Eastern District of Pennsylvania

A superseding indictment was unsealed today against 15 defendants, including alleged members and associates of the South Philadelphia and Southern New Jersey-based criminal organization La Cosa Nostra (LCN), popularly known as the ‘mafia’ or ‘mob.’  The superseding indictment charges various crimes including racketeering conspiracy, illegal gambling, loansharking, extortion, and drug trafficking.

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania, and Special Agent in Charge Michael Driscoll of the FBI’s Philadelphia Field Office made the announcement.

The defendants charged in the seven-count superseding indictment are Steven Mazzone, aka “Stevie,” 56; Domenic Grande, aka “Dom,” “Mr. Hopkins,” “Mr. Brown,” and “Dom14,” 41; Joseph Servidio, aka “Joey Electric,” 60; Salvatore Mazzone, aka “Sonny,” 55; Joseph Malone, 70; Louis Barretta, aka “Louie Sheep,” 56; Victor DeLuca, aka “Big Vic,” 56; Kenneth Arabia, aka “Kenny,” 67; Daniel Castelli, aka “Danny,” “Cozzy,” aka “Butch,” aka “Harry,” age 67; Carl Chianese, age 81; Anthony Gifoli, aka “Tony Meatballs,” 72; John Romeo, 58; Daniel Malatesta, 75; Daniel Bucceroni, 66; and John Michael Payne, 33.

According to court documents, the Philadelphia LCN is one of a number of LCN organized crime families based in various cities throughout the United States.  The purpose of the LCN in Philadelphia and elsewhere is to make money through the commission of various crimes, including illegal gambling, loansharking, drug trafficking, and extortion.

Like other LCN families, the Philadelphia LCN is operated through a defined hierarchical structure, including a Boss, an Underboss (Steven Mazzone), and Captains (Grande), who oversee “crews” consisting of “soldiers” and “associates.”  As detailed in the superseding indictment, soldiers are members of the family who have been formally initiated through a ritual called a “making ceremony,” during which they swear allegiance to LCN above all else, take a vow of secrecy about the organization (the Code of Silence or “Omerta”), and agree to commit violence on behalf of the LCN if necessary.  After this ceremony, these men (who must be of 100 percent Italian ancestry) are then referred to as “made members” of LCN.  Associates are men who engage in criminal activity on behalf of LCN but who have not been formally “made,” either because they are up-and-coming and aspire to full membership, or because they are ineligible to be made because they lack fully Italian ancestry.  Made members and associates who break Omerta are looked upon unfavorably as “rats” and may be targeted for death by other members of the group.

As described in the superseding indictment, the Philadelphia LCN sought to use its reputation and influence to exercise control over criminal rackets like sports bookmaking and loansharking operating in Philadelphia and southern New Jersey, particularly Atlantic City.  During a period beginning in August 2015, 10 of the defendants allegedly conspired to conduct and participate in the affairs of the Philadelphia LCN through both a pattern of racketeering activity and through the collection of unlawful debts.  The remaining five defendants are charged with allegedly committing a variety of other offenses, including conducting an illegal gambling business, conspiracy to make extortionate extensions of credit, and conspiracy to distribute controlled substances, in partnership with other members and associates of the Philadelphia LCN.

As alleged in the superseding indictment, on Oct. 15, 2015, defendants Steven Mazzone, Grande, and Salvatore Mazzone participated in a “making ceremony” (as detailed above) in a South Philadelphia residence, during which several new soldiers were inducted into the Philadelphia LCN.  The superseding indictment describes the various acts allegedly committed by the defendants and others as members of the group including the distribution of heroin, cocaine, fentanyl, methamphetamine and oxycodone pills; the disbursement and collection of tens of thousands of dollars of unlawful bookmaking and other debts ‘owed’ to the group at interest rates as high as 400 percent; and even an alleged conspiracy to kidnap or murder a drug dealer in order to protect the reputation of the Philadelphia LCN after the dealer sold members of the group fake drugs.

The case is being investigated by the FBI’s Philadelphia Field Office and Atlantic City Resident Agency with the assistance of the Philadelphia Police Department, the Pennsylvania State Police and the Pennsylvania Office of the Attorney General.  The case is being prosecuted by Trial Attorney Alexander Gottfried of the Criminal Division’s Organized Crime and Gang Section Assistant U.S. Attorney Jonathan Ortiz of the Eastern District of Pennsylvania.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

PHILADELPHIA – United States Attorney William M. McSwain announced that Jeffrey D. Martin, 61, of Orlando, FL, was charged by Superseding Indictment with conspiracy and multiple counts of securities fraud and wire fraud, related to his manipulation of several publicly-traded securities in a “pump and dump” scheme in which Martin and his co-schemers allegedly defrauded investors out of over $19 million.

According to the Superseding Indictment, from about April 2012 until December 2019, Martin and others allegedly manipulated the stock of Mainstream Entertainment, Inc., now known as Volt Solar Systems, Inc., Resort Savers, Inc., Axiom Corp., Virtual Medical International, Inc., and Union Bridge Holdings, Ltd. The alleged manipulation involved fraudulent press releases, fraudulent securities disclosures filed with the U.S. Securities and Exchange Commission, and other fraudulent communications, as well as manipulative stock trading. The defendant and others were thus allegedly able to fraudulently inflate the price of the stock, and then sell their own shares at inflated prices and reap illicit proceeds—a classic “pump and dump” scheme. Through this conspiracy, Martin and his co-conspirators allegedly defrauded investors to enrich themselves; Martin himself received more than $989,000 in illicit proceeds from the sale of over-inflated stock of just one of the companies.

“Pump and dump stock schemes have real victims: those who play by the rules and save and invest in the markets,” said U.S. Attorney McSwain. “Market manipulation also causes generalized harm to the markets and to our economy because it erodes public trust that the markets are free and fair. Thanks to the excellent work of the FBI, SEC, and prosecutors from my Office, Martin will now face the consequences of his alleged actions.”

“Pump and dump schemers enrich themselves on the backs of innocent investors, turning a pile of lies into a mountain of money,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “The FBI is committed to cracking down on such harmful market manipulation, in order to protect both the investing public and the integrity of the financial system.”

If convicted, the defendant faces a maximum possible sentence of 245 years imprisonment, a $12.5 million fine, a 3-year period of supervised release, and a $1,200 special assessment.

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Michael J. Rinaldi. The U.S. Attorney’s Office appreciates the assistance of the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – United States Attorney William M. McSwain announced that three City of Philadelphia employees who worked in the Revenue Department were charged with soliciting and accepting bribes in connection with their employment. All three were charged with one count of federal program bribery.

Jarredd McQueen, 50, of Philadelphia, PA, was charged by Information. He was employed as a Customer Collection Representative for the City of Philadelphia’s Revenue Department when he allegedly accepted $9,000 of bribes in connection with his work. McQueen’s alleged criminal conduct began in May of 2018 and ended in November of 2018. He resigned from his employment on July 17, 2020.

Demarys Natal, 56, of Philadelphia, PA, was also charged by Information. She was employed as a Customer Collection Representative for the City of Philadelphia’s Revenue Department when she allegedly accepted $26,600 of bribes in connection with her work. Natal’s alleged criminal conduct began in February of 2018 and ended in September of 2019. She resigned from her employment on November 5, 2019.

Nicole Mixon, 44, of Philadelphia, PA, was charged by Indictment. She was also employed as a Customer Collection Representative for the City of Philadelphia’s Revenue Department when she allegedly accepted $22,300 of bribes in connection with her work. Mixon’s alleged criminal conduct began in November of 2019 and ended in March of 2020. She resigned from her employment yesterday.

As Revenue Department employees, McQueen and Mixon accessed the Taxpayer Information Payment System (“TIPS”), a computer system the City of Philadelphia uses to track the status of various financial obligations. The financial obligations include real estate taxes, refuse (i.e., trash) fees, and small business fees, that are owed to the City by property owners. McQueen and Mixon used TIPS to adjust the outstanding balances on various types of taxes and/or fees for a particular property after meeting with taxpayers about money they owed to the City.

McQueen and Mixon allegedly used their official positions collecting monies owed to the City as an opportunity to enrich themselves, while depriving the City of money owed to it by certain taxpayers. For example, the Information against McQueen alleges that he erased a $5,644.88 trash fee in exchange for a $1,500 cash bribe paid by an individual cooperating with the FBI. The Indictment against Mixon alleges that she erased a $1,210 trash fee in exchange for a $800 cash bribe paid by an individual cooperating with the FBI.

As an employee of the Revenue Department working in the Major Tax Unit, Natal collected delinquent business tax payments on Philadelphia properties. The collection efforts required Natal to meet and correspond with taxpayers about their outstanding debts. Natal allegedly used her official position collecting monies owed to the City as an opportunity to enrich herself, while depriving the City of money owed to it by certain taxpayers.

For example, the Information alleges that Natal told a taxpayer to bring two $500 postal money orders to the Municipal Services Building to satisfy the judgment for unpaid business taxes. Natal instructed the taxpayer to leave the payee section of the money orders blank. She later sent a text message instructing the taxpayer to “to leave them blank there [sic] doing us a personal favor so u can get ur $$$ instead of city.” An individual cooperating with the FBI presented Natal with two $500 money orders with the payee section blank, and in return, Natal allegedly erased $10,000 in fees associated with business taxes on a Philadelphia property. Natal deposited the $500 money orders into her bank account with the memo section reading “Repair/Remodeling” and “Flooring.”

“Bribes and corruption must have no place in Philadelphia’s municipal government,” said U.S. Attorney McSwain. “Corruption is an insidious disease that destroys the public’s confidence in its government, which is why we at the U.S. Attorney’s Office are so determined to root it out. Here, these three Revenue Department employees will now face the consequences of their alleged brazen and illegal acts.”

“When municipal employees decide to take bribes, they’re openly putting their own interests above those of the city they serve,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “The defendants’ alleged actions benefitted themselves and those who paid them off, at the expense of Philadelphia’s revenues and its residents. The FBI will continue to aggressively investigate allegations of public corruption, and work with our partners to ensure that those who violate their obligation to the public are held fully accountable.”

“I want to thank our federal partners for working with us from start to finish on this investigation.  Public service demands integrity and honesty and together we send a strong message that there is no place for City employees who are unable to meet this standard,” said City of Philadelphia Inspector General Alexander DeSantis.

If convicted, McQueen, Natal, and Mixon each face a maximum possible sentence of 10 years in prison.

All three cases were investigated by the Federal Bureau of Investigation and the Philadelphia Office of the Inspector General, and are being prosecuted by Assistant United States Attorney Jason P. Bologna.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA, PA – United States Attorney William M. McSwain announced that Johnson & Johnson (“J&J”) subsidiary Medical Device Business Services, Inc. (“MDBS”) agreed to pay $10 million to settle allegations under the False Claims Act that Therakos, Inc., a former J&J subsidiary, engaged in promotion of the UVAR XTS and CELLEX extracorporeal photopheresis (“ECP”) systems for unapproved uses in pediatric patients between 2006 and 2012. The Gores Group (“TGG”) agreed to pay an additional $1.5 million to resolve allegations that Therakos continued those alleged improper sales and promotion practices after TGG acquired Therakos from J&J in 2012.

In 1999, the Food and Drug Administration (“FDA”) approved UVADEX, the drug administered by the Therakos ECP systems, for “the palliative treatment of the skin manifestations of cutaneous T-cell lymphoma that is unresponsive to other forms of treatment.” Cutaneous T-cell lymphoma is a cancer of the immune system in which cancerous T-cells migrate to the skin, causing lesions. Therakos’s ECP drug/device systems administer the medication UVADEX (methoxsalen) by first removing a portion of the patient’s blood and separating the red blood cells from the white blood cells by using a centrifuge. The red cells are returned to the patient and the UVADEX solution is combined with the white cells. The device then irradiates the drug-cell mixture with ultraviolet light and returns the treated cells to the patient.

The government alleges that between 2006 and 2015, Therakos marketed and promoted its ECP systems to treat pediatric patients for indications that were not approved by the FDA. At no time during this period were the ECP drug/devices approved by the FDA for use in the pediatric population. The government further alleges that Therakos’s improper promotion caused false claims to be submitted to three federal healthcare programs: Medicaid, the Federal Employee Health Benefits Program, and Tricare.

“While physicians are free to exercise their independent medical judgment to prescribe medications for uses beyond FDA approved indications, pharmaceutical and device companies cannot interfere with doctors’ judgment by allegedly pushing the sale of their drugs or devices for non-FDA approved uses, especially in vulnerable populations,” said U.S. Attorney McSwain. “That is what allegedly happened here, and my Office will continue to investigate such cases and hold companies accountable when there could be an effect on pediatric or other vulnerable patients.”

“Investigating allegations of the False Claims Act is a top priority,” said Maureen R. Dixon, Special Agent in Charge for the Office of the Inspector General, U.S. Department of Health and Human Services. “We will continue to work with the U.S. Attorney’s Office to ensure the integrity of the Medicare and Medicaid Programs.”

“The OPM OIG will always prioritize protecting the health and well-being of our most vulnerable patients” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General, OPM OIG. “I would like to acknowledge our investigative staff and Department of Justice Partners for their hard work. This settlement represents our joint commitment to not only fighting against false claims but also protecting patients from harm.”

This settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Pennsylvania and is captioned United States ex rel. Johnson et al. v. Therakos, Inc. et al., No. 12-cv-1454. The qui tam complaint was filed by Brian McCormick of Ross Feller Casey LLP in Philadelphia, PA.

“We thank the relators and relators’ counsel for their contributions to this case. Without information from citizens like the relators, detecting fraud and conserving government program funds would be much more difficult,” said U.S. Attorney McSwain.

The claims resolved by the settlement are allegations only; there has been no determination of liability.

This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the U.S. Office of Personnel Management Office of the Inspector General, and Department of Defense, Office of Inspector General, Defense Criminal Investigative Service. For the U.S. Attorney’s Office, the investigation and settlement were handled by Assistant United States Attorney Charlene Keller Fullmer, Deputy Chief of the Civil Division, Assistant United States Attorney John T. Crutchlow, and former Auditor Denis Cooke.

PHILADELPHIA – United States Attorney William M. McSwain and Assistant Attorney General for National Security John C. Demers announced that Shahidul Gaffar, 40, and Nabila Khan, 35, both residents of Pennsylvania, pleaded guilty today to conspiracy to provide material support and resources to ISIS, a designated Foreign Terrorist Organization. United States District Court Judge Joshua D. Wolson presided over the proceeding.

According to court documents unsealed today, in 2015, Gaffar and Khan, a married couple originally from Bangladesh, provided and attempted to provide financial support to two of Khan’s brothers who traveled to Syria to join ISIS fighters. Gaffar and Khan discussed the brothers’ travel plans in detail with each other, as well as with the brothers and other family members, as early as September 2014. In January 2015, Khan asked her sister living in Bangladesh to sell some of Khan’s gold and provide the money to their oldest brother, J.K., in order to assist him in travelling to Syria. Khan then flew to Bangladesh to wish J.K. farewell before his departure in February 2015. Gaffar, who remained in Pennsylvania, sent supportive messages to Khan’s mother stating: “Be [p]roud mother for the noble cause and for the sake of Allah!!!” 

Further, according to the criminal Information, Khan’s second brother, I.K., had come to the United States on a student visa and resided with Khan and Gaffar in Pennsylvania from June 2014 until February 2015, when he returned to Bangladesh. Over the next few months, Khan, who was still in Bangladesh, observed I.K. watching terrorist propaganda videos featuring Anwar al-Awlaki, a designated global terrorist and key leader of ISIS. Around the same time, Gaffar began sending international money transfers to I.K. in Bangladesh. These funds had multiple purposes, but one was to support I.K.’s travel to Syria to join ISIS. In June 2015, Gaffar sent a message to Khan, stating: “Let [I.K.] know that I will manage and send 3000 dollars if Allah wills. Let's help him, my love, for the good cause who knows that might be enough to get forgiveness from Allah and accept[ance] [in]to heaven.” In July 2015, Gaffar continued to communicate with Kahn regarding the conspiracy, saying in part: “I feel bad for mom and dad, at the same time, I feel very proud. [W]hat a lucky mom and dad.”

In early July 2015, I.K. traveled to Syria to join ISIS. The next day, Gaffar and Khan discussed via electronic messages how Khan had tried to give I.K. more money right before he left, and days later, Kahn exchanged multiple electronic messages with a family member discussing I.K.’s arrival in Syria and reunion there with J.K. Gaffar sent reassuring messages to Khan, stating that it was “cool” that she had been able to observe I.K.’s radical Islamist “changes” from “beginning to end.”

According to court documents, in May 2016, Khan received an electronic message that I.K. had been wounded in the fighting in Syria, and in August 2016, Khan’s mother sent a message to Kahn with photographs of I.K.’s wounds sustained while in Syria. In September 2016, I.K. changed his online social media account profile picture to an image depicting himself, his brother and another male sitting in front of the black ISIS flag with firearms on a table in front of them, overtly identifying himself and his brother as members of ISIS. I.K. was ultimately killed in the fighting in Syria in March 2019.

“Protecting our country from terror attacks is the first priority of the Department of Justice and the U.S. Attorney’s Office,” said U.S. Attorney McSwain. “The defendants encouraged and supported Nabila Kahn’s brothers joining the murderous terrorist group ISIS, which is a direct threat to the safety and security of the United States. The public can rest assured that my Office – together with our partners from the FBI and the National Security Division of the Department of Justice – is working tirelessly every day to protect America and her residents from terrorism.”  

“With their pleas today, Gaffar and Khan admit to providing material support to ISIS terrorists from American soil,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “As this case shows, extremists need not take up arms themselves to threaten lives and do real harm. The FBI’s Joint Terrorism Task Force will never stop working to identify those aiding terrorist groups that consider our country their sworn enemy.”

The defendants each face a maximum possible sentence of five years’ imprisonment, a $250,000 fine, and three years’ supervised release. 

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Sarah Wolfe and Robert Livermore.

PHILADELPHIA— United States Attorney William M. McSwain announced that his Office filed suit against First State Manufacturing, Inc. (“FSM”), a Milford, Delaware corporation, for violating the False Claims Act. The United States alleges that FSM, through its executive management, bribed Timothy Miller, a former Amtrak procurement official, in order to receive lucrative contracts from Amtrak. More specifically, the United States alleges that FSM executives provided cash, kickbacks, and vacations to Miller and, in exchange, Miller provided FSM with bidding information that allowed FSM to win the contracts. Once FSM secured the contracts, it allegedly furnished substandard textile products and conspired with Miller to inflate prices, costing taxpayers even more. FSM allegedly attempted to conceal the bribery scheme by directing Miller to falsify records and establish a fake company through which FSM paid him as a “consultant.” The complaint alleges that as a result of this scheme, FSM secured six contracts from Amtrak between August 2015 and April 2018.

The United States and FSM have also entered into a Consent Judgment, subject to the Court’s approval, that would resolve the matter without litigation. If approved by the Court, the Judgment would require FSM to pay $393,250.07 to the United States. The settlement amount is based in part upon the company’s financial status.

Previously, Miller and two FSM executives were criminally prosecuted by the U.S. Attorney’s Office for the Eastern District of Pennsylvania. For his role in this scheme, Miller was sentenced to one year and one day in prison. Donald Scott Crothers, FSM’s Vice President for Marketing and Contract Administration, received a sentence of eighteen months in prison for his role in the scheme. John Gonzales, FSM’s Chief Executive Vice President and Chief Financial Officer, is awaiting sentencing.

“As alleged, FSM performed an end-run around an honest bidding process, illegally stacking the deck in its favor,” said U.S. Attorney McSwain. “The United States’ complaint lays out, in painstaking detail, FSM’s alleged bribery scheme, including kickbacks through a fake consulting company, cash payments made under the cover of night, and improper price adjustments directed by a corrupt organization. Let this be a warning to anyone who thinks they can perpetrate and hide a bribery or bid rigging scheme: my Office will bring to bear all of its resources, both civil and criminal, to make sure that all culpable parties are held accountable.”

“Today’s actions represent our commitment to seek justice and hold accountable those who violate the law,” said Kevin Winters, Amtrak’s Inspector General. “We appreciate the seamless collaboration with the U.S. Attorney's Office as well as the sustained professionalism exhibited by our investigative staff and partner agencies in moving the case to this next phase.”

“Today’s civil complaint against First State Manufacturing demonstrates our commitment to use all available legal remedies with respect to those who seek to enrich themselves through fraud, bribery, and bid-rigging at the expense of the Federal government and honest businesses,” said DOT OIG Regional Special Agent-In-Charge Douglas Shoemaker. “DOT OIG will continue to work with our law enforcement and prosecutorial partners to pursue financial justice on behalf of the American taxpayer.”

