Northern District of Illinois

CHICAGO — Twelve individuals are facing federal charges as part of an investigation into heroin trafficking on the West Side of Chicago.

As part of the investigation, dubbed “Operation Dirty Ice,” law enforcement intercepted cellphone communications between the defendants, conducted extensive surveillance, and performed court-authorized searches of residences in the Austin neighborhood of Chicago and west suburban Bellwood.  During the probe, authorities seized one and a half kilograms of heroin, a half kilogram of crack cocaine, more than $892,000 in illicit cash proceeds, and a stolen handgun. 

The investigation was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies, whose principal mission is to identify, disrupt and dismantle the most serious drug trafficking organizations.

A criminal complaint filed in U.S. District Court in Chicago charges eleven defendants with conspiracy to possess a controlled substance with the intent to distribute, and one defendant with possession of a controlled substance with the intent to distribute.  Many of the defendants were arrested Tuesday, and they have made initial appearances in federal court in Chicago.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Eddie Johnson, Superintendent of the Chicago Police Department.  The Illinois State Police provided valuable assistance.  Assistant U.S. Attorneys Kelly Guzman and Rebekah Holman represent the government.

Charged in the drug conspiracy are DIAMOND LAKE, 42, of Bellwood; DARNELL HUDSON, 42, of Chicago; ANTWION WILLIAMS, 43, of Berwyn; DERRON BARTON, 42, of Chicago; STEVEN MOORE, 41, of Chicago; ROMELL RATLIFF, 40, of Chicago; DEANDRE HUGHES, 23, of Chicago; LAWRENCE JONES, 41, of Chicago; CLAYVON VIVETTER, 30, of Chicago; WILLIE BLAKE, 39, of Chicago; and EDDIE YOUNG, 39, of Chicago.  Charged with possession of a controlled substance with the intent to distribute is TYJUAN YATES, 36, of Chicago.

According to the charges, Lake operated a drug trafficking organization that distributed nearly 500 grams of heroin in the Chicago area on a weekly basis.  The organization used Lake’s residence in Bellwood to store bulk quantities of heroin and to prepare the drug for street-level distribution, the complaint states.  Lake, Williams and Hudson parceled the drug in distinctive packaging by wrapping it in tinfoil and stapling it inside mini Ziploc bags, the complaint states.  Williams and Hudson then allegedly worked with Barton to bring the bags to street-level dealers, including Moore, Ratliff, Hughes, Jones, Vivetter, Blake and Young.  After sales on the street, Williams, Hudson and Barton collected cash proceeds and delivered the money to Lake, the charges allege. 

From May to October of this year, Lake’s organization distributed at least 10 kilograms of heroin to customers on the West Side of Chicago, the complaint states.  Many of the sales allegedly occurred in the city’s Austin neighborhood, including in the 100 block of North LaPorte Avenue, the 5000 block of West Maypole Avenue, and the 4800 block of West Quincy Street.

The charge against Yates stems from a June 2018 seizure of heroin in the Garfield Park neighborhood of Chicago, the complaint states.  Law enforcement discovered approximately 109 grams of packaged heroin in Yates’s vehicle in the 4400 block of West Fulton Street, according to the complaint.

The conspiracy charge carries a mandatory minimum sentence of ten years in prison and a maximum penalty of 40 years in prison, while the possession charge against Yates is punishable by up to 20 years.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines. 

The public is reminded that charges contain only accusations and are 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.

CHICAGO — A north suburban psychologist has been indicted on federal fraud charges for allegedly submitting false claims to Medicare and private insurers.

PAMELA ANTELL, also known as Pamela Gruenhut, operated a psychology practice in Glenview.  From 2011 to January 2018, Antell submitted fraudulent claims to Medicare and private insurers for mental health services that were not rendered, the indictment states.  In some instances, Antell was out of the state on the dates she claimed to have provided the services, the charges allege.  Antell also used some of her patients’ names and dates of birth without their knowledge to create fictitious claim forms for the purported services, the charges allege.

The indictment charges Antell with five counts of health care fraud and three counts of aggravated identity theft.

Antell, 66, of Deerfield, was arrested this morning.  She pleaded not guilty at an afternoon arraignment and was ordered released on a personal recognizance bond.  A status hearing is set for Oct. 24, 2018, at 10:30 a.m., before U.S. District Judge Jorge L. Alonso.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation.

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 health care fraud is punishable by up to ten years in prison.  Conviction of aggravated identity theft carries a mandatory prison sentence of two years, which must be served consecutively to the sentence for the underlying offense.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Kelly Greening.

CHICAGO — More than 25 individuals are facing federal or state drug charges for allegedly selling pure fentanyl or fentanyl-laced heroin in Chicago.

Many of the defendants sold narcotics to an undercover law enforcement officer earlier this year, according to the charges.  Several of the sales occurred in daytime hours during the summer months.  The federal charges describe drug sales in the Tri-Taylor, Humboldt Park and West Garfield Park neighborhoods on Chicago’s West Side, as well as deals in the Chatham neighborhood on the city’s South Side.

The investigation was led by the Chicago Police Department, with support from agents from numerous federal agencies assigned to the High Intensity Drug Trafficking Area (HIDTA) Task Force, including the U.S. Drug Enforcement Administration, Federal Bureau of Investigation, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Department of Homeland Security - Homeland Security Investigations, and U.S. Marshals Service.  In addition to the undercover work, law enforcement during the investigation conducted extensive surveillance and seized distribution quantities of fentanyl and fentanyl-laced heroin.

Seven defendants were charged in federal court, while 22 defendants were charged in state court.  Many of the defendants were arrested Thursday.  The federal defendants have begun making initial appearances in U.S. District Court in Chicago, while the state defendants will appear in Cook County Criminal Court. 

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kimberly M. Foxx, Cook County State’s Attorney; Eddie Johnson, Chicago Police Superintendent; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the DEA; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  Substantial assistance was provided by the Illinois State Police.

 “These arrests send a clear message that anyone who sells fentanyl on the streets of Chicago will endure the full weight of law enforcement,” said U.S. Attorney Lausch.  “The U.S. Attorney’s Office will continue to focus its efforts on individuals and groups who distribute fentanyl – a dangerously potent drug – and prosecute those offenders in federal court.”

“We’ve seen the devastation that drugs – especially fentanyl – leave on an individual, their family and our communities,” said State’s Attorney Foxx.  “These charges are a step in the right direction as we send a message that fentanyl has no place on our streets.  My office is committed to holding anyone responsible for this harmful substance accountable and will continue working with our federal and local partners to do so.”

“The sale and use of these substances has affected more than just the individual using them,” said CPD Supt. Johnson.  “It has left multiple scars on some of our communities.  CPD will continue to work with our federal and state partners to do everything we can to make our streets safer and to save lives in the process.”

“These arrests help tackle our city’s most serious drug threat – fentanyl,” said DEA Special Agent-in-Charge McKnight.  “For those who want to put poison on our streets, we are not done with you.”

“The results of these investigations show the powerful impact law enforcement can have when we work as one team to combat the lethal threat fentanyl poses to our communities,” said FBI Special Agent-in-Charge Sallet.

 According to the federal complaints, ANTHONY MCCLENDON, 38, of Chicago, sold more than three grams of pure fentanyl to an undercover officer on May 18, 2018.  The deal allegedly occurred on the street in the 1000 block of South Western Avenue in Chicago.  Special Assistant U.S. Attorney Chester Choi represents the government in McClendon’s case.

ANTRON BINION, 48, of Chicago, sold at least four grams of fentanyl-laced heroin over five separate deals this summer, the complaint states.  The deals allegedly occurred at various locations in Chicago’s West Garfield Park neighborhood, including a transaction on a ramp leading to a pedestrian bridge over the Dwight D. Eisenhower Expressway.  Assistant U.S. Attorney Aaron R. Bond represents the government in Binion’s case.

VANCE ESTES, 34, of Chicago, sold more than a gram of fentanyl-laced heroin and more than a gram of heroin in two separate deals in July, the complaint states.  The deals allegedly occurred as Estes sat in his vehicle in the 9100 block of South Wabash Avenue in Chicago.  ALEJANDRO JUNCO, 27, of Chicago, also sold distribution levels of fentanyl-laced heroin in the same block in July, the complaint states.  Assistant U.S. Attorneys Andrew J. Dixon and John D. Mitchell represent the government in the Junco and Estes cases.

JAMES ALEXANDER, 34, of Chicago, KENYON SAVAGE, 24, of Chicago, and LASHAWN BANKS, 20, of Chicago, each sold distribution levels of fentanyl-laced heroin in Chicago’s Humboldt Park neighborhood this summer, the complaints state.  The government is represented in the Alexander case by Assistant U.S. Attorney Kristen Viglione; in the Savage case by Assistant U.S. Attorney Kalia Coleman; and in the Banks case by Assistant U.S. Attorney Jared Jodrey.

The public is reminded that charges contain only accusations and are 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.  The federal drug distribution charge is punishable by a maximum sentence of 20 years in prison.  If convicted of the federal charge, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A Chicago man has been sentenced to 30 years in federal prison for robbing a North Side bank at gunpoint.

JON GILES, 39, robbed a North Community Bank branch in Chicago’s Lincoln Park neighborhood on March 20, 2009.  After casing the building from the outside, Giles entered the bank and pointed a loaded gun at a female employee who was sitting at a desk.  He then forced a teller to fill a Ziploc bag with cash, screaming, “Give me the money or I will shoot her right now!”  The teller complied and filled the bag with approximately $1,153.  Giles then ordered the employee and the teller to lie face down on the floor while he fled the bank.

Giles was arrested in June 2009 on unrelated armed robbery charges and he has remained in custody.  A federal jury earlier this year convicted him on bank robbery and firearm charges.  U.S. District Judge Ronald A. Guzman on Wednesday imposed a 360-month sentence and ordered that Giles receive credit for time already served.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  Valuable assistance was provided by the Chicago Police Department.

“The defendant is a manipulative, violent, career criminal who appears unable to stop harming other members of society by committing violent crimes,” Assistant U.S. Attorneys Christopher V. Parente and Elizabeth Pozolo argued in the government’s sentencing memorandum.

Both the bank employee and the teller testified about their ordeals at trial.  The employee described how terrified she felt when Giles pressed the gun into her side and threatened to kill her.  She recalled thinking that she would never see her children again.

Evidence at trial revealed that authorities matched Giles’s DNA to a glove he wore during the bank robbery.

ROCKFORD — Three Rockford-area men were indicted Tuesday in separate cases by a federal grand jury in Rockford on child pornography charges.

DAVID WITTWER, 48, of South Beloit, was charged with one count of transporting child pornography via the internet in February 2016, and one count of possessing a computer and cell phone in April 2017 containing an image of child pornography involving a prepubescent minor and a minor who had not attained 12 years of age.

DONOVAN HEIDENREICH, 23, of Rockford, was charged with two counts of transporting child pornography via the internet in May and September of 2017, and one count of possessing a computer in November 2017 containing an image of child pornography involving a prepubescent minor and a minor who had not attained 12 years of age.

OSCAR FLORES-VAZQUEZ, 47, of Byron, was charged with one count of transporting child pornography via the internet in June 2018, and one count of possessing a computer in August 2018 containing an image of child pornography involving a prepubescent minor and a minor who had not attained 12 years of age.

John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, announced the Wittwer case with James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Department of Homeland Security – Homeland Security Investigations; and the Heidenreich and Flores-Vazquez cases with Jeffrey S. Sallet, Special Agent-in-Charge of the Federal Bureau of Investigation in Chicago.  The government is represented by Assistant U.S. Attorney Michael D. Love.

The Wittwer investigation was conducted by the U.S. Department of Homeland Security – Homeland Security Investigations, with the assistance of the South Beloit Police Department and the Winnebago County Sheriff’s Office.  The Heidenreich and Flores-Vazquez cases were investigated by the FBI.

Each count of transporting child pornography carries a mandatory minimum sentence of five years and a maximum of 20 years in prison, while possessing child pornography carries a maximum of ten years in prison.  Each count carries a $250,000 maximum fine.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.  

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

CHICAGO — A Chinese national was arrested in Chicago today for allegedly acting within the United States as an illegal agent of the People’s Republic of China.

JI CHAOQUN, 27, a Chinese citizen residing in Chicago, worked at the direction of a high-level intelligence officer in the Jiangsu Province Ministry of State Security, a provincial department of the Ministry of State Security for the People’s Republic of China, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Ji was tasked with providing the intelligence officer with biographical information on eight individuals for possible recruitment by the JSSD, the complaint states.  The individuals included Chinese nationals who were working as engineers and scientists in the United States, some of whom were U.S. defense contractors, according to the complaint.

The complaint charges Ji with one count of knowingly acting in the United States as an agent of a foreign government without prior notification to the Attorney General.  He will make an initial court appearance today at 4:00 p.m. CDT before U.S. Magistrate Judge Michael T. Mason in Courtroom 2266 of the Everett M. Dirksen U.S. Courthouse in Chicago.

The arrest and complaint were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; John C. Demers, Assistant Attorney General for National Security at the U.S. Department of Justice; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The U.S. Army 902nd Military Intelligence Group provided valuable assistance.  The government is represented by Assistant U.S. Attorney Shoba Pillay of the Northern District of Illinois, and Senior Trial Attorney Heather Schmidt of the National Security Division’s Counterintelligence and Export Control Section.

According to the complaint, Ji was born in China and arrived in the United States in 2013 on an F1 Visa, for the purpose of studying electrical engineering at the Illinois Institute of Technology in Chicago.  In 2016, Ji enlisted in the U.S. Army Reserves as an E4 Specialist under the Military Accessions Vital to the National Interest program, which authorizes the U.S. Armed Forces to recruit certain legal aliens whose skills are considered vital to the national interest.  In his application to participate in the MAVNI program, Ji specifically denied having had contact with a foreign government within the past seven years, the complaint states.  In a subsequent interview with a U.S. Army officer, Ji again failed to disclose his relationship and contacts with the intelligence officer, the charge alleges.

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.  The charge in the complaint is punishable by a maximum sentence of ten years in prison.  The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ji Chaoqun, 27, a Chinese citizen residing in Chicago, was arrested in Chicago today for allegedly acting within the United States as an illegal agent of the People’s Republic of China.

