Eastern District of Kentucky

LEXINGTON, Ky. – U.S. Attorney Robert M. Duncan, Jr. recognizes the service and sacrifice of federal, state, local, and tribal police officers on the occasion of National Police Week, which is being observed Sunday, May 12 to Saturday, May 18, 2019.

In October 1962, Congress enacted a joint resolution, signed by the President, declaring May 15th as “National Peace Officers Memorial Day,” to honor law enforcement officers killed or injured in the line of duty.  The resolution also created National Police Week, as an annual tribute to law enforcement service and sacrifice. 

“During National Police Week, we celebrate the contributions of police officers from around the country, recognizing their hard work, dedication, loyalty and commitment to keeping our communities safe,” said U.S. Attorney Duncan.   “As the United States Attorney for the Eastern District of Kentucky, I want to salute the work of federal, state, local, and tribal law enforcement, who often face uncertain and dangerous situations without question and without expectation of thanks.  We need them to know they have our unwavering support and appreciation.” 

According to statistics reported to the FBI, 106 law enforcement officers were killed in line-of-duty incidents during 2018, including one officer in the Eastern District of Kentucky.  On March 13, 2018, Pikeville Police Officer Scotty Hamilton was ambushed, shot, and killed during an investigation of a stolen vehicle.  John R. Hall, 56, of Pikeville, pleaded guilty to murdering Officer Hamilton.  Hall was sentenced to life in prison, without the possibility of parole.    

“Officer Hamilton was committed to making Pikeville and the Commonwealth of Kentucky a better place,” said U.S. Attorney Duncan.  “Officer Hamilton was a valued colleague, working with the FBI and United States Attorney’s Office, and he tirelessly endeavored to protect the public and to pursue justice.  He gave his life in service to his community and we can never forget Officer Hamilton’s ultimate sacrifice.”   

Comprehensive data tables about officers killed in line-of-duty incidents and brief narratives describing the fatal attacks are included in Law Enforcement Officers Killed and Assaulted, 2018 https://ucr.fbi.gov/leoka/2018/, which was released this week by the FBI.

The names of all 106 fallen officers nationwide will be formally dedicated, on the National Law Enforcement Officers Memorial in Washington, DC, during the 31st Annual Candlelight Vigil, on the evening of May 13, 2019.  No tickets are required and everyone is welcome.  For additional information, please call 202-737-3400.

The Candlelight Vigil is one of many commemorative events taking place in the nation’s capital during National Police Week 2019.  For more information about other National Police Week events, please visit www.policeweek.org. 

In the Eastern District of Kentucky, events are planned to honor law enforcement officers in conjunction with National Police Week.  On May 15, 2019, the Northern Kentucky Police Memorial Service will be held at 10:00 a.m., at the Northern Kentucky Police Memorial, Foot of the Suspension Bridge, Covington, KY.  The Kentucky Law Enforcement Memorial Foundation’s Memorial Ceremony is scheduled for May 23, 2019, at 11:00 a.m. at the Department of Criminal Justice Training, on the campus of Eastern Kentucky University, in Richmond. 

 

LEXINGTON, Ky. — Diontre Lawayne Davis, 24, of Fort Worth, Texas, was sentenced yesterday, to 46 months in federal prison, by United States District Judge Danny C. Reeves, for threatening communications. 

Davis previously admitted that, from August to October 2016, he posted death threats to a student at the University of Kentucky (UK), via Twitter.  Law enforcement became aware of the threats; and in November 2017, Davis came to the UK campus armed with a concealed handgun.  Due to the nature of the threats, UK evacuated the area until law enforcement confirmed the threat had been alleviated.            

Under federal law, Davis must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for a term of three years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge of the FBI; and Joe Monroe, University of Kentucky Chief of Police, jointly made the announcement.

The investigation was conducted by the Federal Bureau of Investigation and the University of Kentucky Police.  The United States was represented by Assistant United States Attorney Cynthia T. Rieker.

LEXINGTON, Ky. – Adam Ray Dodson, 38, of Winchester, Kentucky, was sentenced to 79 months in federal prison on Monday, by United States District Judge Joseph M. Hood, for distributing quantities of methamphetamine and selling firearms in Clark County, Kentucky, in October and November of 2017.

Dodson had previously plead guilty to charges of distribution of 50 grams or more of methamphetamine, possession of a firearm by a convicted felon, and sale of a firearm to a convicted felon.  Between October and November of 2017, Dodson, conducted multiple sales of methamphetamine, totaling over 200 grams in Winchester.  In addition to the sales of methamphetamine, Dodson was found to have illegally possessed and sold firearms to an individual he also knew to be a convicted felon.

Under federal law, Dodson must serve 85 percent of his sentence. Upon completion of his imprisonment, he will be under the supervision of the United States Probation Office for a period of four years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart L. Lowery, Special Agent in Charge, ATF, Louisville Field Division; Commissioner Richard Sanders, Kentucky State Police; and Sheriff Berl Perdue, Jr., Clark County Sheriff, jointly made the announcement.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

 

COVINGTON, Ky. – Late yesterday, Ashland cardiologist Dr. Richard E. Paulus was sentenced, by U.S. District Court Judge David L. Bunning, to serve 60 months in federal prison for health care fraud and false statements.  In October 2016, a federal jury convicted Paulus, 71, of one count of health care fraud and ten counts of making false statements relating to health care matters, after hearing evidence that Paulus defrauded Medicare, Medicaid, and private insurers, by implanting medically unnecessary stents in his patients and falsifying the degree of stenosis in their medical records.  After the trial, the district court granted Paulus’s motion for an acquittal.  The Sixth Circuit Court of Appeals later reversed that decision, on June 25, 2018, and reinstated Dr. Paulus’s conviction, resulting in his formal sentencing.

According to evidence presented at trial, from 2008 to 2013, Paulus performed invasive heart procedures on patients who did not need them.  In order to justify these unnecessary procedures, Paulus falsified patients’ medical records, exaggerating their medical condition and making it appear that the heart procedures were necessary and qualified for payment.  From 2006 to 2012, Paulus billed Medicare for more heart procedures than any other cardiologist in Kentucky, and was fifth in the nation in terms of amount paid by Medicare for stent procedures.

Paulus’s sentence was based on stents he placed in seventy-one patients whose blockages were significantly less than 70 percent, where Paulus recorded them at or near 70 percent in the records, in order to be paid for the procedures.  These medically unnecessary procedures were performed during his tenure at King’s Daughters Medical Center in Ashland.           

In addition to his term of imprisonment, Paulus must pay $1.1 million in restitution to Medicare, Medicaid, and other private insurers who were financial victims of his scheme.  Under federal law, Paulus must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for three years following release.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, Derrick L. Jackson, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Division; James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation, Louisville Division, and Andy Beshear, Kentucky Attorney General, jointly announced the sentence.

The investigation was conducted by FBI and the Department of Health and Human Services, and the Kentucky Office of Attorney General-Medicaid Fraud and Abuse Control Unit. Former Assistant United States Attorney Andrew Sparks and Assistant United States Attorney Kate Smith prosecuted the case on behalf of the federal government. 

 

 

LEXINGTON, Ky. – A Lawrenceburg, Ky., man was indicted today for threatening a school shooting, making threats to and intimidating other individuals over social media, illegally possessing a firearm in furtherance of those threats, and related crimes.          

A federal grand jury in Lexington returned an indictment charging 21-year-old Dylan Lee Jarrell with three counts of threatening interstate communications, two counts of cyberstalking, one count of false statements, and one count of possession of a firearm in furtherance of a crime of violence.          

The indictment alleges that Jarrell used the internet site Reddit, in May 2018, to post a statement that was interpreted as a threat to attack a school and injure its occupants, and that he then lied to an FBI agent to conceal his activities.  According to the indictment, in July and September 2018, Jarrell also used Instagram to make a series of threatening and harassing statements to an individual identified as D.B.  Finally, in October 2018, Jarrell used Facebook to harass and intimidate an individual identified as K.B.  The indictment alleges that Jarrell obtained and possessed an AR-15 rifle in furtherance of his threats to the school and to D.B. 

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation; and Richard W. Sanders, Commissioner, Kentucky State Police jointly announced the indictment.

The investigation preceding the indictment was conducted by the Federal Bureau of Investigation and the Kentucky State Police. The indictment was presented to the grand jury by Assistant U.S. Attorney Andrew T. Boone. 

A date for Jarrell to appear in court has not yet been scheduled.  He faces up to five years in prison for each threatening interstate communication count, up to five years in prison for each cyberstalking count, up to eight years in prison for the false statements count, and not less than five years in prison for the firearms possession count.  Each count carries a maximum fine of $250,000.  However, any sentence following a conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes. 

Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.

 

Lexington — A federal jury has found Patsy Wardle, a 65 year old woman from Richmond, Kentucky, guilty of conspiring to distribute oxycodone. The jury also found Wardle guilty of two additional counts of distributing oxycodone on February 16, 2018 and March 7, 2018. The jury convicted Wardle on Wednesday, April 24, 2019, following a 3-day trial in U.S. District Court.

According to trial testimony, Wardle and her co-conspirators, Shannon Allen, Bianca Pennington, Malik Chapman, and others, worked together to distribute oxycodone throughout Richmond, Kentucky and surrounding areas. Chapman and others were responsible for transporting oxycodone pills from Detroit, Michigan to Richmond, Kentucky, where Allen and Pennington would further distribute the pills to local drug dealers, like Wardle. Wardle primarily distributed the pills from her home in Richmond.

Wardle’s co-defendants, Shannon Allen, Bianca Pennington, Malik Chapman, Robert May, Doug Mayfield, Ryan Jones, Alyssa Parrish, and Victoria Grimes all pleaded guilty to conspiring to distribute oxycodone prior to trial.

Wardle is scheduled to be sentenced on August 29, 2019, at the federal courthouse in Lexington. Wardle and her co-defendants face sentences of imprisonment of not more than 20 years. The Court will impose a sentence after consideration of the U.S. Sentencing Guidelines and the applicable federal statutes.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Christopher Evans, Special Agent in Charge, DEA, Louisville Field Division; Commissioner Richard Sanders, Kentucky State Police; Chief James Ebert, Richmond Police Department; Sheriff Mike Coyle, Madison County Sheriff’s Department; and Chief David Gregory, Berea Police Department jointly announced the jury’s verdict.

 LEXINGTON, Ky. – Kloud Logan Jones, 27, of Mt. Sterling, Kentucky, was sentenced today, to 25 years in federal prison, by United States District Judge Danny C. Reeves, for distributing fentanyl that caused a death.

Jones previously pleaded guilty to the charge, admitting that, on November 23, 2017, he distributed the lethal drug to an individual identified as R.A.S., while both were confined as inmates at the Montgomery County Regional Jail.  Video surveillance from the jail captured the incident.

Under federal law, Jones must serve 85 percent of his sentence.  Upon completion of his imprisonment, he will be under supervision by the United States Probation Office for a term of three years.           

“We continue to confront the tragedy of the opioid epidemic,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.   “Those who distribute these dangerous drugs need to understand that we are committed to combatting this problem, to using all the tools available to us, and to prosecuting those who further this loss of life through their criminal conduct.  This conduct has serious consequences and we will be vigilant in our efforts to confront this challenge.”

U.S. Attorney Duncan; Darrell Christopher Evans, Special Agent in Charge, DEA Louisville; and David Charles, Montgomery County Sheriff, jointly made the announcement.  Assistant United States Attorney Todd Bradbury prosecuted the cases on behalf of the United States.

LEXINGTON, Ky. – Robert M. Duncan, Jr., the U.S. Attorney for the Eastern District of Kentucky, has announced his support for the DEA and Lexington Police Department, in their National Prescription Drug Take Back Day, on Saturday, April 27th, from 10 a.m. to 2 p.m., and his encouragement to the public to participate in the event.  The DEA and local agencies will be providing a 17th opportunity, in the past 9 years, to take an easy step toward preventing pill abuse and theft, by ridding their homes of potentially dangerous expired, unused, and unwanted prescription drugs. 

Bring your pills for disposal to the following site:

 Lexington - Kentucky American Water, 2300 Richmond Rd.

The DEA cannot accept liquids, needles, or sharps, only pills or patches.  The service is free and anonymous, no questions asked.

“I strongly support the efforts of DEA and our other law enforcement partners in reducing unlawful access to prescription drugs,” stated U.S. Attorney Duncan.  “The DEA and the other agencies involved in Take Back Day provide a vital resource in fighting the opioid problem in the Commonwealth.  Far too often, the path to addiction starts with experimentation with legitimately prescribed prescription opioids found in the home.  By participating in Take Back Day and disposing of unused pills, you can help prevent a loved one from misusing or abusing prescription drugs.” 

