Eastern District of Kentucky

COVINGTON, KY - A federal grand jury returned an indictment Thursday charging 34-year-old Rebecca Hatfield with bank embezzlement, 46 counts of false entries in bank records, and making a false statement.

According to the indictment, from December 2007 through August 2011, Hatfield embezzled approximately $135,700 from the Bank of Kentucky in Florence, KY.

The indictment further alleges that Hatfield intentionally made false entries into the accounting records and falsely told an FBI agent that she had not embezzled the money and suspected that another bank employee may have done so.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation (FBI), jointly made the announcement today.

The investigation preceding the indictment was conducted by the FBI. The indictment was presented to the grand jury by Assistant United States Attorney Christopher L. Nasson.

Hatfield’s appearance before the United States District Court has not yet been set. If convicted, Hatfield faces a minimum of probation and a maximum prison sentence of thirty years. However, any sentence following conviction would be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.

The indictment of a person by a grand jury is an accusation only, and that person is presumed innocent unless proven guilty.

LEXINGTON, KY - The U.S. Attorney for the Eastern District of Kentucky, Kerry B. Harvey, announced a number of leadership changes today including a new top assistant.

Harvey announced that Carlton Shier IV will serve as the First Assistant U.S. Attorney, Robin Gwinn will lead the office’s civil division and Bob McBride will manage the Fort Mitchell, KY., branch office.

As First Assistant, Shier will serve as Harvey’s top advisor and support him in managing the operations of the Lexington headquarters and branch offices located in Fort Mitchell and London, KY., which, altogether, includes a staff of nearly 100 employees and contractors. He will work closely with leaders of the office’s administration, appellate, asset forfeiture, criminal and civil divisions, and will participate in all aspects of managing the operation.

Shier, a Lexington native, had served as chief of the office’s civil division since September of 2010. During his tenure, the division marked several accomplishments, including negotiating a settlement with an Erlanger nursing home in a landmark case. It marked the first time in Kentucky that the False Claims statute was used in a case in which a nursing facility was sued alleging a systemic failure of care for its residents.

Prior to joining the U.S. Attorney’s Office, Shier worked as the Deputy General Counsel for the Kentucky Cabinet of Health and Family Services. He also has worked at the Kentucky Attorney General’s Office and with the Fayette County Attorney’s Office. Shier graduated from Henry Clay High School and Centre College. He received his Master’s Degree in Justice Administration in 1994 and his law degree from the University of Louisville in 1997.

Gwinn, of Lexington, will lead a civil division consisting of approximately 20 attorneys and legal assistants. The civil division represents the United States in a wide array of litigation filed in the Eastern District of Kentucky, including affirmative efforts to recover taxpayer dollars lost to fraud and the defense of suits seeking damages against federal agencies and officers.

In 2010, U.S. Attorney General Eric Holder presented Gwinn with the “Exceptional Service Award” for her efforts in a case that resulted in the largest pharmaceutical settlement in the Department of Justice’s history at the time. The case involved pharmaceutical giant Pfizer, which agreed in September of 2009 to pay the Government $2.3 billion for illegally marketing drugs to doctors in Kentucky’s Eastern District and several other states.

Gwinn has been with the U.S. Attorney’s Office since 2002, primarily working civil cases. She has prior experience in state and county government. Gwinn received her law degree from the University of Kentucky in 1985.

McBride will oversee the operations of the Fort Mitchell branch office, which has a total of 14 attorneys and legal assistants. McBride has been with the U.S. Attorney’s Office since 2002 and was the office’s criminal division chief from the fall of 2007 through 2009. Prior to coming to the U.S. Attorney’s Office, he served in the Navy as a Lieutenant Commander. McBride received his law degree from the University of Dayton in 1992.

The U.S. Attorney’s Office in the Eastern District of Kentucky prosecutes criminal cases and represents the United States in civil litigation filed in the federal courts of the Eastern District of Kentucky which encompasses 67 counties stretching from southeastern Kentucky to the Ohio border.

LEXINGTON, KY - A Lexington man, who used proceeds from trafficking cocaine to purchase houses and vehicles, was sentenced to 30 years in prison for multiple federal offenses.

Chief U.S. District Judge Karen C. Caldwell sentenced 35-year-old Marquis Deron Heard on Thursday for distribution of cocaine, possession of a weapon by a convicted felon, and 29 counts of money laundering.

Heard was found guilty by a jury of the charges earlier this year. The evidence at trial established that, between 2008 and 2011, Heard was involved in trafficking large quantities of cocaine, from a Mexican source, into Lexington for distribution. The testimony at trial revealed that Heard had distributed at least 45 kilograms of cocaine.

Evidence at trial showed that Heard reinvested the proceeds of the drug transactions into the purchase of multiple vehicles and residences in both Lexington and Louisville. Heard was also found in possession of firearms at the time of his arrest. The jury convicted Heard in January of 2013 after four days of trial.

Under federal law, Heard must serve at least 85 percent of his prison sentence, and, upon release, will be under the supervision of the U.S. Probation Office for 10 years.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, jointly made the announcement today.

The investigation was conducted by the Lexington Police Department, the DEA, and the IRS. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney J. Hamilton Thompson.

COVINGTON, KY - A Brooksville, KY., woman admitted in federal court she concealed information from federal authorities, for several years, in order to fraudulently obtain state and federal benefits.

Patty Jo Ruf, 42, pleaded guilty Thursday to one count of Supplemental Security Income (SSI) fraud.

Ruf admitted she intentionally concealed her true living arrangement from agents with the Social Security Administration (SSA) in order to collect SSI and Medicaid benefits, on behalf of her children, in amounts greater than she was entitled to receive.

According to the plea agreement, Ruf repeatedly told agents she had separated from her husband and was not sharing living expenses. In reality, Ruf lived with her husband and received financial support from him. Had SSA agents been aware of the true living arrangement, the eligibility of Ruf’s children would have been greatly reduced. The fraud spanned from November 1999 until December 2010.

