District Not Recorded

Austin Powder Company, owner and operator of the Red Diamond explosives manufacturing plant located near McArthur, Ohio, has agreed to implement significant upgrades to that facility’s wastewater treatment operations to resolve numerous Clean Water Act violations. It will also pay a civil penalty of $2.3 million.

The complaint, filed contemporaneously with the settlement, alleges that since 2013 the facility has had hundreds of discharges of pollutants in violation of the effluent limitations in its permits and failed to fully comply with an earlier EPA Administrative Order on Consent which sought to resolve these concerns.

“Industrial dischargers must ensure their operations do not foul our nation’s waters,” said Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division. “The improvements required by this settlement will greatly improve Austin Powder’s compliance with its permits and improve the health of the Ohio River and its tributaries.”

“This settlement will prevent tens of thousands of pounds of pollutants from entering Ohio streams and rivers each year,” said Acting Assistant Administrator Larry Starfield for EPA’s Office of Enforcement and Compliance Assurance. “Ohio communities will benefit from cleaner water and a healthier environment.”

Under the proposed settlement, Austin Powder will invest approximately $3 million to improve two of its wastewater treatment plants, including implementing comprehensive operation and maintenance plans. The company has already eliminated discharges from four other on-site plants and under the consent decree will eliminate discharges from a fifth plant. These improvements will be completed on or before Dec. 31.

This agreement will improve water quality in the tributaries of Raccoon Creek and Elk Fork, both of which are tributaries to the Ohio River. Implementing the consent decree will reduce pollutants discharged from the Red Diamond Plant into these two water bodies by approximately 84,000 pounds annually.

The proposed consent decree is subject to a 30-day public comment period and final court approval after it is published in the Federal Register. To view the consent decree or to submit a comment, visit the Department of Justice website at: www.justice.gov/enrd/Consent_Decrees.html.

Louisiana-based company Power Performance Enterprises Inc. (PPEI) and its President and owner, Kory B. Willis, pleaded guilty to criminal charges today in federal court in Sacramento, California. Both defendants pleaded guilty to conspiracy to violate the Clean Air Act and to violating the Clean Air Act by tampering with the monitoring devices of emissions control systems of diesel trucks. 

In addition to the criminal charges, the United States also filed a civil complaint against PPEI and Willis today in federal court in the Western District of Louisiana, alleging violations of the Clean Air Act’s prohibition against the sale or manufacture of devices that bypass, defeat, or render inoperative emissions controls. Under the criminal plea agreements and a proposed civil consent decree, PPEI and Willis agreed to pay a total of $3.1 million in criminal fines and civil penalties. Under the civil settlement, both Willis and the company agree not to manufacture, sell or install any device that defeats emissions controls.

“The manufacture and sale of illegal delete devices and tunes such as the ones targeted by today’s actions put at risk decades of progress in controlling harmful pollution from motor vehicles in this country,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “As the plea agreements and civil settlement show, we will vigorously enforce the prohibitions on delete devices and tunes, using all appropriate enforcement tools.” 

“The defendants sold products nationwide that allowed drivers to illegally tamper with emissions controls in a manner that caused dramatic increases in emissions,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “Environmental laws that control diesel pollution protect the environment and the health of the general public and are especially important to protect sensitive populations such as the young, the elderly, and people who suffer from respiratory conditions. Thanks to the work of the EPA, these guilty pleas will send a message to the delete device industry that disregarding federal environmental laws will result in federal charges. The U.S. Attorney’s Office will continue to vigorously prosecute those who place profit above the public’s health and the environment.” 

“The actions of Power Performance Enterprises Inc. and its President and owner, Kory B. Willis, that advanced them to the top of the delete tuning market have caused and will continue to cause the emissions of dangerous compounds into the environment which could contribute to serious health issues,” said U.S. Attorney Brandon B. Brown for the Western District of Louisiana. “This proposed civil settlement sends a clear message that these types of violations will not be tolerated and those who violate these environmental laws will be held accountable.”

“EPA estimates that the defeat devices illegally sold by the defendants are expected to cause the release of over 100 million pounds of excess air pollutants over the life of the diesel trucks in which they were installed,” said Acting Assistant Administrator Larry Starfield for EPA’s Office of Enforcement and Compliance Assurance. “This case clearly demonstrates the negative environmental impact of defeat devices and EPA’s commitment to vigorously enforcing laws designed to protect public health and the environment.” 

According to court documents, from PPEI’s incorporation in 2009 until 2019, PPEI and Willis were among the nation’s most prominent developers of custom software known as “tunes,” and in particular, “delete tunes.” Generally, tunes can alter a diesel truck’s fuel delivery, power parameters and emissions. PPEI and Willis were well known for their custom delete tunes, software which allows a “deleted” truck to appear to run normally. A deleted vehicle is one that has had emissions controls removed or disabled, resulting in vastly increased emissions of air pollution.

Willis and PPEI reached the top of the illegal delete tuning market, tuning over 175,000 vehicles according to Willis. Willis also stated that PPEI was the biggest custom tuning company in the world, had over 100,000 customers, and tuned more than 500 vehicles a week. According to internal PPEI records, PPEI typically sold well over $1 million dollars of product a month. According to EPA calculations of the estimated emissions impact, PPEI’s sales of delete tunes between 2013 and 2018 alone are anticipated to cause over 100 million excess pounds of nitrogen oxides (NOx) emissions over the life of the diesel trucks equipped with those products.  

Deleting a diesel truck causes its emissions to increase dramatically. For example, for a fully deleted truck, which has had all emissions equipment removed or disabled, EPA testing quantified the increased emissions as follows: NOx increased 310 times, non-methane hydrocarbons increased 1,400 times, carbon monoxide increased 120 times, and particulate matter increased 40 times. EPA’s Air Enforcement Division released a report in November 2020 finding that more than half a million diesel pickup trucks in the United States — approximately 15% of U.S. diesel trucks that were originally certified with emissions controls — have been illegally deleted. 

Diesel emissions include multiple hazardous compounds and harm human health and the environment. Diesel emissions have been found to cause and worsen respiratory ailments such as asthma and lung cancer. One study indicated that 21,000 American deaths annually are attributable to diesel particulate matter. Exposure to polluted air in utero also has been associated with a host of problems with lifelong ramifications including low birth weight, preterm birth, autism, brain/memory disorders and asthma.

Under the proposed civil settlement, defendants PPEI and Willis will pay $1,550,000 in civil penalties and agree not to manufacture, sell, or install any device that bypasses, defeats, or renders inoperative motor vehicle emissions controls. The defendants will not sell or transfer the intellectual property associated with these products, and will destroy illegal products still in inventory, cease warranty support for previously sold products, revise marketing materials, notify customers and dealers of the law and the settlement, and train employees and contractors. According to civil court documents, Willis and PPEI halted sales of specified delete devices in the fall of 2019 following enforcement activity by EPA. 

The defendants are scheduled to be sentenced in the criminal case by U.S. District Judge John A. Mendez on Aug. 23. Willis faces a maximum statutory penalty of five years of incarceration on the conspiracy count, two years of incarceration on the tampering count, and for each count a maximum fine of $250,000 or twice the gross pecuniary gain derived from the offense. PPEI faces for each count a maximum fine of $500,000 or twice the gross pecuniary gain derived from the offense. Under the plea agreements, the defendants agree to jointly and severally pay a $1,550,000 criminal fine. The sentences will be determined at the discretion of the court after consideration of all applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The criminal case was the product of an investigation by the EPA’s Criminal Investigation Division. Assistant U.S. Attorney Katherine T. Lydon of the Eastern District of California and Senior Counsel Krishna S. Dighe and Trial Attorney Stephen J. Foster of the Environmental Crimes Section of the Department of Justice’s Environment and Natural Resources Division (ENRD) are prosecuting the criminal case. The federal civil case is being handled by Senior Counsel Nicole Veilleux of the Environmental Enforcement Section of ENRD and Attorney-Advisor Ed Kulschinsky of the Air Enforcement Division of the EPA.

Stopping the manufacture, sale and installation of illegal delete devices is a priority for EPA. To learn more, visit: https://www.epa.gov/enforcement/national-compliance-initiative-stopping-aftermarket-defeat-devices-vehicles-and-engines. 

The consent decree for this settlement was lodged in the U.S. District Court for the Western District of Louisiana and is subject to a 30-day public comment period and final court approval. A copy of the decree, and information on submitting comments will be available on the Department of Justice website at: www.justice.gov/enrd/consent-decrees.  

A North Carolina man was sentenced today to 20 months in prison for fraudulently obtaining over $1.7 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to court documents, Tristan Bishop Pan, 40, of Garner, submitted numerous fraudulent PPP loan applications to federally insured banks, including on behalf of entities named Pan Insurance Agency, White Walker, Khaleesi, and The Night’s Watch. In support of the fraudulent PPP loan applications, Pan made false statements about the companies’ employees and payroll expenses. The PPP loan applications were supported by fake documents, including falsified tax filings. According to court documents, Pan submitted at least 14 PPP loan applications seeking over $6.1 million and received more than $1.7 million in benefits. Pan pleaded guilty to wire fraud in August 2021.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Michael F. Easley Jr. for the Eastern District of North Carolina; Special Agent in Charge Mark Morini of the U.S. Treasury Inspector General for Tax Administration (TIGTA) – Southeast Field Division; Special Agent in Charge Kyle A. Myles of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG) – Atlanta Region; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge Robert R. Wells of the FBI’s Charlotte Field Office made the announcement.

The TIGTA, FDIC-OIG, and the FBI, with the assistance of the SBA Office of Inspector General, investigated the case. 

Assistant Chief Justin M. Woodard of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Ethan A. Ontjes and John Harris for the Eastern District of North Carolina prosecuted the case.

The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the inception of the CARES Act, the Fraud Section has prosecuted over 150 defendants in more than 95 criminal cases and has seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/criminal-fraud/ppp-fraud.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Today, the Department of Justice and Federal Trade Commission (FTC) are extending by one month the deadline to submit comments as part of the enforcement agencies’ process to modernize the merger guidelines to better detect and prevent anticompetitive deals. The new deadline is April 21.

In January, the Justice Department’s Antitrust Division and the FTC launched a joint public inquiry aimed at strengthening enforcement against illegal mergers. Recent evidence indicates that many industries across the economy are becoming more concentrated and less competitive – imperiling choice and economic gains for consumers, workers, entrepreneurs and small businesses. These problems are likely to persist, or worsen, due to an ongoing merger surge that has more than doubled merger filings from 2020 to 2021. To address mounting concerns, the agencies announced in January that they were soliciting public input on ways to modernize federal merger guidelines to better detect and prevent illegal, anticompetitive deals in today’s modern markets.

To mark the start of Sunshine Week, Attorney General Merrick B. Garland issued comprehensive new Freedom of Information Act (FOIA) guidelines today that strengthen the federal government’s commitments to transparency in government operations and the fair and effective administration of FOIA.

The Attorney General’s guidelines, which were announced in a memorandum, direct the heads of all executive branch departments and agencies to apply a presumption of openness in administering the FOIA and make clear that the Justice Department will not defend nondisclosure decisions that fail to do so. The guidelines also emphasize that the proactive disclosure of information is fundamental to the faithful application of the FOIA and note the Justice Department’s efforts to encourage proactive agency disclosures, including by providing more specific criteria regarding how relevant metrics should be reported in agency Annual FOIA Reports, as the Government Accountability Office recommended.

“At the Justice Department, and across government, our success depends upon the trust of the people we serve. That trust must be earned every day,” said Attorney General Garland. “For more than fifty years, the Freedom of Information Act has been a vital tool for advancing the principles of open government and democratic accountability that are at the heart of who we are as public servants. Together with our partners across the federal government, the Justice Department will work every day to uphold those principles, which are essential to the rule of law.”

In addition, the Attorney General’s FOIA guidelines direct federal departments and agencies to continue efforts to remove barriers to requesting and accessing government records and to reduce FOIA processing backlogs. The guidelines note, for example, that the Justice Department’s Executive Office for Immigration Review is changing a policy under which it had long required individuals to file FOIA requests to obtain official copies of their own records of immigration court proceedings. The Attorney General encouraged all agencies to examine whether they have similar or other categories of records that they could make more readily accessible without requiring individuals to file FOIA requests.

“The Attorney General’s new FOIA guidelines underscore the Justice Department’s commitment to government that is open, transparent and accountable to the people we serve,” said Associate Attorney General Vanita Gupta, who also serves as the Department’s Chief FOIA Officer. “The Office of Information Policy looks forward to working with agencies to ensure the presumption of openness is applied across the government.”

The Attorney General’s guidelines highlight the key role played by agency Chief FOIA Officers who report each year to the Department of Justice on their progress in improving FOIA administration and also direct agencies to training and guidance documents issued by the Justice Department’s Office of Information Policy designed to help ensure proper training and compliance with FOIA across the federal government. For more information visit www.justice.gov/oip.

A California man pleaded guilty to renovating two apartment complexes in violation of federal Clean Air Act regulations intended to prevent human exposure to toxic airborne asbestos fibers. 

Bobby Babak Khalili, 46, of Los Angeles, entered a guilty plea to two counts of violating the Clean Air Act before U.S. District Judge James C. Mahan in Las Vegas, Nevada. Sentencing is currently scheduled for June 15. Khalili faces up to five years in prison and a $250,000 fine for each count, and up to three years of supervised release.

Khalili was indicted by a grand jury sitting in the District of Nevada in September 2019, in connection with asbestos-related Clean Air Act violations at a Las Vegas apartment complex. The grand jury later returned a superseding indictment against Khalili in July 2021, in connection with new Clean Air Act asbestos violations at a second apartment complex, which Khalili now admits he committed while on pretrial release for the first set of charges.

As part of his guilty plea, Khalili acknowledged that, on behalf of his company Las Vegas Apartments LLC, he oversaw renovation activities at both apartment complexes. He further admitted that he was aware of asbestos-containing materials at both buildings, and that he hired untrained individuals to tear out those materials without following asbestos work practice standards prescribed by the Clean Air Act. Those work practice standards require that asbestos-containing materials be safely removed prior to general renovation activity taking place. Asbestos-containing materials must be kept wet at all times to prevent dust escaping, sealed in leak-proof bags and disposed of at facilities authorized to accept asbestos waste. At both apartment buildings, untrained laborers removed asbestos-containing drywall and ceiling texture without wetting or containment, releasing asbestos fibers into the surrounding atmosphere.

Khalili also admitted to taking steps to evade law enforcement at each site. At the first apartment complex, Khalili attempted to have a dumpster filled with asbestos waste removed from the site when inspectors from the Clark County Department of Air Quality discovered asbestos-related violations. At the second complex, where he oversaw illegal renovations while on pretrial release, he instructed the contractor in charge of the renovation to lie to inspectors about who owned and oversaw the project, in an attempt to blame another person for the Clean Air Act violations he knowingly committed.

Inhalation of airborne asbestos fibers has been determined to cause lung cancer, asbestosis, and mesothelioma, an invariably fatal disease. Congress and the EPA have determined that there is no safe level of exposure to asbestos.

“The defendant placed workers and community members in harm’s way when he knowingly violated Clean Air Act requirements for the safe handling of asbestos, and then did it again while already under indictment,” said Assistant Attorney General Todd Kim of the Environment and Natural Resources Division. “The Department of Justice will continue to hold accountable those who defy federal law aimed at protecting the public from adverse health effects of asbestos.”

“Exposure to asbestos is associated with life-threatening illnesses and serious respiratory diseases,” said Acting U.S. Attorney Christopher Chiou for the District of Nevada. “By failing to follow required standards for properly handling asbestos, the defendant put the health of our communities — including workers at two apartment renovation sites — at risk. This case reflects our office’s commitment to working with our state and federal partners to enforce environmental laws that protect Nevadans from hazardous pollutants.”

