Northern District of Ohio

CLEVELAND – Brian Patterson, 44, of Canton, Ohio, has been sentenced to 26 years in prison by U.S. District Judge J. Philip Calabrese after pleading guilty to multiple charges including sexual exploitation of children, receipt and distribution of visual depictions of real minors engaged in sexually explicit conduct, and possession of child sexual abuse materials (CSAM), also referred to as child pornography. He was also ordered to serve 10 years of supervised release after imprisonment and must register as a sex offender.

According to court documents, law enforcement officials discovered that Patterson possessed 766 images of CSAM that included 50 images of children under the age of 12. The remaining images were of a child known to law enforcement and who was unaware that she was being surreptitiously recorded by a hidden camera. 

This case was investigated by the FBI Cleveland Division and the Canton Safe Streets Task Force. Assistant U.S. Attorney Joseph P. Dangelo for the Northern District of Ohio prosecuted the case.

To report child exploitation, please visit cybertipline.org, or call 1-800-843-5678, 24 hours a day, 7 days a week.

CLEVELAND – United States Attorney Rebecca C. Lutzko has named two Assistant United States Attorneys (AUSAs) as District Election Officers for the U.S. Attorney’s Office (USAO) for the Northern District of Ohio.

AUSAs Megan R. Miller and Ava R. Dustin will lead the USAO’s efforts to implement the Justice Department’s nationwide Election Day Program for the upcoming Nov. 5, 2024, general elections.

These AUSAs will oversee the district’s handling of Election Day complaints in consultation with the Justice Department’s Civil Rights, Criminal, and National Security Divisions in Washington, D.C. The USAO for the Northern District of Ohio serves the 40 northern counties in the state. AUSA Miller covers the Northeastern counties of Ohio, while AUSA Dustin covers the Northwestern counties.

Federal law protects against election-related crimes such as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for voters’ rights, to ensure that voters can vote free from interference, including intimidation and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice. The Voting Rights Act also protects the right of voters to mark their own ballot or to be assisted by a person of their choice, for example, if a voter needs assistance because of a disability or inability to read or write in English.

“The right to vote is the cornerstone of American democracy. Every citizen must be able to vote without interference or discrimination, and to have that vote counted in a fair and free election. As it has for years, the Department of Justice will work tirelessly to protect the integrity of our nation’s election process,” said U.S. Attorney Lutzko for the Northern District of Ohio. “We encourage anyone who has specific information about voting-rights concerns, including access or intimidation-related issues, or specific information about fraudulent election activity, to please provide that information to the Department of Justice. Our goal is to ensure that those who wish to vote can freely exercise this right if they choose, and that those who seek to corrupt it are brought to justice.”

The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

AUSAs Miller and Dustin will be on duty in the Northern District of Ohio while the polls are open Tuesday, Nov. 5. AUSA Miller can be reached at 216-338-4479 and AUSA Dustin at 419-215-5444 to respond to complaints of voting rights concerns or fraudulent election activity. They will ensure that such complaints are directed to the appropriate authorities.

In addition, the FBI will have dedicated special agents, known as Election Crime Coordinators, available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The Election Crime Coordinator for the Cleveland Field Office can be reached at 216-522-1400. Tips also may be submitted online at tips.fbi.gov.

Complaints about possible violations of the federal voting rights laws may also be made directly to the Civil Rights Division in Washington at civilrights.justice.gov or by phone at 1-800-253-3931.

In the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities. Please note: State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency. 

YOUNGSTOWN, Ohio – An indictment was unsealed charging two Ohio men with the murder of an on-duty United States Postal Service (USPS) Letter Carrier in March of 2024.

According to the indictment, on March 2, 2024, Kaprise Sledge, 24, of Warren, Ohio, and Thomas Sledge, 44, of Youngstown, Ohio, used a firearm to kill the mail carrier during the course of his official employment with the USPS.   

Kaprise Sledge and Thomas Sledge are each charged with one count of murder of an officer and employee of the United States and one count of discharge of a firearm during a crime of violence.

If convicted, they face a penalty of mandatory life in prison for first-degree murder, and a penalty of 10 years, up to life imprisonment for discharge of a firearm during a crime of violence. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The United States Postal Inspection Service is investigating the case. The Warren Police Department, Trumbull County Action Group Drug Task Force, FBI Violent Crimes Task Force, and Trumbull County Emergency Management also assisted in this investigation.

Assistant U.S. Attorneys David Toepfer, Michelle Baeppler, and Brett Hammond, for the Northern District of Ohio 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.

To report mail theft or other crimes committed through, or towards, the United States Postal Service, call the USPIS at 1-877-876-2455 or visit https://www.uspis.gov/report. 

CLEVELAND – David Johnson, 37, of Euclid, has been sentenced to 37 years in prison by U.S. District Judge Dan Polster after pleading guilty to multiple charges of armed robbery at places of business. Additionally, Johnson pleaded guilty to being a felon in possession of a firearm due to his previous convictions for involuntary manslaughter and aggravated robbery.

According to court documents, between November 2019 and January 2020, Johnson entered several businesses in Northeast Ohio and threatened employees with a loaded firearm to commit the robberies. The affected business locations were:

• Sunoco gas station, Euclid, Nov. 27, 2019
• BP gas station, Parkman, Jan. 18, 2020
• Dollar General, Chardon, Jan. 18, 2020
• Gas Mart gas station, Euclid, Jan. 25, 2020

During the investigation, law enforcement officials located a stolen vehicle used in the robberies at Johnson’s residence. Clothing and a firearm observed in surveillance videos were recovered during a search warrant execution of his residence.

This case was investigated by the FBI, ATF, Lake County Sheriff’s Office, Geauga County Sheriff’s Office, Geauga County Prosecutor’s Office, Cuyahoga County Prosecutor’s Office, Euclid Police Department, Willoughby Police Department, and the Cleveland Division of Police.

This case was prosecuted by Assistant U.S. Attorneys Margaret Kane and Joseph Dangelo for the Northern District of Ohio.

An Ohio man was sentenced yesterday to three years in prison for possessing a green card he illegally obtained by concealing that he had been charged with a war crime in Croatia prior to immigrating to the United States.

According to court documents, Jugoslav Vidic, 56, of Parma Heights, in applying to become a lawful permanent resident of the United States, falsely stated that he had never been charged with breaking any law even though he knew he had been charged in Croatia with a war crime against the civilian population. Vidic also falsely stated that his only past military service was in the Yugoslav Army from 1988 to 1989, when, in fact, he fought with the Serb Army of Krajina and its predecessors during the civil war in the former Yugoslavia from 1991 to 1995. As a result of these materially false statements, Vidic was approved for lawful permanent resident status and received a green card.

“Jugoslav Vidic lied about war crimes charged against him in an attempt to escape his past and live in the United States unlawfully,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Thanks to the dedication of prosecutors, law enforcement, and our international partners, Vidic will serve prison time in the United States followed by his removal. His sentence demonstrates that human rights violators will not be allowed to hide from their crimes in the United States.”

“Vidic committed serious human rights violations and was convicted of war crimes in Croatia as a result. Yet, he lied to U.S. immigration officials about his conviction and participation in a violent military force to claim refugee status and obtain a green card — becoming a permanent legal resident of our country — when he was not eligible to do so,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio. “Those who run away from violent crimes they commit elsewhere in the world and then enter our country by brazenly lying about their past will be held to account, as yesterday’s sentence demonstrates. Vidic’s deceitful actions are detestable, and unfairly hurt people in need who legitimately seek refuge to flee real harms in their home countries.”

“Our communities here in Ohio and across the United States are not safe havens for war criminals to escape accountability in their home countries,” said Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI). “It is my hope that this sentencing provides some measure of solace to the victims’ families with the knowledge that despite the passage of time, the United States will seek justice.”

“Jugoslav Vidic intentionally circumvented the laws of the United States by lying on his green card application about his war crimes conviction in Croatia,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “This case should serve as a warning to others that the FBI will work with our law enforcement partners to identify and hold accountable those like Vidic who seek to violate U.S. law by fraud of any kind.”

“Jugoslav Vidic knowingly avoided the truth of his past to enjoy the freedoms and liberties of the United States for over two and a half decades,” said Special Agent in Charge Greg Nelsen of the FBI Cleveland Field Office. “Yesterday’s sentence underscores the work of the FBI and its local, state, federal, and international partners and sends a clear message that people in the United States who take part in war crimes, regardless of when or where they occurred, or by masking their involvement, will be identified, investigated, and prosecuted.”

Vidic admitted in his plea agreement that he was charged with a war crime in Croatia in 1994 and convicted in absentia in 1998. The Croatian court found that during an attack by ethnic Serb forces in Petrinja, Croatia, on Sept. 16, 1991, Vidic cut off the arm of civilian Stjepan Komes, who died afterward. Vidic further admitted that he knew about the Croatian charges when he immigrated to the United States as a refugee in 1999, applied to become a lawful permanent resident in 2000, and was interviewed by U.S. immigration officials and received his green card in 2005.

Vidic pleaded guilty to one count of possessing an alien registration receipt card knowing it had been procured through materially false statements. As part of the plea agreement, Vidic agreed to the entry of a judicial order of removal from the United States.

HSI and the FBI investigated the case with coordination provided by the Human Rights Violators and War Crimes Center, including the FBI’s International Human Rights Unit. The Justice Department thanks the Ministry of the Interior and Ministry of Justice and Public Administration of the Republic of Croatia, which were both instrumental in furthering the investigation.

Trial Attorney Patrick Jasperse of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Matthew W. Shepherd and Jerome J. Teresinski for the Northern District of Ohio prosecuted the case. The Justice Department’s Office of International Affairs also provided assistance.

Members of the public who have information about human rights violators or immigration fraud in the United States are urged to contact the FBI at 1-800-CALL-FBI (800-225-5324) or through the FBI online tip form, or HSI at 1-866-DHS-2-ICE or through the ICE online tip form. All are staffed around the clock, and tips may be provided anonymously.

CLEVELAND – An Ohio man was sentenced yesterday to three years in prison for possessing a green card he illegally obtained by concealing that he had been charged with a war crime in Croatia prior to immigrating to the United States.

According to court documents, Jugoslav Vidic, 56, of Parma Heights, in applying to become a lawful permanent resident of the United States, falsely stated that he had never been charged with breaking any law even though he knew he had been charged in Croatia with a war crime against the civilian population. Vidic also falsely stated that his only past military service was in the Yugoslav Army from 1988 to 1989, when, in fact, he fought with the Serb Army of Krajina and its predecessors during the civil war in the former Yugoslavia from 1991 to 1995. As a result of these materially false statements, Vidic was approved for lawful permanent resident status and received a green card.

“Jugoslav Vidic lied about war crimes charged against him in an attempt to escape his past and live in the United States unlawfully,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Thanks to the dedication of prosecutors, law enforcement, and our international partners, Vidic will serve prison time in the United States followed by his removal. His sentence demonstrates that human rights violators will not be allowed to hide from their crimes in the United States.”

“Vidic committed serious human rights violations and was convicted of war crimes in Croatia as a result. Yet, he lied to U.S. immigration officials about his conviction and participation in a violent military force to claim refugee status and obtain a green card — becoming a permanent legal resident of our country — when he was not eligible to do so,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio. “Those who run away from violent crimes they commit elsewhere in the world and then enter our country by brazenly lying about their past will be held to account, as yesterday’s sentence demonstrates. Vidic’s deceitful actions are detestable, and unfairly hurt people in need who legitimately seek refuge to flee real harms in their home countries.”

“Our communities here in Ohio and across the U.S. are not safe havens for war criminals to escape accountability in their home countries,” said Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI). “It is my hope that this sentencing provides some measure of solace to the victims’ families with the knowledge that despite the passage of time, the U.S. will seek justice.”

“Jugoslav Vidic intentionally circumvented the laws of the United States by lying on his green card application about his war crimes conviction in Croatia,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “This case should serve as a warning to others that the FBI will work with our law enforcement partners to identify and hold accountable those like Vidic who seek to violate U.S. law by fraud of any kind.”

“Jugoslav Vidic knowingly avoided the truth of his past to enjoy the freedoms and liberties of the United States for over two and a half decades,” said FBI Cleveland Special Agent in Charge Greg Nelsen. “Yesterday’s sentence underscores the work of the FBI and its local, state, federal, and international partners and sends a clear message that people in the United States who take part in war crimes, regardless of when or where they occurred, or by masking their involvement, will be identified, investigated, and prosecuted.”

Vidic admitted in his plea agreement that he was charged with a war crime in Croatia in 1994 and convicted in absentia in 1998. The Croatian court found that during an attack by ethnic Serb forces in Petrinja, Croatia, on Sept. 16, 1991, Vidic cut off the arm of civilian Stjepan Komes, who died afterward. Vidic further admitted that he knew about the Croatian charges when he immigrated to the United States as a refugee in 1999, applied to become a lawful permanent resident in 2000, and was interviewed by U.S. immigration officials and received his green card in 2005.

Vidic pleaded guilty to one count of possessing an alien registration receipt card knowing it had been procured through materially false statements. As part of the plea agreement, Vidic agreed to the entry of a judicial order of removal from the United States.

HSI and the FBI investigated the case with coordination provided by the Human Rights Violators and War Crimes Center, including the FBI’s International Human Rights Unit. The Justice Department thanks the Ministry of the Interior and the Ministry of Justice and Public Administration of the Republic of Croatia, which were both instrumental in furthering the investigation.

Trial Attorney Patrick Jasperse of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Matthew W. Shepherd and Jerome J. Teresinski for the Northern District of Ohio prosecuted the case. The Justice Department’s Office of International Affairs also provided assistance.

Members of the public who have information about human rights violators or immigration fraud in the United States are urged to contact the FBI at 1-800-CALL-FBI (800-225-5324) or through the FBI online tip form, or HSI at 1-866-DHS-2-ICE or through the ICE online tip form. All are staffed around the clock, and tips may be provided anonymously.

The Justice Department announced today that it will monitor compliance with federal voting rights laws in Portage County, Ohio, during the early voting period and on Election Day.

The Justice Department enforces the federal voting rights laws that protect the rights of all citizens to access the ballot. The department regularly deploys its staff to monitor for compliance with federal civil rights laws in elections in communities all across the country. In addition, the department also deploys federal observers from the Office of Personnel Management, where authorized by federal court order.

Voters in Portage County have raised concerns about intimidation resulting from the surveillance and the collection of personal information regarding voters, as well as threats concerning the electoral process. Attempted or actual intimidation, threats or coercion directed toward any person for voting and related activities or urging or aiding others in voting is prohibited by Section 11(b) of the Voting Rights Act of 1965. 

The Civil Rights Division’s Voting Section, working with U.S. Attorneys’ Offices, enforces the civil provisions of federal statutes that protect the right to vote, including the Voting Rights Act, National Voter Registration Act, Help America Vote Act, Civil Rights Acts and Uniformed and Overseas Citizens Absentee Voting Act.

Reports related to voter intimidation in Portage County and complaints about any other possible violations of federal voting rights laws can be submitted through the Civil Rights Division’s internet reporting portal at www.civilrights.justice.gov or by telephone at 1-800-253-3931. More information about voting and elections, including guidance documents and other resources, is available at www.justice.gov/voting. Learn more about the Voting Rights Act and other federal voting laws at www.justice.gov/crt/voting-section.

CLEVELAND - The United States filed a civil complaint in forfeiture against a total of 200,000 Tether (“USDT”) cryptocurrency, valued at approximately $200,000.  In February 2024, bitcoin valued at approximately $340,000 was fraudulently transferred from the virtual currency wallet of an Ashtabula, Ohio, victim to a cryptocurrency address unknown to the victim.  The victim did not initiate or authorize the transaction.

Many virtual currencies publicly record all of their transactions on what is known as a “blockchain.”  The blockchain is essentially a distributed public ledger, run by the decentralized network of computers, containing an immutable and historical record of every transaction utilizing that blockchain’s technology. The blockchain records every virtual currency address that has ever received virtual currency and maintains records of every transaction and all the known balances for each virtual currency address.

Through several steps of “blockchain analysis,” investigators were able to trace approximately $200,000 of the funds that were fraudulently transferred out of the victim’s virtual currency wallet to two cryptocurrency addresses on the Ethereum blockchain.  As part of this analysis, it was determined that the fraudulently transferred bitcoin had been converted by the fraudsters to USDT cryptocurrency.  USDT is a “stablecoin,” a type of blockchain-based currency that is tied - or tethered - to a fiat currency and exists on several third-party blockchains, including Ethereum.  Tether seeks to peg USDT to the U.S. Dollar at a 1:1 ratio.

In March, 2024, the USDT tokens - valued at approximately $200,000 - at the two cryptocurrency addresses were frozen by Tether Limited Inc.  Thereafter, pursuant to a federal seizure warrant issued on July 31, 2024, 200,000 USDT tokens were transferred by Tether Limited to a U.S. law enforcement-controlled virtual currency wallet.

By the Complaint in Forfeiture filed on October 3, 2024, the United States seeks to forfeit the subject 200,000 USDT cryptocurrency.  If successful, the United States would then seek to return the forfeited funds to the Ashtabula, Ohio, victim.  It is specifically noted that the claims made in the Complaint in Forfeiture are allegations that the United States will need to prove by a preponderance of the evidence should the case proceed to trial.

The Federal Bureau of Investigation (FBI), Cleveland Field Office, is actively investigating cryptocurrency fraud schemes perpetrated on victims throughout the United States, including in the Northern District of Ohio.

This case is being handled by Assistant U.S. Attorneys James L. Morford and Daniel J. Riedl.  

View Complaint in Forfeiture

TOLEDO, Ohio - Sir Maejor Page, 35, of Toledo, has been sentenced to 42 months in prison by U.S. District Judge Jeffrey Helmick after a jury convicted him of wire fraud and money laundering for defrauding donors of more than $450,000 that they collectively gave to his nonprofit “Black Lives Matter of Greater Atlanta” (BLM of Greater Atlanta) based on Page’s false representations. He was also ordered to pay a $400 special assessment fee.