SSI is an income assistance program designed to provide financial assistance to elderly and disabled individuals who meet the program’s eligibility requirements. Kentuckians who are eligible for SSI also qualify for benefits under the Medicaid Program.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Guy P. Fallen, Special Agent in Charge, Social Security Administration, Office of Inspector General, jointly announced the guilty plea.

The investigation was conducted by the SSA, Office of Inspector General. Assistant U.S. Attorney Chris Nasson represents the U.S. Attorney’s Office in this case.

Sentencing for the defendant is scheduled for September 19, 2013. Supplemental Security Income fraud carries a maximum of five years in prison. However, the court must consider the U.S. Sentencing Guidelines and the federal statutes before imposing a sentence.

COVINGTON, KY - A Kenton County man convicted last December of kidnapping, armed bank robbery and firearm offenses was sentenced to 711 months in federal prison.

U.S. District Judge Danny C. Reeves sentenced 40-year-old Joseph Weir on Monday for kidnapping, brandishing a firearm in furtherance of kidnapping, armed bank robbery, and possessing a firearm in furtherance of bank robbery. Judge Reeves also ordered Weir to pay $1,492.75 in restitution. Under federal law, Weir must serve 85 percent of his prison sentence.

Weir was indicted in March of 2012 and convicted in two separate trials in December of 2012.

Evidence at the first trial showed that on May 31, 2011, Weir kidnapped a 75 year- old patron of the Crestview Town Center by threatening her with a knife and a .357 caliber handgun. After forcing his way into the victim’s car, he took her purse and attempted to access her bank accounts.

Weir eventually transported the victim to a remote area near Cleves, Ohio. He then used his knife to cut the victim’s sweater into pieces and used them to gag and tie her to a tree near the bank of the East Miami River. Weir abandoned the victim there and took her car back to Kentucky, leaving it near his Covington residence. The victim freed herself from the tree and eventually found assistance at a nearby road. She suffered minor injuries.

In the other trial, evidence revealed that Weir robbed the Huntington Bank at Sixth and Madison in Covington of $900.00 on December 5, 2011. He entered the bank, concealing a .380 caliber handgun in his coat and passed a note to the teller threatening to shoot. After fleeing the bank with the money, Weir hid the jacket, shoes, and eyeglasses he wore during the robbery. Officers recovered the items near the bank and linked them to Weir using surveillance video and witness statements.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, jointly announced the sentence.

The investigation was conducted by the FBI, the Covington Police Department, the Hamilton County Sheriff’s Office, the Boone County Sheriff’s Office, and the Lakeside Park / Crestview Hills Police Department. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorneys Tony Bracke and Elaine Leonhard.

PIKEVILLE, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Robert L. Corso, Special Agent in Charge, DEA and Jack Conway, Kentucky Attorney General jointly announced today that two eastern Kentucky pain clinic owners will be sentenced in September after admitting in federal court they conspired with doctors to illegally dispense more than 50,000 prescription pills.

Tammy Cantrell, 40, of Oil Springs, KY., and Shelby Lackey, 50, of Williamsport, KY., pleaded guilty Wednesday before U.S. Magistrate Judge Edward B. Atkins to conspiracy to distribute and unlawfully dispense Oxycodone and maintaining a drug involved premise. Both defendants agreed to forfeit a total of approximately $500,000 which represents proceeds from the conspiracy. Judge Atkins remanded Cantrell into custody while Lackey was released on her own recognizance.

The defendants are the first pain clinic owners in the Eastern District of Kentucky (district includes 67 counties) to have federal convictions for operating a pill mill and conspiring to illegally distribute Oxycodone.

According to the plea agreement, the defendants owned and operated Care More Pain Management, LLC located in Paintsville, KY. From 2008 until approximately February 2012, the defendants conspired with two doctors to dispense Oxycodone to eastern Kentuckians without a legitimate medical purpose.

Court records state that the doctors performed little or no physical examination before writing prescriptions that were usually for 90 Percocet 10 mg pills. Patients paid $200 for the initial visit and $185 for subsequent visits; all fees were paid in cash. One of the doctors previously admitted he saw between 40 and 50 patients in one day. In many instances, the doctors wrote prescriptions without seeing patients or signed blank prescriptions for office assistants to complete, according to the plea agreement.

Cantrell and Lackey paid the doctors as much as $8,500 a week. The clinic didn’t accept insurance and doctors made no referrals for physical rehabilitation. Neither Cantrell nor Lackey are medically certified and have no nursing experience.

The investigation started when detectives with the Kentucky Attorney General’s Office received complaints from local law enforcement that Care More was seeing a high volume of patients. Court records state that patient lines at Care More stretched into the parking lot.

One of the doctors, Richard Albert, pleaded guilty in July 2012 to conspiring to distribute and dispense controlled substances without a legitimate medical purpose. He also agreed to forfeit $500,000 which represented his proceeds from the crime. Albert will be sentenced in June. The other doctor, Rano Bofill, was indicted in August of last year for conspiracy to distribute controlled substances and operating a drug involved premise. He previously pleaded not guilty and his trial is in May.

The investigation was conducted by the Kentucky Attorney General’s Office, the DEA and the Paintsville Police Department. Assistant U.S. Attorney Roger West represents the U.S. Attorney’s Office in this case.

PIKEVILLE, KY - A resident of London, England traveled to Kentucky intending to engage in sex acts with a minor who lived in eastern Kentucky according to a plea agreement filed in federal court.

Solomon Blue Waters, 42, of London, England pleaded guilty Wednesday before U.S. Magistrate Judge Edward B. Atkins to using the internet to engage in sexual activity with a minor. The U.S. Attorney’s Office and the defendant agreed to a proposed sentencing range of 135 to 168 months pending the judge’s approval. Waters is scheduled to be sentenced on September 5 in Pikeville.

