Eastern District of Pennsylvania

Arvita Phillips-Henderson, 68, of Philadelphia, PA, was charged yesterday by Information with one count of theft of government funds, announced United States Attorney Zane David Memeger.  According to the Information, the defendant applied for Supplemental Security Income from the Social Security Administration, and Housing Benefits from the Department of Housing and Urban Development, under her true Social Security Number while working.  She, later, collected retirement benefits under a second Social Security Number.  The defendant’s alleged actions resulted in a loss to the government of more than $87,000.          

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 $87,827.25, a $250,000 fine, and a $100 special assessment.

The case was investigated by the Social Security Administration Office of Inspector General, the U.S. Department of Housing and Urban Development Office of Inspector General, and the Philadelphia Housing Authority Office of Audit and Compliance.  It is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.

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 – A federal jury, yesterday, found 52-year old Rafael Cordero, a 23-year veteran of the Philadelphia Police force, guilty of interfering with the federal drug investigation of the Christian Serrano/Edwin Medina Drug Trafficking Organizations (“DTOs”). Cordero provided sensitive law enforcement information about drug investigations to his half-brother, David Garcia, a member of the Serrano/Medina DTOs. Cordero told his half-brother about a surveillance camera put up by the DEA to monitor activities occurring at a garage, located at 538 East Indiana Street in Philadelphia, used by the Medina DTO. When the FBI and DEA executed search warrants at several locations associated with the Serrano/Medina DTOs, including the garage, Cordero, after being informed about the searches by his half-brother and without having any official reason to do so, went to the search location on East Indiana Street and began looking in the windows of the garage. When confronted by law enforcement and brought inside the location, Cordero misrepresented his reason for being at the location and offered to assist with the search. At no time did Cordero provide his name to law enforcement.

Immediately after leaving the search location, Cordero placed a call to David Garcia and shared with him, among other things, how many law enforcement officers were conducting the search and what areas of the garage they were searching. Garcia removed a DVR tape that law enforcement had inadvertently failed to seize during the search and viewed it to see if Cordero was recorded at the garage at the time of the search, which he was. At no time did Cordero inform law enforcement that David Garcia had possession of the video tape.

When questioned by federal agents, Cordero denied giving information to Garcia regarding the surveillance camera, denied knowing of anyone associated with the Indiana Street garage, denied having spoken to David Garcia about the search at the garage, and denied passing on information regarding cooperating witnesses to Garcia, all of which were false statements.

Cordero faces a maximum possible sentence of 20 years imprisonment.  A sentencing date has not yet been set.

The case was investigated by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorneys Maureen McCartney and Kevin Brenner.

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

Edward Hill, 27, of Robesonia, PA, was charged today by information with distribution of child pornography and possession of child pornography, announced United States Attorney Zane David Memeger.  According to the information, between May 3, 2013 and July 10, 2013, Hill distributed over the Internet pictures that depicted children being sexually abused, and he possessed in excess of 600 images of child pornography.

If convicted, Hill faces a maximum possible sentence of 30 years’ imprisonment, which includes a mandatory minimum 5 year term of imprisonment, a mandatory minimum 5 years up to a lifetime of supervised release, a $500,000 fine and a $200 special assessment.

The case was investigated by Immigration and Customs Enforcement Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Jeffery W. Whitt.

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

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

Elijah Francis, 43, of the District of Columbia was charged today by Indictment with assaulting a federal corrections officer at the Federal Detention Center in Philadelphia, on May 21, 2013, announced United States Attorney Zane David Memeger.

If convicted the defendant faces a maximum possible sentence of 20 years in prison, five years supervised release, a $250,000 fine, and a $100 special assessment.

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

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 - Lorraine Dispaldo, 58, of Philadelphia, was sentenced today to 18 months in prison for her role in a fraud conspiracy with then-Philadelphia Traffic Court Judge Robert Mulgrew.  Dispaldo pleaded guilty to a total of 36 counts including conspiracy to commit mail and wire fraud, mail fraud, wire fraud, filing false personal income tax returns, and bankruptcy fraud.  Dispaldo and Mulgrew, who is awaiting sentencing, carried out a scheme to defraud the Pennsylvania Department of Community and Economic Development (“DCED”).   U.S. District Court Judge C. Darnell Jones, II also ordered restitution of $120,865, a $3,600 special assessment and three years of supervised release.

Dispaldo helped orchestrate the scheme to fraudulently receive and misuse Pennsylvania state grant funds awarded to non-profit groups.  Between 1996 and 2008, the DCED awarded hundreds of thousands of dollars in grants to two community groups with which Mulgrew and Dispaldo were associated.  DCED awarded approximately $397,000 in grants to the Community to Police Communications (“CPC”) to be used to purchase communications equipment for the police and to purchase materials to secure vacant lots and buildings for the protection of the police.  Dispaldo signed the CPC grant contracts with DCED.  Between 1997 and 2007 DCED also awarded approximately $460,000 in grants to the Friends of Dickinson Square (FDS”) to be used for the maintenance of Dickinson Square, at 4th and Tasker Streets, and the surrounding neighborhood.  Dispaldo’s codefendant, Mulgrew, signed the FDS grant contracts with DCED.

Dispaldo admitted that the grant contracts she submitted misrepresented how the funds would be used.  She admitted that, instead of using grant funds exclusively for materials and equipment, as agreed, she instead paid tens of thousands of dollars in CPC and FDS grant funds to Mulgrew’s relatives and associates, including the teenage sons of his friends, and to the State Representative’s life-long friends.   Dispaldo wrote over $104,000 of the almost $180,000 in impermissible payments made to persons for neighborhood revitalization “work.”  While there were several decent gardens built, some trees planted and much landscaping material purchased, for the most part the activities undertaken primarily served as a “constituent service” clean-up-the-neighborhood-arm for the Representative’s benefit, easy money for favored friends and relatives, a summer make-work program to benefit the teenage sons of Mulgrew’s neighborhood and childhood friends, and some work on private property.

To mask the fact that grant funds were being used improperly, Dispaldo falsified her five
CPC “close out” reports sent to DCED by concealing most of the $104,000 in payments she made to persons from CPC funds and FDS funds during 2005 through September 2010.  At times, Dispaldo submitted to DCED inaccurate IRS forms 1099, which document payments to persons, and at other times failed to prepare the forms, as required by law.   Dispaldo also improperly paid almost $13,000 in CPC funds to the Representative’s office cleaner and improperly used $4,600 in CPC grant funds over the years to pay for her personal cell phone.

To conceal the improper payments Dispaldo made to persons, she also submitted to DCED staggering numbers of duplicate phone invoices.   For example, she sent in $91,500 worth of receipts in the close-out report for the third grant in the amount of $90,000, but $41,640 of those receipts were already sent in with either the first or second grant close-out reports.  In the fourth close-out report, Dispaldo sent in $87,394 in receipts to satisfy the $50,000 grant, but $46,156 of those were previously sent to the state.    

Dispaldo filed false personal income tax returns for tax years 2006 through 2009, and  concealed her true income for 2008 and 2009 in a 2010 bankruptcy filing.      

            The case was investigated by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorney Paul L. Gray.

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

Jeron Cartwright, 31, and Tyree Scott, 31, of Philadelphia, Pennsylvania, were charged November 20, 2013, by Indictment, with conspiracy to commit a Hobbs Act robbery, drug, gun, and other offenses, announced United States Attorney Zane David Memeger. According to the indictment, between mid-August 2013 and October 24, 2013, Cartwright and Scott sought the help of another person in arranging the home invasion robbery of drug dealers. The defendants allegedly planned to steal, at gunpoint, approximately ten kilograms of cocaine. It is further alleged that on October 24, 2013, the defendants attempted, unsuccessfully, to carry out the armed home invasion robbery. The plan was interrupted by law enforcement.

 In addition to the conspiracy, the indictment charges Cartwright and Scott with attempted commission of a Hobbs Act robbery, aiding and abetting the attempted commission of a Hobbs Act robbery, conspiracy to possess with the intent to distribute five kilograms or more of cocaine, attempted possession with intent to distribute five kilograms or more of cocaine, carrying a firearm during and in relation to a crime of violence and to a drug trafficking crime, and being convicted felons in possession of a firearm.

If convicted, the defendants face a maximum possible sentence of life imprisonment.  Cartwright faces a 25 year mandatory minimum sentence and Scott, a15 year mandatory minimum sentence.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.          

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

Ian H. Ranberg, 47, of Souderton, PA, was charged today by Indictment1 with receipt, distribution and possession of child pornography, announced United States Attorney Zane David Memeger. According to the indictment, Ranberg received images of child pornography between May 23, 2012 and May 29, 2012, and between August 19, 2012 and September 19, 2012.  It is further alleged that on February 2, 2013, Ranberg distributed a video containing child pornography.  The indictment also alleges that on August 21, 2013, Ranberg was in possession child pornography on his computers and external hard drives.

If convicted of all charges, Ranberg faces a maximum possible sentence of 70 years in prison, including a five year mandatory minimum, a minimum of five years but up to a lifetime of supervised release, fines of up to $1 million, and $400 in special assessments.

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

This case was investigated by Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Jessica Natali.

Click here to view the indictment

1An 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 – Elena Ruiz, 48, of Drexel Hill, PA, was sentenced today to 12 months and a day in prison and Brian Welsh, 50, of Springfield, PA, was sentenced to 20 months in prison for their roles in the tax evasion scheme carried out by the owners of the ANifty Fifty=s@ restaurant chain.  Joseph Donnelly, 50, of Springfield, PA, was sentenced yesterday to 28 months in prison for his role.

Restaurant owners Robert Mattei and Leo McGlynn, along with the above defendants, constructed a long-running scheme to avoid paying millions of dollars in personal and employment taxes as related to their restaurant chain. They cheated the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts. They also filed income tax returns claiming they were due refunds based on the erroneous reporting of their incomes.

Mattei, was sentenced Monday to 15 months in prison.  McGlynn was sentenced Tuesday to 36 months in prison. All five defendants pleaded guilty to the charges. The restaurant owners paid employees a portion of their wages with unreported cash in order to evade payroll taxes; paid suppliers with unreported cash; and had false tax returns prepared that under-reported income and falsely inflated expenses and deductions. Just between the years 2006 and 2010, the defendants deliberately failed to properly account for $15.6 million in gross receipts, thereby evading $2.2 million in federal employment and personal taxes. In the course of their conspiracy, Mattei, McGlynn, Donnelly, and Welsh committed bank fraud by submitting to the bank bogus income tax returns in order to secure several business loans.

