Eastern District of Pennsylvania

PHILADELPHIA – Yesterday marked the 30th Anniversary of the Americans with Disabilities Act (ADA). Today, William M. McSwain, U.S. Attorney for the Eastern District of Pennsylvania, commemorated President George H.W. Bush’s historic July 26, 1990 signing of the ADA into law and announced that his Office will be hosting a virtual roundtable event with community leaders to discuss the ADA and his Office’s enforcement work under the statute.

“This landmark civil rights legislation sought to eliminate discrimination against millions of Americans with disabilities by outlawing the societal barriers that for so long excluded them from fully participating in some of the most fundamental aspects of American life, like seeking and holding a job, accessing transportation and medical care, patronizing a business, and voting,” said U.S. Attorney McSwain. “Although the ADA has been a transformative statute, our work is not done. Thirty years after its passage, illegal barriers still exist that prohibit people with disabilities from fully participating in our communities and deny them the ADA’s promise of equal opportunity and access. In recent years, my Office has removed many barriers to access in places of public accommodation in our District, such as hotels, restaurants, and medical facilities, and in state government services and buildings such as courthouses, schools, and polling places. We will continue to make ADA compliance a top priority.”

U.S. Attorney McSwain noted that his Office often hears from the targets of ADA investigations that they did not consider the ADA in opening their business, designing or renovating their building, or developing their program, or mistakenly believed the ADA did not apply to them. “There is no ‘grandfather’ clause to the ADA,” McSwain emphasized. “On the thirtieth anniversary of the ADA, I want the public to know that when my Office receives a complaint under the ADA, we will investigate and, where appropriate, take enforcement action.”

The U.S. Attorney’s Office for the Eastern District of Pennsylvania has a proud history of prioritizing civil rights enforcement and the ADA in particular; it has continued that tradition in recent efforts. For example, in February 2020, the Office began a review of all polling places in the District to ensure compliance with the ADA in advance of the November 2020 election. In April 2019, in response to an investigation initiated by the Office, Thomas Jefferson University Hospitals, Inc., executed a settlement agreement in which it agreed to address barriers to access for individuals who use wheelchairs in Jefferson’s radiology outpatient clinic. After a lengthy investigation, in March 2019, the Pennsylvania Department of Education signed a settlement agreement to address alleged discrimination against students with disabilities in its alternate education programs. In a March 2018 settlement agreement, Allergy & Asthma Specialists, P.C. agreed to fix barriers to access for deaf individuals at its Jenkintown facility. And in October 2018, after the Office initiated a review of several Philadelphia restaurants’ ADA compliance, twelve agreed to resolve a multitude of ADA access issues in their businesses.

Assistant U.S. Attorney Jacqueline C. Romero, the Civil Rights Coordinator for the Eastern District of Pennsylvania, will be organizing the upcoming roundtable to educate local stakeholders about this important work with regard to the ADA and the Department of Justice’s jurisdiction under the statute, and to hear from disability rights advocates about recurring issues in the community.

U.S. Attorney McSwain urges people who believe they are being discriminated against in violation of the ADA to file complaints with the Department of Justice. Complaints may be filed online at https://www.ada.gov/filing_complaint.htm, by calling the Department of Justice’s toll-free information line at (800) 514-0301 or (800) 514-0383 (TDD), or via email to the following address: USAPAE-CivilRights@usdoj.gov.

PHILADELPHIA – United States Attorney William M. McSwain announced that David Charles Hayes, 33, of Sharon Hill, PA, was sentenced to 151 months in prison, three years of supervised release and ordered to pay $43,632 in restitution by United States District Judge Mark A. Kearney for robbing nine banks in Montgomery and Delaware counties between April and December 2018.

In November 2019, Hayes pleaded guilty to all nine robberies. He robbed these banks by entering with his face covered, usually with a bandana, hat and sunglasses, and approaching tellers and demanding that money be handed over. In each case, he issued threats to the bank employees he encountered, ranging from physical harm (e.g., “don’t do anything goofy or I will hurt you”) to threats of death (e.g., “if you want to make it home to your kids, don’t push any buttons or try anything”). The defendant stole over $43,000 total during these robberies.

During the commission of one of the robberies, the defendant was given a security dye pack along with the stolen money, which began smoking and released a colored dye when it was removed from the bank. Hayes discarded the dye pack and the gloves he was wearing, and police recovered this evidence, which was tested for DNA. The defendant was found to be match and a warrant for his arrest was issued. He was taken into custody at Sugar House Casino, where he admitted to gambling his robbery proceeds.

“Bank robbery is a serious federal offense that can carry stiff penalties,” said U.S. Attorney McSwain. “During his crime spree, Hayes threatened many innocent people and now he will pay the price. I want people to know that committing a violent crime in the Eastern District of Pennsylvania carries a tremendous risk of a long prison sentence, which is the point of our new anti-violence public awareness campaign. You can learn more about this campaign on our District website.”

“David Hayes was quite a prolific robber, targeting nine banks in nine months across multiple police jurisdictions,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “The FBI and our law enforcement partners were determined to put a stop to his one-man spree. Working together, we were able to take him off the street and see him brought to justice.”

The case was investigated by the Federal Bureau of Investigation, with assistance from the Ridley Township Police Department, the Glenolden Borough Police Department, the Sharon Hill Police Department, the Radnor Township Police Department, the Lower Merion Township Police Department, and the Pennsylvania State Police. It is being prosecuted by Assistant United States Attorney Amanda R. Reinitz.

PHILADELPHIA – United States Attorney William M. McSwain announced that Raphael Shaw, 20, of Philadelphia, PA was ordered detained pending trial at a detention hearing today in federal court on charges of burglarizing $104,000 from a Wells Fargo Bank branch in the Parkside section of Philadelphia during the recent riots and looting in the city. The defendant was arrested and taken into federal custody last week and made his initial appearance in court on Friday, July 17, 2020.

Following peaceful protests 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 in Philadelphia that resulted in widespread looting, burglary, arson, destruction of property, and other violent acts.

One such burglary occurred on May 31, 2020, when the defendant and his confederates allegedly broke into the Wells Fargo bank located on the 1500 block of north 52nd Street, pointed a rifle at people inside the bank, and removed a cash vault containing $104,000. According to the criminal complaint, the burglars used a forklift stolen from a nearby Lowe’s home improvement store to remove the vault. Surveillance footage from the bank showed a male wearing a blonde wig with distinctive tattoos on his right forearm, and several other individuals, surrounding a large object and moving it through the bank.

Shaw was identified as the individual in the blonde wig after a Philadelphia Police Officer who patrols the Parkside neighborhood, and who has interacted with Shaw multiple times in the last year, recognized the tattoos on his arm. Investigators were also able to further identify Shaw as the suspect based on photos posted to his publicly accessible Instagram account which showed a photo of an individual with the same arm tattoos, displaying large amounts of cash. A separate criminal complaint filed in federal court earlier this month charged Shaw’s alleged associate, Xavier Nolley-Hall, with entering the bank with intent to commit a felony.

“We at the U.S. Attorney’s Office will not allow violent criminal behavior to hijack the First Amendment right of the people to assemble peaceably and to petition their government,” said U.S. Attorney McSwain. “We accomplish that mission not only by arresting and prosecuting the perpetrators, but also by detaining them with no bail, when appropriate. That was the case here. Shaw will now face the consequences of his alleged actions, and he will do so while sitting in federal prison, where he belongs, prior to his trial. The bottom line is that if you committed a federal crime during the rioting and looting in Philadelphia, we are coming for you.”

“Amid peaceful protests and an outbreak of civil unrest, criminal opportunists sought to take advantage of the chaos,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Numerous banks across the city experienced vandalism and forced entry, but this daylight forklift burglary was the most brazen incident by far. The FBI/Philadelphia Police Violent Crimes Task Force continues to work the case, to identify the others involved. Our message to those folks: we’ll see you soon.”  

If convicted, Shaw faces a maximum possible sentence of twenty years in prison, followed by three years of supervised release, and a fine of up to $250,000.

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

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 two owners of a popular cheesesteak restaurant were charged with conspiracy to defraud the IRS, tax evasion, and aiding and assisting in the filing of false tax returns.

According to the Indictment, Anthony Lucidonio Sr., 82, and his son, Nicholas Lucidonio, 54, both of New Jersey, owned and operated Tony Luke’s, a cheesesteak and sandwich restaurant located in South Philadelphia. The Indictment alleges that from 2006 to 2016, the defendants hid from the IRS more than $8 million in cash receipts by, among other things, depositing only a portion of Tony Luke’s receipts into business bank accounts, providing incomplete information concerning receipts and income to their accountant, and filing fraudulent corporate and individual tax returns that substantially understated business receipts and income. The defendants also willfully evaded substantial individual income taxes that they owed.

The Indictment also alleges that the Lucidonios committed employment tax fraud by paying employees “off the books” in cash. To evade detection, defendants would pay most employees a portion of their wages and salaries “on the books” based on only a portion of the hours they worked. The defendants would then pay substantial additional cash wages for the remaining hours worked without withholding or paying over to the IRS the required employment taxes. They caused their accountant to prepare and file fraudulent quarterly employment tax returns with the IRS that substantially understated wages paid and the taxes that were due.

It is further alleged that when a dispute over franchising rights arose between the two defendants and another individual in 2015, the Lucidonios became concerned that their tax fraud scheme would be revealed, so they directed that the prior year’s tax returns be amended to increase reported sales. But it is alleged that the Lucidonios, in amending their returns, substantially offset the increase in reported sales and the additional taxes that would be due by claiming additional false and fraudulent expenses, thereby continuing their tax fraud scheme.

“Tony Luke’s is an iconic Philadelphia brand, but that is not what matters in the eyes of the law. These are serious allegations and it should go without saying that everyone has an obligation to follow the law. This alleged scheme victimized honest taxpayers in two ways: first, by hiding more than $8 million in revenue from the IRS and second, by avoiding payroll taxes,” said U.S. Attorney McSwain. “And when the defendants thought their scheme might be discovered, they allegedly cooked the books even further to cover their tracks.”

“Collecting and paying over employment tax is an obligation, not a choice,” said IRS Criminal Investigations Special Agent in Charge Thomas Fattorusso. “Anthony Lucidonio and Nicholas Lucidonio willfully chose to ignore this obligation. Their actions not only caused a loss to the government, but it also put their employees at risk of losing future Social Security and Medicare benefits.”

The defendants are charged with conspiring to defraud the United States, 19 counts of aiding and assisting in the filing of false personal and corporate tax returns, and four counts of tax evasion. If convicted, the defendants face a maximum sentence of five years in prison for the conspiracy charge and each count of tax evasion, and three years in prison for each false return charge. Each defendant also faces a maximum period of five years of supervised release, a $6,000,000 fine, and a $2,400 special assessment

An Indictment merely alleges that crimes have been committed. The defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The case was investigated by Special Agents of the IRS Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney Paul L. Gray and Assistant Chief John N. Kane of the Department of Justice Tax Division.

A federal grand jury in Philadelphia returned an indictment that was unsealed today, charging the owners of a popular cheesesteak restaurant with conspiracy to defraud the IRS, tax evasion, and aiding and assisting in filing false tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania.

According to the indictment, Anthony Lucidonio Sr., and his son, Nicholas Lucidonio, both of New Jersey, owned and operated Tony Luke, a cheesesteak and sandwich restaurant located in South Philadelphia. From 2006 through 2016, the Lucidonios allegedly hid from the IRS more than $8 million in receipts by depositing only a portion of Tony Luke’s receipts into business bank accounts and filing with the IRS false business and personal tax returns that substantially understated their income. 

The indictment further alleges that the Lucidonios committed employment tax fraud by paying employees a portion of their wages and salaries “on the books” for some hours they worked, but then paying substantial additional wages for the remaining hours worked “off the books” in cash, without withholding and paying to the IRS the required employment taxes. From 2014 through 2015, they also allegedly filed false quarterly employment tax returns with the IRS substantially understating wages paid and taxes due.

It is also alleged that after a dispute over franchising rights arose between the Lucidonios and another individual in 2015, the Lucidonios, concerned that their tax fraud scheme would be revealed, amended prior year tax returns to increase reported sales, but then falsely offset the increased income by inflating expenses.  

If convicted, the defendants face a maximum sentence of five years in prison for the conspiracy charge and each count of tax evasion, and three years in prison for each false return charge. Defendants also face a period of supervised release, restitution, and monetary penalties.

An indictment merely alleges that crimes have been committed. The defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney McSwain commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief John Kane of the Tax Division and Assistant U.S. Attorney Paul Gray, who are prosecuting the case.

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

PHILADELPHIA – United States Attorney William M. McSwain announced today that former U.S. Congressman Michael “Ozzie” Myers, 77, of Philadelphia, Pennsylvania, has been charged by Indictment with multiple counts, including conspiring to violate voting rights by fraudulently stuffing the ballot boxes for specific Democratic candidates in the 2014, 2015, and 2016 Pennsylvania primary elections, bribery of an election official, falsification of records, voting more than once in federal elections, and obstruction of justice. U.S. Attorney McSwain’s video statement providing additional details about this case is available on the Office website here: https://www.justice.gov/usao-edpa/video/us-attorney-william-m-mcswain-announces-indictment-former-congressman-election-fraud.

Specifically, Myers is alleged to have bribed the Judge of Elections for the 39th Ward, 36th Division in South Philadelphia, Domenick J. Demuro, in a fraudulent scheme over several years. Demuro, who was charged separately and pleaded guilty in May 2020, was responsible for overseeing the entire election process and all voter activities of his Division in accord with federal and state election laws.

The voting machines at each polling station, including in the 39th Ward, 36th Division, generate records in the form of a printed receipt documenting the use of each voting machine. This printed receipt, also known as the “results receipt,” shows the vote totals, and the Judge of Elections and other Election Board Officials at each polling place attest to the accuracy of machine results.

Myers is charged with bribing Demuro to illegally add votes for certain candidates of their mutual political party in primary elections. Some of these candidates were individuals running for judicial office whose campaigns had hired Myers, and others were candidates for various federal, state, and local elective offices that Myers favored for a variety of reasons. According to the Indictment, Myers would solicit payments from his clients in the form of cash or checks as “consulting fees,” and then use portions of these funds to pay Demuro and others to tamper with election results.

After receiving payments ranging from between $300 to $5,000 per election from Myers, Demuro would add fraudulent votes on the voting machine – also known as “ringing up” votes – for Myers’ clients and preferred candidates, thereby diluting the value of ballots cast by actual voters. At Myers’ direction, Demuro would add these fraudulent votes to the totals during Election Day, and then would later falsely certify that the voting machine results were accurate. Myers is also accused of directing Demuro to lie to investigators about the circumstances of the bribes and the ballot-stuffing scheme.

“Voting is the cornerstone of our democracy. If only one vote has been illegally rung up or fraudulently stuffed into a ballot box, the integrity of that entire election is undermined,” said U.S. Attorney McSwain. “Votes are not things to be purchased and democracy is not for sale. If you are a political consultant, Election Official, or work with the polling places in any way, I urge you to do your job honestly and faithfully. That is what the public deserves, it is what democracy demands, and it is what my Office will enforce.”

“Free and fair elections are the hallmark of our system of government,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “The Department of Justice has zero tolerance for corruption of the electoral process, and we will spare no effort in investigating and prosecuting those who would seek an unfair advantage at the polls by bribing state and local officials responsible for ensuring the fairness of our elections.”

“Transparent and fair elections are integral to the proper functioning of our democracy,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Those who seek to corrupt the vote threaten the public’s trust in the process and must be brought to justice. The FBI is determined to protect the integrity of our electoral system.”

“These charges, announced today by the Justice Department, clearly illustrate allegations of absolute disregard for the sanctity of our electoral system,” said Captain Leo D. Hannon Jr., Director of the Special Investigations Division of the Pennsylvania State Police. “As disheartening as this conduct may be for the voting public in Philadelphia and elsewhere, the citizens we serve should be reassured by the fearless and tireless work of the attorneys, agents, and troopers tasked with the continuation of this active investigation. Particularly in the current atmosphere of impending elections, the Pennsylvania State Police prioritize investigations into allegations of voter fraud and public corruption.”

If convicted, the defendant faces a maximum possible sentence of 90 years in prison and two million dollars in fines.