At a time when prescription opioid pain relievers are killing more Americans than car accidents, the National Prescription Drug Take-Back Day is an easy way we can all make sure that our unneeded, unused, or expired medications don’t end up in the wrong hands,” said D. Christopher Evans, Special Agent In Charge of DEA’s Louisville Field Division.

Rates of prescription drug abuse in the United States continue to be alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. The majority of prescription drug abusers say they get their drugs free from friends and family, including from the home medicine cabinet. Take Back Day is a unique opportunity for Americans to protect their homes and medicine cabinets from theft and abuse.

National Take Back Day has received enthusiastic public support since its inception in 2010. Last October, the public turned in 457 tons (914,236 pounds) of prescription drugs at more than 5,800 sites operated by the DEA and nearly 4,800 of its local and tribal partners.  

For more information about the disposal of prescription drugs or about the April 27th Take Back Day event, go to www.DEATakeBack.com.

COVINGTON, Ky. — Gregory Pritchett, 47, of Covington, was sentenced today, by United States District Judge David L. Bunning, to a total of 242 months in federal prison, for unlawfully possessing a firearm.  

Pritchett pled guilty in November 2018, and admitted selling heroin and fentanyl to a confidential informant.  A search of his home revealed additional drugs and a loaded Smith & Wesson .40 caliber pistol.  Pritchett is a convicted felon and prohibited from possessing firearms under federal law.  He was also on supervised release for a prior federal firearms conviction at the time of the commission of this offense.  Judge Bunning sentenced Pritchett to 188 months for possession of the firearm and an additional 54 months for violating the terms of his supervised release.         

Under federal law, Pritchett must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for a term of five years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation (FBI), jointly made the announcement. 

The investigation was conducted jointly by the FBI and the Covington Police Department.  The United States was represented by Assistant United States Attorney Elaine K. Leonhard.

LEXINGTON, Ky. — Keith A. Jefferson, 26, of Lexington, was sentenced today, to 100 months federal in prison, by United States District Judge Karen K. Caldwell, for possession of a firearm by a convicted felon. 

In January 2018, the Lexington Police Department investigated an active disorder with a firearm on Charles Avenue.  During a domestic dispute, Jefferson fired a shot into a residence, to gain entry.  On January 9, 2019, Jefferson entered a guilty plea, admitting to illegally possessing two firearms.   Jefferson has prior convictions, for assaultive behavior and carrying concealed weapons.

Under federal law, Jefferson must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for three years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge of the ATF Louisville Field Division; and Lawrence Weathers, Chief of the Lexington Police Department, jointly made the announcement.

The ATF and the Lexington Police Department conducted the investigation.  The United States was represented by Assistant United States Attorney Cynthia T. Rieker.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

LEXINGTON, Ky. - A Whitesburg, Kentucky couple have been sentenced to 30 months in federal prison, for defrauding the Social Security and Medicaid programs.           

Yesterday, Chief U.S. District Judge Caldwell sentenced married couple Harry Taylor, 63, and Betty Taylor, 64, for conspiracy to commit mail and wire fraud, theft of government funds, and falsifying and concealing a material fact in connection with health care benefits.           

The Defendants were both found guilty at trial, in September of 2018.

The evidence at trial established that, over a period of several years, the Defendants repeatedly misled the Social Security Administration about their financial resources, in order to receive more than $40,000 in direct payments for Supplemental Security Income Disability (“SSI”) benefits, which they were not entitled to receive.  Their improper qualification for SSI benefits also led to the unlawful receipt of Medicaid benefits, of more than $150,000, during the same period.  The Defendants were also found to have engaged in obstruction of justice, by falsifying documents and evidence introduced at the trial.

“This case represents an example of the consequences of defrauding important government programs,” said Robert M. Duncan Jr., United States Attorney for the Eastern District of Kentucky.  “This theft of benefits frustrated the purpose of these programs and depleted the limited resources available to assist proper beneficiaries of assistance.  It has now resulted in prison sentences.  Due to the quality work of SSA-OIG, these defendants will now be held accountable.”

“The Social Security Office of the Inspector General is committed to protecting Supplemental Security Income payments and related benefits, and to pursuing individuals who exploit government programs that exist for those who truly need them,” said Wayne R. Warren, Acting Special Agent-in-Charge of the SSA OIG Atlanta Field Division. “We thank the U.S. Attorney’s Office for prosecuting this case, and we will continue to work with our law enforcement partners to investigate cases of government benefit fraud.” 

Under federal law, the Defendants must serve 85 percent of their prison sentences and will be under the supervision of the U.S. Probation Office for three years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge of the FBI; Wayne R. Warren, Acting Special Agent in Charge, Atlanta Field Division of the Social Security Administration, Office of Inspector General, and Andy Beshear, Attorney General of Kentucky, jointly made the announcement.

The investigation was conducted by the FBI, the SSA-OIG, and the Kentucky Office of the Attorney General.  The United States was represented by Assistant U.S. Attorneys Erin Roth and Ken Taylor.

LONDON, Ky. –  Eric “Big E” Flores, 38, of San Angelo, Texas, and Salomon Martinez, 44, of Eagle Pass, Texas, were convicted by a federal jury yesterday of Assault of a Federal Inmate with a Dangerous Weapon.

The proof at trial established that the Defendants were members of the MEXIKANEMI, Texas Mexican Mafia, and participated in the assault of an Arizona Mexican Mafia member.  On June 17, 2018, within United States Penitentiary (USP) Big Sandy, in Inez, Kentucky, the Defendants repeatedly stabbed the victim, in his back, leg, and arm, with shanks.  In addition to multiple stab wounds, the victim also sustained a fractured left scapula.

Two co-defendants, Rodney “Joker” Galindo, 38, of Odessa, Texas, and Michael “Taz” Morin, 52, of Austin, Texas, fellow MEXIKANEMI members, pled guilty in March to the attempted murder of another Arizona Mexican Mafia member.  The second victim suffered a hematoma in the right frontal lobe, depressed skull fracture, midline shift, and extra-axial hemorrhages.  The two assaults happened simultaneously, within a cell block, on June 17, 2018.        

Galindo and Morin face up to twenty-five years in prison.  Flores and Martinez face up to ten years in prison. 

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky and Hector Joyner, Warden of USP Big Sandy, jointly made the announcement.  The investigation was conducted by the USP Big Sandy Special Investigative Services Office.  The United States was represented by Assistant United States Attorney Jenna E. Reed. 

LEXINGTON, Ky. — Kevin Scott Abney, 40, of Irvine, Kentucky, was sentenced Friday, to 240 months in federal prison, by United States District Judge Danny C. Reeves, for possession with intent to distribute fentanyl, possession of a firearm in furtherance of drug trafficking, and possession of a firearm by a convicted felon. 

In June 2018, officers with the Berea Police Department arrested Abney at a business in Berea, Kentucky.  During the arrest, officers located 15 grams of fentanyl and two firearms.  During his guilty plea, Abney admitted to possessing of the fentanyl and firearms. Abney has seven prior felony convictions, including four crimes of violence, which qualified him as an Armed Career Criminal.             

Under federal law, Abney must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for 5 years.

“The defendant’s lengthy criminal history, coupled with his intent to distribute the deadly drug fentanyl while armed, led to his twenty-year sentence,” stated United States Attorney Robert M. Duncan, Jr.   “This sentence should send a message:  armed drug trafficking has serious consequences and our Office will continue to make prosecution of these cases a core priority.  Because of the good work of law enforcement, an armed, dangerous, and repeat offender has been held accountable for his criminal conduct, and our community is safer.”

“ATF is committed to reducing gun violence in our neighborhoods by arresting violent offenders who unlawfully possess firearms,” stated ATF Special Agent in Charge Stuart Lowrey of the Louisville Field Division. “Today’s sentencing of an armed career criminal, is the result of an ongoing commitment by ATF to work with our law enforcement partners to make our communities safer for everyone.”

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge of the ATF Louisville Field Division; and David Gregory, Chief of the Berea Police Department, jointly made the announcement.

The ATF and the Berea Police Department conducted the investigation.  The United States was represented by Assistant United States Attorney Cynthia T. Rieker.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

ASHLAND, Ky. — Kimberly Dawn Moore, 26, of Flat Woods, Kentucky, was sentenced today, to 120 months in federal prison, by United States District Court Judge David L. Bunning, for conspiracy to distribute heroin. 

In August 2017, the Huntington FBI Task Force, in conjunction with the Kentucky State Police and the Ashland Police Department, seized 876 grams of heroin.  The heroin had been transported from Detroit to Huntington, W.Va., as part of a conspiracy involving Moore and her co-defendants, Eric Minter and Leonard Wright, which ranged from June 2017 to August 2017.  Wright and Minter organized the heroin deliveries, which were completed by Moore and an additional co-defendant.  The heroin was then distributed in the Tri-State area.  Moore has two prior convictions for drug trafficking in the Greenup Circuit Court.          

Under federal law, Moore must serve 85 percent of her prison sentence; and upon her release, she will be under the supervision of the United States Probation Office for eight years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Robert Allen Jones, Special Agent in Charge, FBI Pittsburgh Field Office; Richard Sanders, Commissioner of the Kentucky State Police; and Todd Kelly, Chief of the Ashland Police Department,, jointly made the announcement.

The FBI, Kentucky State Police, Ohio State Police, and the Ashland Police Department conducted the investigation.  The United States was represented by Assistant United States Attorney Cynthia T. Rieker.

LEXINGTON, Ky. – The Lee County Fiscal Court (“Lee County”) and the former director of its ambulance service, Joseph Broadwell, have agreed to resolve civil allegations that Lee County Ambulance violated the False Claims Act, a federal law that prohibits the submission of false or fraudulent claims, agreeing to pay $253,930 to the federal government.

The agreement resolves a civil lawsuit that was filed by the United States against Lee County and Broadwell, on September 14, 2018.  In the lawsuit, the United States alleged that the ambulance service, at Mr. Broadwell’s direction, submitted over one thousand false claims to Medicare, seeking payment for unnecessary non-emergency ambulance transports, from January 2013 to June 2016.  Medicare pays for non-emergency ambulance transports only if the patient’s condition is such that taking other forms of transportation would endanger the patient’s health.  The United States alleged that Lee County and Broadwell knowingly disregarded the Medicare rules related to ambulance transports, despite having received years of training on these rules, and submitted claims to Medicare for the transport of patients to and from dialysis clinics without the required medical need.  The United States further alleged that the ambulance service and Broadwell made false statements in the medical records supporting the patients’ medical conditions, to secure the reimbursement.

As part of the agreement, Lee County and Broadwell acknowledged that they engaged in this conduct, including the submission of false claims and the creation of false records.  In the reaching the agreement, Lee County admitted to submitting false claims to Medicare for non-emergency ambulance transports of two patients to and from dialysis treatment.  The transports, which occurred from January 1, 2013, to June 15, 2016, resulted in the submission of over one thousand false claims for reimbursement.  Lee County also admitted that it made, or caused to be made and used, false records related to the medical conditions of the patients.  Lee County acknowledged that the claims for reimbursements submitted to Medicare were done with a reckless disregard for the truth or falsity of the information submitted.  Lee County agreed that its conduct caused damage to the United States. 

Last year, the United States entered into additional settlement agreements, with paramedic Daniel Williams, who served as Lee County Ambulance’s Captain of Operations, and Lee County’s third-party billing company, Medical Claims Assistance, Inc., to resolve allegations that they also violated the False Claims Act, by causing Lee County’s submission of the false claims.  Through these combined agreements, the United States has recovered over $515,000 in connection with Lee County’s submission of false claims to Medicare and Medicaid.

“Lee County Ambulance admitted it submitted false claims to the Medicare Program and received improper payments,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “Unfortunately, this conduct represents another example of a common ambulance service scheme, one where Medicare pays hundreds of thousands of dollars to transport patients who simply had no need for an ambulance.  No matter who submits them, the payment of false or fraudulent claims damages the public and reduces the limited tax dollars available to pay legitimate claims intended to help program recipients.  The public deserves a watchful eye to prevent the submission of false or fraudulent Medicare claims, and our Office will continue to do its part in that effort.”

 “Medicare only pays for ambulance transports when a patient cannot be safely transported by other means,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General. “This company billed for patients who could walk unassisted and did not need a stretcher to get them to their medical appointments."  

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the Office of the Kentucky Attorney General’s Medicaid Fraud and Abuse Control Unit.  Assistant United States Attorneys Jennifer Williams and Mary Melton handled the matter for the United States.

COVINGTON, Ky. — Kerry M. Kennedy, 30, of Florence, Kentucky, was sentenced Thursday to 12 years in federal prison, by United States District Judge David Bunning, for Transportation of Child Pornography. 

