Southern District of Ohio

CINCINNATI – A federal grand jury has charged 15 individuals with federal gun charges in separate indictments returned in Cincinnati. The cases are part of an anti-violence initiative involving a focus from local, state and federal law enforcement to combat gun violence in the city.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Donald J. Soranno, Special Agent in Charge, ATF, Columbus Field Division, Cincinnati Police Chief Eliot Isaac, Hamilton County Sheriff Jim Neil, Hamilton County Prosecutor Joseph T. Deters, Hamilton Police Chief Craig Bucheit, Lockland Police Chief Jim Toles, Norwood Police Chief William Kramer, Harrison Police Chief Charles Lindsey and Springfield Township Police Chief Robert Browder announced the indictments.

The 15 defendants represent the first group of alleged habitual offenders indicted as part of the initiative. The strategy includes a committed focus from federal, state and local law enforcement agencies to identify those individuals who consistently use firearms to commit crimes, who habitually possess illegal firearms, and who present a clear threat to the safety of the community.

A list of those charged is attached.

U.S. Attorney Stewart commended the investigation of this case by law enforcement, and Assistant United States Attorneys Christy Muncy, Timothy Oakley and Anthony Springer, who are prosecuting the cases.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

Name

Age

City of Residence

Charges

Dennis Hicks

30

Cincinnati

1 count possession of firearm as a convicted felon

Steven Ivery

30

Cincinnati

1 count possession of firearm as a convicted felon

Willie Jackson

25

Hamilton

1 count possession of firearm as a convicted felon

Jarvis Levy, Jr.

35

Cincinnati

5 counts possession with intent to distribute heroin and cocaine, 2 counts possession of a firearm as a convicted felon, 1 count  possession of  firearm in furtherance of an offense

Donte Martin

28

Cincinnati

1 count possession of firearm as a convicted felon

Donell McCreagh

55

Cincinnati

1 count possession of firearm as a convicted felon

Nicholas Metz

34

Cincinnati

1 count possession of firearm as a convicted felon

Jeno Moore

25

Cincinnati

1 count of possession with intent to distribute heroin, 1 count of possession of firearm in furtherance of an offense, 1 count possession of firearm as convicted felon

Alvin Palmer

25

Cincinnati

1 count possession of firearm as a convicted felon

Keno Phillips

41

Cincinnati

1 count possession with intent to distribute cocaine, 1 count possession of firearm as a convicted felon, 1 count possession of firearm in furtherance of an offense

Brian Simms

33

Hamilton

1 count possession of firearm as a convicted felon

Ronald Steele

25

Cincinnati

1 count possession of stolen firearm, 1 count possession of firearm as a convicted felon

Oscar Torbert

27

Cincinnati

1 count of possession with intent to distribute heroin, 1 count of possession of firearm in furtherance of an offense, 1 count possession of firearm as convicted felon

Terrance Williams

28

Cincinnati

1 count possession of stolen firearm, 1 count possession of firearm as a convicted felon

Steven Young

31

Cincinnati

1 count possession of firearm as a convicted felon

 

Possession of a firearm by a convicted felon

18 U.S.C. § 922(g)

5-20 years in prison

$250,000 fine

Up to a lifetime of supervised release

 

18 U.S.C. § 922(g)(1)

Up to 10 years in prison

$250,000 fine

Up to 3 years supervised release

Possession with intent to distribute

21 U.S.C §§ 841(a)(1) and 841(b)(1)(C)

Up to 20 years in prison

At least 3 years supervised release

 

$1 million fine

Possession of a firearm in furtherance of an offense

18 U.S.C. § 924(c)(1)

At least 5 years consecutive in prison

$250,000 fine

5 years supervised release

Possession of a stolen firearm

18 U.S.C. § 922(j)

Up to 10 years in prison

$250,000 fine

Up to 3 years supervised release

 

DAYTON – Timothy Hock, 51, currently of Chicago, was sentenced to 42 months in prison and ordered to pay more than $1.3 million in restitution for his role in the embezzlement from a bankruptcy estate and income tax evasion.

Hock was ordered to pay approximately $1 million in restitution to Domin-8 Enterprises Solutions, Inc. (Domin-8) and approximately $326,000 in restitution to the Internal Revenue Service (IRS).

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Division, announced the sentence handed down today by U.S. District Judge Thomas M. Rose.

According to court documents, Hock, who was a Certified Public Accountant, was the controller for Domin-8 when the company (and five other related entities) filed for Chapter 11 bankruptcy in September 2009. Domin-8 was a Mason, Ohio-based company that provided software to companies that managed rental properties.

During the bankruptcy proceedings, Hock was responsible for handling the company’s liquidation and transfer of assets, completing claims reviews and making appropriate distributions to various creditors of the company.

He embezzled approximately $1,080,289.73 which belonged to the bankruptcy estate of Domin-8 through a variety of means, including writing checks to himself from the trust’s bank accounts.

These checks were deposited into Hock’s personal bank account and then used for his personal expenditures. In addition, Hock wrote cashier’s checks from the trust’s bank accounts in order to purchase several personal vehicles, including two luxury vehicles, a 2006 Land Rover, a 2009 Jaguar XF and a 2010 Honda Civic for his daughter. Hock attempted to conceal his activities by submitting four false post confirmation reports in which he did not include all the payments he made to himself and all expenses paid on his behalf.

Hock committed tax evasion on his 2010, 2011 and 2012 tax returns by claiming that his taxable income was much less than it actually was. In total, he attempted to evade paying approximately $326,000 in federal income taxes for those years.

Hock pleaded guilty to the embezzlement and tax evasion charges on August 19, 2015.

“Tax evasion and bankruptcy fraud of this magnitude and with this degree of trickery, dishonesty and deceit, deserves to be punished,” said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “The IRS, FBI, and U.S. Attorney’s Office remain determined and vigilant in ferreting out such schemes to cheat the honest taxpayers."

U.S. Attorney Stewart commended the cooperative law enforcement investigation, as well as Assistant United States Attorney Alex R. Sistla, who is prosecuting the case.

DAYTON, Ohio – Terrence Victoria, 30, of Springfield, Ohio was sentenced in U.S. District Court to 96 months in prison for illegal possession of a firearm by a convicted felon.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Donald J. Soranno, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Ohio Attorney General Mike DeWine and Clark County Sheriff Gene A. Kelly, announced the sentence handed down today by U.S. District Judge Walter H. Rice.

According to court documents, Victoria was armed with a semi-automatic pistol while at the parking lot of Horseshoe Sports Bar in Springfield, Ohio. The recovery of his firearm occurred following an interaction with the Clark County Sheriff’s Office during which the defendant was incapacitated by a gunshot wound.

Victoria pleaded guilty on July 29, 2015 to one count of felon in possession of a firearm.

“The defendant displayed the firearm and threatened a patron in the bathroom of the bar,” Special Assistant U.S. Attorney Amy Smith told the court. “As law enforcement responded, Mr. Victoria left the bar and went to a vehicle in the parking lot, where he pointed the firearm at responding deputies.”

U.S. Attorney Stewart commended the cooperative investigation by ATF and BCI, as well as Special Assistant United States Attorney Amy Smith, who is representing the United States in this case. 

COLUMBUS, Ohio – Jeffrey R. Shope, 45, of Blacklick, Ohio, was sentenced in U.S. District Court to one year and one day in prison for one count of insurance fraud.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Lieutenant Governor Mary Taylor, Director of Ohio Department of Insurance and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down today by U.S. District Judge Gregory L. Frost.

According to court documents, Shope was a licensed chiropractor and owner of True Health Chiropractic in Westerville, Ohio. From January 2009 to December 2012, Shope made false statements to defraud federal health care benefit programs and obtained nearly $700,000 in fraudulent payments. Shope would bill for equipment and services not rendered to maximize insurance payments and would bill two separate programs for identical services provided to the same patients on the same day.

U.S. Attorney Stewart commended the cooperative investigation by the FBI and Ohio Department of Insurance, as well as Assistant United States Attorney Ken Affeldt, who represented the United States in this case. 

COLUMBUS, Ohio – A federal grand jury has charged Lawrence W. Bell, Jr., 30, and Chad A. Titpton, 19, both of Columbus, with charges related to seven bank, restaurant and business robberies in Ohio in an indictment returned in Columbus.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Donald J. Soranno, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Reynoldsburg Police Chief Jim O’Neill, Columbus Police Chief Kim Jacobs, Springfield Police Chief Stephen P. Moody, Chillicothe Police Chief Keith Washburn, Fairfield County Sheriff Dave Phalen, Zanesville Police Chief Kenneth Miller, Mount Vernon Police Chief Roger A. Monroe, Delaware Police Chief Bruce Pijanowski and Ohio State Highway Patrol Superintendent Paul Pride announced the indictment returned yesterday.

The indictment alleges that Bell committed armed robberies at the Fifth Third Bank in Springfield, Ohio; Century National Bank in Zanesville, Ohio; First Service Federal Credit Union in Reynoldsburg, Ohio; Cooper State Bank in Columbus, Ohio; First Service Federal Credit Union in Mount Vernon, Ohio and Fifth Third Bank in Chillicothe, Ohio.

He is also charged with five counts of using a firearm in relation to a crime of violence.

Tipton also allegedly took part in the robbery at Cooper State Bank in Columbus, Ohio, including using a firearm in relation to the crime.

Robbery involving a deadly weapon is a crime punishable by up to 25 years in prison. Using a firearm during and in relation to a crime of violence carries a maximum penalty of up to life in prison.

Bell is in custody and there is a warrant for Tipton’s arrest.

U.S. Attorney Stewart commended the investigation of this case by law enforcement, and Assistant U.S. Attorney Timothy Prichard, who is prosecuting the case.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

COLUMBUS, Ohio – Four defendants were arrested yesterday morning on charges related to running a marijuana ring between Tuscon, Ariz. and Columbus, Ohio. Investigators have seized more than 2,000 pounds of marijuana and more than $1.2 million in cash in relation to the case.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), Columbus Police Chief Kim Jacobs and other members of Central Ohio HIDTA (High Intensity Drug Trafficking Area) Drug Task Force announced the arrests that took place today. The HIDTA Task Force is operated as part of the Ohio Attorney General’s Ohio Organized Crime Investigations Commission.

According to court documents, detectives with Columbus Police and the HIDTA Task Force began in investigation into a multi-kilogram marijuana drug ring in November 2015. Detectives learned large shipments were being imported into Columbus on a monthly basis by a male named “Lucky,” later identified as Damian Edwards, a Jamaican native.

While conducting surveillance, law enforcement officials saw defendants renting and driving large vehicles such as a U-Haul, Dodge Durango and Landstar Ranger semi-tractor trailer and meeting at locations near Polaris Shopping Place before following one another to a hotel nearby.

The defendants were each charged with conspiracy to possess with intent to distribute marijuana, a crime punishable by a range of 10 years up to life in prison, and a $10 million fine.

Initial court appearances for the arrestees are scheduled this afternoon before U.S. Magistrate Judge Norah McCann King. They include:

Damian Edwards, 38, of Columbus

Hopie Dawn Edwards, 34, of Columbus

Theo Lavelle Smith, 33, of Columbus

German Alfredo White, 53, of Jacksonville, Fla.  

U.S. Attorney Stewart commended the cooperative investigation by the DEA and Columbus Division of Police, as well as Assistant U.S. Attorneys Michael Hunter and David Bosley, who are prosecuting the case.

Charges contained in a complaint are allegations. All defendants should be presumed innocent until and unless proven guilty in court.

CINCINNATI – Defendants involved in a major cocaine and heroin trafficking ring have pleaded guilty to related charges in U.S. District Court.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office and Cincinnati Police Chief Eliot K. Isaac, announced the final plea entered into yesterday before United States District Court Judge Timothy S. Black.

According to court documents, the defendants were charged in April 2015 in a 23-count indictment. The indictment outlined that the group conspired to facilitate an illegal drug business, primarily cocaine and heroin.

It was further part of the conspiracy that the defendants operated “stash” houses to process, cut, package and store the drugs as well as firearms and money. In order to conceal the money generated from the drug sales, defendants would launder the profits by purchasing real and personal property and place assets in the names of other individuals.

Upon executing search warrants in this case, investigators discovered more than $1 million in cash at the properties maintained by the narcotics trafficking organization.

