WASHINGTON – Malik Parker, also known as Yohan Raymoore, 21, of Temple Hills, Md., was sentenced today to five years in prison on charges stemming from a shooting that took place in September 2016 in Southeast Washington, U.S. Attorney Jessie K. Liu announced.

            Parker pled guilty in March 2018, in the Superior Court of the District of Columbia, to charges of assault with a dangerous weapon and possession of a firearm during a crime of violence. The plea, which was contingent upon the Court’s approval, called for an agreed-upon sentence of five years in prison. The Honorable Danya A. Dayson accepted the plea and sentenced the defendant accordingly. Following his prison term, Parker will be placed on three years of supervised release.

            According to the government’s evidence, on Sept. 19, 2016, at approximately 8:10 p.m., Parker and his girlfriend argued loudly in the street, in the 2900 block of P Street SE. Family members from a nearby house exited to observe the commotion. One of those family members, the victim, told Parker to take the argument somewhere else because he did not want the police to be called. Parker declined his request. Parker removed his gun, fired three shots in the air and then eight shots at the family as they fled back toward their house. Luckily, none of the shots found their targets. Parker then fled before the Metropolitan Police Department (MPD) arrived.

            Parker was arrested on Sept. 28, 2016 and has been in custody ever since.

            In announcing the sentence, U.S. Attorney Liu commended the work of those who investigated the case from the Metropolitan Police Department and the United States Marshals Service. She also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists T.J. McPhail, Victim/Witness Advocate Shawn Slade, and Litigation Technology Specialist Anisha Bhatia.

            Finally, she commended the work of Assistant U.S. Attorney Jessi Brooks and Louis Manzo, who together investigated, indicted and prosecuted the case.

            WASHINGTON – Henry “Enrique” Tarrio, the former national chairman of the Proud Boys, was arrested today following his indictment on conspiracy and other charges related to the breach of the U.S. Capitol on Jan. 6, 2021, which disrupted a joint session of the U.S. Congress that was in the process of ascertaining and counting the electoral votes related to the presidential election.

            Tarrio, 38, of Miami, Florida, was arrested in Miami and is to make his initial appearance today in the Southern District of Florida. He was named in a superseding indictment returned Monday in the District of Columbia that also includes five previously charged defendants.

            Others named in the superseding indictment include Ethan Nordean, 31, of Auburn, Washington; Joseph Biggs, 38, of Ormond Beach, Florida; Zachary Rehl, 36, of Philadelphia; Charles Donohoe, 34, of Kernersville, North Carolina; and Dominic Pezzola, 44, of Rochester, New York. All previously were detained. They earlier pleaded not guilty to charges.

            According to court documents, the Proud Boys describes itself as a “pro-Western fraternal organization for men who refuse to apologize for creating the modern world, aka Western Chauvinists.” Through at least Jan. 6, 2021, Tarrio was the national chairman of the organization. In mid-December, Tarrio created a special chapter of the Proud Boys known as the “Ministry of Self Defense.”

            As alleged in the indictment, from in or around December 2020, Tarrio and his co-defendants, all of whom were leaders or members of the Ministry of Self Defense, conspired to corruptly obstruct, influence, and impede an official proceeding, the certification of the Electoral College vote.  On Jan. 6, the defendants directed, mobilized, and led members of the crowd onto the Capitol grounds and into the Capitol, leading to dismantling of metal barricades, destruction of property, and assaults on law enforcement.

            Although Tarrio is not accused of physically taking part in the breach of the Capitol, the indictment alleges that he led the advance planning and remained in contact with other members of the Proud Boys during their breach of the Capitol. Tarrio was arrested on Jan. 4, 2021, on a warrant charging him in the Superior Court of the District of Columbia with destruction of property in the Dec. 12, 2020, burning of a Black Lives Matter banner. He was released at approximately 5 p.m. on Jan. 5, 2021. As a condition of his release, he was ordered by the Court to stay out of Washington.

            The indictment alleges that Tarrio nonetheless continued to direct and encourage the Proud Boys prior to and during the events of Jan. 6, 2021, and that he claimed credit for what had happened on social media and in an encrypted chat room during and after the attack.

            Tarrio was indicted on one count of each conspiracy to obstruct an official proceeding and obstruction of an official proceeding, as well as two counts each of assaulting, resisting, or impeding certain officers and destruction of government property.

            This case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Department of Justice National Security Division’s Counterterrorism Section. Valuable assistance was provided by U.S. Attorney’s Office in the Southern District of Florida.

            The case is being investigated by the FBI’s Washington and Miami Field Offices. The charges in the investigation are the result of significant cooperation between agents and staff across numerous FBI Field Offices, and law enforcement agencies.

            In the 14 months since Jan. 6, more than 775 individuals have been arrested in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including over 245 individuals charged with assaulting or impeding law enforcement. The investigation remains ongoing.

            Anyone with tips can call 1-800-CALL-FBI (800-225-5324) or visit tips.fbi.gov.

            An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

 

            WASHINGTON – KaShaun Perkins, 43, of Upper Marlboro, Md., was sentenced today to 21 months in prison on a federal charge of wire fraud for embezzling from his employer, causing a loss in excess of $275,000, announced U.S. Attorney Channing D. Phillips.

 

            Perkins pled guilty to the charge in February 2017 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Christopher R. Cooper. Following his prison term, Perkins will be placed on three years of supervised release. He also is required to pay $249,096 in restitution, and a forfeiture money judgment in the same amount.

 

            According to a statement of the offense, signed by the defendant as well as the government, Perkins worked as a payroll specialist from December 2014 to July 2015 at a global consulting firm. As a payroll specialist, he managed external payroll provider services in order to ensure salaries were accurately and timely processed for payments. Perkins also updated the payroll and human resources information systems with bank account numbers, Social Security numbers, addresses, and names of employees and maintained these employee records.

 

            From January to July 2015, according to the statement of offense, Perkins caused his employer to pay out approximately $275,000 in bogus salary and tax withholding payments for “ghost” employees. Perkins altered a terminated employee’s payroll profile, repeatedly changing entries such as name, Social Security number, bank account number, address, and salary payments. In fact, none of the altered data corresponded to an actual employee. Through these changes to the payroll system, Perkins caused the unauthorized salary payments to be directly deposited into accounts in his name, accounts with his joint ownership, and accounts under his control. By directing the payroll provider service to make these payments, Perkins obtained “salary” payments of “ghost” employees totaling $249,096. The employer paid an additional $26,092 in tax withholdings, for a total loss of $275,188.

 

            In announcing the sentence, U.S. Attorney Phillips expressed appreciation for the work performed by Forensic Accountant Jean Luc Guerrier of the Fraud and Public Corruption Section of the U.S. Attorney’s Office, as well as Paralegal Specialist Christopher Toms, Assistant U.S. Attorney Diane Lucas, who assisted with forfeiture issues, and Assistant U.S. Attorney Virginia Cheatham, who prosecuted the case.

            WASHINGTON – Chin Hua Huang, 42, a resident of Taiwan, was charged in the United States District Court for the District of Columbia with participating in a criminal conspiracy to violate U.S. export laws and sanctions against Iran.  Also charged was Taiwan business organization DES International Co., Ltd. (DES Int’l) and Brunei business organization Soltech Industry Co., Ltd. (Soltech).

            Huang, DES Int’l, and Soltech were charged in a criminal complaint with conspiring to defraud the United States and to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSRs).

            “Individuals or business organizations that violate U.S. laws by providing U.S. goods to Iran without a license will be prosecuted to the fullest extent of the law,” said Acting U.S. Attorney Sherwin.

            “The defendants are charged with conspiring to violate American sanctions on Iran by buying goods from the United States, concealing the origin of those goods and sending them to Iran for use by the government and business,” said Assistant Attorney General for National Security John Demers.  “Violations of the sanctions diminish their effectiveness and delay the day when Iran will cease its belligerent activity.”

            “The FBI greatly appreciates the coordinated efforts with HSI, OFAC, DCIS, BIS, DC USAO, and DOJ CES to bring formal charges against DES International, its subsidiary Soltech Industry, and Ms. Chin Hua Huang. Together, they worked to relentlessly pursue every lead to ensure these individuals would face the charges detailed in the criminal complaint for their roles in illegally supplying U.S. technology to Iran,” stated FBI San Antonio Division Special Agent in Charge Christopher Combs.  “The items, which were allegedly delivered by DES International, its front companies and Ms. Huang to Iran, undermined our national security.  For me, the most impressive aspect of this investigative team’s diligent work was not only the criminal charges against these three entities, but also the addition of four individuals and more than six companies to the Department of Treasury Office of Foreign Asset Control’s Specially Designated Nationals and Blocked Persons List (SDN) surrounding this proliferation network located throughout the Middle East and Asia.”

            “Today’s action is a tremendous example of Homeland Security Investigations’ (HSI) collaborative commitment to enforce the export laws of the United States.  These individuals and organizations are eroding our country’s national security and legitimate commerce by transshipping sensitive U.S. technology to Iran through various shell companies and affiliates,” said Special Agent in Charge, Shane Folden, HSI San Antonio.  “This effort demonstrates the U.S. Government’s enduring resolve to ensure significant consequences to violators.  HSI is uniquely positioned to use its wide ranging investigative authorities and global footprint to mitigate weaknesses within the U.S. trade and financial sectors by utilizing the full authorities of the U.S. Government.”

            "This investigation underscores the Defense Criminal Investigative Service's commitment to safeguarding our nation's most sensitive technologies and preventing those technologies from getting into the hands of our adversaries," said Michael Mentavlos, Special Agent in Charge of the DCIS Southwest Field Office.  "DCIS, in consort with our law enforcement partners, will continue to aggressively identify, disrupt, and bring to justice those who attempt to circumvent export control laws and threaten the integrity of U.S. military technology." 

            “Today’s action is the result of seamless coordination and collaborative counter proliferation efforts of a very dedicated multi-agency team of law enforcement professionals from the Office of Export Enforcement (OEE), Homeland Security Investigations, Defense Criminal Investigative Service, the FBI and the Department of Justice.  OEE and our partners will continue to prevent the illegal export of U.S. technologies and protect American businesses by combatting transnational criminal networks and violators of our export laws.” said P. Lee Smith, Performing the Nonexclusive Functions and Duties of the Assistant Secretary for Export Enforcement, Bureau of Industry and Security, US Department of Commerce.

            The affidavit in support of the criminal complaint alleges that Huang was a sales agent for DES Int’l and Soltech, both of which procured goods from the United States for the benefit of Iranian government entities and business organizations.  DES Int’l and Soltech were affiliated with one another by virtue of common directors, employees, and customers.  Huang used her position as a sales agent to help an Iranian research center obtain U.S. goods without a license from the Department of the Treasury. These goods included a power amplifier designed for use in electromechanical devices, and cybersecurity software.  Huang took steps to conceal the U.S. origin of the goods, including by removing serial number stickers with the phrase “Made in USA” from packages, and by causing the cybersecurity software to be downloaded onto a computer outside of Iran.  Huang shared developments regarding this illegal conduct with other employees and directors of DES Int’l and Soltech.

            A concurrent action was taken by the Department of the Treasury, sanctioning Huang, DES Int’l, and Soltech, and seven related individuals and entities.

            If convicted, Huang would face up to five years of imprisonment and a fine of up to $250,000, and DES Int’l and Soltech would each face a fine of up to $500,000.  The criminal charge in the complaint is an allegation, and criminal defendants are presumed innocent until proven guilty beyond a reasonable doubt.

            The investigation was conducted by the FBI’s San Antonio, Texas, Field Office, HSI, DCIS, and DOC.  Assistant U.S. Attorney Michael J. Friedman and National Security Division Trial Attorney William Mackie are representing the United States.

            WASHINGTON – Amin Mahdavi, 53, an Iranian national living in the United Arab Emirates (UAE), and Parthia Cargo LLC, a freight forwarding company located in the UAE, were charged in the United States District Court for the District of Columbia with participating in a criminal conspiracy to violate U.S. export laws and sanctions against Iran.

            “We will not abide individuals or business organizations that seek to harm our national security by providing coveted U.S. goods to Iran, and we will pursue these wrongdoers no matter where they are located in the world,” said Acting U.S. Attorney Michael R. Sherwin.

            “Iran evades the U.S. embargo resulting from their malicious activities with the collaboration of those who pose as innocent buyers, but who are ready to send the products on to their forbidden destination,” said Assistant Attorney General for National Security John C. Demers.  “These charges against Parthia Cargo LLC and its managing director should put on notice all freight forwarders and others who facilitate illicit transshipments to Iran that their conduct will not be tolerated.”

            "Amin Mahdavi defiantly conspired and violated U.S. sanctions to benefit his company and Iran," said James A. Dawson, Acting Assistant Director in Charge of the FBI Washington Field Office. "Today’s charges are another example of the dedicated and unrelenting efforts of the FBI and the US Attorney's Office to pursue those who violate our nation's sanctions and put our national security at risk.  The FBI is charged with protecting our nation's security and intellectual property from being used to benefit our foreign adversaries."

           “The actions today are a result of the ongoing coordination and collaborative counter-proliferation efforts by the Office of Export Enforcement and the FBI,” said P. Lee Smith, of BIS. “We will continue to vigorously pursue violators with all law enforcement partners to interdict illicit trade that threatens U.S. national security and undermines U.S. foreign policy.”

           Mahdavi and Parthia Cargo LLC were charged in a criminal complaint with conspiring to defraud the United States and to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSRs).

           The affidavit in support of the criminal complaint alleges that Mahdavi was the Managing Director of Parthia Cargo LLC, a business organization that facilitated the illegal shipment to Iran of goods manufactured in the United States.  Mahdavi acknowledged to U.S. government officials in 2017 that he understood a U.S. government license was necessary to lawfully ship U.S. commercial aircraft parts to Iran.  But Mahdavi nonetheless agreed to help ship a U.S.-origin commercial aircraft part to an Iranian air transport company, utilizing the freight forwarding services of Parthia Cargo LLC and without obtaining a license.  Mahdavi and Parthia Cargo LLC conspired with individuals and business organizations located outside the United States as part of the criminal scheme, which included falsely stating to a U.S.-based aircraft parts supplier that the goods would not be shipped to Iran unless authorized by the U.S. government.

            A concurrent action was taken by the Department of the Treasury, sanctioning Mahdavi and Parthia Cargo LLC, as well as a related UAE business organization, Delta Parts Supply FZC.

            If convicted, Mahdavi would face up to five years of imprisonment and a fine of up to $250,000, and Parthia Cargo LLC would face a fine of up to $500,000.  The criminal charge in the complaint is an allegation, and Mahdavi and Parthia Cargo LLC are presumed innocent until proven guilty beyond a reasonable doubt.

            The investigation was conducted by the FBI’s Washington Field Office and the BIS’s Boston Field Office.  Assistant U.S. Attorney Michael J. Friedman and National Security Division Trial Attorney Jennifer Kennedy Gellie are representing the United States.

            WASHINGTON – Eugene Sickle, the former deputy executive director of a South African research institute, was sentenced today to seven months of incarceration and ordered to pay $206,250 in restitution for a scheme in which he stole grant funds originating with the U.S. Agency for International Development (USAID).

 

            The sentencing, in the U.S. District Court for the District of Columbia, was announced by Channing D. Phillips, U.S. Attorney for the District of Columbia, and Jonathan Schofield, Special Agent in Charge for the USAID Office of Inspector General, Office of Investigations.

 

            Sickle, 47, a chemist and a citizen of South Africa, pled guilty in May 2017 to a charge of theft concerning programs receiving federal funds. The plea, which was contingent upon the Court’s approval, called for an agreed-upon sentence of six months to 12 months and a day of incarceration. The Honorable Ketanji Brown Jackson accepted the plea today and sentenced Sickle accordingly. In addition to the restitution order, the judge issued a forfeiture money judgment of $206,250. Following his release, Sickle will be subject to deportation proceedings.

 

            Based in Washington, D.C., USAID is a U.S. government agency that provides international development assistance and humanitarian aid worldwide. It implements and administers foreign assistance programs and funds, including those supporting global health, from dedicated offices (“missions”) around the world. USAID’s South Africa mission is one such office that works with local organizations in that country. USAID’s Office of Inspector General bases investigators in 11 countries outside the United States, including South Africa, and provides oversight of USAID programs and operations around the world.

 

            According to a statement of offense, signed by the defendant as well as the government, Sickle was deputy executive director of the Wits Reproductive Health and HIV Institute, a South African research institute focusing on sexual and reproductive health as well as vaccine-preventable diseases. Its primary source of funding is USAID, and Sickle administered grant funds for projects. One such project involved a mobile electronic device software application, in connection with the South African National Department of Health, which would help facilitate safer childbirth deliveries in South Africa.

 

            On Oct. 2, 2015, according to the statement of offense, Sickle and the institute’s chief executive officer signed a contract with a company called Alzar Consulting Services Ltd. to develop the childbirth app. Likewise, an individual named “Dr. Carla Das Neves” Alzar’s purported director, signed the contract. Pursuant to this contract, the institute made two payments to Alzar totaling $206,250. However, the childbirth app has never been developed.

 

            Subsequent investigation revealed that Sickle created Alzar in the British Virgin Islands. Unbeknownst to anyone at the research institute, he was the sole owner of the company. Sickle also created e-mail accounts for Alzar and fake Alzar employees, including “Carla Das Neves.” He created a fake LinkedIn page for “Carla Das Neves,” which had a beach scene for a picture, and falsely claimed that “Carla Das Neves” was a trained expert in aid/relief work.

 

            Sickle shepherded the research institute’s contract with Alzar through the approval and compliance process. He signed the contract both as himself and also as “Carla Das Neves.”

 

            According to the statement of offense, Sickle did not perform any of the work required under the contract, nor did anyone else. None of the USAID money was used for its intended purpose to facilitate safer childbirth in South Africa. Instead, Sickle diverted the money to himself personally, and an associate.

 

            Sickle resigned from his position last year. Agents with the USAID Inspector General’s Office arrested him in Washington, D.C., in February 2017. He has been in custody ever since.

 

            This case was investigated by the U.S. Agency for International Development Office of Inspector General. It was prosecuted by Assistant U.S. Attorneys John P. Marston and Denise Simmonds and Special Assistant U.S. Attorney Vesna Harasic-Yaksic of the U.S. Attorney’s Office for the District of Columbia.

 

 

            WASHINGTON – A complaint was unsealed today, charging two U.S. citizens with federal crimes related to Iran.  Muzzamil Zaidi, 35, a U.S. citizen who resides in Qom, Iran, was charged with acting in the United States as an agent of the government of Iran without first notifying the Attorney General.  Zaidi, Asim Naqvi, 35, a U.S. citizen who lives in Houston, Texas, and Ali Chawla, 36, a Pakistani national who lives in Qom, Iran, were all charged with violations of the International Emergency Economic Powers Act.  The complaint alleges that both charges stem from the defendants’ campaign to transport U.S. currency from the United States to Iran on behalf of the Supreme Leader of Iran in 2018 and 2019.  Both Zaidi and Naqvi were arrested in Houston on August 18, 2020.

            “Disrupting Iran’s ability to raise U.S. dollars is key to combatting its ability to sponsor international terrorism and destabilize the Middle East, including through its military presence in Yemen,” said Assistant Attorney General for National Security John C. Demers.  “Zaidi, Naqvi, and Chawla allegedly raised money in the United States on behalf of Iran’s Supreme Leader, and illegally channeled these dollars to the government of Iran.  As a result of the charges unsealed today, their unlawful scheme has been exposed and brought to an end.  The U.S. Department of Justice and its National Security Division are committed to holding accountable individuals who operate covert networks within the United States in order to provide support and funds to hostile foreign governments like Iran in violation of U.S. law.”

            “This case is significant on many levels,” said Michael R. Sherwin, Acting United States Attorney for the District of Columbia.  “To begin, as alleged in the criminal complaint, the defendants have considerable operational links to the IRGC, which has conducted multiple terrorist operations throughout the world over the past several years.  The life-blood of these terrorist operation is cash – and the defendants played a key role in facilitating that critical component.”

            “The charges unsealed today demonstrate our commitment to preventing agents of hostile foreign governments from having access and freedom to operate within the borders of the United States,” said James A. Dawson, Acting Assistant Director in Charge of the FBI’s Washington Field Office. “In addition to violating the Foreign Agents Registration Act, Zaidi allegedly operated with his co-conspirators at the behest of the Iranian government—a known sponsor of terrorism—to overtly solicit U.S. money to further Iranian causes, in violation of the International Emergency Economic Powers Act (IEEPA). This is why IEEPA was established: to prevent hostile foreign governments from leveraging the U.S. financial system in furtherance of their global destabilizing endeavors.” 

            "The arrests in this case are the direct result of the undeterred efforts of the FBI Houston Counterterrorism investigative team," said FBI Houston Field Office Special Agent in Charge, Perrye K. Turner. "By engaging in around the clock collaboration with multiple Field Offices and Intelligence Community partners, our agents ensure that those who send money to terrorist regimes will ultimately be held accountable and lose their freedom."

            As alleged in the affidavit in support of a criminal complaint, Zaidi offered his services to the Supreme Leader of Iran in or around July 2015 and said that he could serve the “Islamic Republic in the socio-political or another field.”  The complaint alleges that Zaidi traveled to Syria in or around June 2018 and that, while there, flew to an active war zone in an armed Iranian military or intelligence aircraft.  The complaint alleges that Zaidi had access to bases under the command of the Iran’s Islamic Revolutionary Guards Corps (IRGC) while in that war zone, including a “Sepah Qods” (IRGC Qods Force) base. The IRGC was designated as a terrorist organization by the U.S. on April 4, 2019. Qassem Soleimani, a major general in the IRGC, was commander of the Qods Force until he was killed in a U.S. airstrike on Jan. 3, 2020.

            According to the complaint, in December 2018, Zaidi and other members of an organization known as “Islamic Pulse,” including Chawla, received the permission of the Supreme Leader of Iran to collect khums, a religious tax, on the Supreme Leader’s behalf, and to send half of that money to Yemen.  The complaint alleges that permission was formalized on or about Feb. 28, 2019, in a letter confirming the permission of the Supreme Leader of Iran and another Ayatollah to spend khums money in Yemen.

            Based on the complaint, in or around July 2019, Islamic Pulse released a video soliciting donations for its purported Yemen campaign that showed money moving from the United States and other Western countries to Yemen through Iran.  The complaint alleges that Chawla replied to donors’ concerns about how the campaign was able to get money into Yemen by stating that the matter could not be discussed over email. The complaint further alleges that Chawla sought U.S. dollars specifically, stated that Islamic Pulse could not accept electronic transfers, and admitted that Islamic Pulse was not a registered charity. 

            The complaint alleges that after the United States placed sanctions on the Supreme Leader of Iran in June 2019, Zaidi told Naqvi that the action was a “straight hit on khums.”  The complaint alleges that in summer and fall 2019 Zaidi and Naqvi continued to collect U.S. currency in the United States and have it transported to Iran, sometimes via Iraq, structured in such a way as to avoid reporting requirements.  After a group of 25 travelers carried money destined for Iran on behalf of Zaidi and Naqvi in October 2019, Zaidi and Naqvi discussed the screening the travelers underwent at the airport and Naqvi’s hope that none of the travelers would confess to authorities upon their return.

            The complaint alleges that, during his current stay in the United States, which began in June 2020, Zaidi has exhibited behavior that is consistent with having received training from a foreign government or foreign intelligence service, such as the government of Iran or IRGC.  According to the complaint, that behavior includes a reluctance to discuss matters over the phone, or even over encrypted applications, because Zaidi claims that doing so could be dangerous.

            The charges in criminal complaints are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. The maximum penalty for a violation of 18 U.S.C. § 951 is 10 years, and the maximum penalty for a violation of the International Emergency Economic Powers Act is 20 years.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes.

            The investigation into this matter was conducted by the FBI’s Washington Field Office and Houston Field Office.  The case is being prosecuted by the National Security Section of the U.S. Attorney’s Office for the District of Columbia, along with the Counterintelligence and Export Control Section and Counterterrorism Section of the National Security Division of the Department of Justice.