Kennedy previously admitted that, in July 2018, he posted approximately 88 videos depicting sexually explicit images of children to his online Dropbox account.  Law enforcement found hundreds more images of child pornography after executing search warrants on this same account.  In his guilty plea, Kennedy also admitted that he used messaging applications such as “Kik” and “Chat Now!” to get and share child pornography with others.  He confirmed that when he downloaded files from these applications, they would automatically upload to his Dropbox account.             

Under federal law, Kennedy must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for a term of 15 years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown, Jr., Special Agent in Charge of the FBI jointly made the announcement.

The investigation was conducted by the Federal Bureau of Investigation.  The United States was represented by Assistant United States Attorney Wade T. Napier.

LONDON, Ky. – Sharon Hall, 68, of East Bernstadt, Kentucky was sentenced Wednesday, in United States District Court in London, on convictions for bank fraud and aggravated identity theft.  United States District Judge Gregory Van Tatenhove sentenced Hall to 24 months imprisonment, on the aggravated identity theft conviction, which will run consecutively to 12 months, on the bank fraud conviction, for a total of 36 months in federal prison.

Hall was convicted by a jury, in January, 2018.  The proof at trial established that, during a period of 18 months around 2007 and 2008, Hall applied for and received student loans from at least six different lenders, in the names of her children, niece, and nephew, without their knowledge.  She forged the names of the students on loan applications and altered payroll documents to defraud the banks.  She received over $93,000 on at least 11 different loans.  She paid back approximately $23,000 on the loans, before the remaining amounts were written off by the lenders, resulting in bank losses of approximately $70,000.  Hall was ordered to pay restitution to the banks and the students whose names she used. 

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, G. Michael Ishee, II, Assistant Special Agent in Charge of the U.S. Department of the Interior, Office of Inspector General (DOI OIG), and Edd Cole, Acting Special Agent in Charge of the U.S. Department of Education, Office of Inspector General, Midwest Regional Office (DOE OIG), jointly announced the sentence.

 “I commend the efforts of DOI OIG and DOE OIG for jointly pursuing this investigation, which led to the defendant being held accountable for her fraudulent conduct,” said United States Attorney Duncan.  “The defendant now faces the consequences of her criminal actions.”       

“This verdict and sentencing are the direct result of two Federal investigative agencies working collaboratively to ensure the integrity of their designated Federal programs and personnel,” said Assistant Special Agent in Charge Ishee.  “The DOI OIG is committed to working closely with our partner OIGs, including the U.S. Department of Education OIG, on behalf of the American taxpayers.  This investigation and sentencing are significant in our continued efforts to combat fraud, waste and mismanagement within the DOI.”  

“Accountability applies to everyone, and this is especially true for Federal employees, as we work on behalf of the American people,” said Acting Special Agent in Charge Cole.  “That’s why I’m proud of the work of OIG special agents and our law enforcement colleagues in holding Ms. Hall accountable for her criminal actions.”

The investigation was conducted by the DOI OIG and the DOE OIG and Assistant United States Attorneys Ken Taylor and Erin Roth represented the United States.

LONDON, Ky. – A federal grand jury has indicted 19 individuals from Laurel, Knox, Whitley, and Jefferson Counties, on drug trafficking and firearm offenses, in indictments that were unsealed today.  The following individuals were named in the indictments:

•           Jonathan Harper, 27, Louisville, Kentucky;

•           Derwin Julien, 25. Louisville;

•           Daniel Nantz, 29, Woodbine, Kentucky;

•           Lawrence Collinsworth, 36, Gray, Kentucky;

•           Cortez Evans, 27, Louisville;

•           Tasha Wernicke, 36, Corbin, Kentucky;

•           Jordan Britt, 29, Louisville;

•           Scott Hensley, 37, Corbin;

•           Amy Mosley, 41, Bernstadt, Kentucky;

•           Lindsey Rose, 30, Williamsburg, Kentucky;

•           Darryl Moore, 46, Corbin;

•           Thorold Johnson, 27, Corbin;

•           Bobby Hamilton, 38, Pineville, Kentucky;

•           Rickie Eubanks, 41, Corbin;

•           Charles Warfield, 50, Artemus, Kentucky;

•           Eddie Hoskins, 39, Corbin;

•           David Lowe, 37, Gray;

•           Justin Collins, 30, Corbin; and

•           Ralph Jones, 56, Barbourville, Kentucky.

The indictments stem from a nine-month investigation by the ATF, into methamphetamine and firearms trafficking.    According to the indictments, the defendants engaged in a conspiracy to distribute methamphetamine in and around Laurel, Knox, and Whitley Counties.  The indictments further allege that defendants trafficked firearms, used firearms during their drug trafficking transactions, and illegally possessed firearms.

The charged individuals are each awaiting their initial appearance in federal court.  

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Stuart Lowrey, Special Agent in Charge ATF, jointly made the announcement. 

The investigation was conducted by the ATF, with substantial assistance from the Corbin Police Department, Knox County Sheriff’s Department, and Kentucky State Police.  The United States is represented by Assistant United States Attorney Jenna E. Reed.     

An indictment by a grand jury is an accusation only, and individuals charged in an indictment are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

 

LEXINGTON, Ky. – Defendants in two separate indictments entered guilty pleas Monday, to distributing controlled substances that resulted in death.  In Lexington, Daikuan Miller, 23, pleaded guilty to distributing fentanyl that resulted in an overdose death, before Senior District Judge Joseph M. Hood.  Miller admitted that, on August 19, 2018, he distributed the lethal drug to an individual identified as W.M.  The Nashville Police Department, the Lexington Police Department, and the Drug Enforcement Administration (DEA) jointly investigated the case.

In a separate matter in Frankfort, Kari Yount, 31, pleaded guilty to distributing heroin that resulted in an overdose death, before District Judge Gregory F. Van Tatenhove.  Yount admitted that she distributed heroin to an individual identified as C.N.M.. The Frankfort Police Department and the DEA jointly investigated the death, which led to the federal charges.

Both defendants face a mandatory minimum sentence of 20 years in federal prison, and a maximum sentence of life imprisonment.  Sentencing for Miller will occur in Lexington, on July 8, 2019; sentencing for Yount will occur in Frankfort, on July 24, 2019.

“The illegal distribution of opioids, particularly heroin and fentanyl, is a crisis,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “These drugs are killing Americans at a rate faster than car accidents, and one critical piece in our comprehensive approach to combatting this epidemic is to aggressively prosecute those who illegally sell this poison.  Our Office remains committed to seeking justice for the families who have suffered so much from this illegal trade.  The commitment of our law enforcement partners is also vital to the effort, and is what made these prosecutions possible.”

U.S. Attorney Duncan; Darrell Christopher Evans, Special Agent in Charge, DEA Louisville; Charles Adams, Interim Chief of Police, Frankfort Police Department; and Lawrence Weathers, Chief of Police, Lexington-Fayette County Division of Police, jointly announced the guilty pleas. Assistant United States Attorney Todd Bradbury prosecuted both cases on behalf of the United States.

ASHLAND, Ky. — Eric Lavell Minter, 33, of Huntington, West Virginia, was sentenced Wednesday, to 240 months in federal prison by United States District Judge David L. Bunning, for conspiracy to distribute heroin. 

In August 2017, law enforcement members of the Huntington FBI Task Force, in conjunction with the Kentucky State Police and the Ashland Police Department, seized 876 grams of heroin, which was transported from Detroit to Huntington.  Minter, and a co-defendant, Leonard Wright, orchestrated the delivery of heroin, from June 2017 to August 2017.  The heroin was then distributed in the Tri-State area.  Minter has prior convictions for drug trafficking in West Virginia state and federal courts.

Under federal law, Minter must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for 8 years.  Wright pleaded guilty and was previously sentenced to 156 months in prison and 4 years of supervised release.  

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Robert Allen Jones, Special Agent in Charge, FBI Pittsburgh Field Office; Richard Sanders, Commissioner of the Kentucky State Police; and Todd Kelly, Chief of the Ashland Police Department, jointly made the announcement.

The FBI, Kentucky State Police, and the Ashland Police Department conducted the investigation.  The United States was represented by Assistant United States Attorney Cynthia T. Rieker.

LEXINGTON, Ky. - A Cynthiana man, who previously admitted to attempting to entice minors to permit him to engage in illicit sexual conduct, has been sentenced to 210 months in federal prison.           

Today, U.S. District Judge Gregory F. Van Tatenhove sentenced Jeremy Wayne Martinez, 28, for using the Internet, with his cellular telephone, to knowingly attempt to persuade, induce, entice, and coerce a minor, to engage in sexual activity.

According to the plea agreement, Martinez previously admitted to communicating with an undercover law enforcement agent, who responded to an ad Martinez had posted on Craigslist.com.  The undercover officer portrayed herself as the mother of two daughters, ages three and seven.  Martinez engaged in text conversations on Kik Messenger, during which he indicated his interest in engaging in sexual intercourse with both of the fictitious minors.  He traveled to a meeting place, in Frankfort, designated by the undercover officer, on October 19, 2017.  He was arrested at that time.  Martinez admitted that he was the person who had been communicating with the officer, and that those communications contained sexually explicit conversations.  

Martinez pleaded guilty to the charge in October of 2018.           

Under federal law, Martinez must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for 25 years, following his release from federal prison.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Richard F. Ferretti, Special Agent in Charge, Louisville Field Office, United States Secret Service, and Kentucky Attorney General Andy Beshear jointly announced the sentence.

The investigation was conducted by the United States Secret Service and the Cyber Crimes Branch of the Office of the Attorney General of Kentucky.  Assistant U.S. Attorney David A. Marye represented the federal government in the case.

PIKEVILLE, Ky. — Danny Porter, of Salyersville, Kentucky, was convicted by a federal jury this week, for conspiring with two Indiana women to traffic oxycodone pills in Magoffin County.  The jury also convicted Porter of possessing oxycodone pills with the intent to distribute them.  Porter was acquitted of a firearm offense.

The proof at trial established that, for two years, Porter had been making monthly trips to Indiana to obtain hundreds of oxycodone pills, which he brought back to sell in Magoffin County.  The investigation culminated in a search of Porter’s residence, where oxycodone pills, twenty firearms, and over $40,000 in cash were seized.   

Katherine Redlark and Tonya Owens, both of Indiana, were subsequently stopped in Magoffin County and found to be in possession of over two hundred oxycodone pills that they were preparing to sell to Porter.  Both Redlark and Owens have previously pled guilty to conspiring with Porter to distribute oxycodone. 

Porter faces up to twenty years in prison.          

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Federal Bureau of Investigation Special Agent in Charge for the Louisville Field Division; Richard Sanders, Kentucky State Police Commissioner; Carson Montgomery, Magoffin County Sheriff; and Christopher Edmonds, Chief of the Pikeville Police Department, jointly made the announcement.  The United States was represented by Assistant United States Attorney Andrew H. Trimble.

 

COVINGTON, Ky. — Dante Marice Martin, 37, of Cincinnati, Ohio, was sentenced on Thursday to 7 years in federal prison by United States District Judge David L. Bunning for conspiracy to distribute and possession with intent to distribute heroin, fentanyl and acetyl fentanyl. 

Martin previously pleaded guilty and admitted that from May through his arrest in June 2018, he conspired with his co-defendants to distribute and possess with intent to distribute 100 grams or more of heroin, 40 grams or more of fentanyl, and 10 grams or more of acetyl fentanyl, an analogue of fentanyl.  Martin sold these drugs to undercover law enforcement working with the Northern Kentucky Drug Strike Force on four separate occasions.  At the fourth and final undercover sale on June 27, 2018, Martin was arrested immediately after he sold 60 grams of the substance for $5,100.  He had driven from Cincinnati, Ohio to Kenton County, Kentucky, with his girlfriend and three young children in the vehicle to complete the sale.  

Under federal law, Martin must serve 85 percent of his prison sentence, and, upon release, will be under the supervision of the United States Probation Office for a term of 5 years. 

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Timothy Plancon, Special Agent in Charge, Drug Enforcement Administration made the announcement after the sentencing.

The investigation was conducted by the Drug Enforcement Administration and the Northern Kentucky Drug Strike Force.  The United States was represented by Assistant United States Attorney Wade T. Napier.

LONDON, Ky. – Jason A. Cottongim, 39, of Manchester, Kentucky, was sentenced yesterday, to 147 months in federal prison, by United States District Judge Robert E. Wier, for possession with the intent to distribute Xanax, being a felon in possession of firearms, and using firearms in furtherance of drug trafficking.  Judge Wier also ordered Cottongim forfeit $16,148 in cash, two firearms, and ammunition.

