District of Minnesota

United States Attorney Gregory G. Brooker today announced a federal superseding indictment charging four members of the south Minneapolis-based 10z/20z gangs with crimes related to violent gang activity, including drug trafficking and illegal possession of firearms.[1] The four defendants named in the superseding indictment are LE’KEITH ALI DU’JUAN RAYFORD, 26, KENNETH LAMONT THOMPSON, 32, MAURICE JERRY JOHNSON, 27, and LENARDO ALEXZANDER WOODARD, 30. The superseding indictment remains sealed as to one additional individual who is charged but not yet in custody.

According to the superseding indictment, from at least April 2, 2017, through the present, the defendants maintained active membership in the 10z/20z south Minneapolis street gangs, with the purpose of making money for the gang through criminal acts, including distribution of crack cocaine, heroin, and marijuana. As part of their drug distribution schemes, the defendants and other members of the gangs possessed, carried and used firearms in order to protect their drug distribution network from rival gangs, and to protect drug distributors from being robbed of narcotics or money.

According to the indictment and documents filed in court, all four defendants were involved in a conspiracy to possess firearms in furtherance of their drug trafficking crimes and a conspiracy to distribute controlled substances. The overt acts alleged in the indictment include, among others, multiple crack cocaine and heroin sales, as well as repeated possession of illegal firearms. RAYFORD and WOODARD have prior felony offenses that make them ineligible to possess firearms.

This case was the result of an investigation conducted by the FBI Safe Streets Task Force, which is comprised of federal and local law enforcement agencies, including, but not limited to, the FBI, the Minneapolis Police Department, the Minnesota Bureau of Criminal Apprehension, and the St. Paul Police Department. The Minnesota Department of Corrections also provided assistance in this case. This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat gun and gang crime.

Assistant U.S. Attorney Thomas Calhoun-Lopez is prosecuting the case.

 

Defendant Information:

LE’KEITH ALI DU’JUAN RAYFORD, a/k/a “Fatty,” 26

Minneapolis, Minn.

Charges:

• Conspiracy to possess a firearm in furtherance of a drug trafficking crime, 1 count
• Conspiracy to distribute controlled substances, 1 count
• Distribution of cocaine base, 2 counts
• Felon in possession of a firearm, 1 count
• Possession with intent to distribute controlled substances, 1 count

 

KENNETH LAMONT THOMPSON, a/k/a “Kenny OG,” a/k/a “KG,” 32

Minneapolis, Minn.

Charges:

• Conspiracy to possess a firearm in furtherance of a drug trafficking crime, 1 count
• Conspiracy to distribute controlled substances, 1 count
• Distribution of cocaine base, 3 counts

 

MAURICE JERRY JOHNSON, a/k/a “Reese,” a/k/a “Loco,” 27

Minneapolis, Minn.

Charges:

• Conspiracy to possess a firearm in furtherance of a drug trafficking crime, 1 count
• Conspiracy to distribute controlled substances, 1 count
• Distribution of cocaine base, 4 counts
• Use of a firearm during and in relation to a drug trafficking crime, 1 count

 

LENARDO ALEXZANDER WOODARD, a/k/a “Naughty,” 30

Brooklyn Park, Minn.

Charges:

• Conspiracy to possess a firearm in furtherance of a drug trafficking crime, 1 count
• Conspiracy to distribute controlled substances, 1 count
• Distribution of cocaine base, 1 count
• Distribution of heroin, 2 counts
• Felon in possession of a firearm, 2 counts

 

 

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United States Attorney’s Office, District of Minnesota: (612) 664-5600

 

 

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

United States Attorney Gregory G. Brooker today announced the conviction of YAHYE MOHAMED HERROW, 46, for his role in a multi-million dollar insurance fraud scheme. HERROW was initially indicted on December 20, 2016, and following a three-day trial before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minnesota, the jury convicted HERROW on counts of conspiracy and mail fraud.

“Minnesota’s no-fault car insurance system is designed to get patients the treatment they need, get their bills paid timely, and avoid the need for court battles over who caused the accident. Schulz, HERROW, and the others involved in this scheme treated the no-fault system like a piggy bank. They treated patients like commodities. They prescribed treatment plans to make money for the chiropractors, the runners, the patients, and personal injury attorneys, with little regard for whether the patient truly needed or benefitted from treatment.” said Assistant U.S. Attorney John Kokkinen.

“This very complex case uncovered a large-scale insurance fraud scheme orchestrated by corrupt chiropractors and their accomplices, which resulted in millions of dollars in losses for insurers and their customers,” said Minnesota Commerce Commissioner Jessica Looman. “The many convictions and guilty pleas in this case are a testament to a strong, effective partnership that involved the Minnesota Commerce Fraud Bureau, federal authorities and local law enforcement to stop fraud in Minnesota.” 

“This conviction today in this sprawling multi-million dollar fraud scheme sends a strong message to those who join other criminals in defrauding automobile insurance companies,” said Special Agent in Charge of the FBI Minneapolis Division Jill Sanborn. “The FBI will vigorously investigate crimes like this, because these scams victimize law abiding Minnesotans who often face higher insurance premiums to make up for money wasted on fraudulent payments. The FBI is grateful for the strong law enforcement partnerships, such as the Minnesota Commerce Fraud Bureau, which helped bring about the verdict we see today.”

As proven at trial, from at least 2011 through February 2016, HERROW, along with multiple coconspirators, including Angela April Schulz, a chiropractor, participated in a scheme to defraud automobile insurance companies by paying kickbacks to entice patients who had been in car accidents to attend chiropractic treatments. HERROW’S role was as a “runner,” someone who solicited individuals who had been in car accidents to attend treatments at Schulz’s clinics, Meyer Injury Center and Morrow Accident Rehabilitation Center.

As proven at trial, Schulz paid illegal kickbacks to HERROW and other runners in exchange for referring patients to her clinics. Schulz generally paid between $500 and $2,500 per patient. Much of that payment was given to the patients to entice them to attend treatments that they did not need or would not have sought absent the payment. Schulz did not pay the runners or patients until the patients attended a predetermined number of appointments, thus ensuring that Schulz could recoup the cost of the kickbacks. Schulz, HERROW, and other coconspirators incentivized patients to attend treatment sessions without regard for whether the patients needed or benefitted from the treatments. As part of the scheme, the patients who were paid were often referred to personal injury attorneys in order to seek settlements from the insurance companies for “pain and suffering” and were then regularly coached that they could get even more money in the form of a settlement if they continued to attend treatment sessions.

As proven at trial, Schulz, HERROW, and other coconspirators hid the fact that runners and patients were being paid by lying to the insurance companies about the use of runners, making the payments in cash, and reminding all involved to keep the payments a secret. Ultimately, Schulz’s clinics billed the automobile insurance companies for services provided to hundreds of patients who had been paid to attend treatments. Over a five year period, Schulz paid more than $1 million to runners and patients, while receiving more than $5 million from the automobile insurance companies.

This case was a part of a larger investigation that ultimately resulted in charges against 26 individuals across seven separate metro-area chiropractic practices. Including this latest conviction, 24 of those individuals have either pleaded guilty or been found guilty following a trial.

This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the Federal Bureau of Investigation. Additional assistance was provided by the Minneapolis Police Department, Saint Paul Police Department, Minnesota State Patrol, and Homeland Security Investigations.

Assistant U.S. Attorneys John Kokkinen, David M. Maria, and Amber M. Brennan are prosecuting this case.

 

Defendant Information:                                                                                                                     

YAHYE MOHAMED HERROW, 46

Minneapolis, Minn.

Convicted:

• Conspiracy to commit mail fraud, 1 count
• Mail fraud, 4 counts

 

 

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United States Attorney’s Office, District of Minnesota: (612) 664-5600

United States Attorney Gregory G. Brooker today announced the guilty plea of MARIO LUIS JONES, 27, for the violent armed robbery of a Red & White taxicab in Minneapolis, Minnesota.  JONES was indicted on March 6, 2018, and entered his guilty plea earlier today before Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota.

“Mario Jones is a dangerous criminal who committed a violent armed robbery of a taxicab in the middle of a residential neighborhood. Violent crimes such as this will not be tolerated,” said U.S. Attorney Greg Brooker. “I am grateful for the work of our federal and local law enforcement partners who are dedicated to pursuing armed violent offenders and to keeping our businesses and communities safe.”

“This man’s reckless behavior put many lives at risk all the way from Minneapolis down to Lakeville,” said Special Agent in Charge Kurt Thielhorn of the ATF St. Paul Field Division. “Violent criminals have no place in our communities. We are pleased to partner with the Minneapolis and Lakeville Police Departments to make our community safer and bring this individual to justice.”

According to the defendant’s guilty plea and documents filed in court, on November 27, 2017, JONES got into a Red & White taxicab near the 2800 block of Pillsbury Avenue South in Minneapolis. JONES told the taxicab driver to take him to 5773 Bossen Terrace in Minneapolis, however, when they arrived, JONES told the driver that it was the wrong address. JONES then pulled out a .40 caliber semi-automatic pistol with a laser scope, placed the barrel near the driver’s head, and demanded that the driver stop the car and open the trunk. JONES got out of the taxi and walked to the trunk area. Fearing that JONES was going to kill him, the driver ran off. JONES fired the firearm and then drove off in the taxicab.

According to the defendant’s guilty plea and documents filed in court, JONES was located driving southbound on Interstate 35 in the Lakeville area. When law enforcement officers approached JONES, he sped off at speeds exceeding 100 miles per hour. JONES eventually crashed into a swampy ditch and was later apprehended and arrested.

The case was the result of an investigation conducted by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minneapolis Police Department, and the Lakeville Police Department.

Assistant U.S. Attorney Thomas M. Hollenhorst is prosecuting the case.

 

Defendant Information:

MARIO LUIS JONES, 27

Richfield, Minn.

Convicted:

• Interference with commerce by robbery, 1 count
• Using, carrying, and discharging a firearm during and in relation to a crime of violence, 1 count

 

 

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United States Attorney Gregory G. Brooker today announced the guilty plea of CHARLES ASONG-MORFAW, 55, to one count of aiding and assisting in the preparation of a false individual income tax return. ASONG-MORFAW entered his guilty plea on May 7, 2018, before Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota.

According to the defendant’s guilty plea and documents filed in court, between February 1, 2012 and April 13, 2015, ASONG-MORFAW, through his tax preparation business AJ & A Tax Services, located in Fridley, Minnesota, aided, assisted in and advised the preparation and presentation to the Internal Revenue Service (IRS) of false and fraudulent income tax returns. In preparing the tax returns, ASONG-MORFAW falsely represented to the IRS that the taxpayers were entitled to claim certain deductions under the provisions of the Internal Revenue laws, including unreimbursed employee business expenses, unreimbursed medical expenses and charitable deductions. During the course of the scheme, ASONG-MORFAW prepared over 100 tax returns resulting in a tax loss of approximately $103,095.

This case is the result of an investigation by the Internal Revenue Service-Criminal Investigation Division.

Assistant United States Attorney Michelle E. Jones is prosecuting the case.

 

Defendant Information:         

CHARLES ASONG-MORFAW, 55

Champlin, Minn.

Charges:

• Aiding and assisting in the preparation of a false individual income tax return, 1 count

 

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United States Attorney Gregory G. Brooker today announced the guilty plea of MICHAEL PATRICK COUPE, 27, for his role in a firearms purchasing conspiracy. COUPE, who was charged on March 22, 2018, along with his co-defendant, JAMIE FLEMING, entered his guilty plea earlier today before Judge Donovan Frank in U.S. District Court in St. Paul, Minnesota.

“This defendant is a convicted felon who broke the law by illegally obtaining firearms through the use of a straw buyer, then resold the guns to another felon” said Assistant U.S. Attorney Jeffrey Paulsen. “These illegal purchasing schemes that seek to put guns in the hands of dangerous criminals will not be tolerated.”

According to the defendant’s guilty plea and documents filed in court, from September 13, 2017, through December 14, 2017, COUPE conspired with FLEMING and others to purchase five separate firearms, including a Mossberg Tactical 22 .22 caliber rifle, a SCCY model CPX-2, 9mm pistol, a Phoenix model HP22A .22 caliber pistol, a Taurus model PT111 9mm pistol, and a Taurus model PT140 .40 caliber pistol. When purchasing the firearms, FLEMING falsely attested on the required ATF Forms 4473 that she was the actual purchaser of the firearms, when in fact she was not. FLEMING purchased the firearms at the direction of COUPE, who has two prior felony convictions in Sawyer County, Wisconsin, and is prohibited from possessing firearms.

According to documents filed in court, following the purchase of the firearms, COUPE and FLEMING transferred some or all of the firearms to others, including an individual identified as G.T., who is a convicted felon. On multiple occasions between September 14, 2017, and November 27, 2017, COUPE and FLEMING traveled from Hayward, Wisconsin to Minneapolis, Minnesota where they met with G.T. and transferred firearms to G.T.  

This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minneapolis Police Department, and the Sawyer County Sheriff’s Office.

Assistant U.S. Attorney Jeffrey S. Paulsen is prosecuting this case.

 

Defendant Information:

MICHAEL PATRICK COUPE, 27

Hayward, Wis.

Convicted:

• Conspiracy – Felon in possession of a firearm, 1 count
• Felon in possession of a firearm, 1 count

 
 
 
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United States Attorney’s Office, District of Minnesota: (612) 664-5600

 

United States Attorney Gregory G. Brooker today announced a criminal complaint charging MICHAEL WAYNE WHITEFEATHER, 18, with murder in the second degree. WHITEFEATHER made his initial appearance earlier today before Magistrate Judge Huseby in United States District Court in Bemidji, Minnesota.

According to the complaint and law enforcement affidavit, on April 28, 2018, following a 911 call, investigators found the body of a male victim on a trail near the intersection of Highway 1 and Pike Creek on the Red Lake Indian Reservation. The subsequent autopsy indicated that the victim died of a gunshot wound to the head. Investigators located three spent yellow shotgun shells, two were found near the victim’s body and the third was found in a nearby field. Several witnesses reported to investigators that they heard multiple gunshots during the early morning hours of April 28, 2018, near the location where the victim’s body was found.

According to the complaint and law enforcement affidavit, on May 2, 2018, investigators located and arrested WHITEFEATHER in Bemidji. During a post-Miranda interview, WHITEFEATHER admitted to possessing a pump-action shotgun and three yellow shotgun shells, and to shooting the victim in the head with the shotgun.

The FBI is still seeking individuals involved in this matter, if you have any information about their whereabouts please call the FBI at 763-569-8000.

This case is the result of an investigation conducted by the Red Lake Department of Public Safety, the FBI Headwaters Safe Trails Task Force, the Paul Bunyan Drug Task Force, the Bemidji Police Department, and the Beltrami County Sheriff's Office.

This case is being prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.

 

Defendant Information:                                                                                                                     

MICHAEL WAYNE WHITEFEATHER, 18

Red Lake, Minn.

Charges:

• Murder in the second degree, 1 count

 

 

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The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

United States Attorney Gregory G. Brooker today announced the filing of a felony information charging RONNIE EUGENE TAGGART, 50, for soliciting and receiving bribes and kickbacks in exchange for awarding City of Plymouth contracts. TAGGART will make his initial appearance in U.S. District Court at a later date.

According to the information, from approximately October 2012 through November 2016, TAGGART was the Facilities Supervisor for the City of Plymouth, Minnesota. In his position, TAGGART was responsible for the maintenance of all buildings owned and operated by the City of Plymouth, including the authority to award contracts for City projects such as building maintenance and cleaning, landscaping, and snow removal.

According to the information, from approximately 2014 through November 2016, TAGGART devised a scheme to defraud the City of Plymouth by soliciting and receiving bribes and kickbacks in exchange for awarding City contracts to various contractors outside of the competitive bidding process mandated by Minnesota state law and City of Plymouth procurement policy. TAGGART solicited and received cash kickbacks based on the total value of certain contracts. On other contracts, TAGGART received a flat cash kickback amount from the contractor. TAGGART also solicited and received non-cash bribes from certain City contractors, including items and services for TAGGART’S home, such as thousands of dollars in kitchen appliances, installation of new carpet, a concrete driveway, a garage door, a yard irrigation and sprinkler system, and extensive landscaping and electrical work. All of these items and services were provided to TAGGART at no cost.

According to the information, in order to conceal his failure to comply with the competitive bidding requirements, TAGGART instructed the bribe- and kickback-paying contractors to submit a second, fake quotation to give the false appearance that TAGGART had complied with the state statute and City policy. TAGGART also encouraged the bribe- and kickback-paying contractors to inflate the amount of their bids to cover the cost of the kickbacks and bribes. In total, TAGGART solicited and received bribes and kickbacks worth approximately $58,532.

This case is the result of an investigation conducted by the Federal Bureau of Investigation.

Assistant United States Attorney Joseph H. Thompson is prosecuting the case.

 

Defendant Information:

RONNIE EUGENE TAGGART, 50

Golden Valley, Minn.

Charges:

• Wire fraud, 1 count

 

 

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The charges contained in the information are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

United States Attorney Gregory G. Brooker announced the conviction of ROGER ERIK SPLETTSTOESZER, 53, for distributing, receiving and possessing video and image files containing child pornography. SPLETTSTOESZER was charged in a six-count indictment on June 22, 2017, and, on April 19, 2018, was found guilty on all counts by a federal jury in Minneapolis, Minnesota.