              WASHINGTON – Antwon D. Green, 29, of Washington, D.C., was sentenced today to 48 years in prison for killing a man in 2014 at a Southeast Washington barber shop, announced U.S. Attorney Jessie K. Liu and Peter Newsham, Chief of the Metropolitan Police Department (MPD).

            Green was found guilty by a jury in December 2017, following a trial in the Superior Court of the District of Columbia, of first-degree premeditated murder, attempted armed robbery, assault with a dangerous weapon, being a felon in possession of a firearm, and related charges. He was sentenced by the Honorable Judith Bartnoff. This prison term is in addition to a six-year sentence that Green must serve for an armed robbery he committed just weeks after the murder.

            According to the government’s evidence, on Friday, Oct. 10, 2014, at about 11 a.m., Green walked by the front of the Kutt n’ Up barber shop in the 1400 block of Good Hope Road SE, and pointed at Breond Keys, a customer who was getting his hair cut inside. 

            Roughly 16 minutes later, Green, now wearing different clothing including a dark-colored hooded sweatshirt and a mask, ran into the barber shop, holding a pistol in his hand.  Green immediately raised the pistol with both hands, pointed it at Mr. Keys as he sat in the barber chair getting his haircut, and opened fire, hitting Mr. Keys several times.  Other patrons and barbers scrambled to keep from being struck by Green’s bullets.  Once Mr. Keys fell to the floor, Green continued to fire at him, striking him several additional times.  As Mr. Keys lay dying on the barber shop floor, Green dug his ungloved-hand into Mr. Keys’ right, front pants pocket, stealing the contents therefrom.  Green then fled the barber shop.

            Mr. Keys, 38, was taken to a hospital, but pronounced dead a short time after the shooting.

            Several surveillance cameras mounted inside the barber shop caught the murder on video.  However, because Green successfully disguised his appearance with his hoodie and mask, none of the eyewitnesses were able to identify the gunman.  Upon examining the surveillance footage, the detectives saw that the gunman had reached into Mr. Keys’s pocket during the incident.  Accordingly, they submitted Mr. Keys’s pants for DNA examination and analysis.  DNA testing revealed that Green’s DNA (i.e., his skin cells) were found inside Mr. Keys’s right front pants pocket. 

            Following an investigation by MPD, Green was charged in the murder in July 2015. He has been in custody ever since.

            The armed robbery case stemmed from a crime carried out by Green on Oct. 28, 2014, at a liquor store about a block away from where he earlier had committed the murder. That day, at approximately 4:15 p.m., Green ran past a man with a sleeping infant strapped to his chest and robbed a store owner who was restocking an ATM machine. He fled with $12,000 in cash. Green pled guilty in 2015 to a charge of armed robbery for this offense.

            In announcing the sentence, U.S. Attorney Liu and Chief Newsham commended the work of those who investigated the case from the Metropolitan Police Department and the FBI. They also expressed appreciation for the assistance provided by the District of Columbia Office of the Medical Examiner, the Glendale Verdugo Regional Crime Laboratory, and the District of Columbia Department of Forensic Sciences.  They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Michael Ambrosino, Special Counsel for DNA and Forensic Evidence Litigation; Forensic Operation/Program Specialist Benjamin Kagan-Guthrie; Victim/Witness Advocate James Brennan; Paralegal Specialists Kelly Blakeney and Meridith McGarrity; Criminal Investigators John Marsh, William Hamann, and Zachary McMenamin, and Litigation Technology Specialist Leif Hickling.  Finally, they commended the work of Assistant U.S. Attorneys Richard DiZinno, Glenn Kirschner and Allessandra Stewart, who investigated and prosecuted the case.

Defendant Used Chemical Spray Against Officers

            WASHINGTON – A Florida man pleaded guilty today to assaulting law enforcement officers during the breach of the U.S. Capitol on Jan. 6, 2021. His actions and the actions of others disrupted a joint session of the U.S. Congress convened to ascertain and count the electoral votes related to the presidential election.

            Matthew Council, 50, of Riverview, Florida, pleaded guilty in the District of Columbia to an indictment charging him with a total of six offenses. They include one felony count of assaulting, resisting, or impeding law enforcement officers, one felony count of interfering with a law enforcement officer during a civil disorder, and four misdemeanor offenses.

            According to court documents, on Jan. 6, 2021, Council joined rioters who were illegally gathered at the west side of the Capitol Building. A police officer sprayed him with a chemical irritant, but he nonetheless continued up the stairs to the Northwest Plaza. At the time, law enforcement officers were struggling to keep the mob outside the building. At approximately 2:44 p.m., Council entered the Parliamentarian Door. He barged into a line of Capitol Police officers, trying to push them back and create an opening for others to get through. He fell to the ground.

            Council was arrested at the scene. He is to be sentenced on November 1, 2022. He faces a statutory maximum of eight years in prison for assaulting law enforcement officers and another five years for civil disorder, as well as a total of three more years for the misdemeanor offenses. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

            This case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Department of Justice National Security Division’s Counterterrorism Section. Valuable assistance was provided by the U.S. Attorney’s Office for the Middle District of Florida.

            The case is being investigated by the FBI’s Tampa and Washington Field Offices. Valuable assistance was provided by the Metropolitan Police Department and the U.S. Capitol Police.

            In the 19 months since Jan. 6, 2021, more than 860 individuals have been arrested in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including over 260 individuals charged with assaulting or impeding law enforcement. The investigation remains ongoing.  Anyone with tips can call 1-800-CALL-FBI (800-225-5324) or visit tips.fbi.gov.

 

Defendant Accused of Assaulting Officer and Throwing Object at Police

            WASHINGTON - A Texas man has been arrested on felony charges, including assaulting a law enforcement officer, for his actions during the breach of the U.S. Capitol on Jan. 6, 2021. His actions and the actions of others disrupted a joint session of the U.S. Congress convened to ascertain and count the electoral votes related to the presidential election.

            Jason Farris, 44, of Arlington, Texas, is charged in a criminal complaint filed in the District of Columbia with assaulting, resisting, or impeding officers; obstructing, impeding, or interfering with officers during a civil disorder; entering and remaining in a restricted building or grounds; disorderly and disruptive conduct in a restricted building or grounds; and physical violence in a restricted building or grounds. He was arrested today in Texas. He is expected to make his initial appearance later today in the Northern District of Texas.

            According to court documents, on Jan. 6, 2021, Farris was at the front of a mob on the North side of the Lower West Plaza of the Capitol, a location that was restricted from lawful public access. Police officers at this location had set up metal bicycle racks as a barricade to prevent rioters from advancing further into the Capitol.  At approximately 2:15 p.m., Farris stated to the police officers, among other things: “I bet your family is proud of you, fucking faggot ass. You ain’t shit. Ain’t none of you shit.” As he said this, Farris hit the baton held by of one of the police officers with his hand.

            Moments later, other rioters grabbed one of the bicycle racks and attempted to pull it away from the officers.  Several officers held onto the bicycle rack.  Farris approached a U.S. Capitol Police officer who was holding onto the bicycle rack and shoved the officer in the back with two hands, knocking him to the ground. After Farris shoved the officer to the ground, other rioters pulled the bicycle rack away from the police and dragged it into the crowd.

            This case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Department of Justice National Security Division’s Counterterrorism Section. Valuable assistance was provided by the U.S. Attorney’s Office for the Northern District of Texas.

            The case is being investigated by the FBI’s Dallas Field Office and the FBI’s Washington Field Office, which identified Farris as #322 on its seeking information photos. Valuable assistance was provided by the U.S. Capitol Police and the Metropolitan Police Department.

            In the 25 months since Jan. 6, 2021, more than 985 individuals have been arrested in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including approximately 319 individuals charged with assaulting or impeding law enforcement. The investigation remains ongoing. 

            Anyone with tips can call 1-800-CALL-FBI (800-225-5324) or visit tips.fbi.gov.

            A complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

            WASHINGTON – Three area men have been found guilty by a jury of federal offenses stemming from a string of 10 armed robberies of gas stations, liquor stores, convenience stores, and restaurants in the Washington, D.C. metropolitan area, all within a four-week period in 2018.

            The verdict, returned yesterday in the U.S. District Court for the District of Columbia, was announced by U.S. Attorney Matthew M. Graves, Wayne A. Jacobs, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division, Marcus G. Jones, Chief of the Montgomery County, Maryland, Police Department, and Antonio DeVaul, Chief of the Takoma Park, Maryland Police Department.

            Those convicted of federal conspiracy, robbery, and weapons charges include: Quaysa Flumo, 34, of Washington, D.C., Enyianna Onyewu, 29, of Silver Spring, Maryland, and Emmanuel Sumo, 27, of Takoma Park, Maryland. All remain held pending sentencing by the Honorable Amit P. Mehta.  Onyewu is to be sentenced on July 22, 2022, Flumo on Aug. 12, 2022, and Sumo on Aug. 26, 2022. 

            According to the government’s evidence, throughout January 2018, the defendants, working together, robbed a series of gas stations, liquor stores, convenience stores, and restaurants in the Washington, D.C. metropolitan area.  In each of the robberies, the defendants were armed with a .45 caliber handgun.  They wore masks and gloves to avoid being identified.  In several robberies, they physically assaulted store employees and put the gun directly to the heads of their victims.  The robberies took place at various hours, including some in broad daylight. The victims remain shaken and shocked by the incidents.  Fortunately, none of them sustained serious physical injuries.

            During the trial, the government presented testimony from nearly 30 witnesses. The first robbery took place on Jan. 2, 2018, at a gas station in Silver Spring. Other targets were in Takoma Park, Maryland, Silver Spring, Maryland, Northwest Washington, and Arlington, Virginia. On Jan. 10, 2018, two robberies took place within a 45-minute period. The final robbery in the series took place on Jan. 29, 2018, at another gas station in Silver Spring.

            Onyewu was arrested on Oct. 22, 2020. Sumo was arrested on Nov. 23, 2020, and Flumo was arrested on April 27, 2021.

            In announcing the verdicts, U.S. Attorney Graves, Special Agent in Charge Jacobs, Chief Jones, and Chief DeVaul commended the work of those who investigated the case from the FBI’s Washington Field Office’s Violent Crime Task Force, the Montgomery County, Maryland Police Department, the Takoma Park, Maryland Police Department, the Metropolitan Police Department, the Prince George’s County, Maryland Police Department, and the Arlington County, Virginia Police Department. 

            They also expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Daniel Lenerz, Paralegal Specialists Candace Battle, Mary Downing, and Kim Hall, Legal Assistant Latoya Wade, Supervisory Litigation Technology Specialist Leif Hickling, and Litigation Technology Specialist William Henderson.

            Finally, they commended the work of Assistant U.S. Attorneys Nihar Mohanty and Candice Wong, who investigated and prosecuted the case.

 

            WASHINGTON – Dominique Williams, 24, of Washington, D.C., was sentenced today to 24 years in prison for killing a man in a drive-by shooting in September 2015 in Southeast Washington, announced U.S. Attorney Jessie K. Liu and Peter Newsham, Chief of the Metropolitan Police Department (MPD).

            Williams was found guilty by a jury in March 2018 of second-degree murder while armed, assault with a dangerous weapon, and related firearms offenses. The verdict followed a trial in the Superior Court of the District of Columbia. He was sentenced by the Honorable Judith Bartnoff.. Following his prison term, he will be placed on five years of supervised release.

            A co-defendant, Maricco Knight, 25, also of Washington, D.C., was found guilty by the same jury of acting as an accessory after the fact and obstruction of justice for his role in assisting Williams while Williams was evading law enforcement prior to his arrest. Knight is to be sentenced on May 15, 2018.

            According to the government’s evidence, on Sept. 19, 2015, shortly after 1 a.m., Williams, Knight and another man pulled over a Honda Accord in the 3200 block of 28th Street SE. Williams was in the rear passenger seat, Knight was in the front passenger seat, and the third man was driving. A short distance away from the Accord, gathered in an alley, were three men and an 11-year-old boy.  Williams had earlier disputes with persons who resided or sometimes gathered in the block, but none of those persons was among the group in the alley.

            After the Accord pulled over, Williams leaned out of the car and fired eight shots from a 9-millimeter handgun at the group.  One person was hit – Marcellus Green, 39. He was shot once and was declared dead about an hour later. The three people in the Accord drove off.

            MPD officers were on the scene within a few minutes.  Witnesses gave the police a description of the Accord and its license plate number.  At about 1:40 a.m., an officer in a marked MPD cruiser spotted the Accord, still occupied by the three men, in a different neighborhood.  Before the officer could even activate his emergency equipment, the Accord began to drive off at a high rate of speed.  After a 20-minute chase, during which the 9-millimeter handgun was tossed out, the Accord crashed and all three occupants fled on foot. Within two minutes, the driver and Knight were stopped.

            Williams, however, got away. An arrest warrant was issued for him three months later and he was ultimately apprehended on July 20, 2016, at the residence of Knight’s girlfriend.  During the search for Williams, according to the government’s evidence, Knight assisted in helping Williams hide out despite the fact that he was told repeatedly by law enforcement that Williams was wanted for the murder.

            In announcing the sentence, U.S. Attorney Liu and Chief Newsham commended the work of those who investigated the case from the Metropolitan Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Michael Ambrosino, Special Counsel for DNA and Forensic Evidence Litigation; Forensic Operation/Program Specialist Benjamin Kagan-Guthrie; Litigation Technology Specialist Leif Hickling; Paralegal Specialist Alesha Matthews; Investigative Analyst Zachary McMenamin; former Supervisory Victim/Witness Services Coordinator David Foster; Victim/Witness Security Specialist Lesley Slade; Victim/Witness Advocate Marcia Rinker, and Interns Korey Johnson and Shani Brown.

            Finally, they commended the work of Assistant U.S. Attorney Michael Liebman who investigated and prosecuted the case, and Assistant U.S. Attorney Ahmed Baset, who prosecuted the case.

            WASHINGTON – Dominique Williams, 24, of Washington, D.C., has been found guilty by a jury of murder and other charges in the 2015 drive-by killing of a man in Southeast Washington, announced U.S. Attorney Jessie K. Liu and Peter Newsham, Chief of the Metropolitan Police Department (MPD).

            Williams was found guilty on March 12, 2018, of second-degree murder while armed, assault with a dangerous weapon, and related firearms offenses. A co-defendant, Maricco Knight, 25, of Washington, D.C., was found guilty by the jury of acting as an accessory after the fact and obstruction of justice for his role in assisting Williams while Williams was evading law enforcement prior to his arrest. The verdicts followed a trial in the Superior Court of the District of Columbia. The Honorable Judith Bartnoff scheduled sentencing for both defendants to take place on May 11, 2018.

            According to the government’s evidence, on Sept. 19, 2015, shortly after 1 a.m., Williams, Knight and another man pulled over a Honda Accord in the 3200 block of 28th Street SE. Williams was in the rear passenger seat, Knight was in the front passenger seat, and the third man was driving. A short distance away from the Accord, gathered in an alley, were three men and an 11-year-old boy.  Williams had earlier disputes with persons who resided or sometimes gathered in the block, but none of those persons was among the group in the alley.

            After the Accord pulled over, Williams leaned out of the car and fired eight shots from a 9-millimeter handgun at the group.  One person was hit – Marcellus Green, 39. He was shot once and was declared dead about an hour later. The three people in the Accord drove off.

            MPD officers were on the scene within a few minutes.  Witnesses gave the police a description of the Accord and its license plate number.  At about 1:40 a.m., an officer in a marked MPD cruiser spotted the Accord, still occupied by the three men, in a different neighborhood.  Before the officer could even activate his emergency equipment, the Accord began to drive off at a high rate of speed.  After a 20-minute chase, during which the 9-millimeter handgun was tossed out, the Accord crashed and all three occupants fled on foot. Within two minutes, the driver and Knight were stopped.

            Williams, however, got away. An arrest warrant was issued for him three months later and he was ultimately apprehended on July 20, 2016, at the residence of Knight’s girlfriend.  During the search for Williams, according to the government’s evidence, Knight assisted in helping Williams hide out despite the fact that he was told repeatedly by law enforcement that Williams was wanted for the murder.

            In announcing the verdicts, U.S. Attorney Liu and Chief Newsham commended the work of those who investigated the case from the Metropolitan Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Michael Ambrosino, Special Counsel for DNA and Forensic Evidence Litigation; Forensic Operation/Program Specialist Benjamin Kagan-Guthrie; Litigation Technology Specialist Leif Hickling; Paralegal Specialist Alesha Matthews; Investigative Analyst Zachary McMenamin; former Supervisory Victim/Witness Services Coordinator David Foster; Victim/Witness Security Specialist Lesley Slade; Victim/Witness Advocate Marcia Rinker, and Interns Korey Johnson and Shani Brown.

            Finally, they commended the work of Assistant U.S. Attorney Michael Liebman who investigated and prosecuted the case, and Assistant U.S. Attorney Ahmed Baset, who prosecuted the case.

 

            WASHINGTON – Leon A. Miller, 32, of Washington, D.C., pleaded guilty today to armed robbery and a firearms offense stemming from a hold-up he carried out last fall at a liquor store in Northwest Washington, announced U.S. Attorney Matthew M. Graves and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).

            Miller pleaded guilty in the Superior Court of the District of Columbia. The plea agreement, which is contingent upon the Court’s approval, calls for Miller to be sentenced to a term of imprisonment between seven and nine years. The Honorable J. Michael Ryan scheduled sentencing for April 11, 2022.

            In court documents, Miller also admitted to committing two other robberies of liquor stores, also in Northwest Washington, and of two store customers. The five robberies took place on three successive evenings.

            Miller pleaded guilty to charges stemming from the Oct. 14, 2021, robbery of Paul’s Wine and Spirits, in the 5200 block of Wisconsin Avenue NW. According to a factual proffer, Miller entered the store at approximately 6 p.m., brandished what appeared to be a black handgun, and demanded that a store employee open the cash registers. He stole about $200 in cash. He also demanded three specific kinds of champagne, none of which the store carries.

            Miller also admitted robbing The Wine Specialist, in the 1100 block of 20th Street NW, on the evening of Oct. 12, 2021. There, he also brandished what appeared to be a black handgun and demanded that an employee open the cash registers. He took approximately $2,000 in cash as well as two bottles of champagne, valued at roughly $950.

            The next evening, Oct. 13, 2021, Miller entered Press Liquors, in the 500 block of 14th Street, brandished what appeared to be a black handgun, and demanded an employee open the registers. He stole approximately $900 in cash. In addition, he brandished the gun at two customers and took their wallets and phones.

            Miller was arrested about an hour after the robbery of Paul’s, near the Dupont Circle Metro station. He has been in custody ever since.

            In announcing the plea, U.S. Attorney Graves and Chief Contee commended the work of those who investigated the case from the Metropolitan Police Department. They also expressed appreciation for the assistance provided by the Metro Transit Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Crystal Waddy, and Assistant U.S. Attorney Paul V. Courtney, who investigated and prosecuted the matter

            WASHINGTON – Kevin Cooke, 22, of Washington, D.C., was sentenced today to four years in prison for a series of incidents in which he stalked and assaulted his ex-girlfriend and set fire to her family’s residence in Southeast Washington, announced U.S. Attorney Matthew M. Graves.

            Cooke pleaded guilty in February 2022, in the Superior Court of the District of Columbia, to charges of arson, attempted assault with a dangerous weapon, stalking, and simple assault. He was sentenced by the Honorable Lynn Leibovitz. Following completion of his prison term, Cooke is to be placed on three years of supervised release.

            According to the government’s evidence, Cooke stalked and harassed his ex-girlfriend and her family between March 2021, when the relationship ended, and October 2021, when he was arrested. He set fire to the exterior of the victims’ apartment building in the 300 block of Anacostia Road SE on multiple dates, terrorizing those in the building. Cooke was under a stay-away and no-contact order issued by the Court barring him from the victim and her family’s apartment building. Nonetheless, on Aug. 30, 2021, at approximately 2 a.m., he lit items on fire and threw them into the victims’ window. Nearly 2 ½ hours later, he also fired approximately 16 rounds at the victims’ building. No one was hurt.

            Cooke also arranged a meeting with his ex-girlfriend by hacking an Instagram account of one of her friends. He surprised his ex-girlfriend on Sept. 12, 2021, at her college residence hall, grabbed her, dragged her into a laundry room, and hit her in the face multiple times. He fled before police arrived. Finally, on Oct. 2, 2021, he was caught on surveillance video using a gas can and accelerant to once again set fire to the exterior of the family’s apartment building. He was arrested on Oct. 4, 2021.

            In announcing the sentence, U.S. Attorney Graves commended the work of those who investigated the case from the D.C. Fire and Emergency Medical Services Department’s Fire Investigation Unit and the Metropolitan Police Department. He also expressed appreciation for the work of those who handled the case at the U.S. Attorney’s Office, including Victim/Witness Advocate Lu Lan, Paralegal Specialist Brenda Williams, and Special Agents Neil D’Cunha and Nelson Rhone of the Criminal Investigation and Intelligence Unit.

            Finally, he commended the efforts of Assistant U.S. Attorney Zach Horton, who investigated and prosecuted the case.

Saipan, MP – SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Chun Yang and Yurong Wang, citizens of the People’s Republic of China, were sentenced by the District Court for the Northern Mariana Islands for Conspiracy to Possess Over 50 grams of Methamphetamine with the Intent to Distribute, in violation of 21 U.S.C. §§ 846 and 841(a)(1).

CHUN YANG (age 46) - Sentenced to 70 months incarceration, five years of supervised release following release, 100 hours of community service in lieu of a fine, and a $100 special assessment fee.  Yang was also ordered to report to U.S. immigration officials for deportation proceedings upon release from prison.

YURONG WANG (age 50) - Sentenced to 46 months incarceration, five years of supervised release following release, 100 hours of community service in lieu of a fine, and a $100 special assessment fee.  Wang was also ordered to report to U.S. immigration officials for deportation proceedings upon release from prison.

On June 21, 2022, Commonwealth of the Northern Mariana Islands (CNMI) Customs and Biosecurity Agents discovered 1,809.80 grams of methamphetamine inside of a mail parcel during a routine inspection at the U.S. Post Office on the island of Saipan.  The parcel was mailed from California.  Upon discovery of the methamphetamine, agents with the Drug Enforcement Administration (DEA) joined the investigation.  On June 22, 2022, DEA and the CNMI Department of Public Safety (DPS) Drug Enforcement Task Force (DETF) conducted surveillance while the parcel was claimed from the post office, transported after exchanges between multiple persons and vehicles, and ultimately delivered to Wang.  After receiving the package, Wang brought it to an apartment where she met Yang and Xing Rui Gao (also a PRC citizen).  The three individuals intended to distribute the drugs on Saipan.  They were promptly arrested after opening the package.

Gao was charged separately and pled guilty on October 4, 2023.  Sentencing is scheduled for February 23, 2024.  None of the defendants had lawful immigration status at the time of the offense.

“This case demonstrates the effectiveness of partnerships among Commonwealth and federal law enforcement,” stated United States Attorney Shawn N. Anderson.  “A substantial amount of methamphetamine was kept out of our communities.  I applaud the efforts of all involved in bringing these defendants to justice.”

“Operation Cloudy Day” was 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 investigation was led by the United States Drug Enforcement Administration with cooperation from the CNMI Customs and Biosecurity Agency, the CNMI DETF, and prosecuted by Albert S. Flores, Jr., Assistant United States Attorney in the District of the Northern Mariana Islands.

            WASHINGTON – James Kyle Bell, 44, of Las Vegas, Nevada, was sentenced today to 46 months in prison for carrying out separate wide-ranging fraud schemes last year: one involving fundraising for fake political action committees (PACs) that he created, and the other involving COVID-19 relief funds he sought and received through fraudulent applications. He also must forfeit or pay back nearly $1.4 million in cash and assets.

            The announcement was made by U.S. Attorney Matthew M. Graves, Wayne A. Jacobs, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division, and Amaleka McCall-Brathwaite, Special Agent in Charge of the U.S. Small Business Administration’s Office of the Inspector General, Eastern Region.