In addition to the prison term, U.S. District Court Judge Mary McLaughlin ordered the defendants to pay restitution to the IRS.  To date, the IRS has received $4,336,871 in tax payments and an additional $205,300 in forfeiture payments. 

This case was investigated by the Internal Revenue Service Criminal Investigations and the FBI.  It was prosecuted by Assistant United States Attorneys Nancy E. Potts and Paul G. Shapiro.

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

PHILADELPHIA - David Anthony Holman, 46, of Philadelphia, was charged today by Information with one count of conspiracy to commit loan and wire fraud and one count of loan fraud for his participation in an alleged mortgage fraud ring, announced United States Attorney Zane David Memeger.  Holman is the 13th defendant charged in the alleged scheme involving a real estate company known as “KREW” in Philadelphia.  The information also seeks the criminal forfeiture of over $225,000 from Holman.

According to the information, between May 2004 and February 2009, primarily in the West Philadelphia section of the city of Philadelphia, the defendants and KREW Settlement Services handled more than 100 fraudulent mortgage loans, obtaining more than $20 million in fraudulent loan proceeds.  Holman is alleged to have directly participated in helping to secure a $225,250 mortgage loan from First Tennessee Bank (via its subsidiary, First Horizon Home Loan Corporation) on 29 W. Pomona Street in Philadelphia by recruiting another person to serve as the “straw buyer” for that property.  It is further alleged that Holman directed the straw buyer to make false statements in the loan application and in verbal statements to the lender. 

The other 12 co-conspirators charged in this district with participating in the same mortgage fraud ring include: Kevin Joseph Franklin,  Roderick L. Foxworth, Sr., Eric Sijohn Brown, and Walter Alston Brown, Jr., who owned and operated KREW;  Cynthia Evette Brown, Francine Shanique Cross, Willie G. Manley Jr., Eric Ponder, Rashika J. Moon, Dontaya S. Devore, Mark Murphy, and Gregory Christopher Thornton, who worked with or for KREW.  

If convicted, Holman faces a maximum possible sentence of 35 years in prison, five years of supervised release, a fine of $1.25 million or twice the value of the property involved in the transactions, and a $200 special assessment.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, 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.

Click here to view the indictment

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

            KREW is an acronym of the first names of these four owner/operators.

            A 14th co-conspirator, John William Polosky, a mortgage broker who is alleged to have knowingly brokered fraudulent loan packages for the KREW co-conspirators, has been charged in the Western District of Pennsylvania.

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

Randall McMahon, 27, of Easton, PA, was charged today by Information with one count of wire fraud and one count of bank fraud, announced United States Attorney Zane David Memeger.

If convicted, the defendant faces a maximum possible sentence of 50 years imprisonment, a five-year period of supervised release, a $1.25 million fine, a $200 special assessment, and the imposition of full restitution.

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

Click here to view the indictment

1An 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

WASHINGTON – The Justice Department, along with federal and state partners, today announced a $13 billion settlement with JPMorgan - the largest settlement with a single entity in American history - to resolve federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS) by JPMorgan, Bear Stearns and Washington Mutual prior to Jan. 1, 2009. As part of the settlement, JPMorgan acknowledged it made serious misrepresentations to the public - including the investing public - about numerous RMBS transactions. The resolution also requires JPMorgan to provide much needed relief to underwater homeowners and potential homebuyers, including those in distressed areas of the country. The settlement does not absolve JPMorgan or its employees from facing any possible criminal charges.
This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group.

“Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” said Attorney General Eric Holder. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior. The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over. No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability. I want to personally thank the RMBS Working Group for its tireless work not only in this case, but also in the investigations that remain ongoing.”

The settlement includes a statement of facts, in which JPMorgan acknowledges that it regularly represented to RMBS investors that the mortgage loans in various securities complied with underwriting guidelines. Contrary to those representations, as the statement of facts explains, on a number of different occasions, JPMorgan employees knew that the loans in question did not comply with those guidelines and were not otherwise appropriate for securitization, but they allowed the loans to be securitized – and those securities to be sold – without disclosing this information to investors. This conduct, along with similar conduct by other banks that bundled toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.

“Through this $13 billion resolution, we are demanding accountability and requiring remediation from those who helped create a financial storm that devastated millions of Americans,” said Associate Attorney General Tony West. “The conduct JPMorgan has acknowledged - packaging risky home loans into securities, then selling them without disclosing their low quality to investors - contributed to the wreckage of the financial crisis. By requiring JPMorgan both to pay the largest FIRREA penalty in history and provide needed consumer relief to areas hardest hit by the financial crisis, we rectify some of that harm today.”

Of the record-breaking $13 billion resolution, $9 billion will be paid to settle federal and state civil claims by various entities related to RMBS. Of that $9 billion, JPMorgan will pay $2 billion as a civil penalty to settle the Justice Department claims under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), $1.4 billion to settle federal and state securities claims by the National Credit Union Administration (NCUA), $515.4 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $4 billion to settle federal and state claims by the Federal Housing Finance Agency (FHFA), $298.9 million to settle claims by the State of California, $19.7 million to settle claims by the State of Delaware, $100 million to settle claims by the State of Illinois, $34.4 million to settle claims by the Commonwealth of Massachusetts, and $613.8 million to settle claims by the State of New York.

JPMorgan will pay out the remaining $4 billion in the form of relief to aid consumers harmed by the unlawful conduct of JPMorgan, Bear Stearns and Washington Mutual. That relief will take various forms, including principal forgiveness, loan modification, targeted originations and efforts to reduce blight. An independent monitor will be appointed to determine whether JPMorgan is satisfying its obligations. If JPMorgan fails to live up to its agreement by Dec. 31, 2017, it must pay liquidated damages in the amount of the shortfall to NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development.

The U.S. Attorney’s Offices for the Eastern District of California and Eastern District of Pennsylvania and the Justice Department’s Civil Division, along with the U.S. Attorney’s Office for the Northern District of Texas, conducted investigations into JPMorgan’s, Washington Mutual’s and Bear Stearns’ practices related to the sale and issuance of RMBS between 2005 and 2008.

“Today’s global settlement underscores the power of FIRREA and other civil enforcement tools for combatting financial fraud,” said Assistant Attorney General for the Civil Division Stuart F. Delery, co-chair of the RMBS Working Group. “The Civil Division, working with the U.S. Attorney’s Offices and our state and agency partners, will continue to use every available resource to aggressively pursue those responsible for the financial crisis.”

“Abuses in the mortgage-backed securities industry helped turn a crisis in the housing market into an international financial crisis,” said U.S. Attorney for the Eastern District of California Benjamin Wagner. “The impacts were staggering. JPMorgan sold securities knowing that many of the loans backing those certificates were toxic. Credit unions, banks and other investor victims across the country, including many in the Eastern District of California, continue to struggle with losses they suffered as a result. In the Eastern District of California, we have worked hard to prosecute fraud in the mortgage industry. We are equally committed to holding accountable those in the securities industry who profited through the sale of defective mortgages.”

“Today's settlement represents another significant step towards holding accountable those banks which exploited the residential mortgage-backed securities market and harmed numerous individuals and entities in the process,” said U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger. “These banks packaged and sold toxic mortgage-backed securities, which violated the law and contributed to the financial crisis. It is particularly important that JPMorgan, after assuming the significant assets of Washington Mutual Bank, is now also held responsible for the unscrupulous and deceptive conduct of Washington Mutual, one of the biggest players in the mortgage-backed securities market.”

This settlement resolves only civil claims arising out of the RMBS packaged, marketed, sold and issued by JPMorgan, Bear Stearns and Washington Mutual. The agreement does not release individuals from civil charges, nor does it release JPMorgan or any individuals from potential criminal prosecution. In addition, as part of the settlement, JPMorgan has pledged to fully cooperate in investigations related to the conduct covered by the agreement.

To keep JPMorgan from seeking reimbursement from the federal government for any money it pays pursuant to this resolution, the Justice Department required language in the settlement agreement which prohibits JPMorgan from demanding indemnification from the FDIC, both in its capacity as a corporate entity and as the receiver for Washington Mutual.

“The settlement announced today will provide a significant recovery for six FDIC receiverships. It also fully protects the FDIC from indemnification claims out of this settlement,” said FDIC Chairman Martin J. Gruenberg. “The FDIC will continue to pursue litigation where necessary in order to recover as much as possible for FDIC receiverships, money that is ultimately returned to the Deposit Insurance Fund, uninsured depositors and creditors of failed banks.”

“NCUA’s Board extends our thanks and appreciation to our attorneys and to the Department of Justice, who have worked closely together for more than three years to bring this matter to a successful resolution,” said NCUA Board Chairman Debbie Matz. “The faulty mortgage-backed securities created and packaged by JPMorgan and other institutions created a crisis in the credit union industry, and we’re pleased a measure of accountability has been reached.”

“JPMorgan and the banks it bought securitized billions of dollars of defective mortgages,” said Acting FHFA Inspector General Michael P. Stephens. “Investors, including Fannie Mae and Freddie Mac, suffered enormous losses by purchasing RMBS from JPMorgan, Washington Mutual and Bear Stearns not knowing about those defects. Today’s settlement is a significant, but by no means final step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit. We are proud to have worked with the Department of Justice, the U.S. attorneys in Sacramento and Philadelphia and the New York and California state attorneys general; they have been great partners and we look forward to our continued work together.”

The attorneys general of New York, California, Delaware, Illinois and Massachusetts also conducted related investigations that were critical to bringing about this settlement.

“Since my first day in office, I have insisted that there must be accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” said New York Attorney General Eric Schneiderman, Co-Chair of the RMBS Working Group. “This historic deal, which will bring long overdue relief to homeowners around the country and across New York, is exactly what our working group was created to do. We refused to allow systemic frauds that harmed so many New York homeowners and investors to simply be forgotten, and as a result we’ve won a major victory today in the fight to hold those who caused the financial crisis accountable.”

