Northern District of Illinois

CHICAGO — A Lombard dermatologist was sentenced today to 7 years in federal prison for submitting hundreds of false insurance claims for alleged skin cancer treatment that was unnecessary or never performed.

From 2003 to 2010, DR. ROBERT KOLBUSZ submitted thousands of false claims to Medicare and private insurers, causing them to pay out more than $3.7 million for what Kolbusz said were treatments to destroy pre-cancerous lesions.  In reality, his patients did not have pre-cancerous lesions, and many of the treatments billed by Kolbusz were cosmetic procedures, such as Erbium “lunchtime laser peels,” performed by non-medical professionals from his office.

A jury convicted Kolbusz last year of three counts of wire fraud and three counts of mail fraud.  In addition to the 84-month prison sentence, U.S. District Judge John Z. Lee ordered restitution in the amount of $3,764,381.69.  During today’s sentencing hearing, Judge Lee said the offense was “serious for a number of reasons,” and that it “warranted a significant term of imprisonment.”

Kolbusz, 58, was ordered to begin serving his sentence on Nov. 6, 2015.

Evidence at the four-week trial revealed that Kolbusz had aestheticians in his office perform cosmetic laser treatments on benign skin conditions that normally would not have qualified for insurance coverage.  In bills submitted to Medicare and private carriers, however, Kolbusz fraudulently diagnosed the conditions as being large numbers of pre-cancerous actinic keratosis lesions, and claimed the procedures were needed to destroy them – at a cost of up to $352.40 per treatment.

Eight patients and several of Kolbusz’s employees testified during the trial.  One patient, who was a teenager at the time, testified that Kolbusz’s staff performed routine laser procedures that she was told were to lighten her freckles.  In the patient’s medical records, however, Kolbusz stated that he had destroyed approximately 491 pre-cancerous lesions on her skin – causing Blue Cross Blue Shield of Illinois to pay $4,597 for the treatments.

Kolbusz continued his fraud scheme even after a representative of the American Academy of Dermatology told him in 2007 that he was likely committing fraud, according to evidence at trial.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Lamont Pugh III, Special Agent-in-Charge of the U.S. Department of Health and Human Services Office of Inspector General in Chicago; and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago.

The government was represented by Assistant U.S. Attorneys Stephen Chahn Lee, Abigail Peluso, and Jessica Romero.

CHICAGO — Three Chicago-area men with prior felony convictions have been indicted on federal gun charges for illegally possessing semiautomatic weapons.

THADDEUS JIMENEZ, 36, of Des Plaines, was arrested in Chicago last week while in possession of a loaded Kimber, Sapphire-model, .380-caliber semiautomatic pistol.  He was charged with one count of being a felon-in-possession of a firearm, according to the indictment.  Jimenez was previously convicted of a felony.

JOSE ROMAN, 22, of Chicago, was also arrested in Chicago last week while in possession of a firearm.  The indictment charges Roman with being a felon-in-possession of a firearm for possessing a loaded Mossberg International, 715T-model, .22-caliber semiautomatic rifle.  Roman was previously convicted of a felony.

The indictment against Jimenez and Roman was returned Wednesday afternoon in U.S. District Court in Chicago.  Jimenez and Roman will be arraigned on a date to be set by the Court.

A third defendant, DANTRELL WILLIAMS, 19, was charged in a separate indictment with being a felon-in-possession of a firearm.  Williams, of Chicago, was arrested while in possession of a loaded Romarm, GP WASR-series, semiautomatic rifle, according to the indictment, which was also returned Wednesday.  He was previously convicted of a felony.  Williams is currently scheduled to appear for a detention hearing on Friday at 11:00 a.m. before U.S. Magistrate Judge Jeffrey T. Gilbert.

The charge of being a felon-in-possession of a firearm carries a maximum sentence of ten years in federal prison and a $250,000 fine.

“The United States Attorney’s Office is committed to aggressively using federal gun laws to fight violent crime,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.  “We will prosecute violent offenders with vigor, using whatever federal tools are appropriate, as part of our ongoing partnership with the city and state to protect Chicago’s neighborhoods against violence.”

Mr. Fardon announced the indictments along with Jeffrey A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Garry F. McCarthy, Superintendent of the Chicago Police Department.

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.

The government is being represented by Assistant U.S. Attorneys Kathryn Malizia and Michelle Petersen.

Jimenez & Roman Indictment

Williams Indictment

CHICAGO — The husband-and-wife owners of a Chicago home-healthcare business paid kickbacks to employees and marketers in exchange for referring elderly and disabled patients to the company for unnecessary or non-existent treatment that was funded by Medicare, according to a 23-count federal indictment unsealed today.

HCN Home Healthcare Inc., through its owners, ESTRELLITA DUQUILLA and MIGUEL DUQUILLA, paid kickbacks to employees and marketers to induce the referral of Medicare beneficiaries to HCN, according to the indictment.  The indictment further contends that HCN employees altered nursing reports and patient files to falsely create the appearance that its patients qualified for in-home treatment.  As a result of the kickback and fraudulent billing scheme, Medicare made overpayments to HCN in excess of $6 million, according to the indictment.

The Duquillas, of Des Plaines, were each charged with conspiracy to pay and receive healthcare kickbacks.  Also charged in the conspiracy were four employees of HCN and an outside marketer who is married to an HCN nurse.

The indictment comes amid a lengthy federal investigation that included the execution of a search warrant at HCN’s office.  The investigation was carried out by the Medicare Fraud Strike Force, which consists of agents from the Federal Bureau of Investigation and the U.S. Department of Health and Human Services, and prosecutors from the U.S. Attorney’s Office and the Justice Department’s Fraud Section.  The strike force is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Department of Justice and HHS to prevent fraud and to enforce anti-fraud laws around the country.

In addition to the kickback conspiracy charge, Estrellita Duquilla, 58, was charged with five counts of paying kickbacks to induce referrals of Medicare beneficiaries.  Miguel Duquilla, 60, was charged with two counts of paying kickbacks to induce referrals of Medicare beneficiaries.  The indictment also charges the Duqillas with one count of conspiracy to commit healthcare fraud, and ten counts of Medicare fraud.  The Duquillas are the owners and operators of HCN, which is located at 6288 N. Cicero Ave. in Chicago.  The indictment states that the fraud scheme spanned from 2008 to 2012.

According to the indictment, many of the beneficiaries were not qualified for home-health services, and in several instances never needed or received the care.  In some cases, the employees and marketers paid cash to the patients in exchange for allowing the patients’ information to be used in paperwork submitted to Medicare, the indictment states.

One of HCN’s registered nurses, ZENAIDA DIMAILIG, 78, of Bensenville, solicited and received kickbacks from the Duquillas, in exchange for steering Medicare beneficiaries to HCN, according to the indictment.  Dimailig is charged with one count of conspiracy to pay and receive healthcare kickbacks, and one count of conspiracy to commit Medicare fraud.

HCN’s Quality Assurance Nurse, GRACE MENDEZ, 59, of Des Plaines, put false information in patient files, such as the dates of non-existent nursing visits, knowing this information would be submitted to Medicare as a basis for seeking payments to HCN, according to the indictment.  She is charged with one count of conspiracy to pay and receive healthcare kickbacks, two counts of knowingly and willfully soliciting and receiving a Medicare kickback, one count of conspiracy to commit healthcare fraud, and one count of Medicare fraud.

HCN’s Director of Nursing, DANIEL FAJARDO, 45, of Chicago, is charged with one count of conspiracy to pay and receive healthcare kickbacks, and one count of conspiracy to commit healthcare fraud.   HCN’s nursing assistant, SHERROD HARRIS, 49, of Chicago, is charged with one count of conspiracy to pay and receive healthcare kickbacks, and two counts of knowingly and willfully soliciting and receiving a healthcare kickback.

In addition to the HCN employees, an outside marketer was also charged in the scheme.  ROBERTO JONSON, 58, of Bensenville, was the owner of Berzen Home Care Services Inc., a now-defunct company that was based out of his home.  The charges allege that Jonson, who is Dimailig’s husband, received payments from the Duquillas in exchange for referring non-homebound Medicare beneficiaries to HCN.  Jonson is charged with one count of conspiracy to pay and receive healthcare kickbacks, and one count of conspiracy to commit healthcare fraud.

The indictment was returned last week and unsealed today in advance of the arraignments of Harris and Mendez, which were scheduled for 11:00 a.m. today before U.S. Magistrate Judge Michael T. Mason.  The arraignments of the other defendants will be scheduled by the Court at a later date.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; 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 investigation is ongoing, the officials said.

The healthcare fraud conspiracy and the Medicare fraud counts carry a maximum penalty of ten years in prison and a $250,000 fine.  The kickback and kickback conspiracy counts are punishable by up to five years in prison and a $250,000 fine.  If convicted, restitution is mandatory and the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.  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.

The government is being represented by Assistant U.S. Attorney Renai S. Rodney and Justice Department Senior Trial Attorney Jon M. Juenger.

To report health care fraud or to learn more about the Health Care Fraud Prevention & Enforcement Action Team (HEAT), logon to: StopMedicareFraud.gov.

Indictment

CHICAGO — A father and son schemed with a Chicago attorney and a Lincolnwood businessman to sell $2.9 million in phony mortgages to more than a dozen duped investors, according to a federal indictment unsealed Tuesday.

ALBERT ROSSINI, 67, the owner of Devon Street Investments Ltd., in Lincolnwood, plotted with BABAJAN KHOSHABE, 74, and Khoshabe’s son, ANTHONY KHOSHABE, 33, to fraudulently induce at least 15 victims into purchasing purported mortgage notes on apartment buildings in foreclosure, according to the indictment.  The trio promised that investors would receive rental income from occupants of the buildings, followed by title to the properties at the conclusion of the foreclosure process, the indictment states.  In reality, the trio did not own the mortgage notes, and instead used the victims’ funds to make Ponzi-type payments to other investors and pocket the rest, according to the indictment.

A fourth defendant, THOMAS MURPHY, 61, was a licensed Illinois attorney who claimed to validate the sale of the mortgage notes through a phony “Guaranty Agreement” that he prepared and gave to Rossini to present to the victims, according to the indictment.

The 14-count indictment was filed Thursday and unsealed this morning.  The four defendants are scheduled to appear for an arraignment at 3:00 p.m. today before U.S. Magistrate Judge Mary M. Rowland.

Rossini, of Skokie, was charged with eleven counts of wire fraud and three counts of mail fraud.  Babajan Khoshabe, of Chicago, was charged with eight counts of wire fraud and three counts of mail fraud.  Anthony Khoshabe, of Skokie, was charged with five counts of wire fraud and three counts of mail fraud.  Murphy, of Chicago, was charged with eleven counts of wire fraud and three counts of mail fraud.

According to the charges, the scheme has been ongoing since approximately September 2011.  Rossini and Babajan Khoshabe allegedly told prospective investors that Anthony Khoshabe managed the mortgaged properties through his position at Reliant Management, which shared office space with Devon Street Investments.  Anthony Khoshabe would purportedly collect monthly rents from the buildings’ occupants and turn them over to investors.  What the defendants failed to reveal is that Reliant Management did not manage the properties, and Anthony Khoshabe had no legal ability to collect the rents, the indictment states.  The periodic payments made to investors were actually derived from funds that other investors had pledged into the scheme.

The indictment seeks forfeiture of $2,922,564 in cash, three certificates of deposit totaling $700,000, two properties in Skokie and one property on the North Side of Chicago.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Antonio Gómez, Inspector in Charge of the U.S. Postal Inspection Service in Chicago; Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago; and Cook County Sheriff Thomas J. Dart.

The wire and mail fraud counts carry a maximum penalty of 20 years in prison and a $250,000 fine, plus mandatory restitution.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

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.

The government is being represented by Assistant U.S. Attorney Erik A. Hogstrom and Special Assistant U.S. Attorney William Novak.

Individuals or corporate entities who believe they could be a victim of the scheme charged in the indictment are encouraged to contact the FBI’s Chicago office at (312) 421-6700.

Indictment

CHICAGO —A Chicago woman sought federal tax refunds through a series of fraudulent returns she filed in the names of other people, including a number of nursing-home residents who had no knowledge that their personal information was being used, according to a federal indictment announced today.

SHANTELL WINTERS, 28, prepared and electronically filed a dozen individual federal income tax returns that were made out in the names of actual persons whose identities she had acquired, according to the 16-count indictment.  The returns claimed false amounts of income, deductions and losses, including phony wages, withholdings and education credits, the indictment states.

The scam lasted from late 2009 or early 2010 until the middle of 2012, according to the indictment, which was returned Thursday in federal court in Chicago.

Winters was charged with 12 counts of wire fraud, one count of filing a false claim against the United States, and three counts of identity fraud.  An arraignment has been scheduled for Aug. 27, 2015, at 1:30 p.m. before U.S. District Judge Matthew F. Kennelly.

According to the indictment, some of the individuals knowingly allowed Winters to use their information to file returns and claim refunds in their names.  However, several others - including certain residents of a nursing home facility - had no knowledge that their identities had been used in the scheme, according to the indictment.  In addition to the personal information of the individuals, the indictment states that Winters also used the electronic identification numbers of corporate entities to create fraudulent W-2 Forms that purportedly had been issued by those businesses.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigation in Chicago.

Each wire fraud count carries a maximum sentence of 20 years in prison.  The count of filing a false claim carries a maximum sentence of five years in prison, a $250,000 fine, and mandatory restitution.  Each count of identity fraud is punishable by 5 years in prison.  If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The 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 being represented by Assistant U.S. Attorney Daniel W. Gillogly.

Indictment

CHICAGO — A Wheeling chiropractor and his brother and father have been charged in a federal indictment with scheming to bill  insurance carriers for treatment that was medically unnecessary or never performed.

DR. VLADIMIR GORDIN JR., along with his father, VLADIMIR GORDIN SR., and his brother, ALEXSANDER GORDIN, operated Gordin Medical Center S.C., a chiropractic group located at 350 E. Dundee Road in Wheeling.  The trio used the company to falsely bill for medical services that weren’t provided, and fabricated their patients’ medical records to cover up the scam, according to the 21-count indictment returned yesterday in federal court in Chicago.

In some cases, patients knew of the overbilling and were incentivized to participate by having their deductibles met at no cost to them or by sharing in a portion of the overbilling proceeds via checks provided to them by the Gordins, according to the indictment.  Over a six-year period, the Gordins’ scheme bilked insurance carriers out of more than $10.8 million, the indictment states.

Vladimir Gordin Jr., 45, of Northbrook, and Vladimir Gordin Sr., 68, of Riverwoods, are each charged with 18 counts of health care fraud and three counts of aggravated identity theft.  Alexsander Gordin, 32, of Northbrook, is charged with 14 counts of health care fraud.

Two other defendants are also charged in the indictment: ALINA LEVIT, also known as “Alona” or “Aloyna,” who worked for Gordin Medical Center as the office manager; and MICHELLE KOBRAN, who owned and operated Ultrasound Mobile Service Ltd., in Vernon Hills.

Levit, 45, of Vernon Hills, assisted the Gordins with falsifying medical records and creating phony “sign in” sheets, which falsely represented that patients were physically present and received certain health-care services on a given day, when, in fact, no such treatment was rendered, according to the indictment.  Levit is charged with 14 counts of health care fraud.

Kobran, 67, of Vernon Hills, billed insurance companies for medically unnecessary ultrasounds that were performed on patients referred to her company by the Gordins, according to the indictment.  Kobran then kicked back a portion of the insurance proceeds to the Gordins, the indictment states.  Kobran is charged with four counts of health care fraud.

From 2006 through approximately November 2012, Gordin Medical Center and Ultrasound Mobile Service submitted bills totaling $28,775,000, causing the carriers to pay $10,847,000, the indictment states.

All five defendants will be arraigned on future dates to be set in U.S. District Court in Chicago.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor’s Office of Inspector General in Chicago; and Antonio Gómez, Inspector in Charge of the U.S. Postal Inspection Service in Chicago.

The health care fraud counts carry a maximum penalty of ten years in prison and a $250,000 fine, while the aggravated identity theft counts are punishable by a maximum sentence of 20 years’ imprisonment and a statutory mandatory minimum sentence of two years, plus a $250,000 fine.  If convicted, restitution is mandatory and the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

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.

The government is being represented by Assistant U.S. Attorney Heather McShain.

