Eastern District of Michigan

Criminal charges were filed today against 12 current or former Detroit Public Schools principals, an assistant superintendent and a vendor in an illegal bribery and kickback scheme, announced U.S. Attorney Barbara L. McQuade.                       

Joining McQuade in the announcement were David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation.

At the center of the scheme was Norman Shy, 74, of Franklin, owner of Allstate Sales, a DPS vendor of school supplies.  The charges allege that each of the school officials conspired with Shy to knowingly certify and submit fraudulent invoices to DPS, causing DPS to pay Shy for goods that were never delivered.  Invoiced supplies included auditorium chairs, supplemental teaching materials and raised line paper.  In exchange, Shy paid bribes and kickbacks, using a portion of the payments he received from DPS from the fraudulent invoices. The scheme began in 2002 and continued until January 2015. 

DPS principals had the primary authority for selecting vendors from a list approved by DPS and for certifying that invoiced goods were received.  The principals accepted bribes and kickbacks in various forms, including prepaid gift cards, cash and checks payable directly to them or to third parties or companies for their benefit. The total amount of bribes and kickbacks that Shy paid to the 13 school officials was approximately $908,518. In exchange, Shy and his company received approximately $2.7 million dollars from DPS based on payments for fraudulent invoices.

The 13 charging documents, known as criminal informations, charge each defendant with one count of Conspiracy to Commit Federal Program Bribery as follows:

1. Norman Shy (vendor), 74, of Franklin, and Clara Flowers, 61, of Detroit ($324,785); Flowers is the former principal of Henderson Academy and current Assistant Superintendent of DPS’ Office of Specialized Student Services. Additionally, Shy and Flowers were each charged with one count of Tax Evasion for failing to report income.

2. Beverly Campbell, 66, of Southfield ($50,000), former principal of Rosa Parks School and Greenfield Union Elementary-Middle School;

3. Clara Smith, 67, of Southfield ($194,000), current principal of Thirkell Elementary-Middle School;

4. Germla Johnson, 56, of Detroit ($22,884), former principal of Charles R. Drew Academy and current principal of Earhart Elementary-Middle School;

5. James Hearn, 50, of West Bloomfield ($11,500), current principal of Marcus Garvey Academy;

6. Josette Buendia, 50, of Garden City ($45,775), current principal of Bennett Elementary School;

7. Nina Graves-Hicks, 52, of Detroit ($27,385), former principal of Davis Aerospace Technical High School;

8. Ronald Alexander, 60, of Detroit ($23,000), current principal of Charles L. Spain Elementary-Middle School;

9. Ronnie Sims, 55, of Albion ($58,519), former principal of Fleming Elementary and Brenda Scott Middle School;

10. Stanley Johnson, 62, of Southfield ($84,170), current principal of Hutchinson Elementary;

11. Tanya Bowman, 48, of Novi ($12,500), former principal of Osborn Collegiate Academy of Mathematics, Science and Technology;

12. Tia’von Moore-Patton, 46, of Farmington Hills ($4,000), current principal of Jerry L. White Center High School;

13. Willye Pearsall, 65, of Warren ($50,000), former principal of Thurgood Marshall Elementary School.

“It is a heavy blow to public confidence when so many school principals are charged with bribery,” McQuade said.  “Public officials should take note that while it may seem easy to take bribes when they are offered, officials who betray their public trust will eventually get caught and will face the consequences.”   

"As a former educator, this case strikes to my very core," said David P. Gelios, Special Agent in Charge, FBI Detroit Division.  "To enrich oneself at the expense of school children is bad enough, but to misapply public funds intended to educate kids in a district where overall needs are so deep, funding sources are so strained, and the need for better education is so crucial, is reprehensible and an insult to those educators working every day to make a better future for our children."

"IRS-CI Special Agent in Charge Koopman stated, “Principals are in positions of public trust and have an obligation to act in the best interest of their schools and the children for which they represent.   Those principals, who line their own pockets through fraudulent means, violate this trust by making the conscious decision to deprive teachers of the very resources necessary to provide quality education. It is extremely disappointing when greed and selfishness deteriorate the communities and future possibilities of our youth.”

Each of the 14 defendants face up to five years in prison and fines of up to $250,000 on the charge of Conspiracy to Commit Federal Program Bribery. In addition, Shy and Flowers each face up to five years in prison and fines up to $100,000, together with the costs of prosecution on the Tax Evasion charge.

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 Carlson.

The FBI Detroit Area Corruption Task Force (DACTF) is led by the FBI Detroit Field Office, and consists of Special Agents and law enforcement officers with the FBI Detroit; the Detroit Police Department; the Michigan State Police; the Michigan Attorney General’s Office; the Internal Revenue Service – Criminal Investigation Division; the U.S. Department of Housing and Urban Development–Office of Inspector General; the U.S. Environmental Protection Agency–Office of Inspector General; the U.S. Department of Transportation–Office of Inspector General; the U.S. Department of Homeland Security–Office of Inspector General; the U.S. Department of Education–Office of Inspector General; and the U.S. Department of Labor–Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.

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

The last of five defendants pleaded guilty for his role in a $33 million Medicare fraud scheme involving Detroit-area home health care and hospice companies.  The other four defendants have all pleaded guilty since March 15, 2016.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade 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 (HHS-OIG) Chicago Region made the announcement.

Muhammad Tariq, 60, of West Bloomfield, Michigan, an owner of home health care and hospice companies in the Detroit area, pleaded guilty yesterday before U.S. District Judge Sean F. Cox of the Eastern District of Michigan to one count of conspiracy to commit health care fraud and wire fraud.  On March 15 and March 18, 2016, respectively, Shahid Tahir, 45, and Manawar Javed, 40, both of Bloomfield, Michigan, two other owners of the home health care and hospice companies, each pleaded guilty before Judge Cox to one count of conspiracy to commit health care fraud and wire fraud.  On March 18 and March 22, 2016, respectively, Waseem Alam 60, of Troy, Michigan, and Hatem Ataya, 47, of Flushing, Michigan, two physicians involved in the fraud scheme, pleaded guilty before Judge Cox to one count of conspiracy to commit health care fraud and wire fraud.  Alam additionally pleaded guilty to an additional count of structuring.  The defendants are scheduled to be sentenced in July 2016.  All five defendants were charged in an indictment returned on June 11, 2015. 

According to admissions made as part of their guilty pleas, Tahir, Javed and Tariq paid kickbacks, bribes and other inducements to Alam, Ataya and other physicians, as well as to marketers and patient recruiters, for beneficiary referrals to companies they owned, including A Plus Hospice and Palliative Care, At Home Hospice and At Home Network Inc.  Tahir, Javed and Tariq admitted that they would then bill Medicare for home care and hospice services that were often medically unnecessary and not provided.  

Alam was the top referring physician to the entities owned by the defendants and as such, was responsible for millions in Medicare reimbursements, he admitted.  As part of his guilty plea, Alam admitted that he received kickbacks and other inducements from the owners of At Home Network in exchange for home health referrals.  Alam bribed his patients into accepting services from At Home Network by providing them with medically unnecessary controlled substance prescriptions both personally and through unlicensed individuals, he admitted.  Co-owner Tariq admitted that he knew about Alam’s controlled substances bribes to patients.  Alam also instructed others to falsify patient files to hide the fact that the prescriptions were medically unnecessary, according to his plea agreement.      

Ataya was the second-highest referring physician to At Home Network and the top referring physician to At Home Hospice.  As part of his guilty plea, he admitted that he accepted kickbacks and other inducements in exchange for home health and hospice referrals.  Ataya also admitted that the Tahir-associated companies would submit false billing based on his referrals for purported home health and hospice services, when, at times, these services were neither medically necessary nor provided.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan.  Trial Attorneys Shubhra Shivpuri, Malisa Dubal and Tom Tynan of the Criminal Division’s Fraud Section prosecuted the case.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

 To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.            

A 25-year-old Flint man was arraigned on March 18 on a two-count indictment charging him with making false declarations before a court, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by ATF Special Agent in Charge S. Robin Shoemaker. 

The indictment alleges that Dion A. Polk, II, testified falsely in the federal trial of Rashad J. Jones on January 20 in Flint.  Jones, a five-time felon, was on trial before U.S. District Judge Terrence G. Berg on charges of being a felon in possession of ammunition.  Polk falsely testified at the trial that he, not Jones, possessed the ammunition magazine recovered by the police on June 29, 2015.  Polk further falsely testified that the ammunition magazine pertained to a firearm that he owned and possessed on that same day. 

Additional evidence at trial, however, revealed that the firearm was owned by another individual at the time of the charged offense, and that Polk had purchased the firearm only recently, just weeks before the start of Jones’ trial. 

“Lying under oath is a serious offense because the justice system depends on truthful testimony,” McQuade said.  “Witnesses who commit perjury and obstruct justice will be prosecuted and held accountable for their crimes.” 

“ATF along with our state and local partners will aggressively investigate violent crimes to include those that falsify information to bring those accountable for violating the laws to justice,” said ATF Special Agent in Charge S. Robin Shoemaker.        