The arrest and complaint were announced by Assistant Attorney General for National Security John C. Demers, U.S. Attorney John R. Lausch, Jr. for the Northern District of Illinois, and Special Agent in Charge Jeffrey S. Sallet of the FBI’s Chicago field office.

Ji worked at the direction of a high-level intelligence officer in the Jiangsu Province Ministry of State Security, a provincial department of the Ministry of State Security for the People’s Republic of China, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Ji was tasked with providing the intelligence officer with biographical information on eight individuals for possible recruitment by the JSSD, the complaint states.  The individuals included Chinese nationals who were working as engineers and scientists in the United States, some of whom were U.S. defense contractors, according to the complaint.

The complaint charges Ji with one count of knowingly acting in the United States as an agent of a foreign government without prior notification to the Attorney General.  He will make an initial court appearance today at 5:00 p.m. EDT (4:00 p.m. CDT) before U.S. Magistrate Judge Michael T. Mason in Courtroom 2266 of the Everett M. Dirksen U.S. Courthouse in Chicago.

According to the complaint, Ji was born in China and arrived in the United States in 2013 on an F1 Visa, for the purpose of studying electrical engineering at the Illinois Institute of Technology in Chicago.  In 2016, Ji enlisted in the U.S. Army Reserves as an E4 Specialist under the Military Accessions Vital to the National Interest (MAVNI) program, which authorizes the U.S. Armed Forces to recruit certain legal aliens whose skills are considered vital to the national interest.  In his application to participate in the MAVNI program, Ji specifically denied having had contact with a foreign government within the past seven years, the complaint states.  In a subsequent interview with a U.S. Army officer, Ji again failed to disclose his relationship and contacts with the intelligence officer, the charge alleges.

A criminal complaint is merely an accusation.  The defendant is presumed innocent unless and until proven guilty.  The charge carries a maximum sentence of ten years in prison.   The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

The U.S. Army 902nd Military Intelligence Group provided valuable assistance.  The government’s case is represented by Assistant U.S. Attorney Shoba Pillay of the Northern District of Illinois and Senior Trial Attorney Heather Schmidt of the National Security Division’s Counterintelligence and Export Control Section.

CHICAGO — A Chicago insurance agent has pleaded guilty to willfully failing to pay federal and state taxes on more than $4.7 million in income earned over a decade.

JOHN OCWIEJA admitted in a plea agreement that he willfully failed to pay income taxes for tax years 2006 to 2016, causing a combined loss to the United States and State of Illinois of more than $1.1 million.  During those years, Ocwieja earned a total income of more than $4.7 million as a licensed insurance agent and financial representative, the plea agreement states.

Ocwieja, 49, of Chicago, pleaded guilty Monday to three counts of willfully failing to file a federal tax return.  U.S. Magistrate Judge M. David Weisman set sentencing for Dec. 18, 2018, at 10:00 a.m.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.  The government is represented by Assistant U.S. Attorneys Andrianna Kastanek and Patrick King.

According to the plea agreement, Ocwieja earned more than $500,000 in three of the eleven years he failed to pay income taxes, and more than $300,000 in four other years.  Ocwieja acknowledged in the plea agreement that he used the funds for personal matters instead of satisfying his tax liabilities.

The conviction carries a maximum total sentence of three years in federal prison.  The Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — The owner of two recycling businesses illegally landfilled potentially hazardous electronic waste as part of a scheme to re-sell the materials and avoid paying income taxes, according to his guilty plea in federal court in Chicago.

BRIAN BRUNDAGE owned Intercon Solutions Inc. and EnviroGreen Processing LLC, which purported to recycle electronic waste on behalf of corporate and governmental clients.  Brundage represented to the clients that the materials would be disassembled and recycled in an environmentally sound manner.  In reality, from 2005 to 2016, Brundage caused thousands of tons of e-waste and other potentially hazardous materials to be landfilled, stockpiled, or re-sold at a profit to companies who shipped the materials overseas, according to a plea agreement filed Tuesday in U.S. District Court in Chicago.  Brundage admitted evading $743,984 in federal taxes by concealing the income he earned from re-selling the e-waste and from paying himself funds that he falsely recorded as Intercon business expenses.  Brundage spent the purported expenses for his own personal benefit, including wages for a nanny and housekeeper, jewelry purchases, and payments to the Horseshoe Casino in Hammond, Ind., the plea agreement states.

Brundage, 46, of Dyer, Ind., pleaded guilty Tuesday to one count of wire fraud, which is punishable by up to 20 years in prison, and one count of tax evasion, which is punishable by up to five years.  U.S. District Judge Joan Humphrey Lefkow set sentencing for Feb. 27, 2019, at 2:00 p.m.

The guilty plea was announced by John C. Kocoras, First Assistant United States Attorney for the Northern District of Illinois; Brad Ostendorf, Assistant Special Agent-in-Charge of the U.S. Environmental Protection Agency’s Criminal Investigation Division in Chicago; Gabriel L. Grchan, Special Agent-in-Charge of the Chicago office of the Internal Revenue Service Criminal Investigation Division; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Carol Fortine Ochoa, Inspector General of the U.S. General Services Administration.  The government is represented by Assistant U.S. Attorneys Sean J.B. Franzblau and Kelly Greening of the Northern District of Illinois, and Special Assistant U.S. Attorney Crissy Pellegrin of the EPA.

According to the plea agreement, Brundage caused employees of Chicago Heights-based Intercon and Gary, Ind.-based EnviroGreen to sell some of the e-waste and other materials to vendors whom Brundage knew would ship the materials overseas.  Some of the materials contained Cathode Ray Tubes, which are glass video display components of computer and television monitors, and which contain potentially hazardous amounts of lead.  Brundage admitted causing multiple tons of CRT glass and other potentially hazardous materials to be destroyed in environmentally unsafe ways and later landfilled.

CHICAGO — An employee of a restaurant-reservation company used fake names and email addresses to create hundreds of fraudulent restaurant bookings through a competitor’s system, according to a criminal charge filed today by the U.S. Attorney’s Office in Chicago.

STEVEN ADDISON worked as an Enterprise Operations Specialist in the Chicago office of a San Francisco-based company that provides an online reservation system for restaurants.  From November 2017 until February 2018, Addison booked more than 300 fraudulent reservations at Chicago restaurants that use Reserve, a competing reservation service, according to a criminal information filed in federal court in Chicago.  Many of the bogus reservations were made on busy days, including New Year’s Eve and Valentine’s Day, when Addison knew restaurants would suffer financial losses when no diners showed up to claim the reservation, the information states.  Addison’s scheme intended to demonstrate to Chicago restaurants that Reserve had an inferior reservation system, the charge alleges.

The information charges Addison, 30, of Chicago, with one count of wire fraud.  Arraignment in federal court in Chicago has not yet been scheduled.

The charge was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  Assistant U.S. Attorney Sunil R. Harjani represents the government.

According to the information, Addison began his scheme after discovering that Reserve’s software did not prevent reservations from users who entered a fake email address or a fake phone number.  Addison made reservations using names such as “Hans Gruber,” “Richard Ashcroft” and “Jimmy Smits,” bogus email addresses such as “billygala@hotmai.com,” and fake phone numbers such as “199-999-99999,” the information states.

Addison made the reservations on his own accord and did not personally profit from the scheme, the information states.

The public is reminded that an information 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.

A Honduran national was sentenced to 24 months in prison yesterday for theft of government funds in connection with his role in a stolen identity tax refund fraud scheme, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois.

According to documents and information provided to the court, Elin Matute, formerly of Waukegan, Illinois, cashed fraudulently obtained tax refund checks issued in the names of identity theft victims.  In total, the scheme involved approximately 200 false tax returns and resulted in an intended tax loss of over $1.1 million.  Matute cashed the checks at his bank and a local checking cashing business by claiming that the people listed on the checks were family members.  Matute would then deposit the proceeds into bank accounts he controlled and would also send portions of the money overseas.

In addition to the term of imprisonment imposed, the court ordered Matute to serve three years of supervised release and pay $630,498 in restitution to the IRS.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Lausch commended special agents of IRS-Criminal Investigation who investigated the case, and Trial Attorneys John T. Mulcahy and Gregory P. Bailey of the Tax Division, who are prosecuting the case.  Zuckerman also thanked the U.S. Attorney’s Office in Chicago for their substantial assistance.

Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.

CHICAGO — A Chicago man was sentenced today to 25 years in federal prison for engaging in numerous paid sexual acts with underage girls, along with restitution of approximately $240,000 to be paid into a trust fund for the victims and a $100,000 fine.

WILLIAM WHITLEY paid four minors to engage in sex acts with him on multiple occasions from 2012 to 2016.  Three of the victims were runaways at the time they encountered Whitley.  Two of his victims were 14 years old when Whitley first took advantage of them.  At the time of the criminal conduct, Whitley was employed as an officer with the Chicago Police Department.

Whitley, 62, pleaded guilty earlier this year to one count of sex trafficking of a minor.  U.S. District Judge Virginia M. Kendall imposed the sentence in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  Substantial assistance was provided by the Carol Stream Police Department, Chicago Police Department and the Cook County State’s Attorney’s Office.

“Defendant engaged in the sexual exploitation of children, which is one of the most heinous crimes one can commit,” Assistant U.S. Attorneys Sarah Streicker, Elizabeth Pozolo and Michelle Petersen argued in the government’s sentencing memorandum.  “Defendant victimized young runaways and caused his victims irreparable harm and trauma by causing them to engage in commercial sex on numerous occasions.”

The investigation revealed that Whitley took nude photographs of some of his victims, and he provided some of them with marijuana to smoke.  Whitley also openly displayed his status as a Chicago police officer during his sex trafficking conduct.  He was in a police car and wearing his police uniform when he first met one of his victims.  Two of his victims reported that Whitley often kept a loaded handgun under the pillow of his bed, where the sex acts took place.

If you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678.  The hotline is available 24 hours a day, 7 days a week.

CHICAGO — Twenty individuals are facing criminal charges as part of joint federal and state investigations into drug and gun trafficking in Chicago.

The dual investigations centered on drug sales in the city’s Little Village neighborhood and resulted in the seizures of 445 grams of heroin, 230 grams of cocaine, and $97,770 in illegal drug proceeds.  Authorities also seized a pickup truck and 20 illegal firearms, including six rifles.

Indictments returned in U.S. District Court in Chicago charge ten federal defendants with various drug or firearm offenses.  Many of the federal defendants were arrested Wednesday.  Detention hearings will be held next week in federal court in Chicago.  Ten other defendants were charged in state complaints, and several of them were also arrested Wednesday.  The state defendants will appear in Cook County Criminal Court.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kimberly M. Foxx, Cook County State’s Attorney; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; Eddie Johnson, Superintendent of the Chicago Police Department; and Thomas J. Dart, Cook County Sheriff.  Substantial assistance was provided by the U.S. Marshals Service and Illinois Department of Corrections.

“These indictments are the result of the relentless effort of multiple law enforcement agencies who are committed to stopping the flow of illegal drugs and guns into our communities,” said U.S. Attorney Lausch.  “We will continue to work with our state and local partners to investigate and prosecute these significant narcotic and firearm cases.”

“These seizures and indictments brought by our prosecutors prove that drugs, money and firearms do go hand-in-hand,” said DEA SAC McKnight.  “This collaboration among Chicago’s law enforcement community will continue to thrive and bring to justice those who offend and contaminate our communities.”

“The convergence of guns and drugs pose a tremendous threat to our city,” said FBI SAC Sallet.  “Today’s charges demonstrate our commitment to work side by side with our federal and local partners to bring to justice those who terrorize our neighborhoods.  Let it be clear, the rule of law is not optional.”

“Illegal drugs and firearms have no place in our communities, “said IRS-CI Special Agent-In-Charge Grchan.  “We are proud to provide our financial expertise as we work alongside our federal, state, and local law enforcement partners to bring these criminals to justice and make our communities safer.”

“Guns and drugs are driving the violence in many of our neighborhoods,” said State’s Attorney Foxx. “This coordinated and joint effort today with our law enforcement partners shows that we are all committed to ensuring public safety.”

“Our city is plagued by violence fueled by illegal guns and drugs,” Sheriff Dart said. “Those who trade in this misery must be held accountable.  Law enforcement will not give up this fight.”

U.S. v. Garcia-Arroyo, et al

This DEA-led investigation began in early 2017 and was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), in cooperation with the Chicago High Intensity Drug Trafficking Task Force (HIDTA).  OCDETF is a partnership between federal, state and local law enforcement agencies, whose principal mission is to identify, disrupt and dismantle the most serious drug trafficking organizations.

JOSE GARCIA-ARROYO, 26, of Chicago, is charged with distributing cocaine and heroin in Chicago on numerous occasions last year.  Also charged with drug distribution are JASMIN GARCIA, 24, of Chicago; CARLOS CHAVEZ, 32, of Romeoville; and JOEL ANDRADE, 27, of Chicago.

The federal charges accuse convicted felons FAUSTO GONZALEZ, 27, of Chicago, and ARTURO GONZALEZ, 35, of Chicago, of illegally possessing firearms.  Fausto Gonzalez allegedly possessed a 12-gauge shotgun and a .40-caliber handgun in Chicago last year, while Arturo Gonzalez allegedly possessed two .22-caliber rifles in the city earlier this year.  JONATHAN PANIAGUA, 25, of Bolingbrook, is charged with unlawfully dealing firearms without a license.

In all, four federal indictments charge seven individuals, while state charges were filed against eight individuals.  Assistant U.S. Attorneys Aaron R. Bond and Matthew Hernandez represent the government in the federal cases, while the Cook County State’s Attorney’s Office will prosecute the state cases.

U.S. v. Oscar Hernandez, et al

This FBI-led investigation resulted in federal indictments against three individuals for gun or drug offenses, and state charges against two others.  Charged federally with illegal possession of a firearm are convicted felons ANTHONY MENDEZ, 21, of Melrose Park, and OSCAR HERNANDEZ, 37, of Chicago.  Mendez allegedly possessed a loaded AK-47 rifle in west suburban Elmwood Park in 2016, while Hernandez allegedly possessed a Colt .45 revolver and 42 rounds of ammunition in Chicago last year.  Hernandez also faces a federal drug charge for allegedly distributing cocaine in Chicago last year.

The federal charges also accuse HECTOR SANCHEZ, 23, of Chicago, with unlawfully dealing firearms without a license.

