Southern District of Florida

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), and Jeffrey S. Katz, Interim Chief, Boynton Beach Police Department (BBPD), announce the arrest of Stephen Anthony Paulsen, 54, of Fort Worth, Texas, for attempting to entice a minor to engage in an illegal sexual activity, in violation of Title 18, United States Code, Section 2422(b). Paulsen had his initial appearance this morning before U.S. Magistrate Judge James M. Hopkins. The United States requested that Paulsen be detained and a Pretrial Detention hearing has been set for Tuesday, July 23, 2013, at 10:00 a.m. If convicted, the defendant faces a ten year mandatory term of imprisonment and a maximum term of life.

According to the criminal complaint, Paulsen sent numerous sexually explicit messages via a web-based social media application to an undercover officer who posed as a 15 year old boy. Paulsen then attempted to meet the minor to engage in illegal sexual activity when Paulsen believed the boy was home alone, at which point he was arrested. At the time of his arrest, Paulsen was in South Florida visiting family.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Mr. Ferrer commended the investigative efforts of ICE-HSI and BBPD. This case was adopted from the state in cooperation with Dave Aronberg, State Attorney, Palm Beach County, and the South Florida Internet Crimes Against Children (ICAC) Task Force. The case is being prosecuted by Assistant U.S. Attorney Adam McMichael.

A criminal complaint is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced that David Bacon, 53, and Donald Sargent, 37, both former residents of Key West, Florida, were sentenced today in United States District Court in Key West on their convictions on charges arising from false claims filed in connection with the Deepwater Horizon explosion and pollution incident in the Gulf of Mexico. Both defendants, and a third individual, Cleon Major, previously had entered guilty pleas to charges of wire fraud in the submission of fraudulent claims for lost income against the Gulf Coast Claims Facility, in violation of Title 18, United States Code, Section 1343.

U.S. District Court Judge Jose E. Martinez sentenced Bacon to a term of imprisonment of 21 months followed by a three year term of supervised release, and ordered he pay restitution to the fund in the amount of $16,000. Judge Martinez sentenced Sargent to a prison term of 33 months, also followed by a three year term of supervision, and restitution in the amount of $77,215 to the Gulf Coast Claims Facility. Defendant Major was sentenced on May 16, 2013 to a term of imprisonment of 110 months on the wire fraud charges and ordered to pay restitution in the amount of $306,228, as well as a period of supervised release of three years.

According to the Indictment, Joint Factual Statements filed by the parties, and other court records, on April 20, 2010, an explosion and fire occurred on the Deepwater Horizon, an oil rig in the Gulf of Mexico that had been drilling an exploration well. In June 2010, BP established the Gulf Coast Claims Facility (GCCF) for the purpose of administering, mediating, and settling certain claims of individuals and businesses for costs, damages, and other losses incurred as a result of the oil discharges due to the Deepwater Horizon incident. In August 2010, the GCCF began receiving and processing such claims, and BP ceased receiving and processing claims of individuals and businesses for costs, damages, and other losses incurred as a result of the oil discharges due to the Deepwater Horizon incident.

Major confessed in Court that on October 27, 2010, in furtherance of a scheme to obtain money from the GCCF, he filed a fraudulent electronic claim via the internet for approximately $10,000, in lost income, knowing the representations in his claim were false. To substantiate his claim of lost income, Major provided the GCCF fraudulent employment and income documents, which he transmitted via the internet from Monroe County, Florida, to the GCCF offices in Dublin, Ohio to support his demand for compensation.

In addition to his own claim, Major secured the personal identifying information, including social security numbers, of Bacon, Sargent, and others, and filed claims under their names with false supporting documentation. Major was held accountable as part of the relevant sentencing conduct for filing fraudulent claims for nine other Key West residents, in addition to Bacon and Sargent, which included false verifications of employment, fraudulent payroll records, and fictitious supporting tax forms. Compensation paid out under the false claims was shared between the individual claimant and Major.

Mr. Ferrer commended the investigative efforts of the FBI. The case was prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Samuel Santiago, Caribbean Area Manager, U.S. Department of Agriculture, Animal and Plant Health Inspection Service, Investigation and Enforcement Services (USDA-APHIS-IES), announced that Raquel Molina, 55, of Miami, pled guilty to the offense of Forging an Official Certificate, in violation of Title 7, United States Code, Section 1622(h)(4). Molina waived a Pre-Sentence Investigation Report and was simultaneously sentenced to a $500 fine.

According to the allegations of the charging instrument, Raquel Molina, an employee of a Miami, Florida food supply company, caused the export of a container of food to French Polynesia, Tahiti, which included ice cream, an animal product, milk. Merchandise containing animal products exported from the United States require the issuance and accompaniment of a Health Certificate issued by the United States Department of Agriculture Animal and Plant Inspection Service.

On May 22, 2009, Molina faxed a fraudulent Health Certificate for the cartons of ice cream, bearing the forged signature of a U.S. Export/Import Veterinary Medical Officer, to French Polynesia, Tahiti. Later that same day, Molina fraudulently filled out and signed another form, again using a false signature, under the title of Dairy Grader, bearing the seal of the United States Department of Agriculture Animal and Plant Inspection Service.

Raquel Molina pled guilty and was immediately sentenced for her role on July 17, 2013, before U.S. District Judge Robert N. Scola, Jr.

Mr. Ferrer commended the investigative efforts of the USDA-APHIS-IES. This case is being prosecuted by Assistant U.S. Attorney Norman O. Hemming, III.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), announced that Broward resident Jaime Omar Sotomayor was sentenced on Friday, July 12, 2013 to 84 months imprisonment and four years of supervised release by United States District Judge William J. Zloch on charges of importing marijuana from the Bahamas.

Sotomayor was adjudicated guilty of the following offenses: conspiracy to import 100 kilograms or more of marijuana in violation of Title 21, United States Code, Section 963 (count one), importation of 100 kilograms of marijuana in violation of Title 21, United States Code, Section 952(a) (count two), conspiracy to possess with intent to distribute 100 kilograms or more of marijuana in violation of Title 21, United States Code, Section 846 (count three), and possession with intent to distribution 100 kilograms of marijuana in violation of Title 21, United States Code, Section 841(a)(1) (count four).

This case stemmed from an interdiction of marijuana by the Palm Beach Police Department and Department of Homeland Security from a boat that traveled from Bimini, Bahamas to West Palm Beach loaded with 667 pounds of marijuana in the center console and coolers located on the vessel.

Mr. Ferrer commended the investigative efforts of ICE-HSI and the Palm Beach Police Department. The case was prosecuted by Assistant United States Attorney Lothrop Morris.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Paula Reid, Special Agent in Charge, U.S. Secret Service, announced that defendant Betty Cole, 34, of Miami, pled guilty yesterday for her participation in a stolen identity tax refund scheme. Sentencing is scheduled for September 23, 2013 at 11:15 a.m. before U.S. District Judge Robin Rosenbaum.

Cole pled guilty to one count of conspiracy to possess fifteen or more unauthorized access devices in violation of Title 18, United States Code, Section 1029(b)(2), and one count of aggravated identity theft in violation of Title 18, United States Code, Section 1028A. At sentencing, the defendant faces a maximum term of imprisonment of seven years.

According to the plea documents, from in or around June 2011, continuing through February 2012, Cole worked as a respiratory therapist at South Miami Hospital (“SMH”) in Miami, Florida. The defendant had access to names, dates of birth, and Social Security numbers (together, personal identity information or “PII”) of patients in the course of her job duties. In or around June 2011, Alci Bonannee asked the defendant to provide Bonannee with PII of SMH patients. In or around June 2011, and again in or around February 2012, Cole obtained the PII of SMH patients and provided that information to Bonannee.

Bonanee used the personal identity information to file fraudulent tax returns with the Internal Revenue Service seeking refunds. Cole knew that Bonannee would use the personal identity information to submit fraudulent tax returns. Bonannee paid Cole thousands of dollars for over 800 patients’ personal identity information.

Mr. Ferrer commended the investigative efforts of IRS-CI and the U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, and Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, announced today that Dr. Scott Becker, 54, of Pembroke Pines, Florida, pleaded guilty to conspiring to distribute and dispense large amounts of oxycodone without a legitimate medical purpose and outside the usual course of professional practice. Dr. Becker also pleaded guilty to money laundering. Becker faces maximum terms of imprisonment of five years on the drug conspiracy charge and ten years on the money laundering charge.

According to the terms of the plea agreement, Becker agreed to forfeit $470,400 in money and property representing the illegal narcotics proceeds he earned as a result of his involvement as a physician at All Pain Management in Dania Beach. As set forth in the plea agreement, between February 16 and September 17, 2010, Becker was employed as a clinic doctor at All Pain Management which, at the time, was owned by co-conspirators Vincent Colangelo and several other unnamed individuals. Colangelo pleaded guilty to narcotics, money laundering and federal income tax offenses on April 2, 2012, arising from his ownership of six pill mill clinics and a pharmacy in Broward and Miami-Dade Counties. According to a review of medical records, while at All Pain Management, Becker prescribed 932,259 oxycodone, 30 milligram pills during the course of 4,821 patient visits and more than 98% of Becker’s patients received prescriptions for oxycodone. Becker also laundered approximately $24,142 in illegal narcotics proceeds.

Today’s case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.

Mr. Ferrer thanked the DEA, IRS-CI and the Broward Sheriff’s Office, as well as the many other state and local agencies for their investigative work. This case is being prosecuted by Assistant U.S. Attorneys Scott Behnke and Roger Powell and Tax Division Trial Attorney Greg Tortella.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

The former medical director at defunct health provider Health Care Solutions Network (HCSN) and six therapists were arrested today, accused of conspiring to fraudulently bill Medicare and Florida Medicaid more than $63 million.

U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Special Agent in Charge Michael B. Steinbach of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office, made the announcement after the indictment was unsealed following the arrests.

The former HCSN medical director, Roger Rousseau, 71, of Miami, was indicted on July 11, 2013, and charged with conspiracy to commit health care fraud and two counts of health care fraud. In addition, six therapists from Miami – Doris Crabtree, 61; Angela Salafia, 65; Liliana Marks, 46; Ruben Busquets, 49; Alina Fonts, 47; and Blanca Ruiz, 59 – were also charged in the same indictment with conspiracy to commit health care fraud. Fonts was also charged with two counts of health care fraud, and Crabtree, Salafia, Marks and Busquets were each charged with two counts of making false statements related to health care matters. The indictment also seeks forfeiture of proceeds from the alleged healthcare fraud offenses.

According to the indictment, HCSN purported to provide intensive mental health treatment to Medicare and Medicaid beneficiaries in Miami and Hendersonville, N.C., from approximately 2004 through 2011 for purported mental health services that were not medically necessary and often never provided. The indictment also alleges that in Miami, HCSN paid kickbacks to assisted living facility owners and operators who, in exchange, referred beneficiaries to HCSN. In total, HCSN is alleged to have fraudulently billed Medicare and Medicaid approximately $63.7 million, from which HCSN allegedly received payments totaling approximately $28 million.

Rousseau served as the medical director for HCSN in Florida, and the indictment alleges that he routinely signed what he knew to be fabricated and altered medical records without ever reviewing the materials, and, in most instances, without ever meeting with the patient. The indictment also alleges that Crabtree, Salafia, Marks, Busquets, Fonts and Ruiz fabricated HCSN medical records to support false and fraudulent claims for partial hospitalization program services that were not medically necessary and were not provided.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. The case is being prosecuted by Fraud Section Trial Attorney Allan J. Medina.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Harvey Zitron, of Boca Raton, was convicted by a federal grand jury on all ten counts charged in the indictment.

According to the indictment, Zitron was charged with filing fraudulent IRS United States Individual Income Tax Returns, Forms 1040, for 2004 and 2005 (Counts 1 and 2), and Amended Individual Income Tax Returns, Forms 1040X for 2003, 2004 and 2005 (Counts 3-5), all in violation of Title 26, United States Code, Section 7206(1). In addition, he was charged with three counts of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2) (Counts 6, 8 and 10), and two counts of aggravated identity theft, in violation of Title 18 United States Code, Section 1028A(a)(1) (Counts 7 and 9). The trial was held before the Honorable Robert N. Scola, U.S. District Court Judge. Sentencing is set for October 8, 2013.

According to the evidence presented at trial, Zitron used companies to write checks to friends or acquaintances who cashed the checks and returned the cash to Zitron. Zitron then failed to declare this income on his tax returns. He also opened credit card accounts in the names of his son and ex-wife, and charged more than $1,000 in a single year on those accounts without their authorization or knowledge.

Zitron faces a maximum sentence of three years for each count of tax fraud, ten years for each count of access device fraud, and two consecutive years for each count of aggravated identity theft.

Mr. Ferrer commended the investigative efforts of the IRS-CI and the FBI. This case was prosecuted by Assistant U.S. Attorney Harry Wallace and Department of Justice Tax Division Attorney Kevin J. Lombardi.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Tom Caul, Acting Special Agent in Charge, Social Security Administration, Office of Inspector General (SSA-OIG), and Steven Steinberg, Chief, Aventura Police Department, announced today that Natoya Mashea Handy, 30, of Miami, was sentenced for her participation in a tax refund scheme using stolen identities to convert government monies for her own use. Handy was sentenced to 51 months in prison to be followed by two years of supervised release. A restitution hearing was also ordered but will be determined at a later hearing.

On April 12, 2013, Handy was convicted by a jury of one count of access device fraud in violation of Title 18, United States Code, Section 1029(a)(3), and five counts of aggravated identity theft in violation of Title 18, United States Code, Section 1028A, in connection with an identity theft tax refund fraud scheme.

According to testimony and evidence presented at trial, on or about April 5, 2012, the defendant was found with at least fifteen (15) social security numbers, names, and dates of birth belonging to persons who were formerly or presently incarcerated by the state of Florida. The trial testimony and evidence further showed that fraudulent tax returns were filed for tax year 2011 for seventeen (17) of the individuals whose social security numbers the defendant possessed. Each of these fraudulent tax returns fraudulently claimed entitlement to a refund, amounting to thousands of dollars in fraud.

Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to the City of Aventura Police Department, the City of Miami Gardens Police Department, and IRS-CI, with assistance from the SSA-OIG. The case is being prosecuted by Assistant U.S. Attorneys Alexandra Hui and Amanda Perwin.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Craig Stanley Toll, 64, of Pembroke Pines, was convicted today by a federal jury. Specifically, Toll was convicted of two counts of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349; three counts of substantive wire fraud, in violation of Title 18, United States Code, Section 1343; one count of major fraud against the United States, in violation of Title 18, United States Code, Section 1031; one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1957; and three counts of making false statements to a United States government agency, in violation of Title 18, United States Code, Section 1001. Toll was acquitted of 12 counts of wire fraud.

According to allegations in the indictment and the evidence presented at trial, Innovida Holdings, LLC, was a Florida limited liability company located in Miami Beach. Innovida manufactured fiber composite panels for the construction industry for use in the construction of residential, commercial, governmental, and other structures without the need for cement, steel or wood. Innovida purported to be a rapidly expanding and financially strong international operation with facilities in the United States, the United Arab Emirates, Germany, Angola, Tanzania, and other countries. Co-defendant Claudio Osorio was the president, owner and majority shareholder of Innovida. Defendant Craig Toll, a licensed CPA, was the company’s Chief Financial Officer.

According to the indictment and as shown at trial, between March 2007 and March 2011, Osorio, Toll and others offered and sold shareholder interests and joint-venture partnerships in Innovida to select individuals and groups, raising more than $40,000,000 from approximately ten (10) investors and investment groups located in the United States and other countries. Osorio, Toll and others solicited and recruited investors by making materially false representations and concealing and omitting material facts regarding, among other things, the profitability of the company, the rates of return on investment funds, the use of investors’ funds and the existence of a pending lucrative contract with a third-party entity. Osorio received moneys from investors based on these misrepresentations. In addition, Osorio used investor monies for his and his co-conspirators’ personal benefit and to maintain and further the fraud scheme.

The indictment further alleges that between January 2010 and March 2011, Osorio, Toll and others applied for and obtained a $10,000,000 loan from the Overseas Private Investment Corporation (“OPIC”), a U.S. government agency that promotes U.S. government investments abroad to foster the development and growth of free markets. The purported purpose of the loan was to build a manufacturing facility and 500 homes in Haiti for displaced families in the aftermath of the January 2010 earthquake. The indictment alleges and the jury found that Osorio, Toll and others made materially false representations and omissions concerning, among other things, the profitability of Innovida, the purported use of the loan proceeds, an equity contribution to be made by Innovida, and contracts that Innovida purportedly had obtained with third-party vendors. Osorio used the OPIC loan proceeds to repay investors and for his and his co-conspirators’ personal benefit and to further the fraud scheme.

Codefendant Claudio Osorio pled guilty earlier to two counts of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.

Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer also commended the efforts of the SEC-Miami Regional Office, for their cooperation and assistance during this investigation. The case was prosecuted by Assistant U.S. Attorneys Lois Foster-Steers and Kimberly Selmore.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Steve Linick, Inspector General of the Federal Housing Finance Agency Office of Inspector General, announced the filing of a federal Information charging Patrick J. Mansell, 68, of Boca Raton, FL, Vice President of Coastal States Mortgage Corporation (Coastal) with conspiracy to commit wire fraud to defraud government sponsored entities, Fannie Mae and Freddie Mac.

According to the Information, from April 2007 through February 2012, in the Southern District of Florida, Coastal was a licensed mortgage brokerage whose primary business activity was the selling and servicing of mortgage loans for Freddie Mac and Fannie Mae. As alleged in the Information, Coastal processed payments and payoffs received from borrowers on behalf of Freddie Mac and Fannie Mae, according to the contractual agreements entered into between them. As further alleged in the Information, Coastal failed to remit some of the mortgage loan payoffs that it received from borrowers to Freddie Mac and Fannie Mae, resulting in a loss to Freddie Mac and Fannie Mae. This misappropriation was concealed by the regular submission of false financial reports by Coastal, via an internet portal, to Freddie Mac and Fannie Mae. If convicted, the defendant faces a statutory maximum penalty of five years’ incarceration, followed by a three year period of supervised release, a fine of up to $250,000 and restitution.

Mr. Ferrer commended the investigative efforts of the Federal Housing Finance Agency Office of the Inspector General. The case is being prosecuted by Assistant U.S. Attorney Thomas P. Lanigan.

An information is only an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s, Homeland Security Investigations (ICE-HSI) and Scott Israel, Broward Sheriff’s Office, announce the indictment of Thomas Edler, 48, of Weston, on child pornography charges. Edler has appeared before U.S. Magistrate Judge Patrick M. Hunt in Fort Lauderdale and was detained pending trial.

The four-count indictment charges Edler with three counts of production of child pornography and one count of possession of child pornography, in violation of Title 18, United States Code, Sections 2251(a) and 2252(a). If convicted, Edler faces a mandatory minimum sentence of 15 years in prison and a maximum sentence of up 30 years. Edler would also be required to register as a sex offender in any jurisdiction in which he lives, works or attends school.

According to documents filed with the court, in February 2013, the National Center for Missing and Exploited Children (NCMEC) requested the assistance of the South Florida Internet Crimes against Children (ICAC) Task Force to help identify a child who appeared in numerous images of child pornography that had been recovered across the county. These images had been previously identified and categorized by NCMEC as the “Dave” series. During the investigation that followed, detectives assigned to the South Florida ICAC Task Force determined that the images in the “Dave” series were taken at Edler’s Weston residence.

On April 9, 2013, law enforcement executed a federal search warrant at Edler’s residence and seized several items of electronic media. A forensic analysis revealed numerous images of children under the age of 12 in sexually suggestive poses. These images were taken with a camera belonging to Edler. Subsequent forensic investigation revealed that a camera belonging to Edler was also used to photograph a series of child pornography images categorized by NCMEC as the “Lil Charlie” series and at least one additional child who is still unidentified.

Mr. Ferrer commended the investigative efforts of ICE-HSI and the South Florida ICAC. The case is being prosecuted by Assistant U.S. Attorneys Corey Steinberg and Francis Viamontes.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, Preet Bharara, Loretta E. Lynch – the United States Attorneys for the Southern District of Florida (SDFL), Southern District of New York (SDNY), and Eastern District of New York (EDNY), respectively – Michele M. Leonhart, Administrator of the U.S. Drug Enforcement Administration (DEA), James Dinkins, Executive Assistant Director of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Raymond W. Kelly, the Police Commissioner of the City of New York (NYPD), announced today the extradition of Daniel Barrera Barrera, also known as “Loco,” a citizen of Colombia, to the U.S. on charges that for decades he manufactured hundreds of tons of cocaine annually in Colombia and trafficked it to various parts of the world, including the U.S., and laundered tens of millions of dollars in proceeds from that narcotics trafficking activity. Barrera arrived in the Southern District of New York this afternoon. He will be presented and arraigned in the Southern District of New York before U.S. District Judge Alvin K. Hellerstein on July 10, 2013, at 11:00 a.m., and in the Eastern District of New York before U.S. District Judge I. Leo Glasser on July 11, 2013, at 3:30 p.m. Following his prosecution in New York, Barrera will be presented and arraigned in the Southern District of Florida.

In March 2010, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated Barrera as a “Special Designated Narcotics Trafficker,” pursuant to the Foreign Narcotics Kingpin Designation Act. Barrera was arrested in Venezuela on September 18, 2012. Thereafter, he was sent to Colombia, from where the U.S. sought Barrera’s extradition. The extradition of Barrera is the result of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by DEA and HSI. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

U.S. Attorney Wifredo A. Ferrer said, “Daniel “Loco” Barrera Barrera’s arrest and extradition is the direct result of strong international cooperation with Colombian authorities. It also reflects the hard work and perseverance of our law enforcement partners – both at home and abroad – whose dedicated efforts led to the capture of one of the world’s most notorious drug traffickers. While Barrera evaded capture for several years, the time has finally come for him to answer for his crimes and face justice. As this case confirms, the United States will never tire in its pursuit of those who profit from the illegal drug trade.”

U.S. Attorney Preet Bharara said, “For more than a decade, as alleged, Daniel Barrera Barrera has operated at the center of a truly evil web spun between his narcotics trafficking organization and two violent and sworn enemy terrorist organizations – the AUC and the FARC. By purchasing raw cocaine paste from the FARC, which he processed in laboratories in areas controlled by the AUC, to whom he paid fees, Barrera’s behemoth cocaine organization reached an annual production rate of upwards of 400 tons, enriching itself and the two terrorist organizations it paid off, as the indictment describes. This was truly cocaine with blood in its background. With his arrival in the U.S., Barrera must now answer for his alleged crimes, and we will continue to work with our law enforcement partners, both here and abroad, to prosecute him and other alleged titans of the transnational drug trade.”

U.S. Attorney Loretta E. Lynch said, “As alleged in the three indictments on which he was extradited, Daniel “Loco” Barrera Barrera was the kingpin of a stunningly prolific Colombian drug cartel, which flooded the globe with its deadly product. Barrera also allegedly wrought destruction closer to home, working with not one but two terrorist organizations responsible for decades of death and destruction in Colombia, all to ensure his deadly business ran smoothly. His extradition to the United States marks the fall of the last don of an organization marked by its worldwide reach, ruthless criminality, and staggering profits. This investigation exemplifies the global cooperation necessary to combat international drug traffickers and our commitment to dismantle these criminal organizations from the highest levels down.”

DEA Administrator Michele M. Leonhart said, “Daniel Barrera allegedly worked with both the FARC and AUC terrorist organizations in operating his drug trafficking syndicate, becoming one of the most prolific drug traffickers of the past twenty years. Charged with manufacturing upwards of 400 tons of cocaine a year, Barrera’s alleged impact on the global trade of cocaine was immense – but so was DEA’s response. Thanks to the cooperative efforts of our Colombian and U.S. law enforcement counterparts, Barrera’s criminal career is over as he now faces charges that may bring him a life behind bars.”

ICE HSI Executive Assistant Director James Dinkins said, “Mr. Barrera and his co- conspirators stand accused of running one of the largest cocaine trafficking operations in history. His extradition to the United States represents a major victory for the rule of law. While Mr. Barrera may have thought he was safe hiding and conducting his illicit activities in South American countries, an international team of law enforcement agencies worked tirelessly and cooperatively towards bringing him to justice.”

As alleged in the Superseding Indictment filed in the Southern District of New York (S107 Cr. 862 (AKH)), the Superseding Indictment filed in the Eastern District of New York (S2 10 Cr. 288 (ILG)), the Superseding Indictment filed in the Southern District of Florida (S1 10 Cr. 20587 (DLG)), other documents filed in these cases, and information in the public record:

Since 1998, Barrera has run a cocaine manufacturing and trafficking syndicate which each month processed approximately 30,000 kilograms of raw cocaine base into about the same amount of cocaine powder – in total, up to approximately 400 tons of cocaine annually.

Barrera purchased the raw cocaine base or paste from the designated terrorist group Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia, or the “FARC”), which has been the world’s largest supplier of cocaine and which has engaged in bombings, massacres, kidnappings, and other acts of violence within Colombia.

Barrera converted the raw cocaine into powder at laboratories he owned and operated in an area of Colombia controlled by the since demobilized terrorist group, Autodefensas Unidas de Colombia (the “AUC”). For years, the AUC’s main political objective was to defeat the FARC in armed conflict, and it financed its terrorist activities through the proceeds of cocaine trafficking in AUC-controlled regions of Colombia.

Although Barrera purchased raw materials for cocaine production from the FARC, he was able to maintain his network of cocaine-processing laboratories in AUC-controlled territory, in part by paying monthly “taxes” to the AUC. The fees Barrera paid to the AUC also allowed him to safely move the processed cocaine through and out of Colombia, into locations on four continents – including into the U.S.

Barrera reaped tens of millions of dollars of profits from cocaine trafficking, which the laundered through illicit means.

The FARC and the AUC are both designated by the U.S. Department of State as Foreign Terrorist Organizations.

Barrera, 44, is charged in the Southern District of New York with one count of conspiring to distribute and manufacture cocaine knowing it would be unlawfully imported into the U.S. On that count, Barrera faces a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison.

Barrera is charged in the Eastern District of New York with one count of conspiracy to launder money. On that count, Barrera faces a maximum sentence of 20 years in prison.

Barrera is charged in the Southern District of Florida with one count of conspiring to import cocaine into the U.S. and one count of conspiring to manufacture and distribute cocaine knowing that it would be unlawfully imported into the U.S. On those counts, Barrera faces a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison.

Mr. Ferrer, Mr. Bharara, and Ms. Lynch praised the outstanding work of the OCDETF, working in cooperation with HSI New York’s El Dorado Task Force, the DEA’s Bogota Country Office, the DEA’s Caracas Country Office, the DEA’s Miami Field Division, the DEA’s New York Drug Enforcement Task Force – which is comprised of agents and officers of the DEA, the New York City Police Department, and the New York State Police – as well as HSI Bogota. Mr. Ferrer, Mr. Bharara, and Ms. Lynch, also thanked the Colombian National Police, the U.S. Marshals Service, and the U.S. Department of Justice’s Office of International Affairs for their ongoing assistance.

The Southern District of Florida case is being handled by that office’s Narcotics Unit. Assistant United States Attorney Adam Fels is in charge of the prosecution. The Southern District of New York case is being handled by that office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Jenna Dabbs, Benjamin Naftalis, and Andrea Surratt are in charge of the prosecution. The Eastern District of New York case is being handled by that office’s International Narcotics Strike Force. Assistant United States Attorneys Justin Lerer, Soumya Dayananda, and Amir Toossi are in charge of the prosecution.

The charges and allegations contained in the Indictments are merely accusations and the defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Defendant Filed Approximately 400 Fraudulent Tax Returns Seeking Refunds

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, and Rafael P. Hernandez, Jr., Chief, North Miami Beach Police Department, announced that Charlton Escarmant, 29, of Miami, was sentenced yesterday on identity theft tax refund charges. At the sentencing hearing, U.S. District Judge Joan A. Lenard sentenced Escarmant to 94 months in prison, to be followed by 3 year of supervised release. A restitution hearing is scheduled for August 26, 2013 at 3:00 PM.

