Eastern District of Kentucky

COVINGTON, Ky. — Charles Moran, Jr., 44, of Grant County, Kentucky, was sentenced, last Thursday, to 14 years in federal prison, by United States District Judge David Bunning, for distributing and possessing child pornography. 

Moran previously admitted that, in June 2017, he used his computer to download hundreds of images of child pornography and then made them available for sharing with other users of a peer-to-peer software.  Unbeknownst to Moran, detectives with the Electronic Crimes Unit of the Campbell County Police Department were conducting online undercover investigations of child pornography.  When Moran was arrested, in October 2017, investigators found over 1,000 images of child pornography on his computer, which depicted sex acts against children ranging in ages from 6 months old to teenagers.  Moran pleaded guilty to the charges in May 2018.           

Under federal law, Moran 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 25 years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; and Craig Sorrell, Chief of the Campbell County Police, jointly made the announcement.

The investigation was conducted by the FBI and Campbell County Police Department.  The United States was represented by Assistant United States Attorney Wade T. Napier.

LEXINGTON, Ky. – Scott W. Sulik, 54, of Versailles, Ky., was sentenced today to 48 months in federal prison, by United States District Judge Danny C. Reeves, for sending a series of emails containing threats to a Member of Congress.

Sulik pled guilty, in June 2018, and admitted to one count of cyberstalking.  Beginning in September 2017, Sulik used an email account hosted by Google to send threats to an email address associated with a Member of the United States Congress.  Sulik sent threatening emails to this address through December 2017.  Among other things, Sulik threatened the Member of Congress by stating:  “You put your family at risk . . .”; “. . . I’m threatening you.”; “What are you going to do before I erase you?”; and “Show me anyone who is going to protect you against me . . . .” 

Under federal law, Sulik 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, and Matthew R. Verderosa, Chief of the United States Capitol Police, jointly made the announcement.  The investigation was conducted by the United States Capitol Police.  The United States was represented by Assistant United States Attorney Andrew T. Boone.

LEXINGTON, Ky. – A Flemingsburg man was indicted today for engaging in crop insurance fraud.           

A federal grand jury in Lexington returned a ten-count indictment charging 45-year-old Christopher G. Hickerson with multiple counts of making false statements to influence the Federal Crop Insurance Corporation (“FCIC”) and companies the FCIC reinsures, and two counts of committing a conspiracy to commit an offense against the United States.           

The indictment alleges that as early as 2009, Hickerson, an agricultural producer of tobacco, winter wheat, and soybeans in Fleming County, hid his tobacco production from insurance companies, in order to claim damage to his crop sufficient to trigger crop insurance indemnity payments or generate larger indemnity payments, which are funded by the federal government through the FCIC.   The indictment also charges Hickerson with two counts of conspiracy to commit crop insurance fraud with the help of others.  The first conspiracy count alleges that Hickerson worked with others to obtain false quality adjustments on tobacco presented to graders as belonging to Hickerson, when in fact the tobacco belonged to others, in order to inflate his claim of loss.  The second count alleges that Hickerson obtained crop insurance policies in others’ names, in order to take advantage of their new producer status.  A new producer may receive a higher guarantee for their crop insurance than an individual who has a history of claiming losses. 

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Karen Citizen-Wilcox, Special Agent in Charge, United States Department of Agriculture Office of Inspector General; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; Christopher Altemus, Special Agent in Charge, Internal Revenue Service-Criminal Investigation; and Dwayne Depp, Director, Kentucky Department of Insurance Fraud Investigation Division, jointly announced the indictment.

The investigation preceding the indictment was conducted by the United States Department of Agriculture Office of Inspector General, United States Department of Agriculture Risk Management Agency, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and Kentucky Department of Insurance.  The indictment was presented to the grand jury by Assistant U.S. Attorneys Kathryn M. Anderson and Erin M. Roth. 

A date for Hickerson to appear in court has not yet been scheduled.  For each charge of making false statements to the FCIC, Hickerson faces up to 30 years in prison and a fine of $1,000,000.  For the conspiracy to violate federal law charges, Hickerson faces up to 5 years in prison and a fine of $250,000.  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. 

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

LEXINGTON, Ky. – A veterinarian and a cattle company were indicted today for using false interstate certificates of veterinary inspection, to ship tens of thousands of cattle interstate, in violation of federal law. 

Robert M. Duncan Jr., United States Attorney for the Eastern District of Kentucky; Karen Citizen-Wilcox, Special Agent in Charge, United States Department of Agriculture Office of Inspector General; William Swartz, Area Director, United States Department of Agriculture Animal Plant Health Inspection Service; and Mark McCormack, Special Agent in Charge, FDA Office of Criminal Investigations, made the announcement.         

A federal grand jury in Lexington returned an indictment charging Eugene Barber & Sons, Inc. (“Barber & Sons”), a cattle company based in Lexington with one count of conspiracy, one count of moving cattle in violation of federal law, and one count of aiding and abetting a false statement.  The indictment also charges veterinarian John M. Moran, 64, of Flemingsburg, Kentucky, with one count of conspiracy, one count of aiding and abetting moving cattle in violation of federal law, and one count of making a false statement.            

The indictment alleges that Barber & Sons and Moran conspired to violate the Animal Health Protection Act, which protects the health and welfare of the public by preventing, detecting, and eradicating the spread of diseases in animals that are shipped within the United States.  Federal law requires that an accredited veterinarian inspect cattle prior to their shipment, and then file certificates attesting to that inspection with appropriate state authorities.  The indictment alleges that Moran falsely certified he had inspected the cattle Barber & Sons had shipped, when in fact he had merely pre-signed the interstate certificate of veterinary inspection without inspecting the cattle.  According to the indictment, between January 28, 2013 and September 25, 2015, Moran certified at least 600 false interstate certificates of veterinary inspection for shipment of more than 60,000 cattle.  In exchange, he was paid over $19,000 by Barber & Sons. 

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

The USDA and FDA are investigating the case.  Assistant U.S. Attorney Kate K. Smith is prosecuting the case.  The Defendants’ initial appearance on the indictment is currently scheduled for September 21, 2018, at 10:30 a.m., in Lexington.

LEXINGTON, Ky.  — Tiffany Miller, 39, of Frankfort, Ky., pleaded guilty yesterday to conspiring to obtain controlled substances by fraud.

In her guilty plea, Miller admitted that she agreed with others to use stolen prescriptions, which she had obtained from hospitals where she worked, to obtain the drugs.  Miller forged the doctor’s names on stolen prescription forms for Ritalin and Adderall.  Miller and others presented the forged prescriptions to numerous pharmacies in Central Kentucky.  The  prescription forms were taken from Baptist Health, in Lexington; Fleming County Hospital, in Flemingsburg; and Manchester Memorial, in Clay County.  Miller and others were able to obtain more than 2,000 pills using the forged prescriptions.  Miller was indicted by a grand jury in July of 2018.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Christopher Evans, Special Agent in Charge, D.E.A.; and Richard Sanders, Commissioner of the Kentucky State Police, jointly announced the guilty plea.

The investigation was conducted by D.E.A. and Kentucky State Police.  The United States was represented by Assistant United States Attorney Roger W. West.

Miller is currently scheduled to appear for sentencing, before Senior United States District Judge Joseph M. Hood, in Lexington, on December 3, 2018, at 11:00 a.m.  She faces a maximum prison sentence of 4 years.  However, any sentence following conviction will be imposed by the Court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.

The former president of a Kentucky-based corporation and a political consultant were both indicted today for using corporate funds to make contributions to the campaign of a candidate for U.S. Senate and for causing the concealment of these contributions from the Federal Election Commission (FEC). 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Robert M. Duncan Jr. for the Eastern District of Kentucky, and Special Agent in Charge Amy S. Hess of the FBI’s Louisville Field Office, made the announcement.

A federal grand jury in Lexington returned an indictment charging Gerald G. Lundergan, 71, of Lexington, Kentucky, with one count of conspiracy, one count of making corporate campaign contributions, four counts of causing the submission of false statements to the FEC, and four counts of causing the falsification of documents with the intent to obstruct and impede a matter within the FEC’s jurisdiction.  The indictment also charges Dale C. Emmons, 66, of Richmond, Kentucky, with one count of conspiracy, one count of making corporate campaign contributions, two counts of causing the submission of false statements, and two counts of causing the falsification of documents with the intent to obstruct and impede.        

The indictment alleges that Lundergan used the funds of S.R. Holding Company Inc. (“S.R. Holding”), a company he owned, to pay for services provided by consultants and vendors to a campaign for U.S. Senate in the 2014 election cycle.  The candidate for this seat was Lundergan’s family member.  The indictment alleges that Lundergan and another S.R. Holding employee issued a number of payments from S.R. Holding funds for services that included audio-video production, lighting, recorded telephone calls, and campaign consulting between July 2013 and December 2015.  The payments referenced in the indictment allegedly totaled $194,270.39 over time. 

According to the indictment, these payments included $119,145.45 paid from S.R. Holding to Emmons and his company during this period for services to the campaign.   Emmons also used the funds of his corporation, Emmons & Company Inc., to pay other vendors and a campaign worker for services rendered to the campaign.  Over time, according to the indictment, Emmons paid $38,603.80 to these vendors for recorded telephone calls, technological support services, and other campaign-related expenses. 

The indictment alleges that Lundergan and Emmons concealed these activities from other officials associated with the campaign.  Their concealments allegedly caused the campaign unwittingly to file false reports with the FEC, in that the reports failed to disclose the source and amount of the corporate contributions.  

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

The FBI is investigating the case.  Trial Attorney Robert J. Heberle of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Andrew T. Boone and Kate K. Smith of the Eastern District of Kentucky are prosecuting the case. 