To report health care fraud, logon to: StopMedicareFraud.gov.

Indictment

CHICAGO — The former owner and CEO of a sports memorabilia auction house was sentenced Thursday to 20 months in federal prison for using phony bids to fraudulently inflate the price of his company’s listings at auction.

As the owner and chief executive officer of Mastro Auctions, WILLIAM MASTRO and several colleagues placed fake bids to drive up the prices of various listings, a process known as “shill bidding.”  Mastro also sold phony and altered memorabilia, including a Honus Wagner baseball card whose sides Mastro had cut with a paper-slicing machine, and a purported 1869 Cincinnati Red Stockings trophy ball that Mastro knew contained paint manufactured after World War II.

Mastro, 62, of Palos Park, pleaded guilty in 2013 to one count of mail fraud.  In addition to the 20-month prison term, U.S. District Judge Ronald A. Guzman noted that Mastro had already satisfied the court-imposed fine of $250,000.  Judge Guzman ordered Mastro to begin serving his sentence no later than Nov. 30, 2015.

“The long-running and systematic nature of the scheme undermines confidence in the auction house and sports-memorabilia industries, and calls into question the true value of merchandise,” said Assistant U.S. Attorney Steven J. Dollear.  “The defendant’s ultimate goal was to beat the competition and garner more business for his auction house, and, in the end, more money for himself.”

Mastro is one of four former Mastro Auctions employees, including three executives, who have pleaded guilty in connection with the fraud scheme.  Prior to closing in 2009 amidst the federal investigation, Mastro Auctions had maintained offices at different times in Oak Brook, Willowbrook and Burr Ridge.

The T206-series Wagner card is considered one of the world’s most expensive trading cards.  Mastro admitted in the plea agreement that he cut the card’s side borders, and then concealed this information when he sold the card in 1987.  Mastro again failed to disclose his alteration even after participating in subsequent auctions of the card in 1991 and 2000.  The sale in 2000 produced a purchase price of more than $1 million, according to the plea agreement.  Mastro also failed to disclose that he cut the Wagner card again in 1992, even though he was aware that the card had been submitted to become the first baseball card assigned a grade based on the condition of the card.

Mastro sold the alleged 1869 Cincinnati Red Stockings trophy ball to a collector in 2006 for $62,000, even though Mastro was aware that the trophy ball had previously been returned to the auction house by a prior buyer who had conducted laboratory testing on it.  The testing had shown that the trophy ball contained paint that was manufactured after World War II, casting doubt on the ball’s authenticity.  Mastro did not inform the 2006 collector of the laboratory testing.

Mastro Auctions, which also operated under the names Mastro Fine Sports and Mastro Net, specialized in sports memorabilia but also featured coins, art, and Americana collectibles.  Most items were consigned to Mastro Auctions by their owners, but the house also owned some of the items it sold.  Mastro had sold the company in 2004 but stayed on as its chairman and chief executive officer until its closure.

Mastro admitted in a plea agreement that the shill-bidding scheme spanned from 2002 to 2009.  The scam involved submitting phony bids to artificially drive up the price of online and live auctions.  Mastro admitted that he or one of several colleagues would place the shill bids as needed to inflate the price and to protect the interests of consignors and sellers – at the expense of unwitting bidders.  If the shill bids ever won the item being auctioned, Mastro or his colleagues would cancel the sale.

Three other former employees of Mastro Auctions have admitted their roles in the scheme.  Doug Allen, 52, of Crete, served as president and chief operating officer from 2001 to 2009.  He pleaded guilty to one count of wire fraud.  Mark Theotikos, 54, of Addison, worked for Mastro Auctions from 1996 to 2009 as vice president of auction operations and acquisitions.  He pleaded guilty to one count of mail fraud.  Allen and Theotikos are scheduled to be sentenced by Judge Guzman on Oct. 14, 2015.  William Boehm, 66, of Ballwin, Missouri, worked for Mastro Auctions in information technology. He pleaded guilty to one count of making false statements to agents of the Federal Bureau of Investigation who were probing the company’s practices.  Boehm was given two years of probation.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and António Gomez, Inspector in Charge of the U.S. Postal Inspection Service in Chicago.

The government is being represented by Mr. Dollear and Assistant U.S. Attorney Derek R. Owens.

CHICAGO — The former chief executive officer of Chicago’s first red-light camera vendor pleaded guilty to a federal bribery charge Thursday.

As the CEO of Redflex Traffic Systems Inc., KAREN FINLEY funneled cash and other personal financial benefits to a City of Chicago official and his friend, knowing that the payments would help persuade the city to award red-light camera contracts to Redflex, according to a plea agreement.  The benefits included golf trips, hotels and meals, as well as hiring the city official’s friend as a highly compensated contractor for Redflex, according to the plea agreement.

The benefits flowed over a nine-year period, from 2003 to 2011, during which time the city expanded the Digital Automated Red Light Enforcement Program by awarding millions of dollars in contracts to Phoenix-based Redflex, the plea agreement states.

Finley, 55, of Cave Creek, Ariz., pleaded guilty to one count of conspiracy to commit bribery in a federal program.  U.S. District Judge Virginia Kendall scheduled a sentencing hearing for Feb. 18, 2016.  Finley faces a maximum sentence of 5 years in prison, a maximum fine of $250,000 or twice the gross gain or gross loss from the offense, and mandatory restitution.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John A. Brown, Acting 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 Stephen Boyd, Acting Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

According to the plea agreement, Redflex first began competing for the Chicago contract in early 2003, while Finley was then Redflex’s vice president of operations.  In the course of the competition, Finley learned that John Bills, who was then an assistant Chicago transportation commissioner in charge of the city’s red-light camera program, was championing Redflex by providing pointers and inside information to Redflex, the plea agreement states.

After Redflex was awarded its first Chicago contract in approximately late May 2003, Finley hired Bills’ friend Martin O’Malley as a contractor for Redflex, in an effort to ensure that Bills would continue to provide assistance to Redflex in future contract negotiations with the city.  Finley admitted in the plea agreement that she knew O’Malley was a friend of Bills and that it was important to Bills that Redflex hire him.  Finley personally signed O’Malley’s contract, which included provisions for lucrative increases in O’Malley’s compensation as new red-light cameras were added, according to the plea agreement.

After Finley became CEO of Redflex in 2007, O’Malley’s commissions escalated and Bills continued to assist the company, including having at least one red-light contract “sole-sourced” to Redflex, the plea agreement states.  Finley states in the plea agreement that she knew Redflex was also paying personal expenses for Bills in order to buy his influence and expand Redflex’s business with the city.  These expenses included meals, golf outings, rental cars, airline tickets to Phoenix, rooms at the Biltmore Hotel and other entertainment, according to the plea agreement.

Redflex’s technology uses cameras to automatically record and ticket drivers who run red lights.  Between 2004 and 2008, the city paid Redflex approximately $25 million, according to the indictment against Finley, Bills and O’Malley.  Bills was a voting member of the city’s Request For Proposal evaluation committee that recommended awarding the contracts to Redflex, the indictment states.  In February 2008, the city awarded the “sole-sourced” contract to Redflex, paying the company approximately $33 million, according to the indictment.  The city followed up that contract with another one the same month – agreeing to pay Redflex approximately $66 million for the installation of nearly 250 additional red-light cameras.

Bills, 54, of Chicago, was indicted on nine counts of mail fraud, three counts of wire fraud, three counts of federal program bribery, three counts of filing a false federal income tax return, and one count each of extortion and conspiracy to commit federal program bribery.  He has pleaded not guilty and is scheduled to proceed to trial on Jan. 11, 2016, before Judge Kendall.  Bills retired from the city in 2011.

O’Malley, 74, of Worth, pleaded guilty in December to one count of conspiracy to commit bribery in a federal program.  No sentencing date has been set.

The government is represented by Assistant United States Attorney Laurie J. Barsella.

Plea Agreement

CHICAGO — A Northbrook man pleaded guilty Thursday to charges he illegally obtained clean titles for salvaged and rebuilt vehicles and put them to use as taxicabs on the streets of Chicago.

As the owner of Seven Amigos Used Cars Inc., ALEXANDER IGOLNIKOV fraudulently obtained paperwork to conceal the history of the damaged cars in order to bypass City of Chicago laws that prohibit the use of salvaged and rebuilt vehicles as taxicabs, according to a written plea agreement.  Federal prosecutors contend that Igolnikov, who also served as vice president of Chicago Elite Cab Corp., caused approximately 180 impaired vehicles to be used as taxicabs on Chicago streets after they were falsely given clean titles in Indiana and Illinois, according to the plea agreement.

Igolnikov’s scheme, which spanned from 2007 through April 2010, was uncovered in an investigation by federal authorities and the City of Chicago Inspector General’s Office.

Igolnikov, 68, of Northbrook, pleaded guilty to one count of conspiracy to transport, receive and possess a counterfeit security.  He faces a maximum sentence of 5 years in prison and a maximum fine of $250,000 or twice the gross gain or gross loss from the offense.  U.S. District Judge Edmond E. Chang scheduled a sentencing hearing for November 19, 2015, at 10:00 a.m.  As part of the plea agreement, Igolnikov reserved the right to dispute the total number of vehicles involved in the scheme.

After procuring from online auction sites significantly damaged cars with salvage titles, Igolnikov and his associates fraudulently obtained “rebuilt” titles for those damaged vehicles by submitting false paperwork– including affidavits with the forged signature of an Indiana law enforcement officer – to the Indiana Bureau of Motor Vehicles, the plea agreement states.  The vehicles were then transported to the Chicago business of Chicago Carriage Taxi Company, which was also used by Seven Amigos Used Cars.  After obtaining the Indiana rebuilt title for a salvaged vehicle, Igolnikov and his associates placed a sticker over the “rebuilt” section of the Indiana certification and then used that title to obtain a clean Illinois title from the Illinois Secretary of State’s Office, according to the plea agreement.  Igolnikov purchased the newly certified vehicles in the names of Seven Amigos Used Cars, Chicago Elite Cab and other related corporate entities, the plea agreement states.

Igolnikov and his business associates, including Chicago Elite Cab, operated the fraudulently certified vehicles as taxicabs in Chicago – in violation of the city’s medallion laws, which prohibit any vehicle that was ever issued a “salvage” or “rebuilt” title in any state from being used as a taxicab, the plea agreement states.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph M. Ferguson, Inspector General for the City of Chicago.

The government is represented by Assistant United States Attorneys Margaret Schneider and Steven Dollear.

Plea Agreement

CHICAGO — A Naperville businessman who fraudulently coaxed his clients into investing millions of dollars in bogus Turkish bonds was sentenced Thursday to seven years in federal prison.

JOHN T. BURNS III persuaded a dozen clients of USA Retirement Management Services to invest more than $3.3 million in Turkish bonds on the promise of lucrative returns.  Burns fraudulently told his clients, many of whom were retirees, that he had substantial experience investing money on behalf of clients, that he and his parents were personally invested in the bonds, and that the profitable returns in those investments were providing financial security to him and his family.  In reality, Burns was a mortgage salesman with no professional investment experience, and his family hadn’t invested in the Turkish bond program because it didn’t exist.

“You were a good salesman, and they bought it,” U.S. District Judge Charles P. Kocoras said in pronouncing the 84-month sentence.  Judge Kocoras also ordered Burns, 56, of Naperville, to pay $3,383,113 in restitution.

A jury in November convicted Burns on two counts of wire fraud and three counts of mail fraud.  His scam was part of a larger Ponzi-type scheme involving two principal members of USA Retirement Management Services – ROBERT PRIBILSKI and MAHMUT ERHAN DURMAZ, according to a federal indictment returned against the trio.  Taken together, the total scheme defrauded 120 defendants out of $28 million, according to the indictment.

Pribilski, 57, of Lisle, pleaded guilty last year to one count of wire fraud and is awaiting sentencing.  Durmaz, 45, formerly of Streamwood and Los Angeles, Calif., fled the United States in 2010 and is a fugitive believed to be residing in Turkey.  USA Retirement Management Services, which had offices in Oak Brook Terrace and southern California, was shut down by the U.S. Securities and Exchange Commission in 2010.

“Despite having no prior experience in estate planning or handling investments for clients, the defendant held himself out as an experienced, certified estate planner” to gain access to financial records and to pitch the Turkish bond investment to clients, Assistant U.S. Attorney Ryan S. Hedges argued in the government’s sentencing memorandum. “The defendant’s motive to lie was greed; pure and simple,” argued Hedges, noting that Burns received substantial commissions from USA Retirement Management Services for each client who pledged funds into the bogus bonds.

Evidence at Burns’ week-long trial revealed that he identified potential investors by purporting to provide estate planning seminars in Illinois and California.  Burns sent out mass mailings to lure people to the seminars, including a postcard that promoted his presentation and offered a free meal to attendees.  Burns then used the seminars to schedule follow up interviews with prospective clients, during which he pitched what he claimed was a uniquely profitable investment opportunity in the Turkish bonds.  What Burns didn’t tell the clients is that the Turkish bonds didn’t exist, and that their investments were being used to pay other investors in a Ponzi-type scheme.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The government is being represented by Mr. Hedges and Assistant U.S. Attorney Matthew F. Madden.

The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement.  The task force is working to investigate and prosecute significant financial crimes, and to combat discrimination in the lending and financial markets.  For more information on the task force, visit: www.StopFraud.gov.

ROCKFORD — A Rockford man was arrested today for illegally possessing a firearm.  CLIFFORD HORTON, 27, of Rockford, Ill., was charged yesterday by a federal grand jury in Rockford for possessing a .380 caliber pistol as a convicted felon.  Horton is scheduled to be arraigned today at 1:00 p.m. before U.S. Magistrate Judge Iain D. Johnston in federal court in Rockford.

The charge of being a felon in possession of a firearm carries a maximum penalty of up to 10 years in federal prison 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.

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

The arrest 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 Bureau of Alcohol, Tobacco, Firearms & Explosives; Gary Caruana, Winnebago County Sheriff; and, Chet Epperson, Rockford Police Chief.

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

Indictment

CHICAGO — An Aurora man pleaded guilty in federal court Tuesday to charges he attempted to travel overseas to join a jihadist militant group in Syria.

ABDELLA AHMAD TOUNISI, 21, was arrested at O’Hare International Airport in April 2013 as he attempted to board a flight bound for Istanbul, Turkey.  Tounisi had spent four months conducting online research related to overseas travel and violent jihad, focusing specifically on Syria and the Jabhat al-Nusrah terrorist group.

Tounisi had made online contact with an individual he believed to be a recruiter for Jabhat al-Nusrah.  Tounisi and the purported recruiter exchanged a series of emails in which Tounisi shared his plan to get to Syria by way of Turkey, as well as his willingness to fight for the jihadist cause, according to a written plea agreement.

Tounisi pleaded guilty to one count of attempting to provide material support to a foreign terrorist organization.  He faces a maximum of 15 years in prison and a $250,000 fine.  U.S. District Judge Samuel Der-Yeghiayan scheduled a sentencing hearing for Dec. 9, 2015, at 10:30 a.m.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The investigation was conducted by the Chicago FBI’s Joint Terrorism Task Force, which is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies.  The Justice Department’s National Security Division assisted in the investigation.

“Foreign terrorist groups threaten the safety of the United States,” Mr. Fardon said.  “The Joint Terrorism Task Force should be commended for uncovering this plan and preventing a terrorist organization from enlisting a new member.”

Jabhat al-Nusrah is listed by the U.S. Department of State as an alias for al-Qa’ida in Iraq (AQI), a designated foreign terrorist organization.  During online exchanges with the purported recruiter, Tounisi said he planned to travel from Istanbul to the Turkish city of Gaziantep, which lies near the border of Turkey and Syria, and then in to Syria, according to the plea agreement.

Tounisi, who is a U.S. citizen, requested an expedited passport and purchased an airline ticket for the flight from Chicago to Istanbul.  He arrived at O’Hare on the evening of April 19, 2013, and was arrested after passing through security in the international terminal.

The government is represented by Assistant United States Attorneys William Ridgway and Barry Jonas.

Plea Agreement

CHICAGO — The former president of a Southwest Side construction company paid off-the-books cash wages to workers and under-reported their hours as part of a scheme to defraud the benefit funds of the employees’ labor union, according to a federal indictment unsealed Friday.

