Northern District of Texas

DALLAS - On Wednesday, Gary Beach, 66, of Dallas, Texas, was convicted of four bankruptcy related felony counts following a seven-day trial before U.S. District Judge David Godbey. The announcement was made by Tanya K. Pierce, Acting United States Attorney for the Northern District of Texas.

According to evidence presented at trial, Beach obtained a $857,500 home and tried to hide $15,000 in monthly payments before he filed for bankruptcy protection from an $812,000 debt created by a lawsuit that Beach brought and lost.

Specifically, following an $812,000 loss in a civil trial in Harris County, Texas, Beach used a trust fund created by his father to hide payments that he was receiving for continuing to work in the oil and gas industry.  Beach signed an agreement with Black Horse Resources (owned by his brother-in law in Utah) to perform consulting work in the development of an oil field.  This participation agreement obligated Black Horse to pay a $15,000 monthly management fee for the services.  However, the agreement purported to have Beach performing the services on behalf of his father’s Beach 2010 Trust.  As the sole trustees and beneficiaries of the trust, Beach and his son had complete control over the money and it was channeled to pay Beach’s living expenses of nearly $10,000 a month.  Three months later, Beach formed Beach Petroleum, LLC, with himself as sole manager.  That same day, Beach had the trust transfer its interest in the participation agreement to Beach Petroleum, so that all future $15,000 monthly consulting fee payments could be made to Beach Petroleum.  As sole manager of Beach Petroleum, Beach had direct control over the $15,000 payments. 

Before Beach filed for bankruptcy, Black Horse paid $120,000 in consulting fees to either Beach directly or to Beach indirectly through payments to Beach Petroleum.  The payments continued and reached $210,000 before Beach’s last deposition.  Beach did not disclose any of this money until he was confronted with documentary proof of their existence under cross-examination during a bankruptcy deposition.  Even then, the payments continued and approached half a million dollars. 

Three days before Beach filed for bankruptcy protection, he also used the trust to purchase a residence in Highland Park, Texas for $857,500.  Additional monies were then spent on improvements to the house until it was worth almost $1 million dollars. 

The United States Trustee’s Office referred Beach’s false statements to the United States Attorney’s Office.  After an investigation and trial, Beach was convicted of three separate counts of the felony offense of Making False Statements Under Penalty of Perjury for certain bankruptcy documents that he filed omitting the $15,000 payments.  Beach was also convicted of Making a False Oath for giving intentionally false testimony about the payments from Black Horse Resources during one of his bankruptcy depositions.

For each count of conviction, Beach faces a maximum penalty of 5 years in federal prison and a $250,000 fine.  Beach will remain on bond pending sentencing, which is set for June 4, 2018.

This case was investigated by the United States Postal Inspection Service and was prosecuted by Assistant United States Attorneys, David Jarvis and Walt Junker.

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At an investiture ceremony held this afternoon, Chief Judge Barbara M.G. Lynn of the U.S. District Court for the Northern District of Texas administered the Oath of Office for United States Attorney to Erin Nealy Cox.

Today’s formal ceremony, over which Chief Judge Lynn presided, was attended by hundreds of family members, friends and colleagues, as well as federal, state, and local dignitaries. Guest speakers included Chief Judge Barbara M.G. Lynn and Judge Jane J. Boyle of the U.S. District Court for the Northern District of Texas, and Rachel Brand, former Associate Attorney General for the U.S. Department of Justice.  Remarks were also given by U.S. Senator John Cornyn and U.S. Senator Ted Cruz. The invocation was given by Father Arthur Unachukwu and the benediction was given by Cate Cox, the daughter of U.S. Attorney Nealy Cox.   

Other honored guests attending included former White House Counsel Harriet Miers, Chancellor Kent Hance, as well as, former United States Attorneys Paul Coggins, John Parker, Jim Jacks, Richard Roper, Richard Stephens, Jim Rolfe, and Matthew Orwig.

United States Attorney Nealy Cox was nominated by President Donald Trump on September 22, 2017 and confirmed by the U.S. Senate on November 9, 2017.       

Ms. Nealy Cox, a Mississippi native, most recently worked as a Senior Advisor at McKinsey & Co. in the cybersecurity and risk practice. She also served on the Board of Directors of Sally Beauty Holdings, a large retailer on the NYSE. From 1999 to 2008, Ms. Nealy Cox served as an Assistant United States Attorney in the Northern District of Texas, where she prosecuted cyber crimes, white collar crimes, and general crimes. In 2004 and 2005, she served at Main Justice as chief of staff and senior counsel to the Assistant Attorney General in the Office of Legal Policy. From 2008 to 2016, Ms. Nealy Cox was a member of the executive leadership team at Stroz Friedberg, a cybersecurity and investigations consulting firm. Ms. Nealy Cox ultimately lead the firm’s global incident response business, the unit responsible for assisting and supporting private sector corporations investigate complex computer intrusions. Ms. Nealy Cox clerked for the Honorable Henry A. Politz, when he served as Chief Judge of the United States Court of Appeals for the Fifth Circuit, and the Honorable Barefoot Sanders, United States District Judge in the Northern District of Texas.

As U.S. Attorney, Ms. Nealy Cox is the top-ranking federal law enforcement official in the Northern District of Texas, which includes Dallas, Fort Worth, Lubbock and Amarillo. She oversees a staff of 215 employees, including 100 attorneys and a similar number of non-attorney support personnel.

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DALLAS — Following a collaborative effort by the Dallas Police Department and United States Postal Inspection Service, with assistance from the Federal Bureau of Investigation, Donnie Arlondo Ferrell, 25, of Hutchins, Texas, is in federal custody on a federal criminal complaint for the February 19, 2018 murder of a United States Postal Service employee. The announcement was made today by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Ferrell is charged with one count of murder of an officer or employee of the United States or of any agency in any branch of the United States government, while such officer or employee was engaged in or on the account of the performance of official duties. Ferrell will make his initial appearance today before U.S. Magistrate Judge Rebecca Rutherford.

“While our family of federal employees is saddened by the tragic loss of one of our own, I am proud of the cooperative effort by our federal and local law enforcement partners to solve this heinous crime, especially the United States Postal Inspection Service and the Dallas Police Department,” said U.S. Attorney Nealy Cox.   “With this arrest, we take a crucial step towards ensuring that the person allegedly responsible for this senseless murder is brought to justice.”

“On behalf of the U.S. Postal Inspection Service, I would like to extend our deepest sympathy to the Mosby family for the tragic loss of their loved one,” said Thomas Noyes, Inspector in Charge of the Fort Worth Division, U.S Postal Inspection Service. “The cooperation among federal and local law enforcement agencies in this matter is a prime example of how we work best when we work together. I would like to thank the dedicated Postal Inspectors and staff as well as the Dallas Police Department, our federal partners, and U.S. Attorney Erin Nealy Cox and her staff for their dedication and partnership in seeing this case brought to prosecution.”

According to the affidavit filed with the criminal complaint, on February 19, 2018, shortly after 2:00 a.m., an United States Postal Service (“USPS”) employee left the Dallas Main Post Office in a USPS box truck.  Minutes later, at least three gunshots were fired at the USPS employee and his truck.  One of the shots fatally struck him in his head.

On the morning of February 21, 2018, two individuals visited the FBI’s office in Fort Worth, Texas, and stated that they had information related to the killing.

According to interviews of the two individuals, on the night of February 18, 2018, they met two other individuals, including Ferrell, at a restaurant in Dallas, Texas. Later that night, after several stops, all four of these individuals left a pool hall in Dallas at approximately 1:30 a.m. in the early morning of February 19, 2018.  Ferrell was sitting in the front passenger seat of the vehicle.

According to additional information provided during the interview, the driver of the vehicle began driving erratically and, at one point, was right behind a large USPS truck.  The driver attempted to drive the vehicle around the USPS truck by passing it on the truck’s left hand side.  Moments later, Ferrell fired several shots from a handgun in the direction of the USPS truck. The occupants of the vehicle observed smoke and sparks coming from the truck and the truck eventually crashing into the barrier. One of the occupants asked Ferrell why he had shot the gun toward the truck and Ferrell responded that the driver of the USPS truck had made a hand gesture towards their vehicle and that angered him.  

A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The penalty for the offense as charged is any terms of years or for life and a $250,000 fine.

The case is being prosecuted by Assistant U.S. Attorneys P.J. Meitl, Keith Robinson, Nicole Dana, Errin Martin, and Brian Portugal.

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DALLAS - The University of North Texas Health Science Center (UNTHSC) has agreed to pay the United States $13,073,000.00 to settle claims that it inaccurately measured, tracked and paid researchers for effort spent on certain NIH-sponsored research grants, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

UNTHSC is a health-related institution of the University of North Texas System and is a recipient of National Institutes of Health (NIH) Federal research grant funding.  The settlement results from a self-disclosure by UNTHSC to the United States that from January 2011 through February 2016, UNTHSC failed to ensure that its time and effort reports related to certain federally-funded grants were accurately and timely certified.

UNTHSC, as a recipient of NIH grant funds, is responsible for accurately reporting and certifying time and effort spent on these grants. Under these obligations, UNTHSC was required to demonstrate accuracy through records that accurately reflect the work performed and an appropriate system of internal controls.  UNTHSC failed to meet these requirements, and as a result, received payments for inaccurately and untimely time and effort certifications and received salary payments when the correlating payments did not match the accompanying time and effort reports.  The United States contends that this conduct resulted in false claims being submitted to the government.  UNTHSC fully cooperated in the investigative and settlement process. 

The investigation was conducted by Health and Human Services Office of Inspector General and the United States Attorney’s Office for the Northern District of Texas.  Assistant U.S. Attorney Lindsey Beran handled this matter on behalf of the United States.

 

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DALLAS — A federal grand jury in Fort Worth returned a superseding indictment this week, charging Said Azzam Mohamad Rahim, 41, of Richardson, Texas, with seven counts related to a terrorism investigation, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas and Eric Jackson, Special Agent in Charge of the Dallas Field Office of the FBI.

The indictment supersedes an earlier indictment returned in the case. Rahim is charged with six counts of false statements to a federal agency and one count of attempting to provide material support to a designated foreign terrorist organization, namely the Islamic State of Iraq and al-Sham (ISIS).

Rahim was arrested in March 2017 on a related criminal complaint and will remain in custody pending trial. The maximum statutory penalty for each false statement count is eight years in federal prison, a period of supervised release, and a $250,000 fine. Rahim faces not more than 20 years in federal prison and a possible fine for attempting to provide material support to a designated foreign terrorist organization. 

“Our highest priority is to pursue justice against those who seek to harm our country and our citizens,” said U.S. Attorney Erin Nealy Cox.  “I appreciate the outstanding work by the Dallas FBI and the support of the Department’s National Security Division.”

The indictment alleges that Rahim made a number of false statements to federal law enforcement on March 5, 2017 related to his support for ISIS.. The indictment also alleges, beginning in October 2014 and continuing through March 2017, Rahim attempted to provide material support or resources, including services and personnel, to ISIS.