This case is being investigated by the Federal Bureau of Investigation, with assistance from the Pennsylvania State Police. It is being prosecuted by Assistant United States Attorney Eric L. Gibson and Richard C. Pilger, Director of Elections Crimes Branch, Criminal Division, Public Integrity Section, U.S. Department of Justice.                                                                       

An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – U.S. Attorney William M. McSwain released a video on July 23, 2020, with his remarks concerning the criminal charges against former United States Congressman Michael “Ozzie” Myers. The video is available on the Office website here: https://www.justice.gov/usao-edpa/video/us-attorney-william-m-mcswain-announces-indictment-former-congressman-election-fraud. Below are U.S. Attorney McSwain’s remarks, as prepared for delivery.

*****

Good morning. I am here to announce that the U.S. Attorney’s Office has unsealed criminal charges against Michael “Ozzie” Myers, a political consultant and former United States Congressman in Philadelphia. Myers has been charged with eight counts: one count of conspiracy to deprive individuals of their civil rights; one count of conspiring to illegally vote in a federal election; two counts of violating the Travel Act, which forbids the use of any facility in interstate commerce (here, a cell phone) with the intent to promote certain illegal activity (here, bribery); two counts of falsification of records; one count of voting more than once in a federal election; and one count of obstruction of justice.

This prosecution has been a team effort, and before I get into a more detailed description of the allegations, there are several people that I want to recognize and thank. First, from the FBI, Mike Driscoll, who is the Special Agent in Charge of the FBI’s Philadelphia Field Office, as well as Special Agent Carmen DiMario, who is the lead investigator on the case. I want to thank the Public Integrity Section at the U.S. Department of Justice in Washington, and specifically Section Chief Corey Amundson, Deputy Chief John Keller, and the Director of the Election Crimes Branch of the Section, Richard Pilger. I also want to thank Assistant U.S. Attorney Richard Barrett, who is the Chief of our Public Corruption Unit at the U.S. Attorney’s Office, and Assistant U.S. Attorney Eric Gibson, who is the lead prosecutor on the case. And finally, I would like to thank the Pennsylvania State Police for their assistance in this investigation. 

Our election system relies on the honesty and the integrity of those involved in the electoral process. If Election Officials are corrupt, the system is corrupt, which creates opportunities for election fraud and for the counting of fake votes. According to the Indictment, the election system in Philadelphia’s 39th Ward, 36th Division was corrupted by Ozzie Myers and his co-conspirators.

Myers held himself out as an effective and successful political operative capable of ensuring his clients' electoral success. Myers allegedly did so by working in a number of ways to exert influence and control over Philadelphia’s 39th Ward. According to the Indictment, Myers distributed cash payments and supported family, friends, and allies for elective office in the 39th Ward, and installed Ward Leaders, Judges of Elections, and Democratic State Committee Persons. Through the alleged scheme, Myers advanced his political and financial interests through fraudulent and corrupt means by engaging in a “ballot stuffing” scheme that enabled him to take credit for the electoral success of his Philadelphia-based clients and preferred candidates. This secured his standing in local party politics that enabled him to control and influence the 39th Ward, and influence the distribution of local patronage jobs.

I would like to take you to the 39th Ward, 36th Division to show you where the action happened. I have two photographs that I am going to share at this point to provide some context about the polling place involved. First, there is a picture of the outside of the polling place, which is adjacent to a bocce ball court. Here is that photo. Then, we go inside the polling place, with a picture of the actual machines on an election day.

As charged, Myers would solicit monetary payments from his clients in the form of cash or checks as “consulting fees.” Myers would then take portions of these funds and make payments to Election Board Officials in return for the officials tampering with the election results. Specifically, Myers gave directions and paid money to Dominick J. Demuro, Judge of Elections in Philadelphia’s 39th Ward, who would illegally add votes for certain Democratic candidates on the primary ballots in 2014, 2015, and 2016. These candidates were individuals running for judicial office whose campaigns had hired Myers, as well as other candidates for various federal, state, and local elective offices who were preferred by Myers for a variety of reasons.

After receiving payments from Myers ranging between $300 to $5,000 per election, Demuro would add fraudulent votes - also known as “ringing up” votes – for Myers’ clients and preferred candidates, thereby diluting the ballots cast by actual voters. Myers would relay instructions to Demuro over a cellphone regarding which candidates Demuro should “ring up” on Election Day. Demuro would add the fraudulent votes by literally standing in the voting booth and voting over and over, as fast as he could, when he thought the coast was clear.

Demuro would then falsely certify the Voting Machine results from the 39th Ward, 36th Division as valid. Myers is also charged with obstruction of justice for instructing Demuro about how best to avoid detection concerning these fraudulent votes. Myers allegedly paid Demuro at specific times to avoid campaign financial reporting requirements, and told Demuro to lie about the reason for those payments if he were ever asked.

These fraudulent votes added up. In May 2014, DeMuro stuffed the ballot box with 27 fraudulent ballots during the primary election. In May 2015, DeMuro padded the ballot box with 40 fraudulent votes; in 2016, it was 46 fraudulent votes. These numbers may sound relatively small, but they made up a significant percentage of the total votes cast at the polling place. In 2014, 118 total ballots were reported in the 36th Division of the 39th Ward. That means that the fraudulent votes accounted for over 22% of the total voting in that Division in 2014. In 2015, the fraud accounted for over 15% of the votes in the Division; in 2016, the fraud accounted for over 17% of the votes. And when it comes to these local elections, these numbers are not insignificant. Local elections can often be decided by hundreds, or at times, dozens of votes. These fraudulent votes had the potential to alter a local election’s final result.

But at the end of the day, the specific number of votes does not really matter. Voting is the cornerstone of our democracy. If only one vote has been illegally rung up or fraudulently stuffed into a ballot box, the integrity of that entire election is undermined. As President Lincoln once said, “Elections belong to the people.” The people. To each and every citizen, who has the right to cast one vote. Elections do not and will never belong to corrupt election officials who attempt to buy elections. Votes are not things to be purchased, and democracy is not for sale.

Demuro, who was charged earlier this year by my Office, has accepted responsibility for his crimes by pleading guilty to all charges and is currently awaiting sentencing. And this election fraud investigation is on-going. My Office is taking every possible step that we can to ensure the integrity of every election in the Eastern District of Pennsylvania in 2020. We will work day and night to make sure that every citizen’s civil rights are protected, whether that is through access to the polls or making every legitimate vote count. If you tamper with anyone’s right to vote or try to fix the results of any election in the Eastern District of Pennsylvania, my Office will hold you accountable. If you are a political consultant, Election Official, or work with the polling places in any way, I urge you to do your job honestly and faithfully. That is what the public deserves, it is what democracy demands, and it is what my Office will enforce. Thank you.

A former U.S. Congressman was charged Tuesday in an indictment unsealed today, with conspiring to violate voting rights by fraudulently stuffing the ballot boxes for specific candidates in the 2014, 2015, and 2016 primary elections, bribery of an election official, falsification of records, voting more than once in federal elections, and obstruction of justice.

Michael “Ozzie” Myers, 77, of Philadelphia, Pennsylvania, is charged with conspiring with and bribing the former Judge of Elections for the 39th Ward, 36th Division, Domenick J. Demuro.   Demuro, who pleaded guilty previously in federal court in Philadelphia, was responsible for overseeing the entire election process and all voter activities of his division in accord with federal and state election laws.

“Free and fair elections are the hallmark of our system of government,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “The Department of Justice has zero tolerance for corruption of the electoral process, and we will spare no effort in investigating and prosecuting those who would seek an unfair advantage at the polls by bribing state and local officials responsible for ensuring the fairness of our elections.”

“Voting is the cornerstone of our democracy.  If only one vote has been illegally rung up or fraudulently stuffed into a ballot box, the integrity of that entire election is undermined,” said U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania.  “Votes are not things to be purchased and democracy is not for sale.  If you are a political consultant, election official, or work with the polling places in any way, I urge you to do your job honestly and faithfully.  That is what the public deserves, it is what democracy demands, and it is what my office will enforce.”

“Transparent and fair elections are integral to the proper functioning of our democracy,” said Special Agent in Charge Michael J. Driscoll of the FBI’s Philadelphia Division.  “Those who seek to corrupt the vote threaten the public’s trust in the process and must be brought to justice. The FBI is determined to protect the integrity of our electoral system.”

“These charges, announced today by the Justice Department, clearly illustrate allegations of absolute disregard for the sanctity of our electoral system,” said Captain Leo D. Hannon Jr., Director of the Special Investigations Division of the Pennsylvania State Police.  “As disheartening as this conduct may be for the voting public in Philadelphia and elsewhere, the citizens we serve should be reassured by the fearless and tireless work of the attorneys, agents, and troopers tasked with the continuation of this active investigation.  Particularly in the current atmosphere of impending elections, the Pennsylvania State Police prioritize investigations into allegations of voter fraud and public corruption.”

Myers is charged with bribing Demuro to illegally add votes for certain candidates of their mutual party in primary elections. Some of these candidates were individuals running for judicial office whose campaigns had hired Myers, and others were candidates for various federal, state, and local elective offices whom Myers favored for a variety of reasons.  According to the indictment, Myers would solicit payments from his clients in the form of cash or checks as “consulting fees,” and then use portions of these funds to pay Demuro and others in return for tampering with election results.

After receiving payments ranging from between $300 to $5,000 per election from the consultant, the court papers allege Demuro would add fraudulent votes on the voting machine – also known as “ringing up” votes – for Myers’ clients and preferred candidates, thereby diluting the value of ballots cast by actual voters.  At Myers’ direction, Demuro would add these fraudulent votes to the totals during Election Day, and then would later falsely certify that the voting machine results were accurate.  Myers is also accused of directing Demuro to lie about the circumstances of the bribes and the ballot-stuffing scheme to investigators.

This case is being investigated by the FBI with assistance from the Pennsylvania State Police.  It is being prosecuted by Richard C. Pilger, Director of the Elections Crimes Branch of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Eric L. Gibson.

An indictment 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 Richard Meleski, 58, of Chalfont, PA, pleaded guilty to multiple charges, including healthcare fraud, mail fraud, stolen valor, and aiding and abetting straw purchases of firearms.

In November 2019, Meleski was charged by Indictment for his scheme to defraud the government of hundreds of thousands of dollars in benefits. To perpetrate the scheme, Meleski faked serving in the U.S. military, specifically the Navy SEALs, and falsely represented that he had been a Prisoner of War, in order to secure healthcare benefits from the Veterans Administration (VA) worth over $300,000. Due to his false representation as a POW, the defendant received healthcare from the VA in Priority Group 3, effectively receiving healthcare before other deserving military service members. In reality, Meleski never served a single day in the United States military.

Meleski also filed for monetary compensation from the VA for PTSD he supposedly suffered during an armed conflict in Beirut in which he rescued injured service members. In his application for disability benefits for PTSD, Meleski falsely represented that he had been awarded the Silver Star for heroic actions during his time as a Navy SEAL. Again, Meleski never served a single day in the United States military and of course was never awarded any service medals. Meleski also submitted another application to the VA for monetary compensation in which he included obituaries of actual Navy SEALs alongside whom he had supposedly served. In short, he traded on the actions of true heroes in an attempt to bolster his false application for monetary benefits.

The defendant also filed for disability benefits from The United States Social Security Administration (SSA) for injuries he claimed to have received during his time in the service. Meleski falsely testified under oath in connection with an SSA Disability proceeding.

After being arrested for fraud, it was discovered that the defendant had also engaged in aiding and abetting the straw purchase of two separate firearms; he also pleaded guilty to this conduct.

“Meleski faked a record as a decorated U.S. Navy SEAL in order to steal numerous forms of compensation,” said U.S. Attorney McSwain. “Everything about this case is profoundly offensive. Our veterans fought for the freedoms we hold dear, and we owe them a debt that we can never fully repay. But holding individuals like Meleski accountable for their crimes is one small way that we can honor our veterans’ service.”

“This guilty plea is a warning to those who make false statements in applying for Social Security disability benefits,” said Gail S. Ennis, Inspector General of Social Security. "I want to recognize the efforts of the VA OIG and ATF in investigating this case, and the United States Attorney’s Office for bringing these charges.”

The case was investigated by Department of Veterans Affairs Office of the Inspector General, Social Security Administration Office of the Inspector General, and the Bureau of Alcohol, Tobacco and Firearms. It is being prosecuted by Special Assistant United States Attorney Megan Curran.

PHILADELPHIA – United States Attorney William M. McSwain announced that Philip Elvin Riehl, 68, of Bethel Township, Berks County, PA, was sentenced to 120 months in prison, three years supervised release, and was ordered to pay $59,688,297 in restitution and $59,688,297 in forfeiture by United States District Judge Edward G. Smith for orchestrating a massive Ponzi scheme that targeted members of the Mennonite and Amish religious communities in Pennsylvania and elsewhere. Riehl was also ordered to forfeit two pieces of real estate, $22 million in loans receivable and $1.145 million in payments.

In February 2020, Riehl pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and one count of wire fraud. The defendant, a Berks County–based accountant, fraudulently solicited tens of millions of dollars in investments from his accounting clients and others (who are mostly members of the Mennonite or Amish communities) into an investment program that he operated.

Riehl then diverted funds from the program to Trickling Springs Creamery, LLC, a Franklin County–based creamery of which he was the majority owner. Riehl also fraudulently solicited direct investments in Trickling Springs Creamery. The defendant made material misrepresentations about the safety and security of these investments in his program and about the performance of the program, as well as misrepresentations and omissions about the creamery’s business and financial condition. Trickling Springs Creamery announced it was ceasing operations in September 2019 and filed a bankruptcy petition in December 2019. Investor losses are estimated to be around $60 million, making this one of the largest Pennsylvania-based Ponzi schemes ever.

The entire scheme is what is commonly referred to as “affinity fraud,” which typically involves investment scams that prey upon members of identifiable groups, such as religious or ethnic communities. These types of scams exploit the trust and friendship that exist in groups of people who share common interests or beliefs.

“The people who invested their money, sometimes their entire life’s savings, with Philip Riehl believed implicitly that they could trust him because he was one of their own,” said U.S. Attorney McSwain. “Riehl preyed upon that trust, swindling them out of tens of millions of dollars in an effort to keep his creamery business from going under. No matter what community they belong to, fraudsters like Riehl must be held accountable under the law for justice to prevail.”

“While no form of fraud is ever acceptable, it takes a particularly vile person to target their own religious community,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Philip Riehl’s investors knew him and they took him at his word. He fully exploited that trust, misleading them repeatedly, with some $60 million of their hard-earned money disappearing into what proved nothing more than a giant Ponzi scheme. While we can never make his victims whole financially or emotionally, today he is being held accountable and that is some measure of justice for those he’s wronged.”

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 Pennsylvania Department of Banking and Securities and the U.S. Securities and Exchange Commission.

PHILADELPHIA – United States Attorney William M. McSwain announced that Phillip Cottman, 40, of Philadelphia, PA, was sentenced to 28 years (336 months) and one day in prison by United States District Judge Berle M. Schiller for a spate of armed robberies over a three year period.

Between July 2015 and April 2018, Cottman committed six armed robberies: three Republic Bank branches (on 18th & Market Streets, 16th & Walnut Streets, and 8th & Chestnut Streets), two Dunkin Donuts shops (on 21st & Market Streets and 15th Street & Washington Avenue), and one 7-Eleven convenience store (on 17th & South Streets), all in Center City Philadelphia.

During all six robberies, the defendant pointed a gun at his victims and demanded money, stealing a few thousand dollars from one bank branch and as little as $60 from one shop. He was charged by criminal complaint and arrested in April 2018; at the time of his arrest, he was carrying a loaded Smith & Wesson SD40 VE handgun, despite being a convicted felon which prohibits him from possessing a firearm. In June 2019, a grand jury returned an Indictment formally charging the defendant with all six robberies, including three counts of armed bank robbery, three counts of Hobbs Act robbery, six counts of using and carrying a firearm during a crime of violence and one count of possession of a firearm by a convicted felon. Cottman pleaded guilty in January 2020.

“Robbing any type of business – whether it’s a bank, a corner store, or anything in between – is a serious federal offense that can carry stiff penalties, as Cottman can now attest,” said U.S. Attorney McSwain. “Over the course of six robberies during which he threatened innocent people with a gun, the defendant stole a total of about $5,000 and is now going to spend nearly three decades behind bars for his crimes. Committing a violent crime is just not worth it. I want people to know that committing a violent crime in the Eastern District of Pennsylvania carries a tremendous risk of a long prison sentence, which is the point of our new anti-violence public awareness campaign. You can learn more about this campaign on our District website.”