An indictment is only a charge and is not evidence of guilt.  A defendant is presumed not guilty unless convicted at trial by a jury.

If convicted, Polk faces a maximum statutory penalty of five years in federal prison for each count.

The case is being prosecuted by the Flint Branch of the United States Attorney’s Office with the assistance of special agents from the ATF.                   

A Detroit-area doctor who prescribed medically unnecessary controlled substances and billed for office visits and diagnostic testing that never took place was sentenced to 45 months in prison today for his role in a $5.7 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Region and Special Agent in Charge Jarod J. Koopman of Internal Revenue Service-Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.

Laran Lerner, 59, of Northville, Michigan, was sentenced today by U.S. District Judge Victoria A. Roberts of the Eastern District of Michigan, who also ordered Lerner to pay $2,789,409 in restitution.  Lerner pleaded guilty on Aug. 31, 2015, to one count of health care fraud and one count of structuring cash transactions to avoid bank reporting requirements.  

According to admissions made as part of his plea agreement, Lerner lured patients into his clinic with prescriptions for medically unnecessary controlled substances and then caused Medicare to be billed for a variety of unnecessary prescriptions, diagnostic tests and office visits to make it appear as though he was providing legitimate medical services.  Lerner admitted that in reality, the controlled medications were simply used to facilitate and conceal his scheme to steal millions of dollars from the Medicare program.  According to Lerner’s plea agreement, Medicare was billed $5,748,237 as a result of Lerner’s unnecessary prescriptions, office visits and diagnostic testing.

Lerner also admitted that he structured cash deposits he received as a result of his scheme in $5,000 increments on consecutive days at various branch locations in the Detroit area in order to avoid the requirement that domestic banks file a currency transaction report with the Secretary of the Treasury for all currency transactions over $10,000.  According to his plea agreement, for example, in April 2013, Lerner deposited $70,000 in cash by making deposits of $5,000 on 14 different days. 

As part of the plea agreement, Lerner agreed to permanently surrender his Drug Enforcement Administration controlled substance registration and agreed to not to re-apply for this license in the future, and agreed that were he granted any application from any agency to prescribe or dispense controlled substances, it would be against the public interest.  

The FBI, HHS-OIG and IRS-CI investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan.  Fraud Section Trial Attorney Elizabeth Young is prosecuting the case.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.            

A superseding indictment was unsealed today charging three doctors and seven other individuals with conspiracy to illegally distribute prescription drugs, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Acting Special Agent in Charge David A. Grant, U.S. Drug Enforcement Administration (DEA), Detroit Field Division and Jared Koopman, Special Agent in Charge, Internal Revenue Service, Criminal Investigation.

Charged in the superseding indictment are:

Dr. Boris Zigmond, D.C., 50, of West Bloomfield

Dr. Jennifer Franklin, M.D., 39, of Harrison Township

Dr. Carlos Godoy, M.D., 78, of Farmington Hills

Rodney Knight, 32, of Highland Park

Tara Marcia Jackson, 53, of Detroit

Sashanti Morris, 44, of Detroit

Anna Fradlis, 61, of West Bloomfield

Maryna Pitsenko, 46, of Sterling Heights

Svetlana Sribna, 64, of Sterling Heights

Marina Jacobs, 44, of West Bloomfield

The superseding indictment alleges that from January 2013 through May 2015, Zigmond was the leader of a large-scale prescription drug trafficking organization whose purpose was to secure written prescriptions from medical doctors for controlled substances, primarily Roxicodone, and its generic equivalent Oxycodone, that could be filled at various pharmacies. According to the superseding indictment, Zigmond’s organization distributed approximately 1 million pills and grossed approximately $5.7 million from trafficking these pills on the illegal street market. The prescriptions for these highly addictive drugs were written outside the course of usual medical practice and for no legitimate purpose. 

The superseding indictment further alleges that Zigmond, a chiropractor, did not see patients himself or write prescriptions but rather used co-defendants Rodney Knight, Tara Jackson and Sashanti Morris as “marketers” or “patient recruiters” who would pay money directly to Zigmond or Zigmond’s assistants, co-defendants Anna Fradlis, Maryna Pitsenko, Svetlana Sribna and Marina Jacobs who would then schedule appointments with co-defendants Dr. Franklin and Dr. Godoy. Each appointment cost $500-$600 cash and the “marketer” paid the money before a phony patient was seen by either Franklin or Godoy. 

“Diversion of prescription pills to the street market promotes the addiction to painkillers that leads to overdose deaths,” McQuade said. “We are focusing on charging doctors, pharmacists and the networks that are putting this poison on the streets.”

DEA Acting Special Agent in Charge David A. Grant stated, “The arrests today are just one example of DEA's determination and commitment to combat the troubling prescription drug abuse problem in this country. The doctors involved in this investigation abused their positions of trust and jeopardized the lives of many individuals by participating in the conspiracy to distribute nearly a million dosage units of controlled substances onto the streets of southeast Michigan and beyond.  These indictments should make it clear that the DEA and our law enforcement partners are focused on investigating and pursuing those that are illegally diverting prescription drugs into our communities.”

“Physicians who prescribe drugs to those without a medical purpose but rather for the known purpose of selling them on the street is extremely harmful to our communities,” said Special Agent in Charge Jarod Koopman, IRS- CI.  “Where the law allows, we will continue to follow the money and seize the proceeds from those that profit at the expense of our neighborhoods.”

According to the superseding indictment, Zigmond set up office suites in several different locations in Oak Park, where co-defendants Franklin and Godoy would see fake patients and write the prescriptions.  Franklin, Godoy, Fradlis, Pitsenko, Sribna and Jacobs were paid by Zigmond.

​In addition to the drug conspiracy charge, Zigmond was also charged with money laundering and Knight was also charged with being a felon in possession of a firearm. The United States will pursue forfeiture of all proceeds and property traceable to the offenses charged.  

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 DEA and IRS.  The case is being prosecuted by Assistant U.S. Attorneys Wayne Pratt and Jonathan Grey.

The work of the Detroit One partnership of local, state and federal law enforcement resulted in the indictment today of 12 more members of Seven Mile Bloods street gang, United States Attorney Barbara L. McQuade announced.

Joining McQuade in the announcement were Acting Special Agent in Charge David A. Grant, Drug Enforcement Administration, Detroit Division, Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, and Chief James Craig, Detroit Police Department.

The superseding indictment unsealed today adds charges for racketeering, murder in aid of racketeering, firearms violations and related offenses. The previous indictment had charged three other individuals.

According to the superseding indictment, the gang operates on the east side of Detroit, between Gratiot Avenue and Kelly Road and between Seven and Eight Mile Roads. Seven Mile Bloods or “SMB” members have claimed this area as their territory and refer to it as the “Red Zone.” The area is in zip code 48205, which SMB members refer to as “4-8-2-0-Die” in some of their rap lyrics.

The indictment alleges an ongoing gang war between the Seven Mile Bloods and an alliance of other gangs operating on Detroit’s east side stemming from a murder that occurred in July 2014. During the past 18 months, these rival gangs have been violently attacking one another and have posted respective “hit lists” on social media. This shooting war has led to increased homicides and non-fatal shootings on Detroit’s east side.

The indictment also stems from collaborative law enforcement efforts to dismantle the opioid pipeline from Detroit to other states, alleging incidents in which SMB members were arrested in Charleston, West Virginia, in connection with drug trafficking.

Under the Detroit One Initiative, investigators were able to bring together separate probes into various members of this organization and its criminal activities into one encompassing investigation. Partners include the Detroit Police Department Gang Intelligence Unit, the FBI Violent Gang Task Force, which consists of representatives of Detroit Police Department, U.S. Border Patrol, Homeland Security Investigations, Customs and Border Patrol, Michigan Department of Corrections and Michigan State Police, with the cooperation of the ATF and DEA.

Charged today are:

• Billy Arnold, a/k/a “B-Man,” “Berinzo,” “Killa,” 29, of Detroit, with RICO conspiracy and multiple counts of murder in aid of racketeering; attempted murder in aid of racketeering; assault with a dangerous weapon in aid of racketeering; use of a firearm during, and in relation to, a crime of violence resulting in death; possession of a firearm during, and in relation to, a crime of violence; and felon in possession of a firearm;

• Steven Arthur, Jr., a/k/a “Steve-O,” 26, of Detroit, with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence; and felon in possession of a firearm; • Eugene Fisher, a/k/a “Fist,” 35, of Detroit, with RICO conspiracy; attempted murder in aid of racketeering; assault with a dangerous weapon in aid of racketeering; use of a firearm during, and in relation to, a crime of violence; possession of a firearm during, and in relation to, a crime of violence; and felon in possession of a firearm;

• Corey Bailey, a/k/a “Sonny,” “Cocaine Sonny,” 28, of Detroit, with RICO conspiracy; murder in aid of racketeering; attempted murder in aid of racketeering; assault with a dangerous weapon in aid of racketeering; use of a firearm during, and in relation to, a crime of violence; and possession of a firearm during, and in relation to, a crime of violence;

• Quincy Graham, a/k/a “Dub,” “Q,” 32, of Detroit, with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence; and felon in possession of a firearm;

• Robert Brown II, a/k/a “R.O.,” 33, of Warren, Michigan, with RICO conspiracy and possession of a firearm during, and in relation to, a crime of violence;

• Jerome Gooch, a/k/a “Rome,” “Dada,” 30, of Detroit, Michigan and Charleston with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence;

• Michael Rogers, a/k/a “Smoke,” “Ace,” 33, of Eastpointe, with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence;

• Derrick Kennedy, a/k/a “Dip,” 29, of Warren, with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence;

• Devon Patterson, a/k/a “Duck,” “Sosa,” 30, of Detroit, with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence;

• Christopher Owens, a/k/a “Baby O,” “Cee,” 29, of Charleston, West Virginia, with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence;

• Jeffery Adams, a/k/a “Brick,” “Product,” 26, of Detroit, with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence;

• Arlandis Shy, a/k/a “Grymee,” “VIL,” 26, of Clinton Township with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence;

• Anthony Lovejoy, a/k/a “PT,” 33, of Charleston, West Virginia and Buckeye, Arizona, with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence; and

• Diondre Fitzpatrick, a/k/a “D-Nice,” 26, of Harper Woods, with RICO conspiracy; possession of a firearm during, and in relation to, a crime of violence.