Page continued to collect donations to his purported social justice charity through the organization’s Facebook page even after its tax-exempt status was revoked for failure to submit IRS Form 990 for three consecutive years.  He regularly posted content to Facebook about social and racial issues to give his nonprofit the appearance of legitimacy, despite no longer being tax-exempt. He also used Facebook to message privately with users, and he falsely represented that their donations would be used to “fight for George Floyd” and the “movement.” As a result, approximately 18,000 people donated to the BLM of Greater Atlanta charity through its Facebook account, which Page administered.

Page used the donations to BLM for his own personal benefit. He purchased entertainment, hotel rooms, clothing, firearms, and a property that he intended to use as his personal residence. He attempted to conceal the purchase of the property by using the name “Hi Frequency Ohio” and asked the seller to sign a nondisclosure agreement that would have prevented the seller from listing Page as the actual buyer.

“Mr. Page took advantage of a cause meant to fight social injustices, using it instead to line his own pockets with thousands of dollars of donations,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “People donate their hard-earned money to support causes they believe in, and when a fraudster like Page comes along and tries to get away with a fake charity scheme, it hurts legitimate nonprofit organizations that rely on the generosity of others to advance their missions and make positive change in the world. This Office will hold accountable those who try to profit by scamming unsuspecting people out of their money like Page did here.”

"The FBI will aggressively investigate individuals, like Sir Maejor Page, who engage in fraudulent charity schemes at the expense of the American public,” said FBI Cleveland Special Agent in Charge Greg Nelsen.  “Page is a calculating criminal who willingly conspired to steal hundreds of thousands of dollars through the trusting public. Today’s sentence holds him accountable and demonstrates that the FBI will steadfastly pursue perpetrators who target American citizens.”

This case was investigated by the FBI Cleveland Division and prosecuted by Assistant U.S. Attorneys Gene Crawford and Rob Melching.

CLEVELAND – A jury convicted two men for conspiring to artificially inflate prices on a low-value stock being sold to investors. After a trial that proceeded in two stages for over four weeks, Paul Spivak, 65, of Willoughby Hills, Ohio, and Charles Scott, 70, of Alexandria, Virginia, were found guilty of conspiracy to commit securities fraud. Spivak was also found guilty on two counts of wire fraud in the first stage of trial, and he then pled guilty to four other counts of wire fraud, two counts of securities fraud, and a separate count of conspiracy to commit securities fraud. Scott was then found guilty of a securities fraud conspiracy and one count of securities fraud in the second stage of trial.

According to court documents, trial testimony, and exhibits, Spivak was the majority owner and chief executive officer of U.S. Lighting Group, Inc. (USLG), a publicly traded Florida corporation based in Euclid, Ohio, that focused on the design and manufacture of commercial LED lights, aftermarket auto parts, and fiberglass recreational campers and boats. The company traded on OTC Markets under the ticker USLG and was considered a “penny” stock due to its lower market value. Penny stocks are more vulnerable to price manipulation because they draw less scrutiny and have lower trading volume than other stocks.

Between 2016 and 2019, Spivak and his co-conspirators manipulated USLG’s stock price to their financial benefit. He and his co-conspirators arranged to take USLG public through a reverse merger with a shell company. They sought to artificially inflate or “pump” up the price of USLG stock using call rooms and other manipulative practices. One co-conspirator who helped to take USLG public and inflate the stock price was Richard Mallion, who was previously convicted of securities fraud and banned for life from participating in the securities industry. Numerous investors throughout the country were pressured to purchase USLG stock while Mallion and other co-conspirators covertly arranged for sell orders to match with the buy orders that the call rooms generated.

While the stock price was artificially inflated, Spivak arranged for co-conspirators to act as unlicensed stockbrokers, cold-calling investors to sell them restricted shares of USLG stock. The brokers used aliases and represented the stock as offered at a steep discount relative to the apparent market price. Spivak arranged to pay those brokers large, undisclosed commissions, while concealing the true nature of USLG’s payments to those brokers by entering into fraudulent consulting agreements with them and requiring them to submit invoices that falsely described commission payments as payments for other services. 

Between 2016 and 2019, USLG took in approximately $6.9 million from numerous restricted stock investors—many of them elderly and located throughout the country—in increments between $4,000 and $1 million. During that time, the company made approximately 200 payments totaling $2 million in undisclosed commissions to those unlicensed stockbrokers.

From February through June of 2021, Spivak and Scott engaged with undercover agents and a confidential source, who together posed as co-conspirators arranging to artificially inflate or “pump” up the price of USLG. Spivak arranged for them to receive stock, to be sold at inflated prices, from Scott and another co-conspirator, who had also agreed to kick back proceeds to USLG.

Spivak and Scott arranged for Scott to sell free-trading USLG stock to undercover agents and to send approximately half of the proceeds of those sales back to USLG in exchange for additional restricted stock. Undercover agents, in turn, would sell USLG stock at inflated prices, and then use some of the profits to buy more free-trading shares from Scott, who would then kick back additional money to USLG to buy more restricted stock.

Six of the defendants’ co-conspirators previously pled guilty to conspiracy to commit securities fraud and other charges in this matter. Those co-conspirators included Mallion, Spivak’s wife, Olga Smirnova, and a number of the unlicensed stockbrokers. A seventh co-conspirator, Robert Louis Carver, also admitted to participating in this scheme as an unlicensed stockbroker using a stolen identity, all while he was a fugitive in a long-pending securities fraud matter in the U.S. District Court for the Central District of California (Case No. 8:11-CR-62).

“These men orchestrated an aggressive, fraudulent scheme to benefit their company, enrich themselves, and to add to their personal coffers at the expense of others. They not only withheld information, but also purposely engaged a team of affiliates that devised tactics to make it appear that USLG shares were a valuable and valid investment to people who thought they were investing in good faith,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “We will not tolerate those who think they can outsmart and manipulate the system through fraud and misrepresentation. This verdict helps protect our citizens and our business communities from these predatory methods and serves as a warning to others who are tempted to break federal securities laws because of greed.”

On April 21, 2025, Spivak was sentenced to 17 years and five months in prison and ordered to pay a $200,000 fine by U.S. District Judge J. Philip Calabrese. Spivak was also ordered to serve three years of supervised release after imprisonment. Restitution is to be determined.

On Feb. 12, 2025, Scott was sentenced to 42 months in prison and ordered to pay a $500,000 fine by U.S. District Judge J. Philip Calabrese. Scott was also ordered to serve two years of supervised release after imprisonment. 

The case was investigated by the FBI Cleveland Division. This case was prosecuted by Assistant U.S. Attorneys Elliot Morrison, Megan Miller, and Stephanie Wojtasik for the Northern District of Ohio. 

Report investment, financial, and related violations at https://www.sec.gov/submit-tip-or-complaint.

Note: This page was updated Jan. 10, 2025, to reflect the rescheduled sentencing date for Spivak.

Note: This page was updated Jan. 16, 2025, to reflect the rescheduled sentencing date for Scott.

Note: This page was updated Feb. 12, 2025, with sentencing information for Scott.

Note: This page was updated April 22, 2025,with sentencing information for Spivak.

TOLEDO, Ohio – Amanda Hovanec, 37, of Wapakoneta, Ohio, has been sentenced to 40 years in prison by U.S. District Judge James R. Knepp, II, after pleading guilty to multiple charges, including distributing a controlled substance that resulted in the death of her husband. Amanda Hovanec was also ordered to serve 10 years of supervised release and ordered to pay restitution in the amount of $2,108,559.36.

According to court documents, Hovanec and her husband, Timothy, were married and had three children.  They moved several times for his job with the U.S. Department of State, which included an assignment in South Africa around 2018. While there, Hovanec developed a relationship with a South African citizen named Anthony Theodorou. Hovanec initiated divorce proceedings against her husband in 2020 after returning to the United States. In December 2021, she began to deny her husband visitation with their children despite a court order to permit it. After her husband filed several contempt motions against Hovanec for denying visitation, a judge ordered that the children be given visitation with their father in April 2022, and further ordered that the husband become the residential parent and legal custodian of their children for two months that summer, beginning in May.

The children went with their father for an April weekend visitation, as ordered, after which their father returned them to Hovanec’s Wapakoneta residence. Later, a missing persons investigation was opened when the husband failed to check out of an area hotel where he had been staying.

During the investigation, law enforcement officials discovered the husband’s abandoned car in Dayton, Ohio. It had been equipped with a dash camera.  Review of the camera’s video showed that the husband had returned the children to Hovanec’s residence around 7 p.m. on April 24, 2022. Video footage showed Hovanec and her mother, Anita Green, waiting outside the residence next to the garage. Hovanec was then seen walking toward the driver’s side of the vehicle and heard telling the children, “I have a surprise for you inside.” The children entered the residence, followed by Green. Seconds later, the victim was heard saying, “What the heck are you doing?  Did you just assault me?” and then, “Get away from me  . . .  Get off of me.”  The victim and Hovanec came into the camera’s view, at which time video footage captured her pulling on her husband’s shirt as he tried to use his cellphone. She wrestled with him and eventually knocked the phone out of his hand. She then pulled on his back to bring him to the ground, holding him around the neck until his body went limp and he became unresponsive, lying on the driveway. Hovanec stood up, picked up her husband’s cellphone, removed his smart watch, and turned off his vehicle’s engine, at which point the dash camera stopped recording.

After first attempting to cover up her crimes, Hovanec later confessed to investigators that she injected her husband in the shoulder with “poison” that she understood would kill him within minutes. She also admitted to disposing of his car in Dayton, and burying his body in a wooded area not far from her home. Theodorou was in Ohio at the time of the incident.  He not only obtained the substance used to kill the victim, but also helped Hovanec bury her husband’s body. Green, who both Hovanec and Theodorou confirmed knew about the plan to murder the victim in advance, was charged as an accessory after the fact. She agreed to drive them and the victim’s body to the grave site, which was dug in advance of the murder.

The investigation determined that the victim was injected with M-99, also known as Etorphine, a Schedule I controlled substance approximately 1000 times more potent than morphine. It is used in veterinary medicine for zoo and wildlife anesthesia.  

According to court records, Hovanec considered killing her husband for at least a year before the murder and had considered alternate means to do so, including hiring a hitman, before settling on injecting him with M-99.

“Hovanec’s violent and intentional actions were cold-blooded, calculated, and cruel. Her extreme malevolence toward her husband and complete disregard for how his murder would affect their innocent children is incomprehensible and unforgiveable,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio. “We know that no amount of time served can bring back a family’s loved one. But our hope is that the victim’s family may find some sense of closure as they painstakingly work to heal from this unimaginable and horrific tragedy.”

Theodorou was sentenced to 18 years in prison and three years of supervised release after pleading guilty to conspiracy to import, importation and distribution of a controlled substance that resulted in death. He was also ordered to pay $2,108,559.36 in restitution, of which a part will be paid jointly and severally with Hovanec and Green. Anita Green was sentenced to 10 years in prison and two years of supervised release after pleading guilty to being an accessory to the crimes committed by Amanda Hovanec and Anthony Theodorou. 

This case was investigated by the FBI Cleveland Division, Lima Resident Agency, the Auglaize County Sheriff’s Office, the Ohio Bureau of Criminal Investigation (BCI), and the Lucas County Coroner’s Office.

The case was prosecuted by Assistant U.S. Attorneys Alissa Sterling and Michelle Baeppler for the Northern District of Ohio.

WASHINGTON — The Justice Department and the Environmental Protection Agency (EPA) today announced a settlement with the Lima Refining Company (LRC), a wholly-owned subsidiary of Canadian-based Cenovus Energy, to address violations of the Clean Air Act at its refinery in Lima, Ohio.

Under the settlement, LRC must pay a civil penalty of $19 million and implement an estimated $150 million in capital investments, including control technology expected to reduce emissions of benzene by an estimated 4.34 tons per year, other hazardous air pollutants (HAP) by 16.26 tons per year, and other volatile organic compound emissions (VOC) by 219 tons per year. The Lima Refinery is surrounded by a community with environmental justice concerns.

“This settlement is part of an ongoing initiative to curtail illegal benzene and VOC emissions at refineries that have failed to allocate the necessary personnel and capital investments to ensure compliance with rules they have long been subject to,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Under the settlement, the refinery will implement controls that will greatly improve air quality and reduce health impacts on the overburdened community that surrounds the refinery.”

“Lima Refining unlawfully exposed the surrounding community to toxic benzene emissions and other hazardous pollutants,” said Assistant Administrator David Uhlmann of the EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement demonstrates how monitoring can help protect overburdened communities from harmful emissions from refineries. Lima will pay a substantial penalty for its violations and install $150 million in emissions controls that will provide cleaner air to a community that deserves nothing less.” *

“Environmental justice is a core priority of our Office and of the Department. Through its illegal emissions of benzene, VOCs and other pollutants from its facility, the LRC impermissibly violated the Clean Air Act and jeopardized the health of Ohio’s residents,” said U.S Attorney Rebecca C. Lutzko for the Northern District of Ohio. “We will continue to be vigilant and strictly enforce environmental laws and regulations to protect our district’s residents from toxic pollutants. Ohioans should not have to worry about living and working in an area where air pollution from local industry could make them sick.”

As part of the settlement, LRC will install one or more flash columns to reduce benzene in wastewater streams leading to its wastewater treatment plant and will cease operating, replace or upgrade other units at the refinery. LRC will also install six air pollutant monitoring stations to monitor air quality outside of the refinery fence line and make the results publicly available.

The United States’ complaint, filed simultaneously with the settlement, alleges that LRC violated federal regulations limiting benzene in refinery wastewater streams, and HAP and VOC emissions at its Lima Refinery, as well as the general requirement to use good air pollution control practices.

Benzene is known to cause cancer in humans. Short-term inhalation exposure to benzene also may cause drowsiness, dizziness, headaches, as well as eye, skin and respiratory tract irritation, and, at high levels, unconsciousness. Long-term inhalation exposure can cause various disorders in the blood, including reduced numbers of red blood cells and anemia in occupational settings. Reproductive effects have been reported for women exposed by inhalation to high levels, and adverse effects on the developing fetus have been observed in animal tests.

VOCs, along with nitrous oxide, play a major role in the atmospheric reactions that produce ozone, which is the primary constituent of smog. Ground-level ozone exposure is linked to a variety of short- and long-term health problems, including difficulty breathing, aggravated asthma, reduced lung capacity and increased susceptibility to respiratory illnesses like pneumonia and bronchitis.

This settlement is part of EPA’s and the Justice Department’s ongoing focus to assist communities that have been historically marginalized and disproportionately exposed to pollution.

For more information about the settlement, please visit www.epa.gov/enforcement/2024-lima-refining-clean-air-act-benzene-waste-neshap-and-volatile-organic-compounds.

The proposed consent decree, lodged in the U.S. District Court for the Northern District of Ohio, is subject to a public comment period and final court approval. Information on submitting comment and access to the settlement agreement is available at: www.justice.gov/enrd/consent-decrees.

The EPA investigated the case.

Attorneys with the Environment and Natural Resources Division's Environmental Enforcement Section are handling the case.

*Editor's note: this quote has been updated for accuracy to remove "fence line," “the oil and gas sector” and “healthier water.”

CLEVELAND – To help keep children, teens, and communities safe, the U.S. Attorney’s Office (USAO) for the Northern District of Ohio has launched an awareness and education initiative to inform the public about the importance of securing firearms and storing them safely. As part of this initiative, the USAO is partnering with the City of Lakewood to present an information session, “Safe Gun Storage Saves Lives,” Thursday, Oct. 3, from 6:30 - 8 p.m., at the Cove Community Center, 12525 Lake Avenue, Lakewood, OH 44107.

The City of Lakewood will host the program, but residents of all communities are invited to attend. Topics include data and trends regarding firearms-related accidents and self-imposed harm, focusing on children and teens in particular; the connection between these tragedies and unsafe firearms-storage practices; the effects that such tragedies have on both individual families and the broader public; a gun lock demonstration and distribution; and steps to help prevent firearms-related tragedies by following and encouraging safe firearms-storage practices.

The program features several speakers: U.S. Attorney Rebecca Lutzko for the Northern District of Ohio; firearms safety advocate and YMCA of Greater Cleveland Behavioral Health Manager Marlon Johnson, LPCC; MetroHealth Injury Prevention and Outreach Coordinator Anthony Zalewski, RN; Lakewood Police Chief Kevin Fischer; and Lakewood Mayor Meghan George.

As part of the program, local police officers will distribute free gun locks; attendees will not need to provide any personal information to receive one. Officers will also exhibit other types of safe storage devices, demonstrate how to use them, and individually discuss safe storage options with attendees.

“When you make the choice to own a firearm, you owe it to your neighbors to do so responsibly.  As a whole, our community must do a better job to ensure that we store firearms in a safe manner, where a curious child or a despondent adolescent cannot readily access them. In April, a three-year-old child in Brunswick died from a gunshot wound after he found a gun in his own home, and accidentally discharged it while playing with it. Just a month later, in May, a two-year-old toddler in Euclid similarly died when he accidentally shot himself after he found a firearm in his home.  More recently, a five-year-old boy in Utah died after—once again—finding his parent’s gun and accidentally shooting himself.  Every one of these tragedies could have been prevented,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio.  “Instead, these children—and the thousands of people of all ages who use firearms to take their own lives each year—are gone, and their families’ lives are irrevocably changed.  In launching this initiative, our goal is to protect children, at-risk teens, and young adults from grave danger in homes where firearms are present.  Our kids’ safety is everyone’s joint responsibility.”

