Eastern District of Pennsylvania

PHILADELPHIA – Pharmaceutical company Astellas Pharma US, Inc., will pay $7.3 million to resolve allegations that it violated the False Claims Act in connection with its marketing and promoting of the drug Mycamine for pediatric use.  The settlement was announced today by United States Attorney Zane David Memeger and the Justice Department.  Astellas Pharma US, Inc., located in Northbrook, Illinois, manufactures and sells pharmaceutical drugs, including Mycamine.

The settlement resolves allegations that, between 2005 and 2010, Astellas knowingly marketed and promoted the sale of Mycamine for pediatric use, which was not a medically accepted indication and, therefore, not covered by federal health care programs.  During this time period, the FDA approved Mycamine to treat adult patients suffering from serious and invasive infections caused by the fungus Candida, including infections in the esophagus, the blood and the abdomen, and to prevent Candida infections in adults undergoing stem cell transplants.  From 2005 until June 2013, however, Mycamine was not approved to treat pediatric patients for any use. 

“The settlement in this case further demonstrates our commitment to hold responsible any pharmaceutical company that disregards the FDA drug approval process and promotes drugs for uses before they have been deemed safe and effective,” said U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger.  “It’s a message that should resonate with all drug companies:  there are consequences for violating the False Claims Act and putting profit ahead of government safeguards.”

“The FDA’s drug approval process requires companies to demonstrate the safety and efficacy of their products,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The Justice Department will hold accountable pharmaceutical companies that skirt these rules and seek to bill federal health care programs for uses of drugs that are not reimbursable.” 

As a result of today’s $7.3 million settlement, the federal government will receive $4.2 million, and state Medicaid programs will receive $3.1 million.

“Pharmaceutical companies that ignore rules designed to protect patients – in this case, children – will be held accountable,” said Nick DiGiulio, Special Agent in Charge for the United States Department of Health and Human Services in Philadelphia.  “We will continue to work with the Department of Justice to root out all forms of waste, fraud and abuse in our federal health care programs.”               

The allegations resolved by the settlement arose from a lawsuit filed by Frank Smith, a former Astellas sales representative, under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery.  Smith will receive $708,852.   

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.

For the Eastern District of Pennsylvania, the settlement in this case was handled by Assistant United States Attorney Susan Becker.

This case was a cooperative effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Civil Division of the Department of Justice and the Offices of the Inspectors General of the Department of Health and Human Services and Office of Personnel Management.  The lawsuit is captioned United States ex rel. Smith v. Astellas Pharma US, Inc. et al., No. 10-999 (E.D. Pa.). 

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

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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Lora Lewis, 51, of Philadelphia, PA, a former Internal Revenue Service employee, was charged today by information with one count of filing false income tax returns, announced United States Attorney Zane David Memeger. Lewis worked as a contact representative for the IRS in the Philadelphia office.

According to the information, between 2007 and 2011, Lewis was receiving unemployment compensation which she did not report on her income tax returns; claimed tax credits which she was not eligible to claim, such as the first time home buyers credit, the earned income tax credit and the education credit; and deductions, such as IRA contributions that were never made, in order to reduce her taxable income.  Lewis allegedly defrauded the government of $39,000.

If convicted, Lewis faces three years in prison, restitution to the IRS, a fine of up to $250,000, one year of supervised release, and a $100 special assessment.

 The case was investigated by the Internal Revenue Service Criminal Investigations, and the Treasury Inspector General for Tax Administration (TIGTA). It is being prosecuted by Assistant United States Attorney Virgil B. Walker.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Dylan Capone, 21, and Michael Young, 24, both of Philadelphia, charged today by Indictment with committing the January 28, 2014, armed robbery of the Chuen Hing Grocery, located at 1414 South 6th Street, Philadelphia, Pennsylvania, announced United States Attorney Zane David Memeger.  Capone and Young were also charged with brandishing a firearm in connection with that robbery.

If convicted Capone and Young face a mandatory minimum term of seven years in prison with a maximum possible sentence of life.

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

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA – Randy Gray, 27, of Fort Worth, TX, was sentenced today for his role in a scheme to traffic in counterfeit guitars carrying the marks of C.F. Martin and Company Guitars, Guild Guitars Incorporated and Gibson Guitar Corporation.  The counterfeit goods bore marks that were identical with and substantially indistinguishable from genuine marks in use and registered for those goods on the principal register in the United States Patent and Trademark Office, and which are found on genuine guitars, and the use of which was meant to deceive. The scheme resulted in 165 counterfeit guitars being sold to unsuspecting pawn shops which paid a total of approximately $56,000 for the items. 

Gray is one of four defendants charged in the case, each of whom pleaded guilty.  In addition to one day in jail and three years of supervised release, the judge ordered the following: Gray was ordered to pay $7,617 in restitution; co-defendant Bruce Alford, 41, of Fort Worth, TX, was ordered, on December 5, 2013, to pay $8,701 in restitution and a $100 special assessment.  Co-defendant Josh Davis, 39, of Galveston, TX, was ordered, on January 15, 2014, to pay $22,047.60 in restitution and serve six months of home confinement; co-defendant Romeo Rondeau, 44, of Fort Worth, TX, was ordered, on November 7, 2013, to pay $7,133.93 in restitution and serve six months of home confinement.

The case was investigated by the FBI – Allentown Resident Agency and is being prosecuted by Assistant United States Attorney John Gallagher.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA – Randy Gray, 27, of Fort Worth, TX, was sentenced today for his role in a scheme to traffic in counterfeit guitars carrying the marks of C.F. Martin and Company Guitars, Guild Guitars Incorporated and Gibson Guitar Corporation.  The counterfeit goods bore marks that were identical with and substantially indistinguishable from genuine marks in use and registered for those goods on the principal register in the United States Patent and Trademark Office, and which are found on genuine guitars, and the use of which was meant to deceive. The scheme resulted in 165 counterfeit guitars being sold to unsuspecting pawn shops which paid a total of approximately $56,000 for the items. 

Gray is one of four defendants charged in the case, each of whom pleaded guilty.  In addition to one day in jail and three years of supervised release, the judge ordered the following: Gray was ordered to pay $7,617 in restitution; co-defendant Bruce Alford, 41, of Fort Worth, TX, was ordered, on December 5, 2013, to pay $8,701 in restitution and a $100 special assessment.  Co-defendant Josh Davis, 39, of Galveston, TX, was ordered, on January 15, 2014, to pay $22,047.60 in restitution and serve six months of home confinement; co-defendant Romeo Rondeau, 44, of Fort Worth, TX, was ordered, on November 7, 2013, to pay $7,133.93 in restitution and serve six months of home confinement.

The case was investigated by the FBI – Allentown Resident Agency and is being prosecuted by Assistant United States Attorney John Gallagher.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Elizabeth Goode-Bishop, 65, of New Castle, Delaware, was charged today 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 March 1988 until her fraud was discovered in October 2013.  The defendant’s alleged actions resulted in a loss to the government of approximately $169,198.          

If convicted, the defendant faces a maximum possible sentence of 10 years in prison, a three year period of supervised release, restitution to the government of $169,198, 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.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Lynda Hang Vang, 46, of Akron, Pennsylvania was charged today by Indictment with attempted possession with intent to distribute Methylenedioxy-N-methylcathinone (“methylone”) and possession of a firearm in furtherance of a drug trafficking crime, announced United States Attorney Zane David Memeger.

If convicted, the defendant faces a maximum possible sentence of 25 years in prison, a fine of up to $1 million, and three years of supervised release.

The case was investigated by Immigration and Customs Enforcement (ICE) Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Yvonne Osirim.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA – A federal jury, today, found Jay Stout, 55, formerly of Elizabethtown, PA, and his company, Flying Tigers, Inc., guilty of conspiracy, fraud involving aircraft parts, mail fraud, and obstruction of justice. A sentencing hearing has not yet been scheduled. Stout was president of Flying Tigers, a former airplane mechanical repair business located in Marietta, PA. He was indicted with his son Joel, 33, also of Elizabethtown. Joel Stout previously pleaded guilty and will be sentenced May 6, 2014.