The Federal Bureau of Investigation is responsible for this investigation, specifically its Joint Terrorism Task Force which includes Richardson Police Department, Dallas Police Department, Department of Homeland Security, Department of State Diplomatic Security Service, and the Federal Air Marshal Service. Assistant United States Attorney Errin Martin is prosecuting the case with assistance from Taryn Meeks with the Department of Justice National Security Division’s Counterterrorism Section.

The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes.  If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors

 

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FORT WORTH — Garland Gilmore Lenoir III, 52, of Oklahoma City, Oklahoma, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to serve a total of 221 months in federal prison, following his guilty plea in October 2017 to his role in a conspiracy to rob Haltom’s Jewelers in Grapevine, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Lenoir pleaded guilty to one count of interference with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence. He has been in custody since his arrest in July 2017.

Co-defendants, Melvin Lewis Andrews and Willie Thompson Jr. previously pleaded guilty to their roles and were sentenced by Judge O’Connor to 188 and 262 months in federal prison, respectively.  

According to plea documents filed in the case, on October 3, 2014, the defendants traveled to Haltom’s Jewelers in a stolen vehicle and entered the store wearing masks and carrying handguns and hammers. They smashed the display cases with the hammers and stole merchandise, to include jewelry and watches. 

The FBI and Grapevine Police Department investigated the case.  Special Assistant U.S. Attorney Dan Cole was in charge of the prosecution.

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FORT WORTH, Texas — Dion Clark, 36, of Fort Worth, Texas, was sentenced yesterday by U.S. District Judge John McBryde to 25 years in federal prison, following his guilty plea in August 2017 to one count of conspiracy to interfere with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Co-defendant’s Darrien Jefferson, aka “Smoke,” Nicholas Evans, aka “Nico,” and  Kenneth Sauls, aka “Smurf,” were charged separately and previously sentenced by U.S. District judge Reed O’Connor.

According to the factual resumes filed in the case, on April 9, 2016, Clark, Evans, Jefferson, and Sauls entered into an agreement to commit a robbery at the Walgreens Pharmacy located at 833 South Wilshire Blvd., Burleson, Texas. Clark waited in the vehicle as the get-a-way driver while Evans, Jefferson and Sauls entered the Walgreens, brandished firearms and “zip” tied the victims’ hands and feet. Collectively the group stole narcotics, cash, cigarettes, and approximately 150 booklets of stamps.

The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Fahey prosecuted.

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DALLAS — Thomas Glen Smith, 50, of Hamilton, Texas, was sentenced yesterday by U.S. District Judge Jane J. Boyle to 40 months in federal prison, following his guilty plea in August 2017 to one count of possession or sale of stolen firearms, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas. 

Philip Gary Slaughter, 42, was charged in a separate but related case and also pleaded guilty to his role. Slaughter was sentenced to 15 months in federal prison by U.S. District Judge Sidney A. Fitzwater.

According to plea documents filed in the case, Smith and Slaughter worked at the Ellis County Sherriff’s Office (ECSO) in the ECSO Evidence Room.  Their responsibilities included reorganizing the ECSO Evidence Room, where they had access to numerous firearms seized by the ECSO.  On November 18, 2015 Slaughter obtained a court order to destroy hundreds of the firearms in the ECSO Evidence Room.  Some of these firearms, however, were not destroyed and, instead, Smith and Slaughter sold approximately forty firearms taken from the ECSO Evidence Room. 

At various times in November and December, 2015, Smith and Slaughter pawned several firearms at various pawn stores in the Ellis County area.  The defendants would also use their Facebook accounts to sell firearms to individuals.  These firearms were either supposed to be in the possession of the ECSO Evidence Room or were listed in the destruction order.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Texas Department of Public Safety—Texas Ranger Division.  Assistant U.S. Attorneys Kate Rumsey, Joseph Magliolo, and Errin Martin prosecuted.

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DALLAS — Bilal Ahmed Khaleeq, 47, a Dallas attorney, appeared before U.S. Magistrate Judge David L. Horan yesterday and pleaded guilty to one count of conspiracy to commit marriage fraud, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Khaleeq will remain on supervised release pending sentencing, which is set for June 4, 2018. Co-defendant Amna Cheema, 37, a Pakistani national, previously pleaded guilty to her role in the scheme and was sentenced to time served.

According to the plea agreement and factual resume: in June 2015, Khaleeq and others knowingly and unlawfully conspired and agreed together and with each other to unlawfully facilitate and enter into a marriage between co-defendant, Amna Cheema and a United States citizen, Person A, for the purpose of evading immigration laws. Cheema and Person A were married in Dallas County, Texas and subsequently filed permanent residence applications with USCIS in July 2015.  In exchange for agreeing to marry Cheema, Person A was paid $745.   Co-defendant Cheema also admitted engaging in discussions with Khaleeq and Person A at Khaleeq’s law office on more than one occasion to discuss preparation for the USCIS interview and required documentary evidence including joint bank accounts, tax returns, and bills concerning their joint residence.  According to co-defendant Cheema, Khaleeq also represented the couple at the USCIS interview in April 2016 and advised them on additional evidence to make the marriage appear legitimate.    

U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated the case.  Special Assistant U.S. Attorney Lynn Javier prosecuted.

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DALLAS — Kris Landon Green, aka “#5,” 20, and Marcus Jackson, aka “Marty-Mar,” 23, both of Dallas, Texas, pleaded guilty yesterday before U.S. District Magistrate Judge Rebecca Rutherford to their role in a drug distribution group that operated within an area referred to as the “2600 Money Block” (4500 block of Maple Avenue in Dallas, Texas), announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas

Green, a member of the Dallas–based violent criminal street gang known as “YNB Stretchgang,” pleaded guilty to one count of conspiracy to distribute a Schedule II controlled substance (cocaine base) and one count of possession of a firearm by a user of a controlled substance.  Green faces not less than five years or more than forty years in federal prison and a $5,000,000 fine on the conspiracy count and not more than 10 years in federal prison and a $250,000 fine for the firearms count.  Green will remain in custody pending sentencing.

Jackson, pleaded guilty to one count of distribution of a Schedule II controlled substance (cocaine base). Jackson faces up to twenty years in federal prison and a $1,000,000 fine. Jackson will remain in custody pending sentencing.

“Gangs, such as YNB Stretchgang, that spread illegal drugs and wage violence in our community will be held accountable by the Department of Justice,” said U.S. Attorney Nealy Cox. “I commend the many law enforcement officers efforts who have dedicated enormous amounts of time and effort investigating and prosecuting this case.”

A thirty-three count superseding indictment was returned in December 2017 charging fifteen defendants, including Greene and Jackson. The superseding indictment alleges that beginning in January 2016, the defendants used an area in Dallas referred to as “2600 Money Block” to cut, package and distribute cocaine, crack cocaine, marijuana, methamphetamine and ecstasy/OxyContin pills to numerous customers. The proceeds from the sale of drugs were sometimes used to produce music videos glorifying acts of violence and promoting the lifestyle of “YNB Stretchgang” members and associates.  Those videos were often uploaded to YouTube or shared through social media.

According to the plea agreement factual resumes filed in Green’s and Jackson’s case, both defendants admit that beginning in March 2016, they were members of “YNB Stretchgang.” On multiple occasions during 2016 and 2017, Green, Jackson and other “YNB Stretchgang” members and associates produced and appeared in music videos glorifying acts of violence and promoting the lifestyle of “YNB Stretchgang” members. Green and Jackson distributed controlled substances including cocaine base and marijuana as a means to make money within the 4500 block of Maple Avenue in Dallas, Texas.

The Bureau of Alcohol Tobacco and Firearms, United States Marshal’s Service, and Dallas Police Department investigated the case. The case is being prosecuted by Deputy Criminal Chief Assistant U.S. Attorney Rick Calvert.

 

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AMARILLO, Texas — Miguel Angel Bravo-Farias, 41, an illegal immigrant, and Hector Terrazas, 25, of Amarillo, Texas, were sentenced yesterday by U.S. District Judge Sidney A. Fitzwater to 180 months and 156 months in federal prison, respectively, for their roles in a methamphetamine distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Both defendants pleaded guilty to one count of possession with intent to distribute 500 grams or more of methamphetamine. They have both been in custody since their arrest in June 2017 on a related federal criminal complaint.

Co-defendant Rogelio Xochitl Amparan, 29, pleaded guilty to his role in the conspiracy and was sentenced to 189 months in federal prison in December 2017. 

According to the plea agreement factual resume, on June 8, 2017, an operation was conducted to purchase 20 pounds of methamphetamine from Bravo-Farias and Terrazas. When law enforcement agents met with Bravo-Farias and Terrazas they were in possession of a box containing a large amount of methamphetamine and were arrested at the scene.

During the operation, Amparan was observed leaving Terrazas’ residence. He was stopped by law enforcement and arrested for having a suspended registration.

A search of Terrazas’ residence revealed 2 containers with crystal like residue and 34 empty glass bottles with crystal like substance on the spouts in a bedroom. In the refrigerator, there were multiple containers containing a total of approximately 5,498 grams of liquid methamphetamine. In the same room was a closet that was converted into a work station with drying equipment. The closet contained fans and opened igloo style containers. On the floor there were used plastic gloves and utensils that had crystal like substance on them. The residence was used as a conversion lab from liquid to crystal methamphetamine.

During an interview, according to the plea agreement factual resume, Amparan admitted that he was involved in the methamphetamine operation. Amparan stated that he received all the money from the sale of methamphetamine and transported the money back to his brother, who lives in Juarez, Mexico.

The Amarillo Police Department and the Drug Enforcement Administration investigated the case with assistance from the Randall County Sheriff’s Office, Potter County Sheriff’s Office, Texas Department of Public Safety and Potter County District Attorney’s Office.

Assistant U.S. Attorney Anna Bell prosecuted.  

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AMARILLO — Moises Jimenez, 39, of Amarillo, Texas, was sentenced today by U.S. District Judge Sidney A. Fitzwater to life in federal prison.  Jimenez was convicted of felony drug and firearm offenses in August 2017, following a four-day jury trial.  The announcement was made by U.S. Attorney Erin Nealy Cox for the Northern District of Texas.

Jimenez was convicted of one count of distribution and possession with intent to distribute cocaine, one count of distribution and possession with intent to distribute 500 grams or more of methamphetamine, and one count of possession of a firearm in furtherance of a drug trafficking crime.  Judge Fitzwater sentenced Jimenez to 240 months for the distribution of cocaine count, 60 months for the possession of a firearm count and life in federal prison without the possibility for parole for the distribution and possession of 500 grams or more of methamphetamine.

Jimenez has been in custody since the time of his arrest in December 2016.

The government presented evidence at trial that on January 20, 2015, the Amarillo Police Department executed a search warrant at Moises Jimenez’s apartment.  A search of the apartment yielded one kilogram of methamphetamine, almost 300 grams of cocaine, a Lorcin, .25 caliber pistol, approximately $22,000 in cash, and drug trafficking paraphernalia.  During post-arrest interviews with a detective of the Amarillo Police Department, Jimenez admitted to possessing the controlled substances and firearm.  He also admitted that he had delivered 50 pounds of methamphetamine less than a week before officers executed the search warrant.  A search of Jimenez’s cell phones yielded text messages consistent with drug trafficking.  Further, recorded telephone calls made by Jimenez while he was in jail corroborated his involvement in drug trafficking.

