Eastern District of Pennsylvania

PHILADELPHIA - Robert Wendell Landis, 30, of Morgantown, PA, was charged today by indictment with possession, receipt and production of child pornography and online enticement, announced United States Attorney Zane David Memeger.

 

If convicted the defendant faces a maximum possible sentence of life imprisonment, with a mandatory minimum of 15 years imprisonment, lifetime supervised release, a $1,250,000 fine and a $500 special assessment.

 

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 Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Roberta Benjamin.

 

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

PHILADELPHIA – The Office of United States Attorney for the Eastern District of Pennsylvania has launched a review of 25 of Philadelphia’s most popular restaurants to determine if they are in compliance with the Americans With Disabilities Act of 1990 (the “ADA”), announced United States Attorney Zane David Memeger.  The initiative is in accordance with the Government’s congressionally-mandated responsibility to review compliance with the ADA.  It is not in response to any specific complaint against a restaurant.

 

As part of the review, restaurant owners are being asked to complete a Survey Form, supplied by the Government, pertaining to their restaurant’s accessibility.  Investigators may then conduct on-site inspections to confirm survey responses and to evaluate compliance with federal ADA regulations.  Owners and operators found to be non-compliant will have the option of entering into a Voluntary Compliance Agreement with the Government whereby they voluntarily agree to upgrade their facilities to meet ADA requirements.  Owners and operators found to be engaging in a pattern or practice of discrimination, or that fail to enter Voluntary Compliance Agreements, may face a civil lawsuit brought by the Government and/or be subject to penalties, including monetary penalties and civil fines.

 

The U.S. Attorney’s Office objectively selected the restaurants for this compliance review using recent third party restaurant rankings in order to review 25 of Philadelphia’s most popular and frequented restaurants.

 

The ADA prohibits discrimination on the basis of disability by places of public accommodation, including restaurants, and requires places of public accommodation  to be “designed, constructed, and altered in compliance with the accessibility standards established” by the ADA’s implementing regulations.

 

“People with disabilities who visit, work, or live in Philadelphia have the right to expect that all public accommodations in the city are accessible according to law,” said Memeger.  “The Americans with Disabilities Act is an important civil rights law, and restaurant owners must comply with its accessibility provisions.  We will take all reasonable steps within our power to ensure that any restaurants that fall short of compliance make the necessary changes, rather than face litigation.”

James Garner, 30, and Ruben Marshall, 48, both of Pottstown, PA, were charged today with conspiracy to commit armed bank robbery, and possession of a firearm in furtherance of a crime of violence, announced United States Attorney Zane David Memeger.  Garner is also charged with attempt to commit armed bank robbery.

 

According to the indictment, on February 6, 2015, Garner approached Person #1 about robbing the Apex Community Federal Credit Union in Stowe, PA.  On February 10, 2015, Marshall allegedly met with Garner to discuss details of the robbery plan.  The indictment further alleges that on February 12, 2015, Garner assembled the tools necessary to rob the bank - including masks, two-way radios, gloves, and a handgun - but was arrested that night by the FBI before he could complete the robbery the following morning, as planned.

 

If convicted, each defendant faces a maximum of life in prison, with a minimum mandatory sentence of five years in prison, a $250,000 fine and at least five years of supervised release.

 

The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Joseph A. LaBar.

PHILADELPHIA – Craig Brown, 46, of Philadelphia, PA, pleaded guilty today to receiving kickbacks and making false statements in a health care matter, announced United States Attorney Zane David Memeger. The defendant faces a maximum possible sentence of 25 years in prison, three years of supervised release, a $1.25 million fine, a $500 special assessment, and an order of restitution.  U.S. District Court Judge William H. Yohn, Jr. scheduled a sentencing hearing for June 10, 2015.   

 

           In July 2010, Feda Kuran, charged elsewhere, began operating Brotherly Love Ambulance, Inc. with a co-schemer.  In approximately May 2011, Craig Brown began receiving transport to dialysis by Brotherly Love, even though he could have been transported safely by means other than ambulance and was, therefore, not eligible for ambulance service under Medicare and Medicaid requirements.  Shortly thereafter, Brown began transporting himself in his personal vehicle once more, but he permitted Brotherly Love to bill for the transports as though he was being transported by ambulance.  Brown accepted monthly payments to induce him to continue to ride with Brotherly Love and, later, to induce him to allow Brotherly Love to bill for his transport even though he was driving himself.  Brown was also given payments for referring others to Brotherly Love and for transporting other purported patients of Brotherly Love in his personal vehicle even though Brotherly Love was billing for ambulance transports for those individuals.  In addition, Brown signed ambulance “run sheets” indicating that he was being transported by ambulance when, in fact, he was transporting himself to and from dialysis.

 

As a result of his actions and those of Brotherly Love, the Medicare program paid more than $18,000 in inappropriate bills.  As a result of the overall scheme at Brotherly Love, the Medicare program was billed for more than $4.9 million and paid more than $2 million in inappropriate bills.  Kuran was sentenced in November 2014 to 64 months in prison.

 

            The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Labor Office of the Inspector General.  It is being prosecuted by Assistant United States Attorneys Paul W. Kaufman and Mary Crawley.

PHILADELPHIA – McNeil-PPC Inc. pleaded guilty today to violating the federal Food, Drug and Cosmetic Act (FDCA) with regard to infants’ and children’s liquid medications, including Infants’ Tylenol, Children’s Tylenol and Children’s Motrin.  McNeil, a wholly owned subsidiary of Johnson & Johnson, was charged with delivery for introduction into interstate commerce drugs that were deemed adulterated.  It is a misdemeanor.  The company will pay a criminal fine of $20 million and forfeit $5 million.

 

The guilty plea and resolution were announced today by First Assistant U.S. Attorney Louis D. Lappen, Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, and Director George M. Karavetsos, with FDA’s Office of Criminal Investigations.

 

According to court documents, the OTC liquid drugs manufactured by McNeil at its Fort Washington facility were bottled on four lines of machinery dedicated to liquid formulations.  On or about May 1, 2009, McNeil received a complaint from a consumer regarding the presence of “black specks in the liquid on the bottom of the bottle” of Infants’ Tylenol.  The foreign material was later identified as including nickel/chromium-rich inclusions, which were not intended ingredients in this OTC liquid drug.  In connection with receiving this consumer complaint, McNeil did not initiate or complete a Corrective Action Preventive Action (CAPA) plan in conformance with current Good Manufacturing Practices.

 

The information alleges other instances in which McNeil found metal particles in bottles of Infants’ Tylenol at its Fort Washington facility, but failed to initiate or complete a CAPA.  According to the information, during a 2010 Inspection of McNeil’s Fort Washington facility, the U.S. Food and Drug Administration (FDA) asked McNeil for a list with all non-conformances for particles and the associated OTC drug batches that had occurred since an FDA inspection in 2009.  As noted in the information, this document revealed 30 batches of OTC liquid drugs, including Infants’ Tylenol, Children’s Tylenol, and Children’s Motrin.  During the 2010 inspection, the FDA asked McNeil for the CAPA plan covering the particles and foreign material found in the Infants’ and Children’s OTC drugs, and a McNeil employee confirmed that McNeil did not have such a CAPA plan.

 

On or about April 30, 2010, McNeil Consumer Health Care, a division of McNeil, in consultation with the FDA, announced that the company was recalling all lots of certain unexpired Infants’ and Children’s OTC drugs manufactured at McNeil’s Fort Washington facility and distributed in the United States and other countries around the world.  McNeil’s recall included, but was not limited to, Infants’ and Children’s Tylenol and Infants’ and Children’s Motrin.

 

Under the law, a drug is adulterated if the methods used in, or the facilities and controls used for, the manufacture, processing, packing, labeling, holding and distribution of drugs and components were not in conformance with cGMP requirements for drugs.  Drugs not manufactured, processed, packed, labeled, held and distributed in conformance with cGMP requirements are adulterated as a matter of federal law, without any showing of actual defect.

 

McNeil remains under a 2011 permanent injunction entered by the U.S. District Court in the Eastern District of Pennsylvania, requiring it to, among other things, make remedial measures before reopening its manufacturing facility in Fort Washington, Pennsylvania.

 

“The law requires that drugs be produced under the most rigorous of quality standards. When companies fail to exercise the vigilance that the law demands, they will held be accountable” said Lappen. “Drug companies should be aware that failing to adhere to good manufacturing practices subjects them to penalties and prosecution.”

 

“McNeil’s failure to comply with current good manufacturing practices is seriously troubling,” said Acting Assistant Attorney General Mizer.  “The Department of Justice will continue to be aggressive in pursuing and punishing companies such as McNeil that disregard a process designed to assure quality medicines, especially OTC drugs for infants and children.”

    

 “Drug quality – and especially with the medicines we give our children – is of paramount concern to the FDA. The FDA expects manufacturers to have systems in place that will quickly discover and correct problems with medical products before they enter the U.S. marketplace,” said Margaret A. Hamburg, M.D., Commissioner, U.S. Food and Drug Administration. “Today’s guilty plea holds accountable those corporations who risk jeopardizing the public health by not adhering to the high standards set for drug manufacturers.”

 

The case was investigated by the Food and Drug Administration Office of Criminal Investigations.  It is being prosecuted jointly by Assistant U.S. Attorney Mary Beth Leahy and Jeffrey Steger, Assistant Director with the Department of Justice Civil Division’s Consumer Protection Branch. Assistance is being provided by Consumer Protection Branch Trial Attorney Kathryn Drenning and Associate Chief Counsel for Enforcement Laura Pawloski, with the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.

