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20 May 2022
Houma Man Indicted for Violating the Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – DARRIUS NEVILLE, age 26, a resident of Houma, Louisiana, was charged May 5, 2022, in a one-count sealed indictment by a federal grand jury with distribution of heroin in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B), announced U.S. Attorney Duane A. Evans. The indictment was unsealed on May 12, 2022.
If convicted, NEVILLE faces a statutory minimum sentence of five years, up to forty years imprisonment, a fine of up to $5,000,000, at least four years of supervised release following any term of imprisonment, and a $100 mandatory special assessment fee.
U.S. Attorney Evans reiterated that the indictment is merely a charging document and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was investigated by the Drug Enforcement Administration. The prosecution is being handled by Assistant United States Attorney J. Benjamin Myers.
Hillsborough County Man Sentenced to 17 Years in Federal Prison for Distributing and Possessing Child Sexual Abuse Materials and Ordered to Pay Victims over $100,000 in RestitutionRead the Press Release
Tampa, Florida – U.S. District Judge William Jung has sentenced Andres Ivan Leyva Sabina (51, Tampa) to 17 years in federal prison for distributing and possessing images and videos depicting children being sexually abused. The court also ordered Sabina to pay more than $100,000 in restitution to child victims, serve a 10-year term of supervised release, and register as a sex offender. Sabina had pleaded guilty on January 12, 2022.
According to court documents, on several occasions in September 2018, Sabina used a social media application and the internet to distribute images depicting children being forced to engage in sexually explicit conduct. In July 2019, law enforcement officers executed a search warrant at Sabina’s residence. Several electronic devices used by Sabina were seized and officers discovered more than 4,000 images and videos depicting children being sexually abused contained in these devices.
“This predator possessed thousands of depictions of child pornography involving more than 150 victims that he collected and distributed on the dark web,” said HSI Tampa acting Assistant Special Agent in Charge Jennifer Silliman. “HSI special agents and Florida Department of Law Enforcement officers worked jointly to shut down this monstrous creature from leaving more child victims in his wake.”
This case was investigated by Homeland Security Investigations and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney Candace Garcia Rich.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Criminal Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Houston Woman Pleads Guilty to Wire FraudRead the Press Release
St. Thomas, USVI – United States Attorney Delia L. Smith announced today that on May 16, 2022, Marvelous Eghage, 39, of Houston, TX, pleaded guilty to one count of wire fraud before Magistrate Judge Ruth Miller.
According to court documents, between February 26, 2018, and March 13, 2018, Eghage devised a scheme to fraudulently obtain money and property by means of materially false and fraudulent pretenses and promises directed to third parties. Through her fraudulent scheme, Eghage diverted funds from her victims to a bank account under her controlled by way of electronic wires and later withdrew or transferred the funds for her own personal benefit and the benefit of others.
Specifically, court documents show that on February 26, 2018, Eghage and a co-conspirator electronically transferred $25,400.00 to an account under Eghage’s control. These funds were fraudulently acquired through forged checks from the account of R.B.R. On March 6, 2018, Eghage and a co-conspirator, fraudulently induced a representative of Colombia-based FDN to electronically transfer $34,965.00 to a Houston, TX bank account under Eghage’s control. On March 7, 2018, Eghage and a co-conspirator fraudulently induced N.D. to electronically transfer approximately $48,000.00 to a Houston, TX bank account controlled by Eghage. On March 8, 2018, Eghage fraudulently induced M.R. to transfer money to a bank account under her control. Lastly, on March 9, 2018, Eghage and a coconspirator fraudulently induced a representative of a law firm based in St. Thomas, VI, to electronically transfer approximately $108,637.00 to a Houston, TX bank account under Eghage’s control. Eghage used email communications to induce her victims into her fraudulent scheme. Eghage faces a maximum sentence of 20 years in prison and a maximum fine of $250,000.00.
This case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Everard E. Potter.
Government Contractor Agrees to Pay $425,000 for Alleged False Claims Related to Conflicts of InterestRead the Press Release
Cape Henry Associates (Cape Henry), located in Virginia Beach, Virginia, has agreed to pay $425,000 to resolve allegations that it violated the False Claims Act by failing to inform contracting officers of the company’s organizational conflicts of interest (OCI) in connection with the award and performance of task orders on government contracts. Cape Henry performs manpower analysis, personnel analysis and training services for the U.S. Armed Forces.
The Justice Department alleged that Cape Henry failed to disclose that one of the company’s officers had an ownership interest in KOVA Global, a company to which Cape Henry awarded subcontracts to provide warehouse services in connection with two sole source task orders issued by the Army and General Services Administration (GSA).
“It is critical that companies disclose potential conflicts of interest to protect the integrity of the federal procurement process,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will hold accountable those who knowingly conceal relevant information that may affect the award or performance of a government contract.”
“The failure of government contractors to disclose organizational conflicts of interest harms government procurement, creates unfairness, and can cost the taxpayers money,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia.
The Justice Department also alleged that Cape Henry failed to disclose relevant information about a conflict of interest arising from advisory & assistance services (A&AS) performed in 2015 by Q.E.D. Systems Inc. (Q.E.D.), a Cape Henry subcontractor. In connection with a multi-year delivery order under a Navy SeaPort-e contract, Cape Henry would submit project-specific proposals to a Navy program management office that was responsible for determining the scope and funding for each project. At the same time that Cape Henry was submitting proposals to the Navy, Cape Henry was also funding the direct labor of a Q.E.D. employee through a subcontract. This Q.E.D. employee was providing A&AS services to the Navy program office and making recommendations that could potentially affect Cape Henry’s funding and treatment in connection with these project proposals. Cape Henry failed to disclose this conflict of interest to the contracting officer as required by the OCI clause in Cape Henry’s contract with the Navy.
“The Department of Defense requires its contractors to divulge any potential conflicts of interest to maintain the integrity of the military’s procurement process,” said Acting Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “NCIS and our federal law enforcement partners remain committed to ensuring the good stewardship of taxpayer dollars by fully investigating all allegations of procurement fraud.”
“This settlement highlights the resolve of Army CID and our law enforcement partners to hold government contractors accountable for their actions. The ability to protect and defend the assets of the United States Army is always our top priority,” said Special Agent in Charge L. Scott Moreland of the U.S. Army Criminal Investigation Division's (Army CID) Major Procurement Fraud Field Office.
“GSA OIG special agents are committed to working with DOJ and investigative partners to ensure that taxpayer dollars are properly spent and protected," said Special Agent in Charge Eric D. Radwick of the GSA Office of Inspector General, Mid-Atlantic Division.
“This settlement agreement demonstrates the commitment of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service (DCIS) and our law enforcement partners to vigorously pursue those who attempt to exert improper influence over the federal government contracting process and to protect American taxpayer dollars,” said Special Agent in Charge Christopher W. Dillard of the Department of Defense, Office of Inspector General, DCIS.
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 Eastern District of Virginia with assistance from the DCIS, the Army CID, the GSA Office of Inspector General, the Defense Contract Audit Agency, and the Naval Criminal Investigative Service.
The matter was handled by Trial Attorney Jason M. Crawford of the Civil Division and Assistant U.S. Attorney Clare Wuerker for the Eastern District of Virginia.
The claims resolved by the settlement agreement are allegations only; there has been no determination of liability.
Government Contractor Agrees to Pay $425,000 for Alleged False Claims Related to Conflicts of InterestRead the Press Release
ALEXANDRIA, Va. – Cape Henry Associates (Cape Henry), located in Virginia Beach, has agreed to pay $425,000 to resolve allegations that it violated the False Claims Act by failing to inform contracting officers of the company’s organizational conflicts of interest in connection with the award and performance of task orders on government contracts.
Cape Henry performs manpower analysis, personnel analysis, and training services for the United States Armed Forces. The allegations involved that Cape Henry failed to disclose that one of the company’s officers had an ownership interest in KOVA Global, a company to which Cape Henry awarded subcontracts to provide warehouse services in connection with two sole source task orders issued by the Army and General Services Administration (GSA).
The Justice Department also alleged that Cape Henry failed to disclose relevant information about a conflict of interest arising from advisory & assistance services (A&AS) performed in 2015 by Q.E.D. Systems, Inc. (Q.E.D.), a Cape Henry subcontractor. In connection with a multi-year delivery order under a Navy SeaPort-e contract, Cape Henry would submit project-specific proposals to a Navy program management office that was responsible for determining the scope and funding for each project. At the same time that Cape Henry was submitting proposals to the Navy, Cape Henry was also funding the direct labor of a Q.E.D. employee through a subcontract. This Q.E.D. employee was providing A&AS services to the Navy program office and making recommendations that could potentially affect Cape Henry’s funding and treatment in connection with these project proposals. Cape Henry failed to disclose this conflict of interest to the contracting officer as required by the OCI clause in Cape Henry’s contract with the Navy.
“The failure of government contractors to disclose organizational conflicts of interest harms government procurement, creates unfairness, and can cost the taxpayers money,” said U.S. Attorney Jessica D. Aber.
“It is critical that companies disclose potential conflicts of interest to protect the integrity of the federal procurement process,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will hold accountable those who knowingly conceal relevant information that may affect the award or performance of a government contract.”
“The Department of Defense requires its contractors to divulge any potential conflicts of interest to maintain the integrity of the military’s procurement process,” said Acting Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “NCIS and our federal law enforcement partners remain committed to ensuring the good stewardship of taxpayer dollars by fully investigating all allegations of procurement fraud.”
“This settlement highlights the resolve of Army CID and our law enforcement partners to hold government contractors accountable for their actions. The ability to protect and defend the assets of the United States Army is always our top priority,” said Special Agent in Charge L. Scott Moreland of the U.S. Army Criminal Investigation Division's (Army CID) Major Procurement Fraud Field Office.
“GSA OIG special agents are committed to working with DOJ and investigative partners to ensure that taxpayer dollars are properly spent and protected," said Special Agent in Charge Eric D. Radwick of the GSA Office of Inspector General, Mid-Atlantic Division.
“This settlement agreement demonstrates the commitment of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service (DCIS) and our law enforcement partners to vigorously pursue those who attempt to exert improper influence over the federal government contracting process and to protect American taxpayer dollars,” said Special Agent in Charge Christopher W. Dillard of the Department of Defense, Office of Inspector General, DCIS.
The resolution obtained in this matter was the result of a coordinated effort between the United States Attorney’s Office for the Eastern District of Virginia, the Justice Department’s Civil Division, Commercial Litigation Branch, and Fraud Section, and with assistance from the Defense Criminal Investigative Service, the Army Criminal Investigation Division, the General Services Administration Office of Inspector General, the Defense Contract Audit Agency, and the Naval Criminal Investigative Service.
The matter was handled by Assistant U.S. Attorney Clare Wuerker and Trial Attorney Jason M. Crawford of the Justice Department’s Civil Division.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
The claims resolved by the settlement agreement are allegations only; there has been no determination of liability.
Gary Man Sentenced to 36 Months in PrisonRead the Press Release
HAMMOND- Raheri Boyd, 45 years old, of Gary, Indiana, was sentenced by United States District Court Judge Philip P. Simon, on his plea of guilty to being a felon in possession of a firearm, announced United States Attorney Clifford D. Johnson.
Boyd was sentenced to 36 months in prison followed by 2 years of supervised release.
According to documents in the case, on June 8, 2021, a vehicle operated by Boyd was involved in a hit and run accident. When officers arrived, Boyd was found to be asleep in the driver’s seat. During a search of the vehicle, law enforcement recovered a loaded 9mm semi-automatic pistol in the center console. Boyd’s criminal history indicates that he has previously been convicted of multiple felony offenses, including possession of a controlled substance, unlawful use of a firearm by a felon, and aggravated discharge of a firearm. These convictions prohibit him from possessing a firearm or ammunition.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives with the assistance of the Lake Station Police Department. This case was prosecuted by Assistant United States Attorney Michael J. Toth.
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.
Gang leader convicted of federal charges in connection with nightclub shooting and subsequent murder of 17-year-old witnessRead the Press Release
ATLANTA, Ga. - A federal jury found Maurice Antonio Kent guilty of RICO Conspiracy, violent crime in aid of racketeering, discharging a firearm during the commission of those violent crimes, and possession of a firearm as a convicted felon.
“The 135 Pirus gang is a violent criminal organization whose members committed a multitude of crimes, including the horrific execution of a 17-year-old witness,” said U.S. Attorney Ryan K. Buchanan. “Kent and his fellow gang members demonstrated an absolute disregard for human life and have now been brought to justice as a result of the strong partnership between federal and local law enforcement. This case, which culminated in a jury verdict convicting Kent of all charges, reflects our office’s resolve to tirelessly investigate and prosecute gangs who drive violence in our communities.”
“The brutal and tragic violence perpetrated by Kent and his fellow gang members is completely shocking and deplorable,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “With this conviction, Kent will no longer be able to commit senseless violence and homicidal acts on our streets. The FBI remains unwavering in our resolve to work with our partners to ensure that individuals like Kent are held accountable for their crimes and to eliminate gang violence from our communities.”
“Gang and organized crime have no place in our community,” said Brookhaven Police Deputy Chief Brandon Gurley. “Organized crime knows no boundaries, and neither should we. The collaboration with the U.S. Attorney’s Office was instrumental to ensure that Kent and his associates were all held accountable for the violent crimes they committed in our city and throughout Georgia.”
“In reference to this investigation, I’d like to credit the Violent Repeat Offender Program (VRO) which is a program conducted by the U.S. Attorney’s Office for the Northern District of Georgia and has been in place for many years,” said Cartersville Police Chief Frank McCann. “The VRO program puts federal, state, and local law enforcement officers together monthly to take violent repeat offenders off our streets. Positive results when we all work together!”
According to U.S. Attorney Buchanan, the charges and other information presented in court: The 135 Pirus gang originated in Compton, California, and has a national presence, including in the Northern District of Georgia. Kent was a gang leader in northwest Georgia with leadership authority over members in the vicinity of Cartersville and Rome, Georgia. The 135 Pirus are governed by a set of rules, which, among other commands, prohibit its members from cooperating with law enforcement.
In the early morning hours of May 13, 2017, an argument occurred outside a Brookhaven nightclub between a California-based 135 Pirus gang member and a rival gang member. At that time, Kent fired multiple rounds into a crowd of people outside the club, critically wounding the other gang member as well as a club security guard. During his flight from the scene, Kent tossed the firearm from a vehicle just before he was apprehended by police. Soon after being arrested and while in custody, Kent learned that a 17-year-old fellow gang member, who may have witnessed the shooting, was interviewed by law enforcement. Kent believed he was “snitching.” Two days later, 135 Pirus gang members devised a plan to lure the teenager to Bartow County, Georgia, where they shot and killed him with Kent’s gun, leaving the boy’s body on a rural road.
The jury also heard evidence that eight months prior to the nightclub shooting, in September 2016, Kent committed a drive-by shooting of a man standing in his front yard in Cartersville, Georgia. After that shooting, Kent threw the firearm into Lake Allatoona. The FBI later recovered the gun from the bottom of the lake and matched cartridge casings and a bullet from the drive-by shooting to Kent’s firearm.
In addition to Maurice Antonio Kent a.k.a., “Savage Duze,” 32, of Cartersville, Georgia, a number of other 135 Pirus gang members and associates were previously convicted in this case, including:
- Christopher Nwanjoku, a.k.a. “Problem,” 30, a 135 Pirus leader from Lawrenceville, Georgia, was convicted of RICO Conspiracy;
- Jamel Dupree Hughes, a.k.a. “Savage,” 27, a 135 Pirus member from Atlanta, Georgia, was convicted of murder in aid of racketeering, use of a firearm in furtherance of a crime of violence resulting in death, attempted murder in aid of racketeering, and discharge of a firearm in furtherance of a crime of violence;
- Cedric Sams, Jr., a.k.a. “Awall,” 29, a 135 Pirus member from Cartersville, Georgia, was convicted of murder in aid of racketeering and use of a firearm in furtherance of a crime of violence resulting in death;
- Jennifer Foutz, a.k.a. “Rose,” 30, a 135 Pirus member from Acworth, Georgia, was convicted of murder in aid of racketeering and use of a firearm in furtherance of a crime of violence resulting in death; and
- Michael Kent, a.k.a. “Wikked,” 32, a 135 Pirus associate from Atlanta, Georgia, who is Maurice Antonio Kent’s twin brother, was convicted of RICO Conspiracy.
