Eastern District of Michigan

Michael Winans, Jr., 30, of Jessup, Maryland, was sentenced today to 14 years in federal prison for defrauding investors out of approximately $8 million dollars, United States Attorney Barbara McQuade announced.

Joining in the announcement was Wayne County Prosecutor Kym Worthy and Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation (FBI).

In addition to the prison sentence, United States District Judge Sean Cox also ordered Winans to pay restitution in the amount of $4.7 million dollars to the hundreds of victims he defrauded as well as a $175,000 fine, which is the maximum allowed by law.

Winans pleaded guilty in October, 2012 to operating the Winans Foundation Trust (the Trust) and representing that the Trust was a company investing in crude oil bonds in Saudi Arabia. Winans initially recruited eleven other individuals, whom he called "shareholders" in the Trust, to invest in the crude oil bonds. Winans required the so-called "shareholders" to solicit additional investors and then send the investors' funds to the Trust. Over 1,000 victim investors from several states sent over $8,000,000 to the Trust. All of these victims were led to believe they were investing in Saudi Arabian crude oil bonds that Winans well knew did not exist. In reality, Winans converted some of the victim investors' money to his own personal use. He also redistributed some of his later victims’ money to the earlier victims while falsely representing to them that it was the return on their "investments" he had promised.

"Investor fraud schemes like this one are just a fancy way to steal other people's money," McQuade said. "Anyone who robs citizens of their hard-earned savings will be brought to justice."

"We are pleased that the many victims of Michael Winans can rest easier tonight knowing that he has been convicted and will be spending his time in federal prison," said Prosecutor Kym L. Worthy.

FBI Special Agent in Charge Foley, "Those individuals who engage in illegal investment schemes will face severe penalties for their criminal activity. The FBI is committed to vigorously pursuing anyone who commits these crimes."

This case was a joint investigation with the FBI, the Wayne County Prosecutor’s Office and the Michigan Department of Licensing and Regulatory Affairs, Office of Financial and Insurance Regulation (OFIR).

The case is being prosecuted by Assistant United States Attorney Abed Hammoud.

A telephone line and e-mail address have been set up by the FBI/United States Attorney’s Office to collect information about potential victims. Individuals who believe they may have been a victim of the Winans Foundation Trust should provide their name, address, phone number and e-mail address to one of the following: e-mail: usamie.victimservices@usdoj.gov or toll free 1-888-702-0553.

The United States Attorney's Office for the Eastern District of Michigan announced today that it has filed suit against the Golden Corral restaurant in Westland, Michigan for violating the American's with Disabilities Act (ADA) by denying service to a mother and her minor children based on the appearance of the children's skin due to a genetic skin disorder.

The Justice Department's complaint, filed in the U.S. District Court for the Eastern District of Michigan in Detroit, alleges that the manager of the Golden Corral restaurant demanded that Danielle Duford and her four daughters leave the restaurant based on the appearance of the children's skin caused by a genetic skin disorder, epidermolysis bullosa, which causes blisters to form on the skin in response to minor injuries and temperature changes. Despite Ms. Duford informing the restaurant manager of her children's disability and repeatedly emphasizing that they did not have a contagious disease, the manager required the family to immediately leave the restaurant, claiming that he had received complaints from other customers. Title III of the ADA prohibits public accommodations, such as restaurants, from discriminating against people on the basis of disability, or their association with an individual with a disability, in the full and equal enjoyment of the goods or services offered. The lawsuit seeks an injunction against further discrimination, money damages for the victims of the unlawful discrimination, and civil penalties to be paid to the United States. The lawsuit is only an allegation of unlawful conduct by the defendants. The United States will bear the burden of proving the allegations at trial.

"The promise of the Americans with Disabilities Act is that disabled citizens should have full access to public life. We hope that this lawsuit will assist in expanding people's understanding of the range of disabilities and the obligations to treat all disabled citizens fairly under the law," said Barbara L. McQuade, the United States Attorney for the Eastern District of Michigan.

The case is being handled by Assistant U.S. Attorney Susan K. DeClercq in the U.S. Attorney's Office for the Eastern District of Michigan, in collaboration with the Disability Rights Section of the Civil Rights Division of the Justice Department.

More information about the ADA is available at the Justice Department's toll-free ADA Information line at (800) 514-0301 or (800) 514-0383 (TTY) and via the ADA website at http://www.ada.gov or through contacting the U.S. Attorney's civil rights hotline at 313-226-9151.

Zayd Allebban, former Wayne County Director of Enterprise Applications, the office that does software application development for Wayne County, was found guilty today by a federal jury in Detroit on charges of falsifying documents with the intent to obstruct justice, U.S. Attorney Barbara L. McQuade announced. The purpose of the falsified documents was to conceal a bribery/extortion scheme by Allebban’s friend and supervisor, Tahir Kazmi, former Wayne County Chief Information Officer.

McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation (“FBI”).