The USAO’s Safe Storage campaign’s message kicked off in September with a similar program held in Richmond Heights. September is National Suicide Prevention Month, recognized annually by the National Institute of Mental Health. The number of firearm-related suicides rose nationally by 20% across the population from 2012 to 2022. The highest increases were found among younger people, according to fatal injury data from the Centers for Disease Control (CDC).

The risk of accidents also increases when firearms are easy to find and access. From 2003 to 2021, 85% of children fatally injured were located at a house or apartment, and 56% of incidents occurred in their own homes, according to the CDC report “Unintentional Firearm Injury Deaths Among Children and Adolescents Aged 0-17 Years.” More than 70% of firearms used were stored loaded, and nearly 80% of firearms were stored unlocked and easily found on a bed, under a pillow, under a mattress, or inside or on top of a nightstand, according to the report.

“We’re calling on our community partners and the public to help us spread awareness of these largely preventable accidents and instances of self-harm,” said U.S. Attorney Lutzko. “Much like seatbelt education helps to save lives of those involved in car accidents, spreading the word about safe storage will save lives—many times, the lives of our children and teens who we have a special duty to protect.  Our goal is to amplify the message of responsible firearm ownership through this community-centered, public-safety strategy.”

The USAO has posted on its website a host of free community resources discussing safe storage practices and providing tools for community members to spread the word about safe storage practices and help encourage them. Among the items included are bulletin board flyers, adult and child’s safety pledge certificates, and owners’ firearms safety manuals. Visit justice.gov/usao-ndoh/safe-gun-storage to view them. The public is also encouraged to follow the USAO on Facebook (@usaondoh) and X (@NDOHnews) to reshare safe gun storage tips and information.

Additional safe storage community programs are slated to be announced.

CLEVELAND - An indictment was unsealed charging two Ohio men with a bribery scheme in which a municipal prosecutor agreed to help a criminal defendant with his pending cases in exchange for auto repair work.

According to the indictment, Nicholas Graham, 52, of Warren, was a prosecutor who represented the City of Warren in Warren Municipal Court. Brian Votino, 52, of Niles, had two criminal cases pending in the same court. The indictment alleges that in October 2019, Graham and Votino agreed that Graham would take action to benefit Votino with respect to Votino’s criminal cases in return for Votino performing repairs to Graham’s truck. To cover up the bribery arrangement, Graham instructed Votino through an intermediary to falsify a bill for the repair services and not to tell Votino’s criminal defense lawyer. According to the indictment, Graham and Votino ultimately carried out their agreement. In exchange for the repair work by Votino, Graham took official action to reduce the charges against Votino and advocated for a lenient sentence.

Graham and Votino are charged with one count of conspiracy, one count of honest services wire fraud, and one count of Hobbs Act extortion. If convicted, they each face a maximum penalty of 45 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio; and Special Agent in Charge Gregory D. Nelsen of the FBI Cleveland Division made the announcement.

The FBI Cleveland Division is investigating the case.

Trial Attorney Blake J. Ellison of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Elliot Morrison for the Northern District of Ohio 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.

Case update Nov. 20, 2025:

Both defendants pleaded guilty to the conspiracy charge in summer 2025. Judge Solomon Oliver Jr. imposed the following sentences:

• Nov. 19, 2025 – Graham was sentenced to 3 years of probation with the first 5 months to be served on home detention with electronic monitoring. He was also ordered to complete 120 hours of community service. Graham pleaded guilty on August 13,  2025.
• Nov. 14, 2025 – Votino was sentenced to 3 years of probation with the first 60 days to be served on home detention with electronic monitoring. He was also ordered to complete 160 hours of community service. Votino pleaded guilty on July 16,  2025.

TOLEDO, Ohio - Federal, state, and local law enforcement officials announced the unsealing of a superseding indictment that charged 20 members of a Drug Trafficking Operation (DTO) operating in Sandusky, Ohio. The Sandusky DTO is alleged to be responsible for trafficking distribution quantities of controlled substances in the Greater Sandusky area, including fentanyl and fentanyl analogues in both powder and counterfeit pill form, as well as methamphetamine and cocaine.

The investigation that led to the indictment took place earlier this spring and summer. Individuals were apprehended in a series of coordinated arrests, and agents have seized large quantities of fentanyl, fentanyl analogues, cocaine, and methamphetamine, including thousands of fentanyl pills masquerading as legitimate prescription medication.  Agents also seized cash proceeds and numerous illegally possessed firearms during the investigation. This announcement was made by United States Attorney Rebecca C. Lutzko for the Northern District of Ohio, DEA Special Agent in Charge Orville Greene, and Sandusky Police Chief Jared Oliver.

“The indictment alleges a coordinated effort by the members of this Drug Trafficking Operation to fuel and profit from the region’s drug trade, and the widespread opioid and other drug addictions that accompany it,” said United States Attorney Rebecca C. Lutzko. “These charges and arrests will significantly reduce in the Greater Sandusky area the distribution of these poisons, which are crippling our communities. We applaud our federal, state, and local law enforcement partners who have worked tirelessly to bring this criminal organization’s operations to a halt. Sandusky’s streets are safer today as a result.”

The following defendants were charged in the 63-count superseding indictment:

Danny Lee Johnson, aka, Uncle Danny, 39, Elyria, Ohio

Shon Alexander, aka Lil Man, 33, Sandusky, Ohio

Mark Milten Castile, aka Castile Jr., aka Little Mark, 27, Sandusky, Ohio

Mark Milton Castile, aka Castile Sr., aka MC, 50, Sandusky, Ohio

Markier Castile, 22, Sandusky, Ohio

Johnny Diego Desounyez Cherry, 41, Sandusky

Marquez Clinton, aka, Quez, 38, Sandusky, Ohio

Alycia Cross, 33, Sandusky, Ohio

Anrico Cunningham, aka, Suave, 40, Sandusky, Ohio

Marvin Cunningham, aka Marv, 62, Sandusky, Ohio

Brian Giving, aka, Hurt, 43, Sandusky, Ohio

Brent Hanson, 25, Sandusky, Ohio

Brent Hanson, 25, Sandusky, Ohio

Salei Harris, aka Bernard, 38, Sandusky, Ohio

Eric Irby, 30, Sandusky, Ohio

Bryonia Myers, 35, Sandusky, Ohio,

Tremar Pearson, 24, Sandusky, Ohio

Jarvis Pool, aka Shorty J, 42, Sandusky, Ohio

Kendrick Scott, aka Cheese, 51, Sandusky, Ohio

Dashour Smith, 28, Sandusky, Ohio

Dean Swain, aka Dino, 42, Sandusky, Ohio

The superseding indictment alleges that from about April 2023 to August 2024, the defendants did unlawfully, knowingly, and intentionally combine, conspire, confederate, and agree with each other to distribute, and possess with intent to distribute, mixtures and substances containing detectable amounts of cocaine, cocaine base (crack), fentanyl, and methamphetamine, all Schedule II controlled substances, and fentanyl analogues, a Schedule I controlled substance.

According to court documents, Johnson, an Elyria based cocaine source of supply, arranged delivery of bulk cocaine to purchasers in Sandusky, using a network of associates and stash houses to store, break-down, package and redistribute narcotics and profits resulting from the illegal drug trafficking. Some associates would receive bulk cocaine and fentanyl pills stamped to appear as prescription Oxycodone pills and repackage to distribute. Others transported, or assisted in transporting cocaine, drug proceeds, and firearms. Several associates conducted their operations out of the Chill Palace, a bar in Sandusky, where they distributed fentanyl, methamphetamine, cocaine, crack cocaine, and other related drugs to customers throughout the region. Other associates received bulk methamphetamine sent through the mail, and one maintained an unlicensed gambling house at a residence in Sandusky, which was used as a distribution center.

“This was a highly organized, poly-drug distribution organization, supplying our communities with bulk quantities of controlled substances including fentanyl in both powder and counterfeit pill form. These quantities had the potential to kill hundreds of thousands of people. Today’s enforcement action demonstrates the strength of our partnerships and our commitment to keeping our communities safe” said DEA Special Agent in Charge Orville Greene.

“The Sandusky Police Department is proud to have such a great partnership with both the DEA and Ohio BCI. It is because of these partnerships that this investigation resulted in the arrests of several individuals and the seizure of substantial amounts of fentanyl, fentanyl pills, methamphetamine, and cocaine. I echo US Attorney Lutzko’s statement, our community is safer today because of the tireless efforts of our Detectives, the BCI Agents and the DEA in dismantling this drug trafficking operation,” said Sandusky Police Chief Jarod Oliver.

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

If convicted, each defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and, in most cases, it will be less than the maximum.

The investigation preceding the superseding indictment was conducted by the DEA, Sandusky Police Department, and the Ohio Bureau of Criminal Investigation and Identification (BCI).

This case is being prosecuted by Assistant U.S. Attorneys Robert Melching and Frank Spryszak for the Northern District of Ohio.

CLEVELAND - Tanya Alahmad, 46, of Cleveland, Ohio, was sentenced by U.S. Judge David A. Ruiz to 30 months of imprisonment and ordered to pay $46,064.30 in restitution. Alahmad pleaded guilty in March 2024 to one count of mail fraud and one count of aggravated identity theft for forging a power of attorney to steal more than $46,000 from an elderly victim.

According to court documents, from November 2019, through February 2022, Alahmad befriended the victim and stayed at their residence a few days week. Alahmad assisted the victim by cleaning the house and running errands. Alahmad also created a fraudulent Power of Attorney (POA) that named her as POA by forging the victim’s signature and then used the POA to obtain credit and debit cards in the victim’s name. Alahmad used the fraudulently obtained credit and debit cards to conduct unauthorized purchases and withdrawals. At times, the victim was hospitalized and in a rehabilitation facility while Alahmad continued to write checks from the victim’s bank account without lawful authority. As a result of Alahmad’s conduct, the victim and the bank lost more than $46,000.

This investigation was conducted by the United States Postal Inspection Service and was prosecuted by Assistant U.S. Attorney Brian M. McDonough. The U.S. Attorney’s Office for the Northern District of Ohio would like to acknowledge and thank the Cuyahoga County Prosecutor’s Office and the Cleveland Police Department for their cooperation with this matter. 

The investigation and prosecution of this case is in response to the Elder Justice Initiative Program originating from the Elder Abuse Prevention and Prosecution Act of 2017 (EAPPA). The mission of the EAPPA and Elder Justice Initiative is to support and coordinate the Department of Justice’s enforcement efforts to combat elder abuse, neglect, financial fraud, and scams that target the nation’s elderly population.

If you observe something that you believe might be fraudulent conduct involving an older adult, contact the dedicated National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311 and visit the FBI’s IC3 Elder Fraud Complaint Center at IC3.gov to report it.

An Ohio man was sentenced to 20 months in prison for conspiring to defraud the IRS by not reporting income he earned from his ownership and operation of illegal gambling businesses.

According to court documents and statements made in court, from 2010 through 2018, Jason Kachner, 48, of Canton, along with Christos Karasarides Jr., 59, of Canton, and other co-conspirators, owned and operated two illegal gambling businesses, Skilled Shamrock and Redemption. 

From 2012 through 2017, patrons at Skilled Shamrock wagered a total of more than $34 million, which resulted in more than $4 million in income for the owners of the gambling business. Kachner conspired with his co-owners to defraud the IRS by using a nominee owner to conceal their ownership of the businesses and by filing false tax returns that omitted most of the income he received from the businesses.  

Overall, Kachner caused a loss to the IRS of $844,692.

In addition to his prison sentence, U.S. District Judge Donald C. Nugent for the Northern District of Ohio ordered Kachner to serve three years of supervised release and pay $1,393,024 in restitution to the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement.

IRS Criminal Investigation, the Stark County Prosecutor’s Office, the U.S. Department of Treasury Office of Inspector General, Homeland Security Investigations, the Ohio Casino Control Commission, and Ohio Organized Crime Investigations Commission-Major Crimes Task Force investigated the case.

Trial Attorneys Sam Bean and Hayter Whitman of the Justice Department’s Tax Division and Assistant U.S. Attorney David Toepfer for the Northern District of Ohio prosecuted the case.

An Ohio man was sentenced to over seven years in prison today for tax, money laundering and gambling crimes arising out of his ownership and operation of illegal gambling businesses and related misconduct. 

According to court documents and statements made in court, from 2009 through 2022, Steven Saris, 49, of Canton, Ohio, owned and operated multiple illegal gambling businesses in Northeast Ohio — including Café 62, Lucky’s, Winner’s World, Spin City and another business in Springfield, Ohio — as well as in Florida. Saris concealed his involvement in and income from these businesses by having others serve as nominee owners, and by destroying and directing others to destroy business records. 

For tax year 2015, Saris filed a false tax return that did not report more than $1.4 million in income he received from his illegal gambling businesses. For tax years 2016 through 2021, Saris did not file tax returns or pay all the tax that he owed despite earning more than $9 million in income from his gambling businesses. During that time, Saris made only two nominal payments to the IRS in 2018 when he filed an application for an extension of time to file his 2017 return. Saris used his proceeds from the businesses to gamble millions at legal casinos and to acquire and renovate at least two residential properties located in Canton, Ohio.

Saris’ conduct caused a tax loss of $2,823,391.

In July 2018, law enforcement executed search warrants at multiple illegal gambling businesses and associated locations in Northeast Ohio. Following those search warrants, Saris made false statements to law enforcement. At the same time, Saris continued operating the illegal gambling businesses and did not disclose that to law enforcement. In August 2022, law enforcement executed a court authorized search warrant at Saris’ residence and for his cellphone. Upon learning of the search warrant for his cellphone, Saris told law enforcement that he did not know where it was located. Law enforcement recovered Saris’ cellphone from the water tank of a toilet in Saris’ residence.

In addition to his prison sentence, U.S. District Judge Donald C. Nugent for the Northern District of Ohio ordered Saris to serve three years of supervised release and pay $2,823,391 in restitution to the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement.

IRS Criminal Investigation; the Stark County, Ohio, Prosecutor’s Office; the U.S. Department of Treasury Office of Inspector General; Homeland Security Investigations; the Ohio Casino Control Commission and the Ohio Organized Crime Investigations Commission, Major Crimes Task Force investigated the case.

Trial Attorneys Sam Bean and Hayter Whitman of the Justice Department’s Tax Division and Assistant U.S. Attorney David Toepfer for the Northern District of Ohio prosecuted the case.

CLEVELAND – To help keep children, teens, and communities safe, the U.S. Attorney’s Office (USAO) for the Northern District of Ohio has launched an awareness and education initiative to inform the public about the importance of securing firearms and storing them safely. As part of this initiative, the USAO is partnering with the Richmond Heights Police Department to present an information session, “Safe Gun Storage Saves Lives,” Thursday, Sept.19, from 6-7:30 p.m., at the Richmond Heights Community Center, 27285 Highland Rd., Richmond Heights, OH 44120.

The City of Richmond Heights will host the program, but residents of all communities are invited to attend. Topics include data and trends regarding firearms-related accidents and self-imposed harm, focusing on children and teens in particular; the connection between these tragedies and unsafe firearms-storage practices; the effects that such tragedies have on both individual families and the broader public; a gun lock demonstration and distribution; and steps to help prevent firearms-related tragedies by following and encouraging safe firearms-storage practices. 

The program features several speakers: U.S. Attorney Rebecca Lutzko for the Northern District of Ohio; firearms safety advocate Michelle Bell, the founder of M-Pac Cleveland, a local organization that aims to connect and support families affected by gun accidents and violence; MetroHealth Injury Prevention and Outreach Coordinator Anthony Zalewski, RN; Richmond Heights Police Chief Calvin Williams; and Richmond Heights Mayor Kim Thomas.

As part of the program, local police officers will distribute free gun locks; attendees will not need to provide any personal information to receive one. Officers will also exhibit other types of safe storage devices, demonstrate how to use them, and individually discuss safe storage options with attendees.

“When you make the choice to own a firearm, you owe it to your neighbors to do so responsibly.  As a whole, our community must do a better job to ensure that we store firearms in a safe manner, where a curious child or a despondent adolescent cannot readily access them. In April, a three-year-old child in Brunswick died from a gunshot wound after he found a gun in his own home, and accidentally discharged it while playing with it. Just a month later, in May, a two-year-old toddler in Euclid similarly died when he accidentally shot himself after he found a firearm in his home.  And just last week, a five-year-old boy in Utah died after—once again—finding his parent’s gun and accidentally shooting himself.  Every one of these tragedies could have been prevented,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio.  “Instead, these children—and the thousands of people of all ages who use firearms to take their own lives each year—are gone, and their families’ lives are irrevocably changed.  In launching this initiative, our goal is to protect children, at-risk teens, and young adults from grave danger in homes where firearms are present.  Our kids’ safety is everyone’s joint responsibility.”

The Safe Storage campaign’s message coincides with National Suicide Prevention Month, recognized annually each September by the National Institute of Mental Health. The number of firearm-related suicides rose nationally by 20% across the population from 2012 to 2022. The highest increases were found among younger people, according to fatal injury data from the Centers for Disease Control (CDC).

The risk of accidents also increases when firearms are easy to find and access. From 2003 to 2021, 85% of children fatally injured were located at a house or apartment, and 56% of incidents occurred in their own homes, according to the CDC report “Unintentional Firearm Injury Deaths Among Children and Adolescents Aged 0-17 Years.” More than 70% of firearms used were stored loaded, and nearly 80% of firearms were stored unlocked and easily found on a bed, under a pillow, under a mattress, or inside or on top of a nightstand, according to the report.

“We’re calling on our community partners and the public to help us spread awareness of these largely preventable accidents and instances of self-harm,” said U.S. Attorney Lutzko. “Much like seatbelt education helps to save lives of those involved in car accidents, spreading the word about safe storage will help save lives of children, teens, and young adults, who we have a special duty to protect. Our goal is to amplify the message of responsible firearm ownership through this community-centered, public-safety strategy.”