In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. The sentencing hearing for Kent and the other defendants will be scheduled at a later date.
This case is being investigated by the FBI Safe Streets Gang Task Force, with valuable assistance provided by the Brookhaven Police Department, the Bartow County Sheriff’s Office, the Cartersville Police Department, and the Georgia Department of Community Supervision.
Assistant U.S. Attorneys Jessica Morris, who serves as the office’s Project Safe Neighborhoods (PSN) Co-coordinator, and Michael Herskowitz, Chief of the Cyber and Intellectual Property Crime Section, are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Fraud Scheme Involving Baby Formula Leads to 18-Year Federal Prison Sentences for SwindlersRead the Press Release
Miami, Florida – A federal district judge in Miami has sentenced each of three South Florida residents to 220 months in prison after a jury found them guilty of orchestrating an elaborate fraud scheme that cheated U.S. manufacturers of infant formula, eye-care products, and other FDA-regulated items out of more than $100 million.
Between 2013 and 2018, Johnny Grobman, 48, Raoul Doekhie, 53, and Sherida Nabi, 57, secured deep price discounts for infant formula and other items by lying to the U.S. manufacturers of the products. Doekhie and Nabi (who are married) told the manufacturers that they were purchasing the products to ship overseas, to Suriname, often in connection with purported government procurement contracts they held in Suriname. In fact, the defendants did not have government procurement contracts and never intended to export the products to Suriname. Instead, Grobman and others sold the products in the United States for millions of dollars, which the three defendants later split among themselves.
The defendants hid their activity from the U.S. manufacturers of the FDA-regulated products in one of three ways. The first was to send “dummy” shipments abroad. The dummy shipments did not contain the products purchased from the manufacturers, but they did generate documentation to prove that an export occurred. The second method was to “U-turn” the products: The products were shipped abroad, generating export documentation. As soon as they arrived overseas, they were shipped back to the United States. The third method was to create fraudulent export shipping documentation showing that the products were exported when they actually never left the country.
Following a 13-day trial, on February 6, 2020, a federal jury found Grobman, Doekhie, and Nabi guilty of conspiring to commit wire fraud; wire fraud; money laundering; conspiring to obtain pre-retail medical products worth $5,000 or more by fraud or deception, theft of pre-retail medical products; and smuggling goods from the United States.
On April 25, 2022, the Court entered forfeiture money judgments for the amounts of the criminal proceeds traceable to the offenses of conviction as follows: $87,187,374.83 against Grobman and $115,699,273.61 jointly against the Defendants Doekhie and Nabi.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Justin C. Fielder, Special Agent in Charge, Miami Field Office, United States Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), announced the sentences that U.S. District Judge Roy K. Altman imposed yesterday.
“The fraud perpetrated by these defendants is nothing short of egregious,” said U.S. Attorney Gonzalez. “The 18-year prison sentences reflect the seriousness of the defendants’ crimes. Our Office will continue to vigorously prosecute those who commit these types of offenses.”
“Today’s announcement should serve as a reminder that those who fraudulently divert consumer products for profit will be held accountable for their actions,” said Special Agent in Charge Justin C. Fielder, FDA Office of Criminal Investigations Miami Field Office. “We will continue to investigate and bring to justice those who engage in fraudulent schemes involving FDA-regulated products.”
FDA-OCI investigated the case. Broward County Sherriff’s Office assisted. Assistant U.S. Attorneys Shannon Shaw, Christopher Browne, and John Shipley prosecuted the case. Assistant U.S. Attorney Joshua Paster is handling asset forfeiture.
This case is the second large-scale prosecution by the South Florida U.S. Attorney’s Office and FDA-OCI targeting fraud schemes related to the so-called “gray market,” which involves the diversion and re-sale of certain goods that were not intended for distribution in the United States. In September 2019, the Office announced the convictions of five defendants, including Byramji Javat, a citizen of Pakistan and Chairman of the Dubai-based Uniworld Group, for various offenses relating to a global fraud scheme that relied upon false claims about the United States military and the Government of Afghanistan.
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 18-cr-20989.
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Founder and CEO of Off-Shore Cryptocurrency Derivatives Platform Sentenced for Violating the Bank Secrecy ActRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that Arthur Hayes was sentenced today to six months of home detention, in connection with his violation of the Bank Secrecy Act (the “BSA”), through his willful failure to establish, implement, and maintain an anti-money laundering (“AML”) program at the cryptocurrency company he co-founded and owned, Bitcoin Mercantile Exchange or “BitMEX”. U.S. District Judge John G. Koeltl imposed today’s sentence.
U.S. Attorney Damian Williams said: “While building a cryptocurrency platform that profited him millions of dollars, Arthur Hayes willfully defied U.S. law that requires businesses to do their part to help in preventing crime and corruption. He intentionally failed to implement and maintain even basic anti-money laundering policies, which allowed BitMEX to operate as a platform in the shadows of the financial markets. This Office will continue to vigorously enforce United States law intended to prevent money laundering through financial institutions, including cryptocurrency platforms.”
According to the Indictment, public court filings, and statements made in court:
ARTHUR HAYES, together with BENJAMIN DELO and SAM REED, who have also pled guilty and are scheduled to be sentenced in the near-future, was one of the three co-founders and the CEO of BitMEX.
BitMEX is an online cryptocurrency derivatives exchange that, during the relevant time period, had U.S.-based operations and served thousands of U.S. customers, notwithstanding false representations to the contrary by the company, including HAYES. From at least September 2015, and continuing at least through the time of the Indictment in September 2020, HAYES willfully caused BitMEX to fail to establish and maintain an AML program, including a program for verifying the identify of BitMEX’s customers (or a “know your customer” or “KYC” program). As a result of its willful failure to implement AML and KYC programs, BitMEX was in effect a money laundering platform. For example, in May 2018, HAYES was notified of allegations that BitMEX was being used to launder the proceeds of a cryptocurrency hack. Neither HAYES nor the company filed a suspicious activity report thereafter, nor did they implement an AML or KYC program in response.
HAYES failed to institute AML or KYC programs at BitMEX despite closely following U.S. regulatory developments that made clear their legal obligation to do so if BitMEX operated in the United States, which it did. Despite repeatedly stating that BitMEX did not serve U.S. customers, including to members of the press and others outside of BitMEX, HAYES knew that BitMEX’s purported withdrawal from the U.S. market in or about September 2015 was a sham, and that “controls” BitMEX put in place to prevent U.S. trading were an ineffective facade that did not, in fact, prevent users from accessing or trading on BitMEX from the United States.
HAYES derived substantial profits from BitMEX, as a result of U.S.-based trading, and aggressively advertised the company’s lack of an AML or KYC program. At various points in time, BitMEX’s website stated that “No real name or other advanced verification is required on BitMEX.” Through at least August 2017, the platform’s registration page explicitly stated that first and last name were “not required” to register.
Because of the lack of KYC, the full scope of criminal conduct on BitMEX may never be known. The company, still owned by HAYES and his co-defendants, accepted a settlement with the Department of Treasury in which the Company neither admitted nor denied that that it had conducted more than $200 million in suspicious transactions, and that the Company had failed to file suspicious activity reports on nearly 600 specific suspicious transactions.
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HAYES, 36, of Miami, Florida, was sentenced to six months of home detention and two years of probation. Hayes also agreed to pay a fine of $10 million dollars representing his pecuniary gain from the offense.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Money Laundering Investigation Squad, and thanked the attorneys and investigators at the Commodity Futures Trading Commission whose expertise and diligence were integral to the development of this case.
The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Jessica Greenwood, Samuel Raymond, and Thane Rehn are in charge of the prosecution.
Former Seattle resident indicted for bank fraud for allegedly stealing more than $500,000 from Paycheck Protection ProgramRead the Press Release
Seattle – A 28-year-old New York City man was indicted this week in the Western District of Washington for three counts of bank fraud related to his abuse of the COVID-19 Pandemic Paycheck Protection Program (PPP), announced U.S. Attorney Nick Brown. Donte Jamal McClellon was a resident of Seattle when he submitted falsified documents to obtain $500,948 in loan proceeds from three different banks in May and June 2020. Under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act such funding was supposed to help small businesses weather the pandemic storm.
“Those who swooped in early with false and forged documents to claim loan funds, robbed legitimate businesses of the assistance they needed,” said U.S. Attorney Nick Brown. “Prosecuting pandemic fraud is a top priority of the Department of Justice and an ongoing focus for investigators here in Seattle.”
According to records filed in the case, McClellon used the names of three limited liability corporations he had once registered in the State of Washington to make his claims. Each of the entities, ‘Frostlake,’ ‘Cannonlake,’ and ‘Skylake’ LLC, had been inactive and showed no signs of business activity in any state or federal registries in the years leading up to the pandemic. Nevertheless, in May and June 2020, McClellen submitted Paycheck Protection program applications claiming the entities each had as many as 13 employees and, in one case, gross receipts of more than $1.6 million. McClellan allegedly forged multiple Internal Revenue Service forms to make it appear the three companies were operating real estate or retail businesses, with employees who would benefit from the Paycheck Protection Program loans. McClellan claimed the businesses operated out of his home address in Seattle. The investigation revealed there was no business activity at that address.
The loan funds were disbursed to bank accounts that McClellon had set up just days before he made the loan applications. The proceeds were then moved to a personal bank account controlled by McClellon.
McClellon is scheduled to appear for arraignment on the indictment on May 31, 2022. Bank fraud is punishable by up to 30 years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by The FBI Seattle Field Division with assistance from FBI New York and the Small Business Administration Office of Inspector General (SBA-OIG).
The case is being prosecuted by Assistant United States Attorney Sok Tea Jiang.
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 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 via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
mcclellon_indictment.pdfFormer Norfolk Sheriff Sentenced for Public CorruptionRead the Press Release
NORFOLK, Va. – A former elected Sheriff of the City of Norfolk was sentenced today to 12 years in prison for defrauding the citizens of Norfolk through bribery schemes. Last August, a jury convicted the former Sheriff of all 11 felonies charged against him.
According to court documents, Robert McCabe, 63, engaged in illicit quid pro quo relationships with vendors while he served as the Sheriff of the City of Norfolk. Evidence presented at trial showed that from 1994 through 2016, vendors provided McCabe with cash, travel, entertainment, gift cards, catering, personal gifts, and campaign contributions, in exchange for official actions that favored the vendors and their contracts with the Norfolk City Jail. These favorable actions included changing the terms of the contracts to favor certain companies, granting extensions and renewals, and providing inside bidding information.
Gerard Boyle, 64, of Franklin, Tennessee was the Chief Executive Officer of Correct Care Solutions (CSS), a company that he founded and which contracted with the Norfolk Sheriff’s Office to provide medical services to the inmates at the Norfolk City Jail. Between about January 2004 and December 2016, Boyle provided McCabe with cash, travel, a loan, entertainment, gift cards, personal gifts and campaign contributions. In exchange, McCabe performed official acts in favor of CCS, which was able to obtain medical services contracts worth more than $3 million per year with the Norfolk Sheriff’s Office. In one instance, McCabe met with Boyle at a hotel in Philadelphia where Boyle gave McCabe $6,000 in cash. On October 7, 2021, Boyle pleaded guilty to conspiring to commit honest services mail fraud by paying bribes to secure medical services contracts for the Norfolk City Jail
McCabe engaged in a similar illicit quid pro quo relationship with the Chief Executive Officer of a Louisiana-based company that provided food services management to the Norfolk City Jail. In exchange, the company regularly provided free catering at McCabe’s home, for his annual golf tournaments, and for other political events. The company’s former CEO also gave McCabe free trips – including a trip to the 2004 BCS National Championship game in Louisiana – and a ride in a glass-bottomed helicopter in San Francisco.
Despite receiving a multitude of gifts from vendors, McCabe concealed these bribes by never disclosing any of these items in his required campaign disclosures.
On February 25, Boyle was sentenced to three years in prison, ordered to forfeit $2,700,000, and to pay a $35,000 fine.
McCabe was sentenced today to 12 years in prison. The advisory guideline range for the charges for which he was convicted was a term of life imprisonment capped at 220 years.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office; and Darrell J. Waldon, Special Agent in Charge of the Criminal Investigations Unit of the Internal Revenue Service, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen.
Assistant U.S. Attorneys Melissa E. O’Boyle, Randy C. Stoker, and Anthony Mozzi prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:19-cr-171.
Former Georgia Insurance Commissioner John Oxendine charged with health care fraud and money laundering schemeRead the Press Release
ATLANTA - John W. Oxendine has been arraigned on federal charges of conspiracy to commit health care fraud and conspiracy to commit money laundering. Oxendine was indicted by a federal grand jury on May 17, 2022.
The indictment alleges that Oxendine conspired to obtain kickbacks for unnecessary genetic and toxicology lab tests, and used his insurance business to hide those kickbacks,” said U.S. Attorney Ryan K. Buchanan. “Patients go to their healthcare provider for treatment with the expectation that their treatment or test is necessary, not a scam for fraud.”
“These allegations describe someone who was more motivated by personal greed than their duty to provide appropriate and necessary care to patients,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “The FBI, along with our partners, will continue to investigate healthcare fraud to ensure these individuals who willingly defraud the American people are brought to justice.”
“Providers who exploit their positions as health care professionals for financial gain undermine patient trust and waste taxpayer dollars,” said Special Agent in Charge Tamala E. Miles, with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG will continue to work tirelessly alongside our law enforcement partners to investigate any bad actors who attempt to defraud federal health care programs.”
“Health care providers who engage in kickback schemes to maximize profits violate the integrity of the Department of Defense health care system and betray the trust of their patients,” stated Special Agent in Charge Cynthia A. Bruce, Department of Defense (DoD) Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “Trusted healthcare professionals whose greed overcomes their moral obligations to those seeking medical treatment have no place in the DoD healthcare community and will be aggressively pursued for prosecution.”According to U.S. Attorney Buchanan, the charges, and other information presented in court: John W. Oxendine allegedly conspired with Dr. Jeffrey Gallups and others to submit fraudulent insurance claims for medically unnecessary Pharmacogenetic, Molecular Genetic, and Toxicology testing. Physicians associated with Jeffrey Gallups’s ENT practice were pressured to order medically unnecessary Pharmacogenetic, Molecular Genetic, and Toxicology testing from a testing lab in Texas. As part of the health care fraud scheme, the lab company agreed to pay Oxendine and Gallups a kickback of 50% of the net profit for eligible specimens submitted by Gallups’s practice to the lab company for the testing.
In total, the lab company submitted claims seeking over $2,500,000 in payment for laboratory tests ordered by Gallups’s practice. The insurance companies paid over $600,000 to the lab company as a result of these claims. The lab company then paid $260,000 in kickbacks through Oxendine's insurance services business. Oxendine used a portion of the kickback money to pay debts on behalf of Gallups, paying a $150,000 charitable contribution and $70,000 in attorney’s fees.
This case is related to United States v. Gallups, 1:21-cr-00370-SCJ, in which Dr. Jeffrey Gallups pleaded guilty to health care fraud.
John W. Oxendine, 60, of Duluth, Georgia was indicted on May 17, 2022. Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation, Department of Health and Human Services Office of the Inspector General, and the Defense Criminal Investigative Service.
Assistant U.S. Attorney Christopher J. Huber, Deputy Chief of the Complex Frauds Section, is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Chief Financial Officer Sentenced to 33 Months in Federal Prison for $2,400,000 Investment Fraud SchemeRead the Press Release
United States Attorney Richard G. Frohling announced that on May 19, 2022, Jeremy Arrington (age: 44) of Middleton, Wisconsin, was sentenced to 33 months in federal prison for carrying out a $2.4 million investment scheme that defrauded over 20 victims. Arrington had earlier pleaded guilty to one count of wire fraud, in violation of 18 U.S.C. § 1343.
The information presented at sentencing showed that Arrington partnered with another individual to form a real estate business, Wisconsin Home Buyers Network, LLC (WIHBN), of which Arrington was the Chief Financial Officer. Between 2012 and 2017, the partners solicited and obtained from more than 20 investors approximately $2.8 million, promising little or no risk and healthy monetary returns ranging from 12% to 36%. In return, investors received promissory notes signed by Arrington detailing the investment terms. Some investors also received mortgages that purported to be for specific properties to be acquired and rehabilitated with the investors’ funds, although the partners failed to record all but a few of the mortgages.