“Phillip Cottman was a serial armed robber,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He was more than comfortable barging into city banks and businesses, terrorizing innocent employees and witnesses at gunpoint, and stealing cash. Had Cottman not been identified and arrested by the FBI/Philadelphia Police Violent Crimes Task Force, he’d still be at it. Philadelphia is safer with him behind bars.”

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 Philadelphia Police Department FBI Task Force officers, and is being prosecuted by Assistant United States Attorney Timothy M. Stengel.

PHILADELPHIA – United States Attorney William M. McSwain announced that Hai Nguyen, 37, of New Castle, Delaware, was sentenced to ten months in prison and three years of supervised release by United States District Court Judge J. Curtis Joyner for lying to the FBI during the course of a double homicide investigation.

On the night of August 26, 2014, Tam Le and four associates kidnapped three Philadelphia drug dealers who had failed to pay a substantial drug debt. Le was a member of a gang called “BTK” or “Born to Kill.” Le and his associates transported the three victims to the Schuylkill River, bound them with duct tape, weighed down their bodies, stabbed them, and dumped all three victims into the river. Two victims died in the river while the third somehow managed to crawl out of the river and flag down a passing motorist on Kelly Drive for assistance.

Hai Nguyen was a close friend of Tam Le. Immediately following the murders, Nguyen traveled from Delaware to Le’s house in Philadelphia. Le knew that the Philadelphia Police would be looking to arrest him for the murders, so he asked Nguyen to drive him and his family to New York State. The U.S. Marshals Service eventually hunted down Le and placed him under arrest. He was charged with the murders and convicted at trial. A Philadelphia County jury sentenced him to death.

At the same time, the FBI began investigating the crime in order to bring the other perpetrators, some of whom lived in New York, to justice. On three occasions, the FBI interviewed Hai Nguyen about traveling to Tam Le’s house following the murders. During those interviews, Nguyen repeatedly lied to the FBI and stated that he did not travel to Le’s house that night. The FBI subsequently obtained cell site data from Hai Nguyen’s phone and proved his lies.

“Lying to the FBI or to any federal investigating agency is always a serious offense, one which we will prosecute vigorously,” said U.S. Attorney McSwain. “But lying in the course of a federal double homicide investigation is a sure way to land in prison. This type of criminal dishonesty is reprehensible and will never be tolerated.”

The case was investigated by the Federal Bureau of Investigation with assistance from the Philadelphia Police Department. The case is being prosecuted by Assistant United States Attorney Robert J. Livermore.

PHILADELPHIA – United States Attorney William M. McSwain announced that Eduardo Gregorio Azocar, 48, of Venezuela was sentenced to more than 12 years (151 months) in prison and five years of supervised release by United States District Judge Harvey Bartle, III, for the attempted distribution of more than 30 kilograms of cocaine for purpose of unlawful importation to the United States, and the distribution of more than 4 kilograms of cocaine for purpose of unlawful importation to the United States.

Azocar, who resided in Venezuela, used the Caribbean country of Trinidad and Tobago to facilitate his distribution of kilogram quantities of cocaine. In the summer of 2015, the Drug Enforcement Administration (DEA) and Trinidadian law enforcement received information that Azocar had 50 kilograms of cocaine that he wanted to sell to a U.S. buyer. On August 26, 2015, Trinidadian law enforcement agents watched the defendant access a locked storage container in Trinidad to inspect his cocaine. On August 27, 2015, an undercover detective in the United States made a series of telephone calls to Azocar. Posing as a Philadelphia-area resident, the undercover detective said he was interested in buying kilogram quantities of cocaine and negotiated the purchase price with the defendant. Before those negotiations were completed, Trinidadian law enforcement agents searched the storage container and seized a total of 30.4 kilograms of cocaine.

The undercover detective also introduced a confidential source to Azocar. The confidential source traveled from the United States to the island of Trinidad on multiple dates, meeting with Azocar in person in Trinidad. On October 4, 2015, at Azocar’s direction, an associate of Azocar sold to the confidential source 4.1 kilograms of cocaine which was destined for the United States. On October 26, 2015, the confidential source met Azocar in a Trinidadian hotel and paid him $22,500 for the previously negotiated cocaine sale. In a recorded conversation, the defendant told the confidential source: “I’ve been looking for a contact just like you and I found you. I am really happy.” In that same conversation, the confidential source and Azocar discussed the cost of moving the cocaine from Trinidad to Philadelphia, the price of a kilogram of cocaine in Philadelphia, and the price of a kilogram of heroin in Philadelphia.

Azocar was indicted in the Eastern District of Pennsylvania and arrested in Trinidad on June 16, 2016. He fought extradition for years in Trinidadian courts, but was eventually extradited to Philadelphia, PA, on July 23, 2019 to face justice. The defendant pleaded guilty in February 2020.

“Drug trafficking preys on individuals in addiction and makes our entire city less safe,” said U.S. Attorney McSwain. “Narcotics don’t just magically appear on Philadelphia streets -- they are smuggled in by people like Azocar, seeking to profit off the suffering of our people and communities. My Office is committed to working with our law enforcement partners at all levels, and in other jurisdictions and nations, to investigate and convict those who are poisoning our neighborhoods with deadly drugs and put them behind bars, where they belong.”

“Azocar mistakenly thought that he could elude the reach of United States law by remaining outside the US as he sold multi-kilogram quantities of cocaine destined for Philadelphia.  As a result of the coordinated efforts of DEA and prosecutors in the US and Trinidad, Azocar was arrested in Trinidad and extradited to Philadelphia to face US justice,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division.  “The DEA is most appreciative of the cooperation and support provided by Trinidadian police and prosecutors.  DEA has offices around the world and will continue to work tirelessly to extradite significant drug-traffickers like Azocar who pose the greatest threat to our country.” 

The case was investigated by the Drug Enforcement Adminstration, and is being prosecuted by Assistant United States Attorney Jason P. Bologna.

PHILADELPHIA – United States Attorney William M. McSwain announced that Jeffrey Lyons, 59, of Lancaster, PA was sentenced to fourteen years in prison, and ordered to pay restitution of $53 million to Fulton Bank and $550,000 to the IRS, by Judge Jeffrey L. Schmehl for orchestrating a massive bank fraud scheme over many years.

In October 2019, Lyons, the former CEO of Worley & Obetz, pleaded guilty to one count of defrauding Fulton Bank of over $65 million between 2003 and 2018. Lyons also pleaded guilty to one count of tax evasion. The defendant admitted that he, along with Worley & Obetz’s two controllers, Karen Connelly and Judith Avilez, committed bank fraud by providing Fulton Bank with dozens of fraudulent financial statements and a fraudulently altered supply agreement between Worley & Obetz and its largest customer, Giant Food. Worley & Obetz was an oil and gas company in Manheim, PA, that provided services and home heating oil, gasoline, diesel, and propane to its customers.

Lyons enlisted the help of the Worley & Obetz controllers to create the fraudulent financial statements, making it appear to the bank and the company’s owners that it had over $55 million in accounts receivable from Giant Food for purported fuel that Giant had supposedly purchased from Worley & Obetz. In truth, Giant rarely purchased fuel from Worley & Obetz after 2011, and when they did, it was in small amounts. The falsified financial statements made Worley & Obetz appear to have millions more revenue and accounts receivable than it did. Each month, for more than fifteen years, Lyons and the company controllers created false Worley & Obetz financial statements, which Lyons presented to Fulton Bank in support of his request for additional loans or extensions on existing lines of credit. Fulton Bank relied on the fraudulent financial statements when it lent Worley & Obetz over $65 million.

Lyons used the Fulton loans to pay Worley & Obetz expenses, which included his annual salary of over $500,000. He also used the borrowed money to make Worley & Obetz appear profitable when it was actually operating at a loss, to pay interest on the earlier loans he borrowed from Fulton, and to fund some of his personal expenses including real estate worth millions. Additionally, from 2012 through 2017, Lyons failed to report over $1.4 million of income to the IRS.

After Lyons’ scheme was discovered, Worley & Obetz and its related companies did not have the assets to repay the massive amount of Fulton loans that Lyons had accumulated. In June 2018, Worley & Obetz declared bankruptcy. It notified its approximately 275 employees that they no longer had jobs and, after 72 years, the family-owned company closed its doors forever. As a result of Lyons’ fraud, many in the Manheim, PA community suffered greatly – both financially and emotionally.

“The scope and duration of the fraud committed by Lyons is simply stunning,” said U.S. Attorney McSwain. “He stole tens of millions of dollars from bank lenders, all while willfully ignoring his fiduciary duty to the company and the hundreds of people who made their livelihoods working there. This case is a tragedy for the many honest, hardworking people who placed their trust in Lyons. My Office will continue to work aggressively with our law enforcement partners to protect innocent individuals and businesses from being victimized by financial fraud.”

“Over the course of 15 years, at Jeffrey Lyons’ direction, financial records were repeatedly falsified to inflate his company’s revenue,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “This long-running scheme helped prop Lyons up both personally and professionally, as Worley & Obetz amassed millions upon millions in fraudulent loans. In the end, though, his actions bankrupted the business, cost hundreds of innocent people their jobs, and have landed Lyons in federal prison. The FBI is committed to holding accountable anyone engaged in such egregious financial fraud.”  

“Mr. Lyons willfully and intentionally violated his known legal duty to file a correct tax return and pay his fair share of taxes,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “His failure to report all of his income is a violation of tax laws; one that the courts do not take lightly, as evidenced by the sentence handed down today.”

The case was investigated by the Federal Bureau of Investigation, IRS Criminal Investigations, and Northern Lancaster County Regional Police Department and is being prosecuted by Assistant United States Attorney Tiwana Wright.

PHILADELPHIA – United States Attorney William M. McSwain announced that Nicholas Bufanio, 53, of Hellertown, PA pleaded guilty to one count of health care fraud before United States District Court Judge Joseph F. Leeson, Jr.

Bufanio is a doctor of chiropractic medicine, who has operated Community Chiropractic, Inc. in Bethlehem, PA, since at least 2011. The defendant submitted fraudulent claims to health insurers of approximately $236,000 for chiropractic services he did not render. He routinely submitted claims for patients who failed to appear for scheduled appointments, falsely asserting that he saw the patients and provided chiropractic care. He also submitted fraudulent claims for days when he was not even in the office.

Additionally, from November 2017 until approximately December 2018, Bufanio was convalescing at home. Although he did not see patients during this time, the defendant submitted bogus claims to health insurers pretending that he was keeping normal office hours and rendering chiropractic treatment.

“Physicians and other medical professionals who fraudulently bill insurance companies are thieves – they steal from both the companies and the honest subscribers,” said U.S. Attorney McSwain. “Dr. Bufanio was arrogant enough to think that he could get paid for doing nothing. My Office will continue to use every tool at its disposal to investigate, prosecute, and punish this type of fraud.”

“Through our criminal enforcement program, the U.S. Department of Labor, Employee Benefits Security Administration (EBSA), will vigorously pursue those who violate the criminal laws protecting private–sector employee benefit plans,” said EBSA Philadelphia Regional Director Michael Schloss.

The case was investigated by U.S. Department of Labor-Employee Benefits Security Administration, and is being prosecuted by Assistant United States Attorney M. Beth Leahy.

PHILADELPHIA – United States Attorney William M. McSwain announced that Brandon Smith, 30, of Philadelphia, Pennsylvania, was sentenced to twelve years in prison, to be followed by five years of supervised release, by United States District Court Judge C. Darnell Jones.

In November 2019, the defendant pleaded guilty to multiple criminal counts, including conspiracy to distribute and attempted possession with intent to distribute controlled substances. The charges arose from his leadership role in a large drug trafficking organization that shipped hundreds of pounds of narcotics -- including methamphetamine, cocaine, heroin, and fentanyl -- from California to Philadelphia via United States mail, from at least early 2016 until November 2017.

To obtain the narcotics, Smith and other members of the organization flew from Philadelphia to Los Angeles to purchase the drugs directly from a source in California, concealing large amounts of cash between clothing packed in their carry-on luggage. After purchasing the drugs, members of the organization shipped the narcotics in boxes addressed to businesses in the Feltonville neighborhood of North Philadelphia, and then coordinated the delivery of the drugs to various locations, so they could then be prepared for distribution.

Another leader of the drug trafficking group and a co-defendant in this case, George Felts, 33, also of Philadelphia, was previously sentenced to sixteen years in prison for similar charges.

“Smith and other members of this drug gang pumped huge quantities of deadly drugs into our community,” said U.S. Attorney McSwain. “The punishment handed down today cannot undo the damage that Smith caused, but his conviction and lengthy sentence have made Philadelphia safer. My Office is committed to aggressively investigating and prosecuting drug trafficking organizations that prey on the community.”

“Today, another defendant was sentenced to more than a decade in jail for his participation in the organized distribution of illegal and dangerous narcotics in Philadelphia neighborhoods,” said Damon Wood, Postal Inspector in Charge of the Philadelphia Division of the United States Postal Inspection Service. “I again would like to thank and congratulate the officers from the Philadelphia Police Department, the agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the prosecutors from the United States Attorney’s Office, and the Postal Inspectors from the Philadelphia Division who worked tirelessly on this case to protect the US mail system from criminal misuse and to ensure Mr. Smith faced justice for the harm he has caused to the Philadelphia community.”

The case was investigated by the United States Postal Inspection Service, with the assistance of the Philadelphia Police Department, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, and Firearms. It is being prosecuted by Assistant United States Attorney Nancy Beam Winter.

PHILADELPHIA – United States Attorney William M. McSwain announced the launch of a public awareness campaign aimed at discouraging violent crime, specifically robbery and gun crimes, throughout the Eastern District of Pennsylvania. The campaign employs targeted messaging to educate and inform the public that crimes committed with a gun can often violate federal laws, and therefore carry stiffer potential penalties than crimes prosecuted under local and state statutes. One component of the campaign is a series of public service announcements (PSAs) that will run on television, radio, and streaming platforms urging individuals to rethink committing violent crimes that could be federal offenses.

For example, under a federal statute called the Hobbs Act, passed by the United States Congress in 1946, it is a federal crime to use force or threats of force to rob a commercial business – like a pharmacy, a convenience store, or even a corner market. It does not matter whether the robber steals thousands of dollars from the cash register or nothing more than a pack of cigarettes. Because these stores operate in “interstate commerce,” the U.S. Attorney’s Office can take these cases federally. And that is exactly what it will do to get justice for the victims in these cases – store owners and their patrons who live in fear in their neighborhoods.

Violent crime, particularly gun crime, has become a pervasive issue in Philadelphia and other parts of the Eastern District of Pennsylvania. For example, in 2019, 2,181 robberies with a gun occurred in Philadelphia. So far in 2020, there have been 219 homicides, with the past two weekends in July becoming particularly violent. The U.S. Attorney’s Office has committed to a strong response to violent crime in this District. Part of that response has been to increase the number of violent crime prosecutions: in 2019, the Violent Crime Unit of the U.S. Attorney’s Office charged 53% more cases than in the previous year. Another part of the Office’s response is deterrence: the primary goal of this public awareness campaign is to put potential offenders and the community on notice and reduce violent crime throughout the District. The campaign will appear in Philadelphia and its surrounding collar counties, and will also reach audiences in Lancaster, Berks, Lehigh and Northampton counties.

The campaign will focus on informing the public of the legal consequences of committing a federal violent crime and thereby discourage potential perpetrators of violence and gun crimes by raising awareness of the potential for federal jail time. The slogan “Fed Crime Gets Fed Time,” accompanied by #FedCrimeGetsFedTime, will be deployed across social media platforms, traditional media, and public service announcements on television and radio in communities throughout the District’s nine counties.

“When criminals think there are no consequences for their actions, serious violent crime rises. That is the root of the crisis we are facing in Philadelphia today,” said U.S. Attorney McSwain. “Anyone who commits a federal violent crime in the Eastern District of Pennsylvania will feel the full force of the law. My message to would-be criminals is simple: put the guns down and think about your future.”

For more information and to see the campaign materials, visit the “Fed Crime Gets Fed Time” website.

PHILADELPHIA – United States Attorney William M. McSwain today announced that Universal Health Services, Inc. and UHS of Delaware, Inc. (together, UHS) have agreed to pay $117 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services and failing to provide adequate and appropriate services. UHS, which is headquartered in King of Prussia, Pennsylvania, owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide.

