Northern District of Illinois

CHICAGO — The former Chief Financial Officer of a Chicago hospital schemed with a colleague and the owner of a medical supply company to embezzle more than $15 million in hospital funds, according to a superseding indictment returned in U.S. District Court in Chicago.

As the hospital’s CFO, ANOSH AHMED was responsible for managing the hospital’s finances, including its Finance, Accounting, and Accounts Payable departments.  From 2018 to 2022, Ahmed schemed with the hospital’s Chief Transformation Officer, HEATHER BERGDAHL, and the medical supply company owner, SAMEER SUHAIL, to cause the hospital to issue payments to vendor companies for purported goods and services that the defendants knew had not been provided, the indictment states.  Many of the purported vendor companies were created by Suhail and Ahmed under various names to conceal their association with the fraudulent payments, the indictment states.  Bergdahl opened bank accounts in the names of two legitimate hospital vendors and caused the hospital to deposit fraudulent payments into those accounts, the indictment states. 

In an effort to conceal the scheme, Ahmed, Bergdahl, and Suhail allegedly created fictitious invoices, payment requests, delivery receipts, and other false documents about goods and services purportedly provided to the hospital.  As a result of the scheme, the defendants caused the hospital to pay more than $15 million into bank accounts that they controlled, the indictment states.

The superseding indictment was returned on Thursday.  It charges Ahmed, 40, of Houston, Texas, with eight counts of wire fraud, four counts of embezzlement, eleven counts of aiding and abetting embezzlement, and three counts of money laundering.  Bergdahl, 37, of Houston, Texas, is charged with 14 counts of wire fraud, 21 counts of embezzlement, and one count of money laundering.  Suhail, 47, of Chicago, is charged with six counts of wire fraud, six counts of aiding and abetting embezzlement, and two counts of money laundering.  Arraignments in federal court in Chicago have not yet been scheduled.

The superseding indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, Mario Pinto, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of Inspector General, and Jason Bushey, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  The government is represented by Assistant U.S. Attorneys Sheri H. Mecklenburg and Kelly L. Guzman.  The officials noted that the investigation remains ongoing.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Ahmed et al superseding indictment

CHICAGO — A man has been sentenced to 15 years in federal prison for trafficking fentanyl and illegally possessing a loaded handgun in Chicago.

ERIC BROWN possessed the drugs and gun on Oct. 19, 2021, near the intersection of North St. Louis Avenue and West Iowa Street in Chicago’s Humboldt Park neighborhood.  Brown carried a satchel that contained the handgun and 400 pills of a substance that Brown knew included fentanyl.  When Chicago Police officers approached the intersection, Brown attempted to hide the gun by placing it in the wheel well of a nearby car.  The officers recovered the gun, arrested Brown, and discovered the pills in his possession.

Brown, 34, of Chicago, pleaded guilty last year to federal drug and firearm charges.  U.S. District Judge John J. Tharp, Jr., imposed the sentence Monday during a hearing in federal court in Chicago.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Larry Snelling, Superintendent of the Chicago Police Department.  Valuable assistance was provided by the Chicago Field Division of the U.S. Drug Enforcement Administration.

“Drugs, and especially fentanyl, are a scourge to the public health and to law enforcement across the country, and a stain on the community,” Assistant U.S. Attorney Alejandro G. Ortega argued in the government’s sentencing memorandum.  “The defendant did not think of the people he was harming when he possessed the fentanyl with intent to distribute it; he was only thinking of the profit he would make by selling the drugs.”

Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods (PSN) – the Department of Justice’s violent crime reduction strategy.  In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

WASHINGTON – The Justice Department today announced the seizure of two domain names and the search of 968 social media accounts used by Russian actors to create an artificial intelligence-enhanced social media bot farm that spread disinformation in the United States and abroad. They used elements of artificial intelligence (AI) to create fictitious social media profiles – often purporting to belong to individuals in the United States – which the operators then used to promote messages in support of Russian government objectives, according to affidavits unsealed today.

In conjunction with the domain seizures and search warrant announced today, the FBI and the Cyber National Mission Force (CNMF), in partnership with the Canadian Centre for Cyber Security (CCCS), the Netherlands General Intelligence and Security Service (AIVD), Netherlands Military Intelligence and Security Service (MIVD), and the Netherlands Police released a joint cybersecurity advisory detailing the technology behind the social media bot farm, including details regarding how the bot farm’s creators leveraged their bespoke AI system in furtherance of the scheme. The advisory will allow social media platforms and researchers to identify and prevent the Russian government’s further use of the technology. In addition, X Corp. (formerly, Twitter) voluntarily suspended the remaining bot accounts identified in the court documents for terms of service violations.

“With these actions, the Justice Department has disrupted a Russian-government backed, AI-enabled propaganda campaign to use a bot farm to spread disinformation in the United States and abroad,” said Attorney General Merrick B. Garland. “As the Russian government continues to wage its brutal war in Ukraine and threatens democracies around the world, the Justice Department will continue to deploy all of our legal authorities to counter Russian aggression and protect the American people.”

“Today’s action demonstrates that the Justice Department and our partners will not tolerate Russian government actors and their agents deploying AI to sow disinformation and fuel division among Americans,” said Deputy Attorney General Lisa Monaco. “As malign actors accelerate their criminal misuse of AI, the Justice Department will respond and we will prioritize disruptive actions with our international partners and the private sector.  We will not hesitate to shut down bot farms, seize illegally obtained internet domains, and take the fight to our adversaries.”

“Today’s actions represent a first in disrupting a Russian-sponsored Generative AI-enhanced social media bot farm,” said FBI Director Christopher Wray. “Russia intended to use this bot farm to disseminate AI-generated foreign disinformation, scaling their work with the assistance of AI to undermine our partners in Ukraine and influence geopolitical narratives favorable to the Russian government. The FBI is committed to working with our partners and deploying joint, sequenced operations to strategically disrupt our most dangerous adversaries and their use of cutting-edge technology for nefarious purposes.”

“We support all civic engagement, civil dialogue, and a robust exchange of ideas,” said U.S. Attorney Gary Restaino for the District of Arizona. “But those ideas should be generated by Americans, for Americans. The disruption announced today protects us from those who use unlawful means to seek to mislead our citizens and our communities.”

“The disruption announced today is the result of a combined response with our international partners to a serious and unique threat,” said Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois. “Multiple U.S. and foreign governmental components worked closely and efficiently to address the threat and develop and execute a mitigation strategy. Through vigorous enforcement efforts and collaborative international partnerships, the Justice Department works tirelessly to disrupt criminal cyber activity.”

Overview

According to court documents, a bot farm is an enhanced software package which allows for the creation of false personas on social media platforms. Bot farms are enhanced by integrating components which contain artificial intelligence, such as image production or text generation.

As described in the affidavits filed in support of the warrants, development of the social media bot farm was organized by an individual identified in Russia (Individual A). In early 2022, Individual A worked as the deputy editor-in-chief at RT, a state-run Russian news organization based in Moscow. Since at least 2022, RT leadership sought the development of alternative means for distributing information beyond RT’s standard television news broadcasts. In response, Individual A led the development of software that was able to create and to operate a social media bot farm. As planned, the social media bot farm would create fictitious online personas for social media accounts, through which RT, or any operator of the bot farm, could distribute information on a wide-scale basis. The development was executed by Individual B and others, who hid their identities and location (Russia) while beginning to purchase infrastructure for the social media bot farm in April 2022.

In early 2023, with the approval and financial support of the Presidential Administration of Russia (aka “the Kremlin”), a Russian FSB officer (FSB Officer 1) created and led a private intelligence organization (P.I.O.), as explained in the affidavits. The P.I.O.’s membership was comprised of, among others, employees at RT, including Individual A. The true purpose of the P.I.O. was to advance the mission of the FSB and the Russian government, including by spreading disinformation through the social media accounts created by the bot farm.

According to the affidavits, FSB Officer 1, Individual A, and other members of the PIO had access to the social media bot farm. The following are examples of Russian-government narratives that the bot farm posted on X in October and November 2023:

• A purported U.S. constituent replied to a candidate for federal office’s social media posts regarding the conflict in Ukraine with a video of President Putin justifying Russia’s actions in Ukraine;
• A purported resident of Minneapolis, Minnesota, posted a video of President Putin discussing his belief that certain geographic areas of Poland, Ukraine, and Lithuania were “gifts” to those countries from the Russian forces that liberated them from Nazi control during World War II;
• A purported U.S. resident of a city identified only as “Gresham,” posted a video claiming that the number of foreign fighters embedded with Ukrainian forces was significantly lower than public estimates.
• The same purported individual posted a video of President Putin claiming that the war in Ukraine is not a territorial conflict or a matter of geopolitical balance, but rather the “principles on which the New World Order will be based.”

To register the fictitious social media accounts, the social media bot farm relied on private email servers, which in turn relied on the two domain names seized by the FBI. An individual who controls an internet domain can create email accounts using the domain. For example, an individual controlling the domain name www.example.com can create email accounts using @example.com (e.g., EmailAddress@example.com). Here, the actors obtained and controlled the domain names “mlrtr.com” and “otanmail.com” from a U.S.-based provider. They then used those domains to create the email servers that ultimately allowed them to create fictitious social media accounts using the bot farm software.

The FSB’s use of U.S.-based domain names, which the software used to register the bots, violates the International Emergency Economic Powers Act. In addition, the accompanying payments for that infrastructure violate federal money laundering laws.

The Justice Department commends members of the private sector who coordinated with law enforcement efforts on this disruption, including X for its voluntary efforts to suspend the identified bot accounts from its platform. Prior to the government’s action, X identified and suspended a significant number of the bot accounts.

The Justice Department’s investigation is ongoing.

The National Security Division’s National Security Cyber Section, U.S. Attorney’s Office for the District of Arizona, and U.S. Attorney’s Office for the Northern District of Illinois are prosecuting the case, with valuable assistance from the National Security Division’s Counterintelligence and Export Control Section.

Three former executives of Outcome Health (Outcome), a Chicago-based health technology start-up company, were sentenced for their roles in a fraud scheme that targeted the company’s clients, lenders, and investors and involved approximately $1 billion in fraudulently obtained funds.

• Rishi Shah, 38, a co-founder and former CEO of Outcome, was sentenced on June 26 to seven years and six months in prison.
• Shradha Agarwal, 38, a co-founder and former president of Outcome, was sentenced yesterday to three years in a half-way house.
• Brad Purdy, 35, the former chief operating officer and chief financial officer of Outcome, was also sentenced yesterday to two years and three months in prison.

“Outcome’s former executives deceived their clients, their auditor, their lenders, and their investors for years,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Their sentences should serve as yet another reminder that ‘faking it until you make it’ is not an acceptable practice for any business, whether that company is a technology start-up or a well-established corporation. Lying about your revenue to obtain customers or financing is fraud, plain and simple. The Criminal Division is committing to holding companies and their executives accountable for their misconduct.”

“The defendants’ vast scheme defrauded the clients, investors, and lenders who supported their business,” said Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois. “Although they sought to hide the fraud by silencing whistleblowers and duping auditors, a jury rightly held the defendants accountable for their extensive fraud scheme. Our office will continue to work tirelessly with our law enforcement partners to deliver justice for the victims of complex fraud schemes.”

According to court documents and evidence presented at trial, Outcome, which was founded in 2006 and known as Context Media prior to January 2017, installed television screens and tablets in doctors’ offices across the United States and then sold advertising space on those devices to clients, most of which were pharmaceutical companies. Shah, Agarwal, and Purdy sold advertising inventory the company did not have to Outcome’s clients and then under-delivered on its advertising campaigns. Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full. Shah, Agarwal, and Purdy lied or caused others to lie to conceal the under-deliveries from clients and make it appear as if the company was delivering advertising content to the number of screens in the clients’ contracts. Purdy and others at Outcome also inflated metrics that purported to show how frequently patients engaged with Outcome’s tablets installed in doctors’ offices. According to the trial evidence, the scheme targeting Outcome’s clients began in 2011 and lasted until 2017, and resulted in at least $45 million of overbilled advertising services.

“This was an elaborate, billion-dollar fraud scheme by three people who were supposed to be leaders of the company,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response, and Services Branch. “Instead, these now former executives attempted to illegally line their own pockets. This type of fraud and abuse takes critical resources out of our health care system, and the FBI will always work with our law enforcement partners to investigate and prosecute anyone who intends to defraud the American public.”