Contrary to promises that the investor funds were secured by the assets of a successful and profitable business, WIHBN had business debt, delinquent tax obligations, and other financial issues that made the business unable to timely make payments on the promissory notes. Rather than being used for the promised investment purposes, investor funds were comingled with other funds and were used for Ponzi-type payments to existing investors, payroll for related businesses, debt reduction, personal draws by the partners, back taxes, and legal fees. When the partners were unable to pay as the promissory notes came due, they sought extensions, solicited additional funds from existing investors, and attempted to secure new investors. In the end, less than $400,000 of the over $2.8 million in investor funds was returned to investors.
Several victims filed impact statements with the court prior to sentencing. One victim made in-person remarks during the sentencing hearing, explaining how Arrington caused significant financial and emotional harm. Some investors lost funds that they had been saving for retirement. In pronouncing sentence, U.S. District Court Judge Brett H. Ludwig commented that the protracted nature of Arrington’s conduct and the magnitude of the loss required a sentence that both punished and deterred.
“Mr. Arrington’s conduct resulted in individuals losing their retirement savings and their sense of security and well-being,” said U.S. Attorney Frohling. “Along with our federal, state, and local partners, the United States Attorney’s Office remains committed to holding individuals who engage in these types of schemes accountable for their actions and to pursuing justice for their victims. Today’s sentence is a direct result of the excellent collaborative work of the agents from the FBI and the Department of Labor’s Employee Benefits Security Administration.”
“The U.S. Department of Labor’s Employee Benefits Security Administration is committed to ensuring the integrity of employee benefit programs and prosecuting those that fail to comply with the law. EBSA will continue to work aggressively with our law enforcement partners to stop the financial harm caused by these types of schemes.” said Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration.
This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Labor, Employee Benefits Security Administration. Assistant U.S. Attorneys Carol L. Kraft and John P. Scully prosecuted the case.
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For further information contact: Public Information Officer Kenneth Gales
(414) 297-1700
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Fifteen People Charged with Trafficking Semi-Truckloads of Marijuana and Laundering Drug Proceeds, over $40 Million in Assets SeizedRead the Press Release
INDIANAPOLIS – A federal grand jury has indicted fifteen people on drug trafficking and money laundering charges. Specifically, the indictment charges the defendants with a conspiracy to distribute semi-truckload quantities of marijuana and THC-containing products and to launder the bulk cash proceeds from selling the drugs. Adewale Adediran, the alleged leader of the conspiracy, was also charged with engaging in a continuing criminal enterprise. Nathan Canary was charged with firearms-related offenses.
The charges are being announced today following a week-long effort by federal agents, in conjunction with state and local law enforcement partners in Indiana, California, Kentucky, and Florida, to arrest the charged defendants and seize drugs and drug proceeds. Over the past seven days, authorities have arrested ten of the defendants, executed search warrants at twenty-three different locations in three states, and executed seizure warrants on over a dozen bank accounts and a trove of high-end jewelry. Five defendants remain at large.
According to the indictment, from 2016 until this year, Adediran and the drug trafficking organization he led used commercial-level logistics and warehousing to distribute large quantities of marijuana throughout the United States and collect millions of dollars in cash proceeds. The indictment alleges that the organization utilized commercial trucking and airplanes to facilitate the shipment of tractor-trailer loads of marijuana to warehouses and other commercial locations in various states, including Indiana. The indictment further alleges that the organization used semi-trucks and an airplane to transport large quantities of cash back to Adediran and his co-conspirators in California, and later, used cashier’s checks and bank accounts to launder the proceeds. Adediran was arrested in California and was ordered detained in the custody of the U.S. Marshal’s Service pending trial.
To date in this investigation, authorities have seized or restrained nearly $40 million in drugs, alleged drug proceeds, and assets purchased with drug proceeds. Authorities have seized over three tons of marijuana and THC-containing products, valued at over $10 million, along with over a dozen firearms. In addition to the drug and gun seizures, authorities have seized or restrained cash and bank accounts totaling over $8 million; a private jet valued at $900,000; numerous luxury automobiles, including two Rolls-Royces, two Bentleys, a Ford GT, and a Lamborghini, valued at $2 million; high-end jewelry valued at over $8 million; numerous pieces of artwork and collectible items valued at $850,000; and nine pieces of real estate with a total value of $10 million.
The following defendants were charged in the indictment:
Defendant
Charge(s)
Adewale Adediran, 36, Orange, CA
Conspiracy to Distribute Marijuana; Continuing Criminal Enterprise; and Money Laundering Conspiracy
Jazmine Adediran, 31, Orange, CA
Conspiracy to Distribute Marijuana; Money Laundering Conspiracy
Crystal Thomas, 33, Irvine, CA
Conspiracy to Distribute Marijuana
Hugo Molina, 45, Irvine, CA
Conspiracy to Distribute Marijuana
Tayo Muyiwa Olukoya, 53, Irvine, CA
**FUGITIVE**
Conspiracy to Distribute Marijuana
Stephen Lamar Richardson, 51, Noblesville, IN
Conspiracy to Distribute Marijuana
Teoddy Carillo Domingo, 46, Tustin, CA
Conspiracy to Distribute Marijuana; Money Laundering Conspiracy
Jeremy Quire, 44, Tampa, FL
**FUGITIVE**
Conspiracy to Distribute Marijuana
Marquis Bruce, 34, Tampa, FL
**FUGITIVE**
Conspiracy to Distribute Marijuana
Nathan Canary, 37, Indianapolis, IN
Conspiracy to Distribute Marijuana; Possession of a Firearm in Furtherance of a Drug Trafficking Crime; and Possession of a Firearm as a Previously Convicted Felon
Richard Davis, 32, Fishers, IN
Conspiracy to Distribute Marijuana;
Rafael Smith, 30, Fortville, IN
Conspiracy to Distribute Marijuana;
John Carson, 36, Louisville, KY
Conspiracy to Distribute Marijuana;
Mercedes Blackwell, 27, Woodland Hills, CA
**FUGITIVE**
Conspiracy to Distribute Marijuana; Money Laundering Conspiracy
If convicted on the conspiracy with intent to distribute marijuana charges, each face between ten years to life imprisonment, no less than five years supervised release, and a $10,000,000 fine. If convicted on the continuing criminal enterprise charge, Adediran faces a mandatory twenty years up to lifetime imprisonment, no more than five years supervised release, and a $2,000,000 fine. If convicted on the money laundering charge, each faces up to twenty years in prison, up to three years of supervised release, and a $500,000 fine. Actual sentences are determined by a federal district court judge and are typically less than the maximum penalties.
Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, Michael Gannon, Assistant Special Agent in Charge of the DEA’s Indianapolis Field Office, and Justin Campbell, Special Agent in Charge of IRS-Criminal Investigation Chicago Field Office made the announcement.
The Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, the Brownsburg Police Department, the Clarksville Police Department, the Southern Indiana Drug Task Force (Jeffersonville Police Dept, New Albany Police Dept, Clark County Sheriff’s Office, Harrison County Sheriff’s Office, and Floyd County Sheriff’s Office), and the Hamilton/Boone County Drug Task Force investigated the case in conjunction with Homeland Security Investigations.
U.S. Attorney Myers thanked Assistant U.S. Attorney Michelle P. Brady, who is prosecuting the case, and Assistant U.S. Attorney Kelly Rota, who is handling asset forfeiture in this case.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Felon Pleads Guilty as Charged to Federal Drug Trafficking and Firearm OffensesRead the Press Release
NEW ORLEANS, LA – United States Attorney Duane A. Evans announced that on May 19, 2022, ANTHONY PITTMAN, age 33 of Metairie, Louisiana, pleaded guilty as charged to a three-count indictment. Count 1 charged the defendant with possession with intent to distribute controlled substances in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C); Count 2 charged him 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)(i); and Count 3 charged him with possession of a firearm by a convicted felon in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2).
According to court documents, PITTMAN was previously convicted drug trafficking, among other felony firearm and drug offenses in Jefferson Parish. Due to these convictions, it is unlawful for him to possess a firearm. He is now convicted of possessing multiple firearms and possessing with the intent to distribute a cocaine, cocaine base (“crack”), and heroin. He was apprehended after a high-speed chase during an attempted traffic stop on October 4, 2020 in Westwego, Louisiana. The drugs were found in two camouflage bags which were originally seen by officers inside the car but thrown on the side of the road as the defendant tried to escape. Additional evidence consistent with drug trafficking was found in the center console of the vehicle.
For Count 1 of the indictment, PITTMAN faces a maximum term of twenty (20) years imprisonment, a fine of up to $1,000,000.00, a minimum of three (3) years of supervised release, and a $100.00 mandatory special assessment fee. For Count 2, he faces a minimum term of five (5) years up to a maximum term of life imprisonment to run consecutive to all other sentences, a fine of up to $250,000.00, up to five (5) years of supervised release, and a $100.00 mandatory special assessment fee. For Count 3, he faces a maximum of ten (10) years imprisonment, a fine of up to $250,000.00, up to three (3) years of supervised release, and a $100.00 mandatory special assessment fee.
This case is being 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.
The case was investigated by the Westwego Police department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Charles D. Strauss is in charge of the prosecution.
Federal inmate and Alabama correctional officer sentenced for attempting to smuggle methamphetamine into federal prisonRead the Press Release
ATLANTA – Julius Stoudemire and Jennifer Deramus have each been sentenced after their convictions for attempting to smuggle methamphetamine into United States Penitentiary Atlanta (“USP Atlanta”), a federal prison.
“Introducing contraband into a federal prison endangers the safety and security of inmates, guards, and visitors alike,” said U.S. Attorney Ryan K. Buchanan. “Jennifer Deramus, a correctional officer, was uniquely positioned to know those dangers and now faces significant prison time of her own.”
“Maintaining the secure environment of federal correctional facilities is key to the safety of staff, inmates, and the effort to deter future criminal conduct”, said Keri Farley, Special Agent in Charge of FBI Atlanta. “Thanks to the vigilant guards at USP Atlanta, Stoudemire and Deramus will be held accountable for their blatant criminal activity.”
According to U.S. Attorney Buchanan, the charges, and other information presented in court: In June 2019, Jennifer Deramus was a long-time correctional officer at a county jail in Prattville, Alabama. Her fiancée, Julius Stoudemire, was an inmate at USP Atlanta. On June 2, 2019, Deramus visited Stoudemire at USP Atlanta. After she went to the visitors’ restroom in the general population visiting room, she carried a cylindrical package to her seat across from Stoudemire. A guard watching the visitation area from a surveillance camera saw Deramus and Stoudemire acting unusually and sent another guard to investigate. Guards confiscated the package, and subsequent laboratory testing confirmed that the package contained methamphetamine. Deramus later made false statements to an FBI Agent about the events of that day.
Jennifer Deramus, 53, of Prattville, Alabama, was sentenced by U.S. District Judge Steven D. Grimberg to five years in prison, to be followed by four years of supervised release. On November 15, 2021, she was convicted by a jury of conspiracy to possess with intent to distribute a controlled substance, possession with intent to distribute a controlled substance, attempting to provide a prohibited object to a federal inmate, and aiding and abetting a federal inmate’s attempt to obtain a prohibited item.
Julius Stoudemire, 45, of Prattville, Alabama, was sentenced by Judge Grimberg to nine years and four months in prison, to be followed by three years of supervised release. On November 5, 2021, Stoudemire pleaded guilty to one count of attempting to obtain a prohibited object as a federal inmate.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorneys Tal C. Chaiken and Phyllis Clerk prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Federal Jury Convicts Ardmore Resident of Involuntary Manslaughter in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that Jonathan Ray Higginbotham, Jr, age 22, of Ardmore, Oklahoma was found guilty by a federal jury of Involuntary Manslaughter in Indian Country.
The jury trial began with testimony on Tuesday, May 17, 2022, and concluded on Thursday, May 19, 2022, with the guilty verdict.The evidence presented at trial proved that on January 19, 2021, the defendant fired a 9mm Hi-Point carbine killing George Powell in a private residence in the City of Ardmore.
The guilty verdict was the result of an investigation by the Federal Bureau of Investigation and the Ardmore Police Department.
The United States Attorney’s Office for the Eastern District of Oklahoma prosecuted the case because the defendant in this case is a member of a federally recognized Indian tribe and the crime occurred in Carter County, within the boundaries of the Chickasaw Nation Reservation, and within the Eastern District of Oklahoma.
The Honorable Scott L. Palk, U.S. District Judge in the United States District Court for the Western District of Oklahoma in Oklahoma City, presided over the trial and ordered the completion of a presentence report. Sentencing will be scheduled following completion of the report. Higginbotham was remanded to the custody of the United States Marshal pending the imposition of sentencing.
Assistant United States Attorneys Patrick Flanigan and Casey Richmond represented the United States.
Fayette County Woman Pleads Guilty to Being a Straw PurchaserRead the Press Release
BECKLEY, W.Va. – A Fayette County woman pleaded guilty to providing false information on a government form in order to acquire firearms.
According to court documents and statements made in court, on December 23, 2020, Terri Lawhorn, 27, of Fayetteville, bought three firearms: a Glock 44 .22-caliber pistol; a Glock 43 9mm pistol; and a Glock 42 .380-caliber pistol. Lawhorn admitted that she purchased the firearms for Bisheem Jones, also known as “Bosh,” who is separately charged in a pending gun trafficking conspiracy. Through an intermediary, Jones had given Lawhorn money to buy the firearms and told her which ones to buy from a gun dealer in Mount Hope, West Virginia.
Lawhorn purchased at least six firearms as part of the overall scheme. Each time Lawhorn bought firearms for Jones, she lied on the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Form 4473, Federal Firearms Transaction Records, certifying that she was buying the guns for herself when she knew they were for Jones.
Lawhorn is scheduled to be sentenced on September 2, 2022, and faces a maximum penalty of five years in prison, three years of supervised release and a $250,000 fine.
United States Attorney Will Thompson made the announcement and commended the ATF, which conducted the investigation.
United States District Judge Frank W. Volk presided over the hearing. Assistant United States Attorney Negar M. Kordestani is prosecuting the case.
Lawhorn is among 13 individuals indicted in connection with their roles in a conspiracy to traffic over 130 firearms from the Beckley area to Philadelphia, Pennsylvania. More than 30 of the firearms have been recovered in Philadelphia and have been connected to two homicides, crimes of domestic violence, and other violent offenses.
Co-defendant Arileah Lacy, also known as “Leah,” 24, of Beckley, pleaded guilty on April 22, 2022, to providing false information on an ATF form in order to acquire a firearm. The case remains pending against Jones and the other co-defendants. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case is part of Project Safe Neighborhoods (PSN), 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.
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. 5:22-cr-46.
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Dominican Republic Citizen Extradited to United States on Money Laundering ChargesRead the Press Release
NEWARK, N.J. – A citizen of the Dominican Republic who was extradited to the United States on money laundering charges made his initial appearance in New Jersey federal court, U.S. Attorney Philip R. Sellinger announced.
Jonathan Humeau-Hernandez, 41, is charged by indictment with five counts of money laundering and conspiracy to commit money laundering for his role in laundering millions in illegal cash drug proceeds from the United States to the Dominican Republic. Humeau-Hernandez was arrested in the Dominican Republic at the request of the United States on Feb. 20, 2022, and extradited to the United States. He had his initial appearance by videoconference this afternoon before U.S. Magistrate Judge Cathy L. Waldor and was detained.
According to documents filed in this case and statements made in court:
Humeau-Hernandez was part of a criminal conspiracy that arranged to have large sums of cash drug proceeds in the United States laundered through the U.S. banking system and transferred to the Dominican Republic and elsewhere. From November 2018 through February 2020, Humeau-Hernandez coordinated with conspirators in New Jersey to pick up millions of dollars in cash drug proceeds and convert the cash into cashier’s checks or deposit the cash into accounts specified by Humeau-Hernandez so it could be transferred to other accounts. Humeau-Hernandez took these steps in order to conceal the nature, source, ownership, and control of the illegal drug proceeds and to avoid scrutiny by law enforcement and banking institutions.
The money laundering charges against Humeau-Hernandez carry a maximum penalty of 20 years in prison and a fine of $500,000 or twice the amount involved in the offense, whichever is greater.