The Amarillo Police Department investigated the case with the assistance of the Drug Enforcement Administration.  Assistant U.S. Attorneys Russell Lorfing, Sean Long, and Sean Taylor prosecuted the case.  

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DALLAS — Jose Humberto Solis, 39, of Farmers Branch, Texas, was sentenced last week by U.S. District Judge Jane J. Boyle to serve a total of 128 months in federal prison following his guilty pleas in January 2016 and September 2017 to drug offenses as charged in two Northern District of Texas cases, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

In one case, Solis pleaded guilty to one count of possession with intent to distribute a Schedule I controlled substance (heroin).  He received 128 months on that drug conviction. 

In the subsequent case, Solis pleaded guilty to one count of conspiracy to distribute a Schedule I controlled substance (heroin) and one count of conspiracy to commit money laundering and was sentenced to 128 months in federal prison.  That sentence will run concurrently to the first sentence imposed.

In the first case, between August 31, 2015 and September 1, 2015, Solis possessed and agreed to sell kilogram quantities of heroin. Specifically, on September 1, 2015, Solis traveled to a Target store located in Farmers Branch, Texas, with the specific intent to distribute one kilogram of heroin. After arriving at the Target, Solis was detained by law enforcement agents and the one kilogram of heroin was seized from his vehicle.

According to the plea agreement factual resume filed in the subsequent case, in 2013, agents with the Drug Enforcement Administration began an investigation into heroin sales in the Ninth Ward of New Orleans, Louisiana. Solis was identified as facilitating the distribution of heroin in the Ninth Ward of New Orleans by supplying heroin he obtained in Dallas, Texas.

On December 19, 2014, a Louisiana State Police Trooper observed a white Honda Civic travelling on Interstate 10 in Jefferson Parish, Louisiana. The Trooper observed the vehicle’s driver swerving in and out of his lane and onto the shoulder of the freeway. The Trooper pulled the vehicle over for illegal use of traffic lanes. Solis was identified as the passenger of the vehicle. The trooper observed both the driver and Solis appearing very nervous. Based on his observations, the Trooper believed that the occupants may be engaged in illegal activity. Solis refused to give consent to search and a K-9 unit was requested. The K-9 alerted to narcotics in the passenger compartment. A search of the vehicle revealed approximately one-half kilogram of heroin in a Jack-in-the-Box food bag sitting on the front passenger side floorboard of the vehicle.

The case was investigated by the Drug Enforcement Administration (DEA). 

Assistant U.S. Attorney Rick Calvert was in charge of the prosecution.

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DALLAS — Michael Cornelious, 27, and Larry Solomon, 43, both of Houston, Texas, were sentenced this week by U.S. District Judge Ed Kinkeade to lengthy prison sentences for their role in the conspiracy to rob Tilak Jewelers in Irving, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Cornelious pleaded guilty in October 2017 to one count of conspiracy to interfere with commerce by robbery. Judge Kinkeade sentenced Cornelious to 150 months in federal prison and ordered him to pay $370,718.72 in restitution.  Solomon pleaded guilty in June 2017 to one count of conspiracy to interfere with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence. Solomon was sentenced to 130 months in federal prison and also ordered to pay $370,718.72 in restitution. 

Cornelious and Solomon were charged along with ten other individuals in an indictment in February 2016.  Afraybeom Traverom Jackson, Dominique Pearson, Hilton Murdock Aitch, Irving Tyrone Flanagan, Terrence Lynn Thompson, Anthony Ray Turner, Jr, Treveon Dominique Anderson, Xavier Rashad Ross, Joshua Deunte Caldwell and Vanlisa Scott were each charged with one count of one count of conspiracy to interfere with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence.  On October 12, 2017, Jimmy Hatchett was charged for the same robbery.  Out of the thirteen, eleven have pleaded guilty and two are set for trial on January 29, 2018. 

According to plea documents filed in the case, in the early morning hours on November 17, 2013, Aitch, Jackson, Caldwell, Pearson, Flanagan, Solomon, Aitch, Thompson, Turner, Anderson, Cornelious, and Ross, traveled from Houston, Texas, to the Dallas, Texas, area with the specific intent to rob the Tilak Jewelers store located at 8300 North MacArthur Boulevard, Suite 100, Irving, Texas.  They stole a cargo van and a minivan after they arrived in the Dallas, Texas, area in order to avoid detection and apprehension by law enforcement.

Jackson, Caldwell, Pearson, Turner, Anderson, and Ross drove together in the stolen cargo van to the Tilak Jewelers store, with the specific intent to commit the robbery.  Aitch, Flanagan, and Thompson participated in planning the robbery and positioned themselves outside the Tilak Jewelers store, but maintained communications with Jackson for the purpose of monitoring the robbery and alerting the participants of the presence of law enforcement.

Prior to entering the Tilak Jewelers store, Jackson, Caldwell, Pearson, Turner, Anderson, and Ross disguised their identities by wearing long­sleeved clothing, long pants, gloves, and items covering their faces.  Jackson and the others entered the jewelry store by smashing the locked glass door with a hammer.  After gaining entry into the store, they restrained the owners of the jewelry store with zip-ties, smashed jewelry display cases, and took jewelry from the owners and employees of Tilak Jewelers.

After securing the jewelry, Jackson, Caldwell, Pearson, Turner, Anderson, and Ross fled from the robbery using the stolen cargo van.  They abandoned the cargo van at a predetermined location, where Solomon was waiting in the stolen minivan.  Solomon then drove them to a second predetermined location, where Cornelious was waiting in a switch vehicle.  Cornelious then used the switch vehicle to further facilitate their flight from the robbery and avoid detection and apprehension by law enforcement.  Scott, who had traveled from Houston, met Pearson and the other co­conspirators at a different location and took possession of the stolen jewelry for the purpose of safely transporting it to Houston, Texas.

The Irving Police Department, Houston Police Department, and the Federal Bureau of Investigation investigated the case.  Assistant U.S. Attorneys Keith Robinson and John de la Garza were in charge of the prosecution.

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DALLAS - U.S. Attorney Erin Nealy Cox announced today that the Northern District of Texas collected $350,706,916.75 in criminal and civil actions in Fiscal Year 2017. Of this amount, $322,529,436.78 was collected in criminal actions and $28,177,479.97 was collected in civil actions. 

Additionally, the Northern District of Texas worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect another $2,668,204.90 in cases pursued jointly with these offices. Of this amount, $101,752.75 was collected in criminal actions and $2,566,452.15 was collected in civil actions.                  

Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2017. 

“The message in these numbers should be clear,” said U.S. Attorney Nealy Cox. “This office will vigorously pursue all available enforcement remedies to recover assets for victims of crime and the federal treasury. It continues to be a critical aspect of our mission to pursue Justice on behalf of the citizens of the United States.”

Substantial collections in FY 2017 in the Northern District of Texas included:

• $287 million fine paid in the US v. ZTE Corporation terrorism financing case
• $16.3 million in forfeited assets restored to restitution to dozens of victims of wire fraud and money laundering in US v. Jeffrey David Gunselman
• $12.2 million settlement with International Tutoring Services, LLC et al., resolving allegations of improper kickbacks in association with healthcare claims
•  $8.45 million settlement with MB2 Dental resolving allegations of submission of false claims associated with dental services
• $7.4 million in restitution in US v. Richard Ferdinand Toussaint, Jr. for health care fraud
• $1.8 million to dozens of oil and gas investor victims in US v. Brian Polito
• $900,000 in civil damages for disabled workers in the US v. Kenneth Henry and Hill Country Farms forced labor case
• $700,500 in restitution to victims of insurance fraud in US v. Vincent Bazemore
• $645,000 in restitution to a victim of bank fraud in US v. Nick Daryanani
• $415,000 in restitution to a victim of embezzlement in US v. Pamela and Richard Abeyta

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

Additionally, the U.S. Attorney’s office for the Northern District of Texas, working with partner agencies and divisions, collected $6,578,012 in asset forfeiture actions in FY 2017. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

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LUBBOCK — Shonna Lynn Calaway, 48, of Matador, Texas, was sentenced today by Senior U.S. District Judge Sam R. Cummings to 188 months in federal prison for having a sexual relationship with a sixteen year-old student, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Calaway pleaded guilty in October 2017 to one count of enticement of a minor. She has been in custody since September 2017.

According to the plea agreement factual resume filed in the case, during the 2016-2017 school year, Calaway was employed as a teacher at Motley County High School. In December 2016, Calaway used the Snapchat application to communicate with a sixteen year-old sophomore, John Doe, at Motley County High School. Calaway sent John Doe a message asking him if he wanted to “hang out,” followed by sexually explicit photos.

Shortly after the Snapchat exchange, Calaway drove to a residence in Roaring Springs, Texas, and picked up John Doe. She drove him to a somewhat secluded scenic location near Roaring Springs and engaged in sexual conduct with John Doe.

The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The case was investigated by the Federal Bureau of Investigation, the Lamb County Sheriff’s Office, Motley County Sheriff’s Office, Floyd County District Attorney’s Office and Lamb County District Attorney’s Office. Assistant U.S. Attorney Jeffrey Haag was in charge of the prosecution.

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DALLAS — Javier Giovanni Araujo, 34, of Austin, Texas, and Garrett Alexander Mack, 29, of Dallas, Texas, were sentenced today by Chief U.S. District Judge Barbara M. G. Lynn to lengthy prison sentences for child pornography offenses, announced Erin Nealy Cox, United States Attorney for the Northern District of Texas.

Araujo previously pled guilty to one count of conspiracy to produce child pornography and one count of transportation of child pornography.  Chief Judge Lynn sentenced Araujo to 40 years in federal prison and a lifetime of supervised release.

Mack previously pleaded guilty to one count of conspiracy to produce child pornography. Chief Judge Lynn sentenced Mack to 30 years in federal prison and a lifetime of supervised release.

According to the factual resumes filed in the case and information presented at the sentencing hearing, from at least September 26, 2016 through October 7, 2016, Araujo and Mack discussed sexually abusing children and exchanged photos and videos of child pornography.  Araujo produced videos and images of child pornography by using a three-year-old boy to which he had access.  Araujo and Mack discussed the logistics of how they could gain access to this boy and the ways that Araujo could sexually abuse him.  Araujo then sent some of those child pornography images and videos involving the boy to other men on the internet, including to Mack.   

According to information presented at the sentencing hearing, Araujo, pretending to be a church youth group leader, gained access to another minor child and coerced him into engaging in sexual acts with Araujo.  Araujo recorded this sexual abuse and sent at least one child pornography video of the abuse to Mack. 

The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children.  Project Safe Childhood also prioritizes identifying and rescuing victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The Federal Bureau of Investigation, the Dallas Police Department, and the Austin Police Department investigated.  Assistant U.S. Attorney Jamie L. Hoxie prosecuted.

# # #

DALLAS — Noah Ray Evans, 35, of Red Oak, Texas, was sentenced this week before U.S. District Judge Jane J. Boyle to 170 months in federal prison on a federal child pornography charge, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Evans pleaded guilty to one count of transportation and shipping child pornography in October 2017. 