Assistant U.S. Attorneys Kavitha Babu and William Dunne represent the government in the federal cases, while the Cook County State’s Attorney’s Office will prosecute the state cases.

The public is reminded that charges contain only accusations and are 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.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.

CHICAGO — A federal judge has sentenced a California man to 35 years in prison for overseeing an international drug-trafficking organization that used Amtrak trains to ship heroin and cocaine to Chicago from Los Angeles.

EDGAR ROQUE, 32, of Paramount, Calif., was the leader of an extensive network of drug dealers that moved thousands of kilograms of narcotics aboard the trains from 2010 to 2016.  At his direction, hundreds of packages were shipped from California to Chicago, St. Louis and elsewhere, each carrying at least three kilograms of cocaine and sometimes significantly more.  Roque worked with an insider at Amtrak to facilitate the shipments and avoid detection by law enforcement.

Roque pleaded guilty earlier this year to drug and money laundering charges.  U.S. District Judge Virginia M. Kendall imposed the sentence Tuesday in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; and Gabriel L. Grchan, Special Agent-in-Charge of the Chicago office of the Internal Revenue Service Criminal Investigation Division.  Substantial assistance was provided by the Amtrak Inspector General’s Office and the Amtrak Police Department.  Assistant U.S. Attorneys Paul H. Tzur and Kavitha Babu represent the government.

“This is criminal conduct of the worst kind,” Mr. Tzur argued in the government’s sentencing memorandum.  “Edgar Roque’s leadership role directing the mass movement of heroin and cocaine into the Chicago area and elsewhere showed that he had absolutely no regard for the safety and well-being of addicts and the communities into which he delivered the drugs.”

Authorities uncovered Edgar Roque’s drug-trafficking operation through a multi-year investigation dubbed “Operation Derailed.”  The investigation was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force, a partnership between federal, state and local law enforcement agencies.  The principal mission of OCDETF is to identify, disrupt and dismantle the most serious drug trafficking and money laundering organizations.

Edgar Roque was personally responsible for importing the drugs from Mexico into California via multiple cartel-level suppliers.  His organization involved more than a dozen people in California, Illinois and elsewhere.  After picking up the drugs at Union Station in Chicago, the group stored the narcotics at stash houses, including a home in the Gage Park neighborhood of Chicago and an apartment in northwest suburban Streamwood.  After selling the drugs throughout the Chicago area, Edgar Roque or members of his crew periodically flew west on commercial airlines with the cash proceeds, often carrying $150,000 per person.

More than 20 defendants were charged during the investigation, and several have pleaded guilty to their roles in Edgar Roque’s organization.  PHILLIP DIAZ, of Paramount, Calif., ensured delivery of narcotics and maintained bank accounts to launder drug proceeds.  Judge Kendall on Tuesday sentenced Phillip Diaz to 20 years and ten months in prison.  ANTHONY KOON, of Pueblo, Colo., delivered nearly 20 kilograms of heroin – with a wholesale value of at least $1 million – to the Chicago area in August 2014.  Judge Kendall previously sentenced Koon to nine years in prison.  GERARDO SANCHEZ, of Los Angeles, Calif., helped launder drug proceeds through various bank accounts, and he accepted delivery of Koon’s heroin in a hotel room in Tinley Park.  Judge Kendall previously sentenced Sanchez to 17 and a half years in prison.  JORGE LUIS OCHOA-CANELA, of Paramount, Calif., helped move hundreds of thousands of dollars of drug proceeds back to drug suppliers.  Judge Kendall previously sentenced Ochoa-Canela to five years and ten months in prison.  An Amtrak employee, ROY J. GRIFFIN, of Calumet City, admitted scheming to steal a package of cocaine that had arrived at Union Station in Chicago.  U.S. District Judge Andrea R. Wood previously sentenced Griffin to 18 months in prison.

Defendants who have pleaded guilty and are awaiting sentencing include RICHARD ROQUE, of Paramount, Calif. (scheduled to be sentenced on Sept. 27, 2018); ANGELICA CERVANTES, of Chicago (Nov. 19, 2018); JUAN J. CERVANTES, of Chicago (Nov. 21, 2018); and OMAR RAMIREZ, of Compton, Calif. (Dec. 18, 2018).

CHICAGO — A federal grand jury has indicted two Chicago Police Department officers for allegedly providing information from non-public traffic crash reports to the owner of an attorney-referral service in exchange for money.

Officers KEVIN TATE and MILOT CADICHON provided information from the crash reports to RICHARD BURTON, who owned and operated Bloomingdale-based National Attorney Referral Service, the indictments allege.  In exchange, Burton allegedly paid a total of at least $7,350 to Cadichon, and at least $6,000 to Tate.  Burton then used the information to solicit accident victims as clients for attorneys, the charges state.

The indictments were returned Thursday in U.S. District Court in Chicago.  Tate, 47, of Chicago, Cadichon, 46, of Chicago, and Burton, 55, of Bloomingdale, are charged with conspiracy to commit bribery.  Tate and Cadichon also face an additional count of bribery.  Arraignments in federal court have not yet been scheduled.

The indictments were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The government is represented by Assistant U.S. Attorneys Andrianna D. Kastanek and Ankur Srivastava.

Traffic crash reports in Chicago are either filled out by a police officer who appears on the scene of an accident, or by a complainant appearing in person at a local police station.  Although the reports are not publicly available during a processing period ranging from 24 hours to several weeks, police officers can access them for legitimate law enforcement reasons.  Officers are not permitted to access or disclose the reports for non-law enforcement purposes.

According to the indictments, Tate and Cadichon provided information from the reports to Burton from 2015 to 2017.  The information was conveyed in various ways, including using a cell phone to text Burton the crash victims’ contact information, the indictments state.  Burton paid the officers via cash bribes and wire transfers, the charges allege.

The conspiracy charge carries a maximum penalty of five years in prison, while the bribery charge is punishable by up to ten years.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines. 

The public is reminded that charges are 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.

ROCKFORD — Six Freeport residents were arrested yesterday on criminal charges as part of a joint federal and state investigation into heroin and cocaine sales in the Freeport area.  The arrests follow criminal indictments returned Tuesday by a federal grand jury in Rockford. 

Arrested were JOSEPH COLEMAN, also known as “Big Joe,” 34, who was charged with three counts of distributing heroin and one count of possession with intent to distribute heroin and cocaine between April 2017 and June 2017; TRISTAN EUELL, also known as “Whip,” 35, charged with one count of distributing heroin in May 2017; ANTHONY THOMPSON, also known as “Blimp,” 42, charged with one count of distributing cocaine in April 2017; FRANK HOWARD, also known as “Nub,” 36, charged with four counts of distributing cocaine and one count of possession with intent to distribute cocaine between February 2018 and April 2018; KYRAN WILLIAMS, also known as “Skinny,” 23, charged with four counts of distributing heroin between April 2017 and June 2018; and TERRANCE YOUNG, also known as, “Sleepy,” 45, charged with three counts of distributing cocaine between July 2017 and December 2017.

During the investigation, law enforcement seized four firearms, distribution quantities of heroin, cocaine, and marijuana, and over $65,000 in cash.

The charges and arrests were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Leo P. Schmitz, Director of the Illinois State Police; and Todd Barkalow, Freeport Police Chief.  The investigation was conducted by the Rockford Area Violent Gang Task Force, the Stateline Area Narcotics Team (“SLANT”), a task force led by the Illinois State Police, and the Freeport Police Department.  The Rockford Area Violent Gang Task Force is led by the Federal Bureau of Investigation and includes members of the FBI and the Rockford, Loves Park, and Freeport Police Departments.  The government is represented by Assistant U.S. Attorney Margaret J. Schneider.

“Heroin and cocaine are dangerous narcotics that are ravaging families and communities in northwestern Illinois,” said U.S. Attorney Lausch.  “These indictments are the result of the diligent efforts of investigators and prosecutors to identify and dismantle a significant drug trafficking organization.”

“These arrests and seizures demonstrate our unwavering commitment to work with our partners to put an end to drug-related violence anywhere it's found in northern Illinois,” said FBI SAC Sallet.  “We are proud to work side by side with the U.S. Attorney's Office, the Rockford Area Violent Gang Task Force, the Freeport Police Department and the Illinois State Police's State Line Area Narcotics Team to bring these individuals to justice.  Those who endanger our communities with drugs should realize, you will be stopped.”

 “The arrests are the result of a multiagency initiative that targeted drug trafficking in our city,” said Freeport Chief Barkalow.  “This investigation, spanning 24 months, is in cooperation with the FBI Safe Streets Task Force and the Illinois State Police, that targeted upper-level narcotic dealers.  These arrests should send a loud and clear message to those in our city committing drug offenses: we know who you are, the community knows who you are, and you could be next.”

“The work with the FBI is an example of multiple agency work across city, state and federal agencies to address criminal elements in the City of Freeport,” said Lowell Crow, Freeport City Manager.

Defendants Coleman, Thompson, Howard, Williams, and Terrance Young all appeared yesterday before U.S. Magistrate Judge Iain D. Johnston in federal court in Rockford, and pleaded not guilty.  Detention hearings are set for next week.  Defendant Euell is scheduled to appear before U.S. Magistrate Johnston on Wednesday, Sept. 6, 2018, for an initial appearance and detention hearing.

Each count of the indictment carries a mandatory minimum penalty of five years in prison and a maximum penalty of up to 40 years in prison.  If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

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

CHICAGO — A federal judge today sentenced a Chicago man to 30 years in prison for robbing a suburban bank at gunpoint.

MALCOLM CARPENTER and another man robbed a Bank of America branch in Homewood on Dec. 4, 2013.  Upon entering the bank, Carpenter announced a robbery and pointed a loaded handgun at a pregnant teller behind the counter.  He and the other robber then forced three female bank employees to lie face down on the ground while compelling the bank manager and a teller to open the vault and hand over cash.  The pair fled the bank with $80,288, but were soon arrested while hiding in a vehicle parked in a nearby apartment complex.

A jury last year convicted Carpenter, 38, of Chicago, on bank robbery and firearm charges.  U.S. District Judge Rebecca R. Pallmeyer imposed the sentence in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  Substantial assistance was provided by the South Suburban Major Crimes Task Force, the South Suburban Emergency Response Team, and the Homewood Police Department.

 “When defendant chose to rob a bank and point a loaded firearm at five innocent individuals, he also chose to put each of their lives at risk,” Assistant U.S. Attorneys Kelly Greening and Sean J.B. Franzblau argued in the government’s sentencing memorandum.  “The victim bank employees suffered a lasting, human cost.”

The other robber, JUSTIN WILLIAMS, 30, of Calumet Park, pleaded guilty to bank robbery and firearm charges.  Judge Pallmeyer in 2016 sentenced Williams to ten years in prison.

WASHINGTON - The Justice Department today announced that it settled a lawsuit against the Village of Tinley Park, Illinois, a suburb of Chicago, alleging that it violated the Fair Housing Act when it refused to approve a low-income housing development in response to race-based community opposition.

The suit, filed in U.S. District Court in Chicago, Illinois, in November 2016, alleged that the Village of Tinley Park discriminated against prospective tenants of a proposed development when it refused to approve the project, despite the Tinley Park Planning Department’s finding that the project was in “precise conformance” with the applicable building requirements. Under Tinley Park’s zoning ordinances, Tinley Park’s Plan Commission should have approved the project and allowed construction to begin. Instead, the lawsuit alleged that in response to race-based community opposition, Tinley Park trustees requested the Plan Commission table consideration of the project. The Plan Commission did so, stalling the project indefinitely. 

Under the settlement, the Village will pay a total of $360,000 in monetary damages to the Village’s former planning director who was placed on leave because of her support for the project, as well as a $50,000 civil penalty to the United States. In addition, the Village will also take a number of actions to guard against further housing discrimination, including training  elected officials and individuals involved in the planning process, developing a fair housing policy, and hiring a fair housing compliance officer. The developer of the property reached a separate settlement with the Village in April 2017. 

“Increasing access to housing, including through affordable housing, is important to the development of our communities,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “The Justice Department will continue to enforce federal civil rights laws, and protect against discrimination, including on the basis of race, with respect to access to affordable housing.”

“Access to housing free from discrimination is a right afforded to all Americans,” said U.S. Attorney John R. Lausch, Jr. of the Northern District of Illinois. “This settlement is an example of our office’s continuing effort to enforce anti-discrimination laws that protect those rights.”

Individuals who believe they have been victims of housing discrimination practices may file a complaint with the Department of Housing and Urban Development (HUD) or a lawsuit in federal or state court. Individuals must file their complaint with HUD within one year of a housing discrimination incident or file a lawsuit in federal or state court within two years of an incident. For more information about housing discrimination laws, call (202) 514-4713 or visit the Department of Justice website at http://www.usdoj.gov/crt/housing/index.html.

CHICAGO — A Chicago financial advisor who told clients that a “fat finger” trading error caused major losses to their investments admitted in federal court today that he actually lost all of their funds through poor trading.

VISHAL SAVLA, 37, of Chicago, pleaded guilty to one count of wire fraud.  Savla operated VCAP LLC, a Chicago investment fund that purported to trade in equities, options and futures contracts.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The government is represented by Assistant U.S. Attorney Sunil Harjani.

Savla admitted in a plea agreement that from 2014 to earlier this year, he raised approximately $2.3 million from investors on the promise of substantial returns.  VCAP was largely unsuccessful during that time, losing approximately 96% in 2014 and more than 99% in the first eleven months of 2016.  Savla continued to solicit and accept investments, and he sent clients phony account statements that fraudulently showed large profits instead of heavy losses, the plea agreement states.  At one point in December 2016, according to the plea agreement, Savla falsely represented to clients that he accidentally committed a “fat finger trade” – an error when entering a trade online – that caused VCAP to decline by approximately 90% in a single day.  Savla admitted in the plea agreement that there was no such error, and that trading losses had caused the decline.

In addition to the losses incurred by investors, Savla’s plea agreement acknowledges that he borrowed funds from family and friends to help repay VCAP investors.  One family member, after being told by Savla about the purported “fat finger” mistake, loaned Savla $500,000, the plea agreement states.  Savla used this money to partially repay some of the VCAP investors.

Savla also admitted in his plea agreement that he spent approximately $260,000 of investor funds for his own personal benefit, including living expenses.  VCAP did not have any cumulative trading profits that allowed for these withdrawals.