U.S. Attorney Sellinger credited special agents of the U.S. Drug Enforcement Administration, New Jersey Division, under the direction of Special Agent in Charge Susan A. Gibson; the DEA Special Operations Division, and the Santo Domingo Country Office, under the supervision of Special Agent in Charge Renita D. Foster; special agents of IRS Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy L. Tomlins; and the Morristown, New Jersey, Police Department, under the direction of Chief Darnell Richardson; with the investigation leading to the charges. The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest of Humeau-Hernandez and his extradition to the United States. U.S. Attorney Sellinger thanked officials in the Dominican Republic for their assistance in the investigation.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the Criminal Division in Newark.
This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
District Man Sentenced to 25 Years in Prison for Fatally Stabbing Woman in Northeast WashingtonRead the Press Release
WASHINGTON –Robert Dean, 64, of Washington, D.C., was sentenced today to 25 years in prison for fatally stabbing a woman with a screwdriver in Northeast Washington, announced U.S. Attorney Matthew M. Graves and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Dean was found guilty by a jury in November 2021 of second-degree murder while armed. The verdict followed a trial in the Superior Court of the District of Columbia. He was sentenced by the Honorable Marisa J. Demeo.
According to the government’s evidence, on March 31, 2018, shortly before 5:04 p.m., Dean stabbed his former girlfriend, Tamiya White, 38, at her parking lot in the 1000 block of Mount Oliver Road NE before she drove herself to the local McDonalds to seek help. Ms. White’s two children were in the apartment at the time.
Dean was arrested on April 5, 2018. He has been in custody ever since.
In announcing the sentence, U.S. Attorney Graves and Chief Contee commended the work of those who investigated the case from the Metropolitan Police Department. They expressed appreciation for the assistance provided by Bode Forensics and the FBI’s Cellular Analysis Survey Team (CAST). They also acknowledged the efforts of those who handled the case at the U.S. Attorney’s Office, including Assistant U.S. Attorneys Sharon Donovan, Emma McArthur and Eric Hansford; Chrisellen Kolb, Chief of the Appellate Division; Paralegal Specialists Grazy Rivera and Stephanie Siegerist; Investigative Analyst Zachary McMenamin; former Victim/Witness Advocate Marcia Rinker; Litigation Technology Specialist Taylor Davis; Forensic Child Interviewers Tracy Owusu and Karen Giannakoulias; Intern Lauren Rogers, and teams from the Victim/Witness Assistance Unit and the Litigation Technology Unit.
Finally, they commended the work of Assistant U.S. Attorneys Monica Trigoso and George A. Pace, who investigated and prosecuted the case.
Detroit Man Pleads Guilty to Fentanyl Drug CrimeRead the Press Release
HUNTINGTON, W.Va. – A Detroit man pleaded guilty to the distribution of a quantity of fentanyl.
According to court documents and statements made in court, Kyle L. Thomas, also known as “Trip,” 22, admitted to selling a quantity of fentanyl to a confidential informant in Amigo, Raleigh County, on October 18, 2021.
Thomas is scheduled to be sentenced on Sept. 2, 2022, and faces a maximum penalty of 20 years in prison, three years of supervised release and a $1 million fine.
United States Attorney Will Thompson made the announcement and commended the Beckley/Raleigh County Drug and Violent Crime Unit (BRCDVCU) and the Federal Bureau of Investigation (FBI) for conducting the investigation.
United States District Judge Frank W. Volk presided over the hearing. Assistant United States Attorney Andrew D. Isabell is prosecuting the case.
The case is a result of a months-long investigation dubbed “Operation Wolverine Carousel,” an investigation into the wide-spread distribution of heroin and fentanyl in Raleigh and Fayette Counties.
The investigation was part of the Department of Justice’s Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations and is the keystone of the Department of Justice’s drug reduction strategy. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking organizations, transnational criminal organizations, and money laundering organizations that present a significant threat to the public safety, economic, or national security of the United States.
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. 5:22-cr-29.
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Defendants Sentenced in Tennessee for Multimillion-Dollar Nationwide Telemedicine Pharmacy Fraud SchemeRead the Press Release
This week, a federal judge in Greeneville, Tennessee, sentenced seven individuals and seven related corporate entities for their roles in a multimillion-dollar health care fraud scheme.
According to court documents and evidence presented at trial, Peter Bolos and his co-conspirators, Michael Palso, Andrew Assad, Scott Roix, Larry Smith, Mihir Taneja, Arun Kapoor and Maikel Bolos, as well as various companies owned or controlled by some of these individuals, deceived pharmacy benefit managers (PBMs), such as Express Scripts and CVS Caremark, regarding tens of thousands of prescriptions. The PBMs processed and approved claims for prescription drugs on behalf of insurance companies. Bolos and his co-conspirators defrauded the PBMs into authorizing millions of dollars’ worth of claims that private insurers such as Blue Cross Blue Shield of Tennessee, and public insurers such as Medicaid and TRICARE, paid to pharmacies controlled by the co-conspirators.
Peter Bolos was convicted by a federal jury in December 2021. Roix, Assad, Palso, Smith, Maikel Bolos, and various associated business entities pleaded guilty to their roles in the conspiracy. Taneja, Kapoor, and Sterling Knight pleaded guilty to felony misbranding in a conspiracy with Bolos. U.S. District Judge J. Ronnie Greer imposed sentences this week for all of the defendants except Roix, whose sentencing hearing was rescheduled for June 15, 2022.
On May 16, the court sentenced Bolos to 14 years in prison and $2.5 million in forfeiture. On the same date, the court also sentenced Palso, 48, of Lutz, Florida, to 33 months in prison. Bolos and Palso also were each ordered to pay nearly $25 million in restitution.
On May 17, the court sentenced Smith, 52, of Tampa, to 42 months of imprisonment. The now-defunct corporate entities that Smith created, Alpha Omega Pharmacy, Germaine Pharmacy, Zoetic Pharmacy, ULD Wholesale LLC, and Tanith Enterprises, all were sentenced to pay nearly $25 million in restitution. The court also sentenced Taneja, 47, of Tampa, to 10 months of imprisonment and a $10,000 fine.
On May 18, the court sentenced Kapoor, 48, of Temple Terrace, Florida, to three years’ probation and a $10,000 fine. Sterling Knight, a now-defunct corporate entity that Kapoor and Taneja created, was sentenced to pay $21 million in restitution. The court also sentenced Maikel Bolos, 36, of Tampa, to 15 months of imprisonment and a $25,000 fine.
On May 19, the court sentenced Assad, 37, of Tampa, to 24 months of imprisonment and to pay nearly $25 million in restitution. HealthRight was sentenced to pay $4.25 million in restitution.
“The significant sentences imposed by the court reflect the seriousness of this large-scale fraud scheme, in which the defendants deceived consumers in order to facilitate the distribution of drugs without proper medical oversight, and overbilled insurers for illegal prescriptions,” said Deputy Assistant Attorney General Arun G. Rao, head of the Civil Division’s Consumer Protection Branch. “The department will continue to work with law enforcement partners to prosecute those who take advantage of telemedicine to perpetrate fraud schemes that violate the Food, Drug, and Cosmetic Act.”
“The scale of the prescription-drug fraud scheme orchestrated by these defendants and their conspirators was astonishing, and the court’s prison sentences reflect the seriousness of their crimes,” said U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “The financial harm caused by health care fraud hurts all Americans, and the United States Attorney’s Office for the Eastern District of Tennessee will continue to support the cooperation among its federal law enforcement partners that is necessary to bring criminal swindlers like these defendants to justice.”
“This sentencing is the result of a multi-agency investigation into a complex telemedicine pharmacy fraud scheme, requiring substantial investigative resources,” said Special Agent in Charge Joseph E. Carrico of the FBI Knoxville Field Office. “The FBI, with its law enforcement partners, will remain vigilant to assure that unscrupulous individuals who exploit our health care system are brought to justice.”
“Distributing misbranded prescription drugs in the U.S. marketplace places patients’ health at risk,” said Special Agent in Charge Justin C. Fielder of the FDA Office of Criminal Investigations (OCI) Miami Field Office. “We will continue to pursue and bring to justice those who put profits ahead of public health.”
“Bolos and his co-conspirators abandoned their responsibilities in the health care industry through an elaborate fraud scheme and manipulated the system without regard for patient need or medical necessity to line their pockets,” said Special Agent in Charge John Condon of Homeland Security Investigations (HSI) Tampa. “These significant sentences should serve as a warning to anyone who attempts to deceive the government and steal from taxpayers.”
“Providers who solicit beneficiaries’ personal information and use it to defraud federal health care programs not only undermine the integrity of those programs; they also divert valuable taxpayer dollars for self-serving purposes,” said Special Agent in Charge Tamala E. Miles of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG is proud to work alongside our law enforcement partners to investigate and hold accountable perpetrators of federal health care fraud.”
“The U.S. Postal Service, Office of Inspector General, will continue to vigorously investigate those who commit frauds against federal benefit programs and the U.S. Postal Service,” said Special Agent in Charge Matthew Modafferi of the U.S. Postal Service, Office of Inspector General Northeast Area Field Office. “The sentences in this case sends a clear message to pharmaceutical companies that tactics like these will not be tolerated. The U.S. Postal Service, Office of Inspector General would like to thank our law enforcement partners and the Department of Justice for their dedication and efforts in this investigation.”
“Today’s sentencing holds the conspirators accountable for their reprehensible scheme that mislead patients and defrauded the federal government,” said Special Agent in Charge Amy K. Parker of OPM OIG. “The OPM OIG, along with our law enforcement partners, is committed to investigating individuals that seek to enrich themselves at the expense of patients, taxpayers, and the federal healthcare programs.”
Court documents and evidence at trial established that Bolos, Assad, and Palso owned and operated Synergy Pharmacy in Palm Harbor, Florida. Under their direction, Synergy employed Roix, a Florida telemarketer operating under the name HealthRight, to generate prescriptions for Synergy and the other pharmacies involved in the scheme. The prescriptions were typically for drugs such as pain creams, scar creams and vitamins. Evidence showed that to obtain the prescriptions, Roix used HealthRight’s telemarketing platform as a telemedicine service, cold-calling consumers and deceiving them into agreeing to accept the drugs and to provide their personal insurance information. HealthRight then paid doctors to authorize the prescriptions through its telemedicine platform, even though the doctors never communicated directly with the patients and relied solely on the telemarketers’ screening process as the basis for their authorizations. Because this faulty and fraudulent process made the prescriptions invalid, the drugs were misbranded under the Food, Drug and Cosmetic Act. Evidence showed that Synergy and the other pharmacies nonetheless dispensed the drugs to consumers as part of the scheme so that Bolos could submit fraudulent reimbursement claims.
Court documents and evidence at trial further established that during the conspiracy, which lasted from May 2015 through April 2018, Bolos and Palso, along with Assad, paid Roix millions of dollars to buy at least 60,000 invalid prescriptions generated by HealthRight. Evidence showed that Bolos selected specific medications for the prescriptions that he could submit for profitable reimbursements at inflated prices, and that Bolos, Palso, and Assad used illegal means to hide this activity from the PBMs so it could remain undetected.
The convictions resulted from a multi-year investigation conducted by the HHS-OIG (Nashville); FDA-OCI (Nashville); U.S. Postal Service, Office of Inspector General (Buffalo); FBI (Knoxville and Johnson City, Tennessee); OPM-OIG (Atlanta); and HSI (Tampa). The U.S. Marshals Service also assisted in the investigation and the forfeiture of assets.
Assistant U.S. Attorney Mac Heavener of the U.S. Attorney’s Office for the Eastern District of Tennessee and Senior Trial Attorney David Gunn of the Civil Division’s Consumer Protection Branch in Washington are prosecuting the case. They were assisted by Barbra Pemberton, Bryan Brandenburg and April Denard from the U.S. Attorney’s Office.
Defendants Sentenced in Tennessee for Multimillion-Dollar Nationwide Telemedicine Pharmacy Fraud SchemeRead the Press Release
GREENEVILLE, Tenn. This week, a federal judge in Greeneville, Tennessee, sentenced seven individuals and seven related corporate entities for their roles in a multimillion-dollar health care fraud scheme.
According to court documents and evidence presented at trial, Peter Bolos and his co-conspirators, Michael Palso, Andrew Assad, Scott Roix, Larry Smith, Mihir Taneja, Arun Kapoor and Maikel Bolos, as well as various companies owned or controlled by some of these individuals, deceived pharmacy benefit managers (PBMs), such as Express Scripts and CVS Caremark, regarding tens of thousands of prescriptions. The PBMs processed and approved claims for prescription drugs on behalf of insurance companies. Bolos and his co-conspirators defrauded the PBMs into authorizing millions of dollars’ worth of claims that private insurers such as Blue Cross Blue Shield of Tennessee, and public insurers such as Medicaid and TRICARE, paid to pharmacies controlled by the co-conspirators.
Peter Bolos was convicted by a federal jury in December 2021. Roix, Assad, Palso, Smith, Maikel Bolos, and various associated business entities pleaded guilty to their roles in the conspiracy. Taneja, Kapoor, and Sterling Knight pleaded guilty to felony misbranding in a conspiracy with Bolos. U.S. District Judge J. Ronnie Greer imposed sentences this week for all the defendants except Roix, whose sentencing hearing was rescheduled for June 15, 2022.
On May 16, the court sentenced Bolos to 14 years in prison and $2.5 million in forfeiture. On the same date, the court also sentenced Palso, 48, of Lutz, Florida, to 33 months in prison. Bolos and Palso also were each ordered to pay nearly $25 million in restitution.
On May 17, the court sentenced Smith, 52, of Tampa, to 42 months of imprisonment. The now-defunct corporate entities that Smith created, Alpha Omega Pharmacy, Germaine Pharmacy, Zoetic Pharmacy, ULD Wholesale LLC, and Tanith Enterprises, all were sentenced to pay nearly $25 million in restitution. The court also sentenced Taneja, 47, of Tampa, to 10 months of imprisonment and a $10,000 fine.
On May 18, the court sentenced Kapoor, 48, of Temple Terrace, Florida, to three years’ probation and a $10,000 fine. Sterling Knight, a now-defunct corporate entity that Kapoor and Taneja created, was sentenced to pay $21 million in restitution. The court also sentenced Maikel Bolos, 36, of Tampa, to 15 months of imprisonment and a $25,000 fine.
On May 19, the court sentenced Assad, 37, of Tampa, to 24 months of imprisonment and to pay nearly $25 million in restitution. HealthRight was sentenced to pay $4.25 million in restitution.
“The significant sentences imposed by the court reflect the seriousness of this large-scale fraud scheme, in which the defendants’ deceived consumers in order to facilitate the distribution of drugs without proper medical oversight, and overbilled insurers for illegal prescriptions,” said Deputy Assistant Attorney General Arun G. Rao, head of the Civil Division’s Consumer Protection Branch. “The department will continue to work with law enforcement partners to prosecute those who take advantage of telemedicine to perpetrate fraud schemes that violate the Food, Drug, and Cosmetic Act.”
“The scale of the prescription-drug fraud scheme orchestrated by these defendants and their conspirators was astonishing, and the Court’s prison sentences reflect the seriousness of their crimes,” said U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “The financial harm caused by health care fraud hurts all Americans, and the United States Attorney’s Office for the Eastern District of Tennessee will continue to support the cooperation among its federal law enforcement partners that is necessary to bring criminal swindlers like these defendants to justice.”
“This sentencing is the result of a multi-agency investigation into a complex telemedicine pharmacy fraud scheme, requiring substantial investigative resources,” said Special Agent in Charge Joseph E. Carrico of the FBI’s Knoxville Field Office. “The FBI, with its law enforcement partners, will remain vigilant to assure that unscrupulous individuals who exploit our health care system are brought to justice.”
“Distributing misbranded prescription drugs in the U.S. marketplace places patients’ health at risk,” said Special Agent in Charge Justin C. Fielder of the FDA Office of Criminal Investigations (OCI) Miami Field Office. “We will continue to pursue and bring to justice those who put profits ahead of public health.”
“Bolos and his co-conspirators abandoned their responsibilities in the health care industry through an elaborate fraud scheme and manipulated the system without regard for patient need or medical necessity to line their pockets,” said Special Agent in Charge John Condon of Homeland Security Investigations (HSI) Tampa. “These significant sentences should serve as a warning to anyone who attempts to deceive the government and steal from taxpayers.”