“By not removing asbestos – a known carcinogen – safely from the buildings he was working on, the defendant placed the health of his apartment residents and the surrounding community at risk,” said Special Agent in Charge Scot Adair of the EPA’s Criminal Enforcement Program in Nevada. “Today’s agreement demonstrates that those who violate those laws will be held responsible.”

Special agents of the EPA and employees of the Clark County Department of Air Quality investigated the case. Trial Attorney Cassandra Barnum of ENRD’s Environmental Crimes Section and Assistant U.S. Attorney Jean Ripley for the District of Nevada prosecuted the case.

A federal indictment was unsealed today in Portland, Oregon, charging a former Oregon Department of Corrections employee with sexually assaulting a dozen female inmates while serving as a nurse at the Coffee Creek Correctional Facility (CCCF), Oregon’s only women’s prison.

Tony Daniel Klein, 37, of Clackamas County, Oregon, is charged with 21 counts of depriving the victims of their constitutional right not to be subjected to cruel and unusual punishment by sexually assaulting them. The indictment alleges that from 2016 through 2017, Klein committed various forms of sexual assault, some of which included aggravated sexual abuse and some resulting in bodily injury. Klein is also charged with four counts of perjury for giving false testimony during a 2019 deposition related to a federal lawsuit alleging he committed sexual misconduct while serving as a corrections nurse.

If convicted, Klein faces a maximum sentence of life in prison.

Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division and U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.

This case is being investigated by the FBI Portland Field Office with assistance from the Oregon State Police and Clackamas County Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorneys Katherine Rykken and Hannah Horsley of the District of Oregon, and Special Litigation Counsel Fara Gold and Trial Attorney Cameron A. Bell of the Criminal Section of the Justice Department’s Civil Rights Division.

An indictment is merely an allegation, and a defendant is presumed innocent unless and until proven guilty.

A former nurse at Leavenworth Detention Center has pleaded guilty to conspiring to smuggle contraband into the prison, and a federal grand jury in the District of Kansas has returned an indictment charging a former correctional officer with a similar scheme.  

According to court documents, Jeane Arnette, 61, of Leavenworth, Kansas, previously worked at Leavenworth Detention Center, a privately run, maximum-security federal prison. Arnette used her position as a nurse to smuggle and attempt to smuggle contraband — including cell phones — into the prison.

Arnette pleaded guilty on March 10 to conspiracy to provide contraband to inmates of a federal prison. She is scheduled to be sentenced on June 9 and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

According to court documents, James Bunch, 40, of Leavenworth, previously worked at Leavenworth Detention Center as a correctional officer. Bunch allegedly used his former position to smuggle contraband, including cell phones, into the prison in exchange for bribes from federal inmates.

Bunch was arrested on March 11 and is charged with conspiracy to commit bribery and provide contraband, and bribery. He made his initial appearance today in the District of Kansas. If convicted of both counts, he faces up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, Special Agent in Charge William J. Hannah of the Department of Justice Office of Inspector General (DOJ-OIG) Chicago Field Office, and Special Agent in Charge Charles A. Dayoub of the FBI’s Kansas City Field Office made the announcement.

The FBI and DOJ-OIG are investigating the cases.

Trial Attorneys Rebecca M. Schuman and Jacob R. Steiner of the Justice Department’s Public Integrity Section are prosecuting the cases.

The cases are part of the Justice Department’s ongoing efforts to combat prison corruption. In addition to the above matters, the Public Integrity Section recently obtained convictions against four other former Leavenworth Detention Center officials for similar conduct. See United States v. Jacqueline Sifuentes, Case No. 2:21-cr-20053 (D. Kan.); United States v. Cheyonte Harris, Case No. 2:21-cr-20054 (D. Kan.); United States v. Willie Golden, Case No. 2:21-cr-20061 (D. Kan.); and United States v. Janna Grier, Case No. 2:22-cr-20001 (D. Kan.). Separately, the Public Integrity Section has obtained convictions against three former North Carolina prison officials who smuggled contraband, including narcotics, into a state facility in exchange for bribes. See United States v. Ollie Rose, III, Case No. 4:20-CR-96 (E.D.N.C.); United States v. Kenneth Farr, Case No. 4:21-CR-9 (E.D.N.C.); and United States v. Jeremy Chambers, Case No. 4:21-CR-38 (E.D.N.C.).

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

A Florida man who serves as a Commander in the U.S. Navy Reserves appeared today on criminal charges related to an alleged bribery scheme involving special visas for Afghan nationals.

According to court documents, Jeromy Pittmann, 53, of Pensacola, Florida, currently residing in Naples, Italy, was paid to draft, submit, or falsely verify false letters of recommendation for citizens of Afghanistan who applied to the U.S. Department of State for Special Immigrant Visas (SIVs). There is a limited supply of SIVs each year for Afghan nationals employed as translators for U.S. military personnel. Pittmann is alleged to have signed over 20 false letters in which he represented, among other things, that he had supervised the applicants while they worked as translators in support of the U.S. Army and NATO; that the applicants’ lives were in jeopardy because the Taliban considered them to be traitors; and that he did not think the applicants posed a threat to the national security of the United States. In exchange, Pittmann is alleged to have received thousands of dollars in bribes.

Pittmann made his initial appearance today. He is charged with accepting bribes and conspiring to commit visa fraud. If convicted of both counts, he faces up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney John J. Farley for the District of New Hampshire; Inspector General John F. Sopko of the Special Inspector General for Afghanistan Reconstruction (SIGAR); Special Agent in Charge Eric Maddox of the Economic Crimes Field Office of the Naval Criminal Investigative Service (NCIS); and Special Agent in Charge Stanley A. Newell of the Transnational Operations Field Office of the Defense Criminal Investigative Service (DCIS) made the announcement.

SIGAR, NCIS, and DCIS are investigating the case.

Trial Attorney Matt Kahn of the Justice Department’s Fraud Section and Assistant U.S. Attorney Anna Dronzek for the District of New Hampshire are prosecuting the case.

A criminal complaint is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

SPRINGFIELD, Ill. – Donald Dorosheff, 75, of the 400 block of North 4th Street in Springfield, Illinois, was convicted of receiving and possessing child pornography on March 10, 2022, following a two-day trial in front of U.S. District Judge Sue E. Meyerscough.  Dorosheff’s sentencing has been scheduled for July 15, 2022, at the U.S. Courthouse in Springfield.

Over the two days of testimony, the government presented evidence to establish that from May 2013 to March 3, 2016, Dorosheff repeatedly accessed and downloaded child pornography to his laptop computer from the Internet. On March 3, 2016, the Federal Bureau of Investigation (FBI) executed a search warrant at Dorosheff’s apartment in the Sangamon Towers in Springfield and seized his computer, an external hard drive, and various flash drives. During a subsequent forensic analysis of the computer evidence, the FBI determined that Dorosheff received and possessed more than 2,000 child pornography images and 28 child pornography videos, most of which involved prepubescent minors engaged in sexually explicit conduct.

Dorosheff was ordered detained pending sentencing. At sentencing, Dorosheff faces statutory penalties for the receipt offenses of a minimum of five to twenty years of imprisonment, a minimum of five years and up to a life term of supervised release, and up to a $250,000 fine; and up to 20 years of imprisonment, a minimum of five years and up to a life term of supervised release, and a $250,000 fine for the possession offense.

The case investigation was conducted by the FBI. Assistant U.S. Attorney Timothy A. Bass and Assistant U. S. Attorney Sierra Senor-Moore represented the government at trial.

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

The Justice Department and the U.S. Attorney’s Office for the Middle District of Pennsylvania announced that Ty Allen Barnett, of Dover, Pennsylvania, entered a plea of guilty to the improper handling and removing of regulated asbestos containing material as required by federal law.

A ten-count indictment filed in January 2020, charged Lobar Inc., First Capital Insulation, Inc., Francis Richard Yingling Jr., Dennis Lee Charles Jr., M&J Excavation Inc., John August Sidari Jr., and Ty Allen Barnett, with various violations of the federal Clean Air Act arising from disturbing and removing asbestos in violation of the National Emission Standards for Hazardous Air Pollutants regulations. Lobar Inc. pleaded guilty on Feb. 9. The remaining defendants have pleaded not guilty and are currently scheduled for trial in June 2022 before U.S. District Court Judge Jennifer P. Wilson.

Asbestos was designated a hazardous air pollutant in 1971 which can become airborne and can be inhaled into the lungs. There is no known safe amount of exposure.

According to U.S. Attorney John C. Gurganus, the criminal charge is the result of Barnett’s activity as the project supervisor for the asbestos abatement contractor, First Capital Insulation Inc., on the Berwick Area School District project in Berwick, Pennsylvania. The scope of the project was designed to safely remove environmentally hazardous materials from the site, demolish the former weaving mill building, and construct a new elementary school.

Prior to purchasing the mill in January 2014, the Berwick Area School District obtained an environmental assessment report that identified hazardous substances, including asbestos, located in the old facility. The existence of asbestos was confirmed by an environmental consultant. The findings of both assessments were shared with Lobar, and its subcontractors responsible for asbestos removal and demolition. Despite this, the demolition went forward before the asbestos was properly removed until stopped by the Environmental Protection Agency (EPA).

Howard P. Stewart, Senior Litigation Counsel from the Justice Department‘s Environmental Crimes Section of the Environment and Natural Resources Division, Assistant U.S. Attorney Paul Miovas and Special Assistant U.S. Attorney Patricia Miller for the Middle District of Pennsylvania are prosecuting the case. The case was investigated by the Criminal Investigation Division of the EPA.

The defendant is presumed innocent unless and until proven guilty.

A Florida man pleaded guilty today in the Southern District of Florida for a scheme to receive kickbacks and bribes in exchange for referring Medicare beneficiaries to five South Florida home health agencies for services that the patients did not need and, in many cases, never received.

Ernesto Espinosa, 71, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud. According to court documents, from January 2010 to June 2015, Espinosa and his co-conspirators paid kickbacks to Medicare beneficiaries to recruit them for referral to home health agencies. Espinosa also coached the Medicare beneficiaries, who did not need home health services, on what to say to obtain home health prescriptions from doctors. In exchange for referring these beneficiaries, Espinosa solicited and received kickbacks and bribes from the home health agencies. Espinosa and the home health agencies attempted to disguise these kickbacks and bribes by routing them through shell companies controlled by Espinosa. The home health agencies then submitted false and fraudulent claims to Medicare for services that were not medically necessary and typically not even provided. As a result of this fraud, Espinosa and his co-conspirators caused Medicare to make payments of approximately $870,000 for the bogus claims. Espinosa personally netted approximately $630,000 from the scheme.

Espinosa is scheduled to be sentenced on May 24 and faces up to 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Special Agent in Charge Omar Pérez Aybar of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Miami Regional Office; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.

The FBI and HHS-OIG investigated the case.

Trial Attorneys Kelly M. Lyons, Alexander Thor Pogozelski and Jamie De Boer of the Justice Department’s Fraud Section prosecuted the case.

The Justice Department today announced that it has obtained a settlement agreement requiring BayPort Credit Union (BayPort) to pay nearly $110,000 to resolve allegations it violated the Servicemembers Civil Relief Act (SCRA) by charging excessive interest on servicemembers’ loans and repossessing servicemembers’ cars without court orders.

“This case is just the latest example of the Justice Department’s steadfast commitment to safeguarding the rights of servicemembers, who make so many sacrifices in defending our country,” said Assistant Attorney General Kristen Clarke of the Department’s Civil Rights Division. “We will continue to vigorously enforce the protections to which servicemembers are entitled under federal law, including their right to a 6% interest rate cap on loans and a right not to have their car repossessed without a court order.”

“Entering military service can create financial hardships for our servicemembers who make incredible sacrifices for our nation’s security,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “This consent order helps ensure that these men and women are not disadvantaged by their military service and that servicemembers’ rights are protected going forward.”

The SCRA requires creditors to reduce the interest rate on servicemembers’ financial obligations, including retail installment sales contracts, to 6% in certain circumstances. The SCRA also prohibits repossessing a motor vehicle from a servicemember during military service without a court order, as long as the servicemember made a deposit or installment payment on the loan before entering military service.

Today’s settlement, which must be approved by the U.S. District Court for the Eastern District of Virginia, resolves a lawsuit filed today by the Department of Justice. The lawsuit alleges that BayPort unlawfully charged interest in excess of 6% to 21 servicemembers who qualified for and sought SCRA interest rate benefits. In at least one instance, BayPort told a servicemember that reducing the interest rate would increase her monthly payment. The lawsuit also alleges that BayPort unlawfully repossessed three servicemembers’ motor vehicles without court orders.  In at least one of those cases, BayPort knew about the borrower’s military service and repossessed the vehicle from a military base.

Under the terms of today’s settlement, BayPort must pay nearly $70,000 to the affected servicemembers. Additionally, BayPort must pay $40,000 to the United States as a civil penalty. The agreement also requires BayPort to revise its policies and procedures to prevent future SCRA violations and provide SCRA training to its employees.

Servicemembers and their dependents who believe their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can be found at http://legalassistance.law.af.mil/.

The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorneys’ Offices throughout the country. Since 2011, the department has obtained over $476 million in monetary relief for over 121,000 servicemembers through its enforcement of the SCRA. Additional information on the department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.

A former veteran detective for the Carlisle, Pennsylvania, Police Department, who was a task force officer with the FBI and a member of the Cumberland County Drug Task Force, was sentenced today to 75 months in prison for bribery, drug distribution and making false statements.

According to court documents and evidence presented at trial, Christopher Collare, 54, now of Blythewood, South Carolina, used his official position to obtain sex from two women in exchange for agreeing to take actions in prosecutions. Specifically, in 2015, Collare agreed to accept sex or money in exchange for not appearing at an evidentiary hearing so that a criminal charge would be dismissed. In 2018, Collare agreed to accept sexual favors in exchange for taking steps to help reduce a potential sentence. In addition to bribery, the jury convicted Collare of distributing heroin in 2016. He also was convicted of lying in November 2015 on a federal form he completed during the process of becoming an FBI task force officer, and of making multiple false statements when interviewed by federal agents in May 2018.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, U.S. Attorney John C. Gurganus for the Middle District of Pennsylvania, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division and Special Agent in Charge Russell W. Cunningham of the Department of Justice Office of the Inspector General (DOJ-OIG) Washington Field Office made the announcement.

The FBI’s Philadelphia Field Office, Harrisburg Resident Agency, and the DOJ-OIG Washington Field Office investigated the case. 

Trial Attorney James I. Pearce of the Criminal Division’s Appellate Section (formerly with the Public Integrity Section) and Assistant U.S. Attorneys Carlo D. Marchioli and Phillip J. Caraballo for the Middle District of Pennsylvania prosecuted the case.

A Florida man who led sales for a sports and dietary supplements retailer was sentenced today to 51 months in prison for conspiring to defraud the U.S. Food and Drug Administration (FDA) and conspiring to distribute anabolic steroids.

According to court documents and evidence presented at trial, James Boccuzzi, 38, of Parkland, was director of sales for Blackstone Labs LLC, a Boca Raton-based sports and dietary supplements retailer. A jury convicted Boccuzzi in December 2021 of conspiracy to defraud the FDA and conspiracy to distribute anabolic steroids. U.S. District Judge William P. Dimitrouleas of the Southern District of Florida sentenced Boccuzzi to 51 months in prison and ordered him to pay a fine of $20,000.

Boccuzzi and his co-conspirators, including Phillip “PJ” Braun, Aaron Singerman, Blackstone Labs LLC and others, conspired to defraud the FDA and to illegally manufacture and distribute anabolic steroids that were controlled substances under the Designer Anabolic Steroid Control Act. Evidence at trial established that Boccuzzi and his co-conspirators continued to sell the illegal controlled substances despite knowing about the law and its impact on the legality of Blackstone’s steroid products.

