Eastern District of Michigan

A CEO and four physicians were charged today in a superseding indictment as part of an investigation into a $200 million health care fraud scheme that involved a network of Michigan and Ohio pain clinics, laboratories and other medical providers.  The superseding indictment returned yesterday charges an additional wire fraud conspiracy, adds an additional count of money laundering, and contains new allegations regarding the distribution of over 4.2 million medically unnecessary dosage units of controlled substances and the administration of medically unnecessary injections that resulted in patient harm.    

Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Division, 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 and Chief Don Fort of IRS Criminal Investigation (IRS CI) made the announcement.

Mashiyat Rashid, 37, of West Bloomfield, Michigan; Spilios Pappas, 61, of Monclova, Ohio; Joseph Betro, 57, of Novi, Michigan; Tariq Omar, 61, of West Bloomfield, Michigan; and Mohammed Zahoor, 51, also of Novi, were each charged with one count of conspiracy to commit health care fraud and wire fraud.  Rashid was additionally charged with four counts of health care fraud, one count of conspiracy to defraud the United States and pay and receive health care kickbacks, one count of payment of kickbacks, one count of receipt of kickbacks and two counts of money laundering.  Pappas, Betro, Omar, and Zahoor were each additionally charged with one count of health care fraud.  All of the defendants were previously charged in an original indictment on July 6, 2017, which charged health care fraud and kickback conspiracies, substantive counts of health care fraud and payment or receipt of kickbacks, and one count of money laundering.  The case is pending before U.S. District Judge Denise Page Hood of the Eastern District of Michigan.  Trial has been scheduled to begin on July 31 before Judge Hood. 

“We are facing the deadliest drug crisis in American history,” said Attorney General Sessions. “Sadly, some corporate executives and medical professionals continue to exploit vulnerable patients and the American taxpayer for profit.  With one American dying of a drug overdose every nine minutes, this superseding indictment reflects the Department of Justice’s determination to prosecute those who engage in opioid-related fraud.  These cases are extremely important. Since 2017, the Department charged more than 150 doctors for opioid-related crimes. Today’s indictment reflects our continued dedication to these important cases.  I want to thank our FBI, HHS-OIG and IRS-CI agents, DOJ attorneys, and everyone else who helped investigate and prosecute this case.”

“This multi-agency investigation has led to one of the largest healthcare fraud and illegal distribution of prescription drugs indictments this district has ever seen,” said U. S. Attorney Schneider.  “I commend the hard work and dedication of the Health Care Fraud Strike Force and law enforcement agencies for shutting down this network of individuals whose greed resulted in millions of dosages of opioids to be sold on the streets of our communities and millions of dollars in loss to Medicare.”

“It is a sad day when a physician allows greed to drive their moral compass and willfully violate their Hippocratic Oath to protect and treat their patients,” said IRS CI Chief Fort.  “The conduct described in this indictment, particularly the 4.2 million medically unnecessary dosages and administered injections, provides alarming insight into the growing opioid epidemic our nation is facing.  IRS CI will continue to provide resources and financial expertise to work with our law enforcement partners to fight this crisis, disrupting any financial benefit received from the sale of dangerous prescription drugs that plague our communities.”

The superseding indictment alleges that Rashid was the CEO of Tri-County Wellness, and owned, controlled and operated numerous pain clinics, laboratories and other providers in Michigan and Ohio.  As set forth in the superseding indictment, from 2008 until their arrest in 2017, Rashid, Pappas, Betro, Omar, Zahoor and other physicians working in Rashid’s clinics conspired to obtain patients by prescribing over 4.2 million dosage units of medically unnecessary controlled substances, including oxycodone, hydrocodone and oxymorphone, to Medicare beneficiaries, some of whom were addicted to narcotics.  Some of these opioids were resold on the street, the superseding indictment alleges. 

The superseding indictment further alleges that Rashid, Pappas, Betro, Omar, Zahoor and others required Medicare beneficiaries who wished to obtain controlled substances to submit to expensive, medically unnecessary and painful injections.  Rashid paid Pappas, Betro, Omar, Zahoor and other physicians based on the number of injections that Medicare paid for, regardless of the medical necessity of the injections.  In turn, Pappas, Betro, Omar and Zahoor conducted these repetitive and unnecessary injections on patients in order to increase revenue for Rashid, themselves and their co-conspirators.

When Medicare conducted a medical review of the injection claims, it determined that 100 percent of the claims were not eligible for Medicare reimbursement and summarily suspended the medical billing privileges of one of the pain clinics involved in the scheme.  In order to conceal the continued billing of these fraudulent claims to Medicare, the superseding indictment alleges, Rashid, Pappas, Betro, Omar, Zahoor and others created new shell companies that they enrolled in Medicare to keep billing the same fraudulent claims, often changing only the name of the company on the door to the medical practice and/or inventing new suite numbers to conceal the continuation of the fraudulent practices at the same location. 

Rashid also owned a diagnostic laboratory and caused Pappas, Betro, Omar and Zahoor to order medically unnecessary urine drug testing from the laboratory, the superseding indictment alleges.  When Medicare conducted a medical review of claims submitted by the laboratory, it determined that 95 percent of the claims were not eligible for Medicare reimbursement and ordered the diagnostic laboratory to repay in excess of $6.9 million to Medicare, court documents submitted in connection with Rashid’s detention hearing show.  In order to conceal the continued billing of these fraudulent urine drug testing claims to Medicare, the superseding indictment alleges, Rashid and others created a new corporate entity that they enrolled in Medicare so that Pappas, Betro, Omar, Zahoor and others could keep ordering the same fraudulent urine drug testing claims through this new entity. 

In addition, the superseding indictment alleges that Rashid paid illegal health care kickbacks to obtain patients and solicited illegal kickbacks and bribes for Pappas, Betro, Omar, Zahoor and others to refer Medicare beneficiaries to specific third-party home health agencies, laboratories and diagnostic providers even though those referrals were medically unnecessary. 

Finally, the superseding indictment alleges Rashid committed two counts of money laundering in connection with a $6.6 million wire transfer on April 13, 2016, and the withdrawal of $500,000 in cash on July 10, 2017.  The superseding indictment alleges that Rashid transferred the proceeds derived from the conspiracy to live an extravagant lifestyle and spend millions of dollars on luxury clothes from retailers like Hermes, rare Richard Mille watches, and exotic automobiles such as a Lamborghini and Rolls Royce Ghost; a mansion and other real estate in the Detroit, Michigan area; and to sit courtside or in the first row of NBA basketball games, including the NBA Finals.  Evidence submitted in connection with Rashid’s detention hearing further showed that Rashid attempted to conceal the proceeds of the fraud by withdrawing $500,000 in cash on July 10, 2017 and hiding the cash in plastic bags and handbags in the closet of his house. 

Rashid, Pappas, Betro, Omar and Zahoor were charged along with Yasser Mozeb, 35, of Oakland County, Michigan and Abdul Haq, 72, of Ypsilanti, Michigan, in an indictment unsealed on July 6, 2017.  Mozeb and Haq have pleaded guilty, along with three other defendants. 

An indictment 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, HHS-OIG and IRS CI.  Trial Attorney Jacob Foster of the Criminal Division’s Fraud Section is prosecuting the case. 

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion. 

An indictment was unsealed today charging three pharmacists, one doctor and two other individuals with conspiracy to illegally distribute prescription drugs, U.S. Attorney Matthew Schneider announced today.

Attorney General Jeff Sessions joined U.S. Attorney Schneider in the announcement, along with Michael Bouchard, Oakland County Sheriff, Special Agent in Charge Timothy J. Plancon, U.S. Drug Enforcement Administration, Detroit Field Division; Special Agent in Charge Manny Muriel, Internal Revenue Service, Criminal Investigations; and Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation, Detroit Division.

Charged in the indictment are:

Pharmacist Enitan Sodiya-Ogundipe, 42, of Novi

Pharmacist Amir Rafi, 49, of Farmington Hills

Pharmacist Abiodun Fabode, 56, of Chesterfield Township

Dr. Vasan Deshikachar, 50, of Boca Raton, Florida

Niesheia Tibu, 44, of Canton

Andrei Tibu, 30, of Canton

The indictment alleges that from January 2015 through March 2018, these pharmacists and doctor conspired with the other defendants to issue and dispense a large number of prescription opioids for supposed patients, who did not have a legitimate medical need for the drugs.  Deshikachar primarily prescribed oxycodone and oxymorphone, two of the most addictive opioids that have high street value. The Tibus would take the supposed patients to Precare Pharmacy, Global Health Pharmacy and Friendz Pharmacy, where Sodiya-Ogundipe, Rafi and Fabode would dispense the drugs.  The Tibus then obtained the drugs and sold them on the street.

According to the indictment, the pharmacies dispensed more than 344,737 dosage units of Schedule II opioid prescriptions during the course of the conspiracy.  These controlled substances had a conservative street value in excess of $9,600,000.

“It's incredible but true that we have seen that some of our trusted doctors, pharmacists, and medical professionals have chosen to violate their oaths and exploit our unprecedented drug crisis for profit,” Attorney General Jeff Sessions said. “Last summer, I sent a dozen of our top federal prosecutors to focus solely on the problem of opioid-related health care fraud in places where the epidemic was at its worst—including Eastern Michigan. Under the leadership of U.S. Attorney Matthew Schneider, our prosecutors in the Eastern District of Michigan have already made great progress in this effort—and today we continue that progress. In this case, three pharmacists and one doctor allegedly conspired to distribute nearly $10 million worth of opioids into the community, potentially spreading addiction and causing untold damage to Michigan families. I want to thank the FBI, DEA, our fabulous prosecutors Brandy McMillion and Brant Cook, the IRS, the Oakland County Sheriff’s office and all of our state and local partners for their hard work on this case. As this indictment makes clear, we are determined to reduce opioid fraud and to ultimately end the drug epidemic.”

“Diversion of prescription pills to the street market is a direct cause of the current opioid epidemic facing our country,” U.S. Attorney Schneider said. “We are focusing on charging doctors, pharmacists and the networks that are contributing to the opioid problem in our district.”

“As we are in the midst of the worst opioid epidemic in our lifetime, it is important we team up with our federal partners and target those who peddle this death,” said Sheriff Michael J. Bouchard. “We will go after street dealers, physicians, and pharmacists who choose to violate the law. I am proud of this team who went after this illegal operation and held those responsible accountable for their dangerous criminal behavior.”

“Investigators uncovered the hidden layers of illegal pharmaceutical trafficking conducted by members of the Tibu organization,” stated Special Agent in Charge Plancon.  “These dealers illegally prescribed and sold OxyContin and other opioids and will now be held responsible for the devastation caused to families in southeastern Michigan and beyond.  The DEA will continue to target all large scale drug traffickers especially those contributing to the opioid epidemic in America.” 

“IRS Criminal Investigation contributes our resources and financial expertise working together with our law enforcement partners to fight the opioid epidemic,” stated IRS-Criminal Investigation Special Agent in Charge Manny Muriel.  “We will continue to fight this crisis, disrupting any financial benefit received from the sale of dangerous prescription drugs that plague our communities.”

Sodiya-Ogudipe was also charged with money laundering for engaging in monetary transactions with the criminal cash proceeds from her illicit pharmacy business. 

This case is being prosecuted by Assistant United States Attorneys Brandy R. McMillion and A. Brant Cook.  The Eastern District of Michigan is one of the twelve districts included in the Opioid Fraud Abuse and Detection Unit, a Department of Justice initiative created by Attorney General Sessions, that uses data to target and prosecute individuals that are contributing to the nation’s opioid crisis.

The case was investigated by special agents and task force officers of the DEA, the Oakland Country Sheriff’s Office, the Internal Revenue Service, and the Federal Bureau of Investigation.

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.

A Detroit man pleaded guilty yesterday to theft of government funds, U.S. Attorney Matthew Schneider announced.

Schneider was joined in the announcement by Resident Agent in Charge Adam Lowder, Social Security Administration Office of the Inspector General, Office of Investigations, Detroit Field Division.

Pleading guilty was Claude Hopkins, 62.

According to court records, Hopkins’ father passed away in the summer of 1999.  He was receiving Social Security retirement insurance benefits at the time and because SSA was never informed of his death, SSA continued to pay those benefits into a bank account in his name.  The erroneous payments continued for approximately 17 years—$253,327.00 in total.  Hopkins then unlawfully converted those benefit payments by forging his late father’s name on dozens of checks.

In 2016, as part of the Medicare Non-Utilization Project, an SSA initiative designed to fight fraud by contacting elderly beneficiaries who have not used their Medicare in three or more years, SSA made contact with Mr. Hopkins, who reported that his father was “out of town.”  Subsequent attempts to reach Hopkins or his father were unsuccessful and a fraud referral was then made to the agency’s Office of the Inspector General.  SSA-OIG ultimately confirmed that Hopkins’ father was deceased. 

A sentencing hearing is set for September 5, 2018, at 2:00PM in front of U.S. District Judge David M. Lawson.  Hopkins faces a statutory maximum of 10 years in prison and will be required to pay full restitution to the Social Security Administration.

This case was investigated by special agents of the Social Security Administration Office of the Inspector General and prosecuted by Special Assistant U.S. Attorney Ryan A. Particka.

A federal jury found a physician guilty today for her role in a scheme involving approximately $8.9 million in fraudulent Medicare claims for home health care and other physician services that were procured through the payment of kickbacks, were not medically necessary, not actually provided or, in some cases, were provided by the defendant, who was not a licensed physician during the conspiracy. 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy Slater 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 made the announcement.

Millicent Traylor, 47, of West Bloomfield, Michigan, was convicted of one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive kickbacks in connection with Medicare beneficiaries, and five counts of health care fraud following a four-day trial.  Sentencing has been scheduled for Sept. 27, before U.S. District Judge Robert Cleland of the Eastern District of Michigan, who presided over the trial. 

According to evidence presented at trial, from 2011 to 2016, Traylor and her co-conspirators engaged in a scheme to defraud Medicare of approximately $8.9 million through fraudulent home health and physician claims.  The evidence showed that Traylor, who was unlicensed at the time, acted as a physician for these companies, providing services that were not medically necessary and that were billed to Medicare as if they were provided by a licensed physician. The evidence further showed that Traylor conspired to cause billing to Medicare for services that were not rendered.  To make it appear that these services were medically necessary and were provided, Traylor and her co-conspirators falsified medical records and signed false documents.  Additionally, the evidence at trial showed that Traylor and her co-conspirators paid and received kickbacks in exchange for referring Medicare beneficiaries to serve as patients at the clinics.  The trial evidence also revealed that Traylor fraudulently signed the names of licensed physicians on prescriptions for opioid medications, such as oxycodone, as a means of inducing patient participation in the scheme. 

Four defendants were charged in this matter.  Jacklyn Price, 33, of Shelby Township, Michigan, and Muhammad Qazi, 47, of Bloomfield Hills, Michigan, pleaded guilty in April 2017 and are awaiting sentencing.  Christina Kimbrough, M.D., 39, of Wayne, Michigan, pleaded guilty in November 2017 and is awaiting sentencing. 

This case was investigated by the HHS-OIG and the FBI.  Trial Attorneys Stephen Cincotta and Steven Scott of the Criminal Division’s Fraud Section are prosecuting the case. 

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

A Grosse Pointe Park resident was sentenced today to 108 months in federal prison after having been convicted earlier this year by a jury on charges of wire fraud, transportation of hazardous material, and false statements in a scheme involving the distribution of body parts, some that tested positive for diseases, including HIV and hepatitis, announced United States Attorney Matthew Schneider.                             

Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation, Detroit Division; Regional Special Agent-in-Charge Thomas J. Ullom, U.S. Department of Transportation - Office of Inspector General; Officer in Charge Elizabeth Harton of the Centers for Disease Control and Prevention, Division of Global Migration & Quarantine and  Arizona Attorney General Mark Brnovich.

Sentenced was Arthur Rathburn, 63.  Rathburn was convicted on 7 of the 9 wire fraud counts and the count alleging illegal transportation of hazardous material. He was acquitted of the false statement count.

“We hope this sentence brings closure to the victims of Arthur Rathburn,” stated United States Attorney Matthew Schneider.  “Rathburn’s disgraceful conduct not only put the health of innocent people at risk, he showed a complete lack of regard for the donors and their families, who are all victims.”

“Arthur Rathburn carried out a long term, complex scheme to increase his personal profits, showing little respect to the donors and  risking the welfare of those in the medical and dental community relying on human remains free from hepatitis, HIV, and other dangerous diseases,” said Timothy R. Slater, Special Agent in Charge of the Detroit FBI. “His sentence represents the FBI’s commitment to partner with our federal and state colleagues in the U.S. Department of Transportation, the Centers for Disease Control and Prevention, and the Arizona Attorney General, to ensure the community is protected from fraudulent actions, regardless of how they are undertaken and irrespective of the sophistication of the fraud.  The FBI continues to work collectively across the country to find and bring those profiteering in the anatomical donation industry to justice.” 

According to evidence presented during the two-week trial, Arthur Rathburn was the owner and operator of International Biological, Inc. (“IBI”).  IBI’s primary function was renting human body parts, such as heads and torsos, to customers who used the remains for medical or dental training.   Rathburn engineered a scheme to defraud in which IBI obtained donated bodies and body parts from suppliers, which IBI would then typically dismember and rent out to customers for medical or dental training.  Rathburn knew that the donors of a number of these bodies had died of an infectious disease, or that the bodies had tested positive for an infectious disease.  IBI sometimes obtained diseased remains from their suppliers at a reduced cost, due to the fact that end users of human remains generally reject infectious bodies and body parts for use in medical or dental training.

It was part of the scheme that Rathburn would provide human remains to IBI’s customers, falsely representing to those customers that the remains were free of certain infectious diseases.  Rathburn was aware that IBI’s customers would not accept remains infected with certain diseases.  The scheme included directly profiting from infectious remains supplied to unwitting customers in violation of contractual agreements and failing to disclose to customers that IBI ignored industry standard precautions to prevent potential cross-contamination between infectious and non-infectious remains.

Evidence further demonstrated that Arthur Rathburn willfully caused to be delivered hazardous material regulated by the Department of Transportation, namely a human head of an individual known to have died from bacterial sepsis and aspiration pneumonia, to Delta Cargo, an air carrier, for transportation in air commerce in violation of federal regulations.  In violation of these regulations, the human head was packaged in a trash bag placed within a camping cooler.  Seven other human heads were also part of the shipment and packed in the same manner.  Large quantities of liquid blood were found within the coolers.  

The investigation in this case was handled by the Federal Bureau of Investigation, the Centers for Disease Control and Prevention, the Arizona Attorney General’s Office, and the U.S. Department of Transportation, Office of Inspector General with support from U.S. Customs and Border Protection and Homeland Security Investigations. Special thanks are also due to the Wayne County Medical Examiner’s Office for their critical assistance.  The case is being prosecuted by Assistant U.S. Attorneys John K. Neal and Timothy J. Wyse.

