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12 November 2024
UCHealth Agrees to Pay $23M to Resolve Allegations of Fraudulent Billing for Emergency Department VisitsRead the Press Release
University of Colorado Health, known as UCHealth and headquartered in Aurora, Colorado, has agreed to pay $23 million to resolve allegations that it violated the False Claims Act in seeking and receiving payment from federal health care programs for visits to its emergency departments, by falsely coding certain Evaluation & Management (E&M) claims submitted to the Medicare and TRICARE programs.
“Improperly billing federal health care programs drains valuable government resources needed to provide medical care to millions of Americans,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will pursue health care providers that defraud the taxpayers by knowingly submitting inflated or unsupported claims.”
E&M claims relate to medical visits that involve evaluating and managing a patient’s health and medical conditions, including qualifying visits to a hospital’s emergency department. In submitting an E&M claim to Medicare or TRICARE, a hospital may use one of five Current Procedural Terminology (CPT) codes (CPT 99281 through CPT 99285), depending on the hospital resources associated with the visit. An E&M facility claim coded with CPT 99285 represents the highest hospital resource usage.
The United States alleged that, from November 1, 2017, through March 31, 2021, UCHealth hospitals automatically coded certain claims for emergency room visits using CPT 99285. UCHealth used this code whenever its health care providers had checked a patient’s set of vital signs more times than the total number of hours that the patient was present in the emergency department, excepting patients who were in the emergency department for fewer than 60 minutes, despite the severity of the patient’s medical condition or the hospital resources used to manage the patient’s health and treatment. The United States alleged that UCHealth knew that its automatic coding rule associated with monitoring of vital signs did not satisfy the requirements for billing to Medicare and TRICARE because it did not reasonably reflect the facility resources used by the UCHealth hospitals.
“Fraudulent billing by healthcare companies undermines Medicare and other federal healthcare programs that are vital to many Coloradans,” said Acting U.S. Attorney Matt Kirsch for the District of Colorado. “We will hold accountable health care companies who adopt automatic coding practices that lead to unnecessary and improper billing.”
“Health care providers that participate in federal health care programs such as Medicare are required to obey laws meant to preserve the integrity of program funds, including requiring that providers submit only appropriate and accurate claims for reimbursement,” said Special Agent in Charge Linda T. Hanley of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “As this settlement demonstrates, HHS-OIG and our law enforcement partners will continue working together to protect both public safety and the integrity of our federal health care system.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by a private individual, Timothy Sanders. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States, et al. ex rel. Sanders v. University of Colorado Health et al., No. 21-cv-1164 (D. Colo.). As part of today’s resolution, Mr. Sanders will receive $3.91 million of the proceeds from the settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Colorado, with assistance from HHS-OIG and the Defense Criminal Investigative Service.
The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).
Trial Attorney David G. Miller of the Civil Division and Assistant U.S. Attorney Lila Bateman for the District of Colorado handled the matter.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
Settlement
U.S. Attorney’s Office Commitment to Protecting Patients and Consumers from Health Care Fraud Leads to Exponential Growth in ProsecutionsRead the Press Release
Spokane, Washington – Vanessa R. Waldref, United States Attorney for the Eastern District of Washington, announced that in the last several months, the office she leads prosecuted several significant cases that protected patients, consumers, and the community from health care fraud.
“Safe and affordable health care is critical for a thriving community. Healthcare is a multi-billion-dollar industry in the Inland Northwest, and fraudulent schemes divert public funds away from treating patients and drive up the cost of care for those that need it most,” said U.S. Attorney Waldref. “Combatting health care fraud is a priority for my office because everyone deserves to have doctors and medical providers who place patient care over profits.”
In August of 2023, Lincare Holdings, Inc., agreed to pay $29 million to resolve allegations that it fraudulently overbilled Medicare and Medicare Advantage Plans for oxygen equipment. The settlement is the largest-ever health care fraud settlement in the Eastern District of Washington. In addition to the $29 million paid by Lincare to address claims that Lincare submitted to Medicare and Medicare Advantage, in what is believed to be a first-of-a-kind False Claims Act Settlement, as part of the settlement, Lincare agreed to identify and repay Medicare beneficiaries who were overcharged co-pays. Pursuant to this provision, as of September 2024, Lincare has refunded payments to 4,917 patients for a total of $976,137. If patients believe that they may have been overbilled for oxygen equipment and have not received a refund, they can reach out to the United States Attorney’s Office of Public Affairs.
Other major health care fraud cases filed or pending in the Eastern District of Washington include:
August 2024 sentencing of Thomas Andrew Webster, M.D., age 51, of Sylvania, Ohio, for conspiring to accept kickbacks in connection with a fraudulent telemarketing and medical supply scheme throughout Washington and in other states. Dr. Webster was sentenced to two years in federal prison followed by 3 years of supervised release, restitution of more than $870,000, an additional criminal fine of $50,000, and forfeiture of hundreds of thousands of dollars in assets.
In August 2024, Justin Leland agreed to pay $224,620.88 to resolve allegations he participated in a kick-back scheme to bill Medicare for medically unnecessary durable medical equipment.
In August 2024, William O. Mize pled guilty to conspiracy in connection with a scheme to defraud insurance companies of more than $6 million by submitting fraudulent claims for health care and other injury expenses in connection with a series of vehicle collisions and other accidents staged by Mize and his co-conspirators. Mize is scheduled to be sentenced in November 2024.
In March 2024, Physician Staffing Company Jackson & Coker Locums Tenens, LLC and Physician Edward William Salko, D.O. agreed to pay $700,000 to resolve allegations that they participated in a kick-back scheme to bill Medicare for medically unnecessary durable medical equipment and diagnostic laboratory testing.
In January 2024, Physician Daniel Case agreed to pay $95,000 to resolve allegations that he participated in a kick-back scheme and ordered medically unnecessary durable medical equipment that Case caused to be billed to Medicare, Medicaid, and other federal health care programs
In January 2024, the United States and State of Washington filed a Complaint in federal district court against MultiCare Health System, which owns and operates MultiCare Deaconess Hospital and MultiCare Rockwood Clinic in Spokane, alleging that MultiCare knowingly endangered patient safety and falsely and fraudulently billed Medicare, Medicaid, and other federal health care programs for spinal surgery procedures performed at Deaconess between 2019 and 2021 by Jason Dreyer, a former neurosurgeon.
U.S. Attorney Waldref highlighted the importance of partnerships in combatting health care fraud, “We are prosecuting more cases because of our strong relationships with state and federal law enforcement partners – including Health and Human Services, Office of Inspector General; the Drug Enforcement Administration; the Department of Veterans Affairs, Office of Inspector General; and our state partners at the Washington State Office of the Attorney General’s Medicaid Fraud Control Division, as well as many others. Our vigorous fraud practice holds individuals and corporations accountable for stealing from taxpayers. I am proud that my office is a national leader in fighting fraud and investigating cases brought by whistleblowers to report misconduct and protect our community’s resources.”
“The VA Office of Inspector General is committed to safeguarding the integrity of VA’s healthcare programs and services and ensuring veterans receive the quality health care they deserve,” said Special Agent in Charge Dimitriana Nikolov with the Department of Veterans Affairs Office of Inspector General’s Northwest Field Office. “The VA OIG is grateful to the U.S. Attorney’s Office and our law enforcement partners for their dedication and support in this case.”
“The Defense Criminal Investigative Service (DCIS) is committed to working with our law enforcement partners to protect the integrity of federal healthcare programs, particularly as it relates to the Department of Defense’s TRICARE program,” said Bryan D. Denny, the Special Agent in Charge of the DCIS Western Field Office. “We will aggressively pursue and seek to hold accountable bad actors who defraud or attempt to defraud TRICARE, because their deceptive actions ultimately harm those defending our country and their families.”
“The Drug Enforcement Administration works hard to ensure patient safety by regulating medical professionals who prescribe, produce, or dispense scheduled prescription drugs,” said David F. Reames, Special Agent in Charge, DEA Seattle Field Division. “DEA holds medical personnel accountable when they fail to follow Federal law and regulations for scheduled medications and risk the health and safety of patients and our community.”
In addition to casework, the U.S. Attorney’s Office is engaged in community outreach to raise awareness about fraud schemes and educate members of the community on how to avoid becoming a victim of scams. U.S. Attorney Waldref has recorded this message about how we can all protect ourselves and our loved ones from scams targeting the elderly. To learn more about the Justice Department’s elder justice efforts please visit the Elder Justice Initiative page.
U.S. Attorney's Office and FBI Charge Shiprock Man with Sexual AbuseRead the Press Release
ALBUQUERQUE – A Shiprock man was charged by indictment with sexual abuse.
Jasper Lee Gray, 62, an enrolled member of the Navajo Nation, appeared before a federal judge today and will remain on conditions of release pending trial, which has not been scheduled.
According to court records, between December 1 and December 20, 2023, Gray engaged in a sexual act with Jane Doe without her consent.
If convicted, Gray faces any term of years up to life in prison.
U.S. Attorney Alexander M.M. Uballez and Raul Bujanda, Special Agent in Charge of the FBI Albuquerque Field Office, made the announcement today.
The Farmington Resident Agency of the FBI’s Albuquerque Field Office investigated this case with assistance from the Navajo Nation Department of Investigation and Department of Criminal Investigations. Assistant United States Attorney Caitlin L. Dillon is prosecuting the case.
View the Indictment (Gray).pdfAn indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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U.S. Attorney's Office Secures Sentencing of Las Cruces Man for Federal Firearms OffensesRead the Press Release
ALBUQUERQUE – A Las Cruces man was sentenced to 80 months in prison for illegally possessing firearms and ammunition while under felony indictment, including an unregistered short-barreled rifle.
There is no parole in the federal system.
According to court documents, on November 12, 2020, Delbert Tyler Trevino, 33, was indicted in the State of Texas on felony charges of theft of property, fraud, and possession of a controlled substance. On January 31, 2022, Trevino pleaded guilty to those felony charges. Rather than entering a judgment at that time, the court placed him on deferred adjudication probation for a period of five years.
Under Texas law, deferred adjudication allows a defendant to accept responsibility for a crime without an immediate conviction. If the defendant successfully completes the terms of probation, the case is dismissed without a conviction on their record.
Despite being prohibited from possessing firearms while on probation, evidence showed Trevino later obtained firearms that had previously been seized by police. Trevino is also alleged to have purchased ammunition in New Mexico on July 22, 2022.
On September 2, 2022, deputies from the Dona Ana County Sheriff’s Office executed a search warrant related to a homicide investigation at a residence associated with Trevino in Mesilla Park, New Mexico. During the search, authorities recovered an unregistered short-barrel rifle from the bedroom Trevino was staying in.
Trevino was subsequently convicted by a federal jury on April 24, 2024, of federal firearms and ammunition offenses including possession of an unregistered short-barreled rifle.
Upon his release from prison, Trevino will be subject to three years of supervised release.
U.S. Attorney Alexander M.M. Uballez and Brendan Iber, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, made the announcement today.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case with assistance from the Doña Ana County Sheriff’s Office and the Las Cruces Police Department. Assistant U.S. Attorneys Maria Y. Armijo and Ry Ellison are prosecuting the case.
The homicide investigation remains pending. If you have any information relating to this matter or other crimes committed by Trevino, please contact the Dona Ana County Sheriff’s Office at 575-525-1911.
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Two Somali Pirates Sentenced to 30 Years Each in Prison for Armed Hostage Taking of American JournalistRead the Press Release
Abdi Yusef Hassan, 56, of Minneapolis, Minnesota, and Mohamed Tahlil Mohamed, 43, of Mogadishu, Somalia, were both sentenced to 30 years in prison for hostage taking, terrorism, and firearms offenses, in connection with the 977-day hostage taking of an American journalist in Somalia. A jury in the Eastern District of New York convicted Hassan and Mohamed of those offenses in February 2023 following a three-week trial.
According to the complaints, indictments, evidence at trial, and statements made in public court proceedings, in January 2012, Michael Scott Moore, an American freelance journalist, traveled to Somalia to research piracy and the Somali economy. On Jan. 21, 2012, Moore was driving in the vicinity of Galkayo, Somalia, when his vehicle was suddenly surrounded by a group of heavily armed men carrying assault rifles and rocket-propelled grenade launchers. The men pulled Moore from his vehicle, beat him with their weapons, and drove him away in another vehicle to a secluded area, where they held him with two Seychellois fishermen (Fisherman-1 and Fisherman-2). The fishermen had been abducted off the Somali coast in October 2011. Moore was held in various locations in the vicinity of Hobyo, Somalia, for approximately three months.
In April 2012, Moore and Fisherman-1 were transferred to a boat, F/V Naham III, which had previously been hijacked in March 2012. The pirates kept Moore and Fisherman-1 captive aboard the Naham III, along with 28 crew members of the ship. Moore learned from the crew members, who were from Vietnam, China, Philippines, and Taiwan, that the hostage takers murdered the captain of the ship when they captured the vessel and that his body was kept in the ship’s freezer. The hostage takers kept Moore on the Naham III until approximately August 2012, when they transferred him back to land. On one occasion, in approximately May 2012, Moore’s captors took him from the Naham III to the Somali bush, where they forced Moore to watch as they hung Fisherman-1 from a tree by his feet and beat Fisherman-1 with a cane. During the torture of Fisherman-1, the pirates who were present were armed with heavy weaponry, including machine guns and grenade launchers.
Moore remained a hostage for another two years. During this time, his captors shuttled him between safehouses, chained him at night to prevent his escape, surrounded him with armed guards, and repeatedly threatened him with bodily harm. Moore was also forced to make several proof-of-life videos requesting large ransom payments for his release. The kidnappers provided Moore with almost no information, and his access to the outside world was limited to a radio. In September 2014, following the payment of a ransom, Moore’s captors released him.
Hassan and Mohamed each played significant roles in Moore’s captivity. Hassan, a naturalized U.S. citizen, served as the Minister of the Interior (a role that made him responsible for police and security forces) in Galmudug province in Somalia, where Moore was held hostage. Hassan served as an overall leader of the pirates and headed their efforts to extort a massive ransom from Moore’s aging mother. Among other things, Hassan directed the production of proof-of-life videos with Moore, participated in negotiations for ransom payments, and used his own home as a base of operations for the pirates. Mohamed, a serving officer in the Somali army, was a supervisor of the pirates guarding Moore during the early stages of the hostage taking. After Moore had been moved several times, Mohamed continued to play an essential role in the hostage taking, relying on his military position, training, and experience to serve as the pirates’ head of security and armorer. As head of security, Mohamed was in charge of moving Moore from location to location around Somalia. Mohamed also leveraged his military background to provide and repair heavy machine guns, grenade launchers, and other weapons that the pirates used to ensure that Moore could not escape.
In addition to the prison term, Hassan and Mohamed were sentenced to one day of supervised release.
