Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZC9wci9tYWRpc29uLW1hbi1zZW50ZW5jZWQtbWV0aGFtcGhldGFtaW5lLWFuZC1tb25leS1sYXVuZGVyaW5nLWNvbnNwaXJhY2llcw
  Press Releases:
United States Attorney Ron Parsons announced that a Madison, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance, Conspiracy to Launder Monetary Instruments, and Use of a Fraudulent Identification Document was sentenced on September 24, 2018, by U.S. District Judge Karen E. Schreier.

Alex Lopez-Nicolas, age 24, was sentenced as follows:  On the methamphetamine and money laundering conspiracies, 120 months in federal prison on each count, to run concurrent, followed by 5 years of supervised release on the methamphetamine conspiracy and 3 years of supervised release on the money laundering conspiracy, to run concurrent.  He was also ordered to pay $200 to the Federal Crime Victims Fund.

On the fraudulent document charge, he was sentenced to 60 months in federal prison, to be followed by 3 years of supervised release, both to run concurrent to the sentences received on the conspiracies.  He was also ordered to pay $100 to the Federal Crime Victims Fund.

Lopez-Nicolas was indicted for using a fraudulent Permanent Resident card by a federal grand jury on January 9, 2018, and for conspiracy to distribute 500 grams or more of methamphetamine and conspiracy to launder monetary instruments by a federal grand jury on January 9, 2018.  He pled guilty to all of the offenses on June 11, 2018.

On January 9, 2017, Lopez-Nicolas applied for work at a business in Madison.  At that time, he provided the employer with a fraudulent Permanent Resident card as proof of his eligibility for employment.

From on or about January 1, 2017, to November 15, 2017, Lopez-Nicolas had multiple conversations with a confidential informant about setting up methamphetamine transactions with a co-conspirator.  He also deposited cash from the sale of methamphetamine into several Wells Fargo Bank accounts, none of which were in his name, to conceal the source of the cash. 

This case was investigated by Homeland Security Investigations, the Internal Revenue Service, the Drug Enforcement Administration, and the South Dakota Division of Criminal Investigation.  Assistant U.S. Attorneys Jennifer D. Mammenga and Connie Larson prosecuted the case.

Lopez-Nicolas was immediately turned over to the custody of the U.S. Marshals Service.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tYS9wci91cy1hdHRvcm5leXMtb2ZmaWNlLWhvc3RzLWZyYXVkLWFuZC1hYnVzZS1wcmV2ZW50aW9uLXNlbWluYXJzLXNlbmlvcnM
  Press Releases:
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. 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZC9wci9yYXBpZC1jaXR5LW1hbi1zZW50ZW5jZWQtd2lyZS1mcmF1ZC1hbmQtdGhlZnQtZ292ZXJubWVudC1wcm9wZXJ0eQ
  Press Releases:
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man convicted of 2 counts of Wire Fraud and 1 count of Theft of Government Property was sentenced by Judge Jeffrey L. Viken, U.S. District Court.

Robert Rodney Bland, age 52, was sentenced on September 4, 2020, to 12 months in federal prison, and was ordered to pay a $300 special assessment to the Federal Crime Victims Fund and $75,000 in restitution to the General Services Administration (GSA).  

Between January 2010 and May 2018, Bland, while sole owner and operator of Motive Magic Mobile Windshield Repair, fraudulently billed GSA for hundreds of rock chip repairs he did not perform on dozens of vehicles leased to various federal agencies.  On 1 vehicle, Bland claimed to have repaired 71 rock chips, but in reality only completed 2 repairs.  On another vehicle, Bland claimed to have repaired 44 rock chips, but in actuality repaired none.  The majority of the time, the agency which leased the GSA vehicle was unaware that the claimed repair had been billed to GSA because Bland would not notify the agency representative or provide invoices to the agency before or after billing for a claimed repair.  In total, Bland fraudulently billed and was paid $75,000 by GSA for work he had not performed.  Bland used the fraudulent proceeds to purchase and/or pay for a pontoon boat, boat trailer, Harley Davidson motorcycle, 5th wheel camper, and a van, all for his personal use.  Each of these vehicles were seized and forfeited to the United States.  

"GSA relies on vendors across the United States to maintain its large fleet of government vehicles.  The judgment in this case proves that GSA OIG, along with our investigative partners, will pursue vendors who defraud the Government and take advantage of the trust that is placed in them,” said Special Agent in Charge Jamie Willemin, General Services Administration, Office of Inspector General.

The investigation was conducted by the General Services Administration - Office of Inspector General, the Department of Health and Human Services -Office of Inspector General, and the Department of Defense - Office of Inspector General.  Assistant U.S. Attorney Benjamin Patterson prosecuted the case.

Bland was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence. 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZC9wci9hdGhvbC1zb3V0aC1kYWtvdGEtbWFuLXBheXMtMTgwMDAwLWFmdGVyLWRlZnJhdWRpbmctZ292ZXJubWVudA
  Press Releases:
 Jason Sparling submitted an application for a drought disaster payment to the United States Department of Agriculture (USDA), Livestock Forage Disaster Program (LFDP), for a loss of grazing during the summer of 2014.  Based on Sparling’s statements, he received an LFDP payment of $94,696. The USDA later determined that none of Sparling’s cattle were on the drought stricken pasture during the qualifying period and Starling was not entitled to the disaster payment. 

Sparling subsequently entered into a settlement agreement and paid the government $180,000, to settle the civil debt resulting from his false statements made to the USDA, pursuant to the False Claims Act (31 U.S.C. § 3729).  The False Claims Act imposes liability on persons and companies who knowingly submit false claims to the government to get a benefit paid by the government. Persons who submit a false claim must pay to the United States a civil penalty of not less than $5,500 and not more than $11,000 for each false claim, plus three times the amount of damages which the government sustained.

The United States Attorney’s Office places a high priority on criminal and civil enforcement in cases involving all types of fraud committed against the government, and works with various law enforcement agencies to identify and investigate these matters.  The investigation, in this case was conducted by USDA, Office of Inspector General.

Assistant U.S. Attorney Cheryl Schrempp DuPris handled the civil case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZC9wci9wYXJtZWxlZS1jb3VwbGUtc2VudGVuY2VkLWludm9sdW50YXJ5LW1hbnNsYXVnaHRlci1jYXNl
  Press Releases:
United States Attorney Ron Parsons announced that a Parmelee, South Dakota, couple has been sentenced by Chief Judge Roberto A. Lange, U.S. District Court, based on their convictions in an Involuntary Manslaughter and Child Abuse case.

Dakota Horned Eagle, age 29, pled guilty on November 4, 2019, to Involuntary Manslaughter and Operating a Motor Vehicle While Under the Influence of Alcohol Causing Serious Bodily Injury to a Minor.  On January 27, 2020, he was sentenced to 52 months in federal prison, followed by 3 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $200.

Ashley Stoneman, age 25, pled guilty on November 18, 2019, to Child Abuse.  On February 10, 2020, she was sentenced to 18 months in federal prison, followed by 3 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.

The couple was indicted by a federal grand jury on July 23, 2019.

The convictions stemmed from an incident that occurred on July 12, 2019, in Todd County, South Dakota.  On that date, Horned Eagle and Stoneman were consuming alcoholic beverages and socializing at a residence in the He Dog Community.  At approximately 1:00 p.m., they decided to drive back to their residence in nearby Parmelee.  They loaded six children into their vehicle and departed the residence, with Horned Eagle driving and Stoneman riding in the front passenger seat.  None of the children, who ranged in age from two months old to twelve years old, were secured with car seats or seat belts.  Horned Eagle was intoxicated.  A short time later, they were traveling on a gravel road between He Dog and Parmelee, when their vehicle left the roadway and wrecked.  At the time of the wreck, Horned Eagle was driving at least 50 miles per hour (mph) in an area where the posted speed limit is 35 mph.

Two of the children in the vehicle suffered fatal injuries as a result of the wreck.  The other four children in the vehicle sustained non-life-threatening injuries.

This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services and the Federal Bureau of Investigation.  Assistant U.S. Attorney Kirk Albertson prosecuted the case.

Horned Eagle and Stoneman were immediately turned over to the custody of the U.S. Marshals Service.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3Blbm5zeWx2YW5pYS1iaW9mdWVsLWNvbXBhbnktb3duZXJzLWNoYXJnZWQtZnJhdWR1bGVudGx5LWNsYWltaW5nLWZ1ZWwtdGF4LWNyZWRpdHM
  Press Releases:
Two owners of a Pennsylvania biofuel company were charged in a superseding indictment today with conspiring to defraud the Internal Revenue Service (IRS) and aiding and assisting in the preparation of a fraudulent fuel tax credit refund claim, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney David J. Freed for the Middle District of Pennsylvania.

 

According to the superseding indictment, Ben Wootton, of Pennsylvania, and Race Miner, of Colorado owned and operated Keystone Biofuels Inc., located in Shiremanstown, Pennsylvania, and later in Camp Hill, Pennsylvania. Wootton, serving as President, and Miner, serving as Chief Executive Officer, are alleged to have participated in a conspiracy to defraud the IRS by, among other things, fraudulently claiming tax refunds based on the Biodiesel Mixture Credit – a federal excise tax credit for persons or businesses who mix biodiesel with diesel fuel and use or sell the mixture as a fuel.  Biodiesel is a type of renewable fuel that meets a set of specific requirements.  

 

According to the superseding indictment, the Biodiesel Mixture Credit was available only on fuel meeting those requirements that the claimant had mixed with diesel fuel.  Wootton and Miner allegedly caused Keystone to fraudulently seek tax refunds from the IRS by claiming the credit based on non-qualifying and, in at least some instances, non-existent or non-mixed fuel.  The indictment further alleges that Wootton and Miner created false books and records and supporting documents to account for the nonexistent fuel; engaged in a series of sham financial transactions to give the false books and records the appearance of legitimacy; and sought to obstruct an ongoing IRS investigation by providing false documentation to an IRS Special Agent.

 

These charges are in addition to those previously lodged against Wootton and Miner. In a May 2017 indictment, both men, along with Keystone Biofuels Inc., were charged with conspiring to make false statements to the Environmental Protection Agency (EPA) and making false statements to the EPA.

 

If convicted, Wootton and Miner face a statutory maximum sentence of five years in prison for conspiracy and three years in prison for aiding and assisting in the filing of a false refund claim.  They also face a period of supervised release, restitution, and monetary penalties.

 

An indictment merely alleges that crimes have been committed.  The defendants are presumed innocent until proven guilty beyond a reasonable doubt.

 

Principal Deputy Assistant Attorney General Zuckerman, Acting Assistant Attorney General Wood, and U.S. Attorney Freed praised special agents of IRS Criminal Investigation and the Environmental Protection Agency Criminal Investigation Division, who conducted the investigation, and Assistant U.S. Attorney Geoffrey MacArthur, Special Assistant U.S. Attorney David Lastra, Trial Attorneys Mark Kotila and Kimberly Ang of the Justice Department’s Tax Division and Senior Litigation Counsel Howard P. Stewart of the Justice Department’s Environmental and Natural Resources Division, Environmental Crimes Section, who are prosecuting the case.

 

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1ubS9wci9lc3Bhbm9sYS1tYW4tc2VudGVuY2VkLTkteWVhcnMtamFpbC1jYXJqYWNraW5n
  Press Releases:
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Raul Bujanda, Special Agent in Charge of the Federal Bureau of Investigation’s Albuquerque Field Office, announced that Martin Lopez was sentenced to 9 years in prison. A federal jury convicted Lopez, 38, of Española, New Mexico, on Oct. 14, 2022, of one count each of carjacking and brandishing a firearm during and in relation to a crime of violence.

A federal grand jury indicted Lopez on March 12, 2021. According to court records, on Oct. 31, 2020, the victim, identified as Jane Doe 1, who had been dating Lopez, ended the relationship that morning. Later that same day, she and a friend, Jane Doe 2, attempted to deliver Lopez’s belongings to his friend who worked at an O’Reilly’s Auto Parts store in Española. As Jane Doe 1 was retrieving Lopez’s belongings from her vehicle, Lopez appeared, threatened both women with a gun, forced his way into the driver’s seat and drove away with the two Jane Does.

Lopez struck both victims with his gun as he drove to nearby apartment complex where he pushed Jane Doe 2 out of the moving vehicle. Lopez threatened to kill her if she called the police. Before being pushed out, Jane Doe 2 was able to dial 911. The 911 recording captured the victims’ terrified screams and was played for the jury at trial. Lopez continued to drive Jane Doe 1 to a secondary location for a period of time.  Later, New Mexico State Police were able to locate the car, Jane Doe 1, and Lopez. However, when law enforcement arrived, Lopez fled the area in Jane Doe 1’s vehicle.

Lopez has prior domestic violence related misdemeanor convictions from 2014, wherein he was given a suspended sentence and his probation was revoked three times. Lopez has been arrested on at least four other occasions for felony charges, none of which resulted in a conviction. Lopez’s sentencing guidelines were calculated at 154 to 177 months. The United States requested a sentence of 177 months. The court imposed a sentence of 108 months (9 years) imprisonment. 

The United States commends Jane Doe 2 and the other witnesses who testified in this case.

Upon his release from prison, Lopez will be subject to 3 years of supervised release.

The Federal Bureau of Investigation and the New Mexico State Police investigated this case. Assistant U.S. Attorneys Jaymie L. Roybal and Letitia Carroll Simms are prosecuting the case.

Anyone experiencing domestic violence or who knows someone experiencing domestic violence can reach an advocate at the National Domestic Violence Hotline at 1-800-799-SAFE (7233) or 1-800-787-3224 (TTY). In New Mexico, the Domestic Violence Resource Center is available by telephone at (505) 843-9123 or online at https://dvrcnm.org/.

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23-161

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci9maXZlLW1lbi1jaGFyZ2VkLXVzaW5nLW5ldy15b3JrLWRpYW1vbmQtZGlzdHJpY3QtY29tcGFuaWVzLWZyb250cy1pbGxlZ2FsbHktbW92ZS1tb3Jl
  Press Releases:
NEWARK, NJ. – Five men who work in New York City’s Diamond District were arrested today and charged with illegally processing more than $600 million through unlicensed money transmitting businesses, U.S. Attorney Philip R. Sellinger announced.

Raj Vaidya, 26; Rakesh Vaidya, 51; Shrey Vaidya, 23; and Neel Patel, 26, all of Edison, New Jersey; and Youssef Janfar, aka “Joe Rodeo,” 57, of Great Neck, New York, are each charged by complaint with one count of operating and aiding and abetting the operation of an unlicensed money transmitting business. The defendants appeared before U.S. Magistrate Judge Edward S. Kiel in Newark federal court and were released on unsecured bond.

According to documents filed in this case and statements made in court:

Since 2019, Raj Vaidya, Rakesh Vaidya, Shrey Vaidya, and Patel have operated numerous purported diamond, gold, and jewelry companies in New York City’s Diamond District, including Arya Diamond Jewellery USA Inc., d/b/a “Karats & Carats,” Diamspark LGD LLC, Royal Diamonds LLC, Raj Gold and Diamond LLC, Royal Arya Jewellery Inc, and Raj Gold and Diamond Inc. Janfar also purportedly operated companies in the Diamond District, including Rodeo of NY, d/b/a “Sarah Jewels.” The defendants used these and other entities as fronts to conduct hundreds of millions of dollars in illegal financial transactions for customers – including converting cash to checks or wire transfers – in exchange for substantial fees. At times, they moved millions of dollars in cash in a single day. None of their companies were registered as money transmitting businesses with New York, New Jersey, or the Financial Crimes Enforcement Network (FinCEN).

The charge of operating and aiding and abetting the operation of an illegal money transmitting business carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross amount of any pecuniary gain that any persons derived from the offense or of any pecuniary loss sustained by any victims of the offense, whichever is greatest.

U.S. Attorney Sellinger credited special agents and task force officers of IRS - Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; special agents and task force officers of the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz in Newark; and special agents of Homeland Security Investigations Newark, under the direction of Special Agent in Charge Ricky J. Patel; with the investigation leading to the charges. He also thanked the Justice Department’s Money Laundering and Asset Recovery Section (MLARS), the Parsippany-Troy Hills Police Department, the Morristown Police Department, the Federal Deposit Insurance Corporation – Office of Inspector General, and the New York City Police Department for their assistance in the investigation.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The government is represented by Assistant U.S. Attorneys Mark J. Pesce of the Economic Crimes Unit, Olta Bejleri of the Organized Crime/Gangs Unit, and Angelica Sinopole of the Health Care Fraud Unit in Newark.

The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 





vaidya.complaint.pdf

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Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZG55L3ByL3R3by1yb2NoZXN0ZXItbWVuLWFycmVzdGVkLWNoYXJnZWQtc2VsbGluZy1odW5kcmVkcy10aG91c2FuZHMtZG9sbGFycy13b3J0aC1zdG9sZW4
  Press Releases:
ROCHESTER, N.Y. - U.S. Attorney Trini E. Ross announced today that Mark Remein, 41, and Derek Verna, 44, both of Rochester, NY, were arrested and charged by criminal complaint with committing and conspiring to commit wire fraud, interstate transportation and sale of stolen property, and money laundering. The charges carry a maximum penalty of 20 years in prison.

Assistant U.S. Attorney Meghan K. McGuire, who is handling the case, stated that according to the complaint, Remein and Verna owned and/or operated West Ridge Connections, a pawn shop located on West Ridge Road in Rochester. Remein and Verna knowingly purchased stolen, new-in-box items from serial shoplifters for a fraction (approximately 30%) of the items’ retail value. Remein and Verna listed the items for sale on eBay and shipped them to buyers. The items were listed as “New” and priced below retail value. In total, between January 2020, and August 16, 2023, Remein and Verna purchased and re-sold on eBay approximately 8,100 “New” items and received approximately $497,842 for those sales. The money was deposited into bank accounts that were opened in the name of third parties to avoid detection.  

The investigation began in February 2022, after law enforcement received a complaint from Home Depot security personnel, who had followed a shoplifter from a Home Depot location to West Ridge Connections with recently stolen merchandise. A store  security manager entered West Ridge Connections and observed the stolen merchandise behind a table counter. None of the stolen merchandise was entered into LeadsOnline, an online database where secondhand dealers, like Remein and Verna, are required to report all purchases from other individuals. The investigation determined that individuals sold new-in-box items to West Ridge Connections on a regular basis. Some of the sellers were admitted opioid users, whom law enforcement observed attempting to buy drugs immediately after they sold new-in-box items to West Ridge Connections.

In December 2022, investigators made a controlled sale of three, new-in-box Google Nest thermostats to defendant Verna at West Ridge Connections. The combined retail value of the items was approximately $567.00. Verna paid $100.00 for all three items before listing them on eBay for $124.99 each. Between January and August of 2023, investigators conducted a total of 15 controlled sales, which included 37 items.