“JP Morgan Chase profited by giving California’s pension funds incomplete information about mortgage investments,” California Attorney General Kamala D. Harris said. “This settlement returns the money to California’s pension funds that JP Morgan wrongfully took from them.”
“Our financial system only works when everyone plays by the rules,” said Delaware Attorney General Beau Biden. “Today, as a result of our coordinated investigations, we are holding accountable one of the financial institutions that, by breaking those rules, helped cause the economic crisis that brought our nation to its knees. Even as the American people recover from this crisis, we will continue to seek accountability on their behalf.”

“We are still cleaning up the mess that Wall Street made with its reckless investment schemes and fraudulent conduct,” said Illinois Attorney General Lisa Madigan. “Today’s settlement with JPMorgan will assist Illinois in recovering its losses from the dangerous and deceptive securities that put our economy on the path to destruction.”

“This is a historic settlement that will help us to hold accountable those investment banks that played a role in creating and exacerbating the housing crisis,” said Massachusetts Attorney General Martha Coakley. “We appreciate the work of the Department of Justice and the other enforcement agencies in bringing about this resolution and look forward to continuing to work together in other securitization cases.”

The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. attorney’s offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state attorneys general offices around the country.

The RMBS Working Group is led by five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Acting Assistant Attorney General for the Criminal Division Mythili Raman, Co-Director of the SEC’s Division of Enforcement George Canellos, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.

Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov.

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

Gene Cornell Smith, 46, of Lumberton, New Jersey, was sentenced today to 42 months in prison for violating the Clean Air Act. Smith bought a warehouse, in the Logan section of Philadelphia, and got a quote for the cost of removing asbestos from the site. Instead of paying to remove or stabilize the asbestos-containing material, Smith enlisted his co-conspirator, Clarence Cole, to hire unqualified day laborers, who ripped out the asbestos illegally, without taking the precautions, required by federal regulations, to keep asbestos out of the air. Smith and Cole did not provide any safety equipment to the workers. When a conscientious citizen tipped off the Asbestos Control Unit of the City Public Health Department's Air Management Services, city inspectors ordered all work to stop. Instead of closing up the site, however, and hiring a qualified contractor to remediate the building as he was ordered to do, Smith continued to dispose of asbestos-containing material illegally, and to allow emission of asbestos to the outside air. Eventually, Superfund money had to be used to clean the contamination caused by the illegal work Smith and Cole had ordered.

"These defendants knowingly removed asbestos-containing materials illegally, putting workers and the general public at great risk," said David G. McLeod, Jr., Special Agent in Charge of EPA's criminal enforcement program for the Middle Atlantic States. "The real victims in this case are neighboring residents who have no way to protect themselves against this type of environmental crime. EPA continues to work with our local, state and federal partners to vigorously prosecute those who place personal gain ahead of public health."

A representative from Philadelphia Air Management Services stated, "The convictions of Gene Cornell Smith and Clarence Cole arose from their decision, made knowingly, to abate and remove dangerous asbestos material in clear violation of the law. This matter was first investigated and reported to the EPA by the City of Philadelphia Air Management Services. We are grateful that with the assistance of the Philadelphia U.S. Attorney's Office and EPA Region 3, this matter has been brought to a satisfactory conclusion."

Smith was convicted of conspiracy, and five counts of violating the Clean Air Act after a jury trial, in January 2013. Cole pled guilty in January 2013, and was sentenced to 24 months in prison in June.
In addition to the prison term, Judge Cynthia M. Rufe also ordered the defendants to serve three years of supervised release, and to pay restitution of $451,936.80

The case was investigated by the Criminal Investigation Division of the Environmental Protection Agency, and was prosecuted by Assistant United States Attorney Elizabeth Abrams and Special Assistant United States Attorney Thomas Moshang III.

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 - Robert Mattei, (75), of Del Ray Beach, Florida, a co-owner of the ANifty Fifty=s@ restaurant chain, was sentenced today to 15 months in prison for his role in a tax evasion conspiracy that cheated the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts. Mattei pleaded guilty in May of 2012 to conspiracy, tax evasion, and bank fraud. Mattei, along with co-defendants Leo McGlynn, Brian Welsh, Joseph Donnelly, and Elena Ruiz, all of whom also pleaded guilty, constructed a long-running scheme to avoid paying millions of dollars in personal and employment taxes as related to their restaurant chain. The defendants not only evaded paying the taxes they owed, they filed income tax returns claiming they were due refunds based on the erroneous reporting of their incomes.
The restaurant owners evaded paying taxes since the restaurant was established in 1986 by, among other things, paying employees a portion of their wages with unreported cash in order to evade payroll taxes; paying suppliers with unreported cash; and having false tax returns prepared that under-reported income and falsely inflated expenses and deductions. Just between the years 2006 and 2010, the defendants deliberately failed to properly account for $15.6 million in gross receipts, thereby evading $2.2 million in federal employment and personal taxes. In the course of their conspiracy, Mattei, McGlynn, Donnelly, and Welsh committed bank fraud by submitting to the bank bogus income tax returns in order to secure several business loans.
In addition to the prison term, U.S. District Court Judge Mary McLaughlin ordered restitution. To date, the IRS has received $4,336,871 in tax payments and an additional $205,300 in forfeiture payments.
Co-defendant Leo McGlynn will be sentenced on November 19, 2013; co-defendant Joseph Donnelly will be sentenced November 20, 2013; co-defendants Elena Ruiz and Brian Welsh will be sentenced November 21, 2013.
This case was investigated by the Internal Revenue Service Criminal Investigation Division and the FBI. It is being prosecuted by Assistant United States Attorneys Nancy E. Potts and Paul G. Shapiro.

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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Jerel Jackson, 28, of Philadelphia, PA was charged today by Indictment with three counts of sex trafficking of a minor or of adults by force, announced United States Attorney Zane David Memeger.

If convicted, the defendant faces a mandatory minimum sentence of fifteen years in prison with a maximum sentence of life on each count, a $750,000 fine, a minimum of five years up to a lifetime period of supervised release, and a $300 special assessment.

The case was investigated by the Federal Bureau of Investigation, with assistance from the Philadelphia Police Department Special Victims Unit, the Tinicum Township Police Department, and the Dover (Delaware) Police Department, and is being prosecuted by Assistant United States Attorney Michelle L. Morgan.

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
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PHILADELPHIA - David Rothman, 50, of Richboro, Pennsylvania, was sentenced yesterday to 48 months in prison for wire fraud and money laundering.  Rothman was the Vice-President of Rothman Securities, Inc. (“RSI”), an investment brokerage firm in Southampton, Pennsylvania. Between January 2007 and February 2012, Rothman embezzled from a 92 year-old RSI client and several beneficial trusts for which he was a named trustee. He used the money for personal expenses and to pay his family, his friends, and other clients to whom he provided falsely inflated investment statements.  Rothman created bogus documents and cover stories to mask his fraud and lull victims and clients into a false sense of security.  Rothman, a graduate of Penn State University whose annual salary was $600,000 in 2011, pleaded guilty to the two counts on March 26, 2013.

In addition to the prison term, U.S. District Court Judge Berle M. Schiller ordered three years of supervised release and restitution of $505,831.09.

The case was investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission.  It was prosecuted by Assistant United States Attorney Vineet Gauri.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Charles Zeiser, 68, of North Carolina, was charged today by Information with five counts of wire fraud, announced United States Attorney Zane David Memeger.  Zeiser was the controller for Land Tech, Enterprises, a landscaping company in Bucks County.  He aided and abetted a fraud scheme in which company employees applied for and fraudulently collected Pennsylvania unemployment compensation while continuing to work full-time for the company.  The Commonwealth of Pennsylvania was defrauded of at least $43,589 from late 2010 to the spring of 2011. 

If convicted, the defendant faces a maximum possible sentence of 100 years of imprisonment, three years of supervised release, a $1,250,000 fine, and a $500 special assessment.

The case was investigated by United States Department of Labor – Office of Inspector General, the Department of State, and U.S. Immigration and Customs Enforcement Homeland Security Investigations.  It is being prosecuted by Assistant United States Attorney Laurie Magid.

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 - Brandon James, 23, and Lenardo Nicolas, 25, both of Florida, were charged today by Indictment with participating in an illegal check cashing scheme that involved cashing fraudulent checks using the drive-through teller lane at victim banks.  It is alleged that the defendants and other co-conspirators from Florida, known and unknown to the grand jury (“crew members”), stole identifications, checks, bank cards, and credit cards from women’s wallets and purses usually left inside the victims’ cars in unattended parking lots.  In order to carry out the scheme, the defendants and other crew members recruited female co-conspirators (“workers”) who could impersonate the victims’ identifications.  The defendants and other crew members specifically instructed the workers to use the drive-through teller lane, known to law enforcement as the “felony lane”, to cash the fraudulent checks.  The defendants carried out the alleged scheme between December 2012 and September 2013.  The indictment charges each defendant with one count of conspiracy, two counts of bank fraud and one count of aggravated identity theft, announced United States Attorney Zane David Memeger.

According to the indictment, James, Nicolas and other crew members rented cars for the female workers to use during the course of the scheme.  It is alleged that the defendants and other crew members covered the rental car’s license plate usually with a stolen license plate to conceal the identity of the car as it was in the bank drive-through lane.  After a fraudulent check was successfully cashed, the workers would meet the defendants and other crew members, who waited close by to the bank in another rental vehicle, and then give them the money from the illegally cashed check.  The workers would then receive another fraudulent, stolen check or checks and stolen identification to use at the next victim bank.  The indictment alleges that the defendants and other crew members perpetrated this scheme in different states around the country.  The victim bank locations in Pennsylvania included Montgomery and Chester Counties.

If convicted, James and Nicolas each face a maximum possible sentence of 67 years in prison, a $2.5 million fine, a five year period of supervised release and a $400 special assessment. 

The case was investigated by the Federal Bureau of Investigation, the Hatfield Township Police Department, the Willistown Township Police Department, and the Upper Uwchlan Township Police Department and is being prosecuted by Assistant United States Attorney Jennifer Chun Barry and Special Assistant United States Attorney Peter Hobart.

