BOSTON – A Hingham man pleaded guilty today in U.S. District Court in Boston in connection with defrauding neighbors and other acquaintances by agreeing to invest their money which he then stole for his own use or to pay off earlier investors.

 

Stephen S. Eubanks, 48, pleaded guilty today to one count of wire fraud after being charged and arrested in November 2016. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for July 11, 2017.

 

In February 2010, Eubanks opened Eubiquity Capital LLC, a hedge fund that, by 2016, took in approximately $529,000 in investor funds. Eubanks was previously a registered broker with several large brokerage firms, but was terminated in the wake of customer complaints and other disciplinary issues. In 2013 and 2014, Eubanks nonetheless told two acquaintances that he was a registered financial advisor running a hedge fund affiliated with Goldman Sachs, TD Ameritrade, UBS Bank and Fidelity Investments. One of the acquaintances invested $125,000 with Eubanks, while the other invested $20,000. A third person, living in Florida, invested $50,000 with Eubanks in 2013.

 

Eubanks invested some of his clients’ funds, but used a significant portion for personal expenses. Moreover, when asked for account statements summarizing the fund’s performance, Eubanks fabricated account statements or used account statements from unrelated accounts to deceive his clients into believing that their money had earned a healthy return. In some instances, Eubanks ran the fund as a Ponzi scheme, using money deposited with him by newer investors to pay returns to earlier investors. Eubanks defrauded 32 people of approximately $435,000.

 

The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

 

Acting United States Attorney William D. Weinreb; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The Massachusetts Securities Division, which conducted an earlier civil investigation of Eubanks, provided significant assistance to the U.S. Attorney’s Office.

 

Assistant U.S. Attorney Andrew E. Lelling of Weinreb’s Economic Crimes Unit is prosecuting the case.

 

The Justice Department filed a civil claim today in the U.S. District Court for the District of Maryland against Grace Ocean Private Limited and Synergy Marine Private Limited, the Singaporean corporations that owned and operated the container ship that destroyed the Francis Scott Key Bridge.

In the early morning hours of March 26, the Motor Vessel DALI left the Port of Baltimore bound for Sri Lanka. While navigating through the Fort McHenry Channel, the vessel lost power, regained power, and then lost power again before striking the bridge. The bridge collapsed and plunged into the water below, tragically killing six people. In addition to this heartbreaking loss of life, the wreck of the DALI and the remnants of the bridge obstructed the navigable channel and brought all shipping into and out of the Port of Baltimore to a standstill. The loss of the bridge also severed a critical highway in our transportation infrastructure and a key artery for local commuters.

The suit seeks to recover over $100 million in costs the United States incurred in responding to the fatal disaster and for clearing the entangled wreck and bridge debris from the navigable channel so the port could reopen.

“The Justice Department is committed to ensuring accountability for those responsible for the destruction of the Francis Scott Key Bridge, which resulted in the tragic deaths of six people and disrupted our country’s transportation and defense infrastructure,” said Attorney General Merrick B. Garland. “With this civil claim, the Justice Department is working to ensure that the costs of clearing the channel and reopening the Port of Baltimore are borne by the companies that caused the crash, not by the American taxpayer.”

The United States led the response efforts of dozens of federal, state, and local agencies to remove about 50,000 tons of steel, concrete, and asphalt from the channel and from the DALI itself. While these removal operations were underway, the claim alleges that the United States also cleared a series of temporary channels to start relieving the bottleneck at the port and mitigate some of the economic devastation caused by the DALI. The Fort McHenry Channel was cleared by June 10, and the Port of Baltimore was once again open for commercial navigation.

“The owner and operator of the DALI were well aware of vibration issues on the vessel that could cause a power outage. But instead of taking necessary precautions, they did the opposite,” said Principal Deputy Associate Attorney General Benjamin C. Mizer. “Out of negligence, mismanagement, and, at times, a desire to cut costs, they configured the ship’s electrical and mechanical systems in a way that prevented those systems from being able to quickly restore propulsion and steering after a power outage. As a result, when the DALI lost power, a cascading set of failures led to disaster.”

Indeed, the lawsuit specifically asserts that none of the four means that should have been available to help steer the DALI — the propeller, rudder, anchor, or bow thruster — worked when they were needed to avert or even mitigate this disaster.

“This was an entirely avoidable catastrophe, resulting from a series of eminently foreseeable errors made by the owner and operator of the DALI,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. "The suit seeks to recover the costs incurred by the United States in responding to this disaster, which include removing the bridge parts from the channel and those parts that were entangled with the vessel, as well as abating the substantial risk of oil pollution.”

“In so many ways, the Key Bridge has symbolized the resilience of both the State of Maryland and our Nation. In a very real way, the Key Bridge was a pathway to the American Dream. A part of our culture is gone,” said U.S. Attorney Erek L. Barron for the District of Maryland. “Those responsible for the Key Bridge collapse will be held accountable.” 

The Justice Department’s claim also seeks punitive damages to deter the owner and operator of the DALI and others. During a press call announcing the Justice Department’s actions, Acting Deputy Assistant Attorney General Chetan Patil of the Civil Division explained, “This accident happened because of the careless and grossly negligent decisions made by Grace Ocean and Synergy, who recklessly chose to send an unseaworthy vessel to navigate a critical waterway and ignored the risks to American lives and the nation’s infrastructure.”

The Department’s claim is part of a legal action the owner and operator of the DALI initiated shortly after the tragedy, in which they seek exoneration or limitation of their liability to approximately $44 million.  

“Wholly preventable failures by the owner and operator of the DALI caused this tragic incident that cost six bridge construction workers their lives and closed one of the largest ports on the East Coast,” said Rear Admiral Laura M. Dickey, Deputy for Operations Capability and Policy of the U.S. Coast Guard. “The Coast Guard quickly responded by establishing a Unified Command with federal, state, and local stakeholders to rapidly open alternative channels and restore the Port of Baltimore to full operations in just over two months. We stand ready to support the Justice Department to ensure that those responsible for this tragedy pay the costs of reopening the Port.”  

The claim on behalf of the United States does not include any damages for the reconstruction of the Francis Scott Key Bridge. The State of Maryland built, owned, maintained, and operated the bridge, and attorneys on the State’s behalf may file their own claim for those damages. Subsequently, pursuant to the governing regulation, funds recovered by the State of Maryland for reconstruction of the bridge will be used to reduce the project costs paid by federal taxpayer dollars.

The United States is represented in the filed action by attorneys from the Civil Division’s Aviation, Space & Admiralty Litigation Section and from the U.S. Attorney’s Office for the District of Maryland, Baltimore Division.

The claims alleged by the United States are allegations only. There has been no determination of liability.

Complaint

BOSTON – A Hingham man was sentenced today in federal court in Boston for defrauding neighbors and other acquaintances of approximately $437,000.

 

Stephen S. Eubanks, 48, was sentenced by U.S. District Court Chief Judge Patti B. Saris to 30 months in prison, three years of supervised release, and ordered to pay $437,609 in restitution to his victims. In April 2017, Eubanks pleaded guilty to one count of wire fraud.

 

In February 2010, Eubanks opened Eubiquity Capital LLC, a hedge fund that took in over $700,000 in investor funds by 2016. Eubanks was previously a registered broker with several large brokerage firms, but was terminated in the wake of customer complaints and other disciplinary issues. In 2013 and 2014, Eubanks nonetheless presented himself to acquaintances as a financial advisor running a hedge fund affiliated with Goldman Sachs, TD Ameritrade, UBS Bank and Fidelity Investments. One of the acquaintances invested $125,000 with Eubanks, while the other invested $20,000. In 2013, a Florida resident invested $50,000 with Eubanks.

 

Eubanks, who defrauded over 20 people, invested some of his clients’ funds, but used a significant portion for personal expenses. Moreover, when asked for account statements summarizing the fund’s performance, Eubanks fabricated account statements or used account statements from unrelated accounts to deceive his clients into believing that their money had earned a healthy return. In some instances, Eubanks ran the fund as a Ponzi scheme, using money deposited with him by newer investors to pay returns to earlier investors.

 

Acting United States Attorney William D. Weinreb; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The Massachusetts Securities Division, which conducted an earlier civil investigation of Eubanks, provided significant assistance to the U.S. Attorney’s Office. Assistant U.S. Attorney Andrew E. Lelling of Weinreb’s Economic Crimes Unit prosecuted the case.

BOSTON – Novartis Pharmaceuticals Corporation (Novartis) has agreed to pay $51.25 million to resolve allegations that it violated the False Claims Act by illegally paying the Medicare co-pays for its own drugs. 

When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible (collectively, co-pays). Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs.   

“According to the allegations in today’s settlement, Novartis coordinated with three co-pay foundations to funnel money through the foundations to patients taking Novartis’ own drugs,” said United States Attorney Andrew E. Lelling. “As a result, the Novartis’ conduct was not ‘charitable,’ but rather functioned as a kickback scheme that undermined the structure of the Medicare program and illegally subsidized the high costs of Novartis’ drugs at the expense of American taxpayers. At the same time, we recognize that Novartis’ current management has taken constructive steps to address the government’s concerns with the company’s prior relationships with co-pay foundations.”

“Through this settlement and others, the government has demonstrated its commitment to ensuring that drug companies do not use kickbacks to influence the drugs prescribed by doctors or purchased by patients,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “We will continue to safeguard the Medicare program from kickbacks and their pernicious effects, including the undermining of important cost-control mechanisms instituted by Congress.”

“Improper coordination between pharmaceutical manufacturers and foundations operating patient assistance programs harms Medicare by increasing costs and distorting the prescription drug market,” said Gregory E. Demske, Chief Counsel to the Inspector General.  “This CIA promotes independence in those relationships and accountability on the part of manufacturer Boards of Directors and senior management.”

“Novartis tried to game the system to boost its bottom line at the expense of sick patients facing economic hardship, and the hard-working taxpayers who fund the Medicare program,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s settlement is a warning to all pharmaceutical companies that if they pay kickbacks, like Novartis did in this case, our health care fraud task force will do everything it can to make sure they are held accountable.”

The government’s allegations in the settlement announced today are as follows:

At certain intervals during the period from Jan. 1, 2010, through Dec. 31, 2014, Novartis used The Assistance Fund (TAF) as a conduit to pay kickbacks to Medicare patients taking Gilenya, a Novartis drug for multiple sclerosis (MS), and used the National Organization for Rare Disorders (NORD) and Chronic Disease Fund (CDF) as conduits to pay kickbacks to Medicare patients taking Afinitor, a Novartis drug for renal cell carcinoma (RCC) and progressive neuroendocrine tumors of pancreatic origin (PNET).

With respect to TAF, in October 2012, Novartis learned from Express Scripts, which then was managing Novartis’ free drug program for Gilenya, that Novartis was providing free Gilenya to 364 patients who would become eligible for Medicare the following year. Novartis and Express Scripts transitioned these patients to Medicare Part D so that, in the future, Novartis would obtain revenue from Medicare when the patients filled their prescriptions for Gilenya. Knowing that these patients could not afford co-pays for Gilenya, Novartis developed a plan for it to cover their co-pays through TAF, which operated a fund that, ostensibly, offered to cover co-pays for any MS patient who met TAF’s financial eligibility criteria, regardless of which MS drug the patient was taking. Specifically, just after it made a payment to TAF, Novartis arranged for TAF to open its MS fund at 6:00 p.m. on Friday, Dec. 14, 2012, and for Express Scripts to have personnel working overtime that night and the following morning submitting applications to TAF on behalf of patients who previously had been receiving free Gilenya from Novartis. Novartis knew that the timing of the opening of the fund and the readiness of Express Scripts to submit applications on behalf of Gilenya patients at that time would result in Gilenya patients receiving a disproportionate share of the grants from the fund while it was open. After the fund closed on Saturday, Dec. 15, 2012, Novartis confirmed that, during the brief period the fund had been open, TAF used Novartis’ money to provide 374 Gilenya patients with grants to cover their Medicare co-pays in 2013. Novartis subsequently made further payments to TAF, and TAF provided many of these same Gilenya patients with grants to cover their Medicare co-pays in 2014.

With respect to NORD, Novartis learned that, as of the 2010 donation year, no other manufacturer of RCC medications would be contributing to a pre-existing NORD RCC co-pay assistance fund. Novartis knew that Afinitor was approved for use as a second-line RCC treatment only, and only when certain first-line products had failed. Novartis also knew, therefore, that any co-pays NORD covered for initial RCC treatments would not be used to cover co-pays for Afinitor. Novartis informed NORD that it would be willing to donate to its RCC fund if NORD narrowed the fund’s eligibility definition so as not to cover co-pays for first line treatments. Novartis wanted the definition narrowed to ensure that a greater amount of its donations would subsidize its product, as opposed to others. NORD then created a new fund entitled “Advanced Renal Cell Carcinoma Second Line Co-Payment Assistance Program.” This fund excluded any patients seeking co-pay coverage for first-line RCC treatments and disproportionately funded patients taking Afinitor compared to its overall usage rate among all RCC drugs. Novartis financed this NORD fund through 2014.

With respect to CDF, in 2012, after Afinitor was approved to treat PNET, Novartis asked CDF to open a fund to cover Afinitor co-pays for PNET patients. At that time, Novartis knew that the FDA had approved a competing drug to treat PNET. Nonetheless, with Novartis’ knowledge, CDF launched a fund labeled “PNET” that covered co-pays only for Afinitor and did not cover co-pays for the other PNET drug. Novartis continued with this understanding as the sole financial backer of this supposed “PNET” fund through 2014. 

Novartis entered into a five-year corporate integrity agreement (CIA) with OIG as part of this settlement and a simultaneous settlement being announced today by the United States Attorney’s Office for the Southern District of New York. The CIA requires Novartis to implement measures, controls, and monitoring designed to promote independence from any patient assistance programs that it finances. In addition, Novartis agreed to implement risk assessment programs and to obtain compliance-related certifications from company executives and Board members.

To date, the Department of Justice has collected over $900 million from ten pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, Amgen, Sanofi, and Novartis) that allegedly used third-party foundations as kickback vehicles. The Department also has reached settlements with four foundations (Patient Access Network Foundation, Chronic Disease Fund, The Assistance Fund, and Patient Services, Inc.) that allegedly conspired or coordinated with these pharmaceutical companies.

U.S. Attorney Lelling, Assistant Attorney General Hunt, HHS Chief Counsel to the Inspector General Demske, and FBI Boston SAC Bonavolonta made the announcement today. The U.S. Postal Inspection Service also assisted with the investigation. The matter was handled by Assistant U.S. Attorneys Gregg Shapiro and Abraham George, of Lelling’s Affirmative Civil Enforcement Unit, and by Trial Attorneys Sarah Arni and Augustine Ripa of the Justice Department’s Civil Division.

BOSTON – The U.S. Attorney’s Office announced today that two foundations, Chronic Disease Fund, Inc. d/b/a Good Days from CDF (“CDF”), and Patient Access Network Foundation (“PANF”), have agreed to pay $2 million and $4 million, respectively, to resolve allegations that they violated the False Claims Act by enabling pharmaceutical companies to pay kickbacks to Medicare patients taking the companies’ drugs.

The government alleged that CDF and PANF worked with various pharmaceutical companies to design and operate certain funds that funneled money from the companies to patients taking the specific drugs the companies sold. These schemes enabled the pharmaceutical companies to ensure that Medicare patients did not consider the high costs that the companies charged for their drugs. The schemes also minimized the possibility that the companies’ money would go to patients taking competing drugs made by other companies. 

When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible (collectively, “co-pays”). Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs. The law further prohibits third parties, such as co-pay foundations, from conspiring with pharmaceutical companies to violate the Anti-Kickback Statute. 

“According to the allegations in today’s settlements, CDF and PANF functioned not as independent charities, but as pass-throughs for specific pharmaceutical companies to pay kickbacks to Medicare patients taking their drugs,” said United States Attorney Andrew E. Lelling. “As a result, CDF and PANF enabled their ‘donors’ (the pharmaceutical companies) to undermine the Medicare program at the expense of American taxpayers.”