            Bell registered two sham PACs with the Federal Election Commission. One, the “Keep America Great Committee,” purportedly supported Donald Trump. The other, the “Best Days Lie Ahead Committee,” purportedly supported Joseph Biden, Jr. He sought donations nationwide for both PACs using online platforms and e-mail solicitations, generating at least $346,000.

            Additionally, Bell created multiple shell companies that he used to defraud the U.S. Small Business Administration’s Paycheck Protection Program (PPP), which was created by Congress to provide financial assistance to Americans who suffered economic losses due to the COVID-19 pandemic. He applied for and won approval for more than $1.1 million in four separate loans. He also applied for a fifth loan for $521,625 but withdrew the application.

            “This prosecution is the first in the District of Columbia involving the creation of scam political action committees,” said U.S. Attorney Graves. “It also is another in a series of prosecutions targeting frauds committed against the COVID relief efforts. The message is clear: along with our law enforcement partners, we will protect the public against fraudsters who seek to line their pockets by exploiting the political process and government programs.”

            “Today’s sentencing should serve as yet another reminder to those who deceive and steal from hardworking Americans—you will ultimately be held to account for your actions,” said Special Agent in Charge Jacobs of the FBI Washington Field Office Criminal Division. “The FBI and its partners will continue to aggressively investigate those who perpetrate fraud schemes at the expense of the American people. Bell defrauded over 2,000 victims, who were all deceived into thinking they were making a donation to the presidential candidate of their choice, but in reality, that money was going to Bell’s personal accounts. Bell also defrauded the government through the Paycheck Protection Program, pocketing money meant for Americans in need.”

            “Lying to gain access to SBA’s pandemic response programs is not without consequence,” said Special Agent in Charge Amaleka McCall-Brathwaite of the SBA’s Office of Inspector General, Eastern Region. “SBA’s Paycheck Protection Program is intended to provide assistance to the nation’s small businesses struggling with the pandemic challenges.  I want to thank the U.S. Attorney’s Office for its leadership and dedication to pursuing justice.”

            Bell pleaded guilty in May 2021 to one count of wire fraud in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable John D. Bates. Following completion of his prison term, he will be placed on two years of supervised release.

            According to the government’s evidence, between January 2020 and October 2020, Bell’s PACs sent solicitations nationwide to more than 40,000 recipients.  The solicitations promised that individual donations would be “5x matched” by Bell’s PACs.  The solicitations also replicated the look and feel of marketing materials used by the presidential campaigns, including official logos and slogans.  Bell also set up websites to solicit donations with names like “keepamericagreatcommittee.com,” “trump2020maga.com,” and “bestdayslieaheadcommittee.com.”  The sham PACs received more than $346,000 in contributions from individuals and other groups during the months before the 2020 election.  However, none of the individual donations were ever “5X matched” by Bell or anyone else.  Additionally, Bell made a series of false filings with the FEC in which Bell claimed that his PACs had made expenditures in support of both presidential campaigns.

            During the same period, Bell applied for more than $1.6 million in PPP loans. For example, one of Bell’s companies, named “Echo Three LLC,” a company registered in Nevada with no employees and no payroll, received a PPP loan of $485,000 based on Bell’s false statements to the government that the company had 83 employees working at Bell’s private residence.  In another instance, Bell obtained a PPP loan in the amount of $492,000 for a company he owned and controlled named “Myson Rules LLC” which had no employees, no payroll, no business operations, and no active business license in the State of Nevada.  Bell submitted fabricated tax documents and other company records in support of all five PPP loan applications. He withdrew one application, for $521,625, before the loan could be funded.

            Bell diverted almost all of the funds from PAC donors and the taxpayer-supported PPP loans to bank accounts where they could be used for Bell’s personal benefit, commingling the proceeds of the fraud and further violating federal campaign finance laws which require exacting record keeping for PACs.  According to court papers, the government has located and seized $519,000 of Bell’s criminal proceeds.  Bell’s plea agreement requires that Bell make full restitution to his victims and agree to the entry of a money judgement of $862,000 against him.

            This matter was investigated by the FBI’s Washington Field Office and the U.S. Small Business Administration, Office of the Inspector General.  Assistant United States Attorneys John W. Borchert and Elizabeth Aloi prosecuted this case.

**

            On May 17, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

            Anyone with information about allegations of fraud related to COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

 

            WASHINGTON – Eugene Sickle, the former deputy executive director of a South African research institute, pled guilty today to a scheme in which he stole more than $200,000 in grant funds originating with the U.S. Agency for International Development (USAID).

 

            The guilty plea was announced by Channing D. Phillips, U.S. Attorney for the District of Columbia, and Jonathan Schofield, Special Agent in Charge for the USAID Office of Inspector General, Office of Investigations.

 

            Sickle, 47, a chemist and a citizen of South Africa, pled guilty in the U.S. District Court for the District of Columbia to a charge of theft concerning programs receiving federal funds. The plea, which is contingent upon the Court’s approval, calls for an agreed-upon sentence of six months to 12 months and a day of incarceration. The plea agreement requires Sickle to pay $206,250 in restitution. He is to be deported upon completion of his sentence. The Honorable Ketanji Brown Jackson scheduled a sentencing hearing for August 1, 2017.

 

            “Eugene Sickle abused his position to steal more than $200,000 meant to promote safer childbirth practices in South Africa,” said U.S. Attorney Phillips. “His actions undercut efforts by the U.S. Agency for International Development to help those in need. His arrest and prosecution demonstrate our commitment to ensuring U.S. dollars are spent properly.”

 

            “When individuals are entrusted by the United States to help implement its overseas development programs, nothing but the highest ethical and legal standards are demanded,” said Special Agent in Charge Schofield. “Theft from those who have nothing - from a program dedicated to safer childbirth no less - not only violates the law but is an affront to the very dignity of America's ideals and largess. Whether such egregious behavior transpires domestically or overseas, the OIG stands ready to ensure perpetrators are held to account.”

 

            Based in Washington, D.C., USAID is the lead U.S. government agency that works to end extreme global poverty and enable resilient, democratic societies. It has regional offices in foreign countries to implement and administer USAID programs and funds. USAID South Africa is one such regional office that works with local organizations in that country.

 

            According to a statement of offense, signed by the defendant as well as the government, Sickle was deputy executive director of the Wits Reproductive Health and HIV Institute, a South African research institute focusing on sexual and reproductive health as well as vaccine-preventable diseases. Its primary source of funding is USAID, and Sickle administered grant funds for projects. One such project involved a mobile electronic device software application, in connection with the South African National Department of Health, which would help facilitate safer childbirth deliveries in South Africa.

 

            On October 2, 2015, according to the statement of offense, Sickle and the institute’s chief executive officer signed a contract with a company called Alzar Consulting Services Ltd. to develop the childbirth app. Likewise, an individual named “Dr. Carla Das Neves” Alzar’s purported director, signed the contract. Pursuant to this contract, the institute made two payments to Alzar totaling $206,250. However, the childbirth app has never been developed.

 

            Subsequent investigation revealed that Sickle created Alzar in the British Virgin Islands. Unbeknownst to anyone at the research institute, he was the sole owner of the company. Sickle also created e-mail accounts for Alzar and fake Alzar employees, including “Carla Das Neves.” He created a fake LinkedIn page for “Carla Das Neves,” which had a beach scene for a picture, and falsely claimed that “Carla Das Neves” was a trained expert in aid/relief work.

 

            Sickle shepherded the research institute’s contract with Alzar through the approval and compliance process. He signed the contract both as himself and also as “Carla Das Neves.”

 

            According to the statement of offense, Sickle did not perform any of the work required under the contract, nor did anyone else. None of the USAID money was used for its intended purpose to facilitate safer childbirth in South Africa. Instead, Sickle diverted the money to himself personally, and an associate.

 

            Sickle resigned from his position last year. Agents with the USAID Inspector General’s Office arrested him in Washington, D.C., in February 2017. He has been in custody ever since.

 

            This case is being investigated by the U.S. Agency for International Development Office of Inspector General. It is being prosecuted by Assistant U.S. Attorneys John P. Marston and Denise Simmonds and Special Assistant U.S. Attorney Vesna Harasic-Yaksic of the U.S. Attorney’s Office for the District of Columbia.

           WASHINGTON – Michael Alan Hines, 36, of Washington, D.C., was ordered to be detained pending trial today, after the Honorable Heide Hermann found probable cause supported the carjacking and armed robbery charges, announced U.S. Attorney Matthew M. Graves and Metropolitan Police Department Chief Pamela A. Smith.

           According to the government’s evidence at the preliminary hearing, Hines approached the first victim’s car on March 27, 2024, while she was at the pump of a gas station on Rhode Island Avenue in Northeast Washington, D.C. The defendant first tried to get into her car and, when he found the door locked, he asked the victim for money. She indicated she had none. Due to the victim’s proximity to her car, the doors unlocked automatically, and the defendant got in the driver’s seat. The victim jumped into the passenger seat and tried to stop the defendant, but he began to choke her. While choking the victim, the defendant put the car in reverse and took the victim’s phone from her hands. The victim freed herself and got out of her car. The defendant then abandoned his effort to take the car when he couldn’t drive it.

           An MPD detective responding to that complaint recognized the defendant as the suspect in an armed robbery at the same gas station several days earlier. In that case, the defendant had also walked up to a driver at a gas pump and asked for money before robbing him. The defendant grabbed that victim’s debit card from the pump and, when that victim struggled with the defendant over the card, the defendant threatened the victim with a knife.

           This case is being investigated by the Metropolitan Police Department. It is being prosecuted by Assistant U.S. Attorney Jacqueline Yarbro of the Major Crimes Unit of the U.S. Attorney’s Office for the District of Columbia.

           A complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

            WASHINGTON – Luis Miguel Teixeira-Spencer, 31, Olatunji Dawodu, 36, both of South Florida, were arrested in Fort Lauderdale, Florida, after being indicted on Monday by a federal grand jury in the District of Columbia for illegal sales of opioids on the darknet.  The indictment charges the defendants with Conspiracy to Distribute More than 400 Grams of a Mixture and Substance Containing Fentanyl.  Additionally, Alex Ogando, 35, of Providence, Rhode Island, was also arrested February 23, 2021 and charged by complaint with Conspiracy to Distribute More than 400 Grams of a Mixture and Substance Containing Fentanyl.  All three defendants will have initial appearances before a federal magistrate judge today.

            The indictment alleges that, since early 2017, Spencer and Dawodu operated a vendor site that sold pills pressed with fentanyl on numerous darknet markets, including AlphaBay, Dream, Empire, and Wall Street, in exchange for bitcoin.  Spencer also used encrypted messaging services to communicate directly with customers and sold pills directly over messaging services.  Ogando was in communication with both Spencer and Dawodu as of the online drug trafficking conspiracy.  On several occasions, the defendants sold fentanyl pills that they shipped via the U.S. Postal Service to buyers in the District of Columbia.

             The FBI and the U.S. Postal Inspection Service executed multiple search warrants yesterday in South Florida and Rhode Island.  At the Rhode Island location, agents recovered over $350,000 in cash, approximately 2,000 grams of pills containing fentanyl, and packaging materials.  At the South Florida locations, agents recovered more than $12,000 in cash, approximately 1,400 grams of pills containing fentanyl, packaging material, and a firearm.

            “The use of sophisticated technology and virtual currency may raise unique challenges to investigating these cases, but this investigation demonstrates that law enforcement can nonetheless root out the sale of dangerous opioids on the darknet,” said Acting U.S. Attorney Michael Sherwin.  “We will not let the use of sophisticated cyber technology impair our ability to combat the problem of opioid abuse.”

            “The three co-conspirators charged today exploited those suffering through an opioid epidemic to enrich themselves,” said James A. Dawson, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division. “This case demonstrates the FBI’s commitment to working with our law enforcement partners around the country to show these criminals and others like them that they can no longer hide behind the dark web to operate their online, illicit marketplaces, because we will infiltrate their networks, shut them down, and bring them to justice, no matter where they are.”

            “The U.S. Postal Inspection Service is committed to shining a light on those trafficking fentanyl and other illicit drugs on the dark web”, said Inspector in Charge Peter R. Rendina, U.S. Postal Inspection Service, Washington Division.  “Postal Inspectors, armed with advanced technology, digital forensics and data analytics, continue to work closely with law enforcement partners to thwart those using the U.S. Mail in furtherance of their crimes.”

            “As the opioid epidemic continues, IRS-CI will continue to lend our cyber expertise in tracing virtual currency transactions and dissolving the perceived anonymity of the dark web,” said Kelly R. Jackson, IRS-CI Special Agent in Charge.  “We look forward to continuing to work with our law enforcement partners to get these dangerous drugs and those who are trafficking them off our streets.”

            “The tragedy of the opioid crisis continues to be fueled by those who use every method available, including the Dark Web, to sell their illicit pills to those with substance abuse addictions,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations Metro Washington Field Office. “The FDA will continue to work with its law enforcement partners to protect the public health by disrupting and dismantling counterfeit prescription drug manufacturing and distribution.”

            The charges in the indictment and complaint are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.   The charges carry a mandatory 10 years up to life in federal prison.

            The FBI’s Hi-Tech Opioid Task Force, IRS-CI Cyber Crimes Unit (Washington, D.C.), and the U.S. Food and Drug Administration’s Office of Criminal Investigations investigated this case. The Hi-Tech Opioid Task Force is composed of FBI agents and task force partners, including special agents and officers of the Food and Drug Administration’s Office of Criminal Investigations, the Drug Enforcement Agency, U.S. Postal Inspection Service and detectives from local assisting police agencies. The task force is charged with identifying and investigating the most egregious Dark Web marketplaces, and the vendors operating on the marketplaces who are engaged in the illegal acquisition and distribution of controlled substances, to include fentanyl, methamphetamine, and other opioids. The case is being handled by Assistant U.S. Attorneys Laura Crane and Rachel Fletcher of the U.S. Attorney’s Office for the District of Columbia, Paralegal Specialist Katie Thomas, and Legal Assistant Peter Gaboton.  Additional assistance has been provided by the United States Attorney’s Offices for the District of Rhode Island and for the Southern District of Florida (Fort Lauderdale and Miami offices) and the FBI’s Miami and Boston Field Offices.

            WASHINGTON — Christopher Parris, a 39-year-old Atlanta, Georgia resident, was arrested today and charged in federal court in the District of Columbia with fraud for attempting to sell millions of nonexistent respirator masks to the Department of Veterans Affairs in exchange for large upfront payments, the Justice Department announced.

            The criminal complaint charges Parris with wire fraud.  It alleges that he made and caused to be made a series of fraudulent misrepresentations in an attempt to secure orders from the Department of Veterans Affairs for 125 million face masks and other personal protective equipment (PPE) that would have totaled over $750 million.  For example, the complaint alleges that Parris promised that he could obtain millions of genuine 3M masks from domestic factories when he knew that fulfilling the orders would not be possible.  Parris also allegedly made similar false representations to other entities in an effort to enter into other fraudulent agreements to sell PPE to state governments.

            “We will vigorously pursue fraudsters who exploit the COVID-19 pandemic to make money,” said Attorney General William Barr.  “As this case demonstrates, even beyond the typical costs associated with unlawful behavior, COVID-19 scams divert government time and resources and risk preventing front-line responders and consumers from obtaining the equipment they need to combat this pandemic.  The Department of Justice will not tolerate this conduct, especially when it involves this kind of egregious attempt to target and defraud our nation’s treasures – our veterans.”

            After arrest, Parris appeared before Chief United States Magistrate Judge Alan J. Baverman in the United States District Court for the Northern District of Georgia, where he was ordered detained.  Parris will be extradited to the District of Columbia.

            “During this time of crisis, fraud or attempted fraud impacting services for veterans, who have selflessly served this country, is unconscionable,” said U.S. Attorney Timothy J. Shea for the District of Columbia.  “My office will devote whatever resources are necessary to stop scams aimed at exploiting Americans during this unprecedented pandemic.”

            “We are committed to protecting the integrity of taxpayer funds and ensuring the delivery of medical supplies necessary to provide quality healthcare to our nation’s veterans, and any attempt to exploit the current global COVID-19 pandemic for personal gain will be dealt with swiftly,” said Inspector General Michael J. Missal for the Department of Veterans Affairs.  “Today’s charges are the direct result of the expeditious and tireless efforts of special agents of the Department of Veterans Affairs, Office of Inspector General, working in tandem with our law enforcement partners at the Department of Justice and Homeland Security Investigations.”

            “Homeland Security Investigations special agents have sworn an oath to protect the American public, particularly during this health crisis, from opportunistic individuals who seek to deliberately harm and deceive others for their own profit," said Special Agent in Charge Jere T. Miles, Homeland Security Investigations – New Orleans.  “Today, our special agents have shown their commitment to that promise.”

            A criminal complaint is an accusation by a federal law enforcement agent, and defendants are entitled to the presumption of innocence unless proven guilty.  Upon conviction for the wire fraud charge, the maximum statutory penalty is 20 years’ imprisonment and a $250,000 fine.

            The Department of Veterans Affairs, Office of the Inspector General and Homeland Security Investigations investigated the case.  Assistant U.S. Attorneys Peter Lallas and Zia Faruqui of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.  Trial Attorney Patrick Runkle of the Department of Justice’s Consumer Protection Branch and Assistant U.S. Attorneys Alison Prout and Theodore S. Hertzberg of the U.S. Attorney’s Office for the Northern District of Georgia provided substantial assistance.

            Information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the District of Columbia, visit its website at https://www.justice.gov/usao-dc.  

            The public is urged to report suspected fraud schemes related to COVID-19 (the Coronavirus) by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at disaster@leo.gov.

                Citizens and others who suspect fraud or other criminal wrongdoing related to the pandemic should report it to the COVID-19 Pandemic Fraud Hotline by phone at 202-252-7022 or by email at USADC.COVID19@usdoj.gov.

            WASHINGTON – Maricco Knight, 25, of Washington, D.C., was sentenced today to seven years in prison for acting as an accessory after the fact and obstructing justice for his role in assisting a man who was wanted for murder, U.S. Attorney Jessie K. Liu announced.

            Knight was found guilty by a jury of the charges in March 2018, following a trial in the Superior Court of the District of Columbia. He was sentenced by the Honorable Judith Bartnoff. Following his prison term, he will be placed on five years of supervised release.

            A co-defendant in the trial, Dominique Williams, 24, also of Washington, D.C., was found guilty of second-degree murder while armed, assault with a dangerous weapon, and related firearms offenses. He was sentenced on May 11, 2018, to 24 years in prison.

            According to the government’s evidence, on Sept. 19, 2015, shortly after 1 a.m., Williams, Knight and another man pulled over a Honda Accord in the 3200 block of 28th Street SE. Williams was in the rear passenger seat, Knight was in the front passenger seat, and the third man was driving. A short distance away from the Accord, gathered in an alley, were three men and an 11-year-old boy.  Williams had earlier disputes with persons who resided or sometimes gathered in the block, but none of those persons was among the group in the alley.

            After the Accord pulled over, Williams leaned out of the car and fired eight shots from a 9-millimeter handgun at the group.  One person was hit – Marcellus Green, 39. He was shot once and was declared dead about an hour later. The three people in the Accord drove off.

            Officers with the Metropolitan Police Department (MPD) were on the scene within a few minutes.  Witnesses gave the police a description of the Accord and its license plate number.  At about 1:40 a.m., an officer in a marked MPD cruiser spotted the Accord, still occupied by the three men, in a different neighborhood.  Before the officer could even activate his emergency equipment, the Accord began to drive off at a high rate of speed.  After a 20-minute chase, during which the 9-millimeter handgun was tossed out, the Accord crashed and all three occupants fled on foot. Within two minutes, the driver and Knight were stopped.

            Williams, however, got away. An arrest warrant was issued for him three months later and he was ultimately apprehended on July 20, 2016, at the residence of Knight’s girlfriend.  During the search for Williams, according to the government’s evidence, Knight assisted in helping Williams hide out despite the fact that he was told repeatedly by law enforcement that Williams was wanted for the murder.

            In announcing the sentence, U.S. Attorney Liu and Chief Newsham commended the work of those who investigated the case from the Metropolitan Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Michael Ambrosino, Special Counsel for DNA and Forensic Evidence Litigation; Forensic Operation/Program Specialist Benjamin Kagan-Guthrie; Litigation Technology Specialist Leif Hickling; Paralegal Specialist Alesha Matthews; Investigative Analyst Zachary McMenamin; former Supervisory Victim/Witness Services Coordinator David Foster; Victim/Witness Security Specialist Lesley Slade; Victim/Witness Advocate Marcia Rinker, and Interns Korey Johnson and Shani Brown.

            Finally, they commended the work of Assistant U.S. Attorney Michael Liebman, who investigated and prosecuted the case, and Assistant U.S. Attorney Ahmed Baset, who prosecuted the case.

 

            WASHINGTON – James Kyle Bell, 44, of Las Vegas, Nevada, entered a guilty plea today to one count of wire fraud in federal court in the District of Columbia.

            As he admitted in entering his guilty plea, Bell created two political action committees (PACs) which operated during the 2020 election cycle: the Keep America Great Committee (“KAGC”) , which purportedly supported the re-election of Donald Trump, and the Best Days Lie Ahead Committee (“BDLAC”), which purportedly supported the candidacy of Joe Biden.  Both PACs registered with the Federal Election Commission (“FEC”) as Section 527 independent expenditure-only committees.  Such committees are often referred to as “527 Groups” or “Super PACs.” 

            Between January 2020 and October 2020, Bell’s PACs sent solicitations nationwide to more than 40,000 recipients.  The solicitations promised that individual donations would be “5x matched” by Bell’s PACs.  The solicitations also replicated the look and feel of marketing materials used by the presidential campaigns including official logos and slogans.  Bell also set up websites to solicit donations with names like “keepamericagreatcommittee.com,” “trump2020maga.com,” and “bestdayslieaheadcommittee.com.”   KAGC and BDLAC received no less than $346,000 in contributions from individuals and other groups during the months before the 2020 election.  However, none of the individual donations was ever “5x matched” by Bell or anyone else.  And Bell made a series of false filings with the FEC in which Bell claimed that his PACs had made expenditures in support of both presidential campaigns.

            Court documents also reflect that during the same time period, Bell applied for more than $1.6 million in loans from the Small Business Administration’s Paycheck Protection Program (“PPP”) on behalf of five shell companies that Bell owned and controlled.  For example, one of Bell’s companies named “Echo Three LLC,” a company registered in Nevada with no employees and no payroll, received a PPP loan of $485,000 based on Bell’s false statements to the government that the company had 83 employees working at Bell’s private residence.  In another instance, Bell obtained a PPP loan in the amount of $492,000 for a company he owned and controlled named “Myson Rules LLC” which had no employees, no payroll, no business operations, and no active business license in the State of Nevada.  Bell submitted fabricated tax documents and other company records in support of all five PPP loan applications.

            Bell diverted almost all of the funds from PAC donors and the taxpayer-supported PPP loans to bank accounts where they could be used for Bell’s personal benefit, commingling the proceeds of the fraud and further violating federal campaign finance laws with exacting record keeping for PACs.  According to court papers, the government has located and seized $519,000 of Bell’s criminal proceeds.  Bell’s plea agreement requires that Bell make full restitution to his victims and agree to the entry of a money judgement of $862,000 against him.

     “The First Amendment protects everyone’s right to express and promote their viewpoints by giving to political committees,” said Acting U.S. Attorney Channing D. Phillips.  “My Office and the Justice Department are committed to protecting this important right—citizens are entitled to have confidence that their political contributions will be spent to support the candidates and causes for which they are intended.”  Phillips continued, “We are equally committed to protecting from fraud the Paycheck Protection Program and other government programs aimed at easing the crippling economic effects of the pandemic.  Today’s guilty plea sends a clear message that my Office and the Justice Department will not tolerate fraudsters who line their pockets by exploiting the political goodwill of our citizens or the benefits afforded under government programs.”