WASHINGTON – The former president of a Kentucky-based corporation and a political consultant were both indicted today for using corporate funds to make contributions to the campaign of a candidate for U.S. Senate and for causing the concealment of these contributions from the Federal Election Commission (FEC). 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Robert M. Duncan Jr. for the Eastern District of Kentucky, and Special Agent in Charge Amy S. Hess of the FBI’s Louisville Field Office, made the announcement.

A federal grand jury in Lexington returned an indictment charging Gerald G. Lundergan, 71, of Lexington, Kentucky, with one count of conspiracy, one count of making corporate campaign contributions, four counts of causing the submission of false statements to the FEC, and four counts of causing the falsification of documents with the intent to obstruct and impede a matter within the FEC’s jurisdiction.  The indictment also charges Dale C. Emmons, 66, of Richmond, Kentucky, with one count of conspiracy, one count of making corporate campaign contributions, two counts of causing the submission of false statements, and two counts of causing the falsification of documents with the intent to obstruct and impede.            

The indictment alleges that Lundergan used the funds of S.R. Holding Company Inc. (“S.R. Holding”), a company he owned, to pay for services provided by consultants and vendors to a campaign for U.S. Senate in the 2014 election cycle.  The candidate for this seat was Lundergan’s family member.  The indictment alleges that Lundergan and another S.R. Holding employee issued a number of payments from S.R. Holding funds for services that included audio-video production, lighting, recorded telephone calls, and campaign consulting between July 2013 and December 2015.  The payments referenced in the indictment allegedly totaled $194,270.39 over time. 

According to the indictment, these payments included $119,145.45 paid from S.R. Holding to Emmons and his company during this period for services to the campaign.   Emmons also used the funds of his corporation, Emmons & Company Inc., to pay other vendors and a campaign worker for services rendered to the campaign.  Over time, according to the indictment, Emmons paid $38,603.80 to these vendors for recorded telephone calls, technological support services, and other campaign-related expenses. 

The indictment alleges that Lundergan and Emmons concealed these activities from other officials associated with the campaign.  Their concealments allegedly caused the campaign unwittingly to file false reports with the FEC, in that the reports failed to disclose the source and amount of the corporate contributions.  

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

The FBI is investigating the case.  Trial Attorney Robert J. Heberle of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Andrew T. Boone and Kate K. Smith of the Eastern District of Kentucky are prosecuting the case. 

LEXINGTON, Ky.  — Eddie Paul Harris, 69, of Lincoln County, Kentucky, has been sentenced, by Chief United States District Judge Karen K. Caldwell.  On Thursday, August 23, 2018, he was formally sentenced for being a felon in possession of a firearm.  Harris was found to be an armed career criminal and was sentenced to 180 months imprisonment.

Harris, who had previously been convicted of two murders, armed robbery, and second degree robbery, among other things, admitted to unlawfully possessing the firearm.  On December 31, 2015, the Kentucky State Police Strategic Response Team, with the aid of local law enforcement, arrived at Harris’s residence to execute an arrest warrant.  Harris refused to exit the premises.  A witness, who had already exited the residence told officers that Harris was armed and intended to fire at officers, causing law enforcement to escalate its response.  Ultimately, officers were able to apprehend Harris.  Inside the residence, officers located a loaded, short-barreled Remington shotgun.  Harris pleaded guilty to the charges in July 2018.

Under federal law, Harris 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 period of five years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowery, Special Agent in Charge, ATF; and Richard Sanders, Kentucky State Police, jointly made the announcement.

ATF and Kentucky State Police conducted the investigation.  Assistant United States Attorney Lauren Tanner Bradley represented the United States. 

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.  Attorney General Sessions reinvigorated PSN in 2017, 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, local strategies to reduce violent crime.

The latest statistics indicate that 72,000 Americans died from drug overdoses in 2017 – the highest death toll in a single year and a staggering figure.  Nearly 30,000 of those deaths were attributable to one particularly deadly synthetic opioid – fentanyl.     

Our great Commonwealth knows the consequences of the crisis far too well.  According to the Kentucky Office of Drug Control Policy’s 2017 Overdose Fatality Report, 1,468 Kentucky residents died of a drug overdose in 2017.  Fentanyl was involved in 763 of those overdose deaths, accounting for 52% of all deaths – up from 47% in 2016.   

Many would confirm the Eastern District of Kentucky is at “ground zero” in the overdose crisis.  During 2017, in the 67 counties comprising our District, we had 894 of the Commonwealth’s overdose deaths, which accounts for approximately 61% of the resident overdose deaths for the entire state. 

More alarmingly, the top five counties in the Commonwealth, with the highest per capita overdose death rates, are all in our District.  Similarly, four of the top five counties, with the most fentanyl related overdose deaths, are also in our District – including Fayette County.  Fayette County ranked second in fentanyl related overdose deaths in 2017, with 112 overdoses.  Fayette County was also third for overdose deaths related to both heroin and fentanyl, with 33 additional deaths. 

The statistics represent real people, who fell prey to the plague of addiction; but these are not just numbers on a page – they are friends and loved ones.   

While prevention and treatment are critically important, law enforcement also plays a key role in fighting this crisis.  The Department of Justice, under Attorney General Sessions, is fighting back, and is using every tool in the toolbox – and even creating new ones – to do so. 

Our Office has received additional resources to combat the drug threat facing our District and we are committed to combatting the crisis with all the tools we have. 

Earlier this month, the Attorney General announced Operation Synthetic Opioid Surge (SOS).  SOS is based on a successful initiative in Manatee County, Florida, where law enforcement aggressively prosecuted fentanyl distribution cases, helping in the reduction of overdose death rates.  The Manatee County program resulted in a significant number of federal prosecutions of those trafficking this poison.   

As part of Operation SOS, our Office was one of ten selected to receive funding for a new prosecutor that will be dedicated to reducing access to illicit fentanyl.  Working in partnership with DEA, the Lexington Police Department, and the Fayette Commonwealth Attorney’s Office, we will aggressively prosecute readily provable cases involving the distribution of fentanyl and other synthetic opioids – because with these drugs, there is no such thing as a small case.  In working with our colleagues in law enforcement, we will strive to achieve meaningful results in reducing our overdose rates.       

One year ago, the Attorney General also announced the formation of the Opioid Fraud and Abuse and Detection Unit, an innovative DOJ initiative that uses data and analytics to target heath care fraud related to prescription opioids.  As a recipient of these resources, our Office will investigate and aggressively prosecute doctors who prey on opioid addiction here in Kentucky and defraud the government in the process.

Finally, as part of our mission to reduce access to all illegal drugs, we will continue our efforts in support of the Organized Crime Drug Enforcement Task Force (OCDETF).  OCDETF is a multiagency effort to disrupt and dismantle the most significant drug trafficking and criminal organizations operating in our District and across the country.  Our local OCDETF prosecutions have resulted in the seizure of enormous quantities of heroin, fentanyl, methamphetamine, and other drugs; the seizure of millions of dollars in drug proceeds; and the convictions of numerous drug traffickers.  We will continue to prioritize these important investigations.      

The work of law enforcement is critical to our success in combatting this crisis.  It will continue to make a difference, reduce crime, and save lives. 

Robert M. Duncan, Jr.

LEXINGTON, Ky. – Three Mexican Nationals illegally residing in Louisville, Ky. were sentenced today, by U.S. District Judge Danny C. Reeves, for their roles in a conspiracy to distribute five kilograms or more of cocaine. A federal jury found Imanol Pineda Penaloza, 37, and Efrain Villa Villanueva, 24, guilty in May 2018.  A third defendant, Sergio Aguilar Piedra, 25, entered a plea of guilty to the same charges.  Imanol Pineda Penaloza was sentenced to a term of 340 months, while Efrain Villa Villanueva was sentenced to 200 months.  Sergio Aguilar Piedra was previously sentenced to 125 months.

The evidence at trial established that all three men participated in the drug trafficking conspiracy from November 2015 until March 2018.  In 2015, the Narcotics Enforcement Unit with the Lexington Police Department executed a search warrant, at an address on Lonan Court in Lexington, and seized nearly 19 kilograms of cocaine, approximately $400,000 in U.S. currency and two firearms.  In 2016 and 2017, the defendants continued to distribute kilogram quantities of cocaine and other drugs, in Louisville and elsewhere. The amount of cocaine involved in the conspiracy was approximately 100 kilograms.

Each defendant must serve 85% of his federal prison sentence.  Upon their release from prison, each defendant will face deportation to Mexico.  

“The defendants were responsible for distributing an enormous amount of cocaine, and the significant sentences imposed underscore the seriousness of their illegal conduct,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “The investigation and prosecution were successful because of the good work of and cooperation among federal, state, and local law enforcement, and I commend their efforts.”    

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Darrell Christopher Evans, Special Agent in Charge, DEA Louisville; Lawrence Weathers, Chief of Police, Lexington-Fayette County Division of Police; and Richard Sanders, Commissioner of the Kentucky State Police, jointly announced the sentences.

LEXINGTON, Ky. — Damine Alexander Green, 42, of Lexington, pleaded guilty today to the distribution of more than 28 grams of crack cocaine.

In the course of his guilty plea, Green admitted that, on May 2, 2018, he sold more than an ounce of crack cocaine.  Green also admitted that he sold crack cocaine on two other occasions in Lexington. 

Green had previously been convicted of three felony offenses for trafficking in cocaine, including being convicted of being a Persistent Felony Offender, in Fayette County, prior to the commission of this offense and was on parole at the time he committed this.

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

The investigation was conducted by the ATF.  The United States was represented in the case by Assistant United States Attorney Roger W. West.

Green is currently scheduled to appear for sentencing before United States District Judge Danny C. Reeves, on December 7, 2018.  Green faces a minimum of 15 years and a maximum sentence of life in prison.  However, any sentence following conviction will be imposed by the Court, after its consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.

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.  Attorney General Sessions reinvigorated PSN in 2017, 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, local strategies to reduce violent crime.

