Eastern District of Pennsylvania

PHILADELPHIA - Matthew Kolodesh, a/k/a "Matvei Kolodech", 51, of Churchville, PA, was found guilty of conspiracy to defraud Medicare of more than $14 million through his home hospice business, announced United States Attorne ZaneDavid Memeger. A federal jury delivered its verdict today. Kolodesh's business, Home Care Hospice, Inc. ("HCH"), located at 2801Grant Avenue in Philadelphia, submitted claims totaling approximately $14.3 million for patients that were not eligible for or did not receive the hospice services billed to Medicare.  Kolodesh also allegedly diverted $9.36 million dollars from HCH's operating account for his own personal use, such as extensive renovations to his house, travel expenses, college tuition for his son, and a luxury automobile. He siphoned substantial sums of cash from the HCH operating account through kickbacks from HCH vendors using a system of phony and inflated invoicing, and a cash kickback scam through sham charitable donations made in the name of the hospice

The jury found Kolodesh guilty of conspiracy to commit health care fraud, 21 counts of health care fraud, 11 counts of money laundering, and two counts of mail fraud. Kolodesh faces a statutory maximum sentence of 370 years in prison. The government will also seek restitution to Medicare in the amount of $14.3 million and proceeds from the money laundering.

“Cases like this involve the type of fraud and abuse that this office and the Department of Justice fights every day,” said Memeger. “The guilty verdict here bolsters our resolve to investigate and prosecute fraudsters who believe they can steal the public’s hard-earned tax dollars and government funds with impunity.”

“Criminals like Matvei Kolodech, who hide behind others in hopes of avoiding prosecution, should take notice of today’s jury verdict,” said Special Agent-in-Charge Nick DiGiulio, of the US Department of Health and Human Services, Office of Inspector General. “We will continue to aggressively investigate ring leaders like Kolodech, whose fraudulent organizations rob Medicare of precious resources.”

Kolodesh and his co-conspirator, identified only as "A.P.," would pay health care professionals, including doctors, for referring patients to HCH even when those patients were not eligible or appropriate for hospice services. In an effort to mask the alleged kickback scheme, HCH fraudulently represented that some of those health care professionals were paid for servicesas medical directors, advisors, or hospice physicians. 

Among the ineligible patients were patients who were not terminally ill and patients who were on the service list for more than six months. At the direction of Kolodesh and A.P., HCH staff would routinely "doctor" or alter patient charts to make it appear on paper as though the patient's medical condition was worse than it actually was. The staff was also allegedly directed to bill certain claims at a higher, more costlier rate of service than was actually provided to the patient.

In February 2007, HCH was notified that it was subject to a claims review audit.  Kolodesh, through A.P., directed members of HCH staff to falsify documentation to be submitted for the audit. In September 2007, HCH was notified that it had exceeded its cap for Medicare reimbursement and would have to repay $2,625,047 to the government program. At that point, Kolodesh ordered a mass discharge of patients. In October 2007, A.P. had 79 hospice patients discharged and a total of 128 discharged by January 2008, some of whom had been ineligible for hospice or inappropriately maintained on hospice service in excess of six months. Of those discharged patients, 16 were admitted to Kolodesh's other hospice business, Community Home Health in Bucks County. Once the Medicare cap was resolved, 11 of those patients were returned to HCH.  

In August and September 2005, Kolodesh and A.P. applied for a low interest loan worth $2.5 million with the Philadelphia Industrial Development Corporation. The purpose of PIDC loan is to stimulate business investment and create jobs in the city of Philadelphia. Kolodesh indicated that the funds were to be used to acquire and renovate a property for his business and the creation of 50 jobs in Philadelphia at the 2801 Grant Avenue site of HCH. In reality, Kolodesh knew that between August 2005 and July 2009, the job quota was not being met, and in the summer of 2008 he set up a sham office for CHH (his Bucks County health care business) at that location and falsely identified 73 CHH employees as working at the office location on Grant Avenue who, in fact, had never worked there.

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

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

Glenn Werley, 47, of Sarasota, Florida, was charged by Information, filed October 7, 2013, with one count of wire fraud, announced United States Attorney Zane David Memeger.  While working as the cafeteria manager for Bucks County Technical High School, the Information alleges, Werley defrauded the National School Lunch Program and School Breakfast Program of $179,000.

If convicted the defendant faces a maximum possible sentence of 20 years in prison, a 3-year period of supervised release, a $250,000 fine, and a $100 special assessment.

The case was investigated by United States Department of Agriculture Office of Inspector General and is being prosecuted by Assistant United States Attorney Elizabeth Abrams.

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

PHILADELPHIA - Sondra Wong Nelson, 36, of Philadelphia was charged by Indictment, unsealed October 3, 2013, with one count of theft from a federally funded organization and two counts of falsely altering a postal money order, announced U.S. Attorney Zane David Memeger. According to the indictment, between January 2012 and June 2010, during her tenure as a Supervisory Asset Manager at the Philadelphia Housing Authority (PHA), Nelson embezzled close to $8,000 in rent money from PHA tenants and deposited those funds into her personal bank account.

Many of the PHA tenants living in the scattered sites paid their monthly rent at the management offices in the form of money orders made payable to PHA. The indictment alleges that defendant Nelson, in her role as Supervisor Asset Manager at PHA, took many of these money orders, substituted her name for PHA as the payee on the money orders, and deposited the altered money orders in her personal bank account. It is further alleged that as part of her corrupt scheme, defendant Nelson accessed PHA's internal computer database and manipulated the database to falsely reflect that the embezzled rent payments had been received by PHA, even though she knew that she had deposited those funds in her personal bank account.

If convicted, the defendant faces a maximum sentence of 20 years in prison, three years of supervised release, a fine of up to $750,000, and a $300 special assessment.

The case was investigated by the Federal Bureau Investigation, the U.S. Department of Housing and Urban Development's Office of Inspector General, the United States Postal Inspection Service, and the Philadelphia Housing Authority Office of Inspector General. It is being prosecuted by Assistant United States Attorney Sozi Pedro Tulante.

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

Barbara Stanley, 60, of Nottingham, Pennsylvania was charged by Indictment , filed October 15, 2013, with a scheme to defraud the government regarding worker compensation benefits, announced United States Attorney Zane D. Memeger. Stanley is charged with five counts of wire fraud, two counts of theft of Government funds, one count of false statements, and three counts of false or fraudulent statements regarding workers= compensation benefits. The indictment alleges that between July 2006 and December 2010, Stanley continued to collect workers= compensation payments from the Department Of Labor=s Office of Workers= Compensation Programs even after she had recovered from her alleged work related injury. Defendant=s misrepresentations resulted in the defendant receiving an overpayment of approximately $164,428.20, which she knew she was not entitled to receive.

The indictment further alleges that Stanley received $50,094 in Office of Personnel Management disability retirement benefits that she knew she was not entitled to receive. She wrongfully converted to her own use at least $37,639.64 of those funds, resulting in total losses to the government of approximately $202,067.84

If convicted of all charges, the defendant faces a maximum possible statutory sentence of more than 100 years in prison, a $2.75 million fine, and three years supervised release.  

The case was investigated by the United States Postal Service Office of the Inspector General, the Department of Labor Office of the Inspector General, and the Office of Personnel Management Office of the Inspector General. It is being prosecuted by Special Assistant United States Attorney Thomas Moshang III.

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

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

PHILADELPHIA - Randolph Scott, 70, of Doylestown, PA, an attorney whose practice included estate and probate matters, was charged by Indictment on October 3, 2013, with defrauding a client’s estate of more than $1.7 million. Scott maintained a law office – Randolph Scott Associates – in Warrington, PA. He is charged with one count of mail fraud, two counts of aggravated identity theft, one count of tax evasion, one count of attempting to interfere with administration of internal revenue laws and three counts of failure to file income tax returns.

According to the indictment, between December 2005 and October 2011, while representing the estate of John C. Bready, Scott diverted approximately $1,758,193 of estate funds to his law office accounts. Because the estate was valued at more than $6 million at the time of Bready’s death in 2005, federal law required that a federal estate tax return be filed which would have resulted in approximately $520,351 being paid to the Internal Revenue Service. The indictment alleges that Scott purposefully failed to file the required form in order to maintain sufficient money in the estate to pay its beneficiaries and to avoid detection of the theft.

The indictment further alleges that after the estate’s executor died in 2009, Scott failed to disclose the death so that the investment account manager would continue to send the executor’s checks to Scott’s law firm. Scott would then allegedly forge the executor’s signature and deposit the checks into his law firm’s account. It is further alleged that Scott has the successor executor sign a document renouncing the position of successor executor so that Scott could continue to forge the signature of the deceased executor and divert money belonging to the estate. In addition to the charges, the indictment contains a notice of forfeiture seeking $1,758,193.

