Eastern District of Michigan

Former Macomb County Prosecutor Eric Smith, 53, of Macomb Township, pleaded guilty to a one-count Information charging him with Obstruction of Justice, announced United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Special Agent in Charge Timothy Waters, Federal Bureau of Investigation, Detroit Division.

Smith entered his guilty plea before United States District Judge Linda V. Parker in United States District Court in Detroit this morning.

According to court records, Smith admitted to obstructing justice by attempting to get a friend and two of his assistant county prosecutors to make false statements to federal law enforcement officers and a federal grand jury in a federal criminal investigation of Smith’s own criminal conduct.  The charge was based on an investigation by the Federal Bureau of Investigation that revealed that between 2012 and 2020, Smith conducted two fraud schemes to steal approximately $75,000 in cash from his political campaign fund to use for personal expenses.  When he became aware of a federal grand jury investigation in 2019, Smith pressured three witnesses to lie and commit perjury on his behalf to federal authorities and a federal grand jury.

As part of guilty plea, Smith admitted that he had stolen over $74,000 from his campaign fund through two different fraud schemes.  In one scheme, Smith falsely claimed that he was using campaign funds to pay rent on office space for his re-election efforts.  In truth, however, Smith never used the office space, but instead wrote dozens of fraudulent checks to a friend worth over $50,000.  The friend then kicked back cash from all of the cashed checks to Smith to use for his personal expenses.  In a second fraud scheme, Smith wrote a check for $20,000 from the campaign fund to an assistant Macomb County prosecutor, ostensibly for “consulting” work on the campaign.  However, the assistant prosecutor then cashed the check and surreptitiously provided $15,000 in cash to Smith for Smith’s personal expenses.

“Some may view Smith’s conviction as a reason to lack confidence in our elected officials or our prosecutors.  But the opposite is true,” stated United States Attorney Matthew Schneider.  “This case shows that our system works.  When there is a rare case where a law enforcement officer commits crimes, he or she will be held accountable.  Smith’s case is that kind of case.  No one is above the law in Michigan — and that includes those who enforce the law.”   

"Any attempt to hinder a criminal investigation is a very serious matter," said Timothy Waters, Special Agent in Charge of FBI Detroit. "This case, a man who had taken an oath to uphold the law was actively encouraging others to break it. That Mr. Smith was unsuccessful in his attempt to undermine the investigation is a testament to the determination of the FBI to hold individuals accountable when they break the law."

As part of his guilty plea, Smith has agreed to forfeit the $69,950 in fraud proceeds that he personally received from his scheme to steal from his campaign account.  

Obstruction of justice is a felony that carries a sentence of up to 20 years in federal prison. 

The investigation of this case was conducted by the Federal Bureau of Investigation.  The case is being prosecuted by Assistant U.S. Attorneys  R. Michael Bullotta and Robert Moran.

DETROIT – FCA US LLC (FCA, a/k/a Fiat Chrysler Automobiles), one of the big three American automobile manufacturers, has been charged with and has agreed to plead guilty to conspiring to violate the Labor Management Relations Act, also known as the Taft-Hartley Act, by making illegal payments to officers of the United Auto Workers union, United States Attorney Matthew Schneider announced today. 

FCA is the American operating subsidiary of Stellantis. 

Today, the United States filed a criminal Information against FCA, charging the company with conspiring with other entities and individuals to violate the Taft-Hartley Act by making more than $3.5 million in illegal payments to officers of the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW) during the period 2009 through 2016.  During the conspiracy, executives of FCA, including Alphons Iacobelli, Jerome Durden, and others, engineered the illegal payments to senior officials of the UAW.  During the conspiracy from 2009 through June 2015, Iacobelli was the Senior Vice President of FCA US LLC in charge of labor relations. 

The illegal payments to UAW officials took various forms, including extravagant meals, rounds of golf, lavish parties for the UAW International Executive Board, an Italian-made shotgun, clothing, designer shoes, and other personal items paid for with credit cards issued by the joint training center.  FCA executives also paid off the $262,000 home mortgage of former UAW Vice President General Holiefield.  Holiefield and his widow also received hundreds of thousands of dollars directed through Holiefield’s purported charitable organization, as well as companies controlled by him which had contracts with the training center.  The illegal payments were passed through the UAW-Chrysler Skill Development & Training Program d/b/a the UAW-Chrysler National Training Center (NTC).  Ostensibly, the NTC was supposed to provide training and health and safety protections for FCA workers.  The UAW officials who accepted illegal payments included former UAW Vice Presidents Holiefield and Norwood Jewell, Holiefield’s widow, Monica Morgan, and senior UAW officials, Virdell King, Keith Mickens, and Nancy Johnson.  Morgan and all of the UAW officials, except for Holiefield, have pleaded guilty to conspiring to accept the illegal payments from FCA or tax charges.  Holiefield died in 2014.       

The United States has entered into a Rule 11 Plea Agreement with FCA.  Under the terms of the agreement, FCA has agreed to plead guilty to violating the Labor Management Relations Act.  The company has agreed to pay a fine of $30 million.  In addition, FCA has agreed to be subject to probation for three years.  During that three year period, an independent compliance monitor selected by the government will oversee the company’s adherence to federal labor laws.  A guilty plea hearing has not yet been set, and the parties’ plea agreement will be subject to review and approval by the court.       

United States Attorney Schneider said, “No matter the size or importance of a company, our job in the Justice Department is to faithfully enforce federal law.  This proposed guilty plea ensures that FCA will be held accountable.  With a $30 million fine, three years of probation, and a court-appointed monitor, we seek to make sure similar crimes do not happen at the company again.”

“FCA US LLC conspired to make improper labor payments to high-ranking UAW officials, which were used for personal mortgage expenses, lavish parties, and entertainment expenses.  Instead of seeking to negotiate in good faith, FCA undermined the collective bargaining process and the UAW members’ rights to fair representation.  We will continue to work with our law enforcement partners to root out systemic corruption and fraud involving unions," stated Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

“FCA provided money and other items of value in an attempt to create an atmosphere more favorable for negotiating with the UAW," said Timothy Waters, Special Agent in Charge of the FBI in Michigan. "This sweeping investigation and the plea today send a clear message that the FBI, along with its federal partners, will continue to hold corporations accountable when they violate federal laws.”

 “FCA conspired with its executives and others to divert funds from the National Training Center and line the pockets of numerous UAW officials.  These actions undermined the collective bargaining process and deprived UAW represented FCA employees of joint training opportunities.  IRS-CI is committed to aggressively investigating corporate fraud and corrupt executives who abuse their positions of power and misuse corporate funds for their personal benefit,” stated Sarah Kull, Special Agent in Charge of the Internal Revenue Service – Criminal Investigation Detroit Field Office.

“Today’s proposed guilty plea holds FCA accountable for its role in undermining the collective bargaining process by making hundreds of thousands of dollars in illegal payments to high ranking UAW officers at the expense of UAW members,” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards.  “OLMS is committed to seeking justice when anyone puts personal financial gain ahead of the best interests of union members.”

Thus far, as part of this investigation of illegal payments by FCA to UAW officials, as well as fraud and embezzlement by other UAW officers, fifteen individuals have been convicted of federal crimes, including three former FCA executives.  They include former UAW Vice President Joseph Ashton (30 months in prison)  former FCA Vice President for Employee Relations Alphons Iacobelli (66 months in prison), former FCA Financial Analyst Jerome Durden (15 months in prison), former Director of FCA’s Employee Relations Department Michael Brown (12 months in prison), former senior UAW officials Virdell King (60 days in prison), Keith Mickens (12 months in prison), Nancy A. Johnson (12 months in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (18 months in prison), former UAW Vice President Norwood Jewell (15 months in prison), and former senior UAW official Michael Grimes (28 months in prison). In addition, the following UAW officials have pleaded guilty and are awaiting sentencing: former UAW President Gary Jones, former senior UAW official Jeffrey Pietrzyk, former UAW Region 5 Director and UAW Board member Vance Pearson, former UAW Midwest CAP President Edward “Nick” Robinson, and former UAW President Dennis Williams.

U.S. Attorney Schneider commended the outstanding work of the Internal Revenue Service – Criminal Investigations, the U.S. Department of Labor – Office of Labor-Management Standards and Office of Inspector General, and the Federal Bureau of Investigation in conducting a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.

This case is being prosecuted by Assistant U.S. Attorneys David A. Gardey and Erin S. Shaw.

DETROIT – United States Attorney Matthew Schneider submitted his resignation letter to President Biden yesterday shortly after the President was sworn into office.  Schneider’s last day as the United States Attorney will be February 1, 2021.  After his resignation, he will immediately join a private law firm based in Detroit.

“It has been the honor of my lifetime to serve the people of Eastern Michigan, alongside the incredibly hard-working team at the U.S. Attorney’s Office,” Schneider said.  “In the last three years, this team has overcome tremendous challenges, from the longest federal government shutdown in American history,       to an enormous rise in violent crime, the greatest increase in civil unrest since 1967, and a global pandemic.  Through it all, the lawyers and support staff of this office have faithfully enforced the law, supported our law enforcement partners, and protected our fellow citizens, and I could not be more proud of the work that they have accomplished.” 

Schneider continued:  “I’m extremely pleased to leave this office in the hands of one of the finest federal prosecutors I’ve ever known, Saima Mohsin.  Saima is a dynamic trial lawyer and a talented manager.  And, as the first woman, immigrant, Muslim United States Attorney in American history, her service is truly historic.  Saima will be an outstanding representative and defender of our community as the Acting United States Attorney.”   

Saima Mohsin will immediately assume office as Acting United States Attorney, as provided for under the Vacancies Reform Act.  Mohsin has served as the First Assistant United States Attorney—a non-political position— since March 2018.  She is a career prosecutor, having served in the U.S. Attorney’s Office since 2002, and prior to that as a Deputy New Jersey Attorney General and an Assistant District Attorney in Manhattan.  

Mohsin stated, “It is a great honor to serve the citizens of the Eastern District of Michigan as Acting United States Attorney.  I am deeply committed to fulfilling our core mission to faithfully enforce the law and seek justice for all.” 

Schneider has served as the chief federal law enforcement official in Eastern Michigan since Attorney General Jeff Sessions appointed him on January 5, 2018.  In May 2018, the judges of the United States District Court voted to continue his term in office.  In January 2, 2019, following his nomination by President Trump, the United States Senate unanimously confirmed his appointment. 

While in office, Schneider hired more than 100 federal employees and contractors, including approximately 40 Assistant United States Attorneys, which is around one-third of the office’s attorneys.  Approximately 70 percent of those new employees have been women.  Schneider said, “We’ve been incredibly successful in the last three years in hiring outstanding public servants, and at the same time we’ve advanced and strengthed the role of women in the legal profession.”

During Schneider’s tenure, the office investigated and prosecuted several high-profile civil and criminal cases, including:

●   The filing of an anti-corruption and anti-fraud civil lawsuit against the UAW, and a proposed consensual resolution to bring independent oversight to the union and eliminate corruption among its leadership;

●   The largest investigation and prosecution of corrupt auto company executives and UAW officials in American history, which has thus far led to the convictions of 15 persons for fraud and corruption crimes, including two UAW International Presidents;

●   The busiest docket of public corruption cases in the United States, including fraud, bribery, and pay-to-play schemes centering around corrupt public officials in Macomb County; 

●   Obstruction of justice charges against Macomb County Prosecuting Attorney Eric Smith for attempting to get a friend and two assistant prosecutors to make false statements to federal law enforcement officers and a federal Grand Jury;

●   In coordination with the U.S. Attorney’s Office for the Western District of Michigan, the investigation of six men who have been charged federally with conspiring to kidnap Michigan Governor Gretchen Whitmer;

●   The country’s first indictment of a U.S. citizen who was arrested on a battlefield in Syria while fighting in support of ISIS, a designated foreign terrorist organization;

●   The largest civil settlement in American history arising out of unlawful drug diversion in a major health system, resulting in a $7.75 million settlement payment by McLaren Health Care Corporation; and

●   The trial, conviction, and life sentence of a Canadian man who stabbed and attempted to kill a Flint Bishop Airport police officer in an act of violent jihad inspired by the ideology of Al Qaeda and Osama bin Laden.

In April 2020, Attorney General William Barr named Schneider to lead a nationwide effort to review state and local policies to ensure that civil liberties remain protected during the COVID-19 pandemic.  That effort resulted in dozens of court victories and policy reforms across the country to preserve Americans’ civil rights, including their right to worship and their right to be free from arbitrary, irrational state restrictions. 

On May 29, 2020, upon the Justice Department’s filing of a Statement of Interest in a case challenging Michigan Governor Gretchen Whitmer’s pandemic-related orders, Schneider stated, “As important as it is that we stay safe during these challenging times, it is also important to remember that we do not abandon our freedoms and our dedication to the rule of law in times of emergency.” 

Schneider, a graduate of the University of Michigan Law School and Michigan State University’s James Madison College, had previously served as:  Chief Deputy Attorney General for the State of Michigan; Chief Legal Counsel for the Michigan Department of Attorney General; Chief of Staff and General Counsel for the Michigan Supreme Court; an Assistant United States Attorney; Senior Advisor and Assistant General Counsel in the White House Budget Office; and an attorney in private practice.

###

A civilian employee working for the U.S. Marine Corps Community Association pleaded guilty today to assaulting his spouse while working in Iwakuni, Japan.

Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Matthew Schneider, U.S Attorney for the Eastern District of Michigan;  and Timothy Mahew, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Far East Field Office made the announcement. 

Jason Beltran, 35, a former U.S. Marine most recently residing in Flushing, Michigan, pleaded guilty to a single count of assault of a spouse resulting in substantial bodily injury. Beltran entered his plea before U.S. District Judge Nancy G. Edmunds in the U.S. District Court in Detroit, Michigan.

According to the admissions made in connection with his plea, Beltran was an active duty U.S. Marine stationed in Iwakuni, until he was honorably discharged from the Marine Corps in 2011. 

Thereafter, Beltran was hired by the U.S. Marine Corps Community Services to work as a library technician at Marine Corps Air Station Iwakuni. In 2011, Beltran married a dual Japanese-U.S. citizen and had three children with his spouse. Beltran admitted that on or about June 20, 2017, he had an argument with his spouse during which he punched her with a closed fist to the side of her face causing a gash that required several stitches to close the wound, and which resulted in a small, permanent scar.

Sentencing is scheduled for May 3.  

NCIS conducted the investigation. Trial Attorneys Frank G. Rangoussis and John-Alex Romano of the Criminal Division’s Human Rights and Special Prosecutions Section are prosecuting the case.

“My position on the disgraced former Mayor of Detroit has not changed.  Kwame Kilpatrick has earned every day he served in federal prison for the horrible crimes he committed against the People of Detroit.  He is a notorious and unrepentant criminal.  He remains convicted of 24 felonies.  Kilpatrick has served only one quarter of the sentence that was very appropriately imposed.  Thankfully, under Michigan law, he cannot hold state or local public office for 20 years after his conviction.”

GRAND RAPIDS AND DETROIT - The United States Attorneys’ Offices for the Western and Eastern Districts of Michigan announced today that McLaren Health Care Corporation (MHCC) has agreed to pay the United States $7,750,000 to resolve allegations that MHCC violated certain provisions of the Controlled Substances Act (the CSA), 21 U.S.C. §§ 801-904.  The civil settlement resulted from a years-long investigation by the U.S. Drug Enforcement Administration (DEA) into MHCC’s handling of controlled substances.  It is the nation’s largest settlement of its kind involving allegations of drug diversion at a health care system.

DEA began its investigation after learning that an unregistered substance abuse treatment facility was improperly receiving controlled substances from an MHCC subsidiary pharmacy in the Western District of Michigan by calling in prescriptions for “office stock.”  DEA expanded its investigation and concluded that certain of MHCC’s controlled substances practices, at numerous facilities across the State of Michigan, violated the CSA and its implementing regulations. 

The government alleged, among other things, that McLaren Port Huron Pharmacy and McLaren Yale Pharmacy in the Eastern District of Michigan dispensed Schedule II drugs without written prescriptions and despite “red flags” that those drugs were being diverted by MHCC’s pharmacist-in-charge.  These “red flags” included: pattern prescriptions for the same type of drugs, in the same quantities, from the same prescriber; prescriptions for excessive quantities of highly-addictive Schedule II drugs; repeated early prescription refills; significant outlier drug volumes for individual patients and prescribers; prescription entries in the names of fake patients; and discrepancies between the cash reported and cash collected for controlled substance prescriptions.  The government alleged that other MHCC pharmacies also dispensed controlled substances despite obvious “red flags” that the underlying prescriptions may have been issued without a legitimate medical purpose or were otherwise unauthorized.

The government further alleged that several MHCC facilities violated the CSA’s recordkeeping provisions, including by failing to notify DEA of known employee thefts of controlled substances.  These violations, the government claimed, stemmed in part from certain facility policies that were inconsistent with the CSA’s requirements and MHCC’s failure to revise other legacy policies that remained in place after MHCC acquired corporate health care providers.

            As part of the settlement, MHCC admitted that:

•           The McLaren Port Huron and Yale Pharmacies did not have written prescriptions for approximately 1,255 Schedule II prescription events between May 1, 2014 and February 22, 2018;

•           MHCC’s Prescription Services pharmacy distributed controlled substances to an unregistered treatment facility in Boyne Falls, Michigan between November 22, 2015 and November 13, 2017 without making a good faith inquiry into whether that treatment facility was registered with DEA;

•           McLaren Greater Lansing did not notify DEA of certain thefts of controlled substances between July 27, 2007 and May 31, 2019;

•           Theft and diversion of controlled substances occurred at certain of MHCC’s locations; and

•           Some of MHCC’s corporate policies—including legacy policies that remained in place after MHCC’s integration with Port Huron Hospital—were not consistent with the requirements of the CSA and its regulations.

Andrew Birge, United States Attorney for the Western District of Michigan, said, “While our health systems provide critical services to patients, they carry broader public responsibilities as bulwarks against the drug diversion that contributes to the surging opioid crisis in the State of Michigan.  Hospitals and health systems handle significant quantities of controlled substances and must fulfill their legal obligations for handling those drugs under the Controlled Substances Act.  This settlement demonstrates our offices’ shared commitment to working cooperatively, together and with our agency partners, to hold even the largest providers accountable when they fall short of what the law demands.”