As proven at trial, from at least April through September 2015, SPLETTSTOESZER, who owned and operated a computer repair business called Deepsystems in Aitkin, Minnesota, used the internet to search for, receive and distribute images and videos of child pornography. During that time period, undercover investigators with the Minnesota Bureau of Criminal Apprehension (“BCA”) and the Federal Bureau of Investigation (“FBI”), discovered multiple known child pornography files on the Ares peer-to-peer network. Investigators determined that the files were from a computer with an IP address assigned to Deepsystems. Based on the undercover downloads, investigators obtained and executed a search warrant on Deepsystems, seizing multiple computers. Following a forensic review of the computers, investigators found that the devices contained, in total, more than 35,000 photos and 400 videos of child pornography.  

As set forth at trial, SPLETTSTOESZER was previously investigated in 2011 in Crow Wing County for distributing child pornography via a peer-to-peer network and possessing thousands of child pornography files. Additionally, in 1999, SPLETTSTOESZER was charged in Crow Wing County with four counts of criminal sexual conduct in the first degree for sexually assaulting and raping two children.

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

This case is the result of an investigation conducted by the Minnesota Bureau of Criminal Apprehension, the Federal Bureau of Investigation, and the Aitkin Police Department.

Assistant U.S. Attorneys Sarah E. Hudleston and Miranda E. Dugi are prosecuting the case.

 

Defendant Information:

ROGER ERIK SPLETTSTOESZER, 53

Ironton, Minn.

Convicted:

• Distribution of child pornography, 4 counts
• Receipt of child pornography, 1 count
• Possession of child pornography, 1 count

 

 

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United States Attorney Gregory G. Brooker today announced a $30,000 civil settlement with DR. MICHAEL T. SCHULENBERG, a Minnesota physician. The civil settlement stems from allegations that DR. SCHULENBERG violated the Controlled Substances Act.

According to an investigation conducted by the Drug Enforcement Administration (“DEA”), on April 14, 2016, DR. SCHULENBERG, prescribed Schedule 2 controlled substances in the name of an individual, knowing that the controlled substances were intended to be used by another individual, in violation of the Controlled Substances Act.  

As a licensed physician in the State of Minnesota registered with the DEA as a practitioner authorized to dispense Schedule 2-5 controlled substances, DR. SCHULENBERG is subject to requirements of the Controlled Substance Act as administered by the DEA. The U.S. Attorney’s Office and DEA contend that DR. SCHULENBERG’S conduct amounted to a civil violation of the Controlled Substances Act.

“Doctors are trusted medical professionals and, in the midst of our opioid crisis, they must be part of the solution,” said U.S. Attorney Greg Brooker. “As licensed professionals, doctors are held to a high level of accountability in their prescribing practices, especially when it comes to highly addictive painkillers. The U.S. Attorney’s Office and the DEA will not hesitate to take action against healthcare providers who fail to comply with the Controlled Substances Act. We are committed to using every available tool to stem the tide of opioid abuse.”

DEA Minneapolis-St. Paul Division Assistant Special Agent in Charge Kenneth Solek said, “As Minnesota and the Nation struggle in the throes of an opioid crisis, the Drug Enforcement Administration will always strive to ensure that those responsible will be held accountable, no matter what their position may be.”

As part of the settlement, DR. SCHULENBERG has agreed to pay $30,000 to the United States within thirty days of the effective date of the agreement.

According to the settlement agreement, DR. SCHULENBERG entered into a Memorandum of Agreement (“MOA”) with the DEA under which he agreed to comply with heightened compliance requirements for logging and reporting his prescriptions of controlled substances to the DEA for a period of two years. DR. SCHULENBERG agreed to the following terms and conditions:

• Maintain log(s) of all controlled substances prescribed, including the initials and address of the patient, date, quantity, strength, dosage and diagnosis for the controlled substance.
• Allow DEA personnel to access and inspect the log(s) and all other required controlled substance records, reports and inventories and to enter his registered location at any time during business hours, without prior notice, to verify compliance with the Agreement.
• Submit to DEA copies of controlled substance log(s) on a quarterly basis.
• Allow DEA access to prescribing history using the State of Minnesota Prescription Monitoring Program and, upon demand by DEA, provide a prescribing history report to the DEA from the Minnesota Board of Pharmacy.

This matter was investigated by the DEA Minneapolis-St. Paul Division and was handled by Assistant U.S. Attorney Bahram Samie of the Civil Division of the U.S. Attorney’s Office for the District of Minnesota.

In reaching this settlement, DR. SCHULENBERG did not admit liability and the government did not make any concessions regarding the legitimacy of the claims.

 

 

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United States Attorney Gregory G. Brooker today announced the guilty plea of ANTONIO CARLOS DE GODOY BUZANELI, 56, for his role in a $150 million investment fraud scheme involving Brazilian factoring. BUZANELI entered his guilty plea earlier today before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minnesota. BUZANELI’S co-conspirators, JOSE MANUEL ORDOÑEZ, JR., 47, and JULIO ENRIQUE RIVERA, 61, each pleaded guilty to one count of conspiracy to commit mail fraud on February 13, 2018 and November 9, 2017, respectively. Sentencing dates for the three defendants have yet to be scheduled.

“Antonio Buzaneli orchestrated a massive fraud scheme that victimized hundreds of individual investors around the globe, including in Minnesota,” said U.S. Attorney Greg Brooker. “Many of these victims were elderly or vulnerable, and they invested their hard-earned retirement savings based on sophisticated lies about a complex investment Mr. Buzaneli and his co-conspirators claimed to be making in Brazil. Instead, they used the investors’ money to fund their lifestyles, to travel first class around the world, and to fund their other business ventures. The U.S. Attorney’s Office is grateful for the skilled investigative efforts put forth by our law enforcement partners to hold Mr. Buzaneli and his co-conspirators accountable for their scheme.”

“This vast and sophisticated fraud scheme truly circled the globe, touching venues as near as St. Louis Park, Minnesota and as far as Brazil, the United Kingdom, and China. Mr. Buzaneli and his co-conspirators lured their victims with the promise of novel international investments and huge financial returns. In reality, they stole millions simply to fund their personal interests and maintain their fraudulent conspiracy,” said Acting Special Agent in Charge Robert C. Bone II. “The FBI is committed to stopping these fraudsters and holding them accountable, no matter how complex the scheme or far flung the proceeds. We are grateful for the help of our partners at the U.S. Attorney’s Office, the United States Postal Inspection Service and the Minnesota Commerce Fraud Bureau in uncovering this complex scheme and bringing these defendants to justice.”

“Postal Inspectors take very seriously their mission to deter the illegal use of the mails for any criminal activity,” said Postal Inspector in Charge, Craig Goldberg. “We are committed to working together with our federal and local law enforcement partners to identify, investigate and bring to justice those who would attempt to mask their criminal activity through the use of the mail.”

“The defendant directed a massive fraud scheme that victimized numerous investors worldwide,” said Minnesota Commerce Commissioner Jessica Looman. “Both our securities enforcement unit and the Commerce Fraud Bureau began investigating when we received a tip about a suspicious investment opportunity being offered in Minnesota. A successful collaboration between the Fraud Bureau and federal authorities uncovered a far-reaching, sophisticated scheme that deceived investors about how their money would be used.”

According to the defendant’s guilty plea, BUZANELI, ORDOÑEZ and RIVERA were the principals of Providence Holdings International, Inc., a company based in Key Biscayne, Florida. BUZANELI and ORDOÑEZ became principals of Providence Financial Investments, Inc. and Providence Fixed Income Fund LLC (collectively, along with Providence Holdings International, Inc., “Providence”) in order to raise money from investors.

According to the defendant’s guilty plea and documents filed in court, from about 2010 until June 2016, Providence raised approximately $150 million from investors worldwide by representing that Providence would invest the money in Brazilian factoring. “Factoring” is a financial transaction in which accounts receivable are purchased at a discount. Providence’s marketing materials explained that in Brazil consumers write ten separate post-dated checks for $100 – one per month – to pay for $1,000 in retail items such as consumer electronics or groceries. The retailer then sells the post-dated checks to Providence for approximately $820, and Providence earns $180 over ten months as the checks mature. As a result, Providence claimed to make a 48 percent annual return on money invested in Brazil.

According to the defendant’s guilty plea and documents filed in court, Providence raised more than $64 million from U.S. investors by employing a network of brokers who sold promissory notes bearing annual interest rates between 12 percent and 24 percent. Investors were told their money would be used to factor accounts receivable in Brazil. BUZANELI, ORDOÑEZ and RIVERA provided the brokers with marketing materials to show investors that their money would be used to factor accounts receivable in Brazil. The materials falsely stated that funds would be used “for the sole purpose” of making loans to a Brazilian subsidiary of Providence “which will use the proceeds of the loan to acquire receivables or financial instruments such a post-dated checks and/or Duplicatas in the Brazilian Factoring Market.”

According to the defendant’s guilty plea and documents filed in court, BUZANELI and ORDOÑEZ instead used a significant amount of the investors’ funds to pay purported profits to other investors and to make commission payments to brokers. BUZANELI and ORDOÑEZ also diverted investor funds to other companies they controlled, including an import/export company, a travel company, a credit restoration service, a catering company and a food truck operated by BUZANELI’S wife.

According to the defendant’s guilty plea and documents filed in court, BUZANELI and ORDOÑEZ also opened Providence offices and affiliates around the world, including in London, Hong Kong, Taipei, Shanghai, Singapore, Vancouver, and Panama. In 2011 and 2012, for example, BUZANELI and ORDOÑEZ opened Providence-affiliated entities in the Bailiwick of Guernsey and in Hong Kong, through which they raised approximately $85 million from offshore investors by falsely representing they would use the investors’ money to invest in Brazilian factoring. In reality, Providence did not use the international investors’ money to purchase receivables in the Brazilian factoring market. Instead, much of the investors’ money was transferred to other Providence-controlled entities around the world as well as to bank accounts controlled by BUZANELI and ORDOÑEZ, where the money was used for payments unrelated to Brazilian factoring, including to pay commissions to U.S. brokers and to make interest payments to American investors in Providence’s U.S.-based entities. As a result of the fraud scheme, Providence investors worldwide lost a total of more than $100 million.

This case is the result of an investigation conducted by the FBI, United States Postal Inspection Service, and the Minnesota Commerce Fraud Bureau.

Assistant U.S. Attorneys Kimberly A. Svendsen and Joseph H. Thompson are prosecuting the case.

 

Defendant Information:                                                                                                                     

ANTONIO CARLOS DE GODOY BUZANELI, 56

Coral Gables, Fla.

Convicted:

• Conspiracy to commit mail fraud, 1 count

 

JOSE MANUEL ORDOÑEZ, JR., 47

Davie, Fla.

Convicted:

• Conspiracy to commit mail fraud, 1 count

 

JULIO ENRIQUE RIVERA, 61

Pembroke Pines, Fla.

Convicted:

• Conspiracy to commit mail fraud, 1 count

 

 

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As Tax Day approaches, the U.S. Attorney’s Office reminds all Minnesotans that the deadline for filing federal income tax returns is Tuesday, April 17. To underscore federal law enforcement’s commitment to pursue those who fail to pay their taxes or otherwise defraud the tax system, below are several tax and related fraud prosecutions in the District of Minnesota. In addition to potential criminal penalties, including incarceration, tax evaders remain responsible for all taxes and interest due, as well as civil monetary penalties.

“Tax fraud unfairly shifts the tax burden to honest American taxpayers,” said U.S. Attorney Greg Brooker. “The U.S. Attorney’s Office for the District of Minnesota and the St. Paul Field Office of the Internal Revenue Service’s Criminal Investigation vigorously investigate and prosecute tax fraud and other financial crimes.”

“Year-round efforts of IRS Criminal Investigation are directed at those Americans who willfully and intentionally violate their legal duty to voluntarily file lawful and accurate tax returns and those individuals who commit other related financial crimes,” said Hubbard Burgess, Acting Special Agent in Charge of the St Paul Field Office. “Prosecutions of individuals committing tax fraud are a vital element in fostering confidence in our tax system and compliance with the law.”

JOSEPH ARNOLD MCGLYNN, of Burnsville, was sentenced to 30 months in prison for failing to pay over his employees’ withheld employment taxes to the IRS. Between 2009 and 2016, MCGLYNN was the owner, CEO and President of United Credit Consulting (UCC), a credit repair service company located in Burnsville. MCGLYNN withheld the employment taxes from his employees’ wages, but failed to pay over the taxes to the IRS for many quarters. Instead, MCGLYNN used the money to fund a lavish lifestyle, including luxury vacations, rentals of luxury vehicles, visits to strip clubs and purchases of luxury items such as jewelry, handbags and a boat. In total, MCGLYNN failed to pay to the IRS at least $159,157 in employment taxes.

ROYLEE BELFREY and THURLEE BELFREY, of St. Paul, and LANORE BELFREY, of Minnetonka, operated multiple home health care businesses and over several years committed a multi-million dollar heath care fraud, conspired to defraud the U.S., and failed to pay over almost $4 million in employee withheld taxes. Instead of paying over their employees’ withheld taxes to the IRS, they directed and permitted the money to be spent for other purposes, including for their own personal use. ROYLEE BELFREY was sentenced to 60 months in prison and ordered to pay $4,592,593.74 in restitution. THURLEE BELFREY was sentenced to 96 months in prison and ordered to pay $8,944,036.82 in restitution. LANORE BELFREY was sentenced to 15 months in prison and ordered to pay $402,158.00 in restitution. Related to the BELFREY investigation, the former mayor of Stillwater, KENNETH HARYCKI pleaded guilty to one count of conspiracy. HARYCKI was sentenced to 12 months and one day in prison and ordered to pay more than $2 million in restitution.

DIANE L. KROUPA, a former Federal Tax Court judge, of Minnetonka, was sentenced to 34 months in prison, and her husband, ROBERT E. FACKLER was sentenced to 24 months in prison for tax offenses. Between 2002 and 2012, KROUPA and FACKLER conspired to obstruct the IRS by falsifying and reporting personal expenses as business expenses on their joint tax return. For several years, they fraudulently deducted at least $500,000 of personal expenses as business expenses. FACKLER also failed to report approximately $450,000 of income earned from his business, Grassroots Consulting. KROUPA and FACKLER fraudulently understated their income by approximately $1,000,000 and fraudulently understated the amount of tax they owed by at least $450,000.

JOHN BURWOOD ROBINSON, of Crystal, was sentenced to 33 months in prison and ordered to pay $624,132 in restitution for stealing more than $1.1 million from his employer. ROBINSON pleaded guilty to mail fraud and filing a false tax return. ROBINSON was employed as the controller for North Central Stamping & Manufacturing, Inc. (“NCSMI”) from 1991 through 2016. In that role, ROBINSON devised a fraud scheme to steal money from NCSMI by opening a bank account in the name of NCSMI without the company’s knowledge or authorization, depositing customers’ payments into the fraudulent bank account, and using the deposits for his personal expenses.

MICHAEL TOBAK of Wayzata was sentenced to 24 months in prison for filing a false tax return. During an eight-year period, TOBAK failed to report more than $3.3 million in income from his non-profit home health care company, International Health Care Services. As a result, TOBAK failed to pay an additional $1,851,640 in taxes.

HASSAN OSMAN, of Minneapolis, was sentenced to 108 months in prison on charges of conspiracy, aiding and assisting in the preparation of a false tax return, and unlawful flight from prosecution. OSMAN and two co-conspirators filed more than 80 fraudulent tax returns for years 2008-2010 attempting to obtain close to $1 million in tax refunds.

 

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

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

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

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

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

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

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

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

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

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

 

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United States Attorney Gregory G. Brooker today announced an indictment charging BARRY RON SKOG, 67, with five counts of sale of counterfeit coins and one count of mail fraud. The defendant made his initial appearance earlier today before Magistrate Judge Franklin L. Noel in U.S. District Court in Minneapolis, Minnesota.

According to the indictment, from June 2012 through October 2016, SKOG devised a scheme to advertise and sell counterfeit coins by fraudulently representing that the coins were legitimate U.S. coins worth hundreds of dollars.

According to the indictment, SKOG owned and operated a business called Burnsville Coin Company and through his business, he posted advertisements for coins in a publication called Numismatic News. When victims responded to the ads, SKOG would mail them lists of available coins for purchase, many of which were counterfeit. In his communications with the victims, SKOG would often represent himself as an employee of the Burnsville Coin Company named “Ron Peterson,” when, in fact, there are no other owners or employees of the company other than SKOG. In total, SKOG fraudulently obtained more than $80,000 from his victims.

This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the Burnsville Police Department.

Based on the evidence obtained in this case, authorities believe there may be additional victims who have not yet been identified. Anyone with information about this matter is encouraged to call the Minnesota Commerce Fraud Bureau at 651-539-1617. Callers may remain anonymous.

Assistant U.S. Attorney Manda M. Sertich is prosecuting the case.

 

Defendant Information:                                                                                                                     

BARRY RON SKOG, 67

Burnsville, Minn.

Charges:

• Sale of counterfeit coins, 5 counts
• Mail fraud, 1 count

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

United States Attorney Gregory G. Brooker today announced the sentencing of RICHARD JAMES SMITH, 27, to 82 months in prison for violent assaulting an individual on the Red Lake Indian Reservation. SMITH, who pleaded guilty to one count of assault resulting in serious bodily injury, was sentenced earlier today before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota. In reaching the final sentence of 82 months, Judge Tunheim levied an upward departure from the federal sentencing guidelines to address the extreme physical and psychological injury SMITH inflicted on the victim.

