payment of $2 million to the Virginia Medicaid Fraud Control Unit to resolve the criminal allegations. McKinsey also has entered into a civil settlement agreement in which it will pay over $323 million to resolve its liability under the False Claims Act for allegedly providing advice to Purdue Pharma L.P. that caused the submission of false and fraudulent claims to federal healthcare programs for medically unnecessary prescriptions of OxyContin, as well as allegedly failing to disclose to the U.S. Food and Drug Administration (FDA) conflicts of interest arising from McKinsey US’s concurrent work for Purdue and the FDA. This brings the total payments under the global resolution to $650 million.
Today’s filing includes a 71-page Agreed Statement of Facts, which provides a detailed account of McKinsey’s work with Purdue relating to OxyContin. As part of the resolution, McKinsey has agreed to implement a significant compliance program, including a system of policies and procedures designed to identify and assess high-risk client engagements. As part of this compliance program, McKinsey will implement new document retention procedures and training for all partners, officers and employees who provide or implement advice to clients. This compliance program is in addition to the provisions negotiated between McKinsey and the Department in a concurrent resolution with McKinsey & Company Africa that was announced on Thursday, Dec. 5.
McKinsey has also agreed that it will not do any work related to the marketing, sale, promotion or distribution of controlled substances during the five-year term of the DPA. The resolution requires McKinsey’s Managing Partner to certify, on an annual basis, the firm’s compliance with its obligations under the DPA and federal law.
“This global resolution shows the department’s commitment to holding accountable those who played key roles in fueling the opioid crisis,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Consulting companies cannot advise their clients to break the law, and then skirt responsibility when their clients do so.”
“For the first time in history, the Justice Department is holding a management consulting firm and one of its senior executives criminally responsible for the sales and marketing advice it gave resulting in the commission of crime by a client,” said U.S. Attorney Christopher R. Kavanaugh for the Western District of Virginia. “This ground-breaking resolution demonstrates the Justice Department’s ongoing commitment to hold accountable those companies and individuals who profited from our Nation’s opioid crisis.”
“McKinsey schemed with Purdue Pharma to ‘turbocharge’ OxyContin sales during a raging opioid epidemic — an epidemic that continues to decimate families and communities across the nation. Today’s groundbreaking resolution makes clear our office’s commitment to holding powerful companies accountable for their part in the opioid epidemic, even if they did not make, sell, or dispense the drugs,” said U.S. Attorney Joshua Levy for the District of Massachusetts. “Consulting firms like McKinsey should get the message: if the advice you give to companies in boardrooms and PowerPoint presentations aids and abets criminal activity, we will come after you and we will expose the truth.”
“No amount of money can make-up for the devastating impact and heartbreaking loss of life the opioid crisis has inflicted on the people of Massachusetts, and our country. But today’s settlement is a sobering reminder that if you try to capitalize on a crisis by putting profits over patient safety — and then try to obstruct a federal investigation — you will pay a hefty price,” said Special Agent in Charge Jodi Cohen of the FBI Boston Field Office. “McKinsey is now being held criminally and financially accountable for devising an aggressive marketing strategy that was in reality a roadmap to boost sales of highly addictive opioids. Their actions resulted in powerful prescription painkillers being used in an unsafe, ineffective, and medically unnecessary manner. As both health care consumers, and taxpayers, this type of fraud negatively impacts all of us.”
“McKinsey’s management consulting work with Purdue Pharmaceuticals significantly contributed to a devastating public health crisis affecting American families and communities nationwide,” said Inspector General Christi A. Grimm of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is committed to holding accountable those who violate the law and put the public at risk, including health care consultants who are complicit in fraudulent schemes.”
“Aiding and abetting in the potential misbranding and illegal distribution of controlled substances poses a danger to U.S. consumers,” said Special Agent in Charge George A. Scavdis of the FDA Office of Criminal Investigations Metro Washington Field Office. We will continue to investigate and bring to justice companies whose actions put profits over patient safety.”
“Today’s resolution holds this defendant accountable for its role in the aggressive marketing and promotion of opioids. Their actions led to medically unnecessary opioid prescriptions, which compromised the integrity of VA’s healthcare system that cares for our nation’s veterans,” said Department of Veterans Affairs (VA) Inspector General Michael J. Missal. “We thank our law enforcement partners for their diligent work in bringing this case to closure.”
