Middle District of Florida

Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announces the return of an indictment charging Dwayne Thomas (21, Miami) with one count of credit card fraud and nine counts of identity theft. If convicted, he faces up to 10 years in federal prison for the credit card fraud count and up to 5 years’ imprisonment on each of the identity theft counts.

 

According to the indictment and information presented in court, Thomas was in possession of multiple credit card account numbers from Bank of America, Wells Fargo, and USAA. He also possessed the Social Security numbers of multiple former members of the military who were receiving healthcare through the Department of Veterans Affairs.

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.

 

This case was investigated by the Department of Veterans Affairs – Office of Inspector General Criminal Investigation Division, the United States Secret Service -Jacksonville Field Office, and the Florida Highway Patrol. It will be prosecuted by Assistant United States Attorney Kevin C. Frein.

Tampa, Florida– Acting United States Attorney W. Stephen Muldrow announces that a federal jury has found Wayne St. Aubyn Smith (50, Parrish), a/k/a Wayne Smith El-Bey, guilty of attempting to file a false lien against a federal judge. He faces a maximum penalty of 10 years in prison. A sentencing hearing has not yet been set.

 

Smith was indicted on March 14, 2017.

 

According to testimony and evidence presented at trial, in May 2015, Smith filed a lawsuit against several New Jersey officials in U.S. District Court in New Jersey, claiming that his constitutional rights had been violated. However, Smith failed to pay the fee required to file a lawsuit in federal court. United States District Judge Jose L. Linares was assigned to the case. Judge Linares issued an order instructing Smith on how to file for indigent status to waive his filing fee and dismissed his lawsuit without prejudice. After several rounds of filings involving Smith claiming that Judge Linares was violating his constitutional rights, Judge Linares denied Smith’s motion to proceed in forma pauperis. Smith and Judge Linares never met in person and had no relationship outside of the court case.

 

On December 21, 2016, Smith attempted to record three separate liens against several individuals at the Manatee County Clerk’s Office. One of the documents claimed that Judge Linares owed Smith $750,000 for violating his constitutional rights. Furthermore, Smith claimed an interest in all of Judge Linares’s real and personal property and his checking and savings accounts up to the amount of $750,000. The other two documents were liens totaling more than $1 million against the State of Florida and several New Jersey government officials, including Governor Chris Christie. The deputy clerks refused to record the documents.

 

This case was investigated by the Federal Bureau of Investigation and the Manatee County Sheriff’s Office. It is being prosecuted by Assistant United States Attorneys Shauna S. Hale and Michael Gordon.

Tampa, FL – Acting United States Attorney W. Stephen Muldrow announces a civil settlement with Alexander Olympus Zarris that resolves alleged violations of the False Claims Act (“FCA”) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) through reverse mortgage transactions engineered by Zarris at a Tarpon Springs condominium complex. Zarris will pay $475,000 to address the damage his conduct caused to a lending program overseen by the Department of Housing and Urban Development (HUD). This is the third civil settlement reached in this vital area of civil affirmative enforcement.

“HUD’s reverse mortgage lending program provides critical financial assistance to elderly borrowers in our district,” said Acting U.S. Attorney Muldrow. “This settlement reaffirms our commitment to civil mortgage fraud enforcement.”

“Reverse mortgage” loans provide elderly homeowners with access to the equity in their homes. In general, to be eligible for a reverse mortgage, the youngest homeowner must be at least 62 years old, live in the home as a primary residence, and have sufficient equity in the property.

Reverse mortgages insured by the federal government are called Home Equity Conversion Mortgages (“HECMs”) and are only available through a Federal Housing Administration (“FHA”) approved lender. FHA incentivizes reverse mortgage lending through mortgage insurance. Under FHA’s program, a loan becomes due and payable when the home is sold or vacant for more than 12 months, or upon the death of the homeowner, whichever comes first. The lender is repaid the amount of the loan, including the costs of servicing the loan, and any interest that accrues on lender expenses after a loan becomes due and payable. FHA will reimburse a lender that is unable to recoup the full amount of the loan.

“FHA-backed reverse mortgages are intended to allow elderly homeowners to age in place, not to serve as a vehicle to defraud the federal government,” said Dane Narode, HUD’s Associate General Counsel. “HUD and the Justice Department are working together to protect FHA’s insurance fund and those seniors who depend on reverse mortgages to ease their financial burden.”

From 2008 to 2011, the United States Attorney’s Office and HUD’s Office of Inspector General (“OIG”) investigated Zarris’s practices and concluded that he had improperly obtained the proceeds of federally insured reverse mortgages that, but for his conduct, would not have been underwritten by the lenders. Investigators learned that Zarris had engaged in sales transactions where he concealed the amounts that he had paid to the buyers to artificially inflate the appraised values of condominium complex units. He recruited elderly buyers (over the age of 62) to purchase units at inflated values and, as part of those sales transactions, required them to immediately apply for reverse mortgages in the maximum amount possible. Zarris, or others working with him, would then assist the elderly buyers in applying for reverse mortgages, including filling out their loan applications. The applications submitted on behalf of these buyers failed to disclose certain information that was material to the bank’s decision to underwrite the reverse mortgages. Through these practices, Zarris was able to create the appearance of equity so that the elderly buyers could obtain the reverse mortgages. The proceeds of the mortgages were then wired to a company owned by Zarris at the reverse mortgage closing.

 

These practices led the FHA program to pay insurance claims on a number of defaulted reverse mortgages, and caused hundreds of thousands of dollars in losses to the United States. The settlement amount is based upon Zarris’s ability to pay and represents a recovery that more than replenishes the amount of the government’s known losses.

“This settlement demonstrates HUD-OIG’s continuing efforts to hold individuals accountable who orchestrate schemes, which victimize America’s seniors through reverse mortgage programs. The United States Department of Housing and Urban Development, Office of Inspector General is deeply committed to collaborating with the Department of Justice to ensure unethical individuals do not manipulate government rules for personal gain,” said Nadine Gurley, Special Agent in Charge, U.S. Department of Housing and Urban Development Office of Inspector General.

The settlement announced today with Zarris follows two other major reverse mortgage claim resolutions reached by the Civil Division in the Middle District of Florida. In September 2015, Walter Investment Management Corporation agreed to pay $29.63 million to resolve allegations that its subsidiary, Reverse Mortgage Solutions, Inc. (“RMS”), had violated federal law by not disclosing its failure to meet mandatory deadlines for obtaining an appraisal of the property within 30 days of the loan becoming due and payable. As a result of failing to disclose its non-compliance, RMS received millions of dollars in debenture interest payments from the FHA that it was not entitled to receive. The investigation of RMS stemmed from the allegations in a whistleblower lawsuit filed by a former executive of RMS.

 

In May 2017, the Middle District of Florida announced an $89 million settlement with another reverse mortgage servicing company, Financial Freedom. That investigation arose from allegations made by a consultant for the estates of borrowers who took out reverse mortgages. Similar to RMS, the United States alleged that Financial Freedom had claimed payments for interest from the FHA that it was not entitled to receive because it had failed to meet various deadlines relating to appraisal of the property, submission of claims to HUD, and pursuit of foreclosure proceedings.

 

These investigations have been handled by Assistant U.S. Attorney Kyle S. Cohen and the U.S. Department of Housing and Urban Development’s Office of Inspector General.

The claims resolved by the settlements are allegations only and there has been no determination of liability.

Jacksonville, Florida – U.S. District Judge Brian J. Davis today sentenced Justin Laurence McKinley (49, Jacksonville) to 30 years in federal prison for communicating over the Internet with foreign nationals and soliciting the live molestation of children for online viewing. He was also ordered to serve a life term of supervision upon his release and to register as a sex offender.

 

According to court documents, in 2015, the FBI began an investigation into a website engaging in the exploitation and enticement of children to participate in sexual activity. This investigation also revealed that several individuals in a foreign country were engaged in the molestation of young children for the purpose of broadcasting live streaming “sex shows” to online viewers who paid a fee to watch. These individuals were arrested and McKinley was identified for paying to view these live streams.

Between January 2014 and December 2015, McKinley sent a total of 100 electronic fund transfers, totaling $31,415, to the individuals who molested children in the “sex shows.” On May 18, 2014, an individual engaged in a live video session with McKinley where the individual sexually abused an infant child as McKinley watched. During this live session, McKinley instructed the individual as to what he wanted the individual to do with the baby. Between 2014 and early 2016, McKinley engaged in many other similar online conversations with several foreign nationals.

 

On May 27, 2016, law enforcement officers executed a federal search warrant at McKinley’s residence and seized computer media containing the abuse videos that he purchased and directed. The child victims depicted in the streaming videos ranged in age from a newborn to an 8-year-old child. Forensic analyses of McKinley’s computer media revealed at least 600 videos and 6,500 images depicting the sexual abuse of children.

 

“Today’s sentence reflects the horrific nature of this crime,” said Acting U.S. Attorney Stephen Muldrow. “We will continue to prosecute those who prey upon and violate our most vulnerable victims, wherever they are found.”

 

"This case demonstrates the relentless effort by the FBI Jacksonville Division and our law enforcement partners to identify and stop those who prey on our most valuable asset - our children," said Special Agent in Charge Charles P. Spencer. "We work hand in hand everyday to protect these innocent victims and seek justice for the egregious acts committed against them. Today's 30-year sentence is just one example of our dedication to this work, and the many successes in our partnership."

 

This case was investigated by the Federal Bureau of Investigation, the Jacksonville Sheriff’s Office, and law enforcement authorities in several other countries. It was prosecuted by Assistant United States Attorney D. Rodney Brown.

 

It is another 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 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.

Orlando, Florida – Acting United States Attorney W. Stephen Muldrow announces the return of an indictment charging Jeremy Achey (43, Bethlehem, Pennsylvania) with conspiracy to distribute and distribution of controlled substance analogues. If convicted on all counts, he faces a maximum penalty of life in federal prison.

 

According to court documents, operating under the name “Etiking,” Achey distributed various synthetic substances over the Dark Net, an area of the Internet only accessible through the use of an encrypted browsing platform. In February 2017, a victim in Orange County, Florida died after ingesting tetrahydrofuran fentanyl, a synthetic substance similar to fentanyl, purchased from Achey on the Dark Net.

 

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.

 

This case was investigated by the Drug Enforcement Administration. It will be prosecuted by Assistant United States Attorney Nathan W. Hill.