The eight day trial was conducted before United States District Judge Stephen J. Murphy. The jury deliberated for approximately a day and a half before reaching their verdict.

The evidence presented at trial established that Allebban and Kazmi sought to obstruct justice by seeking to persuade a private contractor to provide false information to the FBI and to a federal grand jury investigating corruption in the Wayne County government. Allebban and Kazmi sought to conceal the fact that the contractor had given Kazmi tens of thousands of dollars in cash and trips to Hawaii, Turkey, and Florida. Allebban was found guilty of falsifying documents that indicated that all payments from the contractor had been repaid by Kazmi, prior to the initiation of the grand jury investigation, with the intent to obstruct the grand jury and FBI investigation. Allebban, as part of the scheme, also delivered $24,000 in cash to the private contractor in an effort to induce the contractor to tell the FBI that the contractor had never given anything to Kazmi.

Allebban faces up to twenty years in prison and a fine of up to $250,000 on each of the two counts of falsifying documents.

A sentencing date will be set by Judge Murphy’s chambers.

Allebban was found not guilty on separate charges of conspiracy to obstruct justice and obstruction of justice by means of false documents.

Tahir Kazmi pleaded guilty on July 26, 2012 to accepting a bribe and is scheduled to be sentenced on February 22, 2013. He faces a maximum sentence of ten years in prison and/or a $250,000 fine.

U.S. Attorney McQuade said, “Public officials who illegally enrich themselves will be detected and brought to justice. Efforts to conceal their crimes will bring additional charges and higher penalties.”

FBI Special Agent in Charge Foley said, "The citizens of Wayne County deserve honest government and leaders committed to serving the needs of taxpayers. This verdict should serve as a reminder that the FBI-led Detroit Area Public Corruption Task Force will remain vigilant and dedicated to stopping these illegal acts."

The case was investigated by Special Agents of the FBI and Detroit Area Public Corruption Task Force. It is being prosecuted by Assistant United States Attorney Sheldon Light.

United States Attorney Barbara McQuade and Erick Martinez, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, along with E. C. Woodson, Inspector in Charge, United States Postal Inspection Service, and Jeffrey Frost, Special Agent in Charge, United States Secret Service announced a crackdown on tax identity theft and other related charges.

            Identity Theft is a serious crime which can result in great personal hardships to the victims of such crimes.  The U. S. Attorney’s Office, IRS Criminal Investigations and our law enforcement partners are committed to stemming refund fraud related to identity theft by focusing on preventing, detecting and resolving identity theft cases as soon as possible.

U.S. Attorney McQuade stated, "Identity theft is a serious crime with many layers of harm to innocent victims, including financial loss, damaged credit, and violation of privacy. We hope that these enforcement actions will deter identity thieves from committing these kinds of crimes."

"ID Theft is our top priority and we will not rest until the identity thieves are caught and sent to jail", said Erick Martinez, Special Agent in Charge of IRS-Criminal Investigation.

            Below are brief summaries of some of the criminal actions investigated by IRS Criminal Investigation, United States Postal Service, and United States Secret Service, that took place in the metropolitan Detroit area during the past several weeks.

∙           U.S. v. Drake Dodson -  As alleged in the criminal complaint, Dodson was part of a  conspiracy to file federal income tax returns using the names and Social Security numbers of individuals whose identities had been stolen.  The returns requested refunds based on false information about tax withholdings and tax credits.  The complaint further alleges that the conspirators obtained approximately $1.1 million in refunds.

∙           U.S. v. Brittany Goodson -  As alleged in the criminal complaint  Goodson was found to be in possession of numerous means of identification, i.e., names, social security numbers, dates of birth and other identifiers, bank routing and account numbers, and numerous prepaid debit cards, along with handwritten notes indicating that individual tax returns had been filed in some of the names.  The matter was referred to the IRS/CI which determined that  various false and fraudulent income tax returns had been filed using some of the means of identification found in her possession, which directed that fraudulent refunds be wire transferred to many of the prepaid debit card accounts also found in the defendant's possession.  The affidavit specifically describes false refunds of $1,464, $3,933 and $4,094 linked to the information possessed by Goodson.  She was charged with possession of means of identification with the intent to use them illegally and making false claims to the IRS.

∙           U.S. v. David Sneed -   According to the criminal complaint, Sneed was found to be in possession of 29 United States Treasury income tax refund checks with a face value of $141,951.00, all made out to different payees, none of whom was Sneed, and all listing addresses of the payees in the state of Florida.  The matter was referred to the U.S. Secret Service and the IRS/CI, and subsequent investigation determined that the checks were individual income tax refund checks issued as a result of the filing of fraudulent tax returns.  The defendant admitted that he agreed to receive the checks for a Florida tax preparer and bring them to Michigan to cash them for a percentage of their face value.  He was to be paid $100 per check for the service.   He was charged with the unlawful possession of means of identification (names and addresses on the checks) to aid and abet or in connection with a federal felony, that is, making false claims to the IRS.

