Northern District of Illinois

CHICAGO — A Chicago police officer has been indicted on federal civil rights charges for allegedly using unreasonable force against two individuals while on duty.

MARCO PROANO, 41, of Chicago, is charged with two counts of deprivation of rights under color of law.  Proano is alleged to have used unreasonable force with a dangerous weapon while on duty as an officer of the Chicago Police Department on Dec. 22, 2013.  The victims suffered bodily injuries as a result of the unreasonable force, the indictment states.

The indictment was returned Thursday in federal court in Chicago.  A date for arraignment has not yet been set.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

“When a police officer uses unreasonable force, it has a harmful effect on not only the victims, but also the public, who lose faith and confidence in law enforcement,” Mr. Fardon said.  “Our Office will continue to independently and vigorously pursue civil rights prosecutions to hold officers accountable and strengthen trust in the police.”

Each count of the indictment is punishable by up to ten 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.  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. Attorneys Georgia Alexakis and Erika Csicsila.

Indictment

ROCKFORD — A Lake in the Hills, Ill. man appeared today before U.S. Magistrate Judge Iain D. Johnston on wire fraud charges.

SALVATORE CRIBARI, also known as “Sal Fradillio,” 59, was indicted on Sept. 13, 2016, by a federal grand jury in Rockford and charged with nine counts of wire fraud, in connection with a scheme to defraud "Company A," an operator of a nationwide chain of home improvement stores. Cribari was arrested on Sept. 15, 2016, in Algonquin, Ill. Cribari pleaded not guilty during his arraignment today before U.S. Magistrate Judge Iain D. Johnston, and he was ordered detained pending a hearing scheduled for Sept. 19, 2016 at 1:00 p.m.

According to the indictment, Cribari knowingly and intentionally stole merchandise from Company A stores located in the Northern District of Illinois. The indictment alleges that Cribari returned the stolen merchandise to Company A without receipts, and he falsely and fraudulently presented the stolen merchandise as legitimately having been purchased from Company A. Cribari received store credit in the form of Company A gift cards during those non-receipted returns. The indictment alleges that Cribari fraudulently obtained more than $340,000 in Company A gift cards as part of the scheme to defraud, and Cribari subsequently used those gift cards to purchase over $310,000 of merchandise and services from Company A. It is alleged that Cribari provided over 1,300 false Illinois driver’s license and state identification numbers to conduct non-receipted returns of stolen merchandise at Company A.

Wire fraud carries a maximum penalty of 20 years in prison, and a maximum fine of $250,000, or an alternate fine totaling twice the loss or twice the gain derived from the offense, whichever is greater.  The Court may also impose a sentence of probation of one to five years, a term of supervised release of up to three years, and restitution.  If Cribari is 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 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 indictment and arrest were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The Lake Zurich and Lake in the Hills Police Departments provided assistance in the investigation.

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

Indictment

ROCKFORD — The former Winnebago County Purchasing Director was sentenced in federal court today by U.S. District Court Judge Frederick J. Kapala for two counts of theft from a program receiving federal funds.  

SALLY A. CLAASSEN, 57, of Roscoe, Ill., was sentenced to two years in federal prison, to be followed by one year of supervised release, and was ordered to pay restitution of $440,369.83 to the Winnebago County Treasurer, and a fine of $5,000. 

Claassen pleaded guilty to the charges on June 1, 2016.  In the written plea agreement, Claassen admitted that as Purchasing Director for Winnebago County, Claassen was responsible for receiving and reviewing invoices submitted by vendors and submitting payment to vendors.  From Feb. 25, 2014 through April 27, 2015, Claassen used her position as the approver for payments from Winnebago County to vendors to steal approximately $368,137 from the County.  Claassen further admitted in the plea agreement that from April 15, 2014 to July 1, 2015, she used her Winnebago County-issued credit card and checks from Winnebago County to purchase items for her personal use, including home remodeling items and personal vacations. 

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Michael J. Anderson, 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 — The owner of a home health care company headquartered in Lemont admitted in federal court today that he paid illegal kickbacks to procure referrals of elderly patients on Medicare.

ROMY MACASAET JR. paid kickbacks to medical directors to obtain referrals of Medicare beneficiaries to his company, Home Bound Healthcare Inc., which was one of the largest home health care and hospice companies in Illinois.  Macasaet acknowledged in a plea agreement that he retained and paid Medical Directors a monthly fee solely for the purpose of obtaining patient referrals, and not for medical services.  Macasaet also acknowledged that he used Medical Director agreements as a way to conceal the payment of kickbacks.

Between approximately December 2006 and September 2014, Macasaet paid $789,327 in bribe payments to approximately 20 medical directors, according to the plea agreement.  As a result of the payments, Home Bound improperly sought and received Medicare reimbursements totaling several million dollars.

Macasaet, 47, of Homewood, pleaded guilty to one count of violating the Anti-Kickback Statute.  The conviction is punishable by up to five years in prison.  U.S. District Judge Samuel Der-Yeghiayan set sentencing for Feb. 15, 2017, at 10:30 a.m.

Macasaet and Home Bound also agreed to pay the United States $6.8 million to resolve civil false claim and anti-kickback allegations, per the terms of a settlement agreement announced today.  The agreement settles claims that Home Bound and its subsidiaries violated the federal False Claims Act and Anti-Kickback Statute by obtaining referrals through illegal kickbacks that served as financial inducements for false certifications of eligibility for home health services, and by improperly submitting those false claims to Medicare for reimbursement.

As part of the civil settlement, Macasaet agreed to immediately resign his employment with Home Bound and refrain from seeking future employment with the company.  Macasaet further agreed to divest his ownership interest in Home Bound within 120 days of formal entry of the agreement.  The settlement was reached by the Justice Department on behalf of the Office of the Inspector General of the U.S. Department of Health and Human Services.

Contemporaneous to the settlement agreement, Home Bound and the HHS Inspector General’s Office entered into a corporate integrity agreement to promote compliance with the directives of Medicare, Medicaid and other federal health care programs.  As part of the integrity agreement, Home Bound must establish a compliance program to develop and implement policies, procedures and practices designed to ensure compliance with the requirements of federal health care programs.

The plea agreement and civil settlement were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  Substantial investigative assistance was provided by the U.S. Department of Labor Office of Inspector General, and the Chicago Field Office of the U.S. Department of State Diplomatic Security Service.

The government is represented in the criminal case by Assistant U.S. Attorney Sunil Harjani, and in the civil case by Assistant U.S. Attorney David R. Lidow.

Plea Agreement

CHICAGO — A federal grand jury in Chicago has indicted a former Joliet police officer for using unreasonable force against an individual while on duty.

THOMAS O’CONNOR, 40, of Joliet, is charged with one count of deprivation of rights under color of law.  O’Conner is alleged to have used unreasonable force while on duty as an officer of the Joliet Police Department on Feb. 9, 2012.  The victim suffered bodily injury as a result of the unreasonable force, the indictment states.

The indictment was returned Tuesday in federal court in Chicago.  U.S. District Judge Charles P. Kocoras scheduled arraignment for Sept. 20, 2016, at 9:30 a.m.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The charge is punishable by up to ten 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.  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. Attorneys Kelly Greening and Christine M. O’Neill.

Indictment

CHICAGO — A federal grand jury in Chicago has indicted the self-appointed bishop of a Pennsylvania ministry for allegedly collecting bogus travel-agent fees from hotels where her church members worked as desk clerks.

The bishop, TRACIE DICKEY, instructed the church members on how to have the hotels pay reservation-commission fees to a purported travel agency operated by Dickey, according to the indictment.  From 2005 to 2013 the hotels paid approximately $130,000 in commissions to a bank account controlled by Dickey, even though her travel agency didn’t exist and couldn’t have booked the reservations on behalf of hotel guests, the indictment states.

It was further part of the scheme that Dickey emotionally and physically abused members of her faith-based organization, Deliverance Tabernacle Ministries, to coerce them into following its rules and remitting their earnings to Dickey or the church, according to the indictment.  Dickey’s tactics included starving and humiliating church members, and threatening that God would harm their family members if they didn’t comply, the indictment states. 

During the same eight-year period, Dickey collected $280,000 in wages earned at the hotels by four members of her ministry, according to the indictment.  At Dickey’s direction, the wages were directly deposited into Dickey’s personal bank account or one of the ministry accounts controlled by Dickey, the indictment states.

Dickey, also known as “Tracie Williams,” 48, of Pittsburgh, Pa., is charged with three counts of wire fraud and one count of labor trafficking.  The indictment seeks $410,000 in illegally derived proceeds.

Dickey has been in federal custody since her arrest in Dallas, Texas, in July.  She is scheduled to be arraigned in federal court in Chicago on Sept. 13, 2016, at 1:30 p.m., before U.S. District Judge Sara L. Ellis.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The U.S. Attorney’s Office in the Northern District of Texas provided assistance in the case.

The case was investigated by the Cook County Human Trafficking Task Force, a multi-disciplinary unit that brings together law enforcement and social service agencies to combat human trafficking.  More information about the Task Force can be found on its website: http://www.cookcountytaskforce.org/

Each count of the indictment 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 public is reminded that an indictment 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 Bethany Biesenthal.

Indictment

CHICAGO — An Indiana man was charged today with kidnapping for allegedly beating and sexually assaulting a woman he met online.

KEITH DEWITT DAVIS, 25, of South Bend, Ind., is charged with one count of kidnapping in connection with a sexual assault on June 27, 2016, in Calumet City, according to a criminal complaint filed in U.S. District Court in Chicago.  The complaint describes three other similar assaults or attempted assaults in Calumet City that occurred over the summer within four blocks of the June 27 attack.  Davis is suspected of committing all of them, the complaint states.

Davis was arrested last weekend on a state of Indiana warrant.  He was taken into federal custody this afternoon.  He is scheduled to make an initial appearance on the kidnapping charge at 3:00 p.m. today before U.S. Magistrate Judge M. David Weisman in Chicago.

According to the complaint, the four incidents took place in vacant or abandoned homes in the vicinity of Pulaski Road and Burnham Avenue in Calumet City.  Davis allegedly met the women online and arranged the meeting place.  He displayed a weapon in at least one of the episodes, the complaint states. 

The sexual assaults occurred on June 27, July 10 and Aug. 12, according to the complaint.  On July 2, a woman met Davis but was able to flee after noticing the house was vacant, the complaint states.  Davis grabbed her shirt and attempted to punch her, but she escaped on foot, according to the complaint.

The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation. 

The case was investigated by the Will County Safe Streets Task Force, which is comprised of officers from the Bolingbrook Police Department, Cook County Sheriff's Police Department, Evergreen Park Police Department, Joliet Police Department and Orland Park Police Department.  Substantial investigative assistance was provided by the Calumet City Police Department, Hazel Crest Police Department, Midlothian Police Department, South Bend, Ind., Police Department, and the St. Joseph County, Ind., Prosecutor’s Office.

Kidnapping carries a maximum sentence of life in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.  The public is reminded that a complaint 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 Katherine Welsh.

Complaint

ROCKFORD — A Cary, Ill. man was sentenced Wednesday in federal court by U.S. District Judge Frederick J. Kapala for the robberies of the Fifth Third Bank branch located at 265 West Virginia, Crystal Lake, Illinois, on March 30, 2015, and the Fifth Third Bank branch located 1745 South Eastwood Drive, Woodstock, Ill., on April 15, 2015. 

MICHAEL L. FETERICK, 46, was sentenced to 49 months in federal prison, to be followed by 3 years of supervised release, and was ordered to pay restitution of $7,062.  Feterick, who pleaded guilty on May 25, 2016, admitted that when he entered each bank he presented a note stating, “Money, no dye pack,” to a bank teller.  Both tellers provided Feterick with money from the tellers’ drawers and Feterick then left the banks.  Feterick was arrested on April 15, 2015, by the FBI and officers of the Crystal Lake and Woodstock Police Departments, at a hotel in Algonquin, Ill.  Feterick has remained in federal custody since his arrest. 

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; John L. Lieb, Chief of the Woodstock, Illinois Police Department; and James R. Black, Chief of the Crystal Lake, Illinois Police Department.  The U.S. Marshals Service, and law enforcement officers of the McHenry County Sheriff’s Department and the Algonquin, Illinois Police Department assisted in the investigation.

The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.

CHICAGO — Assistant U.S. Attorney Julie B. Porter, who supervised child exploitation investigations and prosecuted significant corporate fraud and public corruption cases, will depart the U.S. Attorney’s Office after 12 years of public service, Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced today.

Ms. Porter was a member of the prosecution team in the corporate fraud trial of Conrad Black and other executives of Hollinger International, once one of the world's largest media empires.  She participated in public corruption cases involving the city of Chicago’s hired truck program, as well as the federal investigation known as “Operation Board Games,” which led to the conviction of former Illinois Gov. Rod Blagojevich.

“Julie Porter has served the citizens of the Northern District of Illinois and the United States with tremendous distinction,” said Mr. Fardon.  “She has been a dynamic leader in our Office, mentoring new prosecutors and lending valuable insight and advice.  I want to thank Julie for her service, and I look forward to all that she will accomplish in the future.”

Ms. Porter joined the Office in 2004.  She most recently served as Chief of the Criminal Division, overseeing nearly 150 prosecutors.  Prior to that appointment, she was Chief of the office’s Financial Fraud Section and coordinator of the district’s Project Safe Childhood program. 

After her final day in the Office on Wednesday, Ms. Porter will open a private law practice in Chicago.

Mr. Fardon also announced today that Assistant U.S. Attorney Brian Hayes has been promoted to succeed Ms. Porter as Chief of the Criminal Division.  Mr. Hayes, a former Special Agent with the Federal Bureau of Investigation, has held various leadership positions within the Office, most recently serving as Chief of the General Crimes Section.  Since joining the Office in 2003, he has prosecuted cases involving violent crimes, financial fraud, narcotics, tax violations and other major offenses.  He recently participated in the prosecution of Toby Jones and Kelsey Jones, Chicago brothers who conspired to murder a federal informant.  Toby Jones was sentenced earlier this year to 40 years in prison.  Kelsey Jones is awaiting sentencing.

“Brian Hayes is an experienced and skilled prosecutor,” said Mr. Fardon.  “He is the perfect fit to oversee our Criminal Division at such an important time in our district.”

Mr. Hayes’ first day as Chief of the Criminal Division will be Thursday.

CHICAGO — A federal judge sentenced a Wilmette financial advisor to more than six years in prison for pocketing nearly $2 million of his clients’ money after falsely promising substantial returns on investments in Facebook stock and real estate funds.

ALAN H. GOLD, 61, obtained money from more than a dozen investors by falsely representing that their assets would be invested in high-yield stocks, real estate funds, futures contracts and other investment products.  Unbeknownst to the clients, Gold never actually invested their money.  Instead, he used the funds to gamble at local casinos and to cover his own personal expenses. 