The USAO has posted on its website a host of free community resources discussing safe storage practices and providing tools for community members to spread the word about safe storage practices and help encourage them. Among the items included are bulletin board flyers, adult and child’s safety pledge certificates, and owners’ firearms safety manuals. Visit justice.gov/usao-ndoh/safe-gun-storage to view them. The public is also encouraged to follow the USAO on Facebook (@usaondoh) and X (@NDOHnews) to reshare safe gun storage tips and information throughout the coming weeks.

Additional safe storage community programs are slated to be announced.

TOLEDO, Ohio – Aron McKillips, 30, of Sandusky, Ohio, was sentenced to 41 months in prison by Judge James G. Carr, after pleading guilty to interstate communication of threats and unlawful possession of a machine gun.

McKillips pleaded guilty to the offenses in court on April 9, 2024. According to court documents, from September 2021 to July 2022, McKillips made at least five online threats to harm or kill law enforcement officers. In one such threat, he submitted a photo he took from his residence while aiming a semi-automatic rifle at an officer who was parked in a police vehicle further down the street who was there to assist residents on an unrelated matter.

 Additionally, McKillips unlawfully possessed a machine gun, specifically, a drop-in auto sear that could convert an AR-15 semi-automatic rifle into a fully automatic machinegun. Expert testing confirmed that the sear allowed multiple rounds to be fired with a single pull of the trigger.

The investigation preceding the indictment was conducted by the FBI Cleveland Division-Toledo Office.  This case was prosecuted by Assistant U.S. Attorney Gene Crawford for the Northern District of Ohio.

If you witness threatening behavior toward members of law enforcement, visit tips.fbi.gov/home to submit a tip.

AKRON, Ohio – Soumya Rudra, 41, of Whitehall, Pennsylvania, has pleaded guilty to traveling across state lines to engage in illicit sexual conduct with a minor and to possession of child sexual abuse materials (CSAM), also referred to as child pornography.

According to court documents, Rudra met the 14-year victim on a dating game app called “Kiss Kiss.” He then messaged her via Snapchat text and video calls throughout several months. Rudra drove more than 400 miles from Pennsylvania to Ohio in November 2023 to meet the victim. He transported her to a hotel where he proceeded to engage in criminal sexual activities. Investigators also discovered CSAM involving other minors on his electronic devices which were recovered at the hotel room.

Sentencing is scheduled for Dec. 11, 2024. Rudra faces a maximum penalty of 30 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The investigation was conducted by the FBI, Canton Field Office and the Wayne County Sheriff’s Office. Assistant U.S. Attorney Toni Beth Schnellinger Feisthamel for the Northern District of Ohio prosecuted the case.

To report child exploitation, please visit cybertipline.org, or call 1-800-843-5678, 24 hours a day, 7 days a week.

AKRON, Ohio - Dion Dejournett, 29, of Akron, was sentenced to 90 months in prison by U.S. District Judge Bridget Meehan Brennan, after pleading guilty to two counts of possession of controlled substances with intent to distribute fentanyl and methamphetamine, and one count of possession of firearms to further the crime of drug trafficking. Dejournett was ordered to serve five years of supervised release following release from prison and will also forfeit drug-related assets including four pistols, a semi-automatic rifle and more than $6,000.

According to court documents, in June 2023, the Akron Police Department (APD) executed a search warrant at Dejournett’s apartment. Methamphetamine and fentanyl were recovered throughout the master bedroom, hidden in a closet, drawers, and under the bed, including fentanyl in plain sight on top of a dresser. Packaging materials, cutting agents, and a digital scale were also recovered. Numerous firearms, including several pistols and a semi-automatic rifle, were found at his residence and confiscated. APD later found additional fentanyl on Dejournett following his arrest. Laboratory testing confirmed that police seized a total of 116.39 grams of mixtures and substances containing fentanyl and 1,460.51 of mixtures and substances containing methamphetamine.

The investigation preceding the indictment was conducted by the Akron Police Department and the FBI.

The case was prosecuted by Assistant U.S. Attorney David Toepfer for the Northern District of Ohio.

If you have information about the drug-related manufacture, distribution or trafficking of controlled substances, submit an anonymous tip at dea.gov/submit-tip.

TOLEDO, Ohio - Mark Shepherd, age 72, of Kenton, Ohio, has been sentenced to 12 months of probation, a $5,000 fine, and 150 hours of community service by U.S. Magistrate Judge Darrell A. Clay, after pleading guilty to violating the Clean Water Act by dumping pollutants and hazardous substances into waterways that killed thousands of fish in the Scioto River. He was also ordered to pay $22,508.60 to the Ohio Division of Wildlife.

According to court documents, on April 17, 2021, Shepherd discharged approximately 7,000 gallons of a hazardous, ammonia-containing substance into the Scioto River near Kenton, Ohio. The substance originated from Shepherd’s business facilities—Cessna Transport Inc. and A.G. Bradley Inc.—which he owned and operated in the Northern District of Ohio.

Local fisherman in Hardin County originally reported the fish kill in the area which is routinely used for recreational fishing. The Ohio Department of Natural Resources determined that the discharge killed 43,094 fish, including black bass, flathead catfish, sunfish, and minnows, valued at more than $22,000. The contaminants flowed approximately 18 miles downstream from where Shepherd illegally dumped it.

The fish kill led to concerns from wildlife officials who noted that bald eagles use the river as a food source. Eagle breeding pairs are known to build nests near the river to feed on fish. The concern has roots in history which showed that fish from contaminated waterways can poison animals who consume it. In the 1940s, the DDT insecticide used to control mosquitos and other insects, washed into waterways and contaminated fish. Bald eagles who fed on the fish were poisoned. The resulting decline in their numbers threatened the species with extinction. Bald eagles are no longer listed as an endangered species but remain protected under the Migratory Bird Treaty Act and the Bald and Golden Eagle Protection Act which prohibits killing, selling, or otherwise harming eagles, their nests or eggs. Officials continue to monitor the affected river area for harm to wildlife.

The case was investigated by wildlife officers with the Ohio Department of Natural Resources, the Ohio Attorney General’s Office-Environmental Enforcement Unit, the Ohio Environmental Protection Agency, the Ohio Bureau of Criminal Investigation, and the U.S. Environmental Protection Agency.

This case was prosecuted by Assistant U.S. Attorney Matthew Simko for the Northern District of Ohio.

If you have information or see activity that you believe is a potential or immediate environmental problem, please call the Ohio EPA 24-hour Hotline at 800-282-9378 or the U.S. EPA Emergency Number at 800-424-8802. 

YOUNGSTOWN, Ohio – Javier Eduardo Gutierrez-Quintana, 47, of El Paso, Texas, has pleaded guilty to possession of 20 kilograms of cocaine with intent to distribute.

According to court documents, on May 31, 2024, Ohio State Highway Patrol (OSHP) officers encountered the defendant who was driving a commercial vehicle bearing a Texas license plate and registration. A second OSHP officer deployed a K-9 near the defendant’s vehicle, and it subsequently gave a positive signal for the odor of narcotics. The defendant consented to a search of the vehicle. Three black duffle bags containing 20 blue-taped packages were found during the search. Upon the discovery, Gutierrez-Quintana admitted to investigators that he knowingly transported 20 kilograms of narcotics from El Paso, Texas to the Youngstown, Ohio area, where he was scheduled to meet with an unknown person (or persons) and deliver the packages. Laboratory testing confirmed that the packages contained cocaine.

Sentencing is scheduled for Nov. 22, 2024. Gutierrez-Quintana faces a maximum penalty of 20 years in prison for possessing narcotics with intent to distribute. 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.

The investigation was conducted by the DEA and the Ohio State Highway Patrol. Assistant U.S. Attorney David Toepfer for the Northern District of Ohio prosecuted the case.

If you have information about the drug-related manufacture, distribution or trafficking of controlled substances, submit an anonymous tip at dea.gov/submit-tip.

The U.S. Attorney’s Office for the Northern District of Ohio filed a complaint against a defendant known as “Brain,” believed to be based in Europe, and who is responsible for building a multi-national ransomware organization known as Radar. The complaint sought injunctive relief to prevent additional attacks on victims from occurring and authorized disruption of the ransomware by disabling domain names, servers and IP addresses associated with the criminal enterprise. Related ransomware domain names and servers in the United Kingdom and Germany were also disabled in a transnational coordinated effort.

Victims include businesses and organizations located in more than three dozen countries throughout the world. Among the victims in the northern district of Ohio were a trade union and a manufacturing company.

The complaint alleges that the defendant developed a highly sophisticated and destructive form of software, known as ransomware, and used it to engage in wire fraud and unlawful interception of electronic communications. This was accomplished by infecting victims’ computers which locked them out from accessing their own files. Ransomware administrators then demanded the victims to pay a ransom in order to unlock the files. Failure to pay the ransom could result in selling the victims’ data to nefarious third parties.

According to the FBI, monetary losses incurred by individuals and organizations are estimated to be in the millions. This is an ongoing investigation and the extent of the reach and damage inflicted is yet to be determined.

This case was investigated by the FBI Cleveland Division; the Bavarian State Criminal Police Office in Germany; the National Crime Agency of the United Kingdom; and the Prosecutor’s Office of Bamberg, Germany.

The case is being handled by Assistant U.S. Attorney Brendan Barker for the Northern District of Ohio.

To report ransomware attacks, visit ic3.gov or call 1-800-CALL-FBI (1-800-2255-324).

AKRON, Ohio – David Walker, 39, of Akron, was sentenced to 16 years in prison by U.S. District Judge Bridget Meehan Brennan, after pleading guilty to receipt, possession and distribution of child sexual abuse materials (CSAM), also referred to as child pornography. Walker was also ordered to serve 15 years of supervised release after serving his prison sentence.

Walker was an active participant on BitTorrent, an internet service that allows users to download content such as images and videos easily. It utilizes each user’s computer as a mini-server to facilitate computer-to-computer file sharing among users throughout the world. The technology allows thousands of people to download the same files without crashing the system which has made BitTorrent a commonly used protocol to share illegal files such as CSAM.

According to court documents, Walker received and distributed nearly 400 video files known to contain CSAM and exploitation of children. A computer tablet with CSAM files was recovered during the execution of a federal search warrant of his residence. Files were described to include male and female children of various ages under 17 including infants and toddlers. According to the National Center for Missing and Exploited Children, some of the victims were identified on the video files found in Walker’s seized computer tablet.

The investigation preceding the indictment was conducted by the FBI, the Hamilton County Sherriff’s Office, and the Brunswick Police Department.

The case was prosecuted by Assistant U.S. Attorney Yasmine Makridis for the Northern District of Ohio.

To report child sexual abuse, please visit cybertipline.org, or call 1-800-843-5678, 24 hours a day, 7 days a week.

CLEVELAND – A federal court prohibited a Sandusky, Ohio-area physician from prescribing opioids and other controlled substances and ordered him to pay $4.7 million in a case alleging violations of the Controlled Substances Act (CSA) and the False Claims Act (FCA).

In a civil complaint filed in August 2018, the United States alleged that Gregory Gerber, MD, age 59, of Port Clinton, Ohio, who operated an office in Sandusky, unlawfully issued prescriptions without a legitimate medical basis for opioids and other controlled substances in violation of the CSA and the FCA. The complaint alleged that one patient died from an overdose of fentanyl patches prescribed by Gerber. The complaint further alleged that Gerber received kickback payments from a drug manufacturer as part of a scheme to unlawfully prescribe Subsys, a powerful opioid drug containing fentanyl, in violation of the FCA.

“Medical professionals who knowingly facilitate the abuse of opioids violate their legal obligations,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “The department will pursue justice against anyone who seeks to profit from unlawfully prescribing opioids.”

“All doctors must follow the law when prescribing opioids — their patients, and the public more generally, rely on such compliance,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Gerber’s patients trusted him. But instead of safeguarding that trust, Gerber accepted payments from a drug company in exchange for prescribing dangerous, addictive drugs and wrote thousands of prescriptions that were not for a legitimate medical purpose. Our office will use all available tools — civil and criminal — to fight the opioid epidemic and protect patients and their families so that doctors like Gerber do not profit from abusing our healthcare system.” 

“Dr. Gerber betrayed the trust placed in him and willfully violated his oath to protect the public and the provisions of the Controlled Substance Act,” said Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration (DEA)’s Detroit Field Division. “His reckless behavior contributed to the opioid crisis gripping the nation and brought suffering to many communities in northern Ohio. This ruling will hopefully deter other medical practitioners who are inclined to put profit over patient health and safety.”

“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 Deputy Inspector General Christian J. Schrank of Investigations of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG). “Working with our law enforcement partners, we will continue to work to ensure that bad actors are held accountable for such schemes in order to protect both patients and taxpayers.”

“Ignoring the law by distributing prescriptions to opioids for illicit profit harms the communities that physicians are meant to help,” said Executive Assistant Director Michael D. Nordwall of the FBI’s Criminal, Cyber, Response and Services Branch. “The FBI is glad that Gerber will not be able to prescribe controlled substances ever again.”

Gerber agreed to a consent judgment to settle the allegations in the complaint. The order entered by the court permanently prohibits Gerber from prescribing opioids or other controlled substances, permanently prohibits him from managing, owning or controlling any entity that dispenses controlled substances and requires Gerber to pay approximately $4.7 million under the FCA. Gerber was also sentenced in March to 42 months in prison and one year of home confinement in a related criminal case brought by the United States Attorney’s Office for the Northern District of Ohio.

U.S. District Judge Jeffrey J. Helmick entered the judgment and permanent injunction in U.S. District Court for the Northern District of Ohio. In August 2018, Judge Helmick issued a temporary restraining order and preliminary injunction prohibiting Gerber from prescribing opioids or other controlled substances.

The DEA, FBI, HHS-OIG, Ohio Attorney General’s Medicaid Fraud Control Unit, State of Ohio Board of Pharmacy and State Medical Board of Ohio investigated the case.

Assistant U.S. Attorneys Patricia Fitzgerald and Angelita Cruz Bridges for the Northern District of Ohio and Trial Attorney Scott B. Dahlquist of the Civil Division’s Consumer Protection Branch handled the case.

The claims made in the complaint are allegations that the United States would need to prove by a preponderance of the evidence if the case proceeded to trial.

View Consent Decree

CLEVELAND - The U.S. Attorney’s Office (USAO) for the Northern District of Ohio will join dozens of community organizers and law enforcement partners to participate in “National Night Out” on Tuesday, Aug. 6, 2024, from 5-8 p.m. at Halloran Park, 3550 West 117th Street, Cleveland, 44111. The family-friendly event is free and open to the public. The event is held on the first Tuesday of August each year and is an opportunity for community members to meet and talk with those who keep our communities safe. Visitors to this outdoor event may take part in games and activities, pick up giveaways and snacks, and learn about the importance of safety in the community.

USAO personnel will be on hand to interact with and answer questions from members of the community and to highlight awareness about law enforcement initiatives such as Elder Financial Abuse scams. 

“National Night Out has rallied neighborhood residents, law enforcement, and community leaders in the common goal of strengthening relationships to help prevent, deter, and address crime in our local community,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Our Office is proud to stand alongside our law enforcement colleagues to engage with our community members, support safer homes and streets, and work together to drive out crime.”

As the chief federal law enforcement official in the Northern District Ohio, it is the U.S. Attorney’s job to help coordinate a comprehensive law enforcement and crime prevention strategy for Northern Ohio. The office works with federal, state and local partners on wide-ranging investigations of groups and people that span county, state, and international boundaries.

National Night Out was established in 1984 by the Bureau of Justice Assistance through the U.S. Department of Justice’s Office of Justice Programs. The program is administered by the National Association of Town Watch, a nationwide non-profit organization.

Coordinated by local law enforcement and trained volunteers, National Night Out provides communities from coast to coast the chance to bring police and neighbors together under positive circumstances such as cookouts, festivals, parades, safety demonstrations, youth events, visits from emergency personnel, and more. National Night Out sends a message that neighbors are united and working together to keep their communities and each other safe.

For more information about law enforcement initiatives and programs, contact District Law Enforcement Coordinator Tom Weldon at 216-622-3600, or usaohn.lecc@usdoj.gov.

CLEVELAND – Six people have pleaded guilty in a 33-count indictment with illegally obtaining nearly $3,000,000 in Federal Pandemic Unemployment Assistance (PUA) benefits using other people’s personal identifying information. The PUA program is overseen by the U.S. Department of Labor and was created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 to provide temporary benefits to workers who lost work for COVID-19-related reasons.

According to court documents, from March 2020 to August 2021, the defendants, Clarissa Cheney, 30, of Cleveland Heights; Kevin Gilmore, 38, of Beachwood; Tiara Henderson, 37, of Lakewood; Ladessa Battle, 29, of South Euclid; Lynard Mitchell, 39, of South Euclid; and Marcelys Jones, 29, of Cleveland Heights, submitted fraudulent applications for PUA benefits to the California Employment Development Department (EDD) and other state workforce agencies around the country.

“The pandemic created unprecedented financial challenges for millions of Americans who were unable to work because their employers were forced to cut back business operations or close entirely.  PUA was intended to assist those individuals—workers in dire need of financial support while unemployed—yet these defendants stole millions of dollars from that program,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “These guilty pleas demonstrate our office’s commitment to prosecute and hold criminally responsible those who try to scam federal relief programs, waste our tax dollars, and steal the identities of others.  We thank our law enforcement partners for helping us hold these defendants responsible for their crimes.”

The defendants falsified application details, such as employment history and residency, to appear eligible for PUA benefits. As a result, California EDD and other agencies approved nearly $3,000,000 in unemployment insurance benefits in the defendants’ names, and those of other individuals.  The benefits were pre-loaded onto bank-issued debit cards and sent through the U.S. mail.  After receiving the debit cards, some of the defendants used the cards to make cash withdrawals at various ATMs in the Northern District of Ohio.