The evidence also showed that Boccuzzi and his co-conspirators quickly sold off other Blackstone products containing certain stimulants after they received an FDA warning letter notifying them that the products were unlawful to sell as dietary supplements. Further, the evidence showed that the conspirators concealed the sales of other products containing research chemicals despite knowing that the products could not legally be sold as dietary supplements. During the conspiracy, Boccuzzi also created a fraudulent “Certificate of Free Sale,” representing himself to be an employee of the FDA, in order to ship Blackstone Labs products internationally.

 “Dietary supplement distributors and manufacturers cannot ignore the law,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Department of Justice will work with law enforcement partners to investigate and prosecute individuals and companies who disregard public safety to make a profit.”

“Drug products that are disguised as supplements can pose a serious risk to the health of U.S. consumers,” said Special Agent in Charge Justin C. Fielder, FDA Office of Criminal Investigations (FDA-OCI) Miami Field Office. “We will continue to investigate and bring to justice those who jeopardize the public health.”

Aaron Singerman and Phillip Braun, who co-founded and operated Blackstone Labs, previously pleaded guilty to distributing unapproved new drugs and conspiracy to distribute anabolic steroids. Each was sentenced to 54 months of imprisonment and ordered to forfeit $2.9 million and $3 million, respectively. The court also previously ordered $38,655 in restitution for medical expenses related to certain victims.

In total, eight individuals and three companies were convicted of felonies in connection with the activities of Blackstone Labs and ordered to forfeit a total of nearly $8 million.  Boccuzzi is the final defendant to be sentenced in this case.

FDA-OCI investigated the case.

Trial Attorneys Alistair Reader and Stephen Gripkey, Senior Litigation Counsel David A. Frank and Assistant Director John W. Burke of the Civil Division’s Consumer Protection Branch prosecuted the cases with assistance from Assistant U.S. Attorney Daren Grove of the U.S. Attorney’s Office for the Southern District of Florida. Laura Akowuah, Brian Furlong and Sarah Hawkins from the FDA’s Office of Chief Counsel also provided assistance with the investigation and prosecution.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. 

A Georgia resident pleaded guilty to federal charges resulting from a lengthy investigation into a significant multi-state dog fighting and cocaine trafficking network.

Shelley Johnson, aka Gold Mouth, 40, of Macon, pleaded guilty to conspiracy to participate in an animal fighting venture before U.S. District Judge Tilman E. “Tripp” Self III. Johnson faces a maximum five years of imprisonment to be followed by three years of supervised release and a $250,000 fine. Sentencing has been scheduled for June 7. 

According to court documents, law enforcement investigated a criminal organization involved in both cocaine distribution and organized dog fighting based out of Roberta, Georgia, which extended into North Georgia, Florida and Alabama from May 2019 until February 2020. In February 2020, law enforcement executed 15 residential search warrants and seized more than 150 dogs that were being used for organized dog-fighting. A 136-count indictment was unsealed on Jan. 29, 2021, charging 11 individuals with various criminal activities. Three other individuals, including Johnson, were charged by criminal information.

During this time period, Johnson communicated with co-conspirator Jarvis Lockett about fighting and breeding dogs, dogs mauled and killed as a result of fighting, sharpening a dog’s teeth for fighting purposes, cash prizes for fights, and various topics detailing the business and the brutality of dog-fighting. Johnson attended a dog fight and participated as a handler inside the ring during the dog fight. Law enforcement executed a search warrant at Johnson’s Macon residence on Feb. 26, 2020, recovering 13 pit bull terrier type dogs with scarring consistent with dog-fighting. In addition, agents found evidence of dog fighting activities including a digital scale, weighted collars, heavy chains, ground stakes and a variety of medical supplies to treat animals for injuries sustained from dog fighting activities.

The following co-conspirators have been convicted and sentenced in this case:

Lekey Davis, aka Kee Boo, 46, of Talbotton, Georgia, was sentenced to serve 210 months of imprisonment after pleading guilty to conspiracy to possess with intent to distribute cocaine and cocaine base;

Christopher Raines, aka Binky, 51, of Talbotton, Georgia, was sentenced to serve 135 months of imprisonment to be followed by five years of supervised release and to pay a $10,000 fine after pleading guilty to conspiracy to participate in an animal fighting venture and conspiracy to possess with intent to distribute cocaine and cocaine base;

Jarvis Lockett, aka J-Rock, 41, of Warner Robins, Georgia, was sentenced to serve ten years of imprisonment to be followed by three years of supervised release after pleading guilty to conspiracy to participate in an animal fighting venture and cocaine distribution;

Derrick Owens, aka Doomie, 38, of Woodland, Georgia, was sentenced to serve ten years of imprisonment after pleading guilty to conspiracy to participate in an animal fighting venture and conspiracy to possess with intent to distribute cocaine;

Jason Carter, 39, of Phoenix City, Alabama, was sentenced to serve 97 months of imprisonment after pleading guilty to conspiracy to possess with intent to distribute cocaine;

Vernon Vegas, 50, of Suwanee, Georgia, was sentenced to serve the maximum five years in prison to be followed by three years of supervised release and pay a $10,000 fine after pleading guilty to conspiracy to participate in an animal fighting venture;

Shaquille Bentley, 27, of Roberta, Georgia, was sentenced to serve four years of imprisonment after pleading guilty to use of a communication facility;

Rodrick Walton, aka Rodrie Walton, 42, of Shiloh, Georgia, was sentenced to serve two years of imprisonment after pleading guilty to conspiracy to participate in an animal fighting venture;

Reginald Crimes, 39, of Preston, Georgia, was sentenced to serve two years of imprisonment to be followed by three years of supervised release after pleading guilty to conspiracy to participate in an animal fighting venture;

Lee Benney, 55, of Reynolds, Georgia, was sentenced to serve 21 months of imprisonment to be followed by three years of supervised release after pleading guilty to conspiracy to participate in an animal fighting venture; and,

Bryanna Holmes, 25, of Fort Valley, Georgia, was sentenced to serve three years of probation after pleading guilty to use of a communication facility.

The case was investigated by the Justice Department’s Environment and Natural Resources Division (ENRD), the Drug Enforcement Administration (DEA), the Department of Agriculture, Office of the Inspector General (USDA-OIG), the U.S. Marshals Service, the Georgia Bureau of Investigation (GBI), the Bibb County Sheriff’s Office, the Crawford County Sheriff’s Office, the Houston County Sheriff’s Office, the Merriweather County Sheriff’s Office, the Peach County Sheriff’s Office, the Taylor County Sheriff’s Office, the Webster County Sheriff’s Office, the Byron Police Department and the Fort Valley Police Department.

Assistant U.S. Attorney Will Keyes with the U.S. Attorney’s Office for the Middle District of Georgia and Trial Attorney Banu Rangarajan of ENRD’s Environmental Crimes Section are prosecuting the case.

A Missouri woman was convicted by a federal jury for her role in a multimillion-dollar international advance-fee scheme orchestrated from Nigeria.

According to the evidence presented at trial, Osa Martin, 76, of Carthage, traveled internationally on nine occasions between August 2015 and August 2016 while claiming to represent BB&T Corporation. On these trips, she met with victims of the scheme, who had been led to believe by co-conspirators based in Nigeria that they had multimillion-dollar investment agreements with BB&T. Martin signed the investment agreements, purportedly on behalf of BB&T, and then made sham visits to U.S. embassies to make the victims believe that the U.S. Department of State was notarizing and sponsoring the investment agreements. On each trip, Martin collected $7,500 or more in cash from the victims under the false pretense that the cash payment was a fee charged by the U.S. embassy. After her sham visits, Martin coordinated with co-conspirators to ensure victims received fake receipts and documents bearing State Department seals. The victims were then induced by Nigerian co-conspirators to make large wire payments to bank accounts in the United States on the false belief they were necessary fees before BB&T would release their investment funding.

Martin was convicted on Tuesday of one count of conspiracy to commit wire fraud and one count of conspiracy to wrongfully use government seals. She is scheduled to be sentenced on May 19, and faces up to 20 years in prison for the first count and up to five years in prison for the second count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Jennifer Lowery for the Southern District of Texas; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent-in-Charge James Smith of the FBI’s Houston Field Office; and Special Agent-in-Charge Michael Speckhardt of the U.S. Department of State’s Office of Inspector General (DOS-OIG) made the announcement.

The FBI and DOS-OIG investigated the case.

Assistant Chief William Johnston and Trial Attorney Philip Trout of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Suzanne Elmilady of the Southern District of Texas prosecuted the case.

Note: The defendants in this case, Steven Dornsbach and Kamida Inc., were acquitted by a jury of the charges alleged in the indictment described in the press release below.

A federal grand jury returned an indictment charging Kamida Inc., a Minnesota-based concrete repair and construction corporation, and its CEO, Steven Dornsbach, with participating in a conspiracy to rig bids for public concrete repair and construction contracts in the state of Minnesota. 

According to court documents filed in the U.S. District Court in Minneapolis, Dornsbach and Kamida conspired to rig bids on concrete repair and construction contracts submitted to at least four municipalities in the state of Minnesota, including local governments and school districts in the Minneapolis-St. Paul area, from at least as early as September 2012 and continuing through at least July 2017. Last year, Minnesota concrete contractor Clarence Olson pleaded guilty for his involvement in the conspiracy. 

“Bid-rigging schemes that target local government contracts cheat taxpayers out of the benefits of competition,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “This indictment affirms the division’s commitment to safeguarding the integrity of the government procurement process at all levels of government.”

“For years, the defendants allegedly cheated their own communities by conspiring to rig bids on concrete repair and construction contracts for local governments and school districts,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “Bid rigging is not a victimless crime; it reduces competition and charges taxpayers the difference. This indictment shows that the FBI and our partners are committed to investigating those who try to cheat the system for their own gain.”

The defendants are each charged with a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals, and a $100 million fine for corporations. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Antitrust Division’s Chicago Office is prosecuting the case, which was investigated with the assistance of the FBI’s Minneapolis Field Office.

In November 2019, the Department of Justice created the Procurement Collusion Strike Force (PCSF), a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at all levels of government – federal, state and local. For more information, visit https://www.justice.gov/procurement-collusion-strike-force.

Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258 or visit http://www.justice.gov/atr/report-violations.

The Justice Department’s Antitrust Division and the Federal Trade Commission (FTC) will cohost a Spring Enforcers Summit on April 4. Assistant Attorney General Jonathan Kanter and FTC Chair Lina M. Khan, as well as senior staff from both agencies, will facilitate discussions on modernizing merger guidelines and interagency collaboration. The summit will be held in a hybrid format, with international enforcers and state Attorneys General participating both in-person and virtually. Throughout the day, the agencies will livestream several panel discussions and interviews to the public. The Enforcers Summit agenda and viewing instructions are available at https://www.justice.gov/atr/events/spring-2022-enforcers-summit.

“This summit provides a great opportunity for enforcers across the country and world to gather together and learn from each other,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Hearing from our international and state counterparts will help us to ensure that our enforcement practices and guidelines reflect modern market realities.”

“Mounting evidence of high concentration across markets and a variety of consequent harms have prompted a broad reassessment of our antitrust enforcement tools and frameworks,” said FTC Chair Lina M. Khan. “As we seek to update our approach to match economic realities, learning from and collaborating with our state and international enforcement partners will best equip us to tackle challenges and chart the right path ahead.”

The Enforcers Summit will include conversations about merger enforcement as well as discussions on how to work with industry regulators as part of a whole of government approach to competition policy. These discussions will inform the agencies’ joint public inquiry on modernizing merger guidelines. As the Antitrust Division and FTC work to revise their joint merger guidelines, the agencies are encouraging input from a wide range of stakeholders and are holding listening sessions throughout the spring to hear from members of the public. This summit will provide a valuable opportunity to gather both international and domestic perspectives on how U.S. merger reform can help us meet the challenges and realities of the modern economy.

Today, the Justice Department announced the appointment of a Director for COVID-19 Fraud Enforcement to lead the department’s criminal and civil enforcement efforts to combat COVID-19 related fraud, along with the latest results of criminal and civil enforcement actions that include alleged fraud related to over $8 billion in pandemic relief.

Effective immediately, Associate Deputy Attorney General Kevin Chambers will serve as the Director for COVID-19 Fraud Enforcement. Mr. Chambers will lead Justice Department efforts that to date have resulted in criminal charges against over 1,000 defendants with alleged losses exceeding $1.1 billion; the seizure of over $1 billion in Economic Injury Disaster Loan proceeds; and over 240 civil investigations into more than 1,800 individuals and entities for alleged misconduct in connection with pandemic relief loans totaling more than $6 billion.

“The Justice Department remains committed to using every available federal tool — including criminal, civil, and administrative actions — to combat and prevent COVID-19 related fraud,” said Attorney General Merrick B. Garland. “We will continue to hold accountable those who seek to exploit the pandemic for personal gain, to protect vulnerable populations, and to safeguard the integrity of taxpayer-funded programs.”

“As our thousands of COVID-19 fraud investigations demonstrate, our message to those who seek to line their own pockets and benefit from the suffering of so many Americans is: your crimes are not and will not be forgotten,” said Deputy Attorney General Lisa O. Monaco. 

“I look forward to this new role and to supporting the excellent work of the department’s prosecutors and trial attorneys since the very beginning of the pandemic,” said Mr. Chambers. “We are receiving an extraordinary amount of data from our state workforce agency partners. This data holds the key to identifying and prosecuting certain types of fraud, including unemployment insurance fraud. Our Strike Teams will enhance the department’s existing efforts and will include analysts and data scientists to review data, agents to investigate the cases, and prosecutors and trial attorneys to bring charges and try the cases. Again, this is on top of the great work our folks in the field are already doing.”

Mr. Chambers plans to focus on large-scale criminal enterprises and foreign actors who sought to profit at the expense of the American people. This will include establishing Strike Teams to prepare for the next phase in the Justice Department’s efforts to fight pandemic fraud.

In March 2020, Congress passed a $2.2 trillion economic relief bill known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. Anticipating the need to protect the integrity of these taxpayer funds and to otherwise protect Americans from fraud related to the COVID-19 pandemic, the Department of Justice immediately stood up multiple efforts dedicated to identifying, investigating, and prosecuting such fraud. Leveraging data analysis capabilities and partnerships developed through its vast experience combatting economic crime and fraud on government programs, the Justice Department’s response to COVID-19 related fraud serves as a model for proactive, high-impact white-collar crime enforcement, and demonstrates our agility in responding to new and emerging threats. This rapid and nationwide response enabled the Justice Department to quickly ensure accountability for wrongdoing and sent a forceful message of deterrence during an ongoing crisis. The multifaceted and multi-district approach to enforcement during this national health emergency continues and is expected to yield numerous additional criminal and civil enforcement actions in the coming months.

In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.

The Justice Department’s efforts to combat COVID-19 related fraud schemes have proceeded on numerous fronts, including cases and investigations involving the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program, Unemployment Insurance (UI) programs, and COVID-19 health care fraud enforcement.

These cases involve the Criminal Division’s Fraud Section, U.S. Attorneys’ Offices across the United States, and the department’s Civil Division. They reflect a degree of reach, coordination, and expertise that is critical for enforcement efforts against COVID-19 related fraud to have a meaningful impact and is also emblematic of the Justice Department’s response to criminal wrongdoing.

Prominent among the department’s efforts have been cases involving PPP and EIDL fraud. Across the department, including the Criminal Division’s Fraud Section and U.S. Attorneys' Offices, approximately 500 defendants have been charged in over 340 cases with alleged intended losses of over $700 million.

Relatedly, the department has seized over $1 billion in EIDL loan proceeds, primarily through the work of the U.S. Attorney’s Office for the District of Colorado and their partners at the U.S. Secret Service.