Assistant Attorney General Matthew G. Olsen, U.S. Attorney Damian Williams for the Southern District of New York, and Executive Assistant Director Robert Wells of the FBI National Security Branch announced the case.
The FBI Boston and Minneapolis Field Office investigated the case with assistance from Department of State Diplomatic Security Service.
Assistant U.S. Attorney Sam Adelsberg and Trial Attorney Josh Champagne of the National Security Division’s Counterterrorism Section prosecuted the case with assistance from the U.S. Attorney’s Office for the Eastern District of New York and the Department of Justice’s Office of International Affairs.
Two Somali Pirates Sentenced to 30 Years Each in Prison for Armed Hostage Taking of American JournalistRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that ABDI YUSUF HASSAN and MOHAMED TAHLIL MOHAMED were both sentenced to 30 years in prison for hostage taking, terrorism, and firearms offenses, in connection with the 977-day hostage taking of an American journalist in Somalia. A jury in the Eastern District of New York convicted HASSAN and MOHAMED of those offenses in February 2023 following a three-week trial. The sentences were imposed by U.S. District Judge Allyne R. Ross, who also presided over the trial.
U.S. Attorney Damian Williams said: “For nearly three years, Michael Scott Moore was held hostage in Somalia by pirates. He was beaten, chained to the floor, and threatened with assault rifles and machine guns. Hassan and Mohamed were key players in that hostage taking. Both abused their positions in Somalia’s government—Hassan, as a senior security official, and Mohamed as an army officer—by keeping a U.S. citizen captive to satisfy their own greed. Today’s sentences demonstrate our resolve to hold those who take Americans hostage accountable for their crimes.”
According to the Complaints, Indictments, evidence at trial, and statements made in public court proceedings:
In January 2012, Michael Scott Moore, an American freelance journalist, traveled to Somalia to research piracy and the Somali economy. On January 21, 2012, Moore was driving in the vicinity of Galkayo, Somalia, when his vehicle was suddenly surrounded by a group of heavily armed men carrying assault rifles and rocket-propelled grenade launchers. The men pulled Moore from his vehicle, beat him with their weapons, and drove him away in another vehicle to a secluded area, where they held him with two Seychellois fishermen (“Fisherman-1” and “Fisherman-2”). The fishermen had been abducted off the Somali coast in October 2011. Moore was held in various locations in the vicinity of Hobyo, Somalia, for approximately three months.
In April 2012, Moore and Fisherman-1 were transferred to a boat, F/V Naham III, which had previously been hijacked in March 2012. The pirates kept Moore and Fisherman-1 captive aboard the Naham III, along with 28 crew members of the ship. Moore learned from the crew members, who were from Vietnam, China, Philippines, and Taiwan, that the hostage takers murdered the captain of the ship when they captured the vessel and that his body was kept in the ship’s freezer. The hostage takers kept Moore on the Naham III until approximately August 2012, when they transferred him back to land. On one occasion, in approximately May 2012, Moore’s captors took him from the Naham III to the Somali bush, where they forced Moore to watch as they hung Fisherman-1 from a tree by his feet and beat Fisherman-1 with a cane. During the torture of Fisherman-1, the pirates who were present were armed with heavy weaponry, including machine guns and grenade launchers.
Moore remained a hostage for another two years. During this time, his captors shuttled him between safehouses, chained him at night to prevent his escape, surrounded him with armed guards, and repeatedly threatened him with bodily harm. Moore was also forced to make several proof-of-life videos requesting large ransom payments for his release. The kidnappers provided Moore with almost no information, and his access to the outside world was limited to a radio. In September 2014, following the payment of a ransom, Moore’s captors released him.
HASSAN and MOHAMED each played significant roles in Moore’s captivity. HASSAN, a naturalized U.S. citizen, served as the Minister of the Interior (a role that made him responsible for police and security forces) in Galmudug province in Somalia, where Moore was held hostage. HASSAN served as an overall leader of the pirates and headed their efforts to extort a massive ransom from Moore’s aging mother. Among other things, HASSAN directed the production of proof-of-life videos with Moore, participated in negotiations for ransom payments, and used his own home as a base of operations for the pirates. MOHAMED, a serving officer in the Somali army, was a supervisor of the pirates guarding Moore during the early stages of the hostage taking. After Moore had been moved several times, MOHAMED continued to play an essential role in the hostage taking, relying on his military position, training, and experience to serve as the pirates’ head of security and armorer. As head of security, MOHAMED was in charge of moving Moore from location to location around Somalia. MOHAMED also leveraged his military background to provide and repair heavy machine guns, grenade launchers, and other weapons that the pirates used to ensure that Moore could not escape.
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In addition to the prison term, HASSAN, 56, of Minneapolis, Minnesota, and MOHAMED, 43, of Mogadishu, Somalia, were sentenced to one day of supervised release.
Mr. Williams praised the outstanding efforts of the International Operations Division of the Federal Bureau of Investigation (“FBI”), the FBI’s International Violent Crimes Unit, the FBI Boston Field Office and its Portland Resident Agency, the FBI Minneapolis Field Office, the U.S. Department of State Diplomatic Security Service, the U.S. Attorney’s Office for the Eastern District of New York, the Department of Justice’s Office of International Affairs, and the Counterterrorism Section of the Department of Justice’s National Security Division for their assistance.
This prosecution is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorney Sam Adelsberg is in charge of the prosecution, with assistance from Trial Attorney Josh Champagne of the Counterterrorism Section.
Three men sentenced in local Indian Arts and Crafts Act caseRead the Press Release
JUNEAU, Alaska – Three men were sentenced today for their roles in a scheme to sell hundreds of Philippine produced products as authentic Alaska Native produced artwork, violating the Indian Arts and Crafts Act.
According to court documents, between May 2019 and December 2021, Travis Lee Macasaet, 39, of Ketchikan, Simeon Cabansag, 39, of Ketchikan, and Jessie Reginio, 28, of Seattle, Washington, were employees of both Alaska Stone Arts LLC. and Rail Creek LLC., two stores located in Ketchikan, for differing periods of time. Alaska Stone Arts LLC. primarily sold stone carvings, and Rail Creek LLC. primarily sold wood totem poles.
Court documents explain that from April 2016 to December 2021, Cristobal Rodrigo, 59, his wife Glenda Rodrigo, 46, and their son Christian Rodrigo, 24, were the owners and operators of the stores and were co-conspirators in the case. The investigation revealed that the carvings and totem poles sold in both stores were sourced from Rodrigo Creative Crafts, a company owned by Glenda Rodrigo and located in the Philippines. The company used Filipino labor to produce the artwork before shipping them to the Rodrigo’s stores in Alaska, where they were sold as authentic Alaska Native art.
According to court documents, the Rodrigo’s hired Alaska Natives and non-Alaska Native employees at both Ketchikan stores to help with day-to-day operations and represent and sell Philippine produced artwork as their own authentic Alaska Native artwork. Macasaet and Cabansag were two of the Alaska Natives hired by the Rodrigo family. Reginio was one of the non-Alaska Native employees hired by the family.
The defendants conspired with others to sell the artwork to customers and falsely represent that the art was all produced from locally sourced materials and made by Alaska Natives. Court documents outline that Macasaet misrepresented to customers that he was the sole artisan of the totem poles carved and sold at Rail Creek LLC. Court documents also describe that Cabansag and Reginio misrepresented to customers that they were the sole artisans of stone carvings sold in both stores under the names “Simeon” and “jr,” respectively.
During the course of the conspiracy, the defendants and others involved in the scheme sold hundreds of Philippine made stone and wood carvings as authentic Alaska Native carvings.
Macasaet was sentenced to five years’ of probation and 250 hours of community service. Cabansag was sentenced to three years’ supervised release and time served. Reginio was sentenced to three years’ probation release and a $5,000 fine. All defendants are required to joint and several payment of restitution to the victims in this case and are required to write apology letters to the victims and the Tlingit and Haida Indian Tribes to be published publicly.
“The defendants’ actions represent a profound betrayal of the Alaska Native artisans who take immense pride in preserving and practicing their craft,” said U.S. Attorney S. Lane Tucker for the District of Alaska. “Their fraudulent conduct not only jeopardizes the livelihoods of genuine artists, but also disrespects the rich cultural heritage to which two of the defendants belong. These sentencings represent a critical step toward securing justice for tribal communities and the innocent victims who were deceived in this case through forgery and misrepresentation. Our office remains steadfast in its commitment to upholding the integrity of Indian Arts and Crafts laws through prosecutions, safeguarding both Alaska Native culture and the integrity of art for all consumers.”
“The Indian Arts and Crafts Board administers and enforces the Indian Arts and Crafts Act, a truth-in-marketing law,” said IACB Director Meridith Stanton. “The Act is intended to rid the Alaska Native and Indian arts marketplace of counterfeits to protect the cultural heritage and economic likelihoods of Alaska Native and Indian artists and their Tribes and Villages, as well as the buying public. Authentic Alaska Native art, such as totem poles which hold profound significance among the Tlingit and Haida, is an important tool for passing down cultural traditions, artistic skills, and traditional knowledge from one generation to the next. Travis Macasaet, a member of the Tlingit and Haida Indian Tribes, was a key participant in the Rodrigo family’s wide-ranging conspiracy to sell Philippine made totem poles and stone carvings as Alaska Native made. As an Alaska Native, he had the credibility to vouch for the carvings’ authenticity with customers. Indeed, Macasaet went so far as to sign the totem poles and take pictures with the carvings as the purported artist, falsely asserting that he had made them. Simeon Cabansag, an Alaska Native who also worked at one of the Rodrigo’s stores, similarly sold imported stone carvings as made by himself and other Alaskan Natives. Counterfeits, such as those marketed for huge sums of money by Macasaet, Cabansag, and Jessie Regino acting on the behest of the Rodrigos, tear at the very fabric of Alaska Native culture, livelihoods, and communities.”
“Travis Macasaet, Simeon Cabansag, and Jessie Reginio were employed by the Rodrigos and collaborated with them to misrepresent Philippine made stone carvings and totem poles as Alaska Native made,” said Edward Grace, Assistant Director of the U.S. Fish and Wildlife Service Office of Law Enforcement. “Cabansag used his tribal affiliation and falsely told the public he was the artist of the imported stone carvings. Macasaet used his tribal affiliation and falsely told the public that he was the artist of the wooden totem poles. These deceptive business practices cheated customers and undermined the economic livelihood of Alaska Native artists. Our special agents investigate crimes in violation of the Indian Arts and Crafts Act on behalf of the U.S. Department of the Interior and the Indian Arts and Crafts Board. Protecting Alaska Native culture and traditions is a critical part of the act. We thank our partners at the U.S. Department of Justice, the IACB, CBP, and the U.S. Forest Service for their assistance with this investigation.”
Co-conspirators in this case include:
- Cristobal Rodrigo was sentenced to two years in prison in August 2023 for his role in the scheme. His sentence was reduced to 18 months in June 2024, but remains the longest sentence a defendant has received for any Indian Arts and Crafts Act violation in the U.S., according to the Indian Arts and Crafts Board.
- Glenda Rodrigo was sentenced to up to six months’ home confinement and 240 hours of community service on July 8, 2024.
- Christian Rodrigo was sentenced to up to three months’ home confinement and 200 hours of community service on July 8, 2024.
- Cameron Losi, fka “Cameron Lawrence,” 39, was charged with 29 federal counts in February 2024.
The Department of Interior – U.S. Fish and Wildlife Service and Office of Law Enforcement, with assistance from the Indian Arts and Crafts Board, U.S. Customs and Border Protections, and U.S. Department of Agriculture, investigated the case.
Assistant U.S. Attorney Jack Schmidt prosecuted the case.
If you suspect potential Indian Arts and Crafts Act violations are being committed, a complaint may be submitted through the Indian Arts and Crafts Board’s online complaint form, www.doi.gov/iacb/should-i-report-potential-violation, by emailing [email protected], or by calling 888-278-3253.
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Three People Indicted on Charges Related to Hate Crime HoaxRead the Press Release
DENVER – The United States Attorney’s Office for the District of Colorado announces that Derrick Bernard Jr., 35, Ashely Blackcloud, 40, and Deanna West, 38, were indicted by a federal grand jury for maliciously conveying false information about a threat made by means of fire: a burning cross in front of a campaign sign defaced with a racial slur.
According to the indictment, the three defendants were charged for their alleged roles in a conspiracy to spread disinformation about the threat. The 2023 Colorado Springs mayoral run-off election involved Candidate 1, who was Black, and Candidate 2, who was white. After the initial election but before the run-off, Bernard sent a message in which he explained he was “mobilizing my squad in defense. Black ops style big brother.” He also sent messages referencing a desire to prevent “the klan” from gaining political control of the city. Bernard then worked with Blackcloud and West to stage, at an intersection in the City of Colorado Springs in the early hours of April 23, 2023, a cross burning in front of a campaign sign for Candidate 1 defaced with a racial slur. The three then allegedly spread false information about the event through an email from an anonymous source to various news and civic organizations.
All three defendants made their initial appearances in front of Magistrate Judge Timothy P. O’Hara.
The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
The investigation was conducted by the Federal Bureau of Investigation, with substantial assistance from the Colorado Springs Police Department. The case is being prosecuted by Assistant United States Attorneys Bryan Fields and Rebecca Weber.
Case Number: 24-cr-00320-RMR
Tahlequah Resident Pleads Guilty to Federal Drug and Firearm ChargesRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announces that Trae Allen Cordell, age 30, of Tahlequah, Oklahoma, entered a guilty plea to one count of Possession with Intent to Distribute Methamphetamine and one count of Felon in Possession of Firearm.
The Indictment alleged that on April 3, 2024, Cordell knowingly and intentionally possessed 500 grams or more of a mixture and substance containing a detectable amount of methamphetamine, a Schedule II controlled substance, with intent to distribute. The Indictment also alleged that on the same date, Cordell knowingly possessed two semi-automatic pistols after having been convicted of a crime punishable by imprisonment for a term exceeding one year.
The charges arose from an investigation by the Cherokee County Sheriff’s Office, the Oklahoma State Bureau of Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Gerald L. Jackson, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the plea and ordered the completion of a presentence investigation report. Cordell will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney T. Cameron McEwen represented the United States.
Stockton Man Sentenced to 2 Years in Prison for Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — Charles Dean Good, 55, of Stockton, was sentenced today to two years in prison for aggravated identity theft, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Good stole hundreds of thousands of dollars in US postage stamps from the US Postal Service by passing counterfeit checks in the names of identity-theft victims. He passed the bad checks at numerous post offices in Sacramento and San Joaquin Counties. In connection with the postage-stamp-theft scheme, Good possessed and used the name and California driver’s license number of at least one identity-theft victim. Between Feb. 2, 2012, and Jan. 18, 2019, he passed at least 1,326 bad checks, for a total loss to the U.S. Postal Service of at least $252,631, which he was ordered to pay in restitution.