An indictment was unsealed earlier today charging Larry A. Holley, 61, of Grand Blanc and Patricia Enright, a.k.a. Patricia Gray, 57, of Flint, with conspiracy to commit wire and mail fraud, wire fraud, mail fraud, and money laundering, United States Attorney Matthew Schneider announced today.

Joining Schneider in the announcement was Manny Murial, Special Agent in Charge, Internal Revenue Service – Criminal Investigation Division.

According to the indictment, Enright and Holley, who is a pastor at Abundant Life Ministries in Flint, operated Treasure Enterprise, LLC, which fraudulently purported to provide financial planning and asset management services to investors.  Holley and Enright solicited many of the victim investors at financial seminars held at churches throughout Michigan and other states. 

The indictment alleges that in order to lure the potential investors, many of whom took their money out of legitimate investments–such as individual retirement accounts (IRAs) and 401Ks–Holley and Enright promised high, guaranteed returns, and the safe return of an investor’s entire principal at the end of the investment period.  The money, however, was not invested and did not earn the profits to pay the guaranteed interest payments.  Instead, Holley and Enright, and others directed by them, simply deposited the victim investor funds into Treasure’s bank accounts and then used the money for their personal benefit, for the benefit of Abundant Life Ministries, to make interest and principal payments to earlier investors, and to pay other Treasure employees.

The two defendants made their initial appearances in federal court in Flint on Monday. 

An indictment is only a charge and is not evidence of guilt.  A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

The case is being prosecuted by Assistant United States Attorneys Ann Nee and Anthony Vance.

The owner of a Michigan home health agency pleaded guilty today to charges for his role in a scheme involving Medicare claims for home health services that were procured through the payment of illegal kickbacks.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew J. Schneider of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Field Office 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 made the announcement.

Atheir Amarrah, 43, of West Bloomfield, Michigan, the owner of Prompt Care Home Health Services Inc. of Bloomfield Hills, Michigan, pleaded guilty to one count of conspiracy to pay and receive health care kickbacks in connection with Medicare beneficiaries and to four substantive counts of paying health care kickbacks before U.S. District Judge Judith E. Levy of the Eastern District of Michigan.  Sentencing is scheduled for Sept. 25, before Judge Levy. 

As part of his guilty plea, Amarrah admitted that he paid illegal kickbacks to recruiters in exchange for Medicare beneficiary referrals and billed Medicare for claims procured through these illegal kickbacks.  The scheme is alleged to have resulted a loss of up to $1.8 million to the Medicare program by submitting claims to Medicare from 2013 through 2017 related to Medicare beneficiary information that he obtained by paying illegal kickbacks.  The loss amount will be determined by the court at sentencing.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  Trial Attorneys Jacob Foster and Howard Locker of the Fraud Section are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

The third, and final defendant, in a wide-ranging identity theft scheme involving fraudulent student loan application and tax returns was sentenced today, announced Untied States Attorney Matthew Schneider.

Schneider was joined in the announcement by Special Agent in Charge Thomas Utz, U.S. Department of Education, Office of Inspector General / Investigations, Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation, Detroit Division and Special Agent in Charge Manny Muriel, Internal Revenue Service, Criminal Investigations.

Previously, co-defendants Timothy Wilcox, 45 and Paul Adams, 61, both from Jackson, were sentenced to 77 months and 15 months respectively and were ordered to pay restitution in the amount of $1,390,50, all to be paid to the Department of Education as well as the Internal Revenue Service. Meanwhile, earlier today, Katrina Duling, 46, also from Jackson, received one day in custody followed by three years of supervised release and ordered to pay restitution in the amount of $775,312. 

According to court records, in December, 2014, defendants Wilcox, Adams and Duling participated a scheme by which they took personal identifying information (PII) of various individuals, including their social security numbers, or recruited other individuals to provide this information to them, which they used to fraudulently apply for and receive federal student financial aid in the name of those individuals. The defendants did not intend to use, nor did they use, the funds obtained for educational purposes as represented in the fraudulent applications In addition, the defendants used the same PII to file false federal income tax returns to claim and receive federal income tax refunds. 

The defendants utilized in excess of one hundred individuals’ PII and defrauded the United States Department of Education, in excess of $1,000,000 and defrauded the IRS in excess of $400,000 through fraudulent tax returns. 

“Student loan programs are intended to assist students in obtaining a higher education and scams like this harm both students and taxpayers,” Schneider said. 

“Federal student aid exists so that individuals can make their dream of a higher education a reality. It’s not a personal slush fund. That’ why ensuring that those who steal student aid or participate in student aid fraud rings are stopped and held accountable for their criminal actions is a big part of our mission,” said Thomas D. Utz, Jr., Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Midwestern Regional Office. “I’m proud of the work of the Office of Inspector General and our law enforcement partners for stopping this fraud ring and look forward to continuing to work together to protect Federal student aid funds from such calculated plunder.”  

“The actions of Katrina Duling, along with the other two defendants, undermine the nation’s confidence in the security of their personal information, particularly when used to falsely obtain loans and receive tax returns they are not entitled to,” said Timothy R. Slater, Special Agent in Charge of FBI Detroit. “By prosecuting cases like this, the FBI, The U.S. Department of Education, and the Internal Revenue Service are sending a clear message to those attempting to steal and tarnish the identities of the general public that their actions will not be tolerated.”

IRS-CI Special Agent in Charge Muriel stated, “The defendants in this case defrauded the public and took advantage of a system which is intended to help students obtain a higher education.  IRS CI special agents, working with our federal partners, once again outsmarted the criminals who thought they could get away with it.  Just know that if you try to game the system, you will be caught and held accountable.”

This case was investigated by agents of the Department of Education, Office of Inspector General, the Federal Bureau of Investigation and the Internal Revenue Service.  This case was prosecuted by Assistant United States Attorney Timothy Wyse.

Former Detroit Police Department Officer Jamil Martin was sentenced yesterday to 20 months’ imprisonment for accepting a bribe from an owner of an automobile collision shop in exchange for referring stolen and abandoned vehicles recovered in the City of Detroit to that shop, United States Attorney Matthew Schneider announced today.

Schneider was joined in the announcement by Timothy Slater, Special Agent in Charge, Federal Bureau of Investigation, Patricia Armstrong, U.S. Postal Inspector in Charge, U.S. Postal Inspection Service, Detroit Division and Chief James Craig, Detroit Police Department.  The defendant was actively employed with the Detroit Police Department at the time of the offense.

Jamil Martin, age 47, was sentenced by U.S. District Judge Robert Cleland. Martin previously pleaded guilty to one count of extortion.

According to the facts alleged in the indictment and further developed at the plea hearing and in sentencing briefing, Martin accepted cash payments from the owner/operator of a Detroit collision shop in exchange for referring abandoned vehicles to that shop for repairs.

This is the fourth defendant to have been sentenced as a result of this investigation.  The others awaiting sentencing or a trial are:

• Charles Wills, age 52, pleaded guilty to two counts of Extortion charged in a Superseding Indictment.

• Deonne Dotson, age 45, is awaiting trial.

All of the Officers were charged with engaging in extortion for using their official positions as Police Officers to refer cars to certain collision shops in exchange for cash payments.

“The vast majority of Detroit Police Officers are courageous, dedicated public servants and should not be overshadowed by the acts of the few officers who accepted these bribes,” U.S. Attorney Schneider said.

"Certainly we appreciate the partnership of the Federal Bureau of Investigations, U.S. Postal Inspection Service, and the United States Attorney’s Office. While the actions of this officer are troubling, we are relieved that this sentencing has brought some closure to a long standing issue that has plague this department." said Chief Craig.

“The actions of former DPD Officer Martin are disheartening to the many men and women in law enforcement, who work hard every day with integrity and commitment,” said Timothy R. Slater, Special Agent in Charge of FBI Detroit.  “The FBI will continue to dedicate significant resources to the Detroit Police Department and all law enforcement partners toward investigating anyone who tarnishes their reputation by straying from his or her oath.”

The investigation was conducted by the FBI, the U.S. Postal Inspection Service, Detroit Police Department and the following agencies from the FBI Detroit Area Corruption Task Force: Michigan State Police and U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operation Division.

The FBI Detroit Area Corruption Task Force is comprised of personnel from the Detroit Division of the FBI; Michigan State Police; Michigan Department of Attorney General; Detroit Police Department; U.S. Internal Revenue Service, Criminal Investigation Division; U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operations Division; U.S. Postal Inspection Service; U.S. Department of Labor, Office of the Inspector General, Office of Labor Racketeering and

Fraud Investigations; U.S. Department of Housing and Urban Development, Office of the Inspector General; U.S. Department of Transportation, Office of the Inspector General; U.S. Department of Homeland Security, Office of the Inspector General; U.S. Department of Education, Office of the Inspector General; and U.S. Environmental Protection Agency, Office of the Inspector General.

The case is being prosecuted by Assistant United States Attorneys Sarah Resnick Cohen and Craig A. Weier.

The owner of a Michigan home health agency pleaded guilty today to fraud charges for his role in a scheme involving approximately $8 million in fraudulent Medicare claims for home health services that were procured through the payment of illegal kickbacks.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew J. Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy Slater of the FBI’s Detroit Field Office 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 made the announcement.

Zahir Shah, 48, of West Bloomfield, Michigan, pleaded guilty to one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to pay and receive kickbacks in connection with Medicare beneficiaries before U.S. District Judge Avern Cohn of the Eastern District of Michigan.  Sentencing will be scheduled before Judge Cohn. 

As part of his guilty plea, Shah admitted that he submitted false certifications to enroll and stay enrolled as a Medicare provider.  Shah further admitted that he paid illegal kickbacks to recruiters in exchange for Medicare beneficiary referrals and billed Medicare for claims procured through these illegal kickbacks.  According to court documents, Shah caused a loss of approximately $8 million to the Medicare program by submitting false and fraudulent claims to Medicare from 2007 through 2017.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  Trial Attorneys Rebecca Szucs and Howard Locker of the Fraud Section are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

An indictment was unsealed earlier today charging Martin Winterkorn, 70, the former chairman of the management board of Volkswagen AG (VW), with conspiracy and wire fraud in connection with VW’s long-running scheme to cheat U.S. diesel vehicle emissions requirements.

Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew J. Schneider of the Eastern District of Michigan, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, EPA Administrator Scott Pruitt, and Special Agent in Charge Timothy R. Slater of FBI’s Detroit Division, made the announcement. 

The superseding indictment was issued by a federal grand jury sitting in the Eastern District of Michigan and charges Winterkorn with four counts of violating federal law.  The first count charges that Winterkorn conspired with other senior VW executives and employees to defraud the United States, defraud VW’s U.S. customers and violate the Clean Air Act by making false representations to regulators and the public about the ability of VW’s supposedly “clean diesel” vehicles to comply with U.S. emissions requirements. The remaining three counts charge Winterkorn with wire fraud in connection with the scheme.

“If you try to deceive the United States, then you will pay a heavy price,” said Attorney General Sessions. “The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company.  These are serious allegations, and we will prosecute this case to the fullest extent of the law.  I want to thank the Criminal Division’s Fraud Section, the Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Eastern District of Michigan as well as our partners at the EPA, FBI and in Germany for their hard work on this important case.” 

“Volkswagen deceived American regulators and defrauded American consumers for years,” said U.S. Attorney Schneider.  “The fact that this criminal conduct was allegedly blessed at Volkswagen’s highest levels is appalling.  The U.S. Attorney’s Office is committed to pursuing accountability for corporate crimes, and the Winterkorn prosecution is a reflection of that commitment.”

“The indictment of former VW CEO Martin Winterkorn should send a clear message that EPA and its law enforcement partners will seek to hold corporate officers accountable for alleged criminal activities at their company,” said EPA Administrator Pruitt.

“Today’s indictment of Volkswagen AG’s former CEO, Martin Winterkorn, sends a clear message that businesses both here in the United States and abroad are expected to conduct their business honestly,” said FBI Special Agent in Charge Slater.  “Accountability will be sought for any individuals or corporations that cheat American consumers or harm the environment by circumventing the standards set by our legal system.” 

The indictment of Winterkorn represents the most recent charges in an ongoing investigation by U.S. criminal authorities into unprecedented emissions cheating by VW.  In March 2017, VW pleaded guilty to criminal charges that it deceived U.S. regulatory agencies, including the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), by installing so-called defeat devices in diesel vehicles emissions control systems that were designed to cheat emissions tests.  The defeat devices consisted of software designed to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or being driven on the road under normal driving conditions, in which case harmful nitrogen oxide (NOx) emissions increased significantly. 

As part of its plea agreement with the Department, VW paid a criminal penalty of $2.8 billion.  VW also agreed to the imposition of an independent corporate compliance monitor for the duration of its probation, which is at least three years.  Subsequently, Larry Thompson was appointed as VW’s monitor.

Winterkorn, who served as VW’s management board chairman and thus VW’s highest ranking executive from January 2007 until September 2015, is the ninth individual against whom U.S. criminal authorities have announced charges in connection with this matter.  Two former VW engineers, Oliver Schmidt, 48, and James Liang, 63, both German citizens, pleaded guilty to participating in the conspiracy alleged in the indictment and are currently serving sentences of 84 months and 40 months in prison, respectively, imposed by U.S. District Judge Sean F. Cox of the Eastern District of Michigan.  Five additional defendants, including former VW executives and senior managers, were indicted in January 2017, but have not been apprehended.  Similar to Winterkorn, each of them is believed to be a German citizen and to reside in Germany.  Finally, one former manager of VW’s subsidiary Audi AG, Giovanni Pamio, 61, an Italian citizen, has been charged by complaint and currently remains in Germany pending extradition.  

The indictment of Winterkorn alleges that he was informed of VW’s diesel emissions cheating in May 2014 and again in July 2015.  The indictment further alleges that Winterkorn, after having been clearly informed of the emissions cheating, agreed with other senior VW executives to continue to perpetrate the fraud and deceive U.S. regulators. 

As the indictment sets forth, in the spring of 2014 a study commissioned by the International Council on Clean Transportation (the ICCT study) tested road emissions of two VW diesel vehicles sold in the United States.  The results of the study showed significantly elevated NOx levels of the two VW vehicles, with one emitting up to 35 times above the allowable legal limit.  VW management quickly learned of the results of the study and discussed potential consequences flowing from the revelations.  Specifically, the indictment alleges that Bernd Gottweis, a senior manager then responsible for product safety issues, met with employees of the engine development department to discuss the ICCT study.  Upon learning of the facts revealed by the study and the risks facing the company, Gottweis remarked that he needed to speak with Winterkorn immediately.  Shortly thereafter, on May 22, 2014, Gottweis wrote a one-page memorandum describing the results of the ICCT study and warning that VW could not give a well-grounded explanation for the dramatically increased NOx emissions and that it could be assumed that the authorities would investigate whether the vehicles contained test-recognition software.  Gottweis’s memorandum was then attached to a cover note authored by a then-senior VW executive, and addressed to Winterkorn. 

As alleged in the indictment, following publication of the ICCT study in the spring of 2014 the company knowingly continued to deny the existence of emissions cheating in its vehicles until late summer 2015.  Instead, VW sought to deceive U.S. regulators about the causes for the significant discrepancies between emissions tests and emissions values measured on the road.

By the summer of 2015, however, the indictment alleges that U.S. regulators threatened to withhold authorization for VW to sell Model Year 2016 diesel vehicles in the United States until VW answered their questions about the discrepancies uncovered by the ICCT study.  The diesel situation in the United States became increasingly alarming to VW senior management, culminating in a meeting on July 27, 2015 at VW’s headquarters in Wolfsburg, Germany, internally referred to as the “damage table meeting.”  During that meeting, which was chaired by Winterkorn and attended by several senior VW executives, engine development department employees, with the help of a PowerPoint presentation, described to the attendees, and Winterkorn specifically: (1) how VW was deceiving U.S. regulators, including precisely what information had been disclosed and what had not yet been disclosed; and (2) the potential consequences of VW being caught cheating. 

The indictment alleges that upon being presented with those and other facts, Winterkorn did not order his subordinates to disclose the cheating but instead agreed to continue to deceive U.S. authorities.  Part of that strategy, which Winterkorn allegedly approved at the July 27, 2015 meeting, and which informed VW’s steps over the next several weeks, included sending Oliver Schmidt to meet with a senior CARB official on Aug. 5, 2015, in order to obtain the release of the Model Year 2016 vehicles without revealing the fundamental reason for the higher NOx measurements on the road: that software had been intentionally installed in VW vehicles so the vehicles could detect and evade emissions testing.  Consistent with Winterkorn’s alleged directive from the July 27 meeting, VW executives also approved a script for an Aug. 19, 2015 meeting with CARB that continued to conceal VW’s cheating.  At the meeting, however, in direct contravention of the instructions from his superiors, a VW employee, in answering a direct question from CARB, revealed that VW had been using software in its 2.0 liter diesel vehicles to cheat U.S. emissions tests.  On Sept. 3, 2015, VW officially admitted that it had installed defeat devices in various 2.0 liter diesel vehicles sold in the United States.

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

FBI and EPA Criminal Investigation Division are investigating the case.  The prosecution is being handled by Deputy Chief Benjamin D. Singer and Trial Attorney David M. Fuhr from the Criminal Division’s Fraud Section, White Collar Crime Unit Chief John K. Neal of the U.S. Attorney’s Office for the Eastern District of Michigan and Senior Trial Attorney Jennifer L.  Blackwell from the DOJ’s Environment and Natural Resources Division.  The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.

An indictment was unsealed earlier today charging Martin Winterkorn, 70, the former chairman of the management board of Volkswagen AG (VW), with conspiracy and wire fraud in connection with VW’s long-running scheme to cheat U.S. diesel vehicle emissions requirements.

Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew J. Schneider of the Eastern District of Michigan, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, EPA Administrator Scott Pruitt, and Special Agent in Charge Timothy R. Slater of FBI’s Detroit Division, made the announcement. 

The superseding indictment was issued by a federal grand jury sitting in the Eastern District of Michigan and charges Winterkorn with four counts of violating federal law.  The first count charges that Winterkorn conspired with other senior VW executives and employees to defraud the United States, defraud VW’s U.S. customers and violate the Clean Air Act by making false representations to regulators and the public about the ability of VW’s supposedly “clean diesel” vehicles to comply with U.S. emissions requirements. The remaining three counts charge Winterkorn with wire fraud in connection with the scheme.

“If you try to deceive the United States, then you will pay a heavy price,” said Attorney General Sessions. “The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company.  These are serious allegations, and we will prosecute this case to the fullest extent of the law.  I want to thank the Criminal Division’s Fraud Section, the Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Eastern District of Michigan as well as our partners at the EPA, FBI and in Germany for their hard work on this important case.”