“At nearly $7.8 million, this is the largest civil Controlled Substances Act settlement in American history involving a health care system whose internal practices were so deficient that it allowed the diversion of drugs, including opioids,” stated United States Attorney Matthew Schneider.  “McLaren clearly didn’t have a sufficient system in place to catch these problems.  But now, under this settlement, McLaren is stepping up and implementing more robust compliance measures.  That’s exactly what we expect of corporations in Michigan who do wrong: they recognize their mistakes and learn from them, which benefits their employees and the public.”

“Everyone from the manufacturer of a controlled substance to the prescribing healthcare provider has a legal obligation to ensure pharmaceuticals don’t get into the wrong hands,” said Drug Enforcement Administration Special Agent in Charge Keith Martin. “When they violate these obligations, we will investigate and hold them accountable.”

As part of the settlement, MHCC entered into a three-year Memorandum of Agreement with DEA that, among other things, prescribes the system’s drug-handling responsibilities, mandates external controlled substance audits, and requires MHCC to institute a broad-based educational program focused on preventing drug diversion in the workplace.  In reaching this settlement, the government recognized the substantial steps MHCC took in response to DEA’s investigation to address problems in its handling of controlled substances.

DEA investigated this matter.  The United States was represented by Assistant U.S. Attorneys Adam Townshend and Caroline Burgunder.

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

###

Two men from Redford Charter Township were charged in a criminal complaint for their alleged role in an ongoing fraud scheme, involving mail thefts in multiple cities throughout southeast Michigan over the past year, announced United States Attorney Matthew Schneider.

Joining in the announcement were Douglas Zloto, Special Agent in Charge, U.S. Secret Service, Detroit Field Office; Bryan Musgrove, Acting Inspector in Charge, Detroit Division, U.S. Postal Inspection Service; Michael Patton, Chief, West Bloomfield Police Department; and Jeff King, Chief, Farmington Hills Police Department.

Charged are Justin Lohman, 35; and Justin Cutshaw, 34.

According to the complaint, Lohman and Cutshaw are alleged to have stolen mail from over 200 individual victims across more than 30 different communities in Southeast Michigan, to include: Bloomfield Hills, Farmington Hills, Livonia, Westland, Canton, Plymouth, Northville, Novi, Clinton Township, and Redford Township. It is alleged that the men would frequently alter the “Payee” line and the amount of checks found within the mail, and then either cash those checks or use them to purchase construction equipment or other goods that they would later pawn. It is further alleged that the men also opened credit cards in various victims’ names. According the complaint, Lohman also manufactured fake IDs to assist in the fraud scheme. It is also alleged that Lohman obtained debit cards loaded with Unemployment Insurance benefits issued in the names of individuals in other states, which are believed to be the product of fraud.

“The U.S. mail is one of our most important public services and citizens need to be able to trust that sensitive financial information they send using the mail will arrive safely and securely. Stealing mail from people’s homes and using the information in that mail to commit identity theft is a very serious crime, and one that we will treat seriously every time,” stated United States Attorney Schneider.

“I appreciate the collaborative efforts of the South East Michigan Cyber Fraud Task Force, including the U.S. Postal Inspection Service and local law enforcement agencies, and the U.S. Attorney’s Office, to bring these two defendants to justice on charges relating to mail theft and identity theft, and protect the citizens of Michigan from this criminal activity,” said Special Agent in Charge Zloto.

 “The U.S. Postal Inspection Service, the law enforcement and security arm of the Postal Service, is charged with safeguarding the nation’s mail – including the people who move it and the customers who use it. While the U.S. Mail remains one of the most secure means of transmitting personal information, thieves and fraudsters unfortunately attempt to exploit the postal system on occasion for personal gain. That is why U.S. Postal Inspectors work tirelessly to investigate postal-related crime and seek the maximum possible prosecution of those violators to keep you and your mail safe,” added Acting Inspector in Charge Musgrove.

A complaint is only a charge and is not evidence of guilt.  Trial cannot be held on felony charges in a complaint.  When the investigation is completed, a determination will be made whether to seek a felony indictment.

This case is being prosecuted by Assistant United States Attorney Ryan A. Particka.  The investigation is being conducted by the Southeast Michigan Cyber Fraud Task Force (SEMCFTF), and is being led by agents from the United States Postal Inspection Service, with support from the West Bloomfield Police Department, the Farmington Hills Police Department, and the United States Secret Service.

FLINT – Robert J. Massey, the president and owner of Oil Chem, Inc., pleaded guilty in federal court in Flint, Michigan, to a criminal charge of violating the Clean Water Act stemming from illegal discharges of landfill leachate—totaling more than forty-seven million gallons—into the City of Flint sanitary sewer system over an eight and one-half year period, the Justice Department announced. 

Oil Chem, located in Flint, processed and discharged industrial wastewaters to Flint’s sewer system.  The company held a permit issued by the City of Flint under the auspices of the Clean Water Act, which allowed it to discharge certain industrial wastes within permit limitations.  The City’s sanitary sewers flow to its municipal wastewater treatment plant, where treatment takes place before the wastewater is discharged to the Flint River.  The treatment plant’s discharge point for the treated wastewater was downstream of the location where drinking water was taken from the Flint River in 2014 to 2015.

According to an agreed upon factual statement in the plea agreement filed in federal court, Oil Chem’s permit prohibited the discharge of landfill leachate waste.  Landfill leachate is formed when water filters downward through a landfill, picking up dissolved materials from decomposing trash.  Massey signed and certified Oil Chem’s 2008 permit application, and did not disclose that his company had been and planned to continue to receive landfill leachate, which it discharged to the sewers untreated.  Nor did Massey disclose to the City when Oil Chem started to discharge this new waste stream, which the permit also required.  Massey directed employees of Oil Chem to begin discharging the leachate at the close of business each day, which allowed the waste to flow from a storage tank to the sanitary sewer overnight.

From January 2007 through October 2015, Massey arranged for Oil Chem to receive approximately 47,824,293 gallons of landfill leachate from eight different landfills located in Michigan.  One of the landfills was found to have polychlorinated biphenyls (PCBs) in its leachate.  PCBs are known to be hazardous to human health and the environment.

The charges carry penalties of up to three years in prison and a fine of up to $5,000 - $50,000 per day of violation.  In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.  Sentencing is scheduled for May 14, 2021 at 11am.

“The Clean Water Act is our Nation’s law for protecting the quality of the waters of the United States, and the health of people who rely on those waters.  The criminal conduct here violated the Act and Oil Chem’s permit,” said Jonathan D. Brightbill, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Robert Massey ignored clear legal prohibitions and requirements in the interest of generating more revenue for his company. He knew better and should have done better. The outcome of this case will deter others, and hopefully chart a new course for this company.”     

“Protecting Michigan’s water is one of the most important and sacred things we can do,” stated United States Attorney Matthew Schneider.  “The actions of the defendant were done with total disregard for the Flint River and the environment.  Fortunately for the people of Flint, these contaminants did not end up in their drinking water, because the discharge point was several miles downstream of the drinking water intake.  This case should stand as a warning to other businesses that they will face criminal charges for this kind of pollution.” 

“The defendant knowingly ordered the discharge of over 40 million gallons of landfill wastewater, ultimately to the Flint River, putting the environment at risk,” said Special Agent in Charge Jennifer Lynn of EPA’s Criminal Investigation Division in Michigan.  “Today’s plea demonstrates that anyone who intentionally violates the law will be held responsible for their actions.”  

“We are very happy with the cooperation and partnership with the EPA and the U.S. Attorney’s Office,” stated Lt. Vence Woods, Michigan Department of Natural Resources Law Enforcement Division; Environmental Investigation Section.

Principal Deputy Assistant Attorney General Jonathan Brightbill and U.S. Attorney Matthew Schneider thanked the U.S. Environmental Protection Agency’s Criminal Investigation Division as well as the Michigan Department of Natural Resources-Law Enforcement Division-Environmental Investigations Section (“MDNR-EIS”), and Coast Guard Investigative Service (“CGIS”) for their work in this investigation.

The case is being prosecuted by Assistant U.S. Attorneys Ann Nee and Jules DePorre of the U.S. Attorney’s Office for the Eastern District of Michigan and Senior Counsel Kris Dighe of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

The president and owner of Oil Chem Inc. pleaded guilty in federal court in Flint, Michigan, to a criminal charge of violating the Clean Water Act stemming from illegal discharges of landfill leachate — totaling more than 47 million gallons — into the city of Flint sanitary sewer system over an eight and a half year period. 

Robert J. Massey, 69, of Brighton, Michigan, pleaded guilty today before U.S. District Judge Stephanie Dawkins Davis in the Eastern District of Michigan. Sentencing has been scheduled for May 14.  

Oil Chem, located in Flint, processed and discharged industrial wastewaters to Flint’s sewer system. The company held a permit issued by the city of Flint under the auspices of the Clean Water Act, which allowed it to discharge certain industrial wastes within permit limitations. The city’s sanitary sewers flow to its municipal wastewater treatment plant, where treatment takes place before the wastewater is discharged to the Flint River. The treatment plant’s discharge point for the treated wastewater was downstream of the location where drinking water was taken from the Flint River in 2014 to 2015.

According to an agreed upon factual statement in the plea agreement filed in federal court, Oil Chem’s permit prohibited the discharge of landfill leachate waste. Landfill leachate is formed when water filters downward through a landfill, picking up dissolved materials from decomposing trash. Massey signed and certified Oil Chem’s 2008 permit application and did not disclose that his company had been and planned to continue to receive landfill leachate, which it discharged to the sewers untreated. Nor did Massey disclose to the city when Oil Chem started to discharge this new waste stream, which the permit also required. Massey directed employees of Oil Chem to begin discharging the leachate at the close of business each day, which allowed the waste to flow from a storage tank to the sanitary sewer overnight.

From January 2007 through October 2015, Massey arranged for Oil Chem to receive approximately 47,824,293 gallons of landfill leachate from eight different landfills located in Michigan. One of the landfills was found to have polychlorinated biphenyls (PCBs) in its leachate.  PCBs are known to be hazardous to human health and the environment.

“The Clean Water Act is our Nation’s law for protecting the quality of the waters of the United States, and the health of people who rely on those waters.  The criminal conduct here violated the Act and Oil Chem’s permit,” said Jonathan D. Brightbill, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Robert Massey ignored clear legal prohibitions and requirements in the interest of generating more revenue for his company. He knew better and should have done better. The outcome of this case will deter others, and hopefully chart a new course for this company.”

“Protecting Michigan’s water is one of the most important and sacred things we can do,” said Attorney Matthew Schneider, U.S. Attorney for the Eastern District of Michigan. “The actions of the defendant were done with total disregard for the Flint River and the environment. Fortunately for the people of Flint, these contaminants did not end up in their drinking water, because the discharge point was several miles downstream of the drinking water intake. This case should stand as a warning to other businesses that they will face criminal charges for this kind of pollution.” 

“The defendant knowingly ordered the discharge of over 40 million gallons of landfill wastewater, ultimately to the Flint River, putting the environment at risk,” said Jennifer Lynn, special agent in charge of EPA’s Criminal Investigation Division in Michigan. “Today’s plea demonstrates that anyone who intentionally violates the law will be held responsible for their actions.”  

The Justice Department thanked the EPA’s Investigation Division as well as the Michigan Department of Natural Resources-Law Enforcement Division-Environmental Investigations Section, and Coast Guard Investigative Service for their work in this investigation.

The case is being prosecuted by Senior Counsel Kris Dighe of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorneys Ann Nee and Jules DePorre of the U.S. Attorney’s Office for the Eastern District of Michigan.

An indictment was unsealed charging two former Beaumont employees and a medical supply distributor with wire fraud based upon a scheme to steal medical devices and/or medical supplies from Beaumont Hospital and then sell them on the internet, announced United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Special Agent in Charge Lynda Burdelik, Food and Drug Administration (FDA).  

Charged were:

Paul Purdy, 49, of Beavercreek, Ohio;

Valdet Seferovic, 32, of Auburn Hills, Michigan; and

Zafar Khan, 40, of Fenton, Michigan

According to the indictment, from 2003 – 2017, Paul Purdy was employed at Beaumont Hospital. During his employment, he stole medical devices and/or medical supplies from the hospital and resold them via the internet to customers throughout the United States.  Defendant Paul Purdy never informed the purchasers that the medical devices and/or supplies he sold to them were stolen. Purdy resigned from the hospital in 2017 and enlisted Valdet Seferovic, an employee of the hospital, to continue the scheme of stealing medical device and/or medical supplies. Valdet Serferovic had access to the medical supply and the cleaning and disinfecting rooms at the hospital. Purdy and Seferovic primarily stole three types of medical devices: (1) cystoscopes, a thin tube with a camera which is inserted through the urethra and into the bladder, some of which may have been contaminated as they were stolen from the cleaning and disinfecting room after being used in surgical procedures; (2) Ophthalmoscopes, an instrument for inspecting the retina and the other parts of the eye; and (3) Otoscopes, an instrument for inspecting the ears. Purdy and Seferovic sold these devices and/or supplies via the internet to customers throughout the United States.  The purchasers were never informed that the medical devices and/or supplies were stolen.

According to the indictment, in September 2017, Valdet Seferovic also agreed to steal and sell medical devices and/or medical supplies to Zafar Khan, the owner of Wholesale Medical & Surgical Suppliers of America, LLC.  Once Khan acquired the stolen medical devices and/or medical supplies he sold them to unsuspecting purchasers via the internet.

United States Attorney Schneider stated, “These defendants used their employment status to circumvent the safety protocols established by Beaumont Hospital to profit from the theft of medical devices and put the health and safety of the general public at risk in doing so. This indictment should send a clear message that our office is committed to prosecuting anyone who would endanger the health and safety of the general public for personal gain.”

“Medical devices that are removed from their rightful place in a hospital or other medical setting put patients’ health at risk by denying them access to needed diagnostic imaging and treatment,” said Special Agent in Charge Lynda M. Burdelik, FDA Office of Criminal Investigations Chicago Field Office. “We will continue to investigate and bring to justice those who jeopardize the public’s health for profit. And we commend our law enforcement colleagues for their assistance in this case.”

This case is being prosecuted by Assistant United States Attorney Regina R. McCullough. The case was investigated by special agents of the Food and Drug Administration, Office of Criminal Investigations and the Royal Oak Police Department.

An indictment is only a charge and is not evidence of guilt.  The defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

The Justice Department announced today that three individuals have been charged in an indictment with conspiracy to export U.S. goods to Iran in violation of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR), as well as conspiracy to smuggle goods from the United States, and conspiracy to engage in international money laundering.

“The defendants deceived U.S. companies, illegally obtained sensitive U.S. items, and transshipped those items through the UAE to Iran in violation of U.S. law,” said Assistant Attorney General for National Security John C. Demers.  “Such actions dilute the effectiveness of sanctions against Iran.  The Justice Department is committed to vigorously enforcing U.S. sanctions and to successfully countering the Iranian regime’s destabilizing activity.”  

“Since 1979, in order to protect the freedom and security of the American people, the United States has made it illegal to export goods to Iran,” said U.S. Attorney Matthew Schneider for the Eastern District of Michigan.  “The deeply disturbing allegations in this case are that the defendants conspired to export highly sophisticated American manufacturing equipment and other American-made items into the arms of the Iranians.  We will follow every single lead in this case as we pursue justice against the defendants, and we will continue to help American businesses protect themselves from criminal schemes like this.”

“Homeland Security Investigations (HSI) uses export control statutes to ensure sensitive technologies developed in the United States do not fall into the hands of those that intend to harm Americans or our allies,” said Vance R. Callender, Special Agent in Charge of U.S. Immigration and Customs Enforcement's Homeland Security Investigations (HSI) in Michigan and Ohio.  “Iran has been subject to international sanctions for more than 40 years and has continuously and furtively tried to obtain items that could be used against U.S. soldiers in conflict or Americans abroad.  HSI special agents work in cooperation with private industry partners and the Department of Commerce to ensure our country’s national security profile.” 

“This indictment demonstrates the Office of Export Enforcement’s continued commitment to enforcing our nation’s export control laws,” said Special Agent in Charge Dan Clutch of the Office of Export Enforcement (OEE) Chicago Field Office.  “We will continue to work with our law enforcement partners to counter Iran’s illicit procurement networks that threaten U.S. national security interests.”

Charged in the indictment are:

• Arash Yousefi Jam, also known as Arash Yousefijam, 32, an Iranian national living in Ontario, Canada.  Arash Jam was arrested by U.S. authorities on December 23, 2020;
• Amin Yousefi Jam, also known as Amin Yousefijam, 33, an Iranian national living in Ontario, Canada; and
• Abdollah Momeni Roustani, also known as Abdollah Momeni, Ab Momeni, and Amir Amiri, 44, an Iranian national believed to be living in Iran.

According to the indictment, between January 2015 and February of 2017, Arash Jam, Amin Jam, and Abdollah Momeni allegedly conspired with each other and others to obtain goods in the United States and export them to Iran.  Specifically, the defendants are alleged to have conspired to fraudulently and knowingly export and send nine electrical discharge boards, one CPU board, two servo motors, and two railroad crankshafts from the United States to Iran in violation of economic sanctions.

The indictment further alleges that as part of the conspiracy, the defendants and their coconspirators planned and acted outside of the United States — in Iran and Canada, among other places — to purchase goods inside the United States to send to Iran.  In addition, the indictment alleges that the defendants used third parties to arrange for payment and transportation of the goods.  It is further alleged that the defendants intentionally concealed from companies located in the United States the true nature of the ultimate end use and true identities of the ultimate end users of the goods by providing false and misleading information.  Finally, the indictment alleges that the defendants caused the goods to be exported from the United States to individuals and entities located in Iran through the United Arab Emirates, without obtaining the necessary licenses, in violation of U.S. law.

If convicted, the defendants face a statutory maximum penalty of five years in federal prison and a $250,000 fine on the export and smuggling violations, and 20 years in federal prison and a $500,000 fine on the money laundering violation.