The resolution of these claims in the Eastern District of Pennsylvania is part of a comprehensive settlement between the Department of Justice and UHS, which arose out of UHS’s billing practices in multiple healthcare institutions across the United States. UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.

The government alleged that between January 2006 and December 2018, UHS facilities admitted as patients federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations. 

Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.    

“Quality mental health treatment is critical for the patients who place their trust in the hands of service providers,” said U.S. Attorney McSwain. “The allegations involved in this matter -- inappropriate billing and inadequate care – have no place in our health care system. Behavioral health service entities must have strong mechanisms in place, including appropriate supervision and oversight, to avoid fraud and abuse in order to ensure they provide the level of care that their patients deserve.”

The government’s investigation included 19 lawsuits filed under the whistleblower provision of the False Claims Act, which permits private citizens to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The global settlement with UHS involved 18 cases that are currently pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia.  As part of the resolution with UHS, the whistleblowers will receive $15,862,457.03, from the federal share of the settlement. 

“We sincerely thank the relators in these cases. Together with their lawyers, these citizens provided essential assistance to the government throughout this case. Without the willingness of relators to shed light on allegations of fraud, preserving government program funds would be far more challenging. Their efforts played a vital role in the resolution of these cases,” said U.S. Attorney McSwain. 

“The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division.  “The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.”

In connection with the settlements, UHS has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS inpatient behavioral health claims to federal health care programs.

“Today’s settlement resolves allegations of failing to provide adequate and appropriate mental health services to beneficiaries of multiple federal health care programs, to include Medicare and Medicaid,” said Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services in Philadelphia. “We will continue to work with the U.S. Attorney’s Office to investigate violations of the False Claims Act and ensure the integrity of our federal health care programs.”

The settlement with UHS was the result of a collaborative effort among numerous federal and state agencies.  The Commercial Litigation Branch of the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania handled the cases, with substantial assistance from the U.S. Attorney’s Offices for the Middle District of Florida, the Northern District of Georgia, the Eastern District of Michigan, the Western District of Michigan, the Middle District of Georgia, the Northern District of Illinois, the Middle District of North Carolina, the Western District of North Carolina, the District of Oregon, the Middle District of Pennsylvania, the Southern District of Texas, the District of Utah, the Eastern District of Virginia, the Western District of Virginia, the Northern District of Oklahoma, and the District of Wyoming, as well as the National Association of Medicaid Fraud Control Units (NAMFCU). The nationwide investigation was a coordinated effort among the DOJ Civil Frauds Division, NAMFCU, and the Office of Inspector General for the Department of Health and Human Services; the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation.

The civil settlement with UHS involved the cases that are captioned: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich). 

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

Assistant United States Attorney Charlene Keller Fullmer, Deputy Chief for the Civil Division, Assistant United States Attorney Stacey L.B. Smith, and Auditor Dawn Wiggins handled the matters filed in the Eastern District of Pennsylvania, working jointly with the Civil Frauds Division of the Department of Justice.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that physician assistant Sarah Malstrom will pay $25,000 to resolve allegations that she received kickbacks from the company formerly named Aqua Pharmaceuticals, in order to incentivize Malstrom to prescribe Aqua’s dermatology drugs.

The settlement resolves allegations that Malstrom knowingly solicited and received kickbacks from Aqua Pharmaceuticals.  Malstrom allegedly received different forms of kickbacks from Aqua, through its sales representatives and executives, such as improper in-office and out-of-office meals and food items, gift cards, and gifts, and also entered into speaking engagements, advisory boards, and consulting services in exchange for compensation intended in part to induce Malstrom to prescribe Aqua drugs. This settlement follows the resolution with the pharmaceutical company, which called for a $3.5 million payment to resolve the kickback allegations.

“Our Office is committed to ensuring the integrity of the healthcare system by investigating and challenging improper arrangements between pharmaceutical companies and healthcare providers, especially when they distort prescribing decisions made by healthcare providers,” said First Assistant U.S. Attorney Williams. “That commitment to accountability extends not just to the pharmaceutical companies, but also to the individual providers. This resolution marks another important step in that commitment and our Office’s ongoing investigation.”

“We consider kickbacks offered to healthcare providers to be an area of serious concern,” said Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services in Philadelphia. “We will continue to work with the U.S. Attorney’s Office to hold companies and providers accountable for illegal kickback conduct and to root out fraud, waste and abuse in our federal health care programs.”

"I commend the Department of Justice and the U.S. Attorney’s Office for continuing to be vigilant in holding health care providers accountable to ensure taxpayer dollars are appropriately utilized,” said Lt. Gen. Ron Place, director of the Defense Health Agency. “The efforts of the Department of Justice strengthen the protection of health care benefits our service members, veterans and their families receive. The Defense Health Agency continues its commitment to work closely with the Justice Department, and other state and federal agencies to investigate all those who participate in fraudulent practices.”

This investigation was conducted with the Office of the Inspector General of the Department of Health and Human Services and the Defense Health Agency. For the United States Attorney’s Office, Assistant United States Attorney Anthony D. Scicchitano and Auditor Dawn Wiggins handled the investigation and settlement.

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

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Michael Shore, 35, of Richboro, Pennsylvania, was sentenced to 180 months in prison, lifetime supervised release, a prohibition on contact with any of his victims or their families, and a lifetime restriction on his Internet usage by United States District Court Judge Timothy R. Savage for manufacturing child pornography involving multiple victims, as well as enticing a minor to engage in illicit sexual conduct. His sentence also requires him to register as a sex offender under Megan’s Law for the rest of his life.

In October 2017, Shore was convicted of manufacturing child pornography and exploitation of four minor victims on multiple occasions over a span of almost two years. At least two of his victims he met at Comic-Con, which is an annual entertainment and comic book convention held in San Diego, where he worked with his family. His victims included a 12-year old girl in the 6th grade, two teenaged girls, and one child who is on the autism spectrum. Shore corresponded with these girls online at all times of the day and night, and coerced them to self-produce sexually explicit images and send them to him. For one child, he then distributed her images out over the Internet – showing her face and naked body - in an effort to engage in sexual activity with yet another person online. After communicating at length with one of his victims, Shore traveled from Pennsylvania to Florida and engaged in sexual intercourse with her on multiple occasions.

The Federal Bureau of Investigation was called in by local authorities after the 12-year old victim’s mother alerted police. A search warrant was executed on Shore’s home, and federal agents recovered more than 2,500 images of child pornography that Shore had downloaded and saved from the Internet over an eight year period. Shore confessed to the FBI on the day they searched his home, and later pleaded guilty to a 10-count federal indictment charging him with manufacturing, distributing, and possessing child pornography, as well as enticing a minor to engage in illicit sexual conduct.

“Michael Shore is a serial sexual predator who took advantage of some of the most vulnerable among us – young children, one of whom has autism. This criminal behavior is reprehensible,” said U.S. Attorney McSwain. “Further, at least one of these children will continue to be victimized for years to come because Shore shared explicit images of her on the Internet with others. Fortunately, he will now sit behind bars where he belongs for many years, unable to victimize anyone else in the meantime.”

“Child exploitation is among the most heinous crimes we investigate,” said Michael J. Driscoll, special agent in charge of the Philadelphia Division.  “Shore robbed these young girls of their innocence and childhood.  Although today’s sentence cannot repair the damage Shore caused, it sends the message to other predators that the FBI remains committed to hunting them down and holding them accountable.”

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 Saint Mary’s County Sheriff’s Office in Maryland. It is being prosecuted by Assistant United States Attorney Michelle Rotella.

To the Residents of the Eastern District of Pennsylvania:

I wanted to wish you and your families a wonderful holiday weekend, as we celebrate the birth of our nation on July 4th.  The last four months have been a time for critical thinking about a lot of things, including our values.  Self-examination is a good thing:  it helps us, individually and as a nation, to improve.  And putting that sort of meaningful, critical thinking into action is only possible in a free and democratic society like ours.  It is one of the defining characteristics of America.

Two years ago, I reflected on the meaning of the American experiment at my investiture, and here is what I said:

“I love this country.  I love what she stands for.  The history of the world is largely a history of tribal warfare, monarchy, grinding poverty and misery.  And then . . . there’s America.  America is the greatest force for good in the history of the world.  It is a country founded on ideas.  And not just any ideas, but the right ideas – ideas that have unlocked human potential and enabled human flourishing.  Self-government, freedom, liberty, individual rights, freedom of speech, freedom of thought, freedom of religion, free markets, capitalism, economic opportunity, and equality under the law.” 

Those words were true then, they are true today, and they will remain true as we embrace the future.  We have a lot of important work left to do to make our country better.  We cannot be complacent.  But this holiday weekend is an appropriate time to focus on what unites us as Americans.  God Bless you and your families, and God Bless the United States of America.

Sincerely,

Bill McSwain

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Scott Korn, 57, of Villanova, Pennsylvania, was sentenced to one year and one day in prison, three years of supervised release and a $50,000 fine by United States District Judge Eduardo C. Robreno for false statements and financial fraud.

In August 2019, Korn pleaded guilty to an Indictment charging him with concealment of assets in a bankruptcy proceeding, and swearing a false oath or account. Those charges arose from the following set of facts. In 2009, a lawsuit was filed against the defendant and several of his companies for breach of contract among other issues. In April 2014, the case proceeded to trial in the Philadelphia Court of Common Pleas and the jury returned a verdict against Korn and his companies in the amount of approximately $2.4 million.

Over the course of the next few days following the verdict, Korn purchased a BMW X3, a Porsche 911, a Porsche Cayman, charging all three luxury vehicles to his American Express credit card. Additionally, Korn purchased a cashier’s check for almost $200,000, payable to himself, drawn on his personal bank account. The defendant cashed this check the following day at a check casher, receiving approximately $196,000 in cash and paying a check cashing fee of about $4,000. He then filed for Chapter 11 bankruptcy.

Under the bankruptcy code, debtors must complete financial Schedules, including a schedule listing all of their personal property (assets) , and a Statement of Financial Affairs which discloses all financial data. Debtors must also file a Declaration, under penalty of perjury, that they have read the schedules and summary they are submitting and that all are true and correct to the best of their knowledge. In Korn’s filings, he did not list the recently purchased luxury vehicles among his assets or in his schedule of personal property, but he did include American Express in his schedule of creditors, along with the total debt that he owed American Express – an amount that included the purchase price of the cars – without revealing  what was purchased on this credit card. The defendant also did not disclose the recent liquidation of nearly $200,000 in cash from his bank account, instead listing that bank account with an approximate balance of only $9,300. Korn also omitted other assets from his bankruptcy statements including a 21-foot ski boat and two wave runners. At a later proceeding in the bankruptcy, Korn swore an oath under penalty of perjury and testified that he did not own any carsand only had an old motorcycle and a leased Honda.

“Mr. Korn abused the bankruptcy court system in an effort to enrich himself while cheating his creditors,” said First Assistant U.S. Attorney Williams. “He tried to play games to avoid fulfilling his fiduciary obligations, but the dedicated investigators on this case uncovered his lies. Today’s sentence provides justice to those Mr. Korn attempted to swindle.”

“Perjury and concealment of assets in a bankruptcy case are serious crimes,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Scott Korn sought to use the federal courts to defraud his creditors and today’s sentence holds him accountable. It should also serve as a warning to anyone else looking to game the system. Expect to be caught and prosecuted.”  

The case was investigated by Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Karen Grigsby.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that George Felts, 33, of Philadelphia, Pennsylvania, was sentenced to sixteen years in prison, to be followed by five years of supervised release, by United States District Court Judge C. Darnell Jones.

In November 2019, the defendant pleaded guilty to multiple counts of controlled substance offenses including conspiracy to distribute and possession with intent to distribute controlled substances. The charges arose from his leadership role in a large drug trafficking organization which shipped hundreds of pounds of narcotics including methamphetamine, cocaine, heroin, and fentanyl from California to Philadelphia via United States mail, from at least early 2016 until November 2017. To obtain the narcotics, Felts and other members of the organization flew from Philadelphia to Los Angeles to purchase the drugs directly from a source in California, concealing large amounts of cash between clothing packed in their carry-on luggage. After purchasing the drugs, members of the organization shipped the narcotics in boxes addressed to businesses in the Feltonville neighborhood of North Philadelphia, and then coordinated the delivery of the drugs to various locations, so they could then be prepared for distribution.

“Felts and other members of this drug organization pumped huge quantities of highly toxic and often deadly drugs into our community,” said First Assistant U.S. Attorney Williams. “Simply put, drug trafficking delivers destruction to our neighborhoods. The sentencing of Mr. Felts cannot undo the damage he caused, but his conviction and lengthy sentence have made our community safer.  When it comes to drug trafficking, our Office is determined to investigate and convict these criminals, and put them behind bars."

“Today, a dangerous individual was sentenced to sixteen years in prison for his role in importing large quantities of illegal and dangerous narcotics to the streets of Philadelphia,” said Damon Wood, Postal Inspector in Charge of the Philadelphia Division of the United States Postal Inspection Service.  “I would like to thank and congratulate the Philadelphia Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Attorney’s Office, and the Postal Inspectors who worked tirelessly on this case to protect the US mail system from criminal misuse and to ensure Mr. Felts faced justice for the harm he has caused to the Philadelphia community.”

The case was investigated by the United States Postal Inspection Service, with the assistance of the Philadelphia Police Department, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, and Firearms. It is being prosecuted by Assistant United States Attorney Nancy Beam Winter.

The United States announced yesterday that the U.S. District Court for the Eastern District of Pennsylvania has approved a consent order resolving allegations that three defendants — Heritage Senior Living LLC; Westrum Hanover LP; and GAHC3 Bethlehem PA ILF LLC — violated the Fair Housing Act by discriminating against residents and prospective residents with disabilities at Traditions of Hanover (Traditions), a senior housing apartment complex in Bethlehem, Pennsylvania.

The lawsuit, which the United States filed on May 13, 2020, alleges that from at least 2005 to the present, defendants created and implemented a series of discriminatory tenant occupancy and eligibility policies and practices that discriminate against persons with disabilities, including requiring residents to sign a lease that imposes conditions such as requiring an initial physical assessment as a requirement of tenancy and potential eviction if a resident develops certain health conditions. In addition, Traditions maintained policies that required residents who use wheelchairs to transfer from their wheelchairs into a dining room chair and required residents who used motorized and non-motorized wheelchairs to pay a non-refundable deposit. In addition, the complaint alleges that the defendants provide transportation as an amenity and that until 2013, that transportation was inaccessible to people who used wheelchairs, in violation of the Fair Housing Act. 

Under the consent order, defendants will pay a minimum of $250,000 and a maximum of $325,000 into a settlement fund to compensate residents and prospective residents who were harmed by these policies. Defendants will also pay a $55,000 civil penalty to the United States. In addition, defendants will appoint a Fair Housing Act compliance officer at Traditions and other senior living facilities, and will implement new resident policies, including a new reasonable accommodation policy and a new motorized wheelchair policy.

“The Fair Housing Act protects the right of individuals with disabilities to enjoy a home to the same extent as everyone else. Common decency, our shared humanity, our nation’s commitment to justice, and our inalienable right to pursue happiness demands no less, and so does the law. Discriminating against people with disabilities is wrong and illegal, and the Justice Department will vigorously continue to enforce the Fair Housing Act to combat this unlawful conduct and obtain relief for its victims,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “This consent order will ensure that all prospective and current residents at Traditions and other senior living facilities are treated equally and that victims of past discrimination receive compensation for the harms they have suffered.”

“Seniors should not have to worry about losing their lease simply because they become disabled,” said U.S. Attorney McSwain for the Eastern District of Pennsylvania. “The Fair Housing Act protects them, and everyone, from discrimination in housing, and my office will continue to ensure that apartment buildings follow the law.”

Individuals who are entitled to share in the settlement fund will be identified through a process established in the consent order.  Persons who believe that they or their family members were subjected to unlawful discrimination at Traditions should contact the Justice Department toll-free at 1-800-896-7743 mailbox #92 or e-mail the Justice Department at fairhousing@usdoj.gov.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov, or contact the Department of Housing and Urban Development at 1-800-669-9777 or through its website at http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp.

PHILADELPHIA – United States Attorney William M. McSwain announced today that the United States has reached a settlement agreement to resolve allegations of disability discrimination filed in a civil lawsuit against Heritage Senior Living LLC, its owner, and former owner. The complaint alleges that Traditions of Hanover, an apartment complex for seniors located in Bethlehem, Pennsylvania, discriminated against residents and prospective residents based on disability in violation of the federal Fair Housing Act, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.