“When law enforcement became aware of the violent gang activity in this neighborhood, the Detroit One partnership poured resources into dismantling the gangs that are responsible,” McQuade said. “We are using our combined resources to restore peace to this neighborhood for its residents.”

DEA Acting Special Agent in Charge David A. Grant stated, “DEA will continue to work hand in hand with the United States Attorney’s Office and the members of Detroit One in the continuing effort to reduce the violence associated with drug trafficking in all areas of Detroit. Today’s indictment demonstrates solid success in the effort to dismantle the Seven Mile Bloods, and to curtail some of the inevitable violence stemming from their trafficking in drugs on Detroit’s east side.”

"The Detroit One initiative continues to be a valuable partnership for the FBI, and for the city of Detroit," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "The dismantling of violent gangs in this city must remain a priority, and we remain fully committed to that end. These gang arrest operations are absolutely necessary in order to make Detroit a more livable, workable, and secure city."

Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working collaboratively, local, state, and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit. This indictment is the latest in a string of indictments from the United States Attorney’s Office and Wayne County Prosecutor’s Office over the last two years involving violent street gangs in the city of Detroit. Most significantly, Detroit has seen a reduction in homicides every year since the Detroit One collaboration began in 2013

The owner of a Novi, Michigan, restaurant was taken into custody after a criminal complaint was filed in federal court charging him with harboring undocumented immigrants, announced United States Attorney Barbara L. McQuade.

McQuade was joined in the announcement by Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and Chief David Molloy, Novi Police Department.

Roger Tam, 55, and his wife, Ada Lei, 48, of Novi were charged in the complaint.

The arrest is the latest development in an ongoing probe by the Novi Police Department and HSI with assistance from ICE’s Enforcement and Removal Operations (ERO), U.S. Customs and Border Protection’s Border Patrol and the Oakland County Sherriff’s Office.

An investigation was launched after HSI special agents and officers with the Novi Police executed federal and state search warrants at the Novi residence, where five Mexican nationals died as a result of a Jan. 31 fire. Department of Homeland Security databases revealed that all five men were illegally present in the United States and had entered in the last six months. 

The criminal complaint alleges that Tam hired five Mexican nationals to work at Kim’s Garden in Novi. The Mexican nationals were provided housing in the Novi home owned by Tam and Lei, and were transported to and from the restaurant, as a condition of their employment. The criminal complaint further alleges Tam told a Novi detective at the scene of the fire that the deceased individuals were employees at Kim’s Garden whom he paid in cash and allowed to reside in the home’s basement, where smoke detectors had been disabled.

“I am proud of the efforts and professionalism of our investigative team who worked selflessly with our federal partners in bringing this case to fruition,” said David Molloy, City of Novi’s public safety director and chief of police. “What warranted this investigation was senseless on so many counts; from the tragic loss of five lives to the skirting of our nation’s immigration system. In all my years of law enforcement, I have never witnessed such blatant disregard for respect of human life. As the health, safety and welfare of Novi residents and businesses is our main concern, activities such as this will not be tolerated and will be prosecuted to the full extent the law.”

"My immediate sense is that this extremely tragic loss of life could have been avoided," said Marlon Miller, special agent in charge of HSI Detroit. "HSI is committed to aggressively investigating those who harbor undocumented immigrants and place personal profit ahead of public safety. HSI simply will not turn a blind eye to employers who shirk their responsibility to maintain a legal workforce."

“This case is a sobering reminder of the dangers employers create when they harbor undocumented immigrants,” McQuade said. “In order to obtain a competitive advantage by paying lower wages and evading taxes, some employers will subject undocumented workers to poor living conditions and even dangerous situations.”

According to the complaint, employment and financial records for Kim’s Garden revealed no indication that the five individuals were legally employed at the restaurant.

A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

If found guilty, Tam and Lei face up to 10 years in prison and a $250,000 fine.

Kenyetta Wilbourn Snapp, 40, a former Educational Achievement Authority (“EAA”) principal of Denby High School and later of Mumford High School, pleaded guilty today to conspiracy to commit federal program bribery and federal income tax evasion charges, United States Attorney Barbara L. McQuade announced. Glynis Thornton, 53, an after-school tutoring vendor, pleaded guilty to conspiracy to commit federal program bribery.

Joining McQuade in the announcement were David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation.

Snapp admitted to selecting Thornton’s company, Making a Difference Everyday (“M.A.D.E.”), as the after-school tutoring vendor for Denby High School and then Mumford High School. In exchange, Thornton paid Snapp monetary kickbacks totaling approximately $58,000, as a reward for Snapp selecting and retaining M.A.D.E. as the after-school tutoring vendor. Thornton admitted that she disguised payments to Snapp by causing checks to be issued payable to a M.A.D.E. employee’s company, rather than paying Snapp directly. The M.A.D.E. employee would then deposit and withdraw the money and give it to Snapp. Snapp also admitted to failing to report the kickback payments as income during taxable year 2012.

Snapp entered into a plea agreement that calls for a sentence of between 37-46 months in custody. Thornton entered into a plea agreement that calls for a sentence of between 24-30 months in custody.

"Public corruption crimes are always disappointing, but it is even more heartbreaking when a school principal takes bribes," McQuade said. "Squandering school funds in exchange for bribes is especially disturbing in this case because Detroit's school children already face so many financial challenges." McQuade said.

"Ms. Snapp and Ms. Thornton's efforts to divert funds from the struggling Detroit Public School District and students trying to better themselves is particularly disturbing," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "These convictions represent the commitment of the FBI and our partners to expose and shut down schemes that would rob our communities of the education and services that they count on and deserve."

IRS-CI Special Agent in Charge Koopman stated, "When public officials commit crimes, whether as part of their official duties or in their private lives, they are violating the trust of the people they serve. IRS-CI will continue to hold them accountable for their actions".

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 Carlson.

Six members of the Vice Lords gang in Detroit pleaded guilty this week to various racketeering and firearms offenses based on their roles in the gang-related shooting of four individuals. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Detroit Mayor Mike Duggan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Chief James Craig of the Detroit Police Department made the announcement. 

Antonio Clark, aka Cheeto, 26; Aramis Wilson, aka Ace, 25; Tyrone Price, aka Price, 27; Jonathan Kinchen, aka Deago, 22; Kojuan Lee, aka Juan, 20; Kirshean Nelson, 19; Dion Robinson, 37; and Kenneth Smith, 34, all of Detroit, were indicted for racketeering and firearms charges relating to the gang-related shooting of four members of a family on May 7, 2015.

On Jan. 25, 2016, Wilson pleaded guilty to two counts of assault with a dangerous weapon in aid of racketeering and one count of using and carrying of a firearm during and in relation to a crime of violence.  On Jan. 26, 2016, Nelson pleaded guilty to one count of RICO conspiracy.  On Jan. 27, 2016, Clark pleaded guilty to two counts of attempted murder in aid of racketeering and one count of using and carrying of a firearm during and in relation to a crime of violence.  On Jan. 28, 2016, Lee and Kinchen each pleaded guilty to one count of RICO conspiracy; Price pleaded guilty to two counts of assault with a dangerous weapon in aid of racketeering and one count of using and carrying of a firearm during and in relation to a crime of violence.

According to the plea agreements, the Vice Lords is a national gang engaged in a variety of crimes, including murder, robbery, narcotics trafficking and witness intimidation.  The defendants admitted that the Vice Lords’ leaders are located in Chicago and Detroit and that the gang is broken down into various “sets,” “decks” or “branches.”  Members who seek to leave the gang oftentimes endure a physical beating by multiple Vice Lord members or are targeted for killing.  The racketeering activity included, from 2011 through 2015, trafficking in controlled substances, including marijuana, Xanax and ecstasy, at locations in and around the Detroit metropolitan area, including at Northland Mall in Southfield, Michigan.