Also included in forfeiture in this case are: seven firearms, three properties in Cincinnati, five vehicles including two luxury vehicles and a motorcycle, multiple pieces of jewelry, Gucci and Rolex watches, two ballistic vests, a number of “mink” fur coats and vests, 13 designer handbags and Beats headphones and ear buds.

The defendants and the charges to which they pled guilty include:

 

Name                             Age                 Residence                      Pleaded to                                                      Potential sentence

Christopher Whitfield     42                   Cincinnati                        Conspiracy to commit money laundering       20 years in prison

Tonia Whitfield               41                   Cincinnati                        Money laundering (3counts)                          20 years in prison per count

Steven Griffin                 40                   Cincinnati                        Possession with intent to distribute               40 years in prison; 10 years in prison

                                                                                                      herion; felon in possession of a firearm

Icierra Martin-Bronson   38                   Cincinnati                        Money laundering (2counts)                          20 years in prison

 

Griffin was sentenced on January 13, 2015 to 87 months in prison. Tonia Whitfield was sentenced on December 14, 2015 to 12 months and one day in prison.

“IRS Criminal Investigation follows the money so we can financially disrupt and dismantle major drug trafficking organizations, especially when individuals attempt to conceal the true source of their money,” said Guy A. Ficco, Acting Special Agent in Charge, IRS, Criminal Investigation. “Today's announcement is a direct result of the excellent partnership IRS, the U.S. Attorney’s Office, the FBI, and the Cincinnati Police Department has in combating major drug trafficking organizations, which have such a negative impact on our community."

U.S. Attorney Stewart commended the cooperative investigation by local and federal law enforcement, including the IRS, FBI and Cincinnati Police Department, as well as Assistant United States Attorneys Karl Kadon and Jessica W. Knight, who are representing the United States in this case. 

COLUMBUS, Ohio – William J. Pate, 45, of Columbus, was sentenced in U.S. District Court to 15 years in prison for possessing cocaine and firearms in furtherance of distributing drugs.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), and Colonel Paul A. Pride, Superintendent, Ohio State Highway Patrol, announced the sentence handed down today by U.S. District Judge Gregory L. Frost.

According to court documents, investigators were informed in February 2015 that Pate was actively involved in trafficking large quantities of cocaine. Upon executing a search warrant, investigators discovered more than a kilogram of cocaine and 11 firearms at Pate’s residence in Columbus, Ohio.

Pate pleaded guilty on September 11, 2015 to conspiracy to possess with intent to distribute cocaine and possession of a firearm in furtherance of drug trafficking. He has agreed to forfeit a Mercedes SUV and 11 firearms.

U.S. Attorney Stewart commended the cooperative investigation by the DEA and Ohio State Highway Patrol, as well as Assistant United States Attorneys Michael Hunter and Peter Glenn-Applegate, who are representing the United States in this case. 

COLUMBUS – Mark Preston French, 42, of Westerville, Ohio has pleaded guilty in U.S. District Court to one count of wire fraud in connection to investment fraud scheme involving more than $1 million.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the plea entered on Friday before U.S. District Chief Judge Edmund A. Sargus, Jr.

According to court documents, French worked as a stockbroker between 1998 and 2013.  An elderly woman from Greenville, Pennsylvania, who believed French was an investment advisor, was his client between 2000 and 2012.  In 2008, French advised the elderly woman to begin investing in precious metals.

In 2009, French advised his elderly client to open joint checking and savings accounts with him so he could purchase and sell precious metals on her behalf. French instructed his client deposit funds totaling more than $1.3 million into these joint accounts. French used the funds to purchase and sell gold and silver with the Tulving Company in Newport Beach, California. French deposited a portion of the proceeds received from the sale of the elderly client’s precious metals to the Tulving Company, but also embezzled $120,414.80 of the proceeds for his own purposes.

In September 2012, French advised the elderly client told French she wanted to take physical possession of her gold and silver, which French was storing in his Westerville home. Instead, French sold a majority of the precious metals back to Tulving Company, returning $1,062,820 back to his client, but keeping part of the proceeds for himself. He also kept 11,942 ounces of silver purchased with his client’s funds, which was valued at more than $400 thousand.

French faces up to 20 years in prison and a fine of $250 thousand for his crimes. He must pay restitution to the elderly victim of his fraud scheme as part of his plea agreement. French will be sentenced at a later date.

U.S. Attorney Stewart commended the investigation by FBI, as well as Assistant United States Attorney Dale Williams, who is representing the United States in this case. 

COLUMBUS, Ohio – JoAnna M. Ochieng, 67, of Columbus, Ohio, pleaded guilty in U.S. District court today to one count each of income tax evasion, conspiracy to commit health care fraud and money laundering relative to a scheme to defraud Medicaid of $436,305.69.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Lamont Pugh, Special Agent in Charge, Department of Health and Human Services Office of Inspector General, Ohio Attorney General Mike DeWine and Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), announced the plea entered today before U.S. District Court Judge Gregory L. Frost.

According to court documents, beginning in 2003, Ochieng owned Healthy Solutions Home Health Services (Healthy Solutions) which provided nursing and home health services to Medicaid recipients and their families. Since 2003, Healthy Solutions has operated out of six locations, including Columbus, Bexley, Washington Courthouse and Hillsboro, Ohio.

Between November 2011 and March 2013, Ochieng conspired with others employed at Healthy Solution to defraud the Ohio Medicaid program by making false statements in connection with the delivery of, and payment for, health care benefits by means of fraudulent representations.

Specifically, Healthy Solutions employees, under the direction of Ochieng, instructed parents who were providing home health care services to their children to “swap” time sheets with other parents who were also providing home health care services to their children. This would give the false appearance that parents were providing home health services to children other than their own. Under the Medicaid Program, a home health aide cannot be the parent, foster parent, or legal guardian of a patient who is under 18 years of age.

In addition, in order to maximize the amount of reimbursement paid by the Medicaid Program, Ochieng and other co-conspirators working at Healthy Solutions instructed Healthy Solution nurses to submit Skilled Nursing Visit Notes that falsely reflected the hours nurses were providing home health services. Specifically, the nurses were instructed to “split shifts” on their time sheets to make it appear that they made three or more separate home visits, when in fact they made no more than two. By falsely representing the hours of service, Healthy Solutions received inflated payments from the Medicaid Program.

The fraudulent claims submitted by Healthy Solutions, under the direction of Ochieng, resulted in a loss to the Medicaid Program of $436,305.69.

During 2012 and 2013, Healthy Solutions received payments from the Medicaid Program for nursing and home health services totaling $6,037,659.76 and $3,056,866.23, respectively. Knowing that taxes were due and owing to the IRS for the proceeds from her business operations at Healthy Solutions, Ochieng willfully failed to file income tax returns and pay taxes on those proceeds for the 2012 and 2013 income tax years, resulting in a tax loss of $274,205.55.

Funds received by Ochieng and Healthy Solutions as part of the health care fraud scheme were deposited into a local bank account and comingled with other income from Medicaid. In February 2013 and March 2013, as part of her plan to evade the payment of income taxes, Ochieng electronically transferred $600,000 and $410,000, respectively, to an account in a nominee name in the Turks and Caicos Islands. Each transaction involved at least $10,000 of funds derived from the health care fraud scheme.

Conspiracy to commit health care fraud and money laundering are crimes punishable by up to 10 years in prison. Income tax evasion is a crime punishable by up to five years imprisonment.

In addition, Ochieng agreed to forfeit $1 million held in a trust account in the Turks and Caicos Islands.

“The Medicaid Fraud Control Unit within my office is dedicated to working with federal authorities to investigate and prosecute those who manipulate the health care system to collect money that they are not entitled to,” said Attorney General DeWine.  “Those who believe that they can outsmart the investigators trained to identify this type of fraud should think again.”

"Ochieng’s attempt to evade taxes by hiding income and failing to file income tax returns was a theft from the American public," said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “The conduct detailed in this case is egregious. Health care fraud affects every American and contributes to the rising cost of health care and degrades the integrity of our health care system and legitimate patient care.”

U.S. Attorney Stewart commended the cooperative law enforcement investigation, as well as Assistant U.S. Attorneys Kenneth F. Affeldt and Daniel A. Brown and Maritsa Flaherty with the Ohio Attorney General’s Office, who are prosecuting the case.

COLUMBUS, Ohio – Malek B. Aliane, 34, previously of Columbus, pleaded guilty in U.S. District Court to mail fraud and presenting false claims to the Internal Revenue Service (IRS).

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, James Vanderberg, U.S. Department of Labor Office of Inspector General, and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service’s (USPIS) Cincinnati Field Office, announced the plea entered into today before U.S. District Judge Gregory L. Frost.

According to court documents, from 2013 through 2015, while in federal prison or on supervised release, Aliane filed false personal forms and tax returns with the IRS. He filed six returned in total which claimed false tax refunds through fraudulent federal income tax withholdings. Aliane created fictitious W-2 and 1099 forms setting forth large federal tax withholding amounts.

In 2013 and 2014, while in prison, Aliane mailed paper returns to the IRS. In 2015, while on supervised release, he electronically filed the returns.

Three false Forms 1040 and/or Forms 1040X for the tax years 2012, 2013 and 2014 claimed a total of $94,133.87 in bogus refunds. The other three were false Forms 1120 for Aliane’s business, MB Aliane Real Estate, LLC, for the years 2012, 2013 and 2014 claiming $422,185.00 in false refunds. 

Also, from February 1, 2015, through June 23, 2015, the defendant used personal identification information of other individuals in order to file false, fictitious and fraudulent unemployment insurance (UI) applications with the Ohio Department of Job and Family Services (ODJFS) upon the purported employer account of JLB Financial Group.

On May 12, 2015, Defendant Aliane registered the fictitious employer account of JLB Financial Group with the ODJFS.  This employer account was registered with backdated liability dates and no contributions having been paid.  Seven individuals were listed as employees of JLB Financial Group with wages from the first quarter of 2014 through the first quarter of 2015; however, those seven individual employees, all were incarcerated before and during the aforementioned wage period. None of them ever actually worked for JLB. Seven individual UI claims were filed on the business account, and the government contends that the potential unemployment benefits to be paid on those claims totals $77,168

Aliane faces a potential maximum sentence of 20 years for mail fraud and five years for presenting false claims to the IRS.

U.S. Attorney Stewart commended the cooperative investigation by the IRS-CI, Department of Labor and USPIS, as well as Assistant United States Attorney Daniel Brown, who is representing the United States in this case. 

COLUMBUS, Ohio – A United States District Court jury convicted Maqsood Haroon, 41, of Columbus, Ohio, of unlawful procurement of citizenship or naturalization.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Marlon V. Miller, Special Agent in Charge, Homeland Security Investigations, announced the verdict reached today which was returned following a trial that began on Wednesday before U.S. District Judge Gregory L. Frost.

According to court testimony, Haroon traveled from Pakistan to America on a visitor’s visa before marrying a U.S. citizen. He then completed the naturalization process to become a United States Citizen.

Throughout that process, Haroon made false statements that he had no other wife or children, when in fact, he was previously married in Pakistan and had children.

"Committing fraud to obtain citizenship or any U.S. immigration benefit represents an egregious breach of the nation's legal system and is a blatant affront to those who play by the rules," said Miller. "HSI will continue to aggressively move against those engaged in such criminal acts."

Procurement of citizenship or naturalization unlawfully is a crime punishable by up to 15 years in prison.

U.S. Attorney Stewart commended the investigation by HSI and U.S. Citizenship and Immigration Services, as well as Assistant United States Attorneys David DeVillers and Jessica Kim, who prosecuted the case.

COLUMBUS, Ohio – Three Columbus men pleaded guilty in connection to a racketeering case involving the organized criminal enterprise known as the Short North Posse.

Allen L. Wright, 30, pleaded guilty to one count of racketeering conspiracy and two counts of murder in aid of racketeering.

Tysin L. Gordon, 30, and Freddie K. Johnson, 29, each pleaded guilty to one count of racketeering conspiracy.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), Michael Boxler, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Franklin County Prosecutor Ron O’Brien, and Columbus Police Chief Kim Jacobs, announced the pleas entered into yesterday before U.S. District Judge Algenon L. Marbley.

The three were charged by a superseding indictment in October 2014. A total of 20 individuals were indicted in the racketeering case with charges that included murders, attempted murders, drug trafficking, weapons trafficking, extortion and robbery.

