Eastern District of Michigan

Seven members of the Vice Lords were charged in an indictment unsealed today with various offenses based on their roles in a gang-related shooting. The charges are the result of the collaborative efforts of law enforcement and the community to reduce homicide and other violent crime under the Detroit One program, which has led to the arrests and convictions of Vice Lords leaders during this past year. 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, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Division and Chief James Craig of the Detroit Police Department. “The Detroit One partners are working to dismantle street gangs that drive the violence in our neighborhoods,” McQuade said. “This indictment is particularly important because we want to demonstrate support for individuals who attempt to leave gang life.” The seven Vice Lord members charged with crimes stemming from this incident are: • Antonio Clark, aka Cheeto, 25, of Detroit, is charged with attempted murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, use and carry of firearms during and in relation to a crime of violence and being a felon in possession of firearms; • Aramis Wilson, aka Ace, 24, of Detroit, is charged with attempted murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, use and carry of firearms during and in relation to a crime of violence and being a felon in possession of firearms; • Tyrone Price, aka Price, 26, of Detroit, is charged with assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence; • Jonathan Kinchen, aka Deago, 22, of Detroit, is charged with assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence; • Kojuan Lee, aka Juan, 19, of Detroit, is charged with assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence; • Kirshean Nelson, 18, of Detroit, is charged with 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 • Dion Robinson, aka Doggy, 37, of Detroit, is charged with assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence. Robinson, Clark, Price, Kinchen and Wilson are in custody; arrest warrants have been issued for the other three defendants. According to the indictment, the Vice Lords is a national gang engaged in a variety of crimes, including murder, robbery, narcotics trafficking and witness intimidation. The indictment alleges that the Vice Lords’ leaders are located in both Chicago and Detroit, and that the gang is broken down into various “sets,” “decks,” or “branches,” including the Detroit-based Insane Vice Lords, Imperial Insane Vice Lords, Traveling Vice Lords, Conservative Vice Lords, Mafia Insane Vice Lords and Insane Goon Gang. The indictment further alleges that members who seek to leave or withdraw from the gang oftentimes endure a physical beating, known as a “beat out,” by multiple Vice Lord members, or are targeted for killing, known as a “green light.” According to the indictment, on May 7, 2015, to maintain and improve their positions in the Traveling Vice Lords, the defendants shot four individuals from the same family. The indictment alleges that the shooting was prompted by two of the family members’ attempts to leave the gang. 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, FBI and the Detroit Police Department. 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. # # #

A Detroit area hematologist-oncologist was sentenced today to serve 45 years in prison for his role in a health care fraud scheme that included administering medically unnecessary infusions or injections to 553 individual patients and submitting to Medicare and private insurance companies approximately $34 million in fraudulent claims.

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 Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.

Farid Fata, M.D., 50, of Oakland Township, Michigan, pleaded guilty in September 2014 to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering. U.S. District Judge Paul D. Borman of the Eastern District of Michigan imposed the sentence, and ordered Fata to forfeit $17.6 million.

“Rather than use his medical degree to save lives, Dr. Fata instead destroyed them in pursuit of profit,” said Assistant Attorney General Caldwell. “Time and again, Dr. Fata callously violated his patients' trust as he used false cancer diagnoses and unwarranted and dangerous treatments as tools to steal millions of dollars from Medicare, even stooping to profit from the last days of some patients' lives. While no sentence can restore what was taken from his patients and their families, the sentence imposed ensures that never again will Dr. Fata lay hands on another patient.”

“Health care fraud has been a serious problem in Michigan, but no case has been as egregious as the conduct of Dr. Farid Fata,” said U.S. Attorney McQuade. “Dr. Fata did not care for patients; he exploited them as commodities. He over-treated, under-treated and outright lied to patients about whether they had cancer so that he could maximize his own profits.”

“Fata’s heinous acts did far worse than defraud government health care programs and breach his professional oath,” said Special Agent in Charge Abbate. “Fata caused grievous emotional and physical harm, betraying the trust of hundreds of innocent patients by selfishly placing his personal financial gain over the health and welfare of those who entrusted him with their medical care. The many brave individuals impacted by this defendant’s criminal acts had the strength to come forward, express their experiences of pain and suffering, and collaborate with law enforcement and prosecutors to ensure that Fata’s despicable actions were brought to an end and justice delivered.”

“It is startling and abhorrent when greed is so potent that it drives a medical professional to recklessly abandon the most basic and important principle of his profession, ‘First, Do No Harm,” said Special Agent in Charge Pugh. “Dr. Fata did just that when he falsely diagnosed his patients with cancer and administered toxic chemotherapy with potentially harmful and even deadly side effects. Today’s sentencing is a clear message that, working closely with our law enforcement partners, we will continue to investigate, charge and prosecute medical professionals who jeopardize the health of patients.”

“This is the most egregious case of fraud and deception that I have seen in my career," said Chief Weber. “Dr. Fata not only defrauded the government out of millions of dollars, but he lied to his patients about their health and intentionally put their lives at risk. In fact, because of his lies, some of those patients who he was entrusted to care for likely died as a result of his actions. This defendant ‎greedily cared more about his own financial well-being than the lives of his patients. This disgusting and diabolical scheme has hurt hundreds of patients and their families and stolen from them something that no punishment from the court can do to make them whole.”

As set forth at sentencing, Fata was a licensed medical doctor who owned and operated a cancer treatment clinic, Michigan Hematology Oncology P.C. (MHO), which had locations in Rochester Hills, Michigan; Clarkston, Michigan; Bloomfield Hills, Michigan; Lapeer, Michigan; Sterling Heights, Michigan; Troy, Michigan; and Oak Park, Michigan. He also owned a diagnostic testing facility, United Diagnostics PLLC, located in Rochester Hills, Michigan.

In connection with his guilty plea, Fata admitted to prescribing and administering unnecessary aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to patients in order to increase his billings to Medicare and other insurance companies. Fata then submitted fraudulent claims to Medicare and other insurers for these unnecessary treatments.

Fata also admitted to soliciting kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care in exchange for his referral of patients to those facilities.

Fata further admitted to using the proceeds of the health care fraud at his medical practice, MHO, to promote the carrying on of additional health care fraud at United Diagnostics, where he administered unnecessary and expensive positron emission tomography (PET) scans for which he billed a private insurer.

This case was investigated by the FBI, HHS-OIG and IRS-CI and 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. This case is being prosecuted by Assistant Chief Catherine K. Dick, Deputy Chief Gejaa T. Gobena, and Trial Attorney Matthew C. Thuesen of the Fraud Section, and by Assistant U.S. Attorney Sarah Resnick Cohen, White Collar Crime Unit Chief John K. Neal, and Health Care Fraud Unit Chief Wayne F. Pratt of the U.S. Attorney’s Office of the Eastern District of Michigan. 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 Team, go to: www.stopmedicarefraud.gov.

Dennis Fraser, 44, of Howell, Michigan, was arrested on charges alleging he distributed, possessed and received child pornography, 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.

The affidavit supporting the criminal complaint states that ICE agents executed a search warrant on Fraser’s email account and found images of children engaging in sexually explicit conduct. A forensic search of Fraser’s personal computer revealed 211 images of child pornography and multiple link files with titles consistent with child pornography.

Fraser will appear in federal court today at 1:00 p.m. where it will be determined whether he will be detained or released pending trial.  If convicted, Fraser faces not less than 15 years in prison and up to 40 years maximum.

This case is being prosecuted by Mollie O’Rourke and investigated by special agents with U.S Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

DETROIT, MI – Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today a nationwide sweep led by the Medicare Fraud Strike Force in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings.  In addition, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority as provided in the Affordable Care Act.  This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount.    
 

“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” said Attorney General Lynch.  “The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others.  They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered.  In the days ahead, the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives.  We are prepared – and I am personally determined – to continue working with our federal, state, and local partners to bring about the vital progress that all Americans deserve.”

“Health care fraud has been pervasive throughout metro-Detroit in recent years, at great cost to the American taxpayer.  We hope that cases like these will alert doctors, pharmacists and other providers that criminal investigators are now scrutinizing billing records so that we can detect fraud and hold wrongdoers accountable,” said Barbara L. McQuade U.S. Attorney for the Eastern District of Michigan.

“The abuse of our health care system through the submission of fraudulent claims and payment of illegal kickbacks is criminal and negatively impacts each and every law abiding, taxpaying citizen,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office.  “Through the collective efforts of the Medicare Fraud Strike Force and law enforcement nationwide, the doctors, physical therapists and other licensed medical professionals charged and arrested in Michigan and around the country have been brought forward to face justice for their egregious criminal practices.  The FBI, working in lockstep with its partners, remains committed to rooting out those within the medical profession who violate their patients’ trust, endanger their health, and defraud the health care system.”

“Today’s announcement illustrates that the Medicare Fraud Strike Force remains very active in Eastern Michigan,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “Individuals who attack federally funded health care programs should know that the Strike Force will detect and dismantle fraud operations and will ensure that perpetrators of these crimes are held accountable.”

“Health care fraud is all about the money,” said Jarod Koopman, Special Agent in Charge, Internal Revenue Service Criminal Investigation.  “Our special agents bring their financial expertise to the table, teaming up with our law enforcement partners in order to help identify, investigate and dismantle these corrupt and costly schemes.”

In the Detroit area, sixteen individuals, including six doctors, a social worker, a pharmacist and two physical therapists were charged with a variety of health care fraud and kickback schemes totaling over $122 million. The schemes involved services that were medically unnecessary or never rendered, including physician visits, hospice care, home health care, and the billing but not dispensing of pharmaceuticals. In addition, law enforcement agents executed search warrants at eight locations and seizure warrants of 24 bank accounts related to the alleged schemes. The Centers for Medicare and Medicaid Services has moved to suspend 14 providers associated with the schemes.

The following charges were filed or unsealed:

United States v. Tahir, et al.

Five individuals, two physicians and three owners of hospice and home health care companies, were charged in an indictment with conspiring to commit health care fraud for their roles in a $58.3 million scheme to defraud Medicare by submitting fraudulent claims for home health care and hospice services that were medically unnecessary or not provided. The owners of the home health care and hospice companies, two of whom are also physical therapists, paid physicians and recruiters kickbacks for referring patients, then billed Medicare for medically unnecessary services, which were often never provided. The companies, located in Livonia, Michigan, are A Plus Hospice and Palliative Care, At Home Hospice, and At Home Network Inc., a home health care agency. The physicians who solicited and received kickbacks also submitted claims to Medicare for medically unnecessary physician services through their companies, Waseem Alam, M.D., P.C., Woodward Urgent Care, and Hatem Ataya, M.D., P.C. Those physicians prescribed beneficiaries medically unnecessary prescriptions, including controlled substances, for which Medicare also paid.

The defendants charged in the indictment are Shahid Tahir, 45, of Bloomfield, Michigan, Waseem Alam, 59, of Troy, Michigan, Hatem Ataya, 47, of Flushing, Michigan, Muhammad Tariq, 60, of West Bloomfield, Manawar Javed, 40, of West Bloomfield, Michigan.

United States v. Goldfein, M.D., et al.

Four individuals, a physician and three owners of home health care companies, were charged in a superseding indictment with conspiracy to commit health care and wire fraud, health care fraud, wire fraud and conspiracy to pay or receive health care kickbacks. The indictment alleges that the fraudulent claims were submitted by physicians who took kickbacks to refer home health care, then billed medically unnecessary services and prescribed unnecessary medications billed to Medicare.

The defendants charged in the indictment are William Binder, M.D., 58, Muhammad Zafar, 43, of Brownstown, Michigan, Tariq Khan, 47, of Woodhaven, Michigan, and Ghulam Shakir, 43.

United States v. Daneshvar, M.D.