Shah, Agarwal, and Purdy also defrauded Outcome’s lenders and investors. The under-delivery to Outcome’s advertising clients resulted in a material overstatement of Outcome’s revenue for the years 2015 and 2016. The company’s outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy caused others to fabricate data to conceal the under-deliveries from the auditor. Shah, Agarwal, and Purdy then used the inflated revenue figures in Outcome’s 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016, and $487.5 million in equity financing in early 2017. The $110 million debt financing resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal, and the $487.5 million in equity financing resulted in a $225 million dividend that benefited Shah and Agarwal.

“The defendants in this case have been brought to justice for their actions in deceiving Outcome Health’s clients and fraudulently obtaining approximately $1 billion from its lenders and investors,” said Assistant Inspector General for Investigations Shimon R. Richmond of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG). “The FDIC-OIG will continue to work alongside our law enforcement partners to hold accountable individuals who harm lenders, investors, and clients by committing such fraudulent acts." 

A federal jury convicted Shah, Agarwal, and Purdy in April 2023. Shah was convicted of five counts of mail fraud, 10 counts of wire fraud, two counts of bank fraud, and two counts of money laundering. Agarwal was convicted of five counts of mail fraud, eight counts of wire fraud, and two counts of bank fraud. Purdy was convicted of five counts of mail fraud, five counts of wire fraud, two counts of bank fraud, and one count of false statements to a financial institution.

Three other former Outcome employees pleaded guilty prior to trial. Ashik Desai, the former chief growth officer, pleaded guilty to one count of wire fraud. Kathryn Choi, a former senior analyst, and Oliver Han, a former analyst, both pleaded guilty to conspiracy to commit wire fraud. Desai will be sentenced on Sept. 20. Choi and Han will be sentenced on Oct. 4 and Oct. 11, respectively.

The FBI and FDIC-OIG investigated the case. The U.S. Securities and Exchange Commission provided assistance in the case. 

Assistant Chief Kyle C. Hankey of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jason Yonan, Corey Rubenstein, and William Hogan for the Northern District of Illinois prosecuted the case. Former Assistant Chief William E. Johnston of the Criminal Division’s Fraud Section and former Assistant U.S. Attorneys Matthew F. Madden and Saurish Appleby-Bhattacharjee for the Northern District of Illinois also prosecuted the case through trial.

CHICAGO — A suburban Chicago physician has pleaded guilty to federal health care fraud charges for billing Medicaid and private insurers for nonexistent services.

MONA GHOSH owned and operated Progressive Women’s Healthcare, S.C., a medical office in Hoffman Estates, Ill., specializing in obstetrics and gynecology services.  From 2018 to 2022, Ghosh submitted and caused her employees to submit fraudulent claims to Medicaid, TRICARE, and numerous other insurers for procedures and services that were not provided or were not medically necessary, some of which were performed without patient consent.  Ghosh also fraudulently overstated the length and complexity of in-office and telemedicine visits and submitted claims using billing codes for which the visits did not qualify in order to seek higher reimbursement rates, her plea agreement states.  Ghosh admitted in the plea agreement that she prepared false patient medical records to support the fraudulent reimbursement claims. 

Ghosh, 51, of Inverness, Ill., pleaded guilty Thursday to two counts of health care fraud.  Each count is punishable by up to ten years in federal prison.  U.S. District Judge Franklin U. Valderrama set sentencing for Oct. 22, 2024.

It is the government’s position that Ghosh is accountable for at least $2.4 million in fraudulently obtained reimbursements.  Ghosh admitted in the plea agreement that she is accountable for more than $1.5 million of such fraudulently obtained reimbursements.  The final amount will be determined by the Court at sentencing.

The plea agreement was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois; Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; Darrin K. Jones, Special Agent-in-Charge of the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Southeast Field Office; Mario Pinto, Special Agent-in-Charge of the Chicago Division of the U.S. Department of Health and Human Services, Office of Inspector General; and Kwame Raoul, Illinois Attorney General.  The government is represented by Assistant U.S. Attorney Misty N. Wright.

Ghosh plea agreement

CHICAGO — A suburban Chicago man has been sentenced to 16 years in federal prison for selling fentanyl-laced heroin.

CALVIN CARTER sold the drugs on two occasions in the fall of 2019.  The first sale occurred in a gas station parking lot in Olympia Fields, Ill., and the second occurred in a liquor store parking lot in Country Club Hills, Ill.  Unbeknownst to Carter, the buyer in both transactions was surreptitiously cooperating with law enforcement.

Carter, 44, of Country Club Hills, Ill., pleaded guilty earlier this year to federal drug distribution charges.  In imposing the 16-year prison sentence on June 20, 2024, U.S. District Judge Manish S. Shah found that the government proved Carter possessed a firearm in connection with the drug offenses.  Multiple firearms were discovered during a court-authorized search of Carter’s residence shortly after the drug sales.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Sheila G. Lyons, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration.  Substantial assistance was provided by the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, FBI, Illinois State Police, and Chicago Police Department. 

“Defendant possessed almost one kilogram of heroin and fentanyl that he intended to distribute to others,” Special Assistant U.S. Attorney Niranjan Emani argued in the government’s sentencing memorandum.  “The type of drugs that defendant sold and intended for distribution have devastating effects on the community.”

The government was represented by Mr. Emani and Assistant U.S. Attorneys Tiffany Ardam and Kristen Totten.

CHICAGO — A businessman who operated two companies in a Chicago suburb has been sentenced to more than a year in federal prison for scheming to embezzle more than $950,000 from a client.

DONALD E. MUDD, 66, of Palm Beach Gardens, Fla., pleaded guilty earlier this year to a mail fraud charge.  U.S. District Judge Elaine E. Bucklo on June 21, 2024, sentenced Mudd to 15 months in federal prison.  Judge Bucklo also fined Mudd $60,000 and ordered him to pay $951,755 in restitution.

Mudd was the president of Mudd-Lyman Sales and Services and the manager of Simply Service LLC, both of which were based in Skokie, Ill.  The businesses helped to market their clients’ products and facilitated the placement of goods in national hardware store chains.  One of Mudd’s clients was a New York-based sealant manufacturer where co-defendant RODNEY HAWKINS worked as a vice president.  Mudd admitted in a plea agreement that he schemed with Hawkins to embezzle funds from Hawkins’s employer by fraudulently inflating commissions and submitting false invoices for services that were never rendered.  After receipt of the funds from the false invoices, Mudd and Hawkins split the proceeds.

Hawkins, 57, of Newton, N.C., pleaded guilty last year to a mail fraud charge and admitted his role in the scam.  Hawkins is awaiting sentencing.

Mudd’s sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorney Michelle Petersen.

Below are statements from Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the FBI Chicago Field Office, following the sentencing today in U.S. v. Edward M. Burke:

“Corruption in the Chicago City Council tears at the fabric of a vital body of local government,” said Morris Pasqual, Acting United States Attorney for the Northern District of Illinois. “When an alderman fails to discharge his duties with honesty and integrity, he betrays not only the citizens of Chicago, but his fellow public officials who do their jobs the right way. Our office will continue to vigorously prosecute corruption and hold public officials accountable for violating the public trust.”

“Aldermen are elected by their constituents to advocate for the public good,” said Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the FBI Chicago Field Office. “Bribery and extortion are contrary to that simple mission, and today’s sentencing highlights the consequences of betraying the public’s trust for one’s own illegal gains. The FBI is proud to work with partners at all levels of government to stamp out public corruption in northern Illinois.”

CHICAGO — The U.S. Attorney’s Office in Chicago has sought to file a complaint in intervention in a pending lawsuit against Itasca, Ill., alleging the village engaged in unlawful disability discrimination in reviewing and ultimately denying a zoning request filed by a non-profit health care provider to use its property as a treatment center for people with substance-use disorders.

Haymarket DuPage LLC contracted in 2019 to purchase a hotel in Itasca with plans to repurpose it into a specialized treatment center offering health care services to treat substance-use disorders and related mental health disabilities.  Haymarket’s main treatment center is in Chicago’s West Loop neighborhood and offers a range of services, including detoxification support, inpatient and outpatient treatment programs, primary medical and pediatric care, and a program allowing mothers in treatment to remain with their children.  Haymarket has sought for years to expand into DuPage County due to the urgent need for treatment centers in Chicago’s western suburbs.

The complaint in intervention that the U.S. Attorney’s Office seeks to file contends that the village engaged in disparate treatment by employing a host of highly anomalous tactics to frustrate Haymarket’s application for zoning approval.  The complaint alleges that village officials concocted a pretextual narrative that the treatment center would impose severe economic harms on the region, while also fanning the flames of residents’ fears by issuing numerous public statements disparaging Haymarket and its supporters.  The complaint contends that the village also failed to fulfill its accommodation obligations under the Americans with Disabilities Act prior to denying Haymarket’s zoning request.

The U.S. Attorney’s Office’s motion to intervene in the lawsuit was filed Thursday in federal court in Chicago.  It was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois.  The government is represented by Assistant U.S. Attorneys Jordan A. Rosen, Sarah F. Terman, and Patrick W. Johnson.

Motion to Intervene

CHICAGO — A Chicago consultant was sentenced today to a year in federal prison for underreporting and failing to file federal income taxes.

ANNAZETTE COLLINS, 62, of Chicago, willfully filed a false individual tax return for the calendar years 2014 and 2015, and willfully failed to file an individual income tax return for the calendar year 2016.  Collins also willfully failed to file a corporate income tax return for the calendar year 2016 on behalf of her consulting and lobbying business, Chicago-based Kourtnie Nicole Corp.  Prior to operating her consulting business, Collins served in the Illinois General Assembly as a Representative and Senator.

A jury earlier this year convicted Collins on federal tax charges.  In addition to the prison sentence, U.S. District Judge Jorge L. Alonso ordered Collins to pay $110,852 in restitution.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Jason Bushey, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government was represented by Assistant U.S. Attorneys Michelle J. Parthum and Amarjeet S. Bhachu.

A Chicago health care company and its former owners will pay nearly $2 million to the United States and the States of Illinois and Indiana to resolve a civil lawsuit arising from the submission of false claims to Medicare and Medicaid. 

The settlement resolves allegations that KAREFIRST MANAGEMENT, an independent nurse practitioner group, developed its own proprietary patient charting software and required its nurse practitioners to use it, despite knowing that it resulted in fraudulently upcoded claims being submitted to and paid by Medicare and Medicaid.  The suit alleged that KareFirst contracted out nurse practitioners to see patients at skilled nursing facilities across the Chicago area.  Those nurse practitioners charted all patient visits using the software developed by KareFirst.  The software then generated false, upcoded claims that KareFirst submitted to Medicare and Medicaid for payment. 

The settlement resolves a civil lawsuit filed in U.S. District Court in Chicago by a former employee of KareFirst under the qui tam, or whistleblower, provisions of the False Claims Act.  The False Claims Act permits private citizens to bring lawsuits on behalf of the U.S. for false claims, and to share in any recovery.  The U.S. intervened in the lawsuit prior to the settlement. 

As part of the settlement agreement and consent order entered Friday by U.S. District Chief Judge Rebecca R. Pallmeyer, KareFirst and its former owners agreed to pay $1.99 million to Medicare and Medicaid over the next three years.

The settlement and consent judgment were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Mario Pinto, Special Agent-in-Charge of the Chicago Division of the U.S. Department of Health and Human Services, Office of Inspector General, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government was represented by Assistant U.S. Attorney Sarah F. Terman.

The public is reminded that civil allegations are accusations only, and there was no determination of liability as part of the settlement and consent judgment.

KareFirst consent judgment and settlement agreement

CHICAGO — The U.S. Attorney’s Office in Chicago today joined federal, state, and local partners in recognizing World Elder Abuse Awareness Day, which seeks to increase understanding of the many forms of elder abuse and the resources available to those at risk.

Elder abuse is an act that knowingly, intentionally, or negligently causes or creates a serious risk of harm to an older person by a family member, caregiver, or other person in a relationship of trust.  Such harm may be financial, physical, sexual, or psychological.

“The U.S. Attorney’s Office is committed to investigating and prosecuting perpetrators who target the elderly and other vulnerable individuals for abuse,” said Morris Pasqual, Acting United States Attorney for the Northern District of Illinois.  “On World Elder Abuse Awareness Day, our office reminds seniors and their caregivers to remain constantly vigilant to detect and report fraudulent schemes.”

“We know that the vast majority of elder abuse cases go unreported and that too many victims remain unseen,” said Attorney General Merrick B. Garland.  “That is why the Department of Justice has aggressively targeted perpetrators of elder fraud and abuse, while providing victims with the support they need.”

In the past five years, the Department of Justice has pursued more than 1,500 criminal and civil cases involving conduct that targeted or disproportionately affected older adults.   The Department has also returned hundreds of millions of dollars to elder fraud victims.