The complaint contains allegations only, and not findings of liability.

The investigation was conducted by the Amtrak Office of Inspector General and the Department of Transportation Office of Inspector General. The civil investigation, litigation, and resolution are being handled by Assistant United States Attorney Paul J. Koob.

PHILADELPHIA – United States Attorney William M. McSwain announced that two brothers, Leo and Paul Dignam, were charged by Information with fraud and embezzlement, and a third person, Barbara Conway, was also charged by Information with theft.

Leo Dignam, 61, of Philadelphia, PA, was charged with two counts of wire fraud and one count of embezzling from a program receiving federal funds. Leo’s brother, Paul Dignam, 58, also of Philadelphia, was charged with one count of mail fraud and one count of embezzling from a program receiving federal funds. Barbara Conway, 61, of Drexel Hill, PA, was charged with one count of theft of funds from a program receiving federal funds. At the time of the charged offenses, Leo and Paul Dignam were senior officials with the City of Philadelphia, and Conway was the Food Voucher Coordinator for the Philadelphia Health Management Corporation (PHMC), an agency contracted by the City to manage the Food Voucher Program.

Leo Dignam was an Assistant Managing Director in the Managing Director’s Office and, prior to serving in that position, was the Deputy Commissioner for Programs with the Philadelphia Parks and Recreation (“PPR”) Department. In these positions, he oversaw the administration of major events in the city, such as the Philadelphia Marathon, the Broad Street Run and the Mummers Parade. Mr. Dignam worked for the City of Philadelphia for approximately 38 years.

Over the course of several years, from 2012 through 2019, Leo Dignam allegedly engaged in a scheme to defraud the City of Philadelphia of approximately $150,000 by misusing two bank accounts he controlled on behalf of the City that existed to support the work of PPR, namely, recreational activities for citizens. In particular, he opened a bank account purportedly to support the activities of PPR in connection with a non-profit organization, the Junior Baseball Federation (“JBF”). The JBF partnered with the Philadelphia Phillies to raise most of its funds through the sale of tickets for Phillies games.

Instead of using the JBF bank account solely for its intended public purpose, Leo Dignam allegedly misused the account by converting funds from the account to pay for personal expenses he incurred on an American Express (“AMEX”) credit card that he opened in connection with the JBF account. He used the AMEX card, and shared it with family members, for purchases from retail stores, grocery stores, pharmacies, gas stations, online retailers and service providers, and other businesses. He then used the funds in the JBF bank account to pay off the personal expenses on the credit card.

According to the Information, he similarly misused another account that was created for the benefit of PPR and the citizens of Philadelphia, the Program Advisory Fund Account. The defendant used this account to pay personal expenses by transferring funds directly to a personal account, solely for his own benefit, and by using it to pay personal expenses on a Verizon Wireless Account.

Paul Dignam was the Regional Manager for the South Region of Philadelphia Parks and Recreation. In this position, he oversaw the administration of local recreation centers and playgrounds and supervised the activities of several PPR district managers. In 2011, Paul Dignam opened a bank account that purported to be for use by a recreation advisory council, a commonly used governance structure in PPR that exists to support local recreation centers and playgrounds by helping to raise funds, develop programs, and maintain play sites.

Beginning in 2012 and continuing through 2019, he allegedly misused this bank account by repeatedly writing checks on the account made payable to himself. He helped conceal this fraud by having bank statements mailed to his personal residence and having another individual act as a signatory on the account. The defendant then forged the other individual’s signature on the misappropriated checks and falsely noted in the memo line of the checks that they were “reimbursements” for expenses he incurred by making purchases on behalf of PPR. In sum, Paul Dignam wrote himself approximately 102 checks worth approximately $119,000.

Finally, Barbara Conway was the Food Voucher Coordinator for the Philadelphia Health Management Corporation (PHMC), an organization contracted by the City to manage a Food Voucher Program designed to provide emergency assistance to people living with HIV/AIDS. This initiative is funded by the Ryan White HIV/AIDS Program, a federal program that provides grants to states, cities, counties, and other local organizations to fund care and treatment services for individuals living with the disease.

The Information alleges that beginning in 2015 through 2019, Conway stole more than $39,000 worth of food vouchers intended for HIV/AIDS patients receiving services through the Food Voucher Program.

“All three of these defendants allegedly made the same bad choice to steal funds from federally-funded programs,” said U.S. Attorney McSwain. “Further, in all three cases, the defendants stole money from programs designed to benefit groups that desperately needed the assistance – from patients struggling with HIV/AIDS who require emergency assistance to meet basic necessities to a youth baseball organization serving many underprivileged children. The callousness that the defendants displayed by stealing from these programs is stunning.”

“We share a collective and long-standing devotion to integrity in City government, and I wish to thank the United States Attorney’s Office and the FBI for their partnership in the investigation of the Dignam brothers and our broader mission,” said City of Philadelphia Inspector General Alexander DeSantis. “Further, the Conway case shows our continuing commitment to root out fraud and corruption in all forms, including by employees of city contractors involved in programs that affect some of Philadelphia’s most vulnerable populations.”

If convicted, Leo Dignam faces a maximum possible sentence of 50 years in prison, Paul Dignam faces a maximum possible sentence of 30 years in prison, and Barbara Conway faces a maximum possible sentence of ten years in prison.

All three cases were investigated by the Federal Bureau of Investigation and the Philadelphia Office of the Inspector General. The cases of Paul and Leo Dignam are being prosecuted by Deputy United States Attorney Louis D. Lappen, and the case of Barbara Conway is being prosecuted by Assistant United States Attorney Richard Barrett.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA, PA – On Wednesday, November 11, 2020, U.S. Attorney McSwain delivered the Veterans’ Address at the Chester County Bar Association’s Annual Veterans Day Ceremony.  U.S. Attorney McSwain, a Chester County native and a member of the Chester County Bar Association, served in the U.S. Marine Corps infantry from 1993 to 1997.  He was introduced by his friend, Brian Nagle, who is a former President of the Chester County Bar Foundation.

Remarks as Prepared for Delivery

Good morning, and thank you, Brian, for that kind introduction.  I also want to thank Matt Holliday, Executive Director of the Chester County Bar Association, for inviting me to speak here today.  I am delighted to participate in this annual ceremony that honors America’s veterans. 

Veterans’ Day is an important marker – it reminds every citizen in this great country of the sacrifice that the men and women of the Armed Forces have made to preserve and protect the American dream.  It is our opportunity to honor and thank all Americans who have served our country in uniform.  That includes those living and dead, those who served in war and peace, those who serve today and those who served yesterday.  In particular, I want to recognize and thank the veterans with us this morning:  with this ceremony, we honor your sacrifice, courage, and bravery.  We owe our way of life to you.  Thank you for your service. 

We also must thank you for the example you set for every American citizen.  That example is your unity of purpose.  When you signed up to serve in the military, you committed yourself to live by the military ethos of self-sacrifice in the name of a greater good.  You knew when you committed that you would likely serve under multiple presidents and military leaders, not necessarily knowing who they would be.  You did not know where or with whom you would serve.  Many of you did not know what forces you would be fighting or the identity of the enemy.  Still, none of that mattered: you signed up to serve because you love your country and everything that America stands for.

And that is because no matter who is in charge, the ideals of patriotism, freedom, democracy, and service remain the same.  Even with all of the unknowns I just mentioned, the reason you decided to serve is the constant in the equation. 

That unity of purpose is what binds the men and women who serve; it is also what unites every American in our expression of gratitude for your service.  Your love of country is the example you set for every American.  We owe you a tremendous debt of gratitude for your service and for your living example of patriotism.

The timing of Veterans’ Day has historical significance, but it is also culturally significant.  We celebrate Veterans’ Day on November 11 because the holiday has its roots in Armistice Day – the official end of World War I.  On the 11th day, at the 11th hour, of the 11th month, a bugle call signified the truce among all nations and a recommitment to world peace.  But the world did not remain a peaceful place for very long.  After World War II and the Korean War, Armistice Day was renamed Veterans’ Day.

I think we can all agree that this has been a tough year.  From the global pandemic to the divisions in our country that led to a hard-fought election by all involved, nothing has come easily this year.  Sometimes it may seem as if there’s nothing we can all agree upon.  But that’s not true.  We all agree that our veterans are heroes.  Veterans’ Day brings us together as a nation to express our profound gratitude for what our veterans have done and for what our military stands for. 

Our military is one of the greatest unifying forces for good in our country today.  The outpouring of support for our veterans on this day reminds us of what is important:  love of country and love of freedom, which you have bravely protected at every turn.

God Bless you all.  And God Bless the United States of America.  Thank you.

PHILADELPHIA – United States Attorney William M. McSwain announced the results of a review of all election polling places in the Eastern District of Pennsylvania to determine their compliance with the Americans with Disabilities Act (ADA) of 1990. This massive undertaking, which was announced on February 19 of this year, involved nine counties and was the Department of Justice’s first-ever ADA review of an entire district. The ADA prohibits discrimination on the basis of disability in all programs, activities, and services provided by public entities. The ADA requires that public entities provide voting facilities that are accessible to people with disabilities.

As part of the review, election officials in Berks, Bucks, Chester, Delaware, Lancaster, Lehigh, Montgomery, Northampton, and Philadelphia counties were asked to complete survey questions pertaining to polling place accessibility in their county. The United States Attorney’s Office then followed up with the county officials to address any access issues and to make sure each county remedied those issues. All nine counties responded to the survey and have now either resolved those issues or are in the process of remediating them.  

By way of example, Lancaster County was one of the first counties to respond to the survey, demonstrating full accessibility and an extensive ADA plan in place for the county.  Delaware County identified access issues with the entrance to Lamb of God Church in Havertown. Through a bipartisan agreement, the county was able to move that polling place to an accessible location at Chestnutwold School. Bucks County identified an inaccessible polling place in Lower Southampton, and the county is in the process of remediating that situation.  Philadelphia County is currently finalizing its review and expects to have all issues resolved before election day.

“Polling place accessibility for the disabled is a critically important issue and one of the many ways that my Office is working hard to provide a free and fair 2020 election,” said U.S. Attorney McSwain. “People with disabilities deserve equal access to polling places, and we are committed to making sure that they have it. We also appreciate the seriousness with which the counties approached our review, during this 30th anniversary of the Americans with Disabilities Act.”

Any citizen with ADA-related polling place concerns in the Eastern District of Pennsylvania is encouraged to contact Assistant U.S. Attorney Jacqueline C. Romero, Civil Rights Coordinator, at 215-861-8200 or USAPAE-CivilRights@usa.doj.gov.

PHILADELPHIA – United States Attorney William M. McSwain announced that Dennis D. Davis, 34, of Levittown, PA, was sentenced to 16 years in prison and three years of supervised release by United States District Judge Mitchell S. Goldberg for firearms and narcotics offenses, stemming from an arrest after a dangerous and dramatic car chase in July 2017.

The defendant was convicted after trial in March 2020 of possession of a firearm by a felon and possession with intent to distribute crack cocaine. While driving in Bucks County in July 2017, Davis refused to pull over for Middletown Township Police, and a pursuit ensued. Davis continued to flee at high speed and caused a crash at a busy intersection near the border of Middletown and Bristol Townships. The defendant then fled on foot.

As he ran from police officers, Davis discarded a purse containing a firearm, drug paraphernalia, and crack cocaine. Police officers eventually caught Davis and took him into custody. The officers recovered the purse and its contents, and also found over $1,000 in cash in the defendant’s car. The government presented evidence at trial that included the physical evidence recovered at the scene, fingerprints from the gun, civilian eyewitnesses, and several law enforcement witnesses who participated in the chase and the defendant’s arrest.

“In choosing to flee from police and cause a car crash at a busy intersection, Davis showed complete disregard for the safety of innocent people,” said U.S. Attorney McSwain. “He also showed complete disregard for the law by illegally possessing a firearm and dangerous drugs. The streets of Bucks County are safer now that Davis will be behind bars for many years.”

“In possession of a loaded revolver and large quantity of crack cocaine, Dennis Davis decided to evade a lawful traffic stop,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He ran because he wasn’t supposed to have that gun, wasn’t meant to be dealing drugs again, and didn’t want to go back to prison. Clearly, it didn’t work. We’re just fortunate no one was badly injured or killed as he recklessly fled that day. Getting guns, drugs, and dangerous criminals like Davis off the street is a priority for the FBI and our local law enforcement partners.”      

The case was investigated by the Federal Bureau of Investigation, with assistance from the Middletown Township and Bristol Township police departments, and was prosecuted by Assistant United States Attorney Michael J. Rinaldi and former Assistant United States Attorney Melanie Babb Wilmoth.

PHILADELPHIA – United States Attorney William M. McSwain announced that the U.S. Department of Justice has filed a Statement of Interest (“SOI”) today in a case pending in the Eastern District of Pennsylvania that challenges the City of Philadelphia’s “Event Moratorium” that prohibits issuing permits for expressive gatherings of 150 or more people on public property. The lawsuit claims that the Moratorium violates the rights of freedom of speech and freedom of assembly guaranteed by the First Amendment. 

The SOI was filed in support of the plaintiff, the Philadelphia Vietnam Veterans Memorial Society (“PVV”), an organization that seeks to promote, honor, and dignify the memory of military veterans who served in Vietnam. PVV does so by sponsoring honor guards and rifle teams to attend veteran burial details and by participating in parades and other public events. PVV contends that it and other groups are adversely impacted by the City’s blanket ban on issuing permits for public gatherings.

On July 14, 2020, in response to the COVID-19 pandemic, the City of Philadelphia instituted the Event Moratorium, imposing a blanket ban on issuing permits for any public gatherings through February 2021. While the City claims that the Event Moratorium does not apply to First Amendment protected activity, nevertheless it will not issue permits for any such activity – and it simultaneously cancelled all festivals, parades, and public gatherings on City property initially involving 50 (but now 150) people.

At the same time that it has imposed the Event Moratorium, the City has explicitly allowed a group of any size to take to the streets without a permit if their stated purpose is to  protest -- even if that group ignores social distancing, masking, or any other CDC guidelines. This is true even though concerns about virus transmission obviously apply with equal force to groups protesting without a permit and those parading with one. As set forth in the SOI, this disparate treatment (and double standard) is illogical, not narrowly tailored to serve a legitimate public health purpose, and unconstitutional.

“This is a case about more speech, not less,” said U.S. Attorney McSwain. “The City’s double standard – whereby is treats protests one way and any other First Amendment gathering a completely different way -- is illogical, favors particular messages, does not serve public health purposes, and is unconstitutional. The solution is not to limit protests. Rather, the solution is to eliminate the Event Moratorium and allow all speakers to express themselves in accordance with their constitutional rights.”

“The First Amendment to United States Constitution makes illegal any attempt by government to abridge the rights of the people to speak and assemble peacefully.  Our Founders established these rights to enshrine in our law a very simple ideal:  tyranny has no place in this free country.  At a small town west of Philadelphia, at Gettysburg in 1863, President Abraham Lincoln observed that this United States of America was ‘conceived in liberty,’ and he challenged all of us ‘to be dedicated’ to a ‘new birth of freedom.’  We must and do accept President Lincoln’s challenge,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The Philadelphia Vietnam Veterans Memorial Society honors those brave patriots, living and dead, who fought, suffered, and died for our freedom and for the freedom of all humanity.  The United States Department of Justice stands with them, and we will continue to fight for their liberty and the liberty of all people.”

The case is docketed as Philadelphia Vietnam Veterans Memorial Society v. Kenney, et al., Civil Action No. 20-cv-05418.

The Justice Department announced that a Statement of Interest (SOI) was filed today in a case pending in the Eastern District of Pennsylvania that challenges the City of Philadelphia’s “Event Moratorium” that prohibits issuing permits for gatherings of 150 or more people on public property.

The lawsuit claims that the Moratorium violates the rights of freedom of speech and freedom of assembly guaranteed by the First Amendment. The City of Philadelphia imposed a ban on permits for public gatherings, which led to the cancellation of its Veterans Day parade while at the same time allowing groups of any size to take to the streets without a permit to protest.

“The First Amendment to U.S. Constitution makes illegal any attempt by government to abridge the rights of the people to speak and assemble peacefully,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “Our Founders established these rights to enshrine in our law a very simple ideal:  tyranny has no place in this free country. At a small town west of Philadelphia, at Gettysburg in 1863, President Abraham Lincoln observed that the United States of America was ‘conceived in liberty,’ and he challenged all of us ‘to be dedicated’ to a ‘new birth of freedom.’ We must and do accept President Lincoln’s challenge. The Philadelphia Vietnam Veterans Memorial Society honors those brave patriots, living and dead, who fought, suffered, and died for our freedom and for the freedom of all humanity. The U.S. Department of Justice stands with them, and we will continue to fight for their liberty and the liberty of all people.”

“This is a case about more speech, not less,” said U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania. “The city’s double standard – whereby is treats protests one way and any other First Amendment gathering a completely different way – is illogical, favors particular speakers and issues, does not serve public health purposes, and is unconstitutional. The solution is not to limit protests. Rather, the solution is to eliminate the Event Moratorium and allow all speakers to express themselves in accordance with their constitutional rights.”

The SOI was filed in support of the plaintiff, the Philadelphia Vietnam Veterans Memorial Society (Vietnam Veterans), an organization that seeks to promote, honor, and dignify the memory of military veterans who served in Vietnam. Vietnam Veterans does so by sponsoring honor guards and rifle teams to attend veteran burial details and by participating in parades and other public events. Vietnam Veterans contends that it and other groups are adversely impacted by the city’s blanket ban on issuing permits for public gatherings.

On July 14, 2020, in response to the COVID-19 pandemic, the City of Philadelphia instituted the Event Moratorium, which it revised on Sept. 21. In its current form, it bans the issuing of permits for any public gathering of 150 or more people through February 2021, thus cancelling all festivals, parades, and public gatherings on city property involving 150 or more people.

At the same time, the mayor has praised those protesting social justice issues without permits and the city has waived code violations for protesters. As set forth in the SOI, this disparate treatment (and double standard) may be “viewpoint discrimination” triggering strict scrutiny under the First Amendment. In any event, the SOI concludes, under First Amendment rules on restrictions on the time, place, and manner of speech, the moratorium on permits is an improper speech restriction, since it is not narrowly tailored and does not leave open ample alternative avenues for speech.

PHILADELPHIA – United States Attorney William M. McSwain convened a press conference today to announce the filing of a Statement of Interest in a civil lawsuit filed against Philadelphia Mayor James Kenney and his Managing Director, challenging the City’s “Event Moratorium.” U.S. Attorney McSwain addressed the Moratorium’s unconstitutional double standard and the important role that the federal government has in safeguarding all citizens’ First Amendment rights, regardless of the content of the speech at issue. 

Remarks as Prepared for Delivery 

Earlier today, the Philadelphia Vietnam Veterans Memorial Society (“PVV”) filed suit in federal court in Philadelphia against Mayor Kenney and his Managing Director, alleging a violation of the organization’s and others’ First Amendment rights, based on the City’s refusal to grant any permits for parades or other expressive gatherings on public property. Also today, the U.S. Department of Justice and the U.S. Attorney’s Office filed a “Statement of Interest” in the case in support of the PVV. One of our important responsibilities at the U.S. Attorney’s Office is to safeguard civil rights, including First Amendment rights. The purpose of my remarks is to explain how this Statement of Interest does exactly that. 

This is a case about more speech, not less. It is also a case about Philadelphia’s double standard whereby it treats some types of speech (protests) much more favorably than others (parades and other expressive gatherings that require a permit). There is no possible public health justification for this double standard. The City’s policy of banning parades and other expressive gatherings fails as a matter of constitutional law and basic common sense. Critically, the solution to eliminating this double standard is not to discourage or limit protests – two wrongs do not make a right. Instead, the solution is to allow all speakers to express themselves in accordance with their constitutional rights. The City’s illogical and unconstitutional ban on parades and other expressive gatherings should be eliminated. Again, more speech is the answer, not less.

The United States is committed to protecting the freedoms guaranteed by the First Amendment, which lie at the heart of a free society and are, in the words of James Madison, the “effectual guardian of every other right.” In the midst of the COVID-19 pandemic, the United States has a strong interest in the development and maintenance of public health policies that protect citizens from harm while still respecting their First Amendment rights, including the peaceful exercise of freedom of speech, freedom to assemble, and freedom to petition the government on matters of public importance in a traditional public forum.