According to the plea agreement, Waters admitted he developed an online relationship with the minor in 2011 and persuaded her to send him sexually explicit images of herself. Waters also encouraged the victim to communicate with him in sexual conversations. Waters planned to visit the minor in eastern Kentucky and he specifically described the sexual acts he would perform on the minor when meeting her.

On August 27, 2012, Waters flew from London, England to Lexington’s Blue Grass Airport and was immediately arrested by agents with Homeland Security Investigations and the Kentucky State Police.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Gary J. Hartwig, Special Agent in Charge, Homeland Security Investigations (HSI) in Chicago, and Rodney Brewer, Kentucky State Police Commissioner, jointly announced the plea.

The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and KSP. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney David Marye.

LEXINGTON, KY - A federal indictment was unsealed today charging former Kentucky Agriculture Commissioner Richard Dwight Farmer Jr., with misusing and misappropriating money and property belonging to the Kentucky Department of Agriculture (KDA) during his tenure.

The indictment, filed Friday, April 19, charges Farmer, 43, with four counts of misappropriating property and funds of the KDA, a state agency that receives more than $10,000 annually in federal funds. Each of the four counts covers alleged misconduct occurring in separate calendar years beginning with 2008 and ending with 2011.

Farmer is also charged with one count of soliciting property of value in exchange for intending to be influenced in KDA matters.

According to the indictment, Farmer abused his authority throughout his tenure, using KDA funds to obtain rifles, clothes, hotel rooms, computer equipment and home appliances, all for himself, friends and family.

One example of Farmer’s alleged misuse of funds occurred in 2008, at the Southern Association of State Departments of Agricultural Conference held in Kentucky. The indictment alleges Farmer bought a surplus of gifts for participants and conference workers, such as rifles, watches, case knives, and personalized cigar boxes, and then kept the excess gifts for his personal use.

The indictment also alleges that Farmer misused his position to secure jobs for his friends. According to the indictment, Farmer directed the KDA to create several paid “Special Assistant” positions. He hired friends for these positions, and he ensured that they operated with little oversight and performed minimal official work. Some of these “Special Assistants” received state government salaries in exchange for performing home improvement projects and other personal services for Farmer.

Additionally, on multiple occasions, Farmer allegedly bought hotel rooms at the Kentucky State Fair for extended family using KDA’s money.

Another count in the indictment alleges that Farmer solicited and accepted property from an eastern Kentucky motor vehicle dealership, intending to be influenced in the decision in which he attempted to award KDA grant money to the dealership.

The U.S. Government is seeking the forfeiture of $450,000, which represents the approximate total amount of KDA money that Farmer allegedly misused.

The KDA is a state government agency that is funded, in part, with money provided by the federal government. The indictment alleges that the KDA receives millions of dollars annually in federal money.

Farmer was elected to two terms as Commissioner of Agriculture and was responsible for the supervision and administration of the KDA from January 2004 until January 2012.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, and Jack Conway, Kentucky Attorney General jointly announced the indictment today.

The investigation preceding the indictment was conducted by the Kentucky Attorney General’s Office and the FBI. The indictment was presented to the grand jury by Assistant U.S. Attorneys Kenneth R. Taylor and Andrew T. Boone, and trial attorney Sean Mulryne with the Public Integrity Section of the United States Department of Justice.

A date for Farmer to appear in court has not yet been scheduled. Each count carries a maximum penalty of 10 years in prison and up to a $250,000 fine. However, any sentence following a conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.

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

LEXINGTON, KY - Dena Lynn Brooks, 40, Marcus Jessie Adkins, 39, and Courtney Junior Noble, 60, each of Campton, KY., were recently sentenced, by United States Senior District Judge Joseph M. Hood, for conspiring to distribute 50 grams or more of a mixture or substance containing methamphetamine. Noble was also sentenced for possessing a firearm in connection with a drug trafficking offense. Brooks and Noble were each sentenced to 10 years imprisonment. Adkins, because of prior felony drug convictions, was sentenced to almost 22 years imprisonment.

In May 2013, Brooks, Adkins, and Noble each pleaded guilty to the offense. The facts established that, on January 28, 2013, Brooks obtained approximately three ounces of methamphetamine for Adkins and Noble. The methamphetamine was intended for distribution in Wolfe County. After obtaining the methamphetamine, Brooks provided it to Adkins and Noble at a motel room in Lexington. A short while later, a vehicle driven by Adkins, in which Noble was a passenger, was stopped by law enforcement. Noble had the methamphetamine in his pocket and a loaded semiautomatic pistol in his waistband.

Under federal law, Brooks, Adkins, and Noble must each serve 85 percent of their prison sentence, and, upon release, will be under the supervision of the United States Probation Office, for at least 3 years for Noble and at least 8 years for Brooks and Adkins.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration, and Rodney Brewer, Commissioner, Kentucky State Police, jointly made the announcement.

The investigation was conducted by the DEA and KSP. The United States was represented in the case by Assistant United States Attorney Robert M. Duncan, Jr.

CITY, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration (DEA) jointly announced today that a physician from Prestonsburg, Ky., paid the U.S. Government $50,000 to settle civil claims that she failed to account for nearly 5,000 prescription pills at her office.

According to the settlement agreement, the U.S. Government contends that, from June 2009 until May 2012, Dr. Laura Hazeltine failed to maintain accurate inventory records of controlled substances. More specifically, the Government contends that an audit conducted by the DEA revealed Hazeltine, who practices family medicine, couldn’t account for 4,967 pills and at least 10 purchasing records for controlled substances.

In addition to the monetary settlement amount, Dr. Hazeltine surrendered her DEA registration.

Doctors are only allowed to write prescriptions for controlled substances if they are registered with the DEA. DEA registrants are required by federal law to maintain complete and accurate inventory and dispensing records of all controlled substances.