Gerald Daneshvar, M.D., 39, of West Bloomfield, Michigan, was charged by indictment with his role in an over $5 million conspiracy to commit health care fraud by referring non-homebound patients for home health care services as well as billing for upcoded physician visits through Lake MI Mobile Doctors, PC (“Mobile Doctors”). The owner of Mobile Doctors and another physician employee were indicted in the Northern District of Illinois in 2013 for their roles in the same scheme.

United States v. Lerner, M.D., et al.

Laran Lerner, M.D., 59, of Northville, Michigan, a physician, and Mohamad Bazzi, 42, of Dearborn, Michigan, a licensed pharmacist and pharmacy owner, were charged by complaint with an over $24 million health care fraud scheme. Dr. Lerner provided medically unnecessary prescriptions for expensive pharmaceuticals for which Bazzi’s pharmacy, Advanced Pharmacy Services (APS) would bill Medicare, but not dispense. In addition, Dr. Lerner billed for unnecessary physician visits and referred beneficiaries for medically unnecessary home health care services through his clinic Greater Detroit Physical Therapy & Rehabilitation, located in Westland, Michigan.

United States v. Qadir, M.D.

Rizwan Qadir, M.D., 52, of Bloomfield Hills, Michigan, a physician, was charged by complaint with conspiracy to commit health care fraud and to pay or received kickbacks in a $19 million Medicare fraud scheme. Qadir paid patient recruiter Johnny Younan to bring him patients, for whom he would bill medically unnecessary tests and visits. Qadir also referred the beneficiaries for medically unnecessary home health care services.

United States v. Younan

Johnny Younan, 52, of Centerline, Michigan, was charged by complaint with conspiracy to pay or receive health care kickbacks to a physician, who would also prescribe Medicare beneficiaries controlled substances as an inducement to provide their Medicare information for billing.

United States v. Celestine Brown

Celestine Brown, 50, of Ypsilanti, Michigan, a licensed social worker, was charged by information with one count of health care fraud and one count of structuring in connection with her role in a $3.8 million scheme to defraud Medicare through the submission of false claims for psychotherapy services that were never rendered. Brown submitted the false claims through her company CBC Services, LLC located in Ypsilanti, Michigan. Brown is also alleged to have then structured cash withdrawals from her bank accounts in amounts of less than $10,000 to avoid reporting requirements.

United States v. Tamara Brown

Tamara Brown, 42, of Southfield, Michigan, was charged by complaint with her part in a $1.3 million kickback conspiracy. The complaint alleges that Brown solicited and received kickbacks from two Detroit area home health care agencies, Cherish Home Health Services, LLC, and Empirical Home Health Care, Inc., in return for providing patient referrals from a physician.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since their inception in March 2007, Strike Force operations in nine locations have charged over 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.

Including today’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, which have involved more than $2.5 billion in fraudulent billings.  Today’s announcement marks the first time that districts outside of Strike Force locations have participated in a national takedown and accounted for 82 defendants charged in the takedown.

These cases were investigated by the FBI, HHS-OIG and IRS-CI and were brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. These cases are being prosecuted by Trial Attorneys Matthew C. Thuesen, Elizabeth Young, Amy Markopoulos and Drew Bradylyons.

A complaint, indictment or information is merely a charge, and defendants are presumed innocent until proven guilty.

# # #

A Sterling Heights man was sentenced to almost six years in federal prison today for sports bribery, fraud and unlawfully possessing a gun, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Field Office, and Special Agent in Charge Anthony V. Mohatt, U.S. Department of Agriculture, Office of Inspector General.

U.S. District Judge Mark Goldsmith sentenced Ghazi Manni, 58, to 70 months in prison, three years of supervised release, and ordered him to pay restitution of $700,000 and to forfeit $700,000 to the government.

According to court records, between December 2005 and December 2006, Manni and codefendant Mitchell Karam, who is awaiting sentencing, paid money to a professional jockey to influence the results of races at Tampa Bay Downs in Tampa, Florida, and elsewhere. The indictment alleges that Manni and Karam then used the simulcast pari-mutuel wagering system to place bets on the fixed races.  Manni pleaded guilty to paying University of Toledo athletes to affect the point spread of football and basketball games in 2005 and 2006.  He also pleaded guilty to paying a jockey to fix horse races at a racetrack in Florida from 2004 to 2006. He also pleaded guilty to paying cash for food stamps at King Cole Foods in 2010 and 2011.  Manni had been previously convicted by a jury of unlawfully possessing a gun and ammunition, and today was resentenced for those crimes as well.

Before imposing the sentence, Judge Goldsmith noted that Manni’s crimes all were the product of deliberation and spanned long periods. He also noted that Manni’s sports bribery crimes destroyed the careers of the athletes he had corrupted. Judge Goldsmith stated that the sentence was necessary to protect the public from further crimes by Manni.

“These bribery offenses were significant crimes not only because they affected fair play in the particular games and races involved, but also because they exploited young athletes and undermined public confidence in the sports themselves,” McQuade said.

The sports bribery cases were investigated by special agents of the Federal Bureau of Investigation. The food stamp fraud case was investigated by the United States Department of Agriculture, Office of Inspector General.

Five members of a violent street gang in Detroit have been indicted on racketeering and other related charges, announced United States Attorney Barbara L. McQuade today.

McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division and Chief James Craig, Detroit Police Department.

The superseding indictment, unsealed today, is a result of the collaboration of local, state, and federal law enforcement under the Detroit One initiative.

According to the superseding indictment, the gang known as “RTM” short for “Related Through Money” operates in northwest Detroit, between the Southfield Freeway and Greenfield Road to the west and east and by Plymouth Road  and Joy Road to the north and south.  The RTM gang members refer to this area as the “Skuddzone” and actively use violence to stake out the gang’s “turf” and intimidate both rival gang members and the citizens of northwest Detroit and the surrounding area.  The gang is active around Cody High School and has been involved in a number of assaults and acts of intimidation at the high school.  The superseding indictment alleges a variety of crimes, including murders, shootings, carjackings, assaults, the breaking and entering of residential homes or businesses, and robberies and attempted robberies of jewelry stores. The five  individuals charged with racketeering conspiracy are:

- Deonta Matthews, 20, of Detroit;

- Brandon Owens, 19, of Detroit;

- Brandon Sims, 20, of Detroit;

- Meyer Thedford, 20, of Detroit; and

- Antwan Foster-Stockton, 21, of Detroit.

Under the Detroit One Initiative investigators were able to combine separate probes into various members of this organization and its activities into one investigation.  Detroit One is led by the Detroit Police Department and the FBI Violent Gang Task Force, which consists of representatives of Detroit Police Department, Redford Township Police Department, Homeland Security Investigations, Michigan Department of Corrections, and Michigan State Police.

“The Detroit One partnership has made it a priority to dismantle violent street gangs to restore peace to our neighborhoods,” McQuade said.  By working together with various law enforcement agencies, we are able to detect patterns and repeated crimes by the same individuals to build larger cases out of separate incidents.”

“As part of the Detroit One Initiative, this collaborative investigation targeted some of the most violent criminal offenders in the Detroit area,” said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “As alleged in the indictment, RTM gang members have been involved in assaults and acts of intimidation in and around a high school. There is nothing more important than protecting our children and keeping our communities safe from violent offenders. Through the Detroit One Initiative, we wage this battle on behalf of law abiding citizens every day. The FBI, in cooperation with the officers, agents and prosecutors engaged in this effort, will continue to fight for the safety of the citizens we serve.”

Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. This indictment is the latest in a string of indictments or informations over the last two years involving violent street gangs in the city of Detroit, including:

• Nine members of the Bounty Hunter Bloods street gang charged with federal racketeering conspiracy and other violent acts in furtherance of racketeering;

• Thirteen members of the Latin Counts street gang charged with federal racketeering conspiracy and other violent acts in furtherance of racketeering;
• Fourteen members of the Phantom Outlaw Motorcycle Club / Vice Lords street gang charged with federal racketeering conspiracy and other violent acts in furtherance of racketeering;
• A Vice Lord leader charged under the federal street gang statute for his role in an armed robbery; and
• Three members of the Band Crew street gang charged under the state of Michigan gang felony statute for violent acts in furtherance of their gang activities.

These charges are just some of the tangible and significant results of this joint effort.

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

A 38-year-old resident of Farwell, Michigan, was sentenced today to 37 months in prison for strangulation of a dating or intimate partner for separate assaults he committed against two different girlfriends, announced U.S. Attorney Barbara L. McQuade. 

United States District Judge Thomas L. Ludington also imposed two years of supervised release on Rodney Kenneth House who pled guilty on January 16, 2015.

The evidence established that in early 2014, House threw around one victim, punched her, kicked her, and strangled her to the point she thought she was going to die. The evidence also established that in late 2013, House strangled the other victim multiple times to the point that she thought she was going to pass out. Both incident happened on the Isabella Reservation.   

The case was investigated by the Saginaw Chippewa Tribal Police.  The case was prosecuted by Assistant United States Attorney Roy Kranz.

WASHINGTON – The former operator of a Detroit adult day care center and two former owners of Detroit-area home health care companies were sentenced to prison today for their roles in a $29 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 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 Koopman of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.

Felicar Williams, 51, of Dearborn, Michigan, was sentenced to five years in prison and ordered to pay $2,431,018 in restitution, representing the amount paid by Medicare for Williams’ fraudulent claims.  Abdul Malik Al-Jumail, 54, and Jamella Al-Jumail, 25, both of Brownstown, Michigan, were sentenced to 10 years in prison and four years in prison respectively.  Both were also ordered to pay $8,389,541 and $589,516 in restitution, respectively, the amounts paid by Medicare for their fraudulent claims.  The sentences were imposed by U.S. District Judge Denise Page Hood of the Eastern District of Michigan in Detroit.

All three defendants were convicted on Sept. 30, 2014, after a 12-week jury trial in the Eastern District of Michigan.  Williams was convicted of conspiracy to commit health care fraud and conspiracy to receive health care kickbacks.  Abdul Malik Al-Jumail and Jamella Al-Jumail were each found guilty of conspiracy to commit health care fraud.  Abdul Malik Al-Jumail was also found guilty of conspiracy to pay and receive health care kickbacks.  Jamella Al-Jumail was also found guilty of destroying documents in connection with a federal investigation.

According to the evidence at trial, Williams billed Medicare, through her company, Haven Adult Day Care Center LLC, for psychotherapy services that were not actually provided.  The evidence demonstrated that, in some instances, Williams billed Medicare for services purportedly provided to patients who were already deceased.  Williams also sold the private medical information of her patients to Abdul Malik Al-Jumail so that he could use it to submit fraudulent claims to Medicare.

The evidence further showed that Abdul Malik Al-Jumail obtained patients by paying unlawful kickbacks to Williams and others, and caused claims to be submitted to Medicare for home health services, including physical therapy, that were never delivered.  Like her father, the evidence demonstrated that Jamella Al-Jumail billed Medicare for home health services and physical therapy that were not actually provided.  The evidence at trial also showed that, the day her father was arrested, Jamella Al-Jumail told an employee to retrieve falsified patient medical records from their company, which she and others later burned.

The case was investigated by the FBI, HHS-OIG and the IRS, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  The case was prosecuted by Trial Attorneys Christopher Cestaro, Brooke Harper and William Kanellis of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Patrick Hurford of the Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 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 Team (HEAT), go to: www.stopmedicarefraud.gov.

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WASHINGTON – The government has intervened in three False Claims Act lawsuits and filed a consolidated complaint against HCR ManorCare alleging that ManorCare knowingly and routinely submitted false claims to Medicare and Tricare for rehabilitation therapy services that were not medically reasonable and necessary, the Department of Justice announced today.  ManorCare is one of the nation’s largest healthcare providers, operating approximately 281 skilled nursing facilities (SNFs) in 30 states.

“The Department of Justice is committed to ensuring that healthcare providers who pressure their employees to provide medically unnecessary services to Medicare beneficiaries and Tricare recipients, solely to increase their own profits, are held accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “We will not relent in our efforts to stop these false billing schemes and recover funds for federal healthcare programs.”