This case was the product of an investigation by the U.S. Postal Inspection Service. Assistant U.S. Attorney Denise N. Yasinow prosecuted the case.
Stanislaus County Man Pleads Guilty to Transportation of a Minor with Intent to Engage in Criminal Sexual ActivityRead the Press Release
SACRAMENTO, Calif. — Cristian Ceja, 27, of Turlock, pleaded guilty today to transportation of a minor with intent to engage in criminal sexual activity, U.S. Attorney Phillip A. Talbert announced.
According to court documents, between Aug. 27, 2023, and Jan. 3, 2024, Ceja transported a minor victim from the Eastern District of California to Idaho with the intent to engage in criminal sexual activity. Ceja met the minor victim when Ceja was working as a delivery driver and delivered food to the minor’s house. Ceja thereafter used the minor victim’s phone number to track her down on social media and communicate with her. Ceja began a lengthy sexual relationship with the minor victim who, at that time, was 15. During the course of their sexual relationship, Ceja would sneak into the minor victim’s bedroom to have sex with her without being detected by her parents. On at least two occasions, Ceja video recorded himself engaging in sexual contact with the minor victim.
On Aug. 26, 2023, the minor victim’s mother contacted law enforcement because she found provocative photographs of the minor victim in her bedroom and was concerned her daughter was having a sexual relationship with an adult. In the early morning hours of Aug. 27, 2023, Ceja took the minor victim and fled to avoid detection and to continue the sexual relationship. While on the run, Ceja attempted to evade detection by placing stolen license plates on his vehicle, obliterating the VIN from his vehicle’s dashboard, spray painting the vehicle a different color, and adopting a false name. In order to avoid detection, Ceja discarded his cellphone while in flight and used a “burner” phone.
Ceja first took the minor victim to Nevada and then to Idaho where they lived for several months in a small camper trailer without running water or heat. Law enforcement found the minor victim after she contacted a family member via social media. On Jan. 3, 2024, law enforcement officers arrived at the camper trailer, rescued the minor victim, and arrested Ceja.
This case is the product of an investigation by the Stanislaus County Sheriff’s Office and Homeland Security Investigations. Assistant U.S. Attorney Shea J. Kenny is prosecuting the case.
Ceja is scheduled to be sentenced by U.S. District Judge John A. Mendez on Feb. 25, 2025. Ceja faces a mandatory statutory minimum of 10 years in prison and a maximum of life in prison, and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet-safety education.
St. Louis Man Sentenced to 9 Years in Prison for Trying to Buy 40 Pounds of MethamphetamineRead the Press Release
ST. LOUIS – U.S. District Judge Matthew T. Schelp on Tuesday sentenced a St. Louis, Missouri man to nine years in prison for trying to buy 40 pounds of methamphetamine.
On July 29, 2020, Richard Treis, now 51, and another man, Dennis Dewrock, arrived at a gas station in Pacific, Missouri with a black bag full of cash, expecting to purchase the meth. The deal had been arranged on a cell phone smuggled into prison.
But Homeland Security Investigations in El Paso was aware of their plan. They learned a month earlier that Tarik “Morocco” Mazhar, an inmate in the Great Plains Correctional Institution in Hinton, Okla., wanted to purchase a large quantity of methamphetamine. An undercover HSI special agent got involved. Tries called the undercover agent and confirmed that the delivery would happen in Missouri, and both Treis and Mazhar, via the smuggled cell phone, sent pictures of the cash to the agent.
Agents arrested both Treis and Dewrock after they swapped the cash for the drugs.
Treis pleaded guilty conspiracy to possess with intent to distribute 50 grams or more of methamphetamine. As part of his plea, he has agreed to forfeit $128,000 that has been in the custody of Homeland Security Investigations.
Mazhar, 43, pleaded guilty in December 2021 to the same methamphetamine conspiracy charge. He is serving a 13-year prison sentence.
Dewrock, 55, also pleaded guilty to the conspiracy charge and was sentenced to five years in prison.
Homeland Security Investigations investigated the case. Assistant U.S. Attorney Ricardo Dixon is prosecuting the case.
St. Louis Man Caught After 6 Years on the Run Admits Robbing Credit UnionRead the Press Release
ST. LOUIS – A man who was on the run for six years after he robbed a St. Louis, Missouri credit union pleaded guilty Tuesday.
Daniel Harris, 66, pleaded guilty in U.S. District Court in St. Louis to one felony count of bank robbery. He admitted robbing a credit union in the 4400 block of Chippewa Street in St. Louis on March 15, 2017. Harris approached a teller and placed a note on the counter that read, “I have a gun give me the money now.” The teller handed Harris cash and he left, discarding two jackets and a baseball cap nearby. Investigators found those items and a receipt in a jacket pocket with Harris’ name. His image, captured on surveillance cameras during the robbery, was identified by a relative and a former employer. Harris was indicted Oct. 11, 2017. He was located by the FBI in Phoenix and arrested there on August 9, 2023.
Harris is scheduled to be sentenced on March 4, 2025. The charge carries a potential penalty of up to 20 years in prison, a $250,000 fine or both prison and a fine.
The St. Louis Metropolitan Police Department and the FBI investigated the case. Assistant U.S. Attorney Linda Lane 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.
St. Louis County Man Admits Being Caught Again with Child PornographyRead the Press Release
ST. LOUIS – A St. Louis County man only recently released from custody for possession of child pornography on Tuesday admitted being caught with the material while on home confinement.
John V. Knowles IV, 45, pleaded guilty in U.S. District Court in St. Louis Tuesday to one count of possession of child pornography. He admitted that after his release from prison in a 2018 child pornography case, he was again in possession of child sexual abuse material. Knowles downloaded the material after police initially searched his home and seized computer equipment, but before he was indicted for the 2018 case.
Knowles was released into home confinement from a halfway house on Sept. 1, 2023. When probation officers visited 11 days later, they spotted electronic devices, including iPads, iPhones and laptops, that Knowles was prohibited from possessing or accessing under the terms of his supervised release. A court-approved search of the electronics found child sexual abuse material, Knowles’ plea agreement says.
Knowles is scheduled to be sentenced on Jan. 30, 2025. Possession of child pornography is punishable by up to 20 years in prison, a $250,000 fine or both prison and a fine.
The FBI, the U.S. Probation Office and the St. Louis County Police Department investigated the case. Assistant U.S. Attorney Colleen Lang is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Department of Justice Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who 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.
Southeast Missouri Man Sentenced to 179 Months in Prison on Child Pornography ChargeRead the Press Release
CAPE GIRARDEAU – U.S. District Judge Stephen N. Limbaugh Jr. on Tuesday sentenced southeast Missouri man to 179 months in prison for receiving and possessing child sexual abuse material.
Justin Wade Welker, 40, was caught after the FBI office in Detroit learned that two people were discussing engaging in sex acts with a minor on the Kik messaging and chat app. The FBI traced one of the participants to Welker’s home in the village of Sedgewickville, in Bollinger County, Missouri. FBI agents approached Welker at work, and he admitted viewing child pornography via Kik. His phone also contained child sexual abuse material.
Welker pleaded guilty in U.S District Court in Cape Girardeau in August to one count of receipt of child pornography.
The FBI and the Bollinger County Sheriff’s Office investigated the case. Assistant U.S. Attorney Julie Hunter is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Department of Justice Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who 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.
Second Man Indicted for Series of Robberies in Polk, Marion, and Hillsborough CountiesRead the Press Release
Tampa, Florida – United States Attorney Roger B. Handberg announces the unsealing of a criminal complaint charging Ron Yarde (23, Hillsborough) with conspiracy to commit Hobbs Act Robbery. If convicted, Yarde faces a maximum penalty of 20 years in federal prison. Yarde is the second individual charged in connection with these offenses. His alleged accomplice, Malcolm Green, was indicted on September 12, 2024, and is currently pending trial. If convicted, Green faces a minimum sentence of seven years, up to life, in federal prison.
According to court documents, between May 27 and July 27, 2024, Yarde, Green, and one other co-conspirator committed a series of robberies in Brooksville, Ocala, and Tampa, robbing a convenience store, a drug store, a gas station and two retail stores. At the time he committed these robberies, Yarde was on state probation for various offenses, including aggravated battery with a deadly weapon, burglary, grand theft, and carrying a concealed firearm.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hillsborough County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Diego F. Novaes.
A criminal complaint is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
Sacramento Man Sentenced to 27 Months in Prison for Being a Felon in Possession of a FirearmRead the Press Release
SACRAMENTO, Calif. — John Damian, 30, of Sacramento, was sentenced today by U.S. District Judge William B. Shubb to two years and three months in prison for being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.
According to court documents, on Nov. 8, 2023, law enforcement officers attempted to serve a search warrant on an armed robbery suspect who was walking with Damian. Damian was on parole for multiple felonies and was subject to a search clause. Damian initially hesitated to comply with the law enforcement officers’ commands and attempted to go around the side of the robbery suspect’s vehicle. But as the officers approached him, he admitted to having a gun. A loaded Glock 27 semi-automatic firearm was found in his right sweatshirt pocket. The firearm contained a 13-round magazine loaded with .40 caliber ammunition, but no round in the chamber. In his left sweatshirt pocket, detectives located approximately 20.74 grams of cocaine. Damian has previously been convicted of multiple felonies including assault with force likely to produce great bodily injury, being a felon in possession of a firearm, assault on person with a semi-automatic firearm, and willful discharge of a firearm in a negligent manner.
This case was the product of an investigation by the Federal Bureau of Investigation and the Sacramento Police Department. Special Assistant U.S. Attorney Matthew De Moura prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the U.S. Department of Justice 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.
Real Estate Development Executive Sentenced to 5 Years in Prison for Bribery Scheme with Corrupt San Luis Obispo County SupervisorRead the Press Release
LOS ANGELES – An executive at a San Luis Obispo-based real estate development company was sentenced today to 60 months in federal prison for paying a local politician nearly $95,000 in bribes and gifts in exchange for official acts benefiting the company’s development projects.
Ryan Wright, 38, of Grover Beach, was sentenced by United States District Judge Percy Anderson. Judge Anderson also scheduled a restitution hearing for January 27, 2025.
Wright, who has been in federal custody since October 2023, pleaded guilty on September 13 to one count of conspiracy to commit honest services wire fraud.
Wright was a managing member of PB Companies, LLC, a San Luis Obispo-based real estate development business, and had previously served as the company’s CEO until December 2015. In 2014, PB Companies had multiple projects in the works, including in the city and county of San Luis Obispo.
From at least June 2014 to March 2017, Wright illegally conspired to bribe Adam Hill, an elected member of the San Luis Obispo County Board of Supervisors. Hill represented the Third District, which included a majority of the city of San Luis Obispo. Hill voted on matters appearing before the Board of Supervisors, including budget bills that affected the city, and by virtue of his elected position, had influence over matters occurring within the city and in the city’s departments and commissions.
Specifically, Wright bribed Hill with money and other financial benefits. In exchange, the supervisor used his official position to help Wright secure approvals necessary for PB Companies’ real estate development projects, including by voting on two projects. Hill further used his official position to advise and influence other public officials deciding the fate of PB Companies’ projects, including city officials and individuals appointed to city commissions.
In total, as part of this conspiracy, Wright arranged for Hill or his shell company to receive nearly $95,000 in payments, including a $10,000 wire in November 2016 just over a month after Hill voted on one of PB Companies’ projects. Wright also paid for Hill’s flight, hotel, and front-row ticket to a Major League playoff game in San Francisco in October 2014.
Hill died in August 2020.
The FBI and IRS Criminal Investigation investigated this matter.
Assistant United States Attorneys Thomas F. Rybarczyk, Billy Joe McLain, and Daniel J. O’Brien of the Public Corruption and Civil Rights Section prosecuted this case.
Philadelphia Man Admits to Drug Trafficking in Monongalia CountyRead the Press Release
CLARKSBURG, WEST VIRGINIA – Rodney Johnson, 47, of Philadelphia, Pennsylvania, has admitted to his role in an organization that was supplying large amounts of methamphetamine, fentanyl, and cocaine to North Central West Virginia.
According to court documents, Johnson helped transport significant quantities of illicit drugs from Philadelphia to Morgantown, West Virginia. The organization utilized several properties in Monongalia County to store the drug supply.
Johnson faces up to 20 years in federal prison for each of the seven counts to which he pled. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorney Zelda Wesley is prosecuting the case on behalf of the government.
This case was investigated by the Mon Metro Drug Task Force, a HIDTA-funded initiative. The task force consists of the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Drug Enforcement Administration; the West Virginia State Police; the Monongalia County Sheriff’s Office; the Monongalia County Prosecuting Attorney’s Office; the Morgantown Police Department; the WVU Police Department; the Granville Police Department; and the Star City Police Department.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
U.S. Magistrate Michael John Aloi presided.
Paragon Systems Agrees to Pay $52M to Resolve False Claims Act Allegations Concerning Fraudulently Obtained Small Business Contracts and KickbacksRead the Press Release
Herndon, Virginia-based contractor Paragon Systems Inc. (Paragon) has agreed to pay to the United States $52 million to settle allegations that the company violated the False Claims Act by knowingly causing purported small businesses that it controlled to fraudulently obtain small business set-aside contracts. The settlement further resolves allegations that Paragon violated the Anti-Kickback Act. Paragon is one of the federal government’s largest providers of specialized security, fire and emergency response and mission support services, and the company provides security guards at federal buildings throughout the United States.
“Those who fraudulently procure, or assist others to fraudulently procure, small business set-aside contracts will be held accountable,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When ineligible companies obtain contracts reserved for veteran owned or socially or economically disadvantaged businesses, they prevent the small business community from receiving the contracting opportunities that Congress intended.”
The settlement resolves allegations that Paragon, acting through former high-ranking corporate executives, knowingly engaged in a fraudulent scheme to use purported small businesses that it controlled to obtain Department of Homeland Security (DHS) set-aside contracts reserved for Woman-Owned Small Businesses (WOSBs), Service-Disabled Veteran Owned Small Businesses (SDVOSBs) and other small businesses. The former high-ranking Paragon officials who carried out this alleged scheme included the company’s president, vice president of business development, vice president of operations, compliance manager and contracts manager. The United States contends the former Paragon executives engaged female relatives and friends to serve as figurehead owners of purported small businesses in order for those companies to obtain DHS set-aside contracts relating to the provision of security services at federal buildings, and that the Paragon-controlled companies then subcontracted substantially all of the work under the set-aside contracts to Paragon.
The settlement further resolves allegations that the purported small businesses surreptitiously paid substantial sums of money to the Paragon executives in violation of the Anti-Kickback Act. In total, the United States contends that the purported small businesses controlled by Paragon made over 300 separate payments to the former Paragon executives, totaling more than $11 million, which they attempted to conceal as purported “consulting payments” made to various shell companies formed by the former executives.