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
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PHILADELPHIA - Craig Johnson, 42, a/k/a AGeez,@ of Philadelphia, PA, was sentenced today to 288 months (24 years) in prison for two counts of sex trafficking of minors. Johnson operated a prostitution venture in Philadelphia, Pennsylvania.  As part of that venture, in June 2012, Johnson recruited young females, ages 15 and 16, respectively, to work as prostitutes.  He also created Internet advertisements in which he advertised various females as available for purchase for purposes of prostitution. These advertisements featured pictures of the prostitutes, either scantily clad or partially nude, the price for an encounter, and a phone number to call to arrange a meeting with a prostitute.  Johnson pleaded guilty to the charges on June 13, 2013.

In addition to the prison term, U.S. District Court Judge C. Darnell Jones, II, ordered 10 years of supervised release and ordered Johnson to pay $10,400, per victim, in restitution. 

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department Special Victims Unit, with assistance from the Philadelphia District Attorney=s Office and the Bucks County District Attorney=s Office.  It was prosecuted by Assistant United States Attorney Michelle L. Morgan.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Istvan Zoltan Foris, 44, of Szarvas, Hungary, was charged on November 8, 2013, by Information, with conspiracy to commit wire fraud and possession of a fraudulent passport, announced United States Attorney Zane David Memeger.  Foris conspired with others to defraud persons who sought to purchase used vehicles on the internet.  Foris used false passports supplied by other conspirators to open bank accounts in the United States for the purpose of receiving funds obtained by fraud from the prospective buyers.  These buyers would wire money to the bank accounts opened by Foris and Foris would immediately withdraw the funds and then wire most of the money to conspirators outside the United States.  The buyers were not able to recover the funds they sent after they discovered that the offers to sell the vehicles were fraudulent.

If convicted the defendant faces a maximum possible sentence of 30 years in prison, three years of supervised release, possible fines, restitution, and forfeiture, and a $200 special assessment.

The case was investigated by Federal Bureau of Investigation and U.S. Immigration and Customs Enforcement Homeland Security Investigations.  It is being prosecuted by Assistant United States Attorney Albert S. Glenn.

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
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Steven A. Cohen, 53, of Virginia, was charged today by Information with one count of visa fraud, announced United States Attorney Zane David Memeger.  Cohen had been the Vice-President of Operations at Land Tech, Enterprises, a landscaping company in Bucks County.  He made a material misstatement on immigration documents so that the company could improperly obtain visas for workers from Mexico to do landscaping work for the company. 

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

The case was investigated by United States Department of Labor Office of Inspector General, the Department of State, and Homeland Security Investigations.  It is being prosecuted by Assistant United States Attorney Laurie Magid.

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
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Daniel Mumbower, 35, a former banker, of Glassboro, NJ, pleaded guilty today to 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. A sentencing hearing is scheduled for February 11, 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
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PATTY HARTMAN, Media Contact, 215-861-8525

Randall Stein, 55, of Bryn Mawr, PA pleaded guilty today to three counts of filing a false tax return for the years 2006, 2007, and 2008.  Stein is the co-founder and former President of WP Realty, Inc.  Stein founded WP Realty (formerly known as Weingarten Properties) with Bryan Weingarten in 1995.  WP Realty is a Bryn Mawr, PA based commercial real estate company that specializes in the acquisition, development, leasing and management of grocery store-anchored shopping centers.  Weingarten, 53, of Ardmore, PA, is the co-founder and CEO of WP Realty.

According to the informations filed separately against Stein and Weingarten, the defendants established the partnership entities of Stein Realty Capital, LP and Weingarten Capital, LP, as repositories for fee income earned through their employment with WP Realty.  These partnerships had no business relationship to the fees earned, no operating expenses, and no employees.  Both men used these partnerships as a means to deduct personal expenses, thereby reducing their taxable income on their personal income tax returns.  

For the years 2006 through 2008, Weingarten filed tax returns with the Internal Revenue Service claiming approximately $5.5 million in false business expenses for his company, Weingarten Captial, LP, in an attempt to reduce his federal income tax liability.  Weingarten knew that these were in fact personal expenditures. Weingarten pleaded guilty on April 10, 2013 to three counts of filing false tax returns for the tax years 2006, 2007, and 2008.

For the years 2006 through 2008, Stein filed tax returns with the Internal Revenue Service claiming approximately $334,499 in false business expenses for his company, Stein Realty Capital, LP, in an attempt to reduce his federal income tax liability.  Stein knew that these expenses were personal in nature.

Stein will be sentenced on February 18, 2014, before the Honorable Legrome D. Davis, Jr., United States District Court for the Eastern District of Pennsylvania.  He faces a maximum sentence of nine years imprisonment.  A sentencing date has not yet been set for Weingarten.  He also faces a maximum sentence of nine years imprisonment.

This case was investigated by IRS Criminal Investigations.  It is being prosecuted by Assistant United States Attorney A. Nicole Phillips and Special Assistant United States Attorney Tiwana Fleming of United States Department of Justice, Tax Division. 

Click here to view the indictment

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA - Curtis Crawford, 40, of Philadelphia, was sentenced today to 15 years in prison for illegally possessing a firearm.  Due to his extensive criminal record of drug trafficking, Crawford qualified under the law as an Armed Career Criminal at sentencing which requires a mandatory minimum 15 years in prison.  Crawford was convicted at trial on July 11, 2013.  In addition to the prison term, U.S. District Court Judge Timothy J. Savage ordered a $1,000 fine, a $100 special assessment, and five years of supervised release. 

On August 22, 2012, shortly after midnight, Philadelphia police officers approached Crawford near the intersection of 9th and Butler Streets to ask him some questions about criminal activity which had occurred in that neighborhood.  When the officers approached, Crawford ran and discarded a loaded Walther P22 firearm with a laser sight into a nearby sewer inlet.  The police officers apprehended Crawford after a short chase and, with the assistance of the Philadelphia Streets Department, fished the firearm out of the sewer inlet.

The case was investigated by the FBI and Philadelphia Police and was prosecuted by Assistant United States Attorney Robert J. Livermore.

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

PHILADELPHIA – Paul Rawls, 55 of Philadelphia, was sentenced today to 51 months in prison for his role in a tax fraud scheme that sought to bilk the government of over $600,000. 
Rawls conspired with three others – including Jonathan Brownlee 29, a Philadelphia tax preparer.  Rawls pleaded guilty to conspiracy and one count of filing a false claim on June 25, 2013.  Brownlee, who also pleaded guilty, was sentenced on October 9th to 24 months in prison.

Christopher Brownlee, 38, and Anthony Foster, 44, also of Philadelphia are the remaining conspirators.  Both are awaiting sentencing. The scheme involved filing false tax claims by obtaining and using the personal identifying information of several individuals, including their Social Security numbers, sometimes under false pretenses.  The defendants used the information to prepare and file bogus tax returns claiming fraudulent refunds and directed the refunds to be deposited into bank accounts that the conspirators controlled.  The tax returns fraudulently reported that the individuals for whom the defendants had prepared the returns, were entitled to receive a $7,500 refundable tax credit under the Housing and Economic Recovery Act of 2008.  The returns were false because those individuals had not purchased new homes and thus were not eligible to apply for the refundable tax credit.  Some of the individuals---in whose name the returns had been prepared and filed---were not aware that the defendants had used their Social Security numbers for the purpose of filing the false returns.  The indictment was the first in the Eastern District of Pennsylvania involving fraud effecting the Housing and Economic Recovery Act of 2008.   

In addition to the prison terms, U.S. District Court Judge Berle M. Schiller ordered Rawls and Brownlee to pay restitution in the amount of $197,385. 

The case was investigated by the Internal Revenue Service Criminal Investigations and the Office of Inspector General for the United States Social Security Administration.  It is being prosecuted by Assistant United States Attorneys Floyd J. Miller and Patrick J. Murray.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Theodore Harris, 51, of Holland, PA, was charged today by information with willful failure to pay over employment taxes, announced United States Attorney Zane David Memeger. Harris owned and operated Clean Tech USA (“Clean Tech”), a janitorial business located in Huntingdon Valley, PA.

According to the information, between January 1, 2007 and January 31, 2008, willfully failed to collect and pay to the IRS approximately $93,000 in employment taxes owed for his employees.

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

The case was investigated by the Internal Revenue Service Criminal Investigation and is being prosecuted by Assistant United States Attorney David 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
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Enrique Torres, 43, of Philadelphia, Pennsylvania was charged today by Indictment with two counts of knowingly transferring identification documents of the United States, two counts of knowingly selling Social Security cards, and one count of unlawful reentry after deportation, announced United States Attorney Zane David Memeger. 

The indictment alleges that the defendant, a Mexican national who previously was deported from the United States, sold identification documents, including two Social Security cards and one Legal Permanent Resident card.

If convicted the defendant faces a maximum possible sentence of 60 years in prison and a $1.25 million fine.

The case was investigated by Immigration and Customs Enforcement Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Karen M. Klotz.

Click here to view the indictment

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
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PHILADELPHIA - Troy Czukoski, 43, of Exton, PA, was sentenced today to 24 months in prison for possessing more than 150, but less than 300, images of children engaging in sexually explicit conduct.  At the time of the investigation, Czukoski was serving as Principal of the Springton Lake Middle School in the Rose Tree Media School District in Delaware County.  In addition to the prison term, U.S. District Court Judge Legrome D. Davis ordered 10 years of supervised release, a $10,000 fine and a $100 special assessment.  Czukoski must report to prison on December 30, 2013.

Czukoski was identified through a website that sells child porn.  Records from that website showed the Czukoski had made purchases from 2008 through 2011.  A warrant was then executed on the defendant=s home, during which the defendant confessed that he had purchased the pornographic content over the internet.  Agents with the U.S. Postal Inspection Service found numerous CDs and DVDs, as well as two flash drives that contained images and video of child porn. Czukoski pleaded guilty on May 10, 2013.

The case was investigated by the United States Postal Inspection Service and was prosecuted by Assistant United States Attorney Michelle Rotella.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Settlement is largest amount paid over misbranding and unapproved use of single drug

PHILADELPHIA – Health care giant Johnson & Johnson (J&J) will pay over $2.2 billion to resolve criminal and civil liability that included the promotion of the atypical anti-psychotic drugs Risperdal and Invega for uses not approved as safe and effective by the Food and Drug Administration (FDA). Of the $2.2 billion, J&J is paying $1.673 billion to resolve allegations of off-label marketing for Risperdal and Invega, as well as the alleged payment of kickbacks to physicians involving Risperdal. The resolution – the largest in U.S. history involving a single drug (Risperdal) and the third-largest health care fraud settlement involving one company – is the result of whistleblower lawsuits filed in the Eastern District of Pennsylvania. It was announced today by the Department of Justice and United States Attorney Zane David Memeger.