As admitted in the plea agreements, members of the Traveling Vice Lords set, acting at the direction of Smith and others, searched for two brothers who had left, or attempted to leave, the Vice Lords as part of a plan to harm those individuals.  The defendants further admitted that on May 7, 2015, they and others met at Smith’s house to discuss their plan and collect firearms, including an AK-47 assault rifle, then traveled in multiple cars to the intended victims’ house.  After a brief confrontation with the brothers’ family members, Clark opened fire with an AK-47, firing at the family more than two dozen times and hitting four victims. 

The charges related to the shooting are a component of the federal government’s prosecution of the Vice Lords street gang, which has led to the arrests and convictions of Vice Lords leaders and members over several years.  In two trials during March and May 2015, juries convicted eight leaders and members of the Phantom Outlaw Motorcycle Club, many of whom were also leaders and members of the Vice Lords, for various crimes, including a mass murder plot against a rival organization of the Phantoms and the shooting of a member of another rival organization.  Among those eight convicted defendants was Antonio Johnson, aka MT and Mister Tony, the national president of the Phantoms and the “three-star general” of the Vice Lords in Michigan, who was sentenced to 35 years in prison on Sept. 8, 2015.

On Jan. 13, 2015, Christopher Tibbs, aka Chief Fatah, the leader of the Michigan branch of the Mafia Insane Vice Lords, was sentenced to 346 months in prison for his role in helping plan an armed robbery.  This case marked the first time that the federal criminal street gang enhancement was charged in the Eastern District of Michigan.

Kenneth Smith is currently a fugitive and anyone with any information about his whereabouts is encouraged to call the U.S. Marshals tip line at (313) 234-5656 and the ATF’s tip line at (313) 202-3400.  The charges and allegations contained in the indictment are merely accusations.  The defendants are presumed innocent until and unless proven guilty. 

The ATF’s Comprehensive Violence Reduction Program, which includes representatives of the Detroit Police, Michigan State Police and Michigan Department of Corrections, is investigating the case in coordination with the FBI and DEA.  Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Mark Bilkovic of the Eastern District of Michigan are prosecuting the case.

Two individuals were sentenced on aggravated identity theft and related charges, United States Attorney Barbara L. McQuade announced.

McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge, Internal Revenue Service – Criminal Investigation; Jeffrey Frost, Special Agent in Charge of the U.S. Secret Service, Detroit Field Office; and Chief Michael Patton, West Bloomfield Police Department.

Markitta Washington 29, of Hampton, Georgia, and previously of Farmington Hills, Michigan, and Martez Lear, 29 of Farmington Hills, were sentenced by U.S. District Court Judge Matthew F. Leitman. Washington was ordered to serve 47 months in prison and ordered to pay restitution to the IRS in the amount of $489,883. Lear was order ordered to serve 56 months in prison and ordered to pay restitution to the IRS in the amount of $489,883.

According to court records, Washington, worked for Henry Ford West Bloomfield Hospital and DMC Harper Hospital, removed patient records that included Personal Identifying Information (PII); such as names, dates of birth and social security numbers and used the PII to file fraudulent tax returns in other’s names. A search warrant was executed at the shared residence of Washington and Lear located in Farmington Hills. The information recovered at the residence included patient identification documents and handwritten notes that included PII for approximately 1,400 individuals. The tax refunds were directed to accounts under the control of Washington and Lear.

“Identity theft is a contemptible modern-day menace,” said Jarod Koopman, Special Agent in Charge of IRS-Criminal Investigation. “Law enforcement officers respond to it with every legal resource available. These sentences will serve as a stern warning to those who are considering similar conduct.”

This case was investigated by the Southeast Michigan Financial and Cyber Crimes Task Force, which is based at the Novi Police Department and includes U.S. Secret Service, Homeland Security Investigations, the U.S. Postal Inspection Service and IRS – Criminal Investigation agents, as well as state and local law enforcement officers from the West Bloomfield, Novi, Royal Oak, Southfield, and Troy Police Departments.

The case is being prosecuted by Assistant U.S. Attorney Abed Hammoud with the United States Attorney’s Office for the Eastern District of Michigan in Detroit.

Hospitals have notified individual victims whose personal identifying information was compromised. Patients of the Henry Ford West Bloomfield Hospital may call (313) 874-9561 with any questions. Patients of DMC Harper Hospital may call (313) 966-8818.

UPDATED: On March 3, 2021 the government moved, and the court ordered, that the indictment against Joshua Ragland be dismissed as a result of Mr. Ragland entering into the pre-trial diversion program.

A Detroit man was indicted on December 15, 2015, on charges of manufacturing and possessing destructive devices, which he strategically placed in his yard to protect his marijuana plants, United States Attorney Barbara L. McQuade announced today. Joining McQuade in the announcement was Special Agent in Charge Robin Shoemaker, Bureau of Alcohol, Tobacco, Firearms and Explosives. Joshua Ragland, 25, was indicted following a search that was conducted at his home in southwest Detroit. In September, law enforcement was called to investigate an explosion with injuries at the premises. The victim, a 29-year-old male, was walking across a vacant lot next to Ragland’s residence when he heard several explosions and felt pain in his foot. The victim was hospitalized, and released following treatment for his injuries. Upon searching the location, officers recovered five manufactured destructive devices, marijuana and marijuana plants and other materials, including a black gun powder substitute, which were used in the manufacture of the explosive bombs. Several firearms and ammunition were also recovered from the premises. The four-count indictment charges Ragland with Manufacture of Destructive Devices, Possession of Destructive Devices; Possession of Destructive Devices by Prohibited Person and Possession of Explosive Materials by Prohibited Person. An indictment is only a charge, and a defendant is presumed not guilty unless he is convicted at trial by a jury. If convicted on the charges in the indictment, Ragland faces penalties of up to 10 years’ imprisonment, a $250,000 fine, or both, as well as a 7-40 year term of imprisonment for manufacturing destructive devices causing physical injury to another. The case is being prosecuted by Assistant United States Attorney Susan Gillooly with the assistance of ATF, Detroit Field Division, the Detroit Police Department and Detroit Police Bomb Squad, the Michigan State Police Bomb Squad and the Dearborn Police Bomb Squad.

The owner and operator of a Detroit-area home health care agency who directed a $7 million health care fraud scheme was sentenced today to 80 months in prison. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade 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 (HHS-OIG) Chicago Regional Office made the announcement.

Amer Ehsan, 44, of Canton, Michigan, was sentenced by U.S. District Judge Paul D. Borman of the Eastern District of Michigan, who also ordered Ehsan to pay $4,567,967.12 in restitution. 

In connection with his guilty plea, Ehsan admitted that as he owner and operator of Advance Home Health Care Services Inc. (Advance), a home health care agency in the Detroit area, he conspired with physicians, physical therapists and patient recruiters to bill the Medicare program for unnecessary home health care and therapy services and that he paid co-conspirator physicians to refer Medicare beneficiaries to Advance and sign medical documents falsely certifying that they required home health care.  Ehsan also admitted that at his direction, Medicare beneficiaries received cash kickbacks in exchange for signing multiple blank physical therapy records. 

Additionally, Ehsan admitted that he owned and controlled Michigan Rehab and Management Services LLC, which he used to sell information about Medicare beneficiaries and corresponding fictitious patient files to other Detroit-area home health care agencies.  Medicare paid a total of more than $4.5 million as a result of Ehsan’s conduct with these two companies.

Ehsan was part of a wide-ranging scheme that involved 12 defendants, all of whom have pleaded guilty.

The FBI and HHS-OIG investigated this 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 of the Eastern District of Michigan.  Trial Attorney Elizabeth Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Katherine Wagner and Special Trial Attorney Katie R. Fink of the Eastern District of Michigan prosecuted this case. 

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion.  In addition, HHS’ Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers. 

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov. 

The former top elected official of the 18,000 member Operating Engineers Local 324, International Union of Operating Engineers, was indicted today by a federal grand jury on charges of extortion, embezzlement, money laundering and conspiracy, United States Attorney Barbara McQuade announced today.

McQuade was joined in the announcement by James Vanderberg, Special Agent in Charge of the Department of Labor, Office of Investigations, Office of Labor Racketeering and Fraud Investigations, Special Agent in Charge David Gelios, Federal Bureau of Investigation, Detroit Division, Ian Burg, District Director of the Department of Labor, Office of Labor Management Standards, Special Agent in Charge Jared Koopman, Internal Revenue Service, Criminal Investigations, and Regional Director Joe Rivers of the Employee Benefits Security Administration.

Indicted was John Hamilton, 61, of Rivera Beach, Florida.

The nine-count Indictment alleges that Hamilton used his position as Business Manager of Local 324 to personally enrich himself through a series of illegal schemes. Local 324 represents heavy equipment and crane operators throughout Michigan, and Hamilton served as the union’s top elected official from 2003 through 2012. Hamilton is charged with extorting business agents and other employees of Local 324 to each pay $5,000 of 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 extorted 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 took for himself $71,000 from the slate fund, as well as distributing more than $35,000 each to Steven Minella and David Hart, two other top Local 324 officials. Hamilton structured and laundered this money by distributing it in a series of seventeen checks with false dates, all for amounts under $10,000. Minella and Hart, the former President and Chief of Staff of the union, respectively, both pleaded guilty earlier this year to felonies for helping to conceal Hamilton’s extortion scheme.