In the Northern District of Illinois, recent cases highlight the Department’s efforts to combat elder abuse:

Last month, Chicago businessman MARK STEVEN DIAMOND pleaded guilty to a federal fraud charge for bilking elderly homeowners in a home repair and reverse mortgage scheme.  Diamond and the co-schemers targeted elderly victims based on the amount of equity in their homes and their relative lack of financial sophistication.  Diamond is scheduled to be sentenced on Sept. 4, 2024.

In March, the U.S. Attorney’s Office seized suspected fraud proceeds of approximately $1.4 million of Tether (USDT), a cryptocurrency pegged to the U.S. dollar.  The perpetrators, posing as tech support employees, informed victims who clicked on a computer popup that their bank accounts had been compromised.  The perpetrators convinced the victims to convert money from traditional bank accounts into cryptocurrency to keep it “safe” from hackers.  The scheme, which remains under investigation, impacted elderly victims throughout the U.S. 

SUZANA VUKANAC was indicted in December on money laundering charges for allegedly receiving and transferring more than $1 million in cash derived from telemarketing and other online fraud schemes.  Vukanac’s co-conspirators allegedly sold non-existent goods to victims, including the elderly, and falsely posed as romantic partners in need of money.  Vukanac has pleaded not guilty and is awaiting trial.

In the fight to combat elder abuse, the Department of Justice maintains a variety of programs and initiatives:

• The Transnational Elder Fraud Task Force marshals federal and state agencies working collaboratively to investigate and prosecute foreign-based schemes that target older Americans.  This initiative provides the public with information to guard against both traditional scams, such as tech support fraud, as well as trending schemes, such as romance scams.
• The Money Mule Initiative addresses money mule activity to disrupt these fraud schemes, and helps people to recognize and avoid participation in perpetuating fraud.  In a money mule scheme, scammers recruit unsuspecting people, many times older victims, to move money in ways that avoid notice.
• To help older individuals and their families identify and avoid fraudulent activity, the Justice Department provides Senior Scam Alerts with information about tactics used in specific schemes, such as Social Security Administration impostor schemes, tech support scams, and lottery scams.

To learn more about the Department’s elder justice efforts please visit the Elder Justice Initiative page.  To report elder fraud, contact the National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311, or visit the FBI’s Elder Fraud Complaint Center at IC3.gov.

CHICAGO — Two men have been charged in federal court in Chicago with operating “Empire Market,” a dark web marketplace that enabled users to anonymously buy and sell more than $430 million in illegal goods and services around the world.

THOMAS PAVEY, also known as “Dopenugget,” 38, of Ormond Beach, Fla., and RAHEIM HAMILTON, also known as “Sydney” and “Zero Angel,” 28, of Suffolk, Va., owned and operated Empire Market from 2018 to 2020, during which time they facilitated approximately four million transactions between vendors and buyers valued at more than $430 million, according to a superseding indictment returned Thursday in U.S. District Court in Chicago.  The indictment charges Pavey and Hamilton with conspiring with each other and others to engage in drug trafficking, computer fraud, access device fraud, counterfeiting, and money laundering.  The charges in the superseding indictment are punishable by a maximum sentence of life in federal prison.

Pavey and Hamilton are in U.S. law enforcement custody.  Arraignments in federal court in Chicago have not yet been scheduled.

The superseding indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, Ruth Mendonça, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service, and Ivan J. Arvelo, Special Agent-in-Charge of the New York office of Homeland Security Investigations.  The government is represented by Assistant U.S. Attorneys Melody Wells and Ann Marie Ursini.

According to the charges, Pavey and Hamilton previously worked together to advertise and sell counterfeit U.S. currency on AlphaBay, a dark web marketplace for illicit goods that was shut down in 2017.  They began operating Empire Market on Feb. 1, 2018, the indictment states.  Thousands of vendors and buyers accessed Empire Market through a specialized anonymizing software and the site’s address, which ended in “.onion.”  Vendors on Empire Market offered to sell various illicit goods and services, including controlled substances such as heroin, methamphetamine, cocaine, and LSD, as well as counterfeit currency and stolen credit card information, the indictment states.  Buyers could browse the available goods and services by category, including “Fraud,” “Drugs & Chemicals,” “Counterfeit Items,” and “Software & Malware,” among others, the indictment states.  After transactions were completed using cryptocurrency, buyers could review and rate their purchases on multiple criteria, including “stealth,” the indictment states.

During the investigation, federal law enforcement seized cryptocurrency valued at $75 million at the time of the seizures, as well as cash and precious metals.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Pavey et al superseding indictment

CHICAGO – A suburban Chicago tax preparer has been convicted on federal charges for fraudulently assisting customers in obtaining loans under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.

The jury in U.S. District Court in Chicago on Monday convicted HADI ISBAIH, 42, of Palos Heights, Ill., on all four counts of wire fraud against him.  Each count is punishable by up to 20 years in federal prison.  U.S. District Judge Sharon Johnson Coleman has not yet set a sentencing date.

The conviction was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorneys Kartik K. Raman and Rick D. Young.

The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan program (EIDL) were sources of relief established by the CARES Act in 2020.  The programs allowed qualifying small businesses to receive low-interest, government-backed loans to cover a temporary loss of revenue during the Covid pandemic.

According to evidence presented at trial, Isbaih owned and operated Flash Tax Service Inc., a tax preparation business in Bridgeview, Ill.  From May to August 2020, Isbaih submitted on behalf of several Flash Tax customers PPP and EIDL applications that contained materially false statements and misrepresentations about the customers’ businesses, such as gross revenues and number of employees.  Isbaih also prepared and submitted tax returns with the loan applications that falsely represented the number of employees, monthly payroll, gross revenues, and annual income.

Isbaih charged Flash Tax customers an upfront fee of several hundred dollars before he submitted the fraudulent applications.  If the customers received the PPP or EIDL funds based on those applications, Isbaih would then charge the customers additional fees.

Anyone with information about attempted Covid-relief fraud can report it to the Department of Justice by calling the National Center for Disaster Fraud Hotline at 866-720-5721, or by completing a NCDF online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

CHICAGO — Two men have been indicted on federal racketeering charges for allegedly murdering a teenager to maintain and increase their positions in a violent Chicago street gang.

GARY ROBERSON, 40, and JOSEPH MATOS, 41, both of Chicago, are charged with racketeering and firearm offenses in an indictment unsealed Thursday in U.S. District Court in Chicago.  The indictment accuses the pair of murdering Chrys Carvajal on July 3, 2021, for the purpose of maintaining and increasing their positions in the Milwaukee Kings street gang.  Carvajal, 19, was fatally shot in the Belmont Cragin neighborhood on Chicago’s Northwest Side.

The indictment alleges that the Milwaukee Kings is a criminal organization whose members and associates engaged in narcotics trafficking and committed acts of violence, including murder and assault, to acquire and preserve the gang’s perceived territory on the North Side of Chicago.  Members of the gang intimidated rival gang members, victims, and witnesses through acts and threats of violence, boasted about their gang on social media, and took steps designed to prevent law enforcement from detecting their criminal activities, according to the indictment.

Roberson was arrested last month and has pleaded not guilty to the charges.  He was ordered to remain detained in federal custody pending trial.  Matos is not in custody and a warrant has been issued for his arrest.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, and Larry Snelling, Superintendent of the Chicago Police Department.  The government is represented by Assistant U.S. Attorneys Prashant Kolluri, Caitlin Walgamuth, and Kirsten Moran.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Murder in aid of racketeering is punishable by a mandatory sentence of life in prison, and the death penalty is also possible.   If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

Roberson et al indictment

CHICAGO — A suburban Chicago man has been charged in federal court with stealing more than $9.5 million in goods, including liquor and commercial-grade copper, from interstate shipments.

According to an indictment unsealed Wednesday in U.S. District Court in Chicago, AIVARAS ZIGMANTAS used various aliases to falsely pose as a representative of real and fictitious carriers and brokers involved in transporting shipments across state lines.  After fraudulently inducing individuals and entities to release shipments of goods to him, Zigmantas and others diverted the shipments from their intended destinations and stole the goods, the indictment states.  As part of the fraud scheme, Zigmantas used aliases to open bank accounts and UPS Store mailboxes, and he created email addresses and websites in the names of fake individuals and entities, the indictment states.

The indictment alleges that Zigmantas and others intended to steal at least $13.5 million in goods, and successfully stole more than $9.5 million.

Zigmantas, 39, of Elk Grove Village, Ill., is charged with six counts of wire fraud, five counts of bank fraud, and two counts of theft of interstate shipments.  He was arrested on Wednesday and pleaded not guilty during his arraignment Wednesday afternoon before U.S. Magistrate Judge Keri L. Holleb Hotaling.  A detention hearing is scheduled for June 10, 2024.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sean Fitzgerald, Special Agent-in-Charge of the Chicago office of Homeland Security Investigations, and LaFonda Sutton-Burke, Director of the Chicago Field Office of U.S. Customs and Border Protection.  U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations participated in the investigation.  The government is represented by Assistant U.S. Attorney Misty N. Wright. 

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each count of bank fraud is punishable by up to 30 years in federal prison.  Each count of wire fraud is punishable by up to 20 years, while each theft count is punishable by up to ten years.

Zigmantas indictment

CHICAGO — A federal grand jury has charged a man with illegally possessing a loaded handgun in Chicago’s Lakeview neighborhood last month.

The indictment returned Tuesday in U.S. District Court in Chicago charges RAPHAEL HAMMOND, 37, of Chicago, with illegal possession of a firearm.  The indictment alleges that Hammond illegally possessed the loaded .380-caliber handgun on May 5, 2024.  Shortly after 1:00 a.m., Hammond fired the gun several times while standing on a sidewalk in the 1000 block of West Addison Street in Chicago, according to a criminal complaint previously filed in the case.  At the time of the shooting, Hammond was on court-supervised release from a prior federal firearm conviction that prohibited him from legally possessing a firearm.

The charge in the indictment is punishable by a maximum sentence of 15 years in federal prison.  Arraignment is set for June 18, 2024, at 11:00 a.m., before U.S. Magistrate Judge Jeffrey T. Gilbert.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sean Fitzgerald, Special Agent-in-Charge of the Chicago office of Homeland Security Investigations, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Larry Snelling, Superintendent of the Chicago Police Department.  The government is represented by Assistant U.S. Attorney Saqib M. Hussain.

The investigation was conducted in coordination with ATF’s Crime Gun Intelligence Center of Chicago.  The CGIC is a centralized law enforcement hub that focuses exclusively on investigating and preventing gun violence in Chicago and throughout northern Illinois.  The CGIC is an interagency collaboration that brings together - under one roof - federal, state, and local law enforcement officers, prosecutors, and intelligence analysts to move quickly to investigate and prosecute violent crimes.

Holding firearm offenders accountable through federal prosecution is the centerpiece of Project Safe Neighborhoods, a nationwide Department of Justice initiative that brings together law enforcement officials, prosecutors, community leaders, and other stakeholders to develop comprehensive solutions to the most pressing violent crime problems.  In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Hammond indictment

CHICAGO — A suburban Chicago man has been sentenced to a year in federal prison for falsely overstating in personal tax returns the amount of his business expenses and charitable contributions.

A federal jury earlier this year convicted NIKKO D’AMBROSIO, 32, of Des Plaines, Ill., of making false statements in his personal income tax returns for the tax years 2019 and 2020.  D’Ambrosio, who worked as a salesperson for an Illinois-based electronic sweepstakes kiosk operator, falsely claimed to have driven more than 474,000 miles on business-related travel for those two years.  He also falsely claimed to have incurred more than $263,000 in business-related meal expenses during those years.  D’Ambrosio’s false claims about his charitable contributions involved alleged donations of more than $63,000 to a Catholic church in Chicago.  Financial and vehicle records presented at trial revealed that the mileage and meal expenses were vastly overstated, and a church representative testified that D’Ambrosio was not a parishioner and that the church had no record of any donations by D’Ambrosio in those years.

U.S. District Judge Thomas M. Durkin imposed the year-and-a-day sentence during a hearing Wednesday in federal court in Chicago.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Jason Bushey, Acting Special Agent-in-Charge of IRS Criminal Investigation in Chicago, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government was represented by Assistant U.S. Attorneys Richard M. Rothblatt and Brandon D. Stone.

CHICAGO — A federal grand jury in Chicago has indicted a Mexican resident on drug charges for allegedly illegally importing the drug Pentobarbital into the United States from Mexico for use in committing suicide.

A superseding indictment returned Tuesday in U.S. District Court in Chicago charges DANIEL GONZALEZ-MUNGUIA, also known as “Alejandro Vasquez,” 40, of Puebla, Mexico, with importing and distributing a controlled substance.  The charges in the indictment are punishable by up to 60 years in federal prison.