Wire fraud is punishable by up to 20 years in prison.  U.S. District Judge Charles R. Norgle set sentencing for Jan. 9, 2019, at 10:00 a.m.

CHICAGO — A convicted felon from Chicago has pleaded guilty to federal firearm charges for illegally selling more than a dozen handguns and rifles.

JYMIL CAMPBELL, 31, admitted in a plea agreement that he sold ten handguns, four large-capacity magazines and three rifles during a nine-month period that ended with his arrest in August 2016.  Most of the sales occurred in Campbell’s residence in the North Lawndale neighborhood of Chicago.  The sales netted Campbell a total of $8,700 in cash, the plea agreement states.  Unbeknownst to Campbell, the two buyers were confidential informants working on behalf of law enforcement.  They provided the guns to law enforcement after each sale.

Campbell pleaded guilty Tuesday to one count of willfully dealing firearms without a license and one count of illegal possession of a firearm by a convicted felon.  The convictions carry a maximum sentence of 15 years in prison.  U.S. District Judge Robert W. Gettleman set sentencing for Nov. 15, 2018.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.  The government is represented by Assistant U.S. Attorney Devlin N. Su.

Campbell acknowledged in his plea agreement that he could not legally possess or deal firearms because he had previously been convicted of two felonies – home invasion and armed robbery – and he lacked a federal firearms license. 

According to the plea agreement, one of the gun buyers put Campbell on notice that the guns would be used in illegal gun violence.  Campbell nonetheless made the sale.  Campbell also admitted telling the buyer that although Campbell had personally fired one of the rifles, the firearm was essentially “brand new” and had not yet been “shot shot, like in a war.”

CHICAGO — Nine individuals are facing criminal charges as part of a joint federal and state investigation into heroin and cocaine sales in the Joliet area.

As part of the probe, law enforcement intercepted cellphone communications between the defendants, conducted extensive surveillance, and seized several items, including three firearms, more than three kilograms of cocaine, more than 60 grams of heroin, approximately $90,000 in illicit cash proceeds, and several vehicles.  Authorities also carried out court-authorized searches of residences in the 800 block of Vine Street in Joliet, the 1400 block of Exposition Avenue in Aurora, and the 2100 block of Englewood Avenue in Lockport.  The investigation was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies, whose principal mission is to identify, disrupt and dismantle the most serious drug trafficking organizations.

Seven defendants are charged in U.S. District Court in Chicago in conspiracies to possess controlled substances with the intent to distribute.  Two defendants are charged in Will County with state drug offenses.  

Several of the federal defendants were arrested last week and have made initial appearances in federal court in Chicago.  The state defendants will appear in Will County Circuit Court at a later time.

The federal charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  Substantial assistance was provided by the Will County State’s Attorney’s Office, Joliet Police Department, Bolingbrook Police Department, Will County Sheriff's Office, Cook County Sheriff's Office, Orland Park Police Department, Evergreen Park Police Department, Aurora Police Department, and the U.S. Bureau of Prisons Joint Intelligence Sharing Initiative.  Assistant U.S. Attorney Devlin N. Su represents the government in the federal cases.

Charged with federal conspiracies are WILLIAM NOBLES, 51, of Joliet; JARON NABORS, 38, of Joliet; ERICKA PRUITTE, 38, of Joliet; KALVIN STEWART, 51, of Aurora; GREGORY WARFIELD, 67, of Joliet; CAESAR ESTRADA, 44, of Joliet; and LUIS CONTRERAS, 40, of Joliet.  Charged in state court are TASHAUN M. MCCARTER, 40, of Joliet; and DAVID L. WHITE, 53, of Joliet.

According to the federal complaints, Nobles is affiliated with the Joliet faction of the Black Gangster Disciples street gang and operates a drug trafficking organization in the Joliet area.  Nabors has conspired with Nobles to distribute the drugs, while Pruitte served as a courier on behalf of Nabors, the charges allege.  The complaints describe several instances in which the trio allegedly conspired to distribute narcotics, including in February 2018 when Nobles allegedly supplied Pruitte with cocaine that had been distributed to Nobles by Estrada and Contreras, knowing that Pruitte would then deliver the drugs to Nabors.  After the meeting, law enforcement pulled over Pruitte’s vehicle and discovered cocaine, crack cocaine and heroin inside the car, the charges allege.

A separate cocaine seizure occurred in December 2017 after Stewart allegedly supplied Warfield with the drugs during a meeting in Aurora, knowing that Warfield would then deliver the drugs to Nobles.  After the meeting, law enforcement pulled over Warfield’s pickup truck and discovered the cocaine in a shopping bag hidden in the passenger-side molding, according to the complaints.  Officers also discovered a loaded handgun in the center console of the truck, the complaints state.       

The federal conspiracy charges carry a mandatory minimum sentence of five years in prison and a maximum penalty of 40 years in prison.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines. 

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

CHICAGO — A suburban Chicago man has been indicted on federal criminal charges for allegedly sharing images of child pornography.

DUSTAN SETNER, 42, of Rosemont, is charged with three counts of transportation of child pornography and one count of possession of child pornography.  Setner shared a photograph and two videos of child pornography in 2016 and 2017, the indictment states.  The photograph was entitled, in part, “9yo in nylons and collar,” while one of the video files was entitled “Baby,” according to the indictment.  Setner allegedly possessed the child pornography on his desktop computer and an external hard drive.

The indictment was returned Thursday in federal court in Chicago.  Arraignment is set for Aug. 27, 2018, at 11:30 a.m., before U.S. Magistrate Judge Sheila M. Finnegan.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The Forest Park Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorney Aaron R. Bond. 

Each count of transporting child pornography is punishable by a mandatory minimum sentence of five years in prison and a maximum of 20 years, while the possession charge carries a maximum sentence of ten years.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. 

The public is reminded that charges are 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 you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678.  The hotline is available 24 hours a day, seven days a week.

ROCKFORD — Seven Rockford residents have been charged by a federal grand jury with multiple counts of wire fraud and additional offenses.  FEUY KHAIKHAM, 57; LEEFORM XAYVANDY, SR., a.k.a. “John,” 37; BOUNLEUNG THAMONTRI, a.k.a. “Tommy,” 54; VANSY XAYVANDY a.k.a. “Dee,” 42; SOM XAYVANDY, 47; CHRISTIANA XAYVANDY, a.k.a. “Tina,” 26; and AUNG GYAW, a.k.a. “AJ,”  23, were each charged with seventeen counts of wire fraud in a superseding indictment returned on July 31, 2018.

The wire fraud charges relate to the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the food stamp program.  SNAP is a federal benefit program that assists low-income individuals and families purchase food.  The U.S. Department of Agriculture, Food and Nutrition Service (“USDA”) is responsible for administering and implementing SNAP in conjunction with state governments.  The Illinois Department of Human Services, which administers SNAP in Illinois, provides benefits to eligible individuals and families on their Illinois Link cards.  To use their SNAP benefits, Illinois recipients must present their Link card to a retailer authorized to participate in SNAP by the USDA.  Stores authorized to participate in SNAP can accept SNAP benefits only as payment for eligible food items and cannot accept SNAP benefits in exchange for cash.  The illegal exchange of SNAP benefits for cash is commonly referred to as SNAP trafficking.

The superseding indictment alleges that between April 2015 and January 18, 2017, the defendants schemed to defraud the USDA and the State of Illinois by fraudulently accepting and redeeming SNAP benefits exchanged for discounted amounts of cash, knowing that such exchanges were prohibited under SNAP.  It is alleged that the seven defendants fraudulently obtained more than $3 million in reimbursement for SNAP benefits over the course of the SNAP trafficking scheme.  Each count of wire fraud carries a maximum penalty of 20 years in prison and a fine of up to $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.

The superseding indictment also charges Khaikham, Leeform Xayvandy, Som Xayvandy, and Gyaw with one count each of SNAP fraud, and it charges Vansy Xayvandy with two counts of SNAP fraud.  SNAP fraud carries a maximum penalty of 5 years in prison and a $10,000 fine.

In addition to wire fraud and SNAP fraud charges, the superseding indictment charges Khaikham, Leeform Xayvandy and Thamontri with conspiracy to commit money laundering and multiple counts of money laundering.  The superseding indictment alleges that Khaikham and Thamontri recruited an individual to act as a nominee owner of a grocery store in Rockford, obtain SNAP authorization for the grocery store, and open a bank account for the grocery store in the nominee owner’s name.  The superseding indictment alleges that proceeds of SNAP trafficking transactions conducted by Khaikham, Thamontri, and Leeform Xayvandy were deposited into the bank account, which was controlled by Khaikham and Thamontri. The superseding indictment further alleges that Khaikham, Thamontri, and Leeform Xayvandy conspired to conduct and attempt to conduct financial transactions to liquidate and distribute those proceeds while concealing the nature, control and ownership of the proceeds.  Each count of money laundering and conspiracy to commit money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine.

The superseding indictment also charges Leeform Xayvandy with one count of engaging in a monetary transaction in criminally-derived property in an amount greater than $10,000. This count carries a maximum penalty of ten years in prison and a $250,000 fine.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Anthony Mohatt, Special Agent-in-Charge of the Midwest Regional Office of the U.S. Department of Agriculture, Office of Inspector General in Chicago; and Gabriel L. Grchan, Special Agent-in-Charge of the Chicago office of the Internal Revenue Service, Criminal Investigation Division.  The Rockford Police Department and the Winnebago County Sheriff’s Office assisted in the investigation.

Leeform Xayvandy, Christiana Xayvandy and Gyaw were arraigned on Aug. 7, 2018, and pleaded not guilty to all charges. Vansy Xayvandy and Som Xayvandy were arraigned Tuesday and also pleaded not guilty to all charges. Khaikham is scheduled to be arraigned on the superseding indictment on Sept. 6, 2018, at 11:00 a.m.  With the exception of Thamontri, who remains at large, the other defendants are currently released on bond pending trial.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  Each defendant is presumed innocent and is 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 sentencing statutes and the advisory United States Sentencing Guidelines and order full restitution.

The government is represented by Assistant U.S. Attorney Talia Bucci.

ROCKFORD — A Rockford man was sentenced today by U.S. District Judge Frederick J. Kapala for mail fraud. 

TODD J. FENDLER, 42, was sentenced to 50 months in federal prison, to be followed by three years of supervised release, in addition to being ordered to pay $965,879.63 in restitution. 

Fendler, who pleaded guilty to the charge on Jan. 17, 2018, was a licensed insurance producer who owned and operated several insurance-related businesses in Rockford, including Surplus Market Solutions LLC, Northern Underwriting Managers Inc., Northern Illinois Insurance Billing Services, and Northern Illinois Insurance Agency Inc. 

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government was represented by Assistant U.S. Attorneys John G. McKenzie and Scott R. Paccagnini.

According to a written plea agreement, Fendler obtained bank account information from businesses and individuals who had applied for insurance policies through Fendler’s companies.  Using the victims’ bank account information, without authorization, Fendler used on-line services to create fictitious electronic checks purportedly issued by the victims and payable to Fender’s companies.  Fendler deposited those fictitious checks into bank accounts he controlled and then kept those funds for his own purposes.  Fendler also made unauthorized electronic withdrawals from his clients’ bank accounts and the bank accounts of insurance agents and agencies that Fendler did business with, and then kept those funds for his own purposes.

CHICAGO — Two technicians at a Chicago pharmacy stole more than 56,000 pills of Hydrocodone and sold them for a profit, according to an indictment returned in federal court in Chicago.

ELIZABETH CRUZ and JACQUELINE GREEN worked at Allcare Discount Pharmacy, located in the 2700 block of West North Avenue in Chicago.  From September 2015 to December 2017, the pair conspired to steal approximately 56,108 pills of Hydrocodone and sell them outside the pharmacy for a profit, the indictment states.  Cruz and Green concealed the scheme by falsifying the pharmacy’s inventory to make it look like the pills had either not been received from the distributor or were dispensed to patients, according to the charges.

The indictment charges Cruz, 33, of Stone Park, and Green, 27, of Chicago, with conspiracy to possess a controlled substance with the intent to deliver.  Both defendants were arrested on Aug. 9, 2018.  Detention hearings are scheduled for today at 3:00 p.m., before U.S. Magistrate Judge Maria Valdez in Chicago.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration.  The government is represented by Assistant U.S. Attorney Nani M. Gilkerson.

“Diversion of opioids contributes to addiction and illegal drug sales in our communities,” said U.S. Attorney Lausch.  “Pharmacy employees who divert prescription drugs for their own profit will be prosecuted to the full extent of the law.”

“This investigation illustrates that the DEA and the U.S. Attorney’s Office will bring to justice those responsible for the theft and diversion of controlled substances, not only on the street, but also in pharmacies,” said Special Agent-in-Charge McKnight.

The conspiracy charge carries a maximum penalty of 20 years in prison.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.  The public is reminded that charges are 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.

CHICAGO — A federal grand jury has indicted a former Chicago man for allegedly attempting to join the Islamic State of Iraq and al Sham.

FARESS MUHAMMAD SHRAITEH, 21, is charged with one count of conspiracy to provide material support and resources to ISIS, and one count of attempting to provide material support and resources to ISIS.  The indictment was returned Thursday in U.S. District Court in Chicago.

Shraiteh is a United States citizen who formerly resided in Chicago and now lives in Israel.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; John C. Demers, Assistant Attorney General for National Security at the U.S. Department of Justice; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of representatives from the FBI and numerous federal, state and local law enforcement agencies.

According to the indictment, Shraiteh and two other individuals began conspiring to join ISIS in November 2014.  In May 2015 the trio traveled from Chicago to Egypt, where they allegedly spent time in Cairo and Sharm El-Sheik, before flying to Istanbul, Turkey.  Shraiteh was denied entry into Turkey, while the two others were allowed in, the indictment states.  Shraiteh went to Israel, where he has family, and later communicated with one of the other individuals that he planned to renew his passport and join them, the charges allege.

One of the other individuals was later killed while conducting a suicide attack on behalf of ISIS, the indictment states.  The charges allege that Shraiteh knew ISIS was a terrorist organization when he conspired to join it.