If convicted of all charges, Scott faces a mandatory minimum of two years in prison, consecutive to any other term of imprisonment imposed on the mail fraud count, resulting in 31 years maximum incarceration, possible restitution to the IRS in the amount of $520,351, possible restitution to the estate in the amount of $1,758,193, three years of supervised release, a $1.4million fine, and a $500 special assessment.

The case was investigated by the IRS Criminal Investigations and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Judy G. Smith.

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

PHILADELPHIA – U.S. Attorney Zane David Memeger, in conjunction with the U.S. Department of Justice Office of Community Oriented Policing Services (COPS), today announced funding awards for the Bethlehem Police Department.  The Department is being allotted $625,000 for the hiring of five school resource officers.

“In the wake of past tragedies, it's clear that we need to be willing to take all possible steps to ensure that our kids are safe when they go to school,” said Attorney General Eric Holder. “These critical investments represent the Justice Department's latest effort to strengthen key law enforcement capabilities, and to provide communities with the resources they need to protect our young people. Especially in a time of increased challenges and limited budgets, our top priority must always be the safety and well-being of our children.”

Overall the COPS Office funded awards to 263 cities and counties, aimed at creating 937 law enforcement positions.  More than $125 million will be awarded nationally, including nearly $45 million to fund 356 new school resource officer positions. Bethlehem will hire one resource officer for the high school and four officers for the middle school.

“Keeping our children safe when they go to school is of critical importance and I am pleased to join the Attorney General and the COPS Office in announcing these grants which will help provide our communities with the resources needed to accomplish this vital mission,” said Zane David Memeger.

“Bethlehem is a safe city because we make safely a priority,” said Bethlehem Mayor John Callahan. “The additional police officers in our schools will help ensure our dedication to public safety, as well as increase our interaction with the students in our schools in partnership with the Bethlehem Area School District.”

“We take the safety and security of our children very seriously,” said Bethlehem Police Chief Craig Finerty. “Being awarded this grant will help us improve our commitment to our community by giving us the ability to assign School Resource Officers to our schools.”   

“The COPS Office is pleased to assist local law enforcement agencies throughout the country address their most critical public safety issues,” said Joshua Ederheimer, Acting Director of the COPS Office.  “Funding from this year’s program will allow many cities and counties to apply new sworn personnel to issues related to violent crime, property crime, and school safety.”

The COPS Hiring Program offers grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers.  The program provides the salary and benefits for officer and deputy hires for three years.

Grantees for the 2013 hiring program were selected based on their fiscal needs, local crime rates, and their community policing plans.  There was an additional focus this year on agencies requesting assistance in developing school safety programs that would include the hiring of a school resource officer.  School resource officer positions funded by the COPS Office are sworn law enforcement positions that work within a school district or facility, interacting directly with school administrators and students.   

The COPS Office is a federal agency responsible for advancing community policing nationwide.  Since 1995, COPS has awarded over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 125,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.

For the entire list of grantees and additional information about the 2013 COPS Hiring Program, visit the COPS website at www.cops.usdoj.gov.

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

PHILADELPHIA - Eric Young, 40, of Philadelphia, Pennsylvania, was sentenced today to three years in prison for conspiracy to commit bank fraud and bank fraud. Young and co-conspirator Calvin Johnson ran a scheme in which they hired individuals to open bank accounts, made phony deposits, and made withdrawals from the accounts knowing there were insufficient funds. The defendants defrauded the banks of more than $250,000 between December 2011 and August 2012.

In addition to the prison term, U.S. District Court Judge Eduardo Robreno ordered Young to pay restitution to TD Bank in the amount of $268,656.56, serve three years of supervised release, and pay a $200 special assessment. Johnson is awaiting sentencing. Both defendants pleaded guilty.
The case was investigated by the Bensalem Police Department and the United States Secret Service. It is being prosecuted by Assistant United States Attorney Patrick J. Murray.

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

PHILADELPHIA - Justin Williams, a/k/a "New York Ice", a/k/a "Pimp Juice", 39, of
New York, NY, was convicted today of sex trafficking young women. Between November 2011 and January 2012, Williams recruited young females to work as prostitutes in his business who were advertised on the Internet for purchase, using locations such as "Backpage," for purposes of prostitution. Williams engaged in acts of physical violence to force the victims to remain in his business. The advertisements featured pictures of the victims, scantily clad, the price, and a phone number to call to arrange a meeting with a female. Williams forced the victims to engage in sex acts with clients.

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

            Williams faces a 15-year mandatory minimum prison sentence on the sex trafficking counts with a maximum sentence of life. U.S. District Court Judge J. Curtis Joyner scheduled a sentencing hearing for January 23, 2014.

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

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

PHILADELPHIA – Ramon Ignacio Rosa-Santos, 32, of Philadelphia, was charged today in an Indictment with passport fraud and falsely claiming to be a United States citizen, announced United States Attorney Zane David Memeger. According to the Indictment, Rosa-Santos, an alien and a native and citizen of the Dominican Republic, falsely represented his identity in an application for an United States passport. Rosa-Santos falsely stated that his name was “J.L.S.,” and that he was born in Puerto Rico, and was, therefore, a United States citizen, which he knew to be false.

If convicted of the offenses, Rosa-Santos faces a total maximum sentence of 15 years imprisonment, a $500,000 fine, five years supervised release, and a $200 special assessment.

This case was investigated by the United States State Department Diplomatic Security Service and Immigration and Customs Enforcement. The case is being prosecuted by Assistant United States Attorney Anita Eve.

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

PHILADELPHIA – An indictment was unsealed today charging Superior EMS Ambulance Company, operating from Huntingdon Valley, PA, its owner, Beana Bell, 31, and operator Vadim Fleshler, 32, both of Philadelphia, with conspiracy to commit health care fraud.  According to the indictment, the case involves a scheme in which the defendants submitted more than $4.4 million in fraudulent claims to Medicare. The defendants were also charged with making false statements in connection with health care matters. The indictment was announced by United States Attorney Zane David Memeger, Special Agent-in-Charge Nick DiGiulio with Health and Human Services Office of Inspector General and FBI Special Agent-in-Charge Ed Hanko.  

The indictment alleges that the defendants conspired to defraud Medicare by recruiting patients who were able to walk and could travel safely by means other than ambulance and who, therefore, were not eligible for ambulance transportation under Medicare requirements. It is alleged that the defendants, and others acting on their behalf, falsified reports to make it appear that the patients needed to be transported by ambulance when the defendants knew that the patients could be transported safely by other means and that many of them walked to the ambulance for transport. It is further alleged that the defendants themselves, or through others, paid illegal kickbacks to the patients as part of the scheme. The defendants allegedly billed Medicare for these ambulance services as if those services were medically necessary and, as a result of the allegedly fraudulent billing, the Medicare program sustained losses of more than $2.4 million for this medically unnecessary method of transportation.

             If convicted, the defendants face substantial terms of imprisonment, fines and are subject to criminal forfeiture proceedings with possible exclusion from participating in federal health care programs; Superior EMS Ambulance Company faces significant financial penalties, including substantial criminal fines, restitution and forfeiture obligations.

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

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

PHILADELPHIA – Robert Ranieri, 38, of Glendora, NJ, was sentenced today to serve 12 months and one day in prison for his participation in loan sharking activities on behalf of the Philadelphia La Cosa Nostra (LCN) Family.

In addition to his prison term, U.S. District Court Judge Eduardo Robreno ordered Ranieri to pay a $1,000 fine and ordered three years of supervised release.

On June 13, 2013, Ranieri pleaded guilty to conspiring with Philadelphia LCN Family capo Anthony Staino and others to make a usurious loan to an undercover FBI agent and to use threats of violence to collect payments on the loan. 

The case was investigated by the FBI, the Internal Revenue Service-Criminal Investigation, the Pennsylvania State Police, the New Jersey State Police, the Philadelphia Police Department, the U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor’s Employee Benefits Security Administration.  Additional assistance was provided by the New Jersey Department of Corrections.

The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania.  Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.

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

Jerome Clinton Faison, 45, and David Thomas Jr., 49, both of Philadelphia, Pennsylvania, were charged today by indictment with interstate transportation of stolen goods, announced United States Attorney Zane David Memeger. The indictment charges that on December 27, 2012, Faison and Thomas unlawfully transported in interstate commerce approximately $100,000 of stolen jewelry from Ogden, Utah to Philadelphia, Pennsylvania.

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

This case has been investigated by the Federal Bureau of Investigation, the Philadelphia Police Department, and the Ogden Police Department. The case is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.

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

Dean Ceraolo, 51, of Philadelphia, PA, was charged today by Indictment on charges that he committed an attempted bank robbery at Citizens Bank, 1970 Red Lion Road, Philadelphia, on September 3, 2013, announced United States Attorney Zane David Memeger.