This case is being investigated by special agents of HSI and the Commerce Department, Office of Export Enforcement.  This case is being prosecuted by Assistant U.S. Attorney Hank Moon from the Eastern District of Michigan and Trial Attorney Adam Barry from the Counterintelligence and Export Control Section of the National Security Division.  The Justice Department’s Office of International Affairs provided valuable assistance.

An indictment is only a charge and is not evidence of guilt.  The defendants are presumed innocent, and the burden is on the government to prove guilt beyond a reasonable doubt.

DETROIT – The Justice Department announced today that three individuals have been charged in an indictment with conspiracy to export U.S. goods to Iran in violation of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR), as well as conspiracy to smuggle goods from the United States, and conspiracy to engage in international money laundering.

“The defendants deceived U.S. companies, illegally obtained sensitive U.S. items, and transshipped those items through the UAE to Iran in violation of U.S. law,” said Assistant Attorney General for National Security John C. Demers. “Such actions dilute the effectiveness of sanctions against Iran. The Justice Department is committed to vigorously enforcing U.S. sanctions and to successfully countering the Iranian regime’s destabilizing activity.”  

“Since 1979, in order to protect the freedom and security of the American people, the United States has made it illegal to export goods to Iran,” said U.S. Attorney Matthew Schneider for the Eastern District of Michigan. “The deeply disturbing allegations in this case are that the defendants conspired to export highly sophisticated American manufacturing equipment and other American-made items into the arms of the Iranians. We will follow every single lead in this case as we pursue justice against the defendants, and we will continue to help American businesses protect themselves from criminal schemes like this.”

“Homeland Security Investigations (HSI) uses export control statutes to ensure sensitive technologies developed in the United States do not fall into the hands of those that intend to harm Americans or our allies,” said Vance R. Callender, Special Agent in Charge of HSI in Michigan and Ohio. “Iran has been subject to international sanctions for more than 40 years and has continuously and furtively tried to obtain items that could be used against U.S. soldiers in conflict or Americans abroad. HSI special agents work in cooperation with private industry partners and the Department of Commerce to ensure our country’s national security profile.” 

“This indictment demonstrates the Office of Export Enforcement’s continued commitment to enforcing our nation’s export control laws,” said Special Agent in Charge Dan Clutch of the Office of Export Enforcement (OEE) Chicago Field Office. “We will continue to work with our law enforcement partners to counter Iran’s illicit procurement networks that threaten U.S. national security interests.”

Charged in the indictment are:

•           Arash Yousefi Jam, also known as Arash Yousefijam, 32, an Iranian national living in Ontario, Canada. Arash Jam was arrested by U.S. authorities on December 23, 2020;

•           Amin Yousefi Jam, also known as Amin Yousefijam, 33, an Iranian national living in Ontario, Canada; and

•           Abdollah Momeni Roustani, also known as Abdollah Momeni, Ab Momeni, and Amir Amiri, 44, an Iranian national believed to be living in Iran.

According to the indictment, between January 2015 and February of 2017, Arash Jam, Amin Jam, and Abdollah Momeni allegedly conspired with each other and others to obtain goods in the United States and export them to Iran. Specifically, the defendants are alleged to have conspired to fraudulently and knowingly export and send nine electrical discharge boards, one CPU board, two servo motors, and two railroad crankshafts from the United States to Iran in violation of economic sanctions.

The indictment further alleges that as part of the conspiracy, the defendants and their coconspirators planned and acted outside of the United States — in Iran and Canada, among other places — to purchase goods inside the United States to send to Iran. In addition, the indictment alleges that the defendants used third parties to arrange for payment and transportation of the goods. It is further alleged that the defendants intentionally concealed from companies located in the United States the true nature of the ultimate end use and true identities of the ultimate end users of the goods by providing false and misleading information. Finally, the indictment alleges that the defendants caused the goods to be exported from the United States to individuals and entities located in Iran through the United Arab Emirates, without obtaining the necessary licenses, in violation of U.S. law.

If convicted, the defendants face a statutory maximum penalty of five years in federal prison and a $250,000 fine on the export and smuggling violations, and twenty years in federal prison and a $500,000 fine on the money laundering violation.

This case is being investigated by special agents of HSI and the Commerce Department, Office of Export Enforcement. This case is being prosecuted by Assistant U.S. Attorney Hank Moon from the Eastern District of Michigan and Trial Attorney Adam Barry from the Counterintelligence and Export Control Section of the National Security Division. The Criminal Division’s Office of International Affairs provided valuable assistance.

An indictment is only a charge and is not evidence of guilt. The defendants are presumed innocent, and the burden is on the government to prove guilt beyond a reasonable doubt.

DETROIT – A criminal complaint was filed yesterday against a resident of Epping, New Hampshire for sending threatening communications to the chair of the Wayne County Board of Canvasers (Adult Victim-1), announced United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Special Agent in Charge Timothy Waters, Federal Bureau of Investigation, Detroit, Michigan and Director John Kosanke, Grosse Pointe Woods Police Department.

Charged was Katelyn Jones, 23, formerly of Olivet, Michigan.  Jones was arrested this morning and will be making her initial appearance in federal court this afternoon.

“The allegations in this case should make all of us disgusted,” stated United States Attorney Schneider.  “There is simply no place in Michigan, or in the United States, for chilling threats like this to people who are simply doing what they believe is correct.”

“Due to the potential wide scope of the investigation, we contacted the F.B.I. for their assistance in this case,” said Director Kosanke.  “As a result of the combined efforts between the F.B.I. and our investigative team, led by Detective Ryan Schroerlucke, federal felony charges were filed.  I would like to express appreciation to the Federal Bureau of Investigation for their assistance in this investigation.”

According to the affidavit, on November 18, 2020, Jones is alleged to have knowingly and willfully transmitted communications containing threats to injure AV-1 and her family due to actions AV-1 took in her official capacity at Chair of the Wayne County Board of Canvasers.  The affidavit describes a series of threatening text messages that were sent from a phone alleged to be associated with Jones to AV-1’s phone.  In those texts Jones called AV-1 a racist and a terrorist and used graphic and profane language.  It is also alleged that Jones sent AV-1 two graphic photographs of a bloody, naked, mutilated, dead woman lying on the ground.  Immediately following, Jones sent AV-1 a photograph of AV-1’s minor daughter.  AV-1 also received similar threats on her Instagram account. 

If convicted, Jones faces up to 20 years in federal prison, and a fine of up to $250,000.

A complaint is only a charge and not evidence of guilty.  Defendant Jones is innocent until proven guilty.  The burden of proving these charges lies entirely on the United States, and that burden never shifts to the defendant.

DETROIT – United States Attorney Matthew Schneider announced today that law enforcement in the United States has worked jointly in support of an international takedown of a virtual private network (VPN), dubbed “Operation Nova.”  Domain names offered by an organization engaged in “bulletproof hosting” that provided assistance to cyber-criminals were seized, and related servers were shut down. U.S.-based servers used in the scheme were taken offline by U.S. authorities, while International partners did the same.

Schneider was joined in the announcement by Special Agent in Charge Timothy Waters of the Federal Bureau of Investigation (FBI) in Detroit.

The coordinated effort was led by the German Reutlingen Police Headquarters together with Europol, the FBI and other law enforcement agencies from around the world.  Today, law enforcement from around the world conducted a coordinated takedown of servers in at least five different countries, in addition to the domain seizures.

The investigation revealed that three domains— INSORG.ORG; SAFE-INET.COM; SAFE-INET.NET.—offered “bulletproof hosting services” to website visitors.  A “bulletproof hosting service” is an online service provided by an individual or an organization that is intentionally designed to provide web hosting or VPN services for criminal activity.  These services are designed to facilitate uninterrupted online criminal activities and to allow customers to operate while evading detections by law enforcement.  Many of these services are advertised on online forums dedicated to discussing criminal activity.  A bulletproof hoster’s activities may include ignoring or fabricating excuses in response to abuse complaints made by their customer’s victims; moving their customer accounts and/or data from one IP address, server, or country to another to help them evade detection; and not maintaining logs (so that none are available for review by law enforcement).  By providing these services, the bulletproof hosts knowingly support the criminal activities of their clients and become coconspirators in criminal schemes.

Much of the criminal activity occurring on the network involved cyber actors responsible for ransomware, E-skimming breaches, spearphishing, and account takeovers.  The service’s website offered support in Russian and English languages, at a high price to the criminal underworld.  This infrastructure preferred by cybercriminals was used to compromise networks all around the world.

The seized domains are in the custody of the federal government. Visitors to the sites will now find a seizure banner that notifies them that the domain name has been seized by federal authorities facilitating computer intrusions is a federal crime.

The Justice Department’s Office of International Affairs provided investigative assistance.  The Justice Department thanks Germany’s Reutlingen Police Headquarters (Polizeipräsidium Reutlingen),  The Netherlands’ National Police (Politie), Switzerland’s Cantonal Police of Argovia (Kantonspolizei Aargau), France’s Judicial Police (Direction Centrale de la Police Judiciaire) and Europol’s European Cybercrime Centre (EC3) for their assistance and collaboration in this matter.

###

An indictment was unsealed today charging a Texas woman with introducing an unapproved drug into interstate commerce, introducing a misbranded drug into interstate commerce, and introducing an unapproved drug into interstate commerce with the intent to defraud or mislead, announced United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Special Agent in Charge Lynda Burdelik, Federal Drug Administration (FDA).  

Charged was Judith Holloway, 34, of Watauga, Texas

According to the indictment, 2, 4-Dinitrophenol, also known as DNP, is an industrial chemical, with various uses, including in herbicides, dyes, wood preservers, and explosives. The drug is sometimes improperly, and dangerously, used as a weight loss drug, but when ingested is highly toxic to humans. Oral exposure to DNP may cause serious adverse events, including dehydration, cataracts, liver damage, and death. In 1938, the U.S. Food and Drug Administration (FDA) declared DNP to be extremely dangerous and not fit for human consumption. At that time, the FDA announced publicly that it would prosecute those who manufacture and distribute DNP for use as a drug.

According to the indictment, between October 2018 and May 2020, Holloway sold DNP to consumers throughout the United States and in a number of foreign countries and misbranded the substance as a yellow pigment powder.  Holloway purchased bulk DNP and utilized eBay and other websites to market and sell the drug over the internet. Holloway did not label the package as DNP, nor did she include any directions or warnings regarding the use of the drug when she mailed it to consumers.

United States Attorney Schneider stated, “This indictment should send a clear message to those who would profit from the sale of unapproved drugs that we will utilize every tool at our disposal to vigorously prosecute you in order to protect the health and safety of the general public. We urge everyone to refrain from ingesting DNP for any reason."

“Drugs that are produced and distributed outside of the FDA’s oversight present the possibility of harm to consumer health,” said Special Agent in Charge Lynda M. Burdelik, FDA Office of Criminal Investigations Chicago Field Office. “The FDA will continue to work to prevent the illegal sale of dangerous, unapproved drugs and will remain committed to protecting consumers from criminals who put profits above the health and safety of the U.S. public.”

This case is being prosecuted by Assistant United States Attorney Regina R. McCullough. The case was investigated by special agents of the Food and Drug Administration.

An indictment is only a charge and is not evidence of guilt.  The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

“I always enjoyed spending time with Benny.  We worked together closely on law enforcement matters to protect the families and neighborhoods of Wayne County.  Through those challenging times, Benny’s smile always brightened our days.”

DETROIT – United States Attorney Matthew Schneider announced that an agreement has been reached with the United Auto Workers Union (UAW) to resolve the office’s findings of fraud and corruption within the UAW.

Schneider was joined in the announcement by UAW International President Rory Gamble. 

Today, the United States filed an anti-corruption and anti-fraud civil lawsuit against the UAW in federal district court seeking equitable relief to bring about reform and oversight of the union.  Also today, the parties jointly filed a proposed Consent Order setting forth the terms of a settlement of the lawsuit.  Under the terms of the proposed settlement, the Court would appoint an Independent Monitor who would have the authority to exercise disciplinary powers within the UAW, to investigate possible fraud or corruption within the union, and to seek discipline against UAW officers and members before a UAW Trial Committee, or before an Independent Adjudications Officer also appointed by the Court.  The Monitor’s oversight of the union would last for six years, with a possible early termination if the Monitor were to find that his or her work is complete and the UAW no longer needs the Monitor’s services, or extension if the Monitor or the parties feel that a longer period is appropriate.  Besides the Monitor, the UAW will conduct a binding and secret-ballot referendum of its membership, overseen by the Monitor and the Department of Labor, to determine whether to change the UAW’s election method from the current delegate system to a direct election model, where the entire UAW membership could vote for the UAW President and the other members of the UAW’s International Executive Board.  Through the referendum, members would decide whether the UAW’s constitution would be changed to provide for a direct election system in the union, sometimes referred to as “one member, one vote,” starting in the 2022 election cycle.  The parties have jointly proposed the referendum so that all of the men and women of the UAW—and not the government—can decide the method to elect the union’s leaders.  The costs associated with the Monitor would be borne by the UAW.  The Monitor’s duties would not include any involvement in the collective bargaining process or the day-to-day administration of those contracts, absent any indication of corruption or fraud.  The UAW’s board would continue to oversee collective bargaining negotiations and enforcement going forward.

The proposed settlement fully and finally resolves the criminal and civil investigation of the UAW as an entity.  The UAW also agrees to resolve a tax investigation by making a payment of $1.5 million to the Internal Revenue Service in connection with administrative fees that the union received from the three joint training centers that were operated with the three car manufacturers.  In addition, the UAW has already paid back over $15 million to the training centers for improper chargebacks that the union received from two of the training centers.  This money will be used by joint programs for the health and safety of auto workers.               

The civil complaint filed today in the United States District Court for the Eastern District of Michigan was brought pursuant to the federal civil anti-corruption and anti-fraud statute (18 U.S.C. § 1345), which was designed by Congress to empower courts to intervene and provide injunctive and equitable relief to eliminate fraud in order to serve the public interest.  The civil lawsuit was not filed pursuant to the federal anti-racketeering RICO law because the investigation by the United States did not uncover any involvement by organized crime or the mafia in the operations of the UAW.  Instead, the civil complaint sets forth in detail a series of corrupt and fraudulent acts by former officers and board members of the UAW, as well as executives of Fiat Chrysler Automobiles.  The criminal investigation by the United States revealed an extensive and long-lasting effort by two former UAW presidents and their underlings to embezzle over $1.5 million in UAW money for their personal benefit through a series of fraud schemes.  The investigation also uncovered a scheme by one former UAW vice president and two other high-level UAW officers to demand and accept over $2 million in kickbacks from contractors to the joint UAW-GM training center involving multi-million dollar contracts for watches, backpacks, and jackets.  The civil complaint alleges that high-level Fiat Chrysler executives paid bribes to, and engaged in embezzlement with, two former UAW vice presidents and other UAW officials amounting to over $3.5 million.  In total, fifteen UAW officials and Fiat Chrysler executives have been convicted thus far during the criminal investigation.                  

United States Attorney Schneider said, “The men and women of the UAW deserve honest and faithful leaders dedicated to serving the best interests of the membership.  Today’s settlement provides independent oversight to investigate and eliminate corruption within the union.  It also brings real democratic change to the union by giving the membership the opportunity to decide for themselves whether to institute a direct election system.  I am truly thankful to President Rory Gamble for his good faith willingness to press for real reform within the union.”   

UAW President Rory Gamble said, “Today’s agreement builds upon the many reforms that the UAW has initiated and put in place ourselves over the past 13 months. This civil resolution brings to a close the government’s investigation and is testament to the hard work that has been done to make the necessary structural and cultural changes.

Under our current leadership, the UAW has proactively weeded out individuals who put their personal benefit over our members’ interests and who abused their positions of trust to defraud our Union and our membership. Those individuals have been charged internally and permanently expelled from the Union. 

Over the past year, the UAW’s International Executive Board has also devoted an extraordinary amount of time, attention, and resources to significantly overhauling and strengthening both our financial and ethical controls – all to ensure that no one in our Union will have the ability to repeat these misdeeds of the past.

The entire leadership of the UAW embraces the involvement of a Monitor for a period of time who will provide an extra and independent set of eyes on our Union’s financial and disciplinary processes, and provide complete assurance to our members that the reforms we have initiated take permanent root. We are committed to making the Monitor’s job a boring one, by doing everything we can to make sure there are no financial or ethical misconduct issues to monitor.

As I said upon taking office, my overriding goal is to deliver a clean, reformed and ethical union to my successor. Today’s collaborative agreement with the government ensures that we are well on our way toward achieving that goal.“

“Today’s settlement affirms the U.S. Department of Labor Office of Inspector General’s commitment to protect union workers and the financial integrity of labor organizations.  We will continue to work with our law enforcement partners to root out systemic corruption and fraud involving unions,” said Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

 “For unions to be effective, members must trust their leadership to do what is best for the entire union and not just for themselves. The 15 convictions obtained during this years-long investigation make it clear UAW leadership has been unworthy of its members’ trust for some time,” said Timothy Waters, Special Agent in Charge of the FBI in Michigan. “This agreement is a result of the hard work done by the FBI, IRS, Department of Labor, and the US Attorney’s Office to investigate and prosecute the leaders who were engaged in corruption at the UAW. We remain proud of that work and hope the steps announced today will create a union worthy of the hard working men and women of the UAW.”

“Today marks a new beginning for the UAW and its members,” said Sarah Kull, Special Agent in Charge of the Internal Revenue Service – Criminal Investigation’s Detroit Field Office. “The UAW’s willingness to accept oversight confirms its commitment to eliminate systemic corruption within the union and regain the trust of its members.” 

“Rarely since widespread corruption among the labor movement led to multiple Congressional investigations, numerous indictments and convictions, and strict new federal laws, have there been so many indications of widespread embezzlement, kickbacks, extortion, and graft.  I am pleased that the Office of Labor-Management Standards was able to help bring an end to this exploitation of hardworking union members,” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards.  “The Office of Labor-Management Standards stands ready to assist the Monitor and the Adjudications Officer in carrying out their duties and to help usher the UAW forward into this new chapter.”