            "Bell admitted to creating two political action committees that purported to support two different candidates, but instead he used the donations he received for his own personal use,” said James A. Dawson, Special Agent in Charge of the FBI’s Washington Field Office, Criminal Division. “Not only did Bell defraud donors, but he also defrauded the Small Business Administration’s Paycheck Protection Program, designed to help Americans during the pandemic, and used those funds to line his own pockets and private political accounts. The FBI is committed to investigating those who attempt to defraud the American public and government programs.”

            Bell pleaded guilty before United States District Judge John D. Bates to one count of wire fraud.  The maximum sentence for that offense is twenty years of incarceration and a fine of not more than $250,000 or twice the pecuniary gain or loss from the offense.  Sentencing in the case is scheduled for October 8.

            This matter is being investigated by the Washington Field Office of the Federal Bureau of Investigation and the U.S. Small Business Administration, Office of the Inspector General.  Assistant United States Attorneys John W. Borchert of the Fraud Section and Elizabeth Aloi of the Public Corruption and Civil Rights Section are prosecuting the case.

            WASHINGTON – Christopher A. Parris, 41, formerly of Rochester, New York, and currently of Lawrenceville, Georgia, pleaded guilty today to conspiracy to commit mail fraud related to a Ponzi scheme, as well as to wire fraud involving the fraudulent sale of purported N95 masks during the pandemic.

            “The fraud schemes at issue here, including the purported sales of personal protective equipment that the defendant could not actually provide, are particularly egregious,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is committed to prosecuting anyone who would try to profit through this kind of conduct.”

            “Preying on companies and the Department of Veterans Affairs as they sought to protect their employees and patients from this pandemic is beyond the pale,” said Acting U.S. Attorney Channing D. Phillips for the District of Columbia. “The department and our law enforcement partners will catch and stop those who take advantage of public health emergencies to perpetrate such frauds.”

            “Defendant Parris, together with his co-defendant Perry Santillo, bilked millions of dollars from unsuspecting investors in their Ponzi scheme,” said U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “Their web of deceit spread far and wide as they purchased established investment advisor or broker businesses from across the country in order to gain access to new victims. This office remains committed to working with all of our partners to identify and bring to justice those who seek to enrich themselves by defrauding others.”

            “Financial frauds are grounded in greed, so it's no surprise that when multiple people are behind a single scheme the greed runs deeper and the damage hits harder,” said Special Agent-in-Charge Stephen Belongia of the Buffalo Office of the FBI. “The only guarantee in a Ponzi scheme is that it will fall short, and the founders who contrived them will too.”  

            “The urgent need to protect veterans and VA health care workers during this fast-moving pandemic required the Department of Veterans Affairs to rapidly purchase personal protective equipment” said Inspector General Michael J. Missal of the Department of Veterans Affairs (VA). “Working with our law enforcement partners, the VA Office of Inspector General (OIG) stopped a criminal who was attempting to profit from this horrible crisis and prevented the government and taxpayers from being defrauded of hundreds of millions of dollars. The VA OIG will continue to work zealously to ensure schemes like this are uncovered, investigated and prosecuted to the fullest extent of the law.”

            “Since the onset of the pandemic, HSI quickly adapted to investigate the increasing and evolving threat posed by COVID-19-related fraud and criminal activity,” said Acting Special Agent in Charge Jack P. Staton of Homeland Security Investigations (HSI), New Orleans Field Office. “This guilty plea is a testament to the commitment we have, along with our law enforcement partners, to protecting the American public in times of crisis.”

The Ponzi Scheme

            Between January 2011 and June 2018, Parris conspired with co-defendant Perry Santillo and others to obtain money through an investment fraud, commonly known as a Ponzi scheme. Specifically, in 2007, Parris and Santillo, as equal partners, formed a business known as Lucian Development in Rochester. Prior to approximately July 2007, Lucian Development raised millions of dollars from investors in Rochester, and elsewhere, by soliciting investments for City Capital Corporation, a business operated by Ephren Taylor. In July 2007, Parris and Santillo were advised by Ephren Taylor that their investors’ money had been lost. In response, in August 2007, Parris and Santillo agreed to acquire the assets and debts of City Capital Corporation. The acquisition proved financially ruinous, with the amount of the acquired debt far exceeding the value of the acquired assets. Taylor was later prosecuted and convicted of operating a Ponzi scheme.

            Subsequently, Parris and Santillo chose not to disclose the truth to investors that their money, entrusted to Lucian Development for investment in City Capital Corporation, was gone. Instead, Parris and Santillo continued to solicit ever-increasing amounts of money from new investors in an unsuccessful attempt to recoup the losses. In order to find potential investors to solicit and defraud, Parris and Santillo purchased businesses from established investment advisors or brokers who were looking to exit their businesses. Between approximately 2008 and September 2017, Parris and Santillo, using money obtained from prior investors, purchased the businesses of at least 15 investment advisors or brokers, located in Tennessee, Ohio, Minnesota, Nevada, California (five businesses), Florida, South Carolina (two businesses), Texas, Pennsylvania, Maryland and Indiana.

            The investment offerings pitched by Parris and Santillo consisted principally of unsecured promissory notes and preferred stock issued by various entities controlled by Parris and Santillo. Potential investors were offered an apparent array of investment options to create the illusion of a diversified investment portfolio. Those investment options included products issued by purported issuers such as First Nationle Solutions (FNS), Percipience Global Corporation, United RL Capital Services, Boyles America, Middlebury Development Corporation and NexMedical Solutions, among others. None of these issuers had substantial bona fide business operations or used investor money in the manner and for the purposes represented to investors. To the extent that an issuer may have had some minor legitimate business activities, it was not profitable, and insufficient revenues were generated to pay investors any returns (let alone return the principal amounts of their investments).

            Over the years, to keep the Ponzi scheme from being detected, a substantial portion of incoming new investor monies were depleted by making promised interest and other payments to earlier investors. Most of the rest of incoming investor money was used by Parris, Santillo and other co-conspirators to finance lavish lifestyles of the conspirators, their families and associates; to expand the scheme by purchasing investment advisor/brokerage businesses to obtain access to fresh investors; and to pay operating expenses – salaries for a sales force and administrative staff, office rents and related expenses, housing for employees, and interest on loans – all of which were used to keep the scheme going and maintain  façade of legitimate business operations.

            Very little investor money was deployed in productive investments, and when so deployed, the investments yielded meager income and were not profitable, or failed altogether. The Ponzi scheme was headquartered and based out of locations in Rochester, with a number of satellite offices around the country. Administrative and banking functions were largely performed out of Rochester. The conspiracy employed a variety of salespeople, including Parris and Santillo, who traveled around the country to meet with and solicit new investors.

            Between January 2012 and June 19, 2018, Parris and Santillo obtained at least $115.5 million from approximately 1,000 investors. By the time the scheme collapsed in late-2017/early 2018, Parris and Santillo, doing business through an array of corporate entities, had returned approximately $44.8 million to investors as part of their scheme, but continued to owe investors approximately $70.7 million in principal.

            Among the Rochester area victims of the Ponzi scheme were the following: a resident of Webster, New York, who held a total asset value of $94,341.89 with a fictitious company known as First Nationle Solutions (FNS), which, as of Dec. 31, 2017, was in fact worthless or close to worthless; and a  resident of Victor, New York, and his wife, who invested approximately $221,758.67 with FNS and Middlebury Development. The couple received three payments of $2,500 but lost approximately $214,258.67.

            Parris and Santillo controlled hundreds of different business bank accounts opened under numerous different business names at various financial institutions, including but not limited to Bank of America, Citizens Bank, Genesee Regional Bank and ESL Federal Credit Union. Santillo and Parris directed and authorized the transactions that occurred in the accounts, including deposits, withdrawals, check writing and funds transfers. The various bank accounts were used to transfer money from one account to another. Incoming investor money was routinely transferred through several accounts before the funds were finally spent on whatever purpose Parris and/or Santillo authorized. By moving investors’ funds through various accounts in various entity names, Parris and Santillo were able to conceal and obscure the fact that new investor money was being used to repay earlier investors, finance the operations of the Ponzi scheme, and fund their lifestyles.

            Santillo was previously convicted and is awaiting sentencing.

The COVID-19 Fraud Scheme

            Parris also pleaded guilty in a case originally charged in the U.S. District Court for the District of Columbia to defrauding the U.S. Department of Veterans’ Affairs (VA), as well as at least eight other victim companies, in a scheme involving personal protection equipment (PPE). Between February and April 10, 2020, the defendant, as the owner and operator of Encore Health Group, a company based in Atlanta, that purported to broker medical equipment, offered to sell scarce PPE, including 3M-brand N95 respirator masks, to various medical supply companies and governmental entities. In these proposals, Parris knowingly misrepresented his access to, and ability to obtain and deliver on time, vast quantities of 3M N95 masks and other PPE. The defendant falsely represented that he was able to obtain 3M N95 masks directly from authorized sources in the United States, when in fact, he had no ready access to 3M factories or 3M N95 masks or other PPE, no proven source of supply, and no track record of procuring and delivering such items.

            For example, in March 2021, Parris offered to sell the VA 125 million 3M N95 masks at a cost of $6.45 per mask. In this process, the defendant attempted to obtain an upfront payment of $3.075 million from the VA, even though he knew at the time that he had no access to the promised masks or present ability to deliver the promised masks.

            As part of his guilty plea, Parris admitted that, in addition to attempting to defraud the VA, he actually obtained upfront payments totaling approximately $7.4 million from at least eight clients for 3M N95 masks that he knew he had no access to or present ability to obtain or deliver on time. Parris also admitted that the proceeds of the scheme totaled approximately $6,218,525. In total, Parris sought orders in excess of $65 million for the non-existent PPE equipment.

**

            Parris is scheduled to be sentenced on Dec. 8 before U.S. District Judge Frank P. Geraci Jr. He faces a maximum penalty of 20 years in prison for conspiracy regarding the Ponzi scheme, 30 years in prison for wire fraud in connection to a presidentially-declared emergency, and 10 years in prison for committing the offense originally charged in the District of Columbia while on release from the Western District of New York.

            The plea is the result of an investigation by the U.S. Postal Inspection Service, under the direction of Acting Inspector-in-Charge Joshua W. McCallister of the Boston Division; the FBI, Buffalo Division, under the direction of Special Agent-in-Charge Stephen Belongia, the IRS, Criminal Investigation Division, under the direction of Thomas Fattorusso, Acting Special Agent-in-Charge; the U.S. Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud, under the direction of Nikitas Splagounias, Acting Special Agent-in-Charge, New York Region, the New York State Department of Financial Services, under the direction of Superintendent Linda A. Lacewell; the Securities and Exchange Commission; the VA OIG, under the direction of Michael J. Missal, Inspector General, and HSI, under the direction of Acting Special Agent in Charge Jack P. Staton of the New Orleans Field Office.

            Assistant U.S. Attorney John J. Field is handling the prosecution in the Western District of New York, and Trial Attorney Patrick Runkle of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Peter Lallas are handling the prosecution in the District of Columbia.

            On May 17, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

            Anyone with information about allegations of fraud related to COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

 

            WASHINGTON – A former employee of the District of Columbia Department of Human Resources pled guilty today to a federal bribery charge for accepting more than $140,000 in bribes from a consultant and independent contractor who did business with the government.

            The announcement was made by U.S. Attorney Jessie K. Liu, Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, and District of Columbia Inspector General Daniel W. Lucas.

            Latasha Moore, 38, of Washington, D.C., pled guilty before the Honorable Dabney L. Friedrich in the U.S. District Court for the District of Columbia. The charge of bribery carries a statutory maximum of 15 years in prison and potential financial penalties. Under federal sentencing guidelines, Moore faces a possible range of 70 to 87 months in prison and a fine of up to $250,000. A sentencing date has not yet been set.

            According to a statement of offense submitted at the plea hearing, Moore started work in 2002 for the D.C. Department of Human Resources; in 2012, she was promoted to the position of resource allocation analyst. In that role, among other duties, she was the main point of contact for a government contractor that had agreements with the District of Columbia Department of Human Resources to provide organizational skills training courses and human resources consulting to various D.C. government agencies.

            As noted in the statement of offense, Moore and a consultant employed by the company engaged in a scheme in which Moore agreed to protect the government contracts held by the company and ensure that no complaints about its performance reached others in the District of Columbia government. The scheme began in approximately July 2014 and ran through August 2017. In return for her actions, according to the statement of offense, Moore accepted more than $140,000 from the consultant in checks and a PayPal money transfer.

            According to the statement of offense, Moore had suspicions about more than $1 million in invoices that the consultant submitted from March 2015 through June 2017.  Nonetheless, in return for the money the consultant paid her, Moore advised other D.C. government officials to approve the invoices for payment. As the scheme continued, according to the statement of offense, the company discovered that the consultant was acting on his own and retaining the profits for himself.  Although Moore knew of the company’s concerns, she did not relay them to her supervisors and continued to advise other government officials to approve the consultant’s invoices.

            In announcing the plea, U.S. Attorney Liu, Assistant Director in Charge McNamara, and Inspector General Lucas commended the work of those who investigated the case from the FBI’s Washington Field Office and Office of the Inspector General of the District of Columbia. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Michael Marando, who is prosecuting the matter.

            WASHINGTON - Anthony Williams, 23, of Washington, D.C., was sentenced today to a six-year prison term after earlier pleading guilty to robbing a man at gunpoint in Northeast Washington, U.S. Attorney Jessie K. Liu announced.

 

            Williams pled guilty in July 2017, in the Superior Court of the District of Columbia, to a charge of armed robbery. He was sentenced by the Honorable Danya A. Dayson. Upon completion of his prison term, he will be placed on five years of supervised release.

 

            According to the government’s evidence, in the early evening of Jan. 4, 2017, Williams and an accomplice approached the victim, who was walking in the 2300 block of Lincoln Road NE. Williams pointed a firearm at the victim’s head and said, “If you want your life, don’t move.”  The victim raised his hands above his head, but Williams nonetheless struck him on the right side of his face with either the handgun or a fist.  At the direction of Williams, the accomplice removed items from the victim’s pockets, including his cellphone and wallet, containing cash and credit cards. Williams and his accomplice then fled the area. 

 

            Subsequent investigation determined that Williams had been at the location of the armed robbery.  In addition, the victim later reported that one of his stolen credit cards had been used fraudulently at fast-food restaurants and 7-Eleven stores, and the 7-Eleven video surveillance footage depicted an individual matching Williams’s description.

 

            On Jan. 9, 2017, two witnesses identified Williams as the person recorded in the 7-Eleven video surveillance footage.  In addition, one of the witnesses stated that Williams had a dark-colored firearm.  That same day, the Metropolitan Police Department (MPD) responded to a residence in the 1300 block of W Street SE in an attempt to locate Williams. Police found him in one of the bedrooms, underneath a bed.  In the same room, police also located a green jacket with fur around the collar that appeared to be the same jacket worn by the person in the 7-Eleven video.  In the pocket of the green jacket, law enforcement located a fully loaded Glock .45-caliber magazine that Williams acknowledged belonged to him. Williams was arrested and has been in custody ever since.

 

            In announcing the sentence, U.S. Attorney Liu commended the work of those who investigated the case from the Metropolitan Police Department. She also expressed appreciation for the assistance provided by former Assistant U.S. Attorney Vanessa Goodwin. Finally, she commended the efforts of Assistant U.S. Attorney Vivien Cockburn, who prosecuted the case.

Fraud Scheme Involved Multiple Law Firms

            WASHINGTON – An indictment was unsealed today charging four people, including two lawyers, with conspiring to defraud thousands of distressed homeowners who thought they were hiring a legal firm to help them avoid foreclosure. The defendants, some of whom were licensed to practice law in Washington, D.C., New Jersey, and Florida, allegedly reaped millions of dollars in ill-gotten gains.

            The indictment charges: David Maresca, 48, of Manassas, Virginia, Scott Marinelli, 51, of Mountainside, New Jersey, Sam Babbs, III, 41, of Orlando, Florida, and Terrylle Blackstone, 35, of Woodbridge, Virginia, with conspiracy to commit wire fraud and mail fraud for charging clients on the false and fraudulent promise to help them avoid foreclosure but never providing any of those legal services. The indictment further charges Maresca, Marinelli, and Blackstone with five counts of mail fraud; Maresca, Babbs, and Blackstone with three counts of wire fraud and two counts of mail fraud; and Maresca with five counts of monetary transactions in criminally-derived property, and two counts of falsification of bankruptcy records. Maresca was arrested today and made an initial appearance in Washington, D.C.; Marinelli was arrested today and made an initial appearance in New Jersey.

            The charges were announced by U.S. Attorney Matthew M. Graves, Special Agent in Charge Wayne A. Jacobs, of the FBI Washington Field Office Criminal and Cyber Division, and Acting Special Agent in Charge Kareem A. Carter of the Internal Revenue Service – Criminal Investigation (“IRS-CI”) Washington, D.C. Field Office.

            Maresca formed Synergy Law LLC (“Synergy”), in Washington DC, in 2016, and Themis Law PLLC (“Themis”) in  2019. Marinelli, who was licensed in New Jersey, owned 10 percent of Synergy; Babbs, who was licensed in Florida and D.C., owned his own firm – Babbs Law Firm P.L. (“Babbs”) - and 10 percent of Themis. Blackstone worked for all three firms.

            According to the indictment, the scheme involved marketing Synergy Law and Themis Law through telephone, television, and Internet advertising which told homeowners that attorneys could help them avoid foreclosure. The defendants, through the law firms, operated  call centers, where workers used scripts during calls with homeowners falsely promising that an attorney would review the homeowner's case file; that this attorney knew their lender's “internal guidelines,” for a “mortgage resolution”; and that an assigned “legal team” would contact the homeowner’s lender to negotiate a resolution.

            The conspirators knew these representations were false and fraudulent. Synergy Law and Themis Law never operated a “national law firm,” and never provided legal services to homeowners. Neither Synergy Law nor Themis Law had attorneys review homeowner files, and neither Synergy Law nor Themis Law had attorneys contact a client’s lender to discuss a mortgage resolution. The homeowners signed agreements in which the law firms promised to provide “legal representation,” “attorney services” and “legal services” to the homeowner-client. Synergy Law required homeowner-clients to pay an initial retainer amount (often between $995 and $1,750), followed by a monthly recurring amount (often between $595 and $1,200), for as long as Synergy Law represented the homeowner. Once victim funds were in that account, Maresca, Marinelli, and Blackstone used the funds for their personal benefit, and continued to collect monthly payments from the clients. When the clients faced imminent foreclosure, Synergy Law provided non-legal bankruptcy petition preparation services and directed clients to file pro se bankruptcy petitions to stop foreclosure. Synergy Law directed clients not to disclose that the clients had worked with Synergy Law to prepare their bankruptcy petition. Themis Law clients, who were considering filing for bankruptcy to save their homes, were referred to Babbs Law where they signed a new retainer agreement and paid additional fees.

            When bankruptcy judges, Synergy Law clients, and the U.S. Trustee's Program raised concerns about Synergy Law's practices in bankruptcy matters, Blackstone attended court hearings on behalf of Synergy Law and made false statements to the court about Synergy Law's operations. When Marinelli's law license was suspended in New Jersey in 2017, and the District of Columbia in 2018, Maresca, Marinelli, and Blackstone continued to operate Synergy Law and collect monthly payments purportedly for legal services.

            Maresca is also charged with falsely filing for bankruptcy on behalf of Synergy Law.  According to the indictment, in answering a question on the bankruptcy forms about financial affairs, which required Synergy Law LLC to list transfers of money or other property that was not in the ordinary course of business, Maresca falsely stated “None,” when he knew he had withdrawn S315,083.42 from Synergy Law accounts to purchase his personal residence.

            The indictment includes a notice of forfeiture for all illegally derived proceeds from the fraud scheme.

            The U.S. Attorney’s Office and the FBI urge anyone who did business with these law firms, and who think they were defrauded, to visit https://www.justice.gov/usao-dc/mortgage-fraud and/or call the FBI at 1-800-CALL-FBI.

            This case was investigated by the FBI Washington Field Office and the Washington, D.C. Field Office of the Internal Revenue Service – Criminal Investigations.

            It is being prosecuted by Assistant United States Attorney John Borchert.

            An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

            WASHINGTON – The Justice Department today filed a civil forfeiture complaint detailing two hacks of virtual currency exchanges by North Korean actors.  These actors stole millions of dollars’ worth of cryptocurrency and ultimately laundered the funds through Chinese over-the-counter (OTC) cryptocurrency traders.  The complaint follows related criminal and civil actions announced in March 2020 pertaining to the theft of $250 million in cryptocurrency through other exchange hacks by North Korean actors.

            “As part of our commitment to safeguarding national security, this office has been at the forefront of targeting North Korea’s criminal attacks on the financial system,” said Acting U.S. Attorney Michael R. Sherwin of the District of Columbia.  “This complaint reveals the incredible skill of our Cryptocurrency Strike Force in tracing and seizing virtual currency, which criminals previously thought to be impossible.”

            “Today’s action publicly exposes the ongoing connections between North Korea’s cyber-hacking program and a Chinese cryptocurrency money laundering network,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “This case underscores the department’s ongoing commitment to counter the threat presented by North Korean cyber hackers by exposing their criminal networks and tracing and seizing their ill-gotten gains.”

            “Today, prosecutors and investigators have once again exemplified our commitment to attribute national security cyber threats, to impose costs on these actors, and bring some measure of relief to victims of malicious cyber activities,” said Assistant Attorney General John C. Demers of the Justice Department’s National Security Division.  “Although North Korea is unlikely to stop trying to pillage the international financial sector to fund a failed economic and political regime, actions like those today send a powerful message to the private sector and foreign governments regarding the benefits of working with us to counter this threat.”

            “Despite the highly sophisticated laundering techniques used, IRS-CI’s Cybercrimes Unit was able to successfully trace stolen funds directly back to North Korean actors,” said Don Fort, Chief of IRS Criminal Investigation (IRS-CI). “IRS-CI will continue to collaborate with its law enforcement partners to combat foreign and domestic operations that threaten the United States financial system and national security.”

            “FBI efforts to stop the flow of threat finance around the world are central to our strategy to address transnational crime,” said Assistant Director Calvin A. Shivers of the FBI’s Criminal Investigative Division.  “This strategy is strengthened by the skills and expertise we continue to develop in virtual asset investigations such as this, which enable the FBI and our partners to identify and seize illicit assets.”

            “As North Korea becomes bolder and more desperate in their efforts to steal money using sophisticated money laundering techniques, HSI will continue to apply pressure by exposing their fraudulent transactions,” said Special Agent in Charge Steven Cagen of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Denver.  “We are committed to safeguarding the interest of the United States against the criminal elements in North Korea to protect the integrity of the cyber financial system.”

            “At U.S. Cyber Command, we leverage a persistent engagement approach to challenge our adversaries’ actions in cyberspace,” said Brigadier General Joe Hartman, Commander of the Cyber National Mission Force. “This includes disrupting North Korean efforts to illicitly generate revenue. Department of Defense cyber operations do not occur in isolation. Persistent engagement includes acting through cyber-enabled operations as much as it does sharing information with our interagency partners to do the same.”

            "Today’s complaint demonstrates that North Korean actors cannot hide their crimes within the anonymity of the internet. International cryptocurrency laundering schemes undermine the integrity of our financial systems at a global level, and we will use every tool in our arsenal to investigate and disrupt these crimes," said Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Field Office.  “The FBI will continue to impose risks and consequences on criminals who seek to undermine our national security interests.”

            The forfeiture complaint filed today details two related hacks of virtual currency exchanges.

            As alleged in the complaint, in July 2019, a virtual currency exchange was hacked by an actor tied to North Korea.  The hacker allegedly stole over $272,000 worth of alternative cryptocurrencies and tokens, including Proton Tokens, PlayGame tokens, and IHT Real Estate Protocol tokens.  Over the subsequent months, the funds were laundered through several intermediary addresses and other virtual currency exchanges.  In many instances, the actor converted the cryptocurrency into BTC, Tether, or other forms of cryptocurrency – a process known as “chain hopping” – in order to obfuscate the transaction path.  As detailed in the pleadings, law enforcement was nonetheless able to trace the funds, despite the sophisticated laundering techniques used.