“The deliberate and conniving actions to cheat a program designed to assist people who were affected by the Covid-19 pandemic is inexcusable,” said FBI Special Agent in Charge, Greg Nelsen. “Their actions, including exploiting the identities of a multitude of individuals, will have a profound and long-lasting impact. The FBI and our partners will continue to identify and investigate those who commit pandemic-related fraud and seek justice for the victims."

The defendants are scheduled to be sentenced in September and October 2024 and face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

“The defendants engaged in an unemployment insurance (UI) fraud scheme that targeted multiple state workforce agencies. These individuals conspired to file fraudulent UI claims in the names of other individuals, diverting vital taxpayer resources away from unemployed American workers in dire need of UI benefits. These guilty pleas affirm the U.S. Department of Labor, Office of Inspector General’s commitment to protecting the integrity of the UI program. We are grateful for our many law enforcement partners, including the U.S. Attorney’s Office,” said Dana Johnson, Acting Special Agent in Charge, Great Lakes Region, U.S. Department of Labor, Office of Inspector General.

The Department of Labor, Office of Inspector General, and the FBI investigated this case. This case was prosecuted by Assistant U.S. Attorneys Alejandro Abreu and Scott Zarzycki.

TOLEDO – Ankita Singh, 42, formerly of Maumee, Ohio, was sentenced to 26 months in prison by U.S. District Judge Jack Zouhary, for her role in a durable medical equipment (DME) scheme that defrauded the U.S. Department of Health and Human Services Medicare Program. She was also ordered to pay restitution in the amount of $4,470,931.02, serve two years of supervised release, and pay a special assessment fee of $600.

On Feb. 29, 2024, a jury found Singh guilty of six counts of health care fraud for signing false orders for orthotic braces, that patients never requested and did not need, as part of a DME scheme.

Beginning in 2019, Singh worked as an independent contractor for at least two companies, to purportedly provide “telehealth services,” and was paid a fee to conduct patient consultations. The consultations never took place. Telemarketers would cold call Medicare beneficiaries and tell them that orthotic braces would be provided to them at no cost. The beneficiaries were not previously Singh’s patients and she never spoke to them. Singh never saw them in person and did not conduct a telehealth visit. The telemarketers would prepare orders with the beneficiaries’ names, Medicare numbers, and purported diagnosis to support a false diagnosis that the braces were medically necessary. Orders were then electronically sent to Singh to affix her signature and certify that she was treating the Medicare beneficiary and affirm that the brace was medically necessary. Singh signed more than 11,000 prescriptions for orthotic braces for approximately 3,000 Medicare beneficiaries with whom she had no patient-physician relationship, and frequently ordered multiple braces for each patient, without ever having examined them.

As a result of Singh’s false orders, more than $8 million was billed to Medicare for orthotic devices that were not medically necessary. In all, Medicare paid approximately $4.47 million in claims for the fraudulent prescriptions that Singh signed.

This case was prosecuted by Assistant U.S. Attorneys Gene Crawford and Angelita Cruz Bridges for the Northern District of Ohio. The case was investigated by the U.S. Department of Health and Human Services (HHS) - Office of Inspector General, and the FBI.

To report suspected health care fraud, waste, abuse, or mismanagement of HHS programs, visit https://oig.hhs.gov/fraud/report-fraud/contact/ or call 1-800-447-8477.

TOLEDO – Michael Bush, 22, of Toledo, Ohio, has pleaded guilty to robbery of mail, money, or other property of the United States, stealing mail collection box keys, and mail theft. The violations took place while a United States Postal Service (USPS) letter carrier was on a delivery route in July 2023.   

According to court documents, an individual later identified as Bush, approached the carrier while they sat in a parked USPS truck on Ryewyck Drive in Toledo, Ohio. He grabbed keys for both the mail truck and the collection box and robbed the carrier at gunpoint of their personal cellphone and a USPS parcel scanner. A witness who observed the incident provided a description of the suspect to investigators. The Toledo Police Department (TPD) recovered surveillance video of the robbery and identified the vehicle involved in the theft as being registered to Michael Bush.

A large, black garbage bag containing U.S. Mail was recovered during a federal search warrant executed by the United States Postal Inspection Service (USPIS) and the TPD at Bush’s residence. Nearly 200 mail theft victims were identified. Inspectors also recovered several firearms and rifle magazines. The vehicle identified in the surveillance video was later recovered at a separate location where Bush’s aunt resides. Additionally, images recovered on Bush’s cellphone show him posing with large stacks of U.S. currency and firearms.

Update-Nov. 18, 2024:

Bush was sentenced on Nov. 18, 2024, to 66 months in prison by U.S. District Judge Jack Zouhary for robbery of mail, money or other property of the United States, stealing mail collection box keys, and mail theft. Restitution amount to be determined at a later date.

The case was prosecuted by Assistant United States Attorney Frank H. Spryszak for the Northern District of Ohio. The investigation preceding the indictment was a collaborative effort conducted by the United States Postal Inspection Service and the Toledo Police Department.

About the United States Postal Inspection Service (USPIS)

USPIS is the law enforcement branch of the United States Postal Service. To report mail theft or other crimes committed through, or towards, the United States Postal Service, call the USPIS at 1-877-876-2455 or visit uspis.gov/report. For more information about combatting mail theft visit uspis.gov/project-safe-delivery.

The Justice Department announced that Rite Aid Corporation (Rite Aid) and 10 subsidiaries and affiliates have agreed to settle the government’s allegations under the False Claims Act (FCA) and Controlled Substances Act (CSA) asserted in United States ex rel. White et al. v. Rite Aid Corp., et al., No. 1:21-cv-1239 (N.D. Ohio). Under the settlement, the government will be paid $7.5 million and have an allowed, unsubordinated, general unsecured claim of $401.8 million in Rite Aid’s bankruptcy case that is pending in the District of New Jersey. During the relevant time period, Rite Aid operated one of the country’s largest retail pharmacy chains with over 2,200 retail pharmacies in 17 states. 

“Filling unnecessary prescriptions for powerful and addictive opioids, as the government alleged here, not only takes a toll on our communities, but also violates the law,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As today’s settlement illustrates, the Justice Department is committed to holding pharmacies accountable for their role in the nation’s opioid crisis.”

“Pharmacies and pharmacists have an affirmative legal duty to ensure that the prescriptions they fill are legitimate,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “When they disregard this responsibility and instead ignore red flags indicating that prescriptions for addictive painkillers are invalid, they violate the public’s trust and harm the community they are supposed to serve — all to make a buck. Our settlement with Rite Aid reinforces the Northern District of Ohio’s continued commitment to combatting the opioid crisis. My office and our law enforcement partners will continue to battle this epidemic by ensuring that corporate actors comply with their legal obligations, which help to restrict unwarranted public access to highly addictive medications, and thereby fight to keep vulnerable members of our communities from becoming addicted to opioids.”

The government’s complaint alleges that, from May 2014 through June 2019, Rite Aid knowingly dispensed at least hundreds of thousands of unlawful prescriptions for controlled substances that (1) lacked a legitimate medical purpose and were not issued in the usual course of professional practice and/or (2) were not valid prescriptions, were not for a medically accepted indication or were medically unnecessary. These unlawful prescriptions included, for example, prescriptions for the dangerous, highly diverted combination of drugs known as “the trinity,” prescriptions for excessive quantities of opioids, such as highly addictive oxycodone and fentanyl, and prescriptions issued by prescribers who Rite Aid pharmacists had repeatedly identified internally as suspicious and as writing unlawful, unnecessary prescriptions. The government further alleges that Rite Aid filled these prescriptions despite clear “red flags,” which highly indicated the prescriptions were unlawful and which pharmacists are trained to recognize. Rite Aid also allegedly ignored substantial evidence that its stores were dispensing unlawful prescriptions, including specific concerns raised by its pharmacists, and intentionally deleted internal notes about suspicious prescribers written by Rite Aid pharmacists, such as “writing excessive dose[s] for oxycodone,” and “DO NOT FILL CONTROLS.” By knowingly dispensing unlawful prescriptions for controlled substances, the government alleges that Rite Aid violated the CSA and, where Rite Aid sought reimbursement from federal healthcare programs, also violated the FCA. 

Along with Rite Aid Corporation, the government’s complaint names as defendants the following Rite Aid subsidiaries: Rite Aid Hdqtrs Corp.; Rite Aid of Connecticut Inc.; Rite Aid of Delaware Inc.; Rite Aid of Maryland; Rite Aid of Michigan; Rite Aid of New Hampshire; Rite Aid of New Jersey; Rite Aid of Ohio; Rite Aid of Pennsylvania and Rite Aid of Virginia.

“Pharmacies and pharmacists have a critical responsibility to ensure controlled substances are dispensed lawfully and safely to the public. This includes highly addictive opioids as we continue to see the impact of the opioid crisis,” said Deputy Inspector General Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is entering into a Corporate Integrity Agreement with Rite Aid, which includes a prescription drug claims review to have an Independent Review Organization determine whether prescription drugs are properly prescribed, dispensed, and billed.  HHS-OIG will continue to work with our law enforcement partners to hold providers accountable that put the public at risk.”

“America continues to live through the worst opioid epidemic we have ever seen. Rite Aid contributed to this crisis by ignoring obvious red flags and dispensing hundreds of thousands of unnecessary opioids,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “DEA will continue to do everything in our power to protect the health and safety of Americans and to end the opioid epidemic.”

The civil settlement includes the resolution of claims that certain Rite Aid pharmacies in Washington State violated the CSA by filling prescriptions written by prescribers who lacked proper controlled substance prescribing authority. The settlement also resolves claims brought in 2019 under the qui tam, or whistleblower, provisions of the FCA by Andrew White, Mark Rosenberg and Ann Wegelin, who all previously worked for Rite Aid at various pharmacies. The FCA authorizes private parties to sue on behalf of the United States for false claims and share in any recovery and permits the United States to take over the lawsuit, as it did here in part. The relators will receive 17% of the government’s FCA recovery in this matter.

In addition to the civil settlement, Rite Aid has entered into agreements with DEA and HHS-OIG to address its obligations going forward. Rite Aid and DEA entered a memorandum of agreement (MOA) designed to increase communication between the company, its retailers and DEA. Employees will receive additional training to help them identify illegitimate prescriptions and minimize the risk of drug diversion. The MOA also requires Rite Aid to create and keep materials relevant to DEA investigations for a minimum of five years. Rite Aid further commits to implementing and managing an anonymous hotline for employees, patients and the public to report suspected illegal dispensing of highly diverted controlled substances as well as suspected violations of the CSA. Rite Aid has also entered into a corporate integrity agreement (CIA) with HHS-OIG. The CIA includes a prescription claims drug review to have an Independent Review Organization to determine whether prescription drugs are properly prescribed, dispensed and billed.

The settlement was approved on June 28 by the bankruptcy court as part of Rite Aid’s plan of reorganization, which is expected to become effective later this summer. The amount the government will recover on its unsecured claim under the settlement will depend on the ultimate amount of assets available to the bankruptcy estate for distribution to unsecured creditors.

The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Ohio handled this matter. The DEA Cleveland Division, FBI Cleveland Field Office and HHS-OIG provided substantial assistance in the investigation.

Senior Trial Counsel Christopher Wilson of the Civil Division’s Fraud Section and Assistant U.S. Attorneys Patricia Fitzgerald, Elizabeth Berry and Kathryn Andrachik for the Northern District of Ohio handled the White matter. Trial Attorneys Mary Schmergel, Gregory Werkheiser and Ryan Lamb of the Civil Division’s Corporate/Financial Litigation Section handled the Rite Aid bankruptcy case.

This settlement illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the HHS at 800-HHS-TIPS (800-447-8477).

The claims asserted against the defendants are allegations only. There has been no determination of liability.

Settlement

TOLEDO – A federal grand jury has returned a three-count indictment charging Damere Wilson, 20, of Toledo, Ohio, with robbery of mail, money, or other property of the United States, stealing mail collection box keys, and mail theft. The violations allegedly took place while a United States Postal Service letter carrier was on a delivery route.         

According to court documents, an individual approached the letter carrier on March 12, 2024, delivering mail at the Piccadilly Apartments in Oregon, Ohio. The letter carrier indicated a hard object was shoved into their back and the individual demanded the keys to the mailboxes. Wilson’s vehicle was observed fleeing the scene of the robbery through information gathered via surveillance videos which resulted in the execution of a search warrant at a duplex on Maplewood Avenue in Toledo.

The postal key stolen from the letter carrier, as well as more than 200 checks totaling thousands of dollars, were recovered during a search warrant execution. More than 100 mail theft victims were identified from throughout northern Ohio.

If convicted, Wilson’s sentence will be determined by the court after review of factors unique to this case, including his prior criminal record, if any, his role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases, it will be less than the maximum.      

The case is being prosecuted by Assistant United States Attorney Frank H. Spryszak for the Northern District of Ohio.  The investigation preceding the indictment was a collaborative effort conducted by the United States Postal Inspection Service (USPIS), and the the City of Oregon Police Division.

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

To report mail theft or other crimes committed through, or towards, the United States Postal Service, call the USPIS at 1-877-876-2455 or visit https://www.uspis.gov/report. 

The Justice Department announced today that Rite Aid Corporation and Rite Aid subsidiaries, Elixir Insurance Company, RX Options LLC and RX Solutions LLC, have agreed to resolve allegations that they violated the False Claims Act (FCA) by failing to accurately report drug rebates to the Medicare Program. As part of the settlement, Elixir Insurance and Rite Aid will pay the United States $101 million, and RX Options and RX Solutions will grant the United States an allowed, unsubordinated, general unsecured claim for a total of $20 million in Rite Aid’s bankruptcy case pending in the District of New Jersey. The settlement is based on the companies’ ability to pay and was approved on June 28 by the bankruptcy court as part of Rite Aid’s plan of reorganization, which is expected to become effective later this summer. In addition to operating one of the country’s largest retail pharmacy chains, Rite Aid offered Medicare drug plans and pharmacy benefits manager (PBM) services through Elixir Insurance, RX Options and RX Solutions.  

“Participants in Medicare’s drug program must accurately report price concessions, including drug manufacturer rebates, to ensure that the government receives the benefit of those concessions,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement reflects the Justice Department’s commitment to hold accountable entities that pursue their own financial interests at the expense of taxpayer programs.”

“Rite Aid and its Elixir subsidiaries lined their corporate pockets with millions of dollars of manufacturer rebates that should have been reported to Medicare,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Each of those dollars could have been used to benefit Americans with genuine health care needs. Our office will not tolerate deceptive health-insurance practices, and we will vigorously pursue those who violate the FCA.”

Under Medicare Part D, private entities known as Part D Plan Sponsors offer and administer insurance plans that provide prescription drug coverage to enrolled Medicare beneficiaries. Part D Sponsors must submit annual reports to the Centers for Medicare and Medicaid Services (CMS) with information about rebates and other remuneration the Plans received from drug manufacturers in connection with the Part D drugs provided to beneficiaries, which ensures that the government receives the benefit of any price concessions provided by drug manufacturers to purchasers of the drugs covered under the Part D plan. CMS relies on the reports in the annual reconciliation process that determines payments due to the Plans or CMS at the end of the year.

The settlement resolves allegations that, between 2014 and 2020, the defendants improperly reported to CMS portions of rebates received from manufacturers as bona fide service fees, even though manufacturers did not negotiate with the defendants to pay such fees. The United States further alleged that Elixir Insurance knew the retained rebates did not meet the regulatory definition of bona fide services fees.

“Truthful and accurate documentation in the delivery of health care goods or services is crucial to the integrity of federal health care programs,” said Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Improper submission of manufacturer drug rebates and fees by Part D Plan Sponsors for pharmaceutical products in order to make more money will not be tolerated. Collaborating with our law enforcement partners, HHS-OIG is committed to preventing and investigating health care fraud in Medicare and other taxpayer-funded health care programs.”

The civil settlement includes the resolution of claims brought in 2021 under the qui tam, or whistleblower, provisions of the False Claims Act by Glenn Rzeszutko, who previously worked for RX Options. The FCA authorizes a private party to sue on behalf of the United States and share in any recovery. The qui tam case is captioned United States ex rel. Rzeszutko v. Rite Aid Corporation et al., No. 5:21-CV-574 (N.D. Ohio). The relator’s share of these proceeds has not yet been determined.

The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Ohio handled this matter, with substantial assistance from HHS-OIG and FBI Cleveland Division.

Trial attorneys Christopher Wilson and Dan Schiffer of the Civil Division’s Fraud Section and Assistant U.S. Attorney Jackson Froliklong for the Northern District of Ohio handled this matter. HHS-OIG and the FBI Cleveland Field Office provided substantial assistance in the investigation. Assistant Director Mary Schmergel and Trial Attorneys Gregory Werkheiser and Ryan Lamb of the Civil Division’s Corporate/Financial Litigation Section are handling the Rite Aid bankruptcy.

Today’s settlements illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).

The claims asserted against defendants are allegations only. There has been no determination of liability.

The Justice Department announced that Rite Aid Corporation and Rite Aid subsidiaries, Elixir Insurance Company, RX Options LLC and RX Solutions LLC, have agreed to resolve allegations that they violated the False Claims Act (FCA) by failing to accurately report drug rebates to the Medicare Program. As part of the settlement, Elixir Insurance and Rite Aid will pay the United States $101 million, and RX Options and RX Solutions will grant the United States an allowed, unsubordinated, general unsecured claim for a total of $20 million in Rite Aid’s bankruptcy case pending in the District of New Jersey. The settlement is based on the companies’ ability to pay and was approved on June 28 by the bankruptcy court as part of Rite Aid’s plan of reorganization, which is expected to become effective later this summer. In addition to operating one of the country’s largest retail pharmacy chains, Rite Aid offered Medicare drug plans and pharmacy benefits manager (PBM) services through Elixir Insurance, RX Options and RX Solutions.  