Escarmant was charged with co-defendant Arthy Icart for their participation in an identity theft tax refund scheme. On March 19, 2013, a jury convicted defendant Escarmant of one count of conspiracy to submit false claims to the Internal Revenue Service, one count of access device fraud, and two counts of aggravated identity theft. According to testimony and evidence presented at trial, some of the personal identification information used by Escarmant and Icart to file fraudulent tax returns was stolen from Tallahassee Community College’s (TCC) financial aid office. In fact, more than 3,200 names found on a computer in Escarmant’s possession came from TCC.

According to the evidence presented during trial, Escarmant filed tax returns using the stolen identification information and also in his own name and created false W-2 forms with fictitious employer information. Escarmant’s W-2 form falsely claimed that he was a veterinarian at Central Broward Animal Hospital. In fact, however, Escarmant never worked at the Central Broward Animal Hospital.

At the time of their arrest, Escarmant and Icart unlawfully possessed approximately 22 pre-paid tax debit cards in the names of other individuals. In total, during the course of the scheme, the defendant and his co-conspirator submitted approximately 400 fraudulent tax returns to the Internal Revenue Service, seeking more than $3.3 million in tax refunds.

Co-conspirator Arthy Icart was sentenced on April 5, 2013, after having pled guilty to charges of conspiracy to file fraudulent claims, access device fraud, and aggravated ID theft. U.S. District Judge Lenard sentenced Icart to a total of 70 months’ imprisonment followed by one year of supervised release. In addition, Icart was ordered to pay restitution of $1,387,774.

Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to IRS-CI and the North Miami Beach Police Department. Mr. Ferrer also thanked the Tallahassee Community College for their cooperation during this investigation. The case is being prosecuted by Assistant U.S. Attorneys Michael B. Nadler and Elina Rubin-Smith.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

WASHINGTON – Following a comprehensive investigation, the Justice Department today released its letter of findings determining that the city of Miami Police Department (MPD) has engaged in a pattern or practice of excessive use of force through officer-involved shootings in violation of the Fourth Amendment of the Constitution. Between 2008 and 2011, officers intentionally shot at individuals on 33 separate occasions, three of which MPD itself found unjustified. The department found that a number of MPD practices, including deficient tactics, improper actions by specialized units, as well as egregious delays and substantive deficiencies in deadly force investigations, contributed to the pattern or practice of excessive force.

The department's findings noted that MPD did not provide close supervision or hold individuals accountable for their actions by failing to complete thorough, objective and timely investigations of officer-involved shootings. For a significant number of the shootings, including one that occurred in 2008, MPD has not reached a conclusion internally as to whether or not the officer’s firearm discharge was lawful and within policy. The Justice Department found that MPD’s failure to complete timely and thorough investigations of officer-involved shootings undermined accountability and exposed MPD officers and the community to unreasonable risks that might have been addressed through prompt corrective action, noting that several investigations remained open for more than three years. Significantly, a small number of officers were involved in a disproportionate number of shootings, while the investigations into their shootings continued to be egregiously delayed. The findings released today mark the conclusion of the department’s second investigation of MPD in recent years. The department noted that similar deficiencies were found in its previous investigation that began in 2002.

“Although MPD appeared to correct course after our first investigation, many of the systemic problems that we previously identified returned to root deeply in MPD’s practices. Our findings should serve as a catalyst to help MPD and the city of Miami restore the community’s confidence in fair, effective and accountable law enforcement,” said Roy L. Austin Jr, Deputy Assistant Attorney General for the Civil Rights Division. “We look forward to collaborating with Chief Orosa, Mayor Regalado and the people of Miami to create and implement a comprehensive, court-enforceable plan to ensure sustainable reform.”

Wifredo Ferrer, U.S. Attorney for the Southern District of Florida stated, “In November 2011, the Civil Rights Division of the Department of Justice began a formal investigation to determine whether the city of Miami Police Department had engaged in a pattern or practice of excessive use of deadly force by firearms. After a careful and thorough review of the facts and circumstances surrounding a series of police-involved shootings, the Civil Rights Division found that the police department in fact engaged in such prohibited conduct. Today, we are releasing the detailed findings of the investigation, with the dual goal of shining a light on past wrongs and – more importantly – setting a clear course for the future that will assure the residents of the city of Miami that this type of behavior will not be repeated in our city. We commend Chief Orosa for recognizing some of the problems the Civil Rights Division found and for pursuing initiatives to address them. We are confident that the findings and recommendations will be heeded, and will result in institutional long-term reform that will make our city and police force better than ever.”

The department’s investigation involved an in-depth review of thousands of documents, including written policies and procedures, training materials, and internal reports, photographs, video and audio recordings and investigative files. The review benefited from productive dialogue with MPD supervisors and officers, city of Miami officials, the Office of the State Attorney, the Civilian Investigative Panel, and members of the Miami community. The Justice Department provided feedback to MPD during the investigation and commends Chief Manuel Orosa for taking steps to address some of the deficiencies identified since the investigation began.

The investigation was conducted by the Special Litigation Section of the Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the Southern District of Florida, with the assistance of an experienced law enforcement expert, pursuant to the pattern or practice provision of the Violent Crime Control and Law Enforcement Act of 1994. The findings letter will be available on the department’s website at http://www.justice.gov/crt/about/spl/. The department welcomes comments or concerns from the community via email at community.miamipd@usdoj.gov.

Attachment:

Miami PD Findings Letter (PDF)

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Mark R. Trouville, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Miami Field Division, announced the filing of one count indictment charging four defendants for their participation in an international money laundering conspiracy in which they laundered millions of dollars for transnational drug trafficking organizations.

Charged in the indictment were Dilleman Hernando Solorzano-Lozano, 46, Isaac Perez Guberek Ravinovicz, 77, Henry Guberek Grimberg, 55, and Johanna Patricia Ceballos-Bueno, 27, all Colombian nationals. More specifically, the defendants are charged with conspiracy to launder the illegal proceeds from the manufacture, importation, sale, and distribution of a controlled substance. If convicted, the defendants face a possible maximum statutory sentence of up to 20 years in prison.

U.S. Attorney Wifredo A. Ferrer stated, “Money launderers provide a critical service to narco-traffickers, helping them to wash, move, and hide their drug money. Today’s indictment, however, sends a message to those who hide behind seemingly legitimate businesses to launder drug money. The reach of American justice is as long as it is strong. With the help of our international law enforcement partners, we will find you and you will be brought to justice.”

DEA Special Agent in Charge Mark R. Trouville stated, “Drug traffickers' main motivation to enter the illegal drug trade is making money, and they will go to any length to hide and protect their drug profits. These bad actors often depend on international businesses to facilitate the illegal movement of their drug profits. But be on notice: whether you are a successful businessman or a secretary, if you assist drug traffickers to launder their funds, you will face the same justice.”

In a separate action also announced today, the U.S. Department of the Treasury announced the designation of Isaac Perez Guberek Ravinovicz, his son, Henry Guberek Grimberg, and Johanna Patricia Ceballos-Bueno, as well as 29 other individuals and entities, including companies located in Colombia, Panama, and Israel, as Specially Designated Narcotics Traffickers (SDNTs). This action, taken pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act), generally prohibits U.S. persons from conducting financial or commercial transactions with these entities and individuals, and freezes any assets they may have under U.S. jurisdiction. Since June, 2001, the Treasury Department has designated more than 1,200 individuals and entities linked to 103 drug kingpins.

Mr. Ferrer commended the investigative efforts of the DEA and the U.S. Treasury Department. This case is being prosecuted by Assistant U.S. Attorney Michael B. Nadler.

An indictment is only an accusation and the defendants are presumed innocent until proven guilty.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

A former supervisor at defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced today in Miami to serve 10 years in prison for her central role in a fraud scheme that resulted in more than $63 million in fraudulent claims to Medicare and Florida Medicaid.

The sentence was announced by U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Acting Assistant Attorney General Mythili Raman of the Justice Department's Criminal Division; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

Wondera Eason, 51, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to her prison term, Eason was sentenced to serve three years of supervised release and ordered to pay $14,985,876 in restitution.

On April 25, 2013, a federal jury found Eason guilty of conspiracy to commit health care fraud.

Eason was employed as the director of medical records at HCSN’s partial hospitalization program (PHP). A PHP is a form of intensive treatment for severe mental illness. In Florida, HCSN operated community mental health centers at two locations. After stealing millions from Medicare and Medicaid in Florida, HCSN’s owner, Armando Gonzalez, expanded the scheme to North Carolina, opening a third HCSN location in Hendersonville, N.C.

Evidence at trial showed that at all three locations, Eason, a certified medical records technician, oversaw the alteration, fabrication and forgery of thousands of documents that purported to support the fraudulent claims HCSN submitted to Medicare and Medicaid. Many of these medical records were created weeks or months after the patients were admitted to HCSN facilities in Florida for purported PHP treatment and were utilized to support false and fraudulent billing to government-sponsored health care benefit programs, including Medicare and Medicaid. Eason directed therapists to fabricate documents, and she also forged the signatures of therapists and others on documents that she was in charge of maintaining. Eason interacted with Medicare and Medicaid auditors, providing them with false and fraudulent documents, while certifying the documents were accurate.

The “therapy” at HCSN oftentimes consisted of nothing more than patients watching Disney movies, playing bingo and having barbeques. Eason directed therapists to remove any references to these recreational activities in the medical records.

According to evidence at trial, Eason was aware that HCSN in Florida paid illegal kickbacks to owners and operators of Miami-Dade County assisted living facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid. Eason also knew that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease.

From 2004 through 2011, HCSN billed Medicare and the Medicaid program more than $63 million for purported mental health services.

Fifteen defendants have been charged and have pleaded guilty or been convicted by a jury for their roles in the HCSN health care fraud scheme.

This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina, former Special Trial Attorney William Parente and Deputy Chief Benjamin D. Singer of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

The defendants include a Doctor, a Physician’s Assistant, and Clinic Owners/Managers

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, and Scott Israel, Sheriff, Broward Sheriff’s Office (BSO), announced the unsealing of a federal indictment charging seven defendants for their participation in the illegal dispensing and distribution of oxycodone, among other offenses. The 20-count indictment, filed July 2, 2013, charges defendants Jason Boyd, 43, of Davie, Jason Rodriguez, 36, of Fort Lauderdale, Vijay Chowdary, M.D., 69 of Boca Raton, Harish Chowdary, P.A., 64, of Fort Lauderdale, Amanda Bozer, 34, of Fort Lauderdale, Nestor Merces, Jr., 35, of New York, and Hector Bruno, 35, of Pembroke Pines with various crimes, including conspiracy to distribute, dispense and possess controlled substances, maintaining drug-involved premises, and money laundering. Six of the defendants made their initial appearances in federal court in Fort Lauderdale and Connecticut earlier today. Defendant Hector Bruno remains a fugitive.

Researchers from the Centers for Disease Control and Prevention report that Schedule II prescription painkillers, like oxycodone, cause more drug overdose deaths than cocaine and heroin combined. Oxycodone and other Schedule II drugs have a high potential for abuse and can be crushed and snorted, or dissolved and injected, to get an immediate high. This abuse can lead to addiction, overdose, and sometimes death.

The indictment alleges that from October 2010 to the present, the defendants operated Intracoastal Medical Groups, Inc. (IMG), in Broward County, as a pill mill clinic that offered patients prescriptions for oxycodone and other controlled substances without any legitimate medical purpose and outside the usual course of professional medical practice. According to the charges, individuals, including drug addicts and traffickers, seeking to buy large quantities of oxycodone and other controlled substances would travel from hundreds of miles from other states to obtain prescriptions at the defendants’ clinic. Defendant Jason Boyd operated and financed IMG until the Florida Legislature enacted legislation requiring pain management clinics to be owned by licensed physicians. At that time, ownership of IMG was transferred on paper to a physician and in March 2012, to Dr. Chowdary.

To execute the scheme, IMG employed doctors, like defendant Vijay Chowdary, who agreed to prescribe oxycodone and other controlled substances to patients without regard to medical necessity, with only a cursory physical examination of the patient, and in violation of numerous federal and state laws and DEA regulations regarding the storage and distribution of controlled substances. To accomplish the scheme, the defendants created and used a number of false documents. For example, the defendants used phony Florida identification cards to make it appear that all of IMG’s patients were residing in Florida. The defendants also made and used false MRI reports, and discarded urinalysis results that showed that patients were using cocaine and other drugs, advising the patients to return when their urine was clean. The clinic allowed and encouraged the use of “sponsors,” a practice in pill mills where an individual “sponsors” a group of patients in the clinic and pays all of the expenses associated with clinic visit in return for all or a portion of the pills prescribed.

U.S. Attorney Wifredo A. Ferrer stated, “As this case demonstrates, federal and local law enforcement continue to stand united to tackle the pill mill epidemic that has plagued Broward County and our state. Together, we are making a positive difference, as we continue to bring down these unscrupulous doctors and drug dealers who seek to hide behind a medical license. Pill mill operators be warned: we are not done yet.”

Mark R. Trouville, DEA Special Agent in Charge stated, “This is a text book example of an illegal prescription drug trafficking organization. These rogue doctors and greedy drug dealers tried to make a pill mill look like a legitimate business. The days of profiting from these crimes have come to an end for these seven defendants. The diversion of pharmaceutical drugs remains a priority for the DEA and our law enforcement partners in South Florida. We will stay committed to ridding our communities of those who look to become rich from the diversion of powerful prescription medications.”

“I’m extremely proud of the hard work and dedication our investigators have put into building a solid case against these suspects,” Sheriff Scott Israel said. “This group is made up of drug traffickers passing themselves off as businessmen and medical patients and unscrupulous clinicians pretending to be medical professionals. They did all of this to further their criminal enterprise without concern for the people whose lives they were putting at risk.”

If convicted, the defendants face up to 20 years in prison for conspiracy to distribute, dispense and possess oxycodone; up to 20 years for distributing, dispensing, and aiding and abetting the distribution and dispensing, of oxycodone outside the usual course of professional practice and not for a legitimate medical purpose; and up to 20 years for maintaining a location for the distribution of narcotics. Lastly, defendant Boyd faces up to 20 years on the money laundering charges.

Today’s case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.

Mr. Ferrer commended the DEA and BSO for their hard work on this case. This case is being prosecuted by Assistant U.S. Attorney Julia Vaglienti.

An indictment is only an accusation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Attachment:

Indictment (PDF)

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paula A. Reid, Special Agent in Charge, U.S. Secret Service (USSS), and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced that defendant Fednol Pierre, 34, of West Palm Beach, was sentenced today to 34 months in prison, to be followed by 3 years of supervised release. Pierre was also ordered to pay $83,450.74 in restitution to the victims of his offenses. Pierre previously pled guilty to one count of theft of government money and one count of aggravated identity theft.