PHILADELPHIA - Earl R. Russell, a/k/a “Ernest Steve Russell,” a/k/a “Ernest Steve Benders,” 57, a native of Saint Kitts-Nevis, was charged today by superseding indictment with making a materially false statement in a TWIC application regarding his citizenship and gaining entry by false pretense into a secure area of a seaport, announced United States Attorney Zane David Memeger.

 

If convicted the defendant faces a maximum possible sentence of five years and six months of imprisonment, a fine of $255,000, and a special assessment of $110 and three years of supervised release.

 

The case was investigated by the United States Coast Guard Investigative Service and Immigration and Customs Enforcement of the United States Department of Homeland Security and is being prosecuted by Assistant United States Attorney Floyd J. Miller and Special Assistant United States Attorney Mark T. Sendek.

 

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

PHILADELPHIA – A federal jury, last night, returned guilty verdicts in the case of Tanika Victoria Little, 36, of Philadelphia, PA, who was charged with two counts of bank theft and one count of possession of a firearm with an obliterated, altered or removed serial number. A sentencing hearing is scheduled for June.

 

Little was an employee of Brink’s, Inc., a national armored truck company which delivered cash to banks, among other businesses.  On February 15, 2011 and on March 1, 2011, Little came into possession of incorrectly routed bags of cash totaling approximately $110,000 in $20 denominations.  Little failed to deliver the bags of cash to Bank of America's Drexel Hill branch and began making deposits into her personal bank accounts.  Little, whose annual income from Brink=s was approximately $41,000 at the time, deposited approximately $41,840 in cash in $20 denominations into three different bank accounts between March 2, 2011 and June 1, 2011.  On June 29, 2011, within an eight-hour period of time, Little purchased 27 money orders, totaling approximately $13,000, with cash from eight different retail establishments in South Philadelphia, PA.  In addition, in 2011, Little reported that she had paid approximately $25,000 for exterior and interior home improvements in cash, including $2,000 for a remodeled bathroom, $4,300 for a remodeled kitchen, $8,500 for a remodeled basement, and $9,000 for rebricking of her home’s exterior.

 

Little faces an advisory sentencing guideline range of 30 to 37 months in prison, a fine of up to $2.1 million, a $300 special assessment, and up to five years of supervised release.

 

The case was investigated by United States Secret Service and Internal Revenue Service Criminal Investigations.  It is being prosecuted by Assistant United States Attorney Anita Eve.                                                                                                                        

PHILADELPHIA – Dr. Cynthia Masso, 42, of Philadelphia, PA, was charged today by information with five counts of obtaining controlled substances by fraud, announced United States Attorney Zane David Memeger. Masso was a physician licensed in the Commonwealth of Pennsylvania and the State of New Jersey to practice medicine and was registered and authorized by the U.S. Drug Enforcement Administration (DEA) to write prescriptions for controlled substances for legitimate medical purposes within the scope of her professional medical practice.

 

According to the information, between January of 2010 and October of 2013, Masso wrote approximately 496 fraudulent prescriptions for oxycodone and oxycodone with acetaminophen in the names of various family members, in the name of another individual, and in the names of fictitious “patients,” in order to obtain quantities of those controlled substances.  In no case were any family members aware of the writing of these prescriptions in their names. She then, allegedly, posed as a nurse named “Lisa Johns” in order to have the prescriptions filled at local pharmacies.

 

If convicted of all charges, the defendant faces a maximum possible sentence of  of 20 years in prison, a $1.25 million fine, a maximum term of one year supervised release, and a $500 special assessment.

 

The case was investigated by the Drug Enforcement Administration and is being prosecuted by Assistant United States Attorney James Pavlock.

PHILADELPHIA - Christine Yoder, 32, of Philadelphia, PA, pleaded guilty today to charges in a case of child exploitation that involved the alleged sexual abuse of a six year old and a 16 month old.  Yoder was charged with two counts of employing a child to produce images of the child engaged in sexually explicit conduct and two counts of distributing material involving the sexual exploitation of children. A sentencing hearing is scheduled for June 10, 2015.

 

In May of 2014, Yoder sent a photograph to an undercover FBI agent of a 6-year-old (“Minor #1”), which depicted that child engaging in sexually explicit conduct.  Thereafter, Yoder offered to fly Minor #1 to Detroit for sexual activity.  Yoder also produced pornographic photographs of a 16-month old.

 

Yoder faces a mandatory minimum sentence of 15 years in prison with a maximum possible sentence of life in prison.  She also faces a fine of up to $1 million, a special assessment of $400, and a mandatory minimum five-year term of supervised release up to a lifetime of supervised release.

 

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by First Assistant United States Attorney Louis D. Lappen.

PHILADELPHIA - Anthony Biello II, 56, formerly of Ambler, Pennsylvania, was sentenced today to one year and one day in prison for violating the Clean Air Act. Biello failed to notify the City of Philadelphia’s Air Management Services division of the U.S. Environmental Protection Agency of the removal of asbestos-containing material from a former church located at 1133 Spring Garden Street in Philadelphia.

 

In addition to the prison term, United States District Court Judge Paul S. Diamond ordered a $100 fine, restitution to the City of Philadelphia of $12,000, a $100 special assessment and two years of supervised release. The court also ordered that the defendant not work in the asbestos removal industry during the period of supervised release.

 

“Asbestos must be removed and disposed of safely and legally,” said David G. McLeod, Jr., Special Agent in Charge of EPA's criminal enforcement program in the Middle Atlantic States.  “There is no 'safe' level of exposure to asbestos.  It is a serious threat to the general public's health and safety.  Today's sentencing demonstrates that those who try to make money by breaking the law and putting others at potential risk will be vigorously prosecuted.”

 

The case was investigated by the Environmental Protection Agency’s Criminal Investigation Division, with assistance from the City of Philadelphia’s Air Management Services office.  The case was prosecuted by Special Assistant United States Attorneys Martin Harrell and Patricia C. Miller from the EPA.

PHILADELPHIA – Two members of the Mastronardo Bookmaking Organization, a multi-million dollar sports betting operation, were sentenced to prison today by U.S. District Court Judge Jan E. DuBois.  John Vito Mastronardo, Jr., 59, of Boca Raton, Florida, was sentenced to nine months in prison, to be followed by three years of supervised release with the first 9 months on house arrest, and a $5,000 fine.  He pleaded guilty, on February 6, 2014, to conspiring to participate in a racketeering enterprise (RICO), conducting an illegal gambling business, conducting three conspiracies to launder money, and transmitting wagering information. Joseph F. Mastronardo, 33, of Huntingdon Valley, Pennsylvania, was sentenced to five months in prison, to be followed by three years of supervised release with the first 5 months on house arrest, and a $5,000 fine.  He pleaded guilty, on January 31, 2014, to conspiring to participate in a racketeering enterprise (RICO), conducting an illegal gambling business, conspiring to launder money, and aggravated structuring.  Joseph F. Mastronardo is the son of Joseph Vito Mastronardo, Jr., who was the leader of the organization.

 

At its peak, the Mastronardo Bookmaking Organization had more than 1,000 bettors and was generating millions of dollars a year.  Between January 1, 2005 and January 1, 2011, the organization utilized internet websites (www.betroma.com and www.betrose.com) and telephone numbers that allowed bettors to place sports bets on football, baseball, basketball, golf, horse racing, and other sporting events.  Residents of Costa Rica staffed the internet websites and answered the telephones.  In 2006 and 2010, law enforcement seized over $2.1 million of cash that Joseph Vito Mastronardo, Jr., hid in and around his home, including in specially-built secret compartments and in PVC pipes that were buried in his backyard.

 

A total of 16 defendants were indicted in the case, 15 of whom were charged with conspiring to participate in a racketeering enterprise (RICO) and conducting an illegal gambling business.  All 15 pleaded guilty.  Charges against the 16th defendant, Joanna Mastronardo, will be dismissed.  U.S. District Court Judge Jan E. DuBois has ordered the forfeiture of approximately $3.7 million in the case.  Sentencing hearings are pending for 12 of the defendants.

 

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, the Montgomery County Detective Bureau, and the Montgomery County District Attorney’s Office.  It is being prosecuted by Assistant United States Attorney Jason P. Bologna and Department of Justice Trial Attorney Kelly Pearson.

PHILADELPHIA – Sam Kuttab, 55, of Wyncote, Pennsylvania, pleaded guilty today to participating in a scheme to have a Philadelphia Municipal Court Judge use his judicial position to influence the outcome of a small claims case in the Philadelphia Municipal Court, announced United States Attorney Zane David Memeger.  Kuttab, a Philadelphia area businessman, pleaded guilty to an information charging him with one count of mail fraud.

 

According to documents filed in the case, on September 30, 2011, Kuttab notified former Philadelphia Municipal Court Judge Joseph Waters that he had a small claims case pending in the Municipal Court.  Kuttab’s company, Donegal Investment Properties, was sued by another company, identified as Company B, for $2733 in unpaid fees for security services.  According to the documents, Waters then used his judicial position to achieve an outcome favorable to Kuttab.  Specifically, Waters called two other Municipal Court judges assigned to the case on different dates, explained his relationship with Kuttab, and asked them to rule in Kuttab’s favor.  In September 2011, the Municipal Court Judge identified in the information as Judge #1 granted Kuttab’s company a continuance in the case over Company B’s objection after receiving Waters’ call.  In November 2011, the Municipal Court Judge identified in the information as Judge #2 adjudicated the case in Kuttab’s favor after Waters called and said that Kuttab was “a friend of mine.”  After losing the case, the plaintiff threatened to appeal the verdict, and Waters mediated a settlement in which Kuttab agreed to pay $600 to settle the case.  After attorney fees, Company B received $400 rather than the $2733 for which he sued.