One of the purported small businesses, Athena Services International LLC (ASI) and its joint venture with Paragon, Athena Joint Venture Services LLC (AJVS), along with their owner, Alisa Silverman, have collectively agreed to pay more than $1.6 million to resolve their liability in connection with the alleged small business contracting fraud scheme. The settlement further resolves allegations that ASI, through Silverman, improperly received a Paycheck Protection Program loan that SBA forgave in full based on false representations that ASI complied with all PPP rules. The settlement with ASI, AJVS and Silverman is based on their ability to pay. The United States has filed a complaint against another purported small business, Patronus Systems Inc. and its owner Mabel O’Quinn, for their role in the alleged misconduct.
As part of the settlements, Paragon, ASI, AJVS and Silverman have agreed to cooperate with the department’s investigation of other parties and any related litigation.
“This settlement sends a message that flagrant misuse of government contracts through kickback schemes will not be tolerated,” said U.S. Attorney Erek L. Barron for the District of Maryland. “The integrity of our contracting programs is essential, and we remain committed to rooting out fraud that compromises fair access and accountability.”
“This settlement is the largest civil recovery in over a decade by the Department of Homeland Security Office of Inspector General (DHS-OIG),” said Inspector General Joseph V. Cuffari Ph.D of the DHS. “The settlement sends a clear message that the Federal Government will continue to investigate and prosecute fraud, waste, and abuse to protect small businesses owned by service-disabled veterans and other socially and economically disadvantaged individuals. I am grateful for the continued partnership with the Department of Justice and for the whistleblower who initiated the complaint.”
“Small Business Administration (SBA) programs must be preserved for truly small businesses,” said General Counsel Therese Meers of the SBA. “Fraud on SBA’s procurement programs deprives legitimate small businesses of important procurement opportunities, and fraud on the Paycheck Protection Program unconscionably undermines critical pandemic relief. The results in this matter reflect SBA’s and the government’s ongoing commitment to identifying and pursuing those who perpetrate such fraud.”
The settlements with Paragon, ASI, AJVS and Silverman resolve claims brought in a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The United States may intervene in the action, as it did in this case. The lawsuit is captioned United States ex rel. Pattison v. Paragon Systems Inc., et al., Case No. 21-3260 (DMD). As part of the settlement with Paragon, the whistleblower, Todd Pattison, will receive more than $9 million, and he will receive approximately $280,000 in connection with the settlement with ASI and Silverman.
The settlement was the result of a coordinated effort among the Civil Division’s Fraud Section, U.S. Attorney’s Office for the District of Maryland and DHS-OIG.
Senior Trial Counsel Alicia J. Bentley of the Civil Division’s Commercial Litigation Branch, Fraud Section, and Assistant U.S. Attorney Sarah Marquardt for the District of Maryland handled the matter.
The claims resolved by the settlement are allegations only. There has been no determination of liability as to those claims.
Paragon Settlement
Athena - Silverman Settlement
Paragon Systems Agrees to Pay $52M to Resolve False Claims Act Allegations Concerning Fraudulently Obtained Small Business Contracts and KickbacksRead the Press Release
Athena Services International, LLC and its Owner Also Agree to Pay More Than $1.6 Million to Resolve Related Allegations.
WASHINGTON – Herndon, Virginia-based contractor Paragon Systems Inc. (Paragon) has agreed to pay to the United States $52 million to settle allegations that the company violated the False Claims Act by knowingly causing purported small businesses that it controlled to fraudulently obtain small business set-aside contracts. The settlement further resolves allegations that Paragon violated the Anti-Kickback Act. Paragon is one of the Federal government’s largest providers of specialized security, fire and emergency response and mission support services, and the company provides security guards at federal buildings throughout the United States.
“This settlement sends a message that flagrant misuse of government contracts through kickback schemes will not be tolerated,” said U.S. Attorney Erek L. Barron for the District of Maryland. “The integrity of our contracting programs is essential, and we remain committed to rooting out fraud that compromises fair access and accountability.”
The settlement resolves allegations that Paragon, acting through former high-ranking corporate executives, knowingly engaged in a fraudulent scheme to use purported small businesses that it controlled to obtain U.S. Department of Homeland Security (DHS) set-aside contracts reserved for Woman-Owned Small Businesses (WOSBs), Service-Disabled Veteran Owned Small Businesses (SDVOSBs) and other small businesses. The former high-ranking Paragon officials who carried out this alleged scheme included the company’s President, Vice President of Business Development, Vice President of Operations, Compliance Manager and Contracts Manager. The United States contends the former Paragon executives engaged female relatives and friends to serve as figurehead owners of purported small businesses in order for those companies to obtain DHS set-aside contracts relating to the provision of security services at federal buildings, and that the Paragon-controlled companies then subcontracted substantially all of the work under the set-aside contracts to Paragon.
The settlement further resolves allegations that the purported small businesses surreptitiously paid substantial sums of money to the Paragon Executives in violation of the Anti-Kickback Act. In total, the United States contends that the purported small businesses controlled by Paragon made over 300 separate payments to the former Paragon executives, totaling more than $11 million, which they attempted to conceal as purported “consulting payments” made to various shell companies formed by the former executives.
One of the purported small businesses, Athena Services International LLC (ASI) and its joint venture with Paragon, Athena Joint Venture Services LLC (AJVS), along with their owner, Alisa Silverman, have collectively agreed to pay more than $1.6 million to resolve their liability in connection with the alleged small business contracting fraud scheme. The settlement further resolves allegations that ASI, through Silverman, improperly received a Paycheck Protection Program loan that SBA forgave in full based on false representations that ASI complied with all PPP rules. The settlement with ASI, AJVS and Silverman is based on their ability to pay. The United States has filed a complaint against another purported small business, Patronus Systems Inc. and its owner Mabel O’Quinn, for their role in the alleged misconduct.
As part of the settlements, Paragon, ASI, AJVS and Silverman have agreed to cooperate with the Department’s investigation of other parties and any related litigation.
“Those who fraudulently procure, or assist others to fraudulently procure, small business set-aside contracts will be held accountable,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When ineligible companies obtain contracts reserved for veteran owned or socially or economically disadvantaged businesses, they prevent the small business community from receiving the contracting opportunities that Congress intended.”
“This settlement is the largest civil recovery in over a decade by the Department of Homeland Security Office of Inspector General (DHS-OIG),” said Inspector General Joseph V. Cuffari Ph.D of DHS. “The settlement sends a clear message that the Federal Government will continue to investigate and prosecute fraud, waste, and abuse to protect small businesses owned by service-disabled veterans and other socially and economically disadvantaged individuals. I am grateful for the continued partnership with the Department of Justice and for the whistleblower who initiated the complaint.”
“Small Business Administration (SBA) programs must be preserved for truly small businesses,” said SBA General Counsel Therese Meers. “Fraud on SBA’s procurement programs deprives legitimate small businesses of important procurement opportunities, and fraud on the Paycheck Protection Program unconscionably undermines critical pandemic relief. The results in this matter reflect SBA’s and the government’s ongoing commitment to identifying and pursuing those who perpetrate such fraud.”
The settlements with Paragon, ASI, AJVS and Silverman resolve claims brought in a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The United States may intervene in the action, as it did in this case. The lawsuit is captioned United States ex rel. Pattison v. Paragon Systems Inc., et al., Case No. 21-3260 (DMD). As part of the settlement with Paragon, the whistleblower, Todd Pattison, will receive more than $9 million, and he will receive approximately $280,000 in connection with the settlement with ASI and Silverman.
This settlement was the result of a coordinated effort between the U.S. Attorney’s Office for the District of Maryland, the Civil Division’s Fraud Section, and the Department of Homeland Security’s Office of the Inspector General. U.S. Attorney Barron thanked Assistant U.S. Attorney Sarah Marquardt for the District of Maryland and Senior Trial Counsel Alicia J. Bentley of the Civil Division’s Commercial Litigation Branch, who handled the matter.
The claims resolved by the settlement are allegations only. There has been no determination of liability as to those claims.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Ozark Business Owner Sentenced for Social Security Fraud, PerjuryRead the Press Release
KANSAS CITY, Mo. – A former Harrisonville, Mo., man has been sentenced in federal court for Social Security fraud and for committing perjury when he testified at his trial.
Michael Sylvara, 39, who currently lives and owns a business in Ozark, Mo., but lived in Harrisonville at the time of the offense, was sentenced by U.S. District Judge Roseann A. Ketchmark on Wednesday, Nov. 6, to two years and three months in federal prison without parole. The court also ordered Sylvara to pay $42,369 in restitution to the government.
Sylvara is the co-owner of Volleyball Beach Ozark, the second largest indoor sand facility in the world, and maintains a real estate license.
On March 23, 2023, Sylvara was found guilty at trial of one count of Social Security fraud and one count of perjury.
Sylvara was originally indicted for Social Security fraud. Sylvara, who oversaw his disabled father’s Social Security benefits from 2016 to 2019, converted $42,369 of his father’s benefits to his own use. Sylvara testified in his own defense during a trial in October 2022, which resulted in a hung jury.
Sylvara was subsequently charged in a superseding indictment on Nov. 17, 2022. The superseding indictment contains the original charge of Social Security fraud and adds the perjury charge.
Sylvara was designated as the representative payee for his father, who is now deceased. As the representative payee, Sylvara was legally obligated to use all of the benefit payments to meet his father’s needs. Evidence introduced during the trial indicated that Sylvara instead converted some of his father’s benefit payments for his personal use to pay his utility, insurance and student loan bills, as well as his realtor association fees, over a period of 30 months.
A witness at the trial in October 2022 testified that she purchased basic necessities for Sylvara’s father, including clothes, underwear, socks, and a pair of shoes, without being reimbursed. She also testified that the only items in his father’s refrigerator were water, bread, cat food, and condiments. She described seeing Sylvara’s father eat cat food.
Sylvara presented testimony that he knew was false while under oath during his first trial in October 2022. Sylvara attempted to justify multiple cash withdrawals (totaling over $23,000) he made from the representative payee account. He claimed under oath he had a written agreement with the Social Security Administration that he could be paid $14 an hour for taking care of his father. Subsequent investigation showed there is no such agreement and there never has been.
This case was prosecuted by Special Assistant U.S. Attorneys Bradley Cooper, Amanda Hanson, and Courtney Pratten. It was investigated by the Social Security Administration.
Oregon Man Pleads Guilty to Three Federal Hate Crimes for Defacing SynagogueRead the Press Release
An Oregon man pleaded guilty today to three federal hate crimes after intentionally defacing a synagogue in Eugene, Oregon, on multiple occasions.
Adam Edward Braun, 34, of Eugene, pleaded guilty to two counts of intentionally defacing a synagogue and one count of attempting to intentionally damage the synagogue because the synagogue was a place of religious worship for Jewish people.
According to court documents and statements made in court, Braun targeted Temple Beth Israel, a Jewish synagogue in Eugene, with graffiti on two separate occasions. Between Sept. 10 and 11, 2023, Braun spray-painted the numbers “1377” on the exterior of the synagogue building. Braun admitted that he selected the numbers “1377” because it was similar to “1488,” a popular white-supremacist slogan that references Adolf Hitler and the “Fourteen words.” Months later, in January, Braun attempted to damage the synagogue’s glass doors using a ball-peen hammer. Braun stopped when he saw he was being recorded by a surveillance camera and went to another area of the property where he spray-painted the slogan “WHITE POWER” in large letters.
Braun faces a maximum penalty of one year in prison for each of the three charges, as well as fines and restitution.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Natalie K. Wight for the District of Oregon and Special Agent in Charge Douglas Olson of the FBI Portland Field Office made the announcement.
The FBI Portland Field Office investigated the case with assistance from the Eugene Police Department.
Trial Attorney Cameron A. Bell of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Gavin W. Bruce for the District of Oregon are prosecuting the case.
New Orleans Man Guilty of Possession of Firearms and Drug ChargesRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that on November 7, 2024, DERRICK THERIOT (“D. THERIOT”), age 29, of New Orleans, pled guilty to Counts 5 through 8 of the superseding indictment pending against him. Count 5 charged D. THERIOT with possession, with intent to distribute, fentanyl, in violation of Title 21, United States Code, Sections 841(a)(1), (b)(1)(C), and (b)(1)(D). Count 6 charged D. THERIOT with possession of a firearm, in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A)(i). Count 7 charged D. THERIOT with possession of a machinegun, in violation of Title 18, United States Code, Sections 922(o) and 924(a)(2). Finally, Count 8 charged D. THERIOT with being a felon in possession of a firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(8).
As to Count 5, the maximum penalty is 20 years of imprisonment, and/or up to a $1,000,000 fine, and at least 3 years of supervised release.
As to Count 6, the minimum penalty is 5 years, up to a life sentence, to run consecutively to any other sentence, up to a $250,000 fine, and up to 5 years of supervised release.
As to Count 7, the maximum penalty is 10 years of imprisonment, and/or up to a $250,000 fine, and up to 3 years of supervised release.
As to Count 8, the maximum penalty is 15 years of imprisonment, and/or up to a $250,000 fine, and up to 3 years of supervised release. Each count carries a mandatory special assessment fee of $100.00.
According to court records, on May 12, 2023, two victims were shot and killed after leaving a bar on N. Claiborne Avenue. A co-defendant was identified as a possible suspect in that double homicide. During the investigation of the co-defendant, the Bureau of Alcohol, Tobacco, Firearms, and Explosives agents, assisting New Orleans Police Department detectives, saw suspected stolen vehicles at two residences, and linked one of them to the co-defendant and D. THERIOT.
On November 27, 2023, law enforcement obtained search warrants for both residences. D. THERIOT admitted possessing the fentanyl for future drug sales. Additionally, D. THERIOT admitted possessing firearms in furtherance of drug trafficking, because those weapons were kept to protect his drugs. Additionally, D. THERIOT knew that the Glock Model 27, 40 caliber pistol contained a Glock auto-sear and, if the trigger was pulled, it would expel more than one bullet without having to reset the trigger.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun track violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the New Orleans Police Department. United States Attorney Mike Trummel of the Violent Crime Unit handled the prosecution.
Nashville Man Sentenced to 15 Years for Unlawful Possession of Ammunition by a FelonRead the Press Release
NASHVILLE – Demetris Octavius Parrish, 37, of Nashville, Tennessee, was sentenced on Friday to 15 years in prison for unlawful possession of ammunition by a convicted felon, announced Acting United States Attorney Thomas J. Jaworski for the Middle District of Tennessee.
At approximately 8:30 a.m. on February 26, 2021, Parrish entered the R&B Market located at 2600 Clarksville Pike, in Nashville. The Market’s manager recognized Parrish as a regular customer. They had a brief conversation, during which Parrish said that he wanted to exchange some goods. When the manager told Parrish that he could not return those goods because the Market did not sell them, Parrish became enraged, stated that he would return to kill the manager, and then left the Market.