“Volkswagen deceived American regulators and defrauded American consumers for years,” said U.S. Attorney Schneider.  “The fact that this criminal conduct was allegedly blessed at Volkswagen’s highest levels is appalling.  The U.S. Attorney’s Office is committed to pursuing accountability for corporate crimes, and the Winterkorn prosecution is a reflection of that commitment.”

“The indictment of former VW CEO Martin Winterkorn should send a clear message that EPA and its law enforcement partners will seek to hold corporate officers accountable for alleged criminal activities at their company,” said EPA Administrator Pruitt.

“Today’s indictment of Volkswagen AG’s former CEO, Martin Winterkorn, sends a clear message that businesses both here in the United States and abroad are expected to conduct their business honestly,” said FBI Special Agent in Charge Slater.  “Accountability will be sought for any individuals or corporations that cheat American consumers or harm the environment by circumventing the standards set by our legal system.” 

The indictment of Winterkorn represents the most recent charges in an ongoing investigation by U.S. criminal authorities into unprecedented emissions cheating by VW.  In March 2017, VW pleaded guilty to criminal charges that it deceived U.S. regulatory agencies, including the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), by installing so-called defeat devices in diesel vehicles emissions control systems that were designed to cheat emissions tests.  The defeat devices consisted of software designed to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or being driven on the road under normal driving conditions, in which case harmful nitrogen oxide (NOx) emissions increased significantly. 

As part of its plea agreement with the Department, VW paid a criminal penalty of $2.8 billion.  VW also agreed to the imposition of an independent corporate compliance monitor for the duration of its probation, which is at least three years.  Subsequently, Larry Thompson was appointed as VW’s monitor.

Winterkorn, who served as VW’s management board chairman and thus VW’s highest ranking executive from January 2007 until September 2015, is the ninth individual against whom U.S. criminal authorities have announced charges in connection with this matter.  Two former VW engineers, Oliver Schmidt, 48, and James Liang, 63, both German citizens, pleaded guilty to participating in the conspiracy alleged in the indictment and are currently serving sentences of 84 months and 40 months in prison, respectively, imposed by U.S. District Judge Sean F. Cox of the Eastern District of Michigan.  Five additional defendants, including former VW executives and senior managers, were indicted in January 2017, but have not been apprehended.  Similar to Winterkorn, each of them is believed to be a German citizen and to reside in Germany.  Finally, one former manager of VW’s subsidiary Audi AG, Giovanni Pamio, 61, an Italian citizen, has been charged by complaint and currently remains in Germany pending extradition.  

The indictment of Winterkorn alleges that he was informed of VW’s diesel emissions cheating in May 2014 and again in July 2015.  The indictment further alleges that Winterkorn, after having been clearly informed of the emissions cheating, agreed with other senior VW executives to continue to perpetrate the fraud and deceive U.S. regulators. 

As the indictment sets forth, in the spring of 2014 a study commissioned by the International Council on Clean Transportation (the ICCT study) tested road emissions of two VW diesel vehicles sold in the United States.  The results of the study showed significantly elevated NOx levels of the two VW vehicles, with one emitting up to 35 times above the allowable legal limit.  VW management quickly learned of the results of the study and discussed potential consequences flowing from the revelations.  Specifically, the indictment alleges that Bernd Gottweis, a senior manager then responsible for product safety issues, met with employees of the engine development department to discuss the ICCT study.  Upon learning of the facts revealed by the study and the risks facing the company, Gottweis remarked that he needed to speak with Winterkorn immediately.  Shortly thereafter, on May 22, 2014, Gottweis wrote a one-page memorandum describing the results of the ICCT study and warning that VW could not give a well-grounded explanation for the dramatically increased NOx emissions and that it could be assumed that the authorities would investigate whether the vehicles contained test-recognition software.  Gottweis’s memorandum was then attached to a cover note authored by a then-senior VW executive, and addressed to Winterkorn. 

As alleged in the indictment, following publication of the ICCT study in the spring of 2014 the company knowingly continued to deny the existence of emissions cheating in its vehicles until late summer 2015.  Instead, VW sought to deceive U.S. regulators about the causes for the significant discrepancies between emissions tests and emissions values measured on the road.

By the summer of 2015, however, the indictment alleges that U.S. regulators threatened to withhold authorization for VW to sell Model Year 2016 diesel vehicles in the United States until VW answered their questions about the discrepancies uncovered by the ICCT study.  The diesel situation in the United States became increasingly alarming to VW senior management, culminating in a meeting on July 27, 2015 at VW’s headquarters in Wolfsburg, Germany, internally referred to as the “damage table meeting.”  During that meeting, which was chaired by Winterkorn and attended by several senior VW executives, engine development department employees, with the help of a PowerPoint presentation, described to the attendees, and Winterkorn specifically: (1) how VW was deceiving U.S. regulators, including precisely what information had been disclosed and what had not yet been disclosed; and (2) the potential consequences of VW being caught cheating. 

The indictment alleges that upon being presented with those and other facts, Winterkorn did not order his subordinates to disclose the cheating but instead agreed to continue to deceive U.S. authorities.  Part of that strategy, which Winterkorn allegedly approved at the July 27, 2015 meeting, and which informed VW’s steps over the next several weeks, included sending Oliver Schmidt to meet with a senior CARB official on Aug. 5, 2015, in order to obtain the release of the Model Year 2016 vehicles without revealing the fundamental reason for the higher NOx measurements on the road: that software had been intentionally installed in VW vehicles so the vehicles could detect and evade emissions testing.  Consistent with Winterkorn’s alleged directive from the July 27 meeting, VW executives also approved a script for an Aug. 19, 2015 meeting with CARB that continued to conceal VW’s cheating.  At the meeting, however, in direct contravention of the instructions from his superiors, a VW employee, in answering a direct question from CARB, revealed that VW had been using software in its 2.0 liter diesel vehicles to cheat U.S. emissions tests.  On Sept. 3, 2015, VW officially admitted that it had installed defeat devices in various 2.0 liter diesel vehicles sold in the United States.

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

FBI and EPA Criminal Investigation Division are investigating the case.  The prosecution is being handled by Deputy Chief Benjamin D. Singer and Trial Attorney David M. Fuhr from the Criminal Division’s Fraud Section, White Collar Crime Unit Chief John K. Neal of the U.S. Attorney’s Office for the Eastern District of Michigan and Senior Trial Attorney Jennifer L.  Blackwell from the DOJ’s Environment and Natural Resources Division.  The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.

# # #

A Detroit man was sentenced to just over 54 years in federal prison after having pleaded guilty earlier this year to armed robbery and firearms offenses, announced United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Special Agent in Charge James Deir, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Carlos Harper, 38, of Detroit was sentenced yesterday by United States District Judge Robert H. Cleland.

According to court records, Carlos Harper, along with co-defendants William Joseph Fields and Roxanne Harper, conspired with one another to rob four businesses in Southwest Detroit, including Favi’s Nail Salon and the West Fort Street bar. Carlos Harper and Fields entered the businesses wearing scarves over their faces and used aliases in order to conceal their identities. Armed with pistols, they brandished those weapons to threaten, injure and instill fear in their victims. During the robberies, Carlos Harper shot two women in the West Fort Street Bar (causing severe injuries), fired a shot into Favi’s Nail Salon when it was full of women and children, and caused a family-run dollar store business to close down for good.  The robberies took place between December 2014 and January 2015.

Harper and Fields were apprehended as a result of investigative efforts by ATF agents in collaboration with the Detroit Police Department.

US Attorney Schneider stated, “The 55-year sentence in this case sends a very clear message: put down your guns and your violence, or spend your life in federal prison.”

“The lives of good, innocent people have been forever changed because of these cold-hearted,  senseless acts of violence,” said Special Agent in Charge James Deir. “ATF will not waiver in our commitment to remove dangerous criminals from our community so citizens can live in peaceful and thriving neighborhoods.”

Co-defendants Williams Fields and Roxanne Harper each pleaded guilty to their role in the robberies and await sentencing in June.

United States Attorney Schneider praised the work of all officers and agencies involved for their diligent pursuit and investigation of the men who were intent on terrorizing businesses, employees and customers in the Detroit area. 

The case was prosecuted by Assistant United States Attorneys Michael Martin and Amanda Jawad.

An Ypsilanti resident was sentenced today to 87 months in prison for damaging a protected computer, United States Attorney Matthew Schneider announced.

Joining Schneider in the announcement was Timothy R. Slater, Special Agent in Charge, Federal Bureau of Investigation.

Receiving the sentence was Konrads Voits, age 27.  The sentence was imposed by United States District Judge Robert H. Cleland who also ordered restitution in the amount of $238,517 to be paid to Washtenaw County and a 3-year term of supervised release.  As part of the sentencing, Voits forfeited all interests he had in some bitcoins, and in various electronic devices, including a laptop, an integrated circuit component, and several cellular phones.

In 2017, federal, state, and local agencies including the FBI, the Washtenaw County Sheriff, and the Michigan State Police conducted a rigorous investigation into Voits’s unauthorized computer intrusion into the Washtenaw County government’s computer network.

According to court records, Voits engaged in a classic “phishing” scheme – where Voits used both email and phone calls to Washtenaw County employees – to gain full access to and control of a part of the Washtenaw County computer network. Upon gaining access, Voits took the names, addresses, emails, and passwords of many former and present Washtenaw County employees. In addition, Voits accessed the Washtenaw County Jail records, altering the electronic records of at least one inmate in an effort to get that inmate released early. Thanks to the quick response of the IT employees at Washtenaw County, and to the careful review of records by employees at the Washtenaw County Jail, nobody was actually released early. Washtenaw County spent thousands of dollars and numerous extra work hours responding to and investigating the breach, resulting in a loss of at least $235,488.  

United States Attorney Schneider stated, “The federal law enforcement community encourages victims of cybercrimes to follow the lead of Washtenaw County and work with law enforcement to bring cybercriminals to justice. Judge Cleland’s 87-month sentence clearly sends the message that cybercrimes will not be tolerated in the Eastern District of Michigan.”

"The FBI is deeply committed to the aggressive pursuit of all cybercrime and in bringing to justice those who commit such acts", said Timothy R. Slater, Special Agent in Charge, Detroit FBI.  "Today's sentencing of Mr. Voits is an example that cybercriminals should no longer expect the Internet to provide them a veil of anonymity towards carrying out their illegal activities.  The FBI will continue to vigorously investigate these high-tech crimes through strong law enforcement partnerships.”

The FBI’s Cyber Task Force investigated this case in partnership with the Washtenaw County Sheriff’s Office and the Michigan State Police.  Assistant U.S. Attorneys Patrick E. Corbett and Craig A. Weier prosecuted the case.

The Detroit One collaboration of local, state, and federal law enforcement has led to charges against six members of the Latin Counts street gang for committing murder conspiracy and two non-fatal shootings that occurred in southwest Detroit on October 7, 2017, United States Attorney Matthew Schneider announced today.

Joining Schneider in the announcement were Special Agent in Charge James Deir, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Detroit Division, FBI SAC, and Chief James Craig, Detroit Police Department.

According to the superseding indictment, the Latin Counts gang operates primarily in southwest Detroit and the downriver communities of Lincoln Park and Ecorse.  The superseding indictment alleges that the Latin Counts are a criminal enterprise responsible for murders, robberies, and the distribution of illegal drugs.  The Latin Counts use violence to retaliate against rivals, to intimidate citizens in the community, and to advance members’ positions within the gang. 

Under the Detroit One initiative, and through the lead efforts of the ATF and the Detroit Homicide Task Force, law enforcement identified six violent members of the Latin Counts gang responsible for the shooting.

The two defendants arrested today were:

• Ryan Jose Taylor, a/k/a “Loco,” 22, of Detroit, charged with conspiracy to commit murder in aid of racketeering, three counts of attempted murder in aid of racketeering, three counts of assault with a dangerous weapon in aid of racketeering, and using, carrying, and discharging a firearm during and in relation to a crime of violence;
•  
• Christopher Nicholas Rishell, a/k/a “C-5,” 28, of Lincoln Park, charged with conspiracy to commit murder in aid of racketeering, three counts of attempted murder in aid of racketeering, three counts of assault with a dangerous weapon in aid of racketeering, and using, carrying, and discharging a firearm during and in relation to a crime of violence.

The four defendants who are already in federal or state custody are:

• Alberto Devin Roldan-Jackson, a/k/a “Berto,” 19, of Detroit, charged with conspiracy to commit murder in aid of racketeering, three counts of attempted murder in aid of racketeering, three counts of assault with a dangerous weapon in aid of racketeering, possession of a firearm and ammunition by an unlawful user of a controlled substance, and using, carrying, and discharging a firearm during and in relation to a crime of violence;
•  
• Justin Robert Feiler, a/k/a “White Boi,” 21, of Detroit, charged with conspiracy to commit murder in aid of racketeering, three counts of attempted murder in aid of racketeering, three counts of assault with a dangerous weapon in aid of racketeering, and using, carrying, and discharging a firearm during and in relation to a crime of violence;

• Gabriel Arocho, a/k/a “Kid” and “Big Kid,” 35, of Detroit, charged with conspiracy to commit murder in aid of racketeering, three counts of attempted murder in aid of racketeering, three counts of assault with a dangerous weapon in aid of racketeering, and using, carrying, and discharging a firearm during and in relation to a crime of violence;

• Darnell Watson, a/k/a “Shadow,” 23, of Lincoln Park, charged with conspiracy to commit murder in aid of racketeering, three counts of attempted murder in aid of racketeering, three counts of assault with a dangerous weapon in aid of racketeering, and using, carrying, and discharging a firearm during and in relation to a crime of violence.
•  

“This appalling shooting took place in a residential neighborhood and resulted in the killing of a suspected Latin Counts gang member and injuring two others.  The Detroit One partners will continue to be relentless in our efforts to rid our neighborhoods of gang violence,” U.S. Attorney Schneider said.

“Protecting the public from violent criminals is at the heart of ATF’s mission,” said Special Agent in Charge James Deir.  “We will continue to work with our law enforcement partners to rid our community of these violent gang members.”

"The Detroit One initiative strives to create a higher quality of life for all residents in the City of Detroit by eliminating the threat of gang violence”, said Timothy R. Slater, Special Agent in Charge, Detroit FBI.  “Investigating, arresting, and charging violent gang members, such as those in the Latin Counts, who seek to terrorize our local communities will continue to be a mainstay for the FBI and each of our law enforcement partners”.     

Detroit One is a collaborative effort between law enforcement and the community to reduce homicides and other violent crimes in Detroit.  By working together, local, state, and federal law enforcement agencies strive to maximize their ability to identify and arrest individuals and groups initiating violence in Detroit.  Since its launch in 2013, homicides are down 30% and non-fatal shootings are down 45%, when comparing the homicide and shooting totals from 2012 to the totals in 2017.

The two defendants arrested today will be making their initial appearances in federal court in Detroit this afternoon.  The other four defendants will appear in federal court on later dates.

A superseding indictment is only a charge and is not evidence of guilt.  A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

The case is being prosecuted by Assistant United States Attorneys Louis Crisostomo and Eric Straus.

Former Detroit Police Department Officers James Robertson and Marty Tutt were sentenced yesterday to 24 months imprisonment (Robertson) and 12 months imprisonment (Tutt) for accepting bribes from automobile collisions shops in exchange for referring stolen and abandoned vehicles recovered in the City of Detroit to the shops, United States Attorney Matthew Schneider announced today.

Schneider was joined in the announcement by Timothy Slater, Special Agent in Charge, Federal Bureau of Investigation, Patricia Armstrong, U.S. Postal Inspector in Charge, U.S. Postal Inspection Service, Detroit Division and Chief James Craig, Detroit Police Department. The defendants were actively employed with the Detroit Police Department at the time of the offenses.

James Robertson, age 45, and Marty Tutt, age 30, were sentenced by U.S. District Judge Robert Cleland. Robertson previously pleaded guilty to two counts of extortion. Tutt also previously pleaded guilty to two counts of extortion.

According to the facts alleged in the informations and further developed at the plea hearing and in sentencing briefing, Robertson and Tutt each accepted cash payments from owners/operators of Detroit collision shops in exchange for referring abandoned vehicles to the shops for repairs and for writing police reports.

Robertson and Tutt are the second and third defendants to have been sentenced as a result of this investigation.  The others awaiting sentencing or a trial are:

• Jamil Martin, 46, pleaded Guilty to an Information charging 1 count of Extortion

• Charles Wills, age 52, pleaded guilty to two counts of Extortion charged in a Superseding Indictment.

• Deonne Dotson, age 45, is awaiting trial.

All of the Officers were charged with engaging in extortion for using their official positions as Police Officers to refer cars to certain collision shops in exchange for cash payments.

 “These defendants are an unfortunate exception to the majority of Detroit Police Officers who are courageous, dedicated public servants,” U.S. Attorney Schneider said.

"The misconduct and abuse of authority displayed by these officers is unfortunate, and contrasts with the commitment to the rule of law demonstrated by the vast majority of the men and women of the Detroit Police Department each day", said Timothy R. Slater, Special Agent in Charge, Detroit FBI.

The investigation was conducted by the FBI, the U.S. Postal Inspection Service, Detroit Police Department and the following agencies from the FBI Detroit Area Corruption Task Force: Michigan State Police and U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operation Division.

The FBI Detroit Area Corruption Task Force is comprised of personnel from the Detroit Division of the FBI; Michigan State Police; Michigan Department of Attorney General; Detroit Police Department; U.S. Internal Revenue Service, Criminal Investigation Division; U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operations Division; U.S. Postal Inspection Service; U.S. Department of Labor, Office of the Inspector General, Office of Labor Racketeering and

Fraud Investigations; U.S. Department of Housing and Urban Development, Office of the Inspector General; U.S. Department of Transportation, Office of the Inspector General; U.S. Department of Homeland Security, Office of the Inspector General; U.S. Department of Education, Office of the Inspector General; and U.S. Environmental Protection Agency, Office of the Inspector General.

The case is being prosecuted by Assistant United States Attorneys Sarah Resnick Cohen and Craig A. Weier.

The former CEO of garbage hauler Rizzo Environmental Services (RES), Charles B. “Chuck” Rizzo, 46, of Bloomfield Hills, was sentenced to 66 months in prison and ordered to pay $4 million in forfeiture based on his convictions for conspiring to commit bribery and wire fraud, in connection with millions of dollars of municipal garbage contracts in Macomb County and with the embezzlement of hundreds of thousands of dollars from RES, United States Attorney Matthew Schneider announced.            

Schneider was joined in the announcement by Timothy R. Slater, Special Agent  in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service.