According to documents filed in court, on September 29, 2009, Pierre added an individual as a joint account holder to his bank account, without this individual’s knowledge or consent, using this individual’s name, Social Security number, date of birth, and driver’s license number. The following day, Pierre deposited a $22,081 tax refund check from the U.S. Treasury in the name of this individual. In the weeks following this deposit, Pierre withdrew funds from the joint account. On December 3, 2009, Pierre closed the joint account and transferred the remaining funds into his account.

Mr. Ferrer thanked USSS and IRS-CI for their work on the case. The case is being prosecuted by Assistant U.S. Attorney Benjamin C. Coats.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Rick Ramsey, Monroe County Sheriff, announce that on July 1, 2013, U.S. District Judge Jose E. Martinez sentenced William J. Britt, 55, of Key West, Florida, to 18 years in prison, to be followed by a lifetime of supervised release and registration as a sex offender.

On November 8, 2012, law enforcement conducted a traffic stop on Britt’s Ford Econoline van and arrested Britt on a state warrant for possession of child pornography. During a consensual search of the van, law enforcement found a Harrington and Richardson 20 gauge shotgun that was sawed off at both the barrel and the stock. In addition, law enforcement seized numerous computers, hard drives and thumb drives during a consensual search of Britt’s recreational vehicle, located at Naval Air Station, Sigsbee Trailer Park, Key West, Florida. A forensic analysis revealed that the computers and computer-related equipment contained thousands of images and movies containing child pornography, which include minor children engaging in sexually explicit conduct.

On February 14, 2013, Britt was charged in a superseding indictment with possessing child pornography, receiving child pornography, and possessing a firearm not registered to him in the National Firearms Registration and Transfer Record. On April 17, 2013, Britt pled guilty to receiving child pornography and possessing the unregistered firearm.

Mr. Ferrer commends the investigative efforts of the Monroe County Sheriff’s Office, the Key West State Attorney’s Office, HSI, ATF, and FBI for their assistance and their work on this case. The case is being prosecuted by Assistant U.S. Attorneys Elina A. Rubin-Smith and Robert T. Watson.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced that defendant Jorge Alipio Perez Villa pleaded guilty yesterday to one count of healthcare fraud for his participation in a healthcare fraud scheme involving a purported HIV infusion clinic. Sentencing is scheduled for September 9, 2013 before U.S. District Judge Joan A. Lenard.

According to documents filed with the court and statements made during the plea hearing, Perez Villa was the purported owner and operator of an HIV infusion clinic, ABC Physician’s Group, Inc. ABC Physician’s Group, however, did not treat any patients. Rather, the defendant, through his company, fraudulently represented to Medicare that it was administering HIV infusion treatments to patients suffering from HIV. In truth, however, the defendant simply used the stolen Medicare numbers from unwitting Medicare beneficiaries to bill for treatments that were never provided. In this way, between March and September 2006, ABC Physician’s Group submitted approximately $5.3 million in fraudulent claims to Medicare. As a result of those claims, Medicare paid ABC Physician’s Group approximately $616,710. The defendant distributed the fraud proceeds to himself and others.

Mr. Ferrer thanked the FBI and HHS-OIG for their work on the case. This case is being prosecuted by Assistant U.S. Attorney Alicia Shick.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Indictment Alleges that Defendants Operated Fraudulent Companies for Years Despite December 2000 Court Order

Three individuals charged in connection with operating a series of fraudulent business opportunity companies were arrested Friday following their indictment by a federal grand jury in Miami on June 25, 2013, the Justice Department and the U.S. Postal Inspection Service announced today. Mitchell Berman (aka Brian Griffin), of Boca Raton, Fla., Robert Gallo (aka Bobby Pace, Vincent Pastone, Joe Barone, Bobby Marino, Anthony Russo), of Coconut Creek, Fla., and Steven Axelrod (aka Michael Hutton), of Wellington, Fla., were arrested and charged with conspiracy to commit mail fraud and mail fraud. Mitchell Berman was also charged with criminal contempt of court.

The indictment alleges that the defendants operated a series of fraudulent companies that sold coffee display racks business opportunities. Buyers were told they would receive display racks and packets of coffee, as well as assistance in establishing and maintaining a business selling the coffee.

Beginning in August 2000 and continuing through October 2011, the indictment charges that Berman, Gallo, and Axelrod operated a series of five coffee display rack business opportunity companies: Selective Services Business, Best Gourmet Coffee, Cambridge Coffee, Royal Gourmet Coffee and South Beach Coffee. The business opportunities the defendants sold cost a minimum of approximately $10,000. Each company operated for six months to a year, and after one company closed, the next opened.

The indictment alleges that Berman and Gallo ran the companies, while working as salesman together with Axelrod. All three defendants allegedly made numerous false statements to potential purchasers of the business opportunities to induce them to buy. Among the misrepresentations alleged in the indictment are that purchasers would likely earn substantial profits, that prior purchasers of the business opportunities were earning substantial profits, that purchasers would be given lucrative “commercial accounts,” and that the company would provide assistance in establishing and maintaining the business. According to the indictment, purchasers made little to no money on their investments, were unable to find profitable locations or accounts, and were not provided the support promised by defendants. In making misrepresentations to potential purchasers, Berman was violating a December 2000 federal court order barring him from misrepresenting profits, locations, and other aspects of business opportunities.

According to the indictment, once purchasers began filing complaints with the Better Business Bureau or state authorities, the defendants shut down each of their companies in turn, and opened the next one. In order to evade detection, all the defendants allegedly used aliases and gave out false addresses for the company. The indictment alleges that Berman and Gallo also avoided listing their own names on corporate and promotional documents, and instead paid people who did not work at the companies to be titular presidents.

“Business opportunity schemers use deceit to target and victimize hard-working Americans who are seeking opportunities to better provide for themselves and their families,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “We will continue to vigorously pursue these individuals who seek to steal the American Dream from their victims.”

“The Department of Justice is committed to protecting consumers from business opportunity fraud schemes,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “As this indictment demonstrates, we will continue to prosecute individuals who seek to swindle innocent Americans out of their hard-earned money.”

All three defendants were charged with conspiracy to commit mail fraud. In addition, Berman was charged with 8 counts of mail fraud and 9 counts of criminal contempt; Gallo was charged with 8 counts of mail fraud; and Axelrod was charged with 4 counts of mail fraud. If convicted, Berman, Gallo, and Axelrod face a maximum statutory term of 20 years in prison, a possible fine, and mandatory restitution on each conspiracy and mail fraud count. Berman faces a maximum statutory term of up to life in prison, a possible fine, and mandatory restitution on each of the criminal contempt counts.

“Cases like this one illustrate the Postal Inspection Service’s dedication to investigating business opportunity fraud that insidiously targets innocent victims,” said Ronald Verocchio, U.S. Postal Inspector in Charge in Miami.

The charges in the indictment form part of the government’s continued nationwide crackdown on business opportunity fraud.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, please visit www.stopfraud.gov.

Acting Assistant Attorney Stuart Delery commended the investigative efforts of the Postal Inspection Service. The case is being prosecuted by Assistant Director Richard Goldberg and Trial Attorney Cindy Cho of the Consumer Protection Branch of the Civil Division of the Department of Justice.

An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

A federal jury Friday convicted four individuals for their participation in a Medicare fraud scheme involving nearly $70 million in fraudulent billings by Hollywood Pavilion (HP), a mental health care hospital.

Friday’s verdict was announced by U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.

Karen Kallen-Zury, 59, of Lighthouse Point, Fla., and Daisy Miller, 44, of Hollywood, Fla., were each found guilty of one count of conspiracy to commit wire fraud and health care fraud, five substantive counts of wire fraud and two substantive counts of health care fraud. Michele Petrie, 64, of Ft. Lauderdale, Fla., was found guilty of one count of conspiracy to commit wire fraud and health care fraud and three substantive counts of wire fraud. Kallen-Zury, Miller, Petrie and a fourth defendant, Christian Coloma, 49, of Miami Beach, Fla., were also convicted of one count of conspiracy to pay bribes in connection with Medicare, with Kallen-Zury and Coloma also each being convicted on five substantive counts of paying bribes.

“The defendants participated in a massive scheme that attempted to defraud the United States of approximately $70 million by taking advantage of Medicare beneficiaries,” said Acting Assistant Attorney General Raman. “By paying bribes to a network of patient recruiters and falsifying documents, the defendants created the illusion of providing intensive psychiatric care to qualifying patients, when in reality they provided no care of substance. The verdict illustrates the success of the inter-agency Medicare Fraud Strike Force, which is dedicated to stamping out Medicare fraud.”

The defendants were charged in an indictment returned on Oct. 2, 2012. Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through HP, a state-licensed psychiatric hospital located in Hollywood that purportedly provided, among other things, inpatient psychiatric care and intensive outpatient psychiatric care. The defendants paid illegal bribes and kickbacks to patient brokers in order to obtain Medicare beneficiaries as patients at HP who did not qualify for psychiatric treatment. The defendants then submitted claims to Medicare for those patients who were procured through bribes and kickbacks.

Karen Kallen-Zury, the CEO and registered agent of HP, attempted to conceal the payment of bribes and kickbacks by creating false documents to make it appear as if legitimate services were being rendered.

Evidence at trial established that Miller, the clinical director of HP’s inpatient facility, and Petrie, the head of HP’s intensive outpatient program, facilitated the payment of bribes to patient recruiters and oversaw the fraudulent admissions and treatment of unqualified patients.

Trial evidence also demonstrated that Coloma, the director of physical therapy for an entity associated with HP, facilitated the payment of bribes and kickbacks, and he supervised the creation of false documents to conceal the bribery scheme.

From at least 2003 through at least August 2012, HP billed Medicare nearly $70 million for services that were not properly rendered, for patients that did not qualify for the services being billed and for claims for patients who were procured through bribes and kickbacks.

The criminal case is being prosecuted by Trial Attorneys Robert A. Zink, Andrew H. Warren and Anne McNamara of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A, Ferrer, United States Attorney for the Southern District of Florida, Otha Easley, Acting Special Agent in Charge for the National Oceanic and Atmospheric Administration (NOAA), Office of Law Enforcement, Southeast Division, and David G. Pharo, Resident Agent in Charge, U.S. Fish & Wildlife Service (FWS), Office of Law Enforcement, announced the filing of criminal charges against Key Marine, Inc., a Florida corporation with its principal place of business on Grassy Key, Eric P. Pedersen, 51, and Serdar Ercan, 42, both residents of Monroe County, Florida. The single-count Information alleges that the three defendants engaged in a conspiracy to take, harvest, capture, transport, and sell various species of marine wildlife harvested from the Florida Keys National Marine Sanctuary (FKNMS) and State waters, for commercial sale and distribution in interstate and foreign commerce to their financial gain, in violation of the laws and regulations of the State of Florida, and the federal Lacey Act, Title 16, United States Code, Sections 3372(a)(1),(a)(2)(A), and (4), and 3373(d)(1), all in violation of Title 18, United States Code, Section 371. Initial court appearances on the charges have not yet been set.

The case has been assigned to U.S. District Judge Jose E. Martinez. If convicted on the charge, Key Marine, Inc. faces a possible fine of $500,000 or twice the gross pecuniary gain or loss arising from the relevant conduct. Defendants Pedersen and Ercan each face a statutory maximum sentence of up to five years in prison.

According to the Information, from October 2010 through February 2011, the defendants engaged in the day to day business of collecting, exporting, and selling in interstate and foreign commerce various species of marine life, including Live Rock and attached invertebrates, specifically Ricordia florida, sea fans (Gorgonia species); bonnethead sharks (Sphyma tiburo); lemon sharks (Negaprion brevirostris); and nurse sharks (Ginglymostoma cirratum), with market values in excess of $350.00, knowing that the marine life was taken and intended to be sold in violation of the laws and regulations of the State of Florida. The Information further charges that the defendants exceeded the legal limit on the harvest of Ricordia florida as part of their illicit harvesting activities.

Pursuant to the Florida Keys National Marine Sanctuary and Protection Act and the National Marine Sanctuary Act, the National Oceanic & Atmospheric Administration issued final regulations in January 1997 to govern the conduct of activities within the sanctuary. Title 15, Code of Federal Regulations, Section 922.163(a)(2) prohibits the removal of, injury to, or possession of coral or live rock. Section 922.163(a)(2)(I) prohibits moving, removing, taking, harvesting, damaging, disturbing, breaking, cutting, or otherwise injuring any living or dead coral or coral formation, or attempting any of these activities.

Florida Administrative Code, Section 68B-42.008, prohibits the harvest of live rock. Florida Statue 370.07 requires that a person who sells salt water marine related wildlife such as Ricordia florida, to hold a State wholesale and retail license. The federal Lacey Act, among other things, makes it unlawful for any person to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce, any fish or wildlife, taken, possessed, transported, or sold in violation of any law or regulation of any State. 16 U.S.C. §3372(a)(2)(A). According to the allegations in this case, the defendants were not authorized by any competent authority to harvest or attempt to harvest any Live Rock from the FKNMS or State waters during the time period relevant to this Information, nor did they hold the marine-related wholesale and retail permits required by Florida Statute 370.07.

Mr. Ferrer commended the investigative efforts of the Special Agents of NOAA-OLE and FWS-OLE in this case. The case is being prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.

An Information is only an accusation and a defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Allison C. Lerner, Inspector General, National Science Foundation (NSF), and Ronald Verrochio, Postal Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, announced that Alexander Lorin Davis, 40, of Pinckney, Michigan, was sentenced yesterday in federal District Court in West Palm Beach on charges related to falsely making and forging the seal of the National Science Foundation (NSF), an agency of the United States, and mail fraud in connection with the marketing by internet to the public of environmental test kits that were not in fact analyzed by qualified laboratories as asserted in advertisements and literature accompanying the kits, in violation of Title 18, United States Code, Sections 506(a)(1), 1341, 4, and (2).