“Participants in Medicare’s drug program must accurately report price concessions, including drug manufacturer rebates, to ensure that the government receives the benefit of those concessions,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement reflects the Justice Department’s commitment to hold accountable entities that pursue their own financial interests at the expense of taxpayer programs.”

“Rite Aid and its Elixir subsidiaries lined their corporate pockets with millions of dollars of manufacturer rebates that should have been reported to Medicare,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Each of those dollars could have been used to benefit Americans with genuine health care needs. Our office will not tolerate deceptive health-insurance practices, and we will vigorously pursue those who violate the FCA.”

Under Medicare Part D, private entities known as Part D Plan Sponsors offer and administer insurance plans that provide prescription drug coverage to enrolled Medicare beneficiaries. Part D Sponsors must submit annual reports to the Centers for Medicare and Medicaid Services (CMS) with information about rebates and other remuneration the Plans received from drug manufacturers in connection with the Part D drugs provided to beneficiaries, which ensures that the government receives the benefit of any price concessions provided by drug manufacturers to purchasers of the drugs covered under the Part D plan. CMS relies on the reports in the annual reconciliation process that determines payments due to the Plans or CMS at the end of the year.

The settlement resolves allegations that, between 2014 and 2020, the defendants improperly reported to CMS portions of rebates received from manufacturers as bona fide service fees, even though manufacturers did not negotiate with the defendants to pay such fees. The United States further alleged that Elixir Insurance knew the retained rebates did not meet the regulatory definition of bona fide services fees.

“Truthful and accurate documentation in the delivery of health care goods or services is crucial to the integrity of federal health care programs,” said Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Improper submission of manufacturer drug rebates and fees by Part D Plan Sponsors for pharmaceutical products in order to make more money will not be tolerated. Collaborating with our law enforcement partners, HHS-OIG is committed to preventing and investigating health care fraud in Medicare and other taxpayer-funded health care programs.”

The civil settlement includes the resolution of claims brought in 2021 under the qui tam, or whistleblower, provisions of the False Claims Act by Glenn Rzeszutko, who previously worked for RX Options. The FCA authorizes a private party to sue on behalf of the United States and share in any recovery. The qui tam case is captioned United States ex rel. Rzeszutko v. Rite Aid Corporation et al., No. 5:21-CV-574 (N.D. Ohio). The relator’s share of these proceeds has not yet been determined.

Trial attorneys Christopher Wilson and Dan Schiffer of the Civil Division’s Fraud Section and Assistant U.S. Attorney Jackson Froliklong for the Northern District of Ohio handled this matter. HHS-OIG and the FBI Cleveland Field Office provided substantial assistance in the investigation. Trial Attorneys Mary Schmergel, Gregory Werkheiser and Ryan Lamb of the Civil Division’s Corporate/Financial Litigation Section are handling the Rite Aid bankruptcy.

The settlements illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).

The claims asserted against defendants are allegations only. There has been no determination of liability.

Settlement

The Justice Department today announced that Rite Aid Corporation (Rite Aid) and 10 subsidiaries and affiliates have agreed to settle the government’s allegations under the False Claims Act (FCA) and Controlled Substances Act (CSA) asserted in United States ex rel. White et al. v. Rite Aid Corp., et al., No. 1:21-cv-1239 (N.D. Ohio). Under the settlement, the government will be paid $7.5 million and have an allowed, unsubordinated, general unsecured claim of $401.8 million in Rite Aid’s bankruptcy case that is pending in the District of New Jersey. During the relevant time period, Rite Aid operated one of the country’s largest retail pharmacy chains with over 2,200 retail pharmacies in 17 states.

“Filling unnecessary prescriptions for powerful and addictive opioids, as the government alleged here, not only takes a toll on our communities, but also violates the law,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As today’s settlement illustrates, the Justice Department is committed to holding pharmacies accountable for their role in the nation’s opioid crisis.”

“Pharmacies and pharmacists have an affirmative legal duty to ensure that the prescriptions they fill are legitimate,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “When they disregard this responsibility and instead ignore red flags indicating that prescriptions for addictive painkillers are invalid, they violate the public’s trust and harm the community they are supposed to serve — all to make a buck. Our settlement with Rite Aid reinforces the Northern District of Ohio’s continued commitment to combatting the opioid crisis. My office and our law enforcement partners will continue to battle this epidemic by ensuring that corporate actors comply with their legal obligations, which help to restrict unwarranted public access to highly addictive medications, and thereby fight to keep vulnerable members of our communities from becoming addicted to opioids.”

The government’s complaint alleges that, from May 2014 through June 2019, Rite Aid knowingly dispensed at least hundreds of thousands of unlawful prescriptions for controlled substances that (1) lacked a legitimate medical purpose and were not issued in the usual course of professional practice and/or (2) were not valid prescriptions, were not for a medically accepted indication or were medically unnecessary. These unlawful prescriptions included, for example, prescriptions for the dangerous, highly diverted combination of drugs known as “the trinity,” prescriptions for excessive quantities of opioids, such as highly addictive oxycodone and fentanyl, and prescriptions issued by prescribers who Rite Aid pharmacists had repeatedly identified internally as suspicious and as writing unlawful, unnecessary prescriptions. The government further alleges that Rite Aid filled these prescriptions despite clear “red flags,” which highly indicated the prescriptions were unlawful and which pharmacists are trained to recognize. Rite Aid also allegedly ignored substantial evidence that its stores were dispensing unlawful prescriptions, including specific concerns raised by its pharmacists, and intentionally deleted internal notes about suspicious prescribers written by Rite Aid pharmacists, such as “writing excessive dose[s] for oxycodone,” and “DO NOT FILL CONTROLS.” By knowingly dispensing unlawful prescriptions for controlled substances, the government alleges that Rite Aid violated the CSA and, where Rite Aid sought reimbursement from federal healthcare programs, also violated the FCA. 

Along with Rite Aid Corporation, the government’s complaint names as defendants the following Rite Aid subsidiaries: Rite Aid Hdqtrs Corp.; Rite Aid of Connecticut Inc.; Rite Aid of Delaware Inc.; Rite Aid of Maryland; Rite Aid of Michigan; Rite Aid of New Hampshire; Rite Aid of New Jersey; Rite Aid of Ohio; Rite Aid of Pennsylvania and Rite Aid of Virginia.

“Pharmacies and pharmacists have a critical responsibility to ensure controlled substances are dispensed lawfully and safely to the public. This includes highly addictive opioids as we continue to see the impact of the opioid crisis,” said Deputy Inspector General Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is entering into a Corporate Integrity Agreement with Rite Aid, which includes a prescription drug claims review to have an Independent Review Organization determine whether prescription drugs are properly prescribed, dispensed, and billed.  HHS-OIG will continue to work with our law enforcement partners to hold providers accountable that put the public at risk.”

“America continues to live through the worst opioid epidemic we have ever seen. Rite Aid contributed to this crisis by ignoring obvious red flags and dispensing hundreds of thousands of unnecessary opioids,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “DEA will continue to do everything in our power to protect the health and safety of Americans and to end the opioid epidemic.”

The civil settlement includes the resolution of claims that certain Rite Aid pharmacies in Washington State violated the CSA by filling prescriptions written by prescribers who lacked proper controlled substance prescribing authority. The settlement also resolves claims brought in 2019 under the qui tam, or whistleblower, provisions of the FCA by Andrew White, Mark Rosenberg and Ann Wegelin, who all previously worked for Rite Aid at various pharmacies. The FCA authorizes private parties to sue on behalf of the United States for false claims and share in any recovery, and permits the United States to take over the lawsuit, as it did here in part. The relators will receive 17% of the government’s FCA recovery in this matter.

In addition to the civil settlement, Rite Aid has entered into agreements with DEA and HHS-OIG to address its obligations going forward. Rite Aid and DEA entered a memorandum of agreement (MOA) designed to increase communication between the company, its retailers and DEA. Employees will receive additional training to help them identify illegitimate prescriptions and minimize the risk of drug diversion. The MOA also requires Rite Aid to create and keep materials relevant to DEA investigations for a minimum of five years. Rite Aid further commits to implementing and managing an anonymous hotline for employees, patients and the public to report suspected illegal dispensing of highly diverted controlled substances as well as suspected violations of the CSA. Rite Aid has also entered into a corporate integrity agreement (CIA) with HHS-OIG. The CIA includes a prescription claims drug review to have an Independent Review Organization to determine whether prescription drugs are properly prescribed, dispensed and billed.

The settlement was approved on June 28 by the bankruptcy court as part of Rite Aid’s plan of reorganization, which is expected to become effective later this summer. The amount the government will recover on its unsecured claim under the settlement will depend on the ultimate amount of assets available to the bankruptcy estate for distribution to unsecured creditors.

The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Ohio handled this matter. The DEA Cleveland Division, FBI Cleveland Field Office and HHS-OIG provided substantial assistance in the investigation.

Senior Trial Counsel Christopher Wilson of the Civil Division’s Fraud Section and Assistant U.S. Attorneys Patricia Fitzgerald, Elizabeth Berry and Kathryn Andrachik for the Northern District of Ohio handled the White matter. Assistant Director Mary Schmergel and Trial Attorneys Gregory Werkheiser and Ryan Lamb of the Civil Division’s Corporate/Financial Litigation Section are handling the Rite Aid bankruptcy.

Today’s settlement illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the HHS at 800-HHS-TIPS (800-447-8477).

The claims asserted against the defendants are allegations only. There has been no determination of liability.

TOLEDO – Jacques J. Eid, 56, of Perrysburg, Ohio, was sentenced to 30 months in prison by U.S. District Judge James G. Carr, after pleading guilty to filing false tax returns and wire fraud that defrauded educational and government entities. He was also fined $797,151.38 and ordered to pay restitution to the following: U.S. Department of Education, $14,760; Notre Dame Academy, $13,450; St. John’s Jesuit High School, $30,000; and the U.S. Department of Agriculture, $223,575.69.

Eid pleaded guilty to the offenses in court on March 1, 2024, where he admitted to filing false tax returns with the IRS by underreporting taxable income of nearly $880,000 earned as owner of a convenience store, Madison Market, and a restaurant, Le Pam Pam, in Toledo from 2012-2018. Before the district court-imposed sentence, Eid repaid all taxes and penalties owed to the IRS resulting from his tax offenses.

Eid also admitted falsifying his income on the U.S. Department of Education’s Free Application for Federal Student Aid, commonly known as FAFSA, for one of his children which was then used to determine aid packages at The University of Toledo and the University of Dayton. This resulted in fraudulently obtaining more than $11,000 in Pell Grants and $3,000 in Federal Supplemental Opportunity grants for college. Eid also falsified his income when seeking financial assistance for his children at two Toledo-area private schools, St. John’s Jesuit High School and Notre Dame Academy, ultimately receiving more than $40,000 collectively. His children would not have been entitled to receive financial aid if accurate income, assets, and net worth had been reported on applications.

“Eid lied on his tax returns to avoid paying the taxes he owed and to further another lie about his children needing financial aid,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio. “Falsifying financial need takes away from students who genuinely need the assistance for their education, and the defendant shamelessly scammed the system so that his own family could benefit at the expense of others.  Federal law enforcement agencies pay attention when persons lie about their finances, and we are pleased that the district court has held Eid accountable for his disgraceful conduct.”

Additionally, Eid admitted submitting a false application for his convenience store to become an authorized retailer for the U.S. Department of Agriculture’s SNAP Food Stamp Program. The application falsely stated that his spouse was the sole owner of the convenience store and that there were no other owners, even though Eid was the true owner of the business. He attempted to hide his ownership of the store so that it could accept food stamps. Eid was disqualified as a program retailer due to his prior conviction for seven counts of illegal use of food stamps or WIC program benefits in 2004. From 2008 to 2021 he operated Madison Market under the false pretense that he was not the owner. As a result of that misrepresentation, the store received more than $1 million in SNAP benefits which resulted in at least $220,000 in unlawful profits to the store.

This case was prosecuted by Assistant U.S. Attorney Gene Crawford for the Northern District of Ohio. The case was investigated by the Internal Revenue Service–Criminal Investigations, Department of Agriculture Office of Inspector General, and the Department of Education Office of Inspector General.

Shane Burdue, 46, of Toledo, Ohio, was sentenced to 14 months in prison by U.S. District Judge Jack Zouhary trafficking in counterfeit goods. He was also ordered to serve two years of supervised release and pay $4,081.50 in restitution to the Coalition to Advance Protection of Sports Logos (CAPS).

Burdue began receiving international shipments, which included counterfeit goods, in July 2014 according to court documents. Between 2014 and 2023 more than 800 international shipments, mostly from China, were destined for various addresses associated with Burdue in Toledo. Several of these shipments, which contained counterfeit goods, were seized by U.S. Customs and Border Protection. He also received numerous Cease-and-Desist letters from CAPS, which is an alliance that coordinates trademark protection and enforcement matters for collegiate and national sports teams.

Despite the parcel seizures and receipt of Cease-and-Desist letters from CAPS, Burdue continued to sell counterfeit merchandise at different physical locations in Toledo, as well as online through the social media platform Facebook. Several of his Facebook accounts were deactivated when it was discovered he was dealing in counterfeit goods. Each time an account was deactivated, Burdue would create a new account to resume selling counterfeit goods through Facebook. In May 2023, authorities seized hundreds of items of counterfeit sports merchandise from his business, “Shane's Man Cave,” during a search warrant execution in Toledo. Items seized included counterfeit caps, jerseys and footwear which totaled more than $29,000 in Manufacturer’s Suggested Retail Price. The counterfeit merchandise violated intellectual property rights from Nike, Major League Baseball, the National Basketball Association, and the National Football League.

According to the “2021 Review of Notorious Markets for Counterfeiting and Piracy,” counterfeit goods can pose safety hazards for both consumers and workers due to a lack of regulatory oversight. The counterfeit trade has also been linked to child labor, forced labor, and other criminal activity.

This case was investigated by Homeland Security Investigations and was prosecuted by Assistant United States Attorney Frank H. Spryszak.

Casey Alexander, 27, of London, England, was sentenced to three years of probation by U.S. District Judge Solomon Oliver, after pleading guilty to conspiracy to commit wire fraud.

Alexander was ordered to pay $202,195.58 in restitution for his role in the scam to the victim investors.

According to court documents, Alexander and others involved, engaged in a cold-calling scheme to target elderly investors throughout the United States. They used aggressive and deceptive tactics and promised large returns if the victims participated in wine and whiskey investments. They told victims that they could buy a portfolio of fine wines and whiskeys on their behalf, and then hold the purchase in a bonded warehouse located in Europe until sold for a profit.

Alexander and his team were able to convince the victims across the country to wire funds or make checks out to one or more suspect companies to participate in the investment opportunities. After the initial investments were made, victims were encouraged, and eventually convinced, to continue investing in order to secure larger returns.

In 2020, a victim’s son notified the Highland Heights Police Department (HHPD) to report the scam which defrauded the victim out of more than $300,000 over an 18-month period. HHPD then discovered similar complaints from others throughout the United States who reported being victims of a “wine scam” after being asked to purchase wine as an investment.

This case was investigated by the FBI.  To date, investigators have identified over 150 victims within the United States who collectively invested more than $13 million in the wine and whiskey fraud scheme.

This case was prosecuted by Assistant United States Attorney Brian McDonough for the Northern District of Ohio.

The investigation and prosecution of this case is in response to the Elder Justice Initiative Program originating from the Elder Abuse Prevention and Prosecution Act of 2017 (EAPPA). The mission of the EAPPA and Elder Justice Initiative is to support and coordinate the Department of Justice’s enforcement efforts to combat elder abuse, neglect, financial fraud, and scams that target the nation’s elderly population.

If you observe something that you believe might be fraudulent conduct involving an older adult, contact the dedicated National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311 and visit the FBI’s IC3 Elder Fraud Complaint Center at IC3.gov to report it.

Related Links:

U.S. Attorney's Office Recognizes Elder Abuse Awareness Month

Public Service Announcement from U.S. Attorney Lutzko

Stay Aware of the Latest Scams

Alongside state and local law enforcement partners in Cleveland, Attorney General Merrick B. Garland, Director Steven Dettelbach of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio announced the opening of a new Northeast Ohio Crime Gun Intelligence Center (CGIC) in Cleveland.

“The Northeast Ohio Crime Gun Intelligence Center will allow us to leverage our partnerships and technological innovation to solve gun crimes and to save lives,” said Attorney General Garland. “When it comes to investigating gun crimes, every day matters. Every day, another lead can run dry. Every day, a repeat shooter may shatter another family and another community. With this CGIC, it does not matter if a crime is committed in a city, a suburb, or a rural area. The law enforcement officers who investigate will have cutting-edge technology at their fingertips and a lineup of experts ready to assist.”

“Following on the success of last year’s intelligence-driven gun crime initiative, this Crime Gun Intelligence Center puts in the same room analysts, agents, cops, deputies, and both federal and state prosecutors,” said ATF Director Dettelbach. “They work together on the same cases using real time, state-of-the-art intelligence. Every morning, they review key evidence from the previous night’s shootings to identify the shooters. CGICs like this make homicide cases. CGICs like this stop the next shooting. And CGICs like this help stop the crime guns that are getting to the shooters. I want to commend the ATF Cleveland leadership and the many law enforcement agencies working together under one roof with a focus on real-time ballistics testing and crime gun tracing. I also want to thank the leadership here for coming together to protect Ohioans. Mayor Bibb, Attorney General Yost, County Executive Ronayne, Mayor Malik, and Governor DeWine have all supported a law enforcement presence in this CGIC. Without all of them, this CGIC does not happen. This level of partnership is truly exceptional. Chalk one up for the good guys in Ohio.”