∙           U.S. v. George Harris -   According to the affidavit underlying the complaint, Harris was found to be in possession of over 50 credit cards and over 100 pages containing various means of identification of others, including names, dates of birth, social security numbers, and addresses.  Analysis of the seized items and subsequent investigation revealed that the defendant had no permission to possess the means of identification, and that at least 20 different false individual tax returns had been filed in the names found in the defendant's possession resulting in false refunds of almost $28,000 being issued without the knowledge or consent of the persons named as the taxpayers on the returns.  The defendant was charged with possessing means of identification with the intent to commit or in connection with a federal felony, specifically, making false claims to the IRS.   

∙           U.S. v. Valerie Butler and Gary Young -  A federal indictment was returned charging Butler and Young, age 48 and 25 respectively, of Detroit, Michigan.   The defendants were named in an indictment charging them with one count of conspiracy to defraud the government, one count of Identity Theft and multiple counts of Theft of Public Money. The twelve count indictment charges that from 2009-2011, Butler and Young conspired by working together to prepare false tax returns. Butler and Young claimed tax refunds in amounts greater than the taxpayer was entitled to receive.  Butler and Young attempted to hide their involvement in the filing of the tax returns by failing to sign the return as the preparer.  Butler and Young had all of the refund money deposited to bank accounts that they controlled.  They split the refund money with some of the taxpayers, but most of the taxpayers never received any of the refund.  Butler and Young filed at least 299 false returns with total false claims of approximately $1,760,000, and refunds issued of approximately $1,079,201.

            IRS Criminal Investigation, United States Postal Inspection Service, and United States Secret Service need your help in preventing, detecting and resolving identity theft cases.  Let us know as soon as possible if you suspect that you may have you're your identity compromised or know someone who is involved in ID Theft.  Remember - Be careful with your personal information, especially with your social security number.  It you have questions about ID Theft, go to the following websites: www.IRS.gov,  www.postalinspectors.uspis.gov and www.secretservice.gov.  It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information over the internet. This also includes any type of electronic communication, such as text messages and social media channels.

 

A serial bank robber was sentenced today to 45 years in federal prison after having been convicted of four counts of bank robbery and one count of conspiracy to commit bank robbery, announced United States Attorney Barbara McQuade.

McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation.

Arthur Payton, 45, was sentenced by U.S. District Judge Lawrence P. Zatkoff in Port Huron, Michigan.

In November 2012, a federal jury convicted Payton for recruiting heroin-addicted prostitutes to rob banks in Oakland and Wayne counties. After the FBI determined that Payton was responsible for the bank robberies, his co-defendant wore a hidden microphone and recorded Payton planning his next set of bank robberies in downtown Detroit. Payton stole approximately $8,000 from the four banks.

This conviction was Payton's third federal conviction. He was convicted in San Diego in the mid-1990s and in Detroit in 2005 for engaging in identical schemes to use drug-addicted prostitutes to rob banks. In 1994, Payton appeared on the Oprah Winfrey Show as a "bank robbing pimp."

“This defendant has returned to the same criminal scheme each time he has been released from prison, preying on vulnerable women at the fringes of society to rob banks,” McQuade said. “This lengthy sentence was necessary because prison is the only thing that prevents him from robbing banks.”

FBI Special Agent in Charge Foley stated, "This case is an example of the FBI's commitment to combat violent crime in the state of Michigan. We will continue to work with our law enforcement partners to stop these illegal acts and ensure dangerous criminals are arrested and prosecuted."

This case was investigated by the FBI, the Livonia Police Department, the Farmington Hills Police Department, the Farmington Police Department, and the Novi Police Department.

AUSAs Doug Salzenstein and Matthew Roth prosecuted the case for the United States.

Chauncey Mayfield, a former investment advisor to the two City of Detroit pension funds, pleaded guilty today to conspiring with former Detroit Treasurer Jeffrey Beasley to pay him bribes in exchange for new business from the pension funds, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Special Agent in Charge Robert Foley of the Federal Bureau of Investigation (“FBI”).

During a hearing this afternoon before United States District Judge Nancy Edmunds, Mayfield, 56, of Ft. Lauderdale, Florida, admitted that between 2006 and 2008 he had an agreement with the then City Treasurer Beasley to pay bribes to Beasley and others to influence Beasley’s decisions as a Trustee of Detroit’s Police and Fire Retirement System and General Retirement System.