Racketeering conspiracy is a crime punishable by up to 20 years in prison. Murder in aid of racketeering carries a potential maximum sentence of life in prison or the death penalty.

U.S. Attorney Stewart commended the two-year long investigation by federal, state and local law enforcement agencies, including the FBI, DEA, ATF, Columbus Police, Franklin County Sheriff Zach Scott’s Office, Franklin County Prosecutor Ron O’Brien’s Office, Fairfield County Prosecutor Gregg Marx, Licking County Prosecutor Kenneth Oswalt, Muskingum County Prosecutor D. Michael Haddox, Ross County Prosecutor Matthew S. Schmidt, law enforcement leaders from those counties, and officials of the Ohio Department of Rehabilitation and Correction, as well as Assistant U.S. Attorneys David DeVillers, Kevin Kelley and Brian Martinez and Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who are prosecuting the case. 

COLUMBUS, Ohio – Simon Velazquez-Gonzalez, 27, formerly of Hilliard, Ohio was sentenced in U.S. District Court to 170 months in prison for his role in trafficking more than nine kilograms of methamphetamine. Agents seized more than 20 pounds of “ice” – a form of methamphetamine of 98 to 100 percent purity – in this case.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA) Detroit Field Division announced the sentence handed down today by U.S. District Judge Gregory L. Frost.

In February and March 2015, through the use of an undercover officer, law enforcement agents made methamphetamine purchases from Velazquez-Gonzalez and his co-conspirators. They discovered a substantial quantity of the drug, over $11,000 in cash and three firearms when executing search warrants at locations used by the narcotics trafficking operation, including at Velazquez-Gonzalez’s residence in Hilliard, Ohio.

Velazquez-Gonzalez pleaded guilty on July 30, 2015 to one count of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine.

A co-conspirator in this case, Marcelino Montoya-Sanchez, remains a fugitive. If you have information regarding his whereabouts, please contact the DEA.

U.S. Attorney Stewart commended the cooperative investigation by the DEA, as well as Assistant United States Attorneys Brian J. Martinez and Michael J. Hunter, who are representing the United States in this case. 

CINCINNATI – Terry Johnson, 42, of Hamilton Ohio, pleaded guilty in U.S. District Court to one count of health care fraud and one count of money laundering.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office, Lamont Pugh, Special Agent in Charge, Health and Human Services Office of Inspector General (HHS-OIG) and Ohio Attorney General Mike DeWine announced the plea entered into today before U.S. District Judge Michael R. Barrett.

According to court documents, Johnson is the owner and operator of Community Angels Ambulance Service, LLC, which provided medical transportation to dialysis patients from at least 2007 through 2012. He also operated the ambulance company Starlite Transportation.

For approximately seven years, Johnson fraudulently billed Medicare and Medicaid for ambulance and ambulette transports. Approximately $1.1 million was fraudulently billed to Medicare for Community Angels. The loss to Medicaid from both companies totaled more than $356,000.

“Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with government program money," said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. "Those individuals who engage in this type of health care fraud should know they will not go undetected and will be held accountable."

Health care fraud and money laundering are each crimes punishable by up to 10 years in prison.

U.S. Attorney Stewart commended the cooperative investigation by the IRS, HHS-OIG and the Ohio Attorney General’s Medicaid Fraud Unit, as well as Assistant United States Attorney Timothy Mangan, who is representing the United States in this case. 

CINCINNATI – U.S. Attorney Carter M. Stewart will join members of the Board of Directors of the Islamic Center of Greater Cincinnati (ICGC) and other regional Muslim-American leaders to discuss building understanding and safety for Muslim-American communities.

The briefing will be held:

TOMORROW: JANUARY 12, 2016

WHEN:  4:00 P.M.

WHERE:                Islamic Center of Greater Cincinnati

                                Education Building

                                8092 Plantation Drive

                                West Chester, OH 45069

WHO:                    U.S. Attorney Carter M. Stewart

                                Shakila Ahmad, President of the Board, ICGC

                                Community leaders

 

Room available beginning at 3:45 P.M. No TV lighting or multbox will be available. ID will be required for entrance.

CINCINNATI – Christopher Outlaw, 46, of Moore, S.C., was sentenced in U.S. District Court to 30 months in prison and ordered to pay $1.9 million in restitution for mail fraud.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down today by U.S. District Judge Michael R. Barrett.

According to court documents, beginning in at least 2005 through August 2012, Outlaw embezzled more than $1.9 million from his former employer.

Outlaw was employed by FTZ Industries, Inc. FTZ is a manufacturer of electrical products for transportation, plant maintenance, marine and custom applications, located in Simpsonville, South Carolina.  FTZ is a division of ILSCO Corporation, which is an electrical connector manufacturing company located in Cincinnati, Ohio.

The defendant embezzled money by impersonating a former vendor of his employer.  Specifically, the defendant opened a bank account in false affiliation with Molex Incorporated, a company that provides electrical components to its customers, which previously included FTZ.  Outlaw submitted to his employer fictitious invoices that appeared to be from Molex.  In reality, however, FTZ had not received any products from Molex because the invoices that Outlaw submitted were fake.  Through the fictitious invoices, Outlaw would direct his employer to send payments to Molex to a mailbox that he had opened in Georgia in Molex’s name.

U.S. Attorney Stewart commended the cooperative investigation by the FBI, as well as Cincinnati Branch Chief Emily N. Glatfelter, who represented the United States in this case. 

CINCINNATI – Rebecca D. Bingham, 39, of Cincinnati pleaded guilty in U.S. District Court to theft from a savings and loan corporation.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the plea entered into today before U.S. District Judge Michael R. Barrett.

According to court documents, Bingham was employed at Cincinnatus Savings and Loan from 2004 until September 2014. During that time, Bingham embezzled approximately $215,000 from the financial institution.

She took advantage of her autonomy as Assistant Vice President and Senior Accountant to conceal stealing from the institution’s main operational account. She deposited at least 63 checks into her personal account. Bingham then used the funds for her own personal expenses, to pay off a vehicle in her name and to assist an unemployed family member.

Theft from a savings and loan corporation carries a maximum sentence of up to 30 years in prison and a fine of up to $1 million.

U.S. Attorney Stewart commended the cooperative investigation by the FBI, as well as Assistant United States Attorney Anthony Springer, who is representing the United States in this case. 

DAYTON – A federal grand jury has charged Charles M. McBeath, 32, of Dayton, and Antonio J. Spiva, 24, of Dayton, with conspiring to distribute heroin and fentanyl, distributing fentanyl that resulted in the death of at least two individuals, distributing heroin and maintaining properties for the purpose of using and distributing the drugs in a 10-count indictment returned in Dayton.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Montgomery County Sheriff Phil Plummer, Dayton Police Chief Richard Biehl and other members of the Heroin Eradication Apprehension Team (HEAT) announced the indictment that was unsealed today.

The indictment alleges that through late May 2015, McBeath and Spiva distributed heroin and fentanyl while maintaining operations at residences located on E. Fifth Street, S. Torrence Street and S. Horton Street, all in Dayton. It is alleged that their distribution of fentanyl on May 25, 2015 resulted in the overdose death of two individuals.

Distributing more than 100 grams of heroin carries a mandatory minimum of 5 years up to a maximum potential sentence of 40 years in prison. Distribution resulting in death is a crime that is punishable by a mandatory minimum of 20 years up to lifetime imprisonment. Maintaining a property for the purpose of distributing or using illegal drugs is punishable by up to 20 years imprisonment.

McBeath and Spiva are also charged with three counts of distributing heroin. Each count carries a maximum sentence of 20 years in prison.

Both defendants remain in custody.

The HEAT initiative was announced in May 2015 and includes the U.S. Attorney’s Office, DEA, Dayton Police Department, Montgomery County Sheriff’s Office, Montgomery County Coroner’s Office, and the Miami Valley Regional Crime Laboratory. The intent of the task force is to prosecute heroin and fentanyl suppliers who contribute to both fatal and non-fatal overdoses in Montgomery County.

U.S. Attorney Stewart commended the investigation of this case by HEAT, and Assistant U.S. Attorney Sheila Lafferty, who is prosecuting the case.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

WASHINGTON – The Justice Department announced today that it has jointly sought and received court approval to terminate a settlement agreement with the Franklin County Sheriff’s Office (FCSO) in Columbus, Ohio, regarding the deployment of tasers in the Franklin County jails.  The move recognizes the successful implementation of reforms by the FCSO that resulted in a dramatic reduction in the use of tasers overall, as well as substantial improvements in policies, procedures, training and accountability and review mechanisms in those limited circumstances that tasers are used.   

The settlement agreement resolved allegations that the FCSO inappropriately used tasers against detainees, including persons with disabilities, in violation of their constitutional rights.  The allegations were initially brought in a class action lawsuit filed by Ohio Legal Rights Service (now Disability Rights Ohio), a federally designated protection and advocacy organization for persons with disabilities.  The department filed a statement of interest and later intervened in the lawsuit under its enforcement authority under the Violent Crime Control and Law Enforcement Act.  

The U.S. District Court of the Southern District of Ohio approved and entered the settlement agreement on Feb. 4, 2011.  The agreement prohibited sheriff’s deputies from using tasers against any detainee who is not reasonably perceived to pose a threat to the safety of the deputy or others and is not resisting by use of physical force.  The agreement further restricted the practice of using tasers against persons who question a deputy’s commands in a non-violent manner, or who remain in a limp or prone position.  Critically, the settlement agreement prohibited the use of tasers against persons who are known or reasonably believed to be pregnant, are intoxicated due to drugs or alcohol, or are mentally ill or physically impaired.  To achieve these reforms, the agreement detailed changes to FCSO’s policies, procedures, training, accountability and supervisory review mechanisms, including the use of de-escalation techniques, heightened reporting requirements by each deputy involved in a use of force and triggers for automatic higher-level review by the Internal Affairs Bureau.

On Dec. 24, 2015, the department joined the FCSO and Disability Rights Ohio in a motion to terminate the settlement agreement, citing the sheriff's sustained substantial compliance with the terms of the agreement for more than two years, as required by the agreement’s terms.  On Dec. 28, 2015, the federal court granted the parties’ joint motion to terminate the settlement agreement in light of these improvements.

“We are pleased to see the Franklin County Sheriff's Office reform its use of force practices in its jails, especially with respect to persons with disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “The accountability mechanisms implemented through this agreement will ensure that the positive outcomes will be sustained long after the agreement is terminated.”  

“The termination of this agreement illustrates the positive changes implemented by the Franklin County Sheriff's Office in its policies, training and accountability in regard to taser use, particularly when involving those with disabilities,” said U.S. Attorney Carter M. Stewart of the Southern District of Ohio.

Section 14141 authorizes the department to bring a lawsuit seeking remedies to eliminate a pattern or practice of misconduct by law enforcement agencies.  The Civil Rights Division’s Special Litigation Section partnered with the U.S. Attorney’s Office of the Southern District of Ohio and attorneys with Disability Rights Ohio to investigate, negotiate and monitor the successful implementation of reforms to the use of tasers in the Franklin County jails. 

The Justice Department announced today that it has jointly sought and received court approval to terminate a settlement agreement with the Franklin County Sheriff’s Office (FCSO) in Columbus, Ohio, regarding the deployment of tasers in the Franklin County jails.  The move recognizes the successful implementation of reforms by the FCSO that resulted in a dramatic reduction in the use of tasers overall, as well as substantial improvements in policies, procedures, training and accountability and review mechanisms in those limited circumstances that tasers are used.   

The settlement agreement resolved allegations that the FCSO inappropriately used tasers against detainees, including persons with disabilities, in violation of their constitutional rights.  The allegations were initially brought in a class action lawsuit filed by Ohio Legal Rights Service (now Disability Rights Ohio), a federally designated protection and advocacy organization for persons with disabilities.  The department filed a statement of interest and later intervened in the lawsuit under its enforcement authority under the Violent Crime Control and Law Enforcement Act.  

The U.S. District Court of the Southern District of Ohio approved and entered the settlement agreement on Feb. 4, 2011.  The agreement prohibited sheriff’s deputies from using tasers against any detainee who is not reasonably perceived to pose a threat to the safety of the deputy or others and is not resisting by use of physical force.  The agreement further restricted the practice of using tasers against persons who question a deputy’s commands in a non-violent manner, or who remain in a limp or prone position.  Critically, the settlement agreement prohibited the use of tasers against persons who are known or reasonably believed to be pregnant, are intoxicated due to drugs or alcohol, or are mentally ill or physically impaired.  To achieve these reforms, the agreement detailed changes to FCSO’s policies, procedures, training, accountability and supervisory review mechanisms, including the use of de-escalation techniques, heightened reporting requirements by each deputy involved in a use of force and triggers for automatic higher-level review by the Internal Affairs Bureau.