 

Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington has sentenced Gregory Brown (28, Tampa) to 15 years in federal prison for possessing a firearm as a convicted felon. The Court also ordered him to forfeit a Smith & Wesson model SW40VE .40-caliber pistol and 14 rounds of ammunition traceable to the offense. Brown pleaded guilty on March 21, 2017.

 

According to court documents, on August 5, 2016, Tampa Police officers conducted a proactive check in the North Boulevard Homes in Tampa. As the officers arrived, they observed a male, later identified as Gregory Brown, start to run, reach into his waistband, and throw a loaded Smith and Wesson firearm behind a building. When interviewed, Brown admitted that the firearm belonged to him. Brown had previously been convicted of at least four felony offenses, including three drug trafficking offenses. As a result of these convictions, he is prohibited from possessing a firearm or ammunition under federal law.

 

This case was investigated by the Tampa Police Department and the Bureau of Alcohol, Tobacco, and Explosives. It was prosecuted by Assistant United States Attorney Rachel K. Jones.

 

This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl McCrary, Special Agent in Charge, ATF, are coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline Strategy on reducing violent crime in communities.

Ocala, Florida – Senior U.S. District Judge Wm. Terrell Hodges today sentenced David Wayne Willmott, Jr. (25, Inverness) to three years in federal prison for making threats to use an explosive device. He pleaded guilty on April 18, 2017. This federal sentence will be served consecutively to the six-year sentence imposed in 2016 by the State of Florida for two arsons and a hoax bomb threat in Hernando County.

 

According to court documents, on three separate dates (November 25, 2014, April 17, 2015, and April 23, 2015), Willmott sent e-mails containing bomb threats to various private and government facilities. The locations targeted in the e-mails included a nuclear power plant, an elementary school, a sheriff’s office, two courthouses, and two airports in central Florida. The investigation revealed that the threats had originated from specific computers at a public library in Citrus County, and that Willmott had been the person using the library computer at the time each of the threatening e-mails was sent.

 

This case was investigated by the Federal Bureau of Investigation, the Citrus County Sheriff’s Office, and the Polk County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.

Tampa, Florida – U.S. District Judge Mary S. Scriven has sentenced Paul Wheeler (34, Tampa) to four years in federal prison for wire fraud. The Court also ordered him to forfeit $848,136.04, which is traceable to proceeds of the offense, and to pay restitution to his victims.

 

According to testimony and court documents, Wheeler, a bookkeeper, embezzled from six different employers over the course of 15 years. He diverted more than $840,000 from his various employers to bank accounts under his control. He subverted the internal controls of the companies to ultimately direct payments to himself. He also registered a number of fictitious names to conceal the diversions. Wheeler used most of the money for online gambling.

 

This case was investigated by the Federal Bureau of Investigation and the Tampa Police Department. It was prosecuted by Assistant United States Attorney Thomas N. Palermo.

Fort Myers, FL – U.S. District Judge Sheri Polster Chappell has sentenced Eric David Erdmann (45, Punta Gorda) to 21 months in federal prison for failing to register as a sex offender. A federal jury found him guilty of the offense on March 23, 2017.

 

According to testimony and evidence presented at trial, Erdmann was required to register as a sex offender following a July 13, 2010, sex offense conviction in Oregon. He registered as a sex offender in Oregon but then absconded, traveling to Cambodia. In December 2010, Oregon authorities issued a warrant for his arrest.

 

Cambodian authorities subsequently arrested Erdmann in April 2016, after the U.S. State Department had revoked his passport. Erdmann agreed to depart Cambodia voluntarily and arrived in Florida later that month. He took up residence in Lee County and failed to register as a sex offender.

 

This case was investigated by the U.S. Marshals Service, U.S. Immigratoin and Customs Enforcment’s Homeland Security Investigations, the Florida Department of Law Enforcement, and the Lee County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Michael C. Baggé-Hernández.

 

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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.

Jacksonville, FL – Acting United States Attorney W. Stephen Muldrow announces the return of a two-count federal indictment charging Jose Calderon-Fuentes (62, Jacksonville) with stealing more than $538,000 in government property, specifically veterans’ disability benefits. The indictment notifies Calderon-Fuentes that the government intends to forfeit the alleged proceeds of the fraud.

 

The indictment alleges that from October 1997 through April 2013, Calderon-Fuentes stole veterans’ disability benefits by overstating the extent of his vision disability. Calderon-Fuentes claimed that he was unable to see any “better than hand motion or light perception,” when, in reality, he knew that statement was false. The indictment further alleges that he lied when interviewed by an investigator with the Department of Veterans Affairs - Office of Inspector General.

 

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.

 

This case was investigated by the United States Department of Veterans Affairs, Office of Inspector General. It is being prosecuted by Assistant United States Attorney Jason Mehta.

 

Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell has sentenced Derek Vest (52, Fort Myers) to 18 months in federal prison for introducing misbranded food into interstate commerce. As part of his sentence, the Court also entered a money judgment in the amount of $2.5 million, the proceeds obtained as a result of the offense.

 

Vest pleaded guilty on March 29, 2017.

 

According to court documents, from at least April 16, 2013, through November 28, 2014, Vest was the President of Gentech Pharmaceutical, a dietary supplement sales, marketing, and distribution facility located in Fort Myers. In that capacity, he controlled and oversaw the manufacture, marketing, and sale of purported dietary supplements including, AddTabz, PhenTabz, and PhenTabz-Teen. Vest’s company marketed and sold these dietary supplements over the Internet, in stores, and at various kiosks.

 

AddTabz were marketed as mental focus and performance tablets. They were advertised as a safe alternative to Adderall, and as a designer non-prescription pharmacological alternative that claimed to improve memory, learning, and overall brain function instantly. PhenTabz and PhenTabz-Teen were advertised as weight loss tablets. All of these products were sold throughout the United States and overseas. In addition, Vest authorized the use of amphetamine derivative DMAA (1,3-Dimethylamine) in the manufacture of various Gentech Pharmaceutical products including, AddTabz, PhenTabz, and PhenTabz-Teen. However, he did not disclose the presence of DMAA on the product labeling for the tablets.

 

During this time period, Vest’s company sold more than 2 million tablets that had been misbranded and shipped to consumers.

 

This case was investigated by the Food and Drug Administration. It was prosecuted by Assistant United States Attorney Yolande G. Viacava.

Jacksonville, Florida – U.S. District Judge Brian J. Davis has sentenced Travis Christopher Ellis (27, Keystone Heights) to five years in federal prison for transporting, receiving, and possessing child pornography. The Court also ordered him to pay $2,500 in restitution to the victims of his crimes and to serve a 20-year term of supervision following his release from prison.

According to court documents, on May 5, 2016, agents from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations served a search warrant at Ellis’s residence. During an interview with agents, he admitted to using file-sharing programs to download and share child pornography. He also admitted to using particular search terms to find child pornography and to saving his collection on external hard drives.

 

"This sentencing should serve as a warning that peer-to-peer networks do not shield criminals from prosecution," said HSI Tampa acting Special Agent in Charge Ivan J. Arvelo. "HSI special agents and our partners at the Clay County Sheriff’s Office have ensured this predator is held accountable for his continued victimization of the most vulnerable members of our society.”

 

This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with assistance from the Clay County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Kelly S. Karase.

 

It 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 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.

Jacksonville, Florida – U.S. District Judge Marcia Morales Howard today sentenced Sheldon Lamont Jackson (43, Jacksonville) to 15 years in federal prison for unlawfully possessing a firearm after having been convicted of a felony offense.

 

He pleaded guilty on February 23, 2017.

 

According to the court documents, during a traffic stop, a deputy with the Jacksonville Sheriff’s Office discovered a loaded, semi-automatic handgun hidden under the driver’s seat of the car that Jackson was driving. During the investigation that followed, Jackson unsuccessfully attempted to dissuade a witness from providing information to law enforcement. Prior to his arrest in this case, Jackson had multiple prior felony convictions, including convictions for selling cocaine and resisting arrest with violence, and was therefore prohibited from possessing a firearm or ammunition under federal law.

 

This case was investigated by the Jacksonville Sheriff’s Office, the Florida Department of Law Enforcement, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Michael J. Coolican.

 

This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.

A Florida businessman was sentenced today to 57 months in prison in U.S. District Court for the Middle District of Florida for conspiring to commit tax and bank fraud, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

According to documents filed with the court, Casey Padula, 48, of Port Charlotte, was the sole shareholder of Demandblox Inc., a marketing and information technology business. Padula conspired with others to move funds for his benefit from Demandblox to offshore accounts in Belize and disguised these transfers as business expenses in Demandblox’s corporate records. Padula created two offshore companies in Belize: Intellectual Property Partners Inc. (IPPI) and Latin American Labor Outsourcing Inc. (LALO). He opened and controlled bank accounts in the names of these entities at Heritage International Bank & Trust Limited (Heritage Bank), a financial institution located in Belize. From 2012 through 2013, Padula caused periodic payments to be sent from Demandblox to his accounts at Heritage Bank and deposited approximately $2,490,688. Padula used the funds to pay for personal expenses and purchase significant personal assets. However, he falsely recorded these payments in Demandblox’s corporate books as intellectual property rights or royalty fees and deducted them as business expenses on Demandblox’s 2012 and 2013 corporate tax returns. As a result of these false deductions, Padula caused a tax loss of more than $728,000.

 

Padula also conspired with investment advisors Joshua VanDyk and Eric St-Cyr at Clover Asset Management (CAM), a Cayman Islands investment firm, to open and fund an investment account that he would control, but that would not be in his name. Heritage Bank had an account at CAM in its name and its clients could get a subaccount through Heritage Bank that would not be in the client’s name but rather would be a numbered account. Padula transferred $1,000,080 from the IPPI bank account at Heritage Bank in Belize to CAM to fund a numbered account that concealed his financial interest in it. Padula failed to disclose this account to the U.S. Department of Treasury and the Internal Revenue Service (IRS) despite being required to do so under the law.

 

In addition to the tax fraud, Padula also conspired with others to commit bank fraud. Padula had a mortgage on his Port Charlotte, Florida home of approximately $1.5 million with Bank of America (BoA). In 2012, he sent a letter to the bank stating that he could no longer repay his loan. At the same time, Padula provided Robert Robinson III, 43, who acted as a nominee buyer, with more than $625,000 from his IPPI bank account in Belize to fund a short sale of Padula’s home. Padula and Robinson signed a contract, which falsely represented that the property was sold through an “arms-length transaction,” and agreed that Padula would not be permitted to remain in the property after the sale. Padula in fact never moved from his home and less than two months after the closing, Robinson conveyed it back to Padula by transferring ownership to one of Padula’s Belizean entities for $1. Robinson was also sentenced today to five years of probation for signing a false Form HUD-1 in connection with his role in the scheme.