The government’s complaint alleges that ManorCare, which is owned by The Carlyle Group, exerted pressure on SNF administrators and rehabilitation therapists to meet unrealistic financial goals that resulted in the provision of medically unreasonable and unnecessary services to Medicare and Tricare patients.  ManorCare allegedly set prospective billing goals designed to significantly increase revenues without regard to patients’ actual clinical needs and threatened to terminate SNF managers and therapists if they did not administer the additional treatments necessary to qualify for the highest Medicare payments.  ManorCare also allegedly increased its Medicare payments by keeping patients in its facilities even though they were medically ready to be discharged.

“We strive for a system whereby health care providers provide reasonable and necessary services without overbilling Medicare for unreasonable and unnecessary services” said U.S. Attorney Dana Boente of the Eastern District of Virginia.  “We will continue our robust investigations of the companies operating in this important sector of our economy.”

“We want to ensure that taxpayer dollars are used to pay for health care for Americans that need it, not to unjustly enrich health care companies,” said U.S. Attorney Barbara McQuade of the Eastern District of Michigan.  “Medical providers will be held accountable when they exploit patients for profit by subjecting them to therapies they don’t need and then billing Medicare for reimbursement.”

“Today’s action is the result of a robust investigation into alleged false billings submitted to Medicare and Tricare for rehabilitation therapy services that were not necessary for patients,” said Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington, D.C., Field Office.  “Healthcare fraud is a top priority for the FBI and we will continue to work closely with federal, state and local law enforcement partners to address vulnerabilities, fraud and abuse in the healthcare industry.”

The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.  The False Claims Act permits the government to intervene in such lawsuits, as it has done in these cases.  A defendant that violates the False Claims Act is liable for three times the government’s losses plus civil penalties.

The government’s intervention in these matters illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.  Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

These matters were investigated by the Civil Division’s Commercial Litigation Branch; the U.S. Attorney’s Offices for the Northern and Southern Districts of Iowa, Eastern and Western Districts of Michigan, Northern and Southern Districts of Ohio, Eastern District of Pennsylvania, and Eastern District of Virginia; the Department of Health and Human Services’ Office of Inspector General; the Department of Defense’s Office of Inspector General; the Defense Health Agency; the Medicaid Fraud Control Units of the California Attorney General’s Office, Delaware Department of Justice, the Florida Attorney General’s Office, Illinois State Police, Iowa Department of Inspections and Appeals, the Maryland Attorney General’s Office, the Michigan Attorney General’s Office, the Ohio Attorney General’s Office, and the Virginia Attorney General’s Office; the National Association of Medicaid Fraud Control Units; and the FBI.

The cases are captioned United States ex rel. Ribik v. ManorCare, Inc., et al., Case No. 1:09cv13-CMH-HCB (E.D. Va.); United States ex rel. Slough v. HCR ManorCare, et al., Case No. 1:14cv1228  (E.D. Va.); and United States ex rel. Carson v. HCR ManorCare, et al., Case No. 1:11cv1054 (E.D. Va.).

The claims asserted against ManorCare are allegations only, and there has been no determination of liability.

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An Ypsilanti man was sentenced yesterday for his involvement in a scheme to defraud the Internal Revenue Service, announced United States Attorney Barbara L McQuade.

McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.

Receiving the sentence from U.S. District Judge Gershwin A. Drain was Antonio R. Lundy, 43.  Lundy pleaded guilty before Judge Drain in December 2014.   Judge Drain sentenced Lundy to 18 months in prison and three years’ supervised release and ordered him to pay restitution to the IRS in the amount of $251,900.

According to court records, Lundy participated in a scheme to defraud the Internal Revenue Service through the filing of numerous income tax returns in the names of individuals whose personal identification information (PII) had been either obtained with their consent or obtained illegally.  From September 2011 through April 2012, Lundy provided the home addresses and PII of individuals to others members of the scheme.  The information provided by Lundy was used to prepare and file fraudulent federal income tax returns, which requested refunds based on reported tax withholdings that were false.  The refunds were loaded onto Turbo Tax Visa debit cards and mailed to the home addresses provided by Lundy.  Lundy used the debit cards to withdraw cash at ATMs, and his cash withdrawals totaled $251,900.  Overall, the scheme involved approximately 180 fraudulent returns that requested approximately $1.7 million in refunds.

“IRS-CI is committed to working with our law enforcement partners to combat identity theft.  Investigating and prosecuting identity thieves who attempt to defraud the government by filing fraudulent income tax returns remains a top priority for the IRS,” said IRS Criminal Investigation Special Agent in Charge Koopman.

The case was investigated by special agents of the IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Stephen Hiyama.

A Mt. Pleasant, Michigan resident pleaded guilty to embezzlement and filing false tax returns with the Internal Revenue Service, United States Attorney Barbara L. McQuade announced today.

United States Attorney McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division and Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation.

On April 8, 2015, Kimberly Misky entered her guilty plea before U.S. Magistrate Judge Patricia L. Morris.

According to court records, Misky was the branch manager of Citizens Bank in Alpena, Michigan.  In her role as manager, Misky managed other bank employees, opened new accounts, renewed certificates of deposit and generated sales.

Beginning in April 2010 and continuing through July 2011, Misky used her positions as branch manager and personal banker to open Citizens Bank accounts that she controlled, in the names of fictitious individuals.  She then accessed the certificates of deposit account of elderly and deceased Citizens Bank customers and transferred the funds from those accounts to the accounts she controlled.  Later, Misky transferred the funds from the accounts in the fictitious names to an account at another financial institution that was in her name and her daughter’s name.  Overall, Misky embezzled approximately $86,489 in 2010 and $222,983 in 2011.

“The public has every right to expect that the employees of the banks that they entrust their money with will be honest and law abiding.  Ms. Misky violated this trust for her own financial gain and is now facing serious criminal sanctions as a result of her actions”, said Special Agent in Charge Jarod J. Koopman.

Embezzlement carries a maximum penalty of 30 years imprisonment and/or a fine of $1,000,000.  Filing a false tax return carries a maximum penalty of 3 years imprisonment and/or a fine of $250,000.he case was investigated by special agents of the IRS Criminal Investigation, FBI and prosecuted by Assistant U.S. Attorney Libby Kelly Dill.

A Detroit Police lieutenant and an officer were indicted yesterday on charges of robbing drug dealers and stealing drugs and money obtained in police searches, U.S. Attorney Barbara L. McQuade announced today.The indictment was sealed until this morning.

Joining McQuade in the announcement were Special Agent in Charge Paul M. Abbate of the Federal Bureau of Investigation’s Detroit Division, Chief James E. Craig of the Detroit Police Department and Special Agent in Charge Joseph P. Reagan, Drug Enforcement Administration, Detroit Field Division.

Lieutenant David Hansberry, 34, and Officer Bryan Watson, 46, each were charged with conspiracy to possess with intent to distribute narcotics, conspiracy to interfere with commerce by robbery, multiple counts of interference with commerce by robbery and extortion, possession with intent to distribute five or more kilograms of cocaine and two counts of possessing a firearm in furtherance of a crime of violence and drug trafficking crime. A third defendant, Kevlin Omar Brown, 45, was also charged with one count of interference with commerce by robbery and extortion.

According to the indictment, the defendants arranged drug transactions with civilians, including confidential sources, so that they could rob and extort them. The defendants allegedly carried out traffic stops and fake arrests, and then stole drugs, money and personal property from their victims. Hansberry and Watson are charged with using their status as law enforcement officers to assist in their scheme, by driving police vehicles, activating lights on their police vehicles, wearing police-issued attire, displaying official badges and carrying firearms. Hansberry and Watson also allegedly identified themselves as police officers to coerce their victims into complying with their demands and to encourage their victims to flee, leaving behind illegal drugs, money, and personal property. The indictment also alleges that Hansberry and Watson failed to log into evidence money and drugs seized during searches of homes. Instead, they split the proceeds and arranged for the sale of the drugs, sharing the proceeds generated by the sales.

“Officers who violate the law cannot be tolerated because effective law enforcement requires public trust,” McQuade said. “We applaud Chief Craig’s commitment to root out any officers who tarnish the badge.”

“Special Agent in Charge Abbate stated, “Every police officer who would dishonor the badge must know that they will be held accountable under the law. As law enforcement officers, we owe a tremendous duty to the public we serve, and therefore must be held to the highest standards of trust and integrity. The FBI and its law enforcement partners are committed to ensuring that these fundamental principles are fully maintained and enforced without compromise.”

“The vast majority of the men and women of the Detroit Police Department are honest and hard-working, but these defendants betrayed their oath and their fellow officers,” said Chief Craig. “We are committed to the highest standards of integrity, and we will remove any officers who do not live up to those high standards.”

Hansberry and Watson were previously assigned to the now-disbanded Narcotics Section of the Detroit Police Department. Since October 2014, they have been on suspension by the Detroit Police Department.

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

The case was investigated by the by the FBI Detroit Area Public Corruption Task Force, in collaboration with the Detroit Police Department’s Office of Internal Affairs and the Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorneys Sheldon Light and Louis P. Gabel.

Six individuals were charged today in connection with their involvement in an armed robbery crew that conducted home invasion robberies in Michigan and Texas, principally targeting victims of Indian and Asian ancestry.

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 Division, Acting Special Agent in Charge Katherine J. Greer of U.S. Immigration and Customs Enforcement’s Homeland Security Investigation’s (ICE-HSI) Dallas Field Office, Chief John Seto of the Ann Arbor, Michigan, Police Department, Sheriff Jerry L. Clayton of the Washentaw County, Michigan, Sheriff’s Department and Director Todd L. Mutchler of Canton, Michigan, Public Safety made the announcement.

“The armed robberies allegedly committed by this organized criminal group were horrific home invasions that spread fear through Asian and Indian communities across multiple states,” said Assistant Attorney General Caldwell. “This indictment is the first step in holding responsible those accused of carrying out armed robberies that were both life threatening and ethnically targeted.”

“As alleged in the indictment, these defendants used online research to target their victims from a distance, traveled to their homes, and then carried out the robberies while the victims were at home,” said U.S. Attorney McQuade. “The defendants either broke in or used a female decoy to knock, luring victims to open the door. Once the door was open, the robbers would charge inside with guns and threats of violence, round up all the adults and children into one room, and bind them with duct tape before ransacking the house and stealing valuables. We are grateful for the outstanding work of federal, state and local law enforcement in various jurisdictions to connect the dots and put this case together.”

“This multistate investigation serves as an example of the successful collaboration between federal, state and local law enforcement to bring justice to bear upon those who have wreaked havoc upon our neighborhoods and victimized families in their own homes,” said Special Agent in Charge Abbate. “Combating violent crime is among the highest of priorities for the FBI. There is nothing more important than protecting our communities and keeping law abiding citizens safe in their own homes. The FBI, along with our law enforcement partners, will maintain its resolve and continue the fight against violent criminal offenders.”

Chaka LeChar Castro, 40, Juan Olaya, 35, and Octavius Scott, 22, all of Houston, and Jakeyra Augustus, 21, of La Marque, Texas, are each charged with engaging in a RICO conspiracy, four counts of assault with a dangerous weapon in aid of racketeering, and four counts of use and carrying of a firearm in furtherance of a crime of violence. Rodney Granger, 19, and Johnisha Williams, 19, both of Houston, are each charged with engaging in a RICO conspiracy. All of the defendants are currently in custody.

According to the indictment, the defendants committed four armed home invasion robberies in the greater Ann Arbor area over the Thanksgiving weekend in 2014, as well as additional armed robberies in the greater Dallas area in early December 2014. The crews allegedly utilized a similar modus operandi in each of the robberies. According to the indictment, they typically used female decoys to knock on the victims’ doors and gain entry, or they merely forced entry themselves. Once inside, members of the robbery crew—disguised with bandanas and masks—allegedly brandished firearms to gain control of their victims, including children, and then forced them at gunpoint into a single room of the home. Some members of the crew were allegedly assigned to bind the victims with duct tape, or otherwise maintain control over them. At the same time, other members of the crew allegedly ransacked the homes in search of cash, jewelry and electronics.