Rizzo had been convicted of conspiring to pay bribes to Clinton Township Trustee Dean Reynolds and Macomb Township Trustee Clifford Freitas in order to secure and maintain favorable municipal garbage contracts for RES.  Rizzo was convicted of giving Reynolds over $50,000 in cash bribes, plus over $50,000 in free legal services in order to get a 10-year garbage contract extension from Clinton Township worth over $15 million.  Rizzo also had been convicted paying Freitas $7,500 for his assistance in securing the Macomb Township garbage contract and offering to pay Freitas a bribe of $35,000, plus a salary increase, if Freitas voted to put the RES garbage bill on the Macomb Township water bill, which would reduce RES’s cost of doing business.         

Besides standing convicted of bribery conspiracy, Rizzo also was sentenced for conspiring to commit wire fraud.  Rizzo had embezzled over $900,000 from RES while Rizzo served as the CEO of the company.  At the time, RES’s owners included a New York private equity firm.  The investors in the private equity firm included the Boy Scouts of America and the Montana and Arizona state employee pension funds.  Rizzo’s fraud conspiracy took place between 2014 and 2016, and Rizzo used a variety of schemes to steal money from RES for his own enrichment.  Rizzo used a fake legal settlement agreement, fraudulent consulting deals, cash kickbacks, shell companies, and methods to defraud the other owners of RES, who owned over 80% of the company, while Rizzo owned a small minority share.  As one part of the embezzlement scheme, Rizzo received weekly envelopes containing thousands of dollars in cash kickbacks from a company that submitted fraudulently inflated invoices to RES.  Through this one scheme alone, Rizzo stole over $500,000 in cash.      

As part of his sentence, the Court ordered Rizzo to forfeit $4 million in criminal proceeds to the United States government.  This money represents the proceeds of Rizzo’s criminal activity in securing municipal garbage contracts by paying bribes and embezzling money.    

United States Attorney Schneider stated, “The Court’s sentence today demonstrates that bribe payers will face severe sanctions for spreading corruption through municipal government—penalties just as severe as those faced by the public officials who take the bribes.”

"Criminal actions, such as those committed by Charles B. Rizzo, have resulted in widespread harm to the trusting relationships among community members and their chosen leaders”, said Timothy R. Slater, Special Agent in Charge, Detroit FBI. “Safeguarding and protecting the public’s trust is not done alone. I would encourage anyone who has information about such criminal activity to call the FBI Public Corruption Task Force at (313) 965-2323”. 

"With power comes great responsibility.  When you willingly choose to use your power to steal hundreds of thousands of dollars and commit bribery, know that IRS-CI will be there to hold you accountable" said Manny Muriel, Special Agent in Charge of the Internal Revenue Service's Criminal Division.  "IRS - CI Special Agents will comb through any rubbish to find evidence of a crime - in this case, shell companies and phony legal settlement agreements, especially one as egregious and offensive as this."

This case is part of the government’s wide-ranging corruption investigation centered in Macomb County, Michigan.  The investigation of this case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service.  The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey, R. Michael Bullotta, and Adriana Dydell

Former Deputy Chief of Police for the Detroit Police Department, Celia Washington, 57, of Detroit, was sentenced to twelve months in prison today based on her conviction for conspiring with Gasper Fiore to commit bribery in connection with the corruption of towing permits in Detroit, United States Attorney Matthew Schneider announced today. 

Schneider was joined in the announcement by Timothy Slater, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service.

Washington was sentenced today before United States District Judge David Lawson who also ordered Washington to pay a fine of $2,500 and be under supervision of the court for a period of two years following completion of her sentence.

While serving as a Deputy Police Chief and the legal advisor to the Chief of Police, Washington accepted multiple bribes from the owners of towing companies while Washington’s responsibilities included overseeing the Detroit Police Department’s permitting, licensing, and use of private towing companies.  Washington was convicted of bribery conspiracy in January 2018 after she admitted accepting $4,000 in cash from tow company owner Gasper Fiore.  Previously, in December 2017, Fiore had pleaded guilty to bribing Clinton Township Trustee Dean Reynolds in connection with a Clinton Township towing contract.          

At her guilty plea hearing, Washington had admitted that she knew that Fiore was using the cash bribe to seek to influence her in the selection of tow rotations in the City of Detroit for Fiore’s towing companies.  Under the city’s towing rotation, private towing companies are called by the police to tow cars that are seized by the police or had been stolen.  When she accepted the bribe, Washington was aware that Fiore was violating the City of Detroit’s rules prohibiting a towing company owner from having more than one company in the rotation for a particular police precinct or district.  After she accepted the $3,000 cash bribe from Fiore, Washington assisted in issuing a police towing rotation list that continued to allow Fiore to violate the city’s towing rules and that significantly benefited Fiore’s companies.   

Besides accepting $4,000 in cash from Fiore in 2016, Washington had accepted other bribes from Fiore and another owner of a towing company.  Fiore had paid over $800 for drinks at Washington’s birthday party at the Granite City restaurant.  Washington also accepted $2,400 in repairs on her personal car from another tow company owner, as well as a $2,700 cash “loan” from that same owner, half of which Washington claimed she paid back.  Finally, Washington purchased a car for $5,000 from one tow company owner, and then Fiore gave Washington $5,000 in cash to pay for the car purchase for her.        

United States Attorney Schneider said, “Former Deputy Police Chief Washington’s corruption was particularly egregious because she was a high-level police official and a licensed attorney at the same time.  While the grand majority of police officers are honest and dedicated, we will not tolerate bribery by any police officer charged with protecting the rule of law and our community.”    

“Former Deputy Police Chief Washington violated the public’s trust by accepting bribes for her own financial gain,” said Timothy R. Slater, Special Agent in Charge, Detroit FBI. “These actions are not representative of the dedicated men and women of the Detroit Police Department. The FBI will continue to investigate individuals who commit criminal acts that erode the public’s confidence.”

This case is part of the government’s wide-ranging corruption investigation centered in Macomb County, Michigan.  The investigation of this case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service.  The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey and R. Michael Bullotta.

Yesterday, as the Department of Justice recognizes the 50th Anniversary of the Fair Housing Act, Attorney General Jeff Sessions announced the nationwide rollout of an initiative aimed at increasing awareness and reporting of sexual harassment in housing. The announcement includes an interagency task force between the Department of Housing and Urban Development (HUD) and the Justice Department to combat sexual harassment in housing, an outreach toolkit, and a public awareness campaign. This three-pronged approach will strengthen the Department’s efforts to combat sexual harassment in housing.

To launch this initiative in the Eastern District of Michigan, on April 10, 2018, the U.S. Attorney’s Office, in collaboration with the Civil Rights Division, held a community roundtable to discuss the impact of sexual harassment in housing and current efforts to address the issue.  U.S. Attorney Matthew Schneider and Acting Assistant Attorney General for Civil Rights John Gore, each made remarks at the event, which was held at the McGregor Center on the campus of Wayne State University.  Attendees included representatives from over 30 different organizations, including fair housing centers, legal aid groups, advocacy and non-profit organizations, and governmental agencies.  Each organization was invited because they often work with Michigan’s most vulnerable populations, who could also become victims of sexual harassment in housing.  Through such roundtables, the US Attorney's Office is working to help residents or applicants experiencing sexual harassment to quickly and easily connect with the Department of Justice. 

United States Attorney Matthew Schneider stated, “If you have been sexually harassed by your landlord, apartment manager, maintenance worker, or other housing employee, please contact us so we can help you and seek justice in federal court.”

“Sexual harassment in housing is illegal, immoral, and unacceptable," said Attorney General Sessions. “It is all too common today, as too many landlords, managers, and their employees attempt to prey on vulnerable women. We will not hesitate to pursue these predators and enforce the law. In October, I ordered a new initiative to bring more of these cases, and we have already won relief for 15 victims. Today we announce three new steps to make the initiative more effective and to win more cases. I want to thank the dedicated and committed professionals in our Civil Rights Division and our partners in the Department of Housing and Urban Development for their hard work in this effort. We will continue to aggressively pursue harassers, because everyone has a right to be safe in their home.”

“All discrimination stains the very fabric of our nation, but HUD is especially focused on protecting the right of everyone to feel safe and secure in their homes, free from unwanted sexual harassment,” said Secretary Ben Carson. “No person should have to tolerate unwanted sexual advances in order to keep a roof over his or her head. Part of our mission at HUD is to provide safe housing and we will remain diligent in this mission to protect those we serve. I look forward to working with Attorney General Sessions and the Department of Justice as part of this task force to bring an end to this type of discrimination.”

In October 2017, the Justice Department announced an initiative to combat sexual harassment in housing and launched pilot programs in Washington, D.C. and the Western District of Virginia. The initiative sought to increase the Department’s efforts to protect women from harassment by landlords, property managers, maintenance workers, security guards, and other employees and representatives of rental property owners. During the pilots, the Department developed and tested ways to better connect both with victims of sexual harassment in housing and with those organizations that victims may turn to first for help – including law enforcement, legal services providers, public housing authorities, sexual assault services providers, and shelters.  The Department also tested certain aspects of the initiative in other jurisdictions, including New Jersey, the Central District of California, Massachusetts, Vermont, and Michigan.

The two pilot programs generated an upswing in harassment reporting to the Department from both D.C. and the Western District of Virginia. In D.C., the Department generated six leads since the October 2017 launch. In Virginia, the Department generated three leads. While the Justice Department recognizes that leads and investigations do not always lead to enforcement actions, the pilot program’s results—when extrapolated across all the U.S. Attorney’s Offices across the country—could lead to hundreds of new reports of sexual harassment in housing across the country.

Because of these promising results, the Department is rolling out three major components to the Initiative.

First, the new HUD-DOJ Task Force to Combat Sexual Harassment in Housing will drive a shared strategy between the Department and HUD for combatting sexual harassment in housing across the country. It will focus on five key areas: continued data sharing and analysis, joint development of training, evaluation of public housing complaint mechanisms, coordination of public outreach and press strategy, and review of federal policies.

Second, the outreach toolkit is designed to leverage the Justice Department’s nationwide network of U.S. Attorney’s Offices. The toolkit provides templates, guidance, and checklists based on pilot program feedback. It ultimately will amplify available enforcement resources and help victims of sexual harassment connect with the Department.

Third, the public awareness campaign has three major components: a partnership package with relevant stakeholders, launch of a social media campaign, and Public Service Announcements (PSAs) run by individual U.S. Attorney’s offices. The campaign is specifically designed to raise awareness, and make it easier for victims all over the country to find resources and report harassment. To find the PSAs for the Eastern District of Michigan, click here.

More information about the Civil Rights Division and the civil rights laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of sexual harassment in housing should call the Department at 1-844-380-6178, send an e-mail to fairhousing@usdoj.gov, or contact HUD at 1-800-669-9777.  If you have information or questions about any other housing discrimination, you can contact the Department at 1-800-896-7743.

The Detroit One collaboration of local, state, and federal law enforcement has led to the guilty plea of a Detroit man for conspiring to rob patrons of Detroit-area casinos at gunpoint that evolved into armed carjackings and identity theft, announced U.S. Attorney Matthew Schneider.

Joining in the announcement was Timothy Slater, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Col Kriste Kibbey Etue, Michigan State Police.

Chief Judge Denise Page Hood accepted the guilty of Damon Washington, 27, of Detroit. Washington’s plea agreement calls for a sentence of 39 to 41 years in prison.

According to court records, the plan started in August 2017 and lasted until police arrested Washington during an attempted carjacking on October 2, 2017. Washington initially intended only to rob casino patrons of their winnings, but the robberies quickly escalated into carjackings during which Washington and his co-conspirator would cause a traffic accident and then rob victims of their money, phone, and wallets before carjacking them. Police searched Washington’s home after his arrest and discovered he had identity documents for his robbery and carjacking victims, three dozen fraudulent credit cards, and equipment to produce more counterfeit credit cards.

The case was investigated by the FBI Violent Crime Task Force, which includes representatives of the Michigan State Police and Detroit Police. The case is being prosecuted by Assistant U.S. Attorneys Jeanine Brunson and Shane Cralle.

An indictment was unsealed today charging Samir Berri, R.Ph.; Anthony Cole, R.Ph.; Shamimur Rahman, R.Ph.; Ghassan Hamka, R.Ph.; Asm Akter Ahmed, M.D.; and Fouzi Ramouni with multiple health care fraud offenses, U.S. Attorney Matthew Schneider announced today. Berri, Ahmed and Ramouni are also charged with distributing and conspiring to distribute controlled substances (all opioids).

Schneider was joined in the announcement by Special Agent in Charge Timothy Slater 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 are:

Samir Berri, R.Ph., 42, of West Bloomfield

Anthony Cole, R.Ph., 38, of Wyandotte

Shamimur Rahman, R.Ph., 41, of Clinton Township

Ghassan Hamka, R.Ph., 31, of Dearborn

Fouzi Ramouni, 42, of Madison Heights

Dr. Asm Akter Ahmed, 58, of Hamtramck,

According to the indictment, between January 2011 and August 2017, the four pharmacists were co-owners and pharmacists-in-charge of four area pharmacies – Conant Plaza Pharmacy, 3611 Carpenter Street in Detroit; Buckley’s Pharmacy of Hazel Park, 20721 Dequindre in Hazel Park; Buckley’s Pharmacy of Detroit, 14313 Greenfield in Detroit; Buckley’s Eastside Pharmacy, 15014 Eight Mile in Detroit; and Buckley Brands, 18021 Conant Street in Detroit. 

The indictment alleges that all four pharmacies fraudulently billed Medicare, Medicaid, and Blue Cross Blue Shield for controlled substances, that were dispensed, and high-priced medications that were not dispensed. The scheme was detected by Medicare, in part, because of a deficit between each pharmacy’s recorded inventories and the claims that each submitted for insurance reimbursement.   The fraudulent billings netted the pharmacies combined profits in excess of five million dollars, which the co-owners then converted to their own personal use.  As one part of the scheme to defraud, the defendants billed insurance companies for providing medications to people who had died prior to the claimed date of delivery. 

The indictment further alleges that some of the fraudulent billings were generated in connection with a related conspiracy between defendants Samir Berri, Dr. Akter Ahmed and Fouzi Ramouni.  According to the indictment, Ramouni recruited and paid Medicare and Medicaid beneficiaries to visit Dr. Akter Ahmed.  Without a genuine examination or a showing of medical necessity, Dr. Ahmed prescribed opioids for these patients, including Carisoprodol and promethazine codeine syrup. In addition to prescribing opioids, Dr. Ahmed also prescribed unnecessary and expensivemedications.   Ramouni and/or the “patient” then took the opioid prescriptions to Conant Plaza Pharmacy, where Samir Berri would fill them without questions.  Berri would, in turn, bill insurance for dispensing the controlled substances, and fraudulently bill insurance for dispensing the expensive maintenance medications. According to the indictment, the controlled substances diverted for sale on the street had a street value in excess of $1,000,000.

United States Attorney Schneider stated, “Today’s opioid epidemic is fueled, in part, by the greed of certain doctors and pharmacists who knowingly divert legitimate pain medications and narcotics to drug dealers for illegal distribution in our communities.  To make matters worse, these doctors and pharmacists sometimes defraud Medicare, Medicaid and private insurance in order to generate even greater profits for themselves.  We will continue to use every means available to investigate and prosecute these cases.”

“Today’s operation highlights the FBI’s commitment to combating the illegal distribution of opioids and narcotics by doctors, pharmacists, and dealers”, said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI.  “This investigation makes it clear that dishonest health care professionals who exploit Medicare, Medicaid, and private insurance companies through fraudulent billing and other schemes will be held accountable for their crimes”.      

“Medical professionals have an obligation to ensure the appropriate prescribing and dispensing of Opioid medications”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “When they choose to turn their back on this obligation in order to fulfill their appetite for improper financial gain they will be held accountable. The OIG has made combatting the opioid crisis a top enforcement priority and will continue to work with our law enforcement partners to investigate those who act illegally and put patient’s health and safety at risk”.     

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. 

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.

Anyone with information about suspected health care fraud in Michigan is encouraged to contact the FBI’s Detroit Field Office at 313-965-2323.  

  The case is being prosecuted by Assistant U.S. Attorneys John Engstrom and Brant Cook.

A Florida man was sentenced yesterday to 180 months in federal prison for writing illegal prescriptions for pain killers and for laundering the proceeds of his crimes, U.S. Attorney Matthew Schneider announced.

Schneider was joined in the announcement by Special Agent in Charge Timothy Plancon, Drug Enforcement Administration and Special Agent in Charge Manny Muriel, Internal Revenue Service, Criminal Investigations.

Sentenced was Boris Zigmond, 52.  The sentencing took place before U.S. District Judge George Caram Steeh in Detroit.  Judge Steeh revoked Zigmond’s bond and ordered him into custody.

According to court records, Boris Zigmond operated a clinic which was a front for a scheme to distribute medically unnecessary prescriptions for the most powerful painful killers. Zigmond  admitted that he received $500 from people seeking to obtain medically unnecessary prescriptions between 2013 and 2015.  He further admitted that he attempted to conceal more than $375,000 in cash from law enforcement. 

As part of his sentence, Zigmond was ordered to forfeit $2,221,000 in cash seized during the investigation.   

Eight other individuals, including two physicians, Jennifer Franklin and Carlos Godoy, have already been sentenced for prescribing the unnecessary prescription in exchange for $100 per patient. A ninth individual, Rodney Knight, is awaiting sentencing following his guilty plea for participating in the drug conspiracy and for illegally possessing an AK-47 after having previously been convicted of a felony.     

 DEA Special Agent in Charge Plancon stated, “The DEA has worked cooperatively with other law enforcement agencies to successfully target Boris Zigmond. We have sent a clear message that we have “zero tolerance” for drug dealers and the devastation that they bring to our community.  This is yet another example of our resolve to dismantle criminal organizations, especially those who are contributing to the opioid abuse epidemic.”

IRS-CI Special Agent in Charge Manny Muriel said, “A physician takes a Hippocratic Oath to uphold ethical standards to help the sick. Boris Zigmond let greed take priority over that oath and in doing so, contributed to the opioid epidemic in Michigan.  Let this sentence be a reminder to all doctors that IRS-CI and its partners will continue to work to identify those who look to gain financial reward from medically unnecessary prescriptions.”

The case was investigated by the Drug Enforcement Administration and Internal Revenue Service-Criminal Investigations.   The case was prosecuted by Assistant U.S. Attorneys Wayne F. Pratt and Philip A. Ross.

The Detroit One collaboration of local, state, and federal law enforcement has led to the twelfth and final guilty plea of a Latin Counts street gang member for racketeering conspiracy involving murder and attempted robbery, U.S. Attorney Matthew Schneider announced today.  

Defendant Kyle Voltz, 28, of Lincoln Park, pleaded guilty to racketeering conspiracy in federal court in Ann Arbor before U.S. District Judge Judith Levy. Voltz faces 30 years in prison. 