 

“Casey Padula used secret numbered bank accounts, foreign shell companies and phony deductions to hide millions and evade U.S. taxes,” said Acting Deputy Assistant Attorney General Goldberg. “His 57 month sentence today makes clear that there is no place safe in the world for tax cheats to hide their money and feel secure that the Department of Justice and the IRS will not uncover their scheme and hold them fully accountable.”

 

“As Mr. Padula has learned, using shell companies and offshore accounts is not tax planning; it’s tax fraud,” said Chief Don Fort of IRS Criminal Investigation (CI). “The use of sophisticated international financial transactions does not prevent IRS CI from following the trail of money back to the person breaking the law. In conjunction with our law enforcement partners, we will continue our ongoing efforts to pursue individuals who use these offshore schemes to circumvent the law.”

 

In addition to the term of prison imposed by U.S. District Court Judge Sherri Polster Chappell, Padula was ordered to serve three years of supervised release and to pay a fine of $100,000 and to pay restitution of $728,609 to the IRS and to BoA in the amount of $739,459.90. He was remanded into custody.

 

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS CI, who conducted the investigation, and Assistant Chiefs Todd Ellinwood and Caryn Finley of the Tax Division, who prosecuted this case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office of the Middle District of Florida for its assistance.

 

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

Fort Myers, FL – A Florida businessman was sentenced today to 57 months in prison in U.S. District Court for the Middle District of Florida for conspiring to commit tax and bank fraud, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

According to documents filed with the court, Casey Padula, 48, of Port Charlotte, was the sole shareholder of Demandblox Inc., a marketing and information technology business. Padula conspired with others to move funds for his benefit from Demandblox to offshore accounts in Belize and disguised these transfers as business expenses in Demandblox’s corporate records. Padula created two offshore companies in Belize: Intellectual Property Partners Inc. (IPPI) and Latin American Labor Outsourcing Inc. (LALO). He opened and controlled bank accounts in the names of these entities at Heritage International Bank & Trust Limited (Heritage Bank), a financial institution located in Belize. From 2012 through 2013, Padula caused periodic payments to be sent from Demandblox to his accounts at Heritage Bank and deposited approximately $2,490,688. Padula used the funds to pay for personal expenses and purchase significant personal assets. However, he falsely recorded these payments in Demandblox’s corporate books as intellectual property rights or royalty fees and deducted them as business expenses on Demandblox’s 2012 and 2013 corporate tax returns. As a result of these false deductions, Padula caused a tax loss of more than $728,000.

 

Padula also conspired with investment advisors Joshua VanDyk and Eric St-Cyr at Clover Asset Management (CAM), a Cayman Islands investment firm, to open and fund an investment account that he would control, but that would not be in his name. Heritage Bank had an account at CAM in its name and its clients could get a subaccount through Heritage Bank that would not be in the client’s name but rather would be a numbered account. Padula transferred $1,000,080 from the IPPI bank account at Heritage Bank in Belize to CAM to fund a numbered account that concealed his financial interest in it. Padula failed to disclose this account to the U.S. Department of Treasury and the Internal Revenue Service (IRS) despite being required to do so under the law.

 

In addition to the tax fraud, Padula also conspired with others to commit bank fraud. Padula had a mortgage on his Port Charlotte, Florida home of approximately $1.5 million with Bank of America (BoA). In 2012, he sent a letter to the bank stating that he could no longer repay his loan. At the same time, Padula provided Robert Robinson III, 43, who acted as a nominee buyer, with more than $625,000 from his IPPI bank account in Belize to fund a short sale of Padula’s home. Padula and Robinson signed a contract, which falsely represented that the property was sold through an “arms-length transaction,” and agreed that Padula would not be permitted to remain in the property after the sale. Padula in fact never moved from his home and less than two months after the closing, Robinson conveyed it back to Padula by transferring ownership to one of Padula’s Belizean entities for $1. Robinson was also sentenced today to five years of probation for signing a false Form HUD-1 in connection with his role in the scheme.

 

“Casey Padula used secret numbered bank accounts, foreign shell companies and phony deductions to hide millions and evade U.S. taxes,” said Acting Deputy Assistant Attorney General Goldberg. “His 57 month sentence today makes clear that there is no place safe in the world for tax cheats to hide their money and feel secure that the Department of Justice and the IRS will not uncover their scheme and hold them fully accountable.”

 

“As Mr. Padula has learned, using shell companies and offshore accounts is not tax planning; it’s tax fraud,” said Chief Don Fort of IRS Criminal Investigation (CI). “The use of sophisticated international financial transactions does not prevent IRS CI from following the trail of money back to the person breaking the law. In conjunction with our law enforcement partners, we will continue our ongoing efforts to pursue individuals who use these offshore schemes to circumvent the law.”

 

In addition to the term of prison imposed by U.S. District Court Judge Sherri Polster Chappell, Padula was ordered to serve three years of supervised release and to pay a fine of $100,000 and to pay restitution of $728,609 to the IRS and to BoA in the amount of $739,459.90. He was remanded into custody.

 

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS CI, who conducted the investigation, and Assistant Chiefs Todd Ellinwood and Caryn Finley of the Tax Division, who prosecuted this case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office of the Middle District of Florida for its assistance.

 

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

Jacksonville, Florida – U.S. District Judge Marcia Morales Howard today sentenced Keith Ford (40, Gainesville) to 15 years in federal prison for possessing a firearm as a convicted felon. He pleaded guilty on August 30, 2016.

 

According to court documents, on May 11, 2016, Ford and a co-defendant went to a warehouse parking lot in Jacksonville where they expected to help drug dealers offload a large shipment of marijuana. Ford and his co-defendant had previously agreed to bring firearms to the location and provide protection for the drug dealers. Once they arrived at the location, the dealers, who were actually undercover law enforcement agents, asked Ford and his co-defendant to put their guns in the trunk of a car. After the two firearms were secured, the defendants were arrested.

 

At the time of the offense, Ford was a convicted felon and therefore is prohibited from possessing a firearm or ammunition under federal law. Due to his three prior convictions for selling cocaine, he qualified for an increased penalty as an Armed Career Criminal.

 

This case was investigated by the Jacksonville Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Frank Talbot.

 

This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl McCrary, Special Agent in Charge, ATF, are coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline Strategy on reducing violent crime in communities.

Ocala, Florida – Acting United States Attorney W. Stephen Muldrow announces that Connie Moorman Willis (52, Morriston) today pleaded guilty to one count of mail fraud, one count of aggravated identity theft, two counts of embezzlement by a bank employee, and one count of access device (credit card) fraud. She faces a maximum penalty of 20 years in prison for the mail fraud count, up to of 30 years’ imprisonment for each embezzlement count, up to 10 years’ imprisonment for the credit card fraud count, and 2 consecutive years in federal prison for the aggravated identity theft count. A sentencing date has not yet been set.

 

According to the plea agreement, Willis worked at SunTrust Bank as a business banker overseeing valuable business accounts, with wide-ranging authority over them. Beginning in February 2013, she stole the identities of two customers by using their personal information to create a fraudulent bank account. She had all written correspondence for this account mailed to her address in order to keep the customers from learning of her activities. Willis subsequently transferred large amounts of money from other customers, without their permission, into this fraudulent account. She then withdrew the stolen funds or used them to pay her own expenses.

 

Willis’s victims included customers who were elderly or in poor health. In one instance, investigators learned that Willis had opened two fraudulent credit card accounts and had taken out a $140,000 mortgage in the name of an elderly relative. She used stolen funds to pay off the mortgage and to make payments on the credit cards.

Once Willis’s fraud had been discovered, she texted one customer and admitted that she had “made a big mistake.” She added that she wanted to “make it right” by repaying the customer. In total, Willis stole $591,545.33.

 

This case was investigated by the United States Postal Inspection Service and the City of Ocala Police Department. It is being prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.

Tampa, Florida – U.S. District Judge Steven D. Merryday has found Duane Crithfield (70, Asheville, North Carolina) and Stephen P. Donaldson, Sr. (71, Tampa) guilty of one count of conspiracy to defraud the United States and two counts of willfully aiding the submission of a false and fraudulent income tax return. Crithfield’s and Donaldson’s sentencing hearings are scheduled for September 27 and 28, 2017, respectively. Each faces a maximum penalty of 11 years in federal prison.

 

Crithfield and Donaldson were initially indicted on May 2, 2013, for conspiracy to defraud the United States. A superseding indictment was returned on July 25, 2013, adding two substantive charges.

 

As alleged in the superseding indictment, from 2001 to at least March 2008, Crithfield, Donaldson, and others, through Foster & Dunhill, Offshore Trust Service, Fidelity Insurance Company (FIC), and Citadel Insurance Company (CIC) promoted, marketed, and implemented a fraudulent offshore tax strategy known as the Business Protection Plan (BPP). The fraudulent BPP strategy enabled the defendants' affluent clients to claim business expense deductions based on sham “BPP insurance premium” payments made to offshore entities FIC and CIC in amounts intended primarily to substantially reduce the clients' taxable income for a particular year.

 

According to the trial judge’s Order and evidence admitted during the bench trial, Crithfield and Donaldson conspired together, and with others, to create and promote the offshore BPP tax shelter strategy. The strategy, however, was nothing more than self-insurance and was devoid of any economic substance and the so‑called “BPP insurance premiums” were not based on actual business risks. After obtaining the benefit of a tax deduction on the client's corporate income tax return, the client would later receive approximately 83‑85% of the premium back. Thus, the premium amounts were not ordinary and necessary business expenses that were entitled to deductions under Section 162(a) of the Internal Revenue Code. Rather, they were merely sham expenditures and not properly deductible for U.S. income tax purposes on the respective businesses’ tax returns.

 

This case was investigated by the Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorneys Jay G. Trezevant and Megan K. Kistler.

WASHINGTON – Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced today the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts, including over 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving over $1.3 billion in false billings. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS has initiated suspension against 295 providers, including doctors, nurses, and pharmacists.