Mayfield was the principal owner and Chief Executive Officer of MayfieldGentry Realty Advisors, L.L.C. (“MayfieldGentry”). MayfieldGentry was an investment advisor and fiduciary to the two Detroit pension funds overseeing a real estate investment portfolio worth more than $200 million of pension fund assets. According to Mayfield, Beasley agreed to maintain business for Mayfield’s company and to give Mayfield new pension fund business in exchange for cash others things of value. In particular, Mayfield gave $50,000 to the Kilpatrick Civic Fund. In addition, Mayfield paid for Beasley and others to take a trip to Las Vegas costing $60,000; paid for another private plane trip to Tallahassee, Florida costing $24,000; paid for a private jet flight to Bermuda; and hired Beasley’s paramour to work at MayfieldGentry at Beasley’s request. Because of the pension fund business directed to MayfieldGentry by Beasley, Mayfield earned significant investment advisory fees from Detroit’s two pension funds.

United States Attorney McQuade said, “Detroit’s pension fund officials are entrusted to care for the retirement savings of the City’s employees, including police officer and firefighters. Officials who abuse their positions of trust for personal gain will be brought to justice.”

Robert Foley, Special Agent in Charge, Federal Bureau of Investigation said,"Those individuals who engage in pay to play schemes rob citizens of their right to honest government. The FBI Led Detroit Area Public Corruption Task Force is committed to stopping these illegal acts."

Based on his guilty plea and felony conviction for conspiring to pay bribes, Mayfield is facing a maximum of five years in prison and a fine of up to $250,000.

A criminal indictment is pending against Beasley and against Roy Dixon, a former investment advisor to the two pension funds who paid bribes to Beasley and other officials and who embezzled millions from the funds.

In addition, a number of other defendants have been convicted in relation to the pension fund investigation, including (1) 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; (2) 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; (3) DeDan Milton, a former Trustee of Detroit’s two pension funds; (4) Andrew Park, an owner of Asian Village, who paid a bribe to obtain a $2.75 million loan from Detroit’s General Retirement System; and (5) 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.

The case was investigated by agents of the Federal Bureau of Investigation, the Internal Revenue Service, and the Department of Labor. It is being prosecuted by Assistant United States Attorneys Robert Cares and David A. Gardey.

A 50-year-old Canton pharmacist who owned and operated 26 pharmacies in the metro-Detroit area was sentenced today to 17 years in prison, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Robert D. Foley, III, Special Agent in Charge, Federal Bureau of Investigation, Robert Corso, Special Agent in Charge, Drug Enforcement Administration and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services.

U.S. District Judge Arthur J. Tarnow sentenced BABUBHAI "Bob" PATEL on 26 convictions for a health care fraud conspiracy, a drug conspiracy, and related fraud and drug violations.

Evidence presented at a six-week jury trial concluding in August 2012 showed between 2006 and 2011, the pharmacies billed Medicare and Medicaid more than $57 million. At least 25% of those billings were for drugs that were either medically unnecessary never dispensed. Additional amounts were fraudulently billed to private insurers such as Blue Cross Blue Shield of Michigan. The pharmacies operated on a business model that paid kickbacks to physicians in exchange for writing prescriptions for expensive medications. The affiliated doctors would also write prescriptions for controlled substances, without regard to medical necessity, which would be filled at the pharmacies and distributed to paid "patients" and patient recruiters. The expensive non-controlled medications would be billed but not dispensed.

In sentencing the defendant, the court told the defendant that "what you have done is reprehensible." The criminal conduct engaged in by other health care fraud violators sentenced by the court was "small scale compared to this."

“Taxpayers fund Medicare and Medicaid to provide health care to needy Americans,” McQuade said. “It is gratifying to see courts impose strong sentences on defendants who exploit these programs for personal gain.”

FBI Special Agent in Charge Foley stated, "Those individuals who engaged in this health care fraud scheme stole millions of dollars over several years, from a system designed to provide health care to those in need. The FBI is committed to stopping these illegal acts and prosecuting these criminals."

"The conduct that occurred in this case was deplorable, inexcusable and dangerous" said Lamont Pugh III, Special Agent in Charge of the Chicago Region of the U.S. Department of Health & Human Services, Office of Inspector General. "The OIG will continue to work with our law enforcement partners to combat prescription drug fraud in the Medicare and Medicaid programs and seek to ensure the safety of program beneficiaries and taxpayer dollars."

Of the 26 defendants charged in the original indictment in this case, 20 defendants have either pleaded guilty or been convicted at trial. Six defendants are scheduled for trial in June. Out of 12 pharmacists charged, 11 have been convicted at trial or pleaded guilty, with one waiting to be tried. Out of four doctors charged, two have pleaded guilty, with two waiting to be tried.

Earlier this week, Judge Tarnow sentenced several of the other pharmacists who were convicted at trial. BRIJESH RAWAL, 36, of Canton; ASHWINI SHARMA, 34, of Novi; and LOKESH TAYAL, 36, of Northville, were each sentenced to terms of imprisonment of 68 months for their participation as pharmacists in these criminal offenses. These three pharmacists were non-U.S. citizens who entered the United States under a visa program for certain skilled workers, and each will be deported to the country of their citizenship upon the completion of their sentences. Defendant RAWAL is a citizen of Canada, while defendants SHARMA and TAYAL are citizens of India.