“OIG continues to be concerned by evidence indicating that foundations are not operating independently from their donors,” said Gregory E. Demske, Chief Counsel to the Inspector General. “Our Integrity Agreements promote such independence and require legal determinations about whether the foundations’ future operations of their assistance programs are compliant with the Anti-Kickback Statute.” 

“Today’s settlements are a warning to all pharmaceutical companies, foundations, and others who try to subvert the charitable donation process for their own financial gain at the expense of American taxpayers. Both the Chronic Disease Fund and the Patient Access Network used their status as charities to shield the illegal activities of pharmaceutical companies seeking to maximize profits,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “The FBI and our partners will continue to hold organizations accountable, and to protect and preserve the Medicare system, and the taxpayers who fund it, from kickback schemes like these.”

The United States alleged that, from 2010 through 2014, CDF conspired with five pharmaceutical companies – Novartis, Dendreon, Astellas, Onyx, and Questcor – to enable them to pay kickbacks to Medicare patients taking their drugs.  It is further alleged that, from 2011 through 2014, PANF permitted four pharmaceutical companies – Bayer, Astellas, Dendreon, and Amgen – to use PANF as a conduit to pay kickbacks to Medicare patients taking their drugs.  Details of the conduct can be found in attached addendum.

The amounts of the settlements announced today were determined based on analysis of each foundation’s ability to pay after review of its financial condition.

CDF and PANF each entered a three-year Integrity Agreement (IA) with OIG as part of their respective settlements.  The IAs require, among other things, that the foundations implement measures designed to ensure that they operate independently and that their arrangements and interactions with pharmaceutical manufacturer donors are compliant with the law.  In addition, the IAs require compliance-related certifications from the Boards of Directors and detailed reviews by independent review organizations.  

U.S. Attorney Lelling, HHS-OIG Chief Counsel Demske and FBI SAC Bonavolonta made the announcement today. The U.S. Postal Inspection Service also assisted with the investigation. The matter was handled by Assistant U.S. Attorneys Gregg Shapiro and Abraham George, of Lelling’s Affirmative Civil Enforcement Unit.

ADDENDUM

CDF’s PNET Co-pay Fund for Novartis. In May 2011, Afinitor, a Novartis product, was approved to treat progressive neuroendocrine tumors of pancreatic origin (“PNET”). In 2012, Novartis asked CDF to open a co-pay fund to cover Afinitor co-pays for PNET patients. At that time, CDF knew that Sutent, a Pfizer drug, also was approved to treat PNET. In August 2012, at Novartis’ request, CDF opened a supposed “PNET” fund. The fund, which Novartis financed alone, covered co-pays only for Afinitor; it did not cover co-pays for Sutent, the other approved PNET drug.

CDF’s Provision of Data to Dendreon for the mCRPC Fund. Provenge, a Dendreon product, is an immunotherapy that the FDA approved in April 2010 for treatment of metastatic castration resistant prostate cancer (“mCRPC”). In or about January 2010, Dendreon contacted CDF to request that CDF create a mCRPC fund. At that time, Provenge’s principal competitor therapy was Taxotere, a less costly injectable therapy indicated for treatment of various types of cancer. CDF opened its mCRPC fund in June 2010, and, from that time until August 2011, Dendreon alone financed CDF’s mCRPC fund. From June 2010 through 2011, at Dendreon’s request and on multiple occasions, CDF provided Dendreon with data concerning the number of Provenge patients receiving money from CDF’s mCRPC fund, the number of Taxotere patients receiving money from the fund, and the average amounts of money the fund was providing to Provenge and Taxotere patients, respectively. In May 2011, following the FDA approval of Zytiga, an oral therapy indicated for treatment of mCRPC, CDF also provided Dendreon with information concerning the number of Zytiga patients receiving money from CDF’s mCRPC fund. CDF’s provision of this information made it possible for Dendreon to confirm that CDF was using Dendreon’s money primarily to cover co-pays for Provenge, even though other mCRPC drugs were on the market.

CDF’s ARI Co-pay Fund for Astellas. Xtandi, an Astellas product, is indicated for treatment of mCRPC for patients who have failed chemotherapy. After the launch of Xtandi in September 2012, Astellas provided funding for the mCRPC fund at CDF. Xtandi is an androgen receptor inhibitor (“ARI”); none of the other major mCRPC drugs is an ARI. In May 2013, Astellas contacted CDF to request the opening of an ARI fund, which would cover mCRPC patients’ co-pays for ARIs, but not for other mCRPC drugs. CDF knew this meant that Astellas was seeking to earmark money for Xtandi patients, and not others, because Xtandi was the dominant ARI drug for treatment of mCRPC. On July 1, 2013, at Astellas’ request, CDF opened an ARI fund. Astellas alone financed CDF’s ARI fund. As CDF intended, Xtandi patients received nearly all of the money that the fund disbursed.

CDF’s Multiple Myeloma Travel Fund for Onyx. In July 2012, Onyx (now owned by Amgen) received approval to market Kyprolis as a third-line treatment for multiple myeloma.  Kyprolis must be infused at a health care facility. At around the time of the approval, Onyx asked CDF to create a fund that, ostensibly, would cover health care related travel expenses for patients taking any multiple myeloma drug. At Onyx’s request, CDF created the fund, which Onyx alone financed. Internally, CDF at times referred to the fund as the “Kyprolis Travel” fund, and, in fact, it functioned primarily to cover travel expenses for patients taking Kyprolis.

CDF’s Provision of Data to Onyx for the Multiple Myeloma Co-Pay Fund. CDF operated a fund that covered co-pays for multiple myeloma drugs, including Kyprolis and several other drugs. CDF’s multiple myeloma co-pay fund received financing from several pharmaceutical manufacturers. In 2013, CDF provided Onyx with data detailing the amounts CDF had spent, and anticipated spending, on Kyprolis co-pays. This enabled Onyx to view CDF’s funding requests as seeking amounts necessary to pay Kyrpolis co-pays but not the co-pays of any other multiple myeloma drug. In 2013, after receiving this information, Onyx paid CDF just enough to cover CDF’s anticipated spending on co-pays for Kyprolis patients.

CDF’s MS, Lupus, and RA “Exacerbation” Funds for Questcor. In 2010, 2011, and 2012, respectively, Questcor (now owned by Mallinkcrodt), the maker of Acthar Gel, approached CDF and requested that CDF open separate funds for “exacerbations” (i.e., flare-ups) of multiple sclerosis, lupus, and rheumatoid arthritis, respectively. CDF opened these “exacerbation” funds, and Questcor alone financed them. By design, the multiple sclerosis “exacerbation” fund did not cover drugs (other than Acthar) that treated multiple sclerosis, the lupus “exacerbation” fund did not cover drugs (other than Acthar) that treated lupus, and the rheumatoid arthritis “exacerbation” fund did not cover drugs (other than Acthar) that treated rheumatoid arthritis. After establishing the funds, CDF provided reports to Questcor that enabled Questcor to determine how much money CDF already had spent on Acthar patients and how much more money CDF would need to cover the Acthar co-pays for patients Questcor referred to CDF.   

PANF’s Prostate Cancer Subfunds. In March 2010, PANF opened a fund that covered co-pays for patients taking any drug that treated prostate cancer. In September 2012, PANF opened a fund that covered co-pays for patients taking drugs that treated mCRPC. PANF’s mCRPC fund covered a number of drugs, including Xofigo (a Bayer drug), Xtandi (an Astellas drug), and Provenge (a Dendreon drug), as well as competing drugs made by other companies. After PANF opened its mCRPC fund, Bayer, Astellas, and Provenge worked with PANF to create smaller funds, with each functioning primarily, if not exclusively, to cover the drug of the single company that financed each fund.

The RIT subfund for Bayer. Xofigo is an alpha particleemitting radioactive therapeutic agent that the FDA approved to treat mCRPC on May 15, 2013. None of the other major drugs to treat mCRPC is radioactive. Prior to the approval of Xofigo, Bayer approached PANF about creating a fund that would cover only radioactive drugs for mCRPC. On May 16, 2013, one day after the FDA approved Xofigo, PANF opened a fund called Radioisotope Treatment of Metastatic Castrate Resistant Prostate Cancer (“RIT”). Bayer alone financed PANF’s RIT fund, and Xofigo patients received nearly all of the money the fund disbursed.

The ARI subfund for Astellas. After hearing about PANF’s RIT fund, Astellas contacted PANF about creating an ARI fund that would cover only ARI drugs for mCRPC. Astellas alone financed PANF’s ARI fund, and Xtandi patients received the great majority of the money the fund disbursed.

The GU subfund for Dendreon. Approximately one month after the opening of PANF’s RIT fund, PANF and Dendreon began discussions about PANF creating a fund that would cover copays only for immunotherapy treatments for mCRPC. On August 2, 2013, PANF opened a fund called Immunotherapy for Genitourinary Cancer (“GU”). Dendreon alone financed PANF’s GU fund, and Provenge patients received nearly all of the money the fund disbursed.

PANF’s SHPT Fund for Amgen. Sensipar, an Amgen product, is approved to treat secondary hyperparathyroidism (“SHPT”). The FDA also has approved other drugs to treat SHPT. In September 2011, Amgen approached PANF about creating an SHPT fund. PANF and Amgen then worked together to determine the fund’s coverage parameters so that it would cover only Sensipar. In November 2011, PANF launched a SHPT fund with Amgen alone providing the financing. Until June 2014, Sensipar patients received all of the money PANF’s SHPT fund disbursed.

BOSTON – A former Cambridge man was sentenced today in Boston for illegally exporting defense technical data to foreign nationals in Turkey in connection with the fraudulent manufacturing of parts and components used by the U.S. military. Some of the parts were later determined to be substandard and unsuitable for use by the military. 

Arif Ugur, 53, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 33 months months in prison and two years of supervised release. Pursuant to an order entered by Judge Gorton, Ugur, who is a U.S. lawful permanent resident from Turkey, agreed to return to Turkey upon completion of his sentence. On Aug. 10, 2022, Ugur 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.

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 U.S. Department of Defense (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.

In order to enable to 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. 

United States Attorney Rachael S. Rollins; Patrick J. Hegarty, Special Agent in Charge of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston; and Rashel Assouri, Special Agent in Charge of the U.S. Department of Commerce, Office of Export Enforcement, Boston Field Office made the announcement today. Assistant U.S. Attorneys Jason A. Casey and Timothy H. Kistner of Rollins’ National Security Unit prosecuted the case.

BOSTON – A Federal Firearms Licensee (FFL) was sentenced today in federal court in Boston for conspiring to illegally traffic and straw purchase firearms.Cory Daigle, 30, of Revere, was sentenced by U.S. District Court Judge Leo T. Sorokin to two years in prison to be followed by three years of supervised release. In August 2024, Daigle pleaded guilty to one count of trafficking in firearms; one count of illegal possession of a machine gun; one count of receipt or possession of unregistered firearm; one count of conspiracy to make false statements in records required to be kept by an FFL; and one count of aiding and abetting making false statements in records required to be kept by an FFL.Daigle was charged by criminal complaint in January 2023 along with Gustavo Rodriguez and Shakim Grant. He was subsequently indicted by a federal grand jury in March 2023.“Mr. Daigle utilized his status as a licensed firearms dealer to recklessly amass an alarming number of firearms. He knowingly sold multiple firearms to a person he knew was not eligible to own them he – and then aided in concealing such criminal conduct in the immediate after one of those firearms was then used in the shooting,” said United States Attorney Joshua S. Levy. “This sentence and moreover, this case entirely, should be a warning to other licensed federal firearms dealers in Massachusetts, particularly in the Littleton Mill, that by selling illegal deadly weapons, you’re not only gambling with public safety – you’re gambling with your freedom.”“The illegal sale and transfer of firearms threaten the safety of our communities,” said James M. Ferguson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, & Explosives, Boston Field Division. “Today’s sentencing demonstrates that those who exploit firearms laws for personal gain will be held accountable. ATF will continue to work tirelessly to disrupt these dangerous networks and uphold the integrity of lawful gun ownership.’”Daigle was a licensed firearms dealer doing business as Steelworks Defense Solutions in Littleton. In late 2022, Rodriguez – a previously convicted felon prohibited from possessing firearms – asked Grant if he would purchase a number of firearms for him. Rodriguez proposed to make the purchases through Daigle, whom Rodriguez knew to be an FLL and with whom Rodriguez had an existing relationship. Grant knew that Rodriguez – a known Wood Avenue gang associated – was prohibited from possessing firearms, but agreed to purchase the firearms nonetheless. At some point prior to Oct. 27, 2022, Rodriguez and Daigle agreed upon the firearms that would be purchased and Rodriguez paid Daigle for the firearms.To complete the purchase and obtain the firearms, Rodriguez later accompanied firearms-licensee Grant to Steelworks Defense Solutions. There, Daigle presented Grant with three firearms intended for Rodriguez, which Rodriguez had previously selected and paid for: a Glock 23, .40 caliber pistol; a Glock 29, 10mm pistol; and a Glock 19X, 9mm pistol. Daigle then provided Grant with paperwork required to be maintained by an FFL, documenting the sale of the three firearms. This included a required Firearms Transaction Record to be completed by the buyer, in which Grant falsely claimed that he was the actual buyer of the firearms. Daigle signed the form, knowingly endorsing the false claim.Less than two weeks later, on Nov. 6, 2022, one of the firearms that Daigle had sold to Rodriguez was used in shooting outside of Rodriguez’s apartment. During a search of Rodriguez’s apartment, a Glock 23 pistol and the Glock 29 pistol were discovered, but only the manufacturer’s box for a Glock 19X pistol – which was later identified as the firearm used in the Hyde Park shooting. That same firearm was subsequently recovered from a juvenile in New Bedford.During a search of Daigle’s residence in January 2023, multiple firearms were found in numerous safes, on furniture, in bedrooms, in drawers and in open areas throughout the home. An incendiary device was also located. During the search, Daigle attempted to coverup the illegal straw purchase by providing false information to law enforcement. He also stated that if anyone came to take his guns away, he would fight the government until he died. The firearms were immediately seized.  

















Additionally, at the time of his arrest, Daigle was carrying four tactical/military style knives on his person.









Grant and Rodriguez each pleaded guilty to their roles in the conspiracy. On Oct. 18, 2024, Grant was sentenced to three years of probation. Rodriguez is scheduled to be sentenced in February 2025.U.S. Attorney Levy, ATF SAC Ferguson and Boston Police Commissioner Michael Cox made the announcement today. Valuable assistance in the investigation was provided by the Revere Police Department. Assistant U.S. Attorney Luke A. Goldworm of the Major Crimes Unit prosecuted the case.  