Approximately 30 minutes later, Parrish returned to the Market carrying a black 9mm pistol. Parrish entered the Market and pointed the pistol at the manager, who was behind the check-out counter. As the manager fled to the rear of the Market, Parrish fired multiple shots at him. Parrish then fled the Market. Parrish’s first visit to the Market, the attempted shooting and Parrish’s flight from the Market were captured by the Market’s surveillance cameras.
Metro Nashville police officers responded and, upon arriving, recovered three 9mm caliber cartridge cases inside the Market from the rounds that Parrish had fired.
“This prosecution demonstrates our office’s commitment to protecting the community from repeat offenders who wreak havoc with firearms,” said Acting United States Attorney Thomas J. Jaworski. “The defendant was previously convicted of at least six felony offenses, including aggravated assault and aggravated robbery. Thanks to the work by our prosecutors and law enforcement partners, the community will finally be safe from the defendant’s crimes for an extended period.”
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Metropolitan Nashville Police Department. Assistant U.S. Attorneys Nicholas J. Goldin and Rascoe Dean prosecuted the case.
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Naples Man Sentenced for Possessing and Accessing with Intent to View Child Sexual Abuse ImagesRead the Press Release
Fort Myers, Florida – U.S. District Judge Thomas P. Barber has sentenced Myles Edwin Huff (46, Naples) to five years in federal prison for possessing and accessing with intent to view images depicting the sexual abuse of children. Huff was also ordered to register as a sex offender. Huff entered a guilty plea on July 23, 2024.
According to court documents, between July and September 2023, the National Center for Missing and Exploited Children (NCMEC) received 28 cyber tips from an electronic service provider reporting that Huff was involved in the possession of child sex abuse material. On November 16, 2023, the FBI executed a search warrant at Huff’s residence and seized his cellphone. During an interview with agents, Huff stated that he used his cellphone to search for child sexual abuse material. The subsequent forensic examination of Huff’s cellphone revealed images of child sexual abuse material.
This case was investigated by Federal Bureau of Investigation, the Fort Myers Child Exploitation and Human Trafficking Task Force, which includes the Lee County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Yolande G. Viacava.
This is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Montgomery Man Charged with Possession of a Machinegun Conversion Device on the Campus of Tuskegee UniversityRead the Press Release
Montgomery, Ala. – A Montgomery, Alabama, man is facing a federal charge for possessing a firearm with a machinegun conversion device, announced Acting United States Attorney Kevin Davidson. On Nov. 10, 2024, law enforcement arrested 25-year-old Jaquez Myrick, alleging that he illegally possessed a machinegun.
According to the criminal complaint and other court records, on Nov. 10, 2024, law enforcement responded to a reported mass shooting at a parking lot on the campus of Tuskegee University in Tuskegee, Alabama. Upon arrival, responding officers observed a large number of people gathered in the parking lot and heard shots being fired. One of the officers observed Myrick holding a handgun and detained him. When agents inspected the handgun retrieved from Myrick, they determined that it was equipped with a machinegun conversion device.
When installed on a firearm, a machinegun conversion device, commonly known as a “switch,” allows a gun to function as a fully automatic weapon capable of firing up to 20 rounds per second with a single pull of the trigger. The possession of a machinegun — which under the relevant federal statute, includes the possession of a conversion device alone — carries a penalty of up to ten years in prison and a $250,000 fine. Myrick made his initial appearance in federal court this afternoon in Montgomery.
A criminal complaint is merely an allegation that a crime has been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The Alabama Law Enforcement Agency (ALEA), Tuskegee University Police Department, City of Tuskegee Police Department, Macon County Sheriff’s Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Federal Bureau of Investigation (FBI), the Fifth Judicial Circuit District Attorney’s Office, and the Alabama Attorney General’s Office are investigating this case. Assistant U.S. Attorney Tara S. Ratz for the Middle District of Alabama is prosecuting the case.
Law enforcement is asking for the public’s assistance in this investigation. Anyone with information is asked to please submit tips at 1-800-CALL-FBI and upload any digital files regarding this incident online at: fbi.gov/tuskegeeshooting24.
Montgomery County Man, N.J. Woman Sentenced for Conspiracy to Commit Visa Fraud, Conspiracy to Obstruct Justice, RespectivelyRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that two defendants charged for their roles in the alleged Savani Group racketeering conspiracy have been sentenced by United States District Court Judge Jeffrey L. Schmehl.
Vivek Savani, 37, of North Wales, Pennsylvania, was sentenced today to 10 days' imprisonment, three years of supervised release, the first 60 days of which are served in home detention, a $1,000 fine, and a $100 special assessment for conspiracy to commit visa fraud. He pleaded guilty to that offense in July, admitting involvement in a scheme to unlawfully obtain H1-B nonimmigrant work visas, which allow an employer to temporarily employ a foreign worker in the United States on a non-immigrant basis in a “specialty occupation.”
Susan Malpartida, 29, of Passaic, New Jersey, was sentenced on Friday to one year of probation, a $500 fine, and a $100 special assessment for conspiracy to obstruct justice. In May, Malpartida pleaded guilty to lying to a federal grand jury in an effort to thwart a government investigation into serious visa fraud crimes allegedly committed at her employer, American Unity Dental.
Vivek Savani and Malpartida were among 12 defendants charged in a sweeping 42-count indictment unsealed in January 2023, which alleged that, for more than a decade, brothers Bhaskar Savani, Arun Savani, and Niranjan Savani, and others operated a criminal enterprise through a multi-state network of dental practices and related dental businesses. (Note: Vivek Savani is not related to the Savani brothers.) The case is scheduled to go to trial in April 2025.
This case was investigated by the FBI; the Department of Health and Human Services Office of Inspector General; IRS Criminal Investigation; Homeland Security Investigations; the Department of State’s Diplomatic Security Service; the Food and Drug Administration Office of Criminal Investigations; the Department of Labor Office of Inspector General; the Pennsylvania Attorney General’s Office; and the State of Iowa Medicaid Fraud Control Unit.
The case is being prosecuted by Assistant United States Attorneys Lesley Bonney, Kevin Jayne, and Anthony Scicchitano, and Department of Justice Money Laundering and Asset Recovery Section Attorney Darrin McCollough, Senior Policy Advisor. The asset seizure and forfeiture is being prosecuted by Assistant United States Attorneys Sarah Grieb and Andrew Jenemann.
Matawan Cardiologist Sentenced to 35 Months in Prison for Defrauding Health Insurance Companies of More Than $1.9 Million through Health Care Fraud SchemeRead the Press Release
TRENTON, N.J. – The owner and sole medical provider of a New Jersey medical practice was sentenced today to 35 months in prison for orchestrating a health care fraud scheme causing over $1.9 million in insurance reimbursements for false claims, U.S. Attorney Philip R. Sellinger announced.
Dr. Fazal Panezai, 76, of Morganville, New Jersey, previously pleaded guilty before U.S. District Judge Georgette Castner to an information charging him with participating in a health care fraud scheme. Judge Castner imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
Panezai, who owned and operated Matawan-Aberdeen Heart & Medical Center, for years submitted false claims to at least six health insurance benefit programs for office visits that either never occurred or did not take place for the length of time that he claimed.
For example, Panezai submitted claims for office visits lasting approximately 1,675 minutes – approximately 27.9 hours – for one day’s worth of office visits on May 27, 2022. Panezai also billed health insurance providers over $80,000 for office visits when he was out of the country and not conducting any office visits. Panezai also submitted claims for office visits when patients only picked up a prescription for a controlled substance from the front desk and never met with him. The false claims caused insurance plans to issue reimbursement checks to the center. Panezai kept the illicit profits, which totaled more than $1.9 million.
In addition to the prison term, Judge Castner sentenced Panezai to three years of supervised release and ordered him to pay restitution of $1.95 million.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation leading to the sentencing. He also thanked the Matawan Police Department.
The government is represented by Assistant U.S. Attorneys DeNae Thomas of the Health Care Fraud Unit and Jessica R. Ecker of the Criminal Division in Newark.
Leader of Real Estate Investment Firm Sentenced to 12 Years in Prison for Role in $658 Million Ponzi Scheme and Multimillion-Dollar Tax Evasion ConspiracyRead the Press Release
NEWARK, N.J. – The shadow chief executive officer of National Realty Investment Advisors LLC (NRIA) was sentenced today to 144 months in prison for orchestrating a scheme to defraud more than 2,000 investors in a $658 million Ponzi scheme and conspiring to evade millions of dollars in tax liabilities, U.S. Attorney Philip R. Sellinger announced.
Thomas Nicholas Salzano, aka “Nicholas Salzano,” 66, of Secaucus, New Jersey, previously pleaded guilty before U.S. District Judge Evelyn Padin to securities fraud, conspiracy to commit wire fraud, and conspiracy to defraud the United States. Salzano admitted he made numerous misrepresentations to investors while he secretly ran NRIA behind the scenes. He admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends. Salzano also admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends and failing to report and pay taxes on those misappropriated funds. Judge Padin imposed the sentence today in Newark federal court.
“For years, Salzano, operating from the shadows to conceal his prior history of fraud, told lie after lie to investors, continuously deceived them, and operated his business as a Ponzi scheme, through which he stole money from thousands of investors in order to support his lavish lifestyle. His greed and flagrant disregard for the law caused staggering losses in excess of $650 million. This office will continue to prioritize prosecuting individuals, like Salzano, who engage in rampant fraud to ensure they are held accountable with long jail sentences and are ordered to make their victims whole.”
U.S. Attorney Philip R. Sellinger
“Salzano trampled on the trust that his clients placed in him to invest their money prudently but instead he stole their investments for his own self-enrichment through his atrocious scheme which resulted in the theft of over $650 million,” said Harry Chavis, Jr., Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office. “Today’s sentencing of Salzano should send a message to others who choose to prey on innocent victims through similar investment fraud schemes that IRS – Criminal Investigation and our law enforcement partners are committed to pursuing justice for all Americans that are victimized by these schemes. Salzano’s clients were not the only victim of this scheme, every American taxpayer was also victimized by Salzano when he failed to pay tens of millions of dollars in taxes which would have funded local schools, infrastructure projects, and social programs for those in need.”
According to documents filed in this case and statements made in court:
From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC (the “Fund”), a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions. These included the financial position of NRIA, the manner in which the defendants and their conspirators used Fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.
Salzano and his conspirators executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors; advertisements on billboards, television, and radio; and meetings and presentations to investors. Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors, which were intended to mislead Fund investors into believing that NRIA was a solvent business that generated significant profits. In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors. Despite investing almost none of his own capital into the business, Salzano misappropriated millions of dollars of investor money to support his lavish lifestyle, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA.
Salzano concealed his true managerial role at NRIA in an effort to avoid scrutiny from investors of his history of fraud at a large telecommunications company. In addition to defrauding investors, Salzano orchestrated a separate, but related, conspiracy to avoid paying taxes on his misappropriated funds.
In addition to the prison term, Judge Padin sentenced Salzano to three years of supervised release. As part of his plea agreement, Salzano has agreed to a forfeiture money judgment of $8.52 million, full restitution of $507.4 million to the victims of his offenses, and has agreed to pay $6.46 million to the IRS.
U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Chavis in Boston; and special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation, with assistance from FBI Headquarters Criminal Investigative Division.
The government is represented by Assistant U.S. Attorneys Jonathan Fayer, Lauren E. Repole, and John Mezzanotte, of the U.S. Attorney’s Office’s Criminal Division, and Trial Attorney Samuel Bean of the U.S. Justice Department’s Tax Division.
Las Vegas Man Sentenced to over 16 Years in Prison for Sexual Exploitation of TeenagerRead the Press Release
LAS VEGAS – A Las Vegas man was sentenced today by United States District Judge Jennifer A. Dorsey to 16 years and eight months in prison to be followed by 10 years of supervised release for coercion and enticement, child sexual exploitation, and possession of child sexual abuse material (CSAM).
According to court documents, Kenton Hardy King (29) met a 15-year-old child through Omegle, an online chat platform. In June 2020, he coerced and enticed the victim to engage in sexual activity with him and to engage in sexually explicit conduct for the purpose of producing sexually explicit material. King possessed CSAM on two of his cell phones. He threatened to send images and video of the victim to the victim’s family, friends, and schoolmates.
In June 2024, following a five-day trial, a jury found King guilty of one count each of coercion and enticement; sexual exploitation of children; and possession of child pornography.
United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.
The FBI and the Henderson Police Department investigated the case. Assistant United States Attorneys Steven Rose and Jean Ripley prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse, launched in May 2006 by the Justice Department. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Anyone with information on suspected child sexual exploitation can contact the National Center for Missing and Exploited Children at 1-800-THE-LOST (1-800-843-5678) or https://report.cybertip.org.
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KC Woman Sentenced to 45 Years for Sexual Exploitation of Two Child VictimsRead the Press Release
SPRINGFIELD, Mo. – A Kansas City, Mo., woman was sentenced in federal court today for the sexual exploitation of two children.
Jessica Ann Young, 34, was sentenced by U.S. District Judge Stephen R. Bough to 45 years in federal prison without parole.
On March 11, 2024, Jessica Young pleaded guilty to two counts of the sexual exploitation of a minor. Her husband, Houston Wade Young, 37, was sentenced on July 30, 2024, to life in federal prison without parole. Houston Young pleaded guilty to one count of the sexual exploitation of a minor on Jan. 30, 2024.
Houston Young, while an inmate at the Vernon County jail, was found to be in possession of a cell phone that contained images of child pornography on March 5, 2020. Young was being detained pending a civil proceeding to determine whether he should be civilly committed as a sexually violent predator for his prior sex offense convictions.
On March 7, 2020, law enforcement officers received information that Jessica Young had sent pornographic images of a 7-year-old child (identified in court documents as “John Doe 1”) to Houston Young’s cell phone. Investigators found text messages on the cell phone between Jessica and Houston Young that discussed sexually abusing John Doe 1. During the text messages, Jessica Young sent Houston Young two pornographic images of John Doe 1. Multiple other images of child pornography sent by Jessica Young also were found on Houston Young’s cell phone.
Jessica Young admitted she had sexually abused two child victims, John Doe 1 and 13-year-old John Doe 2, on multiple occasions. Jessica Young also admitted that she had recorded video of herself sexually abusing John Doe 2.
A forensic analysis of Houston Young’s cell phone determined that he sent images of child pornography to Jessica Young and a 16-year-old child victim (identified in court documents as “Jane Doe”). Houston Young sent pornographic images of himself to Jane Doe, solicited pornographic images of her that she sent to him, and engaged in sexual conversations. Jane Doe told investigators she met Houston Young on a game room chat, League of Legends, and started talking via that forum. They communicated via text, the Kik and Whatsapp applications, and video chat.
Houston Young was involuntarily committed to the Missouri Department of Mental Health’s Sex Offender Rehabilitation and Treatment Services program in February 2021. He has two prior felony convictions related to the sexual exploitation of children. He was convicted of child molestation in Wright County, Mo., in 2005 and of possessing child pornography in Jackson County, Mo., in 2016.
