Eastern District of Pennsylvania

PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Khalil Smith a/k/a “Lil,” 35, of Philadelphia, was sentenced by U.S. District Judge Mitchell S. Goldberg to life plus 207 years’ imprisonment, to be served consecutively.  Smith was found guilty by a jury in January 2017, of committing a series of horrifying crimes, including armed home invasion robberies, carjackings, a kidnapping, and related firearms offenses—all over the course of an approximate 20-month period, from October 2012 to April 2014.

Smith was a leader of an extremely violent criminal organization of 20 individuals.  As part of their conspiracy, they planned to commit armed robberies and kidnappings.  Their goal was to steal drugs, drug proceeds, and other items of value, or obtain ransom for the release of their kidnapping victims.  Members of the conspiracy conducted surveillance of their victims and tracked their victims using GPS devices.  Smith and the others also used police scanners to monitor police radio during the commission of their crimes to evade detection and apprehension by law enforcement.

Members of the organization also used firearms and/or brute physical force to facilitate the commission of the robberies, kidnappings and carjackings, specifically to threaten, intimidate, and subdue the victims.  They also occasionally dressed as police officers as a means to fool their victims.  They shot and threatened to shoot their victims and physically restrained them with handcuffs, zip ties, electrical cords, and shoelaces and held them captive, at times, for several hours.  They even went so far as to waterboard and pour boiling water on the genitals of some of their victims.

 “Motivated by his desire for drugs, money, and power, Khalil Smith was a ringleader of a ruthless, violent gang,” said U.S. Attorney McSwain.  “This crew resorted to torture, extreme violence, intimidation, and even impersonation of law enforcement to dominate their victims and terrorize our community.  Because of the dedicated work of prosecutors and law enforcement working this case, Smith will now spend the rest of his life where he belongs – in a prison cell.  The facts of this case are an excellent example of why violent crime is a priority for my Office and the Department of Justice.”

“A key component of ATF’s mission is to combat and reduce violent crime.  The life sentence that was handed down today is another victory in the battle against violent crime for ATF, our law enforcement partners, and more importantly, the citizens of Philadelphia,” said ATF Special Agent in Charge Donald Robinson.  “This sentence sends a very strong message to these home invasion crews that are preying on our communities.  We appreciate the cooperation of our federal, state and local partners to this bring this case to a successful conclusion.”

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.

This case was investigated by the ATF, the Philadelphia Police Department and various other local police departments throughout the Eastern District of Pennsylvania and the District of New Jersey.  It is being prosecuted by Assistant United States Attorneys Salvatore L. Astolfi and Jeanine Linehan.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Brian Glantz, 23, of Glenside, Pennsylvania, was charged on Saturday by complaint with one count of assault on an officer in the performance of official duties, in violation of 18 U.S.C. § 111(a)(1), and the assimilated Commonwealth of Pennsylvania crime of aggravated assault on an officer in the performance of official duties, in violation of 18 U.S.C. § 13 and 18 Pa.C.S. § 2702(a)(3). 

On November 17, 2018, a group identified as “We the People” received a permit and held a rally in Independence National Park. According to the complaint, approximately 50 people attended the event, and the group waved flags and made speeches. The complaint alleges that approximately 500 counter-protesters gathered at the event, yelling obscenities at both the permitted group and at state, local, and federal law enforcement officers. The complaint details that numerous law enforcement officers worked together to position themselves between the two groups to prevent a potentially violent confrontation. The complaint charges that the defendant pushed back at the officers and, while on Park property, punched a Philadelphia Police Department officer in the side of his face as he was in the performance of his duties; the defendant continued to resist the officers’ efforts to arrest him, kicking his legs and wrestling with the officers and park rangers.

“Assaulting a law enforcement agent – whether a federal, state, or local officer – is a crime that I take very seriously,” said U.S. Attorney McSwain. “There is no excuse for it. No matter who you are, if you assault an officer and there is federal jurisdiction, I will bring the full weight of my Office down upon you.”

The defendant has been held at the Federal Detention Center since Saturday. On Monday, the defendant appeared in United States Magistrate Court before the Honorable Elizabeth T. Hey and was released on a $15,000 bond with travel restrictions.

The case was investigated by the National Park Service with assistance from the Philadelphia Police Department and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Christopher Diviny.

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

PHILADELPHIA – U.S. Attorney William M. McSwain was honored to speak at Penn Law’s 2018 Veterans Week keynote event on November 14, 2018, hosted by the Penn Law Veterans Club. 

* * *

Remarks as prepared for delivery

* * * 

United We Stand:  Honoring the Core Values of Our Veterans in Our Everyday Civic Discourse

 

First, I want to thank the organizers of Penn Law’s Veterans Week and those members of the Penn Law Veterans Club who invited me here today.  In particular, I’d like to thank Aaron McKenney, who interned at our Office this summer.  Thank you, Aaron, for inviting me here today and for your service to my Office and to our nation. 

I’d also like to acknowledge and thank the Dean of Penn Law, Ted Ruger, for hosting me today and for supporting this club and all of the great work that it does.  I know a critical part of the club’s mission is to recruit students with military backgrounds to come to Penn Law and to encourage discourse in the Penn Law community about veterans’ issues.  And as I look out into this audience, I can see firsthand that the club is succeeding in its mission.  

In addition to the Veterans Week activities here, just in this week alone, we’ve celebrated notable markers in our nations’ military history.  On Saturday, November 10, we celebrated the 243rd birthday of my beloved United States Marine Corps.  And on Sunday, November 11, we celebrated the 100th anniversary of Armistice Day—the official end of World War I—the war known as the “War to End All Wars.”  On the 11th day, at the 11th hour, of the 11th month, a bugle call signified the truce among all nations and a recommitment to world peace. 

But the world did not remain a peaceful place for very long.  After World War II and the Korean War, Armistice Day was renamed Veterans Day – a day to honor veterans from all wars.  And, unlike Memorial Day – the day set aside to remember America’s fallen heroes – Veterans Day is a day to honor all Americans who have served our country.  That includes those living and dead, those who served in war and peace, those who served yesterday and today.  On November 11th, we recognize all those who have worn the uniform.

Which brings me to the main point I want to address today.  As Aaron mentioned in his opening remarks, the theme of Penn Law’s Veterans Week programming is “United We Stand.”  It is a theme that has multiple layers of meaning.  For one thing, it references the widely held sentiment that America’s military, as an institution, is one of the greatest unifying forces in our country today. 

This theme also speaks to the remarkable reality that our military successfully brings together a mix of people from every corner of the country – a mix of different races, ethnicities, religions, and socio-economic backgrounds.  And it works.  It is that mix of perspectives that contributes to the military’s continued vitality.  

This observation undoubtedly raises questions about what lessons we can learn from the military ethos – that is, from the core values of those serving in our American armed forces.  How is it that the military manages to bring out the best in people from different backgrounds and with different points of view, and how can we honor and apply those core values in our daily lives?  

But first, on the broader point – let’s consider the fact that, in an era marked by political divisiveness, the public’s confidence in the military as an institution is stronger than ever.  So is our respect for those who have bravely worn the uniform to protect our country.

 In a survey recently published by the Pew Research Center, 80% of Americans respondents from both political parties said they have confidence that the military will act in the best interests of the public.[1]  Not surprisingly, other institutions received far lower marks.  For example, only 40% of Americans surveyed said they have confidence in the news media to act in the public’s best interest.  And our elected officials fared even worse: only 25% of those surveyed said the same about our representatives in government. 

America’s outpouring of support for veterans and our military over this past weekend tracks these survey results.  We honored and celebrated the achievements in many ways – we attended parades and watched pre-game celebrations; we listened to speeches and read news stories about sacrifice, strength, and resilience.  And what struck me on this last point was that the news stories I’m referencing came from sources across the political spectrum. 

This level of support is a remarkable thing, and it is one we should not take for granted.  Many here today might not remember a time when our American culture viewed the military and military service rather differently.  I was born in 1969 – when America was in midst of the Vietnam War.  Anti-war sentiment caused many in our country to doubt the wisdom of our government, which in turn led some to demonize the military and those who wore the uniform.  Fortunately, that dark patch of our history is a thing of the past.

This brings me back to our question – what lessons can we draw from the military about how people with different viewpoints can work together towards a common goal?  How can we honor veterans and the sacrifices they have made for our country as we go about our daily lives?

Memorial events are important, but my vision for honoring veterans requires us to strive to improve our civic discourse.  It requires an understanding that there’s more that unites us than divides us.  It requires us all to put country and civility first and, where possible, to work towards compromise for the common good.  It requires us to embrace several core values – those of honor, courage, and commitment – to do the right thing, even when our passions might pull us in a different direction.  It also requires us to ask ourselves some hard questions as we work together to seek solutions to our nation’s most vexing issues. 

For one, are we willing to enter into a real discussion about the problems that we face – especially the major national and international ones?  Or are we just satisfied to be “entertained” by shouting talk shows and other vilifications featured in much of the mainstream media?  Are we willing to really listen to views different from our own and try to give the holders of such views a real chance to speak?  Do we consult news sources that do not necessarily share our political views, or do we choose not to test our understanding or conception of an issue? 

Second, are we willing to share our views, even when others might disagree?  Or do we sit back, remain silent, and allow others to speak for us?  

Third, when we do speak, do we engage respectfully and with civility?  Or do we choose words and phrases that only serve to increase division? 

And, when we do go too far, are we willing to apologize, and to do so sincerely?

These are the lessons of decency and bravery, of honor, courage, and commitment that we can take and apply in our daily discourse on current events.  Think of it as a baseline of respect that should be part of everyone’s core values.

Coincidentally, we saw a version of respectful, civic discourse play out this past weekend on – of all places – Saturday Night Live.  Recently on SNL, Pete Davidson made the regrettable decision to belittle Dan Crenshaw, a Republican congressional candidate (now Congressman-elect) who lost his eye to a roadside bomb while serving in Afghanistan as a Navy SEAL.  According to Davidson, Crenshaw’s eyepatch made him look like “a hitman in a porno movie.”  Davidson was widely criticized for going too far, and in a rare move on SNL, Davidson issued what appeared to be an earnest apology.  It was a recognition that there are some lines that we should not cross and that we are all connected together as Americans who will never forget the sacrifices veterans have made for our freedom.  For those of you who didn’t see the segment, here it is:  [U.S. Attorney McSwain plays the clip.][2]

There are several teachable moments in this segment about civility in political discourse.  For one thing, there’s more that unites us than divides us.  We are united by a commitment to recognizing right from wrong, and Davidson had the good sense to realize that he had crossed a line.  Second, this demonstrates bravery – another core military value.  It took guts for Davidson to admit he had gone too far, it took guts for Crenshaw to accept SNL’s invitation, and it took guts for SNL to run the segment. 

These questions I posed earlier, namely: are we willing to listen; are we willing to engage; are we willing to be respectful?  These are the questions we must ask ourselves, not just today and not just this week, but every day.  This is how we honor the sacrifice of our veterans – by living their core values every day.

Like other Americans, when Veterans Day arrives, I’m filled with a full spectrum of emotions – pride, nostalgia, sadness, but most of all – inspiration.  I’m inspired to be a better person by every man and woman who served our country in uniform.  I’m inspired because veterans are ordinary people who were called to serve our country in extraordinary ways. 

Let us all learn from the over 20 million military veterans currently living in the United States.[3]  Let us honor their sacrifices not just today, not just this week, but every day.  Let us carry forward these lessons into our civic discourse.  Let us listen to one another, let us choose our words carefully and let us rise above the temptation to do otherwise.

It has been said that how a nation remembers its defenders reflects its true character and conscience.  Calvin Coolidge put it more directly when he said, “The nation which forgets its defenders will be itself forgotten.”

To echo the words of Dan Crenshaw, “We will never forget.”

Again, it is an honor to be with you today – during a week that has such profound meaning for all of us and our country.  God bless you, and God Bless the United States of America.

 

---

[1] http://www.pewresearch.org/fact-tank/2018/09/04/trust-in-the-military-exceeds-trust-in-other-institutions-in-western-europe-and-u-s/ (last visited November 12, 2018).

[2] https://www.youtube.com/watch?v=GKaakjMVtyE.

[3] http://www.pewresearch.org/fact-tank/2017/11/10/the-changing-face-of-americas-veteran-population/ (citing most recent Veterans Administration study).

 

 

PHILADELPHIA – United States Attorney William M. McSwain announced today that Jose Carrillo, 27, of Oxford, PA was indicted by a federal grand jury and charged with two counts of distribution of child pornography, one count of receipt of child pornography, and one count of possession of child pornography.

The federal indictment charges him with trafficking in and possessing more than 37,000 images and videos of pornographic images of children, toddlers, and infants on the Internet. The indictment charges the defendant with committing these crimes as recently as October 18, 2018.

If convicted, Carrillo faces a statutory maximum sentence of 80 years’ incarceration, a 5-year mandatory minimum sentence of imprisonment, 5 years up to a lifetime of supervised release, a $1,000,000 fine, a $400 special assessment, and, if found not to be indigent, an additional $20,000 special assessment. 

The case was investigated by Homeland Security Investigations.  It is being prosecuted by Assistant United States Attorney Michelle Rotella.

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 Robert Dean Caesar, 56, of Oxford, Pennsylvania, was charged today by Indictment with production, receipt, and possession of child pornography. 

The Indictment alleges that on or about each of two separate dates (September 16, 2017 and December 30, 2017), Caesar manufactured child pornography.  The Indictment further alleges that Caesar received child pornography on December 20, 2017, and possessed child pornography on January 18, 2018.

If convicted as charged, the defendant faces a maximum possible sentence of 100 years’ imprisonment, a mandatory minimum term of 15 years’ imprisonment, supervised release for a minimum term of five years and a lifetime maximum term, a $1,000,000 dollar fine, mandatory restitution, and up to $20,400 in special assessments.

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 Pennsylvania State Police – Avondale Barracks and Federal Bureau of Investigation.  The case is being prosecuted by Assistant United States Attorney Seth Schlessinger.

PHILADELPHIA – United States Attorney William M. McSwain announced today that Christopher Corley a/k/a “Kuron Corley,” 25, of Philadelphia, was sentenced by United States District Judge Gene E.K. Pratter to 30 years’ imprisonment, followed by 5 years of supervised release.  Corley was found guilty by a jury last year of conspiracy to commit armed robbery and armed robbery of the Blue Grass Pharmacy located in Northeast Philadelphia.  He also was convicted of related narcotics and firearms offenses.  During the armed robbery, defendant Christopher Corley acted as the getaway driver while his armed co-conspirators demanded money and drugs from the pharmacist.

“Corley’s partners in crime terrorized the pharmacist in the course of robbing him.  They pointed a gun at the pharmacist’s face, forced him to kneel down behind the counter, and pressed that same gun against his back,” said U.S. Attorney McSwain.  “Corley made the quick getaway possible, and he reaped the benefits of his co-conspirators’ violent acts by taking his share of the money and drugs they stole.  My Office will continue to partner with local law enforcement to prosecute violent crimes to the fullest extent of the law.”

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.

This case was investigated by the FBI and the Philadelphia Police Department. It is being prosecuted by Assistant U.S. Attorney Thomas M. Zaleski.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Thomas O’Neill, 47, of Philadelphia, Pennsylvania, was charged yesterday by indictment with one count of deprivation of rights under color of law, in violation of 18 U.S.C. § 242.

According to the indictment, the defendant, while on duty as a Philadelphia Police Officer, sexually assaulted a woman on July 3, 2016.  The indictment alleges that O’Neill used a dangerous weapon in the course of the offense.

“Reducing violent crime in the Eastern District of Pennsylvania is a top priority of my Office,” said U.S. Attorney McSwain. “No matter who you are, if you commit a violent crime, we are committed to holding you accountable and keeping our community safe.”

If convicted, the defendant faces a maximum possible sentence of a maximum of 10 years’ incarceration, a 3-year period of supervised release, a $250,000 fine, and a $100 special assessment.

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department Internal Affairs Division, and is being prosecuted by Assistant United States Attorney Michelle L. Morgan.

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

PHILADELPHIA – On November 13, 2018, the Anti-Defamation League (“ADL”), the U.S. Attorney’s Office for the Eastern District of Pennsylvania (“USAO”), and the Delaware Valley Intelligence Center (“DVIC”) hosted an informational event on making religious institutions and communities more secure. Over 200 clergy, staff, lay leaders, and law enforcement personnel from eastern Pennsylvania, southern New Jersey, and Delaware gathered for a half-day summit entitled “Securing Sacred Spaces and Places.” Attendees were welcomed by ADL’s Regional Director Nancy Baron-Baer, Deputy U.S. Attorney Louis Lappen, FBI Special Agent in Charge Michael Harpster, and Philadelphia Police Commissioner Richard Ross.