 

Attorney General Sessions and Secretary Price were joined in the announcement by Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting Director Andrew McCabe of the FBI, Acting Administrator Chuck Rosenberg of the Drug Enforcement Administration (DEA), Inspector General Daniel Levinson of the HHS Office of Inspector General (OIG), Chief Don Fort of IRS Criminal Investigation, Administrator Seema Verma of the Centers for Medicare and Medicaid Services (CMS), and Deputy Director Kelly P. Mayo of the Defense Criminal Investigative Service (DCIS).

 

Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.

 

The charges announced today aggressively target schemes billing Medicare, Medicaid, and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics. According to the Centers for Disease Control, approximately 91 Americans die every day of an opioid related overdose.

 

“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” said Attorney General Sessions. “Amazingly, some have made their practices into multimillion dollar criminal enterprises. They seem oblivious to the disastrous consequences of their greed. Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start. The consequences are real: emergency rooms, jail cells, futures lost, and graveyards. While today is a historic day, the Department's work is not finished. In fact, it is just beginning. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

 

“Protecting our nation’s health care programs is a top priority of our Office,” said Acting U.S. Attorney Muldrow. “The coordinated actions today demonstrate our resolve to prosecute those who commit fraud against our health care programs. We will continue in our pursuit against those who violate the law to enrich themselves by defrauding our public systems and its customers by stealing from federal health care programs and the American taxpayers.”

 

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, and TRICARE for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.

 

The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

 

The cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois, and Middle District of Florida; and agents from the FBI, HHS-OIG, Drug Enforcement Administration, DCIS, and state Medicaid Fraud Control Units.

 

A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent unless and until proven guilty.

 

Additional documents related to this announcement will shortly be available here: https://www.justice.gov/opa/documents-and-resources-july-13-2017.

 

In the Middle District of Florida, 10 individuals were charged with participating in a variety of schemes.

 

Middle District of Florida Case Highlights

 

Richard Martin (56, Orlando), a former sales representative for Advanced BioHealing, Inc. (ABH), has been charged with conspiracy to violate the anti-kickback statute and to commit mail and health care fraud. According to court documents, ABH was a biopharmaceutical company that developed and commercialized bioengineered tissue products and regenerative medicine therapies. In 2006, ABH acquired the rights to Dermagraft, a bioengineered skin substitute approved for the treatment of diabetic foot ulcers, and began selling the product to treating physicians. The indictment alleges that in late 2010, Martin and others conspired to bill the Medicare Part B program as if an entire Dermagraft (38 square centimeters) was used to treat each Medicare beneficiary. In truth, Martin and others routinely divided or split the skin substitute into multiple sections for applications on multiple Medicare beneficiaries, resulting in double billing. The indictment further alleges that Martin violated the anti-kickback statute by offering and providing free office medical supplies, free Dermagraft samples, multiple meals and other consumables, and uncompensated medical office procedures and services.

 

Larry B. Howard (53, Oviedo), a pharmacist and the owner and operator of Fertility Pharmacy d/b/a TRICARE Wellness, has been charged with one count of conspiracy to pay and receive illegal kickbacks, two counts of paying illegal kickbacks, and two counts of money laundering. Nicole R. Bramwell (51, Apopka), a physician, and Raymond L. Stone (57, Orlando), a patient recruiter, have each been charged with one count of conspiracy to pay and receive illegal kickbacks and one count of receiving illegal kickbacks. These charges stem from their alleged roles in a $4.3 million compounding pharmacy scheme that impacted the TRICARE program.

 

Michael J. Anderson (64, formerly of Windermere), a managing member and operator of DMA Logistics LLC, has been charged with one count of conspiracy to commit health care fraud and wire fraud, and two counts of money laundering. These charges stem from Anderson’s alleged role in a $5.7 million compounding pharmacy fraud scheme that impacted the TRICARE program.

 

Podiatrist Michael Rotstein (Ocala, 55) has pleaded guilty to one count of healthcare fraud. He faces a maximum penalty of 10 years’ imprisonment and must pay mandatory restitution of approximately $1.5 million. A sentencing date has not yet been set. According to the plea agreement, when billing the Medicare and TRICARE programs Rotstein claimed that nearly half of his procedures were for the removal of skin and muscle, placing him in the top one-percent of billers nationwide for this procedure. In reality, Rotstein did not actually perform these procedures. Rather, the majority of the times that he billed for these procedures, he was actually performing routine foot care, including the clipping of toenails, which is not a reimbursable service under the Medicare or TRICARE program. Since the services performed were not reimbursable, Rotstein devised a scheme to submit claims to Medicare and TRICARE that included using a false diagnosis code and false billing code. As a result of the scheme, Rotstein received $1,504,952.67 in healthcare reimbursements to which he was not entitled.

 

Jack Gehring (68, Margate) has been charged with trafficking prescription opioids, primarily oxycodone, from late 2010 through 2017. According to the criminal complaint, in addition to acquiring pills himself, Gehring conspired with family members, including his brother, Patrick Gehring (59, Davie), his daughter, Tina Gehring (45, Coral Springs), and several others, including Sean Grelecki (45, Deltona). The conspirators fraudulently acquired and filled prescriptions for thousands of oxycodone pills, and other drugs, in order to illegally distribute them at black market prices of $20 per pill or more. Gehring paid for the health visits and the pharmacy costs for the oxycodone for those who fraudulently acquired pills for him. He also paid the prescription filler $600 to $900 per month, depending on the number of pills acquired. Jack Gehring then distributed thousands of oxycodone pills in Florida, Massachusetts, Connecticut, and elsewhere.

 

The Middle District of Florida cases are being handled by Assistant U.S. Attorneys Jay Trezevant, Thomas Palermo, Jason Mehta, Jackson Boggs, and DOJ Senior Trial Attorney Christopher Hunter of the Fraud Section.

 

This operation also highlights the great work being done by the Department of Justice’s Civil Division. In the past fiscal year, the Department of Justice, including the Civil Division, has collectively won or negotiated over $2.5 billion in judgments and settlements related to matters alleging health care fraud.

Orlando, Florida – Senior U.S. District Judge Gregory A. Presnell has sentenced Vladimir Jean Pierre (31, Orlando) to seven years in federal prison for theft of government property, aggravated identity theft, and attempted possession with the intent to distribute a controlled substance.

 

He pleaded guilty on February 16, 2017.

 

According to court documents, in April 2015, Pierre received a package from China that contained approximately one kilogram of Ethylone. Ethylone is a positional isomer of Butylone, which is a DEA Schedule I controlled substance. Pierre was questioned shortly after he picked up the package from an Orlando Post Office. According to Pierre, he was aware that the package would contain a controlled substance, but thought that it would contain either cocaine or heroin.

 

In addition, from February 2012 through May 2012, Pierre deposited a total of 43 separate Internal Revenue Service (IRS) tax refund checks, totaling over $250,000, into two different bank accounts. IRS agents obtained video footage from the bank showing Pierre depositing a tax refund check for “S.D.” into his own bank account. The agents later identified S.D. and learned that the individual did not know Pierre and had not given him permission to deposit the refund check. However, S.D. did acknowledge having filed a tax return but never receiving the expected check.

 

This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Postal Inspection Service, and the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorneys Shawn P. Napier and Tiffany Cummins.

Orlando, Florida – Acting United States Attorney W. Stephen Muldrow announces the return of an indictment charging Meinrad Kopp (55), a German citizen and resident of Switzerland, with attempting to entice a minor to engage in sexual activity, traveling into the United States for the purpose of engaging in illicit sexual conduct, and transportation of child pornography. If convicted on all counts, he faces a maximum term of life in federal prison. The indictment also notifies Kopp that the United States intends to forfeit an iPhone, a laptop computer, and a camera, which are alleged to have been used in furtherance of the offenses.

 

According to court documents, from on or about April 26, 2017, to on or about June 16, 2017, Kopp engaged in communications, via the deep/dark web, with an agent acting in an undercover capacity as the father of a 13-year-old child, about engaging the child in a range of sexual activities, including sadomasochistic conduct. Kopp disclosed his intent to humiliate the child by treating her like a dog and causing her pain by using a certain instrument that he intended to bring with him. According to Kopp, he had previously given a hard beating to an 11-year-old child by using a leather belt.

 

Kopp traveled to Orlando, Florida, on June 16, 2017, and was arrested by agents working with Homeland Security Investigations. Inside his luggage, Kopp had weights, clamps, rope, tape, a bottle brush, and a flashlight that he intended to use with the minor. During an interview with law enforcement, Kopp admitted that he had traveled to Orlando for the purpose of engaging a minor in sexual activity.

 

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.

 

This case was investigated by the U.S. Custom and Immigration Enforcement’s Homeland Security Investigations and the Brevard County Sheriff’s Office Child Exploitation Task Force. It will be prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.

 

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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.

Tampa, FL – U.S. District Judge Mary S. Scriven today sentenced the former Chief Financial Officer for Hillsborough Achievement and Resource Centers (HARC), Frank Pannullo (71, Land O’ Lakes), to two years in federal prison for his role in a conspiracy to make false statements to the Social Security Administration (“SSA”). The Court also ordered him to pay $617,435.19 in restitution, jointly and severally with other related defendants, and to serve a three-year term of supervision following his release from prison.

 

According to court documents and trial testimony in a related case, the HARC, formerly the Hillsborough Association for Retarded Citizens, was established in 1953 to positively impact the future for all people living with developmental disabilities, such as Alzheimer’s disease and Down syndrome. HARC opened and operated group homes that served its target client population. HARC also spearheaded various community programs for its clients focused on inclusion activities for youth, adults, and seniors with disabilities.

 

Many of the HARC clients received SSA benefits due to various developmental disabilities. For certain HARC clients who lacked the capacity to manage their own SSA benefits, SSA approved one or more HARC officials to act as a “Representative Payee” to receive a particular client’s benefits and to use them exclusively for that client’s benefit. As a Representative Payee, the HARC official was required to complete and submit to the SSA a “Representative Payee Report” that included certain information about each HARC client’s living situation and the financial benefits received and expended on behalf of that client.

 

Pannullo began working at HARC in 1998 as HARC’s Comptroller and was thereafter elevated to Chief Financial Officer (CFO). While working in that capacity, Pannullo, HARC Chief Executive Officer (CEO) Richard Lilliston, and others, orchestrated a scheme whereby HARC client funds, purportedly saved solely for HARC’s developmentally disabled clients’ needs and use in a HARC bank account dubbed the “Endowment Account,” had been and were being wrongfully diverted from the clients to the HARC operating account for other purposes.