This case was prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI, the Vernon County, Mo., Sheriff’s Department, and the Kentucky Department of Criminal Investigations.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Justice Department Sues to Block UnitedHealth Group’s Acquisition of Home Health and Hospice Provider AmedisysRead the Press Release
The Justice Department, together with the Attorneys General of Maryland, Illinois, New Jersey, and New York, filed a civil antitrust lawsuit today to block UnitedHealth Group Incorporated (UnitedHealth)’s proposed $3.3 billion acquisition of rival home health and hospice services provider Amedisys Inc. (Amedisys). The complaint filed in the District of Maryland alleges that the transaction would eliminate competition between UnitedHealth and Amedisys (Defendants). Since UnitedHealth’s prior acquisition of Amedisys’s home health and hospice rival LHC Group Inc. (LHC) in 2023, Defendants have been two of the largest home health and hospice providers in the United States. Eliminating the competition between UnitedHealth and Amedisys would harm patients who receive home health and hospice services, insurers who contract for home health services, and nurses who provide home health and hospice services.
“We are challenging this merger because home health and hospice patients and their families experiencing some of the most difficult moments of their lives deserve affordable, high quality care options,” said Attorney General Merrick B. Garland. “The Justice Department will not hesitate to check unlawful consolidation and monopolization in the healthcare market that threatens to harm vulnerable patients, their families, and health care workers.”
“Millions of patients depend on United and Amedisys to receive home health and hospice care in the comfort of their homes,” said Principal Deputy Associate Attorney General Benjamin C. Mizer. “The Department’s lawsuit demonstrates our commitment to ensuring that consolidation does not threaten quality, affordability, or wages in these vital healthcare markets. I commend the staff of the Antitrust Division for their extraordinary work on this matter.”
“American healthcare is unwell. Unless this $3.3 billion transaction is stopped, UnitedHealth Group will further extend its grip to home health and hospice care, threatening seniors, their families and nurses,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “I want to thank my colleagues at the Antitrust Division for their tireless efforts to fight on behalf of Americans for a competitive economy.”
As described in the complaint, home health and hospice services constitute critically important parts of the American healthcare system. Home health care helps patients recover from hospitalization or receive continuing treatment for a chronic condition at home, while hospice provides comfort and support to terminally ill patients and their family members. Patients rely on the skill and expertise of home health and hospice nurses, who must effectively treat patients at home.
Today, Defendants are fierce competitors in the provision of home health and hospice services. According to the complaint, Amedisys’s former CEO and current Board Chairman, has acknowledged that the “pure competition” between UnitedHealth and Amedisys helps them “keep each other honest” and “driv[e] better and better quality” to the benefit of their patients. Further, the two companies view each other as close competitors for home health and hospice nurses. UnitedHealth’s proposed acquisition of Amedisys would eliminate that competition and threaten the benefits it provides. UnitedHealth’s market share after the transaction would make the merger presumptively illegal in:
- Hundreds of local home health care markets, with an annual volume of commerce exceeding $1.6 billion annually, in 23 states and the District of Columbia;
- Dozens of local hospice markets, with an annual volume of commerce exceeding $300 million annually, in 8 states; and
- Hundreds of local markets for home health and hospice nurse labor, employing at least 8,000 nurses, in 24 states.
To address some of the overlaps between UnitedHealth and Amedisys, UnitedHealth has proposed to divest certain facilities to VitalCaring Group (VitalCaring). But as the complaint alleges, the proposed divestiture does not alleviate harm in over 100 home health, hospice, and labor markets, which generate at least a billion dollars in revenue annually, serve at least 200,000 patients, and employ at least 4,000 nurses. As further alleged in the complaint, VitalCaring has lower quality scores than either UnitedHealth or Amedisys and is beset by financial challenges, including a potential legal judgment approaching a half-billion dollars. According to a Texas court, before becoming CEO of VitalCaring, its current CEO was running a competitor of VitalCaring while also running VitalCaring “from the shadows.”
The United States also seeks civil penalties against Amedisys for falsely certifying compliance with its obligations under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The complaint alleges that Amedisys violated the HSR Act because, at the time of its sworn certification, Amedisys failed to produce millions of documents or disclose the deletion of other documents. For each day that Amedisys was in violation of the HSR Act, the United States seeks a monetary penalty of up to $51,744, as authorized by statute.
UnitedHealth is a publicly traded Delaware corporation headquartered in Minnetonka, Minnesota. UnitedHealth is a vertically integrated insurer, healthcare provider, pharmacy benefit manager, and healthcare software and services vendor that brought in $372 billion in revenue in 2023. In 2022, before their company was acquired by UnitedHealth, LHC nurses and other healthcare professionals made approximately 12 million visits to patients in 37 states and the District of Columbia and earned over $2.3 billion in revenue.
Amedisys is a home health and hospice services provider and a publicly traded Delaware corporation headquartered in Baton Rouge, Louisiana. In 2023, Amedisys nurses and other healthcare professionals made 10.6 million visits to patients in 37 states and the District of Columbia, earning the company $2.2 billion in revenue.
Jury Finds Lakeland Man Guilty of Conspiracy to Distribute CocaineRead the Press Release
Orlando, FL – United States Attorney Roger B. Handberg announces that a federal jury has found Damion Clarke (33, Lakeland) guilty of conspiring to distribute cocaine. Clarke faces a maximum penalty of 20 years in federal prison. His sentencing hearing has been scheduled for March 12, 2025.
According to the evidence and testimony presented during the three-day trial, the FBI Orlando Safe Streets Task Force began an investigation into a Jamaican Criminal Enterprise engaged in the distribution of controlled substances in Central Florida. The FBI received information from a confidential source that Clarke had connections to this enterprise and was willing to connect them with Rafick Gilpin, an individual who distributed large volumes of cocaine, in exchange for a portion of the profits from the drug transactions. The FBI utilized the confidential source and an undercover agent to conduct controlled purchases of cocaine ranging from ounces to one kilogram, as well as firearms, from Gilpin and his co-conspirators from November 2021 until July 2022 in Orlando. During the course of the investigation, Clarke acted as the middleman between the confidential source and Gilpin by introducing the parties, facilitating their communications during the negotiations and lead ups to the transactions, and ensuring the transactions were successfully completed.
On August 8, 2023, Gilpin was sentenced to 10 years in federal prison for conspiracy to distribute cocaine and possession of firearms in furtherance of a drug trafficking offense.
This case was investigated by the Federal Bureau of Investigation, the Orlando Police Department, and the Apopka Police Department. It is being prosecuted by Assistant United States Attorney Michael Sartoian.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Jacksonville Sex Offender Indicted for Attempting to Meet A 13-Year-Old Child to Engage in Sexual ActivityRead the Press Release
Jacksonville, Florida – United States Attorney Roger B. Handberg announces the return of an indictment charging Jeremy Wayne Leggett (36, Jacksonville) with using the internet to attempt to entice a child to engage in sexual activity. If convicted, Leggett faces a minimum penalty of 10 years, up to life, in federal prison, and a potential life term of supervised release. Leggett is a registered child sex offender, having been previously convicted in Florida in 2020 of traveling to meet a child to commit an unlawful sexual offense and transmission of harmful materials to a child. Leggett has been ordered detained pending the outcome of his case.
According to court documents, on June 16, 2023, an undercover FBI agent (the “UC”) in the Jacksonville area, posing as a minor child, was working online in a particular social media application (app) to identify individuals seeking to make contact with and engage in sexual activity with children. The UC engaged in online conversation with an app username “dAddi” who posted a notice in a public chat room that read “Lookingfor[under 18 emoji] wannaspoiladaughter.” During this online conversation, user “dAddi,” who was subsequently identified as Leggett, was advised that the “child” was 13 years old. Leggett asked if the “child” “[l]ike[d] older men,” and sent the “child” a photo of himself. After more conversation, Leggett suggested that they meet in person for sexual activity, and he sent the “child” an explicit photo of himself. During the next three days, Leggett reinitiated text messages with the UC and continued attempting to persuade the “child” to meet for sex and to send him sexually suggestive photos.
On June 19, 2023, Leggett and the “child” made arrangements to meet at a shopping center in Jacksonville. Later that evening, Leggett went to the agreed-upon location and drove around the parking lot there for about 30 minutes. When law enforcement officers attempted to make contact with Leggett, he quickly reversed his vehicle and fled the scene. A short time later, officers with the Jacksonville Sheriff’s Office and FBI agents located Leggett at a residence in Jacksonville and arrested him.
This case was investigated by the Federal Bureau of Investigation, the Jacksonville Sheriff’s Office, and the Naval Criminal Investigative Service. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue child victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Insurance Mogul Pleads Guilty to $2B Fraud and Money Laundering SchemeRead the Press Release
A Florida man pleaded guilty today to conspiracy to commit offenses against the United States and conspiracy to commit money laundering in connection with a scheme to defraud insurance regulators and policyholders through a web of companies based in North Carolina, Bermuda, Malta, and elsewhere.
According to court documents, from no later than 2016 through at least 2019, Greg Lindberg, 54, of Tampa, conspired with others to defraud various insurance companies, other third parties, and ultimately thousands of insurance policyholders. Lindberg and others conspired to deceive the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his companies, and improperly used insurance company funds for his personal benefit. Lindberg and his co-conspirators caused companies he controlled to invest more than $2 billion in loans and other securities with his own affiliated companies and laundered the proceeds of the scheme. As set forth in the indictment, Lindberg directed the scheme and personally benefitted from the fraud in part by “forgiving” more than $125 million in loans to himself from the insurance companies that he controlled.
To carry out the conspiracies, Lindberg and others engaged in circular transactions among Lindberg’s web of entities using insurance company funds and made and caused to be made various materially false and misleading statements and representations to and omitted material information from regulators, various ratings agencies, insurance companies, insurance policyholders, and others regarding these transactions.
As a result of Lindberg’s conduct, his insurance companies, third-party entities, and policyholders suffered substantial financial hardship, and some of his insurance companies have been placed in rehabilitation and liquidation.
“Greg Lindberg and his co-conspirators misused $2 billion of company funds in their international scheme to defraud corporate victims, regulators, and policyholders,” said Principal Deputy Assistant Attorney General Nicole Argentieri, head of the Justice Department’s Criminal Division. “Thousands of policyholders suffered substantial financial hardship as a result of Lindberg’s fraud scheme, which left multiple companies in or on the brink of liquidation. The Justice Department will not hesitate to hold corporate executives accountable when they threaten critical sectors of the economy, like the insurance industry, to enrich themselves.”
“Lindberg created a complex web of insurance companies, investment businesses, and other business entities and exploited them to engage in millions of dollars of circular transactions. Lindberg’s actions harmed thousands of policyholders, deceived regulators, and caused tremendous risk for the insurance industry,” said U.S. Attorney Dena J. King for the Western District of North Carolina. “Today’s guilty plea affirms our commitment to protecting the public from predatory financial schemes and bringing to justice those who betray public trust for personal gain.”
“Lindberg’s elaborate network of investments, insurance companies, and financial deals was designed to exploit the insurance system and drain millions from policyholders to enrich himself at the public’s expense,” said Special Agent in Charge Robert M. DeWitt of the FBI Charlotte Field Office. “The FBI remains steadfast in our commitment to root out financial fraud.”
Lindberg pleaded guilty to one count of conspiracy to commit offenses against the United States, including wire fraud, investment adviser fraud, and crimes in connection with insurance business, and one count of money laundering conspiracy. He faces a maximum penalty of five years in prison on the conspiracy to commit offenses against the United States count and 10 years in prison on the money laundering conspiracy count. In addition to pleading guilty to these charges, on May 15, following a retrial, Lindberg was convicted by a federal jury in Charlotte of conspiracy to commit honest services wire fraud and bribery concerning programs receiving federal funds for orchestrating a bribery scheme involving independent expenditure accounts and improper campaign contributions, aimed at bribing the elected North Carolina Commissioner of Insurance to influence the regulation of Lindberg’s insurance companies. A sentencing date has not yet been set. A federal district court judge will determine Lindberg’s sentence in both cases after considering the U.S. Sentencing Guidelines and other statutory factors in each case. Lindberg was remanded into the custody of the U.S. Marshals.
In December 2022, one of Lindberg’s top executives, Christopher Herwig, pleaded guilty in a related case to conspiring with Lindberg and others to commit offenses against the United States, including wire fraud, investment advisor fraud, and money laundering, as well as to the making of false statements in the business of insurance. Herwig is also awaiting sentencing.
The FBI Charlotte Field Office is investigating the case. The Securities and Exchange Commission’s Chicago Regional Office provided valuable assistance to the investigation.
Trial Attorney Lyndie Freeman of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Dan Ryan and Taylor Stout for the Western District of North Carolina are prosecuting the case.
Insurance Mogul Pleads Guilty to $2B Fraud and Money Laundering SchemeRead the Press Release
CHARLOTTE, N.C. – A Florida man pleaded guilty today to conspiracy to commit offenses against the United States and conspiracy to commit money laundering in connection with a scheme to defraud insurance regulators and policyholders through a web of companies based in North Carolina, Bermuda, Malta, and elsewhere, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.
According to court documents, from no later than 2016 through at least 2019, Greg Lindberg, 54, of Tampa, conspired with others to defraud various insurance companies, other third parties, and ultimately thousands of insurance policyholders. Lindberg and others conspired to deceive the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his companies, and improperly used insurance company funds for his personal benefit. Lindberg and his co-conspirators caused companies he controlled to invest more than $2 billion in loans and other securities with his own affiliated companies and laundered the proceeds of the scheme. As set forth in the indictment, Lindberg directed the scheme and personally benefitted from the fraud in part by “forgiving” more than $125 million in loans to himself from the insurance companies that he controlled.
To carry out the conspiracies, Lindberg and others engaged in circular transactions among Lindberg’s web of entities using insurance company funds and made and caused to be made various materially false and misleading statements and representations to and omitted material information from regulators, various ratings agencies, insurance companies, insurance policyholders, and others regarding these transactions.
As a result of Lindberg’s conduct, his insurance companies, third-party entities, and policyholders suffered substantial financial hardship, and some of his insurance companies have been placed in rehabilitation and liquidation.
“Greg Lindberg and his co-conspirators misused $2 billion of company funds in their international scheme to defraud corporate victims, regulators, and policyholders,” said Principal Deputy Assistant Attorney General Nicole Argentieri, head of the Justice Department’s Criminal Division. “Thousands of policyholders suffered substantial financial hardship as a result of Lindberg’s fraud scheme, which left multiple companies in or on the brink of liquidation. The Justice Department will not hesitate to hold corporate executives accountable when they threaten critical sectors of the economy, like the insurance industry, to enrich themselves.”