“Providers who solicit beneficiaries’ personal information and use it to defraud federal health care programs not only undermine the integrity of those programs; they also divert valuable taxpayer dollars for self-serving purposes,” said Special Agent in Charge Tamala E. Miles of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG is proud to work alongside our law enforcement partners to investigate and hold accountable perpetrators of federal health care fraud.”
“The U.S. Postal Service, Office of Inspector General, will continue to vigorously investigate those who commit frauds against federal benefit programs and the U.S. Postal Service,” said Special Agent in Charge Matthew Modafferi of the U.S. Postal Service, Office of Inspector General. Northeast Area Field Office. “The sentences in this case sends a clear message to pharmaceutical companies that tactics like these will not be tolerated. The U.S. Postal Service, Office of Inspector General would like to thank our law enforcement partners and the Department of Justice for their dedication and efforts in this investigation.”
“Today’s sentencing holds the conspirators accountable for their reprehensible scheme that mislead patients and defrauded the federal government,” said Amy K. Parker, Special Agent in Charge, OPM OIG. “The OPM OIG, along with our law enforcement partners, is committed to investigating individuals that seek to enrich themselves at the expense of patients, taxpayers, and the federal healthcare programs.”
Court documents and evidence at trial established that Bolos, Assad, and Palso owned and operated Synergy Pharmacy in Palm Harbor, Florida. Under their direction, Synergy employed Roix, a Florida telemarketer operating under the name HealthRight, to generate prescriptions for Synergy and the other pharmacies involved in the scheme. The prescriptions were typically for drugs such as pain creams, scar creams and vitamins. Evidence showed that to obtain the prescriptions, Roix used HealthRight’s telemarketing platform as a telemedicine service, cold-calling consumers and deceiving them into agreeing to accept the drugs and to provide their personal insurance information. HealthRight then paid doctors to authorize the prescriptions through its telemedicine platform, even though the doctors never communicated directly with the patients and relied solely on the telemarketers’ screening process as the basis for their authorizations. Because this faulty and fraudulent process made the prescriptions invalid, the drugs were misbranded under the Food, Drug and Cosmetic Act. Evidence showed that Synergy and the other pharmacies nonetheless dispensed the drugs to consumers as part of the scheme so that Bolos could submit fraudulent reimbursement claims.
Court documents and evidence at trial further established that during the conspiracy, which lasted from May 2015 through April 2018, Bolos and Palso, along with Assad, paid Roix millions of dollars to buy at least 60,000 invalid prescriptions generated by HealthRight. Evidence showed that Bolos selected specific medications for the prescriptions that he could submit for profitable reimbursements at inflated prices, and that Bolos, Palso, and Assad used illegal means to hide this activity from the PBMs so it could remain undetected.
The convictions resulted from a multi-year investigation conducted by the HHS-OIG (Nashville); FDA-OCI (Nashville); U.S. Postal Service, Office of Inspector General (Buffalo); FBI (Knoxville and Johnson City, Tennessee); OPM-OIG (Atlanta); and HSI (Tampa). The U.S. Marshals Service also assisted in the investigation and the forfeiture of assets.
Assistant U.S. Attorney Mac Heavener of the U.S. Attorney’s Office for the Eastern District of Tennessee and Senior Trial Attorney David Gunn of the Civil Division’s Consumer Protection Branch in Washington are prosecuting the case. They were assisted by Barbra Pemberton, Bryan Brandenburg and April Denard from the U.S. Attorney’s Office.
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Current and Former DEA Agents Indicted for Bribery SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and James F. Boyersmith, Special Agent-in-Charge of the Department of Justice Office of the Inspector General Miami Field Office, announced today that JOHN COSTANZO JR., a Drug Enforcement Administration (“DEA”) Special Agent, and MANUEL RECIO, a former DEA Assistant Special Agent-in-Charge, were indicted in Manhattan federal court with conspiracy to bribe a public official, conspiracy to commit honest services wire fraud, and honest services wire fraud, for a scheme in which RECIO funneled tens of thousands of dollars to COSTANZO in exchange for COSTANZO providing sensitive law enforcement information to RECIO to assist RECIO in recruiting clients for defense lawyers. In addition, COSTANZO was charged with accepting a bribe from RECIO and RECIO was charged with giving a bribe to COSTANZO. COSTANZO and RECIO were arrested today and presented before Magistrate Judge Barbara Moses. The case has been assigned to U.S. District Judge J. Paul Oetken.
U.S. Attorney Damian Williams said: “The conduct alleged in the indictment violates the core duty of law enforcement officers to protect and serve the public, rather than to use their access to sensitive information to enrich themselves. As alleged, Manuel Recio provided substantial secret payments to John Costanzo Jr., and in exchange, received information about pending DEA investigations, sealed indictments, and impending arrests. It is critical for federal law enforcement officers to preserve the integrity of ongoing investigations and not divulge confidential information to the private sector in exchange for financial benefits.”
According to the Indictment unsealed today in Manhattan federal court:[1]
JOHN COSTANZO JR. is a DEA special agent currently assigned to DEA Headquarters and was a Group Supervisor in the DEA’s Miami Field Office until June 2019. MANUEL RECIO is a former DEA special agent who retired as the Assistant Special Agent-in-Charge for the Miami Field Office in November 2018. Upon his retirement, RECIO began operating his own business, which provided private investigative services to criminal defense attorneys and also helped defense attorneys to recruit clients. From around the time of RECIO’s retirement through around November 2019, RECIO agreed with COSTANZO to provide benefits to COSTANZO in exchange for COSTANZO providing RECIO with nonpublic information about DEA investigations. COSTANZO provided RECIO with information about forthcoming, sealed indictments and nonpublic investigations, such as the identities of individuals charged and the anticipated timing of arrests; and intelligence which COSTANZO obtained from the Narcotics and Dangerous Drugs Information System (“NADDIS”), a DEA database that contains information about individuals who are or have been under investigation by the DEA. RECIO paid COSTANZO for this information, which RECIO used to help recruit new clients for criminal defense attorneys.
As alleged in the Indictment, among the benefits paid to COSTANZO were a $2,500 payment made in November 2018, shortly after RECIO’s retirement from the DEA, which was funneled to COSTANZO through a company owned by a close family member of COSTANZO. At the same time that this payment was made, RECIO began asking COSTANZO to run searches in NADDIS to provide RECIO with nonpublic DEA information about DEA targets and investigations. Following that initial payment, RECIO and others continued to provide benefits to COSTANZO, including tens of thousands of dollars that were funneled from RECIO through a company created by a DEA task force officer, and $50,000 that was paid to COSTANZO through a close family member for COSTANZO’s purchase of a condominium in January and February 2019.
In return, COSTANZO continued to provide nonpublic DEA information to RECIO, including information about the timing of forthcoming indictments and information about DEA arrest plans of particular targets. COSTANZO also searched NADDIS for names of particular individuals requested by RECIO on dozens of occasions during the scheme, and provided RECIO with information and assistance with particular charged defendants represented by attorneys for whom REICO was working. During the scheme, COSTANZO and RECIO took steps to conceal the existence of the scheme, including by structuring the payments from RECIO to COSTANZO through third parties, and through COSTANZO’s use of a cellphone provided by RECIO for communications related to the scheme.
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COSTANZO JR., 47, of Arlington, Virginia, and RECIO, 53, of Miami, Florida, are each charged with one count of conspiracy to commit bribery, which carries a maximum term of five years in prison, and one count of receiving or paying a bribe, respectively, which carries a maximum term of 15 years in prison. COSTANZO and RECIO are also charged with one count of conspiracy to commit honest services wire fraud and one count of honest services wire fraud, each of which counts carries a maximum term of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI and the Department of Justice Office of the Inspector General, and thanked the DEA’s Office of Professional Responsibility for its support in this matter.
The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Thane Rehn and Sheb Swett are in charge of the prosecution.
[1] The entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Coordinadores De Alerta Amber De Estados De México Colaboran Para Mejorar Los Esfuerzos En La Recuperación De Menores Desaparecidos Y Secuestrados En MéxicoRead the Press Release
Merida, Mexico -- Coordinadores de Alerta AMBER de varios estados de México se reunieron en una conferencia de tres días en Mérida, Yucatán, para discutir y proporcionar actualizaciones sobre los avances en la implementación del sistema de Alerta AMBER. La Oficina Internacional para el Desarrollo de Sistemas de Procuración de Justicia (OPDAT) del Departamento de Justicia de EEUU, a través de la financiación de la Oficina de Asuntos Internacionales de Narcóticos y Aplicación de la Ley (INL), organizaron esta conferencia para mejorar tanto la utilización como la coordinación de la Alerta AMBER en todo el país y promover los objetivos del Marco del Bicentenario de Seguridad entre Estados Unidos y México. Expertos en la materia del departamento de U.S. Marshals, la Oficina Federal de Investigaciones (FBI) y el Centro Internacional para Niños Desaparecidos y Explotados participaron en este evento.
El sistema de Alerta AMBER se originó en los Estados Unidos en 1996 para difundir rápidamente información sobre menores desaparecidos y secuestrados. En 2012, OPDAT e INL se asociaron con el gobierno de México para lanzar el mismo sistema en México. México es el primer país de América Latina en adoptar el sistema de Alerta AMBER. Desde el inicio de la alerta se han recuperado 966 menores a nivel nacional.
Esta conferencia brindó a los coordinadores de Alerta AMBER la oportunidad de evaluar los éxitos y desafíos en su implementación del programa y promover mayor coordinación entre los estados y el gobierno federal. Un experto mexicano detalló cómo el análisis forense de ADN puede promover las investigaciones de personas desaparecidas. Asimismo, expertos en tecnología de compañías explicaron cómo se pueden aprovechar las redes sociales para compartir rápidamente información sobre menores desaparecidos. Incluso, participantes crearon un plan de acción para aumentar la coordinación y presentaron las mejores prácticas que se implementarán en sus respectivos estados.
La conferencia incluyó las palabras de apertura del Embajador Ken Salazar y Dorothy Ngutter, Cónsul General en Mérida. “Hemos visto que la red de Alerta AMBER ha sido de gran importancia para reunir a las familias. A su vez, ha fomentado la coordinación entre los dos países y nos permite avanzar en nuestros objetivos de seguridad, especialmente contribuyendo a la tranquilidad de nuestras naciones”, dijo el Embajador Salazar. ‘El trabajo que realizan a través de Alerta AMBER es crucial para actuar rápidamente y de manera coordinada para localizar a los menores desaparecidos’.
El objetivo de esta conferencia fue continuar institucionalizando la comunicación, la cooperación y la coordinación en casos que involucran a niños desaparecidos para promover la protección de las poblaciones vulnerables y contribuir a nuestra seguridad compartida. OPDAT continuará apoyando el uso de la Alerta AMBER y ofrecerá oportunidades de desarrollo de capacidades en México.
Para más información visite (www.alertaamber.gob.mx)
Cleveland Man Sentenced to 10 Years in Prison for Illegal Use of Firearms and Distributing a Substance Containing FentanylRead the Press Release
Oxford, MS – A Cleveland, Mississippi man was sentenced on Tuesday to 117 months in prison for his role in distributing a mixture and substance containing fentanyl and possessing a firearm during and in relation to a drug trafficking crime.
According to court documents, Davion Hunter a/k/a “D,” 38, previously pled guilty to two counts of an indictment charging that he aided and abetted the distribution of a substance containing fentanyl and that he possessed a firearm during and in relation to a drug trafficking crime. According to court documents and records, Hunter distributed narcotics to an FBI confidential informant, and also arranged for a third individual to sell heroin and multiple firearms to the same informant. Following that transaction, the DEA laboratory analyzed the substance sold as heroin and confirmed it contained fentanyl. On Tuesday morning, U.S. District Judge Sharion Aycock sentenced Hunter to almost 10 years in prison after hearing arguments and comments from Hunter, his counsel, and a prosecutor from the U.S. Attorney’s Office.
“The prosecution of individuals who illegally possess and use guns and who distribute illicit drugs has always been a priority in the United States Attorney’s Office for the Northern District of Mississippi,” remarked U.S. Attorney Clay Joyner. “These prosecutions are especially significant as we see an increase in the number of illicit controlled substances in our District that contain fentanyl and overdose deaths that result. The distribution of illegal narcotics is not a “victimless crime,” and this office remains committed to working with law enforcement partners to ensure that those who participate in the distribution of illegal narcotics in our community are held accountable for the full range of their illegal acts.”
FBI Special Agent in Charge Jermicha Fomby also commented on the sentence. " The FBI remains committed to collaboratively reducing the negative impact bad actors cause to the public through the distribution of illegal narcotics, as well as the use of unauthorized firearms in the furtherance of their crimes,” remarked Fomby. “The inclusion of fentanyl exponentially adds danger to the community which often ends in fatalities. The FBI will continue to aggressively investigate these matters in the same manner we brought Mr. Hunter to justice."
The FBI Jackson Division’s Oxford Resident Agency investigated the case as part of the Organized Crime Drug Enforcement Task Force (OCDEFT) and Project Safe Neighborhoods programs in partnership with state and local law enforcement. Multiple agencies played critical roles in the investigation, including the Cleveland Police Department, ATF, DEA, Mississippi Bureau of Investigation, and the Mississippi Highway Patrol.
Assistant U.S. Attorney Jay Hale prosecuted the case.
This operation was one of many parts of Project Safe Neighborhoods (PSN), 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.
Chicago Gang Member Sentenced to 35 Years in Federal Prison for Racketeering Offenses Including MurderRead the Press Release
CHICAGO — A member of a violent Chicago street gang has been sentenced to 35 years in federal prison for engaging in a pattern of racketeering activity that included the murder of a rival gang member.
LUIS CONTRERAS, 42, of Chicago, pleaded guilty earlier this year to a federal charge of conspiracy to commit racketeering activity. U.S. District Judge Matthew F. Kennelly imposed the prison sentence Thursday after a hearing in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen De Tineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; Angie Salazar, Special Agent-in-Charge of Homeland Security Investigations in Chicago; and David Brown, Superintendent of the Chicago Police Department. The government was represented by Assistant U.S. Attorney Kavitha Babu.
Contreras admitted in a plea agreement that he was a member of the Latin Saints street gang, a criminal organization whose members and associates engaged in drug dealing and violence, including murder and assault, to acquire and preserve the gang’s territory in the Back of the Yards neighborhood on Chicago’s South Side. Contreras further admitted that on Feb. 18, 2018, he and other members of the Latin Saints fired multiple shots at rival gang members who were sitting in a vehicle in the 7700 block of South Kilbourn Avenue in Chicago’s Scottsdale neighborhood. The shots killed Andre Franzell, 23, and wounded another individual. Contreras admitted that the murder of Franzell was committed to further the purposes of the Latin Saints.
When Contreras was arrested at his home by federal law enforcement in October 2018, he was found in possession of two rifles and a handgun.
Charleston Woman Pleads Guilty to Federal Drug CrimeRead the Press Release
CHARLESTON, W.Va. – A Charleston woman pleaded guilty to distribution of 50 grams or more of methamphetamine.
According to court documents and statements made in court, Caila Vance, 26, admitted to selling suspected methamphetamine to a confidential informant on February 8, 2022. The substance later tested positive as methamphetamine.
Vance is scheduled to be sentenced on September 15, 2022, and faces mandatory minimum of five years and up to 40 years in prison as well as at least four years of supervised release and a $5 million fine.
United States Attorney Will Thompson made the announcement and commended the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) for conducting the investigation.
United States District Judge Irene C. Berger presided over the hearing. Assistant United States Attorney Steve Loew is prosecuting 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. 2:22-cr-57.
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Carmel, Indiana Man Sentenced to 84 Months in PrisonRead the Press Release
HAMMOND- George McKown, age 71, of Carmel, Indiana was sentenced before United States District Court Judge Philip P. Simon on his conviction for Wire Fraud and Conspiracy to Commit Securities Fraud, announced United States Attorney Clifford D. Johnson.
McKown was sentenced to 84 months in prison and ordered to pay over $5,212,159.45 dollars in restitution to the victims of his securities fraud and wire fraud schemes.