According to allegations in the indictment, Castro was the leader of the enterprise. In that capacity, she allegedly coordinated with Olaya to generate lists of robbery targets by conducting research on the Internet, among other methods, to identify families of Asian and Indian ancestry. Castro then assigned crews to carry out the armed robberies of these targeted families. Olaya allegedly led the robberies themselves, and Scott, Augustus, Granger and Williams were allegedly members of the robbery crew.

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

The case was investigated by a collaboration of local, state and federal law enforcement in Michigan and Texas, including the FBI, ICE-HSI, Washtenaw County Sheriff’s Office, the Ann Arbor Police Department and the Canton Police Department. The case is being prosecuted by Trial Attorney Kelly Pearson of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Douglas C. Salzenstein of the Eastern District of Michigan.

A Detroit resident was sentenced yesterday in federal court to more than eight years in prison for his role in an armed robbery of an Iraqi diplomat and his wife, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division, Special Agent in Charge David R. Eberhardt, Diplomatic Security Service and Chief Michael Patton, West Bloomfield Police Department.

U.S. District Judge Paul D. Borman imposed sentence on James Frederick Dubose, 24, to a mandatory minimum sentence of 84months in prison for using a firearm during a crime of violence and a consecutive sentence of 20 months in prison for assault of a foreign official using a deadly weapon. Dubose had pleaded guilty to these two offenses in December. At sentencing, Dubose was also ordered to pay $4,150 in restitution to the victims.

According to the documents filed in this case, on November 11, 2012, the defendant and his co-defendant targeted the victims, an Iraqi diplomat and his wife, as they were shopping at the Meijer store in Southfield, Michigan. The defendants then followed the victims to their residence. Dubose and his co-defendant approached the victims inside the garage after the victims had exited their vehicle. Dubose held the victims at gunpoint, threatened to shoot them and stole their jewelry. Dubose and his co-defendant then ran from the garage and fled the scene. Dubose was arrested by Southfield Police on November 23, 2012, in possession of the same firearm used in the armed robbery.

The investigation of this case was conducted by the Federal Bureau of Investigation, the United States Department of State Diplomatic Security Service, and the West Bloomfield Police Department. The case was prosecuted by Assistant U.S. Attorneys Ronald W. Waterstreet and Cathleen M. Corken

Summer camps are legally required to make reasonable accommodations to accept children with disabilities, U.S. Attorney Barbara L. McQuade announced today.

With summer approaching, parents are beginning to think about sending their children to summer camps. To help ensure that children with disabilities receive the opportunity to attend summer camp, the U.S. Attorney’s Office recently sent the attached flyer to hundreds of summer camps located within the Eastern District of Michigan reminding them of their obligations under the Americans with Disabilities Act (“ADA”).

Under the ADA, summer camps, both private and those run by municipalities, must make reasonable modification to enable campers with disabilities to participate fully in all camp programs and activities. This generally means that children with disabilities are entitled to attend any camp or activity that non-disabled children attend, that camps must evaluate each child on an individual basis and that camps must train their staff in the requirements of the ADA. Camps are obligated to pay for the cost of any reasonable modifications necessary for disabled children to participate in camp activities, and parents should not be charged any additional fee beyond standard camp enrollment costs.

“Summer camps present tremendous growth opportunities for children to learn independence, try new activities and gain self-confidence,” McQuade said. “The law requires camps to provide equal opportunities to disabled children whose needs can be reasonably accommodated.”

Additional information about the ADA is available at www.ada.gov, or through contacting the U.S. Attorney’s Office Civil Rights Hotline at (313) 226-9151.

Eleven individuals from metro-Detroit have been charged with running identity theft and credit card fraud schemes, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Marlon Miller, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Jeffrey Frost, Special Agent in Charge of the U.S. Secret Service, Detroit Field Office and Chief Michael Patton, West Bloomfield Police Department, Southeast Michigan Financial Crimes Task Force.

Indicted for multiple counts of identity theft-related crimes were:

• Angela Denise Patton, 47, Belleville, MI
• Sam Oscar Patton, 47, Dearborn, MI
• Dontez Patton, 23, Woodhaven, MI
• Johnathon Weston, 24, Detroit, MI
• Charlie Smith, 47, Detroit, MI
• Thomas Turner, Sr., 47, Detroit, MI
• Aramona Coleman, 56, Southfield, MI
• Tynekwa Hill, 26, Pontiac, MI
• Jeffrey Morton, 41, Oak Park, MI
• Verdell Kennedy, 45, Detroit, MI
• Raymond Thomas, 40, Oak Park, MI

According to the indictment, Angela Patton, who worked for Blue Cross Blue Shield of Michigan (BCBSM), printed screen shots containing subscribers’ profiles, including Personal Identifying Information (PII), and gave them to other individuals who used that information to apply for credit in other people’s names and purchase merchandise in stores across the country.  Co-conspirators were arrested in Texas, Ohio and Michigan in possession of BCBSM screen shots coming from Angela Patton’s work computer as well as counterfeit identification cards and credit cards in the names of individual subscribers whose personal information was included in those screen shots.

Agents recovered additional screen shots that included personal information belonging to thousands of BCBSM and Blue Care Network subscribers while executing search warrants at co-conspirators’ homes in metropolitan Detroit. The information included individuals’ names, dates of birth and Social Security numbers.  Counterfeit and re-encoded credit cards and gifts cards were also recovered. The indictment alleges that three of the co-conspirators who used counterfeit credit cards at different major stores and warehouses fraudulently obtained more than $742,000 worth of merchandise from Sam’s Club alone.

United States Attorney McQuade, stated, "Criminals should know that while technology has made it easier than ever for them to commit identify fraud, technology is also making it easier for law enforcement to catch them. We are making enforcement of identity theft a high priority because this crime has become so pervasive and can be so damaging to victims.”

“An individual’s personal information has significant value on the black market, which is why the threat of data breaches and identity theft remain at an all-time high,” said Marlon Miller, HSI special agent in charge. “Over the last decade, we’ve seen a steady increase in crimes like this which is why HSI continues to prioritize and increase the quality and complexity of our investigative efforts to combat them.”

“As reflected by the indictments, United States Secret Service in Detroit—along with our federal, state and local partners—remains dedicated to the pursuit and apprehension of those responsible for these serious identity theft cases,” stated Jeff Frost, Special Agent in Charge of the Secret Service Detroit Field Office. “The continued, multi-jurisdictional collaboration between law enforcement resulted in the indictment of these individuals for their involvement in these crimes, and we will maintain our resolve as we continue to thoroughly investigate this case.”

"The entire West Bloomfield community is grateful for the great law enforcement partnership that has led to the continuing federal indictments related to these very serious crimes. As the investigation continues, this partnership remains devoted to bringing everyone that played a role in these incidents to justice," said Chief Michael Patton.

“Our company is determined to thoroughly investigate alleged fraud, and work hands-on with law enforcement to bring perpetrators of fraud and identity theft to justice,” said Gregory W. Anderson, vice president for Corporate and Financial investigations at Blue Cross Blue Shield of Michigan.  “We salute the task force for these arrests, and for their diligent efforts to help Blue Cross protect our members’ personal information and privacy.”

If policy holders notice any inappropriate activity on their Explanation of Benefits statements, BCBSM and BCN ask members to contact the companies’ Anti-Fraud Hotline at 800-482-3787, between 8:30 a.m. and 4:30 p.m. Monday through Friday.

The 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 Investigations 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.

A Hamtramck grocery store owner pleaded guilty to food stamp fraud, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Anthony Mohatt, U.S. Department of Agriculture – Office of Inspector General, Jarod J. Koopman, Internal Revenue Service Criminal Investigation and Colonel Kriste Kibbey Etue, Director, Michigan State Police.

Syed Ali, 42, owner of Modhubon Grocery, Pleaded guilty to conspiracy to defraud the United States and engaging in monetary transactions in criminally derived property.  Ali entered the guilty plea before U.S. District Court Judge Matthew F. Leitman.

According to court records, from October 2010 through July 2012, Ali and an employee of Modhubon conspired to defraud the U.S. Department of Agriculture Supplemental Nutrition Assistance Program (SNAP).  Ali and Modhubon, an authorized food stamp program retailer, engaged in the fraudulent practice of redeeming benefits for cash and ineligible items from SNAP recipients at a discounted rate.  Ali and his employee would then process the purchase of SNAP benefits through the Modhubon Grocery as purchases of eligible food items, obtaining the full dollar amount of the SNAP benefit from the U.S. Department of Agriculture.  

In December 2011, Ali cashed a check, drawn on the account of Modhubon Grocery in the amount of $12,000.00.  Ali took the cash from the account knowing that it was derived from the proceeds of the theft of SNAP benefits.

As part of his plea agreement, Ali has agreed to pay restitution to the U.S. Department of Agriculture in the amount of $1,844,690.95.

“Food stamp fraud victimizes both the recipients of the benefits and the taxpayers that fund the program.  We are pleased to collaborate with our law enforcement partners towards the common goal of combatting food stamp fraud”, said IRS Special Agent in Charge Koopman.

A sentencing hearing was set for June 25.   The maximum penalty is ten years' imprisonment and a $250,000 fine.

Three alleged members of the Latin Counts violent street gang were charged by a federal grand jury today with murder occurring in southwest Detroit, U.S. Attorney Barbara L. McQuade announced today.

Joining McQuade in the announcement were Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division and Chief James Craig, Detroit Police Department. 

The charges were added to a pending indictment charging nine other individuals with crimes including assault, murder, selling illegal narcotics and stolen firearms, breaking and entering into residential homes and businesses and robbery. 

The case was investigated by the Detroit One partnership of federal, state and local law enforcement agencies.

The new charges allege that multiple members of Latin Counts shot two men, killing one of the victims in August of 2013.

The gang allegedly operates in southwest Detroit, Lincoln Park and Ecorse.  According to the indictment, the gang actively uses violence to stake out its “turf” and intimidate rival gang members and the residents of southwest Detroit. 

Several incidents of violence were charged in a five-count indictment against seven Latin Count gang members in August.  The most serious of these incidents involved the killing of a man at the Big Apple Market in southwest Detroit on April 18, 2014.  According to that indictment, several Latin Count members jumped out of vehicles and assaulted the victim  until one member shot and killed him. 

Under the Detroit One Initiative, and through the lead efforts of the Detroit Police Department and the FBI Violent Crime Task Force, which consists of representatives of Homeland Security Investigations, Detroit Police Department, Lincoln Park Police Department, Michigan Department of Corrections and Michigan State Police, investigators were able to bring together separate probes into various members of this organization and its activities into one encompassing investigation.  Through this collaborative effort, law enforcement has been able to identify members of this organization and charge a total of fourteen individuals in multiple indictments in federal court. 

"The Detroit One partnership has dealt a strong blow to the Latin Counts," McQuade said. "Removing violent street gangs from our neighborhoods is important to improving public safety."

Among those charged today are:

• Jonathan Estrada, 25, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering;



• Jesus Rodriguez, 21, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering;



• Angel Rodriguez, 21, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering; and



• Kyle Voltz, 25, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering.

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

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 officials are striving to maximize their ability to identify and arrest the individuals and groups initiating the violence in Detroit.

A Detroit man was arraigned today on charges of tax evasion and bankruptcy fraud, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division.

Steven Pittman was charged with one count of federal income tax evasion, two counts of filing false tax returns and seven counts of bankruptcy fraud.

According to the indictment, from 2003 through 2006, Pittman worked for Direct Internet Consulting as a contract salesman providing internet cable services to the Detroit Public School district (DPS), the Detroit Medical Center and others.  In mid-2007, Pittman filed Forms 1040, U.S. Individual Income Tax returns for the years 2003 and 2006, reporting tax due and owing of approximately $70,000.  Pittman did not include payment of this tax liability with the returns.