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

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

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

PHILADELPHIA – Dr. Norman Werther, 73, of Ft. Washington, PA, was sentenced today to 25 years in prison for distribution of a controlled substance resulting in death and more than 300 counts stemming from his pill mill operation.  A federal jury convicted Werther on June 11, 2013 of 184 counts of illegally distributing oxycodone, 116 counts of money laundering, six counts of conspiracy to distribute controlled substances, and one count of maintaining a drug-involved premises.  

Werther was part of a multi-million dollar drug conspiracy involving illegal prescriptions, phony patients, and multiple drug trafficking organizations.  At the time, Werther was a Montgomery County physician, running a physical therapy and rehabilitation practice in Willow Grove.  He conspired with six separate groups of drug dealers.  Werther was involved in the drug conspiracy between February 2009 and August 2011.  The operation resulted in the illegal distribution of more than 700,000 pills containing oxycodone. At least one of the drug trafficking organizations working with Werther trafficked pills valued at more than $5 million that Werther illegally prescribed.

“Instead of using his medical license to help people, Dr. Werther chose to generate tremendous profits by putting hundreds of thousands of pills on the street illegally,” said First Assistant US Attorney Louis Lappen.  “In one case, as the jury found, Dr. Werther’s criminal enterprise and blatant disregard for the safety of the community caused the death of a patient whom Dr. Werther knew had a history of drug addiction.  The court’s sentence today will send a message to a growing community of pharmaceutical drug pushers that the justice system will impose the most severe penalties on those who are criminally responsible for our growing epidemic of pharmaceutical drug abuse.”

“Werther peddled prescription controlled substances in the very same way a street dealer pushes heroin to addicts.  His sentence reflects his greed and disregard for the safety of the community he claimed to serve,” said Drug Enforcement Administration Special Agent-in-Charge David G. Dongilli.  “DEA will continue to aggressively investigate any doctor who is selling prescriptions without a legitimate medical need, thereby contributing to the epidemic of prescription drug addiction.”

“Norman Werther got what he deserved for making a mockery of the medical profession and putting people’s lives at risk because he needed money,” said Special Agent-in-Charge Nick DiGiulio, US Department of Health and Human Services, Office of Inspector General. “Criminals like Werther should count on an aggressive prosecution and should expect the same fate.” 

Werther worked with drug traffickers who recruited large numbers of pseudo-patients.  Werther set aside a specific block of time each business day to see the pseudo-patients recruited by Ronald Campbell, Anthony DiPasquale, Angel DuPrey, Kyle Jones, and William Stukes. With the help of Werther’s office staff, those “patients” were transported to Werther’s medical office, at 301 Davisville Road in Willow Grove, PA, for cursory examinations.  The “patients” paid an office visit fee, usually $150, by cash, check, or money order, and Werther wrote prescriptions for them to obtain oxycodone-based drugs without there being a legitimate medical purpose for the prescription and outside the usual course of professional practice.  The “patients” were then driven to various pharmacies, including Northeast Pharmacy, to have their prescriptions filled.  The drugs were then turned over to the drug dealers so their organizations could sell the narcotics to numerous drug dealers who resold the drugs on the street. 

In September 2010, Werther knowingly dispensed approximately 150 pills containing 30 milligrams each of oxycodone, and 30 pills containing 15 milligrams each of oxycodone, to Nathaniel Backes for no legitimate medical purpose and Nathaniel Backes’ death resulted from the use of that substance.

This case was investigated by the Drug Enforcement Administration, the U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, and the Internal Revenue Service Criminal Investigations, with assistance from the Philadelphia Police Department, the North Coventry Police Department, the Upper Moreland Police Department, and the Montgomery Township Police.  It is being prosecuted by Assistant United States Attorneys Nancy Beam Winter, Jason Bologna, and Michelle Rotella. 

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

PHILADELPHIA – John C. Tausche, 62, of Blowing Rock, NC, was sentenced today to 54 months in prison for his role in a multi-million dollar investment fraud scheme.  U.S. District Court Judge John R. Padova also ordered Tausche to pay $114,995,446 in restitution to victim Barclays Bank.  Tausche was a hedge fund business manager and an associate of Helmut Kiener, 53, of Aschaffenburg, Germany, who was charged separately.  The charges alleged that the two engaged in a scheme to defraud institutional investors and caused collective losses of more than $311 million.  Tausche pleaded guilty November 6, 2012, to one count of bank fraud and one count of money laundering.  Kiener, who is currently incarcerated in Germany, is charged by indictment with four counts of wire fraud, two counts of bank fraud, and three counts of money laundering.

Kiener controlled several hedge funds - including K1 Global Limited and K1 Invest - which he marketed to international investors.  Tausche controlled several offshore hedge funds collectively called the Oceanus Funds.  According to the charges, between March 2005 and December 2008, Kiener allegedly devised a scheme to defraud Bear Stearns entities by representing to Bear Stearns that, under Kiener=s management, Bear Stearns investment funds would be diversified and independently managed.  However, the indictment alleges that Kiener actually funneled Bear Stearns money from K1 through the Oceanus Funds and back to K1, so as to give the false impression that the funds were growing in size and were viable investments.  Kiener and Tausche, it is alleged, knowingly and intentionally fostered the false appearance that the K1 Funds were increasing in value, in order to induce Bear Stearns to continue to invest in the K1 Funds.  Both defendants allegedly provided false and misleading information to Bear Stearns in response to inquiries regarding the K1 and Oceanus Funds, repeatedly and falsely representing that the funds were diversified and independently managed.  The indictment alleges that, as a result of the scheme, Kiener earned sales agent fees all while Bear Stearns invested and lost approximately $82 million.

Tausche pleaded guilty to a similar scheme involving Barclays Bank, the K1 Funds and the Oceanus Funds, which caused losses to Barclays Bank totaling approximately $137 million. 

In addition, according to the indictment against Kiener, in 2007, Barclays Bank, Bear Stearns, and BNP Paribas (ABNPP@) also invested more than $100 million with Kiener in two offshore funds named Consistent Return Ltd. and Mezzanine Financing Ltd.  According to the indictment, Kiener represented that both Consistent Return Ltd. and Mezzanine Financing Ltd. were legitimate investment funds when he actually directed a third party to create these offshore funds and then used the funds for his own purposes including, but not limited to, the purchase of: oceanfront real estate in Delray Beach, Florida valued at over $21 million; a Bombardier executive jet; a Bell helicopter; luxury cars such as a Bentley, a Mercedes and a Maybach; two luxury watercraft; and over $8 million in upgrades to his real estate.

The case was investigated by the Foreign Corruption Investigation Group, Homeland Security Investigations - Miami Field Office, the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the German police force Kriminalpolizeiinspektion Unterfranken, with assistance from Barclays Bank, BNP Paribas, and Bear Stearns/J.P. Morgan Chase Bank. The Office of International Affairs in the Justice Department’s Criminal Division  also provided valuable assistance in this matter.  It is being prosecuted by Assistant United States Attorneys Jennifer Arbittier Williams and Suzanne Ercole.

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

Michael Ghabrial, 49, of Martinsville, New Jersey, was charged today by Information with one count of bank bribery, announced United States Attorney Zane David Memeger. According to the Information, Ghabrial, an officer of Valley National Bank (“VNB”), solicited and accepted a bribe in exchange for agreeing to sell real estate property owned by VNB at a reduced price.

If convicted, Ghabrial faces a maximum possible sentence of 30 years imprisonment, a five- year period of supervised release, a $1 million 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 Vineet Gauri.

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

            Stephen Davis, 65, of Philadelphia, Pennsylvania, was charged by Indictment, unsealed today, with attempted possession with intent to distribute 100 grams or more of heroin, announced United States Attorney Zane David Memeger.

            If convicted the defendant faces a maximum possible sentence of imprisonment for life, a mandatory minimum sentence of ten years, a fine of not greater than $8,000,000, supervised release for eight years, and a $100 special assessment.

            The case was investigated by the Immigration and Customs Enforcement Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Laurie Magid.

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

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 - Massmio Fiorani, 35, of Italy, pleaded guilty and was sentenced yesterday to six months in prison for interference with a flight crew. Fiorani interfered with the duties of crew members and attendants on board a U.S. Airways flight from Barcelona to Philadelphia on August 7, 2013. In addition to the prison term, U.S. District Court Judge Harvey Bartle ordered Fiorani to pay $25,000 restitution to U.S. Airways. Following his release, Fiorani will have an administrative proceeding with U.S. Immigration and Customs Enforcement.

The case was investigated by Immigration and Customs Enforcement Homeland Security Investigations, the Federal Bureau of Investigation, the Philadelphia Police Department, and the Tinicum Township Police Department. It was prosecuted by Assistant United States Attorney Jennifer Arbittier Williams.