According to the complaint, since at least 2013, Traditions of Hanover required residents to be able to “live independently” as a condition of their lease. In doing so, the apartment complex allegedly decided who could live independently, rather than allowing residents and their families to decide for themselves. Traditions of Hanover allegedly reserved its right to assess residents’ physical health, and to terminate leases based on health condition. The apartment complex also allegedly screened prospective residents to determine if they were appropriate to live in the building based on their health condition.

In addition, Traditions of Hanover allegedly charged residents a fee to use motorized wheelchairs, prohibited residents from using wheelchairs in the common dining area, and, before 2013, offered transportation services that were not accessible to wheelchair users.

The United States and defendants have reached a settlement to resolve the case through a consent order. Under the order, defendants must establish a tiered settlement fund of up to $325,000 to compensate persons harmed by the policies and practices, as well as pay a penalty of $55,000. The United States and defendants adjusted the deadlines in the consent order to accommodate concerns about the COVID-19 pandemic.

Besides the monetary payments, the consent order requires defendants to modify their policies, appoint a compliance officer, train employees about the Fair Housing Act, and provide periodic compliance reports to the United States. These requirements apply to 16 different facilities managed by Heritage Senior Living, including one in Bucks County (The Birches at Newtown); four in Berks County (Keystone Villa at Douglassville, The Manor at Market Square in Reading, Chestnut Knoll in Boyertown, and Keystone Villa at Fleetwood); and one in Montgomery County (The Birches at Harleysville). The consent order prohibits defendants from raising rent or fees to pay for any of these obligations, or to pay for the settlement fund.

“Seniors should not have to worry about losing their lease simply because they become disabled,” said U.S. Attorney McSwain. “The Fair Housing Act protects them, and everyone, from discrimination in housing, and my Office will continue to ensure that apartment buildings follow the law.”

“Discriminating against people with disabilities is wrong and illegal, and the Justice Department will vigorously enforce the Fair Housing Act to combat this unlawful conduct and obtain relief for its victims,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “This consent order will ensure that all prospective and current residents at Traditions and other senior living facilities are treated equally and that victims of past discrimination receive compensation for the harms they have suffered.”

Individuals who are entitled to share in the settlement fund will be identified through a process established in the consent order. Persons who believe they were subjected to unlawful discrimination at Traditions of Hanover should contact the Justice Department toll-free at 1-800-896-7743 mailbox #92 or e-mail the Justice Department at fairhousing@usdoj.gov.

The case is docketed as United States v. Heritage Senior Living, LLC, et al., Civil Action No. 20-cv-2272 (E.D. Pa.). There has been no determination of civil liability. The settled civil claims are allegations only.

Assistant United States Attorney Michael S. Macko handled the case in the Eastern District of Pennsylvania, working jointly with the Civil Rights Division of the Department of Justice.

PHILADELPHIA – United States Attorney William M. McSwain announced that Juan Caceres, 30, of Elkins Park, PA; Jose M. Suarez-Mendosa, 29, of Philadelphia, PA; Jerson David Diaz, 31, of Philadelphia, PA; Ezequiel Regalado-Rosario, 45, of Philadelphia, PA; Ramcel Duarte-Rodriguez, 21, of Philadelphia, PA, and Juan Francisco Regalado-Ferreras, 27, of Philadelphia, PA, were arrested and charged by criminal complaint on charges of possession with intent to distribute various amounts of heroin as associates of the Caceres drug trafficking organization.

During the execution of simultaneous search warrants in June, Caceres, Regalado-Rosario, Duarte-Rodriguez and Regalado-Ferreras were arrested at a residence in the 1000 block of Saint Vincent Street in Northeast Philadelphia and charged with possession with intent to distribute one kilogram or more of heroin. At the same time, Suarez-Mendosa and Diaz were arrested at a residence in the 2900 block of Teesdale Street, also in Northeast Philadelphia, and charged with possession with intent to distribute 100 grams or more of heroin.

All six defendants made their initial appearances in federal court last week. Caceres – the ring-leader of the group – Diaz, Suarez-Mendosa, and Regalado-Rosario were all detained by the court until trial. Duarte-Rodriguez and Regalado-Ferreras will appear in court for their detention hearings on Friday, June 26. A seventh defendant, Braulizabeth Reyes-Villanueva (identified as Person #1 in the criminal complaint), 31, of Philadelphia, PA, was charged elsewhere with conspiracy to distribute one kilogram or more of heroin, was arrested separately and also made an appearance in court last week.

In a related investigation, four other defendants, Tennille Lee, 43, of Atlantic City, NJ; Ebony Chapman, 40, of Absecon, NJ; Andrew Prater, 38, of Atlantic City, NJ; and Theresa Lockhart, 28, of Millville, NJ; were charged elsewhere by the Atlantic County Prosecutor’s Office and arrested by authorities in New Jersey in June as part of a joint investigation with members of the Liberty Mid-Atlantic HIDTA (High Intensity Drug Trafficking Area) Task Force.

According to the federal criminal complaint, from February until June 2020, the defendants operated a drug trafficking scheme to package, store and distribute large amounts of heroin in Philadelphia, PA; Elkins Park, PA; Atlantic City, NJ; and other locations in the region. During the execution of the Teesdale Street and Saint Vincent Street search warrants, agents discovered a large-scale heroin packaging operation at the residence on Saint Vincent Street, including tens of thousands of packets of heroin, grinders, scales and other paraphernalia, as well as a loaded Glock 42 firearm with an additional box of 50 rounds. Agents also found two children, approximately two months old and four years old, apparently living in the drug-infested residence.

During the investigation, agents allegedly observed Reyes-Villanueva and Caceres supplying Lee with packages of drugs on multiple occasions in an alleyway behind the Teesdale Street residence. Lee would transport the drugs from Philadelphia in her vehicle to a stash house in Atlantic City. From there, Lee, Chapman, Prater and Lockhart were also allegedly involved in a drug distribution conspiracy in New Jersey working for a different organization. According to the complaint, Reyes-Villanueva is romantically linked with Caceres and is a major facilitator in his organization with multiple vehicles used by members of the group registered in her name.

“As alleged in the criminal complaint, Caceres and his cohorts pumped huge quantities of deadly heroin onto the streets of our city and region,” said U.S. Attorney McSwain. “Drug trafficking is an inherently dangerous business that preys on individuals in addiction and puts innocent bystanders, like the two young children found living in one of these drug dens, in jeopardy. Our office is determined to work with our law enforcement partners at all levels and in other jurisdictions to investigate and convict those who are poisoning our community with deadly drugs and put them where they belong -- behind bars.”

“Those who profit from drug trafficking have no regard for the incredible damage they’re doing to our communities,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “As alleged, Caceres and his crew pushed vast amounts of heroin into Philadelphia, Atlantic City, and surrounding areas, a region hit hard by the opioid epidemic. The FBI will continue to work with our federal, state, and local partners to take drug traffickers and their dangerous product off the streets.”

“This investigation proves once again that drug traffickers do not allow state lines to interfere with their illegal operations,” said Susan A. Gibson, Special Agent in Charge of the DEA’s New Jersey Division. “It is the mission of law enforcement at all levels to keep our communities safe. Those choosing to distribute these deadly narcotics need to know we will go wherever the investigation takes us to carry out that mission.”

“Atlantic County is a part of the epi-center of the opioid epidemic in this country,” said Atlantic County Prosecutor Damon G. Tyner. “This operation is exactly the type of collaborative effort that we envisioned when the Atlantic County Prosecutor’s Office sought to be included in the Liberty Mid-Atlantic High Intensity Drug Trafficking Area.  The ability to work with multiple agencies to disrupt the illegal activity of large drug trafficking organizations and make our community safer is our mission every day.” 

If convicted, the defendants arrested in the Teesdale residence, Suarez-Mendosa and Diaz, face a maximum possible sentence of 40 years in prison, and the defendants arrested in the Saint Vincent Street residence, Caceres, Regalado-Rosario, Duarte-Rodriguez and Regaldo-Ferreras, as well as Reyes-Villanueva, face a maximum possible sentence of lifetime imprisonment.

The case was investigated by the Federal Bureau of Investigation Philadelphia Division, the Philadelphia Police Department, the Pennsylvania Attorney General’s Office, the Montgomery County District Attorney’s Office Detectives – Violent Crime Unit, and the Cheltenham Police Department, with assistance from the Federal Bureau of Investigation Newark Division – Atlantic City Resident Agency, the Drug Enforcement Administration Atlantic City office and the Atlantic County Prosecutor’s Office, and is being prosecuted by Assistant United States Attorney Joseph Labrum.

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 Stalyn Morales, 42, of Easton, Pennsylvania, pleaded guilty to one count of submitting false claims to the United States and one count of aggravated identity theft before United States District Court Judge Jeffrey L. Schmehl.

The charges stem from the defendant’s participation in a scheme to obtain federal income tax refunds using other individuals’ stolen identities. As he admitted in court, the defendant sought more than $295,000 in fraudulent refunds from the IRS.

Investigators discovered the fraud through an analysis of the computers and computer servers located in the defendant’s business, MDFA Auto, in Allentown, PA. Evidence recovered from the shop showed that an IP address associated with the business was the source of fraudulent electronic tax filings. Also found were a digital cache of stolen identities, fraudulent taxes, falsified identity documents, and a spreadsheet documenting this criminal activity. Nearly all of the more than $295,000 in requested refunds were not issued to Morales because the IRS detected the fraud in time to deny most of the requests. As part of his plea, Morales will be ordered to pay restitution of the funds that were disbursed before the fraud was detected.

“Morales’ scheme victimized honest taxpayers in two ways: first, by stealing their identities and second, by trying to rip off the federal government,” said U.S. Attorney McSwain. “Now, he will face the consequences, as will anybody else who attempts to carry out a similar scheme.”

“Mr. Morales sought to willfully defraud the United States Treasury. He did so with a blatant disregard for the victims of his scheme,” said IRS Criminal Investigation SpecialAgent in Charge Thomas Fattorusso. “His willful act of filing fraudulent tax returns using stolen identities is a felony offense; one that has severe consequences.”

The defendant faces a maximum possible sentence of seven years in prison, four years of supervised release, and up to a $500,000 fine.

The case was investigated by the Internal Revenue Service, Criminal Investigation Division, and is being prosecuted by Assistant United States Attorney David J. Ignall.

PHILADELPHIA, PA – United States Attorney William M. McSwain announced today that Tayanna Bowman, 23, of Philadelphia, Pennsylvania, has been arrested and charged with one count of distribution and attempted distribution of child pornography. The charges arise out of the defendant’s alleged distribution of images and videos -- including to an undercover federal agent -- on a file sharing platform over the internet. 

At the time of the alleged offenses, Bowman worked with some of the most vulnerable members of society – autistic children. She was employed as a behavioral health technician at ChanceLight Autism Services in Havertown until June 12, 2020. Previously, she was employed as a teaching assistant at Cynthia’s Little Treasures Day Care on North 63rd Street in West Philadelphia.

“The allegations in this case are disturbing,” said U.S. Attorney McSwain. “Any child exploitation case is a very serious matter, but here, the defendant was working with vulnerable, autistic children while she was engaged with an online community of individuals interested in the sexual abuse and exploitation of children -- and illegally distributing child pornography to that community. It is our duty to protect the most vulnerable members of society and we will continue to uphold that duty by bringing to justice anybody who preys upon minor children.”

“It’s extremely concerning when someone allegedly distributing child pornography also works with children,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “The FBI is committed to identifying, locating, and holding responsible anyone who circulates this vile material. In doing so, they extend the trauma of the children victimized and drive a demand for additional abusive content.” 

If convicted, Bowman faces a statutory maximum sentence of 20 years in prison, a lifetime of supervised release, and a $250,000 fine.

The case is being investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Kelly Harrell.

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 David Elmakayes, 24, of Philadelphia, PA, was charged by criminal complaint with malicious damage of property with an explosive device and possession of a firearm by a convicted felon. The defendant is currently in federal custody and will make his initial appearance in federal court tomorrow. The government will be seeking the defendant’s detention pending trial on these charges.

Following peaceful protests on May 30, 2020, in response to the killing of George Floyd in Minneapolis, MN, civil unrest began to unfold in Philadelphia later that day and continued for several days thereafter. Widespread looting, burglary, arson, destruction of property, and other violent acts occurred.

The complaint alleges that on June 3, 2020, at approximately 11:45 p.m., Elmakayes used an explosive device to heavily damage an automated teller machine (ATM) on the sidewalk at 217 East Westmoreland Street in North Philadelphia. When he was arrested a short time later, he had three more explosive devices in his possession, as well as a .32 caliber pistol.

“Blowing up an ATM and illegal firearms possession are not acts of protest against perceived injustice. They are federal felonies and will be treated as such,” said U.S. Attorney McSwain. “As alleged, Elmakayes tried to take advantage of the unrest in Philadelphia to get away with a violent crime. Now he will face the consequences.”

“It is always disconcerting when individuals take advantage of sensitive situations to destroy property and terrorize our communities,” said Acting Special Agent in Charge John Schmidt, ATF Philadelphia Field Division. “When individuals choose to recklessly put innocent lives in danger, we commit our resources and unique capabilities in working with our law enforcement partners to bring those responsible to justice. This arrest is an example of how a joint effort with the Philadelphia Police Department and the Philadelphia Fire Marshal’s office did exactly that. We will continue to work together to ensure the safety of our citizens.”

If convicted, the defendant faces a mandatory minimum of fifteen years’ imprisonment, three years’ supervised release, and a $500,000 fine.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Philadelphia Police Department, and the Philadelphia Fire Marshal’s Office, and is being prosecuted by Assistant United States Attorney Joseph A. LaBar

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 Timothy Woll, 54, of Sinking Spring, Pennsylvania, has pled guilty to child exploitation charges before United States District Court Judge Edward G. Smith.

Woll was charged by Information in March 2020 with transportation of child pornography and access with intent to view child pornography. The charges arise from the defendant’s intent to view and to transport images of child pornography from his personal, home computer onto his personal Microsoft OneDrive cloud storage account in January 2019. An investigation of the defendant’s computer led to the discovery that his OneDrive account contained nearly 200 unique images of child pornography. During the time of this investigation and Woll’s subsequent arrest, the defendant was employed as a police lieutenant and evidence custodian for the Cumru Township Police Department in Berks County.

“This is an appalling case,” said U.S. Attorney McSwain. “The defendant was a member of a law enforcement organization charged with enforcing the law and protecting the public, but instead he chose to break the law and acquire child pornography. We stand ready with our federal and local partners to identify and prosecute all those who would prey upon minor children, no matter who they are.”

“The FBI works every day to track down those who seek out child pornography, because the demand for these depraved images leads to the continued sexual exploitation of young children,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “The fact that a fellow law enforcement officer was involved with such material was extraordinarily disheartening to all of us. We and our partners will never stop working to save kids from physical and emotional harm.”

Woll faces a five year mandatory minimum term of imprisonment and a statutory maximum sentence of 40 years, up to a lifetime of supervised release, and a $500,000 fine.

The case was investigated by the Federal Bureau of Investigation and the Berks County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Kelly Harrell.

PHILADELPHIA – United States Attorney William M. McSwain announced that Lore-Elisabeth Blumenthal, 33, of Philadelphia, PA has been charged by criminal complaint for the arson of two Philadelphia Police Department (PPD) vehicles.

The defendant is currently in federal custody and had her initial appearance in federal court yesterday. The government will be filing a motion for the defendant to be detained pending trial.

Following peaceful protests 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 in Philadelphia that resulted in widespread looting, burglary, arson, destruction of property, and other violent acts.

On that day, two vehicles, one PPD sedan (number 2514) and one PPD sport utility vehicle (number 1612), were parked on the north side of City Hall in Philadelphia. During the violent episodes that began around City Hall that afternoon, Blumenthal allegedly set fire to both vehicles. According to the complaint, various videos taken at the scene captured the defendant wearing protective goggles and gloves, taking a flaming piece of wooden police barricade from the rear window of the PPD sedan that was already on fire, and then shoving the flaming wood into the PPD SUV that was not on fire. Within minutes, the PPD SUV was also completely engulfed in flames. As result of the fires, both PPD vehicles were destroyed.

“We at the U.S. Attorney’s Office fully support the First Amendment right of the people to assemble peaceably and to petition their government. But torching a police car has nothing to do with peaceful protest or any legitimate message. It is a violent and despicable act that will be prosecuted in this District to the fullest extent of the law,” said U.S. Attorney McSwain. “Anybody who engaged in such acts can stand by to put your hands behind your back and head to federal prison. We are coming for you.”