 

Kuttab admitted today that he and Donegal gained a secret advantage through a series of secret ex parte communications between Waters and the other Municipal Court judges, some of which were recorded in FBI wiretaps, and that he participated in the scheme with Waters to cause favorable rulings for Donegal.

In September 2014, Waters plead guilty for his role in fixing this case as well as fixing a criminal case conceived as part of an FBI sting operation.  He was sentenced to 24 months in prison.

 

U.S. District Court Judge Juan R. Sanchez scheduled a sentencing hearing for a date in July 2015 to be determined.  Kuttab faces a maximum statutory sentence of 20 years in prison, a fine of up to $250,000 and up to three years of supervised release.

 

The case was investigated by the FBI and is being prosecuted by Chief of the Public Corruption Unit Richard P. Barrett and 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 - Raymond Rysheem E. Starr, 21, of Philadelphia, PA was charged today by indictment with possession of a firearm by a convicted felon and possession of oxycodone, announced United States Attorney Zane David Memeger.

 

If convicted, Starr faces a maximum possible sentence of 11 years in prison, three years of supervised release and a fine of up to $500,000.

 

The case was investigated by the United States Postal Inspection Service, United States Secret Service and Federal Bureau of Investigation, with the assistance of the Philadelphia Police Department, Springfield Township, Montgomery County Police Department, Abington Police Department and the Bensalem Police Department.  It is being prosecuted by Assistant United States Attorneys K.T. Newton and Yvonne Osirim.

 

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

PHILADELPHIA - Dion Jordan, 35, of Philadelphia, Pennsylvania was charged today by indictment with attempted bank robbery, bank robbery, armed bank robbery, and discharging a firearm during and in relation to a crime of violence, announced United States Attorney Zane David Memeger.  The charges arise from an attempted robbery of Wells Fargo Bank, 8527 Germantown Avenue, Philadelphia, Pennsylvania, on or about June 2, 2014; a robbery of Wells Fargo Bank, 4275 County Line Road, Chalfont, Pennsylvania, on or about June 13, 2014; and an armed robbery of Wells Fargo Bank, 4275 County Line Road, Chalfont, Pennsylvania, on or about September 24, 2014.

 

If convicted the defendant faces a maximum possible sentence of life imprisonment.

 

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

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

PHILADELPHIA - Timothy Butler, 53, of Philadelphia, PA, was charged today by indictment with bank robbery, announced United States Attorney Zane David Memeger.

 

If convicted the defendant faces a maximum possible sentence of 20 years.

 

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Joseph A. LaBar.

PHILADELPHIA – Bogdan Kmet, 30, of Warminster, PA, an owner of Life Support Corporation, Rostislav Kmet, 26, of Philadelphia, a company manager, and Life Support, Inc., were sentenced today to 36 months in prison, 46 months in prison, and five years of probation, respectively, for an extensive health care fraud scheme.  The defendants pleaded guilty to health care fraud and paying kickbacks.  The company was located in the Feasterville-Trevose area and was incorporated in 2010. A second owner, Nazariy Kmet, 35, of Jamison, PA, is scheduled to be sentenced March 31, 2015.

 

The defendants operated an ambulance company that transported patients who were able to walk and could travel safely by means other than ambulance and who, therefore, were not eligible for ambulance transportation under Medicare requirements.  The defendants, or others acting on their behalf, falsified reports to make it appear that the patients needed to be transported by ambulance when the defendants and their employees knew that the patients could be transported safely by other means and that many of them were able to walk.  The defendants were involved in paying kickbacks to patients so that the patients would continue to be transported by Life Support, as opposed to any other ambulance company.  The defendants billed for the ambulance services as if those services were medically necessary and, as a result of the fraudulent billing, the Medicare program paid more than $1.9 million and Highmark, Inc. paid an additional amount in excess of $150,000 for this inappropriate method of transportation.

 

In addition to the prison terms, U.S. District Court Judge Nitza I. Quinones Alejandro ordered restitution of $1,912,526.32 to Medicare; restitution of $150,938.78 to Highmark, Inc.; a money judgment of $1,912,526.32; and forfeiture of vehicles.  All defendants could be excluded from participating in federal health care programs.

 

The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorney Matthew J.D. Hogan.

PHILADELPHIA - Ramon Martinez, 29, of Philadelphia, PA, was sentenced today to 35½ years in prison for armed robberies in Philadelphia and related firearm charges.  All three robberies were committed in December of 2013 at Cosi, Inc. restaurants.  On December 3, 2013, Martinez robbed the Cosi at 235 S. 15th Street, of approximately $1600; on December 9, 2013, he attempted to rob the Cosi at 140 S. 36th Street; and on December 24, 2013, he robbed the Cosi at 235 S. 15th Street, of approximately $2300.  Martinez pleaded guilty on March 24, 2014.

 

In addition to the prison term, U.S. District Court Judge Legrome D. Davis ordered five years supervised release, a $2,000 fine, a $500 special assessment and $3,900 restitution.

 

This case was investigated by the Federal Bureau of Investigation, Philadelphia Police Department, and the Philadelphia District Attorney’s Office. It was prosecuted by Assistant United States Attorney Ewald Zittlau.

PHILADELPHIA – William Conner, 61, of Philadelphia, PA, pleaded guilty today to receiving kickbacks and making false statements to law enforcement officials in connection with unnecessary ambulance transportation services. Conner faces a maximum possible sentence of 20 years in prison, three years of supervised release, a $1 million fine, a $400 special assessment, and an order of restitution.  U.S. District Court Judge William H. Yohn, Jr. scheduled a sentencing hearing for May 28, 2015.    

 

In July 2010, Feda Kuran, charged elsewhere, began operating Brotherly Love Ambulance, Inc. with a co-schemer.  Even though he could have been transported safely by other means and was, therefore, not eligible for ambulance service under Medicare and Medicaid requirements, Conner began using Brotherly Love for transportation to dialysis treatments. Conner accepted monthly payments from Kuran and others to induce him to continue to ride with Brotherly Love and, as a result of his actions and those of Brotherly Love, the Medicare program paid more than $55,000 in inappropriate bills.  As a result of the overall scheme at Brotherly Love, the Medicare program paid more than $2 million in inappropriate bills.  When interviewed by federal law enforcement officers about receiving payments, Conner lied, denying that he had received cash from Brotherly Love.  Kuran was sentenced in November 2014 to 64 months in prison.

 

The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Labor Office of the Inspector General.  It is being prosecuted by Assistant United States Attorneys Matthew J.D. Hogan and Paul W. Kaufman.

 

A jury today returned guilty verdicts against Mykhaylo Botsvynyuk, and his brother Yaroslav Botsvynyuk, a/k/a Yaroslav Churuk, both Ukrainian nationals living in Canada, on the charge of conspiracy to participate in a racketeering enterprise in connection with a human trafficking scheme.  They face up to 20 years in prison. The defendants’ brothers, Omelyan and Stepan Botsvynyuk, were convicted at trial in October of 2011. A fifth brother, Dmytro Botsvynyuk, remains in Ukraine, a country that has not entered into an extradition treaty with the United States.

From the Fall of 2000 through the Spring of 2007, the defendants operated a human trafficking organization which smuggled young Ukrainian immigrants into the United States and then forced them to work for little or no pay. The defendants promised the victims they would earn $500 per month with free room and board by working for their organization.  They smuggled the workers into the United States then put them to work as cleaning crews in retail stores, private homes, and office buildings without paying them.  They used physical force, threats of force, sexual assault, and debt bondage to keep the victims in involuntary servitude. Even after some of the victims escaped, the defendants continued with their extortionist activities in order to recoup the organization’s investment in the workers.  If direct threats failed and the workers did not return or make good on their debts, the Botsvynyuk brothers threatened violence to the workers’ families still residing in Ukraine.  Some of the threats included threats to place the children of the workers, children who were still in Ukraine, into prostitution to work off the victims’ debts if the victims ran away.

Rather than bringing the workers to the United States legally, the Botsvynyuk Organization obtained tourist visas to Mexico and had operatives who coached the workers on how to enter the United States illegally. While some of the workers successfully entered the United States, others were taken into custody by U.S. immigration officials, where they remained in detention for almost two months.  Once the victims were released, with immigration documents and summonses to appear for immigration hearings, the Botsvynyuk Organization transported them to Philadelphia, Pennsylvania, either by bus or by plane.  The brothers then confiscated the immigration documents and summonses from the workers and put them to work cleaning large chain stores at night, such as Target, Acme, Best Buy and Walmart, as well as smaller stores.  Throughout their employment with the brothers, the workers lived with up to five people in one room, slept on dirty mattresses on the floor, and were rarely, if ever, paid.  None of the victims was paid what was promised and they were told that they had to continue working until their debts, usually $10,000 or more, were paid.  Workers were allegedly struck and beaten, sometimes in the presence of others, if they attempted to quit or leave the employ of the Botsvynyuk brothers.  One female worker was brutally raped by one of the coconspirators.  After some workers escaped, Omelyan Botsvynyuk resorted to extorting the workers’ families in Ukraine, threatening them with harm if the workers did not return to work or pay their debts.  In one instance, he threatened the mother of a victim that he would kidnap her younger son and send him back to her finger-by-finger if the victim did not return to work.