In addition to the prison sentence, defendant BABUBHAI PATEL was ordered to pay restitution to the Medicaid and Medicare programs in the amount of $17.3 million, and restitution to Blue Cross Blue Shield in the amount of $1.5 million. Defendant PATEL, who has been held without bond since his arrest on August 2, 2011, will receive credit toward his sentence for the time he has served.

U.S. Attorney McQuade thanked the Drug Enforcement Administration, the FBI, the Department of Human Services, Office of Inspector General, and Blue Cross and Blue Shield of Michigan for their tireless work in the investigation and prosecution of the case. The case is being prosecuted by Assistant United States Attorneys John K. Neal and Wayne F. Pratt.

James Henley, a former contractor with the Detroit Public Library (“DPL”), was charged in an Indictment for Bribery of a Public Official, United States Attorney Barbara L. McQuade announced today.

Joining McQuade in the announcement were Robert D. Foley, III, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation

According to the six count Indictment, James Henley bribed a public official of the DPL from about January 2007 until about July 28, 2008.  Henley owned a company called Core Consulting & Professional Services.  The DPL official approved a proposal submitted by Core Consulting to provide information technology work, and approved various extensions and change orders to the contract.  Ultimately, DPL paid Core Consulting $1.5 million under the contract, and Henley secretly paid kickbacks to the DPL official totaling at least $600,000. 

Henley is also charged with failing to file individual and corporate tax returns for years 2007 and 2008.

If convicted, Henley faces a maximum of ten years in prison and a fine of up to $250,000. The Indictment also seeks forfeiture of proceeds and payments associated with the bribery scheme.

United States Attorney McQuade said, “The citizens lose when public contracts are awarded on the basis of bribery instead of on the merits of the bids.  We will do all we can to root out corruption in public contracting in hopes of deterring officials from using public funds for self-enrichment.”

FBI Special Agent in Charge Robert D. Foley III said, "Those individuals who engage in bribery and kickbacks rob citizens of the honest government they deserve. The FBI Led Detroit Area Public Corruption Task Force is committed to stopping these illegal acts."

"Kickbacks will not be tolerated as a way to do business in Detroit," said Special Agent in Charge Erick Martinez, IRS Criminal Investigation.

The case was investigated by agents of the FBI. This case is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford and Julie Beck.

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.

Press Conference - Former Michigan Supreme Court Justice Diane M. Hathaway

Diane M. Hathaway, a former Michigan Supreme Court Justice, pleaded guilty today to committing bank fraud in connection with a property owned at 15834 Lakeview Court, Grosse Pointe Park, Michigan, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation ("FBI"), and Michigan Attorney General, Bill Schuette.

During a hearing this morning before United States District Judge John Corbett O’Meara, Hathaway, 58, of Grosse Pointe, Michigan, admitted that between 2010 and 2011 she knowingly engaged in a scheme to defraud ING Direct bank by concealing assets from the bank to qualify for a “short sale.” A short sale is a forgiveness of debt by the bank to a borrower who claims financial hardship.

Based on her guilty plea and felony conviction for committing bank fraud Hathaway is facing a maximum of thirty years in prison, a fine of up to $1,000,000 and up to five years of supervised release.

United States Attorney McQuade said, "We have made mortgage fraud a priority in this district because of the harm this crime causes to our housing markets in the aggregate. Homeowners who play by the rules should know that those who don't will be held accountable, no matter who they are."

Robert Foley, Special Agent in Charge of the FBI said, "Regardless of a person's stature or position in life, we must all follow the same set of rules. In this case, an individual in a prominent position of public trust made extremely poor choices that have resulted in criminal activity. The FBI is committed to stopping these illegal acts."

Michigan Attorney General Bill Schuette said, “"Public corruption scandals have damaged the public's trust in government and tarnished our state's reputation. But today, we begin to move forward, beyond the cloud of controversy that hung over our state's Supreme Court. I appreciate the hard work of U.S. Attorney Barbara McQuade and FBI Special Agent In Charge Bob Foley, who brought this case to a swift and just end."

This case was investigated by the FBI with assistance from Michigan Attorney General’s Office.

Press Conference - Highland Park Police Department

A federal criminal complaint was unsealed today charging four Highland Park police officers with accepting bribes, conspiring to distribute six kilograms of cocaine, and carrying firearms in furtherance of a drug trafficking crime, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III, of the Federal Bureau of Investigation, Chief of Police Kevin Coney, Highland Park Police Department and Michigan Attorney General Bill Schuette.

The four Highland Park police officers charged are: Anthony Bynum, 29, of Highland Park, Michigan; Price Montgomery, 38, of Highland Park, Michigan; Shawn Williams, 33, of Detroit, Michigan; and Craig Clayton, 55, of Highland Park, Michigan. Bynum and Montgomery are both police officers with the Highland Park Police Department. Bynum is also a police officer for Detroit Public Schools. Williams and Clayton are both Auxiliary (Reserve) Officers for Highland Park. Chief Coney was instrumental in assisting the FBI in its investigation of the four officers from his department.