BOSTON – A retired Captain of the Boston Police Department was sentenced today in federal court in Boston for participating in a long-running overtime fraud scheme at the Boston Police Department (BPD) that cost taxpayers hundreds of thousands of dollars in fraudulent overtime payments.Richard Evans, 65, of Hanover, was sentenced by U.S. District Court Judge Richard G. Stearns to one year and a day in federal prison, two years of supervised release, restitution of $154,249.20 and a fine of $15,000. In March 2024, a federal jury convicted Evans of conspiracy to commit theft concerning programs receiving federal funds, theft concerning programs receiving federal finds, conspiracy to commit wire fraud and wire fraud. Evans was arrested and charged in March 2021 after a lengthy investigation into the overtime practices of Evans and other BPD officers proved that officers had been lying on their overtime slips so that they could get paid for countless hours that they did not work.  “Members of law enforcement are expected to uphold the law, not violate it,” said Acting United States Attorney Joshua S. Levy. “Mr. Evans abused the public trust and violated his oath, and his greed corrupted others in the department. His actions do not reflect the selfless, outstanding work done every day by thousands of Boston Police Department officers and police officers across the Commonwealth. To anyone who may be tempted to follow a similar path, today’s sentence should send a strong message that police officers who steal taxpayer money by fraudulently trying to get paid for hours they do not work will be held accountable and face significant penalties.”“After 37 years on the force, Richard Evans should know that crime doesn’t pay. Nonetheless, he orchestrated this long-running overtime fraud scheme, ensnared his former officers, and ignored all ethical boundaries in order to make a buck," said Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “The public’s trust is critical for our justice system to function properly, which is why the FBI will do everything in its power to bring officers whose criminal actions undermine that trust to justice. We thank the Boston Police Department for its help in rooting out this egregious fraud.”“Today’s sentencing sends a clear message that public servants who cheat and steal will be held accountable. Evans participated in and orchestrated a scheme to defraud taxpayers by submitting and certifying fraudulent overtime for himself and subordinate officers. This is not a victimless crime. His illicit gains were at the expense of the taxpayers,” said Timothy C. Edmiston, Special Agent in Charge of the Department of Justice Office of the Inspector General Mid-Atlantic Region.   Evans, who retired from the BPD shortly after he was charged in this case, was a 42-year veteran of the BPD and one of the highest-ranking officers in the department. From May 2012 to March 2016, Evans was the commander of BPD’s Evidence and Supply Management Division, where he was responsible for, among other things, overseeing the Evidence Control Unit (ECU) that stored and managed all the evidence for the BPD.    The investigation revealed that that when BPD’s evidence warehouse started overflowing with evidence, the department authorized an overtime program to “purge” old and unneeded evidence to make room for new evidence. As part of this purge overtime program, officers in the ECU were authorized to work up to four hours a day, after their regular day shift, to help purge old evidence.For virtually the entirety of the time that Evans was in charge of the ECU, Evans and those under his command abused the purge overtime program to unjustly enrich themselves. For the purge program, it was contemplated that officers would work up to four hours of overtime in a day, typically from 4:00 to 8:00 from Mondays to Thursdays. The evidence showed that officers rarely worked the hours they were supposed to work, often working only an hour or two of overtime but claiming they worked four hours. Given that overtime was paid at 1.5 times the regular pay rate, this meant that officers could get six hours of pay for claiming four hours of overtime, even though in reality they were only working for an hour or two.  As part of this scheme, for multiple years, officers falsely claimed on BPD pay forms that they worked four hours of overtime when they routinely did not. The BPD’s policies and protocols required that officers, after every shift, submit overtime slips certifying the “actual hours worked” during any shift. On countless occasions over multiple years, Evans and other officers in his unit submitted slips overstating their actual hours worked. The BPD’s evidence warehouse, where the ECU is based, is secured and alarmed when officers are not working in it.  Alarm records from the evidence warehouse were introduced to show that the building was not even open during hundreds of hours when Evans and other officers had falsely claimed that they were inside the building purging old evidence.  Evans submitted slips for hundreds of overtime hours he did not work. As a supervisor, Evans also approved the overtime slips of officers under his command who falsely claimed payment for hundreds of overtime hours they did not work. Evans also misled his superior officers about the purge overtime scheme to cover up the fact that officers were inflating their overtime hours and routinely not working even half the number of hours they were claiming.On top of his base salary, Evans received over $120,000 in overtime payments during his nearly four years as commander of the ECU, including over $17,000 in overtime payments for hours that the evidence warehouse was not even open during the hours Evans claimed he was working. The overtime pay received by Evans allowed his total pay to exceed $200,000 for each of the years between 2013 and 2016 when he led that unit.  Acting U.S. Attorney Levy; SAC Cohen; DOJ-OIG SAC Edmiston; and Boston Police Commissioner Michael Cox made the announcement today. Assistant U.S. Attorneys Kunal Pasricha and Elysa Wan of the Criminal Division prosecuted the case at trial. 

BOSTON – A Saugus loan broker pleaded guilty yesterday in federal court in Boston to operating a scheme that defrauded small businesses from across the country in connection with their efforts to obtain business loans.

 

Joseph L. Angelo Jr, 59, pleaded guilty to 11 counts of wire fraud. U.S. District Court Judge F. Dennis Saylor IV scheduled sentencing for Nov.29, 2017.

 

From November 2011 to March 2015, Angelo defrauded 10 small business owners of more than $1 million by representing that his companies – Lease One Corp. and Palmtree Finance & Funding LLC – were brokers for obtaining loans for small businesses. Angelo required the customers to deliver to him what he said were fully refundable deposits, aggregating over $1.1 million, for loans that he said had been approved and would be funded within a few days. In fact, none of the loans had been approved and there were no funds available. When the small business owners complained about delays in receiving funds, Angelo promised that their deposits would be refunded, but he did not refund any of the deposits or secure funding for any of the requested loans.

 

The charging statute provides for a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

 

Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Weinreb’s Economic Crimes Unit.

BOSTON – A California man pleaded guilty on Sept. 8, 2022 in federal court in Springfield, Mass. to making threats to commit anti-LGBTQ violence against Springfield-based Merriam-Webster, Inc. and others. 

Jeremy David Hanson, 34, of Rossmoor, Calif., pleaded guilty to one count of interstate communication of threatening communications to commit violence against the employees of Merriam-Webster, and to another count charging the same offense, initially filed in the Eastern District of Texas, targeting the President of the University of North Texas. In a written statement of facts accompanying his plea agreement, Hanson also admitted to sending threatening communications to various corporations, politicians, and others, including the Walt Disney Co., the Governor of California and the Mayor of New York City, a New York rabbi and professors at Loyola Marymount University. Hanson also admitted that he frequently selected the object of his threatening communications because of the gender, gender identity and/or sexual orientation of various persons. 

U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Jan. 5, 2023. On April 20, 2022, Hanson was arrested and charged by criminal complaint and subsequently indicted by a federal grand jury on May 5, 2022.

“Every member of our community has a right to live and exist authentically as themselves without fear. Hate motivated threats of violence that infringe upon that right are not tolerated in Massachusetts in any capacity. This conviction represents my office’s dedication to protecting targeted communities and bringing accountability and justice when those who aim to endanger act upon their hatred,” said United States Attorney Rachael S. Rollins. “I want to remind people to call the 1-83-END-H8-NOW (1-833-634-8669) line if they have information about concerning or troubling incidents of hate, potential hate crimes, or concerns regarding individuals believed to be espousing hate-filled views or threats of actions.”

“Jeremy Hanson is now a convicted felon after admitting to making hate-fueled threats of violence related to the LGBTQ+ community,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “If you believe you are a victim or a witness to similar conduct, we encourage you to report it to the FBI so we can hold the perpetrators behind these crimes accountable for their actions, like we did in this case.”

Between Oct. 2 and Oct. 8, 2021, Springfield-based Merriam-Webster, Inc. received various threatening messages and comments demonstrating bias against specific gender identities submitted through its website’s “Contact Us” page and in the comments section on its webpages that corresponded to the word entries for “Girl” and “Woman.” Authorities later identified the user as Hanson.

Specifically, on Oct. 2, 2021, Hanson used the handle “@anonYmous” to post the following comment on the dictionary’s website definition of “female:” “It is absolutely sickening that Merriam-Webster now tells blatant lies and promotes anti-science propaganda. There is no such thing as ‘gender identity.’ The imbecile who wrote this entry should be hunted down and shot.”

Hanson also sent the following threatening message via the website’s “Contact Us” page: “You [sic] headquarters should be shot up and bombed. It is sickening that you have caved to the cultural Marxist, anti-science tranny [sic] agenda and altered the definition of ‘female’ as part of the Left’s efforts to corrupt and degrade the English language and deny reality. You evil Marxists should all be killed. It would be poetic justice to have someone storm your offices and shoot up the place, leaving none of you commies alive.”

On Oct. 8, 2021, Hanson posted another threatening comment on the dictionary’s website and a threatening message via the “Contact Us” page that read: “I am going to shoot up and bomb your offices for lying and creating fake definitions in order to pander to the tranny mafia. Boys aren’t girls, and girls aren’t boys. The only good Marxist is a dead Marxist. I will assassinate your top editor. You sickening, vile tranny freaks.” As a result of the threats, Merriam-Webster closed its offices in Springfield, Mass. and New York City for approximately five business days.

The charge of interstate transmission of threatening communications provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

U.S. Attorney Rollins and FBI SAC Bonavolonta made the announcement. Assistant U.S. Attorney Steven H. Breslow of Rollins’ Springfield Branch Office is prosecuting the case. 

BOSTON – A California man has been indicted by a federal grand jury in connection with making threats to commit anti-LGBTQ violence against Springfield-based Merriam-Webster, Inc. and others. 

Jeremy David Hanson, 34, of Rossmoor, Calif., was indicted on one count of interstate communication of threatening communications to commit violence. The grand jury also charged Hanson with intentionally selecting Merriam-Webster, Inc., its property and its employees as the object of the threatening communications pertaining to one’s actual or perceived gender, gender identity, or sexual orientation. Hanson will appear in federal court in Springfield on May 13, 2022. On April 20, 2022, Hanson was arrested and charged by criminal complaint.

“We believe Mr. Hanson, motivated by hate and veiled by the assumed anonymity of the internet, made numerous threats of violence to instill fear in our communities,” said United States Attorney Rachael S. Rollins. “Hateful and bigoted activity, like the conduct alleged here, is destructive on so many levels and will not be tolerated. Every individual has a right to feel safe in their community. My office will continue its relentless pursuit of those who seek to threaten, intimidate and divide us and hold them accountable.”

“Jeremy Hanson is accused of repeatedly making violent threats, motivated by hate, to intimidate others – even going as far as causing Merriam-Webster to shut down its offices for five days out of fear for their employees’ safety,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Threatening violent action strikes at the heart of our fundamental right as Americans to live and work without fear, and this case underscores the FBI’s commitment to ensuring that everyone’s civil rights are protected, and those who try to infringe on them are brought to justice.”

According to the charging documents, between Oct. 2 and Oct. 8, 2021, Springfield-based Merriam-Webster, Inc. received various threatening messages and comments demonstrating bias against specific gender identities submitted through its website’s “Contact Us” page and in the comments section on its webpages that corresponded to the word entries for “Girl” and “Woman.” Authorities later identified the user as Hanson.

Specifically, it is alleged that on Oct. 2, 2021, Hanson used the handle “@anonYmous” to post the following comment on the dictionary’s website definition of “female”: “It is absolutely sickening that Merriam-Webster now tells blatant lies and promotes anti-science propaganda. There is no such thing as ‘gender identity.’ The imbecile who wrote this entry should be hunted down and shot.”

Hanson also allegedly sent the following threatening message via the website’s “Contact Us” page: “You [sic] headquarters should be shot up and bombed. It is sickening that you have caved to the cultural Marxist, anti-science tranny [sic] agenda and altered the definition of ‘female’ as part of the Left’s efforts to corrupt and degrade the English language and deny reality. You evil Marxists should all be killed. It would be poetic justice to have someone storm your offices and shoot up the place, leaving none of you commies alive.”

It is further alleged that on Oct. 8, 2021, Hanson posted another threatening comment on the dictionary’s website and a threatening message via the “Contact Us” page that read: “I am going to shoot up and bomb your offices for lying and creating fake definitions in order to pander to the tranny mafia. Boys aren’t girls, and girls aren’t boys. The only good Marxist is a dead Marxist. I will assassinate your top editor. You sickening, vile tranny freaks.” As a result of the threats, Merriam-Webster closed its offices in Springfield and New York City for approximately five business days.

The criminal complaint identified numerous related threats, including to the American Civil Liberties Union, Amnesty International, Land O’ Lakes, Hasbro, Inc., IGN Entertainment, the President of the University of North Texas, two professors at Loyola Marymount University and a New York City rabbi.

Individuals or entities who believe they may be victims of this alleged crime should contact the U.S. Attorney’s Office at (888) 221-6023.

The charge of interstate transmission of threatening communications provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

U.S. Attorney Rollins and FBI SAC Bonavolonta made the announcement. Assistant U.S. Attorney Steven H. Breslow of Rollins’ Springfield Branch Office is prosecuting the case. 

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

BOSTON – The former Chair of Harvard University’s Chemistry and Chemical Biology Department was sentenced today in federal court in Boston for lying to federal authorities about his affiliation with People’s Republic of China’s Thousand Talents Program and the Wuhan University of Technology (WUT) in Wuhan, China, as well as failing to report income he received from WUT.

 

Dr. Charles Lieber, 64, was sentenced by U.S. Senior District Court Judge Rya W. Zobel to time served (two days) in prison; two years of supervised release with six months of home confinement; a fine of $50,000; and $33,600 in restitution to the IRS. The government recommended a sentence of 90 days in prison and a $150,000 fine.

In December 2021, Lieber was convicted by a federal jury of two counts of making false statements to federal authorities, two counts of making and subscribing a false income tax return, and two counts of failing to file reports of foreign bank and financial accounts (FBAR) with the Internal Revenue Service (IRS). 

Lieber served as the Principal Investigator of the Lieber Research Group at Harvard University, which between 2008 and 2019 conducted more than $15 million in research sponsored by various U.S. Government agencies, including the U.S. Department of Defense (“DOD”) and the National Institutes of Health (“NIH”). Unbeknownst to his employer, Harvard University, Lieber became a “Strategic Scientist” at WUT and, later, a contractual participant in China’s Thousand Talents Plan from at least 2012 through 2015. China’s Thousand Talents Plan was one of the most prominent Chinese talent recruitment plans designed to attract, recruit and cultivate high-level scientific talent in furtherance of China’s scientific development, economic prosperity and national security.

 

In April 2018, during an interview with federal agents from DOD (one of the agencies that sponsored a portion of Lieber’s research), among other things, Lieber falsely stated that he had never been asked to participate in the Thousand Talents Plan. Later, in January 2019, Lieber caused Harvard to falsely tell the NIH (another sponsor of Lieber’s research) that Lieber was not, and had never been, a participant in the Thousand Talents Plan. Lieber knew these statements were false because he had signed a Thousand Talents contract with WUT in 2012, performed many of the duties and responsibilities required of him under that contract, and been paid a substantial salary by WUT in exchange for his work. Specifically, the terms of Lieber’s three-year Thousand Talents contract with WUT entitled Lieber to a salary of up to $50,000 per month, living expenses of up to $150,000 and approximately n $1.5 million to conduct joint research at WUT.  

 

In tax years 2013 and 2014, Lieber earned income from WUT in the form of salary and other payments made to him pursuant to his Thousand Talents contract, which he did not disclose to the IRS on his federal income tax returns. Together with WUT officials, Lieber also opened a bank account at a Chinese bank during a trip to Wuhan in 2012. Thereafter, between at least 2012 and 2015, WUT periodically deposited portions of Lieber’s salary into that account. U.S. taxpayers are required to report the existence of any foreign bank account that holds more than $10,000 at any time during a given year by the filing an FBAR with the IRS. According to Lieber, the balance of his Chinese bank account was approximately $200,000 in 2014 and 2015.  Nonetheless, Lieber purposely failed to file FBARs for those years.

United States Attorney Rachael S. Rollins; Matthew Olsen, Assistant Attorney General for National Security; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Patrick J. Hegarty, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division for the Boston Field Office; Michael Wiest, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS), Northeast Field Office; and Philip M. Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General made the announcement today. Assistant U.S. Attorney Jason A. Casey of Rollins’ National Security Unit and Assistant U.S. Attorney James R. Drabick of Rollins’ Securities, Financial & Cyber Fraud Unit prosecuted the case.

United States Attorney Andrew E. Lelling announced today that the YMCA of Central Massachusetts received over $370,000 from the Justice Department’s Office of Justice Programs to provide safe, stable housing and appropriate services to victims of human trafficking.

“Human trafficking is a barbaric criminal enterprise that subjects its victims to unspeakable cruelty and deprives them of the most basic of human needs, none more essential than a safe place to live,” said Attorney General William P. Barr. “Throughout this Administration, the Department of Justice has fought aggressively to bring human traffickers to justice and to deliver critical aid to trafficking survivors. These new resources, announced today, expand on our efforts to offer those who have suffered the shelter and support they need to begin a new and better life.”

“Doing justice means supporting the survivors of human trafficking, not just prosecuting the criminals who victimize them,” said United States Attorney Lelling. “The YMCA of Central Massachusetts is doing righteous work by equipping survivors with the resources and help they need to rebuild their lives.”