Between October 2003 and January 2010, Stout conspired with his son and others to commit fraud in aircraft parts, mail fraud, and wire fraud, by charging customers for the annual inspections of their aircraft, despite the absence of a certified mechanic with inspection authority, a certification given by the FAA. In order to conceal the absence of an authorized certification, Stout and Flying Tigers prepared fraudulent certifications of annual inspections for the airplane and engine log books or, on other occasions, failed to create the necessary certification at all. Some customers who brought their airplanes into Flying Tigers for annual inspections were charged for the inspection, but Flying Tigers never provided a signed certification in the airplane or engine log books recording the annual inspection. By this method, the absence of the valid signature of a certified mechanic was not evident to the Flying Tigers customers. Other annual inspections were certified in the log books by Jay Stout, even though Jay Stout was no longer authorized to certify annual inspections. In other annual inspections, the signatures of certified mechanics with inspection authority were forged in the log books. Such was the case with one former Flying Tigers employee who left Flying Tigers in late 2006/early 2007, but whose forged or fraudulent signatures appear on certified annual inspections, both before the period that the former employee had his certification, and through October 2007, long after he stopped working for Flying Tigers. In addition, the fraudulent signature of Gilbert Stout, Jay Stout’s father, appeared on annual inspections many years after Gilbert Stout stopped working on aircraft, and the forged and fraudulent signature of Joel Stout, a Flying Tiger, Inc. employee and Jay Stout’s son, appeared on annual inspections that Joel Stout did not perform. Many airframe and engine log books, containing these and other entries, were shown to the jury during the trial.

When Jay Stout learned, in late 2007, that federal authorities were investigating the log book entries of Flying Tigers customers, Jay Stout intentionally altered log books in an effort to further conceal his fraud. He faces a statutory maximum sentence of 90 years in prison, possible restitution to his victims, and three years of supervised release. 

The case was investigated by the United States Department of Transportation Office of Inspector General and is being prosecuted by Assistant United States Attorney Arlene Fisk.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA – Eric Sijohn Brown, 46, of Philadelphia, pleaded guilty today to 20 counts in connection with a mortgage fraud scheme involving KREW Settlement Services.  Brown pleaded guilty to conspiracy, two counts of FHA loan fraud, 12 counts of loan fraud, and three counts of tax evasion.  Between May 2004 and February 2009, Brown and his co-conspirators inflated purchase prices on loan documents for more than 100 Philadelphia properties resulting in more than $20 million in fraudulent loan proceeds.  A sentencing hearing is scheduled for July 8, 2014.  Brown faces a maximum possible sentence of 486 years in prison,  including a mandatory two year term, five years of supervised release, a fine of up to $15 million, and $2,000 special assessment. A forfeiture notice was also filed seeking more than $13.7 million from all defendants.

KREW Settlement Services was a Philadelphia real estate settlement company and Brown was a general contractor who worked with his co-defendants to identify distressed properties to purchase, typically in the West Philadelphia area.  The scheme involved recruiting “straw buyers” whose credit history and personal information was used to purchase the properties, obtain mortgage loans, and take 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.  Mortgage brokers - including Roderick Foxworth, Walter Brown, and John William Polosky (charged separately in the Western District of Pennsylvania) - allegedly submitted the fraudulent loan applications to lenders to secure the loans for the buyers, knowing that the information was false. 

Charged with Brown were Roderick L. Foxworth, Sr., Cynthia Evette Brown, Walter Alston Brown, Jr., and Kevin Joseph Franklin.  Cynthia Brown is alleged to have falsely verified that many of the straw buyers worked for her employer, Unicco Service Company, when they did not.  Kevin Joseph Franklin, a title agent, is alleged to have falsely prepared two 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.  Franklin is also alleged to have 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 by Franklin to Eric Brown, Foxworth, Walter Brown, and Cynthia Brown, and many of these payments were not reflected on the HUD-1 forms.

In addition to the five defendants charged with Brown, and the three defendants charged by the Western District of Pennsylvania, seven defendants were charged by information.    

            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 is being prosecuted by Assistant United States Attorney Michael S. Lowe.

As alleged in the indictment, “KREW” is an acronym of the first names of Kevin Joseph Franklin, Roderick L. Foxworth, Sr., Eric Sijohn Brown, and Walter Alston Brown, Jr.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - Thomas Jefferson University and Jefferson University Physicians, Department of Emergency Medicine have agreed to a $77,486 settlement to resolve allegations arising from overbilling for services, announced United States Attorney Zane David Memeger.  The settlement arose as a result of a voluntary self-disclosure after Thomas Jefferson University’s Counsel for Compliance identified certain Medicare Part B professional fee billing anomalies during a routine internal compliance review.  Based upon this review, it appeared that certain professional fee services in the emergency room were billed under a physician’s National Provider Identification number when those services should have been billed under either the National Provider Identification number of the Physicians Assistants or Certified Registered Nurse Practitioners. 

Prior to the settlement, Thomas Jefferson University engaged a third-party firm to conduct a comprehensive billing audit and provided the results to the United States.  Thomas Jefferson University agreed that the billing was not accurate and thus, that the government paid more than it should have for the services provided.  Under the parties’ settlement agreement, signed today, Thomas Jefferson University and Jefferson University Physicians, Department of Emergency Medicine will pay $77,486.00 to the United States.  Thomas Jefferson University also conducted education in an effort to prevent any subsequent billing anomalies. 

This resolution was handled by Assistant U.S. Attorneys John T. Crutchlow and Veronica J. Finkelstein.

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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Rochelle Biesenthal, 64, of Brigantine, New Jersey, was charged today by information with one count of wire fraud and three counts of tax evasion in connection with an alleged scheme to defraud the Jewish Heritage Programs (“JHP”), a non-profit corporation based in Philadelphia, announced United States Attorney Zane David Memeger.

According to the information, Biesenthal carried out the scheme between 2002 and April 2009, while employed as a bookkeeper at JHP.  She allegedly prepared and issued checks, made payable to her, drawn on JHP’s bank accounts.  It is further alleged that Biesenthal fraudulently authorized electronic debits from JHP’s bank accounts to pay for her personal credit cards and her family’s personal credit cards.  As part of the scheme, it is alleged that she defrauded JHP of a total of over $400,000.  In addition, according to the information, she never reported her unauthorized income in her tax returns in tax years 2007 through 2009 and concealed the true sources of her income.

If convicted the defendant faces a maximum possible sentence of 35 years in prison, a three-year period of supervised release, a fine of up to $1 million, and a $400 special assessment.

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations. It is being prosecuted by Assistant United States Attorney Sozi Pedro Tulante.   

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA – Valeriy Davydchik, 59, of Philadelphia, PA, was sentenced today to 24 months in prison for his role in a conspiracy to defraud Medicare involving Penn Choice Ambulance Inc., located in Camp Hill, PA and Huntingdon Valley, PA.  On April 9, 2013, the defendant, Anna Mudrova, Yury Gerasyuk, Mikhail Vasserman, Irina Vasserman, Aleksandr Vasserman, Khusen Akhmedov, and Penn Choice Ambulance Inc. were indicted and charged with conspiracy to commit health care fraud and related charges.  All defendants have pleaded guilty and await sentencing before U.S. District Court Judge Juan R. Sànchez. 

From September 2009 through January 2013, Penn Choice 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.  Penn Choice falsified reports to make it appear that the patients needed to be transported by ambulance.  Penn Choice billed Medicare for these medically unnecessary services.  As a result, Penn Choice caused Medicare to pay more than $1.5 million based on these fraudulent claims.  Defendant Davydchik joined Penn Choice in 2011 as an ambulance driver.  He transported patients who walked to and from the ambulance, and often drove patients to medical appointments in his personal vehicle.  Penn Choice submitted claims to Medicare for ambulance transport for these patients.  Defendant Davydchik also falsified records and delivered kick-back payments to Medicare beneficiaries to induce them to be transported by Penn Choice ambulance even though such transport was not medically necessary. 