When the Internal Revenue Service initiated collection efforts in early 2008, Pittman began to take steps to evade the payment of his outstanding federal tax liability.  In April 2008, Pittman filed documents with the State of Michigan, forming an entity named Metrotech Solution Services, LLC (Metrotech), with the signature of “Rodman Edmons” as the Organizer and Resident Agent.  Around the same time, Pittman also opened a bank account in the name of Metrotech, and over the course of that year deposited more than $150,000 into the account.  Most of the deposits were derived from payments made by the DPS for work performed by Metrotech to install security equipment.  In September 2009, Pittman, signed a contract under an alias name with DPS to install and maintain security equipment.  Pittman provided services for a number of months to DPS under the security equipment contract and was paid more than $700,000.

In September 2011, Pittman filed a voluntary petition in bankruptcy with the U.S. Bankruptcy Court for the Eastern Judicial District of Michigan.  Pittman signed the petition and the Statement of Financial Affairs under penalty of perjury declaring that all of his statements were true and correct.  However, Pittman knew that the statements were false.   Pittman stated that he owed only $532.44 to the IRS; he failed to disclose the use of an alias; he failed to properly report income he earned in 2009 and 2010 and he failed to declare his interest in the bank accounts and businesses he controlled.

In October 2011, Pittman filed Forms 1040, Individual Income Tax returns for the years 2009 and 2010.  Each of these returns were false; Pittman listed himself as an employee of Metrotech, failed to disclose that he was the owner of the company, and failed to report any of the income he earned from the DPS security equipment contract. 

“Pittman's blatant abuse of the bankruptcy and tax system was motivated by greed.  Investigating and seeking convictions for these violations will hopefully reinforce to the public that no one is above the law”, said Special Agent in Charge Jarod J. Koopman.

An indictment is merely an accusation and is not evidence of guilt.  The defendant is presumed innocent unless and until proven guilty in a court of law.

A Dearborn woman pleaded guilty to tax evasion, U.S. Attorney Barbara L. McQuade announced today. 

McQuade was joined in the announcement by Special Agent in Charge Jarod J. Koopman, Internal Revenue Service Criminal Investigation and Acting Chief Patrol Agent R. Alan Booth, United States Border Patrol Detroit Sector.

Zena Karkaba, 33, entered her guilty plea before U.S. District Judge Judith E. Levy.

According to court records, during 2009 through 2012, Karkaba received monetary gifts from an individual, who provided her with personal checks in amounts ranging from $1,000 to $10,000.  In preparing many of these checks, the individual wrote the numeric value on the checks and signed them, leaving the date, payee  and written amount blank.

During 2012, Karkaba received at least 41 checks totaling $160,100, which she altered by changing the numeric amount on the check, increasing the total of the checks to $278,100.  On these checks, Karkaba filled in the date, payee and the corresponding altered written amount.  Karkaba went to the individual’s issuing bank and endorsed these checks, receiving the value of the altered checks in cash.  By altering the checks, Karkaba received $118,000 above the original check amount.

Karkaba filed an individual U.S. Income Tax return, Form 1040, with the Internal Revenue Service for the 2012 tax year claiming the married filing joint filing status and reporting zero taxable income and no tax due and owing.  However, Karkaba knew at the time she filed the return that it was false and fraudulent.  During her plea hearing, Karkaba admitted that her true filing status for the 2012 tax year was single; that her taxable income for the year was $108,250.00 and that she owed income tax of $23,771.00.

“Income from any source, whether earned legally or stolen, is subject to income tax.   By her guilty plea today, Karkaba is acknowledging and accepting the consequences of her criminal actions,” said Special Agent in Charge Jarod J. Koopman.

“We are proud to have played a part in bringing this case to resolution,” said Chief Patrol Agent Booth. “This result is a testament to the partnership between law enforcement agencies along our shared border.”

A sentencing hearing was set for June 24.   The maximum penalty for tax evasion is five years imprisonment; three years supervised release and a $100,000 fine.

Seventeen individuals from the metro-Detroit area have been charged in a series of smash and grab robberies of jewelry stores across the United States, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Field Office, along with partners of the FBI Oakland County Gang and Violent Crime Task Force which include, Sheriff Michael J. Bouchard, Oakland County Sheriff’s Office; Director Rebecca Adducci, U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations, Detroit Field Office; Commander Monica Yesh, Michigan State Police; Chief Eric Hawkins, Southfield Police Department; Chief Geof Gaudard, Bloomfield Township Police Department; Acting Chief Jeff James, Waterford Police Department; Chief Corrigan O’Donahue, Royal Oak Police Department; Assistant Deputy Director Beverly Smith, Michigan Department of Corrections; and other local police agencies.

Three separate federal indictments filed during the past month charge the defendants with conspiracy to interfere with commerce by robbery of stores located in New York, Maryland, North Carolina, Mississippi, Nebraska and Connecticut.

These indictments follow a series of investigations nationally by various state, local and federal law enforcement agencies involving approximately 40 smash and grab robberies in 2014. In Michigan alone, between 2012 and 2014, approximately 25 smash and grab jewelry store robberies were committed.  FBI agents and other state and local law enforcement officers continue to work collaboratively to identify and criminally charge all of the individuals responsible for these robberies.

According to the indictments, crews from the metro-Detroit area planned and executed six robberies. The crews traveled across the country to jewelry stores that sell Rolex watches and other jewelry.  Several members of the crew entered the jewelry stores while they were open for business, smashed the Rolex display cases with sledge hammers and fled the store with Rolex watches, valued at hundreds of thousands of dollars. The robbers escaped into waiting, stolen vehicles and returned to Michigan with the stolen watches.

The indicted defendants are:

• Elijah McKinney, 24, of Detroit,
• Darius Ellis, 30, of Detroit,
• Kordaryl Cross, 25, of Westland,
• Latrina Williams, 38, of Detroit,
• Lorenzo Daniel Terry, 21, of Detroit,
• Anthony Jerome Browner, 24,of Farmington Hills,
• DaJuan Cortez Marcellus, 24, of Detroit,
• Brandon Phillip Wilkerson, 24, of Detroit,
• Marquis Wade Cheatham, 24, of Detroit,
• Darien Savon Thompson, 21, of Detroit,
• Britnei Rodgers, 29, of Detroit,
• Ernie Thomas Evans, 25, of Detroit,
• Darrick Adams, 29, of Detroit,
• Brandon Mayes, 20, of Detroit,
• Bria Jackson, 22, of Shelby Township,
• Bria Stanford, 21, of Belleville, and
• Shaquita Wyatt, 24, of Detroit.

“These crimes, committed during business hours, are serious because of the danger and trauma they create for the victim customers and sales clerks,” McQuade said.  “These defendants travelled around the country to commit their crimes in hopes of dividing and conquering witnesses and investigators, but with the collaboration of law enforcement agencies across the country, those schemes have been thwarted.”

Special Agent in Charge Abbate stated, "The defendants in this case intentionally targeted jewelry stores across the country, exposing the public to danger and attempting to thwart the efforts of law enforcement. Together, law enforcement at every level, through shared intelligence, resources, and evidence, brought their crime spree to a halt. The FBI stands, along with its partners, both local and national, ready to bring other criminal smash and grab robbery crews to justice.”

Sheriff Bouchard stated, “Clearly as evidenced by this case, criminals do not recognize jurisdictional boundaries. Therefore, it is imperative for all agencies to work together to defeat complex criminal activity. It's a pleasure for us to have the Gang and Violent Crime Task Force work out of our Pontiac substation and we are proud of the relationships and success that comes from this teamwork.”

Chief Hawkins stated, “This is another great example of how law enforcement agencies at different levels of government can work together to disrupt complex criminal enterprises and take dangerous individuals off the streets.  I commend the U.S. Attorney’s Office, the Federal Bureau of Investigation, and all of the officers involved for their hard work on this case.”

John Kennedy, head of the Jewelers’ Security Alliance (JSA) that represents the interests of 21,000 retail jewelry stores stated, “It’s very difficult for a local agency to address the problem by itself, but when the FBI—with its national and international scope—assists, the overall law enforcement effort is more effective.”  The JSA also plays a key role in these investigations by offering law enforcement agencies access to its database of jewelry and gem thefts.

Jewelers Mutual Insurance Company and an industry consortium are offering a combined reward of up to $45,000 for information leading to the arrest of other individuals responsible for these robberies.

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

This case is being investigated by the FBI Oakland County Gang and Violent Crime Task Force which is comprised of special agents and officers of the Federal Bureau of Investigation; U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations; Oakland County Sheriff’s Office; Michigan State Police; Southfield Police Department; Bloomfield Township Police Department; Royal Oak Police Department; Waterford Police Department and the Michigan Department of Corrections.

The case is being prosecuted by Assistant United States Attorneys Douglas Salzenstein and Jerome Gorgon.

Two Detroit store managers pleaded guilty yesterday to charges of failing to maintain an effective anti-money laundering program, U.S. Attorney Barbara L. McQuade announced today.

United States Attorney McQuade was joined in the announcement by Acting Special Agent in Charge Jarod Koopman, IRS Criminal Investigation.

John Miri, 55, and Wisam Daman, 38, entered their guilty pleas before U.S. District Court Judge Stephen J. Murphy, III.

According to court records, Daman managed and operated Big Apple Fruit Market on McGraw Street, and Miri managed and operated Junction Party Store on Junction Street, both of which are located on the southwest side of Detroit.  Each store was registered as a Money Services Business (MSB) with the State of Michigan.  As MSB’s, the Big Apple Fruit Market and Junction Party Store cashed checks for their customers in amounts greater than $1,000, for which they would charge a fee.  Businesses that cash checks in this manner qualify as a financial institution under the Bank Secrecy Act (BSA) which obligates them to file Currency Transaction Reports (CTRs) with the Financial Crimes Enforcement Network.  CTRs must be filed by the financial institution when a customer conducts a transaction involving more than $10,000.  As managers/operators of the businesses, Daman and Miri were required to develop, implement and maintain effective anti-money laundering programs for the stores.  The BSA regulations also require that financial institutions treat multiple currency transactions, totaling more than $10,000, as a single transaction and file a CTR if the financial institution has knowledge that the multiple transactions were made by, or on behalf of, a single person.

From late 2011 and continuing through April 2012, Miri and Daman cashed federal income tax refund checks, issued by the U.S. Treasury Department, that were provided to them by Juan Carlos Pena-Lora.  These checks were issued to alleged taxpayers with addresses in eastern states, such as New York and New Jersey.  Miri cashed approximately 751 income tax refund checks totaling $5,427,903 for Pena-Lora.  Daman cashed approximately 1,268 income tax refund checks totaling $9,311,883 for Pena-Lora.  Miri and Daman provided Pena-Lora with the cash from the refund checks, less a fee that they charged for cashing the checks. The fee that Miri and Daman charged Pena-Lora was based on a percentage of the total checks they cashed.  The U.S. Treasury checks had actually been generated through the filing of false tax returns using the names and social security numbers of Puerto Rican nationals whose identity information had been stolen.  

Payments in cash to Pena-Lora by Miri and Daman exceeded $10,000 on the days that they cashed the checks for him.  Miri and Daman failed to file CTRs for some of the cash payments to Pena-Lora violating the requirement to implement and maintain an effective anti-money laundering program.

Failure to maintain an effective anti-money laundering program is punishable by a maximum penalty of 5 years imprisonment and/or a fine of $250,000.  A sentencing date will be set by the court.

Jesuit Priest Richard James Kurtz, 69, formerly of Clarkston, Michigan, pleaded guilty today to transportation of child pornography, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division.