While serving as president of My Baps Construction Corp., YASHVANT C. PATEL paid less-than-union-scale wages to dozens of employees, including illegal aliens, in order to reduce the employer contributions to the benefit funds of the Construction and General Laborers’ District Council of Chicago and Vicinity, according to the indictment.  Patel falsely reported that My Baps and a sister company, Vijay Construction Corp., owed approximately $600,000 less to the benefit funds and approximately $1.3 million less to the companies’ employees than what was required by collective-bargaining agreements with the union, the indictment states.

Patel, 59, of St. Charles, was arrested Friday morning.  He is scheduled to make an initial court appearance at 11:30 a.m. today before U.S. Magistrate Judge Daniel G. Martin in Chicago.

The indictment charges Patel with four counts of mail fraud and four counts of making false statements in documents required to be kept pursuant to the Employee Retirement Income Security Act (ERISA).  The indictment seeks forfeiture from Patel of $1.9 million.

From January 2009 through October 2010, Patel controlled the daily operations and finances of My Baps and Vijay, both of which operated as concrete and asphalt contractors while sharing a principal place of business at 7601 S. Kedzie Ave. in Chicago, the indictment states.  Patel had authority over the bank accounts of both companies, and he approved expenditures to outside entities, including monthly payments to the benefit funds, according to the indictment.  The benefit funds, in turn, provided union members with pension, health and training benefits.  Pursuant to collective-bargaining agreements, My Baps and Vijay were required to pay their employees certain wages, and to provide the benefit funds with monthly remittance reports identifying the hours worked and the total contribution due for each covered employee, according to the indictment.

The indictment charges that Patel under-reported approximately 33,000 hours of work performed by his employees, some of whom were not lawfully entitled to work in the United States, resulting in purportedly lower employer contributions into the union’s benefit funds.  Patel paid many of these workers in under-the-table cash payments, at wages that were less than what was required by the collective-bargaining agreements, the indictment states.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor’s Office of Inspector General in Chicago, Section of Labor Racketeering & Fraud Investigations; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

Each count of mail fraud carries a maximum sentence of 20 years in prison, a $250,000.00 fine and mandatory restitution.  Each count of making false statements in ERISA documents carries a maximum sentence of five years in prison, a $250,000 fine, and mandatory restitution.  If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The 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 United States Attorney Christopher McFadden.

Indictment

CHICAGO — The chief executive officer of Chicago-based Home Physician Services LLC was arrested Thursday on charges that he billed Medicare for up to $1.2 million in fraudulent or non-existent services purportedly provided to the elderly and homebound.

HENRY SMILIE, 54, of Lake Zurich, was taken into custody Thursday morning.  At the same time, federal agents executed search warrants at the Chicago and Schaumburg offices of Home Physician Services, where Smilie serves as chief executive officer.  He was charged with Medicare fraud in a federal criminal complaint that was unsealed after his arrest.

The charges against Smilie are part of an ongoing investigation into a scheme to fraudulently increase Medicare bills for doctors of home health patients for care that did not qualify for reimbursement or simply wasn’t performed at all.  According to a federal affidavit filed with the complaint, doctors employed by Smilie billed Medicare for treatment provided to elderly patients who were supposedly confined to their homes, enabling his company to claim physician fees for in-home treatment.  In reality, the patients were not confined to their homes and thus were not qualified to receive the in-home services, according to the affidavit.  From February 2012 to July 2014, Medicare paid Home Physician Services $1.2 million for Care Plan Oversight, the billing code for doctor supervision of treatment of a home-health patient, the affidavit states.

Smilie is scheduled to make an initial appearance at 2:00 p.m. this afternoon before U.S. Magistrate Judge Daniel G. Martin.  The Medicare fraud count carries a maximum penalty of 10 years in prison, a $250,000 fine and mandatory restitution.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The arrest and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and 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.

“Home health care fraud carries a very high price tag in our communities,” Mr. Fardon said.  “Our partners at the federal, state and local level are committed to rooting out and combatting fraud, waste and abuse in the home health care system.”

According to the affidavit, Home Physician Services, whose principal office is located at 6002 N. Keating Ave. in Chicago, arranges in-home visits for elderly and homebound patients, and contracts with doctors who perform house calls and oversee the patients’ treatment plans.  The physicians assign their bill-collecting rights to Home Physician Services, in return for being paid directly by the company.  As part of the scheme, Smilie reported to Medicare that his physicians had performed services for the patients, when, in fact, little or no such treatment was rendered, the affidavit states.

According to the affidavit, federal agents have interviewed several current and former employees of Home Physician Services, including some who claimed to have reported fraudulent billing practices to Smilie before they were contacted by federal agents.  One former employee, identified in the affidavit as “Individual F,” reported to agents that Smilie instructed him on how to complete the Care Plan Oversight paperwork so that the company could bill the maximum amount to Medicare – even if the treatment was not fully performed, the affidavit states.  Another former employee of Home Physician Services – identified in the affidavit as “Individual H” – said the company performed a routine swab of each patient and then billed $1,000 to Medicare for each swab, according to the affidavit.

Individual F told agents Smilie stressed to employees that the minimum duration of the purported treatment needed to add up to 30 minutes, which is the barometer for triggering maximum payment by Medicare for certain Care Plan Oversight service, according to the affidavit.  “Individual F told agents that Smilie instructed him to find whatever he could in the patient file to use to document the CPO, and if he did not find enough events to total 30 minutes, to just ‘make it up,’” the affidavit states.

The affidavit goes on to state that Individual F told agents that home-health agency workers from outside entities, such as nurses and therapists, called Smilie to get signed physician orders for treatment.  Individuals F and H said they saw Smilie using rubber stamps of physicians’ signatures to create those orders, according to the affidavit.  Individual F said that when he notified Smilie that the rubber stamping of physicians’ signatures may be illegal, Smilie “laughed and said that Home Physician Services’ CPO activities were also illegal,” the affidavit states.

As part of the investigation, a confidential source posed undercover as a 71-year-old Medicare recipient, according to the affidavit.   Although able-bodied and not confined to his home, the confidential source was certified as homebound by Home Physician Services, the affidavit states.  During secretly recorded visits by physicians from Home Physician Services, the confidential source is seen walking outside of his home to tend to his dogs, and explaining to the doctors that he enjoys gardening and visiting friends outside the home, the affidavit states.  The confidential source received several house calls from doctors at Home Physician Services, who continued to certify him as homebound in bills submitted to Medicare.

The Medicare Fraud Strike Force began operating in Chicago in February 2011, and consists of agents from the FBI and HHS-OIG, working together with prosecutors from the U.S. Attorney’s Office and the Justice Department’s Fraud Section.  The strike force is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Defendants have been charged locally in health care fraud cases since the strike force began operating in Chicago.

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 being represented by Assistant U.S. Attorney Renato Mariotti.

To report health care fraud or to learn more about the Health Care Fraud Prevention & Enforcement Action Team (HEAT), logon to: StopMedicareFraud.gov.

Complaint

CHICAGO — The former chief operating officer of Sacred Heart Hospital was sentenced Friday to 21 months in prison for arranging payoffs to doctors in exchange for referring patients to the now-shuttered facility on Chicago’s West Side.

CLARENCE NAGELVOORT, 60, of Chicago, conspired with other hospital executives to pay kickbacks and bribes to doctors to induce the referrals.  The payoffs were disguised in a number of ways, including compensation for consulting work, instructional services and lease agreements, and through the provision of free professional staff.

A jury convicted Nagelvoort in March of one count of conspiracy to violate the federal healthcare anti-kickback statute, and 11 counts of paying kickbacks for patient referrals.  In addition to the prison term, U.S. District Judge Matthew F. Kennelly ordered Nagelvoort jointly liable for an $8.48 million forfeiture with his co-conspirators, EDWARD NOVAK and ROY PAYAWAL.

Novak, of Park Ridge, was the hospital’s former owner and chief executive officer.  He was sentenced Wednesday to 54 months in prison.  Payawal, of Burr Ridge, served as the hospital’s chief financial officer.  Judge Kennelly sentenced Payawal on Thursday to 12 months and one day in prison.  Other convicted executives, including the chief operating officer who succeeded Nagelvoort and the Vice President of Geriatrics, are awaiting sentencing.

The hospital executives are among nine defendants convicted in a multi-year investigation of Sacred Heart, a 119-bed acute care facility at 3240 West Franklin Boulevard in Chicago.  From 2001 through April 2013, the executives conspired to pay kickbacks and bribes to physicians to induce them to refer patients to the hospital for services that would be reimbursed by Medicare and Medicaid.  Evidence at trial revealed that hospital administrators tried to conceal the kickbacks by creating sham professional and lease agreements with doctors.  The hospital closed in 2013 in the aftermath of the criminal indictments.

The Sacred Heart 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 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.

“It is illegal for hospitals and other health care providers to pay for patient referrals,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.  “We will continue to pursue these cases through our investigative partnerships with federal, state and local authorities.”

Mr. Fardon announced today’s sentence along with 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 Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

In addition to Nagelvoort, Novak and Payawal, the prior convictions include:

Dr. PERCY CONRAD MAY JR., of Chicago, a physician who practiced at Sacred Heart.  His sentencing is scheduled before Judge Kennelly on Sept. 24, 2015, at 1:30 p.m.

Dr. SUBIR MAITRA, of Chicago, a physician who practiced at Sacred Heart.  He was sentenced by Judge Kennelly in 2014 to six months in prison.

Dr. JAGDISH SHAH, of Oak Brook, a physician who practiced at Sacred Heart.  His sentencing will be set at a future date to be determined by Judge Kennelly.

ANTHONY J. PUORRO, formerly of Chicago, who was Sacred Heart’s chief operating officer after Nagelvoort.  His sentencing will be set at a future date to be determined by Judge Kennelly.

NOEMI VELGARA, of Chicago, who was Sacred Heart’s vice president of geriatric services.  Her sentencing will be set at a future date to be determined by Judge Kennelly.

Dr. SHANIN MOSHIRI, also known as “Shawni Moshiri,” of Chicago, a physician who practiced at Sacred Heart.  Dr. Moshiri is scheduled to be sentenced by Judge Kennelly on Oct. 21, 2015, at 1:30 p.m.

The government is being represented by Assistant United States Attorneys Joel Hammerman, Ryan Hedges, Kelly Greening, Diane MacArthur, and Brian Wallach.

WASHINGTON – A federal court has permanently barred a Bolingbrook, Illinois, woman and her tax preparation business from preparing federal tax returns for others, the Justice Department announced today.

The civil injunction order prohibits Judy Brooks and Judy Brooks & Associates Financial Services Corporation (JBA) from acting as a tax return preparer and from continuing to operate a tax preparation business.  Brooks agreed to entry of the injunction by U.S. District Court Judge Samuel Der-Yeghiayan of the Northern District of Illinois.

According to the complaint, Brooks prepares returns containing false expenses from non-existent businesses and claiming head of household filing status for customers who were ineligible.  In addition, the complaint alleges that Brooks fabricates tax credits, including education credits, child and dependent care credits, and residential energy credits.  These actions resulted in inflated tax refunds to which her customers were not entitled.

The complaint alleges the Internal Revenue Service (IRS) examined 59 income tax returns that Brooks or JBA prepared for tax years 2010 through 2013, and of those returns, 100 percent underreported the customer’s tax due.  The IRS calculated a deficiency of approximately $6,729 per examined return, according to the suit.

The injunction order requires Brooks to provide the United States with a list of her customers since 2010, and to send a copy of the court’s injunction order to all customers for whom she prepared returns.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015.  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 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 here.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Injunction

CHICAGO — Two dozen defendants are facing federal drug charges after a two-and-a-half-year investigation uncovered their roles in trafficking wholesale amounts of cocaine and heroin and distributing it in the Chicago area and Wisconsin.

Agents from the Federal Bureau of Investigation and Drug Enforcement Administration assigned to the Chicago Strike Force, seized 77 kilograms of cocaine and 138 grams of heroin during the course of the investigation, which was dubbed “Operation Alley Cat.”  Authorities exposed the trafficking rings through the use of wiretapped cellular phones and extensive surveillance.

Several of the defendants were arrested Wednesday morning.  Two kilograms of cocaine, a half kilogram of heroin and two guns were seized during the arrests.

The defendants were charged in two separate criminal complaints filed Monday in U.S. District Court and unsealed following the arrests.  They will begin making initial court appearances this afternoon before U.S. Magistrate Judge Sidney I. Schenkier in Chicago.

According to affidavits filed in support of the arrests, the investigation revealed that two separate networks of drug traffickers were operating in the Chicago area and Wisconsin.

The Cruz Organization

The affidavits allege that LUIS ANTONIO CRUZ, 48, of Des Plaines, and JULIO SANTIAGO, 41, of Chicago, worked with narcotics brokers who had obtained wholesale quantities of cocaine and heroin from suppliers.  The pair then distributed smaller quantities of the narcotics to customers on consignment, a practice known as “fronting,” and collected proceeds from the customers following the sales, according to the affidavits.  Once the drugs were sold, Cruz and Santiago made arrangements to pay the suppliers and the brokers, the affidavits state.

Cruz and Santiago used various city and suburban locations to store, process and package the cocaine and heroin, according to the affidavits.  These locations included two residences in Des Plaines, one of which belonged to Cruz and the other to a co-defendant, ANTONIO GRIMALDO, 56; and the Chicago homes of Santiago and a co-defendant, CRISTINO MERCED, 51, both of which were located in the Belmont Cragin neighborhood on the Northwest Side, the affidavits state.

The charges allege that Cruz’s brother, CARLOS ALBERTO CRUZ-CARRERA, 42, helped Cruz with pickups and deliveries of heroin and by counting the proceeds from the sales.  Cruz-Carrera is a resident of Puerto Rico but lived with his brother in Des Plaines during his involvement in the scheme, authorities said.

The affidavits describe a wide-ranging network of alleged suppliers, brokers and sellers within the Cruz Organization.

JOEL CHAVEZ, 53, and EMMANUEL FERNANDEZ, 34, obtained wholesale quantities of cocaine from a supplier and delivered it to Cruz on credit, the charges allege.  After Cruz and Santiago diluted, re-packaged and re-sold the cocaine to others, Cruz delivered proceeds from the sales to Chavez and Fernandez, both of whom reside in Chicago, according to the affidavits.

JOSE NUNEZ, 31, of Chicago, obtained cocaine and heroin from suppliers and delivered it to Cruz and Santiago on credit, the charges allege.  Cruz regularly arranged for partial payments and re-payments to Nunez and to Nunez’s suppliers after Cruz and Santiago had re-sold the drugs to others, according to the affidavits.

The affidavits state that Nunez later introduced to Cruz an alleged supplier, JOSE RAMOS-GARNICA, 23, of Chicago.  The introduction allowed Cruz to place orders for cocaine and heroin directly with Ramos-Garnica, the affidavits state.  On April 17, 2014, authorities seized a half kilogram of cocaine from Ramos-Garnica, according to the affidavits.

DELVI COMPRES, 33, of Cicero, supplied Santiago with kilogram quantities of cocaine, which Santiago processed and re-sold to others before paying Compres, according to the affidavits.

ARCILIO LAUREANO-NAVARRO, 30, of Chicago, purchased heroin from Cruz and then re-sold it in Wisconsin, according to the affidavits.  After agents seized heroin from Laureano-Navarro in 2013, Cruz began selling it directly to a Wisconsin resident, DAVID LOZADO-OTERO, 35, of Milwaukee, the affidavits state.  On some occasions Cruz would deliver the heroin to Lozado-Otero in Wisconsin, and other times Lozado-Otero would pick it up from Cruz in the Chicago area, according to the affidavits.

The affidavits state that several other narcotics distributers obtained drugs from Cruz’s organization, including GILBERTO DANIELS, 31, of Chicago; ERIC COBARRUBIA, 39, of Chicago; FRANCISCO QUINTANA, 46, of Chicago; JUAN VAZQUEZ-DELGADO, 35, of Chicago; and SANTIAGO DIAZ-GALLEGOS, 41, of Chicago.

Cruz, Santiago, Cruz-Carrera, Chavez, Fernandez, Ramos-Garnica, Compres, Cobarrubia, Grimaldo, Nunez, Merced, Daniels, Laureano-Navarro and Lozado-Otero were charged with conspiring with each other to knowingly and intentionally possess with intent to distribute cocaine and heroin.  If convicted, they each face a maximum of life in prison and a $10 million fine.