According to documents filed in this case, between 2008 and 2013, McKown partnered with Richard Gearhart to operate Asset Preservation Specialists (APS) a company they claimed would make profitable market investments for its clients. McKown and Gearhart recruited over 40 individuals to invest their savings, pensions, death benefits, and IRAs with APS, ultimately collecting millions of dollars. McKown, representing himself as the President of APS, promised his investors there was no risk to their initial deposit, they would receive a return of 6% to 8% on their investments and, upon request, their initial investment would be returned within thirty days.
After receiving the investors’ money, McKown and Gearhart abandoned the plan to invest money in the market and began using their clients’ investments to fund their own personal business projects and projects of their associates. By 2013, McKown and Gearhart had squandered over $5,000,000 of their investors’ money.
The individuals, through APS, kept its investors in the dark about the losses by sending fraudulent financial statements and 1099s to investors which falsely showed they were making a consistent profit on their investments. Through APS, the pair further continued to recruit new investors to hide the losses and keep the scheme afloat. Many of the victims first learned that APS had lost their savings when Gearhart filed for bankruptcy in 2013.
Co-defendant, Richard Gearhart pled guilty to conspiracy to commit securities fraud in December of 2019. He was sentenced to five years imprisonment and ordered to pay over $5 million in restitution in July of 2021. McKown was convicted of his fraud offenses following a jury trial in October 2021.
The case was investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation, and the Indiana Secretary of State Securities Division. This case was prosecuted by Assistant United States Attorney Thomas McGrath and former Assistant United States Attorney Toi Denise Houston.
Bristol Man Sentenced to 13 Years for Attempting to Engage in Sex with Minor, Distributing Child PornographyRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that ROBERT MARLIN SELLERS, 62, of Bristol, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 156 months of imprisonment, followed by 15 years of supervised release, for child exploitation offenses related to his attempt to engage in commercial sex with a minor.
According to court documents and statements made in court, in 2020, law enforcement received information that Sellers was sharing videos of child sex abuse on a website that is focused on incest. In November 2020, an undercover FBI employee began interacting with Sellers on the social media application Kik. In the chats, Sellers made statements that he had sexually abused children, and that he had trafficked a child to engage in commercial sex acts. He also said that he had recently traveled out of state to have sex with another 12-year-old girl. The undercover investigator told Sellers that he had a 12-year-old daughter (“Doe”). After Sellers introduced the idea that Doe could be trafficked for sex, and offered suggestions to the undercover investigator about how it could be accomplished, Sellers arranged to have sex with Doe in exchange for $200.
In January 2021, Sellers, using an encrypted instant messenger application, sent the undercover investigator a link to videos of child sex abuse that Sellers maintained on a file sharing website.
On February 4, 2021, Sellers was arrested at a hotel in Southington shortly after he provided the undercover investigator $200 to engage in sex with Doe.
Sellers has been detained since his arrest. On February 14, 2022, he pleaded guilty to one count of attempted coercion and enticement of a minor, and one count of distribution of child pornography.
U.S. Attorney Avery thanked the New Britain State’s Attorney’s Office for its cooperation in the investigation and prosecution of this case.
This matter was investigated by the FBI New Haven Child Exploitation Task Force and the Southington Police Department. The task force includes members from the Connecticut State Police and the Naugatuck, East Windsor, New London and Southington Police Departments. The case was prosecuted by Assistant U.S. Attorney Angel M. Krull through 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.
Bergen County Man Charged for Participating in Multimillion-Dollar Counterfeit Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man was arrested today on charges of participating in a multimillion-dollar conspiracy to traffic counterfeit computer networking devices, U.S. Attorney Philip R. Sellinger announced.
Musa Karaman, 35, of North Arlington, New Jersey, is charged by complaint with one count of conspiracy to commit mail and wire fraud. He appeared by videoconference today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was released on $300,000 unsecured bond.
According to documents filed in this case and statements made in court:
From at least September 2017 through May 2021, Karaman, Israfil “David” Demir and another an uncharged conspirator, formed and operated numerous entities in the business of selling computer networking equipment, particularly, networking devices manufactured by Cisco Systems Inc., a major U.S. technology conglomerate. Although Karaman and his conspirators advertised the Cisco products they offered for sale as new and genuine, the products were in fact counterfeit Cisco devices that the conspirators procured from various illicit suppliers based in China.
In May 2021, federal agents executed a search warrant at a Woodland Park, New Jersey warehouse used by Karaman and his conspirators as their business headquarters and discovered thousands of counterfeit Cisco devices, including 7,260 counterfeit Cisco transceivers with a total manufacturer’s suggested retail price of approximately $13.77 million. Cisco informed law enforcement officials that this is one of the largest volumes of counterfeit Cisco transceivers ever seized in the United States, and that the total value of the seized counterfeit Cisco transceivers was unprecedented. From September 2017 to May 2021, U.S. Customs and Border Protection seized approximately $3.8 million worth of counterfeit Cisco products contained in over 20 shipments sent by illicit China-based suppliers to various locations under the control of Karaman and his conspirators, including their warehouse and home addresses, often under bogus names.
Demir was charged by criminal complaint on May 26, 2021, in this matter.
The conspiracy to commit mail and wire fraud count carries a maximum potential penalty of 20 years in prison and a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), Newark Office, under the direction of Special Agent in Charge Jason J. Molina; officers from the Port of New York/Newark, U.S. Customs and Border Protection, Office of Field Operations New York Field Office, under the direction of Acting Port Director TenaVel T. Thomas, and the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Patrick J. Hegarty, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Andrew M. Trombly of the Cybercrime Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Baltimore Business Owner Pleads Guilty to Conspiracy to Commit Wire Fraud in Relation to the Sale of Two Baltimore PropertiesRead the Press Release
Baltimore, Maryland – Philip Abramowitz, age 50, of Pikesville, Maryland, pleaded guilty yesterday to conspiracy to commit wire fraud. As part of his guilty plea, Abramowitz will be ordered to pay $373,684 in restitution.
The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron and Special Agent in Charge Shawn A. Rice of the U.S. Department of Housing and Urban Development Office of Inspector General.
According to his guilty plea, from May 2016 to April 2017, Abramowitz and others conspired to defraud two financial institutions by fraudulently obtaining Federal Housing Administration (FHA) loans and property under false pretenses. Specifically, Abramowitz used his company 163 N. Potomac St., LLC., to facilitate the fraudulent sales of his Potomac Street, Baltimore, Maryland properties.
For example, in May 2016, Abramowitz sold one of his Potomac Street properties (Property 1) to a family member (Relative 1) and entered into an agreement with Relative 1 to purchase the property using an FHA-insured loan. The FHA is part of the U.S. Department of Housing and Urban Development (HUD) and provides mortgage insurance on loans made by FHA-approved lenders. To qualify for the FHA-insured loans, the buyer must use the residence as their primary residence, disclose any familial or business relationship between the seller and buyer, and disclose the source of the money the buyer intends to use for the down payment and closing costs.
As stated in his guilty plea, Relative 1 applied for and received a $294,566 FHA-insured loan with a mortgage company (Mortgage Company 1) by falsely representing Abramowitz’s bank account records as his own. Relative 1 and Abramowitz also concealed their familial relation from Mortgage Company 1 by submitting false company filings during the loan application process, having Abramowitz’s property manager (Property Manager 1) pose as the sole seller and manager of 163 N. Potomac St., LLC and arranging Property Manager 1 to sign the FHA-loan contact as the official seller of the property. Abramowitz’s ownership of 163 N, Potomac St., LLC. or involvement in the sale was never disclosed.
To meet the requirements of the loan procurement process, Abramowitz gave Relative 1 $10,500 to pay for the closing costs for Property 1 as Relative 1 did not have the financial means to make the purchase. Based on the fraudulent financial information presented during the loan application process, Mortgage Company 1 loaned Relative 1 $294,566 for the purchase of Property 1. The majority of the loan proceeds were subsequently deposited into Abramowitz’s bank account. Ultimately, Relative 1 never used Property 1 as a primary residence and rented the property to tenants for a year before ceasing mortgage payments and allowing the property to fall into foreclosure.
Further, Abramowitz arranged the sale of his second Potomac Street property (Property 2) in March 2017 to another family member (Relative 2) using an FHA-insured loan. To facilitate the sale of Property 2, Relative 2 applied for an FHA-insured loan with another mortgage company (Mortgage Company 2). Using the same manner to defraud Mortgage Company 1, Abramowitz concealed his familial relation to Relative 2, falsely listed his property manager as the sole seller and owner of Property 2 and submitted multiple fraudulent documents to Mortgage Company 2, including an LLC affidavit of title asserting that no other person or entity had ownership in Property 2.
In a similar manner as the sale of Property 1, Abramowitz violated FHA-loan requirements by providing Relative 2 $8,750 for the closing costs of the sale, misrepresented his own bank account information as Relative 2’s in the FHA-loan procurement process, and received the majority of the loan proceeds to his personal bank account. Relative 2 never used Property 2 as a primary residence or paid monthly mortgage payments to Mortgage Company 2 which caused the property to fall into foreclosure.
Abramowitz faces a maximum of 30 years in prison followed up by 5 years of supervised release for conspiracy to commit wire fraud. U.S. District Judge Richard D. Bennett has scheduled sentencing for August 9, 2022, at 2:30 p.m.
United States Attorney Erek L. Barron commended HUD-OIG for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Martin J. Clarke, who is prosecuting the federal case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Arizona woman pleads guilty to manslaughter in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Kayla Baker, 26, of Ganado, Arizona, and an enrolled member of the Navajo Nation, pleaded guilty on May 19 in federal court to involuntary manslaughter in Indian Country. Baker will remain in custody pending sentencing, which has not been scheduled
According to the plea agreement and other court records, on June 16, 2018, Baker was driving while intoxicated when she attempted to pass another vehicle. She steered into the path of on an oncoming vehicle, resulting in a crash that killed the other driver and severely injured the leg of a passenger. Tests following the crash showed Baker’s blood alcohol content was .12 and there was THC in her system. Law enforcement also found alcohol in Baker’s vehicle. The crash occurred in New Mexico on the Navajo Nation.
Baker faces up to eight years in prison.
The Bureau of Indian Affairs investigated this case with assistance from the Navajo Nation Police Department and New Mexico State Police. Assistant United States Attorney Nicholas J. Marshall is prosecuting the case.
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Albany Man Sentenced to 111 Months for Stealing Nude Photos of Numerous Victims and Possessing Child PornographyRead the Press Release
ALBANY, NEW YORK – Michael P. Fish, age 26, of Albany, was sentenced today to 111 months in prison for computer fraud and aggravated identity theft in connection with his hacking of online social media accounts and theft of nude images of dozens of female victims, as well as possession of child pornography.
The announcement was made by Assistant Attorney General Kenneth A. Polite, Jr.; United States Attorney Carla B. Freedman; Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI); and State University of New York-Plattsburgh Police Chief Patrick Rascoe.
As part of his May 19, 2020 guilty plea, Fish admitted that from about 2016 to 2019—while an undergraduate at SUNY-Plattsburgh and then as a law student—he accessed the school email accounts of dozens of female SUNY-Plattsburgh students and used information from those school email accounts to gain unauthorized access to the victims’ social media accounts. Fish stole, and traded online with others, private nude photographs and videos stored in the victims’ social media accounts. As a result of these crimes, the school had to allocate money and staff to identifying compromised accounts, reviewing computer and server access logs, resetting passwords, and notifying students and parents. Fish further admitted that on March 19, 2019, he possessed several videos of child pornography on his laptop computer.
United States District Judge Mae A. D’Agostino also imposed a 15-year term of supervised release, which will start after Fish is released from prison, and ordered Fish to pay $35,430 in restitution to SUNY-Plattsburgh.
A co-conspirator, Nicholas Faber, was sentenced to 36 months in prison on August 19, 2021, for computer hacking and aggravated identity theft offenses.
In January 2021, Fish was charged by criminal complaint with obstruction of justice for submitting six fraudulent character letters to the court in connection with sentencing in this proceeding. That case remains pending. The charges in the complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI with substantial assistance from the SUNY-Plattsburgh Police Department. Deputy Chief Michael Stawasz from the Department of Justice Criminal Division’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorneys Joshua R. Rosenthal and Wayne A. Myers, prosecuted the case.
43 Arrested as Part of a Combined Law Enforcement Operation “River Run” in West TennesseeRead the Press Release
Memphis, TN - United States Attorney Joseph C. Murphy Jr., and United States Marshal Tyreece Miller today announced Operation "River Run," a joint federal, state, and local law enforcement initiative that resulted in the arrest of 43 violent fugitives in West Tennessee. These individuals were arrested on a variety of criminal charges, including possession of drugs, homicide, illegal possession of firearms by prohibited persons, violation of federal supervised release, state probation and parole violations, burglary, sex crimes and aggravated assault. This coordinated effort to reduce violence was led by the United States Marshals Service.
In February 2022, the Department of Justice announced that it will be working with each United States Attorney’s Office (USAO) to enhance collaborative violent crime reduction efforts by providing resources to support violent crime priorities at the local level. These initiatives will incorporate the pillars of community engagement, prevention, strategic enforcement, and accountability. These four core principles will be the framework that the USAOs will use to serve the local communities in partnership with our federal, state, local and tribal colleagues.
The United States Marshals (USMS) Task Forces nationwide work in collaboration with their federal, state, local and tribal partners to enforce the rule of law through impactful violent crime reduction strategies. Last year alone, USMS Task Forces apprehended approximately 6,000 violent fugitives wanted for homicide and removed approximately 6,900 firearms from the street.
Operation River Run commenced on April 1, 2022 and concluded on April 30, 2022. The coordinated and targeted areas included Dyer, Lake, Lauderdale, Obion, and Tipton Counties. 43 fugitives were arrested; 44 warrants cleared; seven firearms seized; 20 rounds of ammunition seized; $8,945 in cash; 0.751 kg of narcotics seized; and three gang members identified.
"Violent criminal acts wreak havoc in communities throughout our district. Recognizing this fact, reduction in violent crime is a priority for our office. We will work with federal, state, and local law enforcement agencies to apprehend and prosecute individuals who commit violent crimes. Our goal in this effort is safer communities and we believe that this goal is achievable," said United States Attorney Joseph C. Murphy Jr.
"Through Operation River Run, the U.S. Marshals Service and our partners made a concerted effort to address criminal activity in more rural areas of West Tennessee. Fugitives may believe they can hide away from law enforcement resources and support larger cities may offer, but they are mistaken. Offenders should be on notice that we stand ready to address violent crime wherever it may be." said United States Marshal Tyreece Miller.
The following agencies participated in Operation "River Run":
United States Marshals Service
United States Attorney’s Office
United States Probation Services
Atoka Police Department
Bells Police Department
Drug Enforcement Administration
Dyersburg Police Department
Halls Police Department
Henning Police Department
Hornbeak Police Department
Martin Police Department
Memphis Police Department
Jackson Police Department
Dyer County Sheriff’s Office
Fayette County Sheriff’s Office
Lake County Sheriff’s Office
Lauderdale County Sheriff’s Office
Obion County Sheriff’s Office
Shelby County Sheriff’s Office
Tipton County Sheriff’s Office
Weakley County Sheriff’s Office
Tennessee Department of Correction
Tennessee Highway Patrol (Jackson Office)
Tennessee Highway Patrol (Memphis Office)
Texas Department of Public Safety
Additional information about the United States Marshals Service can be found at http://www.usmarshals.gov.
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19 May 2022
Wisconsin Man Charged with Producing Images of Child Sexual AbuseRead the Press Release
MINNEAPOLIS – A Superior, Wisconsin, man has been indicted for producing images depicting his sexual abuse of a minor, announced U.S. Attorney Andrew M. Luger.
According to court documents, in May 2008, George Francis Deppa, 48, coerced a 15-year-old minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.
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 the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children in crimes involving child pornography, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Deppa is charged with three counts of production of child pornography. Deppa will make his initial appearance in U.S. District Court before a Magistrate Judge at a later date.
This case is the result of an investigation conducted by the FBI and the Duluth Police Department, with assistance from the St. Louis County Attorney’s Office and the Douglas County (Wisconsin) Attorney’s Office. Deppa faces additional state felony charges involving sexual assaults against minors in St. Louis County and Douglas County. Based on the evidence obtained in this investigation, authorities believe there may be additional victims of the alleged conduct. Anyone with information about this matter is encouraged to call the FBI Minneapolis Division at (218) 722-3341.