Due to the COVID-19 pandemic, up to $860 billion in federal funds have been appropriated for UI benefits through September 2021. Early investigation and analysis indicate that international organized criminal groups have targeted these funds by using stolen identities to file for UI benefits. Domestic criminals, ranging from identity thieves to violent street gangs to prison inmates, have also committed UI fraud. In response, the department established the National Unemployment Insurance Fraud Task Force, a prosecutor-led, multi-agency task force with representatives from more than eight different federal law enforcement agencies to coordinate those efforts. U.S. Attorneys’ Offices around the country have worked with law enforcement partners to investigate and arrest those responsible for committing UI fraud. Since the start of the pandemic, over 430 defendants have been charged and arrested for federal offenses related to UI fraud.

The unprecedented pace and tempo of these efforts is made possible only through the diligent work of a wide range of Justice Department partners, including the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section, the Civil Division’s Commercial Litigation Branch (Fraud Section) and Consumer Protection Branch, U.S. Attorneys’ Offices throughout the country, and law enforcement partners from the FBI; U.S. Secret Service; IRS-Criminal Investigation; Defense Criminal Investigative Service; Homeland Security Investigations; U.S. Postal Inspection Service; the Offices of Inspectors General from the Small Business Administration, Department of Labor, Department of Homeland Security, Social Security Administration, Federal Deposit Insurance Corporation, Department of Health and Human Services, Department of Veterans Affairs, Federal Housing Finance Agency and Federal Reserve Board; Food and Drug Administration’s Office of Criminal Investigations; Treasury Inspector General for Tax Administration; Financial Crimes Enforcement Network;  Special Inspector General for Pandemic Relief; Pandemic Response Accountability Committee; OCDETF Fusion Center and OCDETF’s International Organized Crime Intelligence and Operations Center.

For further information on the Criminal Division’s enforcement efforts on PPP fraud, including court documents from significant cases, visit the following website: https://www.justice.gov/criminal-fraud/ppp-fraud. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus. For further information on the Civil Division’s enforcement efforts, visit the following website: https://www.justice.gov/civil.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

*The subheadline has been updated to reflect a change from $7 billion to $8 billion in pandemic relief. (March 10, 2022)

Former Franklin County, Arkansas, Sheriff Anthony Boen, 51, was sentenced today to four years in prison, followed by two years of supervised release and a $4,800 fine for assaulting two individuals in his custody. After a six-day trial in August 2021, a jury in the Western District of Arkansas convicted Boen of two counts of deprivation of rights under color of law.

Evidence presented at trial established that Boen used unreasonable force to punish pretrial detainees on two separate occasions. On Dec. 3, 2018, Boen struck a detainee multiple times in the head with a closed fist while the detainee was sitting on the floor and shackled to a bench inside the Franklin County Jail. Several minutes later, Boen returned to the detainee’s cell and struck him in the head again, then spit on him. On Nov. 21, 2018, Boen slammed a detainee onto the floor and ripped his hair during an interrogation. Both detainees suffered bodily injury as a result of Boen’s actions. During the subsequent investigation of these offenses, Boen contacted officers who witnessed his assaults and pressured them not to provide truthful information to investigators. 

“No one is above the law, especially high-ranking law enforcement officers who have a duty to uphold the Constitution and protect individuals in their custody,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The defendant abused his power as sheriff by assaulting the people he was sworn to protect and pressuring his subordinates to cover up his crimes. The Justice Department will continue to vigorously prosecute law enforcement officials who violate people’s civil rights.”

“Anthony Boen swore an oath to support the U.S. Constitution and the State of Arkansas Constitution,” said U.S. Attorney David Clay Fowlkes of the Western District of Arkansas.  “His actions clearly violated not only the civil rights of these individuals but also the trust of the people of Franklin County. Cases like this are very important to our office because they involve the most personal and basic of civil rights: the rights to be protected and unharmed while in the custody of law enforcement officers. Today’s sentencing shows that justice will prevail in cases where a person’s civil rights are violated. We will continue to vigorously pursue cases involving the violation of basic civil rights that should be afforded to everyone.”

"When former Sheriff Boen brutally assaulted individuals in his custody and violated their civil rights, it impacted all Arkansans and their trust in authorities," said Special Agent in Charge James A. Dawson of the FBI’s Little Rock Field Office. “The FBI is committed to maintaining the public's trust in law enforcement. With today's sentencing of Mr. Boen, our community knows we will aggressively investigate and bring to justice any law enforcement officer who would violate the rights of their fellow Americans."

The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Brandon T. Carter and Civil Rights Division Trial Attorney Michael J. Songer.

Related court documents may be found on the Public Access to Electronic Records website at www.pacer.gov.

Scott Shaw, 54, the former Director of Sports Medicine and athletic trainer at San Jose State University, has been charged today with civil rights violations for engaging in sexual misconduct with female student-athletes under the guise of treating them for their injuries.

The charges allege that between 2017 and 2020, Shaw violated the civil rights of four students who played on women’s athletics teams by touching their breasts and buttocks without their consent and without a legitimate purpose. Shaw, as a state employee for the California State University system, is further alleged to have acted under color of law when he sexually assaulted the victims.

Shaw faces a maximum of six years in prison if convicted of all counts. However, any sentence following a conviction would be imposed by a court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence.

Shaw will appear to face the charges in U.S. District Court in San Jose on a date that has not yet been set.

Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division, U.S. Attorney Stephanie Hinds of the Northern District of California and Special Agent in Charge Craig D. Fair of the FBI made the announcement.

The case is being prosecuted by Assistant U.S. Attorney Michael Pitman of the Northern District of California and Special Litigation Counsel Fara Gold of the Criminal Section of the Justice Department’s Civil Rights Division. This case is being investigated by the FBI San Francisco Field Office.

Anyone with information should contact the FBI at 510-808-2600.

A charging information is merely a formal accusation of criminal conduct, and the defendant is presumed innocent unless proven guilty.

The Justice Department’s Antitrust Division and the Labor Department signed a memorandum of understanding (MOU) today to strengthen the partnership between the two agencies to protect workers from employer collusion, ensure compliance with the labor laws and promote competitive labor markets and worker mobility. The objectives of the President’s Executive Order on Promoting Competition in the American Economy will be supported by this continued partnership.

“Protecting competition in labor markets is fundamental to the ability of workers to earn just rewards for their work, to live out the American dream, and to provide for their families,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “By cooperating more closely with our colleagues in the Department of Labor, we can share enforcement information, collaborate on new policies, and ensure that workers are protected from collusion and unlawful employer behavior. Protecting the right of workers to earn a fair wage is core to the work of both our agencies, and it will continue to receive extraordinary vigilance from the Antitrust Division.”

“Anticompetitive practices harm both workers and high road employers,” said Solicitor of Labor Seema Nanda. “The Department of Labor looks forward to collaborating with the Antitrust Division to ensure there is a level playing field in the labor market and that workers receive their fair pay. Through this partnership, we will work together to tackle unlawful behavior that we are seeing across industries – including misclassification and wage fixing. This is an important moment in recognizing that protecting competition protects workers. Working with the Justice Department to root out these unscrupulous practices will help us empower workers and improve job quality.”

The Departments of Justice and Labor share an interest in promoting competitive labor markets. Both agencies are charged with protecting workers who have been harmed or may be at-risk of being harmed by anticompetitive and unlawful conduct, including through the use of business models designed to evade legal accountability and business practices, such as illegal agreements to fix wages or inappropriate use of noncompete agreements, that cause direct harm to employees.

The MOU signed today by Assistant Attorney General Kanter and Solicitor Nanda announced new steps the two agencies will take to strengthen this partnership. Through greater coordination in information sharing, enforcement activity and training, the two agencies will maximize the enforcement of federal laws, including worker protection laws under the Labor Department’s jurisdiction and the antitrust laws enforced by the Justice Department’s Antitrust Division. In particular, this MOU will allow the two agencies to refer cases of potentially illegal activity to each other, as appropriate, and to coordinate on policy, strategy and training.

This announcement follows the Department of Treasury releasing a report March 7 highlighting how lack of competition affects workers’ wages and opportunities. The MOU is a further step for the departments in addressing some of the challenges highlighted in the report.

The Labor Department is responsible for protecting and empowering workers through enforcing and administering standards on wage and hour, mine safety, workplace-related benefits, occupational safety and health, and whistleblower protection. The Justice Department is charged with promoting and protecting competition by enforcing the antitrust laws of the United States.

Information about possible antitrust violations or potential anticompetitive activity should be reported to the Antitrust Division Citizen Complaint Center. To learn more about how to seek whistleblower protection under the Criminal Antitrust Anti-Retaliation Act, please go to https://www.whistleblowers.gov/complaint_page.

A California man pleaded guilty today in the Central District of California to stealing government funds designed to aid medical providers in the treatment of patients suffering from COVID-19 and using them for his own personal benefit.

According to court documents, Grigor Garibyan, 36, of North Hollywood, admitted that he owned GMA Home Health Inc. (GMA), a home health agency in Van Nuys, which closed around June 2019. GMA, which was never operational during the COVID-19 pandemic, received approximately $57,591 designated for the medical treatment and care of COVID-19 patients. Garibyan admitted he stole the funds by transferring and spending them for his own personal use, rather than using the funds in conjunction with pandemic relief efforts as required.

Garibyan pleaded guilty to two counts of theft of government property. He is scheduled to be sentenced on June 16 and faces up to 10 years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The charges against Garibyan resulted from his intentional misuse of funds distributed from the CARES Act Provider Relief Fund, money specially apportioned by the CARES Act to help health care providers who were financially impacted by the COVID-19 pandemic, to provide care to patients who were suffering from COVID-19, and to compensate providers for the cost of that care. These funds were critical to delivering relief to health care providers and maintaining access to medical care during the pandemic.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Tracy L. Wilkison for the Central District of California; and Special Agent in Charge Timothy B. Francesca of the U.S. Department of Health and Human Services Office of Inspector General’s Los Angeles Regional Office made the announcement.

Trial Attorney Chris Wenger and Senior Litigation Counsel Jim Hayes of the National Rapid Response Strike Force of the Criminal Division’s Fraud Section are prosecuting the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

A California man made his initial appearance in federal court in Charlotte, North Carolina, today after being extradited from Mexico to face charges related to his involvement in two high-yield investment fraud schemes. 

According to court documents, Daniel Thomas Broyles Sr., aka Dan Thomas, 64, of Malibu, is charged in an indictment returned in the Western District of North Carolina for a high-yield investment fraud scheme involving a sham company named Niyato Industries Inc. Broyles allegedly conspired with Niyato’s CEO, Robert Leslie Stencil, 65, of Charlotte, North Carolina, and others to fraudulently sell stock in Niyato. Together, Broyles, Stencil and others falsely portrayed Niyato as a leader in its field, manufacturing electric vehicles and converting gasoline vehicles to run on compressed natural gas. Broyles, Stencil and their co-conspirators allegedly told victims that Niyato was run by a team of high-profile executives, and that Niyato had patented technology, state-of-the-art facilities and valuable contracts. Further, they allegedly told victims that Niyato would use 97% of the money it raised selling stock to grow its business, expand its operations and prepare for an imminent initial public offering (IPO). In reality, as alleged in the indictment, Niyato had no patents, facilities, products or plans to commence an IPO, and Niyato’s true business was the sale of worthless stock. Broyles, Stencil and their co-conspirators allegedly used nearly all of the money raised by selling Niyato stock for their own personal benefit, with Stencil paying salespeople – like Broyles – half or nearly half of the money they solicited from each investor on behalf of Niyato. 

Broyles is charged with one count of conspiracy to commit mail fraud and wire fraud, 14 counts of mail fraud, 14 counts of wire fraud, and five counts of money laundering. The defendant made his initial court appearance today before U.S. Magistrate Judge David S. Cayer of the U.S. District Court for the Western District of North Carolina. If convicted, Broyles faces up to 30 years in prison on the conspiracy charge, up to 20 years in prison on each count of mail fraud, up to 20 years in prison on each count of wire fraud, and up to 10 years in prison on each count of money laundering. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Stencil was convicted following a jury trial and sentenced to 135 months in prison.

Broyles is also charged in an indictment returned in the Northern District of Texas for his role in a second high-yield investment fraud scheme involving a company named EarthWater. According to the indictment, Broyles allegedly conspired with EarthWater’s CEO, Cengiz Jan Comu, 61, of Dallas, Texas, and others to sell EarthWater stock by making numerous false and misleading representations, including that victim investors only had a brief opportunity to purchase EarthWater stock in an unregistered offering before EarthWater’s stock price increased by 10- to 50-fold following an IPO or acquisition by a large well-known company. In reality, as alleged in the indictment, EarthWater never initiated an IPO nor a merger or acquisition. Moreover, Broyles, Comu and others falsely represented to victim investors that EarthWater would use 90% of invested funds to grow its business and expand operations, and that any fees paid to broker-dealers with respect to the sale of EarthWater stock would not exceed 10% of the purchase price of the shares. In reality, as alleged in the indictment, Comu agreed to split victim investors’ funds 50-50 with Broyles and others who sold EarthWater stock. As a result, nearly half of all of the money victims invested in EarthWater went directly into the pockets of the individuals who sold them the stock. 

Under the Northern District of Texas indictment, Broyles is charged with one count of conspiracy to commit mail fraud and wire fraud. If convicted, Broyles faces up to 30 years in prison. Comu pleaded guilty in 2020 and is awaiting sentencing.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Dena J. King for the Western District of North Carolina; U.S. Attorney Chad E. Meacham for the Northern District of Texas; Inspector in Charge Tommy Coke of the U.S. Postal Inspection Service’s Atlanta Division; and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.

The Government of Mexico, including the Fiscalía General de la República (FGR), provided significant assistance in the extradition of Broyles to the United States. The Justice Department’s Office of International Affairs also provided substantial assistance in securing the arrest and extradition of Broyles.

The U.S. Postal Inspection Service is investigating this case. The U.S. Marshals Service transported Broyles from Mexico to the United States.

Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section is prosecuting both cases. Assistant U.S. Attorney Mary Walters of the U.S. Attorney’s Office for the Northern District of Texas is also prosecuting the case involving EarthWater.

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

BANGOR, Maine: A Presque Isle woman was sentenced today in federal court for passing counterfeit money, U.S. Attorney Darcie N. McElwee announced.

U.S. District Judge Lance E. Walker sentenced Jessica Jones, 31, to two months in prison and two years of supervised release. Jones pleaded guilty on August 25, 2021.

According to court records, on July 23, 2018, Jones used counterfeit $20 bills at a Domino’s Pizza and a McDonald’s in Presque Isle. Jones later stated that she had received the counterfeit money from an individual who was trading counterfeit bills for drugs.

The Presque Isle Police Department and the U.S. Secret Service investigated the case.

###

Chevron Phillips Chemical Company LP has agreed to make upgrades and perform compliance measures estimated to cost $118 million to resolve allegations that it violated the Clean Air Act and state air pollution control laws at three petrochemical manufacturing facilities located in Cedar Bayou, Port Arthur, and Sweeney, Texas. Chevron Phillips will also pay a $3.4 million civil penalty. The settlement will eliminate thousands of tons of air pollution from flares.

According to the complaint filed with a consent decree, the company failed to properly operate and monitor its industrial flares, which resulted in excess emissions of harmful air pollution at the three Texas facilities. The company regularly “oversteamed” the flares and failed to comply with other key operating constraints to ensure the volatile organic compounds (VOCs) and hazardous air pollutants (HAPs) contained in the gases routed to the flares are efficiently combusted. 

“The Justice Department and EPA will enforce the law against petrochemical plants that violate the Clean Air Act,” said Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division. “We are committed to reducing harmful air pollution from unnecessary and improper flaring, especially near overburdened communities with environmental justice concerns.”