In addition to the prison term, U.S. District Court Judge Juan R. Sanchez ordered defendant Davydchik to pay restitution to Medicare and imposed a 3-year term of supervised release after imprisonment.  The Court also ordered the forfeiture of any assets traceable to the offense, and in lieu of assets, a money judgment against the defendant of $870,310.14. 

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Kareem McBride, a/k/a "Alif Holmes," 32, of Philadelphia, PA, was sentenced today to 15 years in prison for robbery and gun charges.  McBride pleaded guilty on May 20, 2013 to robbery which interferes with interstate commerce, using and carrying a firearm during a crime of violence, and being a convicted felon in possession of a firearm.

On October 12, 2012, McBride robbed the Wyalusing Food Market, at 54th and Wyalusing, at gunpoint.  The store is owned by a husband and wife.  McBride entered the store wearing a black knit hat pulled down over his face, brandishing a loaded black revolver that he pointed directly at the female store owner who had been working behind the counter.  McBride forced the victim to give him money from the cash register, then pointed his gun at the male store owner who had been in the back of the store.  The male store owner had a gun of his own and when McBride pointed his gun at him, the victim shot McBride.  The male store owner then detained McBride on the street outside of the store until the police arrived.

McBride was charged with convicted felon in possession of a firearm because he had previously been convicted of a felony.  He had amassed nine separate convictions between 1999 and 2011 for drugs, robbery and firearms crimes before robbing the Wyalusing Food Market. 

In addition to the prison term, seven years of which is mandatory, U.S. District Court Judge Mary McLaughlin ordered three years of supervised release and a $300 special assessment.

The case was investigated by the Philadelphia Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Thomas Zaleski.   

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

An indictment charging a market manipulation scheme was unsealed today against six defendants in connection with the trading of stock in Super Nova Resources, Inc. (“SNRR”), announced United States Attorney Zane David Memeger.  Charged with conspiracy, wire fraud, and securities fraud are: Carl Marciniak, 50, of California, Jeffrey Weinfurter, 46, of Yorba Linda, CA, James Wheeler, 54, of Corona, CA, Daniel Starczewski, 67, of Cornelius, NC, Danny Colon, 46, of Edgewater, NJ, and Louis Buonocore, 59, of Woburn, MA.  According to the indictment, the defendants ran the scheme with the intent to cause approximately $150 million in losses to participants in the over-the-counter U.S. securities market.

If convicted, each defendant faces a maximum statutory penalty of 55 years in prison, three years of supervised release, a $5.5 million fine, and a $300 special assessment. 

The case was investigated by Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Judy Smith and Patrick J. Murray.

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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Anthony Biello II, 55, formerly of Ambler, Pennsylvania, was charged today by indictment with one count of violating the Clean Air Act, announced United States Attorney Zane David Memeger.  According to the indictment, 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.

If convicted, defendant Biello faces a maximum possible sentence of five years in prison. 

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 is being prosecuted by Special Assistant United States Attorneys Martin Harrell and Patricia C. Miller from the EPA. 

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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Michael Green, 31, of Philadelphia, PA, was charged today by indictment with carjacking and brandishing a firearm during and in relation to a crime of violence, announced United States Attorney Zane David Memeger.  The indictment charges that the defendant committed these offenses on or about December 5, 2012.

If convicted of all charges, the defendant faces a maximum of life imprisonment, with a consecutive mandatory minimum sentence of seven years imprisonment.  The defendant also faces five years of supervised release, a $500,000 fine, and a $200 special assessment.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and is being prosecuted by Assistant United States Attorney V. Paige Pratter.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - Dominic Verdi, 58, of Philadelphia, Pennsylvania was charged today by indictment with Hobbs Act Conspiracy, Hobbs Act Extortion, and Honest Services Fraud, announced United States Attorney Zane David Memeger.  

The indictment alleges that Verdi, a former deputy commissioner of the Department of Licenses and Inspections for the City of Philadelphia and a member of the Philadelphia Public Nuisance Task Force, also had an ownership interest in a beer distributor named “Chappy’s Beer, Butts, and Bets.”  The indictment further alleges that Verdi used his official position to coerce Philadelphia bar and restaurant owners to purchase beer from Chappy’s in exchange for favorable treatment from Verdi.  The indictment also alleges that Verdi lied to employees of Philadelphia’s Inspector General’s office to conceal his ownership in Chappy’s.

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

The case was investigated by Federal Bureau of Investigation with assistance from the City of Philadelphia Office of the Inspector General.  It is being prosecuted by Assistant United States Attorney David L. Axelrod.

Click here to view the indictment

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - An indictment was unsealed yesterday charging Owen Moore, 50, of Pottstown, PA, and Larry Moore, 52, of East Hampton, Connecticut, in a scheme to defraud a Pennsylvania corporation, announced United States Attorney Zane David Memeger.  The indictment charges the brothers with conspiracy to commit mail fraud and mail fraud for conspiring to defraud Siemens Corporation of $263,739.84.  Owen Moore is also charged with wire fraud.

The alleged scheme was carried out between February 2008 and May 2010, while Owen Moore was employed as finance manager at Siemens’ Malvern, Pennsylvania office. Larry Moore owned and operated Benchmark Solutions, LLC, out of East Hampton, Connecticut.  The indictment alleges that Owen Moore directed his brother to submit fraudulent invoices to Siemens from Benchmark Solutions.  Larry Moore deposited 19 checks from Siemens and forwarded half of the proceeds to his brother.

It is further alleged that Owen Moore defrauded Siemens of an additional $42,291.28 which was used for tuition and other expenses not authorized by the company.  Moore allegedly had some of his employees charge the expenses on their company-issued credit cards which he then approved.

If convicted, Owen Moore faces an advisory sentencing guideline range of approximately 46 to 57 months in prison plus restitution; Larry Moore faces an advisory sentencing guideline range of approximately 30 to 37 months in prison plus restitution.

The case was investigated by the Secret Service.  The case is being prosecuted by Assistant United States Attorney Christopher Diviny.

Click here to view the indictment

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - Simon H. Aouad, 35, of Garnet Valley, PA, was sentenced today to 70 months in prison and restitution of $5,462,682 for a mortgage fraud scheme involving fraudulently obtained mortgages to purchase properties in North Wildwood, NJ, and Dorchester, MA, and a bank fraud scheme involving fraudulently obtained lines of credit at Wachovia Bank, now Wells Fargo Bank. Aouad pleaded guilty to conspiracy, mail fraud, and bank fraud. He was involved in three schemes.  In the first, properties primarily located in North Wildwood, NJ, were purchased for inflated sale prices, and using false borrower income and asset information so that the buyers could obtain kickbacks totaling tens of thousands of dollars, which were not disclosed to the lenders. In the second, lines of credit at Wachovia Bank were obtained using false borrower income and employment information. In the third, the conspirators arranged for sham real estate transactions involving properties located in Dorchester, MA, in which a straw buyer would purchase properties from one of the conspirators for inflated prices. The sham sales were financed with fraudulently obtained mortgages. The conspirators split the proceeds of the sham sales.

Aouad=s co-conspirators in the North Wildwood scheme included John C. Lucidi, Jr., Daniel Mumbower (who was, at the time, an employee of Wachovia Bank), Timothy Cook, Eric Maratea, and Eric Itzi, all of whom have pleaded guilty to charges stemming from the mortgage fraud scheme. Aouad brought willing buyers, such as Cook, Maratea, and Itzi, to Lucidi, in exchange for fees and kickbacks for each successful buyer. In the Massachusetts mortgage fraud scheme, Aouad identified straw buyers for his co-conspirators, which included a former mortgage broker, and Aouad shared in the proceeds of the sham sales. The mortgages Aouad facilitated in both schemes went into default and caused losses to the lenders of a little more than $5 million.

Aouad=s co-conspirators in the bank fraud scheme included a loan broker by the name of Gerald Cathie, who is charged elsewhere, as well as Daniel Mumbower, a corrupt Wachovia Bank loan officer.  Similar to his role in the mortgage fraud schemes, Aouad facilitated the fraudulently obtained Wachovia Bank lines of credit by bringing borrowers to Cathie and Mumbower to apply for the lines of credit using false income and other information. When the loans were funded, the borrowers paid Cathie a fee of 5-7% of the amount of loan proceeds, Cathie kicked money back to the loan officer, and the loan officer paid Aouad several thousand dollars from the loan proceeds for his role in identifying the borrower. The Wachovia Bank loans that Aouad facilitated went into default and caused losses to Wachovia Bank of approximately $400,000.