The complaint is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Thomas Fattorusso, Special Agent-in-Charge, and the Rochester Police Department, under the direction of Chief David Smith.

 The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.      

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Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci9taWRkbGVzZXgtY291bnR5LWNvbnN0cnVjdGlvbi1jb21wYW55LWFkbWl0cy1jYXVzaW5nLWRlYXRoLWVtcGxveWVlLXdoby1mZWxsLXJvb2YtZHVyaW5n
  Press Releases:
NEWARK, N.J. – A construction company based in Old Bridge, New Jersey, admitted violating Occupational Safety and Health Administration (OSHA) standards, leading to the death of an employee, U.S. Attorney Philip R. Sellinger announced today.

Zona Roofing LLC (Zona Roofing), via its owner Yilbert Segura, pleaded guilty on Nov. 20, 2023, before U.S. Magistrate Judge José R. Almonte in Newark federal court to an information charging it with one count of willfully violating OSHA standards by failing to provide fall protection and fall protection training to employees engaged in the replacement of a residential roof, which caused the death of an employee. 

According to documents filed in this case and statements made in court:

On Aug. 6, 2019, Segura and four employees began a roof replacement project on a residential home located in Haledon, New Jersey. Despite working more than 20 feet from the ground, employees for Zona Roofing were not equipped with any personal fall protection equipment, such as safety harnesses, lanyards, tie-off ropes, guard rails, safety nets, or other feasible means of fall protection. None of the employees had received fall protection training to recognize the hazards of falling or the procedures to be followed to minimize those hazards.

On Aug. 8, 2019, while working on the roof, one of Zona Roofing’s employees lost his balance and fell approximately 22 feet to the ground, sustaining blunt force injuries to his head that resulted in his death. The employee was not equipped with any fall protection gear, and he had not received any fall protection training. Zona Roofing was previously cited by Maryland OSHA in February 2019 for failing to provide fall protection to its employees.

If the court accepts the terms of the plea agreement, Zona Roofing will be sentenced to five years of probation and will pay restitution of $75,000 to the employee’s family members. Zona Roofing must also follow specified conditions, including providing training procedures to all its employees and a requirement to follow enhanced safety provisions for future construction jobs. Sentencing is scheduled for March 25, 2024.

U.S. Attorney Philip R. Sellinger credited special agents of the U.S. Department of Labor, Office of the Inspector General, Northeast Region, under the direction of Special Agent in Charge Jonathan Mellone; Daniel Hennefeld, Counsel for Occupational Safety and Health, Office of the Solicitor of Labor, Region 2, and OSHA Compliance Officers with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Garrett Schuman of the Criminal Division in Newark.

 





zonaroofing.information.pdf

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Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3BoaWxhZGVscGhpYS1hcmVhLXBvbGl0aWNhbC1jb25zdWx0YW50LWFuZC1hdHRvcm5leS1zZW50ZW5jZWQtYWZ0ZXItY29udmljdGlvbi10d28tY2FtcGFpZ24
  Press Releases:
A long-time Philadelphia-area political consultant and attorney was sentenced today for his role in two criminal schemes to violate federal campaign finance laws announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania.

Kenneth Smukler, 57, of Villanova, Pennsylvania, was sentenced to 18 months in prison followed by one year of supervised release by the Honorable Jan E. DuBois.  In the 2012 Democratic primary election for Pennsylvania’s First Congressional District, Jimmie Moore, a former Philadelphia Municipal Court Judge, ran against the incumbent Congressman Bob Brady.  Assisted and directed by Smukler, Moore executed a corrupt deal in which he agreed to withdraw from the race in exchange for funds from the Bob Brady for Congress campaign (the Brady campaign) to be used to pay off Moore’s campaign debts.  Those debts included money that Jimmie Moore for Congress (the Moore campaign) owed to several vendors, to Moore himself and to Moore’s campaign manager, Carolyn Cavaness. On Feb. 29, 2012, Moore withdrew from the race and Cavaness had prepared a list of debts owed by the Moore campaign, which they provided to Smukler, a campaign consultant for the Brady campaign.  Smukler arranged for the Moore campaign to receive $90,000 from the Brady campaign through false documents and a series of concealing pass-throughs, including the consulting firm of another Brady associate and co-conspirator, D.A. Jones.  Smukler ensured that the Brady campaign reported none of the concealed payments, which exceeded the federal contribution limits, to the Federal Election Commission (FEC).  Rather, he executed the scheme by ensuring that the three installments were falsely and illegally disguised from the FEC and the public as payments for poll and consulting services.

Later, during the 2014 Democratic primary election for Pennsylvania’s Thirteenth Congressional District, Smukler again committed federal campaign finance offenses, this time for the benefit of another client, Marjorie Margolies, a former Member of the U.S. House of Representatives.  Smukler, a veteran of prior Margolies political campaigns, ran the Margolies campaign in 2014. 

In April 2014, during a close primary race, the Margolies campaign was running out of money that it could legally spend in the primary.  Smukler then caused the Margolies campaign to illegally spend general election funds in his attempt to win the primary election for his client.  He further lied about his illegal spending to the campaign’s lawyer.  That lawyer, in turn, unwittingly reported Smukler’s lies to the FEC in response to a complaint filed by another candidate. Additionally, Smukler caused excessive campaign contributions and illegal conduit contributions to the Margolies campaign, all of which were hidden or disguised from the campaign’s FEC filings.

“When political operatives like Kenneth Smukler engage in hidden illegal campaign finance schemes, they undermine the integrity of the electoral process,” said Assistant Attorney General Benczkowski.  “This is a just sentence that reflects the seriousness of these crimes.”

“In order to win at all costs, Smukler knowingly and purposefully undermined our democratic process by misusing campaign funds and lying about it,” said U.S. Attorney McSwain. “My Office will continue to prosecute public corruption wherever and whenever we uncover it. Now Smukler is headed to jail, and I am grateful that the Court imposed a just sentence reinforcing the fact that this kind of corruption will never be tolerated.”

On Dec. 3, 2018, a jury found Smukler guilty of one count of conspiracy, two counts of excessive campaign contributions, two counts of false statements, two counts of conduit contributions, one count of willfully causing a false statement to the FEC and one count of obstruction of justice.     

Former Public Integrity Section Trial Attorney Jonathan I. Kravis and the FBI investigated the case.  Richard C. Pilger, Director of the Election Crimes Branch of the Public Integrity Section, Trial Attorney Rebecca Moses of the Public Integrity Section and Assistant U.S. Attorney Eric L. Gibson of the Eastern District of Pennsylvania prosecuted the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2xhdHZpYW4tbmF0aW9uYWwtcGxlYWRzLWd1aWx0eS1zY2FyZXdhcmUtaGFja2luZy1zY2hlbWUtdGFyZ2V0ZWQtbWlubmVhcG9saXMtc3Rhci10cmlidW5l
  Press Releases:
A Latvian man pleaded guilty today in Minneapolis for participating in a lucrative “scareware” hacking scheme that targeted visitors to the Minneapolis Star Tribune’s website.  Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Gregory G. Brooker of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Field Office made the announcement.

Peteris Sahurovs aka Piotrek and Sagade, 28, pleaded guilty to one count of conspiracy to commit wire fraud before District Judge Ann D. Montgomery of the District of Minnesota.  Sahurovs was arrested on a District of Minnesota indictment in Latvia in June of 2011, but was released by a Latvian court and later fled.  In November of 2016, Sahurovs was located in Poland and apprehended by Polish law enforcement and extradited to the United States in June 2017. Sahurovs was at one time the FBI’s fifth most wanted cybercriminal and a reward of up to $50,000 had been offered for information leading to his arrest and conviction.  He will be sentenced on June 6.

According to admissions made in connection with his plea, from at least May 2009 to June 2011, Sahurovs operated a “bullet-proof” web hosting service in Latvia, through which he leased server space to customers seeking to carry out criminal schemes without being identified or taken offline.  The defendant admitted that he knew his customers were using his servers to perpetrate criminal schemes, including the transmission of malware, fake anti-virus software, spam, and botnets to unwitting victims, and he received notices from Internet governance entities (such as Spamhaus) that his servers were hosting malicious activity.  Nonetheless, Sahurovs admitted he took steps to protect the criminal schemes from being discovered or disrupted, and hosted them on his servers for financial gain.

Sahurovs admitted that from in or about February 2010 to in or about September 2010, he registered domain names, provided bullet-proof hosting services, and gave technical support to a “scareware” scheme targeting visitors to the Minneapolis Star Tribune’s website.  On Feb. 19, 2010, the Minneapolis Star Tribune began hosting an online advertisement, purporting to be for Best Western hotels, on its website, startribune.com.  Two days later, however, the advertisement began causing the computers of visitors to the website to be infected with malware.  This malware, also known as “scareware,” caused visitors to experience slow system performance, unwanted pop-ups and total system failure.  Website visitors also received a fake “Windows Security Alert” pop-up informing them that their computer had been infected with a virus and another pop-up that falsely represented that they needed to purchase the “Antivirus Soft” computer program to fix their security issues, at a price of $49.95.

Website visitors who clicked the “Antivirus Soft” window were presented with an online order form to purchase a purported security program called “Antivirus Soft.”  Users who purchased “Antivirus Soft” would receive a file download that “unfroze” their computers and stopped the pop-ups and security notifications.  However, the defendant admitted, the file was not a real anti-virus product and did not perform legitimate computer security functions, and merely caused malware that members of the conspiracy had previously installed to cease operating.  Meanwhile, the defendant admitted, victim users who did not choose to purchase “Antivirus Soft” became immediately inundated with so many pop-ups containing fraudulent “security alerts” that all information, data, and files on their computers were rendered inaccessible.  Members of the conspiracy defrauded victims out of substantial amounts of money as a result of the scheme.  The defendant admitted that as a result of his participation, he made between $150,000 and $250,000 U.S. dollars.

This case was investigated by the FBI’s Minneapolis Field Office.  The Criminal Division’s Office of International Affairs, as well as the Polish National Police, the National Prosecutor’s Office, and the Ministry of Justice provided substantial assistance. Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota and Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case. The Department’s Office of International Affairs also provided substantial assistance in this matter.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZG55L3ByL2Zvcm1lci1jZW8tYW5kLWZvcm1lci1jZm8tdGVsZWNvbW11bmljYXRpb25zLWNvbXBhbnktY2hhcmdlZC1jb25uZWN0aW9uLW1hc3NpdmU
  Press Releases:
Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging Victor Bozzo, former Chief Executive Officer and former Chief Commercial Officer of Pareteum Corporation, and EDWARD O’DONNELL, Pareteum’s former Chief Financial Officer, with conspiracy, securities fraud, making false Securities and Exchange Commission (“SEC”) filings, and improperly influencing the conduct of audits for their roles in a scheme to overstate Pareteum’s revenue by tens of millions of dollars.  BOZZO and O’DONNELL were arrested earlier today and will be presented this afternoon before U.S. Magistrate Judge Ona T. Wang.  The case has been assigned to U.S. District Judge Arun Subramanian.

Also unsealed is the guilty plea of STANLEY STEFANSKI, Pareteum’s former Controller.  STEFANSKI pled guilty before U.S. District Judge Andrew L. Carter on September 14, 2023, to charges arising from his participation in the scheme to fraudulently inflate Pareteum’s revenue and related crimes, and he is cooperating with the Government.



U.S. Attorney Damian Williams said: “Victor Bozzo, the former CEO of Pareteum, and Edward O’Donnell, the former CFO, and their co-conspirators allegedly schemed to inflate the company’s revenue, thereby making the company appear more profitable than it was and allowing Bozzo and O’Donnell to obtain performance bonuses they had not earned.  To conceal their alleged fraud, Bozzo and O’Donnell then took steps to mislead the independent certified public accountants engaged to audit Pareteum’s financial statements.  With today’s Indictment, Bozzo and O’Donnell’s alleged deceit comes to an end.”



FBI Assistant Director in Charge James Smith said: “This indictment reflects the serious harm executives caused by deliberately misleading shareholders, auditors, and the general public about the financial strength of a public company.  The FBI remains committed to fighting white-collar crime, protecting investors, and holding fraudsters who degrade the integrity of our markets accountable.”

According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]

The defendants, and other senior executives at the company, engaged in a scheme to improperly and misleadingly recognize revenue at Pareteum, which owned and managed a mobile device network platform.  The defendants and their co-conspirators made the revenue appear to have been earned in its records based on aspirational, non-binding purchase orders that did not impose any obligation on customers to pay Pareteum.  The defendants, and other senior executives at Pareteum, knew that in many cases Pareteum was recognizing revenue before Pareteum had delivered any products or services to its customers.  In order to conceal Pareteum’s fraudulent accounting practices, BOZZO, O’DONNELL, and other senior executives at Pareteum took steps to mislead the independent certified public accountants engaged to audit Pareteum’s financial statements. 

Pareteum’s inflated revenue gave the appearance that Pareteum was meeting aggressive revenue and growth projections, which served the ultimate goal of increasing Pareteum’s share price.  In press releases accompanying Pareteum’s quarterly filings, Pareteum provided guidance on its expected revenue and revenue growth for the year.  During each period, Pareteum touted its quarter-over-quarter revenue and revenue growth.  Pareteum publicly identified revenue as the principal metric demonstrating its growth and touted its consistent record of quarter-over-quarter revenue growth and meeting or exceeding revenue guidance, which itself typically increased quarter-over-quarter.  However, this ostensible pace of revenue growth was only possible because of the fraud orchestrated by the defendants.

In order to carry out the fraud, the defendants and their co-conspirators improperly recognized revenue from customers based on non-binding contracts.  Specifically, Pareteum’s customers were cellular providers that paid to use Pareteum’s platform to monitor, meter, and bill their own individual customers, who were individual cellphone or connected device end users.  Typically, before a customer could use Pareteum’s platform, the customer and Pareteum would sign a Master Services Agreement, which set forth Pareteum’s obligations to provide the customer with SIM cards that provided cellphone users, who obtained cellphone service through Pareteum’s customer, access to Pareteum’s mobile network.  At this stage, the customer did not owe Pareteum any money and no revenue had been earned by Pareteum; instead, Pareteum had first to develop and implement a platform for the customer and ensure that it functioned such that the customer could go “live” on the Pareteum network.  Once the Pareteum customer was live on the network and sold a SIM card to an actual cellphone user, that user could put the SIM card into his or her phone and begin making calls or consuming mobile data.  It was only at that point that Pareteum’s customer would be required to pay Pareteum for the data usage. 

BOZZO and O’DONNELL understood that purchase orders were not sales contracts because, as they and others at Pareteum well knew, and Paretuem’s customers understood, the purchase orders did not reflect binding commitments.  Instead, purchase orders typically reflected anticipated future sales.  Purchase orders typically set forth the customer’s intention to purchase SIM cards from Pareteum and to generate usage fees if and when the customer was able to sell the SIMs to end users who then activated the SIM cards and used Pareteum’s platform.

However, in violation of Generally Accepted Accounting Principles, Pareteum executives, including VICTOR BOZZO and EDWARD O’DONNELL, caused Pareteum at times to recognize revenue at the time a purchase order was signed for the full projected value of the purchase order, even though they were aware that typically the relevant counterparties were obligated to pay that amount only if and when in the future all SIM cards in the purchase order had been shipped, were activated by Pareteum’s customers, and were used for one month on Pareteum’s network.  As BOZZO and O’DONNELL were also aware, in many cases, pervasive technical and operational issues meant that Pareteum was actually incapable of satisfying its performance obligations under the terms of its agreements with customers. 

As a result of this fraudulent revenue recognition practice, from at least in or about 2018 through the first half of 2019, Pareteum improperly recognized and reported to the investing public more than $40 million of revenue that it should not have. 

As to one customer, referred to in the Indictment as Customer-4, Pareteum recognized revenue totaling $4.4 million based on an unsigned, draft purchase order for €6.3 million, which Customer-4 had not accepted.  Instead, Customer-4 had signed a purchase order, which itself did not reflect a binding commitment but merely reflected anticipated future sales, for only €630,000 – in other words, one tenth of the draft €6.3 million purchase order and far less than the revenue Pareteum recognized.  Pareteum nonetheless recognized $4.4 million in revenue for Customer-4 in three tranches, and at the time it recognized each of those tranches, Customer-4’s platform was not yet live and so it could not yet use Pareteum’s services.

*                *                *

BOZZO, 54, of Ringoes, New Jersey, and O’DONNELL, 58, of East Atlantic Beach, New York, are each charged with one count of conspiracy to commit securities fraud, make false SEC filings, and improperly influence the conduct of audits, which carries a maximum penalty of five years in prison; one count of securities fraud under Title 15, which carries a maximum penalty of 20 years in prison; one count of false SEC filings, which carries a maximum sentence of 20 years in prison; and one count of improperly influencing the conduct of audits, which carries a maximum penalty of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding work of the FBI.  Mr. Williams further thanked the SEC, which today filed a parallel civil action against BOZZO and O’DONNELL and also announced settled charges against STEFANSKI.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Kiersten A. Fletcher, Margaret Graham, and Allison Nichols are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.





[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.





Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByLzU5LWNoYXJnZWQtaWxsZWdhbC10cmFmZmlja2luZy1wb3NzZXNzaW9uLWFuZC11c2UtZmlyZWFybXMtZHJ1Zy10cmFmZmlja2luZy1hbmQtY29uc3BpcmFjeQ
  Press Releases:
Federal, county, and local law enforcement officials today announced that 59 individuals were charged and arrested in connection with firearms-trafficking, narcotics, conspiracy, or other firearms offenses after a three month, violent-crime-reduction initiative in Cleveland this summer. The vast majority were charged in U.S. District Court, while the remaining individuals were charged in state court. These individuals were apprehended in a series of coordinated arrests made during the last two weeks. 

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

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

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

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

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

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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





Marcel Battle, 30, of Canton: drug trafficking;





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





Nathan Roby, 44, of Cleveland: drug trafficking;





Raymond Callahan, 34, of Cleveland: drug trafficking;





Raphael Deen, 30, of Cleveland: drug trafficking;





Terry Lyons, 33, of Cleveland: drug trafficking;





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

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

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

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

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci9wZW5uc3lsdmFuaWEtbWFuLWFkbWl0cy00OC1taWxsaW9uLWNhcmVzLWFjdC1sb2FuLWZyYXVkLXNjaGVtZQ
  Press Releases:
TRENTON, N.J. – A Pennsylvania man admitted to his role in a scheme to fraudulently obtain over $4.8 million in federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) for himself and others, U.S. Attorney Philip R. Sellinger announced today.

Darryl Duanne Young, aka “Darryl Duanne Isom Young,” 60, of Kingston, Pennsylvania, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court on Nov. 14, 2023, to an information charging him with one count of conspiracy to commit bank fraud and one count of money laundering.