According to the racketeering indictment, the Latin Counts gang operates in southwest Detroit and the downriver communities of Lincoln Park and Ecorse.  The indictment alleged that the Latin Counts committed murders, assaults, trafficking in drugs and stolen firearms, robberies, and breaking and entering homes and businesses.  The indictment alleged that the gang used violence to stake out its “turf” and to intimidate both rival gang members and the citizens of southwest Detroit.    

As part of his guilty plea, Voltz took responsibility for participating in the killing of Terrence McClearen and the shooting of another victim on August 18, 2013, and for assaulting and attempting to rob a different victim on April 29, 2014.  Three other Latin Counts gang members have already been sentenced for their roles in the murder of McClearen. 

Recently the head of the Latin Counts in Michigan, Isidro Garza, was sentenced in federal court to 10 years in prison for leading the gang while incarcerated in the Michigan Department of Corrections, where he was serving 25-50 years for a 1993 gang related homicide.

On January 29, 2018, Benjamin Beightol also pleaded guilty to racketeering conspiracy.  He faces 10 years in prison.  As the “Minister of Information,” Beightol was responsible for leading the Latin Counts and disseminating Garza’s directions and messages to lower ranking Latin Counts gang members.

Under the Detroit One Initiative, and through the lead efforts of the Detroit Police Department and the FBI Violent Gangs Task Force, which consists of representatives of Homeland Security Investigations, Detroit Police Department, Lincoln Park Police Department, Michigan Department of Corrections, and Michigan State Police, investigators were able to merge separate probes of various members of this organization and its activities into one encompassing investigation. 

“The Detroit One partners are systematically and aggressively prosecuting the street gangs that cause violent crime in our neighborhoods,” Schneider said.  “Detroit is a safer place when violent gang members are off our streets and behind bars.”

"The significant arrests and prosecutions made by Detroit One make certain that the citizens of Detroit and the region can once again start to feel safe in their communities" said Chief James Craig. "We will maintain our focus and remain stead-fast in our pledge to bringing swift justice to all those who commit violent acts against our city." 

“The Detroit One’s unified approach to investigating violent street gangs such as the Latin Counts, exemplifies our ongoing commitment to rid our communities of these violent criminals”, said Timothy R. Slater, Special Agent in Charge, FBI Detroit

“This investigation highlights the effectiveness of the Detroit ONE initiative in bringing to justice street gangs whose pervasive criminal acts significantly diminish the quality of life in our communities," said Steve Francis, special agent in charge of HSI Detroit. "HSI will continue to aggressively target those responsible from contaminating our communities with a broad range of criminal activity."

Detroit One is a collaborative effort between law enforcement and the community to reduce homicides and other violent crimes in Detroit.  By working together, local, state, and federal law enforcement agencies strive to maximize their ability to identify and arrest individuals and groups initiating violence in Detroit.  Since its launch in 2013, homicides are down 30% and non-fatal shootings are down 45%, when comparing the homicide and shooting totals from 2012 to the totals in 2017.

The case is being prosecuted by Assistant United States Attorneys Matthew Roth, Andrea Hutting, and Louis Crisostomo.

Meleney Pully, 38, of Saginaw, Michigan was sentenced on April 5, 2018, before United States District Judge Thomas L. Ludington to 230 months in Federal prison for sex trafficking of a minor, announced United States Attorney Matthew Schneider.

Joining in the announcement were Saginaw County Prosecutor John McColgan and Saginaw County Sheriff William Federspiel.

As part of her plea, Meleney Pully agreed that beginning in November 2016 and continuing until February 6, 2017, that she acted with her husband to cause a 16 year old minor victim to engage in commercial sex acts. Acting together, they provided the location for the commercial sex acts to occur and took the proceeds from the commercial sex acts. Meleney Pully advertised on a website, backpage.com, soliciting individuals to engage in sexual relations with the minor in exchange for money.

The case was investigated by the Saginaw County Sheriff’s Department with assistance from the Northeast Michigan Trafficking and Exploitation Crimes Task Force (“NEMTEC”).  The prosecution of this case represents a cooperative effort between the Saginaw County Prosecutor’s Office and the United States Attorney’s Office. The case is being prosecuted by Christopher Rawsthorne of the United States Attorney’s Office. 

Another former UAW official entered a guilty plea to accepting illegal payments from Fiat Chrysler Automobiles (FCA), announced United States Attorney Matthew Schneider. 

Joining in the announcement was James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Timothy R. Slater, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, Ian Berg, District Director, U.S. Department of Labor – Office of Labor-Management Standards, and Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations.    

Keith Mickens, 64, of Clarkston, Michigan pleaded guilty before the Honorable Paul D. Borman in United States District Court in Detroit, Michigan.  The plea marked the fifth conviction in the ongoing federal investigation into  corruption at the UAW and FCA.

Keith Mickens admitted to helping transfer hundreds of thousands of dollars from FCA to former UAW Vice President General Holiefield using two companies that Holiefield controlled with his girlfriend and later wife, Monica Morgan.  FCA executives concealed the illegal payments using the bank account of the UAW-Chrysler National Training Center.  According to court documents, Morgan and Holiefield used the payments for expenses such as installing a swimming pool at their residence in Harrision Township, Michigan.  In January 2018, Monica Morgan was convicted of criminal tax fraud.  Morgan is awaiting sentencing.

Separate from the illegal activities involving UAW Vice President Holiefield, Keith Mickens admitted that he and other senior UAW officials also accepted thousands of dollars worth of clothing, electronics, golf equipment, and other personal items that were paid for by FCA.   

Between 2010 and 2014, Keith Mickens was one of the senior UAW officials responsible for administering the collective bargaining agreements on behalf of tens of thousands of UAW members employed by FCA.  Mickens served as a member of the UAW’s National Negotiating Committee in 2011 and was one of the UAW officials responsible for negotiating the collective bargaining agreements between the UAW and FCA.

“Today’s conviction is the latest in a string of senior UAW officials who took secret and prohibited payments from the company they were supposed to be negotiating against,” said U.S. Attorney Matthew Schneider.  “The hard working rank and file members of the UAW deserve better from those who represent their interests.” 

“Today’s guilty plea demonstrates a continued importance for the UAW’s leadership to provide active assistance in the ongoing investigation to root out anyone who has participated in this “pay to play” scheme”, said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI.

“Mickens is another former UAW employee who abused his position by conspiring with UAW officers and employees to accept illegal payments and other things of value from FCA while he was responsible for collective bargaining on behalf of UAW members. We will continue to work with our law enforcement partners and the U.S. Department of Labor’s Office of Labor-Management Standards to safeguard the assets of union members,” said James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

A sentencing date will be set by the court. 

U.S. Attorney Schneider commended the outstanding work of the U.S. Department of Labor, the Internal Revenue Service and the Federal Bureau of Investigation, in conducting a comprehensive criminal investigation into labor corruption and tax fraud activities involving a vital sector of the local and national economy.    

Following the unprecedented increase in threats made against our schools since the tragic shooting in Parkland, Florida, the U.S. Attorney’s Office, along with our local prosecutors and sheriffs, State Police, and federal law enforcement partners, came together to speak as one and emphasize that we intend to use our collective resources to find, arrest, and prosecute those who make threats against our schools,

“School threats, which are oftentimes the lead story in the news, are damaging our communities and terrifying our citizens – parents and children alike,” stated United States Attorney Matthew Schneider.  “This is an epidemic that the law enforcement community is facing together.”

The goal of today’s press conference was to send the message that law enforcement, at every level, will aggressively prosecute anyone who threatens our children and our schools. 

It is also important that we appeal to the parents of our students.  We must underscore the important of talking to their children about this issue.  It is imperative that both the parents and students understand the potential consequences for students who make these threats.  To that end, we have developed an initiative to visit schools and present this message directly to the students and parents.  It is our hope that this collective message will deter people from threatening our schools and cause parents to talk to their children about this problem.

Joining Schneider was Chief Deputy Michigan Attorney General Laura Moody, Macomb County Prosecutor Eric Smith, Livingston County Prosecutor William Vailliencourt, Macomb County Sheriff Anthony Wickersham, Wayne County Sheriff Benny Napolean, Livingston County Sheriff Mike Murphy, Washtenaw County Sheriff Jerry Clayton, Captain Curtis Childs, Oakland County Sheriff's Office,  Detroit Police Chief James Craig and representatives from MSP, FBI, ATF, DEA, HSI, and Secret Service.

We welcome and encourage parents and educators to contact the U.S. Attorney’s Office to schedule a visit to your school. 

For more information and/or to schedule a visit, please contact Assistant U.S. Attorney and Director of Community Outreach Terrence Haugabook at (313) 226-9157 or email at Terrence.haugabook@usdoj.gov

The assistant director of nursing of a Michigan home health agency was sentenced to 36 months in prison today for his role in a scheme involving approximately $1.6 million in fraudulent Medicare claims for home health services that were procured through the payment of kickbacks, and that were medically unnecessary and not provided.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew J. Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Field Office 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 made the announcement.

Juan Yrorita, 63, of Sterling Heights, Michigan, was sentenced by U.S. District Judge Gershwin A. Drain of the Eastern District of Michigan.  Judge Drain also ordered Yrorita to pay $1,524,951.88 in restitution, jointly and severally with his co-conspirators, and to forfeit $49,823.41.  After four days of trial, Yrorita pleaded guilty on Nov. 29, 2017 to one count of conspiracy to commit health care fraud and wire fraud.

As part of his guilty plea, Yrorita admitted that his co-conspirators at Anointed Care Services (Anointed), a Detroit-area home health agency, paid kickbacks to recruit Medicare beneficiaries.  Yrorita further admitted that as Anointed’s assistant director of nursing, he falsified medical records to support Anointed’s fraudulent claims to Medicare for services that were medically unnecessary and never provided.

According to the evidence at trial, Anointed submitted approximately $1.6 million in false and fraudulent claims to Medicare. 

Yrorita was charged along with Editha Manzano, 70, of Troy, Michigan; Liberty Jaramillo, 67, also of Troy; Roberto Quizon, M.D., 71, of Bloomfield Hills, Michigan; and Victoria Gallardo-Navarra, M.D., 74, also of Bloomfield Hills, in an indictment returned on Sept. 1, 2016.  Jaramillo and Quizon pleaded guilty and are pending sentencing.  Gallardo-Navarra was acquitted, and Manzano was convicted after trial and is pending sentencing.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  Fraud Section Trial Attorneys Jacob Foster and Rebecca Szucs prosecuted the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

An indictment was unsealed today charging Rasko “Ron” Djordjevic and Milija “Mike” Perkovic with health care fraud, conspiracy to commit health care fraud, and aggravated identity theft, U.S. Attorney Matthew Schneider announced today. Chang is also charged with health care fraud.

Schneider was joined in the announcement by Special Agent in Charge Timothy Slater of the FBI’s Detroit Division; Special Agent in Charge James Vanderberg of the Department of Labor’s Office of Inspector General, Chicago Regional Office; and Regional Director Joseph Rivers of the Department of Labor’s Employee Benefit Security Administration.

Charged in the indictment are Rasco Djordjevic, age 42, of Troy, Michigan, and Milija Perkovic, age 26, of Bloomfield, Michigan.

The indictment alleges that from November 2014 to date, Djordjevic was in charge of Sterling Hearing Care, Inc. and Sterling Hearing Center, Inc., (collectively “SHC), a hearing aid provider with approximately fifteen offices throughout southeast Michigan.  Milija Perkovic was one of several hearing aid salespersons working under Djordjevic’s direction.  It is alleged that Djordjevic, Perkovic and other unnamed individuals conspired to defraud both Blue Cross Blue Shield and American Health Benefits by submitting reimbursement claims for hearing aids and related services that were: (1) not provided, (2) provided by medically unnecessary; and (3) predicated on fraudulent claim submissions and fraudulent marketing practices.  The indictment specifically alleges how SHC would entice potential customers with offers of free hearing assessments (that were nevertheless billed to BCBS).  Once in the door, SHC’s hearing aid salespersons were then encouraged to “close the deal,” sometimes at the expense of medical necessity.  For instance, Djordjevic discouraged his salepersons from recommending that customers with wax buildup have the buildup removed before conducting a hearing evaluation.  The indictment alleges that Perkovic would show potential customers “fake xrays” and tell them that they revealed cochlea damage in the customer’s inner ear.  SHC salespersons, including Perkovic, were taught that after determining the extent of a potential customer’s insurance coverage and conducting a soft credit check, the sales price of a hearing aid should be based upon what the customer can afford, not on a set market price. 

The indictment also alleges that Djordjevic misused the identity of a specific Michigan audiologist in committing health care fraud by signing her name, and certifying all SHC claims submitted to American Hearing Benefits.  The indictment further charges that Perkovic misused the specific identity of a Michigan doctor in committing health care fraud by falsifying her signature on a medical clearance form required by BCBS.   

United States Attorney Schneider stated, “Our office has no tolerance for health care providers that deliberately mislead customers in order to sell a medical product or service and then bill insurance companies for services and products not delivered.  It is especially troublesome when a provider deals with elderly customers that may be particularly vulnerable to scams.”  Schneider urges anyone in the market for hearing aids – either for themselves or for a loved one -- to become well-educated consumers.  “Research potential providers and ask good questions,” Schneider reminds.  “Trust your instincts and never be afraid to seek a second opinion.”

"Taking advantage of innocent victims who seek medical services by allegedly stealing their identity is unethical and illegal,” said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI. “Health care fraud negativity impacts relationships between patients and their doctors. The FBI and our law enforcement partners will continue to investigate health care fraud at all levels”. 

"An important mission of the Office of Inspector General is to investigate allegations relating to labor racketeering affecting unions and employee benefit plans. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

Citizens are encouraged to report information about Health Care Fraud activity to the Detroit FBI at 313-965-2323.

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.  In addition to any sentence imposed for health care fraud, the defendants face a mandatory and consecutive two-year sentence if convicted of aggravated identity theft. 

The case was investigated by Special Agents of the FBI and DoL.  The case is being prosecuted by Assistant U.S. Attorney John Engstrom.

A superseding indictment was unsealed today charging former UAW official Nancy A. Johnson, 57, of Macomb, Michigan, with criminal violations of the Labor Management Relations Act, announced United States Attorney Matthew Schneider.  Between 2014 and 2016, Johnson held the second most senior position in the UAW Chrysler Department.  Ms. Johnson also served as a member of the UAW National Committee that negotiated against Fiat Chrysler Automobiles during the 2015 collective bargaining sessions. 

Joining in the announcement was James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General, Ian Burg, District Director, U.S. Department of Labor – Office of Labor-Management Standards, Jeffrey E. Peterson, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, and Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations. 

Ms. Johnson was charged with taking part in a conspiracy in which she and other senior UAW officials accepted a stream of concealed payments and things of value from FCA executives in the months leading up to the 2015 collective bargaining negotiations.

The superseding indictment charges Nancy A. Johnson with illegally accepting tens of thousands of dollars worth of designer clothing, golf resort fees, limousine services, lavish meals, luxury accommodations, luggage, and first-class travel for herself and one of her associates.  In one instance, Ms. Johnson spent $1,160 for a single pair of designer shoes, which were paid for with funds provided by FCA.  On other occasions, Ms. Johnson spent $1,217 for salon and spa services, and $1,518 for a set of women’s graphite golf clubs and a diva cart bag, all using funds provided by FCA. 

“Today’s indictment marks the sixth defendant charged in a scheme where senior UAW officials betrayed the hard-working men and women of the union by accepting illegal payments from company executives,” said United States Attorney Schneider.  “My office will continue to work tirelessly with our partners at the U.S. Department of Labor, IRS, and the FBI to expose and prosecute any union official or corporate executive involved in similar criminal conduct.”

“An important mission of the Office of Inspector General is to investigate allegations relating to labor racketeering and prohibited payments between company officials and union officials governed by a collective bargaining agreement. We will continue to work with our law enforcement partners and the U.S. Department of Labor’s Office of Labor-Management Standards to investigate these types of allegations,” said James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

“As a former UAW official, Nancy Johnson chose personal greed over promoting individual leadership through her participation in a “pay to play” scheme to enrich herself at the detriment of union members she represented,” said Jeffery E. Peterson, Acting Special Agent in Charge, Detroit Division of the FBI.  “This indictment sends a clear message that the FBI, through collaboration with our law enforcement partners, will continue to aggressively investigate anyone who circumvents their legal responsibilities within the union movement at the expense of their members.”

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

Nancy A. Johnson faces a maximum penalty of up to five years in prison and a fine of up to $250,000 on each of the five counts in the superseding indictment.

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

Lorena Loren, the former executive director of the St. Clair Housing Commission, was sentence today to 37 months in federal prison after having pleaded guilty to conspiring to commit federal program fraud, announced United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Brad Geary, Special Agent in Charge of the U.S. Department of Housing and Urban Development and Jeffery E. Peterson, Acting Special Agent in Charge, Federal Bureau of Investigation.

Loren, 55, of Nicholls, Georgia, admitted to conspiring with several family members to steal federal funds provided to the Commission by the U.S. Department of Housing and Urban Development (‘HUD”) to administer HUD’s low-income housing programs within St. Clair County. Loren admitted to engaging in various fraudulent schemes to unlawfully obtain over $336,000 in federal funds.

According to court records, Loren stole approximately $162,000 earmarked for HUD’s Housing Choice Voucher program, commonly known as Section 8 housing, which allows low-income families to lease privately owned rental properties with the assistance of HUD rental subsidies administered by the Commission. As part of this fraudulent scheme, between August of 2008 and August of 2016, Loren fraudulently entered into Section 8 contracts from which, at various times, she and nearly all of her immediate family members directly benefitted, in violation of HUD’s regulations and guidelines.  In addition to falsifying Section 8 housing contracts and lease agreements by using nominees for lease agreements for Loren’s son, Loren and several relatives falsely claimed they owned rental properties which were, in fact, owned by others; where former Section 8 tenants resided; and, owned by Loren herself. Loren, as executive director, then fraudulently issued Section 8 rental subsidy payments to relatives, in some instances, even in the names of former Section 8 tenants who were no longer in the program. Loren also directed family members to establish joint bank accounts to facilitate access to the ill-gotten funds by various members of her family.

In addition, between 2010 and 2016, Loren used the Commission’s two credit cards to make unauthorized purchases of personal items for herself and relatives from Amazon.com, Walmart and Sam’s Club stores.  Loren purchased, among other things, adult and infant clothing, furniture, food, beauty supplies, medications, other household items, and alcoholic beverages on the Commission’s cards.  Loren had some of those purchases, totaling approximately $60,000, shipped to some of the same relatives involved in the Section 8 housing scheme at their residences in Georgia and Florida. Loren used the Commission’s operating budget, provided by HUD to maintain the Commission’s public housing facility, Palmer Park Manor, to pay for all the unauthorized purchases, which totaled nearly $166,000.  Lastly, Loren also pocketed approximately $8,500 of the Commission’s petty cash funds. 