In addition to the prison term and restitution, U.S. District Court Judge C. Darnell Jones, II, ordered forfeiture of $3,675,468, a $400 special assessment, and five years of supervised release.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the United States Secret Service. It was prosecuted by Assistant United States Attorneys Nancy E. Potts.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Donte Camp, 41, of Philadelphia, and Calvin Maurice Clark, 43, of Bensalem were charged today by indictment with robbing the Center City Soft Pretzel Company, in Philadelphia,  on October 29, 2013, announced United States Attorney Zane David Memeger.  The indictment charges each defendant with one count of robbery which interferes with interstate commerce, one count of using and carrying a firearm during a crime of violence, and one count of being a convicted felon in possession of a firearm.   

If convicted, each defendant faces a mandatory minimum of seven years in prison with a maximum possible sentence of life imprisonment, a $750,000 fine, five years of supervised release, and a $300 special assessment. 

The case was investigated by Federal Bureau of Investigation, the Philadelphia Police Department, and the Philadelphia County District Attorney=s Office and is being prosecuted by Assistant United States Attorney Jeffery W. Whitt.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Dennis Erik Fluck Von Kiel, 57, of Macungie and New Tripoli, PA, the former medical director of Lehigh County Prison (“LCP”) was formally indicted today on one count of conspiracy to defraud the United States and five counts of attempting to evade or defeat federal taxes, announced United States Attorney Zane David Memeger.  Von Kiel has been held without bail at the Federal Detention Center since his arrest on February 28, 2014, on a federal criminal complaint.

Von Kiel is a doctor of osteopathy whose medical practice included treating inmates at LCP from approximately March 1989 until approximately August 2013. According to the indictment, Von Kiel earned wages of more than $200,000 a year from 2008 through 2012 and paid no federal taxes during any of those years. Von Kiel had represented that he was exempt from federal taxes because he was a minister of a religious institution called the “International Academy of Lymphology” (and its successors, the “International Academy of Life” and the “Christian Forum Assembly Church”) and had taken a “vow of poverty.” 

It is further alleged that Von Kiel directed his employer to deposit his bi-weekly paychecks into bank accounts for his “church,” and once the money arrived in those accounts, co-conspirators would transfer nearly the same amount of money into Pennsylvania bank accounts controlled by Von Kiel.  Von Kiel then allegedly used that money to pay for all of his family’s day-to-day living expenses and to buy some unusual items such as a batting cage for his sons, all while purportedly living under his “vow of poverty.”

If convicted, Von Kiel faces a maximum possible sentence of 30 years in prison, up to three years of supervised release, a fine of up to $1.5 million, and a $600 special assessment.

This case was investigated by Internal Revenue Service Criminal Investigations and the FBI. It is being prosecuted by Assistant United States Attorney Mark B. Dubnoff.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

  Case Involved Multi-Million Dollar Fraud Of Entrepreneurs

PHILADELPHIA - Andrew Bogdanoff, 67, of Scottsdale, Arizona, was sentenced today to 220 months in prison for defrauding 1,900 victims out of more than $26 million in a financial scheme involving Remington Financial Group and Remington Capital (collectively “Remington”).  The advance fee scheme defrauded victims searching for commercial financing.  Bogdanoff pleaded guilty on August 29, 2013 to conspiracy to commit mail and wire fraud, mail fraud, wire fraud, money laundering, conspiracy to defraud the United States, and filing false tax returns.  In addition to the prison term, U.S. District Court Judge William H. Yohn, Jr. ordered full restitution to Bogdanoff’s victims in the amount of $26,049,893 and to the IRS in the amount of $962,820, a $2,100 special assessment, and three years of supervised release.

Charged with Bogdanoff were Matthew McManus, 44, of Glenside, Pennsylvania, Shayne Fowler, 28, of Scottsdale, Arizona, Joel Nathanson, 26, of San Diego, California, Frank Vogel, 48, of Rochester Hills, Michigan, and Aaron Bogdanoff, 25, of Scottsdale, Arizona.

Andrew Bogdanoff was the founder and chairman of Remington Financial Group (later renamed Remington Capital) and ran the company with defendant Matthew McManus until 2008 in Arizona and Pennsylvania. After McManus left the company in 2008, defendant Fowler replaced McManus as Bogdanoff’s right-hand man. Defendant Joel Nathanson was one of Remington’s most proficient employees and helped Remington defraud many victims.  Defendant Frank Vogel was a Michigan-based broker who referred numerous victims to Remington in exchange for large kickbacks. 

Between 2005 and 2011, the defendants fraudulently induced hundreds of people to pay Remington fees in excess of $10,000 a piece, based on false representations that Remington had lenders and/or investors ready to provide financing for the victims’ projects.  To facilitate this fraud the defendants issued each victim a “letter of interest,” commonly referred to as an LOI.  Almost every LOI Remington issues stated that Remington had a lender or investor interested in financing the victim’s project.  Remington issued an LOI to every victim even though no Remington employee had spoken to any funding source and Remington knew that it was unlikely to find funding for the project.

The LOI was written to fraudulently lead victims to believe that Remington was either a lender or had spoken to lenders that had already expressed interest in the customer's project when neither was true. Additionally, the financing terms Remington included in the LOI were unrealistic and were used solely to induce customers to pay Remington's advance fees.  In addition to the false representations in the LOI, the defendants and other Remington employees allegedly also told victims the following lies to further induce victims to pay Remington’s fees:  a) Remington had five investors or lenders interested in their project; b) Remington was the actual lender for the project; c) Remington funded or “closed” 80 percent of its deals; d) the victim would get funding for the project once the advance fee was paid and/or;  e) Remington would provide funding through its funding source Northbridge.

After a customer paid Remington’s fee, McManus and Andrew Bogdanoff instructed Remington employees to find problems with the projects so that Remington could blame its failure to provide financing on the victim.  The defendants did this to help protect Remington from civil and criminal complaints. 

Some of the defendants used sophisticated means to perpetuate the fraud.  For instance, in 2010, defendants Fowler and Andrew Bogdanoff used Remington’s website to advertise an anti-fraud policy and stated falsely that Remington had recently provided information to the Federal Bureau of Investigation and local law enforcement authorities about a suspected email scam.  Remington posted this information to ensure that if potential customers used an internet search engine to search for allegations about Remington's fraud they would be directed to Remington's website, rather than third-party internet sources that contained negative information about Remington.

McManus was convicted at trial and will be sentenced on May 21, 2014.  A plea hearing for Vogel is scheduled for April 15, 2014, in U.S. District Court in the Eastern District of Michigan.  The remaining defendants have already pleaded guilty.  A sentencing hearing for Aaron Bogdanoff is scheduled for April 11, 2014. Sentencing hearings for Fowler and Nathanson are scheduled for May 20, 2014.

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation Division with assistance from the Pennsylvania Securities Commission.  It is being prosecuted by Assistant United States Attorney David Axelrod.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Elias Karkalas, 50, a medical doctor who resides in Phoenixville, Pennsylvania, was arrested yesterday on tax charges, announced United States Attorney Zane David Memeger.  Karkalas owned and operated Upper Merion Family Practice P.C.  The indictment, unsealed today, charges corrupt or forcible interference with the administration of Internal Revenue Laws, filing false individual and corporate tax returns, and failing to file personal and corporation tax returns.

According to the indictment, Karkalas was a participant in an Internet pharmacy organization which permitted individuals, seeking to purchase prescription drugs, to acquire a prescription from a physician without an examination.  Between 2005 and 2011, Karkalas allegedly authorized more than 750,000 prescriptions for which he was paid approximately    $2.5 million which the defendant failed to report on his corporate and individual tax returns.