The fifteen individuals convicted of fraud and corruption crimes include former UAW Vice President Joseph Ashton (30 months in prison)  former FCA Vice President for Employee Relations Alphons Iacobelli (66 months in prison), former FCA Financial Analyst Jerome Durden (15 months in prison), former Director of FCA’s Employee Relations Department Michael Brown (12 months in prison), former senior UAW officials Virdell King (60 days in prison), Keith Mickens (12 months in prison), Nancy A. Johnson (12 months in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (18 months in prison), former UAW Vice President Norwood Jewell (15 months in prison), and former senior UAW official Michael Grimes (28 months). In addition, the following UAW officials have pleaded guilty and are awaiting sentencing: former UAW President Gary Jones, former senior UAW official Jeffrey Pietrzyk, former UAW Region 5 Director and UAW Board member Vance Pearson, former UAW Midwest CAP President Edward “Nick” Robinson, and former UAW President Dennis Williams.

U.S. Attorney Schneider commended the outstanding work of the Internal Revenue Service – Criminal Investigations, the U.S. Department of Labor – Office of Labor-Management Standards and Office of Inspector General, and the Federal Bureau of Investigation in conducting a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.

Mae Ava Carse Properties, LLC, PHP Property Managers, LLC, Claude E. Phillips Properties, LLC, and Deborah J. Payne (Defendants) have agreed to pay the United States $150,000 to resolve allegations that they violated the False Claims Act, 31 U.S.C. §§ 3729-3733, by knowingly and unlawfully collecting excess rent from certain tenants participating in the U.S. Department of Housing and Urban Development’s (HUD) federal Housing Choice Voucher Program, commonly referred to as “Section 8,” which is a program for assisting low-income families, the elderly and the disabled in securing decent, safe, and sanitary housing in the private market. Through this program, HUD provides funding through vouchers that are administered by local public housing agencies. HUD pays the housing subsidy, which may cover all or a portion of a tenant’s monthly rent, directly to the landlord. As a condition for receiving the housing subsidy, the landlord contractually agrees not to charge the Section 8 tenant rent in excess of the amount set by the public housing agency.

Defendants leased property to certain tenants participating in the Section 8 program. This settlement resolves allegations that from 2013 to 2018, Defendants violated the False Claims Act by knowingly requiring certain Section 8 tenants to pay rent that exceeded what was contractually allowed. 

United States Attorney Matthew Schneider stated, “The Justice Department is committed to tracking down unscrupulous landlords who take advantage of low-income renters.  We do this by protecting renters who benefit from the federal Housing Choice Voucher Program.  We bring these cases to come to the defense of Michiganders who need affordable quality housing.”

The settlement resolves allegations contained in a lawsuit filed by a former tenant under the qui tam, or whistleblower, provisions of the False Claims Act. The whistleblower was represented by the University of Michigan Clinical Law Program. The False Claims Act permits private parties to file suit on behalf of the United States and to share in any recovery. 

The matter was handled by Assistant United States Attorney John Postulka from the U.S. Attorney’s Office for the Eastern District of Michigan. The qui tam case is docketed as United States ex rel. Willis v. Mae Ava Carse Properties, LLC, et al. Case No. 19-cv-12486 (E.D. Mich.). The claims resolved by the settlement are allegations only; there has been no determination of liability.

A doctor who has practiced in Troy, Detroit and elsewhere in Southeast Michigan, pleaded guilty today to one count of unlawfully distributing the prescription drugs hydrocodone and valium, announced United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Special Agent in Charge Keith Martin, U.S. Drug Enforcement Administration in Detroit.

Pleading guilty was Dr. Salvatore Cavaliere, 57.  The guilty plea was entered before United States District Judge George Caram Steeh.

According to the plea agreement, Cavaliere admitted to unlawfully distributing the Schedule II controlled substance hydrocodone (Vicodin).  In entering his guilty plea, the defendant admitted that for several years, up until approximately August of 2015, he sold hydrocodone in amounts of up to 2,000 dosage units at a time. He also sold diazepam (Valium) in amounts of up to 600 dosage units per month. Approximately 36,000 dosage units of hydrocodone and 6,000 dosage units of diazepam (a schedule IV controlled substance) were involved in this pattern of illegal conduct. 

The defendant faces a maximum term of 24 months’ imprisonment, which is the maximum sentence under the federal sentencing guidelines for this offense.  The actual sentence imposed will be determined by the judge at sentencing. 

The Drug Enforcement Administration previously revoked the defendant’s DEA registration based on this conduct, and the defendant is therefore unable to purchase or prescribe controlled substances. 

Cavaliere has also agreed to pay the United States $150,000 as part of a civil settlement resolving allegations that he violated certain provisions of the Controlled Substances Act.

This case was investigated by the United States Drug Enforcement Administration, under the supervision of the U.S. Attorney’s Office for the Eastern District of Michigan. 

A Macomb Township resident pleaded guilty today to a scheme to fraudulently obtain approximately $931,000 from the Paycheck Protection Program, United States Attorney Matthew Schneider announced today.

Joining Schneider in the announcement were Special Agent in Charge John Crawford of the Federal Deposit Insurance Corporation Office of Inspector General, Special Agent in Charge Douglas Zloto of the United States Secret Service, and Special Agent in Charge Sharon Johnson of the United States Small Business Administration Office of Inspector General.

Michael Bischoff, 60, of Macomb Township, Michigan, pleaded guilty to one count of bank fraud arising from his effort to obtain some $931,000 by defrauding several financial institutions regarding loans from the Paycheck Protection Program.

According to the plea documents, Bischoff owned a number of pizza restaurants in Macomb County, Michigan, which operated through various corporate entities he controlled (the Bischoff entities). The plea documents further state that Bischoff applied for at least nine loans on behalf of the Bischoff entities under the Paycheck Protection Program (PPP). The PPP is a program overseen by the Small Business Administration designed to provide forgivable loans to small businesses affected by the coronavirus pandemic. Applicants for PPP loans apply directly to banks or financial institutions participating in the program; in those applications, applicants make affirmative certifications about, among other things, their average monthly payroll expenses and number of employees. Applicants also certify their intent to spend PPP proceeds on permissible business expenses, such as payroll costs, rent, utilities, and interest on mortgages. PPP loans may be entirely forgiven if the recipient spends the loan proceeds on these permissible expenses within a designated period of time after receiving the proceeds.   

According to the plea documents, at least nine of Bischoff’s PPP applications contained false and fraudulent representations to the participating lenders. All of the applications included false representations about the amount of payroll and number of employees working at the Bischoff entities. A number of the applications also included false documentation, purportedly from the IRS, to support the misrepresentations about payroll expenses at those entities. In other applications, Bischoff fraudulently used another person’s personal identifying information to secure approval for the loans.   

In all, Bischoff sought approximately $931,772 in proceeds from the PPP. Bischoff actually received approximately $593,590 from PPP lenders as a result of his fraudulent loan applications.

“The pandemic has had a major economic impact on our community, and the Paycheck Protection Program is a critical lifeline for Michigan’s small businesses during this challenging time,” stated United States Attorney Schneider. “Fraud in this program takes dollars away from needy businesses and puts them into the hands of crooks and thieves.  This is a serious crime, and my office is committed to finding anyone guilty of defrauding this program and prosecuting them quickly and aggressively.”

“Agents from the FDIC, SBA and US Secret Service - Detroit Field Office partnered together with the United States Attorney’s Office to investigate a local business owner, who took advantage of the global pandemic to enrich himself with COVID Relief disaster funds,” stated SAC Zloto. “Mr. Bischoff engaged is multiple instances of Payroll Protection Plan loan fraud, which was intended to help honest business owners weather these troubled times.”

A sentencing date has been set for March 22, 2021 at 2:30pm before United States District Judge Paul D. Borman.

The case is being prosecuted by Assistant United States Attorney John K. Neal of the Eastern District of Michigan, Trial Attorney Philip B. Trout of the U.S. Department of Justice’s Criminal Division, Fraud Section, and Trial Attorney Chad M. Davis of the U.S. Department of Justice’s Criminal Division, Money Laundering and Asset Recovery Section. The investigation is being conducted jointly by the Federal Deposit Insurance Corporation Office of Inspector General, the United States Secret Service and the Small Business Administration Office of Inspector General. 

A psychologist and medical doctor were charged in a criminal complaint for their alleged role in a scheme to create fake medical diagnoses to help immigrants fraudulently obtain their U.S. citizenship, announced United States Attorney Matthew Schneider.

Joining in the announcement were Acting Special Agent in Charge David G. Nanz, Federal Bureau of Investigation (FBI), Associate Director of Field Operations Directorate Daniel Renaud, United States Citizenship and Immigration Services (USCIS) and Director of Field Operations Christopher Perry, United States Customs and Border Protection (CBP).

Charged were psychologist Firoza VanHorn, 70, of Bloomfield Hills, Michigan and medical doctor Muhammad Awaisi, 61, of Pontiac, Michigan.

Schneider stated, “The allegations in this case are truly outrageous and are a disservice to every immigrant who comes to America and becomes a citizen the right and honest way.” 

"As Americans we look for those individuals seeking to become our fellow citizens to respect and follow the laws of our country. We expect them to accept and respect our system of government and our naturalization process.  And we expect everyone involved in the naturalization process to demonstrate the same good moral character required of immigrants applying to be U.S. citizens," said Nanz.  "The conduct alleged in this complaint, if proven, demonstrates those involved showed contempt for the naturalization process and our laws."

Renaud stated, “The collaborative efforts of multiple departments and agencies on this investigation sends a clear message of our joint dedication to track down and hold accountable any who would seek to abuse our immigration system. In this situation, allegations of medical professionals dishonoring their positions of power to undermine our immigration system are especially despicable and are a slap in the face to those immigrants seeking relief through the disability exception process who truly need it.”

Perry stated, “Medical professionals are in a position of trust, profiting off of fake medical diagnoses to help others fraudulently obtain citizenship is a betrayal of that trust. U.S. Customs and Border Protection takes these allegations seriously and will aggressively pursue those bad actors who attempt to financially benefit off of such fraudulent activities.”

According to the complaint, immigrants seeking to become naturalized U.S. citizens must first successfully demonstrate the ability to read, write and use the English language, and demonstrate a knowledge of United States history and government. These requirements, however, can be waived for immigrants who can prove that they are not able to meet the requirements because of physical or mental disabilities. The complaint alleges that Van Horn and Awaisi helped immigrants fraudulently obtain these waivers, and hence fraudulently obtain U.S. citizenship, by diagnosing the immigrants with medical conditions they did not have, documenting tests that were never performed on the immigrants, and prescribing medically unnecessary medication. Van Horn typically received $500 each time she created the fake diagnosis and medical records. According to records from the United States Citizenship and Immigration Services, Van Horn assisted 1,249 immigrants file requests for such waivers over the past four years alone.

For example, the complaint alleges that a witness met with Van Horn at Van Horn’s office.  Van Horn asked how the witness was feeling, along with other basic questions a doctor typically asks a patient.  The witness explained that the witness had previously been in a car accident.  The complaint alleges that Van Horn then wrote a report diagnosing the witness with Chronic Post Traumatic Stress Disorder caused by the witness being in a car accident, being held captive and assaulted by Sunni terrorists, being bombed, being jailed for a year by Saddam Hussein, being shot at a bus stop with friends, and the witness being the lone survivor.   

The complaint further alleges that, as part of this conspiracy, Awaisi prescribed opioid painkillers to a patient, even though the patient was not in pain and did not tell Awaisi the patient was in pain. 

A complaint is only a charge and is not evidence of guilt.  Trial cannot be held on felony charges in a complaint.  When the investigation is completed a determination will be made whether to seek a felony indictment.

The case is being prosecuted by Assistant United States Attorney Jonathan Goulding. The investigation is being conducted jointly by the FBI, USCIS and CBP.

Joseph Ashton, former Vice President of the UAW’s General Motors Department, was sentenced today to 30 months in federal prison for conspiring with other UAW officials to engage in honest services fraud by taking $250,000 in bribes and kickbacks from a UAW vendor and for conspiring to launder the proceeds of the scheme announced U.S. Attorney Matthew Schneider.

Joining in the announcement were Irene Lindow, Special Agent in Charge of the Chicago Region for the U.S. Department of Labor – Office of Inspector General, Acting Special Agent in Charge David G. Nanz,  Detroit, Michigan office of the Federal Bureau of Investigation, Sarah Kull, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, and Thomas Murray, District Director, U.S. Department of Labor – Office of Labor-Management Standards.

In December 2019, Joseph Ashton, 72, of Ocean View, NJ, pleaded guilty to conspiring with two other high-level UAW officials—Michael Grimes and Jeffrey Pietrzyk—to take hundreds of thousands of dollars in bribes and kickbacks from vendors doing business with the joint UAW-GM Center for Human Resources (CHR). Grimes and Pietryzk have also pleaded guilty. Grimes was sentenced to 28 months in prison and Pietrzyk is awaiting sentencing.

The CHR is supposed to be a center for training UAW workers employed by GM.  Ashton was the co-director of the Center for Human Resources. Ashton, Pietrzyk and Grimes also served on the Executive Board for the Center for Human Resources and they were responsible for approving contracts with the vendors. Ashton admitted that over the course of the conspiracy, he and the other two UAW officials demanded and accepted bribes and kickbacks from a vendor based in Philadelphia, PA, in exchange for securing or maintaining a contract to provide custom watches to the Center for Human Resources.

Ashton and his UAW co-conspirators demanded kickbacks on the $3.9 million contract for the Center for Human Resources to buy 58,000 watches for all UAW members employed by GM. Ashton demanded over $250,000 in kickbacks on the watch contract to be distributed between 2013 through 2016. Some of the kickbacks were distributed in the form of checks payable to Ashton which were deposited into his personal bank account. The majority of the kickbacks were distributed as cash.  In 2014, the UAW-GM Center for Human Resources received the 58,000 watches from the vendor.  However, the watches were never distributed to UAW members.  Instead, the watches were left sitting in a storage room at the CHR for over five years.                    

Besides conspiring with other UAW officials and vendors to the UAW, Ashton also admitted that he conspired to launder the proceeds of the kickback scheme by using various methods to conceal and disguise the bribes and kickbacks through a lengthy and complicated series of financial transactions.  

Ashton is one of 15 defendants convicted in connection with the ongoing criminal investigation into illegal payoffs to UAW officials by FCA executives and corruption within the UAW itself. The following individuals have already pleaded guilty to their participation in the scheme and have been sentenced:  former FCA Vice President for Employee Relations Alphons Iacobelli (66 months in prison), former FCA Financial Analyst Jerome Durden (15 months in prison), former Director of FCA’s Employee Relations Department Michael Brown (12 months in prison), former senior UAW officials Virdell King (60 days in prison), Keith Mickens (12 months in prison), Nancy A. Johnson (12 months in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (18 months in prison), former UAW Vice President Norwood Jewell (15 months in prison), and former senior UAW official Michael Grimes (28 months). In addition, the following UAW officials have pleaded guilty and are awaiting sentencing: former UAW President Gary Jones, former senior UAW official Jeffrey “Paycheck” Pietrzyk, former UAW Region 5 Director and UAW Board member Vance Pearson, former UAW Midwest CAP President Edward “Nick” Robinson, and former UAW President Dennis Williams.

U.S. Attorney Schneider commended the outstanding work of the Internal Revenue Service – Criminal Investigations, the U.S. Department of Labor – Office of Labor-Management Standards and Office of Inspector General, and the Federal Bureau of Investigation in conducting a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.

“Joseph Ashton illegally used his power and influence to benefit himself, and he caused long-lasting damage to the hardworking members of the UAW.  Ashton wasted almost $4 million that could have been used to train UAW members, and his crimes led to the closing of the UAW-GM training center and the loss of many training center jobs.  Ashton’s greed caused irreparable damage to the trust UAW members have in their leaders who are supposed to represent their best interests,” stated U.S. Attorney Schneider.

“Joseph Ashton abused his position with the International United Auto Workers Union (UAW) by demanding and accepting over $250,000 in kickbacks from a UAW vendor. Instead of bargaining in the best interests of the UAW members, he chose to personally enrich himself. We will continue to work with our law enforcement partners to protect the financial integrity of labor organizations,” stated Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

“The men and women of the UAW deserve real, honest leadership. It is clear Mr. Ashton’s priority was not to advocate for union members but to line his own pockets,” said Acting SAC David G. Nanz. “The FBI will continue to work with our law enforcement partners to investigate corruption and ensure the financial integrity of our country’s labor unions.”

“It is imperative that UAW leadership continues to be held accountable for their selfish acts of greed,” stated Sarah Kull, Special Agent in Charge of IRS-Criminal Investigation in Detroit.  “Today’s sentence is another step forward in our efforts to rid the UAW of corrupt leaders who abuse their positions to line their own pockets and tarnish the reputation of UAW officials.”

 “Joseph Ashton is another in a long line of UAW officials that failed in his fiduciary duties and betrayed the trust of the UAW membership by using his union position to obtain bribes and kickbacks from vendors in excess of $250,000 so that he could enrich himself and others within the UAW,” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards.  “Today's sentence leaves no question as to the agency’s commitment to seek justice when anyone puts personal financial gain ahead of the best interests of their fellow union members.”

The case is being prosecuted by Assistant U.S. Attorneys Frances Carlson and Eaton Brown.

A Macomb Township resident was charged in a Criminal Information for his alleged role in a scheme to fraudulently obtain approximately $931,000 from the Paycheck Protection Program, United States Attorney Matthew Schneider announced today.

Joining Schneider in the announcement were Special Agent in Charge John Crawford of the Federal Deposit Insurance Corporation Office of Inspector General, Special Agent in Charge Douglas Zlotto of the United States Secret Service, and Special Agent in Charge Sharon Johnson of the United States Small Business Administration Office of Inspector General.

The Information charges Michael Bischoff, 60, of Macomb Township, Michigan, with one count of Bank Fraud.

According to the Information, Bischoff owned a number of pizza restaurants in Macomb County, Michigan, which operated through various corporate entities Bischoff controlled (the Bischoff entities). The Information alleges that Bischoff applied for at least nine loans on behalf of the Bischoff entities under the Paycheck Protection Program (PPP). The PPP is a program overseen by the Small Business Administration designed to provide forgivable loans to small businesses affected by the coronavirus pandemic. Applicants for PPP loans apply directly to banks or financial institutions participating in the program; in those applications, applicants make affirmative certifications about, among other things, their average monthly payroll expenses and number of employees. Applicants also certify their intent to spend PPP proceeds on permissible business expenses, such as payroll costs, rent, utilities, and interest on mortgages. PPP loans may be entirely forgiven if the recipient spends the loan proceeds on these permissible expenses within a designated period of time after receiving the proceeds.   