On April 26, 2018, Cottongim was discovered in the Save-a-lot parking lot in Manchester, armed with a loaded Smith & Wesson pistol in his pocket and a loaded semi-automatic M-11 at his feet.  After rendering a hoax explosive device safe, law enforcement officers seized over 319 Xanax pills, $16,148 in cash, digital scales, distribution baggies, and ammunition from the vehicle.

Cottongim entered a guilty plea to all the charges, during his trial, in November of 2018.  Under federal law, Cottongim must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for five years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge ATF; Chris Fultz, Chief Manchester Police Department; Richard Sanders, Commissioner of the Kentucky State Police; and Patrick Robinson, Clay County Sheriff; jointly made the announcement.

The investigation was conducted by the ATF, Manchester Police Department, KSP, and the Clay County Sheriff’s Office.  The United States was represented by Assistant United States Attorney Jenna E. Reed.

Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

The Justice Department today announced that it has filed a lawsuit alleging that Gus Crank, manager of a residential rental property in Dayton, Kentucky, sexually harassed female tenants in violation of the federal Fair Housing Act. The lawsuit also alleges that Penny Crank, an owner of the rental property, is liable for Gus Crank’s actions because he managed the rental property on her behalf.

Today’s lawsuit, filed in the U.S. District Court for the Eastern District of Kentucky, alleges that Gus Crank engaged in sexual harassment of female tenants from approximately 2008 through 2016, by, among other things, demanding that female tenants engage in sexual acts to keep their housing, engaging in unwelcome sexual touching, offering to reduce monthly rental payments in exchange for sex, making unwelcome sexual comments and advances, making intrusive and unannounced visits to female tenants’ homes to further his sexual advances, and evicting or threatening to evict female tenants who objected or refused his sexual advances.

“No female tenant should have to suffer sexual harassment as a condition of maintaining housing for herself or her family,” said Assistant Attorney General Eric Dreiband. “The Justice Department will continue to enforce the Fair Housing Act against property managers and owners who make illegal demands for sex and cause women to feel unsafe in their own homes.”

“Everyone has the right to be free from sexual harassment and intimidation, and the allegations in this case are very troubling,” said Robert M. Duncan Jr., U.S. Attorney for the Eastern District of Kentucky. “Individuals who are being victimized as a condition of their housing have rights and we encourage them to report this type of reprehensible behavior to the Department of Justice.”

In October 2017, the Justice Department launched an initiative to combat sexual harassment in housing. In April 2018, the Department announced the nationwide rollout of the initiative, including three major components: a new joint Task Force with the Department of Housing and Urban Development to combat sexual harassment in housing, an outreach toolkit to leverage the Department’s nationwide network of U.S. Attorney’s Offices, and a public awareness campaign, including the launch of a national Public Service Announcement.

Since launching the initiative, the Justice Department has filed eight lawsuits alleging a pattern or practice of sexual harassment in housing. The Justice Department has filed or settled 14 sexual harassment cases since January 2017, and has recovered over $1.6 million for victims of sexual harassment in housing.

Today’s lawsuit seeks monetary damages to compensate the victims, civil penalties and a court order barring future discrimination. The complaint contains allegations of unlawful conduct. The allegations must be proven in federal court.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination at rental dwellings managed by Gus Crank, or who have other information that may be relevant to this case, can contact the U.S. Attorney’s Office for the Eastern District of Kentucky at (859) 685-4823.

Individuals can also report sexual harassment and other forms of housing discrimination by e-mailing the Justice Department at fairhousing@usdoj.gov.

WASHINGTON – The Justice Department today announced that it has filed a lawsuit alleging that Gus Crank, manager of a residential rental property in Dayton, Kentucky, sexually harassed female tenants in violation of the federal Fair Housing Act. The lawsuit also alleges that Penny Crank, an owner of the rental property, is liable for Gus Crank’s actions because he managed the rental property on her behalf.

Today’s lawsuit, filed in the U.S. District Court for the Eastern District of Kentucky, alleges that Gus Crank engaged in sexual harassment of female tenants from approximately 2008 through 2016, by, among other things, demanding that female tenants engage in sexual acts to keep their housing, engaging in unwelcome sexual touching, offering to reduce monthly rental payments in exchange for sex, making unwelcome sexual comments and advances, making intrusive and unannounced visits to female tenants’ homes to further his sexual advances, and evicting or threatening to evict female tenants who objected or refused his sexual advances.

"No female tenant should have to suffer sexual harassment as a condition of maintaining housing for herself or her family," said Assistant Attorney General Eric Dreiband. "The Justice Department will continue to enforce the Fair Housing Act against property managers and owners who make illegal demands for sex and cause women to feel unsafe in their own homes."

"Everyone has the right to be free from sexual harassment and intimidation, and the allegations in this case are very troubling," said Robert M. Duncan, Jr., U.S. Attorney for the Eastern District of Kentucky. "Individuals who are being victimized as a condition of their housing have rights and we encourage them to report this type of reprehensible behavior to the Department of Justice."

In October 2017, the Justice Department launched an initiative to combat sexual harassment in housing. In April 2018, the Department announced the nationwide rollout of the initiative, including three major components: a new joint Task Force with the Department of Housing and Urban Development to combat sexual harassment in housing, an outreach toolkit to leverage the Department’s nationwide network of U.S. Attorney’s Offices, and a public awareness campaign, including the launch of a national Public Service Announcement.

Since launching the initiative, the Justice Department has filed eight lawsuits alleging a pattern or practice of sexual harassment in housing. The Justice Department has filed or settled 14 sexual harassment cases since January 2017, and has recovered over $1.6 million for victims of sexual harassment in housing.

Today’s lawsuit seeks monetary damages to compensate the victims, civil penalties and a court order barring future discrimination. The complaint contains allegations of unlawful conduct. The allegations must be proven in federal court.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination at rental dwellings managed by Gus Crank, or who have other information that may be relevant to this case, can contact the U.S. Attorney’s Office for the Eastern District of Kentucky at (859) 685-4823.

Individuals can also report sexual harassment and other forms of housing discrimination by e-mailing the Justice Department at fairhousing@usdoj.gov.

 

LEXINGTON, Ky. — Anastasia C. Vandergriff, 37, pleaded guilty today, to a single count of producing child pornography.  A co-defendant, Rafael W. Poynter, pleaded guilty to the same offense last week.

In their plea agreements, Vandergriff and Poynter admitted to sexually abusing a minor and producing videos of the abuse using a cellular telephone.  The abuse was discovered on January 21, 2017, when deputies with the Mercer County Sheriff’s Office received a complaint about the possible sexual assault of a juvenile.  Deputies obtained a search warrant to search Poynter and Vandergriff’s residence in Harrodsburg, Kentucky, where they located Poynter’s cell phone.  During the forensic examination of that cell phone, agents located multiple videos depicting the sexual abuse, which was perpetrated by Vandergriff and directed and filmed by Poynter.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James M. Gibbons, Special Agent in Charge of Homeland Security Investigations (HSI) Chicago Field Office; and Sheriff Ernie Kelty, Mercer County Sheriff’s Department, jointly announced the sentence.

The investigation was conducted by HSI and the Mercer County Sheriff’s Department.  The United States was represented by Assistant United States Attorney Lauren Bradley.

Vandergriff is scheduled to be sentenced on June 3, 2019.  Poynter is scheduled to be sentenced on May 28, 2019.  Production of Child Pornography carries a minimum sentence of 15 years and a maximum of 30 years.

  LEXINGTON, Ky. – Garry Sean Ramone Drake, Jr., 26, of Lexington, was sentenced Friday, by U.S. District Judge Danny C. Reeves, to 300 months in federal prison, following his conviction for distribution of fentanyl resulting in the death of Mason Reppen, 22, on November 30, 2017.

Drake is the second individual convicted of distributing fentanyl that resulted in Mr. Reppen’s death.  Phillip Clayton Jennings, 23, of Crestwood, Kentucky, pleaded guilty and was sentenced to 180 months in prison.  Proof gathered during the investigation showed that both defendants were in the chain of distribution for the fentanyl mixture that led to the death. The Lexington Police Department and the DEA jointly investigated the death, which led to the federal charges.

Drake will be required to serve at least 85% of the sentence imposed. Upon his release, he is required to be under supervision by the United States Probation Office for a period of five years.

“Fentanyl and other dangerous drugs continue to devastate our community with tragic outcomes,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “We have made the prosecution of overdoses a core priority in our effort to combat this epidemic.  We simply must use all the tools available to us to confront this grave problem.  Our strong law enforcement partnerships in this District are critical to the effort.  We remain committed to investigating and prosecuting these cases to hold those accountable who distribute this poison.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Darrell Christopher Evans, Special Agent in Charge, DEA Louisville; and Lawrence Weathers, Chief, Lexington Police Department, jointly announced the sentence.  Assistant United States Attorney Todd Bradbury prosecuted the case on behalf of the United States.

LEXINGTON, Ky. — Michael J. West, 39, of Lexington, was sentenced today, by U.S. District Judge Joseph M. Hood, to 260 months in federal prison for conspiracy to distribute fentanyl and heroin, two counts of possession with the intent to distribute, three counts of distribution, possession of a firearm in furtherance of a drug trafficking, and possession of a firearm by a convicted felon.

On April 11, 2018, Lexington police officers executed a search warrant at West’s apartment, where they located a safe in the refrigerator containing approximately 231 grams of heroin, 150 grams of fentanyl, 78 grams of cocaine, and 22 grams of crack cocaine.  In West’s bedroom, officers located cutting agents, a blender with white powder residue, digital scales, naloxone, and other drug trafficking paraphernalia.  Officers also located two loaded semi-automatic pistols and more than $37,000 in cash.

During the course of the investigation, officers conducted multiple controlled buys of heroin and fentanyl from conspiracy members and learned that West and his co-conspirators, Timothy Darnell Bryant, 48, of Detroit, Kezzle Cortez Reeves, 37, of Detroit, and Jerry Lee Tolbert, 55 of Lexington, were traveling to Detroit, to obtain heroin, fentanyl, and other controlled substances, which they would then transport back to Lexington for distribution.  The defendants used West’s apartment as a stash house where they would store the drugs prior to distributing them.

Previously in December 2018, Bryant pleaded guilty to conspiring to distribute heroin.  Tolbert pleaded guilty to conspiring to distribute fentanyl and being a felon in possession of a firearm. And, on December 6, 2018, Reeves was convicted of distributing heroin and fentanyl after a three-day jury trial. West’s co-defendants are awaiting sentencing.

West will be required to serve at least 85% of the sentence imposed. Upon his release, he will be under supervision by the United States Probation Office for a period of 6 years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Christopher Evans, Special Agent in Charge, DEA; and Chief Lawrence Weathers, Lexington Police Department, jointly announced the sentence.  Assistant United States Attorneys Lauren Bradley and Rajbir Datta prosecuted the case on behalf of the United States.

LEXINGTON, Ky.  — Jon Norman Moren, 45, of Richmond, Kentucky, was sentenced yesterday to 135 months in federal prison, by Chief United States District Judge Karen K. Caldwell, for possession with the intent to distribute over 500 grams of methamphetamine and for being a felon in possession of a firearm.  Judge Caldwell also ordered Moren to forfeit $2,245 in cash, two firearms, and 366 rounds of ammunition.

On September 21, 2016, a search warrant was executed at Moren’s residence in Lexington.  Law enforcement agents seized more than a pound of methamphetamine, which Moren admitted that he intended to sell. Moren also possessed a pistol and rifle, after having previously been convicted of a state drug trafficking felony, as well as other state drug charges.

Under federal law, Moren must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for three years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge ATF; ; D. Christopher Evans, Special Agent in Charge, DEA; and Chief Lawrence Weathers, Lexington Police Department, jointly made the announcement.

The investigation was conducted by the ATF, DEA, and the Lexington Police Department.  The United States was represented by Assistant United States Attorney Roger W. West.

LEXINGTON, Ky.  — Jose Navarro Rios, 45, a Mexican national residing in Lancaster Ky., was sentenced today, to 235 months in federal prison, by United States District Judge Danny C. Reeves, for distributing methamphetamine and illegally re-entering the United States after having previously been deported.  Judge Reeves also ordered Rios to pay a $4,000 fine and ordered five years of supervised release.  Rios will be deported following service of his sentence.

Rios admitted that he sold approximately 13 pounds of methamphetamine, on four prior occasions, between March 28, 2018 and April 18, 2018.  The methamphetamine was manufactured in Mexico and transported to Kentucky for distribution. Rios also admitted he had been deported from the United States on two prior occasions and had unlawfully re-entered the United States.

Under federal law, Rios must serve 85 percent of his prison sentence.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge, FBI; Kristoffer Cortex, Acting Assistant Field Office Director , ICE; Steven Igyarto, Resident Agent in Charge, Department of Homeland Security; Richard Sanders, Commissioner of the Kentucky State Police; and Chief Lawrence Weathers, Lexington Police Department, jointly made the announcement.