“This settlement will require Chevron Phillips to install pollution control and emissions monitoring equipment at three facilities in Texas, reducing emissions of greenhouse gases and other harmful gases by thousands of tons per year,” said Acting Assistant Administrator Larry Starfield for the EPA’s Office of Enforcement and Compliance Assurance. “Those controls, plus a requirement for fence line monitoring of benzene emissions and corrective actions when benzene readings are high, will result in significant benefits for the local communities in Texas.”

Once fully implemented, the pollution controls are estimated to reduce emissions of climate-change-causing greenhouse gases, including carbon dioxide, methane and ethane, by over 75,000 tons per year. The settlement is also expected to reduce emissions of ozone-forming VOCs by 1,528 tons per year and of toxic air pollutants, including benzene, by 158 tons per year.

The pollutants addressed by the settlement can cause significant harm to public health. VOCs are a key component in the formation of smog or ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma, and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis. Chronic exposure to benzene, which EPA classifies as a carcinogen, can cause numerous health impacts, including leukemia and adverse reproductive effects in women.

Flares are also often large sources of greenhouse gas emissions. Flares are devices used to combust waste gases that would otherwise be released into the atmosphere during certain industrial operations. Well-operated flares should have high “combustion efficiency,” meaning they combust nearly all harmful waste gas constituents, like VOCs and HAPs, and turn them into water and carbon dioxide. The agreement is designed to improve Chevron Phillips’s flaring practices. First, it requires the company to minimize the amount of waste gas that is sent to the flares, which reduces the amount of flaring. Second, the company must improve the combustion efficiency of its flares when flaring is necessary. 

Chevron Phillips will take several steps to minimize the waste gas sent to its flares at each facility. At the Cedar Bayou facility, Chevron Phillips will operate a flare gas recovery system that recovers and “recycles” the gases instead of sending them to be combusted in a flare. The flare gas recovery system will allow Chevron Phillips to reuse these gases as a fuel at its facilities or a product for sale. At the Port Arthur and Sweeny facilities, Chevron Phillips will be required to amend its air quality permits to limit the flow of gas at selected flares. Chevron Phillips will also create waste minimization plans for each facility to further reduce flaring. For flaring that must occur, the agreement requires that Chevron Phillips install and operate instruments and monitoring systems to ensure that the gases sent to its flares are efficiently combusted.

Chevron Phillips will also perform air quality monitoring that is designed to detect the presence of benzene at the fence lines of the three covered plants. Monitoring results must be publicly posted, providing the neighboring communities with more information about their air quality. The monitoring requirements also include triggers for root cause analysis and corrective actions if fence line emissions exceed certain thresholds. Flare compliance is an ongoing priority for EPA under its Creating Clean Air for Communities National Compliance Initiative.

The consent decree, lodged in the Southern District Court of Texas, is subject to a 30-day public comment period and final court approval. The consent decree will be available for viewing at https://www.justice.gov/enrd/consent-decrees.

Sixteen Michigan and Ohio-area defendants, including 12 physicians, have been sentenced to prison for a $250 million health care fraud scheme that included the exploitation of patients suffering from addiction and the illegal distribution of over 6.6 million doses of medically unnecessary opioids. Five physicians were convicted in two separate trials, while 18 other defendants pleaded guilty. Seven defendants await sentencing.

“It is unconscionable that doctors and health care professionals would violate their oath to do no harm and exploit vulnerable patients struggling with addiction,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “These are not just crimes of greed, these are crimes that make this country’s opioid crisis even worse – and that is why the department will continue to relentlessly pursue these cases.”

“Patients look to physicians and medical professionals for their expertise and knowledge, trusting that they will do what is best to take care of them,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “In this circumstance, these medical professionals provided prescription drugs to those with no medical need. It is unacceptable that in this nation’s current opioid crisis, physicians and medical professionals are exploiting the well-being of their patients for profit. Thanks to the diligent work of the FBI and our law enforcement partners, we are able to navigate the important sphere of healthcare fraud and to continue our mission of bringing those who operate these criminal schemes to justice.”  

“Health care professionals who exploit opioid addiction for financial gain do so at the risk of endangering their patients and undermining critical public health efforts to address the opioid epidemic,” said Special Agent in Charge Mario Pinto of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG). “We will continue working with our law enforcement partners to ensure that bad actors are held accountable for such egregious disregard for patient safety and well-being.”

“IRS-CI is committed to working with its law enforcement partners to help fight the opioid crisis and to prevent unscrupulous heath care professionals from using taxpayer funded programs as their own piggybanks,” said Special Agent in Charge Sarah Kull of the IRS Criminal Investigation (IRS-CI), Detroit Field Office.  

According to court documents and evidence presented at trial, the scheme involved doctors refusing to provide patients with opioids unless they agreed to unnecessary back injections. Perpetrated through a multi-state network of pain clinics from 2007 to 2018, the evidence established that the clinics were pill mills frequented by patients suffering from addiction, as well as drug dealers, who sought to obtain high-dosage prescription drugs like oxycodone. The doctors working at the clinics agreed to work only a few hours a week to “stay under the radar” of the Drug Enforcement Administration (DEA), yet were among the highest prescribers of oxycodone in the State of Michigan. 

To obtain prescriptions, the evidence showed that the patients had to submit to expensive, unnecessary and sometimes painful back injections, known as facet joint injections. The injections were selected because they were among the highest reimbursing procedures, rather than based on medical need. Trial testimony established that, in some instances, patients experienced more pain from the shots than from the pain they had purportedly come to have treated, and that some patients developed adverse conditions, including open holes in their backs. Patients largely acquiesced to these unnecessary procedures because of their addiction or desire to obtain pills to be resold on the street by drug dealers. Evidence further established that the defendant physicians repeatedly performed these unnecessary injections on patients over several years and were paid more for facet joint injections than any other medical clinic in the United States.

The evidence further established that the proceeds of the fraud were used to fuel lavish lifestyles. Francisco Patino, a doctor and part-owner of the clinics, bought jewelry, cars and vacations, as well as paid Ultimate Fighting Championship and other mixed martial arts fighters to promote his specialized diet program. Mashiyat Rashid, Patino’s business partner and part-owner of the clinics, purchased private jet flights, courtside tickets to the NBA Finals and expensive real estate. Other physicians involved in the scheme purchased luxury cars, gold bars, and indoor basketball courts and swimming pools. Over $16 million in fraud proceeds was forfeited by the United States from the defendants.

The physicians sentenced by the court include:

• Spilios Pappas, M.D., 63, of Lucas County, Ohio, convicted at trial in 2020 for conspiracy to commit health care fraud and wire fraud, and health care fraud, was sentenced on March 9, to nine years in prison and ordered to pay $32,287,758 in restitution.
• Tariq Omar, M.D., 63, of Oakland County, Michigan, convicted at trial in 2020 for conspiracy to commit health care fraud and wire fraud, and health care fraud, was sentenced on March 9, to eight years in prison and ordered to pay $24,243,603 in restitution.
• Joseph Betro, D.O., 60, of Oakland County, Michigan, convicted at trial in 2020 for conspiracy to commit health care fraud and wire fraud, and health care fraud, was sentenced in February 2022 to nine years in prison and ordered to pay $27,417,516 in restitution.
• Mohammed Zahoor, M.D., 53, of Oakland County, Michigan, convicted at trial in 2020 for conspiracy to commit health care fraud and wire fraud, and health care fraud, was sentenced in February 2022 to eight years in prison and ordered to pay $36,645,577 in restitution.
• Zahid Sheikh, M.D., 62, of Macomb County, Michigan, was sentenced to 70 months in prison, and ordered to pay $2,088,797 in restitution in connection with his guilty plea to one count of conspiracy to commit health care fraud.
• Abdul Haq, M.D., 76, of Ypsilanti, Michigan, was sentenced to four years in prison, and ordered to pay $6,927,046.12 in restitution in connection with his guilty plea to one count of conspiracy to commit health care fraud.
• Steven Adamczyk, M.D., 47, of Bloomfield Hills, Michigan, was sentenced to 42 months in prison, and ordered to pay $1,237,570.97 in restitution in connection with his guilty plea to one count of conspiracy to commit health care fraud.
• David Weaver, M.D., 67, of Canton, Michigan, was sentenced to three years in prison, and ordered to pay $229,500 in restitution in connection with his guilty plea to one count of conspiracy to commit health care fraud.
• Glenn Saperstein, M.D., 58, of Commerce Township, Michigan, was sentenced to 20 months in prison, and ordered to pay $2,722,760.95 in restitution in connection with his guilty plea to one count of conspiracy to commit health care fraud.
• Manish Bolina, M.D., 43, of Canton, Michigan, was sentenced to 20 months in prison, and ordered to pay $310,936.95 in restitution in connection with his guilty plea to one count of false statements.
• Hussein Saad, M.D., 42, of Dearborn, Michigan, was sentenced to 10 months in prison, and ordered to pay $415,207.54 in restitution in connection with his guilty plea to one count of false statements.
• David Yangouyian, M.D., 58, of Farmington Hills, Michigan, was sentenced to six months in prison, and ordered to pay $35,480.98 in restitution in connection with his guilty plea to one count of conspiracy to commit health care fraud.

Other defendants sentenced by the court include:

• Mashiyat Rashid was sentenced in March 2021 to 15 years in prison and ordered to pay over $51 million in restitution in connection with his guilty plea to one count of conspiracy to commit health care fraud and wire fraud, and one count of money laundering.
• Yousef Almatrahi, 34, of Romulus, Michigan, the owner of a home health agency, was sentenced to three years in prison and ordered to pay $1,359,512.69 in restitution in connection with his guilty plea to one count of conspiracy to commit health care fraud in connection with his payment of illegal kickbacks for the referral of patients from the clinics for medically unnecessary home health services.
• Hina Qazi, 39, of Rochester Hills, Michigan, the owner of a home health agency, was sentenced to 18 months in prison and ordered to pay $827,713 in restitution in connection with her guilty plea to one count of conspiracy to commit health care fraud in connection with her payment of illegal kickbacks for the referral of patients from the clinics for medically unnecessary home health services.
• Joshua Burns, 43, of Detroit, Michigan, was sentenced to one-day in prison and ordered to pay $144,00 in restitution in connection with his guilty plea to one count of conspiracy to defraud the United States and pay and receive illegal kickbacks and bribes in connection with Patino’s referral of urine drug testing and sponsorship of MMA fighters.

The following defendants are scheduled to be sentenced on future dates:

• Francisco Patino, M.D., is scheduled to be sentenced on his conviction after a one-month trial in 2021 on one count of conspiracy to commit health care fraud and wire fraud, two counts of health care fraud, one count of conspiracy to defraud the United States and pay and receive health care kickbacks, one count of conspiracy to commit money laundering, and one count of money laundering.
• Yasser Mozeb, 39, of Hamtramck, Michigan, the office manager of the Tri-County clinics, is scheduled to be sentenced in connection with his guilty plea to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and pay and receive illegal kickbacks and bribes.
• Kashif Rasool, M.D., 46, of Troy, Michigan, is scheduled to be sentenced in connection with his guilty plea to one count of conspiracy to commit health care fraud.
• Tariq Siddiqi, 44, of Sterling Heights, Michigan, is scheduled to be sentenced in connection with his guilty plea to one count of conspiracy to commit health care fraud in connection with his payment of illegal kickbacks for the referral of patients from the clinics for medically unnecessary home health services.
• Tasadaq Ali Ahmad, 54, of Canton, Michigan, the owner of a home health agency, is scheduled to be sentenced in connection with his guilty plea to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and pay and receive kickbacks.
• Stephanie Borgula, 41, of Livonia, Michigan, a licensed physical therapist, is scheduled to be sentenced in connection with her guilty plea to one count of conspiracy to commit health care fraud.
• Meiuttenun Brown, M.D., 51, of Toledo, Ohio, is scheduled to be sentenced in connection with her guilty plea to one count of conspiracy to commit health care fraud.

The FBI, HHS-OIG and IRS-CI investigated the case.

Assistant Chief Jacob Foster of the National Rapid Response Strike Force and Trial Attorneys Thomas Tynan, Steven Scott, Kathleen Cooperstein and Shankar Ramamurthy of the Justice Department’s Fraud Section prosecuted the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this Program, comprised of 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

Two former senior Venezuelan prosecutors have been charged with money laundering for their receipt of bribes in exchange for agreeing not to pursue criminal charges against certain individuals in Venezuela. 

According to the indictment, Daniel D’Andrea Golindano (D’Andrea), 43, and Luis Javier Sanchez Rangel (Sanchez), 35, both of Venezuela, are each charged with one count of conspiracy to commit money laundering and two counts of engaging in monetary transactions in criminally derived property.

The indictment alleges that, in or around 2017, D’Andrea and Sanchez, in their official roles as prosecutors within the Venezuelan Attorney General’s Office, were investigating an individual, identified as Contractor 1 in the indictment, for alleged corruption relating to contracts obtained with subsidiaries of Venezuela’s state-owned oil company (PDVSA). D’Andrea and Sanchez discussed and agreed to receive bribes of more than $1 million in exchange for not pursuing criminal charges against Contractor 1 and others. 

According to the indictment, D’Andrea caused a co-conspirator to create false invoices seeking payment, purportedly for medical diagnostic equipment, from Contractor 1. In or around 2017, Contractor 1 caused the payment of over $1 million dollars to an account in the Southern District of Florida for the benefit of D’Andrea and Sanchez. As a result of this payment, D’Andrea and Sanchez caused the Venezuelan Attorney General’s Office not to seek criminal charges against Contractor 1 and others. D’Andrea and Sanchez used the proceeds from these bribes for their personal benefit. 

If convicted, the defendants face up to 20 years in prison for conspiracy to commit money laundering and up to 10 years in prison for each count of engaging in transactions in criminally derived property. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. The defendants are in Venezuela and remain at large.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida, and Special Agent in Charge Anthony Salisbury of Homeland Security Investigations (HSI) Miami office made the announcement.

Trial Attorney Alexander Kramer of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael N. Berger of the U.S. Attorney’s Office for the Southern District of Florida are prosecuting the case.  

The Fraud Section has lead responsibility for investigating and prosecuting all Foreign Corrupt Practices Act (FCPA) matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

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

Two California men were sentenced yesterday on conspiracy and hate crime charges for attacking five victims inside a restaurant while shouting ethnic slurs, hurling chairs at the victims and threatening to kill them.

William Stepanyan, 23, of Glendale, was sentenced to five years in prison and Harutyun Harry Chalikyan, 24, of Tujung, was sentenced to 15 months in prison. Each defendant was also sentenced to three years of supervised release. The court also ordered the defendants to jointly pay $21,200 in restitution for damage to the Turkish restaurant. Each defendant previously pleaded guilty to one count of conspiracy and one count of committing a hate crime.

According to the facts admitted in the plea agreements, the defendants, who identify as members of the Armenian-American community, attacked five victims inside a family-owned Turkish restaurant on Nov. 4, 2020, because of their anger about Turkey’s support of Azerbaijan in its conflict with Armenia. Earlier that day, Stepanyan sent a text message saying that he planned to go “hunting for [T]urks.” That evening, the defendants drove to the restaurant with a group of approximately nine individuals who planned to demonstrate outside the establishment because they considered it symbolic of Turkey. Upon arriving at the restaurant, Stepanyan and Chalikyan stormed inside, threw hard wooden chairs at the victims, smashed glassware, destroyed a plexiglass barrier and overturned tables. One of the defendants asked the victims, “Are you Turkish?” and shouted, “We came to kill you!  We will kill you!” The attack caused at least $20,000 of damage to the restaurant and physically injured multiple victims. 

“The defendants violently attacked people inside a family-owned restaurant because of their perceived nationality,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Such violence based on national origin has no place in our society. The Justice Department will continue to vigorously prosecute bias-motivated crimes in an effort to secure justice for the victims and the communities they are meant to target and intimidate.”

“These defendants were driven by hate, and their actions were deplorable,” said U.S. Attorney Tracy L. Wilkison for the Central District of California. “The physical injuries and emotional trauma to the victims cannot be understated. We hope that the sentences handed down today will help vindicate those harms.”