The grant will provide six to 24 months of transitional or short-term housing assistance to the trafficking victims, including rental, utilities or related expenses, such as security deposits and relocation costs. The grant will also provide funding for support needed to help victims locate permanent housing, secure employment, as well as occupational training and counseling. The YMCA of Central Massachusetts is among 73 organizations receiving more than $35 million in grants from the Office for Victims of Crime to support housing services for human trafficking survivors. 

“Human traffickers dangle the threat of homelessness over those they have entrapped, playing a ruthless game of psychological manipulation that victims are never in a position to win,” said OJP Principal Deputy Assistant Attorney General Kathrine T. Sullivan. “These grants will empower survivors on their path to independence and a life of self-sufficiency and hope.”

Human trafficking offenses are among the most difficult crimes to identify, and the scope of human trafficking victimization may be much greater than the limited data reflect. A new report issued by the National Institute of Justice found that the number of human trafficking cases captured in police reports may represent only a fraction of all such cases. Expanding housing and other services to trafficking victims remains a top Justice Department priority.

For a complete list of individual award amounts and jurisdictions that will receive funding, visit: https://www.ojp.gov/sites/g/files/xyckuh241/files/media/document/htvictimsfactheet.pdf.

BOSTON – United States Attorney Andrew E. Lelling joins the Department of Justice in recognizing the service and sacrifice of federal, state, local and tribal law enforcement during National Police Week, which is observed Sunday, May 10 through Saturday, May 16, 2020.

“There is no more noble profession than serving as a police officer,” said Attorney General William P. Barr. “The men and women who protect our communities each day have not just devoted their lives to public service, they’ve taken an oath to give their lives in order to ensure our safety. And they do so not only in the face of hostility from those who reject our nation’s commitment to the rule of law, but also in the face of evolving adversity – such as an unprecedented global health pandemic. This week, I ask all Americans to join me in saying ‘thank you’ to our nation’s federal, state, local, and tribal law enforcement officers. Their devotion and sacrifice to our peace and security will not be taken for granted.”

“It is an all too infrequent occasion that we thank those who keep our communities safe,” said U.S. Attorney Lelling. “To the law enforcement officers in this Commonwealth – today and every day – you have my deepest regard and admiration. The U.S. Attorney’s Office supports you and has the greatest appreciation for your dedication to protecting public safety, which, in the midst of a national pandemic, comes with even greater risks and challenges. Nonetheless, you honor the oath to protect and serve, and for that, the Commonwealth is a safer place.”  

In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices. Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty.  

Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty and commitment to keeping our communities safe. This year the COVID-19 pandemic has underscored law enforcement officers’ courage and unwavering devotion to the communities they swore to serve.

The U.S. Attorney’s Office in Massachusetts will mark National Police Week by honoring more than 130 federal, state and local law enforcement personnel who contributed to the success of federal cases during the 2019 calendar year. Each year the U.S. Attorney in Massachusetts holds a formal ceremony during National Police Week to honor award recipients, however due to ongoing pandemic, this year’s event has been postponed.

Based on data collected and analyzed by the FBI’s Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 89 law enforcement officers died nationwide in the line of duty in 2019. The names of the fallen officers who have been added to the wall at the National Law Enforcement Memorial will be read on Wednesday, May 13, 2020, during a Virtual Annual Candlelight Vigil. Because public events have been suspended as a result of COVID-19, the vigil will be livestreamed to the public at 8:00 PM (EDT), and can be viewed at https://www.youtube.com/user/TheNLEOMF.

BOSTON – A Turkish national was arrested today and charged in federal court in Boston in connection with fraudulently having various parts and machine components for the United States military made by a Turkish manufacturer in violation of arms regulations.

Arif Ugur, 52, formerly of Cambridge, Mass., was charged by criminal complaint with one count of wire fraud, one count of violating the Arms Export Control Act and one count of conspiring to violate the Arms Export Control Act. Ugur was arrested today in Virginia and will appear in federal court in Boston at a later date.

The criminal complaint alleges that in approximately May 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 U.S. Department of Defense (DOD) with a variety of machine parts and hardware items intended for use by the United States military. Many of these contracts required that the parts be manufactured in the United States. In his initial bids and in subsequent email communications with DOD representatives, it is alleged that Ugur falsely claimed that Anatolia was manufacturing the parts in the United States. In fact, Anatolia and Ugur had no manufacturing facilities in the United States or elsewhere. Instead, Ugur allegedly contracted with a Turkish manufacturer to make the parts and then passed them off to DOD as if they had been manufactured by Anatolia in the United States.

It is further alleged that Ugur shared technical specifications and drawings of various DOD parts and components with employees of the Turkish manufacturer so that they could produce the parts for Anatolia. Ugur also allegedly provided employees of the Turkish manufacturer and other Turkish nationals with access to DOD’s online library of technical specifications and drawings. Many of the parts that Ugur contracted to provide, and did provide to DOD, 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 (drawings, specifications, etc.) from the United States to Turkey. The complaint alleges that 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.

The charge of violating the Arms Export Control Act provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $1 million, or twice the gross gain or loss of the offense. The charge of conspiring to violate the Arms Export Control Act provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss of the offense. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney Nathaniel R. Mendell; Patrick J. Hegarty, Special Agent in Charge of the U.S. Department of Defense, Defense Criminal Investigative Service, Northeast Field Office; and William S. Walker, Acting Special Agent in Charge of Homeland Security Investigation in Boston made the announcement today. The U.S. Department of Commerce, Bureau of Industry and Security also assisted in the investigation. Assistant U.S. Attorneys Jason A. Casey and Timothy H. Kistner of Mendell’s National Security Unit are prosecuting the case.

Details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

            WASHINGTON – Enis Jevric, 42, a Sergeant with the Metropolitan Police Department (MPD), pleaded guilty today in federal court to violating the constitutional rights of 27-year old An’Twan Gilmore by using excessive force, on August 25, 2021, in a police shooting that killed Mr. Gilmore. Jevric also pleaded guilty to a charge of involuntary manslaughter under D.C. law. The plea was announced by U.S. Attorney Matthew M. Graves and FBI Assistant Director in Charge David Sundberg, of the Washington Field Office. U.S. District Court Judge Randolph Moss scheduled a sentencing hearing for July 1, 2024. 

            According to documents filed with the court, the defendant willfully used unconstitutionally excessive and unreasonable force by shooting Mr. Gilmore. Specifically, shortly before 3:00 am on August 25, 2021, the defendant and other MPD officers were dispatched to respond to a call for an armed man—later identified as Mr. Gilmore—who was either asleep or unconscious in the driver’s seat of a car that was stopped at the intersection of New York Avenue and Florida Avenue, N.E.  The defendant approached the car and directed another officer to knock on its windows to rouse Mr. Gilmore.  When Mr. Gilmore awoke, the car moved forward several feet, stopped briefly, and then moved forward again. As it did so, the defendant fired his MPD-issued firearm at the car four times. The car rolled down New York Avenue, and the defendant fired at it six more times. Three of the defendant’s shots struck Mr. Gilmore, who died a short time later from his wounds. No other officer fired at Mr. Gilmore. 

            “Police officers are sworn to uphold the law and ensure the safety of the community, and we are grateful for the overwhelming majority of Metropolitan Police Department officers who do their difficult and dangerous jobs honorably,” said U.S. Attorney Matthew M. Graves. “But Officer Jevric violated the Constitution and abused his position by recklessly using deadly force where none was necessary, resulting in the tragic and unjustified loss of Mr. Gilmore’s life—a tragedy that has permanently changed the lives of Mr. Gilmore’s family and friends. The U.S. Attorney’s Office is committed to protecting the civil rights of everyone within the District and to holding accountable all who violate those rights.”

            “As a sworn police officer, Jevric knew the acceptable boundaries in which he was authorized to use deadly force,” said Assistant Director in Charge Sundberg. “His willful disregard of these rules resulted in Mr. Gilmore’s tragic and untimely death. While no judicial process will adequately address the loss that the Gilmore family has suffered in this situation, we are committed to ensuring the fullest administration of justice on behalf of the victim and his family.”

            As part of his guilty plea, the defendant admitted that his conduct constituted unconstitutional, unreasonable force, and that he acted willfully, in reckless disregard of Mr. Gilmore’s Fourth Amendment right to be free from excessive force by police. He also admitted that his conduct created an extreme risk of death to Mr. Gilmore and was a gross deviation from a reasonable standard of care.

            This case was investigated by the FBI’s Washington Field Office, with extensive assistance from the FBI Laboratory including the Laboratory Shooting Reconstruction Team. It is being prosecuted by the Fraud, Public Corruption, and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia.

BOSTON – The orchestrator of a nationwide conspiracy that facilitated cheating on college entrance exams and the admission of students as fake athletic recruits to elite universities – including Georgetown, Stanford, the University of California, Los Angeles (UCLA), the University of Southern California (USC), the University of Texas, Wake Forest and Yale – was sentenced today in federal court in Boston. 

William “Rick” Singer, 62, of St. Petersburg, Fla., formerly of Newport Beach, Calif., was sentenced by U.S. District Court Senior Judge Rya W. Zobel to 42 months in prison and three years of supervised release. Singer was also ordered to pay restitution in the amount of $10,668,841 to the Internal Revenue Service and to forfeit specific assets with a value in excess of $5.3 million and approximately $3.4 million in the form of a forfeiture money judgment. In March 2019, Singer pleaded guilty to racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the United States and obstruction of justice. 

“Rick Singer was the architect of a sprawling criminal enterprise that corrupted the admissions process at several of the nation’s most elite universities. His decade-long scheme resembled something out of a Hollywood movie. He courted the entitled, rich and famous, who were so desperate for their children to secure college admission, that they lied, cheated and bribed to get them in,” said United States Attorney Rachael S. Rollins. “While this historic case generated headlines around the globe with privilege, celebrity and entitlement at its core, it also exposed the profound failings in the college admissions process. There should not be a separate college admissions process for the rich, powerful and entitled. This case exposed that there is. But it also resulted in meaningful changes in the college admissions process and I am incredibly proud of that.”

“Rick Singer was the mastermind of a massive criminal enterprise that undermined the college admissions process at universities all across the country. Fueled by pure and simple greed, Mr. Singer raked in millions of dollars in his corrupt scheme in which he rigged the system, making it much easier for far less qualified students and their families to buy their way into some of this country’s most elite universities. With every bribe he paid, he sold out hardworking students a little more. There is no question the damage he has done is profound and today’s sentence shows that there are significant consequences for his criminal conduct,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “Operation Varsity Blues uncovered a bold and shameless decade-long scheme that undercut hard-working students trying to get into these prestigious universities the right way. Everyone we’ve arrested, charged, and convicted to date were integral to the scheme’s success, but without Rick Singer, they never would have succeeded.”

“Access to a quality education is a key pillar of our society and the American institutions that are educating our future leaders are second to none. But maintaining fairness in the access to these great institutions is also a vital part of this system,” said Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston. “Today’s sentence should send a clear message and serve as a deterrent to those who might contemplate similar fraudulent schemes.” 

“Today’s action shows that Mr. Singer abused his position to help scores of parents cheat their way through the college admissions process. In doing so, he damaged the reputation of the schools and hurt legitimate students who sought admission to those schools. That is unacceptable,” said Terry Harris, Special Agent in Charge of the U.S. Department of Education Office of Inspector General Eastern Regional Office.

Singer owned and operated the Edge College & Career Network LLC (The Key) – a for-profit college counseling and preparation business – and served as the CEO of the Key Worldwide Foundation (KWF) – a non-profit corporation that he established as a purported charity to provide educational and self-enrichment programs for disadvantaged youth.

Between approximately 2011 and February 2019, Singer conspired with dozens of parents, athletic coaches, a university athletics administrator, and others, to use bribery and other forms of fraud to secure the admission of students to colleges and universities including Georgetown, Stanford, UCLA, USC, the University of Texas, Wake Forest and Yale. The conspiracy involved paying off test proctors and administrators to permit cheating on college entrance exams and bribing university athletic coaches and administrators to designate applicants as purported athletic recruits based on fabricated credentials. 

Singer facilitated cheating on the SAT and ACT exams for his clients by instructing them to seek extended time for their children on college entrance exams, which often involved having the children purport to have learning disabilities in order to obtain the required medical documentation. Once the extended time was granted, Singer instructed the clients to change the location of the exams to a test center where corrupt test proctors took the exams in place of the students, gave the students the correct answers during the exams, or corrected the students’ answers after they completed the exams, and corrupt test administrators permitted the cheating to occur. In many instances, the students taking the exams were unaware that their parents had arranged for the cheating. 

Singer also accepted payments from parents to bribe coaches and university athletics administrators to designate their children as purported athletic recruits, regardless of their athletic experience or abilities. As part of the scheme, Singer directed his associates to create falsified athletic “profiles” for the students, which were then submitted to the university admissions offices in support of the students’ applications. The profiles included fake athletic honors and, in some instances, staged or photoshopped photos purporting to show the students engaged in athletic activity.

To conceal the scheme, Singer used the Key Worldwide Foundation to disguise bribe payments as purported charitable contributions, thereby enabling clients to deduct the bribes from their federal income taxes. In total, Singer accepted more than $25 million from his clients as part of the scheme – of which he paid bribes totaling more than $7 million and transferred, spent, or otherwise used more than $15 million for his own benefit.

In total, 55 defendants [i] were charged for their involvement in Singer’s exam cheating and athletic recruitment conspiracy. Of those, 53 were convicted – either by guilty plea or jury conviction following trial. One defendant received a Presidential Pardon and one defendant entered into a deferred prosecution agreement with the government. To date, the government has collected $8,880,802 in forfeiture from seized bank accounts, real estate and voluntary payments, $5,682,954 in fines and $96,960 in restitution. For more information on defendants charged in the conspiracy, please visit: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme 

U.S. Attorney Rollins, FBI SAC Bonavolonta, IRS SAC Simpson and DOE-OIG SAC Harris made the announcement today. Assistant U.S. Attorneys Stephen E. Frank, Leslie A. Wright, Kristen A. Kearney, Ian J. Stearns and Kriss Basil of Rollins’ Securities, Financial & Cyber Fraud Unit and Assistant U.S. Attorney Carol Head, Chief of Rollins’ Asset Forfeiture Unit, prosecuted the case.

 

____________________

[i] The Singer-led scheme involved 55 defendants (this number includes Singer). This number does not include two defendants, Amin Khoury and Robert Repella, who conspired separately with former Georgetown tennis coach Gordon Ernst, a defendant in the Singer scheme, but were not themselves involved in the Singer scheme.

TALLAHASSEE, FLORIDA – Phillip Timothy Howard, 62, of Tallahassee, Florida, plead guilty today to racketeering (RICO).  Jason R. Coody, United States Attorney for the Northern District of Florida, announced the guilty plea.

Court documents reflect between in or about December 2015, and in or about January 2018, Howard, a Florida attorney, along with others, was associated with and employed by an Enterprise, that is, his Tallahassee law firm (Howard & Associates, P.A.), and several Tallahassee investment companies (Cambridge Capital Group, LLC; Cambridge Capital Wealth Advisors, LLC; Cambridge Capital Advisors, LLC; Cambridge Capital Funding, Inc., Cambridge Capital Group Equity Option Opportunities, L.P.; and Cambridge Capital Partners, L.P.).  During this time, Howard, along with others, knowingly, willfully, and unlawfully conducted and participated in the conduct of the affairs of the Enterprise, through a pattern of racketeering activity, namely, wire fraud and money laundering. Howard engaged in such racketeering activity through multiple acts of wire fraud related to his representation of former NFL players in a class-action lawsuit. These clients were potentially eligible for settlement payouts from the NFL, and as part of his representation, Howard fraudulently enticed his clients to invest their retirement funds with his investment companies. However, Howard failed to disclose and misrepresented to these former NFL player investors the structure of the Enterprise, and the conflicts of interest and the criminal background of persons associated with or employed by the Enterprise. 