According to the defendant’s guilty plea and documents filed in court, during the afternoon hours of June 29, 2017, SMITH was at his mother's residence located within the exterior boundaries of the Red Lake Indian Reservation. The victim, an employee with the Red Lake Forestry Department, was at the residence on a work-related matter when SMITH came up behind the victim and struck him in the head with an aluminum baseball bat. As a result of the assault, the victim sustained a severe traumatic brain injury with intracranial hemorrhage and had to be hospitalized for more than three weeks.

The case was investigated by the Red Lake Department of Public Safety, Federal Bureau of Investigation, FBI Headwaters Safe Trails Task Force, and U.S. Customs and Border Protection.

Assistant U.S. Attorney Deidre Y. Aanstad prosecuted the case.

 

Defendant Information:                                                                                                                     

RICHARD JAMES SMITH, 27

Red Lake, Minn.

Convicted:

• Assault resulting in serious bodily injury, 1 count

Sentenced:

• 82 months in prison
• 3 years of supervised release

 

 

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United States Attorney Gregory G. Brooker announced the guilty plea of JULIE ANN LEE, 53, former controller of the Town & Country Club in St. Paul, Minnesota, for operating a million dollar embezzlement scheme. LEE, who was indicted on August 23, 2017, entered her guilty plea yesterday before Senior Judge Donovan W. Frank in U.S. District Court in St. Paul, Minnesota.

“The Town & Country Club has been a Saint Paul institution since 1888. Unfortunately, Julie Lee, who was entrusted with the club’s finances, chose to use her position to embezzle more than one million dollars. She then spent the money on things such as home improvements, travel and vehicles,” said U.S. Attorney Greg Brooker. “With this guilty plea, the defendant has accepted responsibility for her crimes.”

“Tax evasion and wire fraud charges are not victimless crimes,” said Acting Special Agent in Charge Hubbard Burgess of the St. Paul Field Office IRS Criminal Investigation. “We all pay when others steal from their employers and the government. The magnitude of this fraud committed by Ms. Lee, along with this degree of dishonesty and deceit deserves to be punished.”

According to the defendant’s guilty plea and documents filed in court, from 2008 through December 2016, LEE was the controller of the Town & Country Club (“TCC”) in St. Paul, Minnesota. In her role, LEE was responsible for managing TCC’s finances and had authority to sign and issue checks on behalf of TCC as well as signing authority on TCC’s bank accounts, including a line of credit TCC had with Alliance Bank. LEE used her position as controller to devise a scheme to embezzle more than $1 million from TCC over the course of eight years.

According to the defendant’s guilty plea and documents filed in court, as part of her embezzlement scheme, LEE fraudulently issued herself more than 50 checks totaling approximately $163,357 directly from TCC’s bank accounts. LEE also stole approximately $250,000 in cash from TCC, which she deposited into her personal bank account. As part of the scheme, LEE also made payments on her personal credit cards directly from TCC bank accounts totaling approximately $764,932. LEE spent the funds she embezzled on things unrelated to TCC, including personal travel, home improvements and her mortgage, a 2013 Dodge Charger, a 2015 GMC Sierra K3500 pickup truck, a motorcycle, and a recreational vehicle.

According to the defendant’s guilty plea and documents filed in court, LEE attempted to conceal her embezzlement scheme and cover the shortage of money in TCC’s bank accounts by taking advances on TCC’s line of credit at Alliance Bank. As a result of LEE’s embezzlement, TCC was left without sufficient funds to make its quarterly payroll tax payments to the IRS. In order to conceal the shortage of funds, LEE filed false quarterly payroll tax returns with the IRS understating TCC’s payroll tax liability. At times, LEE also filed TCC’s quarterly payroll tax returns late and made TCC’s quarterly tax payments late, which resulted in TCC paying more than $300,000 in interest and penalties to the IRS.

This case is being prosecuted by Assistant U.S. Attorney Joseph H. Thompson.

This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS, the United States Secret Service, and the Saint Paul Police Department.

 

Defendant Information:

JULIE ANN LEE, 53

Farmington, MN

Convicted:

• Wire fraud, 1 count
• Filing a false tax return, 1 count

 

 

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United States Attorney Gregory G. Brooker today announced the sentencing of JOSEPH ARNOLD MCGLYNN, JR., 33, former owner, CEO and President of McGlynn Marketing, LLC, d/b/a United Credit Consulting (“UCC”), to 30 months in prison for failing to account for and pay over employment taxes to the Internal Revenue Service (“IRS”). MCGLYNN pleaded guilty on November 28, 2017, and was sentenced earlier today before Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn.

According to the defendant’s guilty plea and documents filed in court, between approximately 2009 and 2016, MCGLYNN was the owner, CEO and President of UCC, a credit repair service company located in Burnsville, Minnesota. MCGLYNN was responsible for ensuring that UCC’s Employer’s Quarterly Federal Tax Returns were filed and that employment taxes were paid. However, although MCGLYNN caused employment taxes to be withheld from the wages of UCC employees, he failed to pay over such taxes to the IRS for multiple quarters between April 30, 2014 and April 30, 2017. Instead, MCGLYNN used the money to fund a lavish lifestyle, including luxury vacations, rentals of luxury vehicles, visits to strip clubs and purchases of luxury items such as jewelry, handbags and a boat. In total, MCGLYNN failed to pay to the IRS at least $159,157 in employment taxes.

This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS and the United States Postal Inspection Service.

Assistant U.S. Attorney Michelle E. Jones prosecuted the case.

 

Defendant Information:                                                                                                                                                  

JOSEPH ARNOLD MCGLYNN, JR., 33

Burnsville, Minn.

Convicted:

• Willful failure to account for and pay over employment taxes, 2 counts

Sentenced:

• 30 months in prison
• Two years of supervised release
• $ 159,157.26 in restitution

 

 

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United States Attorney Gregory G. Brooker today announced a federal indictment charging MICHAEL PATRICK COUPE, 27, and JAMIE FLEMING, 30, in a firearms purchasing conspiracy. COUPE is charged with one count of conspiracy and four counts of being a felon in possession of a firearm, FLEMING is charged with one count of conspiracy. Both defendants made an initial appearance today before Magistrate Judge Hildy Bowbeer in U.S. District Court in St. Paul, Minnesota.

According to the indictment, between September 13, 2017, and September 16, 2017, FLEMING purchased five separate firearms, including a Mossberg Tactical 22 .22 caliber rifle, a SCCY model CPX-2, 9mm pistol, a Phoenix model HP22A .22 caliber pistol, a Taurus model PT111 9mm pistol, and a Taurus model PT140 .40 caliber pistol. When purchasing the firearms, FLEMING falsely attested on the required ATF Forms 4473 that she was the actual purchaser of the firearms, when in fact she was not. FLEMING purchased the firearms at the direction of COUPE, who has two prior felony convictions in Sawyer County, Wisconsin, and is prohibited from possessing firearms.

According to the indictment, following the purchase of the firearms, COUPE and FLEMING transferred some or all of the firearms to others, including an individual identified as G.T., who is a convicted felon. On multiple occasions between September 14, 2017, and November 27, 2017, COUPE and FLEMING traveled from Hayward, Wisconsin to Minneapolis, Minnesota where they met with G.T. and transferred firearms to G.T.

This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minneapolis Police Department, and the Sawyer County Sheriff’s Office.

Assistant U.S. Attorney Jeffrey S. Paulsen is prosecuting this case.

 

Defendant Information:

MICHAEL PATRICK COUPE, 27

Hayward, Wis.

Charged:

• Conspiracy – Felon in possession of firearms, 1 count
• Felon in possession of a firearm, 4 counts

 
JAMIE FLEMING, 30
Hayward, Wis.

Charged:

• Conspiracy – Felon in possession of firearms, 1 count

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

Alireza Jalali, 39, of Iran, was sentenced to 15 months in prison for his participation in a conspiracy to defraud the United States.  Jalali pleaded guilty on Nov. 29, 2017,

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Gregory G. Brooker for the District of Minnesota, Acting Special Agent in Charge Robert C. Bone II of the FBI’s Minneapolis Division, Special Agent in Charge Dan Clutch of the Department of Commerce-Office of Export Enforcement (OEE) and Special Agent in Charge Tracy Cormier of Homeland Security Investigations (HSI) St. Paul Field Office made the announcement.  Jalali was sentenced today before U.S. District Judge Joan N. Ericksen.

“Jalali and his co-conspirators illegally sent sensitive military-use technology to Iran, where it could fall into the hands of Iran’s Islamic Revolutionary Guard Corps, in clear violation of U.S. law,” said Assistant Attorney General Demers.  “This is a threat to the national security of the United States and our allies, and we will aggressively prosecute those who brazenly violate our export control laws.”

“This multi-year investigation highlights the importance of preventing U.S.-origin technology from being transferred to unauthorized end users. Fana Moj has designed components for the Iranian military's missile systems,” said Acting Special Agent in Charge Bone.  “We must prevent U.S. technology from falling into the wrong hands, where it could be used against our military members.”

“A top priority of OEE is identifying and disrupting the illicit export of controlled technology to Iran,” said Special Agent in Charge Clutch.  “OEE will continue to collaborate with its law enforcement partners to combat these criminal schemes that threaten U.S. national security.”

“U.S. export controls are in place to keep sensitive technology from falling into the hands of our nation's enemies,” said Special Agent in Charge Cormier. “One of HSI's highest priorities is to prevent illicit procurement networks, terrorist groups, and hostile nations from illegally obtaining military items and controlled dual-use technology.”

According to the defendant’s guilty plea, from 2009 through December 2015, Jalali was a part-time employee of Green Wave Telecommunication, Sdn Bhn, (Green Wave) a Malaysian company located in Kuala Lumpur, Malaysia. Since its incorporation in 2009, Green Wave operated as a front company for Fanavar Moj Khavar (Fana Moj), an Iran-based company that specializes in both broadcast communications and microwave communications.

As part of the conspiracy, Green Wave was used to acquire unlawfully sensitive export-controlled technology from the United States on behalf of Fana Moj. In order to accomplish these acquisitions, Jalali and his co-conspirators concealed the ultimate unlawful destination and end users of the exported technology through false statements, unlawful financial transactions, and other means.

As part of the conspiracy, the defendant’s co-conspirators would contact producers and distributors of the sought-after technology, solicit purchase agreements, and negotiate the purchase and delivery of the goods with the seller.  When the goods were received by Green Wave in Malaysia, Jalali repackaged and unlawfully exported the items from Malaysia to Fana Moj in Tehran, Iran.  In 2017, Fana Moj was designated by the United States Department of the Treasury as a Specially Designated National for providing financial, material, technological or other support for, or goods or services in support of, the IRGC.   

This case is the result of an investigation conducted by the FBI, the U.S. Department of Commerce-OEE and HSI.

This case is being prosecuted by Assistant U.S. Attorney Charles J. Kovats of the District of Minnesota and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section, with assistance provided by Assistant U.S. Attorney Douglas M. Pravda for the Eastern District of New York.

United States Attorney Gregory G. Brooker today announced the sentencing of ALIREZA JALALI, 39, to 15 months in prison for his participation in a conspiracy to defraud the United States. JALALI, who pleaded guilty on November 29, 2017, was sentenced today before United States District Judge Joan N. Ericksen in Minneapolis, Minn.

“Jalali and his co-conspirators illegally sent sensitive military-use technology to Iran, where it could fall into the hands of Iran’s Islamic Revolutionary Guard Corps, in clear violation of U.S. law,” said Assistant Attorney General Demers. “This is a threat to the national security of the United States and our allies, and we will aggressively prosecute those who brazenly violate our export control laws.”

Acting Special Agent in Charge Robert C. Bone II of the FBI Minneapolis Division stated, “This multi-year investigation highlights the importance of preventing U.S.-origin technology from being transferred to unauthorized end users. Fana Moj has designed components for the Iranian military's missile systems. We must prevent U.S. technology from falling into the wrong hands, where it could be used against our military members.”

Department of Commerce-Office of Export Enforcement (OEE) Special Agent in Charge Dan Clutch said: “A top priority of OEE is identifying and disrupting the illicit export of controlled technology to Iran.  OEE will continue to collaborate with its law enforcement partners to combat these criminal schemes that threaten U.S. national security.”

“U.S. export controls are in place to keep sensitive technology from falling into the hands of our nation's enemies,” said Special Agent in Charge Tracy Cormier of HSI St. Paul. “One of HSI's highest priorities is to prevent illicit procurement networks, terrorist groups, and hostile nations from illegally obtaining military items and controlled dual-use technology.”

According to the defendant’s guilty plea, from 2009 through December 2015, JALALI was a part-time employee of Green Wave Telecommunication, Sdn Bhn, (“Green Wave”) a Malaysian company located in Kuala Lumpur, Malaysia. Since its incorporation in 2009, Green Wave operated as a front company for Fanavar Moj Khavar (“Fana Moj”), an Iran-based company that specializes in both broadcast communications and microwave communications.

As part of the conspiracy, Green Wave was used to acquire unlawfully sensitive export-controlled technology from the United States on behalf of Fana Moj. In order to accomplish these acquisitions, JALALI and his co-conspirators concealed the ultimate unlawful destination and end users of the exported technology through false statements, unlawful financial transactions, and other means.

As part of the conspiracy, the defendant’s co-conspirators would contact producers and distributors of the sought-after technology, solicit purchase agreements, and negotiate the purchase and delivery of the goods with the seller. When the goods were received by Green Wave in Malaysia, JALALI repackaged and unlawfully exported the items from Malaysia to Fana Moj in Tehran, Iran. In 2017, Fana Moj was designated by the United States Department of the Treasury as a Specially Designated National for providing financial, material, technological or other support for, or goods or services in support of, the IRGC.   

This case is the result of an investigation conducted by the FBI, the U.S. Department of Commerce Office of Export Enforcement, and Homeland Security Investigations.

This case is being prosecuted by Assistant U.S. Attorney Charles J. Kovats and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section, with assistance provided by Assistant U.S. Attorney Douglas M. Pravda for the Eastern District of New York.

 

Defendant Information:                                                                                                                     

ALIREZA JALALI, 39

Citizen of Iran

Convicted:

• Conspiracy to defraud the United States, 1 count

 
Sentenced:

• 15 months in prison

 
 
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United States Attorney’s Office, District of Minnesota: (612) 664-5600

United States Attorney Gregory G. Brooker today announced a federal criminal complaint charging MICHAEL MCWHORTER, 29, JOE MORRIS, 22, and MICHAEL B. HARI, 47, for using an explosive device to maliciously destroy and damage the Dar al-Farooq Islamic Center (“DAF”) in Bloomington, Minnesota. MCWHORTER, MORRIS, and HARI are currently in custody in Urbana, Illinois. MORRIS and HARI made their initial appearance on federal charges related to an attempted bombing in Champaign, Illinois, today at 3:00 p.m. before Magistrate Judge Eric I. Long in U.S. District Court in Urbana, Illinois. MCWHORTER will make his initial appearance in connection with the attempted Illinois bombing at a later date.

The affidavit filed in support of the District of Minnesota criminal complaint alleges that on August 5, 2017, a pipe bomb was thrown through a window of the Dar al-Farooq Islamic Center (“DAF”), located in Bloomington, Minnesota. The pipe bomb, constructed of polyvinyl chloride, known as “PVC,” exploded, causing extensive damage. On January 27, 2018, law enforcement received information from a confidential source indicating that MCWHORTER, MORRIS, and HARI were responsible for the bombing carried out at DAF.

The Federal Bureau of Investigation is leading the investigation.

This case is being prosecuted by Assistant United States Attorneys Julie E. Allyn and John F. Docherty.

 

Defendant Information:

MICHAEL B. HARI, 47

Clarence, Ill.

Charges:

• Arson, 1 count

 
JOE MORRIS, 22
Clarence, Ill.
 
Charges:

• Arson, 1 count

 
MICHAEL MCWHORTER, 29
Clarence, Ill.
 
Charges:

• Arson, 1 count
   
   

 

 

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The charges contained in the criminal complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

United States Attorney Gregory G. Brooker today announced the indictment of DAVID THOMAS ROUGIER, 45, on one count of mail fraud and one count of wire fraud. ROUGIER made his initial appearance yesterday before Magistrate Judge Franklin L. Noel in U.S. District Court in Minneapolis, Minn.

As alleged in the indictment, in or around late 2010, ROUGIER began soliciting clients to invest in precious metals by purchasing gold and silver through him. Between 2013 and 2014, ROUGIER began telling his victim-investors that he had found a company, which he identified as “TAUG Limited” (“TAUG”) that would guarantee to purchase their gold and silver for a set price on a designated future date, typically three years from the date they signed a contract with TAUG. ROUGIER presented some of his victim-investors with a purported contract between them and TAUG, under which they were charged various fees, including an annual “asset management fee,” typically between $1,000 and $2,000, in order to avail themselves of the guaranteed purchase price. In reality, the annual fees were always paid to ROUGIER and ROUGIER never purchased any gold or silver for his victim-investors.

As alleged in the indictment, in July 2017, ROUGIER represented that a different company, “Industrial and Commercial Bank of China (Asia) Limited” (“ICBC”), had taken over TAUG’s contracts. ROUGIER represented that ICBC would honor TAUG’s existing contracts and offered new clients essentially the same services. 

As alleged in the indictment, between November 2010 and June 2017, more than a dozen individuals paid ROUGIER approximately $740,000 based upon his promises that he was using their money to buy gold and silver and, in some cases, that their investments were protected through the TAUG/ICBC contracts. Instead of purchasing gold and silver as promised ROUGIER spent hundreds of thousands of dollars of victims’ money on shopping trips, entertainment, travel, strip clubs and other personal expenses.

This case is the result of an investigation conducted by the FBI and the Minnesota Commerce Fraud Bureau.

Assistant United States Attorney Amber M. Brennan is prosecuting the case.