“After last month’s horrific synagogue shooting in Pittsburgh, religious institutions are more concerned than ever with keeping their members safe,” said Nancy K. Baron-Baer, ADL Regional Director. “In the face of surging bigotry and emboldened extremists, faith-based communities need to be vigilant and prepared.  We are pleased that over 160 religious institutions from across the region were able to participate in today's important security summit, and we are so grateful to our law enforcement partners -- including the Delaware Valley Intelligence Center, the U.S. Attorney's Office and the FBI -- for their help in planning this conference, and for working to keep faith-based communities safe every day.”

“Religious freedom is one of the bedrock principles of our nation,” said U.S. Attorney William M. McSwain.  “We cannot be afraid for our safety when we attend and pray during religious services, whether in a church, a synagogue, a mosque, or elsewhere.  During the conference, the FBI released its annual Hate Crime Statistics report, which showed that hate crime incidents reported to the FBI increased about 17% in 2017 compared to the previous year.  The United States Attorney’s Office and our law enforcement partners are working tirelessly to ensure the security of our sacred spaces in the Eastern District of Pennsylvania.  But we cannot succeed without the help of everyone in the community.  If you see something that could lead to violence, you need to say something and call the authorities.  And when you call, we will be there to help.”

"We are helping people to keep themselves as safe as possible,” said Police Commissioner, Richard Ross.  “This collaboration is an example of federal, state and local partners working diligently to help people manage risk and prepare to know what to do should a dangerous threat arise.”

The summit focused on preparing and responding to a variety of threats facing faith-based institutions. The FBI presented on active shooter preparation and response, including a case study on the Overland Park Jewish Community Center shooting in 2014. A Senior Investigative Researcher in ADL’s Center on Extremism provided a briefing on white supremacists and their attacks against religious institutions over the past few years. The summit concluded with a panel on countering radicalization in our communities, featuring Assistant U.S. Attorney Richard Barrett, FBI Supervisory Special Agent Derek Boucher, Al Aqsa Islamic Academy School Director Chukri Korchid, and Inspector Winton Singletary of the Philadelphia Police Department. 

“Just last month, a man walked into a synagogue in Pittsburgh and, driven by what most of us would consider inexplicable hate, slaughtered 11 Jewish people as they gathered for weekly prayers. It was the deadliest hate crime against the Jewish community ever committed on American soil,” said Deputy U.S. Attorney Lappen, who gave opening remarks at the conference. “Unfortunately, this attack is part of a disturbing increase in the numbers of hate crimes committed in the United States in recent years. We are all committed to working together to combat this frightening trend.”

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Lukeen Gerald, 30, of Philadelphia, PA, was found guilty today by a jury of seven counts of Hobbs Act robbery, six counts of using a firearm during a crime of violence, one count of discharging a firearm during a crime of violence, and one count of possession of a firearm by a convicted felon.

During an approximately four-week period in early 2015, the defendant committed seven armed robberies of convenience stores and a bar in Philadelphia.  During each robbery, the defendant brandished a gun and wore a mask. In one robbery of a Dunkin Donuts, the defendant accused the store employee of moving too slowly in handing over the store’s cash and fired his gun in anger.

The defendant was arrested after his seventh robbery when his car was stopped by Philadelphia Police officers for a traffic violation and, leaving the car, he fled on foot.  After his arrest, the police recovered a shotgun, ski mask, and cash from the defendant’s car. After receiving his Miranda warnings, not only did the defendant admit he committed the robberies, but he also described each robbery in detail and told law enforcement where they could find evidence linking him to his crimes. The defendant has previously been convicted of a felony and therefore was prohibited by law from possessing a firearm.

“This defendant was a menace to the Philadelphia community,” said U.S. Attorney McSwain. “He has absolutely no respect for the law or for the safety of others. He terrorized seven different businesses in this City. During one robbery, he even brazenly shot his gun in the store – we are lucky that no one was killed. And we are thankful that he will now be spending many years behind bars.”  

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department and is being prosecuted by Assistant United States Attorneys Sarah Damiani and Roberta Benjamin.

PHILADELPHIA -- United States Attorney William M. McSwain announced today that three participants in a drug trafficking ring operating primarily in the City of Chester, pleaded guilty to drug trafficking offenses.  Co-conspirators David Toney, James Townsend, and Cheron Jackson were scheduled to begin trial on Monday, November 5, 2018, before United States District Court Judge Mitchell S. Goldberg.

From approximately January through December 2015, James Townsend was a leader of a drug trafficking group in the City of Chester.  He supplied bulk quantities of cocaine to other lower level cocaine distributors in the area.  Townsend, in turn, was supplied by David Toney – a kilogram-level drug trafficker who primarily operated out of a residence he owned in West Philadelphia.

At the conclusion of a year-long investigation, law enforcement executed search warrants on the defendants’ residences in Philadelphia, Chester, and Delaware.  Law enforcement seized approximately two kilograms of cocaine, over $80,000 in cash, five firearms, hundreds of rounds of ammunition, and paraphernalia and equipment used for drug trafficking.  Seized paraphernalia included digital scales, new and unused packaging, and a cocaine press used to re-process kilograms of cocaine.

David Toney pleaded guilty to conspiracy to distribute 500 grams or more of cocaine and possession of firearms and ammunition in furtherance of drug trafficking.  He awaits sentencing.

Townsend pleaded guilty to conspiracy to distribute 5 kilograms or more of cocaine; distribution of cocaine; possession with the intent to distribute, and aiding and abetting the possession with the intent to distribute, 500 grams or more of cocaine; and possession with the intent to distribute, and aiding and abetting the possession with the intent to distribute, 500 grams or more of cocaine within 1000 feet of the Ruth L. Bennett Homes, a public housing facility in Chester.  He is scheduled to be sentenced in February 2019.

Jackson pleaded guilty to conspiracy to distribute 500 grams or more of cocaine; possession with the intent to distribute, and aiding and abetting the possession with the intent to distribute, 500 grams or more of cocaine; and possession with the intent to distribute, and aiding and abetting the possession with the intent to distribute, 500 grams or more of cocaine within 1000 feet of the Ruth L. Bennett Homes, a public housing facility in Chester.  Jackson awaits sentencing.

“Those who supply and sell deadly drugs in the Eastern District will learn the hard way that they will be prosecuted,” said U.S. Attorney McSwain.  “These defendants now face substantial prison time for their crimes and will be held accountable for the misery they caused.  Thanks to the excellent work of our local and state law enforcement partners, we were able to detect and disrupt this deadly drug trafficking organization.”

“Every day, members of our Criminal Investigation Division stand shoulder-to-shoulder with our federal, state, and local law enforcement partners to root out dangerous drug trafficking organizations like the one these criminals operated,” said Delaware County District Attorney Katayoun M. Copeland.  “We are pleased that our ongoing efforts continue to make our community safe.”

“Cooperation between local, state, and federal law enforcement partners was instrumental in bringing these dangerous criminals to justice and making southeastern Pennsylvania safer,” said Lieutenant Colonel Robert Evanchick, Acting Pennsylvania State Police Commissioner.  “I applaud all of the investigators who worked tirelessly for twelve months to build a strong case, including overwhelming evidence against the accused, which led to today's guilty pleas.”

“The Chester Police Department is grateful for the efforts of the U.S. Attorney’s Office in securing this conviction and tying up the last loose end of this investigation,” said James Nolan, Chief of Police, City of Chester.  “Following the efforts of the Chester Police Narcotics Division, Pennsylvania State Police, the Pennsylvania Office of the Attorney General, and the Delaware County District Attorney, a plea agreement is an outcome we are pleased with.  This was a large step in offering relief to those citizens that suffer at the hands of illegal drug trafficking and the collateral damage caused by it.”

The case was investigated by the Federal Bureau of Investigation, Pennsylvania Office of the Attorney General, Pennsylvania State Police, City of Chester Police Department, and the Delaware County District Attorney’s Office–Criminal Investigation Division.  The case is being prosecuted by Assistant United States Attorneys A. Nicole Phillips and Yvonne O. Osirim.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced today that six Philadelphia women, several of whom are sisters and cousins, have been sentenced to prison and ordered to pay restitution for their role in a scheme to defraud the United States through the filing of false claims for tax refunds.

The six defendants all pleaded guilty and admitted to engaging in a scheme to present false federal income tax returns to the Internal Revenue Service (IRS), in order to to generate fraudulent federal income tax refunds.  Dozens of false tax returns were filed with the IRS, often using names and social security numbers stolen from individuals who were unaware their personal identifiers were being used to perpetrate the fraud.

Defendant Larayna Dunson, the mastermind behind this tax refund scheme, recruited family members, friends, and social acquaintances to participate.  Initially, the defendants provided taxpayer’s information (i.e., names and social security numbers) to Dunson, who in turn fabricated multiple federal income tax returns.  The defendants then shared the fraudulent refunds obtained.  Dunson subsequently taught the co-defendants how to prepare false returns using the stolen identity information.  Her co-defendants then began filing fraudulent tax returns and obtaining false refunds themselves. The total amount of fraudulent income tax refunds obtained and deposited into accounts controlled by the defendants exceeded $600,000.  The defendants used these stolen funds for living expenses, including rent and cars.

In addition to sentencing each defendant to a term of imprisonment, Judge Brody ordered the defendants to pay restitution in the total amount of $1,007,080. 

“Tax fraudsters wreak havoc on the victims whose identities they steal and on the efficient operation of the IRS,” said First Assistant United States Attorney Jennifer Arbittier Williams.  “The government loses millions of dollars of revenue each year because of criminals looking for ways to cheat the tax system, and we will continue to hold them accountable for their crimes.”

“These defendants perpetuated an elaborate scheme driven by insatiable greed and a blatant disregard for the tremendous damage inflicted on innocent victims,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco.  Be assured that IRS Criminal Investigation is serious about investigating these crimes and holding to account those who prey on innocent victims and defraud the government.” 

The case was investigated by Internal Revenue Service-Criminal Investigation and is being prosecuted by Assistant United States Attorney Denise S. Wolf.

PHILADELPHIA – United States Attorney William M. McSwain announced today that Charles Orlando, 41, of Aston Township, PA was indicted by a federal grand jury and charged with five counts of manufacturing child pornography, two counts of receipt of child pornography, and one count of possession of child pornography.

The federal indictment charges him with manufacturing sexually explicit images involving two minor girls, and with receiving and possessing an additional 1,300 pornographic images of children on the Internet. The indictment charges the defendant with committing these crimes since 2011.

“Manufacturing child pornography is one of the most serious charges that my Office pursues,” said U.S. Attorney McSwain. “We will continue to work with our law enforcement partners to stop child exploitation, as these types of crimes affect our youngest and most vulnerable members of the community.”

If convicted, Orlando faces a statutory maximum sentence of 210 years’ incarceration, a 15-year mandatory minimum sentence of imprisonment, 5 years up to a lifetime of supervised release, a $2,000,000 fine, an $800 special assessment, and, if found not to be indigent, an additional $15,000 special assessment. 

The case was investigated by the Federal Bureau of Investigation in conjunction with the Delaware County District Attorney’s Office and the Internet Crimes Against Children Unit (ICAC).  It is being prosecuted by Assistant United States Attorney Michelle Rotella.

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 today that attorneys Edward Millstein and Susan Halpern, both of Philadelphia, pled guilty to tax offenses. Millstein and Halpern, who are married, were scheduled to begin trial on Monday, November 5, 2018, before U.S. District Court Judge Cynthia M. Rufe. 

Millstein pled guilty to tax evasion, in violation of 26 U.S.C. § 7201. Millstein and Halpern owed $444,225 in taxes for the calendar years 2007 through 2011. While the Internal Revenue Service (IRS) was attempting to collect that debt, Millstein hid money in his minor children’s bank accounts to avoid IRS levies. Millstein also lied about obtaining a loan to pay the debt, and he failed to disclose a bank account that he used to deposit the $300,000 annual salary he earned from a local law firm from 2013 through 2015.

Halpern pled guilty to two counts of failure to pay taxes, in violation of 26 U.S.C. § 7203.  Millstein and Halpern filed their taxes as a married couple filing jointly. They reported an Adjusted Gross Income of $344,350 in 2010 and $394,030 in 2011. The couple paid no money towards their 2010 or 2011 tax debt. By the time the couple was indicted on April 11, 2017, they owed $143,473.35 in taxes for 2010 and $153,560.69 in taxes for 2011. At trial, the government was prepared to present testimony that Halpern had spent tens of thousands of dollars on clothing, cosmetics, jewelry, salons, private clubs, and trips abroad, but not a penny on the 2010 or 2011 tax debt.

“These defendants intentionally failed to pay taxes, instead choosing to hide their money and spend it on luxuries that they could not afford,” said U.S. Attorney McSwain. “The defendants are both attorneys—they know better.  Instead of being law-abiding citizens, they chose to deliberately cheat the system and bankroll their lavish lifestyle. This Office will continue to hold tax cheats accountable for their crimes.”

“The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS' enforcement strategy,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. "Rest assured that we will continue to protect the integrity of the tax system by ensuring that everyone pays their fair share of taxes."

Millstein faces a maximum sentence of 5 years in prison, 3 years of supervised release, a $100,000 fine, and a $100 special assessment.

Halpern faces a maximum sentence of 2 years in prison, 1 year of supervised release, a $100,000 fine, and $100 special assessment.   

Millstein and Halpern will be sentenced on February 25, 2019.

The case was investigated by the Internal Revenue Service, Criminal Investigation Unit. The case is being prosecuted by Assistant United States Attorney Jason P. Bologna.

PHILADELPHIA – United States Attorney William M. McSwain announced that Hamed Ettu, 44, of Richmond, TX was charged today by information with conspiracy to commit securities fraud.

According to the information, Damilare Sonoiki, charged elsewhere, then a junior analyst at a global investment bank in New York, provided material non-public information to Ettu. Sonoiki obtained this information in violation of his duty of confidentiality that he owed to the investment bank.

Relying on the material non-public information he received from Sonoiki, Ettu purchased call options in the target companies, Compuware and Move, between July and September, 2014.  When the proposed merger was announced in each case, the value of Ettu’s options increased significantly.  During the period of the conspiracy, Ettu made a profit of more than $93,000. 

If convicted, the defendant faces a maximum possible sentence of five years’ imprisonment, a three year period of supervised release, $250,000 fine, and a $100 special assessment. Forfeiture of all proceeds from the offense also may be ordered. 

The case was investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission, and is being prosecuted by Assistant United States Attorney David J. Ignall.

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

PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Assistant U.S. Attorney Richard P. Barrett will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming general election on November 6, 2018.  AUSA Barrett has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Pennsylvania, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with the Department of Justice in Washington D.C.

“Ensuring the fairness and stability of the election process is paramount to our democracy,” said U.S. Attorney McSwain. “Every citizen must be able to vote without interference or discrimination.  Every vote must be recorded fairly and accurately.  My Office and the Department of Justice will act promptly and aggressively to protect the integrity of the election process.  It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”

The Department of Justice has an important role in deterring election fraud and discrimination at the polls. The Department’s long-standing Election Day Program furthers these goals by ensuring public confidence in the integrity of the election process and by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on Election Day.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them.  For example, actions designed to interrupt or intimidate voters at polling places (such as 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 where voters need assistance because of disability or illiteracy.

In order to respond to complaints of election fraud or voting rights abuses on November 6, 2018, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney McSwain stated that AUSA Barrett will be on duty in this District while the polls are open.  AUSA Barrett can be reached by the public at (215) 861-8420.

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

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to voting.section@usdoj.gov or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

PHILADELPHIA – United States Attorney William M. McSwain announced today that Jacob Waitze, 23, of Southbury, Connecticut, was sentenced today to 24 months’ imprisonment, followed by 3 years’ supervised release.  Waitze previously pleaded guilty to cyberstalking in violation of 18 U.S.C. § 2261A(2)(b).

During the 2015-16 school year, Waitze, a former Drexel University student, used a computer and the Internet to engage in a campaign of harassment and intimidation against a Drexel student following a personal dispute with the student.  Waitze impersonated the victim in a variety of Internet forums, suggesting that the victim was either a pedophile who needed help or someone interested in receiving child pornography material.  In doing so, the communications and statements Waitze made typically included the victim’s true name, the victim’s actual e-mail address, photographs of the victim, and/or actual personal details concerning the victim, such as the victim’s status as a Drexel student.  As a result, the victim received multiple unwanted emails, both from persons who were offended by the posts and from persons who wanted to engage the victim in conversations related to child pornography.

“In taking on the victim’s persona online, Waitze used the Internet as a weapon to carry out his personal vendetta,” said U.S. Attorney McSwain.  “By giving others the impression that this victim was interested in child exploitation, Waitze caused the victim a great deal of harm.  Today’s sentence demonstrates that my Office will hold cyberstalkers accountable when they misuse technology in this manner.”

“HSI is hopeful that today’s sentencing provides the victim in this case a sense of relief after the months of abuse and harassment they endured at the hands of Mr. Waitze,” said Marlon V. Miller, Special Agent in Charge of HSI Philadelphia. “HSI takes these crimes seriously and will continue to work with our law enforcement partners to hold accountable cyberstalkers who cause long-lasting damage to the reputations of their victims for their own selfish gain.”