Howard failed to disclose and misrepresented the true nature of investment companies’ funds and the actual investments made by the former NFL player investors. Despite reassuring investors that their money was secure, Howard never informed them that almost none of investment funds yielded a return and failed to disclose that the investment funds had been commingled with funds used to operate his law firm and to issue payroll for its staff, pay Howard’s personal mortgages, and otherwise personally enrich Howard. The former NFL player investors were provided quarterly and year-end investment statements which were inaccurate. These investment statements indicated that investor funds were allocated into two separate investment funds, including a fund designed specifically to invest in equities. In reality, there were no separated, dedicated investment funds, and the bank accounts for the Enterprise had little or no money. Howard and others fraudulently obtained over $4 million through such conduct.

A sentencing hearing is scheduled for November 6, 2023, at 9:00 a.m., at the United States Courthouse in Tallahassee before the Honorable United States District Judge Allen Winsor. Howard faces a maximum penalty of 20 years in prison for racketeering and a maximum term of 3 years of supervised release following any prison sentence that is imposed.

This case resulted from a joint investigation by the Federal Bureau of Investigation and the Internal Revenue Service–Criminal Investigations, with assistance from the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). The case was prosecuted by Assistant United States Attorneys Justin M. Keen and David P. Byron.

The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office for the Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.

BOSTON – A Saugus loan broker was sentenced today in federal court in Boston for operating a scheme that defrauded small businesses from across the country in connection with their efforts to obtain business loans.

Joseph L. Angelo Jr., 59, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to 40 months in prison, three months of supervised release and ordered to pay restitution of $1.1 million. In September 2017, Angelo Jr. pleaded guilty to 11 counts of wire fraud.

From November 2011 to March 2015, Angelo defrauded 10 small business owners of more than $1 million by representing that his companies – Lease One Corp. and Palmtree Finance & Funding LLC – were brokers for obtaining loans for small businesses. Angelo required the customers to deliver to him what he said were fully refundable deposits, aggregating over $1.1 million for loans that he said had been approved and would be funded within a few days. In fact, none of the loans had been approved, and there were no funds available. When the small business owners complained about delays in receiving funds, Angelo promised that their deposits would be refunded, but he did not refund any of the deposits or secure funding for any of the requested loans.

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. Assistant U.S. Attorney Victor A. Wild of Lelling’s Economic Crimes Unit prosecuted the case.

BOSTON – A former United States Marine has been indicted by a federal grand jury in Springfield, Mass. for allegedly stealing benefit payments from the Department of Veterans Affairs and submitting a false Purple Heart application to the United States Marine Corps through his local Congressman. 

Paul John Herbert, 52, of Shelburne Falls, Mass., was indicted on one count of theft of government money and one count of making false statements. Herbert was arrested this morning and was released on conditions following an initial appearance today in federal court in Springfield, Mass.

“Mr. Herbert’s alleged conduct is an affront to every veteran who has sacrificed to earn the honor of a Purple Heart and who is deserving of disability benefits. According to the indictment, he not only stole tens of thousands of dollars in disability benefits that are supposed to be used to help veterans in need, but he also falsely claimed to have suffered a traumatic brain injury during his deployment in an effort to receive a Purple Heart he didn’t deserve,” said United States Attorney Joshua S. Levy. “Every day, thousands of brave members of the military selflessly risk their lives to protect our country. Stealing from our country’s veterans or claiming valor where there is none is an insult to the honorable service members who sacrifice for our safety.” 

“The VA Office of Inspector General remains committed to ensuring that VA benefits are administered to deserving recipients based on legitimate accounts of their military service,” said Christopher Algieri, Special Agent in Charge of the U.S. Department of Veterans Affairs Office of Inspector General (VA OIG) Northeast Field Office. “The VA OIG thanks our partners at the Defense Criminal Investigative Service and the U.S. Attorney’s Office for their efforts in this joint investigation.”

“Individuals who steal veterans disability benefits and falsely represent themselves as decorated veterans of the U.S. Armed Forces degrade the service of the men and women who selflessly serve our country,” said Patrick J. Hegarty, Special Agent in Charge of the U.S. Department of Defense, Defense Criminal Investigative Service (DCIS), Northeast Field Office, the law enforcement component of the Department of Defense Office of Inspector General. “Today's charges demonstrate our commitment to work with the U.S. Department of Veterans Affairs Office of Inspector General and the Department of Justice to investigate allegations of stolen military benefits.”

According to the indictment, from Jan. 1, 2010 to March 11, 2023, Herbert stole more than $344,000 in veterans disability benefits. In addition, on Oct. 24, 2018, Herbert allegedly submitted an application for a Purple Heart award to the United States Marine Corps through his local Congressman, in which Herbert falsely stated that he had suffered injuries, including traumatic brain injury, from a roadside explosion while deployed to Northern Iraq. 

The charge of theft of government money provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of making a false statement provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

Acting U.S. Attorney Levy, VA-OIG SAC Algieri and DCIS SAC Hegarty made the announcement today. Assistant U.S. Attorney Steven H. Breslow of the Springfield Branch Office is prosecuting the case.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – The co-owners of a Boston-area home healthcare company pleaded guilty in federal court in Boston yesterday for underreporting income to the IRS resulting in over $1 million in losses.

Hannah Holland, 51, of Quincy, and Sheila O’Connell, 51, of North Weymouth, pleaded guilty to an Information charging them with one count of conspiracy to defraud the United States and three counts of aiding and assisting in the preparation of false tax returns. U.S. Senior District Court Judge Mark L. Wolf scheduled sentencing to Feb. 13, 2019.

According to court documents, Holland and O’Connell co-owned and operated Erin’s Own Home Healthcare Inc. (“Erin’s Own”), a home healthcare business. Between 2010 and 2014, Holland and O’Connell cashed over $3.5 million of Erin’s Own business checks through nominee bank accounts controlled by an unnamed individual. During this time period, Holland also personally cashed over $77,000 of Erin’s Own business receipts. None of these funds were ever reported to the IRS or accounted for in the company’s tax filings. Instead, Holland and O’Connell provided their tax preparer with a limited set of the financial records that did not cover the substantial amounts of business funds Holland and O’Connell diverted. As a result of the underreporting, Erin’s Own caused a loss of $1,126,112 to the IRS.

The conspiracy charge provides for a sentence of no greater than five years in prison, three years supervised release, and a fine $250,000. The charge of aiding and assisting in the preparation of false tax returns provides for a sentence of no greater than three years in prison, one year supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. 

United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Jordi de Llano, Deputy Chief of Lelling’s Securities and Financial Fraud Unit, and Trial Attorney Brittney Campbell of the Department of Justice’s Tax Division are prosecuting the case.

BOSTON – The U.S. Attorney’s Office announced today that two pharmaceutical companies – Astellas Pharma US, Inc. (Astellas), and Amgen Inc. (Amgen) – have agreed to pay a total of $124.75 million to resolve allegations that they violated the False Claims Act by illegally paying the Medicare co-pays for their own high-priced drugs. 

When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible (collectively, co-pays). Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs.   

“According to the allegations in today’s settlements, Astellas and Amgen conspired with two co-pay foundations to create funds that functioned almost exclusively to benefit patients taking Astellas and Amgen drugs,” said United States Attorney Andrew E. Lelling. “As a result, the companies’ payments to the foundations were not ‘donations,’ but rather were kickbacks that undermined the structure of the Medicare program and illegally subsidized the high costs of the companies’ drugs at the expense of American taxpayers. We will keep pursuing these cases until pharmaceutical companies stop engaging in this kind of behavior.”

 “When pharmaceutical companies use foundations to create funds that are used improperly to subsidize the copays of only their own drugs, it violates the law and undercuts a key safeguard against rising drug costs,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “These enforcement actions make clear that the government will hold accountable drug companies that directly or indirectly pay illegal kickbacks.”  

“Kickback schemes can undermine our healthcare system, compromise medical decisions, and waste taxpayer dollars,” said Phillip Coyne, Special Agent in Charge, Office of the Inspector General of the Department of Health and Human Service’s Boston Regional Office.  “We will continue to hold pharmaceutical companies accountable for subverting the charitable donation process in order to circumvent safeguards designed to protect the integrity of the Medicare program.”

“As today’s settlements make clear, the FBI will aggressively go after pharmaceutical companies that look to bolster their drug prices by paying illegal kickbacks--whether directly or indirectly--to undermine taxpayer funded healthcare programs, including Medicare,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.

The government’s allegations in the two settlements announced today are as follows:

Astellas. Astellas sells Xtandi, an androgen receptor inhibitor (ARI) drug used to treat metastatic castration resistant prostate cancer (mCRPC) in patients who have failed chemotherapy. While there are other mCRPC drugs, none of the other major mCRPC drugs is an ARI. The government alleges that, during the period from July 2013 through December 2014, Astellas arranged for two foundations to operate ARI funds that covered mCRPC patients’ co-pays for ARIs, but not for other mCRPC drugs, and that Xtandi patients received nearly all of the assistance from these two funds. The government further alleges that, during the time that the ARI funds were open, Astellas promoted the existence of the ARI funds as an advantage for Xtandi over competing mCRPC drugs in an effort to persuade medical providers to prescribe Xtandi. During this period, Astellas raised the price of Xtandi at over 24 times the rate of overall inflation in the United States. Astellas has agreed to pay $100 million to resolve the government’s allegations.

Amgen. Amgen sells Sensipar, a treatment for secondary hyperparathyroidism (SHPT), and Kyprolis, a treatment of multiple myeloma. The government alleges that, in late 2011, Amgen stopped donating to a foundation that covered co-pays for patients taking any of several SHPT drugs and approached a new foundation about creating a fund that would cover only Sensipar patients’ Medicare co-pays. Amgen thereafter paid millions of dollars to this fund. Until June 2014, the fund helped only Sensipar patients, as Amgen had requested. Amgen allegedly covered the co-pays of Sensipar patients through this fund even though the cost of doing so exceeded the cost Amgen would have incurred by providing free Sensipar to the same patients. By enabling the fund to cover the copays of Medicare beneficiaries, Amgen caused claims to be submitted to Medicare and generated revenue for itself. During the period the fund covered only Sensipar, Amgen raised the price of Sensipar at over four times the rate of overall inflation in the United States.

The government further alleges that Amgen’s predecessor, Onyx Pharmaceuticals Inc. (Onyx), asked a different foundation to create a fund that, ostensibly, would cover health care related travel expenses for patients taking any multiple myeloma drug, but that, as Onyx and the foundation both knew, functioned almost exclusively to cover travel expenses for patients taking Kyprolis. The foundation also operated a second fund that covered co-pays for several multiple myeloma drugs, including Kyprolis. The government alleges that, for 2013, Onyx obtained data from the foundation on the multiple myeloma fund’s anticipated and actual expenses for coverage only of Kyprolis co-pays. Onyx then donated to the fund in an amount Onyx understood to be sufficient only to cover the co-pays of Kyprolis patients. Amgen has agreed to pay $24.75 million to resolve the government’s allegations.

Amgen and Astellas each entered five-year corporate integrity agreements (CIAs) with OIG as part of their respective settlements. The CIAs require the companies to implement measures, controls, and monitoring designed to promote independence from any patient assistance programs to which they donate. In addition, the companies agreed to implement risk assessment programs and to obtain compliance-related certifications from company executives and Board members.

To date, the Department of Justice has collected over $840 million from eight pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, and Amgen) that allegedly used third-party foundations as kickback vehicles. The U.S. Attorney’s Office for the District of Massachusetts initiated each of these investigations.

U.S. Attorney Lelling, Assistant Attorney General Hunt, HHS-OIG SAC Coyne, and FBI SAC Bonavolonta made the announcement today. The U.S. Postal Inspection Service also assisted with the investigation. The matter was handled by Assistant U.S. Attorneys Gregg Shapiro and Abraham George, of Lelling’s Affirmative Civil Enforcement Unit, and by Trial Attorneys Augustine Ripa and Sarah Arni of the Justice Department’s Civil Division.

BOSTON – An Illinois man was sentenced yesterday for defrauding insurance companies in relation to a high-priced drug made by Cambridge-based pharmaceutical company Aegerion Pharmaceuticals Inc., and for using the identities of physicians to carry out the fraud.

Mark Moffett, 49, of Springfield, Ill., was sentenced by U.S. Senior District Court Judge William G. Young to 54 months in prison and three years of supervised release. In December 2019, Moffett was convicted by a federal jury of nine counts of wire fraud and six counts of aggravated identity theft.

“Mr. Moffett exploited his personal relationships with medical staff, stole doctors’ identities, falsified medical documents and deceived insurance companies – all in pursuit of sales bonuses,” said Acting United States Attorney Nathaniel R. Mendell. “His prison sentence is a reminder that those who engage in healthcare fraud schemes, no matter how sophisticated, will pay for their crimes.”

“Today’s sentence holds Mark Moffett accountable for gaming the healthcare system to line his own pockets. He deceived doctors and patients to boost sales of this powerful drug, and defrauded Medicare in the process. Fraud of this magnitude will not be tolerated because it drives up healthcare costs for all of us,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division.

“Today’s sentence shows that fraudsters like Mark Moffett who try to enrich themselves at the expense of federal health care programs and the well-being of beneficiaries will be held accountable for their greed-fueled schemes. Such scams threaten patient health, waste taxpayer funds, and drive-up healthcare costs for all of us,” said Phillip M. Coyne, Special Agent in Charge for the U.S. Department of Health & Human Services, Office of Inspector General. “Working closely with our law enforcement partners, we will continue to aggressively root out health care fraud and bring criminals to justice.”

“Working with our law enforcement partners, the Employee Benefits Security Administration continues to investigate and vigorously pursue cases in which participants and private sector health benefit plans are victimized by unscrupulous and illegal pharmaceutical sales practices,” said Carol S. Hamilton, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office.

In 2014 and 2015, Moffett, a pharmaceutical sales representative for Aegerion, marketed the company’s cholesterol drug Juxtapid. Juxtapid was approved by the FDA only to treat high cholesterol in patients with a rare genetic disease called homozygous familial hypercholesterolemia (HoFH). The FDA approved the drug only to treat HoFH patients because the drug carried serious risks of side effects, including liver damage. The drug’s label included a black box warning.

Moffett nonetheless convinced doctors to prescribe Juxtapid, which costs over $300,000 per year, for patients without HoFH. In order to defraud Medicare and private sector employee health plans into paying for a drug they only covered for FDA-approved uses, Moffett obtained fraudulent prescriptions and falsified numerous documents, including statements of medical necessity and other insurance documents. This included false patient test results, false clinical histories and false diagnoses. Moffett used the identities of several cardiologists to carry out the fraud. He was paid bonuses by Aegerion of up to $11,000 for each prescription of Juxtapid.

Acting United States Attorney Mendell, FBI Boston SAC Bonavolonta, HSI-OIG SAC Coyne and DOL-EBSA Regional Director Hamilton made the announcement. Assistant U.S. Attorneys Kriss Basil, of Mendell’s Securities and Financial Fraud Unit, and Rachel Y. Hemani, of Mendell’s Health Care Fraud Unit, prosecuted the case.

BOSTON – A Turkish national was indicted today in Boston in connection with his scheme to illegally export defense technical data to foreign nationals in Turkey for the fraudulent manufacturing of various United States military parts, 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.

Arif Ugur, 52, formerly of Cambridge, Mass., was indicted on 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. Ugur will make an initial appearance in federal court in Boston tomorrow before U.S. District Court Magistrate Judge Jennifer C. Boal.

The indictment alleges that 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 a variety of machine parts and hardware items intended for use by the United States military. Many of these contracts required that the parts be manufactured in the United States. In his initial bids and in subsequent email communications with DOD representatives, it is alleged that Ugur falsely claimed that Anatolia was manufacturing the parts in the United States. In fact, Anatolia and Ugur had no manufacturing facilities in the United States or elsewhere. Instead, Ugur contracted with a Turkish manufacturer to make the parts and then passed them off to DOD as if they had been manufactured by Anatolia in the United States.

It is further alleged that Ugur shared technical specifications and drawings of various DOD parts and components with employees of the Turkish manufacturer so that they could produce the parts for Anatolia. Ugur also allegedly provided employees of the Turkish manufacturer and other Turkish nationals with access to DOD’s online library of technical specifications and drawings. Many of the parts that Ugur contracted to provide, and did provide to DOD, 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 (drawings, specifications, etc.) from the United States to Turkey. The charging documents allege that 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.