Gonzalez-Munguia is currently detained in U.S. custody.  Arraignment in federal court in Chicago has not yet been scheduled.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sean Fitzgerald, Special Agent-in-Charge of the Chicago office of Homeland Security Investigations, and Ruth Mendonça, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service.  Valuable assistance was provided by U.S. Customs and Border Protection, the Illinois Army National Guard Counterdrug Program, the U.S. Attorney’s Office for the Southern District of Texas, and law enforcement agencies in Australia, Canada, China, France, Germany, Ireland, South Korea, Spain, Switzerland, and the United Kingdom.  Assistant U.S. Attorney Kartik K. Raman is prosecuting the case.  The officials noted that the investigation remains ongoing.

Pentobarbital, also known as Nembutal, is a drug sold in Mexico in commercially available bottles for the purpose of euthanizing animals.  Pentobarbital is a controlled substance in the U.S. and has been used in state-sponsored executions.

According to the indictment and a criminal complaint previously filed in the case, Gonzalez-Munguia operated an online drug business to facilitate the sale and distribution of Pentobarbital to individuals in the U.S. and throughout the world who were contemplating suicide.  During the investigation, law enforcement located numerous mail parcels that appear to have been shipped out of Mexico by Gonzalez-Munguia.  Authorities in the U.S. and several foreign countries conducted well-being checks and recovered pentobarbital from numerous individuals who admitted to being despondent and ordering the suicide drug online via email addresses operated by Gonzalez-Munguia, the charges allege.  Law enforcement offered assistance to these individuals.  In other instances, individuals who purchased Pentobarbital via the email addresses were later found to be deceased, including individuals in Illinois and several other states and countries, the charges allege.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Gonzalez-Munguia complaint Gonzalez-Munguia superseding indictment

CHICAGO — Two men have been convicted on federal kidnapping charges for conspiring to abduct several victims at gunpoint in the Chicago suburbs.

SEDGWICK WILLIAMS and TAI HON LA conspired with each other and others to carry out the kidnappings in the fall of 2019.  Williams personally participated in kidnappings that occurred in Naperville, Ill., and Westchester, Ill., in October and November 2019.  Williams and La also attempted a third kidnapping in South Holland, Ill., in December 2019.  Their efforts to abduct the intended victim in that incident were unsuccessful, and they were both arrested fleeing from the South Holland residence.

After a two-week trial, on May 22, 2024, a jury in federal court in Chicago convicted Williams and La of participating in the kidnapping conspiracy and the attempted kidnapping in South Holland.  Williams was also convicted on individual kidnapping counts concerning the Naperville and Westchester kidnappings, and with falsely impersonating a federal law enforcement officer.  La was also convicted of illegal firearm possession.

Williams, 47, of Chicago, and La, 34, of Beach Park, Ill., each face a maximum sentence of life in federal prison.  Sentencings have not yet been scheduled.

The convictions were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The case was investigated with the assistance of the Naperville Police Department, Westchester Police Department, South Holland Police Department, Chicago Police Department, the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the DuPage County Sheriff’s Office.  The government is represented by Assistant U.S. Attorneys Jared C. Jodrey, Corey B. Rubenstein, and Kate McClelland.

According to evidence presented at trial, the first kidnapping occurred in Naperville on Oct. 17, 2019, when the conspirators posed as law enforcement officers to handcuff and abduct a man at gunpoint outside of his electronics store, which they then burglarized.  The conspirators forced the victim into their car and transported him to a vacant unit in Chicago, where they physically assaulted him and extorted his family.  Following his release, the victim received medical treatment in a hospital.

The conspirators carried out the kidnapping in Westchester on Nov. 16, 2019.  Posing as DEA agents, the conspirators handcuffed and abducted a man at gunpoint outside of his residence.  The conspirators forced the victim into his home, where they seized another victim and forced them both into the basement.  Two other victims later arrived at the residence and were also forced into the basement at gunpoint.  The conspirators stole cash and jewelry before fleeing the residence.

The conspirators attempted the third kidnapping in South Holland on Dec. 11, 2019, but they were unsuccessful because the intended victim called 911 and the South Holland Police arrived on scene before the conspirators could gain access to the house.

Two other defendants charged in the case pleaded guilty prior to trial.  IVAN AYERS, 36, of Chicago, pleaded guilty to participating in the kidnapping conspiracy.  JONATHAN VARGAS, 38, of Chicago, pleaded guilty to kidnapping the first victim in Naperville.  Ayers and Vargas are awaiting sentencing.

CHICAGO — A federal grand jury has indicted ten defendants, including two sets of brothers, for allegedly conspiring to violently rob armored trucks and automated teller machines in the Chicago suburbs.

Charged with robbery conspiracy and firearm offenses are DEVONTE DAVIS, 27, of Chicago; DARRELL SINGLETON, 19, of Calumet City, Ill., and his two brothers, CORRIE SINGLETON, 22, of South Holland, Ill., and ELIJAH SINGLETON, 21, of Calumet City; ANTHONY WILSON, 22, and his brother, AVEON WILSON, 23, both of Gary, Ind.; BRIAN SNYDER, 24, of Chicago; JUSTIN CAIN, 25, of Chicago; PERRY MAPLE, 21, of Chicago; and WILLIAM COCHRAN, 21, of Chicago.

According to a recently unsealed, second superseding indictment returned in U.S. District Court in Chicago, the robbers brandished firearms in eleven robberies and attempted robberies in 2022 and 2023.  The heists and attempted heists occurred in Lansing, Ill., Country Club Hills, Ill., Orland Park, Ill., Homewood, Ill., Blue Island, Ill., and Chicago Heights, Ill., and resulted in a total loss of at least $3.8 million, the indictment states.

One of the robberies occurred on Halloween morning in 2022 when a Brink’s security courier was refilling an ATM in Lansing.  Corrie Singleton, Darrell Singleton, and others forcibly dragged the courier into the armored truck at gunpoint and ordered her to open compartments and hand over bags of money, according to a criminal complaint previously filed in the case.  Another of the heists occurred on May 2, 2023, when two guards were picking up money from a bank inside of a grocery store in Homewood.  One of the robbers struck a guard in the head with a firearm.  The robbers took approximately $1.1 million, all of which was recovered by law enforcement upon the arrests of Davis and Darrell Singleton later that day in Calumet Park, Ill., according to a criminal complaint previously filed in the case.  Another violent attempted robbery occurred on Oct. 2, 2023, in Country Club Hills, when robbers fired shots at an armored truck guard before carjacking a nearby vehicle to flee the scene, according to a previously filed criminal complaint.

Nine of the ten defendants pleaded not guilty to the superseding charges during arraignments this month in federal court in Chicago. They have been ordered detained in federal custody pending trial.  Aveon Wilson is considered a fugitive and a warrant has been issued for his arrest.  The FBI has issued a reward of up to $20,000 for information leading to Aveon Wilson's arrest and conviction.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  Substantial assistance was provided by the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives in Chicago, Illinois State Police, Cook County Sheriff’s Office, Orland Park Police Department, Evergreen Park, Ill. Police Department, Joliet, Ill. Police Department, Calumet Park Police and Fire Departments, Homewood Police Department, Chicago Police Department, Country Club Hills Police Department, Calumet City Police Department, Dolton, Ill. Police Department, Alsip, Ill. Police Department, and Lansing Police Department.  The government is represented by Assistant U.S. Attorneys Elie Zenner, Kirsten Moran, and Simar Khera.

Holding firearm offenders accountable through federal prosecution is the centerpiece of Project Safe Neighborhoods, a nationwide Department of Justice initiative that brings together law enforcement officials, prosecutors, community leaders, and other stakeholders to develop comprehensive solutions to the most pressing violent crime problems in a community.  In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Davis et al indictment

CHICAGO — A California man has been indicted on federal fraud charges for allegedly swindling a suburban Chicago resident out of $2 million.

RAYMOND ECHAVEZ VILLAMOR, 60, of Newport Beach, Calif., is charged with five counts of wire fraud in an indictment returned in U.S. District Court in Chicago.  Each count is punishable by up to 20 years in federal prison.  Villamor pleaded not guilty to the charges during his arraignment Monday before U.S. Chief Magistrate Judge Young B. Kim.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorney Jared Hasten. 

The officials noted that the investigation remains ongoing.

According to the indictment, Villamor operated a company called Rainbowork, LLC.  Over the course of six months last year, Villamor fraudulently solicited, obtained, and retained an investment of approximately $2 million from an individual residing in Glenview, Ill., the indictment states.  Villamor made false representations about the performance and value of the investment, and falsely promised to repay all of it – with an added return – within a specified period of time, even though he knew he did not have the capability to do so, the indictment states.

Villamor misappropriated the victim’s money to pay for personal expenses, including vehicle purchases, the indictment states.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Villamor indictment

CHICAGO — Four men have been indicted on a federal racketeering charge for allegedly murdering a man to maintain and increase their positions in a violent Chicago street gang.

JOSHUA BROUGHTON, 34, of Chicago, CHRISTOPHER SINGLETON, 24, of Chicago, JARON DAVIS, 22, of Lansing, Ill., and GRIEG MACON, 27, of Chicago, are charged with racketeering and firearm offenses in an indictment unsealed Wednesday in U.S. District Court in Chicago.  The indictment accuses the four defendants of murdering Ogonnia Okeke on June 1, 2021, for the purpose of maintaining and increasing their positions in the Rack City street gang.  Okeke, 25, was fatally shot in the Princeton Park neighborhood on Chicago’s South Side.

The indictment alleges that the Rack City gang is a criminal organization whose members and associates engaged in narcotics trafficking and committed acts of violence to preserve and protect the gang’s perceived territory.  Members of the gang intimidated rivals, victims, and witnesses through acts and threats of violence, boasted about their gang on social media, and took steps designed to prevent law enforcement from detecting their criminal activities, according to the indictment.  Eight other alleged members or associates of the Rack City gang were charged last year with firearm or drug offenses as part of the federal investigation.

Davis was arrested on Wednesday.  He pleaded not guilty during his arraignment Wednesday afternoon in federal court in Chicago.  The three other defendants were previously arrested and remain in federal custody.  The U.S. Attorney’s Office will seek to keep all four defendants detained pending trial.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, and Larry Snelling, Superintendent of the Chicago Police Department.  Valuable assistance was provided by the Illinois State Police Firearm Investigation Unit, IRS Criminal Investigation Chicago Field Office, Rosemont, Ill. Police Department, and Cook County Sheriff’s Office.  The government is represented by Assistant U.S. Attorneys Jimmy L. Arce, Margaret A. Steindorf, and Elly M. Peirson.

The case is part of an Organized Crime Drug Enforcement Task Forces investigation.  OCDETF identifies, disrupts, and dismantles drug traffickers and other criminal offenders that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement against criminal networks.

Murder in aid of racketeering is punishable by a mandatory sentence of life in prison, and the death penalty is also possible.  The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Broughton et al indictment

CHICAGO — Two former board members of the failed Washington Federal Bank for Savings in Chicago were sentenced this month to federal prison terms for conspiring to falsify bank records to deceive the Office of the Comptroller of the Currency.

GEORGE F. KOZDEMBA, 74, of Fort Myers, Fla., and JANICE M. WESTON, 66, of Orland Park, Ill., pleaded guilty last year to a federal conspiracy charge.  U.S. District Judge Virginia M. Kendall on May 9, 2024, sentenced Kozdemba to a year and a day in federal prison and fined him $25,000.  Judge Kendall on May 6, 2024, sentenced Weston to three months in prison and fined her $20,000.  A third Washington Federal board member, WILLIAM M. MAHON, of Chicago, pleaded guilty to conspiracy and tax charges and was sentenced in January to 18 months in prison.

Kozdemba, Weston, and Mahon were members of Washington Federal’s Board of Directors.  Weston also served as the bank’s Senior Vice President and Compliance Officer.  The bank, which was based in Chicago’s Bridgeport neighborhood, was shut down in 2017 after the Office of the Comptroller of the Currency determined that it was insolvent and had at least $66 million in nonperforming loans.  When the OCC was evaluating Washington Federal’s loan portfolio prior to its failure, the board members made and caused to be made false entries in bank records and provided them to the OCC with the intent to deceive the agency and obstruct its examination.  They also falsified records to make it appear that Washington Federal was operating in compliance with banking rules and internal policies and controls.