U.S. District Judge Kenneth Ryskamp, who had previously accepted guilty pleas in this matter from Alexander Davis and his spouse, Dawn Marie Davis, 46, also of Pinckney, sentenced Alexander Davis to 15 months in prison, to be followed by three years of supervised release. Judge Ryskamp also ordered Alexander Davis to pay $50,264.53 in restitution to 154 victims of the fraudulent scheme. Dawn Davis, who previously pled guilty to a charge of misprision of a felony for failing to alert appropriate authorities to the criminal conduct, was sentenced by Judge Ryskamp to two years of probation and was ordered to pay restitution in the amount of $9,596.09 after a hearing held on April 25, 2013.

According to court records, including Joint Factual Statements submitted to the Court and statements made during the sentencing hearing, from May 2011 through November 2012, Alexander Davis owned and operated Davis Test Kits (DTK). DTK was in the business of marketing test kits for use in homes and businesses to detect the presence of various environmental pollutants and hazards, such as molds, asbestos, radon, and lead. To promote business, the DTK website displayed the forged and counterfeited seal of the NSF. As part of the scheme, Alexander Davis also made materially false representations and promises on the website, claiming that, upon return of the test kit by the customer, DTK would cause the kit to be submitted for testing by individuals from an established, accredited laboratory.

In fact, however, DTK did not operate or employ testing laboratories certified as represented on the website and many test kits returned to DTK were never submitted for testing by an accredited laboratory. To perpetuate the fraud, the defendants would mail customers whose test kits had not been tested results from other laboratory tests. Some, customers were induced to pay additional amounts, in some instances exceeding thousands of dollars, based on false assertions by the defendants that additional testing was necessary.

During the same time, Dawn Davis was aware that her husband was using the seal of the NSF on the internet website of DTK and knew the company was marketing the test kits. She was also aware that DTK did not submit all the customer test kits received through the mail to accredited laboratories for analysis as DTK represented on its website and in written materials provided to the customers. Despite her knowledge, Dawn Davis concealed the fact that DTK was selling its testing services without any affiliation or connection to NSF, and was failing to provide the purchased testing services to some customers.

The National Science Foundation is an independent federal agency established by Congress in 1950 to promote the progress of science and to advance the national health, prosperity, and welfare. The agency meets this mission by funding approximately 20% of all federally supported basic research conducted by America’s colleges and universities with an annual budget of approximately $6.9 billion. The National Science Foundation neither tests consumer products, nor audits and inspects private laboratories.

Mr. Ferrer commended the investigative efforts of the National Science Foundation Office of Inspector General and the U. S. Postal Inspection Service. The criminal case is being prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

92 defendants have been charged to date in Operation Sledgehammer I-VI

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Atwater, Florida Chief Financial Officer, and Dave Aronberg, State Attorney, Office of the State Attorney for Palm Beach County, announced that defendants Luis Ivan Hernandez, 40, and Maria Testa Baceiro, a/k/a “Maria Testa,” 29, both of Miami, and Olinda Rodriguez, 39, of West Palm Beach, pled guilty today for their participation in a staged automobile accident scheme. Defendant Iris Roca, 41, of Davie, pled guilty on June 26, 2013 for her role in the scheme. Sentencing is set for September 30, 2013 before Judge Marra starting at 9:00 a.m.

Clinic owners Hernandez and Baceiro each pled guilty to one count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1349; 27 counts of mail fraud, in violation of Title 18, United States Code, Section 1341; and one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). Hernandez also pled guilty to 21 counts of money laundering, in violation of Title 18, United States Code, Section 1956(a)(1). Baceiro pled guilty to 20 counts of money laundering, in violation of Title 18, United States Code, Section 1956(a)(1).

Licensed massage therapists Rodriguez and Roca each pled guilty to one count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1349. These defendants were charged in separate Informations for their participation in the staged accident fraud schemes.

The defendants face the following possible maximum statutory sentences: 20 years in prison for each count of conspiracy to commit mail fraud, substantive mail fraud, conspiracy to commit money laundering, and substantive money laundering. Restitution to the victims of the offenses is mandatory.

According to court documents, between approximately October 2006 and December 2012, the defendants staged automobile accidents and thereafter caused the submission of false insurance claims through chiropractic clinics they controlled. To execute the scheme, the true owners of the chiropractic clinics recruited individuals, who had the medical or chiropractic licenses required by the state to open a clinic, to act as “nominee owners” of the clinics. The defendants also recruited individuals, whom they referred to as “Perro” and “Perra,” to participate in the accidents, and others to help the clinics launder the insurance proceeds. The defendants also hired complicit chiropractors and therapists who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Thereafter, complicit clinic employees prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services. Twenty-one clinics participated in this scheme.

Starting with Operation Sledgehammer I in June 2011 and including the defendants charged in Operation Sledgehammer VI, 92 defendants have been charged for their participation in this automobile insurance fraud scheme. Of those 92 defendants, 56 have been charged federally by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $5 million to the defrauded insurance companies. Thirty-six defendants have been charged by the Palm Beach County State Attorney’s Office.

Mr. Ferrer commended the efforts of the FBI, IRS-CI, the Florida Department of Insurance Fraud, the Palm Beach County State Attorney’s Office, and the Greater Palm Beach County Health Care Fraud Task Force for their outstanding work in this case. Mr. Ferrer also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance in this investigation. The federal cases are being prosecuted by Assistant U.S. Attorney A. Marie Villafaña and the state cases are being prosecuted by the Palm Beach County State Attorney’s Office.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Criminal Complaint Charges Individuals with Scheme to Defraud Spanish-Speaking Consumers by Threatening Them with Deportation

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division and Ronald Verrochio, Postal Inspector in Charge, U.S. Postal Inspection Service, Miami Division, announced yesterday that two individuals were arrested on a federal warrant alleging that they operated a series of fraudulent businesses targeting Spanish-speaking consumers. The criminal complaint, charged Daniel Carrasco, 54, and Federico Martin Gioja, 45, both of Miramar, alleging that the pair incorporated, owned, and ran Florida companies that used a phone room in Argentina to extract money from consumers using lies and extortion.

In addition to the criminal complaint, the Justice Department filed a civil case against Carrasco, Gioja, Romina Tasso and their businesses, seeking an injunction to prevent further fraud and an asset freeze to prevent dissipation of funds obtained from consumers.

Carrasco and Gioja made their first appearances in court yesterday.

According to the civil complaint and the affidavit filed in support of the criminal complaint, the case was the result of a referral from Spanish-language television station, Univision. Companies belonging to Carrasco and Gioja are alleged to have falsely claimed an affiliation with Univision and purported to sell products such as vitamins, lotions, medical insurance, and English-language training products. However, according to the documents, the companies frequently did not deliver products ordered by consumers. The companies allegedly did not have many of the products they promised to send to consumers, and so consumers received other products instead.

According to the civil and criminal complaints, after consumers refused delivery of the companies’ shipments, employees of the Argentinian phone room used by Carrasco and Gioja called and falsely threatened the consumers with arrest, deportation, or fines on their gas and electric bills.

Mr. Ferrer stated, “These defendants specifically targeted Spanish-speaking victims, pretending to be affiliated with the Univision television network, to sell their products from their phone room in Argentina. In fact, however, the defendants had absolutely no connection to Univision, and their companies did not deliver the products ordered by consumers. As this case illustrates, the U.S. Attorney’s Office is committed to investigating and prosecuting fraudsters, both domestic and international, whose schemes defraud American consumers.”

“This case demonstrates our commitment to use every tool at our disposal -- including asset freezes, injunctive relief, and criminal prosecution -- against companies that seek to lie, extort, threaten, and defraud Americans,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Protecting consumers from fraud continues to be a top priority for the Department of Justice.”

“Postal Inspectors will continue to investigate cases involving fraud against consumers and will vigorously pursue those individuals who use the mail in furtherance of their criminal schemes,” said Ronald Verrochio, U.S. Postal Inspector in Charge, Miami Division.

According to the criminal and civil complaints, Carrasco and Gioja routinely changed the names of the companies under which they did business to evade complaints, regulators, and law enforcement. The businesses allegedly were contacted by a variety of state agencies regarding their illicit practices. In emails cited in the affidavit in support of arrest, those working with Carrasco and Gioja referred to companies tainted by complaints as “burnt.” Rather than changing their practices, the defendants allegedly incorporated new companies and started the same illegal practices again.

Mr. Ferrer commended the investigative efforts of the Postal Inspection Service. The civil case is being handled by Trial Attorney Jessica Gunder of the U.S. Department of Justice’s Consumer Protection Branch. The criminal case is being prosecuted by Assistant Director Richard Goldberg with the Consumer Protection Branch.

A criminal complaint is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. A civil complaint contains allegations only and the defendants will have the opportunity to challenge those allegations in court.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Ronald Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), and Sergio Velazquez, Chief, Hialeah Police Department, announced that defendants Lineten Belizaire, 22, Earnest Baldwin, 36, and Earl Baldwin, 42 all of Miami, were sentenced today for their participation in a $1.7 million identity theft tax refund fraud scheme. Specifically, U.S. District Judge Cecilia M. Altonaga sentenced Belizaire to 129 months in prison, to be followed by 3 years of supervised release. Defendant Earnest Baldwin was sentenced to 172 months in prison, to be followed by 4 years of supervised release and defendant Earl Baldwin was sentenced to 84 months in prison, followed by 4 years of supervised release. Judge Altonaga ordered that a restitution hearing be held within 90 days.

Lineten Belizaire pled guilty to access device fraud and aggravated identity theft on March 18, 2013. Earnest and Earl Baldwin were convicted at trial on April 10, 2013, on charges of conspiracy to defraud the government, conspiracy to commit access device fraud, access device fraud, and multiple counts of aggravated identity theft. On April 17, 2013 co-defendant Marckell Steward, 21, of Miami, was sentenced to 72 months in prison, to be followed by 3 years of supervised release for his participation in the identity theft tax refund fraud scheme. Steward had previously pled guilty to conspiracy to commit access device fraud and aggravated identity theft.

According to court documents and testimony, Lineten Belizaire, along with co-conspirators Earnest and Earl Baldwin, and Marckell Steward, were involved in an identity theft tax fraud scheme that operated from July 2011 through June 2012. During the course of their fraud scheme, approximately $1.7 million in fraudulent refund claims were submitted to the IRS for payment.

According to documents filed in court, Belizaire conspired with Steward and Earnest and Earl Baldwin on a plan to use stolen personal identification information of others to file fraudulent and unauthorized tax returns claiming refunds on debit cards. Some of the refund claims were filed from Earl Baldwin's residence. According to the factual proffer, Belizaire exchanged text messages with Steward in which the defendants sent and received personal identification information of victims and also sent and received debit card account numbers that were used for receiving victims’ tax refunds.

As stated in trial testimony and evidence, Earnest Baldwin possessed more than 1,000 names, dates of birth, and Social Security numbers and approximately 40 pre-paid debit cards in other people’s names. Among the papers seized were high school report cards with identity information and data from an organization for disabled persons containing identity information. The evidence at trial also showed that Earnest and Earl Baldwin withdrew money from debit cards loaded with fraudulently obtained refunds. According to plea documents, more than 80 fraudulent tax returns using stolen identifications were electronically filed from the IP address belonging to the Belizaire. Defendant Belizaire was also observed on ATM video withdrawing money on multiple occasions from debit cards loaded with fraudulent tax refunds.

Mr. Ferrer commended IRS-CID, USPIS, and the Hialeah Police Department for their work on the case. The case is being prosecuted by Assistant U.S. Attorneys Michael N. Berger and Maurice Johnson.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Steven Steinberg, Chief, City of Aventura Police Department, and Ray Black, Chief, City of Miramar Police Department, announce today’s sentencing of defendant Braxton Geovanni Bell, 21, of Miami Gardens, Florida. Bell was sentenced to 34 months in prison, to be followed by 3 years of supervised release.

On February 7, 2013, Bell was convicted at trial of one count of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2), and two counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1). On April 16, 2013, Bell pled guilty in a separate criminal case to one count of access device fraud.

According to testimony at trial and court documents, Bell used the names and social security account numbers of unwitting victims to submit fraudulent tax returns to the Internal Revenue Service. Based on these fraudulent returns, Bell obtained tax refunds on prepaid debt cards, and then used the money to purchase luxury items, including a Mercedes Benz, a custom made gold chain, a Rolex “Presidential” Gold watch, a bracelet, and expensive furniture.

Mr. Ferrer commended the investigative efforts of IRS-CI, the City of Aventura Police Department, and the City of Miramar Police Department. The case is being prosecuted by Assistant U.S. Attorneys Gera R. Peoples, Michael Nadler, and Peter Forand.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kenneth Mascara, Sheriff, St. Lucie County Sheriff’s Office (SLCSO), announce the indictment of defendant Joshua Adams Bagala, of Port Saint Lucie, on child pornography charges. Bagala was arraigned on June 20, 2013, before U.S. Magistrate Judge Frank J. Lynch, Jr., in Ft. Pierce and is detained pending trial.

The two-count indictment charges Bagala with transportation of child pornography via the internet, in violation of Title 18, United States Code, Section 2252(a)(1), and receipt of child pornography via the internet, in violation of Title 18, United States Code, Section 2252(a)(2). If convicted, Bagala faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison on each count. Bagala will also be required to register as a sex offender in any jurisdiction in which he lives, works, or attends school.

On April 16, 2013, a Nebraska State Patrol sergeant was conducting an online undercover investigation in a chat room. The officer, who was posing as a 14 year old girl, was contacted by a user with the screen name of “death_by_eskimo.” The user asked the undercover whether the undercover liked underage sex films and suggested that they use an instant messaging service to communicate. Thereafter, the user of the “death_by_eskimo” screen name sent two child pornography videos to the undercover officer. Upon further investigation, the IP address for “death_by_eskimo” was traced to Bagala’s residence in Florida.

On April 26, 2013, members of the South Florida ICAC Task Force executed a state search warrant at Bagala’s residence in Port St. Lucie. A forensic examination of the Bagala’s computer revealed several thousand videos and photographs of child pornography.

Mr. Ferrer commended the investigative efforts of the St. Lucie County Sheriff’s Office and the South Florida Internet Crimes against Children (ICAC) Task Force for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.

An indictment is only an accusation and a defendant is presumed innocent until proven guilty.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced today’s sentencing of defendant Cristobal Raul Puig, 25, of Miami. Puig was sentenced to 31 months in prison, to be followed by three years of supervised release.

Puig previously pled guilty to one count of possessing 15 or more social security numbers of other persons, with corresponding names and dates of birth, and one count of knowingly using, without lawful authority, the means of identification of another person.