“The victims in this case were brutally attacked by the defendants who trampled their civil rights and likely caused lasting psychological pain for nothing more than the perception of where they were born,” said Assistant Director in Charge Kristi Johnson of the FBI Los Angeles Field Office. “The FBI is committed to investigating civil rights violations and holding accountable individuals who commit violent acts motivated by hate.”

Trial Attorney Michael J. Songer of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Lindsey Greer Dotson of the Central District of California prosecuted the case on behalf of the government. The FBI conducted the investigation with the assistance of the Beverly Hills Police Department.

A federal jury in the Southern District of Texas convicted a Texas pharmacy owner yesterday for unlawfully distributing controlled substances and laundering money from his now-shuttered pharmacies.

According to court documents and evidence presented at trial, Clint Carr, 32, of Cypress, co-owned and operated CC Pharmacy in Houston, and CC Pharmacy 2 and CC Pharmacy 3 in the Austin area with co-conspirator Dustin Curry. In just 18 months, Carr, Curry and their co-conspirators unlawfully distributed over 1.5 million dosage units of controlled substances, including over 1.1 million pills of oxycodone and hydrocodone. Trial evidence showed that CC Pharmacy unlawfully dispensed controlled substances — mostly oxycodone and hydrocodone — in bulk for cash, based on mostly forged or stolen prescriptions brought in by drug couriers posing as staff of long-term care facilities. CC Pharmacy brought in over $5.5 million from the unlawful sale of these controlled substances, cash proceeds which Carr and his co-conspirators structured to avoid reporting requirements. Evidence at trial showed that Carr used these drug proceeds to finance a lavish lifestyle, including the down payment on a $100,000 Ford pickup truck.

“Carr’s conviction is a reminder that the Department of Justice will hold accountable those who have helped fuel the country’s opioid epidemic,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “This includes pharmacy owners who have effectively poisoned our communities.”

“This case is another example of the DEA’s continued commitment to combat our nation’s opioid crisis to reduce the diversion of controlled substances that drives drug overdose deaths and violent crime in our communities,” said Special Agent in Charge Daniel C. Comeaux of the Drug Enforcement Administration (DEA), Houston Division. “This conviction is a credit to the tireless work of our investigators and prosecutors to make our communities safer.” 

Carr was convicted of one count of conspiracy to unlawfully distribute and dispense controlled substances, four counts of unlawfully distributing and dispensing controlled substances, one count of conspiracy to launder monetary instruments, and two counts of engaging in monetary transactions in property derived from specified unlawful activity. He faces a maximum total penalty of up to 140 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing is scheduled for May 27.

To date, five other co-conspirators, including Curry, have pleaded guilty to unlawfully distributing controlled substances.

DEA Houston, including the DEA Austin Resident Office, investigated the case.

Trial Attorneys Devon Helfmeyer and Courtney Chester of the Criminal Division’s Fraud Section are prosecuting the case. Assistant U.S. Attorney Kristine Rollinson of the Southern District of Texas is handling forfeiture.

Michael Marotta, 26, of Sewell, New Jersey, pleaded guilty today to making threatening interstate communications. Marotta admitted that he used an anonymizing text message service to threaten physical harm to a Black woman and her family in Maryland. 

According to Marotta’s plea agreement, on April 14, 2020, Marotta used an anonymizing mobile phone application to send a threatening message to a Black Maryland woman. In the message, Marotta used racial epithets to describe the Maryland woman and her family, and he threatened to come to their home and do physical harm. As detailed in the plea agreement, Marotta wrote, among other things, “I know where you live now, I’m coming to rape your family” and “eat my bullets.” As detailed in his plea agreement, Marotta claims he does not know the recipient-victim of the message, nor does the recipient-victim know Marotta.

“The vile threats issued by this defendant have no place in civilized society,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “The department, and specifically the Civil Rights Division, will use all tools at our disposal to ensure that people who interfere with the rights of others will be brought to justice.”

“We at the U.S. Attorney’s Office take seriously our obligation to protect the civil rights of all individuals,” said U.S. Attorney Erek L. Barron of the District of Maryland. “We will not tolerate racially based threats and will prosecute such crimes to the fullest extent of the law.”

“The FBI takes threats of violence seriously,” said Special Agent in Charge Thomas J. Sobocinksi of the FBI’s Baltimore Field Office. “We encourage anyone who believes their civil rights were violated to report it to their local police department or FBI field office.”

Marotta faces a maximum sentence of five years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. U.S. District Judge Stephanie A. Gallagher has scheduled sentencing for Marotta on May 25.

Assistant U.S. Attorney Michael Cunningham the District of Maryland and Trial Attorney Thomas Johnson of the Justice Department’s Civil Rights Division are prosecuting the case.

A federal jury convicted a New Jersey rheumatologist today for defrauding Medicare and other health insurance programs by billing for services that patients never received.

According to court documents and evidence presented at trial, Alice Chu, 64, of Fort Lee, owned and operated a rheumatology practice in Clifton. From 2010 through 2019, Chu billed Medicare and other health insurance programs for expensive infusion medication that her practice never purchased. Chu also fraudulently billed millions of dollars for allergy services that patients never needed or received.

Chu was convicted of one count of conspiracy to commit health care fraud and five counts of health care fraud. She is scheduled to be sentenced on July 14 and faces a maximum penalty of 10 years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent in Charge George M. Crouch Jr. of the FBI’s Newark Field Office; Special Agent in Charge Scott J. Lampert of the Department of Health and Human Service Office of the Inspector General (HHS-OIG); and Special Agent in Charge Patrick J. Hegarty of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DOD-OIG) made the announcement.

The FBI, HHS-OIG and DOD-OIG investigated the case.

Acting Assistant Chief Rebecca Yuan and Trial Attorney Nicholas Peone of the Justice Department’s Fraud Section are prosecuting the case.

A Georgia bar owner pleaded guilty today to tax evasion.

According to court documents and statements made in court, James Stafford, 44, engaged in a scheme to evade taxes he and others owed on income earned from bars in Statesboro and Milledgeville, Georgia. Stafford was nominally the sole owner of Chrysha Inc., which operated a bar in Statesboro, and BGRG Inc., which operated a bar and a restaurant in Milledgeville. In practice, however, both companies had multiple partners with varying percentages of ownership.

Stafford provided false information to an accountant who prepared the companies’ 2014 corporate tax returns. Specifically, he underreported gross receipts and omitted cash distributions made to the true partners. As a result, Stafford caused false corporate tax returns to be filed with the IRS. By filing false corporate tax returns, Stafford also enabled the true owners of the bars and restaurant to evade their respective individual income tax liabilities. Additionally, Stafford underreported his own income on his 2014 individual tax return filed with the IRS.

Stafford is scheduled to be sentenced at a later date and faces a maximum penalty of five years in prison. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney David Estes for the Southern District of Georgia made the announcement.

IRS-Criminal Investigation and the FBI are investigating the case.

Assistant Chief David Zisserson and Trial Attorney Casey Smith of the Tax Division, and the U.S. Attorney’s Office for the Southern District of Georgia, are prosecuting the case.

United States Attorney Bob Murray announced today that DAVID A. JACKSON, a/k/a GERALD DAVID JACKSON, a/k/a GERALD D. RODERICK-JACKSON, of Gillette, Wyoming pleaded guilty to charges of wire fraud, willful failure to collect or pay over tax, and filing a false tax return. Jackson appeared for a change of plea hearing before United States District Court Judge Nancy D. Freudenthal on February 23, 2022. Sentencing has been set for May 16, 2022.

Wire fraud carries a maximum penalty of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000. Willful failure to collect or pay over tax carries a maximum penalty of up to five years in prison, up to three years of supervised release, and a fine of up to $10,000. False statement on a tax return carries a maximum penalty of up to three years in prison, up to one year of supervised release, and a fine of up to $100,000. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

This case was investigated by the Internal Revenue Service – Criminal Investigation and the Gillette Police Department. Assistant United States Attorney Margaret M. Vierbuchen is prosecuting the case. 

Case No. 21-cr-00087-NDF

A federal grand jury in Midland, Texas, returned an indictment charging an oilfield company and an executive of the company with worker safety and environmental crimes.

According to court documents, Aghorn Operating Inc. owns and operates oil wells and leases in Texas. Aghorn and Trent Day, Vice President of Aghorn, were indicted for violating the Clean Air Act relating to releases of hydrogen sulfide from an Aghorn facility, as well as obstructing an Occupational Safety and Health Administration (OSHA) investigation. Aghorn was also charged with three worker safety OSHA crimes for causing the death of an Aghorn employee. In addition, Aghorn and Day, along with another corporation, Kodiak Roustabout Inc., were charged with violating the Safe Drinking Water Act and making false statements regarding the mechanical integrity of Aghorn injection wells in forms and pressure charts filed with the State of Texas Railroad Commission.

The charges are the result of an investigation of the Oct. 26, 2019, death of Aghorn employee, Jacob Dean and his wife, Natalee Dean. Both were overcome by hydrogen sulfide, a poisonous gas, at an Aghorn facility in Odessa.

“The Justice Department will protect and defend the right to a safe workplace, and we will prosecute those who violate federal law aimed at keeping workers safe,” said Assistant Attorney General Todd Kim for the Justice Department's Environment and Natural Resources Division.

“Our nation's environmental laws are designed to protect our communities and workers from hazardous pollutants,” said Assistant Special Agent in Charge Todd “Tony” Adams of EPA's Southwest Area Criminal Investigation Program. “Today's indictments demonstrate that companies intentionally violating those laws and endangering others will be held responsible for their crimes.”

According to the allegations in the indictment, on the night of the incident, Jacob Dean responded to a call to check the pump house at the facility, an enclosed building with two bay doors. His wife, Natalee Dean, knew where Jacob had gone, and started calling him when he did not return in a timely manner. When those calls went unanswered, Natalee drove to the station with her two children, aged nine and six. A pump had failed in the pump house, causing a leak of produced water containing hydrogen sulfide. Jacob had been overcome by hydrogen sulfide in the pump house, and when Natalee arrived at the station, she exited the vehicle and proceeded to the pump house, where she too was overcome by the gas. Both Jacob and Natalee were found dead by the first responders to the scene.

The indictment stated that: “Aghorn was aware that its produced water contained high amounts of H2S as well as the deadly nature of the gas.” Aghorn and Trent Day allegedly “knowingly violated their general duty to prevent the accidental release” of hydrogen sulfide and also knowingly “placed another person in imminent danger of death or serious bodily injury.”

OSHA began an investigation two days later. The indictment alleges that Aghorn and Day obstructed the OSHA investigation, arising out of statements made by Day to OSHA in two separate interviews.

The mechanical integrity of an injection well must be evaluated by conducting pressure tests or alternative testing methods approved by the Railroad Commission. In evaluating the results of a pressure test, the Railroad Commission considers the level of pollution risk that loss of well integrity would cause. Aghorn operated numerous produced water injection wells, and submitted purported well pressure test results to the Railroad Commission. The indictment alleges that the defendants made false statements regarding the mechanical integrity of Aghorn injection wells in forms and pressure charts filed with the Railroad Commission.

If convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The case was investigated by the EPA’s Criminal Investigation Division. Senior Trial Attorney Christopher Costantini and Trial Attorney Mark Romley of the Environment and Natural Resources Divsion’s Environmental Crimes Section are prosecuting the case.

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

A former Hialeah Police Department Sergeant pleaded guilty today to three counts of depriving women of their civil rights under color of law by sexually abusing them.

Jesus Manuel Menocal Jr., 34, of Miami was previously charged with three counts of depriving women of their civil rights under color of law.

At the change of plea hearing held today before U.S. District Judge Kathleen M. Williams, Menocal admitted that he kissed a woman and caused her to touch his exposed penis; had a second woman, who was in psychiatric crisis, perform oral sex on him; and coerced a third woman, who was walking alone at night, into submitting to oral and vaginal sex. While not directly related to the offenses to which he pleaded guilty, Menocal also admitted to bringing a fourth female into a Hialeah Police Department building and ordering her to remove her shorts and underwear, causing her to expose her buttocks to him. Menocal admitted that he was on-duty and in uniform during all of these acts, abusing his official authority.

“We will not stand by idly when law enforcement officials abuse their power and position to sexually exploit and harm women,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Civil Rights Division will continue to vigorously investigate and prosecute government officials who use the power of their office to sexually abuse and harm vulnerable people in their communities. We hope that this conviction sends a strong message to survivors of law enforcement sexual misconduct, that their allegations will be investigated and taken seriously.”

“Menocal sexually exploited the very people he swore to protect,” said U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida. “He betrayed his oath as a police officer and cast a dark shadow over the outstanding work done by the fine law enforcement professionals who serve our communities. Such egregious civil rights violations will not be tolerated.”

“Jesus Menocal is a predator who disgraced the badge he once wore by using his status as a police officer to sexually abuse women,” said Assistant Special Agent in Charge John J. Bernard of FBI Miami. “His actions are depraved and serve only to diminish the hard work and professionalism of the vast majority of South Florida law enforcement officers who follow their oath of office and whose conduct is above reproach.”

Menocal is scheduled for sentencing on May 12, ­­­­2022. He faces a statutory maximum sentence of three years in prison.

The case was investigated by the FBI with assistance from the Hialeah Police Department. The case is being prosecuted by Assistant U.S. Attorneys Edward N. Stamm and Monica K. Castro of the Southern District of Florida, and Trial Attorney Kyle Boynton and Special Litigation Counsel Samantha Trepel of the Civil Rights Division of the Department of Justice.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.

The Department of Justice, together with the Federal Trade Commission (FTC), announced today that the government entered into an agreement with Kurbo Inc. and its parent company, WW International Inc. (formerly Weight Watchers International Inc.) (collectively, “Defendants”) and will collect $1.5 million in civil penalties from defendants as part of a settlement to resolve allegations that they violated the Children’s Online Privacy Protection Act (COPPA) and Children’s Online Privacy Protection Rule (COPPA Rule) in connection with their weight management service for children, Kurbo by WW.

In a complaint filed in the U.S. District Court for the Northern District of California, the government alleged that defendants designed and marketed the Kurbo by WW mobile application and website for use by children as young as eight years old. The defendants also possessed actual knowledge that the application and website collected personal information from children, including their names, telephone numbers, email addresses and identifiers used to track their devices, as well as other sensitive information like height, weight, food intake and physical activity. The defendants nonetheless failed to notify parents that they were collecting children’s personal information and to obtain verifiable parental consent for that collection, as required by the COPPA Rule.

“Parents have a right to know and consent before companies collect their children’s personal information,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to enforcing the protections against unauthorized collection of information from consumers, particularly children.” 

“Weight Watchers and Kurbo marketed weight management services for use by children as young as eight and then illegally harvested their personal and sensitive health information,” said Chair Lina M. Khan of the FTC. “Our order against these companies requires them to delete their ill-gotten data, destroy any algorithms derived from it, and pay a penalty for their lawbreaking.”

The stipulated order entered requires the defendants to pay $1.5 million in civil penalties and bars them from collecting personal information from children in a manner that violates the COPPA Rule. It also prohibits them from using children’s personal information that was previously collected unless they obtain verifiable parental consent and subjects them to compliance reporting obligations.

This matter was handled by Trial Attorneys Rachael Doud and Zachary Cowan and Assistant Director Lisa Hsiao of the Civil Division’s Consumer Protection Branch. Danielle Estrada and David Walko represented the FTC.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.

Two Florida tax preparers were sentenced to prison yesterday for conspiring to defraud the United States and preparing false tax returns.