Gold concealed the scheme for more than seven years by providing clients with phony account statements and fake stock certificates.  Many of Gold’s victims are retirees, and several of them spoke at his sentencing hearing about their financial losses.

Gold pleaded guilty in January to five counts of wire fraud.  U.S. District Judge Elaine E. Bucklo imposed the 75-month sentence Wednesday afternoon in federal court in Chicago.  Judge Bucklo also ordered Gold to pay restitution of more than $1.8 million.

“Alan Gold betrayed the trust of his clients – people who considered him a friend and adviser,” Assistant U.S. Attorney Sunil R. Harjani argued in the government’s sentencing memorandum.  “It is important that the investment adviser community know that a term of imprisonment awaits them if they lie and steal from their clients.”

Gold’s fraud scheme began in approximately January 2008 and continued until his arrest in June 2015.  The phony account statements bore the name of Gold’s company, Alan Gold & Associates, which Gold operated out of his residence in Wilmette.  The account statements falsely represented that the clients’ funds were invested in such securities as Facebook stock, real estate funds and various alternative investments.  When clients questioned the performance of the investments, Gold falsely represented that they were exceeding expectations.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation.  The Chicago office of the U.S. Securities & Exchange Commission, the Arlington Heights Police Department, and the Norridge Police Department assisted with the investigation.

The government is represented by Mr. Harjani.

CHICAGO — A former Winnetka resident who operated an illegal gambling enterprise before fleeing to the Middle East was sentenced today to more than four years in federal prison for failing to pay taxes on at least $2.5 million in unlawful earnings.

ALBER NAJJAR, also known as Alber Yakoub, failed to pay taxes on income he earned from a gambling operation in Illinois and Indiana from 1997 to 2001.  Najjar filed an individual federal tax return for each of those years, but he failed to report the income he earned from the gambling business.

Najjar, 62, pleaded guilty earlier this year to two counts of filing a false tax return.  In addition to the 57-month prison term, U.S. District Judge Ronald A. Guzman fined Najjar $5,000 and ordered him to pay back taxes to both the Unites States and the state of Illinois.

“Taxes are how governments pay for needed services,” Assistant U.S. Attorney Patrick King argued in the government’s sentencing memorandum.  “Evasion robs governments and the people they serve of needed revenue.”

Shortly before being indicted in April 2004, Najjar fled to Lebanon and was considered a fugitive for more than eleven years.  During that time, Najjar used a Syrian passport – issued in the name of Alber Yakoub – to travel to Europe, Asia and other parts of the Middle East.  He was arrested in November 2015 on the island of Cyprus and extradited to the United States shortly thereafter.

Najjar, who resided in Winnetka prior to fleeing the country, generated large sums from his illegal bookmaking business, and utilized the services of offshore accounts to transact his business.  He concealed from his accountant both the gambling enterprise and the income he earned from it.  Najjar’s illegal conduct resulted in a total state and federal tax loss of more than $1.07 million.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.  The officials praised the efforts of the U.S. Marshals Service and the U.S. Department of State Diplomatic Security Service, which were instrumental in securing Najjar’s arrest and extradition.

CHICAGO — A federal jury has convicted the head of a Homewood telemarketing company of pocketing illegal kickbacks in exchange for referring patients to home health care agencies.

As the owner of Serenity Marketing Inc., which did business as Serenity Living, SUNDAE WILLIAMS used unsolicited phone calls to recruit patients, including Medicare beneficiaries, for home health care services.  Williams then referred those patients to several Chicago-area nursing agencies in exchange for payments on a per-patient basis.

After a five-day trial in federal court in Chicago, the jury on Tuesday convicted Williams, 47, of South Holland, on one count of conspiracy to solicit and receive remuneration in return for the referral of Medicare patients, and six counts of soliciting and receiving remuneration in return for the referral of Medicare patients.  Each count is punishable by up to five years in prison.

Williams is the latest defendant convicted in the federal investigation.  The prior convictions include JAMES ADEMIJU, a nurse from Matteson who operated two suburban nursing agencies; Dr. ALAN NEWMAN, one of the doctors at Suburban Home Physicians, which did business as Doctor at Home; and DIANA JOCELYN GUMILA, a nurse and manager of Suburban Home Physicians.

The investigation is being carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team, a joint initiative between the U.S. Justice Department and the U.S. Department of Health and Human Services to prevent fraud and to enforce anti-fraud laws around the country.  Dozens of defendants have been charged in numerous fraud cases since the strike force began operating in Chicago in 2011.

Evidence at Williams’ trial revealed that Serenity employees were trained to cold-call Medicare beneficiaries and convince them to accept home health services.  If a Medicare beneficiary expressed interest, Serenity employees obtained the beneficiary’s personal information, including their Medicare number, and provided it to certain home health agencies that had agreed to pay Serenity for such referrals.

Ademiju pleaded guilty earlier this year to billing for unnecessary services and making illegal payments for patient referrals.  He testified at Williams’ trial that some of his illegal payments were made to Serenity.  Ademiju also admitted in his plea agreement that he sent some of the patients he had illegally obtained from Serenity to home-physician companies, including Suburban Home Physicians, based on his belief that physicians at those companies would order home health services even if the patients did not qualify for them.  Ademiju is awaiting sentencing.

Dr. Newman pleaded guilty earlier this year to falsely certifying patients for nursing services even when he knew that patients did not qualify for such care.  He admitted causing approximately $2.6 million in losses to Medicare.  Newman is awaiting sentencing.

Gumila, who was convicted after a jury trial in April, directed employees to provide in-home services to patients she knew were not in need of it, and to certify patients for home-health services even when the patients did not qualify for it.  Gumila directed her employees to bill the treatment at the most complicated levels, thus inflating the costs incurred by Medicare, even though the visits were typically routine and did not qualify for the elevated billing.  Gumila was sentenced last month to six years in prison.

Williams’ conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Kristie Osswald, Special Agent-in-Charge of the Chicago Office of the Railroad Retirement Board Office of the Inspector General.  

The government is represented in the Williams case by Assistant U.S. Attorneys Stephen Chahn Lee and Cornelius Vandenberg.

CHICAGO — A federal grand jury in Chicago has indicted a Naperville man on child pornography charges for allegedly recording minor boys having sexual acts performed on them.

DOUGLAS A. WILLIS, 53, is charged with one count of conspiracy to produce child pornography, and one count of producing child pornography.  He pleaded not guilty today during an arraignment before U.S. Magistrate Judge Mary M. Rowland in Chicago.

According to the indictment, Willis and an unindicted co-conspirator agreed that the co-conspirator would recruit boys under the age of 18 to engage in sex acts and pose for nude photos and videos in exchange for money.  The co-conspirator, who is identified in the indictment as Individual A, brought the boys to Willis’ residence, where the boys were given controlled substances and alcohol to gain their compliance and reduce their inhibitions, the indictment states. 

Willis took photographs and videos of the boys displaying their genitals and having sex acts performed on them by Individual A, according to the indictment.  On occasion, Individual A took photographs and videos of the boys having sex acts performed on them by Willis, the indictment states.

Willis paid the boys, and Individual A kept copies of the recordings, according to the indictment.

The conduct charged in the indictment began in September 1993 and continued until at least August 2001.  Federal authorities pursued the charges after recently discovering evidence in the case.

The indictment was announced by Zachary T. Fardon, 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; and Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration.

Each count of the indictment carries a minimum prison sentence of ten years, and a maximum of 20 years.  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.  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 April M. Perry.

If you believe you were a victim of sexual exploitation in this case, you are encouraged to call Homeland Security Investigations’ Chicago Child Exploitation Tip Line at (630) 574-2700.

Indictment

CHICAGO — The former assistant transportation commissioner for the city of Chicago was sentenced today to ten years in federal prison for his role in a corruption scheme involving the city’s red-light camera contracts.

A jury in January convicted JOHN BILLS, 55, of Chicago, on all counts against him.  The conviction included nine counts of mail fraud, three counts of wire fraud, one count of extortion under color of official right, one count of conspiracy to commit bribery, three counts of bribery, and three counts of filing false tax returns.

In addition to the 120-month prison sentence, U.S. District Judge Virginia M. Kendall also ordered restitution in the amount of $2,032,959.50.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Joseph M. Ferguson, Inspector General for the City of Chicago; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

In 2003, as an assistant transportation commissioner, Bills was a voting member of the city’s Request for Proposal (RFP) evaluation committee, which sought vendors under the city’s Digital Automated Red Light Enforcement Program.  In May 2003, the committee recommended awarding contracts to Phoenix-based Redflex Traffic Systems Inc., to install cameras that automatically record and ticket drivers who run red lights.  Evidence at trial revealed that from approximately 2003 to 2011, Bills used his influence to expand Redflex’s business with the city, resulting in millions of dollars in contracts for the installation of hundreds of red-light cameras.  In exchange for his efforts, Redflex provided Bills with cash and personal benefits, including meals, golf outings, rental cars, airline tickets, hotel rooms and other entertainment.

Some of the benefits were given directly to Bills, while hundreds of thousands of dollars in cash was funneled to him through a friend, MARTIN O’MALLEY.  Redflex hired O’Malley as a contractor and paid him lavish bonuses as new cameras were added in Chicago.  O’Malley testified at trial that he often stuffed the bonus money into envelopes and gave it to Bills during meals in Chicago restaurants.  In addition, O’Malley testified that he used some of the bonus money paid to him by Redflex to purchase and pay all expenses for a condo in Arizona that Bills used as his own.  O’Malley, of Worth, pleaded guilty in December 2014 to one count of conspiracy to commit bribery.  He is scheduled to be sentenced by Judge Kendall on Sept. 12, 2016.

After KAREN FINLEY became CEO of Redflex, O’Malley’s commissions escalated and Bills assisted Redflex in being awarded a “sole-source” contract for additional cameras.  The sole source contract was rescinded when a competitor complained.  As the city began the process of issuing a second RFP in 2007, Bills, in his capacity as a non-voting, advisory member of the 2007 evaluation committee, assisted in ensuring that the RFP favored Redflex.  Finley, of Cave Creek, Ariz., pleaded guilty last year to one count of conspiracy to commit bribery.  She is scheduled to be sentenced by Judge Kendall on Nov. 10, 2016.

The government is represented by Mr. Fardon and Assistant U.S. Attorneys Laurie J. Barsella and Timothy Storino.

CHICAGO — A Chicago man was charged with a federal weapons violation for allegedly selling handguns and ammunition out of his home in the North Lawndale neighborhood.

JYMIL CAMPBELL, 29, sold three pistols, five magazines and ammunition out of his home in the 2100 block of South Millard Avenue, according to a criminal complaint filed in U.S. District Court in Chicago.  One of the magazines was an extended-capacity magazine, the complaint states.  Unbeknownst to Campbell, the buyer was working as a confidential informant for the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, and had surreptitiously videotaped the transactions, according to the complaint.

Campbell was arrested yesterday in Chicago.  The complaint charges him with one count of dealing firearms without a license.  U.S. Magistrate Judge Mary M. Rowland ordered him detained during an initial appearance this morning in federal court.  A detention hearing is scheduled for Aug. 30, 2016, at 10:30 a.m.

The complaint states that two of the alleged gun sales were held in March, while a third sale was completed in May.  Per Campbell’s instructions, the informant paid a total of $2,300 for the weapons, the complaint states.

The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Jeffery Magee, Special Agent in Charge of the Chicago Field Division of the ATF.

The charge of dealing firearms without a license carries a maximum sentence of five years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The public is reminded that a complaint 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 Devlin N. Su.

Complaint

CHICAGO — The leader of a drug trafficking organization was sentenced today to eight years in prison for distributing more than 1,000 kilograms of marijuana and laundering the proceeds through luxury auto purchases and high-end property leases.

JONATHAN TANKSON, 32, of Evanston, coordinated bulk shipments of marijuana from large-scale growers in California.  Between December 2010 and December 2013, Tankson flew to California at least twice per month, typically bringing with him on the plane $400,000 to $500,000 in cash.  He often purchased 100 to 200 pounds of marijuana at a time, with the drugs being shipped on vans and tractor trailers to stash houses in Chicago.  One of the stash houses was located in the Lincoln Park neighborhood of Chicago, while another was set up in a penthouse apartment in the city’s River West neighborhood.

Tankson pleaded guilty in June to one count of conspiracy to possess a controlled substance with the intent to deliver, and one count of conspiracy to commit money laundering.  U.S. District Judge Matthew F. Kennelly imposed the 96-month sentence in federal court in Chicago.

“The seriousness of defendant’s drug trafficking and money laundering crimes cannot be overstated,” Assistant U.S. Attorney Kartik K. Raman argued in the government’s sentencing memorandum.  “For several years, defendant plagued the community by directly purchasing wholesale quantities of marijuana from growers in California, in order to sell the drug on the streets for profit.”

According to a written plea agreement, Tankson used drug proceeds to purchase several luxury automobiles through straw purchasers.  Between June 2011 and December 2013, Tankson orchestrated the purchases of a Porsche Cayenne sport utility vehicle for $140,000, a Mercedes-Benz S63 sedan for $108,000, of which $75,000 was paid in cash after trading in another Mercedes, an Audi A8 sedan for $80,000, and several other expensive vehicles.  Tankson acknowledged in the plea agreement that the auto transactions were intended to conceal the source of the drug proceeds.

Tankson was arrested in December 2013.  During a search of his Lincoln Park stash house, law enforcement discovered more than $1 million in cash, approximately 75 kilograms of cannabis stuffed into numerous plastic bags, five suitcases filled with cannabis, 20 rounds of 9mm ammunition, and two 9mm pistol magazines, according to a criminal complaint filed in the case. 

Investigators thereafter began an extensive money laundering investigation that led to the convictions of two Chicago residents.  SONGHANE TRAORE orchestrated the straw purchases of Tankson’s vehicles, while JEROME B. MARSHALL helped Tankson fraudulently lease the Lincoln Park home.  Judge Kennelly will sentence Traore on Sept. 8, 2016, and Marshall on Sept. 15, 2016.

Tankson’s sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery Magee, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division; and Eddie T. Johnson, Chicago Police Superintendent.

The government is represented by Mr. Raman.

ROCKFORD — A Belvidere man was found guilty today of firearm charges following a four-day jury trial in federal court in Rockford. 

MICHAEL TAPIA, 25, of Belvidere, Ill., was found guilty of one count of conspiring to receive, possess, conceal, store, sell, and dispose of stolen firearms or ammunition; one count of receiving, possessing, concealing, and storing stolen firearms and ammunition; and one count of illegally possessing firearms and ammunition as a convicted felon.  Three other area men who were also charged in the case previously pleaded guilty to firearm charges: TIOVANNI CUNNINGHAM, 31, of Rockford, Ill., MICHAEL SCHAFFER, 33, and DARRELL REED, 28, of Byron, Ill.