Criminal Information: Risperdal was originally approved only to treat the management of the manifestations of psychotic disorders.  On March 3, 2002, the approved use was narrowed to treatment of schizophrenia only. According to a criminal information filed today, Janssen Pharmaceuticals, Inc., a J&J subsidiary, introduced Risperdal for a new, unapproved use, rendering the product misbranded. In a plea agreement resolving these charges, Janssen admits that between March 3, 2002, and December 31, 2003, it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated disturbances exhibited by elderly, non-schizophrenic dementia patients. Under the terms of the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million. Janssen has agreed to plead guilty to introducing a misbranded drug into interstate commerce.

Civil Complaint: In its Complaint, the United States alleges that between January 1999 and December 2005, Janssen marketed Risperdal for unapproved uses to control and treat behavioral disturbances and conduct disorders in the nation’s most vulnerable patients: elderly nursing home residents, children, and individuals with mental disabilities. Between 2006 and 2009, the government alleges that Janssen marketed the sale and use of Invega – which was approved to treat schizophrenia – for conditions for which it was not approved. J&J and Janssen caused false claims to be submitted to federal healthcare programs by promoting these drugs for off-label uses that federal healthcare programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal, and paying kickbacks to physicians to prescribe Risperdal. The government’s complaint also contains allegations that Janssen paid speaker fees to doctors to influence them to write more prescriptions for Risperdal. Sales representatives allegedly told the doctors that if they wanted to receive payments for speaking, they needed to increase their Risperdal prescriptions. For this conduct, J&J is paying $1.273 billion in civil penalties.  J&J paid $118 million to the State of Texas in March 2012 to resolve similar allegations involving both state and federal dollars, bringing the total civil settlement to $1.391 billion.

The Federal Food, Drug and Cosmetic Act (FDCA) requires a pharmaceutical company to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses. A manufacturer’s promotional activities of a drug for a use not approved by the FDA are evidence of its intent to distribute the drug for a new, unapproved use, also known as “misbranding.” In its complaint, the government alleges that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be “misleading.”

“The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” said Attorney General Eric Holder. “This multibillion-dollar resolution demonstrates the Justice Department’s firm commitment to preventing and combating all forms of health care fraud.  And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people.”

“J&J’s promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society – children, the elderly, and those with developmental disabilities,” said Memeger. “This historic settlement sends the message that drug manufacturers who place profits over patient care will face severe criminal and civil penalties.”

Off-Label Promotion to the Elderly
The civil complaint further alleges that from 1999 through 2005, despite the FDA warnings, Janssen aggressively marketed Risperdal to control behavioral disturbances in dementia patients through an “ElderCare sales force” designed to target nursing homes and doctors who treated the elderly. In business plans, Janssen’s goal was to “[m]aximize and grow RISPERDAL’s market leadership in geriatrics and long term care.” The company touted Risperdal as having “proven efficacy” and “an excellent safety and tolerability profile” in geriatric patients. The complaint further alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the company downplayed these risks. For example, a J&J study showed a significant risk of strokes and other adverse events in elderly dementia patients taking Risperdal. Janssen pooled the study data with other studies resulting in a lower overall risk of adverse events.

Off-Label Promotion to Children
In addition to promoting Risperdal for elderly dementia patients, Janssen allegedly promoted the antipsychotic drug for use in children and individuals with mental disabilities from 1999 through 2005.  J&J and Janssen knew that Risperdal posed certain health risks to children, including the risk of elevated levels of prolactin, a hormone that can stimulate breast development and milk production. Nonetheless, one of Janssen’s Key Base Business Goals was to grow and protect share in the child/adolescent market.  Janssen instructed its sales representatives to call on child psychiatrists as well as mental health facilities that primarily treated children and to market Risperdal as safe and effective for symptoms of various childhood disorders, such as attention deficit hyperactivity disorder, obsessive-compulsive disorder, oppositional defiant disorder and autism. Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children.
The complaint also alleges that Janssen knew patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as “uncompromised by safety concerns (does not cause diabetes).” When Janssen received the initial results of studies indicating that Risperdal posed the same diabetes risk as other antipsychotics, the company retained outside consultants to re-analyze the study results and ultimately published articles stating that Risperdal was actually associated with a lower risk of developing diabetes.

Non-monetary Provisions and Corporate Integrity Agreement
In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS‑OIG). The agreement is designed to increase accountability and transparency and prevent future fraud and abuse.

The CIA includes provisions requiring J&J to implement major changes to the way its pharmaceutical affiliates do business. Among other things, the CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct. J&J may recoup monies from executives who are current employees and those who have left the company. The CIA also requires J&J’s pharmaceutical businesses to implement and maintain transparency regarding its research practices, publication policies, and payments to physicians. On an annual basis, management employees, including senior executives and certain members of J&J’s independent Board of Directors, must certify compliance with provisions of the CIA. J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.

“OIG will work aggressively with our law enforcement partners to hold companies accountable for marketing and promotion activities that violate laws intended to protect the public,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “Our compliance agreement with Johnson & Johnson increases individual accountability for board members, sales representatives, company executives and management. The agreement also contains strong monitoring and reporting provisions to help ensure that the public is protected from future unlawful and potentially harmful off-label marketing.”

“When pharmaceutical companies interfere with the FDA’s mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk. Today’s settlement demonstrates the government’s continued focus on pharmaceutical companies that put profits ahead of the public’s health,” said John Roth, director of the Food and Drug Administration’s Office of Criminal Investigations. “The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the drug approval process and recklessly promote drugs for uses that have not been proven to be safe and effective.”

“Any illegal healthcare scheme to increase profit over the protection of unsuspecting patients is shameful,” said Special Agent-in-Charge Craig W. Rupert, Defense Criminal Investigative Service. “This illegal activity harms patients and negatively affects the delivery of healthcare to more than nine million Department of Defense military members, retirees, and their families.  This settlement demonstrates DCIS’s continuing commitment to investigate those who abuse government healthcare programs and who disregard appropriate corporate governance at the expense of patients.”

“Unfortunately, there are those who take advantage of the healthcare system by seeking reimbursement for services and products that they are not entitled to,” said Monica Weyler, Special Agent-in-Charge of the Eastern Area Field Office for U.S. Postal Service Office of Inspector General. “We want to thank our law enforcement partners for their efforts in preventing fraud, waste, and abuse within the Postal Service.”

This civil settlement described above resolves four lawsuits pending in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblowers in those cases will share $112 million from the federal share of the settlement amount.

This matter was investigated by the Health and Human Services-Office of Inspector General, the Food and Drug Administration’s Office of Criminal Investigations, the Defense Criminal Investigative Service of the Department of Defense, the Office of the Inspector General for the U.S. Postal Service. Assistance was provided by the National Association of Medicaid Fraud Control Units.

The criminal case is being prosecuted by Assistant U.S. Attorneys Albert Glenn and Scott Cullen; the civil case is being prosecuted by Assistant U.S. Attorneys Charlene Keller Fullmer and Mary Catherine Frye.
Court documents related to the entire global settlement can be viewed online at http://www.justice.gov/opa/jj-pc-docs.html.

View the: Civil Complaint | Exhibits | Information

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

Elijah Fogle, 22, of Charlotte, North Carolina, was sentenced today to 60 months in prison for distribution of child pornography, receipt of child pornography, and possession of child pornography.  U.S. District Court Judge Petrese Tucker also ordered 10 years of supervised release and a $300 special assessment. 

Fogle pleaded guilty on July 30, 2013 and admitted that he had amassed a collection of child pornography on his computer and a thumb-drive that included hundreds of images and videos of children being sexually abused.  He also admitted that he had distributed and received child pornography images over the Internet by uploading them to a file sharing website.

A special agent with Homeland Security Investigations, acting in an undercover capacity, signed into a “covert” account on a private peer to peer network in February 2012 and engaged in an online chat with a user later identified as the defendant. During the chat, Fogle advised he had folders to share that were on a flash drive and needed to be online for viewing. That same day, the agent selected 19 video files and discovered child exploitation activity. The downloaded files depicted children engaged in sexually explicit conduct. A full forensic examination of the defendant’s laptop computer and thumb-drive was conducted during which 835 images and 362 videos of child pornography were recovered.  The images and videos on the thumb drive were contained in a hidden folder, which was consistent with being created to avoid discovery.  The majority of the collection depicts prepubescent and pubescent males, many of which are clearly under the age of 12 years. During an interrogation the defendant admitted that he had sexually abused a 12 year old boy from his neighborhood in North Carolina.

The case was investigated by the Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Tomika N. Stevens.

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

PHILADELPHIA - Debra Lightfoot, a/k/a "A.T.B.," 57, of Lititz, PA, was charged today by superseding indictment with transmitting a threat by interstate communications, and threat of assaulting, resisting, opposing, impeding, intimidating, or interfering with a Government Employee in the course of official duties, announced United States Attorney Zane David Memeger.  According to the Superseding Indictment, the defendant threatened an employee of the Social Security Administration while speaking to that employee by telephone. The superseding indictment adds the two new counts to 11 counts of wire fraud, one count of theft of government funds, two counts of Social Security Fraud, and one count of aggravated identity theft.  Lightfoot allegedly used a stolen Social Security number to work while collecting disability payments from the Social Security Administration under her true identity.  She was arrested on October 7, 2013 on a criminal complaint and is detained pending trial.

If convicted, Lightfoot faces a maximum possible sentence of 248 years imprisonment, a three‑year period of supervised release, restitution to the government of $137,665 and a $1,625 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.

Click here to view the indictment

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 - Michael Wilkerson, 47, of Pottstown, PA, was sentenced yesterday to 170 months in prison and ordered to pay $1,353,111.93 in restitution for a mortgage fraud scheme.  Wilkerson and his co-defendants defrauded JPMorgan Chase Bank, N.A. by fraudulently obtaining home loans valued at more than $6 million for properties located in Schwenksville and Glenmoore, Montgomery County, PA.  Wilkerson was convicted at trial in February.