            As also alleged in the pleadings, in September 2019, a U.S.-based company was hacked in a related incident.  The North Korea-associated hacker gained access to the company’s virtual currency wallets, funds held by the company on other platforms, and funds held by the company’s partners.  The hacker stole nearly $2.5 million and laundered it through over 100 accounts at another virtual currency exchange.

            The funds from both of the above hacks, as well as hacks previously detailed in a March 2020 forfeiture action (1:20-cv-00606-TJK), were all allegedly laundered by the same group of Chinese OTC actors.  The infrastructure and communication accounts used to further the intrusions and fund transfers were also tied to North Korea.

            The claims made in this complaint are only allegations and do not constitute a determination of liability.  The burden to prove forfeitability in a civil forfeiture proceeding is upon the government. 

            The investigation was conducted by IRS-CI’s Washington, D.C. Cyber Crimes Unit, the FBI’s Chicago and Atlanta Field Offices, and HSI’s Colorado Springs Office with additional support from the FBI’s San Francisco Field Office.  Assistant U.S. Attorneys Zia M. Faruqui, Jessi Camille Brooks, and Christopher Brown, with assistance from Supervisory Paralegal Specialist Elizabeth Swienc and Legal Assistant Jessica McCormick, Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section, and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

            Support to this effort was provided by FBI’s San Francisco Field Office and the U.S. Attorney’s Office of the Northern District of Georgia.

            Support to this effort was also provided by United States Cyber Command.  More information about the command’s efforts to combat North Korean and other malware activity can be found on Twitter and VirusTotal.

            WASHINGTON – KaShaun Perkins, 43, of Upper Marlboro, Md., pled guilty today to the federal charge of wire fraud for embezzling from his employer, causing a loss in excess of $275,000, announced U.S. Attorney Channing D. Phillips.

 

            Perkins, who pled guilty in the U.S. District Court for the District of Columbia, is to be sentenced on April 21, 2017 by the Honorable Christopher R. Cooper. Under the advisory federal sentencing guidelines, he faces a possible prison sentence of 21 to 27 months. Perkins also agreed to pay $249,096 in restitution, and a forfeiture money judgment in the same amount.

 

            According to a statement of the offense, signed by the defendant as well as the government, Perkins worked as a payroll specialist from December 2014 to July 2015 at a global consulting firm. As a payroll specialist, he managed external payroll provider services in order to ensure salaries were accurately and timely processed for payments. Perkins also updated the payroll and human resources information systems with bank account numbers, Social Security numbers, addresses, and names of employees and maintained these employee records.

 

            From January to July 2015, according to the statement of offense, Perkins caused his employer to pay out approximately $275,000 in bogus salary and tax withholding payments for “ghost” employees. Perkins altered a terminated employee’s payroll profile, repeatedly changing entries such as name, Social Security number, bank account number, address, and salary payments. In fact, none of the altered data corresponded to an actual employee. Through these changes to the payroll system, Perkins caused the unauthorized salary payments to be directly deposited into accounts in his name, accounts with his joint ownership, and accounts under his control. By directing the payroll provider service to make these payments, Perkins obtained “salary” payments of “ghost” employees totaling $249,096. The employer paid an additional $26,092 in tax withholdings, for a total loss of $275,188.

 

            In announcing the plea, U.S. Attorney Phillips expressed appreciation for the work performed by Forensic Accountant Jean Luc Guerrier of the Fraud and Public Corruption Section of the U.S. Attorney’s Office, as well as Paralegal Specialist Christopher Toms, Assistant U.S. Attorney Diane Lucas, who assisted with forfeiture issues, and Assistant U.S. Attorney Virginia Cheatham, who is prosecuting the case.

            WASHINGTON – Quaysa Flumo, 35, of Washington, D.C., was sentenced today to 234 months in prison and Emmanuel Sumo, 29, of Takoma Park, Md., was sentenced to 214 months for a string of armed robberies that struck a series of gas stations, liquor stores, convenience stores, and restaurants in the Washington, D.C. metropolitan area, all within a four-week period in 2018.

            The announcement was made by U.S. Attorney Matthew M. Graves; FBI Special Agent in Charge Wayne A. Jacobs, of the Washington Field Office’s Criminal and Cyber Division, Acting Chief Pamela Smith, of the Metropolitan Police Department (MPD). Chief Marcus G. Jones, of the Montgomery County, Md., Police Department, and Chief Antonio DeVaul, of the Takoma Park, Md., Police Department.

            According to the government’s evidence, Flumo and Sumo were members of a trio - which included Enyinna “Reggie” Onyewu, 31, of Silver Spring, Md. – and were found guilty by a jury in U.S. District Court on March 28, 2022, of federal conspiracy, robbery, and (for Flumo and Sumo) related weapons charges. The government’s evidence showed that Onyewu took part in five of the robberies; Sumo in seven of the robberies; and Flumo in all 10 of the robberies.

            Throughout January 2018, the defendants, working together, robbed a series of gas stations, liquor stores, convenience stores, and restaurants in the Washington, D.C. metropolitan area. In each of the robberies, the defendants were armed with a .45 caliber handgun. They wore masks and gloves to avoid being identified. During several robberies, they physically assaulted store employees and put the gun directly to the heads of their victims. The robberies took place at various hours, including some in broad daylight. The victims were left shaken and shocked by the incidents. Fortunately, none of them sustained serious physical injuries.

            At trial, the government presented testimony from nearly 30 witnesses. The first robbery took place on Jan. 2, 2018, at a gas station in Silver Spring. Other targets were in Takoma Park, Md., Silver Spring, Md., Northwest Washington, and Arlington, Va. On Jan. 10, 2018, two robberies took place within a 45-minute period. The final robbery in the series took place on Jan. 29, 2018, at another gas station in Silver Spring.

            Onyewu was arrested on Oct. 22, 2020; Sumo on Nov. 23, 2020, and Flumo on Apr. 27, 2021. Onyewu was sentenced Aug. 18, 2023, to 166 months in federal prison and 36 months of supervised release by U.S. District Judge James E. Boasberg.

            Flumo and Sumo were sentenced today by U.S. District Judge Amit Mehta who also ordered three years of supervised release for each defendant.

            In announcing the verdicts, U.S. Attorney Graves, Special Agent in Charge Jacobs, Chief Jones, and Chief DeVaul commended the work of those who investigated the case from the FBI’s Washington Field Office’s Violent Crime Task Force, the Montgomery Co. Police Department, the Takoma Park Police Department, the Metropolitan Police Department, the Prince George’s Co. Police Department, and the Arlington County Police Department. 

            They also expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Daniel Lenerz, Paralegal Specialists Candace Battle, Mary Downing, and Kim Hall, Legal Assistant Latoya Wade, Supervisory Litigation Technology Specialist Leif Hickling, and Litigation Technology Specialist William Henderson.

            Finally, they commended the work of Assistant U.S. Attorneys Nihar Mohanty and Candice Wong of the Violence Reduction and Trafficking Offenses Section (VRTO), who investigated and prosecuted the case.

            WASHINGTON – Leon A. Miller, 33, of Washington, D.C., was sentenced today to a nine-year prison term for armed robbery and a firearms offense stemming from a hold-up last fall at a liquor store in Northwest Washington, announced U.S. Attorney Matthew M. Graves and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).

            Miller pleaded guilty in February 2022, in the Superior Court of the District of Columbia. The plea agreement, which was contingent upon the Court’s approval, called for Miller to be sentenced to a term of imprisonment between seven and nine years. The Honorable J. Michael Ryan accepted the plea and sentenced Miller accordingly. Following his prison term, Miller will be placed on five years of supervised release.

            In court documents, Miller also admitted to committing two other robberies of liquor stores, also in Northwest Washington, and of two store customers. The five robberies took place on three successive evenings.

            Miller pleaded guilty to charges stemming from the Oct. 14, 2021, robbery of Paul’s Wine and Spirits, in the 5200 block of Wisconsin Avenue NW. According to a factual proffer, Miller entered the store at approximately 6 p.m., brandished what appeared to be a black handgun, and demanded that a store employee open the cash registers. He stole about $200 in cash. He also demanded three specific kinds of champagne, none of which the store carries.

            Miller also admitted robbing The Wine Specialist, in the 1100 block of 20th Street NW, on the evening of Oct. 12, 2021. There, he also brandished what appeared to be a black handgun and demanded that an employee open the cash registers. He took approximately $2,000 in cash as well as two bottles of champagne, valued at roughly $950.

            The next evening, Oct. 13, 2021, Miller entered Press Liquors, in the 500 block of 14th Street, brandished what appeared to be a black handgun, and demanded an employee open the registers. He stole approximately $900 in cash. In addition, he brandished the gun at two customers and took their wallets and phones.

            Miller was arrested about an hour after the robbery of Paul’s, near the Dupont Circle Metro station. 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 also expressed appreciation for the assistance provided by the Metro Transit Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Crystal Waddy, and Assistant U.S. Attorney Paul V. Courtney, who investigated and prosecuted the matter.

CHICAGO — A suburban Chicago chiropractor has been indicted on federal fraud charges for allegedly billing a private insurer for nonexistent services.

SEUNG HAN LIM owned and operated Movement Health and Rehab, also known as Motu Chiropractic and Motu Chiromassage, in Libertyville, Ill.  From 2016 to 2019, Lim submitted fraudulent claims to Blue Cross Blue Shield of Illinois for purported health care services that Lim knew were not actually provided, according to an indictment unsealed today in U.S. District Court in Chicago.  Some of the fraudulent claims were for services purportedly provided on dates when either Lim or the patient were not in Illinois, the indictment states.  Other claims submitted by Lim were for services purportedly rendered by another chiropractor to Lim and Lim’s family members, even though Lim knew that those services were not actually provided by the other chiropractor and that BCBS would have denied the claims had Lim been identified as the rendering provider because the insurer prohibited claims from providers for services rendered to the provider or their immediate family members, the indictment states.

When BCBS attempted to audit Lim’s claims, he prepared false patient medical records and other documents and submitted them to BCBS, the indictment states.

As a result of the scheme, Lim and his clinic fraudulently obtained at least $430,000 from BCBS, the indictment states.

The indictment charges Lim, 40, of Lincolnshire, Ill., with 14 counts of health care fraud.  Each count is punishable by up to ten years in federal prison.  Lim was scheduled to make an initial court appearance this afternoon before U.S. Magistrate Judge Gabriel A. Fuentes.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, and Irene Lindow, Special Agent-in-Charge of the Great Lakes Region of the U.S. Department of Labor, Office of the Inspector General.  The government is represented by Assistant U.S. Attorneys Paige Nutini and Jasmina Vajzovic.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.





Lim indictment

A medical doctor and entrepreneur was sentenced to 119 months and 29 days in prison today for defrauding his former company’s shareholders and for failing to account for and failing to pay employment taxes, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Chief Don Fort of the Internal Revenue Service Criminal Investigation (IRS-CI) and Assistant Director in Charge Andrew W. Vale of the FBI’s Washington Field Office.

According to documents filed with the court, in or about September 2000, Sreedhar Potarazu, 51, of Potomac, Maryland, an ophthalmic surgeon licensed in Maryland and Virginia, founded VitalSpring Technologies Inc. (VitalSpring), a Delaware corporation. VitalSpring operated in McLean, Virginia and provided data analysis and services relating to health care expenditures. In or around the end of 2015, VitalSpring started doing business as Enziime LLC, a Delaware corporation. From its inception, Potarazu was VitalSpring’s Chief Executive Officer and President, and served on its Board of Directors.

From at least 2008, Potarazu provided materially false and misleading information to VitalSpring’s shareholders to induce more than $49 million in capital investments in the company. Potarazu represented on numerous occasions that VitalSpring was a financially successful company and that the sale of VitalSpring was imminent, which would have resulted in profits for shareholders. Potarazu also admitted that he concealed from shareholders that VitalSpring failed to account for and pay over more than $7.5 million in employment taxes to the IRS. For example, in 2014, Potarazu provided shareholders with a written summary of operating results that reflected VitalSpring’s 2013 revenues to be approximately $12.9 million when, in fact, the 2013 revenue was less than $1 million.

“Like a director employing actors and props on a stage, Sreedhar Potarazu arranged for an imposter to pose as a buyer, provided a link to a bogus website and supplied fraudulent balance sheets, phony bank statements and false tax returns to convince VitalSpring investors and potential buyers that the company was financially healthy and up-to-date on its taxes,” said Acting Deputy Assistant Attorney General Goldberg. “As a result of his actions, shareholders are out more than $49.5 million and over $7.5 million in employment taxes due to the U.S. Treasury were diverted and never paid. With Potarazu’s conviction and the sentencing hearings in this case, his fraud has been revealed, and today’s imposition of a 119 month sentence holds him fully accountable for his actions.”

“For years Potarazu enriched himself by abusing the trust of his company’s many investors and stealing millions of dollars from them through a complex scheme of fraud and deceit,” said U.S. Attorney Dana J. Boente for the Eastern District of Virginia. “This case is a prime example of this office’s ongoing commitment to bringing white-collar criminals to justice.”

“For almost a decade, Potarazu put greed ahead of his shareholders and employees by building a complex web of deceit and fraud while at the same time evading paying his employment tax liability,” said Chief Don Fort, IRS Criminal Investigation. “Today’s sentencing serves as a reminder that these types of criminal actions will be punished and IRS-CI is committed to bringing culpable individuals to justice.”

“Potarazu ran a multi-million dollar scheme that caused significant financial losses to VitalSpring shareholders for almost a decade,” said Assistant Director in Charge Andrew W. Vale of the FBI’s Washington Field Office. “The FBI is committed to bringing white-collar criminals to justice and we will continue to work closely with our law enforcement partners, to investigate, charge and prosecute those who engage in criminally deceitful business practices.”

Scheme to Defraud

From VitalSpring’s inception, but specifically from 2008 until his arrest in October 2016, Potarazu solicited investments through in-person meetings, emails, telephone conference calls, webinars, and phone calls. From in or about 2008 through in or about 2016, Potarazu raised approximately $49 million from more than 174 victim investors.

Potarazu induced investments from shareholders by making false representations, concealing material facts, and telling deceptive half-truths about VitalSpring’s financial condition, tax compliance, and alleged imminent sale. Potarazu also caused someone to pose as a representative of a prospective buyer on shareholder conference calls to add legitimacy to his claims regarding VitalSpring’s imminent sale.

VitalSpring never generated a profit. Nonetheless, Potarazu falsely represented to shareholders that VitalSpring’s financial position and profitability was improving from 2008 to 2016, and that VitalSpring had millions of dollars in cash reserves. To support his scheme, Potarazu presented fake bank statements to some shareholders that showed inflated balances.

Potarazu also concealed from shareholders that VitalSpring owed substantial employment tax to the IRS. Potarazu provided or caused to be provided false corporate income tax returns to some shareholders that overstated VitalSpring’s income and omitted the accruing employment tax liability.

In November 2014, Potarazu created a Special Review Committee (SRC) in response to a lawsuit filed in Delaware by shareholders that claimed Potarazu misled the victim investors about VitalSpring’s finances, the status of the impending sale, and Potarazu’s compensation. Potarazu provided the SRC with false financial records, fake tax returns, and fake bank statements to induce the SRC to believe that VitalSpring was financially healthy and to cause the SRC to make materially false representations to the Delaware court and victim investors. He also falsely represented that the alleged imminent sale would yield substantial returns to the shareholders, and used this to induce additional investments. Members of the SRC traveled interstate to the Eastern District of Virginia to attend meetings in which Potarazu presented false information for their review.

In truth, there was no imminent sale pending. Potarazu provided false financial records, including fake balance sheets, fabricated bank statements, and false tax returns, to several prospective buyers, financial advisors and investment banks. In December 2014, when he was questioned by Prospective Buyer 1 as to the accuracy and authenticity of bank records provided, Potarazu presented false or misleading emails purporting to be from a bank employee to bolster the legitimacy of the false bank records. Potarazu also presented Prospective Buyer 1 with a link to a fake website that was made to look like a website for a major national bank, and which referred Prospective Buyer 1 to VitalSpring’s false bank statements, and used a shadow, secondary email account assigned to a VitalSpring employee to provide false information to Prospective Buyer 1, thereby creating the appearance that Potarazu had not provided the information.

In October 2014, Prospective Buyer 2 informed Potarazu that it was no longer interested in VitalSpring. Nevertheless, Potarazu continued to represent to shareholders for months thereafter that there was a deal pending with Prospective Buyer 2. In March 2015 and February 2016, Potarazu organized, or caused to be organized, conference calls with shareholders to discuss the alleged sale. In advance of the calls, Potarazu obtained questions from the shareholders and used them to prepare the individual who posed as a representative of Prospective Buyer 2 for each call.

From 2011 to 2015, in addition to his salary paid by VitalSpring, Potarazu diverted at least $5 million from the victim investors and VitalSpring for his own personal use.

Employment Tax Fraud

Potarazu admitted that from 2007 to 2016, VitalSpring accrued employment tax liabilities of more than $7.5 million. Potarazu withheld taxes from VitalSpring employees’ wages, but failed to fully pay over the amounts withheld to the IRS. As CEO and President of VitalSpring, Potarazu was a “responsible person” obligated to collect, truthfully account for, and pay over VitalSpring’s employment taxes. Ultimate and final decision-making authority regarding VitalSpring’s business activities rested with Potarazu.

Potarazu was aware of the employment tax liability as early as 2007 and between 2007 and 2016, was frequently apprised of VitalSpring’s employment tax responsibilities by his employees. In addition, IRS special agents interviewed Potarazu in 2011 and informed him of the employment tax liability. In all but one quarter between the first quarter of 2007 and the last quarter of 2011, as well as the second and third quarters of 2015, Potarazu failed to file VitalSpring’s Employer’s Quarterly Federal Tax Return (Forms 941) with the IRS. Potarazu also failed to pay over any of the employment tax withheld from VitalSpring’s employees’ wages in all but one quarter between the second quarter of 2007 and the third quarter of 2011, as well as the third and fourth quarters of 2015.

Between 2008 and 2015, instead of paying over employment tax, Potarazu caused VitalSpring to make millions of dollars of expenditures, including thousands of dollars in transfers to himself and others, the publication of his book, “Get Off the Dime,” a sedan car service and travel.

In addition to the term of prison imposed, U.S. District Court Judge Gerald Bruce Lee ordered Potarazu to serve three years of supervised release, and to pay $49,511,169 in restitution to the shareholders and $7,691,071 to the IRS, and forfeiture of several homes, vehicles, and bank accounts. He was remanded into custody.

Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Boente commended special agents of IRS CI and the FBI, who conducted the investigation, and Assistant Chief Caryn Finley and Trial Attorney Jack Morgan of the Tax Division, and Assistant U.S. Attorney Jack Hanly, who prosecuted the case.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

On Dec. 2, a federal jury in Greeneville, Tennessee, convicted Peter Bolos, 44, of Tampa, Florida, of 22 counts of mail fraud, conspiracy to commit health care fraud and introduction of a misbranded drug into interstate commerce, following a month-long trial.

According to court documents and evidence presented at trial, Bolos and his co-conspirators, Andrew Assad, Michael Palso, Maikel Bolos, Larry Smith, Scott Roix, HealthRight LLC, Mihir Taneja, Arun Kapoor, and Sterling Knight Pharmaceuticals, as well as various other companies owned by them, 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 claims worth more than $174 million 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.

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 agreed with Scott 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. To obtain the prescriptions, evidence showed Roix used HealthRight’s telemarketing platform as a telemedicine service, 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. 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 established that during the conspiracy, which lasted from May 2015 through April 2018, Bolos paid Roix more than $30 million to buy at least 60,000 invalid prescriptions generated by HealthRight. Evidence showed Bolos selected specific medications for the prescriptions that he could submit for highly profitable reimbursements. In addition, Bolos used illegal means to hide his activity from the PBMs so that he could remain undetected. Evidence showed that Bolos was responsible for at least $89 million out of the total $174 million in fraudulently paid billings.

“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 of the Justice Department’s Civil Division. “The Department will continue to investigate and prosecute individuals who use telemedicine to advance fraudulent schemes that violate the Food, Drug, and Cosmetic Act.”

“The United States Attorney’s Office for the Eastern District of Tennessee applauds the unwavering efforts of the multiple agencies involved in this collaborative investigation to bring this extensive healthcare fraud and misbranding scheme to justice,” said Acting U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “The scope and nature of this fraud and misbranding scheme shock the conscience. Patients were given medications that they neither requested nor wanted, and the trial proof demonstrated that the prescriptions were specifically chosen by Bolos to maximize the fraudulent scheme’s profits, rather than for the patients’ healthcare needs. The guilty verdict against Bolos and the guilty pleas obtained from his co-defendants should send a strong message that the Department of Justice will aggressively prosecute fraud against health insurance providers.”

“Healthcare fraud is an egregious crime problem that impacts every American,” said Special Agent in Charge Joseph E. Carrico of the FBI’s Knoxville Field Office. “The guilty verdict was a result of a multi-agency investigation into a complex health care fraud scheme that required substantial investigative resources. Along with its law enforcement partners, the FBI remains committed to investigate these crimes and prosecute all those that are intent in defrauding the American public." 

“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 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 used their pharmacies to fraudulently bill insurance companies hundreds of millions of dollars, and that type of health care fraud impacts everyone,” said Special Agent in Charge John Condon of Homeland Security Investigations (HSI) Tampa. “HSI will continue to work with our law enforcement partners at the federal, state and local level to investigate all fraud and bring those responsible to justice.”

“Bolos and his co-conspirators sought to increase their profits by executing a comprehensive health care fraud scheme involving innocent patients,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General. “This conviction should serve as a warning to individuals who wish to deceive the government and steal from taxpayers. Alongside our law enforcement partners, we will continue to pursue medical professionals who engage in fraudulent activity.”

“The verdict in this case sends a clear message that these types of schemes will not be tolerated,” said Special Agent in Charge Matthew Modafferi of the U.S. Postal Service Office of Inspector General in the Northeast Area Field Office. “The Special Agents of the U.S. Postal Service Office of Inspector General will continue to work closely with the U.S. Attorney’s Office and our law enforcement partners to bring to justice those who commit these kinds of offenses.”

Roix, Assad, Palso, Smith, Maikel Bolos and various associated business entities previously 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 set sentencing for Bolos for May 19, 2022, in the United States District Court for the Eastern District of Tennessee at Greeneville. Sentencings for the other defendants will be set for dates in 2022.

The trial and plea agreements resulted from a multi-year investigation conducted by the U.S. Department of Health & Human Services Office of Inspector General (Nashville); Food and Drug Administration Office of Criminal Investigations (Nashville); U.S. Postal Service, Office of Inspector General (Buffalo); Federal Bureau of Investigation (Knoxville and Johnson City, Tennessee); Office of Personnel Management Office of Inspector General (Atlanta); and the Department of Homeland Security, Homeland Security Investigations (Tampa). The U.S. Marshals Service also assisted in the investigation and the forfeiture of assets.

Assistant U.S. Attorneys TJ Harker and Mac Heavener for the Eastern District of Tennessee and Trial Attorney David Gunn of the Department of Justice Civil Division’s Consumer Protection Branch in Washington, and a former Assistant U.S. Attorney in Knoxville, prosecuted and tried the case. They were assisted by Barbra Pemberton, Bryan Brandenburg and April Denard from the U.S. Attorney’s office. 

The Justice Department, along with federal partners, announced today a $7.2 billion settlement with Deutsche Bank resolving federal civil claims that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007.  This $7.2 billion agreement represents the single largest RMBS resolution for the conduct of a single entity.  The settlement requires Deutsche Bank to pay a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  Under the settlement, Deutsche Bank will also provide $4.1 billion in relief to underwater homeowners, distressed borrowers and affected communities.

“This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public,” said Attorney General Loretta E. Lynch.  “Deutsche Bank did not merely mislead investors: it contributed directly to an international financial crisis.  The cost of this misconduct is significant: Deutsche Bank will pay a $3.1 billion civil penalty, and provide an additional $4.1 billion in relief to homeowners, borrowers, and communities harmed by its practices.  Our settlement today makes clear that institutions like Deutsche Bank cannot evade responsibility for the great cost exacted by their conduct.”