The case was investigated by Homeland Security Investigations, the Philadelphia Police Department, and the Drexel University Police Department.  The case is being prosecuted by Assistant United States Attorney Seth Schlessinger.

PHILADELPHIA – U.S. Attorney William M. McSwain and Assistant Attorney General for National Security John C. Demers announced that an Algerian man was sentenced today to 15 years’ imprisonment for conspiring to provide material support and resources to terrorists.  United States District Judge Petrese B. Tucker presided over the proceeding. 

Ali Charaf Damache, 53, also known as Theblackflag, was indicted in 2011 in the Eastern District of Pennsylvania on one count of conspiracy to provide material support to terrorists and one count of attempted identity theft to facilitate an act of international terrorism.  He was extradited from Spain in 2017 and pleaded guilty in July 2018.

Damache, his co-defendant Mohammad Hassan Khalid, and others conspired to support, recruit, and coordinate a terrorist cell, consisting of men and women from Europe and the United States, to wage violent jihad in and around Europe.  Among those with whom Damache conspired is Jamie Paulin Ramirez, a resident of Colorado, and Colleen R. LaRose, a/k/a Fatima LaRose, a/k/a Jihad Jane, a resident of the Eastern District of Pennsylvania. 

Though there were several involved in the conspiracy, Damache was the driving force behind the terrorist cell that he formed.  He enticed LaRose and Ramirez to travel to Ireland to live with him and train in the ways of violent jihad; convinced Khalid, LaRose and others to recruit men online to wage violent jihad in South Asia and Europe; and began to coordinate explosives training for his co-conspirators.  He also trained Ramirez’s young son in the ways of violent jihad.

“Today’s sentencing marks the end of a long and arduous prosecution that has spanned more than nine years, involved four defendants and five unnamed co-conspirators, and required multiple coordinated international arrests and two extradition applications,” said U. S. Attorney McSwain.  “Damache and his co-conspirators were motivated by hate and prejudice, and their criminal activities presented a very real danger to our country and the world.  This case is a prime example of the remarkable results we can accomplish when law enforcement – both foreign and domestic – work together to stop our enemies who intend to wage war on our way of life.  As this case shows, our resolve to dismantle extremists groups is stronger than ever.”

“At a time when radical terrorist groups use the Internet to recruit new members and coordinate attacks against innocent people, the National Security Division remains committed to investigating all possible threats to our country aggressively — including those that take place online,” said Assistant Attorney General Demers.  “Through close cooperation with our international law enforcement partners and the dedicated work of our agents and prosecutors, we have brought Damache to justice.  The sentence in this case and order of removal have made the United States safer, and I applaud the women and men throughout the law enforcement community who made it happen.”

This case was investigated by the FBI's Joint Terrorism Task Force in New York and the FBI Field Divisions in Philadelphia, New York, Denver, Baltimore and Washington, D.C., and the IRS.  The Justice Department’s Office of International Affairs and authorities in Spain provided substantial assistance.  Authorities in Ireland also provided assistance in this matter. 

The case is being prosecuted by First Assistant U.S. Attorney Jennifer Arbittier Williams and Assistant U.S. Attorney Sarah M. Wolfe of the Eastern District of Pennsylvania, and Trial Attorneys Matthew F. Blue and C. Alexandria Bogle of the National Security Division’s Counterterrorism Section. 

PHILADELPHIA – United States Attorney William M. McSwain announced today that pharmaceutical companies Abbott Laboratories and AbbVie Inc. (“Abbott”) will pay $25 million to resolve allegations that it employed kickbacks and unlawful methods of marketing and promotion to induce physicians to prescribe the drug TriCor®.  

The settlement resolves allegations that, between 2006 and 2008, Abbott knowingly paid kickbacks to physicians in order to induce TriCor® prescriptions. Abbott, through its sales representatives, allegedly provided physicians with improper gift baskets, gift cards, and other items to induce prescriptions of TriCor®. Abbott also engaged health care providers for consulting services and speaking engagements, where one purpose of the remuneration for the programs was to induce or reward physicians for TriCor® prescriptions. 

In addition to the kickback allegations, the settlement also resolves allegations that Abbott engaged in unlawful methods of off-label marketing and promotion relating to the sale of TriCor® for unapproved indications.  The FDA-approved indications for TriCor® during this time period were for use, in conjunction with diet, to treat patients with hypertriglyceridemia, mixed dyslipidemia, or hypertriglyceridemia.  However, Abbott marketed the drug off-label for: (1) use in treating, preventing, or reducing cardiovascular events and other cardiac health risk; (2) use in combination with statin drugs, and (3) use as a first-line treatment of diabetic patients, including treatment to prevent or reduce cardiac health risks in diabetic patients.  These uses were not FDA-approved and were not covered by federal healthcare programs.

“Federal law protects patients from medical providers who write prescriptions so they can enrich themselves, and from drug companies who do not play by the rules in their marketing and promotional efforts,” said U.S. Attorney McSwain.  “Kickback schemes are a form of illegal pay-to-play business practices that have no place in our health care system; they interfere with physician-patient relationships and drive up the cost of health care.  Off-label promotion and marketing practices similarly prioritize drug companies’ profits over patient care.  We are proud to partner with HHS-OIG to protect the integrity of our health care programs.”

“Pharmaceutical companies that ignore rules designed to protect patients will be held accountable. Patients must be able to trust that decisions made by their doctors are based on unbiased professional judgment and not personal gain,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services in Philadelphia.  “We will continue to work with the U.S. Attorney’s Office in this District to root out all forms of waste, fraud and abuse in our federal health care programs.”               

As a result of today’s $25 million settlement, the federal government will receive $23.2 million, and state Medicaid programs will receive $1.8 million.

This settlement resolves allegations in a lawsuit filed in the Eastern District of Pennsylvania by Amy Bergman, a former Abbott sales representative, under the qui tam, or whistleblower, provisions of the False Claims Act.  The qui tam provisions permit private parties to sue for false claims on behalf of the government and to receive a share of any recovery.  Ms. Bergman will receive $6.5 million as her share of the recovery in the case.

“We thank Ms. Bergman for coming forward and providing essential assistance to the government.  Preserving government program funds would be far more difficult without relators who are willing to shine a spotlight on alleged illegal practices like the ones involved in this case.  Ms. Bergman’s efforts, and those of her attorneys, were critical to our favorable resolution of this case,” said U.S. Attorney McSwain. 

This case was a cooperative effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Civil Division of the Department of Justice, the Office of the Inspector General of the Department of Health and Human Services, and the National Association of Medicaid Fraud Control Units. For the United States Attorney’s Office, Assistant United States Attorney Charlene Keller Fullmer and Auditor Dawn Wiggins handled the investigation and settlement.

The lawsuit is captioned United States ex rel. Amy Bergman, et al. v. Abbott Laboratories, Civil Action No. 2:09-cv-04264999 (E.D. Pa.).  The claims resolved by the settlement are allegations only; there has been no determination of liability. 

United States Attorney William M. McSwain announced that Passavant Memorial Homes, and its subsidiaries Passavant Development Corporation, PDC Pharmacy Philadelphia, PDC Pharmacy Pittsburgh, and PDC Pharmacy Colorado, have agreed to pay the United States $1,850,000 to resolve allegations that Passavant dispensed controlled substances to patients without a valid prescription, in violation of the Controlled Substances Act, and, in some cases, submitted claims for the drugs to Medicare and Medicaid, in violation of the False Claims Act.  Passavant has implemented a policy change to require that patients have valid prescriptions before Passavant will dispense controlled substances.

Passavant’s pharmacies serve individuals with intellectual disabilities and other mental health needs through community residential programs, residential treatment facilities, intermediate care facilities, and other facilities.  In many cases, Passavant billed federal healthcare programs, including Medicare and Medicaid, for dispensing controlled substances to these individuals.

In 2015, the government launched an investigation into these practices after Passavant voluntarily disclosed to the United States that between January 1, 2009 and December 31, 2014, Passavant had dispensed controlled substances on Schedules III, IV, and V of the DEA Controlled Substances List to patients for a legitimate medical purpose, but without a valid prescription and with only a physician order.  In many cases, Passavant submitted claims to Medicare and Medicaid for dispensing these drugs without a prescription.  Passavant voluntarily disclosed that it had dispensed controlled substances without valid prescriptions and cooperated with the government’s investigation to identify the nature and scope of the problem.

“Providers like Passavant have a special responsibility to ensure that they are complying with the prescribing and billing regulations put in place to protect patients,” said U.S. Attorney McSwain.  “Passavant discovered problems internally and took swift, corrective action to bring its pharmacy and billing practices into compliance with the law.  Passavant’s proactive approach in this case sets a good example for other providers who might find themselves facing similar challenges.”

“Registrants such as Passavant are entrusted to dispense controlled substances in accordance with federal regulations, which are intended to safeguard the public and insure that these substances are used when medically appropriate,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division.  “Our office commends Passavant for voluntarily disclosing this information and cooperating with DEA’s Diversion Control Division to rectify their prescribing practices.” 

“Ensuring patient safety and compliance with the law is a team effort,” said Maureen R. Dixon Special Agent in Charge, for the U.S. Department of Health and Human Services, Office of the Inspector General, Philadelphia Regional Office (HHS-OIG).  “HHS-OIG encourages health care providers to self-disclose issues and to work with HHS-OIG, USAO, and our federal partners to comply with laws and regulations.”

The case was handled by Assistant United States Attorneys Mark J. Sherer and Anthony D. Scicchitano of the Eastern District of Pennsylvania, Colin J. Callahan of the Western District of Pennsylvania, and Amanda Rocque of the District of Colorado.  It was investigated by the Diversion Control Division of the U.S. Drug Enforcement Administration, and the Office of Inspector General of the U.S. Department of Health and Human Services.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that United States District Judge Jeffrey L. Schmehl entered a $3 million consent judgment against Melchor Martinez, Melissa Chlebowski, both of Allentown, PA, and their businesses, as follows: Northeast Community Mental Health Centers (in Philadelphia); Lehigh Valley Community Mental Health Centers (in Allentown, Easton, and Bethlehem); and Carolina Community Mental Health Centers (in Raleigh, North Carolina). 

The consent judgment was entered on October 18, 2018 as part of a settlement resolving a civil health care fraud lawsuit filed by the U.S. Attorney’s Office for the Eastern District of Pennsylvania under the False Claims Act.   The institutional defendants are community mental health clinics that were funded largely by Medicaid and Medicare. 

Martinez was convicted of Medicaid fraud in 2000 by the Commonwealth of Pennsylvania.  As a result, he was excluded from participating in all federally funded health care programs, including Medicaid and Medicare.  The exclusion prohibited Martinez from owning, managing, or receiving payments from any federally funded health care provider.  The United States alleged in the lawsuit that in spite of his exclusion, Martinez, assisted by his wife Chlebowski, continued to own and operate the Northeast and Lehigh Valley clinics, and that he started the Carolina clinic in Raleigh, North Carolina while his exclusion was ongoing in 2009.

The United States alleged in its complaint that Chlebowski falsified Medicare and Medicaid enrollment applications by failing to disclose that Martinez, an excluded person, was managing the clinics, and that, as a result, all of the clinics’ Medicare and Medicaid claims were false. Retired former Chief Judge Lawrence Stengel, in a 2017 decision denying the defendants’ motions to dismiss the United States’ complaint, determined that such allegations state false claims under the long-recognized “fraudulent inducement” False Claims Act theory. 

The complaint also alleged that Martinez and Chlebowski funneled money from the clinics to Martinez himself, who profited from violating his exclusion, and took steps to cover it up.  The United States alleged that the Northeast and Lehigh Valley clinics paid Martinez $35,000 per month in rental payments for properties that he owned and leased to the clinics.  The pair attempted to conceal the payments to Martinez by issuing rent checks to Chlebowski or to Martinez’s shell entity, MM Consultants.  Martinez also allegedly profited when the Lehigh Valley clinic paid about half of the purchase price for an Allentown property purchased by Martinez’s shell entity, and when the Lehigh Valley clinic paid approximately $900,000 to renovate two clinic properties in Allentown and Bethlehem that were owned by Martinez or his shell entity. 

The United States also alleged other various types of fraud under Martinez’s and Chlebowski’s management of the clinics.  The complaint alleged that clinic patients, including children, were being seen by clinic doctors for psychiatric medication management (also known as “med checks”) for as little as two to three minutes, while the Northeast and Lehigh Valley clinics billed Pennsylvania Medicaid as if the patients had been seen for 15 minute visits.  

The complaint alleged that as part of the scheme, Martinez himself recruited individuals from his native Dominican Republic to work as mental health therapists in the Lehigh Valley and Northeast clinics.  The complaint further alleged that the clinics employed individuals who did not have the requisite credentials to work as mental health therapists and that, as a result, the clinics falsely billed Medicaid for services performed by unqualified persons. 

Finally, the complaint alleged that under Martinez’s and Chlebowski’s management, the Northeast and Lehigh Valley clinics failed to appropriately staff their multiple clinic locations with an onsite psychiatrist as required by Medicare rules.  As a result, the clinics fraudulently billed Medicare for services performed by therapists under the supervision of a physician when no physician was actually present.  

The consent judgment and settlement resolve a lawsuit filed under the False Claims Act (FCA) in the U.S. District Court for the Eastern District of Pennsylvania by a former employee of the Carolina Community Mental Health Clinic.  Under the qui tam or whistleblower provisions of the False Claims Act, private citizens 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.

“A federal healthcare exclusion is intended to side-line an entity or individual who has previously defrauded the government,” said U.S. Attorney McSwain.  “It must be respected – not ignored, as in this case.  Participating in and receiving payments from Medicare, Medicaid, or other federal healthcare programs while excluded is fraud, plain and simple.  This lawsuit and its resolution represent our commitment to holding accountable those who violate the terms of their exclusion.  We thank the relator and the relator’s attorney 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.

“Civil enforcement is an important tool in our ongoing battle against health care fraud,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services.  “We will continue to work closely with the United States Attorney’s Office to ensure the integrity of taxpayer funds and protect beneficiaries of federal healthcare programs.”

Prior to the United States filing its civil fraud lawsuit in 2015, the Northeast and Lehigh Valley clinics were the largest providers of mental health services to Medicaid patients in their respective regions.  They generated $75 million in combined Medicaid and Medicare payments from 2009 through 2012.  Soon after the United States filed this lawsuit, the Northeast and Lehigh Valley clinics were forced out of Pennsylvania’s Medicaid program.    

As part of the settlement with the United States, Chlebowski and the mental health clinics are excluded from participating in federal healthcare programs for a period of five years.  Martinez, who was previously excluded, is now excluded for an additional ten years based on this matter.  

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

This matter was investigated by the U.S. Department of Health and Human Services’ Office of Inspector General and the U.S. Attorney’s Office for the Eastern District of Pennsylvania, with assistance from the Pennsylvania Office of Attorney General and the North Carolina Department of Justice. The case is assigned to Assistant U.S. Attorneys Judith A. Amorosa and Viveca D. Parker of the Civil Division, health care fraud auditor George Niedzwicki, and Paralegal Specialist Patricia Bontempo.

The case is captioned United States v. Melchor Martinez, et al. / United States and State of North Carolina, ex rel. Smith v. Carolina Community Mental Health Centers, et al., No. 5:11-cv-02756 (E.D. Pa.).  The claims resolved by this settlement are allegations only and there has been no determination of liability.

PHILADELPHIA – U.S. Attorney William M. McSwain was honored to speak yesterday at the 2018 Safe Schools Summit, hosted by Delaware County District Attorney Katayoun M. Copeland in Drexel Hill, Pennsylvania. U.S. Attorney McSwain’s remarks are below.

*****

Thank you all for welcoming me here today. In particular, thank you to District Attorney Kat Copeland for inviting me to be the keynote speaker, and to her entire team for organizing such a collaborative and important event.

Ensuring the safety of everyone in the Eastern District of Pennsylvania and pursuing justice is the core mission of the U.S. Attorney’s Office. Nine counties constitute the Eastern District: Delaware, Berks, Bucks, Chester, Lancaster, Lehigh, Montgomery, Northampton, and Philadelphia. Our Office is steadfast in pursuing justice fairly and equally, no matter where a crime occurs within the District. We recognize, however, that certain crimes may affect specific communities more than others. For example, violent crime may be more prevalent in one neighborhood while drug trafficking or government fraud may more steadily plague another.         

One of my first initiatives after I was sworn in as the U.S. Attorney in April was to visit all nine counties that make up the Eastern District of Pennsylvania and meet with the respective district attorneys and local law enforcement leaders. It is a priority of my Office to continue to foster these relationships and always keep our lines of communication open. In these meetings, I could see firsthand what every community faces and hear their concerns. And more than any other concern, I am sure it will come as no surprise that the well-being of our children is on the forefront of everyone’s mind, regardless of whether one resides in a city, a suburb, or in a rural area of this great district. The safety of our children and their schools is paramount, no matter where you live. And from my meetings with federal, state, and local officials, it is clear that we all have to be in this together to prevent tragedy in our community and to help troubled individuals find the resources that they need.