The investigation was conducted by the DEA. Assistant U.S. Attorney Valorie D. Smith represented the U.S. Attorney’s Office in this case.

LEXINGTON, KY - A Lexington business man who admitted he used hundreds of thousands of dollars of his clients’ money to purchase sports collector cards, was sentenced today to 41 months in prison.

U.S. District Judge Karl S. Forester sentenced 46- year-old David Byron for wire fraud and attempting to evade paying income taxes. Judge Forester also ordered Byron to pay $688,530.89 in restitution to the victims of his crime.

Byron previously admitted that from 2006 through April 2010 he devised a scheme to defraud at least seven clients of his bookkeeping business. According to the plea agreement, Byron told them he would facilitate payment of their taxes owed to the Internal Revenue Service (IRS) and other state and federal government agencies. In reality, Byron wired money from their bank accounts to his bank account and then used the money to supplement his lifestyle and purchased $350,000 worth of baseball and sports collector cards.

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

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, and Paul R. Johnson, Special Agent in Charge, United States Secret Service, jointly made the announcement today after the sentencing.

The investigation was conducted by the Internal Revenue Service and the United States Secret Service. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Kevin Dicken.

LEXINGTON, KY - A Lexington man, who admitted downloading child pornography images over the internet, was sentenced to 103 months in federal prison.

U.S. District Judge Karen Caldwell sentenced 33-year-old Jason Daniel Meade Thursday for receiving child pornography. In addition to the 103-month term, Judge Caldwell also ordered Meade to be under the supervision of the U.S. Probation Office, for the rest of his life.

According to court documents, Meade downloaded hundreds of images of minors engaged in sexually explicit conduct. Meade’s sentence was enhanced because many of these images contained minors under the age of 12 and some were sadistic and violent in nature.

In September 2011, undercover law enforcement agents identified a computer in Lexington that was offering child pornography for downloading. Authorities traced the location of the computer to a locked room that Meade kept at his mother’s residence. During the execution of a search warrant at the residence, law enforcement found the images of child pornography on two computers and a CD.

Under federal law, Meade must serve at least 85 percent of his prison sentence and must register as a sex offender when he is released.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, and Jack Conway, Kentucky Attorney General, jointly announced the sentence today.

The investigation was conducted by the Kentucky Attorney General’s Office and the FBI.

COVINGTON, KY - Several eastern Kentuckians defrauded state and federal benefit programs out of hundreds of thousands of dollars, according to plea agreements filed in federal court.

Two men and four women from Carter, Boyd, Lawrence, Morgan and Morgan Counties pleaded guilty Monday, in separate cases, to charges related to Supplemental Security Income (SSI) fraud. One of the women also pleaded guilty to the additional charge of aggravated identity theft.

In their plea agreements, the defendants admitted they fraudulently obtained benefits from the Social Security Administration (SSA), and in some instances from the Medicaid Program, by concealing and intentionally failing to disclose their true living arrangements and financial resources.

Court documents indicate that, as far back as 1998 in one case, some of the defendants lied to SSA agents, telling the agents that they had divorced or separated from their spouses when in fact they were living together and sharing living expenses. In one case, a woman even forged the signature of her husband to further the scheme.

Collectively, the defendants defrauded the SSA and the Medicaid Program out of nearly $450,000.

Had the defendants’ provided the SSA with their true living arrangements and financial resources, the defendants would have either been ineligible for SSI and Medicaid benefits or their eligibility would have been greatly reduced.

SSI is an income assistance program designed to provide financial assistance to elderly and disabled individuals who meet the program’s eligibility requirements. Kentuckians who are eligible for SSI also qualify for benefits under the Medicaid Program.

The defendants in the case are Diana Lynn Rice, 66, of Webbville, KY., Ila Jean Rose, 57, of Olive Hill, KY., Granvell Windfred Ramey, 73, of Catlettsburg, KY., Junia Kay Ratliff, 66, of West Liberty, KY., Randall Dale Ratliff, 74, of West Liberty, KY., and Linda Lou Tackett, 73, of Grayson, KY.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Guy P. Fallen, Special Agent in Charge, Social Security Administration, Office of Inspector General, jointly announced the guilty pleas.

The investigation was conducted by the SSA, Office of Inspector General. Assistant U.S. Attorney Chris Nasson represents the U.S. Attorney’s Office in this case.

Sentencing dates have not been announced. Supplemental Security Income Fraud carries a maximum of five years in prison upon conviction. Aggravated identity theft carries a mandatory two years in prison upon conviction.

LONDON, KY - A London cattle company was indicted for falsifying records related to an investigation into selling animals containing medical drugs in their system.

Williams Cattle Company and its treasurer, 47-year-old Pamela Collette, were indicted Monday for falsification of records related to a federal investigation and creating false documents.

According to the indictment, the Food and Drug Administration investigated Williams Cattle for violating a court ordered injunction, which instructs the company not to purchase or sell cattle for slaughter that may contain drug medication residue.

Collette allegedly falsified weekly reports that were supposed to be sent to buyers verifying that the animals sold were drug free, in an attempt to influence the outcome of the investigation. She is also alleged to have created false documents that appeared to be prepared by a company that sold animals to Williams Cattle, when in fact the company had not generated the documents.

As part of the injunction, which was filed in 2006, if Williams Cattle Company sells animals with medical drugs in their system, it is required to notify the buyers. Additionally, the injunction obligates Williams Cattle to identify the potential cause for the medical drugs in the animals and to refrain from purchasing animals from sellers who supply cattle that contains medical drugs.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Special Agent in Charge Antoinette V. Henry, of the U.S. Food and Drug Administration, Office of Criminal Investigations jointly announced the indictment.

The investigation preceding the indictment was conducted by the Food and Drug Administration, Office of Criminal Investigations. The indictment was presented to the grand jury by Assistant U.S. Attorney William Sam Dotson.