On Dec. 24, 2015, the department joined the FCSO and Disability Rights Ohio in a motion to terminate the settlement agreement, citing the sheriff's sustained substantial compliance with the terms of the agreement for more than two years, as required by the agreement’s terms.  On Dec. 28, 2015, the federal court granted the parties’ joint motion to terminate the settlement agreement in light of these improvements.

“We are pleased to see the Franklin County Sheriff's Office reform its use of force practices in its jails, especially with respect to persons with disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “The accountability mechanisms implemented through this agreement will ensure that the positive outcomes will be sustained long after the agreement is terminated.”  

“The termination of this agreement illustrates the positive changes implemented by the Franklin County Sheriff's Office in its policies, training and accountability in regard to taser use, particularly when involving those with disabilities,” said U.S. Attorney Carter M. Stewart of the Southern District of Ohio.

Section 14141 authorizes the department to bring a lawsuit seeking remedies to eliminate a pattern or practice of misconduct by law enforcement agencies.  The Civil Rights Division’s Special Litigation Section partnered with the U.S. Attorney’s Office of the Southern District of Ohio and attorneys with Disability Rights Ohio to investigate, negotiate and monitor the successful implementation of reforms to the use of tasers in the Franklin County jails.  

COLUMBUS, Ohio – Roman Hernandez, 38, of Grove City, appeared in U.S. District Court today on charges related to the distribution of more than 1,000 grams of heroin. A federal grand jury previously charged Hernandez in a three-count indictment.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, Marlon V. Miller, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Franklin County Sheriff Zach Scott and other members of Central Ohio HIDTA (High Intensity Drug Trafficking Area) Drug Task Force announced the indictment. The HIDTA Task Force is operated as part of the Ohio Attorney General’s Ohio Organized Crime Investigations Commission.

The indictment alleges that in April 2013 Hernandez possessed the heroin with the intent of distributing it. The defendant also allegedly possessed a firearm as a convicted felon and purchased criminally derived property worth more than $10,000, namely, a property on Manitoba Road in Columbus, Ohio.

Possession with intent to distribute more than 1,000 grams of heroin is a crime punishable by up to life in prison. Possessing a firearm as a previously convicted felon and engaging in monetary transactions in property derived from specified unlawful activity each carry a maximum sentence of up to 10 years imprisonment.

Hernandez was arrested in April and has been in custody since.

U.S. Attorney Stewart commended the investigation of this case by the Central Ohio HIDTA Task Force, and Assistant U.S. Attorney Timothy Prichard, who is prosecuting the case.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

COLUMBUS, Ohio – A federal grand jury has charged J’Vonta C. Buckley, 25, of Columbus, Ohio, with charges related to human trafficking and child pornography in an indictment returned in Columbus, Ohio.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine and members of the Central Ohio Human Trafficking Task Force, including Columbus Police Chief Kim Jacobs and Franklin County Prosecutor Ron O’Brien announced the indictment returned last week.

The indictment alleges that the defendant recruited and harbored a 16-year-old victim, posted advertisements that depicted the child on the website Backpage.com to solicit customers for commercial sexual activity, and used her to create sexually explicit child pornography images with his cell phone. The indictment also alleges that Buckley used force, fraud or coercion against an adult female who also worked for him as a prostitute on Backpage. 

Investigators with the human trafficking task force discovered Buckley in December 2014 while conducting a sting on a Backpage ad that they believed depicted a minor girl. The defendant was arrested at that time on a warrant for a gun charge and served a sentence for that charge that ended December 20, 2015.

Buckley’s initial appearance on the current charges was held yesterday in front of U.S. Magistrate Judge Norah McCann King.

He was charged with one count of sex trafficking by force, fraud or coercion, which carries a potential sentence of 15 years to life in prison, one count of sex trafficking of a minor, which carries a potential sentence of 10 years to life in prison, one count of production of child pornography, which carries a potential sentence of 15 to 30 years’ incarceration and one count of possession of child pornography, which carries a maximum sentence of 10 years imprisonment.

U.S. Attorney Stewart commended the investigation of this case by the Ohio Attorney General’s Ohio Organized Crime Investigations Commission Human Trafficking Task Force, which includes authorities from the Attorney General's Bureau of Criminal Investigation (BCI), U.S. Homeland Security Investigations, Columbus Division of Police, Ohio State Highway Patrol, Powell Police Department, The Franklin County Prosecutor’s Office and the Delaware County Prosecutor's Office. He also commended Assistant United States Attorney Heather A. Hill and Special Assistant United States Attorney Jennifer Rausch from the Franklin County Prosecutor’s Office, who are prosecuting the case.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

CINCINNATI – Michael Hudson, 53, of Cincinnati, Ohio pleaded guilty in U.S. District Court today to one count of wire fraud and one count of filing a false federal income tax return with the Internal Revenue Service (IRS) relative to a scheme to defraud Frisch’s Restaurants, Inc. (“Frisch’s”) by embezzling funds in excess of his authorized pay and compensation. 

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the plea entered into today before U.S. District Judge Michael R. Barrett.

According to court documents, between 1992 and 2014 Hudson was employed at Frisch’s and between 2004 and December 2014 Hudson was the assistant treasurer for Frisch’s.  While serving as assistant treasurer, Hudson made unauthorized wire or ACH transfers of funds from the Frisch’s bank accounts for his own benefit.  For example, on one occasion, Hudson transferred money from Frisch’s bank account to a bank account in the name of WPMH Properties, LLC, which was a business owned and controlled by Hudson.

In total, between 2008 and 2014 Hudson embezzled $3,905,930.11 from Frisch’s as a result of this fraud scheme.

In addition, Hudson filed a false 2009 income tax return with the IRS.  Specifically, Hudson embezzled $323,936.19 from Frisch’s in 2009, but failed to report it as income on his 2009 income tax return.

Also, for the 2010 through 2013 income tax years, Hudson failed to file an income tax return with the IRS in an effort to evade the payment of income taxes related to the embezzlement scheme.

The total amount of income taxes due and owing for the 2009 through 2013 income tax years was $969,697.81.

For the fraud count, Hudson faces a maximum of 20 years in prison and a $250,000 fine or two times the loss.  For the tax count, Hudson faces a maximum of 3 years in prison and a $100,000 fine.

“No matter what the source of income, all income is taxable,” said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.  “The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS’s enforcement strategy.”

U.S. Attorney Stewart commended the investigation by IRS-Criminal Investigation and the FBI, as well as Assistant United States Attorney Timothy S. Mangan, who is prosecuting the case.

COLUMBUS, Ohio – Thomas “Tommy” G. Thompson, 63, formerly of Columbus, Ohio, was sentenced in U.S. District Court to 24 months in prison for criminal contempt for failing to appear in court after being ordered to do so in connection with civil suits against him.  Thompson was a fugitive until earlier this year when he was arrested by the U.S. Marshals Service.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Peter C. Tobin, United States Marshal for the Southern District of Ohio, announced the sentence imposed yesterday by U.S. District Judge Algenon L. Marbley.

According to court documents, U.S. District Chief Judge Sargus ordered Thompson to appear at an August 13, 2012 hearing in a federal civil case. At the 2012 hearing, Thompson was to provide an accounting of certain funds and the location of 500 re-strike commemorative gold coins as part of a lawsuit over the treasure that Thompson found from the SS Central America shipwreck. After Thompson failed to appear, a bench warrant for Thompson’s arrest was issued the same day.

In March 2013, an arrest warrant based on a criminal complaint alleging criminal contempt was authorized against Thompson.

U.S. Marshals tracked, found, and arrested Thompson and co-defendant Alison L. Antekeier, 47, also formerly of Columbus, Ohio, on January 27, 2015 in Boca Raton, Florida. Thompson and Antekeier – Thompson’s close associate – had been living in a Hilton hotel room under fake names and paying with cash.

The two pleaded guilty on April 8, 2015. As part of their plea, the couple agreed that $425,000 in cash seized at the time of their arrest would not be returned to them.

Thompson was also ordered to pay a fine of $250,000 and was sentenced to one year of supervised release following his prison term, along with 208 hours of community service.  Shortly after the sentencing, a hearing was held to determine why Thompson should not be held in civil contempt for failing to comply with Judge Marbley’s order that Thompson assist the civil litigants in the identification and recovery of the 500 coins and other assets.  Judge Marbley found that Thompson had not complied and ordered him jailed indefinitely and fined $1000 per day until he complies. 

U.S. Attorney Stewart commended the investigation by the U.S. Marshals Service, as well as Assistant U.S. Attorney Douglas W. Squires, who is representing the United States in this case. 

CINCINNATI – Bryan Barbarawi, 35, of West Chester, Ohio, pleaded guilty to committing money laundering relative to the sale of a vehicle. Barbarawi faces a maximum prison term of 20 years and a fine of up to $250,000.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA) and Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office, announced the announced the guilty plea entered before U.S. District Judge Susan J. Dlott.

According to court documents, since February 2011 Barbarawi owned and operated a car dealership in Fairfield, Ohio under the names Nationwide Credit Solutions, LLC d/b/a Auto Max, Extreme Imports and Falcon Auto Sales, Inc.

On November 5 and 6, 2014, Barbarawi committed money laundering by concealing the source and ownership of the proceeds from narcotics trafficking, as represented to Barbarawi by an undercover law enforcement officer, while conducting a financial transaction. Specifically, Barbarawi sold a vehicle to an undercover law enforcement officer, who represented that the money used to purchase the car was drug proceeds.

Barbarawi received approximately $21,533.50 in cash from the sale of the vehicle and then caused an employee of his car dealership to fabricate a Form 8300 – Report of Cash Payments Over $10,000 Received in a Trade or Business, which falsely reported the purchaser of the vehicle and the source of the funds used to purchase the vehicle.

“IRS, Criminal Investigation focuses on the flow of money which ultimately leads us to the individual who attempts to conceal the true source of the money,” said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.

U.S. Attorney Stewart commended the investigation of this case by the DEA and IRS, and Assistant United States Attorneys Jessica W. Knight and Karl Kadon, who are prosecuting the case.

WASHINGTON – The United States announced today that it has joined with the state of Ohio in seeking the termination of a consent decree with the Ohio Department of Youth Services (DYS), recognizing Ohio’s successful elimination of its use of disciplinary solitary confinement on children in its custody and its improvement of individualized mental health treatment for children formerly at risk of such confinement. 

DYS pledged in the consent decree on May 21, 2014, to dramatically reduce and eventually eliminate its use of solitary confinement on children in its custody.  DYS also committed to ensure that children in its juvenile facilities receive individualized mental health treatment to prevent and address the conditions and behaviors that led to solitary confinement.  Ohio also committed to reduce the potential harms caused by solitary confinement by increasing access to therapeutic, educational and recreational services while a child is in solitary confinement and addressing the child’s behavior that led to acts of violence. 

The consent decree resolved allegations that Ohio subjected children with mental health needs to harmful solitary confinement and withheld treatment and programming, in violation of their constitutional rights.  The consent decree included performance standards to measure compliance, and the monitors in the United States and S.H. cases monitored compliance jointly.  In the order of termination, the court concluded that Ohio had complied with the terms and conditions of the consent decree.

In granting the joint motion to terminate the consent decree, the U.S. District Court for the Southern District of Ohio noted the “remarkable improvement” in conditions of confinement at DYS juvenile facilities.  The court commended DYS for numerous improvements, including the abolition of the practice of disciplinary solitary confinement, its “vastly improved” mental health services and a reduction in the incarcerated population from over 2000 children to fewer than 500 today.  The experts who monitored the consent decree prepared and filed with the court a detailed report that explained the reforms DYS made “to memorialize [DYS’] major policy and practice decisions for the benefit of others in the field.”

“The state of Ohio, the administrators of the Department of Youth Services and their counsel are to be commended for their commitment to reforming Ohio’s juvenile correctional facilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “Ohio’s achievements can serve as a model throughout the nation.” 

“The termination of this consent decree illustrates state and federal cooperation to provide safer practices for children in Ohio juvenile facilities,” said U.S. Attorney Carter Stewart of the Southern District of Ohio.