School safety certainly has been at the forefront of my mind. As the U.S. Attorney, I wanted to learn more to determine how my Office and the Department of Justice could help address the issue. For example, I wanted to know the trends involving mass shootings, and how school shootings in particular fit into the bigger picture. And in researching the issue further, I discovered that it is surprisingly difficult to say how many mass shootings have occurred in the history of the United States, given that there is no universal definition or database constituting what qualifies as a “mass shooting.” One study contradicts the next, all depending on which data those particular researchers decided to include and exclude and the metrics they decided to use. It is also impossible to prove how many would-be shootings were prevented, either because of measures that schools and local governments had put in place, mental health services that were provided to students, or actions taken by attentive and proactive parents and friends.          

I was able to learn some information, however. In 2016, which is the most recent year for which the Centers for Disease Control and Prevention has published complete data, over 37,000 individuals were killed by firearms in this country. Of that number, approximately 61% - almost 23,000 – were deaths by suicide. Of the remaining 14,000 deaths by firearms, hardly any were due to school shootings.   We can and should take some comfort in that. The fact is that deadly school shootings are rare. That being said, one school shooting is one too many.

And too often in this country, we as a nation have grieved the senseless murders of innocent people as a result of domestic terrorism and mass shootings. Americans should be safe from such terror, no matter who or where they are. Studying in school or going to work, worshiping at church or cheering for friends at a marathon, relaxing at a movie theater or enjoying an evening at a night club – all of these activities should be safe-havens for every American. But as we know, places like these have sometimes turned into crime scenes where innocent lives have been lost. It cannot be stressed enough: one more mass shooting is one too many.           

I want to make clear to everyone in this room, and everyone in our extended community, that the U.S. Attorney’s Office in the Eastern District of Pennsylvania and the Department of Justice take seriously every threat of gun violence in our community and will do everything in our power to prevent tragedy from occurring. Earlier this month, the Department of Justice announced more than $70 million in grant funding under the STOP School Violence Act. These grants are provided to bolster school security, develop anonymous school threat reporting systems, educate and train students and faculty, and support law enforcement officers and first responders who arrive on the scene of a school violence incident. These grants are in addition to the funding provided to the National Association of School Resource Officers, which the Attorney General announced at the end of September, intended to expand and update the curriculum to better support training programs such as this one. The Department of Justice has also awarded more than $64 million to state agencies to improve the completeness, quality, and accessibility of the nation’s criminal record systems, which will help law enforcement and increase the effectiveness of background checks. This year, at the direction of the Attorney General, the Department also prioritized funding for projects that improve accessibility of criminal history records, domestic violence convictions, and information on individuals who are prohibited from possessing firearms for mental-health related reasons.         

Unfortunately, background checks alone will not stop a typical school shooter. After all, under Pennsylvania law, a person must be 18 years or older to possess or transport a handgun. And under federal law, a person must be 18 to purchase a long gun and related ammunition from a federal firearms licensee, and must be 21 to purchase a handgun and related ammunition from a federal firearms licensee, unless they meet a certain exception, such as an employment or hunting need. Since 1994, it has been a federal offense for any unlicensed person to transfer a handgun or handgun ammunition to anyone under the age of 18.           

My Office will continue to prosecute straw purchasers and those who illegally buy and sell firearms. But as we know all too well, many of those involved in planning or following through with a school shooting steal or borrow a legally purchased firearm from a family member or friend. According to the FBI, 68% of school shooters acquired the weapon used from their own home or that of a relative.

We strive to hold individuals accountable under federal law who threaten school shootings. In my first few months in office, as District Attorney Copeland mentioned, the U.S. Attorney’s Office federally charged a case that came out of this very County. In June of this year, An-Tso Sun was federally charged with possessing ammunition while being in the United States on a nonimmigrant visa, which is a felony under federal law. On March 26, 2018, Sun told another student from Monsignor Bonner and Archbishop Prendergast High School, “Hey, don’t come to school on May 1st . . . I’m going to come here armed and shoot up the school. Just kidding.” The student reported this conversation to a school official. Subsequently, multiple items were recovered from Sun’s bedroom, including approximately 1,600 rounds of ammunition, a cross bow and arrows, and various firearm accessories and shooting equipment. Sun pleaded guilty to this federal charge at the end of August, and the sentencing hearing is scheduled for December.           

Sun was initially charged in Delaware County by District Attorney Copeland’s Office, with making terroristic threats; he pleaded guilty to that charge in early June and was sentenced to 4-23 months incarceration. The federal charge related to his illegal possession of ammunition – a charge, I would like to point out, that is an aggravated felony that will operate as a permanent bar to his reentry into this country.          

So what can we learn from the Sun case? First, I am proud to say that this was another example of numerous investigative and operational bodies working together. From the school officials to the Upper Darby Police Department and the Delaware County District Attorney’s Office, to the Department of Homeland Security, Homeland Security Investigations and my Office, these community and law enforcement officials worked together to successfully prevent a potential school tragedy and ensure that justice prevailed in the court system.

To me, the true hero in this story is the student who heard the alleged threat and reported the incident to school officials. Thank you to that student for being a good citizen and reporting it. I know everyone in this room knows this, but it cannot be said too often: if you see something or hear something, you need to say something. Countless incidents have been averted because of vigilant people speaking up – students, teachers, and school administrators alike.

That is why today’s summit is so important. Every class today is hands-on: workshops concerning conflict management, personal self-defense, and securing and defending the classroom. Schools are already putting significant systems in place: for example, each school in Delaware County has DelPass, an alarm system in the Administrative Office that immediately notifies 911 of any incident and allows police and law enforcement officials to respond to the school immediately.

Delaware County also has put systems in place to help not just during or after an incident, but also to prevent an incident. There is a county-wide teen help line that is available for any kids to call and talk about issues. There is also the Mobile Crisis Team that provides help and services on a 24-hour basis, seven days a week. These mental health services are provided to the individual, and if necessary, to the family as a whole. 

These types of mental health services can help before something happens. But that is easy to say. As a parent myself, I know that it can be incredibly difficult to know when a teenager – dealing with hormones and peer pressure and sometimes speaking recklessly – is a threat, versus simply having a bad day or struggling with a challenging but manageable issue. In speaking with the FBI’s Campus Liaison and head of its Active Shooter Program here in Philadelphia, one thing that I thought was helpful was that he encourages teachers and parents to determine a baseline for normal behavior for each student in the first few weeks of school. It is then easier to assess if any one student drops below that baseline. The FBI has estimated that 93% of attackers planned out the attack in advance, and 93% of attackers engaged in some behavior prior to the attack that caused others to be concerned. Knowing a child’s baseline can help each of us determine if something has become amiss.

And in this day and age, there is no establishing a baseline without familiarizing yourself with a child’s technology habits. I’m curious, by a show of hands, how many of you check your child’s cell phone on a regular (at least weekly) basis? For those of you who do, that is the right instinct to have. But your inquiry cannot end there. I know many of the adults here are familiar with Facebook and Twitter; if only our children would use the websites that we use. But how many of you check your child’s Snapchat account? How about Instagram? Or Kik? Or WhatsApp? Or WeChat? Or Whisper? Or Yik Yak? And the list goes on. We cannot confront these issues without knowing what is happening in our children’s lives, and in the 21st century, their lives often play out on the Internet more than on the playground or the school bus.

After Sun was federally charged, I held a press conference at the U.S. Attorney’s Office about the case. I addressed parents, guardians, and all other adults who are responsible for children in their lives. At the end of the day, my Office can prosecute as many cases as we can; our law enforcement officials can train to respond as quickly as they can; and we can continue to have as many forums, workshops, and seminars so that all of our tireless and brave school administrators and teachers are prepared to spot warning signs and to defend their classrooms, if necessary. 

But I firmly believe that the true first responders are the parents and friends of our children. It is parents’ responsibility to know what their children are doing. No child should have access to firearms or other dangerous weapons without their parents’ or guardians’ knowledge. No child should be amassing an arsenal under the nose of the adults in their lives without the adults knowing about it. And when the adults know about it, they should do something about it. Ask questions. Go into your children’s bedrooms and look around. Pay attention to kids’ online behavior and social media accounts. Being a responsible parent means that your children’s business is your business.           

In short, law enforcement cannot do it alone. We need to keep in mind that law enforcement is not the first line of defense. That honor – that duty – belongs to our citizens. They are the ones who will see the first clues that something is amiss in their everyday lives. They are the ones who will get a bad feeling about something at their schools, in their offices, during their social activities, who will need to make the call. There are too many stories of parents, of friends, of neighbors, who belatedly say they “always knew something was off” about someone in their lives, but they did not take action. They need to know that silence is not an option and that the community is there to help.       

And a large part of the “we” answering the call is sitting in this very room. Police would not know where to go, mental health counselors would not know who to help, and my office would not know where to concentrate our efforts without your dedication and attention to the students you help each and every day. Again, if the student from the Sun case had told a school official who was not in-tune with the student body, something much more tragic could have occurred. Thank you to that school official. And thank you all for taking care of our children, keeping them intellectually curious, emotionally supported, and physically safe. The work you do is not easy; it does not always come with great fanfare or the praise and rewards that you deserve. But please know that in my opinion, and in the opinion of law enforcement officials everywhere, you are the vital lynchpin in every community. And I know I speak for many when I say that we are – and will be – forever grateful.          

Thank you, and God bless you all.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Edwin Pawlowski, the former Mayor of Allentown, Pennsylvania, was sentenced today for his role in an extensive pay to play scheme occurring between 2012 and 2015.  Chief United States District Judge Juan A. Sanchez sentenced Pawlowski to 180 months’ imprisonment, followed by 3 years of supervised release.  Chief Judge Sanchez ordered the former mayor to report to prison immediately following the hearing.

Pawlowski was the Mayor of Allentown from January 1, 2006, until his resignation on March 8, 2018.  A federal jury convicted him on March 1, 2018 of one count of conspiracy to commit wire fraud, honest services mail fraud, honest services wire fraud, bribery, and Travel Act bribery; 11 counts of bribery/soliciting; two counts of attempted Hobbs Act extortion; six counts of mail fraud; nine counts of wire fraud; two counts of honest services mail fraud; six counts of honest services wire fraud; three counts of Travel Act bribery; and seven counts of material false statements to the FBI.  

Pawlowski’s co-conspirators included the following individuals, all of whom previously pleaded guilty: Michael Fleck, a campaign consultant; Garrett Strathearn, Allentown Director of Finance; James Hickey, a business consultant; Francis Dougherty, the Allentown Managing Director; and Dale Wiles; an Allentown Assistant City Solicitor.  These defendants steered contracts to companies who would contribute money to Pawlowski’s failed campaigns to become the Governor of Pennsylvania and then to become a United States Senator.  In addition to taking campaign contributions to fund his campaigns, Pawlowski’s steering of City of Allentown contracts worth more than $5,000,000 defrauded other companies bidding on these contracts under the assumption that the contracting process would be fair and honest. When questioned by the FBI about his actions in July 2015, Pawlowski lied about what he knew and what he had done.    

“Pawlowski’s actions eroded the trust that citizens should have in their government,” said First Assistant U.S. Attorney Williams. “Taxpayers have a right to expect that their elected officials are acting in the interests of the entire city and not for their own personal advancement.  And businesses have a right to expect that when they submit contract proposals, they will be judged on the merits rather than on the size of their campaign contributions.”

Williams further said that “[e]very public official and every business development person seeking municipal contracts must understand the serious consequences that result from engaging in a bribery and fraud scheme rather than fair and honest competition.”

“Ed Pawlowski sold the city of Allentown out,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division.  “He used his position as mayor to further his political career, coolly embracing the practice of ‘pay to play.’  Though his actions have sorely betrayed the public trust, Pawlowski has expressed neither regret nor remorse.  The FBI will never stop investigating public corruption and bringing to justice those toxic officials willing to break the law.”

“Today’s sentencing confirms that public officials who break the rules and violate the public’s trust will be held accountable for their actions,” said Guy Ficco, Special Agent in Charge of IRS-Criminal Investigation.  “The Special Agents of IRS-CI remain committed to rooting out public corruption in an attempt to promote honest and ethical government on behalf of America’s law-abiding taxpayers.” 

This case was investigated by the FBI and IRS Criminal Investigations.  The case was prosecuted by Assistant United States Attorneys Anthony J. Wzorek and Michelle L. Morgan.

PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Malik Martin a/k/a “Leek,” has been convicted by a jury of conspiracy to distribute 1,000 kilograms or more of marijuana and of one count of conspiracy to commit money laundering.  The jury trial spanned four weeks and took place before United States Senior District Judge R. Barclay Surrick.

Martin also was acquitted of a second count of conspiracy to commit money laundering.  The jury was unable to reach a verdict against co-defendant Alan Womack, who was charged in a second superseding indictment with conspiracy to distribute 1,000 kilograms or more of marijuana.  Judge Surrick declared a mistrial as to co-defendant Womack.

Martin and his co-conspirators were part of a long-running drug-trafficking organization (“DTO”) which distributed 1,000 kilograms or more of marijuana, and then laundered the drug proceeds.  The DTO used a number of tractor-trailer drivers to transport bulk quantities of marijuana from Arizona, California, and Texas to the East Coast to ultimately be distributed in the greater Philadelphia area.  Martin worked closely with the head of the DTO to bring money out to the West Coast, coordinate the purchase of the marijuana on the West Coast, and load the delivery of marijuana to the East Coast.

“Martin and his co-conspirators set up a decade-long drug trafficking operation that criss-crossed the United States, leaving a path of destruction in its tracks,” said U.S. Attorney McSwain.  “Today’s victory demonstrates my Office’s steadfast commitment to taking down criminal organizations like Martin’s and cutting off the supply of illegal drugs into our communities.”

“This sprawling drug trafficking enterprise operated for many years, across thousands and thousands of miles,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “As massive amounts of marijuana and money moved across the country, Malik Martin and his co-conspirators eagerly racked up the ill-gotten gains.  The FBI will continue to investigate and disrupt drug trafficking operations, as we work to make our communities safer.”

This case was investigated by the FBI and is being prosecuted by Assistant United States Attorneys Daniel Velez and Randall Hsia.

PHILADELPHIA – United States Attorney William M. McSwain announced today that Tyron McFadden, of Philadelphia, Pennsylvania, was sentenced today to 276 months’ imprisonment, followed by 10 years of supervised release, after pleading guilty to conspiracy to distribute five kilograms or more of cocaine and 1,000 kilograms of marijuana; aiding and abetting the possession with intent to distribute cocaine and marijuana; and conspiracy to commit money laundering.  The charges arose from defendant’s involvement as the leader of a large-scale drug trafficking organization that operated from in or about the fall of 2009 through October 2015, distributing multiple kilograms of cocaine and thousands of kilograms of marijuana in the Eastern District of Pennsylvania.

McFadden transported the drugs on commercial airlines and through the United States Postal Service.  McFadden solicited the help of United States Postal employees to intercept the packages containing the drugs and deliver them directly to McFadden and his associates. McFadden continued to operate the drug organization while in custody on two separate occasions during the time frame of the conspiracy, as illustrated on recordings made from prison facilities.  

McFadden and his associates also laundered over a million dollars in drug proceeds using numerous bank accounts with financial institutions with branches in both the greater Philadelphia and Los Angeles areas.  Specifically, the organization structured the deposits in amounts less than $10,000 and often directed the owner of the bank account to withdraw the drug proceeds in California on the same day as the deposit was made in Philadelphia.

“McFadden and other members of this deadly drug organization pumped cocaine and marijuana into our community for years, profiting from other people’s misery,” said U.S. Attorney McSwain.  “Even when he was in jail, McFadden continued to try to keep his drug operation afloat.  The sentence today reflects the seriousness of his conduct and the need for leaders of drug organizations to be held accountable for their actions.” 

“Tyron McFadden and his crew moved large amounts of cocaine and marijuana across the country to push here on our streets,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Even after run-ins with the law, McFadden was so determined to continue in the drug trade, he orchestrated transactions from behind bars. The FBI will continue to investigate and dismantle drug trafficking operations like this and bring those involved to justice, as we work to protect and serve our community.”

PHILADELPHIA – U.S. Attorney William M. McSwain announced that a superseding indictment was unsealed today, charging nine members of a drug trafficking organization with multiple counts related to the distribution of large quantities of drugs in North Philadelphia, including cocaine, crack, methamphetamine, and heroin.

The following individuals, all of Philadelphia, have been charged: 

 

• Abdul West, a/k/a “Assault Rifle Ab,” “AR-Ab,” “El Patron,” “the Goon,”
• Jamaal Blanding, a/k/a “Bionickhaz,” “Khaz,” “Deangelo Smith,”
• Jameel Hickson, a/k/a “Meliano,” “OG,”
• Richard Chase Hoover, a/k/a “Boog,”
• Dontez Stewart, a/k/a “Taz,”
• Amir Boyer, a/k/a “Mulla,”
• Daryl Baker, a/k/a “Shotti,”
• Hans Gadson, a/k/a “NoBrakes Bras,” and
• Dennis Harmon.

