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31 July 2023
Operators of Florida Labor Staffing Companies Sentenced to Prison for Tax and Immigration ChargesRead the Press Release
MIAMI – The operators of several Key West, Florida, labor staffing companies, including PSEB Services JD, Inc., Paradise Hospitality Solutions LLC, Paradise Hospitality Group LLC, Paradise Hospitality Inc. and HBSM Corp. were sentenced to prison today for tax and immigration-related crimes.
According to court documents and statements made in court, at various times between Jan. 2014 and Nov. 2020, Eka Samadashvili, Davit Pavliashvili, and others helped run a series of labor staffing companies that facilitated the employment of non-resident aliens in hotels, bars, and restaurants in Key West and elsewhere who were not authorized to work in the United States. These labor staffing companies did not withhold federal income and Social Security and Medicare taxes from workers’ wages and did not report said wages to the IRS.
Eka Samadashvili was sentenced to 36 months in prison for conspiring to harbor aliens and induce them to remain in the United States and conspiring to defraud the United States. In addition to the term of imprisonment, U.S. District Court Judge Jose E. Martinez ordered Samadashvili to serve three years of supervised release and to pay approximately $8,473,785.69 in restitution to the United States.
Davit Pavliashvili was sentenced to 18 months in prison for conspiring to harbor aliens and induce them to remain in the United States and filing a false federal tax return with the IRS. The court also ordered Pavliashvili to serve three years of supervised release and to pay approximately $16,925.31 in restitution to the United States.
U.S. Attorney Markenzy Lapointe for the Southern District of Florida, Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, Special Agent in Charge Anthony Salisbury of Homeland Security Investigations (HSI), Miami, and Special Agent in Charge Matthew D. Line of the IRS Criminal Investigation (IRS-CI), Miami Field Office, made the announcement.
HSI Miami and IRS-CI Miami investigated the case.
Senior Litigation Counsel Christopher Clark for the Southern District of Florida and Senior Litigation Counsel Sean Beaty and Trial Attorneys Jessica A. Kraft, Nicholas J. Schilling Jr., Matthew C. Hicks and Wilson Rae Stamm of the Justice Department’s Tax Division prosecuted the case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov under case number 23-cr-10003.
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Operators of Florida Labor Staffing Companies Sentenced to Prison for Tax and Immigration ChargesRead the Press Release
The operators of several Key West, Florida, labor staffing companies, including PSEB Services JD, Inc., Paradise Hospitality Solutions LLC, Paradise Hospitality Group LLC, Paradise Hospitality Inc. and HBSM Corp. were sentenced to prison today for tax and immigration-related crimes.
According to court documents and statements made in court, at various times between Jan. 2014 and Nov. 2020, Eka Samadashvili, Davit Pavliashvili, and others helped run a series of labor staffing companies that facilitated the employment of non-resident aliens in hotels, bars and restaurants in Key West and elsewhere who were not authorized to work in the United States. These labor staffing companies did not withhold federal income and Social Security and Medicare taxes from workers’ wages and did not report said wages to the IRS.
Eka Samadashvili was sentenced to 36 months in prison for conspiring to harbor aliens and induce them to remain in the United States and conspiring to defraud the United States. In addition to the term of imprisonment, U.S. District Court Judge Jose E. Martinez ordered Samadashvili to serve three years of supervised release and to pay approximately $8,473,785.69 in restitution to the United States.
Davit Pavliashvili was sentenced to 18 months in prison for conspiring to harbor aliens and induce them to remain in the United States and filing a false federal tax return with the IRS. The court also ordered Pavliashvili to serve three years of supervised release and to pay approximately $16,925.31 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Markenzy Lapointe for the Southern District of Florida made the announcement.
Homeland Security Investigations and IRS-Criminal Investigation investigated the case.
Senior Litigation Counsel Sean Beaty and Trial Attorneys Jessica A. Kraft, Nicholas J. Schilling Jr., Matthew C. Hicks and Wilson Rae Stamm of the Justice Department’s Tax Division and Senior Litigation Counsel Christohper Clark for the Southern District of Florida prosecuted the case.
Norwalk Man Pleads Guilty to Child Pornography OffenseRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that JAKE SCOTT FLEWELLYN, 26, of Norwalk, pleaded guilty today in Bridgeport federal court to a charge related to accessing and possessing images and videos depicting child sex abuse.
According to court documents and statements made in court, in December 2021, the National Center for Missing and Exploited Children ("NCMEC") received a report from the smartphone messenger application Kik about a Kik user who was distributing videos of child pornography through its service. Kik deactivated the user’s account. In early April 2022, while federal law enforcement was investigating this matter to determine the Kik user’s identity, Kik submitted to NCMEC another report of a user account that was being used to distribute videos of child pornography. The investigation revealed that Flewellyn created both Kik accounts and, between November 2021 and April 2022, used them to distribute approximately 107 images and videos depicting child sex abuse.
Flewellyn pleaded guilty to accessing with intent to view child pornography, an offense that carries a maximum term of imprisonment of 20 years. He is scheduled to be sentenced by U.S. District Michael P. Shea in Hartford on October 23. Flewellyn is released on a $100,000 bond under electronic monitoring pending sentencing.
This matter has been investigated by the Federal Bureau of Investigation, with the assistance of the Norwalk Police Department. The case is being prosecuted by Assistant U.S. Attorneys Robert S. Dearington and Neeraj N. Patel.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Noncitizen sent to prison for firearms chargeRead the Press Release
McALLEN, Texas – A 21-year-old Mexican citizen has been ordered to federal prison following his conviction of being in possession of a firearm while in the United States illegally, announced U.S. Attorney Alamdar S. Hamdani.
Alberto Karr-Magana pleaded guilty May 22.
Today, Chief U.S. District Judge Randy Crane ordered Karr-Magana to serve 30 months in federal prison. At the hearing, the court heard additional evidence that law enforcement found not only a loaded firearm but drug paraphernalia as well. This included a scale with cocaine residue, marijuana and over $4,000 in cash. In handing down the sentence, the court noted Karr-Magana’s lengthy criminal history which included prior drug and firearm convictions. Not a U.S. citizen he is expected to face removal proceedings following his release from prison.
On March 29, law enforcement conducted a traffic stop of a 2016 Dodge Challenger. Karr-Magana was the sole occupant and driver. Authorities approached and detected a strong smell of marijuana emitting from the vehicle.
During a subsequent search of the vehicle, authorities found a loaded Glock, Model 43, 9mm caliber pistol on the driver side between the center console and carpet insulation. Authorities also located marijuana and drug paraphernalia in the vehicle. Karr-Magana admitted he did not have legal status to be in the United States and illegally entered the United States after being removed in 2020. Karr-Magana further claimed ownership of the firearm.
Karr-Magana has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation with the assistance of Alamo Police Department. Assistant U.S. Attorney Alexa D. Parcell is prosecuting the case.
This case is being prosecuted as part of the joint federal, state and local Project Safe Neighborhoods (PSN) Program. In May 2021, Attorney General Merrick B. Garland announced a new effort to reduce violent crime, including the gun violence that is often at its core. Integral to that effort was the reinvigoration of PSN, a two-decade old, evidence-based and community-oriented program focused on reducing violent crime. The updated PSN approach, outlined in the department’s Comprehensive Strategy for Reducing Violent Crime is guided by four key principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence, setting focused and strategic enforcement priorities and measuring the results of our efforts. The fundamental goal is to reduce violent crime, not simply to increase the number of arrests or prosecutions.
New York Man Pleads Guilty to String of Retail TheftsRead the Press Release
CONCORD – A New York man pleaded guilty today in federal court in Concord to transporting stolen goods across state lines, U.S. Attorney Jane E. Young announced.
Jalil McIntyre, 32, pleaded guilty to Transportation of Stolen Goods. U.S. District Court Judge Paul J. Barbadoro scheduled sentencing for November 6, 2023.
McIntyre and his co-defendant, Deshun Jackson, traveled to Lowe’s and Home Depots across the northeastern United States, including New Hampshire, Massachusetts, Rhode Island, Connecticut, New York, and New Jersey. They stole high-value commercial items, such as circuit breakers. They were seen on surveillance footage grabbing products off shelves, placing them into large plastic bags, and walking out of the stores. In total, they stole $195,604.76 worth of products across 23 separate thefts. They also attempted to steal another $46,619.07 worth of products during 11 additional unsuccessful thefts. The stolen products were brought back to New York, where both McIntyre and Jackson lived.
Jackson is currently in state custody in New York and will be transported by law enforcement to New Hampshire.
The charging statute provides a sentence of no greater than 10 years in prison, 3 years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Federal Bureau of Investigation led the investigation. Valuable assistance was provided by the Hillsborough County Attorney’s Office, the Rockingham County Attorney’s Office, the Rochester Police Department, the Suffolk County District Attorney’s Office in New York, Seabrook Police Department, Nashua Police Department, Windham Police Department, and Derry Police Department. Assistant U.S. Attorney Alexander S. Chen is prosecuting the case.
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New Orleans Man Sentenced for Federal Firearms OffenseRead the Press Release
NEW ORLEANS, LOUISIANA – On July 25, 2023, MAURICE BUTLER, age 35, a resident of New Orleans, was sentenced by United States District Court Judge Wendy B. Vitter, announced U.S Attorney Duane A. Evans.
According to court documents, BUTLER previously pleaded guilty to illegally possessing a firearm in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2). In May 2022, BUTLER was arrested by St. Bernard Sheriff’s Office deputies when, during the course of a traffic stop, they learned that he was wanted by the New Orleans Police Department for armed robbery. Deputies additionally noticed a Glock Model 17, nine-millimeter semi-automatic pistol (later determined to be stolen) in plain view on the front passenger seat of BUTLER’s vehicle. Further investigation revealed that BUTLER had previous felony convictions which prohibit his possession of a firearm.
Judge Vitter sentenced BUTLER to an 102 month term of imprisonment to be followed by a three (3) year term of supervised release. BUTLER is also required to pay a mandatory $100 special assessment fee.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the St. Bernard Parish Sheriff’s Office, and the New Orleans Police Department and prosecuted by Assistant U.S. Attorney Greg Kennedy of the Violent Crime Unit.
New Orleans Man Pleads Guilty to Federal Gun ChargeRead the Press Release
NEW ORLEANS, LA – DONALD HALE, age 34, of New Orleans, Louisiana, pleaded guilty on July 27, 2023 to possessing a firearm as a convicted felon, in violation of the Federal Gun Control Act, Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), announced United States Attorney Duane A. Evans.
According to court documents, New Orleans Police Department officers were surveilling a high crime area when they observed HALE carrying a concealed weapon. When officers approached HALE, he fled the scene and discarded the firearm. HALE was apprehended and found to be in possession of a second firearm. Further investigation revealed that HALE is a convicted felon, thus prohibiting his possession of a firearm.
HALE faces a maximum term of ten (10) years imprisonment, a fine of up to $250,000.00, up to three (3) years of supervised release following any term of imprisonment, and a mandatory $100 special assessment fee. HALE will be sentenced on October 31, 2023.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Federal Bureau of Investigation and the New Orleans Police Department. The case is being prosecuted by Special Assistant U.S. Attorney Nick Rayburn of the Violent Crimes Unit.