COVINGTON, Ky. – Ryan McNerney, 41, of Dry Ridge, Ky., was sentenced yesterday to 120 months in federal prison, by United States District Judge David L. Bunning, for conspiracy to distribute methamphetamine.

McNerney pled guilty, in May 2018, and admitted to distributing between 50 and 150 grams of methamphetamine, in May 2017.  McNerney sold significant amounts of crystal methamphetamine to an informant, on four occasions that month, and he admitted to additional sales of the drug.

Under federal law, McNerney 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; Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration; and Richard Sanders, Commissioner of the Kentucky State Police, jointly made the announcement.  The investigation was conducted by the Drug Enforcement Administration and the Kentucky State Police.  The United States was represented by Assistant United States Attorney Tony Bracke.

LEXINGTON, Ky. — Dwayne Thomas Farmer, 36, of Richmond, Ky., pleaded guilty today to trafficking in methamphetamine, possession of a firearm by a convicted felon, and possession of a firearm in furtherance of drug trafficking.

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

Farmer admitted that he had traded methamphetamine for the two shotguns, which were located in his bedroom, behind the couch.  Farmer admitted that he kept the shotguns for protection and that he intended to sell the drugs.  The street value of the methamphetamine was more than $20,000.

Farmer, was previously convicted of felony drug trafficking in Knox County, Tennessee and Whitley County, Kentucky, prior to his commission of the federal offenses resolved by his guilty plea.

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

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

Farmer is currently scheduled to appear for sentencing before Chief United States District Judge Karen K. Caldwell, in Lexington, on December 19, 2018.  Farmer faces up to life in prison.  However, any sentence following conviction will be imposed by the Court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.

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.  Attorney General Sessions reinvigorated PSN in 2017, 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, local strategies to reduce violent crime.

COVINGTON, Ky. – Ronald Fryman, 38, of Cincinnati, was sentenced today to 150 months in federal prison, by United States District Judge David L. Bunning, for unlawful distribution of crystal methamphetamine.

Fryman previously pleaded guilty to unlawful distribution of crystal methamphetamine, on May 11, 2018.  According to his guilty plea agreement, on July 21, 2016, Fryman sold an informant 27.5 grams of methamphetamine, in the parking lot of the Florence Mall, in Boone County.  On September 22, 2016, the Defendant again sold an informant 25.7 grams of methamphetamine, near the same location.  Both substances were confirmed to be actual methamphetamine, known as crystal methamphetamine.  Fryman admitted that he was responsible for distributing at least 50 grams of the drug.

Fryman also admitted that he had previously been convicted of First Degree Possession of a Controlled Substance in Campbell County, in April of 2013. 

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky and Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), jointly made the announcement.  The investigation was conducted by the DEA.  The United States was represented by Assistant United States Attorney Laura Voorhees.

LEXINGTON, Ky. –The Department of Justice and U.S. Drug Enforcement Administration (DEA) have proposed a reduction for controlled substances that may be manufactured in the U.S. next year.  Consistent with President Trump’s “Safe Prescribing Plan” that seeks to “cut nationwide opioid prescription fills by one-third within three years,” the proposal decreases manufacturing quotas for the six most frequently misused opioids for 2019, by an average ten percent as compared to the 2018 amount.  The Notice of Proposed Rulemaking (NPRM) marks the third straight year of proposed reductions, which help reduce the amount of drugs potentially diverted for trafficking and used to facilitate addiction.

 “In the Eastern District of Kentucky, we have all seen and been touched by the tragic consequences of opioid abuse and addiction,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Illicit diversion of prescription opioids has been a significant catalyst for the epidemic and it is a critically important area to focus efforts to stem the tide.  The proposed quota adjustment is another tool in this fight. We support the proposed adjustment, as it will reduce the amount of highly addictive opioids potentially available for illicit diversion.”      

The press release announcing the proposal can be viewed at:

https://www.justice.gov/opa/pr/justice-department-dea-propose-significant-opioid-manufacturing-reduction-2019

LEXINGTON, Ky. - A Lexington man, who previously admitted to attempting to entice minors to permit him to engage in illicit sexual conduct, has been sentenced to 150 months in federal prison.           

Yesterday, Senior U.S. District Judge Joseph M. Hood sentenced Timothy Mark Poynter, II, 33, 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, Poynter previously admitted to communicating with two different undercover law enforcement agents, who both responded to an ad Poynter posted on Craigslist.com.  One undercover officer portrayed himself as the father of a 14-year old step-daughter, and the other officer posed as the mother of an 11-year old daughter.  Poynter engaged in conversations during which he indicated his interest in engaging in sexual intercourse with both of the fictitious minors.  He traveled to a meeting place in Lexington, designated by the undercover officer posing as the father, on April 26, 2017.  Poynter admitted that he was the person who had been communicating with the officer, and that those communications contained sexually explicit conversations. 

Poynter pleaded guilty to the charge in May of 2018.           

Under federal law, Poynter must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for the remainder of his life.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Steven Igyarto, Resident Agent in Charge, Department of Homeland Security, Homeland Security Investigations; Rick Sanders, Commissioner of the Kentucky State Police, and Kentucky Attorney General Andy Beshear jointly announced the sentence.

The investigation was conducted by Homeland Security Investigations, the Electronic Crimes Branch of the Kentucky State Police, 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.

The prosecution involved more than 200 grams of the powerful and dangerous opioid

ASHLAND, Ky. – Demetre Brown-Lovelace, 27, of Belleville, Mich., and Noelle Tufts, 24, of Ironton, Ohio, were sentenced to federal prison today, by United States District Judge David L. Bunning, for a conspiracy to distribute fentanyl.  Brown-Lovelace was sentenced to ten years and Tufts was sentenced to five years.

Brown-Lovelace and Tufts previously admitted that in April 2017, they conspired together and with others to distribute 209 grams of fentanyl.  Brown-Lovelace had a prior conviction for trafficking in a controlled substance, heroin, from the Boyd Circuit Court, in April 2016.  Brown-Lovelace and Tufts entered a plea to the conspiracy charge in May 2018.            

Under federal law, Brown-Lovelace and Tufts must serve 85 percent of their prison sentence; and, upon their release, they will be under the supervision of the United States Probation Office for eight years and four years, respectively.

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

The investigation was conducted by the FBI, Huntington, WV Resident Agency and the Kentucky State Police.  The United States was represented by Assistant United States Attorney Cynthia T. Rieker.

LEXINGTON, Ky. – According to court records unsealed yesterday, two Garrard County, Ky. men have been charged with engaging in a massive tax fraud scheme, involving more than $14 million.           

As alleged in the indictment, 47-year-old Clarence Michel Jr. and 49-year-old Warren Griffin II failed to pay $14,671,184 in payroll taxes, owed by various staffing companies that they operated between 2012 and 2016.  Specifically, the indictment alleges Michel and Griffin withheld payroll taxes from their employees’ paychecks; but instead of paying that money over to the Internal Revenue Service, they instructed an employee to write checks to them.  The indictment further alleges that, to hide this scheme, Michel and Griffin changed the names of their companies and started new companies under the names of various nominee owners.  Similarly, the indictment charges Michel and Griffin with aiding and assisting in the preparation of false personal tax returns, for tax years 2012 through 2015.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Christopher Altemus, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, jointly announced the indictment.

The investigation preceding the indictment was conducted by the Internal Revenue Service-Criminal Investigation.  The indictment was presented to the grand jury by Assistant U.S. Attorney Dmitriy Slavin. 

Michel is scheduled to appear in court at 1:30PM, today.  Griffin previously appeared in the Southern District of Illinois, where he was arrested.  His appearance in Kentucky has not yet been set.  For the conspiracy charge and the charges of failing to pay over payroll taxes, each defendant faces up to 5 years in prison and a fine of $250,000.  For the false statements on their personal taxes, each faces 3 years in prison and a $250,000 fine.  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. 

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

COVINGTON, Ky., — Ryan J. Brock, 34, of Covington, was sentenced yesterday to 360 months in federal prison, by United States District Judge David L. Bunning, for production of child pornography.  The sentence imposed was the maximum allowed by the statute.

Brock previously admitted to sexually abusing a minor relative and producing photographs and videos of the abuse using a tablet device.  When a search warrant was executed at Brock’s residence in Covington, his device was not located, but an empty box for the device was found inside his vehicle.  Agents also located a laptop that was forensically examined and found to contain images and videos depicting the sexual abuse perpetrated by Brock, as well as other child pornography.  He pleaded guilty to the charge in December 2017.

Under federal law, Brock must serve 85 percent of his prison sentence, and, upon release, will be under the supervision of the United States Probation Office for 25 years.

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 Chief Robert Nader, Covington Police Department, jointly announced the sentence. 

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

FRANKFORT, Ky. – A Federal jury sitting in Frankfort has convicted Ronnie C. Rodgers, 62, of Columbia, Ky., of conspiracy to commit mail fraud, wire fraud and securities fraud, arising from the sale of interests in oil and gas exploration ventures in South Central Kentucky, between 2007 and 2017.   Rodgers, along with his brother, Ricky Rodgers, sold interests in oil and gas programs, in Adair, Clinton, Pulaski, and Warren Counties, and various sites in Tennessee, utilizing false and misleading representations about the chances of hitting productive oil wells, the length of time the wells would produce, and the amount of profit the investors could expect.  The investments, totaling around $10 million, were sold under the names Rick-Rod Oil, Big South Resources, R&R Plus, and Hydro & Green Global Energy. 

United States District Judge Gregory F. Van Tatenhove scheduled sentencing for December 5, 2018, in Frankfort.  Rodgers faces a maximum sentence of five years in prison, on the single count of conspiracy. 

The case was investigated by the United States Postal Inspection Service and the Kentucky Department of Financial Institutions, Division of Securities. The United States was represented by Assistant U.S. Attorneys Ken Taylor and Neeraj Gupta.