 

The superseding indictment charges a conspiracy to distribute 5 kilograms or more of cocaine, 280 grams or more of crack, 50 grams or more of methamphetamine, and 100 grams or more of heroin.  The superseding indictment also includes individual charges of possession with intent to distribute cocaine, methamphetamine, crack, and heroin; distribution of methamphetamine; and a charge of unlawful possession of a firearm.

According to the superseding indictment, West is the leader of a local gang, and each of the defendants is a member or associate of the gang.  From at least March 2017 through June 2018, the superseding indictment alleges that these defendants have operated their drug trafficking network in the area around North Sydenham Street in Philadelphia, bringing in drugs from California and elsewhere to distribute locally, and obtaining high-end rental properties in Philadelphia through false identities to prevent detection and protect their drug supply.  On September 11, 2017, the Philadelphia Police Department executed a search warrant at a house owned by West on North Sydenham Street, recovering 62 grams of crack, 229 grams of heroin, and 48 grams of methamphetamine, as well as $8,000 in cash and a handgun.  On May 17, 2018, the FBI executed a search warrant at an apartment complex on Christopher Columbus Boulevard, recovering approximately 10 kilograms of cocaine and nearly 6 pounds of methamphetamine, along with $20,000 in cash. 

“The charges alleged in the superseding indictment are extremely serious, and if convicted, these defendants are facing major jail time,” said U.S. Attorney McSwain.  “The investigation and prosecution of drug trafficking organizations remains a high priority of this Office and the Department of Justice.  We are committed to doing everything we can to keep our streets safe and stop the flow of these deadly drugs into our communities.”

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

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

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Robert Mack, a/k/a “Tweet,” 53, of Sharon Hill, PA, was found guilty today by a jury of the following crimes: conspiracy to distribute 28 grams or more of cocaine base (one count); distribution of cocaine (one count); distribution of cocaine within 1,000 feet of a protected location (one count); possession of a firearm in furtherance of a drug trafficking crime (one count); and felon in possession of a firearm (one count).  Chief United States District Judge Juan Sanchez presided over the jury trial.

This conviction stems from the indictment and prosecution of two large-scale drug trafficking organizations operating to sell crack cocaine in and around two playgrounds located in the Mill Creek neighborhood of West Philadelphia.  The defendant and others distributed crack cocaine in and around an area known as “the Grounds” – a playground/basketball court located near the intersection of 52nd and Westminster Avenue.  The second organization sold crack in a playground, commonly referred to as “the Pit,” located near the intersection of 51st Street and Reno Street.  These two areas are within close proximity to each other (merely a few blocks away) and are separated by a baseball field on Westminster Avenue, the lower boundary of “the Grounds.”

The defendant supplied the leader of “the Grounds” with cocaine and crack cocaine, which was then packaged for distribution. The defendant possessed a firearm in furtherance of his drug trafficking crimes. Additionally, he had previously been convicted of a felony and therefore was prohibited by law from possessing a firearm.

“Playgrounds are meant for our children, not for dangerous drug traffickers armed with guns,” said U.S. Attorney McSwain.  “For years, the defendant and this violent drug trafficking organization endangered everyone in their neighborhood on a daily basis. Thanks to our dedicated partners at ATF, the Philadelphia Police Department, and our Office’s trial team, the defendant will now pay for his crimes and will no longer be allowed to menace his neighborhood.”  

“The ATF is committed to working with our federal, state and local law enforcement partners to target violent drug trafficking organizations that are responsible for drug trafficking and related gun violence in our communities,” said ATF Special Agent in Charge Donald Robinson. “This conviction is a perfect example of the collaborative effort between the ATF and the Philadelphia Police Department to target violent offenders.”

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorneys Jonathan B. Ortiz and Seth Schlessinger.

A Yeadon, Pennsylvania man was convicted by a federal jury today in the U.S. District Court for the Eastern District of Pennsylvania of one count of conspiring to defraud the United States by filing false tax returns and preparing false tax returns that generated inflated refunds for his clients and 11 counts of aiding and assisting in the filing of 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. 

According to court documents and evidence presented at trial, Deron Joe co-owned and operated a tax return preparation business. From 2007 through 2010, Joe along with his co-conspirator co-owned a tax return preparation business that prepared tax returns for clients which claimed false business expenses and other false deductions. Joe made up false Forms 2106, Unreimbursed Employee Business Expenses, and placed the false deductions on the tax returns to inflate clients’ refunds by thousands of dollars.  Joe prepared false tax returns with inflated refunds in order to grow his tax preparation business.  

U.S. District Judge Petrese B. Tucker for the Eastern District of Pennsylvania set sentencing for January 3, 2019. The defendant faces a statutory maximum possible sentence of 36 years in prison and a maximum fine of $1.35 million for all counts. 

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney McSwain commended agents of the Internal Revenue Service Criminal Investigation, who investigated the case, and Department of Justice Tax Division Trial Attorneys Christopher P. O’Donnell and Kathryn D. Sparks, who prosecuted the case.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Wayde McKelvy, of Colorado, was convicted by a jury of the following crimes: Conspiracy to Commit Wire Fraud (one count); Wire Fraud (seven counts); Conspiracy to Engage in Securities Fraud (one count); and Securities Fraud (one count).  The trial was held before United States District Judge Joel H. Slomsky.

The government established at trial that McKelvy and his co-conspirators ran an elaborate Ponzi scheme operating as Mantria Corporation, which received more than $54 million in fraudulently obtained new investor funds.  The co-conspirators promised investors huge returns, as high as 484%, for securities investments in supposedly profitable business ventures in real estate and green energy.  In reality, Mantria was a classic Ponzi scheme in which new investor money was used to pay “returns” to early investors, and the business generated meager revenues and no actual profits.  

To induce investors to invest money, McKelvy and his co-conspirators repeatedly made fraudulent representations and material omissions about the economic state of Mantria.   McKelvy also promoted himself as a financial wizard through aggressive marketing tactics, even though he had little financial acumen and was an unlicensed securities salesman.  McKelvy operated what he called “Speed of Wealth” clubs, which advertised on television, radio and the Internet, held seminars for prospective investors, and promised to make them rich.  During those seminars and other programs, McKelvy lied to prospective investors to dupe them into investing in Mantria. 

Mantria, based in Bala Cynwyd, Pennsylvania, sent McKelvy “commissions” via wire transfer to an entity he controlled called “Retirement TRACS, LLC.”  Mantria also used wire transfers to pay for other portions of the Ponzi scheme, including payments for both the real estate and green energy projects.  When the SEC shut down Mantria in November 2009, the pyramid scheme collapsed and was exposed.  

“McKelvy repeatedly lied about Mantria’s bright future in the green energy business, often delivering his sales pitch before a live audience full of prospective investors in order to dupe as many people as he could into investing in the company.  McKelvy and his co-conspirators talked a big game, promising investment returns as high as 484 percent – but it was all a ruse,” said U.S. Attorney McSwain.  “Instead of high returns, the over 300 victims of this fraud unwittingly invested in uninhabitable land and a bogus trash-to-green energy business idea based on bogus scientific methodology.  We are pleased that the jury held McKelvy accountable for his part in this massive fraud.”

“Wayde McKelvy actively marketed himself as some kind of financial genius, when in fact he was nothing but a fraud,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division.  “He and his buddies lured investors in by promising sky-high returns on their money, taking full advantage of people’s trust and their hopes for the future.  Ponzi schemes can do real damage to victims’ lives, and the FBI is determined to hold the perpetrators accountable.”

This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert Livermore and Sarah Wolfe.  Additionally, the Securities and Exchange Commission, Denver Regional Office, assisted with the investigation.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Antonio Shaw, 31, of Philadelphia, PA, was found guilty today by a jury of one count of assault with a dangerous weapon.

On October 27, 2017, the defendant was an inmate at the Federal Detention Center in Philadelphia. The government introduced evidence at trial that the defendant was involved in a previous incident concerning a second inmate. Based on the previous incident, a third inmate attempted to grab the defendant and pull him into a cell to fight, but the defendant broke free and ran away. A short time later, after lying in wait a short distance from the cell, the defendant rushed the third inmate from his blind side and repeatedly stabbed and slashed him with a sharp object. The third inmate suffered 11 separate stab and slash wounds.

“The same laws apply inside and outside of prison,” said U.S. Attorney McSwain. “The defendant clearly has no respect for the law or the safety of others. If you assault another individual, whether out on the street or at the Federal Detention Center, we can and will hold you accountable for your crime.”

“Incarcerated prisoners cannot be allowed to engage in violent behavior with impunity,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Maintaining a safe environment for federal inmates and the Bureau of Prisons personnel responsible for them is essential to the operation of FDC Philadelphia, and the integrity of the justice system.”

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

 
PHILADELPHIA – United States Attorney William M. McSwain joins the Department of Justice and other United States Attorneys across the country in commemorating the one year anniversary of the reinvigoration and enhancement of Project Safe Neighborhoods (PSN) – the centerpiece of the Department of Justice’s violent crime reduction strategy.  Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority, directing all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.

“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Jeff Sessions said.  “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsible to community needs.”

Over the past year, the Eastern District has successfully prosecuted many instances of violent crime and has partnered with all levels of law enforcement, local organizations, and members of the community to share information and make neighborhoods safer places to live and work.  

Enforcement Action through Prosecution of Violent Offenders

A central focus of the PSN strategy is to work with local law enforcement in the nine counties we serve to ensure federal efforts are focused on prosecuting the most violent offenders. Our collaboration has yielded the desired results, and the following three cases serve as excellent examples of our enforcement efforts:

• On October 2, 2018, Kareem Murphy, of Darby, Delaware County, Pennsylvania, was convicted after a jury trial of being a felon in possession of a firearm and one count of possessing a firearm in a school zone.  Murphy fired a gun into a home located less than 1,000 feet away from Delaplaine McDaniel Elementary School – the school Murphy attended as a student.  As U.S. Attorney McSwain observed when the jury returned its verdict, “The defendant endangered the lives of everyone in the vicinity, even though he should have never had a gun in the first place because of his felony conviction.  We are very lucky no one was hurt.” 
   
• On August 6, 2018, Koren Jones, of Philadelphia, Pennsylvania, was sentenced to 35 years’ imprisonment after pleading guilty to two armed robberies, one attempted robbery, and related firearms offenses – all over the course of a two-day violent crime spree in November 2016.  Jones’ two armed robberies were committed at local grocery stores, and the attempted armed robbery occurred at a deli in the same neighborhood.  As U.S. Attorney McSwain explained after the sentencing, “By seeking and obtaining a significant prison sentence in this case, we made the neighborhoods Jones terrorized safer today than yesterday.”
   
• On January 26, 2018, Herick Jaramillo, of Bethlehem, Lehigh County, Pennsylvania, was charged with six counts of armed robbery.  In May 2018, he pleaded guilty to robbing the same gas station six times over a two-month period.  He remains incarcerated and awaits sentencing.

Law Enforcement Partnerships with Pennsylvania State and Local Agencies

In the six months since U.S. Attorney McSwain took office, he has prioritized strengthening the Office’s partnerships with local and state law enforcement partners.  During his first few months in office, U.S. Attorney McSwain traveled to each of the nine counties that make up the Eastern District of Pennsylvania – many of them several times – meeting with the district attorneys as well as several local police chiefs and other law enforcement agencies to share information and ideas about how to serve the community.

Additionally, the Eastern District has participated in multiple targeted working groups to address specific areas of particular concern in the community.  For example, in February 2018, the Office formed the Opioid Law Enforcement Task Force.  Since 2017, the Office has also participated in Pennsylvania Office of the Attorney General’s Gun Violence Task Force to provide assistance with investigating cases involving firearms charges, many of which end up being prosecuted at the state level.

"The Project Safe Neighborhoods program is a prime example of a productive partnership between local, state, and federal governments, all working in the interest of public safety,” said Philadelphia Mayor Jim Kenney.  “I applaud all of our partners on this one-year anniversary of the PSN re-launch.  Collaborative efforts by our law enforcement partners such as this are key to keeping our communities safe."

"The Philadelphia Police Department recognizes that a successful violent crime prevention strategy must be comprehensive, evidence based, measurable, and include partnerships among law enforcement agencies and other stakeholders,” said Philadelphia Police Commissioner Richard J. Ross, Jr. “The Project Safe Neighborhoods (PSN) program captures each of these necessary ingredients for success. We are fortunate to have been part of the 2017 program re-launch, and join our partners in celebrating its one year anniversary."

“Every resident in the Eastern District of Pennsylvania deserves to live in a safe community,” said U.S. Attorney McSwain.  “And under my leadership, my Office will continue to aggressively pursue that goal.  We will work together, fight harder, and use every tool we can to hold violent criminals accountable to the fullest extent of the law.  That is what PSN is all about.”

Law Enforcement Partnerships with Federal Agencies

Fostering relationships with our federal law enforcement partners has been a related area of focus. In particular, the Office’s work with FBI and ATF has contributed to our success in prosecuting violent crime. 

 “We are proud be a part of the Project Safe Neighborhoods initiative alongside all of our many local, state and federal partners,” said ATF Special Agent in Charge Don Robinson. “The public deserves to live peacefully in their communities without the threat of violence.

"Combating violent crime is one of the FBI's highest priorities," said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "We're committed to this initiative and our productive partnership with the U.S. Attorney's Office and our law enforcement colleagues. Together, we’ll keep working to make everybody's neighborhood safer—corner by corner, block by block." 

Community Outreach

• The PSN Call-In Program consists of regular, face-to-face call-ins of individuals who were recently released from state custody.  The Call-In program ensures connections to critical assistance and support to the returning offenders.

• The STAR Re-entry Court program, which started over a decade ago under the Bush Administration, has continuously been viewed as the leading prisoner re-entry program in the federal system.  STAR is a partnership between U.S. Probation, U.S. District Court, the Federal Community Defender Office, and our Office.  Together, our team provides intensive supervision and resources to individuals who are returning home to Philadelphia from federal prison and are at high risk of recidivism for violent crime.

• The Eastern District’s Mental Health Court was selected this past year as a pilot program for Congress’ 21st Century Cures Act. Just last month, our Office participated in a two-day training session with other federal judicial districts with similar programs, to share ideas and learn about best practices for successfully implementing the program.

• Later this month, Relapse Prevention Court will launch in the Eastern District, and the Office will be a key contributor in identifying participants for this program.  The goal of Relapse Prevention Court is to maximize opportunities for long-term recovery from substance use and to facilitate successful completion of the participant’s term of supervised release.

Improvements to Community Safety

The FBI’s official crime data for 2017 reflects that, after two consecutive years of increases in violent crime, the nationwide violent crime rate is now trending in the right direction and began to decline in the first year of the Trump Administration – decreasing by approximately one percent in 2017.  The nationwide homicide rate showed a similar decrease, by nearly one and a half percent in 2017.  The preliminary information we have for 2018 gives us reason for optimism that our renewed efforts are continuing to pay off.

PHILADELPHIA – United States Attorney William M. McSwain announced that Alexander Davis, 32, of Monsey, New York, was found guilty after a jury trial for attempting to entice a minor to engage in sexual activity and for travel with the intent to engage in illicit sexual conduct with a minor.  The trial took place in Easton, Pennsylvania before United States District Judge Edward G. Smith.

Between December 4 and December 20, 2017, the defendant began communicating online via Craigslist with a person he believed to be a 14-year old female named “Marisa.”  In fact, “Marisa” was a Special Agent with the Pennsylvania Attorney General’s Office acting in an undercover capacity.  Both in online chats and later in text messages, the undercover agent repeatedly told Davis that she was a 14-year old girl.  Davis asked to meet “Marisa” multiple times and peppered their communications with sexual innuendo, including volunteering to bring condoms to their first sexual encounter.  Davis traveled to a McDonald’s restaurant in Bethlehem, Pennsylvania, on the agreed-upon date with condoms and was arrested.

“This predator traveled to the Eastern District of Pennsylvania with condoms in his pocket and illegal sex with a minor on his mind,” said U.S. Attorney McSwain.  “At trial, he claimed that he was role-playing, thinking that he was actually communicating with an adult, but the jury did not buy that excuse.  This sort of depravity has no place in our communities.  Thanks to smart detective work and collaboration between state and federal law enforcement agencies, Davis’s plan never came to fruition.”

“Homeland Security Investigations leaves no stone unturned in identifying and arresting perpetrators who seek to prey upon vulnerable children in our communities,” said Marlon V. Miller, Special Agent in Charge of HSI Philadelphia.  “Thanks to HSI’s partnership with the Pennsylvania Attorney General’s Office and the diligent teamwork of federal, state, and local law enforcement in this case, a potentially dangerous child predator has been convicted and will now be held accountable for his actions.”

The case was investigated by Special Agent Kathryn Murray of Homeland Security Investigations, with assistance from Special Agent Daniel Block of the Pennsylvania Attorney General’s Office, and was prosecuted by Assistant United States Attorney Josh Davison.

 

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Kareem Murphy, 36, of Darby, PA, was found guilty today by a jury of one count of being a felon in possession of a firearm and one count of possessing a firearm in a school zone.