Collette is set to appear in federal court for an arraignment on April 24. If convicted she faces a maximum of five years in prison on each charge and a $250,000 fine. The company is also subject to the $250,000 fine for each count.

The indictment of a person by a grand jury is an accusation only, and that person is presumed innocent unless proven guilty.

LEXINGTON, KY - The owner of a children’s fun and gaming center in Danville, KY., is accused of committing wire fraud and identity theft.

A federal grand jury in Lexington returned an indictment charging 49-year-old Paul Christopher Turner with seven counts of wire fraud and one count of aggravated identity theft.

According to the indictment, in July 2010, Turner, the owner and operator of Go Go Gorillas gaming center, attempted to obtain a loan to purchase equipment for his company. In seeking the loan, it is alleged that Turner falsely represented to the lending entity that one of his investors was willing to personally guarantee the loan. Turner allegedly offered the investor’s property as collateral for the loan without her knowledge.

The indictment further alleges that Turner forged the investor’s signature on loan and mortgage documents. Turner is also alleged to have forged the signature of a notary public on the documents.

The United States Attorney for the Eastern District of Kentucky, United States Postal Inspection Service, Kentucky State Police and the Commonwealth of Kentucky Department of Financial Institutions, Division of Securities, jointly made the announcement.

The investigation preceding the indictment was conducted by the United States Postal Inspection Service, the Kentucky State Police and the Department of Financial Institutions. The indictment was presented to the grand jury by Assistant U.S. Attorney Kenneth R. Taylor.

Turner is set to appear in court for arraignment on April 16 Wire fraud carries a maximum penalty of 20 years in prison and the Aggravated Identity Theft carries a mandatory sentence of two years in prison.

The indictment of a person by a grand jury is an accusation only, and that person is presumed innocent unless proven guilty.

LONDON, KY - A federal jury in London, KY., found two Ashland, Ky., men guilty for their roles in a motorcycle theft ring.

Richard Meade, 65, and Mark Justice, 53, were convicted of a conspiracy to engage in money laundering by illegally transferring the ownership of stolen motorcycles and one count each of possession of motorcycles with altered vehicle identification (VIN) numbers. Justice was also convicted of one count of illegally transferring ownership titles of stolen motorcycles while Meade was convicted on one count and acquitted on another count of the same charge. A third defendant, George Ferguson, 64, on trial for the conspiracy charge, was acquitted.

The jury reached the verdict Tuesday night after approximately 3 hours of deliberation following more than three weeks of trial.

According to trial testimony, the two defendants sold approximately 30 motorcycles out of car lots in Ashland. They sold the motorcycles for between $13,000 and $15,000 apiece.

Justice and Meade participated in a conspiracy in which co-defendant Robert Jason Chapman of Cincinnati coordinated trips with others to motorcycle rallies in South Carolina, South Dakota and Florida. At these events, Chapman and others stole motorcycles and brought them to Kentucky to sell.

Chapman previously admitted that he and a co-defendant removed parts of the stolen motorcycles and replaced them with aftermarket parts bearing different vehicle identification numbers (VIN). He registered the stolen motorcycles with the new VIN numbers in Kentucky. Meade and Justice took some of the newly registered motorcycles and sold them.

Six other defendants previously pleaded guilty to their roles in the case.

The FBI and Kentucky State Police identified nearly 200 victims in this case, which include the original motorcycle owners and insurance companies.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, and Rodney Brewer, Kentucky State Police Commissioner jointly announced the plea.

The investigation preceding the indictment was conducted by the FBI, Kentucky State Police, the Boyd County Sheriff’s Office, Ohio Bureau of Investigations, Ohio Attorney General’s Office, and Ohio State Patrol. The U.S. Attorney’s Office was represented in the case by Assistant United States Attorneys Kenneth R. Taylor and Erin J. Roth.

The defendants are scheduled for sentencing on July 24, 2013. They face up to 20 years in prison on the illegal transfer of ownership titles charge and the conspiracy charge. Possessing motorcycles with altered VIN numbers carries a maximum 10 year penalty.

LEXINGTON, KY - A former employee of an agriculture program in eastern Kentucky admitted in federal court she defrauded the program out of more than $200,000.

Debra Marshall, 49, of Clayhole, KY., pleaded guilty Monday to mail fraud.

Marshall worked as the District Administrative Secretary for the Breathitt County Conservation District (BCCD), a program that administers federal, state, and local grants and provides other assistance to county farmers. In this position she had day-to-day control over the operations and the finances of the organization.

According to her plea agreement, from 2005 until March 2010, Marshall took money from the District in a variety of ways, including issuing herself extra paychecks, embezzling grant money that was intended to go to local farmers, and using the District’s credit card for personal purchases. When the District’s operating account dwindled because of her scheme, Marshall cashed the BCCD’s certificates of deposit without authorization and placed that money into the District’s operating account.

Marshall admitted she covered up the scheme by falsifying accounting records and submitting financial reports that falsely inflated the District’s financial condition.

BCCD uses local, state, and federal funding to promote soil conservation, efficient utilization of natural resources and progressive farming practices.

Marshall was indicted in July 2012.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Perrye K. Turner, Special Agent in Charge, Federal Bureau of Investigation, and Rodney Brewer, Commissioner of the Kentucky State Police jointly made the announcement today.

The investigation was conducted by the Federal Bureau of Investigation and the Kentucky State Police. The U.S. Attorney’s Office is represented by Assistant U.S. Attorneys Kenneth R. Taylor and Andrew T. Boone.

Marshall will appear for sentencing on June 10, 2013. Mail fraud carries a maximum of 20 years in prison. However, the Court will impose sentence after consideration of the U.S. Sentencing Guidelines and the applicable federal statutes.

COVINGTON, KY - A federal judge sentenced a Lexington, KY., man to 96 months in prison for robbing a bank in Maysville, Ky., in May of last year.