Quintana, Vazquez-Delgado and Diaz-Gallegos were each charged with knowingly and intentionally possessing a controlled substance with the intent to distribute.  If convicted, Quintana faces a maximum of 20 years in prison and a $1 million fine; Vazquez-Delgado faces a maximum of 40 years in prison and a $1 million fine; and Diaz-Gallegos faces a maximum of life in prison and a $10 million fine.

The Acosta Network

The affidavits state that ALFREDO ACOSTA, 52, also known as “Mecha” and “Jose Esteban Resendiz Ayvar”, conspired with a Mexican supplier and others to distribute cocaine and heroin in the early part of 2014.  Acosta stashed the drugs in a home he referred to as “the office,” located in the 4000 block of West Irving Park Road in Chicago, the affidavits state.  Acosta used the stash house to accept deliveries of narcotics from his supplier’s couriers, and to store drugs and cash, according to the affidavits.

In January 2014, Acosta arranged a deal with a Mexican supplier to receive 10 kilograms of cocaine, the affidavits state.  Unbeknownst to Acosta, his telephone conversation with the supplier’s courier, EDWIN AMAYA, had been surreptitiously recorded by federal authorities, according to the affidavits.  The wiretapped conversation revealed the location of the deal, allowing agents to track Amaya, 37, of Chicago, as he attempted to deliver the cocaine, the affidavits state.  On Jan. 16, 2014, agents seized ten bricks of wrapped cocaine from Amaya’s car in an alley on the Northwest Side of Chicago, the affidavits state.

The affidavits describe another cocaine deal Acosta arranged with his Mexican supplier a few months later.  Acosta’s telephone conversation with the supplier had been covertly recorded by federal authorities, allowing agents to observe and record the encounter, the affidavits state.  On April 29, 2014, agents observed Acosta and the Mexican supplier’s courier, JUAN DAVILA, 20, of Cicero, conduct the transaction in the parking lot of a coffee shop in the 3900 block of West Irving Park Road in Chicago, the affidavits state.  Agents later followed Davila to a residence in the 2300 block of North McVicker Avenue in Chicago, where they seized 65 kilograms of cocaine from two duffel bags stashed in a cargo van in the garage, according to the affidavits.

The affidavits describe Acosta’s extensive network of suppliers, couriers and sellers.  LEONARDO HERNANDEZ, 33, of Chicago, worked as a courier for Acosta’s network and delivered drugs to its customers, according to the affidavits.  Those customers included CARLOS NAVA, 42, of Chicago; RAMON MENDOZA-RAMOS, 47, of Chicago; and DANIEL RIVERA, 32, of Berwyn; each of whom received wholesale amounts of drugs from Acosta on consignment, the affidavits state.  Acosta collected the money after the drugs were sold, according to the affidavits.

Acosta, Nava, Mendoza-Ramos and Hernandez were charged with conspiring with each other to knowingly and intentionally possess with intent to distribute cocaine and heroin.  If convicted, they each face a maximum of life in prison and a $10 million fine.

Amaya, Rivera and Davila were each charged with knowingly and intentionally possessing a controlled substance with the intent to distribute.  If convicted, they each face a maximum of life in prison and a $10 million fine.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration.

“The charges announced today reflect the determined work of our law enforcement partners on the Chicago Strike Force,” Mr. Fardon said.  “Aggressively pursuing this type of investigation is critical to preventing the stream of narcotics into our communities.”

“The Chicago FBI office has a long and successful history of working side by side with our law enforcement partners and dedicated prosecutors to address the flow of drugs through our communities, but we know our work is far from over,” said Special Agent Holley.  “Today’s charges and arrests demonstrate our commitment to continue unceasingly in those collaborative efforts.”

"Our promise is the never-ending commitment of the DEA and the Chicago Strike Force to attack and bring to justice these drug-trafficking organizations that inflict damage upon our neighborhoods and families,” Special Agent Wichern said.  “I applaud all the members of the Strike Force and the U.S. Attorney’s Office for their exemplary work.”

The investigation was conducted through the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) Chicago Strike Force, which consists of DEA, FBI, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Bureau of Alcohol, Tobacco, Firearms and Explosives, Chicago Police Department, Internal Revenue Service Criminal Investigations Division, U.S. Marshals Service, and task force officers from various state and local law enforcement agencies, including the Cook County Sheriff’s Police Department and the Illinois State Police.

The government is being represented by Assistant United States Attorneys Lindsay Jenkins, Yasmin N. Best and Jordan Palmore.

The public is reminded that complaints 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.

Cruz Complaint

Acosta Complaint

 

CHICAGO — A West Side man who forcefully recruited three underage girls into the commercial sex trade and then profited from their activities was sentenced Thursday to 10 years in federal prison.

ARNELL CHASE MISHER, 31, of Chicago, enticed three girls – ages 13, 16 and 17 – to engage in sex acts for money during the summer of 2012.  Misher admitted in a plea agreement that he helped to prepare an online advertisement on Backpage.com that featured explicit photographs of the 17-year-old, and that he personally accompanied the 13-year-old to the “track,” an area known for prostitution.  Misher would wait near the “track” and have the girl deliver to him all of the proceeds she made from her sexual encounters with adult men.

U.S. District Judge Harry D. Leinenweber sentenced Misher to 120 months in prison, to be followed by 5 years of supervised release.

“The seriousness of the defendant’s crime cannot be overstated,” said Assistant U.S. Attorney Christopher V. Parente.  “The damage that has been done to these minor children will never, and can never, be undone.”

Misher and a co-defendant, BRAUNDII YOUNG, 23, of Chicago, each pleaded guilty in December to one count of conspiracy to engage in sex trafficking by force, fraud and coercion.  Judge Leinenweber scheduled Young’s sentencing hearing for Aug. 27, 2015.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The investigation was conducted by the FBI’s Child Exploitation Task Force, which targets commercial sexual exploitation of children as part of an effort known as the Innocence Lost National Initiative.  In Chicago, the CETF is comprised of special agents from the FBI and investigators from the Chicago Police Department, the Cook County Sheriff’s Office, and the Cook County State’s Attorney’s Office.  The Cook County Human Trafficking Task Force assisted in the investigation.

The government is being represented by Assistant U.S. Attorney Christopher V. Parente.

CHICAGO — A Florida businessman has been charged in federal court with running a Ponzi scheme involving the sale of bogus investments in his real estate development company. RICHARD L. THOMPSON, 60, induced investors to purchase shares in his real estate development company, Latten Management LLC, and to personally loan him money, on the false premise that his company owned more than two hundred acres of property in Tennessee, according to a criminal information filed Tuesday in U.S. District Court in Chicago. Thompson took in approximately $2.1 million in the scheme, including $125,000 from an investor in west suburban Naperville, who purchased shares in Thompson’s company with funds from a retirement account, the information states.

Thompson, of Sarasota, Fla., was charged with one count of wire fraud. He will make an initial appearance before U.S. Magistrate Judge Maria Valdez on a date to be determined by the Court.

The information alleges that Thompson founded Latten Management in Florida in 2007 to develop vacation properties in Tennessee. Thompson personally purchased 54 acres of land in an area known as Green Mountain, and 15 acres in an area known as Green Ridge Park, according to the information. There were mortgages on both properties, and Thompson kept title in his name without ever transferring them to Latten Management, the information alleges.

Thompson and other individuals later purchased 217 acres, known as Catawba Peak, in another area of Tennessee, with Thompson guaranteeing payment for the mortgage loan, the information states. Thompson and the other owners defaulted on the loan when full payment came due in approximately February 2009, leaving a debt of approximately $9.8 million, according to the information. Latten Management never owned the Catawba Peak property, the information states.

From early 2009 until April 2011, Thompson offered and sold shares in his company by telling investors that it owned the three properties in Tennessee, and that the company would develop them into vacation destinations, according to the information. Thompson gave tours of Green Mountain, Green Ridge Park, and Catawba Peak to investors, but concealed the fact that Latten Management didn’t own the properties, according to the information. The information further alleges that Thompson concealed the fact that he and the other individuals had defaulted on the Catawba Park loan. In fact, Thompson knew that Latten Management did not own any real property, and that the investors’ shares in the company were not secured by any property, the information charges. According to the information, Thompson caused losses to Latten investors of approximately $1,652,000. Thompson misappropriated a substantial portion of investors’ funds to pay for his own personal expenses, including his home mortgage, his family’s credit cards, electric bills, college tuition, life insurance, and a Lexus, the information states.

In order to conceal his scheme, Thompson had to continually obtain new funds in order to satisfy his existing obligations to repay investors through Ponzi-type payments, according to the information. He also publicly filed false documents with the Securities and Exchange Commission, and intentionally misled investors about the status of their investments and loans, the information charges.

One of the duped investors lived in Naperville, according to the information. That investor transferred $125,000 in personal retirement savings to an account in Sarasota to purchase shares in Latten, according to the information.

In addition to the investments in Latten shares, Thompson also fraudulently obtained approximately $667,000 in personal unsecured loans from individuals by falsely representing that he would use their money to cover costs associated with developing Latten projects, according to the information. These personal loans were evidenced by promissory notes signed by Thompson, who promised to repay them with interest, even though he knew he did not have the financial ability to do so, the information states.

Thompson used a portion of the personal loans to pay for his own expenses, and to repay some of the Latten investors, according to the information. This part of the scheme resulted in a loss of approximately $500,000 to the individuals, the information states.

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

If convicted, Thompson faces 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. The Court would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

The public is reminded that an information 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 government is being represented by Assistant United States Attorney Jacqueline Stern.

Information (38.76 KB)

CHICAGO — A senior accountant at the Illinois Medical District Commission embezzled nearly $130,000 from the agency by directing funds into her personal accounts while fraudulently claiming the payments had been sent to the agency’s energy provider, according to a federal criminal complaint unsealed today.

CYNTHIA FERNANDEZ-ALONSO, 42, of Berwyn, was arrested by FBI agents this morning. She was charged with embezzlement in a criminal complaint filed yesterday in U.S. District Court and unsealed after the arrest. She is scheduled to make an initial court appearance at 11:00 a.m. today before U.S. Magistrate Judge Sheila Finnegan.

According to the complaint affidavit, Fernandez-Alonso worked as a senior accountant for the Illinois Medical District Commission, a governmental agency that receives federal funds to facilitate collaboration among the various medical, health and social service agencies operating within the Illinois Medical District on Chicago’s Near West Side. Fernandez-Alonso had the sole responsibility of authorizing payments from the Commission’s bank account to its outside vendors, including Constellation Energy, the Commission’s electrical and natural gas supplier, according to the complaint affidavit.

From February 2014 to at least April 2015, according to the affidavit, Fernandez-Alonso used her position to direct payments from the Commission’s bank account into two personal checking accounts. Fernandez-Alonso recorded the payments in the Commission’s internal records, but attributed them as having been sent to Constellation Energy, according to the affidavit.

The affidavit describes how Fernandez-Alonso arranged for 32 separate direct deposits into her personal accounts at Bank of America and Chase Bank, totaling $129,487. On the same day she received one such deposit – for $4,852 on Dec. 10, 2014 – a purchase was made with her Chase debit card at Kay Jewelers for $2,847, the affidavit states.

The charge of embezzlement from a program receiving federal funds carries a maximum penalty of 10 years in prison and a $250,000 fine, as well as mandatory restitution. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The arrest and complaint were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The government is being represented by Assistant U.S. Attorney Maureen E. Merin.

The public is reminded that a complaint 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.

Complaint

CHICAGO — A former United States Marine from Calumet City stole the identities of several fellow Marines and used their information to illegally procure more than $138,000 from Navy Federal Credit Union, according to an indictment returned this week in federal court in Chicago.

While serving in Combat Logistics Regiment 3 at Camp Foster in Okinawa, Japan, LEONARD E. PARKER JR. obtained a Marine roster containing the personal information of several fellow Marines stationed at the camp, according to the indictment. After returning to the United States, Parker and a co-defendant, DONTREAL S. EVANS, allegedly used the Marines’ information to transfer approximately $138,798 from the Marines’ accounts into bank accounts belonging to individuals Parker and Evans had recruited into the scheme.

Parker and Evans offered to pay those individuals to allow Parker and Evans to control and access the accounts, the indictment states. The pair later withdrew funds and made purchases from the accounts they controlled, and kept the proceeds from the scheme, according to the indictment. Parker also allegedly filed false tax returns in the names of Marines whose personal information was on the roster.

The indictment, which was returned Thursday, charged Parker, 24, of Calumet City, with five counts of financial institution fraud; one count of aggravated identity theft; and four counts of filing false claims against the United States. Evans, 21, of Lansing, was charged in the indictment with three counts of financial institution fraud. The defendants’ arraignment in U.S. District Court in Chicago has not yet been scheduled.

Each count of financial institution fraud carries a maximum sentence of 30 years in prison, a $1 million fine and mandatory restitution. If convicted of aggravated identity theft, Parker also would face a mandatory, consecutive term of two years in prison. Each count of filing false claims carries a maximum sentence of five years in prison, a $250,000 fine, and mandatory restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigation in Chicago.

The investigation is ongoing.

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

The government is being represented by Special Assistant U.S. Attorney Heidi Manschreck.

Indictment

CHICAGO — Fifteen defendants are facing federal or state narcotics charges for their alleged roles in supplying and distributing heroin and cocaine on Chicago’s South and West Sides. A lengthy investigation led by agents of the Drug Enforcement Administration and officers of the Chicago Police Department assigned to the Chicago Strike Force, resulted in federal charges against twelve defendants and state charges against three others.

Police and federal agents from the Chicago Strike Force began arresting the defendants this morning. All twelve federal defendants are in custody.

The federal defendants were charged in seven separate criminal complaints filed yesterday in U.S. District Court and unsealed following the arrests. The federal defendants began making initial court appearances this afternoon before U.S. Magistrate Judge Michael T. Mason in Chicago. The state defendants were charged in separate complaints and will appear at a later time in state court.

According to affidavits filed in support of the federal arrests, the investigation revealed that ANTHONY MURRAY, a member of the Black P-Stone Nation street gang (the “P-Stones”), distributed narcotics in an area the P-Stones refer to as the “Hundreds,” which is near 112th Street and Princeton Avenue in Chicago’s Roseland neighborhood. Murray, 43, of Chicago, also known as “Ant” or “Big Ant,” allegedly arranged narcotic transactions with a confidential source working with agents from the Chicago Strike Force in 2013 and 2014. The deals were surreptitiously recorded by officers who used wiretapped cellular phones and extensive surveillance as part of the investigation.

According to the federal affidavits, Murray was supplied with narcotics by three co-defendants: BRIAN GORDON, 42, of Chicago, also known as “G”; LAMONT TURNER, 41, of Chicago, also known as “Pookie”; and RUDOLPH CALLASO, 35, of Chicago. The affidavit alleges that FLOMONT JOHNSON, 40, of Hammond, Ind., contributed to the operation by converting powder cocaine into crack cocaine.

The federal affidavits allege that Murray and Gordon sold narcotics to a high-ranking member of the P-Stones, who, unbeknownst to Murray and Gordon, was assisting the government as a confidential source.

Murray, Gordon, Turner, Callaso and Johnson were charged with conspiring with each other to knowingly and intentionally possess with intent to distribute cocaine and heroin. If convicted, Murray, Gordon, and Johnson each face a mandatory minimum sentence of 5 years in prison and a maximum of 40 years in prison and a $5 million fine. If convicted, Turner and Callaso each face a maximum of 20 years in prison and a $1 million fine.

The affidavits allege that Murray also sold narcotics to another co-defendant, GERLAND ORR, 45, of Chicago. Orr was charged with knowingly and intentionally possessing cocaine with the intent to distribute. If convicted, Orr faces a maximum of 20 years in prison and a $1 million fine.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Anita Alvarez, Cook County State’s Attorney; Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration; Garry F. McCarthy, Superintendent of the Chicago Police Department; and Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division.

“The Chicago Strike Force is a potent alliance of federal, state and local law enforcement that is committed to halting the stream of narcotics into our communities,” Mr. Fardon said. “The charges announced today are the result of the hard work and determination of our investigative partners,” Mr. Fardon said.