Each charge in the indictment is punishable by up to 15 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines. The public is reminded that an indictment is not evidence of guilt.  Shraiteh is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The government is represented by Assistant U.S. Attorneys Barry Jonas and Peter S. Salib of the Northern District of Illinois, and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.

CHICAGO — The owners of five Chicago-area restaurants are facing criminal tax charges as part of a federal investigation into the underreporting of gross receipts.

The charges allege that the restaurant owners willfully avoided paying the full amount of federal taxes by reporting gross receipts that were substantially lower than the true amounts.  The federal investigation, which remains ongoing, has focused on sales suppression software and other techniques used by restaurant owners to manipulate gross receipts. 

Charged with willfully filing false tax returns are SHULI ZHAO, 59, of Westmont, the owner of Katy’s Dumpling House in Westmont; CHUN XU ZHANG, 42, of Aurora, the owner of Sushi City in Downers Grove; QUAN SHUN CHEN, 53, of Chicago, the owner of Hunan Spring in Evanston; SANDRA SANCHEZ, 44, of Morton Grove, the owner of Cesar’s Tacos on North Clark Street in Chicago; and ISRAEL SANCHEZ, 43, of Chicago, the owner of Cesar’s on Broadway on North Broadway in Chicago.  Arraignments in U.S. District Court in Chicago have not yet been scheduled.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Connie Beard, Director of the Illinois Department of Revenue.

“These charges send a clear message that restaurant owners who choose to illegally underreport gross receipts will be held accountable,” said U.S. Attorney Lausch.  “Recovering funds for the federal treasury is a top priority in our office.”

“The charges announced today are an important step in the fight against individuals and restaurants in our community that cheat on their taxes,” said Special Agent-in-Charge Grchan.  “This is only the beginning.  I want to warn those restaurants, gas stations, convenience stores, and other establishments that are currently using or thinking of using sales suppression software, that we are on to you and your methods.  If you steal from the federal government, there will be serious consequences.” 

“I commend the work of the Illinois Department of Revenue’s Criminal Investigations Division and the IRS as we continue efforts to protect taxpayers from tax fraud,” said Director Beard.  “Today’s charges should send a message that technology cannot shield criminals from being held accountable.”

Zhao, Zhang and Chen were charged in indictments returned Tuesday in U.S. District Court in Chicago.  Zhao allegedly underreported gross receipts for the calendar years 2013 to 2015; Zhang for the calendar years 2012 to 2015; and Chen for the fiscal years 2012 to 2015 and the calendar years 2015 and 2016.  Assistant U.S. Attorney Sheri H. Mecklenburg represents the government in the Zhao, Zhang and Chen cases.

Sandra Sanchez and Israel Sanchez were charged in criminal informations filed Tuesday in U.S. District Court in Chicago.  Sandra Sanchez and Israel Sanchez allegedly underreported gross receipts for the calendar year 2012.  Assistant U.S. Attorney Yusef Dale represents the government in the Sandra Sanchez and Israel Sanchez cases.

The public is reminded that charges are 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.  Filing false tax returns carries a maximum penalty of three years in prison.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The U.S. District Court for the Northern District of Illinois has entered a permanent injunction against three related Chicago companies — Global Marketing Enterprises, Inc., Lifeline Nutrients, Corp., and Pronto Foods Company — as well as their owner Eduardo S. Chua, and their operations manager Haidee V. Dawis.  The injunction prevents the defendants from manufacturing, selling, and distributing adulterated and misbranded dietary supplements and unapproved and misbranded drugs, the Department of Justice announced today.  

The Department filed a complaint on July 26, 2018, alleging that defendants manufacture, package, label, and distribute numerous products in violation of the Federal Food, Drug and Cosmetic Act (FDCA).  The complaint further alleges that defendants’ dietary supplements were adulterated because they were not manufactured, prepared, packed, labeled or held in compliance with federal current good manufacturing practice (CGMP) regulations.  FDA inspections of defendants’ plant in 2015 and 2017 revealed numerous failures to comply with CGMP regulations, including the failure to establish specifications for the identity, strength, composition and purity of their products and the failure to establish and follow written sanitation procedures.  The complaint also alleges that many of the labels on defendants’ supplements were deficient, and caused the products to be misbranded under the FDCA.

Additionally, defendants marketed numerous products as drugs, according to the complaint, by making claims that these products could help treat or prevent a host of serious diseases, including Alzheimer’s disease, diabetes, HIV/AIDS, and Parkinson’s disease.  Defendants sold these products to the public using these claims despite not having the required FDA approval.  

The complaint alleges that defendants’ disease-related treatment claims were unsupported by any well-controlled clinical studies or other credible scientific substantiation.  Additionally, defendants’ products did not contain adequate directions for such uses.  The complaint asserts that directions for use, including dosages, warnings, and side effects, must be premised on clinical data derived from scientifically controlled investigation, and since defendants made disease-related treatment claims about their products in the absence of any such clinical data, the products were misbranded.  

The defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction.  The consent decree requires that if the defendants wish to resume manufacturing and distributing dietary supplements in the future, they must implement the remedial measures set forth in the consent decree, notify the FDA of the measure they have taken, and obtain written approval from the FDA that they appear to be in compliance with both the terms of the consent decree and the provisions of the FDCA.

“Consumers must be able to trust that the products they buy are safe and the claims on the product's label can be relied on,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Justice Department will continue to work with FDA to take action against manufacturers that employ substandard practices, so that the public can rely on the safety and integrity of the products they buy.”

“Marketing medical products that were not manufactured in compliance with FDA regulations and making unsubstantiated claims about those products can lead to serious consequences for unsuspecting buyers,” said U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois. “This case reflects our office’s ongoing commitment to safeguard consumers.”

“Companies that market dietary supplements with unproven health claims and also continue to violate manufacturing regulations put consumers’ health in jeopardy,” said Melinda Plaisier, FDA associate commissioner for regulatory affairs. “The FDA will take the enforcement actions necessary to protect consumers from this undue risk.”

This matter was handled by Trial Attorney James Harlow of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Donald Lorenzen of the U.S. Attorney’s Office for the Northern District of Illinois, with the assistance of Associate Chief Counsel Julie Lovas of the FDA’s Office of General Counsel, Department of Health and Human Services.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Illinois, visit its website at www.justice.gov/usao-ndil.

CHICAGO — A former financial analyst for a north suburban medical waste management company used insider information to trade shares of the company ahead of an earnings report, according to a federal criminal charge filed today by the U.S. Attorney’s Office in Chicago.

In April 2016, MATTHEW C. BRUNSTRUM earned $158,707 in profits and avoided losses of $1,194 from the purchase and sale of securities in Lake Forest-based Stericycle Inc., where he worked as a financial analyst, according to a criminal information filed in federal court in Chicago.  Brunstrum used material, non-public information to make the trades ahead of a public announcement by Stericycle regarding its lower-than-projected earnings for the first quarter of 2016, the information states.  Brunstrum also directed or encouraged a relative to make similar trades ahead of the earnings announcement, the information alleges.  The relative allegedly made profits of $146,028, and avoided losses of $24,224.

The information charges Brunstrum, 26, of Chicago, with one count of securities fraud by insider trading.  The charge was filed by the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago.  During the investigation, authorities seized $328,959 in illegal profits.

The charge was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The U.S. Securities and Exchange Commission, which today filed a civil enforcement action against Brunstrum, provided valuable assistance.

The charge alleges that certain Stericycle personnel, including Brunstrum, became aware of the company’s first quarter earnings results in mid-April 2016.  When trading on the Nasdaq Stock Market closed on April 28, 2016, Stericycle’s share price was $121.74.  After the close of trading that day, Stericycle publicly announced the earnings results and its executives participated in a conference call with outside analysts.  During the call, Stericycle’s chief financial officer acknowledged that earnings per share were approximately 5% lower than the company had projected.  The following trading day, Stericycle’s stock price fell more than 20%, closing at approximately $95.56 per share.

The charge alleges that Brunstrum and his relative sold nearly 1,050 shares of Stericyle stock prior to the public earnings announcement.  The pair also purchased more than 180 near-term, out-of-the-money put options for Stericycle shortly before the earnings announcement, and then sold those options at a profit after Stericycle’s stock declined, the information states. 

The public is reminded that an information 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. 

Arraignment is set for Aug. 2, 2018, at 1:30 p.m., before U.S. Magistrate Judge Jeffrey T. Gilbert.  Securities fraud by insider trading is punishable by up to 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

Assistant U.S. Attorney Paul H. Tzur represents the government in the criminal case.

CHICAGO — The vice president of an insurance underwriting group fraudulently obtained more than $13.5 million from a corporate client by fraudulently issuing and collecting premium payments on “matching deductible” policies, according to federal criminal charges filed today by the U.S. Attorney’s Office in Chicago.

DAVID BALLARD, 54, of Chicago, oversaw the Pennsylvania account of a large health care company.  From 2005 to 2016, Ballard fraudulently issued “matching deductible” insurance renewal policies that his employer had not authorized, according to a criminal information filed in U.S. District Court in Chicago.  Ballard created and submitted to the health care company phony estimates, invoices, binder letters and policies that outlined the purported terms of coverage, the charges allege.  He then had the premium payments diverted to a shell company that he controlled, the information states.  As a result of the scam, Ballard fraudulently pocketed more than $13.5 million, which he used to pay personal expenses, including credit card bills, expensive dinners, travel costs, and real estate for himself and his family, according to the charges.

Ballard is charged with one count of wire fraud, which is punishable by up to 20 years in prison.  Arraignment in U.S. District Court in Chicago has not yet been scheduled.

The charge was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

The public is reminded that an information 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.

The government is represented by Assistant U.S. Attorney Jennie Levin.

CHICAGO — An Arkansas man has been sentenced to more than seven years in federal prison for illegally selling numerous handguns and rifles in Chicago and the suburbs.

KLINT KELLEY brought the firearms from Arkansas to Chicago and illegally sold them to a convicted felon.  Kelley sold a total of 21 guns to the felon on three occasions last year, including during the Fourth of July and Labor Day weekends.  The weapons included eleven handguns, nine rifles and one shotgun.  Several of the firearms were semi-automatic guns capable of accepting large-capacity magazines.

Kelley, 28, of Malvern, Ark., pleaded guilty earlier this year to one count of unlawfully engaging in the business of dealing firearms, and one count of selling firearms to a known felon.  U.S. District Judge Ronald A. Guzman on Wednesday sentenced Kelley to seven years and three months in prison.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; and Eddie Johnson, Superintendent of the Chicago Police Department.  The Illinois State Police provided valuable assistance.

“In a city that has seen shootings and homicides in astronomical numbers, illegal transportation of firearms and to a known convicted felon should not be tolerated,” Assistant U.S. Attorney Tobara S. Richardson argued in the government’s sentencing memorandum.  “Defendant knowingly engaged in criminal conduct that contributes to one of the worst aspects of the city.”

Kelley’s plea agreement describes the three occasions when he illegally sold firearms to the felon.  On April 3, 2017, in a residence in southwest suburban Frankfort, Kelley sold the felon five handguns and three semi-automatic rifles, in exchange for $4,750 in cash.  On July 3, 2017, on Chicago’s West Side, Kelley sold the felon four handguns and one semi-automatic rifle, in exchange for $3,000 in cash.  On Sept. 3, 2017, in a commercial area of southwest suburban Chicago Ridge, Kelley sold the felon five rifles, two handguns and one semi-automatic shotgun, in exchange for $7,000 in cash.

At least three of the 21 firearms had been reported stolen, including one gun taken in a burglary of a police officer’s residence.

Kelley grew up in Illinois and moved to Arkansas several years ago.

CHICAGO — Six individuals are facing federal criminal charges as part of an investigation into heroin and crack cocaine sales in the Rockford area.

As part of the probe, law enforcement conducted numerous controlled purchases of narcotics and conducted extensive physical and video surveillance.  Authorities earlier this month searched a residence in the 4400 block of Grinnell Drive in Rockford and discovered distribution quantities of heroin.

The investigation was conducted by the Rockford Area Violent Gang Task Force and the Winnebago County Sheriff’s Police.  The Rockford Area Violent Gang Task Force is led by the Federal Bureau of Investigation and includes members of the FBI and the Rockford, Loves Park, and Freeport Police Departments.

A criminal complaint and affidavit filed in U.S. District Court in Rockford charges six defendants with conspiracy to distribute and possess heroin, cocaine, and crack cocaine, with intent to distribute.  Several of the defendants were arrested Wednesday.  Detention hearings will be held next week in U.S. District Court in Rockford. 

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Gary Caruana, Winnebago County Sheriff.  The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives assisted in the investigation.  Assistant U.S. Attorney Talia Bucci represents the government.

“The charges in this case send a clear message that the distribution of illegal drugs in Rockford will not be tolerated,” said U.S. Attorney Lausch.  “I commend our federal and local law enforcement partners for working together to shut down a significant drug trafficking organization.”

“These arrests and seizures demonstrate our overall strategy and relentless determination to eradicate the drug-fueled gang violence plaguing our community,” said FBI Special Agent-in-Charge Sallett.  “We are proud to work side by side with the U.S. Attorney’s Office, the Rockford Area Violent Gang Task Force, and the Winnebago County Sheriff’s Office to bring these individuals to justice. Anyone who terrorizes our communities with their wanton drug dealing should know, we are coming for you.”

Winnebago County Sheriff Caruana thanked all law enforcement partners for their unselfish work to bring this case to a successful conclusion.  “This operation makes the Winnebago County region a safer community and showcases Cooperative Law Enforcement,” Sheriff Caruana said.

According to the complaint, TYJUAN ANDERSON, 35, of Rockford, operated a drug-trafficking organization that distributed narcotics in the Rockford area.  The complaint alleges that Anderson and other members of his crew, including CHRISTOPHER ARNOLD, 33, of Rockford, and LUMONT JOHNSON, 45, of Rockford, obtained narcotics from multiple suppliers and provided the drugs to other members of Anderson’s organization.  The charges allege that CLEVELAND JOHNSON, 38, of Rockford, and DAVID APPLETON, 55, of Rockford, distributed the drugs to customers in the Rockford area.

According to the complaint, Anderson served as a mentor to JUSTIN HILL, 37, of Rockford, on how to operate a successful drug-trafficking business, manage money, and avoid police surveillance.  At times when Anderson was low on narcotics, Hill would supply him with drugs to increase Anderson’s inventory, the complaint states.