The Information alleges that at least nine of Bischoff’s PPP applications contained false and fraudulent representations to the participating lenders. All of the applications included false representations about the amount of payroll and number of employees working at the Bischoff entities. A number of the applications also included false documentation, purportedly from the IRS, to support the misrepresentations about payroll expenses at those entities. In other applications, Bischoff is alleged to have fraudulently used another person’s personal identifying information to secure approval for the loans.   

In all, the Information alleges that, in his false and fraudulent loan applications,  Bischoff sought approximately $931,772 in proceeds from the PPP. Bischoff is alleged to have actually received approximately $593,590 from PPP lenders as a result of his fraudulent loan applications.

An Information is only a charge and is not evidence of guilt.

The case is being prosecuted by Assistant United States Attorney John K. Neal of the Eastern District of Michigan, Trial Attorney Philip B. Trout of the U.S. Department of Justice’s Criminal Division, Fraud Section, and Trial Attorney Chad M. Davis of the U.S. Department of Justice’s Criminal Division, Money Laundering and Asset Recovery Section. The investigation is being conducted jointly by the Federal Deposit Insurance Corporation Office of Inspector General, the United States Secret Service and the Small Business Administration Office of Inspector General. 

DETROIT – An indictment was unsealed today charging a former University of Michigan professor with two counts of transporting a minor girl across state lines with the intent to engage in sexual conduct, announced United States Attorney Matthew Schneider. 

Schneider was joined in the announcement by Special Agent in Charge Vance Callender, Homeland Security Investigations (HSI).

Charged was Stephen Shipps, 67, of Ann Arbor, Michigan.  Shipps was arrested this morning and will be appearing in federal court for his arraignment via Zoom at 1pm today.

From 1989 to 2019, Shipps was employed by the University of Michigan School of Music, Theatre, and Dance as a violin professor. Shipps was also the director of the Strings Preparatory Program, which offered instruction to young musicians ranging from elementary school through high school-age. Shipps retired from the University of Michigan in February 2019.  In addition, Shipps served on the faculties of Indiana University, the North Carolina School of the Arts, the University of Nebraska – Omaha, and the Banff Centre in Canada.  He also taught students at summer music programs in the Czech Republic, Germany, and the United Kingdom. 

The indictment alleges that in February and March of 2002, as well as in June and July of 2002, Shipps knowingly transported a young girl, who was under 18 years old, across state lines, and Shipps intended to engage in sexual activity with her.

“We are committed to the safety and well-being of the most vulnerable members of our society – our children,” stated United States Attorney Matthew Schneider.  “For over 20 years, Stephen Shipps had close interactions with many young girls who were gifted musicians.  Shipps met with these young girls both inside and outside of the State of Michigan. Our determination and commitment to seeking justice for victims has no time limit.”

“Thanks to the bravery of Shipps’ alleged victims and painstaking investigative work by HSI, this disgraced professor is being held accountable for coercing vulnerable young women into sex, in some cases in the distant past,” said Vance Callender, HSI Special Agent in Charge of Michigan and Ohio.  “This case underscores HSI’s commitment to pursue sexual predators and bring some measure of justice to the victims.”

If convicted of both counts, Shipps faces a statutory maximum penalty of 15 years in federal prison.

An indictment is merely a charge and is not evidence of guilt.  The defendant in this case is presumed innocent.  The burden is on the government to prove guilt beyond a reasonable doubt. 

This case is being investigated by agents of HSI with the assistance of the University of Michigan Police Department.  Assistant U.S. Attorney Sara Woodward is prosecuting this case.

The investigation into this case is ongoing.  We are asking for the public’s help to fully investigate this case.  Anyone with any additional information about alleged crimes committed by Stephen Shipps is asked to call the Tip Line that has been set up by the Department of Homeland Security.  That number is 866-DHS-TIPS.(866-347-2423).  Tips can also be emailed to HSI-Shipps-Investigation@ice.dhs.gov

To hear prepared remarks from United States Attorney Matthew Schneider and Special Agent in Charge Vance Callender visit: https://www.youtube.com/watch?v=9XMksx75J9M&feature=youtu.be

A woman formerly employed by an Ann Arbor, Michigan, health care consultancy was sentenced to 65 months in prison for defrauding employers of over $2.2 million and evading more than $697,000 in taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew J. Schneider for the Eastern District of Michigan.

According to documents and information provided to the court, Sonja Emery, using several aliases including “Sonja Lee Robinson,” “Sonjalee Emery-Robinson,” and “Sonjalee Emery,” resided in Georgia, New Jersey, New York, and California. From 2011 through 2018, Emery falsely represented her professional status, educational background, and work experience to secure and maintain highly paid consulting positions in the health-care industry. She falsely claimed to be a Registered Nurse licensed in New York, Georgia, Connecticut, and California, and provided employers with licensure numbers that belonged to other people. In fact, she never was a Registered Nurse. Emery also falsely told employers she had a Bachelor of Science in Nursing, a Master’s degree in Health Administration, a Master’s degree in Business Administration, and a Doctor of Philosophy degree from Emory and New York Universities, but Emery never attended those schools or received such degrees.

Using these false representations, from 2011 through 2018, Emery secured high-level health-care positions. She worked as a senior vice president for an Ann Arbor, Michigan, healthcare consulting firm earning an annual salary of approximately $285,000; as a consultant for a community health system in Wisconsin earning approximately $267,000; and as a health care consultant for a Massachusetts company that paid her approximately $226,000. From 2015 until her arrest in May of 2018, Emery worked as a senior executive for a county government health services agency in California that paid her a total of approximately $960,000.

During these years, Emery either did not file or late-filed tax returns, despite owing more than $400,000 in taxes. She sought to avoid being detected by providing employers with different names and false social security numbers, by falsely instructing employers that she was “exempt” from taxes, and by supplying an employer with an identification number that did not belong to her.

On Feb. 18, 2020, Emery pleaded guilty to mail fraud and tax evasion.

In addition to the term of imprisonment, U.S. District Linda V. Parker ordered Emery to serve three years of supervised release and to pay approximately $2.2 million in restitution to the employer victims and $697,000 in restitution to the United States.

Principal Deputy Assistant Attorney General Zuckerman, U.S. Attorney Schneider, Treasury Inspector General for Tax Administration (TIGTA) Special Agent in Charge William A. Kalb, and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Sarah Kull thanked special agents of TIGTA and IRS-CI, who investigated the case, and Trial Attorneys Jack Morgan and Jeffrey McLellan of the Tax Division, who prosecuted the case.

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

A Farmington Hills man has been indicted and charged with defrauding the Michigan Unemployment Insurance Agency, defrauding credit card companies, and stealing the identities of local residents, United States Attorney Matthew Schneider announced today.

Joining in the announcement were Acting Inspector in Charge Bryan Musgrove, United States Postal Inspection Service, Special-Agent in Charge Andre Martin, United Postal Service – Office of Inspector General and  Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor,  Office of Inspector General.

“The allegations here include some of the most egregious, brazen abuses of the unemployment fraud system we’ve seen this year,” stated United States Attorney Matthew Schneider.  “While thousands of people in Michigan have lost their jobs and are struggling to put food on the table, con artists are stealing unemployment money away from them.  We plan to follow the money trail and seek justice in all of these cases.”

Special Agent-in-Charge Andre Martin, Great Lakes Area Field Office, U.S. Postal Service Office of Inspector General said, “Today’s charges represent our commitment to work with our law enforcement partners to maintain the integrity and trust in the U.S. Mail. The USPS OIG, along with the U.S. Attorney's Office, remain committed to safeguarding the integrity of the U.S. Mail and ensuring the accountability and integrity of U.S. Postal Service employees.”

Acting Inspector in Charge Bryan Musgrove stated, “U.S. Postal Inspectors are federal law enforcement agents who conduct investigations of postal-related crime, including any fraud in which the postal system is used, in an effort to ensure America’s confidence in the U.S. Mail. Investigating violations of more than 200 federal laws, the Postal Inspection Service seeks to enforce these statutes to the maximum extent possible against those aiming, as in this case, to utilize the U.S. Mail in furtherance of illicit activities and criminal schemes.”

“An important mission of the Office of Inspector General is to investigate allegations of fraud related to unemployment insurance benefit programs. We will continue to work with our law enforcement partners to protect the integrity of unemployment insurance benefit programs," stated Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

Charged is Andre Taylor Jr., 27. The indictment charges Taylor Jr. with four counts of mail fraud, three counts of wire fraud, and three counts of aggravated identity theft.

According to the indictment, Taylor Jr. concocted a scheme to defraud the unemployment insurance agencies of Michigan, Pennsylvania, and other states beginning in approximately April, 2020. Taylor Jr. began his scheme shortly after the passage of the Federal Pandemic Unemployment Compensation program, which allowed eligible unemployment insurance claimants to receive an additional $600 in federal benefits per week. Taylor Jr. is alleged to have filed unemployment insurance claims to Michigan and other states in the names of various individuals without those individual’s approval or authorization. To capture the fraudulently obtained unemployment insurance benefits, Taylor Jr. generally arranged for the State Unemployment Insurance Agencies to send prepaid debit cards containing the unemployment benefits to addresses Taylor controlled.

In some instances, the prepaid debit cards were mailed to addresses associated with Taylor Jr. or his family members. In other instances, the prepaid debit cards were sent to addresses along postal routes known to Taylor Jr. Taylor Jr. would allegedly direct letter carriers along these routes to secure the mailings containing the prepaid debit cards associated with UI claims. The letter carriers would then provide Defendant with these mailings in exchange for cash bribes.  

Taylor’s alleged bribes to letter carriers extended beyond securing fraudulently obtained debit cards containing unemployment insurance benefits. The indictment alleges that Taylor also paid the letter carriers to obtain credit and debit cards in the names of individuals who lived along the route. Taylor is alleged to have used these credit and debit cards at local retailers such as Meijer and Kroger to obtain gift cards and other goods.

An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.

The case is being prosecuted by Assistant United States Attorney John K. Neal. The investigation is being conducted jointly by the United States Postal Inspection Service, the United States Postal Service Office of Inspector General, and the United States Department of Labor, Office of Inspector General. The United States Attorney’s Office would also like to thank the Michigan State Police-Investigative Support Section and the Lathrup Village Police Department for their assistance in this investigation.

A couple from Detroit was charged today with participating in a multi-million dollar unemployment insurance fraud scheme aimed at defrauding the State of Michigan and the U.S. Government of funds earmarked for unemployment assistance during the COVID19 pandemic, announced United States Attorney Matthew Schneider.

Joining in the announcement were  Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General, Special Agent in Charge Douglas J. Zloto, US Secret Service, Acting Special Agent in Charge Felicia George, US Postal Inspection Service,  Special Agent in Charge Steven M. D’Antuono, Federal Bureau of Investigation, Special Agent in Charge Sarah Kull, Internal Revenue Service-Criminal Investigation and Jeffrey Frost, Special Fraud Advisor, Michigan Dept. of Labor and Economic Opportunity, Unemployment Insurance Agency.

Charged are Johnny Richardson, 25, and Micahia Taylor, 27.

According to the complaints, Richardson and Taylor conspired with Brandi Hawkins—a former contract employee for the State of Michigan Unemployment Insurance Agency charged in a criminal complaint this past July—to fraudulently release over $2.5 million in government money that was intended to support individuals who lost their jobs during the COVID-19 pandemic.

It is alleged that Richardson and Taylor, either themselves or through others, filed fraudulent unemployment claims over the Internet.  Richardson and Taylor then provided Hawkins information on these claims, and Hawkins subsequently used her insider access to fraudulently release payment.  Hawkins actions resulted in the fraudulent disbursement of over $2,000,000 of federal and state funds intended for unemployment assistance during the pandemic. 

A complaint is only a charge and is not evidence of guilt.  Trial cannot be held on felony charges in a complaint.  When the investigation is completed a determination will be made whether to seek a felony indictment.

The case is being prosecuted by Assistant United States Attorney Timothy Wyse. The investigation is being conducted jointly by the Department of Labor, Office of Inspector General, United States Secret Service, Internal Revenue Service - Criminal Investigation, Federal Bureau of Investigation, the U.S. Postal Inspection Service and the Unemployment Insurance Agency, Michigan Department of Labor and Economic Opportunity

A federal indictment was unsealed today charging seven members of the It’s Just Us (IJU) street gang with various crimes including RICO conspiracy and conspiracy to distribute and possess with the intent to distribute controlled substances, announced United States Attorney Matthew Schneider. 

Schneider was joined in the announcement by David G. Nanz, Acting Special Agent in Charge of the FBI in Michigan and Chief James Craig, Detroit Police Department.

“Our message to violent drug-dealing gang members could not be more clear: our federal and state law enforcement team knows exactly who you are, and we are coming after you,” stated United States Attorney Matthew Schneider.  “Today, our neighborhoods are safer because these violent gang members are off our streets.”

Charged were:

Duane Peterson, 35, Dionne Peterson, 34, Deshawn Peterson, 30, Dayquan Johnson, 23, James Davis, 26, Melvin Brown, 21, and  Luther Peterson, 26.  All are from Detroit.

The indictment alleges a series of racketeering acts including murder and narcotics trafficking allegedly committed by IJU members at the direction of the Duane Peterson.  The indictment details the illegal activities of IJU whose territory extended from Detroit to West Virginia, as well as in Flint, and Jackson, Michigan.  In Detroit, IJU operated primarily on the eastside of Detroit.  The indictment alleges that IJU maintained drug and gun stash houses, and sold drugs in this area. IJU members also claimed certain bars and restaurants as their own.  Patrons and owners recognized IJU members and gave them the privilege of carrying firearms inside the business and remaining at the business after hours.  The indictment also describes how the gang allegedly generated money through the sale of illegal narcotics and used the proceeds to enrich its members and to purchase more drugs.

The indictment caps numerous law enforcement actions over several years involving this gang.  Since 2018, FBI agents and other law enforcement officers including members of the Detroit Police Department, have worked collaboratively to bring individual members of IJU to justice. 

Earlier this month, an indictment charging twelve Detroit men with trafficking in controlled substances and other related charges was unsealed.  That indictment charged the following individuals:

Demarco Johnson, 30, Maurice Johnson, 45, Gary Johnson, 35, Janard Thomas, 39, Carlouse Johnson, 48, Lanardo Johnson, 45, Dominique Jackson, 28, Michael Thomas, 43, Deantez Johnson, 35, Ricky Poole, 46, Martin Battiste, 47, Marquan Moses, 25

According to this indictment, from 2015 to approximately September 2020, the defendants conspired to distribute controlled substances, including heroin, fentanyl, cocaine and cocaine base, also known as “crack”, in the Eastern District of Michigan.  The indictment also charges specific distributions of controlled substances, and other related charges. The indictment alleges that the defendants and others have utilized residences in Detroit to store, conceal, and distribute controlled substances as well as the proceeds of such drug trafficking.  In addition, the indictment alleges that the defendants utilized automobiles and telecommunication facilities to facilitate their drug trafficking. The indictment also alleges that as part of the conspiracy the defendants possessed firearms to protect their controlled substances and used and threatened the use of physical violence in an effort to maintain and protect their drug trafficking activities. 

Over 50 search warrants were executed during the course of this investigation.         

An indictment is only a charge and is not evidence of guilt.  The defendants are entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.

DETROIT – United States Attorney Matthew Schneider announced today that Assistant United States Attorney (AUSA) Dawn Ison will lead the efforts of the United States Attorney’s Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 3, 2020, general election. 

AUSA Ison has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Michigan, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights concerns in consultation with Justice Department Headquarters in Washington.

Ison will work alongside Assistant United States Attorney Michael Martin, who serves as Chief of the office’s National Security Unit, and Susan DeClercq, the Chief of the office’s Civil Rights Division.       

United States Attorney Schneider said, “For over a year, our office has significantly increased our focus on making sure the election is safe and secure.  We are on the lookout for both local intimidation of voters and foreign interference in our election.  Every Michigan citizen must be able to vote without interference or discrimination, and Michiganders have the right to have their votes counted and not stolen.”

The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur.  The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open through election day.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them.  For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law.  Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or illiteracy).

The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice.  In order to respond to complaints of election fraud or voting rights concerns during the voting period that ends on November 3, 2020, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Schneider stated that AUSA/DEO Ison will be on duty in this District while the polls are open.  She can be reached by the public at the following telephone number: (313) 226-9567.

In addition, the FBI will have Special Agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day.  The local FBI field office can be reached by the public at (313) 965-2323.

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/ .

Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities.  State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.

###

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
 

                                                                     ###

DETROIT – Every year the Department of Justice observes National Domestic Violence Awareness Month.  Commemorated in the United States since 1987, National Domestic Violence Awareness Month educates the public, recognizes and honors victims and survivors, and connects service providers across the country. 

“Domestic violence is a crime that effects every community, regardless of age, economic status, race, religion or nationality,” stated United States Attorney Matthew Schneider.  “The heavy emotional toll that domestic violence takes on a person can last a lifetime.  We are committed to using the tools available to ensure that offenders are held accountable and prosecuted to the fullest extent of the law.”

The Department of Justice and the United States Attorney’s Office are working on several fronts to prevent domestic violence and bring those perpetrators to justice.  One way is through the use of a federal statute that prohibits individuals with domestic violence misdemeanor and felony convictions, as well as individuals subject to domestic violence protective orders, from possessing firearms.  The Department as a whole charged more than 500 cases last year. However, in some states such as Michigan, the federal and state definitions of domestic violence differ requiring complex legal analysis that varies based on location of the conviction.  Even with limited prosecutorial authority in domestic violence cases, the federal government remains committed to working with all of its partners to end the scourge of domestic violence. One way is by violating individuals who are on federal supervised release when they are accused of domestic violence in the state. 

Some examples of these cases are:

• Derrell Hayes, a convicted felon, was on federal supervised release for illegally possessing a firearm.  While on supervised release, Hayes fled the state of Michigan and was found in Texas where he had been arrested for abusing the pregnant mother of his child.  Hayes was convicted of domestic abuse in Texas.  Following his conviction, he was subsequently sentenced to 24 months’ imprisonment to be served consecutive to his Texas sentence for violating the terms of his supervised release.