According to the indictment and evidence at trial, on Dec. 31, 2012, Tapia and Cunningham broke into a residence in northern Illinois and stole over 21 firearms and ammunition from the residence.  Tapia and Cunningham later transferred some of the concealed stolen firearms to their co-defendants and stored some of the firearms at other locations. 

Cunningham pleaded guilty on May 31, 2016, to conspiring to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition; receiving, possessing, concealing, and storing stolen firearms and ammunition; and illegally possessing firearms and ammunition as a felon.  Schaffer pleaded guilty on June 3, 2016, to conspiring to receive, possess, conceal, store, sell, and dispose of stolen firearms and ammunition.  Reed pleaded guilty on June 15, 2016, to receiving, possessing, concealing, storing, selling, and disposing of stolen firearms.

Conspiracy carries a maximum sentence of 5 years’ imprisonment; receiving stolen firearms and ammunition carries a maximum sentence of 10 years imprisonment; and illegally possessing firearms and ammunition as a convicted felon carries a maximum sentence of 10 years’ imprisonment.  Each charge also carries up to 3 years of supervised release following imprisonment, a fine of up to $250,000 and restitution.  The court must impose a reasonable sentence guided by the advisory United States Sentencing Guidelines.

Sentencing is scheduled for Tapia on Dec. 14, 2016, at 9:00 a.m.; for Cunningham on Sept. 20, 2016, at 10:00 a.m.; for Schaffer on Oct. 11, 2016, at 9:00 a.m.; and for Reed on Oct. 14, 2016, at 9:30 a.m.

The conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Jeffery A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives.  The Federal Bureau of Investigation, Winnebago County Sheriff’s Department, Rockton Police Department and Rockford Police Department assisted in the investigation.

The government was represented by Assistant U.S. Attorneys Talia Bucci and Michael D. Love.

CHICAGO — A southern California commodities trader pleaded guilty in federal court in Chicago today to pocketing a portion of his clients’ money after falsely promising a 200% return on investment.

DAVID BRYANT admitted in a plea agreement that he obtained money from investors by falsely representing that his California-based company, the Bryant Family Investment Fund LLC, had successfully generated profits of more than 200% a year.  In fact, the fund had performed no trading in its name, and the trading that Bryant did in his personal accounts – using client funds –resulted in large losses.

Bryant, 63, of Palos Verdes Estates, Calif., admitted fraudulently obtaining approximately $5.1 million from investors and a financial institution, and causing a loss to investors and others of approximately $3.6 million.  Some of Bryant’s personal accounts were located in Chicago.

Bryant pleaded guilty to one count of wire fraud.  The conviction carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.  U.S. District Judge Matthew F. Kennelly scheduled a sentencing hearing for Jan. 18, 2017, at 1:30 p.m.

According to the plea agreement, Bryant attempted to make the scam appear legitimate by providing the victims with fraudulent documents that he created, including fictitious trading records and account statements that purported to reflect the clients’ growing investment proceeds.  He further concealed the scheme by making Ponzi-type payments to other investors.  Some of the money for the Ponzi payments came from a bank loan that Bryant fraudulently obtained by forging his mother’s signature on a property deed and using it as collateral for the loan, according to the plea agreement.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation.  The U.S. Commodity Futures Trading Commission, which filed a civil complaint against Bryant, assisted in the investigation.

A Court order entered in May in the civil suit required Bryant to pay a $3 million civil monetary penalty and more than $3.08 million in restitution.  The order also imposed permanent trading and registration bans on Bryant, and prohibited him from committing further violations of the anti-fraud and registration provisions of the Commodity Exchange Act.

The government is represented in the criminal case by Assistant U.S. Attorney Jacqueline Stern.

Plea Agreement

CHICAGO — A federal judge sentenced an Oak Brook doctor to two years in prison for illegally receiving benefits in exchange for referring elderly patients to Sacred Heart Hospital on Chicago’s West Side.

DR. VENKATESWARA R. “V.R.” KUCHIPUDI was convicted in March on one count of conspiracy to defraud the United States, and nine counts of illegally soliciting or receiving benefits in return for referrals of patients covered under a federal health care program.

U.S. District Judge Matthew F. Kennelly imposed the sentence Friday in federal court in Chicago.

“Medical professionals of every kind must know that patient need should be the only factor influencing decisions concerning patient care,” Assistant U.S. Attorney Joel M. Hammerman argued in the government’s sentencing memorandum.  “Patients are not commodities to be bartered or monetized.”

Dr. Kuchipudi, 69, was one of ten defendants convicted in the multi-year investigation of the now-shuttered hospital at 3240 W. Franklin Blvd. in Chicago.  From 2001 through April 2013, Sacred Heart executives conspired to pay kickbacks and bribes to physicians to induce them to refer patients for services that would be reimbursed by Medicare and Medicaid.  The scheme earned Sacred Heart millions of dollars in reimbursements from Medicare and Medicaid.

The prior convictions include EDWARD NOVAK, the hospital’s owner and chief executive officer; ROY PAYAWAL, the chief financial officer; CLARENCE NAGELVOORT and ANTHONY J. PUORRO, chief operating officers; and four other physicians.  Sacred Heart closed in 2013 in the aftermath of a federal law enforcement search of the hospital and the arrests of principal executives and Dr. Kuchipudi.

The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team, a joint initiative between the U.S. Justice Department and the U.S. Department of Health and Human Services to prevent fraud and to enforce anti-fraud laws around the country.  Dozens of defendants have been charged in numerous fraud cases since the strike force began operating in Chicago in 2011.

Evidence at Dr. Kuchipudi’s five-week trial revealed that he was one of Sacred Heart’s most prolific sources of patient referrals.  In exchange for his referrals, Sacred Heart provided Dr. Kuchipudi with free labor in the form of a physician, physician assistants and nurse practitioners.  The free labor was provided not only inside Sacred Heart but also in Chicago-area nursing homes where many of Dr. Kuchipudi’s patients resided.  Sacred Heart allowed Dr. Kuchipudi to bill Medicare and Medicaid for the services of the physician assistants and nurse practitioners as if he employed them himself.

The conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The government is represented by Mr. Hammerman and Assistant U.S. Attorneys Diane MacArthur, Kelly Greening and Brian Wallach.

WASHINGTON – The Justice Department filed a complaint today alleging that United Airlines Inc. violated the employment rights of U.S. Air Force Reservist Lieutenant Colonel Daniel Fandrei under the Uniformed Services Employment and Reemployment Rights Act (USERRA). 

According to the complaint, United violated USERRA by denying Fandrei employment benefits during his military leave that it grants to other employees for similar types of leave.  Specifically, the complaint alleges that United failed to credit Fandrei with sick leave for his active duty deployment in 2012 and 2013.  During that time, Fandrei was mobilized as a KC-10 pilot in Southwest Asia.  Fandrei served his country as part of the Air Force from 1990 until 2016.

“Individuals who serve bravely in our armed forces should be treated fairly by their employers while they are actively deployed,” said Principal Deputy Associate Attorney General Bill Baer.  “Through the department’s newly-created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and continue using every tool at our disposal to protect the rights of the men and women who serve in our armed forces.”

“USERRA ensures that servicemembers like Lt. Col. Fandrei who answer our nation’s call to duty don’t return to civilian life and find their employment benefits denied and their civil rights violated,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “The Department of Justice will continue to vigorously enforce the law to safeguard the rights of those who defend our country and protect our freedom.”

“Lt. Col. Fandrei has made many sacrifices to serve our nation honorably, including spending months away from his job and family,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.  “When our servicemembers are deployed in the service of our country, they are entitled to retain their civilian employment and benefits, and to the protections of federal law that prevent them from being subject to discrimination based upon their military obligations.” 

The lawsuit filed by the United States seeks damages equal to the amount of Fandrei’s lost benefits caused by United’s failure to comply with USERRA.  It also seeks an order requiring United to comply with all provisions of USERRA.

USERRA protects the rights of uniformed servicemembers to retain their civilian employment prior to, during and following absences due to military service obligations, and provides that servicemembers shall not be discriminated against because of their military obligations.  Under USERRA, the department has authority to represent a servicemember if the department is satisfied that the servicemember is entitled to the rights or benefits being sought.

Fandrei initially filed a complaint with the Department of Labor’s Veterans’ Employment and Training Service, which investigated this matter and, after resolution failed, referred it to the Justice Department’s Civil Rights Division.  This lawsuit followed as a collaborative initiative between the Civil Rights Division and the U.S. Attorney’s Office of the Northern District of Illinois.  The Justice Department has prioritized the enforcement of servicemembers’ rights under USERRA.  Additional information about USERRA can be found on the department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.

Complaint

The Justice Department filed a complaint today alleging that United Airlines Inc. violated the employment rights of U.S. Air Force Reservist Lieutenant Colonel Daniel Fandrei under the Uniformed Services Employment and Reemployment Rights Act (USERRA).

According to the complaint, United violated USERRA by denying Fandrei employment benefits during his military leave that it grants to other employees for similar types of leave.  Specifically, the complaint alleges that United failed to credit Fandrei with sick leave for his active duty deployment in 2012 and 2013.  During that time, Fandrei was mobilized as a KC-10 pilot in Southwest Asia.  Fandrei served his country as part of the Air Force from 1990 until 2016.

“Individuals who serve bravely in our armed forces should be treated fairly by their employers while they are actively deployed,” said Principal Deputy Associate Attorney General Bill Baer.  “Through the department’s newly-created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and continue using every tool at our disposal to protect the rights of the men and women who serve in our armed forces.”

“USERRA ensures that servicemembers like Lt. Col. Fandrei who answer our nation’s call to duty don’t return to civilian life and find their employment benefits denied and their civil rights violated,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “The Department of Justice will continue to vigorously enforce the law to safeguard the rights of those who defend our country and protect our freedom.”

“Lt. Col. Fandrei has made many sacrifices to serve our nation honorably, including spending months away from his job and family,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.  “When our servicemembers are deployed in the service of our country, they are entitled to retain their civilian employment and benefits, and to the protections of federal law that prevent them from being subject to discrimination based upon their military obligations.”

The lawsuit filed by the United States seeks damages equal to the amount of Fandrei’s lost benefits caused by United’s failure to comply with USERRA.  It also seeks an order requiring United to comply with all provisions of USERRA.

USERRA protects the rights of uniformed servicemembers to retain their civilian employment prior to, during and following absences due to military service obligations, and provides that servicemembers shall not be discriminated against because of their military obligations.  Under USERRA, the department has authority to represent a servicemember if the department is satisfied that the servicemember is entitled to the rights or benefits being sought.

Fandrei initially filed a complaint with the Department of Labor’s Veterans’ Employment and Training Service, which investigated this matter and, after resolution failed, referred it to the Justice Department’s Civil Rights Division.  This lawsuit followed as a collaborative initiative between the Civil Rights Division and the U.S. Attorney’s Office of the Northern District of Illinois.  The Justice Department has prioritized the enforcement of servicemembers’ rights under USERRA.  Additional information about USERRA can be found on the department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm. 

United Airlines Complaint

CHICAGO — A federal judge sentenced a Chicago man to eleven years in prison for robbing six stores and two banks on the city’s North Side.

BLAKE FISHER-BRUNER, 32, robbed the same bank twice, bringing his total number of robberies to nine.  Four of the heists occurred in the Wicker Park neighborhood.

Fisher-Bruner showed a gun to store employees or bank tellers in several of the robberies.  During the armed robbery of the Chicago Teacher store at 1855 N. Milwaukee Ave. in Chicago on May 27, 2014 – Fisher-Bruner ordered a cashier and a customer to the floor at gunpoint before stealing cash, a children’s book and a marker.  In another of the robberies – of North Community Bank at 1555 N. Damen Ave. in Chicago on June 23, 2014 – Fisher-Bruner threatened to shoot the tellers if they did not comply with his demands.  Fisher-Bruner was arrested by Chicago Police on July 6, 2014, while sitting in a vehicle with a loaded firearm in his pocket.

Fisher-Bruner pleaded guilty in March to three counts of bank robbery and one count of brandishing a firearm during a crime of violence.  U.S. District Judge John Z. Lee imposed the 132-month sentence Friday in federal court in Chicago.

“The defendant committed very serious, violent acts,” Assistant U.S. Attorney Christopher V. Parente argued in the government’s sentencing memorandum.  “Robberies of any kind, but especially armed robberies, are very serious crimes that terrorize the victims who are standing at the other end of the defendant’s firearm.”

According to his plea agreement, Fisher-Bruner served as a lookout in the first robbery while his girlfriend robbed the North Community Bank branch on April 18, 2014.  The girlfriend, NAKESHA SCOTT, 24, of Joliet, was previously convicted in the case.  Scott pleaded guilty to one count of bank robbery and was sentenced last year to 30 months in prison.

The other robberies committed by Fisher-Bruner include:

May 15, 2014: North Community Bank, 1600 W. Chicago Ave. in Chicago.

May 30, 2014: Ember Smoke Shop store, 2827 W. Belden Ave., in Chicago.

June 8, 2014: 7-Eleven store, 1658 N. Milwaukee Ave., in Chicago.

June 8, 2014: Egor’s Dungeon store, 900 W. Belmont Ave., in Chicago.

June 14, 2014: MS News store, 2445 N. Clark St., in Chicago.

 June 21, 2014: Dude I Forgot store, 1400 N. Milwaukee Ave., in Chicago

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The Chicago Police Department provided valuable assistance.

ROCKFORD — A Rockford resident pleaded guilty before U.S. District Judge Philip G. Reinhard today to embezzling from a labor organization. 

DAVID FLEURY, 49, pleaded guilty to an information charging him with embezzling more than $250,000 from Local 6 of the International Union of Bricklayers and Allied Craftworkers. 

According to the written plea agreement, between January 2011 and May 2015, Fleury was President of Local 6 and managed the daily operation of the union local.  Although paid a salary in the form of weekly electronic deposits into his bank account, Fleury admitted in the plea agreement that he caused an additional 153 salary checks and electronic deposits totaling $284,286 to be paid to him.  Fleury also admitted to making $6,132 in unauthorized purchases on Local 6’s credit card, embezzling $4,585 in cash dues paid by Local 6 members, and failing to turn over additional reimbursement amounts related to his use of Local 6’s credit card for travel expenses.  In the plea agreement, Fleury stated that he used the embezzled funds to pay for personal expenses, gambling at casinos, and vacations.  Fleury also admitted to approving and signing false reports with the United States Department of Labor.