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

PHILADELPHIA - Deshawn King, 33, and Daniel Blount, 31, both of Allentown, PA, are charged by Indictment , unsealed today, with running a sex trafficking operation, incorporating heroin as a means of punishing and controlling their victims. King and Blount are both charged with conspiring to commit sex trafficking of women by force, fraud, and coercion; two counts of sex trafficking by force, fraud, or coercion, and two counts of attempted sex trafficking by force, fraud, and coercion. King and Blount were taken in to federal custody today. The indictment was announced by United States Attorney Zane David Memeger and Special Agent-in-Charge John P. Kelleghan with Immigration and Customs Enforcement Homeland Security Investigations.

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

“The defendants in this case preyed on vulnerable women, dehumanized them, threatened and abused them, and sold them for their own profit,” said Memeger.  “These defendants made a living through a horrific form of modern day slavery.   We will not tolerate this type of criminal inhumanity and will continue to work with our law enforcement partners to eradicate sex trafficking.”  

“Homeland Security Investigations, working in collaboration with the Allentown Police Department and our law enforcement partners, will use all of our resources to investigate and arrest individuals engaged in sex trafficking. This cold, heartless enterprise, where criminals risk individuals’ lives, will not be tolerated.” said John Kelleghan, special agent in charge of HSI Philadelphia. “This case highlights the importance of law enforcement cooperation to apprehend human traffickers while working to provide assistance to the victims who were exploited.”

If convicted, both defendants face a maximum possible sentence of life in prison with a mandatory minimum of 15 years.

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

Click here to view the indictment

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Darnell Thomas, 43, of Philadelphia, Pa., was charged today by Indictment with 3 counts of bank robbery announced United States Attorney Zane David Memeger. Thomas is charged with robbing Citizens Bank, 6324 Stenton Avenue, on January 24, 2013; PNC Bank, 3244 North Broad Street, on April 20, 2013, and the same Citizens Bank, located at 6324 Stenton Avenue, on April 22, 2013. In each robbery, the indictment alleges, Thomas handed a note to the bank tellers demanding cash.

If convicted Thomas faces a maximum of 60 years imprisonment.

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

Click here to view the indictment

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Maria DeJesus-Guzman, 36, of Philadelphia, was charged today in a four count indictment with loan application fraud, passport fraud, falsely representing to be a United States citizen, and aggravated identity theft announced United States Attorney Zane David Memeger. According to the indictment, DeJesus-Guzman, an alien and a native and citizen of Mexico, falsely represented that her name was “W.A.A.,” her date of birth was in 1970, and her social security number ended with 5120, in order to obtain a home equity loan and line of credit from Bank of America, N.A. DeJesus-Guzman made the same false representations in a passport application, in addition to the false representation that she was born in Puerto Rico and, therefore, a United States citizen, in order to obtain a United States passport.

If convicted of the offenses, DeJesus-Guzman faces a total maximum sentence of 43 years imprisonment, a mandatory two-year consecutive sentence, five years supervised release, $1,750,000 fine, and $400 special assessment.

This case was investigated by the United States State Department Diplomatic Security Service and the U.S. Department of Homeland Security, Immigration and Customs Enforcement. The case is being prosecuted by Assistant United States Attorney Anita Eve.

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

Maria DeJesus-Guzman, 36, of Philadelphia, was charged today in a four count indictment with loan application fraud, passport fraud, falsely representing to be a United States citizen, and aggravated identity theft announced United States Attorney Zane David Memeger. According to the indictment, DeJesus-Guzman, an alien and a native and citizen of Mexico, falsely represented that her name was “W.A.A.,” her date of birth was in 1970, and her social security number ended with 5120, in order to obtain a home equity loan and line of credit from Bank of America, N.A. DeJesus-Guzman made the same false representations in a passport application, in addition to the false representation that she was born in Puerto Rico and, therefore, a United States citizen, in order to obtain a United States passport.

If convicted of the offenses, DeJesus-Guzman faces a total maximum sentence of 43 years imprisonment, a mandatory two-year consecutive sentence, five years supervised release, $1,750,000 fine, and $400 special assessment.

This case was investigated by the United States State Department Diplomatic Security Service and the U.S. Department of Homeland Security, Immigration and Customs Enforcement. The case is being prosecuted by Assistant United States Attorney Anita Eve.

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

PHILADELPHIA - Former Philadelphia Traffic Court Judge Robert Mulgrew, 55, of Philadelphia, pleaded guilty today to mail fraud and conspiracy to commit mail fraud in connection with a scheme to defraud the Pennsylvania Department of Community and Economic Development (“DCED”).  Mulgrew also pleaded guilty to filing a false tax return. 
           
Mulgrew and co-defendant Lorraine Dispaldo, who previously pleaded guilty, engaged in a 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 more than $450,000 in grants to the Friends of Dickinson Square (“FDS”) with the understanding that the grants were to be used to purchase equipment and materials for the maintenance of Dickinson Square Park at 4th & Tasker Streets, Philadelphia, and surrounding neighborhood revitalization.  Mulgrew, the Vice-President of FDS, signed the FDS grant contracts with DCED.   DCED also awarded approximately $397,000 in grants to the Community to Police Communications (“CPC”) with the understanding that the grants were 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.

The defendants misrepresented their intentions to DCED, and that - contrary to their agreement to spend grant funds solely to purchase equipment and materials for neighborhood revitalization and improved communications with the police - the defendants used thousands of grant dollars to pay Mulgrew’s relatives and associates. They represented that they were paying for work done on behalf of FDS and CPC. After distributing grant funds to relatives and associates, the defendants supplied false and misleading information to DCED to conceal the actual amount of grant funds which they paid to the relatives and associates contrary to the express purposes of the grant.

Mulgrew and Dispaldo spent thousands of dollars of grant funds for their own personal uses. Mulgrew improperly reimbursed himself from FDS funds for thousands of dollars of expenditures which he claimed were incurred by FDS when they were not and for his expenditures for items not authorized under the terms of the FDS grants. Mulgrew and Dispaldo supplied DCED with false documents to conceal their own use of grant funds and other improper uses of the funds.  

Mulgrew did not report the additional income from the fraud scheme on his tax return and claimed false business deductions which improperly reduced his tax liability.   

Mulgrew faces a maximum possible sentence of 23 years in prison, five years supervised release, restitution to the IRS and restitution to the Commonwealth of Pennsylvania.  Dispaldo, who pleaded guilty in April, is scheduled for sentencing on November 25, 2013.

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 Attorneys Paul L.Gray.  

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525

ALLENTOWN – Keith Martin Thompson, 33, of Lancaster, PA, was sentenced today to 270 months in prison in a drug conspiracy case.  Thompson, a/k/a “Keefer,” was the leader of a large-scale cocaine and crack cocaine distribution organization in Lancaster from between at least 2005 and his arrest in January of 2011 on local charges.  In addition to the prison term, Thompson must pay a fine of $2,400, a special assessment of $1,400, and complete 10 years of supervised release. 

Thompson was federally indicted on February 15, 2011 along with 11 co-defendants, also from Lancaster.  The drug organization run by Thompson would routinely purchase wholesale quantities of illegal drugs, including cocaine and cocaine base (“crack”) from suppliers in Philadelphia, New York, and elsewhere. They distributed the drugs to customers on the streets of Lancaster and Harrisburg, PA, and the areas surrounding those cities.  Thompson’s co-defendants sold the drugs for Thompson and also sold some of the drugs to their own customers.  At least three of the drug dealers routinely carried guns to protect their drugs and the money they made from selling the drugs.

Part of the drug organization’s business model included renting dozens of vehicles for members of the organization to use for travel to New York and Philadelphia to pick up multi-kilogram quantities of drugs.  Some of the drugs were stored at a residence in the 2000 block of Swarr Run Road, Lancaster, Pennsylvania.  Cocaine deals were also conducted in the parking lots of retail businesses, including a baby goods store, an apartment complex, and a bar in Lancaster.

Thompson pleaded guilty on April 6, 2013 to 12 counts including conspiracy to distribute 50 grams or more of cocaine, admitting that 20 kilograms of crack cocaine and 50 kilograms of cocaine were distributed in furtherance of the criminal activity jointly undertaken by him and his associates.  Thompson also pleaded guilty to two counts of distribution of cocaine, five counts of distribution of cocaine base (“crack”), one count of distribution of 28 grams or more of cocaine base (“crack”), one count of possession with intent to distribute cocaine, one count of possession with intent to distribute 500 grams or more of cocaine, and one count of possession of a firearm by a convicted felon.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (Reading), the Federal Bureau of Investigation (Harrisburg), the Lancaster County Drug Task Force, the City of Lancaster Police Department, and the Manheim Township Police Department.  It is being prosecuted by Assistant United States Attorney Mark S. Miller.

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

Massmio Fiorani, 35, of Italy, was charged by information with a committing the crime of interference with a flight crew, announced United States Attorney Zane David Memeger. According to the information Fiorani interfered with the duties of crew members and attendants on board a U.S. Airways flight from Barcelona to Philadelphia on August 7, 2013.

If convicted the defendant faces a maximum possible sentence of 20 years in prison, and a fine of $250,000. He also may be required to pay full restitution to all victims of his offense.