LEXINGTON, Ky. — Byron Lee White, 36, of Lexington, has pleaded guilty, to conspiracy to distribute 40 grams or more of fentanyl and heroin.

During his guilty plea, on August 2, 2018, White admitted that he conspired with others to distribute heroin and fentanyl. White admitted that he and others sold heroin, on November 16, 2017, and fentanyl and heroin on both December 5, 2017 and 22, 2017. White also admitted that he and others sold 55 grams of Fentanyl on January 17, 2018.  White acknowledged that he had previously been convicted of the felony drug offense of Trafficking in Cocaine in Fayette Circuit Court in 2005.   White was indicted by a grand jury in June of 2018.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; and Richard Sanders, Commissioner, Kentucky State Police, jointly made the announcement.

Byron Lee White is currently scheduled to appear for sentencing before Chief United States District Judge Karen K. Caldwell, in Lexington, on November 8, 2018, at 4:00 p.m.  He faces prison sentence of 10 years to Life imprisonment.  However, any sentence following conviction 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 F.B.I. and Kentucky State Police.  The United States was represented in the case by Assistant United States Attorney Roger W. West.

COVINGTON, Ky. – Kevin Sellers, 26, of Covington, was sentenced today to 52 months in federal prison, by United States District Judge David L. Bunning, for unlawful possession of firearms.

Sellers previously pleaded guilty to possessing three firearms after having been convicted of a misdemeanor crime of domestic violence.  According to the guilty plea agreement, the Covington Police Department stopped the vehicle Sellers was driving, on June 20, 2017, after receiving a complaint that he had threatened an individual with a gun.  When officers stopped the vehicle, Sellers and three other individuals were present.  In the car, officers discovered three semi-automatic pistols, including one that was capable of accepting a large capacity magazine and another that was later determined to have been stolen from a local police department.  

Another Defendant, Jack Deakins, who was in the vehicle at the time, was convicted of the same offense and sentenced to 30 months in prison, on June 28, 2018.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Federal Bureau of Investigations; and Robert Nader, Chief of the Covington Police Department, 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 Laura Voorhees.

LEXINGTON, Ky. — Brandon D. Martin, 29, of Winchester, has been sentenced to 110 months in federal prison, by Senior United States District Joseph M. Hood, for possessing stolen firearms.

Martin previously admitted that in June 2017, he had possessed five stolen firearms.  Martin admitted that he knew the firearms had been stolen when he pawned them at several pawn shops in the Winchester area.  Law enforcement agents in Clark and    Woodford counties confirmed that these firearms had been stolen from burglaries of residences in Clark and Woodford Counties.  Martin faces state charges in some of these counties for the burglaries.  Martin has previously been convicted of three prior felony offenses.

Martin pleaded guilty to the federal charge in March 2018.

Under federal law, Martin 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 Lowery, Special Agent in Charge, ATF; Burl Perdue, Jr., Clark County Sheriff, and James Fugate, Chief of the Versailles Police Department, jointly made the announcement.

The investigation was conducted by the ATF, Clark County Sheriff’s Office, and the Versailles Police Department.  The United States was represented by Assistant United States Attorney Roger W. West.

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. Attorney General Jeff Sessions reinvigorated PSN in 2017 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. – Hershel Jay (“Jay”) Arrowood, Lesa Arrowood, Terry Herald, and Arrow-Med Ambulance, Inc. (“Arrow-Med”) have each pled guilty to health care fraud, in connection with fraudulent claims to Medicare and Medicaid for medically unnecessary ambulance transports.

Jay Arrowood has owned and operated Arrow-Med in Breathitt County, Ky. since September 2012.  Arrow-Med provided certain patients with non-emergency ambulance transports, particularly to and from a dialysis clinic in Jackson, Ky.  Jay Arrowood, Lesa Arrowood, Terry Herald, and Arrow-Med all admitted that they knew that Medicare would only pay for these non-emergency transports if other forms of transportation would endanger the patient’s health.  Similarly, the defendants knew that Medicaid would only pay for non-emergency transports if the patient’s condition required a transport by stretcher.

Jay Arrowood, Terry Herald, and Arrow-Med all admitted that between September 2012 and August 2015, they worked together to submit false claims to Medicare and Medicaid seeking payment for non-emergency ambulance transports provided to certain patients.  Lesa Arrowood, Jay Arrowood’s wife, admitted that she knowingly joined this scheme in December 2013.  The defendants further admitted that they knew these patients did not qualify for Medicare or Medicaid coverage for the ambulance services, and Arrow-Med’s run sheets – medical records that documented the transports – were falsified to misrepresent the patients’ true medical condition.  As a result of the defendants’ conduct, Medicare and Medicaid were defrauded of $249,539.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Derrick Jackson, Special Agent in Charge of the Atlanta Regional Office of the Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the Kentucky Office of the Attorney General-Office of Medicaid Fraud and Abuse jointly announced the guilty pleas.

The investigation was conducted by HHS-OIG; the Kentucky Office of the Attorney General-Office of Medicaid Fraud and Abuse and the United States Attorney’s Office.  The United States was represented by Assistant United States Attorneys Kate K. Smith and Paul C. McCaffrey.

The defendants are currently scheduled to appear for sentencing before Judge Joseph M. Hood on October 29, 2018.  Their sentences will be imposed by the Court, after consideration of the United States Sentencing Guidelines and the federal statutes governing the imposition of sentences.

LEXINGTON, Ky. – Three men have been sentenced, in the United States District Court in Lexington, for their roles in a conspiracy to distribute fentanyl, an extremely powerful, Schedule II controlled substance.  The total amount of fentanyl seized during the investigation was in excess of three kilograms.  On Friday, United States District Judge Danny C. Reeves sentenced Miguel Esparza, 30, of Lexington, to 157 months in prison.  Judge Reeves previously sentenced co-Defendant Gadiel Ortiz-Flores, 39, of Lawrenceburg, to 136 months in prison and co-Defendant Brian Walker Hensley, 38, also of Lawrenceburg, was previously sentenced to 78 months in prison.

The joint investigation, by federal and state law enforcement, into the drug trafficking activities of the defendants culminated with the execution of search warrants on their residences and their arrests, on December 5, 2017.  During the early stages of the investigation, agents purchased more than 300 grams of fentanyl from the defendants.  During their arrests, Ortiz-Flores and Hensley were found in possession of one kilogram of fentanyl that was intended for distribution.  At Esparza’s residence, in Fayette County, law enforcement officers seized nearly two kilograms of fentanyl that was intended for distribution.  Fentanyl is extremely potent and can be lethal in the two-milligram range.  Additional evidence found at the Esparza residence indicated that Esparza processed the drug in his residence, including dozens of latex gloves, masks, an air filtration system, and nearly one kilogram of non-controlled substances used to dilute the potent fentanyl.

 “The defendants in this case were dealing in massive quantities of dangerous drugs,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “The number of overdose deaths in our community continues to rise, and the quantities of illegal drugs involved in this criminal conspiracy were placing many lives in danger.  Without the outstanding work of our law enforcements partners, this prosecution would not have been possible.  Their efforts removed these drugs from our streets, made our community safer, and saved lives.  Prosecuting those who deal in this scourge to our community will continue to be a core priority of our Office.” 

United States Attorney Duncan; Darrell Christopher Evans, Special Agent in Charge, DEA Louisville; Stuart Lowrey, Special Agent in Charge ATF Louisville; Richard Sanders, Commissioner of the Kentucky State Police; Lawrence Weathers, Chief of Police, Lexington-Fayette County Division of Police; and  Joe Milam, Sheriff, Anderson County Sheriff’s Office, jointly made the announcement.

The investigation was a cooperative effort led by investigators with the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Kentucky State Police; the Lexington Police Department and the Anderson County Sheriff’s Office.

LEXINGTON, Ky. — Vincent S. Edge, 37, of Detroit, was sentenced to 87 months in federal prison, by United States District Judge Danny C. Reeves, for conspiring to distribute fentanyl, heroin, and oxycodone.   Edge was also ordered to pay a $2,000 fine.

Edge previously admitted that, in early 2016, he came to the Richmond and Morehead, Kentucky areas to sell fentanyl, heroin, and oxycodone.  Edge admitted that he supplied oxycodone to drug dealers in Morehead.  Edge also leased an apartment in Richmond and sold fentanyl, heroin, and oxycodone from that location.  Law enforcement agents purchased fentanyl, heroin, and oxycodone from Edge, in September of 2016.  Edge also recruited other drug dealers from Detroit to live at his Richmond apartment and sell fentanyl, heroin, and oxycodone drugs in the areas.  Edge supplied the drugs to local sellers and took the profits back to Detroit.  On December 8, 2016, state and federal law enforcement agencies executed a search warrant at the apartment and recovered, drug proceeds, fentanyl, heroin, and oxycodone.  Edge was ultimately arrested in Northern Ohio.

Edge pleaded guilty to the federal charge in April 2018.

“This is another example of drug traffickers from larger cities coming to Central Kentucky to profit from selling the illegal drugs that are devastating our community,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “This prosecution should serve as warning to those who look to engage in similar conduct:  if you are selling these dangerous drugs and profiting from the suffering and death they cause, no matter where you are from, we will look to prosecute you and place your freedom in jeopardy.  We are committed to using all the tools we have to combat this continuing epidemic.” 

“I want to commend the work of the DEA and our local law enforcement partners  in this case,” said U.S. Attorney Duncan.  “The partnerships between federal, state, and local law enforcement are critically important to reducing the presence of these drugs and the overdoses that are engulfing our community.”  

Under federal law, Edge 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.

United States Attorney Duncan; Darrell Christopher Evans, Special Agent in Charge, DEA; Richard Sanders, Commissioner of the Kentucky State Police; Matt Sparks, Rowan County Sheriff, and Mike Coyle, Madison County Sheriff, jointly made the announcement.