Nikency Alexis, the owner and operator of Unity Tax & Financial Services (Unity Tax), a Broward County tax preparation business, was sentenced to 45 months  in prison, and Thony Guillaume, who worked as a return preparer at Unity Tax, was sentenced to 40 months in prison. According to court documents, from 2011 through 2016, Alexis and Guillaume conspired to defraud the IRS by preparing returns for clients that claimed fictitious business and education expenses the clients never incurred. After learning about the criminal investigation, Alexis and Guillaume continued to file false returns and concealed their involvement in the filing of those returns by listing other individuals as the paid preparers. In total, Alexis and Guillaume sought more than $2.8 million in fraudulent refunds from the IRS.

In addition to the terms of imprisonment, U.S. District Judge Raag Singhal ordered Alexis to serve three years of supervised release and to pay approximately $464,006 in restitution to the IRS. The judge ordered Guillaume to serve three years of supervised release and to pay approximately $221,823 in restitution to the IRS.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida made the announcement.

IRS-Criminal Investigation investigated the case.

Trial Attorney Matthew Hicks of the Justice Department’s Tax Division and Assistant U.S. Attorney Deric Zacca for the Southern District of Florida prosecuted the case.

Northern Indiana Public Service Company (NIPSCO) will clean up soil contamination at individual residences within the Town of Pines Groundwater Plume Superfund site in Porter County, Indiana, at an estimated cost of $11.8 million to resolve federal and state Superfund liability. The complaint, filed simultaneously with the consent decree, alleges that the company is liable for the cleanup of coal ash from its power generation facility that it distributed as landscaping fill in the Town of Pines and its vicinity. The soils contaminated by coal ash contain hazardous substances including arsenic, thallium and lead.

“Today’s settlement requires NIPSCO to address the contamination it contributed to the Town of Pines Superfund site,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “This settlement is a critical step toward the remediation of the site and will minimize risks to owners of contaminated property and to the environment.”

“This settlement requires NIPSCO to remove soil contaminated with coal ash from the utility’s power generation facility, and to monitor groundwater in and around the Town of Pines, Indiana,” said Acting Assistant Administrator Larry Starfield of EPA’s Office of Enforcement and Compliance Assurance. “This cleanup work will help protect residents from exposure to arsenic and other hazardous substances.”

“This settlement will help protect the environment and the health of people in northwest Indiana by cleaning up coal ash from residential properties,” said Administrator Debra Shore of EPA Region 5. “Removing contaminated soil and monitoring groundwater at the Town of Pines site is a vital part of this settlement with NIPSCO.”

“Hoosiers stand to benefit from NIPSCO’s commitment to reimburse taxpayers for public money spent during this lengthy process,” said Indiana Attorney General Todd Rokita. “They stand to benefit, as well, from the company’s pledge to finish the cleanup in the Town of Pines made necessary by disposal of its coal ash in residential areas. We must always work to protect Hoosiers and uphold the rule of law.”

“By entering into this settlement with EPA and the state, NIPSCO will complete the process of cleaning up and restoring residential yards impacted by the disposal of coal ash in the Town of Pines, and ensure the safety of the drinking water supply by monitoring both drinking water and groundwater wells for potential contamination caused by the disposal,” said Commissioner Brian Rockensuess of the Indiana Department of Environmental Management.  

The consent decree requires NIPSCO to identify residential soil contamination above clean up levels from its disposal of coal ash, excavate the contaminated soils, and transport excavated contaminated soil to a licensed waste disposal facility. NIPSCO is also required to restore excavated properties using clean backfill, implement restrictions at the excavated properties where necessary to prevent exposure to any remaining contamination that might be left at depth, and monitor residential drinking water wells, groundwater monitoring wells, surface water and sediments to ensure that the contamination has not migrated to those locations. The company will also reimburse EPA a large percentage of its past costs and pay all future costs incurred by EPA and the State of Indiana in overseeing the cleanup.

More information about this settlement can be found at https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=0508071.

The consent decree, lodged in the U.S. District Court for the Northern District of Indiana, is subject to a 30-day public comment period and final court approval. The consent decree will be available for viewing at https://www.justice.gov/enrd/consent-decrees.

The Justice Department, together with the Federal Trade Commission (FTC) and the U.S. Food and Drug Administration (FDA), today announced a civil enforcement action against B4B Earth Tea LLC, B4B Corp., and Andrew Martin Sinclair (collectively, “defendants”) for alleged violations of the COVID-19 Consumer Protection Act, the FTC Act, and the Federal Food, Drug, and Cosmetic Act (FDCA).

According to a complaint filed in the U.S. District Court for the Eastern District of New York, the defendants advertised that their herbal tea product, Earth Tea, could prevent or treat COVID-19, without competent or reliable scientific evidence to support those claims. Further, the defendants allegedly made deceptive statements about a scientific study to bolster their unproven COVID-19 claims. The complaint also alleges Earth Tea is an unapproved new drug the defendants are selling in violation of the FDCA. The complaint seeks civil penalties and other available equitable relief, as well as an injunction to stop the defendants from continuing their unlawful marketing and sales of Earth Tea.

“The Department of Justice will not tolerate individuals or companies seeking to profit from the COVID-19 public health emergency by unlawfully advertising unproven products,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice’s Civil Division. “The department is committed to protecting consumers and enforcing the COVID-19 Consumer Protection Act and the FDCA against those who unlawfully market unproven COVID-19 treatments.”

“COVID-19 has tragically claimed nearly one million lives in this country and close to six million lives worldwide,” stated U.S. Attorney Breon Peace for the Eastern District of New York. “Unfortunately, there are too many people who are taking advantage of this crisis by pushing alleged treatment products that are nothing more than snake oil. We will not tolerate attempts to make a dishonest dollar while putting our communities at risk during a pandemic.”

“Without any scientific evidence, the defendants claimed that drinking their herbal tea is more effective in preventing COVID-19 than approved vaccines, and cures anyone who has gotten ill within 24 hours,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “In bringing this matter with our partners at the Department of Justice and the Food and Drug Administration, the Commission continues its commitment to using every tool available to stop and deter those who would treat the pandemic as opportunity to peddle bogus treatments.”

“Products like this may delay patients from seeking proven treatments from their health care provider,” said Associate Commissioner Judy McMeekin, Pharm.D., for FDA Regulatory Affairs. “Preying on patients’ vulnerabilities during the COVID-19 pandemic is unacceptable. The FDA will continue to actively monitor the U.S. market for any companies or individuals falsely marketing products with claims it prevents or treats COVID-19, and will take actions against those who violate the law and endanger patients.”

The COVID-19 Consumer Protection Act, passed by Congress in December 2020, prohibits deceptive acts or practices associated with the treatment, cure, prevention, mitigation or diagnosis of COVID-19. Persons who violate the COVID-19 Consumer Protection Act may be subject to civil penalties, injunctive relief and other remedies available under the FTC Act.

The FDCA provides that a product is an unapproved new drug if it is intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease in humans but is not generally recognized as safe and effective for its intended uses and is not the subject of an FDA approval. Remedies for violation of the FDCA include injunctive relief.  

This matter is being handled by Senior Trial Attorney James T. Nelson and Trial Attorney Zachary A. Dietert of the Civil Division’s Consumer Protection Branch, and Assistant U.S. Attorney Michael Blume from the U.S. Attorney’s Office for the Eastern District of New York. Robert Van Someren Greve represents the FTC, and Michael Shane represents the FDA.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.

The Justice Department concluded today that Colorado unnecessarily segregates people with physical disabilities in nursing facilities, in violation of the Americans with Disabilities Act (ADA) and the Supreme Court’s decision in Olmstead v. L.C. The department’s findings, detailed in a letter to Colorado Governor Jared Polis, follow a thorough and multi-year investigation into the state’s system of care for people with physical disabilities.

The ADA and the Olmstead ruling require state and local governments to make services available to people with disabilities in the most integrated setting appropriate to their needs, regardless of age or type of disability. However, many Coloradans with physical disabilities are denied a meaningful choice to receive the services they need in their own homes and communities. Community-based services that can help people live at home successfully include help bathing, dressing, managing medications and preparing meals.

“People with disabilities have too often been unlawfully segregated in institutions like nursing facilities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Civil Rights Division will vigorously enforce the rights of people with physical disabilities, including older adults, to access the community-based services they need to age in place and thrive at home.”

“Older Coloradans and Coloradans with physical disabilities increasingly expect to remain at home as their support needs increase,” said U.S. Attorney Cole Finegan for the District of Colorado. “I’m hopeful this situation can be remedied so that individuals with physical disabilities are no longer isolated.” 

The department’s investigation found that a significant number of Colorado’s Medicaid-funded nursing facility residents are interested in transitioning to community-based settings and could successfully do so with appropriate supports. However, few Coloradans with physical disabilities who want to move out of their nursing facilities are able to do so. The investigation found that most residents are unaware of the services available to help them move and live successfully in the community. 

The right to receive needed services in the community instead of an institution has become particularly acute during the COVID-19 pandemic. Reports show that a significant number of all deaths from COVID-19 in the United States are linked to nursing facilities and other long-term care facilities. Enabling people to move out of nursing facilities and into the community can reduce that risk and satisfy the ADA by avoiding unnecessary institutionalization.

This investigation was conducted by the Civil Rights Division’s Disability Rights Section with the assistance of the U.S. Attorney’s Office of the District of Colorado. The full findings letter can be found at www.ada.gov. Additional information about the Civil Rights Division’s Olmstead enforcement is available on its website at https://www.ada.gov/olmstead/.

A German national pleaded guilty in the Eastern District of Michigan to leading a price-fixing conspiracy from 2007 to 2012 and was sentenced to time served.

Volker Hohensee, a German national and onetime Canadian resident who served as President of Espar Inc., a parking heater manufacturing company located in the United States and Canada, was indicted by a grand jury in December 2015. Hohensee fled Canada and remained a fugitive for five years. In December 2020, Hohensee was arrested while attempting to enter the Canary Islands and remained incarcerated in a Spanish facility until his plea today.

“The arrest, plea, and sentencing of Volker Hohensee is a prime example of the Antitrust Division’s commitment to bring fugitives to justice,” said Assistant Attorney General Jonathan Kanter of the Department of Justice’s Antitrust Division. “The price that this defendant paid by choosing to flee — including five years of fugitive status and 15 months spent in the custody of Spanish law enforcement — serves as a cautionary tale for other defendants who contemplate running from a charge rather than facing it. Be assured that the Antitrust Division and our law enforcement partners — domestic and international — have the patience and tools to bring indicted defendants to justice.”

According to the one-count felony information describing the charge to which Hohensee pleaded guilty, Hohensee and his co-conspirators, including an executive at a competing company, worked together to artificially set aftermarket prices for parking heaters in the United States and elsewhere in North America. Parking heaters are devices that heat the interior compartment of a commercial motor vehicle independent of the operation of the vehicle’s engine. Hohensee and his co-conspirators met to discuss parking heater prices, agreed to set a price floor for parking heater kits and agreed to coordinate the timing and amount of price increases for parking heaters.

Two other executives, both German nationals, were indicted alongside Hohensee in 2015. Frank Haeusler is a former Vice President of Espar Inc.’s German affiliate, Eberspaecher, and a former executive of a competing company. Harald Sailer was a vice president at Eberspaecher. Both remain at large. In 2015, in the Eastern District of New York, Espar Inc. pleaded guilty to a price-fixing charge stemming from the same conspiracy and was sentenced to pay a criminal fine of $14.9 million.

After accepting Hohensee’s guilty plea, the federal district court observed that Hohensee had served 15 months in Spain’s custody after being arrested, and sentenced him to time served.

The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in Spain and the Canary Islands.

This case is the result of a federal antitrust investigation into price-fixing in the parking heaters market, conducted by the Antitrust Division and the FBI. The original charges, and today’s plea and sentencing, were handled by the Antitrust Division’s New York Office and the FBI’s New York Field Office. Assistance was provided by the Justice Department’s Office of International Affairs and the U.S. Attorney for the Eastern District of Michigan.

Anyone with information on price fixing, bid rigging, or other anticompetitive conduct should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit https://www.justice.gov/atr/citizen-complaint-center.

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

Gregory Evans, 50, was indicted today by a federal grand jury in Lexington, Kentucky, for using unlawful force against a pretrial detainee while Evans was a captain at the Madison County Detention Center.

Today’s indictment charges Evans with one count of deprivation of rights under color of law, one count of writing a false report about the incident and one count of making false statements to law enforcement. The indictment alleges that Evans used unreasonable force when he assaulted pretrial detainee E.B., resulting in bodily injury to E.B.; and it further charges that Evans wrote a false report about the assault and that he made false statements to the FBI.

The first count carries a maximum penalty of 10 years of imprisonment, the second count carries a maximum penalty of 20 years and the third count carries a maximum penalty of five years. Actual sentences, in case of conviction, are decided by the judge.

This case was investigated by the Lexington Resident Agency of the FBI. It is being prosecuted by Assistant U.S. Attorney Zachary Dembo for the Eastern District of Kentucky and Trial Attorney Andrew Manns for the Justice Department’s Civil Rights Division.

Assistant Attorney General Kristen Clarke for the Civil Rights Division, U.S. Attorney Carlton S. Shier IV for the Eastern District of Kentucky and Special Agent in Charge Jodi Cohen of the FBI Louisville Field Office made the announcement.

An indictment is merely an allegation and the defendant is presumed innocent unless proven guilty.

A federal jury convicted a Tennessee physician and his wife yesterday in the Northern District of Alabama for unlawfully distributing opioids, providing unnecessary services and defrauding insurers from their now-shuttered Alabama clinics.   

According to court documents and evidence presented at trial, Mark Murphy, 65, and his wife, Jennifer Murphy, 65, both of Lewisburg, owned and operated North Alabama Pain Services (NAPS), which closed its Decatur and Madison offices in early 2017. Over the approximately five-year period leading up to the clinic closing its Alabama locations, Murphy and his wife, who was the office manager, caused over $50 million in fraudulent or unnecessary medical services to be charged to Medicare, TRICARE, Blue Cross Blue Shield of Alabama and others. Evidence at trial showed that NAPS provided pre-signed prescriptions to thousands of patients a month, including prescriptions written outside the usual course of professional practice without a legitimate medical purpose. The Murphys also solicited and received unlawful payments for referring fraudulent or unnecessary services to patients. Jennifer Murphy was also convicted of tax-related charges for underreporting clinic income.

Both defendants were convicted of conspiracy to unlawfully distribute controlled substances and conspiracy to commit health care fraud, along with various substantive counts related to the same. They were also convicted of conspiring to defraud the United States and receiving kickbacks. The Murphys face a maximum of 20 years in prison for the drug charges and a maximum of 10 years in prison for the health care fraud charges. Both defendants face a maximum of five years in prison for charges stemming from violations of the Anti-Kickback Statute, and Jennifer Murphy faces up to three years in prison for the tax charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing is scheduled for June 30. 

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Prim F. Escalona for the Northern District of Alabama; Special Agent in Charge Bradford L. Byerly of the Drug Enforcement Administration (DEA) New Orleans Field Division; Special Agent in Charge Johnnie Sharp Jr. of the FBI Birmingham Division; Special Agent in Charge James E. Dorsey of IRS Criminal Investigation (IRS-CI) Atlanta Field Office; and Special Agent in Charge Tamala E. Miles of the Department of Health and Human Service Office of the Inspector General (HHS-OIG) Atlanta Region made the announcement.

FBI, HHS-OIG, IRS-CI and DEA investigated the case.

Assistant Chief Jillian Willis and Trial Attorney Emily Gurskis of the Criminal Division’s Fraud Section and Assistant U.S. Attorney J.B. Ward of the Northern District of Alabama are prosecuting the case.