 

In an effort to conceal that HARC client funds were being wrongfully diverted from the developmentally disabled clients and to make it appear as if HARC’s Endowment Account had been properly established and maintained, CEO Lilliston, in November 2009, directed Pannullo and HARC’s Comptroller to secure signatures from the developmentally disabled HARC clients on a document backdated to 2007, titled “Pooled Trust Joinder Agreement.” Pannullo and HARC’s Comptroller did as instructed, knowing that the HARC clients who signed the Pooled Trust Joinder Agreement document did not have the capacity necessary to understand the import of the document. Notwithstanding, CEO Lilliston, CFO Pannullo, and other HARC employees signed the backdated agreements.

 

In June 2013, the U.S. Attorney’s Office filed a Verified Complaint for Forfeiture In Rem in a related case (Case No. 8:13-cv-1601-T-17TBM), seeking the forfeiture of $87,000 held in a Synovus Bank account. That complaint raised like allegations that HARC clients’ SSA benefits had been wrongfully diverted from the clients and used by HARC for other purposes and was supported by facts contained in the sworn affidavit of a special agent with the U.S. Department of Health and Human Services - Office of Inspector General. On September 30, 2013, the district court entered a Default Judgment of Forfeiture in which the court ordered the forfeiture of the $87,000 to the United States.

 

This case was investigated by the Social Security Administration - Office of the Inspector General, the U.S. Department of Health and Human Services - Office of Inspector General, and the Florida Department of Law Enforcement, along with the State of Florida’s Department of Financial Services - Office of Fiscal Integrity. It was prosecuted by Assistant United States Attorney Jay G. Trezevant.

 

Tampa, Florida – U.S. District Judge Richard A. Lazzara has sentenced Aaron Stanley (48, Brandon) to two years and six months in federal prison for conspiracy and aggravated identity theft. The Court also ordered him to make restitution to the Internal Revenue Service in the amount of $203,887.10, which constitutes the proceeds of the offenses.

 

Stanley pleaded guilty on March 9, 2017.

 

According to court documents, in 2011, Stanley and others used the proceeds of stolen identity refund fraud to purchase three vehicles from Rodriguez Auto Wholesale in Tampa. Stanley and his conspirators used debit cards loaded with fraudulently obtained tax refunds to purchase money orders that they used to purchase a Cadillac Escalade, an Infiniti SUV, and a Chevrolet Camaro. The false and fraudulent tax returns filed by the conspirators using stolen identities resulted in the conspirators receiving $203,887.10 in fraudulently obtained tax refunds.

 

The owner of Rodriguez Auto Wholesale, Raymond Rodriguez, pleaded guilty to money laundering and was sentenced to 37 months in federal prison on March 28, 2017. Stanley’s co-defendant, Charmeta Bess, who participated in the purchase of the Cadillac Escalade, was sentenced to five years’ probation on February 24, 2017.

 

This case was investigated by the Internal Revenue Service - Criminal Investigation. It was prosecuted by Assistant United States Attorney Mandy Riedel.

Orlando, Florida – Acting United States Attorney W. Stephen Muldrow announces the return of a 25-count indictment charging John Pierre Mack III (25, Kissimmee, former member of the Florida National Guard), Ronnie Rolland Montgomery (28, Orlando), David Augusta Jones, III (26, Orlando), Dillon McDowell (25, Orlando), Amaryllis Pagan (19, Kissimmee), and Ashley Ferrell (26, Orlando) with one count of conspiracy to commit wire fraud and multiple counts of wire fraud. Mack, Montgomery, and Jones are charged with 24 counts of wire fraud. Ferrell, McDowell, and Pagan are charged with 13, 9, and 4 counts of wire fraud, respectively. The maximum penalty for each count is 20 years in federal prison.

 

According to the

indictment , from at least August 1, 2015, through July 6, 2017, these individuals were part of a criminal organization that was demanding money from victims by claiming to be agents with the Department of Homeland Security (DHS) and/or the Cyber Crimes Center (C3). Typically, the victims had responded to an online dating post and engaged in a conversation and exchange of photos with a female that they believed was an adult. The victims were later contacted by schemers posing as “agents,” who alleged that the female from the dating post was under the age of 18. The “agent” would claim that they had an arrest warrant for charges of soliciting a minor and would then direct the victim to make payments for “fines” and “penalties,” in lieu of being arrested. To further their scheme, the “agents” sent paperwork to the victims displaying the DHS seal, a judge’s name, and legal terms related to child exploitation. The schemers utilized email addresses containing variants of “child exploitation” and “cyber crimes center” in their correspondence. The victims were then directed to retail locations where they were to wire money to pay these “fines” or “fees,” and the defendants then took turns picking up the payments. The defendants also traded victims with each other to continue the scheme and to get more money. The victims, many of whom were members of the military or elderly, sent multiple extortion payments, ranging from $200 to $1,900 per transaction, fearing that they would otherwise be arrested.

 

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.

 

This case was investigated by U.S. Immigration and Customs Enforcement’s Office of Professional Responsibility and Homeland Security Investigations (San Diego) with assistance from the Naval Criminal Investigative Service (San Diego) and the Osceola County Sheriff’s Office. It is being prosecuted by Special Assistant United States Attorney Christina R. Downes, on assignment from the Office of the Principal Legal Advisor, ICE.

Jacksonville, FL – Acting United States Attorney W. Stephen Muldrow announces that Michael Rotstein (Ocala, 55) today pleaded guilty to one count of healthcare fraud. He faces a maximum penalty of 10 years’ imprisonment and must pay mandatory restitution of approximately $1.5 million. A sentencing date has not yet been set.

 

According to the

plea agreement , Rotstein, a podiatrist, billed the Medicare and TRICARE healthcare programs. He was one of the highest billers in the country for a medical service requiring the “removal of skin and muscle.” He claimed that nearly half of his procedures were for the removal of skin and muscle, placing him in the top one-percent of billers nationwide for this procedure. In reality, Rotstein did not actually perform these procedures. Rather, the majority of the times that he billed for these procedures, he was actually performing routine foot care, including the clipping of toenails, which is not a reimbursable service under Medicare or TRICARE. Since the services performed were not reimbursable, Rotstein devised a scheme to submit claims to the Medicare and TRICARE programs that included using a false diagnosis code and false billing code. Further, he included notes in his patients’ medical files to make it appear that he was actually performing these services. As a result of the scheme, Rotstein received $1,504,952.67 in healthcare reimbursements to which he was not entitled.

 

This case was investigated by the Department of Health and Human Services, Office of Inspector General. It was prosecuted by Assistant United States Attorney Jason Mehta.

Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces the return of an indictment charging Tedderick Fields charging him with three counts of filing false claims with the Internal Revenue Service, one count of wire fraud, and one count of aggravated identity theft in connection with income tax fraud. If convicted, he faces a maximum penalty of 20 years in federal prison for the wire fraud charge, with an additional two-year consecutive sentence for the aggravated identity theft charge. He also faces up to five years’ imprisonment on each of the false claim charges.

 

According to the indictment, Fields filed false tax returns in his name from 2011 through 2013, claiming a $400,000 refund in 2012. He also filed a false and unauthorized tax return claiming a fraudulent refund of $6,546 in the name of another individual and unlawfully used that individual’s personal identifying information to file a false tax return in his name.

 

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.

 

This case was investigated by Internal Revenue Service – Criminal Investigation. The St. Lucie County Sheriff’s Office assisted with the arrest. It will be prosecuted by Assistant United States Attorney Kelley Howard-Allen.

Tampa, FL – U.S. District Judge Susan C. Bucklew has sentenced Zachary Hunter (41, St. Petersburg) to six years in federal prison for receiving and possessing child pornography. The Court also ordered him to forfeit three computers, an external hard drive, and a thumb drive.

 

Hunter pleaded guilty on April 4, 2017.

 

According to court documents and testimony at the sentencing hearing, Hunter was responsible for possessing 1,366 images and 503 videos depicting child pornography, including some that involved prepubescent children and sadistic conduct.

 

This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Gregory T. Nolan.

 

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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.

Tampa– Acting U.S. Attorney W. Stephen Muldrow announces that the government has intervened in a lawsuit against a Florida compounding pharmacy owner, Renier Gobea (41, Tampa), and his company, RS Compounding LLC, located at 12617 Race Track Road (Tampa, FL), alleging that Gobea and RS Compounding billed TRICARE excessive prices for compounded prescriptions.

 

The lawsuit alleges that between January 1, 2012, and January 31, 2014, Gobea and RS Compounding charged TRICARE at least 2,000 percent more for drugs than it charged cash-paying customers, in violation of the False Claims Act. TRICARE, the health care program for uniformed service members and their families, prohibits pharmacies from charging TRICARE more than the general public. Unfortunately, Gobea and RS Compounding charged TRICARE vastly more than they charged cash-paying customers, in some cases over 10,000 percent more.

 

Gobea and RS Compounding’s actions are part of a larger trend of fraud against TRICARE involving compounded prescriptions. TRICARE’s costs for compounded drugs rose from $5 million in 2004 to $514 million in 2014 and $1.75 billion in fiscal year 2015. To date, the U.S. Attorney’s Office for the Middle District of Florida has diligently pursued fraud associated with compounding pharmacies, resulting in over $57 million in settlements.

 

This lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case. The case is captioned United States ex rel. McKenzie Stepe v. RS Compounding LLC, Renier Gobea, Case No. 8:13-cv-3150-T-33AEP (M.D. Fla.). The claims asserted by the government are allegations only, and there has been no determination of liability.

 

The government’s complaint in 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 from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

 

The investigation was conducted by TRICARE, the U.S. Department of Health and Human Services-Office of Inspector General, and the U.S. Attorney’s Office for the Middle District of Florida. It is being handled by Assistant U.S. Attorneys Shea M. Gibbons and Christopher Tuite.

Tampa, FL – Acting United States Attorney W. Stephen Muldrow announces that the Estate of Allan Dunn agreed to the sale of assets, from which the government was paid $15,743.14, to resolve allegations that Mr. Dunn failed to report the death of his wife and thereafter improperly collected her Social Security benefits.

Allan Dunn and his wife, Margaret Dunn, resided together in Sun City Center until Mrs. Dunn passed away at home in 2002. Mr. Dunn concealed his wife’s death by placing her body in a freezer in their home. He then collected her Social Security benefits until his own death in 2010. In all, he improperly collected $92,088 in federal benefits. Following Mr. Dunn’s death, authorities discovered that Mrs. Dunn had died eight years earlier.