The City of Philadelphia has announced an “Event Moratorium,” imposing a blanket ban on issuing permits for any large public gathering – initially of more than 50 people, subsequently increased to 150 people. While the City has allowed unpermitted demonstrations to occur, it has banned certain types of public gatherings, such as parades, which are unquestionably protected by the First Amendment. Parades come in many shapes and sizes, with myriad messages. Some are groups not much larger than 150 people and seek to express solemn messages. And, by their nature, parades almost always necessitate street closures and other safety measures, therefore requiring coordination and planning with the City through a permitting process. To hold a parade without coordination with the City is to invite disruption, or even disaster.

The demonstrations that ensued in Philadelphia since late May have shown the enduring importance of the First Amendment and the rights to free speech and free assembly. But those rights apply to all forms of speech and assembly; it is unconstitutional for the Philadelphia municipal government to shut down certain types of speech, while allowing other types of speech to proceed unchecked. More to the point, the City allows (and even encourages) large protests, but not parades or other expressive gatherings. This raises the specter of viewpoint discrimination – that the City is favoring certain kinds of speech because of its message.

Thus, while Philadelphia officials continue to bless unpermitted protests, the City has stated that it will deny a permit to groups seeking to engage in other forms of First Amendment-protected activity. The supposed reason for the blanket permitting ban is to prevent the spread of COVID-19 by eliminating large outdoor gatherings. By contrast, for those willing to take to the streets without a permit, a group of any size can do so – even if that group ignores social distancing, masking, or any other CDC guideline. This is true even though the same concerns about virus transmission would obviously apply with equal force to both situations. The City’s disparate treatment (and double standard) is illogical, favors particular speakers and issues, does not serve public health purposes, and is unconstitutional.

Indeed, the Supreme Court has often struck down ordinances where the distinction between two types of speech or expression is unrelated (or only tangentially related) to the government’s asserted interest. This is especially so where a less blunt approach could achieve the same ends. In short, if the City’s concern is that a large parade could cause an increase in transmission of COVID-19, a blanket ban for groups over 150 is not narrowly tailored to serve that interest, especially while also allowing other large gatherings to take place without permits. Moreover, when contrasted with the City’s recent decision to allow gatherings of up to 7,500 people in certain outdoor venues (including for Eagles games), the Event Moratorium is all the more unjustified. Rather than a blanket ban, the Constitution requires a narrowly tailored approach that might, for example, allow event organizers an opportunity to demonstrate appropriate safety measures.

At this time, I am happy to take any questions you have.

PHILADELPHIA - United States Attorney William M. McSwain announced that Vontia Jones, 39, of Philadelphia, PA, was sentenced to eight and a half years in prison, three years of supervised release, and ordered to pay $2,319,278 in restitution by United States District Judge Joel H. Slomsky for obtaining the personal identifying information of people and using that information to file more than 900 fraudulent tax returns with the IRS, netting her over $2,319,000 in fraudulent refunds. The defendant also engaged in real estate fraud by purporting to sell properties to buyers using fraudulent documents.

The defendant pleaded guilty in August 2019 to more than 30 fraud charges, including conspiracy to make false claims to the IRS; making, and aiding and abetting the making of false claims to the IRS; wire fraud; and aggravated identity theft. Jones operated a business that she identified by various names including “Jones Tax Service,” “Earned Income Credit Unit,” “EIC Unit,” and “Eelysium,” out of her home in the 1400 block of West Cayuga Street in Philadelphia for a period of roughly seven years. Together with her co-conspirators, Jones filed or directed others to file over 900 fraudulent tax returns claiming fictious self-employment income resulting in tax refund payouts by the IRS of more $2,319,000.

The conspirators solicited the personal information of individuals and their dependents under the guise of getting them “tax money,” even if they never worked. Jones designed flyers advertising her services that stated: “Don’t you deserve some income tax money too? $750 [per child] welfare social security unemployment disability even if you never had a job.” Each of the returns submitted to the IRS was submitted by the defendant or her conspirators as self-prepared, as if it had been done by the individual taxpayer whose information had been stolen.

In addition to the tax return scheme, Jones also organized and operated a scheme to file phony deeds for multiple residential properties in Philadelphia, purporting to transfer ownership of the houses in order to sell them for a profit. Th defendant would research homes on real estate websites, typically targeting those where the owner had died or moved away, and would charge several thousand dollars to sell someone else one of these houses that she “deeded up.”

“Jones’ greed impacted the lives of many hundreds of victims, and her shameful actions had severe consequences for these innocent people,” said U.S. Attorney McSwain. “Not only did she and her co-conspirators steal personal information in order steal tax return money from the government, but also she sold people’s houses right out from underneath them to other people who believed that they were buying property from her legitimately. For her actions, she will now spend the better part of a decade in prison.”

“The degree to which Vontia Jones and her co-conspirators went in order to perpetrate this scheme is astounding,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “Not only did Vontia Jones steal the identities of unwitting individuals, she also stole millions of dollars from the US government; and ultimately US taxpayers. Today, she stands a convicted felon who will spend years in federal prison.”

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service, and is being prosecuted by Assistant United States Attorney Anthony J. Wzorek.

PHILADELPHIA – United States Attorney William M. McSwain announced that Sunny Sok, 30, of Philadelphia, PA, was convicted at trial of firearms and narcotics offenses arising from his illegal possession of a firearm and more than 50 grams of methamphetamine.

In June 2019, Sok was charged by Indictment with possession with intent to distribute more than 50 grams of methamphetamine, possession of a firearm during a drug trafficking crime, and being a felon in possession of a firearm. In April 2019, the defendant was stopped by a Philadelphia Police officer for a traffic violation. The officer then learned that the vehicle’s registration was expired and that there was an open arrest warrant out for the vehicle’s owner for probation violations. After discovering this information, the officer asked the defendant to exit the car. When Sok opened the door, the officer observed drug paraphernalia inside. Upon a further search of the vehicle, the officer recovered 50 grams of methamphetamine, over 300 pills of counterfeit oxycodone, a digital scale, and a loaded gun.

“The crime of being a felon in possession of a firearm is a serious offense, especially when the firearm is used in furtherance of drug dealing. This trial victory is an important step in the direction of making Philadelphia safer, when the City is currently suffering from an epidemic of violent crime and insidious drug dealing,” said U.S. Attorney McSwain. “My Office is determined to get dangerous, repeat offenders off the streets and behind bars.”

“This case is a good example of our law enforcement partners working with ATF’s crime gun intelligence to remove repeat offenders from the streets of our communities,” said Matthew Varisco, Special Agent in Charge of ATF’s Philadelphia Field Division. “A federal jury has convicted this defendant of federal crimes, so he is no longer in a position to endanger anyone else.”

The case was investigated by the City of Philadelphia Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives, and is being prosecuted by Assistant United States Attorney Anita Eve.

PHILADELPHIA – United States Attorney William M. McSwain announced that Carlos Matchett, 30, of Atlantic City, NJ; Khalif Miller, 25, of Philadelphia, PA; and Anthony David Ale Smith, 29, of Philadelphia, PA, have been charged by Indictment for the arson of a Philadelphia Police Department (PPD) vehicle, and in a separate case, that Ayoub Tabri, 24, of Arlington, VA, has been charged by Indictment for the arson of a Pennsylvania State Police (PSP) vehicle. Both incidents occurred during violent civil unrest in Philadelphia on May 30, 2020.

Following peaceful protests in Philadelphia in the early afternoon of May 30, 2020 in response to the killing of George Floyd in Minneapolis, MN, civil unrest began to unfold later that afternoon that resulted in widespread looting, burglary, arson, destruction of property, and other violent acts.

On that day, PPD Civil Affairs Car C-109 was parked on the north side of City Hall near Broad and Market Streets. During the violent episodes that began in the vicinity of City Hall that afternoon, defendants Matchett, Miller, and Smith allegedly placed combustible materials into the vehicle, after a road flare placed in the vehicle started a fire. As a result of these acts, the PPD vehicle was destroyed. A grand jury charged each of the defendants with two counts of arson, and one count of obstructing law enforcement in the commission of their duties during a civil disorder.

On the same day and at roughly the same time, PSP troopers responded to the intersection of Broad and Vine Streets, a few blocks north of City Hall. PSP placed two patrol sport utility vehicles – marked as K1-7 and K1-17 – at the on-ramp for I-676 in an effort to prevent protestors from gaining access to the highway. Soon thereafter, a group of individuals began attacking the two vehicles. The windows of the vehicles were shattered and PSP equipment stored inside was stolen, including road flares, fire extinguishers, and “riot bags” containing additional PSP-issued equipment. Tabri allegedly threw a lit road flare into K1-17, igniting a fire that engulfed the SUV. A grand jury charged the defendant with two counts of arson, and one count of obstructing law enforcement in the commission of their duties during a civil disorder.

“I want to be clear that we at the U.S. Attorney’s Office support peaceful protest – indeed, it is part of our job to protect First Amendment freedoms. We take that responsibility very seriously. But violence is not speech. There is no right to riot, loot, rob, destroy or commit arson. If you engage in violent civil unrest and commit a federal crime in this District, we will come after you as hard as we can because residents deserve safe and secure neighborhoods, not mayhem.”

“The FBI remains committed to protecting the rights of individuals to peacefully exercise their First Amendment freedoms,” said Philadelphia Division Special Agent in Charge Michael J. Driscoll. “Violence and destruction of property jeopardize the rights and safety of all citizens, including peaceful demonstrators. Today’s indictments send the message that if you seek to hijack peaceful protests to pursue violent and extremist agendas, the FBI and its law enforcement partners will bring you to justice.”

“These individuals were not in the City to participate in a peaceful protest: instead, it appears they posed as protestors and allegedly set fire to a Pennsylvania State Police vehicle and a Philadelphia Police vehicle,” said Matthew Varisco, Special Agent in Charge of ATF’s Philadelphia Field Division. “Arson is an extremely violent act which presents a tremendous threat to public safety. We will continue to work with our local, state and federal partners to seek justice during these tumultuous times.”  

“Thousands peacefully assembled and protested throughout Philadelphia following the killing of George Floyd in May of 2020,” said Brian A. Michael, Special Agent in Charge for HSI Philadelphia. “Today’s indictments demonstrate how law enforcement successfully works together to pursue violent opportunists who commit criminal acts that undermine the peaceful protestors’ message. HSI works closely with federal, state, and local law enforcement partners to investigate, identify and hold accountable individuals who commit malicious, destructive, unlawful acts.”

“The Pennsylvania State Police thanks all of the partnering local, state, and federal agencies that assisted with this investigation,” said Captain James Kemm, commander of the Pennsylvania State Police Troop K. “We respect the public’s right to peacefully protest, but violence and destruction of property will not be tolerated.”

If convicted, all four defendants face a mandatory minimum of seven years in prison, and a maximum possible sentence of 65 years in prison, followed by three years of supervised release, and a fine of up to $750,000.

The Matchett, Miller, and Smith case was investigated by the Federal Bureau of Investigation, Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Philadelphia Police Department; and the Philadelphia Fire Marshal’s Office; with assistance from the New Jersey Office of Homeland Security and Preparedness. The Tabri case was investigated by the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Pennsylvania State Police. Both cases are being prosecuted by the United States Attorney’s Office for the Eastern District of Pennsylvania.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – United States Attorney William M. McSwain convened a press conference today to announce federal charges against four individuals for allegedly committing arson of police vehicles during riots that occurred in Philadelphia on May 30, 2020. U.S. Attorney McSwain also addressed concerns about current civil unrest in the City.

Remarks as Prepared for Delivery

Good afternoon and thank you for joining us.  I am here today to announce criminal charges against several defendants for torching police cars during the violent civil unrest that occurred in Philadelphia in late May and early June.  My law enforcement colleagues and I are also here to address the current situation in the City.  Before I get into more details, I want to acknowledge and thank all the law enforcement partners standing with me here today:

• Michael J. Driscoll, Special Agent in Charge from the Philadelphia Field Office of Federal Bureau of Investigation;
• Matthew Varisco, Special Agent in Charge of Philadelphia Field Division of the Division of Alcohol, Tobacco, Firearms, and Explosives;
• Brian Michael, Special Agent in Charge from the United States Department of Homeland Security, Homeland Security Investigations;
• Major Richard Ambrosio, of the Pennsylvania State Police; and
• Jared Maples, Director of the New Jersey Office of Homeland Security and Preparedness

Your presence here today is a testament to our collective resolve to protect and promote two fundamental principles of our American democracy – freedom of expression and the rule of law. 

This nation is grounded in freedom of speech.  At its core is every American’s right to join with fellow citizens in protest or peaceful assembly.  Just as importantly, this nation is also grounded in the rule of law.  It is imperative that we preserve both – and we will.  The City’s residents deserve to have their voices heard, and they deserve safe and secure neighborhoods, not mayhem. 

Mayhem – in the form of rioting, looting, robbery, arson, destruction of property, attacks on police officers and other forms of violence – does not bring justice.  It accomplishes nothing.  If you are a protestor trying to communicate a message, engaging in mayhem obscures that message.  It also turns public opinion squarely against you.  And most significantly, it can land you in federal prison for a long time.  Criminal behavior has been and will be met with swift and decisive action by my Office.  That form of justice will be served.

Which brings me to today’s charges, stemming from the rioting and destruction that ensued in Philadelphia during the violent civil unrest following George Floyd’s death.  What began as peaceful protests in Philadelphia in the early afternoon of May 30 escalated into something very different.  Much of the rioting was captured on video that aired across the country.  Among other things, rioters smashed store fronts, looted stores, hurled objects at the police, and torched police cars. 

Among those torched police cars was a Philadelphia Police Department vehicle (Car C-109) and two Pennsylvania State Police (PSP) SUVs (numbers K1-7 and K1-17).  The defendants’ alleged involvement in the burning of these vehicles is the subject of today’s charges.

In the first case, my Office has filed a three-count Indictment against Ayoub Tabri, alleging several crimes, all stemming from his alleged destruction of one of the PSP SUVs (number K1-17) that was parked near the intersection of Broad and Vine Streets near the entrance to Interstate 676 on May 30.  The Indictment charges Tabri with arson, attempted arson, aiding and abetting and obstruction of law enforcement during civil disorder.  If convicted, he faces a mandatory minimum term of seven years in prison and a maximum term of up to 65 years in prison, followed by three years of supervised release, a $750,000 fine, and a $300 special assessment. 

On May 30, PSP troopers responded to the intersection of Broad and Vine Streets, near the overpass of I-676, based on a report of a large gathering of protesters.  PSP troopers responded to this area in two SUVs to prevent protestors from gaining access to I-676 and from endangering themselves or others by demonstrating on the highway and impeding motorists’ travel. 

At 3:42 p.m., a group of individuals began attacking the two PSP SUVs, which were locked and contained PSP-issued rifles and other police equipment.  Individuals began striking the SUVs with various objects, including skateboards, a bike lock, and other projectiles, in addition to kicking and striking the SUVs with closed fists.  Eventually, the individuals shattered the windows of both SUVs and stole PSP equipment stored inside, including road flares, fire extinguishers, and “riot bags” containing additional PSP-issued equipment.  After these items were stolen, an individual sprayed the rear area of K1-17, inside and out, with an unknown liquid.

PSP troopers assigned to the area reported that individuals then threw lit road flares into K1-17, igniting the fire which engulfed that SUV.  Videos taken at the scene allegedly captured Tabri throwing a lit road flare into K1-17.  Fire engulfed K1-17 and ultimately destroyed it. 

The harm allegedly caused by Tabri extended beyond destruction of government property.  One PSP trooper, who was standing near K1-17, was hit by a lit road flare and part of his uniform caught fire.  Additionally, this trooper’s left hand suffered burn injuries when he reached into K1-17 to retrieve a rifle in order to prevent it from being stolen.  He was treated for his injuries on the scene by EMS. 

In the second case announced today, my Office has charged three individuals, Carlos Matchett, Khalif Miller and Anthony Smith, in a three-count Indictment with arson, attempted arson, aiding and abetting, and obstruction of law enforcement during a civil disorder.  These charges are based upon their alleged destruction of a Philadelphia Police Department Civil Affairs vehicle (Number C-109), which was parked near Philadelphia City Hall on May 30, 2020.  Specifically, Counts One and Two allege that these defendants “maliciously damaged and destroyed, attempted to damage and destroy, and aided and abetted the damaging and destruction [of the PPD car] by means of fire,” and Count Three alleges that the defendants “knowingly committed acts, and aided and abetted such acts, to obstruct, impede, and interfere with law enforcement officers lawfully engaged in the lawful performance of their official duties incident to, and during the commission of, a civil disorder.”  The Indictment further alleges that these defendants’ actions created a substantial risk of injury to one or more persons, including public safety officers. 

All three defendants are in federal custody.  My Office will be moving for detention of each of these defendants so that they remain in federal custody until their trial.

If convicted, the defendants each face a mandatory minimum of seven years in prison and a maximum possible sentence of 65 years in prison, followed by three years of supervised release, a fine of up to $750,000, and a special assessment of $300. 

A final word about Mr. Smith: as has already been reported, he is a prominent activist and one of the lead organizers of the Philadelphia Coalition for Racial Economic and Legal Justice (or Philly for REAL Justice).  To state the obvious, that it not why he is now in federal prison.  Mr. Smith was not “targeted” in any way by my Office.  I knew nothing about Mr. Smith or his affiliations until the investigation was nearly complete and the proposed charges had been written up by dedicated and capable career federal prosecutors.  We do not investigate people at the U.S. Attorney’s Office; we investigate alleged criminal behavior.  A defendant’s race, ethnicity, gender, political affiliation or group membership makes no difference to me or anybody else in my Office.  In our investigations and prosecutions, all we care about is whether you committed a federal crime.  And if you did, you will face the consequences.

Today’s Indictments are the culmination of an incredible amount of work by the members of both case teams who began working these cases literally as these events unfolded in real time.  On the Tabri Indictment, I want to acknowledge and thank the FBI; the ATF; and the Pennsylvania State Police.  On the Matchett, Miller, and Smith Indictment, I want to acknowledge and thank the following law enforcement partners: the FBI; Homeland Security Investigations; the ATF; the Philadelphia Police Department; and the Philadelphia Fire Marshall’s Office – all of whom had an important hand in the investigation.  I also want to acknowledge the assistance of the New Jersey Office of Homeland Security and Preparedness.  And from my Office, I want to commend and thank Assistant United States Attorney Tom Perricone, Chief of the National Security Unit, who is supervising both prosecutions.

I also want to thank the leadership of the law enforcement agencies standing with me for their continued partnership with my Office.  The most effective strategy for preventing and reducing crime is aggressive prosecution and strong law enforcement partnerships at every level.  Our presence today demonstrates that we are united in our purpose – to keep Philadelphia safe – and united in our approach to accomplishing this goal.

Today’s federal charges are the latest in a series of cases my Office has brought stemming from the rioting and destruction that occurred during the civil unrest at the beginning of last summer.  On May 30, I pledged to hold people accountable for criminal behavior during civil unrest, and we have.  That is one of the main reasons why the City did not experience violent civil unrest after early June – because would-be rioters knew that the U.S. Attorney’s Office was on duty, together with our federal partners and the Philadelphia Police Department. 

Unfortunately, during the past week, the City has gone backwards, with rioting and looting that began in West Philadelphia and spread to other parts of the City, in reaction to the death of Walter Wallace.  Add to this the impending election on Tuesday and you have a combustible cocktail.  I want to be clear that we at the U.S. Attorney’s Office support peaceful protest – indeed, it is part of our job to protect First Amendment freedoms.  We take that responsibility very seriously.  But violence is not speech.  There is no right to riot, loot, rob, commit arson or destroy.  If you engage in violent civil unrest and commit a federal crime in this District, we will come after you as hard as we can.  You will go to jail.  It is not worth it. 

At this moment in our City’s history, we can go down one of two paths.  We can go down a path of healing and respect for democracy, where we work together to improve relations between law enforcement and the community, and where we have a free, fair and peaceful election next week.  Or we can go down a path of destruction – a path that further divides us.  I know what path I want to go down. 

At this time, I would like to introduce FBI Special Agent in Charge, Mike Driscoll.  He will share his remarks, and then we will all be available for your questions.  Thank you.

PHILADELPHIA – United States Attorney William M. McSwain announced that Kashamba John, 32, of Atlanta, GA, was sentenced to 30 years in prison, 10 years of supervised release, and ordered to pay restitution in the amount of $23,299 by United States District Judge Eduardo C. Robreno for running a national sex trafficking ring, in which he and others forced vulnerable women and girls to travel and prostitute themselves in multiple states. As part of his sentence, the defendant must also register as a sex offender.