“This defendant admitted taking advantage of government programs that were specifically designed to provide needed financial assistance to Americans during the COVID-19 pandemic. Combatting pandemic fraud in all of its forms is a top priority for this office and our law enforcement partners. Together, we will continue to root out those who have exploited the suffering of others to line their own pockets, and bring them to justice.”



U.S. Attorney Philip R. Sellinger



“IRS Criminal Investigation special agents are specially equipped to follow the complex financial trail left by criminals,” Tammy Tomlins, Special Agent in Charge of IRS – Criminal Investigation Newark Field Office. “Let today’s plea serve as a proof of the commitment of IRS-CI and our law enforcement partners dedication to vigorously pursue those who took advantage of government programs intended to provide financial assistance to Americans in need during the COVID-19 pandemic.”

 “The CARES Act was created to assist to American citizens and businesses that were impacted financially by the COVID-19 Pandemic,” Christopher A. Nielsen, Inspector in Charge, Philadelphia Division, said. “However, as alleged, Darryl Young, and his co-conspirators, manipulated this critical lifeline through a sophisticated scheme that fraudulently obtained millions of dollars in Paycheck Protection Program (PPP) loans.  Postal Inspectors will continue to work with the U.S. Attorney’s Office, and our law enforcement partners, to identify and hold accountable, those individuals who steal pandemic relief to fulfill their own greed.” 

“Mr. Young admittedly obtained money from the Paycheck Protection Programs intended to assist those with critical needs during the pandemic,” Gail S. Ennis,  Social Security Administration Inspector General, said. “His criminal actions allowed him and his fellow conspirators to selfishly profit. We will continue to collaborate with our law enforcement partners to hold those accountable who misuse Social Security numbers, falsify documents, and fraudulently obtain access to federal benefit programs. I appreciate the collective efforts of the investigating agencies and the U.S. Attorney’s Office for prosecuting this case.”    

“Today’s guilty plea sends a clear message that those who fraudulently obtained funds from COVID-19 relief programs will be held accountable,” Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG) said. “The FDIC OIG remains committed to working with our law enforcement partners to investigate and bring to justice those who participate in fraudulent schemes and threaten to undermine the integrity of our Nation’s banking system.”

“Today, Darryl Duanne Young admitted his role in stealing nearly $5 million in relief funds intended to support small businesses impacted by the COVID-19 global pandemic,” Homeland Security Investigations (HSI) Newark acting Special Agent in Charge Michael Alfonso said. “This is an egregious case of an individual taking advantage of an unprecedented public health crisis for personal gain. HSI Newark and our law enforcement partners will aggressively pursue those who perpetrate these illicit schemes and see that they are brought to justice.”

According to documents filed in this case and statements made in court:

Young engaged in a scheme to illegally obtain for himself and his conspirators over $4.8 million in loans authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Young submitted and directed others to submit fraudulent PPP and EIDL loan applications, which fabricated numbers of employees and misrepresented company information, to induce lenders to approve the loan applications that they otherwise would not have approved. Among other things, Young submitted falsified tax documents and bank statements to a victim lender in support of PPP loan applications. Young personally received over $230,000 in PPP loans for businesses he controlled and received a percentage of loan proceeds for assisting in submitting fraudulent applications on behalf of others.

The applications Young submitted each allegedly contained fraudulent representations to the lender – including a victim lender that was a member bank of the Federal Home Loan Bank system – including bogus federal tax documents. According to IRS records, none of the purported tax documents that Young submitted in support of the loan applications were ever in fact filed with the IRS. Based on Young’s misrepresentations, loan applications for his purported businesses and the purported businesses of other applicants were approved for approximately $4.8 million in federal COVID-19 emergency relief funds meant for distressed small businesses.

The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. The charge of money laundering carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. As part of his guilty plea, Young agreed to make restitution to the victim lenders for the full amount of the fraudulent PPP and EIDL loans.  Sentencing is scheduled for March 18, 2024.

U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tomlins; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Nielsen Philadelphia Division; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Special Agent in Charge Brian Tucker; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Alfonso, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Katherine M. Romano and David E. Dauenheimer of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2ZlZGVyYWwtYWdlbnRzLXNlaXplLTYzLWRvZ3Mtc3VzcGVjdGVkLWRvZy1maWdodGluZy1yaW5n
  Press Releases:
On March 23, 2018, the United States filed a civil forfeiture complaint seeking the possession of 63 pit bull-type dogs that were allegedly involved in a dog fighting venture in violation of the federal Animal Welfare Act. Pursuant to a federal warrant, the animals were seized on March 19, 2018, in Eastman, Georgia, by United States Department of Agriculture, Office of Inspector General (USDA-OIG) special agents working with the United States Marshals Service, Georgia Bureau of Investigation, Georgia State Patrol (GSP), Oconee Drug Task Force, Dodge County Sheriff’s Office, and Georgia Department of Natural Resources.

According to the complaint filed last week in federal court, the animals were seized after GSP troopers conducted a traffic stop involving a vehicle inside of which an injured dog was found. The operator of the vehicle admitted to having been present at a dog fight in Eastman, Georgia, and provided law enforcement with the location of the fight. At the reported location, agents discovered a disassembled dog fighting “pit” and more than 60 pit bull-type dogs staked to the ground by heavy chains. The condition of a majority of the dogs, including scarring and aggression towards other dogs, was consistent with dog fighting and related training.

After obtaining a search warrant, agents found numerous indications of dog fighting at the Eastman property, including a treadmill with a rope attached to the front part of the machine, antibiotics and other injectable veterinary medications, and a jenny mill, which is used to develop a dog’s endurance and musculature by enticing the animal to run on a circular track. From four grave areas, agents unearthed the remains of seven dogs, five of which had scarring consistent with dog fighting and one of which had a broken leg. During the search, agents noted that none of the live animals had access to food, and most did not have access to water.

Following the seizure, the United States Marshals Service took custody of the animals. K2 Solutions, Inc. and the Humane Society of the United States are assisting with the care of the dogs, at least some of which are pregnant.

“The Justice Department’s Environment and Natural Resources Division is pleased to have partnered with the U.S. Attorney’s Office, the U.S. Marshals Service, and federal and state law enforcement in this joint effort to remove these animals from harm’s way, pursuant to federal law, as quickly as possible,” said Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division. “We applaud the agents and attorneys who worked tirelessly and acted on very little notice to achieve this successful outcome.”

“Dog fighting is a barbaric spectacle that has no place in any civilized society, and it will enjoy no quarter in the Southern District of Georgia,” said United States Attorney Bobby L. Christine. “We know that animal fighting ventures often entail other forms of illegal activity involving drugs, firearms, and gambling, and this Office will continue to work with its law enforcement partners at all levels to investigate and successfully prosecute those who contribute to the proliferation of crime and seek to profit off the abuse and suffering of helpless animals.”

“The United States Department of Agriculture, Office of Inspector General-Investigations, actively investigates allegations of animal abuse,” said Special Agent in Charge Karen Citizen-Wilcox for USDA-OIG. “This agency has made animal fighting a high priority in order to demonstrate that these blatant acts of cruelty to animals will no longer be tolerated. We would like to thank United States Attorney’s Office for aggressively prosecuting perpetrators of animal fighting.”

Dog fighting is a violent contest in which two dogs that are bred and conditioned for fighting are released by their owners or handlers in a controlled environment to attack each other and fight for purposes of entertainment or gambling. Fights usually end when one dog withdraws, when a handler “picks up” his dog and forfeits the match, or when one or both dogs die. Persons engaged in dog fighting typically use “pit bull”-type dogs, which dog fighters prefer for their compact muscular build, short coat, and the aggression that some display toward other dogs.

The federal Animal Welfare Act makes it a felony punishable by up to five years in prison to fight dogs or to possess, train, sell, buy, deliver, receive, or transport them for that purpose. The statute further authorizes the seizure and forfeiture of animals involved in dog fighting. Once the dogs are forfeited or surrendered to federal authorities, they can be evaluated and placed for adoption. Although federal funds will be used to pay for the care of the dogs while they remain in law enforcement custody, the Animal Welfare Act empowers the government to recover those costs from the dogs’ owners.

Assistant United States Attorneys Theodore S. Hertzberg and Xavier A. Cunningham are pursuing the forfeiture of the dogs on behalf of the United States. USDA-OIG is leading the related federal investigation. For any questions, please contact the United States Attorney’s Office at (912) 652-4422.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2Zvcm1lci1jaGF0dGFub29nYS1wb2xpY2Utb2ZmaWNlci1wbGVhZHMtZ3VpbHR5LXNleHVhbC1hc3NhdWx0
  Press Releases:
Desmond Logan, 38, formerly an officer with the Chattanooga Police Department (CPD), pleaded guilty today in federal court in the Eastern District of Tennessee to two counts of violating the civil rights of victims while performing his duties as a law enforcement officer. Specifically, the defendant sexually assaulted one woman and, in a separate incident, entered the car of another victim and refused to let her out, causing her to fear for her physical safety.

According to court documents filed in connection with the guilty plea, the defendant, while on duty on June 12, 2018, handcuffed and arrested K.B.V. Rather than transporting K.B.V. directly to the Hamilton County Jail, the defendant drove K.B.V. in his squad car to an empty and isolated parking lot. There, Logan sexually assaulted K.B.V. Additionally, on Jan. 2, 2016, in the evening hours, the defendant, while working on a security detail at the University of Tennessee in Chattanooga, got in the passenger seat of D.H.’s car and claimed he needed a ride to his car, which he maintained was parked in a different lot. The defendant intentionally directed D.H. to a secluded parking lot with no people. There, the defendant took out his taser and pressed it against D.H.’s leg, causing D.H. to fear that he would cause her physical harm. When D.H. tried to escape, Logan prevented her from getting out of the car.

In addition to these two victims, the defendant admitted as part of his guilty plea that he also sexually assaulted two more female victims who were in his custody. In each of these two incidents, the defendant drove the victim in his squad car to a deserted area where he sexually assaulted them. None of these victims consented to having sexual contact with the defendant.

“The Department of Justice is committed to prosecuting officers who violate their oath by sexually assaulting and unlawfully seizing persons while on duty,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “We will continue to send the strong message that the federal government will not tolerate such egregious abuses of power.”

“This case exhibits our continued efforts to prosecute those who would use their power to commit acts of violence and injustice against members of our community,” said U.S. Attorney J. Douglas Overbey of the Eastern District of Tennessee. “Our office will continue to stand by and protect the victims of such crimes.”

"Civil Rights violations, particularly when they involve a member of law enforcement, are of tremendous concern,” said Special Agent in Charge Joe Carrico of the FBI’s Knoxville Field Office. “The entire law enforcement profession is tarnished when an officer betrays the oath to protect and serve. The FBI will vigorously investigate any officer or agent of the law who is breaking the rules that he or she is sworn to uphold or is violating the civil rights of others."

With his guilty plea, the defendant faces a maximum sentence of 20 years in prison. In addition to the sentence that the Court ultimately imposes, the defendant must forfeit his law enforcement certification.

A sentencing date has been set for Feb. 10, 2020.

This case was investigated by the Knoxville Division of the FBI, with the support of the Hamilton County Sheriff's Office. Assistant United States Attorney James Brooks of the Eastern District of Tennessee and Special Litigation Counsel Fara Gold and Trial Attorney Olimpia Michel of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice are prosecuting the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2dlb3JnaWEtbWFuLWFycmVzdGVkLWF0dGVtcHRpbmctZGVmcmF1ZC1kZXBhcnRtZW50LXZldGVyYW5zLWFmZmFpcnMtbXVsdGltaWxsaW9uLWRvbGxhci1jb3ZpZA
  Press Releases:
Christopher Parris, a 39-year-old Atlanta, Georgia resident, was arrested today and charged in federal court in the District of Columbia with fraud for attempting to sell millions of nonexistent respirator masks to the Department of Veterans Affairs in exchange for large upfront payments, the Justice Department announced.

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

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

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

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

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

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

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

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

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

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2ZlZGVyYWwtanVyeS1jb252aWN0cy1waGFybWFjeS1vd25lci1yb2xlLTE3NC1taWxsaW9uLXRlbGVtZWRpY2luZS1waGFybWFjeS1mcmF1ZC1zY2hlbWU
  Press Releases:
On Dec. 2, a federal jury in Greeneville, Tennessee, convicted Peter Bolos, 44, of Tampa, Florida, of 22 counts of mail fraud, conspiracy to commit health care fraud and introduction of a misbranded drug into interstate commerce, following a month-long trial.

According to court documents and evidence presented at trial, Bolos and his co-conspirators, Andrew Assad, Michael Palso, Maikel Bolos, Larry Smith, Scott Roix, HealthRight LLC, Mihir Taneja, Arun Kapoor, and Sterling Knight Pharmaceuticals, as well as various other companies owned by them, deceived pharmacy benefit managers (PBMs), such as Express Scripts and CVS Caremark, regarding tens of thousands of prescriptions. The PBMs processed and approved claims for prescription drugs on behalf of insurance companies. Bolos and his co-conspirators defrauded the PBMs into authorizing claims worth more than $174 million that private insurers such as Blue Cross Blue Shield of Tennessee, and public insurers such as Medicaid and TRICARE, paid to pharmacies controlled by the co-conspirators.

Court documents and evidence at trial established that Bolos, Assad and Palso owned and operated Synergy Pharmacy in Palm Harbor, Florida. Under their direction, Synergy agreed with Scott Roix, a Florida telemarketer operating under the name HealthRight, to generate prescriptions for Synergy and the other pharmacies involved in the scheme. The prescriptions were typically for drugs such as pain creams, scar creams and vitamins. To obtain the prescriptions, evidence showed Roix used HealthRight’s telemarketing platform as a telemedicine service, calling consumers and deceiving them into agreeing to accept the drugs and to provide their personal insurance information. HealthRight then paid doctors to authorize the prescriptions through its telemedicine platform, even though the doctors never communicated directly with the patients and relied solely on the telemarketers’ screening process as the basis for their authorizations. Because this faulty and fraudulent process made the prescriptions invalid, the drugs were misbranded under the Food, Drug and Cosmetic Act. Synergy and the other pharmacies nonetheless dispensed the drugs to consumers as part of the scheme, so that Bolos could submit fraudulent reimbursement claims.

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

“The defendants deceived consumers in order to facilitate the distribution of drugs without proper medical oversight, and overbilled insurers for illegal prescriptions,” said Deputy Assistant Attorney General Arun G. Rao of the Justice Department’s Civil Division. “The Department will continue to investigate and prosecute individuals who use telemedicine to advance fraudulent schemes that violate the Food, Drug, and Cosmetic Act.”

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

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

“Distributing misbranded prescription drugs in the U.S. marketplace places patients’ health at risk,” said Special Agent in Charge Justin C. Fielder of the FDA Office of Criminal Investigations Miami Field Office. “We will continue to pursue and bring to justice those who put profits ahead of public health.”

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

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

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

Roix, Assad, Palso, Smith, Maikel Bolos and various associated business entities previously pleaded guilty to their roles in the conspiracy. Taneja, Kapoor, and Sterling Knight pleaded guilty to felony misbranding in a conspiracy with Bolos. U.S. District Judge J. Ronnie Greer set sentencing for Bolos for May 19, 2022, in the United States District Court for the Eastern District of Tennessee at Greeneville. Sentencings for the other defendants will be set for dates in 2022.

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

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3VuaXRlZC1zdGF0ZXMtaW50ZXJ2ZW5lcy1mYWxzZS1jbGFpbXMtYWN0LWxhd3N1aXQtYWdhaW5zdC1jaXR5LWxvcy1hbmdlbGVzLWFuZC1jcmFsYQ
  Press Releases:
The United States has intervened in a lawsuit against the City of Los Angeles and the CRA/LA (formerly the Community Redevelopment Agency of the City of Los Angeles) alleging that they falsely certified compliance with federal accessibility laws in connection with claims submitted to the U.S. Department of Housing and Urban Development (HUD) for housing grants, the Department of Justice announced today. The accessibility laws allegedly violated include Section 504 of the Rehabilitation Act, the Fair Housing Act, and the duty to affirmatively further fair housing, which are meant to ensure that people with disabilities have fair and equal access to public housing.

 

The lawsuit alleges that the City applied for and received from HUD millions of dollars in federal housing funds, a portion of which it provided to the CRA/LA, to develop affordable housing that was accessible for people with disabilities. As recipients of HUD funds, the City and the CRA/LA must comply with the accessibility laws allegedly violated. Among other things, these laws require that five percent of all units in certain federally-assisted multifamily housing be accessible for people with mobility impairments, and an additional two percent be accessible for people with visual and auditory impairments. They also require that the City and the CRA/LA maintain a publicly available list of accessible units and their accessibility features. Likewise, they require that the City and the CRA/LA have a monitoring program in place to ensure people with disabilities are not excluded from participation in, denied the benefits of, or otherwise subjected to discrimination in, federally-assisted housing programs and activities solely on the basis of a disability.

 

The City annually had to certify compliance with Section 504, the Fair Housing Act, and the duty to affirmatively further fair housing as a precondition for receiving HUD funds. The lawsuit alleges that none of the HUD-assisted multifamily housing supported by the CRA/LA, or other developers, met the minimum number of accessible units. The lawsuit also alleges that the City and the CRA/LA neither monitored sub-recipients of HUD funds for compliance with federal accessibility laws nor maintained a publicly-available list of accessible units and their accessibility features.

 

“Recipients of federal housing funds must honor their commitments to accommodate people with disabilities,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Denying people with disabilities equal access to public housing deprives one of the most disadvantaged groups in society of fair housing opportunities.”

 

“This case alleges that the City of Los Angeles repeatedly violated the law by falsely certifying that millions of federal dollars were being used to build housing that included units accessible to people with disabilities,” said Acting U.S. Attorney Sandra R. Brown for the Central District of California. “While people with disabilities struggled to find accessible housing, the city and its agents denied them equal access to housing while falsely certifying the availability of such housing to keep the dollars flowing. The conduct alleged in this case is very troubling because of the impact on people who did not have access to housing that met their needs.”

 

“This case demonstrates the important role whistleblowers play in the process of uncovering waste, fraud, and abuse,” said HUD Inspector General David A. Montoya. “It further displays our commitment to fully pursue allegations that are brought to our attention.”

 

The lawsuit, United States ex rel. Ling, et al. v. City of Los Angeles, et al., No. CV11-00974 (PG), was filed in the U.S. District Court in Los Angeles by Mei Ling, a resident of Los Angeles who uses a wheelchair, and the Fair Housing Council of San Fernando Valley, a nonprofit civil rights advocacy group. The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery. The False Claims Act permits the government to intervene in such a lawsuit, as it has done in this case.

 

These matters were investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Central District of California, and the HUD Office of Inspector General.

 

The claims asserted against the City of Los Angeles and the CRA/LA are allegations only; there has been no determination of liability.