 

Defendant information:

DAVID THOMAS ROUGIER, 45

Lakeville, Minn.

Charges:

• Mail Fraud, 1 count
• Wire Fraud, 2 counts

 

 

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

United States Attorney Gregory G. Brooker announced a federal indictment charging THERESA ERNESTINE LINSMEIER with three counts of wire fraud and five counts of filing false tax returns. LINSMEIER will make her initial appearance in United States District Court on March 15, 2018.

According to the indictment, from 1998 to 2016, LINSMEIER was employed as a bookkeeper at Farm Mercantile, Inc., a hardware store located in Fairfax, Minn. In her position, LINSMEIER had access to and was an authorized signatory on Farm Mercantile’s bank accounts and had authority to sign and issue checks on behalf of the company.

According to the indictment, from about 2011 through 2016, LINSMEIER devised a scheme to embezzle more than $500,000 from Farm Mercantile. As part of the scheme, LINSMEIER transferred money to her personal credit cards directly from the bank accounts to which she had access. LINSMEIER attempted to conceal her embezzlement by creating false entries in Farm Mercantile’s general ledger to make it look like the money she stole had actually been used to pay legitimate business expenses. In total, LINSMEIER stole approximately $535,000, which she used for online gambling.

This case is the result of an investigation conducted by the Internal Revenue Service-Criminal Investigation.

This case is being prosecuted by Assistant United States Attorney Joseph H Thompson.

 

Defendant Information:                                                                                                                     

THERESA ERNESTINE LINSMEIER, 58

Fairfax, Minn.

Charges:

• Wire fraud, 3 counts
• Filing false tax returns, 5 counts

 

 

 

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

United States Attorney Gregory G. Brooker today announced the indictment of 12 individuals for their roles in a heroin distribution conspiracy. All 12 defendants named in the indictment were charged with conspiracy to distribute heroin. The defendants will make their initial appearances this week before Magistrate Judge Leo Brisbois in U.S. District Court in Duluth, Minn.

According to the indictment and documents filed in court, from at least March 13, 2017 through the present, CARLOS NASHUN COLEMAN, 33, BERNARD BRANDON MIMS, 38, CRYSTAL BROOKE STARSTEAD, 35, CAZEMBE OSIE FRANKLIN, 44, KENNETH SKY QUADE, 24, DANIEL ALBERT AMATUZIO, JR, 29, BENJAMIN MICHAEL WOODBURY, 27, DAMIEN DEANDRE BURNETT, 33, LAVINA NICOLE SHANNON, 40, JOSEPH DANTE WILLIAMS, 28, CHEVELLA DAWN KORKALO, 23, AND ERIN MARIE ALHACHEM, 27, conspired together to distribute heroin throughout the Twin Ports area. COLEMAN, who is identified as the main distributor, transported heroin from Chicago, Illinois to the Twin Cities and throughout the Twin Ports area where the heroin was further distributed through his network of co-conspirators.

This case is the result of a cooperative investigation conducted by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Duluth Police Department, the Saint Louis County Sheriff’s Office, the Superior Police Department, the Carlton County Sheriff’s Office, the Hibbing Police Department, the Virginia Police Department, the Hermantown Police Department, and the Fond du Lac Reservation Police Department.

This case is being prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.

 

Defendant Information:                                                                                                                     

CARLOS NASHUN COLEMAN, a/k/a “Los,” 33

Apple Valley, MN

Charges:

• Conspiracy to distribute heroin, 1 count
• Distribution of heroin, 1 count

 
BERNARD BRANDON MIMS, a/k/a “Lil B,” 38
Superior, WI
 
Charges:

• Conspiracy to distribute heroin, 1 count
• Distribution of heroin, 28 counts
• Possession with intent to distribute heroin, 5 counts

 
CRYSTAL BROOKE STARSTEAD, 35
Superior, WI
 
Charges:

• Conspiracy to distribute heroin, 1 count
• Distribution of heroin, 5 counts
• Possession with intent to distribute heroin, 4 counts

 
CAZEMBE OSIE FRANKLIN, a/k/a “MC Snake,” 44
Aurora, MN
 
Charges:

• Conspiracy to distribute heroin, 1 count
• Possession with intent to distribute heroin, 1 count

 
KENNETH SKY QUADE, a/k/a “Q,” 24
Unknown
 
Charges:

• Conspiracy to distribute heroin, 1 count
• Possession with intent to distribute heroin, 1 count

 
DANIEL ALBERT AMATUZIO, JR, 29
Unknown
 
Charges:

• Conspiracy to distribute heroin, 1 count
• Possession with intent to distribute heroin, 3 counts

 
BENJAMIN MICHAEL WOODBURY, a/k/a “Woody,” 27
Unknown
 
Charges:

• Conspiracy to distribute heroin, 1 count
• Possession with intent to distribute heroin, 1 count

 
DAMIEN DEANDRE BURNETT, a/k/a “Luck,” 33
Unknown
 
Charges:

• Conspiracy to distribute heroin, 1 count
• Possession with intent to distribute heroin, 1 count

 

LAVINA NICOLE SHANNON, a/k/a “Satin,” 40

Unknown

Charges:

• Conspiracy to distribute heroin, 1 count
• Possession with intent to distribute heroin, 1 count

 

JOSEPH DANTE WILLIAMS, 28

Unknown

Charges:

• Conspiracy to distribute heroin, 1 count
• Possession with intent to distribute heroin, 3 counts

 

CHEVELLA DAWN KORKALO, 23

Unknown
 
Charges:

• Conspiracy to distribute heroin, 1 count
• Possession with intent to distribute heroin, 1 count

 

ERIN MARIE ALHACHEM,” 27

Unknown

Charges:

• Conspiracy to distribute heroin, 1 count
• Possession with intent to distribute heroin, 1 count

 

 

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

JEROME RUZICKA and JEFFREY TAYLOR were convicted by a federal jury of charges related to stealing more than $15 million from the Eden Prairie-based Starkey Laboratories, Inc. (Starkey) and its principal owner William F. Austin, as well as one of Starkey’s suppliers, Sonion. RUZICKA is the former President of Starkey. U.S. District Court Chief Judge John Tunheim presided over the trial, which lasted nearly six weeks in Minneapolis. Former Starkey Chief Financial Officer (CFO) Scott Nelson and another former Starkey executive Jeff Longtain previously pleaded guilty in connection with this case.

United States Attorney Gregory G. Brooker, announcing the convictions, today, said, “It was pure greed that motivated these defendants. The FBI, IRS, and U.S. Postal Inspection Service meticulously uncovered the depth of the fraud, which lasted nearly a decade, and the trial team successfully presented the complex case to the jury. The jury was able to cut through the complexity and distractions and get to the truth. I want to also want to commend the victims in this case, Bill Austin, the employees of Starkey, and the Sonion Company, for their cooperation with this prosecution.” 

“As proven at trial, defendants Jerry Ruzicka and W. Jeff Taylor misused their extensive corporate knowledge and positions of trust over a period of years to steal millions from Starkey Laboratories,” said Acting Special Agent in Charge Robert C. Bone II of the FBI Minneapolis Division. “Corporate fraud such as this not only negatively impacts individual companies and institutions but risks overall stability of the marketplace as fraud losses accumulate. The FBI will continue to work closely with our criminal justice partners to detect corporate fraud and hold those responsible to account for their crimes.”

“IRS Criminal Investigation is committed to investigating individuals who use corporations as personal piggy banks. Corporate fraud impacts many levels of society from investors to the honest, hardworking Americans who pay their tax obligations,” said Hubbard Burgess, IRS Criminal Investigation Special Agent in Charge.

“Today’s verdict reaffirms the critical role the U.S. Postal Inspection Service plays in partnering with our fellow law enforcement partners at the FBI and IRS-CID in protecting the American consumer from these types of fraudulent schemes,” said Craig Goldberg, Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service, which includes Minnesota. “Postal Inspectors are committed to ensuring that the nation’s mail stream is not used by criminals to prey upon our citizens,” said Goldberg.

As proven at trial between 2006 and September 2015, RUZICKA, TAYLOR and others schemed to embezzle and misappropriate money and business opportunities belonging to Starkey and Sonion, a major supplier of hearing aid components to Starkey. The defendants deployed various tactics to steal from Starkey, including controlling a complicated web of sham companies and dummy entities, surreptitiously awarding themselves restricted stock in Starkey’s retail affiliate, and embezzling money from the company by causing payments to be made by Starkey for the benefit of the defendants and others.

RUZICKA and TAYLOR controlled a dummy entity, Archer Acoustics. TAYLOR falsely represented to Sonion this entity was a Starkey affiliate, thereby securing Starkey’s discounted pricing on hearing-aid components for Archer Acoustics. RUZICKA and TAYLOR used Archer Acoustics to purchase the discounted products that they later re-sold to other manufacturers to obtain illicit profits. At times, the illicit profits came in the form of fraudulent commissions and rebates.  The defendants obtained at least $600,000 in profits, commissions and rebates by fraudulently leveraging Starkey’s purchasing power for their own benefit.

Another facet of this scheme was related to Starkey’s retail affiliate, Northland US, LLC, which Austin created in 2002. He was the sole owner. The purpose of Northland LLC was to acquire and operate retail hearing aid establishments. In 2006, without Austin’s knowledge, RUZICKA surreptitiously transferred Northland LLC’s assets to a new entity they controlled, Northland Hearing Centers, Inc. RUZICKA and former Starkey CFO Scott Nelson forged Austin’s signature to complete the transfer of assets, later awarded themselves restricted stock, and ultimately paid themselves and Jeff Longtain approximately $15 million in exchange for terminating the restricted stock grants.

As proven at trial, in 2014, RUZICKA embezzled $200,000 from Starkey under the guise of “officer’s insurance.” He used those funds to pay his state and federal personal income taxes. RUZICKA also stole a 2011 Jaguar automobile that Starkey purchased for his use at a cost of $119,188.77. Starkey paid the fees, insurance premiums, and other costs associated with the automobile. Nevertheless, in July 2015, RUZICKA transferred ownership of the car from Starkey to himself by signing the title as both representative of the seller and also as the buyer. He did not pay Starkey for the vehicle, nor was it reported as a taxable benefit.

In total, RUZICKA and TAYLOR are alleged to have conspired to steal more than $15 million from Starkey and Sonion.

When some details of the scheme were discovered in September 2015, RUZICKA was terminated by Starkey. TAYLOR was also terminated by Sonion when Sonion became aware of the fraud.

Lawrence Miller and Lawrence Hagan, also charged in this case, were acquitted by the jury. While we had hoped for a different outcome, we respect the jury’s verdict and thank them for their service during this long and complex trial. 

This case is the result of an investigation conducted by the FBI, Criminal Investigation Division of the IRS, and the United States Postal Inspection Service.

Assistant U.S. Attorneys Benjamin Langner, Lola Velazquez-Aguilu, and Surya Saxena are prosecuting the case.

 

Defendant Information:                                                                                                                     

JEROME C. RUZICKA, 61
Plymouth, Minn.

Convicted:

• Mail fraud, 4 counts
• Wire fraud, 3 counts
• Tax fraud, 1 count

 
W. JEFFREY TAYLOR, 57
Cologne, Minn.
 
Convicted:

• Mail fraud, 1 counts
• Wire fraud, 2 counts

 
 
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United States Attorney Gregory G. Brooker today announced the sentencing of DONALD THOMAS PERRIN, 58, a registered sex offender, to 40 years in prison for producing child pornography. PERRIN, who pleaded guilty on October 10, 2017, moments before his jury trial was set to begin, was sentenced yesterday before Judge Wilhelmina M. Wright in U.S. District Court in Saint Paul, Minn.

“Donald Perrin manipulated, exploited and humiliated a vulnerable young victim, and never once showed any remorse for his predatory actions,” said Assistant U.S. Attorney Kate Buzicky. “Unfortunately for the victims the damage can never be undone, but with today’s forty-year sentence this predator will no longer be able to harm vulnerable children.”

According to his guilty plea and documents filed in court, in the summer of 2014, PERRIN, a registered sex offender, began engaging in sexually explicit online chats with a fifteen-year-old minor. In the fall of 2014, PERRIN was arrested and jailed at Carver County Jail following a violation of his sex offender registration requirement. After he was released from Carver County Jail, PERRIN continued his online communications with the minor and made screen captures of their video chat sessions depicting sexually explicit activity. On February 12, 2016, PERRIN was again arrested and jailed as a result of his non-compliance with his sex offender registration requirements. Following his arrest, law enforcement executed search warrants at PERRIN’S home and recovered several digital devices containing thousands of child pornography files. PERRIN was scheduled to begin trial on October 10, 2017, before U.S. District Judge Wilhelmina M. Wright in St. Paul, Minn.

This case was brought as part of Project Safe Childhood, a nationwide initiative, launched in May 2006, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.  In addition, if you know of any child who may have been a victim of exploitation, please contact the National Center for Missing or Exploited Children (NCMEC) at 1-800-THE-LOST (1-800-843-5678) or visit NCMEC’s web site at www.missingkids.com.

This case is the result of an investigation conducted by the FBI and the Carver County Sheriff’s Office.

Assistant United States Attorneys Katherine T. Buzicky and Angela Munoz-Kaphing are prosecuting this case.

 

Defendant Information:

DONALD THOMAS PERRIN, 58

Sherburne County Jail

Convicted:

• Production of child pornography, 1 count
• Commission of a felony while being required to register as a sex offender, 1 count

Sentenced:

• 480 months in prison
• 20 years of supervised release

 
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United States Attorney Gregory G. Brooker today announced the sentencing of HASSAN OSMAN, 52, to 108 months in prison for conspiracy, tax fraud and failing to appear on the day of trial. OSMAN was found guilty on September 21, 2017, following a four-day trial, on one count of conspiracy, 13 counts of aiding and assisting in the preparation of a false tax return, and one count of unlawful flight from prosecution. OSMAN was sentenced earlier today before Senior Judge David S. Doty in U.S. District Court in Minneapolis, Minn.

“Mr. Osman and his co-conspirators viewed the IRS not as a tax collection agency, but a way to generate illicit revenue. They filed 100 fraudulent tax returns claiming nearly $1 million in fraudulent tax refunds,” said Assistant U.S. Attorney Joe Thompson. “Today’s sentence underscores the seriousness of Mr. Osman’s crimes and his complete lack of remorse for his actions.”

“As we are in the midst of tax filing season, those who might consider preparing false tax returns should be aware of the extremely negative consequences as evidenced by the 108 month sentencing today of Hassan Osman,” said Hubbard Burgess, Acting Special Agent in Charge of the St. Paul Field Office. “Today's sentencing of Mr. Osman again emphasizes that IRS Criminal Investigation and the U.S. Attorney’s Office will continue their aggressive pursuit of those who would attempt to defraud America's tax system.”

As proven at trial, between January 2008 and April 2011, OSMAN and his co-conspirators devised and carried out a tax fraud scheme by filing false federal income tax returns claiming fraudulent refunds. OSMAN and his co-conspirators prepared fraudulent tax returns using fake W-2s created in the name of several front companies. Most of the returns were filed electronically, either from coffee shops or from a business in south Minneapolis owned by OSMAN. The resulting refunds were split among OSMAN and his co-conspirators. Often times, the fraudulent refunds were deposited onto prepaid debit cards and sent to addresses controlled by OSMAN or his co-conspirators. During the course of the conspiracy, OSMAN and his co-conspirators filed more than 90 income tax returns claiming approximately $1,012,877 in fraudulent tax refunds.

As proven at trial, OSMAN was arrested on April 17, 2015 and was later released on bond pending trial. On July 28, 2015, when OSMAN failed to appear for a court ordered pretrial conference, a warrant was issued for his arrest. On April 14, 2016, OSMAN was arrested in Toronto, Canada and later extradited back to the United States to face trial.

This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS.

This case was prosecuted by Assistant U.S. Attorneys Joseph H. Thompson and Michelle E. Jones.

 

Defendant Information:

HASSAN OSMAN, 52

Minneapolis, Minn.

Convicted:

• Conspiracy, 1 count
• Aiding and assisting in the preparation of a false tax return, 13 counts
• Failure to appear, 1 count

Sentenced:

• 108 months in prison
• Three years of supervised release
• $394,120.14 in restitution

 

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United States Attorney Gregory G. Brooker today announced the sentencing of KEVIN JAMES PETROSKE, 36, to 20 years in prison for producing, attempting to produce and possessing images and videos containing child pornography. PETROSKE was found guilty on August 30, 2017, following a three-day trial, on three counts of production and attempted production of child pornography, five counts of attempted production of child pornography, and one count of possession of child pornography. PETROSKE was sentenced earlier today before Judge Patrick J. Schiltz in United States District Court in Minneapolis, Minn.

As proven at trial, on October 23, 2015, law enforcement received a report of a man peering into residential windows of a home in Hibbing, Minn. Shortly after, law enforcement apprehended and identified the suspect as PETROSKE. Law enforcement investigators determined that PETROSKE had prior convictions in Stearns County for felony stalking and an open investigation in Benton County for possession of child pornography. Upon execution of a search warrant at PETROSKE’S residence, investigators seized a laptop computer containing hundreds of videos and images containing child pornography.

As proven at trial, many of the videos found on PETROSKE’S laptop, which were recorded between October 2011 and September 2015, contained surreptitious recordings of minor females filmed by PETROSKE through the windows of their homes without their knowledge. PETROSKE captured the victims in their bedrooms and bathrooms in various private moments and, in many of the videos, PETROSKE is heard masturbating and making sexual comments.