“It shocks the conscience that a major consulting corporation would actively seek to increase the submission of fraudulent claims for medically unnecessarily opioid prescriptions in the midst of the opioid crisis,” said Inspector General Krista A. Boyd of the U.S. Office of Personnel Management Office of the Inspector General. “The outstanding efforts of our law enforcement partners and colleagues at the Department of Justice led to this ground-breaking result. We must hold accountable those who prey upon the most vulnerable Americans in the name of increased profits.”
As described in the DPA, McKinsey received credit for its cooperation with the United States in connection with the criminal investigation, including providing updates regarding information obtained through is internal investigation; highlighting documents of interest in voluminous productions; and facilitating interviews. McKinsey also engaged in extensive remedial measures, including voluntarily stopping all work in 2019 on any opioid-specific business issues; terminating two senior partners, including Elling, who communicated about deleting opioid-related documents concerning Purdue; hiring a new chief legal officer and chief ethics and compliance officer; significantly enhancing its new client selection framework; and deploying a formalized diligence review and intake process for all clients. McKinsey has agreed to continue to cooperate with the United States.
McKinsey’s Criminal Liability for Misbranding
The criminal misbranding charge was based on McKinsey’s advice to Purdue Pharma L.P. as set forth in the Agreed Statement of Facts filed today. Between 2004 and 2019, McKinsey contracted with Purdue on 75 different engagements in the United States. In 2007, a Purdue affiliate pleaded guilty to misbranding OxyContin, from 1996 through 2001, by falsely marketing it as less addictive, less subject to abuse and diversion, and less likely to cause dependence and withdrawal than other pain medications, and Purdue entered into a five-year corporate integrity agreement (CIA) with HHS-OIG. After the 2007 guilty plea, McKinsey partners maintained close contact with Purdue, and in 2009, worked with Purdue to enhance “brand loyalty” for OxyContin and protect market share. In 2010 McKinsey worked with Purdue to obtain FDA approval for a version of OxyContin that was reformulated with abuse-deterrent properties. Following the introduction of reformulated OxyContin in August 2010, OxyContin sales immediately began to decline. Purdue studied the drivers for this decline and attributed it, in large part, to a drop in prescriptions for individuals abusing OxyContin and increases in regulatory safeguards intended to hinder medically unnecessary prescribing of OxyContin.
In May 2013, Purdue retained McKinsey to conduct a rapid assessment of the underlying drivers of OxyContin performance, identify key opportunities to increase near-term OxyContin revenue and develop plans to capture priority opportunities. This 2013 effort was called Evolve to Excellence, or “E2E,” and included McKinsey advising Purdue on how to “turbocharge” the sales pipeline for OxyContin by, among other strategies, intensifying marketing to High Value Prescribers, included prescribers who were writing opioid prescriptions for uses that were unsafe, ineffective, and medically unnecessary. McKinsey consultants spoke with Purdue about the concerns and increasing reluctance of pharmacists and pharmacy chains to fill prescriptions for OxyContin as abuse of the drug rose. McKinsey consultants also went on several “ride-alongs” with Purdue sales representatives in the field, as these sales representatives called on prescribers and pharmacists. In notes about one of these ride-alongs, a McKinsey consultant wrote, in part, “Pharmacist; [had] a gun and was shaking; abuse is definitely a huge issue[.]”
In August 2013, McKinsey partners met with certain members of the Purdue Board of Directors (members of the family that controlled Purdue) to present McKinsey’s findings and proposal; as one McKinsey partner reported afterwards, “[b]y the end of the meeting the findings were crystal clear to everyone and they gave a ringing endorsement of ‘moving forward fast.’” McKinsey also described for Purdue the financial value at stake: “hundreds of millions, not tens of millions.”
For Purdue and McKinsey, E2E was a financial success. Their targeting of High Value Prescribers slowed OxyContin’s declining sales and kept Purdue’s profits flowing at the expense of public health. After the conclusion of McKinsey’s work for Purdue on E2E, McKinsey performed additional work with Purdue that also sought to maximize OxyContin sales by further targeting sales efforts to High Value Prescribers.