The investigation was conducted by the DEA, KSP, Rowan County Sheriff’s Office, and Madison County Sheriff’s Office, with the assistance of the Appalachian HIDTA.  The United States was represented by Assistant United States Attorney Roger W. West.

LEXINGTON, Ky. — Brandi Stamper, 30, of Lexington, was sentenced yesterday to 15 years in federal prison, by Chief United States District Judge Karen K. Caldwell, for conspiring to distribute more than 40 grams of fentanyl, more than an ounce of crack cocaine, and more than half a kilo of cocaine.   Stamper was also sentenced for being a felon in possession of firearms and for possessing a firearm in furtherance of her drug trafficking crime.

On Monday, Stamper’s co-defendant, Michael D. Jackson, 37, was sentenced to 25 years in federal prison after he pleaded guilty to the charges.  Jackson’s convictions, combined with his criminal record, qualified him as both an Armed Career Criminal and Career Offender. 

Jackson and Stamper previously admitted that, in early 2017, members of the Lexington Police Department (LPD), Narcotics Unit began an investigation into the residence they shared.  The residence was located on Norway Street, near Lafayette High School.  During the investigation, LPD stopped and searched Jackson’s vehicle, discovering a 9 mm firearm and large quantities of drugs.  LPD detectives also executed a search on their residence where Stamper was located.  LPD located  quantities of a fentanyl mixture and cocaine, more than $80,000 in cash, a loaded Taurus handgun, a loaded Glock semi-automatic pistol, a loaded Cobra semi-automatic pistol, which was determined to have been stolen, and a vehicle that had been purchased with proceeds from Jackson and Stamper ’s drug trafficking. 

Jackson admitted that he had prior drug trafficking convictions in Fayette Circuit Court.  Stamper also admitted that she had prior felony convictions for Trafficking in Cocaine and Possession of Cocaine in Fayette Circuit Court.  Jackson and Stamper pleaded guilty to these federal charges in April 2018.

“The Defendants’ drug trafficking activities, possession of firearms, and past criminal histories have led to this result,” stated Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “The sentences imposed should serve as warning to those who engage in similar criminal activities.  If you illegally possess firearms, particularly if you are engaged in drug trafficking, you are putting yourself at risk for a substantial stay in federal prison.” 

“I want to commend the work of the ATF and the Lexington Police Department on this investigation and prosecution,” said U.S. Attorney Duncan.  “The partnership between federal, state, and local law enforcement is vitally important in preventing violent crime and reducing the danger caused by drug trafficking activities.”  

Under federal law, Jackson and Stamper must serve 85 percent of their respective prison sentences. Upon release, Jackson and Stamper will both be under the supervision of the United States Probation Office for eight years.

United States Attorney Duncan; Stuart Lowery, Special Agent in Charge, ATF; and Chief Lawrence Weathers of the Lexington Police Department, jointly made the announcement.

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

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. Attorney General Jeff Sessions reinvigorated PSN in 2017 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 Junction City man, Gene Paul Pendygraft, 46, has been sentenced to 292 months in federal prison, to be followed by a life term of supervised release, for knowingly receiving child pornography.

On Friday, United States District Judge Danny C. Reeves formally sentenced Pendygraft, who must serve 85 percent of his federal prison sentence.

Pendygraft previously admitted that, in November of 2016, he knowingly received images of child pornography on his laptop computer.  A forensic examination of Pendygraft’s device revealed seven videos of child pornography, including some that depicted children under the age of 12 and some that depicted sadistic or masochistic conduct.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Steve Igyarto, Special Agent in Charge, Department of Homeland Security- Homeland Security Investigations (DHS-HSI), and Rick Sanders, Commissioner, Kentucky State Police (KSP), jointly announced the sentence.

The investigation was conducted by HSI and the KSP.  The United States was represented by Assistant United States Attorney David Marye.

Three men and two women pleaded guilty to Conspiracy to Possess Counterfeit and Unauthorized Access Devices in March 2018

COVINGTON, Ky. – Jose Valdes, Jairo Castro, Yanetsi Sanchez, Arnado Salazar and Dianey Quintero, all residents of Tampa, Fla., were sentenced yesterday, to a range of 37 months to 46 months in federal prison, by United States District Judge David L. Bunning, for committing credit card fraud.

According to their guilty pleas, the Defendants were responsible for mailing a package containing 227 blank credit cards from Tampa, to a Florence, Ky. motel, using a local shipping company.  Due to suspicious markings on the package, law enforcement began an investigation that ultimately led to a search of the package.  Law enforcement tracked the package to the motel, and found the Defendants waiting, in three vehicles located nearby.  A search of those vehicles resulted in the discovery of laptops and a thumb drive containing approximately 2,000 stolen account numbers.  Also located were skimmer devices (used at gas stations to record account numbers from unsuspecting customers using the pumps), equipment designed to download the stolen account numbers onto blank cards, and seven money orders that had been purchased with stolen account numbers.  The Defendants were arrested before they could unlawfully use the credit cards in the package.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Yvonne Dicristoforo, Special Agent in Charge, United States Secret Service, jointly made the announcement.  The investigation was conducted by the Cincinnati/Northern Kentucky International Airport Police and the United States Secret Service.  The United States was represented by Assistant United States Attorney Laura Voorhees.

Federal jury found physician guilty of 173 drug trafficking offenses

COVINGTON, Ky. – Dr. Sundiata El-Amin, 69, of Ft. Wayne, Indiana, was sentenced today to 151 months in federal prison, by United States District Judge David L. Bunning, for 173 drug trafficking offenses. Dr. El-Amin was also ordered to pay a special assessment of $17,300.

Dr. El-Amin was previously convicted by a federal jury of conspiracy to distribute controlled substances, maintaining a premises for the distribution of controlled substances, and 171 individual counts of distributing controlled substances, in March 2018.  According to the evidence presented, Dr. El-Amin conspired with his office manager to unlawfully dispense more than 300,000 oxycodone tablets, outside the scope of professional practice and without a legitimate medical purpose, over a period of approximately one year.  The evidence further established that he repeatedly issued improper prescriptions for high doses of oxycodone and regularly issued the prescriptions without examining patients.          

Dr. El-Amin was indicted in December of 2015.  His office manager, Wendy Price, entered a guilty plea in February 2018 to charges of conspiring with Dr. El-Amin to commit the offenses.  Under federal law, Dr. El-Amin 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 3 years.

“The sentence imposed reflects the seriousness of the offense,” stated Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “The Defendant’s unnecessary prescribing of oxycodone damaged our communities and helped fuel the opioid epidemic.  Our Office will continue to prioritize prosecuting these important cases.”

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration, jointly made the announcement.  The investigation was conducted by the Drug Enforcement Administration.  The United States was represented by Assistant United States Attorneys Tony Bracke and Laura Voorhees.

LEXINGTON, Ky. — Michael D. Jackson, 37, of Lexington, was sentenced yesterday to 25 years in federal prison, by Chief United States District Judge Karen K. Caldwell, for conspiring to distribute more than 40 grams of fentanyl, more than an ounce of crack cocaine, and more than half a kilo of cocaine.   Jackson was also sentenced for being a felon in possession of firearms and for possessing a firearm in furtherance of his drug trafficking crime.  Jackson’s convictions, combined with his prior criminal record, qualified Jackson as both an Armed Career Criminal and Career Offender.

Jackson previously admitted that, in early 2017, members of the Lexington Police Department (LPD), Narcotics Unit began an investigation into his residence, which was located on Norway Street, near Lafayette High School.  During the investigation, LPD stopped and searched Jackson’s vehicle, discovering a 9 mm firearm and large quantities of drugs.  LPD detectives also executed a search on his residence, where they located  quantities of a fentanyl mixture and cocaine, more than $80,000 in cash, a loaded Taurus handgun, a loaded Glock semi-automatic pistol, a loaded Cobra semi-automatic pistol, which was determined to have been stolen, and a vehicle that had been purchased with proceeds from Jackson’s drug trafficking. 

Jackson also admitted that he had prior drug trafficking convictions in Fayette Circuit Court.  Jackson pleaded guilty to the charges in April 2018.

“The Defendant’s drug trafficking activities, possession of firearms, and past criminal history have led to this result,” stated Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.  “The sentence imposed should serve as warning to those who engage in similar criminal activities.  If you illegally possess firearms, particularly if you are engaged in drug trafficking, you are putting yourself at risk for a substantial stay in federal prison.” 

“I want to commend the work of the ATF and the Lexington Police Department on this investigation and prosecution,” said U.S. Attorney Duncan.  “The partnership between federal, state, and local law enforcement is vitally important in preventing violent crime and reducing the danger caused by drug trafficking activities.”   

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 eight years.

United States Attorney Duncan; Stuart Lowery, Special Agent in Charge, ATF; and Chief Lawrence Weathers of the Lexington Police Department, jointly made the announcement.

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

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. Attorney General Jeff Sessions reinvigorated PSN in 2017 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 Nicholasville man, Jordan Combs, 29, has been sentenced to 30 years in federal prison, to be followed by a life term of supervised release, for inducing minors to produce sexually explicit images.

On Monday, Chief United States District Judge Karen K. Caldwell formally sentenced Combs, who was convicted by a jury, on March 8, 2018, of 10 counts of receipt of sexually explicit images in interstate commerce, four counts of producing such images, five counts of distributing such images, and one count of possession of such images.  Combs must serve 85 percent of his prison sentence.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Steven Igyarto, Special Agent in Charge, Department of Homeland Security – Homeland Security Investigations (DHS-HSI); and Richard Sanders, Commissioner of the Kentucky State Police; jointly announced the sentence.

The investigation was conducted by the Electronic Crimes Branch of the Kentucky State Police and DHS-HSI.  The United States was represented by Assistant United States Attorney David Marye.