In May 2019, the defendant was convicted after trial of conspiring to commit sex trafficking; sex trafficking by fraud, force, or coercion; and transporting individuals in interstate commerce with the intent that the individuals engage in prostitution. Between July 2011 and October 2016, John ran a national sex trafficking ring, selling the bodies of women and girls in Pennsylvania, Florida, California, Georgia, North Carolina, and elsewhere. Conspiring with others, John targeted under-aged runaways, homeless women, and women battling substance abuse in order to manipulate them into prostitution for his benefit. One of John’s victims was rescued by the Pennsylvania State Police when an Uber driver, trained in recognizing sex trafficking victims through her church, flagged down a state trooper when she suspected that the passenger in her vehicle was likely a victim. Two other victims of the defendant were teenagers at the time John trafficked them by force.

“The defendant’s actions in this case were thoroughly vile and disgusting,” said U.S. Attorney McSwain. “Kashamba John preyed upon people he knew would be the most vulnerable, and therefore the easiest for him to control and manipulate into doing his bidding. Now he will spend decades in prison, where he will no longer be able to do harm to anyone else.”

“Sadly, sex trafficking is a scourge that still plagues communities all across the United States, including right here in Philadelphia. Today’s sentencing of Mr. John sends a strong message that this form of violent modern day sex slavery will not be tolerated,” said Brian A. Michael, Special Agent in Charge for HSI Philadelphia. “HSI Philadelphia and our law enforcement partners will continue to be at the forefront of fighting all forms of human trafficking; not only ensuring these traffickers are held responsible for their vile criminal acts, but also helping the victims reclaim their lives.”

“We won’t tolerate this type of treatment of our fellow human beings,” Attorney General Josh Shapiro said. “My office will continue to work with our federal, state and local law enforcement partners to investigate and prosecute these cases and keep communities safe from predators like John.”

The case was investigated by the Department of Homeland Security, Homeland Security Investigations, the Pennsylvania State Police, and the Pennsylvania Office of Attorney General, and is being prosecuted by Assistant United States Attorneys Melanie Babb Wilmoth and Sarah Damiani.

PHILADELPHIA, PA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Hercules-Vimas Joint Venture, LLC has agreed to pay the United States $310,000 to resolve False Claims Act allegations that it participated in a fraudulent scheme designed to take advantage of the Disadvantaged Business Enterprise (DBE) program in connection with its work on the federally-funded George C. Platt Memorial Bridge painting project.

Hercules-Vimas is a joint venture formed between the Hercules Painting Company and the Vimas Painting Company. Hercules Painting Company is based in New Castle, Pennsylvania. George Savakis, a Florida resident, is president of Hercules. Vimas Painting Company is located in Lowellville, Ohio. The president of Vimas is Bessie Xipolitas.

The DBE program is set forth by statutes and regulations to provide opportunities for businesses owned by socially and economically disadvantaged individuals to work on projects financed by the federal government. The program requires contractors to award a percentage of subcontracts on a given project to DBEs that serve a “commercially useful function.” A DBE does not serve a commercially useful function if it acts as a mere pass-through – an extra participant through which funds are passed to create the appearance that historically disadvantaged persons did the work.

That scenario is what the government alleges happened in this case. Specifically, in 2011 Hercules-Vimas was awarded a $42.7 million contract by the Pennsylvania Department of Transportation (PENNDOT) to paint the George C. Platt Memorial Bridge in Philadelphia. The contract, funded largely by the federal government, required that a percentage of work be performed by a DBE. To meet this requirement, Hercules-Vimas subcontracted with Vertech International, Inc. (Vertech), an Indian-American owned company certified as a DBE in Pennsylvania, to supply materials.

According to the government’s investigation, this arrangement was a sham. While Hercules-Vimas represented to PENNDOT that Vertech served as the supplier, Hercules-Vimas actually worked directly with a large, non-disadvantaged business to deliver paint and materials for the project, while Vertech merely created invoices designed to conceal the fraud in exchange for a nominal fee. In 2016, the owner of Vertech pleaded guilty to conspiracy to commit wire fraud for Vertech’s role in this fraudulent scheme.

“By allegedly misrepresenting that Vertech was doing work on the project, Hercules-Vimas was able to submit the lowest bid and secure a large government contract,” said First Assistant U.S. Attorney Williams. “This took jobs away from the legitimate disadvantaged businesses the DBE program is intended to serve. As alleged, it was fraud – plain and simple – and it will not be tolerated in this district.”

“DBE fraud is harmful in two distinct ways. First, it prevents legitimate disadvantaged businesses from participating in transportation infrastructure contracts. And second, it compromises the integrity of the Department’s DBE program,” said Douglas Shoemaker, regional Special Agent-in-Charge, United States Department of Transportation Office of Inspector General. “We remain steadfast in our commitment to working with our law enforcement and prosecutorial partners to protect the taxpayers’ investment in our nation’s infrastructure from DBE fraud schemes that undermine DOT-funded programs and projects and the public trust.”

The settled civil claims are allegations only.  There has been no determination of civil liability.  The investigation was conducted by the United States Department of Transportation, Office of Inspector General and the United States Department of Labor, Office of Inspector General. For the United States Attorney’s Office, Assistant United States Attorneys David Degnan, Bryan Hughes, and Eric Gill handled the investigation and settlement.

PHILADELPHIA – United States Attorney William M. McSwain announced that Peter Hutton, 24, of Philadelphia, PA was convicted at trial with possession of a firearm by a felon, arising from a 911 call placed on July 5, 2019, reporting that a man with a gun was seen on Locust Avenue in the Germantown section of Philadelphia.

In February 2020, Hutton was charged by Indictment with one count of possession of a firearm by a felon, stemming from the July 2019 incident and the subsequent arrest of the defendant by Philadelphia Police officers. After the emergency call was received, officers arrived at the scene and immediately saw a man, later identified as Hutton, matching the description provided over police radio. The defendant was standing next to the open rear driver’s side door of a white Toyota Camry. As the officers approached, Hutton looked in the direction of the officers and then leaned into the open door to get into the car. As the defendant did this, the officers saw Hutton reaching into his waistband for what appeared to be a black object.  Officers then removed the defendant from the car and recovered a black Glock, model 19, 9mm semi-automatic pistol, loaded with 12 live rounds of ammunition, in the rear interior of the car.

“The crime of being a felon in possession of a firearm is a serious offense, particularly in a city like Philadelphia, where the problem of gun violence continues to grow every day,” said U.S. Attorney McSwain.  “There is a reason convicted felons like Hutton no longer have the right to possess a potentially lethal weapon.  The answer to Philadelphia’s violent crime crisis is to get criminals like Hutton off the streets, which is exactly what the U.S. Attorney’s Office is focused on as part of our anti-violence strategy.”

“Convicted felons who possess firearms are an inherent danger to the community,” said Eric Degree, acting Special Agent in Charge of ATF’s Philadelphia Field Division.  “This conviction highlights the value of the collaborative effort with our local, state, and federal partners to reduce violent crime and helps bring a sense of security to our neighborhoods plagued by gun violence.”

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

 The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and is being prosecuted by Assistant United States Attorney Mary Kay Costello.

PHILADELPHIA – United States Attorney William M. McSwain announced that Dean Rossi, 55, of Warrington, PA, was sentenced to five years in prison, four years of supervised release, and was ordered to pay $2.85 million in restitution and $1.38 million in forfeiture by United States District Judge Joel H. Slomsky, for devising and participating in schemes to defraud three financial institutions out of millions of dollars.

Rossi was convicted at trial in March 2018 on seven charges: one count of conspiracy to commit mail fraud affecting a financial institution and bank fraud; one count of mail fraud affecting a financial institution; three counts of bank fraud; and two counts of loan fraud.

From at least December 2006 until about March 2012, Rossi and his co-conspirators participated in schemes to defraud Nova Bank, First Cornerstone Bank, and Leesport Bank, which later became VIST Financial Bank, out of more than $4.15 million in connection with multiple real estate closings for small residential properties in working class neighborhoods in the Philadelphia area. In each scheme, the defendant conspired with others to obtain fraudulent mortgage loans and made misrepresentations regarding the disbursement of those funds and his income. The defendant also falsified numerous documents, including tax returns and HUD-1 settlement sheets. Although the banks were able to mitigate some of their fraud losses, the banks and their insurers still suffered losses exceeding $2.85 million. Rossi personally pocketed a total of $1.38 million.

“The scope and duration of Rossi’s fraud are simply stunning,” said U.S. Attorney McSwain. “He stole millions of dollars from bank lenders and preyed upon residential neighborhoods – and then attempted to cover his tracks with lies. That sort of white collar crime deserves significant prison time, which is what Rossi has earned.”

“Dean Rossi lied on mortgage applications starting in 2006, his lies and greed helped to contribute to the financial meltdown in 2008,” observed Damon Wood, Inspector in Charge of the Philadelphia Division of the Postal Inspection Service.  “Over ten years later, after being found guilty at trial, he has finally been sentenced to five years in jail.  I want to thank the Postal Inspectors and the Assistant United States Attorneys who stayed with this case for nearly a decade.  The Postal Inspection Service has long history of investigating frauds schemes, and we will continue to lead and support investigations into fraud schemes that use the mail.” 

The case was investigated by the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorneys Mark Dubnoff and Elizabeth Ray.

PHILADELPHIA – United States Attorney William M. McSwain announced that Assistant United States Attorney Richard P. Barrett will lead the efforts of the United States Attorney’s Office for the Eastern District of Pennsylvania in connection with the Justice Department’s nationwide Election Day Program for the general election on November 3, 2020. AUSA Barrett has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Pennsylvania, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and any other voting rights concerns in consultation with Justice Department Headquarters in Washington.

The Department of Justice has an important role in deterring ballot fraud and discrimination at the polls and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible ballot fraud and voting rights violations while the polls are open through Election Day.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their direction. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or illiteracy).

“Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being impacted by fraud,” said U.S. Attorney McSwain. “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. The Department of Justice will act promptly and aggressively to protect the integrity of the election process, but it is imperative that anyone with specific information about voter interference or election fraud report it immediately to my Office, the FBI, or the Civil Rights Division.”

Voting is the cornerstone of American democracy. The federal government must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. U.S. Attorney McSwain stated that AUSA Barrett will be on duty in this District while the polls are open in order to respond to complaints of election fraud or voting rights concerns during the voting period that ends on November 3, 2020, and to ensure that such complaints are directed to the appropriate authorities. AUSA Barrett can be reached by the public at the following telephone numbers: (215) 861-8420 and (215) 861-8200.

In addition, the FBI will have special agents available in each field office throughout the country to receive allegations of election fraud and other election abuses on Election Day. The local FBI field office can be reached by the public at (215) 418-4000.

Finally, complaints about possible violations of the federal voting rights laws can also be made directly to the Civil Rights Division in Washington, DC by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/.

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

PHILADELPHIA – United States Attorney William M. McSwain announced that José Antonio Luna Benscome, 42, of Philadelphia, PA, was sentenced by U.S. District Court Judge C. Darnell Jones to 30 years in prison to be followed by five years of supervised release for child pornography offenses. The defendant’s sentence also requires him to register as a sex offender under Megan’s Law.  

In October 2019, Luna Benscome pleaded guilty to charges of manufacturing and possessing child pornography, related to his abuse of a four-year-old child. In July 2018, the mother of the victim observed Luna Benscome holding her child’s hand and acting in a strange manner in the kitchen of her residence in Philadelphia. The mother reviewed her home surveillance system’s video, and found footage that showed Luna Benscome molesting her child on multiple occasions. The mother confronted the defendant about the sexual abuse, and he confessed to her, but then tried to convince her not to report it to the police. The defendant also confessed to Philadelphia Police Department detectives once the crime was reported. Subsequent investigation revealed that, in addition to sexually abusing the child and photographing the abuse, Luna Benscome made the child watch pornography on a number of occasions, took numerous photographs of the child naked, and had the child touch his genitals.

“Sexual exploitation of a minor of any age, let alone a preschooler, is utterly reprehensible and will be met with swift justice,” said U.S. Attorney McSwain. “Because of the quick response of the victim’s mother, the Philadelphia Police Department, and the FBI, we uncovered additional evidence of this defendant’s crimes – ensuring that he will now spend decades behind bars, where he belongs.”

“Luna Benscome subjected a four-year-old child to serial sexual abuse, documenting those depraved acts for his continued gratification,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He’s a clear danger to children and has earned every minute behind bars to which he’s been sentenced. The FBI and our law enforcement partners are determined to take predators like this off the street, to prevent them from victimizing anyone else.”

This case is part of Project Safe Childhood (PSC), a program bringing together all levels of law enforcement and the communities they serve to reduce the sexual exploitation and abuse of children. 

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney José Arteaga.

PHILADELPHIA – United States Attorney William M. McSwain announced that Alexander S. Rowland, 29, of Penns Grove, NJ, was charged by Indictment with seven counts of mail fraud, 30 counts of wire fraud, one count of bank fraud, one count of securities fraud, one count of investment adviser fraud, and two counts of money laundering related to a scam in which he purported to be an investment adviser and either stole or lost victims’ money, resulting in total losses of more than $2 million.

The Indictment alleges that Rowland, a former warehouse operator, started an investment company in July 2016 that he incorporated in New Jersey, called Roaring Investments, Inc., and which he operated out of his apartment. The defendant held himself out to potential investors as a licensed investment adviser who would invest their money in stocks and cryptocurrency, and promised them a minimum rate of return of 25%, with potential returns of 50% or higher. Through these and other misrepresentations, Rowland was able to dupe his victims into investing almost $3 million in Roaring Investments. Eventually, the defendant was able to move his company from his apartment in New Jersey into office space in Philadelphia.

According to the Indictment, despite telling investors that he was a licensed investment adviser, in reality Rowland did not hold any licenses to sell securities or offer investment advice. Further, the defendant invested only approximately $518,000 of the almost $3 million he obtained from his clients, and those investments lost more than $100,000. The remaining client funds (almost $2.5 million) were used by Rowland in a variety of ways that were never disclosed to his clients, including spending more than $1 million on himself by: taking large cash withdrawals; paying his own personal bills; buying luxury vehicles; paying for vacations and jewelry; paying for gym memberships; and buying more than $47,000 worth of firearms.

The Indictment also alleges that Rowland was able to deceive his clients into believing that their investments were safe and profitable through a variety of fraudulent means, including: (a) operating a “Ponzi” scheme by using new client funds to make payments to earlier clients who had invested with Roaring Investments, thereby tricking those earlier clients into believing that their investments were making money; (b) creating a website, “roaringinvestments.com,” through which clients could check their account balances and on which defendant Rowland posted false account balances for his clients; and (c) emailing false account statements to clients that listed their fictitious account balances and showed non-existent profits.

Finally, the Indictment alleges that the defendant received and ignored an August 2018 cease and desist letter from the Pennsylvania Department of Banking and Securities that instructed Roaring Investments to stop selling unregistered securities and for Rowland to stop serving as an unlicensed investment adviser. Instead, Rowland continued to solicit new investments from clients. All told, due to Rowland’s alleged fraudulent conduct, Roaring Investments’ clients lost more than $2,139,000.

“Honesty, integrity, and trust all play critical roles in the relationship between a financial adviser and a client,” said U.S. Attorney McSwain. “Here, Rowland wasn’t even a legitimate advisor: he is an alleged con man who lived lavishly on his clients’ money – funds they expected him to invest responsibly. The damage done to victims of such fraud can be disastrous. I want to especially thank the U.S. Securities and Exchange Commission and the Pennsylvania Department of Banking and Securities for their substantial assistance with this case.”

Rowland faces a maximum sentence of 835 years in prison, a five-year period of supervised release, a fine of $15,345,987.58, and a $4,200 special assessment.

The case was investigated by the Federal Bureau of Investigation with assistance from the U.S. Securities and Exchange Commission and the Pennsylvania Department of Banking and Securities, and is being prosecuted by Assistant United States Attorney Michael S. Lowe.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – United States Attorney William M. McSwain announced that Keenan Smith, 29, of Philadelphia, PA was sentenced to nineteen years in prison and five years of supervised release by United States District Judge Eduardo C. Robreno for attempting to rob the Trolley Car Diner on Germantown Avenue in Northwest Philadelphia.

The defendant was convicted after trial in August 2019 of attempted robbery which interferes with interstate commerce (Hobbs Act robbery), and using or carrying, and discharging, a firearm during and in relation to a crime of violence. In the early morning hours of January 31, 2018, Smith snuck into the Trolley Car Diner through a side entrance before it opened for business that day, and waited outside the manager’s office with a gun. When the manager arrived, Smith pointed the gun at the manager’s head, and then a struggle ensued as the manager attempted to disarm the defendant. Ultimately, the defendant was shot in the hand, causing him to flee, but he was later arrested by the Philadelphia Police Department after seeking medical treatment for his gunshot wound at a hospital in Roxborough. Evidence presented at trial showed that Smith’s DNA was found to match DNA from blood left at the scene of the crime.

“Nobody should be put in a positon of fearing for their life when simply showing up to do their job,” said U.S. Attorney McSwain. “My Office is committed to prosecuting and punishing this type of inexcusable violence, which is all too prevalent in Philadelphia. Federal crime means federal time: here, 19 years. Keenan Smith deserves every bit of that sentence.”

“Imagine the terror of walking into a gunpoint ambush, alone with an armed stranger making demands,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “In attempting this armed robbery, Keenan Smith made clear that he’s a threat to public safety. Although Smith was the one injured during the robbery, it could have easily been his intended victim or an innocent bystander harmed. The FBI and our partners at the Philadelphia Police Department are committed to taking violent criminals off the street, to keep them from victimizing anyone else.”

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department, with assistance from the Whitemarsh Township Police Department, and is being prosecuted by Assistant United States Attorney Timothy M. Stengel.

PHILADELPHIA – United States Attorney William M. McSwain announced that Rahim Amin, 36, of Philadelphia, PA was sentenced to 15 years in prison, and five years of supervised release by United States District Judge Mark A. Kearney for his role in a large scale drug trafficking ring.

The defendant pleaded guilty in November 2019 to conspiracy to distribute controlled substances, possession with intent to deliver methamphetamine, cocaine, heroin, and fentanyl, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a convicted felon. Amin was a member of the “Skipworth” drug trafficking organization, which sold bulk quantities of methamphetamine, fentanyl, and other deadly drugs in Philadelphia and its surrounding suburbs. Following a lengthy investigation, including a series of court-ordered wiretaps, the defendant and his co-conspirators were indicted by a federal grand jury. 

Amin’s co-conspirators, Damir Skipworth (the gang’s namesake), Jarrett Cobb, and Tyrone Smith all previously pleaded guilty to drug trafficking charges in this case and received significant prison sentences: Skipworth more than eight years, Cobb more than five years, and Smith more than three years. A fourth co-defendant, Vontez Scales, was convicted at trial of possession with intent to distribute and conspiracy to distribute narcotics and was sentenced to over 26 years.

“By pumping millions of dollars worth of meth, heroin, cocaine and fentanyl into our region, the Skipworth drug trafficking organization was a menace to Philadelphia and its suburbs,” said U.S. Attorney McSwain. “With Amin’s sentence, all of the defendants in this case have now received substantial periods of incarceration. Nobody should have to endure living in a neighborhood where drug dealers and thugs act like they’re in charge. My Office, together with our law enforcement partners, must be relentless in attacking and destroying these drug gangs, along with the violence that often comes with them.”

“The dismantling of the Skipworth DTO by federal law enforcement officers and the Bucks County Drug Strike Force is a great testament to the force multiplier effect that we achieve when we all work together to make our community safer.  No egos; just a great collaborative effort by all involved for justice and public safety,” said Bucks County District Attorney Matthew Weintraub.

The case was investigated by the Bucks County Detective Bureau and the Drug Enforcement Administration, and is being prosecuted by Assistant United States Attorneys Christopher Parisi and Andrea Foulkes.

PHILADELPHIA – United States Attorney William M. McSwain announced that Richard Chase Hoover, 34, of Las Vegas, NV and Amir Boyer, 29, of Philadelphia, PA were sentenced by United States District Judge Michael M. Baylson to 15 years and 10 years in prison, respectively, to be followed by five years of supervised release, for their participation in a long-term drug trafficking conspiracy in Philadelphia from at least March 2017 through June 2018.

In November 2019, both defendants pleaded guilty to multiple counts in a Second Superseding Indictment, which charged nine defendants with various drug trafficking crimes. These nine defendants are members of a violent drug trafficking organization (also purporting to be rap artists) known as the Original Block Hustlaz or “OBH”. The 16-count Second Superseding Indictment alleged that the defendants conspired to distribute and did distribute cocaine, crack, methamphetamine, and heroin from various locations that they controlled, particularly in and around North Philadelphia.