Obstruction of Justice by Former McKinsey Senior Partner
According to the charging documents filed today, Elling served as the Director of the client services team for approximately 30 of McKinsey’s engagements with Purdue. He had a senior, relationship-focused role with respect to the E2E engagement and was involved in securing the engagement for McKinsey. On July 4, 2018, Elling allegedly emailed another senior partner: “Just saw in the FT that [Purdue board member] is being sued by states attorneys general for her role on the [Purdue] Board. It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything other [than] eliminating all our documents and emails. Suspect not but as things get tougher there someone might turn to us.” According to court documents, forensic analysis of Elling’s McKinsey-issued laptop found that Elling in fact removed materials related to McKinsey’s work for Purdue from the laptop, as well as a Purdue-related folder from his Outlook email account.
Elling faces a maximum penalty of 20 years in prison, three years of supervised release and a fine up to $250,000 for the obstruction of justice charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
False Claims to Federal Healthcare Programs
The department’s civil False Claims Act settlement resolves allegations that, from 2013 to 2014, McKinsey US, by advising Purdue to turbocharge OxyContin marketing to High Value Prescribers, some of whom were already prescribing very large quantities of OxyContin, as a means to increase OxyContin sales, and despite its awareness of the opioid crises, thereby knowingly caused false and fraudulent claims for OxyContin to be submitted to Medicare, Medicaid, TRICARE, the Federal Employees Health Benefit Program and the Veterans Health Administration.
Along with the civil settlement, McKinsey US entered into a five-year Corporate Integrity Agreement with HHS-OIG. The CIA, HHS-OIG’s first with a management consulting firm, contains novel obligations regarding risk assessment and quality control. First, the CIA requires McKinsey’s Compliance Committee to establish a robust risk evaluation process, evaluating engagement risks and providing quality oversight for certain client deliverables. Second, it requires McKinsey to establish a Quality Review Program to assess the quality of McKinsey’s advice to certain life sciences and health care clients with the dual goals of ensuring that McKinsey complies with applicable laws and does not provide or assist clients with plans, advice, or strategies that violate the law. HHS-OIG will select an independent Compliance Expert to review McKinsey’s systems and processes under the Quality Review Program and to review a sample of McKinsey client engagements, including the advice provided to those clients.
False Claims to FDA
The department’s civil False Claims Act settlement also resolves allegations that, from 2014 to 2017, McKinsey US knowingly misled the FDA by assigning consultants to concurrently work on both FDA projects and competitively sensitive Purdue projects, contrary to McKinsey US’ conflict of interest policy. While soliciting a contract from the FDA, McKinsey US represented to the FDA that it had a conflict-of-interest policy in which its consultants serving the FDA would not be assigned to a competitively sensitive project for a significant period of time following an assignment for FDA. The FDA then awarded McKinsey US the first in a series of contracts on a project relating to the monitoring of the safety of FDA-regulated products. McKinsey US admitted that it did not inform the FDA that its consultants worked on the Purdue projects around the same time those consultants also worked on the FDA project.
Assistant U.S. Attorney Randy Ramseyer for the Western District of Virginia; Assistant U.S. Attorneys Amanda P. Masselam Strachan and William B. Brady for the District of Massachusetts; Senior Trial Counsel Kristen M. Echemendia of the Civil Division’s Commercial Litigation Branch, Fraud Section; Trial Attorneys Jessica Harvey and Steven R. Scott of the Civil Division’s Consumer Protection Branch; and Special Assistant U.S. Attorneys and Assistant Attorneys General Kristin Gray and Kimberly Bolton of the Virginia Office of the Attorney General’s Medicaid Fraud Control Unit are prosecuting the criminal case against Elling and McKinsey.
The civil resolution was handled by Senior Trial Counsel Christopher Terranova of the Civil Division’s Commercial Litigation Branch, Fraud Section. The FDA Office of Criminal Investigations, FBI and Offices of the Inspector General of the Department of Health and Human Services, Department of Veterans Affairs and Office of Personnel Management investigated the case, with assistance from the Department of Justice’s Computer Crimes and Intellectual Property Section Cybercrime Lab.