On February 18, 2018, the Philadelphia Police Department responded to a house in Philadelphia after an officer heard the sound of a gunshot.  As law enforcement arrived on the scene, the defendant fired another gunshot through the door of the house before fleeing the scene.  Police officers arrested the defendant in a nearby alley.  The defendant fired the gun within 1,000 feet of the Delaplaine McDaniel Elementary School, and has previously been convicted of a felony and therefore was prohibited by law from possessing a firearm.

“The defendant fired a gun into a house and endangered everyone in the vicinity, even though he should never have had a gun in the first place because of his felony conviction,” said U.S. Attorney McSwain.  “Making matters worse, his crimes occurred near an elementary school, where any one of the neighborhood’s young students could have been struck.  We are very lucky that no one was injured, and I am thankful that the jury held the defendant accountable for his actions.”

“ATF’s top priority is combating violent crime; one of the ways we accomplish that mission is by keeping firearms out of the hands of violent offenders,” said Donald Robinson, Special Agent in Charge, ATF Philadelphia Field Division.  “This conviction is a perfect example of the collaborative effort between ATF, the United States Attorney’s Office and the Philadelphia Police Department in targeting violent offenders and protecting our communities.”

"The Project Safe Neighborhoods program is of tremendous benefit to local law enforcement here in Philadelphia,” said Philadelphia Police Commissioner Richard Ross. “The arrest of Kareem Murphy, and the PSN collaborations that resulted in a successful prosecution, illustrate the tangible impact that strong collective effort among law enforcement agencies can have on promoting safety and enhancing quality of life in the communities we serve."   

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

This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.  Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority.  In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.

PITTSBURGH - A resident of Pittsburgh, Pennsylvania pleaded guilty in federal court to charges of filing false income tax return and theft of government property, United States Attorney Scott W. Brady announced today.

Robert Alan Seth, Sr. pleaded guilty to two counts before United States District Judge Mark R. Hornak.

In connection with the guilty plea, the court was advised that on April 15, 2014, Seth, Sr. filed a false income tax return for the tax year 2013. Additionally, from in and around January 2009, and continuing thereafter to in and around July 2017, Seth, Sr. collected Social Security Disability Insurance benefits for himself and for his minor child in an amount totaling $248,145.90.

Judge Hornak scheduled sentencing for February 6, 2019. The law provides for a total maximum sentence of 13 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Charles A. Eberle is prosecuting this case on behalf of the government.

The Internal Revenue Service – Criminal Investigation and the Social Security Administration conducted the investigation that led to the prosecution of Robert Alan Seth, Sr.

PHILADELPHIA – First Assistant U.S. Attorney Jennifer Arbittier Williams announced today that Carl Frederic Sealey was sentenced to 78 months in prison for running a Ponzi scheme and bilking his clients out of more than $1.6 million.  United States District Court Judge Gerald J. Pappert, who presided over the proceedings, further ordered the ex-Chairman and Chief Executive Officer of Global Standard Industries (GSI) and SEK Industries (SEK) to be taken into custody immediately to begin serving his sentence.

Sealey, 43, of Cinnaminson, New Jersey, claimed that GSI was a multi-national private equity investment firm with more than 500 employees that specialized in investments of at least $50 million, more than $15 billion in managed domestic assets, and another $33 billion offshore.  Almost every investor was led to believe that the investments were risk free and that they would receive their money back with 10 percent interest within 90 days.  Additionally, Sealey lulled investors by representing to them that their “deal” had been delayed and that they could get their money back quicker if they invested additional money for other “deals” that GSI had underway.

In reality, GSI only had physical offices in Philadelphia and New York City and there were not 500 investment professionals employed by GSI.  More importantly, there were never any real estate closings or business takeovers underway by anyone at GSI.  When investors wired money to accounts exclusively maintained by Sealey, he stole their money and used the majority of the money received from investors to support an extravagant lifestyle, including a personal driver, hotel accommodations, restaurants, spa services, retail shopping, and other personal expenditures. 

“Individuals trust investment advisors with their life savings and their economic well-being,” said First Assistant U.S. Attorney Williams.  “This defendant blatantly betrayed that trust by making false promises to investors with the ultimate goal of stealing their money and living the high life with their hard-earned savings.  The sentence imposed in this case, and the order requiring the defendant to begin serving his sentence immediately after the hearing, reflect the seriousness of the charges.”

Sealey pleaded guilty to conspiracy to commit wire fraud and wire fraud in June 2018.  In addition to the sentence of 78 months, Sealey was ordered to pay more than $1,508,325 in restitution to the victims of his scheme. 

“Carl Sealey invented offices, employees, and business deals that didn’t exist, in order to win investors’ trust,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “When people bought his sales pitch, he promptly sold them out, funding his extravagant lifestyle with their money.  The FBI is gratified to help bring to justice the perpetrator of such blatant fraud.”

The investigation was led by agents from the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Anita Eve.

PHILADELPHIA – United States Attorney William M. McSwain announced today that David T. Shulick, 48, of Gladwyne, was sentenced today to a term 60 months’ imprisonment for embezzling funds from the School District of Philadelphia and for his part in a scheme to defraud PNC Bank and for filing false tax returns.  Shulick was convicted in May 2018 after a jury trial.  

At the sentencing hearing, Hon. Harvey Bartle III, found that Shulick embezzled a total of $759,735 from the School District of Philadelphia, and in the process, abused the trust placed in him by the School District.

Between 2010 and 2012, Shulick, and co-conspirator Chaka Fattah, Jr., embezzled funds from the School District of Philadelphia, in part by misrepresenting the educational services that would be provided to students pursuant to a contract between the School District and Shulick’s company, Unique Educational Experiences, Inc. (“UEE”).  Shulick secured funding from the School District by promising to provide at-risk students with a level of guidance counseling appropriate for their needs, psychological support services, and school security.  Shulick and Fattah Jr. hid the true costs of services provided by UEE by submitting false budgets to the School District of Philadelphia.  The budgets contained false entries for benefit costs, inflated staff salaries, and salaries for staff positions that were never filled at the school operated by UEE.  As a result of this scheme, defendant Shulick fraudulently obtained funds from the School District of Philadelphia that were supposed to be used to educate students.

“The Court imposed a stiff sentence for good reason in this case,” said U.S. Attorney McSwain.  “Shulick promised to provide at-risk school students with counseling, security, and support services.  He also promised to pay teachers a decent wage.  He broke all of those promises and lined his pockets with funds that he had no business taking, all the while spending hundreds of thousands of dollars renovating his Gladwyne home and his vacation home in New Jersey.  Shulick’s actions were an appalling abuse of trust, which the sentence makes clear.”

Shulick and Fattah Jr. also devised a scheme to defraud PNC Bank.  Fattah Jr. had defaulted on a loan made by PNC.  As part of the scheme, Shulick acted as Fattah Jr.’s lawyer and threatened PNC Bank with the possibility that Fattah Jr. might file bankruptcy if he were unable to resolve his outstanding debts, which would result in the bank receiving little or no repayment on the loan.  Defendant Shulick sent a letter to PNC Bank, offering to settle PNC Bank’s claim for $2,500.  The letter included a form which represented that Fattah Jr.’s monthly income was $2,500.  Shulick’s companies were paying Fattah, Jr. a salary of $75,000 per year, and Shulick and Fattah Jr. had entered into an agreement to increase Fattah Jr.’s compensation.

Shulick also filed false federal income tax returns for tax years 2009, 2010, and 2011, failed to report all of his taxable income in these years, and improperly claimed itemized deductions.  Shulick claimed money he had spent renovating his residence and New Jersey shore home as business expenses of his company.

“Not only did Shulick steal from a school district that can use every dollar it gets, he did so under the pretense of helping some of its most vulnerable students,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Instead, he turned around and used that money to support his own life of luxury.  David Shulick acted contemptibly and criminally.  The FBI is gratified to see this fraudster brought to justice, and will continue to pursue anyone embezzling money from the United States government.”    

“Not only did David Shulick use deceit and fraud to line his pockets with funds that were supposed to be used to educate students, he also skirted his tax obligations,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco.  “Mr. Shulick’s sentence should serve as a reminder that no one is above the law, especially when the integrity of tax administration is at stake.”

The case was investigated by the FBI, IRS Criminal Investigation, and the U.S. Department of Education, with the cooperation of the Philadelphia School District’s Office of Inspector General.  It is being prosecuted by Assistant United States Attorneys Michael T. Donovan and Christopher Mannion.

PHILADELPHIA, PA – United States Attorney William M. McSwain announced that his Office, along with the United States Justice Department’s Civil Rights Division, hosted a roundtable today for community organizations to discuss the problem of sexual harassment in housing.  The event hosted organizations who routinely work with vulnerable populations most likely to become victims of sexual harassment in housing:  local law enforcement agencies, legal aid offices, fair housing organizations, shelters, and transitional housing providers. 

The Department of Justice enforces the federal Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability.  Sexual harassment is a form of sex discrimination prohibited by the Act.

While most people are familiar with the problem of sexual harassment in the workplace, harassment also occurs in housing, and the Fair Housing Act prohibits it.  The Justice Department brings cases each year involving various illegal conduct, including allegations that defendants have exposed themselves sexually to current or prospective tenants, requested sexual favors in exchange for reduced rents or making necessary repairs, made unrelenting and unwanted sexual advances to tenants, and evicted tenants who resisted their sexual overtures.  Many instances of sexual harassment in housing continue to go unreported.  The Justice Department’s investigations frequently uncover sexual harassment that has been ongoing for years or decades and identify numerous victims who never reported the conduct to federal authorities.

“Sexual harassment in housing is often underreported, but it is an egregious violation of a person’s right to fair housing under federal law,” U.S. Attorney McSwain said.  “Landlords, superintendents, and others exploiting the power they have over tenants is intolerable.  Our Office is dedicated to uncovering such violations where they exist and vigorously enforcing the law.  We are working closely with the Civil Rights Division to spread the word about options to help victims who currently are experiencing sexual harassment in housing or who have experienced it in the past,” continued U.S. Attorney McSwain.  “Roundtable discussions like the one we hosted today are an important way to increase awareness, share information, and build strong partnerships in the community to combat this problem together.”

Community organizations, such as local law enforcement, legal aid offices, fair housing organizations, shelters, and transitional housing providers can identify the misconduct and encourage victims to report sexual harassment to the Civil Rights Division and the U.S. Attorney’s Office.  Local police departments or legal aid offices may also be able to help victims if the behavior is a crime or if there is an imminent eviction. 

The Department encourages anyone who has experienced sexual harassment in housing, or knows someone who has, to contact the Division by calling (844) 380-6178 or emailing fairhousing@usdoj.gov.  Individuals who believe they may have been victims of discrimination may also file a complaint with the U.S. Attorney’s Office at 615 Chestnut Street, Suite 1250, Philadelphia, PA 19106, ATTN: Jacqueline C. Romero, Civil Rights Coordinator.

PHILADELPHIA – U.S. Attorney William M. McSwain was honored to speak yesterday at the conference of the NASA Office of Inspector General in Philadelphia, Pennsylvania. U.S. Attorney McSwain’s remarks are below.

*****

Thank you very much to Inspector General Paul Martin and the entire NASA OIG for inviting me to speak here today.  It is truly an honor to join you.

I am blessed that the U.S. Attorney’s Office is filled with skilled, experienced prosecutors who want nothing more than to serve the public and do justice.  But no Assistant U.S. Attorney can win a case without the help of an outstanding law enforcement partner.  We are very thankful for our relationship with NASA OIG, and I am here today for two reasons:  first, to express my appreciation for the work you do and, second, to talk about how we can build on our existing partnership and continue to do great things together.

Many federal, state, and local agencies work with our Office in the Criminal Division or the Civil Division, depending on the subject of their work and investigations.  One attractive aspect of working with NASA is that you all are able to work equally well with both divisions of our Office, depending on the case, and you are able to achieve stellar results in both spheres.

Over the years, we have had a number of successful criminal prosecutions together.  In one recent high-profile matter, United States v. Chaka Fattah, former Congressman Fattah misused NASA grant funds to help retire some of his campaign debt.  NASA OIG assisted in this investigation, and Special Agent Michele Batignani testified at trial.  With her great work, along with the work of AUSAs Paul Gray, Eric Gibson, and many other law enforcement partners, Fattah was convicted and is currently serving a sentence of 10 years in prison.

In another significant matter, United States v. Ding and Zotova, a Lehigh University professor (Mr. Ding) and his wife submitted proposals to NASA, seeking funding for scientific research.  The defendants’ proposals claimed they would conduct the research at their business, ArkLight, and would subcontract some of the work to Lehigh, where Ding was employed as a professor.  Instead, the defendants used ArkLight as a front to funnel federal grant money to themselves for research performed by students and others working under Ding’s supervision at his university lab.  Defendants held Zotova (Ding’s wife) out to NASA as the “principal investigator,” but she never did any work on the contracts at issue. Special Agent Erik Saracino brought this case to our Office.  It was initially a case that our Civil and Criminal Divisions worked together, but that our Criminal Division ultimately pursued.  AUSA Greg David, now our Civil Division Chief – and a former NASA intern I might add – was cross-designated as a criminal AUSA to bring this case to trial with AUSA Liz Abrams.  Thanks to the dedicated work of Special Agent Saracino and AUSAs David and Abrams, after a two-week jury trial, the jury convicted the defendants of six counts of wire fraud.  Both were sentenced to time in prison.

Our Office has also had success working with NASA on the civil side.  For example, in 2014, Thermacore, Inc. agreed to pay $965,000 to resolve False Claims Act allegations.  Thermacore submitted essentially identical proposals to perform the same work to NASA and the Air Force under the Small Business Innovation Research (SBIR) program.  It was awarded both and received payment under both contracts.  Essentially equivalent research may not be funded by more than one agency and submissions under the SBIR Program must be certified as being non-duplicative.  Under the SBIR Program, therefore, it is unlawful to receive funding for essentially equivalent work already funded under any government program or to falsely certify that work is non-duplicative.  AUSA Veronica Finkelstein and Special Agent Erik Saracino worked to bring a fair and just result in this case.

I want to continue our strong partnership and continue to bring cases together in both the criminal and civil arenas.  In my first few months as U.S. Attorney, we reorganized some parts of the Office. One of the most important things we did was to form the Affirmative Civil Enforcement Strike Force in our Civil Division.  The ACE Strike Force, as it is more commonly known, will investigate and, when necessary, file lawsuits to prosecute fraud and abuse against government programs.  It will work closely with criminal prosecutors to coordinate civil and criminal investigations where appropriate.  The ACE Strike Force will investigate cases arising from a number of sources, including those brought under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.  We have always had a deep bench of talented civil attorneys who all contribute to the successful prosecution of affirmative civil enforcement and will continue to do so. But with the ACE Strike Force, we will now have additional firepower to focus on these critical matters, including those brought to us by NASA OIG.

So how can we continue to bring strong cases together?  Much of it comes down to maintaining open lines of communication.  But it also helps to keep in mind some general considerations about how we evaluate agency referrals at the intake stage.

The first thing to keep in mind when you present cases to our Office is that we are open to exploring both criminal and civil proceedings in any given case, and we consider a range of cases—from the smaller, simpler cases to the most complex of fraud schemes.  We have many tools at our disposal to stamp out fraud; the case may be appropriate for criminal investigation, civil investigation under the False Claims Act, or investigation by both divisions “in parallel” proceedings. 

Along those lines, we have no minimum or threshold loss amount.  We will consider any case that fits within the federal statute in play, and we understand that the deterrent impact of bringing a smaller case can be very important to an agency partner.  We will take that into consideration in making a charging decision.  At the same time, our Office is capable of handling the most complex white collar cases, and what we often find is that when agencies identify smaller-types of violations of agency protocol or low-level criminal conduct, it can lead to discovering other, more significant criminal conduct by the same people at the same time. 

So the first takeaway here is that no case is too small to bring to our attention, and we will determine, in each case, whether the civil enforcement or criminal charging route is appropriate.

The second thing to keep in mind as you evaluate matters is related to the first point – you should consider the wide variety of different types of behavior that could potentially fall within the purview of fraud.  Remember that fraud comes in many forms, limited only by the creativity (or lack thereof) of the fraudsters involved.  So the fraud at issue could involve grant fraud or procurement fraud, but it just as easily could involve employee embezzlement of funds or employee theft of government property, including intellectual property. 

And in any type of case, the key for us, at the intake stage, is to distinguish innocent behavior or mistakes from actions undertaken with a criminal intent to defraud.  In general, investigations should center around uncovering false statements or misappropriations that demonstrate intent.  For example, in cases involving procurement fraud, we might look for whether the same vendor continually wins bids.  We also might look for a series of revisions to contracts’ technical specifications so only one vendor is in a position to provide those particular items.  These are just a couple of examples of the types of evidence of fraud that we look for in distinguishing innocent behavior from intentionally fraudulent conduct. 

So the second takeaway here is to keep an open mind in assessing matters and to look for evidence that can be viewed as establishing fraud either directly or circumstantially.