Kurtz admitted that in 2011 he transported child pornography from his home in Clarkston, Michigan to a new residence in Chicago, Illinois.  Just after his move to Chicago, Kurtz was arrested for “sexual assault on a child by one in a position of trust” based on an arrest warrant issued out of Douglas County, Colorado.   After Kurtz’s arrest in Chicago, two Jesuit priests discovered evidence of child pornography crimes among Kurtz’s belongings in Chicago, as well at Kurtz’s former residence in Clarkston, Michigan.  The Jesuits provided that evidence to the FBI.  At the plea hearing today, Kurtz acknowledged that his collection of child pornography exceeded 2,300 images.

Beyond his transportation of child pornography, court records indicated that Kurtz surreptitiously videotaped UDJHS hockey players after games during the 1998-1999 hockey season.  Kurtz was a teacher of chemistry at the UDJHS from 1970-1973, 1978-1983, and from September 1984-May 2001.

Kurtz entered into a plea agreement that calls for a sentence of between 10-14 years in custody.  District Judge Mark A. Goldsmith accepted Kurtz’s guilty plea, and took the proposed plea agreement under advisement.   Sentencing is set for July 14, 2015.

McQuade  praised  the  work  of  the  FBI  agents  for  their  professionalism  and dedication in their thorough investigation of these cases.

Assistant United States Attorneys Kevin M. Mulcahy is prosecuting this case for the United States.

A Detroit scrap metal and iron recycling company has agreed to pay a $25,000 penalty and implement a compliance program to resolve allegations that it violated the Clean Air Act, U.S. Attorney Barbara L. McQuade announced today.

Joining McQuade in the announcement was Susan Hedman, Administrator of Region 5 of the Environmental Protection Agency.

The settlement resolves a lawsuit brought by the U.S. Attorney’s Office and the Environmental Protection Agency against Basic Recycling, alleging that its facility on Fulton Avenue in Detroit was releasing harmful chlorofluorocarbons (CFCs) into the environment.  CFCs cause ozone depletion and have harmful effects on human health. 

Under the settlement, Basic Recycling agreed to implement a Clean Air Act compliance program at its facility to eliminate the harmful release of CFCs. 

The settlement requires Basic Recycling to pay a civil penalty of $25,000 and comply with all environmental regulations in accepting and processing small appliances which present a risk of harmful CFC emissions.

“This settlement will protect the health of Detroit residents and ensure cleaner air for future generations,” McQuade said.

“This settlement will help to preserve the earth’s ozone layer, which protects us from harmful radiation,” EPA Region 5 Administrator Hedman said.  “Basic Recycling will also take steps to improve air quality in a community that has been disproportionately impacted by environmental contamination.”

While Basic Recycling did not admit any of the violations alleged by the government, it has agreed to all compliance provisions.  

WASHINGTON – After a four-month trial, a federal jury in the Eastern District of Michigan convicted six members of the Devils Diciples Motorcycle Gang today, including the national president, national vice president and national warlord, for their participation in various criminal acts, including violent crimes in aid of racketeering, methamphetamine production and trafficking, illegal firearms offenses, obstruction of justice, illegal gambling and other federal offenses. 

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 Paul M. Abbate of the FBI’s Detroit Field Office made the announcement.

“For too many years the Devils Diciples spread fear and violence throughout Michigan and the country,” said Assistant Attorney General Caldwell.  “This outlaw motorcycle gang thrived on intimidation and its ability to avoid prosecution – but no longer.  Through these convictions, we have decimated the gang and its leadership and helped secure justice for the communities they harmed.”

"These defendants were responsible for violence and trafficking in methamphetamine in Macomb County and across the country,” said U.S. Attorney McQuade.  “We are grateful for the work of the investigating agencies and the jury to bring them to justice."

“The defendants in this case perpetrated a broad range of violent criminal activities in support of their illegal enterprise,” said Special Agent in Charge Abbate.  “Today’s convictions, which targeted the leadership of this criminal organization, reflect the hard work and dedication of federal, state and local law enforcement, the Department of Justice Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan.”

Devils Diciples national President Jeff Garvin Smith, aka “Fat Dog,” 60, of Mt. Clemens, Michigan; National Vice President Paul Anthony Darrah, aka “Pauli,” 50, of Macomb Township, Michigan; and National Warlord Cary Dale Vandiver, aka “Gun Control,” 56, of Sand Mountain, Alabama, were all found guilty by a jury of engaging in a RICO conspiracy, methamphetamine trafficking conspiracy, conspiracy to obstruct justice, violent crimes in aid of racketeering and various substantive charges.  Another prominent leader, Vincent John Witort, aka “Holiday,” 64, of Fontana, California, and a methamphetamine cook, Patrick Michael McKeoun, aka “Magoo,” 60, of Birmingham, Alabama, were found guilty of engaging in a RICO conspiracy and methamphetamine trafficking conspiracy.  David Randy Drozdowski, aka “D,” 38 of Fair Haven, Michigan, was found guilty by a jury of committing violent crimes in aid of racketeering and being a felon in possession of a firearm.  Scott William Sutherland, aka “Scotty Z,” 49, of Redford, Michigan, was acquitted by the jury of various charges, but previously pleaded guilty to being a felon in possession of a firearm.  Sentencing hearings will be scheduled at a later date before U.S. District Judge Robert H. Cleland of the Eastern District of Michigan.

According to evidence presented at trial, the Devils Diciples (which is intentionally misspelled) is a motorcycle gang with its national headquarters in Clinton Township, Michigan.  The Devils Diciples operated regional chapters in cities throughout Michigan, Alabama, Arizona, California, Illinois, Indiana, Ohio and elsewhere, and engaged in criminal activities for financial gain.

Evidence presented at trial demonstrated that membership in the Devils Diciples is based in part on successful completion of a probationary period, followed by formal approval by one or more members or leaders.  Members, commonly referred to as “full patched members,” are required to own Harley Davidson motorcycles and are required to follow orders from the gang’s leadership, including orders to assault, threaten and intimidate others, to transport and distribute drugs, to lie to law enforcement and to hide or destroy evidence.  Members are also required to follow the Devils Diciples by-laws and attend regular meetings referred to as “church.”

According to evidence presented at trial, Smith was the National President and Darrah was the National Vice President of the gang.  In those roles, they were responsible for overall management of the activities of the other Devils Diciples members and chapters, including giving final approval to any activity generally affecting the gang as a whole.  Vandiver was the National Warlord – or enforcer – of the gang.  With other gang members, the leaders also participated directly in criminal activities both for financial gain on behalf of the Devils Diciples, and to protect the gang and its members.

Specifically, the evidence showed that in late 2007, Smith and Darrah were involved in the shooting of a Devils Diciples member who failed to abide by the gang’s rules.  And, in August 2008, Smith violently assaulted the girlfriend of another Devils Diciples member because he believed she disrespected him and the gang. 

Additionally, the evidence showed that Smith possessed state and federal law enforcement manuals regarding outlaw motorcycle gangs marked “For Official Use Only” and “Law Enforcement Sensitive,” and numerous documents related to criminal matters involving members of the Devils Diciples, including police reports, search warrants, affidavits, indictments and witness interview transcripts.  The evidence showed that the documents were used for the purposes of counter-surveillance and to identify suspected informants. 

The other defendants were also full patched members of the gang, who committed several other acts of violence.

For example, in August 2003, Witort and other gang members robbed, kidnapped and attempted to murder members of the gang’s Arizona Chapter for violating the gang’s rules.  Inside the Arizona clubhouse, the victims were bound with duct tape and zip ties, and severely beaten with firearms, tasers, knives, and other weapons.  The victims were then loaded into the bed of a pick-up truck, driven out into the desert, dumped into ravines, and left to die.  The evidence showed that Witort and Smith helped to plan the beatings and that Smith later congratulated one of the participants, telling him in a letter that the Devils Diciples were “all proud of you.”

Additionally, the evidence demonstrated that in 2012, at a bar in Chesterfield Township, Michigan, Drozdowski and another Devils Diciples member assaulted a perceived rival motorcycle gang member for being present in Devils Diciples territory.  The victim was knocked unconscious and suffered multiple fractures to his face and jaw.  Drozdowski and the other Devils Diciples member then ripped the leather vest off of the unconscious victim. 

In addition to the defendants convicted today, 21 members and associates of the Devil’s Diciples have been pleaded guilty to various crimes as result of this investigation.  The investigation further resulted in the seizure of more than 60 firearms and more than 6,000 rounds of ammunition and the dismantling of eight methamphetamine manufacturing laboratories across the country.                                                          

The case was investigated by the FBI, the Michigan State Police, the Macomb County Sheriff’s Office and the County of Macomb Enforcement Team (COMET), with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the St. Clair County Sheriff’s Office.  The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Two physicians who practiced in Warren pleaded guilty today to writing prescriptions for oxycodone without medical justification, and one also pleaded guilty to health care fraud, U.S. Attorney Barbara L. McQuade announced today. 

McQuade was joined in the announcement by DEA Special Agent in Charge Joseph P. Reagan, Special Agent in Charge Lamont Pugh III of the U.S. Department of HHS Office of Inspector General’s Chicago Regional Office, and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office.

During a hearing before U.S. District Judge Nancy Edmunds, Hussein “Sam” Awada, 45, of Royal Oak, admitted that from late 2010 through early 2012, he conspired with James Lyons, a patient “marketer,” to write prescriptions for oxycodone and Roxicodone in the names of people who were brought to him by Lyons, for no medical purpose. Lyons has admitted that he paid Awada for those prescriptions, then bought the pills from the “patients” and re-sold them to street dealers.

Awada also admitted that during this same time he billed Medicare, Medicaid, and Blue Cross Blue Shield for numerous medical procedures that were not medically justified. Awada’s plea agreement acknowledged that he prescribed more than 80,000 oxycodone and Roxicodone as part of his conspiracy with Lyons, and defrauded Medicare, Medicaid, and Blue Cross of about $2.3 million.

Lyons was recently sentenced to 48 months in custody for his part in this scheme.

Luis Collazo, 55, of Farmington Hills, admitted that in late 2012 he provided prescriptions to patients for controlled substance medications such as oxycodone although he knew that the patients had no medical need for the medications.

McQuade said, "More people die from overdoses of prescription drugs in America than from overdoses of all other drugs combined.  We hope that prosecuting the doctors who are putting these drugs on the streets will deter others from contributing to this epidemic.”                

DEA Special Agent in Charge Reagan stated, “The DEA has made it a priority to address the dangerous practice of illegally diverting prescription medications.  Prescription drugs, such as oxycodone and Roxicodone, are controlled substances for a very good reason.  If they are abused, they can lead to addiction, illness, or even death.  As physicians, Mr. Awada  and Mr. Collazo violated the public trust by illegally diverting prescription drugs on to the streets.  These guilty pleas make it clear that the DEA, and our partners in law enforcement, will continue to utilize our investigative techniques to bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”  

“Not only did these physicians practice medicine, they practiced drug dealing and fraud. They put the public’s health and safety at risk and stole vital taxpayer dollars”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The OIG will continue to work with our law enforcement partners to root out individuals who choose to abandon their professional obligations and commit criminal acts that jeopardize the public’s well-being and essential health care programs”.

Based on his guilty pleas Hussein Awada is facing a maximum of thirty years in prison and a fine of up to $1,250,000. Luis Collazo is facing a maximum of twenty years in prison and a $1 million fine. Both will also lose their privilege to write controlled substance prescriptions.

A Macomb County business owner pleaded guilty yesterday to intentionally setting a fire at his commercial laundry facility to collect on an insurance policy, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Steven Bogdalek, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearm, and Explosives (ATF).

Alexandros Yfantidis, 74, of Clinton Township, admitted in court that on May 4, 2011, he intentionally burned down the building housing his commercial laundry service, which he operated as Best Textile Services.  In pleading guilty to one count of mail fraud, Yfantidis admitted making a fraudulent claim to his insurance company in relation to fire.  His agreement with the government calls for restitution to reimburse victims whose homes and/or personal properties were damaged by the fire explosion.