The charge of violating the Arms Export Control Act provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss from the offense. The charge of conspiring to violate the Arms Export Control Act provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney Nathaniel R. Mendell; Patrick J. Hegarty, Special Agent in Charge of the U.S. Department of Defense, Defense Criminal Investigative Service, Northeast Field Office; Matthew B. Millholin, Special Agent in Charge of Homeland Security Investigations in Boston; and William Higgins, Special Agent in Charge of the U.S. Department of Commerce, Office of Export Enforcement, Boston Field Office, made the announcement today. Assistant U.S. Attorneys Jason A. Casey and Timothy H. Kistner of Mendell’s National Security Unit are prosecuting the case.

Details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – A federal jury in Boston convicted an Illinois man yesterday of defrauding insurance companies in relation to a high-priced drug made by Cambridge-based pharmaceutical company Aegerion Pharmaceuticals Inc., and for using the identities of physicians to carry out the fraud.

Mark Moffett, 47, of Springfield, Ill., was convicted of nine counts of wire fraud and six counts of aggravated identity theft. U.S. District Court Judge William G. Young scheduled sentencing for April 9, 2020.

“Mr. Moffett stole doctors’ identities, obtained fraudulent prescriptions, falsified test results, and forged insurance documents in an effort to sell a powerful drug,” said United States Attorney Andrew E. Lelling. “He ignored the serious consequences it could have on patients’ health, caring more about lining his own pockets. Mr. Moffett’s conviction is part of our ongoing effort to hold pharmaceutical companies accountable for violating laws that protect patient safety and the integrity of the health care system.”

“Mark Moffett took matters into his own hands by defrauding Medicare and potentially putting patients’ health at risk for his own financial benefit,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The FBI would like to thank the jury for their swift verdict, and we will continue to vigorously investigate healthcare fraud matters to protect the public’s interest.”

“Greed was at the very core of Mark Moffett’s scheme to defraud our federal healthcare system,” said Phillip M. Coyne, Special Agent in Charge for the U.S. Department of Health & Human Services, Office of Inspector General. “This type of fraud is corrosive, wastes taxpayer funds, and drives up healthcare costs. We will continue to aggressively root out these fraud schemes and bring criminals to justice.”

“The Employee Benefits Security Administration is pleased to have had the opportunity to work collaboratively with our law enforcement partners on this investigation. I commend the exceptional work performed by our investigators and their law enforcement partners. This office will continue to vigorously pursue cases where participants and private sector health benefit plans are victimized by unscrupulous and illegal pharmaceutical sales practices,” said Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office

In 2014 and 2015, Moffett, a pharmaceutical sales representative for Aegerion, marketed the company’s cholesterol drug Juxtapid. Juxtapid was approved by the FDA only to treat high cholesterol in patients with a rare genetic disease called homozygous familial hypercholesterolemia (“HoFH”). The FDA approved the drug only to treat HoFH patients because the drug carried serious risks of side effects, including liver damage. The drug’s label included a black box warning.

Moffett nonetheless convinced doctors to prescribe Juxtapid, which costs over $300,000 per year, for patients without HoFH. In order to defraud Medicare and private sector employee health plans into paying for a drug they only covered for FDA-approved uses, Moffett obtained fraudulent prescriptions and falsified numerous documents, including statements of medical necessity and other insurance documents. This included false patient test results, false clinical histories and false diagnoses. Moffett used the identities of several cardiologists to carry out the fraud. He was paid bonuses by Aegerion of up to $11,000 for each prescription of Juxtapid.

The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000 per count. The charge of aggravated identity theft provides for a mandatory minimum sentence of two years in prison to be serve consecutive to any other sentence imposed. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. 

U.S. Attorney Lelling, FBI Boston SAC Bonavolonta, HSI-OIG SAC Coyne, and DOL-EBSA Acting Regional Director Hamilton made the announcement. Assistant U.S. Attorneys Kriss Basil, of Lelling’s Securities and Financial Fraud Unit, and Rachel Y. Hemani, of Lelling’s Health Care Fraud Unit, are prosecuting the case.

KNOXVILLE, Tenn. - On June 28, 2023, Sarrah Denton Willhite, 35, of Gatlinburg Tennessee was sentenced to 27 months in prison by the Honorable Thomas A. Varlan, United States District Judge, in the United States District Court for the Eastern District of Tennessee at Knoxville. 

As part of a plea agreement filed with the court, Willhite agreed to plead guilty to an indictment charging her with one count of wire fraud related to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, in violation of 18 U.S.C. § 1343.  Judge Varlan ordered Willhite to pay restitution in the amount of $346,600 and to complete a term of supervised release of two years following her release from prison. 

The CARES Act is a federal law enacted in March 2020 to provide emergency financial assistance to the millions of Americans who suffered economic effects caused by the COVID-19 pandemic.  Two primary sources of relief provided by the CARES Act were the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) program.  The EIDL program was administered by the Small Business Administration (“SBA”) and provided low-interest loans to businesses to pay for items like accounts payable, rent, mortgage payments, and other bills that could not be paid as a result of the pandemic.     

As set forth in the filed plea agreement, on November 27, 2021, Willhite submitted an electronic application to the SBA requesting an EIDL on behalf of Rescue Army Nation Ministries, a nonprofit organization purportedly owned and operated by Willhite for charitable or religious purposes.  Willhite submitted false documents in support of her application, including a Profit and Loss Statement that Willhite fabricated solely for the purpose of obtaining the loan.  She also falsely represented that Rescue Army Nation Ministries employed eight employees.  In fact, as Willhite knew, it employed none.  Willhite also falsely certified that she would use the loan proceeds solely for working capital, and she misrepresented that she was acting on behalf of a charitable or religious organization.

The SBA approved the application based on Willhite’s fabricated documents and false statements.  On December 17, 2021, the SBA transferred by wire $346,600 in EIDL funds into a bank account Willhite controlled.  Between December 17, 2021, and January 28, 2022, Willhite spent approximately all the EIDL funds on personal items or expenses, including a vacation to Disney World, to pay off student loans, to purchase land, and to purchase two vehicles and a travel trailer.  She transferred the remainder of the proceeds to her personal checking account.

U.S. Attorney Francis M. Hamilton III of the Eastern District of Tennessee and Federal Bureau of Investigation (FBI) Special Agent in Charge Joe Carrico made the announcement. 

The case was investigated by the FBI.

Assistant United States Attorney William A. Roach, Jr., who serves as the Coronavirus Fraud Coordinator for the United States Attorney’s Office in the Eastern District of Tennessee, represented the United States.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.  The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.  For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

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

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BOSTON – A Mashpee man has been charged, and has agreed to plead guilty, in connection with a scheme to artificially inflate the trading price of Getty Images Holdings, Inc. and attempting to cover up the alleged scheme.

Robert Scott Murray, 60, has been charged and has agreed to plead guilty to one count of securities fraud. He will appear in federal court in Boston at a later date. 

Getty Images Holdings, Inc. (Getty) is a visual media company and supplier of images, videos and music, headquartered in Seattle. Getty’s stock is publicly traded on the New York Stock Exchange under the ticker symbol GETY. Murray was a long-time investor who previously served as the Chief Executive Officer of multiple public companies, including Stream Global Services and 3Com. It is alleged that in April 2023 Murray owned approximately 300,000 GETY shares. Thereafter, Murray allegedly issued press releases and sent emails in the name of Trillium Capital LLC – a “venture investment company” located in Massachusetts of which Murray was the sole owner and manager – urging that Getty add Murray to its board of directors. Murray’s efforts to join Getty’s board of directors failed.

Murray allegedly proceeded to make false and misleading statements, including through press releases and in media interviews, with the purpose of artificially inflating the GETY trading price so that Murray could sell the GETY shares he owned at the artificially inflated price. On Friday, April 21, 2023, GETY shares closed at a trading price of $5.06 per share. On Monday, April 24, 2023, prior to the market opening, Murray allegedly caused the publication of a press release in which Trillium Capital made a proposal to acquire Getty for “$10 per share.” When the market opened, GETY shares traded at $7.88 per share, nearly 56 percent above the prior closing price. According to court documents, Murray then sold all the GETY shares he owned within less than one hour for approximately $1,486,467. It is further alleged that Murray’s friend, who Murray had previously instructed to buy GETY shares, also sold shares that same morning at Murray’s direction for approximately $558,328.

On or about Dec. 6, 2023, at the direction of law enforcement, Murray’s friend texted Murray, “I just got a subpoena from the SEC” and “they’re asking me for any communications with you” related to “Getty stock.” Murray allegedly responded, “just say there were none” and “you should delete all my texts.” Murray further stated that text messages are “like virginity, once you delete your virginity you ain’t getting it back.” On or about that same day, it is alleged that Murray emailed his friend a proposed response to the subpoena, which falsely stated that the friend bought Getty stock “solely based on my read of the various press releases from Trillium Capital and my knowledge that Scott Murray is a very experienced investor” and “not from any communications from Scott Murray or Trillium Capital.” It is further alleged that when approached by law enforcement in February 2024, Murray falsely denied telling his friend to buy Getty shares.

The charge of securities fraud provides for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

The Securities and Exchange Commission filed a civil complaint against Murray alleging violations of the securities laws.

Acting United States Attorney Joshua S. Levy and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigations, Boston Division made the announcement. The Securities and Exchange Commission provided valuable assistance with the investigation. Assistant U.S. Attorney Christopher J. Markham of the Securities, Financial & Cyber Fraud Unit is prosecuting the case.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – Two Malaysian nationals were sentenced today in federal court in Boston for conspiring to illegally export firearm parts from the United States to Hong Kong.

Lionel Chan, 36, of Brighton, Mass., was sentenced by U.S. Senior District Court Judge Mark L. Wolf to eight months in prison, three years of supervised release and a fine of $10,000. Muhammad Mohd Radzi, 27, of Brooklyn, N.Y., was sentenced by Judge Wolf to five years of probation, with the condition that he leave the United States on or before June 15, 2021 and not return for five years or without a valid visa, and a fine of $10,000. Chan and Radzi each pleaded guilty on Jan. 22, 2021 to conspiring to violate the Arms Export Control Act.

Beginning in or around March 2018, Chan began purchasing a variety of U.S.-origin firearm parts online, including parts used to assemble AR-15 assault rifles and 9MM semi-automatic handguns, for a buyer located in Hong Kong. Many of the firearm parts that Chan purchased and exported to Hong Kong are restricted items that cannot be exported from the United States without a license or approval from the U.S. government. Nonetheless, Chan shipped the firearm parts via Federal Express to the buyer in Hong Kong without first obtaining the necessary export licenses. Chan intentionally concealed the contents of the shipments by providing Federal Express with false information about the shipments, and by concealing the parts inside of each package. Between March and May 2018, Chan shipped at least 12 packages containing firearm parts from Brighton to the buyer in Hong Kong.

In or around April 2018, Radzi joined the conspiracy and also began illegally exporting firearm parts from the United States to Hong Kong. Between May and October 2018, Radzi shipped 21 packages from Brooklyn, N.Y., to the buyer in Hong Kong. In October 2018, two of those packages were intercepted by Hong Kong authorities and found to contain numerous firearms parts, including a firing pin, a gun sight and numerous pistol grips, which were export controlled. Like Chan, Radzi failed to obtain an export license for any of these shipments.

Acting United States Attorney Nathaniel R. Mendell; William S. Walker, Acting Special Agent in Charge of Homeland Security Investigation in Boston; and William Higgins, Special Agent in Charge of the Department of Commerce, Office of Export Enforcement, Boston Field Office made the announcement today. The Massachusetts State Police and U.S. Customs and Border Protection also assisted with the investigation. Assistant U.S. Attorney Jason A. Casey of Mendell’s National Security Unit prosecuted the case.

BOSTON –A Chelsea man was charged today in U.S. District Court in Boston with trafficking in counterfeit Apple, Inc. iPhone components at three retail locations in the Boston area.

 

Arif Ali Shah, 66, was charged with trafficking in counterfeit iPhone components that bore Apple trademarks – the Apple icon and the iPhone word mark – but were not genuine Apple products.

 

It is alleged that between approximately 2005 and February 2015, Shah sold counterfeit Apple merchandise at his three retail locations: Nadia’s in Dorchester, East Boston Wireless in East Boston and Todo Wireless in Chelsea. Shah also repaired genuine iPhones at his stores using counterfeit components. Shah purchased the counterfeit merchandise from sources both outside the United States and from a domestic supplier. Shah knew that the goods were counterfeit, but nonetheless sold and attempted to sell thousands of pieces of counterfeit merchandise.

 

The trafficking statute provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of up to $2 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

 

Acting United States Attorney William Weinreb and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney Amy Harman Burkart of Weinreb’s Cybercrime Unit is prosecuting the case.

 

The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

 

BOSTON – A Lawrence man was sentenced yesterday in federal court in Boston for money laundering, transacting in criminally-derived property, and theft of public funds. 

Leonardo Lara, 36, was sentenced by U.S. District Court Judge Rya W. Zobel to 15 months in prison, three years of supervised release, and ordered to pay restitution in the amount of $67,871. In March 2017, Lara pleaded guilty to two counts of laundering monetary instruments, two counts of transacting in criminally-derived property, and five counts of theft of government funds.

On at least 10 occasions between January and March 2012, Lara converted fraudulent United States Treasury tax refund checks for his own use.  He deposited into his personal checking account at least 10 fraudulent tax refund checks payable in the names of taxpayers in Puerto Rico and elsewhere that resulted from the filing of fraudulent tax returns in tax years 2010 and 2011.  Each of the tax refund checks was endorsed with the purported signature of the payee taxpayer and the notation “pay to the order of Leonardo Lara” along with the defendant’s signature.  The payees of the tax refund checks did not earn the wages reported in the tax returns and were unaware that the tax returns had been filed in their names.  Shortly after the tax refund checks cleared, Lara made cash withdrawals from the account.  In total, he converted at least $67,871 in government funds for his own use.

In addition, on two occasion, Lara purchased property in Lawrence through transactions designed to conceal the nature and source of his proceeds. On Feb. 12, 2012, he purchased a cashier’s check in the amount of $56,574 and used it to purchase property. The funds were withdrawn from an account controlled by Lara and held in the name of JZE LLC., a bank account funded, at least in part, by structured cash deposits, and the funds withdrawn from the bank had been derived, at least in part, from Lara’s theft of public funds.  On March 16, 2012, Lara purchased another cashier’s check for $60,657 and used it to purchase another property in Lawrence. 

Lara was also involved in certain drug activity involving the distribution of oxycodone pills.  Over a two-year period, approximately $475,000 was deposited into accounts controlled by Lara, none of which was explained by any legitimate sources of income. 

Acting United States Attorney William D. Weinreb; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation Division in Boston; and Michael Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today.  Assistant U.S. Attorney Linda M. Ricci of Weinreb’s Narcotics and Money Laundering Unit prosecuted the case.

CHICAGO — A Chicago chiropractor has been convicted of federal health care fraud charges for billing a private insurer for nonexistent services.

CLARENCE W. BROWN III owned and operated Dr. CB3 Wellness, Inc. and Apex Integrated Medical Center, Ltd. in Chicago.  From 2016 to 2020, Brown submitted fraudulent claims to Blue Cross Blue Shield of Illinois for purported health care services that Brown knew were not actually provided to patients.  Some of the fraudulent claims were for services purportedly provided on dates when Brown was not in Illinois.  Brown prepared false patient medical records and other documents to support his fraudulent claims.  Brown billed BCBS approximately $1.3 million for services purportedly provided to members of two families that were not actually provided, and, as a result, fraudulently obtained approximately $750,000 from the carrier.

After a two-week trial in U.S. District Court in Chicago, a jury on April 12, 2024, convicted Brown, 48, of Chicago, on all nine health care fraud counts against him.  Each count is punishable by up to ten years in federal prison.  U.S. District Judge John F. Kness set sentencing for July 23, 2024.

The conviction was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorneys Misty N. Wright and Andréa L. Campbell.