The sentencings of Kozdemba and Weston were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois; Vincent R. Zehme, Special Agent-in-Charge of the Chicago Region of the FDIC’s Office of Inspector General; Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development's Office of Inspector General in Chicago; Justin Campbell, Special Agent-in-Charge of IRS Criminal Investigation in Chicago; Korey Brinkman, Acting Special Agent-in-Charge of the Central Region of the Federal Housing Finance Agency, Office of Inspector General; Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; Andrea Peacock, Special Agent-in-Charge of the Department of the Treasury, Office of Inspector General; Deborah Witzburg, City of Chicago Inspector General; and Kathryn B. Richards, Chicago Housing Authority Inspector General.  Valuable assistance was provided by the U.S. Trustee Program.  The government is represented by Assistant U.S. Attorneys Michelle Petersen, Kristin Pinkston, and Jeffrey Snell, and Special Assistant U.S. Attorney Brian Netols.

The federal criminal investigation into the bank’s collapse led to criminal charges against a total of 16 defendants, including the bank’s Chief Financial Officer, Treasurer, and other high-ranking employees, for conspiring to embezzle at least $31 million in bank funds.   Four defendants were convicted after jury trials, while ten defendants pleaded guilty and two entered into deferred prosecution agreements.

Much of the money was transferred to Chicago attorney ROBERT M. KOWALSKI and real estate developers MIROSLAW KREJZA and MAREK MATCZUK without all of the required documentation and often without any documentation whatsoever.  Juries last year convicted Robert Kowalski, Krejza, and Matczuk on embezzlement and fraud charges.  They are awaiting sentencing.  Robert Kowalski’s sister, JAN R. KOWALSKI, also an attorney, pleaded guilty and was sentenced last year to more than three years in prison for fraudulently enabling her brother to conceal more than $357,000 from creditors and the trustee in his bankruptcy case.

Chicago attorney PATRICK D. THOMPSON was convicted by a jury in 2022 of making false statements to the Federal Deposit Insurance Corp. regarding the amount of money he received from Washington Federal via a purported loan and other unsecured payments.  He was also convicted of filing tax returns in which he falsely deducted interest that he had not actually paid to Washington Federal.  Thompson was sentenced to four months in federal prison.

CHICAGO — A flight attendant and two bank employees in Indiana have been charged in a federal indictment that accuses a Mexico-based drug trafficking organization of moving thousands of kilograms of cocaine into the United States and laundering tens of millions of dollars in proceeds.

A superseding indictment unsealed Friday in U.S. District Court in Chicago charges flight attendant GLENIS ZAPATA, 34, of Lafayette, Ind., with assisting the traffickers in the transportation of drug proceeds on commercial airline flights.  Glenis Zapata possessed a “Known Crew Member” badge and used her authority to help the traffickers move cash drug proceeds from the Midwest to the southern part of the U.S. and into Mexico, the indictment states.  The traffickers also allegedly used other means to ship the money, including semi-trailer trucks and a private charter airplane that was seized by federal authorities in 2021 at the Gary/Chicago International Airport in Gary, Ind.

The two bank employees – ILENIS ZAPATA, 33, of Lafayette, Ind., and GEORGINA BANUELOS, 39, of Lafayette, Ind. – helped launder the drug proceeds by exchanging lower denominated bills for higher denominated bills, the indictment states.  Ilenis Zapata and Banuelos, who worked together at a bank in Lafayette, Ind., also knowingly and willfully failed to file currency reports for the transactions, as required under federal law, the indictment states.

The superseding indictment added Glenis Zapata, Ilenis Zapata, and Banuelos as defendants and renewed conspiracy and money laundering charges previously filed against 15 others, including the alleged leader of the drug trafficking organization, OSWALDO ESPINOSA, 41, of Mexico; the organization’s primary manager, JORGE BORBON-OCHOA, 46, of Mexico; and the head of its Chicago operations, RICARDO TELLO, 37, of Mission, Texas.  Espinosa’s organization allegedly transported the cocaine in wholesale quantities from Mexico to various U.S. cities, including Chicago, from 2018 to 2023.  The traffickers used warehouses, garages, and stash houses in Chicago to receive and store the cocaine and cash, the indictment states.

Arraignments on the superseding charges have not yet been scheduled.

The superseding indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sheila G. Lyons, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration, LaFonda Sutton-Burke, Director of the Chicago Field Office of U.S. Customs and Border Protection, Sean Fitzgerald, Special Agent-in-Charge of the Chicago office of Homeland Security Investigations, and Justin Campbell, Special Agent-in-Charge of the IRS Criminal Investigation Chicago Field Office.  Substantial assistance was provided by the Federal Deposit Insurance Corporation’s Office of Inspector General and the Lafayette, Ind. Police Department.  The government is represented by Assistant U.S. Attorneys Andrew Erskine, Ashley Chung, and Adam Rosenbloom.

The case is part of an Organized Crime Drug Enforcement Task Forces investigation.  OCDETF identifies, disrupts, and dismantles drug traffickers and other criminal offenders that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement against criminal networks.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Espinosa et al indictment

CHICAGO — A federal grand jury has indicted three men for allegedly conspiring to violently rob several liquor stores and convenience stores in Chicago.

Charged with federal conspiracy and firearm offenses are ARDARIES HARRIS, 26, of Chicago, JORDAN FOX, 24, of Chicago, and ROOSEVELT VEAL, 26, of Rockford, Ill., and formerly of Chicago.  All three defendants have been ordered detained in federal custody pending trial.

According to an indictment returned Monday in U.S. District Court in Chicago, the robbers wore masks and brandished firearms in five heists in November 2023 and January 2024:

• Nov. 24, 2023: Veal and a co-conspirator robbed Super Saving Food, located in the 4400 block of West Belmont Avenue in Chicago.
• Jan. 13, 2024: Harris, Fox, and a co-conspirator robbed Buchanas Food & Liquor, located in the 1800 block of West 47th Street in Chicago.
• Jan. 15, 2024: Harris, Fox, Veal, and a co-conspirator robbed Mr. P Beverage Depot, located in the 2000 block of West Division Street in Chicago.
• Jan. 15, 2024: Harris, Fox, Veal, and a co-conspirator robbed Before You Go Liquor, located in the 1900 block of West Fullerton Avenue in Chicago.
• Jan. 15, 2024: Harris, Fox, Veal, and a co-conspirator robbed Clybourn Market, located in the 2800 block of North Clybourn Avenue in Chicago.

In addition to the five robberies, the indictment alleges that the conspiracy continued until May 4, 2024, and involved additional heists, including robberies of bars in Chicago.  The federal investigation remains ongoing.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Larry Snelling, Superintendent of the Chicago Police Department.  Valuable assistance was provided by Homeland Security Investigations in Chicago and the Illinois State Police.  The government is represented by Assistant U.S. Attorneys Emily C.R. Vermylen and Stephanie Stern.

The investigation was conducted in coordination with ATF’s Crime Gun Intelligence Center of Chicago.  The CGIC is a centralized law enforcement hub that focuses exclusively on investigating and preventing gun violence in Chicago and throughout northern Illinois.  The CGIC is an interagency collaboration that brings together - under one roof - federal, state, and local law enforcement officers, prosecutors, and intelligence analysts to move quickly to investigate and prosecute violent crimes.

Holding firearm offenders accountable through federal prosecution is the centerpiece of Project Safe Neighborhoods, a nationwide Department of Justice initiative that brings together law enforcement officials, prosecutors, community leaders, and other stakeholders to develop comprehensive solutions to the most pressing violent crime problems.  In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Harris et al indictment

CHICAGO — Six individuals conspired to stage armed robberies in Chicago and the suburbs so that the purported victims could apply for U.S. immigration visas reserved for certain crime victims, according to an indictment unsealed in federal court in Chicago.

PARTH NAYI and KEWON YOUNG allegedly organized and participated in staged armed robberies at restaurants, coffee shops, liquor stores, and gas stations in Chicago and the suburbs of Lombard, Elmwood Park, St. Charles, Hickory Hills, River Grove, Lake Villa, and South Holland, as well as restaurants in Rayne, La., and Belvidere, Tenn.  The indictment alleges that BHIKHABHAI PATEL, NILESH PATEL, RAVINABEN PATEL, and RAJNIKUMAR PATEL arranged with Nayi to be “victims” of the staged robberies so that they could submit applications for U nonimmigrant status (“U-visa”), which is set aside for victims of certain crimes who have suffered mental or physical abuse and are helpful to law enforcement or government officials in an investigation or prosecution.

The indictment alleges that individuals paid Nayi thousands of dollars to participate in the scam.  During the staged robberies, individuals acting as robbers brandished what appeared to be firearms, approached the purported victims, and demanded money and property, the indictment states.  Afterwards, some of the purported victims submitted forms to local law enforcement to obtain certification that they were victims of a qualifying crime and had been or would be helpful in the investigation, the indictment states.  Upon receiving certification, some of the purported victims then submitted fraudulent U-visa applications to U.S. Citizenship and Immigration Services predicated upon their alleged status as a robbery victim.

Nayi, 26, of Woodridge, Ill., Young, 31, of Mansfield, Ohio, Bhikhabhai Patel, 51, of Elizabethtown, Ky., Nilesh Patel, 32, of Jackson, Tenn., Ravinaben Patel, 23, of Racine, Wis., and Rajnikumar Patel, 32, of Jacksonville, Fla., are charged with conspiracy to commit visa fraud.  Ravinaben Patel is also charged with an individual count of making a false statement in a visa application.  The conspiracy charge is punishable by a maximum sentence of five years in federal prison, while the false statement charge against Ravinaben Patel is punishable by up to ten years.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, and Sean Fitzgerald, Special Agent-in-Charge of Homeland Security Investigations in Chicago.  The government is represented by Assistant U.S. Attorneys Matthew D. Moyer and Saqib M. Hussain.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Nayi et al indictment

CHICAGO — A former employee of the Augusta National Golf Club in Georgia admitted in federal court in Chicago today that he stole millions of dollars’ worth of Masters golf tournament merchandise and memorabilia and sold it to online brokers.

RICHARD BRENDAN GLOBENSKY, 39, of Augusta, Ga., pleaded guilty in U.S. District Court in Chicago to a federal charge of transporting and transferring stolen goods in interstate commerce.  The conviction is punishable by up to ten years in federal prison.  U.S. District Judge Sharon Johnson Coleman set sentencing for Oct. 29, 2024, at 1:30 p.m.

The guilty plea was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  Valuable assistance was provided by the FBI's Art Crime Team.  The government is represented by Assistant U.S. Attorneys Sean Franzblau and Brian Hayes.

Globensky admitted in a plea agreement that he repeatedly stole the merchandise and memorabilia from 2009 to 2022 while he was employed by the club as a warehouse assistant.  The merchandise included Masters shirts, hats, flags, watches, and other goods, while the memorabilia included historically significant items such as the Green Jackets won by Arnold Palmer, Gene Sarazen, and Ben Hogan, and documents and letters written and signed by Bobby Jones.  Globensky sold the merchandise to the online broker in Florida for a total of approximately $5.3 million, the plea agreement states.  He sold the historically significant memorabilia to the same broker, as well as to the broker’s associate, for nearly $300,000, the plea agreement states. 

The brokers later re-sold the stolen merchandise and memorabilia, often at significant markups from the amounts paid to Globensky.  At least one of the stolen items was purchased by a collector in Chicago.

Globensky plea agreement

CHICAGO — A federal grand jury has indicted a man for allegedly robbing a U.S. Postal Service employee in Chicago.

RICHARD THOMPSON, 52, of Chicago, took an arrow key from the Postal Service employee on Nov. 10, 2023, according to an indictment unsealed Thursday in U.S. District Court in Chicago.  Thompson used a dangerous weapon during the robbery, putting the Postal Service employee’s life in jeopardy, the indictment states.

The indictment charges Thompson with one count of robbery of a Postal Service employee.  The charge is punishable by a maximum sentence of 25 years in federal prison.  Thompson was arrested on Thursday.  He pleaded not guilty during his arraignment Thursday afternoon and was ordered to remain detained in federal custody.  A status hearing is set for June 14, 2024, before U.S. District Judge Andrea R. Wood.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Ruth Mendonça, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service, and Larry Snelling, Superintendent of the Chicago Police Department.  The government is represented by Special Assistant U.S. Attorney Mary McDonnell.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

Thompson indictment

CHICAGO — A man has been sentenced to 15 years in federal prison for illegally possessing a handgun and participating in the murder of a man in Chicago on Labor Day weekend in 2022.

ANDREI TAYLOR illegally possessed the loaded firearm on the afternoon of Sept. 19, 2022, in the Tri-Taylor neighborhood on Chicago’s Near West Side.  Taylor was a passenger in a Kia Optima that had been stolen in a carjacking earlier that afternoon.  When a Chicago Police squad car approached the Kia, Taylor and three other occupants fled the vehicle and ran off on foot.  Taylor tossed the gun, which had an extended magazine, into the backyard of a nearby residence before he was apprehended by police.  Taylor had previously been convicted of three firearm-related felonies in the Circuit Court of Cook County and was not lawfully allowed to possess the gun.