The details contained in the charging documents and civil resolution are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Announces Resolution of Criminal and Civil Investigations into McKinsey & Company’s Work with Purdue Pharma L.P.; Former McKinsey Senior Partner Charged with Obstruction of JusticeRead the Press Release
ABINGDON, Va. – McKinsey & Company Inc. (McKinsey), a global management consulting firm based in New York, has agreed to pay $650 million to resolve a criminal and civil investigation into the firm’s consulting work with opioids manufacturer Purdue Pharma L.P. (Purdue). The resolution pertains to McKinsey’s advice to Purdue concerning the sales and marketing of Purdue’s extended-release opioid drug, OxyContin, including a 2013 engagement in which McKinsey advised on steps to “turbocharge” sales of OxyContin.
Today’s resolution marks the first time a management consulting firm has been held criminally responsible for advice resulting in the commission of a crime by a client and reflects the Justice Department’s ongoing efforts to hold actors accountable for their roles in the opioid crisis. The resolution is also the largest civil recovery for such conduct.
Additionally, a former McKinsey senior partner who worked on Purdue matters has been charged with obstruction of justice in federal court in Abingdon, Virginia. Martin E. Elling, 60, a U.S. citizen currently residing in Bangkok, Thailand, has been charged with one count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department. Elling has agreed to plead guilty and is expected to appear in federal court in Abingdon to enter his plea and for sentencing at later dates.
As part of the government’s resolution with McKinsey, the company has entered into a five-year deferred prosecution agreement (DPA) (part one and part two) in connection with a criminal Information filed in U.S. District Court for the Western District of Virginia against McKinsey’s U.S. subsidiary (McKinsey & Company Inc. United States, “McKinsey U.S.”). The information charges McKinsey U.S. with one felony count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct, and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department; and one misdemeanor count of knowingly and intentionally conspiring with Purdue and others to aid and abet the misbranding of prescription drugs, held for sale after shipment in interstate commerce, without valid prescriptions.
McKinsey has agreed to pay a penalty of over $231 million, a forfeiture amount of over $93 million (reflecting all money it was paid by Purdue from 2004 to 2019) and a payment of $2 million to the Virginia Medicaid Fraud Control Unit to resolve the criminal allegations. McKinsey also has entered into a civil settlement agreement in which it will pay over $323 million to resolve its liability under the False Claims Act for allegedly providing advice to Purdue Pharma L.P. that caused the submission of false and fraudulent claims to federal healthcare programs for medically unnecessary prescriptions of OxyContin, as well as allegedly failing to disclose to the U.S. Food and Drug Administration (FDA) conflicts of interest arising from McKinsey US’s concurrent work for Purdue and the FDA. This brings the total payments under the global resolution to $650 million.
Today’s filing includes a 71-page Agreed Statement of Facts, which provides a detailed account of McKinsey’s work with Purdue relating to OxyContin. As part of the resolution, McKinsey has agreed to implement a significant compliance program, including a system of policies and procedures designed to identify and assess high-risk client engagements. As part of this compliance program, McKinsey will implement new document retention procedures and training for all partners, officers and employees who provide or implement advice to clients. This compliance program is in addition to the provisions negotiated between McKinsey and the Department in a concurrent resolution with McKinsey & Company Africa that was announced on Thursday, Dec. 5.
McKinsey has also agreed that it will not do any work related to the marketing, sale, promotion or distribution of controlled substances during the five-year term of the DPA. The resolution requires McKinsey’s Managing Partner to certify, on an annual basis, the firm’s compliance with its obligations under the DPA and federal law.
“For the first time in history, the Justice Department is holding a management consulting firm and one of its senior executives criminally responsible for the sales and marketing advice it gave resulting in the commission of crime by a client,” said U.S. Attorney Christopher R. Kavanaugh for the Western District of Virginia. “This ground-breaking resolution demonstrates the Justice Department’s ongoing commitment to hold accountable those companies and individuals who profited from our Nation’s opioid crisis.”
“This global resolution shows the department’s commitment to holding accountable those who played key roles in fueling the opioid crisis,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Consulting companies cannot advise their clients to break the law, and then skirt responsibility when their clients do so.”