As part of her guilty plea, Loren agreed to pay $336,240.62 in restitution to HUD.  Pursuant to the stipulated order of forfeiture, the court issued a money judgment for $336,240.62, which will be paid with her full pension benefits and the proceeds from the sale of the Port Austin rental property that she used to commit the fraud in this case.   

United States Attorney Schneider stated, ““This sentence shows that we will vigorously pursue public officials who steal the people’s money and use it for their own selfish gain.”

Brad Geary, Special Agent in Charge HUD said “At such a critical time for the Department of Housing and Urban Development, with programs that are vital to the well-being of so many in our communities, it is critical that those entrusted to public service are completely dedicated to those in need.  The HUD Office of Inspector General is committed to partnering with Federal prosecutors and fellow law enforcement to aggressively pursue those engaged in activities that harm HUD’s Public Housing programs.”

“It is important we all remember this type of fraud scheme is not a victimless crime. It impacts many hard working, tax paying citizens and creates an unnecessary increase of government spending,” said Jeffery E. Peterson, Acting Special Agent in Charge, Detroit Division of the FBI.

The case was investigated by agents of U.S. Department of Housing and Urban Development-Office of Inspector General and the Federal Bureau of Investigation.  The case was prosecuted by Assistant United States Attorney Dawn N. Ison.

Amor M. Ftouhi, 50, of Montreal, Canada, who was previously indicted in July 2017, for charges relating to an attack on a Bishop Airport officer in Flint, Michigan, was charged today with an additional offense of committing an act of terrorism transcending national boundaries.

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Matthew Schneider for the Eastern District of Michigan and Acting Special Agent in Charge Jefferey E. Peterson of the FBI’s Detroit Field Office made the announcement.

According to court records, Mr. Ftouhi entered the United States from Canada for the purpose of killing government personnel in the United States.  Before entering the United States on June 16, 2017, while in Canada, Mr. Ftouhi conducted online research of American gun laws and for gun shows in Michigan.  Mr. Ftouhi subsequently traveled to Michigan where he was unsuccessful in purchasing a gun and purchased a knife instead.  On June 20, 2017, Mr. Ftouhi walked up to the victim, who is a lieutenant with the Bishop Airport Authority and was in full uniform, and stabbed the police officer in the neck with a knife.  Mr. Ftouhi referenced killings in Syria, Iraq and Afghanistan, and yelled “Allahu Akbar.”  After his arrest, Mr. Ftouhi told law enforcement that he was a “soldier of Allah” and subscribed to the ideology of al-Qaeda and Usama bin Laden.   

Ftouhi will be arraigned on the new indictment in federal court in Flint.  The defendant faces a statutory maximum sentence of life in prison.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes.  Any sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.  The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The case is being prosecuted by the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the National Security Division’s Counterterrorism Section.

Amor M. Ftouhi, 50, of Montreal, Canada, who was previously indicted in July 2017, for charges relating to an attack on a Bishop Airport officer in Flint, Michigan, was charged today with an additional offense of committing an act of terrorism transcending national boundaries.

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Matthew Schneider for the Eastern District of Michigan and Acting Special Agent in Charge Jeffery E. Peterson of the FBI’s Detroit Field Office made the announcement.

United States Attorney Schneider stated, “This additional terrorism charge against Mr. Ftouhi shows we will — to the fullest extent of the law — vigorously prosecute terrorists who seek to harm the people of Michigan.”   

"Today's superseding indictment is a clear example of the work done by the Detroit Field Office’s Joint Terrorism Task Force to hold accountable those who seek to harm U.S. citizens on behalf of a foreign terrorist group.  The indictment speaks to the collaborative efforts of law enforcement and intelligence professionals at the state, local and federal level, as well as the FBI’s close relationship with our international partners in Canada," said Jeffery E. Peterson, Acting Special Agent in Charge, Detroit Division of the FBI.

According to court records, Mr. Ftouhi entered the United States from Canada for the purpose of killing government personnel in the United States.  Before entering the United States on June 16, 2017, while in Canada, Mr. Ftouhi conducted online research of American gun laws and for gun shows in Michigan.  Mr. Ftouhi subsequently traveled to Michigan where he was unsuccessful in purchasing a gun and purchased a knife instead.  On June 20, 2017, Mr. Ftouhi walked up to the victim, who is a lieutenant with the Bishop Airport Authority and was in full uniform, and stabbed the police officer in the neck with a knife.  Mr. Ftouhi referenced killings in Syria, Iraq, and Afghanistan, and yelled “Allahu Akbar.”  After his arrest, Mr. Ftouhi told law enforcement that he was a “soldier of Allah” and subscribed to the ideology of al-Qaeda and Usama bin Laden.   

Ftouhi will be arraigned on the new indictment in federal court in Flint.  The defendant faces a statutory maximum sentence of life in prison.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. Any sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.  The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The case is being prosecuted by the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the National Security Division’s Counterterrorism Section.

The former Director of Parks and Grants for Plymouth Township, Michael Mitchell, 49, of Rockford, IL, was charged today by Information with one count of theft from a local government receiving federal assistance, United States Attorney Matthew Schneider announced. 

Schneider was joined in the announcement by Jeffery E. Peterson, Acting Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Thomas Tiderington, Plymouth Township Chief of Police.

According to the Information, in October of 2016, while serving as the Director of Parks and Grants for Plymouth Township, Mitchell stole property belonging to the township, including a commercial lawnmower, a John Deer Gator utility vehicle, and other equipment, with a total value of about $10,000.  Mitchell faces up to 10 years imprisonment and a fine of $250,000.

United States Attorney Schneider stated, “When public officials use their jobs to steal from taxpayers, their theft isn’t just measured in dollars - it is measured by the damage caused by robbing the public of honest government.  We will stand up and fight this corruption at all levels.” 

"Today’s charges of Mr. Mitchell should reassure the citizens of Michigan that the FBI and members of our Detroit Area Public Corruption task force are committed to holding public officials at all levels of government accountable for their actions if they decide to break the law,” said Jeffrey E. Peterson, Acting Special Agent in Charge, Detroit Division of the FBI. 

"I would encourage anyone with information about potential public corruption in Michigan to contact the Detroit FBI’s Public Corruption tip line at 313-965-2222 or our main number 313-965-2323.”

This case is part of the government’s wide-ranging corruption investigation centered in Macomb County, Michigan.  The investigation of this case was conducted by the Federal Bureau of Investigation and Plymouth Township Police Department.  The case is being prosecuted by Assistant U.S. Attorney R. Michael Bullotta.

Former Detroit Police Department Officer Anthony Careathers was sentenced today to twenty-four months’ imprisonment for accepting a bribe from an owner of an automobile collision shop in exchange for referring stolen and abandoned vehicles recovered in the City of Detroit to that shop, United States Attorney Matthew Schneider announced today.

Schneider was joined in the announcement by Jeffrey E. Peterson, Acting Special Agent in Charge, Federal Bureau of Investigation, Patricia Armstrong, U.S. Postal Inspector in Charge, U.S. Postal Inspection Service, Detroit Division and Chief James Craig, Detroit Police Department. The defendant was actively employed with the Detroit Police Department at the time of the offense.

Anthony Careathers, age 52, was sentenced by U.S. District Judge Robert Cleland. Careathers previously pleaded guilty to one count of extortion.

According to the facts alleged in the indictment and further developed at the plea hearing and in sentencing briefing, Careathers accepted cash payments from the owner/operator of a Detroit collision shop in exchange for referring abandoned vehicles to that shop for repairs and for warning the business owner of law enforcement activity.

This is the first defendant to have been sentenced as a result of this investigation.  The others awaiting sentencing or a trial are:

• James Robertson, age 45, pleaded guilty to an Information charging 2 counts of Extortion
• Jamil Martin, 46, pleaded Guilty to an Information charging 1 count of Extortion

• Martin Tutt, age 29, pleaded guilty to an Information charging 2 counts of Extortion

• Charles Wills, age 52, pleaded guilty to two counts of Extortion charged in a Superseding Indictment.

• Deonne Dotson, age 45, is awaiting trial.

All of the Officers were charged with engaging in extortion for using their official positions as Police Officers to refer cars to certain collision shops in exchange for cash payments.

“The vast majority of Detroit Police Officers are courageous, dedicated public servants, but unfortunately these defendants are an exception to that rule,” U.S. Attorney Schneider said.

"I certainly appreciate the collaborative partnership of the state and federal agencies who took part in conducting this investigation." said Chief James Craig. "Although, the actions of these officers are disappointing, I echo U.S. Attorney Matthew Schneider in saying that the vast majority of the men and women on this department, serve the residents of this city with the utmost level of integrity and dedication."

“Anthony Careathers, a former Detroit Police Officer, was held accountable today for his own individual actions.  Careathers' acts should not be considered representative of the vast majority of law enforcement professionals at the Detroit Police Department who serve the citizens of Detroit with honor and integrity every day," said Jeffery E. Peterson, Acting Special Agent in Charge, Detroit Division of the FBI.

The investigation was conducted by the FBI, the U.S. Postal Inspection Service, Detroit Police Department and the following agencies from the FBI Detroit Area Corruption Task Force: Michigan State Police and U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operation Division.

The FBI Detroit Area Corruption Task Force is comprised of personnel from the Detroit Division of the FBI; Michigan State Police; Michigan Department of Attorney General; Detroit Police Department; U.S. Internal Revenue Service, Criminal Investigation Division; U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operations Division; U.S. Postal Inspection Service; U.S. Department of Labor, Office of the Inspector General, Office of Labor Racketeering and

Fraud Investigations; U.S. Department of Housing and Urban Development, Office of the Inspector General; U.S. Department of Transportation, Office of the Inspector General; U.S. Department of Homeland Security, Office of the Inspector General; U.S. Department of Education, Office of the Inspector General; and U.S. Environmental Protection Agency, Office of the Inspector General.

The case is being prosecuted by Assistant United States Attorneys Sarah Resnick Cohen and Craig A. Weier.

John Hamilton, the former top elected official of the 18,000 member Operating Engineers Local 324, International Union of Operating Engineers, was sentenced to twenty-four months in prison today for conspiring to commit extortion, United States Attorney Matthew Schneider announced.

Schneider was joined in the announcement by James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor Office of Inspector General, FBI Special Agent in Charge Jeffrey E. Peterson, Ian Burg, District Director of the Department of Labor, Office of Labor Management Standards, Special Agent in Charge Manny Muriel, Internal Revenue Service—Criminal Investigations, and L. Joe Rivers, Regional Director for the Cincinnati Regional Office of the Labor Department’s Employee Benefits Security Administration.

Hamilton, 63, of Ocala, Florida, had been convicted of conspiring to commit extortion with at least two other former top Local 324 officials.  Hamilton imposed a climate of fear by coercing business agents and other employees of Local 324 to each pay him kickbacks of over $5,000 from their salaries per year into what was called the “Team Hamilton Slate Fund.”  Ostensibly, the slate fund was to be used for union election campaign expenses.  However, Hamilton instead used a significant portion of the money that was forced from union business agents for his own personal benefit.  Hamilton threatened union employees with termination if they complained about the payments to his slate fund.  In fact, in 2010, Hamilton fired one business agent who had complained about the payments to Hamilton’s fund.  Hamilton used some of the money that he extorted to pay for meals and liquor, as well as $5,000 to his daughter as a wedding present.  After losing re-election in an August 2012 membership vote, Hamilton then proceeded to pocket for himself $71,000 from his slate fund, as well as distributing over $35,000 each to Steven Minella and David Hart, two other top Local 324 officials. 

As part of its sentence, the Court ordered Hamilton to pay $250,000 in restitution to the victims of his crime.  

In 2015, Minella, the former Local 324 President, and Hart, the former Local 324 Financial Secretary, both pleaded guilty to felonies for helping to conceal Hamilton’s scheme.  Hart is scheduled to be sentenced on March 27, 2018, and Minella is set to be sentenced on April 11, 2018.   

Local 324 represents heavy equipment and crane operators throughout Michigan.  Hamilton served as the Business Manager of the union, its top elected official, from 2003 through 2012.  The union is headquartered in Bloomfield Township, Michigan. 

“This union official created a climate of fear of retaliation against the hardworking men and women of the union, all for his personal gain,” United States Attorney Matthew Schneider said.  “The court’s sentence today sends a strong message that union officials who abuse their positions of trust to personally profit will face significant punishment.”

“John Hamilton betrayed the trust of members of Local 324 by conspiring to extort payments for personal financial gain from fellow members, including union officers. We will continue to work with our law enforcement partners and the U.S. Department of Labor’s Office of Labor-Management Standards and Employee Benefits Security Administration to safeguard the assets of union members,” said James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

“Conduct of this sort from individuals, such as Mr. Hamilton, who exercise control over union and employee benefit assets must be eradicated,” said L. Joe Rivers, Regional Director for the Cincinnati Regional Office of the Labor Department’s Employee Benefits Security Administration.

“Protecting financial integrity and combatting corruption in labor unions is a very high priority for OLMS,” said Ian Burg, Director of the Office of Labor-Management Standards (OLMS) Detroit-Milwaukee District Office, which enforces the Labor-Management Reporting and Disclosure Act (LMRDA).”  “This case sends a clear message that OLMS will fully investigate and seek justice when anyone attempts to use their union position for personal financial gain.”

"Today’s sentencing of John Hamilton for running an extortion scheme forcing financial contributions from union members, leveraged and enforced with bullying tactics, for his own personal benefit illustrates our continued commitment to hold those chosen by members to represent them accountable for violating their trust," said Jeffery E. Peterson, Acting Special Agent in Charge, Detroit Division of the FBI. “The FBI, by working closely with our law enforcement partners, will continue to aggressively investigate anyone in leadership roles, within the labor union movement, choosing to illegally profit at the detriment of their members”.

The case was investigated by agents of the Department of Labor, Office of Investigations—Labor Racketeering and Fraud, the Office of Labor Management Standards, the Employee Benefits Security Administration, the Internal Revenue Service—Criminal Investigations, and the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorneys David A. Gardey and Dawn N. Ison.

A state senator pleaded guilty today to conspiracy and theft crimes, announced United States Attorney Matthew Schneider.

Joining Schneider in the announcement were Jeffery E. Peterson, Acting Special Agent in Charge, Detroit Division of the FBI and Manny Muriel, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation.

Pleading guilty was Bertram Johnson, Jr., 44, of Highland Park, Michigan

According to court records, from approximately March 2014 through January 2015, Johnson, Jr., a Senator for the State of Michigan, conspired to commit theft, and did commit theft, of monies under the care, custody, and control of the State of Michigan.

Johnson borrowed thousands of dollars in cash from an unnamed co-conspirator, and later placed that co-conspirator on the public payroll as a member of his staff, knowing that the co-conspirator was a “ghost employee” who contributed no work on behalf of Johnson’s staff. The indictment alleges that Johnson placed this “ghost employee” on the public payroll solely to pay off Johnson’s personal loan debt, and that the ghost employee was paid over $23,000 in taxpayer money. 

“Public officials, especially those elected by the people, cannot treat the people’s money as their own,” stated United States Attorney Schneider. “The defendant in this case treated taxpayer money as his own, to repay his personal debt. Such an egregious abuse of power will not be tolerated.”

“This investigation and subsequent plea reinforces the FBI’s commitment to hold public officials accountable by exposing those who engage in criminal conduct at taxpayer expense,” said Jeffery E. Peterson, Acting Special Agent in Charge of FBI Detroit. “We ask that anyone who has information regarding similar actions by any public official contact Detroit or their nearest FBI field office.”

“Senator Johnson made a conscious decision to violate the trust and confidence of the constituents that he was elected to represent,” stated Special Agent in Charge Manny J. Muriel, IRS Criminal Investigation.  “As today’s guilty plea shows, IRS-CI, along with our law enforcement partners will continue to hold those who use fraud and deceit to line their pockets by stealing from our nation’s taxpayers accountable.”

Johnson faces a statutory maximum penalty of ten years in prison and is scheduled to be sentenced on August 7, 2018.

This case was investigated by agents of the FBI and IRS-CI. This case is being prosecuted by Assistant United States Attorneys J. Michael Buckley and Frances Lee Carlson

James M. Elbert, III, of Flint was sentenced to 260 months (21⅔ years) in federal prison for kidnapping and being a felon in possession of ammunition, U.S. Attorney Matthew Schneider announced today. 

Schneider was joined in the announcement by Jeffery E. Peterson, Acting Special Agent in Charge of the Detroit Division of the Federal Bureau of Investigation (FBI), and George N. Sippert, Chief of Police of the Flint Township Police Department.

U.S. District Court Judge Matthew F. Leitman imposed sentence on James M. Elbert, III, 29, following his guilty plea to kidnapping and felon in possession of ammunition.  Because of his prior record, Elbert was designated as an armed career criminal and a career offender, which subjected him to a mandatory minimum sentence of at least 15 years in prison.  Judge Leitman also sentenced Elbert to three years of federal supervised release following his term of incarceration.

According to court documents, Elbert, a drug dealer, traveled from Arkansas to Michigan to collect a drug debt from the victim.  Elbert and his co-defendant Steven J. Bridges, who were both armed with firearms, kidnapped the victim from a Flint Township apartment complex.  Elbert and Bridges then tied the victim up, placed a plastic bag over his head, and transported him to a vacant house in Flint.  Once at the vacant house, Elbert and Bridges took the victim to the basement where they tied him to a chair and placed a gag in his mouth, which they secured by wrapping tape around the victim’s head and neck.  During the kidnapping, Elbert made telephone calls to the victim’s family threatening to kill to the victim if his debt was not paid.  Officers with the Flint Township Police Department ultimately learned of the victim’s location and rescued him before he was subjected to further harm.  The victim was transported to a local hospital for treatment and was later released in good condition.“We are focusing on the most violent offenders in the Flint area in order to protect our citizens from violent criminal predators,” Schneider said.  “Armed kidnapping is one of the most serious violations of public safety, making people vulnerable in their own neighborhoods.  We will bring strong federal penalties against those who prey on citizens all across the Eastern District of Michigan.”

“The FBI is pleased to have assisted the Flint Township Police Department in bringing Mr. Elbert to justice,” said Peterson, Acting Special Agent in Charge, Detroit Division of the FBI.  “This incident once again underscores the dangers we face from illegal drugs and the violent crimes that often accompany drug trafficking activities.  While dangers remain so long as illegal drugs are on our streets, the public should know that these criminals will not escape the reach of law enforcement, even when they come from hundreds of miles away.”