Taylor, 27, of Chicago, pleaded guilty to a federal charge of illegal possession of a firearm by a convicted felon.  U.S. District Judge John J. Tharp, Jr. imposed the prison sentence during a hearing Wednesday in federal court in Chicago.  In addition to the illegal firearm possession, Judge Tharp found that Taylor participated culpably in the premeditated murder of Kadaivion Jones, who was fatally wounded on Sept. 2, 2022, while standing on a sidewalk in Chicago’s West Garfield Park neighborhood.  The handgun illegally possessed by Taylor in the Kia was one of the guns used to shoot Jones.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Larry Snelling, Superintendent of the Chicago Police Department.  The government was represented by Assistant U.S. Attorneys Elie Zenner and Simar Khera.

Holding firearm offenders accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods, a nationwide initiative that brings together law enforcement officials, prosecutors, community leaders, and other stakeholders to develop comprehensive solutions to the most pressing violent crime problems in a community.  In the Northern District of Illinois, the U.S. Attorney’s Office has deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

CHICAGO — A federal judge has sentenced a firearms trafficker to five and a half years in prison for unlawfully dealing guns in Chicago.

From April to June of last year, JESUS SANCHEZ sold seven firearms to an undercover law enforcement agent.  Authorities later conducted a court-authorized search of Sanchez’s residence and discovered, among other things, ten firearm magazines and three boxes of .22-caliber ammunition.  When agents arrived to conduct the search, Sanchez ran from the residence and tossed a firearm into a neighbor’s backyard.  Sanchez had previously been convicted of a gun-related felony and was not lawfully allowed to possess a firearm.

Sanchez, 23, of Chicago, pleaded guilty earlier this year to federal firearm offenses.  U.S. District Judge Matthew F. Kennelly imposed the 66-month prison sentence during a hearing Tuesday in federal court in Chicago.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Larry Snelling, Superintendent of the Chicago Police Department.

“Gun trafficking perpetuates the cycle of violence in this city, which is overwhelmed with gun violence,” Assistant U.S. Attorney Margaret A. Steindorf argued in the government’s sentencing memorandum.  “Defendant’s conduct in this case demonstrated not only a complete disregard for the law, but also had the potential to endanger the community.”

Disrupting illegal firearms trafficking is the focus of the Department of Justice’s Firearms Trafficking Strike Force.  As part of the strike force, the U.S. Attorney’s Office collaborates with ATF, CPD, and other federal, state, and local law enforcement partners in the Northern District of Illinois and across the country to help stem the supply of illegally trafficked firearms and identify patterns, leads, and potential suspects in violent gun crimes.

Holding firearm offenders accountable through federal prosecution is also a centerpiece of Project Safe Neighborhoods, a nationwide initiative that brings together law enforcement officials, prosecutors, community leaders, and other stakeholders to develop comprehensive solutions to the most pressing violent crime problems in a community.  In the Northern District of Illinois, the U.S. Attorney’s Office has deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

CHICAGO — An Illinois businessman has been sentenced to nine years in federal prison for evading nearly half a million dollars in taxes and engaging in a variety of fraud schemes.

JOSEPH J. CIPOLLA JR. knowingly and willfully failed to file individual income tax returns from 2015 to 2020, causing losses of $415,043 to the IRS and $75,045 to the State of Illinois.  Cipolla concealed his receipt of income by engaging in affirmative acts of tax evasion, including listing a relative’s Social Security number on casino tax forms, using family members as nominee owners of vehicles, and using a nominee to rent airplane hangars at the DuPage County, Ill. Airport.  Among his other offenses, Cipolla in 2020 fraudulently procured four loans under the Paycheck Protection Program and Economic Injury Disaster Loan Program, two sources of relief under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act that were intended to support small businesses during the Covid-19 pandemic.  Cipolla obtained more than $1.18 million in PPP and EIDL loans by manufacturing false tax documents and submitting them to lenders.

Cipolla, 39, of Bloomingdale, Ill., pleaded guilty last year to federal charges of tax evasion, wire fraud, and mail fraud.  In addition to the prison term, U.S. District Judge Matthew F. Kennelly on Friday ordered Cipolla to pay $2,096,285 in restitution to the IRS, State of Illinois, U.S. Small Business Administration, and other entities and individuals victimized by his schemes.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Justin Campbell, Special Agent-in-Charge of the IRS Criminal Investigation Chicago Field Office, Hannibal Ware, Inspector General of the U.S. Small Business Administration, and Andrea M. Kropf, Special Agent-in-Charge of the U.S. Department of Transportation’s Office of Inspector General in Chicago.  The government was represented by Assistant U.S. Attorneys Timothy J. Chapman and Michelle M. Petersen.

CHICAGO — A Chicago businessman pleaded guilty today to a federal fraud charge for bilking elderly homeowners in a home repair and reverse mortgage scheme.

MARK STEVEN DIAMOND schemed with others to induce homeowners to unwittingly obtain reverse mortgage loans to pay for purported home repairs that Diamond offered to perform.  Diamond and the co-schemers targeted elderly victims based on the amount of equity in their homes and their relative lack of financial sophistication.  In some instances, Diamond concealed from the homeowners that they were applying for reverse mortgage loans by falsely representing that they needed to sign certain documents to start the repair work, when, in fact, the documents that Diamond caused them to sign were related to applying for the loan.  After the loans were approved and originated by co-schemers, Diamond fraudulently pocketed the loan proceeds and often failed to perform any repairs. 

Diamond, 67, of Chicago, pleaded guilty to a federal charge of wire fraud affecting a financial institution, which is punishable by up to 30 years in federal prison.  Diamond acknowledged in a plea agreement that he victimized at least 18 Chicago-area homeowners by fraudulently obtaining approximately $929,000 from financial institutions in the form of reverse mortgage loan proceeds.  It will be the government’s position at sentencing that there were at least 80 victims and that Diamond’s actions caused at least approximately $6 million in losses.  U.S. District Judge Franklin U. Valderrama set Diamond’s sentencing for Sept. 4, 2024.

The guilty plea was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  Substantial Assistance was provided by the Illinois Attorney General’s Office.  The government is represented by Special Assistant U.S. Attorney Brian P. Netols and Assistant U.S. Attorney Erin Kelly.

All four co-schemers charged in the investigation – loan originators GARY BOHN, of Hoffman Estates, Ill., and MATTHEW FEFFERMAN, of Munster, Ind., Diamond’s employee CYNTHIA WALLACE, of Sauk Village, Ill., and title agency owner FORREST C. FAWCETT, of Fort Lauderdale, Fla. – previously pleaded guilty and admitted their roles in the fraud.  They are awaiting sentencing.

Diamond plea agreement

CHICAGO — A Chicago health care company and its owner will pay $1 million to the United States to resolve a civil lawsuit arising from the submission of false claims to Medicare. 

BRIAN J. WEINSTEIN and APOLLO HEALTH INC. violated the False Claims Act by submitting claims to Medicare for care plan oversight services that were not actually performed, according to a consent judgment and settlement agreement filed in U.S. District Court in Chicago.  Care plan oversight services (“CPO”) involve a physician’s supervision of a patient receiving complex or multidisciplinary medical care.  At Weinstein’s direction, Apollo’s billers submitted 12,592 claims for CPO services on behalf of 25 providers purportedly employed by Apollo.  Weinstein knew that the providers had not actually provided CPO services to Medicare patients and that CPO services had not been documented in the patients’ medical records.

As part of the consent judgment and settlement agreement entered this week by U.S. District Judge Sharon Johnson Coleman, Weinstein and Apollo agreed to pay $1 million to the United States.  The consent judgment and settlement agreement resolve a civil lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act permits private citizens to bring lawsuits on behalf of the United States for false claims, and to share in any recovery.  The United States intervened in the lawsuit prior to the settlement.

The consent judgment and settlement were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Mario Pinto, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government was represented by Assistant U.S. Attorney Virginia Hancock.

In a separate criminal prosecution, Weinstein pleaded guilty last year to a federal health care fraud charge and was sentenced to three years of probation.

Consent Judgment and Settlement Agreement

CHICAGO — Two suburban Chicago men have been sentenced to prison as part of a federal investigation that dismantled a Mexico-to-Chicago drug pipeline.

SHELDON MORALES and EDUARDO SANTANA conspired with a supplier in Mexico and two inmates in a prison in Texas to traffic methamphetamine, fentanyl, and cocaine from Mexico to Evanston, Ill., and Morton Grove, Ill., in 2019.  The drugs were sent in packages from California and Arizona and later sold on the streets in the Chicago area. 

Law enforcement uncovered the drug trafficking activities through the use of wiretapped cellular phones, package seizures, and extensive surveillance.  The case was part of an Organized Crime Drug Enforcement Task Forces investigation.  OCDETF identifies, disrupts, and dismantles drug traffickers and other criminal offenders that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

A jury in U.S. District Court in Chicago in 2022 convicted Morales, 42, of Morton Grove, Ill., and Santana, 47, of Skokie, Ill., on a drug conspiracy charge.  Morales was also convicted of an individual drug charge related to his attempted possession of methamphetamine and fentanyl.  U.S. District Judge Mary M. Rowland on Tuesday sentenced Santana to 16 years and eight months in prison.  Judge Rowland sentenced Morales on April 16, 2024, to 19 years and seven months in prison.

Two other defendants were also convicted and sentenced to prison as part of this investigation. DARIUS MORALES, 34, of Evanston, Ill., was sentenced in 2022 to nearly eight years in federal prison for illegally possessing a semi-automatic handgun in Evanston.  DEMETRIUS SHAVERS, 42, of Chicago, was sentenced in 2021 to more than six and a half years in federal prison for trafficking heroin, cocaine, and fentanyl in the Chicago area.

The sentences were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sheila G. Lyons, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration, and Justin Campbell, Special Agent-in-Charge of the IRS Criminal Investigation Chicago Field Office.  Substantial assistance was provided by the Evanston Police Department.  Assistant U.S. Attorneys Charles W. Mulaney and Kirsten Moran represented the government.

CHICAGO — The owner of a suburban Chicago medical supply company has been convicted of federal fraud charges for paying kickbacks to a U.S. Department of Veterans Affairs employee in exchange for procuring orders of medical equipment.

After a week-long trial in U.S. District Court in Chicago, the jury on Monday found DARREN A. SMITH, 59, of Hazel Crest, Ill., guilty of all eight wire fraud counts against him.  Each count is punishable by up to 20 years in federal prison.  U.S. District Judge Edmond E. Chang set sentencing for Sept. 10, 2024.

Smith operated a medical distribution company based in Bolingbrook, Ill.  Evidence at trial revealed that Smith schemed with a procurement clerk in the Veterans Health Administration Prosthetics Service in Chicago to have the VA order costly medical equipment from Smith’s company in exchange for concealed kickbacks to the clerk.  The orders placed by the clerk involved unnecessary and more expensive rentals of certain medical equipment from Smith’s company instead of purchasing the equipment outright, as VA physicians had instructed.  From 2017 to 2020, the VA spent more than $2.7 million at Smith’s company and fraudulently overpaid it by more than $1.3 million.  In exchange, the clerk pocketed kickbacks from Smith of at least $220,000.

The VA procurement clerk, ANDREW LEE, 68, of Chicago, pleaded guilty to a wire fraud charge prior to trial.  He is awaiting sentencing.

Smith’s conviction was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Gregory Billingsley, Special Agent-in-Charge of the Department of Veterans Affairs, Office of Inspector General, Central Field Office.  The government is represented by Assistant U.S. Attorney Heidi Manschreck and Special Assistant U.S. Attorney Benjamin Christenson.

CHICAGO — The former Chief Operating Officer of an Illinois hospital has been sentenced to a year and a half in federal prison for illegally pocketing more than $620,000 in hospital funds.

ROBERT SPADONI was an attorney who worked as a Vice President and COO of the hospital.  From 2013 to 2021, Spadoni orchestrated a scheme in which he approved payment of invoices to a vendor company that purportedly provided the hospital with administrative support and compliance services.  In reality, the vendor company – Medical Education Solutions, Inc. – had been established by Spadoni for the purpose of executing the scheme.  Spadoni’s family member opened a bank account in the company’s name and steered the hospital’s payments into it.  Spadoni concealed the fraud scheme by paying $1,500 a month in cash to another hospital employee to actually provide the administrative and compliance services.