“This $7.2 billion resolution – the largest of its kind – recognizes the immense breadth of Deutsche Bank’s unlawful scheme by demanding a painful penalty from the bank, along with billions of dollars of relief to the communities and homeowners that continue to struggle because of Wall Street’s greed,” said Principal Deputy Associate Attorney General Bill Baer.  “The Department will remain relentless in holding financial institutions accountable for the harm their misconduct inflicted on investors, our economy and American consumers.” 

“In the Statement of Facts accompanying this settlement, Deutsche Bank admits making false representations and omitting material information from disclosures to investors about the loans included in RMBS securities sold by the Bank.  This misconduct, combined with that of the other banks we have already settled with, hurt our economy and threatened the banking system,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “To make matters worse, the Bank’s conduct encouraged shoddy mortgage underwriting and improvident lending that caused borrowers to lose their homes because they couldn’t pay their loans.  Today’s settlement shows once again that the Department will aggressively pursue misconduct that hurts the American public.”

“Investors who bought RMBS from Deutsche Bank, and who suffered catastrophic losses as a result, included individuals and institutions that form the backbone of our community,” said U.S. Attorney Robert L. Capers for the Eastern District of New York.  “Deutsche Bank repeatedly assured investors that its RMBS were safe investments.  Instead of ensuring that its representations to investors were accurate and transparent, so that investors could make properly informed investment decisions, Deutsche Bank repeatedly misled investors and withheld critical information about the loans it securitized.  Time and again, the bank put investors at risk in pursuit of profit.  Deutsche Bank has now been held accountable.”  

“Deutsche Bank knowingly securitized billions of dollars of defective mortgages and subsequently made false representations to investors about the quality of the underlying loans,” said Special Agent In Charge Steven Perez of the Federal Housing Finance Agency, Office of the Inspector General. “Its actions resulted in enormous losses to investors to whom Deutsche Bank sold these defective Residential Mortgage-Backed Securities. Today’s announcement reaffirms our commitment to working with our law enforcement partners to hold accountable those who deceived investors in pursuit of profits, and contributed to our nation’s financial crisis.  We are proud to have worked with the U.S. Department of Justice and the U.S Attorney’s Office for the Eastern District of New York.”

As part of the settlement, Deutsche Bank agreed to a detailed Statement of Facts.  That statement describes how Deutsche Bank knowingly made false and misleading representations to investors about the characteristics of the mortgage loans it securitized in RMBS worth billions of dollars issued by the bank between 2006 and 2007.  For example:

Deutsche Bank represented to investors that loans securitized in its RMBS were originated generally in accordance with mortgage loan originators’ underwriting guidelines.  But as Deutsche Bank now acknowledges, the bank’s own reviews confirmed that “aggressive” revisions to the loan originators’ underwriting guidelines allowed for loans to be underwritten to anyone with “half a pulse.”  More generally, Deutsche Bank knew, based on the results of due diligence, that for some securitized loan pools, more than 50 percent of the loans subjected to due diligence did not meet loan originators’ guidelines.

 

Deutsche Bank also knowingly misrepresented that loans had been reviewed to ensure the ability of borrowers to repay their loans.  As Deutsche Bank acknowledges, the bank’s own employees recognized that Deutsche Bank would “tolerate misrepresentation” with “misdirected lending practices” as to borrower ability to pay, accepting even blocked-out borrower pay stubs that concealed borrowers’ actual incomes.  As a Deutsche Bank employee stated, “What goes around will eventually come around; when performance (default) begins affecting profits and/or the investors who purchase the securities, only then will Wall St. take notice.  For now, the buying continues.”

 

Deutsche Bank concealed from investors that significant numbers of borrowers had second liens on their properties. In one instance, a supervisory Deutsche Bank trader specifically instructed his team that if investors asked about second liens, “‘[t]ell them verbally . . . [b]ut don’t put in the prospectus.’”  Deutsche Bank knew that these second liens increased the likelihood that a borrower would default on his or her loan.

 

Deutsche Bank purchased and securitized loans with substantial defects to provide “flexibility” to the mortgage originators on whom Deutsche Bank’s RMBS program depended for a continued supply of loans.  Indeed, after the president of a large mortgage originator told Deutsche Bank he was “very upset with the rejection percentage,” Deutsche Bank’s diligence team was instructed, on three separate occasions, to clear loans it previously determined should be rejected.  

 

While Deutsche Bank conducted due diligence on samples of loans it securitized in RMBS, Deutsche Bank knew that the size and composition of these loan samples frequently failed to capture loans that did not meet its representations to investors.  In fact, Deutsche Bank knew “the more you sample, the more you reject.”

 

Deutsche Bank knowingly and intentionally securitized loans originated based on unsupported and fraudulent appraisals.  Deutsche Bank knew that mortgage originators were “‘giving’ appraisers the value they want[ed]” and expecting the resulting appraisals to meet the originators’ desired value, regardless of the actual value of the property.  Deutsche Bank concealed its knowledge of pervasive and consistent appraisal fraud, instead representing to investors home valuation metrics based on appraisals it knew to be fraudulent.  Deutsche Bank misrepresented to investors the value of the properties securing the loans securitized in its RMBS and concealed from investors that it knew that the value of the properties securing the loans was far below the value reflected by the originator’s appraisal. 

 

By May 2007, Deutsche Bank knew that there was an increasing trend of overvalued properties being sold to Deutsche Bank for securitization.  As one employee noted, “We are finding ourselves going back quite often and clearing large numbers of loans [with inflated appraisals] to bring down the deletion percentages.”  Deutsche Bank nonetheless purchased and securitized such loans because it received favorable prices on the fraudulent loans.  Ultimately, Deutsche Bank enriched itself by paying reduced prices for risky loans while representing to investors valuation metrics based on appraisals the Bank knew to be inflated.

 

Deutsche Bank represented to investors that disclosed borrower FICO scores were accurate as of the “cut-off date” of the RMBS issuance.  However, Deutsche Bank knowingly represented borrowers’ FICO scores as of the time of the origination of their loans despite the bank’s knowledge that these scores had often declined materially by the cut-off date.

Assistant U.S. Attorneys Edward K. Newman, Matthew R. Belz, Jeremy Turk, and Ryan M. Wilson of the U.S. Attorney’s Office for the Eastern District of New York investigated Deutsche Bank’s conduct in connection with the issuance and sale of RMBS between 2006 and 2007. The investigation was conducted with the Office of the Inspector General for the Federal Housing Finance Agency.

The $3.1 billion civil monetary penalty resolves claims under FIRREA, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud.  It is one of the largest FIRREA penalties ever paid.  The settlement does not release any individuals from potential criminal or civil liability.  As part of the settlement, Deutsche Bank has agreed to fully cooperate with investigations related to the conduct covered by the agreement.

Deutsche Bank will also provide $4.1 billion in the form of relief to aid consumers harmed by its unlawful conduct.  Specifically, Deutsche Bank will provide loan modifications, including loan forgiveness and forbearance, to distressed and underwater homeowners throughout the country.  It will also provide financing for affordable rental and for-sale housing throughout the country. Deutsche Bank’s provision of consumer relief will be overseen by an independent monitor who will have authority to approve the selection of any third party used by Deutsche Bank to provide consumer relief.

To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html.

About the RMBS Working Group:

The RMBS Working Group, part of the Financial Fraud Enforcement Task Force, was established by the Attorney General in late January 2012.  The Working Group has been dedicated to initiating, organizing, and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market that helped precipitate the 2008 Financial Crisis.  The Working Group’s efforts to date have resulted in settlements providing for tens of billions of dollars in civil penalties and consumer relief from banks and other entities that are alleged to have committed fraud in connection with the issuance of RMBS.

# # #

CLEVELAND – Federal, county, and local law enforcement officials today announced that 59 individuals were charged and arrested in connection with firearms-trafficking, narcotics, conspiracy, or other firearms offenses after a three month, violent-crime-reduction initiative in Cleveland this summer. The vast majority were charged in United States District Court, while the remaining individuals were charged in state court. These individuals were apprehended in a series of coordinated arrests made during the last two weeks.

United States Attorney Rebecca C. Lutzko made the announcement earlier today. Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) Director Steven M. Dettelbach, United States Marshal Peter J. Elliott, and Cleveland Mayor Justin M. Bibb provided additional details relating to the initiative, as well as regarding larger firearms enforcement and violence-prevention efforts.

"The Justice Department's work to disrupt and dismantle the criminal gun trafficking pipelines that flood our communities with illegal guns had never been more urgent than it is now," said Attorney General Merrick B. Garland. "That is why our prosecutors and agents are working more closely than ever before with our local law enforcement partners to get illegal guns off of our streets and hold accountable those who put illegal guns in the hands of violent criminals."

Indictments and complaints were recently unsealed in federal court. They detail a lengthy investigation, led by ATF, that focused on reducing firearms-related crime in several areas of Cleveland by studying data about areas with gun-crime violence, then identifying illegal firearms sellers to disrupt their trafficking. The investigation resulted in the seizure of over 240 firearms, 203 of which law enforcement purchased from illegal sellers and permanently removed from Cleveland’s streets. NIBIN data shows that a significant number of those firearms are connected to violent criminal activity, including homicides and felonious assaults, that took place in Cleveland and surrounding Northeast Ohio suburbs in 2022 and 2023. Of the purchased firearms, 17 are “ghost guns”—meaning, unserialized and untraceable firearms, typically assembled at home—and 28 are machinegun conversion devices or “switches”—a device that enables a firearm to fire in fully automatic mode.

In one case, law enforcement purchased more than 50 firearms from a group of 7 people working together to sell firearms on Cleveland’s streets, even though none of the involved individuals holds a federal firearms license. Those firearms included stolen firearms, firearms with obliterated serial numbers, “switches,” already-loaded firearms, assault rifles, and firearms that had been previously used to commit violent crimes. Sometimes, these individuals also sold controlled substances to law enforcement officers at the same time. In two additional cases, law enforcement purchased, respectively, 33 firearms (including “switches”) and 23 firearms (including “switches”) from two other individuals who do not hold a federal firearms license. Many of these sales took place in public parking lots of business establishments during business hours or in recreational areas while nearby uninvolved, law-abiding citizens were engaged in their day-to-day errands or engaged in recreational activities.

Also during this investigation, the ATF identified 5 individuals who were actively engaged in a conspiracy to conduct a home invasion and rob, at gunpoint, what they believed to be a “stash house” containing several kilograms of cocaine. Law enforcement intervened before these individuals could carry out their plan. Additionally, during this investigation, law enforcement purchased or seized almost 1.5 kilograms of cocaine, 215 grams of cocaine base, almost 3 kilograms of methamphetamine, 686 fentanyl pills, almost 1.5 kilograms of heroin/fentanyl mix, and 1,144 MDMA pills (otherwise known as Molly or Ecstasy).

Some defendants were charged together, but several others were charged individually. In all cases, however, the charges stemmed from the extensive, targeted, and sustained effort this past summer, led by ATF and assisted by other federal, state, and local law enforcement partners, to clamp down on the illegal firearms trafficking, use, and possession, as well as the associated distribution of drugs, in Cleveland.

The following is a breakdown of the charges in United States District Court, according to court documents:



MALACHI BERRY, 21, Cleveland, DARVELL JACKSON, 20, Cleveland, and STEVEN ARMSTRONG, 19, Cleveland, were charged together in a Conspiracy to Possess a Machinegun. JACKSON and ARMSTRONG were further charged with Illegal Possession of a Machinegun.



In the same indictment, these individuals, along with NIMAR LINDER, 21, Cleveland, were also charged with Conspiracy to Engage in the Business of Dealing  Firearms without a Federal Firearms License.



ARMSTRONG and LINDER were charged as Felons in Possession of a Firearm.

 

According to court documents, the following individuals have been indicted on Distribution of Drugs charges:



CARLOS DUPREE, 43, Cleveland, DOMINIQUE GOLDSBY, 32, Cleveland, JESSE MCDADE, 41, Cleveland, NORMAN YOUNG, 37, Cleveland, MARTIN

GOODSON, 41, Cleveland, LAJUAN ERWIN, 25, Mayfield Heights, CHEVEZ MOORER, 23, Cleveland, AARON WIMBLEY, 22, Garfield Heights, ALEXANDER

DUNCAN, 19, Cleveland, DAMIEN BODY, 39, Cleveland, DERRICK DONALD, 41, Cleveland, NAHUM HOLMES, 31, Brook Park, AKIL EDMONDS, 39, Cleveland, WILLIE C. JACKSON, 36, Cleveland, and DEANDRE SMITH, 36, Cleveland.

 

Indicted together were JOSEAN ORTIZ-STUART, 34, Cleveland, JESUS VEGA, 29, Cleveland, who were both charged with Distribution of Drugs. Also named in that indictment was GERALD MATOS, 38, Cleveland, who was charged with being a Felon in Possession of a Firearm.

 

Indicted together were ELIAS PAGAN 32, Cleveland, IVAN SANTANA, 26, Cleveland, ANGEL SANTIAGO, 46, also of Cleveland. PAGAN also faces numerous charges for Distribution of Drugs, as well being a Felon in Possession of Firearms, and both PAGAN and SANTANA were also charged with Engaging in the Business of Importing, Manufacturing, or Dealing in Firearms Without a Federal Firearms License.

SANTIAGO is also charged with Distribution of Drugs.

 

AMBRAY UNDERWOOD, 25, Euclid, was charged in an indictment for Conspiracy to Distribute Drugs, and Drug Distribution.

 

WILLIE EARL JACKSON, 26, Cleveland, and SHANE PLATS, 31, Ashtabula, were charged in the same indictment with Engaging in the Business of Dealing Firearms without a Federal Firearms License. WIILIE EARL JACKSON was also charged in that indictment with Trafficking in Firearms.

 

DESHONN BROWN age, 19, Cleveland; DEMARIUS JEFFERSON, 18, Cleveland, were both charged with Illegal Possession of Machineguns.

 

JACOB PLUMB, 40, Parma, was charged with Distribution of Drugs and Possession of a Firearm in Furtherance of a Drug Trafficking Crime.

 

ISAIAH OVERTON, 23, Cleveland, and CHARLES MORRIS, 33, East Cleveland, were charged in a single indictment with Distribution of Drugs. Additionally, OVERTON was charged with Using and Carrying a Firearm During and in Relation to a Drug Trafficking Crime.

 

CORTE’Z BUGGS, 29, Cleveland was charged in an indictment with Distribution of Drugs and Receipt of Firearm while Under Felony Indictment.

 

MICHAEL MCPHERRAN, 38, Parma, Ohio, was charged with Conspiracy to Distribute Drugs, and Distribution of Drugs.

 

HAROLD PEARL, 39, Cleveland, was charged with Distribution of Drugs and being a Felon in Possession of a Firearm.

 

Charged by complaint with Conspiracy to Possess with Intent to Distribute Drugs and Possession of a Firearm in Furtherance of a Drug Trafficking Crime were ALANTE HEARD, 33, Cleveland, ANTONIO SWEENEY, 24, Cleveland, MAURICE COMMONS, 22, North Randall, and MARKUS WILLIAMS, 33, Cleveland.

 

Charged with being a Felon in Possession of a Firearm were MARQUIS HENSON, 38, Cleveland, DEON BROWN, 19, Cleveland, and CLARENCE PAYNE, 38, Cleveland.

 

KENNETH SMITH, 23, East Cleveland, was charged with Engaging in the Business of Dealing Firearms without a Federal Firearms License, Illegal Possession of a Machinegun, and being a Felon in Possession of Firearms.

 

ANDRE LEWIS, 35, Cleveland, was charged with Distribution of Drugs and Using and Carrying a Firearm During and in Relation to a Drug Trafficking Crime.

 

DEVAUNTY LEWIS, 31, Cleveland, NICHOLAS JOHNSON, 33, Cleveland, were charged jointly in an indictment with Conspiracy to Engage in the Business of Importing, Manufacturing, or Dealing in Firearms without a Federal Firearms License, and Conspiracy to Engage in Firearms Trafficking. Both were individually charged with Engaging Business in Dealing with Firearms Without a License and Trafficking in Firearms.



LEWIS was also charged with being a Felon in Possession of a Firearm.



JOHNSON was also charged with Engaging in the Business of Importing, Manufacturing, or Dealing in Firearms without a Federal Firearms License.

 

The following were charged in an indictment with Conspiracy to Engage in the Business of Importing, Manufacturing, or Dealing in Firearms Without a Federal Firearms License: MAURICE STERETT, 39, Cleveland, ANTONIO CROSS, 22, Cleveland, MARVELL ROACH, 43, Willoughby, KENNETH TIMBERLAKE, 30, Cleveland, and TRAVIS WILLIAMS, 46, Cleveland.



STERETT, CROSS, TIMBERLAKE, and WILLIAMS were further charged, individually, with Engaging in the Business of Importing, Manufacturing, or Dealing in Firearms Without a Federal Firearms License.



STERETT, CROSS, ROACH, TIMBERLAKE, and WILLIAMS were also charged with Conspiracy to Engage in Firearms Trafficking and individual counts of Firearms Trafficking.



STERETT, TIMBERLAKE, TRAVIS WILLIAMS, and ROACH were also charged with being a Felon in Possession of Firearms.



STERETT was further charged with Distribution of Drugs.



Finally, CROSS was also charged with Illegal Transfer of a Machinegun.

 

DARION SHELTON, 20, Cleveland, was charged with Engaging in the Business of Dealing Firearms without a Federal Firearms License, and Trafficking in Firearms in connection with machinegun conversation devices or “switches.” He has also been charged with Illegal Possession of a Machinegun.



The following is a breakdown of the charges in the Cuyahoga County Court of Common Pleas, according to court documents:

 

MARCEL BATTLE, 30, Canton, Drug Trafficking.

 

AVANT WILSON, 22, Cleveland, Receiving Stolen Property (Motor Vehicle).

 

NATHAN ROBY, 44, Cleveland, Drug Trafficking.

 

RAYMOND CALLAHAN, 34, Cleveland, Drug Trafficking.

 

RAPHAEL DEEN, 30, Cleveland, Drug Trafficking.

 

TERRY LYONS, 33, Cleveland, Drug Trafficking.



 An indictment or complaint is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.



If convicted, each defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal records, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and, in most cases, it will be less than the maximum.

 

The investigation preceding the indictments was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), with assistance from the Cleveland Division of Police (“CDP”), the United States Marshals Service (“USMS”), the Drug Enforcement Administration (“DEA”), the Federal Bureau of Investigation (“FBI”), the Department of Homeland Security Investigations (“HSI”), the Ohio Bureau of Criminal Investigation (“BCI”), the Ohio Adult Parole Authority (“APA”), the Ohio Investigative Unit (“OIU”), Customs and Border Patrol (“CBP”), Air and Marine Division, the Ohio State Highway Patrol (“OSP”), and the Cuyahoga County Sheriff’s Office. This Operation was also part of an Organized Crime Drug Enforcement Task Forces (OCDETF) initiative. The cases stemming from this investigation are being prosecuted by a team of AUSAs in the U.S. Attorney’s Office, led by AUSA Kelly Galvin, and by the Cuyahoga County Prosecutor’s Office.

Today, Mohamad Jamal Khweis, 27, of Alexandria, Virginia, was convicted by a federal jury for providing material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.

Dana J. Boente, Acting Assistant Attorney General for National Security, and U.S. Attorney for the Eastern District of Virginia; and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after U.S. District Judge Liam O’Grady accepted the verdict.

“Khweis is not a naïve kid who didn’t know what he was doing,” said Dana J. Boente, Acting Assistant Attorney General for National Security, and U.S. Attorney for the Eastern District of Virginia. “He is a 27-year-old man who studied criminal justice in college. He strategically planned his travel to avoid law enforcement suspicion, encrypted his communications, and planned for possible alibis. Khweis knew exactly what he was doing, knew exactly who ISIS was, and was well aware of their thirst for extreme violence. Nonetheless, this did not deter him. Instead, Khweis voluntarily chose to join the ranks of a designated foreign terrorist organization, and that is a federal crime, even if you get scared and decide to leave. This office, along with the National Security Division and our investigative partners, are committed to tracking down anyone who provides or attempts to provide material support to a terrorist organization.”

“Mohamad Khweis purposefully traveled overseas with the intent to join ISIL in support of the terrorist group’s efforts to conduct operations and execute attacks to further their radical ideology,” said Andrew W. Vale, Assistant Director in Charge in Charge of the FBI’s Washington Field Office. “Furthermore, when ISIL leaders questioned Khweis' commitment to serving as a suicide bomber to carry out acts of terrorism, Khweis stated that he agreed and recognized that ISIL uses violence in its expansion of its caliphate. Today’s verdict underscores the dedication of the FBI and our partners within the Joint Terrorism Task Force in pursuing and disrupting anyone who poses a risk of harm to U.S. persons or interests or by providing material support to a terrorist group.”

According to court records and evidence presented at trial, Khweis left the U.S. in mid-December 2015, and ultimately crossed into Syria through the Republic of Turkey in late December 2015. Before leaving, Khweis quit his job, sold his car, closed online accounts, and did not tell his family he was leaving to join ISIS. During his travel to the Islamic State, he used numerous encrypted devices to conceal his activity, and downloaded several applications on his phone that featured secure messaging or anonymous web browsing. Khweis used these applications to communicate with ISIS facilitators to coordinate and secure his passage to the Islamic State.

After arriving in Syria, Khweis stayed at a safe house with other ISIS recruits in Raqqa and filled out ISIS intake forms, which included his name, age, skills, specialty before jihad, and status as a fighter. When Khweis joined ISIS, he agreed to be a suicide bomber. In February 2017, the U.S. military recovered his intake form, along with an ISIS camp roster that included Khweis’ name with 19 other ISIS fighters.

During the trial, Khweis admitted to spending approximately 2.5 months as an ISIS member, traveling with ISIS fighters to multiple safe houses and participating in ISIS-directed religious training. Kurdish Peshmerga military forces detained Khweis in March 2016. A Kurdish Peshmerga official testified at trial that he captured Khweis on the battlefield after Khweis left an ISIS-controlled neighborhood in Tal Afar, Iraq.

On a cross examination, Khweis admitted he consistently lied to U.S. and Kurdish officials about his involvement with ISIS, and that he omitted telling U.S. officials about another American who had trained with ISIS to conduct an attack in the U.S.

The jury convicted Khweis, a U.S. citizen, on all three charged counts, including providing and conspiring to provide material support or resources to ISIS, and a related firearms count. Khweis faces a mandatory minimum of 5 years and a maximum penalty of life in prison when sentenced on October 13. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Trial Attorney Raj Parekh of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorney Dennis Fitzpatrick for the Eastern District of Virginia are prosecuting the case. The FBI’s Joint Terrorism Task Force provided assistance in this case.

Federal, county, and local law enforcement officials today announced that 59 individuals were charged and arrested in connection with firearms-trafficking, narcotics, conspiracy, or other firearms offenses after a three month, violent-crime-reduction initiative in Cleveland this summer. The vast majority were charged in U.S. District Court, while the remaining individuals were charged in state court. These individuals were apprehended in a series of coordinated arrests made during the last two weeks. 

“The Justice Department’s work to disrupt and dismantle the criminal gun trafficking pipelines that flood our communities with illegal guns has never been more urgent than it is now,” said Attorney General Merrick B. Garland. “That is why our prosecutors and agents are working more closely than ever before with our local law enforcement partners to get illegal guns off of our streets and hold accountable those who put illegal guns in the hands of violent criminals.”

Indictments and complaints were recently unsealed in federal court. They detail a lengthy investigation, led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), that focused on reducing firearms-related crime in several areas of Cleveland by studying data about areas with gun-crime violence, then identifying illegal firearms sellers to disrupt their trafficking. The investigation resulted in the seizure of over 240 firearms, 203 of which law enforcement purchased from illegal sellers and permanently removed from Cleveland’s streets. National Integrated Ballistic Information Network (NIBIN) data shows that a significant number of those firearms are connected to violent criminal activity, including homicides and felonious assaults, that took place in Cleveland and surrounding Northeast Ohio suburbs in 2022 and 2023. Of the purchased firearms, 17 are “ghost guns” – meaning, unserialized and untraceable firearms, typically assembled at home – and 28 are machinegun conversion devices or “switches” – a device that enables a firearm to fire in fully automatic mode.  