If convicted, Elias Karkalas faces a maximum possible sentence of 15 years in prison, a fine of up to $1.3 million, restitution to the IRS, a special assessment of $475, and two years of supervised release.

The case was investigated by Internal Revenue Service Criminal Investigations.  It is being prosecuted by Assistant United States Attorney Floyd J. Miller and Trial Attorney Dennis R. Kihm, with the U.S. Department of Justice’s Tax Division.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Ronald Stone, 29, of Philadelphia, PA, was charged today by superseding indictment with three robberies or attempted robberies at various Cosi stores, announced United States Attorney Zane David Memeger.  Stone was added to an indictment charging James Pray. According to the indictment, on December 3, 2013, Stone and Pray robbed the Cosi store, at 235 S. 15th Street in Philadelphia; on December 9, 2013, they allegedly attempted to rob the Cosi at 140 S. 36th Street in Philadelphia; and on December 24, 2013, they allegedly robbed the Cosi, at 235 S. 15th Street in Philadelphia.  The pair is also charged with using a handgun during the two robberies.    

If convicted,each defendant faces a mandatory minimum of 32 years in prison with a maximum sentence of life, as well as five years of supervised release, a substantial fine, a special assessment, restitution, and forfeiture of the firearm and ammunition. 

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

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA - Carnell Ragan, 48, of Philadelphia, was sentenced today to 72 months in prison for an identity theft scheme that caused at least $95,233.22 in losses to his victims. The prison term includes a two year mandatory term.  Ragan stole personal information of hundreds of unsuspecting individuals.  He obtained classified hospital records which contained patient and staff account and personal information, official DMV and credit card company’s holograms and employee badges of various companies.  He created counterfeit credit cards and he also sold his victims’ credit card account numbers to anyone who wanted one and who would pay his fee.  He invested in sophisticated equipment which enabled him to do this on a large scale.  When Pennsylvania State Police searched Ragan’s home, they found account numbers written on pieces of paper, on magnetic strips, pressed on credit cards, on ink rolls and in hospital records.  Of those found, 107 victims reported losses.

Ragan pleaded guilty on October 4, 2013, to conspiracy to commit access device fraud and aggravated identity theft.  In addition to the prison term, U.S. District Court Judge R. Barclay Surrick ordered restitution of $95,233.22 to Ragan’s victims, a $200 special assessment, and three years of supervised release. 

The case was investigated by United States Secret Service and Pennsylvania State Police.  It was prosecuted by Assistant United States Attorney Virgil Walker.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA - Dave Brister, 57, of Philadelphia, pleaded guilty today to all counts stemming from a counterfeit check scheme that victimized dozens of people across the United States through a series of Internet-based sales scams.  Brister pleaded guilty to 24 counts including conspiracy, five counts of mail fraud, 12 counts of wire fraud, two counts of presenting and transmitting counterfeit money orders, and four counts of passing and uttering counterfeit checks. U.S. District Court Judge Gene E.K. Pratter scheduled a sentencing hearing for June 17, 2014.

Brister teamed up with at least one person located outside of the United States to defraud Americans in a series of Internet-based schemes.  He allegedly duped the recipients of counterfeit checks and money orders into depositing the items into their bank accounts and wiring money to him.  In one scam, Brister and his co-conspirators posted advertisements on the website Craigslist.com for fake jobs, which included phony positions such as “secret shoppers” and “administrative assistants.”  Whenever a person answered the advertisement and was “hired” for the fake job, Brister or a co-conspirator would send counterfeit money to the “new employee” along with a set of instructions on how to complete their new “employment” obligations.  The instructions generally involved depositing the checks or money orders into their own bank accounts, keeping a portion as their “salary,” performing some simple task, and sending the rest of the money to Brister via Western Union or MoneyGram.  Only after wiring the funds to Brister did the would-be employees learn that the checks and money orders they had deposited into their bank accounts were counterfeit.

In a different scheme, a co-conspirator of Brister’s would respond to advertisements on Craigslist.com for the sale of merchandise, agree to buy the advertised item, send counterfeit checks or money orders to the seller in excess of the sales price, and indicate that the difference was to be spent on a third-party delivery company.  Brister’s co-conspirator would identify Brister as the representative of the third-party delivery company and ask the seller to deposit the check or money order into his account, keep enough to cover both the sales price and a little bonus, and then wire the rest to Brister.  As with the fake job-offer scheme, the sellers followed the instructions and wired thousands of dollars to Brister, only to learn that the monetary instruments they had received were counterfeit, and their bank accounts had been debited.

In total, Brister received more than $98,000 in fraudulent proceeds from the various Internet-based schemes between January 2008 and August 2012.  Brister and at least one co-conspirator also planned to send additional counterfeit checks and money orders to unsuspecting victims in the United States as part of their schemes.

Brister faces a possible advisory sentencing guidelines range of three to five years in prison, three years of supervised release, a fine of up to $6 million, and a $2,500 special assessment.

The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations and the United States Postal Inspection Service.  It is being prosecuted by Assistant United States Attorney Mark B. Dubnoff.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
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PHILADELPHIA - Michael Crockett, 29, of Kansas City, Missouri, was charged today by Information with attempting to intentionally damage a computer, announced United States Attorney Zane David Memeger.

The Information alleges that between September 24 and 26, 2012, Crocket knowingly caused the transmission of codes and commands to a computer hosting the City of Philadelphia’s website, www.phila.gov, in an attempt to shut down that website.  This type of attack is known as and described as a distributed denial of service attack (DDOS).  Crockett’s actions caused a loss to the city of more than $5,000.

If convicted the defendant faces a maximum possible sentence of 10 years in prison.

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

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Benjamin Easley, 36, of Drexel Hill, Pennsylvania was charged yesterday by Indictment   with three counts of bank fraud and three counts of aggravated identity theft, announced United States Attorney Zane David Memeger.

The indictment alleges that Easley oversaw three separate bank fraud schemes in which he recruited people to pose as true account holders to access their accounts, drove them around to the banks, and gave them false identity documents to use to access the accounts. The indictment alleges that Easley and his co-schemers made off with approximately $232,570 from the banks in question. 

Easley faces a maximum sentence of 96 years’ imprisonment, including a two year mandatory term of imprisonment, a five year period of supervised release, a $3,750,000 fine, and a $600 special assessment.

The case was investigated by the United States Secret Service and is being prosecuted by Assistant United States Attorney Michael S. Lowe.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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John Smith, 45, of Belcamp, Maryland, was charged today by Information with bank fraud and aggravated identity theft, announced United States Attorney Zane David Memeger.

According to the information, between January 2011 and January 2013, the defendant was employed at the Pitney-Bowes mail distribution center in Reading, Pennsylvania, and he stole hundreds of Bank of America bank cards and sold them to other persons, knowing that the stolen cards would be used to make fraudulent purchases.

If convicted the defendant faces a maximum possible sentence of 32 years in prison, five years of supervised release, a fine of $1.25 million, and a $200 special assessment.

The case was investigated by the U.S. Secret Service and is being prosecuted by Assistant United States Attorney Laurie Magid.

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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
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PHILADELPHIA - Gomer Thomas Williams, 54, of Philadelphia, PA, pleaded guilty today to one count of wire fraud in connection with a scheme to defraud clients of the legal firm where he worked.  Williams was an attorney and associate with the Philadelphia law firm, Spector Gadon & Rosen (“Spector”). Between 2007 and 2012, Williams defrauded four of his trust and estate clients of approximately $503,361 by diverting funds from his clients’ accounts to his personal accounts, and by overbilling his clients for legal work that was not performed.

U.S. District Court Judge Legrome Davis scheduled a sentencing hearing for June 23, 2014. Williams faces a potential advisory sentencing guideline range of 33 to 41 months in prison, a $100 special assessment, a possible fine, and up to three years of supervised release.

For the trusts, Williams was the trustee, and, for the estates, Williams was the administrator and/or executor. Williams exercised complete control over the victim-clients’ funds, including controlling their checking accounts. Williams abused his fiduciary position in transferring funds from their accounts to pay his own personal expenses, including his mortgage.