BOSTON – A former college track and field coach was sentenced today in federal court in Boston in connection with a scheme to fraudulently obtain thousands of explicit photos from over 100 women across the country through the use of nearly two dozen sham social media and email accounts. The defendant cyberstalked one female student-athlete and orchestrated another scheme to gain unauthorized access to other victims’ Snapchat accounts. 

The defendant previously worked as a track and field coach at several academic institutions, including Northeastern University, Penn State University, Illinois Institute of Technology, University of Tennessee and Concordia University Chicago.

Steve Waithe, 31, formerly of Chicago, Ill., and Somerville, Mass., was sentenced by U.S. District Court Judge Patti B. Saris to five years in prison to be followed by three years of supervised release. Among the terms of his supervised release conditions, Waithe will be prohibited from taking any jobs in which he could serve as a coach, teacher, mentor, or any similar role involving women or girls and his internet usage will be strictly monitored by probation. In November 2023, Waithe pleaded guilty to 12 counts of wire fraud; one count of cyberstalking; one count of conspiracy to commit computer fraud; and one count of computer fraud, aiding and abetting. Waithe was arrested and charged by criminal complaint in April 2021 and subsequently indicted by a federal grand jury in December 2021. 



“This defendant’s conduct is deplorable. He exploited his trusted role as a coach to college athletes to engage in a sextortion campaign that has left a trail of emotional devastation in its wake. We stand by the courageous victims who came forward and help this Office hold Mr. Waithe accountable. The array of on-line threats is striking, and this Office will be vigilant in investigating and prosecuting those who sexually exploit victims,” said Acting United States Attorney Joshua S. Levy. 



“The depth of deceit demonstrated by Steve Waithe in this case is deeply disturbing. This predator readily betrayed the trust of over 50 women, tricking them into sending him explicit photos which he then used to exploit and extort them. His reprehensible actions inflicted significant anguish on these victims who were living in fear of being so personally exposed,” said Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “Today’s sentence shows that cyberstalking and sextortion is not some sick game, they’re serious crimes, and the FBI will continue to unmask and hold accountable anyone who uses today’s technology in such a vile way.”

While a track coach at Northeastern University, Waithe requested the cell phones of female student-athletes under the pretense of “filming their form” at practices and meets and then covertly sending himself explicit photos of the victims that had previously been saved on their phones.

Approximately one year later in  February 2020, and after he no longer worked at Northeastern University, Waithe began perpetrating an evolving series of schemes to deceive women into sending him nude or semi-nude photos of themselves. 

In total, Waithe victimized at least 56 women and attempted to victimize 72 more. Waithe used anonymized social media accounts with usernames like “anon.4887” and variations of the phrase “Privacy Protector” to contact prospective victims, including some of the same student-athletes from the Northeastern University track and field team, claiming that he had “found” compromising photos of them online and offering to “help” get the photos removed from the internet. Waithe also requested additional nude or semi-nude photos from victims that he could purportedly use for “reverse image searches.” Notably, none of the Northeastern University student-athletes were tricked by this scheme, though Waithe continued to try it on new prospective victims.

Further, Waithe fabricated at least two female personas, “Katie Janovich” and “Kathryn Svoboda,” in an effort to obtain additional nude and/or semi-nude photos of women. Under the purported premise of an “athlete research” or “body development” study, Waithe emailed prospective victims pretending to be “Katie” or “Kathryn” with email accounts in their names. The emails described a phony study for athletes and requested information relating to height, weight, body fat and diet habits. The emails also included a request for the victims to send photos of themselves in order to “track their progress” and recommended that the photos show the women in a “uniform or bathing suit to show as much skin as possible.” The emails often included attachments of sample nude and semi-nude images to illustrate the types of photos that victims should send. 

Investigators identified 22 sham online accounts across at least seven different platforms used by Waithe and hundreds of photos sent by dozens of victims who thought they were emailing someone conducting a legitimate research study.

Waithe also cyberstalked one victim, from at least June 2020 to October 2020, through text messages and direct messages sent via social media, as well as by hacking into her Snapchat account. He texted and sent nude photos of the victim to the victim’s boyfriend, stating, “I wanted to make you aware that someone hacked your girlfriend’s snapchat account and will leak it soon. I need your help to assure this does not happen.” Over the course of five months, Waithe sent harassing and intimidating messages to the victim and her boyfriend. The messages included explicit photos that Waithe had stolen from the victim’s phone when she was on the track and field team at Northeastern.  

In October 2020, Waithe conspired with another individual to hack into Snapchat accounts, ultimately gaining access to at least one account and its private “My Eyes Only” folder that contained nude and/or semi-nude photos. Additionally, Waithe provided his co-conspirator with the usernames and phone numbers for the Snapchat accounts of at least 15 women. Waithe and his co-conspirator then used this information to craft and send text messages purporting to be from the “Snapchat Support Team” and requesting security information, through which they gained access to at least one account.

The investigation revealed that Waithe’s internet browsing history included visits to webpages with titles like, “Can anyone trace my fake Instagram account back to me?” and “How to Hack Someones Snapchat the Easy Way.” Waithe’s search history also included searches for, among other things, “how to hack snapchat with a username and phone number.”

Waithe distributed some of the stolen images on websites where stolen and so-called “leaked” photos are posted, shared, and traded. In one post, Waithe wrote, “Does anyone want to trade nudes? I’m talking girls you actually know. Could be exes or whatever. I have quite a few and [am] down to trade over snap[chat] or something.” In total, Waithe posted or otherwise offered to trade images of victims on no fewer than 55 occasions.

After being released on conditions following his arrest in April 2021, Waithe continued to engage in virtually identical conduct while under pre-trial supervision. Specifically, Waithe accessed his Instagram account on more than a hundred occasions, soliciting new prospective victims and requesting that they send him photos of themselves via direct messages. In one Instagram conversation in late May and early June 2022 – approximately one year after his initial charge and arrest in this case, and months after being indicted by a federal grand jury – Waithe complimented a young woman via Instagram direct message and offered to pay her in exchange for allowing him to make “drawings” using photos of her. In another Instagram conversation with a separate prospective victim in June 2022, Waithe told a young woman that she is in “such great shape” and offered her $50 to participate in a “study.”

Acting U.S. Attorney Levy and FBI SAC Cohen made the announcement today. The Northeastern University Police Department provided substantial assistance with the investigation. The Suffolk County District Attorney’s Office and the Chicago Police Department also provided valuable assistance. Assistant U.S. Attorney Adam W. Deitch of the Criminal Division prosecuted the case.

BOSTON – A former Cambridge man pleaded guilty today in Boston in connection with his scheme to illegally export defense technical data to foreign nationals in Turkey for the fraudulent manufacturing of various United States military parts, 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.

Arif Ugur, 53, 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. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Dec. 14, 2022. Ugur was indicted on July 21, 2021.

In 2015, Ugur, a Turkish national, 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 a variety of machine parts and hardware items intended for use by the United States military. Many of these contracts required that the parts be manufactured in the United States. In his initial bids and in subsequent email communications with DOD representatives, Ugur falsely claimed that Anatolia was manufacturing the parts in the United States. In fact, Anatolia and Ugur had no manufacturing facilities in the United States or elsewhere. Instead, Ugur contracted with a Turkish manufacturer to make the parts and then passed them off to DOD as if they had been manufactured by Anatolia in the United States.

Ugur shared technical specifications and drawings of various DOD parts and components with employees of the Turkish manufacturer so that they could produce the parts for Anatolia. Ugur also provided employees of the Turkish manufacturer and other Turkish nationals with access to DOD’s online library of technical specifications and drawings. Many of the parts that Ugur contracted to provide, and did provide to DOD, 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 (drawings, 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.

The charge of violating the Arms Export Control Act provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss from the offense. The charge of conspiring to violate the Arms Export Control Act provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

United States Attorney Rachael S. Rollins; Patrick J. Hegarty, Special Agent in Charge of the U.S. Department of Defense, Defense Criminal Investigative Service, Northeast Field Office; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston; and James Brigham, Acting Special Agent in Charge of the U.S. Department of Commerce, Office of Export Enforcement, Boston Field Office, made the announcement today. Assistant U.S. Attorneys Jason A. Casey and Timothy H. Kistner of Rollins’ National Security Unit are prosecuting the case.

ST. LOUIS – U.S. District Court Judge Stephen R. Clark on Tuesday sentenced the former president of the St. Louis Board of Alderman and two other former aldermen to prison for accepting multiple bribes to misuse their official positions. One alderman was also sentenced for committing insurance fraud in a separate case.

Judge Clark sentenced Lewis Reed, the former board president, to 45 months in prison on two bribery-related charges and fined him $18,500 to represent the value of the bribes and campaign contributions Reed accepted. 

Former 22nd Ward Alderman Jeffrey L. Boyd, the former board vice president, was sentenced to 36 months for two bribery-related charges in one case and two counts of wire fraud in the insurance fraud case. Judge Clark fined Boyd $23,688, twice the value of the bribes Boyd accepted.

Judge Clark sentenced Former 21st Ward Alderman John Collins-Muhammad to 45 months in prison and a $19,500 fine on two bribery-related charges and one charge of honest services bribery/wire fraud. 

“The victims here – the 300,000 residents of the city of St. Louis – expect their elected officials to do their jobs honestly and honorably, not line their pockets and swap official actions for cash,” said U.S. Attorney Sayler A. Fleming. “I hope this case demonstrates that investigating and prosecuting public corruption has been and will continue to be one of the priorities of the Justice Department and this office.”

 



The victims here – the 300,000 residents of the city of St. Louis – expect their elected officials to do their jobs honestly and honorably, not line their pockets and swap official actions for cash. – U.S. Attorney Sayler Fleming



 

All three former aldermen helped a businessman, identified in court documents as “John Doe,” in multiple dealings with city agencies and sponsored, supported and signed off on multiple board bills before the St. Louis Board of Aldermen. All three also lied to FBI agents until confronted with photographs and recordings of themselves accepting bribes, Assistant U.S. Attorney Hal Goldsmith wrote in a sentencing memo.

None of the former aldermen displayed any concern about taking bribes, demonstrating through their actions and their statements that “it was simply business as usual,” Goldsmith wrote.

As an example, when John Collins-Muhammad introduced Doe to another public official to seek his help winning trucking contracts, Collins-Muhammad warned Doe that he needed to be prepared to pay a bribe. “If you don’t throw him something, he’ll never come back,” Collins-Muhammad said on an undercover recording quoted in the memo.

“This case presents a picture of greed, pure and simple,” Goldsmith wrote in the memo. “These Defendants sold their elected offices in exchange for cash bribes, campaign donations, and other things of value with total disregard for the best interests of their constituents, the real victims in this case.”

“Small businesses contribute significantly to the economic engine of our communities. It’s hard enough for entrepreneurs to establish and grow their companies without needing to pay bribes to elected officials. What these three City of St. Louis aldermen did to selfishly line their own pockets was a slap in the face to our community,” said Special Agent in Charge Jay Greenberg of the FBI St. Louis Division. “If anyone is aware of misconduct or corruption by public officials, please contact the U.S. Attorney or the FBI. Without your courage to come forward, corrupt officials will be able to continue to abuse their power for their own benefit, instead of serving the constituents who elected them.”

All three former aldermen pleaded guilty in August to all the charges in their May 2022 indictment. 

Collins-Muhammad admitted accepting a total of $13,500 in cash, $3,000 in campaign contributions, a Volkswagen CC sedan and an Apple iPhone 11 to assist Doe obtain a multi-year property tax abatement for a building he was developing in Collins-Muhammad’s ward.

After the development sparked opposition from residents, Collins-Muhammad lied and told those residents that he would not continue to seek the tax incentives.

Collins-Muhammad also introduced Doe to other public officials, suggesting he bribe them as well. Collins-Muhammad received $3,000 for setting up the meeting with the public official about the trucking contracts. That official initially accepted a $10,000 bribe before returning the money and asking for two $5,000 checks to the official’s campaign account. The checks were never cashed or deposited and Doe never received any contracts. Collins-Muhammad then told Doe that the official wanted another $2,500 in cash, but Collins-Muhammad used the money to buy a 2008 Chevrolet Trailblazer for his own use.

Collins-Muhammad also received $1,000 from Doe for setting up a meeting with Boyd.

Reed took $6,000 in cash and $3,500 in campaign contributions to help Doe obtain Minority Business Enterprise certification and win city trucking and hauling contracts. Reed took another $9,000 total in cash to assist in the property tax abatement bid involving Collins-Muhammad.

Boyd admitted accepting a total of $9,500 from Doe for his help convincing the city’s Land Reutilization Authority to accept a lower bid from Doe for a commercial property on Geraldine Avenue in Boyd’s ward. The LRA ultimately accepted Doe’s $14,000 bid. The LRA initially listed the property as worth $50,000. Boyd then worked to get a property tax abatement for Doe.

In addition to the cash, Boyd accepted free repairs from Doe for two vehicles owned by Boyd.

In a separate case, Boyd admitted fraudulently submitting an insurance claim for three vehicles owned by Doe. A Jan. 17, 2021 accident at Doe’s used car lot damaged the vehicles, and when Doe learned that his insurance would not cover the damage, Boyd suggested falsely claiming that his company owned them.

Boyd then falsified and backdated vehicle sales records and Missouri Department of Revenue documents to claim he had paid $22,000 for the vehicles on Jan. 2. In addition to the claim for damages, Boyd also falsely attempted to claim a $200 daily storage fee for the damaged vehicles. Boyd’s insurance company ultimately rejected the claim, despite his attempt to have his insurance agent intervene.

The FBI investigated the case. Assistant U.S. Attorney Hal Goldsmith prosecuted the case.

 

BOSTON – A suspended Massachusetts State Police Trooper was charged and agreed to plead guilty today in connection with being paid over $11,000 for overtime hours that he did not work.

Kevin Sweeney, 40, of Braintree, was charged with one count of embezzlement from an agency receiving federal funds and one count of wire fraud. Sweeney has agreed to plead guilty; a court date has not yet been scheduled. 

According to court documents, Sweeney was a MSP Trooper assigned to Troop E, which was responsible for enforcing criminal and traffic regulations along the Massachusetts Turnpike, Interstate I-90. In 2015, Sweeney earned $249,407, which included approximately $111,808 in overtime pay. In 2016, Sweeney earned $218,512, which included approximately $95,895 in overtime pay. 

Sweeney was allegedly paid for overtime shifts that he either did not work at all or from which he left early. Sweeney concealed his fraud by submitting fraudulent citations designed to create the appearance that he had worked overtime hours that he had not, and falsely claimed in MSP paperwork and payroll entries that he had worked the entirety of his overtime shifts.

For example, on Dec. 14, 2016, Sweeney claimed in MSP payroll submissions and other paperwork to have worked a “D AIRE” overtime shift from 7:00 p.m. to 11:00 p.m. Sweeney allegedly wrote eight motor vehicle citations during the shift and submitted copies of those citations to MSP as evidence that he had worked. Yet, Sweeney’s cruiser radio was not turned on during the overtime shift, he did not run any driver histories during the shift, and Registry of Motor Vehicle records reflect that none of the motorists that Sweeney claims to have cited actually received a citation that day. 

Sweeney has agreed to plead guilty to being paid $11,103 for overtime hours that he did not work. The overtime in question involved the Accident and Injury Reduction Effort program (AIRE) and the “X-Team” initiative, which were intended to reduce accidents, crashes, and injuries on I-90 through an enhanced presence of MSP Troopers who were to target vehicles traveling at excessive speeds. 

In 2015 and 2016, MSP received annual benefits from the U.S. Department of Transportation in excess of $10,000, which were funded pursuant to numerous federal grants.

Sweeney is the sixth trooper charged as a result of the ongoing investigation. On June 27, 2018, former Lieutenant David Wilson, 57, of Charlton; Trooper Gary Herman, 45, of Chester; and former Trooper Paul Cesan, 50, of Southwick, were arrested and charged with the same crime. On July 2, 2018, former Trooper Gregory Raftery, 47, of Westwood was charged and pleaded guilty. On July 25, 2018, retired Trooper Daren DeJong, 56, of Uxbridge, was also charged.