CGICs are centralized law enforcement hubs that focus exclusively on investigating and preventing gun violence in local communities. They use cutting-edge technologies, including ATF’s National Integrated Ballistic Information Network (NIBIN) and eTrace systems, to rapidly develop and pursue investigative leads in order to drive case clearance rates up — which in turn can help drive violent crime rates down. They bring together, under one roof, the expertise of firearm evidence examiners, intelligence analysts, and investigators to rapidly collect, analyze, and share information about guns used in violent crimes. In total, ATF operates more than 60 CGICs nationwide.

“Prosecuting and preventing violent crime throughout our district is one core mission of the United States Attorney’s Office. And investigative data shows that the same guns are often used to commit multiple, different instances of violent crimes, without regard to city or county lines,” said U.S. Attorney Lutzko. “That is why we most effectively combat violent crime — and the illegal firearms trafficking that supports it — through strong regional partnerships, collaboration, and technology. The incredible capabilities of the Crime Gun Intelligence Center — and the federal, state, and local partnerships that make it possible — allow us to connect the dots between crimes so we can prosecute, convict, and lock up the bad actors who commit violent crimes and remove “crime guns” from the streets faster, so neither continue to endanger innocent people in neighborhoods throughout Northern Ohio.”

“ATF has long worked with our partners in the Cleveland area to reduce violent crime, including the use of NIBIN and other intelligence tools,” stated Daryl McCormick, Special Agent in Charge of ATF’s Columbus Field Division. “This CGIC represents both a broadening and deepening of that cooperation and commitment. We are broadening this intelligence approach to a regional level, recognizing that those perpetrating violence don’t respect civic boundaries. In addition, we are all committing to the timely and comprehensive entry of information, and the analysis and use of these intelligence tools, to ensure that every CGIC participating agency has the information that may provide investigative leads as quickly as possible. I firmly believe that this effort will help us identify, investigate, and prosecute those individuals who are harming our communities.”

The Northeast Ohio CGIC is the first CGIC located within an Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force, which not only supports the use of Crime Gun Intelligence (GCI) but also applies proactive investigative work and incorporates the use of OCDETF funds and resources. The CGIC was designed to execute a two-pronged approach: an intelligence component, led by ATF, and an investigative component, led by Ohio High Intensity Drug Trafficking Areas program (HIDTA).

Over 30 agencies across federal, state, and local law enforcement are partners in this new CGIC, focusing on real-time comprehensive ballistics testing and firearms tracing, two of ATF’s fundamental pillars of Crime Gun Intelligence. Federal and state prosecutors are included as participants to ensure the charging process is timely and effective. The Northeast Ohio CGIC partners include ATF, the U.S. Attorney’s Office for the Northern District of Ohio, Cleveland Division of Police, Cuyahoga County Prosecutor’s Office, Cuyahoga County Sheriff’s Office, Ohio HIDTA, Ohio Narcotics Intelligence Center, Ohio Bureau of Criminal Investigation, Northeast Ohio Regional Fusion Center, Garfield Heights Police Department, Lakewood Police Department, Lorain Police Department, Ohio State Highway Patrol, Ohio Investigative Unit, and the Ohio Department of Rehabilitation and Correction/Ohio Adult Parole Authority. Six additional agencies support the CGIC but are located with ATF’s Akron and/or Canton Task Forces: Akron Police Department, Barberton Police Department, Canton Police Department, Portage County Sheriff’s Office, Summit County Sheriff’s Office, and the University of Akron Police Department. Nine additional agencies have designated a liaison to support the CGIC: Elyria Police Department, Euclid Police Department, Lake County Sheriff’s Office, Lorain County Sheriff’s Office, Maple Heights Police Department, Medina City Police Department, Medina County Sheriff’s Office, Solon Police Department, and Willoughby Police Department. Additionally, four federal agencies support the CGIC through their participation at the OCEDTF Strike Force: Homeland Security Investigations, Drug Enforcement Administration, FBI, and the U.S. Marshal’s Service.

Click Here to View the Press Conference

Alongside state and local law enforcement partners in Cleveland, Attorney General Merrick B. Garland, Director Steven Dettelbach of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio today announced the opening of a new Northeast Ohio Crime Gun Intelligence Center (CGIC) in Cleveland.

“The Northeast Ohio Crime Gun Intelligence Center will allow us to leverage our partnerships and technological innovation to solve gun crimes and to save lives,” said Attorney General Garland. “When it comes to investigating gun crimes, every day matters. Every day, another lead can run dry. Every day, a repeat shooter may shatter another family and another community. With this CGIC, it does not matter if a crime is committed in a city, a suburb, or a rural area. The law enforcement officers who investigate will have cutting-edge technology at their fingertips and a lineup of experts ready to assist.”

“Following on the success of last year’s intelligence-driven gun crime initiative, this Crime Gun Intelligence Center puts in the same room analysts, agents, cops, deputies, and both federal and state prosecutors,” said ATF Director Dettelbach. “They work together on the same cases using real time, state-of-the-art intelligence. Every morning, they review key evidence from the previous night’s shootings to identify the shooters. CGICs like this make homicide cases. CGICs like this stop the next shooting. And CGICs like this help stop the crime guns that are getting to the shooters. I want to commend the ATF Cleveland leadership and the many law enforcement agencies working together under one roof with a focus on real-time ballistics testing and crime gun tracing. I also want to thank the leadership here for coming together to protect Ohioans. Mayor Bibb, Attorney General Yost, County Executive Ronayne, Mayor Malik, and Governor DeWine have all supported a law enforcement presence in this CGIC. Without all of them, this CGIC does not happen. This level of partnership is truly exceptional. Chalk one up for the good guys in Ohio.”

CGICs are centralized law enforcement hubs that focus exclusively on investigating and preventing gun violence in local communities. They use cutting-edge technologies, including ATF’s National Integrated Ballistic Information Network (NIBIN) and eTrace systems, to rapidly develop and pursue investigative leads in order to drive case clearance rates up — which in turn can help drive violent crime rates down. They bring together, under one roof, the expertise of firearm evidence examiners, intelligence analysts, and investigators to rapidly collect, analyze, and share information about guns used in violent crimes. In total, ATF operates more than 60 CGICs nationwide.

“Prosecuting and preventing violent crime throughout our district is one core mission of the United States Attorney’s Office. And investigative data shows that the same guns are often used to commit multiple, different instances of violent crimes, without regard to city or county lines,” said U.S. Attorney Lutzko. “That is why we most effectively combat violent crime — and the illegal firearms trafficking that supports it — through strong regional partnerships, collaboration, and technology. The incredible capabilities of the Crime Gun Intelligence Center — and the federal, state, and local partnerships that make it possible — allow us to connect the dots between crimes so we can prosecute, convict, and lock up the bad actors who commit violent crimes and remove “crime guns” from the streets faster, so neither continue to endanger innocent people in neighborhoods throughout Northern Ohio.”

“ATF has long worked with our partners in the Cleveland area to reduce violent crime, including the use of NIBIN and other intelligence tools,” stated Daryl McCormick, Special Agent in Charge of ATF’s Columbus Field Division. “This CGIC represents both a broadening and deepening of that cooperation and commitment. We are broadening this intelligence approach to a regional level, recognizing that those perpetrating violence don’t respect civic boundaries. In addition, we are all committing to the timely and comprehensive entry of information, and the analysis and use of these intelligence tools, to ensure that every CGIC participating agency has the information that may provide investigative leads as quickly as possible. I firmly believe that this effort will help us identify, investigate, and prosecute those individuals who are harming our communities.”

The Northeast Ohio CGIC is the first CGIC located within an Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force, which not only supports the use of Crime Gun Intelligence (GCI) but also applies proactive investigative work and incorporates the use of OCDETF funds and resources. The CGIC was designed to execute a two-pronged approach: an intelligence component, led by ATF, and an investigative component, led by Ohio High Intensity Drug Trafficking Areas program (HIDTA).

Over 30 agencies across federal, state, and local law enforcement are partners in this new CGIC, focusing on real-time comprehensive ballistics testing and firearms tracing, two of ATF’s fundamental pillars of Crime Gun Intelligence. Federal and state prosecutors are included as participants to ensure the charging process is timely and effective. The Northeast Ohio CGIC partners include ATF, the U.S. Attorney’s Office for the Northern District of Ohio, Cleveland Division of Police, Cuyahoga County Prosecutor’s Office, Cuyahoga County Sherrif’s Office, Ohio HIDTA, Ohio Narcotics Intelligence Center, Ohio Breau of Criminal Investigation, Northeast Ohio Regional Fusion Center, Garfield Heights Police Department, Lakewood Police Department, Lorain Police Department, Ohio State Highway Patrol, Ohio Investigative Unit, and the Ohio Department of Rehabilitation and Correction/Ohio Adult Parole Authority. Six additional agencies support the CGIC but are located with ATF’s Akron and/or Canton Task Forces: Akron Police Department, Barberton Police Department, Canton Police Department, Portage County Sheriff’s Office, Summit County Sheriff’s Office, and the University of Akron Police Department. Nine additional agencies have designated a liaison to support the CGIC: Elyria Police Department, Euclid Police Department, Lake County Sheriff’s Office, Lorain County Sheriff’s Office, Maple Heights Police Department, Medina City Police Department, Medina County Sheriff’s Office, Solon Police Department, and Willoughby Police Department. Additionally, four federal agencies support the CGIC through their participation at the OCEDTF Strike Force: Homeland Security Investigations, Drug Enforcement Administration, FBI, and the U.S. Marshal’s Service.

A federal grand jury has returned a three-count indictment charging Amihr Curtis, 23, Zenesto Martin, Jr., 25, and Christian Proby, 25, all of Lima, Ohio, with interference of commerce by robbery, robbery of mail, money, or other property of the United States, and stealing keys used by the Postal Service for the deposit of mail. The violations allegedly took place in November 2023, in Lima, Ohio, while a United States Postal Service letter carrier was on a delivery route. Curtis and Martin, Jr., were also indicted for one count of mail theft.

If convicted, the defendants’ sentence will be determined by the Court after review of factors unique to this case, including the prior criminal record, if any, the defendants’ role in the offenses, and the characteristics of the violation.  In all cases, the sentence will not exceed the statutory maximum and in most cases, it will be less than the maximum.          

Sentencing for all three defendants is scheduled for June 20, 2025.

The investigation preceding the indictment was a collaborative effort conducted by the United States Postal Inspection Service and the Lima Police Department.

The case is being prosecuted by Assistant United States Attorney Frank H. Spryszak.

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

The Postal Inspection Service is the federal agency with jurisdiction for investigating crimes against postal carriers and crimes involving the U.S. Mail. Anyone having information about blue collection box thefts or thefts or attempted thefts of mail carriers or mail should contact USPIS at 1-877-876-2455. All information will be kept confidential.

Update Feb. 21, 2025: 

Addition of sentencing date

The Justice Department announced today that Joseph Pedaline and YLP LLC, who owned and managed residential rental properties in Youngstown, Ohio, have agreed to pay $199,000 to resolve a lawsuit alleging that they violated the Fair Housing Act. The department’s lawsuit alleged that Joseph Pedaline sexually harassed female tenants from at least 2009 to at least 2020, and that YLP LLC was liable for Pedaline’s conduct during the period in which it owned and managed the properties. 

“No one should ever have to fear sexual harassment when they sign a lease, pay their rent or simply spend time in their home,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Landlords who sexually harass tenants violate the Fair Housing Act, and the Justice Department will continue to hold landlords accountable for this egregious conduct.”

“This consent decree bars Pedaline from ever again having the ability to rent property to others, and thus prevents him from ever again subjecting Ohio tenants to sexual harassment and discrimination in return for a place to live,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “This resolution should serve as a strong reminder to all landlords that they must comply with all aspects of the Fair Housing Act and may not engage in discriminatory behavior that violates the security, safety and wellbeing of their tenants.”

Under the consent decree entered by the U.S. District Court for the Northern District of Ohio, Pedaline and YLP LLC must pay $189,000 to former tenants harmed by Pedaline’s discriminatory conduct and must pay a $10,000 civil penalty to the federal government. Pedaline and YLP LLC must also take steps to vacate any adverse judgments and repair the credit of tenants who were evicted after refusing Pedaline’s advances. The consent decree also bars future discrimination, permanently bars Pedaline from managing residential rental properties, mandates Fair Housing Act training and requires reporting regarding compliance with the consent decree’s terms.

The department’s lawsuit alleged that Joseph Pedaline subjected multiple female tenants to sexual harassment. According to the complaint, Pedaline subjected tenants to unwelcome sexual comments, entered the homes of female tenants without their consent, touched female tenants without their consent, offered to excuse late or unpaid rent in exchange for sexual acts and took adverse housing-related actions against female tenants who refused his sexual advances. The department’s complaint also alleged that YLP LLC was liable for Pedaline’s discriminatory conduct while it owned and managed the rental properties.

Individuals who may have been victims of sexual harassment at rental dwellings owned or managed by Joseph Pedaline or YLP LLC can email Youngstown.Community@usdoj.gov or call 1-833-591-0291 (press 1 for English, press 2 for sexual harassment and then press 01 for United States v. Joseph Pedaline to leave a message).

If you are a victim of sexual harassment by another landlord or have suffered other forms of housing discrimination, call the Justice Department’s Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at fairhousing@usdoj.gov or submit a report online. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.

Reports may also may be made by contacting the Department of Housing and Urban Development at 1-800-669-9777 or by filing a complaint online.

The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorneys’ Offices across the country. The initiative seeks to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers and other people who have control over housing. Since launching the initiative in October 2017, the department has filed 42 lawsuits alleging sexual harassment in housing and recovered nearly $17 million for victims of such harassment.

Rebecca C. Lutzko, U.S. Attorney for the Northern District of Ohio, joins national, state, and local leaders in recognizing June 15, 2024, as World Elder Abuse Awareness Day.  Since 2006, leaders and organizations around the world have commemorated this day to promote awareness and increase understanding of the many forms of elder abuse and the resources available to those at risk.

Highlighting the partnership between law enforcement and the public, U.S. Attorney Lutzko emphasized the importance of awareness and education.

“Elder abuse often takes the form of fraud.  Together with our law enforcement partners, we aggressively investigate and prosecute individuals, organizations, and networks who lie to older adults in our community, attempting to steal money from them through a scam,” said U.S. Attorney Lutzko.  “Every day, more and more scammers pretend to call or email from a government entity or well-known business and attempt to obtain personal identity and financial information from older adults and others, which they then use to commit financial crimes.  We hope that by bringing awareness to this issue, more of us will look out for our family and friends who might be the target of such a crime, and report it to federal, state, or local authorities.”

Elder abuse is an act that knowingly, intentionally, or negligently causes or creates a serious risk of harm to an older person by a family member, caregiver, or other person who is in or creates a trust relationship.  Such harm may be financial, physical, sexual, or psychological.  The Justice Department maintains a variety of programs and initiatives to combat elder abuse.

The Justice Department’s Transnational Elder Fraud Strike Force includes federal and state agencies that work together to investigate and prosecute foreign-based schemes that target older Americans.  This initiative also provides the public with information to guard against both traditional scams, like tech-support fraud, as well as trending schemes, such as romance scams.

Some fraudsters take a different tack in abusing older adults, using them as unwitting money mules to move the proceeds of illegal activity that they have already committed.  Preying on the good will or financial vulnerability of their targets, scammers recruit people, many times older victims, to participate in schemes to move money from the scammers' crimes, in ways that avoid notice.  Scammers might recruit people to act as money mules through online job ads or social media postings, seeking people to send or receive money or packages, or to open accounts and forward money.  The Justice Department’s Money Mule Initiative identifies and addresses this type of activity to disrupt these fraud schemes, and helps people learn how to recognize the signs of suspicious activity.

The U.S. Attorney’s Office for the Northern District of Ohio continues to work with federal, state, and local law enforcement partners to investigate and prosecute elder-abuse crimes that touch our District.  Most recently, the Office prosecuted a case in which two men ran a “grandparent scam” where they pretended to be a relative, or an attorney for a relative, and claimed that the family member needed money for bail to get out of jail.  This scheme caused the victims a combined loss of more than $383,932.  In another case, a lottery scheme took more than $260,000 from older adults. The fraudsters contacted people by mail or phone and told them that they had won a lottery or sweepstakes.  But they required the victims to pay upfront fees or taxes to claim the purported “prize.”  In yet another instance, the Office prosecuted a woman for forging the victim’s signature on a power of attorney form so she could take money from the victim’s financial accounts.  In each case, these fraudsters caused older adults and their families financial loss and emotional turmoil.

To help older individuals and their families identify and avoid fraudulent activity, the Justice Department provides periodic Senior Scam Alerts with information about the tactics used in specific schemes.   For example, in Social Security Administration Impostor schemes, scammers impersonate government administrators and tell victims that there has been suspicious activity in connection with their social security account, or that their account is suspended, and claim that the victim must provide their Social Security number for confirmation.  In Tech Support scams, fraudsters contact victims, sometimes through internet pop-up messages, to warn about non-existent computer problems.  They then ask that the victim give them remote access to their computer and the fraudster will lie and say their computer has a problem, and then demand large sums of money for unnecessary services to fix the “problem.”  In Lottery scams, telemarketers falsely notify victims that they have won a sweepstakes and tell them they must first pay fees for shipping, insurance, customs duties, or taxes before they can claim their prizes.

To learn more about the Department’s elder-justice efforts, please visit the Elder Justice Initiative page.

In addition, representatives of the U.S. Attorney’s Office for the Northern District of Ohio periodically speak about elder-fraud issues at community presentations throughout northern Ohio.  If an organization is interested in coordinating such a presentation, they can contact the U.S. Attorney’s Office at (216) 622-3600 or at usaohn.contact@usdoj.gov.

Finally, if you observe something that you believe might be fraudulent conduct involving an older adult, contact the dedicated National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311 and visit the FBI’s IC3 Elder Fraud Complaint Center at IC3.gov to report it.