Third, though we want you to bring us all types of cases, it is equally true that cases involving a “plus factor” are of particular interest to my Office.  And by “plus factor,” I mean that there is some substantial harm to a third party, or conduct that is particularly egregious and ongoing.  So, for example, if you discover fraudulent conduct that, in turn, could raise safety concerns that impact third parties, as can happen when there is fraud that affects the validity of data or scientific research that others are relying upon, that sort of conduct is particularly concerning.  Also, a long-standing pattern of fraud or abuse is often worthy of scrutiny.

And finally, in terms of what you, as agents, can do, it is important to know that there is a tremendous benefit to proactive agency intervention.  We saw that in the Thermacore investigation.  That investigation was prompted by NASA’s initiative to identify potential fraud in its SBIR contracts.  But even beyond audit activities, it is important to be alert to the various additional sources of useful information to build a case, including tips from outside resources and employee exit interviews – to name just two potential sources of information.

In sum, my Office is proud of our past work with you, and we are excited about our future collaboration.  Thank you for your partnership, and again, thank you for having me here today.

PHILADELPHIA – U.S. Attorney William M. McSwain was honored to speak last week at the Allentown Police Academy Graduation of the 102nd Police Training Class in Allentown, Pennsylvania. U.S. Attorney McSwain’s remarks are below.

*****

Thank you very much to Mayor Ray O’Connell, Chief of Police Tony Alsleben, Assistant Chief Stephen Vangelo, and the entire Allentown Police Academy for inviting me to speak here today. It is truly an honor to be here with you today on this very special occasion.

First and foremost, to the 102nd Police Training Class – congratulations on a job well done! You have spent the past six months working incredibly hard, day in and day out, to achieve your dreams, all with the goal of getting to this moment. There are not many days in your life that you know for certain you will remember for decades to come. But this is one of those days. Do not let the moment pass you by. Look around, at your classmates, at your future colleagues, and most importantly, at your families, and acknowledge to yourself what you have achieved to be sitting where you are today. Everyone here is incredibly proud of you, and you deserve another round of applause.

Throughout my life, I have always been interested in how others define their core values. In the program for today’s ceremony, the Law Enforcement Code of Ethics is printed. The first line reads, “As a law enforcement officer, my fundamental duty is to serve the community.” In my mind, a life of service is the most honorable and noble pursuit one can follow. As the Code details, you will safeguard the lives of others on a daily basis. You will protect the innocent and the vulnerable. You will follow and uphold the United States Constitution at all times, not only when it is convenient, but also when it might be most inconvenient.

It is by living the core values of law enforcement that has allowed the U.S. Attorney’s Office and police departments throughout the Eastern District of Pennsylvania, including Allentown, Bethlehem, and Easton, to achieve great success in the pursuit of justice and keeping our community safe. On the 17th anniversary of the terrorist attacks last week, I was humbled to stand in the Great Hall in the Justice Department headquarters in Washington D.C. to hear Attorney General Sessions give his remarks about the day that this country was changed forever. He recalled that first responders performed one of the most heroic rescue missions in our country’s history. The Attorney General noted that since September 11, 2001, the Department of Justice has secured the convictions of over 580 defendants for terrorism or terrorism-related charges, and he reiterated that the FBI has on-going terrorism investigations in all 50 states.

But the FBI is not pursuing these investigations in a silo. One of the most important lessons from that horrific day 17 years ago is that federal, state, and local authorities must have cross-jurisdictional partnerships to ensure that there is a continuous flow of intelligence and information to assist national security and public safety field operations. There are no separations or boundaries between federal, state and local law enforcement. We all work together to ensure the continued safety of this great nation. We can only succeed with the collaboration and partnership of each of you.

These partnerships cannot be built in a day. We all need to work together when times are good so that we know exactly what to do and who to call in times of crisis. To this end, one of my first initiatives when I began serving as U.S. Attorney was to visit all nine counties that make up the Eastern District of Pennsylvania and meet with the district attorneys and local law enforcement leaders in each of them. It is a priority of my Office to continue to foster these relationships and always keep our lines of communication open. These connections are crucial to keeping the community safe.

And this collaboration has already produced results. For example, together, we continue to fight the war against the opioid epidemic. Earlier this year, the U.S. Attorney’s Office announced the creation of the Opioid Law Enforcement Task Force, comprised of federal, state and local law enforcement partners. The Task Force is responsible for developing, implementing, and coordinating a robust prosecution response to this national health emergency, and the Task Force could not be successful without your partnership.

Together, we also continue to fight violent crime and drug trafficking on a daily basis. The Department of Justice has recently reinvigorated the Project Safe Neighborhoods program, which has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. To that end, my Office has brought many cases this year combatting violent crime and drug organizations, with the help of area police departments like yours. For example, Assistant U.S. Attorneys Kelly Fallenstein and Sherri Stephan are currently prosecuting a drug organization led by Defendant Jose Sanchez-Delgado. This organization used the U.S. Mail to bring heroin and cocaine from Puerto Rico to Allentown for distribution here. The Drug Enforcement Administration and the Allentown Police Department are working this case together, with

Officer Evan Weaver and Detective Randy Fey playing a leading role as FBI Task Force Officers. A total of ten defendants were indicted and charged with distributing up to 25 kilograms of cocaine. Six of these defendants have pled guilty and the rest are working their way through the criminal justice system. 

Another great example of working together is Allentown Police Detective Damian Murray, who also serves as a DEA Task Force Officer, and was named the DEA Task Force Officer of the Year for the entire Eastern District of Pennsylvania. But that is nothing new for this Department. Two years ago, in 2016, Allentown Police Sergeant Christopher Diehl was also named the DEA Task Force Officer of the Year.

I could go on and on about our successful pursuits together. It is by living by our cores values and the code of ethics that we will pursue challenging investigations, succeed in stopping crimes, and hold the responsible parties accountable. And I know that each of you will have many successes. But that does not mean that this will always be an easy road.

Indeed, it is harder today than perhaps in any time in American history to be serving in law enforcement. It has become somewhat popular in certain segments of the population to come out against the police and law enforcement. And even when a police department has an honest and open dialogue with the community about this criticism, each and every one of you will live your life under a microscope. Moreover, not only are the police under scrutiny like never before, the tools of that heightened scrutiny are ever-present. Everything that you do and everything that you say can be posted on Facebook, tweeted, and made into a national news story in a matter of seconds.

You need to be aware of this constant drumbeat of attention. But I encourage you not to shy away from it. Instead, embrace it. Because when the media and the citizens of our community actually get the opportunity to look more closely, they get to see dedicated, hard-working police officers who are keeping our communities safe every single day.

The Law Enforcement Code of Ethics notes the challenges ahead. It states that you will keep your private life unsullied “as an example to all,” and that you will “maintain courageous calm in the face of danger, scorn or ridicule.” Make no mistake – this is placing a higher standard on you than the average citizen, even when you are off-duty. The Code of Ethics notes that you “alone” are responsible for your own standard of professional performance. That being said, I want you to look around this room at your fellow graduates. You will have greater success if you help one another in being the best officers that this community expects and deserves. You are responsible for your own conduct, but you have each other to lean on and help guide one another to become the best law enforcement officers possible.

Graduates, if you remember one thing that I say today, I want you to remember this: I want you to remember the words thank you. Thank you for your future partnership with the U.S. Attorney’s Office in pursuing justice. Thank you for your future leadership in the community and for keeping all of us safe. Thank you for the sacrifices that you will make on a daily basis because of the work that you do. I know that the hours are long, the danger is real, and the salary will never match what you deserve and what you could earn in the private sector. But we do not serve for the pay or the glory. We serve because there is no greater purpose in this life than to serve others.

But our graduates today are not the only ones in this room who serve. To all of the family members here today supporting a police graduate – can you please stand up? I want all of the husbands and wives, children, mothers and fathers, sisters and brothers, aunts and uncles, grandparents – and also the close friends – to please stand up. I want to thank you for your service. These graduating men and women would never have gotten here today without you. Their long hours will be your long hours. The nights and weekends, the holidays, the sacrifices that they make will be your sacrifices, as well. And I know that you will think about the dangers that they face on a daily basis, perhaps sometimes even more than they do. You serve on a daily basis. Please know that I and every other member of this community are humbled by and grateful for your sacrifice and your service to this community and this country. Thank you for everything that you do.

In conclusion, I say to everyone here – on your longest, hardest, most challenging days, do not give up. You are on a righteous path. Remember that the U.S. Attorney’s Office stands beside you; we could not do our work without you. We see your service and we know your sacrifice. Remain determined in your pursuit of justice and hold your head high.

Thank you, congratulations, and God Bless you all.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Shyniquah Lightner, 26, of Philadelphia, pleaded guilty today to two counts of sex trafficking of a minor.

Between July 2017 and September 2017, the defendant operated a prostitution ring in Philadelphia, and co-defendant Malik Hudson assisted Lightner in the operation.  Lightner recruited females to work as prostitutes in this illegal business, and then created Internet advertisements in which she marketed various females as available for purchase for purposes of prostitution.  These advertisements featured pictures of the females, either scantily clad or partially nude, a description of each female, and a phone number to call to arrange a meeting.  Two of the females Lightner recruited and advertised were minors under 18 years of age. 

“The defendant chose to recruit and sell women for money,” said U.S. Attorney McSwain. “The U.S. Attorney’s Office remains committed to aggressively investigating and pursuing cases involving the sex trafficking of minors.”

“HSI Philadelphia is pleased that the newly formed multiagency Anti-Trafficking Coalition worked jointly on this investigation, and we look forward to expanding our partnerships with private and public entities to combat human trafficking,” said Marlon V. Miller, special agent in charge of HSI Philadelphia.

“We are privileged to have collaborated with our Human Trafficking Task Force partners in the investigation, arrest, and successful prosecution of Shyniquah Lightner,” said Philadelphia Police Commissioner Richard Ross. “As a result of this collective effort, a child predator has been brought to justice. We look forward to replicating this outcome, as we continue to focus our collective investigative efforts on those who target our most vulnerable communities.”

Lightner faces a mandatory minimum sentence of 10 years in prison with a maximum possible sentence of life in prison, a minimum of 5 years up to lifetime-supervised release, a $500,000 fine, and a $200 special assessment.

The case was investigated by the Homeland Security Investigations (HSI), the Philadelphia Police Department Special Victim’s Unit (SVU) and the Philadelphia District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Jessica Natali.  This case is part of the Philadelphia Anti-Human Trafficking Task Force.  Members of the joint task force include the HSI Philadelphia, the Philadelphia Police Department’s SVU, the Philadelphia District Attorney’s Office Family Violence & Sexual Assault Unit, the Federal Bureau of Investigation, the Salvation Army and the United States Attorney’s Office for the Eastern District of Pennsylvania.  The task force brings together the expertise, training, experience, and law enforcement authorities of the partnered agencies to help identify human traffickers, and prosecute them while also protecting and aiding survivors. 

PHILADELPHIA, PA – United States Attorney William M. McSwain today announced a $55 million civil settlement with Health Management Associates (HMA) to resolve civil allegations relating to two hospitals in Lancaster, Pennsylvania.  The resolution of these claims in the Eastern District is part of a larger $260 million settlement between the Department of Justice and HMA which arose out of HMA’s fraudulent billing practices in multiple healthcare institutions across the United States.

Between 2009 and 2012, two former HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center in Pennsylvania, billed federal health care programs for services referred to the hospitals by individual physicians and physician groups.  According to the government, HMA compensated these physicians and physician groups through complex kickback arrangements in exchange for a patient referral stream. In one instance, HMA bought two businesses from a physician group for grossly inflated amounts.  HMA also paid that same physician group under a contract that was styled as payment for services that were never performed or that neither party ever had any intention of performing. In another instance, HMA paid a local surgeon exorbitantly more than the fair market value of his services.  According to the government, these arrangements were intentionally structured to disguise payments which were, in actuality, payments for patient referrals, not for legitimate services. 

“Our resolution of this matter and the significant recovery we have obtained show once again that no matter how complex the scheme is, we will find it, stop it, and punish it,” said U.S. Attorney McSwain.  “HMA covered up kickbacks for patient referrals with a host of sham joint venture agreements, lease payments, and management agreements.  These sorts of improper physician inducements are a form of ‘pay to play’ business practices that will not be tolerated.  Healthcare institutions cannot pad their bottom line at the expense of the American taxpayers.  And most importantly, this conduct must be rooted out because it gets in the way of providing top-notch patient care to American citizens.”

The allegations resolved by the settlement were brought in eight lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery.  The eight qui tam cases, which were filed in various districts including the Eastern District of Pennsylvania, were transferred to the U.S. District Court for the District of Columbia as part of a multi-district litigation presided over by the Honorable Reggie B. Walton. 

George E. Miller and Michael J. Metts, former HMA hospital executives in Lancaster, filed suit in the Eastern District of Pennsylvania, alleging the improper financial relationships between HMA and the physicians groups.  Mr. Miller and Mr. Metts will receive approximately $12.4 million as their share of the recovery from HMA in that case.  “We sincerely thank Mr. Miller and Mr. Metts.  Together with their lawyers, these two citizens provided essential assistance to the government throughout this case.  Without the willingness of relators to shed light on allegations, 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. 

“Compliance with government healthcare rules requires that patients only receive treatment they actually need.  Then government programs should be billed just for those services.  No more, no less,” said Derrick L. Jackson, Acting Assistant Inspector General for Investigations at the U.S. Department of Health and Human Services.  “Let there be no doubt—we will continue to protect federal healthcare programs and beneficiaries by holding provider organizations fully accountable.”    

This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and U.S. Office of Personnel Management Office of the Inspector General.  For the U.S. Attorney’s Office, the investigation and settlement were handled by Assistant U.S. Attorneys Charlene Keller Fullmer and Veronica Finkelstein.

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

PHILADELPHIA, PA – United States Attorney William M. McSwain announced that Dr. Charles Garo Avetian, 55, of Newtown Square, Pennsylvania, a physician licensed in Pennsylvania, was charged today by Information with illegally distributing controlled substances and submitting false individual income tax returns.

The Information charges that Avetian, while working for entities that sold controlled prescription drugs via the Internet, issued invalid prescriptions for Fioricet, which contains butalbital, a barbiturate and Schedule III controlled substance, based solely upon his review of online questionnaires completed by the customers of the websites that employed him.  The defendant is also charged with failing to report approximately $363,830 of gross receipts earned during the tax years 2012 through 2014 on his federal income tax returns.

If convicted, the defendant faces a maximum possible sentence of 139 years’ imprisonment, a three-year period of supervised release, a $7,250,000 million fine, and a $1,600 special assessment.  

“The conduct alleged to have occurred in this case is drug dealing – plain and simple.  Although the defendant’s chosen venue was the Internet rather than a street corner, the practical effect is the same and the impact to the community is just as bad,” said U.S. Attorney McSwain.  “The consequences should similarly reflect the severity of this behavior and the alleged tax fraud.”

“There are thousands of websites that claim to be online pharmacies offering controlled substance medications without a valid prescription and from an unregulated supply chain, which pose a serious risk to public health,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration's Philadelphia Field Division.  “Dr. Avetian is accused of prescribing controlled substance medications outside of the usual course of medical practice and without a legitimate medical purpose, which are violations of federal law.”

“No matter what the source of income, all income is taxable.  Each of us is responsible for filing correct and accurate tax returns,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco.  “We will vigorously investigate those individuals who knowingly and willfully evade their tax obligation.”

The case was investigated by the Drug Enforcement Administration, the Food and Drug Administration, and the Internal Revenue Service, Criminal Investigation, and is being prosecuted by Assistant United States Attorney Frank R. Costello, Jr.

An Indictment, Information or Criminal Complaint is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Lawrence Jamieson, 59, of Malvern, Pennsylvania was sentenced today to 100 years in federal prison for sexual abuse of a minor girl, manufacture of hundreds of sexually explicit videos and images of his abuse, and the collection of more than 14.4 million images of child pornography that he downloaded from the Internet. 

Jamieson began collecting images of children being sexually assaulted approximately 15 years ago.  He collected some of the most demented images imaginable of toddlers and infants being sexually assaulted by adult men and women, and in some cases, by animals. 

During the same time that he was trafficking in child pornography, Jamieson’s conduct escalated, and he engaged in a plot to sexually assault a victim child who was in his care.  Jamieson was well acquainted with the victim; he knew she had been diagnosed on the Autism spectrum and suffered from learning disabilities and mental health issues.  He targeted this underage girl by first recruiting another adult male to pose as a teenaged boy so that they could dupe the victim into believing he was her boyfriend and gain her trust.  The “boyfriend” then engaged her in sexual activity, photographed and videotaped her, and distributed the videos and images back to Jamieson.  Her images were also distributed out to others over the Internet.

“Jamieson is the worst of the worst type of criminal – a child predator who derives satisfaction from abusing society’s must vulnerable members,” said U.S. Attorney McSwain.  “The details in this case are horrific.  This defendant amassed a collection of child pornography that exceeded 14.4 million images, reportedly the largest collection in Pennsylvania.  And on top of that, he concocted and carried out a plan to sexually abuse a child within his care – someone he knew was susceptible to his influence.  For more than 18 months, Jamieson and his co-defendant repeatedly lied to his victim and engaged in an unconscionable course of sexual abuse and exploitation.”