In September 2017, officers and detectives from the Philadelphia Police Department executed a search warrant at 3234 North Sydenham Street, which was a property used by members of OBH to store and sell drugs. During the execution of the search warrant, numerous drugs were seized, including approximately 62 grams of cocaine base (“crack”), 229 grams of heroin, and 48 grams of a methamphetamine mixture. The officers also seized $8,101 from the residence.

In May 2018, FBI agents observed Hoover enter an apartment on Columbus Boulevard in Philadelphia, soon after he returned from a trip to Los Angeles. Pursuant to a federal search warrant, the FBI followed Hoover into the apartment and found 10 kilograms of cocaine, nearly 6 pounds of pure methamphetamine, and $20,000 in cash. Then, in October 2018, Amir Boyer was arrested at the property on North Sydenham Street, where he had been living with his girlfriend and two children. During the execution of the arrest, officers seized approximately 20 pounds of marijuana and a firearm loaded with eight live rounds.

“Hoover and Boyer were members of a crew that trafficked in poison that it transported across the country and pushed here on our streets in Philadelphia,” said U.S. Attorney McSwain. “They also used violence to maintain their hold on their drug territory, in order to keep the cash rolling in, while pretending to do legitimate business as musicians as part of their cover. Now OBH has been decimated, hopefully never to return.”

“The O.B.H. gang steadily poisoned the parts of Philadelphia they controlled, dealing drugs and dishing out violence,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “The money they made from dealing cocaine, crack, meth, and heroin fueled this violence. The FBI will continue putting drug traffickers firmly out of business and behind bars, as we fight violent crime and work to make this city safer.”

“Hoover and Boyer headed a poly-drug distribution organization that distributed significant amounts of illicit drugs such as cocaine, crack, methamphetamine, heroin, and marijuana,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration's (DEA) Philadelphia Field Division. “Their drug-trafficking activities negatively impacted countless lives in and around North Philadelphia.”

This case is part of the FBI’s Violent Gang Safe Streets Task Force, a program through which federal, state, and local law enforcement agencies collaboratively address the violent crime plaguing communities. It was investigated by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Everett Witherell and Timothy M. Stengel.

PHILADELPHIA – United States Attorney William M. McSwain announced that Steven J. Russo, 43, of Pennsburg, PA, was sentenced by U.S. District Court Judge Jeffery L. Schmehl to three years in prison, three years of supervised release, and ordered to pay $2,798,000 in restitution to the victim and $980,000 in restitution to the IRS, for embezzling nearly $3 million from his former employer and making false statements on his federal income tax returns.

The defendant pleaded guilty in June 2020 to wire fraud related to the embezzlement scheme, and to filing false tax returns. Russo had served as the Director of Information Technology for a design and manufacturing company headquartered in Lancaster, PA, and over a period of almost six years embezzled money from the company in a variety of ways. His schemes included the use of sham corporations with virtual addresses, fake invoices, and access to the company’s credit cards and on-line accounts. Russo would use those company owned accounts to make unearned payments to the sham companies owned and controlled by him, and to purchase items that he kept for his personal use or sold for personal gain. Russo also filed false tax returns, failing to report his income accurately and claiming false expenses and deductions, resulting in a tax debt to the IRS of nearly $1 million.

“Embezzlement and tax fraud are forms of stealing, pure and simple,” said U.S. Attorney McSwain. “Russo held a senior position of trust with his former employer, and shamefully used that access to steal millions of dollars, while also ripping off the government (and honest tax payers) in the process. My Office will continue to work with our law enforcement partners to protect innocent businesses and taxpayers from being victimized by this type of fraud.”

“Mr. Russo’s decision to use deceit and fraud to line his pockets with his employer’s money and shirk his tax obligations has cost him his freedom,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “This sentence should serve as a deterrent to those who might contemplate similar actions.”

The case was investigated by the Internal Revenue Service – Criminal Investigations, and is being prosecuted by Assistant United States Attorney Bea L. Witzleben.

PHILADELPHIA – United States Attorney William M. McSwain announced that Archie Kissling, 25, of Aston, PA, was sentenced to 35 years in prison, 10 years of supervised release, and $39,000 in restitution by United States District Court Judge Jan E. DuBois for multiple child exploitation offenses, stemming from his sexual abuse of a young child for months, and his extensive collection of horrific child pornography. Kissling’s sentence also requires him to register as a sex offender under Megan’s Law.

In July 2019, the defendant pleaded guilty to six counts of manufacturing child pornography, and one count each of transportation and possession of child pornography. The investigation uncovered videos that Kissling had taken of himself sexually assaulting a 7-year-old boy in his care numerous times over at least a four-month period. Among other abuse, Kissling filmed himself masturbating the child, orally raping him, and attempting to sodomize the victim on multiple occasions. When investigators seized the defendant’s phones and online accounts, they uncovered a massive collection of child pornography that showed not only Kissling’s 7-year-old victim, but also more than 114,000 images and videos of some of the most sadistic pornography imaginable. The bulk of his collection featured infants, toddlers, and prepubescent children, primarily boys, who were being sexually abused by adults through digital penetration, and oral and anal rape.

“As federal prosecutors, we see horrific examples of child exploitation and sexual depravity on a routine basis, but this case is in a special category,” said U.S. Attorney McSwain. “Kissling belongs in only one place – prison – and will now spend the next thirty-five years there, where he will be unable to harm any more innocents.”

“Archie Kissling repeatedly sexually abused a little boy and documented it for his own twisted gratification,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “His trove of horrific images of that child and others represents an unimaginable level of pain and trauma inflicted on those young victims. Locking Kissling up doesn’t undo that damage, not by a long shot. But it does keep him from hurting anyone else and for that we’re thankful.”

This case is part of Project Safe Childhood (PSC), a program bringing together all levels of law enforcement and the communities they serve to reduce the sexual exploitation and abuse of children. The case was investigated by the Federal Bureau of Investigation, the Delaware County District Attorney’s Office, the Darby Township Police Department and the Pinellas County, Florida Sheriff's Department, and is being prosecuted by Assistant United States Attorney Michelle Rotella.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that twelve Chester County Prison inmates and their accomplices were charged federally with fraudulently applying for and obtaining emergency unemployment benefits related to COVID-19.  The defendants are charged with submitting false applications claiming that the prison inmates lost jobs as a result of the pandemic and are available to work full-time.  All the defendants were arrested and taken into custody this morning or were already in custody.

In addition, Pennsylvania Attorney General Josh Shapiro announced last week that his office brought state charges against six state prison inmates in the Eastern District of Pennsylvania, who fraudulently applied for and obtained the same type of emergency unemployment benefits.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act created the Pandemic Unemployment Assistance  (PUA) program, which provides unemployment benefits to individuals not eligible for regular unemployment compensation or extended unemployment benefits, including individuals, families, and businesses affected by the COVID-19 pandemic. Eligibility to receive weekly PUA benefits is predicated on an applicant’s unemployment for reasons related to the pandemic, and it requires that the applicant was able to work each day and, if offered a job, would have been able to accept it. Once an applicant is approved to receive benefits, the applicant is required to submit weekly certifications indicating that he or she: was ready, willing and able to work each day; was seeking full time employment; did not refuse any job offers or referrals; and had reported any employment during the week and the gross pay or other payments received. In all of the cases, the inmates falsely reported themselves eligible to receive PUA benefits when in fact they did not meet the eligibility requirements -- namely, they were not able to report to a job each day because of their incarceration.

These cases are being prosecuted and investigated by the United States Attorney’s Office and the Pennsylvania Office of Attorney General with assistance from the Chester County District Attorney’s Office and agencies of the Coronavirus Working Group led by the United States Attorney’s Office, including the Internal Revenue Service – Criminal Investigations,  the Federal Bureau of Investigation, the United States Postal Inspection Service, and the United States Department of Labor – Office of Inspector General.

“These fraudsters – many of whom were already incarcerated for breaking the law - treated a national public health crisis as an opportunity to cash in,” said First Assistant U.S. Attorney Williams. “This callous attitude rips off honest taxpayers who fund relief programs and also makes it much more difficult to provide funds to those who deserve and need them. My Office will do everything in its power to ensure that coronavirus fraud scams are stopped and punished.”

“After announcing our first round of arrests in these COVID unemployment scams, I promised that there were more to come,” said Attorney General Josh Shapiro. “Last week, my office charged 20 more individuals with illegally taking benefits away from hard-working Pennsylvanians who are struggling during this crisis, including six inmates from SCI Phoenix in Montgomery County. These arrests are not the end of our investigation, and I’ll continue working with my colleagues at the federal level to track down those heading these schemes, along with those who are willfully participating and breaking the law.”

“It is despicable that incarcerated people lined their pockets by taking advantage of the COVID-19 financial lifeline given to millions of honest, hardworking Pennsylvanians. Thank you to the U.S. Attorney’s Office of the Eastern District of Pennsylvania for your continuing efforts in fighting for justice,” said Chester County District Attorney Deb Ryan.

“Millions of Americans struggling financially due to job loss from COVID-19 depend on every single dollar of assistance available to them,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “When fraudulent applications wrongly drain those funds, it’s a blow to the folks who truly need help and a blatant theft of taxpayer dollars. Meantime, a word of advice to anyone thinking that scamming the government means easy money — the federal charges announced today can mean hard time, if convicted.”

“During tough economic times like this, it is despicable that people would seek to fraudulently obtain emergency unemployment benefits that were specifically meant for those who lost their jobs and are unable be gainfully employed amid this pandemic,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “We will continue to be relentless in our mission to dismantle these types of illicit scams and bring the criminals who run them to justice.”

“Today’s charges demonstrate the Office of Inspector General’s commitment to combating fraud against the Unemployment Insurance program, which has become increasingly prevalent amid the pandemic. We will continue to work with our law enforcement and state workforce agency partners to pursue individuals who seek to undermine the integrity of the Unemployment Insurance program,” said Derek Pickle, Acting Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.

Descriptions of the cases are below:

Vincent Hazzard, 49, of Coatesville, PA, was charged by Indictment with mail fraud, fraud in connection with emergency benefits, theft of money of the United States, and aiding and abetting. According to the Indictment, in July 2020, the defendant caused multiple individuals to assist him in filing a fraudulent application for PUA funds. The application falsely stated that Hazzard was available for immediate employment, and that he was currently unemployed due to the pandemic, when in fact he was not available for employment due to the fact that he was incarcerated at the Chester County Prison, was not scheduled for release until late September 2020, and was not unemployed due to the pandemic.  Hazzard had $1,590 credited to him by means of a prepaid bank card in late July 2020, and he caused others to spend or withdraw almost all of the funds by the end of August in order to avoid having funds left in his account in the event his fraud was discovered. If convicted of all charges, the defendant faces a maximum sentence of 60 years in prison, three years of supervised release, and a $750,000 fine.

Jacob Fulton, 32, and Emily Baier, 26, both of Coatesville, PA, were charged by Indictment with conspiracy to commit mail fraud, mail fraud and fraud in connection with major disaster or emergency benefits, and aiding and abetting. According to the Indictment, between July 12 and August 26, 2020, Fulton and Baier conspired to file claims for PUA benefits on behalf of inmates of Chester County Prison and agreed to keep a portion of the PUA benefits for themselves.  Fulton allegedly told Baier that with this scheme, they “can be f******* rich.”  The Indictment also alleges that on or about May 11, 2020, Fulton and Baier filed PUA claims for themselves, fraudulently claiming that they are entitled to PUA benefits. If convicted of all charges, Fulton faces a maximum sentence of 90 years in prison, five years of supervised release, and a fine of $2,250,000, and Baier faces a maximum sentence of 120 years in prison, five years of supervised release, and a fine of $2,500,000.

Christopher Hersh, 36, of Avondale, PA, was charged by Indictment with conspiracy to defraud the United States and fraud in connection with major disaster or emergency benefits. According to the Indictment, in July 2020, the defendant caused one of his close relatives to assist him in filing a fraudulent application for PUA funds. The application falsely stated that Hersh was available for immediate employment, that he was currently unemployed due to the pandemic, and that his last day of work had been in November 2019 because he was laid off due to a business closure caused by the pandemic, when in fact he was not available for employment due to the fact that he was incarcerated at the Chester County Prison, had been incarcerated since December 2016, and was not unemployed due to the pandemic. If convicted of all charges, Hersh faces a maximum sentence of 35 years in prison, three years of supervised release, and a $500,000 fine.

Kenneth Huggins, 24, of Coatesville, PA, and Patrice Hawthorne, 46, of Middletown, DE, were charged by Criminal Complaint with conspiracy to commit mail fraud. According to the Complaint, Huggins, an inmate at Chester County Prison, and his mother, Hawthorne, conspired over a series of recorded prison telephone calls to submit a fraudulent application for PUA benefit payments on Huggins’s behalf. The application falsely stated that Huggins was available for immediate employment and that he was currently unemployed due to the COVID-19 pandemic, when in fact he had been incarcerated since January 2020 at Chester County Prison and was not unemployed due to the pandemic. Huggins ultimately received more than $12,000 in unemployment benefits on a prepaid bank card; Hawthorne took custody of that card and withdrew funds for her own benefit. If convicted of all charges, both Huggins and Hawthorne face a statutory maximum sentence of 20 years in prison, three years of supervised release, and a $250,000 fine.

Biancha Kranzley, 31, of Coatesville, PA was charged by Complaint with fraud in connection with major disaster or emergency benefits. According to the Complaint, in July 2020, the defendant submitted a fraudulent application for benefits on behalf of an individual who, at the time, was incarcerated at the Chester County Prison. The application falsely stated that the applicant was unemployed due to the COVID-19 pandemic but was otherwise available to work, if offered a job. In fact, the applicant had been incarcerated since early 2019. The defendant received a prepaid debit card loaded with more than $13,000 in PUA benefits. She has used or withdrawn more than half of those funds. If convicted of all charges, Kranzley faces a maximum sentence of 30 years in prison, five years of supervised release, and a fine of $250,000.

Jennifer D’Hulster, 37, of Coatesville, Zachary Gathercole, 30, of Sadsburyville, Ashley Harrington, 30, of West Chester, and Anthony Schweitzer, 20, of Coatesville, were charged by Indictment with conspiracy, fraud in connection with emergency benefits and aiding and abetting, and mail fraud. According to the Indictment, in June 2020, D’Hulster fraudulently applied for benefits for Schweitzer, who has been an inmate at Chester County Prison since June 2020, and, in July 2020 applied for benefits for a different inmate who has been incarcerated at State Correctional Institute Phoenixville (SCIP) since March 2020, neither of whom lost a job because of COVID-19. D’Hulster successfully enabled the SCIP inmate to receive unemployment benefits totaling approximately $11,410 credited to the inmate by means of a prepaid bank card. In May 2020, Harrington fraudulently applied for benefits for Gathercole, who has been an inmate at Chester County Prison since August 2019, did not lose a job because of COVID-19, and has not been able to work. Harrington successfully enabled Gathercole to receive unemployment benefits totaling approximately $14,140. Additionally, D’Hulster and Gathercole collected personal identification information for other individuals, including inmates at Chester County Prison, to use to submit additional fraudulent applications for PUA benefits. If convicted of all charges, the defendants face the following maximum sentences: D’Hulster faces 90 years in prison, three years of supervised release, and a $1 million fine; Gathercole faces 140 years in prison, three years of supervised release, and a $1.5 million fine; Harrington faces 70 years in prison, three years of supervised release, and a $750,000 fine; and Schweitzer faces 50 years in prison, three years of supervised release, and a $500,000 fine.

Arthur Johnson, 44, of Coatesville, PA was charged by Complaint with fraud in connection with major disaster or emergency benefits. According to the Complaint, in July 2020, the defendant submitted a fraudulent application for benefits on behalf of an individual who, at the time, was incarcerated at the Chester County Prison. The application falsely stated that the applicant was unemployed due to the COVID-19 pandemic, but was otherwise available to work, if offered a job. In fact, the applicant had been incarcerated since October 2019. The defendant received a prepaid debit card loaded with approximately $13,500 in PUA benefits. All of the funds have been withdrawn. If convicted of all charges, Johnson faces a maximum sentence of 30 years in prison, five years of supervised release, and a fine of $250,000.

In addition to the above, six inmates at State Correctional Institution Phoenix (SCIP), located within the Eastern District of Pennsylvania, were arrested on state charges as part of an ongoing investigation by the Pennsylvania Office of Attorney General in partnership with the U.S. Attorney’s Office: Jermaine Plumer received $18,264 worth of PUA paid out after he provided personal identifying information to non-incarcerated individuals; Rafael Rodriguez received $22,109 worth of PUA paid out after he provided personal identifying information to non-incarcerated individuals; Dwayne Washington received $3,510 worth of PUA paid out after he provided personal identifying information to a non-incarcerated individual; Leroy Barnes was never paid, but he did provide his personal identifying information to a non-incarcerated individual to have them complete a PUA application on his behalf; Andrew Simms was never paid, but he did provide his personal identifying information to a non-incarcerated individual to have them complete a PUA application on his behalf; and Dexter Pitts a/k/a Kevin Perry received $3,150 worth of PUA paid out after he provided his personal identifying information to a non-incarcerated individual.

First Assistant U.S. Attorney Williams, Attorney General Shapiro and District Attorney Ryan thanked law enforcement officials at the Chester County Prison and officials at the Pennsylvania Department of Labor and Industry, the Pennsylvania Department of Treasury and the Pennsylvania Department of Corrections for their important assistance in these cases.  The federal cases are being prosecuted by Assistant United States Attorneys Judy Smith, Jeanette Kang, Anthony Wzorek, Jessica Rice, Anita Eve, Chris Mannion, and Melanie Wilmoth.

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

Ten men from around the country have been sentenced for participating in a child pornography enterprise and conspiracy, Acting Assistant Attorney General Brian Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania announced today.

U.S. District Judge Harvey Bartle III for the Eastern District of Pennsylvania imposed the following sentences:

• Andrew Dowdle, aka “Chigger,” 48, of Oswego, New York, was sentenced on Sept. 23, 2019, to 16 years in prison, followed by 15 years supervised release. He pleaded guilty on April 8, 2019.
• Carl Masters, aka “Harmon,” 45, of Lawrence, Kansas, was sentenced on Sept. 24, 2019, to 27 years in prison, followed by lifetime supervised release. He pleaded guilty on April 25, 2019.
• Ric Crossfield, aka “Officer Branner,” 25, of Jamaica, New York, was sentenced on Sept. 25, 2019, to 14 years in prison, followed by 40 years supervised release. He pleaded guilty on April 18, 2019.
• Christian Brennan, aka “Choad,” 46, of Puyallup, Washington, was sentenced on Nov. 7, 2019, to 20 years in prison, followed by 10 years supervised release. He pleaded guilty on April 23, 2019.
• Sharif El-Battouty, aka “Fritos,” 39, of Woodside, New York, was sentenced on March 16, 2020, to 30 years in prison, followed by lifetime supervised release. He was found guilty at trial on May 2, 2019.
• Jarrett Lea, aka “Toot,” 27, of Charlotte, North Carolina, was sentenced on Oct. 1 2020, to 17 years in prison, followed by 15 years of supervised release. He pleaded guilty on April 15, 2019.
• David Minnichelli, aka “Davis,” 30 of Califon, New Jersey, was sentenced on July 28, 2020, to 15 years in prison, followed by lifetime supervised release. He pleaded guilty on Oct. 22, 2019.
• Marqueal Bonds, aka “The Goat,” 22, of Chicago, Illinois, was sentenced on Aug. 18, 2020, to 22 years in prison, followed by lifetime supervised release. He pleaded guilty on March 5, 2020.
• Timothy Friel, aka “JJChuck,” 40 of Penndel, Pennsylvania, was sentenced on March 19, 2020, to 12 years in prison, followed by 15 years supervised release. He pleaded guilty on Aug. 24, 2018.

U.S. District Judge Benjamin H. Settle for the Western District of Washington imposed the following sentence:

• Cory Crosby, aka “The 191,” 39, of Tacoma, Washington, was sentenced on April 1, 2019, to 25 years in prison, followed by lifetime supervised release. He pleaded guilty on July 18, 2018.

“The defendants collaborated in a sophisticated conspiracy to deceive, manipulate, and extort hundreds of unsuspecting and vulnerable children, tricking them into creating sexually explicit content by posing as their peers on live-streaming video chat applications,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “These significant sentences reflect the Department’s commitment to uncovering such nefarious schemes and protecting our most innocent from exploitation by online predators.”