Wilkerson, a pastor at New Millennium Life Restoration Fellowship with locations in Phoenixville and Spring City, recruited one of his congregants and the congregant’s family and friends, to participate in a number of real estate transactions.  If they had good credit and acted as “straw purchasers” - meaning they would sign loan documents as the purchaser of a house and attend the property settlement - Michael Wilkerson would pay them $15,000.  Wilkerson paid another $5,000 if they referred other straw purchasers to him. Wilkerson recruited at least six individuals who agreed to be straw purchasers of homes.  Wilkerson’s wife, Joyce, participated in the fraud scheme by explaining the transactions to the “straws,” paying the “straws,” and also pretending to be a co-purchaser of each of the homes at the time of settlement.  Co-defendant Lee Garell, a real estate broker with Long & Foster Companies, prepared the sales paperwork for each of the homes that was sold to the “straws” and, along with Michael Wilkerson, dictated the fraudulent terms set out in the settlement sheets. Denise Haines, a mortgage broker with American Group Mortgage Corporation, submitted fraudulent loan applications in the transactions to Chase.  The applications falsely represented the appraised value of the homes, the identification of the “straws,” the source of funds, the borrower’s income and assets, and their intent to take possession of the homes as their primary residence. Based on the representations made in the loan documents, Haines knew she could get Chase to approve the loans without verification of the information on the loan applications.  Haines and Garrell are awaiting sentencing.

When the loans were funded at the time of settlement, Michael Wilkerson, Joyce Wilkerson, Lee Garell, and Denise Haines manipulated the documents prepared at settlement and, later, forwarded the settlement documents to Chase to make it appear to the bank that the “straws” brought considerable cash to the closings, when, in fact, all of the money involved at the settlement actually came from Chase.  Michael and Joyce Wilkerson profited approximately $400,000 from each of the fraudulent sales.  Lee Garell obtained commissions on the sales of the real estate and Denise Haines obtained commissions based on the amount of the million dollar loans obtained from Chase.  After settlement on the homes, Michael Wilkerson took possession of all of the homes, rented two of them and lived in another.  He paid the mortgages with the monies that he obtained at the settlements and rental income for approximately six months then told the “straw” purchasers that they had to pay the mortgages. This last act led to the loans falling into default and then foreclosure, resulting in a loss of approximately $3 million. 

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

President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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

PHILADELPHIA –Aarti Gupte, 31, of Houston, TX, was sentenced today to 36 months for her involvement in a scheme to defraud the Philadelphia Sheriff’s Office (“PSO”). Gupte was found guilty in June of conspiracy to commit wire fraud and wire fraud.  The scheme stole funds from the PSO’s bank accounts. In addition to the prison term, U.S. District Court Judge Legrome D. Davis ordered $242,186.73 in restitution and three years of supervised release. Davis set a date of December 16, 2013 for Gupte to report to prison. 

Sheriff’s Sales of real estate generate millions of dollars annually. The sales require the PSO to write checks to different entities with regard to the properties sold.  Co-conspirator Richard Bell, who was charged separately and pleaded guilty, was a PSO employee in the Accounting Department who took advantage of loose controls and wrote checks drawn on the PSO’s bank accounts made payable to individuals and companies. Bell gave some of the checks to Robert Rogers, who has also pleaded guilty.  Rogers recruited Aarti Gupte, who had two companies, to participate in the scheme.  Bell wrote four checks, totaling $242,186.73, to The Processing Link and Yellow Rose Enterprises, LLC during the period from 2009 to 2010.  Gupte deposited the checks into her company bank accounts, withdrew the proceeds and shared them with Rogers who shared with Bell.  When approached by Federal Bureau of Investigation agents, the defendant admitted that she had participated in this scheme to defraud the PSO.

The case was investigated by the FBI, IRS-Criminal Investigation and the Office of Inspector General for the City of Philadelphia.  It was prosecuted by Assistant U.S. Attorney Sarah Grieb.

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

Doctor’s Receptionist Is Alleged Key Player in Pill Scheme

The Eastern District of Pennsylvania, like the rest of the nation, has been greatly impacted by the prescription drug abuse epidemic. Local clinics have stated that drug addiction in both Philadelphia and New Jersey is extremely severe. Heroin and opiate-based prescription medication – such as oxycodone – are two of the most abused drugs in this area. And just like street drugs, prescription drug abuse produces the same problems: addiction, crime, and broken families.

Today, federal agents arrested 27 people involved in a prescription drug conspiracy that illegally distributed more than 380,000 Oxycodone pills into communities in the Eastern District of Pennsylvania. Two indictments, charging four key players, and multiple other charging documents were unsealed today. Charged in one indictment are Leon Little, 33, of Cherry Hill, NJ, the leader of the “Little Drug Operation” (LDO), Heather Herzstein, 28, of Folcroft, PA, who worked in a doctor’s office, and Colise Harmon, 34, of Philadelphia. They are charged with conspiracy to distribute controlled substances. A separate but related indictment charges
Aminah Shabazz, 36, of Cherry Hill, NJ, with money laundering. Based on the average retail sale price of the oxycodone tablets on the street, the LDO allegedly took in more than 3 million dollars.

The charges were announced by First Assistant United States Attorney Louis Lappen, Drug Enforcement Administration Special Agent-in-Charge David G. Dongilli, and IRS
Criminal Investigation Special Agent-in-Charge Akeia Conner. The announcement was made at a press conference that also included the FBI and Health and Human Services Office of Inspector
General and discussed the larger issue of drug diversion.

According to the indictment, between August 2010 and August 2012, the LDO recruited and paid individuals to pose as patients in order to acquire prescription drugs, such as oxycodone and alprazolam (otherwise known as Xanax), from L.B., a licensed physician in Philadelphia.
Many of these “pseudo-patients” were recruited from the Raymond Rosen Projects, a government-assisted housing development located in north Philadelphia. Little orchestrated the entire scheme by allegedly paying Herzstein and Harmon to facilitate the coordination of pseudo-patients. He also allegedly collected and stored the filled prescriptions, packaged the drugs for re-distribution, and distributed to them to his customers in Philadelphia.
Hertzstein, as the receptionist and sole employee for L.B., allegedly scheduled the pseudo-patients’ appointments, wrote prescriptions for oxycodone using the doctor’s prescription pad and without the doctor’s consent, and distributed the forged prescriptions to the LDO. She also allegedly falsely verified with pharmacies that the forged prescriptions received from LDO pseudo-patients were legitimate. The pseudo-patients primarily received prescriptions for 10 milligram and 30 milligram tablets of oxycodone in exchange for money. The LDO also paid for the doctor’s visit and the costs for filling the prescriptions.

Harmon allegedly drove pseudo patients to the doctor and to specific pharmacies in
Philadelphia, PA to have the prescriptions filled. The prescriptions were filled primarily at: Northeast Pharmacy, 6730 Bustleton Avenue; Pharmacy of America, 1500 E. Erie Avenue; and
Philly Pharmacy, 210 Market Street.

In addition to the conspiracy, Little, Herzstein and Harmon are charged with distribution of oxycodone, acquiring a controlled substance by fraud, and aiding and abetting.
According to the separate indictment, Aminah Shabazz took LDO drug proceeds and provided $26,970 in cash to a third party who deposited the cash into the third party’s bank account in Ridley, PA. The third party then received a certified check made out to Lemin
Consulting, LLC, a business operated by Shabazz and Little, for $27,000. Shabazz then allegedly deposited the certified check into the bank account for Lemin Consulting, LLC in
Philadelphia, PA in an attempt to conceal the proceeds of unlawful activity.
If convicted of all charges, the defendants face the following possible prison terms under advisory sentencing guideline ranges: Little, life; Harmon, life; Herzstein, life; Shabazz, 33 months to 41 months. The defendants also face possible fines and terms of supervised release.
The indictment is also seeking forfeiture.

The case was investigated by the Drug Enforcement Administration, Internal
Revenue Service Criminal Investigation Division, Federal Bureau of Investigation Health
Care Fraud Task Force, Philadelphia Police Department, and North Coventry Police
Department, and is being prosecuted by Assistant United States Attorney Tomika N.
Stevens.

“Prescription drug abuse has become an epidemic in our society, and with the increased demand for these drugs has come the criminal activity that naturally follows – including illegal drug distribution and violence,” said First Assistant United States
Attorney Louis Lappen. “The individuals charged today with drug trafficking face lengthy prison terms like those imposed on distributors of street level drugs such as heroin and cocaine. We will continue to work with our law enforcement partners to bring illegal drug traffickers to justice and stem the tide of prescription drug abuse in our communities.”

“The defendants charged today are drug dealers just like street dealers pushing heroin and cocaine,” said DEA Special Agent-in-Charge Dongilli. “Each is driven by greed and intent on making as much money as possible at any expense and with a total disregard of others. The Drug Enforcement Administration (DEA) will continue to aggressively investigate anyone engaged in obtaining or selling prescription controlled substances outside of a legitimate doctor-patient or pharmacist relationship. There is a dangerous misunderstanding about prescription drugs. In Pennsylvania more people die from prescription drug overdoses than heroin or cocaine.”

“The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs,” said IRS Special Agent-in-
Charge Conner. “Without these ill-gotten gains, the traffickers could not finance their organizations. The role of IRS Criminal Investigation in narcotics investigations is to follow the money so we can financially disrupt and dismantle major drug trafficking organizations. IRS Criminal Investigation is proud to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”
“Drug diversion is a costly problem in this country – in both dollars, and lives,” said FBI Special Agent in Charge Edward J. Hanko. “The FBI is fully committed to investigating this fast-growing category of health care fraud.”

“Aside from the human casualties resulting from prescription drug diversion, the millions of dollars stolen from insurance programs is eroding trust in our health care system,” said Special Agent-in-Charge DiGiulio. “Our agents, working with federal and local law enforcement, are finding a huge wave of illegal billing, identity theft, fraud in the Medicare drug program, Medicaid, and other federal health insurance programs.”
Prescription drug abuse, despite popular misconceptions, has become more wide-spread, more destructive, and more dangerous than even street-level drug abuse. Nearly seven million
Americans are hooked on prescription drugs, more than are addicted to cocaine, heroin, hallucinogens, ecstasy, and inhalants combined. The web of prescription drug abuse entangles the poor and the rich, the old and the young, and does not discriminate based on race. Abuse of prescription narcotics has reached epidemic proportions in this country. According to the
Centers for Disease Control and Prevention (CDC), prescription drug abuse is the fastest growing drug problem in the United States, with the number of prescription drug overdoses tripling over the last 20 years.