In one case, law enforcement purchased more than 50 firearms from a group of seven people working together to sell firearms on Cleveland’s streets, even though none of the involved individuals hold a federal firearms license. Those firearms included stolen firearms, firearms with obliterated serial numbers, “switches,” already-loaded firearms, assault rifles, and firearms that had been previously used to commit violent crimes. Sometimes, these individuals also sold controlled substances to law enforcement officers at the same time. In two additional cases, law enforcement purchased, respectively, 33 firearms (including “switches”) and 23 firearms (including “switches”) from two other individuals who do not hold a federal firearms license. Many of these sales took place in public parking lots of business establishments during business hours or in recreational areas while nearby uninvolved, law-abiding citizens were engaged in their day-to-day errands or engaged in recreational activities.

Also, during this investigation, the ATF identified five individuals who were actively engaged in a conspiracy to conduct a home invasion and rob, at gunpoint, what they believed to be a “stash house” containing several kilograms of cocaine. Law enforcement intervened before these individuals could carry out their plan. Additionally, during this investigation, law enforcement purchased or seized almost 1.5 kilograms of cocaine, 215 grams of cocaine base, almost three kilograms of methamphetamine, 686 fentanyl pills, almost 1.5 kilograms of heroin/fentanyl mix, and 1,144 MDMA pills (otherwise known as Molly or Ecstasy). 

Some defendants were charged together, but several others were charged individually. In all cases, however, the charges stemmed from the extensive, targeted, and sustained effort this past summer, led by the ATF and assisted by other federal, state, and local law enforcement partners, to clamp down on the illegal firearms trafficking, use, and possession, as well as the associated distribution of drugs, in Cleveland. 

The following is a breakdown of the charges in U.S. District Court, according to court documents:





Malachi Berry, 21; Darvell Jackson, 20; and Steven Armstrong, 19, all of Cleveland, were charged together with conspiracy to possess a machinegun. Jackson and Armstrong were further charged with illegal possession of a machinegun. In the same indictment, these individuals, along with Nimar Linder, 21, of Cleveland, were also charged with conspiracy to engage in the business of dealing firearms without a federal firearms license. Armstrong and Linder were charged as felons in possession of a firearm.





Carlos Dupree, 43, of Cleveland; Dominique Goldsby, 32, of Cleveland; Jesse Mcdade, 41, of Cleveland; Norman Young, 37, of Cleveland; Martin Goodson, 41, of Cleveland; Lajuan Erwin, 25, of Mayfield Heights; Chevez Moorer, 23, of Cleveland; Aaron Wimbley, 22, of Garfield Heights; Alexander Duncan, 19, of Cleveland; Damien Body, 39, of Cleveland; Derrick Donald, 41, of Cleveland; Nahum Holmes, 31, of Brook Park; Akil Edmonds, 39, of Cleveland; Willie C. Jackson, 36, of Cleveland; and Deandre Smith, 36, of Cleveland, were indicted on distribution of drugs charges.





Josean Ortiz-Stuart, 34, and Jesus Vega, 29, both of Cleveland, were indicted together and both charged with distribution of drugs. Also named in that indictment was Gerald Matos, 38, of Cleveland, who was charged with being a felon in possession of a firearm.





Elias Pagan, 32, Ivan Santana, 26, and Angel Santiago, 46, all of Cleveland, were indicted together. Pagan faces numerous charges for distribution of drugs, as well being a felon in possession of firearms, and both Pagan and Santana were also charged with engaging in the business of importing, manufacturing, or dealing in firearms without a federal firearms license. Santiago is also charged with distribution of drugs.





Ambray Underwood, 25, of Euclid, was charged in an indictment for conspiracy to distribute drugs, and drug distribution.





Willie Earl Jackson, 26, of Cleveland, and Shane Plats, 31, of Ashtabula, were charged in the same indictment with engaging in the business of dealing firearms without a federal firearms license. Wiilie Earl Jackson was also charged in that indictment with trafficking in firearms.





Deshonn Brown, 19, and Demarius Jefferson, 18, both of Cleveland, were both charged with illegal possession of machineguns.





Jacob Plumb, 40, of Parma, was charged with distribution of drugs and possession of a firearm in furtherance of a drug trafficking crime.





Isaiah Overton, 23, of Cleveland, and Charles Morris, 33, of East Cleveland, were charged in a single indictment with distribution of drugs. Additionally, Overton was charged with using and carrying a firearm during and in relation to a drug trafficking Crime.





Corte’z Buggs, 29, of Cleveland, was charged in an indictment with distribution of Drugs and receipt of firearm while under felony indictment.





Michael Mcpherran, 38, of Parma, was charged with conspiracy to distribute drugs and distribution of drugs.





Harold Pearl, 39, of Cleveland, was charged with distribution of drugs and being a felon in possession of a firearm.





Alante Heard, 33, of Cleveland; Antonio Sweeney, 24, of Cleveland; Maurice Commons, 22, of North Randall; and Markus Williams, 33, of Cleveland, were charged by complaint with conspiracy to possess with intent to distribute drugs and possession of a firearm in furtherance of a drug trafficking crime.





Marquis Henson, 38; Deon Brown, 19; and Clarence Payne, 38, all of Cleveland, were charged with being a felon in possession of a firearm.





Kenneth Smith, 23, of East Cleveland, was charged with engaging in the business of dealing firearms without a federal firearms license, illegal possession of a machinegun, and being a felon in possession of firearms.





Andre Lewis, 35, of Cleveland, was charged with distribution of drugs and using and carrying a firearm during and in relation to a drug trafficking crime.





Devaunty Lewis, 31, and Nicholas Johnson, 33, both of Cleveland, were charged jointly in an indictment with conspiracy to engage in the business of importing, manufacturing, or dealing in firearms without a federal firearms license, and conspiracy to engage in firearms trafficking. Both were individually charged with engaging business in dealing with firearms without a license and trafficking in firearms. Lewis was also charged with being a felon in possession of a firearm. Johnson was also charged with engaging in the business of importing, manufacturing, or dealing in firearms without a federal firearms license.





Maurice Sterett, 39, of Cleveland; Antonio Cross, 22, of Cleveland; Marvell Roach, 43, of Willoughby; Kenneth Timberlake, 30, of Cleveland; and Travis Williams, 46, of Cleveland, were charged in an indictment with conspiracy to engage in the business of importing, manufacturing, or dealing in firearms without a federal firearms license. Sterett, Cross, Timberlake, and Williams were further charged, individually, with engaging in the business of importing, manufacturing, or dealing in firearms without a federal firearms license. Sterett, Cross, Roach, Timberlake, and Williams were also charged with conspiracy to engage in firearms trafficking and individual counts of firearms trafficking. Sterett, Timberlake, Travis Williams, and Roach were also charged with being a felon in possession of firearms. Sterett was further charged with distribution of drugs. Cross was also charged with illegal transfer of a machinegun.





Darion Shelton, 20, of Cleveland, was charged with engaging in the business of dealing firearms without a federal firearms license, and trafficking in firearms in connection with machinegun conversation devices or “switches.” He has also been charged with illegal possession of a machinegun.





The following is a breakdown of the charges in the Cuyahoga County Court of Common Pleas, according to court documents:





Marcel Battle, 30, of Canton: drug trafficking;





Avant Wilson, 22, of Cleveland: receiving stolen property (motor vehicle);





Nathan Roby, 44, of Cleveland: drug trafficking;





Raymond Callahan, 34, of Cleveland: drug trafficking;





Raphael Deen, 30, of Cleveland: drug trafficking;





Terry Lyons, 33, of Cleveland: drug trafficking;





If convicted, a federal district court judge will determine any penalty after considering the U.S. Sentencing Guidelines and other statutory factors.

Attorney General Garland and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement. ATF Director Steven M. Dettelbach, U.S. Marshal Peter J. Elliott, and Cleveland Mayor Justin M. Bibb provided additional details relating to the initiative, as well as regarding larger firearms enforcement and violence-prevention efforts.

ATF investigated these cases, with assistance from the Cleveland Division of Police, U.S. Marshals Service, the Drug Enforcement Administration, FBI, Homeland Security Investigations, Ohio Bureau of Criminal Investigation, the Ohio Adult Parole Authority, Ohio Investigative Unit, Customs and Border Patrol, Air and Marine Division, Ohio State Highway Patrol, and the Cuyahoga County Sheriff’s Office.  

Assistant U.S. Attorney Kelly Galvin and other Assistant U.S. Attorneys for the Northern District of Ohio and the Cuyahoga County Prosecutor’s Office are prosecuting the cases.

An indictment or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A federal jury today convicted two Bucharest, Romania, residents of 21 counts related to their scheme to infect victim computers with malware in order to steal credit card and other information to sell on dark market websites, mine cryptocurrency and engage in online auction fraud, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Justin E. Herdman of the Northern District of Ohio.

Bogdan Nicolescu, 36, and Radu Miclaus, 37, were convicted after a 12-day trial of conspiracy to commit wire fraud, conspiracy to traffic in counterfeit service marks, aggravated identity theft, conspiracy to commit money laundering and 12 counts each of wire fraud.  Sentencing has been set for Aug. 14, 2019 before Chief Judge Patricia A. Gaughan of the Northern District of Ohio.

According to testimony at trial and court documents, Nicolescu, Miclaus, and a co-conspirator who pleaded guilty, collectively operated a criminal conspiracy from Bucharest, Romania.  It began in 2007 with the development of proprietary malware, which they disseminated through malicious emails purporting to be legitimate from such entities as Western Union, Norton AntiVirus and the IRS. When recipients clicked on an attached file, the malware was surreptitiously installed onto their computer.

This malware harvested email addresses from the infected computer, such as from contact lists or email accounts, and then sent malicious emails to these harvested email addresses.  The defendants infected and controlled more than 400,000 individual computers, primarily in the United States.

Controlling these computers allowed the defendants to harvest personal information, such as credit card information, user names and passwords.  They disabled victims’ malware protection and blocked the victims’ access to websites associated with law enforcement.

Controlling the computers also allowed the defendants to use the processing power of the computer to solve complex algorithms for the financial benefit of the group, a process known as cryptocurrency mining.

The defendants used stolen email credentials to copy a victim’s email contacts.  They also activated files that forced infected computers to register email accounts with AOL.  The defendants registered more than 100,000 email accounts using this method.  They then sent malicious emails from these addresses to the compromised contact lists.  Through this method, they sent tens of millions of malicious emails.

When victims with infected computers visited websites such as Facebook, PayPal, eBay or others, the defendants would intercept the request and redirect the computer to a nearly identical website they had created.  The defendants would then steal account credentials.  They used the stolen credit card information to fund their criminal infrastructure, including renting server space, registering domain names using fictitious identities and paying for Virtual Private Networks (VPNs) which further concealed their identities.

The defendants were also able to inject fake pages into legitimate websites, such as eBay, to make victims believe they were receiving and following instructions from legitimate websites, when they were actually following the instructions of the defendants.

They placed more than 1,000 fraudulent listings for automobiles, motorcycles and other high-priced goods on eBay and similar auction sites.  Photos of the items were infected with malware, which redirected computers that clicked on the image to fictitious webpages designed by the defendants to resemble legitimate eBay pages.

These fictitious webpages prompted users to pay for their goods through a nonexistent “eBay Escrow Agent” who was simply a person hired by the defendants.  Users paid for the goods to the fraudulent escrow agents, who in turn wired the money to others in Eastern Europe, who in turn gave it to the defendants.  The payers/victims never received the items and never got their money back.

This resulted in a loss of millions of dollars.

The Bayrob group laundered this money by hiring “money transfer agents” and created fictitious companies with fraudulent websites designed to give the impression they were actual businesses engaged in legitimate financial transactions.  Money stolen from victims was wired to these fraudulent companies and then in turn wired to Western Union or Money Gram offices in Romania.  European “money mules” used fake identity documents to collect the money and deliver it to the defendants. 

The FBI investigated the case, with assistance from the Romanian National Police.  Senior Counsel Brian Levine of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorneys Duncan T. Brown and Brian McDonough of the Northern District of Ohio prosecuted the case.  The Office of International Affairs also provided assistance in this case.

A federal jury in Little Rock, Arkansas, found Eric Scott Kindley, 52, a private prisoner transport officer, guilty of sexually assaulting two different women in his custody during two different transports in 2014 and 2017, and for knowingly possessing a firearm in furtherance of the 2017 sexual assault.

“The defendant was a prison transport officer who abused his law enforcement authority by sexually assaulting prisoners entrusted to his custody.  That is a federal crime, and the Department of Justice will vigorously investigate and prosecute law enforcement officers who unlawfully use their position to abuse those in their custody,”   said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “Today’s conviction was made possible by the brave women who testified about their abuse, and the tireless work of federal investigators and prosecutors over the last three years.”

"Kindley took advantage of his authority to exploit the very people he was entrusted with transporting across the country,” said Sean Kaul, Special Agent in Charge of the FBI Phoenix Field Office. “We commend the many victims, across the nation, who came forward to report this despicable crime. This conviction should serve as notice that anyone who uses their authority to exploit individuals in their custody, will be held accountable and the FBI will continue to aggressively pursue these types of cases. We would like to thank the FBI agents across the country whose tireless efforts helped bring Kindley to justice and the Department of Justice for their tremendous work on this case.”

Evidence at trial showed that Kindley operated a private prisoner transport company that contracted with local jails throughout the country to transport individuals who were arrested on out-of-state warrants. Kindley transported individuals alone, without any oversight, in his unmarked white minivan, often for hundreds of miles. The jury heard from six women whom he transported between 2013 and 2017, all of whom described Kindley’s pattern of conduct. Kindley transported them alone over long distances, handcuffed and shackled in the backseat of the van. Kindley forced them to listen to sexually explicit comments that escalated in intensity and depravity. Some women dealt with the comments by trying to make a joke of it; others attempted to talk back and end the comments, while others sat silently. In each instance, Kindley drove to desolate locations, putting the women in fear of being sexually assaulted, severely hurt, or worse.   

One of those women testified at trial that when Kindley transported her Alabama to Arizona in 2017, he stopped his van in a deserted area near Little Rock and sexually assaulted her while she was handcuffed, reminding her, as he did with other victims that she was “an inmate in transport” and that no one would believe her if she reported her. A second woman testified that when Kindley transported her in 2014, he stopped his van in a deserted area, also in Arkansas, and forced her to perform a sex act on him. A third woman testified that during her transport by Kindley in 2013 from Florida to Texas, he pulled his van over on the side of a dark road and sexually assaulted her. A fourth woman also testified that during her  2012 transport by from Nevada to California, Kindley stopped his van in a deserted park. He forced her to perform a sex act on him in a park bathroom. A fifth woman testified that during her 2013 transport from California to Montana, Kindley attempted to sexually assault her after he pulled over on the side of the road during a snowstorm. The jury heard testimony that none of the women who testified knew one another.

Kindley is also under indictment in the Central District of California for committing similar offenses related to his sexual assault of two other women in his custody in 2012 and 2017, and for brandishing a firearm during one of the sexual assaults. One of those women testified at this trial.

Kindley faces a maximum of life in prison. A sentencing date has not yet been set.

This case is being investigated by the Phoenix Division of the FBI with assistance from FBI field offices throughout the United States. It is being prosecuted by Special Litigation Counsel Fara Gold and Trial Attorney Maura White of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice, with assistance from the United States Attorney’s Offices for the Eastern District of Arkansas and the District of Arizona.

A Beverly Hills, California, resident pleaded guilty today to filing false tax returns which did not report his offshore accounts in Germany and Israel and did not report the income earned on those accounts, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman and U.S. Attorney Nicola T. Hanna of the Central District of California.    

According to the plea agreement and related court documents, Teymour Khoubian pleaded guilty to filing false tax returns for tax years 2009 and 2010 that failed to report foreign financial accounts in Germany and Israel, and failed to report income earned on those accounts. Between 2005 and 2012, Khoubian jointly owned multiple accounts at Bank Leumi in Israel with his mother that held between $15 million and $20 million. Additionally, since at least 2005, Khoubian also owned a foreign account at Commerzbank AG in Germany. Despite his ownership interest in these accounts and a legal requirement to declare all offshore accounts containing $10,000 or more, Khoubian prepared false tax returns for tax years 2005 through 2011 that did not fully disclose his foreign accounts, nor report all the interest income earned on those accounts. For instance, Khoubian’s Bank Leumi accounts generated interest income in excess of $4 million between 2005 and 2010, none of which was reported to the Internal Revenue Service (IRS).  The total tax loss associated with the Bank Leumi accounts is approximately $ 1.2 million. 

At least since 2009, Khoubian was aware of the IRS’s Offshore Voluntary Disclosure Program (the OVDP).  The OVDP allowed U.S. taxpayers to voluntarily disclose their previously unreported foreign accounts and pay a reduced penalty to resolve their civil liability for not declaring foreign accounts to U.S. authorities. During 2011 and 2012, Bank Leumi requested that Khoubian sign a Form W-9 for U.S. tax reporting purposes. In an August 13, 2012, recorded telephone conversation with a banker at Bank Leumi, Khoubian stated that the reason he did not want to sign a Form W-9, was "because you have to pay half of it."

In 2012 and 2014, Khoubian knowingly made multiple false statements to IRS special agents investigating his foreign accounts, including falsely stating that the Bank Leumi accounts were not in his name, that he did not own a bank account in Germany from 2005 to 2010, that he closed his German bank account and moved all of that money to the United States, and that none of the money in his German bank account was moved to Israel.      

As part of the plea agreement, Khoubian agreed to the entry of a civil judgment against him for an FBAR penalty in the amount of $7,686,004.  Khoubian further agreed to pay an additional $612,310 in restitution to the IRS.     

 Khoubian faces a maximum of three years in prison for each of the tax counts to which he pleaded guilty, as well as monetary penalties and a period of supervised release.                     

This case is being prosecuted by Trial Attorneys Christopher S. Strauss and Ellen M. Quattrucci of the Justice Department’s Tax Division, with the assistance of Assistant United States Attorney Robert Conte of the U.S. Attorney’s Office for the Central District of California, and was investigated by the Internal Revenue Service-Criminal Investigation.   

JOON LLC, d/b/a AJIN USA (Ajin), an auto-parts manufacturing company, was sentenced in federal court today in Montgomery, Alabama, after pleading guilty to a charge related to the death of a machinery operator.

Regina Elsea, who was 20 years old, worked at Ajin’s Cusseta, Alabama, facility.  On June 18, 2016, she entered an enclosure — called a “cell” — containing several robots and other pieces of machinery.  While she was inside the cell, troubleshooting a sensor fault, one of the machines started up and Elsea was struck by a robotic arm.  She died of her injuries. 

The Occupational Safety and Health Act (OSH Act) requires employers to develop and utilize procedures to de-energize machinery during maintenance and servicing activities to prevent the kind of unplanned startup that killed Elsea.  These procedures are often referred to as “lockout/tagout.”  Ajin knew these procedures were required and had developed them, but Ajin also knew that — over a period of at least two years — supervisors did not effectively enforce them.

In the 15 minutes prior to Elsea’s fatal injury — in the presence of their supervisors — workers entered cells to troubleshoot machinery without following lockout/tagout no less than five times, and the supervisors did not take any action to stop or reprimand them.  In two other instances, the supervisors themselves entered a cell without following lockout/tagout.  At the time of Elsea’s fatal injury, several individuals were inside the cell, none of whom had followed lockout/tagout procedures to de-energize the machinery within the cell.

Ajin pleaded guilty to a willful violation of the OSH Act standard requiring the use of lockout/tagout procedures.  U.S. Magistrate Judge Stephen Michael Doyle sentenced Ajin to pay a $500,000 fine — the statutory maximum — $1,000,000 in restitution to Elsea’s estate, and a three-year term of probation, during which Ajin must comply with a safety compliance plan, overseen by a third-party auditor.  Among other things, the safety compliance plan requires a full review of Ajin’s lockout/tagout procedures, weekly inspections to ensure compliance, and creation of a mechanism for employees to report any safety concerns about the facility anonymously.

“Regina’s tragic death was preventable,” said Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division.  “OSH Act standards exist to protect American workers, but employers must actually implement them.  When safety policies exist only on paper, tragedies like this occur.  Ajin knew its supervisors and managers were turning a blind eye to the company’s safety procedures.  Now, Ajin must take responsibility for its conduct.  It will implement the safety compliance plan, and work to make its facility safer for its employees.  Employers should be aware that they must follow workplace safety laws.” 

“Every worker expects to return home safely at the end of his or her shift,” said U.S. Attorney Louis V. Franklin Sr. of the Middle District of Alabama.  “The OSH Act was passed to ensure that workers could trust that their employers create and maintain a safe work environment.  While most companies abide by the OSH Act, the unfortunate reality is that some of them do not.  Ajin failed to comply with the OSH Act and, as a direct result of their failure, Regina Elsea did not return home safely at the end of her shift.  Her death was preventable and Ajin’s failure to keep her out of harm’s way is inexcusable.  I hope this prosecution sends a message to companies that people are their most valuable resource and complying with the OSH Act is a must in protecting its employees.” 

“Employers are responsible for worker safety and health, and the failure in this situation was tragic,” said Principal Deputy Assistant Secretary of Labor for Occupational Safety and Health Loren Sweatt.  “Well-known safety procedures were repeatedly ignored that could have prevented this tragedy.  While nothing can ever replace the loss of life, the court has sent a clear message that such disregard for worker safety is unacceptable.”

The case was prosecuted by Assistant U.S. Attorney Stephanie Billingslea and former Assistant U.S. Attorney Ben M. Baxley of the Middle District of Alabama and Trial Attorney Erica H. Pencak of the Environment and Natural Resources Division’s Environmental Crimes Section.  The case was investigated by the U.S. Department of Labor Office of Investigations.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

Three people are now in custody in relation to the fatal raid that occurred in January 2019 on Harding Street in Houston, Texas, announced Assistant Attorney General Eric Dreiband of the Department of Justice’s Civil Rights Division, U.S. Attorney Ryan K. Patrick for the Southern District of Texas and Special Agent in Charge Perrye K. Turner of the FBI.

A federal grand jury returned the nine count indictment Nov. 14 against Gerald M. Goines, 55, and Steven M. Bryant, 46, both former Houston Police Department (HPD) officers. Also charged is Patricia Ann Garcia, 53. All are residents of Houston. The indictment was unsealed this morning as authorities took all three into custody. They are expected to make their initial appearances before U.S. Magistrate Judge Dena H. Palermo at 2 p.m. central time.

The federal indictment stems from the Jan. 28 narcotics raid HPD conducted on the 7800 block of Harding Street in Houston. The enforcement action resulted in the deaths of two residents at that location. 

Goines is charged with two counts of depriving the victims’ constitutional right to be secure against unreasonable searches. The indictment alleges Goines made numerous materially false statements in the state search warrant he obtained for their residence. The execution of that warrant containing these false statements resulted in the death of the two individuals as well as injuries to four other persons, according to the indictment.

Goines and Bryant are charged with obstructing justice by falsifying records. Goines allegedly made several false statements in his tactical plan and offense report prepared in connection with that search warrant. The indictment alleges Bryant falsely claimed in a supplemental case report he had previously assisted Goines in the Harding Street investigation. Bryant allegedly identified a brown powdery substance (heroin) he retrieved from Goines’ vehicle as narcotics purchased from the Harding Street residence Jan. 27.

Goines is further charged with three separate counts of obstructing an official proceeding. The federal grand jury alleges Goines falsely stated Jan. 30 that a particular confidential informant had purchased narcotics at the Harding Street location three days prior. He also falsely stated Jan. 31 that a different confidential informant purchased narcotics at that residence that day, according to the charges. On Feb. 13, he also falsely claimed he had purchased narcotics at that residence on that day. The indictment alleges none of these statements were true.