Fleury faces a maximum sentence of five years’ imprisonment, a fine of up to $250,000, or twice the gross gain or gross loss resulting from the offense, whichever is greater, supervised release of up to three years, and probation of one to five years.  The judge must also order Fleury to pay full restitution to Local 6.  Sentencing for Fleury is set for Dec. 15, 2016, at 9:00 a.m.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Purcell, District Director of the Chicago office of the United States Department of Labor – Office of Labor-Management Standards.

The government is represented by Assistant U.S. Attorney John G. McKenzie.

Plea Agreement

The Justice Department announced today that HSBC Finance Corporation, as successor to HSBC Auto Finance Inc., has agreed to pay $434,500 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 75 cars owned by protected servicemembers without obtaining the necessary court orders.  The settlement is subject to approval by the U.S. District Court of the Northern District of Illinois.

During the investigation, the department learned that HSBC conducted repossessions without court orders even when it had evidence in its own records suggesting that a borrower could be a protected servicemember.  In one such case, HSBC continued with a repossession after learning that an initial attempt was unsuccessful because guards would not allow the “repo truck” to enter a “secured military post” in Indiana, where the car was located.

“HSBC repossessed cars without taking into account their owners’ ongoing service to our country,” said Principal Deputy Associate Attorney General Bill Baer.  “This settlement rights this wrong, compensates the affected servicemembers and honors our commitment to making sure military members are treated fairly at all times.”

“Servicemembers should never have to worry that they will lose their cars while they answer our nation’s call to duty,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “HSBC should have heeded these concerns before repossessing vehicles.  I commend the company for working cooperatively to reach an appropriate resolution once the department raised the issue.”

The settlement covers repossessions that occurred between 2008 and 2010.  HSBC Auto Finance Inc. originated and serviced car loans until 2010, when HSBC sold its car lending operations and assets to Santander Consumer USA Inc.  In February 2015, the department entered a settlement with Santander that provides servicemembers with more than $10.5 million in compensation for repossessions that violated the SCRA.  As part of the investigation of Santander’s repossession practices, the department learned that HSBC sold to Santander the right to collect debts owed by servicemembers after their cars had been repossessed by HSBC without court orders.

The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service.  It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service.  The court may delay the repossession or require the lender to refund prior payments before repossessing.  The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember.  By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, HSBC prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.

Most of the servicemembers compensated through this settlement received partial compensation through the settlement with Santander, and this agreement requires HSBC to pay $5,500 to each of these servicemembers.  HSBC must pay $11,000 to affected servicemembers who did not receive payments from the Santander settlement.  HSBC also must repair the credit of all affected servicemembers.  An independent settlement administrator will contact servicemembers to be compensated through this settlement in the upcoming months.  The independent administrator will locate victims and distribute payments at no cost to the servicemembers.

The department’s enforcement of the SCRA and other fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section.  Since 2010, the division has provided over $1.4 billion in monetary relief for individual borrowers and affected communities through its enforcement of the Fair Housing Act, the Equal Credit Opportunity Act and the SCRA.

The SCRA provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments.  For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov.  Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office.  Office locations may be found at legalassistance.law.af.mil/content/locator.php.

HSBC Complaint

HSBC Proposed Consent Order

ROCKFORD — Two men were indicted today by a federal grand jury in Rockford, Ill., on drug charges in related cases. 

GILBERTO VENEGAS-GARZA, 48, of Houston, Texas, was charged with one count of distributing cocaine on June 28, 2016. CONSTANCIO PALOMINO-CHAVEZ, 34, of Rockford, was charged with possessing cocaine with intent to distribute, also on June 28, 2016.

According to a criminal complaint, on June 28, 2016, Venegas-Garza drove a van from Bedford Park, Ill. to Rockford where he met with Palomino-Chavez.  They went to a residence on Newberg Road.  A short time later Venegas-Garza drove away.  Venegas-Garza was stopped for a traffic offense by Illinois State Police officers.  Inside the van officers discovered approximately $5,000 in U.S. currency and a hidden “trap” compartment, according to the complaint.  Officers searched the Newberg Road residence and found five kilograms of cocaine under the floorboards of a shed, according to the complaint.  Venegas-Garza and Palomino-Chavez were both arrested and have remained in custody since their arrest on June 28, 2016.   

Distribution of cocaine and possession with intent to distribute cocaine each carry a maximum penalty of up to 20 years in prison, at least three years of supervised release following imprisonment, and a fine of up to $1 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 is only a charge 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.

The indictments were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; and Leo P. Schmitz, Director of the Illinois State Police.

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

Palomino-Chavez Indictment

Venegas-Garza Indictment

CHICAGO — A Naperville man admitted in federal court today that he willingly failed to disclose his prior membership in the Chinese Communist Party when seeking naturalized citizenship in the United States.

LU LIN, 59, pleaded guilty to one count of making a false statement to an immigration officer.  The conviction is punishable by up to five years in prison and a fine of up to $250,000.

U.S. District Judge Edmond E. Chang scheduled a sentencing hearing for Nov. 9, 2016, at 10:00 a.m.

According to the plea agreement, Lin is a citizen of the People’s Republic of China who reported on his application for naturalized United States citizenship that he had never used other names and had never been a member of the Chinese Communist Party.  Lin made the same assertions while under oath in an interview with officials in the Chicago office of the Department of Homeland Security’s U.S. Citizenship and Immigration Services, the plea agreement states.

In reality, Lin had been a member of the Chinese Communist Party from 1987 to 1997, and had received an identification document identifying him as “Yeung Yung.”  Lin admitted in the plea agreement that he made the misrepresentations so he would be granted U.S. citizenship.  He further acknowledged that his misrepresentations were material to the United States’ subsequent decision to grant him citizenship.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The Department of Homeland Security’s U.S. Citizenship and Immigration Services assisted in the investigation.

Plea Agreement

CHICAGO — A federal grand jury in Chicago has indicted the owner of a North Side medical clinic for dispensing prescription painkillers to patients he knew did not have a legitimate medical need for the drugs.

MOHAMMED SHARIFF, the owner and manager of Midtown Medical Center in Chicago’s Uptown neighborhood, conspired with a physician and a physician assistant to sell prescriptions for oxycodone, hydrocodone and other medications to patients they knew did not have a medical reason for taking the drugs, according to a 16-count indictment returned in federal court in Chicago.  In some instances the patients received prescriptions without a meaningful physical examination or medical test being performed, while at other times the physician, THEODORE GALVANI, saw multiple individuals at the same time before writing the prescriptions, according to the indictment.  On some occasions, according to the indictment, Shariff directed Galvani to prescribe painkillers to individuals with whom Galvani had never met.

The indictment seeks forfeiture of approximately $584,188 from Shariff, Galvani and the physician assistant, IRFAN MOHAMMED, and an additional $180,268 from only Shariff.

Shariff, 66, of Lincolnwood, pleaded not guilty today during an arraignment before U.S. District Judge Harry D. Leinenweber in Chicago.  Galvani, 59, of Spring Grove, and Mohammed, 37, of Rockville, Md., will appear for arraignments at a future date to be determined by the Court.

The indictment was returned earlier this month and unsealed today.  It charges Shariff, Mohammed and Galvani with one count of conspiracy to knowingly and intentionally dispense controlled substances outside the course of professional practice and without a legitimate medical purpose.  Shariff and Mohammed are also charged with eight counts of knowingly and intentionally dispensing oxycodone outside the course of professional practice and without a legitimate medical purpose, and six counts of dispensing hydrocodone outside the course of professional practice and without a legitimate medical purpose.  Shariff and Galvani are also charged with one count of conspiracy to commit health care fraud.

According to the indictment, purported Midtown patients often met with Mohammed prior to seeing Galvani.  During these meetings, Mohammed encouraged the individuals to tell Galvani that they suffered from ailments and injuries that Mohammed had fabricated for them, the indictment states.  Mohammed also falsified medical files in an effort to substantiate the prescriptions written by Galvani, the indictment states.

If a purported Midtown patient was uninsured, Shariff, Mohammed and Galvani demanded a cash payment in exchange for the prescriptions, according to the indictment.  For patients covered by Medicare, Shariff and Galvani allegedly agreed to falsely bill Medicare for services that were either not rendered or not medically necessary.  The indictment states that Shariff, Galvani and others working on their behalf caused Midtown to fraudulently bill Medicare approximately $351,958.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Lamont Pugh III, Special Agent-in- Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General.

The conspiracy count against all three defendants carries a maximum sentence of 20 years in prison.  Each count of dispensing oxycodone is punishable by up to 20 years, while the counts for dispensing hydrocodone and the health care conspiracy are each punishable by up to ten years.

The public is reminded that an indictment 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 a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Peter Flanagan.

Indictment

U.S. Attorney Zachary T. Fardon, FBI Chicago Special Agent in Charge Michael J. Anderson, Chicago Police Superintendent Eddie T. Johnson and other law enforcement officials will hold a news conference today to announce significant new indictments.   

The news conference will begin at 2:00 p.m. in the 9th Floor Press Room of the U.S. Attorney’s Office, Dirksen Federal Building, 219 S. Dearborn, Chicago IL 60604.  Media credentials will be required to access the Press Room, which will be open beginning at 1:15 p.m.

WHO: Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago Office of the FBI; Eddie T. Johnson, Superintendent of the Chicago Police Department; and several other law enforcement officials from the Chicago area and Indiana.

WHAT: The officials will announce significant new indictments against numerous alleged gang members.

WHERE: U.S. Attorney’s Office, 9th Floor Press Room in the Dirksen Federal Building, 219 S. Dearborn, Chicago IL 60604

WHEN: Tuesday, July 26, 2016, 2:00 p.m.

CHICAGO — Two federal indictments unsealed in Chicago today charged 34 members of the Latin Kings street gang with participating in a criminal organization that assaults and attempts to murder its rivals and violently protects its territories in the city and suburbs.

Authorities uncovered the alleged gang activity through dual investigations conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF).  During the course of the multi-year probes, law enforcement agents confiscated more than 40 firearms, including two AR-15 assault rifles.

The indictments allege that members of the Latin Kings violently enforced discipline within its ranks and retaliated against rivals and former members to prevent cooperation with law enforcement.  Its members and associates engaged in various acts of violence, including murder, attempted murder, assault with dangerous weapons, arson, and extortion, according to the indictments.  The charges include the attempted murders of rival gang members and a Melrose Park Police officer.

Thirty four alleged Latin Kings are charged with racketeering conspiracy.  A 35th alleged Latin King is charged in the indictment with selling a firearm without a license.  The 36th and final defendant is an alleged Latin King charged in a criminal complaint with being a felon in possession of a firearm.

Several of the defendants were arrested this week and have begun making initial appearances in federal court in Chicago.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Lindsay Murphy, Acting Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Eddie T. Johnson, Superintendent of the Chicago Police Department.  The officials recognized the substantial investigative assistance of the Melrose Park Police Department, Maywood Police Department, Cook County Sheriff's Police Department, Joliet Police Department, Evergreen Park Police Department, Bolingbrook Police Department, Orland Park Police Department, Palos Park Police Department, Hammond (Ind.) Police Department, and East Chicago (Ind.) Police Department.

The indictments pertain to alleged Latin King activities in two Chicagoland areas – the Southeast Side of Chicago, including the south suburbs, and the western suburbs of Maywood and Melrose Park.

Southeast Region (Chicago and South Suburbs)

U.S.A. v. Cavillo, et al, 16 CR 463

The Southeast Region of the Latin Kings contains over a dozen chapters, all of which answer to a regional structure of leadership, according to the indictment.  Each chapter is typically named after the city in which it operates, or by a street or streets that run through the chapter.  Among the Chicago chapters included in the Southeast Region were 82nd Street, 88th and 89th Streets, 97th Street, 99th Street, 102nd Street, 104th Street, and the Roseland neighborhood.  Other regional chapters operated in the south suburbs of Blue Island, Dolton, Harvey and Chicago Heights, as well as in Kankakee and communities across the border in Indiana, according to the indictment.

 The indictment charges three alleged high-ranking Latin Kings who enforced discipline and adherence to the gang’s rules and were known as “Regional Enforcers.”  The three Southeast Regional Enforcers charged in the indictment are RAUL CAVILLO, 33, of Chicago; JOEL NUNEZ, 39, of Chicago; and CARLOS PADILLA JR., 35, of Chicago.

Also charged in the indictment are several alleged chapter leaders, known within the hierarchy as “Incas,” and their second in command, known as “Caciques.”  According to the indictment, PAUL VASQUEZ, 43, of Chicago, served as Inca of the 82nd Street chapter; RUBEN PORRAZ, 36, of Chicago, was Inca of the 89th Street chapter; EDWARD DELGADO JR., 31, of Chicago, and LUIS GOMEZ, 31, of Chicago, were at times Incas of the 97th Street chapter; MIGUEL DENAVA, 27, of Chicago, served as Inca of the 99th Street chapter; and ELOY FUENTES, 31, of Chicago, was Inca of the 104th Street chapter.  Incas are considered the highest authority within a chapter and oversaw the unlawful affairs of the Latin Kings in their areas, according to the indictment. 

Caciques charged in the indictment include RAYMOND VASQUEZ, 30, of Chicago, who worked in the 97th Street chapter; and CARLOS CARTAGENA, 35, of Calumet City, in the 102nd Street chapter, according to the indictment.

Raymond Vasquez and three “Soldiers” of the chapter are charged in the indictment with using a dangerous weapon to assault an individual on Dec. 2, 2012, in south suburban Burnham.  The purpose of the assault was to maintain and increase their position in the Latin Kings, the indictment states.  The soldiers are identified in the indictment as FERNANDO CHAVEZ, 31, of Lansing; ISRAEL MATA, 33, most recently in state custody in Indiana on firearm charges; and EDGAR GONZALEZ, 32, of Whiting, Ind.  Chavez is a convicted felon who is also charged with illegally possessing a Smith & Wesson .38-caliber pistol in Chicago in the summer of 2014, the indictment states.

Several other firearm-related offenses are charged in the indictment.  A chapter soldier, ROY VEGA, 33, of Chicago, is charged with brandishing and discharging a firearm during a violent assault on July 5, 2014, in Chicago.  Paul Vasquez is charged with attempting to transfer a loaded Tec-DC9 semi-automatic pistol to other Latin King members on Oct. 25, 2015, in Chicago, according to the indictment.  Delgado is charged with being a felon in possession of a loaded Tauras .380-caliber semi-automatic pistol in Chicago, the indictment states.  Delgado also faces a drug-related charge for allegedly distributing cocaine in the city in April 2014.

Also charged in the indictment is JUAN JIMENEZ, 33, of Blue Island, who allegedly served as the Southeast Regional Treasurer.  Jimenez collected dues from the chapters as a way of financially supporting the activities of the region, the indictment states.