Upon his death, Mr. Dunn’s sole asset of value was the condominium unit where he and his wife had resided. His heirs, who were unaware that he had concealed his wife’s death, agreed to waive their rights to inherit the condominium and to put it up for sale. The unit has since been sold. After paying the back taxes, sales costs, and amounts owed to the condominium association, the remaining sales proceeds of $15,743.14 were paid to the United States.

This case was handled by Assistant U.S. Attorney Charles Harden. It was investigated by the Social Security Administration - Office of the Inspector General.

Anyone who suspects abuse or neglect of the elderly is encouraged to contact state and local law enforcement authorities. Anyone who suspects fraud, waste, or abuse of federal benefits programs is encouraged to contact federal law enforcement authorities, such as the Inspector General of the federal agency that administers the program.

Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that Latronda Brooks (44, Palmetto) has pleaded guilty to theft of government funds and aggravated identity theft in connection with income tax fraud. She faces a maximum penalty of 10 years in federal prison for the theft charge, followed by an additional two-year, consecutive sentence for the aggravated identity theft charge. Brooks also agreed to a forfeiture money judgment in the amount of $327,521, representing the proceeds of the tax fraud.

 

According to court documents, Brooks opened an Urban Trust Bank account in her name, doing business as Magnificent Tax Services, and used it to deposit fraudulent tax refund checks. These fraudulent checks were falsely endorsed with the taxpayer’s signature and deposited with a falsely endorsed “permission” form that purportedly gave Brooks permission to deposit third-party tax refund checks into her bank account. Brooks spent the money from the third-party tax refunds on personal expenditures, including paying others involved in the tax fraud, and did not provide any of the funds to the taxpayer.

 

This case was investigated by Internal Revenue Service – Criminal Investigations and the Manatee County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Kelley Howard-Allen.

Jacksonville, Florida – U.S. District Judge Timothy J. Corrigan has sentenced Cordelle Joseph (45, Republic of Trinidad and Tobago) to six years and three months in federal prison for possessing more than 100 grams of heroin with the intent to distribute it. He pleaded guilty on May 13, 2016.

 

According to court documents, during January 2016, a narcotics task force comprised of detectives from the Jacksonville Sheriff’s Office and special agents from the DEA and the FBI began investigating Joseph and others, who were suspected of supplying heroin in Jacksonville. The officers intercepted and arrested Joseph after he had flown to Los Angeles and returned to Jacksonville aboard a Greyhound bus; he was transporting almost a kilogram of heroin in his luggage. After his arrest, Joseph admitted that he had traveled to California to purchase heroin and that he had been living in the United States under a false identity. Following his prison sentence, Joseph will be deported.

 

This case was investigated by the Jacksonville Sheriff’s Office, the Drug Enforcement Administration, and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Frank Talbot.

Jacksonville, Florida – United States District Judge Timothy J. Corrigan has sentenced James Donald Jacola (54, Green Cove Springs) to five years in federal prison for receiving images and videos depicting the sexual abuse of children over the Internet. He must also serve a 10-year term of supervised release, register as a sex offender, and forfeit his computer equipment.

 

According to court documents and information disclosed in court, FBI agents began an online undercover investigation to identify individuals who were using a particular website to access images and videos depicting child pornography. The agents determined that Jacola, using the pseudonym “mooncalf,” had accessed this website. On March 10, 2016, a search warrant was executed at Jacola’s residence and agents seized two computers. Forensic analyses of the computers revealed that they contained at least 3 videos and at least 784 images depicting child pornography. One of these videos depicted a toddler being molested; it had been downloaded and viewed twice by Jacola on the day before the agents executed the search warrant.

 

This case was investigated by the Federal Bureau of Investigation and the Clay County Sheriff’s Office. It was prosecuted by Assistant United States Attorney D. Rodney Brown.

 

It 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.

Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that WellCare's former General Counsel, Thaddeus M.S. Bereday (52, Tampa) has pleaded guilty to one count of making a false statement to the Florida Medicaid program. He faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set.

 

On March 2, 2011, Bereday and four other individuals, Todd S. Farha, Paul L. Behrens, William L. Kale, and Peter E. Clay, were indicted on various federal criminal violations relating to a scheme to defraud the Florida Medicaid program (from the summer of 2003 through the fall of 2007) by making false and fraudulent statements relating to expenditure information for behavioral health care services.

 

WellCare operates Health Maintenance Organizations (“HMOs”) in several states targeted to government-sponsored health care benefit programs like Medicaid. Two WellCare HMOs operating in Florida, StayWell and Healthease, contracted with the Agency for Health Care Administration (“AHCA”), the agency that administers the Medicaid program in Florida, to provide recipients with an array of services, including behavioral health services.

 

In 2002, Florida enacted a profit-capping statute that required Florida Medicaid HMOs to expend 80% of the Medicaid premium paid for certain behavioral health services on the provision of those services. If the HMO expended less than 80% of the premium, the difference was required to be returned to AHCA. The indictment alleged the ways in which the defendants falsely and fraudulently schemed to submit inflated expenditure information in the company’s annual reports to AHCA in order to reduce the WellCare HMOs’ contractual payback obligations for behavioral health care services.

 

On May 5, 2009, the United States filed related charges in an Information and Deferred Prosecution Agreement ("DPA") against WellCare. Pursuant to that DPA, WellCare was required to pay $40 million in restitution, forfeit another $40 million to the United States, and cooperate with the government’s criminal investigation. The company complied with all of the requirements of the DPA. As a result, the government filed a motion requesting that the Court dismiss the Information against WellCare, which the Court granted.

 

After a 13-week trial in 2013, a jury returned verdicts against four individuals. Todd S. Farha of Tampa (former WellCare CEO) was found guilty of two counts of health care fraud; Paul L. Behrens of Odessa (former WellCare CFO) was found guilty of two counts of making false statements relating to health care matters and two counts of health care fraud; William L. Kale of Oldsmar (former WellCare VP) was found guilty of two counts of health care fraud; and Peter E. Clay of Wellesley, Massachusetts (former WellCare VP) was found guilty of two counts of making false statements to a law enforcement officer.

 

Bereday did not participate in the 2013 trial due to health-related issues. His case was scheduled to be tried in September of this year. As part of his plea, Bereday admitted that he, along with others, knowingly and willfully had caused the submission of Healthease’s false 2006 expenditure report to the Florida Medicaid program.

 

This case was investigated by the U.S. Department of Health and Human Services - Office of Inspector General, the Federal Bureau of Investigation, and the Florida Attorney General's Medicaid Fraud Control Unit. It was prosecuted by Assistant United States Attorneys Jay Trezevant and Cherie Krigsman, along with Department of Justice Senior Litigation Counsel John A. Michelich and Special Assistant United States Attorney John Bowers.

An Orlando medical doctor and an infusion clinic owner were sentenced to 64 months in prison and two years supervised release, and 90 months and two years supervised release, respectively, today for their roles in a $13.7 million Medicare fraud conspiracy that involved submitting claims for expensive infusion-therapy drugs that were never purchased, never provided and not medically necessary.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephen Muldrow of the Middle District of Florida and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

Dr. Miguel Burgos, 60, of Gotha, Florida, and Yosbel Marimon, 40, of Winter Park, Florida, were sentenced by U.S. District Judge Roy B. Dalton, Jr. of the Middle District of Florida. Judge Dalton also ordered the defendants to pay $9.8 million in restitution and to forfeit the same amount. As part of his plea, Marimon also consented to the forfeiture of real property valued at approximately $1.7 million. Burgos and Marimon each pleaded guilty to one count of conspiracy to commit health care fraud: Burgos on February 9, Marimon on February 16.

As part of his guilty plea, Burgos admitted that between July 2008 and September 2011, he was the medical director of four Orlando-area infusion clinics that received Medicare funds. Marimon admitted that he was one of the owners of the four clinics. Burgos and Marimon further admitted that they billed Medicare and private insurance companies for, among other things, expensive infusion therapy medications, including anticancer chemotherapeutic medications, despite never administering the drugs. Burgos and Marimon also admitted to submitted false claims to Medicare and private insurance companies for physical therapy conducted at the clinics, even though there was no licensed physical therapist on staff at the clinics, they admitted. In connection with the scheme, the defendants admitted that they billed Medicare and private insurers approximately $13.7 million, of which approximately $9.8 million was paid on the fraudulent claims.

This case was investigated by HHS-OIG. Fraud Section Trial Attorney Timothy Loper prosecuted the case. Assistant U.S. Attorney Nicole Andrejko also provided assistance regarding asset forfeiture issues in this case.

The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,200 defendants who have collectively billed the Medicare program for more than $12 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Tampa, FL –U.S. District Judge Susan C. Bucklew today sentenced Timothy Tallmadge (27, Sarasota) to seven years in federal prison for possessing a firearm and ammunition as a convicted felon. The Court also ordered him to forfeit the firearm and ammunition seized during his arrest. Tallmadge pleaded guilty on March 17, 2017.

 

According to court documents, on August 26, 2016, law enforcement officers responded to a call reporting a burglary in progress. The officer who arrived on the scene observed four individuals matching the caller’s description, including Tallmadge, and detained them for questioning. During this time, Tallmadge continued walking away from the officer, refused to comply with commands, and kept reaching for his waistband. When the officer conducted a pat down of Tallmadge’s waistband area, he uncovered a loaded firearm. At the time of the incident, Tallmadge had multiple prior felony convictions and was therefore prohibited from possessing a firearm or ammunition under federal law.

 

This case was jointly investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Sarasota Police Department. It is being prosecuted by Assistant United States Attorney Kaitlin R. O’Donnell.

 

This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.

Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announces that Wesley Eugene Parker (25, Fernandina Beach) today pleaded guilty to distribution of cocaine. Due to his multiple prior felony convictions for drug offenses, he faces an enhanced maximum penalty of 30 years in federal prison. A sentencing date has not yet been set.

 

According to the plea agreement, on December 28, 2016, and again less than two weeks later, Parker sold powder cocaine to a confidential informant. When law enforcement officers executed a search warrant at the home where Parker was living, they recovered firearms, ammunition, and illegal drugs, including marijuana and cocaine.

 

This case was investigated by the Federal Bureau of Investigation and the Nassau County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Michael J. Coolican.

Ocala, Florida – Senior U.S. District Judge Wm. Terrell Hodges today sentenced David Meadows (53, Leesburg) to 20 years in federal prison for distributing child pornography. The Court also ordered him to forfeit various computers and electronic devices that he had used to facilitate the offense. Meadows pleaded guilty on March 17, 2017.