 

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZG5jL3ByL3RocmVlLWluZGljdGVkLTEtbWlsbGlvbi1jb3ZpZC0xOS1yZWxpZWYtZnJhdWQ
  Press Releases:
CHARLOTTE, N.C. – A federal grand jury in Charlotte has indicted three individuals for conspiring to fraudulently obtain more than $1 million in COVID-19 relief funds administered by the Small Business Administration (SBA) through the Paycheck Protection Program (PPP), announced Dena J. King, U.S. Attorney for the Western District of North Carolina.

Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte, and Mark H. Morini, Special Agent in Charge of the Treasury Inspector General for Tax Administration (TIGTA), Southeast Field Division, join U.S. Attorney King in making today’s announcement.

According to allegations in the federal indictment, between March and November 2021, Tamakia Elizabeth Harris, 43, Shavondra Michelle White, 39, and Cedric Lee Benton, 47, all of Charlotte, conspired with each other to fraudulently obtain more than $1 million in COVID-19 relief funds, by submitting fraudulent PPP loan applications to financial servicing companies outside North Carolina. The indictment alleges that the PPP loan applications contained false and misleading information and fraudulent supporting documentation, including fake federal tax filings and payroll reports.

As alleged in the indictment, Harris, who was employed by a nationally chartered bank in Charlotte, generally charged fees between $2,000 and $5,000 for her assistance in filing false and fraudulent PPP loans. Harris allegedly created counterfeit IRS forms for nonexistent businesses and inflated income to qualify the borrower for the highest amount of PPP loan. Harris then allegedly submitted the fraudulent PPP loan applications and supporting documents to the financial servicing companies. The indictment alleges that, in total, Harris assisted in creating and submitting over 30 fraudulent PPP loan applications totaling more than $900,000.

According to allegations in the indictment, White, who was also employed by a nationally chartered bank in Charlotte, electronically filed two PPP loans in her own name using forged and fictitious federal income tax documents prepared by Harris. arris The indictment alleges that White, Benton, and another individual received more than $100,000 in PPP loans that they were not entitled to receive.

The indictment further alleges that Benton, who is White’s boyfriend and has a prior criminal conviction, also submitted two fraudulent PPP loan applications with fictitious and forged IRS forms, or income he purportedly lost while in the custody of the Bureau of Prisons (BOP).

The defendants are each charged with one count of wire fraud conspiracy, which carries a maximum penalty of 20 years in prison. One or more of the defendants are also charged in 16 separate counts of wire fraud – each relating to a specific PPP loan – which also carry a maximum penalty of 20 years in prison per count.

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

In making today’s announcement, U.S. Attorney King thanked the USPIS and TIGTA for their investigation of this case.

Assistant U.S. Attorney Michael E. Savage, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. Members of the public in the Western District of North Carolina are also encouraged to call 704-344-6222 to reach their local Coronavirus Fraud Coordinator.

 

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Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2NydWlzZS1saW5lLW9yZGVyZWQtcGF5LTQwLW1pbGxpb24taWxsZWdhbC1kdW1waW5nLW9pbC1jb250YW1pbmF0ZWQtd2FzdGUtYW5kLWZhbHNpZnlpbmc
  Press Releases:
Princess Cruise Lines Ltd. (Princess) was sentenced to pay a $40 million penalty – the largest-ever for crimes involving deliberate vessel pollution – related to illegal dumping overboard of oil contaminated waste and falsification of official logs in order to conceal the discharges, announced Acting Assistant Attorney General Jeffrey H. Wood for the Department of Justice’s Environment and Natural Resources Division, and Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida in Miami, Florida. The sentence was imposed today by U.S. District Judge Patricia A. Seitz in Miami.

 

Judge Seitz also ordered that $1 million be awarded to a British engineer, who first reported the illegal discharges to the British Maritime and Coastguard Agency (MCA), which in turn provided the evidence to the U.S. Coast Guard.  The newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England without the use of required pollution prevention equipment. The evidence gathered by the whistleblower, including photographs of the magic pipe, led to an inspection of the cruise ship both in England and then when it reached New York on Sept. 14, 2013. During each of the separate inspections certain crew members concealed the illegal activity by lying to the authorities in accordance with orders they had received from Caribbean Princess engineering officers.

 

The sentence imposed by Judge Seitz also requires that Princess remain on probation for a period of five years during which time all of the related Carnival cruise ship companies trading in the U.S. will be required to implement an environmental compliance plan that includes independent audits by an outside company and oversight by a court appointed monitor. As a result of the government’s investigation, Princess has already taken various corrective actions, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.

 

According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The August 2013 discharge approximately 23-miles off the coast of England involved approximately 4,227 gallons within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers ran clean seawater through the ship’s monitoring equipment in order to conceal the criminal conduct and create a false digital record for a legitimate discharge.

 

The case against Princess included illegal practices which were found to have taken place on five Princess ships – Caribbean Princess, Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from going into alarm mode and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste, and then pumped overboard anytime the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely. None of the discharges were recorded in the oil record books that are required to be maintained on board the ships. 

 

“These violations of law were serious, longstanding and designed to conceal illegal discharges,” said Acting Assistant Attorney General Wood. “The sentence in this case should ensure that these crimes do not take place in the future and should also send a strong message to others that illegally polluting U.S. waters will not be tolerated.”

 

“Today's large criminal penalty makes it clear that businesses that operate in our oceans will be held accountable for violating their obligation to safeguard the marine environment,” stated Acting U.S. Attorney Greenberg. “The U.S. Attorney’s Office for the Southern District of Florida and our maritime partners are committed to ensuring that all vessel operators adhere to recognized standards in order to protect our open seas and coasts. We will continue to use the U.S. courts to pursue those who circumvent the law for their own personal gain.”

 

“Without the courageous act of a junior crewmember to alert authorities to these criminal behaviors of deliberately dumping oil at sea, the global environmental damage caused by the Princess fleet could have been much worse,” said Rear Admiral Scott Buschman, Commander of the U.S. Coast Guard Seventh District. “The selflessness of this individual exposed five different ships that embraced a culture of shortcuts and I am pleased at this outcome.”

As set forth in papers filed in court, Princess admitted to the following:

 

After suspecting that the authorities had been informed, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.

Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.

A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.

Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.

 

Ten million of the $40 million criminal penalty imposed by the court is earmarked for community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will go for projects to benefit the marine environment in United Kingdom waters. Additionally, $1 million of the criminal penalty will be deposited in the Abandon Seafarer's Fund, a fund established to provide a mechanism for the U.S. Coast Guard to offer humanitarian relief and support of seafarers who are abandoned in the United States and are witnesses to maritime-related crimes.

 

The investigation was conducted by the U.S. Coast Guard Investigative Service with assistance from the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, Acting Assistant Attorney General Wood and Acting U.S. Attorney Benjamin G. Greenberg expressed their appreciation to the U.S. Coast Guard and to the U.K.’s MCA. The case is being prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice, Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida, and Special Assistant U.S. Attorney Lieutenant Commander Brendan Sullivan, U.S. Coast Guard.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3NlY29uZC10ZW5uZXNzZWUtY29ycmVjdGlvbmFsLW9mZmljZXItcGxlYWRzLWd1aWx0eS1mZWRlcmFsLWNpdmlsLXJpZ2h0cy1vZmZlbnNlLWJlYXRpbmc
  Press Releases:
Tanner Penwell, 22, pleaded guilty to using unlawful force on an inmate while Penwell was serving as a correctional officer with the Tennessee Department of Corrections.

“This type of behavior and violation of an inmate’s civil rights will not be tolerated,” said Assistant Attorney General Eric Dreiband of the Department of Justice’s Civil Rights Division. “The Department of Justice will continue to seek out justice on behalf of those who have had their civil rights violated.”

“Correctional officers must abide by and adhere to the same laws they take an oath to uphold and enforce. Instead of serving and protecting the public, this officer used physical force to violate the civil rights of an individual and will now be held accountable, vividly illustrating that no one is above the law,” said U.S. Attorney D. Michael Dunavant for the Western District of Tennessee.

“The FBI will vigorously investigate and bring to justice any law enforcement officer who crosses the line and engages in activity that violates the civil rights of those whose safety they are charged with,” said Bryan McCloskey, Acting Special Agent in Charge of the Memphis Field Office of the Federal Bureau of Investigation. “This plea should be a reminder that wearing a badge does not make one above the law.”

With his guilty plea, Penwell admitted that, on Feb. 1, he and several other correctional officers entered the cell of R.T., an inmate in the mental health unit at the Northwest County Correctional Complex in Tiptonville, Tennessee. Penwell and the other officers entered the cell because R.T. was a suicide risk. Inmate R.T. was already bleeding when the officers entered his cell, and R.T. flung blood toward the correctional officers.

Once inside, a correctional officer looked in the direction of the surveillance camera in the cell and said, “violate the camera.” Another correctional officer then covered the camera with his hand. The correctional officer who asked for the camera to be violated then repeatedly punched R.T. Penwell estimated that this officer hit R.T. more than 20 times. When the officer stopped hitting R.T., he looked back at Penwell and said, “get him.”  Penwell stepped up and punched R.T. multiple times in the head. After Penwell stopped punching R.T., a third correctional officer punched R.T. 

Throughout the time he was being punched by the correctional officers, inmate R.T. sat on the bench in the cell and only used his arms to cover his face in an apparent attempt to protect his face from the correctional officers’ punches. At no point did R.T. attempt to fight back. Penwell knew that punching R.T. was unlawful, but he did not step in to stop it. A supervisor and several correctional officers were in a position to watch as the three correctional officers punched inmate R.T., but none of them attempted to stop the officers from hitting R.T. After R.T. was punched by the officers, Penwell observed that R.T. was bleeding much more than when they had first entered the cell.

Once outside of the cell, Penwell spoke with several correctional officers and a supervisor. The supervisor said he needed to see if the camera inside the cell was working.  The supervisor and the first correctional officer who punched R.T. decided that all of the officers would falsely claim that R.T. injured himself while he was on suicide watch in the mental health unit.

The next morning, the first correctional officer who punched R.T. told Penwell that instead of falsely claiming that R.T. injured himself, as the supervisor had proposed the day before, they should both falsely blame the third correctional officer who punched R.T. for all of R.T.’s injuries. Over the next few days, the first officer who punched R.T. repeatedly told Penwell to stick to this new cover story.

With today’s guilty plea, Penwell admitted that he violated 18 U.S.C. § 242 when he repeatedly punched and injured inmate R.T. without legal justification. The maximum penalty for this civil rights offense is 10 years imprisonment.

In a related case, former Correctional Officer Nathaniel Griffin entered a guilty plea in federal court on Aug. 15. Sentencing is scheduled for Nov. 27. 

This case was investigated by the Memphis Division of the FBI with the support of the Tennessee Department of Corrections, and is being prosecuted by Trial Attorney Rebekah J. Bailey of the Justice Department’s Civil Rights Division and Assistant United States Attorney David Pritchard of the U.S. Attorney’s Office for the Western District of Tennessee.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3VuaXRlZC1zdGF0ZXMtZmlsZXMtY29tcGxhaW50LWZvcmZlaXQtMjgwLWNyeXB0b2N1cnJlbmN5LWFjY291bnRzLXRpZWQtaGFja3MtdHdvLWV4Y2hhbmdlcw
  Press Releases:
The Justice Department today filed a civil forfeiture complaint detailing two hacks of virtual currency exchanges by North Korean actors.  These actors stole millions of dollars’ worth of cryptocurrency and ultimately laundered the funds through Chinese over-the-counter (OTC) cryptocurrency traders.  The complaint follows related criminal and civil actions announced in March 2020 pertaining to the theft of $250 million in cryptocurrency through other exchange hacks by North Korean actors.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3NoaXBwaW5nLWNvbXBhbnktZmluZWQtMTUtbWlsbGlvbi1vaWwtcmVjb3JkLWJvb2stb2ZmZW5zZQ
  Press Releases:
Clipper Shipping A.S. was convicted of violating the Act to Prevent Pollution from Ships and sentenced to pay a fine of $1.5 million. Clipper admitted that oily bilge water was discharged from the Motor Tanker (M/T) Clipper Saturn and the discharges were omitted from the Oil Record Book.    

On Sept. 27 and Oct. 1, 2021, while the M/T Clipper Saturn was anchored near Lome, Togo, the then-Chief Engineer directed that oily bilge water be transferred into the vessel’s gray water tank and then discharged directly overboard under the cover of darkness. In order to accomplish the discharge, the then-Chief Engineer ordered that a section of piping be removed and a hose installed onto the eductor system. This arrangement was used to discharge the gray water tank directly overboard. Personnel then re-installed and repainted the piping in the area in order to appear that none had been removed. During a Coast Guard inspection of the vessel in Houston, Texas, on Oct. 28, 2021, authorities learned about the discharges.

“We take seriously the crimes of illegally discharging oily bilge water at sea and falsifying records to obstruct the United States’ ability to investigate those discharges,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The U.S. Coast Guard must be able to rely on truthful records on board ships and the Department of Justice will continue to ensure polluters are held fully accountable.”   

“Not only did this ship pollute waterways, but they tried to cover it up,” said U.S. Attorney Alamdar S. Hamdani of the Southern District of Texas (SDTX). “To put it simply, Clipper Saturn wanted to get rid of dirty oily water from their ship. Instead of filtering out the hazardous elements, as required, they decided to cut costs and just release the whole contaminated mess into the sea. Unfortunately for them, they got caught when they docked in Houston. The fine imposed today tells them that there is a bigger cost to endangering our citizens and the environment in which they live, and that the SDTX will seek to hold those who harm oceans and waterways accountable.”

“The Coast Guard is committed to protecting our oceans and waterways from those who deliberately jeopardize the well-being and safety of the environment and the public,” said Coast Guard Capt. Keith Donohue, Commander, Sector Houston-Galveston. “The intentional pollution of U.S. waters is a serious violation that we simply will not tolerate. We will continue to work with the Department of Justice and our federal, state, and local partners to hold accountable those who choose to endanger our natural resources.”

As part of the plea agreement, Clipper Shipping A.S. will implement an enhanced Environmental Compliance Plan (ECP) on nine vessels. The ECP requires independent auditing and monitoring of the vessels as well as imposing requirements to enhance the pollution prevention systems on the vessels.

This case was investigated by the U.S. Coast Guard Sector Houston-Galveston, and the U.S. Coast Guard Investigative Service.

Assistant U.S. Attorney Steven Schammal for the Southern District of Texas and Senior Trial Attorney Kenneth E. Nelson of the Environment and Natural Resources Division’s Environmental Crimes Section are prosecuting the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tZC9wci9mYXRoZXItYW5kLXNvbi1zZW50ZW5jZWQtbGF1bmRlcmluZy1kcnVnLXRyYWZmaWNraW5nLWJpdGNvaW4tcHJvY2VlZHMtaW50ZW5kZWQtZmVkZXJhbA
  Press Releases:
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Joseph Farace, age 72, of Sparks, Maryland today to 19 months in federal prison, followed by two years of supervised release, for a money laundering conspiracy.  On January 5, 2023, Judge Griggsby sentenced his son, Ryan Farace, age 38, of Reisterstown, Maryland, a previously convicted felon, to 54 months in federal prison for the same charge. 

The sentences were announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division; Special Agent in Charge Jarod Forget of the Drug Enforcement Administration - Washington Division; Special Agent in Charge Kareem A. Carter of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Chief Robert McCullough of the Baltimore County Police Department; Chief Gregory Der of the Howard County Police Department; Anne Arundel County Police Chief Amal E. Awad; Carroll County Sheriff James DeWees; Washington County Sheriff Brian K. Albert; and Chief Teresa Walter of the Havre de Grace Police Department.

According to their guilty pleas and other court documents, in November 2018, Ryan Farace was convicted in U.S. District Court in Maryland for a scheme to manufacture and distribute alprazolam tablets (sold under the brand name “Xanax”) in exchange for Bitcoin through sales on darknet marketplaces.  Cryptocurrency tracing techniques established that, in all, wallets associated with R. Farace, and/or his vendor name “XANAXMAN,” received over 9,138 Bitcoins from addresses associated with darknet marketplaces. 

Prior to his sentencing for the 2018 crimes, R. Farace met with representatives of the United States Attorney’s Office and the Drug Enforcement Administration, for the purpose of helping the government gain access to R. Farace’s drug proceeds, particularly cryptocurrency and cash, which had not yet been seized.  R. Farace repeatedly stated that he did not recall the location or means by which he could access any additional Bitcoins about which the government was not already aware.  At R. Farace’s sentencing for the 2018 crimes, he argued that he had been cooperative with the government’s efforts to obtain his assets.  Nonetheless, after R. Farace was sentenced, the government recovered additional drug proceeds in the form of Bitcoin.  Specifically, in early 2020, law enforcement recovered over 24 Bitcoin.

As detailed in his guilty plea, despite R. Farace’s claims to the government that he could not access any other Bitcoin proceeds related to his 2018 drug trafficking conviction, from October 2019 to April 2021, while incarcerated for his 2018 crimes, R. Farace conspired with his father, J. Farace, and others to launder additional proceeds of crimes through a series of financial transactions.  For example, in 2019, R. Farace sent approximately 71 Bitcoin from digital wallets he controlled to online exchanges and retailers.  Financial records from one such retailer indicated that R. Farace used some of the drug proceeds to benefit his father, including sending $3,341.65 worth of gift cards.  R. Farace used a contraband cell phone in prison to communicate with J. Farace about these purchases, using an encrypted email service. 

In August 2020, while he was incarcerated, R. Farace asked J. Farace to transfer more than 2,874 Bitcoin to a third party, so that the funds could be moved into a foreign bank account.  R. Farace provided J. Farace with the wallet address by typing it into the back cover of a prison library book and mailing it to J. Farace.

As detailed in their plea agreements, R. Farace (while incarcerated) and J. Farace used email and phone calls to discuss the transfer of bitcoin using coded language.  In September 2020, J. Farace completed the transfer of over 2,874 Bitcoin to the third party, all of which were proceeds of R. Farace’s 2018 drug crimes. On February 10, 2021, federal agents seized all of the 2,874.90419597 Bitcoin that J. Farace had transferred, the market value of which was between $65 million and $150 million at the time of seizure.  On May 11, 2021, the government seized 58.742155166 Bitcoin that was also proceeds of R. Farace’s drug trafficking.  Both R. Farace and J. Farace must forfeit all of the Bitcoin seized during the investigation.