 “M-Town” Section (Melrose Park and Maywood)

U.S.A. v. Gennell, et al, 16 CR 462

Included within the Midwest Region of the Latin Kings were numerous sections of the gang, including the Maywood section and the Melrose Park section, which collectively were referred to as the “M-Town” section.  The geographical location controlled by the Maywood section included the area east of 25th Avenue, west of 1st Avenue, north of Lake Street, and south of North Avenue, in the western suburbs of Maywood and Melrose Park, according to the indictment.

The M-Town section was divided into two groups, known as “circles,” the indictment states.  A group of older members were referred to as the “junior” circle or “older” circle, while a group of younger members were referred to as the “Pee-Wee” or “Shorty” circle.  During periods when the M-Town section was split into an older and younger circle, each circle had its own set of leaders, but the ranking members of the younger circle still reported to the ranking members of the older circle, according to the indictment.

The hierarchy within the M-Town section was similar to the rankings in other Latin King sections, including the roles of Incas, Caciques, Enforcers, Soldiers and others, the indictment states.  Several leaders of the M-Section, including three Incas and three Caciques, have been charged in the indictment.  The three Incas are identified as PIERE PAOLO GENNELL, 30, of Melrose Park, and JOSE F. HERNANDEZ, 45, of Maywood, both of whom served at various times as Inca of the older circle; and DAVID PEREZ, 26, of Melrose Park, an Inca of the younger circle.  The Caciques include older circle members ULISES DE LA CRUZ, 28, of Melrose Park, and MIGUEL MARTINEZ, 31, of Grayslake; and younger circle Cacique RUBEN MORENO, 24, of Melrose Park.

Gennell and Perez, along with two younger circle enforcers and a soldier, are charged in the indictment with attempting to murder an individual in Melrose Park on May 11, 2014, according to the indictment.  During the attempted murder, the two enforcers, EFRAIN MEDINA, 26, of Maywood, and JOSE PENA, 21, of Melrose Park, personally discharged a firearm that left the victim badly injured and permanently disfigured, according to the indictment.

EDGAR VELARDE-SALDANA, 33, of Maywood, a soldier in the younger circle of the M-Town section, is charged in the indictment with attempting to murder a Melrose Park police officer on July 6, 2014.  The officer was assisting agents from the Federal Bureau of Investigation at the time of the attempted killing, according to the indictment.  The following month, Velarde-Saldana brandished and discharged a .45-caliber pistol during the course of a separate violent crime in Maywood, the indictment states.

Several other firearm-related offenses are charged in the indictment.  Perez is facing gun charges for being a felon in possession of five pistols, a shotgun and a rifle in Maywood, Melrose Park and Hinsdale in the summer of 2014, according to the indictment.  MARIO A. HERNANDEZ, 41, of Maywood, is a convicted felon who allegedly illegally possessed a Smith & Wesson 556-caliber rifle.

The investigations were conducted under the umbrella of the OCDETF program, 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, weapons trafficking and money laundering organizations.

The public is reminded that indictments contain only charges 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.

The racketeering conspiracy charge generally carries a maximum sentence of 20 years in prison, but a life sentence is possible for certain underlying racketeering activities referenced in the indictments.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

Assistant U.S. Attorneys Brian Wallach, Derek Owens and Vikas Didwania are representing the government in the Cavillo, et al, case. 

Assistant U.S. Attorneys Jennie Levin, Matthew Hernandez and Morris Pasqual are representing the government in the Gennell, et al, case.

Gennell et al indictment

Cavillo et al indictment

CHICAGO — A federal judge today sentenced the head of a Schaumburg home health company to six years in prison for scheming to bill Medicare for millions of dollars in unnecessary services. 

As the manager of Suburban Home Physicians, which did business as Doctor at Home, DIANA JOCELYN GUMILA directed employees to perform in-home visits with patients who were physically capable of leaving their residences and not in need of in-home treatment.  Gumila also inflated the costs incurred by Medicare by directing employees to bill the treatment at the most complicated levels, even though the visits were typically routine and did not qualify for the elevated billing. 

A jury in April convicted Gumila, 47, of Streamwood, on 21 counts of health care fraud and three counts of making false statements in a health care matter.  In addition to the 72-month sentence, U.S. District Judge Charles P. Kocoras ordered the defendant to pay $15.6 million in restitution.

“Home-health fraud has become a significant problem nationally and particularly in the Chicago area,” Assistant U.S. Attorney Stephen Chahn Lee argued in the government’s sentencing memorandum.  “Such fraud cannot happen without people like defendant, who abuse Medicare’s rules and abuse the trust placed in them by Medicare and their patients.”

Gumila is one of several defendants convicted in the federal investigation of Doctor at Home.  The prior convictions include ALAN NEWMAN, a physician from Chicago, and JAMES ADEMIJU, a nurse from Matteson who operated two nursing agencies.  In a plea agreement, Newman admitted falsely certifying patients for nursing services even when he knew the patients did not need such care.  Newman admitted causing approximately $2.6 million in losses to Medicare, according to his plea agreement.  Ademiju pleaded guilty to billing for unnecessary services that were improperly authorized by physicians from Doctor at Home, and he acknowledged making illegal payments for patient referrals.

Evidence presented at Gumila’s two-week trial included a surreptitious audio recording in which Gumila can be heard telling a new doctor to “paint the picture” of patients so as to make them appear confined to their homes.  Emails from Gumila were also shown to the jury, including one in which she referred to a physician who did not read orders before signing them as “the type of doctor we need [b]ecause he will just do what we tell him to do.”

Gumila’s conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Kristie Osswald, Special Agent-in-Charge of the Chicago Office of the Railroad Retirement Board Office of the Inspector General.

The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and the U.S. Department of Health and Human Services to prevent fraud and to enforce anti-fraud laws around the country.  Dozens of defendants have been charged in numerous fraud cases since the strike force began operating in Chicago in 2011.

The government is represented by Mr. Lee and Assistant U.S. Attorney Vikas Didwania.

CHICAGO — A federal jury today convicted the former owner of a rooftop building overlooking Wrigley Field of defrauding the Chicago Cubs and municipal taxing agencies by underreporting attendance figures and gross revenues.

After a nine-day trial in U.S. District Court in Chicago, R. MARC HAMID, 47, of Lincolnwood, was convicted on four counts of mail fraud and five counts of illegally structuring financial transactions.   The conviction carries a maximum sentence of 105 years in prison.

U.S. District Judge Thomas M. Durkin scheduled a sentencing hearing for Dec. 6, 2016.

Hamid is a licensed Illinois attorney and an owner and operator of Right Field Rooftops LLC, which did business as Skybox on Sheffield, a rooftop entertainment venue located across the street from Wrigley Field’s right field wall.  Hamid also owned and operated JustGreatTickets.com Inc. and Just Great Seats LLC, companies that purchased and re-sold tickets to entertainment and sporting events.

Skybox on Sheffield and other rooftop venues surrounding Wrigley Field had an agreement with the Cubs that required, among other things, that each rooftop pay the Cubs a royalty of 17% of their gross annual revenues.  In addition, Cook County and the city of Chicago required the rooftops to pay an amusement tax on admission fees, and to report its amusement tax returns to the municipalities.  The state of Illinois also required Skybox on Sheffield to file sales tax returns and to pay the state a certain dollar amount per ticket sold.

Evidence at trial revealed that for the years 2008 through 2011, Hamid caused Skybox on Sheffield to submit false annual royalty statements to the Cubs that under-reported attendance figures by thousands of paid attendees, and under-reported gross revenues by at least $1.5 million.  At Hamid’s direction, sales from Skybox on Sheffield were diverted to the two ticket companies, thus concealing from the Cubs, Cook County and the city of Chicago Skybox on Sheffield’s true revenue.  Hamid’s accountant, JOSEPH GURDAK, further reduced the attendance and revenue figures reported to the Cubs.

Gurdak, 73, pleaded guilty prior to trial to one count of mail fraud and one count of willfully filing a false income tax return.  Gurdak faces a maximum sentence of 23 years in prison.  Gurdak’s sentencing hearing before Judge Durkin has not yet been scheduled.

Hamid’s conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation in Chicago; and Antonio Gómez, Postal Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. 

The government is represented by Assistant U.S. Attorneys Barry Jonas, Sean Driscoll and Katherine Welsh.

U.S. authorities have charged the alleged owner of today’s most visited illegal file-sharing website with criminal copyright infringement and have seized domain names associated with the website.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.

Artem Vaulin, 30, of Kharkiv, Ukraine, was arrested today in Poland and is charged by criminal complaint, filed in U.S. District Court in Chicago, with one count of conspiracy to commit criminal copyright infringement, one count of conspiracy to commit money laundering and two counts of criminal copyright infringement.  The United States will seek to extradite Vaulin to the United States.

“Vaulin is charged with running today’s most visited illegal file-sharing website, responsible for unlawfully distributing well over $1 billion of copyrighted materials,” said Assistant Attorney General Caldwell.  “In an effort to evade law enforcement, Vaulin allegedly relied on servers located in countries around the world and moved his domains due to repeated seizures and civil lawsuits.  His arrest in Poland, however, demonstrates again that cybercriminals can run, but they cannot hide from justice.”

“Copyright infringement exacts a large toll, a very human one, on the artists and businesses whose livelihood hinges on their creative inventions,” said U.S. Attorney Fardon.  “Vaulin allegedly used the Internet to cause enormous harm to those artists.  Our Cybercrimes Unit at the U.S. Attorney’s Office in Chicago will continue to work with our law enforcement partners around the globe to identify, investigate and prosecute those who attempt to illegally profit from the innovation of others.”

“Artem Vaulin was allegedly running a worldwide digital piracy website that stole more than $1 billion in profits from the U.S. entertainment industry,” said Executive Associate Director Edge.  “Protecting legitimate commerce is one of HSI’s highest priorities.  With the cooperation of our law enforcement partners, we will continue to aggressively bring to justice those who enrich themselves by stealing the creative work of U.S. artists.”

“Investigating cyber-enabled schemes is a top priority for CI,” said Chief Weber.  “Websites such as the one seized today brazenly facilitate all kinds of illegal commerce.  Criminal Investigation is committed to thoroughly investigating financial crimes, regardless of the medium.  We will continue to work with our law enforcement partners to unravel this and other complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their income and use the Internet to mask their true identity.”

According to the complaint, Vaulin allegedly owns and operates Kickass Torrents or KAT, a commercial website that has enabled users to illegally reproduce and distribute hundreds of millions of copyrighted motion pictures, video games, television programs, musical recordings and other electronic media since 2008.  The copyrighted material is collectively valued at well over $1 billion, according to the complaint.  The complaint alleges that KAT receives more than 50 million unique visitors per month and is estimated to be the 69th most frequently visited website on the internet.

In addition, a federal court in Chicago ordered the seizure of one bank account and seven domain names associated with the alleged KAT conspiracy.

According to the complaint, KAT has consistently made available for download movies that were still in theaters and displayed advertising throughout its site.  KAT’s net worth has been estimated at more than $54 million, with estimated annual advertising revenue in the range of $12.5 million to $22.3 million, according to the complaint.  The complaint alleges that the site operates in approximately 28 languages.  KAT has moved its domains several times due to numerous seizures and copyright lawsuits, and it has been ordered blocked by courts in the United Kingdom, Ireland, Italy, Denmark, Belgium and Malaysia, according to the complaint.  KAT has allegedly operated at various times under the domains kickasstorrents.com, kat.ph, kickass.to, kickass.so and kat.cr, and relied on a network of computer servers located around the world, including in Chicago. 

Several motion pictures currently available for download and sharing on KAT are still showing in theatres, including “Captain America: Civil War,” “Now You See Me 2,” “Independence Day: Resurgence” and “Finding Dory,” according to the complaint.  The complaint alleges that Vaulin, who used the screen name “tirm,” was involved in designing KAT’s original website, oversaw KAT’s operations and, during the latter part of the conspiracy, Vaulin allegedly operated KAT under the auspices of a Ukrainian-based front company called Cryptoneat. 

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

HSI and IRS-CI investigated the case with substantial assistance from the International Organized Crime Intelligence and Operations Center, the National Intellectual Property Rights Coordination Center, the Criminal Division’s Office of International Affairs and the Polish Border Guard and National Prosecutor’s Office.

Senior Counsel Ryan K. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys William E. Ridgway and Devlin N. Su of the Northern District of Illinois are prosecuting the case.  The Criminal Division’s Office of International Affairs also provided significant assistance in this case. 

CHICAGO — Federal authorities in Chicago have charged the alleged owner of today’s most-visited illegal file-sharing website with criminal copyright infringement and have seized domain names associated with the website.

ARTEM VAULIN, 30, of Kharkiv, Ukraine, allegedly owns and operates Kickass Torrents, or KAT, a commercial website that since 2008 has enabled users to illegally reproduce and distribute hundreds of millions of copies of copyrighted motion pictures, video games, television programs, musical recordings and other electronic media, collectively valued at more than $1 billion, according to a criminal complaint filed in U.S. District Court in Chicago.  KAT receives more than 50 million unique monthly visitors and is estimated to be the 69th most frequently visited website on the Internet, according to the complaint.

Vaulin was arrested today by authorities in Poland.  The complaint charges Vaulin with one count of conspiracy to commit criminal copyright infringement, one count of conspiracy to commit money laundering, and two counts of criminal copyright infringement.  The United States will seek to extradite Vaulin to the United States. 

The complaint and arrest were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI); and Richard Weber, Chief, Internal Revenue Service Criminal Investigation.  Substantial assistance was provided by the International Organized Crime Intelligence and Operations Center, the National Intellectual Property Rights Coordination Center, the Criminal Division’s Office of International Affairs, and the Polish Border Guard and National Public Prosecutor’s Office.

“Copyright infringement exacts a large toll, a very human one, on the artists and businesses whose livelihood hinges on their creative inventions,” said U.S. Attorney Fardon.  “Vaulin allegedly used the Internet to cause enormous harm to those artists.  Our Cybercrimes unit at the U.S. Attorney’s Office in Chicago will continue to work with our law enforcement partners around the globe to identify, investigate and prosecute those who attempt to illegally profit from the innovation of others.”

“Vaulin is charged with running today’s most visited illegal file-sharing website, responsible for unlawfully distributing well over $1 billion of copyrighted materials,” said Assistant Attorney General Caldwell.  “In an effort to evade law enforcement, Vaulin allegedly relied on servers located in countries around the world and moved his domains due to repeated seizures and civil lawsuits.  His arrest in Poland, however, demonstrates again that cybercriminals can run, but they cannot hide from justice.”

“Artem Vaulin was allegedly running a worldwide digital piracy website that stole more than $1 billion in profits from the U.S. entertainment industry,” said Executive Associate Director Edge.  “Protecting legitimate commerce is one of HSI’s highest priorities.  With the cooperation of our law enforcement partners, we will continue to aggressively bring to justice those who enrich themselves by stealing the creative work of U.S. artists.”