Omelyan Botsvynyuk was sentenced to life in prison plus 20 years and was ordered to pay restitution in the amount of $288,272.29; Stepan was sentenced to 20 years in prison and was ordered to pay restitution in the amount of $288,272.28.

The case was investigated by the Joint FBI Organized Crime/ICE Human Trafficking Alien Smuggling Task Force.  Assistance was provided by Pennsylvania State Police, the Philadelphia Police Department, the U.S. Department of Labor Office of Inspector General, the Toronto Police Department, the German National Police, the Berlin State Police, the Ukraine Security Service, the US National Central Bureau, the Department of Justice Office of International Affairs, the FBI LEGAT’s Office in Kiev, Ukraine, and INTERPOL.

 

 

 

Domingo Vargas, 36, of Philadelphia, Pennsylvania was charged today by Indictment with possession of a firearm by a convicted felon, announced United States Attorney Zane David Memeger.

 

If convicted the defendant faces a maximum possible sentence of 10 years in prison, three years of supervised release, a $250,000 fine, and a $100 special assessment.

 

This 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 Jeffery W. Whitt.

William J. O’Brien III, 49 of Philadelphia was charged today by Superseding Indictment with 23 additional counts of illegally distributing oxycodone, methadone, and amphetamines, all Schedule II controlled substances, outside the usual course of professional practice and for no legitimate medical purpose, announced United States Attorney Zane David Memeger.  According to the superseding indictment, O’Brien’s so-called Apatients@ could for a fee obtain prescriptions for these addictive and dangerous controlled substances without a physical examination or any other medical care or treatment. O’Brien typically charged customers $250 cash for the first appointment to buy prescriptions and $200 for each appointment to obtain refills.

On January 29, 2015, an indictment was unsealed charging O’Brien, a doctor of osteopathic medicine, and Angela Rongione, with one count of conspiracy to distribute controlled substances.  In the same indictment, O’Brien was charged separately with 26 counts of illegally distributing Oxycodone and Xanax, a Schedule IV controlled substance, for selling prescriptions for these narcotics to a government cooperator and an undercover FBI agent. The counts charged in the superseding indictment are for additional “patients” to whom O’Brien allegedly sold prescriptions.

If convicted, the defendants face substantial prison terms and fines, and are subject to criminal forfeiture proceedings.

The case was investigated by the Federal Bureau of Investigation, FDA Office of Criminal Investigations, and the Department of Health and Human Services - Office of the Inspector General, and is being prosecuted by Assistant United States Attorney M. Beth Leahy.

PHILADELPHIA - Johnny Santiago, 20, of Philadelphia, PA, was charged today by Information with one count of attempted possession with intent to distribute 500 grams or more of cocaine, announced United States Attorney Zane David Memeger.

 

If convicted, the defendant faces a maximum possible sentence of 40 years in prison with a mandatory minimum five year term, a fine of up to $5 million, at least four years of supervised release up to a lifetime of supervised release, and a $100 special assessment.

 

The case was investigated by United States Postal Inspection Service.   It is being prosecuted by Assistant United States Attorney Linwood C. Wright, Jr.

PHILADELPHIA – Walter Alston Brown, 47, of Providence Forge, Virginia, and Glen Allen, Virginia, and Cynthia Evette Brown, 53, of Philadelphia, PA, were each sentenced today to 180 months in prison for their roles in a multi-million dollar mortgage fraud scheme.  Walter Brown was a mortgage broker with First Horizon Home Loans, Foxworth Inc., Carteret Mortgage, and Advantage Lending and was one of the four owners of KREW Settlement Services, a real estate settlement company.   He was convicted on October 17, 2014 of conspiracy to commit loan and wire fraud, false statement in an FHA loan, loan fraud, and tax evasion. Cynthia Brown was convicted of conspiracy to commit loan and wire fraud, false statement in an FHA loan, loan fraud, and wire fraud.  The two were among 17 defendants charged in the case.

 

In addition to the prison terms, U.S. District Court Judge Berle M. Schiller ordered Walter Brown to pay $7,213,123 in restitution to the victims of his fraud plus another $31,903 in restitution to the IRS; Cynthia Brown was ordered to pay $7,488,608.48 in restitution.  Both defendants were also ordered to complete five years of supervised release.

 

Between May 2004 and February 2009, the conspirators inflated purchase prices on loan documents for more than 100 Philadelphia properties resulting in more than $20 million in fraudulent loan proceeds.  The scheme involved identifying distressed properties to purchase, typically in the West Philadelphia area, recruiting “straw buyers” whose credit history and personal information were used to purchase the properties, obtaining mortgage loans, and taking title to the properties, when, in reality, the properties were owned and controlled by the defendants.  Mortgage loan applications were then prepared in the names of the straw buyers containing a host of false information, including false purchase prices, false employment and income information, and false statements about the straw buyers living in the properties.  Cynthia Brown falsely verified that many of the straw buyers worked for her employer, Unicco Service Company, when they did not.  The defendants and their conspirators falsely prepared deeds and settlement statements (referred to as "Form HUD-1") – one for the seller that showed the actual agreed-upon purchase price and a false one for the lender that showed the grossly inflated purchase price.  They also created false title insurance policies for the lenders.

 

After the loans funded, the seller was paid the agreed-upon purchase price, and the difference between the actual purchase price and the false purchase price quoted to the lender was shared with and distributed among the defendants.

 

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Department of Housing and Urban Development’s Office of Inspector General.  It was prosecuted by Assistant United States Attorney Michael S. Lowe.

PHILADELPHIA – Dentex Dental Mobile, Inc. (“DDMI”), a Pennsylvania corporation located in Huntington Valley, has reached a settlement with the United States to resolve allegations that it refused to treat an HIV-positive patient in violation of the Americans with Disabilities Act (“ADA”).

 

As part of its business, DDMI owns and operates several dental clinics, both fixed and mobile, throughout the Philadelphia area.  As a result of its investigation, the United States determined that a DDMI mobile clinic, stationed in Chester, PA, refused to treat a patient, who was previously treated at its mobile clinic and who had disclosed in paperwork at both visits his HIV status.  The Office Manager allegedly referred the patient to an AIDS clinic for further assistance.  According to the Americans with Disabilities Act, a healthcare provider cannot refer a patient with HIV or AIDS to another provider simply because the patient has HIV or AIDS.

 

As a result of the United States’ investigation, Dentex has agreed to implement a non-discrimination policy, conspicuously post that policy, and adequately train employees and contractors regarding the policy.  The Agreement is in effect for two years.

 

This case was handled by Assistant United States Attorney Jacqueline C. Romero.

PHILADELPHIA - Aaron Henderson, 21, Muhammad Sadaat A. White, 22, Marcus Allen Ray, 25, Raymond Rysheem E. Starr, 21, Marcus Lee Jackson, 23, and Timothy Nathaniel, 25, all of Philadelphia, PA, were charged today by indictment with conspiracy, bank fraud, aggravated identity theft and aiding and abetting, announced United States Attorney Zane David Memeger.

 

According to the indictment, between May 30, 2013 and November 20, 2014, the defendants obtained the names, accounts numbers and personal identification numbers of bank customers.  They and their co-conspirators allegedly used that information to deposit bad checks at various banks, quickly withdrawing funds from those accounts. It is further alleged that the defendants recruited and paid some account holders to open accounts at financial institutions and then turn over the account information so it could be used for the deposit of bad checks and the fraudulent withdrawal of funds.

 

If convicted of all charges, the defendants face the following maximum possible statutory sentences: Henderson, 39 years in prison; White, 101 years in prison; Ray, 45 years in prison; Starr, 133 years in prison; Jackson, 69 years in prison; Nathaniel, 69 years in prison; plus fines and supervised release.

 

The case was investigated by the U.S. Postal Inspection Service and the U.S. Secret Service with assistance from the Philadelphia Police Department, the Springfield Township (Montgomery County) Police Department, the Abington Police Department and the Bensalem Police Department and is being prosecuted by Assistant United States Attorneys K.T. Newton and Yvonne Osirim.

 

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

PHILADELPHIA - Barbaranne Siebert, 48, of Philadelphia, Pennsylvania, was charged by Information with one count of theft of government funds, announced United States Attorney Zane David Memeger.  According to the Information, the defendant received retirement benefits intended for her mother, after her mother’s death in December 2010 until July 2013.  The defendant’s alleged actions resulted in a loss to the government of approximately $44,788.20.

 

If convicted, the defendant faces a maximum possible sentence of 10 years imprisonment, a 3‑year period of supervised release, restitution to the government of $44,788.20, a $250,000 fine, and a $100 special assessment.

 

The case was investigated by the Social Security Administration, Office of Inspector General, and is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.

 

PHILADELPHIA – Joseph Vito Mastronardo, Jr., 64, of Meadowbrook, PA, was sentenced today to 20 months in prison, to be served in a Level IV Bureau of Prisons Medical Facility.  The sentence follows his guilty plea on January 31, 2014, for conspiring to participate in a racketeering enterprise (RICO), conducting an illegal gambling business, conducting four conspiracies to launder money, interstate travel in aid of racketeering, transmitting wagering information, and aggravated structuring of cash deposits.  The defendant was the leader of the Mastronardo Bookmaking Organization, a multi-million dollar sports betting operation with bettors throughout the U.S.  In addition to the prison term, U.S. District Court Judge Jan E. DuBois ordered the forfeiture of approximately $3.7 million, a fine in the amount of $100,000, and three years of supervised release.

 

Mastronardo, Jr., was one of 16 defendants indicted in case, 15 of whom were charged with conspiring to participate in a racketeering enterprise (RICO) and conducting an illegal gambling business.  All of Mastronardo, Jr.’s co-defendants pleaded guilty and are awaiting sentencing; charges against Joanna Mastronardo will be dismissed.