New Orleans Man Indicted for Federal Gun and Drug OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – GERARD TURNER, age 20, a resident of New Orleans, Louisiana, was charged on July 28, 2023 in a four-count indictment with violating the Federal Gun Control and Federal Controlled Substances Acts, announced United States Attorney Duane A. Evans.
TURNER is charged in Count 1 with being a felon in possession of a firearm and ammunition in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(8). He is charged in Count 2 with possession of a machinegun in violation of Title 18, United States Code, Sections 922(o) and 924(a)(2). He is charged in Count 3 with possession with intent to distribute marijuana in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(D). He is charged in Count 4 with possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A).
As to Count 1, TURNER faces a maximum term of imprisonment of 15 years, up to a $250,000 fine, and up to 3 years of supervised release. As to Count 2, he faces a maximum term of imprisonment of 10 years, up to a $250,000 fine, and up to 3 years of supervised release. As to Count 3, he faces a maximum term of imprisonment of five years, up to a $250,000 fine, and at least two years of supervised release. As to Count 4, he faces a mandatory minimum sentence of five years up to life imprisonment, which is to run consecutively to all other sentences, up to a $250,000 fine, and up to five years of supervised release. Each count also carries a mandatory special assessment fee of $100.
U.S. Attorney Evans reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney David Berman of the Violent Crimes Unit is in charge of the prosecution.
New Orleans Man Indicted for Federal Gun and Drug OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – CYRIL HOFFMAN, JR., age 24, a resident of New Orleans, Louisiana, was charged on July 20, 2023 in a six-count indictment for violating the Federal Gun Control and Federal Controlled Substances Acts, announced United States Attorney Duane A. Evans. The indictment was unsealed on July 26, 2023.
HOFFMAN is charged in Counts 1 and 4 with possession with intent to distribute marijuana in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(D). He is charged in Counts 2 and 5 with possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A). He is charged in Counts 3 and 6 with receipt of a firearm while under indictment in violation of Title 18, United States Code, Sections 922(n) and 924(a)(1)(D).
As to Counts 1 and 4, HOFFMAN faces a maximum term of imprisonment of five years, up to a $250,000 fine, and at least two years of supervised release. As to Counts 2 and 5, he faces a mandatory minimum sentence of five years up to life imprisonment, which is to run consecutively to all other sentences, up to a $250,000 fine, and up to five years of supervised release. As to Counts 3 and 6 he faces a maximum term of imprisonment of five years, up to a $250,000 fine, and up to three years of supervised release. Each count also carries a mandatory special assessment fee of $100.
U.S. Attorney Evans reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney David Berman of the Violent Crimes Unit is in charge of the prosecution.
New Orleans Man Indicted for Federal Arson, Drug, Firearms and Destructive Devices OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – RICKY WILSON, age 29, a resident of Jefferson, Louisiana, was charged today in a seven-count superseding indictment for arson and violations of the National Firearms Act, Federal Gun Control Act and Federal Drug Control Act, announced U.S. Attorney Duane A. Evans.
WILSON is charged in Count One with arson, in violation of Title 18, United States Code, Section 844(i)(1); in Count Two with possession of destructive devices, identified as incendiary devices known as Molotov cocktails, in violation of Title 26, United States Code, Section 5861(d); in Counts Three and Five with Possession With Intent to Distribute Marijuana, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(D); and, in Counts Four and Six with Possession of a Firearm in Furtherance of a Drug Trafficking Crime, in violation of Title 18, United States Code, Section 924(c)(1)(A).
As to Count One, WILSON faces a term imprisonment of not less than 5 years up to 15 years, a fine of up to $250,000, and up to 3 years of supervised release; as to Count Two, he faces a maximum term of imprisonment of 10 years, up to a $10,000 fine, and up to 3 years of supervised release; as to each of Counts Three and Five, he faces a maximum term of imprisonment of 5 years, up to a $250,000 fine and at least 2 years of supervised release; as to each of Counts Four and Six, he faces a mandatory consecutive term of imprisonment of 5 years up to life imprisonment, up to a $250,000 fine and up to 3 years of supervised release; and, as to Count Seven, he faces a term of imprisonment of up to 10 years, a fine of up to $250,000 and up to 3 years of supervised release. Each count also carries a mandatory special assessment fee of $100.
U.S. Attorney Evans reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Jefferson Parish Sheriff’s Office, and the Jefferson Parish District Attorney’s Office. Assistant United States Attorney Mark A. Miller of the Violent Crimes Unit is assigned the prosecution.
New Jersey Tax Preparer Arrested for Fraudulently Seeking over $124 Million in COVID-19 Employment Tax CreditsRead the Press Release
NEWARK N.J. – A New Jersey tax preparer was arrested today for fraudulently seeking more than $124 million from the IRS by filing over 1,000 false tax forms claiming COVID-19-related employment tax credits, U.S. Attorney Philip R. Sellinger and Acting Deputy Assistant Attorney General Stuart M. Goldberg announced today.
Leon Haynes, 49, of Teaneck, New Jersey, is charged by complaint with eight counts of aiding and assisting the filing of false tax returns and one count of mail fraud. He is scheduled to have his initial appearances this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.
“While our country was fighting the spread of the virus and its profound economic impact, Haynes allegedly scammed the system in a massive scheme to line his own pockets,” U.S. Attorney Philip R. Sellinger said. “As described in the complaint, Haynes abused his position as a tax preparer to steal millions of dollars by submitting over 1,000 false applications for funds set aside to help legitimately struggling businesses. My office and our partners will continue to find and prosecute fraudsters who exploited the pandemic for personal gain.”
“Today’s arrest demonstrates IRS Criminal Investigation and our law enforcement partners commitment to holding accountable those who exploited the pandemic for personal gain,” Tammy Tomlins, Special Agent in Charge of the Newark Field Office, said. “We are committed to rooting out pandemic-related fraud and holding accountable anyone seeking to profit from the public health emergency.”
“This arrest demonstrates our commitment to pursue those who attempt to defraud pandemic-related assistance programs through SSN misuse,” Gail S. Ennis, Inspector General for the Social Security Administration, said. “These programs provided aid to businesses and employees during a crisis; we will continue to collaborate with other law enforcement agencies to investigate those who allegedly misused them for personal and selfish gain,” said “I thank the IRS – Criminal Investigation, and the U.S. Postal Service for their investigative efforts and the U.S. Attorney’s Office for working this case.”
“As many of us suffered through the pandemic, Leon Haynes found a way to line his pockets at our expense,” Christopher Nielsen, Postal Inspector in Charge of the Philadelphia Division, said. “He allegedly filed over $100 million worth of fraudulent tax returns, stealing money from programs designed to support suffering businesses. Working with our colleagues at the IRS Criminal Investigative Division and the United States Attorney’s Office, we have begun the process of holding him accountable for his frauds.”
According to documents filed in this case and statements made in court:
In response to the COVID-19 pandemic and its economic impact, Congress authorized an employee retention tax credit (ERC) that a small business could use to reduce the employment tax it owed to the IRS.
To qualify, the business had to have been in operation in 2020 and to have experienced at least a partial suspension of its operations because of a government order related to COVID-19 (for example, an order limiting commerce, group meetings or travel) or a significant decline in profits. The credit was an amount equal to a set percentage of the wages that the business paid to its employees during the relevant time period, subject to a maximum amount.
Congress also authorized the IRS to give a credit against employment taxes to reimburse businesses for the wages paid to employees who were on sick or family leave and could not work because of COVID-19. This “paid sick and family leave credit” was equal to the wages the business paid the employees during the sick or family leave, also subject to a maximum amount.
From November 2020 to May 2023, Haynes, acting as a tax preparer, repeatedly exploited these programs by preparing and submitting 1,387 false forms to the IRS claiming COVID-related tax credits on behalf of himself and clients. Haynes falsely told his clients that the government was giving out COVID-relief money for businesses and that they were eligible for the money simply because they had a business. Without consulting with his clients, Haynes then submitted forms to the IRS on behalf of their businesses that grossly overstated the number of employees and amount of paid wages. Haynes submitted similarly false forms for three of his own companies. Based on these and other misrepresentations, Haynes fraudulently sought $124.8 million in tax refunds on behalf of his companies and numerous other businesses in his clients’ names.
Based on Haynes’ false claims about his own companies, the U.S. Treasury mailed him multiple tax refund checks totaling more than $1 million. The U.S. Treasury also disbursed at least $31.6 million in tax refunds to Haynes’ clients based on the false tax forms that Haynes submitted. Haynes charged each client up to a 15 percent fee based on the tax refunds the client received from the U.S. Treasury. At Haynes’ request, many clients paid him those fees in cash.
Each count of aiding and assisting in the preparation of false returns carries a maximum penalty of three years in prison and a $250,000 fine. The mail fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest.
U.S. Attorney Sellinger credited special agents IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott, and postal inspectors from the U.S. Postal Service, under the direction of Inspector in Charge Christopher Nielsen, Philadelphia Division, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the Economic Crimes Unit in Newark and Trial Attorney Samuel B. Bean of the U.S. Department of Justice, Tax Division.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
haynes.complaint.pdfNew Jersey Tax Preparer Arrested for Fraudulently Seeking over $124 Million in COVID-19 Employment Tax CreditsRead the Press Release
A New Jersey tax preparer was arrested today on charges related to fraudulently seeking over $124,000,000 from the IRS by filing over 1,000 tax returns falsely claiming COVID-19-related employment tax credits.
In response to the COVID-19 pandemic and its economic impact, Congress authorized an employee retention tax credit that a small business could use to reduce the employment tax it owed to the IRS, also known as the “employee retention credit” or ERC.
Congress also authorized the IRS to give a credit against employment taxes to reimburse businesses for the wages paid to employees who were on sick or family leave and could not work because of COVID-19. This “paid sick and family leave credit” was equal to the wages the business paid the employees during the sick or family leave, also subject to a maximum amount.
According to court documents, from November 2020 to May 2023, Leon Haynes of Teaneck, New Jersey, allegedly repeatedly exploited a program created to help small businesses impacted by the COVID-19 pandemic. Acting as a tax preparer, Haynes allegedly prepared and submitted approximately 1,387 false forms to the IRS claiming COVID-related tax credits on behalf of himself and clients. The complaint further alleges that Haynes falsely told his clients that the government was giving out COVID-relief money for businesses and that they were eligible for the money simply because they had a business. Allegedly, without consulting with his clients, Haynes then submitted forms to the IRS on behalf of their businesses that grossly overstated the number of employees and amount of wages paid. Haynes allegedly submitted similarly false forms for three of his own companies.
Based on these and other misrepresentations, Haynes’ conduct allegedly sought approximately $124,751,995 in tax refunds on behalf of his companies and numerous other businesses in his clients’ names. The IRS allegedly mailed Haynes multiple tax refund checks totaling $1,007,966 for his own companies and allegedly disbursed a total of $31.6 million in refunds to Haynes’ clients and himself based on the false tax forms that Haynes submitted. The complaint further alleges that Haynes charged many clients a fee of as much as 15% of the refund they received.
If convicted, Haynes faces a maximum penalty of three years in prison for each count of aiding and assisting in the preparation of a false return and 20 years in prison for mail fraud. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Philip R. Sellinger for the District of New Jersey made the announcement.
IRS-Criminal Investigation, Social Security Administration-Office of the Inspector General, and the U.S. Postal Inspection Service are investigating the case.
Trial Attorney Samuel B. Bean of the Justice Department’s Tax Division and Assistant U.S. Attorneys Fatime Meka Cano of the District of New Jersey’s Economic Crimes Unit are prosecuting the case.