“Investigating cyber-enabled schemes is a top priority for CI,” said Chief Weber.  “Websites such as the one seized today brazenly facilitate all kinds of illegal commerce.  Criminal Investigation is committed to thoroughly investigating financial crimes, regardless of the medium.  We will continue to work with our law enforcement partners to unravel this and other complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their income and use the Internet to mask their true identity.”

KAT operates in approximately 28 languages, according to the complaint.  KAT’s net worth has been estimated at more than $54 million, with estimated annual advertising revenue in the range of $12.5 million to $22.3 million, according to the complaint.  KAT has moved its domain several times due to numerous seizures and copyright lawsuits, and it has been ordered blocked by courts in the United Kingdom, Ireland, Italy, Denmark, Belgium and Malaysia, the complaint states.

In addition to the charges, a federal court in Chicago ordered the seizure of seven domain names associated with the alleged KAT conspiracy.  The site relies on a network of computer servers around the world, including servers located in Chicago, and has operated at various times under the domains kickasstorrents.com, kat.ph, kickass.to, kastatic.com, kickass.so, thekat.tv and kat.cr, according to the complaint.

According to the complaint, movies that were still in theaters have consistently been made available for download by the KAT conspiracy.  Films that KAT recently made available for download include “Captain America: Civil War,” “Now You See Me 2,” “Independence Day: Resurgence,” and “Finding Dory,” according to the complaint. 

Vaulin, who used the online screen name “tirm,” was involved in designing KAT’s original website and oversaw KAT’s operations, according to the complaint.  During the latter part of the conspiracy, Vaulin allegedly operated KAT under the auspices of a Ukrainian-based front company called Cryptoneat. 

Criminal copyright infringement and conspiracy to commit criminal copyright infringement carry a maximum sentence of five years in prison.  Conspiracy to commit money laundering is punishable by up to 20 years.

The public is reminded that a complaint 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.  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. Attorneys William E. Ridgway and Devlin N. Su of the U.S. Attorney’s Office for the Northern District of Illinois; and Senior Counsel Ryan K. Dickey of the Criminal Division’s Computer Crime & Intellectual Property Section.

Complaint

CHICAGO — In the first federal prosecution of its kind, a high-frequency trader was sentenced today to three years in prison for disrupting commodity futures prices in a $1.4 million fraud scheme.

MICHAEL COSCIA, 54, used an automated trading technique known as “spoofing” to earn illegal profits from orders he placed through Chicago-based CME Group and London-based ICE Futures Europe.  Coscia commissioned the design of computer programs, known as algorithms, to implement the fraudulent strategy at his New Jersey trading firm.

A federal jury in Chicago last year convicted Coscia, of Rumson, N.J., on six counts of commodities fraud and six counts of spoofing.  U.S. District Judge Harry D. Leinenweber imposed the 36-month sentence in federal court in Chicago.

“Traders contemplating sophisticated scams will think twice if they know that there are more significant consequences than a civil lawsuit or a regulatory action,” Assistant U.S. Attorney Sunil Harjani argued in recommending a term of imprisonment in the government’s sentencing memorandum.  “Hedge funds and proprietary trading firms will closely review their trades, and strike down get-rich-quick manipulation trading schemes because the cost is not worth the benefit.”

The indictment against Coscia marked the first federal prosecution under the anti-spoofing provision enacted in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.  The case was prosecuted by the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago.  The section, which was created in 2014 by United States Attorney Zachary T. Fardon, is dedicated to protecting markets and preserving investors’ confidence.

Mr. Fardon announced the sentence along with Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

High-frequency trading is a form of automated trading that uses algorithms for placing a high volume of orders in milliseconds.  It is illegal for traders to engage in spoofing, which involves placing “bids” to buy or “offers” to sell a futures contract with the intent to cancel the bid or the offer before execution. 

Evidence at Coscia’s seven-day trial in November 2015 showed that he engaged in spoofing in the markets of various commodities, including gold, soybean meal, soybean oil, high-grade copper, Euro FX and Pounds FX currency futures.  In less than three months in 2011, Coscia illegally profited nearly $1.4 million.

ROCKFORD — A Rockford-based company was sentenced today by U.S. Magistrate Judge Iain D. Johnston for willfully violating Occupational Safety and Health Administration regulations, resulting in the death of an employee at the company’s facility in South Beloit, Ill.

BEHR IRON & STEEL INC., a high volume ferrous and nonferrous scrap processor, was sentenced to 5 years’ probation and ordered to pay restitution of $350,000 to the victim’s estate.  Behr was also previously ordered to pay a fine of $520,000 in a related administrative OSHA case.

The company pleaded guilty to the charge on March 8, 2016, and admitted in a plea agreement that on March 10, 2014, the company failed to provide lockout/tagout protection and confined space protection as required under OSHA regulations for the company’s employees who were cleaning a shredder discharge pit.  The company admitted that those violations caused the death of an employee who got caught in a moving, unguarded conveyor belt.

Behr’s South Beloit facility recycles metals contained in such things as automobiles and refrigerators.  According to the plea agreement, OSHA regulations require employers to adopt safety procedures to ensure that dangerous machines are properly shut off and unable to start up again prior to the completion of maintenance or servicing work.  The safety procedures include placing a lock on the power source of the machine and a tag on the lock warning that the machine cannot be operated until the warning is removed, and identifying the employee who has the key to the lock.  OSHA also promulgated regulations that address the need to protect employees from entering a confined space without safety precautions.

Metals shredded through a shredding machine in Behr’s South Beloit facility fall onto a conveyor belt located about ten feet underground in a shredder discharge pit, which was approximately six feet long and six feet wide.  The shredded materials were then moved by a conveyor belt out of the discharge pit and through a sorting process.  Some of the shredded metals fall onto the ground of the discharge pit near the conveyor belt.  One or two Behr employees working on the shredding machine were required to clean the discharge pit on a daily basis.  The employees shoveled shredded materials from the floor of the discharge pit onto the running conveyor belt.

On March 10, 2014, a Behr employee was cleaning the discharge pit when the employee’s arm was caught by the unguarded conveyor belt.  The employee was pulled into the machinery and killed.

Behr admitted that there was no lock or operable emergency shut off switch in the discharge pit for the conveyor belt, and the conveyor belt did not have guards designed to protect employees.  Behr also admitted that employees in the discharge pit were not adequately trained to use the shredder or the conveyor belt, and that the company had not developed and implemented confined space protection for employees entering the discharge pit.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Ken Nishiyama Atha, Regional Administrator of OSHA in Chicago.

The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.

WASHINGTON — According to a civil complaint the United States filed in 2014, a Chicago-based tax return preparer prepared returns that falsely claimed that recipients of discrimination awards related to a class-action lawsuit could claim large deductions on their federal tax returns and that falsely inflated the amount of wages that city of Chicago employees claimed were withheld from their paychecks.  Now a federal court has completely barred this tax return preparer from preparing tax returns for others.

VICTOR M. CROWN promoted two false and fraudulent schemes through which he claimed that his customers could obtain significant federal income tax refunds, the complaint alleged.  In the first scheme, as set out in the complaint, Crown falsely inflated the amount of income tax that was withheld from his customers’ paychecks because the city of Chicago purportedly calculated an incorrect withholding amount.  Taxpayers may not claim a withholding credit larger than the amount that was actually withheld from their wages.  The second scheme is founded on the 1969 class-action lawsuit Shakman v. Democratic Organization of Cook County, et al., No. 69-cv-2145 (N.D. Ill.), according to the United States’ complaint.  Shakman was a discrimination case against the city of Chicago that alleged that the city improperly used political patronage when hiring and promoting public officials.  As part of an agreed Shakman settlement order, the city set up a $12 million fund to compensate claimants for violations of the federal district court’s orders.  Claims were submitted to the court-appointed monitor, who was responsible for evaluating the claims and, if justified, assigning a monetary award amount.  According to the United States’ complaint against Crown, Crown asserted that his customers who were Shakman award recipients were entitled to claim net operating loss deductions for the difference between their claim and the amount they actually received in their award.  The federal tax law does not permit a deduction in the amount of a denied discrimination claim.

In explaining its reasons for enjoining Crown, the court noted that the scope of Crown’s misconduct involved “at least 2,900 fraudulent tax returns,” as well as his “failure to accept responsibility and cease his operations.”  The court’s injunction order forbids Crown from preparing tax returns for others and from making false statements about securing any tax benefit by virtue of receiving or not receiving an award in the Shakman litigation.  It also requires Crown to give the United States a list of all his tax-preparation customers since 2010.

Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016.  The IRS has some tips on its website for choosing a tax preparer and has launched a free directory of federal tax preparers.  In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters.  Information about these cases is available on the Justice Department’s website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

WASHINGTON – A federal grand jury sitting in Chicago, Illinois, returned an indictment, which was unsealed yesterday, charging four Chicago-area residents with conspiracy to commit theft of government money, wire fraud, theft of government money, aggravated identity theft and access device fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.

The indictment charges ROXANN GIST, DOMINIQUE KING, NELLYVETTE MOJICA and ROSA ALVERIO with conspiracy to commit theft of government money.  Gist and King also are charged with wire fraud, aggravated identity theft and access device fraud.  Mojica and Alverio also are charged with theft of government money.

According to the indictment, Gist and King used the means of identification of other individuals without their knowledge and consent in order to prepare and file false tax returns that claimed large tax refunds.  The refund checks were mailed to addresses in the Chicago area or electronically deposited into bank accounts controlled by the defendants and others.  After Mojica and Alverio received a number of the fraudulent refund checks into accounts under their control, they split the proceeds with Gist and King.  From 2012 to 2015, the defendants and others received in excess of $1.3 million in fraudulent tax refunds.

If convicted, the defendants each face a statutory maximum sentence of five years in prison for the conspiracy count.  Gist and King also face a statutory maximum sentence of 20 years in prison for wire fraud, 10 years in prison for access device fraud and a mandatory minimum sentence of two years in prison for each count of aggravated identity theft, which must run consecutive to any other sentence imposed by the court.  Mojica and Alverio also face a statutory maximum sentence of 10 years in prison for the theft of government money counts.  In addition, the defendants face potential fines, forfeiture and restitution.

An indictment merely alleges that crimes have been committed.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Ryan R. Raybould and Timothy M. Russo of the Tax Division, who are prosecuting this case.

Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.

 

CHICAGO — A federal grand jury in Chicago has indicted a Spanish investor for allegedly covering up an international insider trading scheme that netted more than $4.6 million.

LUIS MARTIN-CARO SANCHEZ bought options of Canadian fertilizer producer Potash Corporation of Saskatchewan Inc., a few days before the company publicly announced an unsolicited buyout offer that drove its stock price up 27.7%, according to the indictment.  Sanchez made the timely trades after communicating with banking and investor friends in Spain, the indictment states.

In five days in August 2010 Sanchez netted approximately $496,953 – a return of approximately 1,046% on his investment, the indictment states.  Two of his friends made similar trades and profited approximately $993,183, while a Spanish businessman in Greece profited more than $3.1 million after communicating with a mutual acquaintance of Sanchez, according to the indictment.  In subsequent civil litigation brought against him by the U.S. Securities and Exchange Commission, Sanchez allegedly lied under oath and withheld key financial evidence.

The indictment was returned yesterday in U.S. District Court in Chicago.  It charges Sanchez, 42, of Madrid, Spain, with one count of obstruction of justice and two counts of perjury.

Federal authorities will seek to extradite Sanchez to the United States.  An arraignment date in federal court in Chicago has not yet been scheduled.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; David Glockner, Regional Director of the SEC’s Chicago Regional Office; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

According to the charges, Australian mining company BHP Billiton decided in August 2010 to make a tender offer for all of Potash’s common stock.  BHP dealt with several foreign investment banks to secure confidential financing commitments in an effort to underwrite the offer.  During a meeting in Chicago on Aug. 12, 2010, BHP’s chief executive officer conveyed a $38.6 billion buyout offer to Potash’s chief executive.  Potash rejected the offer, but it did not publicly announce the matter until Aug. 17, 2010, according to the indictment.

During those interim five days, Sanchez communicated extensively with his banking and investor friends, the indictment states.  On August 12 and 13, 2010, Sanchez purchased approximately 331 out-of-the-money call option contracts for Potash stock via an account at Interactive Brokers LLC, according to the indictment.  Sanchez’s contracts were set to expire within weeks of the purchase date, the indictment states.

In a telephonic deposition taken as part of the SEC lawsuit on July 1, 2011, Sanchez allegedly lied under oath when he denied knowing other people who purchased Potash securities in advance of Potash’s announcement of the buyout offer.  He also allegedly lied when he denied knowing the telephone numbers of two of those individuals.  Telephone records indicate that Sanchez had called each of them numerous times in the days between the private offer and Potash’s public announcement of it, the indictment states.

In late 2010 a friend who profited approximately $540,493 from Potash options sales sent 100,000 euros to Sanchez’s bank account in Zurich, Switzerland, the indictment states.  Sanchez withheld information about his Swiss account from the SEC during its investigation, according to the indictment.  The SEC discovered the account and the friend’s payment in January 2014 – more than two years after the SEC’s lawsuit against Sanchez had ended, the indictment states.

The obstruction count is punishable by up to 20 years in prison, while the perjury counts each carry a maximum sentence of five years.  The public is reminded that an indictment 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.  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 William Hogan.

Indictment

ROCKFORD — A local man was indicted June 21, 2016 by a federal grand jury in Rockford, Ill. on bank robbery, robbery affecting interstate commerce and firearm charges. 

DAVID J. SANDERS, 33, was charged with one count of attempted bank robbery, two counts of bank robbery, one count of robbery affecting interstate commerce, one count of using and carrying a firearm in relation to a crime of violence, and one count of possessing a firearm as a convicted felon.

The indictment alleges that on May 31, 2016, Sanders attempted to commit a robbery of the BMO Harris Bank, 2510 S. Alpine Rd., Rockford, Ill.   The indictment further alleges that on May 31, 2016, Sanders robbed the BMO Harris Bank, 1480 S. Alpine Rd., Rockford, Ill and that he obtained $2,260 from bank employees during that robbery.  The indictment further alleges on June 11, 2016 Sanders robbed Rockford Coin and Stamps, 4402 Center Ter., Rockford, Ill. while using and carrying a firearm during a crime of violence and that he obtained $500 and a Remington shotgun from Rockford Coin and Stamps employees during that robbery.  The indictment further alleges that between June 11, 2016 and June 14, 2016, Sanders possessed a firearm as a convicted felon.  The indictment further alleges that on June 14, 2016, Sanders robbed PNC Bank, 4615 E. State St., Rockford, Ill. and that he obtained $3,010 from bank employees during that robbery. 