The case was investigated by Immigration and Customs Enforcement Homeland Security Investigations, the Federal Bureau of Investigation, the Philadelphia Police Department, and the Tinicum Township Police Department. It is being prosecuted by Assistant United States Attorney Jennifer Arbittier Williams.

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

Angel Nathan Melendez, 24, of Philadelphia, PA, was charged today by Indictment with aggravated identity theft and passport fraud, announced United States Attorney Zane David Memeger. According to the indictment, Melendez secured a United States passport using his own photograph but another person’s name, date of birth, and social security number.

If convicted, Melendez faces a mandatory minimum sentence of two years with a maximum possible sentence of 12 years in prison, a three year period of supervised release, a $500,000 fine, and a $200 special assessment.

The case was investigated by the State Department’s Diplomatic Security Service and is being prosecuted by Assistant United States Attorney Karen L. Grigsby.

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 - Clifton McLean, 31, and Leroy Winston, 31, of Philadelphia, Pennsylvania, were charged today 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 Jun 10, 2013 and August 14, 2013, McLean and Winston sought the help of another person in arranging the home invasion robbery of drug dealers.  The defendants allegedly planned to steal, at gunpoint, eight to nine kilograms of cocaine.  It is further alleged that on August 14, 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 McLean and Winston 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 5 kilograms or more of cocaine, attempted possession with intent to distribute 5 kilograms or more of cocaine, using a firearm during the commission of a crime of violence or drug trafficking crime, and being felons in possession of a firearm.

If convicted, the defendants face a maximum possible sentence of life imprisonment.  All of the defendants face a ten year mandatory minimum sentences for the offenses to be followed by a five year mandatory minimum consecutive sentence on the 924(c) count.

The case was investigated by ATF and is being prosecuted by Assistant United States Attorney Jeanine Linehan.

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

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

PHILADELPHIA - Naman Bader, aka “John C. Koshy,” 34, of Philadelphia, was sentenced today to 12 months in prison for smuggling and illegally distributing more than two million prescription pills, such as Xanax, Valium, Phentermine, Ativan, Klonopin, Ambien, and their generic equivalents, valued at approximately $10,310,406. Additionally, approximately 25,000 counterfeit Viagra and Cialis pills were seized in international mail parcels during the course of the investigation. Bader pleaded guilty on September 5, 2012, to conspiracy to possess controlled substances with the intent to distribute and to receive merchandise brought into the United States contrary to law and distribution of a controlled substance in a school zone.

Between February 2011 and October 2011, Bader participated in a conspiracy to import and distribute pharmaceutical controlled substances. He received bulk shipments of pills from overseas, delivered some of the pills to conspirators to repackage for customer orders, and forwarded other boxes of bulk pills to other conspirators across the county. Bader also shipped pills to people who had placed orders over the internet without prescriptions. Bader conducted some of this business using a mail box at a commercial mailbox store on Castor Avenue in Philadelphia.

In addition to the prison term, U.S. District Court Judge Jan E. DuBois ordered Bader to pay a special assessment of $200, and ordered three years of supervised release.

Bader’s co-conspirator, Rehan Shah, was sentenced on December 5, 2012, to 15 months in prison.

This case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations, the Food and Drug Administration - Office of Criminal Investigations, and the United States Postal Inspection Service. It was prosecuted by Assistant United States Attorney Albert S. Glenn.

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

H. Jack Miller, 51, of Boca Raton, Florida, was charged by information, filed on September 5, 2013, with one count of willful failure to maintain an effective anti-money laundering program and one count of willful failure to file a suspicious activity report, announced United States Attorney Zane David Memeger.

Miller was president and CEO of Public Savings Bank (PSB), a private, closely-held corporation. PSB had one branch office located in Huntingdon Valley, PA. As a financial institution, PSB was subject to the requirements of the Bank Secrecy Act (BSA), which was enacted to prevent financial institutions from being used as intermediaries in the movement of money derived from criminal activity. According to Count One of the information, Miller, who controlled all operations at the bank, failed to establish an effective anti-money laundering program, which included the appointment of a competent BSA compliance officer and the implementation of policies and procedures to protect against money laundering. He is also charged in Count Two with failing to file a Suspicious Activity Report in connection with a wire transmission of approximately $86,400, which occurred on March 25, 2010. The money was transferred into the account of a foreign account holder whom Miller and other PSB employees allegedly suspected was operating an unlicensed money transmission business.

If convicted, the defendant faces a maximum possible sentence of 10 years imprisonment, 3 years of supervised release, a $500,000 fine, and a $200 special assessment.

The case was investigated by Homeland Security Investigations, FDIC Office of the Inspector General and the Internal Revenue Service and is being prosecuted by Assistant United States Attorney Terri A. Marinari.

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

Philip Epps, 26, of Philadelphia, Pa., was charged today by Indictment with possession of a firearm by a convicted felon, announced United States Attorney Zane David Memeger.

If convicted the defendant faces a mandatory minimum term of imprisonment of 15 years, and a maximum possible sentence of life imprisonment.

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

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

PHILADELPHIA – Siarhei Baltutski, a/k/a  Sergey Boltutskiy, 41, of Minsk, Belarus, was sentenced today to XX months in prison for conspiracy to violate the Arms Export Control Act, conspiracy to violate the International Emergency Economic Powers Act, and conspiracy to commit money laundering.  Baltutski pleaded guilty on January 25, 2013.  In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered ...           

The sentence was announced by United States Attorney Zane David Memeger, Acting Assistant Attorney General John Carlin of the Justice Department’s National Security Division, Acting Assistant Attorney General Mythili Raman, of the Justice Department’s Criminal Division, and Special Agent-in-Charge John P. Kelleghan of Immigration and Customs Enforcement Homeland Security Investigations.             

Between January 1, 2008 and September 21, 2011, Baltutski organized a network of buyers in the United States to obtain and illegally export to Belarus high-tech military hardware such as Scorpion Thermal Weapon Sights, ThOR 2 Thermal Imaging Scopes, Thermal-Eye Renegade 320's, and other night vision targeting devices.  During the course of the conspiracy, Baltutski and his associates illegally exported hundreds of such items.  Baltutski then arranged for hundreds of thousands of dollars to be secretly wired, via offshore shell companies, to purchase these items, pay for shipping, and pay his network of buyers.         

“The Arms Export Control Act and the International Emergency Economic Power Act prohibit the export of high tech military technology which is critical to the national security and foreign policy interests of the United States,” said Memeger.  “Keeping this important technology out of the hands of current and potential adversaries is critical to our national interest and the safety and success of our service members in combat today.” “Today’s sentence sends a strong message that the justice system will seriously punish those who threaten our national interests through this type of criminal activity.”

“HSI is committed to protecting Americans and our allies from greedy profiteers exporting sensitive technology,” said Kelleghan. “When sensitive military components get into the wrong hands, our national security and our troops’ lives are seriously threatened.”

“The FBI places a high priority on preventing advanced technology from getting to those who might use it to harm American troops or U.S. interests,” said FBI Special Agent-in-Charge Edward J. Hanko. “In this case, one man’s greed potentially put untold numbers of Americans at risk.”           

This case was investigated by the U.S. Immigration and Customs Enforcement Homeland Security Investigations and the Federal Bureau of Investigation.  It was prosecuted by Assistant U.S. Attorney Robert Livermore, Trial Attorney Jerome Maiatico with the Department of Justice’s Organized Crime and Gang Section, and Trial Attorney David Recker of the National Security Division. 

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525

Jermaine Heylinger, 41, of Jamaica, New York, was charged today by Indictment with one count of escape, announced United States Attorney Zane David Memeger.

If convicted the defendant faces a maximum possible sentence of five years imprisonment, a $250,000 fine, 3 years supervised release and a $100 special assessment.

The case was investigated by the United States Marshal Service and is being prosecuted by Assistant United States Attorney Jennifer Chun Barry.

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

Marcus Akiem Ricketts, 36, of Boyertown, Pennsylvania was charged today by superseding indictment with armed bank robbery and using and carrying a firearm during a crime of violence, announced United States Attorney Zane David Memeger. These charges stem from four armed bank robberies.  The indictment alleges Ricketts committed the following armed robberies: on June 8, 2010, at the Sovereign Bank, located at 258 East High Street, Pottstown, Pennsylvania; on January 24, 2012, at the Citizens Bank, located at 209 Lancaster Avenue, Devon, Pennsylvania; on April 12, 2012, at the First Niagara Bank, located at 502 State Avenue, Emmaus, Pennsylvania; and on July 2, 2012, at the Manufacturers and Traders Trust Company (“M&T Bank”), formerly located at 760 North Pottstown Pike, in Exton, Pennsylvania.

If convicted of all charges, Ricketts faces a maximum possible sentence of life imprisonment, with a mandatory minimum term of 82 years, five years of supervised release, a $2 million fine, and an $800 special assessment.