The investigation was conducted by the FBI, ICE, DHS, KSP, and and the Lexington Police Department.  The United States was represented by Assistant United States Attorney Roger W. West.

Statistics Reveal Meaningful Drop in Violent Crime Reported during 2018

 

LEXINGTON, Ky. – Law enforcement officials announced today the results of coordinated efforts to reduce violent crime in Lexington, during 2018.    

According to statistics recently released by the Lexington Police Department, violent crime in Lexington decreased by 13% in 2018, compared to 2017.  This decrease included declines in homicides (down 21%), robberies (down 21%), aggravated assaults (down 11%), and shootings (down 23%).  Additionally, shots fired calls decreased by 9%.      

In January 2018, U.S. Attorney Robert M. Duncan, Jr.; Fayette Commonwealth’s Attorney Lou Anna Red Corn; Chief Lawrence Weathers, Lexington Police Department; Stuart Lowrey, Special Agent in Charge, ATF Louisville Field Division; Fayette County Sheriff Kathy Witt; and other local, state and federal law enforcement partners, including FBI and DEA, announced the creation of the Fayette County Violent Crime Task Force, a joint effort to combat violent crime and drug trafficking in Lexington.  The Task Force was formed as part of the Department of Justice’s Project Safe Neighborhoods (PSN) initiative, which focuses enforcement efforts on the most violent offenders and coordinates with locally based prevention and reentry programs in an effort to achieve lasting reductions in crime. 

“These results indicate that our law enforcement partnerships have been effective,” said U.S. Attorney Duncan.  “They validate a valuable enforcement strategy moving forward and have led to the arrest and prosecution of numerous violent offenders.  That benefits not only Lexington, but the entire Central Kentucky community.  Through our collective efforts, I believe we are making a difference.”

“I especially commend the men and women of the Lexington Police Department for their outstanding work in helping to reduce violent crime,” said U.S. Attorney Duncan.  “Daily, these officers put their lives at risk to enforce the law and help keep our community safe. We are proud to partner with them.” 

Mayor Linda Gorton said thanks to the work of the law enforcement community, Lexington is one of the safest cities of its size in the country. “We are happy that our overall numbers are declining,” Gorton said. “We know there’s more work to do, but we are moving in the right direction.”

“Across the department, each officer understands the importance of collaborative, proactive police work in identifying criminal offenders, especially those with guns and illegal narcotics. We can’t do this work alone,” Chief Weathers said. “Addressing crime trends is a never-ending process. From neighborhood meetings to strategic public safety task forces, we’ll continue to look for engaging and innovative methods to prevent crime from occurring and to hold criminals accountable.”   

“Our Lexington Police Officers deserve much of the credit,” said Commonwealth’s Attorney Red Corn. “The sharing of resources between local and federal partners has truly enhanced investigations and helped build successful prosecutions.” 

“ATF strives to be ‘no better partner’ to other law enforcement agencies,” stated ATF Special Agent in Charge Stuart Lowrey of the Louisville Field Division.  “During the past year, ATF and these agencies investigated illegal sources of crime guns and persons who illegally possessed or used guns to commit violent crimes in the Lexington area.  Together, we pursued ‘traffickers and trigger pullers’ with every resource, including new ballistic technology and other crime gun intelligence to disrupt the shooting cycle.  ATF and these efforts support the Department of Justice’s Project Safe Neighborhoods in making our communities safer for everyone.”

“The Fayette County Violent Crime Task Force is a force multiplier,” said Special Agent in Charge James Robert Brown, Jr., of the FBI’s Louisville Field Division.  “The Task Force focused its efforts towards one goal - reducing violent crime.  It is working.
Seeing ATF Agents, FBI Agents, and DEA Agents work side by side with the Lexington Police Department and other agencies has been remarkable to witness.”

“The success of the Project Safe Neighborhoods initiative is a testament to the hard work and dedication of all the law enforcement professionals in the region working in a truly collaborative fashion,” said D. Christopher Evans, Special Agent in-Charge of DEA’s Louisville Field Division.  "We could not ask for a better group of professionals to work with toward the shared goal of reducing violent crime in our communities around Lexington and throughout Central Kentucky.”

Fayette County Violent Crime Task Force

Participants in the Fayette County Violent Task Force developed investigations of violent offenders and significant drug traffickers, resulting in the prosecution of 88 defendants in 2018 (44 defendants in state court, and 44 defendants in federal court).  Here are a few examples of successful prosecutions:    

U.S. v. Andre Stackhouse - In January 2018, detectives with the Lexington Police Department executed a search warrant at Stackhouse’s Lexington residence, locating 244 grams of a heroin/fentanyl mix and two firearms.  Stackhouse was arrested and admitted to the distribution of heroin and to possessing the firearms for protection during his drug trafficking.  Stackhouse has six prior felony convictions, including drug trafficking, from Chicago.  

Stackhouse pleaded guilty and on December 8, 2018, was sentenced to 190 months in federal prison for possession with intent to distribute heroin, possession of a firearm in furtherance of drug trafficking, and possession of a firearm by a convicted felon.  He was also sentenced to a term of 8 years of supervised release. 

U.S. v. Davion Bledsoe - On April 17, 2018, Bledsoe fled from police and was involved in an injury collision.  During a search of Bledsoe’s vehicle officers located distribution amounts of heroin and crack cocaine, scales, and a handgun.  The substances were submitted for testing and were found to contain 8.9 grams of heroin and 18.896 grams of cocaine base (crack cocaine). The firearm was a pistol that was reported stolen from Fayette County in February 2018.  On September 4, 2018, Bledsoe pled guilty to possession with intent to distribute heroin and crack cocaine and possession of a firearm in furtherance of a drug trafficking crime.  On January 14, 2019, Bledsoe was sentenced to 96 months in federal prison, and 5 years of supervised release. 

Commonwealth v. William Dixon: After observing a vehicle roll through a stop sign, Lexington patrol officers attempted a traffic stop.  The vehicle fled, then the occupants jumped out of the vehicle and ran.  One of the occupants, Dixon, threw down heroin, cocaine and a handgun as he ran.  When arrested, Dixon has over $1,000 in cash. Dixon had been previously convicted of Possession of a Firearm by a convicted felon.  At trial, a Fayette County jury convicted Dixon of Trafficking in a Controlled Substance, Tampering with Physical Evidence, and Fleeing/Evading Police.  He was sentenced to ten years in prison in June of 2018.

Commonwealth v. Rodney Bell: Bell, who was on parole, was found to be in possession of cocaine, Xanax bars, and over $8,000 during a home visit by parole officers.  Criminal records show he has prior convictions for Trafficking in a Controlled Substance, Fleeing/Evading Police, and Tampering with Physical Evidence.  He pled guilty to Trafficking in a Controlled Substance and Tampering with Physical Evidence and was sentenced to serve five years in prison in June of 2018.

Operation Triple Beam – Bourbon Trail

Additionally, personnel from the United States Marshals Service, the Kentucky State Police, Immigration and Customs Enforcement, the Lexington Police Department, and other law enforcement agencies participated in Operation Triple Beam – Bourbon Trail Initiative (OTB-Bourbon Trail).  OTB-Bourbon Trail was a three-month law enforcement initiative that focused on reducing crime in central Kentucky cities, including Lexington, by identifying and arresting violent fugitives, collecting intelligence, and removing individuals who had committed – and were committing – crimes from the community. 

OTB-Bourbon Trail was operational from October 15, 2018 to December 14, 2018.  During that time, law enforcement arrested 132 defendants (including several wanted for crimes in other states), seized quantities of illegal drugs (including fentanyl, heroin, methamphetamine, cocaine, and marijuana), and recovered 37 firearms.  U.S. Attorney Duncan and United States Marshal Norman Arflack jointly announced the results of this additional initiative.  

“Operation Triple Beam is a nationwide initiative supported by the U.S. Marshals service,” said Marshal Arflack.  “We in the Eastern District of Kentucky are extremely grateful for the support we received from the U.S. Attorney’s office, Kentucky State Police, Lexington Police Department and all other local agencies who worked in collaboration to make this operation one of the most successful in the nation.  I am certain that this initiative has made great strides in providing a safer environment for the citizens of Fayette and surrounding counties.” 

KSP Commissioner Rick Sanders offered accolades for the successful partnerships that culminated with multiple arrests. “It’s not about who gets the credit, it’s about coming together as law enforcement officers to reduce violent crimes in our communities” said Commissioner Sanders. “That is exactly what these agencies did and we will continue to do in the future.”

Community Outreach and Engagement

In addition to enforcement efforts aimed at removing the most violent offenders from our streets, law enforcement personnel have engaged in community outreach and education.  “Our law enforcement partnerships have helped remove several violent offenders from our communities, while also helping to improve existing community relationships and create new ones,” said Chief Weathers.  “This helps build trust and government accountability by letting everyone know that we are serious about public safety.”

“We all recognize that enforcement alone is not enough, and sustained success requires a comprehensive approach,” added U.S. Attorney Duncan.  “As prosecutors, holding offenders accountable is always our first priority, which usually means incarceration in gun violence cases,” emphasized Commonwealth’s Attorney Red Corn.  “But we are also very involved in prevention, intervention, and re-entry work.  PSN’s partnership with the city’s ONE LEX initiative has resulted in the sharing of useful information with offenders re-entering the community, including information about the city and community resources available to them, such as library services, mental health services, and potential employment opportunities.”  

“Combatting violent crime is a cornerstone priority of the Department of Justice and of our Office, said U.S. Attorney Duncan.  While we are proud of the work we have done alongside our partners, we recognize there is more to do.  We are committed to carrying our efforts forward, in 2019 and beyond.”   

Learn more about Project Safe Neighborhoods.

LEXINGTON, Ky. – Carl Wayne Bartleson, Jr., 46, of Danville, Kentucky was sentenced today, by Chief U.S. District Judge Karen K. Caldwell, to 324 months in prison following his conviction in October 2018, following a jury trial in federal court.  Bartleson was convicted of one count of conspiring to distribute heroin and fentanyl and four counts of distributing those same drugs.  Chief Judge Caldwell imposed a 324-month sentence on each of the five counts, to run concurrently.

On February 21, 2017, three people fatally overdosed in Boyle County, Kentucky from the use of controlled substances that included fentanyl, a potent Schedule II controlled substance.  Several others overdosed, but survived with the aid of first responders, within a five-day period surrounding the fatalities.  The spike in overdoses led the Boyle County Sheriff’s Office to combine forces with the Drug Enforcement Administration, to determine the source of the drugs.  The joint investigation led to the arrest and indictment of Bartleson, as a local supplier of heroin, fentanyl and acrylfentanyl, a Schedule I controlled substance that is even more potent than fentanyl.   

Bartleson will be required to serve at least 85% of the sentence imposed.  Upon his release, he will be under supervision by the United States Probation Office for a period of six years.

“This is yet another example of the tragic impact that heroin, fentanyl, and other powerful opioids are having on our community,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “We have made the prosecution of overdoses a core priority in our Office’s effort to combat this epidemic.  This case confirms that law enforcement partnerships are critical to enforcing the law and protecting our community.  It should also remind those who choose to distribute this poison in our community that we are committed to this fight and they risk serious and long term consequences for their conduct.”

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Darrell Christopher Evans, Special Agent in Charge, DEA Louisville; and Derek Robbins, Boyle County Sheriff, jointly announced the sentence.  Assistant United States Attorneys Todd Bradbury and Francisco Villalobos prosecuted the case on behalf of the United States.

LEXINGTON, Ky. – Mikhy Farrera-Brochez, of Winchester, Kentucky, was charged via criminal complaint today with the unlawful transfer of stolen identification documents and possession with intent to distribute these documents in violation of federal law.        

The criminal complaint alleges that Farrera-Borchez illegally possessed and intended to distribute data containing sensitive medical and other identifying information.   While living in the Eastern District of Kentucky, Farrera-Brochez sent links to the data from his e-mail account to several news outlets.   He also sent e-mails to several government officials in Singapore containing links to the data. 

Robert M. Duncan Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation, jointly announce this criminal complaint.  The investigation preceding the complaint was conducted by the Federal Bureau of Investigation. 

The Defendant’s next court appearance is currently scheduled for Wednesday, February 27, at 11:00am, in Lexington.

The charges and allegations contained in the complaint are merely accusations.  The Defendant is presumed innocent until proven guilty beyond reasonable doubt in a court of law.

 

COVINGTON, Ky. — Rodney Jackson, 42, of Cincinnati, Ohio, was sentenced on Thursday, by United States District Judge David Bunning, to 336 months in federal prison for possessing Methamphetamine with the intent to distribute.