“During the past several weeks, multitudes of people peacefully and lawfully exercised their First Amendment right to protest,” said Philadelphia Police Commissioner Danielle Outlaw. “However, there were individuals who chose to use the protests as an opportunity to engage in criminal activity. Some of these individuals’ actions were malicious, destructive, and could have resulted in critical injuries to others. We are privileged to have worked, and will continue to work, with our partners in law enforcement to investigate, identify and hold accountable the persons who committed these unlawful acts.”

“Our communities deserve to be safe from these types of violent crimes,” said Acting Special Agent in Charge John Schmidt. “Everybody deserves to be safe from violent criminals utilizing dangerous methods to destroy our neighborhoods and property. ATF will always work with our local, state and federal partners to investigate and arrest the criminals who choose to use arson to commit their crimes and terrorize the public.”

“Masses of people took to the streets of Philadelphia on May 30, exercising their right to peacefully protest,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “They were there to send a message in which they truly believed. Sprinkled among the crowd, though, were agitators, whose sole purpose was to commit crimes and cause chaos. As alleged, Blumenthal came prepared for just that, carrying out these arsons that destroyed property and put many lives at risk. Sadly, such acts also hijacked the message of the day’s demonstrators, whose calls for change were obscured for a time by the smoke from all those fires. Working with our law enforcement partners, the FBI is committed to bringing to justice those responsible for violent acts during the otherwise peaceful protests in Philadelphia.”

“Homeland Security Investigations fully respects the rights of all people to voice their opinion without interference, including through peaceful assembly and protest,” said Brian A. Michael, Special Agent in Charge for HSI Philadelphia.  “Unfortunately, a number of protestors enticed violence that resulted in destruction of property throughout the City of Philadelphia.  In instances like these, HSI works closely with federal, state, and local law enforcement partners to ensure those who inflict damage that impacts the safety and security of our community are held accountable.”

If convicted, the defendant faces a maximum possible sentence of eighty years in prison, followed by three years of supervised release, and a fine of up to $500,000.

The case was investigated by the Federal Bureau of Investigation, Homeland Security Investigations, the Bureau of Alcohol, Tobacco, and Firearms, the Philadelphia Police Department and the Philadelphia Fire Marshal's Office, with assistance from the New Jersey Office of Homeland Security and Preparedness, and is 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 announced that Peter Fratus, 39, of West Dennis, Massachusetts, was arrested and charged by criminal complaint with sending threatening emails to Philadelphia Police Commissioner Danielle Outlaw, in violation of 18 U.S.C. § 875, which prohibits transmitting threatening communications in interstate commerce.

After his arrest, Fratus made his initial appearance today in the U.S. District Court for the District of Massachusetts, prior to his transfer to the Eastern District of Pennsylvania. The U.S. Attorney’s Office for the Eastern District of Pennsylvania will also be filing a motion seeking detention of the defendant pending trial.

The criminal complaint in this case alleges that on June 6, 2020, the defendant sent two emails to the Philadelphia Police Commissioner’s email address. Both emails allegedly contained racist, offensive, and threatening language, with one communication asking where Commissioner Outlaw lives. The complaint further states that an investigation by the FBI determined the originator of the emails was Fratus and forensic evidence reinforced that Fratus sent both emails.

“As alleged in the criminal complaint, Peter Fratus’ racist threats towards Commissioner Outlaw were vile and disturbing,” said U.S. Attorney McSwain. “We take such threats very seriously, and let this be a warning to anyone who might feel the urge to fire off an online threat directed at a public official: we will trace your digital footprint, track you down and hold you accountable.”

“While the First Amendment gives us the right to express our own opinions, violent physical threats are certainly not protected speech,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “When someone threatens the life of another person, it’s a clear red flag and we have to take their despicable words at face value. Today’s arrest of Peter Fratus demonstrates the FBI’s resolve to investigate and bring to justice anyone who crosses this line.”

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

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

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

A Lancaster County, Pennsylvania man pleaded guilty today to engaging in illicit sexual conduct in a foreign place.

Assistant Attorney General Brian A. Benczkowski 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.

Gregory Dow, 61, pleaded guilty to four counts of engaging in illicit sexual conduct in a foreign place, before U.S. District Court Judge Edward G. Smith. Sentencing is set for Sept. 29, 2020.  

According to the plea agreement, Dow, an American citizen, traveled to the Republic of Kenya in 2008 to start an orphanage which came to be known as the Dow Family Children’s Home.  While running the orphanage with his wife, he sexually abused, on multiple occasions, four minor girls between October 2013 and September 2017.  During this time period, he maintained ties to the United States.  

The FBI’s Philadelphia Field Office conducted the investigation with assistance from Kenyan authorities and local law enforcement in Lancaster County, Pennsylvania.  Trial Attorneys Lauren S. Kupersmith and Lauren E. Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Timothy M. Stengel of the Eastern District of Pennsylvania are prosecuting the case.

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 CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

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 Vladimir Penda, 27, of the country of Montenegro, entered a plea of guilty before United States District Court Judge Harvey Bartle III on charges of conspiracy to possess with intent to distribute 5 kilograms or more of cocaine on a vessel subject to the jurisdiction of the United States.

In 2019, Penda, a crew member who worked on board the shipping vessel MSC Gayane as the ship’s fourth engineer, conspired with others to engage in bulk cocaine smuggling. On multiple occasions during the MSC Gayane’s voyage at sea, crew members, including Penda, helped load bulk cocaine onto the vessel from speedboats that approached under cover of darkness, traveling at high speeds. Crew members used the Gayane’s crane to hoist cargo nets full of cocaine onto the vessel and then stashed the drugs in various shipping containers.

On June 17, 2019, federal, state, and local law enforcement agents boarded the MSC Gayane when it arrived at Packer Marine Terminal in Philadelphia and seized approximately 20 tons of cocaine on the ship, with a street value of over $1 billion. This was one of the largest drug seizures in U.S. history.

“Federal agents found nearly 20 tons of cocaine hidden on this ship when it arrived in the port of Philadelphia in June 2019,” said U.S. Attorney McSwain. “Over the past year, prosecutors in my Office, in conjunction with our partner agencies, have been working non-stop to pursue justice in this case in order to protect our district and our country. We want to send a strong message to criminals around the world that Philadelphia is not a safe harbor for their deadly drug trafficking.”

“Mr. Penda’s guilty plea is a testament to Homeland Security Investigations commitment to holding all those involved in the transnational drug smuggling investigation aboard the MSC Gayane accountable,” said Brian A. Michael, Special Agent in Charge for HSI Philadelphia. “HSI, in collaboration with CBP, the Coast Guard, and our other federal, state and local law enforcement partners, are committed to the detection and disruption of transnational drug smuggling, and will continue to work in concert with the U.S. Attorney’s Office for the Eastern District of Pennsylvania to keep our communities safe.”

“Mr. Penda’s plea agreement reinforces the notion that there are severe consequences for trafficking large amounts of dangerous drugs, such as this record-breaking cocaine seizure, into our communities,” said Casey Durst, CBP’s Director of Field Operations in Baltimore. “Customs and Border Protection remains steadfast on our nation’s borders, and arm-in-arm with our federal, state and local law enforcement partners, to protect our communities.”

The defendant faces a maximum possible sentence of lifetime imprisonment.

The case is being investigated by Homeland Security Investigations and the United States Customs and Border Protection, together with a multi-agency team of federal, state, and local partners.

PHILADELPHIA – United States Attorney William M. McSwain announced that Gregory Dow, 61, of Lancaster, PA entered a plea of guilty before United States District Court Judge Edward G. Smith on four counts of engaging in illicit sexual conduct with a minor in a foreign place, stemming from his operation of an orphanage in Kenya.

In early 2008, Dow and his family traveled from Lancaster County to the Republic of Kenya to start an orphanage. The orphanage, which came to be known as the Dow Family Children’s Home, was established in Bomet County, Kenya around April 2008. The defendant purported to be a Christian missionary who cared for these children and asked them to call him “Dad.” But instead of being a father figure, he preyed on their youth and vulnerability. The Dow Family Children’s Home remained in operation until September 2017, at which time Kenyan authorities suspected that Dow had sexually abused children in his care. Dow fled Kenya when the allegations came to light, returning to Lancaster County.

Acting on a tip, the Federal Bureau of Investigation (FBI) investigated the allegations and determined that Dow had sexually abused at least four teenage girls between October 2013 and September 2017. Two of the girls were as young as 11 years old when the abuse began. The defendant’s wife even transported the victims to a medical clinic to have birth control devices implanted into their arms so that Dow could perpetrate his crimes without fear of impregnating his victims. In July 2019, he was charged in a four count Indictment. Today, the defendant pleaded guilty to all counts.

“Gregory Dow hid behind his supposed faith on the other side of the world, hoping no one in the U.S. would know or care about the children he abused. He was wrong,” said U.S. Attorney McSwain. “Holding those accountable who sexually abuse children, no matter where their crimes occur, will continue to be a top priority of my Office and the entire Department of 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. Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

The investigation was conducted by the FBI with assistance from Kenyan authorities, the Lancaster City Bureau of Police and the East Hempfield Township Police Department. The case is being prosecuted by Assistant United States Attorney Timothy Stengel of the Eastern District of Pennsylvania and Department of Justice Trial Attorneys Lauren Britsch and Lauren Kupersmith of the Child Exploitation and Obscenity Section (CEOS).

PHILADELPHIA – United States Attorney William M. McSwain announced that Metro Beauty Academy, LLC (“MBA”) has agreed to pay $425,000 to resolve allegations that the school falsely sought federal student aid for students ineligible to receive such aid.

MBA is a private, for-profit beauty school with its principal office and campus located in Allentown, PA. Since May 2007, MBA has operated various educational and technical programs, such as cosmetology, esthetics, and massage therapy. MBA offers financial aid to its students through various federal financial aid programs, including Federal Pell Grants, Federal Direct Loans, and Federal Family Education Loans. To receive federal financial aid funds, MBA entered into a program participation agreement with the United States Department of Education. The Department of Education conditions MBA’s receipt of federal financial aid upon compliance with Title IV of the Higher Education Act of 1965 (“Title IV”).

The settlement resolves allegations raised by a whistleblower pursuant to the qui tam provisions of the False Claims Act and resolves the findings of the Department of Education’s program review. An investigation by the United States Attorney’s office focused on allegations that from January 2009 through December 2013, MBA knowingly submitted or caused to be submitted claims for federal student financial aid that were false because the students were ineligible to receive such aid. Specifically, the United States alleges that the students did not have a high school diploma or equivalent at the time they enrolled at MBA, as required by Title IV. In some cases, the United States contends that MBA staff created fake diplomas for students, or encouraged students to obtain false credentials from “diploma mills.”

“When schools agree to participate in the Title IV federal financial aid program, they must comply with regulations designed to ensure that qualified students have access to higher education,” said U.S. Attorney McSwain. “When a school receives financial educational assistance for ineligible students, it is unfair not only to other educational institutions that comply with the regulations, but also to the students attending the non-compliant school who may find themselves unqualified for employment and saddled with debt.”

In accordance with the settlement agreement, MBA will make total payments of $425,000. Included in that amount are payments to the federal government for losses associated with the federal student financial aid program, and to the whistleblower pursuant to the False Claims Act.

This settlement resolved a lawsuit filed under the False Claims Act in the U.S. District Court for the Eastern District of Pennsylvania. Under the qui tam or whistleblower provisions of the False Claims Act, private citizens, called relators, are permitted to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. The False Claims Act also permits the government to intervene and take over the lawsuit, which occurred in this case.  The qui tam complaint was filed by Brian J. McCormick of Ross Feller Casey, LLP in Philadelphia.  “We thank the relator and relator’s counsel for their invaluable contribution in this case. Without information from citizens like the relator, detecting fraud and conserving government program funds would be much more difficult,” said U.S. Attorney McSwain.

The government’s resolution of this matter illustrates its emphasis on combating fraud on student financial aid programs and other grant fraud. One of the most powerful tools in this effort is the False Claims Act. This case was investigated by the Department of Education Federal Student Aid Office and the Department of Education Office of Inspector General. It is being handled by Assistant United States Attorney Stacey L. B. Smith, with assistance from Auditor Dawn Wiggins, and Fraud Investigator Jeffrey Braun.

The case is captioned United States of America, ex rel. Tracy L. Donmoyer v. Metro Beauty Academy, LLC., Civ. A. No. 14-4540 (E.D. Pa.). The claims resolved by this settlement are allegations only and there has been no determination of liability.

PHILADELPHIA – United States Attorney William M. McSwain announced that Steven J. Russo, 43, of Pennsburg, PA, pleaded guilty today to wire fraud and filing false tax returns before United States District Court Judge Jeffrey L. Schmehl. The charges arose from Russo’s embezzlement of $2.79 million from his former employer, a company in Lancaster, PA, for which he served as the Director of Information Technology from November 2013 until October 2018.

Russo used his access to his former employer’s lines of credit and credit cards to make unearned payments to companies owned and controlled by him, and to purchase items that he kept for his personal use or sold for his personal gain. He also caused his former employer to issue checks to the companies he owned and controlled, and to make payments via PayPal to an account he controlled. Russo reported his taxable income for 2017 as only $18,579, when in reality his taxable income was nearly $1 million.

“The U.S. Attorney’s Office takes offenses like embezzlement and tax fraud very seriously,” said U.S. Attorney McSwain. “Russo stole millions by abusing his trusted position with his former employer. 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.”

“Not only did Mr. Russo steal millions of dollars from his employer, he also stole from the government and the American people when he decided to shirk his tax obligations,” said IRS-Criminal Investigations Special Agent in Charge Thomas Fattorusso. “His admission of guilt today underscores our commitment to protecting the integrity of the tax system by ensuring that everyone pays their fair share of taxes.”

Russo faces up to twenty-three years in prison, as well as restitution, fines, supervised release, and special assessments.

This case was investigated by IRS-Criminal Investigations, and is being prosecuted by Assistant United States Attorney Bea Witzleben.

PHILADELPHIA – United States Attorney William M. McSwain announced that Khalil Key, 32, of Philadelphia, PA was sentenced to 52 months of imprisonment and three years of supervised release by United States District Judge Jeffrey L. Schmehl.

Key pleaded guilty in November 2019 to charges of being a felon in possession of a firearm, specifically a loaded Glock .40 caliber semi-automatic pistol. In March 2019, Key was approached by Amtrak Police at the Lancaster train station after he departed a train originating from Philadelphia. Key dropped a backpack on the floor of the station and ran from the officers. Police recovered the backpack and found the loaded weapon and Key’s personal identification inside. Key has previously been convicted of, and served terms of imprisonment for, weapons offenses.

“Reducing violent crime is a top priority of my Office and the Department of Justice,” said U.S. Attorney McSwain. “Firearms in the hands of convicted felons pose a serious threat to public safety. We are committed to working with our law enforcement partners to address this threat, whether it be on the streets of large cities, in small towns or anywhere in between -- including on public transportation.”

“This case is a reflection of our incredible working relationships with our local, state and federal law enforcement partners,” said Acting Special Agent in Charge John Schmidt, ATF Philadelphia Field Division. “Any time we can get a firearm out of the hands of a prohibited person, especially one with a history of weapon offenses, is a good day.”

“Amtrak Police appreciates the strong partnerships that we have with our Federal, state and local agencies, which all assist with keeping our system safe and secure,” said Amtrak Police Department Chief Neil Trugman.

The case was investigated by the Bureau of Alcohol, Tobacco, and Firearms and the Amtrak Police. The U.S. Marshals Service assisted in Key’s arrest. The case is being prosecuted by Assistant United States Attorney Paul L. Gray.

PHILADELPHIA – United States Attorney William M. McSwain announced that Steven Pennycooke, 34, and Shawn Collins, 27, both of Philadelphia, PA, were each charged by criminal complaint with possession of a firearm by a convicted felon. The criminal complaints and arrest warrants against both men were unsealed this morning prior to their initial appearances in federal court.

Following peaceful protests on the afternoon of May 30th in response to the killing of George Floyd in Minneapolis, MN, civil unrest began to unfold in Philadelphia, resulting in widespread rioting, looting, burglary, arson, destruction of property, and other violent acts.