“As prosecutors, we recognize the efforts of specialized law enforcement partners like the Chicago Strike Force and we work hand in hand to eradicate the flow of dangerous drugs in our communities,” Ms. Alvarez said. “We applaud the work of the Strike Force and look forward to continued collaboration,” Ms. Alvarez said.

"The Chicago Police Department remains manically focused on reducing violence in our city,” said Superintendent McCarthy. "With the engine of violence in Chicago primarily fueled by the drug trade, the Chicago Strike Force represents the culmination of local, state and federal resources targeting those who torment our neighborhoods with violence and sending a clear message that violence, drug dealing and gang activity will simply not be tolerated."

“DEA, along with its outstanding Strike Force partners, will continue to focus our efforts against heroin traffickers and gang members that plague our communities with violence, the concern of everyday Chicagoans,” said Special Agent Wichern. “This investigation exemplifies the created synergy of the Chicago Strike Force.”

The investigation was conducted through the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) Chicago Strike Force, which ― in addition to the DEA, IRS-CID and CPD ― consists of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, and task force officers from various state and local law enforcement agencies, including the Cook County Sheriff’s Police Department and the Illinois State Police.

The federal complaints charge several other defendants with various narcotics-related violations on the South and West Sides of the city. MELVIN SYKES, 34, of Chicago, also known as “Cooch,” and ANDRE GLADNEY, 48, of Chicago, also known as “Red,” were charged with knowingly and intentionally distributing heroin. If convicted, Sykes and Gladney each face a maximum of 20 years in prison and a $1 million fine. LEON LONDON, 32, of Bellwood, Ill., also known as “Bookie,” and JAMES WILSON, 36, of Cicero, were charged with knowingly and intentionally distributing crack cocaine. If convicted, London and Wilson each face a mandatory minimum of 5 years in prison and a maximum of 40 years and a $5 million fine.

A federal complaint also charges VINCENT YOAKUM, 55, of Chicago, also known as “Vinny Blue,” and RANDY GRIFFIN, 44, of Chicago, with conspiring with each other to knowingly and intentionally possess with intent to distribute cocaine. A federal affidavit filed in support of the complaint alleges that a high-ranking member of the P-Stones assisted the government as a confidential source and purchased cocaine from Yoakum and Griffin for $10,000 in cash. The transaction was observed and recorded by federal agents, according to the affidavit. If convicted, Yoakum and Griffin each face a maximum of 20 years in prison and a $1 million fine.

Assistant United States Attorneys Shoba Pillay and Jeremy Daniel are representing the government in the federal cases. Assistant State’s Attorney Daniel Maloney is handling the state cases.

The public is reminded that complaints 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.

Yoakum Complaint
Wilson Complaint
Sykes Complaint
Orr Complaint
Murray et al Complaint
London Complaint
Gladney Complaint

CHICAGO — A west suburban real estate broker was sentenced today to 16 months in federal prison for his role in a mortgage fraud scheme involving a pair of Chicago apartment buildings.

GEORGE DRAVILAS, 37, of Medinah, pleaded guilty in February to one count of bank fraud. In addition to the prison term, U.S. District Judge Gary Feinerman ordered Dravilas to pay $463,110 in restitution. Judge Feinerman ordered Dravilas to begin serving his sentence no later than Sept. 21, 2015.

Dravilas was arrested in May 2014 after a long-term federal undercover investigation exposed a scheme to defraud Standard Bank through fraudulent mortgage loan transactions. Dravilas admitted in his plea agreement that he knowingly provided false documents as part of mortgage loan applications to finance two residential properties in the name of straw buyers who Dravilas had arranged would receive a share of the seller’s loan proceeds. After fraudulently helping to secure the financing, Dravilas schemed to sell both apartment buildings for the inflated sale price of $275,000 each, while agreeing to kick back $100,000 on each transaction to the undercover straw buyers, keeping a fee for himself in the process.

The properties were two-flat apartment buildings located in the 6300 block of South Parnell Avenue and the 6600 block of South Sangamon Street in Chicago. Dravilas acknowledged in his plea agreement that the fair market value of the buildings was $45,000 and $47,000, respectively, and that Standard Bank stood to lose a combined $458,000 from the scam. In addition, as part of his plea agreement, Dravilas acknowledged that he engaged in additional mortgage fraud schemes involving two additional real estate properties in Chicago.

“Mortgage fraud is a crime that affects more than the lenders that funded the loans,” said Assistant U.S. Attorney Andrew S. Boutros. “It has a cascading, domino effect on a variety of property owners, neighborhoods, communities and other constituents.”

A co-defendant, BRIDGET HUTCHERSON, 40, of Chicago, pleaded guilty in April to one count of bank fraud. Hutcherson admitted in a plea declaration that she accepted $600 in December 2013 to supply a confidential informant with fraudulent W-2s, check stubs, and earnings statements in the names of the straw buyers. Hutcherson is scheduled to be sentenced by Judge Feinerman on Aug. 10, 2015, at 10:30 a.m.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago. HUD-OIG and FBI agents conducted the investigation through the South Suburban Financial Crimes Task Force, which includes the Cook County Sheriff’s Police Department, the Internal Revenue Service Criminal Investigation Division, the U.S. Postal Inspection Service, and the U.S. Postal Service Office of Inspector General.

The government is being represented by Assistant U.S. Attorney Andrew S. Boutros.

ROCKFORD — A Rockford man was sentenced yesterday in federal court on drug-trafficking and firearm charges.  JARVIS WASHINGTON, 28, of Rockford, Ill., was sentenced by U.S. District Judge Frederick J. Kapala to a total of 12 years in federal prison, and ordered to serve 4 years of supervised release following his term of imprisonment.  After a 3-day jury trial in U.S. District Court, Washington was convicted on April 1, 2015, of possession of heroin and cocaine base (“crack cocaine”) with intent to distribute, possession of marijuana with intent to distribute, and possession of a firearm and ammunition as a felon.

According to the indictment and evidence at trial, on Sept. 24, 2013, Washington possessed with intent to distribute at least 94.6 grams of heroin, 227.1 grams of crack cocaine, and 376.7 grams of marijuana.  Many of the drugs were already individually packaged for sale, and Washington possessed the tools to package the remaining drugs for sale.  In addition, Washington possessed a loaded .45 caliber handgun and both .45 caliber and .40 caliber ammunition.  Washington previously had been convicted of a felony punishable by a term of imprisonment exceeding one year and, therefore, was prohibited by law from possessing a firearm and ammunition.

The defendant was originally charged in state court and was transferred to federal court where he was charged under tough federal firearms laws as part of the Project Safe Neighborhoods program.  Project Safe Neighborhoods is an intensive, cooperative effort between local, state, and federal law enforcement to attack gun crimes.  The cornerstone of the program is that every defendant committing an offense involving a gun will be reviewed for possible federal prosecution in order to obtain the harshest penalties for the worst offenders.  Additional information about Project Safe Neighborhoods may be found at: www.psn.gov.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffrey A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; and Gary Caruana, Winnebago County Sheriff.  The Rockford Police Department and Loves Park Police Department assisted in the investigation.

The government was represented by Assistant U.S. Attorneys John G. McKenzie and Talia Bucci.

CHICAGO — A benefits authorizer at the Social Security Administration in Chicago authorized over $1.9 million in fraudulent benefits to more than 150 recipients who kicked backed cash to him and several others, according to a federal indictment unsealed today.

The benefits authorizer, JAYSON CRUZ, 39, of Chicago, worked at the Social Security Administration’s Great Lakes Program Service Center in Chicago. Cruz and four others were arrested this morning by federal authorities.

The ten-count indictment, which was filed on June 30, 2015, and unsealed today following the arrests, alleges that the defendants fraudulently caused the Social Security Administration to issue more than $1.9 million in payments to approximately 154 recipients between approximately September 2009 and December 2013.

Cruz was charged with ten counts of wire fraud. MONICA KNOX-SUMRELL, 41; VONZELL WHITE, 33; MICHAEL ELARDE, 37; and JERRY BROWN JR., 36, all of Chicago, were each charged with two counts of wire fraud. All five defendants pleaded not guilty during their arraignments this afternoon before U.S. District Judge Virginia M. Kendall in Chicago. All five defendants were released on their own recognizance. Judge Kendall scheduled a status hearing for 9/16/15 for all defendants.

According to the indictment, Cruz was one of the Social Security Administration employees responsible for authorizing monthly Old-Age, Survivors, and Disability Insurance Benefits to beneficiaries, representative payees, qualifying family members and representatives of deceased beneficiaries. The indictment alleges that Cruz, Knox-Sumrell, White, Elarde, and Brown recruited recipients of these benefits to receive additional payments on top of what they were legitimately owed. After Cruz fraudulently authorized the excess payments, Cruz, Knox-Sumrell, White, Elarde and Brown collected the majority of the money back from the recruited individuals, according to the indictment. Cruz also fraudulently authorized “underpayments” to White, Elarde, Brown and others, by falsely representing that they were relatives or representatives of deceased beneficiaries who were owed money from the Social Security Administration, according to the indictment.

Cruz authorized the fraudulent payments by entering false codes into the Social Security Administration’s electronic system, the indictment alleges. According to the indictment, Social Security Administration procedures allowed Cruz to authorize a payment of less than $6,000.00 to a recipient without supervisor approval. Cruz authorized the fraudulent payments in amounts slightly less than $6,000 in order to avoid detection of the fraud, the indictment alleges.

The indictment also alleges that Knox-Sumrell falsely represented to recipients that she worked for the Social Security Administration in order to further the scheme

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tracey Thanos, Special Agent in Charge of the Chicago Field Division of the Social Security Administration’s Office of the Inspector General.  “Employee fraud is something we take very seriously,” Thanos said. “We have no higher priority than investigating and pursuing justice whenever these instances occur, and we will continue to do so.”

The investigation is ongoing, the officials said.

The indictment seeks forfeiture from all five defendants of approximately $1,981,290, as well as a residence in Chicago. Each count of wire fraud carries a maximum sentence of 20 years in prison; a $250,000 fine, which may be increased to the greater of twice the gain or twice the loss3 from the crime; and mandatory restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.  The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The government is being represented by Special Assistant U.S. Attorney Heidi Manschreck.

Indictment

CHICAGO – A real estate developer who defrauded the Village of Riverdale of over $370,000 in public funds was sentenced today to 60 months in federal prison.

JOHN THOMAS, 52, of Chicago, owned and controlled Nosmo Kings LLC, which entered into an agreement with Riverdale to develop property along a marina in 2012. Only a portion of the funds were actually used for legitimate construction work. Thomas misappropriated $372,182 for his own personal use after creating and submitting fraudulent invoices for construction work that was never performed.

Thomas pleaded guilty to one count of wire fraud in May 2014. In addition to the five-year sentence, U.S. District Judge James B. Zagel ordered restitution of $372,182.

“John Thomas is a serial con man,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “Within months after release from probation from another federal conviction, the defendant set out to defraud the Village of Riverdale through the use of the village’s Tax Increment Financing program,” Harjani said.

Nosmo Kings entered into a TIF agreement with Riverdale in February 2012. Per the agreement, Thomas was required to submit documentation identifying completed construction expenses, including invoices and checks paid to vendors. Thomas created and submitted false invoices for non-existent companies and for companies that never performed work at the marina. For instance, one of the invoices requested reimbursement of $25,750 for construction supplies from a company that was actually a currency exchange to which Thomas owed money. Thomas used other TIF funds to pay personal expenses and the rent on his apartment.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The government is being represented by Assistant United States Attorney Sunil Harjani.

CHICAGO — A former Chicago resident who accepted cash payments to help 80 people file false bankruptcy petitions as a way of avoiding City of Chicago impound fees was sentenced today to 18 months in federal prison.

Daniel Rankins, 32, of Storm Lake, Iowa, and formerly of Chicago, pleaded guilty in December to one count of bankruptcy fraud. He was ordered to pay $142,737.00 in restitution by U.S. District Judge Robert M. Dow Jr.  Rankins must surrender to begin serving his sentence on Sept. 29, 2015.

“What he came up with was a pretty sophisticated system,” Judge Dow said in imposing the sentence. “He could have found a better way to apply himself.”

Rankins assisted 80 people with filing false Chapter 7 bankruptcy cases in order to get their vehicles released from the City of Chicago impound lot without paying fines or fees. Rankins had approached these individuals outside a City office or was referred to them by acquaintances. He personally accompanied them to the U.S. Bankruptcy Court in downtown Chicago, and furnished them with partially completed bankruptcy applications which named the City and its impound lot as the only creditors. In exchange, Rankins accepted cash payments from the false debtors which equaled approximately half of what was owed to the City.

“This was a sophisticated hustle,” said Assistant U.S. Attorney Megan Church, who represented the government. “It was a street scam, and he was ripping off the taxpayers.”

The scheme was uncovered in May 2012 when the City of Chicago’s Department of Revenue (now Finance Department) alerted the U.S. Trustee for the Northern District of Illinois to a significant increase in the number of individuals who were using bankruptcy as a means of obtaining their impounded vehicles without paying fines or fees. The U.S. Trustee’s Office reviewed the applications and learned that the false debtors had claimed an inability to pay the $306 Bankruptcy Court filing fee and hadn’t appeared for court hearings. All of the cases were eventually dismissed, and the court fees were never collected.

In January 2013 Rankins arranged for an undercover officer to file a false bankruptcy petition under the guise of obtaining a release of the officer’s vehicle from the impound lot, in exchange for a cash payment to Rankins of $600.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph M. Ferguson, City of Chicago Inspector General. The U.S. Bankruptcy Court and the U.S. Trustee’s Office for the Northern District of Illinois cooperated and assisted with the investigation.

CHICAGO — A registered nurse from Lombard who admitted purchasing and shipping more than 30 weapons to the Philippines has been sentenced to 60 months in federal prison.

Makasiar also admitted in his plea agreement that he filed a false report on Aug. 17, 2012, with the Lombard Police Department after learning that two of the weapons would be inspected by U.S. Customs and Border Protection. In the report, Makasiar falsely stated that the 2 weapons had been stolen from him prior to their being shipped.

“Defendant’s conduct implicates the foreign policy and national security interests of the United States and threatens the safety of the Philippines by contributing to the proliferation of the small arms trade,” Assistant U.S. Attorney Ryan Fayhee argued in a government sentencing memorandum. “The illegal trafficking of firearms from the United States to the Philippines is a significant law enforcement problem.”

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and James 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 illegal exportation of firearms is tantamount to breaching the border," Gibbons said. "The prosecution of weapons smugglers is an HSI priority as we work to interdict illegally trafficked guns and secure our nation’s borders in both directions."

CHICAGO— A federal grand jury returned a 25-count indictment yesterday charging six defendants with devising and participating in a mortgage fraud scheme which caused more than $16 million in losses to banks, mortgage lenders, Fannie Mae, and Freddie Mac.  Among those named as defendants are two real estate developers—VINCE MANGLARDI, 59, of Long Grove, and THEODORE “TJ” WOJTAS, JR., 43, of Glenview—who are accused of committing fraud in connection with the marketing and sale of condominiums at a 50-acre development in Palatine known as “The Woods at Countryside.”

The indictment accuses Manglardi and Wojtas of, among other things, using an assortment of advertising methods and sales pitches—on air, online, in writing, and at live presentations—to falsely promote the purchase of condos at the Woods as a means to financial independence and wealth, enticing prospective condo buyers with substantial, unsustainable financial incentives, including down payment refunds and up to three years’ worth of mortgage payments, maintenance costs, and property tax payments.

The indictment alleges that Manglardi, Wojtas, and their co-schemers colluded with each other to induce people to purchase condos at the Woods based on false promises and assurances.  The indictment further alleges that the defendants colluded with one another and with others to misrepresent and conceal material facts from banks and mortgage lenders in order to fraudulently induce such banks and mortgage lenders to approve non-conforming loans to condo buyers, thereby exposing numerous lenders and Fannie Mae and Freddie Mac to millions of dollars in losses.

Four alleged co-schemers are named as defendants, specifically:  attorney DAVID W. BELCONIS, 56, of Long Grove; NUNZIO L. GRIECO, 63, of Palatine, formerly an employee of the developers; WALTER VALI, 62, of Mundelein, formerly a mortgage loan originator; and KARIN L. GANSER, 62, of Palatine, formerly a licensed real estate salesperson.    All six defendants will be arraigned on the criminal charges on a date to be determined by the U.S. District Court.