According to the plea agreement factual resume filed in the case, on January 29, 2017, Evans used his computer to send files of a prepubescent minor engaged in sexually explicit conduct. 

The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children.  Project Safe Childhood also prioritizes identifying and rescuing victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

Homeland Secutiry Investigations and Ozark, Arkansas Police Department investigated the case.  Assistant U.S. Attorney Shane Read prosecuted.

# # #

DALLAS —Julio Cesar Torres, 52, of Greenville, Texas was sentenced today by U.S. District Judge Sam A. Lindsay to 84 months in federal prison, following his guilty plea in September 2017 to one count of conspiracy to possess with intent to distribute and to distribute a schedule II controlled substance, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

According to the plea agreement factual resume filed in the case, on March 17, 2017, Torres made arrangements to sell multiple kilograms of cocaine for $26,500 per kilogram. Torres obtained the cocaine from codefendants Miguel Angel Almazan-Loya and Jose Juan Ortiz-Pacheco at an apartment complex on Ferguson Road in Dallas.

Officers subsequently arrived with a search warrant and searched the apartment. The search revealed approximately three kilograms of cocaine wrapped in plastic wrap and black colored tape contained within a yellow bag further contained within a cardboard box located in the residence.

The Drug Enforcement Administration investigated the case with assistance from the Dallas County Sheriff’s Department and the City of Lewisville Police Department.  Assistant U.S. Attorney George Leal was in charge of the prosecution.

# # #

DALLAS — A federal grand jury returned an indictment last week charging nine Houston residents with offenses related to eight violent robberies in North Texas, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas. 

Specifically, the nine-count indictment, unsealed yesterday afternoon, charges, Jarvis Broussard, aka “Koppo,” 29; Trey Nathaniel Dickerson, 25; Christian Demond Gilbert, aka “Go Getta,” 28; Randy Lamark Hammond, 23; John Christopher Jones, aka “2tall,” 27; Brandon Chermaine Mallet, aka “Wookie,” 31; Chrisheena Ladale Milburn, aka “Beanz,” 27; Fernando Rafael Taylor, 29; and Jonathan Walker, aka “Johnathan Walker,” 31, with one count each of conspiracy to interfere with commerce by robbery and at least one additional count of interference with commerce by robbery.

The defendants were arrested today and will remain in custody pending their initial appearances.

The indictment arises out of a series of “jugging” offenses in the Dallas area.  “Jugging” is a term informally used to refer to crimes that involve surveilling banks for potential targets suspected of having significant sums of cash and following the targeted victims to other locations where they are robbed.  The indictment alleges that, on February 4, 2016 and continuing until at least July 22, 2017, the defendants conspired together to commit several robberies to obtain U.S. currency.  The defendants discussed and planned the surveillance and selection of individuals for robbery; the acquisition of property for use in committing robbery; the timing and means of transportation to commit   robbery; the roles of participants during the preparation for and commission of robbery; the division of proceeds obtained from robbery; and plans to avoid detection and apprehension by law enforcement.

A federal indictment is an accusation by a grand jury.  A defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.   

The investigation is being conducted by the FBI, with assistance from the Dallas, Garland, Irving, and Richardson Police Departments.  Assistant U.S. Attorneys Brian McKay and Sid Mody are in charge of the prosecution.

# # #

DALLAS — Rosalio Ramos Tapia, aka “Rosalio Ramos,” “Chale,” and “Mocho,” 43, a citizen of Mexico and in the United States illegally, was sentenced earlier this week before U.S. District Judge David C. Godbey for his role in a methamphetamine distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Tapia was sentenced to 210 months in federal prison following his guilty plea in October 2016 to one count of conspiracy to possess with intent to distribute and to distribute a controlled substance, said substance being 50 grams or more of methamphetamine.  He was in the United States illegally at the time of the offense and will be deported after serving his sentence.  Tapia has been in custody since his arrest in July 2016.

Tapia was charged along with twenty-one others with various offenses related to a methamphetamine distribution conspiracy.  Of the twenty-one charged, fourteen have pleaded guilty, seven have been sentenced and two are awaiting trial. Four defendants remain fugitives.

According to documents filed in the case, between September 25, 2015 through March 18, 2016, Tapia and his coconspirators conspired to distribute methamphetamine and on several occasions, discussed the preparation and conversion of liquid methamphetamine into crystal methamphetamine. 

Specifically, Tapia used coded language to purchase multiple kilograms of methamphetamine so that he could distribute the methamphetamine to other people. Once Tapia sold the kilograms of methamphetamine he provided drug proceeds to the supplier of the methamphetamine.

The Federal Bureau of Investigation investigated, with assistance from the Dallas Police Department and the Internal Revenue Service Criminal Investigations Division.  Assistant U.S. Attorney George Leal prosecuted.    

 

# # #

LUBBOCK, Texas — A Lubbock, Texas, man, Steven Lawrence Forcum, 32, appeared yesterday before U.S. Magistrate Judge D. Gordon Bryant Jr. and pleaded guilty to a federal offense stemming from his role in a large-scale furanyl fentanyl distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Forcum pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute furanyl fentanyl.  He faces a statutory penalty of not more than twenty years in federal prison and a $1 million fine.  Judge Bryant recommended that the district court accept Forcum’s guilty plea.

Co-defendants, Krisandrea Monee Dobbs, 31; Peyton Cleveland Wilson, 27; and Ashlyn Paige Utley, 23, previously pleaded guilty to their role in the conspiracy and are awaiting sentencing.

Law enforcement first learned of Forcum’s involvement in distributing the potent synthetic opioid when Forcum voluntarily made a police report that someone had stolen his supply of fentanyl. 

According to the plea agreement factual resume in Forcum’s case, between 2015 and October 2016, Forcum used his email account to contact numerous international companies to purchase large quantities of furanyl fentanyl and other controlled substances.  In corresponding with these international companies, Forcum would boast that he sells a kilogram of furanyl fentanyl every two months.  He also bragged that fentanyl and synthetic fentanyl were his “hottest sellers for years.”  Forcum admitted that he routinely supplied Wilson and Dobbs with furanyl fentanyl for distribution in the Lubbock, Texas, area. 

Fentanyl is a potent synthetic opioid analgesic that is about 30 to 40 times stronger than heroin and up to 100 times more powerful than morphine.  Besides analgesia, Fentanyl produces a variety of pharmacological effects, including alteration in mood, euphoria, drowsiness, respiratory depression, suppression of cough reflex, constriction of pupils, and impaired gastrointestinal mobility.  Fentanyl is a Schedule II controlled substance.  Fentanyl is potentially lethal, even at very low levels.  Ingestion of small dosages—the equivalent of a grain of salt—can be fatal.  Fentanyl can also be absorbed through the skin and accidental inhalation of airborne powder can occur.

Furanyl Fentanyl is a controlled substance analogue that has a chemical structure substantially similar to Fentanyl, a Schedule II controlled substance under the Controlled Substances Act, and has a stimulant, depressant, or hallucinogenic effect on the central nervous system that is substantially similar to or greater than the stimulant, depressant, or hallucinogenic effect on the central nervous system of Fentanyl, a Schedule II controlled substance.

The Drug Enforcement Administration and the Lubbock Police Department are in charge of the investigation.

Assistant United States Attorney Russell Lorfing is in charge of the prosecution.

# # #

DALLAS — David Delgado, 35, of Dallas, was sentenced yesterday before U.S. District Judge Jane J. Boyle to 37 months in federal prison and ordered to pay $2,900.00 in restitution, following his guilty plea in May 2017 to one count of use of interstate facility to commit travel act.  U.S. Attorney Erin Nealy Cox of the Northern District of Texas made today’s announcement.

According to documents filed in the case, from November 26, 2015 and continuing to May 31, 2016, Delgado was employed as a Dallas County Community Supervision officer (DCCSO). His job involved the monitoring, counseling, and developing and implementing supervision plans for, among others, adult Spanish-speaking individuals who were on court-ordered probation.

During this time period, Delgado supervised an individual who had no legal status in the United States and who was on probation for a Dallas County offense.  Delgado called the probationer into his office and told him/her that he/she still had community service to complete and fees to pay as a condition of his/her probation.  The probationer knew that Delgado’s request was not correct because he/she had receipts showing his/her status was current on payments and community supervision hours, and that no more monies were owed.  Just prior to their last in-person meeting, Delgado told the probationer that he/she had to come up with another $1,600 within eight days or he/she would have to perform additional community service.  Delgado explained the $1,600 would be divided between two others who were supposed to help Delgado waive/prevent the imposition of additional community service hours. The probationer believed that paying Delgado would prevent additional charges against him/her and felt obligated to do so since Delgado was in a position of authority as his/her DCCSO. Thereafter, on a Saturday prior to June 2016, Delgado placed a call to the probationer and arranged a meeting at a Dallas restaurant to collect the bribe payment. During the call, the probationer asked Delgado if he/she could pay half of the $1,600 at the meeting and the other half later. Delgado told the probationer that he needed all of the money at once because he just could not pay one person and not the other that were going assist.  Delgado further explained that to pay in full was for the probationer’s benefit and would help keep immigration officials away.  Delgado warned the probationer that one of his other probationers was picked up by Immigration officials and deported, and that the probationer needed to stay straight.  Delgado and the probationer met as planned and Delgado was paid $1,600.

In addition to the $1,600 Delgado received described above, Delgado also received a total of approximately $1,300 from three other probationers he supervised.

The Federal Bureau of Investigation, Texas Rangers, and the Dallas County Sheriff’s Office investigated the case.  Assistant U.S. Attorneys John Kull and Kate Rumsey prosecuted.

# # #

LUBBOCK, Texas — Gregory Jerome Mitchell, aka “Jimmy Jombo Kalu,” 33, was sentenced on January 19, 2018 by Senior U.S. District Judge Sam R. Cummings to 262 months in federal prison for distributing cocaine, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Mitchell was charged in August 2017 with multiple counts of distribution and possession with intent to distribute cocaine base and methamphetamine.  Mitchell pleaded guilty in September 2017 to one count of distribution or possession with intent to distribute 28 grams or more of cocaine base. He has been in custody since his arrest in August 2017.

 

According to the plea documents filed in the case, on May 24, 2017, Mitchell arranged to sell six ounces of crack cocaine in exchange for $3,600.00.  Mitchell was ultimately held responsible for approximately 550 grams of cocaine base and approximately four kilograms of methamphetamine.

 

The case was investigated by the Drug Enforcement Administration and Lubbock County Sheriff’s Office. Assistant U.S. Attorney Sean Long prosecuted.    

           

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WASHINGTON – Five of six alleged members of an international criminal conspiracy were arrested and appeared before the Court in Dallas, Texas on charges related to their alleged roles in an international fraud scheme that has used counterfeit driver’s licenses and counterfeit money orders to obtain monies from victim bank accounts around the United States.

The arrests and charges were announced by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; U.S. Attorney Erin Nealy Cox for the Northern District of Texas; and Inspector in Charge Regina Faulkerson of the U.S. Postal Inspection Service, Criminal Investigations Group.

John Lewis Davis II, 43, and Rasheed Wriden, 34, both of Dallas; Valandus Javon Gibson, 28 of Chicago, Illinois; Ralph Deon Taylor, 47, of Long Beach, California; and Craig Allen, 70, of Phoenix, Arizona, were all charged in a 14-count indictment unsealed on Thursday.