“This case once again demonstrates the commitment to cooperation between local police agencies and their Federal partners.  Law enforcement is most often successful when combining resources.  We are grateful for the support of the FBI and the commitment and dedication to our community’s safety exhibited by the efforts of the United States Attorney’s Office,” Chief Sippert said.

The case was investigated by the Flint Township Police Department with assistance from special agents of the FBI.  The case was prosecuted by Assistant United States Attorney Anthony P. Vance.           

A Detroit, Michigan-area doctor was sentenced to 72 months in prison today for his role in a $10.4 million conspiracy to defraud the Medicare program.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Acting Special Agent in Charge Timothy Waters 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 made the announcement.

Mahmoud Rahim, M.D., 65, of West Bloomfield, Michigan, was sentenced by U.S. District Judge Nancy G. Edmonds of the Eastern District of Micihgan.  Judge Edmonds also ordered the defendant to forfeit $1,679,505.  The restitution amount will be determined at a later hearing.

After a one-week trial in September 2017, Rahim was convicted of one count of conspiracy to commit health care fraud and wire fraud, one count of wire fraud, one count of conspiracy to receive health care kickbacks and two counts of receiving healthcare kickbacks.  According to the evidence presented at trial, Rahim accepted kickbacks from his co-conspirators in exchange for referring Medicare patients for electromyogram tests (EMGs), some of which were unnecessary, and physical therapy performed by unlicensed individuals.  Rahim disguised these payments as “rent” and set up a shell company to hide this illegal scheme.

Rahim was charged along with office manager Janet Nahkle, 58, of Dearborn, Michigan, in an indictment returned in June 2016.  Nakhle pleaded guilty to conspiracy to receive health care kickbacks in December 2016 and was sentenced to serve 18 months in prison.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  Fraud Section Trial Attorneys Jessica Collins and Amy Markopoulos prosecuted the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

The wife of former UAW Vice President General Holiefield pleaded guilty to the felony offense of filing false tax return documents, announced U.S. Attorney Matthew Schneider.

Joining in the announcement were Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Ian Burg, District Director, U.S. Department of Labor – Office of Labor-Management Standards and David P. Gelios, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.

Monica Morgan, 54, of Harrison Township, Michigan pled guilty before United States District Judge Paul D. Borman.  Morgan admitted to filing tax return documents which failed to report more than $200,000 of income she received during 2011. 

Morgan is the wife of former UAW Vice President General Holiefield, who died in March of 2015.  From 2010 to 2014, Holiefield was the director of the UAW Chrysler Department and acted as the lead negotiator and the lead administrator for the collective bargaining agreements between the UAW and FCA.

According to court records, Morgan owned and operated the companies Monica Morgan Photography and Wilson’s Diversified Products based in Detroit, Michigan.  Morgan’s companies received hundreds of thousands of dollars from the UAW-Chrysler National Training Center during the years when Holiefield was a UAW Vice President.  Morgan’s companies also received significant payments from Holiefield’s charity, known as the Leave the Light On Foundation.  Former FCA Vice President Alphons Iacobelli and former FCA Financial Analyst Jerome Durden each acknowledged using Wilson Diversified Products and the Leave the Light On Foundation to conceal payments made on behalf of FCA to UAW Vice President Holiefield.

Under the terms of the plea agreement, Morgan faces a term of up to 27 months in prison and must pay the U.S. Treasury Department restitution of $190,747.

Morgan’s plea marks the fourth conviction in the ongoing criminal investigation into illegal payoffs involving UAW officials.

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 plea is yet another step taken towards combatting the years-long corruption that plagued the relationship between senior officials at FCA who illegally lined the pockets of UAW officials and, in this instance, the wife of General Holiefield, the former UAW Vice President in charge of the Chrysler Department,” stated United States Attorney Matthew Schneider.  “This plea should serve as a warning that we will relentlessly pursue individuals who cheat on their taxes by hiding ill-gotten gains from the United States.”

“Today’s plea is another example of the government’s efforts to eradicate corporate fraud.  In this particular case, Monica Morgan intentionally took funds which were intended to train hard working men and women.  Those who choose self-enrichment at the expense of others will be caught, said Manny Muriel, Special Agent in Charge of the Detroit’s IRS Criminal Investigation (IRS-CI), in a statement. Muriel continued, “And when they do not report criminally derived funds, they commit another equally egregious crime –tax fraud.  IRS-CI will hold everyone accountable, no matter their position.”

“Ms. Morgan is the fourth individual to plead guilty in a multi-year scheme in which FCA executives paid off the senior UAW officials who negotiated and administered the collective bargaining agreements between the union and company,” said District Director Ian Burg of the U.S. Department of Labor’s Office of Labor-Management Standards (OLMS).  “OLMS is committed to protecting financial integrity in labor unions and also protecting against double-dealing and corruption in the union collective bargaining process.” 

“Union workers sacrifice every pay period by having money withheld from their salary to invest in their future training opportunities”, said Timothy Waters, Acting Special Agent in Charge, Detroit Division of the FBI.   “Today’s guilty plea highlights an additional person held accountable for a complex fraud scheme which undermines the trust and hard work by union members.  The FBI led labor racketeering task force will continue to investigate this matter to the fullest and ensure those who violate the law will be held accountable.”

Morgan’s sentencing date has been set for June 4, 2018.

Rodney Moret of Madison Heights, Michigan was sentenced today to 75 months’ imprisonment for participating in conspiracies to distribute prescription pills illegally and to defraud Medicare, U.S. Attorney Matthew Schneider announced. His crimes include over $15 million of prescriptions drugs, and an additional $6 million in health care fraud.

Schneider was joined in the announcement by Timothy Waters, Acting Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigations and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of health and Human Services.

Dr. Moret, 67, was sentenced by U.S. District Judge Matthew F. Leitman.

Moret previously pleaded guilty to one count of conspiracy to illegally distribute prescription drugs and one count of conspiracy to commit health care fraud. The pleas were based on Moret’s participation as the sole practitioner at Advance Care Services (ACS), a medical clinic in Southfield, MI. The medical practice purported to be a pain management and HIV infusion clinic, but was actually nothing more than a “pill mill”.  The scheme involved patient marketers using “patients” to obtain medically unnecessary controlled substance prescriptions issued by Moret, who at the time was a licensed medical doctor. Medicare was billed for examinations and tests that were not conducted properly or not conducted at all. Once the prescriptions were filled, the marketers sold the drugs on the street (?) in Southeast Michigan. 

According to statements made at the plea hearing and evidence submitted at sentencing, the clinic operated from 2010 until 2015 and was owned by defendant Jorge Azar. The day-to-day operations of the clinic were managed by defendant Jellie Villalon. Moret would issue the prescriptions after a cursory examination or no examination at all and often took advantage of the female “patients” who were at the clinic to receive controlled substance prescriptions by sexually molesting or harassing them.

Moret was responsible for illegally distributing over 700,000 dosage units of Hydrocodone, (Vicodin, loratab), more than 240,000 dosage units of Alprazolam, and more than 2 million milliliters of promethazine with codeine cough syrup, worth more than $15 million on the street market.  He was responsible for over $6 million in health care fraud.

Hydrocodone, Alprazolam, and promethazine with codeine cough syrup are controlled substances that may be prescribed by a doctor only for a legitimate medical purpose. A doctor must act in good faith in prescribing these medications. These are powerful and addictive drugs. Hydrocodone is in the opioid class, is easily abused, and can lead to addiction and eventual heroin use.

“Physicians who divert prescription drugs to the street market are contributing to the drug epidemic in the country, and we are focusing our enforcement efforts on stopping them,” stated United States Attorney Matthew Schneider.

“Prescribing controlled substances – such as Hydrocodone – outside the scope of professional practice and without a legitimate medical purpose is illegal”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “Physicians who in engage in this type of behavior put patient health and safety at risk and exacerbate the opioid crisis. The OIG will continue to work with our law enforcement partners to ensure that those who commit these criminal acts are held accountable.”

“Rodney Moret, a former physician, intentionally fueled the local opioid epidemic by over prescribing addictive medications to patients for his own personal gain,” said Timothy Waters, Acting Special Agent in Charge, Detroit Division of the FBI.  “The message should be clear, any doctor or healthcare professional who prioritizes profit or does harm to their patients under the guise of providing health care will be subject to the full investigative resources of the FBI and our law enforcement partners.”  

Moret was one of five defendants named in a multi-count first superseding indictment unsealed in February 2016. All defendants, including the owner and manager of ACS, entered guilty pleas to either conspiracy to distribute prescription pills or conspiracy to commit health care fraud.

Based upon his offense conduct in this case, on March 31, 2017, Dr. Moret’s license to practice medicine was revoked by the State of Michigan Department of Licensing and Regulatory Affairs, Bureau of Professional Licensing.  

The case was investigated by the Federal Bureau of Investigation and the United States Department of Health and Human Services, Office of the General Counsel.  The case was prosecuted by Assistant U.S. Attorneys Regina R. McCullough and Michael Heesters.

A resident of Ferndale was sentenced today to 114 months in prison on convictions connected to a scheme to defraud the Internal Revenue Service, U.S. Attorney Matthew Schneider announced today. 

Joining Schneider in the announcement was Manny Muriel, Special Agent-in-Charge of the Detroit Office of the Internal Revenue Service – Criminal Investigation.

Receiving the sentence from U.S. District Judge Judith E. Levy was Durand Micheau, 48.  Judge Levy also imposed a 3-year term of supervised release and ordered Micheau to pay restitution in the amount of $360,500 to the U.S. Treasury.

Micheau was convicted by a jury in May 2017 on numerous counts of conspiracy, mail fraud, aggravated identity theft, and engaging in illegal monetary transactions.  Micheau’s wife, Sharon  Gandy-Michaeu, and two of her brothers, Anthony Gandy and Christopher Gandy, were convicted by a different jury on the same charges in March 2017.  Last month Judge Levy sentenced Anthony Gandy to 80 months in prison and Sharon Gandy-Micheau to 72 months in prison.  In August 2017, she sentenced Christopher Gandy to 72 months in prison. 

The evidence presented at the trials established that the defendants participated in a scheme to defraud the federal government that centered on the filing of over 20 fraudulent Forms 1041, U.S. Income Tax Returns for Estates and Trusts.  The returns requested over $1.4 million in refunds based on income tax withholdings that never occurred.  The returns resulted in the IRS’s mailing 14 income tax refund checks to the defendants that were payable to the trusts and totaled $940,000.  To facilitate the scheme, the defendants obtained employer identification numbers (EINs) for the trusts from the IRS, opened post office boxes, and opened bank accounts in the names of the trusts.  The trusts did not exist.  The U.S. Treasury refund checks were either deposited into the bank accounts, followed shortly thereafter by large cash withdrawals, or cashed at local check-cashing stores.

In addition, the scheme used the names and identification information of a number of individuals whose purses or wallets had been lost or stolen, and it depended on the assistance of some of the defendants’ close friends and acquaintances.

“These defendants attempted to steal taxpayer money, and they did so by using the identities of innocent victims,” U.S. Attorney Schneider said.  “This case is yet another example of how the talented IRS agents in our district are detecting fraud and bringing offenders to justice.”

Special Agent-in-Charge Muriel added, “Our tax system is based on voluntary compliance and relies on the honor system to accurately report income and deductions.  Anthony Gandy and his codefendants abused that honor system by creating fictitious tax withholdings in excess of $1.4 million.  Today’s sentencing demonstrates that there are consequences for those who willfully file fraudulent returns.”

The case was investigated by agents of the Internal Revenue Service – Criminal Investigation.  It was prosecuted by Assistant U.S. Attorneys Stephen Hiyama and Ross MacKenzie, with the assistance of paralegal Carol Oliver.

New charges were filed yesterday in the prosecution of the northwest Detroit street gang Young and Scantless (YNS). 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; U.S. Attorney Matthew J. Schneider of the Eastern District of Michigan; Special Agent in Charge James Dier of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division; and Police Chief James E. Craig of Detroit made the announcement.

The second superseding indictment charges George Eubanks, 30, of Detroit, and James Bowens, 37, of Detroit with taking part in the YNS racketeering enterprise. The charges describe YNS as one of the most dangerous in the city of Detroit, known for its ruthless reputation and violent acts including seeking to intimidate, injure and kill rival drug dealers to eliminate competition; attempting to instill fear in the community in order to discourage cooperation with police and witnesses from reporting YNS-related crime; and posting numerous intimidating photographs and videos to social media.

Five YNS members, including alleged leader Edward Tavorn, 31, of Detroit, were previously charged with a variety of crimes including a murder, robberies that turned into murders, shootings, a home invasion, arson, and narcotics distribution. 

The latest indictment also charges Tavorn, Eubanks and Bowens with a narcotics conspiracy in which Eubanks and Bowens agreed to sell drugs in West Virginia on Tavorn’s behalf while Tavorn was incarcerated on pending charges.  The indictment alleges that in furtherance of the plot, Eubanks and Bowens possessed firearms; Bowens kidnapped and fired gunshots at a victim to force the victim to rent a vehicle for gang members to use to transport narcotics to West Virginia; and Eubanks and Bowens possessed with intent to distribute approximately 550 grams of cocaine base.

The charges are the result of the Detroit One initiative, a collaborative effort between law enforcement and the community to reduce violent crime in Detroit. 

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

This case is being investigated by the ATF’s Comprehensive Violence Reduction Partnership Task Force, consisting of representatives of the ATF, Detroit Police Department, Michigan State Police and Michigan Department of Corrections.  Assistance has been provided by the West Virginia State Police.  The case is being prosecuted by Trial Attorney Conor Mulroe of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Jerome F. Gorgon Jr. of the U.S. Attorney’s Office of the Eastern District of Michigan.

A Detroit-area podiatrist pleaded guilty today to health care fraud for his participation in a $1 million scheme involving podiatry services that were never rendered.  

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge David P. Gelios 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 made the announcement.

Lawrence Young, D.P.M., 70, of Bloomfield Hills, Michigan, pleaded guilty to one count of health care fraud before U.S. District Judge Judith E. Levy of the Eastern District of Michigan.  Sentencing has been scheduled for May 22 before Judge Levy.  

As part of his guilty plea, Young admitted that from approximately January 2010 through April 2017, he engaged in a scheme to defraud the Medicare program by causing the submission of false and fraudulent claims to Medicare for the application of an “Unna Boot,” which is a type of medicated dressing typically applied after surgery to control swelling of the leg or foot.  Young admitted regularly submitting these claims for reimbursement even though he knew that his patients routinely received nothing more than a non-medicated dressing.  The scheme involved the submission of more $1 million in fraudulent claims to Medicare, he admitted. 

This case was investigated by the FBI and HHS-OIG.  Trial Attorneys Tom Tynan and Steve Scott of the Criminal Division’s Fraud Section are prosecuting the case. 

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion. 

A Grosse Pointe Park resident was convicted today by a jury on charges of wire fraud, transportation of hazardous material, and false statements in a scheme involving the distribution of body parts, some that tested positive for diseases, including HIV and hepatitis, announced United States Attorney Matthew Schneider.
    
Schneider was joined in the announcement by Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division; Regional Special Agent-in-Charge Thomas J. Ullom, U.S. Department of Transportation - Office of Inspector General; Officer in Charge Elizabeth Harton of the Centers for Disease Control and Prevention, Division of Global Migration & Quarantine and  Arizona Attorney General Mark Brnovich.

Convicted was Arthur Rathburn, 63.  The jury deliberated approximately 4 hours.  Rathburn was convicted on 7 of the 9 wire fraud counts and the count alleging illegal transportation of hazardous material. He was acquitted of the false statement count. 

United States Attorney Matthew Schneider stated, “The jury has delivered justice in this case, and we thank trial prosecutors John Neal and Tim Wyse and our law enforcement partners  for their outstanding work in investigating and prosecuting these particularly gruesome crimes.”

Today’s verdict is a victory for the cause of justice”, said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI.  “The fraud scheme orchestrated by IBI shocked even the most experienced of our investigative team as individuals, even in death, were victimized as IBI intentionally and recklessly marketed and transported contaminated human remains despite regulations prohibiting such practices.   Once again, personal greed overcame decency.  And, once again, the message should be clear that protecting the public from fraudulent business practices will remain a priority of the FBI and our federal partners.”  

According to evidence presented during the two-week trial, Arthur Rathburn and his wife Elizabeth Rathburn were the owners and operators of International Biological, Inc. (“IBI”).  IBI’s primary function was renting human body parts, such as heads and torsos, to customers who used the remains for medical or dental training.   The Rathburns participated in a scheme to defraud in which IBI obtained donated bodies and body parts from suppliers, which IBI would then typically dismember and rent out to customers for medical or dental training.  Arthur and Elizabeth Rathburn knew that the donors of a number of these bodies had died of an infectious disease, or that the bodies had tested positive for an infectious disease.  IBI sometimes obtained diseased remains from their suppliers at a reduced cost, due to the fact that end users of human remains generally reject infectious bodies and body parts for use in medical or dental training.
   
It was part of the scheme that the Rathburns would provide human remains to IBI’s customers, falsely representing to those customers that the remains were free of certain infectious diseases.  The Rathburns were aware that IBI’s customers would not accept remains infected with certain diseases.  The scheme included directly profiting from infectious remains supplied to unwitting customers in violation of contractual agreements and failing to disclose to customers that IBI ignored industry standard precautions to prevent potential cross-contamination between infectious and non-infectious remains.

Evidence further demonstrated that Arthur Rathburn willfully caused to be delivered hazardous material regulated by the Department of Transportation, namely a human head of an individual known to have died from bacterial sepsis and aspiration pneumonia, to Delta Cargo, an air carrier, for transportation in air commerce in violation of federal regulations.  In violation of these regulations, the human head was packaged in a trash bag placed within a camping cooler.  Seven other human heads were also part of the shipment and packed in the same manner.  Large quantities of liquid blood were found within the coolers.  Furthermore, Arthur Rathburn was charged with making three false statements connected to this shipment. 

Elizabeth Rathburn, 56, pleaded guilty to wire fraud in March, 2016.  According to the plea agreement, Elizabeth Rathburn admitted to providing human remains to a customer of IBI’s falsely representing to that customer that the remains were free of certain infectious diseases, when in fact she knew the remains had tested positive for Hepatitis B and HIV.   She is awaiting sentencing. 

Arthur Rathburn face a maximum statutory penalty of twenty years in prison for each of nine counts of wire fraud.  Arthur Rathburn also faces a maximum of five years in prison for one charge of Transporting Hazardous Material under 49 U.S.C. §46312 and a maximum of five years in prison for each of three counts charging him with making false statements to the United States Government.

The investigation in this case was handled by the Federal Bureau of Investigation, the Centers for Disease Control and Prevention, the Arizona Attorney General’s Office, and the U.S. Department of Transportation, Office of Inspector General with support from U.S. Customs and Border Protection and Homeland Security Investigations. Special thanks are also due to the Wayne County Medical Examiner’s Office for their critical assistance.  The case is being prosecuted by Assistant U.S. Attorneys John K. Neal and Timothy J. Wyse.
 