The indictment also seeks the forfeiture of $16 million.  It charges various acts of wire fraud, mail fraud, and false statements to financial institutions.  Each count of the indictment carries a maximum term of imprisonment of 30 years and a maximum fine of $1,000,000.  If a defendant is convicted, the court must impose a reasonable sentence pursuant to the federal criminal code and the advisory sentencing guidelines.

The criminal charges were announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Barry McLaughlin, Special Agent-in-Charge of the Midwest Regional Office of the Federal Housing Finance Agency’s Office of Inspector General; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The government is being represented by Assistant United States Attorney Brian Havey.

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

Indictment

CHICAGO — A Chicago investment manager who fraudulently obtained millions of dollars from investors in a sophisticated Ponzi scheme to fund his extravagant lifestyle was sentenced today to 72 months in federal prison.

The defendant, NEAL GOYAL, 34, of Chicago, who was the sole managing member and founder of Blue Horizon Asset Management, LLC, and Caldera Advisors, LLC, was also ordered to pay more than $9.2 million in restitution by U.S. District Judge Matthew F. Kennelly. Goyal, who pleaded guilty in February to one count of wire fraud, was ordered to surrender to begin serving his sentence on September 17, 2015.

“Goyal was running a Ponzi scheme and he stole much of his investors’ money to prop up his extravagant lifestyle,” Assistant U.S. Attorney Kenneth Yeadon argued in a government sentencing memorandum. “There is no justification for the crimes that Goyal committed other than his own desire to place his own self-interests in front of the interests of his investors.”

From 2006 to 2014, Goyal perpetrated the scheme by setting up a fake trading shop on Michigan Avenue in Chicago in order to fool his investors into believing that his trading strategy generated market-beating returns. Goyal concealed his scheme by using existing investor money to repay investors, and by creating and distributing false account statements. Many of the duped investors were Goyal’s friends and family members.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. They commended the assistance of the U.S. Securities and Exchange Commission.

ROCKFORD — A Lake County woman was indicted today in federal court and charged with two counts of bank robbery and one count of attempted bank robbery.  TERESA M. KNOWLES, 39, of Volo, Ill., was charged with the robbery of Chase Bank, in Crystal Lake, Ill. on March 21, 2015, and Chase Bank, in Grayslake, Ill. on March 24, 2015, as well as the attempted robbery of Chase Bank in Johnsburg, Illinois, on March 24, 2015.

Knowles is scheduled to appear before U. S. Magistrate Judge Iain D. Johnson for an initial appearance on Thursday, July 2, 2015, at 11:00 a.m. in federal court in Rockford.  Each count of bank robbery and attempted bank robbery carries a maximum potential 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.  If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The 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, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.  The Johnsburg Police Department, McHenry Police Department, Grayslake Police Department, and Crystal Lake Police Department assisted in the investigation.

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

Indictment

ROCKFORD — Two area men were charged by a federal grand jury in separate cases on child pornography charges.  ZACHARY RODRIGUEZ, 24, of Loves Park, Ill., was indicted on June 16, 2015, on one count of using a minor to engage in sexually explicit conduct in November 2014.  Rodriguez appeared in federal court on June 23, 2015, and pled not guilty.

ADRIAN C. PETERS, 22, of South Beloit, Ill., was charged today with 12 counts of using a minor to engage in sexually explicit conduct for the purpose of transmitting a live visual depiction that would be transmitted and transported by a means or facility of interstate and foreign commerce, during the period of October 2012 to December 2014.  Peters is scheduled to appear today at 3:00 p.m. before Magistrate Judge Iain D. Johnston.

Each count of sexual exploitation of a minor carries a potential penalty of a minimum of 15 years and a maximum of up to 30 years in prison, up to five years of supervised release following imprisonment, a fine of up to $250,000, and full restitution.  If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

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

The indictments were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.  The Winnebago County Sheriff’s Office assisted in the investigations, along with the South Beloit Police Department in the charges against Peters, and the Loves Park Police Department in the charge against Rodriguez.

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

Rodriguez Indictment
Peters Indictment

CHICAGO ― Melvin Reynolds, 63, a former member of the United States House of Representatives, was indicted yesterday on federal charges alleging that he failed to file income tax returns for the years 2009 through 2012.

Reynolds will appear for his arraignment at a date yet to be determined by the U.S. District Court

According to the indictment, Reynolds received gross income in each year in excess of the minimum amount required to file a tax return. As a result, he was required by law, by April 15 of the following year, to file an income tax return (Form 1040 and accompanying attachments). Reynolds willfully failed to file income tax returns for four consecutive years – 2009, 2010, 2011 and 2012.

Each count of failing to file a federal income tax return carries a maximum sentence of one year in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced the indictment with Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigative Division Chicago.

The government is being represented by Assistant U.S. Attorneys Barry Jonas and William E. Ridgway.

Indictment

CHICAGO — The captain of a petroleum barge that exploded in 2005, resulting in the death of a crew member, was sentenced to six months in federal prison today after being convicted of felony maritime negligence and causing thousands of gallons of oil to pollute the Chicago Sanitary and Ship Canal. The corporate barge owner, convicted of the same offenses, was sentenced to three years of supervised release and make restitution in excess of $5.3 million to the National Pollution Funds Center for the monies it paid out as a result of the spill.  The defendants, DENNIS MICHAEL EGAN and EGAN MARINE CORP., were found guilty in June 2014 following a bench trial.

Egan, 36, of Topeka, Ill., and formerly of Lemont, and Egan Marine Corp., of Lemont, were each convicted of one count of negligent manslaughter of a seaman and one count of negligently discharging oil pollution to a navigable waterway. The verdict was delivered in an oral ruling from the bench by U.S. District Judge James Zagel in June 2014. In addition to the prison sentence, Judge Zagel also ordered Dennis Egan to one year of supervised release. Judge Zagel has scheduled a hearing for July 1 to rule on restitution amounts to the family of the victim.

According to the evidence at trial and court records, on Jan. 19, 2005, a fully-loaded Egan Marine Corp. tank barge, known as the EMC-423, being pushed by the tow boat Lisa E, was transporting approximately 600,000 gallons of clarified slurry oil (CSO) from the ExxonMobil Oil Corp. refinery near Joliet to the Ameropan Oil Corp. facility near the canal and California Avenue in Chicago. CSO is a byproduct of petroleum refining that can also be used as fuel, among other uses. Egan Marine Corp. employee Dennis Michael Egan was the pilot of the Lisa E and Captain of the vessels. As captain, Egan was responsible for the actions of his three-man crew and the safe operation of the vessels. About 4:40 p.m., just after clearing the Cicero Avenue Bridge and heading northeast parallel to the I-55 Stevenson Expressway, a large explosion, originating in one of the EMC-423’s four cargo tanks, occurred aboard the barge. As a result, the EMC-423 sank, discharging thousands of gallons of CSO and other oils into the canal. Immediately after the blast, crewman Alexander Oliva, 29, who had been aboard the barge, was determined to be missing. His body was recovered from the canal near Laramie Avenue on Feb. 4, 2005.

Finding both defendants guilty following trial, Judge Zagel ruled that the explosion occurred when the open flame from a propane fueled torch, which Alex Oliva was using to heat the barge’s cargo pump in preparation for offloading, came into contact with ignitable CSO vapors being vented from a storage tank headspace to the deck of the barge within mere inches of the cargo pump. The use of any open flame on a loaded petroleum barge is a violation of Coast Guard regulations and safe industry practice. The barge did have a lawful onboard heating system, but it was disconnected from the cargo pump, thereby requiring the crew to use an alternative means of heating the cargo pump for offloading. Judge Zagel concluded that the defendants were negligent because they knew that the crew occasionally used an open flame to heat the cargo pump but nonetheless permitted the crew to engage in the illegal and unsafe practice. As a result, the defendants were found guilty of negligently causing the death of Alex Oliva and negligently violating the Clean Water Act by discharging thousands of gallons of oil into the Canal, in violation of the Clean Water Act.

The total cleanup and other costs from the spill exceeded $12 million, more than $5.3 million of which was paid by the National Pollution Funds Center from a federal trust fund used to pay the costs of mitigating oil spill incidents, as well as legitimate damage claims of affected third parties. The fund was established by the Oil Pollution Act of 1990 following the Exxon Valdez spill in Alaska.

In imposing sentence, Judge Zagel remarked that when bad things don’t happen for a long period of time, there is a distinct risk that the level of care is lowered and this is the case where the catastrophe occurred.

“This case provides a tragic example of what happens when a vessel captain, and his employer, violate their special duty of care to their crew and the public by disregarding basic safety requirements,” said U.S. Attorney Zachary T. Fardon. “The ultimate tragedy of their crimes is that Alex Oliva would not have lost his life if the defendants valued basic safety higher than expediency.”

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Neal R. Marzloff, Special Agent-in-Charge of the U.S. Coast Guard Investigative Service, Central Region in Cleveland; and Justin Oesterreich, Acting Special Agent-in-Charge of the U.S. Environmental Protection Agency’s Criminal Investigation Division in Chicago.

The government was represented by Assistant U.S. Attorneys Timothy Chapman and Matthew Hiller and Special Assistant U.S. Attorney Crissy Pellegrin, of the U.S. EPA’s Office of Regional Counsel for Region 5 in Chicago.

CHICAGO — A Chicago resident was charged yesterday with wire fraud after fraudulently obtaining approximately $9 million from approximately 50 investors by making false and misleading representations to the investors, which resulted in a loss to investors of approximately $4 million, according to the indictment.  The charges allege that Nick Wurl, 25, of Chicago, was the President of Ludiera Capital, LLC, located in Chicago, and that he falsely represented to investors that Ludiera was in the business of buying, transporting, and selling commodities, such as corn and wheat, domestically and internationally, when, in fact, Ludiera never bought, transported, or sold any commodities.

Wurl was arrested on May 26, 2015, and released on bond. He will be arraigned at a later date in U.S. District Court.

According to the indictment, between approximately July 2013 through May 2015, Wurl made false representations about the nature of Ludiera’s business, the financial condition of Ludiera, the expected return and actual return on the investment, the risk involved in the investment, the status of the investment, and the use of investors’ funds.  The indictment also alleges that Wurl misappropriated investors’ funds to trade futures and options without disclosing that he was using investors’ funds for trading, and to pay personal expenses for his own benefit.  According to the indictment, Wurl fraudulently retained investors’ funds and concealed the scheme by preparing and distributing fraudulent account statements to investors.

The indictment seeks forfeiture of approximately $9 million.

Wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission assisted with the investigation.

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

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.

Indictment

CHICAGO — Forty-two defendants are facing state or federal narcotics charges for their alleged roles in supplying and distributing heroin in the area of West Grenshaw Street and Independence Boulevard, in the North Lawndale neighborhood on the city’s west side.  An investigation led by officers of the Chicago Police Department and agents of the Drug Enforcement Administration assigned to the High Intensity Drug Trafficking Area (“HIDTA”) Task Force, resulted in federal charges against 16 defendants and state charges against 26 others, who police and federal agents began arresting early this morning.

Twelve firearms, approximately $50,000, nearly a half-kilogram of heroin, and over one-half kilogram of cocaine were seized this morning during the arrests of 32 of the charged defendants.  The remaining defendants are either in custody or at large.  Additionally, over one and a half kilograms of heroin were seized during the course of the investigation from last August through this month.  Early today, Chicago police, DEA agents, and other HIDTA law enforcement partners also executed seven search warrants upon several defendants’ residences and three alleged stash houses, and seized two vehicles, including one defendant’s 2014 Maserati, Gran Turismo.

The federal defendants were charged with conspiracy, distribution, or possession with intent to distribute narcotics in five separate criminal complaints that were filed yesterday in U.S. District Court and unsealed following the arrests.  The federal defendants are scheduled to begin appearing at 3 p.m. today before U.S. Magistrate Judge Maria Valdez in U.S. District Court.  The 26 state defendants face charges ranging from Class 1 to Class X Delivery of a Controlled Substance and face a potential sentencing range of four to 30 years in prison upon conviction.  The state defendants are expected to appear in bond court this afternoon at the Leighton Criminal Courts Building in Chicago.

According to a 230-page affidavit in support of the federal arrests and search warrants, the investigation revealed that JAMES TRIPLETT, also known as “Trell,” 33, of Berkley, controlled the distribution of heroin in the area of the 3700 block of West Grenshaw Street, in the North Lawndale neighborhood west of Douglas Park.  Triplett allegedly assigned responsibility for heroin distribution on the block he controlled to specific individuals, who further delegated distribution to shift workers who sold heroin throughout the day.

Triplett obtained his heroin largely from supplier, LEVAUGHN COLLINS, also known as “Sweet Bobby,” 34, of Chicago, who along with his narcotics associates, obtained wholesale quantities of heroin which they mixed and packaged for distribution to buyers like Triplett who then subsequently sold the heroin on the street in the area of the 3700 block of West Grenshaw Street.

The area is just south of the Interstate 290 Eisenhower Expressway corridor that has been referred to as the “Heroin Highway” because of the accessibility it provides to city and suburban heroin customers.

“The Chicago HIDTA is a powerful collaboration of local, state, and federal law enforcement which concentrates its efforts on both narcotics suppliers and street-level distributors,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.  “This investigation and arrests associated with this open air drug market demonstrate how effective teamwork by law enforcement agencies can significantly reduce the flow of narcotics into our communities,” he said.

“This operation demonstrates how police and prosecutors are continuing to work together to dig in at the local level and hammer away at the drug markets plaguing our local communities,” said Cook County State’s Attorney Anita Alvarez. “Once again, we are pleased to join our state and federal law enforcement partners in these ongoing and coordinated efforts.”

“Investigating, charging and arresting heroin dealers is priority number one," said SAC Wichern.  "Too many lives in Chicagoland are forever lost due to heroin use.  I'm proud of the work done by these agents, officers and prosecutors, who worked tirelessly to achieve these results and I’m confident that with our continued partnership, we will have increasing success."

 “IRS Criminal Investigation was an integral part of today’s law enforcement events by investigating the financial aspects of these investigations,” added Special Agent-in-Charge Boyd from IRS/CID.

The complaint affidavit alleges that Triplett was a wholesale supplier of heroin who, through his drug trafficking organization, ran the heroin trade in the area of the 3700 block of West Grenshaw Street.  The complaint further alleges that Triplett tasked his narcotics associates with different responsibilities ranging from picking up and transporting the packaged heroin for subsequent distribution, to running the daily operations of the Grenshaw drug spot, to collecting proceeds from heroin sales there.  The Triplett drug trafficking organization employed individuals, like MARCETTEAUS MCGEE, aka “Antonio,” aka “Keitho,” 31, of Chicago;   CHRISTOPHER TIDWELL, aka “Gov,” 42, of Chicago; JAMES SMITH, aka “J Dub,” 35, of Chicago; and CHIQUITA JACKSON, 29, of Chicago, to manage the Grenshaw drug spot and advise Triplett when resupply was needed, to shuttle heroin among the various stash and retail locations, and to return his share of the profits to him.  The organization employed street-level workers responsible for the retail sale of its heroin such as JACKIE TYLER, 29, of Chicago.

Levaughn Collins, a wholesale supplier to the Triplet drug trafficking organization, and others, operated his heroin distribution from his main stash house at 561 East 103rd Place, as well as specific locations such as 2936 West Warren Boulevard, the charges allege.  Other defendants, including LARRY COLLINS, aka “Scooter,” 38, of Chicago, JIMMY BELL, aka “Dirt,” 38, of Chicago; LAMEL BURNS, aka “Slim,” 38, of Dolton;  and KEVIN GARDNER, aka “Bo,” 35 of Chicago, allegedly assisted Levaughn Collins in diluting the heroin to increase profits and packaging the heroin into smaller, user-sized quantities for street-resale.  Heroin packaged and distributed by Collins’s organization was typically packaged in small user-portion plastic bags with orange basketballs, purple lady logos, green Playboy bunnies, Hershey’s kisses, or black panda bear symbols stamped on them.

One federal complaint charges twelve defendants ― James Triplett, Levaughn Collins, Larry Collins, Jimmy Bell, Lamel Burns, Kevin Gardner, Christopher Tidwell, Marcetteaus McGee, James Smith, Chiquette Jackson, Jackie Tyler and ANTON HIGGINS, aka “Spud,” 35, of Chicago― with conspiracy to possess and distribute more than a kilogram of heroin.  If convicted, they each face a mandatory minimum sentence of 10 years in prison and a maximum of life imprisonment and a $10 million fine.