“McKinsey schemed with Purdue Pharma to ‘turbocharge’ OxyContin sales during a raging opioid epidemic — an epidemic that continues to decimate families and communities across the nation. Today’s groundbreaking resolution makes clear our office’s commitment to holding powerful companies accountable for their part in the opioid epidemic, even if they did not make, sell, or dispense the drugs,” said U.S. Attorney Joshua Levy for the District of Massachusetts. “Consulting firms like McKinsey should get the message: if the advice you give to companies in boardrooms and PowerPoint presentations aids and abets criminal activity, we will come after you and we will expose the truth.”
“No amount of money can make-up for the devastating impact and heartbreaking loss of life the opioid crisis has inflicted on the people of Massachusetts, and our country. But today’s settlement is a sobering reminder that if you try to capitalize on a crisis by putting profits over patient safety — and then try to obstruct a federal investigation — you will pay a hefty price,” said Special Agent in Charge Jodi Cohen of the FBI Boston Field Office. “McKinsey is now being held criminally and financially accountable for devising an aggressive marketing strategy that was in reality a roadmap to boost sales of highly addictive opioids. Their actions resulted in powerful prescription painkillers being used in an unsafe, ineffective, and medically unnecessary manner. As both health care consumers, and taxpayers, this type of fraud negatively impacts all of us.”
“McKinsey’s management consulting work with Purdue Pharmaceuticals significantly contributed to a devastating public health crisis affecting American families and communities nationwide,” said Inspector General Christi A. Grimm of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is committed to holding accountable those who violate the law and put the public at risk, including health care consultants who are complicit in fraudulent schemes.”
“Aiding and abetting in the potential misbranding and illegal distribution of controlled substances poses a danger to U.S. consumers,” said Special Agent in Charge George A. Scavdis of the FDA Office of Criminal Investigations Metro Washington Field Office. We will continue to investigate and bring to justice companies whose actions put profits over patient safety.”
“Today’s resolution holds this defendant accountable for its role in the aggressive marketing and promotion of opioids. Their actions led to medically unnecessary opioid prescriptions, which compromised the integrity of VA’s healthcare system that cares for our nation’s veterans,” said Department of Veterans Affairs (VA) Inspector General Michael J. Missal. “We thank our law enforcement partners for their diligent work in bringing this case to closure.”
“It shocks the conscience that a major consulting corporation would actively seek to increase the submission of fraudulent claims for medically unnecessarily opioid prescriptions in the midst of the opioid crisis,” said Inspector General Krista A. Boyd of the U.S. Office of Personnel Management Office of the Inspector General. “The outstanding efforts of our law enforcement partners and colleagues at the Department of Justice led to this ground-breaking result. We must hold accountable those who prey upon the most vulnerable Americans in the name of increased profits.”
As described in the DPA, McKinsey received credit for its cooperation with the United States in connection with the criminal investigation, including providing updates regarding information obtained through is internal investigation; highlighting documents of interest in voluminous productions; and facilitating interviews. McKinsey also engaged in extensive remedial measures, including voluntarily stopping all work in 2019 on any opioid-specific business issues; terminating two senior partners, including Elling, who communicated about deleting opioid-related documents concerning Purdue; hiring a new chief legal officer and chief ethics and compliance officer; significantly enhancing its new client selection framework; and deploying a formalized diligence review and intake process for all clients. McKinsey has agreed to continue to cooperate with the United States.
McKinsey’s Criminal Liability for Misbranding
The criminal misbranding charge was based on McKinsey’s advice to Purdue Pharma L.P. as set forth in the Agreed Statement of Facts filed today. Between 2004 and 2019, McKinsey contracted with Purdue on 75 different engagements in the United States. In 2007, a Purdue affiliate pleaded guilty to misbranding OxyContin, from 1996 through 2001, by falsely marketing it as less addictive, less subject to abuse and diversion, and less likely to cause dependence and withdrawal than other pain medications, and Purdue entered into a five-year corporate integrity agreement (CIA) with HHS-OIG. After the 2007 guilty plea, McKinsey partners maintained close contact with Purdue, and in 2009, worked with Purdue to enhance “brand loyalty” for OxyContin and protect market share. In 2010 McKinsey worked with Purdue to obtain FDA approval for a version of OxyContin that was reformulated with abuse-deterrent properties. Following the introduction of reformulated OxyContin in August 2010, OxyContin sales immediately began to decline. Purdue studied the drivers for this decline and attributed it, in large part, to a drop in prescriptions for individuals abusing OxyContin and increases in regulatory safeguards intended to hinder medically unnecessary prescribing of OxyContin.