Davis, Gibson, Taylor, Allen, and Wriden are charged with conspiracy to commit wire fraud and mail fraud, and conspiracy to launder monetary instruments.

Davis, Gibson, and Allen, are charged with conspiracy to commit bank fraud.

Davis, Allen, and Wriden are charged with mail fraud.

Davis, Taylor, Allen, and Wriden are charged with possession and transmission of counterfeit money orders.

Davis, Taylor, and Allen are charged with transferring counterfeit driver’s licenses.

The indictment alleges that from about April 2013 to December 2017, the defendants conspired with each other and individuals in other countries including Nigeria to obtain money through various acts of fraud.  This included posting misleading advertisements of detailed descriptions of job opportunities, such as for mystery shopper positions, that were not valid job opportunities.  The defendants are alleged to have conspired to pose as employers of these fraudulent job opportunities to lure victims, who resided throughout the United States and Canada.

The defendants are alleged to have conspired to obtain counterfeited driver’s licenses and money orders, which were shipped into the United States.  The counterfeited money orders were shipped to co-conspirators, who then mailed them to unwitting victims who were under the mistaken belief that they were fulfilling the job duties of mystery shopper positions.  The victims were instructed to deposit the counterfeit money orders and securities, mailed as payment for the mystery shopper jobs, into personal bank accounts and send a portion of the monies via money transfer businesses, to individuals known and unknown in the United States and elsewhere.  After the unwitting victims cashed the counterfeited money orders and wired money to co-conspirators, the co-conspirators are alleged to have retrieved the wire transfers with the use of a counterfeited driver’s license.

According to the indictment, the purpose of the conspiracy was to fraudulently obtain monies from counterfeited U.S. Postal money orders and counterfeit checks, by sending and receiving them through the U.S. Postal Service and commercial carriers to other individuals, who would then negotiate the money orders and checks and wire the funds to the defendants using money service businesses.

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Rowlett Police Department.

The case was prosecuted by Trial Attorney Leshia Lee-Dixon of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney David Jarvis from the U.S. Attorney’s Office for the Northern District of Texas – Dallas Division.

# # #

Five of six alleged members of an international criminal conspiracy were arrested and appeared before the Court in Dallas, Texas on charges related to their alleged roles in an international fraud scheme that has used counterfeit driver’s licenses and counterfeit money orders to obtain monies from victim bank accounts around the United States.

 

The arrests and charges were announced by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; U.S. Attorney Erin Nealy Cox for the Northern District of Texas; and Inspector in Charge Regina Faulkerson of the U.S. Postal Inspection Service, Criminal Investigations Group.

 

John Lewis Davis II, 43, and Rasheed Wriden, 34, both of Dallas; Valandus Javon Gibson, 28 of Chicago, Illinois; Ralph Deon Taylor, 47, of Long Beach, California; and Craig Allen, 70, of Phoenix, Arizona, were all charged in a 14-count indictment unsealed on Thursday.

 

Davis, Gibson, Taylor, Allen, and Wriden are charged with conspiracy to commit wire fraud and mail fraud, and conspiracy to launder monetary instruments.

 

Davis, Gibson, and Allen, are charged with conspiracy to commit bank fraud.

 

Davis, Allen, and Wriden are charged with mail fraud.

 

Davis, Taylor, Allen, and Wriden are charged with possession and transmission of counterfeit money orders.

 

Davis, Taylor, and Allen are charged with transferring counterfeit driver’s licenses.

 

The indictment alleges that from about April 2013 to December 2017, the defendants conspired with each other and individuals in other countries including Nigeria to obtain money through various acts of fraud.  This included posting misleading advertisements of detailed descriptions of job opportunities, such as for mystery shopper positions, that were not valid job opportunities.  The defendants are alleged to have conspired to pose as employers of these fraudulent job opportunities to lure victims, who resided throughout the United States and Canada. 

 

The defendants are alleged to have conspired to obtain counterfeited driver’s licenses and money orders, which were shipped into the United States.  The counterfeited money orders were shipped to co-conspirators, who then mailed them to unwitting victims who were under the mistaken belief that they were fulfilling the job duties of mystery shopper positions.  The victims were instructed to deposit the counterfeit money orders and securities, mailed as payment for the mystery shopper jobs, into personal bank accounts and send a portion of the monies via money transfer businesses, to individuals known and unknown in the United States and elsewhere.  After the unwitting victims cashed the counterfeited money orders and wired money to co-conspirators, the co-conspirators are alleged to have retrieved the wire transfers with the use of a counterfeited driver’s license.

 

According to the indictment, the purpose of the conspiracy was to fraudulently obtain monies from counterfeited U.S. Postal money orders and counterfeit checks, by sending and receiving them through the U.S. Postal Service and commercial carriers to other individuals, who would then negotiate the money orders and checks and wire the funds to the defendants using money service businesses.

 

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

 

The case was investigated by the U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Rowlett Police Department.

 

The case was prosecuted by Trial Attorney Leshia Lee-Dixon of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney David Jarvis from the U.S. Attorney’s Office for the Northern District of Texas – Dallas Division.

DALLAS - Primex Clinical Laboratories, LLC has agreed to pay $3,500,000 to resolve allegations that it violated the False Claims Act by paying kickbacks in exchange for laboratory referrals for patient pharmacogenetic testing.  In a related settlement, Mitch Edland, the Chief Executive Officer and owner of DNA Stat, LLC, has agreed to pay $270,000 to resolve similar allegations. Both settlements were announced today by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Primex Clinical Laboratories, LLC (Primex), is a licensed clinical laboratory providing clinical diagnostic testing services, including pharmacogenetic testing. DNA Stat, LLC (DNA Stat) was a laboratory management company that employed sales representatives and licensed pharmacists.  Primex and DNA Stat entered into a services agreement related to pharmacogenetic testing services. 

 

The settlement resolves allegations brought by two whistleblowers that Primex submitted claims to Medicare that were rendered false as a result of Primex and DNA Stat providing kickbacks from June 2013 through March 2016. The relators alleged several kickback schemes, including a scheme where the defendants created the appearance of paying physicians to provide clinical study data for a Primex-sponsored study related to pharmacogenetic testing when, in fact, the physicians were being paid for referring patients for the testing.  The relators also alleged a scheme where the defendants provided physicians with in-office medical technicians to do work related to the Primex-sponsored study in an effort to induce those physicians to order pharmacogenetic tests from Primex.  Finally, the relators alleged that the pharmacogenetic tests were not medically necessary.  The United States also contends that DNA Stat’s agreement with Primex as well as its agreements with its sales representatives took into account the volume and value of referrals physicians made to Primex for pharmacogenetic tests when calculating compensation. 

 

The settlement with Primex resolves the allegations centered on providing in-office medical technicians to physicians; entering into improper sales and services agreements; and submitting claims for pharmacogenetic tests that were not medically necessary.  Mr. Edland’s settlement resolves all allegations against him contained in the lawsuit.  Neither party admitted any wrongdoing or liability.

 

The qui tam, or whistleblower, lawsuit was brought by relators Don Pyburn and David Choate, former sales representatives for DNA Stat.  The qui tam or whistleblower provisions of the FCA authorize private parties to sue for fraud on behalf of the United States and share in the recovery.  The relators will receive $754,000.

 

The investigation was conducted by Health and Human Services Office of Inspector General and the FBI.  The case was handled by Assistant U.S. Attorneys Dawn Whalen Theiss and Lindsey Beran.

 

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FORT WORTH — Willie Thompson, Jr., 53, of Oklahoma City, Oklahoma, was sentenced this week by U.S. District Judge Reed C. O’Connor to serve a total of 262 months in federal prison, following his guilty plea in August 2017 to his role in the conspiracy to rob Haltom’s Jewelers in Grapevine, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Thompson pleaded guilty to one count of interference with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence. He has been in custody since April 2017 on a related federal complaint.

 

According to plea documents filed in the case, on October 3, 2014, Thompson, along with co-defendants Garland Gilmore Lenoir III, Melvin Lewis Andrews, Tony Eugene Gabriel and Kim Yvette Brown, traveled to Haltom’s Jewelers in a stolen vehicle. Andrews, Lenoir, Thompson and Gabriel, entered the store wearing masks and carrying handguns and hammers. Thompson held a store employee in a back room at gunpoint while Andrews, Lenoir, and Gabriel smashed the display cases with hammers and stole merchandise, to include jewelry and watches.

 

The FBI and Grapevine Police Department investigated the case.  Special Assistant U.S. Attorney Dan Cole was in charge of the prosecution.

# # #

DALLAS – An indictment returned by a federal grand jury in Dallas last month, and unsealed earlier this month, charges Donna H. Woods, 63, of DeSoto, Texas, and Donatus I. Anyanwu, 59, of Dallas, Texas, with offenses related to a scheme to defraud a program used by needy schools to obtain affordable telecommunications and internet access, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.

Specifically, Woods is charged with one count of conspiracy to commit mail fraud and wire fraud, and three counts of wire fraud. Anyanwu is charged with one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and two counts of wire fraud. Both defendants will remain on bond pending trial, which is set for March 5, 2018.

 

The indictment alleges that Woods, the Chief Executive Officer of Nova Charter School (Nova), and Anyanwu, the owner of ADI Engineering, Inc. (ADI), devised a scheme to defraud the Federal Communications Commission’s “E-Rate” program, which helps schools and libraries in the United States obtain affordable telecommunications and internet access. Woods used her position at Nova to select ADI as Nova’s E-Rate service provider, a bid worth approximately $478,000. In return for ADl’s selection as Nova’s E-Rate service provider, Woods received a kickback of at least $5,000 from Anyanwu.

 

The indictment further alleges that Woods and Anyanwu perpetuated the fraud by falsifying forms indicating that Nova had complied with E-Rate program rules and that no kickbacks were paid. Over the course of the conspiracy, ADI was paid approximately $337,951.06 in E-Rate discount funds that it was not entitled to receive.

 

An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.  If convicted, however, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.   

The indictment also includes a forfeiture allegation that would require the defendants, upon conviction, to forfeit to the U.S. any property traceable to the offense.

The case is being investigated by the Federal Bureau of Investigation.

 

Assistant U.S. Attorneys Russell Fusco and Marcus Busch are prosecuting the case.

 

# # #

AMARILLO, Texas — An Atlanta, Georgia, man, Jaime Bowling, 28, was sentenced this week by U.S. District Judge Sidney A. Fitzwater to 135 months in federal prison for his role in the distribution of methamphetamine, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Bowling has been in custody since his arrest in February 2017 on a related federal criminal complaint. He pleaded guilty in August 2016 to one count of possession with intent to distribute 500 grams or more of methamphetamine.

According to the plea agreement factual resume filed in the case, on February 10, 2017, law enforcement stopped a vehicle for speeding. The driver was identified as co-defendant Enrique R. Stoddard and the passenger was identified as Bowling. The Trooper requested a canine unit perform an air sniff test on the vehicle after noticing indicators of possible criminal activity.