• Mohammed Karkash was on federal supervised release after being convicted of conspiracy to commit kidnapping.  While on supervised release, two different women made domestic abuse claims against him.  In both cases, the women were in intimate relationships with Karkash.  In both cases, Karkash violated the “no contact” orders that were issued by the courts to protect the victims in the cases.  Karkash admitted to physically assaulting his then-girlfriend and was sentenced to 21 months’ imprisonment for the supervised release violation.

• Michael Browder, a convicted felon, was on supervised release after having served 72 months’ in federal prison for being a felon in possession of a firearm. Prior to his federal conviction, Browder had twelve state felony convictions for various crimes including: pistol whipping a man and assaulting his children’s mother.  Twelve days following his release from federal custody in April 2019, his girlfriend flagged down a patrol car to report that Browder assaulted her. At his 2019 supervised release violation hearing, his girlfriend recanted her allegations and the court continued Browder’s supervision.  In February 2020, Michigan State Police responded to multiple 911 calls reporting the on-going assault of a woman in a vehicle by her male passenger. When MSP located the car, they learned from witnesses that Browder had assaulted the same woman who recanted the 2019 allegations. After a hearing on the violation, Browder was sentenced to ten months in federal prison. 

• David Byford, a convicted felon, was on supervised release after being sentenced to a 48-month term of imprisonment resulting from his conviction for being a felon in possession of a firearm.  According to his probation officer, on April 24, 2020, Byford assaulted his wife, pushing her to the floor in the bathroom.  This incident arose out of an argument because Byford had gone to a liquor store.  The government moved for Byford’s detention based on his history of abusing his wife as well as the fact that his pregnant wife had obtained a Personal Protection Order against him only a few days before the April 2020 incident. Byford was sentenced to twelve months in federal prison.

Another way the Department is addressing domestic violence is through grants.  The Department’s Office on Violence Against Women and Office for Victims of Crime just last month awarded nearly $4.5 million in grant funding to groups in the Eastern District of Michigan to support efforts to curb domestic violence.  The grants will provide resources to local legal aid providers, victim service providers, healthcare professionals as well as tribal victim services providers.

Domestic violence tears lives apart.  It causes physical, emotional and psychological trauma not only on the victim, but also on children who witness the abuse.  It creates fear and can destroy families.

For more information on domestic violence or to get help, visit the National Domestic Violence Hotline website or call 1-800-799-SAFE (7233).

The Justice Department announced today that Lee Mouat, 42, has been charged by criminal complaint in federal district court with violating 18 U.S.C. § 249 by willfully causing bodily injury to an African-American teenager because of the teenager’s race.

According to the affidavit in support of the criminal complaint, Mouat confronted a group of African-American teenagers, including the victim, at a state park in Monroe, Michigan. Mouat repeatedly used racial slurs and said that African Americans had no right to use the public beach where the incident occurred. Mouat then struck one of the teens in the face with a bike lock, knocking out several of the victim’s teeth and fracturing his jaw.

The charge in the complaint is merely an allegation and the defendant is presumed innocent unless proven guilty in a court of law. If convicted, Mouat faces a statutory maximum penalty of 10 years in prison.

This case is being investigated by the FBI. Assistant U.S. Attorney Frances Carlson of the Eastern District of Michigan and Trial Attorney Tara Allison of the Civil Rights Division are prosecuting the case.

DETROIT – The Justice Department announced today that Lee Mouat, 42, has been charged by criminal complaint in federal district court with violating 18 U.S.C. § 249 by willfully causing bodily injury to an African-American teenager because of the teenager’s race.

According to the affidavit in support of the criminal complaint, Mouat confronted a group of African-American teenagers, including the victim, at a state park in Monroe, Michigan. Mouat repeatedly used racial slurs and said that African Americans had no right to use the public beach where the incident occurred. Mouat then struck one of the teens in the face with a bike lock, knocking out several of the victim’s teeth and fracturing his jaw.

The charge in the complaint is merely an allegation and the defendant is presumed innocent unless proven guilty in a court of law. If convicted, Mouat faces a statutory maximum penalty of 10 years in prison.

This case is being investigated by the FBI. Assistant U.S. Attorney Frances Carlson of the Eastern District of Michigan and Trial Attorney Tara Allison of the Civil Rights Division are prosecuting the case.

DETROIT – Today, the Department of Justice announced it has charged more than 14,200 defendants with firearms-related crimes during Fiscal Year (FY) 2020, despite the challenges of COVID 19 and its impact on the criminal justice process. These cases have been a Department priority since November 2019 when Attorney General William P. Barr announced his commitment to investigating, prosecuting, and combatting gun crimes as a critical part of the Department’s anti-violent crime strategy. These firearms-related charges are the result of the critical law enforcement partnership between United States Attorneys’ Offices and the Bureau of Alcohol, Tobacco, Firearms and Explosives, led by Acting Director Regina Lombardo, who has made firearms-related investigations a priority.

“The number one priority of government is to keep its citizens safe,” said Attorney General Barr. “By preventing firearms from falling into the hands of individuals who are prohibited from having them, we can stop violent crime before it happens. Violating federal firearms laws is a serious crime and offenders face serious consequences.  The Department of Justice is committed to investigating and prosecuting individuals who illegally buy, sell, use, or possess firearms. Reducing gun violence requires a coordinated effort, and we could not have charged more than 14,000 individuals with firearms-related crimes without the hard work of the dedicated law enforcement professionals at the ATF, our U.S. Attorneys’ Offices across the country, and especially all of our state and local law enforcement partners.”

“Protecting the public from violent crime involving firearms is at the core of ATF’s mission,” commented ATF Acting Director Regina Lombardo.  “Every day the men and women of ATF pursue and investigate those who use firearms to commit violent crimes in our communities, many of whom are prohibited from possessing firearms from previous convictions.  ATF, in collaboration with the U.S. Attorneys’ Offices across the nation, is committed to bringing these offenders to justice for their egregious and violent criminal acts.”

“Our mission is to get these illegal guns off the street before they cause even more damage in our neighborhoods, stated United States Attorney Matthew Schneider.  “Despite the enormous challenges of the pandemic, our law enforcement partnership rose to the challenge and we actually filed more illegal gun cases this year than we did last year.”

Of the more than 14,200 cases charged, 189 cases have been brought by the Eastern District of Michigan, announced U.S. Attorney Matthew Schneider.

Under federal law, it is illegal to possess a firearm if you fall into one of nine prohibited categories including being a felon, illegal alien, or unlawful user of a controlled substance. Further, it is unlawful to possess a firearm in furtherance of a drug trafficking offense or violent crime.  It is also illegal to purchase – or even to attempt to illegally purchase - firearms if the buyer is a prohibited person or illegally purchasing a firearm on behalf of others. Lying on ATF Form 4473, which is used to lawfully purchase a firearm, is also a federal offense.  The Department is committed to prosecuting these firearms offenses as well as using all modern technologies available to law enforcement such as the National Integrated Ballistic Information Network, known as NIBIN, to promote gun crime intelligence. Keeping illegal firearms out of the hands of violent criminals will continue to be a priority of the Department of Justice and we will use all appropriate, available means to keep the law abiding people of this country safe from gun crime. 

For more information on the lawful purchasing of firearms, please see: https://www.atf.gov/qa-category/atf-form-4473.

###

Good afternoon.  All of us in Michigan can disagree about politics.  But those disagreements can never, ever, result in violence.  And because of the hard work of the men and women in law enforcement – police officers and federal agents – violence has been prevented today. 

This case is being brought in the Western District of Michigan.  Some of the defendants reside in the Eastern District, where search warrants have been executed.  But at the end of the day, what matters most is that the people of Michigan should be reassured that our state and federal governments are working together to keep us all safe. 

I want to thank Attorney General Nessel and her office, for their outstanding work and her committed partnership. 

I also thank Colonel Gasper, Special Agent Hauxhurtst, and of course, U.S. Attorney Birge.  

Every day, police officers and federal agents put their lives on the line for us.  In this case, arrests were made swiftly and safely by those officers and agents.  We are most thankful to them.  Thank you.

The Department of Justice today announced that six men have been arrested and charged federally with conspiring to kidnap the Governor of Michigan, Gretchen Whitmer.  According to a complaint filed Tuesday, October 6, 2020, Adam Fox, Barry Croft, Ty Garbin, Kaleb Franks, Daniel Harris and Brandon Caserta conspired to kidnap the Governor from her vacation home in the Western District of Michigan. Under federal law, each faces any term of years up to life in prison if convicted. Fox, Garbin, Franks, Harris, and Caserta are residents of Michigan.  Croft is a resident of Delaware.

U.S. Attorney Birge said that “Federal and state law enforcement are committed to working together to make sure violent extremists never succeed with their plans, particularly when they target our duly elected leaders.”

The federal complaint in this case alleges that the FBI began an investigation earlier this year after becoming aware through social media that a group of individuals was discussing the violent overthrow of certain government and law enforcement components. Through confidential sources, undercover agents, and clandestine recordings, law enforcement learned particular individuals were planning to kidnap the Governor and acting in furtherance of that plan. This group used operational security measures, including communicating by encrypted messaging platforms and used code words and phrases in an attempt to avoid detection by law enforcement. On two occasions, members of the alleged conspiracy conducted coordinated surveillance on the Governor’s vacation home. Fox and Croft discussed detonating explosive devices to divert police from the area of the vacation home and Fox even inspected the underside of an M-31 highway bridge for places to seat an explosive, according to the complaint. Among other activities, the complaint alleges Fox purchased a taser for use in the kidnapping and that the group successfully detonated an improvised explosive device wrapped with shrapnel to test its anti-personnel capabilities. The FBI and Michigan State Police executed arrests as multiple conspirators met to pool funds for explosives and exchange tactical gear.

“All of us can disagree about politics, but those disagreements should never, ever result in violence,” stated U.S. Attorney Matthew Schneider.  “The allegations in this complaint are deeply disturbing.  We owe our thanks to the men and women of law enforcement who uncovered this plot and have worked so hard to protect Governor Whitmer.”

“These alleged extremists undertook a plot to kidnap a sitting governor,” said Assistant Special Agent in Charge Josh P. Hauxhurst.  “Whenever extremists move into the realm of actually planning violent acts, the FBI Joint Terrorism Task Force stands ready to identify, disrupt and dismantle their operations, preventing them from following through on those plans.”

The investigation is ongoing. Agents of the Detroit Field Office of the FBI and other members of their Joint Terrorism Task Force, including the Michigan State Police, are conducting the investigation. FBI Agents and JTTF members in the Baltimore Field Office of the FBI, which covers Delaware, are also involved.  The U.S. Attorney’s Office for the Western District of Michigan is prosecuting the federal charges. U.S. Attorney’s Offices in the Eastern District of Michigan and Delaware have assisted.

Based on information developed in the investigation, State of Michigan Attorney General Dana Nessel announced the simultaneous arrest of seven other individuals on state charges of providing material support of terroristic activities and of possessing a firearm in the course of that offense.

The charges in a complaint are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.

Assistant Attorney General for Civil Rights Eric Dreiband, U.S. Attorney Matthew Schneider for the Eastern District of Michigan, and U.S. Attorney Andrew Birge for the Western District of Michigan issued the following statements:

“Today’s decision by the Michigan Supreme Court is a victory for all Michiganders and the rule of law,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division.  “The United States Constitution guarantees a republican form of government to every state in our free country.  The Constitution does not permit any public official unlawfully to restrict our liberty.  All public officials must respect the right of the people to govern themselves at all times, especially during a crisis.” 

“On June 23, we wrote to Governor Whitmer and urged her to work cooperatively with the Michigan Legislature to reopen Michigan safely and address the multitude of concerns that Michiganders have had about the restrictions on their liberties,” said United States Attorney Matthew Schneider. “The best solutions for preserving our liberties and keeping us safe involve listening to the people of Michigan, and this decision by the Michigan Supreme Court upholding the rule of law now allows that to happen.”

“While the Governor has had the public’s health interests at heart, this decision underscores the importance of a legislature to the legitimacy of restrictions on liberty,” said United States Attorney Andrew Birge. “I urge the Governor and Michigan legislators to work together going forward in responding to this pandemic so that we stay safe and free.”

Background

On June 23, 2020, Assistant Attorney General Dreiband, U.S. Attorney Schneider, and Birge wrote to Governor Whitmer to express their concerns about the Governor’s restrictions on the civil rights and liberties of the People of Michigan as part of her response to the COVID-19 pandemic:  “We write in the spirit of constructive cooperation to suggest greater cooperation with the Michigan legislature. Michiganders have raised numerous good-faith concerns about the orders you have issued—about whether they are authorized under state law, infringe on constitutional rights, or draw arbitrary and irrational distinctions among authorized and unauthorized economic activities. Working with the state legislature to reopen Michigan safely will relieve the public of concerns about the EMA and ensure greater representation of the people in matters that have serious consequences for their liberty. Such cooperation may also help identify any potential constitutional concerns with existing and any future orders. Further, and perhaps most importantly, working with the state legislature will affirm that Michigan and its public officials remain committed to the ‘Republican Form of Government’ mandated by the United States Constitution. U.S. Const., Art. IV, §4.”

On May 29, 2020, the Department of Justice filed a statement of interest in a Michigan federal court in support of a lawsuit filed by seven businesses challenging the restrictions imposed by Governor Gretchen Whitmer in response to the COVID-19 pandemic.  That statement of interest explained that the governor’s COVID-19 orders, however well-intentioned, raised constitutional concerns by imposing what appeared to be arbitrary and unreasonable limits on how and ultimately whether certain businesses could operate in Michigan relative to other similarly situated businesses.  The statement of interest also explained that the federal Constitution provides for a cohesive national economy for all 50 states and all Americans and that the governor’s COVID-19 orders may be unduly interfering with interstate commerce.

Matthew Schneider, U.S. Attorney for the Eastern District of Michigan, and Assistant Attorney General Dreiband, are overseeing the Justice Department’s effort to monitor state and local policies relating to the COVID-19 pandemic.

The federal case is Signature Sotheby’s International Realty, Inc., et al. v. Whitmer, No. 1:20-00360 and additional information about the department’s May 29 statement of interest can be found here:  https://www.justice.gov/opa/pr/department-justice-files-statement-interest-support-businesses-suffering-arbitrary-and

WASHINGTON - Assistant Attorney General for Civil Rights Eric Dreiband, U.S. Attorney Matthew Schneider for the Eastern District of Michigan, and U.S. Attorney Andrew Birge for the Western District of Michigan issued the following statements:

“Today’s decision by the Michigan Supreme Court is a victory for all Michiganders and the rule of law,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division.  “The United States Constitution guarantees a republican form of government to every state in our free country.  The Constitution does not permit any public official unlawfully to restrict our liberty.  All public officials must respect the right of the people to govern themselves at all times, especially during a crisis.” 

“On June 23, we wrote to Governor Whitmer and urged her to work cooperatively with the Michigan Legislature to reopen Michigan safely and address the multitude of concerns that Michiganders have had about the restrictions on their liberties,” said United States Attorney Matthew Schneider. “The best solutions for preserving our liberties and keeping us safe involve listening to the people of Michigan, and this decision by the Michigan Supreme Court upholding the rule of law now allows that to happen.”

“While the Governor has had the public’s health interests at heart, this decision underscores the importance of a legislature to the legitimacy of restrictions on liberty,” said United States Attorney Andrew Birge. “I urge the Governor and Michigan legislators to work together going forward in responding to this pandemic so that we stay safe and free.”

Background

On June 23, 2020, Assistant Attorney General Dreiband, U.S. Attorney Schneider, and Birge wrote to Governor Whitmer to express their concerns about the Governor’s restrictions on the civil rights and liberties of the People of Michigan as part of her response to the COVID-19 pandemic:  “We write in the spirit of constructive cooperation to suggest greater cooperation with the Michigan legislature. Michiganders have raised numerous good-faith concerns about the orders you have issued—about whether they are authorized under state law, infringe on constitutional rights, or draw arbitrary and irrational distinctions among authorized and unauthorized economic activities. Working with the state legislature to reopen Michigan safely will relieve the public of concerns about the EMA and ensure greater representation of the people in matters that have serious consequences for their liberty. Such cooperation may also help identify any potential constitutional concerns with existing and any future orders. Further, and perhaps most importantly, working with the state legislature will affirm that Michigan and its public officials remain committed to the ‘Republican Form of Government’ mandated by the United States Constitution. U.S. Const., Art. IV, §4.”

On May 29, 2020, the Department of Justice filed a statement of interest in a Michigan federal court in support of a lawsuit filed by seven businesses challenging the restrictions imposed by Governor Gretchen Whitmer in response to the COVID-19 pandemic.  That statement of interest explained that the governor’s COVID-19 orders, however well-intentioned, raised constitutional concerns by imposing what appeared to be arbitrary and unreasonable limits on how and ultimately whether certain businesses could operate in Michigan relative to other similarly situated businesses.  The statement of interest also explained that the federal Constitution provides for a cohesive national economy for all 50 states and all Americans and that the governor’s COVID-19 orders may be unduly interfering with interstate commerce.

Matthew Schneider, U.S. Attorney for the Eastern District of Michigan, and Assistant Attorney General Dreiband, are overseeing the Justice Department’s effort to monitor state and local policies relating to the COVID-19 pandemic.

The federal case is Signature Sotheby’s International Realty, Inc., et al. v. Whitmer, No. 1:20-00360 and additional information about the department’s May 29 statement of interest can be found here:  https://www.justice.gov/opa/pr/department-justice-files-statement-interest-support-businesses-suffering-arbitrary-and

###

DETROIT - A grand jury returned a superseding indictment yesterday charging Wansa Nabih Makki, her husband, Hossam Tanana, and her brother, Mahmoud Makki with multiple health care fraud and money laundering offenses, U.S. Attorney Matthew Schneider announced today.