“Jarret Lea and his co-conspirators caused irreparable harm to over 170 identified child victims,” said U.S. Attorney William McSwain for the Eastern District of Pennsylvania.  “These men shrouded their true identities in the anonymity of the internet and presented themselves as their victims’ peers in order to gain these children’s trust and exploit them sexually.  The lengthy sentences handed out for this despicable behavior will not restore the innocence lost, but they do send a strong message that my office will find and prosecute child predators, no matter where they lurk.”

“In order to ensure themselves a steady supply of new child pornography, these predators conspired to befriend, manipulate, and sexually exploit scores of minors online,” said Special Agent in Charge Michael J. Driscoll of the FBI’s Philadelphia Division.  “The defendants thought they could hide behind fake names and handles and continue their violations with impunity.  The FBI is proud to have fully unmasked them, shut them down, and brought them to justice.”

According to court documents, between November 2016 and July 2018, these defendants, and other co-conspirators outside of the United States, utilized chatrooms on the online service “Discord” – an application designed for online gaming communities that allows users to engage in text chat and share images and videos – to produce and exchange child pornography.  These chatrooms were accessed by invitation only.  Those who gained access to the chatrooms actively worked together to identify social media platforms and profiles of minor females, including girls as young as 10 years old, and strategized regarding how to convince the children to engage in sexually explicit activity via live web camera.  The group targeted live-streaming video chat applications such as Live.Me, Periscope, YouNow, Kik, Musically and Snapchat to target and entice the minors to engage in sexually explicit conduct.

While pretending to be minor boys and girls, the defendants streamed pre-recorded videos of other underage minors engaging in similar conduct to the targeted victims in an effort to get the minors to believe they were watching a live video of someone their own age.  The victims were unaware that they were communicating with adult men who were recording their sexually explicit activity.  After successfully recording a victim, the defendants shared the sexually explicit videos with each other by uploading the files to file-storage sites and placing a link to download the file on a section of their members-only chatroom.  To date, 172 minor victims have been positively identified.

Four of the co-conspirators each pleaded guilty to one count of engaging in a child exploitation enterprise and one count of advertising child pornography.  Three of the co-conspirators pleaded guilty to one count of advertising child pornography.  Two of the co-conspirators pleaded guilty to one count of engaging in a child exploitation enterprise. Additionally, Cory Crosby, who was prosecuted in the Western District of Washington pleaded guilty to one count of engaging in a child exploitation enterprise, one count of producing child pornography and one count of possession of child pornography.

Trial Attorneys Kaylynn Foulon and Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Assistant U.S. Attorney Kevin Jayne and former Assistant U.S. Attorney Seth Schlessinger of the Eastern District of Pennsylvania, and Assistant U.S. Attorney Matthew Hampton of the Western District of Washington prosecuted the cases. The FBI Philadelphia and Tacoma Field Offices and investigated the case with assistance from Operation Rescue Me, the Digital Analysis and Research Center (DARC) Lab and CEOS’s High Technology Investigative Unit.

This case is brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and 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 http://www.justice.gov/psc.

PHILADELPHIA – United States Attorney William M. McSwain announced that Jarret Lea, 27, of Charlotte, North Carolina, was sentenced to 17 years in prison and 15 years of supervised release by Senior United States District Court Judge Harvey Bartle, III, for engaging in a conspiracy to advertise child pornography online. Lea was also ordered to pay a total of $33,221.45 in restitution to various victims. In April 2019, Lea pleaded guilty to one count of conspiracy to advertise child pornography.

Using Discord, an online communications application that allows users to share files and communicate via chat messages, Lea and his co-conspirators connected in private chat rooms to share child pornography and discuss how to exploit children to produce more child pornography. Using what they had learned in the chatroom, some of these men then entered legitimate live streaming websites and “groomed” children they found there into producing child pornography by performing sexual acts while being video recorded.

Judge Bartle has already imposed sentences in the following other related cases:

1. Andrew Dowdle, 48, of Oswego, New York, was sentenced to 16 years in prison, followed by 15 years of supervised release. He pleaded guilty in April 2019.
2. Carl Masters, 45, of Lawrence, Kansas, was sentenced to 27 years in prison, followed by lifetime supervised release. He pleaded guilty in April 2019.
3. Ric Crossfield, 25, of Jamaica, New York, was sentenced to 14 years in prison, followed by 40 years of supervised release. He pleaded guilty in April 2019.
4. Christian Brennan, 46, of Puyallup, Washington, was sentenced to 20 years in prison, followed by 10 years of supervised release. He pleaded guilty in April 2019.
5. Sharif El-Battouty, 39, of Woodside, New York, was sentenced to 30 years in prison, followed by lifetime supervised release. He was found guilty at trial in May 2019.
6. Timothy Friel, 40 of Penndel, Pennsylvania, was sentenced to 12 years in prison, followed by 15 years of supervised release. He pleaded guilty in August 2019.
7. David Minnichelli, 30 of Califon, New Jersey, was sentenced to 15 years in prison, followed by lifetime supervised release. He pleaded guilty in October 2019.
8. Marqueal Bonds, 22, of Chicago, Illinois, was sentenced to 22 years in prison, followed by lifetime supervised release. He pleaded guilty in March 2019.

“Jarret Lea and his co-conspirators caused irreparable harm to over 170 identified child victims,” said U.S. Attorney William McSwain. “These men shrouded their true identities in the anonymity of the internet and presented themselves as their victims’ peers in order to gain these children’s trust and exploit them sexually. The lengthy sentences handed out for this despicable behavior will not restore the innocence lost, but they do send a strong message that my Office will find and prosecute child predators, no matter where they lurk.”

“In order to ensure themselves a steady supply of new child pornography, Jarett Lea and these other predators conspired to befriend, manipulate, and sexually exploit scores of minors online,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “The defendants thought they could hide behind fake names and handles and continue their violations with impunity. The FBI is proud to have fully unmasked them, shut them down, and brought them to justice.”

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

The case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant U. S. Attorneys Kevin Jayne (EDPA) and Seth Schlessinger (EDVA), and Trial Attorneys Kaylynn Foulon and Lauren Britsch, of the U.S. Department of Justice’s Child Exploitation and Obscenity Section.

PHILADELPHIA – United States Attorney William M. McSwain announced that three individuals have been charged in the Eastern District of Pennsylvania in connection with a nationwide health care fraud takedown that charged 345 defendants across 51 federal districts, including more than 100 doctors, nurses and other licensed medical professionals. These defendants have been charged with submitting more than $6 billion in alleged fraudulent claims to federal health care programs and private insurers, connected to topics such as telemedicine, substance abuse treatment facilities, and illegal opioid distribution schemes. This is the largest health care fraud and opioid enforcement action in U.S. Department of Justice history.

The case charged in the Eastern District of Pennsylvania is summarized below:

Steven J. Valentino, 63, of Haverford, PA, Michele Miller, 51, of Swarthmore, PA, and Leah Afolabi, 46, of Missouri City, TX, a doctor, office manager and pharmacy owner, respectively, were charged with conspiracy to pay and receive health care kickbacks, and paying and receiving kickbacks. The charges stem from a multi-year scheme involving injured federal workers and Medicare beneficiaries wherein kickbacks were paid to induce the prescribing of medications that were filled by a Houston-based pharmacy. Specifically, Afolabi paid kickbacks to Valentino and Miller for the referral of prescriptions for medications written by Valentino to Department of Labor-Office Workers’ Compensation Program (DOL-OWCP) claimants and Medicare beneficiaries. DOL-OWCP and Medicare were billed approximately $2.5 million and paid out approximately $1.1 million during the course of this scheme.

“Doctors and medical professionals are supposed to put their patients’ needs first. When they don’t, and instead try to rip off the system, my Office will take forceful action in order to punish and deter wrongdoers,” said U.S. Attorney McSwain. “Moreover, these prosecutions safeguard federal tax dollars and therefore benefit all American taxpayers. We will continue to do all in our power to stop fraud, waste, and abuse within our federal health care programs.”

“Investigating alleged health care fraud offenses against U.S. Department of Labor programs is an important mission of the Office of Inspector General. We will continue to work diligently with our law enforcement partners to hold accountable those who seek to defraud DOL programs and siphon taxpayer funds for personal gain,” said Derek Pickle, Acting Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.

 “The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate,” stated U.S. Postal Service Office of Inspector General Special Agent in Charge Kenneth Cleevely, Eastern Area Field Office. “However, when medical providers, pharmacies, and other organizations choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact our special agents at www.uspsoig.govor 888-USPS-OIG.”

“Today’s arrests demonstrate our commitment to pursuing medical professionals who selfishly place their desire for profits above patients’ health care needs,” said Maureen Dixon, Special Agent in Charge, Office of the Inspector General U.S. Department of Health and Human Services. “We will continue to focus our efforts on fighting fraud, waste and abuse in vital federal health care programs and protecting their beneficiaries. To report Medicare or Medicaid fraud, please contact our hotline at 1-800-HHS-TIPS (1-800-447-8477).”

Today’s enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section, in conjunction with its Medicare Fraud Strike Force, as well as the U.S. Attorney’s Office for the Eastern District of Pennsylvania and 50 other U.S. Attorney’s Offices across the country.

The EDPA case was investigated by the Department of Labor Office of Inspector General, United States Postal Service Office of Inspector General and Department of Health and Human Services Office of Inspector General. It is being prosecuted by DOJ Trial Attorney Debra Jaroslawicz.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA –United States Attorney William M. McSwain announced that Steven Mack, 31, of Philadelphia, PA was convicted today at trial of possession of a firearm and ammunition by a convicted felon, arising from an incident during which state parole agents caught Mack with the firearm and ammunition shortly after he was released from prison.

Mack was paroled after serving the low end of a state sentence for robbing multiple women at gunpoint and stealing their possessions. On September 9, 2019, while he was under the supervision of the Pennsylvania Parole Board, agents visited Mack at his residence and observed five different types of ammunition and a loaded revolver. The agents arrested Mack on the spot.

“The crime of being a felon in possession of a firearm is a very serious offense – particularly in a city like Philadelphia, where gun violence is running rampant,” said U.S. Attorney McSwain. “Mack has repeatedly demonstrated his disrespect for the law and the conditions for his parole. The answer to Philadelphia’s violent crime crisis is to get recidivists like Mack off of the streets and have them serve an appropriate sentence, which is exactly what will happen now that he has been convicted in the federal system in which there is no opportunity for parole.”

“The outcome of this prosecution is sending a positive message to the community on ATF’s commitment to keeping the public safe from firearms violence,” said John Schmidt, acting Special Agent in Charge of ATF’s Philadelphia Field Division. “ATF is determined to continue our collaborative efforts with our law enforcement partners in our plight to ensure Philadelphia neighborhoods can be free of violence.” 

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Philadelphia Police Department, and the Pennsylvania Parole Board, and is being prosecuted by Assistant United States Attorneys Sara A. Solow and Derek E. Hines.

PHILADELPHIA – United States Attorney William M. McSwain announced that the internet sports betting company, 5D Holdings Ltd. (operating under the unincorporated brand name, “5Dimes”) and Laura Varela, have agreed to forfeit more than $46.8 million in gambling proceeds as part of a settlement agreement in a criminal investigation into 5Dimes’ sports betting operation based in Costa Rica that allowed American gamblers to place bets, primarily through its website www.5Dimes.eu, in violation of U.S. law. Beginning in at least 2011, 5Dimes accepted wagers from and made payouts to U.S. bettors, and transferred more than $46.8 million in proceeds earned from its illegal gambling activities in such a manner as to attempt to hide the nature, location, source, and control of the funds.

5Dimes was previously owned and operated by Varela’s husband, William Sean Creighton, a U.S. citizen who moved to Costa Rica, where he created and operated 5Dimes in violation of U.S. law. From at least 2011 until approximately September 24, 2018, Creighton exercised full and exclusive control over 5Dimes, although he hid his control over the company by utilizing an alias and operating the business through several shell companies. In September 2018, Creighton was kidnapped and subsequently murdered. Over a year later, Creighton’s remains were discovered and positively identified in Costa Rica; Creighton’s death has been ruled a homicide by Costa Rican authorities.   

Beginning in approximately May 2016, the United States Attorney’s Office for the Eastern District of Pennsylvania, in conjunction with the Department of Homeland Security Investigations (“HSI”), began investigating Creighton and 5Dimes for possible violations of federal criminal laws including, but not limited to, illegal gambling, money laundering, wire fraud, and other related offenses. During Creighton’s lifetime, Varela, a Costa Rican citizen, was never employed as a manager at 5Dimes, nor did she exercise any control over the operations of 5Dimes. Following Creighton’s death, Varela assumed responsibility for 5Dimes assets, but did not exercise day-to-day authority over the operations of 5Dimes. Varela subsequently took control of 5Dimes and sought to resolve the federal investigation and change the operations of the company in a manner that complies with U.S. law. In order to resolve the federal investigation of 5Dimes (which continued after Creighton’s kidnapping), Varela and 5Dimes have entered into a settlement agreement with the EDPA in which they have agreed to forfeit more than $46.8 million and acknowledged that those funds are the proceeds of various unlawful gambling-related offenses.

Creighton’s operation of 5Dimes in violation of U.S. law involved the use of third-party payment processors (or “TPPPs”) to accept payments from the U.S.-based bettors. These TPPPs processed credit card transactions for 5Dimes, and charged the customers’ credit cards on behalf of 5Dimes, thereby concealing the true nature of the charges from the credit card companies that otherwise would not have processed the payments had 5Dimes attempted to process the charges directly. Once the TPPPs received the betting funds from the U.S. customers’ credit cards, the funds were transferred to bank accounts in the names of shell companies controlled and operated by Creighton until his disappearance and death. Creighton also laundered 5Dimes’ unlawful gambling proceeds in various additional ways, including through bulk cash transportation and the purchase of gold bars, gold coins, and expensive collectible sports cards.

During the investigation, HSI seized approximately $3,376,189 in cash and other assets belonging to Creighton, including a 1948 George Mikan rookie basketball card, which Creighton purchased for over $400,000 (which at the time was the most expensive basketball card ever sold, and which now resides at the Smithsonian Institute), and a 1970 Pete Maravich rookie basketball card, as well as over $715,000 worth of rare coins. As part of the settlement agreement, 5Dimes and Varela have agreed to forfeit these seized assets, and have agreed to help in the collection and forfeiture of additional assets totaling more than $26,000,000. Further, 5Dimes and Varela have agreed to forfeit approximately $2,000,000 that was seized in Costa Rica by Costa Rican law enforcement, and to pay and consent to the forfeiture of an additional $15,000,000 of the proceeds of the criminal conduct.

All told, pursuant to the terms of the settlement agreement, 5Dimes and Varela have agreed to forfeit a total of $46,817,880.60, which they agree constitutes proceeds that are traceable to transactions in violation of Title 18, United States Code, Sections 1343 (wire fraud), 1084 (illegal transmission of gambling information), 371 (conspiracy to commit wire fraud), and were involved in transactions in violation of Title 18, United States Code, Section 1956 (money laundering). Varela has fully cooperated with the investigation and has worked with EDPA to identify criminal assets associated with 5Dimes, has overseen the implementation of compliance procedures, and has reorganized the corporate structure of the company into a streamlined, transparent corporate structure, and caused 5Dimes to cease violating U.S. law.

Pursuant to the terms of the settlement agreement, the United States Attorney’s Office for the Eastern District of Pennsylvania has agreed to not criminally prosecute 5Dimes or Varela for any crimes committed prior to September 30, 2020 (except for criminal tax violations, if any, as to which EDPA does not make any agreement), and will not file a civil action relating to the conduct described in the settlement agreement.

“The settlement agreement announced today is a victory for the United States in ceasing the illegal activity of a company that was being investigated for a multitude of crimes, including a sophisticated money laundering operation,” said U.S. Attorney McSwain. “It is also a testament to the dedication of the investigators and prosecutors who doggedly pursued this case even after the primary target was kidnapped and murdered. As the Office has done with a variety of criminal and civil matters, we will use every tool at our disposal to hold individuals and businesses accountable and ensure their compliance with federal law.”

“Through our 5Dimes investigation, Homeland Security Investigations illuminated a massive global network of criminals whose profession was to launder proceeds for drug cartels, kleptocratic regimes, illegal mining operations, and fraudsters,” said Brian A. Michael, Special Agent in Charge, HSI Philadelphia.  “Today’s announcement of the global settlement agreement and significant monetary seizures demonstrates HSI’s commitment with our partners to deny criminal organizations the financial proceeds of their illicit activities.”

“Transnational Criminal Organizations are concerned with one priority: making and hiding money. This investigation demonstrates the sophisticated efforts of the actors to secrete their ill-gotten gains, in this case, from gambling. The scheme is just as viable for laundering drug proceeds, those from weapons or human trafficking, or other illegal activities,” said Jeremiah A. Daley, Executive Director of the Liberty Mid-Atlantic High Intensity Drug Trafficking Area (HIDTA).  “We are proud to support HSI in pursuing all forms of money laundering from any source.”

The case was investigated by the Department of Homeland Security, Homeland Security Investigations with support from the Liberty Mid-Atlantic HIDTA, the Philadelphia Police Department, and the Pennsylvania State Police. The criminal investigation and settlement was handled for the Eastern District of Pennsylvania by Assistant United States Attorneys Michael S. Lowe and Maria M. Carrillo.

PHILADELPHIA – United States Attorney William M. McSwain announced that Robert McCabe, 76, of Bangor, PA, was charged by Information with multiple counts of securities fraud, mail fraud, and wire fraud in connection with an extensive fraudulent investment scheme.

According to court documents filed today, between September 2010 and July 2020, the defendant stole more than $1,000,000 from more than 50 family members and friends, including former fraternity brothers, by claiming that his company, McCabe Properties, Inc., owned close to two million shares of something he called “founders shares” of a well-known pharmaceutical company. He offered those “shares” to his victims by selling them a corresponding number of shares of McCabe Properties, Inc.

As alleged, McCabe sold this investment to his victims at a price of between $2.60 and $2.70 per share, which would have represented a significant discount over the actual share price for shares of the pharmaceutical company. In reality, however, McCabe Properties, Inc. had no assets whatsoever. The defendant spent the more than $1 million he took in from his victims, leaving them with nothing but worthless shares of McCabe Properties, Inc.

McCabe was able to deceive his victims over the span of the scheme by allegedly: (a) preparing and shipping to them shares of McCabe Properties, Inc. that purported to correspond to the number of shares of the pharmaceutical company; (b) falsely informing victim investors that their “founders shares” could only be sold once the pharmaceutical company was acquired by another company; (c) forwarding press releases, financial analysis reports, and news stories on the status of the pharmaceutical company to the victim investors; (d) falsely representing to clients that the nonexistent “founders shares” owned by McCabe Properties, Inc. had been purchased from a private venture capital firm that had ties to a known securities fraudster, making selling the “founders shares” problematic; and (e) communicating with clients by email and telephone and providing them with false reasons for an inability to sell the “founders shares.”

“As alleged, McCabe is a fraudster who promised something that he had no intention of delivering,” said U.S. Attorney McSwain. “Here, according to the Information, he exploited personal relationships with trusting members of his own family and circle of friends, repeatedly lying about the investment he sold to them. This type of financial fraud has devastating consequences for the victims and must be aggressively prosecuted and deterred at every turn.”

McCabe faces a maximum sentence of 420 years in prison, a three-year period of supervised release, a $10,000,000 fine, and a $2,100 special assessment.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – United States Attorney William M. McSwain announced that Ricardo Richardson, 50, of Buford, GA; John Scott Watkins, 54, of Canton, GA; Gary B. Wolff, 78, an attorney from New York, NY; and Edward Heil, 71, an accountant from Pearland, TX; were arrested and charged by Indictment with conspiracy, wire fraud, and securities fraud in connection with what is commonly referred to as a ”pump and dump” scheme.

The Indictment alleges that the defendants and others sought to generate illegal proceeds by manipulating the stock of three public companies:  AI Document Services, Inc. (ticker symbol AIDC), Creative Edge Nutrition, Inc. (ticker symbol FITX), and Interactive Health Network (ticker symbol IGRW). This manipulative activity was designed to make it falsely appear that trading in those stocks was the result of free and fair market forces, and to conceal the activity from the U.S. Securities and Exchange Commission (the “SEC”).

The Indictment further alleges that, among other things, the defendants planned and took various fraudulent actions, including disguising their share ownership in these companies, paying large bribes to stockbrokers for prearranged purchases of AIDC, FITX, and IGRW stock on behalf of the brokers’ unknowing customers, hiring promoters to distribute misleading email newsletters regarding these companies to numerous potential investors throughout the United States, and causing the public companies to issue nationwide press releases to conceal the manipulative activity. The schemers intended to generate at least $15 million in proceeds from this scheme, which was implemented from mid-2014 through approximately February 2016, when the SEC suspended trading in these stocks.