The charge of theft of government funds provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss. The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Douglas Shoemaker, Special Agent in Charge of the U.S. Department of Transportation’s Office of Inspector General made the announcement today. Assistant U.S. Attorneys Dustin Chao and Mark Grady of Lelling’s Public Corruption Unit and Neil Gallagher of Lelling’s Economic Crimes Unit are prosecuting the case.

BOSTON – A California man was arrested on Tuesday, April 20, 2022 and charged in federal court in Springfield, Mass. in connection with making threats against Merriam-Webster, Inc.

Jeremy David Hanson, 34, of Rossmoor, Calif., was charged by criminal complaint with one count of interstate communication of threats to commit violence. Hanson was released on conditions following an initial appearance in federal court in the Central District of California. Hanson will appear before U.S. District Court Magistrate Judge Katherine A. Robertson in federal court in Springfield on April 29, 2022.

“Hate-filled threats and intimidations have no place in our society,” said United States Attorney Rachael S. Rollins. “We believe Hanson sent a multitude of anonymous threatening and despicable messages related to the LGBTQ community that were intended to evoke fear and division. My office and our law enforcement partners will not tolerate threats against members of our communities, no matter what corner of the internet they’re sent from. Perpetrators will be identified, arrested, and held accountable in federal court.”

“Jeremy Hanson is accused of making hate-fueled threats of violence that crossed a line,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Everyone has a right to express their opinion, but repeatedly threatening to kill people, as has been alleged, takes it to a new level. We are always going to pursue individuals who try to intimidate and isolate members of our community by inciting violent, hateful acts. Threats to life are most certainly not protected speech and they cause real fear in victims. Rest assured, the FBI will do everything we can to bring to justice anyone who commits these criminal acts.”

According to the criminal complaint, between Oct. 2 and Oct. 8, 2021, Springfield-based Merriam-Webster, Inc. received various threatening messages and comments demonstrating bias against specific gender identities submitted through its website’s “Contact Us” page and in the comments section on its webpages that corresponded to the word entries for “Girl” and “Woman.” Authorities later identified the user as Hanson. As a result of the threats, Merriam-Webster closed its offices in Springfield and New York City for approximately five business days.

Specifically, it is alleged that on Oct. 2, 2021, Hanson used the handle “@anonYmous” to post the following comment on the dictionary’s website definition of “female”: “It is absolutely sickening that Merriam-Webster now tells blatant lies and promotes anti-science propaganda. There is no such thing as ‘gender identity.’ The imbecile who wrote this entry should be hunted down and shot.”

Hanson also allegedly sent the following threatening message via the website’s “Contact Us” page: “You [sic] headquarters should be shot up and bombed. It is sickening that you have caved to the cultural Marxist, anti-science tranny [sic] agenda and altered the definition of ‘female’ as part of the Left’s efforts to corrupt and degrade the English language and deny reality. You evil Marxists should all be killed. It would be poetic justice to have someone storm your offices and shoot up the place, leaving none of you commies alive.”

It is further alleged that on Oct. 8, 2021, Hanson posted another threatening comment on the dictionary’s website and a threatening message via the “Contact Us” page that threatened to “bomb your offices for lying and creating fake…”. 

The investigation identified numerous related threats, including to the American Civil Liberties Union, Amnesty International, Land O’ Lakes, Hasbro, Inc., IGN Entertainment, the President of the University of North Texas, two professors at Loyola Marymount University and a New York City rabbi.

Individuals or entities who believe they may be victims of this crime should contact the U.S. Attorney’s Office at (888) 221-6023.

The charge of interstate transmission of communications to injure the person of another provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

U.S. Attorney Rollins and FBI SAC Bonavolonta made the announcement. Assistant U.S. Attorney Steven H. Breslow of Rollins’ Springfield Branch Office is prosecuting the case. 

The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

BOSTON – This week, the United States Attorney’s Office partnered with the Winchester and Waltham Police Departments to host financial fraud awareness seminars for older adults at the Winchester Senior Community Center and the Waltham Council on Aging.

The seminars provided education and awareness to local seniors about financial fraud and featured a number of presentations from seasoned professionals, including Acting United States Attorney Joshua S. Levy; Deputy U.S. Attorney Mary Murrane; and the U.S. Attorney’s Office’s Elder Justice Coordinator, with assistance from members of the Internal Revenue Service and United States Postal Service. Topics covered included common scams directed at older adults; ways to avoid being victimized; what to do if victimized; and available local, state and federal resources. This week’s events were in support of the Department of Justice’s ongoing commitment to fighting for justice for older adults and stopping elder abuse and financial fraud by actively promoting public awareness. 

According to the FBI’s Internet Crime Complaint Center 2022 report, victims over 60 experienced an 84% increase in loss from 2021. The total loss reported was over $3 billion, including nearly 5,500 victims who lost over $100,000. Millions of older Americans fall prey to various financial scams, including tech support schemes; romance scams; and sweepstakes scams just to name a few. Perpetrators establish trust through online, phone, or mail communication, as well as indirectly through TV and radio. The financial exploitation of older adults often leads to a diminished quality of life through the potential loss of independence, declined health and psychological or emotional distress caused by the victimization. 









“Protecting seniors from abuse and exploitation is one of my top priorities. Outreach activities like this are essential to raise awareness and educate communities about potential threats, how to report them, steps people can take to protect themselves from being victimized and available resources,” said Acting U.S. Attorney Levy. “Scams targeting seniors are not just about the money lost – they also rob victims of their dignity and self-confidence. Our office would much rather prevent criminal conduct than prosecute it.  Nonetheless we are committed to continue our will strong track record of prosecuting individuals who prey on vulnerable members of our communities.”



“Preventing the perpetration of fraud against our elderly community is a top priority of IRS CI,” said Harry Chavis, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, Boston. “This week’s seminars mark a key milestone in our efforts to educate the community and provide them with the tools they need to identify fraud schemes before they are victimized.  We appreciate the opportunity to partner with our local, state, and federal law enforcement partners for this awareness seminar and we will continue that collaboration as we investigate financial fraud schemes that prey on our most vulnerable populations.”

“The U.S. Postal Inspection Service is committed to protecting one of our nation’s most vulnerable populations, our senior citizens. We know that many elderly Americans are specifically targeted by scammers who aim to steal pensions and life savings through deceptive and manipulative tactics. The U.S. Postal Inspection Service takes every opportunity to conduct public outreach and educate seniors on the various ways they can safeguard themselves from becoming a scammer’s next target. We are proud to partner with our federal and local law enforcement partners on the topic of elder fraud and abuse prevention to continue this important work of protecting American seniors” said Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division.

“Protecting our seniors is one of our highest priorities and something we take very seriously. Bringing awareness to these scams is essential to reducing victimization.  One way we accomplish this is through partnerships. We are pleased to partner with the U.S. Attorney’s Office and look forward to future collaborations that will enhance the lives and safety of all Waltham residents” said Waltham Police Chief Daniel O’Connell.

“Since 2020, the Winchester Police Department has seen a rise in “grandchildren in need” scams, IRS fraud claims, contracting scams and fraudulent “government official” phone scams. It is through educational programs like this, that we can help prevent and protect our vulnerable residents from theft,” said Sergeant Michael DeRosa, Community Resource Officer of the Winchester Police Department. 

To learn more about common elder fraud schemes and ways to protect yourself, please visit: https://www.fbi.gov/how-we-can-help-you/scams-and-safety/common-scams-and-crimes/elder-fraud. A free brochure with this information can be accessed here: https://www.justice.gov/file/1523236/download. You can also visit https://www.justice.gov/file/1172351/download to learn more about warning signs of elder abuse and reporting resources in Massachusetts. For more information and resources from the Department of Justice's Elder Justice Initiative, please visit https://www.justice.gov/elderjustice.

If you need assistance or to report elder abuse, please contact your local adult protective services agency through the Eldercare Locator or by call the helpline at 1-800-677-1116 Monday – Friday 9am – 8pm EST. To report elder fraud, please visit the FBI’s IC3 Elder Fraud Complaint Center or contact the dedicated National Elder Fraud Hotline at 833–FRAUD–11 or 833–372–8311 Monday – Friday, 10am – 6pm EST. 

BOSTON – Two Malaysian nationals pleaded guilty today in federal court in Boston to conspiring to illegally export firearm parts from the United States to Hong Kong.

Lionel Chan, 36, who previously resided in Brighton, Mass., and Muhammad Mohd Radzi, 27, who previously resided in Brooklyn, N.Y., each pleaded guilty to conspiring to violate the Arms Export Control Act. U.S. Senior District Court Judge Mark L. Wolf scheduled sentencing for May 28, 2021.

Beginning in or around March 2018, Chan began purchasing a variety of U.S.-origin firearm parts online, including parts used to assemble AR-15 assault rifles and 9MM semi-automatic handguns, for a buyer located in Hong Kong. Many of the firearm parts that Chan purchased and exported to Hong Kong are restricted items that cannot be exported from the United States without a license or approval from the U.S. government. Nonetheless, Chan shipped the firearm parts via Federal Express to the buyer in Hong Kong without first obtaining the necessary export licenses. Chan intentionally concealed the contents of the shipments by providing Federal Express with false information about the shipments, and by concealing the parts inside of each package. Between March and May 2018, Chan shipped at least 12 packages containing firearm parts from Brighton to the buyer in Hong Kong.

In or around April 2018, Radzi joined the conspiracy and also began illegally exporting firearm parts from the United States to Hong Kong. Between May and October 2018, Radzi shipped 21 packages from Brooklyn, N.Y., to the buyer in Hong Kong. In October 2018, two of those packages were interdicted by Hong Kong authorities and found to contain numerous firearms parts, including a firing pin and gun sight, which were export controlled. Like Chan, Radzi failed to obtain an export license for any of these shipments.

The charge of conspiring to illegally export controlled firearm parts from the United States provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew Lelling and William S. Walker, Acting Special Agent in Charge of Homeland Security Investigation in Boston made the announcement today. The Massachusetts State Police and U.S. Customs and Border Protection also assisted in the investigation. Assistant U.S. Attorney Jason A. Casey of Lelling’s National Security Unit is prosecuting the case.

BOSTON – The co-owners of a Boston-area home healthcare company were charged in federal court in Boston today for underreporting income to the IRS resulting in over $1 million in losses.

Hannah Holland, 51, of Quincy, and Sheila O’Connell, 33, of North Weymouth, were charged in an Information with one count of conspiracy to defraud the United States and three counts of aiding and assisting in the preparation of false tax returns.

According to court documents, Holland and O’Connell co-owned and operated Erin’s Own Home Healthcare Inc. (“Erin’s Own”), a home healthcare business. Between 2010 and 2014, Holland and O’Connell cashed over $3.5 million of Erin’s Own business checks through nominee bank accounts controlled by an unnamed individual. During this time period, Holland also personally cashed over $77,000 of Erin’s Own business receipts. None of these funds were ever reported to the IRS or accounted for in the company’s tax filings. Instead, Holland and O’Connell provided their tax preparer with a limited set of the financial records that did not cover the substantial amounts of business funds Holland and O’Connell diverted. As a result of the underreporting, Erin’s Own caused a loss of $1,126,112 to the IRS.

The conspiracy charge provides for a sentence of no greater than five years in prison, three years supervised release, and a fine $250,000. The charge of aiding and assisting in the preparation of false tax returns provides for a sentence of no greater than three years in prison, one year supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. 

United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Jordi de Llano, Deputy Chief of Lelling’s Economic Crimes Unit, and Trial Attorney Brittney Campbell of the Department of Justice’s Tax Division are prosecuting the case.

The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Klaus Pflugbeil, 59, of Ningbo, China, was sentenced today to 24 months in prison for conspiring to send trade secrets that belong to a leading U.S.-based electric vehicle company (Victim Company-1). Pflugbeil, a resident of the People’s Republic of China (the PRC or China) and a Canadian and German national, and his co-defendant, Yilong Shao, who remains at large, are owners of a PRC-based business (Business-1) that sold technology used to make batteries, including batteries used in electric vehicles. Pflugbeil and Shao, former employees of a company that was purchased by Victim Company-1, took trade secrets from their employer, and later used the trade secrets to build a business that they marketed as a replacement for Victim Company-1’s products.“In stealing trade secrets from an American electric vehicle manufacturer to use in his own China-based company, Pflugbeil’s actions stood to benefit the PRC in a critical industry with national security implications,” said Assistant Attorney General for National Security Matthew G. Olsen. “The Justice Department will mobilize every available resource to prevent our adversaries from advancing their global ambitions at the expense of U.S. national security.”“The defendant built a business in China to sell sensitive technology that belongs to a U.S. company.  His actions were bold — he even advertised that he was selling the victim’s products — because he thought, incorrectly, that he was outside the reach of U.S. prosecutors,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s sentencing sends a clear message to would-be offenders: my Office will do everything it can to protect American innovation and national security no matter where you try to hide.”Victim Company-1 is a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems. In 2019, Victim Company-1 acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly. Prior to its purchase by Victim Company-1, the Canadian manufacturer sold battery assembly lines to customers who manufactured alkaline and lithium‑ion batteries for consumer use. The battery assembly lines contained or utilized a proprietary technology now owned by Victim Company-1: continuous motion battery assembly. The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the lithium-ion battery manufacturing process.Both Pflugbeil and his co-defendant Shao are former employees of the Canadian manufacturer, and Shao also worked for Victim Company-1. As detailed in court documents, by no later than 2019, Pflugbeil and Shao planned to use Victim Company-1’s trade secrets for their own business activities. Pflugbeil told Shao that he had “a lot of original documents” related to the technology and sought out more “original drawings” of the trade secrets. Shao confirmed, among other things, that, “we have all of original assembly drawings by PDF.”The conspirators took measures to obfuscate that they had stolen trade secrets. For example, Pflugbeil wrote to Shao about a document he created based on one that Shao had stolen from Victim Company-1, “[its] in a different format, so it looks very original and not like a copy.”In or about July 2020, Pflugbeil joined Business-1, a company previously established by Shao, which has since expanded to locations in China, Canada, Germany, and Brazil. Business‑1 makes the same precision dispensing pumps and battery assembly lines that the Canadian manufacturer developed. The battery assembly technology is related to the development of electric vehicles that can compete with U.S.-made vehicles. The potential for Chinese automakers to swamp the U.S. and global market with vehicles like those that can be built using this stolen technology presents a potential national security risk.Business-1 was marketed by Pflugbeil as an alternative source for the sale of products that relied upon Victim Company-1’s trade secrets, publishing online advertisements on Google, YouTube, and LinkedIn. Pflugbeil repeatedly sent LinkedIn messages that named Victim Company-1 and said Business-1 was not infringing on any intellectual property:Hello [name], I hope to get some of your busy time. As I like to introduce our company to you. We already have supplied companies such [a]s [list of U.S. Fortune 500 Companies by name] . . . We engineer and manufacture all of our products in-house, and we warrant that none of our products infringe any patents, copyrights, or other intellectual property rights of any third party.The above reflects a blatant lie, told over and over—that Business-1’s products did not infringe on intellectual property rights of a third party. Pflugbeil also advertised products based on stolen trade secrets on Google. These ads were shown tens of thousands of times per week.On or about September 11, 2023, undercover agents attended a trade show for the packaging and processing industries in Las Vegas, Nevada. The undercover agents posed as businesspeople who were interested in purchasing a battery assembly line from Business-1 to manufacture batteries at a facility in Long Island, New York. The undercover agents were introduced to Shao at the trade show and later to Pflugbeil via email.Subsequently, on or about November 17, 2023, Pflugbeil sent, via email, a detailed 66-page technical documentation proposal to an undercover agent (UC-1). The proposal notes, “this technical documentation package contains [Business-1] proprietary information which must be kept confidential.”  In reality, the proposal contained battery assembly trade secret information belonging to Victim Company-1:  at least half a dozen drawings Pflugbeil used in the proposal and sent to UC-1 were, in fact, Victim Company-1’s information related to the battery assembly trade secret. The business proposal quoted the battery assembly line at over $15 million.Assistant U.S. Attorneys Ellen H. Sise and Samantha Alessi for the Eastern District of New York and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section prosecuted the case.The investigation and prosecution were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.