U.S. District Judge Danny C. Reeves sentenced 36-year-old Patrick Andrew Donald Tuesday for bank robbery.

Donald previously admitted that he and an accomplice robbed the Security Trust Bank in Maysville, Ky., on May 16, 2012. According to testimony at Donald’s sentencing hearing, the two men entered the bank dressed in winter clothing and demanded money from three tellers. Donald’s accomplice insinuated that he had a gun and used his hand to conceal a metal object in his coat pocket. The accomplice then repeatedly pounded the counter in front of the tellers with this object as he demanded money.

Because the metal object was considered a dangerous weapon and used to commit the robbery, Donald received an enhanced sentence.

Donald pleaded guilty to the robbery in September 2012.

Under federal law, Donald must serve at least 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for three years following his release.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Perrye K. Turner, Special Agent in Charge of the FBI’s Louisville Field Office, Ronald Rice, Chief of Police, Maysville Police Department and Ronnie Bastin, Chief of Police, Lexington Fayette Urban County Government jointly, jointly announced the sentence.

The investigation was conducted by the FBI, the Maysville Police Department, and the Lexington Police Department. The U.S. Attorney’s Office was represented by Assistant U.S. Attorneys Kenneth R. Taylor and Andrew T. Boone.

COVINGTON, KY - Under a settlement agreement with the U.S. Government, Villaspring Health Care Center, Inc., and Carespring Health Care Management, LLC are further enhancing the care that they provide to residents of Villaspring’s nursing home in Erlanger, KY., announced United States Attorney Kerry Harvey.

The agreement: (1) embodies and effectuates quality of care enhancements at Villaspring, and (2) ensures that the U.S. Attorney’s Office remains apprised of those enhancements over the next three years. The settlement agreement is the first of its kind in Kentucky and resolves False Claims Act allegations brought against Villaspring and Carespring in a lawsuit filed in July 2011 for conduct alleged to have occurred between 2004 and 2008.

Under the agreement, Villaspring and Carespring will pay the U.S. Government $350,000. Villaspring and Carespring will also retain an independent compliance consultant, subject to the approval of the U.S. Attorney’s Office (USAO). The USAO will review Villaspring’s existing compliance program and its quality of care, and collaborate with Villaspring and Carespring on enhancements to the program and its patient care. Villaspring and Carespring will be responsible for the costs of these enhancements and the costs of the consultant.

Pursuant to the agreement, the consultant will provide quarterly reports to the U.S. Attorney’s Office, Villaspring, and Carespring.

“We are pleased to reach an agreement,” said United States Attorney for the Eastern District of Kentucky Kerry B. Harvey. “The focus of the agreement is ensuring that quality of care standards are met and the consultant provisions of the settlement will provide real benefits to Villaspring residents. The Judge’s ruling in this matter establishes that the failure of care theory will be an important tool available for use in appropriate cases.”

The case was handled by Assistant United States Attorneys Andrew Sparks and Paul McCaffrey, and Department of Health and Human Services Office of Inspector General attorney Jill Wright. The matter was referred to the U.S. Attorney’s Office by the Kentucky Attorney General’s Medicaid Fraud Abuse and Control Unit.

COVINGTON, KY - A Hazard, KY., woman is accused of illegally structuring deposits totaling millions of dollars to avoid federal reporting requirements.

Lois Elaine Smith, 52, was indicted Thursday by a Covington grand jury for the charge of currency structuring.

The indictment alleges that Smith structured $4,044,180 by making deposits under $10,000 into a People’s Bank and Trust Company in Hazard. Smith allegedly deposited this money from February 14, 2008 until June 5, 2010.

A Thornton, Ky., man is accused of illegally withdrawing millions in structured increments to avoid federal reporting requirements.

Randall Baker, 57, was indicted Thursday by a Covington grand jury for the charge of currency structuring.

The indictment alleges that Baker structured $4,756,456 by withdrawing the money in under $10,000 increments from Community Trust Bank in Letcher County. Baker allegedly withdrew this money from February 14, 2008 until January 26, 2012.

An Erlanger, Ky., man is accused of illegally structuring deposits totaling more than $200,000 to avoid federal reporting requirements. Richard G. Adams, 66, was indicted on Thursday for currency structuring.

The indictment alleges that Adams structured $209,000 by making numerous deposits in amounts under $10,000 into a Fifth Third Bank account in Erlanger. Adams allegedly deposited this money from April 25, 2011 to October 13, 2011.

Under federal law, financial institutions such as banks are required to report to the federal government any currency deposit, withdrawal, or exchange over $10,000. It is a violation of federal law to intentionally structure transactions in a way that avoids reporting requirements.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, jointly made the announcement today.

The investigation preceding the indictment was conducted by the Internal Revenue Service (IRS). The indictment was presented to the grand jury by Assistant United States Attorney Robert K. McBride.

Smith’s, Baker's and Adams's appearances before the United States District Court has not yet been set by the Court in Covington. If convicted, Smith, Baker and Adams face a maximum penalty of 5 years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.

COVINGTON, KY - Nine people were charged with fraudulently collecting money and benefits from federal and state assistance programs, for more than a decade in some cases.

A federal grand jury in Covington returned seven indictments Thursday evening charging a man and seven women from Carter, Boyd, Lawrence, Morgan and Bracken County with Supplemental Security Income (SSI) fraud and health care fraud. An additional man was charged only with making false statements related to alleged fraud and one of the women was also charged with aggravated identity theft.

According to the indictments, the defendants fraudulently obtained benefits from the Social Security Administration (SSA) and Medicaid by concealing and intentionally failing to disclose their true living arrangements and financial resources.

The indictments allege that over the course of years, many of the defendants told SSA agents that they had divorced or separated from their spouses, when in fact they were living together and sharing living expenses. Had SSA known the defendants’ true living arrangements and financial resources, the defendants would have been ineligible for SSI and Medicaid benefits, or their eligibility would have been reduced greatly.