 

According to court documents, federal agents determined that Meadows had distributed child pornography depicting infants and toddlers via email. The agents traced the activity to Meadows’s residence and executed a search warrant. They also conducted a consent search of his office. Multiple electronic devices, including laptop computers and a cellphone, were seized; forensic analyses confirmed that the devices contained more than 2,800 files depicting child pornography.

 

"This sentencing underscores the seriousness of the crime of child exploitation," said Ivan J. Arvelo, acting special agent in charge of HSI Tampa. "HSI special agents will aggressively investigate the predators who target the most vulnerable in our society."

 

This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney William S. Hamilton.

 

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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.

 

Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that Richmond Joseph McDonald (40, Tampa) has pleaded guilty to enticing a minor to engage in sexually explicit conduct. He faces a minimum mandatory term of 10 years, up to life, in federal prison; the sentencing hearing is scheduled for September 28, 2017.

 

According to the plea agreement, McDonald and his wife, Shauna Maryann Boselli, engaged in sexual activity with a 7-year-old child with the consent of her relative, Jamie Esposito. Esposito had engaged in explicit conversations, via the Internet and text messages, with McDonald and Boselli regarding sexual acts with the victim.

 

On July 19, 2016, Esposito took the child to Tampa to meet McDonald and Boselli for the purpose of the three of them engaging in sex acts with her. Esposito brought the girl to the zoo in Tampa, where they met with McDonald and Boselli. After spending time at the zoo and taking the child for ice cream, McDonald and Boselli led Esposito and the child to their house in Tampa. While at the house, McDonald sexually abused the child, while Esposito watched. Afterwards, Esposito and the child returned to their hotel in Tampa. Two days later, McDonald and Boselli met with Esposito and the child at their hotel where McDonald and Boselli engaged in sex acts with the child.

 

Federal agents executed a federal search warrant at McDonald’s residence and seized numerous electronic devices and the vehicle that McDonald and Boselli had used in the commission of the offense. Forensic analyses of the devices revealed that McDonald possessed more than 1,300 images depicting child pornography, including images and videos of the 7-year-old girl performing sex acts.

 

Esposito and Boselli previously pleaded guilty for their roles in this case and are awaiting sentencing. Each faces a minimum mandatory penalty of 10 years, up to life, in federal prison.

 

This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorneys Lisa M. Thelwell and Josephine W. Thomas.

 

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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.

Tampa, Florida – U.S. District Judge Charlene Edwards Honeywell today sentenced Fontella James (37, Plant City) to two years and eight months in federal prison for conspiracy and aggravated identity theft. She pleaded guilty on April 11, 2017.

 

According to court documents, James worked at Rotech Healthcare, Inc.’s Lakeland billing center. As an employee of Rotech, she had password-protected access to the company’s secure computerized databases that contained medical records and personally identifiable information (PII) of Rotech’s customers and patients, including names, dates of birth, and social security numbers. James agreed with fellow Rotech employee, co-defendant Sharmekia M. Young, to steal Rotech patient records containing PII to give to co-conspirator Vickie Bryant. James and Young provided the PII of hundreds of Rotech customers to Bryant so that she could sell the information to another individual (a confidential informant) who manufactured, sold, and used counterfeit credit cards and counterfeit Florida driver licenses. On June 9, 2016, and again the following week, Bryant met with the informant and sold him 957 different victims’ PII contained in printed medical records that had been stolen by James and Young.

 

On December 13, 2016, Bryant was sentenced to four years’ imprisonment for access device fraud and aggravated identity theft. Young has pleaded guilty and is awaiting sentencing.

 

This case was investigated by United States Secret Service, the Florida Department of Law Enforcement, and the Tampa Police Department, as part of the Secret Service’s Financial Investigations Strike Team. It is being prosecuted by Assistant United States Attorneys Rachel Jones, Amanda Riedel, and Adam Saltzman.

Orlando, Florida – U.S. District Judge G. Kendall Sharp today sentenced Mario Donate Lockhart (37, Orlando) to 15 years in federal prison for possessing a firearm as a convicted felon. Due to his multiple prior felony convictions, he qualified for an increased penalty as an Armed Career Criminal. He pleaded guilty on March 14, 2017.

According to court documents, on August 29, 2016, Lockhart threatened to kill an individual while holding a loaded semiautomatic firearm with a bullet in the chamber. He then pointed the firearm at another individual as officers from the Orlando Police Department arrived on the scene and ordered him to drop the weapon. Lockhart ignored these requests and ran from the officers with the firearm in his hand. He was apprehended a short time later and the firearm was recovered. At the time of the offense, Lockhart had multiple prior felony convictions and therefore was prohibited from possessing firearms or ammunition under federal law.

 

This case was investigated by ATF and the Orlando Police Department. It was prosecuted by Assistant United States Attorney Sean P. Shecter.

 

This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.

Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announces that Lake City residents Latoshia Nicole Shade (41), James Terrence White (36), and Willie Lee Simmons, Jr. (31) have pleaded guilty to federal narcotics and firearms charges. Shade pleaded guilty to possessing ammunition as a convicted felon and to distributing cocaine. She faces a maximum penalty of 10 years in federal prison for the ammunition offense and up to 20 years’ imprisonment for the drug distribution charge. White pleaded guilty to possessing with the intent to distribute cocaine, possessing with the intent to distribute crack cocaine, and maintaining a place for the purpose of distributing drugs; he faces up to 20 years in federal prison on each count. And, Simmons pleaded guilty to possessing a firearm as convicted felon and faces a maximum penalty of 10 years in federal prison.

 

According to the plea agreements, in the fall of 2016, Shade was introduced to an undercover agent from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). On December 8, 2016, she sold a box of ammunition and approximately one ounce of cocaine to that agent. Shade had obtained the cocaine from White, who operated a barbecue stand in Lake City, Florida. Shade and White sold approximately one ounce of cocaine to the undercover agent on two additional occasions.

 

On February 2, 2017, law enforcement officers executed a search warrant at a shed adjacent to White’s barbecue stand and found that he was using the shed to store cocaine and crack cocaine, as well as narcotics manufacturing and packaging equipment. Officers recovered $2,975 in cash from the shed and $5,623 from White.

 

Shade also had introduced a person to Simmons who, unbeknownst to her, was a confidential informant (CI) working for ATF. In November 2016, Simmons sold Alpha-PVP, also known as “flakka” or “gravel,” to the CI on two occasions. On November 8, 2016, Simmons sold a .357 caliber revolver to the CI and, a few weeks later, he informed the CI that he had a second firearm to sell. The CI introduced Simmons to the undercover agent and, the next day, Simmons sold the agent a.40 caliber semiautomatic handgun.

 

At the time of the offenses, Shade and Simmons both had prior felony convictions and were therefore prohibited from possessing firearms or ammunition under federal law. Shade’s previous felony convictions include aggravated assault with a deadly weapon, retaliating against a witness, and sale of cocaine. Simmons had a prior felony conviction for assault with a deadly weapon.

 

These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives in conjunction with the Columbia County Sheriff’s Office and the Lake City Police Department. The cases are being prosecuted by Assistant United States Attorney Laura Cofer Taylor.

 

These cases are being prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.

Ocala, Florida – Acting United States Attorney W. Stephen Muldrow announces the unsealing of an

indictment charging Susan Marie Kort (61, Ocala) with theft of government funds. If convicted, she faces a maximum penalty of 10 years in federal prison. The indictment also notifies Kort that the United States is seeking a money judgment in the amount of $35,577.60, which represents the proceeds of the alleged criminal conduct.

 

According to the facts described in open court today, Kort’s elderly father passed away at his Lake County residence in approximately November 2011. After discovering the body, Kort buried her father in the backyard of her Eustis home and did not report the death to authorities. She then used a power of attorney for her father’s financial affairs to withdraw and spend the Social Security Administration (SSA) benefit payments that were being deposited into his bank account. The SSA eventually suspended these benefit payments in December 2013, when they were unable to contact Kort’s father.

 

When confronted by investigators, Kort admitted to hiding her father’s body and to defrauding the SSA by unlawfully taking his benefit payments. She eventually led investigators to her father’s grave and subsequent DNA testing confirmed the identity of the remains as Kort’s father.

 

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.

 

This case was investigated by the Social Security Administration Office of the Inspector General and the Lake County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.

Orlando, Florida – U.S. District Judge Paul G. Byron has sentenced Audrey Montserrate (50, Dania), Benancio Lopez (53, St. Cloud), Richard Ellis (30, Miami), and Donald S. Sutliff (42, Kissimmee) to federal prison terms for laundering proceeds from a fraudulent sweepstakes scheme. As part of the sentences, the Court also entered a money judgment for the proceeds of the charged criminal conduct. Each previously pleaded guilty to conspiracy to commit money laundering.

 

According to court documents, Montserrate, Lopez, Ellis, and Sutliff laundered the proceeds of a fraudulent sweepstakes scheme that operated out of Costa Rica and primarily targeted elderly victims in the United States. Promoters operating from illegal telemarketing call centers in Costa Rica called victims in the United States and falsely informed them that they had won a large cash prize in a sweepstakes. The victims were instructed to send money to “United States government officials,” including Montserrate, Lopez, Ellis, and Sutliff, to pay fees and taxes in order to retrieve their prize. The victims sent the funds to Montserrate, Lopez, Ellis, and Sutliff by bank wire transfer, third-party wire services, and mail. The defendants then transferred the fraud proceeds to conspirators in Costa Rica, after deducting a fee for laundering the funds. Montserrate laundered $735,500, representing fraud proceeds from at least 18 victims. Lopez laundered $486,747 from 11 victims; Ellis laundered $130,168 from 23 victims; and Sutliff laundered $18,503 in fraud proceeds from 5 victims.

 

Montserrate and Lopez each received a sentence of 30 months in federal prison. Ellis was sentenced to 14 months’ imprisonment, and Sutliff was ordered to serve 12 months in federal prison.

 

This case was investigated by the St. Cloud Internal Revenue Service - Secret Service Financial Crimes Task Force, which is comprised of the Internal Revenue Service - Criminal Investigation, the United States Secret Service, the St. Cloud Police Department, the Osceola County Sheriff’s Office, the Brevard County Sheriff’s Office, the Palm Bay Police Department, the Casselberry Police Department, the Kissimmee Police Department, the Winter Park Police Department, and the Maitland Police Department. It was prosecuted by Assistant United States Attorney Karen L. Gable.