On the night of June 2nd, while a mandatory curfew was in effect, the Philadelphia Police Department received a call regarding two individuals loading an ATM onto a cart on the 4100 block of Viola Street in the Parkside section of West Philadelphia. Officers responded to the scene and observed what appeared to be a safe in the middle of the street. The officers also observed two individuals fitting the description from the original call—Pennycooke and Collins—standing near a vehicle about halfway down the block from the safe.

According to the complaint, Pennycooke removed an object, later confirmed to be a loaded 9mm Hi-Point C9 handgun, from his waistband and discarded it in the rear passenger seat of the vehicle parked nearby. Collins was also found to have a firearm in his waistband, later confirmed to be a loaded 9mm Taurus PT24/7 G2 C handgun. Both Pennycooke and Collins are convicted felons and cannot legally possess firearms. Also according to the complaint, Collins acknowledged to the arresting officer that he did not have a permit to carry a firearm.

“As I made clear last week, my Office is committed to prosecuting anybody who took advantage of the George Floyd protests to try to commit violent acts or otherwise violate federal law. There will be accountability,” said U.S. Attorney McSwain. “In this case, two previously convicted felons are charged with allegedly possessing firearms, which presents a clear danger to the community. We will continue to enforce the rule of law in Philadelphia and throughout the Eastern District of Pennsylvania during this period of unrest – and always.”

“Amid the recent civil unrest in the city sparked by lawless instigators, these two alleged armed felons were found among the looters,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Such criminal acts detract attention from the message of those who choose to peacefully protest. Today's charges demonstrate that the FBI will work swiftly with our law enforcement partners to take individuals who pose a threat to our community off the streets.”

If convicted, the defendants each face a maximum possible sentence of ten years’ imprisonment, followed by three years of supervised release, and a fine of up to $250,000.

The case is being investigated by the Federal Bureau of Investigation and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Derek E. Hines.

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 and Pennsylvania Attorney General Josh Shapiro issued a warning to Pennsylvanians today to be alert to fraudsters using stolen identities to try to obtain Coronavirus Stimulus Funds. 

The Pennsylvania Department of Labor & Industry (DLI) has reported that individuals are filing claims with stolen identities for Pennsylvania Unemployment Assistance (PUA). The PUA Program is administered by the DLI as part of the Federal Stimulus and is intended to benefit workers who have lost their jobs as a result of the coronavirus pandemic. U.S. Attorney McSwain and Attorney General Shapiro announced that federal and state law enforcement will aggressively pursue and prosecute anyone perpetrating this type of fraud.

“Fraud like this causes great harm to many citizens at a time when they are most vulnerable,” said U.S. Attorney McSwain. “It is especially intolerable that criminals are trying to take advantage of an unprecedented public health emergency. My Office and the Pennsylvania Attorney General’s Office will not tolerate it, and we will do everything in our collective power to ensure that such fraud scams are stopped and punished.”

“Scammers are working overtime during this crisis and trying to take advantage of the nearly 1 in 3 Pennsylvanians who have lost a job. We will not let anyone ripoff the public and the millions who are out of work,” said Attorney General Shapiro. “Our offices are using every resource at the state and federal level to figure out who these criminals are and put a stop to this theft. If you get a check you didn’t apply for or a deposit you are questioning, please contact our offices. We need the public’s help to address these crimes.”

According to the DLI, in one version of the fraud, the thieves use stolen identities of employed people to file claims for PUA, but direct that the money be sent to the fraudsters’ own bank accounts. Since discovering this scheme, DLI has taken steps to route PUA funds to the individuals named in the applications in order to prevent the thieves from receiving the stolen funds. As a result, victims of identity theft may only learn that their personal identifying information was stolen when they improperly receive a Pennsylvania unemployment compensation check, or a direct deposit of unemployment benefits, for which they never applied. 

If any Pennsylvanian believes they have been a victim of this type of fraud or identity theft, U.S. Attorney McSwain and Attorney General Shapiro provided the following guidance:

• If you receive a paper check for unemployment benefits in the mail but did not file for such benefits in Pennsylvania, do not cash the check.
• Likewise, if you receive a direct deposit for unemployment benefits but did not file for such benefits in Pennsylvania, do not use the funds. The Pennsylvania Department of Labor & Industry website contains detailed instructions for returning the money. 
• In addition, it is very important that victims report suspected identity theft to the Pennsylvania Department of Labor & Industry. A form is available on the Department’s website: DLI.PA.GOV. Identity theft and fraud can also be reported to the Department using its Fraud Hotline 1-800-692-7469. This information will be shared with law enforcement to investigate this suspected criminal activity.

The investigations are being handled by the Coronavirus Fraud Working Group, led by  the U.S. Attorney’s Office for the Eastern District of Pennsylvania, and including the Office of the Pennsylvania Attorney General, the U.S. Department of Labor Office of Inspector General, the United States Secret Service, the U.S. Postal Inspection Service, the Federal Bureau of Investigation, the Social Security Administration Office of Inspector General, and over a dozen other federal law enforcement agencies.

PHILADELPHIA – United States Attorney William M. McSwain announced that Robert Owusu, 52, of the Bronx, New York, and a native and citizen of Ghana, was sentenced to one year and one day of imprisonment, and three years of supervised release, by United States District Judge Cynthia M. Rufe, for attempting to fraudulently obtain a United States passport using a false identity.

In 2018, the defendant submitted an application for a United States passport, using the identity of another in an attempt to remain in the United States illegally. While in the country, the defendant has been convicted of numerous offenses, including his most recent federal conviction for drug trafficking for which he served 45 months in prison. Owusu had previously secured a fraudulent United States passport in 1999 and reentered the country with said passport around that time after having been deported to his native Ghana. Now, he is once again facing deportation back to Ghana after he serves his latest federal sentence for passport fraud.

“To state the obvious, those who enter our country illegally are not above the law – nobody is,” said U.S. Attorney McSwain. “By his actions, Owusu has demonstrated a complete lack of respect for our nation’s laws. Not only did he flout our immigration laws and commit passport fraud, but also he committed additional, serious crimes such as drug trafficking while he was here. We will continue to work with our law enforcement partners to uphold the rule of law and ensure our nation’s immigration laws are enforced.”

The case was investigated by the Diplomatic Security Service and Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Josh A. Davison.

PHILADELPHIA – United States Attorney William M. McSwain announced that Assistant United States Attorney Richard P. Barrett has been appointed to serve as the District Election Officer for the Eastern District of Pennsylvania for today’s primary elections as part of the Department of Justice’s nationwide Election Day Program.  In that capacity, AUSA Barrett is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses 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. 

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their direction.  For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting, may violate federal voting rights law.  Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.

“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 we need anyone with specific information about voter interference or election fraud to report it immediately to my Office, the FBI, or the Civil Rights Division.”

In order to respond to complaints of ballot fraud or voting rights abuses today, and to ensure that such complaints are directed to the appropriate authorities, AUSA Barrett will be on duty in this District while the polls are open.  He can be reached by the public at the following telephone number: 215-861-8420.  In addition, the FBI will have special agents available to receive allegations of ballot fraud and other election abuses today.  The local FBI field office can be reached by the public at 215-418-4000.

Complaints about ballot access problems or discrimination can also be made directly to the Civil Rights Division’s Voting Section in Washington at 1-800-253-3931 or 202-307-2767.

PHILADELPHIA – In the wake of the violence and looting that took place in Philadelphia and surrounding counties over the past weekend, United States Attorney William M. McSwain participated in a press conference today to address the role that the United States Attorney’s Office for the Eastern District of Pennsylvania will play in restoring order and enforcing the rule of law in the District.  Other speakers at the press conference were Pat Toomey, United States Senator, Pennsylvania; John McNesby, President, Fraternal Order of Police Lodge #5; Farah Jimenez, President and CEO, Philadelphia Education Fund; Reverend Reginald C. Johnson, Special Assistant to the CEO, People for People, Inc.; and Martina White, Member of the Pennsylvania House of Representatives.  Below are U.S. Attorney McSwain’s remarks as prepared for delivery.

*****

Thank you, Senator Toomey. 

We are united as a nation in our disgust over what happened to George Floyd.  Nobody of good will can watch the video of his encounter with the Minneapolis police and not feel shock and anger.  The feeling is universal, among both civilians and law enforcement alike.  

Accountability for Mr. Floyd’s death must be addressed, and is being addressed, through our criminal justice system, both at the state and federal levels.  That system is working and moving quickly.  Initial charges have already been filed.  Justice will be served.

The right of the people peaceably to assemble is one of our most cherished Constitutional rights.  Many of this weekend’s protestors in Philadelphia exercised that right in a responsible manner.  Others did not.  Instead, they engaged in senseless violence – rioting, looting, burning.

There is no excuse for that kind of lawlessness.  If you engage in that type of criminal behavior under the guise of “protest,” you disgrace the Constitution and you disgrace yourself.  And you dishonor the memory of George Floyd. 

In the face of extreme provocation this past weekend, with various physical objects and obscenities being hurled at them, the brave men and women of the Philadelphia Police Department did their job, and exercised admirable courage and restraint while doing so.  Operating under extremely dangerous conditions, they did their very best to keep the City safe – and I applaud and thank them for that.

But restraint only goes so far.  It is time to squarely confront any further violence and stop it in its tracks.  Any continued violence, destruction of property and theft endangers the lives and livelihoods of others, and interferes with the rights of peaceful protestors, as well as the rights of all other citizens.  It also undercuts the work that needs to be done to address legitimate grievances.     

It is the responsibility of state and local leaders to ensure that adequate law enforcement resources are deployed on the streets to reestablish law and order.  Federal law enforcement actions will be directed at apprehending and charging the violent agitators who have hijacked peaceful protest and are engaged in violations of federal law. 

Some of those violations could include: arson, inciting a riot, engaging in civil disorder, destruction of motor vehicles, destruction of federal property, assaulting a federal officer or federal employee, and various firearms charges.

I implore any protestors in Philadelphia to behave peacefully.  I also issue this warning: if you engage in violence and destruction and we have federal jurisdiction over your crime, you will be prosecuted in federal court to the fullest extent of the law.  That is a promise.

Despite the looting and violence that we witnessed this weekend, Philadelphia is not a community of criminals.  We are a City of honest, hard-working, and law-abiding people.  We are members of community organizations, residents raising families, and people who serve the public good in a myriad of ways.  On Sunday morning, after a night of destruction, people from all walks of life voluntarily gathered to clean our city streets, washing graffiti off of buildings, picking up debris, and helping store owners board up their broken windows.  That is the Philadelphia that we need to come together to protect – one that respects our Constitution and the rule of law – and I am proud to be a part of it.  Thank you.

PHILADELPHIA – United States Attorney William M. McSwain announced today that Branden Coluccio, 32, of Doylestown, Pennsylvania, has been sentenced to 37 months in prison for conspiracy to commit health care fraud. As part of his sentence, he was also ordered to pay restitution in the amount of $3,070,157, forfeiture in the amount of $110,000, and an additional $15,000 fine. United States District Judge Wendy Beetlestone presided over the sentencing hearing in Philadelphia via video teleconference. This scheme involved Liberation Way, a drug and alcohol rehabilitation organization that had treatment centers in Yardley, Bala Cynwyd, and Fort Washington, Pennsylvania.

The investigation exposed an array of health care fraud schemes committed by individuals associated with Liberation Way, including an over-billing scheme connected with the facility’s medical director, as well as an elaborate kick-back scheme involving thousands of medically-unnecessary urine tests which were sent to Florida-based laboratories for analysis. Coluccio, a co-founder of Liberation Way, participated in yet another scheme by fraudulently purchasing premium insurance policies for prospective patients on their behalf, which then allowed Liberation Way to bill insurance companies for expensive “treatment” purportedly provided to these patients. Liberation Way represented that the patients were buying and paying for these policies, when in reality Liberation Way was paying the premiums, which is illegal.

“As made clear by today’s sentencing, my Office will not tolerate health care fraud in any form,” said U.S. Attorney McSwain. “Those who think that they can exploit our health care system and take advantage of at-risk patients are criminals and will face the consequences. Coluccio will rightly spend years in prison and pay millions of dollars as the result of his criminal conduct.”

“Coluccio schemed to defraud health care programs by manipulating vulnerable patients,” said Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services. “Instead he will spend years behind bars and restitute millions in stolen money. We will continue to work with our law enforcement partners to protect vital health and human service programs and the individuals they serve.”

“Coluccio used vulnerable patients as pawns in his scheme to defraud insurance plans of millions of dollars,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “He’s now being held to account for his criminal deceptions at Liberation Way, sentenced to several years behind bars. If you steal from our country’s essential healthcare system, know that the FBI, alongside our state and federal partners, is committed to shutting you down and bringing you to justice.”

“Branden Coluccio conspired with others in a health care fraud scheme by unlawfully purchasing premium insurance policies for prospective patients. The scheme allowed Liberation Way, an organization with several drug and alcohol rehabilitation centers, to bill insurance companies for expensive treatment allegedly provided to patients. We will continue to work with our law enforcement officers to protect the integrity of health care benefits,” stated Derek Pickle, Acting Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.

“The defendant took advantage of people struggling with addiction to profit off the opioid epidemic ravaging Pennsylvania,” said Pennsylvania Attorney General Josh Shapiro. “Our office is fighting this scourge on all fronts. My thanks to our partners in the U.S. Attorney’s Office, the FBI, and other agencies in Pennsylvania and Florida for their diligence and dedication to this investigation and the punishments we’ve secured for these bad actors.”

The case was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services, the Office of Personnel Management, and the Department of Labor, in conjunction with the Pennsylvania Attorney General’s Office. It is being prosecuted by Assistant United States Attorney Nancy Beam Winter and Special Assistant United States Attorneys Robert Labar and Kristy Christ.

PHILADELPHIA – United States Attorney William M. McSwain announced today that Domenick J. DeMuro, 73, of Philadelphia, PA, a former Judge of Elections for the 39th Ward, 36th Division in South Philadelphia, has been charged and has pled guilty to a two-count Information charging (1) conspiracy to deprive Philadelphia voters of their civil rights by fraudulently stuffing the ballot boxes for specific Democratic candidates in the 2014, 2015, and 2016 primary elections, and (2) a violation of the Travel Act, which forbids the use of any facility in interstate commerce (here, a cell phone) with the intent to promote certain illegal activity (here, bribery). U.S. Attorney McSwain’s video statement providing additional details about this case is available on the Office website here: https://www.justice.gov/usao-edpa/video/united-states-attorney-william-m-mcswain-announces-guilty-plea-former-philadelphia.

The Judge of Elections is an elective office and a paid position. In that role, DeMuro was responsible for overseeing the entire election process and voter activities of his Division. The Judge of Elections is charged with overseeing the Division’s polling place in accordance with federal and state election laws and is required to attend Election Board Training conducted by the Philadelphia City Commissioners.

The voting machines at each polling station, including DeMuro’s station, generate records in the form of a printed receipt documenting the use of each voting machine. The printed receipt, also known as the “results receipt,” shows the vote totals, and the Judge of Elections and other Election Board Officials at each polling place attest to the accuracy of machine results.

During his guilty plea hearing, DeMuro admitted that an unnamed political consultant gave DeMuro directions and paid him money to illegally add votes for certain Democratic candidates. These candidates were individuals running for judicial office whose campaigns had hired the consultant, as well as other candidates for various federal, state, and local elective offices who were preferred by this consultant for a variety of reasons.

The political consultant would solicit monetary payments from his clients in the form of cash or checks as “consulting fees,” and then use portions of these funds to pay Election Board Officials, including DeMuro, in return for tampering with the election results. After receiving payments ranging from between $300 to $5,000 per election from the consultant, DeMuro would add fraudulent votes on the voting machine – also known as “ringing up” votes – for the consultant’s clients and preferred candidates, thereby diluting and distorting the ballots cast by actual voters. DeMuro would add these fraudulent votes to the totals during Election Day, and then would later falsely certify that the voting machine results were accurate.

“DeMuro fraudulently stuffed the ballot box by literally standing in a voting booth and voting over and over, as fast as he could, while he thought the coast was clear. This is utterly reprehensible conduct. The charges announced today do not erase what he did, but they do ensure that he is held to account for those actions,” said U.S. Attorney McSwain. “Voting is the cornerstone of our democracy. If even one vote is fraudulently rung up, the integrity of that election is compromised. I want the public to know that this investigation is active and ongoing, and my Office is taking every possible step that we can to ensure the integrity of the upcoming primary and general elections in the nine counties of the Eastern District of Pennsylvania.”