A complaint/information is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Monroe County Man Charged with Committing over $2.2 Million in Covid-19 Pandemic FraudRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Brian J. Albelli, age 45, of Stroudsburg, Pennsylvania, and formerly of Deerfield Beach, Florida, was charged in a criminal information on July 27, 2023, with wire fraud and money laundering.
According to United States Attorney Gerard M. Karam, the information alleges that Albelli owned and operated multiple corporate entities in Pennsylvania and Florida. Albelli allegedly filed approximately 20 fraudulent applications for pandemic stimulus funds, including under the Payment Protection Program (PPP), and for Economic Injury and Disaster Loans (EIDLs). The applications allegedly submitted by Albelli were filed on behalf of corporate entities that did not, in fact, have actual business operations, and that bore inflated revenues and employee headcount, and nonexistent gross receipts and costs of goods sold. The applications also included a forged IRS income tax return, and forged federal employment tax documents.
Albelli allegedly obtained in excess of approximately $2,200,000 in PPP and EIDL funds, for himself and his family members, through filing the fraudulent applications. Instead of using the funds on business expenses, Albelli allegedly used them on purchasing boats and automobiles, real estate, retail shopping, and other personal expenses. Albelli also is charged with committing money laundering by concealing the fraudulent proceeds of his crimes.
The PPP and EIDL programs, both funded by the March 2020 CARES Act, were designed to help small businesses facing financial difficulties during the COVID-19 pandemic. PPP funds were offered in forgivable loans, provided that certain criteria are met, including use of the funds for employee payroll, mortgage interest, lease, and utilities expenses. EIDL funds are offered in low-interest rate loans, designated for specific business expenses, such as fixed debts, payroll, and business obligation.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
The case was investigated by the Internal Revenue Service’s Criminal Investigations. Assistant U.S. Attorneys Phillip J. Caraballo and Sean Camoni are prosecuting the case.
The maximum penalties under federal law for both charges are 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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Missouri Laboratory Owners Agree to Pay $1.9 Million and Relinquish $7 Million in Escrow in Settlement of Civil Fraud ClaimsRead the Press Release
ST. LOUIS – The owners of a Fenton, Missouri-based clinical testing laboratory have agreed to pay $1.9 million and relinquish another nearly $7 million being held in escrow to settle civil claims alleging that they submitted claims for lab tests that were not medically necessary.
The settlement agreement was signed by Thyroid Specialty Laboratory Inc., which does business as TEN Healthcare (TEN), their management company, 3890 Management LLC, and TEN Marketing, which employs the sales and marketing staff of TEN.
The settlement will resolve allegations that TEN billed for tests that were not medically necessary. The government alleges that from June 12, 2018 to July 3, 2023, TEN falsely represented to medical providers that TEN’s Upper Respiratory Infection (URI) and Urinary Tract Infection (UTI) Polymerase Chain Reaction (PCR) testing panels were reasonable and medically necessary. The government alleges that until about Feb. 10, 2021, TEN used a requisition form that ensured that medical providers did not make an independent medical necessity decision about each laboratory test ordered by including PCR tests that were not medically necessary or reasonable when providers selected a URI or UTI PCR panel. The panel included over thirty pathogens that lacked a common symptomatology and, therefore, did not reasonably require PCR testing to rule out the included pathogens, the government alleges.
Even after Feb. 10, 2021, TEN continued to represent to those providers and to the public that the entire URI and UTI PCR panels were reasonable and superior to other forms of testing, the government alleges.
TEN allegedly falsely submitted claims for payment to Medicare, Medicaid, TRICARE and the Railroad Retirement Board for their URI and UTI PCR panels of tests when they knew or should have known that the tests were not reasonable or medically necessary.
TEN continued to submit claims for payment to Medicare, Medicaid, TRICARE, and the RRB for their URI and UTI PCR panels even after Medicare began rejecting certain billing codes. Rather than deciding to stop billing for those panels or re-evaluate the legitimacy of such panels, TEN selected other billing codes to circumvent the rejections it was receiving from Medicare, the government alleges.
From on Jan. 1, 2016, to March 1, 2021, TEN also allegedly submitted false claims for reimbursement for therapeutic drug assays and specimen validity testing using certain CPT codes at the same time as they submitted claims for reimbursement using a different code that incorporates some of the same tests, the government alleges. TEN was not entitled to the additional reimbursement, but continued to submit these claims even after Medicaid conducted an audit of the TEN Healthcare Entities in 2017 and collected an overpayment in 2019 due to these billing practices, the government alleges.
On May 19, 2020, the Centers for Medicare & Medicaid Services suspended Medicare payments to TEN that now total more than $6.9 million.
“This Settlement Agreement is neither an admission of liability by the TEN Healthcare Entities nor a concession by the United States that its claims are not well founded,” the agreement says.
"Laboratories have a responsibility to ensure that claims they submit to Medicare are for legitimate and medically necessary services," said Curt L. Muller, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). "HHS-OIG is committed to ensuring that providers fulfill that fundamental obligation, and to investigating those who, with reckless disregard for American taxpayers and patients, attempt to waste or defraud federal health care programs."
The case was investigated by HHS-OIG, the Missouri Attorney General’s Medicaid Fraud Control Unit, and the Defense Criminal Investigative Service and the FBI. Assistant U.S. Attorney Amy Sestric handled the case.
Mescalero Man Charged with Assault with a Dangerous Weapon in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Raul Bujanda, Special Agent in Charge of the FBI Albuquerque Field Office, announced today that Lestat Cree Valdez made an initial appearance in federal court on a criminal complaint charging him with assault with a dangerous weapon. Valdez, 20, of Mescalero, will remain in custody pending trial.
According to the criminal complaint, the victim was sleeping on the couch in a residence located on the Mescalero Apache reservation when she awoke to being stabbed in the head and chest. A witness heard the victim call for help and observed Valdez striking the victim. The witness chased Valdez from the residence before returning to provide medical assistance to the victim until EMS arrived.
Later that day, Valdez turned himself in to law enforcement. During a subsequent interview, Valdez admitted to ingesting LSD and two unknown drugs and described losing control of his body. Valdez stated that during his acid “trip,” he observed himself stabbing the victim.
An indictment is only an allegation. A defendant is presumed innocent unless and until proven guilty. If convicted, Valdez faces 10 years in prison.
This case was investigated by the Las Cruces Resident Agency of the Federal Bureau Investigation with assistance from the Bureau of Indian Affairs. Assistant United States Attorney Eliot Neal is prosecuting the case.
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Mercer County Man Pleads Guilty to Child Exploitation CrimeRead the Press Release
BLUEFIED, W.Va. – Eric Shawn Phillips, 43, of Princeton, pleaded guilty today to enticement of a minor.
According to court documents and statements made in court, from on or about April 19, 2021, to on or about February 17, 2022, Phillips persuaded, induced, enticed and coerced a minor female to engage in sexual activity with him. Phillips admitted that his criminal conduct included sending numerous sexually explicit messages to the minor female via text messaging and social media messaging apps.
Phillips is scheduled to be sentenced on November 13, 2023. Phillips and the United States Attorney’s Office have agreed that a sentence of 30 years in prison and a lifetime of supervised release is the appropriate punishment for his crimes. Phillips must also register as a sex offender.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Mercer County Sheriff’s Department.
Senior United States District Judge David A. Faber presided over the hearing. Assistant United States Attorneys Julie M. White and Alex Redmon are prosecuting the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 1:22-cr-194.
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Martin’s Point Health Care Inc. to Pay $22,485,000 to Resolve False Claims Act AllegationsRead the Press Release
Martin’s Point Health Care Inc. (Martin’s Point), headquartered in Portland, Maine, has agreed to pay $22,485,000 to resolve allegations that it violated the False Claims Act by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees in order to increase reimbursements from Medicare.
Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed care insurance plans called Medicare Advantage Plans (MA Plans). MA Plans are paid a per-person amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the diagnoses of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with diagnoses more expensive to treat will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.
Martin’s Point operates Medicare Advantage plans for beneficiaries living in Maine and New Hampshire. The United States alleged that, from 2016 to 2019, Martin’s Point engaged in chart reviews of their Medicare Advantage beneficiaries to identify additional diagnosis codes that had not been submitted to Medicare. Many of the additional codes submitted, however, were not properly supported by the patients’ medical records. The government alleged that Martin’s Point nevertheless submitted those diagnosis codes, which resulted in higher payments from CMS.
“The government expects those who participate in Medicare Advantage to provide accurate information to ensure that proper payments are made for the care received by enrolled beneficiaries,” said Deputy Assistant Attorney General Michael D. Granston of the Justice Department's Civil Division, Commercial Litigation Branch. “Today’s result sends a clear message to the Medicare Advantage community that the United States will take appropriate action against those who knowingly submit inflated claims for reimbursement.”
“It is a privilege for health plans to provide services to Medicare beneficiaries, not a right. Medicare Advantage Plan sponsors that submit inaccurate claim information in order to justify inflated payments undermine the financial integrity of the program,” said Deputy Inspector General for Investigations Christian J. Schrank at the Department of Health and Human Services, Office of Inspector (HHS-OIG). “HHS-OIG remains committed to protecting taxpayer-funded health care programs, including Medicare Advantage.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Alicia Wilbur, a former manager in Martin’s Point’s Risk Adjustment Operations group. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Wilbur v. Martin’s Point Health Care Inc., No. 2:18-cv-00254 (DME). As part of today’s resolution, the whistleblower will receive approximately $3.8 million.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the District of Maine, with assistance from HHS-OIG.
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare 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).
The matter was handled by Trial Attorney J. Jennifer Koh of the Justice Department’s Civil Division and Assistant U.S. Attorneys John Osborn and James Concannon for the District of Maine with the assistance of the U.S. Attorney’s Office’s in-house auditor.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
SettlementMarion Man Sentenced to Federal Prison for Conspiring to Distribute CocaineRead the Press Release
A man from Marion, Iowa, was sentenced today to 5 years in federal prison for his involvement in selling cocaine.
Kain Cortez, age 25, from Marion, Iowa, received the prison term after a November 3, 2022 guilty plea to one count of conspiracy to distribute a controlled substance.
Evidence at the plea and sentencing hearings showed that Cheyenne Gonzales and Cortez worked together to sell cocaine in the Cedar Rapids area between April and June 2022. Law enforcement utilized a confidential source to conduct controlled buys of cocaine from Gonzales, and Cortez was present with Gonzales during some of the controlled buys. On June 1, 2022, investigators observed a meeting between Gonzales, Cortez, and two other individuals outside of Gonzales’s and Cortez’s shared residence. On that date, Gonzales and Cortez paid approximately $15,000 in cash for half a kilogram of cocaine and approximately 20 pounds of marijuana.
Cortez was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Cortez was sentenced to 60 months’ imprisonment. Cortez must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
On November 14, 2022, Gonzales pled guilty to one count of conspiracy to distribute a controlled substance. Gonzales is scheduled to be sentenced on August 15, 2023.
Cortez is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Special Assistant United States Attorney Adam J. Vander Stoep and was investigated by the Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Linn County Sheriff's Office; the Cedar Rapids Police Department; the Marion Police Department; and the Iowa Division of Narcotics Enforcement.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 22-CR-00054.