Assistant U.S. Attorney Lindsey E. Middlecamp is prosecuting the case.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Wiretap of Cedar Rapids Heroin and Fentanyl Distributors Lands Vinton Man in Federal Prison for Nearly Four YearsRead the Press Release
A man who conspired to distribute heroin, fentanyl, and other synthetic opioids was sentenced today to more than three years in federal prison.
Ryan Rick Schlitter, age 39, from Vinton, Iowa, received the prison term after a January 14, 2022 guilty plea to one count of conspiracy to distribute heroin.
In a plea agreement, Schlitter admitted that he obtained distribution quantities of heroin through a group of heroin dealers based out of Cedar Rapids. During a federal wiretap investigation in 2021, investigators intercepted calls between one of the dealers and an associate of Schlitter’s. After the intercepted calls, Schlitter and his associate drove to meet with the dealer. The associate purchased over seven grams of a substance containing heroin, fentanyl, and the synthetic opioids acetyl fentanyl, para‑fluorofentanyl, and metonitazene. Officers stopped the vehicle and seized the drugs, which Schlitter admitted that he possessed and intended to distribute to others. Schlitter also admitted that, in June 2021, he sold $200 worth of a substance containing heroin, acetyl fentanyl, and fentanyl during an undercover operation in Cedar Rapids.
Schlitter was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Schlitter was sentenced to 46 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Schlitter is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case 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 and was prosecuted by Assistant United States Attorney Dan Chatham.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21‑CR‑00032‑10‑CJW‑MAR.
Follow us on Twitter @USAO_NDIA.
Westbrook Woman Pleads Guilty to Serving as “Money Mule” in FEMA Funds ScamRead the Press Release
PORTLAND, Maine: A Westbrook woman pleaded guilty in federal court today for serving as a “money mule” for someone she met online, U.S. Attorney Darcie N. McElwee announced. A money mule is someone who transfers or moves illegally acquired money on behalf of someone else.
According to court records, Cheryl White, 58, met an unknown person on the internet. At their request, White purchased prepaid debit cards at retail stores and provided the account numbers associated with those cards to him online. She was later contacted by the person and informed that the cards had been loaded with money. In October 2017, White withdrew the money from the cards and used them to purchase money orders which she deposited in her bank account. She withdrew the money days later and mailed most of the money to an address provided by the person she met online.
The money loaded onto the prepaid cards came from the Federal Emergency Management Agency (“FEMA”). FEMA issued the money based on false and fraudulent claims for disaster relief filed with the agency. Although White did not file the false claims, she admitted that she knew the money came from some type of crime. Two banks had previously closed her accounts due to similar conduct; one of those banks informed White that her deposits and withdrawals were part of a fraud scheme. White opened a third bank account and continued the same conduct.
White faces up to 20 years in prison and a $500,000 fine. She also faces up to three years of supervised release. White will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Department of Homeland Security, Office of Inspector General (DHS OIG) investigated the case, with assistance from the Federal Emergency Management Agency, Fraud Prevention and Investigations Branch; and the Westbrook Police Department.
“DHS OIG will continue to aggressively investigate criminal actors and networks associated with FEMA disaster relief programs. We all suffer when federal programs are undermined by fraud. This guilty plea should send a clear message that DHS OIG and our law enforcement partners are resolute in our efforts to ferret out these criminal fraud schemes” said Inspector General Joseph V. Cuffari, DHS OIG.
Money Mule Scams: Acting as a money mule is illegal and punishable even if you aren’t aware that you are committing a crime. If you are a money mule, you could be prosecuted and incarcerated as part of a criminal money laundering conspiracy. Some money mules know they are supporting criminal enterprises; others are unaware that they are helping criminals profit. Criminals often target students, those looking for work, or those on dating websites, but anyone can be approached to be a money mule. Learn more about money mule scams at https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/money-mules.
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Waterloo Shooting Results in Federal SentenceRead the Press Release
A Waterloo man who exchanged gunfire with others in Waterloo, Iowa, on July 31, 2020, was sentenced today to more than eight years in federal prison.
Tony Terrell Campbell, age 37, from Waterloo, Iowa, received the prison term after an October 13, 2021 guilty plea to being a felon in possession of a firearm.
At the guilty plea, Campbell admitted he had a firearm on July 31, 2020, and exchanged gunfire with another individual. Campbell had previously been convicted of multiple felony offenses including three burglary offenses, a theft of lottery tickets, conspiracy to commit a forcible felony, and assault while participating in a felony.
Campbell was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Campbell was sentenced to 102 months’ imprisonment and must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is 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.
Campbell 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 was investigated by the Waterloo 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 number is 21-CR-2050.
Follow us on Twitter @USAO_NDIA.
Washington State man indicted for sex trafficking and production of child pornographyRead the Press Release
Seattle – A 32-year-old Washington State man was indicted this week for seven federal felonies concerning sex trafficking, production of child pornography, and illegal firearms possession, announced U.S. Attorney Nick Brown. Dominique Terrel Gonzales resided in both Seattle and Vancouver, Washington, during the period when he preyed on young women, forcing them into prostitution. Gonzales has been in federal custody since his arrest for illegal firearms possession in August 2020.
“Those who force vulnerable adults and minors into prostitution face significant sanctions under federal law,” said U.S. Attorney Nick Brown. “Our office is a leader nationally in prosecuting these human trafficking crimes. I commend the diligent work here in Washington, Oregon, and Idaho to hold Mr. Gonzales accountable for his conduct.”
The indictment follows a lengthy investigation by law enforcement in Idaho, Southwest Washington, and Seattle. Gonzales is charged with:
- Sex trafficking of a minor – punishable by a mandatory minimum ten years in prison and up to life in prison.
- Transportation of a juvenile to engage in prostitution – punishable by a mandatory minimum ten years in prison and up to life in prison.
- Production of child pornography – punishable by a mandatory minimum 15 years in prison and up to life in prison.
- Two counts of sex trafficking of an adult through force, fraud, and coercion – each punishable by a mandatory minimum 15 years in prison and up to life in prison.
- Transportation of an adult for the purpose of prostitution through coercion and enticement – punishable by up to ten years in prison.
- And unlawful possession of a firearm and ammunition – punishable by up to five years in prison.
According to the indictment, in August 2020, Gonzales trafficked a juvenile female causing her to engage in commercial sex acts. Gonzales transported the girl across state lines to Portland, Oregon, for her to engage in commercial sex acts.
The investigation revealed that between 2016 and 2019, Gonzalez forced adult women to work for him as prostitutes – using force, fraud, and coercion to make them do his bidding. The indictment charges the sex trafficking of two adult women, one of whom was lured from her home in Idaho and then forced to engage in prostitution.
When law enforcement arrested Gonzales in August 2020, they reviewed his electronic devices and found images of sex acts with a minor victim created in December 2016 – that conduct is charged in the production of child pornography count.
Finally, at the time of his arrest, Gonzales illegally possessed a Desert Eagle 9mm semi-automatic pistol and ammunition. He has three felony convictions that preclude him from possessing firearms. Two counts of second-degree assault (domestic violence) from August 2014 in King County Superior Court and one count of unlawful imprisonment – domestic violence, from the same incident.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by Homeland Security Investigations with assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), Olympia Police Department, Vancouver Police Department, Idaho State Police, Ada County (Idaho) Sheriff’s Office, U.S. Department of Agriculture-Office of Inspector General (USDA-OIG), and the Department of Homeland Security’s Center for Countering Human Trafficking.
The case is being prosecuted by Assistant United States Attorney Kate Crisham, with assistance from the U.S. Attorney’s Office for the District of Idaho. Ms. Crisham leads the Anti-Trafficking prosecutions in the Western District of Washington.
gonzales_indictment.pdfUnion Man Pleads Guilty to Soliciting a Minor in Connection with Sex TraffickingRead the Press Release
Jackson, Miss. – A Union man pleaded guilty today to sex trafficking of a minor, announced U.S. Attorney Darren J. LaMarca and Special Agent in Charge Jermicha Fomby of the Federal Bureau of Investigation in Mississippi.
According to court documents, Hubert Lee Horton, 43, communicated with another individual by cell phone for the purpose of engaging in commercial sex with a minor. Horton asked for and received images of the minor and negotiated the price that he would pay for various sexual acts.
Horton pleaded guilty to a violation of Title 18, United States Code, Section 1591(a)(1) which criminalizes the trafficking of a minor child for purposes of engaging in sexual intercourse for money. He is scheduled to be sentenced on September 1, 2022 and faces a minimum penalty of 10 years in prison and a maximum of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Union Police Department, Mississippi Bureau of Investigations, and the FBI are investigating the case.
Assistant U.S. Attorney Charles W. Kirkham is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' 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 individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Union Financial Secretary Charged with Stealing Union FundsRead the Press Release
NEW ORLEANS, – BRIAN GERALD, age 50, a resident of Franklinton, Louisiana, was charged today in a one count indictment for embezzling assets of a local labor union in violation of Title 29, United States Code, Section 501(c), announced United States Attorney Duane A. Evans.
According to court records, GERALD held the position of Financial Secretary of United Steelworkers Local 13-189. According to the indictment, from on or about May 25, 2018 and continuing through on or about September 8, 2020, GERALD embezzled $112,594.18 from the union account.
If convicted, GERALD faces a up to five years imprisonment, a fine of up to $10,000, up to three years of supervised release following any term of imprisonment, and a $100 mandatory special assessment fee.
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.
U.S. Attorney Evans praised the work of the U.S. Department of Labor in investigating this matter. Assistant U. S. Attorney Rachal Cassagne is in charge of the prosecution.
U.S. Attorney Vanessa R. Waldref Announces FBI Sweep Down on Gang Activity, Drug Trafficking, and Violent Crime in Yakima CountyRead the Press Release
Yakama, WA – Vanessa R. Waldref, United States Attorney for the Eastern District of Washington, announced that a federal Grand Jury has returned numerous indictments charging multiple individuals with various federal crimes arising in the Yakima area, including on the Yakama Nation Indian Reservation.
Over the past several years, the Federal Bureau of Investigation (FBI) has dedicated increased resources to addressing violent crime in Yakima County, including on the Yakama Nation. In the past six months, the FBI’s office in Yakima has brought on a number of additional special agents dedicated to investigating violent crime. In addition, the FBI is leading a joint task force, which includes Customs and Border Protection, Homeland Security Investigations, the Washington State Department of Corrections, and the Yakima County Sheriff’s Office. The purpose of the FBI Task Force is to disrupt gang activity, weapons trafficking, narcotics distribution, and to eradicate violent crime in Eastern Washington.
Seven of the indictments announced today charge the following individuals with multiple violations of federal law:
• Marcelo Anthony Benson, age 25, of Wapato, Washington, an enrolled member of the Yakama Nation. In State prison on unrelated charges. Currently charged with felon in possession of a firearm.
• Dennis William Chapman, age 62, of Toppenish, Washington. Arrested on May 17, 2022, and charged with two counts of distribution of 50 grams or more of methamphetamine.
• Joseph Wade Clark, age 45, of Yakima, Washington. In custody at the Yakima County jail on unrelated charges. Charged with two counts of distribution of 50 grams or more of methamphetamine.
• Nicholas Medelez, age 33, of Yakima, Washington. Arrested on May 17, 2022, and charged with three counts of distributing methamphetamine.
• Sergio Hernan Mendoza, age 47, of Sunnyside, Washington. Arrested on May 17, 2022, and charged with two counts of distributing 50 grams or more of methamphetamine.
• Tiare Aqua Leilani Miller, age 34, of Toppenish, Washington. Arrested on May 17, 2022, and charged with conspiracy to distribute methamphetamine.
• Raymond Holt, age 75, of Wapato, Washington. Arrested on May 18, 2022, and charged with abusive sexual contact of an enrolled member of the Yakama Nation.
Additional fugitives are currently being sought by the FBI Task Force. More information will be provided upon their arrest.
U.S. Attorney Waldref commended the FBI Task Force for its dedication to combating drug distribution and pursuing violent offenders in the Yakima area, including on the Yakama Nation. “The opioid epidemic devastating our region is closely linked with an increase in violent crime. The uptick in violence has hit Native American communities especially hard,” she explained. “Native Americans experience some of the highest rates of violence in our country. The FBI Task Force – which focuses its efforts to protect our community from drug trafficking, gang members, violent offenders, and felons who possess firearms – reflects the United States’ commitment to addressing the causes and symptoms of the increased violence in Native American communities and elsewhere.”
“These arrests demonstrate how critical it is for law enforcement to work together,” U.S. Attorney Waldref continued. “By combining the resources of federal, state, tribal and local law enforcement through focused investigation and prosecution, we are able to do more to make communities in Eastern Washington safe and strong. The indictments announced today send a clear message that our community will not tolerate drug trafficking and violence.”
“The public has been demanding a place to live and work where our citizens feel safe,” said Donald M. Voiret, Special Agent in Charge of the FBI Seattle Field Office. “The actions taken today by the FBI and our law enforcement partners demonstrate that we hear you, and we are working to provide our communities with the protection you deserve.”
Yakima County Sherriff Robert Udell stated, “The latest round of FBI Task Force arrests is a fantastic example of the FBI’s commitment to public safety in Yakima County. The FBI and the Yakima County Sherriff’s Office enjoy a strong partnership, which is committed to removing violent criminals from our communities. I believe the FBI Task Force, coupled with local partners, is a significant step towards ensuring our citizens’ safety.”
“With violent crime on the rise across the country, law enforcement must come together to combat the root causes of this violence more so than ever,” said Special Agent in Charge (SAC) Robert Hammer, who oversees HSI operations in the Pacific Northwest. “Today’s arrests demonstrate HSI’s commitment to our daily quest to keep the Pacific Northwest secure by pursuing those who blatantly disregard the health and safety of the community we live in.”
Lloyd Easterling, Chief Patrol Agent for U.S. Customs and Border Protection, Spokane Sector, emphasized his agency’s commitment to keeping the communities of Eastern Washington safe: “The U.S. Border Patrol remains committed to working together with our partners to identify, arrest and remove violent offenders from our communities.”
As noted above, the cases announced today are being investigated by a Joint FBI Task Force, which includes the Federal Bureau of Investigation, Customs and Border Protection, Homeland Security Investigations, the Washington State Department of Corrections, and the Yakima County Sheriff’s Office. The cases are being prosecuted by Matthew Stone, Michael Murphy, and Tom Hanlon, Assistant United States Attorneys for the Eastern District of Washington.
An indictment is merely an allegation. All Defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Parker announces summer camp ADA compliance initiativeRead the Press Release
COLUMBUS, Ohio – U.S. Attorney Kenneth L. Parker announced today a civil rights initiative aimed at ensuring that summer camps located within in the Southern District of Ohio are compliant with the Americans with Disabilities Act (ADA).
“As summer approaches and parents make arrangements to send their children to camps, we want to make sure that children with disabilities receive an equal opportunity to attend and experience summer camp,” U.S. Attorney Parker said. “Reasonable accommodations are a requirement under the law.”
The U.S. Attorney’s Office for the Southern District of Ohio has mailed the attached flyer to dozens of summer camps located in the southern half of the state.
Under the ADA, summer camps, both private and those run by municipalities, must make reasonable modifications to enable campers with disabilities to participate fully in all camp programs and activities.
Children with disabilities are generally entitled to attend any camp or activity, camps must evaluate each child on an individual basis, and camps must train their staff in the requirements of the ADA.
Camps are obligated to pay for the cost of any reasonable modifications necessary for children with disabilities to participate in camp activities, and parents should not be charged any additional fee beyond standard camp enrollment costs.
Additional information about the ADA can be found by visiting www.ada.gov, calling the Department of Justice ADA Information Line at 800-514-0301 (voice) or 800-514-0383 (TTY), or by emailing the U.S. Attorney’s Office at USAOHS.CivilRights@usdoj.gov.
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U.S. Attorney Jan W. Sharp Announces RetirementRead the Press Release
After serving 40 years as a prosecutor in Nebraska, United States Attorney Jan W. Sharp announced today that he intends to retire at the end of May. Sharp, a native Nebraskan, attended the University of Nebraska College of Law graduating with distinction in 1982. That same year he began his career as a prosecutor serving as a Deputy Lancaster County Attorney in Lincoln. He spent six years in the office handling a variety of criminal cases ranging from white collar crimes to homicide. During his tenure he worked with the newly created Technical Investigations Unit of the Lincoln Police Department on white collar criminal investigations.