As a result of the fraud scheme, Spadoni obtained approximately $622,500 in payments from the hospital.  Spadoni used the money for his own benefit, including restaurant meals and hotel stays, as well as transferring $225,805 into a 401(k) account he controlled.

Spadoni, 59, of Darien, Ill., pleaded guilty earlier this year to a mail fraud charge.  In addition to the prison term, U.S. District Judge Matthew F. Kennelly on Tuesday ordered Spadoni to pay $622,500 in restitution to the hospital.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, and Kwame Raoul, Illinois Attorney General.  The government was represented by Assistant U.S. Attorney Chester Choi.

CHICAGO – A Chicago woman has been sentenced to a year and a half in federal prison for participating in an organized scheme to fraudulently obtain more than $16 million in small business loans and grants under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.

MILICA SUMAKOVIC was among seven defendants indicted in U.S. District Court in Chicago for participating in a scheme that submitted more than 300 fraudulent applications seeking more than $40 million in benefits from the Economic Injury Disaster Loan Program (EIDL).  As a source of relief under the CARES Act, the EIDL program was intended to provide loan assistance or grants to cover working capital and other operating expenses for legitimate businesses that suffered revenue losses as a result of the Covid-19 pandemic.  Sumakovic and her co-defendants claimed in their applications that they owned and operated various businesses in Illinois and Florida.  The applications and supporting documents contained materially false representations about the defendants’ purported companies, including the number of employees and revenue amounts.  The defendants’ scheme caused the U.S. Small Business Administration to pay out more than $16 million in fraudulent benefits.  Sumakovic personally submitted and assisted co-defendant MARKO NIKOLIC in submitting eighteen of the fraudulent applications that sought more than $2.6 million in benefits.

Sumakovic, 33, of Chicago, pleaded guilty last year to a federal wire fraud charge.  U.S. District Judge Nancy L. Maldonado on April 25, 2024, sentenced Sumakovic to 18 months in federal prison and ordered her to pay $1.68 million in restitution to the SBA.

Marko Nikolic, 36, of La Grange, Ill., and BRANKO ALEKSIC, 34, of Chicago, each pleaded guilty last year to wire fraud and money laundering charges.  Marko Nikolic was sentenced in January 2024 to four years and two months in prison and ordered to pay $6.9 million in restitution, while Aleksic was sentenced in November 2023 to two years and eleven months in prison and ordered to pay $575,000 in restitution.

The four other defendants – MAJA NIKOLIC, 36, of Brookfield, Ill., NEBOJSA SIMEUNOVIC, 38, of Lyons, Ill., MIJAJLO STANISIC, 34, of Willowbrook, Ill., and DORDE TODOROVIC, 33, of Chicago – are considered fugitives and may currently be residing overseas.  Warrants for their arrests have been issued.

The sentences were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sean Fitzgerald, Special Agent-in-Charge of Homeland Security Investigations in Chicago, Heather M. Hill, Acting Inspector General of the Treasury Department Inspector General for Tax Administration (TIGTA), Justin Campbell, Special Agent-in-Charge of the IRS Criminal Investigation Chicago Field Office, and Hannibal Ware, Inspector General of the U.S. Small Business Administration.  The government was represented by Assistant U.S. Attorneys Kavitha J. Babu and Brian Hayes.

“The relief programs provided by the CARES Act were designed to assist small businesses struggling to survive the Covid-19 pandemic,” said Acting U.S. Attorney Pasqual.  “Our office is committed to working with our law enforcement partners to root out abuse of these important programs and hold accountable anyone who seeks to fraudulently profit from them.”

“This sentence is a great example of what can be accomplished when federal and local law enforcement agencies work in collaboration,” said HSI SAC Fitzgerald.  “We will continue to work tirelessly to investigate criminals who seek to exploit the United States government and bring them to justice.”

“The sentence imposed on Sumakovic underscores the federal government's dedication to holding accountable individuals who defrauded vital programs that served as a lifeline for businesses during the pandemic,” said IRS-CI SAC Campbell.  “Make no mistake: CI and its fellow law enforcement partners remain steadfast in their commitment to holding accountable the fraudsters who exploited Covid-relief programs for personal gain.”

Last month, the Justice Department’s Covid-19 Fraud Enforcement Task Force released its 2024 report detailing the efforts of the task force and its member agencies in response to widespread fraud involving many Covid-19 programs targeted by fraudsters and other criminals who sought to exploit the government’s relief efforts for their personal gain.  Anyone with information about attempted fraud involving Covid-19 is encouraged to report it to the Department of Justice by calling the National Center for Disaster Fraud Hotline at (866) 720-5721 or filing an online complaint here.

CHICAGO — A Chicago man who carjacked four vehicles, robbed a UPS truck, and committed multiple street robberies has been sentenced to more than eleven years in federal prison.

JAHEIM HENYARD committed the UPS robbery, three of the carjackings, and two street robberies within days of each other in August 2020 in Oak Park, Ill., Cicero, Ill., and Chicago.  The other carjacking occurred in December 2019 in a supermarket parking lot in Westchester, Ill.  During that carjacking, Henyard’s accomplice and the victim, who was armed and possessed a concealed carry license, engaged in an exchange of gunfire.  Henyard also attempted to carjack another vehicle at gunpoint in Oak Park in July 2020, but was unsuccessful.

In the UPS heist, Henyard and two others – DARIUS YOUNG and XAVIER TATE – robbed the truck on a residential street in Oak Park on the afternoon of Aug. 21, 2020.  During the robbery, the UPS driver was ordered to lay face down in the street while the offenders removed boxes from the truck and sped off.  All three defendants pleaded guilty and admitted their roles in the heist.  Henyard’s guilty plea also included the four carjackings as well as the attempted carjacking.

U.S. District Judge Sara L. Ellis sentenced the defendants this month to federal prison terms:

• Henyard, 22, of Chicago, was sentenced to eleven years and three months.
• Young, 28, of Berwyn, Ill., was sentenced to four years.
• Tate, 27, of Chicago, was sentenced to seven years and nine months.

The sentences were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The Chicago Police Department, Oak Park Police Department, and Cicero Police Department participated in the investigation.  The Cook County State’s Attorney’s Office provided valuable assistance.  The government was represented by Assistant U.S. Attorneys Charles W. Mulaney and Simar Khera.

CHICAGO — A federal jury has convicted a man on firearm charges for illegally possessing a machine gun in a Chicago suburb.

KEVIN DIXON, 27, of Midlothian, Ill., was found guilty April 19, 2024, of both counts against him, including one count of illegal possession of a machine gun and one count of illegal possession of a firearm as a previously convicted felon.  Each count is punishable by a maximum sentence of ten years in federal prison.  U.S. District Judge Virginia M. Kendall set sentencing for Sept. 10, 2024.

Evidence at the week-long trial in U.S. District Court in Chicago revealed that Dixon illegally possessed the firearm on June 6, 2021, in his vehicle in Lansing, Ill.  The firearm was a Glock handgun equipped with a “switch” device, also known as a “Glock switch,” making it capable of firing in fully automatic mode.  Dixon initially crashed his vehicle into another car and then sped off.  The victim followed Dixon and eventually was able to block Dixon’s vehicle, at which point Dixon fired several gunshots and then drove off again.  Dixon then sped through a red light and collided with two vehicles before running off on foot.  Law enforcement apprehended him a short time later.

The conviction was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Alfred Phillips, Chief of the Lansing, Ill. Police Department.  Valuable assistance was provided by the Illinois State Police, Illinois Secretary of State’s Office, and Illinois Department of Corrections.  The government is represented by Assistant U.S. Attorney Kristen Totten and Special Assistant U.S. Attorney Charles Fox.

Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods, the Department of Justice’s violent crime reduction strategy.  In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

CHICAGO — A suburban Chicago woman has been sentenced to 20 years in federal prison for recruiting and enticing a child to engage in commercial sex acts.

In November 2021, JAMARI HODGE recruited and enticed a 13-year-old girl to engage in commercial sex acts.  Hodge took sexually explicit photographs of the victim and posted them in online advertisements offering the commercial sex.  Hodge then rented hotel rooms in Illinois and Indiana to use for encounters with individuals who responded to the advertisements.  Hodge set the prices and collected the payments from customers after the encounters.

Hodge, 29, of Calumet City, Ill., pleaded guilty last year to a federal charge of enticing a minor to engage in commercial sex.  In addition to the prison term, U.S. District Judge Martha M. Pacold on Wednesday ordered Hodge to pay $180,000 in restitution to the victim.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  Valuable assistance was provided by the Lansing, Ill., Police Department, Calumet City, Ill. Police Department, and Richton Park, Ill., Police Department.  The government was represented by Assistant U.S. Attorney Erin Kelly.

If you believe you are a victim of sexual exploitation, you are encouraged to contact the National Center for Missing and Exploited Children by logging on to www.missingkids.com or by calling 1-800-843-5678.  The service is available 24 hours a day, seven days a week.

CHICAGO — A Chicago chiropractor has been convicted of federal health care fraud charges for billing a private insurer for nonexistent services.

CLARENCE W. BROWN III owned and operated Dr. CB3 Wellness, Inc. and Apex Integrated Medical Center, Ltd. in Chicago.  From 2016 to 2020, Brown submitted fraudulent claims to Blue Cross Blue Shield of Illinois for purported health care services that Brown knew were not actually provided to patients.  Some of the fraudulent claims were for services purportedly provided on dates when Brown was not in Illinois.  Brown prepared false patient medical records and other documents to support his fraudulent claims.  Brown billed BCBS approximately $1.3 million for services purportedly provided to members of two families that were not actually provided, and, as a result, fraudulently obtained approximately $750,000 from the carrier.

After a two-week trial in U.S. District Court in Chicago, a jury on April 12, 2024, convicted Brown, 48, of Chicago, on all nine health care fraud counts against him.  Each count is punishable by up to ten years in federal prison.  U.S. District Judge John F. Kness set sentencing for July 23, 2024.

The conviction was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorneys Misty N. Wright and Andréa L. Campbell.

Deputy Attorney General (AG) Lisa Monaco traveled to Detroit and Chicago this week to highlight the Justice Department’s work with state and local law enforcement to successfully drive down violent crime across the United States.

Launched in 2021, the Department’s Comprehensive Strategy for Reducing Violent Crime focuses federal resources — such as personnel, intelligence, and expertise — on identifying, investigating, and prosecuting the most significant drivers of violent crime. After a rise beginning in 2020 during the pandemic, violent crime is on a downward trajectory — including double-digit drops in homicide rates across many major cities. 

In Detroit, the Deputy AG underscored the strong law enforcement and community partnerships that led the city to close out 2023 with the fewest homicides on record in over 50 years. She met with Detroit Police Chief James White and toured the Detroit Police Department’s Real-Time Crime Center, which harnesses real-time data to help federal, state, and local law enforcement collaborate to tackle violent crime. Together with U.S. Attorney Dawn N. Ison for the Eastern District of Michigan and other city officials, the Deputy AG delivered remarks at a convening of One Detroit — the Eastern District of Michigan’s violent crime reduction initiative that brings together law enforcement, nonprofits, faith leaders, and policymakers to address every element of violent crime. In stressing the importance of partnerships like One Detroit she said:

“When data informs strategy that is guided by community, when trust develops into real partnership, and when prevention, intervention, and enforcement all work hand in hand — that’s a formula for success against violent crime.”

In Chicago, joined by Director Steven Dettelbach of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois, Superintendent Larry Snelling of the Chicago Police Department, Illinois Attorney General Kwame Raoul, and other law enforcement leaders, Deputy AG Monaco announced a new, expanded Crime Gun Intelligence Center (CGIC) — which brings together personnel from 13 federal, state, and local law enforcement agencies to focus exclusively on investigating and preventing gun violence. CGICs use cutting-edge technology to rapidly develop and pursue investigative leads to drive case clearance rates up — which in turn can drive violent crime rates down. In her announcement, the Deputy AG said:

“To continue our historic progress against violent crime, we need to bring more crime gun intelligence to more law enforcement agencies, in more jurisdictions, more quickly than ever before.”

The Deputy AG also previewed the Justice Department’s launch of seven new carjacking task forces across the country, which build on the success of current task forces in several cities — including Chicago — where available data shows that carjacking rates are now falling. These task forces will bring together prosecutors, officers, agents, and analysts to share intelligence and apply best practices to tackle this public safety threat.

On her trip, the Deputy AG visited the U.S. Attorney’s Offices for the Eastern District of Michigan and Northern District of Illinois, where she thanked the dedicated prosecutors and professional staff of both offices for their dedication to the Department’s mission, especially the work each office is doing to tackle violent crime in their communities.