Jackson was convicted in October 2018, following a two-day jury trial.  According to the evidence, Covington Police conducting a traffic stop and found multiple baggies that contained more than 23 grams of crystal methamphetamine packaged for sale.  Because Jackson had prior felony convictions for drug trafficking, he qualified as a “career offender,” pursuant to the United States Sentencing Guidelines, which subjected him to an increased sentence.  Jackson was also on supervised release, for a prior federal firearms conviction, at the time of this offense.           

Under federal law, Jackson must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for a term of eight years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement. 

The investigation was conducted by the FBI and the Covington Police Department.  The United States was represented by Assistant United States Attorney Tony Bracke.

COVINGTON, Ky. — John Lee McCloud, 29, of Fairfield, Ohio, was sentenced today, by United States District Judge David Bunning, to 140 months in federal prison, for trafficking in methamphetamine. 

McCloud was indicted in June 2018, and pled guilty in November 2018.  According to court documents, McCloud was arrested in Florence, Kentucky, when he attempted to sell approximately five ounces of methamphetamine.

Under federal law, McCloud must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for a term of five years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration; and Tom Grau, Chief of the Florence Police Department, jointly made the announcement. 

The investigation was conducted by the DEA and the Florence Police Department.  The United States was represented by Assistant United States Attorney Tony Bracke.

LONDON, Ky. – Christopher Lee Serrano, 45, of Austin, Texas and Pedro Vasquez Cavazos, 63, of Mercedes, Texas, were sentenced to federal prison Thursday, by United States District Judge Robert E. Wier, for conspiracy to distribute nearly five kilograms of cocaine.  Serrano was sentenced to 262 months and Cavazos was sentenced to 120 months. 

In February 2018, the Federal Bureau of Investigation seized 4.95 kilograms of cocaine, which Serrano and Cavazos transported from Austin, Texas to London, Kentucky.  Serrano and Cavazos had hidden the cocaine in a speaker box under the passenger seat of Serrano’s Chevy truck.  Prior to their arrest, the pair assured the buyer they could fulfill bi-weekly deliveries for similar amounts.  In November 2018, Serrano and Cavazos entered pleas of guilty, admitting that they orchestrated the delivery of the cocaine to Laurel County, Kentucky for distribution.   

Both men had prior federal felony drug trafficking convictions, from the Western District of Texas.  Under federal law, Serrano and Cavazos must serve 85 percent of their prison sentences; and upon their release, they will be under the supervision of the United States Probation Office for eight years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation; Richard Sanders, Commissioner of the Kentucky State Police; and Darrel Kilburn, Chief of the London Police Department, jointly made the announcement.

The FBI, London Police Department, and Kentucky State Police conducted the investigation.  The United States was represented by Assistant United States Attorney Jenna E. Reed.

LEXINGTON, Ky. - U.S. Attorney Robert M. Duncan, Jr. announced today that the Eastern District of Kentucky collected $29,313,458.05 in criminal and civil actions in Fiscal Year 2018.  Of this amount, $23,868,990.17 was collected in criminal actions and $5,444,467.88 was collected in civil actions. 

Additionally, Eastern District of Kentucky worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $1,059,343.76 in cases pursued jointly by these offices in civil actions.             

As a whole, the Justice Department collected nearly $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2018.  The $14,839,821,650 in collections in FY 2018 represents is nearly seven times the appropriated $2.13 billion ($2,136,750,000) budget for the 94 U.S. Attorneys’ offices.

“The men and women of the U.S. Attorneys’ offices across the country work diligently, day in and day out, to see that the citizens of our nation receive justice.  The money that we are able to recover for victims and this country as a whole is a direct result of their hard work,” Director James A. Crowell, IV, Executive Office for U.S. Attorneys.

“The Eastern District of Kentucky’s dedicated personnel, in collaboration with partners from other Department of Justice components, worked diligently to protect our citizens and to safeguard taxpayer resources,” stated United States Attorney Robert M. Duncan, Jr.  “I commend their efforts in these important endeavors.  As a result of their hard work, a significant amount of taxpayer dollars were recovered in last Fiscal Year.”    

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, the Department of Health and Human Services, the Internal Revenue Service, the Small Business Administration and the Department of Education.

LEXINGTON, Ky. – A Versailles, Kentucky man was convicted today, by a federal jury sitting in Lexington, of possessing sexually explicit photos of children.

After a brief deliberation following a two-day trial, the jury convicted 54-year-old Scott W. Sulik of one count of knowing possession of sexually explicit images of prepubescent minors.

According to the evidence presented at trial, Sulik was living in Versailles on January 10, 2018, when representatives of law enforcement searched his home for evidence relating to threatening emails that Sulik had sent to a United States Congressman.  An examination of the evidence found during that search revealed that Sulik had downloaded and saved sexually explicit photos of children on a laptop and smartphone.

Sulik previously pleaded guilty to one count of cyberstalking, arising from the threats he had emailed to the Congressman.  He is currently serving a 48-month term of imprisonment on that charge. 

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Matthew R. Verderosa, Chief of the United States Capitol Police, jointly announced the verdict.  The investigation was conducted by the United States Capitol Police.  The United States was represented by Assistant United States Attorney Andrew T. Boone.

Sulik will appear for sentencing on May 24, 2019.  He faces a maximum of 20 years in prison.  However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal statutes before imposing a sentence. 

FRANKFORT, Ky. — Billie Gene Spears, 47, of Jacksboro, Tennessee, was sentenced today to 300 months (25 Years) in federal prison, by United States District Judge Gregory F. Van Tatenhove, for crossing a state line with the intent to engage in a sexual act with a person who was under 12 years of age.

Late last year, Spears admitted that, in October of 2017, he traveled from Tennessee to Franklin County, Kentucky, with the intent to engage in a sexual act with a minor who was less than 12 years old.  Spears had posted an internet ad, to which an undercover investigator with the Kentucky Attorney General’s Office responded.  During the ensuing communications between the investigator and Spears, Spears unequivocally indicated that he was intending to have sex with the investigator’s fictitious 9 year-old daughter.  On October 21, 2017, Spears was met by the investigator and other law enforcement officers, at a pre-arranged location in Franklin County, where he was arrested.          

Under federal law, Spears must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for 20 years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Richard F. Ferretti, Special Agent in Charge, United States Secret Service; and Andy Beshear, Kentucky Attorney General, jointly made the announcement.

The investigation was conducted by the U.S. Secret Service and the Cyber Crimes Branch of the Kentucky Office of Attorney General.  The United States was represented by Assistant United States Attorney David A. Marye.

LONDON, Ky. – Kimberly Jones, a Williamsburg pharmacist, was convicted last week, by a federal jury sitting in London, on seven counts of unlawful distribution of controlled substances.

Jones, 53, owned and operated Kim’s Hometown Pharmacy in Williamsburg, Kentucky, from approximately 2008 to 2018.  According to the evidence at trial, Jones repeatedly filled prescriptions for significant quantities of Oxycodone and other controlled substances from a variety of out-of-state doctors.  The evidence also established that Jones dispensed controlled substances to certain patients who did not have prescriptions at the time Jones dispensed the drugs.  Following a six-day trial, the jury convicted Jones on seven counts of unlawfully dispensing controlled substances to patients outside the scope of professional practice and not for a legitimate medical purpose.

 Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Christopher Evans, Special Agent in Charge, Drug Enforcement Administration; Steven D. Davis, Inspector General, Kentucky Cabinet for Health and Family Services, Office of Inspector General; and Daniel R. Levinson, Inspector General, U.S. Department of Health and Human Services, Office of Inspector General, jointly announced the jury’s verdict.        

The investigation was conducted by the Drug Enforcement Administration; the Kentucky Cabinet for Health and Family Services, Office of Inspector General, Drug Enforcement and Professional Practices Branch; and the U.S. Department of Health and Human Services, Office of Inspector General.  Assistant United States Attorney Andrew E. Smith represented the United States in the case. 

Jones will be sentenced by U.S. District Judge Gregory Van Tatenhove.  Jones faces a maximum of 20 years in prison, a fine of up to $1,000,000, and a term of supervision following the service of any sentence.  The Court will consider the U.S. Sentencing Guidelines and the applicable federal statutes before imposing a sentence.

 

ASHLAND, Ky. — Leonard Anthony Wright, 33, of Detroit, was sentenced Monday, to 156 months in federal prison, by United States District Judge David L. Bunning, for conspiracy to distribute 40 Grams or more of Fentanyl and conspiracy to distribute 100 Grams of more of Heroin. 

In April 2017, law enforcement members of the Huntington FBI Task Force, in conjunction with the Kentucky State Police and the Ashland Police Department, seized 209 grams of fentanyl, which Wright transported from Detroit to the Tri-State area of Ashland, Huntington, W.Va., and Ironton, Ohio.  In August 2017, the same law enforcement agencies sized 876 grams of heroin, which had also been transported from Detroit to the Tri-State area.   In September 2018, Wright entered a plea of guilty, admitting that he orchestrated the delivery of the fentanyl and heroin.

“The defendant transported significant quantities of the deadly drugs fentanyl and heroin to the Tri-State area, and now he faces a lengthy sentence of imprisonment for his illegal actions,” said United States Attorney Robert M. Duncan, Jr.  “I commend law enforcement for their coordination and cooperation during this investigation.  The combined efforts of the law enforcement agencies involved helped remove substantial amounts of dangerous drugs from the streets and likely saved lives.”          

Under federal law, Wright must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for four years.

U.S. Attorney Duncan; Robert Allan Jones, Special Agent in Charge of the FBI Pittsburgh; Richard Sanders, Commissioner of the Kentucky State Police; and Todd Kelley, Chief of the Ashland Police Department, jointly made the announcement.

The FBI, KSP, and Ashland Police Department conducted the investigation.  The United States was represented by Assistant United States Attorney Cynthia T. Rieker.

LONDON, Ky. – A Tennessee doctor, two clinic owners from the Miami, FL area, and a Woodbine, KY man were convicted today by a federal jury in London on oxycodone-trafficking charges.  Three defendants were also convicted of multiple counts of money laundering.         

After three days of deliberations following a four-week trial, the jury convicted Timothy Gowder, 71, from Chattanooga, Tennessee, Anwar Mithavayani, 55, and Pete Tyndale, 47, clinic owners from Florida, of conspiracy to distribute oxycodone and oxymorphone. James Bradley Combs, 41, from Woodbine, Kentucky, was convicted of possession with intent to distribute oxycodone. One defendant, Gary Moore, 67, from Chattanooga, Tennessee was acquitted.          

According to testimony at trial, Gowder and the clinic owners worked together to run an illicit pain clinic near Chattanooga, Tennessee, called Tennessee Pain Institute (or “TPI”), which drug addicts and drug traffickers in Kentucky and elsewhere used as their supplier. The evidence further revealed that, after the Tennessee Department of Health investigated TPI’s doctors and federal law enforcement executed a search warrant at TPI, clinic owners Tyndale and Mithavayani opened a new pain clinic in North Carolina to cater to the same Kentucky population.           

Gowder was indicted in May of 2017, while Mithavayani, Tyndale, and Combs were indicted in January of 2018.         

Co-defendant Larry Karr of Keavy, Kentucky, pled guilty to the drug trafficking charge in May of 2018, and was later sentenced to 108 months in federal prison.

“Prosecuting the unlawful distribution of opioids by medical professionals is a foremost priority of the Department of Justice and our Office,” said United States Attorney Robert M. Duncan, Jr.  “The defendants contributed to the opioid crisis that is ruining lives in our District and throughout the Nation.  I commend the law enforcement agencies involved for their thorough investigation, which ultimately resulted in the jury’s verdict that holds these defendants accountable for their actions.” 

U.S. Attorney Duncan; Special Agent in Charge D. Christopher Evans of the Drug Enforcement Administration’s Louisville Field Division; Special Agent in Charge Matthew Line of the Internal Revenue Service, Criminal Investigation Division; Andy Beshear, Kentucky Attorney General; and Richard W. Sanders, Commissioner of Kentucky State Police jointly announced the convictions.

The investigation was conducted by the DEA, the IRS, and the Kentucky Attorney’s General Office and the KSP. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Gregory Rosenberg.   

The Court will set a date for the defendants to appear for sentencing. Combs faces a maximum sentence of 20 years in prison, Gowder faces up to 40 years, while Mithavayani and Tyndale face up to 120 and 130 years in prison, respectively.  However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal statutes before imposing a sentence.

 

LEXINGTON, Ky. — Brandon Hayden, 37, of Lexington, was found guilty today, by a federal jury, of conspiracy to possess with the intent to distribute 50 kilograms or more of marijuana and attempt to possess with the intent to distribute 50 kilograms or more of marijuana.