According to court documents, an employee of Baptist Health System’s West Kendall location sold the names, dates of birth, social security numbers, and addresses of hospital patients to Puig. Defendant Puig then used the stolen patient identification information to file unauthorized income tax returns. At the time of his arrest, Puig was in possession of a list containing the names, dates of birth, social security numbers, and addresses of 20 recent hospital patients.

Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Maurice A. Johnson.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce the filing of a criminal complaint charging defendant George Brown, 50, of Hollywood, FL, with accepting bribes in connection with programs receiving federal funds, in violation of Title 18, United States Code, Sections 666. Brown was arrested yesterday and is scheduled to appear in federal court tomorrow in Fort Lauderdale at 11:00 a.m. before Magistrate Judge Lurana S. Snow.

According to the criminal complaint, Brown was the Roadway Lighting Coordinator for the Department of Public Works (DPW) in Miami-Dade County. In this capacity, Brown was responsible for, among other things, overseeing the installation and/or maintenance of more than 45,000 street lights in the county’s roadway system. In 2011, a lighting contractor allegedly offered to provide Brown with “rewards” in exchange for the DPW’s purchase of the contractor’s lighting products. Brown agreed and subsequently accepted more than $13,000 in bribes from the contractor in 2011 and 2012. As detailed in the complaint, the bribes included appliances, computer equipment, and other merchandise, all paid for by the contractor. Among the merchandise that Brown received from the contractor was a 2.5 ton air conditioning unit, a Samsung stainless steel refrigerator, and a KitchenAid built-in single electric convection oven. The merchandise was either shipped directly to Brown’s home address or picked up by Brown at the contractor’s business in Miami, Florida.

During the investigation, the contractor began to cooperate with law enforcement and recorded the conversations with Brown. In one recorded conversation, Brown assured the contractor that no one else knew about their arrangement. In another recorded conversation, the two discussed delivery to Brown of certain merchandise costing approximately $2,600, in exchange for Brown’s assistance in getting the DPW to purchase more than $40,000 worth of lighting products from the contractor for a project on 27th Avenue in Miami, Florida.

If convicted of the charges in the criminal complaint, Brown faces a possible maximum statutory sentence of up to 10 years in prison.

Mr. Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.

A complaint is only an accusation and a defendant is presumed innocent unless and until proven guilty.

Attachment:

Complaint (PDF)

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Atwater, Florida Chief Financial Officer, and J.D. Patterson, Director, Miami-Dade Police Department, announce the unsealing of a 40-count indictment charging four defendants with various counts of bank fraud, money laundering, and wire fraud. The indictment also seeks the forfeiture of criminal proceeds derived from the fraud, including real property and $1,585,657.10. All four defendants were arrested yesterday and made their initial appearances today in front of Magistrate Judge Edwin G. Torres.

The indictment charges defendants Eduardo Hernandez, Jr., 32, of Miami, Alexander Orriols, 43, of Miami Beach, Jose Arias, 50, of Miami, and Milena Hernandez, 30, of Miami, with one count of conspiracy to commit bank fraud (Count 1), and one count of conspiracy to commit money laundering (Count 21). Additionally, the indictment charges various individual defendants with 19 counts of substantive bank fraud (Counts 2-20), 18 counts of money laundering (Counts 22-39), and one count of wire fraud (Count 40).

According to the indictment, the defendants engaged in a bank fraud scheme using straw buyers to obtain loans using false supporting information and documentation. To execute the scheme, the defendants allegedly recruited and induced individuals to act as straw buyers/loan applicants for boats from companies owned by or associated with the defendants. The straw buyers/loan applicants would then submit loan applications to financial institutions. The applications contained false financial information and documentation regarding purported down payments and deposits allegedly made by the straw buyers/loan applicants to the defendants’ boat companies. The defendants also allegedly falsified the financial records of the straw buyers/loan applicants, including IRS W-2 Forms, bank statements and federal income tax returns, and submitted these false financial documents to the financial institutions. Based on these false documents and misrepresentations, the financial institutions approved and issued loans to the straw buyers/loan applicants.

The indictment further alleges that the defendants paid the straw buyers/loan applicants a portion of the loan proceeds that the boat companies received from the lending institutions, as payment for their service and also to cover some of the monthly payments on the loans so as to keep the fraud afloat. The defendants paid the straw buyers/loan applicants in cash and through third party checks to avoid detection. Lastly, the defendants diverted the loan proceeds for their personal use and used some of the money to perpetuate the fraud scheme.

If convicted, the defendants face the following possible maximum statutory sentences: 30 years in prison for conspiracy to commit bank fraud and substantive bank fraud; 20 years for money laundering conspiracy, substantive money laundering (Counts 22-31), and wire fraud; and 10 years for substantive money laundering (Counts 32-39).

Mr. Ferrer commended the ICE-HSI, IRS-CI, Florida Department of Insurance Fraud, and the Miami-Dade Police Department for their outstanding investigative work in this case. The case is being prosecuted by Assistant U.S. Attorney Robert J. Lehner.

An indictment is only an accusation and a defendant is presumed innocent until proven guilty.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced that Gary Goldberg, 49, of Palm Beach County, pled guilty on Friday, June 14, 2013, before U.S. District Judge Kenneth A. Marra in West Palm Beach, Florida, to one count of enticing a minor to engage in an illegal sexual activity, in violation of 18 U.S.C. section 2422(b).

Sentencing has been scheduled for September 16, 2013. At sentencing, Goldberg faces a statutory mandatory minimum sentence of 10 years and a maximum term of up to life in prison on the enticement of a minor count.

According to documents filed with the court, Goldberg entered into a sexual relationship with a 17 year old victim and her 15 year old friend. In addition, Goldberg paid the minor victims to allow him to take sexually explicit photographs of them.

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 better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Mr. Ferrer commended the investigative efforts of the FBI, Boca Raton Police Department, the FBI Safe Streets Task Force, and the South Florida Minor Vice Task Force. The case is being prosecuted by Assistant U.S. Attorney Lothrop Morris.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Otha Easley, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, and David Pharo, Resident Agent in Charge U.S. Fish & Wildlife Service, Miami, announced that Aquatic Trading Company, Inc. (ATC), a Florida corporation based in Pompano Beach, entered a guilty plea and was sentenced yesterday in federal district court in Miami for conspiring to harvest, transport, and sell juvenile nurse sharks and angelfish, knowing the fish were taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida, contrary to the federal Lacey Act, Title 16, United States Code, Sections 3372(a)(2)(A), and 3373(d)(1) and (2), all in violation of Title 18, United States Code, Section 371.

ATC was sentenced by Senior U.S. District Judge James Lawrence King, who had earlier accepted ATC’s guilty plea to the criminal charge. The company was placed on court-supervised probation for three years, ordered to pay a criminal fine of $3,000, and ordered to surrender to the Florida Fish & Wildlife Conservation Commission and to the United States Fish & Wildlife Service all licenses, permits, and endorsements issued to or held by the company. Two co-defendants in the case, Walter R. Bloecker and Lila M. Bloecker had entered guilty pleas to the same charge before Judge King on April 18, 2013, and each been sentenced to a period of 90 days home confinement, followed by a one year term of probation.

According to the indictment and statements in court, the defendants were involved in the illegal harvest of juvenile nurse sharks (Ginglymosthoma cirratum) and a variety of oversized angelfish (Pomocanthus arcuatus, Holocanthus bermudensis, and Holocanthus ciliaris), from around as early as June 2012 through October 2012. Harvesting of the fish was arranged through telephone calls between ATC’s employees and an individual in the Florida Keys. Walter Bloecker advised the harvester that he could conceal the illegal source of the sharks by using false paperwork to make it appear the sharks had been imported from Nicaragua. Neither ATC nor the harvester held the required permits for harvesting nurse shark pups for commercial purposes. The illegally acquired sharks were, according to the indictment and admissions in court, harvested from Florida State waters in the Florida Keys and marketed by telephone to a retailer in Michigan. The sharks were shipped to the Michigan-based buyer by commercial air cargo.

Likewise, Lila and Walter Bloecker engaged in business conversations with the Michigan dealer, to arrange the sale of oversized angelfish listed on a weekly inventory sales guide mailed to potential customers. The angelfish, also harvested in the Florida Keys, were sold and shipped to Michigan.

Florida Administrative Code, Section 68B-24.005, which addresses the commercial harvest of sharks from the waters of the state, provides in relevant part that any person harvesting sharks in or from the waters of the state for commercial purposes or sells any shark harvested from such waters must possess a valid federal annual vessel permit for sharks; may only sell to a holder of a valid Atlantic shark dealer permit issued pursuant to 50 C.F.R. §635.4; and that no wholesale dealer, as defined in Florida Statutes Section 379.362(1), may purchase sharks, or any part thereof, unless in possession of a valid federal Atlantic shark dealer permit and without confirming that the seller possesses a valid Florida saltwater products license and the federal licenses and permits specified in the Code Section.

Florida Administrative Code, Section 68B-42.004, “Size Limits” provides in relevant part that in all state waters no person may harvest angelfish with a total length outside of the limits specified for the individual species, specifically a minimum of one-and-one-half inches and a maximum of eight inches for Gray angelfish (P. arcuatus) and French angelfish (P. Paru); and a minimum of one-and-three-quarters inches and a maximum of eight inches for Blue angelfish (H. bermudensis) and Queen angelfish (H. ciliaris).”

Mr. Ferrer commended the investigative efforts of the NOAA Office for Law Enforcement and the Fish & Wildlife Service Office of Law Enforcement. This case was prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald and Antonia Barnes.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigations (IRS-CI), announced that defendant Efrain Felipe, 41, of Hallandale Beach, pled guilty to a two-count Information, charging him with making and subscribing a false tax return on behalf of a client, and aiding and abetting, in violation of Title 26, United States Code, Sections 7206(1) and 7206(1).  

Sentencing for defendant Felipe has been scheduled for August 29, 2013 at 8:30 a.m. before U.S. District Judge Robert N. Scola Jr. At sentencing, Felipe faces a possible maximum statutory sentence of up to 3 years in prison on each count.  

Felipe operated a tax preparation business in Broward County, and prepared tax returns on behalf of his customers, falsely claiming that some customers were entitled to a First Time Home Buyers Credit (FTHBC) of $7,500 for properties they did not own or for properties that were purchased years earlier. Felipe also falsely claimed the FTHBC on his own personal tax return.  

Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Norman O. Hemming, III.  

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced the sentencing of defendant Kathryn Abbate, 64, of Hollywood, FL, to 42 months in prison, to be followed by 3 years of supervised release.

According to the factual proffer, the defendant served as Chief Executive Officer (CEO) of the Miami Beach Community Health Center (the Center) from 2002 to mid-2012. The Center was a Federally Qualified Health Center (FQHC) during this time, and was a community-based organization providing medical care to persons regardless of ability to pay or insurance status. As an FQHC, the Center received millions of dollars of federal funding each year from 2008 to 2012

According to the factual proffer, from about 2008 through May 2012, Abbate embezzled money from the Center in a number of ways. First, Abbate caused the Center to pay her non-accrued vacation pay and other forms of compensation, totaling more than $3 million from between 2008 and 2012. Second, Abbate embezzled money from the Center by causing non-payroll checks to be issued payable to her. Specifically, from 2007 to 2012, Abbate caused the Center to disburse approximately 837 checks made payable to her totaling approximately $3 million for purported “community development.”

Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. The case is being prosecuted by Michael N. Berger.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced today the sentencing of defendant Josue Faustin, 21, of Miami. United States District Judge William J. Zloch sentenced Faustin to 27 months in prison, to be followed by 3 years of supervised release. In addition, the defendant was ordered to pay restitution in the amount of $43,591.90.

Faustin engaged in a fraud scheme using stolen identities to file fraudulent tax returns. The tax returns falsely claimed refunds and requested that the refunds be direct-deposited into Netspend debit card accounts which Faustin had opened in the names of unwitting identity theft victims. Faustin subsequently went to various ATM machines in Coral Springs, Broward County, and withdrew funds from the Netspend debit card accounts.

According to documents filed with the court, on May 17, 2012, Faustin was observed by a Coral Springs police officer as he went to CVS and 7-11 stores, and bought pre-paid credit cards. After the purchases, Faustin went to ATM machines and withdrew money. After being pulled over for a traffic stop, Faustin was found in possession of bundles of cash totaling $5,881, 3 cell phones, 15 Netspend debit cards loaded with approximately $30,000 from tax refunds, and 4 newly purchased debit cards.

Mr. Ferrer commended the investigative efforts of IRS-CI. The case was prosecuted by Assistant United States Attorney Jennifer Keene.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the sentencing of George Elia, 69, formerly of Fort Lauderdale. United States District Judge Kathleen Williams sentenced Elia to 12 years’ imprisonment, followed by 3 years of supervised release.

According to evidence presented during the trial and sentencing, George Elia, and his conspirator James “Jim” Ellis, 70, also of Fort Lauderdale, operated a Ponzi scheme. Elia guaranteed that investor money was safe, and that he had high rates of returns from his day trading of stock, including Facebook stock. In late 2011, however, payments to investors became irregular, investors filed civil lawsuits against Elia, and in January 2012, Elia sold his home, shipped his belongings to his native Cyprus, and fled. He was arrested returning to Las Vegas with his wife in March 2012.

As a result of his scheme, approximately 50 victims lost approximately $10 million after investing with Elia. Elia used investor money to purchase two Bentleys, a Rolls Royce, approximately $500,000 in jewelry, and Chanel and Hermes jewelry.

On April 30, co-conspirator Ellis was sentenced to 38 months in prison by U.S. District Judge Williams.

Mr. Ferrer commended investigative efforts of the FBI and the cooperation of the Securities and Exchange Commission. This case is being handled by Assistant U.S. Attorneys H. Ron Davidson and Wilfredo Fernandez.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Largest Fine Paid by a DEA Registrant

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, announced that Walgreens Corporation (Walgreens), the nation’s largest drug store chain, has agreed to pay $80 million in civil penalties, resolving the DEA’s administrative actions and the United States Attorney’s Office’s civil penalty investigation regarding the Walgreens Jupiter Distribution Center and six Walgreens retail pharmacies (collectively “Registrants”) in Florida. The settlement further resolves open civil investigations in the District of Colorado, Eastern District of Michigan, and Eastern District of New York, as well as civil investigations by DEA field offices nationwide, pursuant to the Controlled Substances Act (the Act).