United States Attorney Erek L. Barron and Acting Assistant Attorney General Nicole M. Argentieri commended the DEA, the IRS-CI, the Baltimore County, Howard County, and Anne Arundel County Police Departments, the Carroll County Sheriff’s Office, the Washington County Narcotics Task Force, the Havre de Grace Police Department for their work in the investigation and thanked the United States Postal Inspection Service, Maryland Department of Public Safety and Correctional Services and the Federal Bureau of Prisons for their assistance.  Mr. Barron thanked Assistant U.S. Attorney Coreen Mao and Trial Attorney Emily Cohen of the Justice Department’s Money Laundering and Asset Recovery Section, who prosecuted the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

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Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZGluL3ByL2ZyYW5rbGluLW1hbi1zZW50ZW5jZWQtdHdvLXllYXJzLWZlZGVyYWwtcHJpc29uLTMtZC1wcmludGluZy1hbmQtdHJhZmZpY2tpbmctZmlyZWFybXM
  Press Releases:
INDIANAPOLIS- Alexander Clark, 28, of Franklin, Indiana, has been sentenced to two years in federal prison after pleading guilty to making a firearm in violation of the National Firearms Act, possession of an unregistered firearm, and possession of a machinegun.

According to court documents, the Bureau of Alcohol, Tobacco, Firearms and Explosives began to investigate Alexander Clark based on occasions in which he sold privately made firearms. Over a one-month period, Clark was observed selling five Glock style pistols that were made with use of a 3-D printer for the frames, a 3-D printed AR-15 rifle lower receiver, and two machinegun conversion devices.

Machinegun conversion devices, sometimes called “Glock switches” or “auto-sears” are devices that convert ordinary semiautomatic firearms into fully automatic machineguns. Machinegun conversion devices are themselves considered machineguns under federal law, even when not installed, and are illegal to possess or sell in almost all cases.

On August 22., 2022, ATF agents searched Clark’s home and located multiple firearms, machineguns, silencers, firearm accessories, and a 3-D printer with other electronic devices in aid of 3-D printing.

In total, Clark possessed seven machineguns, 27 machinegun conversion devices and seven silencers, none of which were legally registered.

“Machinegun conversion devices are an urgent public safety challenge—an ordinary pistol equipped with a conversion device and an extended magazine can fire 31 rounds in just two seconds,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana. “Criminals like this defendant exploit modern technology to illegally manufacture deadly weapons and illegally arm others, including felons and juveniles. The serious federal prison sentence imposed here demonstrates that our office is committed to making our communities safer by getting these devices off our streets and holding illegal gun traffickers accountable.”

“Machine gun conversion devices, which convert semi-automatic firearms into fully automatic weapons, are one of the most serious challenges facing ATF and our law enforcement partners at the moment,” stated Daryl S. McCormick, Special Agent in Charge of ATF’s Columbus Field Division. “These conversion devices increase the lethality of a firearm, while also reducing the ability of the person firing the weapon to control where they shoot. This combination is deadly and random and represents a clear threat to our community. We will work with our partners to remove these devices, and those who are manufacturing and selling them, from our streets.”

The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case. The sentence was imposed by Chief U.S. District Judge Tanya Walton Pratt. Chief Judge Pratt also ordered that Clark be supervised by the U.S. Probation Office for three years following his release from federal prison.

U.S. Attorney Myers thanked Assistant United States Attorney Jayson W. McGrath, who prosecuted this case.

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Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1lZG5jL3ByL3RyaWFuZ2xlLWNlby1wbGVhZHMtZ3VpbHR5LWZpbGluZy1mYWxzZS10YXgtcmV0dXJucw
  Press Releases:
RALEIGH, N.C. – Raleigh business owner Alton Perkins, pled guilty yesterday for failing to account for approximately three-million dollars diverted from his companies for his own personal use between 2015 and 2018.

“Hardworking, taxpaying Americans deserve to know that the government will hold accountable tax cheats who dodge paying their fair share,” said U.S. Attorney Michael Easley.  “This CEO tried to dodge paying his due by diverting company money to pay for vacations, expensive jewelry, and private school tuition.  Yesterday he paid full price with a guilty plea.”     

“People who create elaborate schemes that have no purpose other than to mislead others and defraud the IRS run the very high risk of prosecution" said Donald “Trey” Eakins, Internal Revenue Service (IRS) Criminal Investigation Special Agent in Charge of the Charlotte Field Office.

According to evidence summarized in court, Perkins moved large amounts of money from his business accounts into his personal bank accounts.  These funds were then used for personal expenditures. None of the approximately three million spent by Perkins on these personal items was accounted for in his taxes filed with the IRS.  

Perkins is the chairman and CEO of AmericaTowne, a company, according to its website, focused on increasing exports of American products to China.  AmericaTowne, which was funded by investor dollars, included a plan to build an American-style community in China that would include hotels, small businesses, and a theme park.  Perkins is currently involved in a civil lawsuit with the U.S. Securities and Exchange Commission (Case No. 5:19-CV-00243-FL) over the unregistered private placement offerings and the sale of securities for AmericaTowne and other business entities controlled by Perkins.   

In court, Perkins pled guilty to making and subscribing to false tax returns for his failure to account for his personal expenditures on his 2016 personal income tax return.  According to evidence presented in court, for tax year 2016, Perkins stated that his total income was $21,933.  However, banking records show that Perkins spent $1,208,394 that year on personal items including, a golf cart, a family trip to Hawaii, private high school tuition, and a Rolex – all with funds taken from Perkin’s corporate bank accounts.

Perkins pled guilty to one felony charge of Making and Subscribing a False Tax Return Under Penalty of Perjury, in violation of 26 U.S.C. § 7206(1).  He faces up to three years in prison.  According to the plea agreement, Perkins will make restitution in the amount of $520,344 to the IRS for taxes owed from 2015-2018. 

Michael Easley, U.S. Attorney for the Eastern District of North Carolina, made the announcement after Magistrate Judge Robert B. Jones Jr. accepted the plea.  The Internal Revenue Service Criminal Investigation investigated the case and Assistant U.S. Attorneys William M. Gilmore and Karen Haughton prosecuted the case.

Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No 5:22-CR-00265-FL.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1jZGlsL3ByL3RocmVlLXBlb3JpYS1tZW4tc2VudGVuY2VkLXBheWNoZWNrLXByb3RlY3Rpb24tcHJvZ3JhbS1mcmF1ZA
  Press Releases:










PEORIA, Ill. – Three Peoria, Illinois, men were sentenced on September 5, 2023, by U.S. District Judge James E. Shadid for making false statements related to the federal Paycheck Protection Program (PPP). Two of the three were also held responsible for fraudulently obtaining unemployment insurance benefits from multiple states.

The PPP provided federal funds to small businesses that were directly affected by the COVID-19 pandemic to pay up to eight weeks of payroll costs, rent, utilities and mortgage interest. The program was implemented by the Small Business Administration and administered by third-party lenders. The PPP was enacted via the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, an economic bill that passed in March 2020 in response to the economic fallout caused by the pandemic.

The three men were indicted in October 2022. Kendall A. Mack, 26, pleaded guilty in May 2023 to one count of making a false statement in April 2021 to obtain a PPP loan. From April to September 2021, Mack fraudulently obtained PPP funds to which he was not entitled by submitting a fraudulent PPP application, as well as a fraudulent PPP loan forgiveness application. He was held responsible for losses to the Small Business Administration and Capital Plus Financial, LLC, in the amount of $39,239.08. Mack was sentenced to three years’ probation and imprisonment for a period of time served. Judge Shadid also ordered Mack to pay restitution in the amount of $39,239.08.

Rasheem McCree, 38, pleaded guilty in April 2023 to one count of making a false statement in March 2021 by submitting a false application for PPP funds. He also admitted to fraudulently obtaining unemployment benefits from five states, including the Nevada Department of Employment, Training and Rehabilitation; the Arizona Department of Economic Security; the Pennsylvania Department of Labor and Industry; the New York State Department of Labor; and the Illinois Department of Employment Security. McCree was sentenced to 27 months’ imprisonment, to be followed by three years of supervised release. Judge Shadid also ordered McCree to pay $89,981.34 in restitution to the SBA and the states.

Adrian Lamont Morris, 27, pleaded guilty in April 2023 to one count of making a false statement in March 2021 by submitting a false application for PPP funds. In addition to the PPP loan, Morris filed for unemployment benefits from Illinois, Louisiana, and Pennsylvania, for a loss to the SBA and those states of $60,642. Morris was sentenced to 24 months’ imprisonment, to be followed by three years of supervised release. Judge Shadid also ordered Morris to pay $60,642 restitution.

On their applications, each of the defendants claimed to be the sole proprietor of a barber shop. However, none of them had a registered barber shop, employees, a payroll, or business-related expenses. None were licensed barbers.

In sentencing McCree and Morris, Judge Shadid noted their significant criminal histories. McCree and Morris were ordered to report to the Bureau of Prisons on November 14, 2023.

The statutory penalties for false statements under 18 U.S.C. §1001(a)(3) are up to five years’ imprisonment, a possible $250,000 fine, and up to a three-year term of supervised release.

The Internal Revenue Service, Criminal Investigation, and the Federal Bureau of Investigation, Springfield Field Office, investigated the case. Criminal Chief Darilynn J. Knauss represented the government in the prosecution.











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Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2p1c3RpY2UtZGVwYXJ0bWVudC1vYnRhaW5zLTgwMDAwLXNldHRsZW1lbnQtYWdhaW5zdC1zdWJwcmltZS1hdXRvLWxlbmRlci1vcmFuZ2UtY291bnR5
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The Justice Department today announced that California Auto Finance, a subprime auto lending company based in Orange County, California, has agreed to enter into a court-enforceable consent order to resolve allegations that it illegally repossessed two servicemembers’ cars without court orders while they were on active duty. The Justice Department filed a lawsuit against California Auto Finance and a related entity called 3rd Generation Inc., on March 28, 2018, alleging that their repossession practices violated the Servicemembers Civil Relief Act (SCRA). Under the proposed consent order, which is still subject to approval by the United States District Court for the Central District of California, California Auto Finance must adopt new repossession policies, pay one servicemember $30,000, which is the highest amount ever recovered by the Department for a single servicemember in an automobile repossession case, and pay a $50,000 civil penalty to the United States.

“This case sends a message to financial institutions, large and small, that they must live up to their obligations to our servicemembers,” said Assistant Attorney General Eric Dreiband. “We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it belongs to a servicemember. Servicemembers who are going through basic training or another kind of military service should not have to worry that their cars will be repossessed with no court supervision during their time of service to our country.”

“Individuals who take up the call to protect our nation by serving in the armed forces make an enormous sacrifice for us all,” said United States Attorney Nicola T. Hanna. “We have a legal and moral duty to safeguard the rights of our men and women in uniform.  California Auto Finance failed to uphold this duty through its repossession practices. Today’s consent order demonstrates that we will tolerate no abuses of servicemembers’ rights in our district.”

The Justice Department initiated its investigation of California Auto Finance after receiving a complaint in November 2016 from United States Army Private Andrea Starks. The United States alleges that in April 2016, Private Starks notified California Auto Finance that she would be entering the military the following month. Despite this advance notice, California Auto Finance repossessed Private Starks’ vehicle without a court order on May 9, 2016, her first day of military training duty at Fort Leonard Wood, Missouri. At the time of repossession, the vehicle was parked at the home of Private Starks’ grandmother in Cedar Rapids, Iowa.  

The Justice Department’s investigation corroborated Private Starks’ complaint, found that California Auto Finance had no policies related to SCRA compliance, and revealed that California Auto Finance had also violated the SCRA rights of U.S. Army Specialist Omar Martinez. The United States alleges that Specialist Martinez informed California Auto Finance that he would be entering the military, and that he would have limited means of communication during basic training. Nonetheless, California Auto Finance repossessed Specialist Martinez’s vehicle during his first month of military service. The repossession severely damaged Specialist Martinez’s credit, and, as a result, he was unable to purchase a new car. For over a year while living on base at Fort Benning, Georgia, Specialist Martinez had to rely on rideshares and taxis to buy groceries and take care of other personal needs. In March 2018, Specialist Martinez deployed to Afghanistan, where he served until November 2018.   

The proposed consent order requires California Auto Finance to pay $30,000 in compensation to Specialist Martinez, and to take steps to repair his credit. In addition, the proposed consent order requires California Auto Finance to take steps to ensure it does not repossess servicemembers’ cars without court orders in the future. Private Starks reached a private settlement with California Auto Finance before the proposed consent order was filed.

The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, California Auto Finance prevented servicemembers from obtaining a court’s review of whether their repossessions should have been delayed or adjusted to account for their military service.

The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with United States Attorney’s Offices. Housing and Civil Enforcement Section attorneys worked jointly with the Civil Rights Section within the Civil Division of the United States Attorney’s Office in this action. Since 2011, the Justice Department has obtained over $469 million in monetary relief for over 119,000 servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance, and income tax payments. For more information about the Justice Department’s SCRA enforcement, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/.

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Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2FyY2hkaW9jZXNlLW5ldy1vcmxlYW5zLWFncmVlcy1wYXktbW9yZS0xLW1pbGxpb24tcmVzb2x2ZS1odXJyaWNhbmUta2F0cmluYS1yZWxhdGVkLWZhbHNl
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The Roman Catholic Archdiocese of New Orleans (Archdiocese of New Orleans) has agreed to pay more than $1 million to resolve allegations that it violated the False Claims Act by knowingly submitting false claims for payment to the Federal Emergency Management Agency (FEMA) for the repair or replacement of certain facilities damaged by Hurricane Katrina. The settlement, which is based on the Archdiocese of New Orleans’ financial condition, required final approval of the U.S. Bankruptcy Court for the Eastern District of Louisiana, which approved the settlement on Oct. 26. 

“FEMA offers critical financial support when natural disasters strike,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that these taxpayer funds are properly spent to help disaster victims rebuild their communities.”  

The settlement resolves allegations that, from 2007 through 2013, the Archdiocese of New Orleans knowingly signed certifications for FEMA funding that contained false or fraudulent damage descriptions and repair estimates that were prepared by AECOM, an architecture and engineering firm based in Los Angeles. Among other things, the alleged false descriptions included purported damage to a nonexistent central air conditioning unit and misstated a facility’s square footage. 

“Federal disaster funds are an instrumental component in the effort to assist disaster victims with their recovery,” said the U.S. Attorney’s Office for the Eastern District of Louisiana. “The favorable resolution of this False Claims Act matter illustrates the collaborative efforts and firm commitment by our federal partners to use all available remedies to address signs of fraud, waste and abuse.”

“Funds fraudulently obtained from FEMA deprive deserving recipients and communities truly in need,” said Inspector General Dr. Joseph V. Cuffari for Department of Homeland Security Office of Inspector General (DHS OIG). “We appreciate the support of our law enforcement partners, and this outcome is another example of the continuing successful partnership between the Department of Homeland Security Office of Inspector General, the Department of Justice’s Civil Litigation Branch in Washington, DC and the Eastern District of Louisiana’s U.S. Attorney’s Office.”

The settlement resolved allegations originally filed in a lawsuit brought under the qui tam or whistleblower provisions of the False Claims Act by Robert Romero, an AECOM Project Specialist. The False Claims Act permits private parties to file suit on behalf of the United States for false claims and to share in any recovery. The False Claims Act also permits the United States to intervene in such an action, as it did in this case, in part, against AECOM, the Archdiocese of New Orleans, and other disaster relief applicants in June 2020. One of those applicants, Xavier University of Louisiana, previously agreed to pay the United States $12 million to resolve its alleged role in the submission of false and misleading repair estimates prepared on its behalf by AECOM. The lawsuit against AECOM and another disaster relief applicant remains ongoing. As part of its settlement, the Archdiocese of New Orleans agreed to cooperate in the litigation.       

The whistleblower lawsuit is captioned United States ex rel. Robert Romero v. AECOM, Inc., et al., No. 16-cv-15092 (E.D. La.). As part of the settlement with the Archdiocese of New Orleans, Mr. Romero received approximately $199,500. 

The False Claims Act lawsuit is being handled by the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Eastern District of Louisiana, with assistance from FEMA’s Office of Chief Counsel. Investigative support is being provided by DHS OIG, through its Major Fraud and Corruption Unit and New Orleans Resident Office. 

The claims alleged in the lawsuit, including those resolved by the Archdiocese of New Orleans, are allegations only, and there has been no determination of liability.

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Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2FsZXJlLXBheS11cy0zMzItbWlsbGlvbi1zZXR0bGUtZmFsc2UtY2xhaW1zLWFjdC1hbGxlZ2F0aW9ucy1yZWxhdGluZy11bnJlbGlhYmxlLWRpYWdub3N0aWM
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Massachusetts-based medical device manufacturer Alere Inc. and its subsidiary Alere San Diego (Alere) have agreed to pay the United States $33.2 million to resolve allegations that Alere caused hospitals to submit false claims to Medicare, Medicaid, and other federal healthcare programs by knowingly selling materially unreliable point-of-care diagnostic testing devices, the Justice Department announced today.

       

“The United States is fortunate that innovative healthcare companies regularly develop medical devices that improve patients’ lives, often in remarkable ways,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division.  “But the Department will hold medical device manufacturers accountable if they knowingly sell defective products that waste taxpayer dollars and adversely impact patient care.”   

 

The United States alleged that between January 2006 and March 2012, Alere knowingly sold materially unreliable rapid point-of-care testing devices marketed under the trade name Triage®.  The Triage® devices aided in the diagnosis of acute coronary syndromes, heart failure, drug overdose, and other serious conditions, and the devices were frequently used in emergency departments where timely decisions are critical to ensuring proper patient care.  According to the government’s allegations, Alere received customer complaints that put it on notice that certain devices it sold produced erroneous results that had the potential to create false positives and false negatives that adversely affected clinical decision-making.  Nonetheless, the company failed to take appropriate corrective actions until FDA inspections prompted a nationwide product recall in 2012.  Of the $33.2 million to be paid by Alere, $28,378,893 will be returned to the federal government and a total of $4,860,779 will be returned to individual states, which jointly funded claims for Triage devices submitted to state Medicaid programs.        

 

“Physicians who work to treat patients with suspected myocardial infarctions rely upon devices such as Alere’s Triage Cardiac products for quick and accurate readings," said Stephen M. Schenning, Acting United States Attorney for the District of Maryland.  "When manufacturers such as Alere make changes to the specifications that affect the product’s reliability without informing physicians or the FDA, patient care is put at substantial risk.”

 

“Congress passed the False Claims Act on March 2, 1863 to protect taxpayer dollars from fraud and abuse and to allow private citizens to join the effort,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General in Philadelphia.   “We will continue to work with concerned citizens, the Department of Justice and our investigative partners to ensure the federal government only pays for honest, high quality, health care products and services.”

 

The settlement with Alere resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The civil lawsuit was filed by Amanda Wu, who formerly worked for Alere as a senior quality control analyst.  As part of today’s resolution, Ms. Wu will receive approximately $5.6 million.