This case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, the Chester County Sheriff’s Department, the Chester County Detectives, and the police departments for Easttown Township, Emmaus, Lower Merion, Pottstown, Uwchlan, Shillington Township, Warminster, and West Whiteland, Pennsylvania.  In addition, the District Attorney’s offices for the counties of Berks, Bucks, Chester, Lehigh and Montgomery were also involved in the investigation.  This case is being prosecuted by Assistant United States Attorney Jeffery W. Whitt.

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 - Aleksandr N. Zagorodny, 40, of Southampton, PA, was sentenced today to 78 months in prison for a healthcare fraud scheme involving MedEx Ambulance, Inc., located in Feasterville, PA.  Zagorodny was the President and a founder of MedEx Ambulance.  His 36 year-old brother, Sergey Zagorodny, from Philadelphia, PA, the former Vice-president and co-owner of the company, was sentenced to 60 months in prison for his involvement in the health care fraud scheme.  MedEx Ambulance was ordered to be dissolved after it has been excluded from participation in Medicare and its assets are transferred to the government to satisfy restitution and forfeiture obligations.  Each defendant had pleaded guilty to all counts in a 41-count indictment including health care fraud, false statements in connection with health care matters, wire fraud, and conspiracy to commit health care fraud and wire fraud.

            Defendant MedEx Ambulance and its owners transported patients who were able to walk and could travel safely by means other than ambulance and who were not eligible for ambulance transportation under Medicare requirements.  Falsified reports made it appear that the patients needed to be transported by ambulance when the defendants and their employees knew otherwise.  The defendants billed for the ambulance services as if those services were medically necessary.  The Medicare program was bilked out of more than $3.4 million through this fraud.    

            U.S. District Court Judge Berle M. Schiller also ordered restitution to Medicare in the amount of $3,418,358.81, a special assessment of $4,100 for each individual defendant and $16,400 for the corporation, and a 3-year term of supervised release for the individuals and 5 years of probation for the corporation.  The Court ordered the forfeiture of four ambulances that had been purchased for over $200,000, as well as forfeiture of bank accounts worth over $40,000, and entered a money judgment against the defendants for $3,418,358.81.  In connection with the sentencing, the company agreed to sell its base of operations and to provide the proceeds of that sale to the government in partial satisfaction of the defendants’ restitution obligations.  The defendants and their wives also pledged to sell their family homes, as well as additional property, and to provide the proceeds of the sale of those assets to partially satisfy the defendants’ restitution obligations. 

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

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

PHILADELPHIA – Ramel Moten, 29, of Philadelphia, was sentenced today to life plus 130 years in prison for racketeering, attempted murder in-aid-of-racketeering and other charges connected to the activities of a violent drug gang called the “Harlem Boys.”  Moten and six other members of the gang, which operated in and around the Bartram Village Housing Development (“BVHD”) in Southwest Philadelphia, were convicted at trial on December 6, 2012.  The 13 other defendants charged in the 89-count indictment and one additional charged separately pleaded guilty.  Moten was a lead gunman, supplier and distributor of illegal narcotics for the enterprise.  He frequently provided firearms to the other members of the gang for use in robberies.  The gang committed crimes including attempted murder in aid of racketeering, robbery, carjacking, assault in aid of racketeering, threats in aid of racketeering, firearms offenses that include use of firearms during the commission of violent crimes and numerous substantive drug crimes, including conspiracy to distribute 280 grams or more of cocaine base.  The trial lasted 12 weeks.

Convicted at trial with Moten were: Reginald Stephens, Bryan Hill, Warren Stokes, Hikeem Torrence, Merrell Hobbs, and Khalil Allen.  Each faces a mandatory minimum prison term of 10 years with a maximum of life when sentenced. 

“The sentence imposed today sends a very clear message to gang members in our city that if you engage in violent behavior you will be investigated, prosecuted, and put behind bars for a very long time. ATF has a zero-tolerance policy towards career criminals who continually inflict senseless acts of violence in our neighborhoods,” said ATF Special Agent-in-Charge Sam Rabadi.  “Communities, like Bartram Village, can have an improved quality of life when violent predators are removed from our streets.”

In addition to the prison term, U.S. District Court Judge Lawrence Stengel ordered a $5,000 fine, a $3,100 special assessment and 10 years of supervised release.     

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 Attorneys Salvatore L. Astolfi and Katayoun Copeland.

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

Augst 29, 2013

PHILADELPHIA - Uri Jacobson, 42, of Philadelphia, was sentenced today to 30 months in prison for a tax fraud conspiracy that involved paying employees under the table and filing false tax returns. Jacobson, the co-owner of 12 shoe and discount stores doing business as Bare Feet Shoes, employed more than 200 people in Pennsylvania and New Jersey including Elena Falaschetti, 53, also of Philadelphia, who was a store manager and was indicted with Jacobson. Falaschetti was sentenced on May 20, 2013 to six months of home confinement. U.S. District Court Judge Lawrence F. Stengel also ordered Jacobson to pay restitution to the IRS in the amount of $1,263,000 and ordered one year of supervised release.

Between 2003 and 2009, Jacobson decided to pay some of his employees, in whole or in part, “under the table,” that is, without federal income taxes and federal Social Security and Medicare taxes being withdrawn from their wages and paid to the IRS. Jacobson caused his office employees, including Falaschetti, to falsely report salary, hours, and/or wages per hour for certain employees to the company’s payroll service. Jacobson’s own corporate records show that between 2004 and approximately September 2009, Bare Feet Shoes paid out a total of approximately $2,787,640 in gross wages which were not reported to the IRS and from which federal income taxes and Social Security and Medicare taxes were not withheld and paid to the IRS. Jacobson’s failure to withhold and pay over his employees full federal taxes, and his failure to pay his employer’s matching share of the Social Security and Medicare taxes, caused a tax loss of approximately $596,628.

Jacobson, who pleaded guilty on September 5, 2012, filed false tax returns for 2004, 2006, 2007, and 2008 and failed to file a personal income tax return for 2005, under-reporting his income by approximately $700,000. Falaschetti, who also pleaded guilty on September 5, 2012, filed false personal income tax returns for tax years 2006 through 2009, under-reporting her income by approximately $121,000.

The case was investigated by the Internal Revenue Service Criminal Investigations and was prosecuted by Assistant United States Attorney Paul Gray.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Antonio Smith-Valera, a/k/a “Antonio Smith,” 56, and Moise Calzadilla, a/k/a “Cuba,” 39, both of Philadelphia, Pennsylvania was charged by Indictment today with conspiracy to distribute cocaine, distribution of cocaine, and attempted distribution of cocaine, announced United States Attorney Zane David Memeger. Smith-Valera was additionally charged with possession with intent to distribute crack, cocaine, and heroin; possession of firearm in furtherance of drug trafficking crime; and possession of firearm by convicted felon.

If convicted, Smith-Valera faces a maximum of life imprisonment, a mandatory minimum of 15 years imprisonment, a minimum of eight years of supervised release up to a lifetime of supervised release, a $21,500,000 fine, a $600 special assessment, and forfeiture. If convicted, Calzadilla faces a maximum of 80 years imprisonment, a mandatory minimum of 5 years imprisonment, a minimum of four years of supervised release up to a lifetime of supervised release, a $6,000,000 fine, a $300 special assessment, and forfeiture.

The case was investigated by the Drug Enforcement Administration and the Montgomery County Narcotics Enforcement Team. It is being prosecuted by Assistant United States Attorney Ewald Zittlau.

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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA – Luis Ramos, 35, of Philadelphia, was sentenced yesterday to 108 months in prison for his role in an illegal gun trafficking operation.  Ramos was charged with six other defendants who were using Ramos’ house, in the 2000 block of East Atlantic Street in Philadelphia, as a center for illegal gun sales.  Between February 2011 and August 2012, on multiple occasions, one or more of the co-conspirators agreed to sell a buyer a gun and, when the buyer pulled up in front of Ramos’ house, or other locations, delivered the gun to the buyer’s car window.  In addition to Ramos’ house, the defendants were using a storage facility, in the 3500 block of North B Street, and a clothing store, in the 3900 block of Kensington Avenue, for purposes of conducting their illegal gun sales.  The operation was brought to a halt by an undercover investigation involving the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Ramos pleaded guilty to conspiracy, gun trafficking, unlawfully making a weapon from a shotgun, two counts of unlawfully transferring a firearm, unlawful possession of a short-barreled shotgun, and 21 counts of being a felon in possession of a firearm.  Ramos’ co-defendants Ruben Ramos, Dalvi Rodriguez, and Jim Cruz are awaiting sentencing; Co-defendants Daniel Ruiz, Hector Ortiz, Eddy Delacruz, and Miguel Massa are awaiting trial.  In all, their operation sold 43 guns illegally, plus ammunition.
Ramos and his co-defendants were arrested with several other defendants charged in separate indictments as a result of the ATF investigation which also resulted in the seizure of more than five dozen guns and hundreds of rounds of ammunition.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and is being prosecuted by Assistant United States Attorney Joseph Labar.