In May 2013, Purdue retained McKinsey to conduct a rapid assessment of the underlying drivers of OxyContin performance, identify key opportunities to increase near-term OxyContin revenue and develop plans to capture priority opportunities. This 2013 effort was called Evolve to Excellence, or “E2E,” and included McKinsey advising Purdue on how to “turbocharge” the sales pipeline for OxyContin by, among other strategies, intensifying marketing to High Value Prescribers, included prescribers who were writing opioid prescriptions for uses that were unsafe, ineffective, and medically unnecessary. McKinsey consultants spoke with Purdue about the concerns and increasing reluctance of pharmacists and pharmacy chains to fill prescriptions for OxyContin as abuse of the drug rose. McKinsey consultants also went on several “ride-alongs” with Purdue sales representatives in the field, as these sales representatives called on prescribers and pharmacists. In notes about one of these ride-alongs, a McKinsey consultant wrote, in part, “Pharmacist; [had] a gun and was shaking; abuse is definitely a huge issue[.]”
In August 2013, McKinsey partners met with certain members of the Purdue Board of Directors (members of the family that controlled Purdue) to present McKinsey’s findings and proposal; as one McKinsey partner reported afterwards, “[b]y the end of the meeting the findings were crystal clear to everyone and they gave a ringing endorsement of ‘moving forward fast.’” McKinsey also described for Purdue the financial value at stake: “hundreds of millions, not tens of millions.”
For Purdue and McKinsey, E2E was a financial success. Their targeting of High Value Prescribers slowed OxyContin’s declining sales and kept Purdue’s profits flowing at the expense of public health. After the conclusion of McKinsey’s work for Purdue on E2E, McKinsey performed additional work with Purdue that also sought to maximize OxyContin sales by further targeting sales efforts to High Value Prescribers.
Obstruction of Justice by Former McKinsey Senior Partner
According to the charging documents filed today, Elling served as the Director of the client services team for approximately 30 of McKinsey’s engagements with Purdue. He had a senior, relationship-focused role with respect to the E2E engagement and was involved in securing the engagement for McKinsey. On July 4, 2018, Elling allegedly emailed another senior partner: “Just saw in the FT that [Purdue board member] is being sued by states attorneys general for her role on the [Purdue] Board. It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything other [than] eliminating all our documents and emails. Suspect not but as things get tougher there someone might turn to us.” According to court documents, forensic analysis of Elling’s McKinsey-issued laptop found that Elling in fact removed materials related to McKinsey’s work for Purdue from the laptop, as well as a Purdue-related folder from his Outlook email account.
Elling faces a maximum penalty of 20 years in prison, three years of supervised release and a fine up to $250,000 for the obstruction of justice charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
False Claims to Federal Healthcare Programs
The department’s civil False Claims Act settlement resolves allegations that, from 2013 to 2014, McKinsey US, by advising Purdue to turbocharge OxyContin marketing to High Value Prescribers, some of whom were already prescribing very large quantities of OxyContin, as a means to increase OxyContin sales, and despite its awareness of the opioid crises, thereby knowingly caused false and fraudulent claims for OxyContin to be submitted to Medicare, Medicaid, TRICARE, the Federal Employees Health Benefit Program and the Veterans Health Administration.
Along with the civil settlement, McKinsey US entered into a five-year Corporate Integrity Agreement with HHS-OIG. The CIA, HHS-OIG’s first with a management consulting firm, contains novel obligations regarding risk assessment and quality control. First, the CIA requires McKinsey’s Compliance Committee to establish a robust risk evaluation process, evaluating engagement risks and providing quality oversight for certain client deliverables. Second, it requires McKinsey to establish a Quality Review Program to assess the quality of McKinsey’s advice to certain life sciences and health care clients with the dual goals of ensuring that McKinsey complies with applicable laws and does not provide or assist clients with plans, advice, or strategies that violate the law. HHS-OIG will select an independent Compliance Expert to review McKinsey’s systems and processes under the Quality Review Program and to review a sample of McKinsey client engagements, including the advice provided to those clients.