WASHINGTON – Acting U.S. Attorney W. Stephen Muldrow announced today that Assistant U.S. Attorneys Jay Trezevant, Cherie Krigsman, Charles Harden, Karin Hoppmann, and Jason Mehta, along with Legal Administrative Specialist Gina Wetherald, Senior Civil Investigator Charles Burnette, and retired Supervisory Legal Administration Specialist Madeline Tejera, were among the 179 members of the Department of Justice recognized by Deputy Attorney General Rod Rosenstein, and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson, at the 33rd Director’s Awards Ceremony today in Washington D.C.

 

The Middle District of Florida (MDFL) was one of 35 districts represented at the ceremony which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.

 

In his prepared remarks, Deputy Attorney General Rosenstein told the awardees: “These 179 award recipients embody the best of the Department of Justice.… Today’s honorees have earned the esteem of their colleagues. But most importantly, you have earned the gratitude of your fellow citizens — whose communities you have made safer, whose lives you have improved, and whose trust you have rewarded.”

 

“We very much appreciate that the Department of Justice has recognized the outstanding achievements of these prosecutors and staff from our office,” said Acting United States Attorney Stephen Muldrow. “These cases are excellent examples of the fine work being done by the many hard-working and dedicated employees of the U.S. Attorney’s Office for the Middle District of Florida. While their efforts often go unnoticed, these public servants work tirelessly to make our communities safer and defend the interests of the American people.”

 

The MDFL was recognized for its highly successful litigation of several healthcare fraud cases. The first involves WellCare Health Plans, Inc., a publicly traded managed-care company, and several of its top executives, including the CEO and CFO. In both civil and criminal cases, the litigation team mastered an extraordinary volume of evidence to lay bare a sophisticated scheme designed to enable the company to unlawfully retain millions of dollars of Medicaid funds that it falsely claimed had been spent on behavioral-health services. In May 2009, WellCare entered into a Deferred Prosecution Agreement with the U.S. Attorney’s Office and the Florida Attorney General’s Office, which imposed strict compliance measures on the company and required it to repay $40 million in restitution and $40 million in civil forfeiture. After two years of fierce pretrial litigation, the criminal case against four defendants went to trial in February 2013. On June 10, 2013, the jury found all four defendants guilty of fraud and making false statements. The district court subsequently imposed sentences of imprisonment for three of the individuals and their convictions were affirmed by the Eleventh Circuit in August 2016. This matter was handled by Assistant U.S. Attorneys Jay Trezevant and Cherie Krigsman, with assistance from Supervisory Legal Administrative Specialist Madeline Tejera and Legal Administrative Assistant Gina Wetherald. AUSA Karin Hoppmann handled the appeal.

 

As the civil investigation into WellCare, Inc. continued, the defendant invoked its inability to pay, and negotiations commenced that eventually led to a settlement of all qui tam claims for $137.5 million. The relator’s objection to the settlement amount was successfully concluded in 2012. The Court upheld the settlement, which has been paid in full. AUSA Charles Harden handled the settlement, with assistance from Senior Civil Investigator Charles Burnette.

 

Additional members of the WellCare litigatve team that were recognized today are: Department of Justice trial attorneys Allie Pang (Civil Division) and John A. Michelich (Criminal Division); John J. Bowers from the Securities and Exchange Commission; Kyle R. Ford and Isaac M. Bledsoe from the Department of Health and Human Services, Office of Inspector General; and Eduardo Ortega, Susana Mapu, and Kevin J. DiQuattro from the Federal Bureau of Investigation.

 

In addition, as part of the MDFL’s effort to combat compounding pharmacy fraud, Assistant U.S. Attorney Jason Mehta was recognized for spearheading 17 separate civil investigations that concluded with settlements of more than $59.8 million, in just 18 months. These investigations uncovered a complex web of fraudulent practices involving pharmacies paying marketers exorbitant commissions in exchange for prescriptions written by physicians for pain and scar creams. These prescriptions cost the TRICARE program as much as $10,000 per tube. AUSA Mehta has subsequently provided assistance and training to other districts during similar investigations.

 

EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.

 

Please visit our photo gallery to view images from the event.

Tampa, FL – U.S. District Judge Mary S. Scriven has sentenced DaQuan Brooks (23, St. Petersburg) to 10 years in federal prison for possessing crack cocaine, with the intent to distribute it, and possessing a firearm in furtherance of drug trafficking activity. He pleaded guilty on February 24, 2017.

 

According to court documents, on August 8, 2016, Pasco County Sheriff’s Office deputies arrested Brooks on an outstanding arrest warrant for charges of domestic battery by strangulation. Within plain view inside Brooks’s car, deputies observed a firearm. A further search of the car revealed approximately 45 grams of cocaine base in a plastic bag, along with a razor blade, which is commonly used to carve up chunks of cocaine base for distribution. As a previously convicted felon, Brooks is prohibited from possessing a firearm or ammunition under federal law.

 

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Pasco County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Michael M. Gordon and Michael V. Leeman.

 

This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.

Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that Travis Marcel Hickman (31, Bradenton) has pleaded guilty to possessing firearms and ammunition as a convicted felon, and to possessing a firearm in furtherance of a drug-trafficking crime. He faces a minimum mandatory penalty of 20 years, up to life, in federal prison. A sentencing date has not yet been set.

 

Hickman was indicted on January 25, 2017.

 

According to court documents, on November 17, 2016, deputies from the Manatee County Sherriff’s Office initiated a traffic stop on Hickman’s car. He fled, leading the deputies on a chase that resulted in him colliding violently with another vehicle. Hickman emerged from his car with a backpack containing various narcotics, including crack cocaine. Law enforcement officers recovered a loaded .40 caliber pistol from the disabled vehicle and a subsequent search of Hickman’s motel room revealed a loaded 9mm pistol, ammunition, and various other narcotics, including cocaine and crack cocaine. At the time, Hickman was a convicted felon and therefore prohibited from possessing a firearm or ammunition under federal law.

 

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Manatee County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Frank Murray.

 

This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.

Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that Rebecca Smith (46, Spring Hill) today pleaded guilty to mail fraud. She faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.

 

According to the plea agreement, Smith worked as a purchasing agent in the Pasco County office of Waste Management, Inc., a Houston-based company that provides waste disposal and environmental services across the country. Between October 2015 and September 2016, Smith placed dozens of unauthorized purchase orders with corporate vendors for a wide array of products, ranging from industrial equipment to big-screen televisions. When the vendors sent invoices for these purchases, Smith intercepted them, forged her supervisor's initials to mark their approval, and submitted them for payment. Smith had the items shipped to either her residence or her office, in which case she would take them home. Although the company was ultimately able to recoup some of its losses by returning of some of the merchandise, it ultimately lost over $91,000 as a result of Smith's scheme.

 

This case was investigated by the United States Secret Service and the Pasco County Sheriff's Office. It is being prosecuted by Assistant United States Attorney Eric K. Gerard.

 

Tampa, Florida – U.S. District Judge Steven D. Merryday has sentenced Martin Tejada-Galvan (48) to four years and two months in federal prison for offenses related to his illegal reentry into the United States after prior deportations. He was previously convicted in Texas for the same conduct in 2014. The sentence imposed this week includes a 3-year sentence for illegal reentry and a consecutive 14-month sentence for violating the terms of his supervised release imposed after his Texas conviction. Tejada-Galvan pleaded guilty on March 22, 2017.

 

According to court documents, Tejada-Galvan is a citizen of Mexico and has been deported four times, most recently in 2014. He reentered the United States illegally after his deportation and was found in Hillsborough County after he was arrested for driving under the influence (“DUI”). Officers conducted a traffic stop after observing Tejada-Galvan’s vehicle going off the roadway and almost hitting multiple signs. He later pleaded guilty to the DUI offense, which is his fourth such conviction. Following his prison sentence, Tejada-Galvan is subject to deportation.

 

This case was investigated by U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It was prosecuted by Assistant United States Attorney Jennifer L. Peresie.

Jacksonville, Florida – U.S. District Judge Brian J. Davis today sentenced Douglas Thompson (52, Jacksonville) to 27 months in federal prison for wire fraud and theft of government property. The Court also ordered him to pay $149,218.26 in restitution to the victims of his crimes.

 

Thompson pleaded guilty on February 24, 2017.

 

According to court documents, Thompson was a heavy equipment broker who operated his one-man business under the name Douglas Thompson Industries (DTI). In order to increase business, Thompson created multiple DTI websites that falsely claimed the company had been in existence for 30 years, had multiple divisions, and had satisfied over 6,000 customers worldwide. The sites also falsely claimed that Thompson, a high school dropout, was a graduate of the Massachusetts Institute of Technology. Thompson defrauded three DTI customers by purporting to broker the sale of truck chassis, accepting payment, and then failing to deliver as agreed.

 

While operating his business and defrauding customers, Thompson also fraudulently collected Supplemental Security Income (SSI) and Medicaid healthcare benefits. SSI is a program designed to provide support for low-income individuals, generally who are unable to work due to a disability.

 

This case was investigated by the Social Security Administration - Office of the Inspector General and the Department of Health and Human Services - Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael J. Coolican.

Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announces the return of a superseding indictment charging Guarino Edwards Broccoli, a/k/a Gary Broccoli, a/k/a Gary Edwards (53, Fort White), with three counts of theft of Social Security benefits and one count of forced labor with aggravated sexual abuse. If convicted, he faces a maximum penalty of 10 years’ imprisonment per count for the benefit theft offenses, and up to life in prison for the forced labor charge. The indictment also notifies Broccoli that the United States intends to forfeit his residence and $284,278, representing the proceeds received from the theft of Social Security benefits.

 

According to the

superseding indictment , Broccoli is charged with theft of child auxiliary benefits for two minor children and theft of disability benefits. He is also charged with knowingly providing and obtaining the services of a female victim by means of force and threats of force, causing her to believe that if she did not perform such labor and services she would suffer serious harm. It is also alleged that this offense included aggravated sexual abuse.

 

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.

 

This case was investigated by the Social Security Administration Office of the Inspector General, the Department of the Treasury Office of Inspector General, the Florida Department of Law Enforcement, the Department of Health and Human Services Office of Inspector General, the U.S. Secret Service, the Columbia County Sheriff’s Office, and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Ashley Washington.

 

This investigation is ongoing. The U.S. Attorney’s Office is seeking other potential victims related to this individual and/or the location listed in this indictment. Anyone with additional information is encouraged to contact the FBI -Jacksonville Field Office at 904-248-7000.