Photo credit: Detroit Police Department. Photo credit: Detroit Police Department. Photo credit: Chicago Police Department.

 

CHICAGO — A senior administrator for both the Village of Dolton, Ill. and Thornton Township, Ill. has been charged in federal court with engaging in a bankruptcy fraud scheme involving the making of false statements in his bankruptcy petition to conceal from creditors his assets and sources of income and a significant claim against him.

An indictment returned Monday in U.S. District Court in Chicago charges KEITH DOUGLAS FREEMAN, 45, of Orland Park, Ill., with one count of bankruptcy fraud.  The charge is punishable by a maximum sentence of five years in federal prison.  Arraignment has not yet been scheduled. 

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, Justin Campbell, Special Agent-in-Charge of the IRS Criminal Investigation Chicago Field Office, and Ruth M. Mendonça, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service.  Valuable assistance was provided by the U.S. Trustee Program.  The government is represented by Assistant U.S. Attorney Jason A. Julien and Special Assistant U.S. Attorney Brian P. Netols. 

The officials noted that Freeman was indicted as part of an ongoing federal investigation.

According to the indictment, Freeman on Jan. 3, 2024, filed a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court in Chicago.  The petition included a Schedules and Statement of Financial Affairs – a document in which the debtor is required to identify, among other things, all of his assets and sources of income, as well as any claims against him.  The indictment alleges that Freeman made several materially false statements and omissions in the document, including knowingly underreporting income he derived from his employment as both the Village Administrator for Dolton and the Municipality Manager for Thornton Township, as well as fees he received from his private consulting business.  Freeman also allegedly concealed that the Village of Robbins, Ill. had filed a claim against him related to approximately $90,396 that Freeman received in excess of his authorized salary while he was the Village Administrator for Robbins, a position he held from 2017 to 2021.

Freeman also furnished the Chapter 7 Trustee with a purported copy of his 2022 individual income tax return, which represented that Freeman’s total income from employment was $45,186.  The indictment states that Freeman knew he had not filed an income tax return for that year, and that his actual income, which included a $100,000 salary for the Dolton position alone, substantially exceeded that amount.

It was further part of the scheme that on Jan. 30, 2024, while testifying under oath at a meeting of creditors, Freeman falsely represented that he was not an employee of Dolton and that he did not receive payment from Dolton, the indictment states.  The following month, Freeman allegedly caused his pay from Dolton to be directly deposited into a recently opened bank account that he had not disclosed to the creditors or the Chapter 7 Trustee.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines. 

Freeman indictment

CHICAGO — A former procurement supervisor at the Jesse Brown Department of Veterans Affairs Medical Center in Chicago has been sentenced to seven years in federal prison for pocketing kickbacks from the president of a medical supply company to steer the company orders that the VA paid for but never received.

THOMAS E. DUNCAN, 40, of Chicago, pleaded guilty last year to one count of wire fraud.  In addition to the prison term, U.S. District Judge Steven C. Seeger on Friday ordered Duncan to pay $1,709,344 in restitution.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Gregory Billingsley, Special Agent-in-Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Central Field Office.  The government was represented by Assistant U.S. Attorney Heidi Manschreck.

While serving as a supervisor in the medical center’s Central Supply department, Duncan received thousands of dollars in kickbacks paid in cash and checks from DANIEL DINGLE, the president of a medical supply company in Dolton, Ill.  The checks were made payable to Helping Hands Properties LLC – a third-party entity managed by Duncan – and contained false and misleading memo entries in order to conceal and disguise the existence and purpose of the kickbacks.  In exchange for the kickbacks, Duncan used his official position at the VA to fraudulently initiate and approve purchases of products from Dingle’s company, knowing that many of the products would not actually be delivered to the VA.

The fraud scheme began in 2012 and continued until 2019.  In late 2018, after Duncan became aware that the VA Inspector General’s Office was investigating his conduct, Duncan created fake invoices from Helping Hands purporting to document work performed for Dingle’s company.  Duncan also told Dingle to falsely tell investigators that the payments Duncan received from Dingle’s company were for work performed by Helping Hands.

Dingle, 53, of Riverdale, Ill., also pleaded guilty to a wire fraud charge.  He is awaiting sentencing.

CHICAGO — A federal judge has sentenced a Chicago-area firearms trafficker to nearly six years in prison for unlawfully dealing handguns, rifles, and “switch” devices capable of converting semi-automatic firearms into machine guns.

Over a three-month period last year, ROGELIO CASTANEDA sold nine firearms and 28 “switch” devices, also known as “Glock switches,” to undercover law enforcement agents.  The sales occurred in Chicago, Stickney, Ill., and Hammond, Ind.  Three of the guns sold by Castaneda were unlicensed, privately made firearms.  At the time of his illegal sales, Castaneda was on pre-trial release for a firearms charge in the Circuit Court of Cook County.

Castaneda, 30, of Chicago, pleaded guilty in December 2023 to one count of unlawfully possessing a machine gun.  U.S. District Judge Robert W. Gettleman imposed a 70-month prison sentence during a hearing Tuesday in federal court in Chicago.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Larry Snelling, Superintendent of the Chicago Police Department.  Valuable assistance was provided by the Cook County Sheriff’s Office and U.S. Customs and Border Protection.

“The city of Chicago continues to face a gun violence epidemic,” Special Assistant U.S. Attorney Mary McDonnell argued in the government’s sentencing memorandum.  “Glock switches and converted Glocks are a grave threat to public safety and serve no purpose other than to inflict maximum damage on enemies and innocent bystanders.”

Disrupting illegal firearms trafficking is the focus of the Department of Justice’s Firearms Trafficking Strike Force.  As part of the strike force, the U.S. Attorney’s Office collaborates with ATF, CPD, and other federal, state, and local law enforcement partners in the Northern District of Illinois and across the country to help stem the supply of illegally trafficked firearms and identify patterns, leads, and potential suspects in violent gun crimes.

Holding firearm offenders accountable through federal prosecution is also a centerpiece of Project Safe Neighborhoods, a nationwide initiative that brings together law enforcement officials, prosecutors, community leaders, and other stakeholders to develop comprehensive solutions to the most pressing violent crime problems in a community.  In the Northern District of Illinois, the U.S. Attorney’s Office has deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.

CHICAGO — A man has been arrested on a federal drug charge after law enforcement last week seized cocaine, fentanyl, and multiple firearms from his Chicago residence.

A complaint filed in U.S. District Court in Chicago charges HUGO PINZON, 34, with possession of a controlled substance with intent to distribute.

As part of an ongoing federal investigation, law enforcement last week conducted a court-authorized search of Pinzon’s residence in the Wicker Park neighborhood of Chicago and discovered distribution quantities of cocaine, fentanyl, and marijuana, at least a dozen firearms, and thousands of dollars in cash, the complaint states.  The complaint alleges that Pinzon had sold cocaine on three occasions earlier this year to an individual who, unbeknownst to Pinzon, was cooperating with law enforcement. 

Pinzon was arrested Thursday.  A detention hearing in federal court in Chicago is scheduled for April 11, 2024, at 11:00 a.m. before U.S. Magistrate Judge Jeffrey Cole.

The complaint and arrest were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Sean Fitzgerald, Special Agent-in-Charge of Homeland Security Investigations in Chicago.  Substantial assistance was provided by the Carpentersville, Ill. Police Department.  The government is represented by Assistant U.S. Attorney Jeffrey S. Snell.

The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Pinzon complaint

CHICAGO — The owner of Chicago-area child care centers has been sentenced to four years in federal prison for scheming to fraudulently obtain more than $3.3 million in State of Illinois subsidies designed to help low-income families afford child care.

ALEESHA McDOWELL owned child care providers A&A Kiddy Kollege Inc. in Calumet City, Ill., A&A Kiddy Kollege 2 in Calumet Park, Ill., and Kreative Kidz Academy Inc., Kreative Kidz Academy II Inc., and Kreative Kidz Academy III Inc. in Chicago.  From 2012 to 2020, McDowell schemed with directors of her centers and others to defraud the Illinois Department of Human Services’ Child Care Assistance Program by submitting applications containing materially false information, including fraudulent paystubs and income verification letters regarding a parent’s eligibility to qualify for state subsidy payments.  In many instances, McDowell or the directors falsely represented in the applications that a parent was employed by one of McDowell’s child care centers in order to satisfy IDHS’s requirement that recipients of the funds either be in school or employed and earning less than a certain income threshold.

As a result of the scheme, McDowell and her co-schemers caused IDHS to pay McDowell’s child care centers more than $3.3 million in subsidy payments for services purportedly provided to children who were not eligible to receive such benefits.  McDowell spent some of the criminally derived money on a Bentley Bentayga and a house in Mokena, Ill.

McDowell, 44, of Mokena, Ill., pleaded guilty last year to a federal wire fraud charge.  In addition to the prison sentence, U.S. District Judge Manish S. Shah on March 27, 2024, ordered McDowell to pay restitution of $3,339,563.

Seven other defendants charged as part of the investigation also pleaded guilty to federal criminal charges.

McDowell’s sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, Justin Campbell, Special Agent-in-Charge of the IRS Criminal Investigation Chicago Field Office, and Shantel R. Robinson, Special Agent-in-Charge of the Midwest Region of the U.S. Department of Agriculture, Office of Inspector General.  The government was represented by Assistant U.S. Attorneys Kate McClelland and Brian Hayes.

CHICAGO — A suburban Chicago nurse has been sentenced to two years in federal prison for removing morphine prescribed to patients and replacing it with another liquid.

SARAH DIAMOND was employed as the Assistant Director of Nursing at a Chicago-area medical rehabilitation center, where she was responsible for dispensing medications to patients, including those in hospice care.  In the summer of 2021, Diamond removed morphine from bottles that had been prescribed to at least five patients to manage their pain and replaced it with another liquid, knowing the diluted substance would be dispensed.   Diamond removed the morphine for her own personal use and with reckless disregard and extreme indifference for the risk that the patients would be placed in danger of bodily injury.  In at least one instance, a patient’s family members observed the patient suffering during what would end up being some of the final moments before dying.

Diamond, 31, of Woodstock, Ill., pleaded guilty last year to a federal charge of tampering with a consumer product.  U.S. District Judge Manish S. Shah imposed the sentence Wednesday during a hearing in federal court in Chicago.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Ronne Malham, Special Agent-in-Charge of the Chicago Field Office of the U.S. Food and Drug Administration, Office of Criminal Investigations.  Valuable assistance was provided by the Crystal Lake, Ill., Police Department.  The government was represented by Assistant U.S. Attorney Heidi Manschreck.

“Patients deserve to have confidence that they are receiving the legitimately prescribed medication and not a diluted substance,” said Acting U.S. Attorney Pasqual.  “Health care practitioners who illicitly tamper with prescription drugs will be prosecuted to the fullest extent of the law.”

“Patients suffering from pain trust their health care providers to provide relief through effective and appropriately dosed medications,” said SAC Malham.  “We will continue to pursue and bring to justice healthcare professionals who violate their position of trust and jeopardize patients’ health and well-being by tampering with their pain medications.”

CHICAGO — A man has been sentenced to more than 18 years in federal prison for violently carjacking two vehicles in Chicago.

KASHIF DUKES, 29, of Chicago, took the vehicles at gunpoint in 2017 and 2018.  In the first carjacking, Dukes took a Mercedes-Benz sedan in Chicago’s Bronzeville neighborhood on Sept. 10, 2017.  Dukes pressed a gun to the driver’s chest and said words to the effect of, “get the [expletive] out the car or I’m going to shoot the [expletive] out of you.”  Dukes then took the driver’s cellphones, cash, and wallet and sped off in the Mercedes.  The second carjacking occurred on July 21, 2018, in the Little Italy neighborhood on Chicago’s Near West Side when Dukes and accomplices took a Chevy Equinox from a woman and her two children and granddaughter.  The family was dropping off food at a friend’s house for a barbecue that evening.  The carjackers brandished firearms and shouted at the women to “get the [expletive] out of the car” and to “get the baby and get the [expletive] out.”

Dukes pleaded guilty to the first carjacking and was convicted by a jury in 2021 of the second carjacking.  The jury also convicted Dukes of federal firearm charges.  U.S. District Judge Jorge L. Alonso on Tuesday imposed a sentence of 18 years and three months in federal prison.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Larry Snelling, Superintendent of the Chicago Police Department.

“Defendant traumatized the victims and placed them in fear of their lives,” Assistant U.S. Attorney Jasmina Vajzovic argued in the government’s sentencing memorandum.  “The community as a whole – victims, witnesses, society, and perpetrators – needs to know that the federal system takes the crime of carjacking seriously and will justly punish those who choose to spend their time terrorizing others.”