LEXINGTON, Ky. – A Lexington man, Saul Aguilar -Andres, 20, has been sentenced to 50 years in federal prison, to be followed by a life term of supervised release, for using two minors to produce sexually explicit images and transporting those images, by posting them on Drop Box.

On Monday, Senior United States District Judge Joseph M. Hood formally sentenced Aguilar-Andres.  Aguilar-Andres must serve 85 percent of his federal prison sentence.

Aguilar-Andres previously admitted that, in September and October of 2016, he used two minor victims to produce the sexually explicit images, and that in January of 2017, he transported those sexually explicit images by posting them to his Drop Box account.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Louisville FBI; and Chief Lawrence Weathers, of the Lexington Police Department, jointly announced the sentence.

The investigation was conducted by the FBI, in Lexington and Chicago, and the Lexington Police Department.  The United States was represented by Assistant United States Attorney David Marye.

LEXINGTON, Ky. – On Friday, Kevin Labracio Frazier was sentenced to 115 months in federal prison, by United States District Judge Danny C. Reeves, for an assault resulting in serious bodily injury. 

According to testimony at trial, Frazier, an inmate at the Federal Medical Center in Lexington, assaulted another inmate that resulted in the victim suffering facial fractures and a deep laceration under his eye. Evidence further revealed that Frazier repeatedly punched the victim in the head and face outside of the housing unit, that the victim briefly lost consciousness, and the victim was transported to the University of Kentucky for medical treatment.   Frazier was convicted at trial, in April of 2018.

Under federal law, Frazier must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for 3 years.           

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Amy Hess, Special Agent in Charge of the Federal Bureau of Investigation’s Louisville Field Office, jointly made the announcement. 

The investigation was conducted by Federal Bureau of Investigation and the Bureau of Prisons.  The United States was represented by Assistant United States Attorney Ron L. Walker, Jr. 

FT. MITCHELL, Ky. – Dana Carter, 40, of Dayton, Ohio was sentenced today to 4 months in prison by United States District Judge David L. Bunning for making a false bomb threat. 

Carter previously admitted that, on October 22, 2016, he made a series of phone calls to the Greater Cincinnati/Northern Kentucky International Airport to falsely report that there was a bomb on an outbound United Airlines flight to Dallas, Texas.  The flight was cancelled and passengers were rebooked on other flights; no bomb was located.  According to the Defendant, he was running late for the flight (on which he was a passenger) and made the false statements in attempt to delay it.

Under federal law, Carter must serve 85 percent of his prison sentence, and, upon release, will be under the supervision of the United States Probation Office for 3 years.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Amy Hess, Special Agent in Charge of the Federal Bureau of Investigation’s Louisville Field Office, jointly made the announcement today after the sentencing. 

The investigation was conducted by the FBI’s Northern Kentucky Joint Terrorism Task Force and the Cincinnati/Northern Kentucky International Airport Police Department.  The United States was represented by Assistant United States Attorney Elaine K. Leonhard

LEXINGTON, Ky. – Thomas Scott Taylor, 38, of Lexington, Kentucky, was sentenced today to 18 months in prison by United States Senior District Court Judge Joseph M. Hood for exceeding authorized access of a protected computer, a felony under federal criminal statutes.  Judge Hood also ordered Taylor to pay restitution in the amount of $492,689.59.

Taylor previously admitted to unlawfully abusing his authority to access certain protected databases of his employer, IntelliSurvey Inc., for personal gain.  He further admitted that he knew that IntelliSurvey purchased and maintained a set of Amazon.com gift cards for use in rewarding IntelliSurvey’s survey participants and that some survey participants failed to redeem their Amazon.com gift cards.  Taylor identified those unredeemed gift cards and used them to credit his personal Amazon account.  In total, from December 16, 2011 until August 8, 2017, Taylor admitted he unlawfully stole $492,689.59 in Amazon.com gift cards from IntelliSurvey and used them to make 3,300 purchases at Amazon.com, ordering items that are easily resalable or for personal use.

Under federal law, Taylor must serve 85 percent of his prison sentence, and, upon release, will be under the supervision of the United States Probation Office for 3 years.

Robert M. Duncan, United States Attorney for the Eastern District of Kentucky, Jon Oldham, Resident Agent in Charge of the United States Secret Service, and Lawrence Weathers, Chief of Police for the Lexington Police Department, jointly made the announcement today after the sentencing.

The investigation was conducted by the United States Secret Service and the Lexington Police Department.  The United States was represented by Assistant United States Attorney Kathryn Anderson.

LEXINGTON, Ky. – A Georgetown man, Nicholas Aaron Willinger, 34, has been sentenced to 190 months in federal prison, to be followed by a life term of supervised release, for knowingly receiving child pornography.

On Monday, Senior United States District Judge Joseph M. Hood formally sentenced Willinger, who must serve 85 percent of his federal prison sentence.

Willinger previously admitted that, in November of 2013, he knowingly received images of child pornography on his laptop computer.  A forensic examination of Willinger’s device revealed 56 videos of child pornography, including eleven videos depicting children under the age of six and four videos that depicted sadistic or masochistic conduct.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Amy S. Hess, Special Agent in Charge, Federal Bureau of Investigation, and Kentucky State Police Commissioner Rick Sanders jointly announced the sentence.

The investigation was conducted by the FBI and the KSP.  The United States was represented by Assistant United States Attorney David Marye.

LEXINGTON, Ky. — Jose Jesus Navarro-Rios, a.k.a. “La Daga,” a Mexican National illegally residing in Lancaster, Ky., has pled guilty to three counts of distributing more than 500 grams of Methamphetamine and to unlawfully reentering the United States after previously being deported.

In his guilty plea, Navarro-Rios admitted that, on three occasions in the Spring of 2018, he sold methamphetamine in excess of 500 grams, to a cooperating witness for law enforcement.  During the course of the joint federal and state investigation, law enforcement agents seized more than 12 pounds of methamphetamine, worth more than $125,000.  Navarro-Rios admitted that he was unlawfully present in the United States, after being deported for a prior federal conviction for unlawfully reentering the United States, in 2013.

Robert M. Duncan Jr., United States Attorney for the Eastern District of Kentucky; Angela L. Byers, FBI Cincinnati; Amy Hess, FBI Louisville; Kristoffer Cortex, Acting Assistant Field Office Director, ICE; and Richard Sanders, Commissioner of the Kentucky State Police, jointly announced the guilty plea.

The investigation was conducted by FBI, KSP and ICE.  The United States was represented in the case by Assistant United States Attorney Roger W. West.

Navarro-Rios is currently scheduled to appear for sentencing, in Lexington, on November 2, 2018, at 1:00 p.m.  Navarro-Rios faces a prison sentence of not less than ten years nor more than Life imprisonment.  However, any sentence will be imposed by the Court, after its consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.

WASHINGTON – A federal grand jury in Lexington, Kentucky, today returned a four-count indictment charging Jamie Derickson, a former deputy of the Powell County Detention Center, with violating the civil rights of an arrestee by conspiring with inmates at the detention center to assault the arrestee in a jail cell. Derickson is also charged with lying to the FBI about the assault.

The indictment alleges that on Aug. 17, 2016, Derickson conspired with several inmates in the jail, agreeing that the inmates would assault the arrestee after Derickson placed him in the cell. When the arrestee entered the cell, the inmates assaulted the arrestee, causing bodily injury. The indictment also alleges that Derickson violated the arrestee’s constitutional rights by aiding and abetting the inmates’ assault of the arrestee, and by being deliberately indifferent to the known serious risk that the victim would be assaulted.  Finally, the indictment alleges that Derickson later lied to special agents of the FBI when he claimed to them that, at the time he placed the arrestee in the cell, he did not know that the inmates were going to assault him.

If convicted, Derickson faces a maximum term of imprisonment of 10 years for each civil rights offense and five years for lying to investigators.

An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.

The FBI conducted the investigation. Assistant United States Attorney Hydee Hawkins of the Eastern District of Kentucky and Trial Attorney Zachary Dembo of the Civil Rights Division are prosecuting the case.

LEXINGTON, Ky. — Jose Alejandro Diaz -Tinoco, 35, Luis Eduardo Salto-Garcia 31, and Reynaldo Aviles- Hernandez 44, all Mexican Nationals, have each pled guilty to several federal crimes, including illegal re-entry to the United States after a previous deportation.

In the course of Diaz Tinoco’s his guilty plea, he admitted that he had previously been deported from the United States after being convicted of a felony drug trafficking offense in California.  Tinoco admitted he unlawfully re-entered the United States prior to being arrested by the Kentucky State Police, on April 4, 2018, when he was in possession of $13,360 in cash.  Immigration records show that Diaz-Tinoco has been deported from the United States on at least two prior occasions.

In the course of Luis Eduardo Salto-Garcia’s guilty plea, he admitted that he had previously been deported from the United States, and that he had unlawfully re-entered the United States prior to being arrested on March 1, 2018, by the Lexington Police, for unlawfully possessing a stolen firearm and a domestic violence offense.   Immigration records show that Salto-Garcia has been deported from the United States on at least one prior occasion.   

In the course of Reynaldo Aviles-Hernandez’s guilty plea, he admitted that he had previously been deported from the United States and had unlawfully re-entered the United States.  He further admitted to using a fake United States social security card and other documents to obtain employment in Fayette County.  Immigration records show that Aviles-Hernandez has been deported from the United States on at least three prior occasions.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Kristoffer Cortex, Acting Assistant Field Office Director, ICE; Chief Lawrence Weathers, Lexington Police Department; and Richard Sanders, Commissioner of the Kentucky State Police, jointly made the announced the guilty pleas.

The investigations were conducted by ICE, KSP, and the Lexington Police.  The United States was represented in the cases by Assistant United States Attorney Roger W. West.