Law enforcement located two plastic antifreeze bottles, containing approximately seven kilograms of liquid methamphetamine, concealed inside a piece of luggage in the trunk of the vehicle. There was liquid and dried crystalized methamphetamine on the exterior of the bottle. There were other items of luggage used to keep the bottles upright, including a black bag belonging to Bowling.

Bowling admitted that he and Stoddard had flown to Los Angeles, California and rented a car on February 8, 2017. On February 9, 2017, Bowling picked up liquid methamphetamine and was supposed to transport that liquid methamphetamine to another state. 

 

The Drug Enforcement Administration and Texas Department of Public Safety investigated the case.  Assistant U.S. Attorney Anna Bell was in charge of the prosecution.

       

# # #

DALLAS — Hiban Molina Camacho, 28, of Phoenix, Arizona, was sentenced this week before U.S. District Judge David C. Godbey for his role in a methamphetamine distribution conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Camacho was sentenced to 70 months in federal prison following his guilty plea in May 2017 to one count of conspiracy to possess with intent to distribute and to distribute a schedule II  controlled substance.

 

Camacho was charged along with twenty-one others with various offenses related to a methamphetamine distribution conspiracy.  Of the twenty-one charged, eighteen have pleaded guilty, five have been sentenced and three are awaiting trial.

 

According to the plea agreement factual resume filed in the case, on May 23, 2015, Camacho engaged in a series of conversations to request a kilogram of methamphetamine.

 

The Federal Bureau of Investigation investigated, with assistance from the Dallas Police Department and the Internal Revenue Service Criminal Investigations Division.  Assistant U.S. Attorney George Leal prosecuted.    

 

# # #

DALLAS — Terrence Lynn Thompson, 54, of Houston, Texas was sentenced today by U.S. District Judge Ed Kinkeade to serve a total of 150 months in federal prison, following his guilty plea in January 2017 to his role in the conspiracy to rob Tilak Jewelers in Irving, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Thompson pleaded guilty to one count of conspiracy to interfere with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence.  Thompson has been in custody since his arrest in March 2016.

 

Thompson was charged along with eleven other individuals in an indictment in February 2016.  Afraybeom Traverom Jackson, Dominique Pearson, Hilton Murdock Aitch, Irving Tyrone Flanagan, Larry Solomon, Joshua Deunte Caldwell, Anthony Ray Turner, Jr, Treveon Dominique Anderson, Michael Cornelious, Xavier Rashad Ross, and Vanlisa Scott, were each charged with one count of conspiracy to interfere with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence.  On October 12, 2017, Jimmy Hatchett was charged for the same robbery.  Out of the thirteen, eleven have pleaded guilty and two are set for trial on January 29, 2018.

 

According to plea documents filed in the case, in the early morning hours on November 17, 2013, Aitch, Jackson, Caldwell, Pearson, Flanagan, Solomon, Aitch, Thompson, Turner, Anderson, Cornelious, and Ross, traveled from Houston, Texas, to the Dallas, Texas area with the specific intent to rob the Tilak Jewelers store located at 8300 North MacArthur Boulevard, Suite 100, Irving, Texas.  They stole a cargo van and a minivan after they arrived in the Dallas, Texas, area in order to avoid detection and apprehension by law enforcement.

 

Jackson, Caldwell, Pearson, Turner, Anderson, and Ross drove together in the stolen cargo van to the Tilak Jewelers store, with the specific intent to commit the robbery.  Aitch, Flanagan, and Thompson participated in planning the robbery and positioned themselves outside the Tilak Jewelers store, but maintained communications with Jackson for the purpose of monitoring the robbery and alerting the participants of the presence of law enforcement.

 

Prior to entering the Tilak Jewelers store, Jackson, Caldwell, Pearson, Turner, Anderson, and Ross disguised their identities by wearing long­sleeved clothing, long pants, gloves, and items covering their faces.  Jackson and the others entered the jewelry store by smashing the locked glass door with a hammer.  After gaining entry into the store, they restrained the owners of the jewelry store with zip-ties, smashed jewelry display cases, and took jewelry from the owners and employees of Tilak Jewelers.

 

After securing the jewelry, Jackson, Caldwell, Pearson, Turner, Anderson, and Ross fled from the robbery using the stolen cargo van.  They abandoned the cargo van at a predetermined location, where Solomon was waiting in the stolen minivan.  Solomon then drove them to a second predetermined location, where Cornelious was waiting in a switch vehicle.  Cornelious then used the switch vehicle to further facilitate their flight from the robbery and avoid detection and apprehension by law enforcement.  Scott, who had traveled from Houston, met Thompson and the other co­conspirators at a different location and took possession of the stolen jewelry for the purpose of safely transporting it to Houston, Texas.

 

The Irving Police Department, Houston Police Department, and the Federal Bureau of Investigation investigated the case.  Assistant U.S. Attorneys Keith Robinson and John de la Garza were in charge of the prosecution.

# # #

AMARILLO, Texas — Arturo Salazar, Jr., 41, was sentenced today by U.S. District Judge Sidney A. Fitzwater to serve a total of 248 months in federal prison following his guilty plea in September 2017 to one count of possession with intent to distribute 500 grams or more of methamphetamine and one count of possession of a firearm in furtherance of a drug trafficking crime, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Judge Fitzwater ordered Salazar to report to the Bureau of Prisons on February 27, 2018.

 

According to the plea agreement factual resume filed in the case, on November 4, 2016, a Texas Department of Public Safety Trooper stopped a vehicle for speeding. The driver of the vehicle was identified as Salazar. The vehicle was also occupied by a female passenger. The Trooper noticed several indicators of possible criminal activity and Salazar and the female passenger provided the Trooper with conflicting stories of where they were traveling to and the reason for their trip. While waiting for a K9 unit to arrive to search the vehicle, Salazar admitted that there was a small amount of methamphetamine and a pipe on the driver’s side of his vehicle and methamphetamine in the trunk of the vehicle. Salazar also admitted he was going to deliver the methamphetamine to Springfield, Missouri.

 

A search of the vehicle revealed a small baggie of methamphetamine and the pipe in the driver’s side door, 24 bundles of suspected methamphetamine, with a net weight of 10,757 grams with a purity level of approximately 95 percent, in the trunk of the vehicle and a loaded firearm.

 

The Texas Department of Public Safety and Drug Enforcement Administration investigated the case. Assistant U.S. Attorneys Joshua Frausto and Sean Taylor prosecuted.

 

# # #

DALLAS —Philip Gary Slaughter, 42, of Mesquite, Texas, was sentenced last week by U.S. District Judge Sidney A. Fitzwater to 15 months in federal prison, following his guilty plea in May 2017 to one count of possession or sale of stolen firearms, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas. 

Thomas Glen Smith, 50, was charged in a separate but related case and also pleaded guilty to his role. Smith is scheduled to be sentenced on January 18, 2018 by U.S. District Judge Jane J. Boyle.  

According to plea documents filed in the case, Smith and Slaughter worked at the Ellis County Sherriff’s Office (ECSO) in the ECSO Evidence Room.  Their responsibilities included reorganizing the ECSO Evidence Room, where they had access to numerous firearms seized by the ECSO.  On November 18, 2015 Slaughter obtained a court order to destroy hundreds of the firearms in the ECSO Evidence Room.  Some of these firearms, however, were not destroyed and, instead, Smith and Slaughter sold approximately forty firearms taken from the ECSO Evidence Room. 

 

At various times in November and December, 2015, Smith and Slaughter pawned several firearms at various pawn stores in the Ellis County area.  The defendants would also use their Facebook accounts to sell firearms to individuals.  These firearms were either supposed to be in the possession of the ECSO Evidence Room or were listed in the destruction order.

 

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Texas Department of Public Safety—Texas Ranger Division.  Assistant U.S. Attorneys Kate Rumsey, Joseph Magliolo, and Errin Martin prosecuted.

 

# # #

DALLAS - Attorney General Jeff Sessions has selected the Northern District of Texas to receive additional resources for the fight against violent crime.  The district will receive an additional Assistant U.S. Attorney to focus exclusively on violent crime, one of 40 new federal prosecutors in 27 selected locations throughout the United States.

 

“Led by our 94 United States Attorney’s Offices, Project Safe Neighborhoods (PSN) task forces are hitting the streets across America to apprehend and bring violent criminals to justice.  I have asked Congress for additional PSN funding next year because I believe nothing will be more effective at reducing violent crime,” said Attorney General Sessions. “Under this program, I am asking a great deal of our United States Attorneys.  I am both empowering them and holding them accountable for results.  To put them in the best position to impact and reduce violent crime, it is my privilege to announce today that through a re-allocation of resources, we will be enlisting and deploying 40 additional violent crime prosecutors across the United States.”

“One of my highest priorities will be to work side by side with our local, state and federal law enforcement partners to stop the destructive cycle of gun and gang violence that terrorizes our communities right here in north Texas,” said U.S. Attorney Nealy Cox.  “PSN programs have had an undeniable impact in the past as they provide the foundation on which these critical partnerships are built.  Resources like this additional prosecutor will significantly enhance our on-going efforts to get the most dangerous people off our streets.”

 

The Assistant U.S. Attorney for the Northern District of Texas will be assigned to the violent crime section of the Dallas division and prosecute cases under the PSN initiative.

 

# # #

LUBBOCK, Texas — Six defendants charged in an indictment returned in November 2017 appeared this week and last week in federal court before U.S. Magistrate Judge D. Gordon Bryant to plead guilty to their involvement in a large-scale methamphetamine trafficking organization operating in the Lubbock, Texas area, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Alejandro Garcia-Izazaga, aka “Flaco” and “Alex,” 29; Anthony Wayne Reiley, aka “Tony,” 49; Ivan Cruz-Martinez, 37; and Zacarias Blanco-Olea, 45, each pleaded guilty to one count of possession with intent to distribute 500 grams or more of methamphetamine.  Each faces a statutory penalty of not less than 10 years and up to life in federal prison and a $10 million fine. 

 

Ernesto Martinez, Jr., 54, and Patricia Ann Hernandez-Salas, 48, each pleaded guilty to one count of possession with intent to distribute 50 grams or more of methamphetamine.  Each faces a statutory penalty of not less than five years and up to 40 years in federal prison and a $5 million fine. 

 

A seventh defendant, Amanda Nicole Marney, 28, is scheduled to go to trial in February 2018.

 

Garcia-Izazaga, Reiley, Cruz-Martinez, and Blanco-Olea have been in custody on related criminal complaints since their arrest in October 2017.  Martinez and Hernandez-Salas have been in custody following their arrests in November 2017.  Sentencing dates will be set at a later date.

 

According to plea documents filed in the case, Garcia-Izazaga was facilitating the transportation of pound-quantities of methamphetamine in Lubbock and other major cities in the State of Texas.  On three separate occasions in the summer of 2017, Garcia-Izazaga offered to pay Reiley, Cruz-Martinez, and Blanco-Olea to transport large quantities of methamphetamine from other parts of the state to Lubbock, Texas.  On each occasion, the defendants were stopped by law enforcement for traffic violations.  Searches of the vehicles revealed large amounts of methamphetamine in hidden compartments.

 

Martinez, Jr. and Hernandez-Salas each purchased and distributed large quantities of methamphetamine in the Lubbock, Texas area.