The conspiracy charge carries a maximum penalty of 20 years in prison.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.  The public is reminded that a complaint contains only charges and is not evidence of guilt.  The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

CHICAGO — A Michigan man has pleaded guilty to federal criminal charges for kidnapping and sexually assaulting a suburban Chicago woman whose home he burglarized.

CARLEOUS CLAY admitted in a plea agreement that he broke into the woman’s home in Lansing, Ill., in September 2015, took several items of value and carried them away.  When he returned later that night to steal more items, Clay encountered the woman, who was returning home with groceries, the plea agreement states.  Clay abducted the woman and drove her car to an ATM in Munster, Ind., where he used her PIN to withdraw $140 from her bank account.  Clay then drove to the parking lot of a vacant commercial business in Burns Harbor, Ind., and sexually assaulted the woman in the backseat of her car, the plea agreement states. 

Afterwards, Clay strangled the woman and used lighter fluid and a lighter to set her on fire in an effort to kill her, his plea agreement states.  The victim survived but suffered permanent and life-threatening bodily injuries.

Clay, 35, of Holland, Mich., pleaded guilty Tuesday to one count of kidnapping, one count of attempted murder, and one count of using fire to commit a felony.  The conviction is punishable by up to life in prison.  U.S. District Judge Virginia M. Kendall set sentencing for Oct. 9, 2018, at 10:00 a.m.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  Valuable assistance was provided by police departments in Lansing, Ill.; Burns Harbor, Ind.; Ogden Dunes, Ind.; Munster, Ind.; Porter County, Ind.; Holland, Mich.; and Ottawa County, Mich.  The government is represented by Assistant U.S. Attorneys Angel M. Krull and Ronald DeWald.

In addition to the kidnapping, Clay admitted in the plea agreement that he attacked a female case manager while jailed at the Metropolitan Correctional Center in downtown Chicago.  The attack occurred in April 2017 in the case manager’s office on a residential floor of the MCC.  Clay pretended to make a complaint about another inmate, but once inside the office he pushed the case manager to the floor and took her keys, which he used to lock himself inside the office with the victim, the plea agreement states.  Clay admitted that he put a homemade knife to the case manager’s throat and threatened to kill her.

Multiple MCC staff members eventually entered the office, deployed pepper spray on Clay, and removed the case manager from the room.

CHICAGO — A north suburban businessman who operated a cellular telephone distributorship throughout Illinois and other Midwestern states was sentenced last Friday to 24 months imprisonment for willfully failing to pay more than $800,000 in personal and corporate income taxes.

JORDAN ECKERLING, 53, of Highland Park, the owner of Pagecomm of Illinois Inc., pled guilty in January 2018, admitting that from 2008 to 2012 he caused tax losses to the United States and Illinois in the total amount of $806,099.  As the sole shareholder and officer of Pagecomm, Eckerling attempted to conceal income by causing the company to issue him “business checks” that he cashed and used for personal expenses. Eckerling admitted he caused the company to pay personal expenses such as a housekeeper to regularly clean his boat and his primary and secondary residences, and charged personal expenses to Pagecomm’s credit card accounts, including for a family vacation to Cancun, Mexico. Eckerling also admitted that he used gift cards belonging to the company for personal expenses, and that he placed his wife on the company payroll to obtain health insurance in her name rather than his, even though she was not employed by the company.   

U.S. District Judge Virginia M. Kendall imposed the sentence in federal court in Chicago.   Eckerling was ordered to report to the Federal Bureau of Prisons on September 28, 2018.  He paid the $806,099 tax obligations while the case was pending.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

CHICAGO — More than 50 individuals, including a reputed gang member, are facing criminal charges as part of a joint federal and state investigation into heroin and fentanyl sales in Chicago.

The investigation, dubbed “Operation Fat Chance,” centered on drug sales on the city’s West Side and resulted in the seizures of more than three kilograms of heroin, more than a kilogram of cocaine, and more than 230 grams of fentanyl.  Authorities also seized eight illegal firearms, including a semi-automatic assault rifle with a drum barrel magazine, and more than $100,000 in narcotics proceeds.  As part of the investigation, law enforcement shut down two open-air drug markets in the city’s North Lawndale and East Garfield Park neighborhoods.

The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies, whose principal mission is to identify, disrupt and dismantle the most serious drug trafficking organizations.

Criminal complaints and affidavits filed in U.S. District Court in Chicago charge 15 defendants with various drug offenses.  Two of the federal targets were arrested on Tuesday and several more were arrested Thursday.  Detention hearings for some of the federal defendants will be held today and next week in U.S. District Court in Chicago. 

Forty two other defendants were charged in state complaints, and many of them were also arrested Thursday.  They have begun making initial appearances in Cook County Criminal Court.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; Kimberly M. Foxx, Cook County State’s Attorney; and Eddie Johnson, Superintendent of the Chicago Police Department.  Substantial assistance was provided by the U.S. Marshals Service.  Assistant U.S. Attorneys Nani Gilkerson and Jeannice Appenteng are representing the government. 

According to the federal complaints, THOMAS BARFIELD, 36, of Chicago, is a reputed street-gang member who operated a drug trafficking organization that utilized street-level distributors (known as “pack workers”) to sell heroin and fentanyl to customers.  Many of the deals were carried out at an open-air drug market near the intersection of Homan Avenue and Douglas Boulevard in Chicago, the complaints state.  The sales were allegedly overseen by high-ranking members of Barfield’s organization, including CHARELLE THOMPSON, 28, of Chicago; NICOLE GREEN, 34, of Chicago; GLORIA ANDERSON, 60, of Chicago; and THOMAS SMITH, 65, of Chicago.  QUIERA WALLS, 35, of Chicago, and JARVIS PAYNE, 30, or Chicago, are alleged to have assisted Barfield with the packaging and distribution of narcotics.

From December 2017 to April 2018, according to the complaints, law enforcement conducted numerous undercover drug purchases from Smith, Anderson, and the pack workers, including MICHAEL JACKSON, 44, of Chicago; ANTON BROWN, 46, of Chicago; and ALFRED JOHNSON, 54, of Chicago.  Last month, agents searched Barfield’s home and three alleged stash houses on the West Side of Chicago, seizing heroin, cocaine, a rifle, two handguns, and drug-packaging materials, the complaints state.

The federal complaints also describe an April 2018 narcotics transaction in front of a grocery store in 4400 block of West Armitage Avenue in the Hermosa neighborhood of Chicago.  According to the charges, JOSE HERNANDEZ, 48, of Chicago, delivered a kilogram of cocaine to OBED ORNELAS, 36, of Chicago, inside Ornelas’ Ford Mustang.  When officers attempted to pull over the Mustang, Ornelas allegedly sped off and tossed the bag of cocaine out of the driver’s side window.  Officers recovered the bag in the 2400 block of North Kedzie Avenue in Chicago, the complaints state. The complaints also allege that Ornelas supplied Barfield with narcotics.

Also charged in the federal complaints is another reputed gang member, WILLIE KELLEY, 26, of Chicago.  Kelley allegedly managed heroin sales at an open-air drug market near the intersection of Lexington Street and Sacramento Avenue in Chicago’s East Garfield Park neighborhood.

The federal complaints also charge DARIUS FRANKLIN, 34, of Algonquin, and JONATHAN HARRIS, 26, of Cicero. According to the complaints, Franklin and Harris are alleged to have distributed heroin to various narcotics customers. Agents searched Franklin’s alleged stash house and recovered over two kilograms of heroin and drug-packaging materials. Franklin is also alleged to have provided heroin to Willie Kelley.

The public is reminded that a complaint contains only charges and is not evidence of guilt.  The defendants are presumed innocent and are 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 reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.

CHICAGO — Several Chicago-area medical professionals, including four physicians, are facing federal criminal charges as part of the largest health care fraud enforcement action in Department of Justice history, federal authorities announced today.

The national enforcement action taken by the Medicare Fraud Strike Force involved over 600 defendants charged throughout the country, including more than 150 physicians, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $2 billion in false billings. Several of the doctors were charged for their alleged roles in prescribing and distributing opioids and other dangerous narcotics. In addition, the Department of Health and Human Services has initiated suspension actions against numerous providers, including doctors, nurses and pharmacists.

The national enforcement action was announced by Attorney General Jeff Sessions; HHS Secretary Alex M. Azar III; Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Deputy Director David L. Bowdich of the Federal Bureau of Investigation; Assistant Administrator John Martin of the U.S. Drug Enforcement Administration; Inspector General Daniel R. Levinson of the HHS Office of Inspector General; Deputy Chief Eric Hylton of the Internal Revenue Service’s Criminal Investigation Division; Director Alec Alexander of the Centers for Medicare and Medicaid Services; and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service.

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

"Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer," said Attorney General Sessions. "In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever."

"Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money—it’s a dollar that can go toward providing healthcare for Americans in need," said HHS Secretary Azar. "This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work."

"Medicare and Medicaid are significant health care programs that pay for vital medical services," said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. "Our office will continue to investigate and prosecute any medical professional who knowingly violates the rules and abuses the trust placed in them by the government and their patients."

"Our nation’s opioid epidemic has no boundaries, and today’s actions highlight just that," said Brian M. McKnight, Special Agent-in-Charge of the Chicago Field Division of the DEA. "Opioid addiction and the criminal activity driving it extend far beyond the cartels and gang violence to the rogue medical professionals identified today."

Several Chicago-area medical professionals, including four doctors, were charged as part of investigations in the Northern District of Illinois. The local charges were announced by U.S. Attorney Lausch; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General; DEA Chicago SAC McKnight; Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of HHS-OIG.

Two of the Illinois cases involved licensed physicians who allegedly falsely certified patients for home-health services reimbursed by Medicare. The indictments against DR. FLORENTINO LEONG and DR. RUBEN INOCENCIO allege that the doctors authorized in-home services even though they knew the patients were not confined to their homes and did not require such services. Dr. Leong, 78, of Orland Park, and Dr. Inocencio, 77, of Skokie, are charged with health care fraud and making false statements in a health care matter. Arraignment for Dr. Leong is set for today at 10:00 a.m. before U.S. District Judge Manish S. Shah, while arraignment for Dr. Inocencio has not yet been scheduled. Their cases are being prosecuted by Assistant U.S. Attorney Stephen Chahn Lee.

Another Illinois case involves a licensed psychiatrist, DR. KIRK HOPKINS, who allegedly earned more than $5.5 million by falsely billing Medicaid and Medicare for psychotherapy services that were never performed. Dr. Hopkins, 44, of Chicago, pleaded not guilty to five counts of wire fraud during his arraignment Wednesday before U.S. District Judge Joan H. Lefkow. A status hearing is set for July 25, 2018, at 9:00 a.m. The case is being prosecuted by Assistant U.S. Attorney Sheri H. Mecklenburg. Substantial investigative assistance was provided by the Illinois State Police Medicaid Fraud Control Bureau – North.

The fourth Illinois physician charged as part of the enforcement action is DR. SYED ATHER, who owned two home-visiting physician companies in Lincolnwood – Mobile Physicians S.C. and M&F Medical Services Ltd. Dr. Ather allegedly billed Medicare for at least $2.8 million of unnecessary and "up-coded" home-physician visits from 2010 to 2018. Dr. Ather, 44, of Lincolnwood, pleaded not guilty to 14 counts of health care fraud during his arraignment Wednesday before U.S. District Judge Matthew F. Kennelly. A status hearing is set for Sept. 24, 2018. The case is being prosecuted by Trial Attorney Leslie S. Garthwaite of the Justice Department’s Criminal Division Fraud Section.

Federal charges were also filed in Illinois against a patient marketer, LINDA HAWKINS, who recruited home-health patients on behalf of at least four agencies in the Chicago area. Hawkins allegedly promoted the services of her home-health agency clients at churches and senior buildings, and received more than $180,000 in bribes and kickbacks from the agencies from 2010 to 2016. An indictment charges Hawkins, of Robbins, with one count of conspiracy to solicit and receive health care kickbacks, and six counts of soliciting and receiving health care kickbacks. She is scheduled to be arraigned today at 1:30 p.m. before U.S. Magistrate Judge Michael T. Mason. The case is being prosecuted by Trial Attorney Patrick Mott of the Justice Department’s Criminal Division Fraud Section.

The owner of a home health agency was also charged as part of the Chicago-area investigations. YURI LUDVINSKY, 55, of Chicago, was charged with three counts of violating the Anti-Kickback Statute, stemming from alleged kickback payments Ludvinsky made to a physician for referring patients to Ludvinsky’s agency. Arraignment in federal court in Chicago has not yet been scheduled. The case is being prosecuted by Assistant U.S. Attorney Nathalina Hudson.

The Medicare Fraud Strike Force operates in nine locations nationwide. Its operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force has charged more than 3,700 defendants who collectively have falsely billed the Medicare program for more than $14 billion.

The public is reminded that charges are merely allegations, and all defendants are presumed innocent until proven guilty.

ROCKFORD — A McHenry man was sentenced today by U.S. District Judge Frederick J. Kapala to 210 months in federal prison, to be followed by five years of supervised release, on child pornography charges. 

Following a four-day jury trial in federal court, MICHAEL L. CHAPARRO, 29, was found guilty on Feb. 2, 2018, of one count of transporting child pornography via the internet, and two counts of accessing child pornography that had crossed state lines, including an image of a prepubescent minor and a minor under 12 years of age, with intent to view the child pornography.

According to the indictment and the evidence at trial, on Aug. 7, 2014, Chaparro knowingly transported to Pennsylvania and Texas materials depicting one or more actual minors engaged in sexually explicit conduct.  In addition, evidence at trial indicated that Chaparro accessed a smart phone on Nov. 24, 2014, and computer hard drive on July 30, 2013, with intent to view child pornography, knowing that one or more persons depicted in an image involved a prepubescent minor or a minor who had not attained 12 years of age.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey Sallet, Special Agent-in-Charge of the Chicago office of Federal Bureau of Investigation; and Bill Prim, McHenry County Sheriff.  The Illinois Internet Crimes Against Children Task Force assisted in the investigation.

The government was represented by Assistant U.S. Attorneys Michael D. Love and Margaret J. Schneider.

CHICAGO — A financial advisor who told clients they were guaranteed to make money by investing with him has been indicted for allegedly defrauding those clients out of $4.7 million.