U.S. Attorney McSwain continued, “When it comes to protecting children from child predators, our actions will be swift and severe.  Predators, take note:  No matter who you are or where you come from, we will hunt you down, prosecute you, and put you in a jail cell for a very long time.”

In addition to the term of imprisonment, the court ordered that the defendant have no contact with the victim or her family for the rest of his life. 

The case was investigated by the FBI, the Willistown Police Department, and the Chester County District Attorney’s Office.  It was prosecuted by Assistant United States Attorney Michelle Rotella.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Dr. Tao Li, 45, of San Diego, California, pleaded guilty today to conspiracy to steal trade secrets from GlaxoSmithKline (GSK) to benefit a Chinese pharmaceutical company named Renopharma.

Dr. Li and two of his friends, Dr. Yu Xue and Dr. Yan Mei, created Renopharma in Nanjing, China, supposedly to research and develop anti-cancer drugs.  In reality, though, Renopharma was used as a repository of stolen information from GSK.  Renopharma received financial support and subsidies from the government of China.  At the time, Xue was employed as a scientist at GSK working on developing biopharmaceutical products.  These products typically cost in excess of $1 billion to research and develop. 

Xue sent a substantial number of GSK’s scientific documents, some of which contained GSK trade secrets, to Li and Mei at Renopharma in China.  The data contained information regarding multiple biopharmaceutical products under development, GSK research data, and GSK processes regarding the research, development, and manufacturing of biopharmaceutical products.  Xue typically sent the documents via e-mail or transferred the documents via portable electronic storage devices.  Xue sent these documents to Li and Mei with the intention to convert GSK’s information for their economic benefit.  On January 5, 2016, the FBI arrested Li and seized his computer on which they found a number of GSK documents containing trade secret and confidential information which he had received from Xue. Xue previously pleaded guilty on August 31, 2018.

“Dr. Li illegally stole trade secrets to benefit himself and his company, which was financed by the Chinese government,” said U.S. Attorney McSwain. “The lifeblood of companies like GSK is its intellectual property, and when that property is stolen and transferred to a foreign country, it threatens thousands of jobs here in America.  Not only is this a serious crime, but it is literally a form of economic warfare against American interests.  Such criminal behavior must be prosecuted to the fullest extent of the law.”

“GSK spends top dollar on research and development to bring new medications to market,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “The theft of valuable trade secrets threatens products in the pipeline, to the detriment of both the company and the patients those drugs might help. It adds insult to injury when that know-how is diverted for the benefit of a foreign economic rival. The FBI is determined to stand up for the innovators creating products that improve people’s lives, by investigating and holding accountable those who would steal trade secrets.”

Tao Li is scheduled to be sentenced on January 4, 2018 before the Honorable Joel H. Slomsky.  The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert J. Livermore and Katherine E. Driscoll.

PHILADELPHIA – United States Attorney William M. McSwain announced today that Franklin Renan Euceda, 29, a Honduran citizen, was sentenced today to 21 months’ imprisonment after pleading guilty to illegal re-entry after deportation.

Euceda was originally deported from the United States in 2009.  Euceda re-entered the country illegally very soon afterward, according to an aunt who testified at his sentencing hearing.

Beginning in May 2016, Euceda went on a crime spree that culminated in charges of attempted murder and conspiracy to commit murder.  First, on May 10, 2016, Philadelphia police arrested Euceda on charges of selling and delivering cocaine; he was released on bail.  Later that same month, on May 27, 2016, Philadelphia police arrested him again, this time for possessing crack cocaine with intent to deliver.  Again, Euceda was released on bail.  Then, on October 29, 2016, he was arrested a third time, this time on charges of attempted murder and conspiracy to commit murder.  According to the police report, Euceda and another man got into a heated argument with a security guard at a night club.  After the argument, Euceda and his co-conspirator got into a car, and as Euceda drove toward the club, his co-conspirator rolled down the window and opened fire at the security guard. 

Euceda eventually pleaded guilty in both drug cases and to the attempted murder and conspiracy to commit murder charges.  Additionally, he was charged by federal indictment in May 2017 with one count of illegal reentry after deportation.  He is currently serving a state sentence of 11½ - 23 months’ imprisonment.

“The chronology of events that took place in this case tells an all too familiar story,” explained U.S. Attorney McSwain.  “Euceda, a previously deported illegal alien, returned to the United States illegally and engaged in a slew of serious crimes, enabled by an arrest-and-release cycle that occurred at the local level.  His pattern of lawlessness speaks for itself:  he flouted the immigration laws; he sold cocaine; he possessed crack cocaine with an intent to sell it; and he conspired to commit murder and attempted to commit murder.  These crimes never should have occurred because Euceda had no right to be in the country in the first place.  The sentence today ensures that Euceda is punished to the fullest extent of the laws he chose to ignore.” 

U.S. Attorney McSwain continued, “The sentence also confirms that this Office will continue to hold every person accountable who violates federal law – no matter who you are or where you come from.  That is the essence of the rule of law.  Any other approach simply encourages a culture of lawlessness that jeopardizes the safety of our community and makes a mockery of the law.”

“ICE is focused on smart, effective immigration enforcement that prioritizes the removal of criminal aliens like Mr. Euceda,” said Simona L. Flores, field office director for the Philadelphia Field Office. “ERO Philadelphia will continue safeguarding the security of our nation by diligently pursuing criminal prosecution and the removal of criminal aliens.”

The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ICE”), and is being prosecuted by Assistant United States Attorney Mark Dubnoff.

PHILADELPHIA, PA – United States Attorney William M. McSwain announced today that Roger Wallach, 38, of Philadelphia, PA was sentenced today to 240 months in federal prison for manufacturing videos and images of two girls, ages 10 and 11, over a period of three months. 

Wallach previously pleaded guilty to nine counts of manufacturing and attempting to manufacture child pornography, and one count of possession of child pornography.  As part of his guilty plea, Wallach admitted that he concealed a spy watch in a bathroom and surreptitiously recorded the 10- and 11-year-old girls as they undressed, used the bathroom, and showered.  He also used the webcam on his laptop computer to record them undressing and in various states of nudity.  All total, he had hundreds of sexually explicit images of both girls that he saved on his cell phone, in his iCloud account, on his laptop, and on the memory of his spy watch.

In addition to the term of imprisonment, the court imposed a 20-year term of supervised release and ordered that the defendant undergo a sex offender evaluation and treatment after his release from federal prison. 

“Child predators are among the worst type of criminals,” said U.S. Attorney McSwain.  “They prey on those whose very innocence makes them the most likely to be targeted.  While the lengthy prison sentence and 20-year term of supervised release ordered today does not erase the defendant’s deplorable actions, it is a stern punishment that will help to protect some of society’s most vulnerable victims.”

“Wallach’s heinous crimes robbed these young girls of their innocence and childhood,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division.  Although, today’s sentence cannot repair the damage Wallach caused, it sends the message to other predators that the FBI remains committed to hunting them down and holding them accountable.”

The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Michelle Rotella.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Bryan McGraw, 49, of Philadelphia, Pennsylvania, was sentenced today to 24 months’ imprisonment for sending hundreds of harassing text messages over a four-year period.

McGraw, a former member of the Philadelphia Police Department, sent more than 500 harassing text messages to the victim from February 2014 through March 20, 2018.  During the four-year time period, the victim was dating a woman that McGraw had been romantically involved with in the past.  The anonymous harassing messages included some that were threatening to the victim and to the victim’s minor daughter.  McGraw pleaded guilty on May 9, 2018.

“This multi-year campaign of harassment affected innocent victims, including a minor child,” said U.S. Attorney McSwain. “McGraw’s words and actions show a complete lack of respect for the law he once swore to uphold and a lack of concern about the safety of the victims he terrorized.  This Office will continue to investigate and prosecute those who weaponize electronic forms of communication to further an illegal purpose.”

“As law enforcement officers we are sworn to protect those we serve,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division.  “Officer McGraw did more than fail to live up that commitment.  He repeatedly threatened the victim in this case.   Today’s sentencing affirms the FBI’s commitment to rooting out corruption at all levels of public service, especially law enforcement.”

In addition to the 24-month prison term, Chief Judge Juan Sánchez ordered McGraw to serve one year of supervised release upon release from prison and to pay a fine of $1,200 and a special assessment of $100. 

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Richard Winn, 35, of Philadelphia, PA, was found guilty after a jury trial for possession of a firearm by a convicted felon; possession with intent to distribute crack cocaine, heroin, and marijuana; and possession of a firearm in furtherance of a drug trafficking crime.

During the course of an unrelated homicide investigation, police learned of the address of a house at 1208 West Venango Street in Philadelphia where Winn and his co-defendant, Ameen Green, supplied drugs to other drug dealers and stored weapons to further their drug trafficking. The charges in this case stemmed from items found during the execution of a search warrant on September 15, 2017.

The defendant is a felon and qualifies as an Armed Career Criminal.  Co-defendant Green previously pleaded guilty.

“Convicted felons have no business possessing deadly firearms for any reason, let alone to facilitate drug crimes that plague our community,” said U.S. Attorney McSwain.  “Drugs and gun crimes decimate millions of lives every year, and as today’s verdict demonstrates, my Office will do everything in its power to fight for safer streets in our District.”

“Today’s verdict confirms the FBI’s commitment to working with our law enforcement partners to take back our communities from violent offenders and make our streets safer,” said Special Agent in Charge Michael Harpster.

This case was investigated by Special Agent Will Becker of the Federal Bureau of Investigation, with substantial assistance from the Philadelphia Police Department.  It is being prosecuted by Assistant United States Attorney Nancy Winter.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Robert P. Hoopes, 71, of Doylestown, Pennsylvania, pleaded guilty today to one count of conspiracy to commit money laundering and four counts of Hobbs Act extortion under color of official right.  From February 2016 until December 2016, Hoopes was the Director of Public Safety in Lower Southampton Township, Pennsylvania.  In this position, Hoopes had authority over all police, fire, and emergency operations in the township.  Hoopes previously operated a legal practice in the Doylestown, Pennsylvania area.   

“Our citizens have the right to expect that public officials conduct themselves in a fair, honest, and impartial manner,” said U.S. Attorney McSwain. “The defendant violated the trust placed in him by his community, placing his own greed above the needs of others. Our Office will always seek to root out corruption and hold public officials accountable for their actions.”

From 2014 to 2016, Hoopes solicited, extorted, and attempted to extort bribes and kickbacks from individuals and businesses in exchange for his influence over Lower Southampton Township’s Board of Supervisors, Solicitor, officers, and employees.  For example, Hoopes solicited bribe payments from Robert A. DeGoria, who was then the vice-president of an outdoor advertising company, in exchange for offering his influence to reduce lease payments that the company owed to Lower Southampton Township. 

In November 2016, Hoopes and co-defendant Bernard T. Rafferty, who was then a Deputy Constable in Bucks County, accepted a bribe of $1,000, as well as the promise of other fees, in exchange for Hoopes and Rafferty using their positions as public officials to “fix” a traffic case in Bucks County Magisterial District Court.

Additionally, from June 2016 to August 2016, Hoopes, Rafferty, and co-defendant Kevin M. Biedmeran, who was then a business development manager at Philadelphia Federal Credit Union, laundered $400,000 in cash, represented to be proceeds from health care fraud and illegal drug trafficking, and accepted money laundering fees totaling $80,000 in cash. 

Hoopes faces a maximum possible sentence of 100 years in federal prison for his crimes.  He is scheduled to be sentenced on December 17, 2018.

Rafferty previously pleaded guilty to conspiracy to commit money laundering and honest services mail fraud.  He is scheduled to be sentenced on November 9, 2018.

Biederman previously pleaded guilty to conspiracy to commit money laundering and bank bribery.  He is scheduled to be sentenced on November 8, 2018.

DeGoria previously pleaded guilty to one count of making a false statement to federal agents. DeGoria is scheduled to be sentenced on November 6, 2018.

In a related case, Michael J. Savona, an attorney who also served as Solicitor in Lower Southampton Township, previously pleaded guilty to one count of making a false statement to federal agents. Savona is scheduled to be sentenced on November 7, 2018.

The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigations, the Department of Homeland Security, Homeland Security Investigations, and the Pennsylvania State Police, and is being prosecuted by Assistant United States Attorney Vineet Gauri.

PHILADELPHIA – United States Attorney William M. McSwain announced today that Dr. Yu Xue, 48, of Wayne, Pennsylvania, pleaded guilty to conspiracy to steal trade secrets from GlaxoSmithKline (GSK) to benefit a Chinese pharmaceutical company named Renopharma.

Dr. Xue and two of her associates, Dr. Tao Li and Dr. Yan Mei, created Renopharma in Nanjing, China.  Renopharma intended to research and develop anti-cancer drugs and received financial support and subsidies from the government of China.  At the time, Xue was employed as a scientist at GSK working on developing biopharmaceutical products.  These products typically cost in excess of $1 billion to research and develop. 

Xue sent a substantial number of GSK’s scientific documents, some of which contained GSK trade secrets, to Li and Mei at Renopharma in China.  The data contained information regarding multiple biopharmaceutical products under development, GSK research data, and GSK processes regarding the research, development, and manufacturing of biopharmaceutical products.  Xue typically sent the documents via e-mail or transferred the documents via portable electronic storage devices.  Xue sent these documents to Li and Mei with the intention to steal GSK’s information for their economic benefit.  On January 5, 2016, the FBI arrested Li and seized his computer on which they found a number of GSK documents containing trade secret and confidential information which he had received from Xue.

“Dr. Xue used her position at GSK to steal valuable trade secrets to benefit a company bankrolled by the Chinese government,” said U.S. Attorney McSwain.  “We cannot allow U.S. citizens or foreign nationals to steal sensitive business information and hand it over to competitors in other countries.  This sort of economic warfare presents a danger to our economic security, jeopardizes America’s position as a global leader in innovation, and will not be tolerated.”

“Trade secrets are the cornerstone of American innovation and a driver of the nation's economy,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division.  “When a corporation spends billions of dollars developing products and processes, the theft of valuable intellectual property is a clear threat to the company.  When stolen trade secrets stand to benefit a foreign economic rival, it’s a threat to our country, as well.  The FBI will continue to work vigorously to combat intellectual property theft and bring those responsible to justice.”

Yu Xue is scheduled to be sentenced before the Honorable Joel H. Slomsky.  The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert J. Livermore and Katherine E. Driscoll.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that former Reading, PA Mayor Vaughn Spencer, 71, of Reading, PA was found guilty today by a jury of one count of conspiracy to commit federal program bribery and honest services wire fraud, nine counts of bribery, and one count of honest services wire fraud.

The defendant was the former Mayor of Reading, Pennsylvania from January 2012 until January 2016.  The charges primarily stem from the contracting process in the City of Reading and the defendant’s bid for re-election to a second term.  In order to maximize campaign contributions for the Democratic primary in May 2015, the defendant steered engineering contracts to companies that had contributed to him in the past, and promised engineering contracts to companies who agreed to contribute to him in the future.  In a further effort to maximize campaign contributions, the defendant offered a bribe to the Reading City Council president, Francisco Acosta, by agreeing to give Acosta’s wife, Reading School District President Rebecca Acosta, a campaign contribution for her district justice race, in exchange for the Acostas’ efforts to secure the repeal of the local campaign finance limits ordinance, so that Spencer could retain contributions he already had received in excess of the limit. 

“Elected officials are entrusted to act in the best interests of their residents and not to use their office for their own personal gain,” stated U.S. Attorney McSwain.  “Former Mayor Spencer abdicated those duties and responsibilities when he bribed other local officials in order to collect additional political contributions for his re-election campaign.  If public officials do not play by the rules, then no one will.  We are thankful that the jury reached a fair and just verdict.”

“While Vaughn Spencer was only a one-term mayor, he's done lasting damage to the city of Reading by compromising the public trust,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division.  “Putting his own interests above those of the people he was elected to serve, he repeatedly engineered quid pro quos meant to pad his campaign coffers.  The jury's swift verdict is a testament to the strength of the government's case.  The FBI is committed to investigating public corruption and holding crooked officials accountable.”

“Today’s verdict underscores our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who violate the public’s trust,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco.

“This case is a great example of hard work and cooperation between state, federal, and local agencies,” said Major Douglas Burig, Director of the Bureau of Criminal Investigation with the Pennsylvania State Police.  “Citizens deserve honest work by the public officials that represent them and we thank everyone involved for ensuring justice has been served.”

The charge of bribery concerning programs receiving federal funds carries a maximum sentence of 10 years in prison and a $250,000 fine; the charge of honest services wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine; and the charge of conspiracy carries a maximum sentence of 5 years in prison and a $250,000 fine.

The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service - Criminal Investigation and Pennsylvania State Police. The case is being prosecuted by Assistant United States Attorneys Michelle Morgan and Anthony Wzorek.