Diaz-Tinoco, Salto-Garcia, Aviles-Hernandez are currently scheduled to appear for sentencing, before Chief United States District Judge Karen K. Caldwell, on DATE.  Their sentences will be imposed by the Court, after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.

LEXINGTON, Ky. – Preferred Care Inc. (Preferred Care); its Stanton, Kentucky skilled nursing facility, Stanton Nursing and Rehabilitation Center (Stanton Nursing); owner, Thomas D. Scott; Preferred Care Partners Management Group (PCPMG); and certain other affiliated entities have agreed to pay $540,000 to the United States and the Commonwealth of Kentucky, to resolve allegations that Stanton Nursing billed Medicare and the Kentucky Medicaid program for fraudulently inflated skilled nursing services and providing materially substandard care, in violation of the False Claims Act. 

Preferred Care and its related entities own or operate approximately one-hundred skilled nursing facilities throughout the United States, including Stanton Nursing and twenty other facilities in Kentucky.  Preferred Care’s facilities, including Stanton Nursing, are managed by PCPMG and related entities.  Preferred Care, Stanton Nursing, and PCPMG, along with related entities in Kentucky and New Mexico, declared Chapter 11 bankruptcy, in November 2017, in the Bankruptcy Court for the Northern District of Texas.  The respective bankruptcy courts approved the settlement on June 26, 2018. 

The United States alleged that Preferred Care, PCPMG, Stanton Nursing, and certain related entities violated the False Claims Act by submitting, or causing the submission of, false claims to Medicare and Medicaid.  Medicare reimburses skilled nursing facilities based on a patient’s resource utilization group, or RUG level, which is determined based on the anticipated amount of skilled therapy and skilled nursing services required by the patient.  The United States alleged that, from July 1, 2012 through October 31, 2017, Preferred Care, PCPMG, and Stanton Nursing improperly coded patients for higher amounts of skilled nursing services than they needed or received, resulting in higher payments from Medicare.

The Settlement also resolves the government’s allegations that, from July 1, 2012 through April 30, 2015, certain patients at Stanton Nursing received materially substandard or worthless services. 

“The United States is committed to protecting our senior community by ensuring that taxpayer dollars are not misspent and nursing facility residents are receiving appropriate, high quality care,” said Robert M. Duncan, Jr., U.S. Attorney for the Eastern District of Kentucky.  “This settlement, reached in cooperation with our partners at the Kentucky Attorney General’s Office of Medicaid Fraud and Abuse, highlights our efforts to combat healthcare fraud, waste, and abuse, and hold accountable those who fraudulently deprive government health care programs of vital resources.” 

“Protecting the health and safety of Medicare and Medicaid patients is our top priority,” said Derrick L. Jackson, the Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Settlements like this one hold skilled nursing facilities responsible for providing the best possible care to our beneficiaries.”

“My office works every day to protect Kentucky’s most vulnerable citizens and to seek justice for our seniors who have been physically abused,” Kentucky Attorney General Andy Beshear said.  “Our work on this case is an example of our ongoing commitment and the commitment of our federal partners to stop those who harm our seniors by not giving them the very best care and service.”

The allegations were originally brought in lawsuits filed by defendants’ former employees Susan Helton and Joseph Donchatz, under the qui tam provisions of the False Claims Act.  Under the Act, private parties may bring suit on behalf of the government and may receive a portion of any federal recovery. 

The claims resolved by the settlement are allegations only and there has been no determination of liability.

This matter was handled as part of the Elder Justice Initiative of the Department of Justice (https://www.justice.gov/elderjustice/).  In June 2016, the United States Attorney’s Offices for the Eastern District and Western District of Kentucky formed an Elder Justice Task Force (https://www.justice.gov/usao-edky/elder-justice-task-force).  The Task Force was assembled to foster a collaborative working relationship among federal, state, and local agencies charged with protecting the elderly.  The goals include ensuring the integrity of all government expenditures by eliminating fraud, waste, and abuse in health programs, and protecting some of the state’s most vulnerable citizens from harm, whether it occurs in nursing homes or other institutions, or involves financial fraud schemes.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 900-HHS-TIPS (800-447-8477).

This settlement is the result of an investigation by the U.S. Attorney’s Office for the Eastern District of Kentucky, U.S. Department of Justice Civil Division’s Commercial Litigation Branch, Office of Inspector General of the U.S. Department of Health and Human Services, and Kentucky Attorney General’s Office of Medicaid Fraud and Abuse.  The cases are captioned U.S. ex rel. Doe v. Preferred Care Inc., et al. (E.D. Ky.) and U.S. ex rel. Donchatz v. Stanton Health Facilities, L.P., et al. (E.D. Ky.). 

Largest Health Care Fraud Enforcement Action in Department of Justice History Resulted in 76 Doctors Charged and 84 Opioid Cases Involving More Than 13 Million Illegal Dosages of Opioids

WASHINGTON - Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced yesterday the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings.  Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.  Thirty state Medicaid Fraud Control Units also participated in today’s arrests.  In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse. 

Attorney General Sessions and Secretary Azar were joined in the announcement by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Deputy Director David L. Bowdich of the FBI, Assistant Administrator John Martin of the Drug Enforcement Administration (DEA), Inspector General Daniel R. Levinson of the HHS Office of Inspector General (OIG), Deputy Chief Eric Hylton of IRS Criminal Investigation (CI), Director Alec Alexander of the Centers for Medicare and Medicaid Services (CMS) Center for Program Integrity and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS).

Yesterday’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG.  In addition, the operation includes the participation of the DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and State Medicaid Fraud Control Units. 

The charges announced yesterday aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.   

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

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

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of over $2 billion in fraudulent billings.  The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims.  Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.

Cases that have been indicted in the Eastern District of Kentucky are:

• United States v. Kimberly Jones (6:18-cr-00030 E.D. Ky.):  Kimberly Jones, a licensed pharmacist in Williamsburg, Kentucky, is charged with 26 counts of distributing oxycodone or oxymorphone, one count of maintaining a drug involved premises, and one count of health care fraud.  The Indictment alleges that Jones, the owner of Kim’s Hometown Pharmacy in Williamsburg, repeatedly filled prescriptions for oxycodone and oxymorphone outside the scope of professional practice, while also billing insurers for prescription drugs that were never dispensed to patients.  The Indictment was unsealed following Jones’s arrest on June 26, 2018.  The case is assigned to United States District Judge Gregory F. Van Tatenhove and is set for trial on August 21, 2018.  Jones faces a maximum sentence of 20 years imprisonment if convicted on the controlled substance offenses and 10 years if convicted of health care fraud.    
   
• United States v. Gary McPherson (6:18-cr-00031 E.D. Ky.):  Gary McPherson, a licensed pharmacist, is charged with theft of pre-retail medical products in violation of 18 U.S.C. § 670.  The charge stems from McPherson’s theft of pharmaceutical drugs from Kim’s Hometown Pharmacy in Williamsburg, Kentucky, in May 2018.   The Indictment was unsealed on June 26, 2018, and McPherson will appear in court on July 11, 2018, for arraignment.  The case is assigned to United States District Judge Gregory F. Van Tatenhove.  McPherson faces a maximum sentence of five years imprisonment if convicted.   
   
  The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who collectively have falsely billed the Medicare program for over $14 billion.
   
  A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
   

LEXINGTON, Ky. – Fernando Rafael Lara Salas, age 40, who had previously used the aliases of Jesus Ruiz Vega, Francisco Garcia and Cristobal Palacios Garcia, was sentenced today, to 353 months in prison, by U.S. District Judge Danny C. Reeves.  In January, Lara Salas was tried and convicted of multiple offenses, including drug trafficking, firearms and immigration offenses.  His drug trafficking convictions included conspiracy to distribute more than five kilograms of cocaine, possession with intent to distribute more than five kilograms of cocaine, and possession with intent to distribute fentanyl, methamphetamine, and tramadol.  Lara Salas’ firearms convictions included possession of a firearm in furtherance of a drug-trafficking crime, possession of a firearm as a convicted felon, and possession of a firearm by an alien.  Lara Salas was also convicted of unlawfully re-entering the United States after previously being deported for a felony drug offense.

Two co-defendants in the case, Jorge De Jesus Macias Pedroza and Nestor Barron, were also convicted and previously sentenced by Judge Reeves, to terms respective terms of imprisonment of 188 and 120 months.  All three men will be required to serve 85% of their sentences.

The joint investigation by federal and state law enforcement into the drug trafficking activities of Lara Salas began in August 2016 and culminated with the execution of search warrants at Lara Salas’ residence in Lexington and a cargo trailer located in a remote location in Franklin County.  The search of Lara Salas’ home resulted in the seizure of 6 kilograms of cocaine, more than 50 grams of methamphetamine, a 9 mm firearm and $110,000 in U.S. currency.  Evidence found in the cargo trailer revealed that Lara Salas and others utilized the trailer for the preparation of fentanyl for distribution.  Agents located packaging material consistent with a kilogram quantity of a controlled substance.  The packaging contained a residual amount of fentanyl, an extremely potent opioid.  Also located in the trailer were five kilograms of tramadol, a Schedule IV controlled substance that is commonly used by drug traffickers as a cutting agent for fentanyl and heroin, and boxes of latex gloves.  The investigation was a cooperative effort led by investigators with the Drug Enforcement Administration (DEA); the Department of Homeland Security, Immigration and Customs Enforcement (ICE); and the Lexington Police Department.

“Without the outstanding work of our law enforcements partners, this prosecution would not have been possible.  Their efforts removed dangerous drugs from our streets, made our community safer, and saved lives.  Prosecuting those who sell drugs in our community will continue to be a core priority of our Office,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.   

United States Attorney Duncan; Darrell Christopher Evans, Special Agent in Charge, DEA Louisville; Kristoffer Cortex, Acting Assistant Field Office Director, ICE; and Lawrence Weathers, Chief of Police, Lexington-Fayette County Division of Police, jointly announced the sentence.