Each count of attempted bank robbery, bank robbery and robbery affecting interstate commerce carries a maximum penalty of up to 20 years in prison, up to 3 years of supervised release following imprisonment, a fine of up to $250,000, and full restitution.  The charge of using and carrying a firearm in furtherance of a crime of violence carries a mandatory minimum sentence of 7 years, maximum penalty of up to life imprisonment, up to 5 years of supervised release following imprisonment, and a fine of up to $250,000.  The sentence imposed for this charge must be consecutive to any other sentence imposed.  The charge of possessing a firearm as a convicted felon carries a maximum penalty of 10 years, up to 3 years of supervised release, and a fine of up to $250,000.  If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

Sanders has been in custody since his arrest on June 14, 2016 and pleaded not guilty during his arraignment yesterday before U.S. Magistrate Judge Iain D. Johnston.  Sanders was previously ordered to be held in federal custody pending trial.  Sanders is next scheduled to appear before U.S. Magistrate Judge Johnson for a status hearing on Aug. 16, 2016 at 11:00 a.m.

The public is reminded that an indictment contains only charges 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 indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Dan O’Shea, Chief of the Rockford Police Department.  The investigation was conducted under the auspices of the FBI Safe Streets Task Force, which includes representatives from the FBI, ATF, Loves Park Police Department, Winnebago County Sheriff’s Department, and Rockford Police Department.

The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.

ROCKFORD — An Elgin resident pleaded guilty today before U.S. District Judge Frederick J. Kapala to federal fraud charges.

STEPHEN T. ANGERMAN, 48, pleaded guilty to bank fraud, money laundering, and testifying falsely in a bankruptcy case. 

According to the written plea agreement, from December 2009 through March 31, 2010, Angerman schemed to fraudulently obtain a $510,000 loan from Alliant Credit Union and a $64,590 loan from Prairie Community Bank in order to purchase a home on Wrenwood Circle in Elgin.  Angerman admitted to making false statements on his loan application to Alliant about his employment, assets, and liabilities.  Further, Angerman admitted to submitting fictitious bank account statements, pay stubs, and a W-2 earnings form, and a fraudulent Certificate of Gift form to the credit union in support of his application.  Alliant issued the loan based upon Angerman’s representations. 

Angerman admitted that in December 2009 and January 2010, he applied for and obtained a $64,590 loan from Prairie Community Bank by pledging a 2008 Chevrolet Corvette as collateral without disclosing that the Corvette was subject to a prior lien of approximately $40,000 held by another bank.   

With regard to the money laundering charge, Angerman admitted that on March 23, 2010, he transferred most of the proceeds, $64,500, from his checking account at Allied Credit Union to an account in the name of a relative at a different bank in an attempt to conceal his bank fraud against Prairie Community Bank.

On Jan. 3, 2011, Angerman filed for bankruptcy in Rockford.  Angerman admitted that on Feb. 7, 2011, he falsely testified under oath at a meeting of creditors by stating he did not own any real estate other than what he had listed in his bankruptcy schedules, and that he did not own a car, when in fact he owned the home on Wrenwood Circle in Elgin and the Corvette. 

Angerman faces up to 30 years’ imprisonment for bank fraud, a fine of up to $1,000,000, and a term of supervised release of up to 5 years.  For money laundering, Angerman faces a sentence of up to 20 years’ imprisonment, a fine of up to $500,000, and a term of supervised release of not more than 3 years.  Angerman also is subject to a civil penalty of twice the value of the property involved in the transaction.  For falsely testifying in his bankruptcy case, Angerman faces up to 5 years in prison, a $250,000 fine, and supervised release of up to 3 years.  The judge must also order Angerman to pay restitution.  Sentencing is set for Oct. 3, 2016, at 2:30 p.m.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service - Criminal Investigation Division in Chicago.

The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.

Plea Agreement

CHICAGO — Two north suburban doctors have been charged as part of the largest national Medicare fraud takedown in history, federal authorities announced today.

Attorney General Loretta E. Lynch and Department of Health and Human Services Secretary Sylvia Mathews Burwell announced the unprecedented nationwide sweep that resulted in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings.  Twenty-three state Medicaid Fraud Control Units participated in the takedown.  In addition, the HHS Centers for Medicare & Medicaid Services (CMS) is suspending payment to a number of providers using its suspension authority provided in the Affordable Care Act.  This coordinated takedown is the largest in history, both in terms of the number of defendants charged and the loss amount.    

“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – it is a serious crime,” said Attorney General Lynch.  “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment.  They target real people – many of them in need of significant medical care.  They promise effective cures and therapies, but they provide none.  Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends.  The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”

Two registered Illinois physicians were charged as part of the investigations, announced Zachary T. Fardon, United States Attorney for the Northern District of Illinois. 

DR. YEVGENY ODESSKY, a physician with an office in Buffalo Grove, took cash kickbacks in exchange for referring patients to a home health care agency in the north suburbs, according to a criminal complaint filed last week in federal court in Chicago.  Unbeknownst to Dr. Odessky, the owner of the agency was cooperating with federal authorities and had agreed to secretly record meetings with Dr. Odessky, according to the complaint.  In one recorded meeting in Dr. Odessky’s clinic on April 26, 2014, Dr. Odessky agreed to accept $300 for each Medicare beneficiary he referred to the agency, according to the complaint.  Speaking in Russian, Dr. Odessky is heard on the recording laughing while telling the agency owner, “Public Aid will choke,” according to the complaint.

Dr. Odessky, 66, of Highland Park, is charged with one count of violating the federal Medicare and Medicaid Anti-Kickback Statute, which is punishable by up to five years in prison and a fine of up to $250,000.  A preliminary hearing in federal court in Chicago is scheduled for July 11, 2016, at 1:00 p.m.

DR. ZOYA KOSMAN, a physician with an office in Skokie, allegedly caused the submission of false medical evidence to help a claimant obtain federal disability benefits to which the claimant was not entitled.  Dr. Kosman knowingly lied about the claimant’s complaints, symptoms, and functional abilities in documentation submitted in support of the claimant’s application for benefits, according to an indictment returned yesterday in federal court in Chicago.

The indictment charges Dr. Kosman, 58, of Skokie, with one count of making false statements in an application for federal benefits.  The charge carries a maximum sentence of ten years in prison and a fine of up to $250,000.  An arraignment in federal court in Chicago has not yet been scheduled. 

The cases announced today were investigated by the national Medicare Fraud Strike Force, whose operations are part of the Health Care Fraud Prevention & Enforcement Action Team.  Since its inception in March 2007, the Strike Force has charged more than 2,900 defendants who collectively have falsely billed the Medicare program more than $8.9 billion.

The Illinois cases are being prosecuted by the U.S. Attorney’s Office for the Northern District of Illinois.  The government in Dr. Odessky’s case is represented by Assistant U.S. Attorney Nathalina A. Hudson, and in Dr. Kosman’s case by Special Assistant U.S. Attorney Jared C. Jodrey.

The national cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with agents from the Federal Bureau of Investigation, HHS-OIG, Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.

The public is reminded that charges 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 — An Oak Brook couple who owned First Mutual Bancorp of Illinois and other financial entities intentionally hid cash and assets from creditors after defaulting on $40 million in personal and corporate loans, according to an indictment returned in federal court in Chicago.

PETHINAIDU VELUCHAMY and his wife, PARAMESWARI VELUCHAMY, were the principal shareholders of First Mutual Bancorp of Illinois Inc., a holding company for Mutual Bank.  In June 2009, according to the indictment, the couple defaulted on personal and corporate loans totaling $40 million.  The following month, Mutual Bank was shut down by federal regulators.  Prior to the shutdown and continuing until at least November 2015, the couple hid millions of dollars in assets by falsifying documents, moving money into domestic and foreign bank accounts, and directing employees to destroy financial records, the indictment states.  The couple also transferred cash to their two adult children, with nearly $8.5 million going to one and more than $10.1 million to the other, according to the indictment.

The 12-count indictment was returned yesterday in U.S. District Court in Chicago.  It charges Pethinaidu Veluchamy, 70, with four counts of bank fraud, two counts of destroying records to obstruct a bankruptcy proceeding, two counts of making a false statement under oath in a bankruptcy proceeding, and one count of making a false statement in an application for a U.S. passport.  Parameswari Veluchamy, 65, is charged with four counts of bank fraud, two counts of destroying records to obstruct a bankruptcy proceeding, one count of making a false statement under oath in a bankruptcy proceeding, and one count of making a false statement in an application for a U.S. passport.

Arraignments in federal court in Chicago have not yet been scheduled.

According to the charges, Pethinaidu Veluchamy caused his relatives to obtain legal judgments against him for loans for which he knew he was not personally liable, so that he could later assert those liens as superior to a bank creditor’s anticipated judgments.  In a 2011 deposition in a separate court case, Pethinaidu Veluchamy fraudulently claimed that certain funds transferred to his adult children represented indemnity obligations for their investments in First Mutual Bancorp, according to the indictment.   He produced a document to support this claim, but when questioned about the timing of the creation of the document, Pethinaidu Veluchamy claimed the computer he had used to create it crashed in a snowstorm, according to the indictment.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

Each count of bank fraud is punishable by up to 30 years in prison and a $1 million fine.  Destroying records to obstruct a bankruptcy proceeding carries a maximum sentence of 20 years.  The maximum sentence for making a false statement under oath in a bankruptcy proceeding is five years, while making a false statement in an application for a U.S. passport is punishable by up to ten years.

The public is reminded that an indictment 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 a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Bethany Biesenthal and Special Assistant U.S. Attorney Jeffrey Snell.

Indictment

CHICAGO —  The Civil Rights Division of the United States Department of Justice, along with the United States Attorney’s Office for the Northern District of Illinois, are conducting a civil pattern or practice investigation into the Chicago Police Department.  As part of the investigation, officials will be hosting public forums to provide information about the investigative process, and to offer time for community members to share their experiences with policing in Chicago.

The dates and locations of the forums are as follows:

 

June 22, 6:30 p.m. to 8:30 p.m.

Kennedy King City College (U Building)

740 W. 63rd St., Chicago IL 60621

 

July 12, 6:30 p.m. to 8:30 p.m.

Truman City College

1145 W. Wilson Ave., Chicago IL 60640

 

July 14, 6:30 p.m. to 8:30 p.m.

KROC Center Chapel

1250 W. 119th St., Chicago IL 60643

 

The forums are free of charge and open to the public and the media.

The purpose of the pattern or practice investigation is to determine whether there are systemic violations of the Constitution or federal law by the Chicago Police Department.  The investigation is focused on use of force, including racial, ethnic and other disparities in its use of force, as well as police accountability systems, including how internal investigations are conducted, how the police department responds to citizen complaints, and how it handles officer discipline.

Community members who are unable to attend the forums but wish to share information relevant to the investigation are encouraged to contact the Department of Justice by phone: (844) 401-3735 or email: community.cpd@usdoj.gov.

CHICAGO — A federal jury today convicted a Lockport subcontractor on fraud charges for scheming to help a general contractor falsely satisfy its female hiring requirement on city of Chicago construction projects.

As the owner of a certified Women’s Business Enterprise, ELIZABETH PERINO agreed to allow her company to be claimed as a subcontractor on city projects so that the general contractor could satisfy its requirement to assign a portion of the work to female-owned businesses.  Perino falsified paperwork to conceal the fact that her business, Perdel Contracting Co., would perform no actual work on the projects.  As a result of Perino’s fraud, Perdel expected to receive payment equivalent to a percentage of the work that Perdel fraudulently claimed to have performed.

Perino, 62, of Willowbrook, was convicted on three counts of wire fraud and one count of mail fraud.  The conviction is punishable by a maximum sentence of 80 years in prison.

U.S. District Judge Gary Feinerman will schedule a sentencing hearing at a later date.

A city of Chicago ordinance establishes an overall goal of awarding at least 5% of total annual funding of all city contracts to WBEs.  For contracts with values exceeding $10,000, each contractor has to commit a certain percentage of labor to WBEs, either as a joint venture or subcontractor, or by purchasing goods or services from a WBE.  In addition to being a WBE, Lockport-based Perdel, which specializes in concrete and carpentry work, also qualified to participate in city projects as a certified Disadvantaged Business Enterprise.

Evidence at the four-day trial revealed that Perino and a co-worker agreed to act as a “pass-through” WBE/DBE on two city projects, meaning that Perdel’s employees would perform no work and Perdel’s equipment would not be used.  For one of the projects – at O’Hare International Airport – Perino agreed to place the general contractor’s employees on Perdel’s payroll to perform the work that would be credited to Perdel.  Perino also entered into a sham contract to “purchase” street sweepers from the general contractor and title them in Perdel’s name while the general contractor’s workers performed the street sweeping as purported employees of Perdel.  Perino and the general contractor further agreed that, at the conclusion of the O’Hare project, the street sweepers would be returned to the general contractor for $1 per machine, and Perdel would receive 18% on top of the labor costs and $20 per hour for the street sweepers.

The conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; Thomas Ullom, Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General in Chicago; James Vanderberg, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Joseph M. Ferguson, Inspector General for the City of Chicago. 

The government is represented by Assistant U.S. Attorneys Megan Cunniff Church and Matthew Kutcher.

CHICAGO — A youth basketball coach from Chicago has been indicted on federal child pornography charges for allegedly paying minor boys to be photographed and video-recorded while engaged in sexually explicit conduct.

BRADLEY J. AMES, 35, and a co-conspirator paid approximately $100 to $650 to the minor boys in return for being photographed and video-recorded while engaged in various sexual acts, according to the indictment.  Ames and the co-conspirator then transmitted the photos and videos over the Internet, the indictment states. 

The pair met most of the minors online after the co-conspirator set up a Facebook profile for a fictitious female named “Hannah,” and used it to encourage young males to share photos and information about themselves, according to the indictment.  Ames then selected certain minors who had communicated with “Hannah” so that the co-conspirator could pursue sexually explicit photos and videos of them, the indictment states.

The six-count indictment was returned yesterday in federal court in Chicago.  It charges Ames with one count of conspiracy to produce child pornography, four counts of producing child pornography, and one count of knowingly receiving child pornography. 

Ames will be arraigned before U.S. Magistrate Judge Jeffrey T. Gilbert on June 15, 2016, at 1:45 p.m.

In addition to contacting children online, the indictment alleges that Ames identified at least one minor victim through a boy he met while coaching youth basketball.  Ames provided the minor’s Facebook page to the co-conspirator to facilitate contacting the child, the indictment states.  The indictment further alleges that Ames sometimes paid the co-conspirator to engage in sexually explicit conduct with the minors.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and James M. Gibbons, Acting Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

The conspiracy and production counts are punishable by a minimum sentence of 15 years in prison and a maximum of 30 years, while knowingly receiving child pornography carries a minimum sentence of five years in prison and a maximum of 20 years.

The public is reminded that an indictment 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.  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 Yusef Dale.