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

Horng Dai, a/k/a “James Dai,” 46, of Newtown, PA, was charged today by Indictment1 with seven counts of receipt of commissions or gifts for procuring loans, announced United States Attorney Zane David Memeger.

If convicted on all counts, the defendant faces a maximum possible sentence of 65 years imprisonment, a $2.5 million fine, not more than five years of supervised release and a $325 special assessment.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Linwood C. Wright, Jr.

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1  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, filed August 21, 2013, was unsealed today charging Joseph Torres, 31, Bertin Sanchez, 29, Euddy Izquierdo, 31, and Frank Felix-Herrera, 49, all of Philadelphia, with membership in a conspiracy to distribute one kilogram or more of heroin, announced United States Attorney Zane David Memeger. All four defendants are charged as members of a conspiracy that allegedly distributed more than 500 kilograms of heroin produced by a Mexico-based heroin distribution organization. The drugs were sold and distributed in Philadelphia between the Spring of 2010 and July 19, 2013. Torres, Sanchez and are further charged with possession with intent to distribute, and aiding and abetting possession with intent to distribute 12 kilos of heroin, which was seized from the organization’s heroin stash house located at 3901 City Line Avenue. Izquierdo is charged with possession to distribute 21 kilos of heroin; and Felix-Herrera is charged with possession with intent to distribute 2 kilos of heroin.

The indictment further charges that defendant Torres coordinated and supervised the transportation and delivery of the from Mexico to Philadelphia where he oversaw distribution of kilogram quantities of heroin by defendant Sanchez. Torres also allegedly collected and supervised the storage, transportation and laundering of drug proceeds for the organization, accounted to the leaders of the organization, and ensured that drug proceeds were laundered transmitted, and transported to the leadership in Mexico using various money laundering techniques. It is further charged that Sanchez received, arranged and supervised the storage and distribution of kilogram to multi-kilogram quantities of heroin distributed by the Mexico-based organization’s Philadelphia distributors. It is alleged that at the time of defendant Sanchez’s arrest on July 19, 2013, Sanchez had recently distributed approximately 39 kilograms of heroin for the organization and was awaiting cash payments from Philadelphia area heroin distributors.

The indictment also alleges that defendant Izquierdo and Felix-Herrera served as distributors for the Mexico-based heroin trafficking organization and was responsible for the distribution of kilogram to multi-kilogram quantities of heroin in the Philadelphia area. At the time of Izquierdo’s arrest, he was found in possession of $105,118.56 representing alleged drug proceeds. The indictment further charges that Izquierdo also coordinated the transfer of heroin from Mexico and Chicago, Illinois to the Philadelphia region, using vehicles with concealed compartments intended for carrying drugs and drug proceeds.

According to the indictment, at the time of Torres’ arrest on July 19, 2013, at an apartment at 7801 Roosevelt Boulevard, agents found $19,319 in alleged drug proceeds, as well as a smashed electronic money counter and a heat sealer used in the packaging of drug proceeds. In addition, Torres was found to be in possession of a black Saturn automobile which contained a hidden, electronically controlled compartment that contained $89,920 in United States currency.

If convicted of all charges, each of the defendants faces a maximum penalty of life in prison with a mandatory minimum term of 10 years, at least five years of supervised release, and a fine of up to $20 million.

The case was investigated by the Drug Enforcement Administration and is being prosecuted by Assistant United States Attorney Joseph T. Labrum, III.

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

PHILADELPHIA - Andrew Bogdanoff, 66, of Scottsdale, Arizona, pleaded guilty today to charges stemming from an advance fee scheme that defrauded hundreds of victims searching for commercial financing. The scheme defrauded more than 800 victims out of more than $10 million. Bogdanoff pleaded guilty to conspiracy to commit mail and wire fraud, mail fraud, wire fraud, money laundering, conspiracy to defraud the United States, and filing false tax returns. He faces an advisory sentencing guideline range of at least 121 months to 151 months in prison. A sentencing hearing is scheduled for December 4, 2013.

Charged in the 33-count indictment with Bogdanoff were Matthew McManus, 44, of Glenside, Pennsylvania, Shayne Fowler, 28, of Scottsdale, Arizona, Joel Nathanson, 26, of San Diego, California, Frank Vogel, 48, of Rochester Hills, Michigan, and Aaron Bogdanoff, 25, of Scottsdale, Arizona.

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

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

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

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

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

Co-defendants Joel Nathanson and Shayne Fowler have pled guilty and are awaiting sentencing.

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

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA - Marc Viney, 35, of Norristown, was sentenced today to 264 months in prison for robbing an employee of the Roo House Tavern in Norristown and then robbing the tavern. Viney was convicted on January 31, 2013, following a four day trial, of robbery, criminal conspiracy to commit robbery, and possession of a firearm in furtherance of a violent crime.

On July 10, 2011, Viney followed home an employee of the Roo House Tavern, after the employee closed the bar for the night. At the victim's apartment, Viney confronted the victim, bound, gagged, blindfolded, and assaulted him, while holding him at gunpoint. Viney then stole money and a laptop from the victim’s home. Viney then forced the victim to go back to Roo House Tavern, where Viney stole several thousand dollars in proceeds from the Tavern.

In addition to the prison term, seven years of which is mandatory, U.S. District Court Judge Mary McLaughlin ordered restitution to the victims in the amount of $3,537 and five years of supervised release.

The case was investigated by the FBI, the Montgomery County Detective Bureau and members of the Norristown Police Department. It was prosecuted by Special Assistant United States Attorney Rebecca W. Strubel.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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David Mermelstein, 53, of Willow Grove, Pennsylvania, was charged today by Indictment with five counts of illegal removal of asbestos, announced United States Attorney Zane David Memeger. The indictment alleges that from in or about September, 2009 through in or about April, 2010, Mermelstein hired day laborers instead of licensed asbestos contractors to remove asbestos from commercial property he owned at 10175 Northeast Avenue, Philadelphia. The indictment alleges that Mermelstein directed the removal of asbestos by these laborers without safeguards required by federal law.

If convicted, the defendant faces a maximum possible sentence of 25 years imprisonment and a fine of $1.25 million.

The case was investigated by the Environmental Protection Agency (“EPA”) and the City of Philadelphia’s Air Management Services. It is being prosecuted by Assistant United States Attorney Virgil B. Walker and Special Assistant United States Attorney Patricia Miller.

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

PHILADELPHIA - An indictment was unsealed today charging nine people in a loan sharking and illegal gambling ring allegedly run out of several Philadelphia businesses.  Ylli Gjeli, 48, Fatimir Mustafaraj, 41, George Markakis, 43, Gezim Asllani, 34, Rezart Rahmi Telushi, 40, Eneo Jahaj, 26, Ardit Pone, 35, all of Philadelphia, PA, Erion Murataj, 35, of Huntingdon Valley, and Brian Jackson, 35, of Harleysville, were arrested this morning.  They are named in an indictment charging racketeering conspiracy, racketeering collection of unlawful debt, making extortionate extensions of credit, collections of extensions of credit by extortionate means, operating an illegal gambling business, and possession of a firearm in furtherance of a crime of violence. 

The charges were announced by United States Attorney Zane David Memeger, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, FBI Special Agent-in-Charge Ed Hanko and Special Agent-in-Charge of IRS Criminal Investigation Akeia Conner. 

According to the indictment, the defendants and their associates used businesses located in Philadelphia - including the Lion Bar & Grill, Blackbird Café, “Ylli’s 2 Brothers,” First England Pizza, and various coffee shops, among others - to conduct the enterprise’s loan sharking activities and illegal gambling business.  The defendants allegedly generated money by making and collecting on loans with usurious rates of interest; using intimidation, threats, and violence to make and collect on loans; and making loans to betting customers whose debts were incurred through the enterprise’s illegal gambling business. 

Members and associates of the enterprise allegedly cultivated their reputation for violence by threatening customers with dangerous weapons such as a firearm and hatchet; using implied threats and intimidation; telling customers that if they did not pay their debts someone would kill them, “break your legs,” or physically harm them or their family members in some other way; and physically assaulting subordinate members and associates. 

It is further alleged that the defendants attempted to conceal the existence and operations of the enterprise from law enforcement by: limiting their discussions of criminal activities when on the phone, using cryptic and coded language to describe criminal activities, such as “pizza” to describe a loan; conducting pat-downs and body searches of customers to check for weapons and recording devices; and conducting the enterprise’s transactions primarily in cash.

“The indictment charges the defendants with running a violent loan sharking and gambling enterprise, using intimidation, threats, and actual violence as part of their illegal business,” said Memeger.  “We will not tolerate this type of criminal activity that preys upon financial weakness and threatens the physical safety of the individuals in debt and their innocent family members.”