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Man Sentenced to Federal Prison After Using Instagram to Illegally Sell Guns, Including to a MinorRead the Press Release
INDIANAPOLIS- Kelvin Henderson, 23, of Indianapolis, Indiana, has been sentenced to 1 year in federal prison after pleading guilty to making a false statement during the purchase of a firearm.
According to court documents, between April 2 and April 26, 2021, Kelvin Henderson visited a federally licensed Indiana firearms dealer at its Indianapolis, Carmel, and Lebanon locations. In total, Henderson purchased six Glock 9mm handguns and one Ruger AR-556. Multiple purchases of identical firearms in a short period of time is indicative of gun trafficking. As part of each purchase, Henderson falsely stated on required federal firearms transaction forms that he was the actual buyer of the firearms. In fact, Henderson illegally purchased the guns on behalf of others, a gun trafficking scheme known as “straw purchasing.”
A straw purchase scheme is when a person not prohibited from purchasing or possessing a firearm falsely states to a federally licensed gun dealer that they are purchasing a firearm for themselves, when they know that the gun is actually intended for someone else, frequently someone who is prohibited from purchasing or possessing the firearm themselves.
Surveillance video from the gun dealer showed Henderson handing one of the firearms he purchased to another person immediately after leaving the store. In an interview with investigators from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Henderson admitted that he used Instagram to arrange to purchase the guns for two individuals, including one who he stated was a student at an Indianapolis high school and too young to purchase firearms legally.
“Gun traffickers who put deadly weapons in the hands of people with no business having them fuel the epidemic of gun violence in our communities,” said Zachary A. Myers, United States Attorney for the Southern District of Indiana. “Today’s gun traffickers are using Instagram and other social media platforms to illegally put guns in the hands of children and criminals. Together with our partners at ATF we will make our neighborhoods safer by targeting the sources of crime guns and holding illegal gun traffickers accountable.”
“Kelvin Henderson not only illegally purchased firearms, but he did so knowingly risking the lives of minors and the safety of our community. Straw purchasing is not a victimless crime and will not be tolerated,” said Special Agent in Charge Daryl McCormick. “ATF and its law enforcement partners will identify and hold accountable those individuals who continue to contribute to the violence in our cities.”
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. The sentence was imposed by U.S. District Court Judge, Matthew P. Brookman. Judge Brookman also ordered that Henderson be supervised by the U.S. Probation Office for 1 year following his release from federal prison.
U.S. Attorney Myers thanked Assistant United Stats Attorney Lawrence D. Hilton, who prosecuted this case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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Luzerne County Man Charged with Committing $350,000 in Covid-19 Pandemic FraudRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Daniel Wasielewski, age 58, of Wilkes-Barre, Pennsylvania, was charged on July 28, 2023, in a criminal information with wire fraud.
According to United States Attorney Gerard M. Karam, the information alleges that Wasielewski filed and assisted others in filing fraudulent applications for pandemic stimulus funds, including under the Payment Protection Program (PPP), for Economic Injury and Disaster Loans (EIDLs), and for Pandemic Unemployment Assistance (PUA) benefits. The PPP and EIDL applications allegedly submitted by Wasielewski and his confederates were filed on behalf of corporate entities that did not, in fact, have actual business operations, and that bore false revenues and other business information. The applications also included forged IRS tax documents.
Wasielewski allegedly received approximately $350,000 in PPP, EIDL, PUA, and other fraudulently-obtained funds, for himself and others. Instead of using the funds on business expenses, Wasielewski and others allegedly used them to purchase cryptocurrency and on other personal expenses.
The PPP and EIDL programs, both funded by the March 2020 CARES Act, were designed to help small businesses facing financial difficulties during the COVID-19 pandemic. PPP funds were offered in forgivable loans, provided that certain criteria are met, including use of the funds for employee payroll, mortgage interest, lease, and utilities expenses. EIDL funds are offered in low-interest rate loans, designated for specific business expenses, such as fixed debts, payroll, and business obligation. The PUA program was created by the CARES Act, as part of the United States government’s efforts to mitigate the impact of the COVID-19 pandemic on the public’s health and economic well-being. The PUA program was designed to provide unemployment benefits to individuals not eligible for regular unemployment compensation or extended unemployment benefits.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
The case was investigated by the United States Postal Inspection Service. Assistant U.S. Attorneys Phillip J. Caraballo and Sean Camoni are prosecuting the case.
The maximum penalties under federal law for the charge of wire fraud is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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Long Island Chiropractor Sentenced to Prison for Health Care FraudRead the Press Release
Earlier today, Peter Adamczak, a licensed chiropractor operating in East Meadow, Long Island, was sentenced by United States District Judge Joanna Seybert in federal court in Central Islip to a year and a day in prison for health care fraud. As part of that sentence, Judge Seybert ordered Adamczak to pay nearly $1 million in restitution and to forfeit over $180,000. Adamczak had billed a private insurance company over $1 million for acupuncture services that were never performed. The defendant pleaded guilty to the charge in August 2022.
Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Acting Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Lucy Lang, Inspector General of New York State, announced the sentence.
“Today’s sentence demonstrates that Adamczak’s long-running scheme, in which he brazenly submitted false and fraudulent billing claims to an insurance provider, ultimately came at a personal cost to the defendant,” stated United States Attorney Peace. “This Office will continue to hold accountable dishonest healthcare professionals who abuse the trust placed in them by lying and cheating in order to line their own pockets.”
“Health insurance fraud is not a victimless crime as it increases the cost of coverage for those who need it most and wastes precious medical resources,” state New York State Inspector General Lang. “I want to thank the United States Attorney for the Eastern District of New York Breon Peace for delivering justice on this case and to the OIG staff who worked on exposing this audacious scheme.”
From 2016 to 2020, Adamczak submitted over $1 million in fraudulent claims for reimbursement to a private insurance company. Adamczak was not licensed to perform acupuncture but claimed that the services were performed by an unaffiliated acupuncturist who leased office space from Adamczak. In reality, neither the unaffiliated acupuncturist nor Adamczak performed the billed acupuncture services. Based on Adamczak’s fraudulent claims, the private insurance company paid reimbursements to its beneficiaries who, in turn, delivered the payments to Adamczak. In one case, a beneficiary who was a relative of Adamczak, deposited the reimbursement checks to their personal bank account and kept the funds.
Assistant United States Attorney John Vagelatos is in charge of the prosecution. Assistant United States Attorney Claire Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters.
The Defendant:
PETER ADAMCZAK
Age: 66
Huntington, New YorkE.D.N.Y. Docket No. 22-CR-287 (JS)
Lincoln Man Sentenced to 13 Years for Discharging a Firearm During a Drug CrimeRead the Press Release
Acting United States Attorney Susan Lehr announced that Buongkhoy Daniel Wal, 19, of Lincoln, Nebraska, was sentenced today by Senior United States District Judge John M. Gerrard to 13 years’ imprisonment for discharging a firearm during a drug trafficking crime. Wal was also sentenced to a five-year term of supervised release to be served after he completes his prison sentence. There is no parole in the federal system. Wal pleaded guilty to his offense on March 21, 2023.
On August 2, 2021, police responded to reports of a shooting which occurred near the Edgewood Theaters and Target on the south side of Lincoln. Jayden Prentice, Christopher Duncan, and Riley Mills were present when police arrived. Duncan and Prentice had suffered gunshot wounds. First responders resuscitated Duncan using CPR. All were then transported to the hospital. Duncan and Prentice each spent a month in the hospital being treated for their wounds, and Duncan had to have one of his legs amputated.
The investigation would later reveal that a group of people, including Wal and Xavier Gary, arranged to purchase a half-pound of marijuana from Prentice, Duncan, and Mills. The planned purchase was a ruse for a robbery. Wal and an unknown person got into the back of Duncan’s vehicle. Both Wal and the unknown person were seen carrying firearms. Wal began counting out money. At that time, the unknown person pulled out his gun, said something to the effect of, “this is how this is going to go,” and then shot Prentice in the face. Mills was seated in the backseat next to Wal and the unknown person. Mills and the unknown person began struggling over the gun. Meanwhile, several more gunshots were heard being fired just outside the car. Wal, the unknown person, and the others in their group then fled the scene. In their haste to get away, they dropped one of the firearms, a .45 caliber handgun. Ballistics reports showed that handgun was the weapon which fired the shot that struck Prentice, and it fired at least one of the shots that struck Duncan. A DNA profile was also found on that firearm. The DNA profile was found to contain a mixture of DNA from three people, and it was consistent with Wal and Gary both being contributors.
Gary pleaded guilty to his offense, attempted possession of marijuana with the intent to distribute, on March 21, 2023. Prentice, Duncan, and Mills each pleaded guilty to offenses involving the possession of controlled substances with the intent to distribute, and possession of firearms in furtherance of a drug trafficking offense. On June 24, 2022, Mills was sentenced to a 92-month term of imprisonment, to be followed by a three-year term of supervised release. Prentice was sentenced on July 6, 2022, to a 72-month term of imprisonment, and a three-year term of supervised release. Duncan is scheduled for sentencing on November 7, 2023.
The investigation was conducted by the Lincoln Police Department and the Federal Bureau of Investigation. This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Lexington County Men Plead Guilty in Federal Court to Methamphetamine ConspiracyRead the Press Release
COLUMBIA, SOUTH CAROLINA —Christopher David Jeffcoat, 42, and Kenneth Eddy Frye, 59, both of Lexington, have pleaded guilty in federal court to conspiracy to possess with the intent to distribute 50 grams or more of methamphetamine.
Evidence obtained in the investigation revealed that Jeffcoat and Frye—along with a third defendant, Jerry Lynn Cordell—were involved in distributing methamphetamine in Lexington County. The Lexington County Sheriff’s Department Narcotics Enforcement Team along with the Bureau of Alcohol, Tobacco, Firearms and Explosives began an investigation of the men. Using an undercover agent, they made methamphetamine purchases from the men on seven different occasions, buying amounts ranging from 50 grams up to over 200 grams at a time.
Both men face a maximum penalty of 40 years in federal prison, a fine of up to $250,000, and 4 years of supervision to follow the term of imprisonment. United States District Judge Sherri A. Lydon accepted the guilty pleas and will sentence both men after receiving and reviewing a sentencing report prepared by the U.S. Probation Office.
Cordell previously pleaded guilty to his involvement in the conspiracy and is also awaiting sentencing.
This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lexington County Sheriff’s Department NET team. Assistant U.S. Attorney William K. Witherspoon is prosecuting the case.
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L.A. Harbor Area Man Sentenced to 15 Years in Federal Prison for Armed Robbery Spree that Targeted South Bay BusinessesRead the Press Release
LOS ANGELES – A Wilmington man was sentenced today to 180 months in federal prison for committing an armed robbery spree of businesses in the South Bay area of Los Angeles County, during which time he pointed a gun at a pregnant woman working at a gas station.
Stevo Mijanovic, 20, was sentenced by United States District Judge R. Gary Klausner, who also ordered him to pay $2,733 in restitution.
Mijanovic pleaded guilty on March 6 to two counts of Hobbs Act robbery and one count of brandishing a firearm in furtherance of a crime of violence.
From August 2021 to January 2022, Mijanovic robbed six businesses in the Wilmington area of Los Angeles, robbed two other businesses in San Pedro and Torrance, and attempted to rob another business in San Pedro. The victim businesses were restaurants, convenience stores and gas stations and their employees.