In 1988 Sharp joined the United States Attorney’s Office in Omaha where he handled a wide variety of criminal matters including terrorism, violent crime in Indian Country, white collar fraud, political corruption, drug trafficking and civil rights violations. In 2001 Sharp was named Criminal Chief for the United States Attorney’s Office, a position he held for 17 years. In 2018 he was appointed to the position of First Assistant United States Attorney under United States Attorney Joe Kelly. Following Kelly’s resignation in 2021, Sharp was appointed as Acting United States Attorney and later appointed by the United States District Court to serve as Interim United States Attorney, a position he has since held. The United States District Court will appoint Sharp’s successor to take over as Interim United States Attorney following the end of his service until such time as a presidentially appointed, Senate-confirmed U.S. Attorney is named.
Sharp said, “I have been blessed to have worked with so many talented and dedicated attorneys, support staff and law enforcement officers over my 40-year career. I was also fortunate to have practiced in front of Judges who were intelligent, collegial, and completely committed to the honorable performance of their duties. As I leave, I truly believe that during my tenure in the U.S. Attorney’s Office, I held the best job in the legal profession. Working with people dedicated to making our communities safer is a privilege and I leave with the utmost admiration for the professionals who continue to carry out the mission.”
Two New Jersey Men Plead Guilty in Pennsylvania in Scheme Involving Odometer Tampering and Title FraudRead the Press Release
Two New Jersey men have pleaded guilty in the U.S. District Court for the Eastern District of Pennsylvania for their roles in falsifying vehicle titles as part of a long-running odometer roll-back scheme.
According to court documents, Felix Granowski, 58, of Matawan, pleaded guilty Wednesday to one count of conspiracy to commit securities fraud. Granowski owned a used car dealership based in New Jersey. Today, Alec Morgunov, 34, of Manalapan, also pleaded guilty to one count of conspiracy to commit securities fraud in connection with his work at Granowski’s dealership.
As part of their plea agreements, Granowski and Morgunov admitted that between 2012 and 2016, they engaged in a scheme to sell high-mileage, used vehicles with false, low-mileage readings entered on the vehicles’ odometers and titles. According to court filings, the defendants purchased high-mileage vehicles from individuals, arranged to alter the vehicles’ odometers to reflect false, lower mileage readings, and then obtained motor vehicle titles reflecting those false, lower mileages. Granowski and Morgunov then used the fraudulent title documentation and artificially lower odometer readings to sell the vehicles, including at an auction located in the Eastern District of Pennsylvania. By deceiving purchasers into believing the vehicles had fewer miles than they actually had, defendants sold the vehicles at inflated prices, resulting in consumers paying more for the vehicles than they would have paid had they known the true mileages.
“When individuals misrepresent the mileage on used cars, they deceive consumers into paying more money for those cars while also hiding vital information that can impact vehicle safety and repair costs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are committed to protecting consumers by prosecuting individuals who engage in this type of fraud.”
“We’re proud of our collaboration with the Department of Justice to investigate odometer fraud,” said Deputy Administrator Dr. Steven Cliff of the National Highway Traffic Safety Administration (NHTSA). “Our top priority is keeping people safe on the road. Anyone who thinks they’ve been a victim of odometer fraud, needs to contact their state enforcement office. They can also visit our website, NHTSA.gov, for helpful information on how to detect a vehicle that may have had its odometer rolled back.”
In pleading guilty, Granowski and Morgunov admitted that they were part of a scheme that caused at least 118 cars to be sold with rolled-back odometers and falsified titles, resulting in consumer losses of at least $674,606.
The defendants are scheduled to be sentenced on Aug. 31 and Sept. 1, respectively. Granowski and Morgunov each face a maximum sentence of five years in prison on the conspiracy to commit securities fraud charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The NHTSA Office of Odometer Fraud Investigation investigated the case.
Trial Attorneys Natalie N. Sanders and Ryan E. Norman of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Nancy Rue of the U.S. Attorney’s Office for the Eastern District of Pennsylvania are prosecutors for the case.
NHTSA estimates that odometer fraud in the United States results in consumer losses of more than $1 billion annually. Individuals with information relating to odometer tampering should call NHTSA’s odometer fraud hotline at (800) 424-9393 or (202) 366-4761. More information on odometer fraud is available on the NHTSA website at https://www.nhtsa.gov/equipment/odometer-fraud and tips on detecting and avoiding odometer fraud are available at http://www.nhtsa.gov/staticfiles/nvs/pdf/811284.pdf.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of Pennsylvania, visit https://www.justice.gov/usao-edpa.
Two Miami Dade Police Sergeants Receive United States Attorney General’s AwardRead the Press Release
Miami, Florida – Today, during a ceremony at Miami-Dade Police Department (MDPD) headquarters in Doral, Florida, MDPD Sergeants Kurt Berardino and Christopher Perez were presented with the Fifth Annual United States Attorney General’s Award for Distinguished Service in Community Policing.
The Attorney General’s Award recognizes individual state, local, Tribal, and territorial police officers, deputies, and troopers for exceptional efforts in community policing.
The Department of Justice announced the award recipients in March, which included 18 law enforcement officers and deputies from 12 jurisdictions across the country.
During today’s ceremony, First Assistant United States Attorney for the Southern District of Florida Michelle Alvarez presented Sergeants Berardino and Perez with their awards, which included a letter to each officer from United States Attorney General Merrick B. Garland. Miami Dade Police Department Interim Director George A. Perez attended the ceremony and publicly recognized the Sergeants for their exceptional work.
Sergeants Berardino and Perez were honored for their tenacious criminal investigation of a July 2020 shooting in Miami that left one child dead and another child and two adults injured. A ShotSpotter alert showed that 21 shots had been fired on a Miami street. The investigation revealed that the victims were returning home from shopping and were fired on as they were getting out of their car. Detectives Kurt Berardino and Christopher Perez (now both sergeants) immersed themselves in the subsequent investigation, poring over multiple Crime Stoppers tips, reviewing hours of surveillance footage, and questioning potential witnesses. As Berardino and Perez developed the case, they established a rapport with two of the survivors, and those survivors provided a positive identification of the subjects involved in the shooting. This positive identification was key in furthering other leads that were gathered. Evidence collected was crucial in solidifying victim statements and the timeline of the events. Arrest warrants were eventually issued, and in September 2020, the detectives traveled to Georgia, where one suspect was taken into custody and later confessed; a second suspect was also arrested. It was the tenacity, persistence, and determination of Detectives Berardino and Perez that closed this case and brought justice to the families of the victims and to the community.
The Department of Justice works closely with national law enforcement stakeholder groups during the award review period, taking advantage of their expertise and experience to determine the recipients in a competitive nomination process. The Department also works closely with its components, utilizing the breadth of knowledge within the Department to ensure a successful program that honors the exceptional service of our nation’s law enforcement officers and deputies. This year, the Department received 185 nominations from 145 agencies, recognizing a total of 347 individual officers, deputies, and troopers. There were 39 states represented in the nomination pool, covering state, local, campus, sheriff, and other agency types.
Complete information on the Fifth Annual Attorney General’s Award for Distinguished Service in Community Policing can be found at https://www.justice.gov/ag/policing-award.
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Three convicted for $500,000 Mexican cartel weapon schemeRead the Press Release
LAREDO, Texas – Three individuals have admitted to their roles in a conspiracy for Cartel del Noreste (CDN), announced U.S. Attorney Jennifer B. Lowery.
Luis Ramos, 44, Rio Bravo, pleaded guilty today to conspiracy to commit international money laundering. Co-conspirators Manuel Perez-Ortiz, 40, Mexico, and Arturo Mata Jr., 55, also of Rio Bravo, pleaded guilty for their roles in the same conspiracy April 28.
In May 2020, members of CDN began negotiations to purchase $500,000 worth of high-powered weapons including machine guns, grenades, military-style rifles and rocket-propelled launchers. The weapons were intended to be purchased in the United States and then smuggled into Mexico. CDN planned to use them in fights against rival cartels to further their drug smuggling activities. Cartel members sent Perez-Ortiz to conduct the weapon exchange in Laredo.
On June 19, 2020, Ramos and Perez-Ortiz met with whom they thought were U.S.-based weapon facilitators at an H-E-B parking lot. There, they showed the money they had to purchase the weapons. Authorities stopped Ramos and Perez-Ortiz after they departed the parking lot. Law enforcement discovered a cardboard box inside the vehicle containing $500,000 in cash and a firearm in Perez-Ortiz’s possession.
Ramos and Mata assisted in driving Perez-Ortiz to and from the meetings to discuss the sale of weapons. Mata also provided surveillance.
As part of their pleas, Ramos and Perez-Ortiz admitted they concocted a story to tell authorities that the money came from the sale of a ranch in Mexico and they were planning to buy land in Laredo to build a home. Perez-Ortiz later admitted he had illegally crossed into the country the day before with $500,000 by wading the Rio Grande river.
All three co-conspirators are scheduled for sentencing before U.S. District Judge Diana Saldana in the near future. They each face up to 20 years in prison, a possible $1 million maximum fine and forfeiture of $500,000. They have been and will remain in custody pending that hearing.
This case was part of the Blue Indigo Task Force and brought as part of the Organized Crime Drug Enforcement Task Force (OCDETF) investigation dubbed Operation Noreste. The Drug Enforcement Administration and Laredo Police Department conducted the investigation with the assistance of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Customs and Border Protection and U.S. Marshals Service. Assistant U.S. Attorney Jennifer Day is prosecuting this case.
OCDETF is the largest anti-crime task force in the country. Its mission is to identify, disrupt, and dismantle the highest-level drug traffickers, money launderers, gangs and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found on the Department of Justice’s OCDETF webpage.
Three Defendants Plead Guilty to Fraud and Money Laundering Conspiracies Targeting Federally Funded Meal Programs for Underprivileged YouthRead the Press Release
PITTSBURGH, PA – Two residents of Texas and a resident of Tennessee pleaded guilty in federal court this week for their roles in defrauding federally funded meal programs, United States Attorney Cindy K. Chung announced today.
Charles Simpson, 44, and Paige Jackson, 30, both of Dallas, Texas, as well as Tanisha Jackson, 49, of Memphis, Tennessee, pleaded guilty to conspiracy to commit mail and wire fraud before United States District Judge Arthur J. Schwab. Simpson and Tanisha Jackson also pleaded guilty to conspiracy to commit money laundering.
During Simpson’s, Tanisha Jackson’s, and Paige Jackson’s plea hearings on May 18 and 19, 2022, the defendants admitted, among other things, that they controlled and operated HOIN, Inc. (HOIN), a Texas-based non-profit organization. The defendants caused HOIN (a/k/a“Helping Others In Need) to enroll as a “sponsor” in two programs funded by the United States Department of Agriculture (USDA) for the purpose of providing meals to underprivileged youth—the Child and Adult Care Feeding Program (CACFP) and the Summer Food Service Program (SFSP) (collectively, the feeding programs). CACFP funded after-school meal service during the school year, while SFSP operated in the summer months. In Pennsylvania, the Pennsylvania Department of Education (PADOE) administered the USDA-funded feeding programs. Each defendant further admitted having previously been excluded from participating in the feeding programs in other states.
As part of the conspiracy, Simpson and Tanisha Jackson caused the submission of false enrollment documentation to PADOE on behalf of HOIN in connection with its participation in CACFP and SFSP between 2015 and 2019. Among other misrepresentations, HOIN’s applications to PADOE used aliases for Simpson and Tanisha Jackson as a means to obscure their involvement and falsely certified that none of its principals had been excluded from the feeding programs. The defendants further admitted causing HOIN to submit reimbursement claims for hundreds of thousands of meals that were never served to eligible children by either inflating the number of meals that, in fact, were served, or by seeking reimbursements for meals purportedly served on days on which the identified feeding site was not operating at all. To conceal their fraudulent conduct and justify HOIN’s claimed meal service, Simpson and Tanisha Jackson admitted submitting fabricated documents to PADOE in connection with periodic program reviews, and Tanisha Jackson admitted that on certain occasions she would impersonate Paige Jackson, her daughter, in interactions with PADOE. Likewise, Paige Jackson admitted that she used a fictitious name in dealings with PADOE. In total, PADOE issued reimbursement payments to HOIN in excess of approximately $4 million between 2015 and 2019.
In connection with the money laundering conspiracy, Simpson and Tanisha Jackson also admitted engaging in numerous financial transactions involving the proceeds of the fraud. Specifically, Simpson and Tanisha Jackson admitted spending hundreds of thousands of dollars in HOIN reimbursements on shopping sprees at high-end apparel stores, personal air travel and lodging, and the acquisition of at least nine luxury vehicles, including a Bentley, two Land Rovers, two Maseratis, two Mercedes, a Hummer, and a Porsche. Simpson and Tanisha Jackson also withdrew cash from HOIN bank accounts in excess of $10,000 on more than a dozen occasions.
In connection with their guilty pleas, Simpson and Tanisha Jackson have agreed to pay restitution to USDA totaling $1,500,000, and Paige Jackson has agreed to pay restitution of approximately $190,000. Simpson and Tanisha Jackson have each also agreed to forfeit approximately $427,000.Conspiracy to commit mail and wire fraud carries a maximum term of imprisonment of twenty years and a fine not more than the greater of $250,000 or an alternative fine in an amount not more than the greater of twice the gross pecuniary gain to any person or twice the pecuniary loss to any person other than the defendant. Likewise, the money laundering conspiracy carries a maximum term of imprisonment of ten years and a fine of not more than $250,000 or an alternative fine of not more than twice the amount of the criminally derived property involved in the relevant transactions. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorneys Eric G. Olshan and Nicole Vasquez Schmitt are prosecuting this case on behalf of the government.
The United States Department of Agriculture – Office of Inspector General, Internal Revenue Service – Criminal Investigation, and Federal Bureau of Investigation conducted the investigation of the defendants in this case.
Texarkana, Texas Men Arrested on Federal Drug Trafficking and Firearms ViolationsRead the Press Release
TEXARKANA, Texas – Four Texarkana, Texas men have been arrested on drug trafficking and firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.
Deablo Deshon Lewis, a/k/a Pablo Lew, 31; Michael Darnell Peacock, a/k/a Fruit, 37; Terrance Lamar Peacock, a/k/a T, 31; and Justin Marshall Owens, 40, were named in an indictment returned by a federal grand jury on March 10, 2022, charging them with federal drug trafficking and firearms violations. Michael Peacock appeared before U.S. Magistrate Judge Caroline Craven Craven on March 17, 2022; Lewis appeared before U.S. Magistrate Judge Barry Bryant on March 23, 2022; Owens appeared before Judge Craven on March 31, 2022; and Terrance Peacock appeared before Judge Craven on May 17, 2022.
According to the indictment, beginning in November 2018 and continuing through March 2022, Lewis, Michael Peacock, Terrance Peacock, and Owens allegedly conspired with each other and others to distribute fentanyl, methamphetamine, U-47700, and marijuana in the Texarkana area. During that time, they allegedly carried, used, and possessed firearms in connection with their drug trafficking activities. As a result of the drugs these defendants distributed, three individuals died and another sustained serious bodily injury. In total, the defendants are allegedly responsible for distributing $5 million worth of drugs.
“The counterfeit oxycodone pills--sometimes known as ‘blues’ or ‘M30s’--that were distributed in the Texarkana area contain deadly fentanyl,” said U.S. Attorney Brit Featherston. “If you, or someone you know, has experienced an opioid overdose as a result of taking one of these round blue pills--stamped with ‘M’ on one side and ‘30’ on the other--please contact the Texarkana Texas Police Department at 903-798-3116. Increasingly, we are seeing more street drugs with deadly fentanyl added to them…and it is killing the users. More people need to be aware of this increasing trend that can kill the recreational drug user. Simply put, one pill can kill!”
If convicted, the defendants face from 25 years to life in federal prison.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
This case is being investigated by the Texarkana, Texas, Police Department; Texas Department of Public Safety; the U.S. Drug Enforcement Administration; the U.S. Postal Inspection Service; and the Texarkana, Arkansas, Police Department. This case is being prosecuted by Assistant U.S. Attorneys Jonathan R. Hornok and D. Ryan Locker.
A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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