The settlement, the largest in DEA history, resolves allegations that the Registrants committed an unprecedented number of record-keeping and dispensing violations under the Act. According to documents filed in the underlying administrative actions, the Registrants negligently allowed controlled substances listed in Schedules II – V of the Act, such as oxycodone and other prescription pain killers, to be diverted for abuse and illegal black market sales.

According to the most recent report from the U.S. Center for Disease Control and Prevention, prescription drug overdose deaths exceeded motor vehicle deaths and deaths from illegal street drugs, such as cocaine, heroin, and amphetamines in 2009. Oxycodone is a powerful addictive narcotic that is one of the most abused prescription medications in Florida and throughout the United States. Walgreens’ Distribution Center in Jupiter, Florida was the largest supplier of oxycodone to retail pharmacies in the State of Florida.

U.S. Attorney Wifredo A. Ferrer stated, “Prescription drug abuse is a tremendous problem in Florida and throughout the country. Every day, individuals die from prescription drug overdoses. The record-keeping requirements of the Controlled Substances Act and DEA regulations are designed to prevent prescription pain killers, like oxycodone, from ending up on our streets. For this reason, we cannot allow pharmacies to circumvent their regulatory record-keeping and dispensing obligations.”

DEA Special Agent in Charge Mark R. Trouville stated, “National pharmaceutical chains are not exempt from following the law. This settlement sends out a clear message that all DEA registrants will be held accountable when they violate the law and threaten public health and safety. The DEA will continue its efforts to work with our registrants and our law enforcement partners to combat pharmaceutical drug abuse and diversion in Florida.”

The settlement agreement covers conduct that was the subject of DEA’s administrative actions and the U.S. Attorney’s Office civil penalty investigation. More specifically, the settlement covers allegations against Walgreens’ Jupiter Distribution Center and six Walgreens’ retail pharmacies. First, the Jupiter Distribution Center failed to comply with DEA regulations that required it to report to the DEA suspicious prescription drug orders that it received from Walgreens’ retail pharmacies. Walgreens’ alleged failure to sufficiently report suspicious orders was a systematic practice that resulted in at least tens of thousands of violations and allowed Walgreens’ retail pharmacies to order and receive at least three times the Florida average for drugs such as oxycodone.

Second, the six retail pharmacies in Florida that received the suspicious drug shipments from the Jupiter Distribution Center, in turn, filled customer prescriptions that they knew or should have known were not for legitimate medical use. In addition, these retail pharmacies and others elsewhere in the United States failed to properly identify and mark, as required by DEA regulations, hardcopy controlled substance prescriptions that were outsourced to a “central fill” pharmacy for filling. Without Walgreens’ retail pharmacies identifying these outsourced prescriptions, DEA could not accurately determine which prescriptions were filled from the retail pharmacies’ own drug supplies and which prescriptions were filled by a “central fill.” Consequently, DEA could not determine the accuracy of the retail pharmacies’ drug records. The DEA’s administrative actions demonstrated millions of violations of this type.

In addition to the $80 million civil penalty for the above violations, Walgreens agreed to surrender the Registrants’ ability to distribute or dispense controlled substances listed in Schedules II – V for two years, ending in 2014. As part of the settlement, Walgreens admitted that it failed to uphold its obligations as a DEA registrant regarding the above-described conduct. Furthermore, Walgreens has agreed to create a Department of Pharmaceutical Integrity to ensure regulatory compliance and prevent the diversion of controlled substances. Walgreens has also agreed to enhance its training and compliance programs, and to no longer monetarily or otherwise compensate its pharmacists based on the volume of prescriptions filled.

Since 2009, the DEA, along with its federal, state, and local counterparts, have partnered to combat the prescription drug abuse epidemic that has plagued Florida, culminating in Operation Pill Nation I and II and Operation Oxy Alley. These investigations have resulted in charges against more than 172 individuals, including 51 doctors and 24 clinic/pharmacy owners, the seizure of approximately 2.5 million dosage units of controlled substances, approximately $16.6 million, real property, and exotic cars. In addition, approximately 42 doctors and 11 pharmacies have lost their DEA registrations through the issuance of Immediate Suspension Orders. As well, approximately 192 doctors and 68 pharmacies have voluntarily surrendered their DEA registrations following an official visit from the DEA. Lastly, DEA has also taken action against seven other Florida-based distributors.

This investigation was conducted by the DEA’s Miami Field Office and the U.S. Attorney’s Office for the Southern District of Florida, with the assistance of DEA’s Office of Chief Counsel.

Mr. Ferrer thanked U.S. Attorney for the District of Colorado, John Walsh, U.S. Attorney for the Eastern District of Michigan, Barbara L. McQuade, and U.S. Attorney for the Eastern District of New York, Loretta E. Lynch, for their cooperation in this case. Mr. Ferrer also commended the investigative work of the DEA’s Miami Field Office, as well as its DEA counterparts throughout the country for their work and assistance in this matter.

The civil penalty case was investigated and negotiated by Assistant U.S. Attorney Franklin Monsour of the U.S. Attorney’s Office for the Southern District of Florida. The administrative case was principally negotiated by Lee Reeves, Associate Chief Counsel for DEA’s Diversion and Regulatory Litigation Section, and also by Scott Lawson, who acted as lead trial counsel for the DEA in the administrative actions.

Attachment:

Walgreens MOA & Addendum (PDF)

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Otha Easley, Acting Special Agent in Charge for the National Oceanic and Atmospheric Administration, Office of Law Enforcement, Southeast Division, and David G. Pharo, Resident Agent in Charge, U.S. Fish & Wildlife Service (FWS), Office of Law Enforcement, announced the unsealing of criminal charges against Allan Wagner, formerly a resident of Monroe County, Florida, and Dean Trinh, 43, of Milpitas, California. More specifically, the indictment against Wagner and Trinh alleges that they engaged in a conspiracy to take, harvest, capture, transport, and sell quantities of juvenile nurse sharks from Florida state waters, for commercial sale and distribution in interstate commerce to their financial gain, in violation of the laws and regulations of the State of Florida, all in violation of the federal Lacey Act, Title 16, United States Code, Sections 3372(a)(2)(A), and 3373(d)(1) and (2). Dean Trinh has been arrested and made his initial appearance on the charges in California; his court appearance date in Florida remains to be set. Allan Wagner passed away prior to the unsealing of the indictment.

The case has been assigned to U.S. District Judge Jose E. Martinez. If convicted on the charges, Trinh faces possible terms of imprisonment of up to five years on each of the six charges brought against him.

According to the indictment, Wagner held a Florida Saltwater Products License but lacked the necessary federal annual vessel permit for sharks. He was the registered owner of a 40’ commercial fishing vessel. Trinh operated a business in Milpitas, California, known as AQUATOP USA, LLC, which, among other things, advertised the sale of nurse sharks on eBay and Craig’s List. Specifically, the indictment alleges that Wagner harvested nurse shark pups from lobster traps he placed in state waters and thereafter he and Trinh negotiated over the internet for the sale and transfer of the juvenile nurse sharks. The sharks were shipped to California by commercial air cargo, for further sale by Trinh. Over the period from August 2009 through October 2009, the defendants are alleged to have sold and transferred approximately 74 sharks.

Florida Administrative Code, Section 68B-44.005, “Commercial Harvest of Sharks: Federal Permit Required” provides in relevant part: “(1) No person shall harvest sharks in or from the waters of the state for commercial purposes or sell any shark harvested from such waters unless such person is in possession of a valid federal annual vessel permit for sharks issued pursuant to 50 C.F.R. §635.4. The federal Lacey Act, among other things, makes it unlawful for any person to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce, any fish or wildlife, taken, possessed, transported, or sold in violation of any law or regulation of any State. 16 U.S.C. §3372(a)(2)(A).

Mr. Ferrer commended the investigative efforts of the Special Agents of NOAA-OLE and FWS-OLE in this case, and the U.S. Attorney’s Office for the Northern District of California for their assistance in the preliminary proceedings in that District. The case is being prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.

An indictment is only an accusation and a defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and J.D. Patterson, Director, Miami-Dade Police Department (MDPD), announced arrests of defendants Marco Cruz, 47, of Hialeah, and Ramses Llufrio, 38, of Hialeah. The charges arise from the May 14, 2013 theft of gold bars worth an approximate value of $625,000 from American Airlines Flight 902, a flight that arrived at Miami International Airport from Guayaquil, Ecuador. The defendants are scheduled for an initial appearance today at 1:30 p.m. before U.S. Magistrate Judge Jonathan Goodman.

The criminal complaint against Cruz charges him with, among other things, knowingly stealing gold bars which were part of a foreign shipment of property, in violation of Title 18, United States Code, Section 659. According to the allegations in the complaint, Flight 902 was a passenger flight that also contained cargo. After the flight arrived at Miami International Airport, airline employees removed the cargo, which included six boxes of gold bars. When airline employees noticed that one box of gold bars had gone missing, they notified law enforcement of the theft. Cruz, who works as a Fleet Service Clerk, had access to Flight 902 on the morning of its arrival. As part of its investigation into the theft, law enforcement interviewed employees at the airline, including Cruz. Although Cruz initially denied involvement in the theft, he gave law enforcement consent to search his home. In his home, law enforcement found one of the stolen bars and $200,000 in cash. Cruz later provided law enforcement with an additional $50,000 in cash.

The criminal complaint against Llufrio charges him with receiving one of the stolen gold bars, knowing that it had been stolen, in violation of Title 18, United States Code, Section 659. According to the allegations in the complaint, Llufrio owns a pawn shop located at 548 NW 57th Avenue, Miami, FL, 33126. The complaint alleges that Cruz delivered a total of five gold bars to Llufrio and received approximately $250,000 in cash as a result of these transactions. Llufrio allegedly accepted one of the bars immediately after Cruz informed him that the bar was “hot.”

If convicted, the defendants face a maximum of ten years imprisonment.

Mr. Ferrer commended investigative efforts of the FBI, the Miami-Dade Police Department, the City of Miami Police Department and the Coral Gables Police Department. This case is being handled by Assistant U.S. Attorney John Byrne.

A criminal complaint is merely an accusation and a defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Sixty-nine defendants charged to date by USAO on timeshare resale telemarketing fraud

At a press conference held in Miami today, Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Darin M. Didier, Acting Supervisory Special Agent, Federal Bureau of Investigation (FBI), Miami Field Office, and Ronald Verrochio, Inspector in Charge, U.S. Postal Inspection Service, Miami Field Office, joined Charles A. Harwood, Acting Director, Federal Trade Commission’s (FTC) Bureau of Consumer Protection, Florida Attorney General Pam Bondi, and Jay Levenstein, Deputy Commissioner, Florida Department of Agriculture and Consumer Services, to highlight to their respective offices’ efforts in combatting timeshare property resale fraud in Florida and around the country.

According to the FTC, 191 actions were brought by the FTC and its law enforcement partners around the nation. Of these actions, the U.S. Attorney’s Office for the Southern District of Florida claimed 18 criminal cases, charging a total of 69 defendants, between 2011and 2013.

U.S. Attorney Wifredo A. Ferrer, focusing his remarks on Florida, stated, “We cannot allow our elderly and vulnerable real property owners to continue to be the target of fraud schemes. For that reason, our respective offices – federal and state, criminal and civil – have joined forces to combat Florida-based fraud schemes victimizing timeshare unit owners across the country. These victims, many of them elderly or in financial distress, looked to sell their units to help make ends meet or pay other bills. Instead, they were defrauded out of more than $14 million in total. Such fraud will not be tolerated.”

According to Charles A. Harwood, Acting Director of the Federal Trade Commission’s Bureau of Consumer Protection, “Timeshare resale scammers have cheated tens of thousands of timeshare owners out of tens of millions of dollars by convincing them to pay for a false promise. But law enforcement at virtually every level of government is working together to put an end to the problem.”

“We will continue to pursue scam artists who attempt to essentially steal from timeshare owners, and the Timeshare Resale Accountability Act that I worked with the Legislature on in 2012 is already having a great effect on ending this type of fraud. With strong partnerships among federal, state and local leaders, we will continue to protect Floridians,” stated Florida Attorney General Pam Bondi.

“If you think you are the victim of a timeshare scam, file a complaint with your state attorney general’s office and the Internet Crime Complaint Center,” said Darin M. Didier, acting Supervisory Special Agent assigned to FBI Miami Division. “To avoid becoming a victim of this type of crime take a few prudent steps such as; do not agree to anything on the phone or online until you have had a chance to check out the reseller, get all information in writing, verify that the reseller’s agents are properly licensed and ask about fees and timing. Go to the FBI’s and FTC’s websites for more important tips.”

Ronald Verrochio, Inspector in Charge, U.S. Postal Inspection Service, Miami Field Office, stated “The timeshare resale fraudsters sound legitimate and convincing, but put pressure on victims to make decisions quickly. Hopefully the arrests of these fraudsters and dismantling of their criminal organizations will bring light to this rising fraud and educate the community. Our goal is to stop the crime and educate community members on these scams so they don’t become victims.”

“These scam artists defrauded consumers in Florida and across the country out of millions of dollars, often through illegal telemarketing,” said Commissioner of Agriculture Adam H. Putnam. “We’re proud to partner with other state and federal officials to protect consumers from further harm and bring justice to those who have violated the law.”

Among the criminal cases recently prosecuted by the U.S. Attorney’s office are the following:

1. U.S. v. Pappalardo et al.,, 13-60049-CR-Dimitrouleas (15 defendants charged) 2. U.S. v. Faraguna et al.,11-60247-CR-Marra (13 defendants charged) 4. U.S. v. Davis, 11-60268-CR-Hurley (1 defendant charged) 5. U.S. v. Friedman et al., 12-60019-CR-Scola (4 defendants charged) 6. U.S. v. Spinelli et al., 12-60149-CR-Scola (5 defendants charged) 7. U.S. v. Crapella and Walker, 12-mj-6114-Rosenbaum (2 defendants charged

These seven cases charge a total of 41 defendants with various counts, including conspiracy to commit mail fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering.