 

At its peak, the Mastronardo Bookmaking Organization had more than 1,000 bettors and was generating millions of dollars a year.  Between January 1, 2005 and January 1, 2011, the organization utilized internet websites (www.betroma.com and www.betrose.com) and telephone numbers that allowed bettors to place sports bets on football, baseball, basketball, golf, horse racing, and other sporting events.  Residents of Costa Rica staffed the internet websites and answered the telephones.  In 2006 and 2010, law enforcement seized over $2.1 million of cash that Mastronardo hid in and around his home, including in specially-built secret compartments and in PVC pipes that were buried in his backyard.

 

Joseph Vito Mastronardo, Jr., ran the organization by using the internet, telephone, Skype, e-mail, United States mail, and in-person communication. The Mastronardo Bookmaking Organization laundered the gambling proceeds by using a check cashing agency, two private bank accounts, and numerous international bank accounts.  On occasion, Mastronardo, Jr., also provided instructions so that a losing bettor could pay a gambling debt through a charitable donation.

 

Other indicted defendants who pleaded guilty and are awaiting sentencing include: Mastronardo=s brother, John, who managed a number of bettors and collected gambling debts; Mastronardo’s son, Joseph F. Mastronardo, who worked as an office employee, collected debts, and performed other financial duties; Eric Woehlcke, who worked as an office employee, collected debts, and was a sub-agent; Joseph and Anna Rose Vitelli, who owned J & A Check Cashing, which was used to launder the gambling proceeds; and Patrick Tronoski, Schuyler Twaddle, Michael Loftus, and Ronald Gendrachi.

 

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, the Montgomery County Detective Bureau, and the Montgomery County District Attorney=s Office.  It is being prosecuted by Assistant United States Attorney Jason P. Bologna and Department of Justice Trial Attorney Kelly Pearson.

PHILADELPHIA - David A. Seiver, 77, of Upper Darby, PA, was charged today by indictment with transportation of child pornography, announced United States Attorney Zane David Memeger. According to the indictment, Seiver transported and shipped a video file of an adult male raping a child.

 

If convicted the defendant faces a mandatory minimum sentence of 15 years in prison with a maximum possible sentence of 40 years in prison, and a fine of up to $250,000.

 

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Virgil B. Walker.

​              PHILADELPHIA - Christopher Saravello, 37, of Philadelphia, PA, pleaded guilty today, to a scheme to extort drugs and money from drug dealers and drug buyers while working as a Philadelphia Police Officer.  He was charged with one count of conspiracy to commit Hobbs Act extortion and five counts of Hobbs Act extortion.

 

​              Between November 2011 and June 2012, while employed as a Philadelphia Police Officer assigned to the 6th District, Saravello conspired with others to rob drug dealers and drug buyers of cash and Oxycontin and other controlled substances.  Saravello’s co-conspirators would alert him to a drug transaction.  Saravello would then interrupt the planned drug transaction, identifying himself as a law enforcement officer by approaching the transaction in a marked police vehicle, wearing a police uniform, displaying an official badge and identification, or verbally identifying himself as a police officer. Saravello seized the money or narcotics brought to the transaction by the buyer or seller victim and shared the seized proceeds with his co-conspirators. In doing so, Saravello used his position as a police officer to extort drugs and money from others. The scheme resulted in the illegal taking of more than $9,800 in drug money and quantities of Oxycontin and other narcotics.

 

​              U.S. district Court Judge Eduardo Robreno scheduled a sentencing hearing for June 2, 2015. Saravello faces a maximum possible sentence of 120 years in prison, $1.5 million fine, three years of supervised release and a $600 special assessment.

 

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Arlene Fisk.

PHILADELPHIA - Deshawn King, 35, of Allentown, PA, was sentenced today to  years 293 months in prison for running a sex trafficking operation, incorporating heroin as a means of punishing and controlling the victims. King pleaded guilty on January 10, 2014 to conspiracy to commit sex trafficking of women by force, fraud, and coercion; two counts of sex trafficking by force, fraud, or coercion; and two counts of attempted sex trafficking by force, fraud, and coercion. King’s co-defendant, Daniel Blount, also pleaded guilty and was sentenced on July 15, 2014 to 20 years in prison.

 

Between October 2012 and April 2013, King and Blount recruited and enticed heroin-addicted women to perform commercial sex acts at their direction by promising a continuous supply of money and heroin. The defendants used the website “backpage.com” to post sexually explicit photos of the women in advertising them for commercial sex acts. “Johns” (men wanting to have sex with the recruited women) called the telephone number posted in the ad and met the women at hotels designated and paid for by the defendants. King and Blount provided heroin to the women as a means of control or withheld the heroin as a form of punishment, causing the women to suffer withdrawal; used physical force, including a taser, and threats of force against the women to cause or attempt to cause them to continue performing commercial sex acts; and received and kept all the proceeds generated by the women engaging in commercial sex acts. The defendants also threatened to kill at least two of the victims and took turns raping at least one of the victims.

 

In addition to the prison term, U.S. District Court Judge James Knoll Gardner ordered 15 years of supervised release, a $1,000 fine and a $500 special assessment.

 

The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations, with assistance from the Allentown Police Department and the Office of the Lehigh County District Attorney. It was prosecuted by Assistant United States Attorney Sherri A. Stephan.

PHILADELPHIA - Glen Joseph, 45, of Allentown, Pennsylvania, was charged today by Superseding Indictment with making threats against the President of the United States, threats against law enforcement officers, and the interstate communication of threats, announced United States Attorney Zane David Memeger.

 

If convicted the defendant faces a maximum possible sentence of 55 years in prison, three years’ supervised release, a $2.25 million fine, and a $900 special assessment.

 

The case was investigated by the Federal Bureau of Investigation and the U.S. Secret Service, and is being prosecuted by Assistant United States Attorney V. Paige Pratter.

                                                                     

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

Defendant Glen Joseph, 45, of Allentown, Pennsylvania, was charged today by Superseding Indictment with making threats against the President of the United States, threats against law enforcement officers, and the interstate communication of threats, announced United States Attorney Zane David Memeger.

If convicted the defendant faces a maximum possible sentence of 55 years in prison, three years’ supervised release, a $2,250,000 fine, and a $900 special assessment.

The case was investigated by the Federal Bureau of Investigation and the U.S. Secret Service, and is being prosecuted by Assistant United States Attorney V. Paige Pratter.                                                                       

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

PHILADELPHIA - Silicon Power Corporation, a manufacturer of semiconductor devices and high-power utility systems in Malvern, Pennsylvania, has agreed to pay $265,000 to resolve civil allegations that the facility overbilled and mischarged the United States Army under two contracts, announced United States Attorney Zane David Memeger.     

 

Specifically, the United States alleged that between 2004 and 2012, Silicon Power overbilled and mischarged the Army under the contracts by billing:  the same amount on multiple vouchers; sums reflected in purchase orders when the invoices reflected lower actual costs; sums that subcontractors had credited back to Silicon Power; sums that reflected accrued expenses when Silicon Power incurred lower actual invoiced expenses; sums that failed to reflect volume discounts that Silicon Power received; sums for travel expenses that were higher than Silicon Power’s internal cost reports for the travel; sums that Silicon Power carried over from previous vouchers without adjusting to reflect current costs; and sums for project numbers for which the contracts did not allow payment.  As part of the settlement, Silicon Power did not admit to liability or wrongdoing.

 

“This agreement demonstrates our commitment to ensuring that defense contractors meet their obligations and comply with Department of Defense rules and regulations,” said Memeger.  “Agreements like these preserve the integrity of the procurement system and save money for the United States and the taxpayers.”

 

The allegations arose from an investigation led by the Defense Criminal Investigative Service and the United States Army Criminal Investigation Command – Major Procurement Fraud Unit.  The case was handled by Assistant United States Attorneys Michael S. Macko and Mark J. Sherer.

Yujie Ding, 52, and Yuliya Zotova, 40, of Center Valley, Pennsylvania, were charged by indictment, unsealed today, with ten counts of wire fraud related to a government program meant to increase research and development opportunities for small businesses, announced United States Attorney Zane David Memeger.

 

The Small Business Innovation Research (SBIR) program was created by Congress in 1982 and has requirements aimed to combat fraud, waste, and abuse.  According to the indictment, in August 2009, Ding and Zotova submitted a proposal to NASA to fund a research project aimed at creating a device to detect trace levels of chemicals.  The defendants’ proposal claimed they would conduct the research at their business, ArkLight, and would subcontract some of the work to an area university where Ding was employed.  The indictment alleges that the defendants knew they had no such facility in which to conduct the research and were, instead, using ArkLight as a front to funnel federal grant money to themselves for research performed by students and others working in Ding’s university lab.  It is further alleged that the defendants sent to NASA, via electronic transmission, invoices totaling $560,000 for work that was not performed to the specifications of the proposals and received a portion of that amount.

 

If convicted of all charges, each defendant faces a maximum possible statutory sentence of 200 years in prison, three years of supervised release, a fine of up to $2.5 million, a $1,000 special assessment, and forfeiture.

 

The case was investigated by the National Aeronautics and Space Administration's Office of Inspector General, the Defense Criminal Investigative Service, and the United States Air Force Office of Special Investigations.  It is being prosecuted by Assistant United States Attorneys Elizabeth Abrams and Gregory David.