The charges against Garcia allege she conveyed false information by making several fake 911 calls. Specifically, on Jan. 8, she allegedly made several calls claiming her daughter was inside the Harding Street location. According to the indictment, Garcia added that the residents of the home were addicts and drug dealers and that they had guns – including machine guns – inside the home. The charges allege none of Garcia’s claims were true.

If convicted of the civil rights charges, Goines faces up to life in prison. Each obstruction count carries a potential 20-year sentence, while Garcia faces a five-year term of imprisonment for conveying false information.

The FBI is conducting the investigation. Assistant U.S. Attorneys Alamdar S. Hamdani, Arthur R. Jones and Sharad S. Khandelwal, and Special Litigation Counsel Jared Fishman of the Department of Justice’s Civil Rights Division, are prosecuting the case. 

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

A Massachusetts man was sentenced yesterday to 33 months in prison followed by two years of supervised release for a scheme to illegally export defense technical data to foreign nationals in Turkey in connection with the fraudulent manufacturing of parts and components used by the U.S. military, in violation of the Arms Export Control Act. The U.S. Department of Defense (DOD) later determined that some of the parts were substandard and unsuitable for use by the military.

On Aug. 10, 2022, Arif Ugur, 53, of Cambridge, pleaded guilty to two counts of wire fraud, two counts of violating the Arms Export Control Act and one count of conspiring to violate the Arms Export Control Act.

“The defendant willfully defrauded the Department of Defense and gave access to controlled defense information to individuals in a foreign country for personal gain,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “This type of brazen disregard for our export control laws threatens our military readiness and technological advantage and will not be tolerated by this department.”

According to court documents, in 2015, Ugur, founded and was the sole managing partner of the Anatolia Group Limited Partnership (Anatolia), a domestic limited partnership registered in Massachusetts. Beginning in approximately July 2015, Ugur bid on and acquired numerous contracts to supply the DOD with various parts and components intended for use by the U.S. military. Many of these contracts required that the parts be manufactured in the United States. Both in bids submitted to DOD and in subsequent email communications with DOD representatives, Ugur falsely claimed that Anatolia was manufacturing the parts in the United States. In fact, Anatolia was a front company with no manufacturing facilities whatsoever. Unbeknownst to DOD, Ugur contracted with a company in Turkey to make the parts and then passed them off to DOD as if they had been manufactured by Anatolia in the United States. Because they had not been manufactured in the United States in accordance with the contacts, Ugur failed to allow DOD to inspect the parts prior to delivery to the U.S. military. Many of the parts were substandard and some could not be used at all.

To enable the Turkish company to manufacture the parts, Ugur shared technical specifications and drawings of the parts with his co-conspirators overseas, some of whom were employees of the Turkish company. Ugur also provided his overseas co-conspirators with access to DOD’s online library of technical specifications and drawings. Because of their military applications, many of these parts were designated as Defense Articles under the International Traffic in Arms Regulations (ITAR) and the United States Munitions List (USML). Thus, an export license was required to export the parts and related technical data (blueprints, specifications, etc.) from the United States to Turkey. Ugur knew of these restrictions, but nonetheless exported technical data controlled under the ITAR and USML to employees of the Turkish manufacturer without an export license.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division; U.S. Attorney Rachael S. Rollins for the District of Massachusetts; Special Agent in Charge Patrick J. Hegarty of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; Special Agent in Charge Matthew B. Millhollin of Homeland Security Investigations in Boston; and Acting Special Agent in Charge Rashel Assouri of the U.S. Department of Commerce Office of Export Enforcement, Boston Field Office made the announcement.

Assistant U.S. Attorneys Jason A. Casey and Timothy H. Kistner for the District of Massachusetts prosecuted the case.

Four Peruvian residents have been extradited to the United States, where they stand accused of operating a large-scale extortion scheme from 2012 through 2015, the Justice Department and U.S. Postal Inspection Service today announced. 

Jesus Gerardo Gutierrez Rojas, 37, Maria de Guadalupe Alexandra Podesta Bengoa, 38, Virgilio Ignacio Polo Davila, 43, and Omar Alfredo Portocarrero Caceres, 39, face federal charges in Miami. Peruvian authorities arrested the four in late 2017, based upon a U.S. indictment. All four remained incarcerated in Peru since the time of their arrest. Peru approved their extradition to the U.S. on Jan. 18, 2019.

“The Department of Justice will pursue criminals who target and extort U.S. consumers, wherever they are,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Those who extort U.S. consumers by phone cannot escape justice by placing their calls from abroad. I thank the Republic of Peru for extraditing these individuals to face charges in U.S. courts.”  

“Individuals who defraud American consumers will be brought to justice, no matter where they are located,” said U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida. “Protecting the elderly and vulnerable members of our community from extortion schemes, such as this one, is a top priority of this Office and the Department of Justice, and I thank the U.S. Postal Inspection Service for their unwavering commitment to rid the U.S. mail system of these schemes. This is a reminder to our community to be wary of those individuals who threaten imprisonment, a negative credit score or a change in immigration status; please report those threats immediately.”

“The U.S. Postal Inspection Service will continue to aggressively investigate and pursue those who threaten U.S. consumers and extort them of their hard earned money, regardless of what country they operate from,” said U.S. Postal Inspector in Charge Antonio J. Gomez. “The U.S. Postal Inspection Service appreciates the continued partnership with the Department of Justice’s Consumer Protection Branch in pursuing South American call center operators who victimize consumers through the U.S. mail.” 

Podesta, Polo, and Portocarrero allegedly managed and operated Peruvian call centers that placed calls to Spanish-speaking consumers across the United States while lying and threatening them into paying fraudulent settlements for nonexistent debts. Many of the consumer victims were elderly. Gutierrez was allegedly the general manager of a larger company where he worked in partnership with Podesta, Polo, and Portocarrero to facilitate their extortion scheme. The defendants’ associates in Miami collected the payments and sometimes shipped packages to victims in the U.S. 

According to the allegations in the indictment, Podesta, Polo, Portocarrero, and their employees in Peru used Internet-based telephone calls and claimed to be attorneys and government representatives to threaten victims in the United States. The callers falsely claimed that victims failed to pay for or receive a delivery of products. The callers also falsely claimed that victims would be sued and that the companies would obtain large monetary judgements against them. Some victims were also threatened with negative marks on their credit reports, imprisonment, or immigration status. The callers said these threatened consequences could be avoided if the victims immediately paid “settlement fees.” Many victims made monetary payments based on these baseless threats.  

A 34-count federal indictment was filed against the defendants in the U.S. District Court for the Southern District of Florida on Dec. 6, 2016, and was unsealed upon the defendants’ extradition to the U.S. The defendants are approved to face 12 extortion counts pending against them. An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The case is being prosecuted by Trial Attorney Phil Toomajian of the Department of Justice’s Consumer Protection Branch. The Postal Inspection Service investigated the case. The Criminal Division’s Office of International Affairs, the U.S. Attorney’s Office of the Southern District of Florida, the Diplomatic Security Service, and the Peruvian National Police provided critical assistance. 

A federal judge in Greeneville, Tennessee, sentenced two Florida men for their roles in a multimillion-dollar health care fraud scheme.

Peter Bolos, 44, of Tampa, was convicted by a federal jury in December 2021 of conspiracy to commit health care fraud, 22 counts of mail fraud and introduction of a misbranded drug into interstate commerce. U.S. District Judge J. Ronnie Greer sentenced Bolos to 14 years in prison and ordered him to pay more than $24.6 million in restitution and $2.5 million in forfeiture. The court also sentenced Bolos’s co-defendant, Michael Palso, 48, of Tampa, to 33 months in prison and ordered him to pay more than $24.6 million in restitution. Palso previously pleaded guilty to his role in the conspiracy, as did 14 other defendants in related cases. The remaining defendants are scheduled to be sentenced later this week.

According to court documents and evidence presented at trial, Bolos, Palso and their co-conspirators, Andrew Assad, Scott Roix, Larry Smith, Mihir Taneja, Arun Kapoor and Maikel Bolos, as well as various other 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.

“The significant sentences imposed by the court are a reflection of the gravity of the crimes that the defendants in this case committed,” 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.”

“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. “This significant sentence 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 sentencing 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.”

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 Scott 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. 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. 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 established that during the conspiracy, which lasted from May 2015 through April 2018, Bolos and Palso, along with co-defendant Andrew Assad, paid Roix millions of dollars to buy at least 60,000 invalid prescriptions generated by HealthRight. Bolos selected specific medications for the prescriptions that he could submit for profitable reimbursements at inflated prices. In addition, Bolos, Palso, and Assad used illegal means to hide his activity from the PBMs so that they could remain undetected.

The sentencings for the remaining defendants — all of whom pleaded guilty prior to trial — are scheduled to occur later this week. Larry Smith, Alpha-Omega Pharmacy, Germaine Pharmacy, Zoetic Pharmacy, Tanith Enterprises LLC, ULD Wholesale Group and Taneja will be sentenced on May 17. Kapoor, Sterling Knight Pharmaceuticals and Maikel Bolos will be sentenced on May 18. Assad, Roix and HealthRight LLC will be sentenced on May 19. All of the sentencings will occur before Judge Greer in the U.S. District Court for the Eastern District of Tennessee at Greeneville.

The trial verdict and plea agreements 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.   

Attorney General William P. Barr announced today the appointment of Timothy Shea as Interim U.S. Attorney for the District of Columbia, pursuant to 28 U.S.C. § 546, effective February 3. The Office is the largest U.S. Attorney’s Office in the country, serving as both the local and the federal prosecutor for the nation’s capital, with over 300 attorneys responsible for litigation before over 100 judges in federal and local courts.

“I am pleased to appoint Tim Shea as Interim U.S. Attorney for the District of Columbia. Tim brings to this role extensive knowledge and expertise in law enforcement matters as well as an unwavering dedication to public service, reflected in his long and distinguished career in state and federal government,” said Attorney General William P. Barr. “His reputation as a fair prosecutor, skillful litigator, and excellent manager is second-to-none, and his commitment to fighting violent crime and the drug epidemic will greatly benefit the city of Washington. I would also like to express my gratitude to Jessie Liu, who has served with distinction as U.S. Attorney for the District of Columbia since 2017, and has been nominated to a new role at the Department of the Treasury.”

Shea served as Associate Deputy Attorney General from 1990-1992 and as Counselor to the Attorney General since 2019. In both roles, he advised the Attorney General on law enforcement operations, criminal justice policy, and management issues affecting the Department. He recently spearheaded the Department’s Operation Relentless Pursuit, a crackdown targeting violent crime in seven U.S. cities.

From 1992-1997, Shea served as an Assistant U.S. Attorney in the Eastern District of Virginia where he prosecuted federal criminal cases, including violent crimes, drug trafficking, fraud cases, perjury and obstruction of justice investigations, federal tax fraud and evasion cases, civil rights matters, and public corruption cases. He headed the Task Force responsible for investigating and prosecuting crimes at the District of Columbia correctional facilities at Lorton, supervising AUSAs and D.C. government attorneys. He was also the coordinator for matters related to the Criminal Enforcement Child Support.

In state government, Shea served as the Chief of Public Protection Bureau in the Massachusetts Attorney General’s office where he managed several divisions staffed by attorneys and investigators. In that position, he was responsible for the enforcement of state law related to consumer protection, civil rights, antitrust, regulated industries, insurance rate setting, telecommunications, energy, environment, public charities, and elder protection. Shea also served in Congressional roles, including as Chief Counsel and Staff Director of the U.S. Senate Permanent Subcommittee on Investigations under the chairmanship of Senator Susan Collins and on the U.S. House Appropriations Committee professional staff under Ranking Republican Member Silvio O. Conte. During his 20 years of private practice, Shea served as Of Counsel for Bingham McCutchen and Morgan Lewis, handling complex civil litigation.

Shea earned his J.D. degree magna cum laude in 1991 from the Georgetown University Law Center where he was elected to the Order of the Coif. He was also a senior staff member of the America Criminal Law Review. He received his B.A. degree magna cum laude from Boston College in 1982 where he received the Kenealy Award for Academic Excellence.

SHERMAN, Texas – An Oklahoma City, OK woman has been convicted of various federal crimes related to an international drug trafficking conspiracy in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Debra Lynn Mercer-Erwin, 60, was found guilty by a jury following a two-week trial before U.S. District Judge Amos Mazzant.  Mercer-Erwin was convicted of money laundering; wire fraud; conspiracy to manufacture and distribute cocaine; and conspiracy to manufacture and distribute cocaine knowing it would be imported into the United States.

“In the aircraft world, planes registered in the United States and displaying a ‘N’ tail-number, are coveted as being properly vetted and trusted to legally operate around the world.  Mercer-Erwin found ways to exploit the registration process in order to profit from illegally obtained money being paid for her services,” said U. S. Attorney Featherston.  “Mercer-Erwin became a drug dealer when she became aware of planes she had registered were being used to transport large quantities of cocaine.   Mercer-Erwin knew that many of her clients were in the illegal drug business and she hid their identities and the sources of their money in order to reap a large profit.  She became a money launderer when she created fake sales of planes that were not actually for sale in order to hide and move drug money.  Transnational criminal organizations require assistance to operate in the U.S. and Mercer-Erwin facilitated the drug dealing by exploiting the plane registration process.”

“This investigation required cooperation between our international partners, investigating agents and our prosecutors,” added U.S. Attorney Featherston.  “They did an amazing job putting the case together, and they are to be commended for their work.”

“This guilty verdict stems from the collaborative efforts of our trusted international, federal, state and local law enforcement partners,” said Lester R. Hayes Jr., Special Agent in Charge HSI Dallas. “Disrupting the illegal activities of transnational criminal organizations is one of HSI ‘s highest priorities and is enhanced by our partnerships at all levels. After listening to testimony of high-ranking leaders of the Columbian and Nicaraguan governments, I am convinced this investigation has significantly decreased the flow of narcotics smuggled into the U.S.”

“This investigation and successful prosecution serves as an example of how federal, state, and international law enforcement agencies work together to take down those involved in large scale money laundering in support of international drug trafficking organizations,” said Special Agent in Charge Trey McClish of the Dallas Field Office of the Department of Commerce’s Office of Export Enforcement (OEE).   “OEE and our law enforcement partners will continue to identify, investigate, and dismantle transnational criminal organizations who pose a threat to our national security.” 

According to information presented in court, between 2010 and 2020, Mercer-Erwin conspired with others to enable the distribution of cocaine in the United States by purchasing and illegally registering aircraft under foreign corporations and other individuals for export to other countries.  Non-US citizens are allowed to register an aircraft with the FAA if the aircraft is placed in a trust that is managed by a U.S. trustee. Mercer-Erwin was the owner of Wright Brothers Aircraft Title (WBAT) and Aircraft Guaranty Corporation (AGC). WBAT often served as an escrow agent for transactions involving AGC and was the designated party responsible for FAA filings related to AGC aircraft. AGC, a corporation at that time operating out of Onalaska, Texas, an east Texas town in the Eastern District of Texas, without an airport.  AGC acted as trustee to over 1,000 aircrafts with foreign owners. This allowed the foreign nationals to receive an “N” tail number for their aircrafts. The “N” tail number is valuable because foreign countries are less likely to inspect a U.S.-registered aircraft for airworthiness or force down an American aircraft.   

According to prosecutors, several of the illegally registered and exported aircraft were used by transnational criminal organizations in Colombia, Venezuela, Ecuador, Belize, Honduras, Guatemala, and Mexico to smuggle large quantities of cocaine destined for the United States.  The illicit proceeds from the subsequent drug sales were then transported as bulk cash from the United States to Mexico and used to buy more aircraft and cocaine. Aircraft purchases were typically completed by foreign nationals working for transnational criminal organizations who came to the United States with drug proceeds and purchased aircraft valued in the hundreds of thousands of dollars. 

Mercer-Erwin exploited her position as trustee to circumvent U.S. laws by disguising the true identity of the foreign owners, failing to conduct due diligence as to the identity of the foreign owners, providing false aircraft locations, and falsifying and forging documents. Trial testimony revealed the investigation was initiated after aircraft filing irregularities were discovered in tandem with numerous AGC aircraft found carrying substantial amounts of cocaine. The testimony further revealed additional aircraft in AGC’s trust were not seized but found by foreign officials destroyed or abandoned near clandestine landing strips in several South American countries. Some of these wrecked or abandoned aircraft still contained muti-ton kilos of cocaine onboard, and few, if any, of the seized or destroyed aircraft were in the location they were reported to be located. When authorities confronted Mercer-Erwin as the representative of AGC, she refused to comply and each time law enforcement would seize an AGC registered aircraft laden with drugs, Mercer-Erwin attempted to distance herself from the narcotic’s trafficking by transferring ownership of the aircraft using fictitious information to conceal the nature, location, source, ownership, and control of the aircraft. 

Additionally, Mercer-Erwin and co-defendants participated in a series of bogus aircraft sales transactions in order to conceal the movement of illegally obtained funds. The co-defendants would provide buyers and investors with fabricated documents and supply false representations regarding the bogus sale of an unsellable aircraft. The aircraft was unsellable because, unbeknownst to the buyers, the true owners of the aircraft had no knowledge or intention of selling the aircraft. Other bogus sales presented to buyers consisted of aircraft that was owned by a commercial airline and previously decommissioned and inoperable. None of the aircraft presented to the buyers were for sale.

The defendants would convince the buyer to place a deposit into an escrow account with WBAT, the title company owned by Mercer-Erwin, pending the completion of the sale. Once the money was placed in WBAT’s escrow account, the buyers were responsible for the interest accrued, and an escrow fee would be charged. In a typical sale, the deposit would remain in the escrow account. However, Mercer-Erwin would transfer the money from the escrow account to bank accounts controlled by the co-conspirators.

Since the aircraft was not truly for sale, the purchase of the aircraft would inevitably fall through, and the deposit would have to be returned. The co-conspirators would repeat the process by luring another buyer for the purchase of another unsellable aircraft. Each transaction would pay for the previous one, and Mercer-Erwin would receive an escrow fee ranging from $25,000 to $150,000 for her participation in the scheme.

Mercer-Erwin was the only defendant to proceed to trial. Co-defendants Kayleigh Moffett and Carlos Rocha Villaurrutia pleaded guilty on April 10, 2023. Moffett pleaded guilty to wire fraud and conspiracy to commit export violations, and Villaurrutia pleaded guilty to conspiracy to manufacture and distribute cocaine knowing it would be unlawfully imported into the United States; conspiracy to commit money laundering; and conspiracy to commit export violations. Four other defendants have active arrest warrants but are not in custody and are presumed innocent until proven guilty.

Mercer-Erwin was indicted by a federal grand jury in February 2021.  She faces up to life in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This is an Organized Crime Drug Enforcement Task Force (OCDETF) case and is being investigated by Homeland Security Investigations (Dallas, Brownsville, Laredo, Guatemala, Colombia, Honduras, Mexico, and Transnational Criminal Investigative Units); Department of Commerce, Bureau of Industry and Security (Dallas and Houston offices); Department of Transportation Office of Inspector General (DOT-OIG); Office of Export Enforcement; Polk County Constable Precinct 1; Southeast Texas Export Investigations Group; Internal Revenue Service; Federal Aviation Administration (FAA); Estado Mayor De La Defensa Nacional Guatemala; Fuerza Aerea Guatemalteca; and Fuerza Aerea Colombiana.  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 was prosecuted by Assistant U.S. Attorneys Ernest Gonzalez, Heather Rattan, and Lesley Brooks. 

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Two biofuel company owners were sentenced to prison for conspiracy and making false statements to the U.S. Environmental Protection Agency (EPA) and conspiracy to defraud the IRS and preparing a false tax claim.  

U.S. District Judge John E. Jones III sentenced Ben Wootton, 55 of Savannah, Georgia, to 70 months and Race Miner, 51, of Marco Island, Florida, to 66 months, after a jury convicted both defendants and their company, Keystone Biofuels Inc. (Keystone), in April 2019.  The company was originally located in Shiremanstown, Pennsylvania, and later in Camp Hill, Pennsylvania.  Miner was the founder and chief executive officer of Keystone.  Wootton was president of Keystone, and a former member of the National Biodiesel Board.  The court ordered both men to pay restitution of $4,149,383.41 to the IRS and restitution of $5,076,376.07 to the Pennsylvania Department of Environmental Protection.  Wootton and Miner will also have to serve a three-year term of supervised release after their term of imprisonment.  Keystone was sentenced to five years’ probation and ordered to pay restitution of $4,149,383.41 to the IRS and restitution of $5,076,376.07 to the Pennsylvania Department of Environment Protection criminal fine.

“The EPA and IRS renewable fuels incentive programs are important components of the Congressional program to increase the use of biofuels to benefit the environment,” said Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division.  “Today’s sentences are a strong reminder that the federal government will not allow supposed “green” conmen to illegally take advantage of federal and state programs that are meant to offer financial incentives to enhance the environment and energy sustainability.”

“The complex fraud perpetrated by the defendants in this case struck directly at the heart of a government program that was specifically created to benefit the environment, business owners and the community at large,” said U.S. Attorney David J. Freed of the Middle District of Pennsylvania.  “Encouraging companies to develop and provide for sale clean renewable fuels is truly a win-win proposition for everyone.  Unfortunately, the defendants used this program to benefit only themselves.  Today’s sentences send a clear message that my office, our federal partners and the United States Department of Justice will not tolerate renewable fuels fraud and related offenses.”

“The defendants defrauded the IRS and sought to profit from a system intended to protect the environment,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.  “The Tax Division will continue to aggressively investigate and prosecute with our partners such tax crimes.”

“Today’s sentencing demonstrates there are real penalties for those defrauding the Renewable Fuel Standard (RFS) program,” said Jessica Taylor, Director of the EPA’s criminal enforcement program. “With this action EPA and its enforcement partners are continuing to protect both the integrity of the RINs program and the American taxpayer.”  

“Wootton and Miner actively engaged in a multimillion-dollar scheme designed to rob the government and line their own pockets.  Today, they learned there is a steep price to be paid for such greed,” said Jim Lee, Chief, IRS Criminal Investigation (IRS-CI).  “It is the partnerships between IRS-CI and other federal agencies like the EPA that allow cases like this to come to fruition, holding accountable those who seek to enrich themselves through fraudulent means.”    

“The only green resource these two cared about was money, and they told lie after lie to perpetuate their fraud,” said Special Agent in Charge Michael J. Driscoll of the FBI's Philadelphia Field Office. “Fair warning to anyone else seeking to scam the U.S. government and taxpayers like this: the FBI and our partners stand ready to investigate and hold you accountable as well.”

Wootton, Miner, and Keystone falsely represented that they were able to produce a fuel meeting the requirements set by the American Society for Testing and Materials (ASTM) for biodiesel (a renewable fuel) and adopted by the EPA, and as such were entitled to create renewable fuel credits, known as RINs, based on each gallon of renewable fuel produced.  The fuel and the RINs have financial value and could be sold and purchased by participants within the federal renewable fuels commercial system. 

Wootton and Miner were also convicted of fraudulently claiming federal tax refunds based on IRS’s Biofuel Mixture Credit.  The Biodiesel Mixture Credit is a type of “blender’s credit” for persons or businesses who mix biodiesel with diesel fuel and use or sell the mixture as a fuel.  Wootton and Miner caused Keystone to fraudulently claim tax refunds based on non-qualifying fuel and, in at least some instances, non-existent or non-mixed fuel.  In an attempt to hide their fraud scheme, the men created false corporate books and records and sham financial transactions to account for the nonexistent and non-qualifying fuel, and to create the appearance of legitimacy.

The prosecution of Wootton, Miner and Keystone is the first prosecution of a case under the federal renewable fuels program based on fuel that did not meet the program renewable fuel quality standards. 

The case was prosecuted by Senior Litigation Counsel Howard P. Stewart of the Environment and Natural Resources Division’s Environmental Crimes Section, Assistant U.S. Attorney Geoffrey MacArthur, Special Assistant U.S. Attorney David Lastra, and Trial Attorneys Mark Kotila and Michael C. Vasiliadis of the Tax Division.  EPA Region III Criminal Investigation Division, IRS Criminal Investigation and the FBI Philadelphia’s Harrisburg Resident Agency investigated the matter.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.