“We are gratified that we were able to work together with our state partners to make juvenile justice in Ohio more rehabilitative,” said U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio. 

The department first investigated conditions at Ohio juvenile correctional facilities in 2007 and found constitutional deficiencies in Ohio’s use of physical force, mental health care, grievance investigation and processing and use of solitary confinement.  In June 2008, the department entered into a consent decree with Ohio to remedy these violations at two facilities that are now closed – the Scioto Juvenile Correctional Facility and the Marion Juvenile Correctional Facility.  Simultaneously, private plaintiffs in the case S.H. v. Reed entered into a consent decree with Ohio regarding similar deficiencies at all of the state’s juvenile correctional facilities.  However, between November 2013 and January 2014, data from the monitoring of both consent decrees revealed that Ohio had continued to use unlawful solitary confinement on children at Scioto and in the other facilities. 

The Violent Crime Control and Law Enforcement Act of 1994 authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional or federal statutory rights of youth in juvenile justice institutions.  Please visit the Civil Rights Division’s website to learn more about this act and other laws the Civil Rights Division enforces.

This agreement is due to the efforts of the Civil Rights Division’s Special Litigation Section, the U.S. Attorney’s Office of the Southern District of Ohio and the U.S. Attorney’s Office of the Northern District of Ohio.  The agreement was also due to the work of plaintiffs’ counsel in S.H., Alphonse Gerhardstein of Gerhardstein & Branch Co. LPA and Kim Tandy of the Children’s Law Center Inc., and to the leadership of DYS.

COLUMBUS, Ohio – Marion M. Kimball, 51, of Newark, Ohio, was sentenced in U.S. District Court to 144 months in prison and 10 years of supervised release for receiving child pornography.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down today by Senior U.S. District Judge George C. Smith.

According to court documents, investigators executed a search warrant at Kimball’s home in February 2015 after undercover agents observed child pornography files being shared via peer-to-peer file-sharing programs at an IP address registered to the home. The titles of the files indicate the pornography involved children ages seven years old to 10 years old.

In total, investigators discovered more than 11,000 images and 230 videos of child pornography.

Kimball pleaded guilty on July 31, 2015 to one count of receiving child pornography.

This case is being brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

U.S. Attorney Stewart commended the cooperative investigation by the FBI Columbus Child Exploitation Task Force, which includes officers from the Westerville, Reynoldsburg and Powell Police Departments as well as Assistant United States Attorney Jessica H. Kim, who is representing the United States in this case. 

COLUMBUS, Ohio – Demonte Johntrell Latimore, 28, of St. Paul, Minn, was sentenced in U.S. District Court to 48 months in prison, to be served concurrently with a separate federal gun sentence, for threatening to impair the confidentiality of information obtained from a protected computer without authorization.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division and Newark Police Chief Barry Connell, announced the sentence handed down today by U.S. District Judge Michael H. Watson.

According to court documents, a female student in a college library in Newark, Ohio had her laptop computer stolen. A few weeks later, the victim received an email from an unknown subject using the email address “iwant300dollars” that indicated that the sender had something the victim wanted back “very badly” and commented that the victim “had a lovely body.”

Latimore found explicit photos and a video of the victim that were on the laptop in a password protected folder.  One of those photos was sent to the victim with a demand for $3,000 to prevent all of the photos and video being sent to her friends, co-workers and family as well as “every porn site available.”

The defendant created a Facebook account as “Payme ForSilence” and eventually posted a number of nude pictures and sex video of the victim and her boyfriend on the Facebook account.  The FBI was able to get the Facebook account closed.  Latimore and possibly others also continued to harass the victim via email, demanding money to prevent his wider distribution of the material.

Latimore was charged by information and pleaded guilty on July 8, 2015 to the one count of the computer extortion involving the confidential pictures and video.

U.S. Attorney Stewart commended the cooperative investigation by the FBI and Newark Division of Police, as well as Assistant United States Attorney Deborah Solove, who is representing the United States in this case. 

COLUMBUS, Ohio – Carl R. Smith, Jr., 30, of Columbus, Ohio, was sentenced in U.S. District Court to 200 months in prison for transportation in interstate commerce for purposes of prostitution and possession of a firearm by a previously convicted felon. He was also sentenced to an additional 24 months for violating his existing supervised release, making his total sentence 224 months.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine and members of the Central Ohio Human Trafficking Task Force, which is part of the Ohio Attorney General’s Ohio Organized Crime Investigations Commission, including Marlon V. Miller, Special Agent in Charge, U.S. Homeland Security Investigations, Columbus Police Chief Kim Jacobs and Colonel Paul Pride of the Ohio State Highway Patrol announced the sentenced handed down yesterday by U.S. District Judge Michael H. Watson.

According to court documents, during a traffic stop in July 2013 in which Smith was driving, law enforcement officers discovered an adult female passenger had a plastic baggie containing cocaine base and heroin. Based on information previously obtained through surveillance and confidential sources, it was believed that Smith was involved in directing the prostitution activities of the passenger and other females and that he had used the passenger during the traffic stop to conceal his supply of cocaine base and heroin.       

Members of the Central Ohio Human Trafficking Task Force and the Columbus Police Department conducted an investigation of Smith’s suspected criminal activities between July 2013 and February 2014.  A search warrant was executed at Smith’s residence in February 2014.  While searching the residence, officers discovered Smith, who had been previously convicted of four felony offenses, was carrying a pistol. Numerous additional firearms and narcotics were seized from Smith’s residence during the execution of the search warrant.

During the course of the investigation leading up to the execution of the search warrant, officers conducted electronic and physical surveillance of Smith’s activities.  During this surveillance, officers observed that Smith frequented various hotels in the Columbus, Ohio area where he had prostitutes working for him. Continued surveillance revealed that Smith also facilitated travel out of state to Pittsburgh and New York City, where his prostitutes engaged in sexual activity for hire. Smith attracted clients/johns for his prostitution business by posting numerous advertisements in the escort section of the Internet site backpage.com.

“The circumstances surrounding the defendant’s offenses showed the defendant to be a master of manipulating, dominating and preying on the weak and vulnerable, and using those he brought under his control purely for his own financial benefit,” Assistant U.S. Attorney Heather A. Hill told the court. “At its core, this case involves the defendant’s dedication to his own bottom line: he sold human beings and maintained his supply of human chattel through violence and the threat of drug withdrawal.”

Smith pleaded guilty to transportation in interstate commerce for purposes of prostitution and possession of a firearm by a previously convicted felon in April.

U.S. Attorney Stewart commended the cooperative investigation by the Central Ohio Human Trafficking Task Force, as well as Assistant United States Attorneys Heather A. Hill and Salvador A. Dominguez, who are representing the United States in this case. 

COLUMBUS, Ohio – U.S. Attorney Carter M. Stewart announced today that the Southern District of Ohio collected nearly $55 million in criminal and civil actions in Fiscal Year 2015.  Of this amount, nearly $46 million was collected in criminal actions and approximately $9 million was collected in civil actions.

Additionally, the Southern District of Ohio worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $49.7 million in cases pursued jointly with these offices. Of this amount, approximately $7 million was collected in criminal actions and $42.5 million was collected in civil actions.

Attorney General Loretta E. Lynch announced yesterday that the Justice Department collected $22.9 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015.

The more than $22.9 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.

"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch.  “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver.  I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”

“The collection figures in our district and across the country highlight the Justice Department’s work to protect our citizens and safeguard taxpayer resources,” U.S. Attorney Stewart said. “We are dedicated to providing a valuable return on investment to the American people.”

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

Additionally, the U.S. Attorney’s office in Southern Ohio, working with partner agencies and divisions, collected nearly $18 million in asset forfeiture actions in FY 2015.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

COLUMBUS, Ohio – Dr. David Rath, 60, of Alexandria, Ohio, and Karen Climer, also known as Karen D. Muncey and Karen D. Long, 58, of Columbus, each pleaded guilty in U.S. District Court to one count of conspiracy to illegally distribute oxycodone.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA) and , announced the plea entered into today before U.S. Magistrate Judge Elizabeth Preston Deavers.

According to court documents, Rath was employed as a physician and Climer as an administrative employee at Columbus Southern Medical Clinic, which purported to be a “family medical practice.”

Rath supervised two physician assistants who were each seeing between 50-100 patients a day. Climer scheduled between 200 and 400 patients a day total, knowing that many of the patients were drug seekers addicted to oxycodone. The practice prescribed pain killers to these patients without properly examining, diagnosing and treating them. The clinic focused on a drug seeking patient population that was addicted to pain medications and other controlled substances.

It is estimated that half of the patients receiving controlled substances at the clinic were receiving them unlawfully. Climer also falsified drug tests for patients who tested positive for illegal drugs or who did not have the prescribed controlled substances in their system.

Each defendant faces a maximum prison sentence of 20 years in prison and a potential maximum fine of $1 million.

U.S. Attorney Stewart commended the cooperative investigation by the DEA Tactical Diversion Squad and Ohio Bureau of Workers Compensation, as well as Assistant United States Attorney Kenneth F. Affeldt and Department of Justice Trial Attorney Richard M. Rolwing, who are representing the United States in this case. 

COLUMBUS, Ohio – Richard Spriggs, Sr., 47, of Columbus, was sentenced in U.S. District Court to 46 months in prison for conspiring to possess with intent to distribute marijuana, conspiring to commit money laundering and for the unlawful possession of a firearm. In addition, Spriggs was ordered to forfeit approximately $86,000 in cash, firearms and ammunition. Spriggs previously pleaded guilty to these charges on August 27, 2015.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Agency (DEA), Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office and Columbus Police Chief Kim Jacobs, announced the sentence handed down today by Senior U.S. District Judge George C. Smith.

According to court documents, Spriggs and others in an organization were responsible for distributing multiple kilograms of marijuana by use of Ohio residences, business fronts, commercial freight, semi tractor-trailers and vehicles. Spriggs and others transported in excess of 100 kilograms of marijuana to various places in Columbus, Ohio from suppliers in Houston, Texas. The drug shipments were disguised as hair care products, beauty supplies and whole grain rice.

During the execution of a search warrant, Spriggs and others were observed removing numerous packages, which contained approximately 500 kilograms of marijuana, that were concealed inside approximately 12-15 pool tables.

Spriggs used the drug proceeds to purchase assets and to fund bank accounts through the use of nominees. Spriggs purchased a residence by paying cash. In addition, Spriggs used pre-paid debit cards which he funded in another person’s name as his personal credit card and used them to purchase air travel, rent vehicles and pay for cellular telephone bills.

“The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs. Without these ill-gotten gains, the traffickers could not finance their organizations,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.

U.S. Attorney Stewart commended the cooperative investigation by law enforcement, as well as Assistant United States Attorney Kenneth F. Affeldt, who is representing the United States in this case.

CINCINNATI – Christopher Stegawski, 65, of Cleveland, and John Randy Callihan, 58, of Portsmouth, Ohio, were sentenced in U.S. District Court for running “pill mills.” Stegawski was sentenced yesterday to 160 months in prison and 10 years of supervised release. Callihan was sentenced today to 60 months in prison and five years of supervised release.

Carter M. Stewart, United States Attorney for the Southern District of Ohio; Ohio Attorney General Mike DeWine; Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), A.J. Groeber, Executive Director of the State Medical Board of Ohio; and Steven W. Schierholt, Executive Director, Ohio Board of Pharmacy announced the sentences handed down today by U.S. District Judge Michael R. Barrett.

According to court testimony, beginning about November 2009 until May 2012, Stegawski and Callihan owned and/or operated a business initially known as Eastside Medical Specialist in Dayton, Ohio. In February 2010, the business moved to Lucasville, Ohio and the name was changed to Lucasville Medical Specialist. Stegawski took over the ownership of Lucasville Medical Specialist and listed his partner and co-conspirator, Callihan, as an employee.

Stegawski represented himself as a chronic pain management doctor at these clinics and an unnamed clinic located in Southpoint, Ohio. The clinics operated as “pill mills” by selling prescriptions for controlled substances, primarily oxycodone, without a legitimate need for the prescriptions. There was no valid doctor-patient relationship and many of the prescriptions were openly sold and diverted.