       

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

PHILADELPHIA - Former Philadelphia Police Officers Jonathan Garcia, 26, and Sydemy Joanis, 28, both of Philadelphia, were sentenced today to 210 months and 63 months, respectively, for a scheme to rob drug dealers of their cash proceeds.  Garcia pleaded guilty July 30, 2013 to distribution of heroin, conspiracy to commit robbery, robbery, attempted robbery, and carrying a firearm during and in relation to a crime of violence.  Joanis pleaded guilty February 11, 2014 to conspiracy to commit robbery, robbery, attempted robbery, and carrying a firearm during and in relation to a crime of violence.

 

The defendants were assigned to the 17th Police District when, in December 2009, they  entered into a scheme by which they agreed to rob suspected drug dealers.  Sometimes the defendants would stop and frisk individuals who were allegedly loitering, and if the defendants recovered any drugs, they would arrest the person and steal some or all of his money.  Other times the defendants utilized Person #1, who, at the defendants’ direction, would meet with a suspected drug dealer inside the dealer’s car, buy a small quantity of drugs (usually crack cocaine), and then leave some of the drugs in plain view on the floorboard of the car.   After Person #1 exited the dealer’s car, the defendants would pull up in their PPD patrol car, stop the dealer, and after seeing the drugs in plain view, arrest the dealer and ultimately steal some or all of the dealer’s money, which the defendants would split amongst themselves.  When committing these robberies, the defendants wore their PPD uniform and openly carried firearms.  To conceal their crimes, the defendants falsified police reports by failing to disclose their use of Person #1 and fabricating the basis for the stop, and by failing to disclose some or all of the money that they had stolen.

         

In addition to the prison terms, U.S. District Court Judge Legrome Davis ordered Garcia to pay a fine of $5,000, a special assessment of $900, and ordered five years of supervised release; Joanis was ordered to pay a fine of $2,000, a special assessment of $400, and was ordered to complete three years of supervised release.

 

The case was investigated by the FBI and the Philadelphia Police Department and was prosecuted by Assistant United States Attorney Kevin R. Brenner.

PHILADELPHIA – Dr. Jeffrey Bado, 59, of Philadelphia, PA, was charged today by indictment with illegally distributing pain medications from his Philadelphia and Bryn Mawr medical offices, announced United States Attorney Zane David Memeger.  Bado is charged with two counts of maintaining a drug-involved premises, 200 counts of illegally distributing oxycodone, a Schedule II controlled substance, outside the usual course of professional practice and for no legitimate medical purpose, as well as 33 counts of health care fraud and four counts of making false statements to federal agents.

 

According to the indictment, Bado, a doctor of Osteopathic Medicine, gave prescriptions for large numbers of oxycodone pills to “patients” who paid in cash for an “office visit” during which the “patient” would receive at most a cursory physical examination and little other medical care or treatment.  During their first visit to Bado’s practice, new patients would still get prescriptions for large amounts of oxycodone even though they provided little or no recent medical records to verify their claim of pain, or provided medical records that were not consistent with their claims of pain.

 

 The indictment alleges that Bado’s prescribing mirrored the needs of drug addicts and drug traffickers.  Bado would allegedly comply with patient requests for pills with specific concentrations of oxycodone, and Bado would allegedly switch patients to pills with a higher street value even though there was no medical justification for the switch.  Bado allegedly continued to prescribe high amounts of oxycodone even when he knew that his patients were addicted to oxycodone, were using illegal drugs, or were not even taking the oxycodone pills as prescribed.

 

The indictment further alleges that Bado committed health care insurance fraud by billing Medicare and private insurers for patient visits that occurred in February 2010, when Bado was out of the office and traveling in Haiti.  Bado allegedly directed residents, nurses and other staff to see patients while he was away, and allegedly directed that they provide the patients with prescriptions that Bado had already filled out and signed.  Before departing for his trip, Bado allegedly made notations in and signed medical charts to make it appear as though he had seen the patients when in fact he was away in Haiti during their appointments.  Bado then allegedly had his office staff submit fraudulent claims to these patients’ health care insurers for the cost of the patients’ office visit as if Bado had seen these patients.  It is alleged that Bado subsequently made several materially false statements to federal agents regarding the arrangements he made before leaving for Haiti, including falsely claiming that he had not filled out in advance out any medical records for the patient appointments that occurred while he was in Haiti.

 

If convicted of all charges, Bado faces an estimated sentencing guideline range of at least 24 years in prison with a maximum sentence of 20 years in prison for each count of oxycodone distribution and maintaining a drug premises counts, 10 years in prison for each count of health care fraud, and five years in prison for each count of making false statement counts.  He also faces substantial fines and criminal forfeiture.

 

The case was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services Office of the Inspector General, the Haverford Township Police Department and the Philadelphia Police Department.  It is being prosecuted by Assistant U.S. Attorneys Nancy Beam Winter and Andrew J. Schell.

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

 

Felicia Anne Straub, 42, of Easton, Pennsylvania, was sentenced today to six years in prison for three counts of wire fraud, one count of aggravated identity theft, and one count of tax evasion. Between September 5, 2006 and December 26, 2010, Straub was the office manager of Financial Adjuster’s, Inc.  She embezzled FAI funds of at least $459,332 and used the money to pay for personal purchases of goods and services and to pay her husband’s personal credit card bills.

 

In addition to the prison term, U.S. District Court Judge Edward G. Smith ordered restitution in the amount of $459,332, three years of supervised release, and a $500 special assessment.

 

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, the Lehigh County District Attorney’s Office, and the Whitehall Township Police Department, and is being prosecuted by Assistant United States Attorney Kishan Nair.

PHILADELPHIA - Laura Wayne, 37, of Coatesville, Pennsylvania, was charged today by information with seven counts of wire fraud, announced United States Attorney Zane David Memeger.  While employed as an administrator of employee retirement accounts at the Comcast Corporation, Wayne created dummy retirement accounts and used the accounts to defraud Comcast of approximately $124,876.

 

According to the information, Wayne created dummy accounts that appeared to be 401(k) retirement accounts managed by Fidelity Company for the benefit of Comcast employees; used the names of non-employees and their actual birthdates and social security numbers to create fraudulent employee 401(k) accounts; entered dollar amounts in the dummy accounts on the spreadsheets she sent to Fidelity so that Comcast would put money into the dummy employee accounts; and created fake on-line Fidelity accounts so that she could access the dummy employee accounts. It is further alleged that between April 2013 and January 2014, Wayne used the fake on-line accounts that she had created to direct that Fidelity transfer funds from the dummy accounts to bank accounts that she controlled.

 

If convicted, the defendant faces a maximum possible sentence of 140 years of in prison, three years of supervised release, restitution, a $1.75 million fine, and a $700 special assessment.

 

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

 

 

 

 

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PHILADELPHIA - David Nixon, 50, of Philadelphia, Pennsylvania, was charged today by superseding indictment with 84 counts of aiding and assisting in the preparation of materially false income tax returns, announced United States Attorney Zane David Memeger.

 

According to the superseding indictment, Nixon, the owner of Economy Tax Services, prepared materially false federal income tax returns for tax years 2007 through 2009 which included fraudulent credits for children, earned income, tuition and fees, and residential energy efficiency property; incorrect filing status; and false or falsely inflated Form 1040 Schedule A deductions for charitable contributions and employee business expenses.  The prepared and filed returns reduced the amount of tax owned by Nixon's clients and increased the amount of the refunds to the clients.  The indictment alleges that as the result of the false and fraudulent income tax returns, Nixon's clients received more than $200,000 in fraudulently inflated refunds.

 

If convicted the defendant faces a maximum possible sentence of 252 years of in prison, a fine of $21 million, one year of supervised release, and a special assessment of $8,400.

 

The case was investigated by the Internal Revenue Service Criminal Investigations and is being prosecuted by Assistant United States Attorney Anita Eve.

 

An indictment or Information is only an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – William J. O’Brien III, 49, and Angela Rongione, 29, both of Philadelphia, were charged by indictment, unsealed today, with running a “pill mill” from O’Brien’s medical offices in Philadelphia and Levittown, PA, announced United States Attorney Zane David Memeger.  Both defendants are charged with one count of conspiracy to distribute controlled substances.  O’Brien, a doctor of osteopathic medicine, is also charged with 26 counts of illegally distributing oxycodone, a Schedule II controlled substance, and Xanax, a Schedule IV controlled substance, outside the usual course of professional practice and for no legitimate medical purpose.

 

According to the indictment, between January 2014 and December 2014, O’Brien’s so-called Apatients@ could obtain prescriptions for addictive and dangerous controlled substances for a fee and without a physical examination or any other medical care or treatment.  O’Brien typically charged customers $250 cash for the first appointment to buy prescriptions and $200 for each appointment to obtain refills.  O’Brien allegedly falsified “medical” records to make it look as though customers had received physical examinations and medical treatment from him when they had not.  It is further alleged that O’Brien was willing to exchange favors for higher doses of narcotics.  For example, on or about October 2, 2014, O’Brien allegedly offered to trade a prescription for a sex act.

 

If convicted, defendant O’Brien faces 20 years in prison for the conspiracy charge and five years for each of the distribution counts and substantial fines and criminal forfeiture. Defendant Rongione faces 20 years in prison for the conspiracy charge.

 

The case was investigated by the FBI, the Food and Drug Administration Office of Criminal Investigations, and the Department of Health and Human Services Office of the Inspector General.  It is being prosecuted by Assistant U.S. Attorney M. Beth Leahy.