“Lindberg created a complex web of insurance companies, investment businesses, and other business entities and exploited them to engage in millions of dollars of circular transactions. Lindberg’s actions harmed thousands of policyholders, deceived regulators, and caused tremendous risk for the insurance industry,” said U.S. Attorney King. “Today’s guilty plea affirms our commitment to protecting the public from predatory financial schemes and bringing to justice those who betray public trust for personal gain.”
“Lindberg’s elaborate network of investments, insurance companies, and financial deals was designed to exploit the insurance system and drain millions from policyholders to enrich himself at the public’s expense,” said Special Agent in Charge Robert M. DeWitt of the FBI Charlotte Field Office. “The FBI remains steadfast in our commitment to root out financial fraud.”
Lindberg pleaded guilty to one count of conspiracy to commit offenses against the United States, including wire fraud, investment adviser fraud, and crimes in connection with insurance business, and one count of money laundering conspiracy. He faces a maximum penalty of five years in prison on the conspiracy to commit offenses against the United States count and 10 years in prison on the money laundering conspiracy count. In addition to pleading guilty to these charges, on May 15, following a retrial, Lindberg was convicted by a federal jury in Charlotte of conspiracy to commit honest services wire fraud and bribery concerning programs receiving federal funds for orchestrating a bribery scheme involving independent expenditure accounts and improper campaign contributions, aimed at bribing the elected North Carolina Commissioner of Insurance to influence the regulation of Lindberg’s insurance companies. A sentencing date has not yet been set. A federal district court judge will determine Lindberg’s sentence in both cases after considering the U.S. Sentencing Guidelines and other statutory factors in each case. Lindberg was remanded into the custody of the United States Marshals.
In December 2022, one of Lindberg’s top executives, Christopher Herwig, pleaded guilty in a related case to conspiring with Lindberg and others to commit offenses against the United States, including wire fraud, investment advisor fraud, and money laundering, as well as to the making of false statements in the business of insurance. Herwig is also awaiting sentencing.
The FBI Charlotte Field Office is investigating the case. The Securities and Exchange Commission’s Chicago Regional Office provided valuable assistance to the investigation.
Assistant U.S. Attorneys Dan Ryan and Taylor Stout for the Western District of North Carolina and Trial Attorney Lyndie Freeman of the Criminal Division’s Fraud Section are prosecuting the case.
Inmate Sentenced to Prison for Possessing Weapon at FCI McDowellRead the Press Release
BLUEFIELD, W.Va. – Tony Lashon Cleveland Jr., 27, an inmate at the Federal Correctional Institution (FCI) McDowell, was sentenced today to one year and three months in prison, to be followed by three years of supervised release, for possession of a weapon by an inmate at a federal prison.
According to court documents and statements made in court, on or about September 12, 2023, an FCI McDowell staff member conducted a pat-down search of Cleveland and found a handcrafted weapon commonly known as a “shank” in one of his socks. The shank was a piece of metal approximately five inches long with a sharpened point on one end and melted plastic on the other end to form a handle. Cleveland admitted to possessing the shank, and further admitted that it was designed and intended to be used as a weapon. Today’s sentence will run consecutively to his undischarged term of incarceration.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Federal Bureau of Prisons.
Senior United States District Judge David A. Faber imposed the sentence. Assistant United States Attorney Timothy D. Boggess prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 1:24-cr-62.
Hartford, Connecticut Man Sentenced to 35 Months in Northeast Kingdom Drug ConspiracyRead the Press Release
Burlington, Vermont – The United States Attorney’s Office for the District of Vermont stated that on November 8, 2024, Marvin Byrd, 29, of Hartford, Connecticut, was sentenced by Chief United States District Judge Christina Reiss to a term of 35 months’ imprisonment to be followed by a 3-year term of supervised release. Byrd previously pleaded guilty to conspiracy to distribute controlled substances, including fentanyl.
According to court records, Byrd agreed with multiple other individuals to acquire and ultimately distribute controlled substances in Orleans County in Vermont. Between at least March and August 2023, Byrd—who went by “TJ” while in Vermont—stayed with multiple local residents in Orleans County and used their residences as places to prepare and distribute controlled substances. The last residence Byrd occupied for that purpose was in Barton, Vermont. Investigators performed multiple controlled purchases involving Byrd and his coconspirators in that time, including one purchase of fentanyl directly from Byrd in April 2023.
United States Attorney Nikolas P. Kerest noted that this case was part of a sustained joint federal, state, county and local law enforcement investigation into drug-and-firearms-trafficking activities in Vermont’s Northeast Kingdom. He stated that the United States Attorney’s Office remains committed to its partnerships in the Kingdom and their long-term, in-depth investigations. U.S. Attorney Kerest commended the collaborative investigatory efforts of the Northeast Vermont Drug Task Force; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; Homeland Security Investigations; the Orleans County Sheriff’s Department; the Newport Police Department; the Air & Marine Operations division of Customs and Border Protection, and the Federal Bureau of Investigation.
The case was prosecuted by Assistant U.S. Attorney Matthew Lasher. Byrd was represented by Assistant Federal Public Defender Sara Puls and defense attorney Arthur Ruben, Esq.
Georgia Man Sentenced to Prison for Engaging in a $200,000 Check Fraud Scheme in UtahRead the Press Release
SALT LAKE CITY, Utah – Toddorius Goodwin, 34, of Atlanta, Georgia, was sentence today to 36 months’ imprisonment after he participated in a scheme to steal from banks and credit unions in Utah by cashing counterfeit checks.
In addition to Goodwin’s term of imprisonment, U.S. District Court Judge Tena Campbell sentenced Goodwin to five years’ supervised release and ordered him to pay over $214,000 in restitution to the banks and credit unions he stole from.
In August 2024, Goodwin pleaded guilty to conspiracy to commit bank fraud and aggravated identity fraud.
According to court documents and statements at Goodwin’s sentencing hearing, from April to October 2022, Goodwin and his associates traveled from Georgia to Utah several times to engage in a sophisticated check fraud scheme. They recruited impoverished individuals locally to take on the risk – as the runners entering the banks to physically cash the forged checks and potentially face arrest. The scheme was a proactive, well-planned, and team-orchestrated crime. Goodwin and his associates stole payroll checks from private mailboxes, altered the “payable to” names on the checks to the recruited individual’s name, and sent that individual into various banks to cash the forged checks in exchange for a small cut of the profit. Goodwin and his associated trained the recruits and coached them through an earpiece from a distance. Goodwin and his associates successfully cashed at least $214,179.51 worth of counterfeit checks in Utah within just a few months.
“Seeking justice for financial fraud is a priority for the U.S. Attorney’s Office,” said U.S. Attorney Trina A. Higgins of the District of Utah. “Mr. Goodwin’s behavior demonstrates a disrespect for the law and the community. By working with our law enforcement partners, it is our hope, through prosecution, we can deter these crimes from further occurring in our communities.”
“Exploiting the vulnerable to commit check fraud is not only a crime against the law but a grave injustice against humanity," said HSI Las Vegas Special Agent in Charge Chris Miller. "Those who prey on the impoverished to cash fraudulent checks, manipulating their desperation for personal gain, stands as a stark reminder of the darkest facets of greed. This sentencing is a reminder that Justice will find them, and their deceit will not go unpunished.”
The case was investigated by Homeland Security Investigations (HSI).
Special Assistant United States Attorney Sachi Jepson of the U.S. Attorney’s Office for the District of Utah is prosecuting the case.
Fresno County Man Indicted for Mailing Falsified Disability Insurance ClaimsRead the Press Release
FRESNO, Calif. — A federal grand jury returned an eight-count indictment against Leonel Hernandez, 51, of Parlier, charging him with mail fraud, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Hernandez was employed as a supervisor for a farm labor contractor in Sanger. Between March 2017 and October 2020, Hernandez submitted falsified disability insurance claims using identities of individuals known to him, including some who were already deceased and some who were farm laborers in Sanger or Fresno. Hernandez forged physician signatures on the disability insurance claim forms, falsely certifying that the physicians had examined the claimants and falsely certifying other medical information that was allegedly obtained through such examinations. Hernandez used the U.S. mail to submit at least 20 claims and caused losses exceeding $300,000.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Employment Development Department. Assistant U.S. Attorneys Chan Hee Chu and Joseph Barton are prosecuting the case.
If convicted, Hernandez faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Four defendants indicted on federal firearms chargesRead the Press Release
SAVANNAH, GA: Newly returned indictments in the Southern District of Georgia include felony charges for illegal firearms possession, while additional defendants have been sentenced to federal prison or await further proceedings after pleading guilty to federal gun charges.
“As we continue to see the proliferation of illegal guns converted to fully automatic fire, we commend our law enforcement partners for acting to contain this threat to our neighborhoods,” said Jill E. Steinberg, U.S. Attorney for the Southern District of Georgia. “Keeping firearms out of the hands of felons remains a priority for our office.”
The cases are prosecuted as part of Project Safe Neighborhoods in collaboration with federal, state, and local law enforcement agencies, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the FBI, to reduce violent crime with measures that include targeting convicted felons who illegally possess guns.
Those indicted in November include:
- Antonio Rodriquez Holmes III, 30, of Augusta, charged with Illegal Possession of a Machine Gun, Possession of a Firearm with an Obliterated Serial Number, and Possession of a Firearm by a Convicted Felon;
- Luke Bunyun Jr., 46, of Waynesboro, Ga., charged with Possession of a Firearm by a Convicted Felon; and,
- Lemar Neil Robinson, 35, of Savannah, charged with Possession of a Firearm by a Convicted Felon.
Also charged in a recently unsealed indictment was Charlie Sapp, 57, of Savannah, charged with Possession of a Firearm by a Convicted Felon.
All indicted defendants are considered innocent unless and until proven guilty.
Defendants recently adjudicated on federal firearms charges include:
- Richard Bruce Salyer Jr., 49, of Forsyth, Ga., was sentenced to 170 months in prison after pleading guilty to Possession of a Firearm by a Convicted Felon. Chatham County police officers found a pistol in Salyer’s waistband while investigating a report of a stolen vehicle in November 2023. Salyer has two prior convictions for illegally possessing firearms, and at the time of his arrest was an escapee from the Jefferson County, Ga., Correctional Institute.
- David Kreiss, 49, of Twin City, Ga., was sentenced to 88 months in prison after pleading guilty to Possession of Firearms by a Convicted Felon. Twin City police found Kreiss in possession of a rifle and four shotguns while investigating a domestic disturbance.
- Kavon Smalls, 29, of Savannah, was sentenced to 42 months in prison after pleading guilty to Possession of a Firearm by a Convicted Felon. Savannah police found a pistol after chasing Smalls when he ran away from a vehicle that crashed during an attempted traffic stop.
- Keyeon Demar Tykeim Smith, 23, of Augusta, was sentenced to 15 months in prison and fined $1,000 after pleading guilty to Receipt of a Firearm by a Person Under Indictment. Richmond County deputies found a pistol in Smith’s possession while serving an arrest warrant.
- Maleak J. Parrish, 24, of Savannah, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Savannah police fund a pistol in Parrish’s possession during a traffic stop.
- Willie Dunbar, 45, of Villa Rica, Ga., awaits sentencing after pleading guilty to Possession of a Machine Gun. During a January traffic stop, Wheeler County deputies found Dunbar in possession of a Polymer80 “ghost gun” fitted with a device converting it to automatic fire.
- Brodrick Kyle Merritt, 42, of Augusta, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon as an armed career criminal. Richmond County deputies found a pistol in Merritt’s possession during a traffic stop. Merritt was on probation on state charges when arrested, and faces a mandatory minimum sentence of 15 years in prison.
- Raquan Williams, 23, of Savannah, awaits sentencing after pleading guilty to False Statement During the Purchase of a Firearm. Williams attempted to purchase a shotgun from a Chatham County firearms dealer in June 2023, falsely claiming he was not under indictment at the time on state charges for armed robbery and aggravated assault.
- Stanley Hall, 22, of Savannah, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Savannah police found Hall in possession of a handgun while investigating a reported attempted vehicle break-in.
- Corinthian Lamar Colonel, 26, of Savannah, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Officers from the Savannah Police Department and the Georgia Department of Community Supervision found two firearms in Colonel’s residence during a September 2023 search.
- Eddie Robertson, 30, of Savannah, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Savannah police officers found Robertson in possession of a handgun after a December 2023 traffic stop and foot chase.
- Jacorey Rivers, 32, of Savannah, awaits sentencing after pleading guilty to Possession of a Machinegun, and Possession with Intent to Distribute Fentanyl. Rivers was on supervised release when he fled from a traffic stop and crashed. Officers found a Glock pistol in his possession that had been converted to automatic fire.
- Scottie Eugene Bryant, 48, of Grovetown, awaits sentencing after pleading guilty to Possession of a Firearm by a Convicted Felon. Grovetown police officers searched Bryant’s residence and seized multiple firearms in April 2023.
The cases are being prosecuted for the United States by the Southern District of Georgia U.S. Attorney’s Office.
Under federal law, it is illegal for an individual to possess a firearm if he or she falls into one of nine prohibited categories including being a felon; illegal alien; or unlawful user of a controlled substance. Further, it is unlawful to possess a firearm in furtherance of a drug trafficking offense or violent crime. It is also illegal to purchase – or even to attempt to purchase – firearms if the buyer is a prohibited person or illegally purchasing a firearm on behalf of others. Lying on ATF Form 4473, which is used to lawfully purchase a firearm, also is a federal offense.
For more information from the ATF on the lawful purchasing of firearms, please see: https://www.atf.gov/qa-category/atfw-form-4473
Four Nigerian Citizens Sentenced in Connection with International Romance ScamsRead the Press Release
Memphis, TN – Four Nigerian citizens residing in the United States and Canada have been sentenced to federal prison for their roles in a conspiracy that perpetuated a series of romance and investment scams against victims across the United States, including in Western Tennessee. All four defendants were convicted of conspiracy to commit money laundering as part of a scheme that used false identities and email accounts on internet dating sites to trick people into wiring or mailing money to shell companies and fictitious agents. Reagan Fondren, Acting U.S. Attorney for the Western District of Tennessee, announced the sentences today.
A federal grand jury in the Western District of Tennessee indicted the following individuals on June 29, 2023 with conspiracy to commit fraud and money laundering:
- Patrick Edah, 40, a Nigerian citizen residing in the Toronto, Canada area,
- Efe Egbowawa, 41, a Nigerian citizen residing in the Atlanta area,
- Igocha Mac-Okor, 40, a Nigerian citizen residing in the Atlanta area, and
- Kay Ozegbe, 44, a naturalized U.S. citizen residing in Atlanta.
Evidence presented in court revealed that from 2017 to approximately November 2021, members of the conspiracy assumed false identities on social media, gaming applications, dating websites, and other internet-based platforms in a scheme to trick victims into entering friendships and romantic relationships. These defendants then played various roles in exploiting those connections to convince individuals to send them money via wire, check, U.S. mail, and package delivery services.