Schneider was joined in the announcement by Special Agent in Charge Steven M. D’Antuono of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

Charged in the indictment and criminal complaints are:

Wansa Nabih Makki, 42, of Dearborn

Mahmoud Makki., 37, of Dearborn

Hossam Tanana, 54 of Dearborn

According to the superseding indictment, between January 2010 and January 2018, Wansa Makki owned and oversaw the operations of two local pharmacies, LifeCare Pharmacy in Livonia and LifeCare of Michigan in Farmington Hills.  Both pharmacies were “closed door” pharmacies, meaning that they were not open to the public and only filled prescriptions for individuals associated with various care facilities.

The superseding indictment alleges that during the course of the conspiracy, Wansa Makki, Hossam Tanana, and Mahmoud Makki engaged in a scheme to bill Medicare, Medicaid and Blue Cross Blue Shield of Michigan for approximately $9.2 million dollars for medications that were never dispensed.  The fraud scheme was detected by Medicare, in part, because of a huge deficit between each pharmacy’s recorded inventories and the claims that each submitted for insurance reimbursement.   As part of the scheme to defraud, the defendants billed insurance companies for allegedly submitting claims for delivering over 500 medications to people who had died prior to the claimed date of delivery. The grand jury also charged Wansa Makki with making a false statement to the IRS when she falsely claimed to be a Pharmacist in her 2015 tax return.  

According to the indictment, proceeds of the fraud scheme were laundered by overpaying consulting and delivery companies owned by Hossam Tanana and Mahmoud Makki.  For instance, Hossam Tanana was previously convicted for diverting controlled substances such as oxycodone, hydrocodone (Vicodin) and alprazolam (Xanax) while being licensed as a pharmacist.  Two days after being released from federal custody in April of 2012, Tanana incorporated a pharmacy consulting company.  Between the date of incorporation and December of 2013, Tanana’s consulting company received over $400,000 from the LifeCare Pharmacy.  LifeCare Pharmacy also paid over one million dollars to a delivery service opened by Wansa Makki’s brother, Mahmoud Makki, in a 14-month period beginning in December of 2013.

According to the Indictment, Wansa Makki used the proceeds to make a $21,500 payment for a Mercedes G63 AMG while Hossam Tanana used fraud proceeds to purchase a $545,000 Waterford Lakehouse. The indictment further alleged that Wansa Makki spent more than $3,000 in dock repairs to the Waterford Lakehouse.   

During the investigation, the FBI and United States Attorney’s Office deployed the full arsenal of financial investigation tools to seize assets, which will be returned to the victim taxpayers in the event of a conviction.  Seized assets include the following:

1. Over $2 million in liquid assets seized from accounts controlled by members of the conspiracy;

1. Eight King George Gold Coins valued at over $3,000, One Queen Elizabeth II Gold Coin valued at $378, One Tiffany Diamond Ring Valued at $60,000, six Troy once Suisse gold bars valued at approximately $8,000, and 27 designer handbags – including Hermes Birkin™ and Coco Chanel™ valued at approximately $78,000.

According to court records, upon conviction, the United States Attorney’s Office will seek the forfeiture of the additional following property, the 5,700 square foot residence of Wansa Makki and Hossam Tanana in Dearborn. Further, upon conviction, the United States will seek the forfeiture of  $113,000 in proceeds from the sale of a Waterford lake house purchased by Hossam Tanana for $545,000 while he was on federal supervised release following his 2010 distribution of controlled substance conviction.

According to court records, a member of the same conspiracy, Mohamad Ali Makki pleaded guilty and is awaiting sentencing. As part of his plea agreement, Mohamad Ali Makki, agreed to forfeit approximately $2.6 million in liquid assets seized from accounts he controlled. He additionally agreed to the imposition of a $2.3 million forfeiture judgment. The United States is authorized to forfeit any and assets Mohamad Ali Makki owns to satisfy the forfeiture judgment. In addition to the forfeiture judgment, the district court will also impose a restitution judgment of approximately $9.8 million based on the pecuniary losses to Medicare, Medicaid, and Blue Cross Blue Shield of Michigan.

An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.

If convicted of a health care fraud charge, the defendants face a maximum sentence of imprisonment of ten years, and a maximum fine of $250,000.  If convicted of the money laundering charges, the defendants face up to twenty years’ imprisonment. Upon conviction, the court would be required to impose both forfeiture and restitution judgments.  

The case was investigated by Special Agents of the HHS and FBI, with cooperation and assistance from the Michigan Department of Health and Human Services - Office of Inspector General.

The case is being prosecuted by Assistant U.S. Attorneys, Philip Ross and Mitra Jafary-Hariri. Fraud Section Trial Attorney Shankar Ramamurthy previously prosecuted the Asset Forfeiture aspects of this case before transferring to his current position.

Dennis Williams, the former President of the international United Auto Workers union, pleaded guilty today to conspiring with other UAW officials to embezzle UAW funds announced U.S. Attorney Matthew Schneider.

Joining in the announcement were Irene Lindow, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Steven M. D’Antuono, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, Sarah Kull, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, and Thomas Murray, District Director, U.S. Department of Labor – Office of Labor-Management Standards.

Dennis Williams, 67, of Corona, California, pleaded guilty before United States District Judge Paul Borman to charges of conspiring with former UAW President Gary Jones and other senior UAW officials to embezzle UAW dues money between 2010 and September 2019.   

Between June 2014 and June 2018, Williams served as the President of the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (“UAW”).  The UAW represents over 400,000 active members and over 580,000 retired members in more than 600 local unions across the United States.  Prior to serving as UAW President, Williams was the Secretary-Treasurer of the UAW from June 2010 through June 2014.       

During the guilty plea hearing today, Williams admitted that he had conspired with at least six other senior UAW officials in a multi-year conspiracy to embezzle money from the UAW for the personal benefit of himself and other senior UAW officials.  UAW officials concealed hundreds of thousands of dollars in personal expenditures in the cost of UAW conferences held in Palm Springs, California, Coronado, California, and Missouri.  Between 2010 and 2018, former UAW President and co-defendant Gary Jones and other UAW officials submitted fraudulent expense forms seeking reimbursement from the UAW’s Detroit headquarters for expenditures supposedly incurred in connection with UAW leadership and training conferences.  In truth, however, Williams and his co-conspirators used the conferences to conceal the hundreds of thousands of dollars in UAW funds spent on lavish entertainment and personal spending for the conspirators. 

As part of his guilty plea, Williams admitted the he and other senior UAW officials used UAW money to pay for personal expenses, including multi-month long stays at private villas in Palm Springs, cigars, golfing apparel, green fees at golf courses, and high-end liquor and meals.  During the course of the conspiracy, while Williams was UAW President, co-conspirators Gary Jones, Vance Pearson, and others provided themselves and Williams with thousands of dollars in such personal items.    

Based on the charge of conspiring to embezzle union funds, Williams faces a maximum of five years in prison and a fine of up to $250,000. 

As part of his guilty plea, Williams has agreed to forfeit a custom-made set of Titleist golf clubs and various golf clothing and equipment seized from Williams during an August 2019 search of his residence.  In addition, Williams has agreed to pay taxes to the Internal Revenue Service on embezzled items that he personally received.    

Williams is the fifteenth defendant convicted in connection with the ongoing criminal investigation into corruption within the UAW or relating to illegal payoffs to UAW officials by FCA executives.  The following other individuals have already pleaded guilty to their participation in the scheme and have been sentenced:  former FCA Vice President for Employee Relations Alphons Iacobelli (66 months in prison), former FCA Financial Analyst Jerome Durden (15 months in prison), former Director of FCA’s Employee Relations Department Michael Brown (12 months in prison), former senior UAW officials Virdell King (60 days in prison), Keith Mickens (12 months in prison), Nancy A. Johnson (12 months in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (18 months in prison), former UAW Vice President Norwood Jewell (15 months in prison), and former senior UAW official Michael Grimes (28 moths).  In addition, the following UAW officials have pleaded guilty and are awaiting sentencing:  former UAW President Gary Jones, former UAW Vice President Joseph Ashton, former senior UAW official Jeffrey “Paycheck” Pietrzyk, former UAW Region 5 Director UAW Board member Vance Pearson, and former UAW Midwest CAP President Edward “Nick” Robinson.           

U.S. Attorney Schneider commended the outstanding work of the Internal Revenue Service – Criminal Investigations, the U.S. Department of Labor – Office of Labor-Management Standards and Office of Inspector General, and the Federal Bureau of Investigation in conducting a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.

“Former UAW President Dennis Williams has accepted responsibility for his conduct and, in that way, has contributed to our efforts with the union’s current leadership towards reforming the UAW to better serve its members and their families,” said United States Attorney Matthew Schneider.  “Today’s conviction demonstrates that we will continue our drive forward to provide ethical and honest leadership for the UAW’s membership.” 

“Today’s conviction is another step towards combatting corruption within the UAW. Williams conspired with other senior UAW officials to embezzle over $1 million in union funds. Williams spent the embezzled funds on extravagant meals, liquor, golf, and travel for personal enrichment. We will continue to work with our law enforcement partners to investigate corrupt union officials who betray the union members they are entrusted to represent,” stated Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

“Years of fraud and corruption by the UAW’s elected officials continue to be exposed through the diligent and collaborative work of law enforcement,” said Steven M. D’Antuono, Special Agent in Charge of the FBI in Detroit. “As I have often said, the hard-working men and women of the UAW deserve so much better. It is my sincere hope that the convictions obtained over the course of this investigation have begun the process of ensuring honest leadership takes the helm of one of the most important labor unions in this country.”

“Today’s guilty plea further illustrates the systemic corruption at the UAW’s highest levels,” said Internal Revenue Service – Criminal Investigation Special Agent in Charge, Sarah Kull.  “IRS-CI is committed to prosecuting anyone who illegally diverts funds from the UAW.”

 “Dennis Williams’ guilty plea today shows that instead of fulfilling his fiduciary duty to his fellow union members, Williams chose to betray their trust and embezzle hundreds of thousands of dollars from the UAW for the personal benefit of himself and other high-ranking UAW officers,” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards.  “OLMS will continue to work with its fellow law enforcement partners and the U.S. Attorney’s Office to remove corrupt union officers and other officials within the UAW International Union.”

The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey, Steven Cares, and Adriana Dydell.

A Milan, Michigan resident was sentenced to 72  months in federal prison after having pleaded guilty to charges of wire fraud and aggravated identity theft in a scheme to defraud Amtrak and others, along with firearms offenses, announced United States Attorney Matthew Schneider. 

Schneider was joined in the announcement by John R, Lausch, Jr., United States Attorney for the Northern District of Illinois, Special Agent in Charge Basil Demczak, Amtrak Office of Inspector General, Central Field Office  Special Agent in Charge Christopher Diiorio, United States Secret Service, Chicago Field Office, and Special Agent in Charge James Deir, Bureau of Alcohol, Tobacco, Firearms and Explosives, Detroit Division.

Sentenced was Christian Newby, 32.  Newby was sentenced by United States District Judge Gershwin Drain.  As part of his plea agreement, Newby agreed to the entry of a $550,000 money judgment and to forfeit any and all property derived from the scheme to include a Rolex watch and other jewelry.

According to court records, from March 2018 through January 2019, Newby fraudulently obtained credit card information for more than 1100 credit card holders. Newby used the stolen credit card information to purchase Amtrak tickets online.  After purchasing the tickets, Newby would then cancel the Amtrak tickets and receive vouchers for the value of those tickets from Amtrak.  Newby then advertised and sold the Amtrak vouchers to unwitting buyers on eBay at a fraction of the cost.  This was all done without the knowledge or consent of the true card holder.  As a result of this scheme, Amtrak suffered a loss of more than $540,000. 

As part of the investigation, agents executed a search warrant at Newby’s residence and recovered several improvised explosive devices, narcotics, firearms, and ammunition.

The case was investigated by Special Agent John Donnelly Amtrak-Office of the Inspector General with the assistance of the FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives, the Milan Police Department and the Michigan State Police.  The case was prosecuted by Assistant U.S. Attorneys Robert Jerome White, of the Eastern District of Michigan, and Melody Wells, of the Northern District of Illinois. 

An illegal alien was sentenced yesterday to 18 months’ in federal prison for assaulting a federal officer, announced United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Special Agent in Charge Vance Callendar, Homeland Security Investigations, Detroit Division.

U.S. Attorney Matthew Schneider stated, “Our office continues to prosecute dangerous and violent offenders who are in our country illegally.  Our mission is to protect our community from violent criminals, and we will continue to do that by working with our law enforcement partners to keep our borders safe.”

“An assault on a law enforcement officer is unobjectionable, and this individual, illegally present in the U.S., will now face time for his actions.  HSI will continue to work with the U.S. Attorney’s Office for the Eastern District of Michigan for the investigation and prosecution of those who think they can operate above the law,” said Vance Callender, special agent in charge for HSI Detroit.

Sentenced was Enrique Ortega-Escudero, age 37.  According to court records, Enrique Ortega-Escudero assaulted a federal officer during an immigration arrest on February 2, 2020. During his arrest, Mr. Ortega-Escudero resisted and fought with the ICE agents. While being transported in an ambulance to Detroit Receiving Hospital for evaluation, Mr. Ortega-Escudero escaped.  He did so by opening the side door of the rear compartment while the ambulance was moving on Interstate 75 and ran across both lanes of traffic on the interstate. Following a foot pursuit, Mr. Ortega-Escudero again fought with an ICE agent and attempted to remove the agent’s firearm. With assistance from EMTs, Mr. Ortega-Escudero was again detained; however, the ICE agent suffered physical injuries.

Mr. Ortega-Escudero’s case is just one of the many immigration enforcement cases being prosecuted by the United States Attorney’s Office.  Since January 1, 2020, the U.S. Attorney’s Office has investigated or prosecuted approximately 80 immigration-related cases despite the increased challenges posed by the current environment. A sampling of cases are highlighted below:

Among those recently prosecuted is Hector Ramirez-Gutierrez, who repeatedly entered the U.S. illegally and used over four dozen aliases during three decades of committing crimes in the United States.  Mr. Ramirez-Gutierrez’s lengthy criminal history includes convictions for grand theft, burglary, battery, infliction of corporal injury on a spouse or co-habitant, driving under the influence, and multiple immigration offenses, among others. Most recently, Mr. Ramirez-Gutierrez violated his supervised release by returning unlawfully to the United States after his removal on September 19, 2019 and committing additional theft offenses in early 2020.  Mr. Ramirez-Gutierrez was charged with unlawful reentry and sentenced on June 24, 2020 and August 12, 2020 to two consecutive 24 month sentences for the supervised release and unlawful reentry violations. 

Gaspar Vallejo-Arias was a lawful permanent resident of the United States until he was convicted for conspiracy to commit Hobbs Act robbery and removed to the Dominican Republic on April 7, 2015.  That crime involved Mr. Vallejo-Arias’ participation in a scheme to rob a drug dealer of a large amount of cocaine. Mr. Vallejo-Arias also had other felony convictions for auto-stripping and forgery. Following his removal, Mr. Vallejo-Arias unlawfully reentered the United States and was arrested near St. Clair, Michigan on February 4, 2020. He was charged with unlawful reentry and he was sentenced on June 17, 2020 to time-served.

Rolando Lopez-Lopez was convicted on February 8, 2018 of Operating while Intoxicated Causing Death and Reckless Driving Causing Death in the Third Circuit Court, Detroit, Michigan.  For those offenses, he was sentenced to 5 to 15 years’ imprisonment.  Mr. Lopez-Lopez had previously been removed from the United States on January 11, 2006.  On June 18, 2020, Mr. Lopez-Lopez was charged with unlawful reentry and was sentenced on September 10, 2020 to time-served.

On May 27, 2020, Eduardo Delgado-Campos was convicted of false use of a passport and unlawful reentry. Delgado-Campos was sentenced to six months’ imprisonment for those offenses.  Previously, Mr. Delgado-Campos had been convicted of two drug offenses and unlawful entry into the United States.  Before his most recent federal conviction, Mr. Delgado-Campos had been removed from the United States by immigration authorities six times. 

The U.S. Attorney’s Office routinely investigates and prosecutes alien smuggling, port-running, identity theft, passport fraud, the hiring and exploitation of unauthorized workers, and other immigration offenses that negatively impact the rule of law, public safety, and border security.    

The Justice Department today announced that Ronald Wyatt, 22, pleaded guilty today in U.S. District Court for the Eastern District of Michigan to intentionally threatening physical harm to a female victim, T.P., to obstruct T.P.’s free exercise of religion. As part of his plea agreement, Wyatt admitted that he targeted T.P., who is African-American, because of her race. 

At the plea hearing, Wyatt admitted that, on July 23, 2019, he used Facebook to send T.P. a written message that threatened: “See you at church on Wednesday night with my AK to put you and your [expletive] family down [expletive].” T.P. regularly attends a church located in Taylor, Michigan. Wyatt admitted that, by sending the threatening message, he acted intentionally to obstruct T.P.’s free exercise of her religious beliefs. Wyatt further admitted that he threatened T.P. because she is African-American, and that he intended for T.P. to understand his message as a threat. 

“No American should face threats towards their life or the lives of their loved ones based on their race or religion” said Assistant Attorney General Eric Dreiband. “These actions are reprehensible. The Justice Department takes these matters very seriously and works to ensure that those who perpetrate these actions see justice under the law.”

“The defendant’s actions in this case are truly reprehensible,” said U.S. Attorney Matthew Schneider of the Eastern District of Michigan. “Although the First Amendment protects free speech, it doesn’t give anyone the right to obstruct the free exercise of religious beliefs by threatening violence or bodily harm. Prosecuting those who violate the civil rights of Michigan citizens is some of the most important work we do. This plea today is the first step towards justice for this innocent victim.”

"Mr. Wyatt used threats of violence to terrorize an innocent woman and as a result hindered the victim's ability to freely practice her religion,” said Special Agent in Charge Steven M. D’Antuono, of the FBI’s Detroit Field Office. “Hate crimes like this one have profound effects not only on the victims, but also on their families and communities, making them feel vulnerable and unsafe. No arrest or conviction can undo the harm, but will hopefully provide a measure of justice for the victim, her family and her community.”

Pursuant to the plea agreement, sentencing will take place in one year. He faces a maximum sentence of one year in prison.

This case was investigated by the FBI’s Detroit Field Office and is being prosecuted by Assistant U.S. Attorney Frances Carlson, of the U.S. Attorney’s Office for the Eastern District of Michigan, and Trial Attorney Risa Berkower, of the Justice Department’s Civil Rights Division.