A 2011 report by the CDC indicated that nearly 15,000 people die every year of overdoses involving prescription painkillers, and 1 in 20 people reported using prescription drugs for non-medical reasons during the prior year. Drug overdose, including overdose of prescription drugs, is now the leading cause of accidental death in the United States, recently surpassing automobile accidents. Nearly three out of four drug overdoses are caused by prescription painkillers, which include oxycodone. For every overdose death caused by prescription painkillers, there are 32 emergency room visits due to the misuse or abuse of prescription drugs. In 2011, oxycodone products were the prescription painkiller most commonly involved in emergency room visits.

There are more overdose deaths caused by prescription drugs than by heroin and cocaine combined. Prescription narcotics are dealt hand-to-hand, just like baggies of heroin or vials of crack. According to the CDC, 76% of non-medical prescription drug users acquired drugs that had been prescribed to someone else.

View: Defendant Chart.pdf | Little et. al., Indictment.pdf | Shabazz Indictment.pdf

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

PHILADELPHIA - William Webb, 51, of Philadelphia, was sentenced today to 25 years in prison for a string of armed robberies that targeted pharmacies.  Webb pleaded guilty July 24, 2013 to conspiracy, interference with interstate commerce by robbery, and brandishing a firearm during a crime of violence.  He and Edward Schaeffer conspired to target approximately 19 pharmacies in order to steal prescription pharmaceuticals, including oxycontin, oxycodone, and percocet.  Schaeffer, 30, pleaded guilty Sept. 12th and will be sentenced December 5, 2013.

In addition to the prison term, U.S. District Court Judge John R. Padova ordered restitution in the amount of $65,270.15, and five years of supervised release.  

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Philadelphia Police Department, with assistance from the Abington Twp. Police and Glenolden Borough Police.  It is being prosecuted by Assistant United States Attorney Jennifer Chun Barry.

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

Michael Mateja, 27, of Massachusetts, Matthew Morgan, 39, of Schnecksville, PA, and Samuel Puleo, 26, of Fogelsville, PA, are charged by Information, filed yesterday, with a fraud scheme involving energy contracts, announced United States Attorney Zane David Memeger. According to the information, Mateja and Puleo owned and operated Coastal Energy, LLC, a company that brokered energy contracts between commercial businesses and energy suppliers.

Between June 2011 and February 2013, Mateja and Puleo solicited clients whom they had sign contracts (“Fixed All-Inclusive”) stating that Coastal would negotiate fixed rates for each kilowatt hour.  Alternatively, an “Energy Only” contract provides the customer with a rate for kilowatt hours but does not include additional charges for transmission and capacity.  According to the information, Mateja and Puleo altered contracts to change the terms from “Fixed All-Inclusive” to “Energy Only” without the clients’ knowledge.  The end result that that the total per kilowatt hour price that Coastal’s clients had to pay were higher than the rates they agreed to pay.  They are each charged with wire fraud.  Mateja and Morgan are also charged with obstruction of justice for an alleged attempt to delete documents located on Coastal’s computers.

If convicted, each defendant faces a maximum possible sentence of at least 20 years in prison, three years supervised release, $250,000 fine, and a $100 special assessment

The case was investigated by Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney David L. Axelrod.

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

Robert Von Ryan, 37, of Philadelphia, was charged yesterday by information with one count of bank fraud, announced United States Attorney Zane David Memeger.  According to the information, while guarding the cars of Philadelphia Eagles football players, the defendant took bank account information belonging to one of the players and used the bank information to transfer more than $225,000 from the account.

If convicted the defendant faces a maximum possible sentence of 30 years imprisonment, a $1,000,000 fine, five years of supervised release and a $100 special assessment.

The case was investigated by the United States Secret Service, and is being prosecuted by Assistant United States Attorney Linwood C. Wright, Jr.

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

An indictment, unsealed today, charges former Philadelphia Police Officer Joseph Harvey, 39, of Philadelphia, PA, with deprivation of civil rights under color of law, and Philadelphia Police Officer Sean Cahill, 34, of Philadelphia, PA, with making a material false statement, announced United States Attorney Zane David Memeger.  Both defendants were arrested this morning.

According to the indictment, Harvey, while acting under color of law as a police officer with the Philadelphia Police Department, instructed M.C. to remove all of her clothing, thereby willfully depriving M.C. of the right, secured and protected by the United States Constitution and the law of the United States, to be free from an unreasonable seizure by a police officer.  The indictment further alleges that defendant Cahill falsely claimed that he was with Harvey, and that Harvey was never alone with M.C. at the time that M.C. alleged she was instructed by Harvey to undress. 

If convicted, Harvey faces a maximum term of one year in prison, a $100,000 fine, and a $100 special assessment; Cahill faces a maximum term of five years in prison, a $250,000 fine, up to three years’ supervised release, and a $100 special assessment.

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department Internal Affairs Bureau, with assistance from the Philadelphia District Attorney’s Office.  It is being prosecuted by Assistant United States Attorney Michelle L. Morgan, and Trial Attorney Sheldon Beer of the United States Department of Justice, Civil Rights Division, Criminal Section.

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 superseding indictment, charging five people in a complex, multi-million dollar tax fraud scheme, was unsealed today following the arrest of one of the defendants. The indictment alleges that the conspirators caused more than $200 million in losses to the United States through a massive scheme. Named in the 49-count indictment are: Samyak Veera, 39, of Singapore, Aviel Faliks, 39, of New York City, Chandrakant Shah, 65, of India, Donald Stevenson, 56, of North Palm Beach, Florida, and Eric Merl, 61, address unknown.  Faliks was arrested this morning in New York City. John Ivsan, 44, Andrew Ahn, 39, and Helen Del Bove, 53, have pleaded guilty in related cases and are awaiting sentencing. The indictment and informations filed against these defendants were also unsealed today. The charges were announced by United States Attorney Zane David Memeger, Assistant Attorney General for the Department of Justice Tax Division Kathryn Keneally, and Chief of the Internal Revenue Service Criminal Investigations Richard Weber.

The defendants named in the superseding indictment are charged with conspiracy to defraud the United States, conspiracy to commit wire fraud, and corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws. In addition to those charges, Veera is also charged with 11 counts of tax evasion and 19 counts of wire fraud; Faliks is also charged with five counts of tax evasion and eight counts of wire fraud; Shah is also charged with 11 counts of tax evasion; and Merl is also charged with four counts of making materially false statements to government officials. The indictment contains a notice of forfeiture for up to $150 million from Veera and Faliks.

Between at least 2003 and 2011, the defendants allegedly designed and implemented a scheme to evade more than $200 million in corporate taxes by purchasing companies with taxable gains and using fraudulent losses to wipe out the gains. The defendants then allegedly pocketed the corporations’ cash, filed fraudulent returns, and, in some instances, fraudulently sought and obtained refunds from the IRS for prior years. According to the superseding indictment, the defendants implemented their fraud scheme through four basic steps: (1) initial purchasers - including MidCoast Financial Inc., a company owned by Chandrakant Shah and operated by Samyak Veera - purchased target corporations with cash assets and large anticipated corporate income tax liabilities; (2) the initial purchasers next transferred these target corporations to straw buyers controlled on paper by Andrew Ahn and Aviel Faliks; (3) the defendants then evaded the corporations' income taxes through the use of fraudulent transactions designed to create the illusion that the corporations had incurred capital and ordinary losses; and (4) finally, the defendants distributed proceeds of the scheme through disguised means.  

Defendant Donald Stevenson was the head of the acquisition team at MidCoast Financial and its successor and allegedly led the effort to identify ripe targets for the conspiracy. Helen Del Bove provided bookkeeping services to Veera, Ahn, and Faliks, tracking the target corporations purchased, the gains that needed to be eliminated, and the losses used to wipe them out.  She allegedly provided this information to a tax return preparer so that the false returns could be prepared and filed. It is further alleged that Del Bove attempted to destroy key evidence after the IRS began to investigate the transactions. Eric Merl and John Ivsan both served as counsel to Veera and MidCoast Financial and other entities used to implement the fraud.  Later, after the IRS began to look into MidCoast Financial's transactions, it is alleged that Merl and Stevenson started and operated Private Capital Resource Group Inc. (PCRG), a new company to carry on the scheme. Aviel Faliks allegedly served as the straw buyer of the target corporations identified by PCRG, but he also played an instrumental role in setting up the fraudulent options transactions used to wipe out the corporations' gains.

If convicted of all charges, the sentencing guidelines call for a minimum sentence of at least 188 months imprisonment for Veera, Shah, and Stevenson, at least 151 months for Faliks, and at least 121 months for Merl. For Ivsan, Ahn, and Del Bove, the maximum years of imprisonment are ten years, eight years, and three years, respectively.

The case was investigated by IRS Criminal Investigations. It is being prosecuted by Assistant United States Attorneys Patrick J. Murray and Nancy E. Potts, and Tax Division Trial Attorney Andrew P. Young.

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

PHILADELPHIA – Eugene Goldman, M.D., 55, of Philadelphia, was sentenced today to 51 months in prison and a $300,000 fine for conspiring to violate the anti-kickback statute and violating the anti-kickback statute in relation to his role in a kickback scheme arising from his employment as the Medical Director at Home Care Hospice Inc. (HCH).  U.S. District Court Judge Eduardo Robreno ordered Goldman to immediately begin serving his sentence and also ordered three years of supervised release.  Goldman also faces mandatory exclusion from participation in any federal health care program.

The evidence at trial proved that from approximately December 2000 until approximately July 2011, Dr. Goldman served as the medical director for HCH and regularly referred Medicare or Medicaid patient beneficiaries to HCH.  HCH was a for-profit business in Philadelphia that provided hospice services for patients at nursing homes, hospitals and private residences. 

In December 2000 the defendant and one of the co-owners of HCH entered into a written contract to create the false appearance that all payments to Dr. Goldman from HCH were for services rendered in Dr. Goldman’s capacity as medical director for HCH, when in fact the large majority of payments from HCH to Dr. Goldman were illegal payments for the referral of Medicare and/or Medicaid patients to HCH.  From January 2003 to July 2011, Dr. Goldman received approximately $309,000 in illegal payments for patient referrals.  In January, February and March 2009, Dr. Goldman was captured on tape receiving kickbacks for patient referrals.