LEXINGTON, Ky.— Melvin Tremayne Mahone,  31, of Lexington, was sentenced to 15 years in federal prison by Chief United States District Judge  Karen Caldwell for Trafficking in more than 40 grams of Fentanyl and Possession of Firearms in Furtherance of Drug Trafficking.

On October 20, 2016, a search warrant was executed at Mahone’s residence, on American Avenue in Lexington.  During the arrest and search of Mahone, officers located approximately 60 grams of fentanyl concealed in his underwear.  Fentanyl can be lethal in the 2 milligram range.  In close proximity to Mahone were two loaded firearms.  Mahone has a prior federal felony conviction for drug trafficking.  Mahone pleaded guilty to the charges in March.

Under federal law, Mahone 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.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowery, Special Agent in Charge, ATF; and Lawrence Weathers, Chief of the Lexington Police Department, jointly announced the sentence.

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

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.  Attorney General Sessions reinvigorated PSN in 2017, 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, local strategies to reduce violent crime.

LONDON, Ky. – A Middlesboro, Ky. resident was indicted yesterday on federal charges of attempted production of child pornography and receiving, distributing, and possessing child pornography.

A federal grand jury in London returned the four-count indictment against 30-year-old Jordan Ryan Turner, a teacher and assistant basketball coach at Bell County High School.  Turner was originally arrested on a state charge of using electronic means to induce a minor to engage in sexual activities.  A federal criminal complaint was filed against Turner and those charges were presented to the grand jury, which returned the indictment. 

Robert M. Duncan, Jr., U.S. Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; and Richard Sanders, Commissioner of Kentucky State Police, jointly announced the charges.

The KSP and FBI have jointly conducted the investigation. Assistant U.S. Attorney Greg Rosenberg represents the United States in the case.

Trial is currently scheduled for September 4, 2018.  If convicted on all counts, Turner faces a mandatory minimum of 15 years and maximum of 90 years in prison.  However, any sentence following a conviction would come after the Court considers the U.S. Sentencing Guidelines and relevant 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.

ASHLAND, Ky. – The U.S. Attorney’s Office has filed a civil lawsuit against an Ashland addiction treatment specialist, Dr. Rose O. Uradu, and her substance abuse treatment center, Ultimate Care Medical Services, LLC d/b/a Ultimate Treatment Center, alleging that they defrauded the both Medicare and Medicaid programs, and that they violated the Controlled Substances Act.

The lawsuit alleges that the defendants sought and received payments from Medicare and Medicaid for services that were not actually provided to patients.  According to the complaint, between January 2013 and September 2014, defendants billed these government programs for “evaluation and management” services purportedly provided to patients who visited the clinic to receive daily methadone doses for their substance abuse treatment.  Evaluation and management services typically include performance of an examination of the patient, a patient history, and medical decision-making.  The complaint alleges that Ultimate Treatment Center did not perform these services when patients received their methadone doses, but billed Medicare and Medicaid for the services anyway.  According to the complaint, defendants falsely documented the performance of evaluation and management services in the patients’ medical records, including by electronically copying notes from one visit to the next – for days, weeks, and even months.

The complaint further alleges that during the period July 2013 to December 2014, defendants billed Medicare and Medicaid for complex urine drug testing that was not actually performed.

The lawsuit contends that billing for services not provided violates the False Claims Act.  If found liable, the defendants will have to repay Medicare and Medicaid three times the amount of the Government’s loss for the fraud, in addition to financial penalties of $5,500 to $11,000 per false claim.  According to the complaint, the Government’s loss exceeds $1 million. 

The lawsuit also alleges that, for a three-month period in 2014, Dr. Uradu issued buprenorphine prescriptions to twice as many patients as is permitted by law.  Buprenorphine is marketed under the brand names Suboxone and Subutex, and is used medically in the treatment of opioid addiction.  Because buprenorphine has the potential for diversion and abuse by recreational users, it is a controlled substance regulated by law.  According to the complaint, Dr. Uradu was only permitted to treat 100 patients with buprenorphine drug products, but repeatedly exceeded her patient limit.   Specifically, the complaint alleges that three months in a row, she wrote prescriptions for buprenorphine for more than 200 unique patients – twice her limit.  The complaint contends that Dr. Uradu violated the Controlled Substances Act each time she wrote a prescription over her limit.  Under that law, if found liable, Dr. Uradu is subject to a financial penalty of up to $25,000 for each violation. 

Finally, the complaint further alleges that during the period January 1, 2017 to April 28, 2017, Ultimate Treatment Center failed to maintain complete and accurate records of the clinic’s methadone and buprenorphine inventories, as is required by law.  According to the complaint, Ultimate Treatment Center’s records did not account for the equivalent of 45 bottles of methadone oral solution, and 22 bottles of buprenorphine tablets.  The complaint contends that Ultimate Treatment Center’s failure to keep accurate records violates the Controlled Substances Act.  Under that law, Ultimate Treatment Center is subject to a financial penalty of up to $10,000 for each recordkeeping violation.

The lawsuit is captioned United States v. Rose O. Uradu, M.D., et al., Civ. No. 18-66.  The investigation preceding the complaint was conducted by agents with the U.S. Drug Enforcement Administration, Federal Bureau of Investigation, and the Kentucky Attorney General’s Medicaid Fraud and Abuse Control Unit.  Assistant U.S. Attorney Christine Corndorf will represent the United States in this case.  

COVINGTON, Ky. – Joshua D. Jett, 34, formerly of Maysville, Kentucky, was sentenced today to 360 months in federal prison, by United States District Judge David L. Bunning, for conspiracy to distribute heroin and fentanyl causing death.

Jett pled guilty, in June 2017, and admitted that he conspired with Kristian Bellamy and others to distribute heroin and fentanyl during the summer of 2016, and that drugs they distributed through that conspiracy caused a death on August 1, 2016.  Jett and Bellamy regularly purchased what they believed to be heroin from Cincinnati and transported it back to Maysville, for use and distribution.  They sold the drugs to several users on August 1, 2016; one of them, Amanda Hill-Borgmann, overdosed – on what was determined to be heroin and fentanyl – and died.

Under federal law, Jett 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.

Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), jointly announced the sentence.  The investigation was conducted by the DEA.  The United States was represented by Assistant United States Attorney Tony Bracke.

LONDON, Ky. – A federal grand jury in London, Kentucky, today returned a two-count indictment charging Brandon McIntosh, a former deputy of the Rockcastle County Sheriff’s Office, with violating the civil rights of an arrestee by using excessive force against him and then filing a false report to obstruct the investigation of that assault.

The indictment alleges that on Nov. 6, 2016, McIntosh assaulted P.D., an arrestee, using a dangerous weapon and resulting in bodily injury to P.D.  The indictment further alleges that McIntosh filed a report falsely stating that, as McIntosh approached P.D., P.D. became very combative and that McIntosh used the least amount of force to get P.D. under control. 

If convicted, McIntosh faces a maximum term of imprisonment of 10 years on the civil rights charge and twenty years on the obstruction charge.

An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.

The Federal Bureau of Investigation conducted the investigation. Assistant United States Attorney Hydee Hawkins of the Eastern District of Kentucky and Trial Attorney Mary J. Hahn of the Civil Rights Division are prosecuting the case.

LEXINGTON, Ky. – A Lexington man, who previously admitted to being a felon in possession of a firearm, was sentenced today to 120 months in prison.  This term has also been ordered to run consecutively to pending state court sentences.           

Chief U.S. District Judge Karen K. Caldwell sentenced Antoine Lamar Burns, 36 years old, for unlawful possession of a firearm by a person convicted of a felony.           

Burns previously admitted that, beginning in June 2015 and continuing through October 2015, he possessed a Bersa .380 semiautomatic pistol, after having been convicted of a felony offense.  According to the plea agreement, Burns fired several shots at someone he suspected was cooperating with law enforcement, threatened and pointed the firearm at a former girlfriend, attempted to have his girlfriend make a false statement about ownership of the firearm, and attempted to hide the firearm in his girlfriend’s vehicle.  Burns pleaded guilty in February.           

Under federal law, Burns must serve 85 percent of his prison sentence; and upon his release, he 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; Stuart Lowrey, Special Agent in Charge, ATF; and Lawrence Weathers, Chief of the Lexington Division of Police, jointly announced the sentence.

The investigation was conducted by ATF and Lexington Police. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Ron L. Walker, Jr.

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. Attorney General Jeff Sessions reinvigorated PSN in 2017 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. – A Cincinnati man was convicted today by a federal jury in Covington for conspiring to distribute carfentanil in the Boone County Jail Work Camp resulting in death.

After slightly under three hours of deliberations following a five day trial, the jury convicted 41 year old Johnny L. Shelton of conspiracy to distribute carfentanil resulting in death.           

According to testimony at trial, Shelton led a conspiracy to smuggle carfentanil, an extremely powerful opioid, into the Boone County Jail Work Camp on or about October 15, 2016.  Evidence revealed that Timothy Marcum, a fellow inmate, consumed some of the carfentanil and died.  Jailers found Marcum’s deceased body in the work camp during the early morning hours of October 16, 2016.             

Shelton and others were indicted in March of 2017.  Two other members of the conspiracy, Chad Prodoehl and Gordon Wanser have been convicted in connection with this conspiracy.  Prodoehl was sentenced to 25 years in prison on May 29, 2018.  Wanser is still awaiting sentencing. 

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

The investigation was conducted by the DEA and the Boone County Sheriff’s Department.  The United States was represented by Assistant United States Attorneys Anthony Bracke and Wade Napier.

Shelton will appear for sentencing on October 18, 2018.  He faces a term of life imprisonment due to prior felony drug trafficking convictions.  However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal statutes before imposing a sentence.