The Fraud Section leads the Appalachian Regional Prescription Opioid (ARPO) Strike Force. Since its inception in October 2018, the ARPO Strike Force, which operates in 10 districts, has charged more than 90 defendants who are collectively responsible for distributing more than 105 million pills. The ARPO Strike Force is part of the Health Care Fraud Strike Force Program, which since March 2007 has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at: https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

A regional leader of the Oath Keepers pleaded guilty today to seditious conspiracy and obstruction of an official proceeding for his actions before, during and after the breach of the U.S. Capitol on Jan. 6, 2021. His and others’ actions disrupted a joint session of the U.S. Congress convened to ascertain and count the electoral votes related to the presidential election.

Joshua James, 34, of Arab, Alabama, pleaded guilty to seditious conspiracy in connection with the Capitol breach. As part of the plea agreement, James has agreed to cooperate with the government’s ongoing investigation.

As described in court documents, James is the regional leader in charge of the Alabama chapter of the Oath Keepers. The Oath Keepers are a large but loosely organized collection of individuals, some of whom are associated with militias. Though the Oath Keepers will accept anyone as members, they explicitly focus on recruiting current and former military, law enforcement, and first-responder personnel.

In his guilty plea, James, a military veteran, admitted that, from November 2020 through January 2021, he conspired with other Oath Keeper members and affiliates to use force to prevent, hinder and delay the execution of the laws of the United States governing the transfer of presidential power. He used encrypted and private communications, equipped himself with a variety of weapons, donned combat and tactical gear, and was prepared to answer a call to take up arms.

According to court documents, on Jan. 4, 2021, James and others traveled to the Washington, D.C. metropolitan area. He brought a semi-automatic handgun and stored multiple firearms at a Virginia hotel. On Jan. 6, after learning the Capitol had been breached, James and others traveled to the Capitol on golf carts, driving around multiple barricades, including marked law enforcement vehicles. James was wearing a backpack, a combat shirt, tactical gloves, boots, a paracord attachment, and an Oath Keepers hat and patches. He and others unlawfully entered the Capitol together through the East Rotunda doors. Inside the Rotunda, James assaulted a Metropolitan Police Department officer by grabbing the officer’s vest and pulling him towards the mob. While pulling the officer, James yelled, “Get out of my Capitol! This is not yours! This is my Capitol!” James was expelled by law enforcement, including at least one officer who aimed chemical spray at him.

On the evening of Jan. 6, 2021, James and others heard that law enforcement was searching for them and immediately departed the Washington, D.C. metropolitan area. Soon after, James traveled to Texas to join with the leader of the Oath Keepers and other co-conspirators. There, he helped co-conspirators amass thousands of dollars’ worth of firearms, ammunition and firearms equipment – some of which he later stored in storage sheds in Alabama – and prepared to distribute the equipment to others and to engage in violence in the event of a civil war.

James was arrested on March 9, 2021. He was among 11 defendants indicted on Jan. 12, 2022, in the District of Columbia on seditious conspiracy and other charges; the others have pleaded not guilty. James faces up to 20 years in prison for seditious conspiracy and up to 20 years for obstruction of an official proceeding, along with potential financial penalties. No sentencing date was set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Department of Justice National Security Division’s Counterterrorism Section. Valuable assistance was provided by the U.S. Attorney’s Office for the Northern District of Alabama.

The case is being investigated by the FBI’s Washington and Birmingham Field Offices.

In the 13 months since Jan. 6, more than 750 individuals have been arrested in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including over 235 individuals charged with assaulting or impeding law enforcement. The investigation remains ongoing.

Today, Attorney General Merrick B. Garland announced the launch of Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. Task Force KleptoCapture will ensure the full effect of these actions, which have been designed to isolate Russia from global markets and impose serious costs for this unjustified act of war, by targeting the crimes of Russian officials, government-aligned elites, and those who aid or conceal their unlawful conduct.

“The Justice Department will use all of its authorities to seize the assets of individuals and entities who violate these sanctions,” said Attorney General Merrick B. Garland. “We will leave no stone unturned in our efforts to investigate, arrest, and prosecute those whose criminal acts enable the Russian government to continue this unjust war. Let me be clear: if you violate our laws, we will hold you accountable.”

“To those bolstering the Russian regime through corruption and sanctions evasion: we will deprive you of safe haven and hold you accountable,” said Deputy Attorney General Lisa O. Monaco. “Oligarchs be warned: we will use every tool to freeze and seize your criminal proceeds.”

Task Force KleptoCapture will be run out of the Office of the Deputy Attorney General and staffed with prosecutors, agents, analysts, and professional staff across the Department who are experts in sanctions and export control enforcement, anticorruption, asset forfeiture, anti-money laundering, tax enforcement, national security investigations, and foreign evidence collection. It will leverage all the Department’s tools and authorities against efforts to evade or undermine the economic actions taken by the U.S. government in response to Russian military aggression. The mission of the Task Force will include:

• Investigating and prosecuting violations of new and future sanctions imposed in response to the Ukraine invasion, as well as sanctions imposed for prior instances of Russian aggression and corruption;
• Combating unlawful efforts to undermine restrictions taken against Russian financial institutions, including the prosecution of those who try to evade know-your-customer and anti-money laundering measures;
• Targeting efforts to use cryptocurrency to evade U.S. sanctions, launder proceeds of foreign corruption, or evade U.S. responses to Russian military aggression; and
• Using civil and criminal asset forfeiture authorities to seize assets belonging to sanctioned individuals or assets identified as the proceeds of unlawful conduct.

The Task Force will be fully empowered to use the most cutting-edge investigative techniques — including data analytics, cryptocurrency tracing, foreign intelligence sources, and information from financial regulators and private sector partners — to identify sanctions evasion and related criminal misconduct.

Arrests and prosecution will be sought when supported by the facts and the law. Even if defendants cannot be immediately detained, asset seizures and civil forfeitures of unlawful proceeds — including personal real estate, financial, and commercial assets — will be used to deny resources that enable Russian aggression. Where appropriate, information gathered through Task Force investigations will be shared with interagency and foreign partners to augment the identification of assets that are covered by the sanctions and new economic countermeasures.  

Task Force KleptoCapture will complement the work of the transatlantic task force announced by the President and leaders of the European Commission, France, Germany, Italy, the United Kingdom, and Canada on Feb. 26, which has a mission to identify and seize the assets of sanctioned individuals and companies around the world.

Task Force KleptoCapture will be led by a veteran corruption prosecutor assigned to the Deputy Attorney General’s Office from the U.S. Attorney’s Office for the Southern District of New York. This prosecutor has a long and successful track record of investigating Russian organized crime and recovering illicit assets. The Task Force leadership will include Deputy Directors from both the National Security and Criminal Divisions, and more than a dozen attorneys from these divisions, as well as the Tax Division, Civil Division, and U.S. Attorneys’ Offices across the country.

The Task Force will include agents and analysts from numerous law enforcement agencies, including the FBI; U.S. Marshals Service, U.S. Secret Service; Department of Homeland Security–Homeland Security Investigations; IRS–Criminal Investigation; and the U.S. Postal Inspection Service.

The Task Force is authorized to investigate and prosecute any criminal offense related to its mission, including conspiracy to defraud the United States by interfering in and obstructing lawful government functions; money laundering; false statements to a financial institution; bank fraud; and various tax offenses. The maximum penalty under several of these authorities is 20 years in prison.

Yesterday, Attorney General Merrick B. Garland, Deputy Attorney General Lisa O. Monaco and Associate Attorney General Vanita Gupta met virtually with members of FAMM and a number of individuals and their families who have been impacted by the federal criminal justice system. Department leadership had an opportunity to hear personal stories about how the new earned time credit rule and home confinement policies have changed lives.

The meeting focused on the positive real-world impact of the finalization of the First Step Act Time Credit Rule, and the recent memorandum by the Office of Legal Counsel (OLC) concerning home confinement, as well as the need for Congress to pass the EQUAL Act. The department has strongly urged Congress to pass the EQUAL ACT, which would reduce the disparity between crack cocaine and powder cocaine sentences from 18:1 to 1:1.

The Attorney General emphasized that meetings like these are “vitally important” to help department leadership understand how its “policies on paper affect people and their communities.”  

During her remarks, Deputy Attorney General Monaco spoke about the importance of implementing the First Step Act and the Time Credit Rule and praised the work of FAMM. She noted that “as of this month, thousands of people are returning to their communities having put in the work to do so.”  

In Associate Attorney General Gupta’s opening remarks, she reiterated the importance of hearing from individuals directly impacted by the criminal justice system and shared that the department provided written testimony to the Senate Judiciary Committee in support of the EQUAL Act in June 2021, saying, “the current sentencing differential between crack and powder cocaine is not based in evidence and yet has caused significant harm in particular to communities of color. It’s past time to correct this.”

A former Delaware doctor was sentenced today to 20 years in prison for unlawful drug distribution and maintaining a drug-involved premises.

Patrick Titus, 58, of Milford, was convicted by a federal jury in July 2021 of 13 counts of unlawfully distributing and dispensing controlled substances and one count of maintaining a drug-involved premises.

“This sentence is a reminder that the Department of Justice will hold accountable those doctors who are illegitimately prescribing opioids and fueling the country’s opioid crisis,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “Doctors who commit these unlawful acts exploit their roles as stewards of their patients’ care for their own profit.”

According to court documents and evidence presented at trial, Titus unlawfully distributed or dispensed a variety of powerful opioids – including fentanyl, morphine, methadone, OxyContin and oxycodone – outside the usual scope of professional practice and not for legitimate medical purposes. Titus operated an internal medicine practice where he frequently prescribed these dangerous controlled substances in high dosages, sometimes in combination with each other or in other dangerous combinations, mostly in exchange for cash. Evidence at trial showed he distributed over 1 million opioid pills. Although these Schedule II drugs are approved for pain management treatment, Titus provided no meaningful medical care and instead prescribed these controlled substances to patients he knew were suffering from substance use disorder and/or who demonstrated clear signs that the prescribed drugs were being abused, diverted or sold on the street.

“DEA-registered medical practitioners have an important role in our communities to treat patients compassionately and responsibly,” said DEA Administrator Anne Milgram. “Today’s sentencing makes clear that medical professionals who recklessly prescribe opioids and endanger the safety and health of patients will be held accountable. I applaud the outstanding investigative work conducted by DEA’s Wilmington Resident Office Tactical Diversion Squad and the Department of Justice’s prosecution of the case.”

“As we continue the fight against the opioid crisis, this case serves as an important reminder that health care professionals have a duty to prescribe medication responsibly to ensure the well-being of individuals under their care. Failing to do so can endanger patients and undermines critical, ongoing public health measures,” said Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG). “HHS-OIG will continue to work with our law enforcement partners to hold bad actors accountable.”

The DEA and HHS-OIG investigated the case.

Assistant Deputy Chiefs Aleza Remis and Justin Woodard and Trial Attorney Claire Sobczak of the Criminal Division’s Fraud Section prosecuted the case. Assistant U.S. Attorney Edmond Falgowski of the District of Delaware assisted with the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this Program, comprised of 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

A federal grand jury sitting in Atlanta, Georgia, returned a superseding indictment on Feb. 24 charging seven individuals with conspiracy to defraud the United States and other crimes arising out of their promotion of fraudulent tax shelters involving syndicated conservation easements dating back nearly two decades. One of the defendants, Herbert Lewis, was previously charged in an indictment returned on June 9, 2021.

According to the superseding indictment, Jack Fisher, an Atlanta certified public accountant (CPA); James Sinnott; Yekaterina Lopuhina, aka “Kate Joy;” Lewis, an Atlanta-area CPA; Victor Smith, an Atlanta-area CPA; Clayton Weibel, a licensed appraiser; and Walter D. Roberts II, aka “Terry Roberts,” a licensed appraiser, engaged in a conspiracy to design, market and sell false and fraudulent charitable contribution tax deductions to high-income clients. Fisher and Sinnott allegedly caused partnerships to donate conservation easements over land owned by the partnerships. In conjunction with those donations, Fisher and Sinnott allegedly used two hand-picked appraisers, Weibel and Roberts, to generate fraudulent and inflated appraisals of the conservation easements that frequently valued the easements at amounts at least 10 times higher than the price that was actually paid for the partnership — often within months of the appraisals. According to the superseding indictment, the partnerships then claimed a charitable contribution tax deduction in the inflated amount of the conservation easement, resulting in a fraudulent tax deduction flowing to the clients who purchased units in the partnership.

Fisher, Sinnott, Joy, Lewis, Smith and other co-conspirators allegedly promoted, marketed and sold partnership units for $25,000 and guaranteed at least a 4-to-1 tax deduction ratio to their clients, which meant that four units with a total cost of $100,000 would yield a $400,000 tax deduction. The marketing materials allegedly stated, for example, that depending on their personal tax rate, such a $400,000 deduction could result in the client receiving $170,000 back within months of purchasing their units for $100,000. Fisher, Sinnott and Joy allegedly provided Roberts and Weibel with spreadsheets containing information purportedly used to value the conservation easements necessary to deliver the tax deduction ratio promised to their clients.

The superseding indictment charges that the syndicated conservation easement transactions were abusive tax shelters lacking in economic substance or a business purpose. Despite Fisher, Sinnott and Joy allegedly attempting to disguise the transactions as real estate deals, the indictment alleges that the transactions were simply the illegal sale of inflated tax deductions. Additionally, Fisher, Sinnott, Joy, Lewis and Smith allegedly helped clients claim charitable contribution tax deductions after the close of the tax year by accepting late sales, generating backdated documents and preparing, and causing the preparation of, false and fraudulent tax returns and false documents, among other items. In total, the defendants allegedly sold over $1.3 billion in false and fraudulent tax deductions through this scheme.

All defendants are charged with conspiring to defraud the United States, for which they face a maximum sentence of five years in prison. In addition, Fisher, Sinnott, Joy, Roberts and Weibel are charged with one count of conspiracy to commit wire fraud, for which each faces a maximum sentence of 20 years in prison if convicted. Lewis and Smith are both charged with wire fraud, for which they each face a maximum sentence of 20 years in prison for each count. Fisher, Sinnott, Lewis, Smith, Roberts and Weibel are charged with aiding and assisting in the preparation of false returns related to the syndicated conservation easement tax shelters, for which they face a maximum sentence of three years in prison for each count. Fisher, Sinnott, Joy and Lewis are also charged with filing false personal tax returns, for which they each face a maximum sentence of three years in prison for each count. Finally, Fisher is charged with money laundering arising from his purchases of multiple luxury vehicles and domestic and foreign properties with the proceeds of unlawful activity. He faces a maximum sentence of 10 years in prison for each count. In addition to the statutory maximum periods of incarceration, each of the defendants also faces a period of supervised release, monetary penalties, restitution and forfeiture. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

“The Tax Division is continuing to prioritize prosecution of fraudulent tax shelters, which are designed to enable taxpayers to pay far less than their fair share,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Those who contemplate promoting fraudulent tax shelters involving syndicated conservation easements – and the accountants, appraisers and tax preparers who create and execute strategies to assist them – should know that the Tax Division and IRS will unravel even the most elaborate schemes.”

“This superseding indictment demonstrates IRS Criminal Investigation’s commitment to investigate and prosecute illegal tax shelters,” said Chief Jim Lee of IRS Criminal Investigation (IRS-CI). “IRS-CI special agents are focused on ending abusive syndicated conservation easements that allow perpetrators of these schemes to enrich themselves while their wealthy clients skirt their tax obligations.”

Acting Deputy Assistant Attorney General Goldberg of the Tax Division, U.S. Attorney Kurt R. Erskine for the Northern District of Georgia and IRS Criminal Investigation Chief Lee made the announcement, and they thanked U.S. Attorney Dena J. King for the Western District of North Carolina for her office’s assistance in investigating the case.

IRS-CI and the U.S. Postal Inspection Service are investigating the case.

Tax Division Trial Attorneys Brittney Campbell, Parker Tobin, Casey Smith and William Guappone, along with Assistant U.S. Attorney Christopher Huber, Deputy Chief of the Complex Frauds Section, of the Northern District of Georgia, are prosecuting the case.

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