 

ALLENTOWN – Melvin Aviles, 34, of Allentown, PA, was sentenced today to 10 years in prison for running a cocaine trafficking operation.  Aviles pleaded guilty on April 8, 2014 to conspiracy to distribute 500 grams or more of cocaine, four counts of distributing and aiding and abetting the distribution of cocaine, one count of distributing and aiding and abetting the distribution of cocaine within 1,000 feet of a public school, five counts of distribution of cocaine, and one count of attempted possession with intent to distribute.

 

Between October 2012 and April 2013, Aviles operated a cocaine trafficking business, obtaining cocaine from sources in Puerto Rico and other locations for resale in the Allentown area.  Aviles arranged to have parcels shipped via the United States Postal Service from Puerto Rico to various addresses in Allentown.  Once the cocaine was delivered, Aviles would transport the cocaine to his Allentown residence, weigh it, and repackage it for further distribution in and around the Allentown area.  Some of the cocaine sales were conducted within 1,000 feet of schools.  

 

In addition to the prison term, U.S. District Court Judge James Knoll Gardner ordered 12 years of supervised release and a $1,100 special assessment.

 

“The successful result of this prosecution is due, in large part, to the outstanding collaboration of local, state, and federal law enforcement,” said Memeger. “The tireless efforts and diligent work of the officers and agents investigating this case, made it possible to get this drug trafficker off the streets of Allentown.”

 

“This case represents just the most recent success derived from the close working relationship that exists between the Pennsylvania State Police and our federal and local law enforcement partners,” said Pennsylvania State Police Captain Brian Tobin. “We will continue to put forth our combined resources in order to protect the citizens of this Commonwealth and ensure those who choose to commit crimes are brought to justice.”

 

The case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and the Allentown Police Department with assistance by the Office of the Lehigh County District Attorney. It was prosecuted by Assistant United States Attorney Sherri A. Stephan.

 

PHILADELPHIA - Kim M. Costello, 55, of Harrisburg, PA, pleaded guilty on January 22, 2015, to one count of embezzlement of government funds, announced United States Attorney Zane David Memeger.  In September 2012, Costello was the impress funds manager for the Drug Enforcement Administration’s Harrisburg Resident Office when she embezzled $2,079 in government funds.

 

U.S. District Court Judge Sylvia H. Rambo will schedule a sentencing hearing at a future date.  Costello faces a maximum possible sentence of 10 years in prison, three years of supervised release, a $100 special assessment, and a fine of up to $250,000.

 

The case was investigated by the Department of Justice Office of Inspector General New Jersey Area Office, and is being prosecuted in the Middle District of Pennsylvania by Assistant United States Attorney Kishan Nair, from the Eastern District of Pennsylvania.

 

William J. Frio, 58, of Springfield Township, pleaded guilty today to his role in a tax evasion scheme involving the Nifty Fifty’s restaurant chain.  Frio pleaded guilty to conspiracy to commit tax evasion. Frio is the sixth defendant to plead guilty in the long-running scheme to avoid paying millions of dollars in personal and employment taxes, by failing to properly account for more than $15 million in gross receipts, thereby evading federal taxes of over $2.28 million. Frio also pleaded guilty to filing his own false tax returns, aggravated structuring of financial transactions, and loan fraud. U.S. District Court Judge Mary McLaughlin scheduled a sentencing hearing for April 29, 2015.

 

Frio, an accountant and income tax preparer who provided services to the Nifty Fifty’s organization since 1986, conspired with the owners and principals of Nifty Fifty’s.  The defendants skimmed cash to pay themselves, their employees, and people and businesses who supplied goods and services to the Nifty Fifty’s restaurants, providing those persons and businesses with the opportunity to evade the payment of their own taxes.

 

In 2008, Frio submitted a false loan application to Sovereign Bank for a $417,000 mortgage for his personal residence.  Frio submitted to the bank bogus federal income tax returns for 2006 and 2007, and bogus Forms W-2, falsely representing he had earned substantial income from Tanfasia, Inc.  The 2006 and 2007 tax returns that he had actually submitted to the IRS showed far less income than the false returns supplied to Sovereign Bank, and Frio had not been employed by Tanfasia, Inc. in 2006 or 2007.

 

Frio also used his position as the Nifty Fifty’s accountant to embezzle over $4 million of funds that belonged to the organization. As part of that scheme, between 2006 and 2009, Frio knowingly structured cash transactions totaling over $2.6 million out of Nifty Fifty’s accounts at Sovereign Bank.

 

Frio faces a maximum possible sentence of 57 years in prison, full restitution to the IRS, a fine of up to $2.75 million, and criminal forfeiture.

 

The case was investigated by the Internal Revenue Service Criminal Investigations and the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorneys Paul G. Shapiro and Nancy E. Potts.

Brandon Jones, 33, of Reading, Pennsylvania was charged today by indictment with one count of conspiracy, one count of wire fraud, and one count of bank fraud, announced United States Attorney Zane David Memeger.

            The indictment alleges that Jones participated into two related identify theft schemes.  According to the indictment, Jones and his co-conspirators created and used false identities to make fraudulent credit card purchases and to purchase vehicles with fraudulent bank loans.  The leader of the conspiracy, Damian Gasdaska, provided Jones and other co-conspirators with fraudulent credit cards, which Jones and the others used to purchase various items, including small, expensive electronic equipment.  After the purchases, Jones and the co-conspirators provided these items to Gasdaska, who then sold them and paid the co-conspirators for their illegal services.

            Among other things, the indictment also alleges that Jones, Gasdaska, and their co-conspirators used false identities to obtain fraudulent car loans in order to purchase vehicles.  Specifically, the indictment alleges that in August 2012, Jones, with Gasdaska’s help, obtained a fraudulent loan in the name of J.O. from a credit union and then used this loan to purchase a 2007 BMW in this false name.  As part of this fraudulent purchase, Jones used false personal identifying information in J.O.’s name, a false driver’s license with J.O.’s name and Jones’ photograph, and false employment information.

            Several of members of this conspiracy have previously pleaded guilty in connection with the identify theft schemes.  On April 28, 2014, John Cordero pleaded guilty to one count of conspiracy and one count of bank fraud.  On November 6, 2014, both Damian Gasdaska and Johnnie Rhines pleaded guilty.  Gasdaska pleaded guilty to one count of conspiracy, six counts of wire fraud, seven counts of bank fraud, and one count of aggravated identity theft.  Rhines pleaded guilty to one count of conspiracy and one count of bank fraud.                                                                  

INFORMATION REGARDING THE DEFENDANTS

 

                         NAME

 

           ADDRESS

 

     YEAR OF BIRTH

 

Brandon Jones

 

Reading, PA

 

1981

 

Damian Gasdaska

 

Phillipsburg, NJ

 

1976

 

John Cordero

 

Breiningsville, PA

 

1978

 

Johnnie Rhines

 

Lindenwold, NJ

 

1954

 

If convicted, Jones faces a maximum possible sentence of 55 years imprisonment, a five-year period of supervised release, a $1,500,000 fine, a $300 special assessment, and the imposition of full restitution.

The case was investigated by United States Secret Service, the United States Postal Inspection Service, Homeland Security Investigations, and the Lehigh County Auto Theft and Insurance Fraud Task Force and is being prosecuted by Assistant United States Attorney Patrick J. Murray.

PHILADELPHIA – Joseph C. Waters, Jr., 61, of Philadelphia, was sentenced today to 24 months in prison for using his judicial position to influence the outcome of two cases in the Philadelphia Municipal Court.  Waters, a former Philadelphia Municipal Court Judge, pleaded guilty on September 14, 2014 to mail fraud and honest services wire fraud.  In addition to the prison term, U.S. District Court Judge Juan R. Sanchez ordered 3 years of supervised release and ordered Waters to pay a fine of $5500, and a special assessment of $200.

 

According to documents filed in the case, on September 30, 2011, Waters was asked by Person #1 – a politically active business owner – to use his judicial office to achieve a favorable outcome in a small claims case filed in Philadelphia Municipal Court against Person #1’s real estate management company.  To that end, Waters called two other Municipal Court judges, assigned to the case on different dates, and asked them to rule in Person #1’s favor.  A Municipal Court Judge identified in the information as Judge #2 ultimately adjudicated the case in favor of Person #1 after Waters told Judge #2 “he’s a friend of mine.”  Judge #2’s ruling in favor of Person #1’s company prevented the plaintiff in the small claims case, Company B, from collecting $2733 in unpaid fees owed to it for security services it delivered to Person #1’s company.

 

Waters gave Person #1 a secret advantage through a series of secret ex parte communications with other Municipal Court judges scheduled to hear the small claims case and used his position to cause favorable rulings for Person #1.

 

In a second scheme, Waters used his position as a judge to facilitate a favorable outcome in a criminal firearms case.  In that matter, Person #1 urged a witness cooperating with the government, “CW#1,” to contribute money to help pay down debts Waters had incurred while campaigning for a position on the Municipal Court.  In January 2010, CW#1, gave Waters $1,000 in cash.  In accepting the money, Waters told CW#1 that he would help CW#1 with future problems that CW#1 or CW#1’s friends may encounter in the court system.  Between 2010 and 2012, CW#1 provided gifts and cash contributions to Waters that were not reported on Waters’ campaign finance reporting forms.

 

In May 2012, CW#1 asked Waters for his assistance with a firearms prosecution pending in the Municipal Court.  CW#1 introduced Waters to an undercover agent (“UC#1”) as a business associate.  CW#1 and UC#1 asked Waters to help UC #1’s “cousin” who had been arrested for felony possession of a firearm.  On July 23, 2012, Waters called Judge #1 alerting Judge #1 to the preliminary hearing of a “friend” for the firearms charge and asked Judge #1 to “help him.”  At a July 24, 2012 preliminary hearing, Judge #1, without proper legal basis, reduced the felony firearms charge to a misdemeanor.