The case was investigated by the FBI and is being prosecuted by First Assistant United States Attorney Louis D. Lappen.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA – An indictment was unsealed today charging Edward J. Rorie, 50, of Philadelphia, PA, with 25 counts of preparing and filing false tax returns, announced United States Attorney Zane David Memeger.  Rorie was arrested this morning.  According to the indictment, for tax years 2009 through 2011, Edward J. Rorie prepared at least 25 tax returns which were materially false.  In preparing the fraudulent returns, the indictment alleges that Edward J. Rorie variously claimed expense deductions and tax credits to which the filers not entitled to receive. The tax credits included the First Time Home Buyer Tax Credit, The Hope Tax Credit, The Earned Income Tax Credit, Education Credits, The Child Care Tax Credits and The Recovery Act’s Additional Child care Credit. The indictment alleges a loss to the Internal Revenue Service of at least $100,000.

If convicted, Rorie faces a maximum possible sentence of 75 years of imprisonment, a fine of $6.25 million, a special assessment of $2,500 and 1 year of supervised release.

The case was investigated by Internal Revenue Service Criminal Investigations and is being prosecuted by Assistant United States Attorney Floyd J. Miller.

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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Donald Sheppard, 57, of Philadelphia, PA, was charged today by Information with one count of theft of government funds, announced United States Attorney Zane David Memeger. According to the information, after Sheppard’s mother died in December 2001, Sheppard improperly received and converted to his own use the Retirement and Suvivor’s Insurance (RSI) benefit payments that were intended for her.  He collected these payments from early 2002 until the benefits were suspended in or about March 2005.  

It is further alleged that between May 2003 and August 2012, Sheppard improperly received and converted to his own use the SSI benefits for individual J.B. and, between December 2005 and August 2012, improperly received and converted to his own use the SSI benefits for individual A.M.  Sheppard allegedly defrauded the Social Security Administration of approximately $162,153.85.

If convicted, the defendant faces a maximum possible sentence of 10 years imprisonment, a three-year period of supervised release, a $250,000 fine, a $100 special assessment, and the imposition of full restitution.

The case was investigated by the Social Security Administration-Office of the Inspector General and Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Patrick J. Murray.

Click here to view the indictment

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Donald Sheppard, 57, of Philadelphia, PA, was charged today by Information with one count of theft of government funds, announced United States Attorney Zane David Memeger. According to the information, after Sheppard’s mother died in December 2001, Sheppard improperly received and converted to his own use the Retirement and Suvivor’s Insurance (RSI) benefit payments that were intended for her.  He collected these payments from early 2002 until the benefits were suspended in or about March 2005.  

It is further alleged that between May 2003 and August 2012, Sheppard improperly received and converted to his own use the SSI benefits for individual J.B. and, between December 2005 and August 2012, improperly received and converted to his own use the SSI benefits for individual A.M.  Sheppard allegedly defrauded the Social Security Administration of approximately $162,153.85.

If convicted, the defendant faces a maximum possible sentence of 10 years imprisonment, a three-year period of supervised release, a $250,000 fine, a $100 special assessment, and the imposition of full restitution.

The case was investigated by the Social Security Administration-Office of the Inspector General and Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Patrick J. Murray.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Justin Michael Credico, 32, of West Chester, PA, was charged by indictment, filed yesterday, with two counts of threatening Federal law enforcement officers and two counts of threatening the immediate family members of Federal law enforcement officers, announced United States Attorney Zane David Memeger.

If convicted the defendant faces a maximum possible sentence of 32 years imprisonment.

The case was investigated by agents of the Federal Bureau of Investigation and is being prosecuted by Special Assistant United States Attorney Karen Fox.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Jerold J. Cohen, 78, of Bala Cynwyd, PA, was charged today by Information with conspiracy, aggravated structuring of financial transactions, and filing false tax returns, announced United States Attorney Zane David Memeger. The Information charges that Cohen operated a sports bookmaking operation and accepted payment from his bettors in the form of checks. According to the information, between May 2009 and January 2011, Cohen cashed and caused to be cashed over 170 such checks, each made out for just under $10,000, for a total of over $1.5 million, which was income he received in connection with his bookmaking operation. It is further alleged that in 2009 and 2010, Cohen underreported income from his bookmaking operation by at least $450,000 in each year.

If convicted, the defendant faces a maximum possible sentence of 21 years in prison, threeyears of supervised release, a $950,000 fine, a $400 special assessment, and forfeiture of $1.5 million.

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 Attorney Nancy E. Potts.

Click here to view the indictment

1An Indictment/ Information/Criminal Complaint is an accusation.  A defendant is presumed innocent unless and until proven guilty.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Daniel Mumbower, 35, a former banker, of Glassboro, NJ, was sentenced today to 41 months in prison for two counts of bank fraud and one count of receiving bribes by a bank employee for his role in a scheme that defrauded lenders of nearly $3 million. U.S. District Court Judge C. Darnell Jones, II, also ordered three years of supervised release, a $300 special assessment, restitution of $2,718,758, and forfeiture of $2,516,317. Mumbower must surrender to the Bureau of Prisons on May 14, 2014.

Mumbower worked as a financial specialist at Wachovia Bank in Sicklerville, New Jersey, from April 2005 through April 2008. In mid-2006, Mumbower met a corrupt loan broker, Gerald Cathie (charged elsewhere), who began bringing clients’ applications for lines of credit to Mumbower for submission to Wachovia. Through Cathie, Mumbower met Simon Aouad (charged elsewhere).  Aouad also brought others’ loan applications to Mumbower.  Mumbower realized that the applications Cathie and Aouad brought him contained false income and employment information and were supported by false documentation, such as false tax returns, but he processed the applications anyway.  Mumbower earned a commission from Wachovia Bank for each loan that closed.  Mumbower paid Cathie and Aouad a commission out of the proceeds of the loan, which was against bank policy, and Cathie paid Mumbower a cash kickback of approximately $200 per approved loan.  Aouad, also, paid Mumbower kickbacks totaling approximately $10,000. The defendant processed a regular, weekly stream of fraudulent loan applications brought to him by Cathie and Aouad. Most applications were for lines of credit totaling between $50,000 and $100,000. 

Mumbower received several thousand dollars in kickbacks from both Cathie and Aouad for assisting them in obtaining lines of credit for others.  Most of the loans were unsecured business lines of credit.  The borrowers defaulted.  The total intended loss for the fraudulent lines of credit was approximately $765,000. During the same time frame, Mumbower met John Lucidi, charged elsewhere, a corrupt mortgage broker working in West Chester and Newtown Square.  Lucidi was orchestrating a mortgage fraud scheme in which he and others, including Aouad, found buyers to apply for mortgages to purchase real estate located mostly in North Wildwood, New Jersey.  With the knowledge of Lucidi, Aouad, and others, but unbeknownst to the lenders, the buyers applied for the mortgages using false and fraudulent income and asset information and received tens of thousands of dollars in undisclosed kickback payments for purchasing the properties.  At the request of Aouad and Lucidi, Mumbower provided false verifications of deposit (VODs) purporting to show that the mortgage applicants had tens of thousands of dollars in Wachovia Bank accounts.  These false VODs were provided to the mortgage lenders, including Wells Fargo Bank, PNC Bank, and others, in support of mortgage applications to purchase real estate located in West Chester, Pennsylvania; North Wildwood, New Jersey; and Boston, Massachusetts.  In exchange for providing the false VODs, Aouad paid Mumbower $5,000 cash.  Many of the properties purchased using the false verifications of deposits supplied by Mumbower went into default, and the lenders lost approximately $2 million. 

The defendant faces a maximum possible sentence of 90 years of imprisonment, five years of supervised release, a $3 million fine, and a $300 special assessment.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the United States Secret Service. It is being prosecuted by Assistant United States Attorney Nancy E. Potts.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - John Bariana, 41, of Mullica Hill, NJ, was sentenced today to 18 months in prison for his role in a massive mortgage fraud scheme that resulted in at least 35 fraudulent mortgage loans worth more than $10 million. Bariana pleaded guilty on August 26, 2010 to 12 counts. In addition to the prison term, U.S. District Court Judge Mary McLaughlin ordered a $7,500 fine, a $1,200 special assessment, and forfeiture of $400,000 joint and several with co-defendants Edward and Jacqueline McCusker.  The McCuskers were sentenced on March 6, 2014.  Edward McCusker was sentenced to five years in prison, his wife Jacqueline was sentenced to one year of home confinement followed by three years of probation.