According to the charging documents and other documents filed with the court, Timeshare Mega Media and Marketing Group, Inc. (TMMMG) was a timeshare telemarketing room that operated in Fort Lauderdale, Florida, from July 2009 through May 2010. According to the allegations in the indictment, the defendants conspired to unlawfully enrich themselves by making false representations over the telephone to individuals who were trying to sell their time-share units. Among the false statements, the defendants would tell customers, most of who lived outside of the State of Florida, that the defendants had successfully sold their time-share unit and asked the customer to pay a fee to finalize the sale, which fee would purportedly be refunded at closing. This fee ranged from at least $1,996 to as much as $10,000. In fact, however, there were no buyers for their units, and the defendants kept the victims’ money for their personal use. During the ten months that TMMMG was in business, it fraudulently induced more than 2,000 victims to send approximately $5,000,000 to TMMMG.

Among the 41 defendants are the owners of TMMMG, Pasquale Pappalardo and Joseph Crapella, 33 top salespeople, and 6 others who handled customer service, verification, leads, payroll and other vital functions for TMMMG. To date, 23 of the 41 defendants charged in these 7 related cases have pled guilty and have received sentences ranging from 5 years to 3 months in prison, 6 defendants have pled guilty and are awaiting sentencing, 2 defendants are fugitives, 1 defendant is deceased, and the remaining 9 defendants are pending trial. If convicted, the defendants face a maximum statutory sentence of up to 20 years in prison on each count of conspiracies to commit mail fraud, wire fraud, and money laundering. This series of cases is being prosecuted by Assistant U.S. Attorney Jeffrey Kaplan.

In addition to the cases identified above, the Northern Division of the United States Attorney’s Office prosecuted 11 cases, which charged a total of 28 defendants with various counts, including conspiracy to commit mail fraud and conspiracy to commit wire fraud. These 11 cases involved two timeshare fraud rings which operated in Palm Beach County, but solicited victims throughout the United States. The defendants would typically operate a company for 4 to 10 months, and then, to avoid detection by law enforcement, close the company and reopen under a new name. The new company would operate in the same fashion as the original company with many of the same owners, managers and salespeople.

The first ring involved 6 companies which solicited approximately $7 million in advance fees from approximately 3,000 timeshare owners. The second ring involved 7 companies which solicited approximately $2.7 million from approximately 1,200 timeshare owners. According to the charging documents and other documents filed with the court, both rings involved essentially the same scheme. Defendants in these cases cold called timeshare owners and made false representations to induce them to pay advance fees for purported timeshare marketing and sales services. Among the false statements, the defendants would tell customers that the companies had successfully sold or would sell their timeshare units, that the companies would handle the appraisals, title searches, closings, and other services associated with the sales, and that the companies would use the advance fees to cover the necessary costs associated with the sales. In truth, the defendants never located a single buyer, never completed a single sale of a timeshare unit, and never used the advance fees for anything other than their own personal benefit.

Among the 28 defendants prosecuted in connection with these 2 rings were the company owners, managers, top salespeople, and an individual who allowed one of the companies to use his merchant account to process victim credit card payments. To date, 18 of the 28 defendants charged in these 11 cases have pled guilty and received sentences ranging from 6 months to 151 months, 5 defendants have pled guilty and are awaiting sentencing, 4 defendants are scheduled to plead guilty, and 1 is a fugitive. The defendants in these cases face a maximum statutory sentence of up to 20 years in prison on each conspiracy count. These cases are being prosecuted by Assistant U.S. Attorneys Adrienne Rabinowitz and Kerry Baron.

A complete list of the cases prosecuted by the United States Attorney’s Office for the Southern District of Florida is attached.

Mr. Ferrer commended the investigative efforts of the FBI and U.S. Postal Inspection Service in the criminal cases. Mr. Ferrer also recognized the invaluable support and assistance provided by the FTC during these investigations.

Attachment:

List of Cases (PDF)

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced that defendant Johnny Alexander Melo, 36, of Miramar, was sentenced today for his participation in an identity theft tax refund scheme. Melo was sentenced to 60 months of imprisonment, followed by one year of supervised release. In addition, U.S. District Judge Robert N. Scola ordered Melo to pay restitution of $18,594.63 to the IRS. Melo previously pled guilty to one count of conspiracy to use a false identification document, one count of possession of five or more identification documents, one count of theft of government funds and one count of aggravated identity theft. The defendant was remanded to the custody of the U.S. Marshals Service following the hearing.

On October 5, 2012, defendant Melo was charged in a ten (10) count indictment for his participation in an identity theft tax refund scheme. According to the indictment, defendant Melo and his co-conspirators stole personal identification information and used the stolen information to file false tax returns in the identities of at least 22 individuals. The U.S. Treasury issued tax refund checks in the names of those individuals. Melo then attempted to cash these fraudulently obtained tax refund checks by using false driver’s licenses in the names of the stolen identities.

Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to the FBI and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Michael B. Nadler.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Paula A. Reid, Special Agent in Charge, United States Secret Service (USSS), Ronald Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Field Office, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the sentencing of defendant Jesus Calvo, 30 of Cutler Bay, for his role in an identity theft tax refund fraud scheme, to 58 months in prison, to be followed by 3 years of supervised release. U.S. District Judge Jose Martinez also ordered the defendant to pay $9.2 million in restitution to the Internal Revenue Service.

According to the factual proffer, the defendant operated a check cashing store called J&S Taxes in Perrine, Florida. Beginning in or around February 2012, and continuing through in or around June 2012, the defendant cashed thousands of fraudulently obtained United States Department of Treasury income tax refund checks (totaling approximately $12MM) that were brought by co-conspirators. The defendant knew that the checks had been obtained by fraud and without authorization of the true taxpayer.

According to the factual proffer, the defendant received more than the standard fee for cashing the checks because the tax-refund checks had been obtained by fraud. The standard fee for cashing these checks would have been from two to five percent. However, the defendant took much more than that fee and used this money for his own personal expenditures – he purchased two houses, he funded his retirement account, he invested in a “start-up company,” he purchased an investment property, and he purchased cars and other items.

According to the plea agreement and statements made in court, the defendant agreed to forfeit two houses, five cars, three bank accounts, high-end watches, jewelry and cash. These assets had an estimated value of approximately $2 million.

Mr. Ferrer thanked IRS-CI, USSS, USPIS, and FBI for their work on this case. The case is being prosecuted by Assistant U.S. Attorneys Michael N. Berger, Evelyn Sheehan and Elijah Levitt.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, announce yesterday’s sentencing of defendants Vincent Olavarria, Jr., 46, and Darren D. Cuff, 26, both of Port St. Lucie, on charges of conspiracy to violate federal firearms sales laws and making false statements to a federal officer. Olavarria had previously pled guilty to conspiracy to violate federal firearms laws, in violation of Title 18, United States Code, Section 371. Cuff had previously pled guilty to making false statements to a federal officer, in violation of Title 18, United States Code, Section 1001, in the course of the investigation of this case. At yesterday’s hearing, U.S. District Judge K. Michael Moore sentenced Olavarria to 34 months in prison to be followed by two years of supervised release; Judge Moore sentenced Cuff to 21 months in prison to be followed by two years of supervised release.

From March 2010 through December 2011, defendant Olavarria was a federally licensed firearms dealer in Port St. Lucie. Olavarria conspired with other defendants including defendant Cuff to falsify firearms sales records and conceal the actual buyers and true destination of sixty rifles that Olavarria had sold to an undocumented buyer. In concert with Olavarria and at his direction, Cuff and others pretended to be the buyers, and lied to ATF agents investigating the sales and transfer of the rifles, claiming to have taken the rifles and resold them on the street, when in fact they had all gone to another purchaser as yet unknown to ATF.

Mr. Ferrer commended the investigative efforts of the ATF. The case is being prosecuted by Assistant U.S. Attorney Theodore Cooperstein.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Michael P. Jackson, 40, of Carmi, Ill., was sentenced yesterday in the U.S. District Court for the Southern District of Florida to serve 72 months in prison for selling the prescription drug known as Adderall, from 2009 to 2012, to a Florida woman who operated an illegal Internet-pharmacy business. Jackson also was sentenced to three years of supervised release.

According to the Dec. 6, 2012, indictment, defendant Jackson supplied his co-defendant Lina Rodriguez with pills of Adderall, which contains amphetamine, a Schedule II controlled substance. As defendant Jackson was aware and intended, co-defendant Rodriguez resold the Adderall pills through an Internet business she owned and operated in southern Florida.

“This prosecution aims to curb the sale of dangerous drugs to United States citizens,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the U.S. Department of Justice. “The controlled substance drugs allegedly sold by the defendants were not dispensed by U.S. licensed pharmacies, and were not prescribed by any physician. Along with FDA, the U.S. Postal Inspection Service, and our other law enforcement partners, we will continue to protect our citizens from unsafe and potentially harmful drugs.”

Jackson pled guilty to the lead count of the indictment on March 11, 2013, which charged him and Rodriguez with conspiring to possess with the intent to distribute Adderall. Pursuant to his plea agreement, Jackson agreed not to oppose a judgment against him in the amount of $18,862, as gross proceeds of the offense to which he pleaded guilty. Rodriguez was sentenced to 72 months’ imprisonment on April 22, 2013.

The case was investigated by the Miami Field Office of the U.S. Food & Drug Administration’s Office of Criminal Investigations; the Miami Division of the U.S. Postal Inspection Service; and the Sacramento Field Office of the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Kevin J. Larsen of the U.S. Attorney’s Office for the Southern District of Florida, and Perham Gorji, Trial Attorney for the U.S. Department of Justice’s Consumer Protection Branch.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kenneth Mascara, Sheriff, St. Lucie County Sheriff’s Office (SLCSO), announced today that U.S. District Judge K. Michael Moore sentenced Cameron Dean Bates, 46, of Port Saint Lucie, to 20 years imprisonment, followed by 15 years of supervised release.

According to testimony at trial, in March 2011, SLCSO detectives and members of the South Florida Internet Crimes against Children (ICAC) Task Force began an Internet investigation using Peer-to-Peer (P2P) software. During this investigation, law enforcement found that between December 2010 and June 19, 2012, several internet protocol (IP) addresses linked to Cameron Dean Bates in both St. Lucie County and Palm Beach County were used to download and share child pornography files. Detectives reviewed a number of the files associated with the IP addresses, and confirmed that the files contained child pornography.

On June 29, 2012, a state authorized search warrant was executed at Bates’ residence in Port Saint Lucie, Florida. During the search, law enforcement seized a Dell black/silver laptop computer from Bates’ car. An on-sight forensic preview scan of the computer found numerous, non-deleted, child pornography images and videos, which included a minor child engaging in sexually explicit conduct. A full forensic analysis of Bates’ laptop revealed numerous images and videos of child pornography, along with personally produced adult pornography by Bates.

Mr. Ferrer commended the investigative efforts of the St. Lucie County Sheriff’s Office and HSI for their assistance and their work on this case. The case is being prosecuted by Assistant U.S. Attorneys Carmen Lineberger and A. Marie Villafana.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, announce today’s sentencing of defendant Jose Antonio Delgado, 46, of Fort Pierce, on charges of unlawful possession of stolen firearms. Delgado had previously pled guilty to possession of a stolen handgun, in violation of Title 18, United States Code, Sections 922(j) and 924(a)(2). At today’s hearing, U.S. District Judge K. Michael Moore sentenced Delgado to 120 months in prison to be followed by three years of supervised release.

On November 14, 2012, defendant Delgado was arrested by officers of the St. Lucie County Sheriff’s Office, after he was spotted carrying a prohibited firearm in public and fled police pursuit into his home in Fort Pierce. Following Delgado’s surrender to the police who surrounded the home, a state search warrant issued for the home. The search resulted in the seizure of two firearms found in Delgado’s home (a .22 caliber TEC-22 short barreled rifle modified with an added stock, and a homemade silencer) as well as the .40 caliber Smith & Wesson handgun Delgado was carrying as he fled police, which was found outside on the ground. According to court records, Delgado had been deprived of the right to possess firearms following previous felony convictions. Judge Moore imposed the maximum sentence under federal law, noting the defendant’s extensive criminal history going back to the age of nine years old.

Mr. Ferrer commended the investigative efforts of ATF, the Fort Pierce Police Department, and the St. Lucie County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Theodore Cooperstein.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s, Homeland Security Investigations (ICE-HSI), Miami Field Office, U.S. Consumer Product Safety Commission (CPSC), and Vernon Foret, Director Field Operations, U.S. Customs and Border Protection (CBP), Miami Field Office, announced today that defendants Hung Lam, 55, and Isabella Kit Yeung, 37, both of Miami-Dade County, and Florida corporations LM Import-Export, Inc. (LM), Lam’s Investment Corp. (LIC), and LK Toys Corporation, (LK) were sentenced for violations regarding the smuggling of hazardous children’s products from China.

Lam was sentenced by U.S. District Court Judge Kathleen M. Williams to 22 months incarceration, a $10,000.00 fine, three years of supervised release and a $200 special assessment. LM, LIC, and LK were sentenced to five years’ probation and an $800 special assessment. Yeung was sentenced to one year of probation, a $1,000 fine and $25 special assessment. In addition, a forfeiture judgment and order in the amount of $862,500 was imposed against the defendants. The judgment also ordered the forfeiture of property imported by defendants and seized by the United States.

The sentencing was based on defendant Hung Lam’s earlier guilty plea to one count of conspiracy to traffic and smuggle children’s products, including toys, containing banned hazardous substances, such as lead and small parts, in violation of 18 U.S.C. § 371, and one count of trafficking in counterfeit goods, in violation of 18 U.S.C. § 2320. Co-defendant Isabella Kit Yeung pled guilty to one misdemeanor count of submitting a false label country of origin, in violation of 19 U.S.C. §1304(a).

According to the documents filed with and statements made in court, from approximately April 2000 through May 2011, defendants Lam, LM, LIC, and LK conspired to sell and distribute in commerce children’s products imported from China in violation of the Consumer Product Safety Act and the Federal Hazardous Substances Act. These products allegedly presented the risk of choking, aspiration, and ingestion, and some contained lead above the allowed statutory limits. The defendants imported these products by means of false statements on custom declaration forms. Yeung was charged with the misdemeanor count of importing goods without the required country of origin labeling.

Mr. Ferrer commended the investigative efforts of ICE-HSI, CPSC, and CBP. This case is being prosecuted by Assistant U.S. Attorneys Norman O. Hemming, III and Daren Grove.

A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.