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

This case is the result of an investigation conducted by the FBI, Minnesota Bureau of Criminal Apprehension, and the Hibbing Police Department.

Assistant U.S. Attorneys Manda M. Sertich and Melinda A. Williams prosecuted the case.

Defendant Information:

 

KEVIN JAMES PETROSKE, 36

Hibbing, Minn.

Convicted:

• Production and attempted production of child pornography, 3 counts
• Attempted production of child pornography, 5 counts
• Possession of child pornography, 1 count

Sentenced:

• 240 months in prison
• 10 years of supervised release

 

 

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United States Attorney Gregory G. Brooker today announced the sentencing JAYSEN LANE HEYER, 39, to 175 months in prison for possession with intent to distribute methamphetamine. HEYER pleaded guilty on September 8, 2017, and was sentenced today before Judge Susan Richard Nelson in U.S. District Court in Saint Paul, Minn.

According to the defendant’s guilty plea and documents filed in court, on December 28, 2016, HEYER was found to be in possession of approximately 199 grams of methamphetamine, an amount that carries a street value of between $8,000 and $12,000. Law enforcement officers also found HEYER to be in possession of stolen firearms, including a Smith and Wesson M&P 40 .40 caliber pistol and an Intratec Tech-DC9 9-millimeter pistol, as well as ammunition for both firearms. Because he is a felon, HEYER is prohibited under federal law from possessing firearms at any time.

This case is the result of an investigation conducted by the Itasca County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).

Assistant United States Attorney Deidre Y. Aanstad prosecuted this case.

 

Defendant Information:                                                                                                                     

JAYSEN LANE HEYER, 39

Squaw Lake, Minn.

Convicted:

• Possession with Intent to Distribute Methamphetamine, 1 count

Sentenced:

• 175 months in prison
• Four years of supervised release

 

 

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United States Attorney Gregory G. Brooker today announced the sentencing of JAMES MARIO LEWIS, a/k/a/ “Lowdown,” 47, to 61 months in prison for operating a years-long check fraud scheme. The defendant, who pleaded guilty on July 6, 2017, to one count of bank fraud and one count of aggravated identity theft, was sentenced on February 20, 2018, before Senior Judge Michael J. Davis in U.S. District Court in Minneapolis, Minn.

“The recent sentencing of Mr. Lewis to over five years in prison for theft of mail should be a wake-up call to those individuals who are contemplating a similar crime”, said Acting Postal Inspector in Charge Dana Carter of the Denver Division. “The US Postal Inspection Service continues a long tradition of protecting the American public from those individuals who would steal or use the US Mail in furtherance of their criminal activities.”

According to his guilty plea and documents filed in court, from May 2009 through April 2014, LEWIS led a fraud scheme in which he and multiple co-conspirators would steal checks from victims’ mailboxes, change the name on the checks, deposit them at local banks, and then withdraw the cash proceeds. LEWIS would use chemicals to “wash” the stolen checks to remove the true payee and rewrite the checks using the names and bank account information of his co-conspirators. In total, LEWIS and his co-conspirators cashed or attempted to cash more than 60 counterfeit checks totaling more than $120,000.00.

This case was the result of an investigation conducted by the United States Postal Inspection Service, the Ramsey County Sheriff’s Office, and the Minnesota Financial Crimes Task Force.

Assistant United States Attorney Manda M. Sertich prosecuted this case.

 

Defendant Information:

JAMES MARIO LEWIS, a/k/a/ “Lowdown,” 47

South Saint Paul, Minn.

Convicted:

• Bank fraud, 1 count
• Aggravated identity theft, 1 count

 
Sentenced:

• 61 months in prison
• Five years supervised release
• $57,963.41 in restitution

 
 
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United States Attorney Gregory G. Brooker today announced a criminal complaint charging AVIEL LI GOODMAN, 62, a licensed psychiatrist, with receipt of child pornography. GOODMAN made his initial appearance today before Magistrate Judge Menendez in United States District Court in Minneapolis, Minn.

According to the complaint and documents filed in court, on multiple occasions between March 1, 2015, and August 27, 2017, undercover agents downloaded numerous image and video files depicting child pornography from IP addresses connected to GOODMAN’S Saint Paul, Minn. residence. On January 17, 2018, upon execution of a search warrant on GOODMAN’S residence, law enforcement seized a computer containing hundreds of image files and multiple video files of suspected child pornography. The images and videos were submitted to the National Center for Missing and Exploited Children (NCMEC) for analysis and victim identification.

If you know of any child who may have been a victim of exploitation, please call the National Center for Missing or Exploited Children (NCMEC) at 1-800-THE-LOST (1-800-843-5678) or visit NCMEC’s web site at www.missingkids.com.

This case is the result of an investigation conducted by the Federal Bureau of Investigation.

This case is being prosecuted by Assistant U.S. Attorneys Katharine T. Buzicky and Carol M. Kayser.

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

 

Defendant Information:                                                                                                                     

AVIEL LI GOODMAN, 62

Saint Paul, Minn.

Charges:

• Receipt of child pornography, 1 count

 
 
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The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

A federal grand jury returned an indictment today charging a Rochester-based tax return preparer with conspiring to file false claims for tax refunds, theft of public money, and aggravated identity theft, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Gregory G. Brooker for the District of Minnesota.

According to the indictment, MERCEDES MALDONADO RODRIGUEZ, from 2008 through April 2013, operated a tax return preparation business located in Rochester, Minnesota. RODRIGUEZ allegedly purchased authentic birth certificates of Mexican nationals, which she and her co-conspirators then used along with other falsified documents to fraudulently obtain Taxpayer Identification Numbers (ITINs) from the Internal Revenue Service. The indictment further alleges that RODRIGUEZ and her co-conspirators used the fraudulently obtained ITINs to file fraudulent tax returns, which claimed refunds based on, among other items, false dependents and child tax credits. An ITIN is a tax processing number issued by the IRS to individuals who do not have, and are not eligible to obtain, a social security number.

RODRIGUEZ is further alleged to have directed the fraudulent tax refund checks to be mailed to addresses belonging to her co-conspirators, employees, and family members and then cashed.

If convicted, RODRIGUEZ faces a statutory maximum sentence of 10 years in prison for the conspiracy, 10 years in prison for each count of theft of public money and a mandatory sentence of two years in prison for aggravated identity theft. She also faces substantial monetary penalties and restitution.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Brooker commended special agents of IRS Criminal Investigation, U.S. Postal Inspection Service, Homeland Security Investigations, the Federal Bureau of Investigation, the U.S. Secret Service and the Department of Treasury, Office of Inspector General, who investigated the case and Assistant U.S. Attorney Allen A. Slaughter and Trial Attorney Christopher S. Strauss of the Tax Division.

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

 

Defendant information:

MERCEDES MALDONADO RODRIGUEZ

Rochester, Minn.

Charges:

• Conspiracy to Defraud the United States with Respect to Claims, 1 count
• Theft of Public Money, 7 counts
• Aggravated Identity Theft, 33 counts
   

 

 

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The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

A federal grand jury sitting in the District of Minnesota returned an indictment today charging a Rochester-based tax return preparer with conspiring to file false claims for tax refunds, theft of public money, and aggravated identity theft, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Gregory G. Brooker for the District of Minnesota.

 

According to the indictment, Mercedes Maldonado Rodriguez from 2008 through April 2013, operated a tax return preparation business located in Rochester, Minnesota.  Rodriguez allegedly purchased authentic birth certificates of Mexican nationals, which she and her co-conspirators then used along with other falsified documents to fraudulently obtain Taxpayer Identification Numbers (ITINs) from the Internal Revenue Service.   The indictment further alleges that Rodriguez and her co-conspirators used the fraudulently obtained ITINs to file fraudulent tax returns, which claimed refunds based on, among other items, false dependents and child tax credits.  An ITIN is a tax processing number issued by the IRS to individuals who do not have, and are not eligible to obtain, a social security number.

 

Rodriguez is further alleged to have directed the fraudulent tax refund checks to be mailed to addresses belonging to her co-conspirators, employees, and family members and then cashed. 

 

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty.

 

If convicted, Rodriguez faces a statutory maximum sentence of 10 years in prison for the conspiracy, 10 years in prison for each count of theft of public money and a mandatory sentence of two years in prison for aggravated identity theft.  She also faces substantial monetary penalties and restitution.

 

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Brooker commended special agents of IRS Criminal Investigation, U.S. Postal Inspection Service, Homeland Security Investigations, the Federal Bureau of Investigation, the U.S. Secret Service and the Department of Treasury, Office of Inspector General, who investigated the case and Assistant U.S. Attorney Allen A. Slaughter and Trial Attorney Christopher S. Strauss of the Tax Division.

 

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

United States Attorney Gregory G. Brooker today announced the sentencing of JEREMY RICHARD LUNDIN, 31, to 110 months in prison for operating a Ponzi scheme through which he stole more than $1 million from individual investors. LUNDIN, who pleaded guilty on September 22, 2017, was sentenced today before Judge Wilhelmina M. Wright in U.S. District Court in Saint Paul, Minn. In addressing LUNDIN’S conduct, Judge Wright stated, “You did not steal from your victims because you needed money … you stole money because you wanted to maintain a lavish lifestyle without earning it. Your victims earned their money, and you stole it. You used their money to buy vacations, clothes, vehicles, a boat, for yourself. Apparently you decided you deserved their money more than they did.”

Assistant U.S. Attorney Amber Brennan said, “Jeremy Lundin had a life that a lot of people dream of, a middle class life. But, he wanted things he could not afford, so he stole from people who had saved money for their retirement and to help their kids go to college. These are people who wanted to give their kids the same opportunities that Lundin himself had. And, he stole from them for no reason other than to live a lavish lifestyle.”

“When fraudsters like Jeremy Lundin take advantage of honest citizens who are simply looking to invest their hard-earned savings and retirement funds for a better life - it’s not only shameful, but devastating,” said Acting Special Agent in Charge Hubbard Burgess of IRS Criminal Investigation, St. Paul Field Office. “Today's sentencing demonstrates how federal law enforcement works together to help stop the criminal behavior of those who prey on innocent investors in order to enrich themselves.”

“Postal Inspectors take very seriously their mission to deter the illegal use of the mails for any criminal activity,” said Acting Postal Inspector in Charge, Dana Carter. “We are committed to working together with our law enforcement partners to identify, investigate and bring to justice those who would attempt to mask their criminal activity through the use of the mail. Today’s sentencing should send a clear message to those individuals who are contemplating using the mails for their schemes to defraud, don’t do it.”

“To appear legitimate, Lundin used a slick sales pitch and phony documents to steal people’s life savings. His sole objective was to indulge his own extravagant lifestyle,” said Minnesota Commerce Commissioner Jessica Looman. “The Commerce Fraud Bureau is committed to investigating and stopping fraud in Minnesota. We hope that the sentence received by Lundin will deter others from committing fraud in our state.”

According to the defendant’s guilty plea, from approximately December 2014 until May 2017, LUNDIN claimed that he conducted “options trading” through his company Big Island Capital. LUNDIN worked through a network of associates and friends to solicit investors to invest with Big Island Capital by promising those potential investors exponential growth through options trading. LUNDIN solicited more than $1 million from at least 51 investors, but instead of using the funds for options trading, LUNDIN spent investors’ money to fund his and his wife’s lavish lifestyle.

According to the defendant’s guilty plea, as part of the scheme, LUNDIN provided victim investors with written materials relating to his purported investment strategy. Through these materials, LUNDIN claimed that the goal of Big Island Capital was to “generate profits with options trading” and that while he could not “guarantee” an exact percent, he would “shoot for” returns of between 40 percent and 80 percent. LUNDIN also entered into contract agreements with victim investors. These agreements, titled, “Big Island Capital Investment Advisory Agreement,” purported that the assets of Big Island’s account would be held for safekeeping in a brokerage account. LUNDIN regularly represented that the value of the account was several hundred thousand dollars. For example, “Welcome Packet” materials LUNDIN sent to a new victim investor on November 24, 2015, claimed that the firm’s capital was then $730,000 when, in reality, LUNDIN did not even open the brokerage account until December 21, 2015.

According to the defendant’s guilty plea, in order to appear legitimate and promote his scheme, LUNDIN created phony account statements. He also provided victim investors with online access to fictitious quarterly statements and purportedly “up to date” information about the rate of growth and the market value of the accounts, which commonly and falsely showed double-digit gains. As part of the scheme, LUNDIN directed his victim investors to make their checks payable to “Big Island Capital,” he would then deposit those checks into a bank account he had established in the company’s name. Between May 2015 and May 2017, at least $992,000 was deposited into that account. During roughly the same time period, however, LUNDIN transferred $933,950 from the business account directly into his and his wife’s personal checking account. LUNDIN and his wife used the majority of those investor funds on personal expenses including travel, luxury automobiles, a boat, jewelry, retail purchases, and more than $366,000 in credit card payments.

This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS, Federal Bureau of Investigation, United States Postal Inspection Service, and Minnesota Department of Commerce Fraud Bureau.

Assistant United States Attorney Amber M. Brennan prosecuted the case.

 

Defendant Information:

JEREMY RICHARD LUNDIN, 31

Mound, Minn.

Convicted:

• Mail fraud, 1 count
• Money laundering – transaction involving fraud proceeds, 1 count

Sentenced:

• 110 months in prison
• Three years of supervised release
• $969,788.96 in restitution

 

 

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The indictment of Usama Darwich Hamade, 53, Samir Ahmed Berro, 64, and Issam Darwich Hamade, 55, was announced today for their conspiring to illegally export goods and technology from the United States to Lebanon and to Hizballah, a designated foreign terrorist organization, in violation of the International Emergency Economic Powers Act (IEEPA), the Export Administration Regulations, and the International Traffic in Arms Regulations.  Defendants Usama Hamade and Issam Hamade are currently in custody in South Africa. Samir Ahmed Berro remains at large.

Acting Assistant Attorney General for National Security Edward C. O’Callaghan and U.S. Attorney Gregory G. Brooker of the District of Minnesota made the announcement.

According to the Indictment, from 2009 through December 2013, Usama Hamade, Berro and Issam Hamade willfully conspired to export and attempted to export from the United States to Lebanon, and specifically to Hizballah, goods and technology without obtaining the required export licenses from the U.S. Department of Commerce and the U.S. Department of State, in violation of IEEPA, the Export Administration Regulations, the Arms Export Control Act, and the International Traffic in Arms Regulations.

According to the Indictment, those goods included inertial measurement units (IMUs) suitable for use in unmanned aerial vehicles (UAVs), a jet engine, piston engines and recording binoculars.

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

This case is the result of an investigation conducted by the FBI, the U.S. Department of Commerce Office of Export Enforcement, and Homeland Security Investigations.

Assistant U.S. Attorneys John Docherty and David MacLaughlin are prosecuting the case, with assistance from Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.

United States Attorney Gregory G. Brooker today announced the indictment of USAMA DARWICH HAMADE, 53, SAMIR AHMED BERRO, 64, and ISSAM DARWICH HAMADE, 55, for conspiring to illegally export goods and technology from the United States to Lebanon and to Hizballah in violation of the International Emergency Economic Powers Act (“IEEPA”), the Export Administration Regulations, and the International Traffic in Arms Regulations. Defendants USAMA HAMADE and ISSAM HAMADE are currently in custody in South Africa. SAMIR AHMED BERRO remains at large.

According to the Indictment, from 2009 through December 2013, USAMA HAMADE, BERRO and ISSAM HAMADE willfully conspired to export and attempted to export from the United States to Lebanon, and specifically to Hizballah, goods and technology without obtaining the required export licenses from the U.S. Department of Commerce and the U.S. Department of State, in violation of IEEPA, the Export Administration Regulations, the Arms Export Control Act, and the International Traffic in Arms Regulations.

According to the Indictment, USAMA HAMADE, BERRO and ISSAM HAMADE caused the export of inertial measurement units (“IMUs”) suitable for use in unmanned aerial vehicles (“UAVs”), a jet engine, piston engines, and recording binoculars to Hizballah, designated by the U.S. Secretary of State as a “foreign terrorist organization.” As part of the conspiracy, in October 2009, USAMA HAMADE directed Individual A to order the jet engine and have it delivered to SAB Aerospace, a company owned by BERRO in the United Arab Emirates ("UAE"). BERRO then transshipped the jet engine to Hizballah co-conspirators in Lebanon. In September 2009 through November 2009, USAMA HAMADE directed Individual A to place orders for the digital compasses and the IMUs for delivery to South Africa, falsely telling Individual A that the parts would be used in UAVs in South Africa to fly over wildlife areas to prevent poaching. Instead, USAMA HAMADE transshipped the digital compasses and the IMUs to Hizballah co-conspirators in Lebanon.

As part of the conspiracy, in March and May of 2010, USAMA HAMADE directed Individual A to order additional IMUs to be sent to South Africa without telling Individual A that he intended to send the IMUs to Hizballah in Lebanon after receiving them in South Africa. As a consequence,

Individual A obtained an export license from the U.S. Department of State, which permitted the export of the IMUs to South Africa but prohibited their re-export without further authorization. In January 2010, ISSAM HAMADE and USAMA HAMADE directed Individual A to obtain an exhaust system for the jet engine, which was subsequently purchased online by Individual A.

As part of the conspiracy, between November 2009 ·and April 2010, BERRO caused 20 piston engines to be shipped from the U.S. to a temporary recipient in Frankfurt, Germany, and then on to SAB Aerospace in the UAE. From there, BERRO caused the piston engines to be shipped to Hizballah in Lebanon.