DARAYL DAVIS falsely represented to clients that they were guaranteed to receive annual interest payments of at least 6% if they invested with Davis’s two firms, Washington, D.C.-based Financial Assurance Corp. and Los Angeles, Calif.-based Affluent Advisory Group LLC, according to a superseding indictment returned Tuesday in U.S. District Court in Chicago.  Davis also claimed that his clients’ principal investments were protected against losses and that some of the purported investments were backed by a well-known multinational life insurance company, the superseding indictment states.  The charges describe how Davis defrauded some of his 22 victims by causing them to “roll over” their retirement savings into an account controlled by Davis.  In reality, Davis did not invest the funds as promised, and none of the purported investments offered by Davis through FAC and AAG had any affiliation with the life insurance company, the charges allege. 

Instead of investing his clients’ money, Davis spent the money for his own personal benefit, including $706,000 on credit card payments, $476,500 to rent a mansion in Los Angeles, $102,000 on airline tickets, $45,000 on car rentals, $42,500 on membership in an exclusive club, $42,000 on luxury hotels, and $25,000 on theater tickets, the indictment states.  Davis also used the investors’ funds to make Ponzi-type payments to newer investors to conceal the scam, the charges allege.  The alleged fraud scheme began in 2003 and continued until this year.

The indictment charges Davis, 45, of Bowie, Md., with six counts of money laundering, five counts of wire fraud, four counts of mail fraud, and one count of aggravated identity theft.  Arraignment is scheduled for June 28, 2018, at 9:30 a.m., before U.S. District Judge Robert W. Gettleman.

The superseding indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  Valuable assistance was provided by the U.S. Securities and Exchange Commission, which previously filed a civil complaint against Davis. 

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 wire fraud, mail fraud and money laundering is punishable by up to 20 years in prison, while aggravated identity theft carries a mandatory consecutive prison term of two years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Jennie H. Levin.

CHICAGO — The U.S. Attorney’s Office today announced a settlement agreement with two west suburban hospitals to ensure effective communication with deaf and hard-of-hearing patients, pursuant to the Americans with Disabilities Act.

The agreement requires the hospitals – Adventist La Grange Memorial Hospital and Adventist Hinsdale Hospital – to provide appropriate auxiliary aids and services, including qualified American Sign Language interpreters, to ensure effective communication with deaf and hard-of-hearing patients and their companions.  Per the terms of the agreement, the hospitals will provide mandatory training to their employees on how to address the needs of deaf and hard-of-hearing patients.  The hospitals will also designate at least one employee as an ADA administrator, who will coordinate immediate access to the proper services – free of charge to the patient.

The settlement amicably resolves a complaint filed with the Department of Justice by a deaf patient who alleged that personnel at the hospitals discriminated against him by failing to provide the proper services under the ADA.  The hospitals will pay $10,000 in damages to the complainant.  Although the United States and the complainant agreed not to institute a civil lawsuit, the United States may review compliance with the settlement at any time, and reserves the right to file suit if it believes any portion has been violated.

The settlement, which became effective Monday, was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois.  The United States is represented by Assistant U.S. Attorneys Sarah J. North and Patrick Johnson.  

The ADA prohibits public accommodations, including hospitals, from discriminating on the basis of disability in the full and equal enjoyment of their goods and services.  The complainant alleged that the hospitals failed, during two visits in 2015, to provide sign language interpretive services in a manner that ensured effective communication.  In both visits, the complainant said he requested an interpreter so he could fully communicate with medical personnel, but his requests were denied and the auxiliary aids and services that were provided did not ensure effective communication.

The agreement does not represent an admission of liability by the hospitals, which are part of Adventist Midwest Health, a system of health providers serving the western suburbs of Chicago and a component of Adventist Health Systems.  Adventist Midwest Health fully cooperated in the U.S. Attorney’s Office’s investigation of this matter.

To learn more about the ADA and other laws protecting the rights of the deaf and hard of hearing, log on to www.ada.gov or call the Justice Department's toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD).

CHICAGO — The owners of a suburban bulk-mailing company swindled the U.S. Postal Service out of at least $16 million by forging documents and secretly using an official date stamp to fraudulently authenticate payment of postage for than 80 million pieces of mail, according to criminal charges filed today by the U.S. Attorney’s Office in Chicago.

YOGESH PATEL and ARVIND LAKKAMSANI owned and operated Prodigy Mailing Services Inc., which was based in Bolingbrook and later in Woodridge.  Prodigy assembled bulk mailings from customers and provided the mailings – along with fraudulent payment and verification forms – to the Postal Service for delivery, without paying postage on those mailings.  According to the charges, Patel and Lakkamsani schemed with a third defendant, DAVID GARGANO, to fraudulently cause the Postal Service to deliver numerous bulk mailings without payment.  The trio forged a Postal Service clerk’s signature on the verification forms and secretly used an official Postal Service date stamp to make it falsely appear that the clerk had authenticated postage, the charges allege.

From 2010 to 2015, the defendants caused a loss to the Postal Service of at least $16 million, according to the charges.

A criminal information charges each of the three defendants – Patel, 58, of Orlando, Fla., Lakkamsani, 57, of Northbrook, Ill., and Gargano, 51, of Barrington, Ill. – with one count of mail fraud.  Arraignments in U.S. District Court in Chicago have not yet been scheduled.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and William Hedrick, Acting Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.

According to the charges, Gargano owned Illinois-based Direct Mail Resources Inc., which collected a fee to match customers seeking to make bulk mailings with companies who could perform those services, such as Prodigy.  Gargano referred two energy companies to Prodigy for bulk mailing services.  The two energy companies provided millions of dollars to the defendants to pay the postage for the companies’ bulk mailings.  Instead of using those funds to pay the postage, the defendants split the money amongst themselves and used it for their own benefit, the charges allege.

The information alleges that the defendants made the mailings but kept the postage money from the energy companies without paying postage to the Postal Service.  Patel and Lakkamsani fraudulently maintained a key to a Postal Service mail unit, which was located inside Prodigy’s facility, and used the key to secretly access an official date-stamp without the Postal Service’s knowledge or approval, the information states.  By forging the Postal clerk’s signature and fraudulently stamping the mailings, the defendants made it falsely appear that the verification forms – which identified the amount of postage paid for the bulk mailings – were authentic and that postage had been appropriately paid, the charges allege.

The public is reminded that an information 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.  Mail fraud is punishable by up to 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Jacqueline Stern.

ROCKFORD — A Rockford man was arrested Wednesday night on drug trafficking charges.

DEVONTE GORDON, 33, also known as "Slim," was indicted on June 19, 2018, and charged with one count of conspiracy to possess with intent to distribute a quantity of heroin and 500 grams or more of cocaine in Rockford between September and November 2017, as well as one count of possessing with intent to distribute 500 grams or more of cocaine in Rockford on Oct. 4, 2017. Gordon was arraigned today before U.S. Magistrate Judge Iain D. Johnston and pleaded not guilty. Gordon is scheduled to appear for a detention hearing on June 28, 2018, at 2:00 p.m.

TERVARIE T. LOTTIE, 30, of Rockford, also known as "Varie," "V," and "Ferrari," was also charged in the indictment with conspiracy to possess with intent to distribute a quantity of heroin and 500 grams or more of cocaine in Rockford between September and November 2017. Lottie was already in federal custody pending trial on other charges.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; Gary Caruana, Winnebago County Sheriff; and Dan O’Shea, Rockford Police Chief. The investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force, which includes the above agencies as well as the Loves Park and Freeport Police Departments.

Each count in the indictment carries a mandatory minimum penalty of five years in prison and a maximum penalty of up to 40 years in prison, followed by a period of supervised release of at least four years and up to life, and a fine of up to $5 million. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The government is represented by Assistant U.S. Attorney Talia Bucci.

CHICAGO — An Iranian businessman schemed with the owner of a European company to illegally export nuclear nonproliferation-controlled materials to Iran from Illinois, according to a newly unsealed federal indictment.

SAEED VALADBAIGI, also known as “Saeed Valad” and “Saeed Baigi,” plotted in 2011 to illegally export U.S.-origin 7075 T6 Aluminum tubing from Illinois to Iran by way of Belgium and Malaysia, the indictment states.  The size and type of the aluminum was used in the missile and aerospace industry and was subject to U.S. regulations for nuclear nonproliferation purposes, the indictment states.  Valadbaigi’s smuggling plan was part of an effort to evade U.S. laws and export-control regulations, according to the charges.

The eight-count indictment was returned in 2016 in U.S. District Court in Chicago and ordered unsealed Wednesday.  It charges Valadbaigi with three counts of wire fraud, two counts of attempting to violate the International Emergency Economic Powers Act, one count of conspiracy to defraud the United States, one count of illegally exporting articles from the United States, and one count of making false statements on a U.S. export form.

Valadbaigi, 56, of Iran, is considered a fugitive.  A warrant for his arrest was issued in 2016 and remains outstanding.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Dan Clutch, Special Agent-in-Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Chicago Field Office.  The government is represented by Assistant U.S. Attorney Rajnath Laud.

In addition to the 7075 Aluminum tubing, the newly unsealed indictment accuses Valadbaigi of illegally exporting titanium sheets from a company in northern Illinois, to Iran, by way of the Republic of Georgia, the United Arab Emirates and Malaysia.  At the time of that deal in 2009, Valadbaigi controlled various companies in all three of those countries, the indictment states.  The charges further allege that Valadbaigi in 2012 ordered acrylic sheets from a company in Connecticut, and falsely claimed that the sheets would be used only in Hong Kong.  He later allegedly arranged for the acrylic sheets to be transshipped to Iran.

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 wire fraud and attempting to violate the IEEPA carries a maximum sentence of 20 years in prison.  The illegal export charge is punishable by up to ten years in prison, while the conspiracy and false statement counts are each punishable by up to five years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The charges against Valadbaigi are part of an investigation that previously resulted in the conviction of NICHOLAS KAIGA, who managed and later owned the Belgium company that did business with Valadbaigi.  Kaiga admitted in a plea agreement that he knew the 7075 Aluminum was subject to U.S. export controls and that it could not be exported to Malaysia without a license from the U.S. Department of Commerce, which neither he nor Valadbaigi possessed.  Kaiga admitted that he nonetheless used his company, Industrial Metals and Commodities, as an intermediary to export the 7075 Aluminum tubing from a company in northern Illinois, to Belgium and then to Malaysia, on behalf of Valadbaigi.  Kaiga pleaded guilty to violating U.S. export-control regulations and was sentenced in 2015 to two years and three months in a U.S. prison.

ROCKFORD — A McHenry woman was indicted Tuesday by a federal grand jury for theft from the U.S. mail. 

JENNIFER L. DUNCAN, 51, a former U.S. Postal worker, was charged in a one-count indictment.  As alleged in the indictment, on Feb. 20, 2018, Duncan removed approximately $3,500 from mail addressed to an individual in Tennessee.

Mail theft carries a maximum potential penalty of up to five years in prison, a period of supervised release of up to three years following imprisonment, a fine of up to $250,000, and full restitution.  If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.  Duncan will be arraigned on a date yet to be determined in U.S. District Court in Rockford.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Scott Caspall, Special Agent-In-Charge of the Chicago Great Lakes Area Field Office of the U.S. Postal Service Office of Inspector General.

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

The government is represented by Assistant U.S. Attorney Michael D. Love.

CHICAGO — A Mexican national has been arrested for allegedly selling a kilogram of fentanyl to an undercover law enforcement agent near Midway Airport in Chicago.

JAVIER GONZALEZ-LOZA, 40, sold the fentanyl for $40,000 during a February 2018 meeting in an alley in the 5600 block of South Kilbourn Avenue in Chicago, according to a criminal complaint and affidavit filed in federal court.  Unbeknownst to Gonzalez-Loza, the purported buyer was an undercover law enforcement agent, the complaint states.

The complaint charges Gonzalez-Loza with one count of distribution of a controlled substance.  Gonzalez-Loza made an initial court appearance Wednesday before U.S. Magistrate Judge Daniel G. Martin, who ordered him to remain in federal custody.  A preliminary hearing was scheduled for June 27, 2018, at 2:00 p.m.

Gonzalez-Loza had been deported to Mexico from the United States in 2013 after a prior criminal conviction, but was residing in Chicago at the time of the alleged drug deal, according to the complaint.

The arrest and complaint were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  The government is represented by Assistant U.S. Attorney Philip Fluhr.

According to the complaint, a confidential source cooperating with law enforcement notified authorities about Gonzalez-Loza’s alleged drug dealing.  An undercover agent began communicating with Gonzalez-Loza, and some of their conversations were surreptitiously recorded.

In January 2018, Gonzalez-Loza provided the undercover officer with “sample” quantities of heroin and fentanyl, the complaint states.  The meetings at which Gonzalez-Loza supplied these samples occurred in a grocery store parking lot near West 59th Street and South Pulaski Road in Chicago, the complaint states.  After those meetings, the undercover agent and Gonzalez-Loza arranged for the larger deal the following month, at which Gonzalez-Loza distributed approximately 998.7 grams of fentanyl, as stated in the complaint.

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. 

The drug distribution charge is punishable by a mandatory minimum sentence of ten years in prison and a maximum sentence of life in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — More than 50 individuals, including an alleged Mexico-based drug trafficker and a Wisconsin-based courier, are facing criminal charges as part of a joint federal and state investigation into heroin and fentanyl sales in Chicago.

The investigation, dubbed “Operation Full Circle,” centered on drug sales on the city’s West Side, and resulted in the seizure of more than two kilograms of heroin, a kilogram of fentanyl, and 300 pounds of marijuana.  Authorities also seized 17 illegal firearms, including three rifles, and approximately $8,000 in narcotics proceeds.

One of the defendants offered to kidnap a man who allegedly owed a debt to Mexico-based narcotics traffickers in exchange for cash and drugs.  The defendant was arrested and a search of his vehicle revealed two firearms, steel chains and duct tape.  Two other defendants engaged in a handgun-for-heroin transaction in December of last year, according to the federal charges.

The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), in cooperation with the Chicago High Intensity Drug Trafficking Task Force (HIDTA).  OCDETF is a partnership between federal, state and local law enforcement agencies, whose principal mission is to identify, disrupt and dismantle the most serious drug trafficking organizations.