False Claims to FDA
The department’s civil False Claims Act settlement also resolves allegations that, from 2014 to 2017, McKinsey US knowingly misled the FDA by assigning consultants to concurrently work on both FDA projects and competitively sensitive Purdue projects, contrary to McKinsey US’ conflict of interest policy. While soliciting a contract from the FDA, McKinsey US represented to the FDA that it had a conflict-of-interest policy in which its consultants serving the FDA would not be assigned to a competitively sensitive project for a significant period of time following an assignment for FDA. The FDA then awarded McKinsey US the first in a series of contracts on a project relating to the monitoring of the safety of FDA-regulated products. McKinsey US admitted that it did not inform the FDA that its consultants worked on the Purdue projects around the same time those consultants also worked on the FDA project.
Assistant U.S. Attorney Randy Ramseyer for the Western District of Virginia; Assistant U.S. Attorneys Amanda P. Masselam Strachan and William B. Brady for the District of Massachusetts; Senior Trial Counsel Kristen M. Echemendia of the Civil Division’s Commercial Litigation Branch, Fraud Section; Trial Attorneys Jessica Harvey and Steven R. Scott of the Civil Division’s Consumer Protection Branch; and Special Assistant U.S. Attorneys and Assistant Attorneys General Kristin Gray and Kimberly Bolton of the Virginia Office of the Attorney General’s Medicaid Fraud Control Unit are prosecuting the criminal case against Elling and McKinsey.
The civil resolution was handled by Senior Trial Counsel Christopher Terranova of the Civil Division’s Commercial Litigation Branch, Fraud Section. The FDA Office of Criminal Investigations, FBI and Offices of the Inspector General of the Department of Health and Human Services, Department of Veterans Affairs and Office of Personnel Management investigated the case, with assistance from the Department of Justice’s Computer Crimes and Intellectual Property Section Cybercrime Lab.
The details contained in the charging documents and civil resolution are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Jury Finds Tampa Man Guilty of Threatening to Plant A Bomb in Member of U.S. House of Representative’s District OfficeRead the Press Release
Tampa, Florida – United States Attorney Roger B. Handberg announces that a federal jury has found Rigoberto Albizar Martinez (57, Tampa) guilty of threatening to destroy a building using an explosive. Martinez faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been set.
According to court documents, on May 1, 2024, Martinez called the Tampa district office of a member of the United States House of Representatives and left a vulgar, racist, obscenity-laden voicemail. In the voicemail, he threatened to plant a bomb in the Representative’s office.
This case was investigated by the United States Capitol Police – Threat Assessment Section. It is being prosecuted by Assistant United States Attorney Karyna Valdes and Special Assistant United States Attorney Joe Wheeler III.
Jessamine County Man Sentenced to 30 Years for Fentanyl and Methamphetamine Trafficking and Firearms PossessionRead the Press Release
FRANKFORT, Ky. – A Nicholasville, Ky., man, Billy Wilkins, 44, was sentenced on Wednesday, to 360 months in prison, by U.S. District Judge Gregory Van Tatenhove, following his convictions for possession with intent to distribute methamphetamine, fentanyl, and cocaine, and possession of a firearm in furtherance of drug trafficking, and possession of a firearm by convicted felon.
According to evidence presented at his trial, on November 4, 2021, in Nicholasville, law enforcement with the DEA and Jessamine County Sheriff’s Department executed a search warrant on a residence occupied by Wilkins. Inside the residence, officers located large quantities of methamphetamine, fentanyl, and cocaine, as well as two firearms and multiple rounds of ammunition. A third firearm was later recovered under the residence’s crawl space. During the investigation, officers also confirmed that Wilkins was a convicted felon, with multiple prior Kentucky drug trafficking convictions.
Under federal law, Wilkins must serve 85 percent of his prison sentence. Upon his release from prison, he will be under the supervision of the U.S. Probation Office for 10 years.
Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky; Jim Scott, Special Agent in Charge, DEA, Louisville Field Division; and Sheriff Kevin Grimes, Jessamine County Sheriff’s Office, jointly announced the sentence.