As part of the conspiracy, in December 2013, USAMA HAMADE directed Individual B to send the recording binoculars to Lebanon via a courier, who flew from Los Angeles to Beirut, Lebanon, where the binoculars were delivered to Hizballah.

As part of the conspiracy, between 2010 and 2011, ISSAM HAMADE made multiple wire transfers from a bank in Beirut, Lebanon to bank accounts controlled by USAMA HAMADE, totaling approximately $173,924.

This case is the result of an investigation conducted by the FBI, the U.S. Department of Commerce Office of Export Enforcement, and Homeland Security Investigations.

Assistant United States Attorneys John Docherty and David MacLaughlin are prosecuting the case.

 

Defendant Information:                                                                                                                     

USAMA DARWICH HAMADE, 53

Citizen of Lebanon and South Africa

Charges:

• Illegal export conspiracy, 1 count
• Smuggling, 1 count

 
SAMIR AHMED BERRO, 64
Citizen of Lebanon and the United Kingdom
 
Charges:

• Illegal export conspiracy, 1 count

 
ISSAM DARWICH HAMADE, 55
Citizen of Lebanon and the United Kingdom
 
Charges:

• Illegal export conspiracy, 1 count

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

WASHINGTON – A former IT employee for the Canadian Pacific Railway was sentenced today to one year and one day in prison for causing intentional damage to critical portions of Canadian Pacific’s computer network.

Acting Assistant Attorney General John P. Cronan of the Department of Justice’s Criminal Division, U.S. Attorney Gregory G. Brooker of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Field Office made the announcement. 

CHRISTOPHER VICTOR GRUPE, 46, was sentenced by U.S. District Judge Patrick J. Schiltz of the District of Minnesota. GRUPE was convicted of one count of intentional damage to a protected computer on Oct. 6, 2017, following a five-day jury trial in Minneapolis, Minnesota.

“The defendant in this case, a former IT professional, has been convicted of a felony, is going to prison, has lost his IT job and will likely never work in the IT industry again, and had to resign from the Army after losing his security clearance,” said Special Agent in Charge Thornton. “These are real consequences. The FBI, along with our law enforcement partners, will continue to aggressively pursue cases such as this to ensure that those with technical skills and trusted access to computer systems like Christopher Grupe who then betray that trust and commit computer crimes will be caught and punished.”

“Christopher Grupe chose to seek revenge on his employer by abusing company assets and insider knowledge that was entrusted to him to make the railroad safer, not more dangerous,” said Assistant U.S. Attorney Tim Rank. “Today’s sentence is an appropriate consequence for the defendant’s deliberate and malicious actions.”

As proven through evidence presented at the trial, from September 2013 until December 2015, GRUPE was employed as an IT professional by Canadian Pacific Railway (CPR), a transcontinental railroad company headquartered in Alberta, Canada, with U.S. headquarters in Minneapolis. On Dec. 15, 2015, following a 12-day suspension, GRUPE was notified by CPR management that he was going to be fired due to insubordination. However, at his request, GRUPE was instead allowed to resign, effective that same day. In his resignation letter, GRUPE indicated that he would return all company property, including his laptop, remote access device, and access badges, to the CPR office.

The evidence presented at the trial proved that on Dec. 17, 2015, before returning his laptop and remote access device, GRUPE used both to gain access to the CPR computer network’s core “switches” – high-powered computers through which critical data in the CPR network flowed. Once inside, GRUPE strategically deleted files, removed administrative-level accounts, and changed passwords on the remaining administrative-level accounts, thereby locking CPR out of these network switches. GRUPE then attempted to conceal his activity by wiping the laptop’s hard drive before returning it to CPR.

The evidence presented further showed that on Jan. 6, 2016, while trying to address a networking problem, the CPR network staff discovered that they were unable to access the main network switches. After CPR IT staff was able to regain access to the switches through a risky, but successful, rebooting procedure, they discovered evidence in logging data stored in the memory of the switches connecting the damage to GRUPE. CPR hired an outside computer security company to identify the source and scope of the intrusion as well as conduct an incident analysis, which also connected the damage to GRUPE.

This case is the result of an investigation conducted by the FBI, with assistance from the Digital Forensic Laboratory of the Criminal Division’s Computer Crime and Intellectual Property Section.

Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota and Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case.

 

Defendant Information:

CHRISTOPHER VICTOR GRUPE, 46

Minneapolis, Minn.

Convicted:

• Intentional damage to a protected computer, 1 count

Sentenced:

• One year and one day in prison

 

 

 

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A former IT employee for the Canadian Pacific Railway was sentenced today to one year and one day in prison for causing intentional damage to critical portions of Canadian Pacific’s computer network. 

Acting Assistant Attorney General John P. Cronan of the Department of Justice’s Criminal Division, U.S. Attorney Gregory G. Brooker of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Field Office made the announcement. 

Christopher Victor Grupe, 46, was sentenced by U.S. District Judge Patrick J. Schiltz of the District of Minnesota.  Grupe was convicted of one count of intentional damage to a protected computer on Oct. 6, 2017, following a five-day jury trial in Minneapolis, Minnesota.

As proven through evidence presented at the trial, from September 2013 until December 2015, Grupe was employed as an IT professional by Canadian Pacific Railway (CPR), a transcontinental railroad company headquartered in Alberta, Canada, with U.S. headquarters in Minneapolis. On Dec. 15, 2015, following a 12-day suspension, Grupe was notified by CPR management that he was going to be fired due to insubordination. However, at his request, Grupe was instead allowed to resign, effective that same day. In his resignation letter, Grupe indicated that he would return all company property, including his laptop, remote access device, and access badges, to the CPR office.

The evidence presented at the trial proved that on Dec. 17, 2015, before returning his laptop and remote access device, Grupe used both to gain access to the CPR computer network’s core “switches” – high-powered computers through which critical data in the CPR network flowed. Once inside, Grupe strategically deleted files, removed administrative-level accounts, and changed passwords on the remaining administrative-level accounts, thereby locking CPR out of these network switches. Grupe then attempted to conceal his activity by wiping the laptop’s hard drive before returning it to CPR.

The evidence presented further showed that on Jan. 6, 2016, while trying to address a networking problem, the CPR network staff discovered that they were unable to access the main network switches. After CPR IT staff was able to regain access to the switches through a risky, but successful, rebooting procedure, they discovered evidence in logging data stored in the memory of the switches connecting the damage to Grupe. CPR hired an outside computer security company to identify the source and scope of the intrusion as well as conduct an incident analysis, which also connected the damage to Grupe.

This case is the result of an investigation conducted by the FBI, with assistance from the Digital Forensic Laboratory of the Criminal Division’s Computer Crime and Intellectual Property Section.

Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota are prosecuting the case.

United States Attorney Gregory G. Brooker today announced that the United States has filed a Complaint-in-Intervention against the Cameron-Ehlen Group, Inc. d/b/a Precision Lens (“Precision Lens”) and Precision Lens’ owner PAUL EHLEN, and that DR. JITENDRA SWARUP has agreed to pay more than $2.9 million to resolve kickback allegations under the False Claims Act (“FCA”). 

The United States previously announced a $12 million settlement with Sightpath Medical, Inc. and TLC Vision Corporation (collectively “Sightpath”) and their former CEO, JAMES TIFFANY.

As part of the FCA Agreement and in exchange for a release of OIG’s permissive exclusion authority, DR. SWARUP has agreed to enter into a three-year integrity agreement with OIG.

“Federal health care beneficiaries should have confidence that the health care they receive is unaffected by kickbacks provided to their medical providers,” said United States Attorney Gregory Brooker. “Companies are not permitted to use expensive trips and other remuneration in order to persuade physicians to use products supplied by those companies, and physicians may not accept such remuneration in exchange for patient referrals.”

The United States’ Complaint against Precision Lens and EHLEN alleges that Precision Lens provided kickbacks to physicians in various forms, including travel and entertainment. The Complaint identifies multiple examples of trips, including luxury skiing vacations, and high-end fishing, golfing and hunting vacations.  For many of the trips, Precision Lens and EHLEN transported physicians to exclusive luxury vacation destinations on private jets.  Precision Lens and EHLEN also sold frequent flyer miles to their physician customers at a steep discount, enabling the physicians to take trips at well below fair market value. 

The Complaint-in-Intervention alleges that Precision Lens maintained a slush fund, also referred to internally at Precision Lens as a secret fund.  Precision Lens used money from the slush fund to finance trips with key physician customers and sales targets. 

In the settlement agreement with DR. SWARUP, the United States contends that from January 1, 2006, through January 1, 2015, DR. SWARUP received unlawful remuneration from Sightpath, Precision Lens and EHLEN, which resulted in the submission of false claims to the United States for ophthalmological products and services. Specifically, DR. SWARUP received various trips, including hunting and international fishing trips, which were used to induce, and attempt to induce, DR. SWARUP to use products and services distributed by these companies.  DR. SWARUP also received consulting agreements with Sightpath in excess of $100,000 per year, where the services were allegedly either not fully performed or not properly tracked, which resulted in remuneration in excess of fair market value.  

The $2.9 million settlement with DR. SWARUP resolves allegations filed in a civil lawsuit originally brought by a Relator, or whistleblower, under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government for false claims and to share in any recovery. The government often relies on whistleblowers to bring fraud schemes to light that might otherwise go undetected. The whistleblower in this matter, Kipp Fesenmaier, will receive 19.5% of the amounts recovered in connection with the settlement agreement.

The claims resolved by these settlements are allegations only; there has been no determination of liability or wrongdoing.

The case was handled by the Civil Frauds Unit of the U.S. Attorney’s Office for the District of Minnesota with assistance from the Office of Inspector General of the U.S. Department of Health and Human Services and the Federal Bureau of Investigation.

 

 

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United States Attorney Gregory G. Brooker today announced a superseding indictment charging JAMAAL MARQUIE MAYS, 33, and JAQUON KESHAWN MOMAN, 25, with robbery and firearms charges.

According to the indictment, on August 17, 2017, MAYS and MOMAN attempted to rob a Verizon Wireless store in Inver Grove Heights, Minn. while brandishing a firearm in the presence of a store employee. On July 10, 2017, MOMAN and another individual stole cash from a Metro PCS store in Minneapolis, Minn.

Because he is a felon, MAYS is prohibited under federal law from possessing any type of firearm at any time.

The Hobbs Act, passed by Congress in 1946, allows federal prosecutors to prosecute individuals who commit armed robberies of businesses engaged in interstate commerce.

This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Inver Grove Heights Police Department.

Assistant U.S. Attorney David P. Steinkamp is prosecuting the case.

 

Defendant Information:                                                                                                                     

JAMAAL MARQUIE MAYS, 33

Unknown

Charges:

• Interference with commerce by robbery, 1 count
• Using, carrying, brandishing and discharging a firearm during and in relation to a crime of violence, 1 count
• Felon in possession of a firearm, 1 count

 
JAQUON KESHAWN MOMAN, 25
Unknown
 
Charges:

• Interference with commerce by robbery, 2 counts
• Using, carrying, brandishing and discharging a firearm during and in relation to a crime of violence, 1 count

 

 

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

United States Attorney Gregory G. Brooker today announced the sentencing of three defendants for their involvement in a years-long, multi-million dollar heath care fraud and tax conspiracy. THURLEE BELFREY, 52, ROYLEE BELFREY, 52, and LANORE BELFREY, 43, each entered guilty pleas on September 14, 2017, and were sentenced yesterday before Senior U.S. District Judge Ann D. Montgomery in Minneapolis, Minn.

“For more than a decade, these three defendants each played a role in a scheme that garnered millions in illicit profits by cheating government health care programs that were funded by honest taxpayers and intended for the needy,” said Assistant U.S. Attorney Robert Lewis. “The sentences handed down are appropriate and just consequences.”

“Employers have a responsibility to their employees to withhold the proper amount of taxes and pay those taxes over to the IRS,” said IRS Criminal Investigation Acting Special Agent in Charge Hubbard Burgess, Saint Paul Field Office. “Because of employers like Thurlee Belfrey and Roylee Belfrey not complying with the tax laws, failing to turn over their employee’s withheld taxes results in a loss of tax revenue to the United States government but more importantly, it affects the loss of future social security or Medicare benefits for their employees.”

According to the defendants’ guilty pleas and documents filed in court, brothers THURLEE and ROYLEE BELFREY ran multiple health care businesses that received funds from the Medicaid and Medicare programs funded by the federal government and the State of Minnesota. In 2003, following an investigation by the Minnesota Attorney General’s Office into Royal Health Care, a business they started together in the 1990s, THURLEE BELFREY was convicted of felony theft by false representation. Based on his conviction, in 2004 the Minnesota Department of Human Services (DHS) and the United States Department of Health and Human Services (DHHS) excluded THURLEE BELFREY indefinitely from participating in state and federal health care programs, with no right to seek reinstatement for up to 20 years.

Despite this, and as he admitted in his guilty plea, THURLEE BELFREY conspired with his wife LANORE BELFREY to incorporate a new health care company, Model Health Care (Model), to continue the business operations and conceal THURLEE BELFREY’S involvement therein. To do this, and part of the scheme, LANORE BELFREY was named the owner of Model and intentionally failed to disclose THURLEE BELFREY’S involvement in managing the business. Despite being excluded, THURLEE BELFREY continued to manage Model. Government payment records show Model received more than $18,000,000 from Medicaid that would not have been paid but for the fraudulent misrepresentations made about THURLEE BELFREY’S lack of involvement in the businesses. According to the investigation, THURLEE and LANORE BELFREY received millions of dollars from Model during the scheme.

While THURLEE BELFREY ran Model, ROYLEE BELFREY operated several health care businesses as well. According to the defendants’ guilty pleas, between 2007 and 2013, THURLEE and ROYLEE BELFREY deducted and collected money from their employees’ wages, ostensibly for the payment of federal payroll taxes and Federal Insurance Contribution Act (FICA) taxes. However, they intentionally failed to pay the withheld taxes over to the IRS over the course of many years and, instead, used the money for other purposes, including attempts to develop a reality show based on their lives, high-end housing, a Caribbean cruise, luxury retail purchases, and thousands of dollars in cash withdrawals. In total, THURLEE and ROYLEE BELFREY admitted deducting and unlawfully using for their own benefit more than $3,960,000 in withheld taxes between 2007 and 2014.

This case is the result of an investigation conducted by the Minnesota Attorney General’s Office, the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation, and the Office of the Inspector General, United States Department of Health and Human Services.

Assistant U.S. Attorneys Robert Lewis and David Maria prosecuted the case.

 

Defendant Information:

 

THURLEE BELFREY, 52

Saint Paul, Minn.

Convicted:

• Conspiracy to defraud the United States, 1 count
• Failure truthfully to account for and pay over withheld taxes, 1 count

Sentenced:

• 96 months in prison
• Three years of supervised release
• $8,944,036.82 in restitution

 

ROYLEE BELFREY, 52

Saint Paul, Minn.

Convicted:

• Failure truthfully to account for and pay over withheld taxes, 2 counts

Sentenced:

• 60 months in prison
• Three years of supervised release
• $4,592,593.74 in restitution

 

LANORE BELFREY, 43

Minnetonka, Minn.

Convicted:

• Conspiracy to defraud the United States, 1 count

Sentenced:

• 15 months in prison
• Two years of supervised release
• $402,158.00 in restitution

 

 

 

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United States Attorney Gregory G. Brooker today announced a three-count indictment charging TNUZA JAMAL HASSAN, 19, with attempting to provide material support to a designated foreign terrorist organization, arson, and making a false statement. HASSAN will make her initial appearance before a United States Magistrate Judge at a later date.

According to the indictment, on September 19, 2017, HASSAN, a former student at St. Catherine University (SCU) in St. Paul, Minnesota, attempted to provide material support to a designated foreign terrorist organization, namely, al-Qa’ida. On September 22, 2017, in an interview with FBI Agents, HASSAN was asked whether she authored and delivered a letter to two fellow students at SCU in March 2017. The letter sought to encourage fellow students to “join the jihad in fighting” and to “[j]oin Al Qaeda, Taliban, or Al Shabaab.” HASSAN knowingly made a false statement to FBI Agents when she stated (1) she did not write the letter, (2) she did not know who wrote the letter, and (3) did not know how the letter came to be delivered to her fellow students.

According to the indictment, on January 17, 2018, HASSAN started several fires on the campus of SCU, including in St. Mary Hall, which she maliciously damaged. The fires set by HASSAN caused the St. Paul Fire Department to respond to SCU.

HASSAN was charged in Ramsey County District Court with one count of first-degree arson and is currently in custody at the Ramsey County Jail.

Assistant U.S. Attorney Andrew R. Winter is prosecuting the case.

This case is the result of an investigation conducted by the FBI-led Joint Terrorism Task Force, St. Paul Police Department, and arson investigators from the St. Paul Fire Department. 

 

Defendant Information:                                                                                                                     

TNUZA JAMAL HASSAN, 19

Minneapolis, Minn.

 

Charges:

• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization (al-Qa’ida), 1 count
• False Statement, 1 count
• Arson, 1 count

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

A Latvian man pleaded guilty yesterday for participating in a lucrative “scareware” hacking scheme that targeted visitors to the Minneapolis Star Tribune’s website. Acting Assistant Attorney General John P. Cronan of the Department of Justice’s Criminal Division; United States Attorney Gregory G. Brooker of the District of Minnesota; and Special Agent in Charge Richard T. Thornton of the Federal Bureau of Investigation-Minneapolis Field Office made the announcement.

“With this guilty plea, Mr. Sahurovs has taken responsibility for perpetrating a malicious cyber-fraud scheme on visitors of the Minneapolis Star Tribune website,” said U.S. Attorney Greg Brooker. “This Office along with our partners at the FBI are committed to pursuing and prosecuting cyber criminals who use sophisticated schemes such as this to victimize internet users.”