Criminal complaints and affidavits filed in U.S. District Court in Chicago charge seven defendants with various drug offenses, and two defendants with firearm offenses.  Several of the federal defendants were arrested Tuesday.  Detention hearings for some of the federal defendants will be held on June 22, 2018, before U.S. Magistrate Judge Daniel G. Martin. 

Forty-eight other defendants were charged in state complaints, and many of them were also arrested Tuesday.  They have begun making initial appearances in Cook County Criminal Court.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; Nicholas Roti, Director of HIDTA; Kimberly M. Foxx, Cook County State’s Attorney; Eddie Johnson, Superintendent of the Chicago Police Department; and Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  Substantial assistance was provided by HIDTA DEA Group 43, the U.S. Marshals Service, and the U.S. Postal Inspection Service in Chicago.  Assistant U.S. Attorneys John Mitchell and Grayson Walker are representing the government.

According to the federal complaints, KRZYSZTOF RAK, 60, operates a drug trafficking organization in Mexico, and works with CHRISTOPHER J. DOSS, 47, of Racine, Wisc., to distribute wholesale quantities of fentanyl to customers in the Chicago area.  DONALD HOLMES, SR., 56, of Chicago, and IVAN WALTON, 45, of Lynwood, participated in the organization by regularly distributing Rak’s narcotics in the Chicago area and collecting payment from customers, according to the charges.  The federal complaints describe a meeting earlier this year between Doss and Walton in a restaurant parking lot in south suburban Matteson.  During the meeting, Doss supplied Walton with more than 880 grams of fentanyl, the charges allege.  Law enforcement conducted surveillance of the transaction after securing court authorization to wiretap certain telephones.

In another narcotics transaction described in the federal complaints, NAKIA MCCLINIC, 43, of Chicago, attempted to deliver heroin and fentanyl to an individual who had received the drug order from DESHAWN MOORE, 24, of Bellwood.  Law enforcement was watching when McClinic arrived at the meeting in a parking lot near the University of Illinois at Chicago, the complaints state.  Officers attempted to pull over McClinic’s vehicle but he sped off, tossing the drugs out of the driver’s side window, the charges allege.  McClinic’s vehicle was successfully stopped a short while later, and the narcotics were recovered nearby.

The kidnapping plot involved TEKOA Q. TINCH, 30, of Bloomington, Ill., who allegedly agreed to carry out the kidnapping in exchange for drugs and a split of any money recovered from the victim.  Last month, Tinch met with an undercover law enforcement officer, who was posing as a representative of the Mexico-based group, in a grocery store parking lot in the Little Village neighborhood of Chicago, the complaints state.  During the meeting, Tinch accepted a sham kilogram of cocaine as a purported down payment on the kidnapping, the complaints state.  Tinch was then arrested and his car was searched, revealing the guns, duct tape and chains, the charges allege.

The public is reminded that a complaint contains only charges and is not evidence of guilt.  The defendants are presumed innocent and are 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 reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.

CHICAGO — A Chicago man has been sentenced to 28 years in federal prison for producing hundreds of photos and videos of child pornography.

CHRISTOPHER M. HALL, 44, arranged three sexual encounters for two underage girls whom he met through online mobile chat applications.  One of the girls was 12 years old when she first encountered Hall online, and he groomed her through sexually explicit communications that included sending her child pornography.  Hall directed each girl to write “Owned by CH” on her body, and then photograph it and send the image to Hall.

To set up the sexual encounters, Hall took or used sexually explicit photos of the girls and posted them in sex advertisements on Craigslist.  Hall then directed the girls to have sexual intercourse with him and several men who responded to the ads, and took videos and photos of the encounters.  Two of the encounters took place in Aurora, while another occurred in Gary, Ind.

Hall pleaded guilty earlier this year to one count of inducement and enticement of a minor for the production of child pornography and one count of knowingly transporting child pornography.  U.S. District Judge Thomas M. Durkin on Monday sentenced Hall to 28 years in federal prison.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

The investigation began when one of Hall’s victims went missing from her home in Michigan.  Law enforcement identified email communications between the girl and Hall.  As part of the investigation, law enforcement searched Hall’s residence and discovered a collection of child pornography that included more than 7,000 images and videos of minors.  Authorities were able to identify dozens of the exploited children in the videos and images, some of whom were less than 12 years old at the time the images were created.  Nearly 30 of those victims submitted statements to the Court in advance of sentencing, detailing the harm caused by the exploitation of their images by individuals like Hall.

ROCKFORD — A Loves Park man pleaded guilty Monday before U.S. District Judge Philip G. Reinhard to producing child pornography. 

GRANT WOJAHN, 37, admitted in his written plea agreement that he created a Facebook account and posed as a female teenager.  Wojahn admitted that on March 20, 2015, while using that profile, he contacted a minor female victim using the Facebook private messaging feature and persuaded and enticed the minor female victim to engage in sexually explicit conduct for the purposes of having the minor victim take photographs of the sexually explicit conduct and then having the minor victim transmit the images to Wojahn using the private messaging service on Facebook.  According to the plea agreement, the female victim was 13 years of age at the time the pictures were produced and transmitted.  Wojahn also admitted that between May 21, 2014, and April 5, 2015, he similarly persuaded six other minor female victims, who were between the ages of ten and 12, to do the same.

Wojahn also admitted that on March 25, 2015, he used the Facebook private messaging service to chat and send another user a number of images of child pornography depicting one of the minor victims.  Wojahn further admitted that on Sept. 1, 2015, he possessed numerous images of child pornography on a USB storage device, a cellphone, and other devices, and that he possessed at least 43 videos of child pornography and at least 71 images of child pornography.

Wojahn faces a maximum sentence of 30 years’ imprisonment, and a statutory mandatory minimum sentence of 15 years, and a term of supervised release of five years to life.  This offense also carries a maximum fine of $250,000.  

Sentencing for Wojahn is set for Sept. 26, 2018, at 9:00 a.m., in federal court in Rockford.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey Sallet, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.

The government is represented by Assistant U.S. Attorney Margaret J. Schneider.

CHICAGO — A claims specialist for the U.S. Social Security Administration has been indicted on federal fraud and identity theft charges for allegedly approving and pocketing at least $680,000 in fraudulent benefits.

ANNE AROSTE, also known as “Ann Aroste,” worked as a claims specialist at the SSA’s field office in Aurora.  Aroste was responsible for processing applications for Social Security benefits via the agency’s electronic records system.  According to the indictment, Aroste created fraudulent applications for benefits on the Social Security earnings records of deceased workers.  She then used her employee credentials to approve the applications and to route the payments to bank accounts she controlled, the indictment states.

From 2013 to last month, Aroste caused the U.S. Treasury Department to issue at least $680,962, in fraudulent payments, the indictment states.

The indictment charges Aroste, 42, of Montgomery, with five counts of wire fraud and five counts of aggravated identity theft.  She was arrested this morning and pleaded not guilty at an afternoon arraignment before U.S. Magistrate Judge Daniel G. Martin.  A detention hearing is set for June 13, 2018, at 11:00 a.m., before U.S. District Judge Manish S. Shah.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tracey Thanos, Special Agent-in-Charge of the Social Security Administration’s Office of Inspector General in Chicago; and Benjamin Sides, Special Agent-in-Charge of the U.S. Department of State, Diplomatic Security Service Chicago Field Office.

The indictment describes five instances in which Aroste allegedly caused an application for Social Security benefits to be submitted in the names of individuals whom Aroste falsely claimed had been married to deceased workers.  Aroste used her employee credentials to approve the fraudulent applications for survivor’s benefits based on the Social Security earnings of the deceased workers, the indictment states.  The Treasury then transmitted the benefit payments into Aroste’s bank accounts.

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 wire fraud is punishable by up to 20 years in prison, while each count of aggravated identity theft carries a mandatory, consecutive prison sentence of two years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Special Assistant U.S. Attorney Jared C. Jodrey.

CHICAGO — Attorney General Jeff Sessions and United States Attorney John R. Lausch, Jr., of the Northern District of Illinois, today announced that the district will receive additional resources to combat violent crime, enforce federal immigration laws and attack the opioid crisis.  The Northern District of Illinois will receive six Assistant U.S. Attorney positions to focus exclusively on those priorities.  Nationally, 311 new federal prosecutors will be assigned to districts throughout the country.

“Under President Trump’s strong leadership, the Department of Justice is going on offense against violent crime, illegal immigration, and the opioid crisis — and today we are sending in reinforcements,” said Attorney General Sessions.  “We have a saying in my office that a new federal prosecutor is ‘the coin of the realm.’  When we can eliminate wasteful spending, one of my first questions to my staff is if we can deploy more prosecutors to where they are needed.  I have personally worked to re-purpose existing funds to support this critical mission, and as a former federal prosecutor myself, my expectations could not be higher.  These exceptional and talented prosecutors are key leaders in our crime fighting partnership.  This addition of new Assistant U.S. Attorney positions represents the largest increase in decades.”

“We welcome the additional resources to reduce violent crime, enforce our country’s immigration laws and fight the opioid epidemic,” said U.S. Attorney Lausch.  “Our Assistant U.S. Attorneys work tirelessly to keep the citizens of northern Illinois safe, and these new positions will strengthen those efforts.  We will work quickly to fill these positions with highly skilled, highly motivated attorneys.”

Under the Attorney General’s allocation, four of the new Assistant U.S. Attorney positions in the Northern District of Illinois will focus exclusively on violent crime.  The other two positions will be assigned to the office’s Civil Division, focusing on immigration cases and affirmative civil enforcement actions, which seek to recover government money lost to fraud or to impose penalties for violations of federal laws.  Many of the new civil enforcement positions announced today will support the Department of Justice’s newly created Prescription Interdiction & Litigation Task Force, which targets the opioid crisis at every level of the distribution system.

CHICAGO — Two suburban Chicago residents have been charged with federal drug offenses for illegally selling fentanyl or fentanyl precursors over the internet, and authorities have seized their websites.

LIANGFU “LARRY” HUANG used his company, Ark Pharm Inc., to sell controlled substances – including a fentanyl precursor – over the internet, despite not registering with federal or state authorities, according to a criminal complaint and affidavit filed in federal court in Chicago.  Ark Pharm, which is based in Arlington Heights, Ill., offered various drugs for sale on its website (http://www.arkpharminc.com).  Huang, 53, of Northbrook, Ill., was arrested Wednesday night after arriving at O’Hare International Airport in Chicago on a flight from China.  He is charged with one count of conspiracy to knowingly and intentionally possess with intent to distribute, and to distribute, a controlled substance.

In a related case, WEI XU, also known as “Scarlett Hsu,” used her company, 1717 CheMall Corp., to illegally sell fentanyl and other controlled substances without registering with federal or state authorities, according to the complaint against her.  1717 CheMall Corp., which is based in Mundelein, Ill., offered various drugs for sale on its website (http://www.1717chem.com), including the opioids ocfentanil, oxycodone and hydrocodone, the complaint states.  Visitors to the website could search for a drug and order it from the site’s “estore,” the complaint states.  Xu, 52, of Vernon Hills, Ill., was arrested Wednesday.  She is charged with one count of knowingly distributing a controlled substance.

Also Wednesday, law enforcement agents carried out court-authorized searches of Ark Pharm’s and 1717 CheMall’s businesses and seized their websites.

The charges were announced by Attorney General Jeff Sessions; John R. Lausch, Jr., United States Attorney for the Northern District of Illinois;  Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.  Valuable assistance was provided by the U.S. Food and Drug Administration; U.S. Customs and Border Protection; Mundelein, Ill., Police Department; Arlington Heights, Ill., Police Department; Skokie, Ill., Police Department; Northern Illinois Police Alarm System (NIPAS); and Weapons of Mass Destruction Special Response Team North.

“Synthetic opioids killed 20,000 Americans in 2016--more than any other kind of drug," said Attorney General Sessions.  “The vast majority of these drugs originated in China and then either shipped through the mail or smuggled across our porous Southwest Border. Under President Trump's strong leadership, the Justice Department has taken historic new steps to target Chinese drug traffickers, and today's indictments are our next step.  I want to thank DEA, U.S. Attorney John Lausch, Assistant U.S. Attorney Devlin Su, our partners with CBP, IRS, and the FDA and especially our state and local law enforcement partners who helped make this possible. The Department of Justice will remain relentless in our efforts to keep these deadly drugs out of our country and finally put an end to this unprecedented drug epidemic.”

“The charges announced today are the result of an exhaustive and far-reaching investigation,” said U.S. Attorney Lausch.  “Whether it’s online or on the streets, our office is committed to aggressively stopping the flow of illegal drugs.”

“Powerful pharmaceutical medications, fentanyl and fentanyl-related substances are creating a chokehold on our society,” said Special Agent-in-Charge McKnight.  “Today’s enforcement actions send a clear message to those who utilize the internet to poison our communities:  We will find you and you will be held accountable.”

“There is no room in the Chicagoland area for the illegal selling of fentanyl and other pharmaceuticals,” said Special Agent-in-Charge Grchan.  “IRS Criminal Investigation is committed to using its resources and  financial expertise to partner with all law enforcement agencies in order to keep our communities safe from the illegal distribution and usages of these and other dangerous drugs.”

Huang and Xu appeared today before U.S. Magistrate Judge Mary M. Rowland, who ordered them to remain in federal custody.  A detention hearing is set for June 5, 2018, at 11:00 a.m.

According to the complaint, authorities at the U.S. border seized a dozen packages of crystal meth and other controlled substances that had been shipped from China to Ark Pharm’s headquarters.  The shipments purported to contain routine goods such as plastic toys.  From November 2016 to earlier this month, law enforcement surreptitiously corresponded with email accounts belonging to Ark Pharm, and conducted five undercover purchases of controlled substances from the company.  The drugs were shipped via FedEx, often with Huang’s name listed as the sender, the complaint states.

Authorities performed similar controlled purchases of narcotics at 1717 CheMall Corp. from August 2017 to earlier this month.  During the ordering process, agents corresponded via email and phone with Xu, who was using her “Scarlett Hsu” alias, according to the complaint.  The drugs from 1717 CheMall were shipped via FedEx, with Xu’s name listed as the sender, the charges allege.

The public is reminded that a complaint contains only charges and is not evidence of guilt.  The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  The charges against Huang and Xu each carry a maximum sentence of 20 years.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory United States Sentencing Guidelines.

Assistant U.S. Attorney Devlin N. Su represents the government.