U.S. District Judge Stephen J. Murphy, III, set Yfantidis’s sentencing for June 5.

“Committing any fraud scheme harms victims, but intentionally setting a fire creates a danger to public safety that far exceeds the financial loss,” McQuade said. McQuade thanked the agents of ATF for their investigation of the case.  She also thanked the Warren Fire Department for assisting in the investigation.  The case is being prosecuted by Assistant U.S. Attorney Abed Hammoud.  

“As we know arson for profit crimes have many victims.  Mr. Yfantidis chose to break the law for his personal gain by putting community and fire fighters at significant risk”, said ATF Special Agent in Charge Steven Bogdalek. “I would like to thank the ATF Special Agents, the Warren Fire Department and the United States Attorney’s office for their hard work and dedication in this investigation.”

A Jackson tax preparer was found guilty yesterday of 20 counts of filing false tax returns today by a federal jury after a week-long trial, U.S. Attorney Barbara L. McQuade announced today. 

McQuade was joined in the announcement by Special Agent in Charge Jarod Koopman, Internal Revenue Service Criminal Investigation.

Richard Alan Williams was found guilty of three counts of subscribing and filing false personal income tax returns for himself and 17 counts of assisting in the preparation and filing of false tax returns for his customers.  The case was tried before U.S. District Judge Stephen J. Murphy, III.

At trial, witness testimony and exhibits established that Williams owned and operated Imperial Tax Service on Prospect Street in Jackson, and prepared and filed false tax returns for individuals for the 2004, 2006 and 2007 tax years.  These returns claimed false business expenses or losses.  The falsified items caused the taxpayers’ refunds to be larger than what they were entitled to by either reducing their taxable income with phony business expense losses or increasing the Earned Income Credit they were entitled to receive by adding the right amount of phony business income.

Additionally, Williams declared that his own income was only $1 in 2004; $2 in 2006; and $10 in 2007 when, in fact, he earned substantial fees for preparing tax returns during each of those years.   The taxpayers who testified that Williams had prepared their returns, but had added phony business expenses or income, were unaware of the false items Williams had included to increase their refunds.  However, a number of them have since been audited by the IRS and have been directed to pay back the excess refunds they received for those years along with penalties and interest.

A sentencing hearing was set for June 5.   The maximum penalty for each offense of conviction is up to three years imprisonment, a $250,000 fine, and 1 year of supervised release.

"IRS Criminal Investigation focuses on protecting revenue by identifying, investigating and prosecuting abusive return preparers.  This case accentuates the importance for taxpayers to carefully select a tax return preparer,” said Special Agent in Charge Koopman.

The case was investigated by Special Agents of the IRS Criminal Investigations and prosecuted by Assistant U.S. Attorneys Christopher Varner and Ross I. MacKenzie.

United States Attorney Barbara L. McQuade announced today the completion of the federal corruption investigation of Wayne County government.  Joining McQuade in the announcement was Paul M. Abbate, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation. 

The investigation, which began three years ago, resulted in the convictions of five individuals, including Wayne County’s Chief Information Officer and an Assistant Wayne County Executive who served as the Director of HealthChoice of Michigan.  The United States will not seek additional charges in connection with the investigation.

“I would like to thank and commend the officials and staff of the Wayne County Executive and the Wayne County Corporation Counsel for their cooperation during this investigation,” said McQuade.  “Their assistance and openness allowed federal investigators to carefully review and assess a number of complex issues regarding the operation of county government.”

An indictment was unsealed today charging a former court officer for the 36th District Court in Detroit with extortion, mail fraud and theft, announced U.S. Attorney Barbara L. McQuade. 

Joining in the announcement was Michigan Attorney General Bill Schuette and Paul M. Abbate, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.

Marlon Cleveland, 33, of Westland, was charged with misusing his position as a Court Officer for the 36th District Court to steal and extort thousands of dollars from defendants in civil cases over the course of more than a year.  The crimes are alleged to have occurred in 2013 and 2014.

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

“We must weed out corruption at all levels of government to ensure the public is served,” said Michigan Attorney General Bill Schuette.  “Nobody will get a free pass when they break the law.”

  “Preventing the abuse of power to conduct criminal activity remains among the highest priorities of the FBI,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “FBI Detroit, in concert with the Michigan Attorney General’s Public Integrity Unit and the U.S. Attorney's Office, will continue to investigate these types of crimes and bring to justice those who abuse the public’s trust.”

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

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

A Dearborn pharmacist was sentenced yesterday to six years in prison for conspiracy to illegally distribute prescription pills and money laundering, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Jarod J. Koopman, Internal Revenue Service Criminal Investigation and Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

In March 2013, Waleed Yaghmour was charged with 43 others in a health care fraud and drug distribution scheme.  The indictment alleged that Sardar Ashrafkhan, Deepak Kumar, John Check and David Vezzossi, who owned home health agencies,  provided kickbacks, bribes and other illegal benefits to physicians in exchange for prescriptions for patients with Medicare, Medicaid and private insurance.  The prescriptions were for controlled substances including oxycodone (Oxycontin), hydrocodone (Vicodin) and alprazolam (Xanax).  Patient recruiters or “marketers” would pay kickbacks and bribes to patients in exchange for the patients’ permitting the pharmacies and physicians to bill their insurers for medications and services that were medically unnecessary and/or never provided.  During the conspiracy, prescriptions were presented to the Sav-Mart Pharmacy in Detroit, which was owned and operated by Yaghmour, as well as several other pharmacies.

In his guilty plea, Yaghmour, 48, admitted that he knew that the controlled substances he dispensed for these fraudulent prescriptions had no legitimate medical purposes.  Yaghmour has admitted to dispensing at least 1,500 oxycodone 100,000 hydrocodone and 100,000 alprazolam doses as part of the scheme.

Yaghmour received nearly $2 million in cash payments for illegally dispensing the controlled substances.  Yaghmour has agreed to forfeit $973,177.87 that was seized from an account that he maintained at HSBC Bank Middle East Limited, Ramallah, Palestine.

“More people die in America every year from prescription drug overdoses than from overdoses of all other drugs combined,” McQuade said.  “In addition, prescription drug addiction has led to a resurgence in heroin use.  Pharmacists who divert prescription drugs to the street market are contributing to this epidemic, and we are focusing our enforcement efforts on stopping them.”

"We entrust physicians and healthcare providers with monitoring, caring, and treating members of our community," said Miller. "When that trust is violated, the integrity of the system is compromised and lives are put at risk. HSI will continue to partner with the law enforcement community to ensure that unscrupulous physicians and healthcare providers are brought to justice"

“The public rightfully expects that doctors and pharmacists will uphold the oath that they take to “do no harm.”  When they abuse their professional license for financial gain they put the public at risk, in this case by dispensing highly addictive controlled substances. IRS Criminal Investigation's unique role in these investigations is to follow the money trail in order to disrupt these criminal drug organizations that diminish the quality of life in our communities” said Jarod J. Koopman, Special Agent in Charge, IRS Criminal Investigation.

Many of the defendants charged in the indictment have been convicted by pleas and have been sentenced already.  Others are scheduled to be sentenced in the near future.

 GRAND RAPIDS, MICHIGAN – Riley Patrick Lively, 27, of Las Vegas, Nevada, was convicted Wednesday afternoon of child sexual exploitation after a two-day jury trial in federal court in Grand Rapids. The crime took place in Kalamazoo in 2009. Lively faces a minimum of 15 years and a maximum of 30 years in prison.

In April 2009, while visiting Robert Norwood-Charlier, in Kalamazoo, Michigan, Lively sexually assaulted a nine-year-old boy. Norwood-Charlier openly took pictures of the assault. The FBI discovered the evidence of Riley’s sexual assault in the course of investigating Norwood-Charlier for his own sexual exploitation of children. Norwood-Charlier is currently serving a 300-month federal sentence for producing and distributing child pornography. Lively was arrested in Las Vegas in February 2014 and has been held in custody since his arrest. Despite claims that he was the victim of “mind control” and that the pictures were fakes, the jury found Lively guilty after less than an hour of deliberations.

Lively’s sentencing will be before U.S. District Judge Robert J. Jonker on a date to be scheduled.

The investigation was conducted by the FBI. Assistant U.S. Attorneys Tessa K. Hessmiller and Jeanne F. Long prosecuted the case.

This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.

Two former contractors with the Detroit Public Library were sentenced late yesterday afternoon on charges of bribery of a public official, United States Attorney Barbara L. McQuade announced.

Joining McQuade in the announcement were Paul M. Abbate, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Jarod Koopman, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.

James Henley, 44, of Detroit, and Ricardo Hearn, 32, of Royal Oak, were sentenced to 27 months and 28 months, respectively, by United States District Judge George Caram Steeh.  Each man also was ordered to pay $750,000 in restitution to the Detroit Public Library for losses suffered by the library as a result of the crimes.

According to court records, Henley and Hearn paid former Detroit Public Library Chief Administrative Officer Timothy Cromer a total of $1.4 million in kickbacks in return for contracts for information technology services with the Detroit Public Library during the period 2007 to 2010. After being confronted by federal law enforcement officials, Henley and Hearn both cooperated in the prosecution of Cromer. On September 16, 2014, Cromer was sentenced to 10 years in prison for his role in the bribery conspiracy, and ordered to pay $3,913,890.42 in restitution to the library.

Henley owned a company called Core Consulting & Professional Services.  Cromer approved a proposal submitted by Core Consulting to provide information technology work, and approved various extensions and change orders to the contract.  Ultimately, the Library paid Core Consulting almost $2 million under the contract, and Henley secretly paid kickbacks to Cromer totaling over $650,000 during the period 2007 to 2008.  Henley also pleaded guilty to failing to file tax returns for the year 2007.  Hearn, who owned Cubemation LLC, paid Cromer kickbacks totaling about $800,000 in exchange for Cromer approving no-bid professional services contracts for Hearn’s company to perform information technology services for the library from 2008 until 2010.  Cubemation received about $3.2 million in payments from the Detroit Public Library

"This case demonstrates that not just bribe takers, but bribe payers will be held accountable in appropriate cases.  Everyone who corrupts the system should be brought to justice," said United States Attorney McQuade.

 “All those involved in the misappropriation of government funds for their own selfish purposes violate federal law and betray the trust of the citizens they purport to serve,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, and its local, state and federal law enforcement partners, remain vigilant in the fight against public corruption, and committed to bringing to justice those who abuse the public’s trust.”

“It’s disappointing when the public trust is abandoned by the actions of a few,” said IRS Acting Special Agent in Charge Jarod Koopman.  “IRS-Criminal Investigation will continue to identify and help prosecute those that attempt to deceive the public, abuse the system and use their position for their own personal gain. These sentences will hopefully send a message to others that not only will they be held to the highest standard, but they will be punished equally.”

A Livonia woman was sentenced to 12 months in federal prison for embezzlement of labor organization assets, U.S. Attorney Barbara L. McQuade announced today. 

McQuade was joined in the announcement by Ian Burg, Director of the Detroit-Milwaukee District Office of the U.S. Department of Labor's Office of Labor-Management Standards, and James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the Labor Department's Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.

Ann Marie Shaffer, 57, was sentenced by United States District Judge Stephen J. Murphy.  Judge Murphy further ordered Shaffer to pay $340,267.73 in restitution to the International Brotherhood of Electrical Workers (IBEW) Local 58 in Detroit, and to serve two years of supervised release following her discharge from prison. 

Shaffer pleaded guilty to one count of theft of union funds on August 7, 2014.  As part of her plea agreement, Shaffer admitted that between September 2008 and September 2010, while employed as a dues clerk, she embezzled $101,059.56 of IBEW Local 58 funds by engaging in a check substitution scheme.  She received dues remittance checks from employers, set them aside without properly recording them, and when an equal amount of cash was received, embezzled the cash by replacing it with the unrecorded checks. 