 

The settlement with Alere was the result of a coordinated effort among the U.S. Attorney’s Office for the District of Maryland, the Commercial Litigation Branch of the Justice Department’s Civil Division, and the National Association of Medicaid Fraud Control Units, with assistance from the FDA’s Office of Chief Counsel, and HHS’ Office of Counsel to the Inspector General. The investigation was conducted by HHS-OIG, FDA’s Office of Criminal Investigations, and the Department of Defense Criminal Investigative Services.

 

The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The lawsuit is captioned United States ex rel. Amanda Wu v. Alere San Diego, et al., No. GLR-11-CV-1808. 

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Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1tZHRuL3ByL2NsYXJrc3ZpbGxlLWhvbWUtYnVzaW5lc3Mtb3duZXItY29udmljdGVkLWZpbGluZy1mYWxzZS10YXgtcmV0dXJucw
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NASHVILLE – A federal jury yesterday convicted a Clarksville, Tennessee man of filing false tax returns that omitted income he earned from his business, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

According to court documents and evidence presented at trial, David Haley, 65, of Clarksville, owned Haley & Associates Mechanical Contractors, a heating and plumbing business. From 2014 through 2017, Haley & Associates was hired as the subcontractor on commercial projects in middle Tennessee and was paid more than $1,000,000 for each year. Generally, the contractors that hired Haley & Associates paid via check and reported the payments to the IRS via Forms 1099-MISC as non-employee compensation. Even though Haley personally received a portion of the company’s earnings as business income and nonemployee compensation, Haley reported earning no income on his 2014-2017 tax returns.  Haley’s failure to report that income on his tax returns for tax years 2015 through 2017 caused the IRS a loss of approximately $186,290.

Haley was convicted of three counts of filing false tax returns for tax years 2015, 2016, and 2017.  The jury acquitted Haley of one count of filing a false tax return relating to his 2014 tax filing.

Haley will be sentenced at a later date. He faces a maximum penalty of three years in prison for each count of filing false tax returns. U.S. District Judge William L. Campbell, Jr. will determine any sentence after consideration of  the U.S. Sentencing Guidelines and other statutory factors.

IRS-Criminal Investigation investigated the case.

Assistant U.S. Attorney Kathryn W. Booth and Trial Attorney Mitchell T. Galloway of the Justice Department’s Tax Division are prosecuting the case.

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Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci9sZWFkZXItcmVhbC1lc3RhdGUtaW52ZXN0bWVudC1maXJtLWFkbWl0cy1yb2xlLTY1OC1taWxsaW9uLXBvbnppLXNjaGVtZS1hbmQtbXVsdGltaWxsaW9u
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NEWARK, N.J. – The shadow chief executive officer of National Realty Investment Advisors LLC (NRIA) today admitted orchestrating a scheme to defraud more than 2,000 investors in a $658 million Ponzi scheme and conspiring to evade millions of dollars in tax liabilities, U.S. Attorney Philip R. Sellinger announced.

Thomas Nicholas Salzano, aka “Nicholas Salzano,” 65, of Secaucus, New Jersey, pleaded guilty before U.S. District Judge Evelyn Padin in Newark federal court to securities fraud, conspiracy to commit wire fraud, and conspiracy to defraud the United States. Salzano admitted he made numerous misrepresentations to investors while he secretly ran NRIA behind the scenes. He also admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends. 



“For years, Salzano told lie after lie to investors, continuously deceived them, and operated his business as a Ponzi scheme, through which he stole money from thousands of investors. His greed and flagrant disregard for the law caused staggering losses in excess of $650 million. This office will continue to prioritize prosecuting individuals, like Salzano, to ensure that those who engage in rampant fraud are punished with long jail sentences and are ordered to make their victims whole.”



U.S. Attorney Philip R. Sellinger“Many people who decide to invest have to put a lot of faith in so-called financial experts, hoping their money grows and doesn’t one day disappear,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Salzano admits he played a role in a scam that cost investors $658 million. History has shown over and over and over again, Ponzi schemes don't ever pay out, yet criminals keep trying to beat the system. FBI Newark and our law enforcement partners are doing all we can to help the victims in this case. We want others who may have faced a similar situation to contact us so we can help you as well.”

“Salzano not only victimized thousands of investors, but he also defrauded honest taxpayers by concealing his income from the IRS and evading his tax liability to the tune of millions of dollars,” IRS – Criminal Investigation Special Agent in Charge Harry T. Chavis Jr., Boston Field Office, said. “Today’s guilty plea by Salzano demonstrates how IRS – Criminal Investigation will continue to use their financial expertise to identify and investigate these types of investor fraud schemes with our law enforcement partners.”

As part of his plea agreement, Salzano has agreed to a prison term of eight to 12 years, a forfeiture money judgment in the amount of $8.52 million, and he has agreed to pay full restitution of $507.4 million to the victims of his offenses.

According to documents filed in this case and statements made in court:

From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC (the “Fund”), a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions. These included the financial position of NRIA, the manner in which the defendants and their conspirators used Fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.

The defendants executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors; advertisements on billboards, television, and radio; and meetings and presentations to investors. Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors, which were intended to mislead Fund investors into believing that NRIA was a solvent business that generated significant profits. In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors. Despite investing almost none of their own capital into the business, the defendants misappropriated millions of dollars of investor money to support their lavish lifestyles, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA.

Salzano concealed his true managerial role at NRIA in an effort to avoid scrutiny from investors of Salzano’s history of fraud at a large telecommunications company. In addition to defrauding investors, Salzano orchestrated a separate conspiracy to obstruct, impede, and impair the IRS in its effort to collect millions of dollars in outstanding taxes Salzano owed to the U.S. Treasury by, among other things, lying to the IRS, using a web of nominees, opening bank accounts in the names of phony entities, and using false and fraudulent company documents. 

Conspiring to defraud the United States carries a maximum penalty of five years in prison and a $250,000 fine. The securities fraud count and the wire fraud conspiracy count are both punishable by a maximum penalty of 20 years in prison and a $250,000 fine. Pursuant to the terms of his plea agreement, the maximum prison term that can be imposed on Salzano is 12 years. Sentencing is scheduled for Aug. 6, 2024.

U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Chavis in Boston; and special agents of the FBI, under the direction of Special Agent in Charge Dennehy in Newark, with the investigation, with assistance from FBI Headquarters Criminal Investigative Division and the Department of Justice Tax Division.

The government is represented by Assistant U.S. Attorneys Jonathan Fayer, Lauren E. Repole, and John Mezzanotte, all of the U.S. Attorney’s Office’s Criminal Division, with assistance from Trial Attorney Samuel B. Bean of the U.S. Department of Justice, Tax Division.

 





salzano.indictment.pdf





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Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2RldXRzY2hlLWJhbmstYWdyZWVzLXBheS03Mi1iaWxsaW9uLW1pc2xlYWRpbmctaW52ZXN0b3JzLWl0cy1zYWxlLXJlc2lkZW50aWFsLW1vcnRnYWdlLWJhY2tlZA
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The Justice Department, along with federal partners, announced today a $7.2 billion settlement with Deutsche Bank resolving federal civil claims that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007.  This $7.2 billion agreement represents the single largest RMBS resolution for the conduct of a single entity.  The settlement requires Deutsche Bank to pay a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  Under the settlement, Deutsche Bank will also provide $4.1 billion in relief to underwater homeowners, distressed borrowers and affected communities.

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

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

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

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

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

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

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

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

About the RMBS Working Group:

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

# # #

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1kYy9wci90ZXhhcy1tYW4tc2VudGVuY2VkLXByaXNvbi1hc3NhdWx0aW5nLWxhdy1lbmZvcmNlbWVudC1kdXJpbmctamFuLTYtY2FwaXRvbC1icmVhY2g
  Press Releases:
            WASHINGTON – A Texas man was sentenced to prison today for assaulting law enforcement during the breach of the U.S. Capitol on Jan. 6, 2021. His actions and the actions of others disrupted a joint session of the U.S. Congress convened to ascertain and count the electoral votes related to the 2020 presidential election.

            Jason Farris, 45, of Arlington, Texas, was sentenced to 18 months in prison and 24 months of supervised release by U.S. District Judge Amy Berman Jackson. Farris pleaded guilty to one count of assaulting, resisting, or impeding certain officers on Oct. 27, 2023.

            According to court documents, Farris traveled from Dallas, Texas, to Washington, D.C., to attend the ‘Stop the Steal” rally at the Ellipse. After the rally, Farris marched with a group of protestors to the U.S. Capitol building and made his way to the Lower West Plaza on the Capitol grounds. Here, Farris advanced to the front of a mob of rioters and directly confronted a group of police officers assembled in a line. Farris approached the officers and stated to the police officers, “I bet your family is proud of you, f— f— ass. You ain’t shit. Ain’t none of you shit.” As he said this, Farris hit the baton held by one of the police officers.

            Moments later, other rioters grabbed one of the metal bicycle racks being used by the police and attempted to pull it away. Several police officers held onto the bicycle rack to prevent it from being taken by rioters. Farris then approached an officer from behind and shoved him with two hands, knocking him to the ground. The officer fell and released the bicycle rack barricade, allowing rioters to remove it into the crowd. After the officer was helped to their feet, moments later, a rioter in the crowd threw a large wooden beam, which struck the officer in the head. The impact of the object knocked the officer to the ground and caused them to lose consciousness briefly. Two days later, the officer was diagnosed with a concussion.

            After Farris assisted the other rioters to remove the bike rack barrier, this created a gap in the police line, which officers attempted to fill with their bodies. But despite the officers’ efforts, rioters succeeded in overwhelming the police and surged through the gap that Farris had helped to create, flooding into the West Plaza of the Capitol. The police line then retreated, and many of these rioters subsequently entered the Capitol building.

            Farris advanced deeper into the Capitol grounds with the mob, climbed up the external stairs, and joined a mob on the Upper West Terrace. Here, Farris mounted a mechanical window-washing platform that was suspended from the roof of the West side of the Capitol building. Farris and two other men caused the platform to ascend the side of the building while members of the crowd below cheered. While on the window-washing platform, Farris used a flagpole to hit a window of the Capitol building several times in an apparent effort to break it.

            Farris later entered the Capitol and remained a short while before leaving.

            The FBI arrested Farris on Feb. 6, 2023, in Arlington.

            The U.S. Attorney’s Office for the District of Columbia and the Department of Justice National Security Division’s Counterterrorism Section prosecuted this case. The U.S. Attorney’s Office for the Northern District of Texas provided valuable assistance.

             The FBI’s Dallas and Washington Field Offices investigated this case. The Metropolitan Police Department and the U.S. Capitol Police provided valuable assistance.

            In the 37 months since Jan. 6, 2021, more than 1,313 individuals have been charged in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including more than 469 individuals charged with assaulting or impeding law enforcement, a felony. The investigation remains ongoing.

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZG55L3ByL2Zvcm1lci1zZWN1cml0eS1lbmdpbmVlci1pbnRlcm5hdGlvbmFsLXRlY2hub2xvZ3ktY29tcGFueS1hcnJlc3RlZC1kZWZyYXVkaW5n
  Press Releases:
Damian Williams, the United States Attorney for the Southern District of New York, Chad Plantz, the Special Agent in Charge of the San Diego Field Office of Homeland Security Investigations (“HSI”), and Tyler Hatcher, the Special Agent in Charge of the Los Angeles Field Office of the Internal Revenue Service - Criminal Investigation (“IRS-CI”), announced the unsealing of an Indictment charging SHAKEEB AHMED with wire fraud and money laundering in connection with his attack on a decentralized cryptocurrency exchange (the “Crypto Exchange”).  AHMED was arrested this morning in New York, New York, and will be presented this afternoon before U.S. Magistrate Judge Robert W. Lehrburger. 



U.S. Attorney Damian Williams said: “This is the second case we are announcing this week to shed light on fraud in the cryptocurrency and digital asset ecosystem.  As alleged in the indictment, Shakeeb Ahmed, who was a senior security engineer at an international technology company, used his expertise to defraud the exchange and its users and steal approximately $9 million in cryptocurrency.  We also allege that he then laundered the stolen funds through a series of complex transfers on the blockchain where he swapped cryptocurrencies, hopped across different crypto blockchains, and used overseas crypto exchanges.  But none of those actions covered the defendant’s tracks or fooled law enforcement, and they certainly didn’t stop my Office or our law enforcement partners from following the money.” 



HSI Special Agent in Charge Chad Plantz said: “Financial crime strikes at the core of our national and economic banking security.  With an attack of this magnitude, it’s crucial we ensure continued consumer confidence in our financial system.  Ruthless and reckless attempts aimed to sabotage legitimate commerce for greed must be stopped.  It’s cases like these that demonstrate HSI’s commitment and ability to work with a coalition of the willing to dismantle these complicated and technical fraud schemes and identify those responsible regardless of where they operate.”

IRS-CI Special Agent in Charge Tyler Hatcher said: “As alleged, Mr. Ahmed used his skills as a computer security engineer to steal millions of dollars.  He then allegedly tried to hide the stolen funds, but his skills were no match for IRS Criminal Investigation's Cyber Crimes Unit.  We, along with our partners at HSI and the Department of Justice, are at the forefront of cyber investigations and will track these fraudsters anywhere they try to hide and hold them accountable.”

As alleged in the Indictment:[1]

The Crypto Exchange was incorporated overseas and operates on the Solana blockchain.  At all relevant times, the Crypto Exchange allowed users to exchange different kinds of cryptocurrencies and paid fees to users who deposited cryptocurrency to provide liquidity on the Crypto Exchange. 

In July 2022, AHMED carried out an attack on the Crypto Exchange by exploiting a vulnerability in one of the Crypto Exchange’s smart contracts and inserting fake pricing data to fraudulently cause that smart contract to generate approximately $9 million dollars’ worth of inflated fees that AHMED did not legitimately earn, which fees AHMED was able to withdraw from the Crypto Exchange in the form of cryptocurrency.  This conduct defrauded the Crypto Exchange and its users, whose cryptocurrency AHMED had fraudulently obtained.  Additional details regarding the attack, including AHMED’s use of cryptocurrency “flash loans” to further defraud the Crypto Exchange, are described in the Indictment publicly filed today.  

After he stole the fees he never legitimately earned, AHMED had communications with the Crypto Exchange in which he decided to return all of the stolen funds except for $1.5 million if the Crypto Exchange agreed not to refer the attack to law enforcement.  

At the time of the attack, AHMED was a senior security engineer for an international technology company whose resume reflected skills in, among other things, reverse engineering smart contracts and blockchain audits, which are some of the specialized skills AHMED used to execute the attack.  

AHMED laundered the millions in fees that he stole from the Crypto Exchange to conceal their source and ownership, including through (i) conducting token-swap transactions, (ii) “bridging” fraud proceeds from the Solana blockchain over to the Ethereum blockchain, (iii) exchanging fraud proceeds into Monero, an anonymized and particularly difficult cryptocurrency to trace, and (iv) using overseas cryptocurrency exchanges.

After the attack, AHMED searched online for information about the attack, his own criminal liability, criminal defense attorneys with expertise in similar cases, law enforcement’s ability to successfully investigate the attack, and fleeing the United States to avoid criminal charges.  For example, approximately two days after the attack, AHMED conducted an internet search for the term “defi hack,” read several news articles about the hack of the Crypto Exchange, and visited several pages on the Crypto Exchange’s website.  As another example, AHMED conducted internet searches or visited websites related to the charges in the indictment, including by searching for the term “wire fraud” and for the term “evidence laundering.”  Finally, AHMED also conducted internet searches or visited websites related to his ability to flee the United States, avoid extradition, and keep his stolen cryptocurrency: he searched for the terms “can I cross border with crypto,” “how to stop federal government from seizing assets,” and “buying citizenship”; and he visited a website titled “16 Countries Where Your Investments Can Buy Citizenship . . .”

*                *                *

AHMED, 34, of New York, New York, is charged with wire fraud and money laundering, each of which carry a maximum sentence of 20 years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of HSI and IRS-CI.  Mr. Williams also thanked the U.S. Attorney’s Office for the Southern District of California for their assistance in the investigation.

The case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises Unit and Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys David R. Felton and Kevin Mead are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.





[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described therein should be treated as an allegation.





U.S. v. Ahmed Indictment









Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2NhbGlmb3JuaWEtYnVzaW5lc3NtYW4tc2VudGVuY2VkLXByaXNvbi1jb25jZWFsaW5nLW92ZXItMjM1LW1pbGxpb24taXNyYWVsaS1iYW5rLWFjY291bnRz
  Press Releases:
Evaded More than $8.3 Million in Federal Taxes Over Seven Years

 

A Los Angeles, California businessman was sentenced to 24 months in prison today for hiding more than $23.5 million in offshore bank accounts, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

According to court documents, Masud Sarshar, a U.S. citizen, maintained several undeclared bank accounts at Bank Leumi and two other Israeli banks, both in his name and in the names of entities that he created. Sarshar owned and operated Apparel Limited Inc., a business that designed, manufactured and sold clothing and other apparel. For decades, with the assistance of at least two relationship managers from Bank Leumi and a second Israeli bank (Israeli Bank A), Sarshar hid tens of millions of dollars in assets in these accounts in an effort to conceal income and obstruct the Internal Revenue Service (IRS). Between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to those undeclared accounts and earned more than $2.5 million in interest income from the funds. Sarshar reported none of this income on his 2006 through 2012 individual and corporate tax returns. He also filed false Reports of Foreign Bank and Financial Accounts, commonly known as FBARs, with the U.S. Department of Treasury on which he omitted his ownership and control of these offshore accounts.

 

“Masud Sarshar used every trick to avoid paying his taxes: he moved his money from foreign bank to foreign bank; switched passports and had his statements smuggled to the United States on a thumb drive secreted in the necklace of a bank manager,” said Acting Deputy Assistant Attorney General Goldberg. “He even tapped the funds in his offshore accounts through financial maneuvers that he thought would not leave a paper trail. However, Sarshar found out today -- with the imposition of a two-year prison sentence -- that secret foreign bank accounts can no longer be safely hidden from the Department of Justice and the IRS.”

 

“Mr. Sarshar’s conduct was both egregious and staggering,” said Chief Richard Weber of IRS Criminal Investigation. “He knew the laws and purposefully hid his income to avoid paying taxes, cheating not only the U.S. government, but other law abiding tax payers who uphold their tax obligations. Hiding income in offshore banks is not tax planning, it’s fraud.”