Court documents also reveal that the defendants and their co-schemers had worked together on previous stock deals, and each performed different roles in the scheme. Watkins himself explained that he was on the stock side of the deals, and Richardson much of the negotiating. Wolff and Heil, in turn, supplied the public companies that the schemers used in the manipulations and assisted with some of the paperwork. As alleged, all of the defendants owned or controlled a substantial number of shares of AIDC, FITX, and IGRW stock and were prepared to sell them at a large profit into the manipulated markets to unsuspecting investors.

“Pump and dump stock schemes have real victims: those who play by the rules and save and invest in the markets,” said U.S. Attorney McSwain. “Market manipulation also causes generalized harm to the markets and to our economy because it erodes public trust that the markets are free and fair. Thanks to the excellent work of the FBI, SEC, and prosecutors from my Office, these four defendants will now face the consequences of their alleged actions.”

“The defendants allegedly employed fraud and misinformation in an attempt to boost these companies’ stocks,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Their ‘business model’ was nothing but a classic pump and dump scheme from which they sought to handsomely profit. The FBI will continue to investigate and shut down such illegal activity, to protect both the public and the integrity of our financial markets.”

If convicted, the defendants each face a maximum possible sentence of 65 years in prison, 3 years of supervised release, a $10,500,000 fine, and a $400 special assessment.

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Judy Smith and Patrick J. Murray. The U.S. Attorney’s Office also acknowledges the substantial assistance provided by the U.S. Securities and Exchange Commission, Philadelphia Regional Office in this investigation.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – United States Attorney William M. McSwain announced that Christian Dunbar, 40, of Philadelphia, PA, the current Philadelphia City Treasurer, was arrested this morning and charged by Criminal Complaint with embezzlement by a bank employee, conspiracy to commit marriage fraud, and fraudulent procurement of citizenship. U.S. Attorney McSwain detailed the charges at a press conference this afternoon in front of the James A. Byrne U.S. Courthouse in Philadelphia.

As the Philadelphia City Treasurer, Dunbar’s responsibilities include: (1) managing the City’s debt obligations, which includes overseeing the issuance of the City’s municipal bonds; (2) managing the City’s bank accounts, including its operating account, capital account, and petty cash accounts in various departments; (3) paying the City’s bills, including making payments to vendors, cutting payroll checks, and making payments to pension plans; and (4) managing the City’s cash reserves.

According to the Criminal Complaint, Dunbar allegedly participated in two schemes – (1) bank embezzlement and (2) marriage fraud in order to become a U.S. citizen.

The details of the alleged bank embezzlement scheme are as follows: Just weeks before his appointment to serve as the City’s Deputy Treasurer, Dunbar, while employed at Wells Fargo Bank in Newtown Square, stole $15,000 from two different bank customers. The Complaint alleges that on two separate occasions, once in December 2015 and again in January 2016, Victim #1 met with the defendant to transfer $5,000 between Victim #1’s Wells Fargo bank accounts. During both meetings, Dunbar allegedly directed Victim #1 to sign several documents, including a blank withdrawal slip. He later allegedly used the blank slips to withdraw cash from Victim #1’s account and deposit those funds into his own personal bank account.

The defendant allegedly used the same trick with Victim #2. In December 2015, Dunbar assisted Victim #2 in the same Wells Fargo branch and directed Victim #2 to sign several documents, including a blank withdrawal slip. As alleged in the Criminal Complaint, he later used the blank withdrawal slip to withdraw money from Victim #2’s account. Soon thereafter, Dunbar allegedly made significant cash deposits into his personal bank account.

Dunbar also allegedly participated in a conspiracy to enter into a sham marriage in order to secure immigration benefits, and ultimately U.S. citizenship, for himself and his family. The details of that alleged fraud are as follows: The Criminal Complaint alleges that the defendant and his current wife, identified in the Complaint by the initials “F.N.D.,” both entered into fraudulent marriages, Dunbar with Person #1 and his wife with Person #2. Prior to these sham marriages, Persons #1 and #2 were U.S. citizens, but Dunbar and F.N.D. were not – having been born in Liberia and Senegal, respectively. By marrying U.S. citizens, Dunbar and F.N.D. were able to gain their own U.S. citizenship.

These four individuals – Christian Dunbar, F.N.D., and Persons #1 and #2 – attended Temple University together and allegedly coordinated this sham marriage plan. Both of these sham marriages occurred within days of each other in December 2006 and were performed by the same officiant — a former Temple University professor. But since the time they attended Temple University together, Dunbar and F.N.D. were the only legitimate couple, marrying each other in Senegal in June 2013 (while Dunbar was still legally married to Person #1). On their child’s 2014 birth records, Dunbar is listed as the father, F.N.D. is listed as the mother, and they are listed as married to each other.

But in February 2012, relying on his sham marriage to Person #1, the defendant allegedly applied to become a permanent resident of the United States (which he certified as true under the penalty of perjury), was granted that status in October 2012, and then submitted additional paperwork to become a naturalized citizen in late 2015 and early 2016. As detailed in the Complaint, in paperwork he submitted in 2015 and in subsequent interviews, he continued to make fraudulent claims about his marital status, which was the basis for his becoming a naturalized citizen in January 2016. Two months later, he filed paperwork to divorce Person #1.

“The alleged conduct in this case shows a pattern of deception, dishonesty and criminality that no individual should ever engage in – but is especially alarming and intolerable for a high ranking City official,” said U.S. Attorney McSwain. “City officials whose job is to handle money should not be thieves. And they should not have a track record of engaging in elaborate immigration fraud against the public that they are supposed to serve. My Office will continue to hold public officials to the high standard of conduct that residents of this City deserve. And when we find that a public official’s behavior falls short, we will hold them accountable.”

“The accusations against Christian Dunbar run quite the criminal gamut, from stealing his own bank customers’ money to violating the immigration laws that help protect our national security,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “In his role as City Treasurer, Dunbar holds a position of public trust, making these charges lodged against him today extremely disturbing. The FBI is working every day to battle public corruption and the corrosive damage it does to people’s faith in government. We must hold public officials to high ethical standards — and we will hold them to obeying federal law.”

If convicted, Dunbar faces a maximum possible sentence of 45 years’ imprisonment and a fine of $1.5 million.

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Denise S. Wolf.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams and Acting Assistant Attorney General Jeffrey Bossert Clark announced that Linde GmbH and its U.S. subsidiary Linde Engineering North America LLC (LENA) (together, “Linde”) have agreed to pay the United States more than $22.2 million to resolve allegations that Linde violated the False Claims Act by knowingly making false statements on customs declarations to avoid paying duties owed on the companies’ imports.

Linde GmbH is a multinational corporation headquartered in Germany that, among other things, imports materials into the United States for use in the construction of natural gas and chemical plants. LENA, based in Houston, conducted portions of Linde’s United States business and managed procurement and logistics for Linde. Between 2011 and 2017, Linde imported more than $500 million in goods into the United States.

To enter goods into the United States, an importer must declare, among other things, the country of origin of the goods, the value of the goods, whether the goods are covered by antidumping or countervailing duties, and the amount of duties owed. U.S. Customs and Border Protection (CBP) relies on these representations to determine the correct amount of any duties owed. It is the importer’s affirmative duty to use “reasonable care” to make sure that such information is accurate so that CBP can assess the proper duties.

The United States alleged that, between 2011 and 2017, Linde avoided duties owed to the United States, including in some instances antidumping and countervailing duties, by misrepresenting the nature, classification, and valuation of imported merchandise, as well as the applicability of free trade agreements.

“Trade policy is a critical part of our nation’s foreign policy,” said First Assistant U.S. Attorney Jennifer Arbittier Williams. “Anti-dumping and countervailing duties ensure that American manufacturers are protected from unfair trade practices, and valuation requirements help to ensure that importers do not have an incentive to use foreign engineers to design or inspect the equipment instead of hiring in the United States.”

“This settlement reflects our commitment to hold accountable those who evade duties owed on imported goods, including antidumping and countervailing duties that level the playing field for U.S. manufacturers,” said Acting Assistant Attorney General Jeffrey Bossert Clark for the Department of Justice’s Civil Division. “The Department of Justice will zealously pursue those who seek an unfair advantage in U.S. markets by bringing underpriced goods into this country.”  

“CBP is proud to work with the Department of Justice to enforce our trade laws. Collecting revenue on behalf of the American people is something we take very seriously,” said Brenda Smith, Executive Assistant Commissioner, CBP Office of Trade. “We are glad to have come to an equitable and productive solution.” 

Prior to the United States’ disclosure to Linde of its investigation, Linde initiated a voluntary disclosure to CBP regarding its importing practices. Since that time, Linde has cooperated with the investigation and worked to overhaul and improve its customs compliance program.

First Assistant U.S. Attorney Williams praised Linde’s work in addressing the issues in these programs: “We commend Linde for coming forward with these issues and working to ensure both that the government is made whole and that these issues will not recur. We hope this settlement will serve as a message to other importers to ensure that they have compliance processes in place that can detect problems before they grow. Importers have an obligation to scrutinize their practices and promptly report issues if they discover that they have not lived up to their obligations.” 

The settlement with Linde resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Pennsylvania and is captioned United States ex rel. Johnson v. Linde AG, et al., No. 17-cv-1012. As part of today’s resolution, Ms. Johnson will receive approximately $3.7 million. The qui tam complaint was filed by Stephen Hasegawa of Phillips & Cohen in San Francisco.

“We thank the relator and relator’s counsel for their contributions to this case. Without information from citizens like the relator, detecting fraud and conserving government program funds would be much more difficult,” said First Assistant U.S. Attorney Williams.

The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Commercial Litigation Branch of the Justice Department’s Civil Division, with assistance from CBP’s Office of Chief Counsel and CBP’s Regulatory Audit and Agency Advisory Services. Assistant United States Attorneys Paul W. Kaufman and Landon Y. Jones III of the Eastern District of Pennsylvania and trial attorney Jennifer Chorpening of the Civil Frauds section of the Department of Justice handled the investigation and settlement.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Michael Salerno, 51, of Mount Laurel, NJ, was arrested and charged by Indictment with twenty-three counts of wire fraud and six counts of mail fraud in connection with multiple, elaborate fraud schemes.

According to the Indictment, between September 2016 and at least November 2018, the defendant operated a series of businesses, including Black Diamond Forex, L.P., BDF Trading, L.P., Advanta Capital Markets, Inc., and Advanta FX, each of which purported to be in the business of trading foreign currencies. Using a variety of misrepresentations and omissions, Salerno induced victims to pay advance fees—up-front payments of typically more than $1,000—in order to be hired by Salerno’s company. He told the victims that, upon being hired, he would make available to them a pool of $10 million which they could trade on the foreign currency market, and take a generous cut of any profits. Each of these representations was completely false.

To make his fraudulent activities appear legitimate, Salerno held himself out as a sophisticated and successful businessman. According to the Indictment, the defendant claimed to have managed a real estate empire, a portion of which he claimed to have recently sold for $10 million to fund the currency-trading venture. He also claimed that he had been a profitable currency trader. None of this was true, either. In fact, he declared bankruptcy twice, most recently in 2015, and had been evicted multiple times from rental homes for failure to pay rent. In 2005, he pleaded guilty to federal tax charges and was sentenced to 21 months in prison. He failed to disclose any of this to the aforementioned victims before taking their money. Instead, Salerno allegedly collected more than $300,000 in advance fees and used the money for his own benefit.

The defendant’s currency-trading scheme came to a halt when this Office opened a criminal investigation and the Commodity Futures Trading Commission sought and obtained an injunction against Salerno and his businesses in 2018. However, Salerno allegedly turned immediately to a second scheme. Also according to the Indictment, between May 2018 and least December 2019, Salerno operated a company called AccuOne Financial, Inc. AccuOne purported to be in the business of assisting clients in ridding themselves of unwanted automobile leases. It also purported to offer a different set of clients, whose personal credit precluded them from obtaining an automobile lease, access to automobile leases, low interest vehicle loans, and credit repair services. But Salerno failed to do as promised, instead ripping off both sets of clients. According to the Indictment, the defendant took the unwanted vehicles from the first set of clients, made few - if any - of the required lease payments, and then gave the vehicles to the second set of clients who could not obtain their own leases, in exchange for substantial monthly fees. The predictable result of this house of cards-style scheme was that the clients who wanted to get out of their leases either continued to make monthly lease payments for cars they no longer had, or suffered substantial damage to their credit. And the clients who leased cars from AccuOne often had them repossessed without warning. As for Salerno, he netted several hundred thousand dollars from this scheme alone.

“When Salerno’s foreign currency trading scheme came crashing down around him, he very quickly moved on to an alternative way of swindling people out of their money with car leases and loans,” said First Assistant U.S. Attorney Williams. “The damage done by such corrupt financial schemes can be catastrophic to innocent people’s credit and financial security. We will continue to hold those who commit crimes like the ones alleged here accountable for their misdeeds.”

If convicted, the defendant faces a maximum possible sentence of 580 years in prison, three years supervised release, a fine of $7,250,000 and full restitution.

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Christopher J. Mannion

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Chip Hackley, 49, of Hermosa Beach, CA, and George Matin, 51, of Los Angeles, CA, were each sentenced to 15 months in prison, to be followed by two years of supervised release, by United States District Court Judge Paul S. Diamond for conspiracy, wire fraud, and securities fraud. Previously, on September 16, 2020, Judge Diamond sentenced their co-conspirator, Harold Minsky, 81, of Northridge, CA, to one year and one day in prison, to be followed by the same term of supervised release.

Minsky, Matin, and Hackley conspired to manipulate the stock price and trading volume of public companies. As part of this conspiracy, Minsky and Matin attempted to manipulate the stock of two public companies:  WGE Holdings Corp. (ticker symbol WGE), a gold mining business, and Holy Grail (ticker symbol HGRL), which produced and sold hemp and Cannabidiol (“CBD”) products. Hackley joined the scheme later, participating only in the manipulation of HGRL.

The conspirators planned to manipulate the stock of these companies by establishing control over both their restricted and free trading shares and coordinating the issuance of press releases with the stock promotions in order to give the false impression of market interest in the stock. As part of this conspiracy, they also agreed to engage in prearranged stock trades and to bribe purchasers to buy the stock.

In attempting to manipulate the stock of both WGE and HGRL, Minsky and Matin intended to generate approximately $9 million in illegal proceeds for themselves and their co-conspirators, and to cause corresponding losses to the conspiracy’s victims. With respect to HGRL, Hackley intended to generate approximately $4 million in illegal proceeds.

Minsky, Matin, and Hackley were charged by separate Informations, each charging conspiracy, wire fraud, and securities fraud. Minsky pleaded guilty on May 2, 2019, Hackley on May 15, 2019, and Matin on October 10, 2019.

“Innocent individuals who try to legitimately invest and save money for the future are the ones who lose big when greedy fraudsters like Minsky, Matin and Hackley manipulate the markets with pump and dump stock schemes,” said First Assistant U.S. Attorney Williams. “Market manipulation also causes our economy to take a hit because the public cannot trust that the markets are free and fair. Thanks to the excellent work of the FBI, SEC, and prosecutors from this Office, these defendants’ days of profiting off of others’ misfortune are over.”

The case is being investigated by the Federal Bureau of Investigation, with the assistance of the Securities and Exchange Commission. It is being prosecuted by Assistant United States Attorney Patrick J. Murray.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Jason Muzzicato, 43, of Bangor, PA, was sentenced to five years in prison and three years of supervised release by United States District Court Judge Joseph F. Leeson, Jr., for unlawfully possessing firearms and explosives, and using an unregistered drone aircraft to drop explosive devices in order to terrorize his victim, a former girlfriend, in and around Bangor, Northampton County.

In December 2019, the defendant pleaded guilty to possession of a destructive device, possession of firearms by a person subject to a domestic violence protective order, and knowingly operating an unregistered aircraft. The charges stem from Muzzicato’s possession of homemade bombs and firearms while subject to the terms of a Protection from Abuse (“PFA”) order issued by the Northampton County Court of Common Pleas on behalf of Muzzicato’s former girlfriend, and from his unlawful operation of an unmanned aerial vehicle (drone). Muzzicato was found to be in possession of a DJI, Model Phantom 3, unmanned aerial vehicle, seven improvised explosive devices and ten firearms, including multiple AR-15 rifles and semi-automatic pistols. Under federal law, an individual who is subject to a PFA order is prohibited from possessing these firearms.  

“With this combination of homemade bombs, guns and a drone, this defendant terrorized an entire community,” said First Assistant U.S. Attorney Williams. “His blatant disregard for court orders, the law and others’ personal safety made him a true threat, and we are grateful to our law enforcement partners that Muzzicato was identified and arrested before anyone was physically hurt. Our Office will continue to work with our partners to ensure the security of our communities is not threatened by people who hide behind a remote control.”

The case was investigated by the Federal Bureau of Investigation, Allentown Resident Agency; the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Allentown Field Office; the Department of Transportation, Office of Inspector General, Fort Washington Field Office; the Washington Township Police Department; the Pennsylvania State Police; and the City of Bethlehem Fire Department, and is being prosecuted by Assistant United States Attorney Kishan Nair.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Miguel Gonzalez Segovia, 31, of Veracruz, Mexico, was sentenced to ten years in prison, five years of supervised release by United States District Court Judge Joseph F. Leeson Jr. for trafficking drugs in the Lehigh Valley in November 2018.

In September 2019, Gonzalez Segovia pleaded guilty to the charge of possession with intent to distribute 69 kilograms cocaine, 14 kilograms of fentanyl, and 4 kilograms of acetyl fentanyl (a fentanyl analogue). According to court documents, the defendant was stopped by a Pennsylvania State Trooper while driving on Interstate 78 in Northampton County, and was evasive in answering questions and provided conflicting information about his destination and purpose for traveling through Northeastern Pennsylvania. The Trooper also observed nine large suitcases stacked inside the rented vehicle the defendant was driving.

After searching the vehicle and one of the suitcases to reveal approximately 50 pounds of substances including cocaine, fentanyl and acetyl fentanyl, Gonzalez Segovia was placed under arrest and interviewed by Pennsylvania State Police. He admitted that this was the fourth time he had driven the same drug delivery route across Pennsylvania for individuals in California, and explained that they would load drugs between furniture in moving trucks in California and drive it to the East Coast for delivery in different locations in New York, New Jersey, Pennsylvania and Maryland.

“Gonzalez Segovia and other members of this drug organization moved huge quantities of dangerous drugs through and into our community,” said First Assistant U.S. Attorney Williams. “These traffickers essentially delivered destruction to every state, city and town where these deadly drugs ultimately landed. Our office is determined to investigate and convict these criminals, and put them behind bars.”

“Segovia pleaded guilty and was responsible for trafficking 69 kilograms of cocaine and 18 kilograms of illicit fentanyl across the Lehigh Valley area.  These are substantial amounts of dangerous and potentially deadly illicit drugs,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division.  “Working with our partners at the Pennsylvania State Police, Segovia will no longer be able to distribute these poisons that ruin our communities and destroy countless lives.”

The case was investigated by the Drug Enforcement Administration, Allentown Resident Office and the Pennyslvania State Police. The case is being prosecuted by Assistant United States Attorney Kelly A. Lewis Fallenstein.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Thomas Harris Jr., 27, of Croydon, PA was arrested and charged by Indictment with multiple firearms trafficking offenses stemming from his scheme to sell almost 40 guns to a buyer on the island of St. Lucia. Specifically, the defendant was charged with making false statements to a federal firearm licensee, dealing in firearms without a license, delivery of firearms to a common carrier without written notice, and smuggling goods from the United States.

The Indictment alleges that Harris purchased approximately 38 firearms in 12 transactions at two Bucks County, PA, gun shops between April 20, 2019, and February 15, 2020, and provided a false address as his place of residence on the required federal forms that he completed during each transaction. It is further alleged that the defendant then illegally trafficked, and attempted to traffic, the guns to St. Lucia, a sovereign island nation in the West Indies, despite his not having a license to deal in firearms nor a license to export them as required by law. He also allegedly failed to notify the shipping company he used that his shipments contained firearms, as required by law.

One of Harris’s suspected packages to St. Lucia was intercepted by federal agents at the warehouse of a local shipping company. Inside, concealed in household items such as packages of diapers, cat litter and laundry detergent, the agents found seven Glock semiautomatic pistols, one Ruger semiautomatic pistol, two AK-47 pattern pistols, two AK-47 pattern rifles, two AR-15 lower receivers, two AR-15 upper receivers, ten high capacity Glock ammunition magazines, seven additional assorted ammunition magazines, and 815 rounds of ammunition.