Stegawski had a DEA registration number that allowed him to order controlled substances for the clinics. Stegawski received a medical degree in Warsaw, Poland in 1977 and was purportedly trained to specialize in anesthesiology. The Ohio Board of Pharmacy has suspended and is pursuing permanent revocation of Stegawski’s license to practice medicine.

As many as 40 patients would visit the clinics each weekday.  In some cases, customers traveled in excess of 200 miles roundtrip to obtain prescriptions from the doctor. Stegawski knowingly prescribed large amounts of prescription drugs to drug abusers and addicts, who were charged $200 cash per visit and received at most a cursory examination.

During the tenure of the pain clinics, many local pharmacies refused to honor any prescriptions written by Stegawski due to the “large quantities of narcotics” and his “catering to customers with prior drug abuse and arrest histories.”

A United States District Court jury convicted Stegawski in February of one count of conspiracy to distribute and dispense prescription drugs, one count of conspiracy to launder money and two counts of maintaining a place for illegal distribution of drugs.

Stegawski and Callihan were charged in an 11-count-indictment by a grand jury on May 16, 2012. Callihan pleaded guilty to conspiracy to distribute and dispense prescription drugs and money laundering.

Stewart commended the cooperative investigation by agents and officers of the agencies named above including IRS Special Agent Robert Mullins, Ohio Board of Pharmacy Agent Jesse Wimberly, the Ohio Bureau of Criminal Investigation in Attorney General DeWine’s Office, the DEA, Lawrence County Sheriff Jeff Lawless and the Sheriff’s Drug Task Force, Scioto County Sheriff Marty Donini, and the Riverside Police Department, as well as Criminal Chief Kenneth L. Parker and Assistant U.S. Attorney Timothy D. Oakley, who prosecuted the case.

DAYTON – Lance Ealy, 29, of Dayton, was sentenced in U.S. District Court to 124 months in prison, three years of supervised release and ordered to pay approximately $61,000 in restitution following convictions for access device fraud, wire fraud, aggravated identity theft and related charges arising from a sophisticated scheme in which he purchased hundreds of stolen identities online (including specifically targeting identities of the elderly and disabled) and used the identities to file more than 150 fraudulent federal income tax returns seeking refunds to which he was not entitled. 

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Mark Porter, Special Agent in Charge, U.S. Secret Service announced the sentenced handed down last Friday by U.S. District Judge Michael Barrett.

After an initial investigation by the United States Secret Service determined that Ealy had purchased stolen identities from an illicit online source, he was arrested on a federal complaint in October 2013. A federal grand jury subsequently indicted Ealy in November 2013, charging him with one count of knowingly possessing 15 or more access devices with intent to defraud.

A further investigation by both Secret Service and the IRS determined that Ealy was using stolen identities that he had purchased online to file fraudulent federal tax returns and open fraudulent bank accounts in which to deposit the fraudulent tax refunds.

The investigation also determined that Ealy continued to engage in fraudulent activities while on bond, including, but not limited to using stolen personal identifying information to open fraudulent bank accounts, conduct fraudulent purchases using the victim's personal accounts, and opened financial accounts at numerous institutions.

As a result of Ealy’s conduct, Judge Barrett revoked Ealy’s bond in July 2014. The Secret Service’s and IRS’ additional investigation also resulted in a federal grand jury returning a Second Superseding Indictment against Ealy in September 2014.

Following a nearly two-week trial, a jury in the Southern District of Ohio convicted Ealy of all 46 charges in the Second Superseding Indictment in November 2014, including on one count of illegally possessing 15 or more unauthorized access devices, 11 counts of filing false claims for income tax refunds with the IRS, 14 counts of wire fraud, 14 counts of aggravated identity theft, one count of mail fraud, and one count of using unauthorized access devices to obtain $1,000 or more in a one-year period. An access device includes things such as payment cards and bank account numbers used to access financial accounts.

According to the testimony and evidence presented at trial, between approximately January 2013 and October 2013, Ealy engaged in a sophisticated scheme in which he electronically filed at least 150 fraudulent federal income tax returns, including returns filed using the personal information of others that he had unlawfully acquired from an illicit online source.

Ealy opened dozens of bank accounts at multiple financial institutions using the names and social security numbers of other individuals – without their knowledge or permission – in order to electronically deposit the fraudulent tax refunds. The evidence at trial also showed Ealy specifically targeted vulnerable individuals, including the elderly and disabled, who were less likely to realize that their identities had been stolen to file fraudulent tax returns or open fraudulent bank accounts. Ealy was also convicted on the charges (wire fraud and aggravated identity theft) arising from his fraudulent conduct while on bond.

During the course of the trial, Ealy became a fugitive after failing to appear on November 17, 18 and 19, 2014 (Ealy had been placed back on bond in October 2014). It was later determined that Ealy had removed his electronic monitoring device on November 15, 2014 and fled while under bond conditions. He was ultimately recaptured in late March 2015 in the Atlanta, Georgia area by the United States Marshal’s Service.

In June 2015, Ealy was indicted by a grand jury in the Southern District of Ohio on three counts of failure to appear in violation of 18 U.S.C. § 3146. He was subsequently convicted on all three counts following a bench trial before U.S. District Court Judge Thomas M. Rose that took place on October 22, 2015. Judge Rose issued a written verdict on November 4, 2015.

Ealy faces a sentence of up to 10 years in prison for his failure to appear convictions, which must run consecutive to the 124 month sentence that has been imposed by Judge Barrett. Judge Rose has scheduled sentencing in Ealy’s failure to appear case for February 6, 2016.

"Today’s announcement exemplifies IRS Special Agents' intense focus on the rigorous pursuit of identity theft and refund fraud," said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. "Lance Ealy perpetuated an elaborate scheme driven by insatiable greed and a blatant disregard for the tremendous damage inflicted on innocent victims. Be assured that IRS Criminal Investigation, together with our partners at the U.S. Attorney's Office and the United States Secret Service, will hold those who engage in similar behavior fully accountable."

U.S. Attorney Stewart commended the investigation of this case by the Secret Service and IRS-Criminal Investigation and Assistant U.S. Attorneys Alex R. Sistla and Andrew J. Hunt, who prosecuted the case.

COLUMBUS, Ohio – Rita Green, 55, of Gahanna, Ohio, pleaded guilty in U.S. District Court to theft of public money by illegally receiving Department of Veterans Affairs Dependency Indemnity Compensation benefits.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Gavin McClaren, Resident Agent in Charge, Department of Veterans Affairs Office of Inspector General (VA-OIG), Cleveland, Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the plea entered into today before U.S. District Judge Algenon L. Marbley.

According to court documents, Green kept $89,646.22 of Department of Veterans Affairs Dependency Indemnity Compensation benefits to which she knew she was not entitled. Green’s mother was a recipient of the benefits, which are paid to surviving spouses of veterans who died in the line of duty or died from a disease or injury incurred or aggravated while on active duty. Those benefits were paid monthly to a bank account in the mother’s name.

Green’s mother died in 2009 but the VA, unaware of her death, continued depositing money into her account.  Green kept the account open and converted this money to her own use by withdrawing funds and making purchases using a debit card in her mother’s name.  Green also failed to disclose these VA payments on a Free Application for Federal Student Aid (FAFSA) submitted in 2012.

Theft of public money is a crime punishable by up to 10 years in prison and a $250,000 fine.

U.S. Attorney Stewart commended the investigation of this case by the VA-OIG and the FBI, and Assistant U.S. Attorney Peter Glenn-Applegate, who is prosecuting the case.

COLUMBUS, Ohio – Douglas E. Cowgill, 60, of Westerville, Ohio, pleaded guilty in U.S. District Court to wire fraud, theft or embezzlement from employee benefit plans, and perjury.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, James Vanderberg, Special Agent in Charge, U.S. Department of Labor – Office of the Inspector General, and Joseph Rivers, Cincinnati Office Director of the U.S. Department of Labor - Employee Benefits Security Administration, announced the plea entered into today beforeU.S. District Judge Michael H. Watson.

From July 2013 through August 2014, Cowgill was president and sole owner of Professional Investment Management (PIM), Inc. in Columbus, where he had been employed since July 1981.Cowgill used his positions at PIM to defraud investors and use their funds for his own use. From March 2008 through October 2013, he misappropriated approximately $840,575. He manually altered account balances in company software and wired the misappropriated funds to an account for his own use. Cowgill paid various personal obligations with the money, depositing the money into his bank accounts, bank accounts of his wife, and bank accounts of the Northwest Swim Club, a non-profit swim club in Columbus for which he served as the treasurer. 

PIM had the funds of approximately 300 individual clients under management, and Cowgill’s fraudulent scheme harmed at least 125 victims.

Most of the victims had their money in one of approximately 15 retirement plans. Each of the retirement plans was a qualified employee pension benefit plan under the Employee Retirement Income Security Act of 1974, and Cowgill pleaded guilty to theft or embezzlement from employee benefit plans.

On January 23, 2014, Cowgill lied under oath before officers of the Securities and Exchange Commission (SEC) while the SEC was conducting an investigation to determine whether there had been violations of federal securities laws in connection with PIM.

In January 2014, in Columbus, Ohio, Cowgill gave a deposition in connection with the SEC’s investigation. As part of the deposition, Cowgill took an oath that he would testify truthfully and that all materials prepared by him in anticipation of his testimony were accurate and complete.

In connection with the deposition, Cowgill prepared responses to a background questionnaire that, in part, asked him to list all accounts in his name, in which he had any beneficial interest, or over which he had any control. In response, Cowgill failed to disclose his control of over five bank accounts associated with the Northwest Swim Club for which he was an authorized signatory. During his sworn deposition, Cowgill affirmed that his answers to the questionnaire were accurate, and again failed to disclose the five Northwest Swim Club accounts to the officers of the SEC. At the time of the deposition, Cowgill knew that the Northwest Swim Club had been a recipient of a substantial portion of the funds misappropriated by him. In doing so, Cowgill attempted to conceal his misappropriation of client funds from investigators.

Cowgill faces a maximum sentence of 20 years in prison for wire fraud. Theft or embezzlement from employee benefit plansand perjury are each crimes punishable by up to five years in prison. 

U.S. Attorney Stewart commended the cooperative investigation by the FBI and the U.S. Department of Labor - Office of the Inspector General and U.S. Department of Labor - Employee Benefits Security Administration, as well as Assistant United States Attorney Peter Glenn-Applegate, who is representing the United States in this case. U.S. Attorney Stewart also commended the SEC for its work on the related civil matter, prior to the initiation of this criminal case.

WASHINGTON - A Liberty Township, Ohio, resident pleaded guilty to one count of obstructing and impeding the Internal Revenue Code, announced Acting Deputy Assistant Attorney General Bruce M. Salad of the Justice Department’s Tax Division.

According to court documents, Kyle Wade, 44, was the former vice-president of franchising for Instant Tax Service (ITS), a tax preparation business that claimed to have over 1,100 franchise locations throughout the United States in 2009.  Wade formerly owned multiple ITS franchises.

From Jan. 1, 2004 through Nov. 1, 2012, Wade and another individual executed a scheme to obstruct the Internal Revenue Service (IRS), wherein numerous ITS franchises filed false federal income tax returns without the permission of their taxpayer clients and without receiving a valid W-2 form from each client.  The false returns included false and inflated sole proprietorship Schedule C income in an attempt to increase the Earned Income Tax Credit refund.  Wade and another individual also created and presented false documents with the IRS, such as phony W-2 forms that were created by ITS employees using tax preparation software and various other false IRS forms containing forged signatures.

At his sentencing on a date to be determined later, Wade faces a statutory maximum sentence of three years in prison and a fine of $250,000.

The Tax Division commended the efforts of special agents of IRS – Criminal Investigation, who investigated the case and Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Tax Division, and Assistant U.S. Attorney Jessica Knight of the Southern District of Ohio, who are prosecuting the case.

DAYTON – Lance Ealy, 29, of Dayton, was convicted of three counts of failure to appear. U.S. District Court Judge Thomas M. Rose issued his verdict today after a bench trial that took place on October 22, 2015.

A jury in the Southern District of Ohio convicted Ealy in November 2014 of buying stolen identities online and using the identities to file more than 150 fraudulent federal income tax returns seeking refunds to which he was not entitled.

Ealy failed to appear for his jury trial on November 17, 18 and 19, 2014. He became a fugitive on November 15, 2014, after he removed his electronic monitoring device and fled while under bond conditions. He was recaptured in late March 2015 in Georgia.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, United States Marshal Peter Tobin, Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Mark Porter, Special Agent in Charge, U.S. Secret Service, announced the verdict reached today.