In another scheme, Hamilton is charged with embezzling union funds by giving himself a $97,000 per year raise in October 2009. When a former President of Local 324 raised objections to the $97,000 raise, Hamilton terminated the President. In addition, Hamilton created fraudulent minutes of the union’s Executive Board in an effort to justify the raise.

Hamilton also is charged with embezzling Local 324 funds and Local 324 pension funds by spending more than $50,000 on special rims for his own union-issued Cadillac DTS, as well as expensive meals and liquor at restaurants for little or no union business purpose.

Finally, Hamilton is charged with an honest services fraud conspiracy, in which Hamilton accepted work worth thousands of dollars on his personal residence by a union contractor in exchange for Hamilton’s directing more than $300,000 in Local 324 business to the contractor.

Upon conviction, Hamilton would face a maximum of 20 years in prison and a fine of up to $250,000 on each of the four counts of extortion, conspiracy to commit extortion, money laundering, and conspiracy to commit honest services mail and wire fraud in the Indictment. He also faces a maximum of five years in prison and a $250,000 fine on each of five counts of conspiracy to embezzle union funds, conspiracy to embezzle pension funds, embezzlement of union funds, and attempted structuring of financial transactions.

An indictment is only a charge, and a defendant is presumed not guilty unless he is convicted at trial by a jury.

“Labor unions exist for the benefit of their members, not to line the pockets of the union leaders,” McQuade said. “Hard-working union members deserve honest representation, and leaders who exploit their positions for personal gain will be brought to justice.”

David Gelios, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division said, “The betrayal of the trust of union members and the working public cannot be tolerated at any level. Mr. Hamilton’s embezzlement of union funds was a disservice to the labor union movement and the 18,000 hard-working members of Local 324 of the Operating Engineers Union.”

"Union leaders who misuse their positions to enrich themselves at the detriment of the hard-working men and women for whom they serve will be held accountable for their actions. The fact that Mr. Hamilton concealed his activities and used the very jobs he was elected to protect as leverage to obtain money makes this case even more egregious," stated Jarod Koopman, Special Agent in Charge of the IRS- Criminal Investigation. "IRS- Criminal Investigation will continue to root out individuals who corrupt labor unions by working with its law enforcement partners."

The case was investigated by agents of the Department of Labor, Office of Inspector General Office of Labor Racketeering and Fraud Investigations, 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 34 year old Detroit man was sentenced yesterday to three years in prison for stealing tens of thousands of dollars in funds that had been collected on civil judgments, announced U.S. Attorney Barbara L. McQuade.

McQuade was joined in the announcement by Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division.

Marlon Cleveland, a former Court Officer for the 36th District Court in Detroit, Michigan was sentenced by U.S. District Judge Gershwin A. Drain.  

Cleveland pleaded guilty in June to theft from a program receiving federal funds and mail fraud.  The convictions arose from a pattern of thefts committed by Cleveland in 2013 and 2014.  During that time Cleveland victimized more than 30 different individuals and businesses by demanding that they make payments on outstanding court judgments and then keeping those funds for himself. 

U.S. Attorney McQuade stated, “Anyone who abuses a position of trust to steal from our courts or to victimize members of the public should expect to face serious penalties under the law.”

Special Agent in Charge Gelios stated, "Mr. Cleveland used his position with the court to defraud both Wayne County, and its residents, all while enriching himself.  Individuals who attempt to corrupt a system like this will not be tolerated."

Chief Judge Nancy M. Blount of the 36th District Court stated, “The Court cooperated fully with the investigation and prosecution because this behavior will not be tolerated.  We support Judge Drain’s sentence and hope that it will serve as a deterrent to this type of conduct.”

The underlying case was investigated by the Federal Bureau of Investigation in collaboration with the Michigan Attorney General's Public Integrity Unit.

An indictment was unsealed today charging a former Educational Achievement Authority (“EAA”) principal and an after-school tutoring vendor with conspiracy and bribery charges, announced United States Attorney Barbara L. McQuade.

Joining McQuade in the announcement were David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation.

The five-count indictment charges that from approximately August 2012 through November 2014, Kenyetta Wilbourn Snapp, the former principal of the EAA’s Denby High School and then Mumford High School, conspired to commit bribery and money laundering. Also charged in the indictment were Glynis Thornton, whose company, Making a Difference Everyday (“M.A.D.E.”), provided after-school tutoring services to Denby and Mumford, and Paulette Horton, who was an independent contractor working for M.A.D.E.

According to the indictment, Snapp selected Thornton’s M.A.D.E. as the after-school tutoring vendor for Denby and Mumford. In exchange, Thornton paid Snapp monetary kickbacks as a reward for Snapp selecting and retaining M.A.D.E. as the after-school tutoring vendor. Thornton disguised payments to Snapp by causing checks to be issued payable to Horton’s company, rather than paying Snapp directly. Horton would then deposit and withdraw the money and give it to Snapp.

Snapp is also charged with tax evasion for failing to report income during taxable year 2012. Horton is also charged with failing to file individual tax returns for year 2011.

“It is incredibly disheartening when school officials and vendors steal money that was intended to educate students, as these charges allege," McQuade said. "We appreciate the full cooperation of the EAA in this matter.”

FBI Special Agent in Charge Gelios stated, "Investigation demonstrated that Ms. Wilbourn-Snapp and her associates took resources allocated to her by the State of Michigan to educate our children and diverted funds for their own personal gain. There can be no tolerance for this abuse of authority. Entrusted by the community to facilitate educational excellence in Detroit’s schools, those indicted betrayed that trust. The FBI, and our partners in this investigation, will always work diligently to bring to justice public officials who selfishly misuse their positions and place their own interests above those they were hired to serve."

IRS-CI Special Agent in Charge Koopman stated, “The IRS enforces the nation’s tax laws, but also takes particular interest in cases involving the payment of kickbacks in exchange for contracts such as the scheme devised by Snapp.”

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 Carlson.

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

Edward Belczak, 70, the former priest of St. Thomas More Church in Troy, was sentenced to 27 months in prison for stealing $572,775 from his parish, U.S. Attorney Barbara L. McQuade announced.

McQuade was joined in the announcement by Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division and Chief Gary Mayer of the Troy Police Department.

During a hearing today before U.S. District Judge Arthur J. Tarnow, Belczak was sentenced to 27 months in prison and a two year term of supervised release based on his plea of guilty to mail fraud for devising and executing a scheme to steal and divert $572,775.32 from St. Thomas More Church over several years, and then creating yearly false financial reports that were mailed to the Archdiocese of Detroit that concealed his theft and diversion of the money for his own benefit.

At the time of his plea, Belczak admitted that in March 2005, he used $109,570.80 from St. Thomas More’s bank account to pay the down payment on a Wellington, Florida condominium. According to court records, in April and May 2006, Belczak diverted two checks totaling $420,200 payable to St. Thomas More from the estate of a deceased parishioner. In order to conceal his illegal conduct, Belczak opened an unauthorized business bank account in the name of “St. Thomas More c/o Edward Belczak” and deposited both checks into that account. Belczak used most of the money bequeathed to St. Thomas More for his own personal use, benefit and enrichment. From May 2008 through May 2012, a St. Thomas More parishioner donated money each year to the church, totaling $43,000, for the needs of the church. Each year, Belczak deposited the check made payable to St. Thomas More into the business bank account in the name of “St. Thomas More c/o Edward Belczak.”

In addition to the custodial sentence, the funds on deposit in Belczak’s Merrill Lynch and TD Ameritrade accounts and his Florida condominium were forfeited. Belczak also was ordered to pay restitution of $572,775.32 to St. Thomas More.

"Father Belczak's crime was not an isolated incident or a momentary lapse of judgment, but an orchestrated scheme perpetrated over time to defraud the people he claimed to serve. It is a sad day when someone in a position of trust betrays that relationship, but it is important to ensure that no one is above the law,” McQuade said. “This sentence demonstrates that individuals will be held accountable when they steal significant sums of money that are entrusted to them.”

“The actions taken by Mr. Belczak represent a shocking betrayal of the faith and trust the public places in our clergy”, said Special Agent in Charge Gelios. “Secular or otherwise, the FBI is committed to the investigation of anyone who abuses their position for personal gain.”

This case was investigated by special agents of the Federal Bureau of Investigation and the Troy Police Department and prosecuted by Assistant U.S. Attorneys Frances Lee Carlson and Adriana Dydell.

A Detroit-area physician who led and directed a multimillion-dollar Medicare fraud scheme through his medical practice was sentenced today to 72 months in prison.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade 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 (HHS-OIG) made the announcement.

Dr. Hicham A. Elhorr, 48, of Dearborn, Michigan, was sentenced by U.S. District Judge Nancy G. Edmunds of the Eastern District of Michigan.  In addition to imposing the prison term, Judge Edmunds ordered Elhorr to pay $2,073,108.16 in restitution.