DONALD MCINTOSH, aka “Donnie,” 40, of Chicago, and NEKENYA HARDY, aka “Keefy,” 36, of Berwyn, were charged separately with being heroin customers of Levaughn Collins.  If convicted, McIntosh faces a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine and Hardy faces a maximum of 20 years in prison and a $1 million fine.

ANGELES AVALOS, 32, of Chicago, was also charged separately with being a heroin supplier to Levaughn Collins.  If convicted, he faces a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine.

DEONTE THOMAS, aka “12th Street,” 25, of Chicago, was also charged separately with distributing heroin in the 3700 block of West Grenshaw Street.  If convicted, he faces a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine.

The 27 state defendants, charged for their alleged roles in supplying and distributing heroin are: CARL AUSTIN, DEMARIO BUTLER, DEJON CARR, LAVORA CHILDRESS, DEWAYNE COOK, JOHNNY CORBIN, SIMEON CURRIE, DEANDRE CURRY, MARQUITA DAVIS, ORLANDO EDWARDS, TERRELL HARRIS, WILLIE HUGHES, ERIC JACKSON, COSHAWNDRA JENKINS, ERIC LEMON, ANDRE MINOR, BERNARD PERSON, DARRYL PLEASANT, DONALD ROGERS, FLOYD SHAW, KENNETH SMITH, LEONARD SMITH, TIMESHA WASHINGTON, LEONARD WHITE, DOMINICK WILLIAMS and JASON WOODS.

Assistant United States Attorneys Katherine A. Sawyer and Andrew K. Polovin are representing the government in the federal cases.  Assistant State’s Attorney Aaron R. Bond is prosecuting the state cases.

The public is reminded that complaints 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.

Collins Complaint
Hardy Complaint
McIntosh Complaint
Avalos Complaint
Greenshaw Affidavit
Thomas Complaint

ROCKFORD — A Rockford, Ill. man was sentenced today by U.S. District Judge Philip G. Reinhard for producing a fictitious financial instrument that appeared to be issued under the authority of the U.S. Treasury.  BRADLEY SHERMAN HAMPTON, 55, was sentenced to 12 months and one day in federal prison, to be followed by 3 years supervised release, and ordered to pay restitution of $76,500. 

Hampton, who pled guilty on Feb. 5, 2015, admitted that on Aug. 31, 2009, he created a fictitious $48,780 money order in an attempt to defraud Regions Bank and the U.S. Treasury.  According to the written plea agreement, Hampton also admitted that in 2009 he produced eight other fictitious money orders in an attempt to defraud.  The nine fictitious money orders totaled $547,578.47 and purported to be issued under the authority of a Federal Reserve Bank, the Department of the Treasury, or the United States Treasury.  The fictitious money orders were made payable to Chase Home Finance, Chase National Payment Service, Holcomb State Bank, Regency Worldwide Development, Inc., Harley Davidson Credit, and the Faith Center in Rockford, Ill.  The $76,500 restitution is owed to the sole money order recipient that accepted a money order and disbursed money.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Frank Benedetto, Special Agent-in-Charge of the Secret Service’s Chicago Field Office.

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

CHICAGO – Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today a nationwide takedown by Medicare Fraud Strike Force operations in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings.  In addition, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority as provided in the Affordable Care Act.   This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount.  Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced thirteen defendants who were charged in four local cases as part of the national package.

“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” said Attorney General Lynch.  “The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others.  They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered.  In the days ahead, the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives.  We are prepared – and I am personally determined – to continue working with our federal, state, and local partners to bring about the vital progress that all Americans deserve.”

“Health care fraud extracts a huge toll on our nation’s health care system,” stated U.S. Attorney Fardon in announcing the cases charged in the Northern District of Illinois.  “We will continue to aggressively pursue those health care providers that take advantage of not only the system, but the patients they are entrusted to care for.”

Three of the cases and nine of the defendants in the Northern District of Illinois involve home health services, an area which is “vulnerable to fraud, waste and abuse,” according to the Department of Health and Human Services Office of Inspector General in a 2012 report, “Inappropriate and Questionable Billing by Medicare Home Health Agencies.”  In 2013, citing factors that strongly indicated fraudulent activity in the metropolitan Chicago area compared to other areas, the Centers for Medicare & Medicaid Services imposed the first-ever moratorium authorized by the Affordable Care Act to halt the enrollment of new home health providers in the metropolitan Chicago area.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since their inception in March 2007, Strike Force operations in nine locations have charged over 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.

Including today’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, which have involved more than $2.5 billion in fraudulent billings.  Today’s announcement marks the first time that districts outside of Strike Force locations have participated in a national takedown; those districts account for 82 defendants charged in the takedown.     

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

In addition to the Strike Force, today’s enforcement actions include cases brought by the U.S. Attorney’s Offices for the Northern District of Illinois, Southern District of Illinois, Northern District of Ohio, Western District of Pennsylvania, Western District of Kentucky, Southern District of New York, Alaska, and the Southern District of Georgia.  The following cases are being prosecuted by the Northern District of Illinois:

United States vs. Janet Guerrero, et.al
Seven individuals who worked at three related home health care companies – Donnarich Home Health Care, Inc., Josdan Home Health Care Inc., and Pathways Home Health Services LLC – were charged by superseding indictment yesterday with conspiracy to commit health care fraud, health care fraud, false statements, and money laundering. The indictment alleges a $45 million fraud at the three home health care companies, starting as early as 2008 and continuing into 2014.  The fraud as alleged included paying illegal bribes and kickbacks to obtain Medicare beneficiaries; ignoring doctors who refused to certify beneficiaries as “homebound” and eligible for care; enrolling patients who did not need or want the care; subjecting patients to pre-planned cycles of discharges and re-enrollments, regardless of their medical needs; and falsifying medical records to make patients appear to be homebound or sicker than they actually were.

The newly-charged defendants include Josephine Tinimbang, an owner and operator of the companies; Dr. Jose Calub, the medical director; Sharon Gulla, a registered nurse and a former supervisor; and Marilou Lozano, Ronald Malalis, Mary Pilar Mendoza, and Isabelita Sabejon, registered nurses who enrolled non-homebound beneficiaries and fabricated medical records. Two defendants were charged in an earlier indictment:  Sherwin Cubelo, a patient recruiter who received illegal kickbacks; and Janet Guerrero, an office manager who administered the kickbacks.  The government is represented in this case by Trial Attorney Brooke Harper.

United States vs. Barry Fischer
Barry Fischer, 70, of River Forest, was indicted for health care fraud on Wednesday in a 20-count federal indictment for allegedly billing Medicare for unnecessary home visits, for falsely certifying patients for home health services, and for putting false information in patient charts.  Fischer allegedly signed orders in which he falsely certified patients as “confined to the home,” under his care, and requiring skilled nursing services.  According to the indictment, as a result of Fischer’s false certifications, Medicare suffered losses in the form of payments to the company Fischer worked for and various home health agencies.  The government is represented in this case by Assistant U.S. Attorney Stephen Chahn Lee.

United States vs. Zenaida Dimailig
Zenaida Dimailig, 78, of Bensenville, was charged by complaint with health care fraud for allegedly causing Medicare to be billed for home health services for patients who were not home bound and for services that were not rendered. Dimailig allegedly paid cash kickbacks to Medicare-covered patients who, in turn, allowed their Medicare information to be used to bill Medicare for home-health services that these individuals did not need.  Dimailig then passed on this Medicare information and records that falsely suggested that certain services were provided to Medicare beneficiaries to home health care agencies for the purpose of billing Medicare. The government is represented in this case by Assistant U.S. Attorney Timothy Storino.

United States vs. Omeed Memar
Omeed Memar, 46 of Chicago, a dermatologist, was indicted for health care fraud last week in a 16-count federal indictment for allegedly billing cosmetic treatments fraudulently as the destruction of large numbers of pre-cancerous lesions. According to the indictment, the defendant falsely diagnosed patients with actinic keratosis, or precancerous lesions that are typically rough, dry or scaly, and then billed public and private health insurers for medically unnecessary treatments. According to the indictment, between 2007 and January 2013, Memar falsely diagnosed patients with actinic keratosis, ordered his staff to provide intense-pulsed light treatments for his patients, and instructed his staff to document the procedures falsely as the destruction of 15 or more precancerous lesions. The government is represented in this case by Assistant U.S. Attorney Stephen Chahn Lee.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Lamont Pugh III, Special Agent-in-Charge of the U.S. Department of Health and Human Services Office of Inspector General in Chicago; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago; Martin J. Dickman, Inspector General, U.S. Railroad Retirement Board; and Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service, Criminal Investigation,  Chicago Field Office.

Money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine.  Health care fraud and conspiracy to commit health care fraud carry a maximum penalty of 10 years in prison and a $250,000 fine and restitution is mandatory.  Making a false statement in a health care matter carries a maximum penalty of 5 years in prison and a $250,000 fine.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The public is reminded that indictments and complaints are 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.

Fischer Indictment
Dimailig Complaint
Guerrero Superseding Indictment
Memar Indictment

Chicago ─ A certified public accountant who was involved in the auditing process at a publicly-traded company based in Chicago was sentenced to one year and one day by U.S. District Court Judge Sara L. Ellis for engaging in insider trading of the company’s securities that made him an illegal profit of more than $286,000 in 2012.  Dombrowski was also ordered to forfeit $286,211.55 and serve a term of two years of supervised release after his term of imprisonment.  The defendant, Steven M. Dombrowski, 50, of Chicago, was the director of corporate audit for Allscripts Healthcare Solutions, Inc., and pled guilty to one count of securities fraud in December 2014.    Dombrowski was ordered to surrender to the Bureau of Prisons on September 14, 2015.

According to the indictment, Dombrowski misused material nonpublic information he knew about Allscripts’ performance for the first quarter of 2012 and purchased put options and engaged in short sales of stock through a trading account in his wife’s maiden name that he controlled, which resulted in illegal profits of approximately $286,211.

Dombrowski and the employees he supervised were responsible for auditing and testing the processes and procedures Allscripts used to compute and report its financial performance. Allscripts provides information technology solutions to the healthcare industry and its common stock is traded on the NASDAQ stock market under the symbol MDRX.

Between April 10 and April 28, 2012, a quarterly blackout period was in effect at Allscripts.  The blackout prohibited certain employees, including Dombrowski, who were given written notice and who had access to material nonpublic information, from engaging in trades of Allscripts securities 15 days before the end of a quarter, and ending after the second full business day following the company’s quarterly earnings announcement.

Dombrowski learned in April 2012 through his employment that Allscripts first quarter financial results were going to be less favorable than market expectations when they were publicly announced on April 26, 2012. Throughout April, Dombrowski conducted securities transactions that he designed to be profitable if the price of Allscripts stock declined, including purchasing put options and short selling stock, which he knew was prohibited and violated the company imposed blackout period. Allscripts stock, in fact, declined when its 2012 first quarter announcement revealed lower sales, less revenue, and lower earnings per share than the first quarter of 2011. After Allscripts stock declined on and after April 26, 2012, Dombrowski offset his Allscripts securities positions and profited approximately $286,211 from insider trading.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Chicago office of the U.S. Securities and Exchange Commission assisted in the investigation.

“We will vigorously prosecute defendants who commit insider trading at publicly-traded companies located in our district,” said U.S. Attorney Fardon.  “Mr. Dombrowski betrayed the trust placed in him by his employer, Allscripts, and used his access to confidential company information for his own personal gain.”  

The government was represented by Assistant United States Attorney Sunil Harjani in this case.

Chicago — A former Dolton certified water operator was indicted yesterday on charges that, for several years, he routinely falsified paperwork to make it appear that Dolton was properly sampling its drinking water for microbiological contaminants. Dolton purchases its drinking water from the City of Chicago, which treats Lake Michigan water. However, Dolton is still required to test its drinking water for the presence of coliform bacteria in order to ensure that it has not become contaminated locally.

According to the six count indictment, between January 2008 and continuing through August 2013, Philip Kraus, 63, of Thornton, falsified records in order to conceal the fact that he was not sampling Dolton’s water system in accordance with the Safe Drinking Water Act and the U.S. EPA regulations that implement the Safe Drinking Water Act. Kraus will appear before for an arraignment at a later date determined by U.S. District Court.

Each month, Dolton was required to collect 25-30 samples of its drinking water from various points representative of the entire drinking water distribution system and thereafter to take those samples to a certified laboratory for testing. The samples were to be tested for the presence or absence of coliform bacteria – the presence of coliform bacteria in the drinking water may indicate that the drinking water is contaminated with microbiological contaminants. The indictment alleges that, contrary to the required sampling protocol, Kraus routinely collected multiple drinking water samples each month from only one or a few locations but falsely represented on Dolton paperwork and on forms submitted to Dolton’s contract laboratory that the samples were taken from representative locations throughout Dolton. The laboratory then transmitted the test results and the false sample site data to the Illinois EPA, which implements the federal Safe Drinking Water Act in Illinois pursuant to authorization from U.S. EPA. IEPA and U.S. EPA rely upon the test results and sample site data to ensure that Dolton was distributing to its residents and businesses drinking water free of microbiological contaminants. The contract laboratory is not accused of any wrongdoing.

The indictment charges Kraus with one count of engaging in a multi-year scheme between January 2008 and August 2013 to submit material false statements and five additional counts, each of which charges Kraus with causing the submission of a false statement to IEPA on a particular date in 2013.

The indictment alleges that all of the test results from the samples submitted to the contract laboratory were negative for the presence of coliform bacteria. The government does not possess information indicating that any person was harmed as a result of the alleged offenses.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Randall K. Ashe, Special Agent-in-Charge of the U.S. EPA’s Criminal Investigation Division in Chicago.

"The residents of the Village of Dolton relied upon Mr. Kraus, the Village’s Certified Water Operator, to make sure that their drinking water was properly sampled and tested for microbiological contamination." said Mr. Fardon. "Mr. Kraus violated the trust of the residents of Dolton, and, although we have no evidence that Mr. Kraus’ conduct caused any actual harm, it did create a very real risk of contamination going undiscovered."

Each of the six counts carries a maximum penalty of 5 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is being represented by Assistant United States Attorney Timothy J. Chapman.

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.

Complaint

Chicago – A Wilmette man was arrested this morning by agents from the Federal Bureau of Investigation and detectives from the Norridge and Arlington Heights Police Departments and is facing federal wire fraud charges for defrauding his clients of at least $1 million of investment funds. Alan Gold, age 60, was arrested at his residence and charged by criminal complaint that was unsealed following his arrest. FBI agents also conducted a search pursuant to a search warrant of Gold’s residence this morning. Gold appeared before U.S. Magistrate Judge Jeffrey Gilbert earlier today and was released on a $10,000 recognizance bond and is due back in court for a status on June 15 at 9:00 a.m.

According to the complaint, Gold engaged in a scheme to defraud his clients for at least five years through false statements. Gold, who managed several million dollars of client funds through his company, Alan Gold & Associates, based in his residence, allegedly sent account statements to clients falsely representing that their assets were invested in certain stocks, real estate funds, futures contracts, and other investment products, when Gold had actually spent those client funds on his own personal expenses.

According to the complaint, Gold, as early as 2008, told his clients that he would make “alternative investments” on their behalf using funds that he would wire from their brokerage account to his bank account. Among the investments Gold listed on client account statements were real estate ventures and holdings in real estate ventures, gold and natural gas futures contracts, and the stocks of publicly traded companies. Gold did not purchase securities and futures contracts for his clients, but allegedly spent the funds on gambling expenses at area casinos and personal living expenses. Gold allegedly continued to wire transfer funds from client accounts for at least five years using the same false statements and representations to clients. The scheme was exposed when Gold stopped returning client phone calls and a client reported the matter to law enforcement.

If convicted of wire fraud, Gold could be sentenced to a maximum term of imprisonment of 20 years and a $250,000 maximum fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The arrest and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation Chicago Office. 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 being represented by Assistant United States Attorney Sunil R. Harjani.

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 guilty beyond a reasonable doubt.