The investigation was conducted by the DEA and Jessamine County Sheriff’s Office. Assistant U.S. Attorney Paco Villalobos is prosecuting the case on behalf of the United States.
– END –
Jefferson Parish Man Sentenced for Six Federal Drug and Gun CrimesRead the Press Release
NEW ORLEANS, LOUISIANA – JAMES WALLACE (“WALLACE”), age 25, was sentenced on December 11, 2024 by U.S. District Judge Jane Triche Milazzo to 88 months in prison followed by five years of supervised release, along with a $600 mandatory special assessment fee, after previously pleading guilty to one count of conspiracy to distribute controlled substances, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(C), (b)(1)(D), and 846; two counts of possession with intent to distribute controlled substances and one count of distribution of controlled substances, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(C), and (b)(1)(D); possession of a firearm in furtherance of a drug trafficking crime, in violation of 21 U.S.C. § 924(c)(1)(A)(i); and being a felon in possession of a firearm, in violation of 18 U.S.C. §§ 922(g)(1) and 924(a)(2).
According to court documents, on June 22, 2021, Jefferson Parish Sheriff’s Office (JPSO) detectives were conducting surveillance in an area north of Airline Highway in Metairie, a frequent site of drug trafficking and firearms offenses. JPSO detectives observed WALLACE carrying a Glock Model 17 handgun equipped with a micro conversion kit, which places the handgun within a rifle-style platform. WALLACE is prohibited from possessing a firearm because of a prior state drug trafficking offense.
On October 13, 2021, WALLACE led a Louisiana State Police trooper on a dangerous car chase and, while evading law enforcement, threw several blister packs of tapentadol out of the window.
Only months later, in January of 2022, special agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) observed WALLACE back in the same area of Metairie where he was previously observed. On January 4th, ATF special agents observed WALLACE holding two handguns and carrying an orange backpack. Two days later, on January 6th, ATF special agents observed WALLACE carrying the same orange backpack and conducting hand-to-hand drug transactions with a handgun in his waistband. WALLACE handed the backpack, that contained fentanyl, heroin, marijuana, and tapentadol, to a co-conspirator who was arrested later that day. Despite the arrests of several of his co-conspirators, WALLACE continued to deal drugs in that same area and, on January 25th, he sold cocaine base to a confidential informant for the ATF.
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 Jefferson Parish Sheriff’s Office. Assistant United States Attorney David Berman of the Violent Crime Unit is in charge of the prosecution.
Iowa Man Sentenced to 90 Months & Ordered to Pay $80,000 in Restitution to Victims for Possession of Child PornographyRead the Press Release
United States Attorney Susan T. Lehr announced that Marty B. Jay Johnson, age 44, of Sioux City, Iowa, was sentenced on December 12, 2024, in federal court in Omaha, Nebraska for possession of child pornography. Chief United States District Judge Robert F. Rossiter, Jr. sentenced Johnson to 90 months’ imprisonment. There is no parole in the federal system. After his release from prison, Johnson will be placed on a 5-year term of supervised release. Johnson was also ordered to pay restitution in the amount of $80,000.00 to twenty identified victims of his crimes.
This investigation by the Nebraska State Patrol (NSP) began with a “cyber tip” received by the National Center for Missing and Exploited Children (NCMEC) regarding suspicious internet activity. NCMEC’s resulting report to the NSP indicated that twenty-four files containing child pornography (videos and single image files) were uploaded from Johnson’s internet protocol (IP) address to Kik, a free instant messaging mobile app, between April 27, 2021, and August 3, 2021.
On March 22, 2022, NSP served a warrant to search for child pornography at the Johnson’s residence. Investigators seized sixteen devices for forensic examination. Forensic examination of the devices yielded over 7,000 artifacts of child pornography on the various devices including 2,155 minutes of videos showing child pornography. There were over 6,700 child pornography image files and 285 videos of child pornography. The content included images of infants and toddlers, children less than 12 years of age, bestiality involving children, sadism and masochism involving children, and children 12 years of age and older. Twenty-seven known victims were identified by hash value comparison of the digital files, of whom twenty sought restitution.
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.
This case was investigated by the Nebraska State Patrol.