The jury returned the verdict after a 2-day trial.  The evidence established that on July 17, 2018, Hayden was at the Love’s truck stop in Richmond, Kentucky to meet an anticipated delivery of 200 pounds of marijuana.   Earlier in the month, Hayden had received multiple photographs of bags and bales of marijuana buds on his cellular telephone, with texts indicating that marijuana was on its way to him.  On July 17, 2018, the marijuana was being hauled in multiple duffle bags, inside the cab of a tractor-trailer that had picked up the marijuana from El Paso, Texas and South Carolina.  Hayden met Vincent Raglin, a co-defendant who pleaded guilty to the conspiracy, in the parking lot of the truck stop.  Hayden and Raglin then drove to the spot where the tractor-trailer was parked.  After Raglin got out of his vehicle and collected the first duffle bag, the two were arrested.  The total weight of the marijuana was 91.9 kilograms.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Christopher Evans, Special Agent in Charge, Drug Enforcement Administration; Richard Sanders, Commissioner, Kentucky State Police; and Charles Matthews, Chief of Police, Pineville Police Department, jointly announced the jury’s verdict.

Hayden is currently scheduled to appear for sentencing, in Lexington, on May 13, 2019 at 10:30 a.m.  Hayden faces a maximum prison sentence of 30 years.  However, his sentence will be imposed by the Court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.

The investigation was conducted by the Drug Enforcement Administration, Kentucky State Police, and the Pineville Police Department.

COVINGTON, Ky. - A Youngstown, Ohio, man who previously admitted to striking a flight attendant while in flight on an aircraft was sentenced today to 31 days in custody, followed by seven months of home detention.  U.S. District Court Judge David Bunning sentenced 24-year-old Donald Zuppo, Jr., for interference with a flight attendant. 

According to Zuppo’s plea agreement, he was on a flight, from Phoenix to Cleveland on March 20, 2018, when he became agitated and struck a flight attendant with his fist.  Zuppo’s actions caused the flight crew to divert the aircraft for a landing at the Cincinnati/Northern Kentucky International Airport. 

In addition to the terms of imprisonment and home detention, Zuppo was ordered to pay restitution to the flight attendant and will be under the supervision of the U.S. Probation Office for two years.  

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation, jointly announced the sentence.  The investigation preceding the indictment was conducted by the FBI.  The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Andrew T. Boone. 

According to court documents unsealed today, 20 people, including 16 foreign nationals, have been charged for their roles in an international organized crime group that defrauded American victims through online auction fraud causing millions of dollars in losses.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Robert M. Duncan, Jr. of the Eastern District of Kentucky, Director Randolph D. Alles of the U.S. Secret Service (USSS), Commissioner Richard W. Sanders of the Kentucky State Police, Chief of Police Lawrence Weathers of the Lexington Police Department, Chief Don Fort of IRS Criminal Investigation and Inspector in Charge Tommy Coke of the U.S. Postal Inspection Service Pittsburgh Division made the announcement.

“The defendants allegedly orchestrated a highly organized and sophisticated scheme to steal money from unsuspecting victims in America and then launder their funds using cryptocurrency,” said Assistant Attorney General Benczkowski.  “As the charges and arrests announced today demonstrate, the Criminal Division and our law enforcement partners will vigorously pursue cybercriminals who defraud the American public, regardless of where those criminals may reside.”

“This prosecution stems from a multi-year investigation initiated in Kentucky led by the U.S. Secret Service, in cooperation with several local, state, federal, and international law enforcement partners,” said U.S. Attorney Duncan.  “Cooperation of this kind is essential, if we are to be effective in disrupting organized cybercrime, which costs victims from across the United States millions of dollars and has become an increasingly prevalent means for criminals to prey on the public.  I commend the exceptional work done by our law enforcement partners, and we are proud to join this cooperative effort to combat cyber fraud schemes.”

“Today’s announcement demonstrates the success of the collaborative efforts of our worldwide network of law enforcement partners.  It sends a powerful message and demonstrates the transnational investigative capabilities of the Secret Service,” said Secret Service Director Randolph “Tex” Alles.  “This is a shared win for law enforcement across the globe.  I would like to thank the more than a dozen law enforcement agencies worldwide who helped us investigate this case, each played a vital role in its success.”

On July 5, 2018, a federal grand jury in Lexington, Kentucky returned a 24-count indictment charging 15 foreign nationals with RICO conspiracy, wire fraud conspiracy, money laundering conspiracy, and aggravated identity theft.  Those charged include Andrei-Cătălin Stoica, 28, of Romania; Victor-Aurel Grama, 29, of Romania; Liviu-Sorin Nedelcu, 33, of Romania; Ionuţ Ciobanu, 28, of Romania; Marius-Dorin Cernat, 35, of Romania; Alexandru Ion, 30, of Romania; Ştefan-Alexandru Păiuşi, 33, of Romania; Eugen-Alin Badea, 34, of Romania; Cristişor Olteanu, 31, of Romania; Adrian Mitan, 34, of Romania; Bogdan-Ştefan Popescu, 29, of Romania; Florin Arvat, 24, of Romania; Alin-Ionuţ Dobrică, 26, of Romania; Vlad-Călin Nistor, 31, of Romania, and Rossen Iossifov, 51, of Bulgaria.  On Feb. 6, a federal grand jury in Lexington returned an 11-count indictment charging an additional foreign national and four Americans for their roles in the criminal enterprise.  Those charged include Beniamin-Filip Ologeanu, 29, of Alexandria, Romania; Austin Edward Nedved, 27, of Northborough, Massachusetts; Dimitrious Antoine Brown, 37, of Macon, Georgia and Rashawd Lamar Tulloch, 30, of Newnan, Georgia.  Andrew Gilbert Ybarra II, 25, of Patterson, California, was also charged with conspiracy to commit money laundering.  In all, 15 Romanian nationals and one Bulgarian national were charged in these two indictments.  Of these, 12 have been extradited to the United States and are awaiting trials, which are currently set for June 18, 2019 and Aug. 7, 2019.

The indictment alleges that these defendants participated in a criminal conspiracy primarily located in Alexandria, Romania that engaged in a large-scale scheme of online auction fraud.  Specifically, Romania-based members of the conspiracy and their associates posted false advertisements to popular online auction and sales websites—such as Craigslist and eBay—for high-cost goods (typically vehicles) that did not actually exist.  According to the indictment, these members would convince American victims to send money for the advertised goods by crafting persuasive narratives, for example, by impersonating a military member who needed to sell the advertised item before deployment.  The members of the conspiracy are alleged to have created fictitious online accounts to post these advertisements and communicate with victims, often using the stolen identities of Americans to do so.  They are alleged to have delivered invoices to the victims bearing trademarks of reputable companies in order to make the transactions appear legitimate.  Once victims were convinced to send payment, the indictment alleges that the conspiracy engaged in a complicated money laundering scheme wherein domestic associates would accept victim funds, convert these funds to cryptocurrency, and transfer proceeds in the form of cryptocurrency to foreign-based associates.  The indictment alleges that these foreign-based money launderers include Vlad-Călin Nistor, who owns Coinflux Services SRL, and Rossen Iossifov, who owns R G Coins.  According to the indictment, Nistor and Iossifov exchanged cryptocurrency into local fiat currency on behalf of the Romania-based members of the conspiracy, knowing that they were exchanging bitcoin that represented the proceeds of fraud.

Some of the fraud schemes alleged in the indictments include:

• Nedelcu persuaded victims to send money for the advertised goods by creating fictitious but legitimate sounding entities through which he purported to sell vehicles.  For example, he used email address, foiaol2015@gmail.com, belonging to Aol Autos, to communicate with victims by email with subject lines like, “America Online Autos Financial Department [Order # 099106592090].”  The email would contain messages appearing to be legitimate invoices for payment for the advertised item purported to be sold.
• Ciobanu and his coconspirators used the email address judithlane82@gmail.com to communicate with victims about the sale of vehicles, signing the emails as “Sgt. Judith Lane,” and created a Facebook profile for Judith Lane, who was depicted as a member of the Air Force. Ciobanu, acting as “Judith Lane,” also posted two Facebook advertisements for the sale of automobiles.
• Cernat and his coconspirators sent victims invoices that appeared to be from eBay Motors and provided an eBay Motors Support Department phone number and email address of ebay@processing-secure.com.  These invoices provided instructions for payment and included reassuring language for secure transactions, such as, “Through OneVanilla Prepaid Visa services we can guarantee you 100 percent protection and insurance in this transaction.  eBay Payments will secure the payment until the buyer receives, inspects, and accepts the item.  Or, if it will be the case, eBay will refund the payment to the buyer.”
• Păiuşi also convinced victims to send money for the advertised goods by sending them invoices for payment that appeared legitimate. … [One such] invoice appeared to be sent from “eBayTM Buyer Protection,” provided the victim with an email address for questions, described the seller as a “certified eBayTM  third-party seller,” and explained that the buyer will be refunded if he or she refuses the merchandise.
• The coconspirators then communicated with the victims via email, often signing their emails by posing as a member of the military, like “Sgt. Logan Burdick.”  Other emails purported to be from the online auction company, like eBay.  The emails often communicated convincing information about the item being sold and the reason payment was required before shipping or viewing the item. 

Adrian Mitan, who was charged in the July 5, 2018 indictment, was also charged in a separate indictment unsealed today with money laundering offenses arising from a credit card phishing and brute-force attack scheme, likewise designed to steal money from Americans.  The indictment explains that phishing is an attempt to acquire personal information by masquerading as a trustworthy entity through electronic communications, and brute force is a cryptological trial-and-error methodology used to obtain information such as personal identification numbers for credit cards.  Mitan allegedly phished for credit/debit card information of U.S. customers, hacked into the electronic systems of American businesses, and then conducted a brute force attack on their point-of-sale systems for the purpose of stealing the remaining credit/debit card information.  According to the indictment, Mitan then directed American money launderers to create “dummy” credit/debit cards with the stolen information, which were used to extract money from the customers’ accounts.  These fraudulent proceeds were then returned to Mitan in the form of bitcoin.

The investigation was conducted by the U.S. Secret Service, Kentucky State Police, Lexington Police Department, IRS Criminal Investigation and U.S. Postal Inspection Service, and supported by the Justice Department’s Organized Crime Drug Enforcement Task Forces (OCDETF) and the International Organized Crime Intelligence and Operations Center (IOC-2).  Assistance was provided by the Romanian National Police (Service for Combating Cybercrime) and the Romanian Directorate for Investigating Organized Crime and Terrorism (Agency for Prosecuting Organized Crime).  The Justice Department’s Office of International Affairs provided significant support with the defendants’ extradition.  This case is being prosecuted by Assistant U.S. Attorneys Kathryn M. Anderson and Kenneth R. Taylor of the Eastern District of Kentucky and Senior Trial Attorney Timothy Flowers and Senior Counsel Frank Lin of the Criminal Division’s Computer Crime and Intellectual Property Section with assistance from the Criminal Division’s Money Laundering and Asset Recovery Section. 

Individuals believing they may be victims of the advanced fee and online auction fraud or brute-force attack schemes described herein are encouraged to visit the following website to obtain more information: https://justice.gov/usao-edky/information-victims-large-cases.  Tips to avoid becoming a victim of online auction fraud can be found here on the U.S. Secret Service’s website. 

For the RICO conspiracy and wire fraud conspiracy charges, each defendant faces up to 20 years in prison, a fine of $250,000, and three years of supervised release.  The same penalties apply to the money laundering conspiracy charges, except that the fine may be up to $500,000.  Additionally, if convicted of identity theft, Brown faces a term of 15 years in prison, a fine of $250,000, and three years of supervised release, and if convicted of aggravated identity theft, those charged face a mandatory-minimum sentence of two years in prison, to be served consecutive to any term of imprisonment ordered for the other counts of conviction.  However, any sentence following a conviction would be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal statutes.

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Twelve Foreign Nationals Extradited to the United States

                                                                                                 

WASHINGTON – According to court documents unsealed today, 20 people, including 16 foreign nationals, have been charged for their roles in an international organized crime group that defrauded American victims through online auction fraud causing millions of dollars in losses.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Robert M. Duncan, Jr. of the Eastern District of Kentucky, Director Randolph D. Alles of the U.S. Secret Service (USSS), Commissioner Richard W. Sanders of the Kentucky State Police, Chief of Police Lawrence Weathers of the Lexington Police Department, Chief Don Fort of IRS Criminal Investigation and Inspector in Charge Tommy Coke of the U.S. Postal Inspection Service Pittsburgh Division made the announcement.

“The defendants allegedly orchestrated a highly organized and sophisticated scheme to steal money from unsuspecting victims in America and then launder their funds using cryptocurrency,” said Assistant Attorney General Benczkowski.  “As the charges and arrests announced today demonstrate, the Criminal Division and our law enforcement partners will vigorously pursue cybercriminals who defraud the American public, regardless of where those criminals may reside.”