According to admissions in his plea agreement, from approximately August 2008 through September 2012, Elhorr and his coconspirators fraudulently billed Medicare $4.2 million for purported in-home physician services.  Elhorr admitted that he employed unlicensed individuals through his visiting physician practice, House Calls Physicians PLLC, who held themselves out as licensed physicians and purported to provide physician home visits and other services to Medicare beneficiaries in Michigan.  The unlicensed individuals prepared medical documentation that Elhorr and other licensed physicians signed as if they had performed the visits when, in fact, no licensed physicians had treated the beneficiaries.

This case was investigated by the FBI and HHS-OIG and 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 of the Eastern District of Michigan.  The case was prosecuted by former Assistant Chief Catherine K. Dick and Trial Attorneys Matthew C. Thuesen and F. Turner Buford of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged approximately 2,300 defendants who have collectively billed the Medicare program for more than $7 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov. 

The Justice Department today filed a lawsuit against the owners and manager of three Michigan apartment complexes – Parkside East Apartments, in East Lansing, Michigan, Holt Manor Apartments in Holt, Michigan, and Kelly Manor Apartments in Owosso, Michigan – for discriminating against families with children.

The lawsuit, filed in the Eastern District of Michigan in Detroit, alleges that the defendants refused to allow children in Parkside East, which consists of 41 one-bedroom apartments, and also refused to allow children in the one bedroom apartments at Holt Manor and Kelly Manor.  At Holt Manor, 23 of the 27 apartments are one-bedroom apartments.  At Kelly Manor, 17 of the 25 apartments are one-bedroom apartments.  The suit names as defendants the Bloomfield Hills, Michigan-based corporate entities that own the complexes, Parkside East Inc., Holt Manor Inc., and Kelly Manor Inc., as well as Bloomfield Hills resident Sudi Hopper, who serves as the rental agent for the three properties.

The allegations are based on evidence collected by the Fair Housing Center of Southeastern Michigan, based in Ypsilanti, Michigan, which had testers posing as prospective residents contact the defendants’ offices and speak with Hopper about renting a one-bedroom apartment.  The testing revealed that Hopper did not allow single parent households with a minor child to live in a one-bedroom apartment, but did allow households with two adults to rent such an apartment.       

“Although housing discrimination against families with children has been illegal under the Fair Housing Act for more than 25 years, too many families still face such discrimination when they look for housing,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of these families.”

“The Fair Housing Act gives parents the right to decide what type of apartment is appropriate for their families,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan.  “It is unlawful for landlords to substitute their judgment for that of a parent, and to turn people away from a one-bedroom apartment simply because they have a child.  We hope that this complaint sends a message to landlords and renters that we are prepared to defend the rights of all families to fair treatment in housing.”

“The U.S. Department of Justice is committed to protecting the rights of Americans,” said U.S. Attorney Patrick A. Miles Jr. of the Western District of Michigan.  “We will continue to fight illegal discrimination and ensure the fair housing rights of families wherever they are challenged.”

The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendant’s actions and a civil penalty.

The complaint is an allegation of unlawful conduct.  The allegations must still be proven in federal court.

Individuals who may have information related to this lawsuit should contact the Justice Department toll-free at 1-800-896-7743, mailbox number 93, or e-mail the Justice Department at fairhousing@usdoj.gov.

Fighting illegal housing discrimination is a top priority of the Justice Department.  The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.  Individuals who believe that they have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov or contact HUD at 1-800-669-9777.  More information about the Fair Housing Act can also be found at www.usdoj.gov/crt/housing or www.hud.gov/fairhousing. 

Parkside East Complaint

The Justice Department announced today that it has filed a lawsuit against Pittsfield Charter Township, Michigan, alleging that the township violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) when it denied zoning approval to allow the Michigan Islamic Academy (MIA) to build a school on a vacant parcel of land located in the township.  The case was brought by the department’s Civil Rights Division and the U.S. Attorney’s Office of the Eastern District of Michigan.

The complaint, filed in the U.S. District Court of the Eastern District of Michigan in Detroit, alleges that Pittsfield Charter Township imposed a substantial burden on MIA’s exercise of religion when it refused to grant its request for rezoning to allow MIA to build a new school on a vacant parcel of land in the township.  MIA, currently located in Ann Arbor, Michigan, sought to build in Pittsfield Township because it requires additional space for religious and secular educational purposes.

“Religious freedom is a cornerstone of our society, and that freedom includes being able to create the institutions and physical spaces needed for worship, religious education and other aspects of religious exercise,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “The Justice Department is committed to ensuring that all religious groups enjoy the right to practice their faiths freely, and will continue to challenge local land use decisions that substantially burden religious exercise.”

“The law prohibits the government from imposing land use regulations that substantially burden religious exercise unless there is a compelling government interest and uses the least restrictive means of doing so,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan.  “This complaint alleges that Pittsfield Township denied the Michigan Islamic Academy's request to build a school in violation of that law.  We filed this lawsuit to protect the right of all Americans to practice their religion and receive the religious instruction and education of their choice.”

The complaint is an allegation of unlawful conduct.  The allegations must still be proven in federal court.

RLUIPA, enacted in 2000, contains multiple provisions prohibiting religious discrimination and protecting against unjustified burdens on religious exercise.  Persons who believe that they been subjected to religious discrimination in land use or zoning may contact the Civil Rights Division’s Housing and Civil Enforcement Section at (800) 896-7743 or the U.S. Attorney’s Office of the Eastern District of Michigan’s Civil Rights Hotline at (313) 226-9151 or usamie.civilrights@usdoj.gov.

More information about RLUIPA, including a report on the department’s enforcement, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.

Pittsfield Township Complaint

Eight members of Band Crew, a northwest Detroit street gang, were charged in an indictment unsealed today with various offenses based on their roles in gang-related attempted murders, robberies and shootings.  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 announcement was made by Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan and Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division.

According to the indictment, Band Crew was an association comprised of smaller gangs, including Constantly Making Hundreds (CMH), Young N Crispy (YNC), Pushit (or Pusha) Boy Family (PBF), and Family Over Everything Love is Forever (FOE Life).  The indictment alleges that Band Crew operated in northwest Detroit, and that members claimed this area as their territory by “tagging” buildings with gang-related graffiti, including markings such as “#22 BandCrew,” “BAND CREW,” “22 BAND CREW,” “YNCMH” and “PBF.”  The indictment fuller alleges that Band Crew members and associates worked to defend their territory, to promote and maintain the status and reputation of the gang, and to engage in or threaten violence in retaliation for perceived wrongs.      

The indictment charges eight Band Crew members with a variety of crimes including attempted murders, shootings, assaults, home invasions and robberies.  Specifically:

• Corey Deandre Mapp, 22, of Detroit, is charged with RICO conspiracy, use and carry of a firearm during and in relation to a crime of violence and assault with a dangerous weapon in aid of racketeering.

• Alexander Teontae Johnson, 20, of Detroit, is charged with RICO conspiracy.

• Leo James Johnson, 20, of Detroit, is charged with RICO conspiracy, assault with a dangerous weapon in aid of racketeering, use and carry of a firearm during and in relation to a crime of violence and possession of a stolen firearm.

• Joseph Hezekiah Ford, 19, of Detroit, is charged with RICO conspiracy.

• Travontae Javon Joseph, 19, of Detroit, is charged with RICO conspiracy, assault with a dangerous weapon in aid of racketeering, use and carry of a firearm during and in relation to a crime of violence and possession of a stolen firearm.

• Jamell Loval Smith, 19, of Detroit, is charged with RICO conspiracy.

• Mario Perkins, 18, of Detroit, is charged with RICO conspiracy, use and carry of a firearm during and in relation to a crime of violence and conspiracy to assault with a dangerous weapon in aid of racketeering.

• Akeem Arteaze Walker, 19, of Detroit, is charged with RICO conspiracy, use and carry of a firearm during and in relation to a crime of violence and assault with a dangerous weapon in aid of racketeering.

All of the defendants are in custody. 

The charges and allegations contained in the indictment are merely accusations.  The defendants are presumed innocent until and unless proven guilty.

This case is being investigated by the ATF’s CVRP Task Force (Comprehensive Violence Reduction Partnership), which consists of representatives of the ATF, Detroit Police Department, Michigan State Police and Michigan Department of Corrections.  The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Eastern District of Michigan.

Band Crew Indictment

The U.S. Attorney's Office for the Eastern District of Michigan has reached an agreement with the Detroit Public School District under the Americans with Disabilities Act (“ADA”), requiring the district to provide sign language interpreters and other aids and services to parents and guardians who are deaf or hard of hearing, U.S. Attorney Barbara L. McQuade announced today.

The settlement resolves a complaint that the school district failed to provide a sign language interpreter to the deaf parent of a student enrolled in the district’s family- centered Early Childhood Intervention program. The complainant alleged that the district denied her effective communication by refusing to provide her with a sign language interpreter at the program’s home and center-based teaching sessions so that she could actively participate in the education of her child.

The ADA requires that public entities, such as public schools, provide effective communication to all individuals with disabilities who seek to participate in or benefit from a school district’s services, programs or activities—not just students. This can include parent participation in parent-teacher conferences, student registration, meetings, ceremonies, open houses, and field trips.