DETROIT - The United States Attorney’s Office will convene a community webinar on Friday, September 18, 2020.  Speakers at the webinar will talk about Sextortion.  Sextortion is a type of online child exploitation where victims are coerced into providing sexually explicit images or videos often in compliance with a threat being made against them or their families. Sextortion crimes have been on the rise in recent years.  With children occupying their time with internet activities during the pandemic, this increases their vulnerability to being targeted. 

“The crime of sextortion begins on children’s smartphones, computers and other electronic devices,” stated United States Attorney Matthew Schneider.  "“Parents, please speak with your children about the dangers of chatting online so we can keep all of our children safe.  We hope this webinar will provide parents and children with helpful information so others don’t fall victim to this heinous crime.”

Join us for a webinar in which survivors of sextortion and their parents will share their experiences and advice.  The webinar will also include general information about sextortion and supporting victims in court.  Carol Todd and Dan Cojanu from the Canine Advocacy Program will both speak at the event.  Carol Todd’s story and website can be found here https://www.amandatoddlegacy.org/about-carol.html

Parents, teachers, students, law enforcement, and community leaders are encouraged to attend.

This event is free and open to the public. The meeting will take place on Friday, September 18 from 11:00 a.m. to 12:15 p.m.

To attend, please click on the following link 

https://usao.webex.com/usao/onstage/g.php?MTID=eb7fb7cf39cdcdba69ef68d1bbad12779   and type in Detroit313!   Attendance is limited to the first 1,000 users.

NOTE: This event is open press.

A Birmingham jewelry buyer, auctioneer and appraiser pleaded guilty today to devising and executing a scheme to obtain money by means of false material promises and representations from a client in the course of his business, U.S. Attorney Matthew Schneider announced.

Schneider was joined in the announcement by Special Agent in Charge Steven M. D’Antuono, Federal Bureau of Investigation and Chief Mark Clemence of the Birmingham Police Department.

Joseph Gregory Dumouchelle, age 58, entered a guilty plea to one count of wire fraud before the Honorable Mark A. Goldsmith, United States District Judge.

According to the facts made public at the guilty plea hearing, in late 2018, Dumouchelle, began negotiating the purchase and sale of a diamond known as the “Yellow Rose.” Dumouchelle proposed the Yellow Rose as an investment opportunity to a client, TR, by claiming that the diamond could be purchase by TR for $12,000,000 and sold for substantially more. In an effort to lull TR into believing the investment was legitimate Dumouchelle told TR he could purchase the diamond by wire transferring $12,000,000 into the seller’s account. Dumouchelle sent the wire transfer directions to TR falsely representing that the account was the seller’s. In fact, as Dumouchelle well knew and intended, the wire transfer instructions were to his own account. After TR unknowingly wired the money into Dumouchelle’s account, Dumouchelle quickly withdrew the funds and used them to pay his personal and business debts and expenses.

 As part of the plea agreement with the government Dumouchelle acknowledges that there are other victims of his scheme to obtain money by means of false and fraudulent material pretenses and representation and that their losses will be included as relevant conduct in calculating his sentencing guidelines and by the court in ordering restitution.

“White collar criminals may use sophisticated methods and apparently legitimate businesses, but their crimes amount to nothing more than stealing other people’s money.  Dumouchelle lured his victims into believing his false promises because he held himself out to be an expert with valuable connections that would earn the victims substantial profits, but it was all a lie,” said United States Attorney Matthew Schneider.

 “Joseph Dumouchelle defrauded his investors by convincing them that he was buying and selling rare jewelry for big profits,” said Special Agent in Charge of the FBI in Michigan, Steven M. D’Antuono. “It was all a lie. Instead, Dumouchelle used the victims’ hard-earned money to help him maintain a lifestyle he could no longer afford. This case represents excellent collaboration between the Birmingham Police Department and the FBI’s Detroit Metropolitan Identity Theft and Financial Crimes Task Force.”

Chief Mark Clemence of the Birmingham Police Department stated, "Dumouchelle case is a great example of how local police agencies can work with the FBI and other federal agencies to solve complex criminal enterprises that start at the local level and have far reaching impacts throughout the country."

Sentencing has been set for January 13, 2021.

The investigation was conducted by the FBI's Detroit Metropolitan Identity Theft and Financial Crimes Task Force and the Birmingham Police Department

DETROIT – U.S. Attorney Matthew Schneider of the Eastern District of Michigan announced that Wayne/Westland Community Schools and the City of Grand Blanc received $478,836 and $23,513, respectively, from the Department of Justice’s Office of Community Oriented Policing Services (COPS Office) School Violence Prevention Program (SVPP). Nationally, the COPS Office SVPP awarded nearly $50 million in school safety funding. SVPP provides up to 75% funding for school safety measures in and around primary and secondary schools and school grounds.

“While most Michigan students are starting off the school year in a remote learning setting, safety remains a top priority,” stated United States Attorney Matthew Schneider.  “The money awarded will go a long way in ensuring the safety of our children.”

“With the new school year underway, the safety of our nation’s students remains paramount,” said COPS Office Director Phil Keith.  “Although this school year may look different at the start, now is the ideal time to make preparations to enhance school safety for when all of our children are back in the classroom.”   

The Students, Teachers, and Officers Preventing School Violence Act of 2018 (STOP School Violence Act of 2018) gave the COPS Office authority to provide awards directly to states, units of local government, Indian tribes, and public agencies (such as school districts and law enforcement agencies) to improve security at schools and on school grounds in the jurisdiction of the grantee through evidence-based school safety programs.  The two awards announced today can be used for coordination with law enforcement; training for local law enforcement officers to prevent student violence; metal detectors, locks, lighting, and other deterrent measures; technology for expedited notification of local law enforcement during an emergency; and other measures that provide a significant improvement in security.  The full list of SVPP awards can be found here: https://cops.usdoj.gov/pdf/2020AwardDocs/svpp/Award_List.pdf.

In addition to the school safety grants announced today, the COPS Office School Safety Working Group, which is composed of representatives from eight national law enforcement organizations, has identified 10 essential actions that can be taken by schools, school districts, and law enforcement agencies to help prevent critical incidents involving the loss of life or injuries in our nation's schools and to respond rapidly and effectively when incidents do occur. The Ten Essential Actions to Improve School Safety are applicable to school shootings as well as to other areas of school safety, including natural disasters and traumatic events such as student suicide. Adopting policies and practices based on the recommendations in this publication can help make school communities safer and save lives.

*******

The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide.  Since 1994, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 134,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. 

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

###

Detroit resident Darrell Baker pleaded guilty today to bank fraud and money laundering arising out of a $590,000 Covid-19 fraud scheme, announced United States Attorney Matthew Schneider.

Joining in the announcement were Special Agent in Charge Steven M. D’Antuono, Federal Bureau of Investigation and Inspector General Hannibal Mike Ware of the Small Business Administration’s Office of Inspector General.

Darrell Baker, 56, pleaded guilty to one count of bank fraud arising from his effort to obtain some $590,000 by defrauding a Pennsylvania financial institution in the issuance of a Payroll Protection Program Loan. Baker also pleaded guilty to one count of money laundering, the result of financial transactions he engaged in with the fraudulently obtained funds.  

United States Attorney Schneider stated, “My office and our law enforcement partners have no tolerance for frauds affecting programs designed to help our economy survive the Covid-19 pandemic. We will prosecute such cases aggressively, and today’s guilty plea is an example of our commitment to holding accountable anyone fraudulently obtaining pandemic relief funds to line their own pockets.”   

“Mr. Baker's scheme exploited a fund designed specifically to support Americans during this financially challenging time,” said Steven M. D’Antuono, Special Agent in Charge of the FBI in Michigan. “Thanks to the hard work of the FBI and all of the agencies involved in this investigation, monies set aside for hard working Americans who are not able to work during this pandemic is secure and available for the people that need it most, not for the fraudsters like Mr. Baker."

According to the plea agreement, Baker applied for and obtained a $590,000 Payroll Protection Program Loan on behalf of a purported business that he owns, called “Motorcity Solar Energy, Inc.” The Payroll Protection Program is a program managed by the Small Business Administration (SBA) that provides loans to help businesses keep their workforces employed during the Covid-19 crisis. The SBA will forgive the loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The Payroll Protection Act loans are funded from participating banks, in this case Customers Bank in Pennsylvania.

According to the plea documents, Baker submitted paperwork with his loan application representing that Motorcity Solar Energy Inc. had 68 employees and, in 2019 paid wages, tips, and other compensation totaling $2.8 million. All of these representations were in fact false. Motor City Solar Energy had no employees, no payroll expenses of any kind, and was not an operational business. Baker submitted these false statements as part of a scheme to intentionally defraud Customers Bank and the Payroll Protection Program.   

The plea documents state that Baker managed to withdraw approximately $172,000 of the $590,000 loan he obtained before Baker’s own financial institution froze the remainder, which was ultimately returned to Customer’s Bank. Baker used the funds he did obtain to purchase four cashier’s checks, and used the four checks to purchase two Cadillac Escalades, a Dodge Charger, and a Hummer.  The plea agreement requires Baker to forfeit these vehicles. As part of the plea agreement, Baker also agreed to the entry of a money judgment against him in the amount of $172,484.40, which represents the portion of the loan that Baker obtained before his fraud was uncovered and the balance of the loan frozen.   

Sentencing is set for January 14, 2021, before United States District Judge Laurie J. Michaelson,

The case is being prosecuted by Assistant United States Attorney John K. Neal. The investigation is being conducted jointly by the FBI and the SBA-OIG. . 

Today an Information was filed in federal court charging former elected Macomb County Prosecutor Eric Smith with obstruction of justice for attempting to get a friend and two of his assistant prosecutors to make false statements to federal law enforcement officers and a federal grand jury in a federal criminal investigation of Smith’s own criminal conduct, United States Attorney Matthew Schneider announced.

Former Prosecutor Eric Smith, 53, of Macomb Township, was charged with obstruction of justice, a felony that carries a sentence of up to 20 years in federal prison.  The charge was based on an investigation by the Federal Bureau of Investigation that revealed that between 2012 and 2020, Smith conducted two fraud schemes to steal approximately $75,000 in cash from his political campaign fund to use for personal expenses.  Then, when he became aware of a federal grand jury investigation in 2019, Smith began a campaign of a different sort, imploring witnesses to lie and commit perjury on his behalf to federal authorities and a federal grand jury. 

Schneider was joined in the announcement by Steven D’Antuono, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.

Schneider stated, “Our office has worked tirelessly over the years, in partnership with our federal investigative agencies, to put an end to corruption in Eastern Michigan.  And we have brought to justice many corrupt public officials, including corrupt police officers, pension board members, council members, trustees and even mayors of major cities.  But this case is even more troubling.  It involves the head law enforcement official for the third largest county in our state with a population closing in on one million.  That Prosecutor Smith was responsible for enforcing our state laws and bringing criminals to justice, only to devolve into a criminal himself by interfering with our system of justice, raises his corrupt acts to an entirely new level.  But today, thankfully, Prosecutor Smith is himself a defendant who will now meet the justice he so richly deserves.” 

“The supporters of Eric Smith's campaign had an expectation that he would use their money to fund his election and to provide excellent and honest service to the citizens of Macomb County.  Instead he broke that trust and used their money to pay for his own personal expenses,” said Steven M. D’Antuono, Special Agent in Charge of the FBI in Michigan. “And when he found out he was being investigated for that crime, he used his personal and political influence to try to obstruct the investigation.  The FBI is unwavering in its pursuit of corruption at all levels of the government.  Because of his self-interest and greed, Smith has thrown away a long career and has become one of those criminals he promised to protect the citizens of Macomb from.”

This case was investigated by FBI Special Agent Brent Nida of the FBI's Macomb County Resident Agency and Special Agent Robert Beeckman of the Detroit Area Public Corruption Task Force.  The case is being prosecuted by Assistant U.S. Attorneys R. Michael Bullotta and Robert Moran and David Gardey. 

To hear prepared remarks from United States Attorney Matthew Schneider, please visit https://www.youtube.com/watch?v=kgN-b5voHeA&feature=youtu.be

DETROIT - On July 8, 2020, Attorney General William P. Barr announced the launch of Operation Legend, a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. The initiative is named in honor of four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City.

Launched first in Kansas City, MO., on July 8, 2020, the operation was expanded to Chicago and Albuquerque on July 22, 2020, to Cleveland, Detroit, and Milwaukee on July 29, 2020, to St. Louis and Memphis on August 6, 2020, and to Indianapolis on August 14, 2020.

“Operation Legend is working, not only in Detroit but in other districts as well,” stated United States Attorney Matthew Schneider.  “Operation Legend is proof that by working with our state and local law enforcement partners we are making our communities safer for the citizens of Detroit.”

Since the operation’s launch through Monday, August 31, 2020, more than 2000 arrests – included 147 for homicide – have been made; more than 544 firearms have been seized; and more than seven kilos of fentanyl, 14 kilos of heroin, 12 kilos of cocaine, and 50 kilos of methamphetamine have been seized.

Of those individuals arrested, 476 have been charged with federal offenses. Two hundred and forty-nine (249) of those defendants have been charged with firearms offenses, while 185 have been charged with drug-related crimes. The remaining defendants have been charged with various offenses. The breakdown of federal charges is below.

Kansas City, MO.

99 defendants have been charged with federal crimes outlined below.

-           28 defendants have been charged with narcotics-related offenses;

-           60 defendants have been charged with firearms-related offenses; and

-           11 defendants have been charged with other violent crimes.

Chicago, Ill.

103 defendants have been charged with federal crimes outlined below.

-           27 defendants have been charged with narcotics-related offenses;

-           72 defendants have been charged with firearms-related offenses; and

-           4 defendants have been charged with other violent crimes.

Albuquerque, NM.

35 defendants have been charged with federal crimes outlined below.

-           15 defendants have been charged with narcotics-related offenses;

-           14 defendants have been charged with firearms-related offenses; and

-           6 defendants have been charged with other violent crimes.

Cleveland, OH.

54 defendants have been charged with federal crimes outlined below.

-           39 defendants have been charged with narcotics-related offenses;

-           13 defendants have been charged with firearms-related offenses; and

-           2 defendants have been charged with other violent crimes.

Detroit, MI.

41 defendants have been charged with federal offenses outlined below. 

-           17 defendants have been charged with narcotics-related offenses;

-           21 defendants have been charged with firearms-related offenses; and

-           3 defendants have been charged with other violent crimes.

Milwaukee, WI.

15 defendants have been charged with federal crimes outlined below.

-           2 defendants have been charged with narcotics-related offenses;

-           12 defendants have been charged with firearms-related offenses; and

-           1 defendant has been charged with other violent crimes.

St. Louis, MO.

89 defendants have been charged with federal crimes.

-           44 defendants have been charged with narcotics-related offenses;

-           37 defendants have been charged with firearms-related offenses; and

-           8 defendants have been charged with other violent crimes.

Memphis, Tenn.

14 defendants have been charged with federal offenses.

-           3 defendants have been charged with narcotics-related offenses;

-           8 defendants have been charged with firearms-related offenses; and

-           3 defendants have been charged with other violent crimes.

Indianapolis, Indiana

26 defendants have been charged with federal crimes outlined below.

-           10 defendants have been charged with narcotics-related offenses;

-           12 defendants have been charged with firearms-related offenses; and

-           4 defendants have been charged with other violent crimes.

***

A Michigan man was arrested today in connection with a wire fraud scheme involving $3.1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Steven M. D’Antuono of the FBI’s Detroit Field Office, and Inspector General Hannibal Mike Ware of the SBA’s Office of the Inspector General (OIG) made the announcement.

Antonio George, 44, of Novi, Michigan, was charged with a criminal complaint, unsealed today, in the Eastern District of Michigan with one count of wire fraud.  He made his initial appearance today before U.S. Magistrate Judge David R. Grand.

The complaint alleges that George was the nexus in an attempt to obtain approximately $3.1 million in PPP loans through applications to insured financial institutions, and others, on behalf of 19 different companies.  The complaint alleges that George provided false and misleading documents about certain of the companies’ respective business operations and payroll expenses.  As an example of such false documentation, the complaint alleges that George submitted identical wage information and employee count records for two separate companies. One of those companies has allegedly not been operational since 2015.

The CARES Act is a federal law enacted March 29.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding. The CARES Act also authorizes the SBA to provide Economic Injury Disaster Loans (EIDL) of up to $2 million to eligible small businesses experiencing financial disruption due to the COVID-19 pandemic.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the FBI and the SBA-OIG.  Trial Attorney Patrick J. Suter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney John K. Neal of the Eastern District of Michigan are prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

A Michigan man was arrested today in connection with a wire fraud scheme involving $3.1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Steven M. D’Antuono, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, and Inspector General Hannibal Mike Ware of the SBA’s Office of the Inspector General (OIG), made the announcement.

Antonio George, 44, of Novi, Michigan, was charged with a criminal complaint, unsealed today, in the Eastern District of Michigan with one count of wire fraud.  He made his initial appearance today before U.S. Magistrate Judge David R. Grand.

The complaint alleges that George was the nexus in obtaining approximately $3.1 million in PPP loans through applications to insured financial institutions, and others, on behalf of 19 different companies.  The complaint alleges that George provided false and misleading documents about certain of the companies’ respective business operations and payroll expenses.  As an example of such false documentation, the complaint alleges that George submitted identical wage information and employee count records for two separate companies. One of those companies has allegedly not been operational since 2015.

“Small businesses across Michigan have received loans from the Paycheck Protection Program, and these loans have kept these businesses alive,” stated United States Attorney Schneider. “Every dollar stolen from the program is a dollar stolen from struggling businesses in need.  So to the scammers, if you think law enforcement isn’t paying attention to the damage you’re doing to Michigan business owners, you’re dead wrong and we will be coming after you.”  

The CARES Act is a federal law enacted March 29.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding. The CARES Act also authorizes the SBA to provide Economic Injury Disaster Loans (EIDL) of up to $2 million to eligible small businesses experiencing financial disruption due to the COVID-19 pandemic.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the FBI and the SBA-OIG.  Trial Attorney Patrick J. Suter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney John K. Neal of the Eastern District of Michigan are prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

# # #