 

Sarshar’s relationship managers at Israeli Bank A (RM1) and Bank Leumi (RM2) visited him frequently in Los Angeles. At Sarshar’s request, neither bank sent him his account statements by mail. Instead, RM1 and RM2 provided Sarshar with his account information in person. RM2 concealed Sarshar’s account statements on a USB drive hidden in a necklace that she wore when she visited Sarshar in the United States. Sarshar’s meetings with RM1 sometimes occurred in Sarshar’s car. RM1 and RM2 used their visits to offer Sarshar other bank products, including “back-to-back” loans. Through back-to-back loans, which Bank Leumi made to Sarshar through its branch in the United States and which Sarshar collateralized with funds from his account at Israeli Bank A, Sarshar was able to bring back to the United States approximately $19 million of his assets without creating a paper trail or otherwise disclosing the existence of the offshore accounts to U.S. authorities. At the direction of RM1 and RM2, Sarshar also obtained Israeli and Iranian passports in an effort to avoid being flagged as a U.S. citizen by the banks’ compliance departments. The banks still flagged Sarshar as a U.S. citizen after Sarshar received these two passports, so RM1 and RM2 advised him to transfer his remaining funds from Israeli Bank A to Israeli Bank B, which Sarshar did in late 2011. In addition, with the help of someone identified as Individual 1, Sarshar transferred approximately $5.8 million from his Bank Leumi accounts to an account at Hong Kong Bank A, which Individual 1 then helped transfer to Sarshar in the United States, disguising it as a loan to Apparel Limited.

 

In addition to the term of prison imposed, Sarshar was ordered to serve three years of supervised release and to pay more than $8.3 million in restitution to the IRS, plus interest and penalties. Sarshar also agreed to pay an FBAR penalty of more than $18.2 million for failing to report his Israeli bank accounts.

 

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief Tino M. Lisella and Trial Attorney Timothy M. Russo of the Tax Division, who prosecuted the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Central District of California for their substantial assistance in the case.

 

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uZG9oL3ByLzU5LWNoYXJnZWQtaWxsZWdhbC10cmFmZmlja2luZy1wb3NzZXNzaW9uLWFuZC11c2UtZmlyZWFybXMtZHJ1Zy10cmFmZmlja2luZy1hbmQ
  Press Releases:
CLEVELAND – Federal, county, and local law enforcement officials today announced that 59 individuals were charged and arrested in connection with firearms-trafficking, narcotics, conspiracy, or other firearms offenses after a three month, violent-crime-reduction initiative in Cleveland this summer. The vast majority were charged in United States District Court, while the remaining individuals were charged in state court. These individuals were apprehended in a series of coordinated arrests made during the last two weeks.

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

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

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

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

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

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

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



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



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



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

 

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



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

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

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

 

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

 

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

SANTIAGO is also charged with Distribution of Drugs.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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



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



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

 

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



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



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



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



STERETT was further charged with Distribution of Drugs.



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

 

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



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

 

MARCEL BATTLE, 30, Canton, Drug Trafficking.

 

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

 

NATHAN ROBY, 44, Cleveland, Drug Trafficking.

 

RAYMOND CALLAHAN, 34, Cleveland, Drug Trafficking.

 

RAPHAEL DEEN, 30, Cleveland, Drug Trafficking.

 

TERRY LYONS, 33, Cleveland, Drug Trafficking.



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



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

 

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1lZG1vL3ByL2Zvcm1lci1zdC1sb3Vpcy1hbGRlcm1hbi1hZG1pdHMtdGFraW5nLWNhc2gtY2FyLXBob25lLWJyaWJlcw
  Press Releases:
ST. LOUIS – A former St. Louis alderman pleaded guilty Tuesday to all charges against him and admitted taking bribes in the form of a series of cash payments, a car, a phone and campaign contributions to help a local business owner get a property tax abatement.

John Collins-Muhammad pleaded guilty in front of U.S. District Judge Stephen R. Clark to two bribery-related charges and one charge of honest services bribery/wire fraud. As part of his plea, he admitted assisting a business owner obtain a multi-year property tax abatement. The business owner, referred to in court documents as “John Doe,” was developing a property in Collins-Muhammad’s 21st ward.

Beginning in January 2020, Collins-Muhammad accepted a total of $13,500 in cash, $3,000 in campaign contributions, a Volkswagen CC sedan and an Apple iPhone 11 from Doe in exchange for his continued agreement, assistance and use of his official position to provide the property tax abatement for Doe’s property.

After Doe’s development in Collins-Muhammad’s ward received opposition from residents of his ward, Collins-Muhammad falsely represented to the residents that he would not put forward the development for tax incentives.  Nonetheless, Collins-Muhammad continued to take legislative action to provide the tax abatement for the development and continued to accept cash and other things of value from Doe.

While the legislative actions were pending, Collins-Muhammad told Doe not to start construction so Doe wouldn’t jeopardize the promised tax break.

His co-defendant, former Board of Aldermen President Lewis Reed, joined Collins-Muhammad’s efforts to obtain the promised tax incentive for Doe during August 2021.  Thereafter, Doe made cash payments to Reed and continued the cash payments to Collins-Muhammad, the plea agreement says. Reed even promised to override a mayoral veto to pass the tax abatement legislation, the plea says.

Ultimately, in 2022, the efforts of Collins-Muhammad and Reed paid off, and the Board of Aldermen passed legislation providing the promised tax abatement for John Doe’s property development.

Collins-Muhammad did not report the campaign contributions to the Missouri Ethics Commission or deposit any of the cash payments into a bank account.

Collins-Muhammad also introduced Doe to other public officials and suggested he pay cash for their official assistance for other projects. After a June 18, 2020 meeting arranged by Collins-Muhammad with a public official who could purportedly help Doe win government contracts for his trucking company, Doe gave the official $10,000. Collins-Muhammad got $3,000 for setting up the meeting.

The official returned the cash that day and told Collins-Muhammad to instead have Doe write 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 $2,500 in cash, but Collins-Muhammad used the money to buy a 2008 Chevrolet Trailblazer for his own use.

Collins-Muhammad also introduced Doe to co-defendant Jeffrey Boyd, the alderman of a ward in which Doe wished to purchase city-owned property for a development, and told Doe to give Boyd $2,500 cash. Doe gave Collins-Muhammad $1,000 for setting up the meeting, and began providing cash payments to Boyd, the plea agreement says. Boyd ultimately helped Doe purchase the property and also passed legislation in the Board of Aldermen to provide a tax abatement for Doe’s proposed development, the plea agreement says.

Collins-Muhammad is scheduled to be sentenced Dec. 6. The honest services bribery/wire fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine. One of his bribery charges carries a 10-year maximum and the other has a five-year maximum.

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

 John Collins-Muhammad plea agreement

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZG55L3ByL25ldy1qZXJzZXktbWFuLXBsZWFkcy1ndWlsdHktbGVhZGluZy1vbmUtbGFyZ2VzdC1uby1mYXVsdC1pbnN1cmFuY2UtZnJhdWRzLW5ldy15b3Jr
  Press Releases:
Damian Williams, the United States Attorney for the Southern District of New York, announced that BRADLEY PIERRE pled guilty today to conspiracy to commit bribery and conspiracy to defraud the Internal Revenue Service (“IRS”) in connection with his orchestration of a $60 million fraud targeting No-Fault automobile insurance companies. PIERRE pled guilty before the Honorable Paul G. Gardephe and is scheduled to be sentenced on May 7, 2024.



U.S. Attorney Damian Williams said: “For over a decade, Bradley Pierre led one of the largest No-Fault insurance frauds in the history of New York, bribing medical professionals and others, scamming insurance companies, defrauding the IRS, and ultimately denying many accident victims fair and proper treatment because of his rigged system. But innocent victims will not stand alone. Those who seek to shamelessly reap the benefits of scams like this will be brought to justice.”    



According to the Indictment, the plea agreement, and statements made in court:  

New York and New Jersey No-Fault insurance laws require a driver’s automobile insurance company to pay automobile insurance claims automatically for certain types of motor vehicle accidents, provided that the claim is legitimate and below a particular monetary threshold.  Pursuant to these requirements, insurance companies will often pay medical service providers directly for the treatment they provide to automobile accident victims without the need to bill the victims themselves.  This process resolves automobile claims without apportioning blame or fault for the accident, thereby avoiding protracted disputes and the costs associated with an extended investigation of the accident. 

From at least in or about 2008 through in or about 2021, PIERRE agreed with others (the “Clinic Controllers”) to unlawfully own and run medical clinics located in the New York area including, among others, Veda Medical, Sky Medical, Sun Medical, and Rutland Medical (the “Clinics”).  PIERRE knew that clinics are unable to bill insurance companies for No-Fault benefits if the medical facilities are controlled by non-physicians.  PIERRE nonetheless agreed with others, including doctors, to submit bills to insurance companies falsely representing that the Clinics were owned and operated by licensed doctors, and for doctors to lie under oath during Examinations under Oath (“EUOs”) about the ownership, control, and finances of the Clinics.  PIERRE personally coached doctors to lie under oath in these EUOs.

PIERRE used his control of the Clinics for personal profit.  Between 2008 and 2021, PIERRE took over $20,000,000 from the Clinics by either transferring the funds directly to bank accounts under his control or using the Clinics' bank accounts to pay his personal finances.  PIERRE also used his control of the Clinics to steer prescriptions to pharmacies in return for over a million dollars in kickbacks and to steer patients to seek legal representation from his wife’s law firm, the Law Firm of Nonna Shikh (the“Shikh Firm”).  The Shikh Firm then filed lawsuits against insurance companies on these patients’ behalf.  PIERRE maintained an office at the Shikh Firm and was actively involved in the legal practice as a “manager.”

PIERRE used his control of the Clinics and his managerial role at the Shikh Firm to also steer patients to seek MRIs at a medical facility over which he exercised substantial control (the “MRI Facility”).  PIERRE also agreed with the purported sole owner of the MRI Facility, who was a doctor, that the doctor would falsely report injuries in MRI reports.  These falsified injuries allowed the Clinics to bill insurance companies for additional, unnecessary medical services and allowed attorneys to falsely claim injuries in lawsuits against insurance companies.  PIERRE and the doctor agreed that the doctor would lie to insurance companies during EUOs about PIERRE’s role in the MRI Facility. 

PIERRE hid his control over several of the Clinics and the MRI Facility using phony loan arrangements.  These agreements claimed that PIERRE was making non-recourse loans to the Clinics and the MRI Facility, which would only have to be paid back if insurance companies paid the medical practices’ claims.  The agreements also set PIERRE’s “fee” as twice the amount loaned to the practices.  However, in reality, PIERRE took almost $10,000,000 in excess of what these purported loan agreements permitted.

PIERRE further agreed to pay bribes to fill the Clinics and the MRI Facility with patients.  From at least in or about 2015 up to and including 2021, PIERRE agreed with others to pay bribes to hospital employees, 911 dispatchers, and other individuals (collectively, “lead sources”) for the confidential names and numbers of motor vehicle accident victims.  PIERRE agreed that others, including Anthony Rose, a/k/a “Todd Chambers,” would then call victims and lie to them to induce victims to receive medical treatment at the Clinics and legal representation from the Shikh Firm.  PIERRE helped Rose expand his bribery operation to New Jersey by recommending clinics and attorneys in the state that would pay kickbacks for referrals.  PIERRE also recommended that Rose open a shell company to hide the illegality of the payments, which Rose in fact did.  PIERRE paid Rose over $800,000 as part of the bribery scheme.

PIERRE further recruited his own lead sources to participate in the bribery scheme.  For instance, in or about 2017, PIERRE recruited Andrew Prime, knowing that Prime was bribing 911 operators and a hospital employee for confidential information.  PIERRE paid Prime over $800,000 as part of the bribery scheme.  PIERRE also personally recruited and bribed several of his own lead sources, including 911 operators and a source in 2019 that PIERRE codenamed the “Motherload” or “ML.”

PIERRE also agreed to bribe medical offices to send patients to the MRI Facility for MRIs.  These medical offices included, among others, Epione Medical Center and Modern Brooklyn Medical.  PIERRE facilitated these bribe payments through several intermediaries, including Anthony Rose, Jelani Wray, and others.  PIERRE paid Jelani Wray over $800,000 in connection with these bribes.

PIERRE then engaged in tax evasion.  PIERRE utilized two companies in connection with the healthcare fraud and bribery schemes: Medical Reimbursement Consultants (“MRC”) and Marketing 4 You (“M4Y”).  PIERRE hid income from the IRS by concealing multiple bank accounts for MRC and using a series of check cashers for checks made out to MRC and M4Y.  PIERRE also paid personal expenses from MRC and M4Y’s bank accounts but improperly reported these payments as “business expenses.”  These included payments for his wedding, home renovations, jewelry, furniture, luxury clothing, travel, and gifts.  In total, PIERRE underreported income, falsely reported expenses of over $4 million, and deprived the IRS of approximately $1.5 million in taxes due.

*                *                *

BRADLEY PIERRE, 41, of Closter, New Jersey, pled guilty to one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison, and one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the work of the Federal Bureau of Investigation and the Internal Revenue Service. 

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the White Plains Division.  Assistant U.S. Attorneys Mathew Andrews, Qais Ghafary, and Michael Lockard are in charge of the prosecution.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2NhbGlmb3JuaWEtcmVzaWRlbnQtcGxlYWRzLWd1aWx0eS1maWxpbmctZmFsc2UtdGF4LXJldHVybnMtd2hpY2gtZmFpbGVkLXJlcG9ydC1zZWNyZXQtZ2VybWFu
  Press Releases:
A Beverly Hills, California, resident pleaded guilty today to filing false tax returns which did not report his offshore accounts in Germany and Israel and did not report the income earned on those accounts, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman and U.S. Attorney Nicola T. Hanna of the Central District of California.    

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

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

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

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

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

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3BvbGl0aWNhbC1zY2llbnRpc3QtYXV0aG9yLWNoYXJnZWQtYWN0aW5nLXVucmVnaXN0ZXJlZC1hZ2VudC1pcmFuaWFuLWdvdmVybm1lbnQ
  Press Releases:
A criminal complaint was unsealed today in federal court in Brooklyn charging Kaveh Lotfolah Afrasiabi, also known as Lotfolah Kaveh Afrasiabi, with acting and conspiring to act as an unregistered agent of the Government of the Islamic Republic of Iran, in violation of the Foreign Agents Registration Act (FARA).  Afrasiabi was arrested yesterday at his home in Watertown, Massachusetts, and will make his initial appearance this morning in federal court in Boston, Massachusetts, before U.S. Magistrate Judge Jennifer C. Boal.

John C. Demers, Assistant Attorney General for National Security; Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Joseph Bonavolonta, Special Agent in Charge, FBI, Boston Field Office, announced the arrest and charges.

“For over a decade, Kaveh Afrasiabi pitched himself to Congress, journalists, and the American public as a neutral and objective expert on Iran,” said John C. Demers, Assistant Attorney General for National Security.  “However, all the while, Afrasiabi was actually a secret employee of the Government of Iran and the Permanent Mission of the Islamic Republic of Iran to the United Nations (IMUN) who was being paid to spread their propaganda.  In doing so, he intentionally avoided registering with the Department of Justice as the Foreign Agents Registration Act required.  He likewise evaded his obligation to disclose who was sponsoring his views.  We now begin to hold him responsible for those deeds.”

“Afrasiabi allegedly sought to influence the American public and American policymakers for the benefit of his employer, the Iranian government, by disguising propaganda as objective policy analysis and expertise,” said Acting U.S. Attorney DuCharme.  “This Office is committed to the robust enforcement of the Foreign Agents Registration Act, which provides the American people the tools they need to evaluate opinions and arguments in the marketplace of ideas by requiring foreign agents to declare their paymasters.  Those, like the defendant, who conceal the full extent of their work for a foreign government when the law requires disclosure will face consequences for their actions.”

“Anyone working to advance the agenda of a foreign government within the United States is required by law to register as an agent of that country,” said FBI Assistant Director in Charge Sweeney.  “Mr. Afrasiabi never disclosed to a congressman, journalists or others who hold roles of influence in our country that he was being paid by the Iranian government to paint an untruthfully positive picture of the nation.  Our laws are designed to create transparency in foreign relations, and they are not arbitrary or malleable.  As today's action demonstrates, we will fully enforce them to protect our national security.”

“Our arrest of Kaveh Afrasiabi makes it clear that the United States is not going to allow undeclared agents of Iran to operate in our country unchecked.  For more than a decade, Mr. Afrasiabi was allegedly paid, directed, and controlled by the Government of Iran to lobby U.S. government officials, including a congressman; and to create and disseminate information favorable to the Iranian government,” said FBI Special Agent in Charge Bonavolonta.  “The FBI will continue to do everything it can to uncover these hidden efforts and hold accountable those who work for our adversaries to the detriment of our national security.”  

According to the complaint, Afrasiabi is a citizen of the Islamic Republic of Iran and a lawful permanent resident of the United States.  Afrasiabi holds a PhD, and frequently publishes books and articles, and appears on English-language television programs discussing foreign relations matters, particularly Iran’s relations with the United States.  Afrasiabi has identified or portrayed himself as a political scientist, a former political science professor or as an expert on foreign affairs.

Since at least 2007 to the present, Afrasiabi has also been secretly employed by the Iranian government and paid by Iranian diplomats assigned to the Permanent Mission of the IMUN.  Afrasiabi has been paid approximately $265,000 in checks drawn on the IMUN’s official bank accounts since 2007, and has received health insurance through the IMUN’s employee health benefit plans since at least 2011. 

In the course of his employment by the Iranian government, Afrasiabi has lobbied a U.S. congressman and the U.S. Department of State to advocate for policies favorable to Iran, counseled Iranian diplomats concerning U.S. foreign policy, made television appearances to advocate for the Iranian government’s views on world events, and authored articles and opinion pieces espousing the Iranian government’s position on various matters of foreign policy.  Afrasiabi has long known that FARA requires agents of foreign principals to register with the U.S. Department of Justice and has discussed information obtained from FARA disclosures with others.  Nevertheless, Afrasiabi did not register as an agent of the Government of Iran.

For example, in January 2020, Afrasiabi emailed Iran’s Foreign Minister and Permanent Representative to the United Nations with advice for “retaliation” for the U.S. military airstrike that killed Major General Qasem Soleimani, the head of the Quds Force, the external operations arm of the Iranian government’s Islamic Revolutionary Guard Corps, proposing that the Iranian government “end all inspections and end all information on Iran’s nuclear activities pending a [United Nations Security Council] condemnation of [the United States’] illegal crime.”  Afrasiabi claimed that such a move would, among other things, “strike fear in the heart of [the] enemy.”

Afrasiabi has admitted in his own communications that his extensive body of published works and television appearances, in which he has consistently advocated perspectives and policy positions favored by the Iranian government, has been attributable to the funding he receives from the Iranian government.  For example, in a July 28, 2020, email to Iran’s Foreign Minister, Afrasiabi included “links for many of [his] works, including books, hundreds of articles in international newspapers and academic journals,” telling Iran’s Foreign Minister, “Without support none of this would have been possible! This has been a very productive relationship spanning decades that ought not to be interrupted.”