Under the settlement, the Detroit Public School District agreed to modify its policies and train its staff to ensure that parents and guardians who are deaf are able to effectively communicate with school personnel, provide appropriate auxiliary aids and services at no cost, and designate an ADA coordinator for the district. The district also agreed to pay compensatory damages to the complainant.

“All parents want to make sure that their children are getting the best education possible, and parents with disabilities are no different,” McQuade said. “Effective communication between parents and schools is critical to a student’s success, and the law provides parents with disabilities the opportunity to fully participate in their children’s education at our public schools.” McQuade said. “We hope that this case will improve awareness of the responsibility all school districts have to effectively communicate with parents with disabilities.”

Those interested in finding out more about this settlement or the obligations of public entities under the ADA may call the U.S. Attorney’s Office Civil Rights Hotline at 313-226-9151, or send an email to www.usamie.civilrights@usdoj.gov.

Information is also available at the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or at www.ada.gov.

The National President of the Phantom Outlaw Motorcycle Club and “Three-Star General” of the Vice Lords street gang in Michigan was sentenced today to serve 35 years in prison for violent racketeering-related crimes.  To date, 12 other defendants have been convicted of federal offenses related to their roles in this violent conspiracy.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Division made the announcement.

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.  Through the lead efforts of the Comprehensive Violence Reduction Partnership Task Force, which consists of representatives of the ATF, Detroit Police Department, Michigan State Police, Michigan Department of Corrections and the FBI, law enforcement authorities linked various acts of violence in Detroit to the Phantom Outlaw Motorcycle Club and the Vice Lords street gang, and identified the leaders and key members of these gangs, who now have been held accountable.

Antonio Johnson, aka Mister Tony, MT or Big Bro, 39, of Detroit, was convicted on March 16, 2015, after a multi-week trial, of engaging in a racketeering conspiracy, conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to assault with a dangerous weapon in aid of racketeering, use and carry of a firearm during and in relation to a crime of violence, and being a felon in possession of firearms.  U.S. District Judge Paul D. Borman of the Eastern District of Michigan presided over the trial and imposed today’s sentence.

“Through his leadership positions in two gangs, Johnson spread violence in Detroit and beyond,” said Assistant Attorney General Caldwell.  “Here, through the Detroit One initiative, the collective efforts of federal agents, state and local police, and private citizens helped thwart a mass murder plot and ensure the convictions and lengthy prison sentences of Johnson and his fellow gang members.  This case is emblematic of law and order at its best: a true partnership between law enforcement authorities and the community they serve.”

“Gang wars fuel violence in our community, and the resulting drive-by shootings create unacceptable risk to innocent lives,” said U.S. Attorney McQuade.  “The Detroit One partners are systematically dismantling violent street and motorcycle gangs that are destroying the peace in our neighborhoods.”

“This significant sentence is the result of our on-going state and federal effort to combat gun violence in our communities,” said Special Agent in Charge Shoemaker.  “This investigation and resulting convictions is proof again that the Detroit One initiative and the CVRP are making a significant difference in our communities, there is a lot of work to do, but ATF is committed in the fight against violent crime.”

At trial, evidence showed that the Phantom Outlaw Motorcycle Club, which is headquartered in northwest Detroit, and its members were involved in a range of criminal activity including conspiracy to commit murder, shootings, robbery, extortion and the possession and sale of stolen vehicles and motorcycles.  The evidence also demonstrated that the leadership of the Phantoms was heavily involved in the Vice Lords, a well-known street gang originating from Chicago, and that Johnson was both the National President of the Phantoms and a leader of the Vice Lords in Michigan.  The evidence showed that Johnson used the Vice Lords to assist the Phantoms in various criminal endeavors, including to search for and violently attack rivals of the Phantoms.

Specifically, according to the evidence presented at trial, on Sept. 8 2013, Johnson ordered numerous Phantoms to forcibly steal the “rags,” or motorcycle vests, of members of the rival Satan Sidekick Motorcycle Club.  The evidence showed that, during Phantoms’ attempt to do so, a Satan Sidekick member was shot in the face and a Phantom member was stabbed.

According to the evidence presented at trial, a few weeks later, Johnson and his fellow Phantoms plotted the murder of three members of the rival Hell Lovers Motorcycle Club whom the Phantoms believed were responsible for a shooting death of a member of their club.  According to the evidence presented at trial, the plot involved killing the three men and then, during the anticipated subsequent wake at the Hell Lovers’ clubhouse, shooting all Hell Lovers in attendance.  ATF and FBI agents intervened before the Phantoms carried out the plot.

In addition to Johnson, the following defendants have been convicted and sentenced:

• Marvin Nicholson, 46, of Detroit, was convicted of RICO conspiracy, conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to assault with a dangerous weapon in aid of racketeering, use and carry of firearms during and in relation to a crime of violence, assault of federal officers and felon in possession of firearms.He was sentenced to serve 40 years in prison.

• Brian Sorrell, 28, of Detroit, was convicted of RICO conspiracy, conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence.He was sentenced to serve 21 years in prison.

• Matthew Schamante, 33, of Waterford, was convicted of RICO conspiracy, and was sentenced to serve 102 months in prison.

• Brian Jackson, 48, of Detroit, was convicted of conspiracy to commit murder in aid of racketeering, and was sentenced to serve 96 months in prison.

• Sherman Brown, 44, of Detroit, was convicted of conspiracy to commit murder in aid of racketeering, and was sentenced to serve 100 months in prison.

• Brandon Paige, 21, of Detroit, was convicted of conspiracy to commit murder in aid of racketeering, and was sentenced to serve 90 months in prison.

• Roger Valdes, 30, of Pontiac, Michigan, was convicted of assault with a dangerous weapon in aid of racketeering and use and carry of firearms during and in relation to a crime of violence, and was sentenced to serve 49 months in prison.

The following defendants also have been convicted, but have not yet been sentenced:

• Raynard Brown, 39, of Detroit, was convicted of RICO conspiracy.

• Vicente Phillips, 51, of Pontiac, was convicted of RICO conspiracy.

• Maurice Williams, 34, of Detroit, was convicted of RICO conspiracy.

• Christopher Odum, 30, of Detroit, was convicted of conspiracy to commit murder in aid of racketeering.

• William Frazier, 37, of Auburn Hills, Michigan, was convicted of assault with a dangerous weapon in aid of racketeering and use and carry of firearms during and in relation to a crime of violence.

The case was investigated by the ATF and the FBI.  The case was prosecuted by Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Louis Gabel of the Eastern District of Michigan.

Through the Detroit One initiative, local, state, and federal law enforcement authorities are maximizing their abilities to identify and arrest those responsible for violence in Detroit.  Since 2013, this collective effort has had led to significant indictments, convictions, and sentences against a number of street gang members responsible for much of the violent crime in Detroit.  These collaboration also has contributed to a decrease in the homicide rate from 386 in 2012 to 300 in 2014, and in the overall violent crime rate. 

A Detroit-area medical doctor who prescribed unnecessary controlled substances and billed for unperformed office visits and diagnostic testing pleaded guilty today for his role in a $5.7 million health care fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office and Special Agent in Charge Jarod J. Koopman of Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.

Laran Lerner, 59, of Northville, Michigan, pleaded guilty before U.S. District Judge Victoria A. Roberts of the Eastern District of Michigan to one count of health care fraud and one count of structuring cash transactions to avoid bank reporting requirements, as charged in a two-count information filed on Aug. 21, 2015.  Sentencing is set for Jan. 24, 2015. 

According to admissions made as part of his plea agreement, Lerner lured patients into his clinic with prescriptions for unnecessary controlled substances.  Lerner admitted that he billed and caused Medicare to be billed for a variety of unnecessary prescriptions, tests and office visits to make it appear as though he was providing legitimate medical services instead of medically unnecessary controlled substances.  According to admissions made as part of his plea agreement, Medicare was billed $5,748,237.31, as a result of Lerner’s unnecessary prescriptions, office visits and diagnostic testing.

As part of the plea agreement, Lerner agreed to permanently surrender his Drug Enforcement Administration controlled substance registration and agreed not to re-apply in the future.

Lerner also pleaded guilty to structuring cash deposits he received as a result of his scheme to avoid triggering the requirement under federal law that domestic banks file a report – called a Currency Transaction Report – with the Secretary of Treasury for all transactions in currency over $10,000.  Lerner admitted that he knew about this requirement and caused his cash deposits to be structured in $5,000 increments on consecutive days at various branch locations in the Detroit area to avoid detection.  According to court documents, Lerner deposited $70,000 in cash in April 2013 alone by making deposits of $5,000 on fourteen different days. 

The case was investigated by the FBI, HHS-OIG and IRS-CI, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan.  The case is being prosecuted by Trial Attorney Elizabeth Young of the Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.         

Lerner Plea Agreement  

CHARLOTTE, N.C. – A Union County man was sentenced today in U.S. District Court to 25 years in federal prison for producing child pornography, announced Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.  Chad Landon Blume, 34, of Waxhaw, N.C., was also ordered to serve a lifetime of supervised release and to register as a sex offender.   The sentence was imposed by U.S. District Judge Robert J. Conrad, Jr. of the Western District of North Carolina.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Union County Sheriff Eddie Cathey join Acting U.S. Attorney Rose in making today’s announcement.