 

In total, law enforcement agents were able to seize in excess of 15 pounds of methamphetamine and several firearms. 

 

The Drug Enforcement Administration is investigating with the assistance of Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Customs and Border Protection, the Lubbock County Sheriff’s Office, the Lubbock Police Department, and the Texas Department of Public Safety.  Assistant U.S. Attorney Sean Long is in charge of the prosecution.

 

# # #

FORT WORTH, Texas — Following a two-day jury trial before U.S. District Judge Reed C. O’Connor, a federal jury has convicted Jeremy Crabtree, 41, on a felony drug charge, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Crabtree was convicted last week on one count of conspiracy to possess with intent to distribute 500 grams or more of a mixture and substance containing a detectable amount of methamphetamine. The conspiracy count carries a penalty of not less than 10 years or more than life in federal prison and a $10 million fine. Sentencing is scheduled for April 9, 2018. 

The government presented evidence at trial that in 2014 and 2015, Crabtree operated an illegal gambling establishment near I-35W and Long Avenue. The game room became a hub for Aryan Brotherhood (AB) gang-related activity and methamphetamine trafficking. Although not an official member, Crabtree was a close associate to AB members and allowed them to use his game room to buy and sell methamphetamine and discipline AB members for gang-related violations.   

The Drug Enforcement Administration, U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.  Assistant U.S. Attorneys Shawn Smith and Frank Gatto prosecuted.  

# # #

DALLAS — Shenandoah West Moneypenny, 34, of Gladewater, Texas, and Shawn Dale Sanders, 43, of Dallas, Texas, remain in federal custody on a federal criminal complaint for the sex trafficking of a 13-year-old female, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Moneypenny and Sanders are each charged with one count of conspiracy to use, persuade, induce, entice, and coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. Both defendants were arrested on December 18, 2017 and will remain in federal custody pending trial.

According to the affidavit filed with the criminal complaint, in October 2017, a family member of a 13-year-old minor female (Victim) contacted a Garland Independent School District School Resource Officer after finding communications on the minor’s laptop computer between Victim and adult males. The family brought the laptop computer and Victim’s cellular phone to the School Resource Officer, who previewed the devices and observed sexually explicit communications.

 

During an interview with law enforcement, according to the affidavit, Victim disclosed that she had sexual contact with up to four adult men who she met online. When asked how she came to communicate with these men, Victim stated that she met a man online named “Aiden” and he put her in contact with other men to “meet up.” Aiden, who was later identified as Moneypenny, began to set up in-person meets for her through Craigslist advertisements that he placed. These advertisements sought men to meet Victim for sex. Responses to the Craigslist ads went directly to Moneypenny’s email account and, once he deemed the responder to be safe for Victim to meet, Moneypenny provided Victim with their contact information.

 

In August 2017, Victim met Sanders in response to the Craigslist ad. Sanders picked Victim up from the middle school and drove her to a local park where they had sexual conduct. During this meeting Sanders took sexually explicit pictures of Victim and sent them to Moneypenny as a trade-off for setting him up with the Victim. Sanders and Victim met approximately four times after that and engaged in sexual conduct.

 

Moneypenny received a total of 219 replies to the Craigslist advertisement, including Sanders reply.

 

A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The penalty for the offense as charged is not less than 15 years or more than 30 years in federal prison, a $250,000 fine and a lifetime of supervised release.

The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

 

The Federal Bureau of Investigation and Garland Police Department are investigating.  Assistant U.S. Attorney P.J. Meitl is in charge of the prosecution.

# # #

DALLAS — Slater Washburn Swartwood, Sr., of Louisiana, has been charged with money laundering for his role in a fraud scheme that involved $3 million in illegal bribe and kickback payments, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

The criminal felony Information filed yesterday charges Swartwood with one count of conspiracy to commit money laundering.  Signed plea papers were also filed indicating Swartwood’s intent to plead guilty.  Swartwood faces a maximum penalty of imprisonment not to exceed five years and a $250,000 fine. Restitution could also be ordered.  An arraignment date has not yet been set.

According to the filed Information and plea papers, Swartwood started working with Person A as a real estate adviser in approximately 1985. In approximately 2010, he began doing real estate consulting for Company A, at first as an employee and later as a consultant.  Company A, which was owned and controlled by Person A, sold cameras and related services for school buses. Company A entered into various contracts and a licensing agreement with a Texas state agency acting through its superintendent,  Person B. Under these contracts and the licensing agreement, the state agency purchased millions of dollars of camera equipment from Company A.

 

Between 2011 and 2016, according to documents filed in the case, Person A provided Swartwood with approximately $2 million to funnel to Person B through Swartwood’s companies, Elf Investments, Cambridge Realty Group, LLC, and Anrock Realty Services, LLC, in return for further agreements and camera-equipment orders.

 

The investigation was conducted by the Federal Bureau of Investigation.

 

Assistant U.S. Attorneys Andrew Wirmani and Joseph Magliolo are in charge of the prosecution.

 

# # #

FORT WORTH, Texas — Two men who admitted breaking into pharmacies and stealing controlled substances, Nicholas Evans, aka “Nico,” and Darrien Jefferson, aka “Smoke,” were sentenced today by U.S. District Judge Reed C. O’Connor, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Evans, 25, was sentenced to serve a total of 121 months in federal prison, and Jefferson, 36, was sentenced to a total of 168 months in federal prison. Each pleaded guilty in August 2017 to one count of conspiracy to commit interference with commerce by robbery and one count of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of, a crime of violence.

Kenneth Sauls, aka “Smurf,” 23, also pleaded guilty to his role in the robbery and is scheduled to be sentenced on January 16, 2018.

Dion Clark, 36, was charged in a separate indictment and pleaded guilty to his role in the robbery. Clark is scheduled to be sentenced before U.S. District Judge John McBryde on February 14, 2018.

According to the factual resumes filed in the case, on April 9, 2016, Evans, Jefferson, Sauls, and Clark entered into an agreement to commit a robbery at the Walgreens Pharmacy located at 833 South Wilshire Blvd., Burleson, Texas. Clark waited in the vehicle as the get-a-way driver while Evans, Jefferson and Sauls entered the Walgreens, brandished firearms and “zip” tied the victims’ hands and feet. Collectively the group stole narcotics, cash, cigarettes, and approximately 150 booklets of stamps.

 

The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Fahey prosecuted.

# # #

DALLAS — A defendant charged in a major drug distribution conspiracy that operated in the Dallas-Fort Worth metroplex and elsewhere was sentenced last week by U.S. District Judge Jane J. Boyle to 188 months in federal prison for his role in that conspiracy, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Tony Ruvalcaba, a/k/a “Lil Tony,” 40, of Dallas, pleaded guilty in December 2015 to one count of conspiracy to possess with intent to distribute and to distribute a schedule II controlled substance. 

 

In July 2015, Ruvalcaba and 45 others were indicted, following a law enforcement operation. According to the plea agreement factual resume filed in Ruvalcaba’s case, beginning in November 2012, Ruvalcaba conspired with Javier Guerra, aka “Chop,” Eduardo Ruvalcaba, Jose Guerrero, aka “JD,” Eusebio Martinez Ramirez, Jr., aka “Sip,” Kenneth Johnson, aka “KJ,” Alex Gonzales, Noel Escamilla, and others to possess with intent to distribute 500 grams or more of methamphetamine. The defendants were supplied multi-kilogram amounts of methamphetamine which they then worked to distribute to various individuals.   

 

The Federal Bureau of Investigation, Dallas Police Department, and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigrations and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments.

 

Assistant U.S. Attorneys George Leal and John de la Garza were in charge of the prosecution.

# # #

DALLAS — Thomas Adam Lewis, 37, of Mansfield, Texas, appeared yesterday in federal court before U.S. Magistrate Judge Renee Harris Toliver and pleaded guilty to one count of attempted production of child pornography.  Lewis, who has been in federal custody since his arrest in September on related charges, faces a maximum statutory penalty of not less than 15 years and up to 30 years in federal prison, a $250,000 fine, and a lifetime of supervised release.  Sentencing is scheduled for April 5, 2018.  U.S. Attorney Erin Nealy Cox of the Northern District of Texas made the announcement today.

According to the plea agreement factual resume filed in the case, on August 4, 2017, a Grand Prairie Police Department detective began an undercover investigation, posing as a thirteen year old boy, targeting adults who were soliciting minors on the internet through the use of a third party messaging application.

 

Lewis using the screen name “Twinks only 33” (“Twinks33”), contacted the Detective and asked the Detective for pictures of himself. After receiving an image of a minor male wearing jeans, a white tank top, and a baseball cap, Lewis replied, “Um you are sexy,” and asked the Detective if he had any shirtless pictures. During the next few days, Lewis repeatedly asked the Detective to take shirtless and nude pictures of himself and send the child pornography images to him.

 

The conversations continued, according to the factual resume, and Lewis asked, “when can we meet?” Sporadically over a few days Lewis and the Detective discussed meeting and on the afternoon of August 29, 2017, Lewis arrived at a designated apartment complex in Grand Prairie and was arrested. Lewis provided law enforcement with the passcode to his cellular device. Upon review of the phone, law enforcement located the communications between Twinks33 and the Detective. Lewis was using other social networking applications and was engaged in additional communications entailing the sexual exploitation of minors. Law enforcement contacted resource officers at two area high schools in an attempt to identify possible victims and located a 15-year-old boy who had also chatted with Lewis. The conversations were sexually explicit and Lewis attempted to entice the boy to have sex with him.

 

The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children.  Project Safe Childhood also prioritizes identifying and rescuing victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

 

The case was investigated by the Federal Bureau of Investigation and the Grand Prairie Police Department.  Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

# # #

LUBBOCK, Texas — Timothy Wade Barton, 55, of Sweetwater, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to 97 months in federal prison, following his guilty plea in July 2017 to a superseding information charging one count of possession of child pornography, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Barton, who has been on bond, was ordered to report to the Bureau of Prisons on January 17, 2018.

According to documents filed in his case, between May 9, 2011 and September 23, 2014, Barton possessed a custom-built desktop computer and hard disk drive that contained numerous images and videos of child pornography.  Barton used his computer to search on the Internet to locate material depicting minors engaging in sexually explicit conduct.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated the case.  Assistant U.S. Attorney Steven M. Sucsy was in charge of the prosecution.

# # #

DALLAS — Kirk Patrick Keshler, 60, of Garland, Texas, appeared today in federal court in Dallas and pleaded guilty, before U.S. Magistrate Judge David L. Horan, to one count of transportation of child pornography.  The announcement was made today by Erin Nealy Cox, U.S. Attorney for the Northern District of Texas. 

Keshler faces a maximum penalty of not less than five, nor more than 20 years in federal prison, a $250,000 fine, and a lifetime of supervised release. He will remain in custody pending sentencing which is set for April 4, 2018.

According to the plea agreement factual resume filed in the case, Keshler, a teacher for special needs children at Garland High School, used the internet and a peer-to-peer file-sharing account to send and receive visual depictions of minors engaged in sexually explicit conduct.