Richard Thornton, Special Agent in Charge at the FBI's Minneapolis Division, added that, “this particular scheme was dangerous on several levels, especially the use of a website belonging to a media institution. In this case, there were thousands of victims who lost millions of dollars, but the use of the media internet site is concerning because it has the potential to undermine the public's access to information, a pillar of American democracy. The FBI is committed to identifying these and other cyber criminals, and, with the help of our domestic and foreign partners, will work tirelessly to catch them no matter where they hide.”

PETERIS SAHUROVS aka “Piotrek” aka “Sagade,” pleaded guilty to one count of conspiracy to commit wire fraud before District Judge Ann D. Montgomery of the District of Minnesota.  SAHUROVS was arrested on a District of Minnesota indictment in Latvia in June of 2011, but was released by a Latvian court and later fled. In November of 2016, SAHUROVS was located in Poland and apprehended by Polish law enforcement and extradited to the United States in June of 2017. SAHUROVS was at one time the FBI’s fifth most wanted cybercriminal and a reward of up to $50,000 had been offered for information leading to his arrest and conviction. He will be sentenced on June 6.

According to admissions made in connection with his plea, from at least May 2009 to June 2011, SAHUROVS operated a “bullet-proof” web hosting service in Latvia, through which he leased server space to customers seeking to carry out criminal schemes without being identified or taken offline. The defendant knew that his customers were using his servers to perpetrate criminal schemes, including the transmission of malware, fake anti-virus software, spam, and botnets to unwitting victims, and he received notices from internet governance entities (such as Spamhaus) that his servers were hosting malicious activity. Nonetheless, he was familiar with these criminal schemes, took steps to protect them from being discovered or disrupted, and hosted them on his servers for financial gain.

SAHUROVS admitted that from in or about February 2010 to in or about September 2010, he registered domain names, provided bullet-proof hosting services, and gave technical support to a “scareware” scheme targeting visitors to the Minneapolis Star Tribune’s website. On February 19, 2010, the Minneapolis Star Tribune began hosting an online advertisement, purporting to be for Best Western hotels, on its website, startribune.com. Two days later, however, the advertisement began causing the computers of visitors to the website to be infected with malware. This malware, also known as “scareware,” caused visitors to experience slow system performance, unwanted pop-ups and total system failure. Website visitors also received a fake “Windows Security Alert” pop-up informing them that their computer had been infected with a virus and another pop-up that falsely represented that they needed to purchase the “Antivirus Soft” computer program to fix their security issues, at a price of $49.95.

Website visitors who clicked the “Antivirus Soft” window were presented with an online order form to purchase a purported security program called “Antivirus Soft.” Users who purchased “Antivirus Soft” would receive a file download that “unfroze” their computers and stopped the pop-ups and security notifications. However, the defendant admitted, the file was not a real anti-virus product and did not perform legitimate computer security functions, and merely caused malware that members of the conspiracy had previously installed to cease operating. Meanwhile, the defendant admitted, victim users who did not choose to purchase “Antivirus Soft” became immediately inundated with so many pop-ups containing fraudulent “security alerts,” that all information, data, and files on their computers were rendered inaccessible. Members of the conspiracy defrauded victims out of substantial amounts of money as a result of the scheme. The defendant admitted that as a result of his participation, he made between 150,000 and 250,000 U.S. dollars.

This case was investigated by the FBI’s Minneapolis Field Office.

The Criminal Division’s Office of International Affairs, as well as the Polish National Police, the National Prosecutor’s Office, and the Ministry of Justice provided substantial assistance. Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota and Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case. The Department’s Office of International Affairs also provided substantial assistance in this matter.

 

Defendant Information:

PETERIS SAHUROVS, 28

Rezekne, Latvia

Convicted:

• Conspiracy to commit wire fraud, 1 count

 

 

###

 

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United States Attorney Gregory G. Brooker announced the sentencing of BRANDON MARK BJERKNES, 35, to 300 months in prison for sexually exploiting dozens of children. BJERKNES, who pleaded guilty on September 28, 2017, to one count of coercion and enticement of a minor and one count of production of child pornography, was sentenced on February 6, 2018, before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minn.

“During his tenure as Assistant Principal of Bemidji Middle School, Brandon Bjerknes repeatedly victimized at least 55 vulnerable young girls and boys over the course of almost three years,” said Assistant U.S. Attorney Angela Munoz-Kaphing. “Today’s sentence ensures that this defendant is held accountable for his reprehensible crimes and our community, including the brave victims who shared their stories, will be safe from his predatory actions.”

“Preying on children is detestable. It is especially egregious when the predator is someone in a position of authority and trust,” said BCA Superintendent Drew Evans. “Partnering with our law enforcement partners and prosecutors, we will find these people and bring them to justice.”

The Beltrami County Sheriff’s Office is extremely satisfied to see this case against Brandon Bjerknes concluded in the federal courts,” said Sheriff Phil Hodapp. “Mr. Bjerknes violated his high position of trust and authority over the children in our schools and our community, so it was exceptionally important for us to see this case brought to justice.”

According to the defendant’s guilty plea and documents filed in court, since 2006, BJERKNES was employed by the Bemidji Area Schools and, beginning in 2014, served as the Assistant Principal of Bemidji Middle School until his resignation in April 2017. While holding the position of Assistant Principal, BJERKNES posed as a 13-15-year-old male named “Brett Larson,” and used various social media profiles on Facebook and Snapchat with “decoy photographs” to contact minor females and males in middle and high school. Using the alias profiles, BJERKNES directed the minor victims to send him sexually explicit photographs. BJERKNES also used the alias profiles to engage in sexually explicit conversations with the minor victims. Some of the minor victims BJERKNES contacted on social media were students at Bemidji Middle School.

According to the defendant’s guilty plea and documents filed in court, on March 20, 2017, law enforcement executed a search warrant at BJERKNES’ Bemidji residence. Officers seized a number of electronic devices including BJERKNES’ personal iPhone and work iPhone, multiple iPads, computers and external hard drives. The social media accounts and the electronic devices contained multiple sexually explicit photos and videos of multiple known minor victims. Law enforcement identified evidence that BJERKNES used the alias social media accounts to contact more than 50 minor victims.

This case is the result of an investigation conducted by the Minnesota Bureau of Criminal Apprehension and the Beltrami County Sheriff's Office.

Assistant United States Attorney Angela Munoz-Kaphing prosecuted the case.

 

Defendant Information:                                                                                                                     

BRANDON MARK BJERKNES, 35

Bemidji, Minn.

Convicted:

• Coercion and enticement of a minor, 1 count
• Production of child pornography, 1 count

Sentenced:

• 300 months in prison
• Lifetime of supervised release
• $8,789.93 in restitution thus far

 

 

###

 

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A Latvian man pleaded guilty today in Minneapolis for participating in a lucrative “scareware” hacking scheme that targeted visitors to the Minneapolis Star Tribune’s website.  Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Gregory G. Brooker of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Field Office made the announcement.

Peteris Sahurovs aka Piotrek and Sagade, 28, pleaded guilty to one count of conspiracy to commit wire fraud before District Judge Ann D. Montgomery of the District of Minnesota.  Sahurovs was arrested on a District of Minnesota indictment in Latvia in June of 2011, but was released by a Latvian court and later fled.  In November of 2016, Sahurovs was located in Poland and apprehended by Polish law enforcement and extradited to the United States in June 2017. Sahurovs was at one time the FBI’s fifth most wanted cybercriminal and a reward of up to $50,000 had been offered for information leading to his arrest and conviction.  He will be sentenced on June 6.

According to admissions made in connection with his plea, from at least May 2009 to June 2011, Sahurovs operated a “bullet-proof” web hosting service in Latvia, through which he leased server space to customers seeking to carry out criminal schemes without being identified or taken offline.  The defendant admitted that he knew his customers were using his servers to perpetrate criminal schemes, including the transmission of malware, fake anti-virus software, spam, and botnets to unwitting victims, and he received notices from Internet governance entities (such as Spamhaus) that his servers were hosting malicious activity.  Nonetheless, Sahurovs admitted he took steps to protect the criminal schemes from being discovered or disrupted, and hosted them on his servers for financial gain.

Sahurovs admitted that from in or about February 2010 to in or about September 2010, he registered domain names, provided bullet-proof hosting services, and gave technical support to a “scareware” scheme targeting visitors to the Minneapolis Star Tribune’s website.  On Feb. 19, 2010, the Minneapolis Star Tribune began hosting an online advertisement, purporting to be for Best Western hotels, on its website, startribune.com.  Two days later, however, the advertisement began causing the computers of visitors to the website to be infected with malware.  This malware, also known as “scareware,” caused visitors to experience slow system performance, unwanted pop-ups and total system failure.  Website visitors also received a fake “Windows Security Alert” pop-up informing them that their computer had been infected with a virus and another pop-up that falsely represented that they needed to purchase the “Antivirus Soft” computer program to fix their security issues, at a price of $49.95.

Website visitors who clicked the “Antivirus Soft” window were presented with an online order form to purchase a purported security program called “Antivirus Soft.”  Users who purchased “Antivirus Soft” would receive a file download that “unfroze” their computers and stopped the pop-ups and security notifications.  However, the defendant admitted, the file was not a real anti-virus product and did not perform legitimate computer security functions, and merely caused malware that members of the conspiracy had previously installed to cease operating.  Meanwhile, the defendant admitted, victim users who did not choose to purchase “Antivirus Soft” became immediately inundated with so many pop-ups containing fraudulent “security alerts” that all information, data, and files on their computers were rendered inaccessible.  Members of the conspiracy defrauded victims out of substantial amounts of money as a result of the scheme.  The defendant admitted that as a result of his participation, he made between $150,000 and $250,000 U.S. dollars.

This case was investigated by the FBI’s Minneapolis Field Office.  The Criminal Division’s Office of International Affairs, as well as the Polish National Police, the National Prosecutor’s Office, and the Ministry of Justice provided substantial assistance. Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota and Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case. The Department’s Office of International Affairs also provided substantial assistance in this matter.

United States Attorney Gregory G. Brooker today announced the sentencing of JARED DANIEL JONES, 23, to 360 months in prison for the murder of two individuals, including one minor victim. JONES, who pleaded guilty to two counts of murder in the second degree, was sentenced on February 2, 2018, before Senior Judge Donovan W. Frank in U.S. District Court in St. Paul, Minn. 

According to the defendant’s guilty plea and documents filed in court, on October 15, 2014, within the exterior boundaries of the Red Lake Indian Reservation, JONES stabbed to death an unarmed juvenile victim with whom he had an ongoing gang dispute. JONES and his fellow gang members ambushed and stabbed the victim and left him on a trail to die.

According to the defendant’s guilty plea and documents filed in court, on January 20, 2016, JONES and another individual drove the victim, identified as R.B., to a remote area of the Red Lake Indian Reservation. JONES and his accomplice assaulted R.B., stole his vehicle, and left him in the cold, without proper clothing or transportation, which resulted in R.B.’s death from exposure to hypothermic conditions.

The case was investigated by Red Lake Department of Public Safety, the Federal Bureau of Investigation, the FBI Headwaters Safe Trails Task Force, and the Minnesota Bureau of Criminal Apprehension Forensic Science Laboratory.

Assistant U.S. Attorney Clifford B. Wardlaw prosecuted the case.

 

Defendant Information:                                                                                                                     

JARED DANIEL JONES, 23

Red Lake, Minn.

Convicted:

• Murder in the second degree, 2 counts

 
Sentenced:

• 360 months, count 1
• 262 months, served concurrently, count 2
• Five years supervised release

 
 
###
 
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Remarks as prepared for delivery.

 

Good Morning.  Thank you to Acting Deputy Assistant Attorney General Richard Downing for the introduction and thank you to Attorney General Sessions and Associate Attorney General Brand for hosting this Summit.   As noted, I am Greg Brooker, the United States Attorney for the District of Minnesota.  I am pleased to be here today to talk about an issue that my office is deeply committed to, and that the Department has placed such a high priority on:  Prosecuting Human Trafficking Cases.

It is timely that this Summit comes at the end of Human Trafficking Awareness Month and with the Super Bowl taking place just two days from now in my home town of Minneapolis.  I would like to take this opportunity to highlight trends and cases in my federal district, as well as talk about some of the proactive work we have done to prepare for a potential uptick in human trafficking during one of the world’s largest sporting events.

Sex trafficking is a market-driven enterprise, and empirical data show that a major sporting event like the Super Bowl can bring about an increase in online sex ads on Craigslist, Backpage, and other places.  We also know from recent research studies that those who purchase commercial sex are not confined to one demographic group -- they come from all walks of life.  According to a recent survey of 750 men in Minnesota, most sex buyers are men between the ages of 30 & 60.  More than 70 percent of them are white, and half are married. Nearly 70 percent have kids and almost half make $50,000 or more a year.

A recent assessment by the Human Smuggling and Trafficking Center (HSTC) concludes that high profile events with large crowds, like the Super Bowl, can be attractive targets for sex traffickers, and we know that there is a short-term uptick in advertisements during this period.

In preparation for the Super Bowl in Minneapolis, an Anti-Sex Trafficking Team with over 40 organizations was created to map out strategies to crack down on sex trafficking - from all angles - across the entire state. The Team is led by Hennepin County, which is Minneapolis, and Ramsey County, which is St. Paul.  And the Team includes the US Attorney’s Office, Carlson Family Foundation and the Women’s Foundation of Minnesota, which have both been leaders on this issue.  The Team also includes representatives from nonprofits, hospitals, private businesses, and law enforcement entities and has been supported by the National Football League.  

So what has this Team been up to?  We have developed a plan that includes additional emergency shelter beds, increased street outreach and a hotline to report trafficking related tips.  We have created a 24-hour, fully staffed hotline to ensure victims can immediately find safe shelter. Service providers have worked with city governments to relax zoning requirements if needed during the timeframe of the Super Bowl to ensure that no one will be denied space in a shelter in the cold winter months in Minnesota. What is especially unique is that this Team not only brought together private and public sector stakeholders, but it includes the key voices of sex trafficking survivors.

The Team designed multiple public awareness campaigns, specifically for the Super Bowl, including the “Don’t Buy it” campaign, designed to educate men and boys about sex trafficking.  This campaign aims to focus on the demand side.

Here’s a short clip of the “Don’t Buy It” Public Service Announcement running in Minnesota and Online:

 “Don’t Buy it” https://www.youtube.com/watch?v=AVE4Z2RXsCc

The Team also created a campaign aimed at preventing at-risk youth from being trafficked. The “I Am Priceless” campaign is geared toward youth between the ages of 8 and 12 who are at risk for being trafficked.  The Team sought the input of youth who are trafficking survivors to develop the campaign, which is focused on reaffirming self-esteem and self-worth. These campaign ads are on posters at malls, on bus shelters, murals, billboards, and include a 30-second radio spot. They are being featured on social media apps like Instagram, Facebook, Snapchat and YouTube.   Here’s a short clip of the “I am Priceless” video:

“I Am Priceless” https://vimeo.com/240218675

In the months leading up to the Super Bowl, bus drivers, hotel workers and all 10,000 Super Bowl volunteers received training on how to identify sex trafficking when they see it and where to report it.   In addition, U.S. Bank has taken the lead to train internal investigators and analysts to identify trends and red flags that may be human trafficking indicators – this new Team is reporting directly to law enforcement.

A collaborative team of dozens of local police departments and federal agencies, led primarily by Homeland Security Investigations, FBI, and the Minneapolis Police Department, has made great efforts to plan and execute proactive strategies such as coordinating targeted sex trafficking stings during the week of the Super Bowl. And multiple arrests have been made. 

Human trafficking, of course, is not limited to large-scale events like the Super Bowl.  Sadly, these crimes against human rights occur 365 days a year.  It is a prevalent and persistent problem that shows its face in many disturbing ways, yet often remains hidden in plain sight.

Many people wouldn’t think of Minnesota as one of the prime locations for human trafficking; however, the FBI has identified the Twin Cities as the nation’s 13th largest location for child sex trafficking in the country.  Minnesota is unique in its geography, its diverse populations and its major industries. The Twin Cities represent a large metropolitan area that is home to more than a dozen Fortune 500 companies, a major international airport, the largest shopping mall in the United States, as well as multiple major league sports teams and event venues. We also share our northern border with Canada, we have an international shipping port in Duluth, and through our interstate corridors we are directly connected to other large Midwestern cities such as Chicago, St. Louis, and Milwaukee. The State has 11 federally recognized Indian Tribes and is home to many immigrant groups, including sizable Hmong, Somali, Ethiopian, and Liberian communities. Minnesota pretty much has everything. However, the things that make our state unique are also the things that present human trafficking vulnerabilities.  Minnesota is also nationally recognized as a leader on human trafficking awareness – its Safe Harbor Law served as a template for federal legislation. This is why the fight against human trafficking is a crucial mission that none of us can afford to ignore or to only emphasize during a Super Bowl.

In 2016, the district was one of only six districts designated as an Anti-Trafficking Coordination Team (ACTeam) location. This is a collaborative initiative among my office, the FBI, the Department of Homeland Security and the Department of Labor. Through this initiative, we focus on developing high impact human trafficking investigations and prosecutions, as well as developing strong partnerships with victim service providers and state and local law enforcement partners.

I am proud of the depth and breadth of the work of my office, in conjunction with our partners in federal, tribal, state, and local law enforcement. Together we have investigated and prosecuted trafficking cases ranging from large-scale, transnational organized criminal enterprises, to individual traffickers who target minor victims, to labor traffickers who prey on vulnerable, often foreign-born populations.