“The indictment unsealed today charges nine defendants with operating a criminal enterprise built on illegal gambling and a violent extortion racket,” said Acting Assistant Attorney General Raman.  “The Justice Department will not stand by as criminal organizations victimize our communities.  Today’s charges demonstrate our ongoing commitment to working alongside our federal, state and local counterparts to root out organized crime.”

“The defendants allegedly victimized people twice over,” said FBI Special Agent in Charge Hanko.  “They provided loans at outrageous interest rates to those unable to obtain loans from traditional sources and then used threats and violence to collect on those illegal loans.  Today's arrests demonstrate the FBI’s continued commitment to ridding Philadelphia of organized crime, wherever we find it.”

“Individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable,” said Special Agent-in-Charge of IRS Criminal Investigation Akeia Conner. “IRS Criminal Investigation is committed to ‘following the money trail’ to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice.”

According to the indictment, Gjeli was a leader and “boss” of the organization; Mustafaraj, a/k/a “Tony,” was a leader and “muscle.”  Both allegedly directed other members in the loan sharking activities and illegal gambling business, approved loans, used intimidation and threats of violence against customers, collected weekly loan payments, physically assaulted subordinate members and associates, supervised the illegal gambling business, provided cash to pay customer’s gambling wins and otherwise financed the gambling business, collected gambling debts, and made loans to customers whose debts were incurred through the illegal gambling business.  Markakis, a/k/a “George the Greek,” a/k/a “Fat George,” was allegedly a leader of the enterprise who directed other members in the illegal gambling business.  Defendants Murataj, a/k/a “Ben,” a/k/a “Paul,” and Asllani, a/k/a “Sam,” were allegedly “collectors” who assisted Gjeli and Mustafaraj in making loans and regularly collected weekly loan payments from customers.  Defendant Telushi, a/k/a “Luigi,” was allegedly a “collector” who regularly collected weekly loan payments from customers.  Defendants Jahaj, a/k/a “Nimo,” Brian Jackson, a/k/a “Mark,” and Ardit Pone were allegedly “bookies” who operated parts of the illegal gambling business and regularly collected gambling debts.  Jahaj and Jackson also set up and administered online accounts to facilitate customer betting and used the enterprise’s loan sharking activities to convert the gambling debts to loans.

If convicted of all charges, defendants Gjeli and Mustafaraj face a maximum possible sentence of life in prison.  The remaining defendants each face a maximum possible sentence of 20 years imprisonment.

The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigations, Immigration and Customs Enforcement Homeland Security Investigations, Pennsylvania State Police, Montgomery County Detectives, and the New Jersey State Police.  It is being prosecuted by Assistant United States Attorney Salvatore L. Astolfi and Trial Attorney Jerome Maiatico from the Department of Justice Organized Crime & Gang Section.

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An indictment is an accusation, and defendants are 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 – George Baginyan, 33, of Glendale, California, was sentenced to two years in prison for operating a fraudulent clinic and defrauding Medicare.  Baginyan was the owner of New Era Health Center Inc. (“New Era”), a purported clinic that was located near the Einstein Medical Center in Philadelphia.  Between December 2008 and October 2009, Baginyan used the National Provider Identification number (NPI) of an elderly and frail doctor of osteopathy to bill Medicare for medical services and tests, making it appear that the doctor had provided those services and tests when he had not.  The doctor had, in fact, never set foot in New Era.  In total, Baginyan caused the submission of fraudulent bills to Medicare totaling more than $250,000, which resulted in payments from Medicare totaling $132,848.81.  On October 15, 2012, Baginyan pleaded guilty to 10 counts of health care fraud and 10 counts of making false claims to the government.  At his plea hearing, Baginyan admitted that he was fully aware of the fraud he was committing when he submitted the phony claims.

In addition to the prison term, U.S. District Court Judge Mitchell S. Goldberg ordered restitution to Medicare in the amount of $132,848.81, a special assessment of $2,000, and three years of supervised release.

“George Baginyan traveled from California to set up a fraudulent Medicare business in Philadelphia where he stole a physician's identity; submitted false claims for unnecessary, substandard medical procedures; and robbed our Medicare program of more than $100,000,” said Special Agent-in-Charge Nick DiGiulio with the Inspector General’s Office of the United States Department of Health and Human Services in Philadelphia.  “Other fraudsters should make note of the sentence in this case and should know that HHS-OIG will continue to pursue those who steal from our government health insurance programs.”

The case was investigated by the United States Department of Health and Human Services Office of Inspector General Office of Investigations.  It was prosecuted by Assistant United States Attorney Mary E. Crawley.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525

Walter Morgan a/k/a “Walter E. Morgan Gomez,” 34, of Baltimore, MD, was charged today by Indictment with one count of fraudulent use of a social security number and one count of making a false statement, announced United States Attorney Zane David Memeger.  In particular, the indictment charges the defendant with using a social security number that did not belong to him, and falsely claiming United States citizenship on an I-9 Form in order to obtain employment.

If convicted, Morgan faces a maximum sentence of 10 years imprisonment, a three-year term of supervised release, a $500,000 fine, and a $200 special assessment.

The case was investigated by the United States Department of Labor, Office of Inspector General,  Social Security Administration, Office of Inspector General, the Federal Bureau of Investigation, the U.S. Department of Transportation, Office of Inspector General, and Immigration and Customs Enforcement Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Paul G. Shapiro.

An indictment is an accusation, and defendants are presumed innocent unless and until proven guilty.

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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525

Harry Michael Schiech, 30, of Philadelphia, Pennsylvania was charged today by indictmentwith bank robbery and attempted bank robbery, announced United States Attorney Zane David Memeger.

According to the indictment, on May 18, 2013, Schiech robbed the Citizens Bank branch at 2702 Kirkbride Street, in Philadelphia and, on May 24, 2013, attempted to rob the Bank of America branch at 2439 Welsh Road in Philadelphia.

If convicted of all charges, the defendant faces a maximum possible sentence of 40 years in prison.

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

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

PHILADELPHIA - Mark Olkowski, 62, of North Wildwood, NJ, was sentenced today to three months in prison for filing false personal income tax returns with the Internal Revenue Service from 2006 through 2009 and wire fraud.  Olkowski, a business partner in K & O Sporting Goods on Moyamensing Avenue in Philadelphia, pleaded guilty on April 24, 2013 to the tax charges and to 15 counts of wire fraud committed upon the Pennsylvania State Unemployment Compensation system.  K & O is a distributor of t-shirts and other clothing items to labor unions, municipalities, and political candidates.  

Between 2006 through 2009, Olkowski failed to report a total of approximately $148,000 of income to the IRS.  The unreported income included significant sums of cash received by K & O but which Olkowski pocketed and did not deposit to K & O business accounts.  It also included income he received from making personal expenditures using corporate credit cards.   The tax loss on this unreported income is approximately $25,000.

Olkowski made two false applications for unemployment compensation benefits.  In his applications, Olkowski falsely claimed to have been laid off from K & O, and did not tell unemployment compensation authorities that he was an owner of K & O Sporting Goods and that he was receiving income from K & O while he was applying for unemployment benefits.   The loss to the unemployment compensation system is approximately $16,000.

In addition to the prison term, U.S. District Court Judge Harvey Bartle III ordered Olkowski to pay restitution to the IRS in the amount of $56,459, which he has paid, and to the Pennsylvania State Unemployment Compensation system in the amount of $16,046, a fine of $15,000, a $1,900 special assessment, and two years of supervised release.

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

PHILADELPHIA - Pennsylvania State Trooper Kelly Cruz, 43, of Oxford, Pennsylvania, was charged in a one count indictment, unsealed today, with deprivation of civil rights, announced United States Attorney Zane David Memeger.

The indictment alleges that on August 9, 2009, Cruz, while working as a State Trooper, kicked Z.B. in the back of the head as Z.B. was lying face down on the floor in handcuffs. As a result of the kick, Z.B. suffered bodily injury that required surgery to repair his teeth.

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

The case was investigated by FBI-Newtown Square Office and is being prosecuted by Assistant United States Attorneys L.C. Wright and Maureen McCartney.

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 was unsealed today charging Bernard Corbin, 46, of Philadelphia, PA, with conspiracy to transport stolen property in interstate commerce and transportation of stolen property in interstate commerce, announced United States Attorney Zane David Memeger. The indictment charges that in 2012 Corbin used a company named Simply Green to steal large quantities of used cooking oil.

If convicted the defendant faces a maximum possible sentence of fifteen years imprisonment, three years supervised release, a $500,000 fine, and a $200 special assessment.

The case was investigated by the Federal Bureau of Investigation, the Ridley Township Police Department, the Bensalem Police Department, the Hilltown Police Department, the Newtown Square Police Department, the Marple Township Police Department, the Philadelphia Police Department, and the Media Police Department, 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