SSI is a cash assistance program designed to provide financial assistance to disabled and elderly people who have little or no income or resources. Based on an agreement between Kentucky and the SSA, Kentuckians who are eligible for SSI also qualify for Medicaid coverage.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Guy P. Fallen, Special Agent in Charge, Social Security Administration jointly announced the indictments.

The investigation was conducted by the SSA. Assistant U.S. Attorney Chris Nasson represents the U.S. Attorney’s Office in this case.

A date for the defendants to appear in court has not yet been set. If convicted, the defendants face up to five years in prison for the SSI charge and 10 years on the health care fraud charge. However, any sentence following a conviction would be imposed after the Court reviews the U.S. Sentencing Guidelines and the federal statutes.

LEXINGTON, KY - A Woodford County man who posted child pornography videos on the internet for others to download was sentenced to 14 years in prison.

U.S. Senior District Judge Joseph M. Hood sentenced 31-year-old Juan Francisco Reyes-Ramos Monday for distributing child pornography. Judge Hood enhanced the defendant’s sentence because the defendant possessed images of child pornography that were sadistic and/or violent.

According to court documents, in May of 2012 a detective with the Kentucky State Police located child pornography videos available for download on the internet. . The videos contained images of prepubescent children engaged in sexually explicit conduct. The detective found that the videos were posted from an internet protocol (IP) address belonging to the defendant’s computer.

When investigators searched the defendant’s home, they found more than 3,000 child pornography images on his computer. Many of the images showed adults engaged in sexually explicit conduct with children.

Under federal law, Reyes-Ramos will have to serve at least 85 percent of his prison sentence. He pleaded guilty last November.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, special Agent in Charge, FBI; John R. Korkin, Special Agent in Charge, Department of Homeland Security Investigations-U.S. Immigration and Customs Enforcement and Rodney C. Brewer, Kentucky State Police Commissioner (KSP) jointly announced the sentence.

The investigation was conducted by the Kentucky State Police, FBI, and Department of Homeland Security Investigations-U.S. Immigration and Customs Enforcement.

LEXINGTON, KY - A Lexington man was indicted for allegedly robbing a bank in Fayette County in November of last year.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI and Ronnie J. Bastin, Chief of Police for the Lexington-Fayette Urban County Government jointly made the announcement today.

A federal grand jury in Lexington returned the indictment February 7, charging 38-year-old William Abshear with one count of bank robbery.

According to the indictment, Abshear used intimidation to take $1,500 from the Chase Bank on Winchester Road on November 26 of last year.

Court documents allege that Abshear passed a note to the teller demanding that she put money on the counter. After getting the money, Abshear allegedly fled the bank on foot. Lexington Police used surveillance photographs to identify Abshear as a suspect. He was arrested in Phoenix, Ariz., on December 20.

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The investigation was conducted by the Lexington-Fayette Urban County Government and the FBI. Assistant U.S. Attorney Elisabeth Brown is prosecuting the case for the U.S. Attorney’s Office.

A date for Abshear to appear in federal court in Lexington has not yet been set. If convicted, Abshear faces a maximum penalty of 20 years in prison. However, any sentence following a conviction would be imposed after the Court considers the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.

LONDON, KY - A federal jury found a London, KY., couple guilty of photographing two children engaging in sexually explicit conduct.

The jury convicted 58-year-old Ricky L. Sherman and his wife, 33-year-old Corrine Sherman late Wednesday afternoon of two counts of producing child pornography, conspiracy to produce child pornography, and one count of possessing child pornography. The jury returned the verdict after approximately four hours of deliberation following three days of trial.

Evidence presented at trial showed that, in 2008, the Shermans produced approximately 40 images of two prepubescent children engaged in sexually explicit conduct.

At the time Ricky Sherman was arrested for the federal offenses he was on probation for a previous state offense. The investigation started when state authorities received a tip that Ricky Sherman violated terms of his probation by having access to a computer. The evidence revealed that Ricky Sherman contacted his wife as the investigation was underway, and she subsequently attempted to conceal a camera from law enforcement. The camera was recovered and found to contain the produced child pornography images.

Ricky Sherman owned Truck Town Repair in Laurel County. He and his wife were indicted in September 2011.

Kerry B. Harvey, U.S Attorney for Eastern District Kentucky, Perrye Turner, Special Agent in Charge, FBI and Stewart Walker, Chief of the London Police Department jointly announced the convictions.

The investigation was conducted by the FBI and the London Police Department. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Jason Parman.

The Shermans will appear for sentencing on June 4, 2013. They face a minimum of 15 years in prison and a maximum of life. The couple will have to serve a minimum of 85 percent of the prison sentences imposed. The court will impose a sentence after reviewing the U.S. Sentencing Guidelines and the federal statutes.

LEXINGTON, KY - A Richmond man with a lengthy criminal history was sentenced today to 250 months in prison for dealing cocaine and using his retail store to conceal his drug trafficking activity.

U.S. District Court Judge Joseph M. Hood sentenced 30-year-old Jakolbe Chenault, aka, “Kolbe Cheese,” for conspiracies to distribute cocaine and launder drug money. Judge Hood enhanced Chenault’s sentence because Chenault qualified as a career offender. A career offender is someone with two or more prior violent crime or drug trafficking offenses.

According to court documents, from May 2009 until October 2011, Chenault helped lead a large cocaine trafficking ring and distributed at least 3.5 kilograms of cocaine in Madison County. More than 10 others were part of the conspiracy.

Chenault co-owned the clothing store known as Ja Ru’s New Fashions with co-defendant Ruben Catching. Chenault acknowledged that he and Catching used drug proceeds to buy merchandise for the store.

Court documents state that Chenault also used drug profits to purchase several vehicles and a house on Oakland Avenue in Richmond. The U.S. Government seized five vehicles and the home.