Indictment

CHICAGO — A man who allegedly manufactured explosive devices and kept them in the bedroom of his Lindenhurst home was ordered detained in federal custody today.

U.S. Magistrate Judge Sidney Schenkier ordered MICHAEL SUOPYS, 28, held without bond on a charge of knowingly possessing an unregistered destructive device.  A detention hearing is scheduled for June 15, 2016, at 10:30 a.m. 

A federal criminal complaint alleges that Suopys built two pipe bombs by filling a metal pipe with Nitrocellulose and adding a wick.  Suopys was also charged in Lake County Circuit Court with possessing bombs containing an explosive substance, which is a Class 3 felony.  The state charge was dismissed this morning.

“Thankfully, law enforcement at the federal, state and local level was able to identify and safely interrupt the threat described in the complaint,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.  “The Federal Bureau of Investigation, Lake County State’s Attorney’s Office and Lindenhurst Police Department are to be commended for their diligence and collaboration in this investigation.”

The federal complaint was announced by Mr. Fardon, along with Michael J. Anderson, Special Agent in Charge of the Chicago office of the FBI; Michael G. Nerheim, Lake County State’s Attorney; and Tom Jones, Chief of the Lindenhurst Police Department.

The federal charge carries a maximum sentence of ten years in prison and a fine of up to $250,000.

The public is reminded that a complaint 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.  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 Matthew Hiller.

CHICAGO — The owner of a Lombard weight-loss center and a Burr Ridge physician have been charged with conspiracy and other crimes related to dispensing appetite-suppressant drugs without a legitimate medical purpose.

According to a 17-count federal indictment, MICHAEL JENNINGS, the owner of Results Weight Loss Center, made cash payments to the doctor in exchange for using the physician’s federal registration number to order and dispense hundreds of thousands of dosages of Phendimetrazine and Phentermine.  The physician, WILLIAM MIKAITIS, was rarely present at the weight-loss center, according to the indictment.  Instead, Jennings, who is not a doctor and lacks medical training, identified himself to patients as “Dr. Mikaitis” and ordered the prescriptions without conducting meaningful examinations or tests, the indictment states.

The indictment alleges that between approximately February 2013 and January 2015, Jennings made cash deposits of approximately $75,000 into Mikaitis’ bank account.  The indictment seeks a total forfeiture from the defendants of approximately $790,000 in illegal proceeds from the scheme.

The indictment was returned yesterday in federal court in Chicago.  It charges Jennings, 48, of Naperville, and Mikaitis, 72, of Burr Ridge, with one count of conspiracy to distribute controlled substances outside the course of professional practice and without a legitimate medical purpose, seven counts of distributing controlled substances outside the course of professional practice and without a legitimate medical purpose, seven counts of dispensing prescription drugs without a valid prescription, and one count of conspiracy to conduct a financial transaction involving the proceeds of unlawful activity.  The counts are punishable by a maximum combined sentence of 95 years in prison.

Mikaitis, who maintains a medical practice in Lockport, is also charged individually with one count of engaging in a monetary transaction involving criminally derived property valued at more than $10,000.  This count carries a maximum sentence of ten years in prison.

Jennings and Mikaitis will be arraigned before U.S. District Judge Virginia M. Kendall on June 9, 2016, at 9:30 a.m.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.  The U.S. Food and Drug Administration’s Chicago Office and the Naperville Police Department assisted in the investigation, which was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF).  

The public is reminded that an indictment 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 a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines. 

The government is represented by Assistant U.S. Attorney Matthew Schneider.

Indictment

CHICAGO — The leader of a Chicago drug trafficking organization pleaded guilty in federal court today to distributing more than 1,000 kilograms of marijuana and laundering the proceeds by purchasing luxury cars and leasing high-rent properties.

JONATHAN TANKSON admitted in a plea agreement that he coordinated bulk shipments of marijuana from large-scale growers in California.  Between December 2010 and December 2013, Tankson flew to California at least twice per month, typically bringing with him on the plane $400,000 to $500,000 in cash.  Tankson often purchased 100 to 200 pounds of marijuana at a time, with the drugs being shipped on vans and tractor trailers to stash houses in Chicago, according to the plea agreement.  One of the stash houses was located in the Lincoln Park neighborhood of Chicago, while another was set up in a penthouse apartment in the city’s River West neighborhood.

Tankson, 32, of Evanston, pleaded guilty to one count of conspiracy to possess a controlled substance with the intent to deliver, and one count of conspiracy to commit money laundering.  The conviction carries a maximum sentence of 40 years in prison and a maximum fine of $1.5 million.

U.S. District Judge Matthew F. Kennelly scheduled a sentencing hearing for August 25, 2016, at 1:30 p.m.

According to the plea agreement, Tankson used drug proceeds to purchase several luxury automobiles through straw purchasers.  Between June 2011 and December 2013, Tankson orchestrated the purchases of a Porsche Cayenne sport utility vehicle for $140,000, a Mercedes-Benz S63 sedan for $108,000, an Audi A8 sedan for $80,000, and several other expensive vehicles, according to the plea agreement.  Tankson acknowledged in the plea agreement that the auto transactions were intended to conceal the source of the drug proceeds.

Tankson was arrested in December 2013.  During a search of his Lincoln Park stash house, law enforcement discovered more than $1 million in cash, approximately 75 kilograms of cannabis stuffed into numerous plastic bags, five suitcases filled with cannabis, 20 rounds of 9mm ammunition and two 9mm pistol magazines, according to a federal criminal complaint filed against him in January 2014. 

Investigators thereafter began an extensive money laundering investigation that led to charges against two other defendants.  An alleged straw buyer of the vehicles, SONGHANE TRAORE, of Chicago, is charged with one count of conspiracy to possess a controlled substance with the intent to deliver, one count of conspiracy to commit money laundering, and one count of money laundering.  JEROME B. MARSHALL, of Chicago, is charged with one count of money laundering for allegedly helping Tankson to fraudulently lease the Lincoln Park apartment.

Traore and Marshall have pleaded not guilty to the charges.  Traore’s next court appearance before Judge Kennelly is scheduled for June 3, 2016, at 1:00 p.m., while Marshall will next appear before Judge Kennelly on June 13, 2016, at 10:00 a.m.

Tankson’s guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery Magee, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division; and Eddie T. Johnson, Chicago Police Superintendent.

The government is represented by Assistant U.S. Attorney Kartik K. Raman.

Plea Agreement

ROCKFORD — A Des Plaines man was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for his role in a conspiracy to manufacture and distribute marijuana. 

JEREMIAH N. CLEMENT, 38, of Des Plaines, was sentenced to 10 years in federal prison, to be followed by 5 years of supervised release.  On Oct. 6, 2015, a federal grand jury in Rockford charged Clement and six other individuals, five men and a woman, with conspiring to manufacture, possess and distribute 1,000 or more marijuana plants.  The indictment alleges that between Jan. 2, 2013, and Jan. 6, 2015, the defendants conspired to illegally grow and store marijuana in a warehouse located at 1916 11th Street in Rockford.  The warehouse was destroyed by a fire on Jan. 6, 2015. 

Clement pleaded guilty to the charge on Dec. 18, 2015, admitting that he conspired to manufacture and distribute marijuana with co-defendants GEORGE H. BACUS, 52, of Niles, Ill.; YOUSIF Y. PIRA, 63, of Chicago, Ill.; JUSTIN T. PAGLUSCH, 34, of Ingleside, Ill.; SHLIMON SHIMON, 47, of Chicago, Ill.; CASEY WILLIAMS, 29, of Great Falls, Mont.; and DESTINY FREEMAN, 22, of Palmer, Alaska.  According to the written plea agreement, on Jan. 2, 2013, Bacus purchased the warehouse at 1916 11th Street in Rockford, Ill. on installment contract, using money provided by Shimon or an associate of Shimon.  Shimon, Bacus and Pira used the warehouse to illegally grow and harvest marijuana plants, then process the marijuana sale to others.  Between March and June of 2014, Shimon recruited Clement to join the conspiracy and participate in processing the initial crop.

Clement admitted in the plea agreement that in late July or early August of 2014, a new marijuana crop was planted.  On Sept. 12, 2014, at Shimon’s direction, Clement entered into a contract to purchase the warehouse, and the contract that Bacus had entered into was terminated.  Shimon provided the money to pay for the warehouse and the use of the warehouse was under Shimon’s control.  The plea agreement also states that Shimon retained Bacus to monitor Clement’s activities at the warehouse and report to Shimon.

In addition, the plea agreement states that in August of 2014, Clement recruited Williams to join the conspirators, who in turn recruited Freeman.  Clement paid for Williams and Freeman to travel from Montana to Rockford, using money provided by Shimon.  With Shimon's permission, Clement allowed Williams and Freeman to live in the warehouse while they assisted in the marijuana growing operation, using money from Shimon to pay for food while they lived in the warehouse.  In December of 2014, Clement recruited Paglusch to join the conspiracy.

As further stated in the plea agreement, Shimon provided the plants, equipment and nutrients for growing the new marijuana crop.  Williams and Freeman watered and cared for the marijuana crop as it was growing, and Clement supervised them.  Shimon came to the warehouse for a few hours a day when he was in the area.  Clement, Shimon, Bacus, Williams, Freeman and Paglusch all participated in the processing of the new marijuana crop, which was stored in a vault at the warehouse, with the combination to the lock known by Shimon, but not Clement.  The initial marijuana crop and the new marijuana crop totaled more than 1,000 marijuana plants.  In addition, as stated in the plea agreement, during the period of the conspiracy, Shimon kept a revolver at the warehouse for protection, which Clement possessed from time to time.  At sentencing, Judge Kapala found as an aggravating factor that Clement intentionally set the fire that destroyed the warehouse located at 1916 11th Street on Jan. 6, 2015.

Freeman pleaded guilty on June 1, 2016, and remains free on her own recognizance pending sentencing set for Sept. 15, 2016, at 2:30 p.m.  Freeman faces a maximum sentence of 5 years' imprisonment, a term of supervised release following imprisonment of at least 2 years, and a maximum fine of $250,000.

Bacus and Pira were arrested in April 2015 and released pending trial.  Williams was arrested in October 2015 and is in federal custody pending trial.  Paglusch was arrested this morning in Wichita Falls, Tex., and an initial appearance is pending.  An arrest warrant was issued for Shimon, who is still at large. 

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 is only a charge 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.

The sentencing today was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; Derek Bergsten, Chief of the Rockford Fire Department; and Anthony Scarpelli, Chief of the Skokie, Ill. Police Department.  The Winnebago County Sheriff’s Department Narcotics Unit and Rockford Police Department Narcotics Unit assisted in the investigation. 

The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.

ROCKFORD — The former Winnebago County Purchasing Director pleaded guilty today before U.S. District Judge Frederick J. Kapala to two counts of theft from a program receiving federal funds.  SALLY A. CLAASSEN, 57, of Roscoe, Ill., was an employee of Winnebago County from March 3, 1997, until she resigned on Sept. 11, 2015.  Claassen’s job title prior to her resignation was Purchasing Director.

According to the written plea agreement, as Purchasing Director for Winnebago County, Claassen was responsible for receiving and reviewing invoices submitted by vendors and submitting payment to vendors.  As stated in the plea agreement, from Feb. 25, 2014 through April 27, 2015, Claassen used her position as the approver for payments from Winnebago County to vendors to steal approximately $368,137 from the County.  Claassen admitted that she accomplished this theft by asking two Winnebago County vendors to submit false invoices to Winnebago County for work that was not performed, which Claassen then paid with County funds.  Claassen then directed the two vendors to provide her with checks made out to “Cash” or to “JP Morgan Chase” for the full amounts that the vendors were paid.  As Claassen further admitted, she told the two vendors that she needed them to submit the false invoices and then provide her with the checks for the full amount of the payments to help her allocate Winnebago County money to a project being funded by a charitable organization.  In reality, Claassen stole the money by depositing the checks into her personal bank accounts.  One of the vendors provided Claassen with 5 checks that totaled $45,000.  The other vendor provided Claassen with 7 checks that totaled $323,137.  No money given to Claassen by either vendor was ever used for the purpose for which she told the vendors that it was to be used. 

As further stated in the plea agreement, in her position as Purchasing Director, Claassen  held a Winnebago County-issued credit card that she was authorized to use to make purchases for official County business.  Claassen was required to submit invoices and supporting documentation to the County to demonstrate that items purchased were for County business.  Claassen also had the ability to purchase items for Winnebago County by requesting that Winnebago County issue a check to a particular vendor.  Claassen was required to submit invoices and supporting documentation to Winnebago County to demonstrate that the requested check was to be used to purchase items for Winnebago County business.  Claassen admitted in the plea agreement that from April 15, 2014 to July 1, 2015, she used her Winnebago County-issued credit card and checks from Winnebago County to purchase items for her personal use, including home remodeling items and personal vacations.  Claassen admitted she primarily accomplished this by either using her Winnebago County-issued credit card to make personal purchases and then submitting false or altered supporting documentation so the County would pay for the charges, or modifying or creating false invoices and submitting them to Winnebago County so the County would issue a check for the purchase. 

According to the plea agreement, as an example of using the Winnebago County-issued credit card to accomplish the theft, on Jan. 29, 2015, Claassen used the credit card at a local vendor to purchase granite countertops for her kitchen in the amount of $6,109.  While the sales order for this purchase listed the customer as Claassen at her home address, on Feb. 12, 2015, Claassen submitted an altered version of the sales order to the County listing Winnebago County as the customer with an altered description of the items purchased.

Another example in the plea agreement was that on May 20, 2014, Claassen ordered approximately $13,214 worth of furniture for her home and gift cards from a vendor.  The sales order provided to Claassen noted that the customer was Claassen at her home address and listed various items of furniture that had been ordered.  On the same date, Claassen caused an employee in her department to submit a request for Winnebago County to issue a payment by check to that vendor in the amount of $13,125.  In the plea agreement, Claassen admitted that with the request she submitted an altered sales order from that vendor that listed Winnebago County as the customer with an altered description of the items purchased. 

In total, using these methods, it is the government’s position in the plea agreement that Claassen stole approximately $451,353 from Winnebago County in 2014 and 2015.  In the plea agreement, Claassen reserved the right to dispute this amount.  Claassen also agreed in the plea agreement to the entry of a forfeiture judgment to the United States all right, title, and interest that she has in any property constituting or derived from proceeds obtained, directly or indirectly and further agreed not to contest forfeiture of approximately $292,525 already seized by the United States. 

On each count Claassen faces a maximum sentence of up to 10 years’ imprisonment, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater, and full restitution.  In addition, Claassen faces a term of supervised release of up to 5 years following imprisonment.  Claassen remains free on her own recognizance pending sentencing, which U.S. District Judge Frederick J. Kapala set for September 13, 2016, at 9:30 a.m.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

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

Plea Agreement