 

The case was investigated by the FBI and is being prosecuted by Chief of the Public Corruption Unit Richard P. Barrett and Assistant United States Attorney Michelle L. Morgan.

PHILADELPHIA - Andys O. Rodriguez, 26, of Allentown, PA, was sentenced today to 30 months imprisonment and 3 years supervised release.  U.S. District Court Judge Lawrence F. Stengel also ordered restitution of $2,904,783.64. Rodriguez admitted at his guilty plea that between August 17, 2010 and January 31, 2012, he knowingly filed false tax returns with the IRS claiming refunds in the names of other individuals.  The returns included W-2 forms falsely claiming that taxes were withheld by various employers.  The IRS identified more than 600 false returns that were associated with this scheme.  These returns, which were filed electronically, claimed refunds totaling $2,904,783.64.

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

 

PHILADELPHIA - Justin Williams, a/k/a ANew York Ice, a/k/a APimp Juice, 40, of New York, NY, was sentenced today to 30 years in prison for sex trafficking young women. A federal jury found Williams guilty in September 2013 of two counts of sex trafficking by force and one count of tampering with a witness.  In addition to the prison term, U.S. District Court Judge J. Curtis Joyner ordered 10 years of supervised release.

            Between November 2011 and January 2012, Williams recruited young females to work as prostitutes in his business who were advertised on the Internet for purchase, using locations such as “Backpage,” for purposes of prostitution. Williams engaged in acts of physical violence to force the victims to remain in his business. The advertisements featured pictures of the victims, scantily clad, the price, and a phone number to call to arrange a meeting with a female. Williams forced the victims to engage in sex acts with clients.

            Williams exploited at least three females, ranging in age from 18 to 27. He moved them between Philadelphia, New York, Atlantic City, NJ, and Washington, DC, for purposes of prostitution. He was convicted of two counts of sex trafficking by force and one count of witness tampering for writing a letter to victim #2 to retract her statement prior to trial.

            This case was investigated by the Federal Bureau of Investigation, Arlington County Police Department (Arlington, VA), with assistance from the Philadelphia First Judicial Court Warrant Unit, and the New York City Police Department. It was prosecuted by Assistant United States Attorney Michelle Morgan.

PHILADELPHIA – Joseph Dougherty, 73, of Philadelphia, former Secretary/Business Manager of Local 401, was found guilty today, by a federal jury, of racketeering conspiracy and other charges connected to a dozen members of Ironworkers Local 401.  The jury returned guilty verdicts on the counts of RICO conspiracy, malicious damage to property by means of fire, use of fire to commit a felony, attempted malicious damage to property by means of fire, and conspiracy to damage to property by means of fire. The 11 co-defendants in the case pleaded guilty.  U.S. District Court Judge Michael Baylson scheduled a sentencing hearing for April 29, 2015.

The indictment details incidents in which the defendants threatened or assaulted contractors or their employees, and damaged construction equipment and job sites as part of a concerted effort to force contractors to hire and pay Local 401 workers, even when those workers performed no function.

The defendants had a network of individuals, friendly to the Ironworkers Local 401, to help identify construction projects and job sites where work was being performed without using Local 401 members.  The business agents would approach construction foremen at those work sites and imply or explicitly threaten violence, destruction of property, or other criminal acts unless union members were hired.  The defendants relied on a reputation for violence and sabotage, which had been built up in the community over many years, in order to force contractors to hire union members.  The defendants created “goon” squads, composed of union members and associates, to commit assaults, arsons, and destruction of property.  One such squad referred to itself as the “The Helpful Union Guys,” “T.H.U.G’s.”

At sentencing, Dougherty faces a mandatory minimum term of 15 years in prison up to a statutory maximum of 110 years.

The case was investigated jointly by the Federal Bureau of Investigation and Department of Labor Office of Inspector General, with assistance provided by the Philadelphia Police Department Corruption Task Force, East Whiteland Township Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Employee Benefit Security Administration.  It is being prosecuted by Assistant United States Attorney Robert Livermore with legal assistance from Gerald Toner, Acting Deputy Chief for Labor-Management Racketeering, Organized Crime and Gang Section at the Department of Justice.

 

​PHILADELPHIA – Kenneth Narzikul, 60, of Media, PA, was sentenced today to 37 months in prison for committing major fraud against the United States, obstructing a federal audit, and making false claims to the government, in connection with defense contracts to manufacture components for military helicopters. U.S. District Court Judge L. Felipe Restrepo also ordered restitution in the amount of $1.2 million, a fine of $7,500, and three years of supervised release to follow the prison term.  

 

         The defendant was President and 85% owner of NP Precision, Inc. (NP), a machine tool business located in Folcroft, PA, which is now defunct.  NP contracted with Department of Defense component agencies to produce critical hardware components used in military helicopters and other aircraft.  At his guilty plea hearing on August 25, 2014, Narzikul admitted that he schemed to fraudulently divert and steal approximately $1.2 million in progress payments that the United States paid NP under two contracts to produce drive shaft couplings for a U.S. Army helicopter Model CH-47, commonly known as the Chinook helicopter.  Narzikul further admitted that he made false claims to the government so that NP could continue to receive progress payments on those contracts, when he knew that NP had not earned the progress payments.  In addition, Narzikul admitted that he tried to cover up his fraud by lying to government auditors and submitting false documents to them, and directing employees at NP to do the same. Narzikul admitted further that he used the diverted progress payments to pay outstanding obligations on other contracts and pay other personal and business expenses for himself and his family.

 

          The case was investigated by the Major Procurement Fraud Unit (MPFU) of the United States Army Criminal Investigative Command (Army CID), the Defense Criminal Investigative Service (DCIS), and the United States Air Force Office of Special Inspection (Air Force OSI).  It was prosecuted by Assistant United States Attorney Mary E. Crawley.

 

​​​            PHILADELPHIA - An indictment was unsealedFriday charging Brian Hartline, 50, of Collegeville, Pennsylvania, and Barry Bekkedam, 47, of Hobe Sound, Florida, in a fraud conspiracy involving NOVA Bank,where Hartline served as President and Chief Executive Officer and Bekkedam had served as Board Chairman.  The alleged scheme involved the Troubled Asset Relief Program (TARP) and was devised in an attempt to defraud the government of more than $13 million. The defendants are each charged with conspiracy to defraud the United States, TARP fraud, two counts of false statements to the federal government, and bank fraud. Bekkedam is additionally charged with two counts of wire fraud.

            The charges were announced today by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge Edward J. Hanko, Special Inspector General for the Troubled Asset Relief Program Christy Romero, and Pennsylvania Department of Banking Secretary of Banking and Securities Glenn E. Moyer.

            Bekkedam and Hartline, with others, formed NOVA Bank in 2002. Bekkedam also owned and operated a financial advisory company, Ballamor Capital Management, and allegedly advised Ballamor clients to invest in NOVA.  But in 2008, NOVA faced risk of failure because of bad loans and investments.  Its investors were at risk of losing their investments.  In October 2008, NOVA Financial Holdings, Inc., of Berwyn, Penn., the parent company of NOVA Bank, applied for approximately $13.5 million in taxpayer bank bailout funds through the U.S. Department of the Treasury TARP.  In June 2009, NOVA Bank was approved to receive the TARP funds on the condition that the bank raise $15 million in additional, private capital.  The bank was ultimately unable to raiseprivate capital, did not receive TARP funds, and in October 2012, the bank failed and was closed by state and federal banking regulators.

            According to the indictment, Bekkedam and Hartline devised a scheme in which NOVA would loan money to G.L., a Florida businessman, for G.L. to transfer to NOVA’s parent company so it would appear as though the bank had new capital from an outside investor. On June 30, 2009, NOVA wired $5 million to G.L.’s bank account in Florida and, approximately two hours later, G.L. wired $5 million to an account used for investments in NOVA Financial Holdings, Inc.  It is further alleged that in October and December 2009, Bekkedam and Hartline convinced two others to make similar “investments” using loans from NOVA, in efforts to make NOVA appear more financially sound than it actually was. The defendants also allegedlytold and directed employees to tell the U.S. Department of Treasury that NOVA had raised new capital when it had not.  According to the indictment, the defendants concealed the true purpose of the loan to G.L. and falsely stated the purposes of the other two loans.

            If convicted, defendant Bekkedam faces a statutory maximum sentence of 115 years imprisonment, a $4,750,000 fine, five years supervised release, and a $700 special assessment. Hartline faces a statutory maximum sentence of 55 years imprisonment, a $2,750,000 fine, five years supervised release, and a $500 special assessment.

            The case was investigated by the Federal Bureau of Investigation, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Internal Revenue Service Criminal Inestigaton, the Federal Deposit Insurance Corporation Office of Inspector General, the Office of Inspector General of the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau.  It is being prosecuted by Assistant United States Attorney David Ignall.

            In October 2008, NOVA Financial Holdings, Inc., of Berwyn, Penn., the parent company of NOVA Bank, applied for approximately $13.5 million in taxpayer bank bailout funds through the U.S. Department of the Treasury Troubled Asset Relief Program (TARP).  In June 2009, NOVA Bank was approved to receive the TARP funds on the condition that the bank raise $15 million in additional, private capital.  The bank was ultimately unable to raise private capital, did not receive TARP funds, and in October 2012, the bank failed and was closed by state and federal banking regulators.

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