“[Mijanovic] committed six armed robberies, one attempted armed robbery, and two robberies in which he brandished what appeared to be a firearm,” prosecutors wrote in a sentencing memorandum. “He terrorized victim employees and bystanders at each location, using fear to obtain money from the victim businesses.”
In December 2021, Mijanovic pointed a firearm at a victim, who was a pregnant gas station employee in Wilmington. The victim “complied out of fear as she told [Mijanovic] she was pregnant and allowed [him] to take approximately $180 from the cash register,” according to Mijanovic’s plea agreement.
Mijanovic admitted to netting between $80 and $1,000 per robbery. He obtained $2,733 during his crime spree.
The FBI and the Los Angeles Police Department investigated this matter.
Assistant United States Attorney Jennifer Chou prosecuted this case.
Knott County Man Sentenced to 150 Months for Armed Methamphetamine TraffickingRead the Press Release
LONDON, Ky. — A Knott County, Ky., man, Michael Nolan Slone, 37, was sentenced on Friday to 150 months in federal prison, by U.S. District Judge Robert Wier, for possession with intent to distribute 50 grams or more of methamphetamine, possession of a firearm in furtherance of drug trafficking, possession of a firearm as a convicted felon, and possessing a firearm with an obliterated serial number.
Slone, who represented himself at trial, was found guilty by the jury following a two-day trial in March. According to the facts introduced at trial, a Kentucky State Police trooper discovered Slone passed out in the driver seat of his vehicle at a gas station in Hindman. The encounter ended with the location of over 100 grams of methamphetamine and two firearms. One firearm was on Slone’s person and the other, an AR-style rifle, was located directly over the methamphetamine, and had the magazines “jungle-stacked” together for quicker reloading capability.
Slone was prohibited from firearm possession due to prior felony convictions for First Degree Burglary and Attempted Murder, which he obtained after shooting two individuals in August of 2010.
Under federal law, Slone must serve 85 percent of his prison sentence. Upon his release from prison, he will be under the supervision of the U.S. Probation Office for five years.
Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky; R. Shawn Morrow, Special Agent in Charge, ATF, Louisville Field Division; and Col. Phillip Burnett, Jr., jointly announced the sentence. The investigation was conducted by the ATF and the KSP.
This case was prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Eastern District of Kentucky, U.S. Attorney Shier coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
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Justice Department Sues Alabama Department of Transportation for Disability Discrimination in HiringRead the Press Release
The Justice Department today filed a lawsuit against the Alabama Department of Transportation (ALDOT) for violating Title I of the Americans with Disabilities Act (ADA). The lawsuit, filed in the U.S. District Court for the Northern District of Alabama, alleges that ALDOT refused to hire an individual because of his physical disability that restricts his ability to lift heavy objects.
According to court documents, the individual worked successfully as a Transportation Maintenance Technician (TMT) at ALDOT for many years. He was injured on the job, resulting in a disability that limits his ability to lift heavy objects. Even with his disability, he continued to work successfully with accommodations at ALDOT for several years. However, the United States alleges, when the individual reapplied to be a TMT after a brief retirement, ALDOT refused to re-hire him because of his disability and instead hired less experienced applicants.
“Qualified people with disabilities must have an equal opportunity to participate in the workforce,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This lawsuit reflects the Justice Department’s ongoing commitment to protect the employment rights of people with disabilities under the ADA.”
Title I of the ADA prohibits employers from discriminating against qualified individuals on the basis of disability. This includes refusing to hire qualified applicants because of their disability, or using selection criteria that screen out qualified applicants that are not job-related or consistent with business necessity.
This case is being handled by the department’s Civil Rights Division and the U.S. Attorney’s Office for the Northern District of Alabama based on a referral from the Equal Employment Opportunity Commission.
For more information on the ADA, please call the department’s toll-free ADA Information Line at 800-514-0301 (TTY 1-833-610-1264) or visit www.ada.gov. For more information on the Civil Rights Division, please visit www.justice.gov/crt. Individuals who believe they may have been victims of discrimination may file a complaint at www.civilrights.justice.gov.
ComplaintJury Convicts local man for sex trafficking 15-year-oldRead the Press Release
HOUSTON – A 31-year-old man who resided in Houston has been found guilty for trafficking a minor female for commercial sex using force, fraud or coercion, announced U.S. Attorney Alamdar S. Hamdani.
Jury deliberated for approximately five hours before returning a guilty verdict against Giovanny Xavier Limon aka Ace or Ace One following a three-day trial.
Limon trafficked a 15-year-old minor female for commercial sex during May and June 2022. The girl was forced to engage in commercial sex with strangers on numerous occasions and had to turn over all proceeds to Limon and his associates.
Limon, twice her age, forced her to use meth and photographed her in lingerie he and others had provided. Those photographs, among others, were used to advertise the minor on the internet. The jury saw evidence of how Limon displayed his moniker in the photos used in the commercial sex ads leaving little doubt who was controlling the minor’s actions.
The jury also heard how Limon harbored the minor in several hotels as well as residences his family members controlled.
She testified at trial and described how Limon often carried a knife, supplied her with drugs, tattooed her arm, intimidated her and destroyed her will to live.
“Meth, a gun, and intimidation. Those were the tools Limon used to exploit and traffic a young girl for his own financial benefit– a child who then lost her will for life itself,” said Hamdani. “This conviction ensures he can never do this to another child and sends a message to anyone who wants to use our children for commercial sex – we will find you and bring you to justice.”
The defense attempted to convince the jury that the girl was acting alone and Limon was just a scapegoat so she would not get in trouble at home when she returned. They did not believe those claims and found Limon guilty.
U.S. District Judge David Hittner presided over trial and set sentencing for Oct. 26. At that time, Limon faces up to life in federal prison.
He has been and will remain in custody pending that hearing.
The Human Trafficking Rescue Alliance (HTRA) conducted the investigation.
Assistant U.S. Attorneys Sherri L. Zack and Kimberly Ann Leo prosecuted the case.
HTRA law enforcement includes members of the Houston Police Department, FBI, Homeland Security Investigations, Texas Attorney General’s Office, IRS Criminal Investigation, Department of Labor (DOL), DOL – Wage and Hour Division, Department of State, Texas Alcoholic and Beverage Commission, Texas Department of Public Safety, Department of Homeland Security – Office of Inspector General (OIG), Social Security Administration – OIG and Sheriff’s Offices in Harris and Montgomery counties in coordination with District Attorney’s offices in Harris, Montgomery and Fort Bend Counties.
Established in 2004, the United States Attorney’s office in Houston formed HTRA to combine resources with federal, state and local enforcement agencies and prosecutors, as well as non-governmental service organizations to target human traffickers while providing necessary services to those that the traffickers victimized. Since its inception, HTRA has been recognized as both a national and international model in identifying and assisting victims of human trafficking and prosecuting those engaged in trafficking offenses.
Jonesville Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
BIG STONE GAP, Va. – A Jonesville, Virginia man was sentenced last week to 78 months in prison for conspiring to distribute methamphetamine.
John Joel Foster, 51, who had previously been convicted of illegal possession of a firearm by a convicted felon in 2009, previously pled guilty to one count of conspiracy to distribute and possession with the intent to distribute five grams or more of methamphetamine.
According to court documents, beginning in September 2021, Foster and others conspired to sell crystal methamphetamine in and around Lee County, Virginia.
Foster purchased at least 28 grams of crystal or “ice” methamphetamine from co-conspirator Billy King every few weeks during the course of the conspiracy. King introduced Foster to Garrett Teffeteller, who also routinely supplied methamphetamine to Foster.
King and Teffeteller have pled guilty for their roles in the conspiracy and will be sentenced later this year.
United States Attorney Christopher R. Kavanaugh and Special Agent in Charge Craig B. Kailimai of the Washington Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives made the announcement.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Virginia State Police, and the Lee County Sheriff’s Office investigated the case.
Assistant U.S. Attorney Lena L. Busscher prosecuted the case.
Justice Department Officials to Participate in National Night Out Events Across the CountryRead the Press Release
****** MEDIA ADVISORY ******
WASHINGTON – Tomorrow, Attorney General Merrick B. Garland, Deputy Attorney General Lisa O. Monaco, Associate Attorney General Vanita Gupta, and Justice Department officials will participate in National Night Out (NNO) events across the country as part of a Department-wide effort to bring attention to events that build stronger communities. The Attorney General will attend events in the Philadelphia-area, the Deputy Attorney General will attend events in Nashville, Tennessee, and the Associate Attorney General will attend events in Washington, D.C.
NNO is an annual community-building campaign that promotes police-community partnerships and neighborhood camaraderie to make our neighborhoods safer, better places to live. In most areas of the country, the program culminates annually on the first Tuesday of August.
Established in 1984 from a Bureau of Justice Assistance (BJA) grant, the goal of NNO is to build relationships with and between communities and law enforcement. NNO enhances the relationship between neighbors and law enforcement while bringing back a true sense of community.
Deputy Attorney General Monaco Events in Nashville
The Deputy Attorney General will attend NNO events in Nashville. She will be joined by U.S. Attorney Henry Leventis for the Middle District of Tennessee and Chief of Police John Drake of the Metropolitan Nashville Department Police Department.
Approx. 3:30 p.m. CT / 4:30 p.m. ET
- Edgehill Apartments Resident Association
- 1277 12th Avenue S, Nashville, TN 37203
Approx. 5 p.m. CT / 6 p.m. ET
- East Park Community Center
- 600 Woodland Street, Nashville, TN 37203
OPEN PRESS
For information on National Night Out events in your community, visit www.natw.org.
For more information on the NNO events, reach out to Catherine.Morris2@usdoj.gov and:
- Emma.Dulaney@usdoj.gov for the Attorney General
- Kelsey.Pietranton@usdoj.gov for the Deputy Attorney General
- Terrence.Clark@usdoj.gov for the Associate Attorney General
Greenbrier County Woman Sentenced to Prison for Federal Gun CrimeRead the Press Release
BLUEFIELD, W.Va. – Arica L. Anderson, 37, of Lewisburg, was sentenced today to one year and four months in prison, to be followed by three years of supervised release, for being a felon in possession of a firearm.
According to court documents and statements made in court, on January 2, 2022, a law enforcement officer conducted a traffic stop of a vehicle in the Pickaway area of Monroe County in which Anderson was a passenger. The officer saw Anderson try to conceal an Acier Comprime, .25-caliber pistol. Anderson admitted to possessing the firearm.
Federal law prohibits a person with a prior felony conviction from possessing a firearm or ammunition. Anderson was prohibited from possessing a firearm because of her prior felony conviction for conspiracy to commit a felony offense: robbery in the first degree, in Monroe County Circuit Court on September 16, 2013.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the West Virginia State Police.
Senior United States District Judge David A. Faber imposed the sentence. Assistant United States Attorney Andrew D. Isabell prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 1:22-cr-104.
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Gary Man Sentenced to 130 Months in PrisonRead the Press Release
HAMMOND- Kevin Lee Myers, age 42, of Gary, Indiana, was sentenced by United States District Court Senior Judge James T. Moody after pleading guilty to making counterfeit U.S. currency and being a felon in possession of ammunition, announced United States Attorney Clifford D. Johnson.
Myers was sentenced to 130 months in prison followed by 2 years of supervised release.