“This defendant abused his office by engaging in election fraud for profit,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “Today’s conviction makes it clear that the Department of Justice will do all in its power to protect the integrity of elections and maintain public confidence in all levels of elected government.”

“Domenick DeMuro put a thumb on the scale for certain candidates, in exchange for bribes,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “As public trust in the electoral process is vital, the FBI’s message today is clear: election interference of any kind, by hostile foreign actors or dishonest local officials, won’t be tolerated. This is an active, ongoing investigation and we're asking anyone with information on election fraud to contact the FBI.”

“The citizenry of the City of Philadelphia, as well as this Commonwealth and these United States, needs to be confident in the integrity of our elections,” said Captain Leo Hannon, Director of the Pennsylvania State Police, Special Investigations Division. As this investigation clearly illustrates, the Pennsylvania State Police will relentlessly pursue any breach of the sacred trust bestowed upon our public officials. Our agency is proud to partner with the Federal Bureau of Investigation, the United States Attorney’s Office, and the United States Department of Justice as a whole to root out corruption at any level of our government. Matters of public corruption and public integrity have been, and shall remain, a top priority of the Pennsylvania State Police.”

This case is being investigated by the Federal Bureau of Investigation, with assistance from the Pennsylvania State Police. It is being prosecuted by Assistant United States Attorney Eric L. Gibson and Richard C. Pilger, U.S. Department of Justice, Director of Elections Crimes Branch, Criminal Division, Public Integrity Section.

PHILADELPHIA – U.S. Attorney William M. McSwain released a video on May 21, 2020, in which he discussed the charging and guilty plea of former Philadelphia Judge of Elections Domenick J. DeMuro. Below are U.S. Attorney McSwain’s remarks, as prepared for delivery.

*****

Good morning. I am here to announce that the U.S. Attorney’s Office has unsealed criminal charges against Domenick J. DeMuro, a former Judge of Elections for the 39th Ward, 36th Division in South Philadelphia. DeMuro has been charged with two counts: first, for conspiring to deprive Philadelphia voters of their civil rights by fraudulently stuffing the ballot boxes for specific Democratic candidates in the 2014, 2015, and 2016 primary elections; and second, for a violation of the Travel Act, which forbids the use of any facility in interstate commerce (here, a cell phone) with the intent to promote certain illegal activity (here, bribery). DeMuro has pled guilty to both of these charges.

This prosecution has been a team effort, and before I get into a more detailed description of what happened in this case, there are several people that I want to recognize and thank. First, from the FBI, Mike Driscoll, who is the Special Agent in Charge of the FBI’s Philadelphia Field Office, as well as Special Agent Carmen DiMario, who is the lead investigator on the case. I want to thank the Public Integrity Section at the U.S. Department of Justice in Washington, and specifically Section Chief Corey Amundson, Deputy Chief John Keller, and the Director of the Election Crimes Branch of the Section, Richard Pilger. I also want to thank Assistant U.S. Attorney Richard Barrett, who is the Chief of our Public Corruption Unit at the U.S. Attorney’s Office, and Assistant U.S. Attorney Eric Gibson, who is the lead prosecutor on the case. And finally, I would like to thank the Pennsylvania State Police for their assistance in this investigation.

The position that DeMuro held, the Judge of Elections, is an elective office and a paid position. The Judge of Elections is responsible for overseeing the entire election process and voter activities of his or her Division. Each Judge of Elections is charged with overseeing the Division’s polling place in accordance with federal and state election laws, and is required to attend Election Board Training conducted by the Philadelphia City Commissioners.

The voting machines at each polling station, including the 39th Ward, 36th Division, generate records in the form of a printed receipt documenting the use of each voting machine. The printed receipt, also known as the “results receipt,” shows the vote totals, among other information. The Judge of Elections and the Election Board Officials at each polling place attest to the accuracy of machine results by affixing their signatures to the last page of the results receipt.

Our election system relies on the honesty and the integrity of its Election Officials. If they are corrupt, the system is corrupt, which creates opportunities for election fraud and for the counting of fake votes.

Domenick DeMuro did not uphold his duties as an Election Official. A political consultant gave DeMuro directions and paid him money to illegally add votes for certain Democratic candidates on the primary ballots in 2014, 2015, and 2016. These candidates were individuals running for judicial office whose campaigns had hired the consultant, as well as other candidates for various federal, state, and local elective offices who were preferred by this consultant for a variety of reasons.

The political consultant would allegedly solicit monetary payments from his clients in the form of cash or checks as “consulting fees.” The consultant would then take portions of these funds and make payments to Election Board Officials, including DeMuro, in return for DeMuro and other Election Board officials tampering with the election results.

After receiving payments ranging from between $300 to $5,000 per election from the consultant, DeMuro would add fraudulent votes on the voting machine – also known as “ringing up” votes – for the consultant’s clients and preferred candidates, thereby diluting and distorting the ballots cast by actual voters. DeMuro would add these fraudulent votes to the totals during Election Day, and then would later falsely certify that the voting machine results were accurate. He would add the fraudulent votes by literally standing in the voting booth and voting over and over, as fast as he could, when he thought the coast was clear.

In May 2014, DeMuro stuffed the ballot box with 27 fraudulent ballots during the primary election. In May 2015, DeMuro padded the ballot box with 40 fraudulent votes; in 2016, it was 46 fraudulent votes. These numbers may sound relatively small, but they made up a significant percentage of the total votes cast at the polling place. In 2014, 118 total ballots were reported in the 36th Division of the 39th Ward. That means that DeMuro’s fraudulent votes accounted for over 22% of the total voting in that Division in 2014. In 2015, his fraud accounted for over 15% of the votes in the Division; in 2016, his fraud accounted for over 17% of the votes.

But at the end of the day, the specific numbers don’t really matter. Voting is the cornerstone of our democracy. If only one vote has been illegally rung up or fraudulently stuffed into a ballot box, the integrity of that election is undermined. Again, the integrity of our elections depends on the honesty of our Election Officials – so we take any dishonesty by those officials very seriously. And I want to make it clear that this is an ongoing and active investigation.

I also want the public to know that my Office is taking every possible step that we can to ensure the integrity of every primary and general election in the Eastern District of Pennsylvania in 2020. For example, earlier this year, I announced that our Office has launched a review of all polling places in the Eastern District to determine if they are in compliance with the Americans with Disabilities Act. As this year marks the 30th anniversary of the ADA, there can be no doubt that counties have had more than enough time to ensure that their polling places provide full access to individuals with disabilities. We will work day and night to make sure that every citizen’s civil rights are protected, whether that is through access to the polls or making every legitimate vote count.

If you tamper with anyone’s right to vote or try to fix the results of any election in the Eastern District of Pennsylvania, my Office will hold you accountable. If you are an Election Official or work with the polling places in any way, I urge you to do your job honestly and faithfully at every turn. That is what the public deserves, it is what democracy demands, and it is what my Office will enforce.

A former Judge of Elections has been convicted for his role in accepting bribes to cast fraudulent ballots and certifying false voting results during the 2014, 2015, and 2016 primary elections in Philadelphia. 

Domenick J. Demuro, 73, of Philadelphia, Pennsylvania, pleaded guilty during a sealed proceeding on March 16, 2020, before U.S. District Judge Paul S. Diamond to conspiring to deprive persons of civil rights, and using interstate facilities in aid of bribery. The court unsealed the matter today.  Sentencing is scheduled for June 30, 2020.

During his guilty plea hearing, Demuro admitted that while serving as an elected municipal Judge of Elections, he accepted bribes in the form of money and other things of value in exchange for adding ballots to increase the vote totals for certain candidates on the voting machines in his jurisdiction and for certifying tallies of all the ballots, including the fraudulent ballots.  Demuro further admitted that a local political consultant gave him directions and paid him money to add votes for candidates supported by the consultant, including candidates for judicial office whose campaigns actually hired the consultant, and other candidates for various federal, state and local elective offices preferred by that consultant for a variety of reasons.  Demuro also admitted that the votes he added in exchange for payments by the political consultant increased the number of votes fraudulently recorded and tallied for the consultant’s clients and preferred candidates, thereby diluting the ballots cast by actual voters. 

“This defendant abused his office by engaging in election fraud for profit,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “Today’s conviction makes it clear that the Department of Justice will do all in its power to protect the integrity of elections and maintain public confidence in all levels of elected government.”

“Demuro fraudulently stuffed the ballot box by literally standing in a voting booth and voting over and over, as fast as he could, while he thought the coast was clear. This is utterly reprehensible conduct. The charges announced today do not erase what he did, but they do ensure that he is held to account for those actions,” said U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania.  “Voting is the cornerstone of our democracy.  If even one vote is fraudulently rung up, the integrity of that election is compromised. I want the public to know that this investigation is active and ongoing, and my Office is taking every possible step that we can to ensure the integrity of the upcoming primary and general elections in the nine counties of the Eastern District of Pennsylvania.”

“Domenick Demuro put a thumb on the scale for certain candidates, in exchange for bribes,” said Special Agent in Charge Michael J. Driscoll of the FBI’s Philadelphia Division.  “As public trust in the electoral process is vital, the FBI’s message today is clear: election interference of any kind, by hostile foreign actors or dishonest local officials, won’t be tolerated. This is an active, ongoing investigation and we're asking anyone with information on election fraud to contact the FBI.”

“The citizenry of the City of Philadelphia, as well as this Commonwealth and these United States, needs to be confident in the integrity of our elections,” said Captain Leo Hannon, Director of the Pennsylvania State Police, Special Investigations Division.  “As this investigation clearly illustrates, the Pennsylvania State Police will relentlessly pursue any breach of the sacred trust bestowed upon our public officials. Our agency is proud to partner with the Federal Bureau of Investigation, the United States Attorney’s Office, and the United States Department of Justice as a whole to root out corruption at any level of our government. Matters of public corruption and public integrity have been, and shall remain, a top priority of the Pennsylvania State Police.”

The FBI and the Pennsylvania State Police investigated the matter.  Richard C. Pilger, Director of the Election Crimes Branch in the Criminal Division’s Public Integrity Section, and Assistant U.S. Attorney Eric L. Gibson of the Eastern District of Pennsylvania are handling the prosecution. 

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 today that Jason Gusoff, 44, of Richboro, Pennsylvania entered a plea of guilty to one count of conspiracy to commit arson. United States District Judge C. Darnell Jones II presided over the guilty plea hearing in Philadelphia via video teleconference.

The defendant purchased his business, California Tanning Salon, in November 2007. For the approximately nine months that the defendant owned and operated the business, it was never profitable. The business expenses exceeded the revenue generated, and Gusoff could not make the required lease payments. On July 21, 2008, Gusoff directed his co-conspirator to set fire to the business with the intent to destroy it. After the fire, Gusoff submitted requests for payment to the business’ insurance company while making materially false representations that he was not responsible for the loss caused by the fire. These lies resulted in the defendant receiving $105,486 from the insurance company.

A federal grand jury returned an Indictment against Gusoff in February 2011. Prior to his scheduled trial in September 2011, Gusoff fled the United States using his brother’s passport. In February 2019, due to the coordinated efforts of the United States Marshals Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Cambodian Police, the defendant was arrested in Cambodia and returned to the Eastern District of Pennsylvania to answer for his crimes. The co-conspirator, who was severely burned while committing the arson and hospitalized as a result, pled guilty in 2011 and has since served his sentence.

“Gusoff has a brazen disrespect for the law – and for human life. He is lucky that no one died during this fire,” said U.S. Attorney McSwain. “He put people’s safety at risk, stole insurance money, and when faced with the consequences of his actions, fled the country. If you are charged in the Eastern District of Pennsylvania with a federal offense, it does not matter if you flee to the other side of the world. We will find you and hold you accountable for your actions.”

“Acts of arson are dangerous crimes and threaten the community. ATF is committed to keeping the public safe from those who maliciously set these fires,” said Donald Robinson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Philadelphia Field Division. “We appreciate the assistance of our federal and international partners in getting the defendant back to the States to face these charges, and the dedication and tenacity of our personnel in the Arson and Explosives Task Force.”

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and is being prosecuted by Assistant U.S. Attorney Jeanine Linehan, the Deputy Chief of the Violent Crime Unit of the U.S. Attorney’s Office.

PHILADELPHIA – United States Attorney William M. McSwain announced that Jerry Zweitzig, 71, of Hatboro, Pennsylvania, has pleaded guilty to charges of manufacturing and attempted manufacturing of child pornography. These charges arose from the defendant’s sexual abuse of an infant and his videotaping of that abuse.

Investigators found the video of the infant, which was created in 2010, while preparing for Zweitzig’s sentencing hearing in a separate child exploitation case filed by this Office. In that previous case, Zweitzig was charged in May 2019 with five counts of manufacturing and attempted manufacturing of child pornography and one count of possession of child pornography. Those charges arose from the defendant’s sexual exploitation of a different child over a period of years, his photographing and videotaping of his sexual abuse of that child, and his extensive collection of child pornography involving thousands of other children. Zweitzig pleaded guilty to all of those counts in October 2019.

On June 16, 2020, the defendant is scheduled to be sentenced on both cases by United States District Court Judge Wendy Beetlestone. He faces a maximum possible sentence of 200 years’ imprisonment, a mandatory minimum term of 15 years, between five years and a lifetime of supervised release, a $1,750,000 fine, mandatory restitution, and a $700 special assessment.

“Sexual exploitation of a minor of any age, let alone an infant, is utterly reprehensible and will be met with swift justice,” said U.S. Attorney McSwain. “Because of the excellent forensic work by our partners at Homeland Security Investigations, we uncovered this additional crime, ensuring that the defendant will now be held accountable for his actions. Working with all of our law enforcement partners, my Office will continue to identify and punish sexual predators to protect our children and our communities.”

“Homeland Security Investigations (HSI) is committed to protecting the children and youth of our communities who are most vulnerable to online predators,” said Brian A. Michael, Special Agent in Charge for HSI Philadelphia. “When a criminal places a record of that abuse online or in other public forums, the abuse continues and can resurface throughout the victim’s life. HSI and our law enforcement partners are committed to finding, and bringing to justice, those who exploit children.”

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by 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 today that United States District Court Judge Joshua D. Wolson approved a Consent Decree between the United States and Philadelphia food distributor Kawa Trading, Inc. (“Kawa”). On April 7, 2020, the United States filed a lawsuit to stop Kawa, and its president Chui Xun Liu (“Liu”), from continuing to violate federal meat and poultry food safety laws. The Complaint alleged that Kawa received and sold multiple unlabeled and uninspected cases of poultry products in December 2017 and January 2018. It further alleged that Kawa had a long history of violating the Poultry Products Inspection Act (“PPIA”) and the Federal Meat Inspection Act (“FMIA”), with violations dating back to 2013.

The defendants admitted to violating the PPIA and FMIA as alleged in the Complaint. The Consent Decree resolves all of these claims, provides for a permanent injunction enjoining Kawa and Liu from committing future violations, and calls for monetary penalties and other appropriate relief in the event of future violations. 

The Food Safety and Inspection Service (“FSIS”) of the United States Department of Agriculture (“USDA”), is responsible for ensuring that meat and poultry products in commerce are wholesome, not adulterated, and properly marked, labeled, and packaged. The PPIA and FMIA are laws that prohibit companies and individuals from selling, transporting, offering for sale or transportation, or receiving for transportation, misbranded or uninspected poultry and meat that is capable of use as human food.

“Food safety is a key public health concern, especially now during the coronavirus pandemic,” said U.S. Attorney McSwain. “The Consent Decree in this case is an important step to ensure that food distributors like Kawa abide by all regulatory requirements that are designed to protect our food supply. My Office will continue to work with the USDA to enforce our nation’s food safety laws and protect consumers.”

“FSIS’s authority to enforce the FMIA and the PPIA is clear,” said FSIS Administrator Paul Kiecker. “Our inspectors and investigators are hard at work every day ensuring that the public has access to safe, wholesome, and accurately labeled food and, when necessary, we will take swift action to protect American consumers.”   

The action is captioned United States of America v. Kawa Trading, Inc. and Chui Xun Liu, EDPA No. 20-1826.

The United States Attorney’s Office received valuable assistance from two divisions of the FSIS Office of Investigation, Enforcement, and Audit: the Compliance and Investigations Division, Northeast Region and the Enforcement and Litigation Division. Assistant United States Attorney Stacey L. B. Smith handled the civil matter, with assistance from USDA Office of the General Counsel Trial Attorney Tracy McGowan.