We know that as people go about their busy lives they usually aren’t paying attention to indicators of human trafficking, so these crimes often occur in plain sight. That’s why through our federal and state law enforcement task forces in Minnesota, we have trained those on the front lines to identify signs of human trafficking and to report it to law enforcement. Throughout the year, we are focusing our training efforts on employees who work in hotels, airports, casinos and other hospitality and entertainment occupations. We are also reaching out to schoolteachers and administrators, bankers, transportation industry workers, hospital workers and faith communities. These trainings throughout Minnesota have resulted in actionable tips that have contributed directly to the successful investigation and prosecution of human traffickers.   We have also collaborated with an organization called “COAST” – Club Operators Against Sex Trafficking – to provide education and training to owners and employees of adult entertainment clubs who may be most likely to encounter the signs of a sex trafficking victim – currently my office is investigating such tips now.

Let me highlight a handful of the cases we’ve handled that are result of some of these tips.

Last year, in a wealthy suburb of St. Paul, local police officers encountered a woman wandering the streets at night, bloody, beat up and frail. She was heading in the direction of the airport. They stopped and spoke to the woman and because of their recent training; the officers were able to quickly recognize that the woman was a victim of human trafficking and were able to access the appropriate help and resources for her, including involving Homeland Security Investigations from the outset. The subsequent investigation revealed that the woman endured horrific abuse at the hands of the defendant, Lili Huang. In addition to being held against her will and forced to work up to 18 hours a day, the victim was kicked, punched, grabbed by her hair and threatened with knives. The victim told law enforcement that she hid clumps of her hair, which had been grabbed and torn out by the defendant, under her mattress so that she wouldn’t be forced to eat it. My Office worked hand in hand with our state and local law enforcement partners to achieve a successful prosecution of the defendant, who was ultimately sentenced to more than a year in custody after which she will be deported to China, ordered to pay over $100,000 in restitution to the victim and to third-party victim services, and required to forfeit her house.

In another all too common scenario, last year four teenage girls testified at a federal trial against a trafficker who had sold them for sex in the Twin Cities. The investigation began when a concerned mother reached out to her local Sheriff’s Office to report that a man named Deuvontay Charles was recruiting her 17-year-old daughter to engage in prostitution. In the defendant’s Facebook messages, he described how the girl could “make money” and promised a trip to Las Vegas and that “life will be smooth sailing.”  He told her that he would provide condoms and protect her from the “clients.” The defendant also instructed the young girl to save his phone number as “Daddy.”

That initial report led to law enforcement identifying additional juvenile victims. A 14-year-old girl told law enforcement that this same defendant had requested sexually-explicit images of her. The defendant also sent two pornographic images of an adult female and instructed the 14-year-old victim to send pictures of herself in similar sexual poses.

The defendant trafficked a second victim, who was also only 14-years-old, and used her to produce sexually-explicit images. Charles asked the victim to make a video of herself engaged in sexual acts. While recruiting the victim, the defendant asked if she wanted “to make money.” When she asked what he meant, Charles replied “sex.”  Knowing she was only 14-years-old, Charles responded that while she is “kinda young,” there would be a lot of money to make.

Charles preyed on yet another victim. He sent messages to a 17-year-old about making “quick money.” After picking the victim up in a Minneapolis suburb, he posted her as an “escort” on backpage.com. He then made a hotel reservation using an alias and paid for the room in cash. For the next several days, the defendant sold the victim for commercial sex and kept all the money the victim received as a result of the sex acts that she was forced to engaged in.

At the time he committed these offenses, Charles was a registered sex offender based on a prior conviction for soliciting a child to engage in sexual conduct.

Clearly, this man is a predator who targeted vulnerable young girls. Justice was served when the victims’ important testimony led to Charles’ conviction and a thirty-six year sentence in federal prison.

Our office is also actively prosecuting one of the largest transnational sex trafficking cases in the nation. This particular case is truly remarkable because of the collaborative efforts of multiple law enforcement agencies, victim service providers, and industry partners across multiple jurisdictions who took on this case and attacked the international criminal enterprise from every angle.

The investigation started through good old fashion police work. A federal agent with Homeland Security Investigations received a report from her HSI colleagues in Arizona that multiple Thai women were being trafficked in Arizona and the operation was moving some of the women to Minneapolis. Our office commenced an investigation with our federal and local law enforcement partners and, eventually, other federal, state and local jurisdictions from around the country.

We worked with multiple U.S. Attorneys’ offices, HSI, state and local law enforcement across the country, the Department of State, as well as components within the Department of Justice including the Human Trafficking Prosecution Unit and the Money Laundering and Asset Recovery Section. Through surveillance, review of records and receipts, and other techniques, law enforcement learned that these victims were being trafficked in nearly every major city throughout the U.S. under the watchful eye of a massive criminal organization.

I would like to take a moment to describe the vast criminal enterprise that was responsible for trafficking hundreds of impoverished women from Bangkok, Thailand, to cities through the United States, including Minneapolis, Los Angeles, Chicago, Atlanta, Phoenix, Las Vegas, Houston, Dallas, Austin, Seattle and right here in the nation’s capital. Putting the pieces together required close coordination with international, national, state and local partners. It is the result of more than four years’ worth of work, and begins the current prosecution process of dismantling a highly profitable operation that generated millions of dollars through a highly sophisticated sex trafficking scheme.

These victims typically came from impoverished backgrounds and spoke little English- vulnerabilities that the traffickers exploited during the recruitment process. The women were promised a better life in the United States in exchange for a large “bondage debt,”  of anywhere between $40,000 and $60,000. The women were told that, after they worked off their debt, they could become U.S. citizens. The recruiters who met with them in Thailand were friendly, helpful and made the future in the United States sound bright. They brought them to photography studios to take professional-quality, escort-style photographs, which ultimately were sent to traffickers here in the United States and used to advertise the victims for sex on websites.  The traffickers also encouraged the women to get breast implants in an effort to make the women “more appealing” to men in the U.S. The cost of the cosmetic surgery was added to the victims’ bondage debt.

When the women arrived in the U.S., everything changed. They were essentially held prisoner in prostitution houses and only allowed to leave if accompanied by an employee of the organization.  The women were forced to have sex with strangers for many hours every day, even if the men were abusive. They were threatened by the organization. The traffickers ensured that the women remained isolated in the United States. They had little money, no freedom of movement, and no interaction with the outside world.

The structure of this sex trafficking organization was hierarchical. It consisted of Traffickers, House Bosses, Money Launderers, Facilitators and Runners. Each of these players had their own clearly defined role to play in keeping this criminal organization profitable.

At the top of the organization were the Traffickers.  Traffickers in the United States and in Thailand were responsible for recruiting the victims and controlling the bondage debt. They learned everything they could about the women, including detailed information about their families.

The information obtained about the victims’ families was an important part of the scheme.  Armed with this information, the traffickers threatened anyone who wanted to or tried to escape the organization, including threats that their families would be harmed if the women did not do everything they were told.

The traffickers also determined where in the United States the women would be sent.  But first, they had to get the women into the U.S.  The traffickers did this by engaging in widespread visa fraud, including arranging sham marriages and lying on visa applications, in order to facilitate the travel of the women from Thailand into the United States. Once in the U.S., the women were sent to one of many houses of prostitution.

The House Bosses, who reported to the traffickers, were responsible for the day-to-day operations of these houses. They advertised the women, usually on websites like backpage.com, scheduled sex buyers, and ensured that the cash earned by the victim was routed back to the trafficker, with the house boss taking her cut. Little money was left for the victim herself to pay off the bondage debt.

The Facilitators assisted in the money laundering and other activities of the organization. They helped lease apartments and other locations used as houses of prostitution, book travel, advertise the women, and schedule commercial sex acts. They were also responsible for laundering and routing millions of dollars generated through this commercial sex trade.

And, finally, there were the Runners.   The trafficking organization feared the women would try to escape, so the runners accompanied them when they left the house, apartment, or hotel room. The runners were also responsible for bringing them to and from the airport. The organization regularly moved the woman to different cities so that the women did not develop connections, to generate new clientele and to supply new markets. Runners also took them to the bank where the victims would deposit the payments on their bondage debt. The runners were typically men, and were often paid, at least in part, in sex with the victims.

This prosecution has been a massive undertaking.  As noted, to date, it is one of the largest federal sex trafficking prosecutions in the United States.  In total, we have publicly indicted 38 members of the organization.

Seventeen have thus far pleaded guilty. A trial date has been set for early May for the remaining defendants. Hundreds of victims have been recovered around the country. Millions of dollars have been seized, which will go toward much-deserved restitution to the victims. Weapons have also been confiscated.

One thing I would like to emphasize in particular is our work in helping the victims find hope and a sense of justice. As noted, this organization made millions of dollars annually and the prosecution team is working to secure that money for victim restitution. The DOJ Money Laundering and Asset Recovery Section (MLARS) is playing an integral role in this aspect of the case. MLARS has documented more than $25 million in proceeds from the commercial sex acts having been laundered back to the traffickers. When dealing with this level of organized crime, we know that we can only shut down a sophisticated sex trafficking organization when we take away their money.

My office has also collaborated with an organization in Los Angeles called the Thai Community Development Center, a DOJ grantee. They specialize in working with the Thai population to help provide victims with access to culturally sensitive and language specific resources and services. Today, some of the victims have learned English, some are taking vocational courses, and some are living independently and finding a future.

We take seriously the Department of Justice’s directive to take a victim-centered approach to our trafficking cases and, thankfully, Minnesota has unique resources that provide exceptional services to stabilize and support victims throughout a case’s full investigation and prosecution.

In conclusion, while the increased awareness and attention that the Super Bowl brings to this issue is important, I want to again emphasize that human trafficking is not a problem unique to the Super Bowl or any other major event. If we want to get the problem of human trafficking under control, awareness and enforcement efforts must continue long after the big game is over.

 

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United States Attorney Gregory G. Brooker today announced the conviction of SCOTT FRANCIS FORTIER, 38, for producing and possessing video files containing child pornography. FORTIER, who was charged in a superseding indictment on August 23, 2017, with one count of production of child pornography and one count of possession of child pornography, was found guilty on both counts by a federal jury in Minneapolis, Minn.

 

“This disturbing case involved a defendant who preyed on two minor victims whom he met at a horseback riding summer camp,” said Special Assistant U.S. Attorney Lindsey Middlecamp. “After hearing the evidence presented at trial, the jury swiftly returned a guilty verdict. I am thankful to the victims who courageously testified at trial and to the jury for rendering this just verdict.”

 

As proven at trial, FORTIER was associated for many years with Circle R Ranch (“the Camp”), a co-ed horseback riding summer camp located in Todd County, Minn. Through his involvement with the Camp, FORTIER met a 17-year-old minor (“Minor Victim #1). On September 9, 2016, FORTIER invited Minor Victim #1 and her 15-year-old friend (Minor Victim #2) to his house in Blaine, Minn., where he gave them both alcohol and subsequently used each minor to engage in sexually explicit conduct. FORTIER used his cell phone to produce multiple videos of himself engaging in the sexually explicit conduct with Minor Victim #1 and Minor Victim #2. Following an execution of a search warrant, law enforcement discovered that FORTIER also possessed videos of children under the age of 12 engaging is sexually explicit conduct, along with thousands of other images of child pornography.

 

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

 

This case is the result of an investigation conducted by the Anoka County Sheriff’s Office, the Todd County Sheriff’s Office, and the FBI.

 

Based on the evidence obtained in this case, authorities believe there may be additional victims who have not yet been identified. Anyone with information about this matter is encouraged to call the FBI at 763-569-8395. Callers may remain anonymous.

 

Assistant U.S. Attorney Carol M. Kayser and Special Assistant U.S. Attorney Lindsey E. Middlecamp are prosecuting this case.

 

 

Defendant Information:

 

SCOTT FRANCIS FORTIER, 38

Blaine, Minn.

 

Convicted:

• Production of child pornography, 1 count
• Possession of child pornography, 1 count

 

 

###

 

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United States Attorney’s Office, District of Minnesota: (612) 664-5600

 

 

The Department of Justice announced today that DJO Global Inc. (DJO), a medical device company headquartered in Vista, California, has agreed to pay $7.62 million to resolve allegations that its subsidiary, Empi Inc. (Empi), a now-defunct medical device company based in Shoreview, Minnesota, submitted false claims to TRICARE for excessive, unnecessary transcutaneous electrical nerve stimulation (TENS) electrodes that TRICARE beneficiaries did not need or use.  TENS is a therapy that uses low-voltage electrical current for pain relief.

 

The settlement resolves allegations that Empi used inappropriate techniques such as “assumptive selling” to persuade some TRICARE beneficiaries to seek and accept unjustifiably large quantities of TENS electrodes from 2010 through 2015, with a particularly steep increase in the number of beneficiaries receiving unnecessary quantities in 2014-2015.  Assumptive selling consisted of Empi sales representatives contacting some TRICARE beneficiaries and inducing them to order excessive TENS electrodes by acting as though the beneficiaries had indicated a need for them, when that may not have been the case.

 

DJO announced its decision to shut down Empi in November 2015, and Empi ceased operations the following month.

 

“We commend the Defense Health Agency and the Department of Defense Office of Inspector General for analyzing this conduct and working with the Department to guard the integrity of TRICARE, a vital federal health care program that provides medical care and services to those in the military and their families,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.

 

“Service members, veterans, and their families deserve the best available medical care,” said United States Attorney Gregory G. Brooker. “This $7.6 million settlement underscores our commitment to protecting the integrity of federal health care programs and it sends a strong message of accountability to those who would seek to take advantage of those programs.”

 

“This settlement demonstrates the commitment of the Defense Criminal Investigative Service (DCIS), along with our law enforcement partners, to aggressively pursue the waste, fraud, and abuse of Department of Defense and TRICARE resources,” said Special Agent in Charge Michael Mentavlos of the DCIS Southwest Field Office.‎

 

The settlement is the most recent in the federal government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act, under which this matter was resolved.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

 

This matter was handled by the Civil Frauds Unit of the U.S. Attorney’s Office for the District of Minnesota, the Justice Department’s Commercial Litigation Branch, and the Department of Defense Office of the Inspector General.

 

The claims settled by this agreement are allegations only; there has been no determination of liability.

WASHINGTON – The Department of Justice announced today that DJO Global Inc. (DJO), a medical device company headquartered in Vista, California, has agreed to pay $7.62 million to resolve allegations that its subsidiary, Empi Inc. (Empi), a now-defunct medical device company based in Shoreview, Minnesota, submitted false claims to TRICARE for excessive, unnecessary transcutaneous electrical nerve stimulation (TENS) electrodes that TRICARE beneficiaries did not need or use. TENS is a therapy that uses low-voltage electrical current for pain relief.

 

The settlement resolves allegations that Empi used inappropriate techniques such as “assumptive selling” to persuade some TRICARE beneficiaries to seek and accept unjustifiably large quantities of TENS electrodes from 2010 through 2015, with a particularly steep increase in the number of beneficiaries receiving unnecessary quantities in 2014-2015. Assumptive selling consisted of Empi sales representatives contacting some TRICARE beneficiaries and inducing them to order excessive TENS electrodes by acting as though the beneficiaries had indicated a need for them, when that may not have been the case.

 

DJO announced its decision to shut down Empi in November 2015, and Empi ceased operations the following month.

 

“We commend the Defense Health Agency and the Department of Defense Office of Inspector General for analyzing this conduct and working with the Department to guard the integrity of TRICARE, a vital federal health care program that provides medical care and services to those in the military and their families,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.

 

“Service members, veterans, and their families deserve the best available medical care,” said United States Attorney Gregory G. Brooker. “This $7.6 million settlement underscores our commitment to protecting the integrity of federal health care programs and it sends a strong message of accountability to those who would seek to take advantage of those programs.”

 

“This settlement demonstrates the commitment of the Defense Criminal Investigative Service (DCIS), along with our law enforcement partners, to aggressively pursue the waste, fraud, and abuse of Department of Defense and TRICARE resources,” said Special Agent in Charge Michael Mentavlos of the DCIS Southwest Field Office.‎

 

The settlement is the most recent in the federal government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act, under which this matter was resolved. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

 

This matter was handled by the Civil Frauds Unit of the U.S. Attorney’s Office for the District of Minnesota, the Justice Department’s Commercial Litigation Branch, and the Department of Defense Office of the Inspector General.

 

The claims settled by this agreement are allegations only; there has been no determination of liability.

 

 

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United States Attorney’s Office, District of Minnesota: (612) 664-5600

United States Attorney Gregory G. Brooker today announced a federal criminal complaint charging JOSEPH SEAN ANTHONY PORTER, 25, with the kidnapping of an Edina woman. PORTER is currently in custody in Little Rock, Arkansas and will make an initial appearance before a United States Magistrate Judge at a later date.

 

Alleged in the criminal complaint and law enforcement affidavit is a detailed timeline of PORTER’S actions related to the kidnapping offense. The criminal complaint (including the affidavit) is attached as a pdf document.

 

The Edina Police Department and the Federal Bureau of Investigation are leading the investigation with assistance from various other state and local law enforcement agencies.

 

This case is being prosecuted by Assistant United States Attorney Karen B. Schommer.

 

 

Defendant Information:

 

JOSEPH SEAN ANTHONY PORTER, 25

Jacksonville, Ark.

 

Charges:

• Kidnapping, 1 count

 

 

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Additional news available on our website.

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United States Attorney’s Office, District of Minnesota: (612) 664-5600

 

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The charges contained in the criminal complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.