The case was investigated by the Federal Bureau of Investigation and the Department of Health and Human Services, Office of Inspector General.  It was prosecuted by Assistant United States Attorney Suzanne B. Ercole and Trial Attorney Margaret Vierbuchen of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.

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

Curtis Richardson, 48, of Philadelphia, was charged today in a three-count Indictment1 with committing a robbery of Conestoga Bank, 1032 Arch Street in Philadelphia on August 31, 2013, a robbery of Citizens Bank, 2001 Market Street in Philadelphia on September 1, 2013, and a robbery of Conestoga Bank, 1835 Market Street in Philadelphia on September 4, 2013, announced United States Attorney Zane David Memeger.

If convicted the defendant faces a maximum possible sentence of 60 years in prison, a $750,000 fine, and $300 in special assessments.

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

Click here to view the indictment

1An 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

Dean Ceraolo, 51, of Philadelphia, PA, was charged today by Superseding Indictment with robbing the Wawa store, at 10901 Bustleton Avenue, Philadelphia, on August 24, 2013, and attempting to rob Citizens Bank, at 1970 Red Lion Road, Philadelphia, on September 3, 2013, announced United States Attorney Zane Davd Memeger.

If convicted the defendant faces a maximum possible sentence of 40 years in prison, three years supervised release, a $500,000 fine, and $200 in special assessments.

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

Click here to view the indictment

1An 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 – An indictment was unsealed today in Philadelphia charging Anthony Gifoli, 65, Frank Tulino, 66, Vincent Simoni, 64, and James Matteis, 58, all of Philadelphia, with conducting an illegal gambling business, announced U.S. Attorney Zane David Memeger, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, and FBI Special Agent-in-Charge  Edward J. Hanko.

According to the indictment, Gifoli, Tulino, Simoni, and Matteis operated a sports bookmaking operation in Philadelphia from January 27, 2009 through November 1, 2010.  All of the defendants were arrested yesterday.  

If convicted, each defendant faces a maximum penalty of five years in prison and a $250,000 fine.  

The case is being investigated by the FBI and the New Jersey State Police. It is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section.

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

Thomas Rafferty, 67 of Levittown, PA was charged today by Indictment with three counts of employing a minor to create an image of the minor engaging in sexually explicit conduct, five counts of creating obscene visual representations of children, and one count of possession of images of child pornography announced United States Attorney Zane David Memeger.

If convicted the defendant faces a maximum possible sentence of 200 years imprisonment, with a mandatory minimum sentence of 15 years, a mandatory minimum term of 5 years supervised release after release from prison, up to lifetime supervised release, a $2.25 million dollar fine, and a $900 special assessment.

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

The case was investigated by Immigration and Customs Enforcement Homeland Security Investigations, with assistance from the Naval Criminal Investigative Service. It is being prosecuted by Assistant United States Attorney Michael L. Levy.

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 - Christopher Stehm, 51, of Mason, Ohio, was charged today by information with defrauding his employer, Berwyn-based Ametek, Inc., of at least $659,731, announced United States Attorney Zane David Memeger. According to the information, Stehm was the chief accounting officer at two different offices of the company when he submitted phony claims for expense reimbursements, many of which he supported with doctored receipts. Stehm is charged with two counts of wire fraud and two counts of filing false tax returns.

Stehm was the controller for Ametek’s Chandler division, in Broken Arrow, Oklahoma, from about January 2006 through March 2010.  In April 2010, Ametek promoted Stehm to be the vice president of finance at its HCC division, in Cincinnati, Ohio, and Stehm held that position until November 2012. In both positions, Stehm was his office’s chief accounting officer. According to the information, throughout his employment at Ametek, Stehm used a variety of methods to obtain “reimbursements” for expenses that he either never incurred or that were wholly personal in nature. These methods allegedly included cutting off the tops of receipts or “whiting out” portions of receipts that Stehm submitted with his expense reimbursement claims to make them appear to be business-related. Stehm also allegedly used copies of the same receipts to support multiple expense reimbursement claims. 

Ametek is a publicly-traded company (symbol AME on the New York Stock Exchange), which manufactures electronic instruments and electromechanical devices for sale in numerous countries. The company is headquartered in Berwyn, Pennsylvania, but it has offices in numerous locations in the U.S. and overseas. 

The information alleges that among the numerous personal expenses Stehm submitted for reimbursement from Ametek were repairs to his personal cars, private meals, and the purchase of a family dog. Stehm also allegedly hid his illegal income from the Internal Revenue Service and claimed baseless deductions when he filed his tax forms for 2010 and 2011, thereby under-reporting his annual income by more than $100,000 in each of those tax years.

If convicted of all charges, the defendant faces a maximum possible sentence of 46 years in prison, three years of supervised release, a $1 million fine, and a $400 special assessment.

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

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

Lawrence Wilson, 24, of Philadelphia, was sentenced today to 194 months in prison for his role in a large scale drug organization responsible for transporting multiple kilograms of cocaine and hundreds of pounds of marijuana to the Eastern District of Pennsylvania.  Wilson’s brother, Michael, ran the organization.  In addition to the conspiracy, Lawrence Wilson was a major participant in the kidnapping of two female drug couriers on January 17, 2011.  The women had just returned from Los Angeles, California with four suitcases containing marijuana and cocaine for the organization.  While waiting for the suitcases at the baggage claim carousel at the Philadelphia International Airport, a rival drug trafficking organization stole one of the suitcases.  Lawrence Wilson and other members of the organization believed the women had set up the robbery.  Lawrence Wilson and co-conspirator held the women at gunpoint.  Wilson was also involved in money laundering conspiracy, depositing approximately $5000 into the Bank of America account being used by the California drug supplier.

Wilson pleaded guilty the day of trial, in July, to conspiring to distribute 500 grams or more of the mixture and substance containing a detectable amount of cocaine and 100 kilograms or more of a mixture and substance containing a detectable amount of marijuana, one count of aiding and abetting the attempt to possess with intent to distribute 500 grams or more of cocaine, one count of aiding and abetting the possession and brandishing a firearm in furtherance of drug trafficking crime, one count of conspiracy to commit money laundering, and one count of money laundering. 

In addition to the prison term, U.S. District Court Judge Michael Baylson ordered a $5,000 fine and 5 years of supervised release.                       

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

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

Shaun Terrell Mays, 33, of Philadelphia, PA, was charged yesterday, by Information, with two counts of unauthorized use of one or more access devices, four counts of aggravated identity theft, and two counts of bank fraud, announced United States Attorney Zane David Memeger.

Mays faces a maximum sentence of 88 years in prison, including a two year mandatory term, a five year period of supervised release, a fine of up to $3.5 million, and an $800 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

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

Adrian Palmer, 43, of Philadelphia, PA, is charged by Indictment, unsealed today, with conspiring in the sex trafficking of girls under the age of 18.  Palmer is charged with one count of conspiracy, one count of sex trafficking of minors, and one count of attempted sex trafficking of a minor announced United States Attorney Zane David Memeger. Palmer was arrested last night.

According to the indictment, between June 1, 2012 and June 14, 2012, Palmer, who worked as a security guard at a Days Inn motel on Roosevelt Boulevard in Philadelphia, provided protection and assistance to sex traffickers operating at the motel in exchange for a daily fee.  Craig Johnson, indicted elsewhere, who was the operator of the sex trafficking venture, recruited young females to work as prostitutes. Johnson paid Palmer between $60 and $100 a day in exchange for advice about Johnson’s sex trafficking organization, including Johnson’s Backpage.com advertisements.  Palmer also allegedly provided Johnson with clients for the sex trafficking business and provided protection for Johnson so that law enforcement authorities would not be alerted to the sex trafficking operation. It is further alleged that in August 2013, Palmer accepted $100 from a confidential witness in exchange for protecting him from law enforcement so he could engage in the sex trafficking of a (fictitious) 16-year-old minor.

If convicted of all charges, the defendant faces a mandatory minimum term of 10 years in prison with a maximum of 30 years, a fine of up to $750,000, up to a lifetime period of supervised release, and a $300 special assessment.

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

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

            Michael Beer, 36, of Roseto, PA, was arrested last night by agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives, with support from the Pennsylvania State Police, for possession of a destructive device.  Beer will have an initial appearance today at 1:30 pm in federal court.

            According to the criminal complaint, Beer’s relative called police after discovering what was believed to be a pipe bomb in the basement of a house on Shisler Street, in Philadelphia, where Beer had previously resided.  The Philadelphia Police Department’s Bomb Disposal Unit, ATF and FBI all responded to the scene.  A total of six devices were removed and the area was secured.  

            The potential penalty for possession of a destructive device is up to 10 years in prison.  The government has 30 days to file an indictment.

            The case is being investigated by ATF and the Philadelphia Police Department.  It is being prosecuted by Assistant United States Attorney Marianne Cox.

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

PHILADELPHIA - Oronda Ligon, 31, of Philadelphia, PA, was sentenced October 16, 2013 to 108 months in prison for an armed home invasion in which an Upper Darby woman was terrorized. Ligon was convicted in March 2013 of Hobbs Act robbery after breaking into a home with two other men in May of 2011. While in the process of carrying a safe out of the home, the robbers were confronted by a female resident of the home, who had been in the basement, heard a noise, and came upstairs to find the three men robbing her house. Ligon pushed the victim to the floor and one of his cohorts pointed a gun at the victim’s chest. The robbers took a safe containing business proceeds and family jewelry totaling more than $50,000. 

In addition to the prison term, U.S. District Court Judge Mitchell Goldberg ordered three years of supervised release and restitution in the amount of $54,900.

This case was investigated by the Federal Bureau of Investigation and the Upper Darby Police Department.  It was prosecuted by Assistant United States Attorney Anthony Wzorek.

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

Nicholas R. Sabatine, III, 62 of Nazareth, PA was charged today by Information   with one count of filing a false tax return, announced United States Attorney Zane David Memeger.

Sabatine faces a maximum sentence of three years imprisonment, a one year term of supervised release, a $100,000 fine, together with cost of prosecution, and a $100 special assessment.

The case was investigated by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. It 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