The McCuskers operated Axxium Mortgage, Inc. with Bariana. Co-defendants Jeffrey A. Bennett and Stephen G. Doherty, owners of the Doylestown law firm Bennett & Doherty, P.C., were also involved in the scheme and pleaded guilty.

The defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants took whatever equity the homeowner had left, funneled it through shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.

The defendants promised financially distressed homeowners that they would find an “investor” who would help them save their home. The defendants would then either purchase the home themselves or arrange for a straw purchaser to obtain a fraudulent mortgage and then transfer of the title of the homeowner?s residence to the straw purchaser. The McCuskers, along with Bariana, obtained the fraudulent mortgages by submitting false documents to mortgage lenders and making false claims about the purchasers’ finances. The defendants also concealed from the lender the fact that the homeowner was going to continue to reside in the home and that the mortgage payments were going to continue to be made, in part, by the distressed homeowner and funneled through the straw purchaser. Bariana and Jacqueline McCusker each acted as straw purchasers for ten homes. The defendants also recruited at least seven other persons to act as straw owners in order to obtain additional fraudulent mortgages.

Doherty solicited and referred distressed homeowners to Edward McCusker, and used fraudulent bankruptcy filings for some of the distressed homeowners to delay foreclosure until McCusker had obtained an investor and a mortgage. Bennett handled the closings for the real estate transfers, falsifying the settlement statements and manipulating the information provided to the lender in order to hide the nature of the scheme until after the loan was funded.

Doherty was sentenced to one year and one day in prison and ordered to forfeit $202,644.33; Bennett was sentenced to 18 months in prison, a $7,500 fine, a $400 special assessment and forfeiture joint and several with Doherty. A federal jury convicted the McCuskers on June 22, 2011 of conspiracy to commit mail and wire fraud, conspiracy to commit money laundering, wire fraud and mail fraud. In addition to their prison terms, the McCuskers were ordered to forfeit $400,000; Edward McCusker was ordered to pay a fine of $12,500, a special assessment of $1,000, and was ordered to complete three years of supervised release; Jacqueline McCusker was ordered to pay a special assessment of $900.

This case was investigated by the Federal Bureau of Investigation and the Pennsylvania Department of Banking. It is being prosecuted by Assistant United States Attorney Nancy Rue.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Shamarr Joel Pitts, 25, of Philadelphia, Pennsylvania, was charged by indictment with one count of possession of contraband in prison, on or about November 14, 2013, in the Federal Detention Center in Philadelphia, Pennsylvania, announced United States Attorney Zane David Memeger. The indictment charges that Pitts possessed a sharp metal object with a handle made of cloth wrapped with a shoelace that was an object designed or intended to be used as a weapon.

If convicted of all counts, Pitts faces a maximum sentence of five years imprisonment, a $250,000 fine, three years of supervised release, and a $100 special assessment.

This case has been investigated by the Federal Bureau of Investigation and the Federal Bureau of Prisons. The case has been assigned to Assistant United States Attorney Thomas M. Zaleski.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Tanika Victoria Little, 35, of Philadelphia, PA, was charged today in a superseding indictment with two counts of bank theft and one count of tax evasion. 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.  The indictment alleges that 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 in $20 denominations.  It is  further alleged that 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 allegedly purchased 27 money orders, totaling approximately $13,000, with cash from eight different retail establishments in South Philadelphia, PA.  In addition, in 2011, Little allegedly 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. 

The indictment alleges that when Little’s 2011 federal income tax return was filed, she evaded taxes by falsely reporting that her total gross income was $28,870, when her true gross income was approximately $138,870, as demonstrated by her alleged acquisition of the missing money, her deposits and expenditures. 

If convicted, Little faces a maximum possible sentence of 65 years imprisonment, a five-year term of supervised release, a fine of up to $2.1 million, and a $300 special assessment.

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.              

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Wendell Cisco, 39, of York, PA, pleaded guilty today to his role in a tax fraud scheme that bilked the government of over $1.8 million. Cisco is one of nine defendants who participated in a conspiracy to defraud the Internal Revenue Service through false tax returns. Cisco pleaded guilty to one count of conspiracy to file false claims and one count of theft of government property, admitting responsibility for $525,434.74 in actual losses. Sentencing is scheduled for June 16, 2014. Cisco faces a statutory maximum sentence of 20 years in prison plus possible restitution to the IRS. He is the last defendant to plead guilty.

Between September 2006 and March 2011, Michael Akers filed false tax returns on behalf of people who believed he was a legitimate tax preparer, who knew he was not a legitimate tax preparer, or who had their identities stolen and did not know tax returns were being filed. Akers would allegedly: inflate the amount of taxes paid by a tax filer, claim refunds to which the filer was not entitled, file the return electronically, have the refund electronically deposited into a bank account, and take a cut of the refund check. Each fraudulent return resulted in a refund in the thousands of dollars. Cisco, and each of the other co-defendants, facilitated the fraudulent returns by providing Akers tax payers’ identity information for Akers to prepare the false returns or by providing Akers bank accounts into which Akers could direct the IRS to send the refunds. The scheme attempted to defraud the government of more than $3.2 million, with actual losses of more than $1.8 million.

Money was passed among members of the conspiracy in face to face hand-offs, and in wire transfers among some of the defendants.

Charged in the original indictment were: Michael Akers, of Philadelphia and Cherry Hill, NJ, Raymond Holmes, of Philadelphia, William Fisher, of Philadelphia, Lynell Matthews and Latoya Matthews, both of Whitesboro, NJ, Maria Latorre, of York, PA, and Jalon Hopewell, of Philadelphia. Ruby Jones, of Philadelphia, was charged separately by information.  

The case was investigated by the Internal Revenue Service Criminal Investigation Division and the United States Secret Service. It is being prosecuted by Assistant United States Attorney Sarah Grieb and Special Assistant United States Attorney Karen Fox.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Harvey G. Bitler, Sr., 56, of Shillington, PA, was charged today by information with failing to pay over to the government income taxes and social security taxes withheld from his employees’ paychecks, announced United States Attorney Zane David Memeger.

Bitler was the owner of Big H Farms and BH Farms in Berks County, Pennsylvania. Big H Farms provided labor for mushroom growing facilities and BH Farms employed salaried employees associated with the operation and management of Big H Farms. The information alleges that these companies withheld Medicare and Social Security taxed (FICA taxes) and income taxes from their employees’ paychecks but, between 2007 and 2012, made no payments to the Internal Revenue Service of these withheld taxes. It is further alleged that between 2008 and 2012, BH Farms did not pay over all the taxes withheld in the first quarter of 2008, and made no payments to the Internal Revenue Service for the remaining quarters of those years. In total, for these periods, Bitler withheld but allegedly failed to pay a total of $4,566,572.04.

If convicted, the defendant faces a maximum possible sentence of five years in prison and possible restitution to the IRS.

The case was investigated by the Internal Revenue Service Criminal Investigations with the assistance from revenue agents with Small Business and Self-Employed Division of the Internal Revenue Service. It is being prosecuted by Assistant United States Attorney Albert S. Glenn.

Click here to view the indictment

1An Indictment or Information is an accusation.  A defendant is presumed innocent unless and until proven guilty.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - Michael Pouls, 52, of Gladwyne, Pennsylvania, was sentenced today to 96 months in prison for fraudulently inducing two banks to loan him a total of $13.35 million.  Pouls defrauded National Penn Bank in 2007 and the former Wilmington Bank in 2008 by presenting fraudulent securities statements.  He pleaded guilty on December 10, 2012 to one count of bank fraud, one count of wire fraud and two counts of loan fraud.