According to court testimony in the jury trial, between approximately January 2013 and October 2013, Ealy electronically filed at least 150 fraudulent federal income tax returns, including returns filed using the personal information of others that he had unlawfully acquired from an illicit online source. Ealy opened dozens of bank accounts at multiple financial institutions using the names and social security numbers of other individuals – without their knowledge or permission – in order to electronically deposit the fraudulent tax refunds.

The jury convicted Ealy of 46 charges, including one count of illegally possessing 15 or more unauthorized access devices, 11 counts of filing false claims for income tax refunds with the IRS, 14 counts of wire fraud, 14 counts of aggravated identity theft, one count of mail fraud, and one count of using unauthorized access devices to obtain $1,000 or more in a one-year period. An access device includes things such as payment cards and bank account numbers used to access financial accounts.

Ealy faces up to 10 years in prison on each count of possessing 15 or more unauthorized access devices with intent to defraud and using unauthorized access devices to obtain items of $1,000 or more in value; up to five years in prison on each count of filing false claims for income tax refunds with the IRS; up to 20 years in prison on each count of wire fraud and each count of mail fraud; and mandatory two-year sentences on each count of aggravated identity theft that must run consecutive to whatever sentence may ultimately be handed down. Each count of conviction also carries a fine of up to $250,000. Ealy is scheduled to be sentenced before Judge Michael R. Barrett on November 20, 2015 for his convictions in the underlying case.

He faces a sentence of up to 10 years in prison for his failure to appear convictions, which must run consecutive to the sentence of imprisonment for any other offense. Judge Rose has scheduled sentencing in Ealy’s failure to appear case for February 6, 2016.

Ealy was initially charged in a federal complaint filed on October 28, 2013 following an investigation by Secret Service agents that revealed that Ealy had purchased stolen identities from an illicit online source. A federal grand jury initially indicted Ealy in November 2013, charging him with one count of knowingly possessing 15 or more access devices with intent to defraud.

U.S. Attorney Stewart commended the investigation of this case by the United States Marshals Service, Secret Service and IRS-Criminal Investigation agents, and Assistant U.S. Attorneys Alex R. Sistla and Andrew J. Hunt, who are prosecuting the case.

COLUMBUS, Ohio – Melissa Daley, 45, of Nashport, Ohio, pleaded guilty in U.S. District Court to one count each of filing a false income tax return with the Internal Revenue Service (IRS), wire fraud and money laundering.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the plea entered into today before U.S. District Judge Gregory L. Frost.

According to court documents, since 1992 Daley acted as the Executive Director for the Center for Child and Family Development (CCFD), which was located in Zanesville, Ohio.  CCFD, a non-profit organization, provided foster care and residential case services to children as well as adult care services.

In June 2009, on behalf of CCFD, Daley applied to the Ohio Department of Developmental Disabilities (DODD) to allow for CCFD to be a part of the Individual Options Waiver Program (I/O Waiver Program).  This program allowed for continued care of adult individuals with mental or developmental disabilities and permitted qualified individuals to remain in their homes and obtain support for their disabilities rather than requiring them to live in an Intermediate Care Facility for the Mentally Retarded.  The application was approved by DODD.

Between March 2011 and November 2012 Daley devised a scheme to defraud CCFD.  Daley faxed a change of direct deposit form to the agency responsible for processing payments for the I/O Waiver Program, which was Ohio Shared Services (OSS).  Included in the fax to the OSS was a request to change the direct deposit of I/O Waiver Program funds from the CCFD operating account into a different account.  Daley included in her request a copy of a bank check and a bank letter purportedly signed by a bank representative confirming that the new account was a business account in the name of CCFD.  However, the letter Daley submitted was fictitious, the bank representative was an individual who never worked for the bank and the bank account was not a business account in the name of CCFD, but rather, a personal checking account for Daley.  In addition, Daley altered the bank check she submitted to OSS to make it appear as though the bank account belonged to CCFD and not to her.  As a result of this fraudulent scheme, Daley received $71,977.31 of CCFD’s I/O Waiver funds that were deposited into her personal checking.

In addition, in August 2011, after having resigned from CCFD, Daley opened a new bank account in the name of CCFD and claimed she was the President of the organization.  After opening the account, Daley again faxed a change of direct deposit form to OSS to have CCFD I/O Waiver Program funds deposited into her bank account.  Once Daley received CCFD’s I/O Waiver funds she would immediately transfer the funds into another bank account in the name of Community Base Services, which was a newly formed entity created by Daley.  As a result of this fraudulent scheme, Daley received an additional $296,115.00 of CCFD’s I/O Waiver funds into her personal bank account

Daley did not report any of CCFD’s I/O Waiver funds she fraudulently obtained on her 2011 or 2012 income tax returns.  The total unreported income on Daley’s 2011 and 2012 income tax returns was $360,182.37 resulting in additional taxes due and owing to the IRS in the amount of $103,043.07.

“Operating a non-profit program does not give you a license to steal,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.  “The conduct detailed in this case was egregious.  This program was designed to help children and adults with their much needed continued care, and this defendant defrauded them for her own personal gain.”

Filing a false income tax return with the IRS is punishable by up to five years in prison and a $250,000 fine.  Wire fraud is a crime punishable by up to 20 years in prison and $250,000 fine. Money laundering carries a maximum sentence of 10 years in prison and a $250,000 fine.

U.S. Attorney Stewart commended the cooperative investigation by the FBI and IRS, as well as Assistant United States Attorney Kenneth F. Affeldt, who is representing the United States in this case.

COLUMBUS, Ohio – Antonio L. Sibley, 38, of Akron, Ohio, was sentenced in U.S. District Court to 330 months in prison and 15 years of supervised release for production of child pornography.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, along with members of the Central Ohio Human Trafficking Task Force, including Ohio Attorney General Mike DeWine, Marlon V. Miller, Special Agent in Charge, U.S. Homeland Security Investigations, Colonel Paul Pride of the Ohio State Highway Patrol and Columbus Police Chief Kim Jacobs announced the sentence handed down today by U.S. District Judge Gregory L. Frost.

Sibley was convicted by a U.S. District Court jury following a weeklong trial in May.

According to court testimony, in July 2014, while Sibley was harboring a 17-year-old girl in a motel room in Whitehall, Ohio, he took sexually explicit photographs of her and advertised her on internet websites for paid sexual services. Members of the Human Trafficking Task Force found the girl during an undercover operation on July 31, 2014, and thereafter found the pornographic photographs Sibley had taken on a phone that was in the motel room.  The victim testified that she and Sibley had been involved in a sexual relationship since she was 15 years old, and that Sibley had taken the pornographic photographs of her. 

The jury convicted Sibley of production of child pornography, a crime punishable by a sentence ranging from a mandatory minimum 15 years in prison to 30 years in prison. The jury could not reach a verdict on a second charge of sex trafficking of a minor.

Sibley was arrested on August 11, 2014, by members of the Central Ohio Human Trafficking Task Force at the Casa Villa Motel in Whitehall, Ohio. He was indicted on September 11, 2014.

U.S. Attorney Stewart commended the investigation of this case by the Central Ohio Human Trafficking Task Force, which was formed in 2012 and is part of the Ohio Attorney General’s Ohio Organized Crime Investigations Commission, and also includes authorities from the Attorney General's Bureau of Criminal Investigation (BCI), Columbus Division of Police, Homeland Security Investigations (HSI), Powell Police Department, Federal Bureau of Investigation and the Delaware County Prosecutor's Office. Assistant United States Attorney Heather A. Hill and Special Assistant United States Attorney General Brant Cook, director of the Ohio Attorney General’s Crimes Against Children Initiative, represented the government in this case.

COLUMBUS, Ohio – Four Columbus men pleaded guilty to murder in connection to a racketeering case involving the organized criminal enterprise known as the Short North Posse.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), Donald J. Soranno, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Franklin County Prosecutor Ron O’Brien, and Columbus Police Chief Kim Jacobs, announced the pleas entered into today before U.S. District Judge Algenon L. Marbley.

Joseph Hill, 31, Christopher V. Wharton, 25, Troy A. Patterson, 24, and Ishmael Bowers, 33, each pleaded guilty to one count of murder in aid of racketeering. Hill also pleaded guilty to a second count of murder in aid of racketeering and conspiracy to commit racketeering. Wharton also pleaded guilty to possession with intent to distribute cocaine and marijuana and possession with intent to distribute marijuana.

Each of the defendants faces a potential maximum sentence of life in prison.

The four were charged by a superseding indictment in October 2014. Twenty individuals total were indicted in the racketeering case with charges that included murders, attempted murders, drug trafficking, weapons trafficking, extortion and robbery.

U.S. Attorney Stewart commended the two-year long investigation by federal, state and local law enforcement agencies, including the FBI, DEA, ATF, Columbus Police, Franklin County Sheriff Zach Scott’s Office, and Franklin County Prosecutor Ron O’Brien’s Office. Fairfield County Prosecutor Gregg Marx, Licking County Prosecutor Kenneth Oswalt, Muskingum County Prosecutor D. Michael Haddox, Ross County Prosecutor Matthew S. Schmidt, law enforcement leaders from those counties, and officials of the Ohio Department of Rehabilitation and Correction, as well as Assistant U.S. Attorneys David DeVillers, Kevin Kelley and Brian Martinez, as well as Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who are prosecuting the case.

DAYTON – Amanda R. Pappert, 31, of Kettering, Ohio, was sentenced in U.S. District Court to 18 months in prison and three years of supervised release for conspiracy to possess and distribute Oxycodone.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine, Rocky Nelson, Director of the Ohio Organized Crime Investigations Commission, Wendell Willcox, Director, Tactical Crime Suppression Unit, Anthony Mohat, Supervising Agent in Charge, U.S. Department of Agriculture Office of Inspector General, Chicago Division, Kettering Police Chief Christopher Protsman, Centerville Police Chief Bruce Robertson and Germantown Police Chief Roy McGill, Jr. announced the sentence handed down today by U.S. District Judge Thomas M. Rose.

The Ohio Organized Crime Investigations Commission in Attorney General DeWine’s Office investigated the case.

According to court documents, Pappert became part of a conspiracy to fabricate, falsify and forge various Dayton based physicians’ prescriptions for Oxycodone, Hydrocodone and Alprazolam. The group would fill the prescriptions at various retail pharmacies throughout the Greater Dayton area. Once obtained, the prescription drugs would thereafter be sold to various drug dealers and addicts in return for cash and illegal narcotics.

Pappert pleaded guilty on June 5 to one count of conspiracy to possess and distribute Oxycodone. She was charged by one-count bill of information on April 21. Pappert was also ordered to complete 100 hours of community service.

Co-defendants in the conspiracy include: Christian P. Fannon, Brian A. Siler, Sandy Earnstean Bryson, Elaina Marie Morocho, Mandy Marie Ernestine McGhee, Sean Aaron Ring, Justin Michael Crouch and Candice Page Crouch.

U.S. Attorney Stewart commended the cooperative investigation by the task force agencies which include the Internal Revenue Service Criminal Investigation (IRS), the U.S. Department of Agriculture Office of Inspector General – Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Ohio Bureau of Criminal Investigation (BCI), the Ohio Investigative Unit, and the police departments in Centerville, Kettering, West Carrollton, Moraine and Oakwood, and the Tactical Crime Suppression Unit. He also commended Assistant U.S. Attorney Dwight Keller, who prosecuted the case.

WASHINGTON – The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices that were implanted in Medicare patients in violation of Medicare coverage requirements, the Department of Justice announced today.

“While recognizing and respecting physician judgment, the department will hold accountable hospitals and health systems for procedures performed by physicians at their facilities that fail to comply with Medicare billing rules,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health.”  

 An implantable cardioverter defibrillator, or ICD, is an electronic device that is implanted near and connected to the heart.  It detects and treats chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm.  It is similar in function to an external defibrillator (often found in offices and other buildings) except that it is small enough to be implanted in a patient’s chest.  Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.

 Medicare coverage for the device, which costs approximately $25,000, is governed by a National Coverage Determination (NCD).  The Centers for Medicare and Medicaid Services implemented the NCD based on clinical trials and the guidance and testimony of cardiologists and other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates.  The NCD provides that ICDs generally should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty.  The medical purpose of a waiting period -40 days for a heart attack and 90 days for bypass/angioplasty - is to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary.  The NCD expressly prohibits implantation of ICDs during these waiting periods, with certain exceptions.  The Department of Justice alleged that from 2003 to 2010, each of the settling hospitals implanted ICDs during the periods prohibited by the NCD. 