TOLEDO - Lucas Russell Vanwoert, 27, of Celina, Ohio, was sentenced to 97 months (more than eight years) in prison by U.S. District Judge James R. Knepp, II for possession and transportation of child pornography, transportation of obscene materials and creating an animal crush video. Vanwoert was additionally ordered to serve 15 years of supervised release, required to register as a sex offender, and is prohibited from owning or possessing a pet in the future.

Vanwoert created an animal crush video in 2022 with intent to distribute according to court documents. An animal crush video is defined as any photograph, motion picture, film, video or digital recording, or electronic image that depicts actual conduct in which one or more living non-human mammals, birds, reptiles, or amphibians is intentionally crushed, burned, drowned, suffocated, impaled, or otherwise subjected to serious bodily injury, or bestiality and is obscene.

Authorities seized three severely emaciated dogs that Vanwoert was abusing, and one recently deceased dog in the backyard of the residence. Authorities also seized several electronic devices that were found to contain videos of child pornography, which involved prepubescent children, as well as animal crush videos, as part of an executed search warrant at Vanwoert’s residence in Celina. At least one of Vanwoert’s dogs was used to create the animal crush videos.

Homeland Security Investigations Agent Jason Guyton was the lead investigator. This case was prosecuted by Assistant United States Attorneys Sara Al-Sorghali and Michelle M. Baeppler.

The Justice Department and Environmental Protection Agency (EPA) announced a settlement valued at over $310 million with Norfolk Southern Railway Company holding the company accountable to address and pay for the damage caused by the Feb. 3, 2023, train derailment in East Palestine, Ohio. If the settlement is approved by the U.S. District Court for the Northern District of Ohio, Norfolk Southern will be required to take measures to improve rail safety, pay for health monitoring and mental health services for the surrounding communities, fund long-term environmental monitoring, pay a $15 million civil penalty and take other actions to protect nearby waterways and drinking water resources.

Together with other response costs and rail safety enhancements, Norfolk Southern estimates that it will spend more than $1 billion to address the contamination and other harms caused by the East Palestine derailment and improve rail safety and operations.

In the hours following the derailment, EPA personnel arrived on site and they have remained there to ensure that the people of East Palestine are protected and have the most up-to-date information. In those early days, EPA Administrator Michael S. Regan promised that Norfolk Southern would be held accountable for its actions. Since then, as EPA and the Justice Department pursued a strong enforcement action to deliver on that commitment, EPA has continued to stay engaged in the community, directing cleanup activities, collecting air, water and soil samples and participating in community meetings. The Administration has led a robust, multi-agency effort – including the Department of Transportation, the Federal Emergency Management Agency and the Department of Health and Human Services – to fulfill the President’s commitment to “supporting the people of East Palestine and all those affected in surrounding areas of Ohio and Pennsylvania every step of the way.”

“The President issued an executive order which promised to address the disaster’s long-term effects and to hold Norfolk Southern responsible for its train derailing and the burning of hazardous chemicals in East Palestine. This settlement helps fulfill that promise,” said Acting Associate Attorney General Benjamin C. Mizer. “Importantly, those who will most directly benefit from this settlement are those who were most directly affected by the disaster. And the rail safety commitments will help prevent future catastrophic railway events.”

“No community should have to experience the trauma inflicted upon the residents of East Palestine,” said EPA Administrator Michael S. Regan. “That’s why President Biden pledged from the beginning that his Administration would stand with the community every step of the way. Today’s enforcement action delivers on this commitment, ensures the cleanup is paid for by the company, and helps prevent another disaster like this from happening again. Because of this settlement, residents and first responders will have greater access to health services, trains will be safer, and waterways will be cleaner.”

“The human cost from the Norfolk Southern train derailment disaster was high and continues today,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “That is why we worked to include funding in this agreement for a community health program. Notably, this settlement also secures significant resources to complete cleanup in and around East Palestine as well as measures to detect and address potential rail safety risks.”

“Norfolk Southern’s train derailment and massive chemical spill onto East Palestine’s grounds and into its waterways jeopardized the safety and health of residents, damaging their homes, their lives, and the environment,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “That is why the Department of Justice diligently worked to hold Norfolk Southern responsible for this disaster by quickly filing suit and negotiating a resolution that protects residents’ interests.  This settlement requires Norfolk Southern to fund a community health program that monitors and treats individual medical needs stemming from the disaster.  It also requires the company to fund the clean-up efforts, to restore the region’s waterways and habitats, and to monitor the drinking water system to ensure it is safe.  And it requires them to implement numerous additional safety measures throughout the United States in an effort to prevent another railway community from suffering losses like those East Palestine experienced.  While these remedies cannot fully address the impact of this disaster, they are a positive step toward healing and recovery.”

Today’s settlement follows a complaint filed by the United States against Norfolk Southern in March 2023 for unlawful discharges of pollutants and hazardous substances caused by the train derailment. In February 2023, EPA issued a unilateral administrative order, holding Norfolk Southern accountable for the damage done to the community. The order required cleanup of spilled substances and impacted soils, as well as payment of all costs to the U.S. government. EPA also issued an order under the Clean Water Act to clean up oil spilled into the surrounding waterways. Since then, EPA has been directing and overseeing the extensive cleanup activities.

In total, Norfolk Southern estimates that it will spend more than $1 billion to address the contamination caused by the East Palestine derailment and improve rail safety and operations. The amount includes this settlement with the United States valued at over $310 million, as well as around $780 million in environmental response costs incurred by Norfolk Southern. Norfolk Southern has estimated its costs since the derailment will exceed $200 million in rail safety enhancements, including those required by this settlement.

To help ensure that no community goes through what East Palestine residents have faced, the settlement also requires Norfolk Southern to improve coordination with government officials and other stakeholders during emergency responses. Specifically, Norfolk Southern will create and adopt a procedure for coordinating with first responders and government officials, where appropriate, before restoring and reopening tracks for use after a derailment involving spilled hazardous material. Norfolk Southern will also create and adopt a procedure for coordinating with government officials and other stakeholders in advance of any vent and burn proposed by the company.

Under the settlement, Norfolk Southern has agreed to:

• Spend an estimated $235 million for all past and future cleanup costs, so that cleanup efforts can continue and the company, rather than taxpayers, covers the cost.
• Pay $25 million for a 20-year community health program that includes medical monitoring for qualified individuals, mental health services for individuals residing in affected counties as well as first responders who worked at the site, and a community facilitation plan to assist community members in using the benefits of the program.
• Spend approximately $15 million to implement long-term monitoring of groundwater and surface water for a period of 10 years.
• Pay $15 million for a private drinking water monitoring fund that will continue the existing private drinking water well monitoring program for 10 years.
• Implement a “waterways remediation plan,” with an estimated budget of $6 million, for projects in Leslie Run and Sulphur Run that will prioritize addressing historical pollution, reducing non-point source pollution through infrastructure upgrades and stormwater management projects and restoring aquatic and riparian habitat.
• Pay a $15 million civil penalty to resolve the alleged violations of the Clean Water Act
• Pay $175,000 for natural resource damages, to be used by the United States to restore, rehabilitate, replace or acquire the equivalent of the natural resources injured as a result of the derailment.

In addition, the consent decree requires Norfolk Southern to undertake projects to improve the safety of transporting hazardous materials by rail, which will include installation of additional devices to detect overheated wheel bearings early enough to prevent derailments like the one that happened in East Palestine. All told, Norfolk Southern has estimated its costs dating from the derailment will exceed $200 million in rail safety enhancements.

The proposed settlement was lodged in the U.S. District Court for the Northern District of Ohio by the Environmental Enforcement Section of the Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Northern District of Ohio. It is subject to a minimum 30-day public comment period and final court approval. The details of today’s settlement are available on the Justice Department’s website: www.justice.gov/enrd/consent-decrees.

Additional Background

EPA is committed to protecting the health and safety of East Palestine and surrounding communities. EPA personnel have been on site since the initial hours of the train derailment, and the agency continues to provide residents the most up-to-date information via the website, welcome center, community meetings, newsletters and more.

Immediately following the train derailment, EPA established a 24/7 air monitoring and sampling network. EPA also began coordinating with state and local officials to monitor environmental impacts on the community. Over the course of the response, EPA has collected over 115 million air monitoring data points and over 45,000 air, water and soil samples, giving the agency confidence in the safety of air, water and soil in the community. Since the evacuation was lifted, no sustained chemicals of concern have been found in the air.

To date, more than 177,000 tons of contaminated soil and more than 69 million gallons of wastewater have been removed from the community and work continues to remove contamination from area creeks and soil sampling at the derailment site to ensure all contamination has been remediated.

The Justice Department filed a federal lawsuit today in the Northern District of Ohio against two organizations and seven individuals for violating the Freedom of Access to Clinic Entrances (FACE) Act. The FACE Act prohibits anyone from using force, threats of force or physical obstruction against any person because they are seeking or providing reproductive health services.

The complaint alleges that the defendants, two organizations – Citizens for a Pro Life Society and Red Rose Rescue – and seven individuals – Laura Gies, Lauren Handy, Clara McDonald, Monica Miller, Christopher Moscinski, Jay Smith and Audrey Whipple – violated the FACE Act on June 4 and 5, 2021, by engaging in physical obstruction at two Ohio reproductive health facilities to prevent the facilities from providing, and patients from receiving, reproductive health care services. The complaint seeks compensatory damages, monetary penalties and injunctive relief as provided by the FACE Act.

“Obstructing people from accessing reproductive health care and physically obstructing providers from offering it are unlawful,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Congress passed the FACE Act 30 years ago this month in response to acts of violence, threats of violence and physical obstruction at reproductive health clinics in our country. The Civil Rights Division is committed to enforcing federal law to protect the rights of those who seek and those who provide access to reproductive health services.” 

“Federal and state laws protect access to reproductive health care services,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Individuals have the right to access facilities in Ohio to make decisions about their own bodies, health and futures, in consultation with health care providers, free from force, threats of force, intimidation or physical obstruction. Our office remains committed to enforcing the FACE Act to protect these important rights of both individuals and providers, whether or not the services provided include abortion care options, as they do here. We encourage anyone with information about potential FACE Act violations to contact our office.”

The Civil Rights Division's Special Litigation Section and the U.S. Attorney’s Office for the Northern District of Ohio are handling the case.

Civil rights complaints can be submitted online at civilrights.justice.gov.

Anyone in imminent danger should call 911 or local police. Contact your local FBI field office by calling 1-800-CALL-FBI (or 1-800-225-5324) or via tips.fbi.gov.

Anyone in the Northern District of Ohio may report potential FACE Act or other civil rights violations by calling the Civil Rights Hotline at 855-365-2485.

The Justice Department filed a federal lawsuit today in the Northern District of Ohio against two organizations and seven individuals for violating the Freedom of Access to Clinic Entrances (FACE) Act. The FACE Act prohibits anyone from using force, threats of force or physical obstruction against any person because they are seeking or providing reproductive health services.

The complaint alleges that the defendants, two organizations – Citizens for a Pro Life Society and Red Rose Rescue – and seven individuals – Laura Gies, Lauren Handy, Clara McDonald, Monica Miller, Christopher Moscinski, Jay Smith and Audrey Whipple – violated the FACE Act on June 4 and 5, 2021, by engaging in physical obstruction at two Ohio reproductive health facilities to prevent the facilities from providing, and patients from receiving, reproductive health care services. The complaint seeks compensatory damages, monetary penalties and injunctive relief as provided by the FACE Act.

“Obstructing people from accessing reproductive health care and physically obstructing providers from offering it are unlawful,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Congress passed the FACE Act 30 years ago this month in response to acts of violence, threats of violence and physical obstruction at reproductive health clinics in our country. The Civil Rights Division is committed to enforcing federal law to protect the rights of those who seek and those who provide access to reproductive health services.” 

“Federal and state laws protect access to reproductive health care services,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Individuals have the right to access facilities in Ohio to make decisions about their own bodies, health and futures, in consultation with health care providers, free from force, threats of force, intimidation or physical obstruction. Our office remains committed to enforcing the FACE Act to protect these important rights of both individuals and providers, whether or not the services provided include abortion care options, as they do here. We encourage anyone with information about potential FACE Act violations to contact our office.”

The Civil Rights Division's Special Litigation Section and the U.S. Attorney’s Office for the Northern District of Ohio are handling the case.

Civil rights complaints can be submitted online at civilrights.justice.gov.

Anyone in imminent danger should call 911 or local police. Contact your local FBI field office by calling 1-800-CALL-FBI (or 1-800-225-5324) or via tips.fbi.gov.

Anyone in the Northern District of Ohio may report potential FACE Act or other civil rights violations by calling the Civil Rights Hotline at 855-365-2485.

The Cleveland Clinic Foundation (CCF) has agreed to pay $7,600,000 to resolve allegations that it violated the False Claims Act (FCA) by submitting to the National Institutes of Health (NIH) federal grant applications and progress reports in which CCF failed to disclose that a key employee involved in administering the grants had pending and/or active financial research support from other sources.

The settlement resolves allegations that CCF made false statements to NIH, a component of the Department of Health and Human Services (HHS), in connection with three federal grant awards. Despite NIH requirements to do so, CCF repeatedly failed to disclose that the employee who it designated as the Principal Investigator on each grant had pending and/or active grants from foreign institutions that provided financial assistance to support the employee’s research and already obligated that employee’s research time. CCF falsely certified that the grants submissions were true and accurate.

NIH requires full transparency in applications and throughout the life of the grants it awards. This includes a requirement that grant applicants disclose all sources of research support, from any source, on grant applications and on follow-up documents relating to grant awards. NIH uses this information to determine if the applicant has the time necessary to allocate to the proposed research project, and if the research proposal has other sources of funding that are duplicative. It also assists NIH in determining if an applicant’s financial interests may affect its objectivity in conducting research.

The settlement also resolves allegations that CCF violated NIH password policies by permitting CCF employees to share passwords. Some of the false submissions wherein CCF failed to disclose the Principal Investigator’s foreign grant support were made by CCF employees who were inappropriately given access to NIH’s online grant reporting platform.

“Each year, NIH awards federal grants to support research to improve public health, but those funds are limited and the grant process is competitive. Every entity or person who seeks such grant money must strictly play by the rules. As stewards of taxpayer dollars, our Office takes seriously its responsibility of ensuring that grant recipients fully and accurately report all required information to NIH so that it may properly award its limited funds to deserving institutions,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Today’s settlement illustrates the importance of being truthful at every stage of the grants process.”

In addition to the $7.6 million settlement, NIH has imposed Specific Award Conditions on all CCF’s grants for a one-year period. Federal regulations allow NIH to impose Specific Award Conditions on grant recipients, including on recipients that do not comply with the terms of a federal award. In this case, NIH is requiring a high-level CCF employee to personally attest to the truth, completeness, and accuracy of all “other grant support” information CCF provides to NIH. CCF must also develop a corrective action plan that includes an assessment of internal controls related to other grant support and foreign-component reporting; create a mandatory training program addressing requirements for disclosing other grant support, research security, and cyber security; and develop an improvement plan for its internal controls, ensuring that CCF has oversight at the institutional level to confirm that the information its Principal Investigators disclose is true, complete, and accurate, among other requirements. The Specific Award Conditions will begin Oct. 1, 2024, and remain in effect through Sept. 30, 2025, or until NIH is satisfied that CCF has successfully completed the Corrective Action Plan.

“The accuracy of information reported in applications and other documentation related to federal grants is critical to ensuring that these limited funds are utilized in the most efficient and effective manner and that the integrity of the application process is upheld,” said Special Agent in Charge Mario M. Pinto, of the United States Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our agency is committed to ensuring that those who submit false statements in grant applications are identified and investigated, in cooperation with our federal law enforcement partners.”

A cooperative effort between HHS-OIG, the FBI, and the U.S. Attorney’s Office for the Northern District of Ohio resulted in the resolution obtained in this matter. Assistant United States Attorneys Michelle Heyer and Elizabeth Berry investigated the matter on behalf of the U.S. Attorney’s Office.

This settlement illustrates the government’s emphasis on combating fraud. If you have information regarding potential fraud, waste, abuse, or mismanagement in the U.S. Department of Health and Human Services’ programs, please file a report with OIG's Hotline. You can submit your tip or complaint online at https://oig.hhs.gov/fraud/report-fraud/ or contact the OIG Hotline at 1-800-447-8477. The claims resolved by the settlement are allegations only and there has been no determination of liability.

CLEVELAND – A federal grand jury has returned a 17-count indictment charging Yue Cao, 34, of Winfield, Illinois, accusing him of bank fraud, aggravated identity theft, and engaging in monetary transactions in criminally derived property in connection with a scheme to steal funds from identity theft victims’ accounts at the bank where he worked.

According to the indictment, from between approximately May 2022 to April 2023, Cao allegedly engaged in a scheme to defraud the Ohio-based bank where he worked, and its customers, by transferring funds from those customers’ accounts to ones that Cao controlled, including accounts he had established in the customers’ names, all without their knowledge or authorization. He diverted the money stolen from the customer accounts for his personal use.

Cao was a quantitative modeling analyst at the bank and used his position to locate customers who had not yet enrolled in online banking services, primarily targeting elderly customers as identity theft victims. Without the victims’ knowledge, Cao created email addresses in their names and enrolled their accounts in online banking without their knowledge. By setting up online banking, he both obtained control of the victims’ accounts and ensured that bank statements and other notices about the accounts would be sent to the email addresses he controlled. Cao then used the victims’ personal identifying information to open unauthorized bank accounts and brokerage accounts in their names. Cao used his control of these accounts to set up at least $2.1 million in unauthorized online transfers from the victims’ true accounts to the unauthorized accounts he had opened in the victims’ names and to Cao’s own financial accounts.

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

If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and, in most cases, it will be less than the maximum.

The investigation was conducted by the FBI Cleveland Division. The case is being prosecuted by Assistant United States Attorney Edward Brydle.