The Criminal Complaint charges the four police officers with accepting cash bribes and with conspiring to deliver six kilograms of cocaine. According to the Criminal Complaint, Bynum and Montgomery arrested a man in August 2012 in Highland Park on a firearms offense. The officers beat the man after arresting him. While in the hospital, the man offered to pay the officers if they would dismiss the charges against him. The officers were willing to accept money in exchange for failing to appear for trial. Subsequently, the man who had been arrested by Montgomery and Bynum began working undercover for the FBI as an unpaid confidential source. During the course of the investigation, Montgomery and Bynum were captured on videotape accepting $10,000 in cash from the confidential source, in return for failing to appear at the man's trial in the Wayne County Circuit Court. On the date set for the man's trial in Circuit Court, Officers Montgomery and Bynum failed to appear as witnesses as required by subpoena, and the case was dismissed.

Later, Officers Mongtomery and Bynum agreed to transport and deliver two kilograms of cocaine for the FBI confidential source, whom the officers believed to be a drug trafficker. On November 15, 2012, Officers Montgomery and Bynum protected and delivered a shipment of what they believed to be two kilograms of cocaine from the Oakland Mall in Troy, Michigan, to a location in Taylor, Michigan. Each officer was paid $1,500 for his role in the delivery of sham cocaine. Subsequently, Officers Montgomery and Bynum recruited two additional Highland Park officers, Williams and Clayton, to help with the delivery of a second, larger shipment of cocaine. On January 23, 2013, the four Highland Park police officers delivered four kilograms of what they believed to be cocaine, again from the Oakland Mall. Each officer was paid either $1,000 or $1,500 by the confidential source for his work in protecting and transporting the sham cocaine. The four police officers each carried a firearm, and some carried their police badges, while protecting the loads of sham cocaine.

Upon conviction, each of the four defendants faces a maximum of up to forty years in prison for conspiring to distribute cocaine. In addition, the officers face a maximum of ten years in prison on the bribery charges, and an additional five year consecutive sentence for carrying a firearm during a drug trafficking offense.

United States Attorney McQuade said, "We applaud Highland Park Police Chief Coney for initiating a federal investigation into misconduct by his officers. We want to emphasize that the misconduct is limited to these four officers. Our community deserves to be served and protected by police officers who perform their jobs with integrity. Police officers who take bribes and participate in criminal activities will be discovered and prosecuted."

Special Agent in Charge Foley of the FBI said, "Police officers swear an oath to protect and serve and are held to the highest standards of ethics and conduct. The FBI led Detroit Area Public Corruption Task Force is committed to ensuring illegal acts on the part of law enforcement officers are thoroughly investigated and those officers face harsh penalties for their crimes."

Highland Park Police Chief Coney stated, “"The illegal actions of these officers do not represent or reflect the ethical standards and values consistent with the Highland Park Police Department. We remain committed to providing our citizens with first class public safety and ensuring our officers display integrity at all times."

"Public corruption scandals damage the public's trust in government and harm our state's reputation," said Attorney General Schuette. "We will continue to work with U.S. Attorney Barbara McQuade, the FBI, state, and local law enforcement agencies to eliminate corruption wherever it is found."

DPS Emergency Financial Manager Roy S. Roberts stated, “"There are a corps of extremely dedicated law enforcement officers who selflessly work day and night to protect our students, teachers, staff and DPS property, and the arrest and prosecution of this one individual will ensure that their professionalism and dedication will be preserved and maintained in the public eye. While relieved that none of this activity occurred on Detroit Public Schools grounds or involved any of our students, I applaud the leadership of our police department for cooperating fully and am highly appreciative of the efforts of the agencies in the FBI-led Public Corruption Task Force who brought this matter to justice."

The case was investigated by the FBI led Public Corruption Task Force which includes Internal Revenue Service, Criminal Investigation, Environmental Protection Agency - Office of Inspector General, Housing and Urban Development - Office of Inspector General, Department of Transportation - Office of Inspector General, Michigan State Police, the Michigan Attorney General's Office and the Detroit Police Department. It is being prosecuted by Assistant United States Attorney David A. Gardey.

The United States Attorney's Office, along with Royal Oak Public Schools join the Detroit Tigers Winter Caravan in an effort to increase awareness about bullying prevention.  The Detroit Tigers’ “Strike Out Bullying” initiative in partnership with the Detroit Newspapers In Education, the Department of Justice’s Anti-Bullying Prevention initiative as well as the Royal Oak Schools’ prevention efforts aim to bring attention to the widespread and often underreported problem of bullying in schools.