Chenault has prior felony convictions which include trafficking in a controlled substance, second degree unlawful transaction with a minor and wanton endangerment first degree.

Under federal law, Chenault must serve at least 85 percent of his prison sentence.

Others involved in the drug trafficking conspiracy previously received the following prison sentences: Ruben Catching - 100 months; Christina Thieleman – 120 months; Demetrius Catching – 60 months; Jermaine Carter – 60 months; Da’Lance Roberts – 120 months; James Phelps – 30 months; Bryan Campbell – 180 months; Shaquille Williams – 27 months; Franklin Floyd – 12 months and 1 day; Montel Jenkins – 138 months; Christoper Crutcher – 18 months; Laverne Cructcher – 60 months; Damar Horton – 128 months; and Edward Lamont Ellington – 87 months.

Kerry B. Harvey, U.S Attorney for the Eastern District Kentucky, Stuart L. Lowery, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Robert L. Corso, Special Agent in Charge of DEA; Christopher A. Henry, Special Agent in Charge of IRS’ Criminal Investigation Division; Rodney C. Brewer, Kentucky State Police Commissioner and Larry R. Brock, Richmond Police Chief jointly announced the sentence.

The investigation was conducted by ATF, the Richmond Police Department, IRS-CID, KSP, and DEA. The U.S. Attorney’s Office was represented by Robert M. Duncan Jr. and Roger W. West.

COVINGTON, KY - A Michigan man was sentenced today to 57 months in federal prison for using other people’s credit card information to make purchases at retail stores in Campbell, Kenton and Boone Counties.

U.S. District Judge David L. Bunning sentenced 34-year-old Tyhkan S. Brunson for the use of unauthorized credit cards and aggravated identity theft. Judge Bunning also ordered Brunson and his co-defendants to jointly pay $5,478.76 in restitution.

Court documents state that in May of 2012, Brunson and three co-defendants possessed counterfeit credit cards bearing legitimate card numbers. In one day’s time they drove from Michigan to Kentucky and used the fraudulent cards to purchase thousands of dollars in gift cards and other merchandise from Home Depot, Meijer and Wal-Mart.

According to Brunson’s plea agreement, 32 people had their identities stolen and three banks lost money.

When Cold Spring Police in Campbell County conducted a vehicle stop of the defendants, officers located 26 counterfeit credit cards. They also found a co-defendant trying to destroy merchandise receipts by chewing them.

Brunson’s co-defendants previously received the following prison sentences: John Cotton, 44 months; Adam Sanford, 24 months, and Brittany Bell, 42 months.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Mark A. Porter, Special Agent in Charge, U.S. Secret Service jointly announced the pleas.

The investigation preceding the indictment was conducted by the U.S. Secret Service. The indictment was presented to the grand jury by Assistant U.S. Attorney Laura K. Voorhees.

LONDON, KY - A London, KY., physician, who worked in eastern Kentucky and Tennessee, admitted he evaded hundreds of thousands of dollars in federal income taxes.

Werner Grentz, 64, pleaded guilty today to tax evasion in front of U.S. District Judge Gregory F. Van Tatenhove. As part of his plea, Grentz agreed to pay the IRS approximately $900,000.

Grentz admitted he made $356,073 in taxable income in 2009 working as an independent physician contractor for a hospital in Jellico, Tenn., and a medical office in London, Ky. In order to hide his income, Grentz had his earnings deposited into bank accounts of companies that he controlled, and he did not file a tax return or pay federal income taxes.

Grentz admitted that he failed to pay $900,068 in taxes since 1999. He was indicted in April of last year.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, jointly made the announcement today.

The investigation preceding the indictment was conducted by the Internal Revenue Service, Criminal Investigation Division. The United States is represented in the case by Assistant United States Attorney John Patrick Grant.

Grentz is scheduled to appear for sentencing on May 16 at 2:30 p.m., in Federal court in London. He faces a maximum prison sentence of five years. However, the court must consider the United States Sentencing Guidelines and the federal statute before imposing a sentence.

LEXINGTON, KY - A federal indictment, unsealed today, accuses a pain clinic owner and his two businesses of illegally distributing prescription drugs in central and northern Kentucky.

Ernest William Singleton, 44, was arrested in his hometown of Springfield, KY., this morning on federal charges.

Singleton and his businesses, Double D Holdings, LLC, and S & R Medical Enterprises, LLC, which previously did business under the names Central Kentucky Bariatric and Pain Management (Georgetown, Ky.) and Grant County Wellness Clinic, (Dry Ridge, Ky.) are charged with conspiracy to distribute oxycodone and conspiracy to launder funds from October 2010 until January 2013.

In addition, the U.S. Government seeks forfeiture of farm land, vehicles, businesses, and other property that were purchased with illegal profits or used to facilitate the alleged crimes.

A federal grand jury in Lexington returned the sealed indictment on January 10.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration, Christopher A. Henry, Special Agent in Charge of IRS, Criminal Investigation Division, Jack Conway, Kentucky Attorney General, and Rodney Brewer, Commissioner of Kentucky State Police, jointly announced the arrest and the charges.

The investigation was conducted by the DEA, the IRS’ Criminal Investigation Division, the Kentucky Attorney General’s Office and Kentucky State Police. Assistant U.S. Attorney Ron Walker represents the U.S. Attorney’s Office in this case.

“Illegal pill mills have fueled the prescription drug epidemic in Kentucky that now kills more people than traffic accidents,” General Conway said. “I appreciate the hard work of my Drug Branch Investigators, working in coordination with our state and federal law enforcement partners, in bringing this case forward.”

A date for Singleton to appear in Federal Court has not yet been set. If convicted he faces a maximum of 20 years in prison on each count. However, any sentence following a conviction would come after the Court considers the U.S. Sentencing Guidelines and the federal statutes.

The indictment of a person by a grand jury is an accusation only, and that person is presumed innocent unless proven guilty.