According to documents in the case, the investigation revealed that from March to July 2022, Myers manufactured more than $150,000 in counterfeit U.S. currency. A search warrant at Myers’ residence resulted in the recovery of counterfeiting equipment including, computers, printers, paper cutters, and ink cartridges, as well as a briefcase containing more than $138,000 in counterfeit bills. Various firearms and ammunition were also discovered. Myers has prior felony convictions and, as such, cannot possess the firearms and ammunition in this case.
The case was investigated by the United States Secret Service with assistance from the Lake County Sheriff’s Department and the Portage Police Department. This case was prosecuted by Assistant United States Attorney Kevin F. Wolff.
Former Omaha Police Officer Sentenced to 36 Years for Production and Possession of Child PornographyRead the Press Release
Acting United States Attorney Susan Lehr announced that Christopher Groth 39, of Gretna, Nebraska, was sentenced today in Lincoln, Nebraska, by Senior United States District Judge John M. Gerrard for one count of production of child pornography and one count of possession of child pornography. Groth was sentenced to 432 months in prison and will serve 20 years on supervised release. There is no parole in the federal system. Groth was additionally ordered to pay a $3,000 special assessment which will contribute to funds established for victims of these types of crimes.
This case initiated in February of 2022 with an investigation by the Federal Bureau of Investigation into several cyber tips from Yahoo! which indicated that Groth was uploading child pornography onto his email accounts. After a search warrant was received it was determined that several of the images located on the account were likely original productions created by Groth involving a child which depicted sexually explicit conduct. A residential search warrant and arrest warrant were executed immediately following this discovery. Groth, who was determined to be a police officer with the Omaha Police Department, was arrested while at work without incident and was very soon after removed from his position with OPD.
A review of Groth’s devices and accounts conducted by the FBI revealed eight images which were produced by Groth on two occasions in 2020 involving a single child victim. Groth emailed these images to himself in February 2021 as a method of saving the files. A search of Groth’s phone and email account revealed more than 700 child exploitation files depicting other unidentified children which he appeared to receive online and subsequently saved using his email account.
“No one is above the law,” said Acting United States Attorney Susan Lehr. “Mr. Groth’s crime was committed against the most vulnerable of our society, a child. The sentence imposed by Judge Gerrard reflects the seriousness of Groth’s conduct and hopefully acts as deterrent for others. The United States Attorney’s Office thanks the FBI for its quick actions in this case as well as OPD for their cooperation and responsiveness.”
After the sentencing, Special Agent in Charge Eugene Kowel said, “In an appalling and heinous way, Christopher Groth violated his sworn oath as a police officer by victimizing children. Today’s sentence ensures that he is held accountable for his actions. Investigating this type of crime is one of the Bureau’s highest priorities and FBI Omaha will remain relentless in our pursuit to protect children from predators.”
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case was investigated by the Federal Bureau of Investigation.
Florida Man Used Kik Messaging App to Chat with Undercover Albemarle DetectiveRead the Press Release
CHARLOTTESVILLE, Va. – A Florida man, who used the instant messaging application Kik to chat with an undercover Albemarle County detective he thought was a 14-year-old girl, pleaded guilty in federal court to one count of attempted transfer of obscene material to a minor.
William George Price, 65, of Land O’ Lakes, Florida, faces a maximum statutory penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
According to court documents, on February 22, 2021, an undercover detective from the Albemarle County Police Department portrayed himself as a 14-year-old girl named “Ashley” on Kik, an instant messaging application. While on Kik, Price, who called himself “Bill Prince,” told “Ashley” that he was 63-years-old and living in Florida. “Ashley” told Price that she lived in Virginia and was “almost 15.”
The conversation became sexual when Price asked “Ashley” if she liked older men, if she was a virgin, and if she would do a “threesome.” Price then asked if she wanted a picture of him. When “Ashley” responded in the affirmative, Price sent a picture of his penis as well as three videos of himself masturbating.
United States Attorney Christopher R. Kavanaugh, Colonel Sean Reeves, Chief of the Albemarle County Police Department, and Special Agent in Charge Derek W. Gordon of Homeland Security Investigations’ Washington, D.C. Field Office made the announcement.
Any individuals that may have additional information about this case, please contact Detective Mike Wells of the Albemarle County Police, who also serves as a Homeland Security Investigations Task Force Officer.
The Albemarle County Police Department and the Department of Homeland Security Investigations are investigating the case.
Assistant U.S. Attorneys Ronald M. Huber and Jordan E. McKay are prosecuting the case.
Florida Companies Ordered to Pay $7.6 Million in Redress and Penalties in Connection with Marketing of “Smoke Away” Smoking Cessation ProductsRead the Press Release
A federal court today ordered the distributor of “Smoke Away” products to pay $7,146,046 in consumer redress and a $500,000 civil penalty to resolve alleged violations of the Opioid Addiction Recovery Fraud Prevention Act of 2018 and the Federal Trade Commission (FTC) Act in connection with the marketing and sale of Smoke Away products as a quick, effective, and easy way to quit smoking.
According to the complaint, Michael J. Connors and several of his companies, ProTouch Marketing LLC, doing business as Smart Day Supplements, Woodford Hills LLC, Oakhill Research LLC, Evergreen Marketing LLC, Sterling Health LLC, and Clara Vista Media LLC made misleading and unsubstantiated advertising claims on websites and social media platforms about the effectiveness of Smoke Away tablets, pellets, and homeopathic sprays. According to the complaint, the defendants claimed that Smoke Away products eliminate nicotine cravings and withdrawal symptoms and enable consumers to quit smoking quickly, easily, and permanently. The complaint alleged these advertising claims were misleading and unlawful because they were not supported by competent and reliable scientific evidence.
The complaint also alleged that this was not the first time the Federal Trade Commission challenged defendant Connors’ advertising of Smoke Away products. In 2005, the Commission entered into a settlement agreement with Connors and one of his then-existing companies to settle allegations concerning the advertising of Smoke Away products. The complaint alleged that Connors nevertheless continued to violate the FTC Act with unsubstantiated health claims about Smoke Away products.
“The Justice Department will vigorously enforce laws intended to stop deceptive advertisers — and, in particular, recidivists — from preying on consumers battling addiction,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department's Civil Division. “The department is committed to taking action to ensure consumers have the information they need to make decisions about their health and wellness.”
“Congress gave us strong tools to fight fraud targeting people suffering from addiction, and that is exactly what we are doing with this record-setting monetary judgment and industry ban,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Those struggling with alcohol, tobacco, or drugs deserve help and support, not phony promises, and we will continue to hold accountable those who prey on addiction sufferers.”
In addition to the monetary judgment and civil penalty, the stipulated order entered by the court today prohibits defendants from engaging in the advertising, marketing, promoting, offering for sale, selling, or distribution of any substance use disorder treatment product or service, including any smoking cessation product or service. The order also prohibits defendants from making unsubstantiated claims in the future and clarifies the amount of substantiation needed for future health claims. Lastly, the order imposes two decades of recordkeeping and reporting obligations to ensure defendants’ future compliance with the FTC Act and the Opioid Addiction Recovery Fraud Prevention Act.
This matter is being handled by Trial Attorney Mary M. Englehart of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Lacy R. Harwell for the Middle District of Florida. Rafael Reyneri and Shira Modell represent the FTC.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at www.FTC.gov.
Federal Judge Sentences Belleville Man to 21+ Years in Prison for Producing, Distributing Explicit Images of MinorsRead the Press Release
EAST ST. LOUIS, Ill. – In a U.S. District courtroom Thursday, a federal judge sentenced a Belleville man to 262 months imprisonment after he admitted to producing and distributing sexually explicit images of minors.
Brandon Lepper, 27, pleaded guilty to one count of sexual exploitation of a child and one count of distribution of child pornography. The judge sentenced him to 262 months imprisonment for count one and 240 months for count two to run concurrently. In addition to the prison sentence, Lepper will serve 15 years of supervised release and is ordered to pay $27,500 in restitution.
“The defendant hid his cell phone and set it up to record in a bathroom he knew a minor would be using to undress in for his own sick pleasure, but then also proceeded to violate and humiliate his victim further by sending their images out into the hands of other pedophiles,” said U.S. Attorney Rachelle Aud Crowe. “Thankfully, Lepper’s prison sentence reflects his vicious and unforgivable actions. I commend the FBI for leading the investigation.”
“The actions of the defendant are deserving of this significant sentence as it reflects the serious nature of the crime,” said FBI Springfield Special Agent in Charge David Nanz. “Offenders, like Lepper, believe they are invisible to law enforcement from behind their computer screens, but the FBI will use every legal authority to identify, investigate, and hold accountable those intent on harming children.”
According to court documents, FBI agents interviewed Lepper while investigating him for distributing child sexual abuse material (CSAM) on a social media site in April 2021. While searching his cell phone, agents uncovered CSAM in Lepper’s camera roll, an online folder drive, and in chats sent from his device.
Upon further review, agents discovered Lepper produced and distributed explicit images of an unsuspecting minor he knew personally while the child was undressing. In total, Lepper’s collection of CSAM included nearly 3,000 images.
FBI – Springfield Field Office led the investigation, and Assistant U.S. Attorney Ali Burns prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims.
Federal Grand Jury Indicts Louisville Woman for CARES Act FraudRead the Press Release
Louisville, KY – A federal grand jury in Louisville, Kentucky returned an indictment on July 11, 2023, charging a local woman with four counts of wire fraud, one count of bank fraud, and two counts of money laundering related to fraud involving the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) financial assistance program.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky and Special Agent in Charge Kelly Moening of the Treasury Inspector General for Tax Administration (TIGTA) Great Lakes Field Division made the announcement.
According to the indictment, between June 18, 2020, and September 22, 2021, Darlene McCoy, 66, filed one fraudulent Economic Injury Disaster Loan (EIDL) application and three fraudulent applications for Paycheck Protection Program (PPP) loans, resulting in the theft of $165,416. McCoy utilized the entities Letz Get It Crackin’, a Kentucky Limited Liability Company, and Darlene McCoy d/b/a Reds Creative Events, an unregistered entity, to file the applications. McCoy falsely exaggerated the number of employees and payroll expenses of Letz Get It Crackin’ and the gross receipts of Reds Creative Events in the fraudulent applications. McCoy further applied for forgiveness for all three of the PPP loans, falsely stating the amount that had been spent on payroll.
The Small Business Administration (SBA) PPP loans were designed to provide a direct incentive for small businesses who were in operation on February 15, 2020, to keep their workers on the payroll. PPP loan proceeds were required to be used by the business on certain permissible expenses. Interest and principal on PPP loans could be entirely forgiven if the business spent the loan proceeds on the allowable expenses within a designated period and used a certain percentage of the PPP loan proceeds on payroll expenses.
McCoy made her initial court appearance on July 13, 2023, before a U.S. Magistrate Judge of the U.S. District Court for the Western District of Kentucky. If convicted, McCoy faces a maximum sentence of 130 years in prison. A federal district court judge will determine any sentence after considering the sentencing guidelines and other statutory factors. There is no parole in the federal system.
TIGTA is investigating the case.
Assistant U.S. Attorney Nicole Elver is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Federal Grand Jury Indicts Louisville Man for CARES Act FraudRead the Press Release
Louisville, KY – A federal grand jury in Louisville, Kentucky returned an indictment on July 11, 2023, charging a local man with four counts of wire fraud and four counts of money laundering related to fraud involving the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) financial assistance program.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky and Special Agent in Charge Jodi Cohen of the FBI Louisville Field Office made the announcement.