According both to admissions made in connection with Blume’s guilty plea and to information introduced at sentencing, law enforcement recovered an SD Card that contained visual depictions of a minor engaging in sexually explicit conduct.  Court records indicate that law enforcement determined the SD Card came from Blume’s cellular phone, which he had used to produce the child pornography on or about November 2012.  During a subsequent search of Blume’s residence, agents seized Blume’s computer and other devices.  A forensic analysis of those devices revealed that Blume had produced numerous sexually explicit pictures of a female minor under the age of 10.  After Blume’s arrest, a second minor female came forward and disclosed that she had been molested by Blume.  Blume pleaded guilty to one count of production of child pornography in December 2013.

Blume has been in federal custody since April 2013.  Upon designation of a federal facility, he will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.

The FBI’s Crimes Against Children Squad investigated the case, assisted by the Union County Sheriff’s Office.   Assistant U.S. Attorney Cortney Randall of the U.S. Attorney’s Office in Charlotte handled the prosecution.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

A Detroit resident was convicted by a federal jury yesterday on charges of sex trafficking three minor victims using force and coercion, announced United States Attorney Barbara L. McQuade. McQuade was joined in the announcement by Special Agent in Charge Paul D. Abbate, Federal Bureau of Investigation. Willie Curry, 36, of Detroit, was convicted following a two-week jury trial before United States District Judge Denise Page Hood. Curry was also convicted of producing child pornography depicting the victims, and illegally possessing a firearm. Evidence presented at the trial established that Curry found his 15- and 16-year-old victims in Mt. Pleasant, Michigan, after they had run away from a residence where they had been placed by a juvenile court. Curry convinced the victims to come to Detroit by promising them new clothes and cellular telephones and offering to take care of them. Once in Detroit, however, Curry used physical violence and threats to control his victims, including beating one victim with a metal broomstick when she disobeyed his rules. He took explicit photographs of the victims, and then used the photographs in advertisements for commercial sex acts with the victims. When one of the victims refused to comply with Curry’s demands to engage in sex acts with strangers for money, he raped her. The next day, the victim climbed out of the bathroom window and fled from the home. She ran to a nearby gas station, where she approached a woman and asked for help. The woman called the girl’s father, who immediately started driving toward them. The woman returned the girl to her father near Lansing, Michigan. The girl was then interviewed by the Michigan State Police, and the information she provided led to the rescue of the other two victims from Curry’s home. “This defendant preyed on young, vulnerable victims, using false promises, threats and violence to compel them to engage in sex acts for his own profit,” McQuade said. “Sex traffickers like this one treat human beings like commodities to be traded for cash.” Sentencing is set for December 9, 2015. Curry faces a sentence of 15 years to life in prison. The case was investigated by the FBI’s Southeastern Michigan Crimes Against Children Task Force (SEMCAC). The Mt. Pleasant Police Department and the Michigan State Police provided crucial assistance in the investigation.

A leader of the Phantom Outlaw Motorcycle Club, who was also a member of the Vice Lords street gang, was sentenced to 40 years in prison today for violent racketeering-related crimes and shooting at federal agents.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Division made the announcement.

Marvin Nicholson, 46, of Detroit, was convicted on March 16, 2015, after a multi-week trial before U.S. District Judge Paul D. Borman of the Eastern District of Michigan, of engaging in a RICO conspiracy, conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to assault with a dangerous weapon in aid of racketeering, assault on federal officers, using and carrying firearms during and in relation to a crime of violence and being a felon in possession of firearms.

At trial, the evidence showed that the Phantom Outlaw Motorcycle Club, which is headquartered in northwest Detroit, and its members were involved in a range of criminal activity, including conspiracy to commit murder, shootings, robbery, extortion and the possession and sale of stolen vehicles and motorcycles.  The evidence also demonstrated that the leadership of the Phantoms was heavily involved in the Vice Lords street gang, which is a well-known street gang originating in Chicago.

According to the evidence presented at trial, Nicholson was the National Enforcer of the Phantoms and a member of the Vice Lords street gang.  Further, the evidence showed that Nicholson played a significant role in planning armed assaults on rivals, imposing discipline on the Phantoms and carrying out the orders of Antonio Johnson, aka Mister Tony, MT and Big Bro, who was the National President of the Phantoms and the “Three-Star General” over the Vice Lords street gang in Michigan.  The charges of which Nicholson was convicted primarily stemmed from the Phantoms’ attacks or planned attacks on their rivals and enemies, including a murder plot.

Finally, the trial evidence demonstrated that, on Oct. 4, 2013, while the ATF attempted to execute a search warrant at his residence in Detroit, Nicholson shot at ATF agents as they attempted to enter his residence.  A wall prevented the bullets from hitting the agents.

Another 12 defendants have been convicted of a variety of racketeering and weapons offenses in this case.  Additional sentencing hearings will be held before U.S. District Judge Paul D. Borman of the Eastern District of Michigan.

These convictions are 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, and through the lead efforts of the Comprehensive Violence Reduction Partnership Task Force, which consists of representatives of the ATF, Detroit Police Department, Michigan State Police, Michigan Department of Corrections and the FBI. 

This case is being prosecuted by Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Louis Gabel of the Eastern District of Michigan.

An indictment charging 24 members of a large-scale narcotics organization from the Ravendale neighborhood on Detroit’s east side was unsealed today, United States Attorney Barbara L. McQuade announced. Joining McQuade in the announcement was Special Agent in Charge Paul D. Abbate, Federal Bureau of Investigation. The indictment also charges six of the defendants with participating in an extensive illegal dogfighting ring. The indictment allege that these defendants acquired, bred and trained dogs for dogfights in Detroit. The indictment alleges that the group used 16 different houses, most of them abandoned, in and around the Ravendale neighborhood to distribute heroin, cocaine and crack cocaine during the past last several years. During that period, various law enforcement agencies have seized drugs, firearms and distribution paraphernalia in many of these abandoned houses. Through their joint investigative efforts, federal, state and local law enforcement agencies were able to connect this evidence to the larger distribution ring. Among those charged in the indictment unsealed today are: - Damon Burnett, 36, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances, possession of firearms in furtherance of narcotics trafficking, and possession of a firearm by a felon; - Maurice Littles, 44, of Jackson, charged with conspiracy to possess with intent to distribute controlled substances, possession with intent to distribute cocaine, and conspiracy to sponsor and exhibit an animal fighting venture; - Eric Edmon, 42, of Roseville, charged with conspiracy to possess with intent to distribute controlled substances; - Erik Carter, 39, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances; - Derek Carter, 39, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances; - Daron Calhoun, 35, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances; - Stevie Bridgeman, 36, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances; - Clyde Woodson, 47, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances; - Pierre Livingston, 43, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances and conspiracy to sponsor and exhibit an animal fighting venture; - Marcus Bradford, 44, of Southfield, charged with conspiracy to possess with intent to distribute controlled substances and conspiracy to sponsor and exhibit an animal fighting venture; - Brian Williams, 35, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances and conspiracy to sponsor and exhibit an animal fighting venture; - Jackie Littles, 53, of Harper Woods, charged with conspiracy to possess with intent to distribute controlled substances; - Michael Anderson, 40, of Romulus, charged with conspiracy to possess with intent to distribute controlled substances; - Kim Robinson, 45, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances; - Darren Parchem, 28, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances; - Sherita Jones, 35, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances and conspiracy to sponsor and exhibit an animal fighting venture; - Maurice Littles Jr., 24, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances and conspiracy to sponsor and exhibit an animal fighting venture; - Myron Duncan Plunkett, 23, charged with conspiracy to possess with intent to distribute controlled substances; - Ivin Booth, 40, of Pontiac, charged with conspiracy to possess with intent to distribute controlled substances; - Shajuana Barnes, 26, of Roseville, charged with conspiracy to possess with intent to distribute controlled substances; - Latrina Hamilton, 35, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances; - Eugene Jackson, 29, of Monroe, charged with conspiracy to possess with intent to distribute controlled substances; - Renee Jackson, 40, of Monroe, charged with conspiracy to possess with intent to distribute controlled substances; and - Edward Wilson, 26, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances. “Large-scale, armed drug trafficking organizations that operate out of homes in residential areas create an unacceptable risk of violence to our neighborhoods,” McQuade said. “Dogfighting not only exposes animals to torture for human amusement, but it also poses a safety hazard for residents living in our community when dogs are trained to attack.” “We are extremely proud of the outstanding work done today by our agents and law enforcement partners, which is the result of long-term efforts to counter violent crime, illegal drugs, and organized criminal activity,” said Paul Abbate, Special Agent in Charge of the Detroit Field Office. "The success and impact of this joint effort is an example of our continued commitment together to ensure public safety and protect the citizens we serve in the city and the metropolitan area." The Federal Bureau of Investigation’s Violent Gang Task Force, consisting of representatives of the Detroit Police Department, Michigan State Police, Michigan Department of Corrections, and Homeland Security Investigations, led the investigation. The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.