 

Pouls signed closing documents on the National Penn loan in November 2007 knowing that the collateral he had pledged – a TD Ameritrade account - had already been depleted. Seven months later, in June 2008, he likewise obtained a second and much larger loan from Wilmington Trust based on the same non-existent collateral, giving both banks negative pledges on the identical phony collateral.  For a period of more than two years, Pouls regularly provided both banks with forged account statements.  In 2010, Pouls asked the banks for even more money and that’s when National Penn discovered the fraud.

 

In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered five years of supervised release, restitution/forfeiture in the amount of $11,975,053.80, and a $400 special assessment.

 

The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Karen Grigsby.

An Indictment was filed today charging Kyle Costello, 27, and Matthew Hill, 29, both of Lancaster, PA, with conspiracy to commit armed bank robbery, armed bank robbery, carrying and using a firearm during and in relation to a crime of violence, and aiding and abetting, announced United States Attorney Zane David Memeger.  Hill is also charged with attempted bank robbery.

According to the indictment, on November 7, 2013, the defendants robbed the National Penn Bank, on Lancaster Pike in Shillington, Pennsylvania, at gunpoint.  It is further alleged that on December 6, 2013, Hill tried to rob the Susquehanna Bank, on E. Market Street in York, Pennsylvania.

If convicted the defendants face a maximum possible sentence of life in prison, with a mandatory minimum sentence of seven years consecutive to any other sentence imposed, and a fine of up to $1million.

The case was investigated by the FBI, York City Police Department, Cumru Township Police Department, Lancaster City Police Department.  It is being prosecuted by Assistant United States Attorney Salvatore L. Astolfi.

Click here to view the indictment

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Marc Celestin, 34, of Miami, Florida, was charged today by Indictment with eight counts of wire fraud and eight counts of making a false claim against the United States, announced United States Attorney Zane David Memeger.  The indictment alleges that from January 2011 to May 2012, Celestin used the stolen identities of a number of people to fraudulently prepare tax returns directing that the tax refund checks be direct deposited to bank accounts opened and controlled by Marc Celestin.

If convicted the defendant faces a maximum possible sentence of 200 years of imprisonment, three years of supervised release, a $4,000,000 fine, and a special assessment of $1,600.

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

Click here to view the indictment

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Scam involved lawyers, mortgage brokers and more than $14.6 million in property

PHILADELPHIA - Edward G. McCusker, 49, of Chesterbrook, PA, was sentenced today to five years in prison for a massive mortgage fraud scheme that resulted in at least 35 fraudulent mortgage loans worth more than $10 million. His wife Jacqueline, 49, of New Hope, PA, was sentenced to one year of home confinement followed by three years of probation for her role in the crime. A federal jury convicted the couple on June 22, 2011 of conspiracy to commit mail and wire fraud, conspiracy to commit money laundering, wire fraud and mail fraud. U.S. District Court Judge Mary McLaughlin handed down the sentence. In addition to the prison terms, the McCuskers were ordered to forfeit $400,000; Edward McCusker was order to pay a fine of $12,500, a special assessment of $1,000, and complete three years of supervised release; Jacqueline McCusker was ordered to pay a special assessment of $900.

The McCuskers operated Axxium Mortgage, Inc., along with co-defendant John Bariana who pleaded guilty and is awaiting sentencing. Co-defendants Jeffrey A. Bennett and Stephen G. Doherty, owners of the Doylestown law firm Bennett & Doherty, P.C., also pleaded guilty. Doherty was sentenced, yesterday, to one year and one day in prison; Bennett’s sentencing is scheduled for March 7, 2014. 

The defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants took whatever equity the homeowner had left, funneled it through shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.

The defendants promised financially distressed homeowners that they would find an "investor" who would help them save their home. The defendants would then either purchase the home themselves or arrange for a straw purchaser to obtain a fraudulent mortgage and then transfer of the title of the homeowner's residence to the straw purchaser. The McCuskers, along with Bariana, obtained the fraudulent mortgages by submitting false documents to mortgage lenders and making false claims about the purchasers’ finances. The defendants also concealed from the lender the fact that the homeowner was going to continue to reside in the home and that the mortgage payments were going to continue to be made, in part, by the distressed homeowner and funneled through the straw purchaser. Bariana and Jacqueline McCusker each acted as straw purchasers for ten homes. The defendants also recruited at least seven other persons to act as straw owners in order to obtain additional fraudulent mortgages.

Doherty solicited and referred distressed homeowners to Edward McCusker, and used fraudulent bankruptcy filings for some of the distressed homeowners to delay foreclosure until McCusker had obtained an investor and a mortgage. Bennett handled the closings for the real estate transfers, falsifying the settlement statements and manipulating the information provided to the lender in order to hide the nature of the scheme until after the loan was funded.

This case was investigated by the Federal Bureau of Investigation and the Pennsylvania Department of Banking. It is being prosecuted by Assistant United States Attorney Nancy Rue.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA – Francis Aponte, 47, of Philadelphia, was sentenced today to 20 years in prison for possession of a firearm by a convicted felon. On June 17, 2012, Aponte was standing on the sidewalk near Indiana Avenue and 4th Street when two Philadelphia Police Officers spotted him shooting a gun into the air. The officers approached and saw Aponte throw the handgun – a .380 caliber Indian Arms semi-automatic – to the ground.  Aponte was arrested and charged as a convicted felon in possession of a firearm.  A federal jury found him guilty on December 5, 2013.  Of the 20 year term, 15 years is mandatory.  In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered five years of supervised release and a $100 special assessment.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Philadelphia Police Department.  It was prosecuted by Assistant United States Attorney Jose R. Arteaga.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Nancy Gonzalez, 74, of Philadelphia, PA, was charged today by information with one count of theft of Government funds, and one count of social security fraud, announced United States Attorney Zane D. Memeger.  The information alleges that between December 29, 1994 and September 2012, Gonzalez received and converted to her own use survivor's insurance benefits intended for her mother.  The benefits checks that Gonzalez’s mother received were directly deposited into an account jointly held by the defendant and the intended benefits recipient. After her mother died, Gonzalez did not report the death, resulting in fraudulent payments of approximately $155,400.33.

If convicted the defendant faces a maximum possible sentence of 15 years in prison, a $500,000 fine, and three years supervised release.  

The case was investigated by the Social Security Administration’s Office of the Inspector General and is being prosecuted by Special Assistant United States Attorney Thomas Moshang III.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Michael Bullock, 29, of Highland Springs, Virginia was charged today by Indictment   with one count of bank fraud and one count of aggravated identity theft, announced United States Attorney Zane David Memeger.

The indictment alleges that Bullock entered TD Bank branches and used false driver’s licenses and posed as the true account holders of TD Bank accounts in order with withdraw money from and cash fraudulent checks against the accounts. 

Bullock faces a maximum sentence of 32 years’ in prison, including a two year mandatory term, a five year period of supervised release, a $1,250,000 fine, and a $200 special assessment.

The case was investigated by the United States Secret Service and is being prosecuted by Assistant United States Attorney Michael S. Lowe.

Click here to view the indictment

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Celeste C. Paige, 55, of Newark, New Jersey, was charged today by Indictment   with two counts of bank fraud and two counts of aggravated identity theft, announced United States Attorney Zane David Memeger.

The indictment alleges that Paige entered TD Bank and Susquehanna Bank branches and used false driver’s licenses, sometimes posing as the true account holders, in order with withdraw money from and cash fraudulent checks against the customers’ accounts. 

Paige faces a maximum sentence of 64 years in prison, including a two year mandatory term of imprisonment, a five year period of supervised release, a $2.5 million fine, and a $400 special assessment.

The case was investigated by the United States Secret Service and is being prosecuted by Assistant United States Attorney Michael S. Lowe.

Click here to view the indictment

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

C. M. Jones, Inc., a landscaping business located in Chester County, PA, was charged today by Information with one count of conspiracy to make a false statement in an immigration matter, announced United States Attorney Zane David Memeger.

If convicted the owner of C. M. Jones, Inc. faces a maximum possible sentence of five years of probation, a $500,000 fine, and a $100 special assessment

The case was investigated by the Department of Homeland Security and the Department of Labor, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Terri A. Marinari.

Click here to view the indictment

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525