As part of the conspiracy, romance scammers or “handlers” posed as potential friends or romantic partners and entered online relationships with unwitting victims. The relationships usually developed quickly through social media contact, text messages, email, and phone calls. Once the victim was clearly engaged in the scam, the scammer would begin to ask for emergency financial assistance. If the victim sent money, the scammer would ask for increasingly larger amounts of financial assistance. There were dozens of victims who each lost amounts ranging from several thousand dollars to several hundred thousand dollars. For example, one victim who resided in the Western District of Tennessee lost over $400,000 to this scheme over the course of several months.
Edah, Egbowawa, Mac-Okor, and Ozegbe functioned as “money mules” in the conspiracy. That is, they worked in conjunction with other members of the conspiracy to move the financial proceeds of the scams through several layers of bank accounts and shell companies to hide the sources of the money and make it difficult to trace.
U.S. District Court Judge Thomas L. Parker sentenced Egbowawa to 60 months in federal prison on April 17, 2024. Judge Parker later sentenced Ozegbe to 36 months in federal prison on September 23, 2024. On October 30, 2024, Edah and Mac-Okor were sentenced by Judge Parker to 30 months and 50 months, respectively, in federal prison.
“These individuals used deception and fraud to prey on the vulnerable causing unmeasurable emotional damage and significant financial losses,” said Special Agent in Charge Joe Carrico of the FBI - Nashville Field Office, Memphis Resident Agency. “The FBI will continue to work with our law enforcement partners to target these predators and bring them to justice.”
The case was investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service.
Acting United States Attorney Reagan Fondren thanked Assistant U.S. Attorneys Tony Arvin and Scott Smith, who prosecuted this case, as well as law enforcement partners for their role in the investigation.
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For more information, please contact the Media Relations Team at [email protected]. Follow the U.S. Attorney’s Office on Facebook or on X at @WDTNNews for office news and updates.
Fort Dodge Man Guilty of Possession with Intent to Distribute MethamphetamineRead the Press Release
Craig Carnell Pickens, age 41, from Fort Dodge, Iowa, pled guilty to possession with intent to distribute methamphetamine.
At the plea hearing, evidence showed, law enforcement stopped a vehicle for an equipment violation. Upon contacting the driver, law enforcement noticed an odor of marijuana coming from the vehicle and asked the driver and Pickens, who was the passenger, to exit the vehicle. Both occupants initially refused to exit. Pickens eventually produced a glass jar of marijuana and a marijuana blunt from a backpack that was at his feet and provided it to law enforcement through the sunroof of the vehicle. After numerous requests by law enforcement, Pickens eventually exited the vehicle and was arrested. A search of the vehicle discovered multiple bags of methamphetamine totaling approximately 180 grams. Methamphetamine was found in the backpack that was at Pickens’ feet as well as drug paraphernalia.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Pickens remains in custody of the United States Marshal pending sentencing. Pickens faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, and 5 years to life of supervised release following any imprisonment.
The case was investigated by the Garner Police Department and State of Iowa Department of Public Safety, Division of Narcotics Enforcement and is being prosecuted by Assistant United States Attorney Kraig R. Hamit.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 24-CR-3032.
Follow us on X @USAO_NDIA.
Former Used-Car Dealer Sentenced to Federal Prison for $3 Million Fraud SchemeRead the Press Release
GAINESVILLE, Ga. - Mitchell C. Simpson, who stole $3 million from companies that provided floor-plan financing to his used-car dealership, has been sentenced to federal prison for wire fraud.
“Simpson abused his position of trust and hurt the companies that enabled him to operate his business,” said U.S. Attorney Ryan K. Buchanan. “Our office, along with our law enforcement partners, is dedicated to investigating and prosecuting individuals who take advantage of others under false pretenses.”
“Simpson lied to the very people who were the lifeline to his small business,” said FBI Atlanta Senior Supervisory Resident Agent Mitchell Jackson. “We value our partnerships with local and state law enforcement to ensure these offenders are held accountable and the victims get justice.”
According to U.S. Attorney Buchanan, the charges and other information presented in court: From early 2012 through early 2019, Simpson operated Mitch Simpson Motors, a used car dealership in Cleveland, Georgia. Three floor-plan lenders, Dealer Financial Holdings LLC, Americash Advance, Inc., and Floorplan Xpress, LLC-OK, each provided Simpson with a revolving line of credit. Commonly known as floor-plan financing, this credit line allowed Simpson to purchase an inventory of vehicles to re-sell to customers. Each line of credit was governed by a written contract, also known as a floor-plan financing agreement. Simpson was required to abide by the terms and conditions of the agreements, and he was required to provide the floor-plan lenders with complete and truthful information concerning all matters related to the agreements.
When Simpson wanted to borrow money to purchase a vehicle to add to his dealership’s inventory, he would contact one of the floor-plan lenders and provide that lender with a description of the vehicle, including the vehicle identification number, and the amount of the loan requested. If the vehicle was subject to any other liens or security interests, Simpson was required to disclose that fact to the floor-plan lender. If Simpson led the lender to believe that the vehicle was not subject to any other liens or security interests, the lender would transfer the requested funds to Simpson’s custody and control. In return for the loan, the dealership would grant the floor-plan lender a purchase-money security interest in the vehicle. Simpson was also required to keep the vehicle free from all other liens and security interests until sold.
Simpson defrauded the floor-plan lenders by using a single vehicle as collateral for more than one floor-plan loan, which is a deceptive and illegal practice referred to in the used-car industry as double floor-planning and triple floor-planning – a practice expressly prohibited by the floor-plan financing agreements.
To hide the double and triple floor-planning, Simpson made false and misleading statements and omitted material facts in his communications with the floor-plan lenders. In addition, whenever Simpson sold a vehicle in which one of the floor-plan lenders held a security interest, Simpson was required to hold the proceeds from the sale of that vehicle in trust for the secured lender and promptly pay the secured lender all amounts due under the applicable floor-plan financing agreement.
But Simpson did not always pay the floor-plan lenders, as required. Instead, he engaged in a shell game with vehicle titles and did not always provide truthful information to lenders concerning the location of vehicles and concerning whether vehicles had been sold. This is an illegal practice referred to in the used-car industry as operating “out of trust,” which was expressly prohibited by the floor-plan financing agreements. Simpson’s fraudulent scheme resulted in a loss of more than $3 million to the floor-plan lenders.
Mitchell C. Simpson, 56, of Cornelia, Georgia, was sentenced by U.S. District Judge Steve C. Jones to three years, five months in prison to be followed by three years of supervised release. He was also ordered to pay restitution in the amount of $105,803.70. Simpson was convicted of wire fraud on July 2, 2024, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney John Russell Phillips and former Assistant U.S. Attorney David A. O’Neal prosecuted the case.
For further information, please contact [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Pain Center Receptionist Sentenced for Conspiracy to Distribute Oxycodone and MethadoneRead the Press Release
LONDON, Ky. – A Chicago woman, Judith Harskey, 56, was sentenced Tuesday to two years in prison, by U.S. District Judge Claria Horn Boom, for conspiracy to distribute oxycodone and methadone.
According to her plea agreement, beginning in 2019 through November 2022, Harskey conspired with others to distribute oxycodone and methadone, while working as a receptionist at the Midwest Physician Pain Center, a pain clinic in Chicago. During the conspiracy timeframe, numerous Perry County, Kentucky patients regularly traveled to the clinic; and without seeing a doctor, they paid Harskey a cash co-pay. She then filled out prescriptions that were previously signed by the absent owner/physician, for oxycodone, methadone, and other controlled substances. Harskey never possessed prescribing authority.
When law enforcement ultimately executed a search warrant, on November 18, 2022, they recovered 541 blank, pre-signed prescriptions from Harskey’s office, including 30 from her purse.
Under federal law, Harskey must serve 85 percent of her prison sentence. Upon her release from prison, he will be under the supervision of the U.S. Probation Office for 3 years.
Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky, and Jim Scott, Special Agent in Charge, DEA, Louisville Field Division, jointly announced the sentence.
The investigation was conducted by the DEA. Assistant U.S. Attorney Pearce Nesbitt is prosecuting the case on behalf of the United States.
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Former Missouri State Trooper Charged with Civil Rights CrimesRead the Press Release
CAPE GIRARDEAU – A former Missouri State Highway Patrol trooper was indicted Tuesday and accused of unlawfully searching women’s cell phones during traffic stops to find nude pictures.
David McKnight, 39, was indicted by a grand jury in U.S. District Court in Cape Girardeau with one count of destroying records in a federal investigation and nine counts of deprivation of rights under color of law, namely the right to be free from unreasonable search and seizure. The indictment says that between Sept. 1, 2023, and August 19, 2024, McKnight took cell phones from nine different women. McKnight then searched the phones and used his personal cell phone to photograph nude pictures that he found, the indictment says. He later deleted the images from his cell phone, it says.
McKnight stopped most of the women for traffic violations, the indictment says. He took their phones under the auspices of confirming that they had insurance coverage or verifying their identification, it says.
“These allegations are being taken very seriously, and we’d like to encourage anyone who believes they had a concerning interaction with McKnight to contact the FBI,” said U.S. Attorney Sayler A. Fleming.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Anyone with information is asked to contact the FBI by calling 1-800-CALL-FBI (800-225-5324) or via tips.fbi.gov.
The Missouri State Highway Patrol and the FBI investigated the case. Assistant U.S. Attorney Christine Krug is prosecuting the case.
Former Hinds County Sheriff Convicted for Soliciting Bribes and Providing Ammunition to a Convicted FelonRead the Press Release
Jackson, Miss. – On Friday, November 8, 2024, A federal jury convicted Marshand Crisler, a former Hinds County, Mississippi Sheriff, on both counts of an indictment charging him with soliciting and accepting $9,500 in bribes and for knowingly providing ammunition to a convicted felon. The trial lasted three days and the jury deliberated for approximately two hours.
According to court documents and evidence presented at trial, Crisler, 55, was appointed as Sheriff of Hinds County in August 2021. In September, October, and November 2021, Crisler solicited and accepted $9,500 in cash bribes in exchange for agreeing to provide information concerning criminal investigations to the convicted felon who paid the bribes, protect a jailed family member of that felon by moving that family member to a safer place within the Hinds County Jail, and award employment with the Hinds County Sheriff’s Office to the felon. Crisler also gave ammunition to that same convicted felon, knowing that the person was a convicted felon. It is against federal law for a public official to solicit or accept bribes. It is also against federal law to provide firearm ammunition to a known convicted felon.
Crisler is scheduled for sentencing on February 6, 2025, and faces a maximum penalty of 10 years in prison and a $250,000 fine for each offense. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
“This conviction should serve as notice to public officials in Mississippi who sell their office in exchange for bribes that the Department of Justice will work to hold them accountable,” said U.S. Attorney Todd W. Gee.
“The steadfast commitment of the FBI and the USAO in protecting the community has been exemplified with the conviction of Mr. Crisler,” said FBI Special Agent in Charge Robert A. Eikhoff. “Public officials accepting bribes and violating the public’s trust will continue to be aggressively investigated by the FBI.”
The case was investigated by the FBI.
Assistant U.S. Attorneys Herbert S. Carraway and Charles W. Kirkham prosecuted the case.
Former Comptroller of Athletic Club Sentenced in $1 Million Wire Fraud SchemeRead the Press Release
SAN JUAN, Puerto Rico – On November 7, 2024, United States District Court Chief Judge Raúl Arias Marxuach sentenced Zuleika Molina-Orozco, former comptroller of a not-for-profit sports and social club located at a resort in Humacao, Puerto Rico to 37 months in prison for a wire fraud scheme.
According to court documents, Molina-Orozco was the comptroller of Company A, a not-for-profit sports and social club, and had access and control over Company A’s bank account. Between October 2019 and March 2022, Molina-Orozco fraudulently made thirty-nine (39) unauthorized wire transfers from Company A’s bank account to three (3) of her credit cards and two (2) unauthorized wire transfers to another bank account, all totaling $1,100,283.36. The money the defendant obtained from the fraud scheme was used to pay the defendant’s personal credit card expenses, to purchase a 2020 Ford F-150 truck, and to transfer money to other individuals.
The defendant plead guilty to all eight counts on April 4, 2024. Molina-Orozco was ordered to pay restitution of $1,100,283.36, which corresponds to the money she obtained from the fraud scheme.
U.S. Attorney W. Stephen Muldrow of the District of Puerto Rico; and Rebecca C. González-Ramos, Special Agent in Charge of Homeland Security Investigations (HSI) made the announcement.
HSI investigated the case.
Assistant U.S. Attorney Scott H. Anderson prosecuted the case.
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Former Assistant Treasurer for Bridgestone Americas Arrested and Charged with a $15 Million Wire Fraud and Money Laundering SchemeRead the Press Release
NASHVILLE –A criminal complaint unsealed today charges Sajju Khatiwada, 43, of Franklin, Tennessee, with wire fraud and money laundering for conducting a scheme in which he submitted approximately $15 million in bogus reimbursement invoices to his employer, Bridgestone Americas, Inc., for payments to himself, announced Acting United States Attorney for the Middle District of Tennessee Thomas J. Jaworski.
According to the complaint, starting in 2016, Khatiwada was employed by Bridgestone in various positions, and he was working as Bridgestone’s Assistant Treasurer, Capital Planning and Funding, when he left the company in April 2024. Khatiwada was responsible for managing the relationships with banks that provided credit card processing services at each of the retail Bridgestone locations across the United States, acting as a liaison with bank representatives and initiating payments for bank fees and credit card processing fees.
In July 2020, Khatiwada created a phony vendor called Paymt-Tech, LLC and began submitting bogus invoices to Bridgestone for purported bank fees owed to Paymt-Tech. Each month from August 2020 to April 2024, Khatiwada sent an email from his Bridgestone email account to initiate a payment to Paymt-Tech, LLC for the fictitious monthly bank fees. The email would contain a bogus PDF invoice and would request payment of the invoice. Bridgestone approved payment of these invoices, believing they were for true bank fees for a legitimate vendor, Chase Paymentech.
In April 2024, Khatiwada left his employment at Bridgestone. Approximately two months later, Bridgestone Accounting Department personnel questioned the significant decrease in monthly bank fees being paid by Bridgestone. The subsequent investigation identified that between August 2020 and April 2024, Khatiwada had submitted 47 false invoices to Bridgestone for a total amount paid of $14,923,978.57, which the FBI traced back to Khatiwada.
If convicted, Khatiwada faces up to 20 years in federal prison on the wire fraud count and 10 years in federal prison on the money laundering count, and a fine of up to twice the value of the money laundered.
This case is being investigated by the Federal Bureau of Investigation, Nashville Field Office. Assistant U.S. Attorney Kathryn Booth is prosecuting the case.
A federal complaint is merely an allegation. The defendant is presumed innocent until proven guilty in a court of law.
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