The former Vice President for Employee Relations at Fiat Chrysler Automobiles LLC (“FCA” or “Fiat Chrysler”) who served as the lead negotiator for, and administer of, the collective bargaining agreements between FCA and the UAW, pleaded guilty today to conspiring to commit violations of the Labor Management Relations Act, announced U.S. Attorney Matthew Schneider.

Joining in the announcement were James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Ian Burg, District Director, U.S. Department of Labor – Office of Labor-Management Standards, David P. Gelios, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, and Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations.

Alphons Iacobelli, 58, of Rochester Hills, Michigan, pled guilty before United States District Judge Paul D. Borman. Iacobelli admitted that he conspired with FCA, with other FCA executives and employees, and with senior UAW officials to illegally deliver over $1.5 million in prohibited payments and things of value to senior UAW officials. Iacobelli was involved in the conspiracy from 2009 through June 2015. The senior UAW officials included UAW Vice President General Holiefield, UAW Assistant Director Virdell King and others.

Iacobelli also admitted that when he conspired to make to these illegal payments to senior UAW officials, he did so while acting in the interest of his employer, FCA - - in an effort to obtain benefits, concessions, and advantages for FCA in the negotiation, implementation, and administration of the collective bargaining agreements between FCA and the UAW.

The illegal payments included paying off the mortgage on Holiefield’s home, first-class airline travel, designer clothing, furniture, jewelry and custom-made watches.

In August 2014, Iacobelli authorized the expenditure of more than $30,000 for a party for a different senior UAW official held at the FCA-UAW World Class Manufacturing Academy in Warren, Michigan. The expenditure included charges for “ultra-premium” liquor, more than $7,000 worth of cigars, and more than $3,000 worth of wine with custom labels in honor of that UAW official.

Besides pleading guilty to conspiracy to violate the Labor Management Relations Act, Iacobelli also pled guilty to subscribing a false tax return based on his failure to report hundreds of thousands of dollars in income that he illegally diverted from the UAW-Chrysler National Training Center.

Iacobelli’s plea marks the third conviction in the ongoing criminal investigation into illegal payoffs to UAW officials.

• In August 2017, Jerome Durden, a financial analyst in FCA’s Corporate Accounting Department, pled guilty to a conspiracy charge, admitting that he and Iacobelli used the UAW-Chrysler National Training Center as a conduit to conceal over a million dollars in prohibited payments and things of value paid to Holiefield and other UAW officials. Durden admitted to preparing and filing numerous false tax returns on behalf of the tax-exempt UAW-Chrysler National Training Center and on behalf of a purported charity called the Leave the Light On Foundation as part of a conspiracy to obstruct and impair the IRS. Durden’s sentencing has been set for May 22, 2018.

• Later in August 2017, King, a senior UAW official responsible for negotiating and administering the national collective bargaining agreements with FCA on behalf of tens of thousands of UAW members, and a member of the UAW’s National Negotiating Committees in 2011 and 2015, pled guilty to conspiring to take and receive money and things of value from persons acting in FCA’s interest, including Iacobelli and Durden. King’s sentencing has been set for June 4, 2018.

“Fiat Chrysler’s most senior labor negotiator colluded with top UAW leaders for many years to illegally line UAW officials’ pockets. Combatting corruption of this sort is one of our office’s highest priorities, and these crimes of greed will not be tolerated in our district,” said U.S. Attorney Schneider.

"Today's guilty plea signifies another victory for the hard working members of the UAW who were promised honest and ethical representation from the labor leaders they elected to bargain in their best interests with FCA”, said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “Instead, both UAW and FCA officials conspired to receive monetary benefits at the expense of their workforce which understandably erodes the public’s confidence in the collective bargaining process. So long as such practices exist, the FBI and its federal partners will continue to aggressively root out corruption in both corporate and labor union boardrooms.”

“Iacobelli conspired with Fiat Chrysler Automobiles and its executives to corrupt the collective bargaining process by making more than $1.5 million in prohibited payments and things of value to officers and employees of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America. We will continue to work with our law enforcement partners and the U.S. Department of Labor’s Office of Labor - Management Standards to protect the union members’ right to fair representation,” said James Vanderberg, Special Agent-in-Charge Chicago Region, U.S. Department of Labor Office of Inspector General.

“Alphons Iacobelli was also convicted of criminal tax violations of the United States Tax Code based on his actions in diverting hundreds of thousands of dollars for his personal benefit from the UAW-Chrysler National Training Center, a tax exempt organization, and failed to report that diverted income on his individual federal tax returns, stated Manny Muriel, Special Agent in Charge of IRS-Criminal Investigation’s Detroit Field Office. “Mr. Iacobelli will be required to repay the Internal Revenue Service and the American Taxpayers over $835,000 and faces a statutory maximum of three years in prison for his tax crime. IRS-CI will continue to work with its partners in federal law enforcement to ensure that individuals who misuse tax exempt organizations for their personal benefit face the most serious penalties under the law.”

Iacobelli’s sentencing has been set for May 29, 2018. He faces a statutory maximum penalty of 8 years in prison.

A Detroit, Michigan-area doctor was sentenced to 24 months in prison today for his role in a $1.7 million health care fraud scheme that involved billing Medicare for physician home visits that were medically unnecessary and/or were billed under unwarranted treatment codes that resulted in inappropriately high payments.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge David P. Gelios 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 made the announcement.

Gerald Daneshvar M.D., 41, of West Bloomfield, Michigan, was sentenced by U.S. District Judge Avern Cohn of the Eastern District of Michigan.  Daneshvar was convicted in May 2017 after a two-week jury trial of one count of conspiracy to commit health care fraud.   Daneshvar’s co-defendant, Stephen Mason, M.D., was previously sentenced to 18 months on Aug. 22, 2017, and his other co-defendant, Leonard Van Gelder, M.D., awaits sentencing.     Mason and Van Gelder had each previously pleaded guilty to one count of conspiracy to commit health care fraud.  

According to the evidence presented at trial, from August 2012 through August 2013, Daneshvar and his co-conspirators worked for Lake MI Mobile Doctors (Mobile Doctors), a home visiting physician company that provided doctor’s visits to purportedly homebound Medicare patients.   While working at Mobile Doctors, Daneshvar billed Medicare for home patient visits that did not qualify for payment because the patients either were not sick or were not homebound.  Daneshvar conspired with others to bill Medicare for the highest paying codes for these visits, even though the visits were short and perfunctory, or were unnecessary, the evidence showed.  Additionally, Daneshvar referred these patients for home health services that were unnecessary and were then billed to Medicare.  In exchange, Daneshvar was paid more by Mobile Doctors. 

The chief executive officer of Mobile Doctors pleaded guilty in a related case in the Northern District of Illinois and was sentenced to 15 months in prison.  Another doctor who operated out of the Chicago branch of Mobile Doctors was convicted after trial and sentenced to 40 months in prison.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  Fraud Section Trial Attorneys Amy Markopoulos and Stephen Cincotta prosecuted the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

The two leaders of the Detroit branch of the Rollin 60s Crips street gang were sentenced this morning for their roles in gang-related murders, shootings, and drug distribution.  Jerome Hamilton and Darriyon Mills’s sentences follow their guilty pleas to RICO conspiracy and firearm charges and are the result of the collaborative efforts of law enforcement and the community to reduce homicide and other violent crime under the Detroit One program, announced U.S. Attorney Matthew Schneider.

Joining in the announcement was Paul Vanderplow, Special Agent in Charge of the Detroit Field Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Chief James Craig of the Detroit Police Department.

The Court sentenced leader, Jerome Hamilton, 26, of Detroit, to 30 years in prison. Hamilton previously pleaded guilty to racketeering conspiracy and use of a firearm during and in relation to a crime of violence causing death.  Hamilton took responsibility for, amongst other racketeering activity, issuing a “green light” to murder rival gang members of the Playboy Gangster Crips in 2011, which resulted in a non-fatal shooting of a rival gang member; a firebombing of rival Blood gang member’s house; and the August 8, 2011 homicide of Kionte Atkins during a drive-by shooting.  Hamilton also admitted to being involved in the distribution of marijuana and illegal prescription pills as part of his membership with the Rollin 60s Crips.  

Hamilton’s second-in-command, Darriyon Mills, 22, of Detroit, was sentenced to 24 years in prison. Mills previously pleaded guilty to racketeering conspiracy and use and carry of a firearm during and in relation to a crime of violence. Mills committed armed robberies, carjackings, and attempted multiple murders. He also trafficked drugs for the gang and in this way funded the Rollin 60s and their crimes. 

According to the indictment, the Rollin’ 60s Crips is a national street gang founded in Los Angeles, California, in the mid-1970s.  In approximately 2006, Jerome Hamilton started a Detroit set of the Rollin 60s, which now boasts approximately 150 members and who operated primarily on the west side of Detroit in the vicinity of Seven Mile and Tracey.  The Rollin 60s Detroit chapter is a violent organization responsible for numerous assaults, robberies, carjackings and the unlawful possession and trafficking of firearms and narcotics in and around the Detroit metropolitan area over the last nine years.  The gang uses violence as a means of retribution for acts done by rival gang members, to intimidate witnesses, and as a means for individuals to maintain or advance their position within the gang. 

United States Attorney Matthew Schneider stated, “This office is making it a top priority to pursue violent criminals and remove them from our streets.  All Michigan residents deserve safety and we will relentlessly prosecute gang members who commit violence.”

“Today’s sentence sends a clear message that we will not tolerate the senseless violence committed by criminal gangs,” said ATF Acting Special Agent in Charge Paul Vanderplow.  “ATF stands committed to working with our law enforcement partners to end the gang violence that plaques our neighborhoods.  Every citizen has the right to feel safe in their neighborhoods.”

In addition to Hamilton and Mills, twelve other Rollin 60 Crips members pleaded guilty or were convicted after trial of various racketeering or firearm charges.

The arrests and convictions in this case are, in part, the result of the Detroit One Initiative, a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit.  The case was investigated by the ATF’s Comprehensive Violence Reduction Program, which includes representatives of the Detroit Police, Michigan State Police, and Michigan Department of Corrections, in coordination with the FBI Violent Crime Task Force, and Detroit Police Department.  

The case is being prosecuted by Assistant U.S. Attorneys Eaton Brown, Shane Cralle, and Michael Heesters.
 

A Michigan clinic office manager pleaded guilty today for his role in a health care fraud scheme that involved the unnecessary prescription of controlled substances and that resulted in a $131 million loss to Medicare.

Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division, 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 and Special Agent in Charge Manny Muriel of Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.

Yasser Mozeb, 35, of Oakland County, Michigan, the office manager of the Tri-County Network, based in Detroit, Michigan, pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and pay and receive health care kickbacks, before U.S. District Judge Denise Page Hood of the Eastern District of Michigan.  Sentencing has been scheduled for May 31 at 2 pm EST before Judge Hood. 

“With one American dying of a drug overdose every nine minutes, we are facing the deadliest drug crisis in American history,” said Attorney General Sessions. “Sadly, some have chosen to take advantage of this crisis and exploit vulnerable patients for profit. At the Department of Justice we’ve taken a number of new steps this past year to fight opioid-related fraud. Today we have won another victory in this fight and I want to thank our FBI agents, DOJ attorneys, and everyone else who helped us bring the defendant to justice.” 

“Prescribing unneeded drugs in exchange for kickbacks are not just crimes of greed, they are crimes that make Michigan’s opioid crisis even worse — and that is why our office will relentlessly pursue these cases,” said U.S. Attorney Matthew Schneider.

“Healthcare fraud schemes involving the prescribing of unnecessary prescription drugs, performing of extraneous medical procedures, and fraudulent billing practices continue to plague southeastern Michigan communities,” said FBI Special Agent in Charge Gelios.  “Today’s guilty plea underscores the level of commitment that the FBI and its federal partners devote in holding accountable those responsible, along with their co-conspirators.”

“It is unconscionable that Mozeb and his coconspirators would put patients’ health at risk and potentially exacerbate the opioid epidemic,” said HHS-OIG Special Agent in Charge Pugh. “We, along with our law enforcement partners, will work tirelessly to hold these criminals accountable.”

As part of his guilty plea, Mozeb admitted that he conspired with the owner of the Tri-County Network, Mashiyat Rashid, to pay illegal kickbacks and bribes to Medicare beneficiaries, co-conspirator patient recruiters and others, in order to obtain patients for the Tri-County Network.  Mozeb also admitted that he participated in a scheme with Rashid and other co-conspirators to prescribe medically unnecessary controlled substances, which allegedly included oxycodone, hydrocodone and oxymorphone,  to Medicare beneficiaries, many of whom were addicted to narcotics.  He admitted that in furtherance of the conspiracy, coconspirators also directed physicians to require Medicare beneficiaries to undergo medically unnecessary facet joint injections if the beneficiaries wished to obtain prescriptions for controlled substances. 

Mozeb admitted that he and Rashid conspired with physicians in the Tri-County Network to refer Medicare beneficiaries to specific third party home health agencies, laboratories and diagnostic providers in exchange for illegal kickbacks and bribes even though those referrals were medically unnecessary. 

Mozeb was part of a conspiracy that submitted or caused the submission of false and fraudulent claims to Medicare in excess of $131 million, he admitted. 

Mozeb is the fifth defendant who has pleaded guilty in connection with the Tri-County investigation.  Mozeb was charged along with Mashiyat Rashid, 37, of West Bloomfield, Michigan; Spilios Pappas, 61, of Monclova, Ohio; Abdul Haq, 72, of Ypsilanti, Michigan; Joseph Betro, 57, of Novi, Michigan; Tariq Omar, 61, of West Bloomfield, Michigan; and Mohammed Zahoor, 51 of Novi, Michigan, in an indictment unsealed on July 6, 2017.  Rashid, Pappas, Betro, Omar and Zahoor are awaiting trial.  

An indictment 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, HHS-OIG and IRS-CI.  Trial Attorney Jacob Foster of the Criminal Division’s Fraud Section is prosecuting the case. 

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion. 

An indictment was unsealed today charging Dr. Zongli Chang, M.D. and seven other individuals with conspiracy to illegally distribute prescription drugs, U.S. Attorney Matthew Schneider announced today. Chang is also charged with health care fraud.

Schneider was joined in the announcement by Special Agent in Charge David P. Gelios 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 are:

Zongli Chang, 52, of Novi

Darryl Parker, 56, of Detroit

Tye Chandler, 26, of Detroit

Karen Hall, 57, of Detroit

Deangelo Givhan, 28, of Detroit

Yolanda Cannon, 39, of Detroit

Melvin McGuire, 48, of Detroit

Khary Tremble, 44, of Detroit

The indictment alleges that from January 2012 to May of 2017 (when the State of Michigan revoked Chang’s medical license), Chang and his coconspirators engaged in a large-scale drug diversion scheme.  It is alleged that Chang abused his medical license by writing medically unnecessary and highly addictive controlled substance prescriptions in return for cash payments. Chang commonly wrote prescriptions for controlled substances, to include Hydrocodone-Acetaminophen, Oxycodone HCl, Alprazolam, Carisoprodol and Promethazine/codeine syrup.   According to the indictment, Chang prescribed more than 2,700,000 dosage units of Schedule II, III and IV controlled substances during the course of the conspiracy.  These controlled substances had a conservative street value in excess of $18,000,000. Agents seized more than $600,000 in cash during a search of Chang’s Novi home.   

According to the indictment, Chang relied upon “patient recruiters” to bring “fake patients” to his office.  These recruiters paid cash to acquaintances to act as patients of Dr. Chang.  The recruiters paid Chang cash at each office visit for the prescriptions provided.  The recruiters also paid cash to the “fake patients” for appearing for the medical visits.  After a cursory examination or no examination at all, Chang always prescribed the requested controlled substances.   Darryl Parker, Tye Chandler, Karen Hall, Deangelo Givhan, Yolanda Cannon, Melvin McGuire and Khary Tremble all brought numerous fake patients to Chang’s office and ultimately took control of the controlled substances prescribed by Chang sale for illegal distribution in Michigan and elsewhere.   

In addition to the drug diversion charges, Chang faces three counts of health care fraud for billing Medicare for services not provided.   The indictment further seeks to forfeit all proceeds of Chang’s illegal activity, including $603,136 in cash seized from his home.

United States Attorney Schneider stated, “Our office has no tolerance for corrupt doctors who are making Michigan’s opioid crisis even worse by unnecessarily prescribing drugs.  We will vigorously prosecute those who spread these poisons on our streets.”

"The routine manner in which Dr. Chang illegally made medically unnecessary prescription drugs available to co-conspirators who enabled drug abusers to further their addictions will not be tolerated", said David P. Gelios, Special Agent in Charge, FBI, Detroit Division.  "The FBI and our federal partners remain committed to identifying and incarcerating those responsible for sophisticated drug diversion schemes in Michigan".

“Physicians who engage in the prescribing of prescription medications that put their profits before the safety of their patients and the community at large will be held accountable” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The OIG has made the opioid crisis one of its’ top priorities and will continue to work with our law enforcement partners to help protect Medicare beneficiaries and the public as a whole from prescription drug abuse.”

The Eastern District of Michigan is one of the twelve districts included in the Opioid Fraud Abuse and Detection Unit, a Department of Justice initiative created by Attorney General Sessions, that uses data to target and prosecute individuals that are contributing to the nation’s opioid crisis.  Dr. Chang’s suspicious patterns of prescriptions were detectable from data analysis by the Opioid Fraud Abuse and Detection Unit.

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 was investigated by Special Agents of the FBI and HHS.  The case is being prosecuted by Assistant U.S. Attorneys John Engstrom and Brant Cook.

An ex-employee of the Shinola company pleaded guilty today to devising and executing a scheme to defraud her former employer, announced United States Attorney Matthew Schneider.

According to court records, Judith D. Walker, 41, of Detroit, worked as a quality inspector at Shinola, a Detroit company that produces and sells consumer goods, such as watches, bags, and bicycles.  Walker was responsible for determining whether returned watches could be immediately sent out for sale or whether the watches first needed to be repaired or restrapped.  For over a year, Walker led a scheme to steal and fraudulently sell returned watches.

Walker has admitted to stealing at least 500 watches from her former employer.

As part of her plea agreement, Walker has agreed to be held accountable for $358,413 in restitution.  The plea agreement also provides for an anticipated sentencing guideline range of 21-27 months’ imprisonment.

Walker entered her guilty plea before U.S. District Judge John Corbett O’Meara in Ann Arbor.  Sentencing has been set for May 9, 2018.   

The case is being investigated by the Federal Bureau of Investigation and the Detroit Police Department, and is being prosecuted by Assistant United States Attorney Andrew J. Yahkind.