The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of both charged offenses, Afrasiabi faces a maximum sentence of 10 years in prison.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant U.S. Attorneys Ian C. Richardson and Michael T. Keilty are in charge of the prosecution, with assistance from Trial Attorney David C. Recker of the National Security Division’s Counterintelligence and Export Control Section.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci91cy1hdHRvcm5leXMtb2ZmaWNlLWZpbGVzLWxhd3N1aXQtYWdhaW5zdC1yb29zZXZlbHQtY2FyZS1jZW50ZXJzLWVuZm9yY2UtZW1wbG95bWVudA
  Press Releases:
NEWARK, N.J. – The U.S. Attorney’s Office today filed a lawsuit in U.S. District Court for the District of New Jersey charging Roosevelt Care Centers for violating Title I of the Americans with Disabilities Act (ADA), U.S. Attorney Philip R. Sellinger announced.

The lawsuit alleges that Roosevelt Care Centers, a long-term care facility operated by the Middlesex County Improvement Authority, unlawfully terminated a dietary worker whose disability inhibited her ability to lift objects heavier than 20 pounds.

“No one should be denied their right to work because of a disability,” U.S. Attorney Philip R. Sellinger said. “The Americans with Disabilities Act was enacted to prohibit employers from denying employment to people with disabilities without making a reasonable accommodation. The U.S. Attorney’s Office is committed to protecting the civil rights and ensuring equal employment opportunities for all individuals with disabilities.”

Before sustaining an injury that caused the permanent lifting impairment, the employee had been successfully working at Roosevelt Care Centers for approximately 18 years and remained able to perform the essential functions of her position. Nonetheless, Roosevelt Care Centers terminated the dietary worker’s employment due to her disability without engaging in an interactive process to provide her with a reasonable accommodation.

Title I of the ADA prohibits employers from discriminating against a qualified individual on the basis of disability in regard to the hiring, advancement or discharge of employees; employee compensation; and other terms, conditions, or privileges of employment. An employer may not demote, terminate, or deny employment opportunities to an employee who is otherwise qualified if the demotion or termination is based on the need to make reasonable accommodations for the employee. 

This matter was handled by the U.S. Attorney’s Civil Rights Division based on a referral from the Newark Area Office of the Equal Employment Opportunity Commission. U.S. Attorney Sellinger created a Civil Rights Division last year with the goal of protecting and upholding the civil rights of those in our community.

Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339.  Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD).

The government is represented by Assistant U.S. Attorney Thandiwe Boylan of the Civil Rights Division in Newark.

The complaint is an allegation of unlawful conduct. The allegation must still be proven in federal court.

 





roosevelt.complaint.pdf

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Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1zZG55L3ByL3F1ZWVucy1tYW4tcGxlYWRzLWd1aWx0eS1jby1sZWFkaW5nLW9uZS1sYXJnZXN0LW5vLWZhdWx0LWluc3VyYW5jZS1mcmF1ZHMtbmV3LXlvcms
  Press Releases:
Damian Williams, the United States Attorney for the Southern District of New York, announced that ALEXANDER GULKAROV pled guilty today to conspiracy to commit bribery, conspiracy to commit healthcare fraud, and aggravated identity theft in connection with his orchestration of a $40 million fraud targeting no-fault automobile insurance companies.  GULKAROV further admitted to obstructing law enforcement’s investigation by fabricating documents and intimidating witnesses.



U.S. Attorney Damian Williams said: “Alexander Gulkarov was one of the leaders of a multifaceted scheme to defraud automobile insurance companies; bribe hospital employees, 911 dispatchers, and others; launder hundreds of thousands of dollars; and obstruct law enforcement.  This complex scheme resulted in over $40 million in losses, which Gulkarov used to fund his lavish lifestyle, taking luxury vacations and renovating his multimillion-dollar home.  This Office has no tolerance for those who cheat the system to wrongfully enrich themselves, and we will continue to dismantle wide-ranging schemes such as this one.”



According to the Information to which GULKAROV pled guilty, the plea agreement, and statements made in court:  

The Healthcare Fraud Scheme

New York and New Jersey no-fault insurance laws require a driver’s automobile insurance company to pay automobile insurance claims automatically for certain types of motor vehicle accidents, provided that the claim is legitimate and below a particular monetary threshold.  Pursuant to these requirements, insurance companies will often pay medical service providers directly for the treatment they provide to automobile accident victims without the need to bill the victims themselves.  This process resolves automobile claims without apportioning blame or fault for the accident, thereby avoiding protracted disputes and the costs associated with an extended investigation of the accident. 

From 2014 through 2021, GULKAROV and others (collectively, the “Clinic Controllers”) agreed that they would unlawfully own, run, and profit from medical clinics in the New York area and that GULKAROV would also profit from pharmacies in the New York area that were unlawfully owned and controlled by other Clinic Controllers.  GULKAROV knew that clinics and pharmacies are unable to bill insurance companies for No-Fault benefits if the medical facilities are controlled by non-physicians.  GULKAROV nonetheless agreed with others to submit bills to insurance companies falsely representing that the clinics were owned and operated by licensed medical practitioners and for medical practitioners to lie under oath during Examinations under Oath about the ownership, control, and finances of the clinics.  GULKAROV personally coached medical practitioners to lie under oath.  GULKAROV and his fellow Clinic Controllers unlawfully obtained from insurance companies at least $40,000,000 as part of the scheme.

In connection with the scheme described above, GULKAROV personally approached medical practitioners, including physicians, and directed them to prescribe unnecessary medical treatments (including MRIs, EMG/NCV testing, spinal injections, and computerized radiologic mensuration analysis), unnecessary durable medical equipment (including cervical home traction devices and lumbar back support), and medically unnecessary medications (including prescription strength painkillers, topical creams, and topical gels).  GULKAROV received kickbacks from MRI facilities, pain management doctors, and other specialized care providers, who performed these unnecessary medical treatments.  GULKAROV further personally arranged for the unnecessary medications to be filled at pharmacies under the control of other Clinic Controllers.  The medical practitioners provided necessary procedures and treatments to patients as well.

GULKAROV also overbilled insurance companies for treatments provided by medical practitioners.  In connection with the scheme, GULKAROV owned and operated a billing company called “Billing for You.”  Billing for You submitted bills to insurance companies overstating the amount of time that practitioners spent treating patients.  Billing for You also used improper, unlisted billing codes to bill insurance companies in excess of what is permitted under No-Fault regulations.

The Bribery Scheme

GULKAROV and his fellow Clinic Controllers further agreed to pay bribes in connection with the above-described scheme.  From at least 2014 through November 2019, GULKAROV agreed with others to pay bribes to hospital employees, 911 dispatchers, and other individuals for the confidential names and numbers of motor vehicle accident victims.  As part of the scheme, GULKAROV and others provided approximately $150,000 for the creation of a call center, operated by Anthony Rose, a/k/a “Todd Chambers,” that called victims and lied to them to induce victims to receive medical treatment at, among other places, clinics controlled by GULKAROV and his associates.  GULKAROV further personally paid Anthony Rose hundreds of thousands of dollars in bribe payments in cash.

As part of the scheme, GULKAROV arranged for a New York City police officer to provide confidential information from New York City Police Department (“NYPD”) servers.  In particular, this officer sent GULKAROV over 400 photos of confidential NYPD motor vehicle accident reports using the encrypted messaging application, WhatsApp.  GULKAROV then re-transmitted the reports to Rose and others so that they could call patients, lie to them, and direct them to clinics controlled by GULKAROV and others.

Money Laundering and Obstruction Conduct

GULKAROV laundered the proceeds of the bribery and healthcare fraud from the bank accounts of the medical clinics and pharmacies to personal accounts using a variety of methods.  Among other things, GULKAROV personally told medical practitioners to sign blank checks from the clinics’ bank accounts, which GULKAROV used to pay personal expenses such as luxury vacations around the world, expensive meals, jewelry, and parties.  GULKAROV also used the blank checks to pay for hundreds of thousands of dollars of construction-related expenses for this three-story, multimillion-dollar home in Queens, New York.

GULKAROV arranged for checks from the clinics’ bank accounts to be cashed at over a dozen shell companies under his control or the control of co-conspirators, including, for instance, “Sign N Drive Auto GRP,” “Transport on Wheels,” and “Sancus Consulting & Trading Inc.”  Over two dozen of these shell companies were opened by foreign nationals, who entered the country on tourism visas, opened bank accounts for the shell companies, provided the debit cards to GULKAROV’s coconspirators, and then left the country.

GULKAROV additionally agreed to use Wisnicki & Associates and Wisnicki Neuhauser (collectively, the “Wisnicki Firm”) to launder proceeds from the No-Fault scheme.  GULKAROV and his fellow Clinic Controllers wrote over $150,000 in checks to the Wisnicki Firm from the No-Fault clinics’ bank accounts.  The Wisnicki Firm did not provide any legal services to the No-Fault clinics.  Instead, the Wisnicki Firm used this money to purchase real estate for one of GULKAROV’s coconspirators.  GULKAROV and his coconspirators deducted the payments to the Wisnicki Firm on the clinics’ tax returns as legal expenses.

Lastly, GULKAROV engaged in a multi-month obstruction scheme beginning in February 2021.  In February and March 2021, the Government served grand jury subpoenas on the medical practitioners involved in the No-Fault scheme.  GULKAROV immediately contacted at least half-a-dozen of his coconspirators and ordered them not to speak with law enforcement.  In return, GULKAROV gave his coconspirators money to pay for attorneys.  GULKAROV also obtained the phones of multiple practitioners and deleted his communications with them from their devices. 

Thereafter, on or about April 1, 2021, the Government served a grand jury subpoena on the Wisnicki Firm for documentation surrounding the $150,000 in payments made from the clinics to the Wisnicki Firm.  GULKAROV agreed with others that the Wisnicki Firm would fabricate retainer agreements for transmission to the grand jury.  The fabricated retainer agreements, which were backdated to 2016 and 2017, falsely represented that the No-Fault clinics had retained the Wisnicki Firm for legal services.

During the following months, in or about April and May 2021, GULKAROV approached multiple medical practitioners and ordered them to sign the backdated, fabricated retainer agreements.  The medical practitioners complied.  GULKAROV also provided these medical practitioners with checks, written from the Wisnicki Firm, returning the purported “retainer fees” paid to the Wisnicki Firm.  GULKAROV ordered the medical practitioners to deposit the checks, withdraw the money in small cash increments, and return the cash to GULKAROV.  At least one medical practitioner complied.

*                *                *

ALEXANDER GULKAROV, 37, of Queens, New York, pled guilty to one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison; one count of conspiracy to commit healthcare fraud, which carries a maximum sentence of five years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to run consecutively to any other prison term imposed.  As part of his plea agreement with the Government, GULKAROV agreed to pay forfeiture of $40,000,000 and restitution of $40,000,000.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendant will be determined by a judge.

Mr. Williams praised the work of the Federal Bureau of Investigation. 

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the White Plains Division.  Assistant U.S. Attorneys Mathew Andrews, Timothy Capozzi, and Ryan W. Allison are in charge of the prosecution.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL3R3by1yb21hbmlhbi1jeWJlcmNyaW1pbmFscy1jb252aWN0ZWQtYWxsLTIxLWNvdW50cy1yZWxhdGluZy1pbmZlY3Rpbmctb3Zlci00MDAwMDAtdmljdGlt
  Press Releases:
A federal jury today convicted two Bucharest, Romania, residents of 21 counts related to their scheme to infect victim computers with malware in order to steal credit card and other information to sell on dark market websites, mine cryptocurrency and engage in online auction fraud, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Justin E. Herdman of the Northern District of Ohio.

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

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

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

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

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

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

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

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

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

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

This resulted in a loss of millions of dollars.

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

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2J1ZmZhbG8tbWFuLXBsZWFkcy1ndWlsdHktdGF4LWV2YXNpb24tb3dlcy1vdmVyLTEtbWlsbGlvbi1kb2xsYXJzLWlycw
  Press Releases:
Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney James P. Kennedy, Jr. announced today that Dorian Wills, 52, of Buffalo, NY, pleaded guilty to tax evasion before U.S. District Judge Elizabeth A. Wolford. The charge carries a maximum penalty of five years in prison and a $250,000 fine. 

 

According to documents and information provided to the court, between April 2010 and October 2013, the defendant operated a debt collection business under various names, including Heritage Capital Services LLC; Performance Payment Processing LLC; Performance Payment Service LLC; Pinnacle Payment Service LLC; and Velocity Payment Solutions LLC. Wills resided in the Western District of New York but spent significant time in Cleveland, Ohio, and Atlanta, Georgia, where the debt collection companies were located. From approximately November 2010 through approximately October 2013, the defendant operated a business called Freestar World LLC, through which he did work for the debt collection companies.

 

The debt collection companies engaged in illegal debt collection practices such as making threatening and harassing phone calls, and collecting on debt that did not exist or debt to which the debt collection companies did not have title. To avoid detection by state and federal law enforcement authorities, Wills solicited two individuals to assist him with his businesses.

 

The defendant had these individuals incorporate several debt collection companies in Georgia and Ohio, open dozens of bank accounts in the names of the debt collection companies, and submit applications for merchant accounts in the names of the debt collection companies.

 

Between 2010 and 2013, none of the debt collection companies filed a tax return. In addition, Wills failed to file his 2011 and 2013 personal income tax returns, despite some of the debt collection companies earning approximately $4,000,000 in gross receipts.

 

For the tax year 2012, the defendant filed a personal income tax return but the return did not include income information from any businesses, some of which earned nearly $5,000,000 in gross receipts in 2012, except for Freestar.

 

As a result of unreported income and the unpaid 2012 taxes, the defendant owes $1,209,537.88 in federal income taxes for tax years 2011 through 2013.

 

Previously, Wills and the debt collection companies were the subject of a civil investigation by the Federal Trade Commission, with the defendant and the FTC stipulating to a final order for permanent injunction on August 8, 2014. 

           

U.S. District Judge Elizabeth A. Wolford scheduled sentencing for Aug. 23, 2018.  Wills faces a statutory maximum sentence of five years in prison.  He also faces a period of supervised release, restitution and monetary penalties.

 

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Kennedy thanked special agents of IRS Criminal Investigation, who conducted the investigation, AUSA Marie P. Grisanti, and Tax Division Trial Attorneys Jason M. Scheff and Thomas F. Koelbl, who are prosecuting the case.

 

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1lZG5jL3ByL3RyaWFuZ2xlLWNlby1zZW50ZW5jZWQtZmlsaW5nLWZhbHNlLXRheC1yZXR1cm5z
  Press Releases:
NEW BERN, N.C. – Raleigh business owner Alton Perkins, was sentenced today to 24 months in prison for failing to account for approximately $3 million diverted from his companies for his own personal use between 2015 and 2018.  Perkins was also ordered to make restitution to the Internal Revenue Service in the amount of $520,344 for taxes owed from 2015-2018.     

“We are holding accountable tax cheats who avoid paying their fair share,” said U.S. Attorney Michael Easley. “This CEO diverted company money to fund vacations, expensive jewelry and private school tuition. His attempts to defraud the government have led to time in federal prison.” 

According to evidence summarized in court, Perkins moved large amounts of money from his business accounts into his personal bank accounts.  These funds were then used for personal expenditures, including the purchase of a Wake Forest home, Rolex watches, vacations, and private school tuition.  None of the approximately three million dollars spent by Perkins on these personal items was accounted for in his taxes filed with the Internal Revenue Service.  

Perkins is the chairman and CEO of AmericaTowne, a company, according to its website, focused on increasing exports of American products to China.  AmericaTowne, which was funded by investor dollars, included a plan to build an American-style community in China that would include hotels, small businesses, and a theme park.  Perkins is currently involved in a civil lawsuit with the U.S. Securities and Exchange Commission (Case No. 5:19-CV-00243-FL) over the unregistered private placement offerings and the sale of securities for AmericaTowne and other business entities controlled by Perkins.   

Perkins pled guilty  on December 12, 2022 to a felony charge of Making and Subscribing a False Tax Return Under Penalty of Perjury, for his failure to account for his personal expenditures on his 2016 personal income tax return.  According to evidence presented in court, for tax year 2016, Perkins stated that his total income was $21,933. However, banking records show that Perkins spent $1,208,394 that year on personal items including, a golf cart, a family trip to Hawaii, private high school tuition, and a Rolex – all with funds taken from his corporate bank accounts.

Michael Easley, U.S. Attorney for the Eastern District of North Carolina, made the announcement after United States District Judge Louise W. Flanagan pronounced the sentence.  The Internal Revenue Service investigated the case and Assistant U.S. Attorneys William M. Gilmore and Karen Haughton prosecuted the case.

Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No 5:22-CR-00265-FL.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uZGZsL3ByL2Zvcm1lci1mbG9yaWRhLWF0dG9ybmV5LXBsZWFkcy1ndWlsdHktcmFja2V0ZWVyaW5nLXJlbGF0aW5nLW9wZXJhdGlvbi1oaXMtdGFsbGFoYXNzZWU
  Press Releases:
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.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uZG55L3ByL29zd2Vnby1jb3VudHktd29tYW4tcGxlYWRzLWd1aWx0eS1jaGFyZ2VzLXJlbGF0ZWQtdGhlZnQtc29jaWFsLXNlY3VyaXR5LWJlbmVmaXRz
  Press Releases:
SYRACUSE, NEW YORK – Lisa Waldron, age 44, of Palermo, New York, pled guilty today to eleven counts of Theft of Government Property, announced United States Attorney Carla B. Freedman and Sharon B. MacDermott, Special Agent in Charge of the Social Security Administration (SSA), Office of the Inspector General, New York Field Office.

The charges to which Waldron pled guilty relate to her theft of Supplemental Security Income (“SSI”) benefits intended for her disabled son, Jordan Brooks, while Waldron was acting as Brooks’s representative payee.  A representative payee is a person or organization who receives Social Security benefits on another person’s behalf and is required to ensure the benefits are used only to support the beneficiary.

As part of her guilty plea, Waldron admitted that, after Brooks died on May 9, 2021, Waldron continued to receive SSI benefits intended for Brooks.  Instead of properly notifying SSA of the issue and knowing she was not entitled to Brooks’s benefit payments, Waldron nonetheless used Brooks’s SSI benefits to pay her own personal expenses until SSA independently learned of the issue and terminated Brooks’s benefits.

Unrelated to the federal charges to which Waldron pled guilty today, Waldron is also facing state murder charges related to her involvement in Brooks’s death.

On the federal charges, Waldron faces a maximum term of imprisonment of ten years, a fine of up to $250,000, and a term of supervised of up to three years. As part of her plea agreement, Waldron has also agreed to pay full restitution. She is scheduled to be sentenced on August 22, 2023, by Chief United States District Judge Brenda K. Sannes in Syracuse, New York.A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.

This case is being investigated by the Social Security Administration Office of the Inspector General and is being prosecuted by Assistant U.S. Attorney Adrian S. LaRochelle and Special Assistant U.S. Attorney Paul J. Tuck.

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