“Union officials hold a position of trust, and will be held accountable when they cheat the workers they serve,” McQuade said

The Maple Theater in Bloomfield Township has agreed to improve physical accessibility for people with disabilities at the theater, U.S. Attorney Barbara L. McQuade announced today. 

The settlement agreement resolves an investigation under the Americans with Disabilities Act, alleging that the theater’s 2012 renovations allowed insufficient room for wheelchair seating.  The complaint was filed by a Bloomfield Hills moviegoer with a mobility disability. 

Under the agreement, the Maple Theater agreed to construct a new accessible unisex bathroom, relocate some of the existing accessible seating, ensure that the theater has accessible aisle seating and handrails in each auditorium, and make the bar area more accessible.  Construction on some of the modifications is scheduled to begin this month, and the entire project should be completed within six months.  Today’s agreement was reached under Title III of the ADA, which prohibits discrimination against individuals with disabilities by public accommodations. 

“The law ensures that people with disabilities have the same access to public accommodations as all other Americans,” McQuade said.  “This case is a reminder to businesses considering renovations that the Americans with Disabilities Act requires that building alterations comply with design standards.”

For more information on the ADA or today’s agreement with the Maple Theater, visit www.ada.gov or call the United States Justice Department’s toll-free ADA Information line at (800) 514-0301 or (800) 514-0383 (TTY) or the U.S. Attorney’s Civil Rights hotline at (313) 226-9151.

A Southfield mortgage lender has agreed to pay $4.2 million to resolve allegations that it violated the False Claims Act in its origination of loans backed by the federal government, United States Attorney Barbara L. McQuade announced today.

GTL Investments, Inc., doing business as John Adams Mortgage Company (JAMCO), entered into the agreement with the U.S. Attorney’s Office for the Eastern District of Michigan to resolve allegations that it originated mortgage loans that had material underwriting deficiencies.  The loans were guaranteed by the Federal Housing Administration.

The FHA makes home financing available by insuring residential mortgages for the purchase of properties with modest down-payments for purchasers meeting certain criteria, known as underwriting standards.  The original lender or loan originator is responsible for making sure that the borrower meets these underwriting standards to minimize the possibility of default and the need for the FHA to pay the mortgage holder for the losses caused by the default. 

An investigation by the Office of Inspector General for the Department of Housing and Urban Development found that GTL originated 31 FHA mortgage loans between January 2008 and April 2012 that had material underwriting deficiencies.  Twenty-nine of these loans went to claim, causing the FHA damages of $2,445,912.   The investigation also identified two loans that had not yet been presented for payment by the FHA with approximately $250,000 in potential losses.  GTL has agreed to indemnify the FHA for these two loans.

“By holding accountable lenders who fail to comply with underwriting requirements, we hope to send a message to all lenders that they must comply with government standards for federally insured loans,” McQuade said.

A Detroit man was indicted today for his role in the armed robbery of a pharmacy in Detroit, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division.

Kavin Stinson, 19, was charged with robbery and with using a firearm during a crime of violence.

The investigation determined that on August 22, 2014, three men armed with handguns entered the Rite Aid store at 1900 East Eight Mile Road in Detroit at approximately 3:00 p.m.  The men stole liquor and threatened the Rite Aid employees, forcing some at gunpoint to the back of the store to open a safe.  The robbers also forced employees to open cash registers and give them money.  One of the assailants pistol-whipped a male and a female employee as they were handing over money. 

Johnny Johnson was indicted in September by a federal grand jury for his role in the robbery.  Additional investigation by the FBI led to the identification of Kavin Stinson as the second suspect.  The third suspect remains at large. 

If convicted, Johnny Johnson and Kavin Stinson will face a minimum of seven years in prison with the possibility of 27 years in prison for their participation in the crimes. 

“We take armed robberies very seriously because armed robbers put residents at risk and create fear in our neighborhoods,” McQuade said.  “We hope that criminals will take note that committing crimes with guns will bring charges with severe consequences.”

“Mr. Stinson and the other perpetrators in this case are alleged to have violently robbed a neighborhood pharmacy at gunpoint,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Gun-related violence injects fear into the lives of law abiding citizens and wreaks havoc upon our communities. The FBI, along with its local, state and federal partners, remains committed to rooting out these violent offenders and maintaining the safety of our neighborhoods.”

The cooperative efforts of the Detroit Police Department and the Federal Bureau of Investigation's Violent Crime Task Force resulted in the charges against these two defendants.

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.

A 37-year-old Brighton man was sentenced today in federal court to 64 months in prison for running a $3.8-million Ponzi scheme, United States Attorney Barbara L. McQuade announced.

Joining in the announcement was Paul M. Abbate, Special Agent in Charge of the Federal Bureau of Investigation.  

U.S. District Judge Nancy G. Edmunds sentenced Sachin Uppal today, following his August guilty plea to wire fraud charges.  According to court documents, Uppal ran the Jefferson Smith Trading Company LLC (“JSTCO”) from July 2007 through September 2013.  Uppal, who was not a licensed investment advisor, marketed JSTCO to potential investors and solicited investor funds, describing it as a “hedge fund.”   Uppal told investors that he was a “day trader,” who would use investor funds to buy and sell financial instruments within the same trading day, which he said would reduce risk to investors. 

Several of Uppal’s victims were family friends.  This phenomenon, known as ‘affinity fraud,’ often targets members of identifiable groups, such as a religious or ethnic communities or clubs.  Judge Edmunds ordered Uppal to pay restitution to his victims in the amount of $3,867,187.

Uppal promised a return of 18 to 20 percent per year, with a minimum investment commitment of only 12 months.  Once he secured the initial investment, Uppal emailed his victims false monthly “year-to-date investment summaries” to make them believe that their accounts were performing well, and to persuade them to invest additional funds.  Sometimes, Uppal traded and lost funds during the relevant period.  Other times, Uppal simply pocketed the money without conducting any trades at all.  When investors asked to close their accounts and withdraw their investment funds, Uppal attempted to lull them with various excuses.

"Some people use guns to steal money.  Other people use lies," McQuade said. "Investors should not be lulled into trusting an investment advisor just because they know him or because he is a fellow member of an organization to which they belong.  Criminals take advantage of those relationships as cover to commit fraud."

“Mr. Uppal took advantage of trusting relationships with family, friends, and associates, breached their confidence, and stole their money,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Criminals like this use every means of deceit available to further their selfish goals, and investors need to exercise great caution so as not to become victimized.”

Investors are encouraged to consult with the Financial Industry Regulatory Authority (FINRA) website (http://www.finra.org) and its BrokerCheck resource before investing.

The former Treasurer of the City of Detroit and two former pension officials were convicted by a federal jury of conspiring to defraud retirees through bribery and kickbacks, U.S. Attorney Barbara L. McQuade announced today.

Joining McQuade in the announcement was Paul M. Abbate, Special Agent in Charge of the Federal Bureau of Investigation in Detroit, Jarod Koopman, Special Agent in Charge of the Internal Revenue Service, Criminal Investigations, and James Vanderberg, Special Agent in Charge, Department of Labor, Office of Labor Racketeering and Fraud Investigations, Chicago Regional Office.

Jeffrey Beasley, 45, of Chicago, Illinois, the former Treasurer of the City of Detroit, Ronald Zajac, 70, of Northville, Michigan, the former General Counsel of Detroit's two pension systems for more than 30 years, and Paul Stewart, 57 of Detroit, a trustee of Detroit's Police and Fire Retirement System, were convicted following a two-month jury trial before U.S. District Judge Nancy G. Edmunds. All three defendants were convicted of conspiring to defraud the city's pensioners of the honest services to which they were entitled by accepting bribes. In addition, Beasley was convicted of two counts of extortion and one count of bribery. Beasley was acquitted on three other counts of extortion.

The evidence at trial showed that Detroit’s two retirement systems lost more $97 million on pension deals corrupted by bribes and kickbacks taken or paid by the defendants. Beasley, Zajac, and Stewart conspired with each other and with former Detroit Mayor Kwame Kilpatrick and others to take bribes and kickbacks in return for votes on investment decisions made by the boards of trustees of Detroit’s two pension systems.

Beasley forced investment sponsors and consultants to pay Bernard Kilpatrick hundreds of thousands of dollars in exchange for his support of their proposed pension investments. Beasley also accepted tens of thousands of dollars in cash from investment sponsors and consultants in exchange for his support of their pension deals.

As part of the conspiracy, Zajac organized so-called “birthday parties” for Beasley, Stewart, and another trustees. At the parties, people having business before the pension systems gave each trustee thousands of dollars in cash. Zajac also directed investment sponsors and pension consultants to give thousands of dollars in cash and entertainment to Beasley and Stewart. Zajac also demanded that an investment sponsor pay for a trip to London for Zajac and a pension trustee in exchange for a $10 million investment in Detroit pension money.

During the conspiracy, Stewart accepted more than $48,000 in cash, trips, meals, drinks and other things of value in return for his support on pension deals proposed by the givers of the bribes. Among other things, Stewart accepted a Christmas basket stuffed with cash, a $5,000 Greektown casino chip, and a $4,000 trip to the Ritz-Carlton in Naples, Florida.

McQuade said, “These defendants breached their duties to retirees by basing their investment decisions on bribes. Their greed cost retirees almost $100 million in losses to pension funds. In light of all of the sacrifices made by Detroit retirees, we are gratified that the jury has brought these corrupt pension officials to justice.”

“The perpetrators in this case criminally conspired with one another to sell their influence over the city’s pension systems,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Their breach of the public’s faith and their fiduciary responsibilities to Detroit retirees resulted in nearly $100 million in losses. The FBI, along with its law enforcement partners, will continue to aggressively pursue and bring to justice those who abuse the public’s trust and enrich themselves at the cost of our communities.”

​Based on the jury’s guilty verdicts for conspiring to engage in honest services mail and wire fraud, Beasley, Zajac, and Stewart each face a maximum of twenty years in prison and a fine of up to $250,000. In addition, Beasley also faces an additional twenty years in prison and a fine of $250,000 for each of his two convictions for extortion, and an additional ten years in prison and a fine of $250,000 for his bribery conviction. Their sentences will be based on sentencing guidelines and other statutory factors.

In addition, a number of other defendants have been convicted in relation to the pension fund investigation, including:

            - Roy Dixon, an investment sponsor convicted of conspiring with Beasley, Zajac, and Stewart to pay bribes;

            - Monica Conyers, a former Trustee of the General Retirement System and former member of the Detroit City Council, for conspiracy to take bribes, including bribes relating to a proposed multi-million dollar pension fund investment in Wireless Resources and a $10,000 extortion payment relating to the Police and Fire Retirement System's investment in the Romulus Deep Injection Waste Well;

            - Samuel L. Riddle, Conyers' Chief of Staff, for conspiracy to commit bribery and extortion relating to the Wireless Resources and Romulus Deep Injection Well investments;

            - DeDan Milton, a former Trustee of Detroit's two pension funds;

            - Andrew Park, an owner of Asian Village, who paid a bribe to obtain a $2.75 million loan from Detroit's General Retirement System;

            - Derrick Miller, former Chief Information Officer of Detroit, who accepted the bribe from Park and who took a kickback of more than $500,000 on a $44 million investment by Detroit's two pension funds;

            - Chauncey Mayfield, for conspiracy to commit bribery with Treasurer Beasley by supplying Beasley and Kwame Kilpatrick with tens of thousands of dollars in hotel, entertainment, and private jet flights, as well as a job for Beasley's paramour and significant contributions to the Kilpatrick Civic Fund, all in return for maintaining Mayfield's position as an investment advisor controlling more than $200 million in pension fund money; and

            - George Stanton, the former Chief of Staff of a pension trustee, who accepted a $15,000 cash bribe from Dixon relating to a proposed investment in the Turks and Caicos Islands.  

The case was investigated by agents of the Federal Bureau of Investigation, the Internal Revenue Service, and the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. It is being prosecuted by Assistant United States Attorneys Robert Cares, David A. Gardey, and Stephanie Dawkins Davis.