Harris allegedly used the alias “Lance Brown” when he presented this package to the shipping company for shipment to St. Lucia, and he allegedly falsely told a shipping company representative that the package contained household items. After the defendant left this package with the shippers, he traveled to St. Lucia himself in March 2020. He remained there until returning to the United States on July 25, 2020, when he was arrested at an airport in New York.

“As alleged in the Indictment charging him with firearms trafficking offenses, Harris has a brazen disrespect for our laws meant to regulate and monitor the sale of weapons,” said First Assistant U.S. Attorney Williams. “After sending his most recent shipment of guns overseas he also left the country for a few months, but all that did was postpone the inevitable. If you are charged in the Eastern District of Pennsylvania with a federal offense, there is no place to hide, here or abroad. We will not rest until we find you and hold you accountable.”

“Illicit international firearms trafficking is a top priority for the Office of Export Enforcement,” said P. Lee Smith, Performing the Non-exclusive Functions and Duties of the Assistant Secretary for Export Enforcement at the Department of Commerce. “We will continue to work with our law enforcement partners to arrest and prosecute individuals who violate United States export control laws that are intended to keep the most dangerous goods out of the most dangerous hands.”  

“Preventing the illegal use and trafficking of firearms is a central focus of ATF's strategy to combat violent crime and protect our communities,” said John Schmidt, acting Special Agent in Charge of ATF’s Philadelphia Field Division. “Illegally purchased firearms often end up in the hands of violent offenders and affect communities near and far, in this instance Saint Lucia in the Caribbean. Ensuring firearms traffickers are aggressively investigated and swiftly brought to justice is a top priority for the Philadelphia Field Division -- this collaborative effort between our local, state and federal partners is a prime example of such.”

“If you want to be a firearms dealer and exporter, get the proper licenses and follow the law,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. "Guns illegally exported overseas are quite likely to end up in the wrong hands and be used to commit further criminal acts. The FBI is committed to working with our law enforcement partners to combat weapons trafficking, in the interests of public safety here and abroad.”

If convicted, the defendant faces a maximum possible sentence of 80 years in prison, three years of supervised release, a $3,750,000 fine, and a $1,500 special assessment.

The case was investigated by the U.S. Department of Commerce, Office of Export Enforcement, New York Field Office; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Joseph A. LaBar and U.S. Department of Justice National Security Division Trial Attorney Michael E. Eaton.

 An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Erick Wandique, 26, of Allentown, Pennsylvania was sentenced to three years in prison, three years of supervised release, and was ordered to pay restitution in the amount of $87,657 and forfeiture in the same amount by United States District Court Judge Edward G. Smith for his scheme to impersonate, and steal from, his stepfather.

In March 2020, the defendant pleaded guilty to eight counts of wire fraud and one count of aggravated identity theft, after being charged with a nine-count Indictment in August 2016. The charges arose from Wandique’s electronic communications with Fidelity Investments in which he pretended to be his stepfather, Luis Flores, in order to authorize fraudulent bank transactions and debit purchases, resulting in the depletion of nearly all of Flores’ Fidelity retirement account.

From December 2014 through March 2015, Wandique went on a spending spree utilizing his stepfather’s retirement savings: withdrawing cash, making wire transfers of funds, arranging payments through the BillPay service for the account, making debit purchases at retail stores, and even taking his friends on a trip to California. After a family member confronted him about his inexplicable newfound income and spending, the defendant fled the United States by flying to Honduras, which does not have an extradition agreement with the United States. On August 25, 2019, the defendant was arrested after he attempted to reenter the United States on a flight to New Orleans, LA.

“It’s hard to imagine victimizing your own family, but Wandique took advantage of an opportunity to do just that,” said First Assistant U.S. Attorney Williams. “Here, the defendant drained his stepfather’s lifetime of savings – money earned to support himself in retirement – and when his family and the law caught on to him, Wandique fled the country. If you are charged in the Eastern District of Pennsylvania with a federal offense, we will find you and hold you accountable for your actions.”

“Mr. Wandique’s sentencing underscores the importance of vigilance against financial fraud schemes,” said Brian A. Michael, Special Agent in Charge of Homeland Security Investigations Philadelphia. “Even after Mr. Wandique fled from prosecution, Homeland Security Investigations worked closely with Interpol and international partners to ensure he was apprehended and brought to justice. Mr. Wandique will now be held accountable for swindling his family member.”

“Today’s sentencing is the culmination of years of collaboration between the Pennsylvania State Police and its federal law enforcement partners to seek justice for the victim in this case,” said Major Jeremy Richard, director of the Pennsylvania State Police Bureau of Criminal Investigation. “Despite occurring behind the anonymity of a computer, wire fraud and identity theft are serious crimes that can quickly erase a lifetime of savings from unsuspecting victims and devastated families.”

The case was investigated by the Department of Homeland Security Investigations, Customs and Border Protection, Interpol, and the Pennsylvania State Police. The case is being prosecuted by Assistant United States Attorney Christopher Diviny.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that neurosurgeon Sagi M. Kuznits, practice director Pnina Kuznits, and Neurosurgical Care LLC (collectively, “Kuznits”), have agreed to pay $1,017,375.03 to resolve liability under the False Claims Act for the alleged improper billing of electro-acupuncture devices called Stivax and/or P-Stim and a memory-loss device called eVox.

From February 2017 through July 2018, Kuznits billed Medicare, TRICARE, and the Federal Employees Health Benefit Program for the implantation of neuro-stimulators – a surgical procedure which usually requires an operating room and which is reimbursed by federal healthcare programs – when in fact the only procedures performed had been the non-surgical application of P-Stim and Stivax by a physician assistant.  P-Stim and Stivax are applied with an adhesive and insertion of a limited number of needles, and they do not involve surgery, anesthesia, or take place in an operating room.  Federal healthcare programs do not reimburse for devices such as P-Stim or Stivax, whether they are characterized as an electro-acupuncture device or as an implantable neuro-stimulator.  Other brand names for this device include NeuroStim, ANSiStim, E-Pulse, and NSS-2 Bridge.

In addition, Kuznits billed Medicare for a physician assistant’s application of an “eVox” device. Manufactured by Evoke Neuroscience, Inc., eVox consists of a cap with electrodes that are placed on the head and connected to a laptop by wires, purporting to measure certain “biomarkers” to assist in treatment of memory loss. Kuznits submitted claims to Medicare for payment using a combination of six reimbursable codes apparently in an effort to maximize reimbursement.  The United States alleges that Medicare does not reimburse for eVox as billed, and especially not when one diagnostic test is mis-billed under multiple codes as if it were multiple different tests.   

“Dr. Kuznits, as a surgeon, should have known better.  P-Stim is clearly not surgery and should not be billed using the surgical codes improperly pushed by marketers,” said First Assistant U.S. Attorney Williams.  “Dr. Kuznits failed to do his own independent due diligence which would have shown that he could not bill federal healthcare programs for P-Stim.  Instead, he chose to take the money based on the self-serving representations of those selling the product that Medicare would pay for it.” 

Now, in addition to this settlement, Dr. Kuznits is suing those marketers.  See Neurosurgical Care, LLC v. Doc Solutions LLC, Civil Case No. 19-5751 (E.D. Pa.).  “As this settlement shows,” continued First Assistant U.S. Attorney Williams, “if a marketer pushes a healthcare scheme like P-Stim that sounds too good to be true, it likely is – and you shouldn’t do it.”   

This is the third electro-acupuncture device settlement announced in this District as part of an ongoing investigation.  In recent months, other jurisdictions including the Southern District of Texas and the Middle District of Tennessee have also taken action to hold providers accountable.  See https://www.justice.gov/usao-sdtx/pr/pain-doctor-pays-settle-allegations-deceptive-medicare-billing; https://www.justice.gov/usao-sdtx/pr/pain-doctor-pays-settle-allegations-deceptive-medicare-billing);https://www.justice.gov/usao-mdtn/pr/united-states-and-tennessee-file-suit-against-comprehensive-pain-specialists-and); https://www.tn.gov/attorneygeneral/news/2020/6/10/pr20-27.html#:~:text=Nashville%2D%20Tennessee%20Attorney%20General%20Herbert,Tennessee%20Medicaid%20False%20Claims%20Act.

“We continue to work closely with our partners at CMS’s Center for Program Integrity, the Department of Health and Human Services Office of Inspector General, other federal healthcare programs, state partners, and sister U.S. Attorney’s Offices around the country to hold accountable any other providers who inappropriately billed this device and any product distributors or marketers who may have devised or carried out such a billing scheme,” stated First Assistant U.S. Attorney Williams. 

“Every dollar saved is critical to the sustainability of our Medicare program and the needs of our beneficiaries,” said Centers for Medicare and Medicaid Services Administrator Seema Verma. “We thank our partners at the Department of Justice and Department of Health and Human Services Office of Inspector General for working hard with us to identify, investigate, and eliminate waste, fraud and abuse in our federal healthcare programs.”

“Accurately billing for services provided to Medicare beneficiaries is required of all health care providers,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of the Inspector General. “HHS-OIG, CMS’s Center for Program Integrity, and the U.S. Attorney’s Office will continue to evaluate and pursue inaccurate billings of P-Stim and similar devices.”

The settled civil claims are allegations only.  There has been no determination of civil liability.  This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General.  It was handled by Assistant U.S. Attorney Matthew E. K. Howatt, Civil Chief Gregory B. David, and Auditor Dawn Wiggins.

PHILADELPHIA – United States Attorney William M. McSwain announced that William Johnson, 34, of Philadelphia, PA was convicted today at trial of possession of a firearm by a convicted felon, arising from an incident in which Philadelphia police officers recovered a weapon that Johnson had tried to discard while attempting to evade capture.

In September 2019, Philadelphia Police Department Highway Patrol Officers responded to reports of a person with a gun at 15th Street and West Allegheny Avenue in North Philadelphia. Upon arrival, the officers observed the defendant walking with a person that matched the description in the report. When the officers got out of their car to investigate, Johnson took off in a full sprint while holding onto his waistband. He then cut through an empty lot and climbed a fence in an attempt to flee. An officer drove around to where Johnson would be expected to emerge on the other side of the lot. When Johnson climbed the fence that led away from the lot, he spotted yet another police officer. Johnson then jumped down from the fence and the officers observed him toss a firearm a few feet away. The officers then took Johnson into custody and secured the firearm.

“Everybody knows what is happening in Philadelphia today with the staggering violent crime rates, and everybody also knows the reason for it – a lack of enforcement at the local level. One of the ways that my Office is working to combat this chaos is by stepping in to aggressively prosecute cases in which convicted felons illegally possess firearms,” said U.S. Attorney McSwain. “This was not an easy case, and in fact resulted in a hung jury the first time we tried it back in January. But now justice has been done, thanks to the determination of the prosecution team and our law enforcement partners in this case, the FBI, the ATF, and the Philadelphia Police Department. This is the kind of commitment that is needed to keep our community safe.”

“The FBI is committed to working with our law enforcement partners to get guns out of the hands of convicted felons and off the streets,” said, Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “In order to reduce violent crime, we must stay vigilant and keep firearms away from those not permitted to possess them.”

The case was investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Robert Eckert.

PHILADELPHIA— United States Attorney William M. McSwain announced that Thomas J. Whalen, D.O., 65, of Berwyn, PA, has agreed to pay the United States $1,257,499.00 to resolve allegations under the False Claims Act that he submitted or caused the submission of false claims to federal health care plans for FDA-approved versions of Remicade, Orencia, Prolia/Xgeva, Synvisc/Synvisc One, and Boniva when he had, in fact, administered non-FDA-approved, foreign versions of these medications.

In addition, the civil settlement resolves admissions that Whalen knowingly and intentionally prescribed controlled substances outside the usual course of professional practice and without a legitimate medical purpose, in violation of the Controlled Substances Act. Whalen permanently surrendered his controlled substance registrations with the DEA, surrendered his medical license, and will be excluded from participation in federal programs.

Whalen owned and operated Rheumatology Consultants, P.C., doing business as Whalen Rheumatology Group, with locations in Havertown, PA, Exton, PA, and Wilmington, DE. As part of his practice, Whalen used medications administrated by injection and infusion to treat his patients. These medications, including Remicade Synvisc, Synvisc-One, Orencia, Prolia/Xgeva, and Boniva, are made of living cells and are expensive. Rather than purchase FDA-approved versions of these medicines from authorized distributors, Whalen devised a scheme to purchase much cheaper foreign, non-FDA-approved versions of these medications. Unbeknownst to his patients, Whalen injected or infused them with the non-FDA-approved medications and then billed health care programs as if he had used the approved medications and pocketed approximately $1.1 million in illicit gains.

Whalen also prescribed oxycodone to patients abusing illicit drugs. Whalen admitted to unlawful distribution of a controlled substance to two of his patients to whom he prescribed oxycodone, despite receiving multiple urine drug screening results for each that revealed the patients simultaneously abused cocaine and heroin.

In December 2019, Whalen also pleaded guilty before United States District Court Judge Timothy J. Savage to related criminal charges of one count of health care fraud, one count of importation contrary to law, and two counts of distributing and dispensing oxycodone outside the course of professional practice and not for a legitimate medical purpose. He was sentenced this week to one day incarceration, followed by 12 months home confinement, three years supervised release and a $25,000 fine.

“Whalen prioritized lining his own pockets over his patient’s safety,” said U.S. Attorney McSwain. “By duping his patients and health care programs alike, he stole more than $1.1 million. On top of that, he also unlawfully distributed oxycodone to patients he knew were using cocaine and heroin. These are egregious, inexcusable violations of the trust that was placed in him as a medical professional.”

Regarding the resolution of the civil suit allegations, U.S. Attorney McSwain also stated: “This settlement illustrates my Office’s dedication to ensuring that physicians who engage in submission of false claims and the illegal distribution of opioids and other controlled substances are held accountable with all of our civil enforcement tools, as well as our criminal tools. My Office’s Health Care Fraud Strike Force, Civil Division, and Forfeiture staff continue to aggressively investigate doctors who violate their duties, so that we can deter and punish illegal opioid prescribing and health care fraud.”

“Dr. Whalen administered non-FDA approved drugs, which placed patients’ health at risk” said Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Philadelphia Office. “Such medications are not paid for by Medicare due to the risk they may pose to patient health. HHS-OIG, along with our law enforcement partners, will continue to protect the public and root out dangerous and costly fraud schemes.”

“Dr. Whalen dispensed oxycodone, a highly addictive controlled substance medication, to individuals who he knew were already abusing cocaine and heroin. He did so without first establishing a professional doctor-patient relationship with these individuals and dispensed the oxycodone to them without any legitimate medical purpose. Instead of using his professional standing to help these individuals addicted to illicit street drugs, Dr. Whalen used his medical license to harm them in the name of making money, ” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Whalen’s crimes enabled his patients’ substance use disorder rather than treating it appropriately.”

“The opioid epidemic that continues to spread across our nation is fueled by the illegal procurement and distribution of drugs such as OxyContin,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General, OPM OIG. “Dr. Whalen’s scheme not only defrauded the federal health insurance carriers, but also put patients at grave risk through his unlawful distribution of controlled substances for no legitimate medical purpose. This guilty plea and settlement sends a clear message to those engaged in fraudulent conduct contributing to the opioid crisis that we will hold providers accountable. I applaud the hard work of our investigative staff and our law enforcement partners.”

“U.S. consumers rely on FDA oversight to ensure that the drugs they receive are safe and effective. Rogue health care professionals who obtain foreign unapproved medicines and then dispense and administer those drugs to their patients, put the health of those patients at significant risk,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to pursue and bring to justice those who choose to put the public’s health at such risk.”

The U.S. Department of Health and Human Services, Office of Inspector General; the Drug Enforcement Administration; Homeland Security Investigations; the Food and Drug Administration, Office of Criminal Investigations; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation all investigated the case. Trial Attorney Debra Jaroslawicz with the Criminal Division’s Fraud Section and Assistant United States Attorney Paul J. Koob prosecuted the criminal case. Assistant United States Attorney and Deputy Chief Charlene Keller Fullmer handled the civil case.

PHILADELPHIA – United States Attorney William M. McSwain announced that Jerry Zweitzig, 71, of Hatboro, PA, was sentenced to 200 years in prison and lifetime supervised release by United States District Court Judge Wendy Beetlestone for manufacturing and attempted manufacturing of child pornography. The charges stemmed from the defendant’s sexual abuse of an infant and a young girl under ten years of age, both of whom were in the defendant’s care at the time of the abuse. Zweitzig was a pastor at the Horsham Bible Church at the time of the abuse. He was sentenced for the charges in both cases today.

In the case involving the young girl, Zweitzig pleaded guilty to five counts of manufacturing and attempted manufacturing of child pornography and one count of possession of child pornography. The charges arose from the defendant’s sexual exploitation of the girl over a period of years, his photographing and videotaping of this sexual abuse, and his collection of more than 10,000 images of child pornography involving thousands of other children on four different hard drives found in his home. According to court documents, the collection included disturbing images of prepubescent children being raped by adult males, forced oral sex on babies and young girls by adult men and women, and insertion of objects into children – many of which show children crying and clearly in pain.

In the case involving the infant, Zweitzig pleaded guilty to one count of manufacturing and one count of attempted manufacturing of child pornography. The charges were based on a video that the defendant made in 2010 that depicts an infant under six months of age being coaxed to suck on adult male genitalia. In the video, Zweitzig’s voice can be heard repeatedly saying: “that’s a good boy.”

“The level of depravity in these cases leaves me almost speechless,” said U.S. Attorney McSwain. “I will simply say this: today’s sentence ensures that Zweitzig will die in prison, which is probably a better fate than he deserves.”

“Safeguarding children from being victimized by predators is a top priority for Homeland Security Investigations,” said Brian A. Michael, Special Agent in Charge of Homeland Security Investigations Philadelphia. “Mr. Zweitzig’s behavior is deplorable, and the exploitation of children is inexcusable. HSI special agents and our law enforcement partners will relentlessly pursue child predators, in every form, and ensure those who commit these atrocious crimes are brought to justice.”

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

The case was investigated by the Department of Homeland Security, Homeland Security Investigations, the Horsham Police Department, and the Montgomery County District Attorney’s Office. It is being prosecuted by Assistant United States Attorney Eric L. Gibson.

PHILADELPHIA – United States Attorney William M. McSwain announced that Kevin Swing, a/k/a “Tone,” 36, of West Chester, PA, was sentenced to 6 ½ years in prison and three years of supervised release by United States District Judge H. Slomsky, for his role in distributing more than 900 pills containing a dangerous fentanyl analogue, a Schedule I controlled substance.

In January 2020, Swing pleaded guilty to conspiracy to distribute a substance containing a fentanyl analogue, as well as knowingly distributing a substance containing a fentanyl analogue, for his role in a scheme to sell fentanyl disguised as prescription oxycodone. On May 11, 2018, Swing used an intermediary to sell more than 900 pills containing the narcotic cyclopropyl fentanyl, a fentanyl equivalent, to his co-defendant Ryan Menkins, for $5,600. Each pill was imprinted with “ETH 446,” which is typically found on Oxycodone Hydrochloride 30 mg pills. In other words, the fentanyl pills were intentionally mislabeled as legitimate, prescription oxycodone pills. Co-defendant Menkins is currently scheduled for trial on December 14, 2020.

“It’s bad enough when legitimate prescription medication like oxycodone is misused and abused, but when a substance as dangerous as fentanyl is made to appear to be prescription medication, it can have disastrous consequences,” said U.S. Attorney McSwain. “Fentanyl and the misuse of opioids is killing our citizens, and Kevin Swing significantly contributed to our region’s opioid epidemic. Together with our law enforcement partners, my Office will do everything possible to stop the illegal distribution of these deadly drugs.”

“Thank you to the U.S. Attorney’s office for bringing justice to the citizens of Chester County by removing the defendant and his drug peddling from our streets,” said Chester County District Attorney Deb Ryan. “We must work together to keep our residents safe.”

“Kevin Swing was peddling pills that appeared to be standard oxycodone doses, but in fact contained a drug related to fentanyl,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “Anyone buying those pills would've been expecting one thing and getting another, with potentially deadly results. Drug dealers making money off the misery of others is bad enough, let alone this dangerous bait and switch. Taking Swing off the street should send a message that the FBI and our law enforcement partners continue to fight to make our communities safer in the face of the opioid epidemic.”

The case was investigated by the Federal Bureau of Investigation, Newtown Square Resident Agency and the West Whiteland Township Police Department, and is being prosecuted by Assistant United States Attorney Matthew T. Newcomer.