“This prosecution stems from a multi-year investigation initiated in Kentucky led by the U.S. Secret Service, in cooperation with several local, state, federal, and international law enforcement partners,” said U.S. Attorney Duncan.  “Cooperation of this kind is essential, if we are to be effective in disrupting organized cybercrime, which costs victims from across the United States millions of dollars and has become an increasingly prevalent means for criminals to prey on the public.  I commend the exceptional work done by our law enforcement partners, and we are proud to join this cooperative effort to combat cyber fraud schemes.”

“Today’s announcement demonstrates the success of the collaborative efforts of our worldwide network of law enforcement partners.  It sends a powerful message and demonstrates the transnational investigative capabilities of the Secret Service,” said Secret Service Director Randolph “Tex” Alles.  “This is a shared win for law enforcement across the globe.  I would like to thank the more than a dozen law enforcement agencies worldwide who helped us investigate this case, each played a vital role in its success.”

On July 5, 2018, a federal grand jury in Lexington, Kentucky returned a 24-count indictment charging 15 foreign nationals with RICO conspiracy, wire fraud conspiracy, money laundering conspiracy, and aggravated identity theft.  Those charged include Andrei-Cătălin Stoica, 28, of Romania; Victor-Aurel Grama, 29, of Romania; Liviu-Sorin Nedelcu, 33, of Romania; Ionuţ Ciobanu, 28, of Romania; Marius-Dorin Cernat, 35, of Romania; Alexandru Ion, 30, of Romania; Ştefan-Alexandru Păiuşi, 33, of Romania; Eugen-Alin Badea, 34, of Romania; Cristişor Olteanu, 31, of Romania; Adrian Mitan, 34, of Romania; Bogdan-Ştefan Popescu, 29, of Romania; Florin Arvat, 24, of Romania; Alin-Ionuţ Dobrică, 26, of Romania; Vlad-Călin Nistor, 31, of Romania, and Rossen Iossifov, 51, of Bulgaria. On Feb. 6, a federal grand jury in Lexington returned an 11-count indictment charging an additional foreign national and four Americans for their roles in the criminal enterprise. Those charged include Beniamin-Filip Ologeanu, 29, of Alexandria, Romania; Austin Edward Nedved, 27, of Northborough, Massachusetts; Dimitrious Antoine Brown, 37, of Macon, Georgia and Rashawd Lamar Tulloch, 30, of Newnan, Georgia.  Andrew Gilbert Ybarra II, 25, of Patterson, California, was also charged with conspiracy to commit money laundering.  In all, 15 Romanian nationals and one Bulgarian national were charged in these two indictments.  Of these, 12 have been extradited to the United States and are awaiting trials, which are currently set for June 18, 2019 and Aug. 7, 2019.

The indictment alleges that these defendants participated in a criminal conspiracy primarily located in Alexandria, Romania that engaged in a large-scale scheme of online auction fraud.  Specifically, Romania-based members of the conspiracy and their associates posted false advertisements to popular online auction and sales websites—such as Craigslist and eBay—for high-cost goods (typically vehicles) that did not actually exist.  According to the indictment, these members would convince American victims to send money for the advertised goods by crafting persuasive narratives, for example, by impersonating a military member who needed to sell the advertised item before deployment. The members of the conspiracy are alleged to have created fictitious online accounts to post these advertisements and communicate with victims, often using the stolen identities of Americans to do so.  They are alleged to have delivered invoices to the victims bearing trademarks of reputable companies in order to make the transactions appear legitimate.  Once victims were convinced to send payment, the indictment alleges that the conspiracy engaged in a complicated money laundering scheme wherein domestic associates would accept victim funds, convert these funds to cryptocurrency, and transfer proceeds in the form of cryptocurrency to foreign-based associates. The indictment alleges that these foreign-based money launderers include Vlad-Călin Nistor, who owns Coinflux Services SRL, and Rossen Iossifov, who owns R G Coins. According to the indictment, Nistor and Iossifov exchanged cryptocurrency into local fiat currency on behalf of the Romania-based members of the conspiracy, knowing that they were exchanging bitcoin that represented the proceeds of fraud.

Some of the fraud schemes alleged in the indictments include:

• Nedelcu persuaded victims to send money for the advertised goods by creating fictitious but legitimate sounding entities through which he purported to sell vehicles.  For example, he used email address, foiaol2015@gmail.com, belonging to Aol Autos, to communicate with victims by email with subject lines like, “America Online Autos Financial Department [Order # 099106592090].”  The email would contain messages appearing to be legitimate invoices for payment for the advertised item purported to be sold.
   
• Ciobanu and his coconspirators used the email address judithlane82@gmail.com to communicate with victims about the sale of vehicles, signing the emails as “Sgt. Judith Lane,” and created a Facebook profile for Judith Lane, who was depicted as a member of the Air Force. Ciobanu, acting as “Judith Lane,” also posted two Facebook advertisements for the sale of automobiles.
   
• Cernat and his coconspirators sent victims invoices that appeared to be from eBay Motors and provided an eBay Motors Support Department phone number and email address of ebay@processing-secure.com.  These invoices provided instructions for payment and included reassuring language for secure transactions, such as, “Through OneVanilla Prepaid Visa services we can guarantee you 100 percent protection and insurance in this transaction.  eBay Payments will secure the payment until the buyer receives, inspects, and accepts the item.  Or, if it will be the case, eBay will refund the payment to the buyer.”
   
• Păiuşi also convinced victims to send money for the advertised goods by sending them invoices for payment that appeared legitimate. … [One such] invoice appeared to be sent from “eBayTM Buyer Protection,” provided the victim with an email address for questions, described the seller as a “certified eBayTM  third-party seller,” and explained that the buyer will be refunded if he or she refuses the merchandise.
   
• The coconspirators then communicated with the victims via email, often signing their emails by posing as a member of the military, like “Sgt. Logan Burdick.”  Other emails purported to be from the online auction company, like eBay.  The emails often communicated convincing information about the item being sold and the reason payment was required before shipping or viewing the item. 

          

Adrian Mitan, who was charged in the July 5, 2018 indictment, was also charged in a separate indictment unsealed today with money laundering offenses arising from a credit card phishing and brute-force attack scheme, likewise designed to steal money from Americans.  The indictment explains that phishing is an attempt to acquire personal information by masquerading as a trustworthy entity through electronic communications, and brute force is a cryptological trial-and-error methodology used to obtain information such as personal identification numbers for credit cards. Mitan allegedly phished for credit/debit card information of U.S. customers, hacked into the electronic systems of American businesses, and then conducted a brute force attack on their point-of-sale systems for the purpose of stealing the remaining credit/debit card information.  According to the indictment, Mitan then directed American money launderers to create “dummy” credit/debit cards with the stolen information, which were used to extract money from the customers’ accounts.  These fraudulent proceeds were then returned to Mitan in the form of bitcoin.

The investigation was conducted by the U.S. Secret Service, Kentucky State Police, Lexington Police Department, IRS Criminal Investigation and U.S. Postal Inspection Service, and supported by the Justice Department’s Organized Crime Drug Enforcement Task Forces (OCDETF) and the International Organized Crime Intelligence and Operations Center (IOC-2).  Assistance was provided by the Romanian National Police (Service for Combating Cybercrime) and the Romanian Directorate for Investigating Organized Crime and Terrorism (Agency for Prosecuting Organized Crime).  The Justice Department’s Office of International Affairs provided significant support with the defendants’ extradition.  This case is being prosecuted by Assistant U.S. Attorneys Kathryn M. Anderson and Kenneth R. Taylor of the Eastern District of Kentucky and Senior Trial Attorney Timothy Flowers and Senior Counsel Frank Lin of the Criminal Division’s Computer Crime and Intellectual Property Section with assistance from the Criminal Division’s Money Laundering and Asset Recovery Section. 

Individuals believing they may be victims of the advanced fee and online auction fraud or brute-force attack schemes described herein are encouraged to visit the following website to obtain more information: https://justice.gov/usao-edky/information-victims-large-cases.  Tips to avoid becoming a victim of online auction fraud can be found here on the U.S. Secret Service’s website.            

For the RICO conspiracy and wire fraud conspiracy charges, each defendant faces up to 20 years in prison, a fine of $250,000, and three years of supervised release.  The same penalties apply to the money laundering conspiracy charges, except that the fine may be up to $500,000.  Additionally, if convicted of identity theft, Brown faces a term of 15 years in prison, a fine of $250,000, and three years of supervised release, and if convicted of aggravated identity theft, those charged face a mandatory-minimum sentence of two years in prison, to be served consecutive to any term of imprisonment ordered for the other counts of conviction. However, any sentence following a conviction would be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal statutes. 

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

LEXINGTON, Ky. — Eric D. James, 32, of Lexington, was sentenced yesterday to 188 months in federal prison, by United States District Judge Danny C. Reeves, for conspiracy to distribute more than five kilograms of cocaine and money laundering.  Reeves also ordered James to pay a fine of $2,000 and ordered the forfeiture of his interest in $586,369 in cash.

James previously admitted that, in early January 2017, he engaged in a conspiracy to obtain large quantities of cocaine from the southwest United States.  Shipments of these drugs were made by passenger vehicle, with the drugs concealed in various compartments within the vehicles.    The drugs were then transported to Lexington.   The proceeds from the distribution of these drugs were returned to the source.  On May 18, 2017, the Lexington Police stopped a vehicle carrying approximately 6 kilograms of cocaine.   On June 12, 2017, a search warrant was executed at the residence of James’ co-defendant, Ansar McIver.  Law enforcement seized a quantity of cocaine and approximately $586,369, which were proceeds from the drug distribution.         

James had previously been convicted of a drug trafficking felony, in Indiana, and Possession of Cocaine, in Kentucky.  James was on parole for drug trafficking at the time he committed these offenses.  James pleaded guilty in September 2018.

Under federal law, James must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for ten years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James (Robert) Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation; Richard Sanders, Commissioner of the Kentucky State Police; and Chief Lawrence Weathers, of Lexington Police Department, jointly made the announcement.

The investigation was conducted by the FBI (Lexington and San Diego), the Kentucky State Police, and the Lexington Police Department. The United States was represented by Assistant United States Attorney Roger W. West.

COVINGTON, Ky. – Trontez Mahaffey, a Cincinnati man, was convicted today by a federal jury in Covington for conspiring with Tyra Nelson, also from Cincinnati, and others, to possess with the intent to distribute marijuana and methamphetamine, which they transported in their luggage from Phoenix, Arizona to the Cincinnati/Northern Kentucky International Airport on September 8, 2017.

After slightly under one hour of deliberations following a three day trial, the jury convicted 23 year old Trontez Mahaffey of the conspiracy charge and two substantive charges of possession with the intent to distribute 80 pounds of marijuana and four pounds of crystal methamphetamine.           

According to testimony at trial, Mahaffey and Nelson were drug couriers for a drug organization with connections in Evansville, Indiana and Phoenix, Arizona.  They had made approximately five prior trips transporting controlled substances to the Cincinnati/Northern Kentucky International Airport from Phoenix, Arizona and paid approximately $1,500 each time.  Tyra Nelson, age 21, was charged in the same indictment, and pleaded guilty prior to trial.           

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), and Shawn Ward, Chief, Airport Police Department jointly announced the conviction.

The investigation was conducted by the DEA and the Airport Police Department.  The United States was represented by Assistant United States Attorney Laura K. Voorhees.

Mahaffey will appear for sentencing on March 9, 2019, and Nelson will appear for sentencing April 4, 2019.  They each face a mandatory minimum sentence of ten years in prison due to the quantity of methamphetamine involved.   However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal statutes before imposing a sentence.

LEXINGTON, Ky.  — Dewayne Thomas Farmer, 34, of Richmond, Kentucky, was sentenced yesterday to 15 years in federal prison, by Chief United States District Judge Karen K. Caldwell, for possession with the intent to distribute methamphetamine, possession of firearms in furtherance of the drug distribution, and possession of firearms by a convicted felon.

During his guilty plea, Farmer admitted that, on June 27, 2017, law enforcement executed a search warrant at his Richmond apartment.  During the search warrant, officers seized more than 220 grams of methamphetamine, which was in close proximity to two shotguns. 

Farmer confirmed that he had traded drugs for the shotguns located in his apartment, that he kept the shotguns for protection, and that he intended to sell the methamphetamine.  The value of the seized drugs exceeded $20,000.

Under federal law, Farmer must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for eight years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge of the ATF; Christopher Evans, Special Agent in Charge of the DEA; and James Ebert, Chief of the Richmond Police Department jointly made the announcement.

The investigation was conducted by the ATF, DEA, and Richmond Police Department.  The United States was represented by Assistant United States Attorney Roger W. West.