Complaint

ROCKFORD — A former Sycamore, Ill. resident was sentenced today by U.S. District Judge Frederick J. Kapala for possessing child pornography.  MICHAEL PODOLSKY, 27, now of Elkader, Iowa, who pled guilty to the charge on January 27, 2015, was sentenced to 97 months imprisonment, to be followed by 5 years of supervised release.  In his written plea agreement, Podolsky admitted that on and prior to July 12, 2013, he owned and was in possession of a computer at his home in Sycamore that contained more than 600 images of children engaged in sexually explicit conduct, and that among the images he possessed were images that depicted prepubescent minors engaged in sadistic conduct and violence. 

The sentencing was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent‑in‑Charge of the Chicago Office of the Federal Bureau of Investigation; and Glenn Theriault, Chief of the Sycamore Police Department.

The government was represented by Assistant United States Attorney Michael D. Love.

ROCKFORD — A former Machesney Park, Ill. man was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for concealing assets from a Bankruptcy Trustee.  The defendant, ROBERT J. YONKEE, JR., 56, now of Lake Geneva, Wis., was sentenced to 8 months in federal prison, to be followed by 1 year of supervised release, and was ordered to a fine of $1,000. 

In pleading guilty to the charge on Jan. 14, 2015, Yonkee admitted he filed a Chapter 7 Bankruptcy Petition on Sept. 15, 2008, and by signing a Declaration verified his Petition, all his Schedules, and a Statement of Financial Affairs under penalty of perjury.  According to the written plea agreement, from Sept. 15, 2008 through at least May 8, 2009, Yonkee fraudulently concealed property from the bankruptcy trustee, including his ownership interest in: a business that sold auto parts, automobiles, and motorcycles; the United States Super Truck Racing Series; Bobby Yonkee Racing; as well as other inventory, merchandise, capital, vehicles, and motorcycles.

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

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

CHICAGO ― A Skokie man was indicted last week for international parental kidnapping of his three children and traveling with them to Turkey without their mother’s consent, permission or knowledge.  MURTAZA ALI, 44, of Skokie, was charged with one count of international parental kidnapping by a federal grand jury.  Ali was arrested on May 6 upon his return to O’Hare International Airport with the children, and remains in federal custody.  Ali is scheduled to be arraigned Tuesday, June 2 at 10:00, in front of U.S. District Judge Samuel Der-Yeghiayan.

According to the court documents, Ali is a Pakistani-national, and with individual A, has three minor children.  According to Individual A, on the evening of May 2, 2015, she was at a social gathering.  Ali, along with the three children, was scheduled to pick her up after the event.  He did not pick her up, and when she arrived home, Ali and the three children were not home, the house was a mess, and the passports and luggage were missing.  An investigation by Skokie Police Department determined Ali’s last known location was believed to be near O’Hare Airport.

Ali, along with the three children, boarded a Turkish Airlines flight at O’Hare Airport and arrived in Istanbul, Turkey on May 2.  According to Individual A, Ali called her from Turkey and stated that he had the three children and that he was traveling to Pakistan.  According to information obtained from Turkish Airlines and other law enforcement agents, there was reason to believe that Ali was planning to board a flight from Turkey bound for Karachi, Pakistan, with the children. He was arrested on a federal complaint when he and his three children returned to the United States on May 6.

The arrest and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and William A. Ferrara, Chicago Director of Field Operations, Customs and Border Protection. Skokie Police Department assisted in the investigation.

The government is being represented by Assistant U.S. Attorney Heather McShain.

International parental kidnapping carries a maximum sentence of three years in prison and a $250,000 fine.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  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.

Indictment

CHICAGO ― A former owner and operator of Selectcare Health, Inc., a provider of outpatient physical and respiratory therapy located in Park Ridge and Skokie, was sentenced to federal prison for engaging in a $2.5 million health care fraud scheme. Ankur Roy, 38, of Miami Beach, Florida, was sentenced last Friday to 75 months in prison followed by 3 years of supervision after his release by U.S. District Court Judge Gary Feinerman.  Roy was also ordered to forfeit more than $2.5 million in proceeds he and his codefendants gained by defrauding Medicare and Blue Cross Blue Shield of Illinois.  Roy was ordered to surrender to the Federal Bureau of Prisons on July 15, 2015.  Roy was charged in 2013 with two co-defendants who both pled guilty; Dipen Desai, who was sentenced to 27 months’ imprisonment in December 2014, and Akash Patel, who is scheduled to be sentenced in July.  Roy was convicted of five counts of the indictment by a jury in July 2014.   

Between March and May 2011, Roy and his co-defendants submitted false and fraudulent health insurance claim forms to Medicare and Blue Cross Blue Shield for respiratory therapy services that they knew were never provided to patients. Roy, who proposed the scheme to his co-defendants as a means to extricate themselves from debt, designed the scheme to avoid raising red flags with Medicare and Blue Cross Blue Shield’s fraud detection systems. As a result of these false claims, Medicare and Blue Cross Blue Shield paid defendants over $2.5 million. Defendant took over $600,000 of that sum and used it for his own personal purposes, including for personal expenses, paying off credit card bills and repaying his student loan.

“Defendant Roy’s fraud deprived Medicare and Blue Cross Blue Shield of over $2.5 million, a substantial sum of money that should have gone to pay for medical services for senior citizens, and not to line his and his partners’ pockets,”  Assistant U.S. Attorney Maureen Merin argued at sentencing.

The sentence today was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, Robert J. Holley, Special Agent in Charge of the Federal Bureau of Investigation Chicago; Lamont Pugh III, Special Agent in Charge of the Chicago Regional Office of Health and Human Services, Office of Inspector General; and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago.

The government was represented by Assistant U.S. Attorney Maureen Merin. 

CHICAGO — A former director and a former officer of First Community Bank and Trust in Will County were sentenced for fraudulently making false entries in the bank’s records which generated reports falsely representing that loans were current, when, in fact they were delinquent. MARTIN E. SCHMIDT, JR., 56, of Beecher, was sentenced to 8 months of imprisonment by U.S. District Court Judge Charles Kocoras. DONNA M. BARBER, 53, also of Beecher, was sentenced by U.S. District Court Judge Jorge L. Alonso to one year of supervised release, with the first six months to be served as home confinement. Schmidt and Barber were ordered to pay restitution in the amounts of $1,183,374 and $684,938, respectively. Schmidt must report to the Bureau of Prisons on June 2, 2015. As a result of their convictions, both defendants are also barred from associating with or being employed by a financial institution for ten years.

The defendants together concealed that loans totaling approximately $2.8 million where delinquent, and caused the bank to lose more than $1.1 million. Schmidt was senior vice president for lending and a member of the board of directors of First Community Bank and Trust, which operates in Beecher and Peotone, and co-defendant Barber was vice president for mortgage lending.

Schmidt and Barber were charged together in October 2014 in a criminal information with making false bank reports with intent to defraud. Schmidt pled guilty in November 2014, and Barber pled guilty in December 2014.

“Both defendants were long-time trusted employees of the bank,” argued Assistant U.S. Attorney Brian P. Netols in the government’s sentencing memoranda, “In committing the offense, [they] repeatedly betrayed and violated that trust.”

Schmidt and Barber admitted that they caused and made false entries in the bank’s past due accounts report for September 2009 by intentionally omitting to disclose as past due two customers’ loans and advances in the total principal amount of approximately $2.5 million.

According to court documents, Schmidt was the point of contact for Customer K, and Barber was the point of contact for Customer M, and their compensation was based, in part, on the performance of the loans for which they were each responsible. By September 2008, Schmidt and Barber each knew that Customers K and M were unable to make payments to the bank on their various loans. They agreed that they needed to take action to prevent the delinquent accounts from appearing on the bank’s reports and began concealing their past due nature. The false entries extended from September 2008 until October 2009.

Barber, with Schmidt’s knowledge and approval, and Schmidt made and caused false entries in loan records allowing Customer M to skip payments without paying the interest due and extending notes without interest payments being current. Some false entries were made on a retroactive basis so the actual condition of the loans would not appear on the bank’s current monthly records. With these serious delinquencies concealed, the bank made additional loans to Customer M totaling $708,274, on which he subsequently defaulted.

At Schmidt’s request, Barber also made false entries in the Bank’s records relating to Customer K which allowed loan payments to be improperly skipped and overrode restrictions on additional advances. Schmidt then approved $269,038 in loans to Customer K after Schmidt knew that Customer K was then unable to repay. Schmidt also made unauthorized undocumented advances to Customer K totaling $105,562, paid $22,500 of Customer K’s overdrafts, and issued an unauthorized letter of credit to Customer K in the amount of $80,000.

Finally, Schmidt deceived the bank’s board of directors by leading them to believe that he and Barber were properly managing the bank’s loans, when they were actually fraudulently creating reports that made it appear that the loan portfolio was in better shape than it was.

The sentence was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

ROCKFORD — A Rockford, Ill. man was charged yesterday in federal court with possessing with the intent to distribute narcotic drugs.  ANTHONY ROSS, 34, of Rockford, Ill., was charged with possessing with the intent to distribute cocaine, cocaine base (crack cocaine), and heroin on May 28, 2015.  According to the complaint, Ross was taken into custody outside an apartment on 23rd Street in Rockford.  When law enforcement officers went into the apartment to execute a search warrant, they found $1,205 in cash, two loaded semi-automatic pistols, and numerous packages of cocaine, cocaine base and heroin.  When law enforcement officers went to a second location that day, a residence on Orchard Avenue in Rockford, they found over a kilogram of cocaine and 214 grams of heroin.

ROSS was brought before U.S. Magistrate Judge Iain D. Johnston yesterday for an initial appearance.  He was ordered to be held pending a detention hearing and a preliminary hearing on June 2, 2015, at 2:30 p.m.

Possession with the intent to distribute of the charged narcotic drug Controlled Substances carries a maximum potential penalty of up to 20 years in prison, at least 3 years of supervised release following imprisonment, and a fine of up to $1,000,000.  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 a complaint is only a charge and is not evidence of guilt.  The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The charge was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; CARL VASILKO, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives; JOSEPH P. BRUSCATO, Winnebago County State’s Attorney; and GARY CARUANA, Winnebago County Sheriff.  Officers of the Rockford Police Department assisted in the investigation.

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

Complaint

Chicago --- A drug trafficker who used the illicit website “Silk Road” for worldwide drug sales was sentenced yesterday to 10 years’ imprisonment for selling millions of dollars’ worth of illegal drugs for bitcoins.  The defendant, Cornelis Jan Slomp, 23, of Woerden, the Netherlands, pled guilty in April 2014 to conspiracy to import and distribute various controlled substances worldwide.  Slomp was also ordered to forfeit $3,030,000 in illegal drug proceeds from his criminal enterprise.  Slomp has been in federal custody since his arrest in August 2013.

"The crime is an extraordinarily serious one given the amounts involved, there's no question about that," said U.S. District Court Judge Matthew F. Kennelly said in imposing the sentence.  

Slomp, who operated under the username “SuperTrips,” conducted more than 10,000 illegal online drug transactions and received approximately 385,000 in bitcoins as payment for his illegal drug sales.  By his own admissions and as confirmed by law enforcement’s examination of the data retrieved from the Silk Road server, Slomp was the world’s largest drug trafficker on Silk Road.

Shortly before law enforcement agents shut down the Silk Road web site in August 2013, Chicago Homeland Security Investigations (HSI) agents arrested Slomp when he traveled from the Netherlands to Miami, Florida.  At the time, Slomp had arranged to spin off his United States illegal drug trafficking business to his largest U.S.-based wholesale re-distributor of illegal drugs, Angel William Quinones, of Largo, Florida.  Quinones, who was later arrested, has since pleaded guilty in federal court in Tampa and has been sentenced to 70 months’ imprisonment for his role in Silk Road drug trafficking activity.

According to court documents, for an eighteen-month period from March 2012 through about August 2013, Slomp distributed worldwide approximately: 104 kilograms of powder 3,4-methylenedioxy-N-methylamphetamine (MDMA); 566,000 ecstasy pills containing MDMA; four kilograms of cocaine; three kilograms of Benzodiazepine; and substantial quantities of amphetamine, lysergic acid diethylamide (LSD), and marijuana, in addition to allowing for substantial quantities of methamphetamine, ketamine, and Xanax to be distributed on his SuperTrips Silk Road vendor account. 

“The public is harmed when illegal drugs are sold in the United States as well as in this district.  This harm to the public is magnified when drug traffickers such as the defendant use sophisticated modern technology to reach larger segments of the population as well as to further conceal their identities and criminal activity.  Here, the defendant used one of the most sophisticated dark websites of its time to sell enormous quantities of illegal drugs to wholesale redistributors, retailers, and users of drugs across the country – indeed, throughout the world – in more than 10,000 transactions,” argued Assistant United States Attorney Andrew S. Boutros in the government’s sentencing memorandum. 

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Gary Hartwig, Special Agent-in-Charge of HSI Chicago.

The case was prosecuted by Assistant U.S. Attorney Andrew S. Boutros.

CHICAGO ― The leader of a drug trafficking organization who created and managed a heroin distribution operation run via a hotline telephone between 2008 and 2012 on the city’s west side was sentenced to 20 years in federal prison yesterday, federal law enforcement officials announced.  The defendant, PIERRE HENDERSON, was responsible for supervising the distribution of over 30 kilograms of heroin, a federal judge determined before imposing the sentence.

Henderson, 37, of Chicago, pleaded guilty to conspiracy to distribute heroin in December 2014. U.S. District Judge Ronald A. Guzman imposed the 20-year sentence on Wednesday. Henderson’s brother, Eric Henderson, 35, pleaded guilty to conspiracy to distribute heroin in January 2014. In March 2015, U.S. District Judge Ronald A. Guzman sentenced Eric Henderson to 200 months in federal prison.

The defendant’s organization sold tens of thousands of user quantities to individuals from all over the Chicagoland area, “argued Assistant U.S. Attorney Shoba Pillay in the government’s sentencing memorandum. “His conduct directly contributed to the drug trafficking and attendant violence plaguing the streets of the city of Chicago and the heroin addiction crisis now afflicting this city.”

According to court documents, the Henderson brothers were involved in prolific daily sales of heroin to customers who called into the hotline to order heroin. After placing their phone orders the Henderson brothers’ customers traveled from all over the Chicagoland area to the city’s west-side to purchase heroin from street-level distributors, who worked for the Henderson brothers.

The Henderson brothers were among 8 federal defendants who were arrested in May 2013 following an FBI investigation, code-named Operation Heroin Hotline, of a phone-order heroin trafficking operation. 

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The investigation was led by the FBI and was conducted under the umbrella of the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) in coordination with the Chicago Police Department.  

The government is being represented by Assistant United States Attorneys Shoba Pillay and Lindsay Jenkins. 

CHICAGO — A Naperville man pled guilty today to federal charges he set fire to the Chicago Air Route Traffic Control Center in Aurora on September 26, 2014, federal law enforcement officials announced today. Brian Howard, 37, of Naperville, was charged by information earlier this month with one count of willfully setting fire to, damaging, destroying or disabling an air navigation facility; and one count of using fire to commit a federal felony. Howard will be sentenced on September 11, 2015 by U.S. District Court Judge Gary Feinerman and remains in federal custody since his arrest in September 2014.

According to court documents, Howard was employed by an FAA contractor at the Chicago Air Route Traffic Control Center (the “Control Center”) in Aurora, Illinois. Howard worked on telecommunications matters at the Control Center and at other FAA facilities for approximately eight years.

Howard pled guilty to intentionally damaging and disabling the telecommunication infrastructure at the Control Center, and setting fire to the area which housed these key components.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Carl Vasilko, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The government is being represented by Assistant U.S. Attorney Andrew K. Polovin.

Individuals impacted by the September 26, 2014 fire who wish to receive notice about future court hearings, including sentencing, are encouraged to contact the U.S. Attorney’s Office’s Victim Hotline number at 866-364-2621 (press #3), or by email at usailn.victim.aa@usdoj.gov.

The charge of willfully setting fire to, damaging, destroying or disabling an air navigation facility, or willfully interfering by force or violence with the operation of that facility, likely endangering the safety of aircraft in flight, carries a maximum penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross loss caused by defendant’s actions.

The charge of using fire to commit a federal felony carries a mandatory penalty of 10 years in prison, which must be in addition to any sentence imposed for the underlying felony.

If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

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