 

On August 16, 2017, law enforcement received a search warrant for Keshler’s residence in Garland, Texas. While conducting the search of the residence, law enforcement entered the master bedroom of the home and located a nude, realistic-looking child size doll lying on the floor of a closet with a wig covering the face of the doll. Additionally, law enforcement observed in the master bedroom a large television connected to a laptop computer. The laptop computer was powered on and Windows media player was open on the screen showing that Keshler was actively viewing child exploitative movies when law enforcement made contact at his residence.

 

A forensic review of the seized laptop computer, according to the factual resume, revealed over 10,000 images and 3,000 videos involving toddler aged children to early and pubescent teens, both male and female, engaged in sexual activity with adults and with other children. Some of the child pornography files depict sadistic and masochistic content and bestiality. Law enforcement also seized several pairs of female children’s panties in various child sizes.

 

The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children.  Project Safe Childhood also prioritizes identifying and rescuing victims.  For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.  For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

 

The FBI and Garland Police Department investigated.  Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

# # #

DALLAS — Octavius Williams, 32, of Irving, Texas, was sentenced yesterday by U.S. District Judge Jane J. Boyle to 168 months in federal prison, following his guilty plea in November 2015 to one count of conspiracy to possess with intent to distribute a controlled substance, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Williams has been in custody since his arrest in July 2015.

According to the plea agreement factual resume filed in the case, in 2014, Williams worked with associates of the Los Caballeros Templarios Mexican cartel to obtain and distribute multiple kilograms of cocaine throughout Dallas, Atlanta, Louisiana, Seattle, Oklahoma, and New York. Williams would distribute approximately 30 kilograms of cocaine per month, charging $800 to $900 per ounce. He kept between $159,000 to $200,000 cash at his house for multi-kilogram transactions.

 

Six Firearms, 551 rounds of ammunition, and approximately $103,354.00 were seized and forfeited as a result of Williams’ arrest.

 

The FBI, Dallas Police Department and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments.

 

Assistant U.S. Attorneys George Leal and John DeLaGarza were in charge of the prosecution.

# # #

DALLAS — Donald Golden, 62, of Richardson, Texas, was sentenced today by U.S. District Judge Sidney A. Fitzwater to 300 months in federal prison, following his guilty plea in July 2017 to one count of attempted production of child pornography, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Golden has been in custody since the time of his arrest in March 2017.

According to the plea agreement factual resume filed in the case, on January 5, 2017, Golden sent a series of text messages and emails to John Doe #1, a minor boy under 15 years of age, requesting that he produce sexual explicit images of himself and send the images to Golden via text messaging. The messages included the following: “So, are you going to send me some pics … I need to see what you look like naked … I want to see what you look like from the neck down, no face, naked pics, just body …”

 

The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

 

The case was investigated by the Federal Bureau of Investigation.  Assistant U.S. Attorney Shane Read was in charge of the prosecution.

# # #

DALLAS — A Kaufman man, Danny Hall, 51, was sentenced today by U.S. District Judge Sidney A. Fitzwater to 123 months in federal prison for committing multiple bank robberies, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Hall pleaded guilty in June 2017 to one count of bank robbery. He has been in custody since the time of his arrest in January 2017.

According to the plea agreement factual resume, on January 9, 2017, Hall entered the Wells Fargo Bank branch located at 1405 E. Renner Road, Richardson, Texas, and approached a teller. He handed her a note that read, “I have a gun, this is a robbery, and give me cash.” The teller gave Hall cash from the teller drawer totaling $2,692. Hall collected the money and left the bank. Later, he was identified in a photographic line-up by the teller and then arrested.

According to the factual resume, Hall also admitted to the following robberies: November 28, 2016 robbery of the BB&T Bank branch located at 11800 Preston Road, Dallas; January 18, 2017 robbery of the Capital One Bank branch located at 4208 Lemmon Avenue, Dallas; and December 22, 2016 robbery of the Chase Bank branch located at 11611 Preston Road, Dallas.

 The Federal Bureau of Investigation investigated the case.  Assistant U.S. Attorney Shane Read prosecuted.

# # #

DALLAS —Nemelee Liwanag Jiao, 47, of Irving, Texas, pleaded guilty today, before U.S. Magistrate Judge Renee Harris Toliver, to orchestrating a Ponzi scheme that cost at least 35 investors more than $1,000,000, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas. 

Jiao pleaded guilty to one count of wire fraud. She faces a maximum statutory penalty for wire fraud is 20 years in federal prison and a $250,000 fine. Jiao will remain on bond pending her sentencing, which is scheduled for April 4, 2018.

According to the plea agreement factual resume, beginning in February 2009 and continuing through September 2016, Jiao devised a scheme to cause individuals to invest in promissory notes purportedly issued by Shepherd’s Light Learning Center and Lord of Peace Learning Center, two non-profit schools located in the Philippines, but instead used the invested funds for her personal benefit.  Jiao raised at least $1,000,000 from at least 35 investors.

Specifically, Jiao represented to investors that she was a representative of Shepherd’s Light and Lord of Peace and entered into investment contracts, also known as promissory notes, with investors falsely promising rates of return of 10% to 100% on investments.  Jiao also promised repayment of principle and interest resulting from the investment within 30 days to one year following the investment.  Many of the investment contracts were notarized to make the investments appear legitimate.  Jiao then directed investors to write checks and wire funds to bank accounts controlled by her.  Jiao used the investors’ funds for her own benefit, including a country club membership and personal expenses.

 

The case was investigated by the Federal Bureau of Investigation.  Assistant U.S. Attorney Mary Walters is in charge of the prosecution.

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DALLAS – DaVita Rx LLC, a nationwide pharmacy that specializes in serving patients with severe kidney disease, agreed to pay a total of $63.7 million to resolve False Claims Act allegations relating to improper billing practices and unlawful financial inducements to federal healthcare program beneficiaries, the Justice Department announced today.  DaVita Rx is based in Coppell, Texas.

 

The settlement resolves allegations that DaVita Rx billed federal healthcare programs for prescription medications that were never shipped, that were shipped but subsequently returned, and that did not comply with requirements for documentation of proof of delivery, refill requests, or patient consent.  In addition, the settlement also resolves allegations that DaVita paid financial inducements to Federal healthcare program beneficiaries in violation of the Anti-Kickback Statute.  Specifically, DaVita Rx allegedly accepted manufacturer copayment discount cards in lieu of collecting copayments from Medicare beneficiaries, routinely wrote off unpaid beneficiary debt, and extended discounts to beneficiaries who paid for their medications by credit card.  These allegations relating to improper billing and unlawful financial inducements were the subject of self-disclosures by DaVita Rx and a subsequently filed whistleblower lawsuit.

 

“Providers should not make patient care decisions based upon improper financial incentives or encourage their patients to do the same,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas.  “The U.S. Attorney’s Office has and will continue to work cooperatively with providers that bring such issues to light to redress the losses the federal healthcare system has incurred.”

 

DaVita Rx has agreed to pay a total of $63.7 million to resolve the allegations in its self-disclosures and the whistleblower lawsuit.  DaVita Rx repaid approximately $22.2 million to federal healthcare programs following its self-disclosure and will pay an additional $38.3 million to the United States as part of the settlement agreement.  In addition, $3.2 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.  The Medicaid program is jointly funded by the federal and state governments.

 

“Improper billing practices and unlawful financial inducements to health program beneficiaries can drive up our nation’s health care costs,” said Civil Division Acting Assistant Attorney General Chad Readler.  “The settlement announced today reflects not only our commitment to protect the integrity of the healthcare system, but also our willingness to work with providers who review their own practices and make appropriate self-disclosures.” 

 

“The conduct being resolved in this matter presents serious program integrity concerns” said CJ Porter, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, “DaVita Rx’s cooperation in the investigation of this matter was necessary and appropriate to reach this resolution.”

 

The lawsuit resolved by the settlement was filed by two former DaVita Rx employees, Patsy Gallian and Monique Jones, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery.  The case is captioned United States ex rel. Gallian v. DaVita Rx, LLC, No. 3:16-cv-0943-B (N.D. Tex.).  The relators will receive roughly $2.1 million from the federal recovery.

 

The settlement of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).  HHS also offers several programs for health care providers to self-report potential fraud.  More information on self-disclosure processes can be found on the HHS-OIG website.

 

The investigation was conducted by HHS-OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Texas.  The claims asserted by the government are allegations only and there has been no determination of liability.

 

Assistant U.S. Attorney Lisa-Beth C. Meletta handled this matter for the U.S. Attorney’s Office.

 

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DaVita Rx LLC, a nationwide pharmacy that specializes in serving patients with severe kidney disease, agreed to pay a total of $63.7 million to resolve False Claims Act allegations relating to improper billing practices and unlawful financial inducements to federal healthcare program beneficiaries, the Justice Department announced today.  DaVita Rx is based in Coppell, Texas.

 

The settlement resolves allegations that DaVita Rx billed federal healthcare programs for prescription medications that were never shipped, that were shipped but subsequently returned, and that did not comply with requirements for documentation of proof of delivery, refill requests, or patient consent.  In addition, the settlement also resolves allegations that DaVita paid financial inducements to Federal healthcare program beneficiaries in violation of the Anti-Kickback Statute.  Specifically, DaVita Rx allegedly accepted manufacturer copayment discount cards in lieu of collecting copayments from Medicare beneficiaries, routinely wrote off unpaid beneficiary debt, and extended discounts to beneficiaries who paid for their medications by credit card.  These allegations relating to improper billing and unlawful financial inducements were the subject of self-disclosures by DaVita Rx and a subsequently filed whistleblower lawsuit.

 

“Improper billing practices and unlawful financial inducements to health program beneficiaries can drive up our nation’s health care costs,” said Civil Division Acting Assistant Attorney General Chad Readler.  “The settlement announced today reflects not only our commitment to protect the integrity of the healthcare system, but also our willingness to work with providers who review their own practices and make appropriate self-disclosures.” 

 

DaVita Rx has agreed to pay a total of $63.7 million to resolve the allegations in its self-disclosures and the whistleblower lawsuit.  DaVita Rx repaid approximately $22.2 million to federal healthcare programs following its self-disclosure and will pay an additional $38.3 million to the United States as part of the settlement agreement.  In addition, $3.2 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.  The Medicaid program is jointly funded by the federal and state governments.

 

“Providers should not make patient care decisions based upon improper financial incentives or encourage their patients to do the same,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas.  “The U.S. Attorney’s Office has and will continue to work cooperatively with providers that bring such issues to light to redress the losses the federal healthcare system has incurred.”

 

“The conduct being resolved in this matter presents serious program integrity concerns” said CJ Porter, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, “DaVita Rx’s cooperation in the investigation of this matter was necessary and appropriate to reach this resolution.”

 

The lawsuit resolved by the settlement was filed by two former DaVita Rx employees, Patsy Gallian and Monique Jones, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery.  The case is captioned United States ex rel. Gallian v. DaVita Rx, LLC, No. 3:16-cv-0943-B (N.D. Tex.).  The relators will receive roughly $2.1 million from the federal recovery.

 

The settlement of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).  HHS also offers several programs for health care providers to self-report potential fraud.  More information on self-disclosure processes can be found on the HHS-OIG website.

 

The investigation was conducted by HHS-OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Texas.  The claims asserted by the government are allegations only and there has been no determination of liability.