 “The settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.  “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine.  In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date.   Our office will continue to vigilantly protect the Medicare program from potential false billing claims.”

 “Working as a team with the Department of Justice to investigate and settle false billing claims of this magnitude has resulted in substantial recoveries to Medicare and the successful enforcement of Medicare’s coverage requirements for these procedures,” said Inspector General Daniel Levinson of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG).

 The 70 settlements, representing nearly 500 hospitals, are listed on the attached chart.  Most of the settling defendants were named in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant.  The lawsuit was filed in federal district court in the Southern District of Florida by Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant.  The whistleblowers have received more than $38 million from the settlements.  The Department of Justice is continuing to investigate additional hospitals and health systems.

 The settlements were the result of a coordinated effort among the U.S. Attorney’s Office of the Southern District of Florida, the Civil Division’s Commercial Litigation Branch and HHS-OIG, Office of Investigations and Office of Counsel to the Inspector General.

 This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs.

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

WASHINGTON – The Department of Justice announced that a South Florida man pleaded guilty in U.S. District Court in Cincinnati, Ohio, in connection with the prosecution of a nationwide prescription drug diversion scheme.

Ricardo Alfredo Jurado, 59, of Miami Beach, pleaded guilty before U.S. District Court Judge Timothy S. Black to one count of conspiracy to commit mail and wire fraud.

Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division; U.S. Attorney Carter M. Stewart of the Southern District of Ohio; Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI), Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS), Cincinnati Field Office, announced the guilty plea.

 “Prescription drug diversion compromises the integrity of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer.  “This Miami-based supplier sold tens of millions of dollars of illegally diverted drugs, which ended up on the shelves of pharmacies and in the medicine cabinets of American consumers.”

“The drug diversion activities charged in this case create unacceptable public health risks,” said U.S. Attorney Stewart.  “Patients purchased what they believed were FDA-approved prescription drugs that had remained in regulated distribution channels intended to protect against misbranded, adulterated, sub-potent, improperly handled, counterfeit and stolen products.  Instead, these customers received drugs of unknown quality and origin.”

Jurado sold illegally diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC).  On May 6, Miller and MIC, along with Artur Stepanyan and Mihran Stepanyan, were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, ten counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license.  Those charges are still pending.  Jurado is the eighth co-conspirator who pleaded guilty for participating in the drug diversion scheme involving Miller and MIC.

Miller and MIC sold the prescription drugs obtained through Jurado – along with multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio.  Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico.  These false pedigrees covered up the illegitimate sources of the drugs – various illicit suppliers, including Jurado – and falsely stated that B&Y was an authorized distributor of the prescription drugs.

According to court documents, from July 2007 through April 2014, Jurado facilitated the sale of tens of millions of dollars of illegally diverted prescription drugs to Miller and MIC.  Jurado obtained the drugs from other illicit, unlicensed sources in South Florida.  To hide Jurado’s involvement in the sale of these drugs, Jurado and Miller used a middleman, Fernando Galan.  On Oct. 14, Galan pleaded guilty for his role in the conspiracy.  Neither Jurado nor Galan was licensed to engage in the wholesale distribution of prescription drugs.

In connection with the sale of the diverted drugs, Jurado sent bank wiring instructions, frequently through his middleman Galan, directing Miller to send payments for the drugs.  During the course of the entire conspiracy, Jurado and his co-conspirators directed payments to more than 25 different bank accounts at banks in Mexico, Nicaragua, Canada, Florida and other locations.  During the course of the conspiracy, Miller and MIC wired more than $40 million to the bank accounts specified by Jurado.

This matter is being investigated by FDA-OCI and the USPIS.  Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in this case.

DAYTON – A federal grand jury has charged William M. Apostelos, 54, and Connie M. Apostelos, 50, both formerly of Springboro, Ohio, with charges related to fraudulently inducing hundreds of individuals from around the country to invest $70 million collectively.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) and Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service, James Vanderberg, U.S. Department of Labor Office of Inspector General, the U.S. Department of Labor Employee Benefits Security Administration and Brian Peters, Enforcement Attorney, Ohio Department of Commerce Division of Securities, announced the indictment returned October 29 and unsealed today.

The indictment alleges that beginning in 2009, The indictment alleges that beginning in 2009, and continuing for at least five years, the couple and others orchestrated a Ponzi scheme in the Dayton area in which nearly 480 investors lost more than $30 million collectively. William Apostelos operated and oversaw multiple purported investment and asset management companies in the Dayton area, including WMA Enterprises, LLC, Midwest Green Resources, LLC and Roan Capital. He allegedly falsely reported that he held a degree in mathematics and was a registered securities broker.

Connie Apostelos, also known as Connie Coleman, also operated and oversaw multiple companies in the Dayton area, including Coleman Capital, Inc. and Silver Bridle Racing, LLC. These companies were allegedly operated through improper use of investor funds to William Apostelos’ companies.

The couple recruited investors from 37 states to invest in WMA and Midwest Green, telling the investors that their money would be used for acquiring stocks or securities, purchasing real estate or land, providing loans to business and buying gold and silver.

When the defendants became late on interest payments to the victims, it is alleged that they advised that their bank account had been hacked, a bank mistakenly failed to wire payment and/or the deal the victim had invested in was temporarily on hold.

A number of investors have initiated legal action against the couple.

William and Connie Apostelos are charged with one count of conspiracy to commit mail and wire fraud, eight counts of mail fraud and 13 counts of wire fraud, each crimes punishable by up to 20 years in prison. They were also charged with two counts of money laundering, which each carry a potential 10-year prison sentence. They were also charged with one count of theft or embezzlement from employee benefit plan, which carries a maximum penalty of up to five years imprisonment. Finally, Connie Apostelos is charged separately with one count of making a false statement, which carries a maximum penalty of up to five years imprisonment.

U.S. Attorney Stewart commended the investigation of this case by law enforcement, and Assistant United States Attorneys Brent G. Tabacchi and Alex R. Sistla, who are prosecuting the case.

The couple is scheduled to appear before U.S. Magistrate Judge Michael J. Newman at 1:30pm today.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

STEUBENVILLE, Ohio – A grand jury in Columbus, Ohio has charged seven individuals for their roles in a Steubenville-area heroin-trafficking operation.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and William J. Ihlenfeld, II, United States Attorney for the Northern District of West Virginia, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), Jefferson County Prosecutor Jane M. Hanlin and members of the Jefferson County Drug Task Force and the Hancock-Brooke-Weirton Drug Task Force announced the indictment returned on October 20.

The yearlong investigation by local, state and federal law enforcement culminated in the seizure of eight firearms, three vehicles and approximately $110,000 of suspected narcotics proceeds.

According to court documents, investigators discovered the organization was responsible for street-level heroin sales in Steubenville, Ohio, including in the Market Street apartment public housing area, Weirton, W.Va., Wheeling, W.Va. and Bellaire, Ohio.

 

Those charged in the indictment include:

Frederick A. McShan, 35, of Steubenville, Ohio

Donae F. Grier, 37, of Irving, Texas

Christopher J. Bishop, 31, of Weirton, W.Va.

David McShan, 37, of Steubenville, Ohio

Kerris D. Moncrease, 30, of Weirton, W.Va.

Terrence J. Smith, 26, of Steubenville, Ohio

Perrier D. Coleman, 19, of Steubenville, Ohio

 

All of the defendants are scheduled for arraignment at 1pm today before U.S. District Chief Judge Edmund A. Sargus.

Conspiracy to possess with intent to distribute more than one kilogram of heroin is a federal crime punishable by 10 years to up to life in prison.

U.S. Attorneys Stewart and Ihlenfeld also commended the cooperative efforts of law enforcement, as well as OCDETF Chief Michael Hunter, Assistant United States Attorney Steve Vogrin and Special Assistant United States Attorney Jane Hanlin who are prosecuting the case.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

DAYTON – Michael Epley, 30, of Troy was sentenced to concurrent prison terms of 240 months each on one count of production of child pornography and one count of coercing and enticing a minor to engage in sexually explicit conduct.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers Special Agent in Charge, Federal Bureau of Investigation (FBI), and Troy Police Chief Charles C. Phelps, announced the sentence imposed yesterday by United States District Judge Timothy S. Black.

Epley was indicted in February 2015 on two federal charges of committing sexual acts with children. He pleaded guilty in April 2015 to photographing himself sexually abusing a four-year-old female in 2014 and to inducing a 13-year-old female to engage in sexual activity with him after exchanging conversations and sexually explicit pictures with her over the internet between November 2013 and July 2014. Epley has two previous convictions in 2013 and 2014 involving minor children in Troy, Ohio and is currently serving a state prison sentence for the latter conviction.

Epley will be on supervised release for the rest of his life after serving his federal prison term.

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

U.S. Attorney Stewart commended the investigation of this case by FBI agents and Troy Police investigators, and Assistant United States Attorney Kyle Healey, who prosecuted the case.

CINCINNATI – James T. Hammes, 53, formerly of Lexington, Kentucky, pleaded guilty in U.S. District Court to one count of wire fraud and has agreed to pay nearly $7.7 million in restitution, specifically, approximately $6.7 million to G & J Pepsi-Cola Bottlers, Inc. and $1 million to Cincinnati Insurance Company.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Angela L Byers, Federal Bureau of Investigation (FBI) Special Agent in Charge - Cincinnati Division, announced the plea entered into today before Judge Susan J. Dlott.

According to court documents, from about 1998 through February 2009, Hammes embezzled more than $8.7 million from his employer, G & J Pepsi-Cola Bottlers, Inc., a large, privately held manufacturer and distributor of Pepsi products that is headquartered in Cincinnati.

Hammes served as a controller for the company, and was responsible for all financial accounting and internal controls for his division, including supervising accounts payable to vendors for services provided to the company’s division.

The defendant set up phantom vendor accounts and manipulated monthly accounting reports, using a miscellaneous account to charge off fraudulent checks and then manipulating legitimate accounts to offset the amounts carried in the miscellaneous account.

The stolen money that Hammes invested and traded generated IRS 1099 forms. Hammes voluntarily made estimated tax payments to the IRS totaling at least $2.7 million using the funds that he stole from his employer. Despite making the estimated tax payments, he failed to file tax returns for multiple tax years.

Hammes was questioned about the issuance of possible fraudulent checks in February 2009, at which time he fled and spent the majority of six years as a fugitive hiking the Appalachian Trail and living under an alias, which belonged to a real person. Federal criminal charges were filed against Hammes and he was arrested in Virginia in May 2015.

Hammes faces a potential maximum sentence of 20 years in prison.

U.S. Attorney Stewart commended the cooperative investigation led by the FBI Cincinnati Division, with assistance from FBI- Richmond Division, FBI- Indianapolis Division, Internal Revenue Service – Criminal Investigations, and the US Marshal’s Service, as well as Assistant United States Attorney Emily N. Glatfelter and Criminal Chief Kenneth L. Parker, who are prosecuting the case.

DAYTON – Travis Matthews, 28, of Dayton was sentenced here today to 73 months in prison for possession of a firearm after having been previously been convicted of a felony offense.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA) Detroit Field Division, and Dayton Police Chief Richard Biehl, announced the sentenced imposed today by United States District Judge Walter H. Rice.

Matthews pleaded guilty in July 2015 after being charged in a one-count bill of information with possessing a Cobra .380 caliber pistol.  Matthews was on parole in 2013 for prior drug convictions, when adult parole authorities searched his home and discovered a total of four weapons, three of which were stolen. With three prior felony convictions, including two for possession of cocaine in 2006 and 2009 and one for trafficking heroin in 2009, Matthews is prohibited from possessing firearms.

Matthews was ordered to serve three years on supervised release following his prison term.

“Matthews poses a risk to the safety of the community because of his continuing criminal conduct,” said U.S. Attorney Carter Stewart. “Such lack of respect for the law requires deterrence in the form of a lengthy prison sentence.”

U.S. Attorney Stewart commended the investigation of this case by DEA agents, Dayton Police investigators, and Ohio Adult Parole Authority officers, and Assistant United States Attorney Andrew Hunt, who prosecuted the case.