According to the indictment, between March 2020, and August 2022 Andrew Prell, 56, filed one fraudulent Economic Injury Disaster Loan (EIDL) application and two fraudulent applications for Paycheck Protection Program (PPP) loans, resulting in the theft of $1,687,033. Prell utilized the entity Convergence of 4 Dimensions, a Kentucky, and Florida Limited Liability Company, to file the applications. Prell falsely exaggerated the number of employees, payroll expenses, and gross revenues of Convergence of 4 Dimensions in the fraudulent applications. In addition, Prell used the funds on unauthorized expenses under the CARES Act, including gambling and other personal expenses.
The Small Business Administration (SBA) PPP loans were designed to provide a direct incentive for small businesses who were in operation on February 15, 2020, to keep their workers on the payroll. PPP loan proceeds were required to be used by the business on certain permissible expenses. Interest and principal on PPP loans could be entirely forgiven if the business spent the loan proceeds on the allowable expenses within a designated period and used a certain percentage of the PPP loan proceeds on payroll expenses.
Prell made his initial court appearance today before a U.S. Magistrate Judge of the U.S. District Court for the Western District of Kentucky. If convicted, Prell faces a maximum sentence of 120 years in prison. A federal district court judge will determine any sentence after considering the sentencing guidelines and other statutory factors. There is no parole in the federal system.
FBI is investigating the case.
Assistant U.S. Attorney Bryan Calhoun is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Dubuque Felon Sentenced for New Firearm Crime and Supervised Release ViolationRead the Press Release
A man who was on federal supervised release for a 2017 firearms crime and was later found with drugs and a gun was sentenced on July 28,2023, to more than 4 years in federal prison.
Kyle Leick, age 33, from Dubuque, Iowa, received the prison term after a January 30, 2023, guilty plea to one count of being a felon in possession of a firearm, and an admission to violating his federal release terms.
At the guilty plea and in the supervised release revocation hearing, Leick admitted that on July 10, 2022, he was on federal supervised release from a 2017 firearms conviction when police responded to his residence and found him in possession of a loaded gun, cocaine and other drugs, along with drug dealing paraphernalia. Leick also admitted numerous other violations of supervised release including missing drug tests, using drugs, committing new crimes while on supervision and absconding from supervision.
Leick was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Leick was sentenced to a total of 52 months’ imprisonment, comprised of 34 months’ imprisonment for his new crime and an additional 18 months’ imprisonment for his violation of the terms of his supervised release. Leick must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Leick is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Patrick Reinert and investigated by the Dubuque Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are 22-CR-01041 and 17-CR-01051.
Follow us on Twitter @USAO_NDIA.
Detroit Man Sentenced to Prison for Fentanyl CrimeRead the Press Release
HUNTINGTON, W.Va. – Damon Shawn Bailes Jr., also known as “Paper,” 31, of Detroit, Michigan, was sentenced today to seven years in prison, to be followed by four years of supervised release, for possession with intent to distribute 40 grams or more of fentanyl.
According to court documents and statements made in court, on May 3, 2022, law enforcement officers arrested Bailes in the area of 19th Street and Rural Road in Huntington on a warrant for a parole violation. Officers found 76 grams of fentanyl, $365 and a loaded SIG Sauer SP2022 handgun on Bailes’ person. Bailes admitted that he possessed the fentanyl and intended to sell it.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Huntington Violent Crime and Drug Task Force, and the Huntington Police Department.
United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Courtney L. Finney prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:22-cr-114.
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Crow Creek Man Sentenced for Assault with a Dangerous Weapon and Child AbuseRead the Press Release
PIERRE - United States Attorney Alison J. Ramsdell announced today that Chief Judge Roberto A. Lange, U.S. District Court, has sentenced a Crow Creek, South Dakota, man convicted of Assault with a Dangerous Weapon and Child Abuse. The sentencing took place on July 31, 2023.
James Drapeau, 35, was sentenced to two years and four months in federal prison, followed by three years of supervised release, and ordered to pay a $200 special assessment to the Federal Crime Victims Fund.
Drapeau was indicted of the same charges by a federal grand jury in June of 2022. He pleaded not guilty and a jury trial was held in April of 2023. The jury found Drapeau guilty of both offenses.
Drapeau was convicted of assaulting his 14-year-old step-son, who was living in a home within the Crow Creek Reservation with Drapeau. Drapeau, frustrated over a perceived slight, beat the young victim relentlessly, with a broomstick and electrical cord. The victim was able to escape the back bedroom in which he was confined and run to the front living room. Drapeau caught up to the victim, threw him to the ground and proceeded to kick him about the body with shod feet. The young victim sustained significant bruising on his head, lower back, arms, buttocks, and legs as a result of the assault.
This matter was prosecuted by the U.S. Attorney’s Office because the Major Crimes Act, a federal statute, mandates that certain violent crimes alleged to have occurred in Indian country be prosecuted in Federal court as opposed to State court.
This case was investigated by the Bureau of Indian Affairs – Office of Justice Services, Crow Creek Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Drapeau was immediately remanded to the custody of the U.S. Marshals Service.
Convicted Felon Sentenced to 8 Years in Federal Prison for Firearm OffenseRead the Press Release
PENSACOLA, FLORIDA – Foster Darnell Johnson, Sr., 37, of Pensacola, Florida, was sentenced to eight years in federal prison for possession of a firearm by a convicted felon and for possession with intent to distribute crack cocaine, hydrocodone, and large volumes of marijuana. The sentence was announced by Jason R. Coody, United States Attorney for the Northern District of Florida.
“Removing firearms from the hands of violent felons, here an intoxicated drug trafficker who had twice been convicted of domestic battery, undoubtedly makes our community safer,” said U.S. Attorney Coody. “The deputies of the Escambia County Sheriff’s Office are to be commended for their swift response to this volatile situation. With their dedicated efforts, we remain committed to fighting violent crime and holding criminals accountable for their conduct.”
On August 13, 2022, in the early morning hours, Johnson returned home with his wife from an evening of drinking. A domestic dispute ensued, and Johnson fired a pistol down the hallway of the second story of the residence where three minor children had been sleeping. Johnson then entered one of the minor children’s bedrooms with the pistol, at which point his wife dialed 911, in fear of her and her children’s lives. Escambia County Sheriff’s Office deputies responded to the residence and secured a search warrant. During the search of the residence, law enforcement discovered two shotguns, one of which was an AR-style shotgun, co-located with over eighteen pounds of marijuana, crack cocaine, hydrocodone, digital scales, and Ziploc baggies, in Johnson’s bedroom. Deputies also located the pistol used during the domestic violence incident, the discharged casing, and a significant volume of ammunition. Johnson was a prior convicted felon, had two previous convictions of battery domestic violence, and was prohibited from possessing firearms.
Johnson’s imprisonment will be followed by 3-years of supervised release during which he will be required to participate in anger management and domestic violence counseling.
This conviction was the result of an investigation conducted by the Escambia County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Jennifer Callahan prosecuted the case.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Clay County Man Pleads Guilty in Nationwide Mortgage Fraud SchemeRead the Press Release
Jacksonville, Florida – United States Attorney Roger B. Handberg announces that Brian Roy Lozito (53, Orange Park) has pleaded guilty to conspiracy to commit wire fraud. Lozito faces a maximum penalty of 20 years in federal prison and payment of restitution to the victims he defrauded. Lozito was arraigned on the indictment on January 11, 2021, and initially released on bond. The court revoked his bond on November 18, 2022, and subsequently ordered him detained. A sentencing date has not yet been set.
According to court documents, Lozito owned and managed American Investigative Services (AIS). AIS purported to offer consumers mortgage auditing services in exchange for a fee. Lozito and his conspirators solicited customers nationwide through mailings and telephone calls. In these solicitations, Lozito and AIS employees, under the direction of Lozito, made false and fraudulent representations to consumers, including that AIS would perform “forensic audits” of mortgage documents to uncover evidence of deficiencies in the mortgage documents. Lozito claimed AIS would obtain quitclaim deeds and other remedies, so the mortgage holders would be relieved of their mortgage debt and own their properties free and clear. If AIS could not help the consumer, Lozito promised to refund their money. In reality, AIS did not perform the services paid for by consumers and did not refund money to consumers. Funds collected from consumers went to bank accounts controlled by Lozito. Lozito used the funds to keep AIS operating and for personal expenses.
This case was investigated by United States Secret Service - Jacksonville Field Office and the State of Florida Office of Attorney General – Consumer Protection Division, with valuable assistance from the Clay County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney the Kevin C. Frein. The asset forfeiture is being handled by Assistant United States Attorney Mai Tran.
Christian & Missionary Alliance Foundation, Inc. Agrees to Pay $250,000 to Resolve Alleged Violations of the Controlled Substances ActRead the Press Release
Fort Myers, Florida - United States Attorney Roger Handberg announces today that the Christian & Missionary Alliance Foundation, Inc. has agreed to pay the United States $250,000 to resolve allegations that the Christian & Missionary Alliance Foundation, Inc. violated the Controlled Substances Act (CSA) by failing to maintain records required by the CSA.
The United States alleges that on July 14, 2021, the Drug Enforcement Administration (DEA) initiated an inspection of the Christian & Missionary Alliance Foundation, Inc.’s facility, located at 15051 Shell Point Boulevard, and determined that Christian & Missionary Alliance Foundation, Inc. committed 176 violations of the CSA, including failing to take a new inventory of all controlled substances on hand at least once every two years, failing to maintain records of the number of units acquired from other persons, and failing to notify the DEA of a theft or loss within one business day of the discovery.
Missionary Alliance Foundation, Inc. relinquished its DEA registration on February 4, 2022.
“Scrupulous recordkeeping is essential to maintaining the CSA’s closed system of distribution and preventing dangerous drugs from falling into the wrong hands,” said U.S. Attorney Roger Handberg. “We expect all DEA registrants, no matter their size, to be especially meticulous in their recordkeeping because the CSA and the welfare of the public demand it.”
“DEA Registrants are obligated to comply with the regulations set forth in the Controlled Substances Act, ensuring accurate inventorying, tracking and recordkeeping, as the failure to do so can lead to the diversion of controlled substances, which jeopardizes the safety and health of our communities,” said DEA Miami Field Division Special Agent in Charge Deanne L. Reuter. “DEA remains committed to working with our law enforcement and regulatory partners to hold registrants accountable and ensure these regulations are followed.”
This settlement results from a coordinated effort by the U.S. Attorney’s Office for the Middle District of Florida and the Drug Enforcement Administration’s Miami Field Division. Assistant United States Attorney Chad Spraker pursued this civil settlement on behalf of the United States.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Charlotte Man Pleads Guilty to Wire Fraud for $5.3 Million Investment Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – Wynn A.D. Charlebois, 53, of Charlotte, pleaded guilty to wire fraud today, for leading a multi-million dollar investment fraud scheme, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.
Robert M. DeWitt, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina, and Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service (USPIS), which oversees Charlotte, join U.S. Attorney King in making today’s announcement.