Bullying creates a climate of fear in schools, playgrounds and neighborhoods.  Victims of bullying suffer from a wide range of psychological and school-related problems including depression, anxiety, low self-esteem and even suicide.  One of the key components critical to the success of any anti-bullying effort is community outreach.  In an effort to bring law enforcement and the community together to discuss this very important issue, a town hall meeting entitled "Strike Out Bullying - Strategies for Protecting Your Child" will be held at Royal Oak Middle School, 709 N. Washington Avenue, Royal Oak, Michigan 48067 on Thursday, January 24, 2013, from 5:00 p.m. until 6:15 p.m.  Royal Oak Schools Superintendent Shawn Lewis-Lakin has graciously offered to host the town hall and United States Attorney Barbara McQuade along with Fox Sports Detroit broadcaster Mario Impemba will moderate the event.

Highlighted speakers will include Barbara L. McQuade, United States Attorney, FBI Special Agent in Charge Robert D. Foley, III and 2012 American League Champions Alex Avila and Phil Coke.  Avila and Coke a will speak about bullying and how children can root out this serious problem.
United States Attorney McQuade stated, "Preventing bullying, both online and in person, is part of our violent crime reduction strategy.  We do not accept that subjecting children to harassment and intimidation is a necessary part of growing up.  Instead, we want to give children strategies for dealing with bullying so that they can be successful students."          

FBI Special Agent in Charge Foley stated, "Raising awareness about the dangers of bullying and intimidation in schools is a crucial part of the FBI's anti-bullying philosophy. Our goal is to educate students about the importance of stopping bullying and supporting a safe and friendly environment for learning. The FBI is committed to working together to ensure students make healthy choices and continue to respect one another's differences."

Royal Oak Schools Superintendent Lewis-Lakin stated, "Royal Oak Schools strives to be a community of excellence, a place where all students experience success.   We welcome opportunities to work collaboratively in private and public partnerships on initiatives that address critical student needs.   We welcome this opportunity to work together with the Detroit Tigers and the U.S. Attorney's Office on making our schools positive, safe, bully-free zones for student success."

This is a free, ticketed event however, tickets are no longer available.  The event is open to the media.  If you have any questions, please contact Gina Balaya, Public Information Officer, United States Attorney’s Office at Gina.Balaya@usdoj.gov or call (313) 226-9758.

FLINT, Michigan – A Fenton podiatrist was sentenced in Bay City yesterday to 55 months in prison for his participation in a $1.6 million fraudulent medical billing scheme.

The sentencing was announced by United States Attorney Barbara L. McQuade, Special Agent in Charge Robert D. Foley, III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.

Richard Alan Behnan, D.P.M., 56, was sentenced by U.S. District Judge Thomas L. Ludington in Bay City, Michigan. In addition to his prison term, Behnan was ordered to pay $1,427,133.12 million in restitution to Medicare, and $196,956.54 to Blue Cross Blue Shield of Michigan, jointly and severally with his podiatric assistant and co-defendant, Kelly Morel.
Behnan pleaded guilty on November 21, 2011, to one count of conspiracy to commit health care fraud. According to the plea documents, beginning approximately in 2000 and continuing to at least December 2010, Behnan, a traveling podiatrist who operated across Michigan, including Bay City, Flint, Detroit and Lansing, provided services to patients at various senior centers and assisted living facilities. Behnan and Morel submitted claims to Medicare and Blue Cross Blue Shield of Michigan for nail avulsion procedures, when in fact they had merely trimmed and polished the patients’ toenails - a form of routine foot care not covered by Medicare. In some instances, Behnan submitted claims for nail avulsion procedures he claimed to have performed at a time when he was outside of the United States. In total, Behnan billed and received a total of $1,624,089.66 in fraudulent claims.

Kelly Morel, who had pleaded guilty May 26, 2011, was sentenced yesterday to 18 months in prison.

U.S. Attorney McQuade stated, “"We hope that cases like this one will alert doctors and other health care providers that defrauding taxpayers through Medicare fraud is a serious crime that will land them in prison."

FBI Special Agent in Charge Foley stated, “"Those who commit health care fraud by illegally billing Medicare for services never performed are stealing money from all taxpayers. The FBI is vigorously committed to stopping these criminal acts."

The case was investigated by the FBI and HHS-OIG. and prosecuted by the U.S. Attorney’s Office for the Eastern District of Michigan.

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

The final defendant in a Detroit narcotics conspiracy was sentenced today to almost ten years in prison, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge David McCain, Bureau of Alcohol, Tobacco, Firearms and Explosives, Detroit Field Division.

Chief United States District Judge Gerald E. Rosen sentenced Tyrone Wooten, 26, of Detroit, to 114 months in prison. Wooten pleaded guilty in September to Conspiracy To Distribute Controlled Substances. Wooten was charged as one of the co-leaders of the drug conspiracy. The indictment charged seven defendants with participating in the conspiracy to distribute at least 280 grams of crack cocaine and more than a kilogram of heroin.

During the investigation, a search warrant at a Detroit home uncovered 79 grams of crack cocaine and 15 grams of heroin, along with packaging materials and other narcotics paraphernalia.