According to court documents and the plea agreement, from 2015 through October 2022, Charlebois used companies he owned and controlled, including WC Private, Wilcox Hybrid, Damon Investments, and others, to perpetrate a multi-million dollar investment scheme that caused at least 39 victim investors and entities to lose more than $5.3 million. In furtherance of the scheme, Charlebois recruited victim investors including friends, family members, and social acquaintances, by falsely promising their money would be invested in risk-free investments, subscription agreements, and loans. Court documents show that Charlebois fraudulently asserted in the investment agreements presented to victim investors that he and his entities held stock options for particular companies, and that the investors could purchase the options and gain specified profits. Contrary to the defendant’s claims, instead of using the investors’ money as promised, Charlebois used the funds to make Ponzi-style payments to other investors, and on personal expenses including to pay private school tuition, make mortgage payments, and pay for luxury travel and meals at restaurants.
Charlebois was released on bond following his plea hearing. The wire fraud charge carries a maximum penalty of 20 years in prison and a $500,000 fine. A sentencing date has not been set.
The FBI and USPIS investigated the case.
Assistant U.S. Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
Box Elder and Rapid City Men Sentenced for Drug TraffickingRead the Press Release
RAPID CITY - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Jeffrey L. Viken has sentenced two brothers from Box Elder and Rapid City, South Dakota, both convicted of Conspiracy to Distribute Methamphetamine. The sentencing hearings took place on July 28, 2023.
Elias Condon from Box Elder, 24, was sentenced to 15 years in federal prison, followed by five years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund. Jordan Condon from Rapid City, 22, was sentenced to 10 years in federal prison, followed by five years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Elias and Jordan Condon were indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury in July of 2021. They were found guilty at the conclusion of a jury trial on May 24, 2023.
During the conspiracy, Elias and Jordan Condon regularly traveled to Denver, Colorado, to obtain methamphetamine and marijuana. Between October of 2020 and May of 2021, they traveled approximately 18 times, though not always together. When they returned to South Dakota, the methamphetamine and marijuana was provided to others for use and further distribution. Overall, they were responsible for approximately 10 pounds of methamphetamine entering South Dakota. During the course of the conspiracy, both men possessed firearms.
This case was investigated by the Unified Narcotics Enforcement Team, which is a local drug task force comprised of law enforcement from the Pennington County Sheriff’s Office, Rapid City Police Department, South Dakota Division of Criminal Investigation, South Dakota Highway Patrol, and the South Dakota National Guard. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Elias and Jordan Condon were immediately remanded to the custody of the U.S. Marshals Service.
Belle Fourche and Bridger Pipeline Companies to Pay $12.5 Million in Penalties and Improve Compliance after Pipeline Spills in Montana and North DakotaRead the Press Release
Belle Fourche Pipeline Company and Bridger Pipeline LLC – affiliated companies that own and operate a network of crude oil pipelines – have together agreed to pay a $12.5 million civil penalty to resolve claims under the Clean Water Act, pipeline safety laws and North Dakota state laws relating to oil spills in Montana and North Dakota.
“Today’s settlement is the result of federal and state partners working together to comprehensively address oil spills and assess a significant penalty to deter future violations,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The agreement also protects public health, safety, and the environment by requiring action to make future spills less likely.”
“Oil pipeline spills can cause enormous and long-lasting damage to the environment,” said Principal Deputy Assistant Administrator Larry Starfield of the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance. “This settlement holds Belle Fourche and Bridger Pipeline accountable for their significant oil spills and requires them to take meaningful measures to prevent future spills from their oil pipelines.”
“All pipeline spills harm our environment and many threaten the safety and well-being of the American public,” said Deputy Administrator Tristan Brown of the Pipeline and Hazardous Materials Safety Administration (PHMSA). “PHMSA and our state and federal partners are sending a strong message that spills will not be tolerated.”
“As the longest free-flowing river in the Lower 48, the Yellowstone River not only is a national treasure for its historic significance, ecosystems and recreational opportunities, but it also is an important economic resource for communities along its banks and the state of Montana,” said U.S. Attorney Jesse Laslovich for the District of Montana. “It is essential for pipeline companies operating in and around our rivers to comply with environmental protection and public safety regulations. This agreement holds these companies accountable for their significant oil spills, and more importantly, will help protect the iconic Yellowstone River from future damage.”
“Through this settlement, we are furthering North Dakota’s twin objectives of safe energy development and protection of our environment,” said Attorney General Drew H. Wrigley for the State of North Dakota. “I want to especially thank the North Dakota Department of Environmental Quality staff who spent countless hours investigating and responding to the spill.”
In 2015, Bridger’s Poplar Pipeline ruptured where it crosses under the Yellowstone River near Glendive, Montana. The pipeline crossing had been installed using the “trench-cut” method. The pipeline failed after being exposed due to river scour. Bridger has completed its cleanup of the Montana spill site, and Bridger and the State of Montana separately resolved claims under Montana state law.
Belle Fourche’s Bicentennial Pipeline ruptured in 2016 in Billings County, North Dakota. The pipeline traversed a steep hillside above an unnamed tributary to Ash Coulee Creek – which feeds into the Little Missouri River – when the slope failed. The size of the North Dakota spill was exacerbated by Belle Fourche’s failure to detect the spill until it was reported by a local landowner. Belle Fourche’s cleanup of the North Dakota spill site is ongoing with oversight by the North Dakota Department of Environmental Quality. The State of North Dakota is a co-plaintiff in this case, and it has worked closely with the United States; both are signatories to the consent decree.
In addition to the $12.5 million civil penalty, the companies are required to implement specified compliance measures including meeting certain control room operation requirements and related employee training, implementing their water crossings and geotechnical evaluation programs and updating their integrity management program. Belle Fourche will also pay the state of North Dakota’s past response costs.
The case is being handled by the Environment and Natural Resources Division’s Environmental Enforcement Section, in conjunction with the U.S. Attorney’s Office for the District of Montana, EPA, PHMSA and the State of North Dakota.
The consent decree, lodged in the U.S. District Court for the District of North Dakota, is subject to a 30-day public comment period and final court approval. Under section 7003(d) of the Resource Conservation and Recovery Act, a commenter may request an opportunity for a public meeting in the affected area. The consent decree will be available for viewing here: www.justice.gov/enrd/consent-decrees.
Ada Resident Sentenced for Aggravated Sexual AbuseRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Jeffory Dan Hughes, age 55, of Ada, Oklahoma, was sentenced to 30 years in prison, followed by a lifetime term of supervised release, for sexually abusing a child under the age of twelve in Indian Country.
The charges arose from investigations by the Federal Bureau of Investigation and the Chickasaw Nation Lighthorse Police Department.
On September 1, 2022, Hughes pleaded guilty to one count of Aggravated Sexual Abuse in Indian Country. At the plea hearing, Hughes admitted that from 2006 to 2013, he engaged in sexual acts with a minor. The victim was under the age of twelve when the sexual abuse began. Hughes also admitted showing the child a pornographic video. The crimes occurred in Pontotoc County, within the boundaries of the Chickasaw Nation Reservation and within the Eastern District of Oklahoma.
The Honorable Ronald A. White, Chief U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. Hughes will remain in custody of the U.S. Marshal pending transportation to a designated United States Bureau of Prisons facility to serve a non-paroleable sentence of incarceration.
Assistant United States Attorney Caila M. Cleary represented the United States.
28 July 2023
Youngstown Man Sentenced to 10 years for Robbing Two BanksRead the Press Release
YOUNGSTOWN – James P. Verdream, 57, of Youngstown, Ohio, was sentenced yesterday to 10 years in prison by U.S. District Judge Benita Y. Pearson, after he pleaded guilty to robbing two Youngstown area banks. Verdream was ordered to serve 3 years of supervised release following imprisonment, pay a $200 special assessment, and pay $1,734 in restitution. Verdream was also ordered to pay restitution of $3,991 for an uncharged robbery that occurred in Pennsylvania.
According to court documents and court records, on May 2, 2022, Verdream entered a PNC Bank, on Mahoning Avenue, in Youngstown, Ohio. He handed the teller a note, which said “this is a robbery, do not pull the alarm/buzzer” and indicated that he had a gun. The teller gave him $734.00, and Verdream left. On May 9, 2022, Verdream entered Chase Bank, on W. Liberty Street, in Girard Ohio. He handed the teller a note that said “I have a gun and a bomb, $10,000.” The teller indicated that he could only disperse $1,000 and Verdream accepted that amount of money and left. Verdream was later identified by law enforcement via surveillance footage from the banks. Verdream had two prior federal convictions for bank robbery in New Mexico.
The investigation was conducted by the Federal Bureau of Investigation (FBI), Youngstown, the United States Marshal Service, Austintown Police Department, the Boardman Police Department, and the Girard Police Department. This case was prosecuted by Assistant U.S. Attorneys Jason M. Katz and Yasmine Makridis.
Wyoming Man Sentenced for Drug TraffickingRead the Press Release
RAPID CITY - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Karen E. Schreier has sentenced a Gillette, Wyoming, man convicted of Conspiracy to Distribute a Controlled Substance. The sentencing took place on July 21, 2023.
Amos Torres, 48, was sentenced to 14 years in federal prison, followed by five years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Torres was indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury in September of 2022. He pleaded guilty on May 26, 2023.
During the conspiracy, which began no later than March of 2021, Torres conspired with multiple other persons in western South Dakota and surrounding states to obtain large volumes of methamphetamine. Torres then distributed the methamphetamine to others for use and further distribution. Overall, Torres was responsible for obtaining between 1.5 and 5 kilograms. During the conspiracy, Torres also possessed firearms.
This case was investigated by the Unified Narcotics Enforcement Team (UNET) and the Bureau of Alcohol, Tobacco, Firearms and Explosives. UNET is comprised of law enforcement from the Pennington County Sheriff’s Office, Rapid City Police Department, South Dakota Division of Criminal Investigation, South Dakota Highway Patrol, and the South Dakota National Guard. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Torres was immediately remanded to the custody of the U.S. Marshals Service.
Warren County Man Sentenced to 151 Months in Prison for Receiving, Transporting and Possessing Child PornographyRead the Press Release
ALBANY, NEW YORK – Wesley Guard, age 34, of Queensbury, New York, was sentenced today to 151 months in federal prison for receiving, transporting, and possessing child pornography using the online social networking application Kik. The announcement was made by United States Attorney Carla B. Freedman, Matthew Scarpino, Special Agent in Charge of Homeland Security Investigations (HSI), Buffalo Field Office, and New York State Police (NYSP) Acting Superintendent Steven A. Nigrelli.
Guard was previously convicted after a four-day jury trial in February of 2023. The evidence at trial established that, between September 2020 and April 2021, Guard, a registered sex offender, used the Kik Messenger application to receive child pornography from others Kik users. Guard then transported that child pornography over the internet into other Kik accounts under his control as a means of collecting the material. The child pornography Guard received from other Kik users and transported between his various Kik accounts included numerous videos depicting the sexual exploitation of young children. The evidence at trial also established that, at the time of his arrest by law enforcement on April 29, 2021, Guard still possessed the child pornography he had received on Kik.
United States District Judge Mae A. D’Agostino also sentenced Guard to 15 years of supervised release that will begin after Guard serves his term of imprisonment. Guard is a prior registered sex offender, and as a result of his conviction, Guard will again be required to register as a sex offender upon his release from prison.
This case was investigated by HSI, the NYSP Internet Crimes Against Children Task Force, and the NYSP Troop G Computer Crime Unit. Assistant U.S. Attorneys Katherine Kopita, Carling Dunham, and Adrian LaRochelle prosecuted the case as a part of Project Safe Childhood.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorney’s offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.