In addition to Wooten, each of the charged defendants pleaded guilty to narcotics charges and were sentenced as follows; Stefan Toliver, 100 months; George Wooten: 60 months; Rashawn Marcel Jones: 180 months; Ryan Terrel Jones: 49 months; Jabron Poydras: 32 months and Maurice Curry: 168 months.

“We are focusing our drug enforcement efforts on drug trafficking organizations, which can lead to violence in our neighborhoods,” McQuade said. “We hope that prosecutions like this one can improve public safety for residents in our community.”

U.S. Attorney McQuade thanked the ATF for their work in the successful investigation of the case. The case was prosecuted by Assistant United States Attorney Susan Gillooly.

A 55-year-old Flint man was sentenced to more than four years in prison and more than $600,000 in restitution on Jan. 8, 2013, for conspiring to commit food stamp fraud, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Joe N. Smith, Special Agent in Charge of USDA - Office of Inspector General and Robert D. Foley, III, Special Agent in Charge of the Federal Bureau of Investigation in Detroit.

U.S. District Judge Mark A. Goldsmith sentenced Noha T. Fofana to 51 months in federal prison to be followed by a three-year term of supervised release. Fofana was also ordered to pay $612,980.96 in restitution to the USDA-Food and Nutrition Service. This amount is to be paid jointly and severally with Fofana’s co-defendant, Akhir K. McFarland, who was sentenced on Dec. 18, 2012, to 16 months in federal prison for his participation in the conspiracy.

Evidence introduced during the trial established that Fofana, the owner of Mandingo African Market, redeemed more than $750,000 in food stamp benefits from February 2009 to July 2011, approximately $612,000 of which was obtained utilizing fraudulent "food stamps-for-cash" exchanges. The U.S. Department of Agriculture -- Office of Inspector General, (USDA-OIG) which funds the food stamp program, calculated that during that same time period, Mandingo's average food stamp redemption amount was $26,798 per month - compared to an average of $5,479 monthly redemption for other convenience stores in the area.

Witnesses testified during the trial that Fofana and others conspired to fraudulently submit bridge card numbers for cash benefits. Members of the conspiracy agreed to pay customers, including undercover law enforcement agents, roughly 50 cents for each $1 charged against their cards.

USDA-OIG Special Agent in Charge Joe N. Smith stated, "The Office of Inspector General (OIG) will continue to dedicate resources to the investigation of retailers who commit fraud in vital USDA food assistance programs. OIG's objectives are to protect the integrity of USDA nutrition assistance programs such as Supplemental Nutrition Assistance Program and to stop unscrupulous retailers such as Noha Fofana from taking advantage of low-income individuals during these tough economic times. As we conduct fraud investigations throughout the State of Michigan, we appreciate the support of our Federal and State law enforcement partners and the U.S. Attorney's Office's long-term commitment to prosecuting crimes against SNAP."

FBI Special Agent in Charge Foley stated, “"Crimes involving food stamp fraud steal funds from a system designed to feed those in need. The FBI is committed to stopping this type of illegal activity."
“Taxpayers fund food stamps to provide food for the needy, not to create a revenue stream for store owners,” McQuade said. “We hope that other merchants will become aware of prosecutions like this one and be deterred from engaging in similar fraud schemes.”

The case was investigated by special agents from the United States Department of Agriculture-Office of Inspector General and special agents of the FBI.

The case was prosecuted by the Flint branch of the United States Attorney’s Office for the Eastern District of Michigan.

A Detroit man was sentenced yesterday in federal court on charges of being a felon in possession of a firearm, announced U.S. Attorney Barbara L. McQuade.

McQuade was joined in the announcement by David McCain, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Jerry Burton, 31, was sentenced to 63 months in federal prison and will serve two years of supervision following his release from federal prison. Burton pleaded guilty last October and was sentenced by Judge Nancy G. Edmunds on January 8, 2013. The court noted that Burton’s numerous previous convictions demonstrated that he was a continuing danger to the community.

During the guilty plea and in memoranda and argument submitted to the court at sentencing, the evidenced showed that ATF agents identified Burton as someone who had expressed an interest in illegally selling firearms in Detroit. On January 4, 2012, Burton sold an assault rifle to an undercover agent and an undercover Detroit Police Office. The semi-automatic rifle was fully functional and capable of accepting a magazine that holds 30 rounds of ammunition. Burton also sold the undercover officers two 30-round, large capacity magazines, one of which was loaded with 20 rounds of ammunition.

U.S. Attorney Barbara McQuade said: “We are committed to removing dangerous weapons from the hands of felons and from those engaged in illegal gun sales. We believe that removing illegal guns from our streets will help reduce our intolerably high homicide rate.”

McQuade praised the work of the Detroit Police Officers and ATF agents, demonstrated the highest levels of dedication and professionalism in their aggressive and thorough investigation of the case.